SENIOR SECURED REVOLVING CREDIT AGREEMENT


                  DATED AS OF SEPTEMBER 24, 1996


                               AMONG


                 CAPSTAR MANAGEMENT COMPANY, L.P.,
                           AS BORROWER,

                      CAPSTAR HOTEL COMPANY,
                           AS GUARANTOR,

                     THE LENDERS PARTY HERETO

                                AND

                      BANKERS TRUST COMPANY,
                             AS AGENT











NY1-446326/045,710-644

<PAGE>

                                                             PAGE

                 CAPSTAR MANAGEMENT COMPANY, L.P.
                       CAPSTAR HOTEL COMPANY
                         CREDIT AGREEMENT



                         TABLE OF CONTENTS
                                                             Page

                             SECTION 1
                          INTERPRETATION......................  2
     1.1  Certain Defined Terms...............................  2
     1.2Accounting Terms; Utilization of GAAP for Purposes of
          Calculations Under Agreement; Pro Forma............. 49
     1.3  References to Articles, Sections, Exhibits, Schedules and
          Attachments......................................... 49
     1.4  Captions............................................ 50
     1.5  Drafter............................................. 50
     1.6  References to Persons Include Permitted Successors and
          Assigns............................................. 50
     1.7  References to Applicable Law and Contracts.......... 50
     1.8  Herein.............................................. 50
     1.9  Including Without Limitation........................ 50
     1.10 Gender.............................................. 50
     1.11 Singular and Plural................................. 51
     1.12 Knowledge........................................... 51

                             SECTION 2
            AMOUNTS AND TERMS OF COMMITMENTS AND LOANS........ 51
     2.1  Purchase and Sale of Virginia Loan; Commitments; Loans;
          Notes; the Register................................. 51
     2.2  Interest on the Loans............................... 56
     2.3  Fees................................................ 59
     2.4Repayments and Prepayments; General Provisions Regarding
          Payments............................................ 60
     2.5Use of Proceeds....................................... 63
     2.6Special Provisions Governing Eurodollar Rate Loans.... 63
     2.7  Increased Costs; Taxes; Capital Adequacy............ 65
     2.8  Obligation of the Lenders to Mitigate............... 69
     2.9  Acquisition of Properties........................... 69
     2.10 Releases of Pool A Properties and Other Collateral.. 75

                             SECTION 3
                         LETTERS OF CREDIT.................... 78
     3.1Issuance of Letters of Credit and Lenders' Purchase of
          Participations Therein.............................. 78
     3.2  Letter of Credit Fees............................... 80
     3.3Drawings and Reimbursement of Amounts Paid Under Letters of
          Credit.............................................. 81
     3.4  Obligations Absolute................................ 83
     3.5Indemnification; Nature of Issuing Lenders' Duties.... 84
     3.6Increased Costs and Taxes Relating to Letters of Credit 85

                             SECTION 4
                       CONDITIONS PRECEDENT................... 86
     4.1  Conditions to Effectiveness of Commitments.......... 86
     4.2  Conditions to All Loans............................. 96
     4.3  Conditions to Letters of Credit..................... 98

                             SECTION 5
                  REPRESENTATIONS AND WARRANTIES.............. 98
     5.1Organization, Powers, Qualification, Good Standing, Business
          and Subsidiaries.................................... 98
     5.2  Authorization of Borrowing, etc.....................100
     5.3  Financial Condition; Contingent Obligations.........102
     5.4  Properties; Agreements; Licenses....................103
     5.5  Litigation; Adverse Facts...........................105
     5.6  Taxes...............................................105
     5.7Performance of Agreements; Materially Adverse Agreements.106
     5.8  Governmental Regulation; Securities Activities......106
     5.9  Employee Benefit Plans..............................106
     5.10 Certain Fees........................................107
     5.11 Solvency............................................107
     5.12 Disclosure..........................................108
     5.13 Liens on the Collateral.............................108
     5.14 Zoning; Authorizations..............................110
     5.15 Physical Condition; Encroachment; Capital Expenditures111
     5.17 Leases..............................................111
     5.18 Environmental Reports; Engineering Reports; Appraisals;
          Market Studies......................................112
     5.19 No Condemnation or Casualty.........................112
     5.20 Utilities and Access................................112
     5.21 Intellectual Property...............................112
     5.22 Wetlands............................................113
     5.23 Cash Management System..............................113
     5.24 Labor Matters.......................................113
     5.25 Employment and Labor Agreements.....................114

                             SECTION 6
                       AFFIRMATIVE COVENANTS..................114
     6.1  Financial Statements and Other Reports..............114
     6.2  Common Stock........................................121
     6.3  Corporate Existence; Corporate Separateness etc.....121
     6.4  Taxes and Claims; Tax Consolidation.................122
     6.5  Maintenance of Properties; Repair; Alteration.......123
     6.6  Inspection; Lenders' Meeting; Appraisals............124
     6.7  Compliance with Laws, Authorizations, etc...........124
     6.8  Performance of Loan Documents and Related Documents.125
     6.9  Payment of Liens....................................126
     6.10 Insurance...........................................126
     6.11 Casualty and Condemnation; Restoration..............132
     6.12Renovations..........................................140
     6.13 Brundage Clause.....................................142
     6.14 Interest Rate Protection............................142
     6.15 Cash Management System; Agent Rights; Application of Cash
          Flow; Depository Account Names......................143
     6.16 Capital Reserve Account; Deferred Maintenance.......145
     6.17 O&M Requirements; Certain Post-Closing Environmental
          Covenants...........................................147
     6.18 Management of Properties............................148
     6.19 Intellectual Property...............................148
     6.20 Further Assurances..................................148

                             SECTION 7
                        NEGATIVE COVENANTS....................150
     7.1  Indebtedness........................................150
     7.2  Liens and Related Matters...........................153
     7.3  Investments and Certain Capital Expenditures........154
     7.4  Contingent Obligations..............................157
     7.5  Restricted Junior Payments..........................158
     7.6  Financial Covenants.................................159
     7.7  Fundamental Changes.................................162
     7.8  Zoning and Contract Changes and Compliance..........163
     7.9  No Joint Assessment; Separate Lots..................163
     7.10Transactions with Affiliated Persons.................164
     7.11 Sales and Lease-Backs...............................164
     7.12 Sale or Discount of Receivables.....................165
     7.13 Ownership of Subsidiaries...........................166
     7.14 Conduct of Business; Restrictions on Operations in Canada166
     7.15Properties...........................................167
     7.16 Renovation Expenditures.............................167
     7.17Management Agreements and Servicing Agreements.......167
     7.18 Intellectual Property; Franchise Agreements.........168
     7.19 Material Leases.....................................168
     7.20Changes in Certain Obligations and Documents; Issuance of
          Equity Securities...................................169
     7.21 Fiscal Year.........................................171

                             SECTION 8
                    EVENTS OF DEFAULT; REMEDIES...............171
     8.1  Events of Default...................................171
     8.2  Certain Remedies....................................176

                             SECTION 9
                           MISCELLANEOUS......................179
     9.1Assignments and Participations in Loans and Letters of Credit.
          179
     9.2  Expenses............................................180
     9.3  Indemnity...........................................181
     9.4  No Joint Venture or Partnership.....................184
     9.5  Ratable Sharing.....................................184
     9.6  Amendments and Waivers..............................185
     9.7  Independence of Covenants...........................185
     9.8  Notices.............................................185
     9.9  Survival of Representations, Warranties and Agreements.185
     9.10 Agent's Discretion; Successor Agents................186
     9.11 Obligations Several; Independent Nature of the Lenders'
          Rights..............................................186
     9.12 Remedies of the Borrower............................186
     9.13 Marshalling; Payments Set Aside.....................187
     9.14 Maximum Amount......................................187
     9.15 Severability........................................188
     9.16 Headings............................................188
     9.17 Applicable Law......................................188
     9.18 Successors and Assigns..............................188
     9.19 Consent to Jurisdiction and Service of Process......188
     9.20 Waiver of Jury Trial................................189
     9.21 Counterparts; Effectiveness.........................190
     9.22 Material Inducement.................................190
     9.23 Entire Agreement....................................190
     9.24 Confidentiality.....................................191


                                (i)

<PAGE>


                             EXHIBITS


I         FORM OF NOTE
II        FORM OF NOTICE OF BORROWING
III       FORM OF NOTICE OF CONTINUATION
IV        FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
V         FORM OF COMPLIANCE CERTIFICATE
VI        FORM OF BORROWING BASE CERTIFICATE
VII       FORM OF CAPSTAR GUARANTY
VIII      FORM OF AFFILIATE GUARANTY
IX        FORM OF SECURITY AGREEMENT
X         FORM OF TRADEMARK SECURITY AGREEMENT
XI        FORM OF OMNIBUS MANAGEMENT AND LIQUOR LICENSE AGREEMENT
XII       FORM OF CASH MANAGEMENT LETTER
XIII      FORM OF ENVIRONMENTAL INDEMNITY
XIV       FORM OF COLLATERAL ACCOUNT AGREEMENT
XV        FORMS OF OPINIONS OF LOAN PARTIES' COUNSEL
XVI       FORM OF ADDITION CERTIFICATE
XVII      FORM OF NOTICE OF RENOVATION/RESTORATION
XVIII     FORM OF COMPLETION CERTIFICATE

                               (ii)

<PAGE>


                             SCHEDULES

1.1A      MBL PROPERTIES
1.1B      MAXIMUM MORTGAGE AMOUNTS
2.1B      LENDERS' COMMITMENTS AND PRO RATA SHARES
4.1J      FRANCHISE AGREEMENTS
4.1K      MATERIAL LEASES AND ESTOPPELS
5.1A      ORGANIZATION AND CAPITALIZATION
5.1B      GOOD STANDING
5.2C      GOVERNMENT CONSENTS
5.3B      CONTINGENT OBLIGATIONS
5.4A1     POOL A PROPERTIES
5.4A2     POOL B PROPERTIES
5.4B      POOL A GROUND LEASES
5.4C      POOL B DOCUMENTS
5.4D      MANAGEMENT AGREEMENTS AND ESTOPPELS
5.4E      SERVICING AGREEMENTS
5.4H      LIQUOR LICENSES
5.5       LITIGATION
5.7       CERTAIN CONTRACTUAL OBLIGATIONS
5.14A     ZONING
5.15B     REQUIRED CAPITAL EXPENDITURES
5.16      INSURANCE
5.21A     INTELLECTUAL PROPERTY
5.22      WETLANDS
5.23      CASH MANAGEMENT SYSTEM
5.25      EMPLOYMENT AND LABOR AGREEMENTS
6.1       FORM OF FINANCIAL STATEMENT
6.12A     APPROVED RENOVATION BUDGETS AND PLANS
6.16B     DEFERRED MAINTENANCE
7.2       PERMITTED ENCUMBRANCES
7.10      AFFILIATE TRANSACTIONS


                               (iii)

<PAGE>


             SENIOR SECURED REVOLVING CREDIT AGREEMENT


     This  SENIOR  SECURED  REVOLVING  CREDIT  AGREEMENT  is  dated  as  of
September 24, 1996 and entered into among CAPSTAR MANAGEMENT COMPANY, L.P.,
a Delaware limited partnership (the ``BORROWER''), CAPSTAR HOTEL COMPANY, a
Delaware  corporation  (``CAPSTAR''),  THE  LENDERS LISTED ON THE SIGNATURE
PAGES  HEREOF  (individually  referred  to  herein   as  a  ``LENDER''  and
collectively  as the ``LENDERS'') and BANKERS TRUST COMPANY  (``BANKERS''),
as agent for the Lenders (in such capacity, the ``AGENT'').


                          R E C I T A L S

     A.   CapStar  is  the sole general partner of the Borrower and CapStar
LP  Corporation, a Delaware  corporation  and  wholly-owned  subsidiary  of
CapStar (``CAPSTAR SUB''), is the sole limited partner of the Borrower.

     B.   The  Borrower,  CapStar  and  their  subsidiaries desire that the
Lenders provide certain loan facilities, the proceeds  of  which,  together
with the proceeds of the Equity Offering (as hereinafter defined), will  be
used   for   the  general  corporate  purposes  of  the  Borrower  and  its
Subsidiaries,  which  include  but  are not limited to (i) the repayment of
existing   indebtedness,  (ii) the  acquisition,   ownership,   renovation,
restoration, management and operation of upscale full service hotels in the
United States  of  America  and,  to  the  extent permitted herein, Canada,
(iii) the acquisition and ownership of real  property  for the expansion of
such hotels, (iv) the provision or acquisition and ownership  of equity and
debt  investments  in  joint ventures or other entities formed to  acquire,
own, renovate, restore, manage, operate and dispose of such hotels, (v) the
acquisition and ownership  of  certain  mortgage loans secured primarily by
such hotels and (vi) the acquisition and  ownership of certain other equity
and debt securities.

     C.   CapStar  is currently the holder of  the  Virginia  Note  in  the
original principal amount  of  $18,500,000, under which the Borrower is the
obligor.

     D.   CapStar desires to sell to the Lenders, and the Lenders desire to
purchase  from  CapStar, the loan  evidenced  by  the  Virginia  Note  (the
``VIRGINIA LOAN''), together with all documents, instruments, certificates,
agreements, indemnities and other materials evidencing, governing, securing
or otherwise relating  to  the  Virginia Loan (collectively, the ``VIRGINIA
DOCUMENTS'').

     E.   Simultaneously with the sale of the Virginia Loan to the Lenders,
the Borrower and the Lenders desire  to amend and restate the Virginia Note
and the other Virginia Documents so that  all of the agreements of the Loan
Parties and the Lenders with respect to the Virginia Loan shall thenceforth
be as set forth in this Agreement and in the other Loan Documents.

     F.   CapStar, Capstar Sub and the subsidiaries  of  the  Borrower that
are   Loan   Parties  (as  hereinafter  defined)  desire  to  guaranty  the
obligations of the Borrower under this Agreement.
     G.   The  Borrower and the other Loan Parties desire to grant Liens in
the Collateral in favor of the Agent to secure their respective obligations
under the Loan Documents.

     NOW, THEREFORE,  in  consideration of the premises and the agreements,
provisions  and covenants herein  contained,  CapStar,  the  Borrower,  the
Lenders and the Agent agree as follows:


                             SECTION 1
                          INTERPRETATION

     This Agreement  and  the  other  Loan Documents shall be construed and
interpreted in accordance with this Section 1.

1.1  CERTAIN DEFINED TERMS.

     The  following  terms  used  in  this Agreement  and  the  other  Loan
Documents shall have the following meanings  when  used herein with initial
capital letters:

     ``ABM'' has the meaning assigned to that term in subsection 6.17A.

     ``ACADIA''   means   Acadia   Partners,   L.P.,  a  Delaware   limited
partnership.

     ``ACQUISITION'' means any acquisition by the  Borrower  or  any of its
Wholly  Owned  Subsidiaries  of any fee or, to the extent permitted herein,
leasehold interest in any hotel property.

     ``ACQUISITION AGREEMENTS'' means, collectively, the agreements entered
into by the Borrower and any of  its  Subsidiaries  in  connection  with an
Acquisition  by  (i) the Borrower or a Wholly Owned Subsidiary pursuant  to
subsection 2.9A or  (ii) by  a  Wholly  Owned  Subsidiary  of  the Borrower
pursuant to subsection 2.9B.

     ``ADDITIONAL POOL A PROPERTY'' has the meaning assigned to  that  term
in subsection 2.9A.

     ``ADDITION CERTIFICATE'' means an Officers' Certificate, substantially
in the form attached hereto as EXHIBIT XVI, delivered to the Agent pursuant
to subsection 2.9A.

     ``ADDITION DATE'' means the following:

          (i)  with respect to any Pool A Property listed on Schedule 5.4A,
     as of the Closing Date, the Closing Date; and

         (ii)  with respect to any Additional Pool A Property or any Pool B
     Property acquired after the Closing Date in accordance with subsection
     2.9,  the  latest to occur of (a) the date on which the Acquisition of
     such Property  is  consummated  and  (b) the  date  on  which  all the
     conditions  to  such Acquisition set forth in subsection 2.9A or 2.9B,
     as the case may be,  shall  have  been  satisfied with respect to such
     Property.

     ``ADJUSTED   EURODOLLAR   RATE''   means,   for  any   Interest   Rate
Determination Date with respect to a Eurodollar Rate  Loan,  the  rate  per
annum  obtained  by  DIVIDING  (i) the Eurodollar offered rate for deposits
with maturities comparable to the  Interest  Period for which such Adjusted
Eurodollar Rate will apply as of approximately   10:00 A.M. (New York time)
on such Interest Rate Determination Date as set forth on Telerate Page 4756
(or such other page as may, in the opinion of the  Agent, replace such page
for the purpose of displaying such rate) BY (ii) a percentage equal to 100%
MINUS  the stated maximum rate of all reserve requirements  (including  any
marginal, emergency, supplemental, special or other reserves) applicable on
such Interest  Rate  Determination  Date  to any member bank of the Federal
Reserve System in respect of ``Eurocurrency  liabilities''  as  defined  in
Regulation D (or any successor category of liabilities under Regulation D).

     ``ADJUSTED   STOCKHOLDERS'   EQUITY''   means,   as  of  any  date  of
determination, the sum of (i) $147,000,000; PLUS (ii) an  amount  equal  to
50%   of  the  cumulative  Consolidated  Net  Income  of  CapStar  and  its
Subsidiaries  determined  from  August  23,  1996  to  the  last day of the
calendar  quarter  ending  not  less  than  30  days  before  such date  of
determination  for  which  the  Agent has received the financial statements
pursuant to subsection 6.1(iii);  PLUS  (iii) an amount equal to 50% of the
aggregate net cash proceeds received by CapStar on or before each such last
day from the issuance and sale of Common  Stock of CapStar in excess of the
9,250,000 shares of Common Stock issued and  sold  by CapStar in the Equity
Offering.

     ``ADJUSTMENT CONDITION'' means, as of any date  of determination after
the  first  Anniversary,  that as of the last day of the  calendar  quarter
ending not less than 30 days  before  such  date of determination for which
the  Agent  has received the financial statements  pursuant  to  subsection
6.1(iii), the  ratio  of  Consolidated  Total  Indebtedness to Consolidated
EBITDA (calculated for the 12 consecutive months  ending  on such last day)
(i) is  equal  to  or  less  than 3.5 to 1.0 and (ii) shall not  have  been
greater than 3.5 to 1.0 as of  any  date  of  determination  during the six
months ending on such last day.

     ``AFFECTED  LENDER''  has  the  meaning  assigned  to  that  term   in
subsection 2.6C.

     ``AFFECTED LOANS'' has the meaning assigned to that term in subsection
2.6C.

     ``AFFILIATE''  means  with  respect  to  any  Person, any other Person
directly or indirectly controlling, controlled by, or  under common control
with,  that  Person.  For  the  purposes  of  this definition,  ``control''
(including,   with   correlative   meanings,  the  terms   ``controlling'',
``controlled by'' and ``under common  control  with''),  as  applied to any
Person,  means  the  possession,  directly  or indirectly, of the power  to
direct  or  cause  the direction of the management  and  policies  of  that
Person, whether through  the  ownership of voting securities or by contract
or otherwise.

     ``AFFILIATE GUARANTY'' means the Affiliate Guaranty by each Loan Party
(other than CapStar) and any other  Subsidiary  of  CapStar  that becomes a
party thereto, substantially in the form of EXHIBIT VIII annexed hereto, as
such Affiliate Guaranty may be amended, restated, supplemented or otherwise
modified from time to time in accordance with the terms thereof and hereof.

     ``AGENT'' has the meaning assigned to that term in the introduction to
this Agreement and also means and includes any successor Agent hereunder.

     ``AGREEMENT''  means  this  Senior Secured Revolving Credit  Agreement
dated as of the date first written  above  among CapStar, the Borrower, the
Lenders  and  the Agent, as it may be amended,  restated,  supplemented  or
otherwise modified from time to time.

     ``ANNIVERSARY''  means each of the dates that are anniversaries of the
Closing Date.

     ``ALTA'' means the  American  Land  Title Association or any successor
thereto.

     ``APPLICABLE  BASE  RATE  MARGIN''  means,   as   of   any   date   of
determination,  a per annum rate equal to 1.00%; PROVIDED that, at any time
after the first Anniversary, the Applicable Base Rate Margin shall be a per
annum rate of .75%  if  and so long as the Adjustment Condition shall occur
and be continuing.

     ``APPLICABLE EURODOLLAR  RATE  MARGIN''  means,  as  of  any  date  of
determination,  a per annum rate equal to 2.00%; PROVIDED that, at any time
after the first Anniversary, the Applicable Eurodollar Rate Margin shall be
a per annum rate  of 1.75% if and so long as the Adjustment Condition shall
occur and be continuing.

     ``APPLICABLE LAWS''  means,  collectively,  all statutes, laws, rules,
regulations, ordinances, orders, decisions, writs,  judgments,  decrees and
injunctions  of  Governmental  Authorities  (including Environmental  Laws)
affecting  the  Borrower,  any Loan Party or the  Collateral  or  any  part
thereof (including the acquisition,  development, construction, Renovation,
occupancy,   use,   improvement,   alteration,    management,    operation,
maintenance,  repair  or  restoration  thereof),  whether  now or hereafter
enacted  and  in  force, and all Authorizations relating thereto,  and  all
covenants, conditions and restrictions contained in any instruments, either
of record or known  to the Borrower or any other Loan Party, at any time in
force affecting any Property  or  any  part  thereof,  including  any  such
covenants,  conditions and restrictions which may (i) require improvements,
repairs or alterations  in  or  to  such  Property  or  any part thereof or
(ii) in any way limit the use and enjoyment thereof; for purposes of usury,
Applicable  Laws  means  the  law  of  the State of New York applicable  to
maximum rates of interest.

     ``APPRAISAL'' means, with respect to any Property, a written appraisal
of  such  Property prepared by an Appraiser  and  requested  by  the  Agent
pursuant  to   subsection 6.6B  or  delivered  to  the  Agent  pursuant  to
subsection 2.9 or  4.1N,  in  each  case  in  form, content and methodology
satisfactory to the Agent and in compliance with  all  applicable legal and
regulatory  requirements  (including the requirements of Title  XI  of  the
Financial Institutions Reform,  Recovery  and  Enforcement  Act of 1989, 12
U.S.C.  <section><section> 3331,  et  seq.,  as  amended  (or any successor
statute thereto), and the regulations promulgated thereunder).
     ``APPRAISER'' means CB Commercial Real Estate Group, Inc. or any other
independent  appraiser selected by the Agent and reasonably  acceptable  to
the Borrower who  meets all regulatory requirements applicable to the Agent
and the Lenders, who is a member of the Appraisal Institute with a national
practice and who has  at  least 10 years experience with real estate of the
same type as the Property to be appraised.

     ``APPRAISED VALUE'' means,  as  of  any date of determination and with
respect  to any Property, the lesser of (i) the  appraised  value  of  such
Property, in each case as most recently determined by an Appraisal approved
by the Agent  on  or before such date of determination and (ii) the maximum
aggregate principal  amount  secured  by  the  Mortgage  applicable to such
Property, as expressly set forth in such Mortgage, as set forth in SCHEDULE
1.1B  annexed  hereto,  as such Schedule shall be modified or  supplemented
from time to time in accordance  with  this  Agreement, and with respect to
which the Borrower has paid from time to time  all  applicable  mortgage or
recording taxes.

     ``APPROVED  ENVIRONMENTAL  CONSULTANT''  means EMG, Inc. or any  other
qualified, independent environmental consultant  reasonably  acceptable  to
the Agent.

     ``ASSIGNMENT  OF RENTS AND LEASES'' means each Assignment of Rents and
Leases executed and  acknowledged  by the Loan Party party thereto in favor
of the Agent for the benefit of the  Agent and the Lenders substantially in
the form delivered on or before the Closing  Date  pursuant  to  subsection
4.1E(i),  as  any  such  Assignment  of  Rents  and  Leases may be amended,
restated, supplemented, consolidated, extended or otherwise  modified  from
time to time in accordance with the terms thereof and hereof.

     ``ATLANTA  AIRPORT  PROPERTY''  means the real property, together with
all Improvements thereon and all fixtures attached thereto and all personal
property used in connection therewith,  located at 4736 Best Road, Atlanta,
Georgia and known, as of the date of this  Agreement,  as  the Westin Hotel
Atlanta Airport, as more particularly described on SCHEDULE  5.4A1  annexed
hereto.

     ``ATLANTA  AIRPORT  SUB''  means Lepercq Atlanta Renaissance Partners,
L.P., a limited partnership.

     ``ATLANTA COLLATERAL ASSIGNMENT''  means  that  certain  Assignment of
Deed to Secure Debt and Other Documents dated as of the date hereof  by and
between the Borrower and the Agent, pursuant to which the Atlanta Documents
will be assigned as security for the Obligations, as such agreement may  be
amended, restated, supplemented or otherwise modified from time to time.

     ``ATLANTA DOCUMENTS'' means, collectively, (i) the Atlanta Partnership
Agreement,  (ii)  the  Atlanta  Mortgage,  (iii) the Atlanta Note, (iv) the
Amended and Restated Loan Agreement dated as of August 23, 1996 between the
Atlanta  Airport Sub and Borrower, (v) the Amended  and  Restated  Security
Agreement  dated  as  of August 23, 1996 by the Atlanta Airport Sub for the
benefit of the Borrower  and  assigned  to  the Agent, (vi) the Amended and
Restated Assignment of Rents and Leases dated  as  of  August  23,  1996 by
Atlanta  Airport  Sub to the Borrower and assigned to the Agent, (vii)  the
Environmental Indemnity  Agreement  dated  as  of  August  23,  1996 by the
Atlanta  Airport  Sub for the benefit of the Borrower and assigned  to  the
Agent  and  (viii)  the  Amended  and  Restated  Assignment  of  Contracts,
Licenses, Permits, Agreements,  Warranties and Approvals dated as of August
23, 1996 by the Atlanta Airport Sub  to  the  Borrower  and assigned to the
Agent;  as  any  of  the  same  may  be amended, restated, supplemented  or
otherwise Modified from time to time to  the  extent  permitted therein and
herein.

     ``ATLANTA GP'' means EquiStar Atlanta GP Company,  L.L.C.,  a Delaware
limited liability company.

     ``ATLANTA  LP''  means EquiStar Atlanta LP Company, L.L.C., a Delaware
limited liability company.

     ``ATLANTA MORTGAGE''  means  that certain Amended and Restated Deed to
Secure Debt, Assignment of Leases and Rents and Security Agreement dated as
of August 23, 1996 executed by the  Atlanta  Airport  Sub  in  favor of the
Borrower  and assigned to the Agent, as amended, restated, supplemented  or
otherwise modified  from  time  to time to the extent permitted therein and
herein.

     ``ATLANTA  NOTE'' means that  certain  Consolidated  and  Amended  and
Restated Note dated  as  of August 23, 1996 executed by Atlanta Airport Sub
in the original principal  amount  of  $23,609,456,  as  such  note  may be
amended, restated, supplemented or otherwise modified from time to time  to
the extent permitted therein and herein.

     ``ATLANTA  PARTNERSHIP  AGREEMENT''  means  the  Amended  and Restated
Agreement  of  Limited  Partnership  dated  as  of June 11, 1987 of LePercq
Atlanta Renaissance Parties, LP, as such agreement  may be further amended,
restated, supplemented or otherwise modified from time to time.

     ``ATTRIBUTABLE ECONOMIC INTEREST'' means, with respect  to  any Person
as  of any date of determination, the number of shares of Capital Stock  of
any entity  of  which such Person is the record owner PLUS the total number
of  shares  that  such  Person  would  be  entitled  to  receive  upon  the
distribution to such  Person  by  such  entity,  pro  rata  with respect to
ownership  interests of such entity (and without regard to any  liabilities
of such entity),  of  all  shares  of which such Person is deemed to be the
beneficial owner but of which other Persons are the record owners.

     ``ATTRIBUTABLE INDEBTEDNESS'' means,  when  used  with  respect to any
sale  and  leaseback  transaction  with respect to which the lease  is  not
accounted for as a Capital Lease, as  of  any  date  of  determination, the
greater  of  (i) the unamortized portion (determined on a level  pay  basis
over the term of the lease) of an amount equal to 85% of the gross purchase
price for the  property  subject  to  such  transaction;  PROVIDED  that in
connection  with  any  sale  to  a real estate investment trust, the amount
calculated pursuant to this clause (i) shall be net of any security deposit
required to be established with the  proceeds  of  such purchase price; and
(ii) the  present  value  (discounted  at 10% per annum,  compounded  on  a
monthly basis) of the total obligations  of  the lessee for rental payments
during  the  remaining  term  of  the lease included  in  such  arrangement
(including any period for which such lease has been extended), as each such
amount shall be reasonably determined  by the Borrower and certified to the
Agent  in  an  Officers' Certificate of the  Borrower,  together  with  the
information utilized  by the Borrower to make such determination; PROVIDED,
HOWEVER, that if the applicable lease specifies the amount of a termination
fee, liquidated damages  or  other  maximum  amount  that is payable by the
lessee upon a termination (for whatever reason) of the  lease by the lessor
or the lessee prior to the scheduled termination of the base  term  or  any
extension  thereof, the amount calculated pursuant to this definition shall
not exceed such maximum amount.

     ``AUTHORIZATION''   means   any  authorization,  approval,  franchise,
license, variance, land use entitlement,  sewer  and  waste water discharge
permit,  storm  water  discharge  permit,  air  pollution authorization  to
operate,  certificate of occupancy, municipal water  and  sewer  connection
permit, and  any  like  or similar permit now or hereafter required for the
construction or Renovation  of  any Improvements located on any Property or
for the use, occupancy or operation  of  any  Property  and all amendments,
modifications, supplements and addenda thereto.

     ``BANKERS'' has the meaning assigned to that term in  the introduction
to this Agreement.

     ``BANKRUPTCY CODE'' means Title 11 of the United States  Code entitled
``Bankruptcy'', as now and hereafter in effect, or any successor statute.

     ``BASE  RATE''  means,  at  any time, the rate per annum that  is  the
higher of (i) of the Prime Rate and  (ii) the  sum of (a) the Federal Funds
Effective Rate PLUS (b) 1/2 of 1.00%.

     ``BASE RATE LOANS'' means Loans bearing interest  at  rates determined
by reference to the Base Rate as provided in subsection 2.2A.

     ``BORROWER'' has the meaning assigned to that term in the introduction
to this Agreement.

     ``BORROWING  BASE''  means, as of any date of determination  from  and
after the Closing Date through  and including the Maturity Date, the amount
determined  by the Agent as of the  last  day  of  the  preceding  calendar
quarter (PROVIDED that if the Agent requests, in accordance with subsection
6.1(ii), that the Borrowing Base Certificate be delivered monthly, then the
Borrowing Base  shall  be  calculated  as  of the last day of the preceding
calendar month) or, if subsequent thereto, the most recent Addition Date or
Release Date, that is equal to the sum of the  Property  Amounts in respect
of  all  Designated  Pool A  Properties  as  of such date of determination,
PROVIDED that the calculation of the amount referred  to in this definition
shall  exclude  (i) the amount, if any, by which the Property  Amount  with
respect to any Designated Pool A Property (other than any Designated Pool A
Property referred  to  in clause (ii) of the definition of Property Amount)
as  of such date of determination  otherwise  exceeds  20%  of  the  amount
determined pursuant to this definition for such period and (ii) the amount,
if any,  by  which the sum of the Property Amounts in respect of Designated
Pool A Properties  referred to in clause (ii) of the definition of Property
Amount as of such date of determination otherwise exceeds 10% of the amount
determined pursuant to this definition for such period.  The Borrowing Base
is subject to (1) reduction  from  time  to time as provided in subsections
2.4B(iii) and 2.10 and (2) adjustment from  time to time as provided in the
definitions of Property Amount and Property EBITDA.

     ``BORROWING BASE CERTIFICATE'' means a certificate  delivered  by  the
Borrower  pursuant  to Section 4.1C(iv) or subsection 6.1(ii) substantially
in the form delivered on the Closing Date pursuant to subsection 4.1C(v).

     ``BUSINESS DAY''  means any day excluding Saturday, Sunday and any day
which is a legal holiday  under  the  laws of the State of New York or is a
day on which banking institutions located  in  such state are authorized or
required by law or other governmental action to close.

     ``CAPITAL EXPENDITURES'' means, with respect  to any Property, for any
period and as of any date of determination, the sum of (i) 4.0% of Property
Gross  Revenues  from  such Property for such period, PROVIDED  that,  with
respect to any Property  at which a Renovation costing more than $1,000,000
(as evidenced by written documentation  reasonably satisfactory in form and
substance to the Agent) has been completed  during the 12 consecutive month
period  ending  on  the  last  day of the month immediately  preceding  the
applicable date of determination,  such  percentage  shall be 3.00% for the
period  from the Addition Date to the first anniversary  of  such  Addition
Date; PLUS (ii) the aggregate amount, if any, in excess of 4.0% of Property
Gross Revenues  which  is required to be paid, deposited or reserved by the
Borrower or any of its Subsidiaries in respect of such Property for Capital
Items pursuant to the Pool B Obligations or any applicable Ground Lease for
such period.

     ``CAPITAL ITEMS'' means,  with  respect to any Property for any period
and  as  of any date of determination, the  cost  of  capital  repairs  and
replacements of all or any portion of the Improvements or any other portion
of such Property,  including (i) costs of tenant improvements and brokerage
commissions payable  in connection with lease transactions at any Property,
(ii) costs   of  environmental   audits   and   monitoring,   environmental
remediation work  or  any other costs and expenses incurred with respect to
compliance  with  Environmental   Laws,  (iii) costs  of  any  Restoration,
(iv) costs of any Renovation, (v) costs  of FF&E, (vi) costs of appraisals,
valuations,  title  insurance and inspections  and  (vii) any  other  costs
incurred in connection  with  the  Properties  that  are  not  included  in
Operating  Expenses,  in  each  case  to  the  extent  such  costs would be
capitalized on a balance sheet in accordance with GAAP.

     ``CAPITAL  LEASE''  means,  with respect to any Person, lease  of  any
property (whether real, personal or  mixed)  by that Person as lessee that,
in conformity with GAAP, is accounted for as a capital lease on the balance
sheet of that Person.

     ``CAPITAL RESERVE ACCOUNT'' means, collectively, one or more interest-
bearing accounts to be established and maintained  by  the  Borrower at the
offices of the Agent located at 280 Park Avenue, New York, New  York,  each
in  the name of ``Bankers Trust Company, as Agent - CapStar Capital Reserve
Account,''  with such additional identifying references in such name as the
Borrower and  the Agent shall agree.  Capital Reserve Accounts are not, and
do not include, Other Capital Reserve Accounts.

     ``CAPITAL  STOCK''  means,  with  respect  to  any Person, any capital
stock, partnership, limited liability company or joint venture interests of
such  Person  and  shares,  interests,  participations or  other  ownership
interests (however designated) of any Person  and  any  rights  (other than
debt securities convertible into any of the foregoing), warrants or options
to purchase any of the foregoing.

     ``CAPSTAR''  has the meaning assigned to that term in the recitals  to
this Agreement.

     ``CAPSTAR  GUARANTY''   means   the   CapStar   Guaranty  by  CapStar,
substantially in the form of EXHIBIT VII annexed hereto,  as  such  CapStar
Guaranty may be amended, restated, supplemented or otherwise modified  from
time to time in accordance with the terms thereof and hereof.

     ``CAPSTAR  SUB'' has the meaning assigned to that term in the recitals
to this Agreement.

     ``CASH'' means  money,  currency  or  a  credit  balance  in a Deposit
Account.

     ``CASH AVAILABLE FOR DEBT SERVICE'' means, with respect to  any Pool B
Subsidiary  for  any period and as of any date of determination, an  amount
equal to Property  EBITDA with respect to the Properties owned by such Pool
B Subsidiary, as the  same  shall  be  determined  based upon the financial
statements for such Properties for such period and such  other  information
with  respect  thereto  that may be provided by the Loan Parties and  their
respective Subsidiaries,  subject  to such adjustments as may reasonably be
required  by  the  Agent  so that Property  EBITDA  with  respect  to  such
Properties shall be calculated  in  the same manner as Property EBITDA with
respect to Pool A Properties owned by the Loan Parties and their respective
Subsidiaries during the entire period; PROVIDED, HOWEVER, that for purposes
of  the  calculation  of Property EBITDA  under  this  definition  of  Cash
Available for Debt Service  with  respect  to  any Property for any period,
Operating Expenses shall include (i) franchise and  marketing  fees  of not
less  than  7.5% of revenues from room rentals for such period in the event
such Property  is subject to a Franchise Agreement, (ii) not less than 7.0%
of Property Gross  Revenues  for  marketing  expenses  in  the  event  such
Property is not subject to a Franchise Agreement, (iii) all Management Fees
in  respect  of  each such Property payable to the Borrower but in no event
less than 3.0% of  Property  Gross Revenues in respect of such Property and
(iv) and a reserve for Capital  Items  in  an  amount not less than 4.0% of
Property Gross Revenues in respect of each such  Property  (except  to  the
extent  that  higher  reserves  are  required  by  a  franchisor  under any
applicable Franchise Agreement).

     ``CASH   EQUIVALENTS''   means,  as  of  any  date  of  determination,
(i) marketable  securities  (a) issued   or  directly  and  unconditionally
guaranteed as to interest and principal by  the United States of America or
(b) issued by any agency of the United States of America the obligations of
which  are backed by the full faith and credit  of  the  United  States  of
America,   in   each  case  maturing  within  one  year  after  such  date;
(ii) marketable direct obligations issued by any state of the United States
of America or any  political  subdivision  of  any such state or any public
instrumentality thereof, in each case maturing within  one  year after such
date and having, at the time of the acquisition thereof, the highest rating
obtainable from either S&P or Moody's; (iii) commercial paper  maturing  no
more  than  one  year  from the date of creation thereof and having, at the
time of the acquisition  thereof,  a  rating of at least A-1 from S&P or at
least P-1 from Moody's; (iv) Eurodollar deposits due within one year of any
commercial banks whose outstanding senior  long-term  debt  securities  are
rated  either  A-  or  higher  by  S&P  or  A-3  or  higher by Moody's; (v)
repurchase obligations with a term of not more than 7  days  for underlying
securities of the types described in clause (i) of this paragraph  with any
bank meeting the qualifications specified in clause (vi) of this paragraph;
(vi) certificates  of  deposit or bankers' acceptances maturing within  one
year after such date and  issued  or  accepted  by  any  Lender  or  by any
commercial bank organized under the laws of the United States of America or
any  state  thereof  or  the  District  of  Columbia  that  (a) is at least
``adequately  capitalized'' (as defined in the regulations of  its  primary
Federal banking  regulator)  and (b) has Tier 1 capital (as defined in such
regulations) of not less than  $100,000,000;  and (vii) shares of any money
market  mutual  fund  that  (a) has  at least 95% of  its  assets  invested
continuously in the types of investments  referred  to  in  clauses (i) and
(ii) above, (b) has net assets of not less than $500,000,000,  and  (c) has
the highest rating obtainable from either S&P or Moody's.

     ``CASH  MANAGEMENT  LETTERS''  means  (i)  each  letter agreement with
respect  to  the  Local  Accounts  among the applicable Loan  Parties,  the
financial institutions at which Deposit  Accounts  are  located pursuant to
the Cash Management System and the Agent, in each case substantially in the
form of EXHIBIT XII annexed hereto with such changes as are  acceptable  to
the  Agent,  (ii) the Cash Manager Cash Management Agreement, and (iii) all
other agreements  with or directions to the financial institutions at which
Deposit Accounts are  located  satisfactory  to  the  Agent, in either case
pursuant  to  which,  in  accordance with subsection 6.15,  such  financial
institutions  are  to direct  funds  from  such  Deposit  Accounts  to  the
Concentration Account.

     ``CASH MANAGEMENT  SYSTEM''  means  the  system of Deposit Accounts of
Loan Parties and their Subsidiaries pursuant to  which all Receipts of Loan
Parties and such Subsidiaries (other than the Atlanta  Airport Sub and Pool
B  Subsidiaries)  are  collected  and  distributed,  all  as  described  in
SCHEDULE 5.23  annexed hereto, as it may be modified from time to  time  in
accordance with the terms hereof.

     ``CASH MANAGER''  means  Wells  Fargo  Bank,  N.A.,  or  any successor
thereto approved by the Agent.

     ``CASH MANAGER CASH MANAGEMENT AGREEMENT'' means the letter  agreement
delivered pursuant to subsection 4.1E(xi) with respect to the Concentration
Accounts by and among the Cash Manager, the Agent and the Borrower.

     ``CASH PROCEEDS'' means, with respect to any sale or other disposition
or  refinancing  of any Property, Cash payments received from such sale  or
disposition or refinancing.

     ``CLOSING DATE''  means the first date on which each of the conditions
set forth in subsection 4.1 are satisfied.

     ``COLLATERAL'' means,  collectively,  all property (including, without
limitation,  Capital  Stock and promissory notes  and  other  evidences  of
Indebtedness), whether  real,  personal  or  mixed, tangible or intangible,
owned or to be owned or leased or to be leased  or  otherwise held or to be
held by CapStar or any of its Subsidiaries or in which  CapStar  or  any of
its  Subsidiaries  has  or  shall  acquire  an  interest,  to the extent of
CapStar's or such Subsidiary's interest therein, now or hereafter  granted,
assigned, transferred, mortgaged or pledged to the Agent and/or the Lenders
or in which a Lien is granted to the Agent and/or the Lenders to secure all
or  any part of the Obligations, whether pursuant to the Security Documents
or otherwise,  including,  without  limitation,  the Pool A Properties, the
Leases and Rents and rights under the Original Acquisition  Documents,  the
Acquisition  Documents  and  the  Management  Agreements,  and  any and all
proceeds of the foregoing, but excluding the Excluded Assets.

     ``COLLATERAL  ACCOUNT'' has the meaning assigned to that term  in  the
Collateral Account Agreement.

     ``COLLATERAL  ACCOUNT   AGREEMENT''   means   the  Collateral  Account
Agreement executed and delivered by the Borrower and the Agent on or before
the Closing Date, substantially in the form of EXHIBIT  XIV annexed hereto,
pursuant to which the Borrower may pledge cash to the Agent  to  secure the
obligations of the Borrower to reimburse Issuing Lenders for payments  made
under  one  or  more Letters of Credit, as provided in subsections 2.4B and
8.1,  as  such Collateral  Account  Agreement  may  hereafter  be  amended,
supplemented or otherwise modified from time to time.

     ``COMMERCIAL  LETTER OF CREDIT'' means any letter of credit or similar
instrument  issued  for  the  purpose  of  providing  the  primary  payment
mechanism in connection  with  the  purchase  of  any  materials,  goods or
services by the Borrower or any of its Subsidiaries.

     ``COMMITMENT''  means  the  commitment of a Lender to pay the Purchase
Price pursuant to subsection 2.1A,  to  make  or maintain Loans pursuant to
subsection 2.1B and to issue Letters of Credit  and purchase participations
therein  as  provided  in  subsection 3,  and  ``COMMITMENTS''  means  such
commitments of all Lenders in the aggregate.

     ``COMMON STOCK'' means the common stock of CapStar, par value $.01 per
share.

     ``COMPLETION  CERTIFICATE'' means a certificate  of  an  architect  or
Engineer substantially  in  the  form  of  Exhibit  XVIII  annexed  hereto,
delivered to the Agent pursuant to subsection 6.11F, 6.11G or 6.12A.

     ``COMPLIANCE CERTIFICATE'' means a certificate delivered to the  Agent
by  the  Borrower  pursuant  to subsection 6.1(v) substantially in the form
attached as EXHIBIT V hereto.

     ``CONCENTRATION   ACCOUNT''    means,   collectively,   the   accounts
established and maintained in the name  of  the Agent at the offices of the
Cash  Manager  pursuant to the terms of the Security  Agreement,  to  which
funds on deposit  in  the  Deposit Accounts included in the Cash Management
System are directed by the Agent in accordance with subsection 6.15.

     ``CONDEMNATION PROCEEDS''  means  all  compensation,  awards, damages,
rights  of  action  and  proceeds awarded to any Loan Party or any  of  its
Subsidiaries by reason of any Taking.

     ``CONSOLIDATED EBITDA''  means,  for  any period, the remainder of the
following:

          (i)  the sum, without duplication,  of  (a) Total Property EBITDA
     for such period PLUS (b) all revenue of CapStar  and  its Subsidiaries
     for such period, determined on a consolidated basis in conformity with
     GAAP,  that  was  not  included  in the calculation of Total  Property
     EBITDA for such period irrespective  of whether such income relates to
     the Properties, including, without limitation and without duplication,
     (1) Management Fees with respect to Properties  that  shall  have been
     included in the calculation of Operating Expenses for such period  and
     (2)  payments  received  by CapStar and its Subsidiaries in respect of
     Interest Rate Agreements;  PROVIDED that the calculation of the amount
     referred  to in this clause (i)  shall  exclude  (v) income  expressly
     excluded from  the  definition  of  Property Gross Revenue, (w) income
     resulting from the write-up of the value  of  assets,  (x) income from
     interest earned on notes and receivables from affiliates except to the
     extent actually received, (y) the income of a Joint Venture and income
     accounted for by the equity method of accounting, in each  case except
     to  the extent distributed to CapStar or any of its Subsidiaries,  and
     increases  or decreases in earnings attributable to minority interests
     and (z) the  income  of  any Person acquired in a pooling of interests
     transaction before the date of acquisition; MINUS

         (ii)  all  expenses,  without  duplication,  of  CapStar  and  its
     Subsidiaries (to the extent not deducted from the calculation of Total
     Property EBITDA) for such period  and  determined  on  a  consolidated
     basis in accordance with GAAP, whether or not such expenses  relate to
     the  Properties;  PROVIDED that the calculation of the amount referred
     to in this clause (ii) shall exclude any expense related to the charge
     off of amounts referred  to  in clause (i) above previously recognized
     as revenue.

     ``CONSOLIDATED EBITDA-CAP EX''  means,  for  any  period, Consolidated
EBITDA MINUS Capital Expenditures with respect to all Properties.

     ``CONSOLIDATED  INTEREST  EXPENSE''  means,  for  any  period,   total
interest expense (including that portion attributable to Capital Leases  in
accordance   with  GAAP  and  capitalized  interest)  of  CapStar  and  its
Subsidiaries,  determined  on a consolidated basis in accordance with GAAP,
with  respect  to  all  outstanding   Indebtedness   of   CapStar  and  its
Subsidiaries, including, without limitation, all commissions, discounts and
other fees and charges owed with respect to letters of credit  and bankers'
acceptance financing and net costs under Interest Rate Agreements.

     ``CONSOLIDATED  NET INCOME'' means, with respect to any Person  as  of
any date of determination  and  for any period, the aggregate Net Income of
such Person and its Subsidiaries,  on  a  consolidated basis, determined in
accordance with GAAP, from the first day of  such period to the last day of
the  calendar  quarter ending not less than 30 days  before  such  date  of
determination for  which  the  Agent  has received the financial statements
pursuant to subsection 6.1(iii); PROVIDED,  that  (i) the Net Income of any
Person  that is not a Subsidiary or that is accounted  for  by  the  equity
method of  accounting  shall  be  excluded,  whether  or not distributed to
CapStar or one of its Subsidiaries, (ii) the Net Income  of any Person that
is  a Subsidiary and that is restricted from declaring or paying  dividends
or other  distributions,  directly or indirectly, by operation of the terms
of its charter, any applicable  agreement,  instrument,  judgment,  decree,
order,  statute,  rule  or  governmental  regulation  or otherwise shall be
included  only  to the extent of the amount of dividends  or  distributions
paid to any Person or a Wholly Owned Subsidiary of any Person and (iii) the
Net Income of any Person acquired in a pooling of interests transaction for
any period prior  to  the  date  of  such  acquisition  shall  be excluded;
PROVIDED  FURTHER,  that  for  the  purpose of determining compliance  with
subsection 7.6A, both extraordinary gains  and  extraordinary  losses (each
determined  in accordance with GAAP) shall be excluded from the calculation
of Consolidated Net Income.

     ``CONSOLIDATED   TOTAL   INDEBTEDNESS''  means,  as  of  any  date  of
determination,  the  sum  of the following,  without  duplication:  (i) all
Indebtedness of CapStar and  its Subsidiaries, determined on a consolidated
basis; PLUS (ii) all Contingent Obligations of CapStar and its Subsidiaries
to make any Investments or Guaranties; PLUS (iii) all Guaranties of CapStar
or any of its Subsidiaries; PLUS  (iv) the Letter of Credit Usage MINUS the
sum of (a) the Letter of Credit Usage  with  respect  to  Letters of Credit
supporting  other  Indebtedness of CapStar or any of its Subsidiaries  PLUS
(b) the amount of Cash  deposited  and  held  pursuant  to the terms of the
Collateral Account Agreement; PLUS (v) Attributable Indebtedness;  PROVIDED
FURTHER  that,  for  purposes of determining satisfaction of the Adjustment
Condition, the Borrower  may elect by written notice delivered to the Agent
to exclude from the calculation  of  Consolidated  Total  Indebtedness  the
lesser  of  (a) the aggregate principal amount of Loans that have been paid
from the net  proceeds  of  the  offering  of  Common Stock (other than the
Equity Offering) during the period commencing on  the  first day of the 12-
month period ending on the last day of the month preceding  the  applicable
date  of  determination  and ending on the applicable date of determination
and (b) the aggregate principal  amount  of permanent Commitment reductions
pursuant to subsection 2.4B(ii).

     ``CONTINGENT OBLIGATION'' means, with respect to any Person, as of any
date  of  determination and without duplication,  any  direct  or  indirect
liability,  contingent  or otherwise, of that Person which has not been (or
to the extent that it has  not  been)  paid  or  otherwise  discharged with
respect  to  the  following:  (i) any Guaranty; (ii) any letter  of  credit
issued for the account  of  that  Person  or  as  to  which  that Person is
otherwise liable for reimbursement of drawings (including, with  respect to
the Borrower, Letters of Credit); or (iii) performance, surety and  similar
bonds   in   respect  of  any  Restoration,  Renovation  or  other  design,
construction,   restoration,   renovation,   expansion  or  repair  of  any
Improvements,  in each case with respect to any  Property  or  other  hotel
property; PROVIDED  that Contingent Obligations shall not include (x) other
performance, surety and  appeal  bonds  provided  in the ordinary course of
business consistent with past practices or contemplated  by subsection 6.9,
(y)  indemnification or contribution obligations in respect  of  agreements
providing  for  indemnification,  adjustment  of  purchase price or similar
obligations  or  for  Guaranties  or letters of credit,  surety  bonds  and
performance bonds securing any obligations  of  the  Borrower or any of its
Subsidiaries  pursuant  to  such  agreements,  in  any  case   incurred  in
connection  with  the  acquisition  or  Transfer  of  a business, asset  or
Subsidiary (other than Guaranties of Indebtedness incurred  by  any  Person
acquiring all or any portion of such business, assets or Subsidiary for the
purpose of financing such acquisition), and (z) indemnification obligations
with  respect  to environmental matters and ``bad deeds'' and other actions
(other  than  the  payment  of  any  Indebtedness,  Contingent  Obligation,
Guaranty or other  monetary  liability)  in  connection  with Indebtedness,
Management  Agreements,  Servicing  Agreements, service contracts,  Leases,
partnerships,   agreements,   Franchise   Agreements,   leases,   licensing
agreements and Ground Leases, in each case  on  customary  terms consistent
with  industry  practice  and  to  the  extent  that  such Indebtedness  or
agreements are not prohibited by this Agreement and (iv) obligations of the
type  set  forth  in  clauses (i) - (iii)  above and all Indebtedness  owed
either by any partnership of which such Person  is  a general partner or by
any limited liability company of which such Person is  a  member  and  with
respect  to  which  Indebtedness  such Person has liability under law or by
agreement.  The amount of any Contingent  Obligation,  as  of  any  date of
determination,  shall  be  equal  to  the  least  of  (x) the amount of the
obligation  so  Guaranteed or that otherwise may be required  to  be  paid,
(y) the amount to which such Contingent Obligation is expressly limited and
(z) except with respect to a Guaranty of Indebtedness, the maximum exposure
under such Contingent  Obligation  as reasonably calculated by the Borrower
and approved by the Agent in its sole discretion.

     ``CONTRACTUAL OBLIGATION'' means,  with  respect  to  any  Person, any
provision  of  any  Security  issued  by  that  Person  or  of any material
indenture,  mortgage, deed of trust, deed to secure debt, contract,  lease,
purchase order,  undertaking,  agreement  or other instrument to which that
Person is a party or by which it or any of  its  properties  is bound or to
which  it or any of its properties is subject, including, with  respect  to
CapStar  or any of its Subsidiaries, any provision of the Related Documents
to which CapStar or such Subsidiary is a party or by which it or any of its
properties is bound or to which it or any of its properties is subject.

     ``CREDIT  BID''  means  a  bid  in  a  foreclosure  sale pursuant to a
Mortgage  made  by  the  Agent  consisting  of  all  or  a portion  of  the
outstanding amount of the Obligations.

     ``CURRENCY  AGREEMENT'' means any foreign exchange contract,  currency
swap agreement, futures  contract,  option contract, synthetic cap or other
similar agreement or arrangement designed  to protect CapStar or any of its
Subsidiaries against fluctuations in currency values.

     ``DEFAULTING LENDER'' means any Lender  that fails to fund any Loan or
make any extension of credit required to be funded  or  made by such Lender
pursuant to the express terms of this Agreement.

     ``DEFERRED MAINTENANCE'' means the deferred maintenance  and repair in
respect of the Pool A Properties recommended to be completed on  or  before
the  first  Anniversary and the estimated cost thereof and the improvements
recommended to  be  made to the Pool A Properties in furtherance of causing
the Pool A Properties  to  comply with the Americans with Disabilities Act,
each as set forth in the Engineering  Reports  delivered  by  the  Borrower
pursuant   to  subsection  4.1T  and  specified  in  the  columns  entitled
``Immediate  Repair  of Deferred Items'', ``Immediate Repair of ADA Items''
and ``Additional Repair  of  Deferred Items During First Year'' on SCHEDULE
6.16B annexed hereto.

     ``DEFERRED MAINTENANCE ACCOUNT''  means,  collectively,  one  or  more
interest-bearing  accounts  to be established and maintained by Borrower at
the offices of the Agent located  at  280  Park Avenue, New York, New York,
each in the name of ``Bankers Trust Company, as Agent
-- CapStar Deferred Maintenance Account,'' with such additional identifying
references in such name as the Borrower and the Agent shall agree.

     ``DEPOSIT ACCOUNT'' means a demand, time,  savings,  passbook  or like
account  with  a  bank,  savings and loan association, credit union or like
organization, other than an  account evidenced, by a negotiable certificate
of deposit.

     ``DESIGNATED  POOL A  PROPERTIES''   means,   as   of   any   date  of
determination,   the  Pool A  Properties  other  than  the  Removed  Pool A
Properties.

     ``DEVELOPMENT''   means   the   erection   or  other  construction  or
installation of Improvements on real property that  is  then  substantially
unimproved  or  from  which  all  or  substantially  all  of  the  existing
Improvements thereon have been removed or in connection with such erection,
construction  or  installation  will  be removed; PROVIDED that Development
does not include (x) Restorations and Renovations  and  (y) the erection or
other construction or installation of Improvements on real property that is
contiguous  with  a  Property  and  in  connection  with  the expansion  of
Improvements at such Property.

     ``DOLLARS''  and  the sign ``$'' mean the lawful money of  the  United
States of America.

     ``EAC''   means   EquiStar   Acquisition   Corporation,   a   Delaware
corporation.

     ``ELIGIBLE ASSIGNEE''  means (i) (a) a commercial bank organized under
the laws of the United States  of  America  or  any  state  thereof;  (b) a
savings  and  loan  association or savings bank organized under the laws of
the United States of  America  or  any state thereof; (c) a commercial bank
organized under the laws of any other  country  or  a political subdivision
thereof; PROVIDED, HOWEVER, that (x) such bank is acting  through  a branch
or  agency  located  in  the  United  States of America or (y) such bank is
organized under the laws of a country that  is a member of the Organization
for Economic Cooperation and Development or a political subdivision of such
country; and (d) any other entity which is an  ``accredited  investor'' (as
defined in Regulation D under the Securities Act) which extends  credit  or
buys  loans  as  one of its principal businesses including, but not limited
to, insurance companies, investment banks, mutual funds and lease financing
companies, in each  case  (under  clauses  (a)  through  (d) above) that is
reasonably acceptable to the Agent; and (ii) any Lender and  any  Affiliate
of any Lender; PROVIDED FURTHER, HOWEVER, that each Eligible Assignee under
clauses  (i)(a)  through (i)(c) above shall have Tier 1 capital (as defined
in the regulations  of  its  primary Federal banking regulator) of not less
than $100,000,000.

     ``EMPLOYEE BENEFIT PLAN''  means  any  ``employee  benefit  plan''  as
defined  in  Section  3(3)  of  ERISA  which (i) is currently maintained or
contributed  to  by  CapStar,  any of its Subsidiaries,  or  any  of  their
respective ERISA Affiliates, or  (ii)  was at any time within the preceding
five  years  maintained  or  contributed  to   by   CapStar,   any  of  its
Subsidiaries, or any of their respective ERISA Affiliates to the extent any
of  them  could  reasonably be expected to incur liability with respect  to
such employee benefit plan.

     ``ENGINEER''  means  each  reputable  engineer  approved  by the Agent
licensed as such in the state in which the applicable Property in  question
is located.

     ``ENGINEERING  REPORT'' means, with respect to any Property, a written
report prepared by an  Engineer,  describing  and  analyzing  the  physical
condition of the Improvements of such Property, describing any necessary or
recommended  repairs, estimating the cost of such repairs and otherwise  in
form and substance reasonably satisfactory to the Agent.

     ``ENVIRONMENTAL  CLAIM''  means  any accusation, allegation, notice of
violation,  claim, demand, abatement order  or  other  order  or  direction
(conditional  or  otherwise)  by  any  Governmental  Authority or any other
Person  for  any  damage,  including  personal injury (including  sickness,
disease or death), tangible or intangible  property  damage,  contribution,
indemnity,  indirect  or  consequential damages, damage to the environment,
damage to natural resources,  nuisance,  pollution,  contamination or other
adverse   effects   on   the  environment,  or  for  fines,  penalties   or
restrictions, in each case  relating  to,  resulting  from or in connection
with Hazardous Materials and relating to CapStar, any of  its  Subsidiaries
(including  any Person who was a Subsidiary prior to the Closing  Date)  or
any Property.

     ``ENVIRONMENTAL INDEMNITY'' means the Environmental Indemnity executed
and delivered  by  the  Borrower  and  each of its Subsidiaries that owns a
Property  on  or before the Closing Date,  and  thereafter  by  each  other
Subsidiary of the  Borrower  that  becomes a party thereto, in favor of the
Agent and the Lenders, in substantially  the  form  of EXHIBIT XIII annexed
hereto,  as  such  agreement  may  be  amended,  restated, supplemented  or
otherwise modified from time to time in accordance  with  the terms thereof
and hereof.

     ``ENVIRONMENTAL  LAWS'' means all statutes, laws, ordinances,  orders,
rules,  regulations,  written  guidelines,  writs,  judgments,  decrees  or
injunctions and the like  relating  to (i) environmental matters, including
those  relating to fines, injunctions,  penalties,  damages,  contribution,
cost recovery compensation, losses or injuries resulting from the Hazardous
Release  or  threatened  Hazardous Release of Hazardous Materials, (ii) the
generation,  use,  storage,   transportation   or   disposal  of  Hazardous
Materials, or (iii) occupational safety and health, industrial  hygiene, or
the  protection of human, plant or animal health or welfare, in any  manner
applicable  to  any  Loan  Party or any of its Subsidiaries or any of their
properties,   including   the   Comprehensive    Environmental    Response,
Compensation,  and  Liability  Act  (42 U.S.C. <section><section> 9601,  et
seq.),   the   Hazardous   Materials   Transportation    Act   (49   U.S.C.
<section><section> 1801, et seq.), the Resource Conservation  and  Recovery
Act  (42  U.S.C.  <section><section> 6901,  et  seq.),  the  Federal  Water
Pollution  Control  Act  (33  U.S.C. <section><section> 1251, et seq.), the
Clean  Air  Act (42 U.S.C. <section><section> 7401,  et  seq.),  the  Toxic
Substances Control  Act  (15  U.S.C. <section><section> 2601, et seq.), the
Solid Waste Disposal Act (42 U.S.C.  <section><section>  6901, et seq.), as
amended   by   the   Resource  Conservation  and  Recovery  Act  (42 U.S.C.
<section><section> 6901,  et  seq.), the Federal Insecticide, Fungicide and
Rodenticide   Act   (7  U.S.C.  <section><section> 136,   et   seq.),   the
Occupational Safety and  Health  Act  (29 U.S.C. <section><section> 651, et
seq.) and the Emergency Planning and Community Right-to-Know Act (42 U.S.C.
<section><section> 11001, et seq.), each  as  amended  or supplemented, and
rules and regulations, policies and guidelines promulgated pursuant thereto
and any analogous future or present local, state and federal  statutes  and
rules   and  regulations,  policies  and  guidelines  promulgated  pursuant
thereto, each as in effect as of the date of determination.
     ``EQUITY OFFERING'' means the offering and sale of 9,250,000 shares of
Common Stock pursuant to the Equity Offering Documents.

     ``EQUITY   OFFERING   DOCUMENTS''   means,  collectively,  the  Equity
Underwriting Agreements, the Equity Registration  Statement and each of the
other  documents  and  agreements executed in connection  with  the  Equity
Offering, as each such document  and  agreement  may  be amended, restated,
supplemented or otherwise modified from time to time in accordance with the
terms thereof and hereof.

     ``EQUITY  PROSPECTUS''  means the prospectus relating  to  the  Common
Stock in the form included in  the Equity Registration Statement or, if the
prospectus included in the Equity  Registration Statement omits information
in reliance on Rule 430A under the Act  and such information is included in
prospectuses filed with the Securities and  Exchange Commission pursuant to
Rule 424(b) under the Securities Act, ``Prospectus''  means  the prospectus
relating   to  the  Common  Stock  in  the  form  included  in  the  Equity
Registration  Statement  as  supplemented  by the addition of the Rule 430A
information contained in the prospectus relating  to the Common Stock filed
with the Securities and Exchange Commission pursuant to Rule 424(b).

     ``EQUITY  REGISTRATION STATEMENT'' means Registration  Statement  (No.
333-6583) of the  Borrower on Form S-1 and the prospectus included therein,
as filed with the Securities  Exchange  Commission  on  June  21,  1996, as
amended by Amendment Nos. 1 and 2 thereto, as filed with the Securities and
Exchange Commission on July 31, 1996 and August 15, 1996, respectively, and
together with the Equity Prospectus, and as each may be further amended  or
supplemented  from time to time, before or after the effectiveness thereof,
with respect to the Equity Offering.

     ``EQUITY   UNDERWRITING    AGREEMENTS''   means,   collectively,   the
Underwriting Agreements, each dated  as  of August 20, 1996, among CapStar,
certain other persons, as selling shareholders,  and the underwriters named
therein,  as  each  such agreement may be amended, restated,  consolidated,
supplemented or otherwise modified from time to time in accordance with the
terms thereof, pursuant  to  which  9,250,000  shares  of Common Stock were
issued and sold in the Equity Offering.

     ``ERISA'' means the Employee Retirement Income Security  Act  of 1974,
as amended from time to time, and any successor thereto.

     ``ERISA  AFFILIATE''  means,  with  respect  to  any  Person,  (i) any
corporation which is, or was at any time, a member of a controlled group of
corporations  within  the meaning of Section 414(b) of the Internal Revenue
Code of which that Person  is a member; (ii) any trade or business (whether
or not incorporated) which is  a  member of a group of trades or businesses
under common control within the meaning  of  Section 414(c) of the Internal
Revenue Code of which that Person is a member;  and  (iii) any member of an
affiliated service group within the meaning of Section 414(m) or (o) of the
Internal  Revenue Code of which that Person, any corporation  described  in
clause (i) above or any trade or business described in clause (ii) above is
a member.   Any  former  ERISA  Affiliate  of  any Loan Party or any of its
Subsidiaries shall continue to be considered an  ERISA  Affiliate  of  such
Loan  Party  or such Subsidiary, within the meaning of this definition with
respect to the  period  during  which such entity was an ERISA Affiliate of
such Loan Party or such Subsidiary  and with respect to liabilities arising
after such period for which such Loan  Party  or  such  Subsidiary could be
liable under the Internal Revenue Code or ERISA.

     ``ERISA EVENT'' means (i) a ``reportable event'' within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to
any Pension Plan (excluding those for which the provision for 30-day notice
to the PBGC has been waived by regulation), (ii) the failure  to  meet  the
minimum  funding  standard of Section 412 of the Internal Revenue Code with
respect to any Pension  Plan  (whether  or  not  waived  in accordance with
Section 412(d) of the Internal Revenue Code) or the failure  to make by its
due  date  a  required  installment  under  Section 412(m)  of the Internal
Revenue Code with respect to any Pension Plan or the failure  to  make  any
required  contribution  to  a  Multiemployer  Plan, in the case of any such
failure, by a material amount, (iii) the provision  by the administrator of
any Pension Plan pursuant to Section 4041(a)(2) of ERISA  of  a  notice  of
intent  to  terminate  such  plan  in  a  distress termination described in
Section 4041(c) of ERISA, (iv) the withdrawal by any Loan Party, any of its
Subsidiaries or any of their respective ERISA  Affiliates  from any Pension
Plan with two or more contributing sponsors or the termination  of any such
Pension  Plan  resulting  in liability pursuant to Section 4063 or 4064  of
ERISA, (v) the institution  by  the  PBGC  of  proceedings to terminate any
Pension  Plan,  or  the occurrence of any event or  condition  which  might
constitute grounds under  ERISA  for the termination of, or the appointment
of  a  trustee  to administer, any Pension  Plan,  (vi) the  imposition  of
liability on any  Loan  Party  or  any  of its Subsidiaries or any of their
respective ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or
by  reason  of  the  application  of Section 4212(c)  of  ERISA,  (vii) the
withdrawal by any Loan Party or any  of  its  Subsidiaries  or any of their
respective ERISA Affiliates in a complete or partial withdrawal (within the
meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer  Plan if
there  is any potential material liability therefor, or the receipt by  any
Loan Party  or  any  of  its  Subsidiaries or any of their respective ERISA
Affiliates  of  notice  from  any  Multiemployer   Plan   that   it  is  in
reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA,  or
that  it intends to terminate or has terminated under Section 4041A or 4042
of ERISA, (viii) the occurrence of an act or omission which could give rise
to the  imposition  on  any Loan Party or any of its Subsidiaries or any of
their respective ERISA Affiliates  of  material  fines, penalties, taxes or
related  charges  under Chapter 43 of the Internal Revenue  Code  or  under
Section 409 or Section 502(c)(2),  (i)  or (l), or Section 4071 of ERISA in
respect  of any Employee Benefit Plan, (ix) the  assertion  of  a  material
claim (other than routine claims for benefits) against any Employee Benefit
Plan other  than a Multiemployer Plan or the assets thereof, or against any
Loan Party or  any  of  its  Subsidiaries  or any of their respective ERISA
Affiliates in connection with any such Employee  Benefit  Plan, (x) receipt
from the Internal Revenue Service of notice of the failure  of  any Pension
Plan  (or  any  other Employee Benefit Plan intended to be qualified  under
Section 401(a)  of   the   Internal   Revenue   Code)   to   qualify  under
Section 401(a)  of the Internal Revenue Code, or the failure of  any  trust
forming part of any  Pension  Plan  to  qualify for exemption from taxation
under Section 501(a) of the Internal Revenue Code or (xi) the imposition of
a Lien pursuant to Section 401(a)(29) or  412(n)  of  the  Internal Revenue
Code or pursuant to ERISA with respect to any Pension Plan.

     ``EURODOLLAR  RATE  LOANS''  means  Loans  bearing interest  at  rates
determined  by reference to the Adjusted Eurodollar  Rate  as  provided  in
subsection 2.2A.
     ``EVENT   OF   DEFAULT''  means  each  of  the  events  set  forth  in
subsection 8.1.

     ``EXCHANGE ACT'' means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.

     ``EXCLUDED ASSETS''  means  the  rights  of  the  Loan  Parties  under
Management  Agreements, liquor licenses, Authorizations, service contracts,
equipment leases, purchase agreements, collective bargaining agreements and
other agreements  that,  by  their  terms  or by law and in accordance with
general practice, cannot be pledged to the Agent.

     ``EXCUSABLE DELAY'' means a delay due to  acts  of  God,  governmental
restrictions, enemy actions, war, civil commotion, fire, casualty, strikes,
shortages  of supplies or labor, work stoppages or other causes beyond  the
reasonable control  of  CapStar or any of its Affiliates, but lack of funds
shall not be deemed a cause beyond the reasonable control of CapStar or any
of its Affiliates.

     ``EXTRAORDINARY RECEIPTS'' means the proceeds to CapStar or any of its
Subsidiaries from such items  as (i) sales, exchanges or other dispositions
of the assets of CapStar or any  of  its  Subsidiaries  other  than  in the
ordinary  course  of  business thereof, (ii) damage recoveries and casualty
insurance proceeds (including  Condemnation  Proceeds or Insurance Proceeds
but other than the proceeds of business interruption  insurance  or  rental
loss  insurance),  (iii) income  derived from Securities and other property
acquired for investment except to the extent such Securities represent Cash
Equivalents, (iv) condemnation awards  or  sales  in  lieu of and under the
threat of condemnation (other than awards or other payments  for any Taking
for  temporary  use),  (v) debt  or  equity  financing or refinancing,  and
(vi) all  other  amounts  of  any  nature paid to CapStar  or  any  of  its
Subsidiaries not arising out of the ordinary course of business thereof.

     ``FEDERAL FUNDS EFFECTIVE RATE''  means, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average
of the rates on overnight Federal funds  transactions  with  members of the
Federal Reserve System arranged by Federal funds brokers, as published  for
such  day  (or,  if  such day is not a Business Day, for the next preceding
Business Day) by the Federal  Reserve Bank of New York, or, if such rate is
not so published for any day which  is  a  Business Day, the average of the
quotations for such day on such transactions  received  by  the  Agent from
three Federal funds brokers of recognized standing selected by the Agent.

     ``FF&E'' means, with respect to any Property or the offices of CapStar
and its Subsidiaries, any furniture, fixtures and equipment, including  any
beds,  lamps,  bedding,  tables,  chairs, sofas, curtains, carpeting, smoke
detectors,  mini  bars,  paintings, decorations,  televisions,  telephones,
radios,  desks, dressers, towels,  bathroom  equipment,  heating,  cooling,
lighting,  laundry,  incinerating,  loading,  swimming  pool,  landscaping,
garage  and power equipment, machinery, engines, vehicles, fire prevention,
refrigerating,  ventilating  and  communications apparatus, carts, dollies,
elevators, escalators, kitchen appliances, restaurant equipment, computers,
reservation systems, software, cash registers, switchboards, hotel cleaning
equipment or any other items of furniture, fixtures and equipment typically
used in hotel properties (including  furniture, fixtures and equipment used
in  guest rooms, lobbies, common areas,  front  desk,  back  office,  bars,
restaurants,   kitchens,   laundries,   concierge,   bellman,   recreation,
amusement,  landscaping,  parking  and  other  areas  of  hotels)  and  any
replacements of all or any portion of any of the foregoing.

     ``FORMATION''  means,  collectively,  the transactions contemplated by
the  Formation  Documents, as described in the  Equity  Prospectus  in  the
section entitled ``The Formation Transactions''.

     ``FORMATION AGREEMENT'' means the Formation Agreement dated as of June
20, 1996 among CapStar  and  the  other parties identified on the signature
pages thereof, as such agreement may  be amended, restated, supplemented or
otherwise modified from time to time in  accordance  with the terms thereof
and hereof.

     ``FORMATION DATE'' means August 23, 1996, which is  the  date on which
the transactions constituting the Formation were consummated.

     ``FORMATION  DOCUMENTS'' means, collectively, the Formation  Agreement
and each other agreement  or other document giving effect to the Formation,
and  each  opinion,  agreement,   assignment,  deed,  instrument,  material
certificate or other material document delivered in connection therewith or
pursuant thereto.

     ``FRANCHISE AGREEMENT'' means  each of the franchise agreements listed
on SCHEDULE 4.1J annexed hereto, together  with  the  most  recent  related
property  improvement  plan  required by the respective franchisor, as each
such agreement may be amended, restated, supplemented or otherwise modified
or replaced from time to time in accordance with subsection 7.20G.

     ``FUNDING DATE'' means the date of the funding of a Loan.

     ``GAAP'' means, subject to  the limitations on the application thereof
set forth in subsection 1.2, generally  accepted  accounting principles set
forth in opinions and pronouncements of the Accounting  Principles Board of
the American Institute of Certified Public Accountants and  statements  and
pronouncements of the Financial Accounting Standards Board, in each case as
the   same   are  applicable  to  the  circumstances  as  of  the  date  of
determination.

     ``GOVERNMENTAL  ACTS''  has  the  meaning  assigned  to  that  term in
subsection 3.5A.

     ``GOVERNMENTAL  AUTHORITY'' means any nation or government, any state,
county, municipality or  other political subdivision or branch thereof, and
any  entity  exercising executive,  legislative,  judicial,  regulatory  or
administrative  functions  of  or  pertaining  to government, including any
agency,  board,  central  bank, commission, court,  department  or  officer
thereof.

     ``GROUND LEASES'' means  each of the ground leases with respect to the
Properties listed on SCHEDULE 5.4B or SCHEDULE 5.4C annexed hereto, as such
Schedules may be revised or supplemented  from  time  to  time  pursuant to
subsection 2.9, 2.10 and 7.11.

     ``GUARANTOR''  means  each  Loan Party party to the Affiliate Guaranty
and the CapStar Guaranty.

     ``GUARANTY''  means,  with respect  to  any  Person,  any  obligation,
contingent or otherwise, of  that  Person  which  has  not  been (or to the
extent that it has not been) paid or otherwise discharged with  respect  to
any  Indebtedness,  Ground Lease, other lease, dividend or other obligation
of any other Person if  the primary purpose or intent thereof by the Person
incurring the Guaranty is  to  provide  assurance  to  the  obligee of such
obligation  that such obligation of another will be paid or discharged,  or
that any agreements  relating  thereto  will  be complied with, or that the
holders of such obligation will be protected (in  whole or in part) against
loss  in  respect  thereof. Guaranties shall include,  without  limitation,
(i) the  direct  or indirect  guaranty,  endorsement  (otherwise  than  for
collection or deposit  in  the  ordinary  course  of  business), co-making,
discounting  with  recourse  or sale with recourse by such  Person  of  the
obligation of another, (ii) the  obligation  to make take-or-pay or similar
payments if required regardless of non-performance  by  any  other party or
parties  to  an agreement, and (iii) any liability of such Person  for  the
obligation  of   another   Person  through  any  agreement  (contingent  or
otherwise) (a) to purchase, repurchase or otherwise acquire such obligation
or any security therefor, or  to provide funds for the payment or discharge
of  such  obligation  (whether  in  the  form  of  loans,  advances,  stock
purchases, capital contributions  or  otherwise)  or  (b) to  maintain  the
solvency  or any balance sheet item, level of income or financial condition
of another  Person  if,  in  the  case  of  any  agreement  described under
subclauses  (a)  or  (b)  of  this sentence, the primary purpose or  intent
thereof is as described in the  preceding  sentence.   The  amount  of  any
Guaranty shall be equal to the least of (x) the amount of the obligation so
guaranteed or otherwise supported, (y) the amount to which such Guaranty is
specifically   limited  and  (z) except  with  respect  to  a  Guaranty  of
Indebtedness, the  maximum  exposure  under  such  Guaranty  as  reasonably
calculated  by  the  Borrower  and  approved  by  the  Agent  in  its  sole
discretion.   Guaranties  shall  not  include  (i)  any  of  the  foregoing
obligations to the extent that the same constitutes Indebtedness under  the
definition thereof or is a Guaranty with respect thereto and (2) Guaranties
of  any liability or obligation of the Borrower or any Pool A Subsidiary in
respect  of which the Borrower and the Pool A Subsidiaries are permitted to
become liable pursuant to this Agreement.  The term ``Guarantee'' used as a
verb has a corresponding meaning.

     ``HAZARDOUS  MATERIALS'' means (i) any chemical, material or substance
at any time defined  as  or  included  in  the  definition  of  ``hazardous
substances'',  ``hazardous  wastes'',  ``hazardous materials'', ``extremely
hazardous waste'', ``restricted hazardous  waste'',  ``infectious  waste'',
``toxic   substances'',   ``pollutant'',   ``contaminant''   or  any  other
formulations intended to define, list or classify  substances  by reason of
deleterious  properties  such  as  ignitability,  corrosivity,  reactivity,
carcinogenicity, toxicity, reproductive toxicity, ``TCLP toxicity'' or ``EP
toxicity''  or  words  of similar import under any applicable Environmental
Laws, (ii) any oil, petroleum,  petroleum  fraction  or  petroleum  derived
substance,  (iii) any  drilling  fluids,  produced  waters and other wastes
associated with the exploration, development or production  of  crude  oil,
natural  gas  or  geothermal  resources,  (iv) any  flammable substances or
explosives,  (v) any  radioactive  materials, (vi) asbestos  in  any  form,
(vii) radon,  (viii) urea  formaldehyde  foam  insulation,  (ix) electrical
equipment which contains any  oil  or dielectric fluid containing levels of
polychlorinated  biphenyls  in  excess   of   fifty   parts   per  million,
(x) pesticides,   and  (xi) any  other  chemical,  material  or  substance,
exposure to which is  prohibited,  limited or regulated by any Governmental
Authority or which may or could pose  a  hazard to the health and safety of
the owners, occupants or any Persons in the  vicinity  of  the  Properties;
PROVIDED, however, that Hazardous Materials shall not include any materials
in  a  non-hazardous  form  such  as  asphalt  contained  in road-surfacing
materials or hazardous materials customarily used in the operation of hotel
properties and properly stored and maintained.

     ``HAZARDOUS  RELEASE''  means  any release, spill, emission,  leaking,
pumping,  pouring,  injection,  escaping,   deposit,  disposal,  discharge,
dispersal, dumping, leaching or migration of  Hazardous  Materials into the
indoor or outdoor environment (including the abandonment or disposal of any
barrels,   containers   or   other  receptacles  containing  any  Hazardous
Materials), or into or out of  any  Property, including the movement of any
Hazardous Material through the air, soil,  surface  water,  groundwater  or
property.

     ``IMPOSITIONS''  means all real property taxes and assessments, of any
kind or nature whatsoever,  including, without limitation, vault, water and
sewer rents, rates, charges and  assessments,  levies,  permits, inspection
and   license   fees   and   other   governmental,  quasi-governmental   or
nongovernmental levies or assessments  such  as  maintenance charges, owner
association  dues or charges or fees resulting from  covenants,  conditions
and restrictions  affecting  the  Properties,  assessments  resulting  from
inclusion  of  any  Property  in  any taxing district or municipal or other
special district, any of which are  assessed  or imposed upon the Property,
or become due and payable, and which create or  may  create a Lien upon the
Property, or any part thereof.  In the event that any  penalty, interest or
cost  for  nonpayment  of  any  Imposition  becomes  due and payable,  such
penalty,   interest   or   cost   shall   be   included  within  the   term
``Impositions''.

     ``IMPROVEMENTS''  means  all buildings, structures,  fixtures,  tenant
improvements and other improvements  of  every  kind and description now or
hereafter located in or on or attached to any Land,  including all building
materials, water, sanitary and storm sewers, drainage,  electricity, steam,
gas,  telephone  and  other  utility  facilities,  parking  areas,   roads,
driveways,  walks  and  other  site  improvements;  and  all  additions and
betterments  thereto  and  all  renewals,  substitutions  and  replacements
thereof.

     ``INDEBTEDNESS''  means,  with  respect  to  any  Person  and  without
duplication, to the extent required to be shown on a balance sheet prepared
in  conformity  with  GAAP, (i) all indebtedness for money borrowed by that
Person, (ii) that portion  of  obligations  with  respect to Capital Leases
that  is classified as a liability on a balance sheet  in  conformity  with
GAAP, (iii) notes  payable  and  drafts accepted representing extensions of
credit whether or not representing obligations for borrowed money, (iv) all
obligations owed for all or any part  of  the  deferred  purchase  price of
assets  or  services  purchased by that Person (a) due more than six months
from  the  date  of  incurrence  of  the  obligation  in  respect  thereof,
(b) evidenced by a note  or  similar  written  instrument  or  (c)  owed in
respect   of  real  property  purchased  by  such  Person  or  any  of  its
Subsidiaries,  (v) all  indebtedness secured by any Lien on any property or
asset owned or held by that  Person  regardless of whether the indebtedness
secured thereby shall have been assumed by that Person or is nonrecourse to
the credit of that Person, (vi) obligations  under  Currency Agreements and
Interest  Rate  Agreements, (vii) that portion of any other  obligation  of
that Person (other than reservation and similar deposits from customers and
working capital deposits  from  owners  received  and  held in the ordinary
course of business) that is classified as a liability on a balance sheet in
conformity with GAAP, which obligation is (a) due more than six months from
the  date  of  incurrence  thereof  or (b) evidenced by a note  or  similar
written  instrument,  (viii)  trade  payables   of   such  Person  and  its
Subsidiaries that by their terms are more than 90 days  delinquent and (ix)
all Guaranties by that Person.

     ``INDEMNIFIED  PERSON''  has  the  meaning  assigned to that  term  in
subsection 9.3.

     ``INSURANCE PROCEEDS'' means all insurance proceeds,  damages,  claims
and  rights  of  action  and the right thereto under any insurance policies
relating to any portion of any Property.

     ``INSURANCE REQUIREMENTS''  means  all  terms  of any insurance policy
required  hereunder  covering  or applicable to any Property  or  any  part
thereof, all requirements of the issuer of any such policy, and all orders,
rules, regulations and other requirements  of  the  National  Board of Fire
Underwriters (or any other body exercising similar functions) applicable to
or affecting any Property or any part thereof or any use of any Property or
any portion thereof.

     ``INTELLECTUAL PROPERTY'' means, as of any date of determination,  all
patents,  trademarks,  tradenames,  copyrights,  technology,  know-how  and
processes  used in or necessary for the conduct of the business of the Loan
Parties and  their  respective  Subsidiaries  as  conducted on such date of
determination  that  are  material  to the business, operations,  condition
(financial  or  otherwise) or prospects  of  the  Loan  Parties  and  their
Subsidiaries, taken  as a whole, including any of the foregoing licensed to
the Loan Parties or any of their respective Subsidiaries by other Persons.

     ``INTEREST  PERIOD''   has  the  meaning  assigned  to  that  term  in
subsection 2.2B.

     ``INTEREST RATE AGREEMENT''  means  any  interest rate swap agreement,
interest  rate  cap  agreement,  interest rate collar  agreement  or  other
similar agreement or arrangement designed  to protect CapStar or any of its
Subsidiaries against fluctuations in interest rates.

     ``INTEREST RATE DETERMINATION DATE'' means  each  date for calculating
the Adjusted Eurodollar Rate for purposes of determining  the interest rate
in  respect  of  an Interest Period.  The Interest Rate Determination  Date
shall be the second  Business  Day  prior  to  the first day of the related
Interest Period for any Loan.

     ``INTERNAL REVENUE CODE'' means the Internal  Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter.

     ``INVESTMENT''  means,  with  respect  to any Person  or  any  of  its
Subsidiaries, as of any date of determination and without duplication:

          (i)  any  direct  or  indirect  purchase   or  other  acquisition
     (whether  or  not  for  consideration)  by  such investing  Person  or
     Subsidiary of, or of a beneficial interest in,  any  Securities of any
     other Person;

         (ii)  any direct or indirect redemption, retirement,  purchase  or
     other  acquisition  for  value  by such investing Person or Subsidiary
     from any other Person (other than  (a) a  Person with respect to which
     such investing Person or Subsidiary is a Wholly  Owned  Subsidiary  or
     (b) any other Wholly Owned Subsidiary of the Person referred to in the
     preceding  clause (a);  PROVIDED  that, in the case of CapStar and its
     Subsidiaries, such other Wholly Owned  Subsidiary  is a Loan Party and
     has  Guaranteed  the  Obligations), of any equity Securities  of  such
     investing Person or Subsidiary;

        (iii)  any  direct  or  indirect  loan,  advance  (other  than  (a)
     advances to officers, employees,  consultants,  accountants, attorneys
     and other advisors and members of the Board of Directors of any Person
     for  moving, entertainment and travel expenses, drawing  accounts  and
     similar  expenditures  in each case incurred in the ordinary course of
     business and (b) advances to officers of any Person for other purposes
     in an amount not greater than $100,000 individually or $330,000 in the
     aggregate,  in  each  case   at   any  time  outstanding)  or  capital
     contribution  to  any  other Person, including  all  indebtedness  and
     accounts receivable from that other Person that are not current assets
     or did not arise from sales  to  that  other  Person  in  the ordinary
     course of business;

         (iv)  any  payment  to  any  other  Person  for the purpose of  or
     otherwise  in  connection  with  securing,  extending,   renewing   or
     modifying any Management Agreement;

          (v)  any   commitment   or  obligation  to  make  any  investment
     described in clauses (i) through (iv) above; and

         (vi)  any liability that is  recourse  to such investing Person or
     Subsidiary  or  secured  by  any  asset  of such investing  Person  or
     Subsidiary and that arises, by law, contract,  ownership of Securities
     or otherwise, directly or indirectly, as the result of or otherwise in
     connection with the origination, continuation or  termination  of  any
     investment described in clauses (i) through (iv) above.

The  amount  of  any  Investment, as of any date of determination, shall be
equal to (y) with respect  to  an  Investment  referred to in clause (i) or
(ii) of the preceding sentence, the remainder of  (1) the  sum  of original
cost of such Investment PLUS the cost of all additions thereto as  of  such
date  of  determination, MINUS (2) the aggregate amount paid to such Person
or Subsidiary  as  a  return  of  such  Investment;  PROVIDED, that (A) the
calculation of the amount referred to in this clause (2)  shall exclude all
fees  and  other  amounts  (or  the portion thereof) that shall  constitute
interest, dividends or other amounts  in  respect  of  the  return  on such
Investment,  as determined in accordance with GAAP, and (B) the calculation
of the amount referred to in this clause (i) shall exclude, all adjustments
for increases  or  decreases in value, and write-ups, write-downs or write-
offs with respect to such Investment, and (z) with respect to an Investment
referred to in clause (iv)  or  (v)  of the preceding sentence, the maximum
aggregate  liability  for which such investing  Person  or  Subsidiary  may
become liable, by law, contract, ownership of Securities or otherwise, with
respect to such Investment as of such date of determination.

     ``IP LICENSE AGREEMENTS''  has  the  meaning  assigned to that term in
subsection 5.21A.
     ``ISSUING LENDER'' means, with respect to any Letter  of  Credit,  the
Lender  which  agrees  or  is  otherwise  obligated to issue such Letter of
Credit, determined as provided in subsection 3.1B(ii).

     ``JOINT VENTURE'' means a joint venture,  partnership or other similar
arrangement, whether in corporate, partnership,  limited  liability company
or  other  legal  form,  which joint venture, partnership or other  similar
arrangement  may  be  a  Subsidiary   of  any  Person,  including,  without
limitation, a Subsidiary (other than a  Wholly  Owned  Subsidiary)  of  the
Borrower.

     ``LAND''  means,  with  respect  to  each  Pool  A Property and Pool B
Property,  the  land  located  in the municipalities, towns,  counties  and
states  listed on SCHEDULE 5.4A1  annexed  hereto  (and  more  particularly
described  (i) in EXHIBIT A to each Mortgage (other than the Mortgages with
respect to the  Ground  Leases,  in  which  case  the  applicable  Land  is
described  in EXHIBIT A to each such Mortgage) and (ii) in EXHIBIT A to the
Atlanta  Collateral   Assignment))   and   SCHEDULE 5.4A2  annexed  hereto,
respectively, together with all strips and gores  within  or adjoining such
property, all estate, right, title, interest, claim or demand whatsoever of
any Loan Party or any of its Subsidiaries in the streets, roads, sidewalks,
alleys,  and  ways  adjacent  thereto  (whether or not vacated and  whether
public  or  private and whether open or proposed),  all  vaults  or  chutes
adjoining such  land,  all  of  the  tenements,  hereditaments,  easements,
reciprocal  easement agreements, rights pursuant to any trackage agreement,
rights to the  use of common drive entries, rights-of-way and other rights,
privileges and appurtenances  thereunto  belonging or in any way pertaining
thereto, all reversions, remainders, dower  and right of dower, curtesy and
right of curtesy, all of the air space and right  to  use  said  air  space
above  such property, all transferable development rights arising therefrom
or transferred  thereto,  all  water  and  water  rights (whether riparian,
appropriative or otherwise, and whether or not appurtenant)  and  shares of
stock  evidencing  the same, all mineral, mining, gravel, geothermal,  oil,
gas, hydrocarbon substances  and  other  rights  to produce or share in the
production  of  anything  related  to  such property, all  drainage,  crop,
timber,  agricultural,  and  horticultural  rights  with  respect  to  such
property,  and  all  other  appurtenances  appurtenant  to  such  property,
including without limitation,  any now or hereafter belonging or in any way
appertaining thereto, and all claims  or demands of such Loan Party or such
Subsidiary, either at law or in equity, in possession or expectancy, now or
hereafter acquired, of, in or to the same.

     ``LEASE'' means each of the leases  (other  than  the  Ground Leases),
licenses,  concession  agreements,  franchise  agreements (other  than  the
Franchise Agreements) and other occupancy agreements  and  other agreements
demising, leasing or granting rights of possession or use or, to the extent
of  the interest therein of any Loan Party or any of its Subsidiaries,  any
sublease,  subsublease,  underletting or sublicense, which now or hereafter
may affect any Property or  any part thereof or interest therein, including
any  agreement  relating to a loan  or  other  advance  of  funds  made  in
connection with any such lease, license, concession agreement, franchise or
other occupancy agreement  and  such sublease, subsublease, underletting or
sublicense, and every amendment,  restatement, supplement, consolidation or
other modification of or other agreement  relating  to  or  entered into in
connection  with  such  lease, license, concession agreement, franchise  or
other occupancy agreement  and  such sublease, subsublease, underletting or
sublicense, and every Guaranty of  the  performance  and  observance of the
covenants,  conditions and agreements to be performed and observed  by  the
other party thereto, and any Guaranties of leasing commissions.

     ``LENDER'' and ``LENDERS'' means the persons identified as ``Lenders''
and listed on  the  signature  pages of this Agreement, together with their
successors and permitted assigns pursuant to subsection 9.1.

     ``LETTER OF CREDIT'' OR ``LETTERS OF CREDIT'' means Commercial Letters
of Credit and Standby Letters of  Credit  issued or to be issued by Issuing
Lenders for the account of the Borrower pursuant to subsection 3.1.

     ``LETTER OF CREDIT USAGE'' means, as at any date of determination, the
sum of (i) the maximum aggregate amount which  is or at any time thereafter
may  become  available  for  drawing  under  all  Letters  of  Credit  then
outstanding PLUS (ii) the aggregate amount of all drawings under Letters of
Credit  honored by Issuing Lenders and not theretofore  reimbursed  by  the
Borrower  (including  any  such  reimbursement out of the proceeds of Loans
pursuant to subsection 3.3B).

     ``LIEN'' means any lien (including  any lien or security title granted
pursuant to any mortgage, deed of trust or  deed  to  secure debt), pledge,
hypothecation,  assignment,  security  interest, charge, levy,  attachment,
restraint or encumbrance of any kind (including  any  conditional  sale  or
other  title  retention agreement, any lease in the nature thereof, and any
agreement to give  any  security  interest)  and any option, trust or other
preferential  arrangement  having  the  practical  effect  of  any  of  the
foregoing.

     ``LIQUOR LEASE'' means each Lease entered into between the Borrower or
any of its Wholly Owned Subsidiaries, in  each  case  as  lessor,  and  the
holder  of  a  Liquor  License  in  respect  of a Property, in each case in
connection  with  the  sale  of  alcoholic  beverages   at  such  Property,
substantially  in the form approved by the Agent on or before  the  Closing
Date or in such  form  as  may be reasonably acceptable to the Agent as any
such Lease may be amended, restated,  supplemented  or  otherwise  modified
from time to time in accordance with the terms hereof and thereof.

     ``LIQUOR  LICENSES''  means,  collectively, the licenses set forth  on
SCHEDULE 5.4H  annexed  hereto  and  each   other  license  issued  by  the
Department of Alcoholic Beverage Control or similar  state  or local agency
to any Loan Party or any of its Subsidiaries or in respect of any Property,
in  each  case in connection with the sale of alcoholic beverages  at  such
Property, as  such  Schedule  may  be revised from time to time pursuant to
subsection 2.9, 2.10 or 7.17.

     ``LIQUOR OPERATIONS SERVICING AGREEMENTS''  means,  collectively,  the
sub-management  agreements  entered into between the Borrower and each Loan
Party (or Subsidiary of a Loan Party) that is a holder of a Liquor License,
substantially in the form approved  by  the  Agent on or before the Closing
Date or in such other form as may be reasonably acceptable to the Agent, as
any such sub-management agreement may be amended, restated, supplemented or
otherwise modified from time to time in accordance  with  the terms thereof
and hereof.

     ``LLC  LOAN  PARTIES''  means,  collectively, each Person  that  is  a
limited liability company and is, or becomes, a Loan Party.

     ``LOAN DOCUMENTS'' means, collectively,  this  Agreement,  the CapStar
Guaranty,  the  Affiliate Guaranty, the Notes, the Security Documents,  the
Environmental Indemnity,  the  Letters of Credit (and any applications for,
or reimbursement agreements or other  documents or certificates executed by
the  Borrower in favor of an Issuing Lender  relating  to  the  Letters  of
Credit),  the  Collateral Account Agreement and any other documents entered
into in connection with the Cash Management System.

     ``LOAN EXPOSURE'' means, with respect to any Lender, as of any date of
determination  (i) prior  to  the  termination  of  the  Commitments,  that
Lender's Commitment  and (ii) after the termination of the Commitments, the
sum of (a) the aggregate  outstanding principal amount of the Loans of that
Lender,  PLUS (b) in the event  that  Lender  is  an  Issuing  Lender,  the
aggregate Letter of Credit Usage in respect of all Letters of Credit issued
by that Lender  (in  each case net of any participations purchased by other
Lenders in such Letters of Credit or any unreimbursed drawings thereunder),
PLUS (c) the aggregate  amount  of  all  participations  purchased  by that
Lender  in  any  outstanding Letters of Credit or any unreimbursed drawings
under any Letters of Credit.

     ``LOAN  PARTIES''  means,  collectively,  CapStar,  CapStar  Sub,  the
Borrower and any other Subsidiary of CapStar which is or becomes a party to
a Loan Document.

     ``LOANS''  means,  collectively,  the Loans made by the Lenders to the
Borrower pursuant to subsection 2.1B.

     ``LOCAL ACCOUNTS'' means, collectively, the Deposit Accounts listed on
SCHEDULE 5.23 annexed hereto as ``Local  Accounts''  and  any other Deposit
Account established with respect to one or more Properties  for the purpose
of receiving Receipts pursuant to subsection 6.15.

     ``MAJOR   RENOVATION/RESTORATION''   means,   as   of   any   date  of
determination, any Renovation or Restoration of a Property with respect  to
which  more  than 50% of the rooms ``available for sale'' at the applicable
Property have been, are scheduled to be, or could reasonably be expected to
be, ``rooms out-of-order'',  as  determined  in accordance with the Uniform
System,  during  any  period  of  30  consecutive  days;  PROVIDED  that  a
Restoration related to a casualty or Taking and conducted  pursuant to and,
as of such date of determination, satisfying the conditions  of  subsection
6.11F is not a Major Renovation/Restoration.

     ``MAJOR RENOVATION/RESTORATION REMOVAL PERIOD'' means with respect  to
any   Property,   the   period   commencing   on   the  day  that  a  Major
Renovation/Restoration  shall commence with respect to  such  Property  and
terminating  on  the  day  that  such  Major  Renovation/Restoration  shall
terminate with respect to such  Property,  in  each  case  as such dates of
commencement and termination shall be reasonably determined  by  the  Agent
based  on  documentation  received  from  the  Borrower  and  on such other
information as the Agent shall determine to be relevant.

     ``MANAGED  PROPERTIES''  means,  collectively,  the  real  properties,
together  with  all Improvements thereon and all fixtures attached  thereto
and all personal property used in connection therewith, that are managed by
the Borrower or any  of  its  Wholly  Owned  Subsidiaries  pursuant  to the
Management Agreements.  Managed Properties do not include Properties.

     ``MANAGEMENT AGREEMENT EFFECTIVENESS DATE'' means the date that is  30
days  after the last day of a calendar quarter that is also the last day of
12 consecutive  calendar  months  during  which  the  aggregate  amount  of
Management  Fees  paid  to  the  Borrower  and its Subsidiaries pursuant to
Management Agreements is equal to or greater  than  10% of the consolidated
gross  revenues  of  CapStar  and  its  Subsidiaries;  PROVIDED   that  the
calculation of gross revenues shall exclude the income excluded from clause
(i) of the definition of ``Consolidated EBITDA''.

     ``MANAGEMENT  AGREEMENTS''  means,  collectively, all hotel management
agreements under which CapStar or any of its  Subsidiaries is named or acts
as   manager,   including  the  hotel  management  agreements   listed   on
SCHEDULE 5.4D  annexed   hereto,   as  such  Schedule  may  be  revised  or
supplemented from time to time pursuant  to subsection 2.9A or 2.9B, as any
such hotel management agreement may be amended,  restated,  supplemented or
otherwise  modified from time to time in accordance with the terms  thereof
and hereof.   Management Agreements do not include the Servicing Agreements
or other hotel  management  agreements  among  the  Borrower and any of its
Subsidiaries with respect to the Properties.

     ``MANAGEMENT  FEES''  means, collectively, all hotel  management  fees
(however characterized, including  base  fees,  trade  name fees, incentive
fees, special incentive fees, termination fees and all fees  in  respect of
liquor  license  operations)  and all other fees or charges payable to  the
manager for the management and  operation  of a hotel property, the related
land and the improvements thereof.

     ``MARGIN STOCK'' has the meaning assigned to that term in Regulation U
of the Board of Governors of the Federal Reserve  System  as in effect from
time to time.

     ``MARKET EQUITY CAPITALIZATION'' means, with respect to any issuer and
as of any date of determination, the product of (i) the number of shares of
common  stock  of  such  issuer  outstanding as of such date MULTIPLIED  BY
(ii) the average of the closing bid  prices  of  such  common  stock on the
principal national securities exchange on which such common stock is listed
or, if such common stock is not so listed, on NASDAQ/NMS, as the  case  may
be, for each of the 30 consecutive trading days next preceding such date of
determination  (or such shorter period during which such common stock shall
have been publicly  traded  until such time as it has been so traded for 30
consecutive trading days); PROVIDED  that  the  amount  referred  to in the
preceding  clause (ii) for the Common Stock on the Formation Date shall  be
the initial offering price per share of Common Stock pursuant to the Equity
Offering.

     ``MATERIAL  ADVERSE  EFFECT'' means (i) a material adverse effect upon
the business, operations, condition  (financial  or otherwise) or prospects
of the Loan Parties, taken as a whole, and (ii) the  material impairment of
the ability of any of the Loan Parties to perform, or  of  the Agent or the
Lenders to enforce, any Obligation of any Loan Party.
     ``MATERIAL LEASE'' means each Lease either (i) demising  in  excess of
7,500  square  feet  of  the  Improvements with respect to any Property  or
(ii) generating in excess of 5.0%  of  the  Property  Gross  Revenues  with
respect  to any Property or otherwise identified as a Material Lease by the
Borrower pursuant  to  subsection 4.1K; PROVIDED that no Liquor Lease shall
be a Material Lease.

     ``MATERIAL  MANAGEMENT  AGREEMENT''  means  any  Management  Agreement
pursuant to which  the  Borrower or any of its Subsidiaries has received or
reasonably expects that it  is,  or  will  become, entitled to receive more
than $250,000 per year in gross revenues.

     ``MATURITY DATE'' means the earliest of (i) the date that is the third
Anniversary of the Closing Date, as such date  may  be extended pursuant to
subsection 2.1F  to  a  date  not later than the fifth Anniversary  of  the
Closing Date, (ii) the date as  of  which the Obligations shall have become
immediately due and payable pursuant  to  subsection 8.1 and (iii) the date
as of which the Obligations shall have become  immediately  due and payable
pursuant to subsection 2.4B(v).

     ``MBL  ACQUISITION  DOCUMENTS''  means the MBL Purchase Agreement  and
each other document or certificate executed in connection therewith.

     ``MBL  PROPERTIES''  means  each of the  hotel  properties  listed  on
SCHEDULE 1.1A annexed hereto to be acquired by the Borrower pursuant to the
MBL Acquisition Documents.

     ``MBL PURCHASE AGREEMENT'' means  that  certain  Agreement of Sale and
Purchase dated June 20, 1996 by and between MBL Life Assurance  Corporation
and  EquiStar  Hotel  Investors,  L.P.,  as  such agreement may be amended,
restated, supplemented or otherwise modified from time to time.

     ``MOODY'S'' means Moody's Investors Service,  Inc. or any successor to
the business thereof.

     ``MORTGAGE''  means  each  Mortgage,  Assignment  of  Rents,  Security
Agreement and Fixture Filing and each Deed of Trust, Assignment  of  Rents,
Security  Agreement  and  Fixture  Filing  and  each  Deed  to Secure Debt,
Assignment  of  Rents,  Security Agreement and Fixture Filing executed  and
acknowledged by the Loan  Party  thereto  in  favor  of  the  Agent for the
benefit  of the Lenders (or, in the case of a deed of trust, to  a  trustee
for the benefit  of  the  Agent  and the Lenders) substantially in the form
delivered on or before the Closing  Date pursuant to subsection 4.1E(i), as
each such agreement may be amended, restated,  supplemented,  consolidated,
extended  or  otherwise modified from time to time in accordance  with  the
terms thereof and hereof.

     ``MORTGAGED  PROPERTY''  has  the meaning assigned to that term in the
Mortgages.

     ``MULTIEMPLOYER PLAN'' means any  Employee  Benefit  Plan  that  is  a
``multiemployer plan'', as defined in Section 3(37) of ERISA.

     ``NASDAQ/NMS''  means  the  National Association of Securities Dealers
Automated Quotation System/National Market Securities.

     ``NET INCOME'' means, with respect  to  any  Person,  the  net  income
(loss)  of  such  Person, determined in accordance with GAAP and before any
reduction in respect  of Preferred Stock dividends, excluding, however, any
gain (but not loss), together  with any related provision for Taxes on such
gain  (but not loss), realized in  connection  with  any  Asset  Sale,  and
excluding  any extraordinary gain (but not loss), together with any related
provision for taxes on such extraordinary gain (but not loss).

     ``NET INSURANCE/CONDEMNATION  PROCEEDS''  means all Insurance Proceeds
on  account of damage or destruction to any Property  or  all  Condemnation
Proceeds  in respect of any Property, MINUS the reasonable cost, if any, of
such recovery  and  of  paying  out  such  proceeds,  including  reasonable
attorneys'  fees  and costs allocable to inspecting the Work and the  plans
and specifications therefor.

     ``NET SALES PRICE'' means, with respect to any sale or other permanent
disposition by a Loan  Party  or  any of its Subsidiaries of a Property, or
other asset, the gross purchase price  therefor  less the sum of (i) except
with  respect  to  the  sale or other permanent disposition  of  a  Pool  A
Property, the amounts applied  to  the  payment  of  Indebtedness  or other
obligations  secured by a Lien on such Property or other asset (other  than
the Obligations),  (ii) the  reasonable  out-of-pocket  costs  and expenses
incurred by such Loan Party or Subsidiary directly in connection  with such
sale  or  other  permanent  disposition,  including  income  taxes  paid or
estimated  to  be  actually  payable as a result thereof, after taking into
account  any  available tax credits  or  deductions  and  any  tax  sharing
arrangements (PROVIDED  that  the amount of income taxes so estimated to be
actually payable shall be approved  by  the Agent, which approval shall not
be  unreasonably  withheld,  conditioned  or  delayed),  and  (iii) closing
adjustments contemplated and reserved.

     ``NET WORTH'' means, as of any date of  determination,  the sum of the
capital  stock  and  additional paid-in capital PLUS retained earnings  (or
MINUS accumulated deficits)  of  CapStar and its Subsidiaries determined in
conformity with GAAP.

     ``NOTES''  means,  collectively,   (i) the  promissory  notes  of  the
Borrower  issued on the Closing Date pursuant  to  subsection  2.10(i)  and
(ii) any promissory  notes  issued  by  the  Borrower  pursuant to the last
sentence of subsection 10.1B(i) in connection with assignments  of the Loan
Commitments  and  Loans of any Lenders, in each case substantially  in  the
form  of EXHIBIT I annexed  hereto,  as  they  may  be  amended,  restated,
supplemented or otherwise modified from time to time in accordance with the
terms thereof and hereof.

     ``NOTICE  OF  BORROWING''  means a notice substantially in the form of
EXHIBIT II annexed hereto delivered  by  the Borrower to the Agent pursuant
to subsection 2.1C with respect to a proposed borrowing hereunder.

     ``NOTICE OF CONTINUATION'' means a notice substantially in the form of
EXHIBIT III annexed hereto delivered by the  Borrower to the Agent pursuant
to subsection 2.2D with respect to a proposed conversion or continuation of
the applicable basis for determining the interest  rate with respect to the
Loans specified therein.

     ``NOTICE   OF   ISSUANCE  OF  LETTER  OF  CREDIT''  means   a   notice
substantially in the form  of  EXHIBIT  IV  annexed hereto delivered by the
Borrower to the Agent pursuant to subsection  3.1B(i)  with  respect to the
proposed issuance of a Letter of Credit.

     ``NOTICE OF RENOVATION/RESTORATION'' means a notice, substantially  in
the form of EXHIBIT XVII annexed hereto, delivered to the Agent pursuant to
subsection 6.11A, 6.11C or 7.12A.

     ``OBLIGATIONS''  means,  collectively, all obligations of every nature
of CapStar or any of its Subsidiaries  from  time to time owed to the Agent
or Lenders or any of them under or in respect  of  the  Loans  and the Loan
Documents, whether for principal, interest, reimbursement of amounts  drawn
under  Letters  of  Credit, fees, commissions, expenses, indemnification or
otherwise.

     ``OFFICERS' CERTIFICATE''  means,  as  applied  to  any corporation, a
certificate executed on behalf of such corporation by a person specified in
this  Agreement for such purpose or, in the absence of such  specification,
by its chairman of the board (if an officer) or its president or one of its
vice presidents  and  by  its  chief  financial  officer  or its treasurer;
PROVIDED,  however,  that every Officers' Certificate with respect  to  the
compliance with a condition  precedent  to the making of the Loan hereunder
shall  include  (i) a statement that each officer  making  or  giving  such
Officers' Certificate  has read such condition and any definitions or other
provisions contained in  this  Agreement relating thereto, (ii) a statement
that, in the opinion of each signer,  he  has made or has caused to be made
such examination or investigation as is reasonably  necessary to enable him
to express an informed opinion as to whether or not such condition has been
complied with, and (iii) a statement as to whether, in  the opinion of each
signer, such condition has been complied with.

     ``OMNIBUS  MANAGEMENT  AND  LIQUOR  LICENSE  AGREEMENT''   means   the
Agreement  regarding  Servicing Agreements and Liquor Licenses executed and
delivered by the Borrower and each other Loan Party thereto in favor of the
Agent on or before the  Closing  Date  pursuant  to subsection 4.1E(i), and
thereafter  by  each  other  Subsidiary  of CapStar that  becomes  a  party
thereto, substantially in the form of EXHIBIT  XI  annexed  hereto, as such
agreement may be amended, restated, supplemented or otherwise modified from
time to time in accordance with the terms hereof and thereof.

     ``OPERATING EXPENSES'' means, for any period and as calculated  on the
accrual  basis  of accounting, all expenses incurred by Cap Star or any  of
its Subsidiaries  during  such  period  in  connection  with the ownership,
management, operation, cleaning, maintenance, ordinary repair or leasing of
any Property, including, without duplication:

          (i)  costs and expenses in connection with the cleaning, ordinary
     repair, maintenance, decoration and painting of such Property;

         (ii)  wages,  benefits, payroll taxes, uniforms,  insurance  costs
     and all other related  expenses  for  employees  of  CapStar  and  its
     Subsidiaries   engaged   in   the   management,  operation,  cleaning,
     maintenance, ordinary repair and leasing  of such Property and service
     to guests, customers, Tenants, concessionaires  and  licensees of such
     Property;

        (iii)  the cost of all services and utilities with  respect to such
     Property, including all electricity, oil, gas, water, steam,  heating,
     ventilation, air conditioning, elevator, escalator, landscaping, model
     furniture,  answering  services,  telephone maintenance, credit check,
     snow removal, trash removal and pest  extermination costs and expenses
     and any other energy, utility or similar  item  and  overtime services
     with respect to such Property;

         (iv)  the cost of building and cleaning supplies with  respect  to
     such Property;

          (v)  insurance   premiums  required  in  order  to  maintain  the
     insurance policies required  under  this  Agreement  or any other Loan
     Documents  or  Pool B Obligations, in each case with respect  to  such
     Property (which,  in  the  case  of  any  policies  covering  multiple
     Properties,  shall  be  allocated  among  the  Properties  pro rata in
     proportion  to  the  insured  value of the Properties covered by  such
     policies);

         (vi)  legal, accounting, engineering  and  other  fees,  costs and
     expenses  incurred  by  or on behalf of CapStar or such Subsidiary  in
     connection  with the ownership,  management,  operation,  maintenance,
     ordinary repair  and  leasing  of  such Property, including collection
     costs and expenses;

        (vii)  operating  costs  and  expenses  of  security  and  security
     systems provided to and/or installed  and  maintained  with respect to
     such Property;

       (viii)  operating   costs   and  expenses  of  reservation  systems,
     internal telephone exchanges and key card systems with respect to such
     Property;

         (ix)  costs and expenses of  parking  and  valet services, parking
     lot maintenance and ordinary parking lot repairs  in  respect  of such
     Property;

          (x)  costs  and  expenses  of food and beverages with respect  to
     such Property;

         (xi)  real property taxes and  assessments  with  respect  to such
     Property and the costs incurred in seeking to reduce such taxes or the
     assessed value of such Property;

        (xii)  advertising,  marketing  and  promotional costs and expenses
     with respect to such Property;

       (xiii)  costs and expenses incurred in connection with lock changes,
     storage,  moving,  market surveys, permits  (and  the  application  or
     registration  therefor)   and   licenses   (and   the  application  or
     registration therefor) with respect to such Property;
        (xiv)  maintenance and cleaning costs related to guest and customer
     amenities with respect to such Property;

         (xv)  costs  and  expenses  of  maintaining  and  repairing   FF&E
     (including the breakage or loss of any such FF&E) with respect to such
     Property;

        (xvi)  franchise   fees  due  and  payable  with  respect  to  such
     Property;

       (xvii)  payments due and payable under the Ground Lease with respect
     to such Property, if applicable;

      (xviii)  actual reserves required under the Ground Lease with respect
     to such Property, if applicable;

        (xix)  Management Fees  with  respect  to  such  Property  for such
     period;

         (xx)  tenant improvements and leasing commissions with respect  to
     such Property accrued during such period;

        (xxi)  contributions  by  CapStar or any of its Subsidiaries to any
     merchants'  association, whether  as  dues  or  advertising  costs  or
     otherwise with respect to such Property;

       (xxii)  costs incurred pursuant to any reciprocal easement agreement
     affecting such Property;

      (xxiii)  refunds  CapStar  or  any  of  its  Subsidiaries must pay to
     guests, customers, Tenants, concessionaires and  licensees  and  other
     occupants of such Property;

       (xxiv)  reserves  (other  than  reserves required to be deposited in
     the Capital Reserve Account) for such  purposes and in such amounts as
     the Borrower and the Agent may reasonably agree upon;

        (xxv)  costs and expenses of maintaining  operating,  repairing and
     servicing vehicles, including fuel and insurance premiums;

       (xxvi)  costs  of environmental audits and monitoring, environmental
     remediation work or any other costs and expenses incurred with respect
     to compliance with Environmental Laws; and

         (27)  all other  ongoing  expenses  which  in  accordance with the
     accrual basis of accounting should be included in CapStar's  or any of
     its Subsidiaries' annual financial statements as operating expenses of
     such Property.

Notwithstanding  the  foregoing,  Operating  Expenses  shall  not  include,
without    duplication,   (a) non-cash   equity   participation   expenses,
(b) Consolidated Interest Expense, including such items included within the
definition thereof  as  shall  apply  to  any  Property  or Properties with
respect  to which such Operating Expenses are being determined,  (c) income
taxes, (d) depreciation, (e) amortization, (f) principal or Release Prices,
if any, due  under  the  Loans or the Notes or otherwise in connection with
the Obligations, (g) principal,  if  any,  due  in  respect  of  the Pool B
Obligations, or (h) expenses referred to in the preceding sentence that are
capitalized   on  the  financial  statements  of  CapStar  or  any  of  its
Subsidiaries in conformity with GAAP.

     ``OPERATING  LEASE'' means, with respect to any Person, a lease of any
property (whether real,  personal  or mixed) by that Person as lessee that,
in conformity with GAAP, is not accounted  for  as  a  capital lease on the
balance sheet of that Person.

     ``ORIGINAL   ACQUISITION   AGREEMENTS''   means,   collectively,   the
agreements entered into before the Closing Date by any Loan Party or any of
its Subsidiaries or any predecessor to any Loan Party or such Subsidiary in
connection  with  the acquisition of a Property, other than  the  Formation
Documents, under or  with respect to which agreements CapStar or any of its
Subsidiaries has any rights  or  obligations as of the Closing Date, as any
such agreement may be amended, restated, supplemented or otherwise modified
from time to time.

     ``ORIGINAL ACQUISITION DOCUMENTS''  means,  collectively  the Original
Acquisition   Agreements   and   each   certificate,   opinion,  agreement,
assignment,  deed,  instrument  or other document delivered  in  connection
therewith or pursuant thereto.

     ``ORIGINAL FINANCING LETTER''  means  that  certain  letter  agreement
dated as of August 8, 1996 by and among CapStar, the Borrower, Bankers, The
First  National  Bank  of Boston and Wells Fargo Bank, N.A., as such letter
agreement may be amended, restated, supplemented or otherwise modified from
time to time.

     ``OTHER  CAPITAL  RESERVE  ACCOUNTS''  means,  collectively,  accounts
required  to  be maintained  by  the  Loan  Parties  and  their  respective
Subsidiaries pursuant  to  the  terms  of  the  Pool B  Obligations for the
deposit, reserve and disbursement of funds for Capital Items  in respect of
the  related  Pool B  Properties.  Other Capital Reserve Accounts  are  not
Capital Reserve Accounts.

     ``PARTNERSHIP LOAN  PARTIES'' means, collectively, each Person that is
a partnership and is, or becomes, a Loan Party.

     ``PAYMENT DATE'' means  the last day of each calendar month, beginning
October  31,  1996, or, if such  day  is  not  a  Business  Day,  the  next
succeeding Business Day.

     ``PBGC'' means  the  Pension  Benefit  Guaranty  Corporation  (or  any
successor thereto).

     ``PENSION  PLAN''  means  any  Employee  Benefit  Plan,  other  than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue
Code or Section 302 of ERISA.

     ``PERMITTED  ENCUMBRANCES''  means  the  Liens  shown  on SCHEDULE 7.2
annexed  hereto  for  such  Property  and,  with  respect  to  any Property
(including  any Pool B Property), the following types of Liens (other  than
any such Lien  imposed  pursuant  to  Section 401(a)(29)  or  412(n) of the
Internal Revenue Code or by ERISA):

          (i)  Liens  for real property Taxes, assessments, vault  charges,
     water and sewer rents,  and  other Impositions the payment of which is
     not, at the time, required by subsection 6.4;

         (ii)  the Leases in existence  on  the Closing Date and any Leases
     entered into thereafter in accordance with  the  requirements  of  the
     Loan Documents;

        (iii)  covenants,  easements,  rights-of-way,  restrictions,  minor
     encroachments  or  other similar encumbrances incurred in the ordinary
     course of business of  CapStar  and  its Subsidiaries that do not make
     such Property unmarketable or interfere  in  any material respect, and
     which could not reasonably be expected to interfere  in  any  material
     respect,  with the use of the Property for hotel purposes or with  the
     ordinary conduct of the business of CapStar and its Subsidiaries;

         (iv)  Liens securing the Obligations;

          (v)  Liens  that  are  bonded and thereby released of record in a
     manner reasonably satisfactory to the Agent;

         (vi)  rights  of guests to  occupy  rooms  and  of  Tenants  under
     Leases;

        (vii)  all exceptions  contained  in any Title Policy (a) delivered
     on  or prior to the Closing Date and reasonably  satisfactory  to  the
     Lenders  or  (b)  with respect to an Additional Pool A Property or, if
     such  exceptions  reflect  one  or  more  Liens  securing  a  monetary
     obligation, a Pool B  Property,  in each case approved by the Agent in
     its sole discretion; PROVIDED that  in  no  event  shall any Servicing
     Agreement, Management Agreement or other hotel management agreement be
     a Permitted Encumbrance.

     ``PERSON'' means, collectively, natural persons, corporations, limited
liability  companies,  limited  partnerships,  general partnerships,  joint
stock  companies, Joint Ventures, associations, companies,  trusts,  banks,
trust companies,  land  trusts,  business  trusts  or  other organizations,
whether or not legal entities, and Governmental Authorities.

     ``POOL A GROUND LEASE'' means each of the ground leases  with  respect
to  the  Pool A  Properties listed on SCHEDULE 5.4B annexed hereto, as such
Schedule may be revised  or  supplemented  from  time  to  time pursuant to
subsection 2.9 or 2.10, together with all right, title and interest  of any
Loan  Party,  as  the  case  may be, in and to the leasehold estate created
pursuant  to each such ground lease  as  each  such  ground  lease  may  be
amended, restated,  supplemented or otherwise modified from time to time in
accordance with the terms thereof and hereof.

     ``POOL A PROPERTIES''  means,  collectively, the hotel properties, the
Land on which they are located, the related  Pool A  Ground  Leases and all
Improvements  thereon  and  all fixtures attached thereto and all  personal
property used in connection therewith,  in  each case as listed on SCHEDULE
5.4A1 annexed hereto, as such Schedule may be  revised or supplemented from
time to time pursuant to subsection 2.9 or 2.10.

     ``POOL  A  SUBSIDIARIES''  means,  collectively,   each  Wholly  Owned
Subsidiary  of the Borrower in existence on the date of this  Agreement  or
created pursuant to subsection 7.7 to own or lease any Pool A Property.

     ``POOL B  DOCUMENTS''  means,  collectively, each Pool B Ground Lease,
agreement, Guaranty, instrument, promissory  note or other document entered
into by any Loan Party or any of its Subsidiaries  in  connection  with any
Pool B  Obligation  and set forth on SCHEDULE 5.4C annexed hereto, as  each
such Pool B Ground Lease, agreement, Guaranty, instrument or other document
may be amended, restated,  supplemented  or otherwise modified from time to
time),  as  such Schedule may be revised from  time  to  time  pursuant  to
subsections 2.9B and 2.10.

     ``POOL B  GROUND  LEASE'' means each of the ground leases with respect
to the Pool B Properties  listed  on  SCHEDULE 5.4C annexed hereto, as such
Schedule may be revised or supplemented  from  time  to  time  pursuant  to
subsection 7.11.

     ``POOL  B  INDEBTEDNESS''  has  the  meaning  assigned to that term in
subsection 7.1(v).

     ``POOL B OBLIGATIONS'' means, collectively, the  obligations of any of
the Loan Parties, any of their respective Subsidiaries  and any of the Pool
B  Subsidiaries,  respectively, of any nature, from time to  time  owed  in
respect of any Pool  B Indebtedness, whether for principal, interest, fees,
commissions, expenses, indemnification or otherwise.

     ``POOL B PROPERTIES''  means,  collectively, the hotel properties, the
Land  on  which  they  are located and all  Improvements  thereon  and  all
fixtures  attached  thereto  and  all  personal  property  used  solely  in
connection therewith,  in  each  case  as  listed on SCHEDULE 5.4A2 annexed
hereto, as such Schedule may be revised or supplemented  from  time to time
pursuant to subsection 2.9B and 2.10.

     ``POOL   B  SUBSIDIARIES''  means,  collectively,  each  Wholly  Owned
Subsidiary of the Borrower created pursuant to subsection 7.7 to own one or
more Pool B Properties.

     ``POTENTIAL  EVENT OF DEFAULT'' means a condition or event that, after
notice or lapse of  time  or  both, would constitute an Event of Default if
that condition or event were not  cured  or  removed  within the applicable
grace period.

     ``PREFERRED  LIMITED PARTNER INTERESTS'' has the meaning  assigned  to
that term in subsection 7.20C(ii).

     ``PRIME RATE'' means the rate that Bankers announces from time to time
as its prime lending  rate,  as  in effect from time to time or, if Bankers
shall cease to announce such rate,  the  rate  that  is  published  as  the
``Prime  Rate''  in THE WALL STREET JOURNAL (Eastern edition) or other rate
published  in THE WALL  STREET  JOURNAL  (Eastern  edition)  or  any  other
newspaper of  general  circulation  that  shall  have  been approved by the
Borrower and the Agent.  The Prime Rate is a reference rate  and  does  not
necessarily  represent  the  lowest  or  best  rate actually charged to any
customer.  Bankers or any other Lender may make  commercial  loans or other
loans at rates of interest at, above or below the Prime Rate.

     ``PROJECTED  INTEREST  EXPENSE''  means,  with respect to any  Pool  B
Subsidiary  as  of  any  date of determination and for  any  period,  total
interest expense (including  that portion attributable to Capital Leases in
accordance with GAAP and capitalized  interest) reasonably projected by the
Borrower to be incurred on all outstanding and proposed Pool B Indebtedness
of such Pool B Subsidiary, including, without  limitation, all commissions,
discounts  and  other fees and charges and net costs  under  Interest  Rate
Agreements.

     ``PROPERTIES''  means,  collectively,  from  and  after the respective
dates  of  Acquisition,  each  of  the  Pool A  Properties and  the  Pool B
Properties.  Properties do not include Managed Properties.

     ``PROPERTY  AMOUNT''  means,  as  of  any date of  determination  with
respect to any Designated Pool A Property, the following:

          (i)  except  with  respect  to  a  Designated   Pool A   Property
     described in clause (ii) or (iii) below, the lesser of (a) the product
     of  the applicable factor set forth in column (I) below MULTIPLIED  BY
     the Property  EBITDA  for  such Designated Pool A Property and (b) the
     product  of  the applicable factor  set  forth  in  column (II)  below
     MULTIPLIED BY  the  Property  EBITDA-CapEx  for such Designated Pool A
     Property,  in  each case for the 12 most recently  completed  calendar
     months ending not  less than 30 days before such date of determination
     for which the Agent has received the financial statements with respect
     to such Properties required  to  be  delivered  pursuant to subsection
     6.1(i):

<TABLE>
<CAPTION>
                                                (I)                        (II)
              PERIOD                       EBITDA FACTOR               EBITDA-CAP EX
                                                                          FACTOR
<S>                                 <C>                        <C>
from and including the Closing Date            4.25                        5.00
to but excluding the first
Anniversary
from and including the first                   4.00                        4.75
Anniversary to but excluding the
second Anniversary
from and including the second                  3.75                        4.50
Anniversary to but excluding the
third Anniversary
</TABLE>

     ;  PROVIDED  that such Property Amount shall not be  greater  than  an
     amount equal to 55% of the Appraised Value thereof; or

         (ii)  with  respect to each of not more than two Designated Pool A
     Properties, as designated  from  time  to  time  by  the Borrower in a
     writing  delivered  to the Agent, with respect to which  a  Renovation
     shall have commenced and before the end of 12 complete calendar months
     after completion of the Renovation, an amount equal to 60% of the most
     recently Appraised Value,  on  an ``as completed'' basis, on or before
     the applicable date of determination; or

        (iii)  with respect to the Atlanta  Airport  Property, the least of
     (a) the applicable amount calculated pursuant to clause (i) above, (b)
     an amount equal to 55% of the Appraised Value of  the  Atlanta Airport
     Property  and  (c) the aggregate outstanding principal amount  of  the
     Atlanta Note as of the applicable date of determination.

     ``PROPERTY EBITDA''  means,  with  respect  to  any  Property, for any
period  and as of any date of determination and calculated on  the  accrual
basis of  accounting,  whether  a  positive  or negative number, the amount
equal to the remainder of the following:

          (i)  all Property Gross Revenues for  such  period  in respect of
     such  Property; PROVIDED that Property Gross Revenues for such  period
     in respect  of  any  Property  shall be included in the calculation of
     Property EBITDA for such period  only to the extent that the Agent and
     Lenders shall have received the financial  statements  for such period
     required  to  be  delivered  on  or  before such date of determination
     pursuant to subsection 2.9 or 6.1(i), as the case may be; MINUS

         (ii)  all Operating Expenses for such  period with respect to such
     Property, without duplication of items excluded from the definition of
     Property Gross Revenues; PROVIDED that (x) Management Fees included in
     the calculation of Property EBITDA for such  period  with  respect  to
     such  Property  shall not be less than 3.0% of Property Gross Revenues
     for such period with  respect  to such Property and (y) the sum of the
     aggregate amount of fees payable pursuant to Franchise Agreements PLUS
     marketing fees and expenses included  in  the  calculation of Property
     EBITDA for such period with respect to such Property shall not be less
     than 8.5% of Property Gross Revenues with respect to such Property;

PROVIDED that:

          (v)Property EBITDA with respect to any Property shall be zero for
     such  period if (1) the Addition Date with respect  to  such  Property
     shall not  have  occurred  on  or before such date of determination or
     (2) such  Property  shall  have been  sold  or  otherwise  permanently
     disposed of on or before such date of determination;

          (w)if the Addition Date  with respect to such Property shall have
     occurred after the Closing Date  and  after  the  commencement of such
     period but before the termination of such period, Property EBITDA with
     respect  to  such  Property  for  such  period  shall  be the  sum  of
     (A) Property EBITDA for the portion of such period commencing  on  the
     first  day  of  such period and ending on the day before such Addition
     Date,  as the same  shall  be  determined  based  upon  the  financial
     statements for such period required by subsection 2.9A to be delivered
     with respect  to such Property and such other information with respect
     thereto that may  be provided by the Loan Parties and their respective
     Subsidiaries,  subject  to  such  adjustments  as  may  be  reasonably
     required by the  Agent  so  that  Property EBITDA with respect to such
     Property shall be calculated in the  same  manner  as  Property EBITDA
     with  respect  to  Properties  owned  by  the  Loan Parties and  their
     respective  Subsidiaries during the entire period,  PLUS  (B) Property
     EBITDA with respect  to  such  Property for the portion of such period
     commencing on such Addition Date  and  ending  on the last day of such
     period, based upon the financial statements for  such  period required
     to  be delivered on or before such date of determination  pursuant  to
     subsection 6.1(i);

          (x)if  such  date  of  determination  shall  occur during a Major
     Renovation/Restoration Removal Period with respect  to  such  Property
     and the Property EBITDA with respect to such Property for such  period
     is  a  positive  number,  then  (1) for  purposes  of  calculating the
     Property Amount with respect to such Property (if such Property  is  a
     Pool A  Property)  as  of  such date of determination, Property EBITDA
     with respect to such Property  for  such  period  shall  be  zero  and
     (2) for  purposes  of  calculating  any amount pursuant to subsections
     7.6C, 7.6D, 7.6E and 7.6F as of such  date  of determination, Property
     EBITDA with respect to such Property for such period shall be equal to
     the product of (1) the applicable factor set  forth  below  as of such
     date  of  determination,  as determined by reference to the percentage
     amount of the rooms ``available  for sale'' at such Property that have
     been, are scheduled to be, or could  reasonably  be  expected  to  be,
     ``rooms  out-of-order'',  as determined in accordance with the Uniform
     System,  during  such  Major  Renovation/Restoration  Removal  Period,
     multiplied by (2) the amount of  Property  EBITDA with respect to such
     Property for such period as of such date of  determination  if  effect
     were not given to this clause (x):

<TABLE>
<CAPTION>
 PERCENTAGE                          FACTOR
<S>                         <C>
      50.00% - 74.99%                0.33
     75.00% - 100.00%                 0.00.
</TABLE>

     ``PROPERTY EBITDA-CAPEX'' means, with respect to any Property, for any
period  and  as  of  any  date  of  determination, the Property EBITDA with
respect to such Property MINUS Capital  Expenditures  with  respect to such
Property.

     ``PROPERTY  GROSS  REVENUE''  means,  for  any  period,  all  Receipts
resulting   from   the  operation  of  such  Property,  including,  without
limitation, Rents or  other  payments  from  guests and customers, Tenants,
licensees  and concessionaires and business interruption  and  rental  loss
insurance  payments;   PROVIDED   that  Property  Gross  Revenue  shall  be
determined net of allowances in accordance  with  the  Uniform  System  and
shall  exclude  (i) excise,  sales,  use,  occupancy  and similar taxes and
charges  collected  from guests or customers and remitted  to  Governmental
Authorities, (ii) gratuities  collected  for  employees  of  such Property,
(iii) security deposits and other advance deposits, until and  unless  same
are  forfeited  to  any Loan Party or Subsidiary thereof or applied for the
purpose  for which collected,  (iv) federal,  state  or  municipal  excise,
sales, use  or  similar  taxes collected directly from patrons or guests or
included as part of the sales  price of any goods or services, (v) interest
income on amounts deposited in such  Property's  bank accounts in excess of
amounts so deposited in the ordinary course of business  and  in accordance
with past practices, (vi) rebates, refunds or discounts (including, without
limitation,  free  or  discounted  accommodations)  and (vii) Extraordinary
Receipts.

     ``PROPERTY INFORMATION'' means, with respect to any Acquisition of any
Additional Pool A Property pursuant to subsection 2.9A, any Pool B Property
pursuant  to  subsection  2.9B or any MBL Property pursuant  to  subsection
2.9E, the following information:

          (i)  financial statements  in  respect  of  such Property for the
     most  recently  completed three calendar years and for  the  completed
     calendar months after  the  most  recently completed calendar year, in
     each case, to the extent such financial  statements  exist  and can be
     readily obtained by any Loan Party or any of its Subsidiaries;

         (ii)  copies of all other consolidated balance sheets and  related
     statements of operations and statements of cash flows of such Property
     that  are to be delivered to any Loan Party or any of its Subsidiaries
     in connection with such Acquisition;

        (iii)  to  the  extent  any  Renovation  is  then proposed for such
     Property, (a) a preliminary project plan and a project budget for such
     Property which, as to a Pool A Property, shall be satisfactory in form
     and  substance  to the Agent in its sole discretion  and  (b)  if  the
     approval by the Agent  of such Renovation pursuant to subsection 6.12A
     with respect thereto shall  be  sought  by  the Borrower in connection
     with  the  approval  by  the  Agent  of such Acquisition  and  Lenders
     pursuant to subsection 2.9A, the materials  required  to  be delivered
     to, and approved by, the Agent pursuant to subsection 6.12A;

         (iv)  (a) a comprehensive environmental audit with respect to such
     Property  dated  not  more  than six months prior to the closing  date
     (which shall include a Phase I  environmental  audit  and,  either  if
     recommended  or  suggested by an Approved Environmental Consultant or,
     if not so recommended  or suggested, if determined by the Agent in its
     sole discretion to be necessary or desirable after considering factors
     reasonably related to such  determination,  a  Phase II  environmental
     audit), satisfactory in form and substance to the Agent, conducted and
     certified by an Approved Environmental Consultant (the Borrower  shall
     certify  as  of  the  closing date of such Acquisition that, as to any
     environmental audit delivered  by  the  Borrower prior to such closing
     date, to the Borrower's knowledge, the information  contained  in such
     audit remains true, correct and complete), (b) a reliance letter  from
     such  Approved  Environmental  Consultant  with  respect  to each such
     environmental audit addressed to the Agent and Lenders, together  with
     a   copy  of  such  Approved  Environmental  Consultant's  errors  and
     omissions  policy,  which  reliance  letter  and such insurance policy
     shall be satisfactory in form and substance to the Agent, (c) evidence
     reasonably satisfactory to the Agent that all  required approvals from
     all Governmental Authorities having jurisdiction  with  respect to the
     environmental condition of such Property, if any, have been  obtained,
     and    (d) such   other   environmental   reports,   inspections   and
     investigations as the Agent shall in its sole discretion require after
     considering   factors   reasonably   related  to  such  determination,
     prepared, in each instance, by an Approved  Environmental  Consultant,
     which audits, approvals, reports, inspections and investigations shall
     be  satisfactory  in  form  and  substance  to  the Agent, in its sole
     discretion;

          (v)  (a) a  written  Engineering  Report  with  respect  to  such
     Property dated not more than 90 days prior to the closing date of such
     Acquisition  that shall be prepared by an Engineer acceptable  to  the
     Agent, which Engineering  Report,  in the case of an Additional Pool A
     Property, shall be satisfactory in form  and  substance  to the Agent,
     and (b) a reliance letter from such Engineer with respect to each such
     Engineering  Report  addressed to the Agent and Lenders, which  letter
     shall be in form and substance reasonably satisfactory to the Agent;

         (vi)  to the extent  then  available,  copies  (if  available)  or
     drafts  of  the  related Acquisition Agreements, Pool A Ground Leases,
     Pool B Ground Leases, all other purchase agreements, letters of intent
     or other related agreements  entered  into by any Loan Party or any of
     its  Subsidiaries  in  connection  with  such  Acquisition  (it  being
     understood and agreed that, to the extent  such  agreements or letters
     of  intent  have not been entered into at such time,  copies  of  such
     agreements  and  letters  of  intent  shall  be  delivered  reasonably
     promptly after the execution thereof);

        (vii)  a market  study  with  respect to such Property as of a date
     not earlier than 90 days before the  proposed  date of closing of such
     Acquisition and copies of all other appraisals and market studies with
     respect  to  such  Property to the extent such appraisals  and  market
     studies exist and can  be readily obtained by any Loan Party or any of
     its Subsidiaries; and

       (viii)  any other information  relating  to such Acquisition or such
     Property reasonably requested by the Agent or any Lender.

     ``PROPERTY  SERVICING  AGREEMENTS''  means,  collectively,  the  hotel
management agreements entered into between the Borrower,  on  the one part,
and a Subsidiary of the Borrower that owns a fee or leasehold interest in a
Property,  on  the  other part, substantially in the form approved  by  the
Agent on or before the  Closing  Date  or  in  such  other  form  as may be
reasonably acceptable to the Agent, as any such Servicing Agreement  may be
amended, restated, supplemented or otherwise modified from time to time  in
accordance with the terms thereof and hereof.

     ``PURCHASE PRICE'' has the meaning assigned to that term in subsection
2.1A.

     ``PRO  RATA SHARE'' means, with respect to each Lender, the percentage
obtained by dividing  (i)  the  sum  of the Loan Exposure of that Lender by
(ii)  the  sum  of the aggregate Loan Exposure  of  all  Lenders,  as  such
percentage may be  adjusted by assignments permitted pursuant to subsection
9.1.  The initial Pro  Rata  Share of each Lender is set forth opposite the
name of that Lender in SCHEDULE 2.1B annexed hereto.

     ``QUALIFIED CAPITAL STOCK''  means,  with  respect  to any Person, any
series or class of Capital Stock of that Person which may  not  be required
to be redeemed or repurchased, in whole or in part, by that Person  or  any
of  its  Subsidiaries,  in  whole  or  in part, at the option of the holder
thereof,  on  or  prior to the Maturity Date,  or  not  be  convertible  or
exchangeable into or  exercisable  for Capital Stock of CapStar that is not
Qualified Capital Stock on or prior  to  the  date that is one year and one
day after the Maturity Date; PROVIDED that Capital  Stock will be deemed to
be Qualified Capital Stock if it may only be so redeemed  or  put solely in
consideration of Qualified Capital Stock.

     ``RECEIPTS'' means, collectively, all cash, Cash Equivalents,  checks,
notes,  drafts  and  any items of payment or collection received, by or  on
behalf of CapStar or any of its Subsidiaries, or by any officers, employees
or agents of CapStar or any of its Subsidiaries or other Persons acting for
or in concert with CapStar  or  such  Subsidiary  to  make  collections  on
CapStar's  or  such  Subsidiary's  behalf  in connection with or in any way
relating to CapStar or such Subsidiary or the  operation  of  CapStar's  or
such  Subsidiary's  business,  including,  without limitation, any proceeds
received from or pursuant to (i) any sales of,  or  loans against, accounts
of  CapStar or any of its Subsidiaries (other than the  Loans  pursuant  to
this   Agreement),  (ii) any  disposition  of  assets  (including,  without
limitation,  any  disposition of assets permitted hereunder or consented to
by  the  Agent,  but  excluding   amounts   applied  to  the  repayment  of
indebtedness or other obligations secured by  a  Lien on the assets subject
to such disposition) or issuance or sale of equity Securities by CapStar or
any of its Subsidiaries, (iii) the incurrence of Indebtedness by CapStar or
any of its Subsidiaries and the issuance and sale  by CapStar or any of its
Subsidiaries  of  equity or debt Securities, in each case  other  than  the
Obligations  and  other   Indebtedness   permitted   by   this   Agreement,
(iv) insurance policies (other than liability insurance payable directly or
indirectly  to  a  third  party)  maintained  by  CapStar  or  any  of  its
Subsidiaries, whether or not the Agent is an additional insured or named as
loss  payee  thereunder,  (v) the  successful  prosecution  (including  any
settlement)  of any claims, actions or other litigation or proceeding by or
on  behalf  of  or  against  CapStar  or  any  of  its  Subsidiaries,  (vi)
Investments in, or  equity and debt Securities issued by, Joint Ventures or
other  Persons and (vii) the  Management  Agreements  (other  than  amounts
received  by  CapStar  or any of its Subsidiaries in respect of the Managed
Properties on behalf of,  or  as  agent  for, the parties to the Management
Agreements other than CapStar and its Subsidiaries);  it  being  understood
and  agreed that nothing contained in this definition shall in any  respect
be deemed  to permit any transactions by CapStar or any of its Subsidiaries
otherwise restricted or prohibited by this Agreement.

     ``REGISTER'' has the meaning assigned to that term in subsection 2.1E.

     ``REGULATION D''  means  Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.

     ``REIMBURSEMENT DATE'' has  the  meaning  assigned  to  that  term  in
subsection 3.3B.

     ``RELATED  DOCUMENTS''  means,  collectively, the Original Acquisition
Documents, the Acquisition Documents,  the  MBL  Acquisition Documents, the
Management Agreements, the Franchise Agreements, the IP License Agreements,
the Ground Leases, the Material Leases, the Pool B  Documents,  the  Equity
Offering Documents and the Formation Documents.
     ``RELEASE''  means  any  satisfaction, release, assignment instrument,
deed  of  reconveyance  or  similar  instrument  or  instruments  (each  in
recordable form but without any  representation or warranty of the Agent or
the Lenders) necessary and sufficient  to  release  any Collateral from the
Lien of all applicable Security Documents.

     ``RELEASE  DATE''  means  the date of a release of  the  Lien  of  the
Security Documents on any Property pursuant to subsection 2.10.

     ``RELEASE PRICE'' means, as  calculated  as  of  any Release Date, the
following:

          (i)  with respect to any Pool A Property, the  amount that is the
     greatest of the following:

               (a)  the  amount equal to 125% of the Property  Amount  with
          respect to such  Pool A  Property; PROVIDED that, with respect to
          the Specified Release Properties,  such  amount  shall be 100% of
          the  Property  Amount  with  respect  to  such Specified  Release
          Property;

               (b)  in  the event of a sale or other permanent  disposition
          of such Pool A Property, the amount equal to 75% of the Net Sales
          Price for such  Pool A  Property;  PROVIDED that, with respect to
          the Specified Release Properties, such amount shall be zero;

               (c)  the amount necessary to ensure  both that (1) the Total
          Utilization (excluding the aggregate principal  amount  of Pool B
          Indebtedness) shall not exceed the Borrowing Base then in  effect
          and  (2)  the  Total  Utilization  shall not exceed the aggregate
          amount  of Commitments then in effect,  after  giving  effect  to
          (x) any reduction  in  the  Borrowing  Base  required pursuant to
          subsections 2.4B(iii), 2.10 and 7.15B and (y) each  other payment
          made  as  of the Release Date pursuant to any other provision  of
          this definition of Release Price; and

               (d)  in  the  event  of a casualty or Taking with respect to
          such  Pool A  Property, the Insurance  Proceeds  or  Condemnation
          Proceeds, as the case may be, resulting therefrom; and

         (ii)  with respect  to  any  leasehold or real property Collateral
     not subject to clause (i) above, the amount that is the greater of the
     following:

               (a)  the amount necessary  to ensure both that (1) the Total
          Utilization   (excluding   the   aggregate   amount   of   Pool B
          Indebtedness) shall not exceed the  Borrowing  Base in effect and
          (2)  the Total Utilization shall not exceed the aggregate  amount
          of Commitments  then  in  effect,  after giving effect to (x) any
          reduction in the Borrowing Base required  pursuant  to subsection
          2.4(B)(iii)  and  (y) each  other payment made as of the  Release
          Date  pursuant  to  any other provision  of  this  definition  of
          Release Price; and

               (b)  in the event  of  a sale or other permanent disposition
          of such item of Collateral, the  amount  equal to 100% of the Net
          Sales Price for such item or, if the release  of the Lien on such
          item of Collateral shall not be effected in connection  with  the
          sale  or  other  permanent  disposition of such item, 100% of the
          aggregate amount of termination  fees  and  other amounts paid to
          the Loan Parties and their respective Subsidiaries  in connection
          therewith.

     ``REMOVED  POOL A PROPERTIES'' means, as of any date of determination,
all Pool A Properties  that  have  been removed pursuant to subsection 2.9D
hereof.

     ``RENOVATION'' means the expansion,  rebuilding,  repair, restoration,
refurbishment, fixturing and equipping of the Improvements at a Property or
a  Managed  Property.   The  term  ``Renovate''  used  as  a  verb   has  a
corresponding meaning.

     ``RENTS''  means, collectively, all rents, issues, profits, royalties,
receipts,  revenues,  accounts  receivable,  security  deposits  and  other
deposits (subject  to  the prior right of Tenants making such deposits) and
income, including room receipts,  rack  charges,  vending machine receipts,
food  and beverage receipts, concession fees and charges,  public  assembly
room receipts,  fixed,  additional and percentage rents, occupancy charges,
operating expense reimbursements,  reimbursements  for  increases in taxes,
sums  paid  by  Tenants  to  any  Loan Party or any of its Subsidiaries  to
reimburse such Loan Party or such Subsidiary for amounts originally paid or
to be paid by such Loan Party or such  Subsidiary  or  such Loan Party's or
such Subsidiary's agents or Affiliates for which such Tenants  were liable,
as,  for  example, tenant improvements costs in excess of any work  letter,
lease takeover  costs,  moving expenses and tax and operating expense pass-
throughs for which a Tenant  is solely liable, parking, valet, maintenance,
common area, tax, insurance, utility and service charges and contributions,
proceeds of sale of electricity,  gas,  heating, air-conditioning and other
utilities and services, deficiency rents  and liquidated damages, and other
benefits.

     ``RESTORATION'' means the repair, restoration  (including demolition),
replacement  and  rebuilding of all or any portion of a  Property  (or  the
Improvements thereof)  following  the  destruction,  damage, loss or Taking
thereof.  The term ``Restore'' used as a verb has a corresponding meaning.

     ``RESTRICTED  JUNIOR  PAYMENT''  means  (i) any  dividend   or   other
distribution, direct or indirect, on account of any shares of any class  of
stock  or  other  equity  Security of any Loan Party or any Subsidiary of a
Loan Party now or hereafter  outstanding, except a dividend or distribution
payable to the Borrower or any  of  its  Wholly Owned Subsidiaries that are
Loan Parties or payable solely in shares of  that  class  of  stock  to the
holders  of  that  class,  (ii) any redemption, retirement, sinking fund or
similar  payment,  purchase or  other  acquisition  for  value,  direct  or
indirect,  of  any shares  of  any  equity  Securities,  now  or  hereafter
outstanding, of  CapStar  or  any  of  its Subsidiaries that are not Wholly
Owned Subsidiaries, (iii) any payment made  to  retire,  or  to  obtain the
surrender of, any outstanding warrants, options or other rights to  acquire
shares  of  any  now  or  hereafter  outstanding,  of CapStar or any of its
Subsidiaries that are not Wholly Owned Subsidiaries and (iv) any payment or
prepayment of principal of, premium, if any, or interest on, or redemption,
purchase,   retirement,  defeasance  (including  in  substance   or   legal
defeasance),   sinking  fund  or  similar  payment  with  respect  to,  any
Indebtedness of CapStar or any of its Subsidiaries.

     ``SCHEDULED PRINCIPAL PAYMENT DATE'' means (i) if the Maturity Date is
extended beyond  the third Anniversary pursuant to subsection 2.1F(i), each
of the third, sixth and ninth Payment Dates after the third Anniversary and
(ii) in addition to  the  dates set forth in clause (i) of this definition,
if the Maturity Date is extended  beyond the fourth Anniversary pursuant to
subsection 2.1F(ii), each of the third, sixth and ninth Payment Dates after
the fourth Anniversary.

     ``SECURITIES''  means  any  stock,   shares,   partnership  interests,
interests  in  limited  liability  companies,  voting  trust  certificates,
certificates  of interest or participation in any profit-sharing  agreement
or arrangement,  options,  warrants,  bonds,  debentures,  notes  or  other
evidences  of indebtedness, secured or unsecured, convertible, subordinated
or  otherwise,   or   in   general   any   instruments  commonly  known  as
``securities'' or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase  or  acquisition  of, or
any right to subscribe to, purchase or acquire, any of the foregoing.

     ``SECURITIES  ACT''  means the Securities Act of 1933, as amended from
time to time, and any successor statute.

     ``SECURITY  AGREEMENT''   means  the  Security  and  Pledge  Agreement
executed and delivered by each Loan  Party  and  the Agent on or before the
Closing Date pursuant to subsection 4.1E(i), and thereafter  by  each other
Subsidiary  of  CapStar that becomes a party thereto, in substantially  the
form of EXHIBIT IX   annexed hereto, pursuant to which such Loan Party will
pledge and grant a security interest in the Collateral described therein to
Agent for the benefit  of  the  Agent and the Lenders, as such Security and
Pledge  Agreement  may  be amended,  restated,  supplemented  or  otherwise
modified from time to time in accordance with the terms thereof and hereof.

     ``SECURITY  DOCUMENTS''   means,   collectively,  the  Mortgages,  the
Assignments  of  Rents and Leases, the Security  Agreement,  the  Trademark
Agreement, the Cash  Management  Letters, the Omnibus Management and Liquor
License  Agreement,  the  Tenant  Subordination   Agreements,  the  Atlanta
Documents, the Atlanta Collateral Assignment, and all deeds of trust, deeds
to   secure  debt,  mortgages,  security  agreements,  pledge   agreements,
assignments  and  all  other  instruments  or  documents  (including  UCC-1
financing  statements,  fixture filings, amendments of financing statements
or similar documents required  or advisable in order to perfect or maintain
the  Liens  created by the Security  Documents)  delivered  by  any  Person
pursuant to this Agreement or any of the other Loan Documents, whether such
delivery is prior  to,  contemporaneous  with  or  after  delivery  of this
Agreement, in order to grant to the Agent Liens in real, personal or  mixed
property  of  that  Person,  and  to  maintain  such  Liens  as each of the
foregoing may be amended, restated, consolidated, supplemented or otherwise
modified from time to time in accordance with the terms thereof and hereof.
Security Documents do not include this Agreement or the Notes.

     ``SERVICING  AGREEMENTS'' means, collectively, the Property  Servicing
Agreements, the Liquor  Operations  Servicing  Agreements  and  the  Liquor
Leases  listed  on  SCHEDULE  5.4E  annexed hereto, as such Schedule may be
revised or supplemented from time to  time pursuant to subsection 2.9, 2.10
or 7.17, as any such agreement may be amended,  restated,  supplemented  or
otherwise  modified  from time to time in accordance with the terms thereof
and hereof.

     ``SPECIFIED RELEASE  PROPERTIES'' means three Properties designated by
the Borrower at the time such  Properties  are Released; PROVIDED that each
Property so designated shall either (i) have been a Property on the date of
this Agreement or (ii) be an MBL Property.

     ``STANDBY LETTER OF CREDIT'' means any  standby  letter  of  credit or
similar  instrument  issued  for  the  purpose  of supporting any corporate
purposes, including (i) workers' compensation liabilities of CapStar or any
of  its  Subsidiaries,  (ii) the  obligations of third  party  insurers  of
CapStar or any of its Subsidiaries  arising  by  virtue  of the laws of any
jurisdiction   requiring   third  party  insurers,  and  (iii) performance,
payment,  deposit  or  surety  obligations   of   CapStar  or  any  of  its
Subsidiaries,  in  any  case  if  required by law or governmental  rule  or
regulation  or in accordance with custom  and  practice  in  the  industry;
PROVIDED that  Standby  Letters of Credit may not be issued for the purpose
of  supporting  (a) trade payables  or  (b) any  Indebtedness  constituting
``antecedent debt''  (as that term is used in Section 547 of the Bankruptcy
Code).

     ``SUBORDINATED INDEBTEDNESS''  has  the meaning assigned in subsection
7.1(vi).

     ``SUBSIDIARY'' means, with respect to  any  Person,  any  corporation,
partnership, limited liability company, association, joint venture or other
business  entity  of  which  either (i) the Person is a general partner  or
member of a limited liability  company  or other entity having the right to
direct or manage the business and affairs  of such entity or (ii) more than
50%  of  the  total  voting  power of shares of stock  or  other  ownership
interests entitled (without regard to the occurrence of any contingency) to
vote in the election of the Person or Persons (whether directors, managers,
trustees or other Persons performing similar functions) having the power to
direct or cause the direction  of the management and policies thereof is at
the time owned or controlled, directly or indirectly, by that Person or one
or more of the other Subsidiaries of that Person or a combination thereof.

     ``SURVEY'' means, with respect  to  any Property, a current survey map
prepared by a surveyor licensed in the state  in  which  such  Property  is
located,  reasonably  acceptable  to the Agent, which shall (i) contain the
legal description of such Property,  (ii) conform, and be certified by such
surveyor to the Agent and the Lenders  and the Title Company as conforming,
to  the  Minimum  Standard Detail Requirements  for  ALTA/ACSM  Land  Title
Surveys for urban survey  class as adopted by ALTA and American Congress on
Surveying  &  Mapping  (1992  version),  and  (iii)  show,  to  the  extent
practicable,   all   matters   described   in   ``Table A/Optional   Survey
Responsibilities  and Specifications''  in  such  Minimum  Standard  Detail
Requirements; PROVIDED,  however,  that  the  survey  need  not satisfy the
requirements  of the preceding clauses (ii) and (iii) if the Title  Company
has eliminated  the  survey exception from the Title Policies and all other
exceptions to the Title  Policies  based upon such survey are acceptable to
the  Agent  in  its  sole discretion.  Any  such  survey  shall  contain  a
certification by such surveyor to the Agent and the Lenders stating whether
the  Property is located  in  an  area  having  special  flood  hazards  as
identified by the Federal Emergency Management Agency.

     ``S&P''  means  Standard  &  Poor's,  a  division  of  The McGraw-Hill
Companies, Inc., or any successor to the business thereof.

     ``TAKING''  means the taking or appropriation (including  by  deed  in
lieu of condemnation  or  by  voluntary  sale  or  transfer under threat of
condemnation or while legal proceedings for condemnation  are  pending)  of
any Property, or any part thereof or interest therein, for public or quasi-
public  use  under  the  power  of  eminent domain, by reason of any public
improvement or condemnation proceeding,  or  in  any  other  manner  or any
damage  or  injury  or  diminution  in  value through condemnation, inverse
condemnation or other exercise of the power  of  eminent  domain.  The term
``Taken'' used as a verb has a correlative meaning.

     ``TAX''  or ``TAXES'' means any present or future tax,  levy,  impost,
duty, charge, fee,  deduction  or  withholding  of  any nature and whatever
called, on whomsoever and wherever imposed, levied, collected,  withheld or
assessed by a Governmental Authority; PROVIDED, however, that ``TAX  ON THE
OVERALL NET INCOME'' of a Person shall be construed as a reference to a tax
imposed  by  the  jurisdiction  in  which  that  Person's  principal office
(and/or,  in the case of any Lender, its lending office) is located  or  in
which that  Person is deemed to be doing business on all or part of the net
income, profits or gains of that Person (whether worldwide, or only insofar
as such income, profits or gains are considered to arise in or to relate to
a particular jurisdiction, or otherwise).

     ``TENANT''  means  any  Person  liable by contract or otherwise to pay
rent or a percentage of income, revenue or profits pursuant to a Lease, and
includes a tenant, subtenant, lessee and sublessee.

     ``TENANT  SUBORDINATION  AGREEMENT''  means  any  Subordination,  Non-
Disturbance and Attornment Agreement executed and acknowledged by a Tenant,
the  Borrower  or  any other Loan  Party  and  the  Agent,  and  reasonably
satisfactory in form and substance to the Agent, as each such agreement may
be amended, restated,  supplemented or otherwise modified from time to time
in accordance with the terms thereof and hereof.

     ``TITLE COMPANY'' means  (i) as of any date on or prior to the Closing
Date, Chicago Title Insurance Company  and  (ii)  as  of any date after the
Closing Date, such other title company as may be selected  by  the Borrower
and approved by the Agent in its reasonable discretion.

     ``TITLE  POLICIES'' means, with respect to the Pool A Properties,  the
paid mortgagee  policies of title insurance in the form of a 1970 ALTA loan
policy (or other  form of loan policy available in the applicable state and
acceptable to the Agent) and issued by the Title Company.

     ``TOTAL PROPERTY  EBITDA'' means, for any period and as of any date of
determination, the aggregate  Property  EBITDA for such period with respect
to all Properties.

     ``TOTAL UTILIZATION'' means, as of any  date of determination, the sum
of the following, without duplication:

          (i)  the Total Utilization of Commitments; PLUS
         (ii)  the aggregate principal amount of Pool B Indebtedness; PLUS

        (iii)  the aggregate amount of reserves  against  Total Utilization
     established  by  the  Borrower  in  accordance with the provisions  of
     subsections 2.9F and 4.1T in respect  of required deferred maintenance
     deposits,  as the same may be reduced pursuant  to  subsection  6.16B;
     PLUS

         (iv)  the  aggregate  amount of reserves against Total Utilization
     established by the Borrower  in  accordance  with  the  provisions  of
     subsection  6.16(i)  in  respect of required capital reserve deposits;
     PLUS

          (v)  the aggregate costs  for  the  Renovations  of  any Property
     pursuant  to  subsection  7.16,  in  each  case  as  specified  in the
     Renovation budget therefor most recently delivered to the Agent,  with
     respect  to which the Borrower has not delivered to the Agent evidence
     of payment reasonably satisfactory to the Agent; PLUS

         (vi)  during  any  period  in  which  holders of Preferred Limited
     Partner Interests are entitled to exercise  any  right  of conversion,
     exercise  or  redemption  for  Cash,  the  maximum aggregate potential
     liability  of  the  Loan  Parties  and  their Subsidiaries  upon  such
     conversion, exercise or redemption.

     ``TOTAL  UTILIZATION  OF  COMMITMENTS''  means,  as  of  any  date  of
determination,  the  sum  of  (i) the  aggregate principal  amount  of  all
outstanding Loans (other than Loans made for the purpose of reimbursing the
applicable Issuing Lender for any amount  drawn  under any Letter of Credit
but not yet so applied) PLUS (ii) the Letter of Credit Usage.

     ``TRADEMARK  AGREEMENT''  means  the Trademark Security  Agreement  by
CapStar, the Borrower and each of the other  Loan Parties party thereto, in
favor  of  the  Agent  for the benefit of the Agent  and  the  Lenders,  in
substantially the form of  EXHIBIT  X annexed hereto, as such agreement may
be amended, restated, supplemented or  otherwise modified from time to time
in accordance with the terms thereof and hereof.

     ``TRANSFER''  means  any  conveyance,  assignment,  sale,  mortgaging,
encumbrance, pledging, hypothecation,  granting  of a security interest in,
granting of options with respect to or other disposition  of  (directly  or
indirectly, voluntarily or involuntarily, by operation of law or otherwise,
and  whether  or  not for consideration or of record) all or any portion of
any legal or beneficial  interest (i) in all or any portion of any Property
or (ii) in any other assets of any Loan Party or any of its Subsidiaries.

     ``UNIFORM SYSTEM'' means  the  Uniform  System of Accounts for Hotels,
8th Revised Edition, 1986, as published by the  Hotel  Association  of  New
York City, as the same may be further revised from time to time.

     ``UNITED  STATES OF AMERICA'' means the 50 states of the United States
of  America  and  Washington,   D.C.,  but  excluding  any  territories  or
possessions thereof other than the Commonwealth of Puerto Rico.
     ``VIRGINIA DOCUMENTS'' has the  meaning  assigned  to that term in the
recitals to this Agreement.

     ``VIRGINIA  LOAN''  has  the  meaning  assigned  to that term  in  the
recitals to this Agreement.

     ``VIRGINIA  NOTE''  has  the  meaning  assigned to that  term  in  the
recitals to this Agreement.

     ``VIRGINIA PARKING SUB'' means Ballston Parking Associates, a Virginia
general partnership.

     ``VIRGINIA SUB'' means EquiStar Virginia  Company,  L.L.C., a Delaware
limited liability company.

     ``WHOLLY OWNED'' means, with respect to any Subsidiary  of any Person,
a  Subsidiary all of the outstanding equity Securities of which  are  owned
directly or indirectly by such Person.

     ``WORK'' has the meaning assigned to that term in subsection 6.11F.

1.2  ACCOUNTING  TERMS;  UTILIZATION  OF  GAAP FOR PURPOSES OF CALCULATIONS
     UNDER AGREEMENT; PRO FORMA.

     Except  as  otherwise  expressly  provided   in  this  Agreement,  all
accounting  terms  not  otherwise defined herein shall  have  the  meanings
assigned to them in conformity  with  GAAP.  Financial statements and other
information required to be delivered by  the  Borrower  to  the  Agent  for
distribution to the Lenders pursuant to subsection 6.1 shall be prepared in
accordance  with GAAP as in effect at the time of such preparation.  Except
as otherwise expressly provided herein, (i) calculations in connection with
the definitions,  covenants  and  other  provisions of this Agreement shall
utilize accounting principles and policies in conformity with those used to
prepare  the financial statements referred  to  in  subsection 5.3A(i)  and
(ii) calculations  made in connection with the calculation of the Borrowing
Base shall utilize accounting  principles  and  policies in conformity with
those  used  in  connection with the Borrowing Base  Certificate  delivered
pursuant to subsection 4.1C(iv).  For purposes of calculating the Borrowing
Base  and any amount  pursuant  to  subsection  7.6,  as  of  any  date  of
determination  and  for  any period, pro forma effect shall be given to the
consummation of the Formation  and  the Equity Offering and the application
of  all  proceeds  therefrom,  as  if such  transactions  shall  have  been
consummated on the first day of such period.

1.3  REFERENCES TO ARTICLES, SECTIONS, EXHIBITS, SCHEDULES AND ATTACHMENTS.

     All references appearing in a Loan  Document  to  Articles,  Sections,
subsections,  clauses,  Recitals,  Exhibits,  Schedules or Attachments  are
references  to the Articles, Sections, subsections,  clauses  and  Recitals
thereof and to  the Exhibits, Schedules or Attachments annexed to such Loan
Document unless expressly  otherwise designated in such Loan Document.  All
references  appearing  in  a  Loan  Document  to  Exhibits,  Schedules  and
Attachments are references to such  documents  as initially annexed to such
Loan Document or as supplemented or revised in accordance with the terms of
this Agreement or such other Loan Document.
1.4  CAPTIONS.

     All  captions  to any Article, Section, subsection,  clause,  Recital,
Exhibit, Schedule or Attachment in a Loan Document are used for convenience
and reference only and  in  no  way  define, limit or describe the scope or
intent of, or in any way affect, such Loan Document.

1.5  DRAFTER.

     No inference against or in favor  of  any  party  to any Loan Document
shall be drawn from the fact that such party or its counsel has drafted any
portion of any Loan Document.

1.6  REFERENCES TO PERSONS INCLUDE PERMITTED SUCCESSORS AND ASSIGNS.

     Except  as otherwise specified in a Loan Document, all  references  in
such Loan Document  to  any  Person,  other than the Borrower or any of its
Affiliates, shall be deemed to include  the  successors and assigns of such
Person.

1.7  REFERENCES TO APPLICABLE LAW AND CONTRACTS.

     Except as otherwise specified in a Loan Document,  all  references  in
such  Loan Document to any Applicable Law or contracts specifically defined
or referred  to  therein, shall be deemed references to such Applicable Law
or contracts as may  be  amended,  restated,  supplemented, consolidated or
otherwise modified from time to time, or, in the case of any such contract,
as the terms thereof may be waived or modified,  but  only  in  the case of
each  such  amendment, waiver or modification of a contract, to the  extent
permitted by, and effected in accordance with, the terms thereof and hereof
and only to the extent such amendment, waiver or modification of a contract
is not prohibited by any of the Loan Documents.

1.8  HEREIN.

     The words  ``herein'',  ``hereinabove'',  ``hereinbelow'', ``hereof'',
``hereunder'' and words of similar import, when  used  in  a Loan Document,
shall refer to such Loan Document as a whole.

1.9  INCLUDING WITHOUT LIMITATION.

     The words ``includes'', ``including'' and similar terms  used  in  any
Loan  Document  shall  be  construed  as if followed by the words ``without
limitation''.

1.10 GENDER.

     Whenever  the context so requires,  the  neuter  gender  includes  the
masculine or feminine and the singular number includes the plural, and vice
versa.

1.11 SINGULAR AND PLURAL.

     Any of the  terms  defined  in a Loan Document may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference.

1.12 KNOWLEDGE.

     As used in this Agreement or  in  any other Loan Document, the phrases
``TO  THE  BORROWER'S  ACTUAL  KNOWLEDGE'',   ``TO  THE  KNOWLEDGE  OF  THE
BORROWER''  and  any  variations thereof shall mean,  as  of  any  date  of
determination and after  inquiry  that would be made by a prudent owner and
manager of upscale full service hotels  owning  or managing such hotels for
its own account, the actual knowledge or awareness, as of such date, of the
persons who occupy the offices of Chairman of the  Board,  Chief  Executive
Officer,  President,  Chief  Operating  Officer,  Chief  Financial Officer,
Senior  Executive  Vice President-Finance, Executive Vice President-Finance
and Development, Senior  Vice  President-Operations and such other officers
as shall from time to time perform  the functions that are performed by the
foregoing  officers  as  of  the  date of  this  Agreement.   The  Borrower
represents  and  warrants that the foregoing  Persons  have  executive  and
administrative responsibility  for  the Borrower and its assets and, in the
performance of their duties in the ordinary  course  of  business, and that
one or more of such Persons would customarily have knowledge of the matters
referred to herein.


                             SECTION 2
            AMOUNTS AND TERMS OF COMMITMENTS AND LOANS

2.1  PURCHASE  AND  SALE OF VIRGINIA LOAN; COMMITMENTS; LOANS;  NOTES;  THE
REGISTER.

     A.   PURCHASE AND SALE OF VIRGINIA LOAN.

     Subject to the terms  and conditions of this Agreement and in reliance
upon the representations and  warranties of CapStar and the Borrower herein
set  forth,  CapStar shall sell to  the  Lenders,  and  the  Lenders  shall
purchase from  CapStar,  all right, title and interest of CapStar in and to
the Virginia Loan.

     The purchase price (the  ``PURCHASE  PRICE'')  for  the  Virginia Loan
shall  be  $16,000,000.   CapStar  hereby  directs  the Lenders to pay  the
Purchase Price on the Closing Date by causing an amount  of  same-day funds
equal to the Purchase Price to be credited to the account of the Borrower.

     The obligations of the Lenders to purchase the Virginia Loan  shall be
subject to satisfaction of all of the conditions set forth in Section 4.

     Simultaneously  with  the purchase and sale of the Virginia Loan,  the
Lenders and the Borrower shall, and hereby do, split such indebtedness into
the several Loans of each of  the several Lenders and amend and restate the
Virginia Documents in their entirety  so  that,  from and after the Closing
Date,  all  of  the  agreements,  covenants,  representations,  warranties,
indemnities, rights and obligations of the Loan  Parties  and  the  Lenders
with  respect  to  the Virginia Loan shall be as provided in this Agreement
and the other Loan Documents  and  as  otherwise provided by Applicable Law
with respect to the Loans hereunder.

     B.   COMMITMENTS.

     Subject to the terms and conditions  of this Agreement and in reliance
upon the representations and warranties of  CapStar and the Borrower herein
set forth, each Lender hereby severally agrees,  subject to the limitations
set forth below with respect to the maximum amount of Loans permitted to be
outstanding from time to time, to lend to the Borrower  from  time  to time
during  the  period  from  the  Closing  Date  to  but  excluding the third
Anniversary, an aggregate amount not exceeding such Lender's Pro Rata Share
of  the  aggregate  amount of the Commitments to be used for  the  purposes
identified in subsection 2.5A.   In  addition, each Lender hereby agrees to
maintain as Loans, subject to the provisions  of  subsection 2.4, the Loans
of such Lender outstanding on the third Anniversary  during  the period, if
any, from the third Anniversary to the Maturity Date; PROVIDED that, except
with  respect  to  Loans  made pursuant to subsection 3.3B to reimburse  an
Issuing Lender, no Lender shall  be required to make additional Loans on or
after  the  third  Anniversary.   The  original  amount  of  each  Lender's
Commitment and such Lender's Pro Rata  Share is set forth opposite its name
on SCHEDULE 2.1B annexed hereto and the  aggregate  original  amount of the
Commitments is $225,000,000; PROVIDED, however, that the Commitments of the
Lenders  shall  be  adjusted  to  give  effect  to  any assignments of  the
Commitments pursuant to subsection 9.1; PROVIDED FURTHER, HOWEVER, that the
amount of the Commitments shall be automatically reduced  by  the amount of
any reductions to the Commitments made pursuant to subsection 2.4B(ii).

     Each  Lender's  Commitment shall expire on the Maturity Date  and  all
Loans and all other amounts  owed  hereunder  with respect to the Loans and
the  Commitments shall be paid in full no later  than  the  Maturity  Date;
PROVIDED,  however,  that each Lender's Commitment shall expire immediately
and without further action on October 31, 1996, if the Closing Date has not
occurred on or before that date.

     Anything contained  in this Agreement to the contrary notwithstanding,
the Loans and the Commitments  shall  be subject to the limitation that (i)
the Total Utilization (excluding the aggregate  principal  amount of Pool B
Indebtedness and after giving effect to any concurrent payment of the Loans
made  with  the  proceeds  of  Loans)  shall not exceed the lesser  of  the
Borrowing  Base and the Commitments then  in  effect  and  (ii)  the  Total
Utilization  (after  giving  effect  to any concurrent payment of the Loans
made with the proceeds of Loans) shall  not  exceed the Commitments then in
effect.

     C.   BORROWING MECHANICS.  Loans made on  any Funding Date (other than
Loans made pursuant to subsection 3.3B for the purpose  of  reimbursing any
Issuing Lender for the amount of a drawing under a Letter of  Credit issued
by it) shall be in an aggregate minimum amount of $1,000,000.  The Borrower
shall  be  permitted to borrow Loans pursuant to this subsection 2.1C  only
twice during  any 30 consecutive day period.  Whenever the Borrower desires
that the Lenders  make  Loans,  it  shall  deliver to the Agent a Notice of
Borrowing no later than 10:00 A.M. (New York  time) at least three Business
Days in advance of the proposed Funding Date.

     Each Notice of Borrowing shall contain the  information  specified  in
the  form  attached  hereto  as EXHIBIT II.  If any of the proceeds of such
Loan is to be applied to the Restoration  of  any  Property,  the  Borrower
shall  deliver  all  lien  waivers  and  search reports then required to be
delivered  pursuant to subsection 6.11F concurrently  with  the  Notice  of
Borrowing.

     The Borrower  shall notify the Agent prior to the funding of any Loans
in the event that any  of  the matters to which the Borrower is required to
certify in the applicable Notice of Borrowing is no longer true and correct
as of the applicable Funding  Date,  and  the acceptance by the Borrower of
the  proceeds  of  any Loans shall constitute  a  re-certification  by  the
Borrower, as of the applicable Funding Date, as to the matters to which the
Borrower is required to certify in the applicable Notice of Borrowing.

     Except as otherwise provided in subsections 2.6B and 2.6C, a Notice of
Borrowing for a Eurodollar  Rate Loan shall be irrevocable on and after the
related Interest Rate Determination  Date,  and the Borrower shall be bound
to make a borrowing in accordance therewith.

     D.   DISBURSEMENT OF FUNDS.  All Loans under  this  Agreement shall be
made by the Lenders simultaneously and proportionately to  their respective
Pro  Rata  Shares, it being understood that no Lender shall be  responsible
for any default  by  any  other Lender in that other Lender's obligation to
make a Loan requested hereunder  nor  shall the Commitment of any Lender be
increased or decreased as a result of a default by any other Lender in that
other  Lender's  obligation  to  make a Loan  requested  hereunder.   After
receipt by the Agent of a Notice of  Borrowing  pursuant to subsection 2.1C
(or  telephonic notice in lieu thereof), the Agent  shall  promptly  notify
(and,  if  the  Notice  of Borrowing is received by the Agent by 10:00 A.M.
(New York time) on any day,  in  any  event  by  the  end of such day) each
Lender of the proposed borrowing.  Each Lender shall make the amount of its
Loan available to the Agent, in same day funds, at the  office of the Agent
located  at  One  Bankers Trust Plaza, New York, New York, not  later  than
12:00 Noon (New York time) on the applicable Funding Date in same day funds
in Dollars.  Except  as  provided  in subsection 3.3B with respect to Loans
used to reimburse any Issuing Lender  for  the  amount of a drawing under a
Letter  of  Credit  issued  by  it,  upon satisfaction  or  waiver  of  the
conditions precedent specified in subsections  4.1  (in  the  case of Loans
made  on  the  Closing Date) and 4.2 (in the case of all Loans), the  Agent
shall make the proceeds  of  such  Loans  available  to the Borrower on the
applicable Funding Date by causing an amount of same day funds equal to the
proceeds of all such Loans received by the Agent from  the  Lenders  to  be
transferred to the Operating Account.

     Unless  the  Agent shall have been notified by any Lender prior to the
Funding Date for any  Loans  that  such  Lender  does  not  intend  to make
available  to the Agent the amount of such Lender's Loan requested on  such
Funding Date,  the  Agent  may assume that such Lender has made such amount
available to the Agent on such  Funding Date and the Agent may, in its sole
discretion, but shall not be obligated to, make available to the Borrower a
corresponding amount on such Funding Date.  If such corresponding amount is
not in fact made available to the  Agent by such Lender, the Agent shall be
entitled to recover such corresponding  amount  on  demand from such Lender
together with interest thereon, for each day from such  Funding  Date until
the  date  such amount is paid to the Agent, at the Federal Funds Effective
Rate for three  Business  Days  and  thereafter  at the Base Rate.  If such
Lender does not pay such corresponding amount forthwith  upon  the  Agent's
demand  therefor,  the  Agent  shall  promptly  notify the Borrower and the
Borrower  shall  immediately pay such corresponding  amount  to  the  Agent
together with interest  thereon,  for each day from such Funding Date until
the date such amount is paid to the  Agent,  at the rate payable under this
Agreement for Base Rate Loans.  Nothing in this  subsection 2.1D  shall  be
deemed  to relieve any Lender from its obligation to fulfill its Commitment
hereunder or to prejudice any rights that the Borrower may have against any
Lender as a result of any default by such Lender hereunder.

     E.   THE REGISTER.

          (i)  The  Agent  shall  maintain,  at  its address referred to in
     subsection 9.8,  a  register  for the recordation  of  the  names  and
     addresses of the Lenders and the  Commitment  and Loans of each Lender
     from time to time (the ``REGISTER'').  The Borrower, the Agent and the
     Lenders may treat each Person whose name is recorded  in  the Register
     as  a  Lender  hereunder  for  all  purposes  of this Agreement.   The
     Register  shall  be available for inspection by the  Borrower  or  any
     Lender at any reasonable  time  and  from time to time upon reasonable
     prior notice.

         (ii)  The Agent shall record in the  Register  the  Commitment and
     the  Loans  from  time  to time of each Lender, and each repayment  or
     prepayment in respect of  the  principal  amount  of the Loans of each
     Lender.  Any such recordation shall be conclusive and  binding  on the
     Borrower  and  each  Lender, absent manifest error; PROVIDED, HOWEVER,
     that failure to make any  such  recordation,  or  any  error  in  such
     recordation, shall not affect the Borrower's Obligations in respect of
     the applicable Loans.

        (iii)  Each  Lender shall record on its internal records (including
     any promissory note  described  in  subsection 2.1E(iv)) the amount of
     each Loan made by it and each payment  in  respect  thereof.  Any such
     recordation  shall  be conclusive and binding on the Borrower,  absent
     manifest error; PROVIDED,  HOWEVER,  that  failure  to  make  any such
     recordation,  or  any error in such recordation, shall not affect  the
     Borrower's Obligations  in  respect  of the applicable Loans; PROVIDED
     FURTHER, HOWEVER, that in the event of  any  inconsistency between the
     Register and any Lender's records, the recordations  in  the  Register
     shall govern.

         (iv)  Any  Lender  may,  by  notice to the Agent and the Borrower,
     request that all or part of the principal  amount  of  the  Borrower's
     Loans from such Lender hereunder be evidenced by a Note.  Within three
     Business  Days  of the Borrower's receipt of such notice, the Borrower
     shall execute and deliver to the Agent for delivery to the appropriate
     Lender a Note in the principal amount(s) of such Loans, in the form of
     EXHIBIT I attached  hereto,  payable to the notifying Lender or, if so
     specified in such notice, any Person who is an assignee of such Lender
     pursuant  to  subsection 9.1 hereof.   If  the  foreclosure  or  other
     enforcement of  any  Mortgage  or any other Security Document requires
     the presentation of a Note evidencing  the Obligations secured by such
     Security Document and the Borrower fails  or  refuses to comply with a
     request for such Note, then a copy of this Agreement  may be presented
     in lieu of such a Note.

     F.   EXTENSION OF MATURITY DATE.

          (i)  At  any time prior to the date that is 180 days  before  the
     third Anniversary,  the  Borrower  may deliver a written notice to the
     Agent requesting that the Maturity Date  be  extended  from  the third
     Anniversary   to  the  fourth  Anniversary  and,  if  such  notice  is
     delivered, the  Maturity  Date  shall be so extended provided that the
     following conditions are satisfied:

            (a)     as of the third Anniversary,  no  Event  of  Default or
          Potential  Event of Default shall have occurred and be continuing
          and the Borrower  shall  have  delivered an Officers' Certificate
          certifying thereto;

            (b)     on  or  prior to the third  Anniversary,  the  Borrower
          shall have paid to  the Agent in immediately available funds, for
          distribution to the Lenders  in  accordance  with  their Pro Rata
          Shares,  a  fee  equal  to  .25%  of  the  Total  Utilization  of
          Commitments on the third Anniversary; and

            (c)     after  giving  effect  to  the  proposed extension,  no
          Indebtedness  permitted  pursuant to subsection 7.1(iv),  (v)  or
          (vi) shall mature prior to  the  date  that  is 91 days after the
          Maturity  Date,  as  so extended, except to the extent  expressly
          permitted by the second proviso contained in subsection 7.1(iv).

         (ii)  If  the  Maturity  Date   has   been  extended  pursuant  to
     clause (i)  above, at any time prior to the  date  that  is  180  days
     before the fourth  Anniversary,  the  Borrower  may  deliver a written
     notice to the Agent requesting that the Maturity Date be extended from
     the fourth Anniversary to the fifth Anniversary and, if such notice is
     delivered,  the Maturity Date shall be so extended provided  that  the
     following conditions are satisfied:

            (a)     as  of  the  fourth Anniversary, no Event of Default or
          Potential Event of Default  shall have occurred and be continuing
          and the Borrower shall have delivered  an  Officers'  Certificate
          certifying thereto;

            (b)     on  or  prior  to  the fourth Anniversary, the Borrower
          shall have paid to the Agent in  immediately available funds, for
          distribution to the Lenders in accordance  with  their  Pro  Rata
          Shares,  a  fee  equal  to  .25%  of  the  Total  Utilization  of
          Commitments on the fourth Anniversary; and

            (c)     after  giving  effect  to  the  proposed  extension, no
          Indebtedness  permitted  pursuant to subsection 7.1(iv),  (v)  or
          (vi) shall mature prior to  the  date  that  is 91 days after the
          Maturity  Date,  as  so extended, except to the extent  expressly
          permitted by the second proviso contained in subsection 7.1(iv).

     G.   REPLACEMENT OF DEFAULTING  LENDER.  If any Lender is a Defaulting
Lender  and shall remain a Defaulting Lender  for  5  or  more  consecutive
Business  Days, the Borrower shall have the right (in addition to all other
rights that  the  Borrower may have with respect to such Defaulting Lender)
for a period of 45  days  following  the  date  of  such  Lender  becomes a
Defaulting  Lender  to  request  that  such  Defaulting  Lender  assign its
Commitment  and  outstanding  Obligations  to  a proposed Eligible Assignee
designated by the Borrower and reasonably satisfactory to Agent and, within
10  Business  Days  of  such request, such Defaulting  Lender  shall,  upon
payment in cash to such Defaulting  Lender of all such Lender's outstanding
Obligations  and  at  the Borrower's expense,  promptly  take  all  actions
reasonably necessary to  consummate  such  assignment; PROVIDED that at any
time prior to the consummation of any such assignment,  the  Agent may (but
shall  have  no  obligation  to) designate a proposed Eligible Assignee  in
substitution for the proposed Eligible Assignee designated by the Borrower,
in which event, the applicable  Defaulting  Lender  shall,  upon payment in
cash to such Defaulting Lender of all such Lender's outstanding Obligations
and  at  the  Borrower's  expense,  promptly  take  all  actions reasonably
necessary to consummate the proposed assignment.  The Borrower  shall offer
the  Commitment  of  such  Defaulting  Lender to other Lenders (other  than
Defaulting Lenders) before offering such  Commitment  for assignment to any
Person that is not a Lender.

2.2  INTEREST ON THE LOANS.

     A.   RATE OF INTEREST.  Subject to the provisions of subsections 2.2E,
2.6 and 2.7, each Loan shall bear interest on the unpaid  principal  amount
thereof  from  the date made through the Maturity Date at a rate determined
by reference to the Adjusted Eurodollar Rate; PROVIDED HOWEVER, that in the
event that any Loan  is  to  be made on a day when there are seven Interest
Periods outstanding, such Loan  shall bear interest at a rate determined by
reference to the Base Rate until  such  Loan  is  converted to a Eurodollar
Rate Loan in accordance with subsection 2.2D; PROVIDED  FURTHER that at all
times  during  which the Credit Agreement otherwise provides  that  a  Loan
shall be a Base  Rate  Loan,  such  Loan  shall  bear  interest  at  a rate
determined by reference to the Base Rate.

     Subject to the provisions of subsections 2.2E and 2.7, the Loans shall
bear interest through the Maturity Date as follows:

          (i)  if a Base Rate Loan, then at a rate equal to the sum of  the
     Base Rate PLUS the Applicable Base Rate Margin; and

         (ii)  if  a  Eurodollar Rate Loan, then at the sum of the Adjusted
     Eurodollar Rate PLUS the Applicable Eurodollar Rate Margin.

     From time to time upon the request of the Borrower with respect to any
Loan, the Agent shall advise  the  Borrower of the interest rate applicable
to such Loan.  The Agent shall advise  the  Borrower  of the amount of each
interest  payment  in advance of each Payment Date in accordance  with  the
customary procedures  of the Agent with respect thereto, but the failure of
the Agent to provide such  advice  accurately  or timely shall not vary the
obligation of the Borrower to pay the same in accordance  with the terms of
this Agreement.

     B.   INTEREST PERIODS.  In connection with each Eurodollar  Rate Loan,
the  Borrower  shall,  pursuant  to  the applicable Notice of Borrowing  or
Notice of Continuation, as the case may be, select an interest period (each
an  ``INTEREST PERIOD'') to be applicable  to  such  Loan,  which  Interest
Period  shall  be  at the Borrower's option either a one, two, three or, if
available, six month period; PROVIDED, HOWEVER, that:

          (i)  the initial  Interest  Period  for  any Eurodollar Rate Loan
     shall commence on the Funding Date in respect of such Loan;

         (ii)  each successive Interest Period shall commence on the day on
     which the next preceding Interest Period expires;

        (iii)  if an Interest Period would otherwise  expire  on a day that
     is not a Business Day, such Interest Period shall expire on  the  next
     succeeding  Business  Day;  PROVIDED,  HOWEVER,  that, if any Interest
     Period would otherwise expire on a day that is not  a Business Day but
     is a day of the month after which no further Business  Day  occurs  in
     such  month,  such  Interest Period shall expire on the next preceding
     Business Day;

         (iv)  any Interest  Period that begins on the last Business Day of
     a calendar month (or on a  day  for  which  there  is  no  numerically
     corresponding  day  in  the calendar month at the end of such Interest
     Period) shall, subject to  clause (v)  of this subsection 2.2B, end on
     the last Business Day of a calendar month;

          (v)  no Interest Period with respect  to any portion of the Loans
     shall extend beyond the Maturity Date;

         (vi)  there  shall  be  no  more  than  seven   Interest   Periods
     outstanding at any time;

        (vii)  in  the event the Borrower shall fail to specify an Interest
     Period  for  a Eurodollar  Rate  Loan  in  the  applicable  Notice  of
     Borrowing or Notice  of  Continuation, the Borrower shall be deemed to
     have selected an Interest Period of one month; and

       (viii)  if seven Interest  Periods  are  outstanding,  at  least one
     Interest Period shall be either (a) a one month Interest Period or (b)
     an Interest Period with less than 30 days remaining.

     C.   INTEREST PAYMENTS.  Subject to the provisions of subsection 2.2E,
interest  on  the Loans shall be payable monthly in arrears on and to  each
Payment Date, upon  any  prepayment  of the Loans (to the extent accrued on
the amount being prepaid) and at the Maturity Date.

     D.   CONVERSION/CONTINUATION.    Subject    to   the   provisions   of
subsections 2.2E and 2.6, (i) if any Eurodollar Rate  Loan is to be made or
continued on any date in which one or more Base Rate Loans are outstanding,
each  outstanding Base Rate Loan shall be automatically  converted  into  a
Eurodollar  Rate  Loan  on  such  date  and,  subject  to the provisions of
subsection  2.2B,  shall have the Interest Period specified  in  a  written
notice delivered by the Borrower to the Agent at least 3 days prior to such
date or, if no such  notice  was timely delivered, the same Interest Period
as the Eurodollar Rate Loan to  be  made or continued on such date and (ii)
if any Base Rate Loan has been outstanding for 27 days, such Base Rate Loan
shall be automatically converted into  a  Eurodollar  Rate Loan on the 30th
day  after  the  making  of  such  Loan and shall have the Interest  Period
specified in a written notice delivered by the Borrower to the Agent by the
27th day after the making of such Loan  or,  if  no  such notice was timely
delivered,  an Interest Period of one month.  Notwithstanding  anything  to
the contrary  contained in this section 2.2, no Loan (other than Loans made
pursuant to subsection  3.3B to reimburse an Issuing Lender) may be made as
a Base Rate Loan during the  period  from  December 24  of  any year to and
including January 7 of the next succeeding year.

     Upon the expiration of any Interest Period applicable to  a Eurodollar
Rate Loan, the Borrower shall continue such Loan as a Eurodollar Rate Loan.
The Borrower shall deliver a Notice of Continuation to the Agent  no  later
than 10:00 A.M. (New York time) at least three Business Days in advance  of
the  proposed continuation date for the applicable Eurodollar Rate Loan.  A
Notice  of  Continuation  shall  specify (i) the proposed continuation date
(which shall be a Business Day), (ii) the  amount  of  the  Eurodollar Rate
Loan to be continued, (iii) the requested Interest Period, and (iv) that no
Potential  Event  of  Default  or  Event  of  Default  has occurred and  is
continuing.    In   lieu  of  delivering  the  above-described  Notice   of
Continuation, the Borrower  may  give  the  Agent  telephonic notice by the
required  time  of  any proposed continuation under this  subsection  2.2D;
PROVIDED, HOWEVER, that  such notice shall be promptly confirmed in writing
by delivery of a Notice of  Continuation  to  the  Agent  on  or before the
proposed  continuation date.  Upon receipt of written or telephonic  notice
of any proposed  continuation  under  this subsection 2.2D, the Agent shall
promptly transmit such notice by telefacsimile or telephone to each Lender.

          Neither the Agent nor any Lender shall incur any liability to the
Borrower  or any of its Affiliates in acting  upon  any  telephonic  notice
referred to above that Agent believes in good faith to have been given by a
duly authorized  officer or other person authorized to act on behalf of the
Borrower or for otherwise  acting in good faith under this subsection 2.2D,
and upon continuation of the  applicable basis for determining the interest
rate with respect to any Loans  in  accordance with this Agreement pursuant
to  any  such  telephonic  notice  the  Borrower   shall  have  effected  a
continuation, as the case may be, hereunder.

          Except as otherwise provided in subsections  2.2E, 2.6B and 2.6C,
a  Notice of Continuation for continuation of a Eurodollar  Rate  Loan  (or
telephonic  notice  in  lieu thereof) shall be irrevocable on and after the
related Interest Rate Determination  Date,  and  Borrower shall be bound to
effect a continuation in accordance therewith.

     E.   DEFAULT RATE INTEREST.  During the continuation  of  any Event of
Default,  the outstanding principal amount of all Loans and, to the  extent
permitted by  applicable  law,  any interest payments thereon not paid when
due  (other  than  any excess interest  payable  solely  pursuant  to  this
subsection 2.2E) and  any  fees  and  other  amounts  then  due and payable
hereunder, shall thereafter bear interest (including post-petition interest
in any proceeding under the Bankruptcy Code or other applicable  bankruptcy
or insolvency laws) payable upon demand at a rate that is 3.0% per annum in
excess  of  the  interest rate otherwise payable under this Agreement  with
respect to the applicable Loans (or, in the case of any such fees and other
amounts, at a rate  which  is 3.0% per annum in excess of the interest rate
otherwise payable under this  Agreement  for  Base  Rate  Loans); PROVIDED,
HOWEVER,  that,  in  the  case of Eurodollar Rate Loans, if such  Event  of
Default is continuing, upon the expiration of the Interest Period in effect
at  the  time  any  such increase  in  interest  rate  is  effective,  such
Eurodollar Rate Loans  shall  thereupon  become  Base  Rate Loans and shall
thereafter bear interest payable upon demand at a rate which  is  3.0%  per
annum in excess of the interest rate otherwise payable under this Agreement
for  Base  Rate  Loans.   Payment  or  acceptance of the increased rates of
interest  provided  for  in  this  subsection 2.2E   is   not  a  permitted
alternative  to  timely  payment and shall not constitute a waiver  of  any
Event of Default or otherwise  prejudice or limit any rights or remedies of
the Agent or any Lender.

     F.   COMPUTATION OF INTEREST.  Interest on the Loans shall be computed
(i) in the case of Base Rate Loans,  on  the  basis of a 365-day or 366-day
year, as the case may be, and (ii) in the case of Eurodollar Rate Loans, on
the basis of a 360-day year, in each case for the  actual  number  of  days
elapsed  in  the  period during which it accrues.  In computing interest on
any Loan, the date  of  the  making  of  such  Loan  or the first day of an
Interest Period applicable to such Loan shall be included,  and the date of
payment  of  such  Loan  or  the  expiration  date  of  an  Interest Period
applicable  to such Loan shall be excluded; PROVIDED, HOWEVER,  that  if  a
Loan is repaid  on  the  same  day  on which it is made, one day's interest
shall be paid on that Loan.

2.3  FEES.

     A.   COMMITMENT FEES.  The Borrower  agrees  to  pay to the Agent, for
distribution to each Lender in proportion to that Lender's  Pro Rata Share,
commitment fees for the period from and including the Closing  Date  to and
excluding  the  third  Anniversary,  equal  to (i) the average of the daily
unused portion of the Commitments, taking into consideration any reductions
thereof  in  accordance  with Section 2.4B, MULTIPLIED  BY  (ii) 0.25%  per
annum, such commitment fees to be calculated on the basis of a 360-day year
and the actual number of days  elapsed  and  to  be  payable  quarterly  in
arrears on the last day of each calendar quarter, commencing with the first
such  date  to  occur after the Closing Date, and on the third Anniversary.
Anything contained  in  this Agreement to the contrary notwithstanding, for
purposes  of  calculating the  commitment  fees  payable  by  the  Borrower
pursuant  to  this   subsection   2.3B,   the   ``unused   portion  of  the
Commitments,'' as of any date of determination, shall be an amount equal to
the  aggregate  amount  of  Commitments  as of such date MINUS the  sum  of
(i) the aggregate principal amount of all  outstanding  Loans  on such date
PLUS (ii) the aggregate face amount of outstanding Letters of Credit.   The
commitment   fees   shall   be  payable  as  provided  in  this  subsection
notwithstanding that the amount  available  to be borrowed hereunder may be
less  than  the  amount  of the Commitments due to  the  operation  of  the
Borrowing Base or otherwise.

     B.   OTHER FEES.  The  Borrower  agrees to pay to the Agent such other
fees  in the amounts and at the times separately  agreed  upon  in  writing
between the Borrower and the Agent.

2.4  REPAYMENTS AND PREPAYMENTS; GENERAL PROVISIONS REGARDING PAYMENTS.

     A.   SCHEDULED  PAYMENTS  OF  THE  LOANS.  On each Scheduled Principal
Payment Date, if any, the Borrower shall  make  a  principal payment in the
amount  equal  to  6 2/3%  of  the  amount  of  the  Total  Utilization  of
Commitments on the third Anniversary.  The amounts of the payments required
by  the  preceding  sentence  shall  not be increased or decreased  by  the
occurrence  or  amounts  of  prepayments pursuant  to  subsection  2.4B  or
otherwise;  PROVIDED  that  voluntary  prepayments  made  after  the  third
Anniversary pursuant to subsection  2.4B(i)  shall  be  applied against the
scheduled payments required pursuant to this subsection 2.4A(i)  in inverse
order  of  maturity.  The Loans and all other Obligations shall be paid  in
full by the Borrower no later than the Maturity Date.

     B.   PREPAYMENTS AND REDUCTIONS IN COMMITMENTS.

          (i)  VOLUNTARY PREPAYMENTS.  The Borrower may, without prepayment
     charge  or penalty (except as provided in Section 2.6D), upon not less
     than one  Business  Day's  prior  written or telephonic notice, in the
     case of Base Rate Loans, and upon not  less  than three Business Days'
     prior  written  or telephonic notice in the case  of  Eurodollar  Rate
     Loans, in each case  confirmed  in  writing to the Agent (which notice
     the Agent will promptly transmit by telefacsimile or telephone to each
     Lender), at any time and from time to  time  prepay  any  Loans on any
     Business  Day  in  whole or in part in an aggregate minimum amount  of
     $500,000 and integral  multiples  of $100,000 in excess of that amount
     (or, if less, the total amount of all  outstanding  Loans);  PROVIDED,
     HOWEVER, that in the event a Eurodollar Rate Loan is prepaid on  a day
     other  than  the  last  day of the Interest Period applicable thereto,
     such prepayment shall be  accompanied  by  the  payment of any amounts
     payable under subsection 2.6D.  Notice of prepayment having been given
     as  aforesaid,  the  principal amount of the Loans specified  in  such
     notice shall become due  and  payable on the prepayment date specified
     therein.  Any such voluntary prepayment  shall be applied as specified
     in subsection 2.4B(vi).  Amounts prepaid pursuant  to  this subsection
     2.4B(i) may be reborrowed pursuant to subsection 2.1B.

         (ii)  VOLUNTARY REDUCTIONS OF COMMITMENTS.  The Borrower may, upon
     not less than three Business Days' prior written or telephonic  notice
     confirmed  in  writing  to  the  Agent  (which  notice  the Agent will
     promptly transmit by telegram, telex or telephone to each  Lender), at
     any  time  and  from  time  to  time terminate in whole or permanently
     reduce in part, without premium or  penalty,  the  Commitments  in  an
     amount  up  to  the  amount  by which the Commitments exceed the Total
     Utilization; PROVIDED, HOWEVER, that any such partial reduction of the
     Commitments shall be in an aggregate  minimum  amount  of $500,000 and
     integral  multiples  of  $100,000  in  excess  of  that  amount.   The
     Borrower's  notice to the Agent shall designate the date (which  shall
     be a Business  Day) of such termination or reduction and the amount of
     any partial reduction,  and  such  termination  or  reduction  of  the
     Commitments shall be effective on the date specified in the Borrower's
     notice  and  shall  reduce  the  Commitment of each Lender in the same
     proportion as its Pro Rata Share.

        (iii)  REDUCTIONS IN BORROWING  BASE  DUE TO CASUALTY, CONDEMNATION
     OR DISPOSITION OF POOL A PROPERTY.  If there shall occur a casualty or
     Taking with respect to any Pool A Property (or any portion thereof) or
     a sale or other permanent disposition of such  Pool A  Property,  with
     respect  to  which  occurrence  a  prepayment  is  required to be made
     pursuant to subsection 6.11E or 7.15B, as the case may  be,  then  the
     Borrowing  Base  shall  be  reduced  by  an  amount  equal to the then
     applicable Property Amount with respect to such Pool A Property.

         (iv)  PREPAYMENTS DUE TO BORROWING BASE OR TOTAL UTILIZATION.   If
     at  any  time  (a) the  Total  Utilization  (excluding  the  aggregate
     principal  amount  of Pool B Indebtedness) exceeds the Borrowing  Base
     then  in  effect, as demonstrated  by  a  Borrowing  Base  Certificate
     delivered   (or    required    to    be    delivered)    pursuant   to
     subsection 6.1(ii), or (b) the Total Utilization exceeds the aggregate
     amount  of  the  Commitments  then in effect, then the Borrower  shall
     prepay the Loans (or, if no Loans  are  then outstanding, deposit Cash
     to be held pursuant to the terms of the Collateral  Account  Agreement
     with respect to Letters of Credit then outstanding, whether or not any
     beneficiary  under any such Letter of Credit shall have presented,  or
     shall be entitled  at  such  time  to  present,  the  drafts  or other
     documents  or  certificates  required  to  draw  under  such Letter of
     Credit)  in  an amount equal to the greater of the amounts  determined
     pursuant to the  preceding  clauses (a) and (b) not later than 10 days
     after the date that such Borrowing  Base  Certificate  shall have been
     delivered (or, if such Borrowing Base Certificate shall  not have been
     delivered  timely or at all, on the last day that such Borrowing  Base
     Certificate  is  permitted  by  subsection 6.1(ii) to be delivered) or
     such excess Total Utilization occurred,  as  the  case  may  be.   Any
     mandatory  prepayments  pursuant  to this subsection 2.4B(iv) shall be
     applied as specified in subsection 2.4B(vi).

          (v)  ACCELERATION DUE TO REDUCTION OF THE FACILITY AMOUNT.  If at
     any  time  the  aggregate  amount  of the  Commitments  is  less  than
     $100,000,000,  whether  due  to  a reduction  in  the  Commitments  or
     otherwise,  (a) the  Commitments shall  be  automatically  terminated,
     (b) the Loans outstanding  and  all  other Obligations of the Borrower
     shall become immediately due and payable and (c) the Borrower shall be
     required to deposit in Cash to be held  pursuant  to  the terms of the
     Collateral  Account  Agreement  an amount equal to the maximum  amount
     that  may  at  any time be drawn under  all  Letters  of  Credit  then
     outstanding (whether  or  not any beneficiary under any such Letter of
     Credit shall have presented,  or  shall  be  entitled  at such time to
     present,  the  drafts  or other documents or certificates required  to
     draw under such Letter of Credit).

         (vi)  APPLICATION OF  PREPAYMENTS.   Each  prepayment of the Loans
     shall be applied first to Base Rate Loans to the  full  extent thereof
     before application to Eurodollar Rate Loans, in each case  in a manner
     which minimizes the amount of any payments required to be made  by the
     Borrower pursuant to subsection 2.6D.

     C.   APPLICATION  OF PAYMENTS TO PRINCIPAL AND INTEREST.  All payments
in respect of the principal  amount  of  the Loans shall include payment of
accrued interest on the principal amount being  repaid  or prepaid, and all
such  payments  shall  be applied to the payment of unpaid interest  before
application to principal.
     D.   GENERAL PROVISIONS REGARDING PAYMENTS.

          (i)  MANNER AND TIME OF PAYMENT.  All payments by the Borrower of
     principal, interest,  fees  and  other Obligations hereunder and under
     the Notes and the other Loan Documents  owed  to  Agent  or any Lender
     shall  be  made  in  same  day  funds  and without defense, setoff  or
     counterclaim, free of any restriction or  condition,  and delivered to
     the Agent not later than 2:00 P.M. (New York time) on the  date due at
     its office located at One Bankers Trust Plaza, New York, New York, for
     the  account  of  the Lenders; funds received by the Agent after  that
     time on such due date  shall  be  deemed  to  have  been  paid  by the
     Borrower on the next succeeding Business Day.  Upon the occurrence and
     during  the  continuance  of  an Event of Default, the Borrower hereby
     authorizes  the Agent to instruct  the  Cash  Manager  to  charge  its
     accounts with  the  Cash  Manager (including the Concentration Account
     and the Operating Account) in order to cause timely payment to be made
     to  the  Agent  of all principal,  interest,  fees  and  expenses  due
     hereunder or under  the  Notes or the other Loan Documents (subject to
     sufficient funds being available in its accounts for that purpose).

         (ii)  APPORTIONMENT OF PAYMENTS.  Aggregate principal and interest
     payments shall be apportioned  among  all  outstanding  Loans to which
     such  payments  relate,  in each case proportionately to the  Lenders'
     respective Pro Rata Shares.   The  Agent  shall promptly distribute to
     each Lender, at its primary address set forth  below  its  name on the
     appropriate  signature  page  hereof or at such other address as  such
     Lender may request, its Pro Rata  Share  of all such payments received
     by the Agent and the commitment fees of such  Lender  when received by
     the Agent pursuant to subsection 2.3.  Notwithstanding  the  foregoing
     provisions of this subsection 2.4D(ii), if, pursuant to the provisions
     of subsection 2.6C, any Affected Lender makes Base Rate Loans  in lieu
     of  its  Pro  Rata Share of any Eurodollar Rate Loans, the Agent shall
     give effect thereto in apportioning payments received thereafter.

        (iii)  PAYMENTS  ON BUSINESS DAYS.  Whenever any payment to be made
     hereunder shall be stated  to  be  due on a day that is not a Business
     Day, such payment shall be made on the  next  succeeding  Business Day
     and such extension of time shall be included in the computation of the
     payment of interest hereunder.

         (iv)  NOTATION   OF  PAYMENT.   Each  Lender  agrees  that  before
     disposing of the Note  held  by it, or any part thereof (other than by
     granting participations therein),  that  Lender  will  make a notation
     thereon of all Loans evidenced by that Note and all principal payments
     previously made thereon and of the date to which interest  thereon has
     been  paid; PROVIDED, HOWEVER, that the failure to make (or any  error
     in the  making  of)  a notation of any Loan made under such Note shall
     not  limit  or  otherwise  affect  the  obligations  of  the  Borrower
     hereunder or under  such Note with respect to any Loan or any payments
     of principal or interest on such Note.

          (v)  DISTRIBUTION  TO LENDERS.  Any payment received by the Agent
     for distribution to the Lenders  that  is  received  by 2:00 P.M. (New
     York time) on any day shall be paid to the Lenders by  the end of such
     day  and,  if such amounts are not paid to the Lenders on  such  date,
     shall bear interest,  payable  on demand, until paid to the Lenders at
     the  Federal  Funds  Effective  Rate   for  three  Business  Days  and
     thereafter at the Base Rate.

2.5  USE OF PROCEEDS.

     A.   LOANS.  Subject to the other provisions  of  this  Agreement, the
proceeds  of  the  Loans  shall be applied by the Borrower for the  general
corporate purposes of the Borrower  and its Subsidiaries, which may include
(i) the   repayment   of  existing  Indebtedness,   (ii) the   acquisition,
ownership, Renovation,  Restoration,  management  and  operation of upscale
full  service  hotels in the United States of America and,  to  the  extent
permitted by subsection  7.14B, Canada, (iii) the acquisition and ownership
of real property for the expansion  of  such  hotels, (iv) the provision or
acquisition and ownership of equity and debt Investments  in Joint Ventures
or  other  entities  formed  to  acquire,  own, Renovate, Restore,  manage,
operate and dispose of such hotels, (v) the  acquisition  and  ownership of
certain  mortgage  loans  secured  primarily  by such hotels, and (vi)  the
acquisition and ownership of certain other equity and debt Securities.

     B.   LETTERS OF CREDIT.  Subject to subsections 2.5C, 7.3 and 7.4, the
Letters  of  Credit  shall  be issued for the purposes  set  forth  in  the
definitions of Commercial Letter of Credit and Standby Letter of Credit and
such other general corporate  purposes as may, in any instance, be approved
in advance, in writing, by the Agent.

     C.   MARGIN REGULATIONS.   No portion of the proceeds of any borrowing
under  this Agreement shall be used  by  any  Loan  Party  or  any  of  its
Subsidiaries  in  any  manner  that  might  cause  the borrowing to violate
Regulation G, Regulation U, Regulation T or Regulation X  of  the  Board of
Governors  of  the  Federal  Reserve System or any other regulation of such
Board or to violate the Exchange Act, in each case as in effect on the date
or dates of such borrowing.

2.6  SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.

     Notwithstanding any other provision of this Agreement to the contrary,
the following provisions shall  govern  with respect to the Eurodollar Rate
Loans as to the matters covered:

     A.   DETERMINATION  OF  APPLICABLE  INTEREST   RATE.    As   soon   as
practicable  after  10:00  A.M.  (New  York  time)  on  each  Interest Rate
Determination  Date, the Agent shall determine (which determination  shall,
absent manifest  error,  be final, conclusive and binding upon all parties)
the interest rate that shall  apply  to the Eurodollar Rate Loans for which
an  interest  rate is then being determined  for  the  applicable  Interest
Period and shall  promptly  give notice thereof (in writing or by telephone
confirmed in writing) to the Borrower and each Lender.

     B.   INABILITY TO DETERMINE  APPLICABLE  INTEREST  RATE;  EXISTENCE OF
DEFAULT.   In the event that the Agent shall have determined in good  faith
(which determination  shall  absent  manifest error be final and conclusive
and binding upon all parties hereto),  on  any  Interest Rate Determination
Date  with  respect  to  any  Eurodollar  Rate  Loans, that  by  reason  of
circumstances affecting the interbank Eurodollar  market, adequate and fair
means do not exist for ascertaining the interest rate  applicable  to  such
Loans  on  the  basis provided for in the definition of Adjusted Eurodollar
Rate, the Agent shall  on  such  date  give  notice (by telefacsimile or by
telephone confirmed in writing) to the Borrower  and  each  Lender  of such
determination,  whereupon  (i) no  Loans  may  be  made as, or converted to
Eurodollar  Rate Loans until such time as the Agent notifies  the  Borrower
and the Lenders that the circumstances giving rise to such notice no longer
exist and (ii) any  Notice  of Borrowing or Notice of Continuation given by
the  Borrower  with  respect  to   the  Loans  in  respect  of  which  such
determination was made shall be deemed to contain a request that such Loans
be made as or converted to Base Rate  Loans.   Notwithstanding  anything to
the  contrary  contained  in  this  Agreement,  no Loan may be made as,  or
converted into, a Eurodollar Rate Loan if an Event  of Default or Potential
Event of Default has occurred and is continuing.

     C.   ILLEGALITY OR IMPRACTICABILITY OF EURODOLLAR  RATE LOANS.  In the
event  that  on  any  date any Lender shall have determined in  good  faith
(which determination shall  be  final  and  conclusive and binding upon all
parties hereto but shall be made only after consultation  with  the  Agent)
that  the  making, maintaining or continuation of its Eurodollar Rate Loans
(i) has become  unlawful  as  a result of compliance by such Lender in good
faith with any law, treaty, governmental  rule,  regulation,  guideline  or
order   (or  would  conflict  with  any  such  treaty,  governmental  rule,
regulation,  guideline or order not having the force of law even though the
failure to comply  therewith  would  not  be  unlawful)  or (ii) has become
impracticable, or would cause such Lender material hardship, as a result of
contingencies  occurring after the date of this Agreement which  materially
and adversely affect  the  interbank  Eurodollar market, or the position of
such Lender in that market, then, and in  any such event, such Lender shall
be  an  ``AFFECTED  LENDER''  and  it shall on that  day  give  notice  (by
telefacsimile or by telephone confirmed in writing) to the Borrower and the
Agent of such determination (which notice the Agent shall promptly transmit
to  each  other Lender).  Thereafter (a) the  obligation  of  the  Affected
Lender to make  Loans  as,  or  to  convert Loans to, Eurodollar Rate Loans
shall be suspended until such notice  shall  be  withdrawn  by the Affected
Lender  (which  withdrawal shall be promptly accomplished by such  Affected
Lender by notice to the Agent and the Borrower as soon as the circumstances
causing such Affected  Lender  to be so classified no longer exist), (b) to
the  extent  such  determination  by  the  Affected  Lender  relates  to  a
Eurodollar Rate Loan then being requested  by  the  Borrower  to be made or
continued  hereunder,  the  Affected  Lender  shall  make such Loan as,  or
convert  such  Loan to, as applicable, a Base Rate Loan,  (c) the  Affected
Lender's obligation  to maintain its outstanding Eurodollar Rate Loans (the
``AFFECTED LOANS'') shall  be  terminated  at  the  earlier to occur of the
expiration  of  the  Interest  Period then in effect with  respect  to  the
Affected Loans or when required  by  law  and  (d) the Affected Loans shall
automatically convert into Base Rate Loans on the date of such termination.
Except as provided in the immediately preceding  sentence,  nothing in this
subsection 2.6C  shall  affect the obligation of any Lender other  than  an
Affected Lender to make or  maintain  Loans  as,  or  to  convert Loans to,
Eurodollar Rate Loans in accordance with the terms of this Agreement.

     D.   COMPENSATION   FOR  BREAKAGE  OR  NON-COMMENCEMENT  OF   INTEREST
PERIODS.  The Borrower shall  compensate  each Lender, upon written request
by that Lender (which request shall set forth the basis for requesting such
amounts), for all reasonable losses, expenses  and  liabilities  (including
any interest paid by that Lender to lenders of funds borrowed by it to make
or  carry  its  Eurodollar  Rate  Loans  and any loss, expense or liability
sustained  by  that  Lender  in  connection with  the  liquidation  or  re-
employment of such funds) which that  Lender  may  sustain:  (i) if for any
reason  (other  than a default by that Lender or events described  in  2.6C
above with respect  to  such  Lender)  a  borrowing  or continuation of any
Eurodollar  Rate  Loan  does not occur on a date specified  therefor  in  a
Notice  of Borrowing or a  Notice  of  Continuance,  as  applicable,  or  a
telephonic request for borrowing, or a conversion to or continuation of any
Eurodollar Rate Loan does not occur on the date specified therefor, (ii) if
any prepayment  or conversion of any of its Eurodollar Rate Loans occurs on
a date that is not  the  last  day of an Interest Period applicable to that
Loan,  (iii) if  any  prepayment  (including  any  prepayment  pursuant  to
subsection 2.4B(i)) or other principal  payment  of  any  of its Eurodollar
Rate Loans is not made by the Borrower on any date specified in a notice of
prepayment  given  by  the Borrower or (iv) as a consequence of  any  other
default by the Borrower  in the repayment of its Eurodollar Rate Loans when
required by the terms of this Agreement.

     E.   BOOKING OF EURODOLLAR  RATE LOANS.  Any Lender may make, carry or
transfer Eurodollar Rate Loans at,  to,  or  for  the account of any of its
branch offices or the office of an Affiliate of that Lender.

     F.   ASSUMPTIONS   CONCERNING  FUNDING  OF  EURODOLLAR   RATE   LOANS.
Calculation of all amounts  payable  to  a Lender under this subsection 2.6
and under subsection 2.7A shall be made as  though that Lender had actually
funded each of its relevant Eurodollar Rate Loans through the purchase of a
Eurodollar  deposit  bearing  interest  at the rate  obtained  pursuant  to
clause (i) of the definition of Adjusted Eurodollar Rate in an amount equal
to the amount of such Eurodollar Rate Loan and having a maturity comparable
to the relevant Interest Period and through the transfer of such Eurodollar
deposit from an offshore office of that Lender to a domestic office of that
Lender  located in the United States of America;  PROVIDED,  HOWEVER,  that
each Lender  may  fund  each  of its Eurodollar Rate Loans in any manner it
sees fit and the foregoing assumptions  shall  be  utilized  only  for  the
purposes of calculating amounts payable under this subsection 2.6 and under
subsection 2.7A.

2.7  INCREASED COSTS; TAXES; CAPITAL ADEQUACY.

     A.   COMPENSATION  FOR  INCREASED  COSTS  AND  TAXES.   Subject to the
provisions of subsection 2.7B (which shall be controlling with  respect  to
the  matters  covered  thereby), in the event that any Lender shall in good
faith determine (which determination shall, absent manifest error, be final
and conclusive and binding  upon  all parties hereto but shall be made only
after consultation with the Agent)  that  any  law,  treaty or governmental
rule, regulation or order, or any change therein or in  the interpretation,
administration  or application thereof (including the introduction  of  any
new  law,  treaty or  governmental  rule,  regulation  or  order),  or  any
determination  of  a  Governmental  Authority,  in  each  case that becomes
effective  after  the  date hereof, or compliance by such Lender  with  any
guideline, request or directive issued or made after the date hereof by any
central  bank  or  other  Governmental   Authority   or  quasi-governmental
authority (whether or not having the force of law):

          (i)  subjects such Lender (or its applicable  lending  office) to
     any  additional  Tax (other than any Tax on the overall net income  of
     such Lender), with respect to this Agreement or any of its obligations
     hereunder or any payments  to  such  Lender (or its applicable lending
     office)  of  principal, interest, fees or  any  other  amount  payable
     hereunder;

         (ii)  imposes, modifies or holds applicable any reserve (including
     any marginal,  emergency,  supplemental,  special  or  other reserve),
     special   deposit,   compulsory   loan,   FDIC  insurance  or  similar
     requirement against assets held by, or deposits  or  other liabilities
     in  or  for the account of, or advances or loans by, or  other  credit
     extended  by, or any other acquisition of funds by, any office of such
     Lender (other than any such reserve or other requirements with respect
     to Eurodollar  Rate  Loans  that  are  reflected  in the definition of
     Adjusted Eurodollar Rate); or

        (iii)  imposes any other condition (other than with  respect  to  a
     Tax  matter)  on  or  affecting such Lender (or its applicable lending
     office)  or its obligations  hereunder  or  the  interbank  Eurodollar
     market;

and the result  of  any  of  the  foregoing is to increase the cost to such
Lender of agreeing to make, making  or  maintaining  Loans  hereunder or to
reduce any amount received or receivable by such Lender (or its  applicable
lending office) with respect thereto; then, in any such case, the  Borrower
shall  promptly  pay to such Lender, upon receipt of the statement referred
to in the next sentence,  such additional amount or amounts (in the form of
an increased rate of, or a  different  method  of  calculating, interest or
otherwise as such Lender in its sole discretion shall  determine) as may be
necessary  to  compensate  such  Lender  for  any  such increased  cost  or
reduction in amounts received or receivable hereunder.   Such  Lender shall
deliver  to  the  Borrower  (with  a copy to the Agent) a written statement
setting forth in reasonable detail the basis for calculating the additional
amounts  owed to such Lender under this  subsection 2.7A,  which  statement
shall be conclusive  and  binding  upon  all parties hereto absent manifest
error.

     B.   WITHHOLDING OF TAXES.

          (i)  PAYMENTS TO BE FREE AND CLEAR.   All  sums  payable  by  the
     Borrower  under  this  Agreement and the other Loan Documents shall be
     paid free and clear of and  (except  to  the  extent  required by law)
     without any deduction or withholding on account of any  Tax (excluding
     in the case of each Lender and the Agent, Taxes imposed on  its income
     by a jurisdiction under the laws of which it is organized or  in which
     its  principal  executive office is located or in which its applicable
     lending office for  funding or booking its Loans hereunder is located)
     imposed, levied, collected,  withheld  or  assessed  by  or within the
     United  States  of America or any political subdivision in or  of  the
     United States of  America or any other jurisdiction from or to which a
     payment is made by  or  on behalf of the Borrower or by any federation
     or organization of which  the  United  States  of  America or any such
     jurisdiction is a member at the time of payment.

         (ii)  GROSSING-UP  OF  PAYMENTS.   If the Borrower  or  any  other
     Person  is  required by law to make any deduction  or  withholding  on
     account of any  such  Tax from any sum paid or payable by the Borrower
     to the Agent or any Lender under any of the Loan Documents:

               (a)  the  Borrower  shall  notify  the  Agent  of  any  such
          requirement or any  change in any such requirement as soon as the
          Borrower becomes aware of it;

               (b)  the Borrower  shall pay any such Tax before the date on
          which penalties attach thereto,  such  payment to be made (if the
          liability to pay is imposed on the Borrower)  for its own account
          or (if that liability is imposed on the Agent or  such Lender, as
          the  case  may be) on behalf of and in the name of the  Agent  or
          such Lender;

               (c)  the sum payable by the Borrower in respect of which the
          relevant deduction,  withholding  or payment is required shall be
          increased  to  the extent necessary to  ensure  that,  after  the
          making of that deduction,  withholding  or  payment, the Agent or
          such Lender, as the case may be, receives on  the  due date a net
          sum  equal to what it would have received had no such  deduction,
          withholding or payment been required or made; and

               (d)  within  30  days  after paying any sum from which it is
          required by law to make any deduction  or withholding, and within
          30 days after the due date of payment of  any  Tax  which  it  is
          required  by  clause (b) above to pay, the Borrower shall deliver
          to the Agent evidence  satisfactory to the other affected parties
          of such deduction, withholding  or  payment and of the remittance
          thereof to the relevant taxing or other authority;

     PROVIDED, HOWEVER, that no such additional amount shall be required to
     be paid to any Lender under clause (c) above except to the extent that
     any change after the date hereof (in the case of each Lender listed on
     the signature pages hereof) or after the date  such  Lender  became  a
     Lender  pursuant  to subsection 9.1 (in the case of each other Lender)
     in any such requirement  for a deduction, withholding or payment as is
     mentioned therein shall result  in  an  increase  in  the rate of such
     deduction, withholding or payment from that in effect at  the  date of
     this  Agreement  (in  the  case of each Lender listed on the signature
     pages hereof) or at the date  such  Lender became a Lender pursuant to
     subsection 9.1 (in the case of each other  Lender) as the case may be,
     in respect of payments to such Lender.

        (iii)  U.S. TAX CERTIFICATES.  Each Lender  that is organized under
     the laws of any jurisdiction other than the United  States  of America
     or  any state or other political subdivision thereof shall deliver  to
     the Agent for transmission to the Borrower, on or prior to the Closing
     Date (in the case of each Lender listed on the signature pages hereof)
     or on  the date it becomes a Lender pursuant to subsection 9.1 (in the
     case of  each  other  Lender),  and  at  such  other  times  as may be
     necessary  in the determination of the Borrower or the Agent (each  in
     the  reasonable   exercise  of  its  discretion),  such  certificates,
     documents or other  evidence,  properly completed and duly executed by
     such Lender (including Internal Revenue Service Form 1001 or Form 4224
     or  any  other  certificate  or statement  of  exemption  required  by
     Treasury Regulations Section 1.1441-4(a) or Section 1.1441-6(c) or any
     successor thereto) to establish  that  such  Lender  is not subject to
     deduction  or  withholding of United States federal income  tax  under
     Section 1441 or  1442  of  the  Internal Revenue Code or otherwise (or
     under any comparable provisions of any successor statute) with respect
     to any payments to such Lender of  principal,  interest, fees or other
     amounts payable under any of the Loan Documents.   The  Borrower shall
     not  be  required  to  pay  any additional amount to any Lender  under
     clause (c)  or  perform  with  respect  thereto  under  clause (d)  of
     subsection 2.7B(ii) at any time  during  which  such Lender shall have
     failed  to  satisfy  the  requirements  of  the immediately  preceding
     sentence; PROVIDED, HOWEVER, that if such Lender  shall have satisfied
     such  requirements  on the Closing Date (in the case  of  each  Lender
     listed on the signature  pages  hereof)  or  on  the date it becomes a
     Lender (in the case of each other Lender), nothing  in this subsection
     2.7B(iii)  shall  relieve the Borrower of its obligation  to  pay  any
     additional amounts  pursuant  to  clause (c)  or  perform with respect
     thereto under clause (d) of subsection 2.7B(ii) in  the event that, as
     a result of any change in any applicable law, treaty  or  governmental
     rule,  regulation  or  order,  or  any  change  in the interpretation,
     administration  or  application  thereof,  such Lender  is  no  longer
     properly entitled to deliver forms, certificates  or other evidence at
     a  subsequent  date  establishing  the  fact that such Lender  is  not
     subject  to  withholding  as  described in the  immediately  preceding
     sentence.

     C.   CAPITAL ADEQUACY ADJUSTMENT.  If any Lender shall have reasonably
determined  that  the adoption, effectiveness,  phase-in  or  applicability
(after the date of  this  Agreement) of any law, rule or regulation (or any
provision thereof) regarding  capital adequacy, or any change therein or in
the interpretation or administration thereof by any Governmental Authority,
including  any  central  bank  or  comparable   agency   charged  with  the
interpretation or administration thereof, or compliance by  any  Lender (or
its  applicable  lending  office)  with any guideline, request or directive
regarding capital adequacy (whether  or  not having the force of law (after
the  date of this Agreement)) of any such Governmental  Authority,  has  or
would have the effect of reducing the rate of return on the capital of such
Lender  or  any corporation controlling such Lender as a consequence of, or
with reference  to,  such Lender's Loans or Commitment or Letters of Credit
or participations herein or other obligations hereunder with respect to the
Loans or the Letters of  Credit  to a level below that which such Lender or
such controlling corporation could  have  achieved  but  for such adoption,
effectiveness, phase-in, applicability, change or compliance  (taking  into
consideration  the  policies of such Lender or such controlling corporation
with regard to capital  adequacy),  then  from  time  to  time, within five
Business  Days  after  receipt  by  the  Borrower from such Lender  of  the
statement referred to in the next sentence,  the Borrower shall pay to such
Lender such additional amount or amounts as will  compensate such Lender or
such  controlling  corporation on an after-tax basis  for  such  reduction.
Such Lender shall deliver  to  the  Borrower  (with  a copy to the Agent) a
written  statement, setting forth in reasonable detail  the  basis  of  the
calculation of such additional amounts, which statement shall be conclusive
and binding upon all parties hereto absent manifest error.

2.8  OBLIGATION OF THE LENDERS TO MITIGATE.

     Each  Lender agrees that, as promptly as practicable after the officer
of such Lender responsible for administering the Loans becomes aware of the
occurrence of  an  event  or  the existence of a condition that would cause
such Lender to become an Affected  Lender or that would entitle such Lender
to  receive payments under subsection 2.7,  it  will,  to  the  extent  not
inconsistent  with  the internal policies of such Lender and any applicable
legal or regulatory restrictions,  use reasonable efforts (i) to make, fund
or maintain the Commitment of such Lender  or  the  affected  Loans of such
Lender  through  another  lending office of such Lender, or (ii) take  such
other measures as such Lender  may  deem reasonable, if as a result thereof
the circumstances which would cause such  Lender  to  be an Affected Lender
would  cease  to exist or the additional amounts which would  otherwise  be
required to be  paid  to  such  Lender  pursuant to subsection 2.7 would be
materially reduced and if, as determined  by  such Lender in its reasonable
judgment, the making, funding or maintaining of  such  Commitment  or Loans
through  such  other  lending  office  or  in  accordance  with  such other
measures,  as  the  case  may  be, would not otherwise materially adversely
affect such Commitment or Loans  or the interests of such Lender; PROVIDED,
HOWEVER, that such Lender will not  be  obligated  to  utilize  such  other
lending  office  pursuant to this subsection 2.8 unless the Borrower agrees
to pay all incremental  expenses  incurred  by  such  Lender as a result of
utilizing  such other lending office as described in clause (i)  above.   A
certificate  as  to the amount of any such expenses payable by the Borrower
pursuant to this subsection 2.8  (setting  forth  in  reasonable detail the
basis for requesting such amount) submitted by such Lender  to the Borrower
(with a copy to the Agent) shall be conclusive absent manifest error.

2.9  ACQUISITION OF PROPERTIES.

     A.   ACQUISITION AND ADDITION OF POOL A PROPERTIES.  The  Borrower and
its Wholly Owned Subsidiaries may, with the prior written approval  of  the
Agent   and  Lenders  holding  66-2/3%  of  the  Commitments  (or,  if  the
Commitments  have  been  terminated, the Total Utilization of Commitments),
which approval may be granted,  withheld,  conditioned  or  delayed  in the
Agent's  and  Lenders'  sole  discretion  (PROVIDED that such determination
shall  be  made  by  the Agent and the Lenders  within  ten  Business  Days
following receipt by the  Agent and the Lenders of all Property Information
or such other documents and  other  information  required to be received by
the  Agent  and  the  Lenders  in  advance  of  such  determination),  make
Acquisitions of one or more hotel properties (each, an  ``ADDITIONAL POOL A
PROPERTY'') as Pool A Properties; PROVIDED that, in any event:

          (i)  such Additional Pool A Property shall be owned either by the
     Borrower or a Wholly Owned Subsidiary (other than a Pool B Subsidiary)
     of the Borrower; PROVIDED that such Subsidiary shall  have  executed a
     counterpart of the Affiliate Guaranty, the Security Agreement  and the
     Environmental Indemnity;

         (ii)  each Additional Pool A Property shall include the entire fee
     interest  or  leasehold  interest  pursuant  to  a  Ground Lease in an
     upscale  full  service hotel located in the United States  of  America
     and, to the extent provided in subsection 7.14B, Canada, and otherwise
     be of a type, quality  and  character  consistent  with the Borrower's
     business plan and strategy or, if not consistent, as  approved  by the
     Agent, which approval may be granted, withheld, conditioned or delayed
     in the Agent's sole discretion;

        (iii)  at  least  30  days  (or  such  shorter  period  as shall be
     acceptable  to  the  Agent)  before  the  proposed Addition Date,  the
     Borrower,  at its expense, shall deliver to  the  Agent  the  Property
     Information  with  respect  to  such Additional Pool A Property, which
     Property Information shall be satisfactory  in  form  and substance to
     the Agent, in its sole discretion;

         (iv)  on  or  before the closing date of the Acquisition  of  such
     Additional  Pool A Property,  the  Borrower,  at  its  expense,  shall
     deliver to the  Agent  the  following  with  respect to the applicable
     Additional Pool A Property:

               (a)  evidence acceptable to the Agent,  as  contemplated  by
          subsection  6.10E,  with  respect to valid policies of insurance,
          required by this Agreement or any other Loan Document,

               (b)  supplements to the  Schedules to this Agreement and the
          other  Loan  Documents  reflecting   the   acquisition   of  such
          Additional  Pool A  Property  and the other actions taken by  the
          Loan  Parties  and their respective  Subsidiaries  in  connection
          therewith, which Schedules shall be acceptable to the Agent,

               (c)  to the  extent  applicable, each of the other documents
          and satisfy each of the other  conditions set forth in paragraphs
          E, F, G, I, L and M(i) of subsection  4.1, MUTATIS MUTANDIS, with
          respect  to such Additional Pool A Property,  PROVIDED  that  the
          Agent shall not be required to approve such Engineering Report,

               (d)  executed   or   certified,   conformed  copies  of  any
          applicable  Acquisition  Agreement,  and  such  other  documents,
          certificates and opinions executed and delivered  by or on behalf
          of  CapStar  and  any  of  its  Subsidiaries  as  the  Agent  may
          reasonably request, at least ten days prior to such closing date,

               (e)  if  the Additional Pool A Property includes a leasehold
          interest,  original   counterparts   of   a   landlord   estoppel
          certificate  and agreement with respect to each of the applicable
          Ground Leases,  reasonably  satisfactory in form and substance to
          the Agent, and duly executed  and  acknowledged  by  each  lessor
          under such Ground Lease, and

               (f)  payment  pursuant  to  subsection  9.2  of the expenses
          incurred by the Agent in connection with the matters  subject  to
          this subsection 2.9;

          (v)  on or before the proposed Addition Date with respect to such
     Additional Pool A Property, the Borrower at its expense, shall deliver
     to the Agent:

               (a)  a  statement  of  Property Gross Revenues and Operating
          Expenses and any other expenses  with  respect to such Additional
          Pool A  Property  for  the  12 most recently  completed  calendar
          months ending not less than 30 days before such Addition Date, in
          reasonable detail satisfactory  to the Agent and certified by the
          Authorized Officer of the Borrower  to  the  effect  provided  in
          subsection   6.1(i),   MUTATIS   MUTANDIS,   PROVIDED  that  such
          certificate  may  be  based  upon  his  or  her knowledge,  after
          reasonable inquiry,

               (b)  an   Addition   Certificate   in   reasonable    detail
          satisfactory  to  the  Agent  and  together  with  the  financial
          statements   and  other  information  used  by  the  Borrower  to
          calculate the  Borrowing  Base  and  certified  by the Authorized
          Officer  of  the  Borrower  and,  if  applicable,  the Subsidiary
          acquiring the Additional Pool A Property,

               (c)  an  Appraisal  with  respect to such Additional  Pool A
          Property, which Appraisal shall satisfy all applicable regulatory
          requirements and be satisfactory  in  form  and  substance to the
          Agent,

               (d)  payment  pursuant  to  subsection 9.2  of the  expenses
          incurred by the Agent in connection with the matters  subject  to
          this   subsection 2.9   and   not  previously  paid  pursuant  to
          clause (iv)(f) above, and

               (e)  to the extent applicable,  each  of the other documents
          and   satisfy  each  of  the  other  conditions  set   forth   in
          paragraphs J,  K  and M of subsection 4.1 (PROVIDED that, without
          limiting any other  consent  or  approval rights, the Engineering
          Report and related reliance letter  shall be satisfactory in form
          and substance to the Agent); and

         (vi)  Notwithstanding anything to the  contrary  contained herein,
     the  Addition  Date  with  respect to such Additional Pool A  Property
     shall not occur without the prior written approval of the Agent, which
     approval  may be granted, withheld,  conditioned  or  delayed  in  the
     Agent's sole discretion.

     B.   ACQUISITION OF POOL B PROPERTIES.  So long as no Event of Default
or Potential Event  of  Default  has occurred and is continuing or would be
caused thereby, without the approval  of  the  Agent  (except  as otherwise
expressly  provided  herein),  any  of  the  Pool B  Subsidiaries  may make
Acquisitions of Pool B Properties; PROVIDED that:

          (i)  each  Pool B  Property  subject  to  such  Acquisition shall
     include  the  entire fee or leasehold interest pursuant  to  a  Ground
     Lease in an upscale full service hotel located in the United States of
     America and, to  the  extent permitted in subsection 7.14B, Canada and
     otherwise be of a type,  quality  and  character  consistent  with the
     Borrower's  business  plan  and  strategy  or,  if  not consistent, as
     approved  by  the  Agent,  which  approval  may be granted,  withheld,
     conditioned or delayed in the Agent's sole discretion;

         (ii)  at least 15 days before the proposed  closing  date  of each
     such  Acquisition, the Borrower, at its expense, shall deliver to  the
     Agent (1)  the  Property  Information  with  respect  to  such  Pool B
     Property  that  has  not  previously been delivered (PROVIDED that the
     information  delivered pursuant  to  clauses  (iii)  and  (v)  of  the
     definition of  Property Information need not be approved by the Agent)
     and (2) a statement  of Property Gross Revenues and Operating Expenses
     and any other expenses with respect to such Pool B Property for the 12
     most recently completed  calendar  months ending not less than 30 days
     before such closing date, in reasonable  detail  satisfactory  to  the
     Agent  and  certified  by  the  Chief  Executive  Officer or the Chief
     Financial Officer of the Borrower to the effect provided in subsection
     6.1(i), MUTATIS MUTANDIS, PROVIDED that such certificate  may be based
     upon his or her knowledge, after reasonable inquiry;

        (iii)  on or before such closing date, the Borrower or any  of  its
     Wholly  Owned Subsidiaries (other than Pool B Subsidiaries) shall have
     entered  into   a   Property  Servicing  Agreement  with  such  Pool B
     Subsidiary and, in the  event  a Liquor License exists with respect to
     such Pool B Property or is acquired  thereafter,  and  the Agent shall
     reasonably  determine  that  the  same is necessary or advisable,  the
     appropriate  parties  shall  have  entered  into  a  Liquor  Operation
     Servicing Agreement or a Liquor Lease,  in  each case substantially in
     the form approved by the Agent on or before the  Closing  Date  or  in
     such other form as may be reasonably acceptable to the Agent; and

         (iv)  on  or  before  such  closing  date,  the  Borrower,  at its
     expense, shall deliver to the Agent

               (a)  evidence  acceptable to the Agent with respect to valid
          policies of insurance  required  by  any  Pool B  Document,  this
          Agreement or any other Loan Document,

               (b)  an   Addition   Certificate,   in   reasonable   detail
          satisfactory to the Agent,

               (c)  supplements to the Schedules to this Agreement and  the
          other  Loan  Documents  reflecting the acquisition of such Pool B
          Property and the other actions  taken  by  the  Loan  Parties and
          their  respective  Subsidiaries  in  connection therewith,  which
          supplements shall be reasonably satisfactory to the Agent,

               (d)  unless previously delivered  to  the  Agent pursuant to
          subsection 7.7(ii), originally counterparts to the  Environmental
          Indemnity  and  the  Affiliate Guaranty executed by such  Pool  B
          Subsidiary; PROVIDED that  such  Pool  B  Subsidiary shall not be
          acquired to execute an Affiliate Guaranty if and so long as doing
          so would violate the provisions of any Pool  B  Indebtedness then
          owed by such Pool B Subsidiary,

               (e)  executed or certified, conformed copies  of the related
          Acquisition  Agreements and Pool B Documents and copies  of  such
          other documents, certificates and opinions executed and delivered
          by or on behalf  of  the  Borrower and any of its Subsidiaries as
          the Agent may reasonably request,

               (f)  to  the  extent  applicable,  copies  of  each  of  the
          documents set forth in paragraphs F, I, J (other than the consent
          agreement specified therein),  K,  L  and  M  of  subsection 4.1,
          MUTATIS MUTANDIS, with respect to such Pool B Property,  in  each
          case  subject  to the satisfaction of the Agent specified in such
          subsections; PROVIDED  that  the  Agent  shall not be required to
          approve the Franchise Agreements, Material Leases and Engineering
          Reports delivered pursuant to this clause (f); PROVIDED, HOWEVER,
          that  the franchisors under the respective  Franchise  Agreements
          shall have  a national standing and reputation not less favorable
          than  the  standing  and  reputation  of  the  franchisors  under
          Franchise Agreements then covering the Pool A Properties,

               (g)  payment  pursuant  to  subsection  9.2  of the expenses
          incurred by the Agent in connection with the matters  subject  to
          this subsection 2.9B, and

               (h)  if the Acquisition includes a leasehold interest, (i) a
          leasehold  mortgage reasonably satisfactory in form and substance
          to the Agent  and  evidence  reasonably satisfactory to the Agent
          that all other documents have  been executed and all actions that
          the Agent reasonably requests taken  in  order to create, perfect
          and maintain a valid and enforceable first  priority  Lien in the
          leasehold interest of the applicable Loan Party or Subsidiary and
          (ii) an estoppel certificate, reasonably satisfactory in form and
          substance  to the Agent, duly executed by the applicable  lessor,
          PROVIDED that  such  Pool  B  Subsidiary shall not be required to
          execute such a leasehold mortgage  if  and  so  long  as doing so
          would violate the provisions of any Pool B Indebtedness then owed
          by such Pool B Subsidiary, and

               (i)  any  other information relating to such Acquisition  or
          such Additional Pool B Property as is reasonably requested by the
          Agent;

          (v)  after  giving   effect  to  the  proposed  Acquisition,  the
     Borrower  shall  satisfy  all   conditions  to  the  borrowing  of  an
     additional $1.00 hereunder, without  giving effect to limitations with
     respect to the frequency and minimum amounts  of  Loans, the amount of
     the Borrowing Base and the date of the borrowing; and

         (vi)  at no time shall a Pool B Subsidiary acquire  and  own  more
     than one Pool B Property unless such Pool B Properties are acquired in
     a single transaction or series of related transactions.

     C.   DESIGNATION OF POOL A PROPERTIES.  The Borrower may designate any
Removed  Pool A  Property  as  a Designated Pool A Property by delivering a
written notice of such designation  to  the  Agent.   Upon  receipt of such
notice, the applicable Removed Pool A Property shall be a Designated Pool A
Property for all purposes of this Agreement, including without  limitation,
the calculation of the Borrowing Base.

     D.   REMOVAL OF DESIGNATED PROPERTIES.  The Borrower may, from time to
time  after the Closing Date, deliver to the Agent written notice  that  it
elects  to  exclude the Property Amount of a specified Pool A Property from
the calculation  of  the Borrowing Base; PROVIDED that, after giving effect
to such exclusion, the  Borrowing Base shall be an amount at least equal to
the  remainder  of (i) the  Total  Utilization  MINUS  (ii)  the  aggregate
principal amount  of the Pool B Indebtedness.  Upon receipt by the Agent of
such notice or upon  a  mandatory removal pursuant to subsection 6.11E, the
specified Pool A Property  shall  be  a  Removed  Pool  A  Property for all
purposes  of  this Agreement and shall be excluded from the calculation  of
the Borrowing Base unless, in the case of a voluntary removal, the Borrower
elects to again  designate  such  Pool A  Property  as  a Designated Pool A
Property  pursuant  to  subsection 2.9C, but such Removed Pool  A  Property
shall remain a Pool A Property  for  all  purposes of this Agreement unless
such Property is Released pursuant to subsection 2.10.

     E.   ATLANTA  PROPERTY.   Notwithstanding   anything   herein  to  the
contrary,  the  Atlanta  Property  shall cease to be a Pool A Property  and
shall become a Pool B Property, in each  case  for  all purposes under this
Agreement,  immediately  upon  the earliest to occur of  (i)  the  payment,
discharge, cancellation or transfer  (other than pursuant to this Agreement
and the other Loan Documents) of the Atlanta  Note, (ii) the failure of the
Atlanta Note to constitute a legally valid and  binding  obligation  of the
Atlanta  Airport  Partnership,  except  as  may  be  limited by bankruptcy,
insolvency,  reorganization,  moratorium  or similar laws  relating  to  or
limiting creditors' rights generally, and by  general  principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity  or  law),  (iii)  the  existence  or assertion of any  defenses  to
payment, counterclaims with respect to the  Note  or  any  right of set-off
against  any  payment  due  thereunder,  (iv)  the  failure of the  Atlanta
Mortgage to be a perfected, valid and enforceable first  priority  Lien  on
the Atlanta Property and (v) the failure of the Atlanta Airport Property to
be  free and clear of all Liens having priority over the first Lien of such
Mortgage, except for Permitted Encumbrances.

     F.   ADDITION  OF MBL PROPERTIES.  The Agent, each Lender, CapStar and
the Borrower hereby agree that if the Borrower, on or prior to December 17,
1996,  (i) delivers  each   item  required  to  be  delivered  pursuant  to
subsection 2.9A with respect to any of the MBL Properties and (ii) deposits
in the Deferred Maintenance Account or establishes a reserve as provided in
the definition of Total Utilization  in an amount not less than $391,750 in
the aggregate (which amount is the sum  of  the subtotals of the amounts in
the columns in SCHEDULE 6.16B annexed hereto  entitled  ``Immediate Repairs
of  Deferred Items'' and ``Immediate Repairs of ADA Items'',  respectively,
with  respect to the MBL Properties), which amount shall be allocated among
the MBL  Properties  as provided on SCHEDULE 6.16B, then the Agent and each
Lender shall be deemed  to  have approved the addition of such MBL Property
as an Additional Pool A Property pursuant to subsection 2.9A.

     G.   VIRGINIA LOAN.  Immediately  prior  to  the  sale of the Virginia
Loan to the Lenders as herein contemplated, CapStar will have good title to
the Virginia Loan, free and clear of all Liens, and will  be the sole owner
thereof,  with full power and authority to sell the Virginia  Loan  to  the
Lenders.  Upon  the transfer of the Virginia Loan to the Lenders, as herein
contemplated, the  Lenders will own the Virginia Loan free and clear of any
Lien thereon created  by  or  through either CapStar or any predecessor-in-
interest of CapStar.  Immediately  prior  to  the  sale and transfer of the
Virginia Loan to the Lenders, the aggregate outstanding  principal  balance
of the Virginia Loan is not less than $17,000,000.

2.10 RELEASES OF POOL A PROPERTIES AND OTHER COLLATERAL.

     A.   POOL A  PROPERTIES.  At any time and from time to time after  the
Closing Date, in connection with the sale or other permanent disposition of
any Pool A Property,  the  Borrower may obtain a Release of the Lien of the
Security Documents in respect  of  all,  but except as provided below not a
portion  of,  such Pool A Property, subject  to  the  following  terms  and
conditions on the applicable Release Date:

          (i)  the  Borrower  shall  have  delivered  written notice to the
     Agent  (a) not  less  than  30  days  (or  such shorter period  as  is
     acceptable to the Agent) prior to the proposed Release Date specifying
     the proposed Release Date and such Pool A Property  and  (b) not  less
     than  5  days  (or  such shorter period as is acceptable to the Agent)
     prior to the actual Release  Date  specifying such actual Release Date
     and such Pool A Property;

         (ii)  no Event of Default shall have occurred and be continuing as
     of the date of the delivery of the notice pursuant to clause (i) above
     (other than an Event of Default or Potential  Event  of  Default  that
     pertains solely to the Pool A Property or portion thereof which is the
     subject  of  such  Release  or  which is cured by such Release) and no
     Event of Default shall be continuing  as  of  the  Release  Date after
     giving effect to such Release;

        (iii)  concurrently with such Release, the Borrowing Base  shall be
     reduced by an amount equal to the then applicable Property Amount with
     respect to such Pool A Property in effect immediately prior to  giving
     effect to such Release;

         (iv)  the  Borrower  shall  concurrently  prepay  the  Loans in an
     amount equal to the Release Price in respect of such Pool A Property;

          (v)  the   Borrower   shall  have  delivered  to  the  Agent  for
     distribution to the Lenders  (a)  an  Officers'  Certificate dated the
     Release Date, certifying as to the matters referred to in clauses (ii)
     and  (iv)  above and (b) a Borrowing Base Certificate,  in  reasonable
     detail satisfactory  to  the  Agent  and  together  with the financial
     statements and other information utilized by CapStar  and the Borrower
     to calculate the Borrowing Base, and certified by the Chief  Executive
     Officer  or  Chief  Financial  Officer  of  CapStar  and the Borrower,
     calculated  as of the Release Date and giving effect to  the  Release,
     and demonstrating  that  Total  Utilization  (excluding  the aggregate
     principal amount of Pool B Indebtedness) does not exceed the Borrowing
     Base and that, without giving effect to the limitations in  subsection
     2.1  with  respect to the frequency and minimum amounts of borrowings,
     the Borrower  would  then be entitled to make a borrowing in an amount
     not less than $1.00;

         (vi)  the Borrower,  at  its  sole  cost  and  expense, shall have
     (a) with respect to any partial Release of the Lien  of  the  Security
     Documents  in respect of such Pool A Property, delivered to the  Agent
     one or more endorsements to the Title Policy in respect of such Pool A
     Property delivered  to the Agent on the date hereof and, to the extent
     generally available in  each state, insuring that, after giving effect
     to such partial Release and with respect to the portion of such Pool A
     Property  which  is not being  Released,  the  Liens  created  by  the
     applicable Mortgage  and  insured  under  the such Title Policy are in
     full  force  and  effect  and  unaffected  by  such  partial  Release,
     (b) prepared any and all documents and instruments necessary to effect
     such  Release, all of which shall be reasonably satisfactory  in  form
     and substance  to  the  Agent,  and  (c) paid  all  costs and expenses
     incurred by the Agent and its counsel in connection with  the  review,
     execution  and  delivery  of  the  release  documents; PROVIDED that a
     partial Release shall only be permitted hereunder  in  the  event of a
     partial condemnation of the applicable Pool A Property; and

        (vii)  all  other  proceedings  taken  or to be taken in connection
     with  such  Release  and  all documents incidental  thereto  shall  be
     reasonably satisfactory in  form  and  substance  to the Agent and the
     Agent's  counsel, the Agent and such counsel shall have  received  all
     such counterpart  originals  or  certified copies of such documents as
     the Agent may reasonably request and  counsel for the Agent shall have
     received such documents and evidence that  such  counsel shall require
     in order to establish compliance with the conditions set forth in this
     subsection.

The Borrower may obtain a Release of the Lien of the Security  Documents in
respect  of a portion of any Pool A Property, if title to such portion  has
been  permanently   Taken,  by  complying  with  the  foregoing  terms  and
conditions on the applicable Release Date.

     B.   OTHER COLLATERAL.   At  any  time and from time to time after the
Closing Date, in connection with the sale or other permanent disposition of
any other item of Collateral that is not  subject  to subsection 2.10A, the
Borrower  may  obtain  a Release of the Lien of the Security  Documents  in
respect of such other item  of  the  Collateral  that  is  not  subject  to
subsection  2.10A,  subject  to  the  following terms and conditions on the
applicable Release Date:

          (i)  the Company shall have delivered written notice to the Agent
     not less than 5 days prior to proposed  Release  Date  specifying  the
     proposed  Release Date and such other item of Collateral to the extent
     practical;

         (ii)  no Event of Default shall have occurred and be continuing as
     of the date of the delivery of the notice pursuant to clause (i) above
     (other than an Event of Default that pertains solely to the other item
     of Collateral  which  is the subject of such Release or which is cured
     by such Release) and no Event of Default shall be continuing as of the
     Release Date after giving effect to such Release;

        (iii)  the Borrower shall have prepaid the Loans in an amount equal
     to the Release Price, if  any,  in  respect  of  such  other  item  of
     Collateral as the case may be;

         (iv)  if  such  item  of Collateral is not being sold or otherwise
     permanently  disposed of in  the  ordinary  course  of  business,  the
     Company shall  have  delivered  to  the Agent an Officers' Certificate
     dated the Release Date, certifying as  to  the  matters referred to in
     clauses (ii) and (iii) above;

          (v)  the  Borrower,  at  its  sole cost and expense,  shall  have
     (a) prepared any and all documents and instruments necessary to effect
     such Release, all of which shall be  reasonably  satisfactory  in form
     and  substance  to  the  Agent,  and (b) paid all reasonable costs and
     expenses incurred by the Agent and  its counsel in connection with the
     review, execution and delivery of the release documents; and

         (vi)  all other proceedings taken  or  to  be  taken in connection
     with  such  Release  and  all  documents incidental thereto  shall  be
     reasonably satisfactory in form  and  substance  to  the Agent and the
     Agent's  counsel, the Agent and such counsel shall have  received  all
     such counterpart  originals  or  certified copies of such documents as
     the Agent may reasonably request and  counsel for the Agent shall have
     received  such  documents  and  evidence  that   such   counsel  shall
     reasonably   require  in  order  to  establish  compliance  with   the
     conditions set forth in this subsection.

The failure of the Borrower to obtain a Release in respect of any such item
of Collateral that  is  not  subject to subsection 2.10A shall not restrict
the right of the Loan Parties  and  their Subsidiaries to sell or otherwise
permanently dispose of such items pursuant to this Agreement, and each such
item  of  Collateral  sold or otherwise  permanently  disposed  of  in  the
ordinary course of business  and  in accordance with clauses (ii) and (iii)
of the preceding sentence shall be deemed to have been so Released.

     C.   EFFECT  OF  RELEASE.  Except   with   respect  to  a  Release  in
connection  with a sale and leaseback transaction  pursuant  to  subsection
7.11, upon any  Release of any Pool A Property or other items of Collateral
in accordance with  this  subsection 2.9, such property shall cease to be a
Property or other item of Collateral  for  the  purposes  of this Agreement
(other than for purposes of any indemnity contained herein or in any of the
other  Loan  Documents to the extent such indemnification applies  to  such
Property).

     D.   REVISED  SCHEDULES.   On  or  prior to each Release, the Borrower
shall deliver to the Agent revised Schedules  to  this  Agreement  and  the
other  Loan  Documents,  as  applicable,  reflecting  the  Release  of  any
Property,  or  other  item  of  Collateral pursuant to this subsection 2.9,
which Schedules shall be reasonably satisfactory to the Agent.


                             SECTION 3
                         LETTERS OF CREDIT

3.1  ISSUANCE OF LETTERS OF CREDIT  AND LENDERS' PURCHASE OF PARTICIPATIONS
     THEREIN.

     A.   LETTERS OF CREDIT.  In addition  to  the Borrower requesting that
the  Lenders  make  Loans  pursuant to subsection 2.1B,  the  Borrower  may
request, in accordance with  the  provisions  of  this subsection 3.1, from
time to time during the period from the Closing Date  to  but excluding the
third Anniversary that one or more Lenders issue Letters of  Credit for the
account  of  the Borrower for the purposes specified in the definitions  of
Commercial Letters  of  Credit and Standby Letters of Credit and such other
general corporate purposes as may, in any instance, be approved in advance,
in writing, by the Agent.   Subject  to  the  terms  and conditions of this
Agreement and in reliance upon the representations and  warranties  of  the
Borrower  herein  set  forth,  any  one or more Lenders may, but (except as
provided in subsection 3.1B(ii)) shall  not  be  obligated  to,  issue such
Letters of Credit in accordance with the provisions of this subsection 3.1;
PROVIDED that the Borrower shall not request that any Lender issue  (and no
Lender shall issue):

          (i)  any  Letter  of  Credit  if,  after  giving  effect  to such
     issuance, (a) the Total Utilization (excluding the aggregate principal
     amount  of  Pool  B  Indebtedness)  would  exceed  the  lesser  of the
     Commitments  then  in  effect  and the Borrowing Base or (b) the Total
     Utilization would exceed the Commitments then in effect;

         (ii)  any  Letter  of  Credit if,  after  giving  effect  to  such
     issuance, the Letter of Credit Usage would exceed $10,000,000;

        (iii)  any Standby Letter of Credit having an expiration date later
     than the earlier of (a) the  third  Anniversary and (b) the date which
     is  one  year from the date of issuance  of  such  Standby  Letter  of
     Credit; PROVIDED  that  the immediately preceding clause (b) shall not
     prevent any Issuing Lender  from  agreeing  that  a  Standby Letter of
     Credit  will  automatically  be  extended  for one or more  successive
     periods not to exceed one year each unless such  Issuing Lender elects
     not  to extend for any such additional period; and  PROVIDED  FURTHER,
     that such Issuing Lender shall elect not to extend such Standby Letter
     of Credit  if  it  has knowledge that an Event of Default has occurred
     and  is  continuing (and  has  not  been  waived  in  accordance  with
     subsection  9.6) at the time such Issuing Lender must elect whether or
     not to allow such extension;

         (iv)  any  Commercial  Letter  of Credit having an expiration date
     (a) later than the earlier of (x) the  date  which is 30 days prior to
     the third Anniversary and (y) the date which is 180 days from the date
     of  issuance  of  such  Commercial  Letter of Credit  or  (b) that  is
     otherwise  unacceptable  to  the  applicable  Issuing  Lender  in  its
     reasonable discretion; or

          (v)  any Letter of Credit denominated  in  a  currency other than
     Dollars.

     B.   MECHANICS OF ISSUANCE.

          (i)  NOTICE  OF  ISSUANCE.   Whenever  the Borrower  desires  the
     issuance of a Letter of Credit, it shall deliver  to Agent a Notice of
     Issuance of Letter of Credit substantially in the form  of  EXHIBIT IV
     annexed hereto no later than 12:00 Noon (New York City time)  at least
     five Business Days, or such shorter period as may be agreed to  by the
     Issuing  Lender in any particular instance, in advance of the proposed
     date of issuance.   Each  Notice of Issuance of Letter of Credit shall
     contain the information indicated  on the form thereof attached hereto
     as EXHIBIT IV; PROVIDED that the Issuing  Lender,  in  its  reasonable
     discretion, may require changes in the text of the proposed Letter  of
     Credit  or any such documents; and PROVIDED FURTHER, that no Letter of
     Credit shall  require  payment  against  a conforming draft to be made
     thereunder  on  the  same  business  day  (under   the   laws  of  the
     jurisdiction in which the office of the Issuing Lender to  which  such
     draft  is  required  to  be  presented  is located) that such draft is
     presented if such presentation is made after  10:00  A.M. (in the time
     zone of such office of the Issuing Lender) on such business day.

     The  Borrower  shall  notify  the applicable Issuing Lender  (and  the
     Agent, if the Agent is not such  Issuing Lender) prior to the issuance
     of any Letter of Credit in the event  that any of the matters to which
     the  Borrower  is  required to certify in  the  applicable  Notice  of
     Issuance of Letter of  Credit  is no longer true and correct as of the
     proposed date of issuance of such  Letter  of  Credit,  and  upon  the
     issuance  of any Letter of Credit the Borrower shall be deemed to have
     re-certified,  as  of  the date of such issuance, as to the matters to
     which the Borrower is required  to certify in the applicable Notice of
     Issuance of Letter of Credit.

         (ii)  DETERMINATION OF ISSUING  LENDER.  Upon receipt by the Agent
     of a Notice of Issuance of Letter of  Credit  pursuant  to  subsection
     3.1B(i)  requesting  the issuance of a Letter of Credit, in the  event
     the Agent elects to issue  such  Letter  of  Credit,  the  Agent shall
     promptly  so  notify the Borrower, and the Agent shall be the  Issuing
     Lender with respect thereto.  In the event that the Agent, in its sole
     discretion, elects not to issue such Letter of Credit, the Agent shall
     promptly so notify  the  Borrower,  whereupon the Borrower may request
     any other Lender to issue such Letter  of Credit by delivering to such
     Lender  a  copy  of the applicable Notice of  Issuance  of  Letter  of
     Credit.  Any Lender  so requested to issue such Letter of Credit shall
     promptly notify the Borrower and the Agent whether or not, in its sole
     discretion, it has elected  to  issue  such  Letter of Credit, and any
     such Lender which so elects to issue such Letter  of  Credit  shall be
     the  Issuing Lender with respect thereto.  In the event that at  least
     two other  Lenders shall have declined to issue such Letter of Credit,
     notwithstanding  the  prior  election  of  the Agent not to issue such
     Letter of Credit, the Agent shall be obligated to issue such Letter of
     Credit  and  shall  be  the  Issuing  Lender  with   respect  thereto,
     notwithstanding the fact that the Letter of Credit Usage  with respect
     to  such  Letter  of  Credit and with respect to all other Letters  of
     Credit  issued  by  the  Agent,   when  aggregated  with  the  Agent's
     outstanding Loans may exceed the Agent's Commitment then in effect.

        (iii)  ISSUANCE OF LETTER OF CREDIT.   Upon  satisfaction or waiver
     (in  accordance with subsection 9.6) of the conditions  set  forth  in
     subsection 4.3, the Issuing Lender shall issue the requested Letter of
     Credit  in  accordance  with  the  Issuing Lender's standard operating
     procedures.

         (iv)  NOTIFICATION TO LENDERS.   Upon the issuance or amendment of
     any  Standby  Letter of Credit, the applicable  Issuing  Lender  shall
     promptly notify  the  Agent  and each other Lender of such issuance or
     amendment, which notice shall be accompanied by a copy of such Standby
     Letter of Credit or amendment.   Promptly after receipt of such notice
     (or, if the Agent is the Issuing Lender,  together  with such notice),
     the  Agent  shall  notify  each Lender of the amount of such  Lender's
     respective participation in  such Standby Letter of Credit, determined
     in accordance with subsection 3.1C.

          (v)  REPORTS TO LENDERS.   Within  15  days after the end of each
     month ending after the Closing Date, so long  as any Commercial Letter
     of Credit shall have been outstanding during such  month, each Issuing
     Lender shall deliver to each other Lender a report setting  forth  for
     such  month the daily aggregate amount available to be drawn under the
     Commercial  Letters  of Credit issued by such Issuing Lender that were
     outstanding during such month.

     C.   LENDERS'  PURCHASE   OF  PARTICIPATIONS  IN  LETTERS  OF  CREDIT.
Immediately upon the issuance of  each  Letter of Credit, each Lender shall
be deemed to, and hereby agrees to, have  irrevocably  purchased  from  the
Issuing  Lender  a  participation in such Letter of Credit and any drawings
honored thereunder in  an  amount  equal to such Lender's Pro Rata Share of
the maximum amount which is or at any time may become available to be drawn
thereunder.

3.2  LETTER OF CREDIT FEES.

          The Borrower agrees to pay  the following amounts with respect to
Letters of Credit issued hereunder:

          (i)  with respect to each Letter  of  Credit, (a) a fronting fee,
     if any, payable directly to the applicable Issuing  Lender for its own
     account,  equal  to the amount specified by written agreement  between
     the Borrower and such  Issuing Lender; and (b) a letter of credit fee,
     payable to Agent for the  account of Lenders, equal to 2.00% per annum
     of the daily amount available to be drawn under such Letter of Credit,
     each such fronting fee or letter  of  credit  fee  to  be  payable  in
     arrears on and to (but excluding) each March 15, June 15, September 15
     and  December  15  of each year and computed on the basis of a 360-day
     year for the actual number of days elapsed; and

         (ii)  with respect  to the issuance, amendment or transfer of each
     Letter  of  Credit and each  payment  of  a  drawing  made  thereunder
     (without duplication  of  the  fees  payable  under clause (i) above),
     documentary and processing charges payable directly  to the applicable
     Issuing  Lender  for its own account in accordance with  such  Issuing
     Lender's standard  schedule  for such charges in effect at the time of
     such issuance, amendment, transfer or payment, as the case may be.

For  purposes of calculating any fees  payable  under  clause (i)  of  this
subsection  3.2, the daily amount available to be drawn under any Letter of
Credit shall  be  determined  as  of  the  close of business on any date of
determination.  Promptly upon receipt by the  Agent of any amount described
in clause (i)(b) of this subsection 3.2, the Agent shall distribute to each
Lender its Pro Rata Share of such amount.

3.3  DRAWINGS AND REIMBURSEMENT OF AMOUNTS PAID UNDER LETTERS OF CREDIT.

     A.   RESPONSIBILITY OF ISSUING LENDER WITH  RESPECT  TO  DRAWINGS.  In
determining whether to honor any drawing under any Letter of Credit  by the
beneficiary  thereof,  the  Issuing  Lender  shall  be  responsible only to
examine the documents delivered under such Letter of Credit with reasonable
care  so  as  to  ascertain  whether  they appear on their face  to  be  in
accordance with the terms and conditions of such Letter of Credit.

     B.   REIMBURSEMENT BY THE BORROWER  OF  AMOUNTS  PAID UNDER LETTERS OF
CREDIT.  In the event an Issuing Lender has determined  to  honor a drawing
under  a  Letter  of  Credit  issued  by  it,  such  Issuing  Lender  shall
immediately  notify  the  Borrower  and  the  Agent, and the Borrower shall
reimburse  such Issuing Lender on or before the  Business  Day  immediately
following the  date  on  which such drawing is honored (the ``REIMBURSEMENT
DATE'') in an amount in Dollars  and  in same day funds equal to the amount
of  such  honored  drawing;  PROVIDED  that,  anything  contained  in  this
Agreement to the contrary notwithstanding,  (i) unless  the  Borrower shall
have  notified the Agent and such Issuing Lender prior to 10:00  A.M.  (New
York City  time)  on the date such drawing is honored that Borrower intends
to reimburse such Issuing  Lender  for  the  amount of such honored drawing
with funds other than the proceeds of Loans, the  Borrower  shall be deemed
to have given a timely Notice of Borrowing to the Agent requesting  Lenders
to  make  Loans  that  are  Base Rate Loans on the Reimbursement Date in an
amount  in  Dollars  equal  to the  amount  of  such  honored  drawing  and
(ii) subject to satisfaction  or  waiver  of  the  conditions  specified in
subsection  4.2B, the Lenders shall, on the Reimbursement Date, make  Loans
that are Base  Rate  Loans  in  the  amount  of  such  honored drawing, the
proceeds of which shall be applied directly by the Agent  to reimburse such
Issuing Lender for the amount of such honored drawing; and PROVIDED FURTHER
that if for any reason proceeds of Loans are not received by  such  Issuing
Lender  on the Reimbursement Date in an amount equal to the amount of  such
honored drawing,  the  Borrower  shall  reimburse  such  Issuing Lender, on
demand, in an amount in same day funds equal to the excess of the amount of
such honored drawing over the aggregate amount of such Loans, if any, which
are  so  received.   Nothing  in  this subsection 3.3B shall be  deemed  to
relieve any Lender from its obligation  to  make  Loans  on  the  terms and
conditions  set forth in this Agreement, and the Borrower shall retain  any
and all rights it may have against any Lender resulting from the failure of
such Lender to make such Loans under this subsection 3.3B.

     C.   PAYMENT BY THE LENDERS OF UNREIMBURSED AMOUNTS PAID UNDER LETTERS
OF CREDIT.

          (i)  PAYMENT  BY  THE  LENDERS.   In  the event that the Borrower
     shall fail for any reason to reimburse any Issuing  Lender as provided
     in  subsection  3.3B in an amount equal to the amount of  any  drawing
     honored by such Issuing  Lender under a Letter of Credit issued by it,
     such Issuing Lender shall  promptly  notify  each  other Lender of the
     unreimbursed amount of such honored drawing and of such other Lender's
     respective  participation  therein  based  on such Lender's  Pro  Rata
     Share.  Each Lender shall make available to  such  Issuing  Lender  an
     amount  equal  to its respective participation, in Dollars and in same
     day funds, at the  office  of  such  Issuing  Lender specified in such
     notice, not later than 12:00 Noon (New York City  time)  on  the first
     business day (under the laws of the jurisdiction in which such  office
     of  such  Issuing  Lender  is located) after the date notified by such
     Issuing Lender.  In the event  that any Lender fails to make available
     to  such  Issuing  Lender on such business  day  the  amount  of  such
     Lender's participation  in  such  Letter of Credit as provided in this
     subsection 3.3C, such Issuing Lender shall be entitled to recover such
     amount on demand from such Lender together  with  interest  thereon at
     the   Federal  Funds  Effective  Rate  for  three  Business  Days  and
     thereafter at the Base Rate.  Nothing in this subsection 3.3C shall be
     deemed  to  prejudice  the  right  of  any  Lender to recover from any
     Issuing  Lender  any amounts made available by  such  Lender  to  such
     Issuing Lender pursuant  to  this subsection 3.3C in the event that it
     is  determined  by  the  final  judgment   of  a  court  of  competent
     jurisdiction that the payment with respect to  a  Letter  of Credit by
     such  Issuing  Lender  in  respect  of which payment was made by  such
     Lender  constituted bad faith or recklessness  on  the  part  of  such
     Issuing Lender.

         (ii)  DISTRIBUTION  TO THE LENDERS OF REIMBURSEMENTS RECEIVED FROM
     THE  BORROWER.   In the event  any  Issuing  Lender  shall  have  been
     reimbursed by other  Lenders pursuant to subsection 3.3C(i) for all or
     any portion of any drawing  honored  by  such  Issuing  Lender under a
     Letter of Credit issued by it, such Issuing Lender shall distribute to
     each  other  Lender  which  has  paid all amounts payable by it  under
     subsection 3.3C(i) with respect to  such  honored  drawing  such other
     Lender's proportionate share of all payments subsequently received  by
     such Issuing Lender from the Borrower in reimbursement of such honored
     drawing  when such payments are received.  Any such distribution shall
     be made to a Lender at its primary address set forth below its name on
     the appropriate signature page hereof or at such other address as such
     Lender may request.

     D.   INTEREST ON AMOUNTS PAID UNDER LETTERS OF CREDIT.

          (i)  PAYMENT OF INTEREST BY THE BORROWER.  The Borrower agrees to
     pay to each Issuing Lender, with respect to drawings honored under any
     Letters of  Credit  issued  by it, interest on the amount paid by such
     Issuing Lender in respect of  each  such honored drawing from the date
     such  drawing is honored to but excluding  the  date  such  amount  is
     reimbursed  by  the  Borrower (including any such reimbursement out of
     the proceeds of Loans pursuant to subsection 3.3B) at a per annum rate
     equal to the sum of the  Base Rate PLUS 1%.  Interest payable pursuant
     to this subsection 3.3D(i) shall be computed on the basis of a 360-day
     year for the actual number  of days elapsed in the period during which
     it accrues and shall be payable on demand or, if no demand is made, on
     the date on which the related  drawing  under  a  Letter  of Credit is
     reimbursed in full.

         (ii)  DISTRIBUTION   OF   INTEREST  PAYMENTS  BY  ISSUING  LENDER.
     Promptly upon receipt by any Issuing Lender of any payment of interest
     pursuant to subsection 3.3D(i) with respect to a drawing honored under
     a  Letter  of  Credit  issued by it,  (a) such  Issuing  Lender  shall
     distribute to each other  Lender, out of the interest received by such
     Issuing Lender in respect of  the period from the date such drawing is
     honored to but excluding the date  on  which  such  Issuing  Lender is
     reimbursed  for  the  amount  of  such  drawing  (including  any  such
     reimbursement  out  of  the  proceeds  of Loans pursuant to subsection
     3.3B), the amount that such other Lender  would  have been entitled to
     receive in respect of the letter of credit fee that  would  have  been
     payable  in  respect of such Letter of Credit for such period pursuant
     to subsection  3.2 if no drawing had been honored under such Letter of
     Credit, and (b) in  the  event  such  Issuing  Lender  shall have been
     reimbursed by other Lenders pursuant to subsection 3.3C(i)  for all or
     any  portion  of  such  honored  drawing,  such  Issuing  Lender shall
     distribute to each other Lender which has paid all amounts  payable by
     it under subsection 3.3C(i) with respect to such honored drawing  such
     other  Lender's  proportionate  share of any interest received by such
     Issuing Lender in respect of that  portion  of such honored drawing so
     reimbursed by other Lenders for the period from the date on which such
     Issuing Lender was so reimbursed by such other Lender to but excluding
     the date on which such portion of such honored  drawing  is reimbursed
     by the Borrower.  Any such distribution shall be made to a  Lender  at
     its  primary  address  set  forth  below  its  name on the appropriate
     signature  page  hereof or at such other address as  such  Lender  may
     request.

3.4  OBLIGATIONS ABSOLUTE.

          The obligation  of  the Borrower to reimburse each Issuing Lender
for drawings honored under the  Letters of Credit issued by it and to repay
any  Loans  made  by  the  Lenders pursuant  to  subsection  3.3B  and  the
obligations of Lenders under  subsection 3.3C(i) shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances including, without limitation, any of the
following circumstances:

          (i)  any lack of validity  or  enforceability  of  any  Letter of
     Credit;

         (ii)  the existence of any claim, set-off, defense or other  right
     which  the   Borrower  or  any  Lender  may have at any time against a
     beneficiary or any transferee of any Letter  of Credit (or any Persons
     for  whom any such transferee may be acting), any  Issuing  Lender  or
     other  Lender or any other Person or, in the case of a Lender, against
     the  Borrower,   whether   in  connection  with  this  Agreement,  the
     transactions  contemplated  herein   or   any   unrelated  transaction
     (including any underlying transaction between the  Borrower  or one of
     its  Subsidiaries  and  the beneficiary for which any Letter of Credit
     was procured);

        (iii)  any draft or other  document  presented  under any Letter of
     Credit  proving to be forged, fraudulent, invalid or  insufficient  in
     any respect or any statement therein being untrue or inaccurate in any
     respect;

         (iv)  payment by the applicable Issuing Lender under any Letter of
     Credit against  presentation  of  a draft or other document which does
     not substantially comply with the terms of such Letter of Credit;

          (v)  any adverse change in the  business, operations, properties,
     assets, condition (financial or otherwise)  or  prospects  of CapStar,
     the Borrower or any of their respective Subsidiaries;
         (vi)  any  breach of this Agreement or any other Loan Document  by
     any party thereto;

        (vii)  any other  circumstance  or happening whatsoever, whether or
     not similar to any of the foregoing; or

       (viii)  the fact that an Event of  Default  or  a Potential Event of
     Default shall have occurred and be continuing;

PROVIDED, in each case, that payment by the applicable Issuing Lender under
the  applicable Letter of Credit shall not have constituted  bad  faith  or
recklessness of such Issuing Lender under the circumstances in question (as
determined by a final judgment of a court of competent jurisdiction).

3.5  INDEMNIFICATION; NATURE OF ISSUING LENDERS' DUTIES.

     A.   INDEMNIFICATION.   In  addition to amounts payable as provided in
subsection 3.6,  the Borrower hereby  agrees to protect, indemnify, pay and
save harmless each Issuing Lender from  and  against  any  and  all losses,
claims,  damages,  liabilities, costs or expenses (including the reasonable
fees, charges and disbursements  of  counsel  and  the  allocated costs and
expenses  of internal counsel) which such Issuing Lender may  incur  or  be
subject to as a consequence, direct or indirect, of (i) the issuance of any
Letter of Credit  by such Issuing Lender, other than as a result of (a) the
bad faith or recklessness  of  such Issuing Lender as determined by a final
judgment  of  a  court of competent  jurisdiction  or  (b) subject  to  the
following clause (ii),  the  wrongful  dishonor by such Issuing Lender of a
proper demand for payment made under any  Letter  of Credit issued by it or
(ii) the failure of such Issuing Lender to honor a  drawing  under any such
Letter  of  Credit as a result of any act or omission, whether rightful  or
wrongful, of  any  present  or  future  de  jure  or de facto government or
governmental   authority  (all  such  acts  or  omissions   herein   called
``GOVERNMENTAL ACTS'').

     B.   NATURE  OF  ISSUING LENDERS' DUTIES.  As between the Borrower and
any  Issuing Lender, the  Borrower  assumes  all  risks  of  the  acts  and
omissions  of,  or  misuse  of the Letters of Credit issued by such Issuing
Lender by, the respective beneficiaries  of  such  Letters  of  Credit.  In
furtherance  and  not  in limitation of the foregoing, such Issuing  Lender
shall  not  be  responsible  for:   (i) the  form,  validity,  sufficiency,
accuracy, genuineness  or  legal  effect  of  any document submitted by any
party  in  connection with the application for and  issuance  of  any  such
Letter of Credit,  even  if  it  should  in  fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent  or forged; (ii) the
validity  or  sufficiency  of any instrument transferring or  assigning  or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds  thereof,  in  whole  or in part, which may
prove  to  be invalid or ineffective for any reason; (iii) failure  of  the
beneficiary  of  any  such  Letter  of  Credit  to  comply  fully  with any
conditions   required  in  order  to  draw  upon  such  Letter  of  Credit;
(iv) errors, omissions, interruptions or delays in transmission or delivery
of  any messages,  by  mail,  telefacsimile,  cable,  telegraph,  telex  or
otherwise,  whether  or not they be in cipher; (v) errors in interpretation
of technical terms; (vi) any loss or delay in the transmission or otherwise
of any document required  in  order to make a drawing under any such Letter
of  Credit  or of the proceeds thereof;  (vii) the  misapplication  by  the
beneficiary of  any  such  Letter  of Credit of the proceeds of any drawing
under such Letter of Credit; or (viii) any consequences arising from causes
beyond the control of such Issuing Lender, including without limitation any
Governmental Acts, and none of the above shall affect or impair, or prevent
the vesting of, any of such Issuing Lender's rights or powers hereunder.

          In  furtherance  and extension  and  not  in  limitation  of  the
specific provisions set forth  in  the  first  paragraph of this subsection
3.5B,  any  action  taken  or omitted by any Issuing  Lender  under  or  in
connection with the Letters  of  Credit  issued  by it or any documents and
certificates delivered thereunder, if taken or omitted in good faith, shall
not put such Issuing Lender under any resulting liability to the Borrower.

          Notwithstanding  anything  to  the  contrary  contained  in  this
subsection 3.5, the Borrower shall retain any and  all  rights  it may have
against any Issuing Lender to the extent such liability arises out  of  the
bad  faith or recklessness of such Issuing Lender, as determined by a final
judgment of a court of competent jurisdiction.

3.6  INCREASED COSTS AND TAXES RELATING TO LETTERS OF CREDIT.

          Subject  to  the  provisions  of  subsection 2.7B (which shall be
controlling with respect to the matters covered thereby), in the event that
any  Issuing  Lender  or  Lender  shall  in  good  faith  determine  (which
determination  shall, absent manifest error, be final  and  conclusive  and
binding upon all  parties  hereto but shall be made only after consultation
with the Agent) that any law,  treaty  or  governmental rule, regulation or
order,  or any change therein or in the interpretation,  administration  or
application  thereof  (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
governmental authority,  in each case that becomes effective after the date
hereof, or compliance by any  Issuing  Lender or Lender with any guideline,
request or directive issued or made after  the  date  hereof by any central
bank or other governmental or quasi-governmental authority  (whether or not
having the force of law):

          (i)  subjects  such  Issuing Lender or Lender (or its  applicable
     lending or letter of credit  office) to any additional Tax (other than
     any Tax on the overall net income  of  such  Issuing Lender or Lender)
     with respect to the issuing or maintaining of any Letters of Credit or
     the  purchasing or maintaining of any participations  therein  or  any
     other  obligations  under  this Section 3, whether directly or by such
     being imposed on or suffered by any particular Issuing Lender;

         (ii)  imposes, modifies or holds applicable any reserve (including
     without limitation any marginal,  emergency,  supplemental, special or
     other reserve), special deposit, compulsory loan,  FDIC  insurance  or
     similar  requirement in respect of any Letters of Credit issued by any
     Issuing Lender or participations therein purchased by any Lender; or

        (iii)  imposes  any  other  condition (other than with respect to a
     Tax matter) on or affecting such  Issuing  Lender  or  Lender  (or its
     applicable  lending or letter of credit office) regarding this Section
     3 or any Letter of Credit or any participation therein;

and the result of  any  of  the  foregoing  is to increase the cost to such
Issuing Lender or Lender of agreeing to issue,  issuing  or maintaining any
Letter  of  Credit  or agreeing to purchase, purchasing or maintaining  any
participation therein  or  to  reduce  any amount received or receivable by
such  Issuing  Lender or Lender (or its applicable  lending  or  letter  of
credit office) with  respect thereto; then, in any case, the Borrower shall
promptly  pay  to such Issuing  Lender  or  Lender,  upon  receipt  of  the
statement referred  to  in  the  next  sentence,  such additional amount or
amounts as may be necessary to compensate such Issuing Lender or Lender for
any  such  increased  cost or reduction in amounts received  or  receivable
hereunder.  Such Issuing  Lender  or Lender shall deliver to the Borrower a
written statement within 120 days of such Lender obtaining knowledge of the
occurrence  of  any  event resulting in  such  Lender's  right  to  receive
compensation hereunder,  setting  forth  in reasonable detail the basis for
calculating the additional amounts owed to  such  Issuing  Lender or Lender
under this subsection 3.6, which statement shall be conclusive  and binding
upon all parties hereto absent manifest error.


                             SECTION 4
                       CONDITIONS PRECEDENT

4.1  CONDITIONS TO EFFECTIVENESS OF COMMITMENTS.

     The  effectiveness  of  the  Commitments of the Lenders is conditioned
upon the prior or concurrent satisfaction,  at the expense of the Borrower,
of the conditions specified in subsection 4.2  and  in this subsection 4.1,
in each case as determined by the Agent:

     A.   CORPORATE DOCUMENTS.  Each Loan Party (other than any Partnership
Loan  Party  or  LLC Loan Party) and each corporate general  partner  of  a
Partnership Loan Party  shall deliver or cause to be delivered to the Agent
(with sufficient originally executed copies for each Lender and the Agent's
counsel) the following, each unless otherwise noted dated the Closing Date:

          (i)  to the extent  such  Loan Party is a party thereto, executed
     originals  of  this Agreement, the  Affiliate  Guaranty,  the  CapStar
     Guaranty, the Security  Agreement,  and  each  other  Loan Document to
     which it is a party;

         (ii)  certified   copies  of  its  Certificate  of  Incorporation,
     together  with a good standing  certificate  (including  verification,
     where generally available, of tax good standing) from the Secretary of
     State (or similar  official)  of its jurisdiction of incorporation and
     each other state in which a Property  owned  or  leased  by  such Loan
     Party  is  located),  each  dated  not  more  than 7 days prior to the
     Closing Date;

        (iii)  copies of its Bylaws, certified as of  the  Closing  Date by
     its corporate secretary or an assistant secretary;

         (iv)  resolutions   of   its  Board  of  Directors  approving  and
     authorizing (a) the execution,  delivery  and performance of each Loan
     Document  to  which  it  is a party and (b) the  consummation  of  the
     transactions contemplated  hereby  and thereby, in each case certified
     as  of the Closing Date by its corporate  secretary  or  an  assistant
     secretary  as  being  in full force and effect without modification or
     amendment; and

          (v)  signature  and   incumbency  certificates  of  its  officers
     executing this Agreement and the other Loan Documents to which it is a
     party.

     B.   PARTNERSHIP AND LLC DOCUMENTS.    Each Partnership Loan Party and
each  LLC  Loan  Party, as applicable, shall deliver  to  the  Agent  (with
sufficient originally  executed  copies  for  each  Lender  and the Agent's
counsel) the following, each unless otherwise noted dated the Closing Date:

          (i)  to  the extent such Loan Party is a party thereto,  executed
     originals of this  Agreement,  the  Affiliate  Guaranty,  the Security
     Agreement, a Note in favor of each Lender and each other Loan Document
     to which it is a party;

         (ii)  with  respect  to  each  Partnership Loan Party, a conformed
     copy of the partnership agreement, certified  by  each general partner
     of such partnership as of the Closing Date as being  in full force and
     effect without modification or amendment;

        (iii)    with respect to each LLC Loan Party, a conformed  copy  of
     the limited liability  company agreement and each other organizational
     document, certified by the  manager  of  such LLC Loan Party as of the
     Closing Date as being in full force and effect without modification or
     amendment;

         (iv)    (a) with  respect  to  each Partnership  Loan  Party,  its
     Certificate of Limited Partnership,  certified  by  the  Secretary  of
     State  (or  similar  official)  of its jurisdiction of formation and a
     certificate of existence or good  standing,  as  the case may be, from
     the  Secretary  of  State (or similar official) of such  jurisdiction,
     each dated not more than  7  days  prior to the Closing Date, (b) with
     respect  to  each  LLC Loan Party, its  Articles  of  Organization  or
     Certificate of Formation,  certified  by  the  Secretary  of State (or
     similar   official)   of  its  jurisdiction  of  its  jurisdiction  of
     organization, each dated  not  more  than  7 days prior to the Closing
     Date, and (c) a good standing certificate or certificate of existence,
     as the case may be, from the Secretary of State  (or similar official)
     of  each  state  or  other jurisdiction in which a Property  owned  or
     leased by such entity is located;

          (v)  all  documents  of  such  Partnership  Loan  Party  and  its
     partners (to the  extent  required  by  the  applicable organizational
     documents)  or  such  LLC Loan Party and its members,  as  applicable,
     approving or authorizing  (a) the  execution, delivery and performance
     of the affiliate Guaranty and any other  Loan Documents to which it is
     a  party,  and  (b) the consummation of the transactions  contemplated
     hereby and thereby,  each  certified  as  of  the  Closing Date by the
     general  partner of such Partnership Loan Party or other  Loan  Party;
     and

         (vi)  unless  otherwise  required  to  be  delivered  pursuant  to
     subsection  4.1A(v),  signature  and  incumbency  certificate  of  the
     Person(s)   executing,  on  behalf  of  such  partnership  or  limited
     liability company,  as  applicable,  any  Loan Documents to which such
     Partnership Loan Party or LLC Loan Party is a party.

     C.   FINANCIAL  STATEMENTS;  CERTIFICATES.  The  Borrower  shall  have
delivered to the Agent an Officers'  Certificate  of  the  Chief  Executive
Officer or the Chief Financial Officer of the Borrower certifying as to the
following:

          (i)  the  delivery  to  the  Agent  of  the  financial statements
     referred to in subsection 5.3 on or before the Closing Date;

         (ii)  as  of  the  Closing  Date,  CapStar  has  a  Market  Equity
     Capitalization of not less than $200,000,000;

        (iii)  since   June 30,  1996,  no  Material  Adverse  Effect   has
     occurred; and

         (iv)  the delivery  to  the  Agent of a Borrowing Base Certificate
     reasonably satisfactory to the Agent,  together  with a calculation of
     the Borrowing Base attached thereto in a form reasonably  satisfactory
     to  the Agent and a Compliance Certificate reasonably satisfactory  to
     the  Agent,  together  with  a  calculation  testing  compliance  with
     financial and monetary covenants attached thereto in a form reasonably
     satisfactory to the Agent, each as of the Closing Date.

     D.   NO  MATERIAL  ADVERSE  EFFECT.   Since June 30, 1996, in the sole
opinion of the Agent, no condition or event  has  occurred  that has had or
could  reasonably  be  expected  to  have,  either individually or  in  the
aggregate, a Material Adverse Effect.

     E.   SECURITY INTERESTS.  The Borrower shall  have  taken or caused to
be  taken all such actions as may be necessary or reasonably  requested  by
the Agent  to  give  the  Agent  a  valid,  enforceable and perfected first
priority Lien on or first priority security interest  in  the Collateral as
of  the  Closing  Date, it being understood by each Lender that  perfection
against Persons other  than  the  Borrower of such Lien on the Rents may in
certain jurisdictions require the Agent  to  have  possession of the Rents.
Such actions shall include the following:

          (i)  the delivery to the Agent of fully executed and acknowledged
     counterparts of the Mortgage, the Assignment of  Rents and Leases, the
     Omnibus   Management  and  Liquor  License  Agreement,  the   Security
     Agreement,  the  Trademark  Agreement,  an  assignment  of the Atlanta
     Documents and all other Security Documents with respect to  the Pool A
     Properties  and  the other Collateral as of the Closing Date, and  the
     delivery of evidence  satisfactory  to  the Agent that counterparts of
     the Mortgage, the Assignment of Rents and Leases and all other of such
     documents the Agent desires to have recorded  have  been  or  will  be
     recorded  in  all places necessary or desirable to create and maintain
     (a) valid and enforceable  first  priority  Liens on the fee simple or
     leasehold  interests  of the Borrower, as applicable,  in  the  Pool A
     Properties in favor of  the  Agent, as mortgagee (or as beneficiary in
     those jurisdictions where the  Lien  is  granted  to a trustee for the
     benefit of the Agent), (b) valid and enforceable first  priority Liens
     on  the  Rents  and  Leases  in  favor  of  the  Agent, (c) valid  and
     enforceable  first  priority  Liens  in  all  fixtures at  the  Pool A
     Properties, in favor of the Agent, as secured party  and (d) valid and
     enforceable first priority Liens in all other items of  Collateral  as
     of the Closing Date in favor of the Agent;

         (ii)  (a) the  delivery  to  the  Agent for filing pursuant to the
     Security Documents of properly executed financing statements under the
     Uniform Commercial Code (or any equivalent or similar legislation), or
     any other documents required to be filed  by  other  Applicable  Laws,
     satisfactory  in  form and substance to the Agent in each jurisdiction
     as may be necessary  (in  the Agent's reasonable judgment) effectively
     to  perfect and maintain the  security  interests  in  the  Collateral
     created  by  such  Security Documents and (b) the delivery of evidence
     that such financing  statements  or  other documents will have been or
     will  be  recorded  in  all  places necessary  or  desirable,  in  the
     reasonable judgment of the Agent,  to  create  and  maintain valid and
     enforceable  first priority Liens on the Collateral in  favor  of  the
     Agent;

        (iii)  the  delivery  to  the Agent of a title report or commitment
     (together with copies of all documents listed therein as exceptions to
     title) dated not more than 90 days  prior  to  the  Closing  Date with
     respect to each Pool A Property and pro forma Title Policies dated not
     more than 30 days prior to the Closing Date with respect to each  such
     Pool A Property, each reasonably satisfactory in form and substance to
     the Agent;

         (iv)  the  delivery  to the Agent of an opinion of counsel in each
     state or other jurisdiction  in which each Pool A Property is located,
     dated the Closing Date, addressed  to the Agent and the Lenders and in
     form and substance reasonably satisfactory to the Agent;

          (v)  the delivery to the Agent  of  the  Title Policies or marked
     title commitments insuring fee simple or leasehold  title  to  each of
     the  Pool A  Properties  vested  in  the  Borrower  or  the applicable
     Subsidiary  of  the  Borrower and insuring the first priority  of  the
     Liens created under the Mortgages in an aggregate amount not less than
     $178,942,515 with respect  to the Pool A Properties (as such aggregate
     amount  may be increased after  the  Closing  Date  by  the  Agent  in
     connection   with,  and  as  a  condition  to  the  approval  of,  the
     Acquisition  of  Additional  Pool  A  Properties,  including  the  MBL
     Properties, pursuant to subsection 2.9A), in each case subject only to
     Permitted  Encumbrances,  and  such  other  title  exceptions  as  are
     satisfactory  to  the  Agent.   Such Title Policies shall be reinsured
     with title insurance companies acceptable  to  the Agent in amounts as
     required by the Agent subject to facultative reinsurance agreements in
     form  satisfactory  to  the  Agent.   Such Title Policies  shall  also
     contain such endorsements and affirmative  insurance provisions as the
     Agent may reasonably require and to the extent  the same are available
     in    the   applicable   jurisdiction,   including   ``comprehensive''
     endorsements,  revolving  credit  endorsements,  affirmative insurance
     against mechanic's liens, survey exceptions, violations  of covenants,
     conditions and restrictions, encroachments, gap insurance,  contiguity
     endorsements,   tie-in   endorsements,  access  endorsements,  ``Last-
     dollar'' endorsements, survey endorsements, contingent loss/first loss
     endorsements,   variable   rate   mortgage   endorsements,   leasehold
     endorsement for Pool A Properties  that  are leaseholds, and any other
     endorsements reasonably required by the Agent to address issues raised
     by the Agent's due diligence or as a matter  of  Applicable  Law.   In
     addition,  the Borrower shall have paid to the Title Company or to the
     appropriate  Governmental  Authority  all expenses and premiums of the
     Title Company in connection with the issuance  of  such Title Policies
     or in connection with any Loan hereunder and an amount  equal  to  the
     recording  and  stamp  taxes (including mortgage recording, intangible
     and similar taxes) payable in connection with recording each Mortgage,
     the  Assignment  of  Rents  and  Leases  and  the  Atlanta  Collateral
     Assignment in the appropriate  county  or  parish  land  offices or in
     connection with any Loans hereunder;

         (vi)  the  delivery to the Title Company of such certificates  and
     affidavits as the  Title  Company may reasonably require in connection
     with the issuance of the Title Policies;

        (vii)  the delivery to the  Agent  of a Survey with respect to each
     of the Pool A Properties, dated or re-dated  to  within 120 days prior
     to the Closing Date, which Surveys shall be reasonably satisfactory in
     form and substance to the Agent;

       (viii)   unless a title insurance zoning endorsement  is  issued  to
     the Agent by the Title Company, the delivery to the Agent of a letter,
     to  the  extent  generally available, from the applicable Governmental
     Authority with respect to each of the Pool A Properties and reasonably
     satisfactory to the  Agent  stating that all Improvements on each such
     Property have been constructed  and  are  being  used  and operated in
     material compliance with (a) all applicable zoning, subdivision, local
     environmental,  building  and  land  use  laws, ordinances, rules  and
     regulations  of  all  Governmental Authorities  or  quasi-governmental
     authorities having jurisdiction with respect to each such Property and
     all  applicable  fire and  building  maintenance  codes,  and  (b) all
     building permits issued in respect of each such Property for work then
     being conducted and  the  certificate  of occupancy (if available) for
     each such Property;

         (ix)  the delivery to the Agent pursuant to the Security Agreement
     of the stock certificates (which certificates  shall be accompanied by
     irrevocable   undated  stock  powers  duly  endorsed  in   blank   and
     irrevocable proxies,  all  satisfactory  in  form and substance to the
     Agent),  certificated  partnership  interests,  certificated   limited
     liability  company  membership  interests, promissory notes (including
     the Atlanta Note) and other instruments,  (in  each case duly endorsed
     to the order of the Agent, as secured party), representing the capital
     stock,  partnership  interests, limited liability  company  membership
     interests, promissory notes and other instruments to be pledged on the
     Closing Date pursuant to the Security Agreement;

          (x)  the delivery to the Agent (i) of the Trademark Agreement, in
     a form suitable for filing with the United States Trademark and Patent
     Office and (ii) of the  Trademark  Agreement  in  a  form suitable for
     filing with the Canadian Trademark Office;

         (xi)  the  delivery  to the Agent of Cash Management  Letters  for
     each financial institution  at  which  a  Deposit  Account  is located
     pursuant to the Cash Management System, which Cash Management  Letters
     and  the  Cash  Management  System  shall  be  in  form  and substance
     reasonably satisfactory to the Agent; and

        (xii)  the   delivery   to   the   Agent   of  evidence  reasonably
     satisfactory to the Agent that all other filings, recordings and other
     actions the Agent deems necessary or advisable  to  establish, perfect
     and  preserve  the  Liens  granted  to  the  Agent  in  the Collateral
     (including  any uncertificated partnership interests or uncertificated
     limited liability company membership interests) as of the Closing Date
     shall have been made.

     F.   INSURANCE.   The  Borrower  shall  have  delivered  to  the Agent
(i) duplicate originals or true and complete copies of each policy or other
evidence  of  insurance  required  by  this  Agreement  evidencing  (a) the
issuance of such policies, (b) that the Borrower is not then in default  in
the  payment  of  any  premium  and  (c) coverage  which  meets  all of the
requirements set forth in this Agreement; and (ii) an Officers' Certificate
dated  the  Closing Date to the effect that the insurance coverage required
by this Agreement is in full force and effect and that all monthly premiums
therefor have been paid.

     To the extent  permitted  by  law,  the  Borrower  hereby  irrevocably
waives,  releases and discharges any and all rights of action, demands  and
other claims  of  any  kind  or  nature  against  the Agent and the Lenders
arising from any failure of the Agent or the Lenders  to  comply  with  the
National Flood Insurance Act of 1968 (42 U.S.C. <section><section> 4001, et
seq.),  the  Flood  Disaster  Protection  Act of 1973 or the National Flood
Insurance Reform Act of 1994, including any  failure  of  the  Agent or the
Lenders to provide the Borrower with written notification within  ten  days
prior to the Closing Date whether any Pool A Property is in a special flood
hazard area or whether federal disaster relief assistance will be available
in the event of flood damage to any Pool A Property.

     G.   POOL A   GROUND  LEASES;  LANDLORD  ESTOPPEL  CERTIFICATES.   The
Borrower shall have delivered to the Agent executed or conformed, certified
copies of each of the  Pool A  Ground  Leases  and  all  amendments thereto
entered  into on or prior to the Closing Date, as listed on  SCHEDULE  5.4B
annexed hereto,  which  Pool A  Ground Leases shall be satisfactory in form
and  substance to the Agent, in its  sole  discretion;  the  Pool A  Ground
Leases,  as  so  amended,  shall be in full force and effect and no term or
condition thereof shall have been further amended or modified, or waived in
any material respect after the  execution thereof; and no Person shall have
failed  in  any material respect to  perform  any  material  obligation  or
covenant or satisfy  any  material  condition required by the Pool A Ground
Leases to be performed or complied with  on or before the Closing Date.  On
or before the Closing Date, the Borrower shall  have delivered to the Agent
original counterparts of an estoppel certificate and agreement with respect
to each Pool A Ground Lease, acceptable in form and substance to the Agent,
and duly executed by each lessor under such Pool A Ground Lease.

     H.   MANAGEMENT AGREEMENTS. The Borrower shall  have  delivered to the
Agent (i) executed or conformed, certified copies of each of the Management
Agreements and all amendments thereto entered into on or before the Closing
Date,   as  listed  on  SCHEDULE  5.4D  annexed  hereto,  which  Management
Agreements  shall  be  reasonably satisfactory in form and substance to the
Agent; the Management Agreements, as so amended, shall be in full force and
effect and no term or condition  thereof shall have been further amended or
modified, or waived in any material  respect  after  the  execution thereof
(other than the waiver of any Management Fee previously due  and  payable);
and  (ii) an  Officers'  Certificate  of  the  Borrower  (a)  listing  each
operating  deficit  guaranty and each contract with any owner of a Property
regarding the provision  of FF&E at a fixed cost to which any Loan Party is
a party on the Closing Date  and  (b)  attaching copies (certified as true,
correct and complete) of each such guaranty and contract.

     I.   SERVICING  AGREEMENTS.   On  or  before  the  Closing  Date,  the
Borrower shall have delivered to the Agent executed or conformed, certified
copies  of  each  of the Servicing Agreements and  all  amendments  thereto
entered into on or  before  the  Closing  Date,  as listed on SCHEDULE 5.4E
annexed hereto, which Servicing Agreements shall be  satisfactory  in  form
and  substance  to  the  Agent,  in  its  sole  discretion;  the  Servicing
Agreements, as so amended, shall be in full force and effect and no term or
condition  thereof  shall  have been further amended or modified, or waived
after the execution thereof;  and  no  Person  shall  have  failed  in  any
material  respect to perform any material obligation or covenant or satisfy
any material condition required by the Servicing Agreements to be performed
or complied with on or before the Closing Date.

     J.   FRANCHISE  AGREEMENTS;  FRANCHISOR  ESTOPPEL  CERTIFICATES.   The
Borrower shall have delivered to the Agent executed or conformed, certified
copies  of  each  of  the  Franchise  Agreements and all amendments thereto
entered into on or before the Closing Date,  as  listed  on  SCHEDULE  4.1J
annexed  hereto,  which  Franchise Agreements shall be satisfactory in form
and substance to the Agent;  the Franchise Agreements, as so amended, shall
be in full force and effect and  no  term  or  condition thereof shall have
been further amended or modified, or waived after  the  execution  thereof;
and  no  Person  shall  have  failed in any material respect to perform any
material obligation or covenant  or satisfy any material condition required
by the Franchise Agreements to be  performed  or complied with on or before
the  Closing Date, including, without limitation  (but  only  if  the  same
constitute a material obligation, covenant or condition), obligations under
property  improvement  plans  and  quality  control  plans  required by the
respective  franchisors to be performed within specified periods.   To  the
extent not delivered  by  the  Borrower  prior  to the Closing Date, on the
Closing  Date,  the  Borrower shall have delivered to  the  Agent  original
counterparts of a franchisor's  estoppel  certificate and consent agreement
with  respect  to  each  Franchise  Agreement  in  respect  of  the  Pool A
Properties, reasonably acceptable in form and substance  to  the Agent, and
duly executed by each franchisor under such Franchise Agreement.

     K.   MATERIAL  LEASES;  TENANT  ESTOPPEL  CERTIFICATES.  The  Borrower
shall  have  delivered  to the Agent (i) executed or  conformed,  certified
copies  of each Material Lease  with  respect  to  each  Property  and  all
amendments thereto entered into on or before the Closing Date, as listed on
SCHEDULE  4.1K  annexed  hereto,  which Material Leases shall be reasonably
satisfactory in form and substance to the Agent; the Material Leases, as so
amended, shall be in full force and effect and no term or condition thereof
shall have been further amended or  modified, or waived after the execution
thereof; and no Person shall have failed in any material respect to perform
any  material  obligation or covenant or  satisfy  any  material  condition
required by the  Material  Leases  to  be  performed or complied with on or
before  the  Closing  Date;  and  (ii) original  counterparts  of  estoppel
certificates  with  respect  to each of the Material  Leases  specified  on
SCHEDULE 4.1K, reasonably satisfactory  in form and substance to the Agent,
duly executed and delivered by each Tenant party to such Material Lease.

     L.   ENVIRONMENTAL AUDITS.  The Borrower  shall  have delivered to the
Agent  evidence  satisfactory  to  the Agent, in its sole discretion,  that
(i) there are no material pending or  threatened  claims, suits, actions or
proceedings arising out of or relating to the existence  of  any  Hazardous
Materials  at,  in,  on,  from,  around  or  under  any  of the Properties;
(ii) each such Property is in compliance in all material respects  with all
applicable  Environmental  Laws with respect to such Property; and (iii) no
Hazardous Materials exist at,  in,  on,  from,  around  or  under  any such
Property,  except  in  compliance  in all material respects with applicable
Environmental Laws and all other Hazardous Materials have been removed from
each Property to the extent required  by  Applicable  Law.   Such  evidence
shall  include (a) a comprehensive environmental audit (which shall include
a Phase I environmental audit and, either if recommended or suggested by an
Approved  Environmental  Consultant or, if not so recommended or suggested,
if determined by the Agent  in  its  sole  discretion  to  be  necessary or
desirable   after   considering   factors   reasonably   related   to  such
determination,  a  Phase II environmental audit), satisfactory in form  and
substance  to  the  Agent,   conducted   and   certified   by  an  Approved
Environmental Consultant (the Borrower shall certify as of the Closing Date
that, as to any environmental audit delivered by the Borrower  prior to the
Closing  Date,  to  the Borrower's knowledge, the information contained  in
such audit remains true,  correct and complete), (b) a reliance letter from
such  Approved  Environmental   Consultant   with   respect  to  each  such
environmental  audit  addressed  to the Agent and Lenders,  which  reliance
letter  shall  be  satisfactory  in  form   and  substance  to  the  Agent,
(c) certification  that  all  required  approvals   from  all  Governmental
Authorities having jurisdiction with respect to the environmental condition
of  the  Properties,  if  any,  have  been  obtained,  and  (d) such  other
environmental reports, inspections and investigations as the Agent shall in
its sole discretion require after considering factors reasonably related to
such   determination,   prepared,   in   each   instance,  by  an  Approved
Environmental  Consultant,  which  approvals,  reports,   inspections   and
investigations shall be satisfactory in form and substance to the Agent, in
its  sole  discretion.   On  or before the Closing Date, the Borrower shall
have delivered to the Agent evidence satisfactory to the Agent, in its sole
discretion, that the Borrower  has  complied  (or  has made arrangements to
comply)  with  the  recommendations  and suggestions of  all  environmental
consultant(s) referred to above.

     M.   ENGINEERING REPORTS.  The Borrower  shall  have  delivered to the
Agent (i) a written Engineering Report with respect to each Pool A Property
dated  not more than 45 days prior to the Closing Date and prepared  by  an
Engineer  acceptable  to  the Agent, which Engineering Report shall contain
current repair recommendations  for  the first five years, and shall in all
other respects be reasonably satisfactory  in  form  and  substance  to the
Agent;  and  (ii) a reliance letter from such Engineer with respect to each
such Engineering  Report  addressed  to the Agent and Lenders, which letter
shall be in form and substance reasonably satisfactory to the Agent.

     N.   APPRAISALS.  The Agent shall  have  received  (i) an Appraisal of
each Pool A Property dated not more than 60 days prior to  the Closing Date
and prepared by an Appraiser designated by the Agent, which Appraisal shall
be  satisfactory in form and substance to the Agent and shall  satisfy  all
applicable  regulatory  requirements;  and  (ii) copies  of all appraisals,
market studies, and similar information with respect to each  of the Pool A
Properties in the possession or under the control of CapStar or  any of its
Subsidiaries.

     O.   OPINIONS  OF  THE  BORROWER'S COUNSEL; AUDITOR'S LETTER.  On  the
Closing Date the Borrower shall  have  delivered  to the Agent, its counsel
and  the  Lenders  (i) executed  copies  of each of the  favorable  written
opinions  of  DeCampo, Diamond & Ash and Paul,  Weiss,  Rifkin,  Wharton  &
Garrison, respectively,  each  counsel  for  the  Borrower,  which shall be
substantially in the forms of EXHIBIT XV annexed hereto, with  such changes
as  the Agent may approve and dated the Closing Date; (ii) executed  copies
of a  letter  from  the  Borrower  addressed  to  KPMG  Peat  Marwick  LLP,
independent  accountants  for the Borrower, as to such matters as the Agent
and its counsel may reasonably  request, satisfactory in form and substance
to  the  Agent; and (iii) evidence  satisfactory  to  the  Agent  that  the
Borrower has  requested  such  counsel and auditor to deliver such opinions
and letter to the Agent and its counsel and the Lenders.

     P.   OPINION OF AGENT'S COUNSEL.   The  Lenders  shall  have  received
executed copies of the favorable written opinion of O'Melveny & Myers  LLP,
counsel to the Agent, dated as of the Closing Date.

     Q.   ORIGINAL   ACQUISITION   DOCUMENTS.    The  Borrower  shall  have
delivered  to  the  Agent  executed  certified  copies  of   each  Original
Acquisition Agreement and all amendments thereto in effect on  the  Closing
Date.

     R.   NO  ADVERSE  LITIGATION.   There  shall not be pending or, to the
knowledge  of  the  Borrower,  threatened,  any action,  suit,  proceeding,
governmental investigation or arbitration against  or  affecting CapStar or
any  of  its  Subsidiaries  or  any  property  of  CapStar  or any  of  its
Subsidiaries  that  has  not  been  disclosed  by  the  Borrower in writing
pursuant  to  subsection 4.5 prior to the execution of this  Agreement  and
that is reasonably  likely  to  have  a  Material Adverse Effect, and there
shall have occurred no development not so  disclosed  in  any  such action,
suit,  proceeding,  governmental investigation or arbitration so disclosed,
that, in either event, in the opinion of the Agent, is reasonably likely to
have a Material Adverse  Effect;  and  no  injunction  or other restraining
order shall have been issued and no hearing to cause an injunction or other
restraining order to be issued shall be pending or noticed  with respect to
any action, suit or proceeding seeking to enjoin or otherwise  prevent  the
consummation of, or to recover any damages or obtain relief as a result of,
the  transactions contemplated by this Agreement or the making of the Loans
hereunder.

     S.   FORMATION; EQUITY OFFERING; PAYMENT OF CERTAIN INDEBTEDNESS.  The
Borrower  shall  have  delivered to the Agent (i) an executed or conformed,
certified copy of each of  the Formation Documents entered into on or prior
to the Closing Date; such documents,  as so amended, shall be in full force
and effect and no term or condition thereof shall have been further amended
or modified, or waived after the execution  thereof;  and  no  Person shall
have  failed in any material respect to perform any material obligation  or
covenant  or  satisfy  any  material  obligation or covenant or satisfy any
material condition required thereunder  to be performed or complied with on
or before the Closing Date; (ii) a copy of  each  agreement, legal opinion,
accountant's  letter,  certificate  and each other document  or  instrument
delivered  in  connection  with  the formation  of  the  Borrower  and  the
Formation; (iii) an Officers' Certificate  of the Borrower certifying that,
as  of the Closing Date, each transaction constituting  the  Formation  has
been  duly  authorized  by  all  necessary  action of the Loan Parties, the
applicable current and former Subsidiaries of  the  Loan  Parties  and  all
other  Persons  and  has  been  consummated  in  accordance  with,  and  is
enforceable pursuant to, all Applicable Laws; (iv) evidence satisfactory to
the  Agent  that  the  Equity Offering has been consummated pursuant to the
Equity Offering Documents and the gross proceeds thereof were not less than
$110,000,000; (v) executed  or  conformed,  certified copies of each of the
Equity Offering Documents, all satisfactory in  form  and  substance to the
Agent,  which  documents  shall  be in full force and effect; and  (vi) the
Borrower shall have caused the holders  of  any  Indebtedness that has been
paid  by the Borrower to deliver properly executed  termination  statements
under the Uniform Commercial Code and any and all releases of mortgages and
subordination agreements benefitting such Persons.

     T.   DEFERRED MAINTENANCE ACCOUNT.  On or before the Closing Date, the
Borrower  shall  have  either  (i)  deposited into the Deferred Maintenance
Account or (ii) established a reserve  as  provided  in  the  definition of
Total  Utilization  in an amount not less than $2,263,829 in the  aggregate
(which amount is the  sum of the subtotals of the amounts in the columns on
SCHEDULE 6.16B annexed  hereto  entitled  ``Immediate  Repair  of  Deferred
Items'' and ``Immediate Repair of ADA Items'', respectively), which  amount
shall   be   allocated  among  the  Mortgaged  Properties  as  provided  in
SCHEDULE 6.16B annexed hereto.

     U.   CONTINGENT  OBLIGATIONS.   The  Agent  and the Lenders shall have
received and approved a list of all Contingent Obligations substantially in
the form of SCHEDULE 5.3B annexed hereto.

     V.   PAYMENT OF FEES AND EXPENSES.  The Borrower  shall  have  paid to
the  Agent, for distribution (as appropriate) to the Lenders and the Agent,
the fees  payable  pursuant  to  subsection  2.3  and  the expenses payable
pursuant to subsection 9.2.

     W.   COMPLETION OF PROCEEDINGS.  All corporate and  other  proceedings
taken  or  to  be  taken  in  connection with the transactions contemplated
hereby and all documents incidental thereto not previously found acceptable
by the Agent and its counsel shall  be  reasonably satisfactory in form and
substance to the Agent and such counsel,  and  the  Agent  and such counsel
shall have received all such counterpart originals or certified  copies  of
such documents as the Agent may reasonably request.

     X.   VIRGINIA  DOCUMENTS.   On  or  before  the Closing Date, the Loan
Sellers  shall  deliver  or  cause  to  be  delivered to  the  Lenders  the
following:

          (i)  the original Virginia Note;

         (ii)  an original, or a copy certified  by CapStar as being a true
     and complete copy, of each of the other Virginia Documents;

        (iii)  original endorsement to the Virginia  Note  in  favor of the
     Lenders  duly executed on behalf of CapStar and in form and  substance
     reasonably satisfactory to the Agent;

         (iv)  with  respect  to  the  deed  of trust securing the Virginia
     Loan, an original Assignment of Deed of Trust  and Other Recorded Loan
     Instruments duly executed and acknowledged on behalf  of  CapStar,  as
     assignor,  in  favor  of  the  Agent,  as  assignee,  and  in form and
     substance, and in a number of counterparts, reasonably satisfactory to
     the Agent;

          (v)  an  original Assignment of Virginia Documents duly  executed
     by CapStar, as  assignor,  in  favor of the Agent, as assignee, and in
     form  and  substance,  and  in a number  of  counterparts,  reasonably
     satisfactory to the Agent; and

         (vi)  for each Uniform Commercial  Code  UCC-1 Financing Statement
     included in the Virginia Documents, a Uniform Commercial Code UCC-2 or
     UCC-3  Assignment,  as  the case may be, duly executed  on  behalf  of
     CapStar, as assignor, in  favor of the Agent, as assignee, and in form
     and substance reasonably satisfactory to the Agent.

     Y.   OTHER DOCUMENTS.  Each  Loan  Party  shall  have delivered to the
Agent  such  other  information and documents as the Agent  may  reasonably
request.

4.2  CONDITIONS TO ALL LOANS.

     The obligations  of the Lenders to make Loans on each Funding Date are
subject to the following further conditions precedent:

     A.   NOTICE OF BORROWING.   The  Agent shall have received before that
Funding Date, in accordance with the provisions  of subsection 2.1C, (i) an
originally executed Notice of Borrowing, in each case  signed  by the chief
executive  officer,  the  chief financial officer or the treasurer  of  the
Borrower or by any executive  officer  of the Borrower designated by any of
the  above-described  officers  on behalf of  the  Borrower  in  a  writing
delivered to the Agent and (ii) if  any of the proceeds of such Loan are to
be applied to the Restoration of any  Property, all lien waivers and search
reports  then  required  to  be  delivered  pursuant  to  subsection  6.11F
concurrently with the Notice of Borrowing.

     B.   OTHER CONDITIONS PRECEDENT.  As of that Funding Date:

          (i)  the representations and warranties  of  the  Loan Parties as
     contained  herein  and in the other Loan Documents shall be  true  and
     correct in all material respects on and as of that Funding Date to the
     same extent as though  made  on  and  as  of  that date, except to the
     extent such representations and warranties specifically  relate  to an
     earlier  date, in which case such representations and warranties shall
     have been  true and correct in all material respects on and as of such
     earlier date;

         (ii)  no  event  shall  have  occurred  and be continuing or would
     result  from the consummation of the borrowing  contemplated  by  such
     Notice of  Borrowing  that  would  constitute an Event of Default or a
     Potential Event of Default;

        (iii)  each  Loan  Party  shall  have  performed  in  all  material
     respects  all  agreements  and satisfied  all  conditions  which  this
     Agreement and the other Loan  Documents  provide shall be performed or
     satisfied by it on or before that Funding Date;

         (iv)  no  order,  judgment  or  decree  of   any   arbitrator   or
     Governmental  Authority shall purport to enjoin or restrain any Lender
     from making the  Loans  to  be made by it on that Funding Date and the
     making of the Loans requested  on  such Funding Date shall not violate
     any  law  including, without limitation,  Regulation G,  Regulation T,
     Regulation U  or Regulation X of the Board of Governors of the Federal
     Reserve System;

          (v)  the  Borrower   shall   have  purchased  all  interest  rate
     protection required as of the Funding Date to be purchased pursuant to
     subsection 6.14 by such Funding Date or within 60 days thereafter;

         (vi)  there shall not be pending  or,  to  the  knowledge  of  the
     Borrower,  threatened,  any  action,  suit,  proceeding,  governmental
     investigation or arbitration against or affecting the Borrower  of its
     Subsidiaries  that  has  not been disclosed by the Borrower in writing
     pursuant to subsection 5.5  or  6.1(xii)  prior  to the making of such
     Loans and that would be reasonably likely to have  a  Material Adverse
     Effect, and there shall have occurred no development not  so disclosed
     in  any  such action, suit, proceeding, governmental investigation  or
     arbitration so disclosed, that, in either event, in the opinion of the
     Agent, would  be  reasonably likely to have a Material Adverse Effect;
     and no injunction or  other  restraining  order shall have been issued
     and no hearing to cause an injunction or other restraining order to be
     issued shall be pending or noticed with respect to any action, suit or
     proceeding seeking to enjoin or otherwise prevent the consummation of,
     or  to  recover  any damages or obtain relief  as  a  result  of,  the
     transactions contemplated  by  this  Agreement  or the making of Loans
     hereunder;

        (vii)  after giving effect to the proposed borrowing, the Borrowing
     Base  shall  not  be  less than the Total Utilization  (excluding  the
     aggregate principal amount  of  Pool B Indebtedness outstanding on the
     applicable  date  of  determination)   and  the  Borrower  shall  have
     delivered to the Agent the Borrowing Base  Certificate  for  the  most
     recent calendar month as required pursuant to subsection 6.1(ii);

       (viii)  after  giving  effect  to  the proposed borrowing, the Total
     Utilization shall not be greater than  the  aggregate Commitments then
     in effect; and

         (ix)  since  June 30,  1996,  no  condition or  event  shall  have
     occurred  that  has  had  or  could  reasonably  be  expected,  either
     individually or in the aggregate, to have a Material Adverse Effect.

4.3  CONDITIONS TO LETTERS OF CREDIT.

          The issuance of any Letter of Credit  hereunder  (whether  or not
the  applicable Issuing Lender is obligated to issue such Letter of Credit)
is subject to the following conditions precedent:

     A.   INITIAL  LETTERS OF CREDIT.  On or before the date of issuance of
the initial Letter of Credit pursuant to this Agreement, the conditions set
forth in subsection 4.1 for the making of the initial Loans shall have been
satisfied.

     B.   NOTICE OF ISSUANCE OF LETTER OF CREDIT.  On or before the date of
issuance of such Letter of Credit, Agent shall have received, in accordance
with the provisions of subsection 3.1B(i), an originally executed Notice of
Issuance of Letter of Credit, in each case signed on behalf of the Borrower
by  the  chief executive  officer,  the  chief  financial  officer  or  the
treasurer  of  the  general  partner  of  the  Borrower or by any executive
officer of the general partner of the Borrower designated  by  any  of  the
above-described  officers  on behalf of the general partner of the Borrower
in  a  writing delivered to Agent,  together  with  all  other  information
specified  in subsection 3.1B(i) and such other documents or information as
the applicable Issuing Lender may reasonably require in connection with the
issuance of such Letter of Credit.

     C.   OTHER  CONDITIONS  PRECEDENT.   On  the  date of issuance of such
Letter  of Credit, all conditions precedent described  in  subsection  4.2B
shall be  satisfied to the same extent as if the issuance of such Letter of
Credit were the making of a Loan and the date of issuance of such Letter of
Credit were a Funding Date.


                             SECTION 5
                  REPRESENTATIONS AND WARRANTIES

     In order  to  induce  the  Agent  and  the  Lenders to enter into this
Agreement and to make the Loans, to induce Issuing Lenders to issue Letters
of Credit and to induce other Lenders to purchase  participations  therein,
each  of CapStar and the Borrower represents and warrants to the Agent  and
the Lenders  that,  as of the Closing Date, each Funding Date and as of the
date of issuance of each Letter of Credit, the following statements in this
Section 5 are true, correct  and  complete  on  the  Closing  Date,  on the
Closing  Date,  on  each  Funding  Date and on the date of issuance of each
Letter of Credit, as the case may be.

5.1  ORGANIZATION,  POWERS,  QUALIFICATION,  GOOD  STANDING,  BUSINESS  AND
     SUBSIDIARIES.

     A.   ORGANIZATION  AND POWERS.   Each  Loan  Party  and  each  of  its
Subsidiaries (other than  any Partnership Loan Party or any LLC Loan Party)
is a corporation duly organized,  validly  existing  and  in  good standing
under the laws of its jurisdiction of incorporation (which jurisdiction  is
set  forth on SCHEDULE 5.1A annexed hereto).  Each such Loan Party and each
such Subsidiary  has the requisite corporate power and authority to own and
operate its properties  (including the Properties identified as being owned
or leased by such Loan Party  or  such  Subsidiary  on  SCHEDULE  5.4A1 and
SCHEDULE  5.4A2  annexed hereto), to carry on its business as now conducted
and as proposed to  be  conducted, to enter into the Loan Documents and the
Related Documents to which  it  is  a  party, to carry out the transactions
contemplated hereby and thereby.  Each Partnership  Loan Party is a limited
partnership  duly  formed  and  validly  existing  under the  laws  of  its
jurisdiction of organization (which jurisdiction is  set  forth on SCHEDULE
5.1A)  and each Partnership Loan Party has all requisite partnership  power
and authority  to  own and operate its properties (including the Properties
identified on SCHEDULE 5.4A1 and SCHEDULE 5.4A2 as being owned or leased by
such Partnership Loan Party), to carry on its business as now conducted and
proposed to be conducted,  to  enter  into  each  Loan Document and Related
Document  to  which  it  is  a  party  and  to  carry out the  transactions
contemplated hereby and thereby and, in the case  of the Borrower, to issue
and pay the Notes.  Each LLC Loan Party is a limited liability company duly
formed  and  validly  existing  under  the  laws  of  its  jurisdiction  of
organization  (which jurisdiction is set forth on SCHEDULE 5.1A)  and  each
LLC Loan Party has all requisite power and authority to own and operate its
properties (including  the  Properties  identified  on  SCHEDULE  5.4A1 and
SCHEDULE  5.4A2 as being owned or leased by such LLC Loan Party), to  carry
on its business  as  now  conducted  and proposed to be conducted, to enter
into each Loan Document and Related Document  to which it is a party and to
carry out the transactions contemplated thereby.   The books and records of
each  Loan Party and each of its Subsidiaries reflect  the  properties  and
assets  purported  to  be  owned  by  such  Loan  Party  or  Subsidiary, as
applicable.

     B.   QUALIFICATION AND GOOD STANDING.  Each Loan Party and each of its
Subsidiaries  is  qualified  to do business and in good standing  in  every
jurisdiction necessary to carry  out its business and operations, except in
jurisdictions where the failure to  be so qualified or in good standing has
not had and could not reasonably be expected  to  have, either individually
or in the aggregate, a Material Adverse Effect.  The jurisdictions in which
each  Loan  Party and each of its Subsidiaries owns property  or  otherwise
conducts business  as  of  the  Closing Date are set forth on SCHEDULE 5.1B
annexed hereto.

     C.   CONDUCT OF BUSINESS.  CapStar,  the  Borrower  and  each of their
respective Subsidiaries are engaged only in the businesses permitted  to be
engaged in by them pursuant to subsection 7.14.

     D.   SUBSIDIARIES.   The Capital Stock of each of the Subsidiaries  is
duly  and  validly  authorized  and  issued  and  (with  the  exception  of
partnership interests of general partners and except to the extent that the
limited  liability company  agreements  governing  the  respective  limited
liability  companies  provide otherwise) fully paid and nonassessable.  All
of the Subsidiaries of  each  Loan  Party  are  identified on SCHEDULE 5.1A
annexed hereto, as SCHEDULE 5.1A may be supplemented  from  time to time in
accordance  with  the terms of this Agreement.  The capital stock  of  each
Person identified on  SCHEDULE 5.1A  (as  so  supplemented)  is  not Margin
Stock.  SCHEDULE 5.1A correctly sets forth the ownership interests  in each
Loan  Party  (other  than  the  Borrower)  and each of its Subsidiaries, as
SCHEDULE 5.1A may be supplemented from time  to time in accordance with the
terms  of  this  Agreement.  Except as set forth  on  SCHEDULE  5.1A,  each
Subsidiary of the Borrower is a Wholly Owned Subsidiary.

     E.   ACQUISITIONS.    Each   Loan  Party  shall  have  the  corporate,
partnership or other applicable power  to consummate each Acquisition to be
consummated by it upon the consummation  thereof, on the terms set forth in
any applicable Acquisition Agreement or other  operative  agreement.   Upon
the  consummation of any Acquisition, such Acquisition shall have been duly
authorized by all necessary action of such Loan Party or Subsidiary, as the
case may be.

     F.   FORMATION.   Each  of the transactions constituting the Formation
has been duly authorized by all  necessary  corporate or partnership action
of CapStar, the Borrower and the applicable current and former Subsidiaries
of  the  Loan  Parties  and  other  Persons.   Each   of  the  transactions
constituting the Formation has been consummated in accordance  with, and is
effective under, all Applicable Laws.

     G.   EQUITY  OFFERING.   Each  of  the  transactions constituting  the
issuance, sale and delivery by CapStar of 6,750,000  shares of Common Stock
in the Equity Offering pursuant to the Equity Offering  Documents  has been
duly  authorized  by  all  necessary  action  of  CapStar.   Each  of  such
transactions  has  been  consummated  in  accordance with, and is effective
under, all Applicable Laws.

5.2  AUTHORIZATION OF BORROWING, ETC.

     A.   AUTHORIZATION  OF  BORROWING.   The   execution,   delivery   and
performance  of this Agreement and the other Loan Documents and the Related
Documents to which  each  Loan  Party is a party and the issuance, delivery
and  payment  of  the Notes have been  duly  authorized  by  all  necessary
corporate, partnership  or  other action on the part of each Loan Party, as
the case may be.

     B.   NO CONFLICT.  The execution,  delivery  and  performance  by each
Loan Party of each Loan Document and each Related Document to which it is a
party  and  the  consummation  of  the transactions contemplated hereby and
thereby, do not and will not (i) violate any provision of law applicable to
any Loan Party or any of its Subsidiaries, the Certificate of Incorporation
or Bylaws, partnership agreement or  other  organizational  document of any
Loan Party or any of its Subsidiaries or any order, judgment  or  decree of
any court or other agency of government binding on any Loan Party or any of
its  Subsidiaries,  (ii) conflict with, result in a breach of or constitute
(with due notice or lapse  of time or both) a default under any Contractual
Obligation  of  any Loan Party,  which  default,  individually  or  in  the
aggregate, could have a Material Adverse Effect, (iii) result in or require
the creation or imposition of any Lien upon any of the properties or assets
of any Loan Party or any of its Subsidiaries (other than Liens securing the
Obligations), or  (iv) require any approval of stockholders or any approval
or consent of any Person under any Contractual Obligation of any Loan Party
the absence of which  could reasonably be expected to have, individually or
in  the aggregate, a Material  Adverse  Effect,  other  than  approvals  or
consents  which will be or have been obtained on or before the Closing Date
(or, in the  case of an Acquisition, on or before the date such Acquisition
is consummated) and disclosed in writing to the Agent and the Lenders.

     C.   GOVERNMENTAL  CONSENTS.   Except  as  set  forth on SCHEDULE 5.2C
annexed hereto, the execution, delivery and performance  by each Loan Party
of each Loan Document and each Related Document to which it  is a party and
the consummation of the transactions contemplated hereby and thereby do not
and  will  not  require any registration with, consent or approval  of,  or
notice to, or other  action  to,  with  or  by, any Governmental Authority,
except for (i) such of the foregoing which will  have been made or obtained
on  or  before the Closing Date (or, in the case of  any  Related  Document
relating  to  an  Acquisition, on or before the date of the closing of such
Acquisition) and (ii) the  recordings  and  filings required to perfect the
Liens granted pursuant to the Security Documents.   As of the Closing Date,
all consents or approvals from or notices to or filings  with  any federal,
state, or other (domestic or foreign) regulatory authorities required to be
obtained  on  or  before  such  date  in  connection with the documents  or
transactions described or referred to in the  preceding  sentence will have
been  accomplished in all material respects in compliance in  all  material
respects  with  all Applicable Laws.  None of the transactions constituting
the Formation, the  issuance,  sale  and delivery of shares of Common Stock
pursuant to the Equity Offering Documents  or the consummation of the other
transactions contemplated by this Agreement,  the  other Loan Documents and
the  Related  Documents violates any Applicable Law or  regulation  in  any
respect, which could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.

     D.   BINDING  OBLIGATION.   This  Agreement  is,  and  the  other Loan
Documents when executed and delivered hereunder will be, the legally  valid
and binding obligations of the applicable Loan Parties, enforceable against
the  applicable  Loan  Parties  in  accordance with their respective terms,
except  as  may  be  limited  by  bankruptcy,  insolvency,  reorganization,
moratorium  or  similar laws relating  to  or  limiting  creditors'  rights
generally, and by  general principles of equity (regardless of whether such
enforceability is considered  in a proceeding in equity or law) and subject
to other qualifications, exceptions  and  assumptions such as are set forth
in the various legal opinions delivered to  the  Agent  in  connection with
such documents or other documents.

     E.   VALID  ISSUANCE OF COMMON STOCK.  All the issued and  outstanding
Common Stock is duly  and  validly  issued,  fully  paid and nonassessable.
Except  as  described  in  the  Equity Prospectus, no other  Securities  of
CapStar  are issued and outstanding,  and  no  Person  has  any  rights  to
acquire Securities of CapStar or any partnership interest in the Borrower.

     F.   NEW  YORK STOCK EXCHANGE LISTING.  All outstanding shares of each
class of Capital  Stock of CapStar shall at all times be duly listed on the
New York Stock Exchange,  Inc.   CapStar  shall  timely  file  all  reports
required  to be filed by it with the New York Stock Exchange, Inc. and  the
Securities and Exchange Commission.

     G.   RELATED  DOCUMENTS;  REPRESENTATIONS AND WARRANTIES IN OTHER LOAN
DOCUMENTS.  Each Related Document  to  which  any  Loan Party or any of its
Subsidiaries  is  a  party is in full force and effect,  except  where  any
failure to be in full  force and effect could not reasonably be expected to
have, individually or in  the  aggregate, a Material Adverse Effect, and no
term or condition thereof has been  amended  or  modified  in  any material
respect except as in accordance with this Agreement.  Each Related Document
is  the  legally  valid and binding obligation of such parties, enforceable
against such parties in accordance with its terms, except as may be limited
by  bankruptcy, insolvency,  reorganization,  moratorium  or  similar  laws
relating  to  or  limiting  creditors'  rights  generally,  and  by general
principles   of  equity  (regardless  of  whether  such  enforceability  is
considered in  a  proceeding in equity or law), except where any failure to
be enforceable could not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.  Each Loan Party has delivered to
the Agent complete  and  correct  copies  of all Related Documents to which
such Loan Party or any of its Subsidiaries  is  a  party (including in each
case all exhibits and schedules thereto), as amended, modified or waived to
date, and of all material notices or other material  writings  delivered to
or by such Loan Party or such Subsidiary in connection therewith,  in  each
case to the extent that such documents are in the possession of, or may  be
retrieved from storage by, such Loan Party or such Subsidiary.

5.3  FINANCIAL CONDITION; CONTINGENT OBLIGATIONS.

     A.   FINANCIAL  CONDITION.   The  Borrower has heretofore delivered to
the Agent, at the Agent's request, the following  financial  statements and
information: (i) the audited consolidated balance sheet of CapStar  and its
Subsidiaries as at June 30, 1996 and the related consolidated statements of
income, stockholders' equity and cash flows of CapStar and its Subsidiaries
for  the  12  months  then ended, (ii) the unaudited statements of Property
Gross Revenues and Operating Expenses for each of the Pool A Properties for
the  calendar  year  ended   December 31,   1993,   December 31,  1994  and
December 31,  1995,  respectively,  and  (iii) the  consolidated  financial
statements of CapStar and its Subsidiaries required to  be delivered to the
Agent  pursuant  to  subsections  6.1(i),  (ii)  and (iv).  The  statements
referred  to  in  clause (i)  of the preceding sentence  were  prepared  in
conformity with GAAP and fairly  present,  in  all  material  respects, the
consolidated financial position of CapStar and its Subsidiaries  as  at the
date thereof and the consolidated results of operations of CapStar and  its
Subsidiaries  for  the period then ended, subject to changes resulting from
audit and normal year end adjustments and there are no material differences
between such consolidated  financial  position  and consolidated results of
operations   of  CapStar  and  its  Subsidiaries  as  presented   in   such
consolidated financial  statements  and the consolidated financial position
and consolidated results of operations of the Borrower and its Subsidiaries
as at the date of such consolidated financial statements and for the period
then ended.  CapStar and its Subsidiaries  do  not  (and will not following
the initial extension of credit hereunder) have any Contingent  Obligation,
contingent  liability  or  liability  for taxes, long-term lease or unusual
forward or long-term commitment that is  not  reflected  in  the  foregoing
financial statements, the notes thereto or SCHEDULE 5.3B annexed hereto and
which in any such case is material in relation to the business, operations,
properties, assets, condition (financial or otherwise) or prospects  of the
Borrower and its Subsidiaries.

     B.   CONTINGENT  OBLIGATIONS.   On  the Closing Date, the Loan Parties
and their respective Subsidiaries will not be directly or indirectly liable
with respect to any Contingent Obligations  other  than  as  set  forth  on
SCHEDULE 5.3B  annexed  hereto.   SCHEDULE  5.3B sets forth all Investments
made  by  the  Loan  Parties  and  their respective  Subsidiaries  and  all
Guaranties with respect to which the  Loan  Parties  and  their  respective
Subsidiaries  are  liable  as  of  the  Closing  Date,  including  all such
Investments and Guaranties that would be subject to subsections 7.3 and 7.4
if the same were made or incurred on or after the Closing Date.

5.4  PROPERTIES; AGREEMENTS; LICENSES.

     A.   TITLE  TO PROPERTIES; LIENS.  Each of SCHEDULE 5.4A1 and SCHEDULE
5.4A2 correctly sets  forth the interest of each Loan Party and each of its
Subsidiaries  in each of  the  Pool A  Properties  and  Pool B  Properties,
respectively.   There  are no outstanding options, rights of first refusal,
rights of first offer or  similar  rights  to purchase or otherwise acquire
such fee interest or leasehold interest, as  the  case  may be, in any such
Property, other than options and rights owned by Loan Party  or  Subsidiary
thereof,  as  applicable.   Such  Loan  Party  or  Subsidiary  thereof,  as
applicable,  has  good  and  marketable  fee  simple  title  to, or a valid
leasehold  interest  in, the Properties and good title to the remainder  of
the Collateral purported to be owned by it, free and clear of all Liens, in
each case except Permitted  Encumbrances  and  Liens  permitted pursuant to
subsection  7.2A.   All  material  fixtures,  furnishings, attachments  and
equipment  necessary  for the operation, use and  occupancy  of  each  such
Property have been installed  or  incorporated  into such Property and each
Loan Party or Subsidiary thereof, as applicable,  is  the sole owner of all
of the same, free and clear of all chattel mortgages, conditional  vendor's
liens  and  other  liens,  and  security  interests  other  than  Permitted
Encumbrances  and  Liens permitted pursuant to subsection 7.2A.  Except  as
heretofore disclosed  in writing by the Borrower to the Agent, no tax liens
have been filed against  the Borrower or any of its Subsidiaries and/or any
of their respective properties,  including  any  Property, other than Liens
for non-delinquent real property taxes.

     B.   POOL A GROUND LEASES.  Each of the Pool A  Ground  Leases and all
amendments thereto are listed on SCHEDULE 5.4B annexed hereto.   The Pool A
Ground Leases, as so amended, are in full force and effect and no  term  or
condition  thereof  will  have  been further amended or modified, or waived
after the execution thereof except  in  accordance with this Agreement; and
no Person will have failed in any material  respect to perform any material
obligation  or covenant or satisfy any condition  required  by  the  Pool A
Ground Leases to be performed or complied with.

     C.   POOL B   DOCUMENTS.    Each  of  the  Pool B  Documents  and  all
amendments  thereto  are  listed on SCHEDULE  5.4C  annexed  hereto.   Such
documents, as so amended, are  in  full  force  and  effect  and no term or
condition  thereof  have  been  amended  or  modified, or waived after  the
execution thereof except in accordance with this  Agreement,  and no Person
will  have  failed in any respect to perform any obligation or covenant  or
satisfy any condition required thereunder to be performed or complied with,
except where  failure  to  so  comply  will not then have had and could not
reasonably be expected to have, either individually  or in the aggregate, a
Material Adverse Effect.

     D.   MANAGEMENT AGREEMENTS.  Each of the Management Agreements and all
amendments thereto that have been or will be entered into  on or before the
Closing  Date  are  listed  on  SCHEDULE 5.4D annexed hereto.  As  of  each
applicable   date  of  determination   after   the   Management   Agreement
Effectiveness  Date, the Material Management Agreements, as so amended, are
in full force and  effect and no term or condition thereof has been further
amended or modified,  or  waived  after  the  execution  thereof  except in
accordance  with  this  Agreement;  and  no  Person will have failed in any
respect  to perform any obligation or covenant  or  satisfy  any  condition
required by  the  Management  Agreements  to be performed or complied with,
except where failure to so comply will not  then  have  had  and  could not
reasonably be expected to have, either individually or in the aggregate,  a
Material Adverse Effect.

     E.   SERVICING  AGREEMENTS.   The  Property  Servicing  Agreement with
respect  to each Property and, if a Liquor License exists with  respect  to
such Property,  the Liquor Operation Service Agreement with respect to such
Property,  in  each  case  with  all  amendments  thereto,  are  listed  on
SCHEDULE 5.4E annexed hereto.  The Servicing Agreements, as so amended, are
in full force and  effect and no term or condition thereof has been further
amended or modified,  or  waived  after  the  execution  thereof  except in
accordance  with  this  Agreement;  and  no  Person will have failed in any
respect  to perform any obligation or covenant  or  satisfy  any  condition
required by  the  Servicing  Agreements  to  be performed or complied with,
except where failure to so comply will not then  have  had  and  could  not
reasonably be expected to have, either individually or in the aggregate,  a
Material Adverse Effect.

     F.   FRANCHISE  AGREEMENTS.   Each of the franchise agreements and all
amendments  thereto  are  listed  on SCHEDULE  4.1J  annexed  hereto.   The
Franchise Agreements, as so amended,  are  in  full force and effect and no
term or condition thereof have been further amended  or modified, or waived
after the execution thereof except in accordance with  this  Agreement; and
no  Person  will  have  failed in any respect to perform any obligation  or
covenant or satisfy any condition  required  by the Franchise Agreements to
be performed or complied with, except where failure  to  so comply will not
then  have  had  and  could  not  reasonably  be  expected to have,  either
individually or in the aggregate, a Material Adverse Effect.

     G.   MATERIAL  LEASES.   Each  Material  Lease with  respect  to  each
Property and all amendments thereto that have been or shall be entered into
on or before the Closing Date are listed on SCHEDULE  4.1K  annexed hereto.
The Material Leases, as so amended, shall be in full force and  effect  and
no  term  or  condition  thereof  has  been further amended or modified, or
waived  after  the  execution  thereof  except   in  accordance  with  this
Agreement;  and no Person will have failed in any respect  to  perform  any
obligation or  covenant  or  satisfy any condition required by the Material
Leases to be performed or complied  with, except where failure to so comply
will not then have had and could not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.

     H.   LIQUOR LICENSES.  Each Liquor  License  issued in connection with
each  Property  is  set forth on SCHEDULE 5.4H annexed  hereto,  each  such
Liquor License is validly  issued  and  in  full  force  and effect and the
holder of each such Liquor License is a party to the Omnibus Management and
Liquor License Agreement.  The holder of each Liquor License  has the legal
right to utilize each such Liquor License in connection with the  operation
of any restaurant, bar or other alcoholic beverage service located  at  the
applicable  Property.   All  cash  and other revenues and receipts from the
operation of any owner of a Liquor License of an alcoholic beverage service
at  any  Property are collected either  by  the  licensee  thereof  or  the
Borrower or  the  applicable  Loan  Party  owning the Property and are then
deposited directly into Deposit Accounts subject  to  the  Cash  Management
System.

5.5  LITIGATION; ADVERSE FACTS.

     Except  as  set  forth  in SCHEDULE 5.5 annexed hereto, as amended  or
supplemented from time to time  (which  amendment  or  supplement  shall be
reasonably   satisfactory   to  the  Agent),  there  is  no  action,  suit,
proceeding,  arbitration  or governmental  investigation  (whether  or  not
purportedly on behalf of CapStar  or  any of its Subsidiaries) at law or in
equity or before or by any Governmental  Authority,  or to the knowledge of
CapStar  and the Borrower, changes to Applicable Law, pending  or,  to  the
knowledge  of CapStar and the Borrower, threatened against or affecting any
Loan Party or  any  of its Subsidiaries, any Property or any other property
of CapStar or any of  its Subsidiaries that has had, or could reasonably be
expected to have, either  individually  or  in  the  aggregate,  a Material
Adverse  Effect.   No  Loan  Party  nor  any  of its Subsidiaries is (i) in
violation in any material respect of any Applicable  Law or (ii) subject to
or in default with respect to any Applicable Law in either  case  that  has
had, or could reasonably be expected to have, either individually or in the
aggregate,  a Material Adverse Effect.  To the knowledge of CapStar and the
Borrower, there  are no pending or threatened actions, suits or proceedings
to revoke, attack,  invalidate,  rescind or modify the zoning affecting any
Property  or  any Authorizations heretofore  issued  with  respect  to  any
Property or asserting  that such Authorizations or the zoning affecting any
Property or any other property of any Loan Party or any of its Subsidiaries
do  not  permit  the  continued   use  of  such  Property  or  property  as
contemplated by the Loan Documents.   Except  as set forth on SCHEDULE 5.5,
to the knowledge of CapStar and the Borrower, no  Person  has  asserted any
claimed  violation  of Applicable Laws arising from the operation,  use  or
occupancy of the Properties  which  has  not  been  cured which has had, or
could  reasonably  be  expected  to  have, either individually  or  in  the
aggregate, a Material Adverse Effect.

5.6  TAXES.

     A.   PAYMENT   OF  TAXES.   Except  to   the   extent   permitted   by
subsection 6.4 and as  set  forth  on  the  financial  statements delivered
pursuant to subsections 4.1C and 5.3, all federal, state and material local
Tax  returns  and  reports  relating  to  any  Loan  Party  or any  of  its
Subsidiaries or the Properties required to be filed have been timely filed,
and   all   material   Taxes,  Impositions,  assessments,  fees  and  other
governmental charges upon any Loan Party or any of its Subsidiaries or upon
the  Properties  which  are  due  and  payable  have  been  paid  prior  to
delinquency.  Neither CapStar  nor  the  Borrower knows of any proposed Tax
assessment  against  any  Loan  Party or any of  its  Subsidiaries  or  the
Properties that could reasonably  be  expected to have, either individually
or in the aggregate, a Material Adverse Effect.  Neither any Loan Party nor
any of its Subsidiaries (i) has executed or filed with the Internal Revenue
Service or any other Governmental Authority any agreement or other document
extending, or having the effect of extending,  the period for assessment or
collection of any Taxes, assessments, fees or other governmental charges or
(ii) has  any  obligation  under  any  written  Tax  sharing  agreement  or
agreement  regarding  payments  in  lieu  of Taxes (other than  obligations
pursuant to partnership agreements to make  distributions  of  cash for the
payment of taxes).

     B.   CLASSIFICATION  AS A PARTNERSHIP.  Each of the Loan Parties  that
is a Partnership Loan Party  or  LLC Loan Party is properly classified as a
partnership for federal income tax purposes.
5.7  PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS.

     No  Loan  Party nor any of its  Subsidiaries  is  in  default  in  the
performance, observance  or fulfillment of any of the material obligations,
covenants or conditions contained  in  any  Contractual  Obligation, and no
condition exists that, with the giving of notice or the lapse  of  time  or
both,  would  constitute  such  a  default,  except where the consequences,
direct  or  indirect,  of  such  default or defaults,  if  any,  could  not
reasonably be expected to have, either  individually or in the aggregate, a
Material  Adverse  Effect.  Except as disclosed  on  SCHEDULE  5.7  annexed
hereto, no Loan Party  nor  any  of  its  Subsidiaries  is  a  party  to or
otherwise  subject  to  any  agreement  or  instrument (other than the Loan
Documents),  any charge or other internal restriction  or  any  Contractual
Obligation which  by  its  terms  or effect (i) prohibits or restricts such
Loan  Party  or Subsidiary from acquiring,  loaning  or  disposing  of  any
Property or other  asset, or any interest therein, or acquiring or entering
into, or providing any  services  under  any  Management Agreement or other
management agreement or (ii) otherwise restricts  the  conduct by such Loan
Party or any of its Subsidiaries of any business, except in each case where
the  consequences, direct or indirect, of any violation thereof  could  not
reasonably  be expected to have, either individually or in the aggregate, a
Material Adverse  Effect.   Except  as  disclosed  on SCHEDULE 5.7, no Loan
Party nor any of its Subsidiaries is a party to or is  otherwise subject to
any agreement or instrument, any charter or other internal  restriction  or
any  Contractual  Obligation which has had, or could reasonably be expected
to have, either individually  or  in  the  aggregate,  a  Material  Adverse
Effect.

5.8  GOVERNMENTAL REGULATION; SECURITIES ACTIVITIES.

     No  Loan  Party  nor  any of its Subsidiaries is subject to regulation
under the Public Utility Holding  Company  Act  of  1935, the Federal Power
Act, the Interstate Commerce Act or the Investment Company  Act  of 1940 or
under  any  other federal or state statute or regulation which could  limit
its ability to  incur  Indebtedness  or which could otherwise render all or
any portion of the Obligations unenforceable.  No Loan Party nor any of its
Subsidiaries is engaged principally, or as one of its important activities,
in  the  business of extending credit for  the  purpose  of  purchasing  or
carrying any Margin Stock.

5.9  EMPLOYEE BENEFIT PLANS.

     A.   ERISA.   Each  Loan  Party,  each of its Subsidiaries and each of
their  respective  ERISA  Affiliates  are in  compliance  in  all  material
respects with all applicable provisions  and  requirements of ERISA and the
regulations and published interpretations thereunder  with  respect to each
Employee  Benefit  Plan, and have performed in all material respects  their
respective obligations  under  each  Employee Benefit Plan.  The sponsor of
each  Employee Benefit Plan (other than  a  Multiemployer  Plan)  which  is
intended  to  qualify under Section 401(a) of the Internal Revenue Code has
received  a  determination   letter   from  the  Internal  Revenue  Service
concluding that such Employee Benefit Plan  is  so qualified, or has timely
filed (or will timely file) an application for a  determination letter with
the IRS for such employee benefit plan and has not  received an unfavorable
determination,  and  to  the  knowledge  of each Loan Party,  each  of  its
Subsidiaries and each of their respective  ERISA  Affiliates,  no event has
occurred, amendment been adopted or action been taken that would cause such
Employee Benefit Plan to lose its qualified status.

     B.   ERISA  EVENT.  With respect to each Employee Benefit Plan,  other
than a Multiemployer  Plan,  no  ERISA  Event has occurred or is reasonably
expected  to  occur.   With  respect to each  Multiemployer  Plan,  to  the
knowledge of each Loan Party,  no ERISA Event has occurred or is reasonably
expected to occur.

     C.   UNFUNDED BENEFIT LIABILITIES.   As  of  the most recent valuation
date for any Pension Plan, the accumulated benefit  obligation  (calculated
using  reasonable actuarial assumptions employed by the Borrower's  actuary
for funding  purposes)  individually  for  any  Pension  Plan,  or  in  the
aggregate  for  all  Pension  Plans, does not exceed the assets of all such
Pension  Plans by more than $5,000,000  (excluding  for  purposes  of  such
computation  any  Pension Plans with respect to which assets exceed benefit
obligations).

     D.   POTENTIAL  WITHDRAWAL LIABILITY.  As of the most recent valuation
date  for  each Multiemployer  Plan  for  which  the  actuarial  report  is
available, the  potential  current  liability  of  the  Loan Parties, their
Subsidiaries   and  their  respective  ERISA  Affiliates  for  a   complete
withdrawal from such Multiemployer Plan (within the meaning of Section 4203
of ERISA), when  aggregated  with  such  potential  current liability for a
complete  withdrawal  from  all Multiemployer Plans, based  on  information
available pursuant to Section 4221(e) of ERISA, does not exceed $5,000,000.

5.10 CERTAIN FEES.

     No broker's or finder's  fee or commission will be payable by any Loan
Party or any of its Subsidiaries  with  respect to this Agreement or any of
the transactions contemplated hereby (other  than the fees payable pursuant
to this Agreement), and the Borrower hereby indemnifies  the  Agent and the
Lenders  against,  and  agrees that it will hold the Agent and the  Lenders
harmless from, any claim,  demand  or  liability  for  any such broker's or
finder's fees or commissions payable by the Borrower alleged  to  have been
incurred  in  connection  herewith or therewith and any expenses (including
reasonable  fees,  expenses  and   disbursements  of  counsel)  arising  in
connection with any such claim, demand or liability.

5.11 SOLVENCY.

     As of the date of this Agreement,  and  after  giving  effect  to  the
consummation  of  the other transactions contemplated by this Agreement and
the other Loan Documents, as of the Closing Date, with respect to each Loan
Party and each of its Subsidiaries, (i) (a) the then fair saleable value of
the property of such  Person  (including, without limitation, any rights to
contribution from the other Loan  Parties  under  the  Loan  Documents)  is
(y) greater  than  the  total  amount  of liabilities (including contingent
liabilities) of such Person and (z) not  less  than the amount that will be
required  to pay the probable liabilities on such  Person's  then  existing
debts  as they  become  absolute  and  matured  considering  all  financing
alternatives and potential asset sales reasonably available to such person;
(b) such  Person's  capital  is  (or  will  be,  as  the  case may be), not
unreasonably  small  in  relation  to  its business or any contemplated  or
undertaken transaction; and (c) such Person  does  not  intend to incur, or
believe (nor should it reasonably believe) that it will incur, debts beyond
its ability to pay such debts as they become due; and (ii) such  Person  is
(or will be, as the case may be), ``solvent'' within the meaning given that
term  and  similar  terms  under  Applicable  Laws  relating  to fraudulent
transfers  and  conveyances.   For  purposes of clause (i) of the preceding
sentence, the amount of any contingent  liability  at  any  time  shall  be
computed as the amount that, in light of all of the facts and circumstances
existing  at  such  time,  represents  the  amount  that  can reasonably be
expected to become an actual or matured liability.

5.12 DISCLOSURE.

     No  representation  or  warranty of any Loan Party contained  in  this
Agreement,  the other Loan Documents  and the Related Documents to which it
is  a  party  or in any other document, certificate  or  written  statement
furnished to the Agent or the Lenders by or on behalf of any Loan Party for
use in connection  with the transactions contemplated by the Loan Documents
and the Related Documents  contains or will contain any untrue statement of
a material fact or omits or  will  omit  to state a material fact (known to
such Loan Party, in the case of any document not furnished by it) necessary
in order to make the statements contained  herein or therein not misleading
in light of the circumstances in which the same  were made or will be made,
as  the case may be.  The projections and pro forma  financial  information
contained  in  such  materials  are  based or will be based upon good faith
estimates and assumptions believed to  be  reasonable  at the time made, it
being recognized by the Agent and the Lenders that such  projections  as to
future  events are not to be viewed as facts and that actual results during
the period or periods covered by any such projections may differ materially
from the  projected  results.   There  is  no  fact known to CapStar or the
Borrower (other than matters of a general economic nature) that has had, or
could  reasonably  be  expected  to  have, either individually  or  in  the
aggregate, a Material Adverse Effect and that has not been disclosed in any
of the Loan Documents and the Related  Documents to which any Loan Party is
a party as of the date hereof or in such  other documents, certificates and
statements  furnished  to  the  Lenders  for use  in  connection  with  the
transactions contemplated hereby.

5.13 LIENS ON THE COLLATERAL.

     A.   GENERAL.   Except as expressly provided  in  the  legal  opinions
delivered pursuant to subsection 4.1O, the provisions of this Agreement and
the Security Documents  are  effective  to create and maintain, upon proper
filing or recording or taking of possession, as applicable, in favor of the
Agent on behalf of the Lenders valid and  legally  enforceable Liens on all
of the Pool A Properties and all of the remainder of  the  Collateral  and,
when  all  necessary  and  appropriate  recordings  and  filings  have been
effected  in  all necessary and appropriate public offices, and payment  is
made of any applicable mortgage recording, intangible and/or similar taxes,
this Agreement  and  the Security Documents will constitute perfected Liens
on all of such Properties  and all of the remainder of the Collateral prior
and  superior  to  all  other Liens  except  Liens  permitted  pursuant  to
subsection 7.2; PROVIDED,  HOWEVER,  that  the  perfection  against Persons
other  than  the  Borrower of such a Lien on the Rents in respect  of  such
Properties  may  in  certain   jurisdictions  require  the  Agent  to  have
possession of such Rents and/or control of such Properties.
     B.   MORTGAGES.  Each Mortgage  upon  execution  and  delivery of such
Mortgage by the applicable Loan Party will be a valid and enforceable first
priority  Lien  on  the  Pool A  Property  that  such Mortgage purports  to
encumber, and such Mortgage, when such Mortgage is  recorded  in  the  real
property  records of the county or parish in which such Property encumbered
by such Mortgage  is  located  and  upon payment of any applicable mortgage
recording, intangible and/or similar  taxes, will be a perfected, valid and
enforceable first priority Lien on such  Property  in  favor  of the Agent,
which  Property  will  then be free and clear of all Liens having  priority
over the first Lien of such Mortgage, except for Permitted Encumbrances.

     C.   ASSIGNMENTS OF  RENTS  AND LEASES.   Except as expressly provided
in  the  legal  opinions  delivered  pursuant   to   subsection 4.1O,  each
Assignment  of  Rents  and Leases, upon execution and recordation  of  such
Assignment of Rents and  Leases  in the real property records of the county
or parish in which the Pool A Property affected by such Assignment of Rents
and  Leases is located and upon payment  of  any  applicable  recording  or
intangible  taxes,  will be, as to each Pool A Property, a perfected, valid
and enforceable first  priority present assignment of or Lien on the Leases
affecting such Property  and  of the Rents of and from such Property, which
Pool A Properties will then otherwise be free and clear of all Liens having
priority over the Assignment of  Rents  and  Leases,  except  for Permitted
Encumbrances.   As of the Closing Date, the Borrower represents  that  upon
recordation of each  Assignment of Rents and Leases the Agent has taken all
actions necessary to obtain,  and  as  of the Closing Date the Agent has, a
valid and perfected first priority (or,  to  the  extent  described  in the
immediately  preceding sentence, second priority) assignment of or Lien  on
the Rents from  the  Pool A  Properties  and of all security for the Leases
affecting  such  Properties,  including cash  or  securities  deposited  as
security under such Leases subject to the prior right of the Tenants making
such deposits; PROVIDED, HOWEVER, that the perfection against Persons other
than the Borrower of such a Lien on the Rents in respect of such Properties
may in certain jurisdictions require  the  Agent to have possession of such
Rents and/or control of such Properties.

     D.   ATLANTA DOCUMENTS.  The Atlanta Mortgage  is  a  perfected, valid
and enforceable first priority Lien on the Atlanta Airport Property and the
Atlanta  Airport  Property  is free and clear of all Liens having  priority
over the first Lien of such Mortgage,  except  for  Permitted Encumbrances.
The aggregate principal amount of the Atlanta Note as  of  the Closing Date
is  $23,609,456  and  the  obligor  on the Atlanta Note has no defenses  to
payment, counterclaims with respect thereto or any right to set-off against
any payment due thereunder.  The Atlanta  Documents  represent  the  entire
agreement between the Atlanta Airport Sub and the Borrower with respect  to
the loan evidenced and secured thereby.  The Borrower is the present holder
of  the lender's interest in the Atlanta Documents and has all right, power
and authority  to  grant  consents  and  to  otherwise  act  as  the lender
thereunder, subject to the terms and conditions thereof.  The maturity date
of  the  Atlanta  Note  is  August 1,  1999.  No event has occurred and  no
condition exists that constitutes, or that with the giving of notice or the
lapse  of  time or both would constitute,  a  material  default  under  the
Atlanta Note, the Atlanta Mortgage or any of the other Atlanta Documents by
any party thereto.

     E.   MECHANICS'   LIENS.   Other  than  with  respect  to  a  Property
currently subject to a Renovation  or  Restoration, and except as bonded or
contested in accordance with the provisions of subsection 6.9 or as insured
over by Title Policies that are then in effect pursuant to subsection 4.1E,
no mechanic's liens have been filed against any Property.

     F.   FILINGS  AND RECORDINGS.  All filings  (including  all  financing
statements and all assignments  of  financing  statements under the Uniform
Commercial Code) have been delivered to the Agent for filing in each public
office in which such filings and recordings are  required  or  advisable to
perfect the Liens on each of the Pool A Properties and the other Collateral
granted by the Loan Parties pursuant to the Security Documents and,  except
for  the  filing  of continuation statements with respect to such financing
statements  as may be  required  or  advisable  to  be  filed  at  periodic
intervals, no periodic refiling or periodic recording is presently required
to protect and preserve such Liens and security interests.

5.14 ZONING; AUTHORIZATIONS.

     A.   ZONING.   Except  as  set forth on SCHEDULE 5.14A annexed hereto,
the use and operation by each Loan  Party  or  any  of its Subsidiaries, as
applicable,  of  each  Property  as a commercial hotel with  related  uses,
separate and apart from any other properties, constitutes a legal use under
applicable zoning regulations (as  the  same may be modified by special use
permits or the granting of variances) and complies in all material respects
with  all Applicable Laws and all applicable  Insurance  Requirements,  and
does not  violate  any Authorizations or other material approvals, material
restrictions of record or any material agreement affecting any Property (or
any portion thereof) to which such Loan Party or such Subsidiary is a party
or by which such Loan  Party,  such Subsidiary or such Property (or portion
thereof) is bound, except for violations and failures to comply which could
not  reasonably  be  expected to result,  either  individually  or  in  the
aggregate, in a Material  Adverse  Effect.   Except as set forth on the pro
forma   Title   Policies   or   the   Surveys   delivered    pursuant    to
subsections 4.1E(iii)  and  4.1E(vii), respectively, neither the zoning nor
any right of access to or use  of  any  Property is to any extent dependent
upon or related to any real property other than such Property.

     B.   AUTHORIZATIONS.   There  have been  issued  in  respect  of  each
Property all Authorizations necessary  to own, operate, use and occupy such
Property in the manner operated by the Loan  Parties  and  their respective
Subsidiaries,  and  their respective predecessors in interest,  as  of  the
Closing Date and contemplated  by  the  Loan  Parties  and their respective
Subsidiaries to be operated on and after the Formation Date  (including any
required  permits  relating  to  Hazardous  Materials).   CapStar  and  the
Borrower have no knowledge that any Authorization necessary or required  to
own,  operate, use and occupy any Property in the manner currently operated
by the  Tenants under any Material Lease and contemplated to be operated by
the Tenants  on  and after the Closing Date (including any required permits
relating to Hazardous  Materials)  has  not  been issued and is not in full
force  and  effect,  other  than  any  such Authorizations  which,  if  not
obtained, could not reasonably be expected  to have, either individually or
in the aggregate, a Material Adverse Effect.   No Loan Party nor any of its
Subsidiaries nor, to the knowledge of CapStar and  the  Borrower, any prior
owner  thereof, has received any notice of violation or revocation  thereof
except for  those  which  could  not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.

5.15 PHYSICAL CONDITION; ENCROACHMENT; CAPITAL EXPENDITURES.

     A.   PHYSICAL CONDITION; ENCROACHMENT.   Except  as  disclosed  on the
Engineering Reports delivered pursuant to subsection 2.9A, 2.9B or 4.1L and
the property improvement plans delivered pursuant to 4.1J, each Property is
free of material structural defects and is in good repair (normal wear  and
tear  excepted)  and  all  building systems contained therein and all other
material items of Collateral  are  in  good  working  order in all material
respects  subject  to  ordinary wear and tear, except as disclosed  in  the
Engineering Reports, and  is free and clear of any damage that would affect
materially and adversely the  value  of  such  Property  or the use of such
Property  for its intended purposes.  To the knowledge of CapStar  and  the
Borrower, other than as described in the Title Policy and in any Survey, no
Improvement  at  any  Property  encroaches  upon any building line, setback
line, side yard line or any recorded or visible easement.

     B.   CAPITAL  EXPENDITURES.   SCHEDULE  5.15B   annexed   hereto,   as
supplemented  from time to time by a written notice delivered to the Agent,
sets forth a complete  and  accurate  list  of  the  capital expenditure or
similar reserves required in respect of any Property pursuant  to  a Ground
Lease,  any  agreement  pursuant to which any of the Loan Parties and their
respective Subsidiaries shall  have  incurred or may incur any Indebtedness
or any other agreement, instrument or  other  document, other than the Loan
Documents.

5.16 INSURANCE.

     All insurance required to be maintained by  the Loan Parties and their
respective  Subsidiaries  pursuant  to this Agreement  or  any  other  Loan
Document is in full force and effect  in accordance with the terms thereof.
As to each Property located in an area  identified by the Federal Emergency
Management Agency as having special flood  hazards,  if  flood insurance is
available, a flood insurance policy is in effect.  All premiums  have  been
paid  with  respect  to  each insurance policy required to be maintained by
CapStar and its Subsidiaries  pursuant  to this Agreement or any other Loan
Document.  SCHEDULE 5.16 annexed hereto contains  a  complete  and accurate
description of all policies of insurance that will be in effect  as  of the
Closing Date.

5.17 LEASES.

     There  is  no  default  or event which with notice or lapse of time or
both would constitute a default under any of the provisions of any Material
Lease affecting any Property that  has had, or could reasonably be expected
to  have,  either  individually or in the  aggregate,  a  Material  Adverse
Effect.  No litigation  is  currently pending or has been threatened by any
Tenant in connection with any  Material  Lease  affecting any Property that
has had, or could reasonably be expected to have, either individually or in
the aggregate, a Material Adverse Effect.  All Material  Leases  and  other
Leases  material  to  the operation of the Properties as hotels are in full
force and effect, except to the extent such failure could not reasonably be
expected to have, individually  or  in  the  aggregate,  a Material Adverse
Effect.

5.18 ENVIRONMENTAL   REPORTS;   ENGINEERING  REPORTS;  APPRAISALS;   MARKET
STUDIES.

     The Borrower has delivered to  the  Agent  and the Lenders correct and
complete   copies   of  all  environmental  audits,  engineering   reports,
appraisals and market  studies  with respect to each Property that any Loan
Party or any of its Subsidiaries has in its possession.

5.19 NO CONDEMNATION OR CASUALTY.

     No condemnation or other like proceedings (including relocation of any
roadways abutting any Property or  change  in  grade  of  such  roadways or
denial  of  access  to  any Property) that has had, or could reasonably  be
expected to result in, a  Material  Adverse  Effect, are pending and served
nor, to the knowledge of CapStar and the Borrower,  threatened  against any
Property  in  any  manner  whatsoever.   No  casualty  has  occurred to any
Property  that  has  had  or  could reasonably be expected to have,  either
individually or in the aggregate, a Material Adverse Effect.

5.20 UTILITIES AND ACCESS.

     To the extent necessary for  the  full  utilization  of  each  Pool  A
Property  in  accordance  with  its  current  use, telephone services, gas,
steam, electric power, storm sewers, sanitary sewers  and  water facilities
and all other utility services are available to each Pool A  Property,  are
adequate  to  serve each such Property, exist at the boundaries of the Land
and are not subject  to  any  conditions,  other than normal charges to the
utility supplier, which would limit the use of such utilities.  All streets
and easements necessary for the occupancy and  operation  of  each  Pool  A
Property  are  available  to  the  boundaries  of  the Land.  All necessary
rights-of-way for all roads, which are sufficient to  permit  each  Pool  A
Property  to be utilized fully for its current use, have been completed and
are serviceable,  and,  to  the  knowledge of CapStar and the Borrower, all
public rights-of-way through or adjacent to the Pool A Properties have been
acquired and dedicated and accepted  for  maintenance and public use by the
applicable Governmental Authorities.

5.21 INTELLECTUAL PROPERTY.

     A.   OWNERSHIP; IP LICENSE AGREEMENTS.   The  Loan  Parties  and their
respective  Subsidiaries own, or are licensed to use or otherwise have  the
lawful right  to  use,  the  Intellectual Property.  Except as set forth on
SCHEDULE 5.21A annexed hereto,  all  such Intellectual Property (other than
rights under Franchise Agreements) is fully protected and duly and properly
registered, filed or issued in the appropriate office and jurisdictions for
such registrations, filing or issuances,  except  where  the  lack  of  the
lawful  right  to  use  such  Intellectual Property could not reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect,  and  all  registered  Intellectual   Property   and   all  pending
applications  and the jurisdictions in which such Intellectual Property  is
registered or will be registered on or before the Closing Date, and in each
case  the  Loan  Party   holding   rights   therein,   are   identified  in
SCHEDULE 5.21A  annexed  hereto.  Each of the license agreements  (together
with any such agreements entered  into  after  the  Closing  Date, the ``IP
LICENSE  AGREEMENTS''),  other  than the Franchise Agreements, pursuant  to
which any Loan Party or any of its  Subsidiaries  has  rights  or will have
rights  on  or  before  the  Closing Date to use any material  Intellectual
Property as of the Closing Date is identified in SCHEDULE 5.21A.  Each Loan
Party and each of its Subsidiaries is in compliance with the material terms
of each IP License Agreement to  which  it  is  a  party  and  each such IP
License Agreement is in full force and effect, except where the  failure to
be in compliance or the failure to be in full force and effect (i) has  not
had and could not reasonably be expected to have, either individually or in
the  aggregate,  a  Material  Adverse  Effect or (ii) result in an Event of
Default or Potential Event of Default hereunder.

     B.   NO ADVERSE CLAIMS.  (i) No claim  has  been asserted with respect
to the use of any such Intellectual Property by the  Loan Parties and their
respective Subsidiaries or, to the knowledge of CapStar or the Borrower, by
any other Person challenging or questioning the validity  or  effectiveness
of  any  such  Intellectual Property, and neither CapStar nor the  Borrower
knows of any valid  basis for any such claim which, in either case, has had
or could reasonably be  expected  to  have,  either  individually or in the
aggregate, a Material Adverse Effect; and (ii) the use of such Intellectual
Property by each Loan Party and each of its Subsidiaries  does not infringe
on the rights of any Person, subject to such claims and infringements as do
not, in the aggregate, give rise to any liability on the part  of  any Loan
Party  or  any  of  its  Subsidiaries  that  has had or could reasonably be
expected  to  have,  either individually or in the  aggregate,  a  Material
Adverse Effect.  The consummation  of the transactions contemplated by this
Agreement will not in any manner or  to  any extent impair the ownership of
(or  the  license  to use, as the case may be)  any  of  such  Intellectual
Property by any Loan Party or any of its Subsidiaries.

5.22 WETLANDS.

     Except as disclosed  on  SCHEDULE 5.22  annexed  hereto,  none  of the
Improvements  on  any  Property  are  constructed on land designated by any
Governmental Authority having land use jurisdiction as wetlands.

5.23 CASH MANAGEMENT SYSTEM.

     The  summary  of  the  Cash  Management   System  attached  hereto  as
SCHEDULE 5.23 is accurate and complete in all material  respects  and  does
not  omit  to  state any material fact necessary to make the statements set
forth therein not  misleading.   No  Loan Party nor any of its Subsidiaries
owns  any  Deposit  Account  which is not  described  in  SCHEDULE 5.23  or
otherwise permitted pursuant to  subsection 6.15.   After the Closing Date,
there  will  be  no  change to the Cash Management System  (other  than  as
permitted by subsection 6.15) except such changes as have been disclosed to
the Agent in writing and  approved  by  the  Agent  in  writing.  Except as
disclosed  on  SCHEDULE  5.23, Cash Management Letter covering  each  Local
Account or Concentration Account included in the Cash Management System has
been delivered to the Agent.

5.24 LABOR MATTERS.

     There are no strikes or other labor disputes against any Loan Party or
any of its Subsidiaries, pending  or,  to  the knowledge of CapStar and the
Borrower, threatened that have had or could reasonably be expected to have,
either individually or in the aggregate, a Material  Adverse Effect.  Hours
worked by and payments made by any Loan Party or any of its Subsidiaries to
their respective employees are not in violation in any  material respect of
the Fair Labor Standards Act or any other applicable law  dealing with such
matters.

5.25 EMPLOYMENT AND LABOR AGREEMENTS.

     Except  as  disclosed  on SCHEDULE 5.25 annexed hereto, there  are  no
employment agreements covering  management  employees  of any Loan Party or
any  of  its  Subsidiaries  and  there  are no collective labor  agreements
covering any employees of any Loan Party  or any of its Subsidiaries.  Each
Loan Party and each of its Subsidiaries is  in  compliance  in all material
respects  with  the terms and conditions of all such collective  bargaining
agreements.


                             SECTION 6
                       AFFIRMATIVE COVENANTS

     Each of CapStar  and  the Borrower covenants and agrees that, from and
after the Closing Date and so  long thereafter as the Commitments hereunder
shall remain in effect and until payment in full of the Loans and the other
Obligations (other than indemnification  obligations with respect to claims
that  have  not been asserted at the time that  the  Loans  and  all  other
Obligations have  been  paid in full) and the cancellation or expiration of
all Letters of Credit, each  of  CapStar and the Borrower shall perform and
shall cause each of their respective  Subsidiaries to perform all covenants
in this Section 6.

6.1  FINANCIAL STATEMENTS AND OTHER REPORTS.

     CapStar shall maintain and cause each  of its Subsidiaries to maintain
a  system  of accounting established and administered  in  accordance  with
sound  business   practices  to  permit  preparation  of  consolidated  and
consolidating financial  statements  in conformity with GAAP.  The Borrower
shall deliver to the Agent:

          (i)  MONTHLY PROPERTY OPERATING STATEMENTS:  as soon as available
     and in any event within 30 days after  the end of each calendar month,
     commencing with respect to the calendar  month  ending  September  30,
     1996,  a  statement  of Property Gross Revenues and Operating Expenses
     and any other expenses  with  respect  to each Property separately, in
     each case for the 12 month period ending  on  the  last  day  of  such
     calendar  month,  in  reasonable  detail satisfactory to the Agent and
     certified by the Chief Executive Officer or Chief Financial Officer of
     CapStar and the Borrower stating that,  subject  to normal adjustments
     following  the  preparation  of the financial statements  referred  to
     below in clauses (iii) and (iv),  respectively, (x) such statements of
     Property  Gross Revenues and Operating  Expenses  and  other  expenses
     fairly present, in all material respects, the results of operations of
     the  Properties  indicated  for  the  periods  indicated  and  (y) all
     Operating  Expenses  and  any  other  expenses  with  respect  to each
     Property  which have become due and payable as of the last day of  the
     calendar month  next  preceding  the delivery of such income statement
     have  been  fully  paid  or  recognized  by  CapStar  or  any  of  its
     Subsidiaries;
         (ii)  BORROWING BASE CERTIFICATES:   from  and  after  the Closing
     Date,  as soon as available and in any event (a) within 30 days  after
     the end  of  each  calendar  quarter  of  each  calendar  year (or, if
     requested  by  the  Agent,  each  calendar  month),  a  Borrowing Base
     Certificate,  in  the form attached hereto as EXHIBIT VI and  together
     with the financial  statements  and  other information utilized by the
     Borrower to calculate the Borrowing Base  and  the  Total  Utilization
     (including  the unexpended portion of budgets for Deferred Maintenance
     required by subsection 6.16B and for Renovations permitted pursuant to
     subsection 7.16),  and  certified  by  the  Chief Executive Officer or
     Chief Financial Officer of CapStar and the Borrower,  calculated as of
     the  last  day  of  such calendar month, (b) within 5 days  after  the
     delivery of a written notice pursuant to subsection 2.9, 2.10 or 7.15B
     (but in no event later  than  the  occurrence  or effectiveness of the
     event or condition required to be specified in such written notice), a
     Borrowing Base Certificate calculated as of the date of the occurrence
     or  effectiveness  of  the event or condition specified  therein,  and
     together with the financial  statements  and other information used by
     the Borrower to calculate the Borrowing Base,  (c) within 5 days after
     the  delivery  of  a  Notice  of  Renovation/Restoration  pursuant  to
     subsection 6.11A, 6.11C, 6.12A or 7.16 (but in no event later than the
     commencement  of  a Major Renovation/Restoration),  a  Borrowing  Base
     Certificate calculated  as  of the date of commencement of any related
     Major  Renovation/Restoration,   and   together   with  the  financial
     statements and other information used by the Borrower to calculate the
     Borrowing  Base,  (d) within 5 days after a casualty  or  Taking  with
     respect to, or the  Release  of,  any  Pool A Property (or any portion
     thereof), a Borrowing Base Certificate calculated  as  of  the date of
     such  casualty,  Taking,  Release,  expiration, cancellation or  other
     termination,  as  the case may be, and  together  with  the  financial
     statements and other information used by the Borrower to calculate the
     Borrowing Base, and  (e) upon written request from the Agent or at the
     option of the Borrower,  a Borrowing Base Certificate calculated as of
     the date requested by the  Agent  in  such  request or selected by the
     Borrower, as the case may be, in reasonable detail satisfactory to the
     Agent and together with the financial statements and other information
     used by the Borrower to calculate the Borrowing Base;

        (iii)  QUARTERLY   FINANCIAL   STATEMENTS   OF  CAPSTAR   AND   ITS
     SUBSIDIARIES:  as soon as available and in any event  within  50  days
     after  the  end  of  each  calendar  quarter  of  each  calendar year,
     commencing  with respect to the calendar quarter ending September  30,
     1996,  (a) the   consolidated   balance   sheet  of  CapStar  and  its
     Subsidiaries as at the end of such calendar  quarter  and  the related
     consolidated statements of income, stockholders' equity and cash flows
     of CapStar and its Subsidiaries for such calendar quarter and  for the
     period from the beginning of the then current calendar year to the end
     of  such  calendar  quarter, setting forth in each case in comparative
     form the corresponding  figures  for  the corresponding periods of the
     previous  year  and  the  corresponding  figures  from  the  plan  and
     financial  forecast for the current year delivered  pursuant  to  this
     subsection,  and (b) the consolidating financial statements of CapStar
     and its Subsidiaries  (including  balance sheets and income statements
     segmenting any Subsidiaries of CapStar  or  groups  of Subsidiaries of
     CapStar,  as  requested  by  the  Agent in its reasonable  discretion)
     together with any adjustments and/or  eliminations needed to reconcile
     such  Subsidiary financial statements to  the  consolidated  financial
     statements  of  CapStar, all in reasonable detail (it being understood
     and agreed that,  to  the  extent  CapStar's quarterly report filed on
     Form 10-Q with the Securities and Exchange  Commission for such period
     contains  the foregoing information, such quarterly  report  shall  be
     deemed to comply with the foregoing requirements) and certified by the
     Chief Executive  Officer or the Chief Financial Officer of CapStar and
     the Borrower stating  that  (x)  such  consolidated  and consolidating
     financial  statements  fairly  present, in all material respects,  the
     financial condition of CapStar and  its  Subsidiaries  as at the dates
     indicated and the results of their operations and their cash flows for
     the  periods  indicated, subject to changes resulting from  audit  and
     normal year-end  adjustments  and  (y)  except  as noted, there are no
     material differences between such consolidated financial statements of
     CapStar and its Subsidiaries and the consolidated financial statements
     of the Borrower and its Subsidiaries with respect to such quarter;

         (iv)  YEAR-END FINANCIAL STATEMENTS:  as soon  as available and in
     any  event  within  100  days  after  the  end of each calendar  year,
     commencing with respect to the calendar year ending December 31, 1996,
     (a) the consolidated balance sheet of CapStar  and its Subsidiaries as
     at  the  end  of  such  calendar  year  and  the related  consolidated
     statements of income, stockholders' equity and  cash  flows of CapStar
     and  its  Subsidiaries for such calendar year, setting forth  in  each
     case in comparative  form  the  corresponding figures for the previous
     calendar  year  and  the  corresponding  figures  from  the  plan  and
     financial  forecast delivered  pursuant  to  this  subsection for  the
     calendar year  covered  by  such  consolidated  financial  statements,
     (b) the balance sheets and related income statements of each Property,
     (c) the   consolidating   financial  statements  of  CapStar  and  its
     Subsidiaries  (including  balance   sheets   and   income   statements
     segmenting  any  Subsidiaries of CapStar or groups of Subsidiaries  of
     CapStar, as requested  by  the  Agent  in  its  reasonable discretion)
     together with any adjustments and/or eliminations  needed to reconcile
     such  Subsidiary  financial  statements to the consolidated  financial
     statements of CapStar, all of  the  foregoing in reasonable detail and
     certified by the Chief Executive Officer or Chief Financial Officer of
     CapStar and the Borrower stating that  they  present  fairly,  in  all
     material   respects,  the  financial  condition  of  CapStar  and  its
     Subsidiaries  as  at  the  dates  indicated  and  the results of their
     operations and their cash flows for the periods indicated,  and (d) in
     the  case  of  the  consolidated  financial statements referred to  in
     clause  (a),  a  report thereon of KPMG  Peat  Marwick  LLP  or  other
     independent accountants  of  recognized  national standing selected by
     CapStar and reasonably satisfactory to the  Agent,  which report shall
     be unqualified, shall express no doubts about the ability  of  CapStar
     and  its  Subsidiaries  to continue as a going concern and shall state
     that such consolidated financial  statements  fairly  present,  in all
     material   respects,   the  financial  position  of  CapStar  and  its
     Subsidiaries  as at the dates  indicated  and  the  results  of  their
     operations  and   their  cash  flows  for  the  periods  indicated  in
     conformity with GAAP  applied  on  a basis consistent with prior years
     (except as otherwise disclosed in such  financial statements) and that
     the   examination  by  such  accountants  in  connection   with   such
     consolidated  financial  statements  has  been made in accordance with
     generally accepted auditing standards;

          (v)  OFFICERS' AND COMPLIANCE CERTIFICATES:   together  with each
     delivery  of  financial  statements  of  CapStar  and its Subsidiaries
     pursuant to subdivisions (i), (iii) and (iv) above,  (a) an  Officers'
     Certificate  of  CapStar  and the Borrower stating that (1) the signer
     has reviewed the terms of this Agreement and has made, or caused to be
     made under his or her supervision,  a  review  in reasonable detail of
     the transactions and condition of CapStar and its Subsidiaries and the
     Collateral  during  the accounting period covered  by  such  financial
     statements, (2) such  review has not disclosed the existence during or
     at the end of such accounting  period,  (3) the  signer  does not have
     knowledge   of  the  existence  as  at  the  date  of  such  Officers'
     Certificate,  of  any  condition or event that constitutes an Event of
     Default or Potential Event  of  Default,  or, if any such condition or
     event existed or exists, specifying the nature and period of existence
     thereof  and  what  action CapStar and the Borrower  have  taken,  are
     taking and propose to take with respect thereto and (4) except for the
     minority interest reflected on the balance sheet of the Borrower, such
     financial statements  do  not  differ in any material respect from the
     corresponding consolidated financial  statements  of  the Borrower and
     its  Subsidiaries;  and (b) a Compliance Certificate demonstrating  in
     reasonable detail compliance  during  and at the end of the applicable
     accounting periods with the covenants set forth in subsection 7.6;

         (vi)  ACCOUNTANTS' CERTIFICATION:   together with each delivery of
     financial statements of CapStar pursuant  to subdivision (iv) above, a
     written  statement  by  KPMG  Peat Marwick LLP  or  other  independent
     accountants of recognized national  standing  selected  by CapStar and
     reasonably  satisfactory  to  the  Agent  giving  the  report  thereon
     (a) stating  in substance that their audit examination has included  a
     review of the  terms of this Agreement and the other Loan Documents as
     they  relate  to  accounting  matters,  and  (b) stating  whether,  in
     connection with their  audit  examination, any condition or event that
     constitutes an Event of Default or Potential Event of Default has come
     to their attention and, if such a condition or event has come to their
     attention, specifying the nature  and  period  of  existence  thereof;
     PROVIDED, HOWEVER, that such accountants shall not be liable by reason
     of  any  failure  to obtain knowledge of any such Event of Default  or
     Potential Event of  Default  that would not be disclosed in the course
     of their audit examination;

        (vii)  ACCOUNTANTS' REPORTS:  promptly upon receipt thereof (unless
     restricted  by  applicable  professional  standards),  copies  of  all
     reports submitted to CapStar  or  any of its Subsidiaries by KPMG Peat
     Marwick LLP or any other independent  accountants  in  connection with
     each  annual,  interim or special audit of the consolidated  financial
     statements of CapStar  and  its Subsidiaries made by such accountants,
     including  any  comment  letter   submitted  by  such  accountants  to
     management in connection with their annual audit;

       (viii)  RECONCILIATION STATEMENTS:  if, as a result of any change in
     accounting principles and policies  from those used in the preparation
     of the audited financial statements referred to in subsection 5.3, the
     consolidated financial statements of  the CapStar and its Subsidiaries
     delivered  pursuant  to  subdivisions  (i),  (iii)  or  (iv)  of  this
     subsection 6.1 differ in any material respect  from  the  consolidated
     financial statements that would have been delivered pursuant  to  such
     subdivisions  had no such change in accounting principles and policies
     been made, then  (a) together  with  the  first  delivery of financial
     statements  pursuant  to  subdivision  (i),  (iii)  or  (iv)  of  this
     subsection 6.1   following   such   change,   consolidated   financial
     statements  of  CapStar  and  its  Subsidiaries  for  (1) the  current
     calendar  year  to  the  effective date of such change and (2) the two
     full calendar years immediately  preceding  the calendar year in which
     such change is made, in each case prepared on  a pro forma basis as if
     such change had been in effect during such periods,  and  (b) together
     with   each  delivery  of  financial  statements  and  Borrowing  Base
     Certificate  pursuant  to subdivision (i), (ii), (iii) or (iv) of this
     subsection 6.1 following such change, a written statement of the Chief
     Financial  Officer or Chief  Executive  Officer  of  CapStar  and  the
     Borrower setting  forth  the  differences which would have resulted in
     the calculation of the Borrowing  Base  and the covenants set forth in
     Section 6 if such Borrowing Base Certificate  or financial statements,
     as the case may be, had been prepared without giving  effect  to  such
     change;

         (ix)  EVIDENCE  OF  INSURANCE:   together with the delivery of the
     statements pursuant to subsection 6.1(i)  above,  evidence  reasonably
     satisfactory  to  the Agent that the monthly premiums with respect  to
     the insurance required  to  be  maintained pursuant to subsection 6.10
     have  been  paid  for  the  current  month;   PROVIDED  that  evidence
     previously delivered pursuant to this clause (ix)  with respect to the
     prior  payment  of  premiums  for  the  current  month  need   not  be
     redelivered;

          (x)  SEC   FILINGS  AND  PRESS  RELEASES:   promptly  upon  their
     becoming available,  copies  of (a) all financial statements, reports,
     notices  and proxy statements sent  or  made  available  generally  by
     CapStar to  its security holders, (b) all regular and periodic reports
     and all registration  statements  (other than on Form S-8 or a similar
     form) and prospectuses, if any, filed  by CapStar or the Borrower with
     the New York Stock Exchange, Inc., any other  securities  exchange  or
     with  the  Securities  and  Exchange  Commission  or  any Governmental
     Authority or private regulatory authority, and (c) all  press releases
     and other statements made available generally by CapStar or any of its
     Subsidiaries to the public or to the securityholders of CapStar;

         (xi)  EVENTS  OF  DEFAULT,  ETC.:   promptly upon CapStar  or  the
     Borrower  obtaining  knowledge  (a) of  any condition  or  event  that
     constitutes  an Event of Default or Potential  Event  of  Default,  or
     becoming aware  that  the  Agent or any Lender has given any notice or
     taken any other action with  respect  to a claimed Event of Default or
     Potential Event of Default, (b) that any  Person  has given any notice
     to CapStar or any of its Subsidiaries or taken any  other  action with
     respect  to  a  claimed  default  or  event  or  condition of the type
     referred to in subsection 8.1B, 8.1C, 8.1D, 8.1E,  8.1F, 8.1H or 8.1I,
     (c) of any condition or event that constitutes or may (upon the giving
     or receiving of notice or the lapse of time, later,  or  otherwise)  a
     default,  a  potential  event of default, an event of default (in each
     case, as defined in the agreement  or  instrument creating, evidencing
     or  governing any such Indebtedness) under  or  with  respect  to  any
     Indebtedness  (other  than  the  Indebtedness  hereunder),  any Pool B
     Obligation  or any Related Document (if, with respect to such  Related
     Document, the occurrence of a default, a potential event of default or
     an event of default  could  reasonably be expected to result in a loss
     or liability to a Loan Party  or  any of its Subsidiaries of more than
     $1,000,000), or becoming aware that  any  agent,  trustee,  lender  or
     security holder with respect thereto has given any notice or taken any
     other  action  with  respect  to  such  condition or event, (d) of any
     condition or event that would be required to be disclosed in a current
     report filed by CapStar with the Securities and Exchange Commission on
     Form 8-K (Items 1, 2, 4, and 6 of such Form  as  in effect on the date
     hereof)  if  CapStar  were  required  to file such reports  under  the
     Exchange  Act, (e) that there has commenced,  or  is  intended  to  be
     commenced, a Major Renovation/Restoration of any Property with respect
     to which a  Notice of Renovation/Restoration shall not previously have
     been delivered  to  the Agent or (f) of the occurrence of any event or
     change that has had,  or  could reasonably be expected to have, either
     individually  or  in the aggregate,  a  Material  Adverse  Effect,  an
     Officers' Certificate specifying the nature and period of existence of
     such condition, event  or  change,  or  specifying the notice given or
     action taken by any such Person and the nature  of  such claimed Event
     of Default, Potential Event of Default, default, event  or  condition,
     and  what  action CapStar and the Borrower have taken, are taking  and
     propose to take with respect thereto;

        (xii)  LITIGATION  OR OTHER PROCEEDINGS:  (a) promptly upon CapStar
     or the Borrower obtaining  knowledge  of  (x) the  institution  of any
     action,   suit,   proceeding   (whether  administrative,  judicial  or
     otherwise),  governmental  investigation  or  arbitration  against  or
     affecting CapStar or any of  its  Subsidiaries,  or  any  property  of
     CapStar   or   such  Subsidiary  (collectively,  ``PROCEEDINGS'')  not
     previously disclosed  in  writing  by  CapStar  or the Borrower to the
     Lenders or (y) any material development in any Proceeding that, in any
     case:

               (1)  if adversely determined, could reasonably  be  expected
          to  have,  either  individually  or  in the aggregate, a Material
          Adverse Effect; or

               (2)  seeks to enjoin or otherwise  prevent  the consummation
          of, or to recover any damages or obtain relief as  a  result  of,
          the transactions contemplated hereby; or

               (3)  threatens the validity or priority of the Liens granted
          pursuant to the Loan Documents;

     written  notice thereof together with such other information as may be
     reasonably  available  to  CapStar or the Borrower to enable the Agent
     and its counsel to evaluate such matters; and (b) within 20 days after
     the  end  of each calendar quarter  of  CapStar,  a  schedule  of  all
     Proceedings  involving  an  alleged liability of, or claims against or
     affecting,   CapStar  and  its  Subsidiaries   which,   if   adversely
     determined, could reasonably be expected to result in a money judgment
     in excess of $1,000,000  individually  or  $5,000,000 in the aggregate
     (in  either case not adequately covered by insurance  as  to  which  a
     solvent and unaffiliated insurance company has accepted coverage), and
     promptly  after request by the Agent, such other information as may be
     reasonably  requested by the Agent to enable the Agent and its counsel
     to evaluate any of such Proceedings;

       (xiii)  ERISA  EVENTS AND NOTICES:  (a) promptly upon becoming aware
     of the occurrence  of  or forthcoming occurrence of any ERISA Event, a
     written notice specifying  the  nature thereof, what action CapStar or
     any of its Subsidiaries or any of  their  respective  ERISA Affiliates
     has  taken,  is  taking or proposes to take with respect thereto  and,
     when known, any action  taken  or  threatened  by the Internal Revenue
     Service,  the  Department of Labor or the PBGC with  respect  thereto;
     (b) with reasonable  promptness,  copies  of  all  notices received by
     CapStar  or  any  of  its  ERISA Affiliates from a Multiemployer  Plan
     sponsor concerning an ERISA  Event; and (c) with reasonable promptness
     following the Agent's reasonable request, (x) copies of any SCHEDULE B
     (Actuarial  Information)  filed   by  CapStar  or  any  of  its  ERISA
     Affiliates  with the Internal Revenue  Service  with  respect  to  any
     Pension Plan  and  (y)  copies of such other documents or governmental
     reports or filings relating  to any Employee Benefit Plan as the Agent
     shall reasonably request;

        (xiv)  FINANCIAL PLANS:  as soon as practicable and in any event no
     later than November 30 of each  year,  projected  financial statements
     for each Property for the three next succeeding calendar years setting
     forth  in  detail  each line item appearing in the form  of  financial
     statement set forth  in  SCHEDULE 6.1 annexed hereto, together with an
     explanation of the assumptions  on which such forecasts are based, and
     such other information and projections  as  the  Agent  may reasonably
     request for any Property, all the Properties or CapStar or  any of its
     Subsidiaries;

         (xv)  INSURANCE:  as soon as practicable and in any event  by  the
     last  day  of  each  calendar  year,  a  report  in form and substance
     reasonably satisfactory to the Agent outlining all  material insurance
     coverage maintained as of the date of such report by  CapStar  and its
     Subsidiaries  or,  in  lieu  thereof,  copies  of such policies, and a
     report as to all material insurance coverage planned  to be maintained
     by CapStar and its Subsidiaries in the next succeeding  calendar  year
     to  the  extent  varying  from  the  description  of that delivered or
     described;

        (xvi)  ENVIRONMENTAL  AUDITS AND REPORTS:  as soon  as  practicable
     following receipt thereof,  copies  of  all  environmental  audits and
     reports,  whether  prepared  by  personnel  of  CapStar  or any of its
     Subsidiaries  or by independent consultants, with respect to  material
     environmental  matters   at   any  Property  or  which  relate  to  an
     Environmental Claim which could reasonably be expected to have, either
     individually or in the aggregate, a Material Adverse Effect;

       (xvii)  BOARD OF DIRECTORS:   with  reasonable  promptness,  written
     notice of any change in the Board of Directors of CapStar;

      (xviii)  CHANGE IN NAME OR CHIEF PLACE OF BUSINESS:  (a) notification
     of  any  change  in  any  Loan  Party's  name,  identity  or corporate
     structure within 30 days of such change and (b) 30 days' prior written
     notice  of  any  change in any Loan Party's executive office or  chief
     place of business;

        (xix)  REDUCTION  OF  PROPERTY AMOUNT OR PROPERTY EBITDA:  promptly
     after  the Borrower's acquiring  actual  knowledge  of  the  same,  an
     Officers'  Certificate with respect to the occurrence or effectiveness
     of any event  or  condition  (other than an event or condition that is
     affecting the hospitality business generally) that could reasonably be
     expected to cause the Property  Amount or Property EBITDA with respect
     to any Property, as of any date of  determination  thereafter,  to  be
     reduced  by  more than the greater of (a) 10% as of such later date of
     determination or for any period and (b) $100,000; and

         (xx)  RENOVATION   INFORMATION:    to  the  extent  not  delivered
     pursuant  to  subsection 6.12, a project budget  for  each  Renovation
     permitted pursuant  to subsection 7.16 and upon the reasonable request
     of the Agent, and in  any  event not less frequently than quarterly, a
     written report with respect  to  the  progress and status of each such
     Renovation, in scope and detail reasonably  satisfactory to the Agent;
     and

        (xxi)  OTHER   INFORMATION:    with  reasonable   promptness,   (a)
     information  and  other  data  revised   to   correct   any  erroneous
     information  and  other  data previously delivered by CapStar  or  the
     Borrower to the Agent pursuant  to  this subsection 6.1 or included in
     any statement, report or certificate  previously  delivered by CapStar
     or the Borrower to the Agent pursuant to this subsection 6.1, together
     with  such  statement,  report  or  certificate that shall  have  been
     revised to reflect such revised information  and  data,  and  (b) such
     other information and data with respect to the Loan Parties and  their
     respective  Subsidiaries,  the  Properties  (separately  and  for  all
     Properties), the Managed Properties, the Ground Leases and Leases, the
     Management  Agreements,  the other Collateral and the other assets and
     liabilities of the Loan Parties and their respective Subsidiaries, all
     in form reasonably satisfactory to the Agent, as from time to time may
     be reasonably requested by the Agent.

6.2  COMMON STOCK.

     CapStar shall (i) cause the  Common Stock, and each class of preferred
stock of the Borrower permitted by subsection 7.20B, to be and to remain at
all times duly listed on the New York  Stock  Exchange,  Inc. and (ii) file
timely all reports required to be filed by CapStar with the  New York Stock
Exchange, Inc. and the Securities and Exchange Commission.

6.3  CORPORATE EXISTENCE; CORPORATE SEPARATENESS ETC.

     A.   CORPORATE   EXISTENCE.    Except   as   permitted   pursuant   to
subsection 7.7,  each  Loan  Party  shall,  and  shall  cause  each  of its
Subsidiaries  to,  at  all times preserve and keep in full force and effect
its corporate, partnership  or  limited liability company existence and all
Authorizations, rights and franchises material to its business.

     B.   FINANCIAL MATTERS.  The  Borrower  shall, and shall cause each of
the  Pool  A  Subsidiaries to, (i) maintain financial  statements,  payroll
records, accounting records and other corporate records and other documents
separate from each  other and any other Person (other than the Borrower and
the  Pool  A  Subsidiaries,   but   including   CapStar   and  the  Pool  B
Subsidiaries);  (ii) maintain  its  own  bank  accounts  in  its own  name,
separate from each other and any other Person (other than the  Borrower and
the   Pool   A   Subsidiaries,   but  including  CapStar  and  the  Pool  B
Subsidiaries); (iii) pay its own expenses  and  other  liabilities from its
own assets and incur (or endeavor to incur) obligations  to  other  Persons
(other than the Borrower and the Pool A Subsidiaries, but including CapStar
and  the  Pool  B  Subsidiaries)  based  solely  upon  its  own  assets and
creditworthiness  and  not  upon the creditworthiness of each other or  any
other Person (other than the  Borrower  and  the  Pool  A Subsidiaries, but
including CapStar and the Pool B Subsidiaries); and (iv) file  its  own tax
returns  or, if part of a consolidated group, join in the consolidated  tax
return of such group as a separate member thereof.

     C.   INDEPENDENT  BUSINESS.  The Borrower shall manage the business of
the Borrower and each Pool  A Subsidiary independently from the business of
CapStar and any other Person  (other  than  the  Borrower  and  the  Pool A
Subsidiaries)  and in accordance with the best interest of the Borrower  or
such Pool A Subsidiary.   The  Borrower  shall  conduct  the administrative
activities of the Borrower and the Pool A Subsidiaries separately  from the
administrative activities of any other Person (other than the Borrower  and
the   Pool   A   Subsidiaries,   but  including  CapStar  and  the  Pool  B
Subsidiaries).   Any  moneys  earned   by   the  Borrower  or  the  Pool  A
Subsidiaries on their assets or proceeds of the sale of any of their assets
shall be deposited in bank accounts separate  from any of the assets of any
other  Person  (other than the Borrower and the Pool  A  Subsidiaries,  but
including CapStar  and  the  Pool  B  Subsidiaries),  and  no assets of the
Borrower and the Pool A Subsidiaries shall become commingled with assets of
such other Persons.

     D.   BUSINESS DEALINGS.  Each of CapStar and the Borrower  shall  hold
itself out, and shall continue to hold itself out, to the public and to its
creditors  as a legal entity, separate and distinct from all other entities
(other than,  with  respect  to the Borrower, the Pool A Subsidiaries), and
shall  continue  to  take  all  steps   reasonably   necessary   to   avoid
(i) misleading any other Person as to the identity of the entity with which
such Person is transacting business or (ii) implying that the Borrower  is,
directly or indirectly, absolutely or contingently, responsible (if such is
not  the  case)  for  the  Indebtedness  or  other obligations of any other
Person.  CapStar and the Borrower shall not permit any Pool B Subsidiary to
imply that any other Loan Party or any of its Subsidiaries (other than such
Pool B Subsidiary) is directly or indirectly,  absolutely  or contingently,
responsible  for  the  Indebtedness  or  other  obligations of such  Pool B
Subsidiary.

6.4  TAXES AND CLAIMS; TAX CONSOLIDATION.

     A.   TAXES AND CLAIMS.  Each Loan Party shall, and shall cause each of
its Subsidiaries to, pay or discharge or cause to be paid or discharged all
Taxes  and  Impositions  imposed  upon  any  Loan  Party   or  any  of  its
Subsidiaries, or payable by any Loan Party or any of its Subsidiaries  with
respect  to  any  Property  or  other  assets  or  in respect of any of the
franchises, business, income or other property of any  Loan Party or any of
its  Subsidiaries before the same shall become delinquent  and  before  any
penalty  accrues  thereon,  and will pay, discharge or otherwise satisfy or
cause to be paid, discharged  or  otherwise satisfied at or before maturity
or before they become delinquent, all  Indebtedness,  obligations and other
claims (including claims for labor, supplies, materials  and services that,
if unpaid, might become a Lien on the property of any Loan  Party or any of
its  Subsidiaries)  of  any  Loan  Party  and  its  Subsidiaries; PROVIDED,
HOWEVER, that no such charge or claim needs to be paid  if  (i) such charge
or  claim  is  being  diligently  contested  in  good  faith by appropriate
proceedings, (ii) reserves consistent with GAAP or otherwise  consented  to
by  the  Agent  shall  have  been  made therefor by such Loan Party or such
Subsidiary, (iii) none of the Collateral  is  in  jeopardy  of  being sold,
forfeited or lost during or as a result of such contest, (iv) none  of  any
Loan  Party,  or  any  of  its  Subsidiaries, the Agent or any Lender could
become subject to any civil fine or penalty not adequately reserved against
(in the case of any Loan Party or  Subsidiary  thereof) or criminal fine or
penalty, in each case as a result of non-payment  of  such  charge or claim
and  (v) such contest has not had and could not reasonably be  expected  to
have,  either  individually or in the aggregate, a Material Adverse Effect.
Each Loan Party shall, and shall cause each of its Subsidiaries to, deliver
to the Agent all  receipts  evidencing  the  payment  of all such Taxes and
Impositions with respect to any Property and, upon written  request  by the
Agent,  all  other  Taxes, Impositions, assessments, levies, permits, fees,
rents and other public  charges  imposed  upon or in respect of or assessed
against any Loan Party, any of its Subsidiaries  or any of their respective
properties or assets except for those being paid or  contested as described
in the provisos above.

     B.   TAX CONSOLIDATION.  Each Loan Party will not, and will not permit
any  of  its  Subsidiaries  to,  file  or  consent  to  the filing  of  any
consolidated income tax return with any Person other than  CapStar  and its
Subsidiaries.

6.5  MAINTENANCE OF PROPERTIES; REPAIR; ALTERATION.

     Each  Loan  Party shall, and shall cause each of its Subsidiaries  to,
(i) maintain or cause to be maintained each Property and all other items of
Collateral in a manner consistent for upscale full service hotel properties
and related property,  and  other  property  and  assets  constituting  the
Collateral,  in each case of the same quality and character, and shall keep
or cause to be  kept  every  part  thereof  in  good  condition and repair,
reasonable  wear  and  tear  excepted,  and  make all reasonably  necessary
repairs, renewals or replacements thereto as may be reasonably necessary to
conduct  the  business  of such Loan Party and its  Subsidiaries;  (ii) not
remove, demolish or structurally  alter,  or  permit or suffer the removal,
demolition or structural alteration of, any of  the Improvements in respect
of  a  Pool  A  Property  except  as expressly permitted  hereunder  or  in
connection with a Renovation or Restoration  with the prior written consent
of the Agent, which consent shall not be unreasonably withheld, conditioned
or delayed; (iii) complete promptly and in a good  and  workmanlike  manner
any  Improvements which may be now or hereafter constructed on any Property
and, subject  to  subsection 6.11,  promptly  restore  in  like  manner any
portion  of the Improvements in respect of a Pool A Property which  may  be
damaged or  destroyed  thereon  from any cause whatsoever, and pay when due
all claims for labor performed and materials furnished therefor (subject to
the  right  to  contest the amount of  validity  thereof  in  good  faith);
(iv) comply in all  material  respects with all Applicable Laws, applicable
Insurance Requirements and all  covenants,  conditions and restrictions now
or hereafter affecting any Property or other item of Collateral or any part
thereof or requiring any alterations or Improvements; and (v) not commit or
permit  any  waste  of the Collateral; (vi) not  remove  any  item  of  the
Collateral (other than  in  accordance  with  subsection 2.9, in connection
with a Restoration or Renovation permitted by this  Agreement  or otherwise
in the ordinary course of business) without replacing it with a  comparable
item  of  equal or greater quality, value and usefulness, except that  such
Loan Party  or Subsidiary thereof, as applicable, may sell or dispose of in
the ordinary course of business any property which is obsolete or no longer
useful in its business.
6.6  INSPECTION; LENDERS' MEETING; APPRAISALS.

     A.   INSPECTION  AND  LENDER  MEETING.   As often as may be reasonably
requested, each Loan Party shall, and shall cause  each of its Subsidiaries
to, permit (i) any authorized representatives designated  by  the  Agent or
any  Lender  to  visit  and  inspect  any Property, and (ii) any authorized
representatives  designated  by the Agent  to  inspect  the  financial  and
accounting records, tenant leasing  files  and  other  management books and
records  of  such  Loan  Party or Subsidiary, and to make copies  and  take
extracts therefrom, and to  discuss  its  and  their  affairs,  operations,
finances  and  accounts with its and their officers, property managers  and
independent accountants;  PROVIDED  that  each  such  visit, inspection and
discussion  shall  be  made upon reasonable notice and at  such  reasonable
times during normal business  hours,  with  as  little  disruption  of such
party's business and operations as is reasonably practical.  Without in any
way limiting the foregoing, CapStar and the Borrower will, upon the request
of the Agent, participate in a meeting with the Agent and the Lenders  once
during  each  calendar  year to be held at the Borrower's corporate offices
(or such other location as  may be agreed to by the Borrower and the Agent)
at such time as may be agreed to by the Borrower and the Agent.

     B.   APPRAISALS.  If the  Agent  shall  advise the Borrower by written
notice that the Agent believes that the value  of  one  or  more Designated
Pool A  Properties has been adversely affected, for any reason,  since  the
date of the  most  recent  Appraisal  thereof, promptly thereafter the Loan
Parties shall, or shall cause each of their  respective Subsidiaries to, at
their  expense,  cause the preparation and delivery  to  the  Agent  of  an
Appraisal of each such Pool A Property dated not more than 30 days prior to
the  date  of such delivery,  which  Appraisal  shall  be  prepared  by  an
Appraiser designated  by  the  Agent  and shall be satisfactory in form and
substance to the Agent; PROVIDED that,  unless  an  Event  of Default shall
have  occurred  and  be  continuing, no Pool A Property shall be  appraised
pursuant to this subsection 6.6B more than once each calendar year.  If any
Loan Party or any of its Subsidiaries  obtains  an appraisal of one or more
of  the  Pool A  Properties  other  than pursuant to this  subsection,  the
Borrower shall deliver a copy of such  appraisal to the Agent promptly upon
the completion thereof and the Agent shall,  subject to Applicable Laws and
provided that the Appraiser is satisfactory to  the Agent and the appraisal
is satisfactory in form and substance to the Agent, treat such appraisal as
an ``Appraisal.''  In the event that the Agent obtains  an Appraisal of one
or more of the Pool A Properties, the Agent shall deliver  a  copy  of such
Appraisal to the Borrower upon the completion thereof.

6.7  COMPLIANCE WITH LAWS, AUTHORIZATIONS, ETC.

     Each  Loan  Party shall, and shall cause each of its Subsidiaries  and
all other Persons  occupying  any  Properties  to,  comply  in all material
respects  with  the requirements of all Applicable Laws.  Each  Loan  Party
shall, and shall cause each of its Subsidiaries to, keep all Authorizations
which are from time to time required for the use and operation of each Pool
A Property in full force and effect.

6.8  PERFORMANCE OF LOAN DOCUMENTS AND RELATED DOCUMENTS.

     A.   LOAN DOCUMENTS.   Each  Loan Party shall, and shall cause each of
its Subsidiaries to, observe and perform,  or  cause  to  be  observed  and
performed,  all  its  covenants,  agreements,  conditions  and requirements
contained in each of the Loan Documents to which it is or will  be  a party
in  accordance  with  the  terms thereof and will maintain the validity and
effectiveness of such Loan Documents.

     B.   RELATED DOCUMENTS.   Each  Loan Party shall, and shall cause each
of its Subsidiaries to, observe and perform,  or  cause  to be observed and
performed,   all   its  material  covenants,  agreements,  conditions   and
requirements contained  in  each  of the Related Documents to which it is a
party in accordance with the terms  thereof  and will maintain the validity
and effectiveness of such Related Documents, the violation or invalidity of
which could reasonably be expected to have, either  individually  or in the
aggregate,  a  Material  Adverse  Effect.   Each  Loan  Party shall take no
action, nor permit any action to be taken, which will release  any party to
the  Related  Documents from any of such party's obligations or liabilities
thereunder, or  will  result in the termination, modification or amendment,
or will materially impair  the  validity  or  effectiveness, of any Related
Document  except  as  expressly  provided  for herein  and  therein,  which
release,  invalidity or ineffectiveness could  reasonably  be  expected  to
have, either individually or in the aggregate, a Material Adverse Effect.

     C.   ATLANTA  DOCUMENTS.   Each Loan Party shall, and shall cause each
of its Subsidiaries to, observe and  perform,  or  cause to be observed and
performed,  all  its  covenants,  agreements, conditions  and  requirements
contained in each of the Atlanta Documents  to  which  it  is  a  party  in
accordance  with  the  terms  thereof  and  will  maintain the validity and
effectiveness of such Atlanta Documents.  Each Loan  Party  shall  take  no
action,  nor permit any action to be taken, which will release any party to
the Atlanta  Documents  from any of such party's obligations or liabilities
thereunder, or will result  in  the termination, modification or amendment,
or  will impair the validity or effectiveness,  of  any  Atlanta  Document.
CapStar and the Borrower shall give the Agent written notice of any default
by any  party  to  any Atlanta Document promptly after such default becomes
known to CapStar or the Borrower.

     D.   ENFORCEMENT.   At the request of the Agent and also following the
occurrence of a material breach  or  default under any Atlanta Document or,
if such breach or default either may reasonably be expected to have, either
individually or the aggregate, a Material  Adverse Effect or may reasonably
be expected to result in a loss or liability  to  any  Loan Party or any of
its  Subsidiaries  in  an  amount  greater  than $1,000,000 (or,  upon  the
occurrence of an Event of Default, zero), a breach  or  default  under  any
Related  Document  to  which any Loan Party or any of its Subsidiaries is a
party, such Loan Party or  such  Subsidiary,  as  applicable,  will, at its
expense  but  subject to the direction and control of the Agent, take  such
action, or at the  Agent's  request  furnish funds sufficient to enable the
Agent  to  take  such  action,  as  the Agent  may  reasonably  request  in
connection with enforcing such Atlanta Document or Related Document.

6.9  PAYMENT OF LIENS.

     A.   REMOVAL BY LOAN PARTIES.  In  the event that, notwithstanding the
covenants contained in subsection 7.2, a Lien not otherwise permitted under
subsection 7.2 may encumber any Property or other item of Collateral or any
portion thereof, CapStar and the Borrower shall promptly discharge or cause
to be discharged by payment to the lienor  or  lien  claimant  or  promptly
secure removal by bonding or deposit with the county clerk or otherwise or,
at the Agent's option, promptly obtain insurance against, any such Lien  or
mechanics'  or  materialmen's  claims  of  lien filed or otherwise asserted
against any Property or any other item of Collateral or any portion thereof
within 30 days after the date of notice thereof;  PROVIDED that, compliance
with  the  provisions  of  this  subsection  6.9  shall not  be  deemed  to
constitute a waiver of the provisions of subsection  7.2.   CapStar and the
Borrower  shall  exhibit  to the Agent upon request all receipts  or  other
satisfactory evidence of payment,  bonding,  deposit of taxes, assessments,
Liens or any other item which may cause any such  Lien  to be filed against
any Property or other item of Collateral of any Loan Party  or  any  of its
Subsidiaries.   Each  Loan  Party  and each of its Subsidiaries shall fully
preserve the Lien and the priority of  each  of the Mortgages and the other
Security Documents without cost or expense to the Agent or the Lenders.

     B.   REMOVAL  BY  THE  AGENT.   If  any  Loan  Party  or  any  of  its
Subsidiaries fails to promptly discharge, remove or bond  off any such Lien
or  mechanics'  or  materialmen's  claim of lien as described above  within
30 days after the receipt of notice  thereof, then the Agent may, but shall
not  be  required  to, procure the release  and  discharge  of  such  Lien,
mechanics' or materialmen's  claim  of  lien  and  any  judgment  or decree
thereon, and in furtherance thereof may, in its sole discretion, effect any
settlement or compromise with the lienor or lien claimant or post any  bond
or  furnish any security or indemnity as the Agent, in its sole discretion,
may elect.  In settling, compromising or arranging for the discharge of any
Liens  under  this subsection, the Agent shall not be required to establish
or confirm the  validity  or  amount of the Lien.  The Borrower agrees that
all costs and expenses expended  or  otherwise  incurred  pursuant  to this
subsection 6.9 (including reasonable attorneys' fees and disbursements)  by
the  Agent  shall  be  paid  by  the  Borrower in accordance with the terms
hereof.

     C.   TITLE SEARCHES.  The Agent may, at any time and at the expense of
the  Borrower, obtain an updated title and/or  lien  search  regarding  any
Property  or  Collateral, or any portion thereof; PROVIDED that, unless the
Agent reasonably  believes  that  a  Lien  not  otherwise  permitted  under
subsection 7.2  may  encumber  any  Property  or  Collateral or any portion
thereof or an Event of Default shall have occurred  and  be continuing, the
Agent may so obtain such search with respect to such Property or Collateral
or portion thereof not more than once each calendar year.

6.10 INSURANCE.

     A.   RISKS TO BE INSURED.  With respect to each Pool  A Property, each
Loan Party shall procure or cause to be procured, and each Loan Party shall
maintain  or  cause  to  be  maintained  continuously  in effect, insurance
coverage issued by an insurer (i) authorized to issue such insurance in all
applicable jurisdictions, (ii) rated ``A'' (or its equivalent) or better by
Alfred M. Best Company, Inc., (iii) with a financial size  rating  of  VIII
(or  its  equivalent)  or  better,  by  Alfred  M.  Best Company, Inc., and
(iv) otherwise  satisfactory  to  the  Agent; PROVIDED, HOWEVER,  that  the
requirements set forth in clauses (ii) and  (iii) above with respect to any
Pool A Property shall be subject to any requirements  of any related Ground
Lease; PROVIDED FURTHER, HOWEVER, that (1) each insurer of CapStar's or any
of  its  Subsidiaries'  umbrella  liability insurance policies  as  of  the
Closing Date (and any renewal thereof  by such insurers), may be rated ``A-
'' (or its equivalent) by Alfred M. Best Company, Inc.; it being understood
and agreed that such carrier(s) shall comply with the requirement set forth
in  clause (ii) above, and (2) as of the  Closing  Date,  the  insurers  of
CapStar's  or any of its Subsidiaries' earthquake, flood and wind insurance
policies (and  any  renewals thereof by such insurers, respectively) may be
rated ``A-'' (or its equivalent) by Alfred M. Best Company, Inc. and have a
financial size rating  of  ``VIII''  (or  its equivalent) by Alfred M. Best
Company, Inc.; it being understood and agreed that, in the event CapStar or
any of its Subsidiaries procures any earthquake,  flood  or  wind insurance
from  a  carrier  other  than the carrier providing such insurance  on  the
Closing Date, such carrier  shall comply with the requirements set forth in
clauses (ii) and (iii) above  unless otherwise approved by the Agent.  Each
Loan Party shall pay, and shall cause each of its Subsidiaries to pay, in a
timely manner all premiums due  in  connection  therewith.   All  insurance
policies  shall  be  issued by insurers doing business as admitted licensed
carriers  in the state  where  such  Property  is  located,  and  shall  be
authorized  and  licensed to issue insurance in such state unless otherwise
approved by the Agent in its sole discretion.  The insurance to be procured
and maintained by CapStar and its Subsidiaries is the following:

          (i)  CASUALTY.    CapStar   shall   keep,   or  shall  cause  its
     Subsidiaries to keep, each Pool A Property insured  for the benefit of
     the Agent, in each case, as follows:

               (a)  ALL RISK OF PHYSICAL LOSS.  Insurance  with  respect to
          the   Improvements  now  or  hereafter  located  on  the  Pool  A
          Properties  and  any  alterations  or  additions  thereto and the
          furniture,  fixtures  and  equipment  against any peril  included
          within  the classification ``All Risks of  Physical  Loss''  with
          extended   coverage   (including   fire,   lightning,  windstorm,
          sprinkler, hail, explosion, riot, riot attending  a strike, civil
          commotion,   vandalism,   malicious  mischief,  terrorist   acts,
          aircraft, vehicle, sinkholes and smoke) in an amount equal to the
          full insurable value of such  Improvements  and  such  furniture,
          fixtures and equipment.  The term ``FULL INSURABLE VALUE''  shall
          mean  the  actual  replacement cost of such Improvements and such
          furniture, fixtures  and  equipment  (without taking into account
          any  depreciation,  and  exclusive of excavations,  footings  and
          foundations, landscaping and  paving) determined every five years
          by  an  insurer  upon the request  of  the  Agent,  a  recognized
          independent  insurance  broker  or  an  appraiser  selected  (and
          approved by the  Agent)  and paid by the applicable Loan Party or
          its Subsidiary; PROVIDED,  HOWEVER,  that  such  amount  shall be
          sufficient  to  prevent  such  Loan Party or such Subsidiary from
          becoming  a co-insurer, and the policy  shall  contain  a  stated
          value endorsement to that effect.

               (b)  BUILDER'S  RISK.   During any period of construction of
          Improvements   and   any  repair,  Restoration,   Renovation   or
          replacement  thereof,  a   standard  builder's  all  risk  policy
          (completed value non-reporting form) or equivalent coverage under
          the policy described in subclause  (i)(a)  above for an amount at
          least  equal  to  the  full  insurable value of the  work  to  be
          performed and equipment, supplies  and materials to be furnished,
          as shall be reasonably approved by the  Agent  for  such purpose,
          the  coverage  of  which  shall include the hazards described  in
          subsection 6.10A(i)(a) and  building collapse; PROVIDED, HOWEVER,
          that such policy may be obtained  by a contractor if it names the
          Agent and CapStar and its applicable  Subsidiaries  as additional
          named insureds and if it otherwise complies with this  Agreement.
          Such policy shall contain a stated value endorsement so  that  no
          co-insurance   provision   shall   be   applicable  to  any  loss
          thereunder.   Such  policy  shall  contain  the   provision  that
          ``permission  is hereby granted to complete and/or occupy''  upon
          the earlier to  occur  of  substantial completion of any discrete
          increment of the work or a Tenant  taking occupancy of any Pool A
          Property  (or  portion  thereof)  as  to  which  work  was  being
          performed.

               (c)  FLOOD.  Insurance against damage or loss by flood as to
          any  Pool  A  Property  that  is  located  in   an  area  now  or
          subsequently designated as an area having special  flood  hazards
          and  in  which flood insurance has been made available under  the
          National Flood  Insurance  Act  of  1968  or  the  Flood Disaster
          Protection Act of 1973,or the National Flood Insurance Reform Act
          of  1994, as such Acts may be amended, modified, supplemented  or
          replaced  from time to time, on such basis and not less than such
          amounts as  shall  be  reasonably  approved by the Agent, but not
          less than the amount required by law.   If  any Loan Party or any
          of its Subsidiaries fails to obtain flood insurance  as required,
          the  Agent  may  purchase  such flood insurance, and the Borrower
          shall pay all premiums and other  costs  and expenses incurred by
          the Agent.

               (d)  BOILERS.   Broad  form boiler and  machinery  insurance
          (without exclusion for explosion)  covering  all  boilers, boiler
          tanks, heating and air conditioning equipment, pressure  vessels,
          auxiliary  piping  and similar apparatus, machinery and equipment
          located in, on or about  each  Pool  A  Property insuring against
          damage  or  loss  from  boilers, boiler tanks,  heating  and  air
          conditioning equipment, pressure  vessels,  auxiliary  piping and
          similar apparatus, machinery and equipment and insurance  against
          loss of occupancy or use arising from any such breakdown in  such
          amounts as are generally available at reasonable premiums and are
          generally   required  by  institutional  lenders  for  properties
          comparable to the Pool A Properties.

               (e)  BUSINESS   INTERRUPTION  OR  RENTAL  INCOME  INSURANCE.
          Business interruption  and/or  loss  of  rental  value or use and
          occupancy insurance insuring against business interruption at and
          against  loss of rental income from each Pool A Property  due  to
          any of the  hazards  listed in subsection 6.10A(i)(a) above in an
          amount  sufficient  to avoid  any  co-insurance  penalty  and  to
          provide proceeds for a period not less than one year of loss.

               (f)  EARTHQUAKE  INSURANCE.   With  respect  to  any  Pool A
          Property  located  in  California  or other area at high risk for
          earthquakes, as reasonably determined  by  the  Agent, earthquake
          insurance  on  such  basis  and  in  such  amounts  as  shall  be
          reasonably required by the Agent; PROVIDED that each of the  Pool
          A  Properties  that are located in California on the Closing Date
          shall have earthquake  insurance  as  evidenced  by  the policies
          delivered  pursuant  to  subsection  4.1F  and  each  of the  MBL
          Properties located in California shall have earthquake  insurance
          on  the  date  of  their  acquisition  by  CapStar  or any of its
          subsidiaries  in such amounts as shall be reasonably required  by
          the Agent; PROVIDED  that  each of the Pool A Properties that are
          located in California on the  Closing  Date shall have earthquake
          insurance  as  evidenced  by the policies delivered  pursuant  to
          subsection  4.1F  and  each of  the  MBL  Properties  located  in
          California shall have earthquake  insurance  on the date of their
          acquisition by CapStar or any of its Subsidiaries in such amounts
          as shall be reasonably required by the Agent.

         (ii)  WORKERS' COMPENSATION.  Each Loan Party shall  maintain, and
     shall cause each of its Subsidiaries to maintain, for itself  and  for
     each  Pool  A  Property  at  which  such Loan Party or such Subsidiary
     maintains employees, statutory workers' compensation insurance (to the
     extent the risks to be covered thereby  are  not  already  covered  by
     other  policies  of  insurance  maintained  by such Loan Party or such
     Subsidiary),  in  statutory  amounts  as required  by  law  (including
     employer's liability insurance), except  in  those  states  where such
     Loan  Party  elects  to  not  subscribe  to  the workers' compensation
     statute.  If the applicable Loan Party elects  to not subscribe to the
     workers' compensation statute, such Loan Party shall  have  a  benefit
     program  and  employees' legal liability coverage to respond to claims
     that would otherwise  be  covered  by  a  standard  policy of workers'
     compensation.

        (iii)  LIABILITY.  CapStar and its Subsidiaries shall  procure  and
     maintain:

               (a)  COMPREHENSIVE      GENERAL     LIABILITY     INSURANCE.
          Comprehensive general liability insurance, on an occurrence basis
          in  the  amount of $1,000,000 per  occurrence  per  Property  and
          $3,000,000  in  the  aggregate  per  Property  covering each Loan
          Party, each of its Subsidiaries and the Agent against  claims for
          bodily  injury,  death and property damage (including claims  and
          legal liability to  the  extent  insurable imposed upon the Agent
          and all court costs and attorneys'  fees  and  expenses), arising
          out of or connected with the possession, use, leasing, operation,
          maintenance or condition of each Property or occurring  in,  upon
          or about or resulting from each Property, or any drive, sidewalk,
          curb  or  passageway  adjacent thereto (to the extent insurable),
          which  insurance  shall  include  blanket  contractual  liability
          coverage  which  insures contractual  liability  (to  the  extent
          insurable) under the  indemnification set forth in subsection 9.3
          of this Agreement (but  such coverage or the amount thereof shall
          in  no  way  limit such indemnification),  garage  liability  (if
          applicable), products  liability  (if  applicable)  and  elevator
          liability  (if  applicable)  coverage  and  during  any period of
          construction   of  any  Improvements,  owner's  and  contractor's
          protective liability  coverage,  including  completed  operations
          liability coverage.  If any of the coverages referred to  in this
          subsection   6.10A(iii)(a)   are   obtained  under  a  so  called
          ``blanket''  policy  with  more than one  Property  covered,  the
          policy    shall   contain   an   ``individual    aggregate    per
          location/project'' endorsement.

               (b)  GENERAL  LIABILITY  AND  PROPERTY  DAMAGE.   Commercial
          general  liability and property damage insurance on an occurrence
          basis in connection  with  any  Renovation being performed at any
          Pool A Property, to be carried by  any contractor or construction
          manager or by any Person, including  any Loan Party or any of its
          Subsidiaries, performing a similar function, including ``Builders
          Risk'' coverage in the amount of $1,000,000  per  occurrence  and
          $3,000,000 in the aggregate.

               (c)  LIQUOR  LIABILITY  AND  DRAM  SHOP  INSURANCE.   Liquor
          liability  and  dram  shop  insurance  on  such basis and in such
          amounts as shall be reasonably required by the Agent in a minimum
          amount  of  $1,000,000  per  occurrence  and  $3,000,000  in  the
          aggregate for Pool A Properties.

               (d)  UMBRELLA  OR EXCESS LIABILITY INSURANCE.   Umbrella  or
          excess liability insurance,  on an incurrence basis in the amount
          of at least $100,000,000 per occurrence  and in the aggregate per
          year covering each Loan Party, each of its  Subsidiaries  and the
          Agent  against  claims  for  damages  in  excess  of  all primary
          liability policies.

         (iv)  ADDITIONAL  INSURANCE.   Each  Loan Party shall procure  and
     maintain,  and  shall cause each of its Subsidiaries  to  procure  and
     maintain, such other  insurance  with respect to the Pool A Properties
     against loss or damage of the kinds  from  time  to  time  customarily
     insured  against  and  in  such amounts as are generally available  at
     reasonable  premiums  and  are  generally  required  by  institutional
     lenders for properties comparable to the Pool A Properties.

     B.   POLICY  PROVISIONS.   Each  policy  of  insurance  maintained  in
respect  of any Loan Party, any of  its  Subsidiaries  and/or  any  Pool  A
Property pursuant  to  this  subsection 6.10  shall (a) in the case of each
category  of  public  liability insurance, name such  Loan  Party  or  such
Subsidiary, as the case  may  be,  as  insured  and name the Agent (for the
benefit of the Lenders) as an additional insured,  and  in  the case of all
other insurance required under this Agreement (other than any  such  policy
maintained  solely  in  respect of one or more Pool B Properties), name the
Agent (for the benefit of  the  Lenders)  as  an additional insured or as a
loss  payee,  as Agent shall require; (b) except  in  the  case  of  public
liability insurance  and  workers' compensation insurance, provide that all
proceeds thereunder shall be  payable  to  the Agent pursuant to a standard
first mortgagee endorsement, without contribution,  that  all  losses  with
respect  to  each  Property  shall  be  paid directly to the Agent, without
contribution  by  any  similar insurance carried  by  the  Agent  and  that
adjustment and settlement  of  any  material  loss  shall be subject to the
reasonable  approval  of the Agent; (c) include effective  waivers  by  the
insurer of all rights of  subrogation  against  any  loss payee, additional
insured  or  named insured; (d) permit the Agent to pay  the  premiums  and
continue any insurance  upon failure of such Loan Party or such Subsidiary,
as the case may be, to pay  premiums  when due, upon the insolvency of such
Loan Party or such Subsidiary, as the case  may be, or through foreclosure;
(e) to the extent such provisions are reasonably  obtainable,  provide that
such  insurance  shall not be impaired or invalidated by virtue of  (1) any
act,  failure  to  act,   negligence  of,  or  violation  of  declarations,
warranties or conditions contained  in  such  policy  by such Loan Party or
such Subsidiary, as applicable, the Borrower, the Agent, the Lenders or any
other  named  insured,  additional insured or loss payee,  except  for  the
willful misconduct of the  Agent  or  the Lenders knowingly in violation of
the conditions of such policy, (2) the  occupation  or  use  of such Pool A
Property  for  purposes more hazardous than permitted by the terms  of  the
policy, (3) any  foreclosure or other proceeding or notice of sale relating
to such Property or  (4) any  change  in  the  possession  of  such  Pool A
Property without a change in the identity of the holder of actual title  to
such  Property  (PROVIDED that with respect to items (3) and (4) any notice
requirements of the applicable policies are satisfied); (f) be subject to a
deductible, if any, not greater than $100,000 (or, with respect to coverage
for wind damage or  earthquake  damage,  such  greater  amount as shall not
exceed  5.0%  or  10.0%,  respectively, of the affected Pool  A  Property's
agreed value); (g) contain an endorsement providing that none of the Agent,
the Lenders or such Loan Party or such Subsidiary, as applicable, shall be,
or shall be deemed to be, a  co-insurer with respect to any risk insured by
such policy; and (h) provide that  if  all or any part of such policy shall
be canceled or terminated, or shall expire, the insurer will forthwith give
notice thereof to the Agent and each additional  insured and loss payee and
that no cancellation, termination, expiration, reduction  in  amount of, or
material  change  (other  than  an increase) in, coverage thereof shall  be
effective until at least 30 days (or 10 days in the case of non-payment for
premiums) after receipt by the Agent  and  each additional insured and loss
payee of written notice thereof; PROVIDED, HOWEVER,  that  the requirements
set  forth  in  this subsection 6.10B with respect to any Pool  A  Property
shall be subject  to  any  requirements  of any Ground Lease affecting such
Pool A Property.  Nothing contained herein  shall  be  construed to prevent
CapStar or any of its Subsidiaries from satisfying the provisions  of  this
subsection  6.10 through the use of so-called blanket, manuscripted or loss
limit policies.

     C.   INCREASES  IN  COVERAGE.   The  policy  limits  of  any policy of
insurance  required  hereunder  shall  be  increased  from time to time  to
reflect what a reasonable prudent owner of land and improvements similar in
type and locality to each Pool A Property would carry.

     D.   PAYMENT OF PROCEEDS.  If any such insurance proceeds  required to
be  paid to the Agent are instead made payable to the Borrower, CapStar  or
any Subsidiary  thereof,  each  of the Borrower and CapStar hereby appoints
the  Agent  as  its  attorney-in-fact,  irrevocably  and  coupled  with  an
interest, to endorse and/or transfer any such payment to the Agent.

     E.   DELIVERY OF  COUNTERPART  POLICIES;  EVIDENCE.   Each  Loan Party
shall deliver, and shall cause each of its Subsidiaries to deliver,  to the
Agent  on  or  before the Closing Date evidence acceptable to the Agent for
the valid policies  of  insurance  required  by this Agreement or any other
Loan Document to be carried evidencing (i) the  issuance  of such policies,
(ii) the payment of all premiums payable for the period ending  not earlier
than  the  first  Anniversary  and  (iii) coverage  which meets all of  the
requirements set forth in this Agreement.  At each time  after  the Closing
Date  that  any  Loan Party or any of its Subsidiaries is required by  this
Agreement or by any Security Document or any other Loan Document to deliver
evidence of insurance,  such  Loan Party shall deliver, or shall cause such
Subsidiary  to  deliver,  such evidence  of  valid  policies  of  insurance
acceptable to the Agent evidencing  (a) the  issuance  of  the  policies of
insurance required by this Agreement or other Loan Document to be  carried,
(b) the  payment  of  all  premiums  then  due  to  the applicable insurer,
(c) coverage  which  meets  all  of  the  requirements set  forth  in  this
Agreement or other Loan Document, and (d) that the required policies are in
full force and effect.

     F.   REPLACEMENT OR RENEWAL POLICIES.   Not less than 20 days prior to
the expiration, termination or cancellation of  any  insurance policy which
any  Loan  Party  or  any  of  its  Subsidiaries  is required  to  maintain
hereunder, such Loan Party shall obtain, or shall cause  such Subsidiary to
obtain,  a  replacement  or  renewal  policy  or  policies  (or  a  binding
commitment for such replacement or renewal policy or policies), which shall
be  effective  no  later  than  the date of the expiration, termination  or
cancellation of the previous policy, and shall deliver to the Agent a valid
binder  in  respect  of such policy  or  policies  in  the  same  form  and
containing the same information as the expiring policy or policies required
to  be delivered by each  Loan  Party  and  its  Subsidiaries  pursuant  to
subsection 6.10E  or  a  copy  of  the  binding  commitment for such policy
complying  with  all  the requirements of this subsection,  followed  by  a
certified true copy of the policy or policies when issued.

     G.   MATERIAL CHANGE  IN  POLICY.   Each Loan Party shall deliver, and
shall cause each of its Subsidiaries to deliver,  to the Agent concurrently
with each material change in any insurance policy covering  any part of the
Pool  A  Properties  required to be maintained by each Loan Party  and  its
Subsidiaries hereunder,  a  valid binder or policy endorsement with respect
to such changed insurance policy certified by the insurance company issuing
such policy, in the same form  and  containing  the same information as the
original evidence of insurance required to be delivered  by each Loan Party
and its Subsidiaries pursuant to subsection 6.10E.

     H.   SEPARATE INSURANCE.  Each Loan Party will not take  out, nor will
it  permit  any  of  its  Subsidiaries  to  take  out,  separate  insurance
concurrent  in form or contributing in the event of loss with that required
to be maintained pursuant to this subsection unless such insurance complies
with all of the requirements of this subsection.

6.11 CASUALTY AND CONDEMNATION; RESTORATION.

     A.   NOTICE OF CASUALTY.  Upon the occurrence of any damage to or loss
or destruction of all or any portion of any Pool A Property, whether or not
covered by insurance,  which  will  cost  (or may reasonably be expected to
cost)  more  than  $500,000  to Restore, as reasonably  determined  by  the
Borrower and so certified in an  Officers'  Certificate  delivered  to  the
Agent,  (i) the Borrower shall promptly deliver to the Agent written notice
of the same  which  shall,  among other things, describe such casualty, and
(ii) as soon as practicable but  in  any event prior to the commencement of
Restoration of such Pool A Property, the  Borrower  shall  deliver  to  the
Agent  a  Notice  of  Renovation/Restoration in the form attached hereto as
EXHIBIT XVII.

     B.   INSURANCE PROCEEDS.   All Insurance Proceeds in respect of a Pool
A  Property  (other  than  Insurance  Proceeds  attributable  to  insurance
required pursuant to subsection 6.10A(ii)  and (iii)) and the right thereto
are hereby irrevocably assigned and pledged by each Loan Party to the Agent
for the benefit of the Lenders, and the Agent  on  behalf of the Lenders is
authorized, at its option, to collect and receive all  of  the  same and to
give proper receipts and acquittances therefor; PROVIDED, however, that (x)
such  assignment  and  pledge  with respect to any such Pool A Property  is
subject  to any requirements of any  Ground  Lease  affecting  such  Pool A
Property,  (y) if no Event of Default shall have occurred and be continuing
such Loan Party  shall  have  the  right  to  direct   the  Agent  to apply
Insurance  Proceeds in accordance with subsections 6.11E and 6.11F and  (z)
if no Event of Default shall have occurred and be continuing, to the extent
not inconsistent with the requirements of subsections 6.11E and 6.11F, such
Loan Party shall have the right to direct the Agent (1) to pay to such Loan
Party all Insurance Proceeds with respect to such casualty affecting a Pool
A Property which  will  cost  (or  may reasonably be expected to cost) less
than $500,000 to Restore and (2) to  pay to such Loan Party all proceeds of
any related business interruption insurance.   Each  Loan  Party  agrees to
execute  and  to  cause  each  of  its Subsidiaries to execute such further
assignments and pledges of any Insurance  Proceeds in respect of the Pool A
Properties  as  the  Agent  may  reasonably  require  and  shall  otherwise
cooperate with the Agent in obtaining for the  Agent  and  the  Lenders the
benefit of any Insurance Proceeds lawfully or equitably payable in  respect
of  any such Pool A Property, subject to the provisos above.  If, prior  to
the receipt  by  the  Agent of such Insurance Proceeds, any Pool A Property
shall have been transferred upon foreclosure of the applicable Mortgage (or
by deed in lieu thereof),  the  Agent  shall have the right to receive such
Insurance  Proceeds  to  the  extent  (x) such   Insurance   Proceeds   are
attributable  to  a  casualty occurring prior to foreclosure or delivery of
any deed in lieu thereof  and  (y) of  any  deficiency found to be due upon
such sale, with legal interest thereon, and reasonable  counsel fees, costs
and disbursements incurred by the Agent in connection with  the  collection
of such Insurance Proceeds.  The Agent may, but shall not be obligated  to,
make  proof  of  loss  if not made promptly by the applicable Loan Party or
Subsidiary thereof.  During  the  continuance  of  an Event of Default, the
Agent  is  hereby  authorized  and  empowered by each of  CapStar  and  the
Borrower to settle, adjust or compromise any claims for damage, destruction
or loss thereunder, with or without the consent of any Loan Party or any of
its Subsidiaries (and each of CapStar  and  the Borrower hereby irrevocably
appoints and constitutes the Agent as CapStar's  and  the Borrower's lawful
attorney-in-fact,  coupled  with  an  interest  and  with  full   power  of
substitution, for such purpose).  In no event shall any Loan Party  or  any
of  its  Subsidiaries  settle, adjust or compromise any claim for Insurance
Proceeds in respect of any  Pool  A  Property in excess of $500,000 without
the prior written consent of the Agent,  which  shall  not  be unreasonably
withheld,  conditioned  or delayed; PROVIDED, HOWEVER, that this  provision
shall not restrict the right  of  the  lessor  under  any applicable Ground
Lease (1) to settle, adjust or compromise any claim for  Insurance Proceeds
to the extent such lessor is granted the power to do so under  such  Ground
Lease  or  (2)  to  approve any settlement, adjustment or compromise of any
claim for Insurance Proceeds  to  the extent the approval of such lessor is
required under such Ground Lease.   Subject  to  the  requirements  of  any
Ground  Lease  affecting  any  Pool  A  Property,  each  insurance  company
concerned  is  hereby  authorized  and  directed  to  make  payment  of all
Insurance  Proceeds in respect of each of the Pool A Properties payable  by
it directly  to  the  Agent.   If any Loan Party or any of its Subsidiaries
receives any Insurance Proceeds  resulting from such casualty in respect of
any Pool A Property, such Loan Party  or  Subsidiary  shall (subject to the
requirements of any Ground Lease affecting such Property)  promptly endorse
and transfer, or cause such Subsidiary to endorse and transfer, such excess
Insurance Proceeds to the Agent and each Loan Party covenants that until so
paid over to the Agent, such Loan Party or such Subsidiary,  as applicable,
shall  hold such Insurance Proceeds in trust for the benefit of  the  Agent
and shall  not  commingle  such  Insurance Proceeds with any other funds or
assets of such Loan Party or Subsidiary or any other Person.

     C.   NOTICE OF CONDEMNATION;  NEGOTIATION  AND  SETTLEMENT  OF CLAIMS.
The  Loan Parties shall, and shall cause their respective Subsidiaries  to,
promptly  deliver  written  notice to the Agent upon obtaining knowledge of
the institution, or the proposed  institution,  of  any bona fide action or
proceeding  for the Taking of all or any portion of any  Pool  A  Property.
The Agent shall have the right to participate in any negotiation, action or
proceeding relating  to  any such action or proceeding affecting any Pool A
Property, and no settlement  or  compromise of any claim in connection with
any such action or proceeding shall  be  made  without  the  consent of the
Agent,  which  consent  shall not be unreasonably withheld, conditioned  or
delayed; PROVIDED, HOWEVER,  that  this  provision  shall  not restrict the
right  of  the  lessor under any applicable Ground Lease (1) to  settle  or
compromise any such claim to the extent such lessor is granted the power to
do  so under such  Ground  Lease  or  (2)  to  approve  any  settlement  or
compromise  of  any such claim to the extent the approval of such lessor is
required under such  Ground  Lease.  Upon the occurrence of any Taking with
respect to a Pool A Property which will cost (or may reasonably be expected
to cost) more than $500,000 to  Restore,  as  reasonably  determined by the
Borrower  and  so  certified in an Officers' Certificate delivered  to  the
Agent, as soon as practicable  thereafter but in any event not less than 20
days prior to the commencement of  any Restoration of such Pool A Property,
the Borrower shall deliver to the Agent  a Notice of Renovation/Restoration
in the form attached hereto as EXHIBIT XVII.

     D.   CONDEMNATION PROCEEDS.  All Condemnation  Proceeds  in respect of
each of the Pool A Properties and the right thereto are hereby  irrevocably
assigned and pledged by each Loan Party to the Agent for the benefit of the
Lenders,  and  the  Agent  on  behalf of the Lenders is authorized, at  its
option, to collect and receive all  such  Condemnation Proceeds and to give
proper receipts and acquittances therefor; PROVIDED, HOWEVER, (x) that such
assignment and pledge with respect to any such  Pool  A Property is subject
to any requirements of any Ground Lease affecting such Pool A Property, (y)
if  no  Event of Default shall have occurred and be continuing,  such  Loan
Party shall  have  the  right  to  direct  the  Agent to apply Condemnation
Proceeds in accordance with subsections 6.11E and 6.11F and (z) if no Event
of  Default  shall  have  occurred and be continuing,  to  the  extent  not
inconsistent with the requirements  of  subsections  6.11E  and 6.11F, such
Loan Party shall have the right to direct the Agent to pay such  Loan Party
all  Condemnation  Proceeds  with  respect  to a Taking affecting a Pool  A
Property which will cost (or may reasonably be  expected to cost) less than
$500,000 to Restore.  Each Loan Party agrees to execute,  and to cause each
of   its   Subsidiaries  to  execute,  such  further  assignments  of   any
Condemnation  Proceeds  in  respect of any Pool A Property as the Agent may
reasonably  require  and  shall  otherwise  cooperate  with  the  Agent  in
obtaining for the Agent and  the  Lenders  the  benefit of any Condemnation
Proceeds lawfully or equitably payable in respect  of such Pool A Property,
subject to the provisos above.  If, prior to the receipt  by  the  Agent of
such Condemnation Proceeds, the portion of the Pool A Property, subject  to
such  action  or  proceeding  shall  have  been  sold on foreclosure of the
applicable Mortgage (or by deed in lieu thereof),  the Agent shall have the
right  to  receive  such  Condemnation  Proceeds  to  the  extent  (x) such
Condemnation  Proceeds  are  attributable  to a Taking occurring  prior  to
foreclosure  or  delivery  of  any  deed  in lieu  thereof  and  (y) of any
deficiency found to be due upon such sale, with legal interest thereon, and
reasonable counsel fees, costs and disbursements  incurred  by the Agent in
connection  with the collection of such Condemnation Proceeds.   The  Agent
may, but shall not be obligated to, make proof of loss if not made promptly
by the applicable  Loan  Party  or Subsidiary thereof.  Upon the occurrence
and during the continuance of an  Event of Default (but not otherwise), the
Agent is hereby authorized and empowered  by  each  Loan  Party  to settle,
adjust  or compromise any claims for Condemnation Proceeds with or  without
the consent  of such Loan Party or any of its Subsidiaries (and each of the
CapStar and the  Borrower  hereby  irrevocably appoints and constitutes the
Agent as its lawful attorney-in-fact,  coupled  with  an  interest and with
full power of substitution, for such purpose).  In no event  shall any Loan
Party or any of its Subsidiaries settle, adjust or compromise any claim for
Condemnation Proceeds in respect of any Pool A Property without  the  prior
written  consent  of  the  Agent, which shall not be unreasonably withheld,
conditioned or delayed; PROVIDED,  HOWEVER,  that  this provision shall not
restrict the right of the lessor under any applicable  Ground  Lease (1) to
settle or compromise any claim for Condemnation Proceeds to the extent such
lessor  is  granted  the power to do so under such Ground Lease or  (2)  to
approve any settlement or compromise of any claim for Condemnation Proceeds
to the extent the approval  of  such  lessor  is required under such Ground
Lease.  Subject to the requirements of any Ground  Lease affecting any Pool
A Property, each condemnor concerned is hereby authorized  and  directed to
make  payment  of  all  Condemnation  Proceeds  in  respect  of each of the
Properties payable by it directly to the Agent.  If any Loan Party  or  any
of  its Subsidiaries receives any Condemnation Proceeds resulting from such
condemnation  in  respect  of  any Pool A Property, such Loan Party or such
Subsidiary shall (subject to the requirements of any Ground Lease affecting
such  Pool  A  Property)  promptly  endorse   and   transfer   such  excess
Condemnation Proceeds to the Agent and each Loan Party covenants that until
so paid over to the Agent, such Loan Party or Subsidiary, as the  case  may
be,  shall  hold such Condemnation Proceeds in trust for the benefit of the
Agent and shall  not  commingle  such  Condemnation Proceeds with any other
funds or assets of such Loan Party or Subsidiary or any other Person.

     E.   REDUCTION OF BORROWING BASE; PAYMENT  OF  RELEASE  PRICE.  In the
event  of  any casualty or Taking with respect to a Pool A Property,  which
will cost (or  may  reasonably  be  expected to cost) more than $500,000 to
Restore, as reasonably determined by  the  Borrower  and so certified in an
Officers' Certificate delivered to the Agent, the Borrower  shall  elect by
written  notice  delivered  to the Agent as soon as practicable thereafter,
but in any event before the earlier  of (x) 10 days after the occurrence of
such casualty or Taking and (y) the commencement of the Restoration of such
Pool A Property, either:

          (i)  to remove the Pool A Property  from  the  calculation of the
     Borrowing  Base pursuant to subsection 2.9D, prepay the  Loans  in  an
     amount equal to the Release Price with respect to such Pool A Property
     and not Restore such Pool A Property;

         (ii)  if  all  the  following  conditions  shall  be satisfied, to
     Restore such Pool A Property pursuant to subsection 6.11F:

               (a)  the Maturity Date shall then not have occurred;

               (b)  no Potential Event of Default (other than any Potential
          Event  of  Default  caused  solely by an event or condition  with
          respect to another Property)  or  Event  of  Default  shall  have
          occurred   and   be   continuing  or  would  be  caused  by  such
          Restoration;

               (c)  the Borrower  is in compliance in all respects with the
          provisions of subsection 6.11F;

               (d)  either (1) the  Agent  shall  have  determined,  in its
          reasonable discretion and after considering such written opinions
          of architects and engineers and other written information as  the
          Borrower  shall  timely deliver to the Agent, that Restoration of
          such Pool A Property  is,  under the circumstances then existing,
          physically and economically  feasible  and  can  be  completed in
          accordance  with  subsection 6.11F  on or before a date not  less
          than  six months  prior  to  the  Maturity   Date   or  (2)  such
          Restoration shall not constitute a Major Renovation/Restoration;

               (e)  the  Loan  Parties  and  their  respective Subsidiaries
          shall  have  business  interruption  insurance   complying   with
          subsection 6.10  in  an amount at least equal to the reduction in
          Property EBITDA with respect  to  such  Pool  A Property, if any,
          which the Borrower reasonably expects to suffer during the period
          of Restoration;

               (f)  the  Loan  Parties  and  their respective  Subsidiaries
          shall have complied with all notice  and other requirements under
          any  Ground Lease affecting such Pool A  Property  that  must  be
          satisfied  in  respect  of  such  Restoration, the Restoration is
          permitted under the terms of such Ground  Lease  and  the  Ground
          Lease remains in full force and effect; and

               (g)  either   (1) the  Net  Insurance/Condemnation  Proceeds
          shall be sufficient to complete the costs of such Restoration, as
          determined by the Agent  in its reasonable discretion, or (2) the
          Loan  Parties  and  their  respective   Subsidiaries  shall  have
          provided, at the Borrower's option, a cash deposit or a letter of
          credit satisfactory to the Agent (other than a Letter of Credit),
          in  its  reasonable  discretion  (or other collateral  reasonably
          satisfactory to the Agent), for the  amount  of  any shortfall in
          the  amount of Net Insurance/Condemnation Proceeds  necessary  to
          cover the costs to complete such Restoration; or

        (iii)  to  prepay the Loans in an amount equal to the Release Price
     with respect to  such Pool A Property and Restore such Pool A Property
     pursuant to subsection 6.11G.

If the Loan Parties and their respective Subsidiaries shall fail to satisfy
the conditions set forth  in  clause (ii)  of  the preceding sentence or in
subsection 6.11F with respect to the related Pool A Property, or shall fail
to diligently and continuously prosecute the Work to completion (other than
as  a  result  of  Excusable Delay), as determined by  the  Agent,  in  its
reasonable discretion,  then,  subject  to  the  requirements of any Ground
Lease affecting such Pool A Property, the Pool A Property  shall be removed
from the calculation of the Borrowing Base pursuant to subsection 2.9D, the
Borrower  shall  prepay  the Loans in an amount equal to the Release  Price
with  respect to such Property  and  the  Agent  shall  apply  any  or  all
remaining  Insurance  Proceeds  or  Condemnation  Proceeds,  as applicable,
towards such prepayment.

     F.   RESTORATION  WITH  NET INSURANCE/CONDEMNATION PROCEEDS.   In  the
event of any casualty or Taking  with  respect  to a Pool A Property, which
will cost (or may reasonably be expected to cost)  more  than  $500,000  to
Restore,  as  reasonably  determined by the Borrower and so certified in an
Officers' Certificate delivered  to  the  Agent, if any of the Loan Parties
and their respective Subsidiaries elects to  Restore  a  Pool  A  Property,
pursuant  to  this  subsection  6.11F  and  the  conditions  set  forth  in
clause (ii)  of  the  first sentence of subsection 6.11E are satisfied, all
Net Insurance/Condemnation  Proceeds shall be held by the Agent (subject to
the requirements of any Ground  Lease affecting such Pool A Property) in an
interest-bearing account at the Agent, with all interest to be held therein
until completion and final inspection  of the Work, and shall be applied by
the Agent to the payment of the cost of  Restoring  such Pool A Property so
damaged or destroyed or of the portion or portions of  such Property not so
Taken  (the  ``WORK'')  and  shall  be paid out from time to  time  to  the
Borrower  as  the  Work  progresses, subject  to  retainage  as  reasonably
determined by the Agent in  accordance  with construction lending practices
and otherwise in accordance with any conditions  reasonably  imposed by the
Agent but subject to each of the following conditions:

          (i)  Subject  to  Excusable  Delays, the Borrower shall  promptly
     (and in any event within 120 days after  the  applicable  casualty  or
     Taking)  commence,  or  cause the commencement of, Restoration of such
     Pool A Property.

         (ii)  If the Work is  structural  or  if  the cost of the Work, as
     estimated  by  the Borrower, shall exceed the lesser  of  10%  of  the
     Property Amount  with  respect to such Property and $500,000, the Work
     shall be in the charge of  an  architect  or  Engineer  (who may be an
     employee or Affiliate of CapStar or the Borrower only if  the  cost of
     the  Work  does  not  exceed  such lesser amount), and before any Loan
     Party  or  any of its Subsidiaries  commences  any  Work,  other  than
     temporary work  to  protect  property  or  prevent  interference  with
     business,  the  Agent shall have approved the plans and specifications
     and the general contract  for  the  Work  to be submitted by such Loan
     Party  or such Subsidiary, which approval shall  not  be  unreasonably
     withheld, conditioned or delayed.  Such plans and specifications shall
     provide  for such Work that, upon completion thereof, the Improvements
     shall (x) be  in  compliance  in  all material respects with all legal
     requirements such that all representations  or  warranties of the Loan
     Parties  relating  to  the  compliance  of such Pool A  Property  with
     Applicable Laws in this Agreement or any  of  the other Loan Documents
     would then be true and correct, and (y) be at least equal in value and
     general utility to the Improvements which were on such Pool A Property
     prior  to  the  damage,  destruction  or  Taking.   Such   plans   and
     specifications  shall  be  accompanied by (1) a signed estimate of the
     Borrower, or, if an architect or Engineer is required to supervise the
     Work,  such  architect or Engineer,  stating  the  estimated  cost  of
     completing the  Work,  which  estimate  shall  bear the architect's or
     Engineer's  seal  if not made by the Borrower and  (2) to  the  extent
     necessary  at  such  stage  of  the  Work,  certified  copies  of  all
     Authorizations  required  in  connection  with  the  commencement  and
     performance of the Work.

        (iii)  Each request  for payment shall be made on seven days' prior
     notice to the Agent and shall  be  accompanied by paid invoices and by
     (a) a certificate to be made by such  architect or Engineer, if one be
     required   under  clause (ii)  above,  otherwise   by   an   Officers'
     Certificate  of  the  Borrower,  stating  that  (1) all  of  the  Work
     completed  has  been  done in substantial compliance with the approved
     plans and specifications,  if  any  be required under said clause (ii)
     above, and (2) the sum requested is justly  required  to reimburse any
     of  the  Loan  Parties and their respective Subsidiaries for  payments
     made by the applicable  Loan  Party  or  Subsidiary  thereof to, or is
     justly due to, the contractor, subcontractors, materialmen,  laborers,
     engineers, architects or other Persons rendering services or materials
     for  the  Work  (giving  a  brief  description  of  such  services and
     materials), and that when added to all sums previously paid out by the
     Agent  does not exceed the cost of the Work done to the date  of  such
     certificate,   and  (b)  an  Officers'  Certificate  of  the  Borrower
     stating either that  (x)  the amount of such proceeds remaining in the
     hands of the Agent, or (y) the amount of such funds, PLUS funds in the
     hands of the applicable Loan  Party  or  Subsidiary thereof from other
     sources  irrevocably committed to the completion  of  the  Work  in  a
     manner reasonably  satisfactory  to  the  Agent (including delivery of
     such  funds  to the Agent for application to  pay  the  costs  of  the
     Restoration),  will be sufficient on completion of the Work to pay for
     the same in full  (giving  in  such reasonable detail as the Agent may
     require an estimate of the cost  of  such  completion).  The Agent may
     require  that  any  such statements be independently  verified  by  an
     inspector approved by the Agent.

         (iv)  Each  request  shall  be  accompanied  by  waivers  of  lien
     satisfactory to the  Agent  covering  that  part of the Work for which
     payment or reimbursement has been made (or other  evidence as shall be
     satisfactory  to the Agent in its sole discretion confirming  that  no
     rights  of  mechanics,  contractors,  subcontractors,  materialmen  or
     suppliers are  outstanding  in  respect  of such Work) and by a search
     prepared  by the Title Company reasonably satisfactory  to  the  Agent
     establishing that there has not been filed with respect to such Pool A
     Property any  mechanics' or other lien or instrument for the retention
     of title in respect  of  any part of the Work not discharged of record
     or bonded to the reasonable  satisfaction  of the Agent and evidencing
     the  continued priority of the Mortgage and Assignment  of  Rents  and
     Leases on such Pool A Property.

          (v)  The  available  Insurance  Proceeds or Condemnation Proceeds
     which are paid or will be payable by the  insurance  company (together
     with  any  cash, irrevocable letter of credit, payment or  performance
     bond or United  States  government obligation assigned to the Agent as
     collateral, in each case  reasonably  acceptable  to  the  Agent as to
     amount, obligor and maturity) are, in the reasonable judgment  of  the
     Agent, sufficient to pay in full the costs of the Restoration.

         (vi)  There  shall  be  no  Event of Default or Potential Event of
     Default (other than any Potential Event of Default caused solely by an
     event or condition with respect to another Property).

        (vii)  The  request  for  any  payment  after  the  Work  has  been
     completed shall be accompanied by (a) a  copy  of  any  certificate or
     certificates  required  by law to render occupancy of the improvements
     being rebuilt, repaired or  restored legal; and (b) final lien waivers
     for  all  labor,  materials  and   supplies   from   all  contractors,
     subcontractors  and  materialmen,  except  with respect to  claims  or
     rights being contested or bonded in accordance  with the provisions of
     subsection 6.9.

       (viii)  After commencing the Work, the Borrower  shall,  subject  to
     Excusable Delays, perform, or shall cause the applicable Loan Party or
     Subsidiary  thereof  to perform, the Work diligently and in good faith
     in a good and workmanlike  manner to completion in accordance with the
     approved plans and specifications, if any.

         (ix)  The Agent shall have  received ``agreements to complete'' of
     the general contractor and any independent  architects  or  Engineers,
     which agreements to complete shall be in form and substance reasonably
     satisfactory to the Agent.

          (x)  The  Borrower  shall have obtained and maintained, or  shall
     have caused the applicable  Loan Party or Subsidiary thereof to obtain
     and maintain, completed value  builders'  risk (all risk) insurance in
     accordance with subsection 6.10A.

     All  costs  and  expenses  of  any  Restoration,   including,  without
limitation, any Work, Engineer's fees, architect's fees or contractors fees
and the cost and expenses of complying with this subsection 6.11F, shall be
for the account of the Borrower.  Upon completion of the  Work  and payment
in  full  therefor,  the  Borrower  shall  promptly deliver to the Agent  a
Completion Certificate with respect thereto,  together  with all final lien
waivers in form and substance reasonably satisfactory to the Agent, and the
Agent  shall  return  to  the Borrower the amount of any unspent  Insurance
Proceeds or Condemnation Proceeds  then  or  thereafter in the hands of the
Agent  on account of the casualty or Taking that  necessitated  such  Work,
together  with  all  undisbursed accrued interest thereon.  Nothing in this
subsection shall prevent  the  Agent  from  applying at any time all or any
part of the Insurance Proceeds or Condemnation  Proceeds  to  the curing of
any Event of Default under this Agreement or any other Loan Document.

     G.   OTHER RESTORATIONS.  In the event of any casualty or  Taking with
respect  to  a  Pool  A  Property,  which  will cost (or may reasonably  be
expected to cost) more than $500,000 to Restore,  as  reasonably determined
by the Borrower and so certified in an Officers' Certificate  delivered  to
the Agent, and either (x) the Borrower or any of its Subsidiaries elects to
Restore  a  Pool A Property pursuant to subsection 6.11F but the conditions
set forth in  clause (ii) of the first sentence of subsection 6.11E are not
satisfied or (y) the  Borrower or any of its Subsidiaries elects to Restore
any Pool A Property pursuant to this subsection 6.11G, the Borrower shall:

          (i)  prepay the  Loans  in  an  amount  equal  to  the applicable
     Release  Price;  PROVIDED  that the Insurance Proceeds or Condemnation
     Proceeds received in connection  with  such  casualty or Taking may be
     applied to such payment; and

         (ii)  together    with    the   delivery   of   the   Notice    of
     Renovation/Restoration pursuant  to subsection 6.11A or 6.11C, deliver
     to  the Agent the following: (a) a  project  budget  (as  revised  and
     supplemented   from   time   to   time   in   accordance   with   this
     subsection 6.11G, the ``RESTORATION BUDGET'') satisfactory in form  to
     the  Agent  and setting forth, among other things, the aggregate costs
     for such Restoration,  and  the  aggregate  cost for each line item in
     such  budget;  (b) an  estimated time schedule for  such  Restoration,
     reasonably satisfactory  in form to the Agent and setting forth, among
     other things, the projected  completion  date; (c) the final plans and
     specifications for the Restoration (as revised  and  supplemented from
     time   to   time   in  accordance  with  this  subsection 6.11G,   the
     ``RESTORATION PLANS'')  which shall provide for the restoration of the
     related  Improvements  such   that,   upon   completion  thereof,  the
     Improvements shall (x) be in compliance in all  material respects with
     all legal requirements such that all representations  or warranties of
     the  Loan Parties relating to the compliance of such Pool  A  Property
     with Applicable  Laws  in  this  Agreement  or  any  of the other Loan
     Documents would then be true and correct, and (y) be at least equal in
     value and general utility to the Improvements which were  on such Pool
     A Property prior to the related damage, destruction or Taking,  as the
     case  may  be;  and  (d) all  such other information or materials with
     respect to the Restoration that the Agent may reasonably request.

If the Borrower or any applicable Subsidiary  materially  changes the scope
of  the  intended  Restoration,  materially revises the Restoration  Budget
(including the estimated amounts contained  therein), or materially revises
or modifies the Restoration Plans, the Borrower  shall  promptly deliver to
the Agent a supplement to the Restoration Budget or Restoration  Plans or a
revised  Restoration  Budget  or  revised Restoration Plans, as applicable,
which,  with  respect  to  any  Pool A  Property,   shall   be   reasonably
satisfactory  in  form  and  substance  to the Agent.  Subject to Excusable
Delays, the Borrower shall, and shall cause  each applicable Subsidiary to,
commence such Restoration as soon as practicable,  and  in any event within
120 days of the applicable casualty or Taking, and complete the Restoration
promptly,  in  a  good  and workmanlike manner and in accordance  with  the
Restoration Plans.  Upon  the  reasonable  request of the Agent, and in any
event not less frequently than quarterly, the Borrower shall provide to the
Agent  a written report with respect to the progress  and  status  of  each
Restoration,  in  scope  and  detail  reasonably satisfactory to the Agent.
Upon completion of the Restoration, the  Borrower shall promptly deliver to
the Agent a Completion Certificate with respect  thereto, together with all
final  lien waivers in form and substance reasonably  satisfactory  to  the
Agent.   All  costs  and  expenses  of  any Restoration, including, without
limitation, the cost and expenses of complying  with this subsection 6.11G,
shall be for the account of the Borrower.  If the  Agent  determines at any
time  that  the Borrower is not in compliance with the provisions  of  this
subsection 6.11G  or  that  the  Pool  A  Property  cannot  be  Restored as
contemplated by this subsection 6.11G, the Agent shall provide the Borrower
written  notice  of  such determination and, within 10 Business Days  after
delivery of such notice,  the  Borrower  shall prepay the Loans (net of any
prior  prepayments made by the Borrower in  respect  of  such  casualty  or
Taking pursuant to this subsection) and the Borrowing Base shall be reduced
as provided in subsection 6.11E.

     H.   ENGINEER'S INSPECTION.  At any time after the Agent becomes aware
of a casualty or Taking involving an aggregate amount in excess of $500,000
(as reasonably  determined by the Borrower and so certified in an Officers'
Certificate delivered  to  the  Agent)  the  Agent  may hire an independent
engineer  to  inspect the applicable Property and the Agent  may  deem  any
related Restoration  not  complete  unless the engineer determines that the
Restoration was completed in accordance  with  this Agreement.  The cost of
such inspection shall be for the account of the Borrower.

6.12 RENOVATIONS.

     A.   NOTICE OF RENOVATION; RENOVATION PLANS.   If  the Borrower or any
of its Subsidiaries intends to Renovate any Pool A Property  (including any
expansion of Improvements to increase the number of available  rooms)  in a
project  or  series of related projects (other than the replacement of FF&E
in the ordinary  course of business), the cost of which will exceed (or may
reasonably be expected to exceed) $250,000, as reasonably determined by the
Borrower and as so  certified  in an Officers' Certificate delivered to the
Agent, the Borrower shall, not less  than 20 days prior to the commencement
of  any  such  Renovation (or, if such approval  shall  be  sought  by  the
Borrower in connection with the approval by the Agent of the Acquisition of
such Pool A Property  pursuant  to  subsection  2.9A, not less than 20 days
prior  to the proposed closing date of such Acquisition),  deliver  to  the
Agent the  following:   (i) a Notice of Renovation/Restoration with respect
thereto, in the form of EXHIBIT XVII attached hereto; (ii) a project budget
for such Renovation (as revised  and  supplemented  from  time  to  time in
accordance   with   this   subsection 6.12A,  the  ``RENOVATION  BUDGET''),
reasonably satisfactory in form to the Agent and setting forth, among other
things, the aggregate costs for such Renovation, and the aggregate cost for
each line item in such budget;  (iii) an  estimated  time schedule for such
Renovation, reasonably satisfactory in form to the Agent and setting forth,
among other things, the projected completion date, the number of rooms that
will  be  unavailable for business as a result of such Renovation  and  the
duration of  such  unavailability;  (iv) the final plans and specifications
for  the  Renovation (as revised and supplemented  from  time  to  time  in
accordance  with  this  subsection 6.12A, the ``RENOVATION PLANS''), to the
extent  appropriate  for  such   project,   which,   shall   be  reasonably
satisfactory  in  form  and substance to the Agent; and (v) all such  other
information or materials  with respect to the Renovation that the Agent may
reasonably request.  The Agent  has  approved  the  Renovation  Budgets and
Renovation Plans with respect to the Properties specified on SCHEDULE 6.12A
annexed  hereto.   In  the event the Borrower, or any applicable Subsidiary
changes  the  scope of the  intended  Renovation,  materially  revises  the
Renovation Budget  (including  the estimated amounts contained therein), or
materially revises or modifies the  Renovation  Plans,  the  Borrower shall
promptly  deliver  to  the  Agent a supplement to the Renovation Budget  or
Renovation  Plans or a revised  Renovation  Budget  or  revised  Renovation
Plans, as applicable;  which  shall  be reasonably satisfactory in form and
substance to the Agent; PROVIDED that,  notwithstanding  anything contained
in  this  Section  6.12A,  all  expenditures  for Renovations shall  be  in
compliance with subsection 7.16.  Upon the reasonable request of the Agent,
and  in any event not less frequently than quarterly,  the  Borrower  shall
provide  to  the  Agent  a  written report with respect to the progress and
status of each Renovation, in  scope  and detail reasonably satisfactory to
the Agent.

     B.   CONDUCT OF RENOVATION; COSTS.   Subject  to Excusable Delays, the
Borrower shall, or shall cause its Subsidiaries to, complete the Renovation
promptly,  in  a  good  and workmanlike manner and in accordance  with  the
Renovation Plans.  Upon the request of the Agent, and in any event not less
frequently than monthly,  the Borrower shall advise the Agent in writing of
the progress and status of  the Renovation in reasonable detail.  All costs
and expenses of any Renovation, including, without limitation, the cost and
expenses of complying with this  subsection  6.12, shall be for the account
of the Borrower.

     C.   COMPLETION CERTIFICATE.  Upon completion  of  the Renovation, the
Borrower shall promptly deliver to the Agent a Completion  Certificate with
respect thereto, together with all final lien waivers in form and substance
reasonably satisfactory to the Agent.

     D.   ENGINEER'S INSPECTION.  At any time after the Agent becomes aware
of  a  Renovation  involving an aggregate amount in excess of $500,000  (as
reasonably determined  by  the  Borrower  and  so certified in an Officers'
Certificate  delivered  to the Agent), the Agent may  hire  an  independent
engineer  to  inspect  the applicable  Pool  A  Property  and  the  related
Renovation and the Agent  may  deem such Renovation not complete unless the
engineer determines that such Renovation  was  completed in accordance with
this Agreement.  The cost of such inspection shall  be  for  the account of
the Borrower.

6.13 BRUNDAGE CLAUSE.

     In the event of the enactment of or change in (including  a  change in
interpretation  of)  any Applicable Law (i) deducting or allowing any  Loan
Party or any of its Subsidiaries  to  deduct  from  the value of any Pool A
Property for the purpose of taxation any Lien thereon,  (ii) subjecting any
Lender  to  any  tax  in respect of, or changing the basis of  taxation  in
respect of, the Mortgages, or the manner of collection of such taxes (other
than Taxes on net income,  franchise  taxes  and  doing business taxes), or
(iii) for the taxation of mortgages or debts secured by mortgages or in the
means of collection of any such tax, in each such case, so as to affect any
Lender or the Notes or the Mortgages or any other Loan  Document,  and  the
result  is  to increase the taxes imposed upon or the cost to any Lender of
maintaining the  Loans,  or to reduce the amount of any payments receivable
under the Notes, the Mortgages or any other Loan Document, or to invalidate
the Lien created by any Security  Document,  then,  in  any such event, the
Borrower shall, within ten Business Days of receipt of a  request therefor,
accompanied by documentation verifying the nature, amount and due date, pay
to such Lender additional amounts to compensate for such increased costs or
reduced  amounts;  PROVIDED,  HOWEVER,  that  if  any Lender makes  such  a
request,  or  if  the  Lien  created  by  any  Security  Document   may  be
invalidated,  then  the Borrower shall have the right, and, in the case  of
such invalidation, shall have the obligation, to reduce the Commitments and
prepay the Loans, in  accordance  with the provisions of this Agreement and
the  Notes;  PROVIDED  FURTHER,  HOWEVER,  that  if  any  such  payment  or
reimbursement shall be unlawful or  would  constitute  usury  or render the
Loans  wholly  or  partially usurious under Applicable Law, then the  Agent
may, in its sole discretion,  declare the Loans so affected immediately due
and payable (without premium or penalty) and/or require the Borrower to pay
or reimburse the Lenders for payment of the lawful and non-usurious portion
thereof not less than 180 days after notice of such declaration.

6.14 INTEREST RATE PROTECTION.

     If  at  any  time  the  Total  Utilization   of   Commitments  exceeds
$100,000,000, then within 60 days, the Borrower shall obtain and thereafter
shall  maintain  (until such time as the Total Utilization  of  Commitments
does not exceed $100,000,000) interest rate protection through the Maturity
Date in an aggregate  notional  amount  at  least equal to 40% of the Total
Utilization of Commitments and on terms and with counterparties approved by
the Agent, which approval shall not be unreasonably  withheld,  conditioned
or delayed and which interest rate protection shall provide that the sum of
(i)  the  maximum  per  annum  rate  of  interest  payable hereunder by the
Borrower with respect to Loans PLUS (ii) the net cost of such interest rate
protection (expressed as a per annum percentage of the  applicable notional
amount), shall not exceed 11% per annum.

6.15 CASH  MANAGEMENT  SYSTEM;  AGENT  RIGHTS;  APPLICATION OF  CASH  FLOW;
DEPOSITORY ACCOUNT NAMES.

     A.   CASH MANAGEMENT SYSTEM.  Each Loan Party  shall,  and shall cause
each of its Wholly Owned Subsidiaries (other than the Pool B  Subsidiaries)
to,  maintain  the  Cash  Management  System  as described in SCHEDULE 5.23
annexed hereto; PROVIDED, HOWEVER, that each Loan  Party may open and close
Local Accounts and make other changes to the Cash Management  System in the
ordinary course of business upon prior written notice to the Agent  as long
as  (i) no  Event of Default has occurred and is continuing or would result
therefrom, (ii) such  changes,  either individually or in the aggregate are
not adverse to either the Agent or any Lender (in its capacity as a Lender)
or  impair  any rights, priority or  perfection  of  the  Agent  under  the
Security Documents,  (iii) in the case of any closing of any Local Account,
a replacement Local Account  satisfactory  to  the  Agent is opened by such
Loan Party or such Subsidiary, as the case may be, and  a  Cash  Management
Letter is entered into with respect to such replacement Local Account prior
to  the  closing  of such Local Account and (iv) all Receipts of each  Loan
Party and each of its  Wholly  Owned  Subsidiaries  (other  than the Pool B
Subsidiaries)  continue  to  be  collected  and  distributed  pursuant   to
procedures  subject  to  Cash  Management  Letters  at all times, except as
described on SCHEDULE 5.23; PROVIDED FURTHER, that the Borrower may close a
Concentration Account and open a substitute Concentration  Account with any
Lender as long as (i) no Event of Default has occurred and is continuing or
would   result   therefrom   and   (ii) prior  to  opening  any  substitute
Concentration  Account,  the  Borrower   shall   have   delivered  evidence
satisfactory to the Agent that the Agent shall have, for the benefit of the
Lenders, a perfected security interest in such Concentration  Account.  For
the  purposes  of  this  subsection  6.15,  Receipts shall include, without
limitation,  Receipts  derived  from  the  Atlanta   Note,  Investments  in
Subsidiaries and Joint Ventures (including without limitation,  the Atlanta
Sub and the Pool B Subsidiaries) and other Securities.

     B.   AGENT RIGHTS.  Each Loan Party shall, and shall cause each of its
Wholly Owned Subsidiaries (other than Pool B Subsidiaries) to, comply  with
the following:

          (i)  Notwithstanding any other provision of this Agreement or any
     other  Loan  Document,  except  as  described on SCHEDULE 5.23 annexed
     hereto, all Receipts of each Loan Party  and  each of its Wholly Owned
     Subsidiaries  shall  be  deposited daily in Local  Accounts  that  are
     subject to Cash Management  Letters or into the Concentration Account,
     in each case on or before the  first  Business  Day  following receipt
     thereof,  by  the  accounting  office  of  the  Loan  Party  or   such
     Subsidiary,  as  applicable,  and  as soon as practical in the case of
     Receipts received in any other manner.   All  funds  on deposit in the
     Local  Accounts  of  each  Loan  Party  and  each of its Wholly  Owned
     Subsidiaries (other than the Pool B Subsidiaries) shall be transferred
     to the Concentration Account in the manner described on SCHEDULE 5.23.
     Receipts  shall  be  received  and held by such Loan  Party  and  such
     Subsidiary and any of their respective  officers,  employees,  agents,
     managers  or  other  Persons  acting  for or in concert with such Loan
     Party or such Subsidiary to make collections  for or on behalf of such
     Loan Party or such Subsidiary, in trust for the Agent as Collateral.

         (ii)  So long as no Event of Default shall  have  occurred  and is
     continuing, the Borrower may request that the Agent instruct the  Cash
     Manager  to  either  apply  Receipts  on  deposit in the Concentration
     Account  to  pay  Obligations or transfer such  Receipts  to  accounts
     designated  by the Borrower  in  such  amounts  as  the  Borrower  may
     require, in each  case  by delivering such a request to the Agent.  As
     long as no Event of Default  shall  have  occurred  and be continuing,
     upon receipt by the Agent of such a request, the Agent  shall instruct
     the  Cash Manager to apply the Receipts on deposit in accordance  with
     such request; PROVIDED that the Agent may instruct the Cash Manager to
     automatically  apply  Receipts on deposit in the Concentration Account
     in  accordance  with the  Borrower's  instructions  unless  the  Agent
     notifies the Cash Manager that an Event of Default has occurred and is
     continuing, subject  to  the  availability  of funds on deposit in the
     Concentration Account.

          (iii)So long as no Event of Default  shall  have  occurred and is
     continuing,  the Borrower may instruct the Cash Manager to  invest  in
     Cash Equivalents in accordance with the Borrower's instructions all or
     any part of amounts  from time to time on deposit in the Concentration
     Account, other than amounts  necessary  to effectuate a request by the
     Borrower as provided for in subsection 6.15B(ii)  with  respect to the
     use  of such Receipts, and the Agent shall authorize the Cash  Manager
     to follow  the  Borrower's instructions as long as no Event of Default
     shall exist.

     C.   APPLICATION  OF CASH FLOW BY AGENT.  During the continuance of an
Event of Default, the Agent  may, in its sole discretion in accordance with
subsection 6.15B(iii), apply funds  on  deposit  in  the Local Accounts and
other  Receipts  received  by  the Agent, (i) to the payment  of  Operating
Expenses  of the Properties, federal,  state  and  local  taxes  and  other
expenses  or   liabilities   of  the  Loan  Parties  and  their  respective
Subsidiaries and/or (ii) to the  payment  of the Obligations.  In the event
that the Agent determines, during the continuance  of  an Event of Default,
to  apply  funds  or Receipts to the payment of Operating Expenses  of  the
Properties,  federal,   state   and  local  taxes  and  other  expenses  or
liabilities of the Loan Parties and  their respective Subsidiaries promptly
after being notified of such determination by the Agent, the Borrower shall
deliver to the Agent (x) within five Business Days of the first day of each
calendar month during the continuance  of  an  Event  of  Default, a budget
setting forth the estimated Operating Expenses and other amounts  set forth
above for such calendar month (y) within three Business Days of the date on
which  the  Borrower  desires  a  disbursement  to  be  made,  but not more
frequently   than  once  in  any  calendar  week,  a  written  request  for
disbursements  with  respect  to  Operating  Expenses and amounts set forth
above  for  such  calendar  week  and (z) such other  budgets  and  related
information as the Agent may reasonably  request.  Upon receipt of any such
request for disbursements, the Agent may,  in its sole discretion, instruct
the Cash Manager to transfer funds on deposit  in the Concentration Account
to any other account of the Borrower or its Subsidiaries  to  be applied to
the  payment  of  amounts  set forth in such request for disbursements  and
approved by the Agent.

     D.   NAMES ON DEPOSIT ACCOUNTS.   The  Borrower shall cause each Local
Account and Concentration Account listed on SCHEDULE 5.23 annexed hereto in
respect of a Pool A Property to be changed to  the extent necessary so that
such Local Account is, promptly after the Closing  Date  but  in  no  event
later than December 31, 1996, maintained by and in the name of the Borrower
or any of its Wholly Owned Subsidiaries.

     E.   CASH   MANAGEMENT   LETTER.   Notwithstanding  anything  in  this
Agreement or in any of the other  Loan Documents to the contrary, including
any Cash Management Letter, except  during  the continuation of an Event of
Default, the Agent shall not withdraw any funds  from,  close  or  take any
other actions in connection with any Deposit Account (other than cause such
funds to be transferred to the Concentration Account) pursuant to any  Cash
Management  Letter  without the Borrower's prior written consent or written
joinder.  During the  continuation  of an Event of Default, the Agent shall
have the same rights with respect to  any  Local  Account  as are expressly
provided in this Agreement with respect to the Concentration Account during
the continuance of an Event of Default (or event subject to subsection 8.1A
that  would  be  an  Event  of  Default  with  the  lapse  of  time).   The
instructions given by any Loan Party to any depository institution  in  any
Cash Management Letter shall be made without prejudice to the rights of the
Borrower  under  this Agreement or any other Loan Document (other than such
Cash Management Letter).   All  Cash Management Letters with respect to the
Local Accounts listed on SCHEDULE 5.23 annexed hereto shall be delivered to
the Agent, in form and substance  reasonably  satisfactory to the Agent, on
or before December 31, 1996.

6.16 CAPITAL RESERVE ACCOUNT; DEFERRED MAINTENANCE.

     A.   CAPITAL RESERVE ACCOUNT.  On or before  the last day of the month
next following the end of each calendar quarter, commencing  on January 31,
1997, the Borrower shall do the following:

          (i)  either  (a) deposit into or cause to be deposited  into  the
     Capital Reserve Account  an amount equal to the remainder, which shall
     not be less than zero, of  (1) 4.00%  of  Property  Gross Revenues for
     each  of  the  Properties for the four immediately preceding  calendar
     quarters; PROVIDED that such percentage shall be 3.00% with respect to
     any Property at  which  a  Renovation costing more than $1,000,000 (as
     evidenced by written documentation reasonably satisfactory in form and
     substance to the Agent) has  been  completed during the 12 consecutive
     month period ending on the applicable date of determination, MINUS (2)
     the aggregate cost of Capital Items  that  shall  have  been paid with
     respect  to  such  Property during such four calendar quarters,  which
     payments  shall not have  been  funded  from  disbursements  from  the
     Capital Reserve  Account  or  from  an  Other Capital Reserve Account,
     MINUS  (3) the  aggregate  amount deposited  in  the  Capital  Reserve
     Account pursuant to this subsection  6.16A(i)(a)  with respect to such
     four  calendar quarter period (excluding all amounts  required  to  be
     deposited during such four calendar quarter period but calculated with
     respect  to  a  prior  period), MINUS (4) if such Property is a Pool B
     Property, the aggregate  amount,  if  any,  that  shall then have been
     deposited  with  respect  to  such  Property in Other Capital  Reserve
     Accounts pursuant to the requirements of the related Pool B Obligation
     for such calendar quarter or (b) if no  Event  of Default or Potential
     Event of Default then exists, the amount calculated pursuant to clause
     (a) above shall be included in Total Utilization; and

         (ii)   deliver to the Agent an Officers' Certificate  with respect
     to  (a) the  allocation  of  such  amount among the Properties,  which
     allocation shall reflect the amounts  determined  with  respect to the
     Properties pursuant to the preceding clause (i), (b) the allocation of
     the  resulting  balance  in  the  Capital  Reserve  Account among  the
     Properties,  which  allocation  shall  reflect the allocation  of  all
     deposits in the Capital Reserve Account  pursuant  to  this subsection
     6.16A  and  all transfers therefrom pursuant to this subsection  6.16A
     and (c) the deposits in and withdrawals from each of the Other Capital
     Reserve  Accounts  during  the  preceding  calendar  quarter  and  the
     respective closing balances thereof.

     On or before  the  thirtieth  day after the end of each calendar year,
the  Borrower  shall  deliver  to  the  Agent   an   Officers'  Certificate
summarizing amounts withdrawn from the Capital Reserve  Account  during the
preceding year and the application of such proceeds.

     So  long  as no Event of Default has occurred and is continuing,  upon
the Borrower's written  request  and  not  more  frequently  than once each
month, (x) the Agent shall transfer funds to the Borrower then  on  deposit
in the Capital Reserve Account for the payment of costs of Capital Items or
for  the deposit of funds into Other Capital Reserve Accounts, in the  case
of each  such  deposit  an amount not greater than the amount of funds then
required by the terms of  the related Pool B Obligation to be so deposited;
PROVIDED, HOWEVER, that the  aggregate amount of such funds applied towards
Capital Items from the Capital  Reserve  Account in respect of any Property
shall not exceed the aggregate amount of funds  deposited  in  the  Capital
Reserve Account in respect of such Property and (y) on the last day of  the
month next following the end of each calendar quarter, the aggregate amount
to  be  reserved  pursuant  to  clause  (iv)  of  the  definition  of Total
Utilization shall be reduced (to a number not less than zero) by an  amount
equal  to  the   remainder  of  (1)  the  sum  of  the  aggregate amount of
expenditures for Capital Items during the preceding calendar  quarter  PLUS
the aggregate amount of deposits into Other Capital Reserve Accounts during
the preceding calendar, in each case in amounts not greater than the amount
of funds then required by the terms of the related Pool B Obligation to  be
so  deposited,  MINUS  (2)  the  sum  of  the aggregate amount of transfers
pursuant  to  clause  (x)  above  during  such calendar  quarter  PLUS  the
aggregate amount of prior reductions pursuant  to this subclause (2) during
such calendar quarter; PROVIDED that the aggregate reduction in reserves in
respect of any Property shall not exceed the aggregate  amount  reserved in
respect  of  such  Property.  Together with each such request, the Borrower
shall deliver to the  Agent  copies of bills and other documentation as may
be reasonably required by the Agent to establish that such Capital Items or
such deposits in such Other Capital  Reserve  Accounts, as the case may be,
are then due.

     B.   DEFERRED MAINTENANCE ACCOUNT.  So long  as no Event of Default or
Potential  Event  of  Default  has  occurred  and is continuing,  upon  the
Borrower's written request and not more frequently  than  once  each month,
(i) the Agent shall transfer to the Borrower funds then on deposit  in  the
Deferred  Maintenance Account for the payment of costs and expenses paid or
incurred by  any  of  the Loan Parties and their respective Subsidiaries in
connection with the completion  of Deferred Maintenance; PROVIDED, HOWEVER,
that the aggregate amount of funds  applied towards Deferred Maintenance in
respect of any Pool A Property shall  not  exceed  the  aggregate amount of
funds deposited in the Deferred Maintenance Account in respect of such Pool
A  Property and (ii) the aggregate amount required to be reserved  pursuant
to clause  (iii) of the definition of Total Utilization shall be reduced by
an  amount  equal   to  the  remainder  of  (a)  the  aggregate  amount  of
expenditures  or  by  any   of   the  Loan  Parties  and  their  respective
Subsidiaries  in connection with the  completion  of  Deferred  Maintenance
MINUS (b) the sum  of  (1)  the  aggregate  amount of transfers pursuant to
clause (i) above PLUS (2) the aggregate amount of prior reductions pursuant
to  this  clause (ii); PROVIDED, HOWEVER that the  aggregate  reduction  in
reserves in  respect  of any Property shall not exceed the aggregate amount
reserved in respect of  such Property.  Together with each such request for
a transfer from the Deferred  Maintenance  Account  and  each delivery of a
Borrowing  Base Certificate pursuant to subsection 6.10(ii),  the  Borrower
shall deliver  to  the  Agent (1) an Officers' Certificate of the Borrower,
reasonably satisfactory to  the  Agent, certifying as to (x) the completion
of  the Deferred Maintenance described  therein,  (y) the  amount  budgeted
therefor  on SCHEDULE 6.16B annexed hereto and (z) the actual amount of the
costs and expenses  therefor incurred or paid by the Loan Parties and their
respective Subsidiaries, and (2) copies of bills and other documentation as
may be reasonably requested  by  the  Agent  to  establish that payments in
respect of the related Deferred Maintenance have been made or are then due,
as the case may be.

     C.   COMPLETION OF DEFERRED MAINTENANCE.  The  Borrower shall complete
the  Deferred Maintenance recommended therefor in the  Engineering  Reports
delivered  by  the Borrower pursuant to subsection 4.1T and with respect to
which amounts have  been allocated in the columns on SCHEDULE 6.16B annexed
hereto entitled ``Immediate  Repairs  of  Deferred  Items'' and ``Immediate
Repairs of ADA Items'', respectively, promptly after  the Closing Date (or,
with  respect  to  the MBL Properties, promptly after the  closing  of  the
acquisition thereof)  and  shall  complete  the  Deferred  Maintenance with
respect  to  which  amounts  have been allocated in the column on  SCHEDULE
6.16B entitled ``Additional Repairs  of  Deferred Items During First Year''
on or before the First Anniversary.

6.17 O&M REQUIREMENTS; CERTAIN POST-CLOSING ENVIRONMENTAL COVENANTS.

     A.   Within 90 days after the Closing  Date, the Borrower shall design
an operations and maintenance plan (``O&M PLAN'') which shall be reasonably
satisfactory to the Agent, for asbestos-bearing materials (``ABM'') that is
consistent  with  the  recommendations  in  the  Environmental   Protection
Agency's  ``Managing  Asbestos  in  Place,  A  Building  Owner's  Guide  to
Operations and Maintenance Programs for Asbestos-Containing Materials'' and
which  shall  include,  without limitation, the following program elements:
(i) notification (a program to tell workers, tenants and building occupants
where ABM is located, and  how  and why to avoid disturbing the ABMs); (ii)
surveillance  (regular  ABM surveillance  to  note,  assess,  and  document
changes in the ABM's condition); (iii) controls (work control/permit system
to control activities which  might  disturb ABMs); (iv) work practices (O&M
work  practices  to  avoid  or  minimize fiber  release  during  activities
affecting ABM); (v) recordkeeping (to document O&M activities); (vi) worker
protection (medical and respiratory  protection  programs,  as applicable);
(vii) training  (asbestos  program  manager  and  custodial and maintenance
staff training); and (viii) a plan for complying with  all  Applicable Laws
with  respect  to  ABM.   Each  of  the  Loan  Parties and their respective
Subsidiaries owning or leasing Properties that at  any  time  are  known to
contain,  or  for  which  there  is a reasonable basis to believe that such
Properties may contain, ABM shall promptly implement such O&M Plan.

     B.   ASBESTOS ABATEMENT.  CapStar  and  the  Borrower  hereby agree to
remove  or  otherwise  abate,  or cause to be removed or otherwise  abated,
within  90 days after the closing  date  of  the  acquisition  of  the  MBL
Properties,  all ABM from the MBL Properties located on the Closing Date in
Colorado Springs,  Colorado  (the  Holiday  Inn  Garden  of  the  Gods) and
Lafayette, Louisiana, respectively.

     C.   UNDERGROUND STORAGE TANK.  CapStar and the Borrower hereby  agree
to  cause,  within 90 days after the closing date of the acquisition of the
MBL Properties, the underground storage tank located on the Closing Date on
the MBL Property  in  Lafayette,  Louisiana, to be properly registered with
all applicable Governmental Authorities.

6.18 MANAGEMENT OF PROPERTIES.

     The Borrower shall, or shall cause  any of its Subsidiaries to, manage
and  operate the Atlanta Property and the Pool  B  Properties  pursuant  to
Servicing  Agreements  in a commercially reasonable and prudent manner.  No
Person other than the Borrower  or  any  Wholly Owned Subsidiary shall have
substantial authority over the management and operation of any Property.

6.19 INTELLECTUAL PROPERTY.

     CapStar  and  the  Borrower  shall  cause  each  of  their  respective
Subsidiaries owning, licensed to use or otherwise  having  the lawful right
to  use  any  Intellectual  Property  to execute and deliver the  Trademark
Agreement for the purposes of becoming  bound  thereby,  and  the  Borrower
shall  deliver supplements to the Schedules to this Agreement, the Security
Agreement  and the Trademark Agreement, which Schedules shall be reasonably
acceptable to the Agent.

6.20 FURTHER ASSURANCES.

     A.   ASSURANCES.  Without expense or cost to the Agent or the Lenders,
each Loan Party  shall,  and  shall cause each of its Subsidiaries to, from
time to time hereafter execute,  acknowledge,  file, record, do and deliver
all and any further acts, deeds, conveyances, mortgages,  deeds  of  trust,
deeds   to  secure  debt,  security  agreements,  hypothecations,  pledges,
charges,  assignments,  financing  statements  and  continuations  thereof,
notices  of  assignment,  transfers,  certificates,  assurances  and  other
instruments  as the Agent may from time to time reasonably require in order
to carry out more  effectively  the purposes of this Agreement or the other
Loan Documents, including to subject  any Pool A Property or other items of
Collateral, intended to now or hereafter  be  covered, to the Liens created
by  the  Security Documents, to perfect and maintain  such  Liens,  and  to
assure, convey,  assign,  transfer  and confirm unto the Agent the property
and rights hereby conveyed and assigned  or intended to now or hereafter be
conveyed or assigned or which any Loan Party  or any such Subsidiary may be
or may hereafter become bound to convey or to assign  to  the  Agent or for
carrying out the intention of or facilitating the performance of  the terms
of  this  Agreement, or any other Loan Documents or for filing, registering
or recording  this Agreement or any other Loan Documents.  Without limiting
the foregoing, each of CapStar and the Borrower shall, and shall cause each
other Loan Party  to,  deliver to Agent, promptly upon receipt thereof, all
instruments received by CapStar, the Borrower or any other Loan Party after
the Closing Date and take  all  actions and execute all documents necessary
or  reasonably  requested by the Agent  to  perfect  the  Agent's  security
interest  in any such  instrument  or  any  other  Investment  acquired  by
CapStar, the  Borrower  or any other Loan Party.  Promptly upon request or,
in an emergency, upon demand,  each  Loan  Party shall execute and deliver,
and hereby authorizes the Agent to execute and  file  in  the  name of such
Loan  Party,  to  the  extent  the  Agent  may  lawfully do so, one or more
financing statements, chattel mortgages or comparable  security instruments
to evidence more effectively the Lien hereof upon the Collateral.

     B.   FILING AND RECORDING OBLIGATIONS.  Each Loan Party  shall pay all
filing,  registration and recording fees and all expenses incident  to  the
execution  and  acknowledgement  of  any  Mortgage  or other Loan Document,
including  any  instrument  of  further assurance described  in  subsection
6.21A, and shall pay all mortgage  recording taxes, transfer taxes, general
intangibles taxes and governmental stamp  and other taxes, duties, imposts,
assessments and charges arising out of or in connection with the execution,
delivery, filing, recording or registration  of  any Mortgage or other Loan
Document,  including  any  instrument  of  further assurance  described  in
subsection 6.21A, or by reason of its interest  in,  or measured by amounts
payable  under,  the  Notes,  the  Mortgages  or  any other Loan  Document,
including  any  instrument  of  further assurance described  in  subsection
6.21A, and shall pay all stamp taxes and other taxes required to be paid on
the Notes or any other Loan Document,  but  excluding  in  the case of each
Lender  and the Agent, Taxes imposed on its income by a jurisdiction  under
the laws  of  which  it  is  organized  or in which its principal executive
office is located or in which its applicable  lender  office for funding or
booking its Loans hereunder is located.  If any Loan Party  fails  to  make
any  of  the  payments  described  in the preceding sentence within 10 days
after notice thereof from the Agent (or such shorter period as is necessary
to protect the loss of or diminution  in  value of any Collateral by reason
of tax foreclosure or otherwise, as determined  by  the  Agent, in its sole
discretion) accompanied by documentation verifying the nature and amount of
such payments, the Agent may (but shall not be obligated to) pay the amount
due and such Loan Party shall reimburse all amounts in accordance  with the
terms hereof.  If Applicable Law prohibits any Loan Party from paying  such
taxes,  charges,  filing, registration and recording fees, excises, levies,
stamp  taxes  or  other  taxes,  then  the  Agent  may  declare  the  Loans
immediately due and payable in accordance with the terms of this Agreement,
without premium or  penalty not less than 30 days after such declaration in
a principal amount equal  to  the  Property  Amount  with  respect  to  the
applicable  Property, and such Property Amount shall thereafter be excluded
from the calculation  of  Borrowing  Base until all such payments have been
made.  Subject to the foregoing, and at  its expense, the Borrower shall be
entitled  to  cause  any Mortgage to be amended  to  increase  the  maximum
aggregate principal amount secured by such Mortgage.  SCHEDULE 1.1B annexed
hereto shall be supplemented  to reflect each such increase with respect to
which the Borrower shall have paid  all  applicable  mortgage and recording
taxes.

     C.   COSTS OF DEFENDING AND UPHOLDING THE LIEN.   The  Agent may, upon
at least five days' prior notice to the Borrower, (i) appear  in and defend
any  action  or  proceeding,  in  the name and on behalf of the Agent,  the
Lenders, any Loan Party or any of its  Subsidiaries,  in which the Agent or
any Lender is named or which the Agent in its sole discretion determines is
reasonably likely to materially adversely affect any Pool A  Property,  any
Management Agreement or other Collateral, any Mortgage, the Lien thereof or
any  other  Loan Document and (ii) institute any action or proceeding which
the  Agent reasonably  determines  should  be  instituted  to  protect  the
interest  or  rights  of the Agent and the Lenders in any Property or other
Collateral  or under this  Agreement  or  any  other  Loan  Document.   The
Borrower  agrees  that  all  reasonable  costs  and  expenses  expended  or
otherwise  incurred   pursuant  to  this  subsection (including  reasonable
attorneys' fees and disbursements)  by  the  Agent  shall  be  paid  by the
Borrower  or  reimbursed  to  the Agent, as the case may be, promptly after
demand.

     D.   COSTS OF ENFORCEMENT.   The Borrower agrees to bear and shall pay
or reimburse the Agent and the Lenders  in  accordance  with  the  terms of
subsection 8.2 for all reasonable sums, costs and expenses incurred  by the
Agent  and  the  Lenders  (including  reasonable  attorneys'  fees  and the
expenses and fees of any receiver or similar official) of or incidental  to
the  collection  of any of the Obligations, any foreclosure (or Transfer in
lieu of foreclosure)  of  this  Agreement,  any  Mortgage or any other Loan
Document or any sale of all or any portion of any  Property  or  all or any
portion of the other Collateral.


                             SECTION 7
                        NEGATIVE COVENANTS

     Each of CapStar and the Borrower covenants and agrees that, so long as
the Commitments hereunder shall remain in effect and until payment  in full
of  the  Loans  and  the  other  Obligations   (other  than indemnification
obligations with respect to claims that have not been asserted  at the time
that  the Loans and all other Obligations have been paid in full)  and  the
cancellation  or  expiration  of  all  Letters  of  Credit, CapStar and the
Borrower   shall   perform  and  shall  cause  each  of  their   respective
Subsidiaries to perform all covenants in this Section 7.

7.1  INDEBTEDNESS.

     The Loan Parties  shall  not,  and  shall  not  permit  any  of  their
respective  Subsidiaries to, directly or indirectly, create, incur, assume,
Guarantee, refinance,  exchange,  refund  or  otherwise  become  or  remain
directly or indirectly liable with respect to, any Indebtedness, except:

          (i)  the  Loan  Parties  and  their  respective  Subsidiaries may
     become and remain liable with respect to the Obligations;

         (ii)  the  Loan  Parties  and  their  respective Subsidiaries  may
     become  and  remain  liable with respect to Interest  Rate  Agreements
     required pursuant to subsection  6.14  or  otherwise  approved  by the
     Agent;

        (iii)  the  Loan  Parties  and  their  respective  Subsidiaries may
     become  and  remain  liable  with respect to intercompany Indebtedness
     owed to the Borrower or any of  its Wholly Owned Subsidiaries that are
     Loan Parties; PROVIDED that all such  Indebtedness  shall be evidenced
     by  one  or  more  promissory notes that are pledged pursuant  to  the
     Security Documents to secure the Obligations;

         (iv)  so long as at the time of incurrence, refinancing, exchange,
     amendment or refunding  thereof  (a)  no Event of Default or Potential
     Event of Default has occurred and is continuing  or  would  be  caused
     thereby  and (b) such incurrence, refinancing, exchange, amendment  or
     refunding  is  permitted  under  the terms and provisions of all other
     Indebtedness  and  each  agreement  pursuant   to   which  such  other
     Indebtedness  was  incurred,  the  Borrower  and its Subsidiaries  may
     incur,  refinance,  exchange, amend or refund Indebtedness  or  become
     liable with respect to Guaranties in an aggregate principal amount not
     to  exceed  $10,000,000  at  any  time;  PROVIDED  that  (x)  no  such
     Indebtedness  (and,  if  applicable,  any  security  into  which  such
     Indebtedness  is convertible or for which it is exchangeable), whether
     upon the happening  of any event (excluding the occurrence of an event
     of  default,  if such event  of  default  has not  then  occurred)  or
     otherwise, shall  mature, become payable or require the payment of any
     principal amount thereof  (or  any other amount in lieu thereof) or be
     mandatorily redeemable, pursuant  to  a  sinking  fund or otherwise or
     redeemable  at  the  option  of  the holder thereof, or  be  redeemed,
     purchased,  retired  or  defeased (including  in  substance  or  legal
     defeasance)  or paid voluntarily  by  or  on  behalf  of  any  obligor
     thereunder, in  any  case in whole or in part, before the date that is
     91  days  after the Maturity  Date  and  (y)  no  obligation  that  is
     guaranteed  by  any  such  Guaranty, whether upon the happening of any
     event (excluding the occurrence  of an event of default, if such event
     of default has not then occurred)  or  otherwise, shall mature, become
     payable or require the payment of any amount  thereof  (or  any  other
     amount  in  lieu thereof) or be mandatorily redeemable, pursuant to  a
     sinking fund  or  otherwise  or redeemable at the option of the holder
     thereof, in any case in whole  or  in part, before the date that is 91
     days after the Maturity Date; PROVIDED,  HOWEVER,  that  the preceding
     proviso shall not be given effect with respect to any equipment  lease
     (or  series  of related equipment leases) covering equipment having  a
     value of less  than  $500,000  in the aggregate at the commencement of
     such lease (or series of leases);

          (v)  so long as at the time  of incurrence, refinancing, exchange
     or refunding  thereof (a) no Event  of  Default  or Potential Event of
     Default has occurred and is continuing or would be  caused thereby and
     (b) such incurrence, refinancing, exchange, amendment  or refunding is
     permitted under the terms and provisions of all other Indebtedness and
     each agreement pursuant to which such other Indebtedness was incurred,
     the  Pool B  Subsidiaries  (other  than a Pool B Subsidiary  that  has
     acquired or shall acquire any leasehold interests in Pool B Properties
     pursuant  to  the  sale  and  leaseback  transactions   permitted   by
     subsection  7.11),  may  incur,  refinance,  exchange, amend or refund
     Indebtedness in connection with the Acquisition or ownership of one or
     more Pool B Properties acquired in a single transaction  or  series of
     related  transactions  (as so incurred, refinanced, exchanged, amended
     or  refunded,  ``POOL B INDEBTEDNESS''),  in  an  aggregate  principal
     amount not to exceed  $25,000,000  for  all Pool B Subsidiaries at any
     time; PROVIDED, HOWEVER, that (s) the aggregate  outstanding principal
     amount of any such Pool B Indebtedness shall not at  any  time  exceed
     55%  of  the  sum  of the aggregate cash purchase price of such Pool B
     Properties PLUS the  aggregate amount of expenditures actually made by
     such Pool B Subsidiary  in  connection  with  the  Renovation  of such
     Pool B  Properties,  (t)  the ratio of Cash Available for Debt Service
     (determined with reference  to the 12 most recently completed calendar
     months  ending  not  less  than  30  days  before  the  date  of  such
     incurrence,  refinancing,  exchange,   amendment   or   refunding)  to
     Projected  Interest  Expense  (determined  with  reference to  the  12
     complete  calendar  months commencing on the first day  of  the  month
     following  the  date of  such  incurrence,  refinancing,  exchange  or
     refunding) shall  not  be  less  than  1.60  to  1.00, (u) such Pool B
     Indebtedness  of  any  Pool B  Subsidiary  (and,  if  applicable,  any
     security into which such Indebtedness is convertible or  for  which it
     is exchangeable) shall not mature or require the scheduled payment  of
     principal  (or  any  other  amount  in lieu thereof) or be mandatorily
     redeemable, pursuant to a sinking fund  or otherwise, or redeemable at
     the option of the holder thereof, or be redeemed,  purchased,  retired
     or  defeased  (including  in  substance  or  legal defeasance) or paid
     voluntarily by or on behalf of any obligor thereunder,  in any case in
     whole  or in part, before the date that is 91 days after the  Maturity
     Date, except that such Indebtedness may require principal amortization
     calculated on a level pay basis over a term of not less than 15 years,
     (v) such  Pool B Indebtedness shall be non-recourse to any Loan Party,
     any of its  Subsidiaries  and  any  Joint  Venture  in which it has an
     Investment  (other  than for any Guaranties provided with  respect  to
     customary carve-outs  for environmental and ``bad deed'' indemnities),
     (w) such Pool B Indebtedness shall not be secured by (1) the assets of
     any Loan Party or any of  its  Subsidiaries (other than the Properties
     owned by such Pool B Subsidiary) or (2) the Transfer of or Lien on any
     Intellectual Property, (x) so long as (1) such Pool B Indebtedness has
     not  been accelerated, (2) a receiver  has  not  been  appointed  with
     respect  to  a related Pool B Property or (3) no other remedy is being
     exercised with  respect  to any collateral securing, or other property
     subject to, such Pool B Indebtedness, such financing does not preclude
     or limit the distribution  of  cash  flow  (after reserves for Capital
     Items, Taxes, insurance and other customary  reserves) to the Borrower
     and  its  other  Subsidiaries  for  the  purposes  set  forth  herein,
     (y) after  giving  affect  to  such  transaction, the Borrower  is  in
     compliance with all of the provisions  set  forth herein and the other
     Loan Documents and (z) the Borrower shall have  delivered to the Agent
     any Officers' Certificate demonstrating compliance with the provisions
     of  this  subsection  7.1(v)  by the applicable Pool B  Subsidiary  in
     connection with such transaction; and

         (vi)  so long as at the time  of incurrence, refinancing, exchange
     or refunding thereof (a) no Event of  Default  or  Potential  Event of
     Default has occurred and is continuing or would be caused thereby  and
     (b) such  incurrence, refinancing, exchange, amendment or refunding is
     permitted under the terms and provisions of all other Indebtedness and
     each agreement pursuant to which such other Indebtedness was incurred,
     the Borrower  and  its  Subsidiaries  may  incur, refinance, exchange,
     amend or refund Indebtedness in an aggregate  principal  amount not to
     exceed $25,000,000 at any time (as so incurred, refinanced, exchanged,
     amended or refunded, the ``SUBORDINATED INDEBTEDNESS''); PROVIDED that
     (a)  no  such  Subordinated  Indebtedness  (and,  if  applicable,  any
     security into which such Indebtedness is convertible or  for  which it
     is  exchangeable),  whether upon the happening of any event (excluding
     the occurrence of an  event  of  default,  PROVIDED that such event of
     default has not occurred) or otherwise, shall  mature,  become payable
     or require the payment of any principal amount thereof (or  any  other
     amount  in  lieu thereof) or be mandatorily redeemable, pursuant to  a
     sinking fund  or  otherwise  or redeemable at the option of the holder
     thereof, or be redeemed, purchased,  retired or defeased (including in
     substance or legal defeasance) or paid  voluntarily by or on behalf of
     any obligor thereunder, in any case in whole  or  in  part, before the
     date that is 91 days after the Maturity Date and (b) such Subordinated
     Indebtedness  (and,  if  applicable,  any  security  into  which  such
     Indebtedness is convertible or for which it is exchangeable)  shall be
     junior   and   subordinate  to  the  Obligations  and  subject  to  an
     intercreditor agreement  with  terms and provisions in accordance with
     the then prevailing customary market terms and conditions;

PROVIDED that the prohibition in clauses  (iv),  (v) and (vi) above against
actually defeasing or voluntarily prepaying Indebtedness,  in  whole  or in
part, is not intended to prohibit, and shall not prohibit, the Borrower  or
any  of  its Subsidiaries from incurring, refinancing, exchanging, amending
or refunding  Indebtedness that by its terms entitles any Person to defease
or voluntarily prepay such Indebtedness, in whole or in part.

     7.2  LIENS AND RELATED MATTERS.

     A.   PROHIBITION  ON LIENS.  The Loan Parties shall not, and shall not
permit any of their respective  Subsidiaries  to,  directly  or indirectly,
create, incur, assume or, except as permitted by subsection 6.9,  permit to
exist  any  Lien  on  or  with respect to any property or asset of any kind
(including any document or  instrument  in  respect  of  goods,  furniture,
fixtures,  equipment  or  accounts  receivable)  of  CapStar  or any of its
Subsidiaries,  whether  now  owned or hereafter acquired, or any income  or
profits therefrom, or file or  permit the filing of, or permit to remain in
effect, any financing statement  or  other  similar notice of any Lien with
respect to any such property, asset, income or  profits  under  the Uniform
Commercial  Code  of  any  State  or  under any similar recording or notice
statute, except:

          (i)  Permitted Encumbrances;

         (ii)  the Atlanta Mortgage;

        (iii)  Liens on a Pool B Property  and  related  assets  granted or
     assumed  by a Pool B Subsidiary to secure the Pool B Obligations  owed
     by the Pool B  Subsidiary; PROVIDED, that such Liens encumber only the
     assets purchased,  financed or refinanced with, or leased or otherwise
     used pursuant to the terms of, such Pool B Obligations; and

         (iv)  Liens  on  FF&E  granted  to  secure  Indebtedness  incurred
     pursuant to subsection 7.1(iv); PROVIDED that such Liens encumber only
     FF&E purchased, financed or refinanced with such Indebtedness.

     B.   EQUITABLE LIEN IN  FAVOR OF LENDERS.  If any Loan Party or any of
its Subsidiaries shall create or assume any Lien upon any of its properties
or  assets,  whether now owned or  hereafter  acquired,  other  than  Liens
excepted by the  provisions  of subsection 7.2A, the Borrower shall make or
cause  to  be made effective provision  whereby  the  Obligations  will  be
secured  by  such   Lien  equally  and  ratably  with  any  and  all  other
Indebtedness secured  thereby  as long as any such Indebtedness shall be so
secured;  PROVIDED,  HOWEVER, that,  notwithstanding  the  foregoing,  this
covenant shall not be  construed as a consent by the Agent or any Lender to
the creation or assumption of any such Lien not permitted by the provisions
of subsection 7.2A.

     C.   NO FURTHER NEGATIVE PLEDGES.  Except with respect to (i) specific
property encumbered to secure  payment  of particular Indebtedness or to be
sold pursuant to an executed agreement with  respect  to  a  sale  or other
disposition  of  assets permitted hereunder, (ii) specific property subject
to a Ground Lease,  (iii)  Management  Agreements  (to  the extent that the
terms  thereof prohibit the assignment of rights thereunder,  but  not  any
other rights or interests and otherwise consistent with industry practices)
as security  for  the Obligations or otherwise and (iv) any other agreement
entered  into in the  ordinary  course  of  business  which  by  its  terms
restricts  the assignment of rights thereunder (but not any other rights or
interests and otherwise consistent with industry practices) as security for
the Obligations  or  otherwise,  the  Loan  Parties shall not and shall not
permit  any of their respective Subsidiaries to,  directly  or  indirectly,
enter into any agreement prohibiting the creation or assumption of any Lien
upon any  of  its  properties or assets (including, without limitation, any
interest in, or right  to  receive  payments  under,  any of the Management
Agreements), whether now owned or hereafter acquired except  to  the extent
that Liens to secure the Obligations are excluded therefrom.

     D.   NO  RESTRICTIONS  ON SUBSIDIARY DISTRIBUTIONS TO THE BORROWER  OR
OTHER SUBSIDIARIES.  Except as  provided  in  this Agreement and the Pool B
Documents  (with  respect  to the related Pool B Subsidiaries  and  Pool  B
Properties), the Loan Parties  shall not, and shall not permit any of their
respective Subsidiaries to, directly  or  indirectly,  create  or otherwise
cause or suffer to exist or become effective any consensual encumbrance  or
restriction  of  any  kind on the ability of any such Subsidiary to (i) pay
dividends or make any other  distributions  on  any  of  such  Subsidiary's
capital stock or other equity interest owned by the Borrower or  any  other
Subsidiary  of the Borrower, (ii) repay or prepay any Indebtedness owed  by
such Subsidiary  to  the  Borrower or any other Subsidiary of the Borrower,
(iii) make loans or advances to the Borrower or any other Subsidiary of the
Borrower, or (iv) transfer any of its property or assets to the Borrower or
any  other  Subsidiary  of  the  Borrower,  except  for  specific  property
encumbered  to  secure the payment  of  particular  Indebtedness  permitted
hereunder.

7.3  INVESTMENTS AND CERTAIN CAPITAL EXPENDITURES.

     The Loan Parties  shall  not,  and  shall  not  permit  any  of  their
respective Subsidiaries to, directly or indirectly, make any Investment  in
any  Person,  including  any Affiliate or Joint Venture, any expenditure to
acquire any hotel or other  real  property  or  any expenditure to acquire,
secure, extend, renew or modify any Management Agreement, except:

          (i)  CapStar and its Subsidiaries may make Investments in Cash or
     Cash Equivalents;

         (ii)  the Borrower, Atlanta GP and Atlanta  LP  may  (a) permit to
     exist  the  Investment  in  the  Atlanta  Airport Sub, (b) subject  to
     subsection 7.5, purchase outstanding limited  partner  interests  from
     other  limited  partners in the Atlanta Airport Sub and (c) subject to
     clause (viii) below,  purchase  outstanding  limited partner interests
     from other limited partners in the Atlanta Airport  Sub and make other
     Investments in the Atlanta Airport Sub;

        (iii)  the  Borrower, EAC and the Virginia Sub may  (a)  permit  to
     exist the Investment  in  the  Virginia  Parking  Sub,  (b) subject to
     subsection  7.5,  purchase outstanding general partner interests  from
     other limited partners  in the Virginia Parking Sub and (c) subject to
     clause (viii) below, purchase  outstanding  general  partner interests
     from other general partners in the Virginia Parking Sub and make other
     Investments in the Virginia Parking Sub;

         (iv)  CapStar may make equity Investments in the Borrower, and the
     Borrower  and its Wholly Owned Subsidiaries may make equity  and  debt
     Investments  in  their  respective  Wholly  Owned Subsidiaries for the
     acquisition, ownership, renovation, restoration, management, operation
     and disposition of Properties;

          (v)  the  Borrower  and  its Subsidiaries may  make  Acquisitions
     permitted pursuant to subsection 2.9;

         (vi)  so  long  as  no  Event  of  Default  has  occurred  and  is
     continuing and no Event of Default or Potential Event of Default would
     be caused thereby, the Borrower and  its Subsidiaries may acquire real
     property that is contiguous with any Property for use in the expansion
     of such Property, PROVIDED that the aggregate  purchase price for such
     real properties, measured on a cumulative basis from the Closing Date,
     shall not exceed $10,000,000;

        (vii)  so long as no Event of Default or Potential Event of Default
     has  occurred  and  is  continuing  or  would be caused  thereby,  the
     Borrower and its Subsidiaries may acquire  and  own  not more than two
     debt Securities (other than the Atlanta Note) at any time,  which debt
     Securities  shall  be  secured exclusively by first priority mortgages
     encumbering 100% of the  fee  interest  on  hotel properties; PROVIDED
     that the aggregate purchase price for such debt  Securities  shall not
     exceed $30,000,000; and

       (viii)  so long as no Event of Default or Potential Event of Default
     has  occurred  and  is  continuing  or  would  be  caused thereby, the
     Borrower and the Pool A Subsidiaries may make and own  equity  or debt
     Investments  in,  or  acquire and own equity or debt Securities issued
     by, the Atlanta Airport  Sub,  the  Virginia  Parking Sub and not more
     than ten other Joint Ventures or other Persons  (other  than  a Wholly
     Owned  Subsidiary  of  the Borrower); PROVIDED that (a) either (1) the
     sole purpose of such Joint  Venture  or  other  Person (other than the
     Virginia Parking Sub) is to acquire, own, Renovate,  restore,  manage,
     operate  and  dispose  of  upscale,  full-service hotels in the United
     States  of America and, to the extent permitted  by  subsection  7.14B
     hereof, Canada  or  (2) such  equity or debt Securities are registered
     under the Exchange Act; (b) the  aggregate  amount of such Investments
     in, or the aggregate purchase price of such Securities issued by, each
     such Joint Venture or other Person (other than the Atlanta Airport Sub
     and the Virginia Parking Sub) shall not exceed  $2,000,000 at any time
     and  the  aggregate amount of such Investments in,  or  the  aggregate
     purchase price  of  such Securities issued by, all such Joint Ventures
     or other Persons (other  than the Atlanta Airport Sub and the Virginia
     Parking Sub) shall not exceed  $20,000,000 at any time; (c) the sum of
     (1) the aggregate principal amount  of  the Indebtedness of such Joint
     Venture or other Person and, in either case,  the Subsidiaries thereof
     PLUS  (2)  the  purchase price of any equity Investment  made  in,  or
     Securities issued  by,  such Joint Venture or other Person (other than
     the aggregate amount of such  Investments,  or  the aggregate purchase
     price  of  such Securities issued by the Atlanta Airport  Sub  or  the
     Virginia Parking  Sub as of the date of this Agreement) and, in either
     case, its Subsidiaries  that  are  preferred  in  right or priority of
     payment  (including  any  mandatory  redemption or redemption  at  the
     option of the holder) to any such investment or Securities (other than
     a priority right to receive a return on  Investment  of  up to 25% per
     annum)  shall  at  no  time  exceed  60%  of  the  greater  of (x) the
     undepreciated  book  value  of all properties owned or leased by  such
     Joint Venture or other Person  and,  in  either case, the Subsidiaries
     thereof  and  (y)  the fair market value of all  such  properties  and
     asset, as reasonably  determined  by the Borrower as of the respective
     dates of acquisition thereof; (d) the Joint Venture or other Person in
     which such Investment is made or by  which  such Securities are issued
     shall not be an Affiliate of more than four other  Joint  Ventures  or
     other  Persons  in  which  Investments  are  made  or  owned  or whose
     Securities   are   acquired  or  owned  pursuant  to  this  subsection
     7.3(viii), and the Investment  made  in  or  Securities issued by each
     such Joint Venture or other Person shall neither  be  secured  by  the
     assets  of  more  than  four  other Joint Ventures or other Persons in
     which Investments are made or owned  or  whose Securities are acquired
     or owned pursuant to this subsection 7.3(viii)  nor cross-defaulted to
     Investments  in  or Securities issued by more than  four  other  Joint
     Ventures or other  Persons  in  which  Investments  are  made or whose
     Securities   are  acquired  pursuant  to  this  subsection  7.3(viii);
     PROVIDED, HOWEVER,  that  (I)  without  the approval of the Agent, but
     subject  to all the other limitations set  forth  in  this  subsection
     7.3(viii)  (other  than  the  requirement in clause (a) above that the
     hotels be upscale, full-service  hotels),  the Borrower and its Wholly
     Owned Subsidiaries (other than the Pool B Subsidiaries)  may  make and
     own  Investments  in,  or  acquire  and  own equity or debt Securities
     issued by, Joint Ventures and other Persons if the aggregate amount of
     such  Investments  in,  or  the  aggregate  purchase   price  of  such
     Securities  issued  by, each such Joint Venture or other Person  shall
     not at any time exceed  $500,000  and  the  aggregate  amount  of such
     Investments  in,  or  the  aggregate purchase price of such securities
     issued by, all such Joint Ventures  or  other Persons shall not at any
     time exceed $2,500,000, (II) without the  approval  of  the Agent, the
     Borrower  and  its  Wholly  Owned Subsidiaries (other than the  Pool B
     Subsidiaries) may make Investments  described  in  clause (iv)  of the
     definition  of  ``Investments''  and the provisions of clauses (a) and
     (c) above shall not be given effect  with respect to such Investments,
     PROVIDED that, with the approval of the Agent, in its sole discretion,
     the  Borrower  and its Wholly Owned Subsidiaries  (other  than  Pool B
     Subsidiaries) may  make such Investments and the provisions of clauses
     (a), (c) and (d) above  shall  not  be  given  effect,  and (III) with
     respect to Investments in, or the acquisition of Securities issued by,
     a Joint Venture or other Person that shall be identified in writing to
     and approved by the Lenders before the Closing Date, the provisions of
     clause  (b) above shall not be given effect and the percentage  amount
     in clause (c) above shall be increased from 60% to 75%;

PROVIDED that  (A) the aggregate amount of the consideration or Investment,
as the case may  be,  paid  by  the Borrower and the Pool A Subsidiaries to
acquire the real property, acquire  the Securities and make the Investments
and expenditures referred to in clauses (vi), (vii), and (viii) above shall
not exceed $60,000,000 at any time, (B)  except as provided to the contrary
in subclauses (I) and (II) to the proviso  to clause (vii) above, each such
expenditure  and acquisition or Investment referred  to  in  clauses  (vi),
(vii) and (viii)  above  shall  be  approved  by  the  Agent,  in  its sole
discretion; and (C) each such Acquisition referred to in clause (iii) above
from  a  person  that  is an Affiliate or 5% stockholder of any of the Loan
Parties (other than other  Loan Parties) or any entity in which such Person
has an equity or debt Investment  shall  be  approved  by a majority of the
independent  directors  of  the board of directors of CapStar  and  by  the
Agent, which approval shall not  be  unreasonably  withheld, conditioned or
delayed.

     For the purpose of this subsection 7.3 and without  limiting any other
method of making an Investment, the Borrower and its Subsidiaries  shall be
deemed  to  make an Investment in each Investment owned by a Person at  the
time such Person  becomes  a  Subsidiary  of  the  Borrower  or  any of its
Subsidiaries.

7.4  CONTINGENT OBLIGATIONS.

     The  Loan  Parties  shall  not  and  shall  not  permit  any  of their
respective Subsidiaries to, directly or indirectly, create or become liable
with respect to any Contingent Obligation, except that:

          (i)  the  Borrower  and  its  Subsidiaries may become liable with
     respect to Contingent Obligations in  respect  of  the Obligations and
     the Indebtedness, Investments and Contingent Obligations in respect of
     which  the  Borrower  and  the  Pool  A Subsidiaries are permitted  by
     subsections 7.1, 7.3 and 7.4 (other than  pursuant  to this clause (i)
     to become liable;

         (ii)  the  Borrower  and its Subsidiaries may become  liable  with
     respect to Contingent Obligations in respect of Letters of Credit;

        (iii)  the Borrower and  its  Subsidiaries  may  become liable with
     respect to indemnification agreements and Guaranties  (whether  now or
     existing  or  hereafter  entered  into)  with  respect to performance,
     surety and similar bonds or guaranties of completion  provided  in the
     ordinary  course of business consistent with past practices in respect
     of the Restoration  or  Renovation  of any Property, but excluding any
     such bonds with respect to any hotel  property  that  is  not  then  a
     Property,  in  an  aggregate  maximum amount not at any time exceeding
     $25,000,000 MINUS the sum, without  duplication,  of (1) the Letter of
     Credit  Usages that shall have been used, issued or  made  for  or  in
     connection with the Restoration of the Properties or the Renovation of
     Properties  subject  to  subsection 7.16, in each case that shall have
     been commenced but not completed,  PLUS  (2)  the  aggregate amount of
     expenditures  for the Restoration of Properties or the  Renovation  of
     Properties subject  to  subsection  7.16, in each case that shall have
     been commenced but not completed;

         (iv)  the Borrower and the Pool A  Subsidiaries  may become liable
     to make Investments permitted by, and in accordance with the terms of,
     subsection 7.3;

          (v)  such of the Borrower and its Subsidiaries as  are  specified
     on SCHEDULE 5.3B annexed hereto may be liable (a) with respect  to the
     Contingent Obligations set forth on such Schedule, in each case in the
     aggregate  amount  not  greater  than  the  maximum  estimated  amount
     specified  thereon  with  respect to such Continent Obligation and (b)
     with respect to modifications to any such Contingent Obligation either
     (1) that do not increase either  the  maximum  possible amount, or the
     maximum estimated amount thereof, or both, in each  case  as specified
     on  each  list,  add  any  obligors  with respect thereto or increase,
     decrease or otherwise vary the liabilities  of  the  existing obligors
     with respect thereto or (2) that increase either the maximum  possible
     amount or the maximum estimated amount thereof, or both, in each  case
     as  specified  on  such list, add any obligors with respect thereto or
     increaser, decrease  or otherwise vary the liabilities of the existing
     obligors; and

         (vi)  the Borrower  and  its  Subsidiaries  may become liable with
     respect  to other Contingent Obligations in an aggregate  amount  (not
     less than  zero)  at  any  time  not  greater than the amount by which
     $10,000,000 is greater than the amount  referred  to  in the preceding
     clause (iii) at such time.

7.5  RESTRICTED JUNIOR PAYMENTS.

     The  Loan  Parties  shall  not,  and  shall  not  permit any of  their
respective  Subsidiaries to, directly or indirectly, declare,  order,  pay,
make, give or  publish  notice or fix a date in respect of or set apart any
sum for any Restricted Junior  Payment, enter into an agreement or make any
commitment to effect any of the  foregoing or take any other similar action
in furtherance of or otherwise in  connection with the foregoing; PROVIDED,
HOWEVER, that, so long as no Event of Default or Potential Event of Default
has  occurred  or is continuing, the Loan  Parties  may  make  any  of  the
following payments:

          (i)  commencing  on  January  1,  2000, the Loan Parties may make
     Restricted Junior Payments in respect of  equity Securities, including
     payments in respect of limited partner interests  in the Borrower that
     shall not be beneficially owned by CapStar or CapStar  Sub);  PROVIDED
     that  (a)  the aggregate amount of Restricted Junior Payments pursuant
     to this clause (i) during any calendar year shall not exceed an amount
     equal to 25%  of Consolidated Net Income for the immediately preceding
     calendar year and  (b)  no  payments  of principal, or any redemption,
     purchase  or  defeasance,  of  any Indebtedness  of  CapStar  and  its
     Subsidiaries shall be permitted pursuant to this clause (i);

         (ii)  the  Atlanta  Airport Sub  may  make  distributions  to  its
     partners  in  accordance  with   the  Atlanta  Partnership  Agreement;
     PROVIDED that such distributions are made (x) pursuant to Section 5.1,
     5.2 or 13.2 of the Atlanta Partnership  Agreement  in  accordance with
     the provisions thereof in effect on the date of this Agreement and (y)
     with  respect  to  Cash Flow from Operations and Capital Proceeds  (in
     each case as defined  in the Atlanta Partnership Agreement on the date
     of this Agreement); and

        (iii)  the Loan Parties  may  make Restricted Junior Payments in an
     aggregate  amount (measured on a cumulative  basis  from  the  Closing
     Date) not to  exceed  $25,000,000 pursuant to the conversion, exercise
     or redemption of the Preferred Limited Partner Interests.

7.6  FINANCIAL COVENANTS.

     A.   MINIMUM NET WORTH.  The Borrower shall not permit at any time the
Net  Worth  of  CapStar and its  Subsidiaries  to  be  less  than  Adjusted
Stockholders' Equity.

     B.   MAXIMUM   CONSOLIDATED   TOTAL  INDEBTEDNESS.   CapStar  and  the
Borrower shall not permit at any time  Consolidated  Total  Indebtedness to
exceed  the  lesser  of  (i) 55%  of  the  sum  of  (a) Consolidated  Total
Indebtedness  PLUS  (b) the  Market  Equity  Capitalization  of CapStar and
(ii) 60% of the sum of (y) Consolidated Total Indebtedness PLUS (z) the Net
Worth of CapStar and its Subsidiaries.

     C.   MINIMUM  INTEREST  COVERAGE.  As of the last day of any  calendar
quarter ending during any of the  periods  set forth below, CapStar and the
Borrower shall not permit the ratio of Consolidated  EBITDA to Consolidated
Interest Expense to be less than the correlative ratio  indicated  for  the
periods  set  forth  below (such amounts to be determined with reference to
the preceding 12-month period ending on such last day and to be adjusted to
the extent required by  the  respective  provisos  to  the  definitions  of
Property EBITDA):

<TABLE>
<CAPTION>
                                          MINIMUM
                                         INTEREST
        PERIOD                        COVERAGE RATIO
<S>                                <C>
Closing Date to but excluding           2.25 to 1.00
first Anniversary
first Anniversary to but excluding      2.50 to 1.00
second Anniversary
second Anniversary to but               2.75 to 1.00
excluding third Anniversary
if applicable, third Anniversary        3.00 to 1.00
to but excluding fourth
Anniversary
if applicable, fourth Anniversary       3.25 to 1.00
to but excluding fifth Anniversary
</TABLE>

     D.   MINIMUM INTEREST COVERAGE RATIO (EXCLUDING CAPITAL EXPENDITURES).
As of the last day of the calendar quarter ending during any of the periods
set  forth  below,  CapStar  and the Borrower shall not permit the ratio of
Consolidated EBITDA-Cap Ex to Consolidated Interest Expense to be less than
the correlative ratio indicated  for  the  periods  set  forth  below (such
amounts  to  be determined with reference to the preceding 12-month  period
ending on such last day):

<TABLE>
<CAPTION>
                                          MINIMUM
                                         INTEREST
        PERIOD                        COVERAGE RATIO
<S>                                <C>
Closing Date to but excluding           2.00 to 1.00
first Anniversary
first Anniversary to but excluding      2.25 to 1.00
second Anniversary
second Anniversary to but               2.50 to 1.00
excluding third Anniversary
if applicable, third Anniversary        2.75 to 1.00
to but excluding fourth
Anniversary
if applicable, fourth Anniversary       3.00 to 1.00
to but excluding fifth Anniversary
</TABLE>

     E.   MAXIMUM  TOTAL  DEBT  LEVERAGE  RATIO.  As of the last day of the
calendar quarter ending during any of the periods  set forth below, CapStar
and  the  Borrower  shall  not  permit  the  ratio  of  Consolidated  Total
Indebtedness  to  Consolidated  EBITDA  to  exceed  the  correlative  ratio
indicated for the periods set forth below (Consolidated Total  Indebtedness
to be determined as of such last day, Consolidated EBITDA to be  determined
with reference to the preceding 12-month period ending on such day):

<TABLE>
<CAPTION>
                                          MAXIMUM
                                         LEVERAGE
        PERIOD                             RATIO
<S>                                <C>
Closing Date to but excluding           4.75 to 1.00
first Anniversary
first Anniversary to but excluding      4.50 to 1.00
second Anniversary
second Anniversary to but               4.25 to 1.00
excluding third Anniversary
if applicable, third Anniversary        4.00 to 1.00
to but excluding fourth
Anniversary
if applicable, fourth Anniversary       3.75 to 1.00
to but excluding fifth Anniversary
</TABLE>

     F.   MAXIMUM    TOTAL   DEBT   LEVERAGE   RATIO   (EXCLUDING   CAPITAL
EXPENDITURES).  As of  the  last  day  of  the  calendar quarter (or, as so
provided in subsection 7.6D, on the last day of the  calendar month) ending
during any of the periods set forth below, CapStar and  the  Borrower shall
not  permit  the  ratio  of Consolidated Total Indebtedness to Consolidated
EBITDA-Cap Ex to exceed the correlative ratio indicated for the periods set
forth below (Consolidated  Total  Indebtedness  to be determined as of such
last day, Consolidated EBITDA-Cap Ex to be determined with reference to the
preceding 12-month period ending on such day):

<TABLE>
<CAPTION>
                                          MAXIMUM
                                         LEVERAGE
        PERIOD                             RATIO
<S>                                <C>
Closing Date to but excluding           5.25 to 1.00
first Anniversary
first Anniversary to but excluding      5.00 to 1.00
second Anniversary
second Anniversary to but               4.50 to 1.00
excluding third Anniversary
if applicable, third Anniversary        4.25 to 1.00
to but excluding fourth
Anniversary
if applicable, fourth Anniversary       4.00 to 1.00
to but excluding fifth Anniversary
</TABLE>

7.7  FUNDAMENTAL CHANGES.

     Without the prior written approval of the Agent, which approval may be
granted, withheld, conditioned or delayed in its  sole discretion, the Loan
Parties   shall  not,  and  shall  not  permit  any  of  their   respective
Subsidiaries  to, alter the legal structure of any Loan Party or any of its
Subsidiaries, to  incorporate  or  otherwise  organize any Subsidiaries, or
enter into any transaction of merger or consolidation,  or liquidate, wind-
up or dissolve itself (or suffer any liquidation or dissolution),  or  make
or  permit  any  Transfer  or acquire by purchase or otherwise, directly or
indirectly, all or substantially all the business, property or fixed assets
of, or stock or other evidence of beneficial ownership of, any Person, make
any  Acquisition, acquire or  enter  into  any  management  agreement  with
respect  to  any hotel property or Transfer any Property, except that, from
time to time after the Closing Date:

          (i)  the  Loan  Parties and their Subsidiaries may lease space in
     Improvements and in accordance with subsection 6.5(vi) remove, sell or
     otherwise dispose of items of Collateral and other property;

         (ii)  the Borrower  and  any Wholly Owned Subsidiary (other than a
     Pool A Subsidiary or a Pool B Subsidiary) may incorporate or otherwise
     organize  one  or more Subsidiaries;  PROVIDED  that  (a)  before  the
     Subsidiary shall  conduct  any  business  or  acquire  any  asset, the
     Borrower  shall  deliver to the Agent (1) supplements to the Schedules
     to  this  Agreement  and  the  other  Loan  Documents  reflecting  the
     incorporation   or   other  organization  of  such  Subsidiary,  which
     supplements shall be reasonably  satisfactory  to  the  Agent, and (2)
     originally executed counterparts to the Affiliate Guaranty  (except as
     may  be  provided  to  the  contrary  in  subsection  2.9B) and to the
     Environmental Indemnity, respectively, and, unless such  Subsidiary is
     a  Pool  B  Subsidiary, the Security Agreement (b) the legal  and  tax
     structure of  each  such  Subsidiary  shall  be approved by the Agent,
     which  approval  shall  not be unreasonably withheld,  conditioned  or
     delayed; PROVIDED FURTHER  that,  with  respect to the restrictions on
     the tax and legal structure of a Pool B Subsidiary, such structure may
     include  features  intended  by  the  Borrower  to  make  such  Pool B
     Subsidiary ``bankruptcy-remote'' and (c) no Pool B Subsidiary shall at
     any  time  (1)  incur,  assume  or otherwise  become  liable  for  any
     Indebtedness  or  Contingent  Obligation   except   as   permitted  by
     subsections  7.1  and  7.4,  or (2) incur, assume or otherwise  become
     liable for any other liability  or indebtedness except in the ordinary
     course of business (PROVIDED that,  in  any event, each such liability
     or  obligation  shall  be  non-recourse  to  each   Loan   Party,  its
     Subsidiaries and the Joint Ventures in which it has an Investment,  in
     each  case  other  than  such Pool B Subsidiary) or as shall have been
     approved by the Agent in its sole discretion;

        (iii)  the Loan Parties  and their respective Subsidiaries may make
     Acquisitions  to the extent permitted  by,  and  in  accordance  with,
     subsections 2.9A and 2.9B;

         (iv)  the Loan  Parties  and  their  respective  Subsidiaries  may
     Transfer  Properties  to  the  extent  permitted by, and in accordance
     with, subsection 7.15B;

          (v)  the  Loan  Parties  and  their respective  Subsidiaries  may
     acquire or enter into Management Agreements  and  Servicing Agreements
     with respect to hotel properties to the extent permitted  by,  and  in
     accordance with, subsection 6.17 or 7.17;

         (vi)  the  Loan  Parties  may make Investments and acquisitions of
     real property to the extent permitted  by,  and  in  accordance  with,
     subsection 7.3;

        (vii)  the  Loan  Parties  and  their  respective  Subsidiaries may
     dissolve  one  or  more  Inactive  Subsidiaries and one or more  other
     Subsidiaries  upon  the Transfer of all  or  substantially  all  their
     respective assets in  a  single  transaction or series of transactions
     not prohibited by subsection 7.15B.

7.8  ZONING AND CONTRACT CHANGES AND COMPLIANCE.

     Without the prior written approval  of the Agent, which approval shall
not be unreasonably withheld, conditioned  or  delayed,  the  Loan  Parties
shall  not  and  shall  not  permit any of their respective Subsidiaries to
initiate or consent to any zoning  reclassification of any property or seek
any material variance under any existing  zoning ordinance or use or permit
the  use  of  any Property in any manner that  could  result  in  such  use
becoming a non-conforming  use (other than a non-conforming use permissible
under automatic grandfathering  provisions)  under  any zoning ordinance or
any other applicable land use law, rule or regulation.   The  Loan  Parties
shall  not  and  shall  not  permit any of their respective Subsidiaries to
initiate or consent to any change in any laws, requirements of Governmental
Authorities or obligations created by private contracts and Material Leases
which  now  or  hereafter could reasonably  be  likely  to  materially  and
adversely affect the ownership, occupancy, use or operation of any Property
without the prior written consent of the Agent.

7.9  NO JOINT ASSESSMENT; SEPARATE LOTS.

     Without the prior written approval of the Agent, which approval may be
granted, withheld,  conditioned or delayed in its sole discretion, the Loan
Parties shall not suffer,  permit  or initiate, and shall not permit any of
their respective Subsidiaries to suffer,  permit  or  initiate,  the  joint
assessment of any Property (i) with any other real property constituting  a
separate tax lot (other than another Property) and (ii) with any portion of
any  Property  which  may be deemed to constitute personal property, or any
other procedure whereby  the  lien of any Taxes which may be levied against
any such personal property shall  be  assessed  or levied or charged to any
Property  as  a single lien.  Each Property is comprised  of  one  or  more
parcels, each of  which,  to  the  knowledge of the Borrower, constitutes a
separate  tax lot (except with respect  to  any  lot  constituting  another
Property) and none of which constitutes a portion of any other tax lot.

7.10 TRANSACTIONS WITH AFFILIATED PERSONS.

     Without the prior written approval of the Agent, which approval may be
granted, withheld,  conditioned or delayed in its sole discretion, the Loan
Parties  shall  not,  and   shall   not  permit  any  of  their  respective
Subsidiaries to, directly or indirectly,  enter into or permit to exist any
transaction (including, without limitation,  the  purchase,  sale, lease or
exchange of any property, the rendering of any service or the making of any
Investment or Guaranty, or the amendment, restatement, supplement  or other
change  of,  or  waiver  or  failure  to enforce any obligations under, any
agreement) with any holder of 5% or more  of any class of equity Securities
of the Borrower or CapStar or any Affiliate  of  the  Borrower  or  CapStar
unless  the  terms  thereof  are  not  less favorable to such Loan Party or
Subsidiary, as the case may be, than those  that  might  be  obtained  in a
comparable transaction at the time on an arms-length basis from Persons who
are not such a holder or Affiliate; PROVIDED, HOWEVER, that this subsection
7.10 shall not apply to (x) any transaction between the Borrower and any of
its  Wholly  Owned Subsidiaries that are Loan Parties or between any of its
Wholly Owned Subsidiaries that are Loan Parties, (y) any transaction listed
on SCHEDULE 7.10  annexed  hereto  (but  not  any  amendment,  restatement,
supplement  or  other  change  of,  or  waiver  or  failure  to enforce any
obligations  under,  any agreement related thereto) and (z) the  terms  and
conditions of the compensation  paid to any such holder or Affiliate in his
or her capacity as a director or  employee of such Loan Party or Subsidiary
that  shall  be approved by a majority  of  the  independent  directors  of
CapStar or by  a  majority  of  independent directors on a committee of the
Board of Directors of CapStar having  at  the  time two or more independent
directors.

7.11 SALES AND LEASE-BACKS.

     The  Loan  Parties  shall  not,  and  shall not permit  any  of  their
respective  Subsidiaries  to,  directly  or  indirectly,   enter  into  any
arrangement with any Person providing for the leasing by any  Loan Party or
any  of  its Subsidiaries of any real or tangible personal property,  which
property has  been or is to be sold or transferred by any Loan Party or any
of its Subsidiaries  to  such  Person  in  contemplation  of  such leasing,
unless,  with  respect to a Pool B Property (including any Pool A  Property
Released in connection  with  a  sale  and lease-back transaction permitted
pursuant to this subsection 7.11):

          (i)  the  Loan Parties and their  respective  Subsidiaries  shall
     comply with the  conditions  set forth in subsection 2.9A with respect
     thereto;

         (ii)  after  giving  effect   to  the  proposed  transaction,  the
     aggregate number of Properties subject  to  such  sale  and lease-back
     transactions shall not exceed three;

        (iii)  the  leasehold interests in each subject Property  shall  be
     held by a separate  Pool  B  Subsidiary  of  the  Borrower unless such
     leasehold interests were acquired in the same transaction or series of
     related transactions;

         (iv)  the  obligations  of each such Pool B Subsidiary  (including
     obligations under the related  leases) may be secured by the assets of
     such Pool B Subsidiary but shall  not  be secured by the assets of, or
     otherwise recourse to, the Borrower or any  of  the  Borrower's  other
     Subsidiaries;

          (v)  no  such Pool B Subsidiary may incur any Pool B Indebtedness
     or become liable  with  respect  to  any  Guaranty or other Contingent
     Obligation with respect to the same;

         (vi)  the Borrower would not be in default, as of the date of such
     leasing,  of  any  of  paragraphs  E  and  F  of  subsection   7.6  if
     Consolidated Total Indebtedness were to increase by an amount equal to
     the Attributable Indebtedness with respect to such sale and lease-back
     arrangement;

        (vii)  the  aggregate  amount  of  Attributable  Indebtedness  with
     respect  to  all  sale  and  lease-back transactions permitted by this
     subsection 7.11 does not exceed $60,000,000 at any time;

       (viii)  the Borrower shall deliver  or  cause to be delivered to the
     Agent  (a) a leasehold mortgage reasonably satisfactory  in  form  and
     substance  to  the  Agent  and evidence reasonably satisfactory to the
     Agent that all other documents  have  been  executed  and  all actions
     taken  that  the  Agent  reasonably  requests  to create, perfect  and
     maintain a valid and enforceable first priority  Lien in the leasehold
     interest  of  the  applicable  Loan  Party or Subsidiary  and  (b)  an
     estoppel certificate, reasonably satisfactory in form and substance to
     the Agent, duly executed by the applicable lessor; and

         (ix)    if applicable, a supplement  to  SCHEDULE 5.4C  reflecting
     the execution of the applicable Pool B Ground Lease.

     A sale and lease-back transaction with respect to a Property permitted
by  this  subsection  7.11  shall be deemed to be a sale or other permanent
disposition of such Property for all purposes of this Agreement.

7.12 SALE OR DISCOUNT OF RECEIVABLES.

     The  Loan  Parties shall not,  and  shall  not  permit  any  of  their
respective Subsidiaries  to, directly or indirectly, sell with recourse or,
except  in  the  ordinary course  of  business  and  consistent  with  past
practices, discount or otherwise sell for less than the face value thereof,
any of its notes or accounts receivable.

7.13 OWNERSHIP OF SUBSIDIARIES.

     Except as expressly  permitted  pursuant  to  subsections  7.7(ii) and
7.15B, (i) the Loan Parties shall not permit any of their respective Wholly
Owned  Subsidiaries  to  cease  to be Wholly Owned Subsidiaries, except  to
qualify directors if required by  Applicable  Laws or permit Investments by
foreign   nationals   mandated   by   Applicable   Law;   PROVIDED    that,
notwithstanding  anything  to  the  contrary  contained  in this Agreement,
Atlanta GP shall not cease to be the sole general partner  of  the  Atlanta
Airport Sub and Atlanta LP shall not own a lesser percentage of outstanding
limited partner interests in the Atlanta Airport Sub than it owns as of the
date  hereof  and  (ii) the Borrower shall not cease to be a Subsidiary  of
CapStar and the financial  statements of the Borrower shall not cease to be
consolidated with the financial  statements  of  CapStar in accordance with
GAAP.

7.14 CONDUCT OF BUSINESS; RESTRICTIONS ON OPERATIONS IN CANADA.

     A.   CONDUCT OF BUSINESS.  The Loan Parties shall  not,  and shall not
permit any of their respective Subsidiaries to, directly or indirectly,  do
the following:

          (i)  engage  in  any  business  other  than  (a) the acquisition,
     ownership,   Renovation,   Restoration,   management,  operation   and
     disposition of Properties that are upscale full service hotels located
     in  the  United  States  of America and, to the  extent  permitted  by
     subsection 7.14(B) below,  Canada,  excluding, without limitation, the
     Development of real property, (b) the management of Managed Properties
     that are hotels located in the United States of America and Canada and
     (c) any business that is ancillary, in  purpose  and  extent,  to  any
     business  referred to in the preceding clauses (a) and (b) (including,
     for the purpose  of  this  clause (c),  the  ownership  of  a  parking
     facility by the Virginia Parking Sub); PROVIDED that (x) CapStar shall
     not  engage  in  any  business other than owning the Virginia Note and
     selling the same to the  Lenders  hereunder and being the sole general
     partner of the Borrower and the sole  stockholder  of  CapStar Sub and
     (y)  CapStar Sub shall not engage in any business other than  being  a
     limited partner of the Borrower; or

         (ii)  enter  into  any  Material Lease or other agreement, or take
     any other action, if such Material  Lease  or  such other action would
     materially  change the business conducted at any  Property,  including
     any such Material Lease, agreement or other action, that would convert
     or reposition  any  Property into any hotel other than an upscale full
     service hotel.

     B.   RESTRICTIONS ON OPERATIONS IN CANADA.  Neither CapStar nor any of
its Subsidiaries shall make  an  Acquisition  of  any  Property  located in
Canada or make an Investment pursuant to subsection 7.3(vii) of a  Security
issued  by  a  Person that owns, manages or operates a hotel in Canada  if,
after  giving effect  to  such  proposed  Acquisition  or  Investment,  the
aggregate  amount  expended  by  CapStar  and  its  Subsidiaries (as of any
applicable  date  of determination) with respect to Properties  located  in
Canada or such Investments  is  greater  than an amount equal to 10% of the
aggregate amount of the Commitments at any time.

7.15 PROPERTIES.

     A.   ACQUISITION OF PROPERTIES.  The Loan Parties shall not, and shall
not permit any of their respective Subsidiaries  to, make an Acquisition of
a fee or leasehold interest in any hotel property  after  the  Closing Date
except in accordance with the provisions of subsection 2.9.

     B.   TRANSFER  OF  PROPERTIES.  The Loan Parties shall not, and  shall
not permit any of their respective  Subsidiaries to, Transfer any Property;
PROVIDED that (i) the Loan Parties and  their  respective  Subsidiaries may
create,  incur,  assume  or  permit  to  exist  Liens  in  accordance  with
subsection  7.2, and (ii) each Loan Party and each of its Subsidiaries  may
sell or otherwise  permanently dispose of any Property (whether directly or
by the sale or other  permanent  disposition of all, but not less than all,
the capital stock or other equity  Securities  of  the Subsidiary that owns
such Property) if (a) each such sale or other permanent disposition of such
Property is made on an arms-length basis, (b) the consideration received by
such Loan Party or Subsidiary in any such transaction  (net  of  any Pool B
Obligations  forgiven  or  paid in connection therewith), in an amount  not
less than the Release Price required to be paid pursuant to subsection 2.10
in connection with the Release of such Property, shall be Cash and shall be
received on the date of such  sale or other permanent disposition, (c) with
respect to any Pool A Property,  the  Borrowing  Base  shall  be reduced as
provided  in  subsection  2.4B(iii)  and  (d) with  respect  to  any Pool A
Property, the Borrower complies with the provisions set forth in subsection
2.10  with  respect  to such Property, including the payment of any Release
Price required thereby.

7.16 RENOVATION EXPENDITURES.

     So long as no Event  of  Default has occurred and is continuing and no
Event of Default or Potential Event of Default would be caused thereby, the
Borrower and its Subsidiaries may  make  expenditures for the Renovation of
Properties (including expanding Improvements  to  increase  the  number  of
available  rooms);  PROVIDED  that  (i) neither the Borrower nor any of its
Subsidiaries shall make any such expenditure  if,  after  giving  effect to
such  expenditure,  the aggregate amount of expenditures as of any date  of
determination for such  Renovations  that shall have been commenced but not
completed as of such date of determination  shall  at  any  time exceed the
amount  by  which  $25,000,000  is  greater than the outstanding amount  of
Contingent Obligations then permitted pursuant to subsection 7.4(iii).

7.17 MANAGEMENT AGREEMENTS AND SERVICING AGREEMENTS.

     The  Loan  Parties  shall not, and  shall  not  permit  any  of  their
respective Subsidiaries to,  enter  into or otherwise become obligated with
respect to, any management agreement  with  respect  to  any hotel property
(other than a Property) after the Closing Date, except that,  from  time to
time:

          (i)  so  long  as  no  Event  of  Default  has  occurred  and  is
     continuing and no Event of Default or Potential Event of Default would
     be  caused  thereby,  without  the  approval  of  the Agent (except as
     provided to the contrary in this subsection 7.17A(i)), the Borrower or
     any  of  its  Wholly  Owned  Subsidiaries  may  enter into  Management
     Agreements  with  respect  to  the management and operation  of  hotel
     properties, the related land and  the  improvements  thereof  (each  a
     ``MANAGEMENT  AGREEMENT'')  and,  subject  to subsection 7.20H, amend,
     restate,  supplement or otherwise change such  Management  Agreements;
     PROVIDED, however,  that  (a) each  Managed  Property  subject to such
     Management Agreement shall be a hotel located in the United  States of
     America or Canada; (b) such Management Agreement shall not constitute,
     have  the  form of or contain provisions creating a leasehold interest
     in any hotel  Property  or  other real or personal property; (c) on or
     before the effective date of  such Management Agreement, the Borrower,
     at  its  expense,  shall  deliver to  the  Agent  (1) an  executed  or
     conformed,   certified   copy   of    such    Management    Agreement,
     (2) supplements to the Schedules to this Agreement and the other  Loan
     Documents,  which  schedules  shall  be  reasonably  acceptable to the
     Agent,  and  (4) payment pursuant to subsection 9.2 of the  reasonable
     expenses incurred  by the Agent in connection with the matters subject
     to this subsection 7.17A(i);  and  (d)  from  and after the Management
     Agreement  Effectiveness  Date  and  with  respect  to   any  Material
     Management  Agreement,  on  or  before  the  effective  date  of  such
     Management  Agreement  the  Agent  shall have approved such Management
     Agreement,  which  approval  shall  not   be   unreasonably  withheld,
     conditioned or delayed, and the Borrower, at its expense shall deliver
     to the Agent an Addition Certificate; and

         (ii)  the Borrower and any of its Wholly Owned  Subsidiaries shall
     enter  into  Servicing  Agreements with respect to the management  and
     operation of Pool B Properties as contemplated by subsection 2.9B.

7.18 INTELLECTUAL PROPERTY; FRANCHISE AGREEMENTS.

     A.  INTELLECTUAL PROPERTY.   The Loan Parties shall not, and shall not
permit any of their respective Subsidiaries,  to  Transfer any Intellectual
Property  unless  the Borrower shall have reasonably  determined  that  the
Intellectual Property so Transferred is no longer material to the business,
operations, condition (financial or otherwise) or prospects of the Borrower
and its Subsidiaries.

     B.  FRANCHISE  AGREEMENTS.   The Loan Parties shall not, and shall not
permit any of their respective Subsidiaries  to,  enter  into  or otherwise
become  obligated with respect to, any franchise agreement (as franchisor),
license  agreement  (as  licensor)  or  similar  agreement  (in  a  similar
capacity)  with  respect  to any Intellectual Property of CapStar or any of
its Subsidiaries.

7.19 MATERIAL LEASES.

     The  Loan Parties shall  not,  and  shall  not  permit  any  of  their
respective  Subsidiaries  to,  (i) enter  into  any Lease other than Leases
incidental to the operation of the Properties as  hotels or (ii) enter into
any Material Lease or any advanced booking of more than 51% of the rooms at
any Property for a period in excess of 30 days without  the  prior  written
approval  of  the Agent, which approval shall not be unreasonably withheld,
conditioned or  delayed;  it  being understood and agreed that if after the
Closing Date any Loan Party or  any  of  its  Subsidiaries  enters  into  a
Material Lease or any such advanced booking, the Agent may require that the
Tenant  thereunder  enter  into a Tenant Subordination Agreement reasonably
satisfactory in form and substance  to  the  Agent.  In the event any Lease
necessary to the operation of any Property as  a  hotel  is terminated, the
applicable Loan Party or Subsidiary thereof shall either replace such Lease
with  a  suitable  comparable  Lease  within  a reasonable period  of  time
following such termination or shall itself provide the services intended to
be obtained under such Lease.

7.20 CHANGES  IN  CERTAIN  OBLIGATIONS AND DOCUMENTS;  ISSUANCE  OF  EQUITY
     SECURITIES.

     A.   CREDIT AGREEMENT.   Without  the  prior  written  approval of the
Agent, which approval may be granted, withheld, conditioned or  delayed  in
its  sole  discretion, the Loan Parties shall not, and shall not permit any
of their respective  Subsidiaries to, enter into any agreement  (other than
this Agreement) prohibiting  or  restricting the ability of any of the Loan
Parties and any of their respective  Subsidiaries  to  amend  or  otherwise
modify this Agreement or any other Loan Document.

     B.   CAPSTAR  PREFERRED STOCK.  Without the prior written approval  of
the Agent, which approval  may be granted, withheld, conditioned or delayed
in its sole discretion, CapStar  shall  not  amend,  restate, supplement or
otherwise  change  its  articles  of incorporation if the  effect  of  such
amendment, restatement, supplement or change is to provide for the issuance
of any preferred stock of CapStar or  the  filing  of  any  certificate  of
designation  with  respect thereto, except that CapStar may amend, restate,
supplement or change  its  certificate  of incorporation to provide for the
issuance of non-cumulative preferred stock; PROVIDED, HOWEVER, that (i) the
certificate  of  incorporation  of  CapStar,   as   so  amended,  restated,
supplemented or changed, and any prospectus, certificate  of designation or
other document delivered in connection with such issuance shall  be in form
and substance satisfactory to the Agent, (ii) such preferred stock shall be
Qualified Capital Stock and (iii) such preferred stock shall be subordinate
in right and time of payment to the Obligations.

     C.   EQUITY  SECURITIES.   The  Loan Parties shall not, and shall  not
permit any of their respective Subsidiaries  to, issue any Capital Stock or
other Security which, by its terms (or by the  terms  of  any Security into
which  it  is  convertible  or for which it is exchangeable), or  upon  the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund or otherwise, or  redeemable  in  Cash  at  the  option of the
holder thereof, in whole or in part, before the date that is 91  days after
the  Maturity  Date;  PROVIDED  that,  so  long  as  no Event of Default or
Potential Event of Default has occurred and is continuing:

          (i)  the Borrower may issue limited partner interests that may be
     converted into shares of Common Stock of CapStar; and

         (ii)  the   Borrower   may   issue   limited   partner   interests
     (``PREFERRED LIMITED PARTNER INTERESTS'') that by their  terms  may be
     converted  into or exercised or redeemed for Cash if (a) the aggregate
     amount of Cash  payable  upon  such conversion, exercise or redemption
     shall not exceed $25,000,000 measured  on  a cumulative basis from the
     Closing  Date  and  (b)  the terms of such Preferred  Limited  Partner
     Interests shall have been  approved by the Agent, which approval shall
     not be unreasonably withheld, conditioned or delayed.

     D.   ORGANIZATION DOCUMENTS.   Without  the  prior written approval of
the Agent, which approval may be granted, withheld,  conditioned or delayed
in its sole discretion, except as expressly permitted  hereunder,  the Loan
Parties   shall   not,  and  shall  not  permit  any  of  their  respective
Subsidiaries to, amend  or  otherwise  modify  their respective charters or
partnership agreements in any material respect except in connection with an
activity permitted by subsection 7.7(vii); PROVIDED that, without the prior
written approval of the Agent (but only after giving  written  notice  with
respect  thereto to the Agent at least 5 Business Days before the effective
date of such  modification  or  amendment),  the  Loan  Parties  and  their
respective  Subsidiaries  may  modify or amend the partnership agreement of
the Virginia Parking Sub in effect  on  the  date of this Agreement if such
modification or amendment is required by the terms  thereof  and  does  not
adversely  affect  the  interests or rights of the Lenders in or to, or the
value of, the partnership interest in the Virginia Parking Sub owned by the
Virginia Parking Sub.

     E.   POOL A GROUND LEASES.   Without the prior written approval of the
Agent, which approval may be granted,  withheld,  conditioned or delayed in
its sole discretion, the Loan Parties shall not, and  shall  not permit any
of  their respective Subsidiaries to, take any action or fail to  take  any
action,  in either case as may be required or permitted by the terms of any
Pool A Ground Lease, with respect to the termination (by such Loan Party or
such Subsidiary, by the lessor or by any other Person, and for any reason),
renewal or  extension thereof or to amend, restate, supplement or otherwise
change, or waive  or  fail  to  enforce any provision of, any Pool A Ground
Lease in any material respect.

     F.   FRANCHISE AGREEMENTS.   Without the prior written approval of the
Agent, which approval shall not be  unreasonably  withheld,  conditioned or
delayed,  the  Loan  Parties shall not, and shall not permit any  of  their
respective Subsidiaries to, (i) take any action or fail to take any action,
in either case as may  be  required  or  permitted  by  the  terms  of  any
Franchise  Agreement with respect to a Pool A Property, with respect to the
termination  (by  such Loan Party or such Subsidiary, the franchisor or any
other Person, and for  any  reason), renewal or extension thereof, PROVIDED
that, without the approval of  the Agent, each such Franchise Agreement may
be renewed or extended on substantially  the  same terms as then in effect,
(ii) amend, restate, supplement or otherwise change,  or  waive  or fail to
enforce any provision of, any Franchise Agreement with respect to  a Pool A
Property  in  any  material  respect,  or  (iii)  enter  into  any  new  or
replacement Franchise Agreement with respect to a Pool A Property (with the
same  franchisor or a different franchisor); PROVIDED that (x) with respect
to a replacement  Franchise  Agreement  referred to in the preceding clause
(iii),  the  Agent's  approval  may be granted,  withheld,  conditioned  or
delayed  in the sole discretion of  the  Agent  if,  in  its  opinion,  the
franchisor under such replacement Franchise Agreement shall have a national
standing and  reputation  less  favorable  than  the  general  standing and
reputation of the franchisors under Franchise Agreements then covering  the
Pool A  Properties  and  (y) with respect to each matter referred to in the
preceding clauses (i), (ii)  or  (iii)  for  which the Agent may reasonably
require a franchisor's estoppel and consent agreement, the Agent's approval
may be conditioned upon its receipt of a franchisor's  estoppel and consent
agreement in substantially the form of the estoppel and  consent  agreement
delivered to the Agent pursuant to subsection 4.1J or otherwise in form and
substance satisfactory to the Agent.

     G.   SERVICING  AGREEMENTS; MANAGEMENT AGREEMENTS.  Without the  prior
written approval of the  Agent,  which  approval  shall not be unreasonably
withheld, conditioned or delayed, the Loan Parties shall not, and shall not
permit any of their respective Subsidiaries to, terminate,  renew,  extend,
amend, restate, supplement or otherwise change, or waive or fail to enforce
any provision of, any Servicing Agreement in any material respect or, after
the  Management  Agreement  Effectiveness  Date,  any  Material  Management
Agreement in any material respect.

     H.   ATLANTA DOCUMENTS; MBL ACQUISITION DOCUMENTS.  Without the  prior
written  approval  of  the  Agent, which approval may be granted, withheld,
conditioned or delayed in its  sole discretion, the Loan Parties shall not,
and  shall  not  permit any of their  respective  Subsidiaries  to,  amend,
restate, supplement  or  otherwise  modify  any  provision  of  the Atlanta
Documents or the MBL Acquisition Documents.

7.21 FISCAL YEAR.

     Without the prior written approval of the Agent, which approval may be
granted,  withheld, conditioned or delayed in its sole discretion,  neither
CapStar nor  any  of its Subsidiaries shall change its fiscal year-end from
December 31.


                             SECTION 8
                    EVENTS OF DEFAULT; REMEDIES

8.1  EVENTS OF DEFAULT.

     If any of the  following  conditions or events (``EVENTS OF DEFAULT'')
shall occur:

     A.   FAILURE  TO  MAKE  PAYMENTS   WHEN   DUE.   Failure  to  pay  any
installment  of  principal  of  any Loan, any reimbursement  obligation  in
respect of a Letter of Credit or  any  Release  Price  when due, whether at
stated maturity, by acceleration in accordance with the  provisions  of the
applicable  Loan  Document, by notice of voluntary prepayment, by mandatory
prepayment or otherwise; or failure to pay interest or any other amount due
under this Agreement  (including  any  other amounts owed in respect of the
Letters of Credit) within five days after the date due; or

     B.   DEFAULT IN OTHER AGREEMENTS.   (i) Failure  of  any Loan Party or
any of its Subsidiaries to pay when due any principal of or interest on any
Indebtedness the aggregate principal amount of which is equal to or greater
than  $5,000,000  (other  than Indebtedness referred to in subsection 8.1A,
but including, without limitation,  any Indebtedness included in the Pool B
Obligations), in each case beyond the  end  of  any  grace  period provided
therefor  (without  extension);  (ii) occurrence  of  any  other  event  or
condition (other than an event or condition expressly described in  another
paragraph  or  provision of this subsection 8.1) which, with the giving  of
notice or the lapse  of  time or both, with respect to (a) any Indebtedness
the aggregate principal amount  of  which  is  equal  to  or  greater  than
$5,000,000 (including, without limitation, any Indebtedness included in the
Pool B Obligations) or any Contingent Obligation(s) the aggregate amount of
which  is  equal  to  or greater than $5,000,000 or (b) any loan agreement,
mortgage, indenture or  other  agreement  relating  to such Indebtedness or
Contingent  Obligation(s),  would  cause,  or would permit  the  holder  or
holders of that Indebtedness or Contingent Obligation(s)  (or  a trustee on
behalf of such holder or holders) to cause, that Indebtedness or Contingent
Obligation(s) to become or be declared due and payable (upon the  giving or
receiving of notice, lapse of time, both, or otherwise) prior to its stated
maturity  or the stated maturity of any underlying obligation, as the  case
may be, in  each  case  beyond the end of any cure period therefor (without
any extension thereof) or (iii) any principal amount of Indebtedness of any
Loan Party or any of its  Subsidiaries  becoming  or being declared due and
payable prior to its stated maturity; or

     C.   BREACH OF CERTAIN COVENANTS.  Failure of  CapStar or the Borrower
to  perform  or  comply  with  any term or condition contained  in  any  of
subsections  2.5,  6.3,  6.14,  6.15,  7.1,  7.2  (with  respect  to  Liens
voluntarily created, incurred, assumed  or  permitted  to exist), 7.3, 7.4,
7.5, 7.6, 7.7, 7.11, 7.12, 7.13, 7.14, 7.15 and 7.20; or

     D.   BREACH OF WARRANTY.  Any representation, warranty,  certification
or  other  statement of any Loan Party or any of its Subsidiaries  made  in
this Agreement  or  in  any  other  Loan  Document  or  in any statement or
certificate at any time given in writing pursuant hereto  or  thereto or in
connection herewith or therewith shall be false in any material  respect on
the date as of which made and such default shall not have been remedied  or
waived  within  30  days after the earlier of (i) such Loan Party's or such
Subsidiary's obtaining  knowledge  of such default and (ii) receipt by such
Loan Party or such Subsidiary of notice  from  the  Agent  of such default;
PROVIDED,  HOWEVER,  that  if  such default cannot be cured solely  by  the
payment of money and the cure of  such  default requires a period in excess
of 30 days, and if such Loan Party or such  Subsidiary,  as  applicable, is
diligently and continuously prosecuting such cure, then such default  shall
not  be an Event of Default unless such Loan Party or such Subsidiary fails
to cure  such  default  within  90  days,  after  such  Loan  Party or such
Subsidiary obtain knowledge or notice thereof, as the case may be; or

     E.   INVALIDITY OF LOAN DOCUMENT; FAILURE OF SECURITY; REPUDIATION  OF
OBLIGATIONS.  At any time after the execution and delivery thereof, (i) any
Loan  Document  (other  than a Security Document) or any material provision
thereof  shall  cease to be  in  full  force  and  effect  (other  than  in
accordance with its  terms)  or  shall  be declared null and void; (ii) any
Security Document or any material provision  thereof  shall  cease to be in
full  force  and  effect  (other  than by reason of a release of Collateral
thereunder in accordance with the terms  hereof  or  thereof  or  any other
termination  of such Security Document in accordance with the terms  hereof
or thereof) or shall be declared null and void, or the Agent shall not have
or shall cease  to  have  a  valid  and  perfected  first  priority Lien or
security interest in any Collateral purported to be covered,  in  each case
for  any  reason  other  than  the  failure of the Agent to take any action
within its control; or (iii) any Loan  Party  shall  contest in writing the
validity  or  enforceability  of any Loan Document in writing  or  deny  in
writing that it has any further liability, including with respect to future
advances by the Lenders, under any Loan Document to which it is a party; or

     F.   POOL A GROUND LEASES.   (i) Failure  by  any Loan Party or any of
its Subsidiaries to pay when due any monetary obligation  contained  in any
Pool A  Ground  Lease,  in  each  case  beyond  the end of any grace period
provided therefor (without extension); (ii) occurrence  of  any other event
or  condition  which, with the giving of notice or lapse of time  or  both,
would cause, or  would permit the landlord under any Pool A Ground Lease to
cause, a cancellation  or  termination, as against any Loan Party or any of
its Subsidiaries party thereto,  of  such Pool A Ground Lease, in each case
beyond  the  end  of  any  cure period therefor  (without  any  extension);
(iii) election by any Loan Party  or  any  of  its  Subsidiaries party to a
Pool A  Ground  Lease to terminate such Pool A Ground Lease  in  accordance
with the terms thereof  or  to  reject  such  Pool A  Ground  Lease  in any
bankruptcy  proceeding;  or  (iv) failure  by  any Loan Party or any of its
Subsidiaries  to  permit  the  Agent  and/or  its  representatives  at  all
reasonable times upon reasonable prior written notice to make investigation
or   examination   concerning  such  Loan  Party's  or  such   Subsidiary's
performance and observance  of  the  terms,  covenants  and conditions of a
Pool A Ground Lease; or

     G.   POOL B OBLIGATIONS.  (i) Failure by any Loan Party  or any of its
Subsidiaries  to  pay  when  due any monetary obligation contained  in  any
Pool B  Document  (other  than  the   principal   of  or  interest  on  any
Indebtedness included in the Pool B Obligations, as  the  case  may be), in
each  case  beyond  the end of any grace period provided therefor, in  each
case beyond the end of  any  cure  period therefor (without any extension);
(ii) the occurrence of any event or  condition  which,  with  the giving of
notice or lapse of time or both, would cause, or would permit the holder or
holders  of  the  related Pool B Obligation, as the case may be (including,
without limitation,  a  landlord under any related Pool B Ground Lease), to
cause, such Pool B Obligation  to  become  or  be  declared due and payable
(upon the giving or receiving of notice, lapse of time, both, or otherwise)
prior  to  its  stated maturity or the stated maturity  of  any  underlying
obligation, as the  case  may be; or (iii) failure by any Loan Party or any
of its Subsidiaries to permit  the  Agent and/or its representatives at all
reasonable times upon reasonable prior written notice to make investigation
or  examination  concerning  such  Loan  Party's   or   such   Subsidiary's
performance  and observance of the terms, covenants and conditions  of  the
Pool B Documents; or

     H.   PROHIBITED  TRANSFERS.   Any  Loan  Party  attempts to assign its
rights  under  this Agreement or any other Loan Document  or  any  interest
herein or therein; or

     I.   OTHER  DEFAULTS  UNDER  LOAN DOCUMENTS.  Any Loan Party or any of
its Subsidiaries shall default in the performance of or compliance with any
term contained in this Agreement or  any other Loan Document other than any
such term in this Agreement or other Loan  Document  that is referred to in
any  other clause of this subsection 8.1 and such default  shall  not  have
been remedied  or  waived within 30 days after the earlier of (i) such Loan
Party's  or  such Subsidiary's  obtaining  knowledge  of  such  default  or
(ii) receipt by such Loan Party or such Subsidiary of notice from the Agent
of such default;  PROVIDED,  HOWEVER,  that if such default cannot be cured
solely by the payment of money and the cure  of  such  default  requires  a
period in excess of 30 days, and such default may reasonably be expected to
be cured on or before the 90th day after such Loan Party or such Subsidiary
obtains  knowledge or notice thereof, and if and so long as such Loan Party
or such Subsidiary  is  diligently  and continuously prosecuting such cure,
then such default shall not be an Event  of  Default unless such Loan Party
or such Subsidiary fails to cure such default before the 90th day after any
Loan Party or any of its Subsidiaries obtains  knowledge or notice thereof,
as the case may be; or
     J.   INVOLUNTARY  BANKRUPTCY;  APPOINTMENT OF  RECEIVER,  ETC.   (i) A
court having jurisdiction in the premises shall enter a decree or order for
relief  in respect of any Loan Party or  any  of  its  Subsidiaries  in  an
involuntary  case  under  the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar  law  now  or  hereafter in effect, which
decree or order is not stayed; or any other similar relief shall be granted
under  any  applicable  federal or state law; or (ii) an  involuntary  case
shall be commenced against  any Loan Party or any of its Subsidiaries under
the Bankruptcy Code or under any other applicable bankruptcy, insolvency or
similar law now or hereafter  in  effect;  or  a decree or order of a court
having  jurisdiction  in the premises for the appointment  of  a  receiver,
liquidator,  sequestrator,  trustee,  custodian  or  other  officer  having
similar powers  over any Loan Party or any of its Subsidiaries, or over all
or a substantial  part  of  its property, shall have been entered; or there
shall have occurred the involuntary  appointment  of  an  interim receiver,
trustee or other custodian of any Loan Party or any of its Subsidiaries for
all  or  a  substantial  part of its property; or a warrant of  attachment,
execution or similar process shall have been issued against any substantial
part of the property of any  Loan Party or any of its Subsidiaries, and any
such event described in this clause (ii)  shall continue for 60 days unless
dismissed, bonded or discharged; or

     K.   VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.  (i) Any Loan
Party or any of its Subsidiaries shall have  an  order  for  relief entered
with  respect to it or commence a voluntary case under the Bankruptcy  Code
or under  any other applicable bankruptcy, insolvency or similar law now or
hereafter in  effect,  or shall consent to the entry of an order for relief
in an involuntary case,  or  to  the conversion of an involuntary case to a
voluntary case, under any such law,  or shall consent to the appointment of
or taking possession by a receiver, trustee or other custodian for all or a
substantial  part  of  its  property; or any  Loan  Party  or  any  of  its
Subsidiaries shall make any assignment  for  the  benefit  of creditors; or
(ii) any  Loan Party or any of its Subsidiaries shall be unable,  or  shall
fail generally,  or  shall admit in writing its inability, to pay its debts
as such debts become due;  or  the  Board of Directors of any Loan Party or
any  of  its  Subsidiaries  (or  any committee  thereof)  shall  adopt  any
resolution or otherwise authorize  any action to approve any of the actions
referred to in clause (i) above or this clause (ii); or

     L.   JUDGMENTS AND ATTACHMENTS.   Any  money judgment, writ or warrant
of attachment or similar process involving individually or in the aggregate
at  any  time  an  amount  in  excess of $5,000,000  (in  either  case  not
adequately covered by insurance  as  to  which  a  solvent and unaffiliated
insurance  company  has acknowledged coverage) shall be  entered  or  filed
against the Borrower  or any of its Subsidiaries or any of their respective
assets and shall remain undischarged, unvacated, unbonded or unstayed for a
period of 60 days (or in  any  event later than five days prior to the date
of any proposed sale thereunder); or

     M.   DISSOLUTION.  Any order,  judgment  or  decree  shall  be entered
against any Loan Party or any of its Subsidiaries decreeing the dissolution
or  split  up  of  such  Loan Party or that Subsidiary and such order shall
remain undischarged or unstayed for a period in excess of 30 days; or

     N.   EMPLOYEE BENEFIT  PLANS.   There  shall  occur  one or more ERISA
Events  which  individually  or  in  the  aggregate  results  in  or  could
reasonably be expected to result in liability of the Borrower, any  of  its
Subsidiaries  or  any  of  their  respective  ERISA Affiliates in excess of
$5,000,000  during  the  term  of this Agreement; or  (x)  the  accumulated
benefit  obligation  (calculated  using  reasonable  actuarial  assumptions
employed by the Borrower's actuary  for  funding purposes) individually for
any Pension Plan, or in the aggregate for  all  Pension  Plans, exceeds the
assets  of  such  Pension  Plan  or Pension Plans by more than  $10,000,000
(excluding for purposes of such computation  any Pension Plans with respect
to  which  assets exceed benefit obligations) (collectively,  a  ``MATERIAL
PLAN'') and  (y)  any  event  occurs  which could reasonably be expected to
result  in  the termination of a Material  Plan  (other  than  a  voluntary
standard termination under Section 4041(b) of ERISA).

     O.   MATERIAL ADVERSE EFFECT.  Any event or change (including, without
limitation, any event or condition expressly described in another paragraph
or provision  of  this  subsection 8.1)  shall  occur  that  has  caused or
evidences,  either  in  any  case  or  in the aggregate, a Material Adverse
Effect; or

     P.   CHANGE IN CONTROL. (i) Paul W.  Whetsell,  any  immediate  family
member  of Mr. Whetsell and any trusts established by Mr. Whetsell for  the
benefit of  Mr.  Whetsell's  immediate  family  members  (PROVIDED that Mr.
Whetsell  or  an immediate family member is the trustee of such  trust  and
able to exercise  voting  rights  in  respect of the property of the trust)
shall cease for any reason, other than  his  death,  to maintain beneficial
ownership (as defined under Section 13(d) of the Exchange  Act)  of, and an
Attributable  Economic Interest in, 200,000 shares of Common Stock  in  the
aggregate at any  time, of which not less than 100,000 shares shall be free
of any Lien created  or  granted  by  Persons that are the record owners of
such shares, PROVIDED that, without the  prior approval of the Agent, which
approval  may be granted, withheld, conditioned  or  delayed  in  its  sole
discretion,  Mr. Whetsell shall not grant any Lien on any option to acquire
common stock granted  by  any of the Loan Parties or shares of Common Stock
of CapStar that may be issued  upon  the  exercise thereof; (ii) any Person
other  than any of Acadia, its successors, its  partners  (individually  or
jointly)  and  other Affiliates, Mr. Whetsell, his immediate family members
and the trusts referred  to  in  the preceding clause (i), or any group (as
defined under Section 13(d)(3) of  the  Exchange Act) consisting of members
other than Acadia, its successors, its partners  (individually  or jointly)
and  other Affiliates, Mr. Whetsell, his immediate family members  and  the
trusts  referred  to  in  the  preceding clause (i), becomes the beneficial
owner of more than 30% of the total  voting  power  in the aggregate of all
classes  of  Capital  stock of CapStar normally entitled  to  vote  in  the
election of directors;  (iii)  a  majority  of  the  board  of directors of
CapStar  shall  not  consist of Persons who were members of such  board  of
directors on the Closing Date or who were nominated for election or elected
to such board of directors with the affirmative vote of at least a majority
of the members of such  board  of directors who were members on the Closing
Date or who were so nominated or  elected;  and  (iv)  the  sale,  lease or
transfer, in one transaction or a series of related transactions, of all or
substantially  all  of  the Borrower's and its Subsidiaries' assets to  any
person or group (as defined  under  Section  13(d)(3)  of the Exchange Act)
other  than to the Borrower or a Wholly Owned Subsidiary  of  the  Borrower
that is a Loan Party;

     Q.   EMPLOYMENT  OF  PAUL  W.  WHETSELL.   The Borrower shall cease to
employ Paul W. Whetsell in a senior position except  in  the event of death
or  disability  of  Mr.  Whetsell or the termination of his employment  for
cause;

     R.   FRANCHISE AGREEMENTS.   (i)  Any Franchise Agreement with respect
to a Pool A Property or any consent delivered  by  any franchisor under any
such Franchise Agreement shall cease to be in full force  and  effect other
than with the express consent of the Agent pursuant to subsection  6.20G to
the  extent  required  thereunder  or (ii) any party thereto shall deny  or
disaffirm  its  obligations thereunder  or  shall  deny  or  disaffirm  its
obligations  thereunder   or  shall  default  in  the  due  performance  or
observance of any material  term,  covenant or agreement on its party to be
performed or observed pursuant thereto and any applicable cure period shall
have expired, and in any such event  the  Borrower  shall  have  failed  to
replace  such Franchise Agreement within 60 days of such default (after the
expiration  of  any  such  cure  period) or disaffirmation with a franchise
acceptable to the Agent, in its sole discretion;

THEN  (i) upon  the  occurrence  of  any  Event  of  Default  described  in
subsection 8.1J or 8.1K, each of (a) the  unpaid  principal  amount  of and
accrued  interest  on  the Loans, (b) an amount equal to the maximum amount
that may at any time be  drawn under all Letters of Credit then outstanding
(whether or not any beneficiary  under any such Letter of Credit shall have
presented, or shall be entitled at  such  time  to  present,  the drafts or
other  documents  or  certificates  required  to draw under such Letter  of
Credit),   and   (c) all  other  Obligations  shall  automatically   become
immediately due and  payable,  without notice, presentment, demand, protest
or other requirements of any kind, all of which are hereby expressly waived
by the Borrower and the obligations  of  each  Lender to make any Loan, the
obligation of Agent to issue any Letter of Credit  and  the  right  of  any
Lender  to  issue any Letter of Credit hereunder shall thereupon terminate,
and (ii) during  the  continuance  of any other Event of Default, the Agent
may, in its sole discretion, by written notice to the Borrower, declare all
or any portion of the amounts described in clauses (a) through (c) above to
be, and the same shall forthwith become,  immediately  due  and payable and
the obligation of each Lender to make any Loan, the obligation  of Agent to
issue any Letter of Credit and the right of any Lender to issue any  Letter
of  Credit hereunder shall thereupon terminate; PROVIDED that the foregoing
shall  not  affect  in  any way the obligations of Lenders under subsection
3.3C(i).

          Any amounts described  in  clause (b)  above,  when  received  by
Agent,  shall  be  held  by  Agent  pursuant to the terms of the Collateral
Account Agreement and shall be applied as therein provided.

          The occurrence of any condition  or event may constitute an Event
of Default (or a Potential Event of Default)  under more than one provision
of this subsection 8.1.

8.2  CERTAIN REMEDIES.

     A.   During the continuance of an Event of  Default, all or any one or
more of the rights, powers, privileges and other remedies  available to the
Agent or the Lenders against the Borrower under this Agreement,  the Notes,
the  Mortgages,  the Security Documents or any of the other Loan Documents,
or at law or in equity,  may  be  exercised by the Agent, acting in its own
sole discretion at any time and from  time  to  time, whether or not all or
any  portion  of the Obligations shall be declared  due  and  payable,  and
whether or not the Agent shall have commenced any foreclosure proceeding or
other action for  the  enforcement  of its rights and remedies under any of
the Loan Documents with respect to any  Property  or  all or any portion of
the  Mortgaged  Property.   Any such actions taken by the  Agent  shall  be
cumulative  and  concurrent  and  may  be  pursued  independently,  singly,
successively, together or otherwise,  at such time and in such order as the
Agent in its sole discretion may determine, to the fullest extent permitted
by  law, without impairing or otherwise  affecting  the  other  rights  and
remedies  of  the Agent or the Lenders permitted by law, equity or contract
or as set forth herein or in the other Loan Documents.

     B.   In the  event  of the foreclosure or other action by the Agent to
enforce  its  remedies  in connection  with  one  or  more  of  the  Pool A
Properties, the Ground Leases or any other Collateral or all or any portion
of the Properties, whether  such  foreclosure  (or other remedy) yields net
proceeds in an amount less than, equal to or more  than the Property Amount
with  respect  to  such Property, the Agent shall apply  all  net  proceeds
received to repay the  Obligations, the Obligations shall be reduced to the
extent of such net proceeds  and  the  remaining portion of the Obligations
shall remain outstanding and secured by  the  Mortgages  and the other Loan
Documents, it being understood and agreed by the Borrower that the Borrower
is  liable  for  the  repayment of the Obligations and that any  ``excess''
foreclosure  proceeds are  part  of  the  cross-collateralized  and  cross-
defaulted security  granted  to the Agent on behalf of the Lenders pursuant
to the Mortgages; PROVIDED, HOWEVER,  that,  if  the  Agent  so elects, the
Loans  and the Notes shall be deemed to have been accelerated only  to  the
extent of the net proceeds actually received by the Lenders with respect to
any individual  Property  (or, in the event that the Agent on behalf of the
Lenders is the purchaser of  such  Property  by Credit Bid at a foreclosure
sale, the Loans and the Notes shall be deemed to have been accelerated only
at such time as the Agent subsequently disposes  of  such Property and then
only  to  the  extent  of  the  amount of such Credit Bid) and  applied  in
reduction of the Obligations in accordance  with  the  provisions  of  this
Agreement  and  the Notes, after payment by the Borrower of all transaction
costs and expenses and costs of enforcement.

     C.   It is intended  that  the  Liens  of  the Mortgages shall each be
construed  and  treated as a separate, distinct Lien  for  the  purpose  of
securing  the entire  Obligations  secured  thereby  and  each  Loan  Party
acknowledges  and agrees that each Property is mortgaged and transferred to
the Agent on behalf  of the Lenders by a separate and distinct mortgage and
security agreement, so that if it should at any time appear or be held that
any Mortgage fails to  mortgage, and transfer to the Agent on behalf of the
Lenders a Lien upon and  the title to any Property, or any part thereof, as
against creditors of the Borrower other than the Lenders or otherwise, such
failure shall not operate  to  affect  in any way the transfer of the other
Properties or Mortgaged Property or any part thereof to the Agent on behalf
of the Lenders; but nothing contained herein  or  in the Mortgages shall be
construed as requiring the Agent on behalf of the Lenders  to resort to any
Property  for  the  satisfaction  of  the  Obligations  secured thereby  in
preference  or  priority to any other Mortgaged Property thereby  conveyed,
but the Agent, acting  in  its sole discretion may seek satisfaction out of
all of the Mortgaged Property or any part thereof.

     D.   In  addition  to  any  rights  now  or  hereafter  granted  under
applicable law and not by way  of  limitation  of any such rights, upon the
occurrence and during the continuance of any Event  of Default the Agent is
hereby authorized by the Borrower at any time or from time to time, without
notice to the Borrower or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and to  apply  any  and all
deposits   (general   or   special,  including  Indebtedness  evidenced  by
certificates of deposit, whether  matured  or  unmatured, but not including
trust accounts) and any other Indebtedness at any time held or owing by the
Agent to or for the credit or the account of the  Borrower  against  and on
account  of  the  obligations  and liabilities of the Borrower to the Agent
under this Agreement and the Notes,  including  all claims of any nature or
description arising out of or connected with this  Agreement  or  any other
Loan Document, irrespective of whether or not (i) the Agent shall have made
any  demand hereunder or (ii) the principal of or the interest on the  Loan
or any  other  amounts  due  hereunder  shall  have  become due and payable
pursuant to subsection 8.1 and although said obligations  and  liabilities,
or any of them, may be contingent or unmatured.

     E.   During the continuance of an Event of Default, the Agent,  in its
sole  discretion, shall have the right, to the extent permitted by law,  to
impound  and  take possession of books, records, notes, and other documents
evidencing the  Borrower's  Deposit Accounts, accounts receivable and other
claims for payment of money (including  Rents)  arising  in connection with
the Properties, to give notice to the obligors thereunder  of  the  Agent's
interest  therein, and to make direct collections on such Deposit Accounts,
accounts receivable and claims.

     F.   During  the  occurrence  of  an  Event  of  Default  and upon the
occurrence  and during the continuance of a default in the payment  of  any
principal or  interest  of  any  Indebtedness owed or alleged to be owed by
CapStar,  the  Borrower  or  any  of  their  respective  Subsidiaries,  and
following the initiation of any proceeding  or  the  taking  of  any  other
action  to  collect  the  payment  thereof  by  the Person entitled to such
payment,  the  Agent may, in its sole discretion, advance  either  to  such
Person or to the  Borrower,  for payment to such Person, all or any portion
of  the amount of such payment,  whether  or  not  the  existence  of  such
obligation  or  amount  thereof  shall  be disputed by the Borrower or such
Subsidiary.  Each such advance, to the extent not paid out of from funds of
CapStar,  the Borrower or any of their respective  Subsidiaries,  shall  be
deemed a Loan  hereunder  and  shall  be  subject to the provisions of this
Agreement.

     G.   The rights, powers and remedies of  the  Agent  and  the  Lenders
under  this  Agreement  shall  be cumulative and not exclusive of any other
right, power or remedy which the  Agent or the Lenders may have against any
Loan Party pursuant to this Agreement  or the other Loan Documents executed
by or with respect to such Loan Party, or  existing  at law or in equity or
otherwise.  The rights, powers and remedies of the Agent  and  the  Lenders
may be pursued singly, concurrently or otherwise, at such time and in  such
order  as  the Agent, acting in its own sole discretion, may determine.  No
delay or omission  to  exercise any remedy, right or power accruing upon an
Event of Default shall impair  any  such remedy, right or power or shall be
construed as a waiver thereof, but any  such  remedy, right or power may be
exercised from time to time and as often as may  be  deemed  expedient.   A
waiver  of  any Event of Default or Potential Event of Default with respect
to any Loan Party  shall  not be construed to be a waiver of any subsequent
Event of Default or Potential  Event  of  Default  by such Loan Party or to
impair any remedy, right or power consequent thereon.


                             SECTION 9
                           MISCELLANEOUS

9.1  ASSIGNMENTS AND PARTICIPATIONS IN LOANS AND LETTERS OF CREDIT.

     A.   GENERAL.   Each  Lender  shall  have the right  at  any  time  to
(i) sell, assign, transfer or negotiate to  any Eligible Assignee (PROVIDED
that such Eligible Assignee complies with the  requirements  of  subsection
2.7B(iii)  as  of  the  date  it  becomes a Lender hereunder, to the extent
applicable), or (ii) sell to any Eligible  Assignee  participations  to any
Person  in, all or any part of its Commitment or any Loan or Loans made  by
it or its Letters of Credit or participations therein or any other interest
herein or  in  any  other  Obligations  owed to it; PROVIDED, HOWEVER, that
(w) no such sale, assignment, transfer or  participation shall, without the
consent  of  the  Borrower, require the Borrower  to  file  a  registration
statement with the  Securities  and Exchange Commission or apply to qualify
such sale, assignment, transfer or  participation under the securities laws
of any state, (y) no such sale, assignment,  transfer  or  participation of
any  Letter  of Credit or any participation therein may be made  separately
from a sale, assignment,  transfer  or  participation  of  a  corresponding
interest in the Loan Commitment and the Loans of the Lender effecting  such
sale,   assignment,  transfer  or  participation,  and  (z) no  such  sale,
assignment or transfer of an interest in the Loan Commitment of such Lender
shall be made in an amount less than $5,000,000 (or, if less, the aggregate
amount of  the  Commitment  of such Lender).  In the case of any assignment
authorized  under this subsection  9.1,  (i) the  Agent  shall  notify  the
Borrower  of the  effective  date  of  such  assignment,  (ii) as  of  such
effective date,  the  assignee  shall  be a party hereto and, to the extent
that rights and obligations hereunder have  been  assigned to it or assumed
by  it,  as  the case may be, shall have the rights and  obligations  of  a
Lender hereunder,  (iii) the assigning Lender shall, to the extent that its
rights and obligations  hereunder  have been assigned by it, relinquish its
rights and be released from its obligations  under this Agreement after the
date of such assignment and (iv) if any such assignment  occurs  after  the
issuance  of  a  Note  with  respect  to  the  Commitment  so assigned, the
assigning  Lender  shall  surrender  its  applicable  Note  and, upon  such
surrender,  new  Notes shall be issued to the assignee and, if  applicable,
the assigning Lender substantially in the form of EXHIBIT I annexed hereto,
with appropriate insertions.  In  the event of an assignment hereunder, the
Commitments shall be modified to reflect  the Commitments of such assignee.
Except with respect to the portion of the Loans  and  Commitments  assigned
pursuant  to  this subsection 9.1, no Lender shall, as between the Borrower
and such Lender,  be  relieved  of  any  of  its obligations hereunder as a
result of any sale, assignment, transfer or negotiation of, or any granting
of participations in, all or any part of its Commitment  or  the Loans, the
Letters of Credit or participations therein, or other Obligations  owed  to
such Lender.

     B.   PARTICIPATIONS.   The Borrower and each Lender hereby acknowledge
and agree that, solely for purposes  of  subsections  2.6,  2.7,  and  9.5,
(i) any participation will give rise to a direct obligation of the Borrower
to  the  participant  and  (ii) the participant shall be considered to be a
``Lender''.

     C.   ASSIGNMENTS  TO  FEDERAL  RESERVE  BANKS.   In  addition  to  the
assignments and participations  permitted under the foregoing provisions of
this subsection 9.1, any Lender may assign and pledge all or any portion of
its Loans and the other Obligations  owed  to  such  Lender  to any Federal
Reserve Bank as collateral security pursuant to Regulation A of  the  Board
of  Governors  of  the  Federal  Reserve  System and any operating circular
issued  by  such Federal Reserve Bank.  No Lender  shall,  as  between  the
Borrower and  such  Lender, be relieved of any of its obligations hereunder
as a result of any such assignment and pledge.

     D.   INFORMATION.   Each Lender may furnish any information concerning
the Borrower and its Subsidiaries  in  the  possession  of that Lender from
time  to  time to prospective assignees and participants who  agree  to  be
bound by the provisions of subsection 9.24.

9.2  EXPENSES.

     Whether   or   not  the  transactions  contemplated  hereby  shall  be
consummated, the Borrower  agrees  to  pay  promptly  (i)  all the costs of
furnishing  all  opinions  of counsel for the Borrower and the  other  Loan
Parties (including any opinions  reasonably  requested  by the Agent) as to
any legal matters arising hereunder and of each Loan Party's performance of
and  compliance  with  all  agreements  and conditions on its  part  to  be
performed  or  complied  with  under  this Agreement  and  the  other  Loan
Documents   including   with   respect   to  confirming   compliance   with
environmental, insurance and solvency requirements  and with respect to the
Security  Documents and the Liens created pursuant thereto;  (ii)  all  the
actual costs  and expenses of creating, perfecting and maintaining Liens in
favor of the Agent  for  the  benefit  of  the Lenders pursuant to any Loan
Document,  including  filing  and  recording fees  and  expenses,  mortgage
recording  taxes, intangible taxes and  transfer  and  stamp  taxes,  title
searches, title  insurance  premiums,  UCC  search  and  filing charges and
expenses  (including charges and expenses for UCC searches  evidencing  the
proper filing,  recording  and  indexing  of  UCC  financing statements and
listing all other effective financing statements that  name such Loan Party
as  debtor, and copies of all such other financing statements);  (iii)  all
reasonable   out-of-pocket   costs  and  expenses  incurred  by  the  Agent
(including the reasonable fees, expenses and disbursements of any auditors,
accountants, architects, engineers  or  appraisers and any environmental or
other consultants, advisors and agents employed or retained by the Agent or
its  counsel)  in  connection  with  performing  due  diligence,  including
obtaining  and  reviewing  any  Appraisals,  any  environmental  audits  or
reports, market surveys, title reports,  surveys  and  similar information;
(iv)  all  reasonable  out-of-pocket  fees,  expenses and disbursements  of
counsel  for  the Agent and its Affiliates (including  allocated  costs  of
internal  counsel)   in   connection  with  the  negotiation,  preparation,
execution  and  syndication  of   the  Loan  Documents  and  any  consents,
amendments, waivers or other modifications  thereto and any other documents
or  matters requested by any Loan Party; (v) all  reasonable  out-of-pocket
costs  and  expenses  incurred  by  the  Agent  in  connection with (a) the
negotiation,   preparation  and  execution  of  the  Loan  Documents,   the
syndication of the  Commitments  and  Loans  and  due  diligence,  (b)  any
consents,  amendments  or  waivers  of or other modifications to any of the
Loan Documents, (c) any Acquisition, Transfer or release of any Property or
other Collateral or any proposal with  respect to any of the foregoing, (d)
the  custody  or  preservation  of  any  of  the   Collateral  and  (e) the
preparation, delivery or review of other documents or  matters requested by
any Loan Party, including, without limitation, all instruments,  documents,
boundary  surveys,  footing or foundation surveys, certificates, plans  and
specifications, Appraisals  (but  only to the extent required to be paid by
the  Borrower  pursuant  to subsection 6.6B),  title  and  other  insurance
reports and agreements, and  each  and  every  other document, certificate,
agreement and instrument required to be furnished  pursuant to the terms of
the Loan Documents; and (vi) after the occurrence of  an  Event of Default,
all  costs  and  expenses, including reasonable attorneys' fees  (including
allocated costs of  internal  counsel) and costs of settlement, incurred by
the Agent and the Lenders in enforcing  any Obligations of or in collecting
any  payments  due from the Borrower hereunder  or  under  the  other  Loan
Documents by reason  of  such  Event  of  Default or in connection with any
refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a ``work-out'' or  pursuant to any insolvency or
bankruptcy proceedings.  Except as expressly provided  to  the  contrary in
this  Agreement  or  any  other  Loan Document, costs or expenses that  are
payable by the Borrower after the  Closing  Date  shall  be  payable by the
Borrower within five Business Days after the Borrower's receipt  of written
demand  from  the  Agent  to  pay  same,  accompanied  by  documentation in
reasonable detail sufficient to verify the nature and amount.

9.3  INDEMNITY.

     A.   INDEMNITY.  In addition to the payment of expenses as required by
subsection 9.2, whether or not the transactions contemplated  hereby  shall
be  consummated, the Borrower agrees to defend, indemnify and hold harmless
the Agent,  Lenders and Bankers and their respective Affiliates and Persons
deemed to be  ``controlling  persons''  thereof  within  the meaning of the
Securities Act or the Exchange Act and the respective directors,  officers,
employees,   agents,   attorneys   and  representatives  of  the  foregoing
(collectively, ``INDEMNIFIED PERSONS''   and individually, an ``INDEMNIFIED
PERSON''), to the full extent lawful, from  and against any and all losses,
claims, damages, liabilities, costs and expenses  or  other  obligations of
any  kind  or  nature  whatsoever incurred by each such Indemnified  Person
(including fees, charges  and  disbursements  of  counsel and the allocated
costs and expenses of internal counsel for such Indemnified  Person)  which
are  related  to,  arise out of or result from (a) any untrue statements or
alleged untrue statements  or  omissions  or  alleged  omissions  to  state
therein  a material fact necessary to make the statements therein, in light
of the circumstances  in which they were made, not misleading, in each case
made or, to the extent  contemplated  by the Loan Documents, to be made, by
or  on  behalf  of  any Loan Party or any of  its  Affiliates,  (x) in  the
representations and warranties  of  the  Loan Parties contained in the Loan
Documents, (y) in or pursuant to the Original  Financing  Letter,  the Loan
Documents or the Related Documents or (z) otherwise in connection with  the
Original  Financing  Letter,  the  Loan Documents or the Related Documents,
(b) information provided by or on behalf  of any Loan Party or any of their
Affiliates  for  use  in  connection  with any syndication,  assignment  or
participation of any portion of the Commitments,  the Loans, the Notes, the
other Loan Documents or the Obligations, or in connection with the Original
Financing  Letter,  any  Loan  Document  or  any Related  Document  or  any
transactions   contemplated   hereby   or  thereby,  (c) the   transactions
contemplated by the Loan Documents (including  the  Lenders'  agreements to
make the Loans or the use or intended use of the proceeds thereof)  or  any
enforcement of any of the Loan Documents (including any sale of, collection
from, or other realization upon any of the Collateral or the enforcement of
the Affiliate Guaranty), (d) any actions taken or omitted to be taken by an
Indemnified  Person  with the consent of the Borrower or in conformity with
the  instructions  of  the   Borrower,   or   (e) any   other  transactions
contemplated  by the Original Financing Letter, the Loan Documents  or  the
Related Documents,  and the Borrower will reimburse each Indemnified Person
for all reasonable costs  and expenses, including fees and disbursements of
both outside and internal counsel  for such Indemnified Person, as they are
incurred, in connection with investigating, preparing for, or defending any
formal or informal claim, action, suit,  investigation,  inquiry  or  other
proceeding,  whether  or  not  in  connection  with  pending or threatening
litigation,  caused  by  or  arising  out  of  or  in connection  with  the
foregoing,  whether  or not such Indemnified Person is  named  as  a  party
thereto and whether or  not  any liability results therefrom.  The Borrower
shall  not,  however,  be responsible  for  any  losses,  claims,  damages,
liabilities, costs or expenses  pursuant  to clauses (c), (d) or (e) of the
preceding sentence which have resulted from  the  bad faith or recklessness
of such Indemnified Person as determined by a final  judgment of a court of
competent jurisdiction.  Neither the Agent nor any other Indemnified Person
shall have any liability (whether direct or indirect,  in  contract or tort
or otherwise) to any of the Loan Parties and their respective Affiliates or
any  director,  officer, employee, agent or representative of  any  of  the
foregoing, or any other person, for or in connection with the foregoing, or
otherwise arising out of or in any way relating to the matters contemplated
by the Original Financing Letter, the Loan Documents, the Related Documents
or any commitment  to  lend  except  for such liability for losses, claims,
damages, liabilities, costs or expenses  of any Indemnified Person pursuant
to clauses (c), (d) or (e) of the preceding sentence to the extent they are
determined  to have resulted from the bad faith  or  recklessness  of  such
Indemnified Person  as  determined  by  a  final  judgment  of  a  court of
competent  jurisdiction  and  in  no  event  shall  the  Agent or any other
Indemnified Person be responsible for or liable to any of  the Loan Parties
or   any   of   their   respective  Affiliates  or  any  other  Person  for
consequential, punitive or  exemplary damages.  The Borrower further agrees
that the Loan Parties shall not,  nor  shall  they  permit their respective
Subsidiaries  to,  without  the  prior  written consent of  the  Agent  and
Bankers, settle or compromise or consent  to  the  entry of any judgment in
any  pending or threatened claim, action, suit, investigation,  inquiry  or
other  proceeding  in  respect  of which indemnification is actually sought
hereunder  unless  such  settlement,  compromise  or  consent  includes  an
unconditional  release of the  Agent  and  each  other  Indemnified  Person
hereunder from all  liability  arising  out  of  such  claim, action, suit,
investigation, inquiry or other proceeding.

     B.   PROCEDURE.  If any action, suit, investigation,  inquiry or other
proceeding  is  commenced,  as  to which an Indemnified Person proposes  to
demand indemnification hereunder,  such Indemnified Person shall notify the
Borrower with reasonable promptness; PROVIDED, HOWEVER, that any failure by
such  Indemnified  Person to notify the  Borrower  shall  not  relieve  the
Borrower or any of its Affiliates from its obligations hereunder (except to
the extent that the  Borrower  or  such  Affiliate  is  prejudiced  by such
failure  to so promptly notify).   The Borrower shall be entitled to assume
the defense  of  any  such  action,  suit,  investigation, inquiry or other
proceeding, including the employment of counsel  reasonably satisfactory to
the Indemnified Person and the payment of all reasonable  fees and expenses
incurred  in connection therewith.  The Indemnified Person shall  have  the
right to employ  separate  counsel in any such action, suit, investigation,
inquiry or other proceeding,  or to participate in the defense thereof, but
the fees and expenses of such counsel  shall  be  at  the  expense  of  the
Indemnified  Person unless (i) the Borrower has agreed to pay such fees and
expenses, (ii) the  Borrower shall have failed promptly upon written demand
therefor to assume the defense of such action, suit, investigation, inquiry
or other proceeding,  and  employ  counsel  reasonably  satisfactory to the
Indemnified Person in connection therewith or (iii) such Indemnified Person
shall  have been advised by counsel that there exists actual  or  potential
conflicting  interests  between  the  Borrower and such Indemnified Person,
including situations in which one or more  legal  defenses may be available
to such Indemnified Person that are different from  or  additional to those
available  to  the  Borrower,  in  which  case, if such Indemnified  Person
notifies the Borrower in writing that it elects  to employ separate counsel
at the expense of the Borrower, the Borrower shall  not  have  the right to
assume  the  defense  of  such  action  or  proceeding  on  behalf  of such
Indemnified  Person;  PROVIDED,  however,  that  the Borrower shall not, in
connection with any one such action, suit, investigation,  inquiry or other
proceeding or separate but substantially similar or related actions, suits,
investigations,  inquiries  or  other  proceedings in the same jurisdiction
arising out of the same general allegations or circumstances, be liable for
the fees and expenses of more than one separate  firm  of  attorneys at any
time for all such Indemnified Persons (in addition to local counsel), which
firm shall be designated in writing by the Agent.

     C.   CONTRIBUTION.   In  order  to  provide  for  just  and  equitable
contribution with respect to matters subject to subsection 9.3A, if a claim
for indemnification is made pursuant to these provisions but is found  in a
final judgment by a court of competent jurisdiction (not subject to further
appeal)  that such indemnification is not available for any reason (except,
with respect  to indemnification sought solely pursuant to subsection 9.3A,
for the reasons  specified in the second sentence of subsection 9.3A), even
though the express  provisions  hereof  provide for indemnification in such
case, or is insufficient to hold an Indemnified  Party  harmless,  then the
Borrower,  on  the one hand, and the Agent, the Lenders or Bankers, on  the
other hand, shall  contribute  to such loss, claim, damage, liability, cost
or  expense  for  which  such  indemnification  or  reimbursement  is  held
unavailable or is insufficient in  such  proportion  as  is  appropriate to
reflect  the  relative  benefits  to  the Loan Parties and their respective
Affiliates, on the one hand, and the Agent,  Lenders  or  Bankers,  on  the
other  hand,  in connection with the transactions described in the Original
Financing Letter,  the Loan Documents and the Related Documents, as well as
any other equitable considerations.  The parties agree that for the purpose
of this subsection 9.3C,  the  relative  benefits  to  the Loan Parties and
their  respective Affiliates, on the one hand, and the Agent,  Lenders  and
Bankers, on the other hand, shall be deemed to be in the same proportion as
the proceeds  received  or to be received by the Loan Parties from the Loan
Documents bears to the fees  paid  or  to be paid to the Agent, Lenders and
Bankers  under  the  Loan Documents.  Notwithstanding  the  foregoing,  the
Agent, Lenders and Bankers  shall  not be required to contribute under this
subsection  9.3C  any amount in excess  of  the  amount  of  fees  actually
received by the Agent, Lenders and Bankers, respectively, in respect of the
Loan Documents.  The Borrower, Agent, Bankers and the Lenders agree that it
would not be just and equitable if contribution pursuant to this subsection
9.3C were determined  by  pro  rata allocation or by any other method which
does not take into account the equitable considerations referred to in this
subsection 9.3C.

     D.   NO   LIMITATION.   The  foregoing   rights   to   indemnity   and
contribution shall be in addition to any rights that any Indemnified Person
and Loan Parties  may  have  at common law or otherwise and shall remain in
full force and effect following  the  completion  or any termination of the
transactions  contemplated  by  the  Original Financing  Letter,  the  Loan
Documents and the Related Documents. In  no  event  shall  the  Agent,  the
Lenders,   or   Bankers   be  responsible  or  liable  to  any  person  for
consequential damages which  may  be  alleged  as  a result of the Original
Financing  Letter,  the  Loan Documents and the Related  Documents  or  any
transaction contemplated thereby.

     E.   INDEPENDENCE  OF   INDEMNITY;   NO   ENLARGEMENT.   The  Borrower
acknowledges  and  agrees  that the provisions of this  subsection 9.3  are
separate from and in addition  to  the provisions contained in the Original
Financing  Letter  and  contained  in  the  Environmental  Indemnity.   The
provisions of this subsection 9.3 shall not enlarge or vary the obligations
of the Borrower under subsections 2.6D and 2.7.

9.4  NO JOINT VENTURE OR PARTNERSHIP.

     The Lenders, CapStar and the Borrower  acknowledge  and agree that the
relationship created hereunder or under the other Loan Documents is that of
creditor/debtor.  Each of CapStar and the Borrower acknowledges  and agrees
that   (a) the   Borrower,   through  its  partners  and  employees,  is  a
knowledgeable  and  sophisticated  business  practitioner  with  particular
expertise and broad experience  in  the  area of hotel acquisition, finance
and management; (b) the Lenders individually  and collectively, do not owe,
and have expressly disclaimed, any fiduciary or  special  obligation to the
Borrower and/or any of the Borrower's partners, agents, or representatives;
and  (c) nothing  contained  in  this Agreement or any other Loan  Document
shall affect the relationship between  the Lenders and the Borrower as that
of creditor/debtor hereunder and under the  other  Loan Documents.  Nothing
herein  or  therein  is  intended  to create a joint venture,  partnership,
tenancy-in-common, or joint tenancy  relationship between the Borrower, any
other Loan Party or Subsidiary thereof  and  the  Lenders  nor to grant the
Agent or the Lenders any interest in the Mortgaged Property other than that
of mortgagee or lender.

9.5  RATABLE SHARING.

     The Lenders hereby agree among themselves that if any of  them  shall,
whether  by  voluntary  payment (other than a voluntary prepayment of Loans
made and applied in accordance  with  this  Agreement), by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement  of  any right under the
Loan Documents or otherwise, or as adequate protection of a deposit treated
as cash collateral under the Bankruptcy Code, receive payment  or reduction
of  a  proportion  of the aggregate amount of principal, interest,  amounts
payable in respect of  Letters  of  Credit, fees and other amounts then due
and  owing  to that Lender hereunder or  under  the  other  Loan  Documents
(collectively,  the  ``AGGREGATE  AMOUNTS  DUE''  to  such Lender) which is
greater than the proportion received by any other Lender  in respect of the
Aggregate Amounts Due to such other Lender, then the Lender  receiving such
proportionately greater payment shall (i) notify the Agent and  each  other
Lender  of  the  receipt  of  such payment and (ii) apply a portion of such
payment to purchase participations  (which  it  shall  be  deemed  to  have
purchased  from  each  seller  of  a  participation simultaneously upon the
receipt by such seller of its portion of  such  payment)  in  the Aggregate
Amounts  Due to the other Lenders so that all such recoveries of  Aggregate
Amounts Due  shall  be shared by all Lenders in proportion to the Aggregate
Amounts Due to them;  PROVIDED,  HOWEVER,  that  if  all  or  part  of such
proportionately  greater  payment  received  by  such  purchasing Lender is
thereafter recovered from such Lender upon the bankruptcy or reorganization
of  the Borrower or otherwise, those purchases shall be rescinded  and  the
purchase  prices  paid  for  such  participations shall be returned to such
purchasing  Lender ratably to the extent  of  such  recovery,  but  without
interest.  The Borrower expressly consents to the foregoing arrangement and
agrees that any holder of a participation so purchased may exercise any and
all rights of  banker's  lien,  set-off or counterclaim with respect to any
and all monies owing by the Borrower to that holder with respect thereto as
fully as if that holder were owed  the  amount of the participation held by
that holder.

9.6  AMENDMENTS AND WAIVERS.

     No amendment, modification, termination  or waiver of any provision of
this Agreement or any other Loan Document or consent  to  any  departure by
any  Loan  Party  therefrom,  shall  in any event be effective without  the
written concurrence of the Agent.  Any waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given.  No notice to or demand on the  Borrower  in  any case shall entitle
the Borrower to any other or further notice or demand  in  similar or other
circumstances.  Any amendment, modification, termination, waiver or consent
effected in accordance with this subsection 9.6 shall be binding  upon each
Lender  at  the time outstanding, each future Lender and, if signed by  the
Borrower, on the Borrower.

9.7  INDEPENDENCE OF COVENANTS.

     All covenants hereunder shall be given independent effect so that if a
particular action  or  condition is not permitted by any of such covenants,
the fact that it would be  permitted by an exception to, or would otherwise
be  within  the  limitations of,  another  covenant  shall  not  avoid  the
occurrence of an Event  of  Default  or  Potential Event of Default if such
action is taken or condition exists.

9.8  NOTICES.

     Unless otherwise specifically provided  herein,  any  notice  or other
communication  herein required or permitted to be given shall be in writing
and may be personally  served  or  sent by telefacsimile or courier service
and shall be deemed to have been given  when  delivered  in  person  or  by
courier  service  or upon receipt of the telefacsimile, as the case may be.
For the purposes hereof,  the  address of each party hereto shall be as set
forth under such party's name on  the  signature  pages hereof or (i) as to
the Borrower and the Agent, such other address as shall  be  designated  by
such  Person  in a written notice delivered to the other parties hereto and
(ii) as to each  other  party, such other address as shall be designated by
such party in a written notice delivered to the Agent.

9.9  SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.

     A.   Except as provided in subsection 9.9B below, all representations,
warranties and agreements  made  herein  shall  survive  the  execution and
delivery of this Agreement and the making of the Loans and the  issuance of
the  Letters  of  Credit  hereunder  and  shall terminate upon indefeasible
payment in full of the Obligations and the expiration or termination of all
Commitments  and  Letters  of  Credit,  notwithstanding  anything  in  this
Agreement or implied by law to the contrary.

     B.   Notwithstanding anything in this  Agreement  or implied by law to
the contrary, the agreements of the Borrower set forth in  subsections 2.6,
2.7,  3.5A,  3.6,  5.2G  (to  the  extent it incorporates the Environmental
Indemnity),   6.8  (to  the  extent  it  incorporates   the   Environmental
Indemnity), 9.2,  9.3  and  9.5  shall  survive  the payment in full of the
Obligations, the cancellation or expiration of the  Letters  of  Credit and
the  reimbursement of any amounts drawn thereunder, and the termination  of
this Agreement.

9.10 AGENT'S DISCRETION; SUCCESSOR AGENTS.

     Whenever  pursuant  to  this  Agreement or any other Loan Document the
Agent exercises any right given to it  to  approve  or  disapprove,  or any
arrangement or term is to be satisfactory to the Agent, the decision of the
Agent  to  approve or disapprove or to decide whether arrangements or terms
are  satisfactory  or  not  satisfactory  shall  (except  as  is  otherwise
specifically  herein provided) be in the sole discretion of the Agent.  The
Borrower acknowledges  and  agrees  that,  notwithstanding anything in this
Agreement to the contrary, certain decisions to be made by the Agent under,
or amendments, supplements or other modification  to, this Agreement may be
subject  to  or  determined by the further decision by  the  Lenders  or  a
percentage of the Lenders.  The Borrower acknowledges that, in the event of
the resignation or  removal  of  Bankers  or a successor Agent hereunder, a
successor  Agent  may  be appointed by the Lenders  and  agrees  that  such
successor Agent shall succeed  to all of the rights and duties of the Agent
under the Loan Documents but shall not be liable for any breach of any Loan
Document by any predecessor Agent.

9.11 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF THE LENDERS' RIGHTS.

     The obligations of the Lenders  hereunder  are  several  and no Lender
shall be responsible for the obligations or Commitment of any other  Lender
hereunder.  Nothing contained herein or in any other Loan Document, and  no
action  taken by the Lenders pursuant hereto or thereto, shall be deemed to
constitute the Lenders as a partnership, an association, a Joint Venture or
any other kind of entity. The amounts payable at any time hereunder to each
Lender shall  be  a separate and independent debt, and each Lender shall be
entitled to protect  and  enforce  its rights arising out of this Agreement
and it shall not be necessary for any  other  Lender  to  be  joined  as an
additional party in any proceeding for such purpose.

9.12 REMEDIES OF THE BORROWER.

     In  the  event  that a claim or adjudication is made that the Agent or
any  Lender  or  their  respective   agents   has   acted  unreasonably  or
unreasonably  delayed  acting  in  any  case  where by law  or  under  this
Agreement, the Notes, the Mortgages or the other Loan Documents, the Agent,
such Lender or such agent, as the case may be,  has  an  obligation  to act
reasonably  or  promptly,  the Borrower agrees that none of the Agent, such
Lender or such agents, shall  be  liable  for any monetary damages, and the
Borrower's sole remedies shall be limited to  commencing  an action seeking
injunctive relief or declaratory judgement.  The parties hereto  agree that
any  action or proceeding to determine whether the Agent or any Lender  has
acted  reasonably  shall  be  determined  by  an action seeking declaratory
judgment.

9.13 MARSHALLING; PAYMENTS SET ASIDE.

     Neither the Agent nor any Lenders shall be  under  any  obligation  to
marshal  any  assets  in favor of the Borrower, any other Loan Party or any
other party or against  or in payment of any or all of the Obligations.  To
the extent that the Borrower  or  any  other  Loan Party makes a payment or
payments to the Lenders or the Agent (or to the  Agent  for  the benefit of
the Lenders), or the Agent or the Lenders enforce any security interests or
the Agent exercises its rights of setoff, and such payment or  payments  or
the  proceeds  of  such  enforcement  or  setoff  or  any  part thereof are
subsequently  invalidated,  declared to be fraudulent or preferential,  set
aside and/or required to be repaid  to  a  trustee,  receiver  or any other
party under any bankruptcy law, any other state or federal law,  common law
or any equitable cause of action, then, to the extent of such recovery, the
obligation  or  part  thereof originally intended to be satisfied, and  all
Liens, rights and remedies  therefor  or  related thereto, shall be revived
and continued in full force and effect as if  such  payment or payments had
not been made or such enforcement or setoff had not occurred.

9.14 MAXIMUM AMOUNT.

     A.   It is the intention of the Borrower and the  Lenders  to  conform
strictly  to  the usury and similar laws relating to interest from time  to
time in force,  and  all  agreements  between  the  Loan  Parties and their
respective Subsidiaries and the Lenders, whether now existing  or hereafter
arising and whether oral or written, are hereby expressly limited  so  that
in  no contingency or event whatsoever, whether by acceleration of maturity
hereof  or  otherwise,  shall  the  amount paid or agreed to be paid in the
aggregate  to  the  Lenders  as interest  (whether  or  not  designated  as
interest,  and including any amount  otherwise  designated  but  deemed  to
constitute interest  by  a  court  of  competent jurisdiction) hereunder or
under the other Loan Documents or in any  other  agreement  given to secure
the  indebtedness of the Borrower to the Lenders, or in any other  document
evidencing,  securing  or  pertaining to the indebtedness evidenced hereby,
exceed the maximum amount permissible  under applicable usury or such other
laws  (the  ``MAXIMUM  AMOUNT'').  If under  any  circumstances  whatsoever
fulfillment of any provision hereof, or any of the other Loan Documents, at
the  time  performance of  such  provision  shall  be  due,  shall  involve
exceeding the  Maximum  Amount,  then,  ipso  facto,  the  obligation to be
fulfilled  shall  be  reduced  to the Maximum Amount.  For the purposes  of
calculating the actual amount of  interest paid and/or payable hereunder in
respect of laws pertaining to usury  or  such  other laws, all sums paid or
agreed  to  be  paid  to  the  holder  hereof for the use,  forbearance  or
detention of the indebtedness of the Borrower evidenced hereby, outstanding
from  time to time shall, to the extent permitted  by  Applicable  Law,  be
amortized, pro-rated, allocated and spread from the date of disbursement of
the  proceeds   of  the  Notes  until  payment  in  full  of  all  of  such
indebtedness, so  that  the  actual  rate  of  interest  on account of such
indebtedness is uniform through the term hereof.  The terms  and provisions
of this subsection shall control and supersede every other provision of all
agreements  between  the  Borrower  or  any  endorser of the Notes and  the
Lenders.

     B.   If  under  any circumstances any Lender  shall  ever  receive  an
amount which would exceed the Maximum Amount, such amount shall be deemed a
payment in reduction of  the  principal  amount  of  the Loans and shall be
treated as a voluntary prepayment under subsection 2.4B(i)  and shall be so
applied  in  accordance  with  subsection 2.4  hereof  or if such excessive
interest exceeds the unpaid balance of the Loans and any other indebtedness
of the Borrower in favor of such Lender, the excess shall be deemed to have
been a payment made by mistake and shall be refunded to the Borrower.

9.15 SEVERABILITY.

     In  case  any provision in or obligation under this Agreement  or  any
Note or any other  Loan Document shall be invalid, illegal or unenforceable
in any jurisdiction  or  under  any  set  of  circumstances,  the validity,
legality and enforceability of the remaining provisions or obligations,  or
of  such  provision  or  obligation  in any other jurisdiction or under any
other set of circumstances, shall not  in  any  way be affected or impaired
thereby.

9.16 HEADINGS.

     Section and subsection headings in this Agreement  are included herein
for convenience of reference only and shall not constitute  a  part of this
Agreement for any other purpose or be given any substantive effect.

9.17 APPLICABLE LAW.

          THIS  AGREEMENT  AND  THE  RIGHTS  AND OBLIGATIONS OF THE PARTIES
HEREUNDER  SHALL  BE GOVERNED BY, AND SHALL BE CONSTRUED  AND  ENFORCED  IN
ACCORDANCE WITH, THE  INTERNAL  LAWS  OF  THE  STATE OF NEW YORK (INCLUDING
WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL  OBLIGATIONS  LAW  OF  THE
STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

9.18 SUCCESSORS AND ASSIGNS.

     This  Agreement  shall  be  binding  upon the parties hereto and their
respective successors and assigns and shall  inure  to  the  benefit of the
parties hereto and the successors and assigns of the Agent and  the Lenders
(it being understood that the Lenders' rights of assignment are subject  to
subsection 9.1).    Neither   CapStar's   and   the  Borrower's  rights  or
obligations hereunder nor any interest therein may be assigned or delegated
by CapStar or the Borrower, as the case may be.

9.19 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.

          ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST  THE BORROWER OR CAPSTAR
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR
ANY OBLIGATIONS THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT  JURISDICTION  IN THE STATE, COUNTY AND CITY  OF  NEW  YORK.   BY
EXECUTING AND DELIVERING THIS  AGREEMENT, EACH OF THE BORROWER AND CAPSTAR,
FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY

          (I)  ACCEPTS  GENERALLY   AND  UNCONDITIONALLY  THE  NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;

         (II)  WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;

        (III)  AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN
     ANY SUCH COURT MAY BE MADE BY REGISTERED  OR  CERTIFIED  MAIL,  RETURN
     RECEIPT  REQUESTED,  TO BORROWER AT ITS ADDRESS PROVIDED IN ACCORDANCE
     WITH SUBSECTION 9.8;

         (IV)  AGREES THAT  SERVICE  AS  PROVIDED  IN CLAUSE (III) ABOVE IS
     SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER  COMPANY  IN  ANY SUCH
     PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE  AND
     BINDING SERVICE IN EVERY RESPECT;

          (V)  AGREES  THAT THE AGENT RETAINS THE RIGHT TO SERVE PROCESS IN
     ANY OTHER MANNER PERMITTED  BY LAW OR TO BRING PROCEEDINGS AGAINST THE
     BORROWER OR CAPSTAR IN THE COURTS OF ANY OTHER JURISDICTION; AND

         (VI)  AGREES THAT THE PROVISIONS  OF THIS SUBSECTION 9.19 RELATING
     TO  JURISDICTION AND VENUE SHALL BE BINDING  AND  ENFORCEABLE  TO  THE
     FULLEST  EXTENT  PERMISSIBLE  UNDER  NEW  YORK GENERAL OBLIGATIONS LAW
     SECTION 5-1402 OR OTHERWISE.

9.20 WAIVER OF JURY TRIAL.

     EACH  OF  THE PARTIES TO THIS AGREEMENT HEREBY  AGREES  TO  WAIVE  ITS
RESPECTIVE RIGHTS  TO  A  JURY  TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT  OR  ANY  OTHER  LOAN DOCUMENT OR ANY
DEALINGS  BETWEEN  THEM  RELATING  TO  THE  SUBJECT  MATTER  OF  THIS  LOAN
TRANSACTION  OR THE LENDER/BORROWER RELATIONSHIP THAT IS BEING  ESTABLISHED
HEREBY AND THEREBY.   The  scope  of  this  waiver  is  intended to be all-
encompassing  of any and all disputes that may be filed in  any  court  and
that relate to  the  subject matter of this transaction, including contract
claims, tort claims, breach  of  duty  claims  and all other common law and
statutory claims.  Each party hereto acknowledges  that  this  waiver  is a
material  inducement  to  enter into a business relationship, that each has
already relied on this waiver in entering into this Agreement and the other
Loan Documents, and that each will continue to rely on this waiver in their
related future dealings.  Each party hereto further warrants and represents
that  it has reviewed this waiver  with  its  legal  counsel  and  that  it
knowingly   and   voluntarily   waives  its  jury  trial  rights  following
consultation with legal counsel.   THIS WAIVER IS IRREVOCABLE, MEANING THAT
IT MAY NOT BE MODIFIED EITHER ORALLY  OR IN WRITING (OTHER THAN BY A MUTUAL
WRITTEN WAIVER SPECIFICALLY REFERRING TO  THIS SUBSECTION 9.20 AND EXECUTED
BY  EACH  OF  THE  PARTIES  HERETO), AND THIS WAIVER  SHALL  APPLY  TO  ANY
SUBSEQUENT  AMENDMENTS, RENEWALS,  SUPPLEMENTS  OR  MODIFICATIONS  TO  THIS
AGREEMENT OR  ANY  OF THE OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS  RELATING  TO  THE  LOANS  MADE  HEREUNDER.   In  the  event  of
litigation, this  Agreement may be filed as a written consent to a trial by
the court.

9.21 COUNTERPARTS; EFFECTIVENESS.

     This Agreement  and  any  amendments, waivers, consents or supplements
hereto  or  in  connection herewith  may  be  executed  in  any  number  of
counterparts and by different parties hereto in separate counterparts, each
of which when so  executed  and  delivered shall be deemed an original, but
all  such counterparts together shall  constitute  but  one  and  the  same
instrument;   signature  pages  may  be  detached  from  multiple  separate
counterparts and  attached  to  a  single counterpart so that all signature
pages are physically attached to the  same  document.  This Agreement shall
become effective upon the execution of a counterpart  hereof by each of the
parties  hereto  and receipt by the Borrower and the Agent  of  written  or
telephonic notification  of  such  execution  and authorization of delivery
thereof.

9.22 MATERIAL INDUCEMENT.

     Each   of   the   Borrower   and   CapStar   acknowledges   that   its
representations,  warranties, covenants and agreements  contained  in  this
Agreement  and  the other  Loan  Documents,  including  its  covenants  and
agreements to pay  Release  Prices, are material inducements to the Lenders
to enter into this Agreement and to make the Loans and issue the Letters of
Credit,  that the Lenders have  already  relied  on  such  representations,
warranties,  covenants  and  agreements in entering into this Agreement and
agreeing to make the Loans (notwithstanding any investigation heretofore or
hereafter made by or on behalf  of  the Lenders), and that the Lenders will
continue  to  rely  on  such  representations,  warranties,  covenants  and
agreements  in  their future dealings  with  the  Borrower.   The  Borrower
understands that the Release Prices are designed to afford to the Lenders a
predictable return  on  their  investment  in  the  Loans, that the Release
Prices  will  be  required  to be paid by the Borrower in  connection  with
voluntary and involuntary prepayments  of the principal amount of the Loans
and reductions in the Commitments  to the extent provided in this Agreement
and that the payment of the Release Prices  in  connection with involuntary
prepayments beyond the Borrower's control (such as upon the occurrence of a
casualty  or  a  Taking)  may be required.  The Borrower  agrees  that  its
representations, warranties,  covenants  and  agreements  contained in this
Agreement  and  the  other  Loan  Documents,  including  its covenants  and
agreements to pay Release Prices, are reasonable in purpose and scope.  The
Borrower  represents and warrants that it has reviewed this  Agreement  and
the other Loan  Documents  with its legal counsel and that it knowingly and
voluntarily is entering into  this  Agreement  and the other Loan Documents
following consultation with legal counsel.

9.23 ENTIRE AGREEMENT.

     This  Agreement  is  evidence  of the indebtedness  incurred  pursuant
hereto and, taken together with all of  the  other  Loan  Documents and all
certificates  and  other documents delivered to the Agent and  the  Lenders
hereunder and thereunder,  embodies the entire agreement and supersedes all
prior agreements, written and  oral, relating to the subject matter hereof.
This Agreement and the other Loan Documents constitute the final expression
of the agreement between the parties  hereto  and  this  Agreement and such
other Loan Document may not be contradicted by evidence of any alleged oral
agreement.

9.24 CONFIDENTIALITY.

     Each  Lender  and  the  Agent,  severally and not jointly,  agrees  to
exercise  commercially  reasonable  efforts  (i)  to  keep  any  non-public
information  delivered  or made available  to  such  Lender  or  the  Agent
pursuant to the Loan Documents,  which  any  Loan  Party  or its authorized
representative  has  identified  as confidential information,  confidential
from any Person other than Persons  employed  by or retained by such Lender
or the Agent or their respective Affiliates who  are  or  are  expected  to
become  engaged  in evaluating, approving, structuring or administering the
Loans, Letters of  Credit  and  other  extensions  of credit or Obligations
hereunder  and  (ii) to advise its employees who receive  such  information
that engaging in  securities  transactions involving the Common Stock while
in the possession of such non-public  information  may  violate  applicable
securities  laws; PROVIDED that nothing herein shall prevent any Lender  or
the Agent from  disclosing  such  information  to  any  bona  fide Eligible
Assignee, transferee or Eligible Participant that has agreed to be bound by
the  provisions of this subsection 9.24 in connection with the contemplated
assignment  or  transfer  of  any  Commitments, Loans, Letters of Credit or
other  extensions  of  credit  or Obligations  hereunder  or  participation
therein  or  as required or requested  by  any  Governmental  Authority  or
representative  thereof  or pursuant to legal process or in connection with
the exercise of any remedy under the Loan Documents.

           [Remainder of page intentionally left blank.]

                                 1

<PAGE>


     IN WITNESS WHEREOF, the  parties  hereto have caused this Agreement to
be duly executed and delivered by their  respective officers thereunto duly
authorized as of the date first written above.

          BORROWER:

                    CAPSTAR MANAGEMENT COMPANY, L.P.

                    By:  CAPSTAR HOTEL COMPANY,
                         its general partner


                         By:
                              Name:
                              Title:


                    Notice Address:

                         CapStar Management Company, L.P.
                         1010 Wisconsin Avenue, N.W. - Suite 650
                         Washington, D.C.  20007
                         Attention: __________


          GUARANTOR:

                    CAPSTAR HOTEL COMPANY




                    By:
                         Name:
                         Title:


                    Notice Address:

                         CapStar Hotel Company
                         1010 Wisconsin Avenue, N.W. - Suite 650
                         Washington, D.C.  20007
                         Attention: __________

                                S-1

<PAGE>


          AGENT:

                    BANKERS TRUST COMPANY,
                    as Agent

                    By:
                         Name:
                         Title:


                    Notice Address:

                         Bankers Trust Company
                         280 Park Avenue, 23W
                         New York, New York 10017
                         Attention:  Garrett Thelander



          LENDERS:

                    BANKERS TRUST COMPANY,
                    as a Lender

                    By:
                         Name:
                         Title:


                    Notice Address:

                         Bankers Trust Company
                         280 Park Avenue, 23W
                         New York, New York 10017
                         Attention:  Garrett Thelander


                                S-2