Document:

<PAGE>   1
                                                                     EXHIBIT 4.3

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                       FELCOR LODGING LIMITED PARTNERSHIP,
                                    as Issuer
                       FELCOR LODGING TRUST INCORPORATED,
                           FELCOR/CSS HOTELS, L.L.C.,
                           FELCOR/LAX HOTELS, L.L.C.,
                           FELCOR/CSS HOLDINGS, L.P.,
                         FELCOR/ST. PAUL HOLDINGS, L.P.,
                           FELCOR/LAX HOLDINGS, L.P.,
                          FELCOR EIGHT HOTELS, L.L.C.,
                       FELCOR HOTEL ASSET COMPANY L.L.C.,
                         FELCOR NEVADA HOLDINGS L.L.C.,
                          FHAC NEVADA HOLDINGS, L.L.C.,
                           FHAC TEXAS HOLDINGS, L.P.,
                       FELCOR OMAHA HOTEL COMPANY, L.L.C.,
                       FELCOR COUNTRY VILLA HOTEL, L.L.C.,
                        FELCOR MOLINE HOTEL, L.L.C., AND
                               FELCOR CANADA CO.,
                                 AS GUARANTORS,

                                       and

                                 SUNTRUST BANK,
                                   as Trustee

                                   ----------

                                    INDENTURE

                         Dated as of September 15, 2000

                                   ----------

                          9 1/2% Senior Notes Due 2008

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                              CROSS-REFERENCE TABLE

<TABLE>
<CAPTION>
TIA Sections                                                                           Indenture Sections
------------                                                                           ------------------

<S>                                                                                  <C>
Section 310(a)(1)........................................................              7.10

           (a)(2)........................................................              7.10

           (b)...........................................................              7.08

Section 313(c)...........................................................              7.06; 10.02

Section 314(a)...........................................................              4.17; 10.02

           (a)(4)........................................................              4.16; 10.02

           (c)(1)........................................................              10.03

           (c)(2)........................................................              10.03

           (e)...........................................................              10.04

Section 315(b)...........................................................              7.05; 10.02

Section 316(a)(1)(A).....................................................              6.05

           (a)(1)(B).....................................................              6.04

           (b)...........................................................              6.07

Section 317(a)(1)........................................................              6.08

           (a)(2)........................................................              6.09

Section 318(a)...........................................................              10.01

           (c)...........................................................              10.01
</TABLE>

    Note: The Cross-Reference Table shall not for any purpose be deemed to be
                            a part of the Indenture.

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<TABLE>
<S>                                                                                                            <C>
                                                      ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE........................................................................1
         SECTION 1.01          Definitions........................................................................1
         SECTION 1.02          Incorporation by Reference of Trust Indenture Act.................................18
         SECTION 1.03          Rules of Construction.............................................................19

                                                      ARTICLE 2

NOTES............................................................................................................19

         SECTION 2.01          Form and Dating...................................................................19
         SECTION 2.02          Restrictive Legends...............................................................20
         SECTION 2.03          Execution, Authentication and Denominations.......................................22
         SECTION 2.04          Registrar and Paying Agent........................................................23
         SECTION 2.05          Paying Agent to Hold Money in Trust...............................................24
         SECTION 2.06          Transfer and Exchange.............................................................24
         SECTION 2.07          Book-Entry Provisions for Global Notes............................................25
         SECTION 2.08          Special Transfer Provisions.......................................................26
         SECTION 2.09          Replacement Notes.................................................................29
         SECTION 2.10          Outstanding Notes.................................................................30
         SECTION 2.11          Temporary Notes...................................................................30
         SECTION 2.12          Cancellation......................................................................30
         SECTION 2.13          CUSIP Numbers.....................................................................31
         SECTION 2.14          Defaulted Interest................................................................31
         SECTION 2.15          Issuance of Additional Notes......................................................31

                                                      ARTICLE 3

REDEMPTION.......................................................................................................31
         SECTION 3.01          Optional Redemption...............................................................31
         SECTION 3.02          Notices to Trustee................................................................32
         SECTION 3.03          Selection of Notes to Be Redeemed.................................................32
         SECTION 3.04          Notice of Redemption..............................................................32
         SECTION 3.05          Effect of Notice of Redemption....................................................33
         SECTION 3.06          Deposit of Redemption Price.......................................................33
         SECTION 3.07          Payment of Notes Called for Redemption............................................33
         SECTION 3.08          Notes Redeemed in Part............................................................34

                                                      ARTICLE 4

COVENANTS........................................................................................................34
         SECTION 4.01          Payment of Notes..................................................................34
         SECTION 4.02          Maintenance of Office or Agency...................................................34
         SECTION 4.03          Limitation on Indebtedness........................................................35
         SECTION 4.04          Limitation on Restricted Payments.................................................37
         SECTION 4.05          Limitation on Dividend and Other Payment Restrictions Affecting
                               Restricted Subsidiaries...........................................................40
</TABLE>

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<TABLE>

<S>                                                                                                           <C>

         SECTION 4.06          Limitation on the Issuance and Sale of Capital Stock of
                               Restricted Subsidiaries...........................................................41
         SECTION 4.07          Limitation on Issuances of Guarantees by Restricted Subsidiaries..................41
         SECTION 4.08          Limitation on Transactions with Affiliates........................................42
         SECTION 4.09          Limitation on Liens...............................................................43
         SECTION 4.10          Limitation on Asset Sales.........................................................43
         SECTION 4.11          Repurchase of Notes upon a Change of Control......................................44
         SECTION 4.12          Existence.........................................................................44
         SECTION 4.13          Payment of Taxes and Other Claims.................................................44
         SECTION 4.14          Maintenance of Properties and Insurance...........................................44
         SECTION 4.15          Notice of Defaults................................................................45
         SECTION 4.16          Compliance Certificates...........................................................45
         SECTION 4.17          Commission Reports and Reports to Holders.........................................46
         SECTION 4.18          Waiver of Stay, Extension or Usury Laws...........................................46
         SECTION 4.19          Limitation on Sale-Leaseback Transactions.........................................46
         SECTION 4.20          Maintenance of Total Unencumbered Assets..........................................47
         SECTION 4.21          Investment Grade Rating...........................................................47

                                                      ARTICLE 5

SUCCESSOR CORPORATION............................................................................................47
         SECTION 5.01          When FelCor or FelCor LP May Merge, Etc...........................................47
         SECTION 5.02          Successor Substituted.............................................................47

                                                      ARTICLE 6

DEFAULT AND REMEDIES.............................................................................................48
         SECTION 6.01          Events of Default.................................................................48
         SECTION 6.02          Acceleration......................................................................49
         SECTION 6.03          Other Remedies....................................................................49
         SECTION 6.04          Waiver of Past Defaults...........................................................50
         SECTION 6.05          Control by Majority...............................................................50
         SECTION 6.06          Limitation on Suits...............................................................50
         SECTION 6.07          Rights of Holders to Receive Payment..............................................51
         SECTION 6.08          Collection Suit by Trustee........................................................51
         SECTION 6.09          Trustee May File Proofs of Claim..................................................51
         SECTION 6.10          Priorities........................................................................51
         SECTION 6.11          Undertaking for Costs.............................................................52
         SECTION 6.12          Restoration of Rights and Remedies................................................52
         SECTION 6.13          Rights and Remedies Cumulative....................................................52
         SECTION 6.14          Delay or Omission Not Waiver......................................................52

                                                      ARTICLE 7

TRUSTEE..........................................................................................................53
         SECTION 7.01          General...........................................................................53
</TABLE>

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<TABLE>

<S>                                                                                                             <C>
         SECTION 7.02          Certain Rights of Trustee.........................................................53
         SECTION 7.03          Individual Rights of Trustee......................................................54
         SECTION 7.04          Trustee's Disclaimer..............................................................54
         SECTION 7.05          Notice of Default.................................................................54
         SECTION 7.06          Reports by Trustee to Holders.....................................................54
         SECTION 7.07          Compensation and Indemnity........................................................54
         SECTION 7.08          Replacement of Trustee............................................................56
         SECTION 7.09          Successor Trustee by Merger, Etc..................................................56
         SECTION 7.10          Eligibility.......................................................................56
         SECTION 7.11          Money Held in Trust...............................................................57
         SECTION 7.12          Withholding Taxes.................................................................57

                                                      ARTICLE 8

DISCHARGE OF INDENTURE...........................................................................................57
         SECTION 8.01          Termination of Company's Obligations..............................................57
         SECTION 8.02          Defeasance and Discharge of Indenture.............................................58
         SECTION 8.03          Defeasance of Certain Obligations.................................................60
         SECTION 8.04          Application of Trust Money........................................................61
         SECTION 8.05          Repayment to Company..............................................................61
         SECTION 8.06          Reinstatement.....................................................................62

                                                      ARTICLE 9

AMENDMENTS, SUPPLEMENTS AND WAIVERS..............................................................................62
         SECTION 9.01          Without Consent of Holders........................................................62
         SECTION 9.02          With Consent of Holders...........................................................63
         SECTION 9.03          Revocation and Effect of Consent..................................................64
         SECTION 9.04          Notation on or Exchange of Notes..................................................64
         SECTION 9.05          Trustee to Sign Amendments, Etc...................................................64
         SECTION 9.06          Conformity with Trust Indenture Act...............................................65

                                                     ARTICLE 10

MISCELLANEOUS....................................................................................................65
         SECTION 10.01         Trust Indenture Act of 1939.......................................................65
         SECTION 10.02         Notices...........................................................................65
         SECTION 10.03         Certificate and Opinion as to Conditions Precedent................................66
         SECTION 10.04         Statements Required in Certificate or Opinion.....................................66
         SECTION 10.05         Rules by Trustee, Paying Agent or Registrar.......................................66
         SECTION 10.06         Payment Date Other Than a Business Day............................................67
         SECTION 10.07         Governing Law.....................................................................67
         SECTION 10.08         No Adverse Interpretation of Other Agreements.....................................67
         SECTION 10.09         No Recourse Against Others........................................................67
         SECTION 10.10         Successors........................................................................67
         SECTION 10.11         Duplicate Originals...............................................................67
         SECTION 10.12         Separability......................................................................67
</TABLE>

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<TABLE>

<S>                                                                                                           <C>
         SECTION 10.13         Table of Contents, Headings, Etc..................................................68

                                                     ARTICLE 11

GUARANTEE OF THE NOTES...........................................................................................68
         SECTION 11.01         Guarantee.........................................................................68
         SECTION 11.02         Obligations of Guarantor Unconditional............................................69
         SECTION 11.03         Notice to Trustee.................................................................69
         SECTION 11.04         This Article Not to Prevent Events of Default.....................................69
         SECTION 11.05         Trustee's Compensation Not Prejudiced.............................................69
         SECTION 11.06         Payments May Be Paid Prior to Dissolution.........................................69
         SECTION 11.07         Release of Guarantee..............................................................69
</TABLE>

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<PAGE>   7

         INDENTURE, dated as of September 15, 2000, among FelCor Lodging Limited
Partnership ("FelCor LP"), a Delaware limited partnership, FelCor Lodging Trust
Incorporated ("FelCor"), a Maryland corporation, FelCor/CSS Hotels, L.L.C., a
Delaware limited liability company, FelCor/LAX Hotels, L.L.C., a Delaware
limited liability company, FelCor/CSS Holdings, L.P., a Delaware limited
partnership, FelCor/St. Paul Holdings, L.P., a Delaware limited partnership,
FelCor/LAX Holdings, L.P., a Delaware limited partnership, FelCor Eight Hotels,
L.L.C., a Delaware limited liability company, FelCor Hotel Asset Company,
L.L.C., a Delaware limited liability company, FelCor Nevada Holdings L.L.C., a
Nevada limited liability company, FHAC Nevada Holdings, L.L.C., a Nevada limited
liability company, FHAC Texas Holdings, L.P., a Texas limited partnership,
FelCor Omaha Hotel Company, L.L.C., a Delaware limited liability company, FelCor
Country Villa Hotel, L.L.C., a Delaware limited liability company, FelCor Moline
Hotel, L.L.C., a Delaware limited liability company, FelCor Canada Co., a Nova
Scotia unlimited liability company, and SunTrust Bank, a Georgia banking
corporation (the "Trustee").

                               RECITALS OF COMPANY

         FelCor LP has duly authorized the execution and delivery of this
Indenture to provide for the issuance initially of up to $400,000,000 aggregate
principal amount at maturity of FelCor LP's 9 1/2% Senior Notes Due 2008 (the
"Notes") issuable as provided in this Indenture. Each Guarantor has duly
authorized the execution and delivery of this Indenture to provide for a
guarantee of the Notes and of certain of FelCor LP's obligations hereunder. All
things necessary to make this Indenture a valid agreement of FelCor LP and the
Guarantors in accordance with its terms, have been done, and FelCor LP and the
Guarantors have done all things necessary to make the Notes, when executed by
FelCor LP and authenticated and delivered by the Trustee hereunder and duly
issued by FelCor LP, the valid obligations of FelCor LP and the Guarantors as
hereinafter provided.

         This Indenture is subject to, and shall be governed by, the provisions
of the Trust Indenture Act of 1939, as amended, that are required to be a part
of and to govern indentures qualified under the Trust Indenture Act of 1939, as
amended.

                      AND THIS INDENTURE FURTHER WITNESSETH

         For and in consideration of the premises and the purchase of the Notes
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders, as follows:

                                   ARTICLE 1.
                   DEFINITIONS AND INCORPORATION BY REFERENCE

         SECTION 1.01 DEFINITIONS.

         "Acquired Indebtedness" means Indebtedness of a Person existing at the
time such Person becomes a Restricted Subsidiary or assumed in connection with
an Asset Acquisition from such Person by a Restricted Subsidiary and not
incurred by such Person in connection with, or in anticipation of, such Person
becoming a Restricted Subsidiary or such Asset Acquisition; provided that
Indebtedness of such Person which is redeemed, defeased, retired or otherwise

<PAGE>   8

repaid at the time of or immediately upon consummation of the transactions by
which such Person becomes a Restricted Subsidiary or such Asset Acquisition
shall not be Acquired Indebtedness.

         "Adjusted Consolidated Net Income" means, for any period, the aggregate
net income (or loss) of FelCor, FelCor LP and their respective Restricted
Subsidiaries for such period determined on a consolidated basis in conformity
with GAAP plus the minority interest in FelCor LP, if applicable; provided that
the following items shall be excluded in computing Adjusted Consolidated Net
Income (without duplication): (i) the net income of any Person (other than
FelCor LP, FelCor or a Restricted Subsidiary), except to the extent of the
amount of dividends or other distributions actually paid to FelCor LP, FelCor or
any of their respective Restricted Subsidiaries by such Person during such
period; (ii) the net income of any Restricted Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by such Restricted
Subsidiary of such net income is not at the time permitted by the operation of
the terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to such Restricted
Subsidiary; (iii) any gains or losses (on an after-tax basis) attributable to
Asset Sales; (iv) for so long as the Notes are not rated Investment Grade, any
amount paid or accrued as dividends on Preferred Stock of FelCor LP, FelCor or
any Restricted Subsidiary owned by Persons other than FelCor or FelCor LP and
any of their respective Restricted Subsidiaries; and (v) all extraordinary gains
and extraordinary losses.

         "Adjusted Consolidated Net Tangible Assets" means the total amount of
assets of FelCor LP, FelCor and their respective Restricted Subsidiaries (less
applicable depreciation, amortization and other valuation reserves), except to
the extent resulting from write-ups of capital assets (excluding write-ups in
connection with accounting for acquisitions in conformity with GAAP), after
deducting therefrom (i) all current liabilities of FelCor LP, FelCor and their
respective Restricted Subsidiaries (excluding intercompany items) and (ii) all
goodwill, trade names, trademarks, patents, unamortized debt discount and
expense and other like intangibles, all as set forth on the most recent
quarterly or annual consolidated balance sheet of FelCor LP or FelCor and their
respective Restricted Subsidiaries, prepared in conformity with GAAP and filed
with the Commission or provided to the Trustee pursuant to Section 4.17.

         "Adjusted Total Assets" means, for any Person, the sum of (i) Total
Assets for such Person as of the end of the calendar quarter preceding the
Transaction Date as set forth on the most recent quarterly or annual
consolidated balance sheet of FelCor LP or FelCor and their respective
Restricted Subsidiaries, prepared in conformity with GAAP and filed with the
Commission or provided to the Trustee pursuant to Section 4.17 and (ii) any
increase in Total Assets following the end of such quarter including, without
limitation, any increase in Total Assets resulting from the application of the
proceeds of any additional Indebtedness.

         "Affiliate" means, as applied to any Person, any other Person directly
or indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. For 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 such Person, whether through the
ownership of voting securities, by contract or otherwise.

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<PAGE>   9

         "Agent" means any Registrar, Paying Agent, authenticating agent or
co-Registrar.

         "Agent Members" has the meaning provided in Section 2.07(a).

         "Asset Acquisition" means (i) an investment by FelCor LP or FelCor or
any of their respective Restricted Subsidiaries in any other Person pursuant to
which such Person shall become a Restricted Subsidiary or shall be merged into
or consolidated with FelCor LP or FelCor or any of their respective Restricted
Subsidiaries; provided that such Person's primary business is related,
ancillary, incidental or complementary to the businesses of FelCor LP or FelCor
or any of their respective Restricted Subsidiaries on the date of such
investment or (ii) an acquisition by FelCor LP or FelCor or any of their
respective Restricted Subsidiaries from any other Person that constitutes
substantially all of a division or line of business, or one or more hotel
properties, of such Person; provided that the property and assets acquired are
related, ancillary, incidental or complementary to the businesses of FelCor LP
or FelCor or any of their respective Restricted Subsidiaries on the date of such
acquisition.

         "Asset Disposition" means the sale or other disposition by FelCor LP or
FelCor or any of their respective Restricted Subsidiaries (other than to FelCor
LP, FelCor or another Restricted Subsidiary) of (i) all or substantially all of
the Capital Stock of any Restricted Subsidiary or (ii) all or substantially all
of the assets that constitute a division or line of business, or one or more
hotel properties, of FelCor LP or FelCor or any of their respective Restricted
Subsidiaries.

         "Asset Sale" means any sale, transfer or other disposition (including
by way of merger, consolidation or sale-leaseback transaction) in one
transaction or a series of related transactions by FelCor LP or FelCor or any of
their Restricted Subsidiaries to any Person other than FelCor LP or FelCor or
any of their respective Restricted Subsidiaries of (i) all or any of the Capital
Stock of any Restricted Subsidiary other than sales permitted under clause (iv)
of Section 4.06, (ii) all or substantially all of the property and assets of an
operating unit or business of FelCor LP or FelCor or any of their respective
Restricted Subsidiaries or (iii) any other property and assets of FelCor LP or
FelCor or any of their respective Restricted Subsidiaries outside the ordinary
course of business of FelCor LP or FelCor or such Restricted Subsidiary and, in
each case, that is not governed by the provisions of this Indenture applicable
to mergers, consolidations and sales of assets of FelCor LP and FelCor; provided
that "Asset Sale" shall not include (a) sales or other dispositions of
inventory, receivables and other current assets, (b) sales, transfers or other
dispositions of assets with a fair market value not in excess of $1 million in
any transaction or series of related transactions or (c) sales or other
dispositions of assets for consideration at least equal to the fair market value
of the assets sold or disposed of, to the extent that the consideration received
would satisfy clause (i)(B) of the second sentence of Section 4.10.

         "Average Life" means at any date of determination with respect to any
debt security, the quotient obtained by dividing (i) the sum of the products of
(a) the number of years from such date of determination to the dates of each
successive scheduled principal payment of such debt security and (b) the amount
of such principal payment by (ii) the sum of all such principal payments.

         "Board of Directors" means (i) with respect to FelCor the Board of
Directors of FelCor, (ii) with respect to FelCor LP, the Board of Directors of
its general partner, and (iii) with respect

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to the Subsidiary Guarantors, the board of directors of its general partner or
manager, as the case may be, or, in each case, any committee of such Board of
Directors duly authorized to act under this Indenture.

         "Board Resolution" means a copy of a resolution, certified by the
Secretary of such Person to have been duly adopted by the Board of Directors and
to be in full force and effect on the date of such certification, and delivered
to the Trustee.

         "Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in The City of New York, or in the city of the Corporate
Trust Office of the Trustee, are authorized by law to close.

         "Capital Stock" means, with respect to any Person, any and all shares,
interests, participation or other equivalents (however designated, whether
voting or non-voting), including partnership interests, whether general or
limited, in the equity of such Person, whether outstanding on the Closing Date
or issued thereafter, including, without limitation, all Common Stock, Preferred
Stock and Units.

         "Capitalized Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) of which the discounted present value
of the rental obligations of such Person as lessee, in conformity with GAAP, is
required to be capitalized on the balance sheet of such Person.

         "Capitalized Lease Obligations" means the discounted present value of
the rental obligations under a Capitalized Lease as reflected on the balance
sheet of such Person in accordance with GAAP.

         "Change of Control" means such time as (i) a "person" or "group"
(within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act), becomes
the ultimate "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act) of more than 35% of the total voting power of the Voting Stock of FelCor
or, other than by FelCor, of FelCor LP on a fully diluted basis; (ii)
individuals who on the Closing Date constitute the Board of Directors of FelCor
(together with any new or replacement directors whose election by the Board of
Directors or whose nomination by the Board of Directors for election by FelCor's
shareholders was approved by a vote of at least a majority of the members of the
Board of Directors then still in office who either were members of the Board of
Directors on the Closing Date or whose election or nomination for election was
so approved) cease for any reason to constitute a majority of the members of the
Board of Directors then in office.

         "Closing Date" means the date on which the Notes are first issued under
this Indenture.

         "Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act or, if at any time after the
execution of this Indenture such Commission is not existing and performing the
duties now assigned to it under the TIA, then the body performing such duties at
such time.

         "Common Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting), which

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<PAGE>   11

have no preference on liquidation or with respect to distributions over any
other class of Capital Stock, including partnership interests, whether general
or limited, of such Person's equity, whether outstanding on the Closing Date or
issued thereafter, including, without limitation, all series and classes of
common stock.

         "Company Order" means a written request or order signed in the name of
a Person (i) by its Chairman, a Vice Chairman, its President, a Vice President,
manager or similar officer of its general partner and (ii) by its Treasurer, an
Assistant Treasurer, its Secretary or an Assistant Secretary, manager or similar
officer of its general partner and delivered to the Trustee; provided, however,
that such written request or order may be signed by any two of the officers or
directors listed in clause (i) above in lieu of being signed by one of such
officers or directors listed in such clause (i) and one of the officers listed
in clause (ii) above.

         "Consolidated EBITDA" means, for any period, Adjusted Consolidated Net
Income for such period plus, to the extent such amount was deducted in
calculating such Adjusted Consolidated Net Income, (i) Consolidated Interest
Expense, (ii) income taxes (other than income taxes (either positive or
negative) attributable to extraordinary and non-recurring gains or losses or
sales of assets), (iii) depreciation expense, (iv) amortization expense and (v)
all other non-cash items reducing Adjusted Consolidated Net Income (other than
items that will require cash payments and for which an accrual or reserve is, or
is required by GAAP to be, made), less all non-cash items increasing Adjusted
Consolidated Net Income, all as determined on a consolidated basis for FelCor
LP, FelCor and their respective Restricted Subsidiaries in conformity with GAAP;
provided that, if any Restricted Subsidiary is not a Wholly Owned Restricted
Subsidiary, Consolidated EBITDA shall be reduced (to the extent not otherwise
reduced in accordance with GAAP) by an amount equal to (A) the amount of the
Adjusted Consolidated Net Income attributable to such Restricted Subsidiary
multiplied by (B) the percentage ownership interest in the income of such
Restricted Subsidiary not owned on the last day of such period by FelCor LP or
FelCor or any of their respective Restricted Subsidiaries.

         "Consolidated Interest Expense" means, for any period, without
duplication, the aggregate amount of interest expense in respect of Indebtedness
(including, without limitation, amortization of original issue discount on any
Indebtedness and the interest portion of any deferred payment obligation,
calculated in accordance with GAAP; all commissions, discounts and other fees
and expenses owed with respect to letters of credit and bankers' acceptance
financing; the net costs associated with Interest Rate Agreements and
Indebtedness that is Guaranteed or secured by assets of FelCor LP, FelCor or any
of their respective Restricted Subsidiaries and all but the principal component
of rentals in respect of Capitalized Lease Obligations paid, accrued or
scheduled to be paid or to be accrued by FelCor LP, FelCor and their respective
Restricted Subsidiaries) during such period, all as determined on a consolidated
basis (without taking into account Unrestricted Subsidiaries) in conformity with
GAAP; excluding (i) the amount of such interest expense of any Restricted
Subsidiary if the net income of such Restricted Subsidiary is excluded in the
calculation of Adjusted Consolidated Net Income pursuant to clause (ii) of the
definition thereof (but only in the same proportion as the net income of such
Restricted Subsidiary is excluded from the calculation of Adjusted Consolidated
Net Income pursuant to clause (ii) of the definition thereof) and (ii) any
premiums, fees and expenses (and any amortization thereof) payable in connection
with the offering of the Notes or paid in connection with any other Indebtedness
outstanding on June 30, 2000, all as determined

                                       5
<PAGE>   12

on a consolidated basis (without taking into account Unrestricted Subsidiaries)
in conformity with GAAP.

         "Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date of this Indenture,
located at 25 Park Place, 24th Floor, Atlanta, Georgia 30303-2900, Attention:
Corporate Trust Administration.

         "Currency Agreement" means any foreign exchange contract, currency swap
agreement or other similar agreement or arrangement.

         "Default" means any event that is, or after notice or passage of time
or both would be, an Event of Default.

         "Depositary" shall mean The Depository Trust Company, its nominees, and
their respective successors.

         "Disqualified Stock" means any class or series of Capital Stock of any
Person that by its terms or otherwise is (i) required to be redeemed prior to
the Stated Maturity of the Notes, (ii) redeemable at the option of the holder of
such class or series of Capital Stock, other than Units, at any time prior to
the Stated Maturity of the Notes or (iii) convertible into or exchangeable for
Capital Stock referred to in clause (i) or (ii) above or Indebtedness having a
scheduled maturity prior to the Stated Maturity of the Notes; provided that any
Capital Stock that would not constitute Disqualified Stock but for provisions
thereof giving holders thereof the right to require such Person to repurchase or
redeem such Capital Stock upon the occurrence of an "asset sale" or "change of
control" occurring prior to the Stated Maturity of the Notes shall not
constitute Disqualified Stock if the "asset sale" or "change of control"
provisions applicable to such Capital Stock are no more favorable to the holders
of such Capital Stock than the provisions contained in Sections 4.10 and 4.11
and such Capital Stock specifically provides that such Person will not
repurchase or redeem any such stock pursuant to such provision prior to FelCor
LP's repurchase of such Notes as are required to be repurchased pursuant to
Sections 4.10 and 4.11.

         "DJONT" means DJONT Operations, L.L.C., a Delaware limited liability
company.

         "Equity Offering" means a public or private offering of Capital Stock
(other than Disqualified Stock) of FelCor or FelCor LP; provided that the
proceeds received by FelCor or FelCor LP directly or indirectly from such
offering are not less than $50,000,000.

         "Event of Default" has the meaning provided in Section 6.01.

         "Excess Proceeds" has the meaning provided in Section 4.10.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

         "Exchange Notes" means any securities of FelCor LP containing terms
identical to the Notes (except that such Exchange Notes shall be registered
under the Securities Act) that are issued and exchanged for such Notes pursuant
to the Registration Rights Agreement (or, with respect to Notes issued after the
Closing Date, pursuant to a registration rights agreement with

                                       6
<PAGE>   13

substantially the same terms and conditions as the Registration Rights
Agreement) and this Indenture.

         "Existing Notes" means the 7 3/8% Senior Notes due 2004 issued in the
initial aggregate principal amount of $175,000,000 and the 7 5/8% Senior Notes
due 2007 issued in the initial aggregate principal amount of $125,000,000.

         "fair market value" means the price that would be paid in an
arm's-length transaction between an informed and willing seller under no
compulsion to sell and an informed and willing buyer under no compulsion to buy,
as determined in good faith by the Board of Directors, whose determination shall
be conclusive if evidenced by a Board Resolution.

         "Funds From Operations" for any period means the consolidated net
income of FelCor LP, FelCor and their respective Restricted Subsidiaries for
such period in conformity with GAAP excluding gains or losses from debt
restructurings which would be extraordinary items in accordance with GAAP and
sales of depreciable operating property, plus depreciation of real property
(including furniture and equipment) and after adjustments for unconsolidated
partnerships and joint ventures plus the minority interest in FelCor LP, if
applicable; provided that for purposes of the payment of any dividend or
distribution by FelCor LP or FelCor, "Funds From Operations" shall be equal to
$80 million plus the amount thereof computed for the period commencing with the
first day of the fiscal quarter in which the Closing Date occurs and ending on
the last day of the last fiscal quarter preceding the payment of such dividend
or distribution.

         "GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Closing Date, including, without
limitation, those set forth in the 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 or in
such other statements by such other entity as approved by a significant segment
of the accounting profession. All ratios and computations contained or referred
to in this Indenture shall be computed in conformity with GAAP applied on a
consistent basis, except that calculations made for purposes of determining
compliance with the terms of the covenants and with other provisions of this
Indenture shall be made without giving effect to (i) the amortization of any
expenses incurred in connection with the offering of the Notes and (ii) except
as otherwise provided, the amortization of any amounts required or permitted by
Accounting Principles Board Opinion Nos. 16 and 17.

         "Global Notes" has the meaning provided in Section 2.01.

         "Government Securities" means direct obligations of, obligations
guaranteed by, or participations in pools consisting solely of obligations of or
obligations guaranteed by, the United States of America for the payment of which
obligations or guarantee the full faith and credit of the United States of
America is pledged and which are not callable or redeemable at the option of the
issuer thereof.

         "Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other Person
and, without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to

                                       7
<PAGE>   14

purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness of such other Person (whether arising by virtue of partnership
arrangements, or by agreements to keep-well, to purchase assets, goods,
securities or services (unless such purchase arrangements are on arm's-length
terms and are entered into in the ordinary course of business), to take-or-pay,
or to maintain financial statement conditions or otherwise) or (ii) entered into
for purposes of assuring in any other manner the obligee of such Indebtedness of
the payment thereof or to protect such obligee against loss in respect thereof
(in whole or in part); provided that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of business. The
term "Guarantee" used as a verb has a corresponding meaning.

         "Guarantors" means FelCor and the Subsidiary Guarantors, collectively.

         "Holder" or "Noteholder" means the registered holder of any Note.

         "Incur" means, with respect to any Indebtedness, to incur, create,
issue, assume, Guarantee or otherwise become liable for or with respect to, or
become responsible for, the payment of, contingently or otherwise, such
Indebtedness, including an "Incurrence" of Acquired Indebtedness; provided that
neither the accrual of interest nor the accretion of original issue discount
shall be considered an Incurrence of Indebtedness.

         "Indebtedness" means, with respect to any Person at any date of
determination (without duplication), (i) all indebtedness of such Person for
borrowed money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) the face amount of letters
of credit or other similar instruments (excluding obligations with respect to
letters of credit (including trade letters of credit) securing obligations
(other than obligations described in (i) or (ii) above or (v), (vi) or (vii)
below) entered into in the ordinary course of business of such Person to the
extent such letters of credit are not drawn upon or, if drawn upon, to the
extent such drawing is reimbursed no later than the third Business Day following
receipt by such Person of a demand for reimbursement), (iv) all unconditional
obligations of such Person to pay the deferred and unpaid purchase price of
property or services, which purchase price is due more than six months after the
date of placing such property in service or taking delivery and title thereto or
the completion of such services, except Trade Payables, (v) all Capitalized
Lease Obligations, (vi) all Indebtedness of other Persons secured by a Lien on
any asset of such Person, whether or not such Indebtedness is assumed by such
Person; provided that the amount of such Indebtedness shall be the lesser of (A)
the fair market value of such asset at such date of determination and (B) the
amount of such Indebtedness, (vii) all Indebtedness of other Persons Guaranteed
by such Person to the extent such Indebtedness is Guaranteed by such Person and
(viii) to the extent not otherwise included in this definition or the definition
of Consolidated Interest Expense, obligations under Currency Agreements and
Interest Rate Agreements. The amount of Indebtedness of any Person at any date
shall be the outstanding balance at such date of all unconditional obligations
of the type described above and, with respect to obligations under any
Guarantee, the maximum liability upon the occurrence of the contingency giving
rise to the obligation; provided that (A) the amount outstanding at any time of
any Indebtedness issued with original issue discount shall be deemed to be the
face amount with respect to such Indebtedness less the remaining unamortized
portion of the original issue discount of such Indebtedness at the date of
determination in conformity with GAAP, and (B) Indebtedness shall not include
any liability for federal, state, local or other taxes.

                                       8
<PAGE>   15

         "Indenture" means this Indenture as originally executed or as it may be
amended or supplemented from time to time by one or more indentures supplemental
to this Indenture entered into pursuant to the applicable provisions of this
Indenture.

         "Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.

         "Interest Coverage Ratio" means, on any Transaction Date, the ratio of
(i) the aggregate amount of Consolidated EBITDA for the then most recent four
fiscal quarters prior to such Transaction Date for which reports have been filed
with the Commission or provided to the Trustee pursuant to Section 4.17 ("Four
Quarter Period") to (ii) the aggregate Consolidated Interest Expense during such
Four Quarter Period. In making the foregoing calculation, (A) pro forma effect
shall be given to any Indebtedness Incurred or repaid (other than in connection
with an Asset Acquisition or Asset Disposition) during the period ("Reference
Period") commencing on the first day of the Four Quarter Period and ending on
the Transaction Date (other than Indebtedness Incurred or repaid under a
revolving credit or similar arrangement to the extent of the commitment
thereunder (or under any predecessor revolving credit or similar arrangement) in
effect on the last day of such Four Quarter Period unless any portion of such
Indebtedness is projected, in the reasonable judgment of the senior management
of FelCor LP or FelCor (as evidenced by an Officer's Certificate), to remain
outstanding for a period in excess of 12 months from the date of the Incurrence
thereof), in each case as if such Indebtedness had been Incurred or repaid on
the first day of such Reference Period; (B) Consolidated Interest Expense
attributable to interest on any Indebtedness (whether existing or being
Incurred) computed on a pro forma basis and bearing a floating interest rate
shall be computed as if the rate in effect on the Transaction Date (taking into
account any Interest Rate Agreement applicable to such Indebtedness if such
Interest Rate Agreement has a remaining term in excess of 12 months or, if
shorter, at least equal to the remaining term of such Indebtedness) had been the
applicable rate for the entire period; (C) pro forma effect shall be given to
Asset Dispositions and Asset Acquisitions (including giving pro forma effect to
the application of proceeds of any Asset Disposition and any Indebtedness
Incurred or repaid in connection with any such Asset Acquisitions or Asset
Dispositions) that occur during such Reference Period but subsequent to the end
of the related Four Quarter Period as if they had occurred and such proceeds had
been applied on the first day of such Reference Period; and (D) pro forma effect
shall be given to asset dispositions and asset acquisitions (including giving
pro forma effect to the application of proceeds of any asset disposition and any
Indebtedness Incurred or repaid in connection with any such asset acquisitions
or asset dispositions) that have been made by any Person that has become a
Restricted Subsidiary or has been merged with or into FelCor LP or FelCor or any
of their respective Restricted Subsidiaries during such Reference Period but
subsequent to the end of the related Four Quarter Period and that would have
constituted Asset Dispositions or Asset Acquisitions during such Reference
Period but subsequent to the end of the related Four Quarter Period had such
transactions occurred when such Person was a Restricted Subsidiary as if such
asset dispositions or asset acquisitions were Asset Dispositions or Asset
Acquisitions and had occurred on the first day of such Reference Period;
provided that to the extent that clause (C) or (D) of this sentence requires
that pro forma effect be given to an Asset Acquisition or Asset Disposition,
such pro forma calculation shall be based upon the four full fiscal quarters
immediately preceding the Transaction Date of the Person, or division or line of
business, or one

                                       9
<PAGE>   16

or more hotel properties, of the Person that is acquired or disposed of to the
extent that such financial information is available.

         "Interest Payment Date" means each semiannual interest payment date on
March 15 and September 15, of each year, commencing March 15, 2001.

         "Interest Rate Agreement" means any interest rate protection agreement,
interest rate future agreement, interest rate option agreement, interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedge agreement, option or future contract or other similar
agreement or arrangement with respect to interest rates.

         "Investment" in any Person means any direct or indirect advance, loan
or other extension of credit (including without limitation by way of Guarantee
or similar arrangement, but excluding advances to customers in the ordinary
course of business that are, in conformity with GAAP, recorded as accounts
receivable on the consolidated balance sheet of FelCor LP, FelCor and their
respective Restricted Subsidiaries) or capital contribution to (by means of any
transfer of cash or other property (tangible or intangible) to others or any
payment for property or services solely for the account or use of others, or
otherwise), or any purchase or acquisition of Capital Stock, bonds, notes,
debentures or other similar instruments issued by, such Person and shall include
(i) the designation of a Restricted Subsidiary as an Unrestricted Subsidiary and
(ii) the fair market value of the Capital Stock (or any other Investment), held
by FelCor LP or FelCor or any of their respective Restricted Subsidiaries of (or
in) any Person that has ceased to be a Restricted Subsidiary, including without
limitation, by reason of any transaction permitted by clause (iii) of Section
4.06; provided that the fair market value of the Investment remaining in any
Person that has ceased to be a Restricted Subsidiary shall be deemed not to
exceed the aggregate amount of Investments previously made in such Person valued
at the time such Investments were made, less the net reduction of such
Investments. For purposes of the definition of "Unrestricted Subsidiary" and
Section 4.04, (i) "Investment" shall include the fair market value of the assets
(net of liabilities (other than liabilities to FelCor LP or FelCor or any of
their respective Restricted Subsidiaries)) of any Restricted Subsidiary at the
time such Restricted Subsidiary is designated an Unrestricted Subsidiary, (ii)
the fair market value of the assets (net of liabilities (other than liabilities
to FelCor LP or FelCor or any of their respective Restricted Subsidiaries)) of
any Unrestricted Subsidiary at the time that such Unrestricted Subsidiary is
designated a Restricted Subsidiary shall be considered a reduction in
outstanding Investments and (iii) any property transferred to or from an
Unrestricted Subsidiary shall be valued at its fair market value at the time of
such transfer.

         "Investment Grade" means a rating of the Notes by both S&P and Moody's,
each such rating being in one of such agency's four highest generic rating
categories that signifies investment grade (i.e. BBB- (or the equivalent) or
higher by S&P and Baa3 (or the equivalent) or higher by Moody's); provided, in
each case, such ratings are publicly available; provided, further, that in the
event Moody's or S&P is no longer in existence for purposes of determining
whether the Notes are rated "Investment Grade," such organization may be
replaced by a nationally recognized statistical rating organization (as defined
in Rule 436 under the Securities Act) designated by FelCor LP and FelCor, notice
of which shall be given to a Responsible Officer of the Trustee.

                                       10
<PAGE>   17

         "Lien" means any mortgage, pledge, security interest, encumbrance, lien
or charge of any kind (including without limitation, any conditional sale or
other title retention agreement or lease in the nature thereof or any agreement
to give any security interest).

         "Line of Credit" means the credit facility established pursuant to the
Fifth Amended and Restated Credit Agreement dated as of August 1, 2000 among
FelCor LP, FelCor, the lenders party thereto, The Chase Manhattan Bank, as
Administrative Agent, Chase Securities, Inc., as Joint Lead Arranger, Joint Book
Manager and Syndication Agent, Bankers Trust Company, as Joint Lead Arranger,
Joint Book Manager and Documentation Agent, Bank of America, N.A., as
Documentation Agent, and Wells Fargo Bank, National Association, as
Documentation Agent, together with all other agreements, instruments and
documents executed or delivered pursuant thereto or in connection therewith, in
each case as such agreements, instruments or documents may be amended,
supplemented, extended, renewed, replaced or otherwise modified from time to
time; provided that, with respect to an agreement providing for the refinancing
of Indebtedness under the Line of Credit, such agreement shall be the Line of
Credit under this Indenture only if a notice to that effect is delivered by
FelCor LP and FelCor to a Responsible Officer of the Trustee.

         "Moody's" means Moody's Investors Service, Inc. and its successors.

         "Net Cash Proceeds" means, (a) with respect to any Asset Sale, the
proceeds of such Asset Sale in the form of cash or cash equivalents, including
payments in respect of deferred payment obligations (to the extent corresponding
to the principal, but not interest, component thereof) when received in the form
of cash or cash equivalents (except to the extent such obligations are financed
or sold with recourse to FelCor LP or FelCor or any of their respective
Restricted Subsidiaries) and proceeds from the conversion of other property
received when converted to cash or cash equivalents, net of (i) brokerage
commissions and other fees and expenses (including fees and expenses of counsel
and investment bankers) related to such Asset Sale, (ii) provisions for all
taxes actually paid or payable as a result of such Asset Sale by FelCor LP,
FelCor and their respective Restricted Subsidiaries, taken as a whole, (iii)
payments made to repay Indebtedness or any other obligation outstanding at the
time of such Asset Sale that either (A) is secured by a Lien on the property or
assets sold or (B) is required to be paid as a result of such sale and (iv)
amounts reserved by FelCor LP, FelCor and their respective Restricted
Subsidiaries against any liabilities associated with such Asset Sale, including
without limitation, pension and other post-employment benefit liabilities,
liabilities related to environmental matters and liabilities under any
indemnification obligations associated with such Asset Sale, all as determined
on a consolidated basis in conformity with GAAP and (b) with respect to any
issuance or sale of Capital Stock, the proceeds of such issuance or sale in the
form of cash or cash equivalents, including payments in respect of deferred
payment obligations (to the extent corresponding to the principal, but not
interest, component thereof) when received in the form of cash or cash
equivalents (except to the extent such obligations are financed or sold with
recourse to FelCor LP or FelCor or any of their respective Restricted
Subsidiaries) and proceeds from the conversion of other property received when
converted to cash or cash equivalents, net of attorney's fees, accountants's
fees, underwriters' or placement agents' fees, discounts or commissions and
brokerage, consultant and other fees incurred in connection with such issuance
or sale and net of tax paid or payable as a result thereof.

                                       11
<PAGE>   18

         "Non-U.S. Person" means a person who is not a U.S. person, as defined
in Regulation S.

         "Note Register" has the meaning provided in Section 2.04.

         "Notes" means any of the securities, as defined in the first paragraph
of the recitals hereof, that are authenticated and delivered under this
Indenture. For all purposes of this Indenture, the term "Notes" shall include
the Notes initially issued on the Closing Date, any other Notes issued after the
Closing Date under this Indenture and any Exchange Notes. For purposes of this
Indenture, all Notes shall vote together as one series of Notes under this
Indenture.

         "Offer to Purchase" means an offer to purchase Notes by FelCor LP, from
the Holders commenced by mailing a notice to the Trustee and each Holder
stating: (i) the covenant pursuant to which the offer is being made and that all
Notes validly tendered will be accepted for payment on a pro rata basis; (ii)
the purchase price and the date of purchase (which shall be a Business Day no
earlier than 30 days nor later than 60 days from the date such notice is mailed)
("Payment Date"); (iii) that any Note not tendered will continue to accrue
interest pursuant to its terms; (iv) that, unless FelCor LP defaults in the
payment of the purchase price, any Note accepted for payment pursuant to the
Offer to Purchase shall cease to accrue interest on and after the Payment Date;
(v) that Holders electing to have a Note purchased pursuant to the Offer to
Purchase will be required to surrender the Note, together with the form entitled
"Option of the Holder to Elect Purchase" on the reverse side of the Note
completed, to the Paying Agent at the address specified in the notice prior to
the close of business on the Business Day immediately preceding the Payment
Date; (vi) that Holders will be entitled to withdraw their election if the
Payment Agent receives, not later than the close of business on the third
Business Day immediately preceding the Payment Date, a telegram, facsimile
transmission or letter setting forth the name of such Holder, the principal
amount of Notes delivered for purchase and a statement that such Holder is
withdrawing his election to have such Notes purchased; and (vii) that Holders
whose Notes are being purchased only in part will be issued new Notes equal in
principal amount to the unpurchased portion of the Notes surrendered; provided
that each Note purchased and each new Note issued shall be in a principal amount
of $1,000 or integral multiples thereof. On the Payment Date, FelCor LP shall
(i) accept for payment on a pro rata basis Notes or portions thereof tendered
pursuant to an Offer to Purchase; and (ii) deposit with the Paying Agent money
sufficient to pay the purchase price of all Notes or portions thereof so
accepted; and shall promptly thereafter deliver, or cause to be delivered, to
the Trustee all Notes or portions thereof so accepted together with an Officers'
Certificate specifying the Notes or portions thereof accepted for payment by
FelCor LP. The Paying Agent shall promptly mail to the Holders of Notes so
accepted payment in an amount equal to the purchase price, and the Trustee shall
promptly authenticate and mail to such Holders a new Note equal in principal
amount to any unpurchased portion of any Note surrendered; provided that each
Note purchased and each new Note issued shall be in a principal amount of $1,000
or integral multiples thereof. FelCor LP shall publicly announce the results of
an Offer to Purchase as soon as practicable after the Payment Date. FelCor LP
shall comply with Rule 14e-1 under the Exchange Act and any other securities
laws and regulations thereunder to the extent such laws and regulations are
applicable, in the event that FelCor LP is required to repurchase Notes pursuant
to an Offer to Purchase.

                                       12
<PAGE>   19

         "Officer" means, with respect to any Person, (i) the Chairman of the
Board, the President, any Vice President, the Chief Financial Officer, and (ii)
the Treasurer or any Assistant Treasurer, or the Secretary or any Assistant
Secretary or Person holding a similar position at the general partner or manager
of such Person.

         "Officers' Certificate" means a certificate signed by one Officer
listed in clause (i) of the definition thereof and one Officer listed in clause
(ii) of the definition thereof. Each Officers' Certificate (other than
certificates provided pursuant to TIA Section 314(a)(4)) shall include the
statements provided for in TIA Section 314(e).

         "Offshore Global Note" has the meaning provided in Section 2.01.

         "Offshore Physical Notes" has the meaning provided in Section 2.01.

         "Offshore Notes Exchange Date" has the meaning provided in Section
2.01.

         "Opinion of Counsel" means a written opinion signed by legal counsel
who may be an employee of or counsel to FelCor or FelCor LP. Each such Opinion
of Counsel shall include the statements provided for in TIA Section 314(e).

         "Paying Agent" has the meaning provided in Section 2.04, except that,
for the purposes of Article Eight, the Paying Agent shall not be FelCor LP, a
Subsidiary of FelCor LP, any Guarantor or an Affiliate of any of them. The term
"Paying Agent" includes any additional Paying Agent.

         "Permanent Offshore Global Note" has the meaning provided in Section
2.01.

         "Permitted Investment" means (i) an Investment in FelCor LP or FelCor
or any of their Restricted Subsidiaries or a Person which will, upon the making
of such Investment, become a Restricted Subsidiary or be merged or consolidated
with or into or transfer or convey all or substantially all its assets to,
FelCor LP or FelCor or any of their Restricted Subsidiaries; provided that such
person's primary business is related, ancillary, incidental or complementary to
the businesses of FelCor LP or FelCor or any of their respective Restricted
Subsidiaries on the date of such Investment; (ii) Temporary Cash Investments;
(iii) payroll, travel and similar advances to cover matters that are expected at
the time of such advances ultimately to be treated as expenses in accordance
with GAAP; and (iv) stock, obligations or securities received in satisfaction of
judgments.

         "Physical Notes" has the meaning provided in Section 2.01.

         "Preferred Stock" means, with respect to any Person, any and all
shares, interests, participation or other equivalents (however designated,
whether voting or non-voting), which have a preference on liquidation or with
respect to distributions over any other class of Capital Stock, including
preferred partnership interests, whether general or limited, or such Person's
preferred or preference stock, whether outstanding on the Closing Date or issued
thereafter, including, without limitation, all series and classes of such
preferred or preference stock.

                                       13
<PAGE>   20

         "Private Placement Legend" means the legend initially set forth on the
Notes in the form set forth in Section 2.02.

         "QIB" means a "qualified institutional buyer" as defined in Rule 144A.

         "Ratings Downgrade" means a rating of the Notes (1) by S&P and Moody's
lower than, in the case of S&P, BB- and, in the case of Moody's, Ba3, provided
in each case such ratings are publicly available or (2) by S&P or Moody's lower
than, in the case of S&P, BB- or, in the case of Moody's , Ba3, provided that in
any such case such rating is the only rating publicly available.

         "Redemption Date", when used with respect to any Note to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.

         "Redemption Price", when used with respect to any Note to be redeemed,
means the price at which such Note is to be redeemed pursuant to this Indenture.

         "Registrar" has the meaning provided in Section 2.04.

         "Registration Rights Agreement" means the Registration Rights
Agreement, dated September 8, 2000, among FelCor LP, FelCor, Deutsche Banc
Securities Inc., Chase Securities Inc., Morgan Stanley & Co. Incorporated, Banc
of America Securities L.L.C., Banc One Capital Markets, Inc., Credit Lyonnais
Securities (USA) Inc., Scotia Capital (USA) Inc. and certain permitted assigns
specified therein.

         "Registration Statement" means the Registration Statement as defined
and described in the Registration Rights Agreement.

         "Regular Record Date" for the interest payable on any Interest Payment
Date means the March 1 or September 1 (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date.

         "Regulation S" means Regulation S under the Securities Act.

         "Responsible Officer", when used with respect to the Trustee, means the
chairman or any vice chairman of the board of directors, the chairman or any
vice chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, any assistant vice
president, the secretary, any assistant secretary, the treasurer, any assistant
treasurer, the cashier, any assistant cashier, any trust officer or assistant
trust officer, the controller or any assistant controller or any other officer
of the Trustee customarily performing functions similar to those performed by
any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his or her knowledge of and familiarity with the particular
subject.

         "Restricted Subsidiary" means any Subsidiary of FelCor LP or FelCor
other than an Unrestricted Subsidiary.

         "Rule 144A" means Rule 144A under the Securities Act.

                                       14
<PAGE>   21

         "Securities Act" means the Securities Act of 1933, as amended.

         "Secured Indebtedness" means any Indebtedness secured by a Lien upon
the property of FelCor LP or FelCor or any of their respective Restricted
Subsidiaries, other than Indebtedness secured by a Stock Pledge to the extent
such Indebtedness does not exceed 50% of Adjusted Total Assets.

         "Senior Indebtedness" means the following obligations of FelCor LP or
FelCor or any of their respective Restricted Subsidiaries, whether outstanding
on the Closing Date or thereafter Incurred: (i) all Indebtedness and all other
monetary obligations (including expenses fees and other monetary obligations) of
FelCor LP and FelCor under the Line of Credit; (ii) all Indebtedness and all
other monetary obligations of FelCor LP or FelCor or any of their respective
Restricted Subsidiaries (other than the Notes), including principal and interest
on such Indebtedness, unless such Indebtedness, by its terms or by the terms of
any agreement or instrument pursuant to which such Indebtedness is issued is
expressly subordinated in right of payment to the Notes; and (iii) Subsidiary
Debt. Senior Indebtedness will also include interest accruing subsequent to
events of bankruptcy of FelCor LP and FelCor and their respective Restricted
Subsidiaries at the rate provided for the document governing such Senior
Indebtedness, whether or not such interest is an allowed claim enforceable
against the debtor in a bankruptcy case under bankruptcy law.

         "Shelf Registration Statement" means the Shelf Registration Statement
as defined in the Registration Rights Agreement.

         "Significant Subsidiary" means, at any date of determination, any
Restricted Subsidiary that, together with its Subsidiaries, (i) for the most
recent fiscal year of FelCor LP and FelCor, accounted for more than 10% of the
consolidated revenues of FelCor LP, FelCor and their respective Restricted
Subsidiaries or (ii) as of the end of such fiscal year, was the owner of more
than 10% of the consolidated assets of FelCor LP, FelCor and their respective
Restricted Subsidiaries, all as set forth on the most recently available
consolidated financial statements thereof for such fiscal year.

         "S&P" means Standard & Poor's Ratings Services and its successors.

         "Specified Date" means any Redemption Date, Change of Control Payment
Date, Excess Proceeds Payment Date or any date on which the Notes first become
due and payable after an Event of Default.

         "Stated Maturity" means, (i) with respect to any debt security, the
date specified in such debt security as the fixed date on which the final
installment of principal of such debt security is due and payable and (ii) with
respect to any scheduled installment of principal of or interest on any debt
security, the date specified in such debt security as the fixed date on which
such installment is due and payable.

         "Stock Pledge" means a first priority security interest in the equity
interests of subsidiaries of FelCor and/or FelCor LP.

                                       15
<PAGE>   22

         "Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the voting power
of the outstanding Voting Stock is owned, directly or indirectly, by such Person
and one or more other Subsidiaries of such Person and the accounts of which
would be consolidated with those of such Person in its consolidated financial
statements in accordance with GAAP, if such statements were prepared as of such
date.

         "Subsidiary Debt" means all unsecured Indebtedness of which a
Restricted Subsidiary is the primary obligor.

         "Subsidiary Guarantee" means a Guarantee by each Subsidiary Guarantor
for payment of the Notes by such Subsidiary Guarantor. The Subsidiary Guarantee
will be an unsecured senior obligation of each Subsidiary Guarantor and will be
unconditional regardless of the enforceability of the Notes and this Indenture.
Notwithstanding the foregoing, each Subsidiary Guarantee by a Subsidiary
Guarantor shall provide by its terms that it shall be automatically and
unconditionally released and discharged upon any sale, exchange or transfer, to
any Person not an Affiliate of FelCor LP or FelCor, of all of the Capital Stock
owned by FelCor LP, FelCor and their respective Restricted Subsidiaries in, or
all or substantially all the assets of, such Restricted Subsidiary (which sale,
exchange or transfer is not then prohibited by this Indenture).

         "Subsidiary Guarantor" means each of (i) FelCor/CSS Hotels, L.L.C., a
Delaware limited liability company, (ii) FelCor/LAX Hotels, L.L.C., a Delaware
limited liability company, (iii) FelCor/CSS Holdings, L.P., a Delaware limited
partnership, (iv) FelCor/St. Paul Holdings, L.P., a Delaware limited
partnership, (v) FelCor/LAX Holdings, L.P., a Delaware limited partnership, (vi)
FelCor Eight Hotels, L.L.C., a Delaware limited liability company (vii) FelCor
Hotel Asset Company, L.L.C., a Delaware limited liability company, (viii) FelCor
Nevada Holding Company, (ix) FHAC Nevada Holdings, L.L.C., a Nevada limited
liability company, (x) FHAC Texas Holdings, L.P., a Texas limited partnership,
(xi) FelCor Omaha Hotel Company, L.L.C., a Delaware limited liability company,
(xii) FelCor Country Villa Hotel, L.L.C., a Delaware limited liability company,
(xiii) FelCor Moline Hotel, L.L.C., a Delaware limited liability company, (xiv)
FelCor Canada Co., a Nova Scotia unlimited liability company, and (xv) each
other Restricted Subsidiary that executes a Subsidiary Guarantee in compliance
with Section 4.07.

         "Temporary Cash Investment" means any of the following: (i) direct
obligations of the United States of America or any agency thereof or obligations
fully and unconditionally guaranteed by the United States of America or any
agency thereof, (ii) time deposits accounts, certificates of deposit and money
market deposits maturing within 180 days of the date of acquisition thereof
issued by a bank or trust company which is organized under the laws of the
United States of America, any state thereof, and which bank or trust company has
capital, surplus and undivided profits aggregating in excess of $50 million and
has outstanding debt which is rated "A" (or such similar equivalent rating) or
higher by at least one nationally recognized statistical rating organization (as
defined in Rule 436 under the Securities Act) or any money-market fund sponsored
by a registered broker dealer or mutual fund distributor, (iii) repurchase
obligations with a term of not more than 30 days for underlying securities of
the types described in clause (i) above entered into with a bank meeting the
qualifications described in clause (ii) above, (iv) commercial paper, maturing
not more than 90 days after the date of acquisition, issued by a corporation
(other than an Affiliate of FelCor LP or FelCor) organized and in existence
under the laws of the United States of America, any state thereof with a rating
at

                                       16
<PAGE>   23

the time as of which any investment therein is made of "P-1" (or higher)
according to Moody's or "A-1" (or higher) according to S&P, and (v) securities
with maturities of six months or less from the date of acquisition issued or
fully and unconditionally guaranteed by any state, commonwealth or territory of
the United States of America, or by any political subdivision or taxing
authority thereof, and rated at least "A" by S&P or Moody's.

         "Temporary Offshore Global Note" has the meaning provided in Section
2.01.

         "TIA" or "Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended (15 U.S. Code Section 77aaa-77bbb), as in effect on the date this
Indenture was executed, except as provided in Section 9.06.

         "Total Assets" means the sum of (i) Undepreciated Real Estate Assets
and (ii) all other assets of FelCor LP, FelCor and their respective Restricted
Subsidiaries on a consolidated basis determined in conformity with GAAP (but
excluding intangibles and accounts receivables).

         "Total Unencumbered Assets" as of any date means the sum of (i) those
Undepreciated Real Estate Assets not securing any portion of Secured
Indebtedness and (ii) all other assets (but excluding intangibles and accounts
receivable) of FelCor LP, FelCor and their respective Restricted Subsidiaries
not securing any portion of Secured Indebtedness determined on a consolidated
basis in accordance with GAAP.

         "Trade Payables" means, with respect to any Person, any accounts
payable or any other indebtedness or monetary obligation to trade creditors
created, assumed or Guaranteed by such Person or any of its Subsidiaries arising
in the ordinary course of business in connection with the acquisition of goods
or services.

         "Transaction Date" means, with the respect to the Incurrence of any
Indebtedness by FelCor LP or FelCor or any of their respective Restricted
Subsidiaries, the date such Indebtedness is to be Incurred and, with respect to
any Restricted Payment, the date such Restricted Payment is to be made.

         "Trustee" means the party named as such in the first paragraph of this
Indenture until a successor replaces it in accordance with the provisions of
Article Seven of this Indenture and thereafter means such successor.

         "Undepreciated Real Estate Assets" means, as of any date, the cost
(being the original cost to FelCor LP or FelCor or any of their respective
Restricted Subsidiaries plus capital improvements) of real estate assets of
FelCor LP, FelCor and their Restricted Subsidiaries on such date, before
depreciation and amortization of such real estate assets, determined on a
consolidated basis in conformity with GAAP.

         "United States Bankruptcy Code" means the Bankruptcy Reform Act of
1978, as amended and as codified in Title 11 of the United States Code, as
amended from time to time hereafter, or any successor federal bankruptcy law.

         "U.S. Global Note" has the meaning provided in Section 2.01.

                                       17
<PAGE>   24

         "U.S. Physical Notes" has the meaning provided in Section 2.01.

         "Units" means the limited partnership units of FelCor LP, that by their
terms are redeemable at the option of the holder thereof and that, if so
redeemed, at the election of FelCor are redeemable for cash or Common Stock of
FelCor.

         "Unrestricted Subsidiary" means (i) any Subsidiary of FelCor LP or
FelCor that at the time of determination shall be designated an Unrestricted
Subsidiary by the Board of Directors in the manner provided below; and (ii) any
Subsidiary of an Unrestricted Subsidiary. The Board of Directors may designate
any Restricted Subsidiary (including any newly acquired or newly formed
Subsidiary of FelCor LP or FelCor) to be an Unrestricted Subsidiary unless such
Subsidiary owns any Capital Stock of, or owns or holds any Lien on any property
of, FelCor LP or FelCor or any of their respective Restricted Subsidiaries;
provided that (A) any Guarantee by FelCor LP or FelCor or any of their
respective Restricted Subsidiaries of any Indebtedness of the Subsidiary being
so designated shall be deemed an "Incurrence" of such Indebtedness and an
"Investment" by FelCor LP or FelCor or such Restricted Subsidiary (or all, if
applicable) at the time of such designation, (B) either (I) the Subsidiary to be
so designated has total assets of $1,000 or less or (II) if such Subsidiary has
assets greater than $1,000, such designation would be permitted under Section
4.04 and (C) if applicable, the Incurrence of Indebtedness and the Investment
referred to in clause (A) of this proviso would be permitted under Sections 4.03
and 4.04. The Board of Directors may designate any Unrestricted Subsidiary to be
a Restricted Subsidiary; provided that (i) no Default or Event of Default shall
have occurred and be continuing at the time of or after giving effect to such
designation; and (ii) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately after such designation would, if Incurred at such time,
have been permitted to be Incurred (and shall be deemed to have been Incurred)
for all purposes of this Indenture. Any such designation by the Board of
Directors shall be evidenced to the Trustee by promptly filing with the Trustee
a copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing provisions.

         "Unsecured Indebtedness" means any Indebtedness of FelCor LP or FelCor
or any of their respective Restricted Subsidiaries that is not Secured
Indebtedness.

         "Voting Stock" means with respect to any Person, Capital Stock of any
class or kind ordinarily having the power to vote for the election of directors,
managers or other voting members of the governing body of such Person.

         "Wholly Owned" means, with respect to any Subsidiary of any Person, the
ownership of all of the outstanding Capital Stock of such Subsidiary (other than
any director's qualifying shares or Investments by individuals mandated by
applicable law) by such Person or one or more Wholly Owned Subsidiaries of such
Person.

         SECTION 1.02 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:

                                       18
<PAGE>   25

         "indenture notes" means the Notes;

         "indenture note holder" means a Holder or a Noteholder;

         "indenture to be qualified" means this Indenture;

         "indenture trustee" or "institutional trustee" means the Trustee; and

         "obligor" on the indenture securities means FelCor LP, the Guarantors
or any other obligor on the Notes.

         All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by a rule of the
Commission and not otherwise defined herein have the meanings assigned to them
therein.

         SECTION 1.03 RULES OF CONSTRUCTION. Unless the context otherwise
requires:

         (i) a term has the meaning assigned to it;

         (ii) an accounting term not otherwise defined has the meaning assigned
         to it in accordance with GAAP;

         (iii) "or" is not exclusive;

         (iv) words in the singular include the plural, and words in the plural
         include the singular;

         (v) provisions apply to successive events and transactions;

         (vi) "herein," "hereof" and other words of similar import refer to this
         Indenture as a whole and not to any particular Article, Section or
         other subdivision;

         (vii) all ratios and computations based on GAAP contained in this
         Indenture shall be computed in accordance with the definition of GAAP
         set forth in Section 1.01; and

         (viii) all references to Sections or Articles refer to Sections or
         Articles of this Indenture unless otherwise indicated.

                                   ARTICLE 2.
                                      NOTES

         SECTION 2.01 FORM AND DATING. The Notes and the Trustee's certificate
of authentication shall be substantially in the form annexed hereto as Exhibit A
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture. The Notes may have notations,
legends or endorsements required by law, stock exchange agreements to which
FelCor LP or the Guarantors are subject or usage. FelCor LP shall approve the
form of the Notes and any notation, legend or endorsement on the Notes. Each
Note shall be dated the date of its authentication.

                                       19
<PAGE>   26

         The terms and provisions contained in the form of the Notes annexed
hereto as Exhibit A shall constitute, and are hereby expressly made, a part of
this Indenture. To the extent applicable, FelCor LP, the Guarantors and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.

         Notes offered and sold in reliance on Rule 144A shall be issued
initially in the form of one or more permanent global Notes in registered form,
substantially in the form set forth in Exhibit A (collectively, the "U.S. Global
Notes"), deposited with the Trustee, as custodian for the Depositary, duly
executed by FelCor LP and authenticated by the Trustee as hereinafter provided.
The aggregate principal amount of the U.S. Global Notes may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depositary or its nominee, as hereinafter provided.

         Notes offered and sold in offshore transactions in reliance on
Regulation S shall be issued initially in the form of one or more temporary
global Notes in registered form substantially in the form set forth in Exhibit A
(the "Temporary Offshore Global Notes") deposited with the Trustee, as custodian
for the Depositary, duly executed by FelCor LP and authenticated by the Trustee
as hereinafter provided. At any time following 40 days from the initial issuance
of a series of notes (the "Offshore Notes Exchange Date"), upon receipt by the
Trustee and FelCor LP of a certificate substantially in the form of Exhibit B
hereto, one or more permanent global Notes in registered form substantially in
the form set forth in Exhibit A (the "Permanent Offshore Global Notes"; and
together with the Temporary Offshore Global Notes, the "Offshore Global Notes")
duly executed by FelCor LP and authenticated by the Trustee as hereinafter
provided shall be deposited with the Trustee, as custodian for the Depositary,
and the Registrar shall reflect on its books and records the date and a decrease
in the principal amount of the Temporary Offshore Global Notes in an amount
equal to the principal amount of the beneficial interest in the Temporary
Offshore Global Notes transferred.

         Notes offered and sold in reliance on Regulation D under the Securities
Act shall be issued in the form of permanent certificated Notes in registered
form in substantially the form set forth in Exhibit A (the "U.S. Physical
Notes"). Notes issued pursuant to Section 2.07 in exchange for interests in the
Offshore Global Note shall be in the form of permanent certificated Notes in
registered form substantially in the form set forth in Exhibit A (the "Offshore
Physical Notes").

         The Offshore Physical Notes and U.S. Physical Notes are sometimes
collectively herein referred to as the "Physical Notes". The U.S. Global Notes
and the Offshore Global Notes are sometimes referred to herein as the "Global
Notes".

         The definitive Notes shall be typed, printed, lithographed or engraved
or produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any securities exchange on which the Notes may
be listed, all as determined by the Officers executing such Notes, as evidenced
by their execution of such Notes.

         SECTION 2.02 RESTRICTIVE LEGENDS. Unless and until a Note is exchanged
for an Exchange Note or sold in connection with an effective Registration
pursuant to the Registration

                                       20
<PAGE>   27

Rights Agreement, the U.S. Global Notes, Temporary Offshore Global Notes and
each U.S. Physical Note shall bear the following legend on the face thereof:

         THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
         1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
         OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
         BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE.
         BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
         "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
         SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS
         NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER
         THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD
         REFERRED TO IN RULE 144(k) UNDER THE SECURITIES ACT AFTER ORIGINAL
         ISSUANCE OF THIS NOTE, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT
         (A) TO FELCOR OR FELCOR LP OR ANY SUBSIDIARY THEREOF, (B) TO A
         QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
         SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE
         TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (D)
         PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
         THE SECURITIES ACT (IF AVAILABLE), (E) INSIDE THE UNITED STATES TO AN
         INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER,
         FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
         REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
         OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE
         TRUSTEE) AND IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL
         AMOUNT OF NOTES AT THE TIME OF TRANSFER OF LESS THAN $100,000, AN
         OPINION OF COUNSEL ACCEPTABLE TO FELCOR AND FELCOR LP THAT SUCH
         TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, OR (F) PURSUANT TO
         AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND (3)
         AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS
         TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
         CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN THE TIME PERIOD
         REFERRED TO IN RULE 144(k) UNDER THE SECURITIES ACT AFTER ORIGINAL
         ISSUANCE OF THIS NOTE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET
         FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND
         SUBMIT THIS CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED TRANSFEREE IS
         AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH
         TRANSFER, FURNISH TO THE TRUSTEE AND FELCOR AND FELCOR LP SUCH
         CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM
         MAY REASONABLY REQUIRE TO

                                       21
<PAGE>   28

         CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM,
         OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
         THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION",
         "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
         REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A
         PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF
         THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS.

         Each Global Note, whether or not an Exchange Note, shall also bear the
following legend on the face thereof:

         UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
         THE DEPOSITORY TRUST COMPANY, TO FELCOR LP OR ITS AGENT FOR
         REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
         ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY
         AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
         COMPANY OR SUCH OTHER REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR
         SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
         DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.
         OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
         OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE
         HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
         REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. TRANSFERS
         OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN
         PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
         SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL
         BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
         FORTH IN SECTION 2.08 OF THE INDENTURE.

         SECTION 2.03 EXECUTION, AUTHENTICATION AND DENOMINATIONS. The Notes
shall be executed by two Officers of FelCor, as general partner of FelCor LP.
The signature of any of these Officers on the Notes may be by facsimile or
manual signature in the name and on behalf of FelCor or FelCor LP, as the case
may be.

         If an Officer whose signature is on a Note no longer holds that office
at the time the Trustee or authenticating agent authenticates the Note, the Note
shall be valid nevertheless.

         A Note shall not be valid until the Trustee or authenticating agent
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.

                                       22
<PAGE>   29

         At any time and from time to time after the execution of this
Indenture, the Trustee or an authenticating agent shall upon receipt of a
Company Order authenticate for original issue Notes in the aggregate principal
amount specified in such Company Order; provided that the Trustee shall be
entitled to receive an Officers' Certificate and an Opinion of Counsel of FelCor
LP in connection with such authentication of Notes. Such Company Order shall
specify the amount of Notes to be authenticated and the date on which the
original issue of Notes is to be authenticated and in case of an issuance of
Notes pursuant to Section 2.15, shall certify that such issuance is in
compliance with Article Four.

         The Trustee may appoint an authenticating agent to authenticate Notes.
An authenticating agent may authenticate Notes whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such authenticating agent. An authenticating agent has the
same rights as an Agent to deal with FelCor LP or an Affiliate of FelCor LP.

         The Notes shall be issuable only in registered form without coupons and
only in denominations of $1,000 in principal amount at maturity and any integral
multiple of $1,000 in excess thereof.

         SECTION 2.04 REGISTRAR AND PAYING AGENT. FelCor LP shall maintain an
office or agency where Notes may be presented for registration of transfer or
for exchange (the "Registrar"), an office or agency where Notes may be presented
for payment (the "Paying Agent") and an office or agency where notices and
demands to or upon FelCor LP in respect of the Notes and this Indenture may be
served, which shall be in the Borough of Manhattan, The City of New York. FelCor
LP shall cause the Registrar to keep a register of the Notes and of their
transfer and exchange (the "Note Register"). FelCor LP may have one or more
co-Registrars and one or more additional Paying Agents.

         FelCor LP shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. FelCor LP shall give
prompt written notice to the Trustee of the name and address of any such Agent
and any change in the address of such Agent. If FelCor LP fails to maintain a
Registrar, Paying Agent and/or agent for service of notices and demands, the
Trustee shall act as such Registrar, Paying Agent and/or agent for service of
notices and demands. FelCor LP may remove any Agent upon written notice to such
Agent and the Trustee; provided that no such removal shall become effective
until (i) the acceptance of an appointment by a successor Agent to such Agent as
evidenced by an appropriate agency agreement entered into by FelCor LP and such
successor Agent and delivered to the Trustee or (ii) notification to the Trustee
that the Trustee shall serve as such Agent until the appointment of a successor
Agent in accordance with clause (i) of this proviso. Except with respect to
Article 8, FelCor, FelCor LP, any Subsidiary of FelCor or FelCor LP, or any
Affiliate of any of them may act as Paying Agent, Registrar or co-Registrar,
and/or agent for service of notice and demands.

         FelCor LP initially appoints the Trustee as Registrar, Paying Agent,
authenticating agent and agent for service of notice and demands. If, at any
time, the Trustee is not the Registrar, the Registrar shall make available to
the Trustee on or before each Interest Payment Date and at such

                                       23
<PAGE>   30

other times as the Trustee may reasonably request, the names and addresses of
the Holders as they appear in the Note Register.

         SECTION 2.05 PAYING AGENT TO HOLD MONEY IN TRUST. Not later than each
due date of the principal, premium, if any, and interest on any Notes, FelCor LP
shall deposit with the Paying Agent money in immediately available funds
sufficient to pay such principal, premium, if any, and interest so becoming due;
provided that if the Trustee is then serving as Paying Agent, FelCor LP agrees
to use its reasonable best efforts to deposit or otherwise transfer such funds
to the Trustee by no later than 11:00 a.m., Atlanta, Georgia time on the
applicable due date. FelCor LP shall require each Paying Agent other than the
Trustee to agree in writing that such Paying Agent shall hold in trust for the
benefit of the Holders or the Trustee all money held by the Paying Agent for the
payment of principal of, premium, if any, and interest on the Notes (whether
such money has been paid to it by FelCor LP or any other obligor on the Notes),
and such Paying Agent shall promptly notify the Trustee of any default by FelCor
LP (or any other obligor on the Notes) in making any such payment. FelCor LP at
any time may require a Paying Agent to pay all money held by it to the Trustee
and account for any funds disbursed, and the Trustee may at any time during the
continuance of any payment default, upon written request to a Paying Agent,
require such Paying Agent to pay all money held by it to the Trustee and to
account for any funds disbursed. Upon doing so, the Paying Agent shall have no
further liability for the money so paid over to the Trustee. If FelCor, FelCor
LP or any Subsidiary of FelCor or FelCor LP or any Affiliate of any of them acts
as Paying Agent, it will, on or before each due date of any principal of,
premium, if any, or interest on the Notes, segregate and hold in a separate
trust fund for the benefit of the Holders a sum of money sufficient to pay such
principal, premium, if any, or interest so becoming due until such sum of money
shall be paid to such Holders or otherwise disposed of as provided in this
Indenture, and will promptly notify the Trustee of its action or failure to act.

         SECTION 2.06 TRANSFER AND EXCHANGE. The Notes are issuable only in
registered form. A Holder may transfer a Note only by written application to the
Registrar stating the name of the proposed transferee and otherwise complying
with the terms of this Indenture. No such transfer shall be effected until, and
such transferee shall succeed to the rights of a Holder only upon, final
acceptance and registration of the transfer by the Registrar in the Note
Register. Prior to the registration of any transfer by a Holder as provided
herein, FelCor LP, the Guarantors, the Trustee, and any agent of FelCor LP shall
treat the person in whose name the Note is registered as the owner thereof for
all purposes whether or not the Note shall be overdue, and neither FelCor LP,
the Guarantors, the Trustee, nor any such agent shall be affected by notice to
the contrary. Furthermore, any Holder of a Global Note shall, by acceptance of
such Global Note, agree that transfers of beneficial interests in such Global
Note may be effected only through a book entry system maintained by the Holder
of such Global Note (or its agent) and that ownership of a beneficial interest
in the Note shall be required to be reflected in a book entry. When Notes are
presented to the Registrar or a co-Registrar with a request to register the
transfer or to exchange them for an equal principal amount of Notes of other
authorized denominations (including an exchange of Notes for Exchange Notes),
the Registrar shall register the transfer or make the exchange as requested if
its requirements for such transactions are met; provided that no exchanges of
Notes for Exchange Notes shall occur until a Registration Statement shall have
been declared effective by the Commission and that any Notes that are exchanged
for Exchange Notes shall be cancelled by the Trustee. To permit registrations of
transfers and exchanges,

                                       24
<PAGE>   31

FelCor LP shall execute and the Trustee shall authenticate Notes at the
Registrar's request. No service charge shall be made for any registration of
transfer or exchange or redemption of the Notes, but FelCor LP may require
payment of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes or
other similar governmental charge payable upon exchanges pursuant to Section
2.11, 3.08 or 9.04).

         The Registrar shall not be required (i) to issue, register the transfer
of or exchange any Note during a period beginning at the opening of business 15
days before the day of the mailing of a notice of redemption of Notes selected
for redemption under Section 3.03 and ending at the close of business on the day
of such mailing, or (ii) to register the transfer of or exchange any Note so
selected for redemption in whole or in part, except the unredeemed portion of
any Note being redeemed in part.

         SECTION 2.07 BOOK-ENTRY PROVISIONS FOR GLOBAL NOTES.

         (a) The U.S. Global Note and Offshore Global Note initially shall (i)
be registered in the name of the Depositary for such Global Notes or the nominee
of such Depositary, (ii) be delivered to the Trustee as custodian for such
Depositary and (iii) bear legends as set forth in Section 2.02.

         Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by the Depositary, or the Trustee as its custodian, or under the
Global Note, and the Depositary may be treated by FelCor LP, the Guarantors, the
Trustee and any agent of FelCor LP, the Guarantors, or the Trustee as the
absolute owner of such Global Note for all purposes whatsoever. Notwithstanding
the foregoing, nothing herein shall prevent FelCor LP, the Guarantors, the
Trustee or any agent of FelCor LP, the Guarantors, or the Trustee, from giving
effect to any written certification, proxy or other authorization furnished by
the Depositary or impair, as between the Depositary and its Agent Members, the
operation of customary practices governing the exercise of the rights of a
holder of any Note.

         (b) Transfers of a Global Note shall be limited to transfers of such
Global Note in whole, but not in part, to the Depositary, its successors or
their respective nominees. Interests of beneficial owners in a Global Note may
be transferred in accordance with the rules and procedures of the Depositary and
the provisions of Section 2.08. In addition, U.S. Physical Notes and Offshore
Physical Notes shall be transferred to all beneficial owners in exchange for
their beneficial interests in the U.S. Global Note or the Offshore Global Note,
respectively, if (i) the Depositary notifies FelCor LP that it is unwilling or
unable to continue as Depositary for the U.S. Global Note or the Offshore Global
Note, as the case may be, and a successor depositary is not appointed by FelCor
LP within 90 days of such notice, (ii) an Event of Default has occurred and is
continuing and the Registrar has received a request therefor from the Depositary
or (iii) in accordance with the rules and procedures of the Depositary and the
provisions of Section 2.08.

         (c) Any beneficial interest in one of the Global Notes that is
transferred to a person who takes delivery in the form of an interest in the
other Global Note will, upon transfer, cease to be an interest in such Global
Note and become an interest in the other Global Note and, accordingly,

                                       25
<PAGE>   32

will thereafter be subject to all transfer restrictions, if any, and other
procedures applicable to beneficial interests in such other Global Note for as
long as it remains such an interest.

         (d) In connection with any transfer of a portion of the beneficial
interests in the U.S. Global Note or Permanent Offshore Global Note to
beneficial owners pursuant to paragraph (b) of this Section, the Registrar shall
reflect on its books and records the date and a decrease in the principal amount
of the U.S. Global Note or Permanent Offshore Global Note in an amount equal to
the principal amount of the beneficial interest in the U.S. Global Note or
Permanent Offshore Global Note to be transferred, and FelCor LP shall execute,
and the Trustee shall authenticate and deliver, one or more U.S. Physical Notes
or Offshore Physical Notes, as the case may be, of like tenor and amount.

         (e) In connection with the transfer of the entire U.S. Global Note or
Offshore Global Note to beneficial owners pursuant to paragraph (b) of this
Section, the U.S. Global Note or Offshore Global Note, as the case may be, shall
be deemed to be surrendered to the Trustee for cancellation, and FelCor LP shall
execute, and the Trustee shall authenticate and deliver, to each beneficial
owner identified by the Depositary in exchange for its beneficial interest in
the U.S. Global Note or Offshore Global Note, as the case may be, an equal
aggregate principal amount of U.S. Physical Notes or Offshore Physical Notes, as
the case may be, of authorized denominations.

         (f) Any U.S. Physical Note delivered in exchange for an interest in the
U.S. Global Note pursuant to paragraph (b), (d) or (e) of this Section shall,
except as otherwise provided by paragraph (f) of Section 2.08, bear the legend
regarding transfer restrictions applicable to the U.S. Physical Note set forth
in Section 2.02.

         (g) Any Offshore Physical Note delivered in exchange for an interest in
the Temporary Offshore Global Note pursuant to paragraph (b), (d) or (e) of this
Section shall, except as otherwise provided by paragraph (f) of Section 2.08,
bear the legend regarding transfer restrictions applicable to the Offshore
Physical Note set forth in Section 2.02.

         (h) The registered holder of a Global Note may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Notes.

         SECTION 2.08 SPECIAL TRANSFER PROVISIONS. Unless and until a Note is
exchanged for an Exchange Note or sold in connection with an effective
Registration Statement pursuant to the Registration Rights Agreement, the
following provisions shall apply:

         (a) Transfers to Non-QIB Institutional Accredited Investors. The
following provisions shall apply with respect to the registration of any
proposed transfer of a Note to any Institutional Accredited Investor which is
not a QIB (excluding Non-U.S. Persons):

             (1) The Registrar shall register the transfer of any Note, whether
         or not such Note bears the Private Placement Legend, if (x) the
         requested transfer is two years after the original issuance of the
         Notes or (y) the proposed transferee has delivered to the Registrar a
         certificate substantially in the form of Exhibit C hereto and, if such
         transfer is with respect to an aggregate principal amount of Notes at
         the time of transfer of less than

                                       26
<PAGE>   33

         $100,000, an opinion of counsel acceptable to FelCor and FelCor LP that
         such transfer is in compliance with the Securities Act.

             (2) If the proposed transferor is an Agent Member holding a
         beneficial interest in the U.S. Global Note, upon receipt by the
         Registrar of (x) the documents, if any, required by paragraph (1) and
         (y) instructions given in accordance with the Depositary's and the
         Registrar's procedures, the Registrar shall reflect on its books and
         records the date and a decrease in the principal amount at maturity of
         the U.S. Global Note in an amount equal to the principal amount at
         maturity of the beneficial interest in the U.S. Global Note to be
         transferred, and FelCor LP shall execute, and the Trustee shall
         authenticate and deliver, one or more U.S. Physical Certificates of
         like tenor and amount.

         (b) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of a U.S. Physical Note or
an interest in the U.S. Global Note to a QIB (excluding Non-U.S. Persons):

         (i) If the Note to be transferred consists of (x) U.S. Physical Notes,
         the Registrar shall register the transfer if such transfer is being
         made by a proposed transferor who has checked the box provided for on
         the form of Note stating, or has otherwise advised FelCor LP and the
         Registrar in writing, that the sale has been made in compliance with
         the provisions of Rule 144A to a transferee who has signed the
         certification provided for on the form of Note stating, or has
         otherwise advised FelCor LP and the Registrar in writing, that it is
         purchasing the Note for its own account or an account with respect to
         which it exercises sole investment discretion and that it and any such
         account is a QIB within the meaning of Rule 144A, and is aware that the
         sale to it is being made in reliance on Rule 144A and acknowledges that
         it has received such information regarding FelCor LP and the Guarantors
         as it has requested pursuant to Rule 144A or has determined not to
         request such information and that it is aware that the transferor is
         relying upon its foregoing representations in order to claim the
         exemption from registration provided by Rule 144A or (y) an interest in
         the U.S. Global Note, the transfer of such interest may be effected
         only through the book entry system maintained by the Depositary.

         (ii) If the proposed transferee is an Agent Member, and the Note to be
         transferred consists of U.S. Physical Notes, upon receipt by the
         Registrar of the documents referred to in clause (i) and instructions
         given in accordance with the Depositary's and the Registrar's
         procedures, the Registrar shall reflect on its books and records the
         date and an increase in the principal amount at maturity of the U.S.
         Global Note in an amount equal to the principal amount at maturity of
         the U.S. Physical Notes, to be transferred, and the Trustee shall
         cancel the U.S. Physical Note so transferred.

         (c) Transfers of Interests in the Temporary Offshore Global Note. The
following provisions shall apply with respect to registration of any proposed
transfer of interests in the Temporary Offshore Global Note:

         (i) The Registrar shall register the transfer of any Note (x) if the
         proposed transferee is a Non-U.S. Person and the proposed transferor
         has delivered to the Registrar a

                                       27
<PAGE>   34

         certificate substantially in the form of Exhibit D hereto or (y) if the
         proposed transferee is a QIB and the proposed transferor has checked
         the box provided for on the form of Note stating, or has otherwise
         advised FelCor LP and the Registrar in writing, that the sale has been
         made in compliance with the provisions of Rule 144A to a transferee who
         has signed the certification provided for on the form of Note stating,
         or has otherwise advised FelCor LP and the Registrar in writing, that
         it is purchasing the Note for its own account or an account with
         respect to which it exercises sole investment discretion and that it
         and any such account is a QIB within the meaning of Rule 144A, and is
         aware that the sale to it is being made in reliance on Rule 144A and
         acknowledges that it has received such information regarding FelCor LP
         and the Guarantors as it has requested pursuant to Rule 144A or has
         determined not to request such information and that it is aware that
         the transferor is relying upon its foregoing representations in order
         to claim the exemption from registration provided by Rule 144A.

         (ii) If the proposed transferee is an Agent Member, upon receipt by the
         Registrar of the documents referred to in clause (i)(y) above and
         instructions given in accordance with the Depositary's and the
         Registrar's procedures, the Registrar shall reflect on its books and
         records the date and an increase in the principal amount at maturity of
         the U.S. Global Note, in an amount equal to the principal amount at
         maturity of the Temporary Offshore Global Note to be transferred, and
         the Trustee shall decrease the amount of the Temporary Offshore Global
         Note in such an amount.

         (d) Transfers of Interests in the Permanent Offshore Global Note or
Unlegended Offshore Physical Notes. The following provisions shall apply with
respect to any transfer of interests in the Permanent Offshore Global Note or
unlegended Offshore Physical Notes. The Registrar shall register the transfer of
any such Note without requiring any additional certification.

         (e) Transfers to Non-U.S. Persons at Any Time. The following provisions
shall apply with respect to any transfer of a Note to a Non-U.S. Person:

         (i) Prior to 40 days from the initial issuance of a series of notes,
         the Registrar shall register any proposed transfer of a Note to a
         Non-U.S. Person upon receipt of a certificate substantially in the form
         of Exhibit D hereto from the proposed transferor. On and after 40 days
         from the initial issuance of a series of notes, the Registrar shall
         register any proposed transfer to any Non-U.S. Person if the Note to be
         transferred is a U.S. Physical Note or an interest in the U.S. Global
         Note, upon receipt of a certificate substantially in the form of
         Exhibit D from the proposed transferor.

         (ii) (a) If the proposed transferor is an Agent Member holding a
         beneficial interest in the U.S. Global Note, upon receipt by the
         Registrar of (x) the documents, if any, required by paragraph (i) and
         (y) instructions in accordance with the Depositary's and the
         Registrar's procedures, the Registrar shall reflect on its books and
         records the date and a decrease in the principal amount at maturity of
         the U.S. Global Note in an amount equal to the principal amount at
         maturity of the beneficial interest in the U.S. Global Note to be
         transferred, and (b) if the proposed transferee is an Agent Member,
         upon receipt by the Registrar of instructions given in accordance with
         the Depositary's and the Registrar's

                                       28
<PAGE>   35

         procedures, the Registrar shall reflect on its books and records the
         date and an increase in the principal amount at maturity of the
         Offshore Global Note in an amount equal to the principal amount at
         maturity of the U.S. Physical Notes or the U.S. Global Note, as the
         case may be, to be transferred, and the Trustee shall cancel the U.S.
         Physical Note, if any, so transferred or decrease the amount of the
         U.S. Global Note.

         (f) Private Placement Legend. Upon the transfer, exchange or
replacement of Notes not bearing the Private Placement Legend, the Registrar
shall deliver Notes that do not bear the Private Placement Legend. Upon the
transfer, exchange or replacement of Notes bearing the Private Placement Legend,
the Registrar shall deliver only Notes that bear the Private Placement Legend
unless either (i) the circumstances contemplated by the second sentence of the
fourth paragraph of Section 2.01 or paragraphs (a)(i)(x) or (e)(ii) of this
Section 2.08 exist or (ii) there is delivered to the Registrar an Opinion of
Counsel reasonably satisfactory to FelCor and FelCor LP and the Trustee to the
effect that neither such legend nor the related restrictions on transfer are
required in order to maintain compliance with the provisions of the Securities
Act.

         (g) General. By its acceptance of any Note bearing the Private
Placement Legend, each Holder of such a Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private Placement
Legend and agrees that it will transfer such Note only as provided in this
Indenture. The Registrar shall not register a transfer of any Note unless such
transfer complies with the restrictions on transfer of such Note set forth in
this Indenture. In connection with any transfer of Notes, each Holder agrees by
its acceptance of the Notes to furnish the Registrar or FelCor LP such
certifications, legal opinions or other information as either of them may
reasonably require to confirm that such transfer is being made pursuant to an
exemption from, or a transaction not subject to, the registration requirements
of the Securities Act; provided that the Registrar shall not be required to
determine (but may rely on a determination made by FelCor LP with respect to)
the sufficiency of any such certifications, legal opinions or other information.

         The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.07 or this Section 2.08.
FelCor LP shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.

         SECTION 2.09 REPLACEMENT NOTES. If a mutilated Note is surrendered to
the Trustee or if the Holder claims that the Note has been lost, destroyed or
wrongfully taken, FelCor LP shall issue and the Trustee shall authenticate a
replacement Note of like tenor and amount and bearing a number not
contemporaneously outstanding; provided that the requirements of this Section
2.09 are met. If required by the Trustee or FelCor LP, an indemnity bond must be
furnished that is sufficient in the judgment of both the Trustee and FelCor LP
to protect FelCor LP, the Guarantors, the Trustee or any Agent from any loss
that any of them may suffer if a Note is replaced. FelCor LP may charge such
Holder for its expenses and the expenses of the Trustee in replacing a Note. In
case any such mutilated, lost, destroyed or wrongfully taken Note has become or
is about to become due and payable, FelCor LP in its discretion may pay such
Note instead of issuing a new Note in replacement thereof.

                                       29
<PAGE>   36

         Every replacement Note is an additional obligation of FelCor LP and
shall be entitled to the benefits of this Indenture.

         SECTION 2.10 OUTSTANDING NOTES. Notes outstanding at any time are all
Notes that have been authenticated by the Trustee except for those cancelled by
it, those delivered to it for cancellation and those described in this Section
2.10 as not outstanding.

         If a Note is replaced pursuant to Section 2.09, it ceases to be
outstanding unless and until the Trustee and FelCor LP receive proof
satisfactory to them that the replaced Note is held by a bona fide purchaser.

         If the Paying Agent (other than FelCor, FelCor LP or an Affiliate of
FelCor or FelCor LP) holds on the maturity date money sufficient to pay Notes
payable on that date, then on and after that date such Notes cease to be
outstanding and interest on them shall cease to accrue.

         A Note does not cease to be outstanding because FelCor or FelCor LP or
one of their Affiliates holds such Note; provided that, in determining whether
the Holders of the requisite principal amount of the outstanding Notes have
given any request, demand, authorization, direction, notice, consent or waiver
hereunder, Notes owned by FelCor, FelCor LP, the Guarantors or any other obligor
upon the Notes or any Affiliate of FelCor LP or the Guarantors or of such other
obligor shall be disregarded and deemed not to be outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only Notes
which the Trustee knows to be so owned shall be so disregarded. Notes so owned
which have been pledged in good faith may be regarded as outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so to
act with respect to such Notes and that the pledgee is not FelCor LP or the
Guarantors or any other obligor upon the Notes or any Affiliate of FelCor LP or
the Guarantors or of such other obligor.

         SECTION 2.11 TEMPORARY NOTES. Until definitive Notes are ready for
delivery, FelCor LP may prepare and the Trustee shall authenticate temporary
Notes. Temporary Notes shall be substantially in the form of definitive Notes
but may have insertions, substitutions, omissions and other variations
determined to be appropriate by the Officers executing the temporary Notes, as
evidenced by their execution of such temporary Notes. If temporary Notes are
issued, FelCor LP will cause definitive Notes to be prepared without
unreasonable delay. After the preparation of definitive Notes, the temporary
Notes shall be exchangeable for definitive Notes upon surrender of the temporary
Notes at the office or agency of FelCor LP designated for such purpose pursuant
to Section 4.02, without charge to the Holder. Upon surrender for cancellation
of any one or more temporary Notes FelCor LP shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Notes of authorized denominations. Until so exchanged, the temporary
Notes shall be entitled to the same benefits under this Indenture as definitive
Notes.

         SECTION 2.12 CANCELLATION. FelCor LP at any time may deliver to the
Trustee for cancellation any Notes previously authenticated and delivered
hereunder which FelCor LP may have acquired in any manner whatsoever, and may
deliver to the Trustee for cancellation any Notes previously authenticated
hereunder which FelCor LP has not issued and sold. The

                                       30
<PAGE>   37

Registrar and the Paying Agent shall forward to the Trustee any Notes
surrendered to them for transfer, exchange or payment. The Trustee shall cancel
all Notes surrendered for transfer, exchange, payment or cancellation in
accordance with its normal procedure.

         SECTION 2.13 CUSIP NUMBERS. FelCor LP in issuing the Notes may use
"CUSIP," "CINS" or "ISIN" numbers (if then generally in use), and the Trustee
shall use CUSIP, CINS or ISIN numbers, as the case may be, in notices of
redemption or exchange as a convenience to Holders; provided that any such
notice shall state that no representation is made as to the correctness of such
numbers either as printed on the Notes or as contained in any notice of
redemption or exchange and that reliance may be placed only on the other
identification numbers printed on the Notes.

         SECTION 2.14 DEFAULTED INTEREST. If FelCor LP or the Guarantors default
in a payment of interest on the Notes, FelCor LP or the Guarantors shall pay, or
shall deposit with the Paying Agent money in immediately available funds
sufficient to pay the defaulted interest, plus (to the extent lawful) any
interest payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date. A special record date, as used in this Section
2.14 with respect to the payment of any defaulted interest, shall mean the 15th
day next preceding the date fixed by FelCor LP for the payment of defaulted
interest, whether or not such day is a Business Day. At least 15 days before the
subsequent special record date, FelCor LP shall mail to each Holder and to the
Trustee a notice that states the subsequent special record date, the payment
date and the amount of defaulted interest to be paid.

         SECTION 2.15 ISSUANCE OF ADDITIONAL NOTES. FelCor LP may, subject to
compliance with Article Four of this Indenture, issue additional Notes under
this Indenture. The Notes issued on the Closing Date and any additional Notes
subsequently issued shall be treated as a single class for all purposes under
this Indenture.

                                   ARTICLE 3.
                                   REDEMPTION

         SECTION 3.01 OPTIONAL REDEMPTION.

         (a) Except as provided in Section 3.01(b), FelCor LP may not redeem any
of the Notes prior to September 15, 2004. The Notes may be redeemed at the
option of FelCor LP, in whole or in part, at any time, and from time to time, on
or after September 15, 2004, upon not less than 30 days' nor more than 60 days'
notice, at the following Redemption Prices (expressed as percentages of the
principal amount thereof) plus accrued and unpaid interest thereon, if any, to
the Redemption Date, if redeemed during the 12-month period commencing September
15 of the year set forth below:

<TABLE>
<CAPTION>

         YEAR                                                               REDEMPTION PRICE
         ----                                                               ----------------

<S>                                                                         <C>
         2004..........................................................         104.750%
         2005..........................................................         103.167%
         2006..........................................................         101.583%
         2007 and thereafter...........................................         100.000%
</TABLE>

                                       31
<PAGE>   38

         (b) Notwithstanding the foregoing, at any time, or from time to time,
on or prior to September 15 , 2003, FelCor LP may, at its option, use the net
cash proceeds of one or more Equity Offerings to redeem up to 35% of the
principal amount of the Notes issued under this Indenture at a Redemption Price
of 109.50% of the principal amount thereof plus accrued and unpaid interest
thereon, if any, to the Redemption Date; provided that (i) at least 65% of the
aggregate principal amount of the Notes issued under this Indenture remains
outstanding immediately after such redemption; and (ii) FelCor LP makes such
redemption no later than 90 days after the consummation of any such Equity
Offering.

         SECTION 3.02 NOTICES TO TRUSTEE. If FelCor LP elects to redeem Notes
pursuant to Section 3.01, it shall notify the Trustee in writing of the
Redemption Date and the principal amount of Notes to be redeemed in an Officers'
Certificate at least 45 days before the Redemption Date (unless a shorter period
shall be satisfactory to the Trustee).

         SECTION 3.03 SELECTION OF NOTES TO BE REDEEMED. If less than all of the
Notes are to be redeemed at any time, the Trustee shall select the Notes to be
redeemed in compliance with the requirements, as certified to it by FelCor LP,
of the principal national securities exchange, if any, on which the Notes are
listed or, on a pro rata basis, by lot or by such other method as the Trustee in
its sole discretion shall deem fair and appropriate; provided that no Notes of
$1,000 in principal amount at maturity shall be redeemed in part.
Notwithstanding the foregoing, if less than all the Notes are to be redeemed
with the proceeds of an Equity Offering, the Trustee shall select the Notes to
be redeemed on a pro rata basis or on as nearly a pro rata basis as practicable
(subject to the procedures of the Depositary) unless such method is otherwise
prohibited.

         The Trustee shall make the selection from the Notes outstanding and not
previously called for redemption. Notes in denominations of $1,000 in principal
amount at maturity may only be redeemed in whole. The Trustee may select for
redemption portions (equal to $1,000 in principal amount at maturity or any
integral multiple thereof) of Notes that have denominations larger than $1,000
in principal amount at maturity. Provisions of this Indenture that apply to
Notes called for redemption also apply to portions of Notes called for
redemption. The Trustee shall notify FelCor LP and the Registrar promptly in
writing of the Notes or portions of Notes to be called for redemption.

         SECTION 3.04 NOTICE OF REDEMPTION. With respect to any redemption of
Notes pursuant to Section 3.01, at least 30 days but not more than 60 days
before a Redemption Date, FelCor LP shall mail a notice of redemption by first
class mail to each Holder whose Notes are to be redeemed.

         The notice shall identify the Notes to be redeemed and shall state:

         (i) the Redemption Date;

         (ii) the Redemption Price;

         (iii) the name and address of the Paying Agent;

                                       32
<PAGE>   39

         (iv) that Notes called for redemption must be surrendered to the Paying
         Agent in order to collect the Redemption Price;

         (v) that, unless FelCor LP defaults in making the redemption payment,
         interest on Notes called for redemption ceases to accrue on and after
         the Redemption Date and the only remaining right of the Holders is to
         receive payment of the Redemption Price plus accrued interest to the
         Redemption Date upon surrender of the Notes to the Paying Agent;

         (vi) that, if any Note is being redeemed in part, the portion of the
         principal amount (equal to $1,000 in principal amount at maturity or
         any integral multiple thereof) of such Note to be redeemed and that, on
         and after the Redemption Date, upon surrender of such Note, a new Note
         or Notes in principal amount at maturity equal to the unredeemed
         portion thereof will be reissued; and

         (vii) that, if any Note contains a CUSIP, CINS or ISIN number as
         provided in Section 2.13, no representation is being made as to the
         correctness of the CUSIP, CINS or ISIN number either as printed on the
         Notes or as contained in the notice of redemption and that reliance may
         be placed only on the other identification numbers printed on the
         Notes.

         At FelCor LP's request (which request may be revoked by FelCor LP at
any time prior to the time at which the Trustee shall have given such notice to
the Holders), made in writing to the Trustee at least 45 days (or such shorter
period as shall be satisfactory to the Trustee) before a Redemption Date, the
Trustee shall give the notice of redemption in the name and at the expense of
FelCor LP. If, however, FelCor LP gives such notice to the Holders, FelCor LP
shall concurrently deliver to the Trustee an Officers' Certificate stating that
such notice has been given.

         SECTION 3.05 EFFECT OF NOTICE OF REDEMPTION. Once notice of redemption
is mailed, Notes called for redemption become due and payable on the Redemption
Date and at the Redemption Price. Upon surrender of any Notes to the Paying
Agent, such Notes shall be paid at the Redemption Price, plus accrued interest,
if any, to the Redemption Date.

         Notice of redemption shall be deemed to be given when mailed, whether
or not the Holder receives the notice. In any event, failure to give such
notice, or any defect therein, shall not affect the validity of the proceedings
for the redemption of Notes held by Holders to whom such notice was properly
given.

         SECTION 3.06 DEPOSIT OF REDEMPTION PRICE. On or prior to any Redemption
Date, FelCor LP shall deposit with the Paying Agent (or, if FelCor LP is acting
as its own Paying Agent, shall segregate and hold in trust as provided in
Section 2.05) money sufficient to pay the Redemption Price of and accrued
interest on all Notes to be redeemed on that date other than Notes or portions
thereof called for redemption on that date that have been delivered by FelCor LP
to the Trustee for cancellation.

         SECTION 3.07 PAYMENT OF NOTES CALLED FOR REDEMPTION. If notice of
redemption has been given in the manner provided above, the Notes or portion of
Notes specified in such notice to be redeemed shall become due and payable on
the Redemption Date at the Redemption Price stated therein, together with
accrued interest to such Redemption Date, and on and after such

                                       33
<PAGE>   40

date (unless FelCor LP shall default in the payment of such Notes at the
Redemption Price and accrued interest to the Redemption Date, in which case the
principal, until paid, shall bear interest from the Redemption Date at the rate
prescribed in the Notes), such Notes shall cease to accrue interest. Upon
surrender of any Note for redemption in accordance with a notice of redemption,
such Note shall be paid and redeemed by FelCor LP at the Redemption Price,
together with accrued interest, if any, to the Redemption Date; provided that
installments of interest whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders registered as such at the close of business
on the relevant Regular Record Date.

         SECTION 3.08 NOTES REDEEMED IN PART. Upon surrender of any Note that is
redeemed in part, the Company shall execute and the Trustee shall authenticate
and deliver to the Holder a new Note equal in principal amount to the unredeemed
portion of such surrendered Note.

                                   ARTICLE 4.
                                   COVENANTS

         SECTION 4.01 PAYMENT OF NOTES. FelCor LP shall pay the principal of,
premium, if any, and interest on the Notes on the dates and in the manner
provided in the Notes and this Indenture. An installment of principal, premium,
if any, or interest shall be considered paid on the date due if the Trustee or
Paying Agent (other than FelCor LP, a Subsidiary of FelCor LP, a Guarantor or
any Affiliate of any of them) holds on that date money designated for and
sufficient to pay the installment. If FelCor LP, any Subsidiary of FelCor LP, a
Guarantor or any Affiliate of any of them, acts as Paying Agent, an installment
of principal, premium, if any, or interest shall be considered paid on the due
date if the entity acting as Paying Agent complies with the last sentence of
Section 2.05. As provided in Section 6.09, upon any bankruptcy or reorganization
procedure relative to FelCor LP or any Guarantor, the Trustee shall serve as the
Paying Agent and conversion agent, if any, for the Notes.

         FelCor LP shall pay interest on overdue principal, premium, if any, and
interest on overdue installments of interest, to the extent lawful, at the rate
per annum specified in the Notes.

         SECTION 4.02 MAINTENANCE OF OFFICE OR AGENCY. FelCor LP shall maintain
in the Borough of Manhattan, The City of New York an office or agency where
Notes may be surrendered for registration of transfer or exchange or for
presentation for payment and where notices and demands to or upon FelCor LP in
respect of the Notes and this Indenture may be served. FelCor LP will give
prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. If at any time FelCor LP shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the address of the Trustee set forth in Section 10.02.

         FelCor LP may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided
that no such designation or rescission shall in any manner relieve FelCor LP of
its obligation to maintain an office or agency in the Borough of Manhattan, The
City of New York for such purposes. FelCor LP shall give prompt written

                                       34
<PAGE>   41

notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency.

         FelCor LP hereby initially designates SunTrust Bank c/o Harris Trust
Company of New York, 88 Pine Street, 19th Floor, New York, New York 10005, as
agent for FelCor LP, located in the Borough of Manhattan, The City of New York
as such office of FelCor LP in accordance with Section 2.04.

         SECTION 4.03 LIMITATION ON INDEBTEDNESS.

         (a) Neither FelCor LP nor FelCor shall, and neither FelCor LP nor
FelCor shall permit any of their respective Restricted Subsidiaries to, Incur
any Indebtedness if, immediately after giving effect to the Incurrence of such
additional Indebtedness, the aggregate principal amount of all outstanding
Indebtedness of FelCor LP, FelCor and their respective Restricted Subsidiaries
on a consolidated basis determined in accordance with GAAP is greater than 60%
of Adjusted Total Assets.

         (b) Neither FelCor LP nor FelCor shall, and neither FelCor LP nor
FelCor shall permit any of their respective Restricted Subsidiaries to, Incur
any Subsidiary Debt or any Secured Indebtedness if, immediately after giving
effect to the Incurrence of such additional Subsidiary Debt or Secured
Indebtedness, the aggregate principal amount of all outstanding Subsidiary Debt
and Secured Indebtedness of FelCor LP, FelCor and their respective Restricted
Subsidiaries on a consolidated basis is greater than 45% of Adjusted Total
Assets.

         (c) Neither FelCor LP nor FelCor shall, and neither FelCor LP nor
FelCor shall permit any of their respective Restricted Subsidiaries to, Incur
any Indebtedness (other than the Existing Notes, the Subsidiary Guarantees
relating to the Existing Notes and other Indebtedness existing on the Closing
Date); provided that FelCor LP or FelCor or any of their respective Restricted
Subsidiaries may Incur Indebtedness if, after giving effect to the Incurrence of
such Indebtedness and the receipt and application of the proceeds therefrom, the
Interest Coverage Ratio of FelCor LP, FelCor and their respective Restricted
Subsidiaries on a consolidated basis would be greater than 2.0 to 1.

         (d) Notwithstanding paragraphs (a), (b) or (c) of this Section 4.03,
FelCor LP or FelCor or any of their respective Restricted Subsidiaries (except
as specified below) may Incur each and all of the following:

         (i) Indebtedness outstanding under the Line of Credit at any time in an
         aggregate principal amount not to exceed $700 million less any amount
         of such Indebtedness permanently repaid as provided under Section 4.10;

         (ii) Indebtedness owed (A) to FelCor LP or FelCor evidenced by an
         unsubordinated promissory note or (B) to any Restricted Subsidiary;
         provided that any event which results in any such Restricted Subsidiary
         ceasing to be a Restricted Subsidiary or any subsequent transfer of
         such Indebtedness (other than to FelCor LP or FelCor or any other
         Restricted Subsidiary) shall be deemed, in each case, to constitute an
         Incurrence of such Indebtedness not permitted by this clause (ii);

                                       35
<PAGE>   42

         (iii) Indebtedness issued in exchange for, or the net proceeds of which
         are used to refinance or refund, outstanding Indebtedness (other than
         Indebtedness Incurred under clause (i), (ii), (iv) or (vi) of this
         paragraph) and any refinancings thereof in an amount not to exceed the
         amount so refinanced or refunded (plus premiums, accrued interest, fees
         and expenses); provided that Indebtedness the proceeds of which are
         used to refinance or refund the Notes or Indebtedness that is pari
         passu with or subordinated in right of payment to, the Notes shall only
         be permitted under this clause (iii) if (A) in case the Notes are
         refinanced in part or the Indebtedness to be refinanced is pari passu
         with the Notes, such new Indebtedness, by its terms or by the terms of
         any agreement or instrument pursuant to which such new Indebtedness is
         outstanding, is pari passu with or is expressly made subordinate in
         right of payment to the remaining Notes, (B) in case the Indebtedness
         to be refinanced is subordinated in right of payment to the Notes, such
         new Indebtedness, by its terms or by the terms of any agreement or
         instrument pursuant to which such new Indebtedness is issued or remains
         outstanding, is expressly made subordinate in right of payment to the
         Notes at least to the extent that the Indebtedness to be refinanced is
         subordinated to the Notes and (C) such new Indebtedness, determined as
         of the date of Incurrence of such new Indebtedness, does not mature
         prior to the Stated Maturity of the Indebtedness to be refinanced or
         refunded, and the Average Life of such new Indebtedness is at least
         equal to the remaining Average Life of the Indebtedness to be
         refinanced or refunded; and provided further that in no event may
         Indebtedness of FelCor LP or FelCor that is pari passu with or
         subordinated in right of payment to the Notes be refinanced by means of
         any Indebtedness of any Restricted Subsidiary pursuant to this clause
         (iii);

         (iv) Indebtedness (A) in respect of performance, surety or appeal bonds
         provided in the ordinary course of business, (B) under Currency
         Agreements and Interest Rate Agreements; provided that such agreements
         (1) are designed solely to protect FelCor LP or FelCor or any of their
         respective Restricted Subsidiaries against fluctuations in foreign
         currency exchange rates or interest rates and (2) do not increase the
         Indebtedness of the obligor outstanding at any time other than as a
         result of fluctuations in foreign currency exchange rates or interest
         rates or by reason of fees, indemnities and compensation payable
         thereunder, and (C) arising from agreements providing for
         indemnification, adjustment of purchase price or similar obligations,
         or from Guarantees or letters of credit, surety bonds or performance
         bonds securing any obligations of FelCor LP or FelCor or any of their
         respective Restricted Subsidiaries pursuant to such agreements, in any
         case Incurred in connection with the disposition of any business,
         assets or Restricted Subsidiary (other than Guarantees of Indebtedness
         Incurred by any Person acquiring all or any portion of such business,
         assets or Restricted Subsidiary for the purpose of financing such
         acquisition), in a principal amount not to exceed the gross proceeds
         actually received by FelCor LP, FelCor and their respective Restricted
         Subsidiaries on a consolidated basis in connection with such
         disposition;

         (v) Indebtedness of FelCor LP or FelCor, to the extent the net proceeds
         thereof are promptly (A) used to purchase Notes tendered in an Offer to
         Purchase made as a result of a Change in Control or (B) deposited to
         defease the Notes in accordance with Section 8.02 or 8.03; or

                                       36
<PAGE>   43

         (vi) Guarantees of the Notes and the Existing Notes and Guarantees of
         Indebtedness of FelCor LP or FelCor by any of their respective
         Restricted Subsidiaries provided the guarantee of such Indebtedness is
         permitted by and made in accordance with Section 4.07.

         (e) Notwithstanding any other provision of this Section 4.03, the
maximum amount of Indebtedness that FelCor LP or FelCor or any of their
respective Restricted Subsidiaries may Incur pursuant to this Section 4.03 shall
not be deemed to be exceeded, with respect to any outstanding Indebtedness due
solely to the result of fluctuations in the exchange rates of currencies.

         (f) For purposes of determining any particular amount of Indebtedness
under this Section 4.03, (1) Indebtedness Incurred under the Line of Credit on
or prior to the Closing Date shall be treated as Incurred pursuant to clause (i)
of paragraph (d) of this Section 4.03, (2) Guarantees, Liens or obligations with
respect to letters of credit supporting Indebtedness otherwise included in the
determination of such particular amount shall not be included and (3) any Liens
granted pursuant to the equal and ratable provisions referred to in Section 4.09
shall not be treated as Indebtedness. For purposes of determining compliance
with Section 4.03, in the event that an item of Indebtedness meets the criteria
of more than one of the types of Indebtedness described in the above clauses
(other than Indebtedness referred to in clause (2) of the preceding sentence),
each of FelCor LP and FelCor, in its sole discretion, shall classify such item
of Indebtedness and only be required to include the amount and type of such
Indebtedness in one of such clauses; provided that FelCor LP and FelCor must
classify such item of Indebtedness in an identical fashion.

         SECTION 4.04 LIMITATION ON RESTRICTED PAYMENTS. Neither FelCor LP nor
FelCor shall, and neither FelCor LP nor FelCor shall permit any of their
respective Restricted Subsidiaries to, directly or indirectly, (i) declare or
pay any dividend or make any distribution on or with respect to its Capital
Stock (other than (x) dividends or distributions payable solely in shares of its
Capital Stock (other than Disqualified Stock) or in options, warrants or other
rights to acquire shares of such Capital Stock and (y) pro rata dividends or
distributions on Common Stock of FelCor LP or any Restricted Subsidiary held by
minority stockholders) held by Persons other than FelCor LP or FelCor or any of
their respective Restricted Subsidiaries, (ii) purchase, redeem, retire or
otherwise acquire for value any shares of Capital Stock of (A) FelCor LP, FelCor
or an Unrestricted Subsidiary (including options, warrants or other rights to
acquire such shares of Capital Stock) held by any Person other than FelCor LP or
FelCor or any of their respective Restricted Subsidiaries unless in connection
with such purchase the Unrestricted Subsidiary is designated as a Restricted
Subsidiary or (B) a Restricted Subsidiary (including options, warrants or other
rights to acquire such shares of Capital Stock) held by an Affiliate of FelCor
LP or FelCor (other than a Wholly Owned Restricted Subsidiary) or any holder (or
any Affiliate of such holder) of 5% or more of the Capital Stock of FelCor LP or
FelCor, (iii) make any voluntary or optional principal payment, or voluntary or
optional redemption, repurchase, defeasance, or other acquisition or retirement
for value, of Indebtedness of FelCor LP or FelCor that is subordinated in right
of payment to the Notes or (iv) make an Investment, other than a Permitted
Investment, in any Person (such payments or any other actions described in
clauses (i) through (iv) above being collectively "Restricted Payments") if, at
the time of, and after giving effect to, the proposed Restricted Payment: (A) a
Default or Event of Default shall have occurred

                                       37
<PAGE>   44

and be continuing, (B) FelCor LP or FelCor could not Incur at least $1.00 of
Indebtedness under paragraphs (a), (b) and (c) of Section 4.03 or (C) the
aggregate amount of all Restricted Payments (the amount, if other than in cash,
to be determined in good faith by the Board of Directors, whose determination
shall be conclusive and evidenced by a Board Resolution) made after the Closing
Date shall exceed the sum of (1) 95% of the aggregate amount of the Funds From
Operations (or, if the Funds From Operations is a loss, minus 100% of the amount
of such loss) (determined by excluding income resulting from transfers of assets
by FelCor LP or FelCor or any of their respective Restricted Subsidiaries to an
Unrestricted Subsidiary) accrued on a cumulative basis during the period (taken
as one accounting period) beginning on the first day of the fiscal quarter in
which the Closing Date occurs and ending on the last day of the last fiscal
quarter preceding the Transaction Date for which reports have been filed with
the Commission or provided to the Trustee pursuant to Section 4.17 plus (2) the
aggregate Net Cash Proceeds received by FelCor LP or FelCor after the Closing
Date from the issuance and sale permitted by this Indenture of its Capital Stock
(other than Disqualified Stock) to a Person who is not a Subsidiary of FelCor LP
or FelCor, including an issuance or sale permitted by this Indenture of
Indebtedness of FelCor LP or FelCor for cash subsequent to the Closing Date upon
the conversion of such Indebtedness into Capital Stock (other than Disqualified
Stock) of FelCor LP or FelCor, or from the issuance to a Person who is not a
Subsidiary of FelCor LP or FelCor of any options, warrants or other rights to
acquire Capital Stock of FelCor LP or FelCor (in each case, exclusive of any
Disqualified Stock or any options, warrants or other rights that are redeemable
at the option of the holder, or are required to be redeemed, prior to the Stated
Maturity of the Notes), plus (3) an amount equal to the net reduction in
Investments (other than reductions in Permitted Investments) in any Person
resulting from payments of interest on Indebtedness, dividends, repayments of
loans or advances, or other transfers of assets, in each case to FelCor LP or
FelCor or any of their respective Restricted Subsidiaries or from the Net Cash
Proceeds from the sale of any such Investment (except, in each case, to the
extent any such payment or proceeds are included in the calculation of Funds
From Operations) or from redesignations of Unrestricted Subsidiaries as
Restricted Subsidiaries (valued in each case as provided in the definition of
"Investments") not to exceed, in each case, the amount of Investments previously
made by FelCor LP, FelCor and their respective Restricted Subsidiaries in such
Person or Unrestricted Subsidiary, plus (4) the purchase price of noncash
tangible assets acquired in exchange for an issuance of Capital Stock (other
than Disqualified Stock) of FelCor LP or FelCor subsequent to the Closing Date.

         Notwithstanding the foregoing, FelCor LP or FelCor may declare or pay
any dividend or make any distribution that is necessary to maintain FelCor's
status as a REIT under the Code if (1) the aggregate principal amount of all
outstanding Indebtedness of FelCor LP or FelCor on a consolidated basis at such
time is less than 60% of Adjusted Total Assets and (2) no Default or Event of
Default shall have occurred and be continuing.

         The foregoing provisions of this Section 4.04 shall not be violated by
reason of:

         (i) the payment of any dividend within 60 days after the date of
         declaration thereof if, at said date of declaration, such payment would
         comply with the foregoing paragraph;

         (ii) the redemption, repurchase, defeasance or other acquisition or
         retirement for value of Indebtedness that is subordinated in right of
         payment to the Notes including

                                       38
<PAGE>   45

         premium, if any, and accrued and unpaid interest, with the proceeds of,
         or in exchange for, Indebtedness Incurred under clause (iii) of
         paragraph (d) of Section 4.03;

         (iii) the repurchase, redemption or other acquisition of Capital Stock
         of FelCor LP or FelCor or an Unrestricted Subsidiary (or options,
         warrants or other rights to acquire such Capital Stock) in exchange
         for, or out of the proceeds of a substantially concurrent issuance of,
         shares of Capital Stock (other than Disqualified Stock) of FelCor LP or
         FelCor (or options, warrants or other rights to acquire such Capital
         Stock);

         (iv) the making of any principal payment on, or the repurchase,
         redemption, retirement, defeasance or other acquisition for value of,
         Indebtedness of FelCor LP or FelCor which is subordinated in right of
         payment to the Notes in exchange for, or out of the proceeds of, a
         substantially concurrent issuance of, shares of the Capital Stock
         (other than Disqualified Stock) of FelCor LP or FelCor (or options,
         warrants or other rights to acquire such Capital Stock);

         (v) payments or distributions, to dissenting stockholders pursuant to
         applicable law pursuant to or in connection with a consolidation,
         merger or transfer of assets that complies with the provisions of the
         Indenture applicable to mergers, consolidations and transfers of all or
         substantially all of the property and assets of FelCor LP or FelCor; or

         (vi) Investments in any Person or Persons in an aggregate amount not to
         exceed $150 million; or

         (vii) Restricted Payments in an aggregate amount not to exceed $200
         million, provided that at the time of, and after giving effect to, the
         proposed Restricted Payment FelCor LP and FelCor could have incurred at
         least $1.00 of Indebtedness under paragraphs (a), (b) and (c) of
         Section 4.03;

         provided that, except in the case of clauses (i) and (iii), no Default
         or Event of Default shall have occurred and be continuing or occur as a
         direct consequence of the actions or payments set forth therein.

Each Restricted Payment permitted pursuant to this paragraph (other than the
Restricted Payment referred to in clause (ii) of this paragraph, an exchange of
Capital Stock for Capital Stock or Indebtedness referred to in clause (iii) or
(iv) of this paragraph, or an Investment referred to in clause (vi) of this
paragraph or a Restricted Payment referred to in clause (vii) of this
paragraph), and the Net Cash Proceeds from any issuance of Capital Stock
referred to in clauses (iii) and (iv), shall be included in calculating whether
the conditions of clause (C) of the first paragraph of this Section 4.04 have
been met with respect to any subsequent Restricted Payments.

         Notwithstanding anything to the contrary contained in this Section
4.04, except in the case of clauses (iii) and (v) of the immediately preceding
paragraph, in no case shall FelCor LP, FelCor or any of their respective
Restricted Subsidiaries, directly or indirectly, purchase, redeem or otherwise
acquire any Capital Stock unless at the time of, and after giving effect to,
such proposed Restricted Payment, the ratio of Indebtedness to Consolidated
EBITDA of FelCor LP, FelCor and their respective Restricted Subsidiaries on a
consolidated basis would be equal to or less than 4.85 to 1.

                                       39
<PAGE>   46

         SECTION 4.05 LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS
AFFECTING RESTRICTED SUBSIDIARIES. Neither FelCor LP nor FelCor shall, and
neither FelCor LP nor FelCor shall permit any of their respective Restricted
Subsidiaries to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any Restricted Subsidiary to (i) pay dividends or make any other
distributions permitted by applicable law on any Capital Stock of such
Restricted Subsidiary owned by FelCor LP or FelCor or any of their respective
Restricted Subsidiaries, (ii) pay any Indebtedness owed to FelCor LP, FelCor or
any other Restricted Subsidiary, (iii) make loans or advances to FelCor LP,
FelCor or any other Restricted Subsidiary or (iv) transfer its property or
assets to FelCor LP, FelCor or any other Restricted Subsidiary.

         The foregoing provisions shall not restrict any encumbrances or
         restrictions:

         (i) existing on the Closing Date in the Indenture, the Line of Credit,
         and any other agreement in effect on the Closing Date to the extent
         listed on Schedule A to this Indenture, and any extensions,
         refinancings, renewals or replacements of such agreements; provided
         that the encumbrances and restrictions in any such extensions,
         refinancings, renewals or replacements are no less favorable in any
         material respect to the Holders than those encumbrances or restrictions
         that are then in effect and that are being extended, refinanced,
         renewed or replaced;

         (ii) existing under or by reason of applicable law;

         (iii) existing with respect to any Person or the property or assets of
         such Person acquired by FelCor LP, FelCor or any Restricted Subsidiary,
         existing at the time of such acquisition and not incurred in
         contemplation thereof, which encumbrances or restrictions are not
         applicable to any Person or the property or assets of any Person other
         than such Person or the property or assets of such Person so acquired;

         (iv) in the case of clause (iv) of the first paragraph of this Section
         4.05, (A) that restrict in a customary manner the subletting,
         assignment or transfer of any property or asset that is a lease,
         license, conveyance or contract or similar property or asset, (B)
         existing by virtue of any transfer of, agreement to transfer, option or
         right with respect to, or Lien on, any property or assets of FelCor LP,
         FelCor or any Restricted Subsidiary not otherwise prohibited by this
         Indenture or (C) arising or agreed to in the ordinary course of
         business, not relating to any Indebtedness, and that do not,
         individually or in the aggregate, detract from the value of property or
         assets of FelCor LP, FelCor or any Restricted Subsidiary in any manner
         material to FelCor LP, FelCor and their respective Restricted
         Subsidiaries taken as a whole;

         (v) with respect to a Restricted Subsidiary and imposed pursuant to an
         agreement that has been entered into for the sale or disposition of all
         or substantially all of the Capital Stock of, or property and assets
         of, such Restricted Subsidiary; or

         (vi) contained in the terms of any Indebtedness or any agreement
         pursuant to which such Indebtedness was issued if (A) the encumbrance
         or restriction applies only in the event of a payment default or a
         default with respect to a financial covenant contained in

                                       40
<PAGE>   47

         such Indebtedness or agreement, (B) the encumbrance or restriction is
         not materially more disadvantageous to the Holders of the Notes than is
         customary in comparable financings (as determined by FelCor LP and
         FelCor) and (C) each of FelCor LP and FelCor determines that any such
         encumbrance or restriction will not materially affect such Persons'
         ability to make principal or interest payments on the Notes.

         Nothing contained in this Section 4.05 shall prevent FelCor LP, FelCor
or any Restricted Subsidiary from (1) creating, incurring, assuming or suffering
to exist any Liens otherwise permitted in Section 4.09 or (2) restricting the
sale or other disposition of property or assets of FelCor LP or FelCor or any of
their respective Restricted Subsidiaries that secure Indebtedness of FelCor LP,
FelCor or any of their respective Restricted Subsidiaries.

         SECTION 4.06 LIMITATION ON THE ISSUANCE AND SALE OF CAPITAL STOCK OF
RESTRICTED SUBSIDIARIES. Neither FelCor LP nor FelCor shall sell, and neither
FelCor LP nor FelCor shall permit any of their respective Restricted
Subsidiaries, directly or indirectly, to issue or sell, any shares of Capital
Stock of a Restricted Subsidiary (including options, warrants or other rights to
purchase shares of such Capital Stock) except (i) to FelCor LP, FelCor or a
Wholly Owned Restricted Subsidiary; (ii) issuances of director's qualifying
shares or sales to individuals of shares of Restricted Subsidiaries, to the
extent required by applicable law or to the extent necessary to obtain local
liquor licenses; (iii) if, immediately after giving effect to such issuance or
sale, such Restricted Subsidiary would no longer constitute a Subsidiary and any
Investment in such Person remaining after giving effect to such issuance or sale
would have been permitted to be made under Section 4.04 if made on the date of
such issuance or sale or (iv) sales of not greater than 20% of the Capital Stock
of a newly-created Restricted Subsidiary made in connection with, or in
contemplation of, the acquisition or development by such Restricted Subsidiary
of one or more properties to any Person that is, or is an Affiliate of, the
entity that provides, franchise, management or other services, as the case may
be, to one or more properties owned by such Restricted Subsidiary.

         SECTION 4.07 LIMITATION ON ISSUANCES OF GUARANTEES BY RESTRICTED
SUBSIDIARIES. Neither FelCor LP nor FelCor shall permit any of their respective
Restricted Subsidiaries, directly or indirectly, to Guarantee any Indebtedness
of FelCor LP or FelCor which is pari passu with or subordinate in right of
payment to the Notes ("Guaranteed Indebtedness"), unless (i) such Restricted
Subsidiary simultaneously executes and delivers a supplemental indenture to this
Indenture providing for a Subsidiary Guarantee by such Restricted Subsidiary and
(ii) such Restricted Subsidiary waives and will not in any manner whatsoever
claim or take the benefit or advantage of, any rights of reimbursement,
indemnity or subrogation or any other rights against FelCor LP, FelCor or any
other Restricted Subsidiary as a result of any payment by such Restricted
Subsidiary under its Subsidiary Guarantee; provided that this Section 4.07 shall
not be applicable to any Guarantee of any Restricted Subsidiary that existed at
the time such Person became a Restricted Subsidiary and was not Incurred in
connection with, or in contemplation of, such person becoming a Restricted
Subsidiary. If the Guaranteed Indebtedness is (A) pari passu with the Notes,
then the Guarantee of such Guaranteed Indebtedness shall be pari passu with, or
subordinated to, the Subsidiary Guarantee or (B) subordinated to the Notes, then
the Guarantee of such Guarantee Indebtedness shall be subordinated to the
Subsidiary Guarantee at least to the extent that the Guaranteed Indebtedness is
subordinated to the Notes.

                                       41
<PAGE>   48

         Notwithstanding the foregoing, any Subsidiary Guarantee by a Restricted
Subsidiary may provide by its terms that it shall be automatically and
unconditionally released and discharged upon (i) any sale, exchange or transfer,
to any Person not an Affiliate of FelCor LP or FelCor, of all of Capital Stock
held by FelCor LP, FelCor and their respective Restricted Subsidiaries in, or
all or substantially all the assets of, such Restricted Subsidiary (which sale,
exchange or transfer is not prohibited by this Indenture) or (ii) the release or
discharge of the Guarantee which resulted in the creation of such Subsidiary
Guarantee, except a discharge or release by or as a result of payment under such
Guarantee.

         SECTION 4.08 LIMITATION ON TRANSACTIONS WITH AFFILIATES. Neither FelCor
LP nor FelCor shall, and neither FelCor LP nor FelCor shall permit any of their
respective Restricted Subsidiaries to, directly or indirectly, enter into, renew
or extend any transaction (including, without limitations, the purchase, sale,
lease or exchange of property or assets, or the rendering of any service) with
any holder (or any Affiliate of such holder) of 5% or more of any class of
Capital Stock of FelCor LP or FelCor or with any Affiliate of FelCor LP or
FelCor or any of their respective Restricted Subsidiaries, except upon fair and
reasonable terms no less favorable to FelCor LP, FelCor or such Restricted
Subsidiary than could be obtained, at the time of such transaction or, if such
transaction is pursuant to a written agreement, at the time of the execution of
the agreement providing therefor, in a comparable arm's-length transaction with
a Person that is not such a holder or an Affiliate.

         The foregoing limitation shall not limit, and shall not apply to:

         (i) transactions (A) approved by a majority of the independent
         directors of FelCor or (B) for which FelCor LP, FelCor or any
         Restricted Subsidiary delivers to the Trustee a written opinion of a
         nationally recognized investment banking firm stating that the
         transaction is fair to FelCor LP, FelCor or such Restricted Subsidiary
         from a financial point of view;

         (ii) any transaction solely between FelCor LP or FelCor and any of
         their respective Wholly Owned Restricted Subsidiaries or solely between
         Wholly Owned Restricted Subsidiaries;

         (iii) the payment of reasonable and customary fees and expenses to
         directors of FelCor who are not employees of FelCor;

         (iv) any payments or other transactions pursuant to any tax-sharing
         agreement between FelCor LP or FelCor and any other Person with which
         FelCor LP or FelCor files a consolidated tax return or with which
         FelCor LP or FelCor is part of a consolidated group for tax purposes;
         or

         (v) any Restricted Payments not prohibited by Section 4.04.

         Notwithstanding the foregoing, any transaction or series of related
transactions covered by the first paragraph of this Section 4.08 and not covered
by clauses (ii) through (v) of this paragraph, (a) the aggregate amount of which
exceeds $2 million in value or relates to the leasing of one or more hotel
properties to DJONT, must be approved or determined to be fair in the manner
provided for in clause (i)(A) or (B) above and (b) the aggregate amount of which

                                       42
<PAGE>   49

exceeds $5 million in value, must be determined to be fair in the manner
provided for in clause (i)(B) above.

         SECTION 4.09 LIMITATION ON LIENS. Neither FelCor LP nor FelCor shall
secure any Indebtedness under the Line of Credit by a Lien unless
contemporaneously therewith effective provision is made to secure the Notes
equally and ratably with the Indebtedness under the Line of Credit for so long
as the Indebtedness under the Line of Credit is secured by such Lien.

         SECTION 4.10 LIMITATION ON ASSET SALES. Neither FelCor LP nor FelCor
shall, and neither FelCor LP or FelCor shall permit any of their respective
Restricted Subsidiaries to, consummate any Asset Sale, unless (i) the
consideration received by FelCor LP, FelCor or such Restricted Subsidiary is at
least equal to the fair market value of the assets sold or disposed of and (ii)
at least 75% of the consideration received consists of cash or Temporary Cash
Investments; provided, with respect to the sale of one or more hotel properties
that up to 75% of the consideration may consist of indebtedness of the purchaser
of such hotel properties; provided, further, that such indebtedness is secured
by a first priority Lien on the hotel property or properties sold. In the event
and to the extent that the Net Cash Proceeds received by FelCor LP, FelCor or
such Restricted Subsidiary from one or more Asset Sales occurring on or after
the Closing Date in any period of 12 consecutive months exceed 10% of Adjusted
Consolidated Net Tangible Assets (determined as of the date closest to the
commencement of such 12-month period for which a consolidated balance sheet of
FelCor LP, FelCor and their respective Restricted Subsidiaries has been filed
with the Commission or provided to the Trustee pursuant to Section 4.17), then
FelCor LP or FelCor shall or shall cause the relevant Restricted Subsidiary to
(i) within twelve months after the date Net Cash Proceeds so received exceed 10%
of Adjusted Consolidated Net Tangible Assets (A) apply an amount equal to such
excess Net Cash Proceeds to permanently reduce Senior Indebtedness of FelCor LP,
FelCor, or any Restricted Subsidiary or Indebtedness of any other Restricted
Subsidiary, in each case owing to a Person other than FelCor LP, FelCor or any
of their respective Restricted Subsidiaries or (B) invest an equal amount, or
the amount not so applied pursuant to clause (A) (or enter into a definitive
agreement committing to so invest within 12 months after the date of such
agreement), in property or assets (other than current assets) of a nature or
type or that are used in a business (or in a Restricted Subsidiary having
property and assets of a nature or type, or engaged in a business) similar or
related to the nature or type of the property and assets of, or the business of,
FelCor LP or FelCor or any of their respective Restricted Subsidiaries existing
on the date of such investment and (ii) apply (no later than the end of the
12-month period referred to in clause (i)) such excess Net Cash Proceeds (to the
extent not applied pursuant to clause (i)) as provided in the following
paragraph of this Section 4.10. The amount of such excess Net Cash Proceeds
required to be applied (or to be committed to be applied) during such 12-month
period as set forth in clause (i) of the preceding sentence and not applied as
so required by the end of such period shall constitute "Excess Proceeds."

         If, as of the first day of any calendar month, the aggregate amount of
Excess Proceeds not previously subject to an Offer to Purchase pursuant to this
Section 4.10 totals at least $10 million, FelCor LP shall commence, not later
than the fifteenth Business Day of such month, and consummate an Offer to
Purchase from the Holders on a pro rata basis an aggregate principal amount of
Notes equal to the Excess Proceeds on such date, at a purchase price equal to
100% of

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<PAGE>   50

the principal amount of the Notes, plus, in each case, accrued interest (if any)
to the Payment Date.

         SECTION 4.11 REPURCHASE OF NOTES UPON A CHANGE OF CONTROL. FelCor LP
shall commence, within 30 days of the occurrence of a Change of Control, and
consummate an Offer to Purchase for all Notes then outstanding, at a purchase
price equal to 101% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the Payment Date.

         SECTION 4.12 EXISTENCE. Subject to Articles Four and Five of this
Indenture, FelCor LP and the Guarantors shall do or cause to be done all things
necessary to preserve and keep in full force and effect their existence and the
existence of each Restricted Subsidiary in accordance with the respective
organizational documents of FelCor LP, the Guarantors and each Restricted
Subsidiary and the rights (whether pursuant to charter, partnership certificate,
agreement, statute or otherwise), material licenses and franchises of FelCor LP,
the Guarantors and each Restricted Subsidiary; provided that neither FelCor nor
FelCor LP shall be required to preserve any such right, license or franchise, or
the existence of any Restricted Subsidiary or Subsidiary Guarantor, if the
maintenance or preservation thereof is no longer desirable in the conduct of the
business of FelCor LP, the Guarantors and their Restricted Subsidiaries taken as
a whole.

         SECTION 4.13 PAYMENT OF TAXES AND OTHER CLAIMS. FelCor and FelCor LP
shall pay or discharge and shall cause each of their respective Restricted
Subsidiaries to pay or discharge, or cause to be paid or discharged, before the
same shall become delinquent (i) all material taxes, assessments and
governmental charges levied or imposed upon (a) FelCor and FelCor LP or any such
Restricted Subsidiary, (b) the income or profits of any such Restricted
Subsidiary which is a corporation or (c) the property of FelCor, FelCor LP or
any such Restricted Subsidiaries and (ii) all material lawful claims for labor,
materials and supplies that, if unpaid, might by law become a lien upon the
property of FelCor, FelCor LP or any such Restricted Subsidiary; provided that
FelCor and FelCor LP shall not be required to pay or discharge, or cause to be
paid or discharged, any such tax, assessment, charge or claim the amount,
applicability or validity of which is being contested in good faith by
appropriate proceedings and for which adequate reserves have been established.

         SECTION 4.14 MAINTENANCE OF PROPERTIES AND INSURANCE. FelCor and FelCor
LP shall cause all properties used or useful in the conduct of their business or
the business of any of their Restricted Subsidiaries, to be maintained and kept
in good condition, repair and working order and supplied with all necessary
equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
FelCor or FelCor LP may be necessary so that the business carried on in
connection therewith may be properly conducted at all times; provided that
nothing in this Section 4.14 shall prevent FelCor, FelCor LP or any such
Restricted Subsidiary from discontinuing the use, operation or maintenance of
any of such properties or disposing of any of them, if such discontinuance or
disposal is, in the judgment of FelCor, FelCor LP, desirable in the conduct of
the business of FelCor, FelCor LP or such Restricted Subsidiary.

         Each of FelCor and FelCor LP shall provide or cause to be provided, for
itself and its Restricted Subsidiaries, insurance (including appropriate
self-insurance) against loss or damage of the kinds customarily insured against
by corporations similarly situated and owning like

                                       44
<PAGE>   51

properties, with reputable insurers or with the government of the United States
of America, or an agency or instrumentality thereof, in such amounts, with such
deductibles and by such methods as shall be customary for corporations similarly
situated in the industry in which FelCor, FelCor LP or such Restricted
Subsidiary, as the case may be, is then conducting business.

         SECTION 4.15 NOTICE OF DEFAULTS. In the event that FelCor LP becomes
aware of any Default or Event of Default, FelCor LP, promptly after it becomes
aware thereof, shall give written notice thereof to the Trustee.

         SECTION 4.16 COMPLIANCE CERTIFICATES.

         (a) FelCor and FelCor LP shall deliver to the Trustee, within 45 days
after the end of each fiscal quarter (90 days after the end of the last fiscal
quarter of each year), an Officers' Certificate stating whether or not the
signers know of any Default or Event of Default that occurred during such fiscal
quarter. In the case of the Officers' Certificate delivered within 90 days of
the end of FelCor's and FelCor LP's fiscal year, such certificate shall contain
a certification from the principal executive officer, principal financial
officer or principal accounting officer that a review has been conducted of the
activities of FelCor and FelCor LP and their Restricted Subsidiaries and
FelCor's and FelCor LP's and their Restricted Subsidiaries' performance under
this Indenture and that, to the knowledge of such Officers, FelCor and FelCor LP
have complied with all conditions and covenants under this Indenture. For
purposes of this Section 4.16, such compliance shall be determined without
regard to any period of grace or requirement of notice provided under this
Indenture. If they do know of such a Default or Event of Default, the
certificate shall describe any such Default or Event of Default and its status.
The first certificate to be delivered pursuant to this Section 4.16(a) shall be
for the first fiscal quarter beginning after the execution of this Indenture.

         (b) So long as (and to the extent) not prohibited by the then current
recommendations of the American Institute of Certified Public Accountants,
FelCor and FelCor LP shall deliver to the Trustee, within 90 days after the end
of FelCor's and FelCor LP's fiscal year, a certificate signed by FelCor's and
FelCor LP's independent certified public accountants stating (i) that their
audit examination has included a review of the terms of this Indenture and the
Notes as they relate to accounting matters, (ii) that they have read the most
recent Officers' Certificate delivered to the Trustee pursuant to paragraph (a)
of this Section 4.16 and (iii) whether, in connection with their audit
examination, anything came to their attention that caused them to believe that
FelCor and FelCor LP were not in compliance with any of the terms, covenants,
provisions or conditions of Article Four and Section 5.01 of this Indenture as
they pertain to accounting matters and, if any Default or Event of Default has
come to their attention, specifying the nature and period of existence thereof;
provided that such independent certified public accountants shall not be liable
in respect of such statement by reason of any failure to obtain knowledge of any
such Default or Event of Default that would not be disclosed in the course of an
audit examination conducted in accordance with generally accepted auditing
standards in effect at the date of such examination.

         (c) Within 90 days of the end of each of FelCor and FelCor LP's fiscal
years, FelCor and FelCor LP shall deliver to the Trustee a list of all
Significant Subsidiaries. The Trustee shall have no duty with respect to any
such list except to keep it on file and available for inspection by the Holders.

                                       45
<PAGE>   52

         SECTION 4.17 COMMISSION REPORTS AND REPORTS TO HOLDERS. At all times
from and after the date of this Indenture, whether or not FelCor or FelCor LP is
then required to file reports with the Commission, FelCor and FelCor LP shall
file with the Commission all such reports and other information as they would be
required to file with the Commission by Sections 13(a) or 15(d) under the
Exchange Act if they were subject thereto; provided that, if filing such
documents by FelCor LP or FelCor with the Commission is not permitted under
Exchange Act, FelCor LP or FelCor shall provide such documents to the Trustee
and upon written request supply copies of such documents to any prospective
Holder; provided, further, that if the rules and regulations of the Commission
permit FelCor LP and FelCor to file combined reports or information pursuant to
the Exchange Act, FelCor LP and FelCor may file combined reports and
information. FelCor LP and FelCor shall supply the Trustee and each Holder or
shall supply to the Trustee for forwarding to each such Holder, without cost to
such Holder, copies of such reports and other information. Delivery of such
reports, information and documents to the Trustee is for informational purposes
only and the Trustee's receipt of such shall not constitute constructive notice
of any information contained therein or determinable from information contained
therein, including FelCor or FelCor LP's compliance with any of their covenants
hereunder (as to which the Trustee is entitled to rely exclusively on Officers'
Certificates). In addition, upon the request of any Holder or any prospective
purchaser of the Notes designated by a Holder, FelCor LP shall supply to such
Holder or such prospective purchaser the information required under Rule 144A
under the Securities Act. FelCor LP also shall comply with the other provisions
of TIA Section 314(a).

         SECTION 4.18 WAIVER OF STAY, EXTENSION OR USURY LAWS. FelCor LP
covenants (to the extent that it may lawfully do so) that it shall not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or other law
that would prohibit or forgive FelCor LP from paying all or any portion of the
principal of, premium, if any, or interest on the Notes as contemplated herein,
wherever enacted, now or at any time hereafter in force, or that may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) FelCor LP hereby expressly waives all benefit or advantage of
any such law and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.

         SECTION 4.19 LIMITATION ON SALE-LEASEBACK TRANSACTIONS. Neither FelCor
LP nor FelCor shall, and neither FelCor LP nor FelCor shall permit any of their
respective Restricted Subsidiaries to, enter into any sale-leaseback transaction
involving any of its assets or properties whether now owned or hereafter
acquired, whereby any of them sells or transfers such assets or properties and
then or thereafter leases such assets or properties or any substantial part
thereof.

         The foregoing restriction shall not apply to any sale-leaseback
transaction if (i) the lease is for a period, including renewal rights, of not
in excess of three years; (ii) the lease secures or relates to industrial
revenue or pollution control bonds; (iii) the transaction is solely between
FelCor LP or FelCor and any Wholly Owned Restricted Subsidiary or solely between
Wholly Owned Restricted Subsidiaries; or (iv) FelCor LP or FelCor or any of
their respective Restricted Subsidiaries, within 12 months after the sale or
transfer of any assets or properties is completed, applies an amount not less
than the net proceeds received from such sale in accordance with clause (A) or
(B) of the first paragraph of Section 4.10.

                                       46
<PAGE>   53

         SECTION 4.20 MAINTENANCE OF TOTAL UNENCUMBERED ASSETS. FelCor LP,
FelCor and their respective Restricted Subsidiaries shall maintain Total
Unencumbered Assets of not less than 150% of the aggregate outstanding principal
amount of the Unsecured Indebtedness of FelCor LP, FelCor and their respective
Restricted Subsidiaries on a consolidated basis.

         SECTION 4.21 INVESTMENT GRADE RATING. Notwithstanding anything to the
contrary in this Indenture, Sections 4.04, 4.05, 4.06, 4.07, 4.08, 4.09 and 4.19
shall not be applicable in the event, and only for so long as, the Notes are
rated Investment Grade and no Default or Event of Default has occurred and is
continuing.

                                   ARTICLE 5.
                              SUCCESSOR CORPORATION

         SECTION 5.01 WHEN FELCOR OR FELCOR LP MAY MERGE, ETC. Neither FelCor LP
nor FelCor shall merge with or into, or sell, convey, transfer, lease or
otherwise dispose of all or substantially all of its property and assets (as an
entirety or substantially an entirety in one transaction or a series of related
transactions) to, any Person or permit any Person to merge with or into FelCor
LP or FelCor unless: (i) FelCor LP or FelCor shall be the continuing Person, or
the Person (if other than FelCor LP or FelCor) formed by such consolidation or
into which FelCor LP or FelCor is merged or that acquired or leased such
property and assets of FelCor LP or FelCor shall be an entity organized and
validly existing under the laws of the United States of America or any state or
jurisdiction thereof and shall expressly assume, by a supplemental indenture,
executed and delivered to the Trustee, all of the obligations of FelCor LP or
FelCor on the Notes and under the Indenture; (ii) immediately after giving
effect to such transaction, no Default or Event of Default shall have occurred
and be continuing; (iii) immediately after giving effect to such transaction on
a pro forma basis FelCor LP or FelCor, or any Person becoming the successor
obligor of the Notes, as the case may be, could Incur at least $1.00 of
Indebtedness under paragraphs (a), (b) and (c) of Section 4.03; provided that
this clause (iii) shall not apply to a consolidation or merger with or into a
Wholly Owned Restricted Subsidiary with a positive net worth; provided that, in
connection with any such merger or consolidation, no consideration (other than
Capital Stock (other than Disqualified Stock) in the surviving Person or FelCor
LP or FelCor) shall be issued or distributed to the holders of Capital Stock of
FelCor LP or FelCor; and (iv) FelCor LP or FelCor delivers to the Trustee an
Officers' Certificate (attaching the arithmetic computations to demonstrate
compliance with clause (iii)) and an Opinion of Counsel, in each case stating
that such consolidation, merger or transfer and such supplemental indenture
complies with this Section 5.01 and that all conditions precedent provided for
herein relating to such transaction have been complied with; provided that
clause (iii) above shall not apply if, in the good faith determination of the
Board of Directors of FelCor LP or FelCor, whose determination shall be
evidenced by a Board Resolution, the principal purpose of such transaction is to
change the state of domicile of FelCor LP or FelCor; and provided, further, that
any such transaction shall not have as one of its purposes the evasion of the
foregoing limitations.

         SECTION 5.02 SUCCESSOR SUBSTITUTED. Upon any consolidation or merger,
or any sale, conveyance, transfer, lease or other disposition of all or
substantially all of the property and assets of FelCor LP in accordance with
Section 5.01 of this Indenture, the successor Person formed by such
consolidation or into which FelCor LP is merged or to which such sale,

                                       47
<PAGE>   54

conveyance, transfer, lease or other disposition is made shall succeed to, and
be substituted for, and may exercise every right and power of, FelCor LP under
this Indenture with the same effect as if such successor Person had been named
as FelCor LP herein and thereafter the predecessor corporation shall be relieved
of all obligations and covenants under this Indenture and the Notes; provided
that FelCor LP shall not be released from its obligation to pay the principal
of, premium, if any, or interest on the Notes in the case of a lease of all or
substantially all of its property and assets.

                                   ARTICLE 6.
                              DEFAULT AND REMEDIES

         SECTION 6.01 EVENTS OF DEFAULT. An "Event of Default" shall occur with
respect to this Indenture if:

         (a) default in the payment of principal of (or premium, if any, on) any
Note when the same becomes due and payable at maturity, upon acceleration,
redemption or otherwise;

         (b) default in the payment of interest on any Note when the same
becomes due and payable, and such default continues for a period of 30 days;

         (c) default in the performance or breach of the provisions of this
Indenture applicable to mergers, consolidations and transfers of all or
substantially all of the assets of FelCor LP and FelCor or the failure by FelCor
LP to make or consummate an Offer to Purchase in accordance with Section 4.10 or
Section 4.11;

         (d) FelCor LP or FelCor defaults in the performance of or breaches any
other covenant or agreement of FelCor LP or FelCor in this Indenture or under
the Notes (other than a default specified in clause (a), (b) or (c) above) and
such default or breach continues for a period of 30 consecutive days after
written notice by the Trustee or the Holders of 25% or more in aggregate
principal amount of the Notes;

         (e) there occurs with respect to any issue or issues of Indebtedness of
FelCor LP or FelCor or any Significant Subsidiary having an outstanding
principal amount of $10 million or more in the aggregate for all such issues of
all such Persons, whether such Indebtedness now exists as of the date hereof or
shall hereafter be created, (i) an event of default that has caused the holder
thereof to declare such Indebtedness to be due and payable prior to its Stated
Maturity and such Indebtedness has not been discharged in full or such
acceleration has not been rescinded or annulled within 30 days of such
acceleration and/or (ii) the failure to make a principal payment at the final
(but not any interim) fixed maturity and such defaulted payment shall not have
been made, waived or extended within 30 days of such payment default;

         (f) any final judgment or order (not covered by insurance) for the
payment of money in excess of $10 million in the aggregate for all such final
judgments or orders against all such Persons (treating any deductibles,
self-insurance or retention as not covered by insurance) (i) shall be rendered
against FelCor LP or FelCor or any Significant Subsidiary and shall not be paid
or discharged, and (ii) there shall be any period of 60 consecutive days
following entry of the final judgment or order that causes the aggregate amount
for all such final judgments or orders outstanding and not paid or discharged
against all such Persons to exceed $10 million during

                                       48
<PAGE>   55

which a stay of enforcement of such final judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect;

         (g) a court having jurisdiction in the premises enters a decree or
order for (i) relief in respect of FelCor LP or FelCor or any Significant
Subsidiary in an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, (ii) appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official of
FelCor LP or FelCor or any Significant Subsidiary or for all or substantially
all of the property and assets of FelCor LP or FelCor or any Significant
Subsidiary or (iii) the winding up or liquidation of the affairs of FelCor LP or
FelCor or any Significant Subsidiary and, in each case, such decree or order
shall remain unstayed and in effect for a period of 60 consecutive days; or

         (h) FelCor LP or FelCor or any Significant Subsidiary (i) commences a
voluntary case under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, or consents to the entry of an order for relief in
an involuntary case under such law, (ii) consents to the appointment of or
-taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of FelCor LP or FelCor or Significant
Subsidiary or for all or substantially all of the property and assets of FelCor
LP or FelCor or any Significant Subsidiary or (iii) effects any general
assignment for the benefit of its creditors.

         SECTION 6.02 ACCELERATION. If an Event of Default (other than an Event
of Default specified in clause (g) or (h) of Section 6.01 that occurs with
respect to FelCor LP or FelCor) occurs and is continuing under the Indenture,
the Trustee or the Holders of at least 25% in aggregate principal amount of the
Notes, then outstanding, by written notice to FelCor LP and FelCor (and to the
Trustee if such notice is given by the Holders), may, and the Trustee at the
request of such Holders shall, declare the principal of, premium, if any, and
accrued interest on the Notes to be immediately due and payable. Upon a
declaration of acceleration, such principal of, premium, if any, and accrued
interest shall be immediately due and payable. In the event of a declaration of
acceleration because an Event of Default set forth in clause (e) of Section 6.01
has occurred and is continuing, such declaration of acceleration shall be
automatically rescinded and annulled if the event of default triggering such
Event of Default pursuant to such clause (e) shall be remedied or cured by
FelCor LP, FelCor or the relevant Significant Subsidiary or waived by the
holders of the relevant Indebtedness within 60 days after the declaration of
acceleration with respect thereto. If an Event or Default specified in clause
(g) or (h) of Section 6.01 occurs with respect to FelCor LP or FelCor, the
principal of, premium, if any, and accrued interest on the Notes then
outstanding shall ipso facto become and be immediately due and payable without
any declaration or other act on the part of the Trustee or any Holder. The
Holders of at least a majority in principal amount of the outstanding Notes by
written notice to FelCor LP, FelCor and to the Trustee, may waive all past
defaults and rescind and annul a declaration of acceleration and its
consequences if (i) all existing Events of Default, other than the nonpayment of
the principal of, premium, if any, and interest on the Notes that have become
due solely by such declaration of acceleration, have been cured or waived and
(ii) the rescission would not conflict with any judgment or decree of a court of
competent jurisdiction.

         SECTION 6.03 OTHER REMEDIES. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy by proceeding at law or
in equity to collect the

                                       49
<PAGE>   56

payment of principal of, premium, if any, or interest on the Notes or to enforce
the performance of any provision of the Notes or this Indenture.

         The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding.

SECTION 6.04 WAIVER OF PAST DEFAULTS. Subject to Sections 6.02, 6.07 and 9.02,
the Holders of at least a majority in principal amount of the outstanding Notes,
by notice to the Trustee, may waive an existing Default or Event of Default and
its consequences, except a Default in the payment of principal of, premium, if
any, or interest on any Note as specified in clause (a) or (b) of Section 6.01
or in respect of a covenant or provision of this Indenture which cannot be
modified or amended without the consent of the holder of each outstanding Note
affected. Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereto.

         SECTION 6.05 CONTROL BY MAJORITY. The Holders of at least a majority in
aggregate principal amount at maturity of the outstanding Notes may direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred on the Trustee. However,
the Trustee may refuse to follow any direction that conflicts with law or this
Indenture, that may involve the Trustee in personal liability, or that the
Trustee determines in good faith may be unduly prejudicial to the rights of
Holders of Notes not joining in the giving of such direction and may take any
other action it deems proper that is not inconsistent with any such direction
received from Holders of Notes.

         SECTION 6.06 LIMITATION ON SUITS. A Holder may not institute any
proceeding, judicial or otherwise, with respect to this Indenture or the Notes,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder unless:

         (1) such Holder has previously given the Trustee written notice of a
         continuing Event of Default;

         (2) the Holders of at least 25% in aggregate principal amount at
         maturity of outstanding Notes shall have made a written request to the
         Trustee institute proceedings in respect of such Event of Default in
         its own name as Trustee hereunder;

         (3) such Holder or Holders have offered the Trustee indemnity
         reasonably satisfactory to the Trustee against any costs, liabilities
         or expenses to be incurred in compliance with such request;

         (4) the Trustee does not comply with the request within 60 days after
         receipt of the request and the offer of indemnity and has failed to
         institute any such proceeding; and

         (5) during such 60-day period, the Holders of a majority in aggregate
         principal amount at maturity of the outstanding Notes do not give the
         Trustee a direction that is inconsistent with such written request.

                                       50
<PAGE>   57

         (6) For purposes of Section 6.05 and this Section 6.06, the Trustee
         shall comply with TIA Section 316(a) in making any determination of
         whether the Holders of the required aggregate principal amount of
         outstanding Notes have concurred in any request or direction of the
         Trustee to pursue any remedy available to the Trustee or the Holders
         with respect to this Indenture or the Notes or otherwise under the law.

         A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over such other Holder.

         SECTION 6.07 RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding any
other provision of this Indenture, the right of any Holder of a Note to receive
payment of the principal of, premium, if any, or interest on, such Note or to
bring suit for the enforcement of any such payment, on or after the due date
expressed in the Notes, shall not be impaired or affected without the consent of
such Holder.

         SECTION 6.08 COLLECTION SUIT BY TRUSTEE. If an Event of Default in
payment of principal, premium or interest specified in clause (a), (b) or (c) of
Section 6.01 occurs and is continuing, the Trustee may recover judgment in its
own name and as trustee of an express trust against FelCor LP, the Guarantors or
any other obligor of the Notes for the whole amount of principal, premium, if
any, and accrued interest remaining unpaid, together with interest on overdue
principal, premium, if any, and, to the extent that payment of such interest is
lawful, interest on overdue installments of interest, in each case at the rate
specified in the Notes, and such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.

         SECTION 6.09 TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07) and the Holders allowed in any judicial proceedings relative to
FelCor LP (or any other obligor of the Notes), its creditors or its property and
shall be entitled and empowered to collect and receive any monies, securities or
other property payable or deliverable upon conversion or exchange of the Notes
or upon any such claims and to distribute the same, and any custodian, receiver,
assignee, trustee, liquidator, sequestrator or other similar official in any
such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agent and counsel, and any other amounts due the
Trustee under Section 7.07. Nothing herein contained shall be deemed to empower
the Trustee to authorize or consent to, or accept or adopt on behalf of any
Holder, any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.

         SECTION 6.10 PRIORITIES. If the Trustee collects any money pursuant to
this Article Six, it shall pay out the money in the following order:

                                       51
<PAGE>   58

         First: to the Trustee for all amounts due under Section 7.07;

         Second: to Holders for amounts then due and unpaid for principal of,
premium, if any, and interest on the Notes in respect of which or for the
benefit of which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on such Notes for
principal, premium, if any, and interest, respectively; and

         Third: to FelCor LP or any other obligors of the Notes, as their
interests may appear, or as a court of competent jurisdiction may direct.

         The Trustee, upon prior written notice to FelCor LP, may fix a record
date and payment date for any payment to Holders pursuant to this Section 6.10.

         SECTION 6.11 UNDERTAKING FOR COSTS. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court may require any party
litigant in such suit to file an undertaking to pay the costs of the suit, and
the court may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.07 of this Indenture, or a suit by Holders of more than 10% in principal
amount of the outstanding Notes.

         SECTION 6.12 RESTORATION OF RIGHTS AND REMEDIES. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then, and in
every such case, subject to any determination in such proceeding, FelCor LP, the
Trustee and the Holders shall be restored severally and respectively to their
former positions hereunder and thereafter all rights and remedies of FelCor LP,
the Guarantors, Trustee and the Holders shall continue as though no such
proceeding had been instituted.

         SECTION 6.13 RIGHTS AND REMEDIES CUMULATIVE. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or wrongfully taken Notes in Section 2.09, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.

         SECTION 6.14 DELAY OR OMISSION NOT WAIVER. No delay or omission of the
Trustee or of any Holder to exercise any right or remedy accruing upon any Event
of Default shall impair any such right or remedy or constitute a waiver of any
such Event of Default or an acquiescence therein. Every right and remedy given
by this Article Six or by law to the Trustee or to the Holders may be exercised
from time to time, and as often as may be deemed expedient, by the Trustee or by
the Holders, as the case may be.

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<PAGE>   59
                                   ARTICLE 7.
                                     TRUSTEE

         SECTION 7.01 GENERAL. The duties and responsibilities of the Trustee
shall be as provided by the TIA and as set forth herein. Notwithstanding the
foregoing, no provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it. The Trustee shall not be required to give any bond or surety with
respect to the performance of its duties or the exercise of its powers under
this Indenture. Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Article Seven.

         SECTION 7.02 CERTAIN RIGHTS OF TRUSTEE. Subject to TIA Sections 315(a)
through (d):

                  (1) the Trustee may rely and shall be protected in acting or
         refraining from acting upon any resolution, certificate, statement,
         instrument, opinion, report, notice, request, direction, consent,
         order, bond, debenture, note, other evidence of indebtedness or other
         paper or document believed by it to be genuine and to have been signed
         or presented by the proper person. The Trustee need not investigate any
         fact or matter stated in the document;

                  (2) before the Trustee acts or refrains from acting, it may
         require an Officers' Certificate or an Opinion of Counsel, which shall
         conform to Section 10.04. The Trustee shall not be liable for any
         action it takes or omits to take in good faith in reliance on such
         certificate or opinion;

                  (3) the Trustee may act through its attorneys and agents and
         shall not be responsible for the misconduct or negligence of any agent
         appointed with due care;

                  (4) the Trustee shall be under no obligation to exercise any
         of the rights or powers vested in it by this Indenture at the request
         or direction of any of the Holders, unless such Holders shall have
         offered to the Trustee reasonable security or indemnity against the
         costs, expenses and liabilities that might be incurred by it in
         compliance with such request or direction;

                  (5) the Trustee shall not be liable for any action it takes or
         omits to take in good faith that it believes to be authorized or within
         its rights or powers or for any action it takes or omits to take in
         accordance with the direction of the Holders of a majority in principal
         amount at maturity of the outstanding Notes relating to the time,
         method and place of conducting any proceeding for any remedy available
         to the Trustee, or exercising any trust or power conferred upon the
         Trustee, under this Indenture; provided that the Trustee's conduct does
         not constitute gross negligence or bad faith;

                  (6) whenever in the administration of this Indenture the
         Trustee shall deem it desirable that a making be proved or established
         prior to taking, suffering or omitting any

                                       53
<PAGE>   60

         action hereunder, the Trustee (unless other evidence be herein
         specifically prescribed) may, in the absence of bad faith on its part,
         rely upon an Officer's Certificate; and

                  (7) the Trustee shall not be bound to make any investigation
         into the facts or matters stated in any resolution, certificate,
         statement, instrument, opinion, report, notice, request, direction,
         consent, order, bond, debenture, note, other evidence of indebtedness
         or other paper or document, but the Trustee, in its discretion, may
         make such further inquiry or investigation into such facts or matters
         as it may see fit, and, if the Trustee shall determine to make such
         further inquiry or investigation, it shall be entitled to examine the
         books, records and premises of FelCor LP personally or by agent or
         attorney.

         SECTION 7.03 INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee, in its
individual or any other capacity, may become the owner or pledgee of Notes and
may otherwise deal with FelCor LP, the Guarantors, or their Affiliates with the
same rights it would have if it were not the Trustee. Any Agent may do the same
with like rights. However, the Trustee is subject to TIA Sections 310(b) and
311.

         SECTION 7.04 TRUSTEE'S DISCLAIMER. The Trustee (i) makes no
representation as to the validity or adequacy of this Indenture or the Notes,
(ii) shall not be accountable for FelCor LP's use or application of the proceeds
from the Notes, (iii) shall not be responsible for any statement in the Notes
other than its certificate of authentication and (iv) shall have no
responsibility for any information or statements contained in any offering or
other disclosure documents prepared in connection with the offering and the sale
of the Notes other than the information provided by the Trustee to FelCor or
FelCor LP.

         SECTION 7.05 NOTICE OF DEFAULT. If any Default or any Event of Default
occurs and is continuing and if such Default or Event of Default is known to a
Responsible Officer of the Trustee, the Trustee shall mail to each Holder in the
manner and to the extent provided in TIA Section 313(c) notice of the Default or
Event of Default within 45 days after it occurs, unless such Default or Event of
Default has been cured; provided, however, that, except in the case of a default
in the payment of the principal of, premium, if any, or interest on any Note,
the Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee or a trust committee of directors
and/or Responsible Officers of the Trustee in good faith determine that the
withholding of such notice is in the interest of the Holders.

         SECTION 7.06 REPORTS BY TRUSTEE TO HOLDERS. Within 60 days after each
May 15, beginning with May 15, 2001, the Trustee shall mail to each Holder as
provided in TIA Section 313(c) a brief report dated as of such May 15 but only
if required by TIA Section 313(a).

         SECTION 7.07 COMPENSATION AND INDEMNITY. FelCor LP shall pay to the
Trustee such compensation as shall be agreed upon in writing for its services.
The compensation of the Trustee shall not be limited by any law on compensation
of a trustee of an express trust. FelCor LP shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses and advances incurred or made
by the Trustee. Such expenses shall include the reasonable compensation and
expenses of the Trustee's agents and counsel.

                                       54
<PAGE>   61

         Felcor LP shall indemnify the Trustee and its officers, directors,
employees and agents and save Trustee and its officers, directors, employees and
agents harmless from and against any and all Claims (as hereinafter defined) and
Losses (as hereinafter defined) which may be incurred by Trustee or any of such
officers, directors, employees or agents as a result of Claims asserted against
Trustee or any of such officers, directors, employees or agents as a result of
or in connection with Trustee's capacity as such under this Indenture by any
person or entity. For the purposes hereof, the term "Claims" shall mean all
claims, lawsuits, causes of action or other legal actions and proceedings of
whatever nature brought against (whether by way of direct action, counterclaim,
cross action or impleader) Trustee or any such officer, director, employee or
agent, even if groundless, false or fraudulent, so long as the claim, lawsuit,
cause of action or other legal action or proceeding is alleged or determined,
directly or indirectly, to arise out of, result from, relate to or be based
upon, in whole or in part: (a) the acts or omissions of Felcor LP or any
Guarantor, (b) the appointment of Trustee as trustee under this Indenture, or
(c) the performance by Trustee of its powers and duties under this Indenture;
and the term "Losses" shall mean losses, costs, damages, expenses, judgements
and liabilities of whatever nature (including but not limited to attorneys',
accountants' and other professionals' fees, litigation and court costs and
expenses and amounts paid in settlement), directly or indirectly resulting from,
arising out of or relating to one or more Claims. Upon the written request of
Trustee or any such officer, director, employee or agent (each referred to
hereinafter as an "Indemnified Party"), Felcor LP shall assume the investigation
and defense of any Claim, including the employment of counsel acceptable to the
applicable Indemnified Party and the payment of all expenses related thereto and
notwithstanding any such assumption, the Indemnified Party shall have the right,
and Felcor LP shall pay the cost and expense thereof, to employ separate counsel
with respect to any such Claim and participate in the investigation and defense
thereof in the event that such Indemnified Party shall have been advised by
counsel that there may be one or more legal defenses available to such
Indemnified Party which are different from or additional to those available to
Felcor LP. Felcor LP hereby agrees that the indemnifications and protections
afforded Trustee in this section shall survive the termination of this
Indenture. Notwithstanding the foregoing, no indemnification shall be available
hereunder to the extent that a court of competent jurisdiction determines in a
non-appealable order that the Loss or Claim for which such indemnification is
sought was directly caused by the negligence or bad faith of the Indemnified
Party.

         To secure FelCor LP's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Notes on all money or property held or
collected by the Trustee, in its capacity as Trustee, except money or property
held in trust to pay principal of, premium, if any, and interest on particular
Notes.

         If the Trustee incurs expenses or renders services after the occurrence
of an Event of Default specified in clause (g) or (h) of Section 6.01, the
expenses and the compensation for the services will be intended to constitute
expenses of administration under Title 11 of the United States Bankruptcy Code
or any applicable federal or state law for the relief of debtors.

         The provisions of this Section shall survive the termination of this
Indenture.

                                       55
<PAGE>   62

         SECTION 7.08 REPLACEMENT OF TRUSTEE. A resignation or removal of the
Trustee and appointment of a successor Trustee shall become effective only upon
the successor Trustee's acceptance of appointment as provided in this Section
7.08.

         The Trustee may resign at any time by so notifying FelCor LP in writing
at least 30 days prior to the date of the proposed resignation. The Holders of a
majority in principal amount of the outstanding Notes may remove the Trustee by
so notifying the Trustee in writing and may appoint a successor Trustee with the
consent of FelCor LP. FelCor LP may at any time remove the Trustee, by Company
Order given at least 30 days prior to the date of the proposed removal.

         If the Trustee resigns or is removed, or if a vacancy exists in the
office of Trustee for any reason, FelCor LP shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by FelCor LP. If
the successor Trustee does not deliver its written acceptance required by the
next succeeding paragraph of this Section 7.08 within 30 days after notice is
given by FelCor LP or the Trustee, as the case may be, of such resignation or
removal, the retiring Trustee, FelCor LP or the Holders of a majority in
principal amount of the outstanding Notes may petition any court of competent
jurisdiction for the appointment of a successor Trustee.

         A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to FelCor LP. Immediately after the
delivery of such written acceptance, subject to the lien provided in Section
7.07, (i) the retiring Trustee shall transfer all property held by it as Trustee
to the successor Trustee, (ii) the resignation or removal of the retiring
Trustee shall become effective and (iii) the successor Trustee shall have all
the rights, powers and duties of the Trustee under this Indenture. A successor
Trustee shall mail notice of its succession to each Holder.

         If the Trustee is no longer eligible under Section 7.10, any Holder who
satisfies the requirements of TIA Section 310(b) may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.

         FelCor LP shall give notice of any resignation and any removal of the
Trustee and each appointment of a successor Trustee to all Holders. Each notice
shall include the name of the successor Trustee and the address of its Corporate
Trust Office.

         Notwithstanding replacement of the Trustee pursuant to this Section
7.08, FelCor LP's obligation under Section 7.07 shall continue for the benefit
of the retiring Trustee.

         SECTION 7.09 SUCCESSOR TRUSTEE BY MERGER, ETC. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all of its corporate trust business to, another corporation or national banking
association, the resulting, surviving or transferee corporation or national
banking association without any further act shall be the successor Trustee with
the same effect as if the successor Trustee had been named as the Trustee
herein.

         SECTION 7.10 ELIGIBILITY. This Indenture shall always have a Trustee
who satisfies the requirements of TIA Section 310(a)(1). The Trustee shall have
a combined capital and surplus of at least $25,000,000 as set forth in its most
recent published annual report of condition.

                                       56
<PAGE>   63

         SECTION 7.11 MONEY HELD IN TRUST. The Trustee shall not be liable for
interest on any money received by it except as the Trustee may agree with FelCor
LP. Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law and except for money held in trust under
Article Eight of this Indenture.

         SECTION 7.12 WITHHOLDING TAXES. The Trustee, as agent for FelCor LP,
shall exclude and withhold from each payment of principal and interest and other
amounts due hereunder or under the Notes any and all withholding taxes
applicable thereto as required by law. The Trustee agrees to act as such
withholding agent and, in connection therewith, whenever any present or future
taxes or similar charges are required to be withheld with respect to any amounts
payable in respect of the Notes, to withhold such amounts and timely pay the
same to the appropriate authority in the name of and on behalf of the holders of
the Notes, that it will file any necessary withholding tax returns or statements
when due. FelCor LP or the Trustee shall, as promptly as possible after the
payment of the taxes described above, deliver to each holder of a Note
appropriate documentation showing the payment thereof, together with such
additional documentary evidence as such holders may reasonably request from time
to time.

                                   ARTICLE 8.
                             DISCHARGE OF INDENTURE

         SECTION 8.01 TERMINATION OF COMPANY'S OBLIGATIONS. Except as otherwise
provided in this Section 8.01, FelCor LP may terminate its obligations under the
Notes and this Indenture if:

                  (1) all Notes previously authenticated and delivered (other
         than destroyed, lost or stolen Notes that have been replaced or Notes
         that are paid pursuant to Section 4.01 or Notes for whose payment money
         or securities have theretofore been held in trust and thereafter repaid
         to FelCor LP, as provided in Section 8.05) have been delivered to the
         Trustee for cancellation and FelCor LP has paid all sums payable by it
         hereunder; or

                  (2) (A) the Notes mature within one year or all of them are to
         be called for redemption within one year under arrangements
         satisfactory to the Trustee for giving the notice of redemption, (B)
         the Company irrevocably deposits in trust with the Trustee during such
         one-year period, under the terms of an irrevocable trust agreement in
         form and substance satisfactory to the Trustee, as trust funds solely
         for the benefit of the Holders for that purpose, money or U.S.
         Government Obligations sufficient (in the opinion of a nationally
         recognized firm of independent public accountants expressed in a
         written certification thereof delivered to the Trustee), without
         consideration of any reinvestment of any interest thereon, to pay
         principal, premium, if, any, and interest on the Notes to maturity or
         redemption, as the case may be, and to pay all other sums payable by it
         hereunder, (C) no Default or Event of Default with respect to the Notes
         shall have occurred and be continuing on the date of such deposit, (D)
         such deposit will not result in a breach or violation of, or constitute
         a default under, this Indenture or any other agreement or instrument to
         which FelCor or FelCor LP is a party or by which they are bound and (E)
         FelCor and FelCor LP have delivered to the Trustee an Officers'
         Certificate and an Opinion of Counsel, in each case stating that all
         conditions precedent

                                       57
<PAGE>   64

         provided for herein relating to the satisfaction and discharge of this
         Indenture have been complied with.

         With respect to the foregoing clause (i), FelCor LP's obligations under
Section 7.07 shall survive. With respect to the foregoing clause (ii), FelCor
LP's obligations in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 2.09,
2.14, 4.01, 4.02, 7.07, 7.08, 8.04, 8.05 and 8.06 shall survive until the Notes
are no longer outstanding. Thereafter, only FelCor LP's obligations in Sections
7.07, 8.05 and 8.06 shall survive. After any such irrevocable deposit, the
Trustee upon request shall acknowledge in writing the discharge of FelCor LP's
obligations under the Notes and this Indenture except for those surviving
obligations specified above.

         SECTION 8.02 DEFEASANCE AND DISCHARGE OF INDENTURE. FelCor LP and the
Guarantors will be deemed to have paid and will be discharged from any and all
obligations in respect of the Notes or any Guarantee pursuant to Article 11 on
the 123rd day after the date of the deposit referred to in clause (A) of this
Section 8.02, and the provisions of this Indenture will no longer be in effect
with respect to the Notes, and the Trustee, at the expense of FelCor LP, shall
execute proper instruments acknowledging the same; provided that the following
conditions shall have been satisfied:

                  (A) with reference to this Section 8.02, FelCor LP has
         deposited or caused to be deposited with the Trustee (or another
         trustee satisfying the requirements of Section 7.10 of this Indenture)
         and conveyed all right, title and interest for the benefit of the
         Holders, under the terms of a trust agreement in form and substance
         satisfactory to the Trustee as trust funds in trust, specifically
         pledged to the Trustee for the benefit of the Holders as security for
         payment of the principal of, premium, if any, and interest, if any, on
         the Notes, and dedicated solely to, the benefit of the Holders, in and
         to (1) money in an amount, (2) U.S. Government Obligations that,
         through the payment of interest, premium, if any, and principal in
         respect thereof in accordance with their terms, will provide, not later
         than one day before the due date of any payment referred to in this
         clause (A), money in an amount or (3) a combination thereof in an
         amount sufficient, in the opinion of a nationally recognized firm of
         independent public accountants expressed in a written certification
         thereof delivered to the Trustee, to pay and discharge, without
         consideration of the reinvestment of such interest and after payment of
         all federal, state and local taxes or other charges and assessments in
         respect thereof payable by the Trustee, the principal of, premium, if
         any, and accrued interest on the outstanding Notes at the Stated
         Maturity of such principal or interest; provided that the Trustee shall
         have been irrevocably instructed to apply such money or the proceeds of
         such U.S. Government Obligations to the payment of such principal,
         premium, if any, and interest with respect to the Notes;

                  (B) such deposit will not result in a breach or violation of,
         or constitute a default under, this Indenture or any other agreement or
         instrument to which FelCor LP, FelCor or any of their respective
         Restricted Subsidiaries is a party or by which FelCor LP, FelCor or any
         of their respective Restricted Subsidiaries is a party or by which
         FelCor LP is bound;

                                       58
<PAGE>   65

                  (C) immediately after giving effect to such deposit on a pro
         forma basis, no Default or Event of Default shall have occurred and be
         continuing on the date of such deposit or during the period ending on
         the 123rd day after such date of deposit;

                  (D) FelCor LP shall have delivered to the Trustee (1) either
         (x) a ruling directed to the Trustee received from the Internal Revenue
         Service to the effect that the Holders will not recognize income, gain
         or loss for federal income tax purposes as a result of FelCor LP's
         exercise of its option under this Section 8.02 and will be subject to
         federal income tax on the same amount and in the same manner and at the
         same times as would have been the case if such option had not been
         exercised or (y) an Opinion of Counsel to the same effect as the ruling
         described in clause (x) above accompanied by a ruling to that effect
         published by the Internal Revenue Service, unless there has been a
         change in the applicable federal income tax law since the date of this
         Indenture such that a ruling from the Internal Revenue Service is no
         longer required and (2) an Opinion of Counsel to the effect that (x)
         the creation of the defeasance trust does not violate the Investment
         Company Act of 1940 and (y) after the passage of 123 days following the
         deposit (except, with respect to any trust funds for the account of any
         Holder who may be deemed to be an "insider" for purposes of the United
         States Bankruptcy Code, after one year following the deposit), the
         trust funds will not be subject to the effect of Section 547 of the
         United States Bankruptcy Code or Section 15 of the New York Debtor and
         Creditor Law in a case commenced by or against FelCor LP or a Guarantor
         under either such statute, and either (I) the trust funds will no
         longer remain the property of FelCor LP or a Guarantor (and therefore
         will not be subject to the effect of any applicable bankruptcy,
         insolvency, reorganization or similar laws affecting creditors' rights
         generally) or (II) if a court were to rule under any such law in any
         case or proceeding that the trust funds remained property of FelCor LP
         or a Guarantor, (a) assuming such trust funds remained in the
         possession of the Trustee prior to such court ruling to the extent not
         paid to the Holders, the Trustee will hold, for the benefit of the
         Holders, a valid and perfected security interest in such trust funds
         that is not avoidable in bankruptcy or otherwise except for the effect
         of Section 552(b) of the United States Bankruptcy Code on interest on
         the trust funds accruing after the commencement of a case under such
         statute and (b) the Holders will be entitled to receive adequate
         protection of their interests in such trust funds if such trust funds
         are used in such case or proceeding;

                  (E) if the Notes are then listed on a national securities
         exchange, FelCor LP shall have delivered to the Trustee an Opinion of
         Counsel to the effect that such deposit defeasance and discharge will
         not cause the Notes to be delisted; and

                  (F) FelCor LP has delivered to the Trustee an Officers'
         Certificate and an Opinion of Counsel, in each case stating that all
         conditions precedent provided for herein relating to the defeasance
         contemplated by this Section 8.02 have been complied with.

         Notwithstanding the foregoing, prior to the end of the 123-day (or one
year) period referred to in clause (D)(2)(y) of this Section 8.02, none of
FelCor LP's obligations under this Indenture shall be discharged. Subsequent to
the end of such 123-day (or one year) period with respect to this Section 8.02,
FelCor LP's obligations in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.08,
2.09, 2.14, 4.01, 4.02, 7.07, 7.08, 8.05 and 8.06 shall survive until the Notes
are no

                                       59
<PAGE>   66

longer outstanding. Thereafter, only FelCor LP's obligations in Sections 7.07,
8.05 and 8.06 shall survive. If and when a ruling from the Internal Revenue
Service or an Opinion of Counsel referred to in clause (D)(1) of this Section
8.02 is able to be provided specifically without regard to, and not in reliance
upon, the continuance of FelCor LP's obligations under Section 4.01, then FelCor
LP's obligations under such Section 4.01 shall cease upon delivery to the
Trustee of such ruling or Opinion of Counsel and compliance with the other
conditions precedent provided for herein relating to the defeasance contemplated
by this Section 8.02.

         After any such irrevocable deposit, the Trustee upon request shall
acknowledge in writing the discharge of FelCor LP's obligations under the Notes
and this Indenture except for those surviving obligations in the immediately
preceding paragraph.

         SECTION 8.03 DEFEASANCE OF CERTAIN OBLIGATIONS. FelCor LP may omit to
comply with any term, provision or condition set forth in clause (iii) under
Section 5.01 and Sections 4.03 through 4.17 and Sections 4.19 and 4.20, clauses
(c) and (d) under Section 6.01 with respect to such clause (iii) under Section
5.01 and Sections 4.03 through 4.17 and Sections 4.19 and 4.20, and clauses (e)
and (f) under Section 6.01 shall be deemed not to be Events of Default, in each
case with respect to the outstanding Notes if:

         (i)  with reference to this Section 8.03, FelCor LP has irrevocably
         deposited or caused to be irrevocably deposited with the Trustee (or
         another trustee satisfying the requirements of Section 7.10) and
         conveyed all right, title and interest to the Trustee for the benefit
         of the Holders, under the terms of an irrevocable trust agreement in
         form and substance satisfactory to the Trustee as trust funds in trust,
         specifically pledged to the Trustee for the benefit of the Holders as
         security for payment of the principal of, premium, if any, and
         interest, if any, on the Notes, and dedicated solely to, the benefit of
         the Holders, in and to (A) money in an amount, (B) U.S. Government
         Obligations that, through the payment of interest and principal in
         respect thereof in accordance with their terms, will provide, not later
         than one day before the due date of any payment referred to in this
         clause (i), money in an amount or (C) a combination thereof in an
         amount sufficient, in the opinion of a nationally recognized firm of
         independent public accountants expressed in a written certification
         thereof delivered to the Trustee, to pay and discharge, without
         consideration of the reinvestment of such interest and after payment of
         all federal, state and local taxes or other charges and assessments in
         respect thereof payable by the Trustee, the principal of, premium, if
         any, and interest on the outstanding Notes on the Stated Maturity of
         such principal or interest; provided that the Trustee shall have been
         irrevocably instructed to apply such money or the proceeds of such U.S.
         Government Obligations to the payment of such principal, premium, if
         any, and interest with respect to the Notes;

         (ii)  such deposit will not result in a breach or violation of, or
         constitute a default under, this Indenture or any other agreement or
         instrument to which FelCor LP, FelCor or any of their Restricted
         Subsidiaries is a party or by which FelCor LP, FelCor or any of their
         Restricted Subsidiaries is bound;

         (iii)  no Default or Event of Default shall have occurred and be
         continuing on the date of such deposit;

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<PAGE>   67

         (iv)  FelCor LP has delivered to the Trustee an Opinion of Counsel
         to the effect that (A) the creation of the defeasance trust does not
         violate the Investment Company Act of 1940, (B) the Holders have a
         valid first-priority security interest in the trust funds, (C) the
         Holders will not recognize income, gain or loss for federal income tax
         purposes as a result of such deposit and defeasance of certain
         obligations and will be subject to federal income tax on the same
         amount and in the same manner and at the same times as would have been
         the case if such deposit and defeasance had not occurred and (D) after
         the passage of 123 days following the deposit (except, with respect to
         any trust funds for the account of any Holder who may be deemed to be
         an "insider" for purposes of the United States Bankruptcy Code, after
         one year following the deposit), the trust funds will not be subject to
         the effect of Section 547 of the United States Bankruptcy Code or
         Section 15 of the New York Debtor and Creditor Law in a case commenced
         by or against FelCor LP under either such statute, and either (1) the
         trust funds will no longer remain the property of FelCor LP or a
         Guarantor (and therefore will not be subject to the effect of any
         applicable bankruptcy, insolvency, reorganization or similar laws
         affecting creditors' rights generally) or (2) if a court were to rule
         under any such law in any case or proceeding that the trust funds
         remained property of FelCor LP or a Guarantor, (x) assuming such trust
         funds remained in the possession of the Trustee prior to such court
         ruling to the extent not paid to the Holders, the Trustee will hold,
         for the benefit of the Holders, a valid and perfected security interest
         in such trust funds that is not avoidable in bankruptcy or otherwise
         (except for the effect of Section 552(b) of the United States
         Bankruptcy Code on interest on the trust funds accruing after the
         commencement of a case under such statute), (y) the Holders will be
         entitled to receive adequate protection of their interests in such
         trust funds if such trust funds are used in such case or proceeding and
         (z) no property, rights in property or other interests granted to the
         Trustee or the Holders in exchange for, or with respect to, such trust
         funds will be subject to any prior rights of holders of other
         Indebtedness of FelCor LP, FelCor or any of their Subsidiaries;

         (v)  if the Notes are then listed on a national securities
         exchange, FelCor LP shall have delivered to the Trustee an Opinion of
         Counsel to the effect that such deposit defeasance and discharge will
         not cause the Notes to be delisted; and

         (vi) FelCor LP has delivered to the Trustee an Officers'
         Certificate and an Opinion of Counsel, in each case stating that all
         conditions precedent provided for herein relating to the defeasance
         contemplated by this Section 8.03 have been complied with.

         SECTION 8.04 APPLICATION OF TRUST MONEY. Subject to Section 8.06, the
Trustee or Paying Agent shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to Section 8.01, 8.02 or 8.03, as the case may be,
and shall apply the deposited money and the money from U.S. Government
Obligations in accordance with the Notes and this Indenture to the payment of
principal of, premium, if any, and interest on the Notes; but such money need
not be segregated from other funds except to the extent required by law.

         SECTION 8.05 REPAYMENT TO COMPANY. Subject to Sections 7.07, 8.01, 8.02
and 8.03, the Trustee and the Paying Agent shall promptly pay to FelCor LP upon
request set forth in an Officers' Certificate any excess money held by them at
any time and thereupon shall be relieved from all liability with respect to such
money. The Trustee and the Paying Agent shall pay to

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<PAGE>   68

FelCor LP upon request any money held by them for the payment of principal,
premium, if any, or interest that remains unclaimed for two years; provided that
the Trustee or such Paying Agent before being required to make any payment may
cause to be published at the expense of FelCor LP once in a newspaper of general
circulation in the City of New York or mail to each Holder entitled to such
money at such Holder's address (as set forth in the Note Register) notice that
such money remains unclaimed and that after a date specified therein (which
shall be at least 30 days from the date of such publication or mailing) any
unclaimed balance of such money then remaining will be repaid to FelCor LP.
After payment to FelCor LP, Holders entitled to such money must look to FelCor
LP for payment as general creditors unless an applicable law designates another
Person, and all liability of the Trustee and such Paying Agent with respect to
such money shall cease.

         SECTION 8.06 REINSTATEMENT. If the Trustee or Paying Agent is unable to
apply any money or U.S. Government Obligations in accordance with Section 8.01,
8.02 or 8.03, as the case may be, by reason of any legal proceeding or by reason
of any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, FelCor LP's obligations
under this Indenture and the Notes shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.01, 8.02 or 8.03, as the case may be,
until such time as the Trustee or Paying Agent is permitted to apply all such
money or U.S. Government Obligations in accordance with Section 8.01, 8.02 or
8.03, as the case may be; provided that, if FelCor LP has made any payment of
principal of, premium, if any, or interest on any Notes because of the
reinstatement of its obligations, FelCor LP shall be subrogated to the rights of
the Holders of such Notes to receive such payment from the money or U.S.
Government Obligations held by the Trustee or Paying Agent.

                                   ARTICLE 9.
                       AMENDMENTS, SUPPLEMENTS AND WAIVERS

         SECTION 9.01 WITHOUT CONSENT OF HOLDERS. FelCor, FelCor LP and the
Subsidiary Guarantors when authorized by a resolution of their Board of
Directors, and the Trustee may amend or supplement this Indenture or the Notes
without notice to or the consent of any Holder:

                  (1) to cure any ambiguity, defect or inconsistency in this
         Indenture; provided that such amendments or supplements shall not
         adversely affect the interests of the Holders in any material respect;

                  (2) to comply with Section 4.07 or Article Five;

                  (3) to comply with any requirements of the Commission in
         connection with the qualification of this Indenture under the TIA;

                  (4) to evidence and provide for the acceptance of appointment
         hereunder by a successor Trustee;

                  (5) to secure or Guarantee the Notes; or

                                       62
<PAGE>   69

                  (6) to make any change that, in the good faith opinion of the
         Board of Directors as evidenced by a Board Resolution, does not
         materially and adversely affect the rights of any Holder.

         SECTION 9.02 WITH CONSENT OF HOLDERS. Subject to Sections 6.04 and 6.07
and without prior notice to the Holders, FelCor, FelCor LP and the Subsidiary
Guarantors, when authorized by their Board of Directors (as evidenced by a Board
Resolution), and the Trustee may amend this Indenture and the Notes with the
written consent of the Holders of a majority in aggregate principal amount at
maturity of the Notes then outstanding, and the Holders of a majority in
aggregate principal amount at maturity of the Notes then outstanding by written
notice to the Trustee may waive future compliance by FelCor or FelCor LP with
any provision of this Indenture or the Notes.

         Notwithstanding the provisions of this Section 9.02, without the
consent of each Holder affected, an amendment or waiver, including a waiver
pursuant to Section 6.04, may not:

         (i) change the Stated Maturity of the principal of, or any installment
         of interest on, any Note,

         (ii) reduce the principal amount of, or premium, if any, or interest
         on, any Note,

         (iii) change the place of payment of principal of, or premium, if any,
         or interest on, any Note or adversely affect any right of repayment at
         the option of any Holder of any Note,

         (iv) impair the right to institute suit for the enforcement of any
         payment on or after the Stated Maturity (or, in the case of a
         redemption, on or after the Redemption Date) of any Note,

         (v) reduce the percentage of outstanding Notes, the consent of whose
         Holders is necessary to modify or amend this Indenture,

         (vi) waive a Default in the payment of principal of, premium, if any,
         or interest on the Notes,

         (vii) voluntarily release a Guarantor of the Notes,

         (viii) modify any of the provisions of this Section 9.02, except to
         increase any such percentage or to provide that certain other
         provisions of this Indenture cannot be modified or waived without the
         consent of the Holder of each outstanding Note affected thereby, or

         (ix) reduce the percentage or aggregate principal amount of outstanding
         Notes the consent of whose Holders is necessary for waiver of
         compliance with certain provisions of this Indenture or for waiver of
         certain defaults.

                                       63
<PAGE>   70

         It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.

         After an amendment, supplement or waiver under this Section 9.02
becomes effective, FelCor LP shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. FelCor LP shall mail
supplemental indentures to Holders upon request. Any failure of FelCor LP to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such supplemental indenture or waiver.

         SECTION 9.03 REVOCATION AND EFFECT OF CONSENT. Until an amendment or
waiver becomes effective, a consent to it by a Holder is a continuing consent by
the Holder and every subsequent Holder of a Note or portion of a Note that
evidences the same debt as the Note of the consenting Holder, even if notation
of the consent is not made on any Note. However, any such Holder or subsequent
Holder may revoke the consent as to its Note or portion of its Note. Such
revocation shall be effective only if the Trustee receives the notice of
revocation before the date the amendment, supplement or waiver becomes
effective. An amendment, supplement or waiver shall become effective on receipt
by the Trustee of written consents from the Holders of the requisite percentage
in principal amount of the outstanding Notes.

         FelCor LP may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then, notwithstanding the last
two sentences of the immediately preceding paragraph, those persons who were
Holders at such record date (or their duly designated proxies) and only those
persons shall be entitled to consent to such amendment, supplement or waiver or
to revoke any consent previously given, whether or not such persons continue to
be Holders after such record date. No such consent shall be valid or effective
for more than 90 days after such record date.

         After an amendment, supplement or waiver becomes effective, it shall
bind every Holder unless it is of the type described in any of clauses (i)
through (ix) of Section 9.02. In case of an amendment or waiver of the type
described in clauses (i) through (ix) of Section 9.02, the amendment or waiver
shall bind each Holder who has consented to it and every subsequent Holder of a
Note that evidences the same indebtedness as the Note of the consenting Holder.

         SECTION 9.04 NOTATION ON OR EXCHANGE OF NOTES. If an amendment,
supplement or waiver changes the terms of a Note, the Trustee may require the
Holder to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Note about the changed terms and return it to the Holder and the
Trustee may place an appropriate notation on any Note thereafter authenticated.
Alternatively, if FelCor LP or the Trustee so determines, FelCor LP in exchange
for the Note shall issue and the Trustee shall authenticate a new Note that
reflects the changed terms.

         SECTION 9.05 TRUSTEE TO SIGN AMENDMENTS, ETC. The Trustee shall be
entitled to receive, and shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article Nine is authorized or permitted by this
Indenture. Subject to the preceding sentence, the Trustee shall

                                       64
<PAGE>   71

sign such amendment, supplement or waiver if the same does not adversely affect
the rights of the Trustee. The Trustee may, but shall not be obligated to,
execute any such amendment, supplement or waiver that affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise.

         SECTION 9.06 CONFORMITY WITH TRUST INDENTURE ACT. Every supplemental
indenture executed pursuant to this Article Nine shall conform to the
requirements of the TIA as then in effect.

                                  ARTICLE 10.
                                 MISCELLANEOUS

         SECTION 10.01 TRUST INDENTURE ACT OF 1939. Prior to the effectiveness
of the Registration Statement, this Indenture shall incorporate and be governed
by the provisions of the TIA that are required to be part of and to govern
indentures qualified under the TIA. After the effectiveness of the Registration
Statement, this Indenture shall be subject to the provisions of the TIA that are
required to be a part of this Indenture and shall, to the extent applicable, be
governed by such provisions.

         SECTION 10.02 NOTICES. Any notice or communication shall be
sufficiently given if in writing and delivered in person or mailed by first
class mail addressed as follows:

if to FelCor, FelCor LP or any Subsidiary Guarantor:

         c/o FelCor Lodging Trust Incorporated
         545 East John Carpenter Freeway
         Suite 1300
         Irving, Texas  75062
         Attention:  General Counsel

if to the Trustee:

         SunTrust Bank
         25 Park Place, 24th Floor
         Atlanta, Georgia 30303-2900
         Attention:  Corporate Trust Department

         FelCor, FelCor LP or a Subsidiary Guarantor or the Trustee by notice to
the other may designate additional or different addresses for subsequent notices
or communications.

         Any notice or communication mailed to a Holder shall be mailed to him
at his address as it appears on the Note Register by first class mail and shall
be sufficiently given to him if so mailed within the time prescribed. Copies of
any such communication or notice to a Holder shall also be mailed to the Trustee
and each Agent at the same time.

         Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. Except for a
notice to the Trustee, which is deemed

                                       65
<PAGE>   72

given only when received, and except as otherwise provided in this Indenture, if
a notice or communication is mailed in the manner provided in this Section
10.02, it is duly given, whether or not the addressee receives it.

         Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.

         In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.

         SECTION 10.03 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. Upon
any request or application by FelCor LP to the Trustee to take any action under
this Indenture, FelCor LP shall furnish to the Trustee:

         (i) an Officers' Certificate stating that, in the opinion of the
         signers, all conditions precedent, if any, provided for in this
         Indenture relating to the proposed action have been complied with; and

         (ii) an Opinion of Counsel stating that, in the opinion of such
         Counsel, all such conditions precedent have been complied with.

         SECTION 10.04 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:

         (i) a statement that each person signing such certificate or opinion
         has read such covenant or condition and the definitions herein relating
         thereto;

         (ii) a brief statement as to the nature and scope of the examination or
         investigation upon which the statement or opinion contained in such
         certificate or opinion is based;

         (iii) a statement that, in the opinion of each such person, he has made
         such examination or investigation as is necessary to enable him to
         express an informed opinion as to whether or not such covenant or
         condition has been complied with; and

         (iv) a statement as to whether or not, in the opinion of each such
         person, such condition or covenant has been complied with; provided,
         however, that, with respect to matters of fact, an Opinion of Counsel
         may rely on an Officers' Certificate or certificates of public
         officials.

         SECTION 10.05 RULES BY TRUSTEE, PAYING AGENT OR REGISTRAR. The Trustee
may make reasonable rules for action by or at a meeting of Holders. The Paying
Agent or Registrar may make reasonable rules for its functions.

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<PAGE>   73

         SECTION 10.06 PAYMENT DATE OTHER THAN A BUSINESS DAY. If an Interest
Payment Date, Redemption Date, Payment Date, Stated Maturity or date of maturity
of any Note shall not be a Business Day, then payment of principal of, premium,
if any, or interest on such Note, as the case may be, need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the Interest Payment Date, Payment Date, or Redemption
Date, or at the Stated Maturity or date of maturity of such Note; provided that
no interest shall accrue for the period from and after such Interest Payment
Date, Payment Date, Redemption Date, Stated Maturity or date of maturity, as the
case may be.

         SECTION 10.07 GOVERNING LAW. The laws of the State of New York shall
govern this Indenture and the Notes. The Trustee, FelCor LP and the Holders
agree to submit to the jurisdiction of the courts of the State of New York in
any action or proceeding arising out of or relating to this Indenture or the
Notes. Notwithstanding the foregoing, the situs of the trusts created hereunder
shall be deemed to be the Corporate Trust Office at which location the trusts
shall be administered.

         SECTION 10.08 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS. This
Indenture may not be used to interpret another indenture, loan or debt agreement
of FelCor LP, the Guarantors or any Subsidiary of any such Person. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.

         SECTION 10.09 NO RECOURSE AGAINST OTHERS. No recourse for the payment
of the principal of, premium, if any, or interest on any of the Notes, or for
any claim based thereon or otherwise in respect thereof, and no recourse under
or upon any obligation, covenant or agreement of FelCor LP or the Guarantors
contained in this Indenture, or in any of the Notes, or because of the creation
of any Indebtedness represented thereby, shall be had against any incorporator
or against any past, present or future limited partner, stockholder, other
equity holder (other than a general partner), officer, director, employee or
controlling person, as such, of FelCor LP, FelCor or the Subsidiary Guarantors
or of any successor Person, either directly or through FelCor LP or any
successor Person, whether by virtue of any constitution, statute or rule of law,
or by the enforcement of any assessment or penalty or otherwise; it being
expressly understood that all such liability is hereby expressly waived and
released as a condition of, and as a consideration for, the execution of this
Indenture and the issue of the Notes.

         SECTION 10.10 SUCCESSORS. All agreements of FelCor LP, FelCor or the
Subsidiary Guarantors in this Indenture and the Notes shall bind its successors.
All agreements of the Trustee in this Indenture shall bind its successor.

         SECTION 10.11 DUPLICATE ORIGINALS. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.

         SECTION 10.12 SEPARABILITY. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.

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<PAGE>   74

         SECTION 10.13 TABLE OF CONTENTS, HEADINGS, ETC. The Table of Contents,
Cross-Reference Table and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part hereof and shall in no way modify or restrict any of the terms
and provisions hereof.

                                  ARTICLE 11.
                             GUARANTEE OF THE NOTES

         SECTION 11.01 GUARANTEE. Subject to the provisions of this Article
Eleven, each Guarantor, jointly and severally, hereby unconditionally guarantees
to each Holder and to the Trustee on behalf of the Holders: (i) the due and
punctual payment of the principal of, premium if any, on and interest on the
Notes, when and as the same shall become due and payable, whether at maturity,
by acceleration, redemption or otherwise, the due and punctual payment of
interest on the overdue principal of and interest, if any, on the Notes, to the
extent lawful, and the due and punctual performance of all other obligations of
FelCor LP to the Holders or the Trustee, all in accordance with the terms of
such Note and this Indenture and (ii) in the case of any extension of time of
payment or renewal of any Notes or any of such other obligations, that the same
will be promptly paid in full when due or performed in accordance with the terms
of the extension or renewal, at stated maturity, by acceleration, redemption or
otherwise. Each Guarantor hereby waives diligence, presentment, filing of claims
with a court in the event of merger or bankruptcy of FelCor LP, any right to
require a proceeding first against FelCor LP, the benefit of discussion, protest
or notice with respect to any such Note or the debt evidenced thereby and all
demands whatsoever (except as specified above), and covenants that this Article
Eleven will not be discharged as to any such Note except by payment in full of
the principal thereof and interest thereon and as provided in Sections 8.01 and
8.02. The maturity of the obligations guaranteed hereby may be accelerated as
provided in Article Six for the purposes of this Article Eleven. In the event of
any declaration of acceleration of such obligations as provided in Article
Eleven, such obligations (whether or not due and payable) shall become due and
payable immediately by the Guarantor for the purpose of this Article Eleven. In
addition, without limiting the foregoing provisions, upon the effectiveness of
an acceleration under Article Six, the Trustee shall promptly make a demand for
payment on the Notes under the Guarantees provided for in this Article Eleven.

         Each Guarantor hereby irrevocably waives any claim or other rights
which it may now or hereafter acquire against performance or enforcement of such
Guarantor's obligations under this Indenture, including, without limitation, any
right of subrogation, reimbursement, exoneration, contribution, indemnification,
any right to participate in any claim or remedy of the Holders against FelCor
LP, whether or not such claim, remedy or right arises in equity, or under
contract, statute or common law, including, without limitation, the right to
take or receive from FelCor LP, directly or indirectly, in cash or other
property or in any other manner, payment or security on account of such claim or
other rights. If any amount shall be paid to any Guarantor in violation of the
preceding sentence and the principal of, premium if any, and accrued interest on
the Notes shall not have been paid in full, such amount shall be deemed to have
been paid to such Guarantor for the benefit of, and held in trust for the
benefit of, the Holders, and shall immediately be paid to the Trustee for the
benefit of the Holders to be credited and applied upon the principal of,
premium, if any, and accrued interest on the Notes. Each Guarantor acknowledges
that it will receive direct and indirect benefits from the issuance of the Notes

                                       68
<PAGE>   75

pursuant to this Indenture and that the waiver set forth in this paragraph is
knowingly made in contemplation of such benefits.

         The Guarantee set forth in this Section 11.01 shall not be valid or
become obligatory for any purpose with respect to a Note until the certificate
of authentication on such Note shall have been signed by or on behalf of the
Trustee.

         SECTION 11.02 OBLIGATIONS OF GUARANTOR UNCONDITIONAL. Nothing contained
in this Article Eleven or elsewhere in this Indenture or in the Notes is
intended to or shall impair, as among each Guarantor and the holders of the
Notes, the obligation of each Guarantor, which is absolute and unconditional,
upon failure by FelCor LP, to pay to the holders of the Notes and principal of,
premium, if any, and interest on the Notes as and when the same shall become due
and payable in accordance with their terms, or is intended to or shall affect
the relative rights of the holders of the Notes and creditors of each Guarantor,
nor shall anything herein or therein prevent the holder of any Note or the
Trustee on their behalf from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture.

         Without limiting the generality of the foregoing, nothing contained in
this Article Eleven will restrict the right of the Trustee or the holders of the
Notes to take any action to declare the Guarantees to be due and payable prior
to the stated maturity of the Notes pursuant to Section 6.02 or to pursue any
rights or remedies hereunder.

         SECTION 11.03 NOTICE TO TRUSTEE. Each Guarantor shall give prompt
written notice to the Trustee of any fact known to such Guarantor which would
prohibit the making of any payment to or by the Trustee in respect of the
Guarantee pursuant to the provisions of this Article Eleven.

         SECTION 11.04 THIS ARTICLE NOT TO PREVENT EVENTS OF DEFAULT. The
failure to make a payment on account of principal, of premium, if any, or
interest on the Notes by reason of any provision of this Article Eleven will not
be construed as preventing the occurrence of an Event of Default.

         SECTION 11.05 TRUSTEE'S COMPENSATION NOT PREJUDICED. Nothing in this
Article Eleven will apply to amounts due to the Trustee pursuant to other
sections in the Indenture.

         SECTION 11.06 PAYMENTS MAY BE PAID PRIOR TO DISSOLUTION. Nothing
contained in this Article Eleven or elsewhere in this Indenture shall prevent
(i) a Guarantor from making payments of principal of, premium if any, and
interest on the Notes, or from depositing with the Trustee any monies for such
payments or (ii) the application by the Trustee of any monies deposited with it
for the purpose of making such payments of principal of, premium, if any, and
interest on the Notes to the holders entitled thereto, each Guarantor shall give
prompt written notice to the Trustee of any dissolution, winding up, liquidation
or reorganization of such Guarantor.

         SECTION 11.07 RELEASE OF GUARANTEE. The Guarantee provided pursuant to
this Article 11 by each Subsidiary Guarantor shall be automatically and
unconditionally released and discharged upon any sale, exchange or transfer, to
any Person not an Affiliate of FelCor LP or FelCor, of all of the Capital Stock
owned by FelCor LP, FelCor and their respective Restricted Subsidiaries in, or
all or substantially all the assets of such Subsidiary Guarantor; provided such
transfer is permitted by this Indenture.

                                       69
<PAGE>   76

                                   SIGNATURES

         IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.

                                    FELCOR LODGING LIMITED PARTNERSHIP

                                    By:  FELCOR LODGING TRUST INCORPORATED,
                                         General Partner

                                         By: /s/ LAWRENCE D. ROBINSON
                                            -----------------------------------
                                            Name: Lawrence D. Robinson
                                            Title: Senior Vice President &
                                                   General Counsel

                                    FELCOR LODGING TRUST INCORPORATED

                                    By: /s/ LAWRENCE D. ROBINSON
                                       -----------------------------------
                                       Name: Lawrence D. Robinson
                                       Title: Senior Vice President &
                                              General Counsel

                                    SUNTRUST BANK,
                                    as Trustee

                                    By: /s/ GEORGE T. HOGAN
                                       -----------------------------------
                                       Name: George T. Hogan
                                       Title: Vice President

                                    FELCOR/CSS HOTELS, L.L.C.

                                    By: /s/ LAWRENCE D. ROBINSON
                                       -----------------------------------
                                       Name: Lawrence D. Robinson
                                       Title: Senior Vice President &
                                              General Counsel

                                    FELCOR/LAX HOTELS, L.L.C.

                                    By: /s/ LAWRENCE D. ROBINSON
                                       -----------------------------------
                                       Name: Lawrence D. Robinson
                                       Title: Senior Vice President &
                                              General Counsel

                                       70
<PAGE>   77

                                    FELCOR/CSS HOLDINGS, L.P.

                                    By: FELCOR/CSS HOTELS, L.L.C., General
                                        Partner

                                        By: /s/ LAWRENCE D. ROBINSON
                                           --------------------------------
                                           Name:  Lawrence D. Robinson
                                           Title: Senior Vice President &
                                                  General Counsel

                                    FELCOR/ST. PAUL HOLDINGS, L.P.

                                    By: FELCOR/CSS HOTELS, L.L.C.,
                                        General Partner

                                        By: /s/ LAWRENCE D. ROBINSON
                                           --------------------------------
                                           Name:  Lawrence D. Robinson
                                           Title: Senior Vice President &
                                                  General Counsel

                                    FELCOR/LAX HOLDINGS, L.P.

                                    By:  FELCOR/LAX HOTELS, L.L.C., General
                                         Partner

                                         By: /s/ LAWRENCE D. ROBINSON
                                            --------------------------------
                                            Name:  Lawrence D. Robinson
                                            Title: Senior Vice President &
                                                   General Counsel

                                       71
<PAGE>   78

                                    FELCOR EIGHT HOTELS, L.L.C.

                                    By: /s/ LAWRENCE D. ROBINSON
                                        -------------------------------------
                                        Name: Lawrence D. Robinson
                                        Title: Senior Vice President &
                                               General Counsel

                                    FELCOR HOTEL ASSET COMPANY, L.L.C.

                                    By: /s/ LAWRENCE D. ROBINSON
                                        -------------------------------------
                                        Name: Lawrence D. Robinson
                                        Title: Senior Vice President &
                                               General Counsel

                                    FELCOR NEVADA HOLDINGS L.L.C.

                                    By: /s/ LAWRENCE D. ROBINSON
                                        -------------------------------------
                                        Name: Lawrence D. Robinson
                                        Title: Senior Vice President &
                                               General Counsel

                                    FHAC NEVADA HOLDINGS, L.L.C.

                                    By: /s/ LAWRENCE D. ROBINSON
                                        -------------------------------------
                                        Name: Lawrence D. Robinson
                                        Title: Senior Vice President &
                                               General Counsel

                                    FHAC TEXAS HOLDINGS, L.P.

                                    By: FELCOR HOTEL ASSET COMPANY, L.L.C.,
                                        General Partner

                                        By: /s/ LAWRENCE D. ROBINSON
                                            -----------------------------------
                                            Name: Lawrence D. Robinson
                                            Title: Senior Vice President &
                                                   General Counsel

                                       72
<PAGE>   79

                                    FELCOR OMAHA HOTEL COMPANY, L.L.C.

                                    By: /s/ LAWRENCE D. ROBINSON
                                       -------------------------------------
                                       Name: Lawrence D. Robinson
                                       Title: Senior Vice President &
                                              General Counsel

                                    FELCOR COUNTRY VILLA HOTEL, L.L.C.

                                    By: /s/ LAWRENCE D. ROBINSON
                                       -------------------------------------
                                       Name: Lawrence D. Robinson
                                       Title: Senior Vice President &
                                              General Counsel

                                    FELCOR MOLINE HOTEL, L.L.C.

                                    By: /s/ LAWRENCE D. ROBINSON
                                       -------------------------------------
                                       Name: Lawrence D. Robinson
                                       Title: Senior Vice President &
                                              General Counsel

                                    FELCOR CANADA CO.

                                    By: /s/ LAWRENCE D. ROBINSON
                                       -------------------------------------
                                       Name: Lawrence D. Robinson
                                       Title: Senior Vice President &
                                              General Counsel

                                       73
<PAGE>   80

                                   SCHEDULE A

                                      A-1
<PAGE>   81

                                                                       EXHIBIT A

                                 [FACE OF NOTE]

                           9 1/2% Senior Note Due 2008

                                                        [CUSIP] __________

       No. _________                                                 $__________

         FELCOR LODGING LIMITED PARTNERSHIP, a Delaware limited partnership
("FelCor LP"), which term includes any successor under the Indenture hereinafter
referred to), for value received, promises to pay to CEDE & Co., or its
registered assigns, the principal sum of ___________ ($_________) on September
15, 2008.

         Interest Payment Dates: March 15 and September 15, commencing March 15,
2001.

         Regular Record Dates: March 1 and September 1.

         Notwithstanding anything to the contrary in this Note or in the
Indenture (as hereinafter defined), upon the occurrence of, and during the
continuance of, a Ratings Downgrade, this Note will bear interest at an annual
rate of 9.50% plus 0.50%.

         Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

         IN WITNESS WHEREOF, FelCor LP has caused this Note to be signed
manually or by facsimile by its duly authorized officers.

                                          FELCOR LODGING LIMITED PARTNERSHIP

                                          BY:    FELCOR LODGING TRUST
                                                 INCORPORATED, General Partner

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

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

                                      A-2
<PAGE>   82

                    (Trustee's Certificate of Authentication)

         This is one of the 9 1/2% Senior Notes Due 2008 described in the
within-mentioned Indenture.

         Date:                                SUNTRUST BANK,
                                              as Trustee

                                              By:
                                                 ------------------------------
                                                 Authorized Signatory

                                      A-3
<PAGE>   83

                             [REVERSE SIDE OF NOTE]

                       FELCOR LODGING LIMITED PARTNERSHIP

                           9 1/2% Senior Note Due 2008

1. Principal and Interest.

         FelCor LP will pay the principal of this Note on September 15, 2008.

         FelCor LP promises to pay interest on the principal amount of this Note
on each Interest Payment Date, as set forth below, at the rate per annum shown
above. Notwithstanding anything to the contrary in this Note or in the
Indenture, upon the occurrence of, and during the continuance of, a Ratings
Downgrade, this Note will bear interest at the rate per annum shown above plus
0.50%.

         Interest will be payable semiannually (to the holders of record of the
Notes at the close of business on March 1 or September 1 immediately preceding
the Interest Payment Date) on each Interest Payment Date, commencing March 15,
2001.

         If an exchange offer registered under the Securities Act is not
consummated and a shelf registration statement under the Securities Act with
respect to resales of the Notes is not declared effective by the Commission, on
or before March 14, 2001 in accordance with the terms of the Registration Rights
Agreement dated September 8, 2000 among FelCor LP, FelCor, Deutsche Banc
Securities Inc., Chase Securities Inc., Morgan Stanley & Co. Incorporated, Banc
of America Securities L.L.C., Banc One Capital Markets, Inc., Credit Lyonnais
Securities (USA) Inc., and Scotia Capital (USA) Inc., and interest due on the
Notes will accrue, at an annual rate of 0.5% plus the interest rate specified on
the face hereof, until the exchange offer is consummated or the shelf
registration statement is declared effective. The Holder of this Note is
entitled to the benefits of such Registration Rights Agreement.

         Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from September 15,
2000; provided that, if there is no existing default in the payment of interest
and this Note is authenticated between a Regular Record Date referred to on the
face hereof and the next succeeding Interest Payment Date, interest shall accrue
from such Interest Payment Date. Interest will be computed on the basis of a
360-day year of twelve 30-day months.

         FelCor LP shall pay interest on overdue principal and premium, if any,
and interest on overdue installments of interest, to the extent lawful, at a
rate per annum that is 2% in excess of the rate otherwise payable.

2. Method of Payment.

         FelCor LP will pay interest (except defaulted interest) on the
principal amount of the Notes as provided above on each March 15 and September
15 to the persons who are Holders (as reflected in the Note Register at the
close of business on such March 1 and September 1 immediately preceding the
Interest Payment Date), in each case, even if the Note is canceled on

                                      A-4
<PAGE>   84

registration of transfer or registration of exchange after such record date;
provided that, with respect to the payment of principal, FelCor LP will make
payment to the Holder that surrenders this Note to a Paying Agent on or after
September 15, 2008.

         FelCor LP will pay principal, premium, if any, and as provided above,
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. However, FelCor LP may pay
principal, premium, if any, and interest by its check payable in such money. It
may mail an interest check to a Holder's registered address (as reflected in the
Note Register). If a payment date is a date other than a Business Day at a place
of payment, payment may be made at that place on the next succeeding day that is
a Business Day and no interest shall accrue for the intervening period.

3. Paying Agent and Registrar.

         Initially, the Trustee will act as authenticating agent, Paying Agent
and Registrar. FelCor LP may change any authenticating agent, Paying Agent or
Registrar without notice. FelCor LP, any Subsidiary or any Affiliate of any of
them may act as Paying Agent, Registrar or co-Registrar.

4. Indenture; Limitations.

         FelCor LP issued the Notes under an Indenture dated as of September 15,
2000 (the "Indenture"), among FelCor LP, FelCor, the Subsidiary Guarantors and
SunTrust Bank (the "Trustee"). Capitalized terms herein are used as defined in
the Indenture unless otherwise indicated. The terms of the Notes include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act. The Notes are subject to all such terms, and Holders are
referred to the Indenture and the Trust Indenture Act for a statement of all
such terms. To the extent permitted by applicable law, in the event of any
inconsistency between the terms of this Note and the terms of the Indenture, the
terms of the Indenture shall control.

         The Notes are general unsecured obligations of FelCor LP.

5. Redemption.

         Except as provided below, FelCor LP may not redeem any of the Notes
prior to September 15, 2004.

         The Notes may be redeemed at the option of FelCor LP, in whole or in
part, at any time and from time to time on or after September 15, 2004, upon not
less than 30 days' nor more than 60 days' notice, at the following Redemption
Prices (expressed as percentages of the principal amount thereof) plus accrued
and unpaid interest thereon, if any, to the Redemption Date, if redeemed during
the 12-month period commencing September 15 of the year set forth below:

<TABLE>
<CAPTION>
       YEAR                                          REDEMPTION PRICE
       ----                                          ----------------
<S>                                                    <C>
       2004........................................    104.750%
       2005........................................    103.167%
       2006........................................    101.583%
       2007 and thereafter.........................    100.000%
</TABLE>

                                      A-5
<PAGE>   85

         Notwithstanding the foregoing, at any time, or from time to time, on or
prior to September 15, 2003, FelCor LP may, at its option, use the net cash
proceeds of one or more Equity Offerings to redeem up to 35% of the principal
amount of the Notes issued under this Indenture at a Redemption Price of 109.50%
of the principal amount thereof plus accrued and unpaid interest thereon, if
any, to the Redemption Date; provided that (i) at least 65% of the aggregate
principal amount of the Notes issued under this Indenture remains outstanding
immediately after such redemption; and (ii) FelCor LP makes such redemption no
later 90 days after the consummation of any such Equity Offering.

         Notice of any optional redemption will be mailed at least 30 but not
more than 60 days before the Redemption Date to each Holder of Notes to be
redeemed at its last address as it appears in the Note Register. Notes in
original principal amount greater than $1,000 may be redeemed in part. On and
after the Redemption Date, interest ceases to accrue on Notes or portions
thereof called for redemption, unless FelCor LP defaults in the payment of the
amount due upon redemption.

6. Repurchase upon Change in Control.

         Upon the occurrence of any Change of Control, each Holder shall have
the right to require the repurchase of its Notes by FelCor LP in cash pursuant
to the offer described in the Indenture at a purchase price equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to the date
of purchase (the "Change of Control Payment").

         A notice of such Change of Control will be mailed within 30 days after
any Change of Control occurs to each Holder at his last address as it appears in
the Note Register. Notes in original denominations larger than $1,000 may be
sold to FelCor LP in part. On and after the Change of Control Payment Date,
interest ceases to accrue on Notes or portions of Notes surrendered for purchase
by FelCor LP, unless FelCor LP defaults in the payment of the Change of Control
Payment.

7. Denominations; Transfer; Exchange.

         The Notes are in registered form without coupons in denominations of
$1,000 of principal amount at maturity and multiples of $1,000 in excess
thereof. A Holder may register the transfer or exchange of Notes in accordance
with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes and
fees required by law or permitted by the Indenture. The Registrar need not
register the transfer or exchange of any Notes selected for redemption. Also, it
need not register the transfer or exchange of any Notes for a period of 15 days
before a selection of Notes to be redeemed is made.

8. Persons Deemed Owners.

         A Holder shall be treated as the owner of a Note for all purposes.

                                       A-6
<PAGE>   86

9. Unclaimed Money.

         If money for the payment of principal, premium, if any, or interest
remains unclaimed for two years, the Trustee and the Paying Agent will pay the
money back to FelCor LP at its request. After that, Holders entitled to the
money must look to FelCor LP for payment, unless an abandoned property law
designates another Person, and all liability of the Trustee and such Paying
Agent with respect to such money shall cease.

10. Discharge Prior to Redemption or Maturity.

         If FelCor LP deposits with the Trustee money or U.S. Government
Obligations sufficient to pay the then outstanding principal of, premium, if
any, and accrued interest on the Notes (a) to redemption or maturity, FelCor LP
will be discharged from the Indenture and the Notes, except in certain
circumstances for certain sections thereof, and (b) to the Stated Maturity,
FelCor LP will be discharged from certain covenants set forth in the Indenture.

11. Amendment; Supplement; Waiver.

         Subject to certain exceptions, the Indenture or the Notes may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the Notes then outstanding, and any existing default or
compliance with any provision may be waived with the consent of the Holders of
at least a majority in principal amount of the Notes then outstanding. Without
notice to or the consent of any Holder, the parties thereto may amend or
supplement the Indenture or the Notes to, among other things, cure any
ambiguity, defect or inconsistency and make any change that does not materially
and adversely affect the rights of any Holder.

12. Restrictive Covenants.

         The Indenture imposes certain limitations on the ability of FelCor,
FelCor LP and their respective Restricted Subsidiaries, among other things, to
Incur additional Indebtedness, make Restricted Payments, use the proceeds from
Asset Sales, engage in transactions with Affiliates or merge, consolidate or
transfer substantially all of their assets. Within 45 days after the end of each
fiscal quarter (90 days after the end of the last fiscal quarter of each year),
FelCor and FelCor LP must report to the Trustee on compliance with such
limitations.

13. Successor Persons.

         When a successor person or other entity assumes all the obligations of
its predecessor under the Notes and the Indenture, the predecessor person will
be released from those obligations.

14. Defaults and Remedies.

         The following events constitute "Events of Default" under the
Indenture:

         (a) default in the payment of principal of (or premium, if any, on) any
Note when the same becomes due and payable at maturity, upon acceleration,
redemption or otherwise;

                                      A-7
<PAGE>   87

         (b) default in the payment of interest on any Note when the same
becomes due and payable, and such default continues for a period of 30 days;

         (c) default in the performance or breach of the provisions of the
Indenture applicable to mergers, consolidations and transfers of all or
substantially all of the assets of FelCor LP and FelCor or the failure by FelCor
LP to make or consummate an Offer to Purchase in accordance with Section 4.10 or
Section 4.11;

         (d) FelCor LP or FelCor defaults in the performance of or breaches any
other covenant or agreement of FelCor LP or FelCor in the Indenture or under the
Notes (other than a default specified in clause (a), (b) or (c) above) and such
default or breach continues for a period of 30 consecutive days after written
notice by the Trustee or the Holders of 25% or more in aggregate principal
amount of the Notes;

         (e) there occurs with respect to any issue or issues of Indebtedness of
FelCor LP or FelCor or any Significant Subsidiary having an outstanding
principal amount of $10 million or more in the aggregate for all such issues of
all such Persons, whether such Indebtedness now exists or shall hereafter be
created, (i) an event of default that has caused the holder thereof to declare
such Indebtedness to be due and payable prior to its Stated Maturity and such
Indebtedness has not been discharged in full or such acceleration has not been
rescinded or annulled within 30 days of such acceleration and/or (ii) the
failure to make a principal payment at the final (but not any interim) fixed
maturity and such defaulted payment shall not have been made, waived or extended
within 30 days of such payment default;

         (f) any final judgment or order (not covered by insurance) for the
payment of money in excess of $10 million in the aggregate for all such final
judgments or orders against all such Persons (treating any deductibles,
self-insurance or retention as not covered by insurance) (i) shall be rendered
against FelCor LP or FelCor or any Significant Subsidiary and shall not be paid
or discharged, and (ii) there shall be any period of 60 consecutive days
following entry of the final judgment or order that causes the aggregate amount
for all such final judgments or orders outstanding and not paid or discharged
against all such Persons to exceed $10 million during which a stay of
enforcement of such final judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect;

         (g) a court having jurisdiction in the premises enters a decree or
order for (i) relief in respect of FelCor LP or FelCor or any Significant
Subsidiary in an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, (ii) appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official of
FelCor LP or FelCor or any Significant Subsidiary or for all or substantially
all of the property and assets of FelCor LP or FelCor or any Significant
Subsidiary or (iii) the winding up or liquidation of the affairs of FelCor LP or
FelCor or any Significant Subsidiary and, in each case, such decree or order
shall remain unstayed and in effect for a period of 60 consecutive days; or

         (h) FelCor LP or FelCor or any Significant Subsidiary (i) commences a
voluntary case under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, or consents to the entry of an order for relief in
an involuntary case under such law, (ii) consents to the appointment of or
taking possession by a receiver, liquidator, assignee, custodian, trustee,

                                      A-8
<PAGE>   88

sequestrator or similar official of FelCor LP or FelCor or Significant
Subsidiary or for all or substantially all of the property and assets of FelCor
LP or FelCor or any Significant Subsidiary or (iii) effects any general
assignment for the benefit of its creditors.

         If an Event of Default (other than an Event of Default described in
subparagraphs (g) or (h) above that occurs with respect to FelCor LP or FelCor)
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the Notes may declare all the Notes to be due and payable.
If an Event of Default described in subparagraphs (g) or (h) above occurs with
respect to FelCor LP or FelCor, the Notes automatically become due and payable.
Holders may not enforce the Indenture or the Notes except as provided in the
Indenture. The Trustee may require indemnity satisfactory to it before it
enforces the Indenture or the Notes. Subject to certain limitations, Holders of
at least a majority in principal amount of the Notes then outstanding may direct
the Trustee in its exercise of any trust or power.

15. Trustee Dealings with Company.

         The Trustee under the Indenture, in its individual or any other
capacity, may make loans to, accept deposits from and perform services for
FelCor LP or its Affiliates and may otherwise deal with FelCor LP or its
Affiliates as if it were not the Trustee.

16. No Recourse Against Others.

         No incorporator or any past, present or future limited partner,
shareholder, other equity holder, officer, director, employee or controlling
person as such, of FelCor LP or of any successor Person shall have any liability
for any obligations of FelCor LP under the Notes or the Indenture or for any
claim based on, in respect of or by reason of, such obligations or their
creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes.

17. Authentication.

         This Note shall not be valid until the Trustee or authenticating agent
signs the certificate of authentication on the other side of this Note.

18. Abbreviations.

         Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors
Act).

         FelCor LP will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to FelCor Suites Limited
Partnership, 545 East John Carpenter Freeway, Suite 1300, Irving, Texas 75062 or
at such other address provided for in the Indenture.

                                       A-9
<PAGE>   89

19. Guarantee.

         Repayment of principal and interest on the Notes is guaranteed on a
senior basis by the Guarantors pursuant to Article Eleven of the Indenture.

                                      A-10

<PAGE>   90
                            [FORM OF TRANSFER NOTICE]

                  FOR VALUE RECEIVED the undersigned registered holder hereby
sell(s), assign(s) and transfer(s) unto

Insert Taxpayer Identification No.

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

__________________________________________ (Please print or typewrite name and
address including zip code of assignee) the within Note and all rights
thereunder, hereby irrevocably constituting _______
___________________________________ and appointing _______________________
attorney to transfer said Note on the books of FelCor LP with full power of
substitution in the premises.

                     [THE FOLLOWING PROVISION TO BE INCLUDED
                     ON ALL NOTES OTHER THAN EXCHANGE NOTES,
                       PERMANENT OFFSHORE GLOBAL NOTES AND
                            OFFSHORE PHYSICAL NOTES]

         In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date the shelf registration statement with
respect to resales of the Notes is declared effective or (ii) two years after
the original issuance of the Notes, the undersigned confirms that without
utilizing any general solicitation or general advertising that:

                                   [Check One]

[ ]      (a)   this Note is being transferred in compliance with the exemption
               from registration under the Securities Act of 1933, as amended,
               provided by Rule 144A thereunder.

                                       or

[ ]      (b)   this Note is being transferred other than in accordance with (a)
               above and documents are being furnished which comply with the
               conditions of transfer set forth in this Note and the Indenture.

                                      A-11
<PAGE>   91

If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this Note in the name of any Person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.08 of the Indenture shall have
been satisfied.

Date:
       ---------------------          ------------------------------------------
                                      NOTICE: The signature to this assignment
                                      must correspond with the name as written
                                      upon the face of the within-mentioned
                                      instrument in every particular, without
                                      alteration or any change whatsoever.

TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.

         The undersigned represents and warrants that it is purchasing this Note
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding
FelCor LP as the undersigned has requested pursuant to Rule 144A or has
determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in order
to claim the exemption from registration provided by Rule 144A.

Date:
       ---------------------          ------------------------------------------
                                      NOTICE: To be executed by an executive
                                      officer

                                      A-12
<PAGE>   92

                       OPTION OF HOLDER TO ELECT PURCHASE

         If you wish to have this Note purchased by FelCor LP pursuant to
Section 4.10 or Section 4.11 of the Indenture, check the Box: [_]

         If you wish to have a portion of this Note purchased by FelCor LP
pursuant to Section 4.10 or Section 4.11 of the Indenture, state the amount (in
principal amount at maturity): $___________________.

Date:
     ------------

Your Signature:
                ---------------------------------------------------------------
                (Sign exactly as your name appears on the other side of this
                 Note)

Signature Guarantee:
                     ----------------------------

                                      A-13
<PAGE>   93

                                                                       EXHIBIT B

                               FORM OF CERTIFICATE

                                                             -----------, -----

FelCor Lodging Limited Partnership
545 East John Carpenter Freeway
Suite 1300
Irving, Texas  75062

FelCor Lodging Trust Incorporated
545 East John Carpenter Freeway
Suite 1300
Irving, Texas  75062

SunTrust Bank
25 Park Place, 24th Floor
Atlanta, Georgia  30303-2900
Attention:  Corporate Trust Department

                  Re:      FelCor Lodging Limited Partnership ("FelCor LP")
                           9 1/2% Senior Notes Due 2008 (the "Notes")

Dear Sirs:

         This letter relates to U.S. $____________ principal amount at maturity
of Notes represented by a Note (the "Legended Note") which bears a legend
outlining restrictions upon transfer of such Legended Note. Pursuant to Section
2.01 of the Indenture (the "Indenture") dated as of September 15, 2000 relating
to the Notes, we hereby certify that we are (or we will hold such securities on
behalf of) a person outside the United States to whom the Notes could be
transferred in accordance with Rule 904 of Regulation S promulgated under the
U.S. Securities Act of 1933, as amended. Accordingly, you are hereby requested
to exchange the legended certificate for an unlegended certificate representing
an identical principal amount at maturity of Notes, all in the manner provided
for in the Indenture.

         You are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings or official inquiry with respect to the
matters covered hereby. Terms used in this certificate have the meanings set
forth in Regulation S.

                                             Very truly yours,

                                             [NAME OF HOLDER]

                                             By:
                                                 ----------------------
                                                 Authorized Signature

                                       B-1
<PAGE>   94

                                                                       EXHIBIT C

                            FORM OF CERTIFICATE TO BE
                          DELIVERED IN CONNECTION WITH
                    TRANSFERS TO NON-QIB ACCREDITED INVESTORS

                                                               -------------, --

FelCor Lodging Limited Partnership
545 East John Carpenter Freeway
Suite 1300
Irving, Texas  75062

FelCor Lodging Trust Incorporated
545 East John Carpenter Freeway
Suite 1300
Irving, Texas  75062

SunTrust Bank
25 Park Place, 24th Floor
Atlanta, Georgia  30303-2900
Attention:  Corporate Trust Department

                  Re:      FelCor Lodging Limited Partnership ("FelCor LP")
                           9 1/2% Senior Notes Due 2008 (the "Notes")

Dear Sirs:

         In connection with our proposed purchase of $____________ aggregate
principal amount at maturity of the Notes, we confirm that:

         1. We understand that any subsequent transfer of the Notes is subject
to certain restrictions and conditions set forth in the Indenture dated as of
September 15, 2000, relating to the Notes (the "Indenture") and the undersigned
agrees to be bound by, and not to resell, pledge or otherwise transfer the Notes
except in compliance with, such restrictions and conditions and the Securities
Act of 1933, as amended (the "Securities Act").

         2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes may not be offered or
sold except as permitted in the following sentence. We agree, on our own behalf
and on behalf of any accounts for which we are acting as hereinafter stated,
that if we should sell any Notes, we will do so only (A) to FelCor, FelCor LP or
any subsidiary thereof, (B) in accordance with Rule 144A under the Securities
Act to a "qualified institutional buyer" (as defined therein), (C) to an
institutional "accredited investor" (as defined below) that, prior to such
transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to
you a signed letter substantially in the form of this letter, and, if this
letter relates to a proposed transfer in respect of an aggregate principal
amount of Notes less than $100,000, an opinion of counsel acceptable to FelCor
and FelCor LP that such transfer is in compliance with the Securities Act, (D)
outside the United States in accordance with Rule 904 of Regulation S under the
Securities Act, (E) pursuant to the exemption from

                                      C-1
<PAGE>   95

registration provided by Rule 144 under the Securities Act (if available), or
(F) pursuant to an effective registration statement under the Securities Act,
and we further agree to provide to any person purchasing any of the Notes from
us a notice advising such purchaser that resales of the Notes are restricted as
stated herein.

         3. We understand that, on any proposed resale of any Notes, we will be
required to furnish to you such certifications, legal opinions and other
information as you may reasonably require to confirm that the proposed sale
complies with the foregoing restrictions. We further understand that the Notes
purchased by us will bear a legend to the foregoing effect.

         4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.

         5. We are acquiring the Notes purchased by us for our own account or
for one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion.

         You are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.

                                                 Very truly yours,

                                                 [NAME OF TRANSFEREE]

                                                 By:
                                                     ---------------------------
                                                     Authorized Signature

                                      A-2
<PAGE>   96

                                                                       EXHIBIT D

                       FORM OF CERTIFICATE TO BE DELIVERED
                          IN CONNECTION WITH TRANSFERS
                            PURSUANT TO REGULATION S

                                                               -----------, ----

FelCor Lodging Limited Partnership
545 East John Carpenter Freeway
Suite 1300
Irving, Texas  75062

FelCor Lodging Trust Incorporated
545 East John Carpenter Freeway
Suite 1300
Irving, Texas  75062

SunTrust Bank
25 Park Place, 24th Floor
Atlanta, Georgia  30303-2900
Attention:  Corporate Trust Department

                  Re:      FelCor Lodging Limited Partnership ("FelCor LP")
                           9 1/2% Senior Notes Due 2008 (the "Notes")

Dear Sirs:

         In connection with our proposed sale of U.S.$________ aggregate
principal amount at maturity of the Notes, we confirm that such sale has been
effected pursuant to and in accordance with Regulation S under the Securities
Act of 1933, as amended (the "Securities Act"), and, accordingly, we represent
that:

         (1) the offer of the Notes was not made to a person in the United
States;

         (2) at the time the buy order was originated, the transferee was
outside the United States or we and any person acting on our behalf reasonably
believed that the transferee was outside the United States;

         (3) no directed selling efforts have been made by us in the United
States in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable; and

         (4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act.

                                      D-1
<PAGE>   97

         You are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings or official inquiry with respect to the
matters covered hereby. Terms used in this certificate have the meanings set
forth in Regulation S.

                                                 Very truly yours,

                                                 [NAME OF TRANSFEROR]

                                                 By:
                                                     ---------------------------
                                                     Authorized Signature

                                      D-2<PAGE>   1
                                                                   EXHIBIT 10.18

================================================================================

                                U.S. $600,000,000

                   FIFTH AMENDED AND RESTATED CREDIT AGREEMENT

                           Dated as of August 1, 2000

                                      Among

                        FELCOR LODGING TRUST INCORPORATED
                     and FELCOR LODGING LIMITED PARTNERSHIP
                                  as Borrower,

                            THE LENDERS PARTY HERETO

                                       and

                            THE CHASE MANHATTAN BANK,
                             as Administrative Agent

================================================================================

                             CHASE SECURITIES INC.,
        as Joint Lead Arranger, Joint Book Manager and Syndication Agent

                             BANKERS TRUST COMPANY,
       as Joint Lead Arranger, Joint Book Manager and Documentation Agent

                             BANK OF AMERICA, N.A.,
                             as Documentation Agent

                                       and

                     WELLS FARGO BANK, NATIONAL ASSOCIATION,
                            as Co-Documentation Agent

<PAGE>   2

                                TABLE OF CONTENTS

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ARTICLE I     DEFINITIONS AND ACCOUNTING TERMS...............................2

     1.1.  Defined Terms.....................................................2
     1.2.  Computation of Time Periods......................................33
     1.3.  Accounting Terms.................................................33
     1.4.  Certain Terms....................................................33

ARTICLE II    AMOUNTS AND TERMS OF THE LOANS AND LETTERS OF CREDIT..........33

     2.1.  The Revolving Credit Loans.......................................33
     2.2.  Making the Revolving Credit Loans................................33
     2.3.  Fees   ..........................................................35
     2.4.  Reduction and Termination of the Commitments.....................36
     2.5.  Repayment........................................................36
     2.6.  Prepayments......................................................36
     2.7.  Conversion/Continuation Option...................................37
     2.8.  Interest.........................................................38
     2.9.  Interest Rate Determination and Protection.......................38
     2.10. Increased Costs..................................................39
     2.11. Illegality.......................................................39
     2.12. Capital Adequacy.................................................40
     2.13. Payments and Computations........................................40
     2.14. Taxes 42
     2.15. Sharing of Payments, Etc.........................................43
     2.16. Swing Advances...................................................44
     2.17. Letters of Credit................................................45
     2.18. Letter of Credit Requests........................................46
     2.19. Letter of Credit Participations..................................47
     2.20. Agreement to Repay Letter of Credit Drawings.....................48
     2.21. Additional Revolving Credit Commitments..........................49
     2.22. Extension of the Final Maturity Date.............................51

ARTICLE III   CONDITIONS TO EFFECTIVENESS
              OF THIS AGREEMENT AND OF LENDING
              AND OF ISSUANCE OF LETTERS OF CREDIT..........................51

     3.1.  Conditions Precedent to Effectiveness of this Agreement, to
              Initial Revolving Credit Loans and Letters of Credit..........51
     3.2.  Additional Conditions Precedent to Effectiveness of this
              Agreement, to Initial Revolving Credit Loans and Letters of
              Credit........................................................53
     3.3.  Conditions Precedent to Each Revolving Credit Loan and Letter
              of Credit.....................................................54
</TABLE>

<PAGE>   3

<TABLE>
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ARTICLE IV    REPRESENTATIONS AND WARRANTIES.................................55

     4.1.  Existence; Compliance with Law....................................55
     4.2.  Power: Authorization, Enforceable Obligations.....................56
     4.3.  Taxes  ...........................................................56
     4.4.  Full Disclosure...................................................57
     4.5.  Financial Matters.................................................57
     4.6.  Litigation........................................................58
     4.7.  Margin Regulations................................................58
     4.8.  Ownership of Borrower and DJONT; Subsidiaries.....................58
     4.9.  ERISA  59
     4.10. Indebtedness......................................................60
     4.11. Restricted Payments...............................................60
     4.12. No Burdensome Restrictions; No Defaults...........................60
     4.13. Investments.......................................................60
     4.14. Government Regulation.............................................60
     4.15. Insurance.........................................................61
     4.16. Labor Matters.....................................................61
     4.17. Force Majeure.....................................................61
     4.18. Use of Proceeds...................................................62
     4.19. Environmental Protection..........................................62
     4.20. Contractual Obligations Concerning Assets.........................63
     4.21. Intellectual Property.............................................64
     4.22. Title ............................................................64
     4.23. Status as REIT....................................................65
     4.24. Operator: Compliance with Law.....................................66
     4.25. Operating Leases, Licenses and Management Agreement...............66
     4.26. FF&E Reserves.....................................................66

ARTICLE V     FINANCIAL COVENANTS............................................67

     5.1.  Unsecured Interest Expense Coverage...............................67
     5.2.  Fixed Charge Coverage Ratio.......................................67
     5.3.  Maintenance of Tangible Net Worth.................................67
     5.4.  Limitations on Total Indebtedness.................................67
     5.5.  Limitations on Total Secured Indebtedness.........................67
     5.6.  Adjusted NOI and Hotels...........................................67
     5.7.  Limitations on Recourse Secured Indebtedness......................67

ARTICLE VI    AFFIRMATIVE COVENANTS..........................................68

     6.1.  Compliance with Laws, Etc.........................................68
     6.2.  Conduct of Business...............................................68
     6.3.  Payment of Taxes, Etc.............................................68
     6.4.  Maintenance of Insurance..........................................68
     6.5.  Preservation of Existence, Etc....................................69
     6.6.  Access ...........................................................69
</TABLE>

                                      (ii)

<PAGE>   4
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     6.7.  Keeping of Books..................................................69
     6.8.  Maintenance of Properties, Etc....................................69
     6.9.  Performance and Compliance with Other Covenants...................69
     6.10. Application of Proceeds...........................................69
     6.11. Financial Statements..............................................69
     6.12. Reporting Requirements............................................71
     6.13. Leases and Operating Leases; Management Agreements and
             Licenses........................................................73
     6.14. Intentionally Omitted.............................................74
     6.15. Employee Plans....................................................74
     6.16. Intentionally Omitted.............................................74
     6.17. Fiscal Year.......................................................74
     6.18. Environmental Matters.............................................74
     6.19. REIT Requirements.................................................75
     6.20. Maintenance of FF&E Reserves......................................75
     6.21. Intentionally deleted.............................................75
     6.22. Further Assurances................................................75
     6.23. Unencumbered Hotel Properties/Financial Covenant Imbalance........75
     6.24. Hotel Documents...................................................76

ARTICLE VII   NEGATIVE COVENANTS.............................................76

     7.1.  Restrictions on Wholly-Owned Subsidiaries.........................76
     7.2.  Operation/Ownership of Hotels.....................................77
     7.3.  Lease Obligations.................................................77
     7.4.  Restricted Payments...............................................77
     7.5.  Mergers, Stock Issuances, Asset Sales, Etc........................78
     7.6.  Restrictions on Construction/Budget Hotels........................78
     7.7.  Change in Nature of Business or in Capital Structure..............79
     7.8.  Modification of Material Agreements...............................79
     7.9.  Accounting Changes................................................79
     7.10. Transactions with Affiliates......................................79
     7.11. Adverse or Speculative Transactions...............................80
     7.12. Environmental Matters.............................................80
     7.13. Joint Enterprises.................................................80
     7.14. Intentionally Omitted.............................................80
     7.15. ERISA Plan Assets.................................................80
     7.16. Limitation on Liens...............................................80

ARTICLE VIII  EVENTS OF DEFAULT..............................................80

     8.1.  Events of Default.................................................80
     8.2.  Remedies..........................................................82
     8.3.  Actions in Respect of Letters of Credit...........................83

ARTICLE IX    THE ADMINISTRATIVE AGENT.......................................84

     9.1.  Authorization and Action..........................................84
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                                      (iii)
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     9.2.  Administrative Agent's Reliance, Etc..............................85
     9.3.  Chase and Affiliates..............................................85
     9.4.  Lender Credit Decision............................................85
     9.5.  Indemnification...................................................86
     9.6.  Successor Agent...................................................86
     9.7.  Duties of Other Agents............................................87

ARTICLE X     MISCELLANEOUS..................................................87

     10.1.  Amendments, Etc..................................................87
     10.2.  Notices, Etc.....................................................88
     10.3.  No Waiver, Remedies..............................................88
     10.4.  Costs; Expenses; Indemnities.....................................89
     10.5.  Right of Set-off.................................................90
     10.6.  Binding Effect...................................................90
     10.7.  Assignments and Participations...................................91
     10.8.  Governing Law; Severability......................................94
     10.9.  Submission to Jurisdiction: Service of Process...................94
     10.10. Section Titles...................................................94
     10.11. Execution in Counterparts........................................94
     10.12. Entire Agreement.................................................94
     10.13. Confidentiality..................................................95
     10.14. WAIVER OF JURY TRIAL.............................................95
     10.15. Joint and Several Obligations....................................95
</TABLE>

                                      (iv)
<PAGE>   6

<TABLE>
<CAPTION>
SCHEDULES

<S>                <C>    <C>
Schedule I          -     Commitments
Schedule II         -     Applicable Lending Offices and Addresses for Notices
Schedule III        -     Operating Lessees
Schedule IV         -     Permitted Transferees
Schedule V          -     Qualified Leases
Schedule 2.17       -     Existing Letters of Credit
Schedule 4.8        -     Subsidiaries and Unconsolidated Entities
Schedule 4.10       -     Existing Indebtedness
Schedule 4.13       -     Existing Investments
Schedule 4.19       -     Environmental Protection
Schedule 4.22(a)    -     Owned Real Estate
Schedule 4.22(b)    -     Leased Real Estate

EXHIBITS

Exhibit A           -     Form of Revolving Credit Note
Exhibit B           -     Form of Notice of Borrowing
Exhibit C           -     Form of Notice of Conversion or Continuation
Exhibit D           -     Form(s) of Opinion(s) of Counsel for the Loan Parties
Exhibit E           -     Form of Assignment and Acceptance
Exhibit F           -     Form of Letter of Credit Request
Exhibit G           -     Form of Compliance Certificate
Exhibit H           -     Form of Operating Lease
Exhibit I           -     Form of Subsidiary Guaranty
Exhibit J           -     Form of Additional Revolving Credit Commitment
                            Agreement
Exhibit K           -     Pledge Agreement
Exhibit L           -     Form of Officers' Certificate
Exhibit M           -     Form of Solvency Certificate
Exhibit N           -     Form of Closing Certificate
</TABLE>

<PAGE>   7

                  FIFTH AMENDED AND RESTATED CREDIT AGREEMENT, dated as of
August 1, 2000, among FELCOR LODGING TRUST INCORPORATED (f/k/a Felcor Suite
Hotels, Inc.), a Maryland corporation ("FelCor") and FELCOR LODGING LIMITED
PARTNERSHIP (f/k/a Felcor Suites Limited Partnership), a Delaware limited
partnership ("FelCor LP" and collectively with FelCor, the "Borrower"), the
financial institutions listed from time to time on the signature pages hereof
(each individually a "Lender" and collectively the "Lenders") and THE CHASE
MANHATTAN BANK ("Chase"), as administrative agent for the Lenders (in such
capacity, the "Administrative Agent").

                                   WITNESSETH:
                                   -----------

                  WHEREAS, pursuant to that certain Revolving Credit Agreement
dated as of September 30, 1996, among the Borrower, the financial institutions
listed on the signature pages thereof, the Administrative Agent and Wells Fargo
Bank, National Association ("Wells Fargo") as documentation agent (as amended,
modified or supplemented to, but not including, the effective date of the
Amended Revolving Credit Agreement referred to below, the "Original Revolving
Credit Agreement"), the lenders party thereto agreed to make to the Borrower
revolving credit advances of up to $250,000,000 in aggregate principal amount
outstanding at any one time, for the purposes and upon the terms and subject to
the conditions set forth therein;

                  WHEREAS, pursuant to that certain Amended and Restated
Revolving Credit Agreement dated as of October 18, 1996, among the Borrower, the
lenders party thereto, the Administrative Agent and Wells Fargo as documentation
agent (as amended, modified or supplemented to, but not including, the effective
date of the Second Amended Revolving Credit Agreement referred to below, the
"Amended Revolving Credit Agreement") the terms and provisions of the Original
Revolving Credit Agreement were amended and restated as more particularly set
forth therein;

                  WHEREAS, pursuant to that certain Second Amended and Restated
Revolving Credit Agreement dated as of March 10, 1997, among the Borrower, the
lenders party thereto, the Administrative Agent and Wells Fargo as documentation
agent (as amended, modified or supplemented to, but not including, the effective
date of the Third Amended Revolving Credit Agreement referred to below, the
"Second Amended Revolving Credit Agreement") the terms and provisions of the
Amended Revolving Credit Agreement were amended and restated as more
particularly set forth therein;

                  WHEREAS, pursuant to that certain Third Amended and Restated
Revolving Credit Agreement dated as of August 14, 1997, among the Borrower, the
lenders party thereto, the Administrative Agent and Wells Fargo as documentation
agent (as amended, modified or supplemented to, but not including, the effective
date of the Fourth Amended Revolving Credit Agreement referred to below, the
"Third Amended Revolving Credit Agreement") the terms and provisions of the
Second Amended Revolving Credit Agreement were amended and restated as more
particularly set forth therein;

<PAGE>   8

                  WHEREAS, pursuant to that certain Fourth Amended and Restated
Credit Agreement, dated as of July 1, 1998, among the Borrower, the lenders
party thereto, the Administrative Agent, Bankers Trust Company, Bank of America,
N.A. and Wells Fargo, National Association, as Documentation Agents (as amended,
modified or supplemented to, but not including, the Restatement Effective Date,
the "Fourth Amended Revolving Credit Agreement"), the lenders thereunder agreed
to increase the maximum revolving credit amount to $850,000,000 (the "Previous
Maximum Revolving Credit Amount"), to make $250,000,000 of term loans (the
"Previous Term Loans") and to amend and restate certain terms and provisions of
the Third Amended Revolving Credit Agreement as more particularly set forth
therein; and

                  WHEREAS, the Previous Term Loans have been repaid in full, the
parties hereto now wish to amend and restate the Fourth Amended Revolving Credit
Agreement (i) to provide Available Credit to the Borrower in the aggregate
principal amount of $600,000,000 (subject to increase as provided herein) and
(ii) to amend and restate the Fourth Amended Revolving Credit Agreement as
hereinafter set forth.

                  NOW, THEREFORE, in consideration of the premises and the
covenants and agreements contained herein, the parties hereto hereby agree that
the aforementioned recitals are true and correct and hereby incorporated herein
and that the Fourth Amended Revolving Credit Agreement is hereby amended and
restated in its entirety so that all of the terms and conditions contained in
this Agreement shall supersede and control the terms and conditions of the
Fourth Amended Revolving Credit Agreement.

                                    ARTICLE I

                        DEFINITIONS AND ACCOUNTING TERMS

                  1.1. Defined Terms. As used in this Agreement, the following
terms have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):

                  "Additional Revolving Credit Lender" has the meaning specified
in Section 2.21(b).

                  "Additional Revolving Credit Commitment" means, for each
Lender, any commitment to make Revolving Credit Loans provided by such Lender
pursuant to Section 2.21, in such amount as agreed to by such Lender in the
respective Additional Revolving Credit Commitment Agreement; provided that on
the Additional Revolving Credit Commitment Date upon which an Additional
Revolving Credit Commitment of any Lender becomes effective, such Additional
Revolving Credit Commitment of such Lender shall be added to (and thereafter
become a part of) the Revolving Credit Commitment of such Lender for all
purposes of this Agreement as contemplated by Section 2.21.

                  "Additional Revolving Credit Commitment Agreement" means a
Revolving Credit Commitment Agreement substantially in the form of Exhibit J
(appropriately completed).

                                      -2-
<PAGE>   9

                  "Additional Revolving Credit Commitment Date" means each date
upon which an Additional Revolving Credit Commitment under an Additional
Revolving Credit Commitment Agreement becomes effective as provided in Section
2.21(b)(i).

                  "Adjusted EBITDA" means, for any Person for any period, EBITDA
of such Person for such period less the FF&E Reserve for such Person.

                  "Adjusted Funds From Operations" means, for any Person, for
any period, Net Income (Loss) of such Person for such period plus (a) the sum of
the following amounts of such Person and its Subsidiaries for such period
determined on a consolidated basis in conformity with GAAP to the extent
included in the determination of such Net Income (Loss): (i) depreciation
expense, (ii) amortization expense and other non-cash charges with respect to
their real estate assets for such period, (iii) losses from Asset Sales, losses
resulting from restructuring of Indebtedness and other extraordinary losses, and
(iv) minority interests attributable to FelCor LP's partnership units; less (b)
the sum of the following amounts of such Person and its Subsidiaries for such
period determined on a consolidated basis in conformity with GAAP to the extent
included in the determination of such Net Income (Loss): (i) gains from Asset
Sales, gains resulting from restructuring of Indebtedness and other
extraordinary gains, and (ii) the applicable share of Net Income (Loss) of such
Person's Unconsolidated Entities; plus (c) such Person's Pro Rata Share of
Adjusted Funds From Operations of such Person's Unconsolidated Entities.

                  "Adjusted NOI" means, with respect to any Hotel owned or
leased by the Borrower or any of its Subsidiaries, Eligible Joint Ventures or
Unconsolidated Entities, for any period, the Net Operating Income for such Hotel
for such period less the FF&E Reserve for such Hotel for such period.

                  "Administrative Agent" has the meaning specified in the
preamble to this Agreement, and shall include any successor to the
Administrative Agent appointed pursuant to Section 9.6.

                  "Affiliate" means, to any Person, any Subsidiary of such
Person and any other Person which, directly or indirectly, controls, is
controlled by or is under common control with such Person and includes each
executive officer, director, trustee, limited liability company manager or
general partner of such Person, and each Person who is the beneficial owner of
10% or more of any class of voting Stock of such Person. For the purposes of
this definition, "control" means the possession of the power to direct or cause
the direction of management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.

                  "Agreement" means this Fifth Amended and Restated Credit
Agreement, together with all Exhibits and Schedules attached hereto and as the
same may be further amended, supplemented or otherwise modified from time to
time.

                  "Allerton Hotel" means that certain Hotel located in Chicago
Illinois and commonly known as the Allerton Hotel.

                                      -3-
<PAGE>   10

                  "Alternative Currency" means any lawful currency of a country
where a Hotel is located, other than Dollars, which is freely transferable and
convertible into Dollars.

                  "Alternative Currency Contract" means a currency swap
agreement, currency cap agreement, currency collar agreement or forward currency
agreement entered into to provide protection against fluctuations in an
Alternative Currency.

                  "Amended Revolving Credit Agreement" has the meaning specified
in the recitals to this Agreement.

                  "Applicable Lending Office" means, with respect to each
Lender, its Domestic Lending Office in the case of a Base Rate Loan and its
Eurodollar Lending Office in the case of a Eurodollar Rate Loan.

                  "Applicable Margin" means, with respect to each Revolving
Credit Loan, the applicable percentage per annum set forth below based upon (i)
with respect to Level I through IV Status, the Status then in effect and (ii)
with respect to Level V through X Status, the Status in effect on the most
recent Applicable Margin Reset Date, it being understood that the Applicable
Margin for (i) Base Rate Loans and Swing Advances shall be the percentage set
forth under the column "Base Rate Loans", (ii) Eurodollar Rate Loans shall be
the percentage set forth under the column "Eurodollar Rate Loans", and (iii) the
Commitment Fee shall be the percentage set forth under the column "Commitment
Fee":

<TABLE>
<CAPTION>
                                         Base Rate                 Eurodollar Rate                Commitment
                                           Loans                        Loans                         Fee
                                           -----                        -----                         ---
<S>                                       <C>                          <C>                           <C>
Level I Status                            0.0%                         .875%                         0.125%
Level II Status                           0.0%                        1.000%                         0.150%
Level III Status                          0.0%                        1.125%                         0.150%
Level IV Status                           0.0%                        1.250%                         0.200%
Level V Status                            0.0%                        1.375%                         0.200%
Level VI Status                           0.250%                      1.750%                         0.250%
Level VII Status                          0.375%                      1.875%                         0.250%
Level VIII Status                         0.500%                      2.000%                         0.300%
Level IX Status                           0.625%                      2.125%                         0.375%
Level X Status                            1.000%                      2.500%                         0.500%
</TABLE>

                  "Applicable Margin Reset Date" means the 45th day following
the end of the most recent Fiscal Quarter.

                  "Asset Sale" means any sale, conveyance, transfer, assignment,
lease or other disposition (including, without limitation, by merger or
consolidation, and by condemnation, eminent domain, loss, damage, or
destruction, and whether by operation of law or otherwise) by the Borrower or
any of its Subsidiaries to any Person (other than to Borrower or any of its
Subsidiaries) of any Stock of any of its Subsidiaries, any Stock Equivalents of
any of its Subsidiaries or any Hotel, but excluding Operating Leases.

                                      -4-
<PAGE>   11

                  "Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the
Administrative Agent, in substantially the form of Exhibit E.

                  "Available Credit" means, at any time, an amount equal to the
then effective Revolving Credit Commitments of the Lenders less the sum of (x)
the aggregate of the outstanding principal amount of the Revolving Credit Loans
at such time and (y) the Letter of Credit Outstandings.

                  "Base Rate" means, for any period, a fluctuating interest rate
per annum as shall be in effect from time to time, which rate per annum, shall
be equal at all times to the higher of:

                  (a) the rate of interest announced publicly by Chase at its
         principal office, from time to time, as Chase's base rate; and

                  (b) the sum (adjusted to the nearest 1/8 of one percent or, if
        there is no nearest 1/8 of one percent, to the next higher 1/8 of one
        percent) of (i) 1/2 of one percent per annum plus (ii) the Federal Funds
        Rate.

                  "Base Rate Loan" means any outstanding principal amount of the
Revolving Credit Loans of any Lender that bears interest with reference to the
Base Rate, other than Swing Advances.

                  "Bass" shall mean Bass Hotels and Resorts, a Delaware
corporation, or any Person controlled by Bass Hotels and Resorts which is a
Manager.

                  "Borrower" has the meaning specified in the preamble to this
Agreement.

                  "Borrower's Investment" means, with respect to any Hotel, the
Borrower's or any of its Subsidiaries' investment in such Hotel (including all
investments constituting, evidencing or secured by an interest in property,
whether tangible or intangible and whether real, personal or mixed, that is used
or intended for use in, or in any manner connected with or relating to, the
ownership or leasing of such Hotel, specifically including, without limitation,
investments in Subsidiaries and Unconsolidated Entities owning or leasing
Hotels), at cost, on a consolidated basis, provided that in determining the cost
of such investments, there shall be included (i) the amount of all cash paid and
the value (as determined by the Board of Directors of FelCor for purposes of
such investment) of any other property transferred therefor by the Borrower or
its Subsidiary, (ii) the amount of all indebtedness and other obligations
assumed or incurred by the Borrower or its Subsidiary or to which the Borrower
or its Subsidiary takes subject, and (iii) the value (as determined by the Board
of Directors of FelCor for the purposes of such investment) of all equity
securities of which the issuer is an entity that is, or upon such investment
will be, included within the Borrower or its Subsidiary and which are issued
(otherwise than for cash) to, or retained by, any person other than the Borrower
or its Subsidiary in connection with such investment. For purposes of this
definition only "indebtedness" of the Borrower or its Subsidiary shall mean the
consolidated liabilities of the Borrower and its Subsidiaries for borrowed money
(including all notes payable and drafts accepted representing extensions of
credit) and all obliga-

                                      -5-
<PAGE>   12

tions evidenced by bonds, debentures, notes or other similar instruments on
which interest charges are customarily paid, including obligations under
Capitalized Leases.

                  "Borrowing" means a borrowing consisting of Revolving Credit
Loans made on the same day by the Lenders ratably according to their respective
Revolving Credit Commitments.

                  "Business Day" means a day of the year on which banks are not
required or authorized to close in New York City and California and, if the
applicable Business Day relates to a Eurodollar Rate Loan, a day on which
dealings are also carried on in the London interbank market.

                  "Capital Expenditures" means, for any Person for any period,
the aggregate of all expenditures by such Person and its Subsidiaries, except
interest capitalized during construction, during such period for property, plant
or equipment, including, without limitation, renewals, improvements,
replacements and capitalized repairs, that would be reflected as additions to
property, plant or equipment on a consolidated balance sheet of such Person and
its Subsidiaries prepared in conformity with GAAP. For the purpose of this
definition, the purchase price of equipment which is acquired simultaneously
with the trade-in of existing equipment owned by such Person or any of its
Subsidiaries or with insurance proceeds shall be included in Capital
Expenditures only to the extent of the gross amount of such purchase price less
the credit granted by the seller of such equipment being traded in at such time
or the amount of such proceeds, as the case may be.

                  "Capitalized Lease" means, as to any Person, any lease of
property by such Person as lessee which would be capitalized on a balance sheet
of such Person prepared in conformity with GAAP.

                  "Capitalized Lease Obligations" means, as to any Person, the.
capitalized amount of all obligations of such Person or any of its Subsidiaries
under Capitalized Leases, as determined on a consolidated basis in conformity
with GAAP.

                  "Cash" shall mean coin or currency of the United States of
America or immediately available federal funds.

                  "Cash Equivalents" means (i) securities with maturities of one
year or less from the date of acquisition issued or fully guaranteed or insured
by the United States government or any agency thereof, (ii) certificates of
deposit, eurodollar time deposits, overnight bank deposits and bankers'
acceptances of any commercial bank organized under the laws of the United
States, or any State thereof, and having total assets in excess of
$5,000,000,000 having maturities of one year or less from the date of
acquisition, and (iii) commercial paper of an issuer rated at least "A-I" by S&P
or "P- 1" by Moody's, or carrying an equivalent rating by a nationally
recognized rating agency if both of the two named rating agencies cease
publishing ratings of investments.

                  "Chase" has the meaning specified in the preamble to this
Agreement.

                                      -6-
<PAGE>   13

                  "Code" means the Internal Revenue Code of 1986 (or any
successor legislation thereto), as amended from time to time.

                  "Commitment Fee" has the meaning specified in Section 2.3(a).

                  "Compliance Certificate" has the meaning specified in Section
3.1(j) hereof.

                  "Contingent Obligation" means, as applied to any Person, any
direct or indirect liability, contingent or otherwise, of such Person with
respect to any Indebtedness or Contractual Obligation of another Person, if the
purpose or intent of such Person in incurring the Contingent Obligation is to
provide assurance to the obligee of such Indebtedness or Contractual Obligation
that such Indebtedness or Contractual Obligation will be paid or discharged, or
that any agreement relating thereto will be complied with, or that any holder of
such Indebtedness or Contractual Obligation will be protected (in whole or in
part) against loss in respect thereof. Contingent Obligations of a Person
include, without limitation, (a) the direct or indirect guarantee, endorsement
(other than for collection or deposit in the ordinary course of business),
co-making, discounting with recourse or sale with recourse by such Person of an
obligation of another Person (including, in the case of any Guarantor, its
obligations under its Subsidiary Guaranty), and (b) any liability of such Person
for an obligation of another Person through any agreement (contingent or
otherwise) (i) 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 a loan, advance, stock purchase, capital
contribution or otherwise), (ii) to maintain the solvency or any balance sheet
item, level of income or financial condition of another Person, (iii) to make
take-or-pay or similar payments, if required, regardless of non-performance by
any other party or parties to an agreement, (iv) to purchase, sell or lease (as
lessor or lessee) property, or to purchase or sell services, primarily for the
purpose of enabling the debtor to make payment of such obligation or to assure
the holder of such obligation against loss, or (v) to supply funds to or in any
other manner invest in such other Person (including, without limitation, to pay
for property or services irrespective of whether such property is received or
such services are rendered), if in the case of any agreement described under
subclause (i), (ii), (iii), (iv) or (v) of this sentence the primary purpose or
intent thereof is as described in the preceding sentence. Anything herein to the
contrary notwithstanding, no agreement entered into by the Borrower or any of
its Subsidiaries or Unconsolidated Entities with respect to its acquisition of
any direct or indirect, interest in any Hotel shall, prior to the satisfaction
in full of all conditions precedent to the obligations of such Person pursuant
to the agreement, be deemed or construed to constitute a "Contingent Obligation"
or "Indebtedness" of such Person hereunder, provided that pursuant to any such
agreement, the Borrower or its Subsidiary or Unconsolidated Entity is not liable
or responsible for, and does not assume any, development or construction risks.
The amount of any Contingent Obligation shall be equal to the amount of the
obligation so guaranteed or otherwise supported.

                  "Continuing Lender" means each Existing Lender with a
Revolving Credit Commitment under the Agreement.

                  "Contractual Obligation" of any Person means any obligation,
agreement, undertaking or similar provision of any security issued by such
Person or of any agreement (including, without limitation, any management or
franchise agreement), undertaking, contract, lease,

                                      -7-
<PAGE>   14

indenture, mortgage, deed of trust or other instrument (excluding a Loan
Document) to which such Person is a party or by which it or any of its property
is bound or to which any of its properties is subject.

                  "Default" means any event which with the passing of time or
the giving of notice or both would become an Event of Default.

                  "Disqualified Stock" shall mean any class or series of Stock
of any Person that by its terms or otherwise is (i) required to be redeemed
prior to the Final Maturity Date of the Revolving Credit Loans (other than in
exchange for other equity securities which do not constitute Disqualified
Stock), (ii) redeemable at the option of the holder of such class or series of
Stock at any time prior to the Final Maturity Date of the Revolving Credit Loans
(other than in exchange for other securities which do not constitute
Disqualified Stock), or (iii) convertible into or exchangeable for Stock
referred to in clause (i) or (ii) above or Indebtedness having a scheduled
maturity prior to the Final Maturity Date of the Revolving Credit Loans.

                  "DJONT" means DJONT Operations, L.L.C., a Delaware limited
liability company.

                  "DOL" means the United States Department of Labor, or any
successor thereto.

                  "Dollars" and the sign "$" each mean the lawful money of the
United States of America.

                  "Domestic Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Domestic Lending Office" opposite
its name on Schedule II or such other office of such Lender as such Lender may
from time to time specify to the Borrower and the Administrative Agent.

                  "Drawing" shall have the meaning provided in Section 2.20(a).

                  "EBITDA" means, for any Person for any period, the Net Income
(Loss) of such Person for such period taken as a single accounting period, plus
(a) the sum of the following amounts of such Person and its Subsidiaries for
such period determined on a consolidated basis in conformity with GAAP to the
extent included in the determination of such Net Income (Loss): (i) depreciation
expense, (ii) amortization expense and other non-cash charges, (iii) interest
expense, (iv) income tax expense, (v) extraordinary losses (and other losses on
Asset Sales not otherwise included in extraordinary losses determined on a
consolidated basis in conformity with GAAP), and (vi) minority interests
attributable to FelCor LP's partnership units, less (b) the sum of the following
amounts of such Person and its Subsidiaries determined on a consolidated basis
in conformity with GAAP to the extent included in the determination of such Net
Income (Loss): (i) extraordinary gains (and in the case of the Borrower, other
gains on Asset Sales not otherwise included in extraordinary gains determined on
a consolidated basis in conformity with GAAP), (ii) the applicable share of Net
Income (Loss) of such Person's Unconsolidated Entities, (iii) cash payments made
with respect to any non-cash charge which was added back to Net Operating

                                      -8-
<PAGE>   15

Income to determine EBITDA for any prior period; plus (c) such Person's Pro Rata
Share of EBITDA of such Person's Unconsolidated Entities.

                  "Eligible Assignee" means (i) a commercial bank organized
under the laws of the United States, or any State thereof, and having total
assets in excess of $5,000,000,000; (ii) a commercial bank organized under the
laws of any other country which is a member of the OECD, or a political
subdivision of any such country, and having total assets in excess of
$5,000,000,000, provided that such bank is acting through a branch or agency
located in the country in which it is organized or another country which is also
a member of the OECD or the Cayman Islands; (iii) the central bank of any
country which is a member of the OECD; (iv) a mutual fund or an insurance
company organized under the laws of the United States, or any State thereof and
having total assets in excess of $5,000,000,000; (v) any Lender; (vi) any
Affiliate of any Lender; (vii) any person that is engaged in making, purchasing,
holding or otherwise investing in bank loans and similar extensions of credit in
the ordinary course of its business and is administered or managed by a Lender
or an Affiliate of such Lender; (viii) any Person other than an Affiliate of a
Loan Party; and (ix) only with respect to any Lender that is a fund that invests
in bank loans, any other fund or trust entity that invests in bank loans and is
advised by or managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor, in each case ((i) through (ix) above)
acceptable (a) to the Administrative Agent, and (b) provided no Default or Event
of Default exists, to the Borrower, which acceptance will not be unreasonably
withheld, conditioned or delayed.

                  "Eligible Joint Venture" means any joint venture, corporation,
partnership or other business entity in which the Borrower (i) owns directly or
indirectly a JV% of at least 50% and (ii) is (or owns directly or indirectly a
majority of the voting Stock of and controls) the managing general partner or
equivalent thereof for such entity and (iii) Borrower alone controls such
managing general partner or equivalent. For the purposes of this definition,
"control" means the possession of the power to direct or cause the direction of
management and policies of such Person (including without limitation the power
to authorize the sale or encumbrance of the assets of such Person), whether
through the ownership of voting securities, by contract or otherwise.

                  "Environmental Claim" means any accusation, allegation, notice
of violation, action, claim, Environmental Lien, demand, abatement or other
Order or direction (conditional or otherwise) by any Governmental Authority or
any other Person for personal injury (including sickness, disease or death),
tangible or intangible property damage, damage to the environment, nuisance,
pollution, contamination or other adverse effects on the environment, or for
fines, penalties or restriction, resulting from or based upon (i) the existence,
or the continuation of the existence, of a Release (including, without
limitation, sudden or non-sudden accidental or non- accidental Releases) of, or
exposure to, any Hazardous Material or other nuisance (to the extent the same
relates to any Hazardous Materials), or other Release in, into or onto the
environment (including, without limitation, the air, soil, surface water or
groundwater) at, in, by, from or related to any property owned or leased by the
Borrower or any of its Subsidiaries or Eligible Joint Ventures or any activities
or operations thereof; (ii) the environmental aspects of the transportation,
storage, treatment or disposal of Hazardous Materials in connection with any
property owned or leased by the Borrower or any of its Subsidiaries or Eligible
Joint Ventures or their operations or facilities; or (iii) the violation. or
alleged violation, of any Environmental Laws,

                                      -9-
<PAGE>   16

Orders or Environmental Permits of or from any Governmental Authority relating
to environmental matters connected with any property owned or leased by the
Borrower or any of its Subsidiaries or Eligible Joint Ventures.

                  "Environmental Laws" means any applicable federal, state,
local or foreign law (including common law), statute, code, ordinance, rule,
regulation or other requirement having the force or effect of law relating to
the environment, natural resources, or public or employee health and safety and
includes, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act ("CERCLA"), 42 U.S.C. Section 9601 et seq., the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et seq., the
Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. Section 136 et
seq., the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. Section
6901 et seq., the Toxic* Substances Control Act, 15 U.S.C. Section 2601 et seq.,
the Clean Air Act, 42 U.S.C. 7401 et seq., the Clean Water Act, 33 U.S.C.
Section 1251 et seq., the Occupational Safety and Health Act, 29 U.S.C. Section
651 et seq. (to the extent the same relates to any Hazardous Materials), and the
Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et seq., as such laws have
been amended or supplemented, and the regulations promulgated pursuant thereto,
and all analogous state and local statutes.

                  "Environmental Liabilities and Costs" means, as to any Person,
all liabilities, obligations, responsibilities, Remedial Actions, losses,
damages, punitive damages, consequential damages, treble damages, costs and
expenses (including, without limitation, all reasonable fees, disbursements and
expenses of counsel, experts and consultants and costs of investigation and
feasibility studies), fines, penalties, sanctions and interest incurred as a
result of any claim or demand by any other Person, whether based in contract,
tort, implied or express warranty, strict liability, criminal or civil statute,
including, without limitation, any thereof arising under any Environmental Law,
Environmental Permit, order or agreement with any Governmental Authority or
other Person, and which relate to any environmental, health or safety condition,
or a Release or threatened Release, and result from the past, present or future
operations of, or ownership of property by, such Person or any of its
Subsidiaries or Eligible Joint Ventures.

                  "Environmental Lien" means any Lien in favor of any
Governmental Authority arising under any Environmental Law.

                  "Environmental Permit" means any Permit required under any
applicable Environmental Laws or Order and all supporting documents associated
therewith.

                  "ERISA" means the Employee Retirement Income Security Act of
1974 (or any successor legislation thereto), as amended from time to time.

                  "ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control or treated as a single employer with any Loan
Party within the meaning of Section 414 (b), (c), (m) or (o) of the Code.

                  "ERISA Event" means (i) an event described in Sections
4043(c)(1), (2), (3), (5), (6), (8) or (9) of ERISA with respect to a Pension
Plan; (ii) the withdrawal of any Loan Party or any ERISA Affiliate from a
Pension Plan subject to Section 4063 of ERISA during a plan year in

                                      -10-
<PAGE>   17

which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA;
(iii) the complete or partial withdrawal of any Loan Party or any ERISA
Affiliate from any Multiemployer Plan or the insolvency of any Multiemployer
Plan; (iv) the filing of a notice of intent to terminate a Pension Plan or the
treatment of a plan amendment as a termination under Section 4041 of ERISA; (v)
the institution of proceedings by the PBGC to terminate or appoint a trustee to
administer a Pension Plan or Multiemployer Plan; (vi) the failure to make any
required contribution to a Pension Plan; (vii) any other event or condition
which might reasonably be expected to constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multiemployer Plan; (viii) the imposition of any liability under
Title IV of ERISA, other than for PBGC premiums due but not delinquent under
Section 4007 of ERISA; (ix) a prohibited transaction (as described in Code
Section 4975 or ERISA Section 406) shall occur with respect to any Plan; or (x)
any Loan Party or ERISA Affiliate shall request a minimum funding waiver from
the IRS with respect to any Pension Plan.

                  "Eurodollar Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Eurodollar Lending Office" below its
name on Schedule II (or, if no such office is specified, its Domestic Lending
Office) or such other office of such Lender as such Lender may from time to time
specify to the Borrower and the Administrative Agent.

                  "Eurodollar Rate" means, for any Interest Period, an interest
rate per annum equal to the rate per annum obtained by multiplying (a) a rate
per annum equal to the rate for U.S. dollar deposits with maturities comparable
to such Interest Period which appears on Telerate Page 3750 as of 11:00 a.m.,
London time, two (2) Business Days prior to the commencement of such Interest
Period, provided, however, that if such rate does not appear on Telerate Page
3750, the "Eurodollar Rate" applicable to a particular Interest Period shall
mean a rate per annum equal to the rate at which U.S. dollar deposits in an
amount approximately equal to the Principal Balance (or the portion thereof
which will bear interest at a rate determined by reference to the Eurodollar
Rate during the Interest Period to which such Eurodollar Rate is applicable in
accordance with the provisions hereof), and with maturities comparable to the
last day of the Interest Period with respect to which such Eurodollar Rate is
applicable, are offered in immediately available funds in the London Interbank
Market to the London office of Chase by leading banks in the Eurodollar market
at 11:00 a.m., London time, two (2) Business Days prior to the commencement of
the Interest Period to which such Eurodollar Rate is applicable, by (b) a
fraction (expressed as a decimal) the numerator of which shall be the number one
and the denominator of which shall be the number one minus the Eurodollar Rate
Reserve Percentage for such Interest Period.

                  "Eurodollar Rate Loan" means any outstanding principal amount
of the Revolving Credit Loans of any Lender that, for an Interest Period, bears
interest at a rate determined with reference to the Eurodollar Rate.

                  "Eurodollar Rate Reserve Percentage" for any Interest Period
means the aggregate reserve percentages (expressed as a decimal) from time to
time established by the Board of Governors of the Federal Reserve System of the
United States and any other banking authority to which any of the Lenders are
now or hereafter subject, including, but not limited to any reserve

                                      -11-
<PAGE>   18

on Eurocurrency Liabilities as defined in Regulation D of the Board of Governors
of the Federal Reserve System of the United States at the ratios provided in
such Regulation from time to time, it being agreed that any portion of the
Principal Balance bearing interest at a rate determined by reference to the
Eurodollar Rate shall be deemed to constitute Eurocurrency Liabilities, as
defined by such Regulation, and it being further agreed that such Eurocurrency
Liabilities shall be deemed to be subject to such reserve requirements without
benefit of or credit for prorations, exceptions or offsets that may be available
to any of the Lenders from time to time under such Regulation and irrespective
of whether such Lender actually maintains all or any portion of such reserve.

                  "Excluded Taxable REIT Subsidiary" means any Taxable REIT
Subsidiary that is not a Specified Taxable REIT Subsidiary.

                  "Existing Credit Facility" means the credit facilities
provided for in the Fourth Amended Revolving Credit Agreement.

                  "Existing Guarantors" means (i) FelCor/CSS Hotels, L.L.C., a
Delaware limited liability company, (ii) FelCor/LAX Hotels, L.L.C., a Delaware
limited liability company, (iii) FelCor/CSS Holdings, L.P., a Delaware limited
partnership, (iv) FelCor/St. Paul Holdings, L.P., a Delaware limited
partnership, (v) FelCor/LAX Holdings, L.P., a Delaware limited partnership, (vi)
FelCor Eight Hotels L.L.C., a Delaware limited liability company, (vii) FelCor
Hotel Asset Company, L.L.C., a Delaware limited liability company, (viii) FelCor
Nevada Holdings, L.L.C., a Nevada limited liability company, (ix) FHAC Nevada
Holdings, L.L.C., a Nevada limited liability company, (x) FHAC Texas Holdings,
L.P., a Texas limited partnership; (xi) FelCor Omaha Hotel Company, L.L.C, (xii)
FelCor Country Villa Hotel, L.L.C., (xiii) FelCor Moline Hotel, L.L.C. and (xiv)
FelCor Canada Co.

                  "Existing Lender" means each Lender which was a Lender under,
and as defined in, the Existing Credit Facility.

                  "Existing Letter of Credit" has the meaning specified in
Section 2.17.

                  "Existing Loans" means all Revolving Credit Loans outstanding
under the Existing Credit Facility.

                  "Extension Effective Date" has the meaning specified in
Section 2.22.

                  "Extension Fee" shall have the meaning specified in Section
2.22.

                  "Event of Default" has the meaning specified in Section 8.1.

                  "Facing Fee" has the meaning specified in Section 2.3(c).

                  "Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum 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

                                      -12-
<PAGE>   19

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 Administrative Agent from
three Federal funds brokers of recognized standing selected by it.

                  "FelCor" has the meaning specified in the preamble of this
Agreement.

                  "FelCor LP" has the meaning specified in the preamble of this
Agreement.

                  "FF&E Reserve" means, for any Person and its Subsidiaries
determined on a consolidated basis in accordance with GAAP (or with respect to
any Hotel) for any period, a reserve equal to four percent (4%) of Room Revenues
from any Hotel owned by such Person or its Subsidiary (or from such Hotel), for
such Period (unless such Person is contractually obligated to reserve a greater
percentage of Room Revenues, in which case such Person shall be required to
reserve such greater amount with respect to such Hotel), plus, for any Person,
such Person's Pro Rata Share of any FF&E Reserve for any Hotel owned by such
Person's Unconsolidated Entities.

                  "Final Maturity Date" means August 1, 2003; provided that the
"Final Maturity Date" may be extended to March 31, 2004 pursuant to and in
accordance with the terms of Section 2.22.

                  "Financial Covenant Imbalance" shall have the meaning set
forth in Section 2.6(c).

                  "Fiscal Quarter" means each of the three month periods ending
on March 31, June 30, September 30 and December 31.

                  "Fiscal Year" means the twelve month period ending on December
31.

                  "Fixed Charges" means, for any Person for any period, (a)
Gross Interest Expense for such period plus (b) the aggregate amount of
scheduled principal payments on the Total Indebtedness of such Person (excluding
optional prepayments and scheduled principal payments in respect of any such
Total Indebtedness which is payable in a single installment at final maturity)
required to be made during such period plus (c) dividends required to be paid by
such Person (and its Subsidiaries determined on a consolidated basis in
conformity with GAAP) in connection with preferred Stock issued by such Person
(including such Person's Pro Rata Share of such dividends required to be paid by
such Person's Unconsolidated Entities, but excluding dividends on Qualified
Preferred Stock).

                  "Fourth Amended Revolving Credit Agreement" has the meaning
specified in the recitals of this Agreement.

                  "Free Cash Flow" means, for any Person for any period, the
Adjusted Funds From Operations for such period less (a) the aggregate FF&E
Reserve for such Person and its Subsidiaries for such period, and (b) the
aggregate amount of scheduled principal payments on the Total Indebtedness of
such Person (excluding optional prepayments and scheduled principal

                                      -13-
<PAGE>   20

payments in respect of any such Indebtedness which is payable in a single
installment at final maturity) required to be made during such period.

                  "First Amendment to the Pledge Agreement" means the First
Amendment, dated as of August 1, 2000, to the Pledge Agreement.

                  "GAAP" means generally accepted accounting principles in the
United States of America as in effect from time to time set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and the statements and pronouncements
of the Financial Accounting Standards Board, or in such other statements by such
other entity as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances as of the date of
determination except that, for purposes of Articles V and VII, GAAP shall be
determined on the basis of such principles in effect on the date hereof and
consistent with those used in the preparation of the audited financial
statements referred to in Section 4.5.

                  "Governmental Authority" means any nation or government, any
state or other political subdivision thereof and any entity duly exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.

                  "Gross Interest Expense" means, for any Person for any period,
the sum of (a) the total interest expense in respect of all Indebtedness
(excluding all Contingent Obligations) of such Person and its Subsidiaries for
such period determined on a consolidated basis in conformity with GAAP, plus
capitalized interest of such Person and its Subsidiaries, plus (b) such Person's
Pro Rata Share of Gross Interest Expense of such Person's Unconsolidated
Entities.

                  "Guarantor" means the Existing Guarantors and each direct and
indirect wholly owned Subsidiary of the Borrower formed or acquired after the
date hereof, provided, however, a wholly owned Subsidiary of the Borrower which
is formed or acquired after the date hereof shall only be required to be a
Guarantor if such Subsidiary is a Required Guarantor.

                  "Hazardous Material" means any substance, material or waste
which is regulated by any Governmental Authority of the United States as a
"hazardous waste," "hazardous material," "hazardous substance," "extremely
hazardous waste," "restricted hazardous waste," "contaminant," "toxic waste,"
"toxic substance" or words of similar meaning or import under any provision of
Environmental Law, which includes, but is not limited to, petroleum, petroleum
products, asbestos, urea formaldehyde and polychlorinated biphenyls.

                  "Hilton" means Hilton Hotels Corporation, a Delaware
corporation, or any Person controlled by Hilton Hotels Corporation that is a
Manager.

                  "Hotel" means any Real Estate or Lease comprising an operating
facility offering hotel or other lodging services, or offering food and beverage
or associated retail services (so long as (i) such facility was acquired
together with and is operated in conjunction with, an

                                      -14-
<PAGE>   21

operating facility which offers hotel or other lodging services and (ii) such
facility is in immediate proximity with an operating facility which offers hotel
or other lodging services).

                  "Hotel Documents" means, with respect to any Hotel, the
following documents:

               (i) A description of such Hotel, such description to include the
         age, location and number of rooms or suites of such Hotel;

               (ii) Details of the Borrower's Investment in such Hotel and, if
         available (or able to be reasonably obtained), details of the Adjusted
         NOI of such Hotel for the prior four (4) Fiscal Quarters;

               (iii) A copy of the most recent ALTA Owner's Policy of Title
         Insurance (or commitment to issue such a policy to the Person owning or
         to own such Hotel) relating to such Hotel showing the identity of the
         fee titleholder thereto and all matters of record as of its date;

               (iv) Copies of each of the Operating Lease, Management Agreement
         and License relating to such Hotel;

               (v) Copies of all engineering, mechanical, structural and
         maintenance studies performed by third party consultants with respect
         to such Hotel;

               (vi) A "Phase I" environmental assessment of such Hotel prepared
         by an environmental engineering firm acceptable to the Administrative
         Agent, and any additional environmental studies or assessments
         available to the Borrower performed with respect to such Hotel;

               (vii) If such Hotel is owned pursuant to a Qualified Lease, a
         copy of such Lease together with all and any amendments thereto or
         modifications thereof; and

               (viii) Such other information as the Administrative Agent may
         reasonably request in order to evaluate the Hotel.

                  "Improvements" has the meaning specified in Section 4.22(c).

                  "Indebtedness" of any Person means, without duplication, the
principal amount of (i) all indebtedness of such Person for borrowed money
(including, without limitation, reimbursement and all other obligations with
respect to surety bonds, letters of credit and bankers' acceptances, whether or
not matured) or for the deferred purchase price of property or services, (ii)
all obligations of such Person evidenced by notes, bonds, debentures or similar
instruments (including, in the case of the Borrower, the Revolving Credit Loans
outstanding), (iii) all indebtedness of such Person created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (iv) all Capitalized Lease Obligations of such
Person, (v) all Contingent Obligations of such Person, (vi) all obligations of
such Person to purchase, redeem, retire,

                                      -15-
<PAGE>   22

defease or otherwise acquire for value (other than for other equity securities)
any Stock or Stock Equivalents of such Person, valued, in the case of
mandatorily redeemable preferred stock, at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends, (vii) all
Indebtedness referred to in clause (i), (ii), (iii), (iv), (v) or (vi) above
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien upon or in property
(including, without limitation, accounts and general intangibles) owned by such
Person, even though such Person has not assumed or become liable for the payment
of such Indebtedness, and (viii) all liabilities of such Person under Title IV
of ERISA.

                  "Indemnified Matters" has the meaning specified in Section
10.4(b).

                  "Indemnitees" has the meaning specified in Section 10.4.

                  "Indenture" means that certain Indenture dated as of October
1, 1997, as amended to date and as same may be amended, modified, or
supplemented from time to time, among FelCor Suites Limited Partnership
(predecessor in interest to FelCor LP) as issuer, various Borrower affiliates as
guarantors, and SunTrust Bank, Atlanta, as trustee providing for the initial
issuance of up to $175,000,000 aggregate principal amount of 73/8% senior notes
due 2004 and $125,000,000 aggregate principal amount of 75/8% senior notes due
2007.

                  "Interest Period" means, in the case of any Eurodollar Rate
Loan, (i) initially, the period commencing on the date such Eurodollar Rate Loan
is made or on the date of conversion of a Base Rate Loan to such Eurodollar Rate
Loan and ending one, two, three, six, nine (to the extent available) or twelve
(to the extent available) months thereafter, as selected by the Borrower in its
Notice of Borrowing or Notice of Conversion or Continuation given to the
Administrative Agent pursuant to Section 2.2 or 2.7, and (ii) thereafter, if
such Eurodollar Rate Loan is continued, in whole or in part, as a Eurodollar
Rate Loan pursuant to Section 2.7, a period commencing on the last day of the
immediately preceding Interest Period therefor and ending one, two, three, six,
nine (to the extent available) or twelve (to the extent available) months
thereafter, as selected by the Borrower in its Notice of Conversion or
Continuation given to the Administrative Agent pursuant to Section 2.7;
provided, however, that:

                  (A) if any Interest Period would otherwise end on a day which
         is not a Business Day, such Interest Period shall be extended to the
         next succeeding Business Day, unless the result of such extension would
         be to extend such Interest Period into another calendar month, in which
         event such Interest Period shall end on the immediately preceding
         Business Day;

                  (B) 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 end on the last Business Day of a calendar month;

                  (C) the Borrower may not select any Interest Period which ends
         after the Final Maturity Date;

                                      -16-
<PAGE>   23

                  (D) Intentionally Omitted.

                  (E) the Borrower may not select any Interest Period in respect
         of Revolving Credit Loans having an aggregate principal amount of less
         than $5,000,000; and

                  (F) there shall be outstanding at any one time no more than
         fifteen (15) Interest Periods in the aggregate.

                  "Interest Rate Contracts" means interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements, interest rate
insurance, and other agreements or arrangements designed to provide protection
against fluctuations in interest rates.

                  "Investment" means, with respect to any Person, (a) any loan
or advance to any other Person, (b) the ownership, purchase or other acquisition
of, any Stock, Stock Equivalents, other equity interest, obligations or other
securities of, (i) any other Person, (ii) all or substantially all of the assets
of any other Person, or (iii) all or substantially all of the assets
constituting the business of a division, branch or other unit operation of any
other Person, or (c) any joint venture or partnership with, or any capital
contribution to, or other investment in, any other Person.

                  "IRS" means the Internal Revenue Service, or any successor
thereto.

                  "Issuing Lender" means Chase.

                  "Joint Enterprise" means with respect to any Person, any joint
venture, corporation, partnership or other business entity which is not
(directly or indirectly) owned 100% by such Person.

                  "Joint Venture Hotel" means any Hotel owned by an Eligible
Joint Venture.

                  "JV%" means, with respect to any Eligible Joint Venture, the
percentage ownership interest of Borrower in such Eligible Joint Venture.

                  "L/C Cash Collateral Account" has the meaning specified in
Section 8.3 hereof.

                  "L/C Supportable Obligations" means (i) obligations of the
Borrower, or any of its wholly-owned Subsidiaries incurred in the ordinary
course of business with respect to insurance obligations and workers'
compensation, surety bonds and other similar statutory obligations (ii) earnest
money or performance obligations in respect of acquisitions permitted pursuant
to the terms of this Agreement and (iii) such other obligations of the Borrower,
or any of its wholly-owned Subsidiaries as are permitted to exist pursuant to
the terms of this Agreement.

                  "Lease" means, with respect to the Borrower or any of its
Subsidiaries or Unconsolidated Entities, any leasehold estate in real property
owned by the Borrower or such Subsidiary or Unconsolidated Entity, as lessee, as
such may be amended, supplemented or otherwise modified from time to time to the
extent permitted by this Agreement.

                                      -17-
<PAGE>   24

                  "Legal Proceedings" means any judicial, administrative or
arbitral actions, suits, proceedings (public or private) or governmental
proceedings.

                  "Lender" has the meaning specified in the preamble to this
Agreement.

                  "Lender Reply Period" has the meaning specified in Section
10.1(d).

                  "Letter of Credit" has the meaning specified in Section
2.17(a).

                  "Letter of Credit Fee" has the meaning specified in Section
2.3(b).

                  "Letter of Credit Outstandings" means, at any time, the sum of
(i) the aggregate Stated Amount of all outstanding Letters of Credit and (ii)
the amount of all Unpaid Drawings.

                  "Letter of Credit Request" has the meaning specified in
Section 2.18(a).

                  "Leverage Ratio" means, at any date, a fraction (expressed as
a percentage) the numerator of which is Total Indebtedness, on such date, and
the denominator of which is Total Value, on such date.

                  "License" means either (x) an agreement in favor of either the
Borrower or the Operating Lessee as licensee, permitting the use of hotel system
trademarks, trade names and any related rights in connection with the ownership
or operation of any Hotel or (y) a Management Agreement, provided the Manager
under such Management Agreement owns the rights to hotel system trademarks,
trade names and any related rights in connection with the ownership or operation
of any Hotel.

                  "Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), security interest or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever intended to assure
payment of any Indebtedness or other obligation, including, without limitation,
any conditional sale or other title retention agreement, the interest of a
lessor under a Capitalized Lease Obligation, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing,
under the Uniform Commercial Code or comparable law of any jurisdiction, of any
financing statement naming the owner of the asset to which such Lien relates as
debtor.

                  "Loan Agreement" means the Loan Agreement, dated as of April
1, 1999, among the Borrower, the financial institutions party thereto from time
to time, and The Chase Manhattan Bank, as Administrative Agent and Collateral
Agent, as such Loan Agreement may be amended, modified or supplemented from time
to time.

                  "Loan Documents" means, collectively, this Agreement, the
Revolving Credit Notes, the Subsidiary Guaranty, the Pledge Agreement and each
certificate, agreement or document executed by a Loan Party and delivered to the
Administrative Agent or any Lender in connection with or pursuant to any of the
foregoing.

                                      -18-
<PAGE>   25

                  "Loan Party" means each of the Borrower and each Subsidiary of
the Borrower that is a party to a Loan Document.

                  "Majority Lenders" means, at any time, Lenders holding an
amount greater than 50% of the then aggregate unpaid principal amount of
Revolving Credit Loans (excluding Revolving Credit Loans held by Non-Funding
Lenders) or, if no such Revolving Credit Loans are then outstanding, Lenders
having an amount greater than 50% of the Revolving Credit Commitments of all
Lenders (excluding Non-Funding Lenders).

                  "Management Agreement" means an agreement relating to the
operation and/or management of any Hotel.

                  "Manager" means Hilton, Bass, Sheraton, Meristar Hospitality
Corporation, Coastal Hotel Group, Inc., or such other manager as shall be
reasonably approved by the Borrower and the Administrative Agent (such consent
not to be unreasonably withheld or delayed) and engaged as manager under the
Management Agreement.

                  "Material Adverse Change" means a material adverse change in
any of (i) the condition (financial or otherwise), business, performance,
prospects, operations or properties of (A) either entity which comprises the
Borrower or (B) the Borrower and its Subsidiaries taken as one enterprise, (ii)
the legality, validity or enforceability of any Loan Document, or any material
Operating Lease or the Operating Leases taken as a whole, (iii) the ability of
the Borrower or its Significant Subsidiaries to repay the Obligations or to
perform its obligations under any Loan Document, (iv) the ability of (x) any
Operating Lessee to perform its obligations under any material Operating Lease
or (y) DJONT or Bass (so long as neither DJONT nor Bass is a wholly-owned
Subsidiary of the Borrower) to perform its obligations under their respective
Operating Leases taken as a whole, or (v) the rights and remedies of the Lenders
or the Administrative Agent under the Loan Documents.

                  "Material Adverse Effect" means an effect that results in or
causes, or has a reasonable likelihood of resulting in or causing, a Material
Adverse Change.

                  "Minimum Tangible Net Worth" means, with respect to the
Borrower, at any time, the sum of (a) $1,500,000,000; plus (b) 50% of the
aggregate net proceeds received by the Borrower or any of its Subsidiaries after
June 30, 2000 in connection with any offering of Stock or Stock Equivalents of
the Borrower and its Subsidiaries taken as a whole.

                  "Moody's" means Moody's Investor Service Inc.

                  "Multiemployer Plan" means, as of any applicable date, a
multiemployer plan, as defined in Section 4001(a)(3) of ERISA, and to which any
Loan Party, any of its Subsidiaries or any ERISA Affiliate is making, is
obligated to make, or within the six-year period ending at such date, has made
or been obligated to make, contributions on behalf of participants who are or
were employed by any of them.

                                      -19-
<PAGE>   26

                  "Net Income (Loss)" means, for any Person for any period, the
aggregate of net income (or loss) of such Person and its Subsidiaries for such
period, determined on a consolidated basis in conformity with GAAP.

                  "Net Operating Income" means, with respect to any Hotel, for
any period, the sum of the following (without duplication) (a) all gross income,
revenues, receipts and all other consideration received by the owner of such
Hotel from the operation thereof, including, without limitation, base rent,
percentage and similar rentals, late charges and interest payments, but
excluding extraordinary income and, until earned, security deposits, prepaid
rents and other refundable receipts, minus (b) all expenses incurred by the
owner of such Hotel during such period in the operation of such Hotel,
including, without limitation, real estate taxes, personal property taxes,
maintenance and repair costs of a non-capital nature for the structural portions
of such Hotel and premiums payable for insurance on or with respect to such
Hotels, but excluding extraordinary expenses.

                  "Non-Funding Lender" has the meaning specified in Section
2.13(f).

                  "Non-Recourse Indebtedness" of any Person means all
Indebtedness of such Person with respect to which recourse for payment is
limited to specific assets encumbered by a Lien securing such Indebtedness;
provided, however, that personal recourse of a holder of Indebtedness against
any obligor with respect thereto for fraud, misrepresentation, misapplication of
cash, waste and other circumstances customarily excluded from non-recourse
provisions in non-recourse financing of real estate shall not, by itself,
prevent any Indebtedness from being characterized as Non-Recourse Indebtedness,
provided further that if a personal recourse claim is made in connection
therewith, such claim shall not constitute Non-Recourse Indebtedness for the
purposes of this Agreement.

                  "Notice of Borrowing" has the meaning specified in Section
2.2(a).

                  "Notice of Conversion or Continuation" has the meaning
specified in Section 2.7(b) hereof.

                  "Obligations" means the Revolving Credit Loans, the obligation
to pay Unpaid Drawings and all other advances, debts, liabilities, obligations,
covenants and duties owing by the Borrower to the Administrative Agent, any
Lender, the Issuing Lender, any Affiliate of any of them or any Indemnitee, of
every type and description, present or future, arising under this Agreement or
under any other Loan Document, whether direct or indirect (including, without
limitation, those acquired by assignment), absolute or contingent, due or to
become due, now existing or hereafter arising and however acquired. The term
"Obligations" includes, without limitation, all interest, charges, expenses,
fees, attorneys' fees and disbursements and any other sum then payable by the
Borrower under this Agreement or any other Loan Document.

                  "OECD" means the Organization for Economic Cooperation and
Development.

                  "Operating Lease" means a lease or sublease relating to any
Hotel, between the Borrower or any of its Subsidiaries or Eligible Joint
Ventures or Unconsolidated Entities, as

                                      -20-
<PAGE>   27

lessor, and an Operating Lessee, as lessee, substantially in a form as approved
by Administrative Agent.

                  "Operating Lessee" means either (x) DJONT or its Subsidiary
(provided DJONT owns at least 50% of the voting Stock in such Subsidiary and
maintains voting control over such Subsidiary), or (y) any entity listed on
Schedule III attached hereto, each as lessee under an Operating Lease.

                  "Operator" means the Operating Lessee and/or the Manager or
both (as the case may be) responsible for the operation and management of any
Hotel.

                  "Order" means any order, injunction, judgment, decree, ruling,
assessment or arbitration award.

                  "Original Revolving Credit Agreement" has the meaning
specified in the recitals to this Agreement.

                  "Other Taxes" has the meaning specified in Section 2.14(b).

                  "Participant" has the meaning specified in Section 2.19(a).

                  "PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.

                  "Pension Plan" means a plan, other than a Multiemployer Plan,
which is covered by Title IV of ERISA or Code Section 412 and which any Loan
Party, any of its Subsidiaries or any ERISA Affiliate maintains, contributes to
or has an obligation to contribute to on behalf of participants who are or were
employed by any of them.

                  "Permit" means any permit, approval, authorization, license,
variance, registration, permission or consent required from a Governmental
Authority under an applicable Requirement of Law.

                  "Permitted Covenant" means (i) any periodic reporting
covenant, (ii) any covenant restricting payments by the Borrower with respect to
any securities of the Borrower which are junior to the Qualified Preferred
Stock, (iii) any covenant the default of which can only result in an increase in
the amount of any redemption price, or dividend rate, (iv) any covenant the
default of which gives rise only to rights or remedies which are subject to
subordination terms reasonably acceptable to the Administrative Agent, (v) any
covenant providing board membership or observance rights with respect to the
Borrower's board of directors and (vi) any other covenant that does not
adversely affect the interests of the Lenders (as reasonably determined by the
Administrative Agent).

                  "Permitted Liens" means, collectively, (a) Liens arising by
operation of law in favor of materialmen, mechanics, warehousemen, carriers,
lessors or other similar Persons incurred by the Borrower or any of its
Subsidiaries or Eligible Joint Ventures in the ordinary course of business which
secure its obligations to such Person; provided, however, that (i) the

                                      -21-
<PAGE>   28

Borrower or such Subsidiary or Eligible Joint Venture is not in default with
respect to such payment obligation to such Person, or (ii) the Borrower or such
Subsidiary or Eligible Joint Venture is in good faith and by appropriate
proceedings diligently contesting such obligation and adequate provision is made
for the payment thereof; (b) Liens (excluding Environmental Liens) securing
taxes, assessments or governmental charges or levies; provided, however, that
neither the Borrower nor any of its Subsidiaries or Eligible Joint Ventures is
in default in respect of any payment obligation with respect thereto unless the
Borrower or such Subsidiary or Eligible Joint Venture is in good faith and by
appropriate proceedings diligently contesting such obligation and adequate
provision is made for the payment thereof; (c) zoning restrictions, subleases,
licenses or concessions for restaurants, bars, gift shops, antennas,
communications equipment and similar agreements entered into in the ordinary
course of such Person's business in connection with the ownership and operation
of a hotel; and easements, licenses, reservations, restrictions on the use of
real property or minor irregularities incident thereto which do not in the
aggregate materially detract from the value or use of the property or assets of
the Borrower or any of its Subsidiaries or Eligible Joint Venture or impair, in
any material manner, the use of such property for the purposes for which such
property is held by the Borrower or any such Subsidiary or Eligible Joint
Venture; and (d) Liens secured by collateral similar in type to the collateral
securing the Pledge Agreement (but not the Collateral, as defined in and pledged
under the Pledge Agreement) and securing on an equal and ratable basis the
Revolving Credit Loans and any other Indebtedness.

                  "Permitted Transferee" shall be those entities named on
Schedule IV.

                  "Person" means an individual, partnership, corporation
(including, without limitation, a business trust), limited liability company,
joint stock company, trust, unincorporated association, joint venture or other
entity, or a Governmental Authority.

                  "Plan" means an employee benefit plan, as defined in Section
3(3) of ERISA, which any Loan Party or any of its Subsidiaries maintains,
contributes to or has an obligation to contribute to on behalf of participants
who are or were employed by any of them.

                  "Pledge Agreement" means that certain Pledge and Security
Agreement dated as of April 1, 1999 (a copy of which is attached hereto as
Exhibit K), entered into in connection with the Loan Agreement, in which
interests in certain entities of or affiliated with the Borrower are pledged
under certain circumstances as collateral for, inter alia, the Revolving Credit
Loans, as such Pledge Agreement may be amended, modified or supplemented from
time to time (including, without limitation, pursuant to the First Amendment to
the Pledge Agreement).

                  "Previous Maximum Revolving Credit Amount" has the meaning
specified in the recitals to this Agreement.

                  "Previous Term Loans" has the meaning specified in the
recitals to this Agreement.

                  "Principal Balance" means, collectively, the outstanding
principal balances of the Revolving Credit Notes from time to time.

                                      -22-
<PAGE>   29

                  "Projections" means those financial projections covering the
fiscal years ending in 2000 through 2004, inclusive, delivered to the Lenders by
the Borrower.

                  "Pro Rata Share" means, for any Person, with respect to such
Person's Unconsolidated Entities (or Subsidiaries), the percentage ownership
interest of such Person in such Unconsolidated Entity (or Subsidiary), provided
that, in the event that such Person is the general partner of such
Unconsolidated Entity (or Subsidiary), such Person's Pro Rata Share with respect
to such Unconsolidated Entity (or Subsidiary) shall be the percentage of the
general partner interests owned by such Person in such Unconsolidated Entity (or
Subsidiary) with respect to any Indebtedness for which recourse may be made
against any general partner of such Unconsolidated Entity (or Subsidiary).

                  "Purchasing Lender" has the meaning specified in Section 2.15.

                  "Qualified Lease" means any Lease (a) which is a direct ground
lease granted by the fee owner of real property, (b) which may be transferred
and/or assigned without the consent of the lessor (or as to which the Lease
expressly provides that (i) such Lease may be transferred and/or assigned with
the consent of the lessor and (ii) such consent shall not be unreasonably
withheld or delayed), (c) which has a remaining term (including any renewal
terms exercisable at the sole option of the lessee) of at least 35 years, (d)
under which no material default has occurred and is continuing, (e) with respect
to which a security interest may be granted without the consent of the lessor
(or as to which the Lease expressly provides that (i) a security interest in
such lease may be granted with the consent of the lessor and (ii) such consent
shall not be unreasonably withheld or delayed), and (f) which contains lender
protection provisions reasonably acceptable to the Administrative Agent.
Notwithstanding the foregoing, Qualified Lease shall in any event include each
of the Leases described on Schedule V (which Schedule includes (i) all leases
existing as of the Restatement Effective Date which satisfy the criteria set
forth above and (ii) all leases deemed to be Qualified Leases pursuant to
Section 10.1(a)(x) of this Agreement prior to the Restatement Effective Date).

                  "Qualified Preferred Stock" means any preferred stock of
either entity comprising the Borrower, so long as the terms of any such
preferred stock (i) do not contain any mandatory put, redemption, repayment,
sinking fund or other similar provision occurring before August 1, 2006, (ii)
expressly provide that (x) dividends on such preferred stock are only payable if
dividends are concurrently paid on the Borrower's common stock and (y) no
remedies are available to the holders of such preferred stock as a result of the
failure to pay dividends other than the election of up to two directors of the
Borrower, (iii) do not contain any covenants other than any Permitted Covenant
and (iv) do not grant the holders thereof any voting rights except for (x)
voting rights required to be granted to such holders under applicable law, (y)
limited customary voting rights on fundamental matters such as mergers,
consolidations, sales of substantial assets, or liquidations involving the
Borrower and (z) limited customary voting rights to elect not more than two
directors during any period when dividends are in arrears.

                  "Ratable Portion" or "ratably" means, except as otherwise
specifically provided herein, with respect to any Lender, the quotient obtained
by dividing the Revolving Credit Commitment of such Lender by the Revolving
Credit Commitments of all Lenders and that

                                      -23-
<PAGE>   30

payments of principal of the Revolving Credit Loans and interest thereon shall
be made pro rata in accordance with the respective unpaid principal amounts of
the Revolving Credit Loans held by the Lenders.

                  "Real Estate" means all of those plots, pieces or parcels of
land now owned or hereafter acquired by the Borrower or any of its Subsidiaries
or Unconsolidated Entities (the "Land"), including, without limitation, those
listed on Schedule 4.22(a), together with the right, title and interest of the
Borrower or such Subsidiary or Unconsolidated Entity, if any, in and to the
streets, the land lying in the bed of any streets, roads or avenues, opened or
proposed, in front of, adjoining or abutting the Land to the center line
thereof, the air space and development rights pertaining to the Land and the
right to use such air space and development rights, all rights of way,
privileges, liberties, tenements, hereditaments, and appurtenances belonging or
in any way appertaining thereto, all fixtures, all easements now or hereafter
benefiting the Land and all royalties and rights appertaining to the use and
enjoyment of the Land, including, without limitation, all alley, vault,
drainage, mineral, water, oil and gas rights, together with all of the buildings
and other improvements now or hereafter erected on the Land, and any fixtures
appurtenant thereto.

                  "Recourse Indebtedness" of any Person means the sum of the
following: (A) all Indebtedness of such Person and its Subsidiaries determined
on a consolidated basis in conformity with GAAP as to which recourse for payment
is not limited to the specific assets encumbered by a Lien, provided, however,
that personal recourse of a holder of Indebtedness against (i) any Subsidiary
(or Unconsolidated Entity) of the Borrower formed specifically for the limited
purpose of owning specific assets which secure Indebtedness which does not
exceed 65% of the value of the assets owned by such Subsidiary (or
Unconsolidated Entity) or (ii) any obligor with respect thereto for fraud,
misrepresentation, misapplication of cash, waste and other circumstances
customarily excluded from non-recourse provisions in non-recourse financing of
real estate, shall not, by itself, cause any Indebtedness to be characterized as
Recourse Indebtedness, provided further, that if a personal recourse claim is
made in connection therewith, such claim shall constitute Recourse Indebtedness
for the purposes of this Agreement; plus (B) such Person's Pro Rata Share of
Recourse Indebtedness of such Person's Unconsolidated Entities.

                  "Recourse Secured Indebtedness" of any Person means the sum of
the following: (A) all Indebtedness of such Person and its Subsidiaries
determined on a consolidated basis in conformity with GAAP (x) which is secured
by a Lien (other than a Permitted Lien or in connection with the Pledge
Agreement) and (y) as to which recourse for payment is not limited to the
specific assets encumbered by such Lien, provided, however, that personal
recourse of a holder of Indebtedness against (i) any Subsidiary (or
Unconsolidated Entity) of Borrower formed specifically for the limited purpose
of owning specific assets which secure Indebtedness which does not exceed 65% of
the value of the assets owned by such Subsidiary (or Unconsolidated Entity) or
(ii) any obligor with respect thereto for fraud, misrepresentation,
misapplication of cash, waste and other circumstances customarily excluded from
non-recourse provisions in non-recourse financing of real estate, shall not, by
itself, cause any Indebtedness to be characterized as Recourse Secured
Indebtedness, provided further, that if a personal recourse claim is made in
connection therewith, such claim shall constitute Recourse Secured Indebtedness
for the

                                      -24-
<PAGE>   31

purposes of this Agreement; plus (B) such Person's Pro Rata Share of Recourse
Secured Indebtedness of such Person's Unconsolidated Entities.

                  "Refurbishment Hotel" shall mean Hotels, designated by
Borrower, which (i) will experience or are experiencing a disruption in hotel
operations due to refurbishment and (ii) are continuously operating with at
least 65% of its rooms in service at all times. Any given Hotel may only be
characterized as a Refurbishment Hotel for a maximum of six consecutive Fiscal
Quarters provided, however, that the requirement of continuous operation shall
not apply with respect to the Allerton Hotel or any other Hotel approved by the
Administrative Agent (each, a "Specified Refurbishment Hotel").

                  "Register" has the meaning specified in Section 10.7.

                  "Release" means any release, spill, emission, leaking,
pumping, pouring, dumping, emptying, injection, deposit, disposal, discharge,
dispersal, leaching or migration on or into the indoor or outdoor environment or
into or out of any property.

                  "Remedial Action" means all actions, including without
limitation any Capital Expenditures, required or necessary to (i) clean up,
remove, treat or in any other way address any Hazardous Material or other
substance in the indoor or outdoor environment, (ii) prevent the Release or
threat of Release, or minimize the further Release, of any Hazardous Material or
other substance so it does not migrate or endanger or threaten to endanger
public health or welfare or the indoor or outdoor environment, (iii) perform
pre-remedial studies and investigations or post- remedial monitoring and care,
or (iv) bring facilities on any property owned or leased by the Borrower or any
of its Subsidiaries into compliance with all Environmental Laws and
Environmental Permits.

                  "Reporting Operating Lessee" means any Operating Lessee (other
than a wholly-owned Subsidiary of the Borrower) which is a party to Operating
Leases which in the aggregate provide at least 25% of Borrower's consolidated
Operating Lease revenue.

                  "Requested Operating Lessee" means each Operating Lessee
(other than a wholly-owned Subsidiary of the Borrower) which is a party to
Operating Leases which in the aggregate provide at least 10% of Borrower's
consolidated Operating Lease revenue provided such Operating Lessee has been
designated by the Administrative Agent as a Requested Operating Lessee.

                  "Required Guarantor" means any direct or indirect wholly-owned
Subsidiary of the Borrower which is formed after the date hereof, provided, the
value of the assets of such Subsidiary plus the value of the assets of such
Person's Subsidiaries' exceed 2% of Total Value, provided, further, that in the
event the aggregate value of the assets of all wholly-owned Subsidiaries which
are not Guarantors exceed 2% of Total Value then each direct or indirect
wholly-owned Subsidiary formed thereafter shall be deemed a Required Guarantor.
Notwithstanding the above, (a) any direct or indirect wholly-owned Subsidiary of
the Borrower, whether existing on the date hereof or formed after the date
hereof, that is determined at any time to be a Specified Taxable REIT Subsidiary
shall be deemed to be a Required Guarantor, (b) any

                                      -25-
<PAGE>   32

direct or indirect wholly-owned Subsidiary of the Borrower, whether existing on
the date hereof or formed after the date hereof, that is determined at any time
to be an Excluded Taxable REIT Subsidiary shall be deemed not to be a Required
Guarantor and (c) any Special Purpose Subsidiary, whether existing on the date
hereof or formed after the date hereof, shall be deemed not to be a Required
Guarantor, provided that in the event that the aggregate Indebtedness of all
Special Purpose Subsidiaries which are not Guarantors exceeds 25% of Total Value
then each Special Purpose Subsidiary formed thereafter shall be deemed a
Required Guarantor.

                  "Requirement of Law" means, as to any Person, the certificate
of incorporation and by-laws or other organizational or governing documents of
such Person, and all federal, state and local laws, rules and regulations,
including, without limitation, federal, state or local securities, antitrust and
licensing laws, all food, health and safety laws, and all applicable trade laws
and requirements, including, without limitation, all disclosure requirements of
Environmental Laws, ERISA and all orders, judgments, decrees or other
determinations of any Governmental Authority or arbitrator, applicable to or
binding upon such Person or any of its property or to which such Person or any
of its property is subject.

                  "Responsible Officer" means, with respect to any Person, any
of the principal executive officers or general partners of such Person.

                  "Restatement Effective Date" has the meaning specified in
Section 3.1.

                  "Restricted Payments" has the meaning specified in Section
7.4.

                  "Revolving Credit Commitment" means, as to each Lender, the
commitment of such Lender to make Revolving Credit Loans to the Borrower
pursuant to Section 2.1 in the aggregate principal amount outstanding not to
exceed the amount set forth opposite such Lender's name on Schedule I under the
caption "Revolving Credit Commitment", as such amount may be reduced or
increased pursuant to this Agreement, and "Revolving Credit Commitments" means
the aggregate Revolving Credit Commitments of all Lenders.

                  "Revolving Credit Loan" or "Revolving Credit Loans" means the
revolving credit loan or loans made or to be made by a Lender (or Lenders) to
the Borrower pursuant to Article II.

                  "Revolving Credit Note" means a promissory note of the
Borrower payable to the order of any Lender in a stated principal amount equal
to the amount of such Lender's Revolving Credit Commitment as originally in
effect, in substantially the form of Exhibit A, evidencing the aggregate
Indebtedness of the Borrower to such Lender resulting from the Revolving Credit
Loans made by such Lender and "Revolving Credit Notes" means, collectively the
Revolving Credit Notes.

                  "Room Revenues" means Net Rooms Department Revenue (as defined
in the Uniform System of Accounts for the Lodging Industry).

                  "S&P" means Standard & Poor's Ratings Services Group and its
successors.

                                      -26-
<PAGE>   33

                  "Second Amended Revolving Credit Agreement" has the meaning
specified in the recitals to this Agreement.

                  "Settlement Date" has the meaning specified in Section
2.16(d).

                  "Sheraton" means Sheraton Operating Corporation or any Person
controlled by Starwood Hotels & Resorts Worldwide, Inc. (or its successors or
assigns) that is a Manager.

                  "Significant Subsidiary" means, at any date of determination,
(i) any Subsidiary of the Borrower which, or (ii) any group of Subsidiaries of
the Borrower which when aggregated, at such date, directly or indirectly own(s)
or lease(s) one or more Hotels having an aggregate value (calculated on the
basis of the Borrower's Investment therein) in excess of 3% of Total Value at
such time.

                  "Solvent" means, with respect to any Person, that the value of
the assets of such Person (at fair value) is, on the date of determination,
greater than the total amount of liabilities (including, without limitation,
contingent and unliquidated liabilities) of such Person as of such date and
that, as of such date, such Person is able to pay all liabilities of such Person
as such liabilities mature and does not have unreasonably small capital. In
computing the amount of contingent or unliquidated liabilities at any time, such
liabilities will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.

                  "Special Purpose Subsidiary" means any direct or indirect
wholly-owned Subsidiary of the Borrower (i) formed solely in connection with a
securitization or similar financing, (ii) whose assets are subject to Liens
securing Indebtedness incurred in connection with such securitization or similar
financing, and (iii) that is otherwise restricted in its ability to incur any
Indebtedness or engage in any business activities other than with respect to
such securitization or similar financing.

                  "Specified Refurbishment Hotel" has the meaning specified in
the definition of Refurbishment Hotel.

                  "Specified Taxable REIT Subsidiary" means any Taxable REIT
Subsidiary that either (i) is an Operating Lessee or (ii) owns or operates one
or more Hotels.

                  "Stated Amount" of each Letter of Credit means, at any time,
the maximum amount available to be drawn thereunder (in each case determined
without regard to whether any conditions to drawing could then be met).

                  "Status" means the existence of Level I Status, Level II
Status, Level III Status, Level IV Status, Level V Status, Level VI Status,
Level VII Status, Level VIII Status, Level IX Status or Level X Status, as the
case may be.

                  As used in this definition:

                                      -27-
<PAGE>   34
                 "Level I Status" exists on any date if, on such date, either
         Borrower has a long-term senior unsecured actual debt rating of A- or
         better by S&P and A3 or better by Moody's Investor Service, Inc.
         ("Moody's");

                  "Level II Status" exists on any date if, on such date, either
         Borrower has a long-term senior unsecured actual debt rating of BBB+ by
         S&P and Baa1 by Moody's;

                  "Level III Status" exists on any date if, on such date, either
         Borrower has a long-term senior unsecured actual debt rating of BBB by
         S&P and Baa2 by Moody's;

                  "Level IV Status" exists on any date if, on such date, either
         Borrower has a long-term senior unsecured debt rating of BBB- by S&P
         and Baa3 by Moody's;

                  "Level V Status" exists on any date if, on such date (y) none
         of Level I Status through Level IV Status exists and (z) the Leverage
         Ratio is less than 25%;

                  "Level VI Status" exists on any date if, on such date (y) none
         of Level I Status through Level IV Status exists and (z) the Leverage
         Ratio is equal to or greater than 25% but less than 35%;

                  "Level VII Status" exists on any date if, on such date (y)
         none of Level I Status through Level IV Status exists and (z) the
         Leverage Ratio is equal to or greater than 35% but less than 40%

                  "Level VIII Status" exists on any date if, on such date (y)
         none of Level I Status through Level IV Status exists and (z) the
         Leverage Ratio is equal to or greater than 40% but less than 45%;

                  "Level IX Status" exists on any date if, on such date (y) none
         of the Level I Status through Level IV Status exists and (z) the
         Leverage Ratio is equal to or greater than 45% but less than 50%.

                  "Level X Status" exists on any date if, on such date (y) none
         of Level I Status through Level IV Status exists and (z) the Leverage
         Ratio is equal to or greater than 50% but less than 55%.

                  If S&P and/or Moody's shall cease to issue ratings of debt
         securities of real estate investment trusts generally, then the
         Administrative Agent and the Borrower shall negotiate in good faith to
         agree upon a substitute rating agency or agencies (and to correlate the
         system of ratings of each substitute rating agency with that of the
         rating agency for which it is substituting) and (a) until such
         substitute rating agency or agencies are agreed upon, Status shall be
         determined on the basis of the rating assigned by the other rating
         agency (or, if both S&P and Moody's shall have so ceased to issue such
         ratings, on the basis of the Status in effect immediately prior
         thereto) and (b) after such substitute rating agency or agencies are
         agreed upon, Status shall be determined on the basis of the rating
         assigned by the other rating agency and such substitute rating agency
         or the two substitute rating agencies, as the case may be. If the long
         term senior unsecured

                                      -28-
<PAGE>   35

         actual debt ratings of either Borrower by S&P and Moody's are not
         equivalent, the higher rating will apply for the purposes of
         determining Status. If the long term senior unsecured actual debt
         ratings of either Borrower by S&P and Moody's are two or more Levels
         apart, the rating one Level below the higher rating will apply for the
         purposes of determining Status.

                  "Stock" means shares of capital stock, beneficial or
partnership interests, participations or other equivalents (regardless of how
designated) of or in a corporation, partnership, limited liability company or
equivalent entity, whether voting or non-voting, and includes, without
limitation, common stock, preferred stock, partnership interests and limited
liability company interests.

                  "Stock Equivalents" means all securities (other than Stock)
convertible into or exchangeable for Stock and all warrants, options or other
rights to purchase or subscribe for any stock, whether or not presently
convertible, exchangeable or exercisable.

                  "Subsidiary" means, with respect to any Person (other than
FelCor LP with respect to FelCor), at any date, any corporation, partnership or
other business entity the accounts of which would be consolidated with those of
such Person in its consolidated financial statements in accordance with GAAP, if
such statements were prepared as of such date.

                  "Subsidiary Guaranty" means a guaranty, in substantially the
form of Exhibit I, executed by each Guarantor, as such guaranty may be amended,
supplemented or otherwise modified from time to time.

                  "Super Majority Lenders" means, at any time, Lenders holding
at least 66-2/3% of the then aggregate unpaid principal amount of Revolving
Credit Loans (excluding Revolving Credit Loans held by Non-Funding Lenders) or,
if no such Revolving Credit Loans are then outstanding, Lenders having at least
66-2/3 % of the Revolving Credit Commitments of all Lenders (excluding
Non-Funding Lenders).

                  "Swing Advance" has the meaning set forth in Section 2.16.

                  "Swing Advance Bank" means Chase.

                  "Tangible Net Worth" means, with respect to the Borrower at
any date, (a) the sum of (i) the total shareholders' equity of FelCor, and (ii)
the book value of all partnership interests in FelCor LP owned by Persons other
than FelCor; minus (b) the sum of all intangible assets of FelCor, each as shown
on the consolidated balance sheet of FelCor as of such date.

                  "Tax Affiliate" means, as to any Person, (i) any Subsidiary of
such Person, and (ii) any Affiliate of such Person with which such Person files
or is eligible to file consolidated, combined or unitary tax returns.

                  "Tax Return" has the meaning specified in Section 4.3.

                                      -29-
<PAGE>   36

                  "Taxable REIT Subsidiary" means any direct or indirect
wholly-owned Subsidiary of the Borrower that qualifies as a taxable REIT
subsidiary under Section 856(l) of the Code.

                  "Taxes" has the meaning specified in Section 2.14(a).

                  "Telerate Page 3750" means the display designated as "Page
3750" on the Associated Press-Dow Jones Telerate Service (or such other page as
may replace Page 3750 on the Associated Press-Dow Jones Telerate Service or such
other service as may be nominated by the British Bankers' Association as the
information vendor for the purpose of displaying British Bankers' Association
interest settlement rates for U.S. Dollar deposits). Any Eurodollar Rate
determined on the basis of the rate displayed on Telerate Page 3750 in
accordance with the provisions hereof shall be subject to corrections, if any,
made in such rate and displayed by the Associated Press-Dow Jones Telerate
Service within one hour of the time when such rate is first displayed by such
Service.

                  "Term Loans" shall mean all loans outstanding under the Loan
Agreement, dated as of April 1, 1999, among the Borrower, the lenders party
hereto, and the Administrative Agent, as amended, modified or supplemented from
time to time.

                  "Termination Date" means the earlier of (i) the Final Maturity
Date, and (ii) the date of termination in whole of the Revolving Credit
Commitments pursuant to Section 2.4 or 8.2.

                  "Third Amended Revolving Credit Agreement" has the meaning
specified in the recitals to this Agreement.

                  "Total Indebtedness" of any Person means the sum of the
following (without duplication): (a) all Indebtedness of such Person and its
Subsidiaries determined on a consolidated basis in conformity with GAAP, plus
(b) such Person's Pro Rata Share of Indebtedness of such Person's Unconsolidated
Entities, provided, however, Indebtedness of a Person's Subsidiary shall only be
included in the calculation of Total Indebtedness to the extent of the greater
of (x) such Person's Pro Rata Share of such Indebtedness and (y) the amount of
such Indebtedness guaranteed by such Person.

                  "Total Secured Indebtedness" of any Person means any Total
Indebtedness of such Person for which the obligations thereunder are secured by
a pledge of or other encumbrance (other than a Permitted Lien or in connection
with the Pledge Agreement) on any assets of such Person or its Subsidiaries or
Unconsolidated Entities.

                  "Total Value" means the sum of:

                  (A) for Hotels owned or leased pursuant to a Qualified Lease
         (including newly acquired Hotels and Hotels to be immediately acquired
         using the proceeds of any Revolving Credit Loans), other than Hotels
         described in clause (B) below, Adjusted NOI on a consolidated basis
         from such Hotels for the preceding four (4) Fiscal Quarters divided by
         ten percent (10%); plus

                                      -30-
<PAGE>   37

                  (B) for Hotels owned or leased pursuant to a Qualified Lease
         by Borrower (or any Subsidiary or Unconsolidated Entity of Borrower)
         (x) for less than four (4) fiscal Quarters and for which the Borrower
         (or any Subsidiary or Unconsolidated Entity of Borrower) does not have,
         or is not able to reasonably obtain, trailing four quarter audited
         financial information or (y) which the Borrower has designated as a
         Refurbishment Hotel, in each such case 95% of the Borrower's Investment
         in such Hotels (provided that if the Allerton Hotel is designated as a
         Refurbishment Hotel, then such Hotel (together with any other Specified
         Refurbishment Hotel) shall be valued at 85% of the Borrower's
         Investment in such Hotel); plus

                  (C) the sum of $15,000,000, being the agreed aggregate sum of
         the Borrower's investment at cost in (x) certain vacant land at the
         Kingston Plantation Hotel in Myrtle Beach, South Carolina, and (y)
         Promus/FCH Condominium Company, L.L.C.; plus

                  (D) unencumbered Cash or Cash Equivalents held by the Borrower
         and its Subsidiaries (determined on a consolidated basis in accordance
         with GAAP) plus the Borrower's Pro Rata Share of unencumbered Cash or
         Cash Equivalents held by the Borrower's Unconsolidated Entities;

provided, however, that in the case of (A) above, Adjusted NOI with respect to a
Hotel shall only be included in the calculation of Total Value if such Hotel is,
as at the date of such calculation, owned or leased by Borrower, its Subsidiary
or its Unconsolidated Entity but only to the extent (i) in the case of Adjusted
NOI attributable to the Borrower's Subsidiaries, financial statements prepared
in accordance with GAAP would consolidate such Subsidiary with the Borrower and
(ii) in the case of Adjusted NOI attributable to the Borrower's Unconsolidated
Entities, of the Borrower's Pro Rata Share of such Adjusted NOI, and provided
further, in the case of (B) above, the Borrower's Investment with respect to a
Hotel shall only be included in the calculation of Total Value if such Hotel is,
as of the date of such calculation, owned by the Borrower, its Subsidiary or
Unconsolidated Entity. Notwithstanding the foregoing, in no event shall more
than 20% of Total Value be attributable to Refurbishment Hotels which are valued
at 95% (or 85% in the case of the Allerton Hotel or any other Specified
Refurbishment Hotel) of Borrower's Investment.

                  "Unconsolidated Entity" means, with respect to any Person, at
any date, any other Person in whom such Person holds an Investment, which
Investment is accounted for in the financial statements of such Person on an
equity basis of accounting and whose financial results would not be consolidated
under GAAP with the financial results of such Person on the consolidated
financial statements of such Person, if such statements were prepared as of such
date.

                  "Unencumbered" means, with respect to any Hotel, at any date
of determination, the circumstance that such Hotel on such date:

                  (a) is not subject to any Liens (including restrictions on
         transferability or assignability) of any kind (including any such Lien
         or restriction imposed by (i) any agreement governing Indebtedness, and
         (ii) the organizational documents of the Borrower

                                      -31-
<PAGE>   38

         or any of its Subsidiaries or Eligible Joint Ventures, but excluding
         Permitted Liens and, in the case of any Qualified Lease (to the extent
         permitted by the definition thereof), restrictions on transferability
         or assignability in respect of such Lease);

                  (b) is not subject to any agreement (including (i) any
         agreement governing Indebtedness, and (ii) if applicable, the
         organizational documents of the Borrower or any of its Subsidiaries or
         Eligible Joint Ventures) which prohibits or limits the ability of the
         Borrower or any of its Subsidiaries or Eligible Joint Ventures to
         create, incur, assume or suffer to exist any Lien upon such Hotel,
         other than Permitted Liens (excluding any agreement or organizational
         document (x) which limits generally the amount of Indebtedness which
         may be incurred by the Borrower or its Subsidiaries or Eligible Joint
         Ventures or (y) which requires the consent of partners (or the
         equivalent) in such Eligible Joint Venture (other than the Borrower or
         its wholly owned Subsidiaries) to create, incur, assume or suffer to
         exist any Lien upon such Hotel); and

                  (c) is not subject to any agreement (including any agreement
         governing Indebtedness) which entitles any Person to the benefit of any
         Lien (other than Permitted Liens) on such Hotel, or would entitle any
         Person to the benefit of any such Lien upon the occurrence of any
         contingency (other than pursuant to an "equal and ratable" clause
         contained in any agreement governing Indebtedness).

                  For the purposes of this Agreement, any Joint Venture Hotel or
Hotel owned by the Borrower, or a Subsidiary of the Borrower shall not be deemed
to be Unencumbered unless both (i) such Hotel and (ii) all Stock owned directly
or indirectly by either FelCor or FelCor LP in the entity that owns such Hotel
is Unencumbered (other than by a Permitted Lien or in connection with the Pledge
Agreement).

                  "Unencumbered Hotel Property" means, collectively, (a) such of
the Hotels owned or leased by the Borrower or any of its direct or indirect
wholly-owned Subsidiaries, and (b) such of the Joint Venture Hotels, as in each
case shall meet at any time and from time to time, each of the following minimum
criteria:

                  (a) such Hotel is Unencumbered;

                  (b) such Hotel is free of all material structural and title
         defects and other material adverse matters;

                  (c) such Hotel is, as of the date upon which such Hotel is
         included as an Unencumbered Hotel Property and as of the end of each
         succeeding Fiscal Quarter, (i) in compliance, in all material respects,
         with all applicable Environmental Laws, and (ii) not subject to any
         material Environmental Liabilities and Costs, in each case as initially
         verified by a written report of an environmental consultant reasonably
         acceptable to the Administrative Agent;

                                      -32-
<PAGE>   39

                  (d) such Hotel is (i) owned in fee simple by, or (ii) leased
         pursuant to a Qualified Lease in favor of, the Borrower or its direct
         or indirect wholly-owned Subsidiary or an Eligible Joint Venture;

provided that, if a Joint Venture Hotel is owned by an Eligible Joint Venture
which owns more than a single Hotel, such Joint Venture Hotel shall only be an
Unencumbered Hotel Property if it satisfies all of the requirements set forth in
subparagraphs (a) through (d) above and all other Hotels owned by such Eligible
Joint Venture satisfy the conditions set forth in subparagraphs (a) and (c)
above, provided further, that the parties acknowledge and agree that the Embassy
Suites Hotel located at Los Angeles Airport, CA is subject to a mortgage in
favor of FelCor LP but the Administrative Agent has agreed, as a one time waiver
only, to accept such Hotel as Unencumbered (for purposes of clause (a) above)
provided that such Hotel shall cease to be Unencumbered (for purposes of clause
(a) above), inter alia, in the event that FelCor LP assigns its mortgage to any
other Person.

                  "Unencumbered NOI" means Adjusted NOI from each Unencumbered
Hotel Property, provided, that (i) only Borrower's JV% of Adjusted NOI generated
by any Joint Venture Hotel shall be included in Unencumbered NOI and (ii) in no
event shall more than 25% of Unencumbered NOI be attributable to Unencumbered
Hotel Properties leased pursuant to Qualified Leases.

                  "Unpaid Drawing" has the meaning specified in Section 2.20(a).

                  "Unsecured Indebtedness" of any Person means any Indebtedness
of such Person not required to be included in the computation of Total Secured
Indebtedness of such Person.

                  "Unsecured Interest Expense" means, for any Person for any
period, the greater of (I) the sum of (a) the total interest expense in respect
of all Unsecured Indebtedness of such Person (excluding, on an annual basis, up
to $3,000,000 of noncash expense which is attributable to the amortization of
costs and expenses incurred in connection with the incurrence of such
Indebtedness) and its Subsidiaries for such period determined on a consolidated
basis in conformity with GAAP, plus capitalized interest of such Person and its
Subsidiaries in respect of Unsecured Indebtedness, plus (b) such Person's Pro
Rata Share of Unsecured Interest Expense of such Person's Unconsolidated
Entities and (II) 7.5% of the sum of (a) the average outstanding balance of all
Unsecured Indebtedness of such Person and its Subsidiaries for such period
determined on a consolidated basis in conformity with GAAP plus (b) such
Person's Pro Rata Share of Unsecured Indebtedness of such Person's
Unconsolidated Entities for such period.

                  1.2. Computation of Time Periods. In this Agreement, in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding" and the word "through" means "to and including".

                  1.3. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in conformity with GAAP and all accounting
determinations required to be

                                      -33-
<PAGE>   40

made pursuant hereto shall, unless expressly otherwise provided herein, be made
in conformity with GAAP.

                  1.4. Certain Terms. The words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Agreement as a
whole, and not to any particular Article, Section, subsection or clause in this
Agreement. References herein to an Exhibit, Schedule, Article, Section,
subsection or clause refer to the appropriate Exhibit or Schedule to, or
Article, Section, subsection or clause in this Agreement.

                                   ARTICLE II

              AMOUNTS AND TERMS OF THE LOANS AND LETTERS OF CREDIT

                  2.1. The Revolving Credit Loans. On the terms and subject to
the conditions contained in this Agreement (including, on and after the initial
Additional Revolving Credit Commitment Date, Section 2.21), each Lender
severally agrees to make loans (each a "Revolving Credit Loan") to the Borrower
from time to time on any Business Day during the period from the Restatement
Effective Date until (but not including) the Termination Date in an aggregate
amount not to exceed at any time outstanding such Lender's Revolving Credit
Commitment; provided, however, that at no time shall any Lender be obligated to
make a Revolving Credit Loan in excess of such Lender's Ratable Portion of the
Available Credit. Within the limits of each Lender's Revolving Credit
Commitment, amounts prepaid pursuant to Section 2.6(b) may be reborrowed under
this Section 2.1. The Revolving Credit Loans of each Lender shall be evidenced
by the Revolving Credit Note to the order of such Lender.

                  2.2. Making the Revolving Credit Loans. (a) Each Borrowing
shall be made on notice, given by the Borrower to the Administrative Agent not
later than (i) 11:00 A.M. (New York City time) on the third (3rd) Business Day
prior to the date of the proposed Borrowing in the case of Eurodollar Rate
Loans, and (ii) 11:00 A.M. (New York City time) on the Business Day prior to the
date of the proposed Borrowing in the case of Base Rate Loans. Each such notice
(a "Notice of Borrowing") shall be in substantially the form of Exhibit B,
specifying therein (i) the date of such proposed Borrowing, (ii) the aggregate
amount of such proposed Borrowing, (iii) the amount thereof, if any, requested
to be Eurodollar Rate Loans, and (iv) the initial Interest Period for any such
Eurodollar Rate Loans. The Revolving Credit Loans shall be made as Base Rate
Loans unless (subject to Section 2.11) the Notice of Borrowing specifies that
all or a pro rata portion thereof shall be Eurodollar Rate Loans; provided,
however, that the aggregate of the Eurodollar Rate Loans for each Interest
Period must be in an amount of not less than $5,000,000 or an integral multiple
of $500,000 in excess thereof.

                  (b) The Administrative Agent shall give to each Lender prompt
notice of the Administrative Agent's receipt of a Notice of Borrowing and, if
Eurodollar Rate Loans are properly requested in such Notice of Borrowing, the
applicable interest rate under Section 2.8, and each Lender's Ratable Portion of
the proposed Borrowing. Each Lender shall, before 12:00 Noon (New York City
time) on the date of the proposed Borrowing, make available for the account of
its Applicable Lending Office to the Administrative Agent at its address
referred to in Section 10.2, in immediately available funds, such Lender's
Ratable Portion of such proposed

                                      -34-
<PAGE>   41

Borrowing. By 12:00 Noon (New York City time) in the case of Eurodollar Rate
Loans and Base Rate Loans, on the date specified by the Borrower in the Notice
of Borrowing, subject to fulfillment of the applicable conditions set forth in
Article III, the Administrative Agent will make such funds available to the
Borrower at the Administrative Agent's aforesaid address; provided that in the
event that the Administrative Agent shall have received notice from a Lender
prior to the date of any proposed Borrowing that such Lender will not make
available to the Administrative Agent such Lender's Ratable Portion of such
Borrowing, the Administrative Agent shall be under no obligation to fund such
Lender's Ratable Portion of such Borrowing amended, supplemented or otherwise
modified from time to time to the extent permitted by this Agreement.

                  (c) Each Base Rate Loan shall be in an aggregate amount of not
less than $1,000,000 or an integral multiple of $100,000 in excess thereof.

                  (d) Each Notice of Borrowing shall be irrevocable and binding
on the Borrower. In the case of any proposed Borrowing which the related Notice
of Borrowing specifies is to be comprised of Eurodollar Rate Loans, the Borrower
shall indemnify each Lender against any loss, cost or expense incurred by such
Lender as a result of any failure to fulfill on or before the date specified in
such Notice of Borrowing for such proposed Borrowing the applicable conditions
set forth in Article III, including, without limitation, any loss (including,
without limitation, loss of anticipated profits), cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
such Lender to fund any Eurodollar Rate Loan to be made by such Lender as part
of such proposed Borrowing when such Eurodollar Rate Loan, as a result of such
failure, is not made on such date.

                  (e) Unless the Administrative Agent shall have received notice
from a Lender prior to the date of any proposed Borrowing that such Lender will
not make available to the Administrative Agent such Lender's Ratable Portion of
such Borrowing, the Administrative Agent may assume that such Lender has made
such Ratable Portion available to the Administrative Agent on the date of such
Borrowing in accordance with this Section 2.2 and the Administrative Agent may,
in reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such Ratable Portion available to the Administrative Agent, such Lender and
the Borrower severally agree to repay to the Administrative Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to the Borrower until the date such
amount is repaid to the Administrative Agent, at (i) in the case of the
Borrower, the interest rate applicable at the time to the Revolving Credit Loans
comprising such Borrowing and (ii) in the case of such Lender, the Federal Funds
Rate. If such Lender shall repay to the Administrative Agent such corresponding
amount, such amount so repaid shall constitute such Lender's Revolving Credit
Loan as part of such Borrowing for purposes of this Agreement. If the Borrower
shall repay to the Administrative Agent such corresponding amount, such payment
shall not relieve such Lender of any obligation it may have to the Borrower
hereunder.

                  (f) The failure of any Lender to make the Revolving Credit
Loan to be made by it as part of any Borrowing shall not relieve any other
Lender of its obligation, if any, hereunder to make its Revolving Credit Loan on
the date of such Borrowing, but no Lender shall

                                      -35-
<PAGE>   42

be responsible for the failure of any other Lender to make the Revolving Credit
Loan to be made by such other Lender on the date of any Borrowing.

                  2.3. Fees. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Lender, a commitment fee (the
"Commitment Fee") equal to the Applicable Margin then in effect for the
Commitment Fee times the average daily unused portion of such Lender's Revolving
Credit Commitment, from the date hereof until the Termination Date. The
Commitment Fee shall be payable in arrears with respect to each full and partial
calendar quarter on (i) the last Business Day of each calendar quarter during
the term of such Lender's Revolving Credit Commitment, commencing September 30,
2000, (ii) the date of any reduction of the Revolving Credit Commitments
pursuant to Section 2.4 and (iii) the Termination Date. For purposes of this
Section 2.3, Swing Advances shall be included as part of the unused portion of
the Revolving Credit Commitments.

                  (b) The Borrower agrees to pay to the Administrative Agent for
distribution to each Lender (based on its respective Ratable Portion) a fee in
respect of each Letter of Credit issued hereunder (the "Letter of Credit Fee"),
for the period from and including the date of issuance of such Letter of Credit
to and including the termination of such Letter of Credit, computed at a rate
per annum equal to the Applicable Margin then in effect for Revolving Credit
Loans maintained as Eurodollar Rate Loans on the daily average Stated Amount of
such Letter of Credit. Accrued Letter of Credit Fees shall be payable in arrears
with respect to each calendar quarter on (i) the last Business Day of each
calendar quarter in which any Letter of Credit is outstanding, (ii) the date on
which no Letters of Credit remain outstanding and (iii) the Termination Date.

                  (c) The Borrower agrees to pay to the Issuing Lender, for its
own account, a facing fee in respect of each Letter of Credit issued by it
hereunder (the "Facing Fee") for the period from and including the date of
issuance of such Letter of Credit to and including the termination of such
Letter of Credit, computed at a rate per annum equal to 0.125 % of the daily
average Stated Amount of such Letter of Credit. Accrued Facing Fees shall be
payable in arrears with respect to each calendar quarter on (i) the last
Business Day of each calendar quarter in which such Letter of Credit is
outstanding, (ii) the date upon which such Letter of Credit has been terminated
in accordance with its terms and (iii) the Termination Date.

                  (d) The Borrower shall pay, upon each Drawing under, issuance
of, or amendment to, any Letter of Credit, such amount as shall at the time of
such event be the administrative charge which the Issuing Lender is generally
imposing in connection with such occurrence with respect to letters of credit.

                  (e) The Borrower has agreed to pay to Chase additional fees,
the amount and dates of payment of which are embodied in a separate agreement
between the Borrower and Chase.

                  2.4. Reduction and Termination of the Commitments. The
Borrower may, upon at least three Business Days' prior notice to the
Administrative Agent, terminate in whole or reduce ratably in part the unused
portions of the respective Revolving Credit Commitments of

                                      -36-
<PAGE>   43

the Lenders; provided, however, that each partial reduction shall be in the
aggregate amount of not less than $5,000,000 or an integral multiple of
$1,000,000 in excess thereof.

                  2.5. Repayment. The Borrower shall repay the entire unpaid
principal amount of the Revolving Credit Loans on the Termination Date.

                  2.6. Prepayments. (a) The Borrower shall have no right to
prepay the principal amount of any Revolving Credit Loan other than as provided
in this Section 2.6.

                  (b) The Borrower may, upon at least two (2) Business Days'
prior notice to the Administrative Agent, stating the proposed date and
aggregate principal amount of the prepayment, prepay the outstanding principal
amount of the Revolving Credit Loans in whole or ratably in part, together with
accrued interest to the date of such prepayment on the principal amount prepaid;
provided, however, that any prepayment of any Eurodollar Rate Loan made other
than on the last day of an Interest Period for such Revolving Credit Loan shall
be subject to payment by the Borrower to the Administrative Agent of any costs,
fees or expenses incurred by any Lender in connection with such prepayment
including, without limitation, any costs to unwind any Eurodollar Rate
contracts; and, provided further, that each partial prepayment shall be in an
aggregate principal amount not less than $3,000,000 or integral multiples of
$100,000 in excess thereof. Upon the giving of such notice of prepayment, the
principal amount of the Revolving Credit Loans specified to be prepaid shall
become due and payable on the date specified for such prepayment.

                  (c) If at any time the Borrower shall not be in compliance
with the covenant contained in Section 5.1 hereof, (a "Financial Covenant
Imbalance"), the Borrower shall prepay the Revolving Credit Loans then
outstanding in an amount necessary to cure such Financial Covenant Imbalance,
together with accrued interest as follows:

                 (i) in the event that the Financial Covenant Imbalance is due
         to (A) any sale, conveyance, transfer, assignment or other disposition
         of an Unencumbered Hotel Property, (B) a financing secured by a Hotel
         or (C) a Drawing, the prepayment shall be made within one (1) Business
         Day of such event occurring;

                (ii) in the event that the Financial Covenant Imbalance is due
         to any (A) condemnation or taking by eminent domain of an Unencumbered
         Hotel Property, or (B) loss, damage or destruction by casualty to any
         Hotel, the prepayment shall be made within one (1) Business Day after
         receipt by the Borrower or its Subsidiary or Eligible Joint Venture of
         the condemnation award or insurance proceeds relating to such event;

                (iii) INTENTIONALLY DELETED; or

                (iv) in the event that the Financial Covenant Imbalance is due
         to a determination by the Administrative Agent, after review of the
         applicable Hotel Documents, that an Unencumbered Hotel Property,
         represented by Borrower in a Compliance Certificate to be an
         Unencumbered Hotel Property, fails to meet (and never actually met) the
         requirements for Unencumbered Hotel Properties set forth herein, the
         prepayment shall be

                                      -37-
<PAGE>   44

         made within 5 Business Days of the Administrative Agent notifying
         Borrower of such Hotel's failure to meet the Unencumbered Hotel
         Property requirements.

                  (d) If at any time the aggregate principal amount of Revolving
Credit Loans outstanding at such time exceeds the Revolving Credit Commitments
at such time, the Borrower shall forthwith prepay the Revolving Credit Loans
then outstanding in an amount equal to such excess, together with accrued
interest.

                  2.7. Conversion/Continuation Option. (a) Swing Advances shall
be automatically converted to Base Rate Loans on the Business Day following the
date of borrowing thereof.

                  (b) The Borrower may elect (i) at any time to convert Base
Rate Loans or any portion thereof to Eurodollar Rate Loans, (ii) at any time to
convert Swing Advances or any portion thereof to Base Rate Loans or Eurodollar
Rate Loans, or (iii) at the end of any Interest Period with respect thereto, to
convert Eurodollar Rate Loans or any portion thereof into Base Rate Loans, or to
continue such Eurodollar Rate Loans or any portion thereof for an additional
Interest Period; provided, however, that the aggregate of the Eurodollar Rate
Loans for each Interest Period therefor must be in the amount of $5,000,000 or
an integral multiple of $500,000 in excess thereof. Each conversion or
continuation shall be allocated among the Revolving Credit Loans of all Lenders
in accordance with their Ratable Portion. Each such election shall be in
substantially the form of Exhibit C hereto (a "Notice of Conversion or
Continuation") and shall be made by giving the Administrative Agent at least
three (3) Business Days' prior written notice thereof specifying (A) the amount
and type of conversion or continuation, (B) in the case of a conversion to or a
continuation of Eurodollar Rate Loans, the Interest Period therefor, and (C) in
the case of a conversion, the date of conversion (which date shall be a Business
Day and, if a conversion from Eurodollar Rate Loans, shall also be the last day
of the Interest Period therefor). The Administrative Agent shall promptly notify
each Lender of its receipt of a Notice of Conversion or Continuation and of the
contents thereof and such Lender's Ratable Portion of the Revolving Credit Loans
to be converted. Notwithstanding the foregoing, no conversion in whole or in
part of Base Rate Loans or Swing Advances to Eurodollar Rate Loans, and no
continuation in whole or in part of Eurodollar Rate Loans upon the expiration of
any Interest Period therefor, shall be permitted at any time at which a Default
or an Event of Default shall have occurred and be continuing. If, within the
time period required under the terms of this Section 2.7, the Administrative
Agent does not receive a Notice of Conversion or Continuation from the Borrower
containing a permitted election to continue any Eurodollar Rate Loans for an
additional Interest Period or to convert any such Revolving Credit Loans, then,
upon the expiration of the Interest Period therefor, such Revolving Credit Loans
will be automatically converted to Base Rate Loans. Each Notice of Conversion or
Continuation shall be irrevocable.

                  2.8. Interest. (a) The Borrower shall pay interest on the
unpaid principal amount of each Revolving Credit Loan from the date thereof
until the principal amount thereof shall be paid in full, at the following rates
per annum:

                 (i) For Base Rate Loans and Swing Advances, at a rate per annum
         equal at all times to the Base Rate in effect from time to time plus
         the Applicable Margin, payable

                                      -38-
<PAGE>   45

         monthly on the first day of each month, on the Termination Date and on
         the date any Base Rate Loan is converted or paid in full.

                (ii) For Eurodollar Rate Loans, at a rate per annum equal at all
         times during the applicable Interest Period for each Eurodollar Rate
         Loan to the sum of the Eurodollar Rate for such Interest Period plus
         the Applicable Margin in effect on the most recent Applicable Margin
         Reset Date, payable on the last day of such Interest Period, on the
         Termination Date and, if such Interest Period has a duration of more
         than three months, on the last day of each calendar quarter during such
         Interest Period commencing on September 30, 2000.

                  (b) If the principal indebtedness of the Revolving Credit
Loans is declared immediately due and payable by the Administrative Agent
pursuant to the provisions of this Agreement or any other Loan Document, or if
the Revolving Credit Loans are not paid in full on the Termination Date, the
Borrower shall thereafter, unless and until such date, if any, as the Super
Majority Lenders may elect, in their sole and absolute discretion, to waive, in
writing, all or any portion of such default rate interest, pay interest on the
principal sum then remaining unpaid from the date of such declaration or the
Termination Date, as the case may be, until the date on which the principal sum
then outstanding is paid in full (whether before or after judgment), at a rate
per annum (calculated for the actual number of days elapsed on the basis of a
360-day year) equal to the greater, on a daily basis, of (x) 13% or (y) 4% plus
the Base Rate, provided, however, that such interest rate shall in no event
exceed the maximum interest rate which the Borrower may by law pay.

                  2.9. Interest Rate Determination and Protection. (a) The
Eurodollar Rate for each Interest Period for Eurodollar Rate Loans shall be
determined by the Administrative Agent two (2) Business Days before the first
day of such Interest Period.

                  (b) The Administrative Agent shall give prompt notice to the
Borrower and the Lenders of the applicable interest rate determined by the
Administrative Agent for purposes of Section 2.8(a) or (b).

                  (c) If, with respect to Eurodollar Rate Loans, the Majority
Lenders in good faith notify the Administrative Agent that the Eurodollar Rate
for any Interest Period therefor will not adequately reflect the cost to such
Majority Lenders of making such Revolving Credit Loans or funding or maintaining
their respective Eurodollar Rate Loans for such Interest Period, the
Administrative Agent shall forthwith so notify the Borrower and the Lenders,
whereupon

                 (i) each Eurodollar Rate Loan will automatically, on the last
         day of the then existing Interest Period therefor, convert into a Base
         Rate Loan; and

                (ii) the obligations of the Lenders to make Eurodollar Rate
         Loans or to convert Base Rate Loans into Eurodollar Rate Loans shall be
         suspended until the Administrative Agent shall notify the Borrower that
         such Lenders have determined that the circumstances causing such
         suspension no longer exist.

                                      -39-
<PAGE>   46

                  2.10. Increased Costs. If, due to either (i) the introduction
of or any change in or in the interpretation of any law or regulation (other
than any change by way of imposition or increase of reserve requirements
included in determining the Eurodollar Rate Reserve Percentage) or (ii)
compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), there shall be
any increase in the cost to any Lender of agreeing to make or making, funding or
maintaining any Eurodollar Rate Loans, then the Borrower shall from time to
time, upon demand by such Lender (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender additional amounts sufficient to compensate such Lender for such
increased cost. A certificate as to the amount of such increased cost, submitted
to the Borrower and the Administrative Agent by such Lender, shall be conclusive
and binding for all purposes, absent manifest error. If the Borrower so notifies
the Administrative Agent within five Business Days after any Lender notifies the
Borrower of any increased cost pursuant to the foregoing provisions of this
Section 2.10, the Borrower may either (A) prepay in full all Eurodollar Rate
Loans of such Lender then outstanding in accordance with Section 2.6(b) and,
additionally, reimburse such Lender for such increased cost in accordance with
this Section 2.10 or (B) convert all Eurodollar Rate Loans of all Lenders then
outstanding into Base Rate Loans in accordance with Section 2.7 and,
additionally, reimburse such Lender for such increased cost in accordance with
this Section 2.10.

                  2.11. Illegality. Notwithstanding any other provision of this
Agreement, if the introduction of or any change in or in the interpretation of
any law or regulation shall make it unlawful, or any central bank or other
Governmental Authority shall assert that it is unlawful, for any Lender or its
Eurodollar Lending Office to make Eurodollar Rate Loans or to continue to fund
or maintain Eurodollar Rate Loans, then, on notice thereof and demand therefor
by such Lender to the Borrower through the Administrative Agent, (i) the
obligation of such Lender to make or to continue Eurodollar Rate Loans and to
convert Base Rate Loans into Eurodollar Rate Loans shall terminate and (ii) the
Borrower shall forthwith prepay in full all Eurodollar Rate Loans of such Lender
then outstanding, together with interest accrued thereon, unless the Borrower,
within five Business Days of such notice and demand, converts all Eurodollar
Rate Loans of all Lenders then outstanding into Base Rate Loans.

                  2.12. Capital Adequacy. If (i) the introduction of or any
change in or in the interpretation of any law or regulation, (ii) compliance
with any law or regulation, or (iii) compliance with any guideline or request
from any central bank or other Governmental Authority (whether or not having the
force of law) affects or would affect the amount of capital required or expected
to be maintained by any Lender or any corporation controlling any Lender and
such Lender reasonably determines that such amount is based upon the existence
of such Lender's Revolving Credit Commitments, Letters of Credit or Revolving
Credit Loans and its other commitments, letters of credit or loans of this type,
then, upon demand by such Lender (with a copy of such demand to the
Administrative Agent), the Borrower shall pay to the Administrative Agent for
the account of such Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender in the light of such
circumstances, to the extent that such Lender reasonably determines such
increase in capital to be allocable to the existence of such Lender's Revolving
Credit Commitments, Revolving Credit Loans, Letter of Credit Outstandings or
commitments to issue Letters of Credit. A certificate as to such amounts

                                      -40-
<PAGE>   47

submitted to the Borrower and the Administrative Agent by such Lender shall be
conclusive and binding for all purposes absent manifest error.

                  2.13. Payments and Computations. (a) The Borrower shall make
each payment hereunder and under the Revolving Credit Notes not later than 11:00
A.M. (New York City time) on the day when due, in Dollars, to the Administrative
Agent at its address referred to in Section 10.2 in immediately available funds
without set-off or counterclaim. The Administrative Agent will promptly
thereafter cause to be distributed immediately available funds relating to the
payment of principal or interest or fees (other than amounts payable pursuant to
Section 2.10, 2.11, 2.12, 2.14 or 2.16) to the Lenders, in accordance with their
respective Ratable Portions, for the account of their respective Applicable
Lending Offices, and like funds relating to the payment of any other amount
payable to any Lender to such Lender for the account of its Applicable Lending
Office, in each case to be applied in accordance with the terms of this
Agreement. To the extent the foregoing payments are received by the
Administrative Agent prior to 11:00 A.M. (New York City time) and are not
distributed to the Lenders on the same day, the Administrative Agent shall pay
to each Lender in addition to the amount distributed to such Lender, interest
thereon, for each day from the date such amount is received by the
Administrative Agent until the date such amount is distributed to such Lender,
at the Federal Funds Rate. Payment received by the Administrative Agent after
11:00 A.M. (New York City time) shall be deemed to be received on the next
Business Day.

                  (b) The Borrower hereby authorizes each Lender, if and to the
extent payment owed to such Lender is not made when due hereunder or under any
Revolving Credit Loan held by such Lender, to charge from time to time against
any or all of the Borrower's accounts with such Lender any amount so due.

                  (c) All computations of interest based on the Base Rate, the
Eurodollar Rate or the Federal Funds Rate and of fees shall be made by the
Administrative Agent on the basis of a year of 360 days, in each case for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest and fees are payable. Each
determination by the Administrative Agent of an interest rate hereunder shall be
conclusive and binding for all purposes, absent manifest error.

                  (d) Whenever any payment hereunder or under the Revolving
Credit Notes shall be stated to be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of payment of interest or
fee, as the case may be; provided, however, that if such extension would cause
payment of interest on or principal of any Eurodollar Rate Loan to be made in
the next calendar month, such payment shall be made on the next preceding
Business Day.

                  (e) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due hereunder to the
Lenders that the Borrower will not make such payment in full, the Administrative
Agent may assume that the Borrower has made such payment in full to the
Administrative Agent on such date and the Administrative Agent may, in reliance
upon such assumption, cause to be distributed to each Lender on such due

                                      -41-
<PAGE>   48

date an amount equal to the amount then due such Lender. If and to the extent
the Borrower shall not have so made such payment in full to the Administrative
Agent, each Lender shall repay to the Administrative Agent forthwith on demand
such amount distributed to such Lender together with interest thereon, for each
day from the date such amount is distributed to such Lender until the date such
Lender repays such amount to the Administrative Agent, at the Federal Funds
Rate.

                  (f) If any Lender (a "Non-Funding Lender") has (x) failed to
make a Revolving Credit Loan required to be made by it hereunder, and the
Administrative Agent has determined that such Lender is not likely to make such
Revolving Credit Loan, (y) given notice to the Borrower or the Administrative
Agent that it will not make, or that it has disaffirmed or repudiated any
obligation to make, Revolving Credit Loans, in each case by reason of the
provisions of the Financial Institutions Reform, Recovery and Enforcement Act of
1989 or otherwise or (z) failed to comply with its obligations pursuant to
Section 2.19(c), (i) such Non-Funding Lender shall lose any and all voting
rights hereunder, and (ii) any payment made on account of the principal of the
Revolving Credit Loans outstanding or Unpaid Drawings shall be made as follows:

                  (A) in the case of any such payment made on any date when and
         to the extent that, in the determination of the Administrative Agent,
         the Borrower would be able, under the terms and conditions hereof, to
         reborrow the amount of such payment under the Revolving Loan
         Commitments and to satisfy any applicable conditions precedent set
         forth in Article III to such reborrowing, such payment shall be made on
         account of the outstanding Revolving Credit Loans or Unpaid Drawings
         held by the Lenders other than the Non-Funding Lender pro rata
         according to the respective outstanding principal amounts of the
         Revolving Credit Loans or Unpaid Drawings of such Lenders;

                  (B) otherwise, such payment shall be made on account of the
         outstanding Revolving Credit Loans or Unpaid Drawings held by the
         Lenders pro rata according to the respective outstanding principal
         amounts of such Revolving Credit Loans or Unpaid Drawings; and

                  (C) any payment made on account of interest on the Revolving
         Credit Loans or Unpaid Drawings shall be made pro rata according to the
         respective amounts of accrued and unpaid interest due and payable on
         the Revolving Credit Loans or Unpaid Drawings with respect to which
         such payment is being made.

                  2.14. Taxes. (a) Any and all payments by the Borrower under
each Loan Document shall be made free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Lender and the Administrative Agent, taxes measured by its net income,
and franchise taxes imposed on it, by the jurisdiction under the laws of which
such Lender or the Administrative Agent (as the case may be) is organized or any
political subdivision thereof and, in the case of each Lender, taxes measured by
its net income, and franchise taxes imposed on it, by the jurisdiction of such
Lender's Applicable Lending Office or any political subdivision thereof (all
such non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities (excluding, in the case of such Lender or the Administrative Agent,
taxes

                                      -42-
<PAGE>   49

imposed by reason of any failure of such Lender or the Administrative Agent, if
such Lender or the Administrative Agent is entitled at such time to a total or
partial exemption from withholding that is required to be evidenced by a United
States Internal Revenue Service Form W-8BEN (with respect to an income tax
treaty) or W-8ECI or any successor or additional form (including but not limited
to Form W-8BEN (with respect to the portfolio interest exemption), to deliver to
the Administrative Agent or the Borrower, from time to time as required pursuant
to Section 2.14(f), such Form W-8BEN (with respect to an income tax treaty) or
W-8ECI (as applicable) or any successor or additional form (including but not
limited to Form W-8BEN (with respect to the portfolio interest exemption),
pursuant to Section 2.14(f) being hereinafter referred to as "Taxes"). If the
Borrower shall be required by law to deduct any Taxes from or in respect of any
sum payable hereunder to any Lender or the Administrative Agent (i) the sum
payable shall be increased as may be necessary so that after making all required
deductions (including, without limitation, deductions applicable to additional
sums payable under this Section 2.14) such Lender or the Administrative Agent
(as the case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower shall make such deductions,
(iii) the Borrower shall pay the full amount deducted to the relevant taxing
authority or other authority in accordance with applicable law, and (iv) the
Borrower shall deliver to the Administrative Agent evidence of such payment to
the relevant taxation or other authority.

                  (b) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies of the United States or any political subdivision thereof or
any applicable foreign jurisdiction which arise from any payment made under any
Loan Document or from the execution, delivery or registration of, or otherwise
with respect to, any Loan Document (collectively, "Other Taxes").

                  (c) The Borrower will indemnify each Lender and the
Administrative Agent for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section 2.14) paid by such Lender or the
Administrative Agent (as the case may be) and any liability (including, without
limitation, for penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. This indemnification shall be made within 30 days from the
date such Lender or the Administrative Agent (as the case may be) makes written
demand therefor.

                  (d) Within 30 days after the date of any payment of Taxes or
Other Taxes, the Borrower will furnish to the Administrative Agent, at its
address referred to in Section 10.2, the original or a certified copy of a
receipt evidencing payment thereof.

                  (e) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 2.14 shall survive the payment in full of the
Obligations.

                  (f) Prior to the Restatement Effective Date in the case of
each Lender that is a signatory hereto, and on the date of the Assignment and
Acceptance pursuant to which it becomes a Lender in the case of each other
Lender and from time to time thereafter, when a lapse in time or change in
circumstances renders the previous certification obsolete or inaccurate in any

                                      -43-
<PAGE>   50

material respect, each Lender organized under the laws of a jurisdiction outside
the United States that is entitled to an exemption from United States
withholding tax, or that is subject to such tax at a reduced rate under an
applicable tax treaty, shall provide the Administrative Agent and the Borrower
with two accurate and complete original signed copies of IRS Form W-8ECI or Form
W-8BEN (with respect to an income tax treaty) or other applicable form
(including but not limited to Form W-8BEN (with respect to the portfolio
exemption), certificate or document prescribed by the IRS certifying as to such
Lender's entitlement to such exemption or reduced rate with respect to all
payments to be made to such Lender hereunder and under the Revolving Credit
Notes. Unless the Borrower and the Administrative Agent have received forms or
other documents pursuant to this Section 2.14(f) indicating that payments
hereunder or under any Revolving Credit Note are not subject to United States
withholding tax or are subject to such tax at a rate reduced by an applicable
tax treaty, the Borrower or the Administrative Agent shall withhold taxes from
such payments at the applicable statutory rate in the case of payments to or for
any Lender organized under the laws of a jurisdiction outside the United States.

                  (g) Any Lender claiming any additional amounts payable
pursuant to this Section 2.14 shall use its best efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Applicable Lending Office if the making of such a change
would avoid the need for, or reduce the amount of, any such additional amounts
which may thereafter accrue and would not, in the reasonable judgment of such
Lender, be otherwise disadvantageous to such Lender.

                  2.15. Sharing of Payments, Etc. If any Lender (other than the
Swing Advance Bank or the Issuing Lender) shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of set off or
otherwise) on account of Revolving Credit Loans made by it (other than pursuant
to Section 2.12 or 2.14), and there is either (x) any Swing Advance outstanding
in respect of which the Swing Advance Bank has not received payment in full from
the Lenders pursuant to Section 2.16(d) or (e) or (y) any Unpaid Drawing in
respect of which the Issuing Lender has not received payment in full from the
Lenders pursuant to Section 2.19 or 2.20, such Lender (a "Purchasing Lender")
shall purchase a participation in all such Swing Advances or Unpaid Drawings, as
applicable, in an amount equal to the lesser of such payment and the amount of
such Swing Advances or Unpaid Drawings, as applicable, for which the Swing
Advance Bank or Issuing Lender has not so received payment in full. If, after
giving effect to the foregoing, any Lender shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of set-off, or
otherwise) on account of the Revolving Credit Loans made by it (other than
pursuant to Sections 2.12 or 2.14) in excess of its Ratable Portion of payments
on account of the Revolving Credit Loans obtained by all the Lenders, such
Purchasing Lender shall forthwith purchase from the other Lenders such
participations in their Revolving Credit Loans as shall be necessary to cause
such purchasing Lender to share the excess payment ratably with each of them.

                  2.16. Swing Advances. (a) The Swing Advance Bank, on the terms
and subject to the conditions contained in this Agreement, shall make advances
(each a "Swing Advance") to the Borrower from time to time on any Business Day
during the period from the date hereof until the day preceding the Termination
Date in an aggregate amount not to exceed at any time outstanding the lesser of
(i) $15,000,000, and (ii) the Available Credit; provided that the Swing

                                      -44-
<PAGE>   51

Advance Bank shall not be requested to make a Swing Advance to refinance an
outstanding Swing Advance. Within the limits set forth above, Swing Advances
repaid may be reborrowed under this Section 2.16.

                  (b) Each Swing Advance shall be made upon a Notice of
Borrowing for a Swing Advance being given by the Borrower to the Swing Advance
Bank by no later than 11:00 A.M. (New York City time) on the Business Day of the
proposed Swing Advance. Upon fulfillment of the applicable conditions set forth
in Article III, the Swing Advance Bank will make each Swing Advance available to
the Borrower at the Administrative Agent's address no later than 2:00 P.M. (New
York City time) on the date notice is received as aforesaid. All Swing Advances
shall bear interest at the same rate, and be payable on the same basis, as Base
Rate Loans and shall be converted to Base Rate Loans pursuant to Section 2.7(a).

                  (c) Each Swing Advance shall be in an aggregate amount of not
less than $1,000,000 or an integral multiple of $100,000 in excess thereof.

                  (d) The Administrative Agent shall give to each Lender prompt
notice of the Administrative Agent's receipt of a Notice of Borrowing for a
Swing Advance and each Lender's Ratable Portion thereof. Each Lender shall
before 12:00 Noon (New York City time) on the next Business Day (the "Settlement
Date") make available to the Administrative Agent, in immediately available
funds, the amount of its Ratable Portion of the principal amount of such Swing
Advance. Upon such payment by a Lender, such Lender shall be deemed to have made
a Revolving Credit Loan to the Borrower in the amount of such payment. The
Administrative Agent shall use such funds to repay the Swing Advance to the
Swing Advance Bank. To the extent that any Lender fails to make such payment to
the Swing Advance Bank, the Borrower shall repay such Swing Advance, on demand
and, in any event, on the Termination Date.

                  (e) During the continuance of a Default under Section 8.1(e),
each Lender shall acquire, without recourse or warranty, an undivided
participation in each Swing Advance otherwise required to be repaid by such
Lender pursuant to the preceding paragraph, which participation shall be in a
principal amount equal to such Lender's Ratable Portion of such Swing Advance,
by paying to the Swing Advance Bank on the date on which such Lender would
otherwise have been required to make a payment in respect of such Swing Advance
pursuant to the preceding paragraph, in immediately available funds, an amount
equal to such Lender's Ratable Portion of such Swing Advance. If such amount is
not in fact made available to the Swing Advance Bank on the date when the Swing
Advance would otherwise be required to be made pursuant to the preceding
paragraph, the Swing Advance Bank shall be entitled to recover such amount on
demand from that Lender together with interest accrued from such date at the
Federal Funds Rate. From and after the date on which any Lender purchases an
undivided participation interest in a Swing Advance pursuant to this paragraph
(e), the Swing Advance Bank shall promptly distribute to such Lender such
Lender's Ratable Portion of all payments of principal and of interest on such
Swing Advance, other than those received from a Lender pursuant to this Section
2.16. If any payment made by or on behalf of the Borrower and received by the
Swing Advance Bank with respect to any Swing Advance is rescinded or must
otherwise be returned by the Swing Advance Bank for any reason and the Swing
Advance Bank has made a payment to the Administrative Agent, on account thereof,
each Lender shall, upon notice to the

                                      -45-
<PAGE>   52

Swing Advance Bank, forthwith pay over to the Swing Advance Bank an amount equal
to such Lender's pro rata share of the payment so rescinded or returned based on
the respective amounts paid in respect thereof to the Lenders pursuant to the
preceding paragraph (d).

                  2.17. Letters of Credit. (a) Subject to and upon the terms and
conditions herein set forth, the Borrower may request that the Issuing Lender
issue, at any time and from time to time on and after the Restatement Effective
Date and prior to the Termination Date, for the account of the Borrower and for
the benefit of any holder (or any trustee, agent or other similar representative
for any such holders) of L/C Supportable Obligations of the Borrower, an
irrevocable standby letter of credit, in a form customarily used by the Issuing
Lender or in such other form as has been approved by the Issuing Lender in its
discretion (each such standby letter of credit, a "Letter of Credit") in support
of such L/C Supportable Obligations. Schedule 2.17 contains a description of all
letters of credit issued by the Issuing Lender pursuant to the Existing Credit
Facility and which remain outstanding on the Restatement Effective Date. Each
such letter of credit, including any extension thereof (each an "Existing Letter
of Credit") shall constitute a "Letter of Credit" for all purposes of this
Agreement and shall be deemed issued for the account of the Borrower for
purposes of Sections 2.3(b), 2.3(c) and 2.19(a) on the Restatement Effective
Date.

                  (b) Subject to the terms and conditions contained herein, the
Issuing Lender hereby agrees that it will, at any time and from time to time on
or after the Restatement Effective Date and prior to the Termination Date,
following its receipt of the respective Letter of Credit Request, issue for the
account of the Borrower one or more Letters of Credit in support of such L/C
Supportable Obligations of the Borrower as are permitted to remain outstanding
without giving rise to a Default or Event of Default hereunder, provided that
the Issuing Lender shall be under no obligation to issue any Letter of Credit if
at the time of such issuance:

                 (i) any order, judgment or decree of any governmental authority
         or arbitrator shall purport by its terms to enjoin or restrain the
         Issuing Lender from issuing such Letter of Credit or any requirement of
         law applicable to the Issuing Lender or any request or directive
         (whether or not having the force of law) from any governmental
         authority with jurisdiction over the Issuing Lender shall prohibit, or
         request that the Issuing Lender refrain from, the issuance of letters
         of credit generally or such Letter of Credit in particular or shall
         impose upon the Issuing Lender with respect to such Letter of Credit
         any restriction or reserve or capital requirement (for which the
         Issuing Lender is not otherwise compensated) not in effect on the date
         hereof, or any unreimbursed loss, cost or expense which was not
         applicable, or known to the Issuing Lender as of the date hereof and
         which the Issuing Lender in good faith deems material to it; or

                (ii) the Issuing Lender shall have received notice from any
         Lender prior to the issuance of such Letter of Credit of the type
         described in the second sentence of Section 2.18(b).

                  (c) Notwithstanding the foregoing, (i) no Letter of Credit
shall be issued the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and
prior to the issuance of, the respective Letter of

                                      -46-
<PAGE>   53

Credit), would exceed $75,000,000, (ii) no Letter of Credit shall be issued the
Stated Amount of which, when added to the Letter of Credit Outstandings
(exclusive of Unpaid Drawings which are repaid on the date of, and prior to the
issuance of, the respective Letter of Credit) and the aggregate principal amount
of all Revolving Credit Loans then outstanding, would exceed the Revolving
Credit Commitments at such time, (iii) each Letter of Credit shall be
denominated in Dollars, (iv) each Letter of Credit shall by its terms terminate
on or before the earlier of (A) the date which occurs 12 months after the date
of the issuance thereof (although any such Letter of Credit may be automatically
extendable for successive periods of up to 12 months, but not beyond the tenth
Business Day prior to the Termination Date, on terms acceptable to the Issuing
Lender) and (B) the tenth Business Day prior to the Termination Date, (v) the
Stated Amount of each Letter of Credit upon issuance shall be not less than
$100,000 or such lesser amount as is acceptable to the Issuing Lender.

                  2.18. Letter of Credit Requests. (a) Whenever the Borrower
desires that a Letter of Credit be issued for its account, the Borrower shall
give the Administrative Agent and the Issuing Lender at least five Business
Days' (or such shorter period as is acceptable to the Issuing Lender) written
notice thereof. Each notice shall be in the form of Exhibit F (each a "Letter of
Credit Request").

                  (b) The making of each Letter of Credit Request shall be
deemed to be a representation and warranty by the Borrower that such Letter of
Credit may be issued in accordance with, and will not violate the requirements
of, Section 2.17(c). Unless the Issuing Lender has received notice from any
Lender before it issues a Letter of Credit that one or more of the conditions
specified in Article III, are not then satisfied, or that the issuance of such
Letter of Credit would violate Section 2.17(c), then the Issuing Lender may
issue the requested Letter of Credit for the account of the Borrower in
accordance with the Issuing Lender's usual and customary practices. Upon the
issuance of any Letter of Credit, the Issuing Lender shall promptly notify each
Lender of such issuance and such notice shall be accompanied by a copy of the
issued Letter of Credit.

                  2.19. Letter of Credit Participations. (a) Immediately upon
the issuance by the Issuing Lender of any Letter of Credit, the Issuing Lender
shall be deemed to have sold and transferred to each Lender, other than the
Issuing Lender (each such Lender, in its capacity under Section 2.19, a
"Participant"), and each such Participant shall be deemed irrevocably and
unconditionally to have purchased and received from the Issuing Lender, without
recourse or warranty, an undivided interest and participation, to the extent of
such Participant's Ratable Portion, in such Letter of Credit, each drawing made
thereunder and the obligations of the Borrower under this Agreement with respect
thereto (excluding the Facing Fee), and any security therefor or guaranty
pertaining thereto. Upon any change in the Revolving Credit Commitments of the
Lenders, it is hereby agreed that, with respect to any outstanding Letters of
Credit and Unpaid Drawings, there shall be an automatic adjustment to the
participations pursuant to this Section 2.19 to reflect the new Ratable Portions
of the Lenders.

                  (b) In determining whether to pay under any Letter of Credit,
the Issuing Lender shall have no obligation relative to the other Lenders other
than to confirm that any documents required to be delivered under such Letter of
Credit appear to have been delivered and that

                                      -47-
<PAGE>   54

they appear to comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by the Issuing Lender under or
in connection with any Letter of Credit if taken or omitted in the absence of
gross negligence or willful misconduct, shall not create for the Issuing Lender
any resulting liability to the Borrower or any Lender.

                  (c) In the event that the Issuing Lender makes any payment
under any Letter of Credit and the Borrower shall not have reimbursed such
amount in full to the Issuing Lender pursuant to Section 2.20(a), the Issuing
Lender shall promptly notify the Administrative Agent, which shall promptly
notify each Participant, of such failure, and each Participant shall promptly
and unconditionally pay to the Issuing Lender the amount of such Participant's
Ratable Portion of such unreimbursed payment in Dollars and same day funds. If
the Administrative Agent so notifies any Participant prior to 11: 00 A.M. (New
York time) on any Business Day, such Participant shall make available such funds
to the Issuing Lender on such Business Day. If and to the extent such
Participant shall not have so made its Ratable Portion of the amount of such
payment available to the Issuing Lender, such Participant agrees to pay to the
Issuing Lender, forthwith on demand such amount, together with interest thereon,
for each day from such date until the date such amount is paid to the Issuing
Lender at the overnight Federal Funds Rate. The failure of any Participant to
make available to the Issuing Lender its Ratable Portion of any payment under
any Letter of Credit shall not relieve any other Participant of its obligation
hereunder to make available to the Issuing Lender its Ratable Portion of any
payment under such Letter of Credit on the date required, as specified above,
but no Participant shall be responsible for the failure of any other Participant
to make available to the Issuing Lender such other Participant's Ratable Portion
of any such payment.

                  (d) Whenever the Issuing Lender receives a payment of a
reimbursement obligation as to which it has received any payments from the
Participants pursuant to clause (c) above, the Issuing Lender shall forward such
payment to the Administrative Agent, which in turn shall distribute such funds
to each Participant in accordance with the terms of Section 2.13.

                  (e) Upon the request of any Participant, the Issuing Lender
shall furnish to such Participant copies of any Letter of Credit issued by it
and such other documentation as may reasonably be requested by such Participant.

                  (f) The obligations of the Participants to make payments to
the Issuing Lender with respect to Letters of Credit issued by it shall be
irrevocable and not subject to any qualification or exception whatsoever and
shall be made in accordance with the terms and conditions of this Agreement
under all circumstances, including, without limitation, any of the following
circumstances:

                (i) any lack of validity or enforceability of this Agreement
         or any of the other Loan Documents;

                (ii) the existence of any claim, setoff, defense or other right
         which the Borrower or any of its Subsidiaries may have at any time
         against a beneficiary named in a Letter of Credit, any transferee of
         any Letter of Credit (or any Person for whom any such transferee may be
         acting), the Administrative Agent, the Issuing Lender, any Participant,
         or any

                                      -48-
<PAGE>   55

         other Person, whether in connection with this Agreement, any Letter of
         Credit, the transactions contemplated herein or any unrelated
         transactions (including any underlying transaction between the Borrower
         and the beneficiary named in any such Letter of Credit);

                (iii) any draft, certificate or any 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) the surrender or impairment of any security for the
         performance or observance of any of the terms of any of the Loan
         Documents; or

                (v) the occurrence of any Default or Event of Default.

                  2.20. Agreement to Repay Letter of Credit Drawings. (a) The
Borrower hereby agrees to reimburse the Issuing Lender, by making payment to the
Administrative Agent in accordance with the terms of the first sentence of
Section 2.13, for any drawing (each, a "Drawing") made by it under any Letter of
Credit (each such Drawing until reimbursed, an "Unpaid Drawing"), no later than
three (3) Business Days after the date of such Drawing, with interest on the
amount of such Drawing, to the extent not reimbursed prior to 11: 00 A.M. (New
York time) on the date of such Drawing, from and including the date of such
Drawing to but excluding the date the Issuing Lender was reimbursed by the
Borrower therefor at a rate per annum which shall be the Base Rate in effect
from time to time plus the Applicable Margin for Revolving Credit Loans
maintained as Base Rate Loans, provided, however, to the extent such amounts are
not reimbursed prior to 11:00 A.M. (New York time) on the third Business Day
following such Drawing, interest shall thereafter accrue on the amount (and
until reimbursed by the Borrower) at a rate per annum which shall be the Base
Rate in effect from time to time plus 4%, in each such case, with interest to be
payable on demand. The Issuing Lender shall give the Borrower prompt written
notice of each Drawing under any Letter of Credit, provided that the failure to
give any such notice shall in no way affect, impair or diminish the Borrower's
obligations hereunder.

                  (b) The obligations of the Borrower under this Section 2.20 to
reimburse the Issuing Lender with respect to Drawings (including interest
thereon) shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment which the
Borrower may have or have had against any Lender (including in its capacity as
the Issuing Lender or as a Participant), or any nonapplication or misapplication
by the beneficiary of the proceeds of such Drawing, the Issuing Lender's only
obligation to the Borrower being to confirm that any documents required to be
delivered under such Letter of Credit appear to have been delivered and that
they appear to comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by the Issuing Lender under or
in connection with any Letter of Credit if taken or omitted in the absence of
gross negligence or willful misconduct, shall not create for the Issuing Lender
any resulting liability to the Borrower.

                                      -49-
<PAGE>   56

                  2.21. Additional Revolving Credit Commitments. (a) The
Borrower shall have the right, at any time and from time to time and upon at
least 30 days prior written notice to the Administrative Agent, to request on
one or more occasions that one or more Lenders (and/or one or more other Persons
which will become Lenders as provided below) provide Additional Revolving Credit
Commitments and, subject to the applicable terms and conditions contained in
this Agreement and the relevant Additional Revolving Loan Commitment Agreement,
make Revolving Credit Loans pursuant to Section 2.1, it being understood and
agreed, however, that (i) no Lender shall be obligated to provide an Additional
Revolving Credit Commitment as a result of any request by the Borrower, (ii)
until such time, if any, as (x) such Lender has agreed in its sole discretion to
provide an Additional Revolving Credit Commitment and executed and delivered to
the Administrative Agent an Additional Revolving Credit Commitment Agreement in
respect thereof as provided in Section 2.21(b) and (y) such other conditions set
forth in Section 2.21(b) shall have been satisfied, such Lender shall not be
obligated to fund any Revolving Credit Loans, or participate in any Letters of
Credit, in excess of the amounts provided for in Section 2.1 or 2.19, as the
case may be, before giving effect to such Additional Revolving Loan Commitments
provided pursuant to this Section 2.21, (iii) any Lender (or, in the
circumstances contemplated by clause (vii) below, any other Person which will
qualify as an Eligible Assignee) may so provide an Additional Revolving Credit
Commitment without the consent of any other Lender (it being understood and
agreed that the consent of the Administrative Agent and the Issuing Lender (such
consent not to be unreasonably withheld or delayed) shall be required if any
such Additional Revolving Credit Commitments are to be provided by a Person
which is not already a Lender), (iv) each provision of Additional Revolving
Credit Commitments on a given date pursuant to this Section 2.21 shall be in a
minimum aggregate amount (for all Lenders (including, in the circumstances
contemplated by clause (vii) below, Eligible Assignees who will become Lenders))
of at least $25,000,000, (v) the aggregate amount of all Additional Revolving
Credit Commitments permitted to be provided pursuant to this Section 2.21 shall
not exceed $250,000,000, (vi) the up-front fees payable to any Lender providing
an Additional Revolving Credit Commitment shall be as set forth in the relevant
Additional Revolving Loan Commitment Agreement, (vii) if, after the Borrower has
requested the then existing Lenders to provide Additional Revolving Credit
Commitments pursuant to this Section 2.21 on the terms to be applicable thereto,
the Borrower has not received Additional Revolving Credit Commitments in an
aggregate amount equal to that amount of the Additional Revolving Credit
Commitments which the Borrower desires to obtain pursuant to such request (as
set forth in the notice provided by the Borrower to the Administrative Agent as
provided above), then the Borrower may request Additional Revolving Credit
Commitments from Persons which would qualify as Eligible Assignees hereunder in
aggregate amount equal to such deficiency on terms which are no more favorable
to such Eligible Assignee in any respect than the terms offered to the Lenders,
provided that any such Additional Revolving Credit Commitments provided by any
such Eligible Assignee which is not already a Lender shall be in a minimum
amount (for such Eligible Assignee) of at least $10,000,000, and (viii) all
actions taken by the Borrower pursuant to this Section 2.21(a) shall be done in
coordination with the Administrative Agent.

                  (b) At the time of any provision of Additional Revolving
Credit Commitments pursuant to this Section 2.21, (i) the Borrower, the
Administrative Agent and each such Lender or other Eligible Assignee which
agrees to provide an Additional Revolving Credit Commitment

                                      -50-
<PAGE>   57

(each, an "Additional Revolving Credit Lender") shall execute and deliver to the
Administrative Agent an Additional Revolving Credit Commitment Agreement
substantially in the form of Exhibit J, subject to such modifications in form
and substance reasonably satisfactory to the Administrative Agent as may be
necessary or appropriate (with the effectiveness of such Additional Revolving
Credit Lender's Additional Revolving Credit Commitment to occur upon delivery of
such Additional Revolving Credit Commitment Agreement to the Administrative
Agent, the payment of any fees required in connection therewith and the
satisfaction of the other conditions in this Section 2.21(b) to the reasonable
satisfaction of the Administrative Agent), and (ii) the Borrower shall, in
coordination with the Administrative Agent, repay all outstanding Revolving
Credit Loans of the Lenders, and incur additional Revolving Credit Loans from
other Lenders in each case so that the Lenders participate in each Borrowing of
Revolving Credit Loans pro rata on the basis of their respective Revolving
Credit Commitments (after giving effect to any increase in the Revolving Credit
Commitments pursuant to this Section 2.21) and with the Borrower being obligated
to pay the respective Lenders the costs (if any) of the type referred to in
Section 10.4(c) in connection with any such repayment and/or Borrowing and (iv)
the Borrower shall deliver to the Administrative Agent an opinion, in form and
substance reasonably satisfactory to the Administrative Agent, from counsel to
the Borrower reasonably satisfactory to the Administrative Agent and dated such
date, covering such matters similar to those set forth in the opinion of counsel
delivered to the Administrative Agent on the Restatement Effective Date pursuant
to Section 3.1 and such other matters as the Administrative Agent may reasonably
request. The Administrative Agent shall promptly notify each Lender as to the
occurrence of each Additional Revolving Credit Commitment Date, and (w) on each
such date, the Revolving Credit Commitments under, and for all purposes of, this
Agreement shall be increased by the aggregate amount of such Additional
Revolving Credit Commitments, (x) on each such date Schedule I shall be deemed
modified to reflect the revised Revolving Credit Commitments of the affected
Lenders, (y) upon surrender of any old Revolving Credit Notes by the respective
Additional Revolving Credit Lender (or, if lost, a standard lost note indemnity
in form and substance reasonably satisfactory to the Borrower), to the extent
requested by any Additional Revolving Credit Lender, a new Revolving Credit Note
will be issued, at the Borrower's expense, to such Additional Revolving Credit
Lender to the extent needed to reflect the revised Revolving Credit Commitment
of such Lender and (z) on such date with respect to all outstanding Letters of
Credit and Unpaid Drawings, there shall be an automatic adjustment to the
participations by the Lenders in such Letters of Credit and Unpaid Drawings to
reflect the new Ratable Portions of the Lenders.

                  2.22. Extension of the Final Maturity Date. The Borrower may
at any time prior to May 31, 2003 extend the Final Maturity Date from July 31,
2003 to March 31, 2004, subject to the following terms and conditions: (i) the
Borrower shall send a written notice indicating its intention to extend the
Final Maturity Date to the Administrative Agent and each Lender, which notice
(a) must be so delivered no later than May 20, 2003 and (b) shall specify the
date of effectiveness of such extension (the "Extension Effective Date") (which
Extension Effective Date shall be no earlier than 10 days following the delivery
of the notice referred to above, but no later than May 31, 2003), (ii) the
Borrower shall deliver to the Administrative Agent a certificate signed by a
Responsible Officer of the Borrower stating that no Default or Event of Default
has occurred and is continuing as of the Extension Effective Date, and (iii) the
Borrower shall pay to

                                      -51-
<PAGE>   58

each Lender on the Extension Effective Date an extension fee (the "Extension
Fee") equal to 0.1875% of such Lender's Revolving Credit Commitment as of the
Extension Effective Date. If the Borrower complies with the provisions of
clauses (i), (ii) and (iii) of the immediately preceding sentence, then as of
the Extension Effective Date the Final Maturity Date shall automatically be
extended to March 31, 2004. No more than one extension of the Final Maturity
Date shall be made pursuant to this Section 2.21.

                                   ARTICLE III

                           CONDITIONS TO EFFECTIVENESS
                        OF THIS AGREEMENT AND OF LENDING
                      AND OF ISSUANCE OF LETTERS OF CREDIT

                  3.1. Conditions Precedent to Effectiveness of this Agreement,
to Initial Revolving Credit Loans and Letters of Credit. The effectiveness of
this Agreement and the obligation of each Lender to make its initial Revolving
Credit Loan hereunder and the obligation of the Issuing Lender to issue a Letter
of Credit hereunder is subject to satisfaction of the conditions precedent that
the Administrative Agent shall have received counterparts of this Agreement duly
executed by each Borrower, each Lender and the Administrative Agent, together
with the following, each dated the Restatement Effective Date (hereinafter
defined) unless otherwise indicated, in form and substance satisfactory to the
Administrative Agent and (except for the Revolving Credit Notes) in sufficient
copies for each Lender (the date of satisfaction of the conditions precedent set
forth in this Section 3.1 and in Section 3.2 being the "Restatement Effective
Date"):

                  (a) The Revolving Credit Notes to the order of the Lenders,
         respectively.

                  (b) A certificate of the Secretary or an Assistant Secretary
         of each Loan Party (or, as applicable, of such Loan Party's partners),
         in substantially the form of Exhibit L, certifying (i) the resolutions
         of its Board of Trustees or Directors, as appropriate, approving each
         Loan Document to which it is a party, (ii) all documents evidencing
         other necessary trust, partnership or corporate action, as appropriate,
         and required governmental and third party approvals, licenses and
         consents with respect to each Loan Document to which it is a party and
         the transactions contemplated thereby and (iii) the names and true
         signatures of each of its officers who has been authorized to execute
         and deliver any Loan Document or other document required hereunder to
         be executed and delivered by or on behalf of such Person.

                  (c) A copy of the declaration of trust or articles or
         certificate of incorporation or partnership agreement or certificate of
         partnership, as appropriate, of each Loan Party certified as of a
         recent date by the Secretary of State of the state of formation of such
         Loan Party, together with certificates of such official attesting to
         the good standing of each such Loan Party.

                  (d) Favorable opinion(s) of counsel to the Loan Parties, in
         substantially the form(s) of Exhibit D, and as to such other matters as
         any Lender through the Administrative Agent may reasonably request.

                                      -52-
<PAGE>   59

                  (e) A certificate of the chief financial officer or treasurer
         of the Borrower in substantially the form of Exhibit M, stating that
         the Borrower is Solvent after giving effect to the initial Revolving
         Credit Loans, the application of the proceeds thereof in accordance
         with Section 6.10 and the payment of all estimated legal, accounting
         and other fees related hereto and thereto.

                  (f) Evidence that the insurance required by Section 6.4 is in
         full force and effect.

                  (g) Such additional documents, information and materials as
         any Lender, through the Administrative Agent, may reasonably request.

                  (h) A closing certificate, in substantially the form of
         Exhibit N, signed by a Responsible Officer of the Borrower, stating
         that the following statements are true and correct on the Restatement
         Effective Date:

                 (i) The statements set forth in Section 3.3 are true after
         giving effect to the Revolving Credit Loans being made on the
         Restatement Effective Date.

                (ii) All costs and accrued and unpaid fees and expenses
         (including, without limitation, legal fees and expenses) required to be
         paid to the Lenders on or before the Restatement Effective Date,
         including, without limitation, those referred to in Sections 2.3 and
         10.4, to the extent then due and payable, have been paid.

               (iii) All necessary governmental and third party approvals
         required to be obtained by any Loan Party in connection with the
         transactions contemplated hereby have been obtained and remain in
         effect, and all applicable waiting periods have expired without any
         action being taken by any competent authority which restrains,
         prevents, impedes, delays or imposes materially adverse conditions upon
         any of the transactions contemplated hereby.

                (iv) There exists no judgment, order, injunction or other
         restraint prohibiting or imposing materially adverse conditions upon
         any of the transactions contemplated hereby.

                 (v) There exists no claim, action, suit, investigation or
         proceeding (including, without limitation, shareholder or derivative
         litigation) pending or, to the knowledge of the Borrower, threatened in
         any court or before any arbitrator or Governmental Authority which
         relates to the Loan Documents or the financing hereunder or which, if
         adversely determined, would have a Material Adverse Effect.

                (vi) There has been no Material Adverse Change since December
         31, 1999 in the corporate, capital or legal structure of the Borrower
         or any of its Subsidiaries without the consent of the Administrative
         Agent.

                (vii) The Borrower's Tangible Net Worth is not less than the
         Minimum Tangible Net Worth.

                                      -53-
<PAGE>   60

                  (i) The Administrative Agent's reasonable satisfaction with
the form and substance of each Operating Lease.

                  (j) A Compliance Certificate, executed by the Chief Financial
Officer or Treasurer of the Borrower substantially in the form attached as
Exhibit G hereto (a "Compliance Certificate"), and if requested by the
Administrative Agent, together with copies (to the extent not already delivered)
of the Hotel Documents in respect of each Hotel indicated by Administrative
Agent.

                  (k) The Subsidiary Guaranty, duly executed by the Guarantors
party thereto, which Subsidiary Guaranty shall be in full force and effect.

                  (l) The Pledge Agreement, duly executed by the parties
thereto, which Pledge Agreement shall be in full force and effect.

                  (m) The First Amendment to the Pledge Agreement, duly executed
by the parties thereto, which First Amendment to the Pledge Agreement shall be
in full force and effect.

                  3.2. Additional Conditions Precedent to Effectiveness of this
Agreement, to Initial Revolving Credit Loans and Letters of Credit. The
effectiveness of this Agreement, the obligation of each Lender to make its
initial Revolving Credit Loan hereunder and the obligation of the Issuing Lender
to issue Letters of Credit hereunder is subject to the further conditions
precedent that:

                  (a) No Lender or the Issuing Lender in its sole judgment
         exercised reasonably shall have determined (i) that there has been any
         Material Adverse Change since December 31, 1999 or (ii) that there has
         occurred any adverse change which such Lender deems material in the
         financial markets generally, since December 31, 1999 or (iii) that
         there is any claim, action, suit, investigation, litigation or
         proceeding (including, without limitation, shareholder or derivative
         litigation) pending or threatened in any court or before any arbitrator
         or Governmental Authority which, if adversely determined, would have a
         Material Adverse Effect; and nothing shall have occurred since December
         31, 1999 which, in the judgment of any Lender, has had a Material
         Adverse Effect.

                  (b) Each Lender and the Issuing Lender shall be satisfied, in
         its sole judgment, exercised reasonably, with the corporate, capital,
         legal and management structure of the Borrower and its Subsidiaries,
         and shall be satisfied, in its sole judgment exercised reasonably, with
         the nature and status of all Contractual Obligations, securities,
         labor, tax, ERISA, employee benefit, environmental, health and safety
         matters, in each case, involving or affecting the Borrower or any of
         its Subsidiaries.

                  (c) On the Restatement Effective Date and concurrently with
         the initial incurrence of Revolving Credit Loans and issuance of
         Letters of Credit hereunder, (i) all Existing Loans shall have been
         repaid in full in cash, together with accrued but unpaid interest
         thereon and (ii) there shall have been paid in cash in full all accrued
         but unpaid fees under, and as defined in, the Existing Credit Facility
         (including, without limitation,

                                      -54-
<PAGE>   61

         commitment fees, letter of credit fees and facing fees) accrued but
         unpaid prior to but excluding the Restatement Effective Date and all
         other amounts, costs and expenses (including, without limitation,
         breakage costs, if any, with respect to outstanding Eurodollar Rate
         Loans under and as defined in the Existing Credit Facility) then owing
         to any of the Existing Lenders and/or the Administrative Agent, as
         administrative agent under the Existing Credit Facility, in each case
         to the satisfaction of the Administrative Agent or the Original
         Lenders, as the case may be, regardless of whether or not such amounts
         would otherwise be due and payable at such time pursuant to the terms
         of the Existing Credit Facility and (iii) all outstanding Notes (as
         defined in the Existing Credit Facility) issued by the Borrower to the
         Original Lenders under the Existing Credit Facility shall be deemed
         canceled.

                  3.3. Conditions Precedent to Each Revolving Credit Loan and
Letter of Credit. The obligation of each Lender to make any Revolving Credit
Loan (including any Revolving Credit Loan being made by such Lender on the
Restatement Effective Date) and the obligation of the Issuing Lender to issue a
Letter of Credit shall be subject to the further conditions precedent that:

                  (a) The following statements shall be true on the date of such
         Revolving Credit Loan or issuance, before and after giving effect
         thereto and to the application of the proceeds therefrom (and the
         acceptance by the Borrower of the proceeds of such Revolving Credit
         Loan or such Letter of Credit shall constitute a representation and
         warranty by the Borrower that on the date of such Revolving Credit Loan
         or issuance such statements are true):

                          (i) The representations and warranties of the Borrower
                  contained in Article IV and of each Loan Party in the other
                  Loan Documents are correct on and as of such date as though
                  made on and as of such date (it being understood and agreed
                  that any representation or warranty which by its terms is made
                  on a specified date shall be required to be true and correct
                  only as of such specified date); and

                         (ii) No Default or Event of Default exists or will
                  result from the Revolving Credit Loans being made or the
                  Letters of Credit being issued on such date.

                  (b) The making of the Revolving Credit Loans or the issuance
         of the Letters of Credit on such date does not violate any Requirement
         of Law and is not enjoined, temporarily, preliminarily or permanently.

                  (c) The Administrative Agent shall have received a Compliance
         Certificate, executed by a Responsible Officer of the Borrower,
         satisfactory to the Administrative Agent, and if requested by the
         Administrative Agent, together with copies (to the extent not already
         delivered) of the Hotel Documents in respect of each Hotel indicated by
         Administrative Agent.

                                      -55-
<PAGE>   62

                  (d) The Administrative Agent shall have received such
         additional documents, information and materials as any Lender, through
         the Administrative Agent, may reasonably request.

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

                  To induce the Lenders and the Administrative Agent to enter
into this Agreement, the Borrower represents and warrants to the Lenders and the
Administrative Agent that on and after the Restatement Effective Date:

                  4.1. Existence; Compliance with Law. Each Loan Party and each
of its Subsidiaries and Eligible Joint Ventures (i) is a real estate investment
trust or a corporation, limited liability company or limited partnership, as
specified herein, duly organized, validly existing and in good standing under
the laws of the jurisdiction of its formation; (ii) is duly qualified as a
foreign corporation, limited liability company or limited partnership and in
good standing under the laws of each jurisdiction where such qualification is
necessary, except for failures which in the aggregate have no Material Adverse
Effect; (iii) has all requisite corporate, limited liability company or
partnership power and authority and the legal right to own, pledge and mortgage
its properties, to lease (as lessee) the properties that it leases as lessee, to
lease or sublease (as lessor) the properties it owns and/or leases (as lessee)
and to conduct its business as now or currently proposed to be conducted; (iv)
is in compliance with its declaration of trust or certificate of or formation
and by-laws, regulations or partnership agreement, as appropriate; (v) is in
compliance with all other applicable Requirements of Law except for such
non-compliances as in the aggregate have no Material Adverse Effect; and (vi)
has all necessary licenses, permits, consents or approvals from or by, has made
all necessary filings with, and has given all necessary notices to, each
Governmental Authority having jurisdiction, to the extent required for such
ownership, leasing and conduct, except for licenses, permits, consents or
approvals which can be obtained by the taking of ministerial action to secure
the grant or transfer thereof or failures which in the aggregate have no
Material Adverse Effect.

                  4.2. Power: Authorization, Enforceable Obligations. (a) The
execution, delivery and performance by each Loan Party of the Loan Documents to
which it is a party and the consummation of the transactions related to the
financing contemplated hereby:

                (i) are within such Loan Party's corporate, partnership or trust
         powers, as appropriate;

                (ii) have been duly authorized by all necessary corporate,
         partnership or trust action, as appropriate, including, without
         limitation, the consent of stockholders and general and/or limited
         partners where required;

               (iii) do not and will not (A) contravene any Loan Party's or any
         of its Subsidiaries' or Eligible Joint Ventures' respective declaration
         of trust, certificate of incorporation or formation or by-laws,
         regulations, partnership agreement or other comparable

                                      -56-
<PAGE>   63

          governing documents, (B) violate any other applicable Requirement of
          Law (including, without limitation, Regulations T, U and X of the
          Board of Governors of the Federal Reserve System), or any order or
          decree of any Governmental Authority or arbitrator, (C) conflict with
          or result in the breach of, or constitute a default under, or result
          in or permit the termination or acceleration of, any material
          Contractual Obligation of any Loan Party or any of its Subsidiaries or
          Eligible Joint Ventures, or (D) result in the creation or imposition
          of any Lien upon any of the property of any Loan Party or any of its
          Subsidiaries or Eligible Joint Ventures; and

                  (iv) do not require the consent of, authorization by, approval
         of, notice to, or filing or registration with, any Governmental
         Authority or any other Person, other than those which have been
         obtained or made and copies of which have been or will be delivered to
         the Administrative Agent pursuant to Section 3. 1, and each of which on
         the Restatement Effective Date will be in full force and effect.

                  (b) This Agreement has been, and each of the other Loan
Documents has been, or will have been upon delivery thereof pursuant to Section
3.1, duly executed and delivered by each Loan Party thereto. This Agreement is,
and the other Loan Documents are or will be, when delivered hereunder, the
legal, valid and binding obligation of each Loan Party thereto, enforceable
against it in accordance with its terms except to the extent that enforceability
may be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting the enforcement of
creditor's rights and remedies generally.

                  4.3. Taxes. All federal, state, local and foreign tax returns,
reports and statements (collectively, the "Tax Returns") required to be filed by
the Borrower or any of its Tax Affiliates have been filed, except in the case of
any such state, local or foreign tax return where such failure to file will not
have a Material Adverse Effect, with the appropriate governmental agencies in
all jurisdictions in which such Tax Returns, are required to be filed, all such
Tax Returns are true and correct in all material respects, and all taxes,
charges and other impositions due and payable have been timely paid prior to the
date on which any fine, penalty, interest, late charge or loss may be added
thereto for nonpayment thereof, except where contested in good faith and by
appropriate proceedings if (i) adequate reserves therefor have been established
on the books of the Borrower or such Tax Affiliate in conformity with GAAP and
(ii) all such non-payments in the aggregate have no Material Adverse Effect.
Proper and accurate amounts have been withheld by the Borrower and each of its
respective Tax Affiliates from their respective employees for all periods in
full and complete compliance with the tax, social security and unemployment
withholding provisions of applicable federal, state, local and foreign law and
such withholdings have been timely paid to the respective Governmental
Authorities. None of the Borrower or any of its Tax Affiliates has (i) executed
or filed with the IRS any agreement or other document extending, or having the
effect of extending, the period for assessment or collection of any charges;
(ii) agreed or been requested to make any adjustment under Section 481(a) of the
Code by reason of a change in accounting method or otherwise; or (iii) any
obligation under any written tax sharing agreement.

                                      -57-
<PAGE>   64

                  4.4. Full Disclosure. No written statement prepared or
furnished by or on behalf of any Loan Party or any of its Affiliates in
connection with any of the Loan Documents or the consummation of the
transactions contemplated thereby, and no financial statement delivered pursuant
hereto or thereto, contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements contained herein or
therein not misleading.

                  4.5. Financial Matters. (a) The consolidated balance sheet of
the Borrower and its Subsidiaries as at December 31, 1999, and the related
consolidated statements of income, retained earnings and cash flows of the
Borrower and its Subsidiaries for the fiscal year then ended, audited by
PricewaterhouseCoopers, L.L.P. and the consolidated balance sheets of the
Borrower and its Subsidiaries as at December 31, 1999, and the related
consolidated statements of income, retained earnings and cash flows of the
Borrower and its Subsidiaries for the twelve months then ended, certified by the
chief financial officer or treasurer of the Borrower, copies of which have been
furnished to each Lender, fairly present, subject, in the case of said balance
sheets as at December 31, 1999, and said statements of income, retained earnings
and cash flows for the twelve months then ended, to year-end audit adjustments,
the consolidated financial condition of the Borrower and its Subsidiaries as at
such dates and the consolidated results of the operations of the Borrower and
its Subsidiaries for the period ended on such dates, all in conformity with
GAAP.

                  (b) Since December 31, 1999, there has been no Material
Adverse Change and there have been no events or developments that in the
aggregate have had a Material Adverse Effect.

                  (c) Neither the Borrower nor any of its Subsidiaries had at
December 31, 1999 any material obligation, contingent liability or liability for
taxes, long-term leases or unusual forward or long-term commitment which is not
reflected in the balance sheet at such date referred to in subsection (a) above
or in the notes thereto.

                  (d) The Projections that have been delivered to each Lender,
were prepared on the basis of the assumptions expressed therein, which
assumptions the Borrower believed to be reasonable based on the information
available to the Borrower at the time so furnished and on the Restatement
Effective Date.

                  (e) The Borrower is, and on a consolidated basis the Borrower
and its Subsidiaries are, Solvent.

                  4.6. Litigation. There are no pending or, to the knowledge of
the Borrower, threatened actions, investigations or proceedings affecting the
Borrower, any of its Subsidiaries or Eligible Joint Ventures, or (to the best
knowledge of the Borrower) any Operating Lessee or any of their respective
properties or revenues before any court, Governmental Authority or arbitrator,
other than those that in the aggregate, if adversely determined, would have no
Material Adverse Effect. The performance of any action by (a) any Loan Party
required or contemplated by any of the Loan Documents or (b) any Operator
required or contemplated by any Operating Lease or Management Agreement is not,
to the best knowledge of the Borrower, restrained or enjoined (either
temporarily, preliminarily or permanently), and, to the best knowledge of the

                                      -58-
<PAGE>   65

Borrower, no material adverse condition has been imposed by any Governmental
Authority or arbitrator upon any of the foregoing transactions contemplated by
the aforementioned documents.

                  4.7. Margin Regulations. The Borrower is not engaged in the
business of extending credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulation U issued by the Board of Governors of
the Federal Reserve System), and no proceeds of any Borrowing will be used to
purchase or carry any margin stock or to extend credit to others for the purpose
of purchasing or carrying any margin stock.

                  4.8. Ownership of Borrower and DJONT; Subsidiaries. (a) The
authorized capital stock of FelCor consists of (i) as of the date hereof
200,000,000 shares of common stock, $.01 par value per share, of which
54,789,452 shares are issued and outstanding as of May 31, 2000, and (ii) as of
the date hereof 20,000,000 shares of preferred stock, $.01 par value per share,
of which 6,050,000 shares, designated as $1.95 Series A Cumulative Convertible
Preferred Stock, $25.00 per share liquidation preference, and 57,500 shares
designated as 9% Series B Cumulative Redeemable Preferred Stock, $2,500.00 per
share liquidation preference (and represented by 5,750,000 Depository Shares,
each representing a 1/100 interest such preferred stock) are outstanding as of
May 31, 2000. All of the outstanding capital stock of FelCor has been validly
issued, is fully paid and non-assessable.

                  (b) FelCor is the sole general partner of FelCor LP and, as of
the date hereof, owns directly or indirectly at least 88% of the partnership
interests of FelCor LP free and clear of all Liens.

                  (c) There are no outstanding classes of voting membership
interests of DJONT other than the Class A membership interests. As of the date
hereof Hervey A. Feldman and Thomas J. Corcoran, Jr. own, beneficially, all of
the voting Class A membership interests in DJONT, free and clear of all Liens.

                  (d) Set forth on Schedule 4.8 hereto is a complete and
accurate list showing, as of the Restatement Effective Date, all Subsidiaries
and Unconsolidated Entities of the Borrower and, as to each such Subsidiary and
Unconsolidated Entity, the jurisdiction of its formation and the percentage of
the outstanding Stock of each class owned (directly or indirectly) by the
Borrower. No Stock of any Subsidiary or Unconsolidated Entity of the Borrower is
subject to any outstanding option, warrant, right of conversion or purchase or
any similar right other than certain rights of first refusal contained in
partnership agreements to which the Borrower or a Subsidiary is a party. All of
the outstanding capital Stock of each such Subsidiary and Unconsolidated Entity
owned by the Borrower has been validly issued, is fully paid and (except for
partnership interests) non- assessable, and all outstanding capital Stock of its
Subsidiaries and Unconsolidated Entities owned by the Borrower is free and clear
of all Liens, other than Liens created under the Pledge Agreement. Neither the
Borrower nor any such Subsidiary or Unconsolidated Entity is a party to, or has
knowledge of, any agreement restricting the transfer or hypothecation of any
shares of Stock of any such Subsidiary or Unconsolidated Entity, other than
those imposed by Requirements of Law, or the Loan Documents; provided that
mortgage loan agreements executed by certain Subsidiaries or Eligible Joint
Ventures may contain such restrictions.

                                      -59-
<PAGE>   66

                  4.9. ERISA. (a) There are no Multiemployer Plans.

                  (b) Each Plan and any related trust intended to qualify under
Code Section 401 or 501 has been determined by the IRS to be so qualified and to
the best knowledge of the Borrower nothing has occurred which would cause the
loss of such qualification.

                  (c) None of the Borrower, any of its Subsidiaries or any ERISA
Affiliate, with respect to any Pension Plan, has failed to make any contribution
or pay any amount due as required by Section 412 of the Code or Section 302 of
ERISA or the terms of any such plan, and all required contributions and benefits
have been paid in accordance with the provisions of each such plan.

                  (d) There are no pending or, to the knowledge of the Borrower,
threatened claims, actions or proceedings (other than claims for benefits in the
normal course), relating to any Plan other than those that in the aggregate, if
adversely determined, would have no Material Adverse Effect.

                  (e) No Pension Plan has any unfunded accrued benefit
liabilities, as determined by using reasonable actuarial assumptions utilized by
such plan's actuary for funding purposes. Within the last five years none of the
Borrower, any of its Subsidiaries or any ERISA Affiliate has caused a Pension
Plan with any such liabilities to be transferred outside of its "controlled
group" (within the meaning of Section 4001(a)(14) of ERISA).

                  (f) No Plan provides for continuing health, disability,
accident or death benefits or coverage for any participant or his or her
beneficiary after such participant's termination of employment (except as may be
required by Section 4980B of the Code and at the sole expense of the participant
or the beneficiary) which would result in the aggregate under all Plans in a
liability in an amount which would have a Material Adverse Effect.

                  (g) None of the assets of any of the Loan Parties are subject
to Title I of ERISA because they consist of "plan assets" within the meaning of
DOL Regulation Section 2510.3-101 by reason of an equity investment in any of
the Loan Parties.

                  4.10. Indebtedness. Except as disclosed on Schedule 4.10, as
of the date hereof, none of the Borrower or any of its Subsidiaries or
Unconsolidated Entities has any Indebtedness.

                  4.11. Restricted Payments. From and after the Restatement
Effective Date, the Borrower has not declared or made any Restricted Payments
(other than those permitted pursuant to Section 7.4).

                  4.12. No Burdensome Restrictions; No Defaults. (a) No Loan
Party nor any of its Subsidiaries or Eligible Joint Ventures (i) is a party to
any Contractual Obligation the compliance with which would have a Material
Adverse Effect or the performance of which by any thereof, either
unconditionally or upon the happening of an event, will result in the creation
of a Lien on the property or assets of any such Loan Party or its Subsidiaries,
or (ii) is subject to any charter or corporate restriction which has a Material
Adverse Effect.

                                      -60-
<PAGE>   67

                  (b) No Loan Party or Subsidiary or Eligible Joint Venture of
any Loan Party is in default under or with respect to any Contractual Obligation
owed by it and, to the knowledge of the Borrower, no other party is in default
under or with respect to any Contractual Obligation owed to any Loan Party or to
any Subsidiary or Eligible Joint Venture of a Loan Party, other than (i) those
defaults which in the aggregate have no Material Adverse Effect and (ii) those
defaults arising as a result of the Borrower's failure to comply with Section
7.1(c) of the Loan Agreement.

                  (c) No Event of Default or Default has occurred and is
continuing, other than pursuant to Section 8.1(d) arising as a result of the
Borrower's failure to comply with Section 7.1(c) of the Loan Agreement.

                  (d) There is no Requirement of Law the compliance with which
by any Loan Party would have a Material Adverse Effect.

                  (e) As of the date hereof, no Subsidiary or Eligible Joint
Venture of the Borrower is subject to any Contractual Obligation (other than as
set forth in the governing documents thereof) restricting or limiting its
ability to transfer its assets to the Borrower or to declare or make any
dividend payment or other distribution on account of any shares of any class of
its Stock or its ability to purchase, redeem, or otherwise acquire for value or
make any payment in respect of any such shares or any shareholder rights;
provided that mortgage loan agreements executed by certain subsidiaries or
Eligible Joint Ventures may contain such restrictions.

                  4.13. Investments. Except as disclosed on Schedule 4.8 or
4.13, the Borrower and its Subsidiaries considered as a single enterprise, is
not engaged in any joint venture or partnership with any other Person nor does
it maintain any Investment, as of the date hereof.

                  4.14. Government Regulation. Neither the Borrower nor any of
its Subsidiaries or Eligible Joint Ventures is an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment ", as such terms are defined in the Investment Company Act of 1940,
as amended, or subject to regulation under the Public Utility Holding Company
Act of 1935, the Federal Power Act, the Interstate Commerce Act, or any other
federal or state statute or regulation such that its ability to incur
Indebtedness is limited, or its ability to consummate the transactions
contemplated hereby or by any other Loan Document, or the exercise by the
Administrative Agent or any Lender of rights and remedies hereunder or
thereunder, is impaired. The making of the Revolving Credit Loans by the
Lenders, the application of the proceeds and repayment thereof by the Borrower
and the consummation of the transactions contemplated by the Loan Documents will
not cause the Borrower or any of its Subsidiaries or Eligible Joint Ventures to
violate any provision of any of the foregoing or any rule, regulation or order
issued by the Securities and Exchange Commission thereunder.

                  4.15. Insurance. All policies of insurance of any kind or
nature owned by or issued to or for the benefit of any Loan Party or any of its
Subsidiaries or Eligible Joint Ventures, or issued in respect of any real
property owned or leased by the Borrower or any of its Subsidiaries or Eligible
Joint Ventures including, without limitation, policies of life, fire, theft,

                                      -61-
<PAGE>   68

product liability, public liability, property damage, other casualty, employee
fidelity, workers' compensation and employee health and welfare insurance, are
in full force and effect and are of a nature and provide such coverage as is
sufficient and as is customarily carried by companies of the size and character
of such Person. No Loan Party or any of its Subsidiaries or Eligible Joint
Ventures has been refused insurance for which it applied or had any policy of
insurance terminated (other than at its request).

                  4.16. Labor Matters. (a) There are no strikes, work stoppages,
slowdowns or lockouts pending or threatened against or involving the Borrower or
its Subsidiaries or their respective Hotels, other than those which in the
aggregate have no Material Adverse Effect.

                  (b) There are no unfair labor practice charges, arbitrations
or grievances pending against or involving, or to the knowledge of the Borrower
threatened against or involving the Borrower or its Subsidiaries or Eligible
Joint Ventures, other than those which, in the aggregate, if resolved adversely
to the Borrower or such Subsidiary or Eligible Joint Venture, would have no
Material Adverse Effect.

                  (c) As of the Restatement Effective Date, neither the Borrower
nor any of its Subsidiaries or Eligible Joint Ventures are parties to, or have
any obligations under, any collective bargaining agreement.

                  (d) There is no organizing activity involving the Borrower or
any of its Subsidiaries or Eligible Joint Ventures pending or, to the Borrower's
knowledge, threatened by any labor union or group of employees, other than those
which in the aggregate have no Material Adverse Effect. There are no
representation proceedings pending or, to the Borrower's knowledge, threatened
with the National Labor Relations Board, and no labor organization or group of
employees of the Borrower or any of its Subsidiaries or Eligible Joint Ventures
have made a pending demand for recognition, other than those which in the
aggregate have no Material Adverse Effect.

                  4.17. Force Majeure. Neither the business nor the properties
of any Loan Party or any of their respective Subsidiaries or Eligible Joint
Ventures are currently suffering from the effects of any fire, explosion,
accident, strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance), other than those which in the aggregate
have no Material Adverse Effect.

                  4.18. Use of Proceeds. The proceeds of the Revolving Credit
Loans will be used by the Borrower solely as follows: (a) subject to the
limitations set forth herein, to fund any direct or indirect investment in
existing Hotels, in Hotels and/or interests in Hotels which are to be acquired
by the Borrower or any of its Subsidiaries, and for the payment of related
transaction costs, fees and expenses and (b) for general corporate or working
capital purposes or for Letters of Credit.

                  4.19. Environmental Protection. Except as disclosed on
Schedule 4.19 (and the Borrower represents and warrants to the Lenders and the
Administrative Agent that the matters

                                      -62-
<PAGE>   69

disclosed in the reports identified on Schedule 4.19 would not reasonably be
expected to have a Material Adverse Effect):

                  (a) to the best knowledge of Borrower and its Subsidiaries,
all real property leased or owned by the Borrower or any of its Subsidiaries or
Eligible Joint Ventures is free from contamination by any Hazardous Material
which could reasonably be expected to subject the Borrower or any of its
Subsidiaries to Environmental Liabilities and Costs of $5,000,000 or more;

                  (b) the operations of the Borrower and each of its
Subsidiaries or Eligible Joint Ventures, and the operations at any real property
leased or owned by the Borrower or any of its Subsidiaries or Eligible Joint
Ventures are in material compliance in all respects with all applicable
Environmental Laws;

                  (c) neither the Borrower nor any of its Subsidiaries or
Eligible Joint Ventures have liabilities with respect to Hazardous Materials
and, to the best knowledge of the Borrower and its Subsidiaries, no facts or
circumstances exist which could give rise to liabilities with respect to
Hazardous Materials which could reasonably be expected to subject the Borrower
or any of its Subsidiaries to Environmental Liabilities and Costs of $5,000,000
or more;

                  (d) (i) the Borrower and its Subsidiaries and Eligible Joint
Ventures and all real property owned or leased by the Borrower or its
Subsidiaries and Eligible Joint Ventures have all Environmental Permits
necessary for the operations at such real property and are in material
compliance with such Environmental Permits, (ii) there are no Legal Proceedings
pending nor, to the best knowledge of the Borrower and its Subsidiaries,
threatened to revoke, or alleging the violation of, such Environmental Permits,
and (iii) neither the Borrower nor any of its Subsidiaries or Eligible Joint
Ventures or to the best knowledge of the Borrower and its Subsidiaries the
Operators have received any notice from any source to the effect that there is
lacking any Environmental Permit required in connection with the current use or
operation of any property leased or owned by the Borrower or any of its
Subsidiaries or Eligible Joint Ventures;

                  (e) neither the Borrower's nor any of its Subsidiaries' or
Eligible Joint Ventures' current facilities and operations, nor, to the best
knowledge of the Borrower and its Subsidiaries, any Operator, any predecessor of
the Borrower or any of its Subsidiaries or Eligible Joint Ventures, nor any of
the Borrower's or its Subsidiaries' or Eligible Joint Ventures' past facilities
and operations, nor to the best knowledge of the Borrower and its Subsidiaries,
any owner of premises leased or operated by the Borrower and its Subsidiaries
and Eligible Joint Ventures, are subject to any outstanding written Order or
Contractual Obligation, including Environmental Liens, with any Governmental
Authority or other Person, or to any federal, state, local, foreign or
territorial investigation respecting (i) Environmental Laws, (ii) Remedial
Action, (iii) any Environmental Claim, or (iv) the Release or threatened Release
of any Hazardous Material;

                                      -63-
<PAGE>   70

                  (f) neither the Borrower nor any of its Subsidiaries or
Eligible Joint Ventures or, to the best knowledge of the Borrower and its
Subsidiaries, Operators are subject to any pending Legal Proceeding alleging the
violation of any Environmental Law with respect to a Hotel nor, to the best
knowledge of the Borrower and its Subsidiaries, are any such proceedings
threatened;

                  (g) neither the Borrower nor any of its Subsidiaries or
Eligible Joint Ventures nor, to the best knowledge of the Borrower and its
Subsidiaries, any Operators or predecessor of the Borrower or any of its
Subsidiaries or Eligible Joint Ventures, nor to the best knowledge of the
Borrower and its Subsidiaries any owner of premises leased by the Borrower or
any of its Subsidiaries or Eligible Joint Ventures, have filed any notice under
federal, state or local, territorial or foreign law indicating past or present
treatment, storage, or disposal of or reporting a Release of Hazardous Material
into the environment;

                  (h) none of the operations of the Borrower or any of its
Subsidiaries or Eligible Joint Ventures or, to the best knowledge of the
Borrower and its Subsidiaries, of any Operators or predecessor of the Borrower
or any of its Subsidiaries or Eligible Joint Ventures, or, to the best knowledge
of the Borrower and its Subsidiaries, of any owner of premises leased by the
Borrower or any of its Subsidiaries or Eligible Joint Ventures, involve or
previously involved the generation, transportation, treatment, storage or
disposal of hazardous waste, as defined under 40 C.F.R. Part 261.3 (in effect as
of the date of this Agreement) or any state, local, territorial or foreign
equivalent; and

                  (i) there is not now, nor to the best knowledge of the
Borrower and its Subsidiaries, has there been in the past, on, in or under any
real property leased or owned by the Borrower or any of its Subsidiaries or
Eligible Joint Ventures, to the best knowledge of the Borrower and its
Subsidiaries or any of their predecessors (i) any underground storage tanks or
surface tanks, dikes or impoundments (other than for surface water), (ii) any
friable asbestos-containing materials, (iii) any polychlorinated biphenyls, or
(iv) any radioactive substances other than naturally occurring radioactive
material.

                  4.20. Contractual Obligations Concerning Assets. As of the
date hereof, neither the Borrower nor any of its Subsidiaries owns or holds, or
is obligated under or a party to, any option, right of first refusal, or other
contractual right to purchase or acquire, or any Contractual Obligation to
effect an Asset Sale of, any Hotel owned or leased by the Borrower or any of its
Subsidiaries, except those that in the aggregate would not have a Material
Adverse Effect whether or not exercised.

                  4.21. Intellectual Property. The Loan Parties and its
Subsidiaries and Eligible Joint Ventures or the Operating Lessee own or license
or otherwise have the right to use all material licenses, permits, patents,
patent applications, trademarks, trademark applications, service marks, trade
names, copyrights, copyright applications, franchises, authorizations and other
intellectual property rights that are necessary for the operations of their
respective businesses, without infringement upon or conflict with the rights of
any other Person with respect thereto, including, without limitation, the
Licenses and all trade names associated with any private label brands of any
Loan Party or any of its Subsidiaries or Eligible Joint Ventures. To

                                      -64-
<PAGE>   71

the best knowledge of the Borrower, no material slogan or other advertising
device, product, process, method, substance, part or component, or other
material now employed, or now contemplated to be employed, by any Loan Party or
any of their respective Subsidiaries or Eligible Joint Ventures or the Operating
Lessee infringes upon or conflicts with any rights owned by any other Person,
and no claim or litigation regarding any of the foregoing is pending or
threatened.

                  4.22. Title. (a) Each Loan Party and their respective
Subsidiaries and Eligible Joint Ventures own good and marketable fee simple
absolute title to all of the Real Estate purported to be owned by them, which
Real Estate is at the date hereof described in Schedule 4.22(a), and good and
marketable title to, or valid leasehold interests in, all other properties and
assets purported to be leased by any Loan Party or any of their respective
Subsidiaries or Eligible Joint Ventures, including, without limitation, valid
leasehold interests pursuant to the Leases and all property reflected in the
balance sheet referred to in Section 4.5(a). Each Loan Party and its respective
Subsidiaries or Eligible Joint Ventures received all deeds, assignments,
waivers, consents, non-disturbance and recognition or similar agreements, bills
of sale and other documents, and have duly effected all recordings, filings and
other actions necessary to establish, protect and perfect such Loan Party's and
their respective Subsidiaries' or Eligible Joint Ventures' right, title and
interest in and to all such property except for such documents or actions the
failure to obtain or accomplish which would not have a Material Adverse Effect.

                  (b) All material real property leased at the date hereof by
the Borrower or any of their respective Subsidiaries or Eligible Joint Ventures
is listed on Schedule 4.22(b). Each of such leases is valid and enforceable in
accordance with its terms and is in full force and effect. The Borrower has
delivered to the Administrative Agent true and complete copies of each of such
leases and all documents affecting the rights or obligations of the Borrower or
any of its Subsidiaries or Eligible Joint Ventures which is a party thereto,
including, without limitation, any non-disturbance and recognition agreements,
subordination agreements, attornment agreements and agreements regarding the
term or rental of any of the leases. None of the Borrower or any of its
respective Subsidiaries or Eligible Joint Ventures nor, to the knowledge of the
Borrower, any other party to any such lease is in default of its obligations
thereunder or has delivered or received any notice of default under any such
lease, nor has any event occurred which, with the giving of notice, the passage
of time or both, would constitute a default under any such lease, except for
defaults which in the aggregate have no Material Adverse Effect.

                  (c) All components of all improvements included within the
Hotels owned or leased, as lessee, by any Loan Party or Eligible Joint Venture
(collectively, "Improvements"), including, without limitation, the roofs and
structural elements thereof and the heating, ventilation, air conditioning,
plumbing, electrical, mechanical, sewer, waste water, storm water, paving and
parking equipment, systems and facilities included therein, are in good working
order and repair, subject to such exceptions which are not reasonably likely to
have, in the aggregate, a Material Adverse Effect. All water, gas, electrical,
steam, compressed air, telecommunication, sanitary and storm sewage lines and
systems and other similar systems serving the Hotels owned or leased by any Loan
Party or any of their respective Subsidiaries or Eligible Joint Ventures are
installed and operating and are sufficient to enable the real property owned or
leased by any Loan Party and their respective Subsidiaries or Eligible Joint
Ventures to continue to be used and oper

                                      -65-
<PAGE>   72

-ated in the manner currently being used and operated, and no Loan Party or any
of its Subsidiaries or Eligible Joint Ventures has any knowledge of any factor
or condition that reasonably could be expected to result in the termination or
material impairment of the furnishing thereof. No Improvement or portion thereof
is dependent for its access, operation or utility on any land, building or other
Improvement not included in the real property owned or leased by any Loan Party
or any of its Subsidiaries or Eligible Joint Ventures other than for access
provided pursuant to a recorded easement or other right of way establishing the
right of such access.

                  (d) All Permits required to have been issued or appropriate to
enable all real property owned or leased by any Loan Party or any of its
Subsidiaries or Eligible Joint Ventures to be lawfully occupied and used for all
of the purposes for which they are currently occupied and used have been
lawfully issued and are in full force and effect, other than those which in the
aggregate have no Material Adverse Effect.

                  (e) No Loan Party or any of its Subsidiaries or Eligible Joint
Ventures has received any notice, or has any knowledge, of any pending,
threatened or contemplated condemnation proceeding affecting any real property
owned or leased by any Loan Party or any of its Subsidiaries or Eligible Joint
Ventures or any part thereof, or any proposed termination or impairment of any
parking at any such owned or leased real property or of any sale or other
disposition of any real property owned or leased by any Loan Party or any of its
Subsidiaries or Eligible Joint Ventures or any part thereof in lieu of
condemnation, which in the aggregate, are reasonably likely to have a Material
Adverse Effect.

                  (f) Except for events or conditions not reasonably likely to
have, in the aggregate, a Material Adverse Effect, (i) no portion of any real
property owned or leased by any Loan Party or any of its Subsidiaries or
Eligible Joint Ventures has suffered any material damage by fire or other
casualty loss which has not heretofore been completely repaired and restored to
its condition prior to such casualty, and (ii) no portion of any real property
owned or leased by any Loan Party or any of its Subsidiaries or Eligible Joint
Ventures is located in a special flood hazard area as designated by any Federal
Governmental Authorities.

                  4.23. Status as REIT. The Borrower is organized in conformity
with the requirements for qualification as an equity-oriented real estate
investment trust under the Code. Borrower has met all of the requirements for
qualification as an equity-oriented real estate investment trust under the Code
for its Fiscal Year ended December 31, 1999. The Borrower is in a position to
qualify for its current Fiscal Year as a real estate investment trust under the
Code and its proposed methods of operation will enable it to so qualify.

                  4.24. Operator: Compliance with Law. To the best knowledge of
the Borrower and its Subsidiaries, each Operator (i) has full power and
authority and the legal right to own, lease (or sublease), manage and operate
(as applicable) the properties it operates and to conduct the business in which
it is currently engaged with respect to any real property owned or leased by the
Borrower or any of its Subsidiaries or Eligible Joint Ventures, (ii) is duly
qualified or licensed and is in good standing under the laws of each
jurisdiction where its ownership, lease (or sublease), management or operation
of any real property owned or leased by the Borrower or any of its Subsidiaries
or Eligible Joint Ventures requires such qualification, and (iii) is in

                                      -66-
<PAGE>   73

compliance with all Requirements of Law applicable to the real property owned or
leased by the Borrower or any of its Subsidiaries or Eligible Joint Ventures, or
applicable to the operation or management thereof except to the extent that the
failure to comply therewith is not reasonably likely to have, in the aggregate,
a Material Adverse Effect.

                  4.25. Operating Leases, Licenses and Management Agreement. (a)
Each of the Hotels (i) is leased to an Operating Lessee under an Operating
Lease, (ii) is the subject of a License, and (iii) is managed and operated for
the Operating Lessee pursuant to a Management Agreement, except to the extent
that the aggregate value of any Hotels owned or leased by the Borrower (directly
or indirectly) which are not leased to an Operating Lessee, managed by a
Manager, and operated pursuant to and with the benefit of a License does not
exceed 10% of Total Value.

                  (b) Each of the Operating Leases, Licenses and Management
Agreements in respect of the Hotels (i) is in full force and effect, (ii) is a
legally valid and binding obligation of each of the parties thereto, subject to
such exceptions which are not reasonably likely to have, in the aggregate, a
Material Adverse Effect, and (iii) has not been modified, amended or
supplemented in any material or adverse way. Neither the Borrower nor any of its
Subsidiaries or Eligible Joint Ventures has collected any rents becoming due
under any Operating Lease more than 30 days in advance. All rent and other sums
and charges payable by any Operating Lessee under each Operating Lease to which
it is a party are current, no notice of default or termination under any such
Operating Lease is outstanding, no termination event or condition or uncured
default on the part of the Operating Lessee exists under any Operating Lease,
and no event of default has occurred which, with the giving of notice or the
lapse of time or both, would constitute such a default or termination event or
condition or uncured default on the part of the Borrower or its Subsidiaries or
Eligible Joint Ventures or the Operators (as the case may be), subject to such
exceptions which are not reasonably likely to have, in the aggregate, a Material
Adverse Effect. As to all of the Leases, Borrower and each of its Subsidiaries
or Eligible Joint Ventures has performed all of its repair and maintenance
obligations (if any) and, to the best knowledge and belief of Borrower, each
Operating Lessee under each Operating Lease to which it is a party has performed
all of its repair and maintenance obligations, subject to such exceptions which
are not reasonably likely to have, in the aggregate, a Material Adverse Effect.

                  4.26. FF&E Reserves. An FF&E Reserve has been established in
respect of each of the Hotels and the Borrower or its Subsidiaries or Eligible
Joint Ventures have made any contributions to such FF&E Reserve as required by
the terms of the Operating Lease and/or the Management Agreement relating
thereto.

                                    ARTICLE V

                               FINANCIAL COVENANTS

                  As long as any of the Obligations or Revolving Credit
Commitments remain outstanding, unless the requisite Lenders specified in
Section 10.1 otherwise consent in writing, the Borrower agrees with the Lenders
and the Administrative Agent that:

                                      -67-
<PAGE>   74

                  5.1. Unsecured Interest Expense Coverage. The Borrower shall
maintain at the end of each Fiscal Quarter, commencing with the Fiscal Quarter
ending on June 30, 2000, a ratio of (a) Unencumbered NOI to (b) Unsecured
Interest Expense, in each case determined on the basis of the four (4) Fiscal
Quarters ending on the date of determination, of not less than 2.25:1.0.

                  5.2. Fixed Charge Coverage Ratio. The Borrower shall maintain
at the end of each Fiscal Quarter commencing with the Fiscal Quarter ending on
June 30, 2000, a ratio of (a) Adjusted EBITDA to (b) Fixed Charges, in each case
determined on the basis of the four (4) Fiscal Quarters ending on the date of
determination, of not less than 1.75:1.0.

                  5.3. Maintenance of Tangible Net Worth. The Borrower shall
maintain during each Fiscal Quarter a Tangible Net Worth of not less than the
Minimum Tangible Net Worth.

                  5.4. Limitations on Total Indebtedness. The Borrower shall
not, during each Fiscal Quarter on a consolidated basis, permit the Total
Indebtedness (including, without limitation, the Obligations and all Capitalized
Lease Obligations) of the Borrower for borrowed money to exceed 55% of Total
Value.

                  5.5. Limitations on Total Secured Indebtedness. The Borrower
shall not, during each Fiscal Quarter on a consolidated basis, permit the Total
Secured Indebtedness (including, without limitation, secured Obligations and
Capitalized Lease Obligations) of the Borrower, to exceed 25% of Total Value.

                  5.6. Adjusted NOI and Hotels. The Borrower shall ensure that
at the end of each Fiscal Quarter commencing with the Fiscal Quarter ending on
June 30, 2000 at least 50% of the aggregate Adjusted NOI generated by all Hotels
during the preceding four (4) Fiscal Quarters shall be generated by Hotels
wholly owned or leased by the Borrower or its wholly owned Subsidiaries,
provided that, for Hotels owned or leased for less than four (4) Fiscal Quarters
only the Adjusted NOI generated by such Hotels since the date of acquisition of
such Hotel shall be included in calculating such aggregate Adjusted NOI.

                  5.7. Limitations on Recourse Secured Indebtedness. The
Borrower shall not, during each Fiscal Quarter on a consolidated basis, permit
the Recourse Secured Indebtedness (including, without limitation, secured
Obligations and Capitalized Lease Obligations) of the Borrower, to exceed the
lesser of (x) 7.5% of Total Value and (y) $200,000,000.

                                   ARTICLE VI

                              AFFIRMATIVE COVENANTS

                  As long as any of the Obligations or the Revolving Loan
Commitments remain outstanding, unless the Majority Lenders otherwise consent in
writing, the Borrower agrees with the Lenders and the Administrative Agent that:

                  6.1. Compliance with Laws, Etc. The Borrower shall comply, and
shall cause each of its Subsidiaries and Eligible Joint Ventures to comply, in
all material respects with all

                                      -68-
<PAGE>   75

Requirements of Law, Contractual Obligations, commitments, instruments,
licenses, permits and franchises, including, without limitation, all Permits;
provided, however, that the Borrower shall not be deemed in default of this
Section 6.1 if all such non-compliances in the aggregate have no Material
Adverse Effect.

                  6.2. Conduct of Business. The Borrower shall (a) conduct, and
shall cause each of its Subsidiaries and Eligible Joint Ventures to conduct, its
business in the ordinary course and consistent with past practice; (b) use, and
cause each of its Subsidiaries and Eligible Joint Ventures to use, its
reasonable efforts, in the ordinary course and consistent with past practice, to
(i) preserve its business and the goodwill and business of the customers,
advertisers, suppliers and others having business relations with the Borrower or
any of its Subsidiaries or Eligible Joint Ventures, and (ii) keep available the
services and goodwill of its present employees; (c) preserve, and cause each of
its Subsidiaries and Eligible Joint Ventures to preserve, all registered
patents, trademarks, trade names, copyrights and service marks with respect to
its business; and (d) perform and observe, and cause each of its Subsidiaries
and Eligible Joint Ventures to perform and observe, all the terms, covenants and
conditions required to be performed and observed by it under its Contractual
Obligations (including, without limitation, to pay all rent and other charges
payable under any lease and all debts and other obligations as the same become
due), and do, and cause its Subsidiaries and Eligible Joint Ventures to do, all
things necessary to preserve and to keep unimpaired its rights under such
Contractual Obligations; provided, however, that, in the case of each of clauses
(a) through (d), the Borrower shall not be deemed in default of this Section 6.2
if all such failures in the aggregate have no Material Adverse Effect.

                  6.3. Payment of Taxes, Etc. The Borrower shall pay and
discharge, and shall cause each of its Subsidiaries and Eligible Joint Ventures,
as appropriate, to pay and discharge, before the same shall become delinquent,
all lawful governmental claims, taxes, assessments, charges and levies, except
where contested in good faith, by proper proceedings, if adequate reserves
therefor have been established on the books of the Borrower or the appropriate
Subsidiary or Eligible Joint Venture in conformity with GAAP; provided, however,
that the Borrower shall not be deemed in default of this Section 6.3 if all such
non-payments in the aggregate have no Material Adverse Effect.

                  6.4. Maintenance of Insurance. The Borrower shall maintain,
and shall cause each of its Subsidiaries and Eligible Joint Ventures to
maintain, insurance with responsible and reputable insurance companies or
associations in such amounts and covering such risks (including, without
limitation, fire, extended coverage, vandalism, malicious mischief, public
liability, product liability, and business interruption) as is usually carried
by companies engaged in similar businesses and owning similar properties in the
same general areas in which the Borrower or such Subsidiary or Eligible Joint
Venture engages in business or owns properties. The Borrower will furnish to the
Lenders from time to time such information as may be requested as to such
insurance.

                  6.5. Preservation of Existence, Etc. The Borrower shall
preserve and maintain, and shall cause each of its Subsidiaries and Eligible
Joint Ventures to preserve and maintain, its corporate or partnership existence,
rights (charter and statutory) and franchises, except as permitted under Section
7.5.

                                      -69-
<PAGE>   76

                  6.6. Access. The Borrower shall, at any reasonable time and
from time to time, permit the Administrative Agent or any of the Lenders, or any
agents or representatives thereof, at the expense of the Lenders (but such
expense to be reimbursed by the Borrower in the event that any of the following
reveal a material Default by the Borrower), to (a) examine and make copies of
and abstracts from the records and books of account of the Borrower and each of
its Subsidiaries and Eligible Joint Ventures, (b) visit the properties of the
Borrower and each of its Subsidiaries and Eligible Joint Ventures, (c) discuss
the affairs, finances and accounts of the Borrower and each of its Subsidiaries
and Eligible Joint Ventures with any of their respective officers or directors,
and (d) communicate directly with the Borrower's independent certified public
accountants.

                  6.7. Keeping of Books. The Borrower shall keep, and shall
cause each of its Subsidiaries and Eligible Joint Ventures to keep, proper books
of record and account, in which proper entries shall be made of all financial
transactions and the assets and business of the Borrower and each such
Subsidiary or Eligible Joint Venture.

                  6.8. Maintenance of Properties, Etc. The Borrower shall
maintain and preserve, and shall cause each of its Subsidiaries and Eligible
Joint Ventures to maintain and preserve, (i) all of its properties which are
used or useful or necessary in the conduct of its business in good working order
and condition, and (ii) all rights, permits, licenses, approvals and privileges
(including, without limitation, all Permits) which are used or useful or
necessary in the conduct of its business; provided, however, that the Borrower
shall not be deemed in default of this Section 6.8 if all such failures in the
aggregate have no Material Adverse Effect.

                  6.9. Performance and Compliance with Other Covenants. The
Borrower shall perform and comply with, and shall cause each of its Subsidiaries
and Eligible Joint Ventures to perform and comply with, each of the covenants
and agreements set forth in each Contractual Obligation to which it or any of
its Subsidiaries or Eligible Joint Ventures is a party; provided, however, that
the Borrower shall not be deemed in default of this Section 6.9 if all such
failures in the aggregate have no Material Adverse Effect.

                  6.10. Application of Proceeds. The Borrower shall use the
entire amount of the proceeds of the Revolving Credit Loans as provided in
Section 4.18.

                  6.11. Financial Statements. The Borrower shall furnish to the
Lenders:

                  (a) as soon as available and in any event within 45 days after
the end of each of the first three Fiscal Quarters of each Fiscal Year,
consolidated balance sheets of the Borrower and its Subsidiaries and the
Reporting Operating Lessees and any Requested Operating Lessee as of the end of
such quarter and consolidated statements of income, retained earnings and cash
flow of the Borrower and its Subsidiaries and the Reporting Operating Lessees
and any Requested Operating Lessee for the period commencing at the end of the
previous Fiscal Year and ending with the end of such Fiscal Quarter, all
prepared in conformity with GAAP and certified by the chief financial officer or
the treasurer of the Borrower or the chief financial officer of the Reporting
Operating Lessees or a Requested Operating Lessee, as appropriate, as fairly
presenting the financial condition and results of operations of the Borrower and
its

                                      -70-
<PAGE>   77

Subsidiaries and the Reporting Operating Lessees and any Requested Operating
Lessee at such date and for such period, together with (i) a certificate of said
officer stating that no Default or Event of Default has occurred and is
continuing or, if a Default or an Event of Default has occurred and is
continuing, a statement as to the nature thereof and the action which the
Borrower, any Reporting Operating Lessees or any Requested Operating Lessee, as
appropriate, proposes to take with-respect thereto, (ii) a schedule in form
satisfactory to the Administrative Agent of the computations used by the
Borrower or any Reporting Operating Lessee or any Requested Operating Lessee, as
appropriate, in determining compliance with all financial covenants contained
herein, and (iii) a written discussion and analysis by the management of the
Borrower or any Reporting Operating Lessee or any Requested Operating Lessee, as
appropriate, of the financial statements furnished in respect of such Fiscal
Quarter, provided, however, that for purposes of this subparagraph (a) of this
paragraph 6.11 only, "Reporting Operating Lessees" and "Requested Operating
Lessee" shall not include Bass;

                  (b) as soon as available and in any event within 90 days after
the end of each Fiscal Year, consolidated balance sheets of the Borrower and its
Subsidiaries and the Reporting Operating Lessees as of the end of such year and
consolidated statements of income, retained earnings and cash flow of the
Borrower and its Subsidiaries and the Reporting Operating Lessees for such
Fiscal Year, all prepared in conformity with GAAP and certified, in the case of
such consolidated financial statements, in a manner reasonably acceptable to the
Administrative Agent without qualification as to the scope of the audit by
PricewaterhouseCoopers L.L.P. or other independent public accountants of
recognized national standing together with (i) a schedule in form satisfactory
to the Administrative Agent of the computations used by the Borrower in
determining, as of the end of such Fiscal Year, the Borrower's or a Reporting
Operating Lessee's, as appropriate, compliance with all financial covenants
contained herein, and (ii) a written discussion and analysis by the management
of the Borrower or any Reporting Operating Lessee, as appropriate, of the
financial statements furnished in respect of such Fiscal Year, provided,
however, that for purposes of this subparagraph (b) of this paragraph 6.11 only,
"Reporting Operating Lessees" shall not include Bass; and

                  (c) promptly after the same are received by the Borrower, a
copy of each management letter provided to the Borrower by its independent
certified public accountants which refers in whole or in part to any inadequacy,
defect, problem, qualification or other lack of fully satisfactory accounting
controls utilized by the Borrower or any of its Subsidiaries.

                  (d) within 45 days after the end of each Fiscal Quarter, a
Compliance Certificate as of the end of such Fiscal Quarter, executed by the
Chief Financial Officer or Treasurer of the Borrower and if requested by the
Administrative Agent, together with copies (to the extent not already delivered)
of the Hotel Documents in respect of each Hotel indicated by Administrative
Agent.

                  6.12. Reporting Requirements. The Borrower shall furnish to
the Lenders:

                  (a) prior to any Asset Sale generating proceeds in excess of
10% of the Total Value of the Borrower, a notice (i) describing the assets being
sold, (ii) stating the estimated Asset Sale proceeds in respect of such Asset
Sale and (iii) accompanied by a Compliance

                                      -71-
<PAGE>   78

Certificate and a certificate of the Chief Financial Officer or the Treasurer of
the Borrower stating that before and after giving effect to such Asset Sale, the
Borrower shall be in compliance with all of its covenants set forth in the Loan
Documents and that no Default or Event of Default will result from such Asset
Sale.

                  (b) as soon as available and in any event within 90 days after
the end of each Fiscal Year (or earlier if approved earlier by the Board of
Directors of the Borrower), an annual budget of the Borrower and its
Subsidiaries for the succeeding Fiscal Year, displaying on a quarterly basis
anticipated balance sheets, forecasted Capital Expenditures, working capital
requirements, revenues, net income, cash flow and EBITDA, all on a consolidated
basis;

                  (c) promptly and in any event within 30 days after the
Borrower, any of its Subsidiaries or any ERISA Affiliate knows or has reason to
know that any ERISA Event has occurred, a written statement of the Chief
Financial Officer or Treasurer or other appropriate officer of the Borrower
describing such ERISA Event or waiver request and the action, if any, which the
Borrower, its Subsidiaries and ERISA Affiliates propose to take with respect
thereto and a copy of any notice filed by or with the PBGC or the IRS pertaining
thereto;

                  (d) promptly and in any event within 10 days after receipt
thereof, a copy of any adverse notice, determination letter, ruling or opinion
the Borrower, any of its Subsidiaries or any ERISA Affiliate receives from the
PBGC, DOL or IRS with respect to any Plan, other than those which, in the
aggregate, do not have any reasonable likelihood of resulting in a Material
Adverse Change;

                  (e) promptly after the commencement thereof, notice of all
actions, suits and proceedings before any domestic or foreign Governmental
Authority or arbitrator, affecting the Borrower or any of its Subsidiaries,
except those which in the aggregate, if adversely determined, would have no
Material Adverse Effect;

                  (f) promptly and in any event within two Business Days after
the Borrower becomes aware of the existence of (i) any Default or Event of
Default, (ii) any breach or non-performance of, or any default under, any
Operating Lease, Management Agreement or any Contractual Obligation which is
material to the business, prospects, operations or financial condition of the
Borrower and its Subsidiaries taken as one enterprise, or (iii) any Material
Adverse Change or any event, development or other circumstance which has any
reasonable likelihood of causing or resulting in a Material Adverse Change,
telephonic or telecopied notice in reasonable detail specifying the nature of
the Default, Event of Default, breach, non-performance, default, event,
development or circumstance, including, without limitation, the anticipated
effect thereof, which notice shall be promptly confirmed in writing within five
days;

                  (g) promptly after the sending or filing thereof, copies of
all reports which the Borrower sends to its security holders generally, and
copies of all reports and registration statements which the Borrower or any of
its Subsidiaries files with the Securities and Exchange Commission or any
national securities exchange or the National Association of Securities Dealers,
Inc.;

                                      -72-
<PAGE>   79

                  (h) promptly upon the request of any Lender, through the
Administrative Agent, copies of all federal tax returns and reports filed by the
Borrower or any of its Subsidiaries in respect of taxes measured by income
(excluding sales, use and like taxes);

                  (i) promptly and in any event within ten days of the Borrower
or any Subsidiary learning of any of the following, written notice to the
Administrative Agent of any of the following:

                  (i) the Release or threatened Release of any Hazardous
         Material on or from any property owned or leased by the Borrower of any
         of its Subsidiaries or Eligible Joint Ventures and any written order,
         notice, permit, application or other written communication or report
         received by the Borrower, any of its Subsidiaries or Eligible Joint
         Ventures in connection with or relating to any such Release or
         threatened Release, unless such Release or threatened Release is not
         reasonably likely to subject the Borrower or any of its Subsidiaries to
         Environmental Liabilities and Costs of $5,000,000 or more;

                  (ii) any notice or claim to the effect that the Borrower, any
         of its Subsidiaries or any Eligible Joint Ventures is or may be liable
         to any Person as a result of the Release or threatened Release of any
         Hazardous Material into the environment;

                  (iii) receipt by the Borrower, any of its Subsidiaries or
         Eligible Joint Ventures or any Operator of notification that any real
         or personal property of the Borrower or any of its Subsidiaries is
         subject to an Environmental Lien;

                  (iv) any Remedial Action taken by the Borrower or any of its
         Subsidiaries or Eligible Joint Ventures or any other Person on their
         behalf in response to any Hazardous Material on, under or about any
         real property owned or leased by the Borrower or any of its
         Subsidiaries or Eligible Joint Ventures, unless such Remedial Action is
         not reasonably likely to subject the Borrower or any of its
         Subsidiaries or Eligible Joint Ventures to Environmental Liabilities
         and Costs of $5,000,000 or more;

                  (v) receipt by the Borrower or any of its Subsidiaries or
         Eligible Joint Ventures of any notice of violation of, or knowledge by
         the Borrower or any of its Subsidiaries or any Eligible Joint Ventures
         that there exists a condition which may result in a violation by the
         Borrower or any of its Subsidiaries or Eligible Joint Ventures of, any
         Environmental Law, unless such violation is not reasonably likely to
         subject the Borrower or any of its Subsidiaries to Environmental
         Liabilities and Costs of $5,000,000 or more;

                  (vi) any proposed Capital Expenditure by the Borrower or any
         of its Subsidiaries or Eligible Joint Ventures intended or designed to
         implement any existing or additional Remedial Action, unless such
         expenditures are not reasonably likely to exceed $5,000,000;

                  (vii) the commencement of any judicial or administrative
         proceeding or investigation alleging a material violation of any
         Environmental Law; or

                                      -73-
<PAGE>   80

                  (viii) any proposed acquisition of stock, assets or real
         property, or any proposed leasing of property by the Borrower, or any
         of its Subsidiaries or Eligible Joint Ventures, unless such action is
         not reasonably likely to subject the Borrower and its Subsidiaries to
         Environmental Liabilities and Costs to the Borrower in excess of
         $5,000,000;

                  (j) promptly, such additional financial and other information
respecting the financial or other condition of the Borrower or any of its
Subsidiaries or Eligible Joint Ventures or the Operating Lessee or the status or
condition of any real property owned or leased by the Borrower or its
Subsidiaries or Eligible Joint Ventures, or the operation thereof which the
Borrower is entitled to or can otherwise reasonably obtain, as the
Administrative Agent from time to time reasonably requests; and

                  (k) upon written request by any Lender through the
Administrative Agent, a report providing an update of the status of any
Environmental Claim, Remedial Action or any other issue identified in any notice
or report required pursuant to this Section 6.12.

                  6.13. Leases and Operating Leases; Management Agreements and
Licenses. (a) If requested by Administrative Agent, the Borrower shall provide
the Administrative Agent, within 30 days of such request, with a copy of each
Qualified Lease and each Operating Lease (to the extent not already delivered).
The Borrower shall, and shall cause each of its Subsidiaries and Eligible Joint
Ventures to, (i) comply in all material respects with all of their respective
obligations under all of their respective Leases and Operating Leases now or
hereafter held respectively by them with respect to real property, including,
without limitation, the Leases set forth in Schedule 4.22(b); (ii) not modify,
amend, cancel, extend or otherwise change in any materially adverse manner any
of the terms, covenants or conditions of any such Leases or Operating Leases;
(iii) not assign any Leases or sublet any portion of the premises if such
assignment or sublet would have a Material Adverse Effect; (iv) provide the
Administrative Agent with a copy of each notice of default under any Lease or
Operating Lease received by the Borrower or any Subsidiary or Eligible Joint
Venture of the Borrower immediately upon receipt thereof and deliver to the
Administrative Agent a copy of each notice of default sent by the Borrower or
any Subsidiary or Eligible Joint Venture of the Borrower under any Lease or
Operating Lease simultaneously with its delivery of such notice under such Lease
or Operating Lease except to the extent that such defaults, in the aggregate,
would not have a Material Adverse Effect; (v) notify the Administrative Agent,
not later than 30 days prior to the date of the expiration of the term of any
Qualified Lease, of the Borrower's or any Subsidiary or Eligible Joint Venture
of the Borrower's intention either to renew or to not renew any such Qualified
Lease, and, if the Borrower or any Subsidiary or Eligible Joint Venture of the
Borrower intends to renew such Qualified Lease, the terms and conditions of such
renewal; and (vi) maintain each Operating Lease in full force and effect and
enforce the obligations of the Operating Lessee thereunder, in a timely manner
except to the extent that the failure to do so, in the aggregate, would not have
a Material Adverse Effect. Notwithstanding the foregoing, this Section 6.13
shall not apply to (i) Operating Leases with wholly-owned Subsidiaries of the
Borrower and (ii) Operating Lessees that are wholly-owned Subsidiaries of the
Borrower.

                  (b) The Borrower shall take all actions and do all things
within its power or control necessary or required to cause each Operating Lessee
to (i) keep, observe, comply with

                                      -74-
<PAGE>   81

and perform all of the terms, provisions, covenants and undertakings on its part
required by each Operating Lease, each License, each sublease and Management
Agreement relating to any Hotel, and (ii) to enforce the provisions of each
License and each Management Agreement, if the failure to comply or enforce such
agreements would be reasonably likely, in the aggregate, to have a Material
Adverse Effect; provided that this Section 6.13 shall not apply to (i) Operating
Leases with wholly-owned Subsidiaries of the Borrower and (ii) Operating Lessees
that are wholly-owned Subsidiaries.

                  6.14. Intentionally Omitted.

                  6.15. Employee Plans. For each Plan and any related trust
hereafter adopted or maintained by a Loan Party or any of its ERISA Affiliates
intended to qualify under Code Section 125, 401 or 501, the Borrower shall (i)
seek, and cause such of its ERISA Affiliates to seek, and receive determination
letters from the IRS to the effect that such plan is so qualified; and (ii)
cause such plan to be so qualified.

                  6.16. Intentionally Omitted.

                  6.17. Fiscal Year. The Borrower shall maintain as its Fiscal
Year the twelve month period ending on December 31 of each year.

                  6.18. Environmental Matters. (a) The Borrower shall comply and
shall cause each of its Subsidiaries and Eligible Joint Ventures and each
property owned or leased by such parties to comply in all material respects with
all applicable Environmental Laws currently or hereafter in effect.

                  (b) If the Administrative Agent or Lenders at any time have a
reasonable basis to believe that there may be a material violation of any
Environmental Law by the Borrower or any of its Subsidiaries and Eligible Joint
Ventures or any Operator related to any real property owned or leased by the
Borrower or any of its Subsidiaries and Eligible Joint Ventures, or real
property adjacent to such real property, then the Borrower agrees, upon request
from the Administrative Agent, to provide the Administrative Agent, at the
Borrower's expense, with such reports, certificates, engineering studies or
other written material or data as the Administrative Agent or Lenders may
reasonably require so as to reasonably satisfy the Administrative Agent and
Lenders that the Borrower or such Subsidiary, Eligible Joint Venture or real
property owned or leased by them is in material compliance with all applicable
Environmental Laws. Furthermore, Administrative Agent shall have the right to
inspect during normal business hours any real property owned or leased by the
Borrower or any of its Subsidiaries or Eligible Joint Ventures if at any time
Administrative Agent or Lenders have a reasonable basis to believe that there
may be such a material violation of Environmental Law.

                  (c) The Borrower shall, and shall cause each of its
Subsidiaries and Eligible Joint Ventures and each Operating Lessee to, take such
Remedial Action or other action as required by Environmental Laws, as any
Governmental Authority requires, except to the extent contested in good faith
and by proper proceedings, or as is appropriate and consistent with good
business practice.

                                      -75-
<PAGE>   82

                  6.19. REIT Requirements. The Borrower shall operate its
business at all times so as to satisfy all requirements necessary to qualify as
an equity-oriented real estate investment trust under Sections 856 through 860
of the Code. The Borrower will maintain adequate records so as to comply with
all record-keeping requirements relating to the qualification of the Borrower as
an equity-oriented real estate investment trust as required by the Code and
applicable regulations of the Department of the Treasury promulgated thereunder
and will properly prepare and timely file with the IRS all returns and reports
required thereby. The Borrower will request from its shareholders all
shareholder information required by the Code and applicable regulations of the
Department of Treasury promulgated thereunder.

                  6.20. Maintenance of FF&E Reserves. The Borrower shall cause
to be maintained the FF&E Reserves pursuant to the terms of the Operating
Leases.

                  6.21. Intentionally deleted.

                  6.22. Further Assurances. At any time upon the request of the
Administrative Agent, the Borrower will, promptly and at its expense, execute,
acknowledge and deliver such further documents and do such other acts and things
as the Administrative Agent may reasonably request to evidence the Revolving
Credit Loans made hereunder and interest thereon in accordance with the terms of
this Agreement.

                  6.23. Unencumbered Hotel Properties/Financial Covenant
Imbalance. (a) The Borrower shall promptly notify the Administrative Agent in
writing in the event that at any time the Borrower or any of its Subsidiaries
receives or otherwise gains knowledge that (i) any Hotel included in the
calculation of a prior Compliance Certificate as an Unencumbered Hotel Property,
ceases, for any reason whatsoever, to be an Unencumbered Hotel Property or (ii)
a Financial Covenant Imbalance exists, and the amount of the Revolving Credit
Loans which must be repaid to cure such Financial Covenant Imbalance.

                  (b) The Administrative Agent, at the expense of the Lenders,
which expense shall not exceed $10,000 without the consent of the Majority
Lenders (but such expense to be reimbursed by the Borrower in the event that a
Hotel fails to meet requirements for an Unencumbered Hotel Property in any
material respect) may make physical and other verifications of any Hotels
included as Unencumbered Hotel Properties in any reasonable manner and through
any medium that the Administrative Agent considers advisable, and the Borrower
shall furnish all such assistance and information as the Administrative Agent
may require in connection therewith.

                  6.24. Hotel Documents. Within 30 days of the Administrative
Agent's request, Borrower shall deliver to the Administrative Agent Hotel
Documents (to the extent not already delivered) for any Hotel indicated by
Administrative Agent.

                                      -76-
<PAGE>   83

                                   ARTICLE VII

                               NEGATIVE COVENANTS

                  As long as any of the Obligations or any of the Revolving
Credit Commitments remain outstanding, without the written consent of the
Administrative Agent, the Borrower agrees with the Lenders and the
Administrative Agent that:

                  7.1. Restrictions on Wholly-Owned Subsidiaries. (a) The
Borrower shall not create or acquire any direct or indirect wholly-owned
Subsidiary after the Restatement Effective Date unless (i) if such Subsidiary is
a Required Guarantor, concurrently with the creation or acquisition thereof,
such Subsidiary executes and delivers to the Administrative Agent a Subsidiary
Guaranty or (ii) if such Subsidiary is not a Required Guarantor, the
organizational documents and agreement of limited partnership (or equivalent) of
such Subsidiary provide that such Subsidiary shall not incur any Indebtedness
(other than (A) intercompany Indebtedness owed to Borrower and (B) Indebtedness
which is either (x) Non-Recourse Indebtedness or (y) recourse to such Subsidiary
provided such Indebtedness (I) does not exceed 65% of the value of such
Subsidiary's assets which secures such Indebtedness and (II) is secured by all
of the Hotels owned by such Subsidiary).

                  (b) No wholly-owned Subsidiary which is acquired or created
after the Restatement Effective Date may (i) incur any Indebtedness (other than
(A) intercompany Indebtedness owed to the Borrower and (B) Indebtedness which is
either (x) Non-Recourse Indebtedness or (y) recourse to such Subsidiary provided
such Indebtedness (I) does not exceed 65% of the value of such Subsidiary's
assets which secures such Indebtedness and (II) is secured by all of the Hotels
owned by such Subsidiary) or (ii) be subject to any contractual restriction on
such Subsidiary's ability to declare or pay dividends or distribute cash or
other assets to Borrower or any of its Subsidiaries.

                  (c) The Borrower shall not permit any direct or indirect
wholly-owned Subsidiary (other than an Excluded Taxable REIT Subsidiary and
Special Purpose Subsidiary) to own assets (including the assets of such Person's
Subsidiaries) the value of which exceed 2% of Total Value unless such Subsidiary
executes and delivers to the Administrative Agent a Subsidiary Guaranty,
provided, that in the event the aggregate value of the assets of all
wholly-owned Subsidiaries (other than Excluded Taxable REIT Subsidiaries and
Special Purpose Subsidiaries) which are not Guarantors exceed 2% of Total Value
then Borrower shall not permit any direct or indirect wholly-owned Subsidiary
formed thereafter (other than an Excluded Taxable REIT Subsidiary and Special
Purpose Subsidiary) to own assets (including the assets of such Person's
Subsidiaries) unless such Subsidiary executes and delivers to the Administrative
Agent a Subsidiary Guaranty; provided further that in the event that the
aggregate Indebtedness of all Special Purpose Subsidiaries which are not
Guarantors exceeds 25% of Total Value then the Borrower shall not permit any
Special Purpose Subsidiary formed thereafter to own assets unless such Special
Purpose Subsidiary executes and delivers to the Administrative Agent a
Subsidiary Guaranty.

                                      -77-
<PAGE>   84
                  7.2. Operation/Ownership of Hotels. (a) The Borrower shall not
own or lease (directly or indirectly) any Hotels which are not (i) leased to an
Operating Lessee pursuant to an Operating Lease within 90 days of Borrower's (or
a Subsidiary's) acquisition of such Hotel, (ii) managed pursuant to a Management
Agreement and (iii) operated pursuant to and with the benefit of a License,
except to the extent that the aggregate value of any Hotels owned or leased by
the Borrower (directly or indirectly) which are not leased to an Operating
Lessee, managed by a Manager, and operated pursuant to and with the benefit of a
License does not exceed 10% of Total Value.

                  (b) The aggregate value of any Hotels owned or leased by the
Borrower (directly or indirectly) which are not operated under a nationally
recognized brand may not exceed 10% of Total Value.

                  7.3. Lease Obligations. (a) The Borrower shall not create or
suffer to exist, or permit any of its Subsidiaries or Eligible Joint Ventures to
create or suffer to exist, any obligations as lessee for the rental or hire of
real or personal property of any kind under other leases or agreements to lease
entered into otherwise than in the ordinary course of business.

                  (b) The Borrower shall not, and shall not permit any of its
Subsidiaries or Eligible Joint Ventures to, become or remain liable as lessee or
guarantor or other surety with respect to any lease, whether an operating lease
or a Capitalized Lease, of any property (whether real or personal or mixed),
whether now owned or hereafter acquired, which (i) the Borrower or any of its
Subsidiaries or Eligible Joint Ventures has sold or transferred or is to sell or
transfer to any other Person, or (ii) the Borrower or any of its Subsidiaries or
Eligible Joint Ventures intends to use for substantially the same purposes as
any other property which has been or is to be sold or transferred by that entity
to any other Person in connection with such lease.

                  7.4. Restricted Payments. The Borrower, unless otherwise
required in order to maintain FelCor's status as a real estate investment trust
in accordance with the written advice of independent counsel to the Borrower,
shall not, and shall not permit its Subsidiaries to declare or authorize any
dividend payment or other distribution (such dividend or distribution shall be
deemed made when so declared or authorized) of assets, properties, cash, rights,
obligations or securities (other than distributions of Stock or Stock
Equivalents, exclusive of Disqualified Stock) on account or in respect of any of
its Stock or Stock Equivalents or any payment (whether in Disqualified Stock,
Indebtedness, cash or other assets), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, defeasance,
acquisition, cancellation or termination of any such Stock or Stock Equivalents
(collectively, "Restricted Payments"); provided, that, notwithstanding the
foregoing, (i) any Subsidiary may make Restricted Payments, directly or
indirectly, to the Borrower or any Guarantor; (ii) any non-wholly owned
Subsidiary of the Borrower may make Restricted Payments to the holders of its
Stock or Stock Equivalents generally, so long as the Borrower or its respective
Subsidiary which owns the Stock or Stock Equivalents in the Subsidiary paying
such Restricted Payments receives at least its proportionate share thereof
(based upon its relative economic holding of equity interest in the Subsidiary
paying such Restricted Payments and taking into account the relative
preferences, if any, of the various classes of equity interests in such
Subsidiary or the terms of any agreements applicable thereto), and (iii) the
Borrower or any Subsidiary may make payments to purchase Stock or Stock

                                      -78-
<PAGE>   85

Equivalents of any non-wholly owned Subsidiary. In addition, in any Fiscal
Quarter the Borrower may make Restricted Payments which, when added to
Restricted Payments made during the immediately preceding three consecutive
Fiscal Quarters, do not exceed an aggregate amount equal to the lesser of 85% of
the consolidated Adjusted Funds From Operations and 100% of the Free Cash Flow
of the Borrower in each case for the immediately preceding four consecutive
Fiscal Quarters; provided, further, that in addition to the Restricted Payments
permitted above, the Borrower may purchase, redeem or acquire Stock or Stock
Equivalents of the Borrower for an aggregate purchase price not to exceed
$275,000,000 from and after August 20, 1999 through the end of the term of the
Revolving Credit Loans (including any extension thereof) plus net proceeds
(including the fair market value of any property received) of any issuance of
Stock or Stock Equivalents (other than Disqualified Stock) of the Borrower
subsequent to June 30, 1999.

                  7.5. Mergers, Stock Issuances, Asset Sales, Etc. (a) The
Borrower shall not sell, convey, transfer, lease or otherwise dispose of all or
substantially all of its assets or properties, and shall not, and shall not
permit any of its Subsidiaries or Eligible Joint Ventures to, (i) merge with any
Person, or (ii) consolidate with any Person, unless the Borrower or its
Subsidiary or Eligible Joint Venture is the surviving or resulting entity and,
following such merger or consolidation, no Default or Event of Default shall
have occurred.

                  (b) The Borrower shall not and shall not permit any of its
Subsidiaries or Eligible Joint Ventures to effect, enter into, consummate or
suffer to exist any Asset Sale(s) of any Hotel(s) generating proceeds
aggregating more than 25% of the value of the Hotels owned by the Borrower, its
Subsidiaries and Eligible Joint Ventures as of the Restatement Effective Date.

                  (c) The Borrower shall not sell or otherwise dispose of, or
factor at maturity or collection, or permit any of its Subsidiaries or Eligible
Joint Ventures to sell or otherwise dispose of, or factor at maturity or
collection, any accounts receivables.

                  7.6. Restrictions on Construction/Budget Hotels. (a) The
Borrower shall not, and shall not permit any of its Subsidiaries or Eligible
Joint Ventures to (i) engage in the construction of new hotels (provided that
nothing herein shall prohibit expansions to existing Hotels) or (ii) enter into
any commitments or agreements to purchase any Hotels under, or to be under,
original construction (provided that nothing herein shall limit commitments or
agreements for expansions to existing Hotels), pursuant to which (A) such
Persons' obligations, in the aggregate, exceed the lesser of (x) 15% of the
Total Value of the Borrower as of the end of the Fiscal Quarter immediately
preceding the date of any such commitment or agreement and (y) $200,000,000, or
(B) any such Person is or may be liable for, or otherwise assumes, any risks
relating to the development or construction (but not operation) of such Hotel,
whether by way of providing any guaranties of completion, payment of any
construction loans, payment of construction cost overruns, or otherwise.

                  (b) Other than the Borrower's (or its Subsidiary's or
Unconsolidated Entity's) investments in budget hotels, limited service hotels or
extended stay hotels which are in existence as of the Restatement Effective
Date, the Borrower's investments (direct or indirect) in

                                      -79-
<PAGE>   86

any budget hotels, limited service hotels or extended stay hotels, shall not
exceed, in the aggregate, 10% of Total Value.

                  7.7. Change in Nature of Business or in Capital Structure. (a)
The Borrower shall not make, and shall not permit any of its Subsidiaries or
Eligible Joint Ventures to make, any material change in the nature or conduct of
its business as carried on at the Restatement Effective Date.

                  (b) The Borrower shall not make, and shall not permit any of
its Subsidiaries or Eligible Joint Ventures to make, any change in its capital
structure (including, without limitation, in the terms of its outstanding Stock)
or amend its declaration of trust, certificate of incorporation or by-laws or
other equivalent documents other than for changes or amendments which in the
aggregate have no Material Adverse Effect.

                  7.8. Modification of Material Agreements. The Borrower shall
not, and shall not permit any of its Subsidiaries or Eligible Joint Ventures to,
alter, amend, modify, rescind, terminate, supplement or waive any of their
respective rights under, or fail to comply in all material respects with, any of
its material Contractual Obligations unless approved by the Administrative
Agent, which approval shall not be unreasonably withheld, conditioned or
delayed; provided, however, that, with respect to any such failure to comply
with any Contractual Obligation, the Borrower shall not be deemed in default of
this Section 7.8 if all such failures in the aggregate would have no Material
Adverse Effect; and provided, further, that in the event of any breach or event
of default by a Person other than the Borrower or any of its Subsidiaries or
Eligible Joint Ventures, the Borrower shall promptly notify the Administrative
Agent of any such breach or event of default and take all such action as may be
reasonably necessary in order to endeavor to avoid having such breach or event
of default have a Material Adverse Effect.

                  7.9. Accounting Changes. The Borrower shall not make, nor
permit any of its Subsidiaries to make, any change in accounting treatment and
reporting practices or tax reporting treatment, except as required by GAAP or
law and disclosed to the Lenders and the Administrative Agent.

                  7.10. Transactions with Affiliates. The Borrower shall not,
and shall not permit any of its Subsidiaries or Eligible Joint Ventures, to
enter into any transaction or series of related transactions, including, without
limitation, any Asset Sale or the rendering of any service, with any Affiliate
(other than among the Borrower and its wholly-owned Subsidiaries) unless (a) no
Default or Event of Default would occur as a result thereof, and (b) such
transaction is (i) in the ordinary course of the Borrower's or such Subsidiary's
or Eligible Joint Venture's business, and (ii) upon fair and reasonable terms no
less favorable to the Borrower or such Subsidiary or Eligible Joint Venture, as
the case may be, than it would obtain in a comparable arm's length transaction
with a Person which is not an Affiliate.

                  7.11. Adverse or Speculative Transactions. The Borrower shall
not and shall not permit any of its Subsidiaries or Eligible Joint Ventures to
engage in any transaction involving contracts for commodity options or futures
contracts other than Interest Rate Contracts and Alternative Currency Contracts.

                                      -80-
<PAGE>   87

                  7.12. Environmental Matters. (a) The Borrower shall not, and
shall not permit any of its Subsidiaries or Eligible Joint Ventures or any
Operating Lessee, or, to the extent reasonably practicable, any other Person to
dispose of any Hazardous Material by placing it in or on the ground or waters of
any property owned or leased by the Borrower or any of its Subsidiaries or
Eligible Joint Ventures.

                  (b) The Borrower shall not, and shall not permit any of its
Subsidiaries or Eligible Joint Ventures, or, to the extent practicable,
authorize any other Person to, dispose or to arrange for the disposal of any
Hazardous Material on behalf of the Borrower or any of its Subsidiaries or
Eligible Joint Ventures except in material compliance with all applicable
Environmental Laws currently and hereinafter in effect.

                  7.13. Joint Enterprises. Other than investments in (x) Joint
Enterprises in existence as of the Restatement Effective Date and (y) Eligible
Entities, the Borrower's investments (direct or indirect) in Joint Enterprises
shall not exceed, in the aggregate, 15% of Total Value.

                  7.14. Intentionally Omitted.

                  7.15. ERISA Plan Assets. The Borrower shall not and shall not
permit any of its Subsidiaries to have any of their assets become subject to
Title I of ERISA because they constitute "plan assets" within the meaning of the
DOL Regulation Section 2510.3-101 and by reason of an investment in the Borrower
or any Subsidiary.

                  7.16. Limitation on Liens. The Borrower shall not, and shall
not permit any of its Subsidiaries to secure any Indebtedness by a Lien on Stock
owned by the Borrower or any of its Subsidiaries unless contemporaneously
therewith effective provision is made to secure the Obligations equally and
ratably with such Indebtedness for so long as such Indebtedness is secured by
such Lien.

                                  ARTICLE VIII

                                EVENTS OF DEFAULT

                  8.1. Events of Default. Each of the following events shall be
an Event of Default:

                  (a) The Borrower shall fail to pay any principal (including,
without limitation, mandatory prepayments of principal) of, or interest on, any
Revolving Credit Loan, any Unpaid Drawing, any fee, any other amount due
hereunder or under the other Loan Documents or other of the Obligations when the
same becomes due and payable; or

                  (b) Any representation or warranty made or deemed made by any
Loan Party in any Loan Document or by any Loan Party (or any of its officers) in
connection with any Revolving Credit Loan Document shall prove to have been
incorrect in any material respect when made or deemed made; or

                                      -81-
<PAGE>   88

                  (c) Any Loan Party shall fail to perform or observe any other
term, covenant or agreement contained in this Agreement or in any other Loan
Document if such failure shall remain unremedied for thirty days after the
earlier of the date on which (A) a Responsible Officer of the Borrower becomes
aware of such failure or (B) written notice thereof shall have been given to the
Borrower by the Administrative Agent or any Lender; or

                  (d) Any Loan Party or any of its Subsidiaries shall fail to
pay any principal of or premium or interest on any Recourse Indebtedness of such
Loan Party or Subsidiary having a principal amount of $10,000,000 or more
(excluding Indebtedness evidenced by the Revolving Credit Notes and any
Non-Recourse Indebtedness), when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise); or
any other event shall occur or condition shall exist under any agreement or
instrument relating to any such Indebtedness, if the effect of such event or
condition is to accelerate, or to permit the acceleration of, the maturity of
such Indebtedness; or any such Indebtedness shall become or be declared to be
due and payable, or required to be prepaid (other than by a regularly scheduled
required prepayment), or any Loan Party or any of its Subsidiaries shall be
required to repurchase or offer to repurchase such Indebtedness, prior to the
stated maturity thereof; or

                  (e) The Borrower or any of its Significant Subsidiaries shall
generally not pay its debts as such debts become due, or shall admit in writing
its inability to pay its debts generally, or shall make a general assignment for
the benefit of creditors, or any proceeding shall be instituted by or against
the Borrower or any of its Significant Subsidiaries seeking to adjudicate it
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
custodian, receiver, trustee or other similar official for it or for any
substantial part of its property and, in the case of any such proceedings
instituted against the Borrower or any of its Significant Subsidiaries (but not
instituted by it), either such proceedings shall remain undismissed or unstayed
for a period of 60 days or any of the actions sought in such proceedings shall
occur; or the Borrower or any of its Significant Subsidiaries shall take any
corporate action to authorize any of the actions set forth above in this
subsection (e); or

                  (f) Any judgment or order for the payment of money in excess
of $10,000,000 to the extent not fully covered by insurance shall be rendered
against any Loan Party or any of its Subsidiaries and either (i) enforcement
proceedings shall have been commenced by any creditor upon such judgment or
order, or (ii) there shall be any period of 10 consecutive days during which a
stay of enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or

                  (g) An ERISA Event shall occur which, in the reasonable
determination of the Majority Lenders, has a reasonable possibility of a
liability, deficiency or waiver request of the Borrower or any ERISA Affiliate,
whether or not assessed, exceeding $5,000,000; or

                  (h) The Borrower or any of its Subsidiaries shall have entered
into any consent or settlement decree or agreement or similar arrangement with a
Governmental Authority or any judgment, order, decree or similar action shall
have been entered against the Borrower or any of

                                      -82-
<PAGE>   89

its Subsidiaries, in each case based on or arising from the violation of or
pursuant to any Environmental Law, or the generation, storage, transportation,
treatment, disposal or Release of any Hazardous Material and, in connection with
all the foregoing, the Borrower and its Subsidiaries are likely to incur
Environmental Liabilities and Costs in excess of $5,000,000; or

                  (i) There shall occur a Material Adverse Change or an event
which is reasonably likely to have a Material Adverse Effect; or

                  (j) FelCor shall cease, for any reason, to maintain its status
as an equity-oriented real estate investment trust under Sections 856 through
860 of the Code; or

                  (k) FelCor shall cease at any time to be the sole general
partner of FelCor LP; or

                  (l) INTENTIONALLY DELETED

                  (m) Hervey A. Feldman or Thomas J. Corcoran, Jr. shall sell,
transfer or encumber (otherwise than to (i) members of their respective
families, (ii) entities controlled by them, (iii) trusts for the benefit of any
of the foregoing or (iv) a Permitted Transferee) their voting Class A membership
interest in DJONT; or

                  (n) INTENTIONALLY DELETED

                  (o) Any provision of any Subsidiary Guaranty shall for any
reason cease to be valid and binding on any Loan Party party thereto, or any
Loan Party shall so state in writing; or

                  (p) At any time when any Term Loans are outstanding, any
provision of the Pledge Agreement shall for any reason cease to be valid and
binding on any Loan Party thereto, or any Loan Party shall so state in writing.

                  8.2. Remedies. (a) If there shall occur and be continuing any
Event of Default, the Administrative Agent (i) shall at the request, or may with
the consent, of the Majority Lenders by notice to the Borrower, declare the
obligation of each Lender to make Revolving Credit Loans and the Issuing Lender
to issue a Letter of Credit to be terminated, whereupon the same shall forthwith
terminate, and (ii) shall at the request, or may with the consent, of the
Majority Lenders by notice to the Borrower, declare the Revolving Credit Loans,
all interest thereon and all other amounts and Obligations payable under this
Agreement to be forthwith due and payable, whereupon the Notes, all such
interest and all such amounts and Obligations shall become and be forthwith due
and payable, without presentment, demand, protest or further notice of any kind,
all of which are hereby expressly waived by the Borrower; provided, however,
that upon the occurrence of the Event of Default specified in subparagraph
8.1(e) above, (A) the obligation of each Lender to make Revolving Credit Loans
and of the Issuing Lender to issue Letters of Credit shall automatically be
terminated and (B) the Revolving Credit Loans, all such interest and all such
amounts and Obligations shall automatically become and be due and payable,
without presentment, demand, protest or any notice of any kind, all of which are
hereby expressly waived by the Borrower. In addition to the remedies set forth
above, the Administrative Agent may exercise any remedies provided by applicable
law.

                                      -83-
<PAGE>   90

                  (b) If the Administrative Agent exercises any rights or
remedies pursuant to subparagraph 8.2(a), the Administrative Agent shall not,
without the consent of the Majority Lenders, rescind the exercise of said rights
or remedies.

                  8.3. Actions in Respect of Letters of Credit. (a) Upon the
Termination Date, the Borrower shall pay to the Administrative Agent in
immediately available funds at the Administrative Agent's office, for deposit in
a special non-interest-bearing cash collateral account (the "L/C Cash Collateral
Account") to be maintained with and in the name of the Administrative Agent on
behalf of the Lenders at such place as shall be designated by the Administrative
Agent, an amount equal to all Letter of Credit Outstandings.

                  (b) The Borrower hereby pledges, and grants to the
Administrative Agent a Lien on all of its right, title and interest in and to
all funds held in the L/C Cash Collateral Account from time to time, and all
proceeds thereof, as security for the payment of all amounts due and to become
due from the Borrower to the Lenders and the Issuing Lender.

                  (c) The Administrative Agent may, from time to time after
funds are deposited in the L/C Cash Collateral Account, apply funds then held in
the L/C Cash Collateral Account to the payment of any amounts, in such order as
the Administrative Agent may elect, as shall have become or shall become due and
payable by the Borrower to the Issuing Lender or Lenders in respect of the
Letter of Credit Outstandings.

                  (d) Neither the Borrower nor any Person claiming on behalf of
or through the Borrower shall have any right to withdraw any of the funds held
in the L/C Cash Collateral Account. The Borrower agrees that it will not (i)
sell or otherwise dispose of any interest in the L/C Cash Collateral Account or
any funds held therein or (ii) create or permit to exist any Lien upon or with
respect to the L/C Cash Collateral Account or any funds held therein, except as
provided in or contemplated by this Agreement.

                  (e) The Administrative Agent may also exercise, in its sole
discretion, in respect of the L/C Cash Collateral Account, in addition to the
other rights and remedies provided for herein or otherwise available to it, all
the rights and remedies of a secured party upon default under the Uniform
Commercial Code in effect in the State of New York at that time, and the
Administrative Agent may, without notice except as specified below, sell the L/C
Cash Collateral Account or any part thereof in one or more sales, at public or
private sale, at any of the Administrative Agent's offices or elsewhere, for
cash, or credit or for future delivery, and upon such other terms as the
Administrative Agent may deem commercially reasonable. The Borrower agrees that,
to the extent notice of sale shall be required by law, at least ten days' notice
to the Borrower of the time and place of any public sale or the time after which
any private sale is to be made shall constitute reasonable notification. The
Administrative Agent shall not be obligated to make any sale of the L/C Cash
Collateral Account, regardless of notice of sale having been given. The
Administrative Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.

                                      -84-
<PAGE>   91

                  (f) Any cash held in the L/C Cash Collateral Account, and all
cash proceeds received by the Administrative Agent in respect of any sale of,
collection from or other realization upon all or any part of the L/C Cash
Collateral Account, may, in the discretion of the Administrative Agent, then or
at any time thereafter be applied (after all payments provided for in Section
8.3(c), the expiration of all outstanding Letters of Credit and the payment of
any amounts payable pursuant to Section 10.4) in whole or in part by the
Administrative Agent against all or any part of the other Obligations in such
order as the Administrative Agent shall elect. Any surplus of such cash or cash
proceeds held by the Administrative Agent and remaining after the indefeasible
cash payment in full of all of the Obligations shall be paid over to the
Borrower or to whomsoever may be lawfully entitled to receive such surplus.

                                   ARTICLE IX

                            THE ADMINISTRATIVE AGENT

                  9.1. Authorization and Action. (a) Each Lender hereby appoints
and authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to the Administrative Agent by the terms hereof and
thereof, together with such powers as are reasonably incidental thereto. Without
limitation of the foregoing, each Lender hereby authorizes the Administrative
Agent to execute and deliver, and to perform its obligations under, each of the
Loan Documents to which the Administrative Agent is a party, and to exercise all
rights, powers and remedies that the Administrative Agent may have under such
Loan Documents.

                  (b) As to any matters not expressly provided for by this
Agreement and the other Loan Documents (including, without limitation,
enforcement or collection of the Revolving Credit Notes), the Administrative
Agent shall not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully protected
in so acting or refraining from acting) upon the instructions of the Majority
Lenders, and such instructions shall be binding upon all Lenders and all holders
of Revolving Credit Notes; provided, however, that the Administrative Agent
shall not be required to take any action which the Administrative Agent in good
faith believes exposes it to personal liability or is contrary to this Agreement
or applicable law. The Administrative Agent agrees to give to each Lender prompt
notice of (a) each notice and, (b) to the extent the Administrative Agent grants
any consents, approvals, disapprovals or waivers to the Borrower pursuant to the
directions of the Majority Lenders or all of the Lenders as required hereunder,
notice of such consent, approval, disapproval or waiver, given to it by, or by
it to, any Loan Party pursuant to the terms of this Agreement or the other Loan
Documents.

                  9.2. Administrative Agent's Reliance, Etc. Neither the
Administrative Agent, nor any of its Affiliates or any of the respective
directors, officers, agents or employees of the Administrative Agent or any such
Affiliate shall be liable for any action taken or omitted to be taken by it,
him, her or them under or in connection with this Agreement or the other Loan
Documents, except for its, his, her or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, the
Administrative Agent (i) may treat the payee of

                                      -85-
<PAGE>   92

any Revolving Credit Note as the holder thereof until such note has been
assigned in accordance with Section 10.7; (ii) may rely on the Register to the
extent set forth in Section 10.7(c); (iii) may consult with legal counsel
(including, without limitation, counsel to the Borrower or any other Loan
Party), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (iv)
makes no warranty or representation to any Lender and shall not be responsible
to any Lender for any statements, warranties or representations made in or in
connection with this Agreement or any of the other Loan Documents; (v) shall not
have any duty to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of this Agreement or any of the other
Loan Documents on the part of the Borrower or any other Loan Party or to inspect
the property (including, without limitation, the books and records) of the
Borrower or any other Loan Party; (vi) shall not be responsible to any Lender
for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any of the other Loan Documents or any
other instrument or document furnished pursuant hereto or thereto; and (vii)
shall incur no liability under or in respect of this Agreement or any of the
other Loan Documents by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telegram, cable, telex or facsimile
transmission) believed by it to be genuine and signed or sent by the proper
party or parties.

                  9.3. Chase and Affiliates. With respect to its Revolving
Credit Commitments, the Revolving Credit Loans made by it and each Revolving
Credit Note issued to it, and Letters of Credit issued by it, Chase shall have
the same rights and powers under this Agreement as any other Lender and may
exercise the same as though it were not the Administrative Agent; and the term
"Lender" or "Lenders" shall, unless otherwise expressly indicated, include Chase
in its individual capacity. Chase and its affiliates may accept deposits from,
lend money to, act as trustee under indentures of, and generally engage in any
kind of business with, the Borrower or any other Loan Party or any of their
respective Subsidiaries and any Person who may do business with or own
securities of the Borrower or any other Loan Party or any of their respective
Subsidiaries, all as if Chase were not the Administrative Agent and without any
duty to account therefor to the Lenders.

                  9.4. Lender Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon the Administrative Agent or any
other Lender and based on the financial statements referred to in Article IV and
such other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement and other
Loan Documents.

                  9.5. Indemnification. The Lenders agree to indemnify the
Issuing Lender, the Administrative Agent and their Affiliates, and their
respective directors, officers, employees, agents and advisors (to the extent
not reimbursed by the Borrower or other Loan Parties), ratably according to the
respective principal amounts of the Revolving Credit Notes then held by each of
them (or if no Revolving Credit Notes are at the time outstanding, ratably
according to the respective amounts of the aggregate of their Revolving Credit
Commitments), from and against

                                      -86-
<PAGE>   93

any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses and disbursements (including, without
limitation, fees and disbursements of legal counsel) of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against, the
Administrative Agent in any way relating to or arising out of this Agreement or
the other Loan Documents or any action taken or omitted by the Administrative
Agent under this Agreement or the other Loan Documents; provided, however, that
no Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Administrative Agent's or such Affiliate's
gross negligence or willful misconduct. Without limitation of the foregoing,
each Lender agrees to reimburse the Administrative Agent promptly upon demand
for its ratable share of any out-of-pocket expenses (including, without
limitation, fees and disbursements of legal counsel) incurred by the
Administrative Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
its rights or responsibilities under, this Agreement or the other Loan
Documents, to the extent that the Administrative Agent is not reimbursed for
such expenses by the Borrower or another Loan Party.

                  9.6. Successor Agent. The Administrative Agent may resign at
any time by giving written notice thereof to the Lenders and the Borrower and
may be removed by the Super Majority Lenders in the event that the
Administrative Agent commits a willful breach of, or is grossly negligent in the
performance of, its material obligations hereunder. Furthermore, in the event
that at any time the Administrative Agent assigns its entire interest as a
Lender hereunder to an Eligible Assignee as permitted by Section 10.7 hereof,
which Eligible Assignee is not an Affiliate of the Administrative Agent, then
the Administrative Agent shall resign as Administrative Agent. Upon any such
resignation or removal (which shall be effective upon such date as a successor
Agent accepts its appointment), the Majority Lenders shall have the right to
appoint a successor Agent. If no successor Agent shall have been so appointed by
the Majority Lenders, and shall have accepted such appointment, within 30 days
after the retiring Administrative Agent's giving of notice of resignation or the
Super Majority Lenders' removal of the retiring Administrative Agent, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Agent, which shall be a commercial bank organized under the laws of the United
States of America or of any State thereof, having a combined capital and surplus
of at least $500,000,000. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations under this Agreement and the other Loan Documents. After any
retiring Administrative Agent's resignation or removal hereunder as
Administrative Agent, the provisions of this Article IX shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement and the other Loan Documents.

                  9.7. Duties of Other Agents. None of Chase Securities Inc. in
its capacity as Joint Lead Arranger, Joint Book Manager and Syndication Agent,
Bankers Trust Company in its capacity as Joint Lead Arranger, Joint Book Manager
and Documentation Agent, Bank of America, N.A. in its capacity as Documentation
Agent or Wells Fargo Bank, National

                                      -87-
<PAGE>   94

Association, as Co-Documentation Agent, shall have any duties or
responsibilities hereunder in its representative capacity as such.

                                    ARTICLE X

                                  MISCELLANEOUS

                  10.1. Amendments, Etc. (a) No amendment or waiver of any
provision of this Agreement nor consent to any departure by the Borrower
therefrom shall in any event be effective unless the same shall be in writing
and signed by the Majority Lenders, and then any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided that, (x) the Administrative Agent shall have the right to waive
or depart from any of the requirements or criteria contained in the definition
of Qualified Lease and (y) subject to Sections 10.1(b) and (c) below, the
Administrative Agent shall have the right to make non-material waivers of
non-economic provisions of this Agreement or consent to non-material departures
therefrom. The parties hereto agree that any non-material waiver of any
provision of this Agreement or any other Loan Document shall be effective upon
the execution by the party so charged of a written agreement to such effect.

                  (b) Notwithstanding anything set forth in subparagraph (a)
above, no amendment, waiver or consent shall, unless in writing and signed by
all the Lenders do any of the following: (i) waive any of the conditions
specified in Article III except as otherwise provided therein; (ii) increase the
Revolving Credit Commitments of the Lenders or subject the Lenders to any
additional obligations; (iii) reduce the principal of, or interest on, the
Revolving Credit Loans or any fees or other amounts payable hereunder; (iv)
waive or postpone any date fixed for any payment of principal of, or interest
on, the Revolving Credit Loans or any fees or other amounts payable hereunder;
(v) change the percentage of the Revolving Credit Commitments, the aggregate
unpaid principal amount of the Revolving Credit Loans, or the number of Lenders
which shall be required for the Lenders or any of them to take any action
hereunder; (vi) change the definitions of Available Credit, Majority Lenders or
Super Majority Lenders (provided that the foregoing shall not include changes in
any defined terms used in such definitions), (vii) release any Loan Party from
its obligations under any Revolving Credit Note or any Subsidiary Guaranty, or
(viii) amend this Section 10.1; and provided, further, that no amendment, waiver
or consent shall, unless in writing and signed by the Administrative Agent in
addition to the Lenders required above to take such action, affect the rights or
duties of the Administrative Agent under this Agreement or the other Loan
Documents.

                  (c) Notwithstanding anything set forth in subparagraph (a)
above, no amendment, waiver or consent shall, (x) unless in writing and signed
by the Super Majority Lenders do any of the following: (i) waive or amend any of
the covenants specified in Sections 5.1, 5.2, 5.3, 5.4 or 5.5, (ii) change the
definitions of Unencumbered Hotel Property or Eligible Joint Venture (provided
that the foregoing shall not include changes in any defined terms used in such
definitions), (iii) waive payment of any default rate interest pursuant to
Section 2.8(b), or (iv) remove the Administrative Agent for a willful breach of,
or gross negligence in the performance of, its material obligations hereunder
pursuant to Section 9.6 or (y) unless in writing

                                      -88-
<PAGE>   95

and signed by the Majority Lenders change the definitions of Adjusted NOI or
Unencumbered NOI (provided that the foregoing shall not include changes in any
defined terms used in such definitions).

                  (d) Each Lender shall reply promptly, but in any event within
ten (10) Business Days of receipt by such Lender of a request for consent,
approval, disapproval or waiver, from the Administrative Agent (the "Lender
Reply Period"). Unless a Lender shall give written notice to the Administrative
Agent that it objects to consenting, approving, disapproving or waiving any
matter as requested by the Administrative Agent (together with a written
explanation of the reasons behind such objection) within the Lender Reply
Period, such Lender shall be deemed to have consented, approved, disapproved or
waived such matters as specified in the Administrative Agent's request.

                  10.2. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including, without limitation,
telegraphic, telex, telecopy or cable communication) and mailed, telegraphed,
telexed, telecopied, cabled or delivered by hand, if to the Borrower, at its
address at 545 East John Carpenter Freeway, Suite 1300, Irving, Texas 75062
(telecopy number: 972-444-4949) (telephone number: 972-444-4900), Attention:
Treasurer, with a copy to Attention: General Counsel; if to any Lender, at its
Domestic Lending Office specified opposite its name on Schedule II; and if to
the Administrative Agent, at its address at 270 Park Avenue, 31st Floor, New
York, New York 10017 (telecopy number: 212-622-3513) (telephone number:
212-270-9538), Attention Alan Breindel with a copy to One Chase Manhattan Plaza,
8th Floor, New York, New York 10081 (telecopy number: 212-552-5701) (telephone
number: 212-552-7684), Attention Christina Gould; or, as to the Borrower or the
Administrative Agent, at such other address as shall be designated by such party
in a written notice to the other parties and, as to each other party, at such
other address as shall be designated by such party in a written notice to the
Borrower and the Administrative Agent. All such notices and communications
shall, when mailed, telegraphed, telexed, telecopied, cabled or delivered, be
effective when deposited in the mails, delivered to the telegraph company,
confirmed by telex answerback, telecopied with confirmation of receipt,
delivered to the cable company or delivered by hand to the addressee or its
agent, respectively, except that notices and communications to the
Administrative Agent pursuant to Article II or IX shall not be effective until
received by the Administrative Agent.

                  10.3. No Waiver, Remedies. No failure on the part of any
Lender or the Administrative Agent to exercise, and no delay in exercising, any
right hereunder or under any Revolving Credit Note shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right preclude any
other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.

                  10.4. Costs; Expenses; Indemnities. (a) The Borrower agrees to
pay on demand (i) all costs and expenses of the Administrative Agent and its
respective Affiliates in connection with the preparation, execution, delivery,
administration, syndication, modification and amendment of this Agreement, each
of the other Loan Documents and each of the other documents to be delivered
hereunder and thereunder, including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel, accountants, appraisers, consultants or

                                      -89-
<PAGE>   96

industry experts retained by the Administrative Agent with respect thereto and,
as to the Administrative Agent, with respect to advising it as to its rights and
responsibilities under this Agreement and the other Loan Documents, and (ii) all
costs and expenses of the Administrative Agent or any of the Lenders (including,
without limitation, the fees and out-of-pocket expenses of counsel, accountants,
appraisers, consultants or industry experts retained by the Administrative Agent
or any Lender) in connection with the restructuring or enforcement (whether
through negotiation, legal proceedings or otherwise) of this Agreement and the
other Loan Documents.

                  (b) The Borrower agrees to indemnify and hold harmless the
Administrative Agent, each Lender and the Issuing Lender and their respective
Affiliates, and the directors, officers, employees, agents, attorneys,
consultants and advisors of or to any of the foregoing (including, without
limitation, those retained in connection with the satisfaction or attempted
satisfaction of any of the conditions set forth in Article III) (each of the
foregoing being an "Indemnitee") from and against any and all claims, damages,
liabilities, obligations, losses, penalties, actions, judgments, suits, costs,
disbursements and expenses of any kind or nature (including, without limitation,
fees and disbursements of counsel to any such Indemnitee and experts, engineers
and consultants and the costs of investigation and feasibility studies) which
may be imposed on, incurred by or asserted against any such Indemnitee in
connection with or arising out of any investigation, litigation or proceeding,
whether or not any such Indemnitee is a party thereto, whether direct, indirect,
or consequential and whether based on any federal, state or local law or other
statutory regulation, securities or commercial law or regulation, or under
common law or in equity, or on contract, tort or otherwise, in any manner
relating to or arising out of or based upon or attributable to this Agreement,
any other Loan Document, any document delivered hereunder or thereunder, any
Obligation, or any act, event or transaction related or attendant to any
thereof, including, without limitation, (i) arising from any misrepresentation
or breach of warranty under Section 4.18 or any Environmental Claim or any
Environmental Lien or any Remedial Action arising out of or based upon anything
relating to real property owned or leased by the Borrower or any of its
Subsidiaries (collectively, the "Indemnified Matters"); provided, however, that
the Borrower shall not have any obligation under this Section 10.4(b) to an
Indemnitee with respect to any Indemnified Matter caused by or resulting from
the gross negligence or willful misconduct of that Indemnitee, as determined by
a court of competent jurisdiction in a final non-appealable judgment or order.

                  (c) If any Lender receives any payment of principal of, or is
subject to a conversion of, any Eurodollar Rate Loan other than on the last day
of an Interest Period relating to such Loan, as a result of any payment or
conversion made by the Borrower or acceleration of the maturity of the Revolving
Credit Notes pursuant to Section 8.2 or for any other reason, the Borrower
shall, upon demand by such Lender (with a copy of such demand to the
Administrative Agent), to the extent not previously paid to such Lender pursuant
to any other provision hereof, pay to the Administrative Agent for the account
of such Lender all amounts required to compensate such Lender for any additional
losses, costs or expenses which it may reasonably incur as a result of such
payment or conversion, including, without limitation, any loss (including,
without limitation, loss of anticipated profits), cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
such Lender to fund or maintain such Revolving Credit Loan.

                                      -90-
<PAGE>   97

                  (d) The Borrower shall indemnify the Administrative Agent, the
Lenders and the Issuing Lender for, and hold the Administrative Agent, the
Lenders and the Issuing Lender harmless from and against, any and all claims for
brokerage commissions, fees and other compensation made against the
Administrative Agent and the Lenders for any broker, finder or consultant with
respect to any agreement, arrangement or understanding made by or on behalf of
any Loan Party or any of its Subsidiaries in connection with the transactions
contemplated by this Agreement.

                  (e) The Borrower agrees that any indemnification or other
protection provided to any Indemnitee pursuant to this Agreement (including,
without limitation, pursuant to this Section 10.4) or any other Loan Document
shall (i) survive payment of the Obligations and (ii) inure to the benefit of
any Person who was at any time an Indemnitee under this Agreement or any other
Loan Document.

                  10.5. Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default each Lender and the Issuing Lender is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Lender to or for the credit or the account of the Borrower
against any and all of the Obligations now or hereafter existing whether or not
such Lender shall have made any demand under this Agreement or any Note or any
other Loan Document and although such Obligations may be unmatured. Each Lender
agrees promptly to notify the Borrower after any such set-off and application
made by such Lender; provided, however, that the failure to give such notice
shall not affect the validity of such setoff and application. The rights of each
Lender under this Section are in addition to the other rights and remedies
(including, without limitation, other rights of set-off) which such Lender may
have.

                  10.6. Binding Effect. (a) This Agreement shall become
effective as of the Restatement Effective Date and thereafter shall be binding
upon and inure to the benefit of the Borrower, the Administrative Agent, each
Lender and the Issuing Lender and their respective successors and assigns,
except that the Borrower shall not have the right to assign its rights hereunder
or any interest herein without the prior written consent of the Lenders.

                  (b) Notwithstanding anything in this Agreement appearing to
the contrary, this Agreement is executed as an amendment and restatement of the
Fourth Amended Revolving Credit Agreement, and is intended by the parties as a
modification, amendment, renewal and extension (but not as a novation) thereof
and of the indebtedness evidenced thereby, in order to renew and extend such
indebtedness pursuant to this Agreement.

                  10.7. Assignments and Participations. (a) Each Lender and the
Issuing Lender may sell, transfer, negotiate or assign to one or more other
Lenders or Eligible Assignees all or a portion of its Revolving Credit
Commitment, commitment to issue Letters of Credit, the Revolving Credit Loans
and Letter of Credit Outstandings owing to it and the Revolving Credit Notes
held by it and a commensurate portion of its rights and obligations hereunder
and under the other Loan Documents; provided, however, that (i) the aggregate
amount of the Revolving Credit Commitments, Revolving Credit Loans and Letter of
Credit Outstandings being assigned

                                      -91-
<PAGE>   98

pursuant to each such assignment (determined as of the date of the Assignment
and Acceptance with respect to such assignment) shall in no event be less than
the assignor's entire interest, except (x) with the consent of the Borrower and
the Administrative Agent, or (y) during the continuance of an Event of Default,
or (z) a Lender may assign a portion of its Revolving Credit Commitment,
Revolving Credit Loans and Letter of Credit Outstandings to another existing
Lender or Lenders only, provided that the aggregate amount of the Revolving
Credit Commitment, Revolving Credit Loans and Letter of Credit Outstandings
retained by the assignor shall in no event be less than $10,000,000, and (ii)
each assignee hereunder shall also be an Eligible Assignee. The parties to each
assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording, an Assignment and Acceptance, together with the
Revolving Credit Notes (or an Affidavit of Loss and Indemnity with respect to
such Revolving Credit Notes satisfactory to the Administrative Agent) subject to
such assignment. Upon such execution, delivery, acceptance and recording, from
and after the effective date specified in such Assignment and Acceptance, (A)
the assignee thereunder shall become a party hereto and, to the extent that
rights and obligations under the Loan Documents have been assigned to such
assignee pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and thereunder, and (B) the assignor
thereunder shall, to the extent that rights and obligations under this Agreement
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights (except those which survive the payment in full of the Obligations)
and be released from its obligations under the Loan Documents (and, in the case
of an Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under the Loan Documents, such Lender
shall cease to be a party hereto).

                  (b) By executing and delivering an Assignment and Acceptance,
the Lender assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any of
the statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document furnished pursuant thereto or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement or any other Loan Document or any other instrument or document
furnished pursuant hereto or thereto; (ii) such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of any Loan Party or the performance or observance by any
Loan Party of any of its obligations under this Agreement or any other Loan
Document or of any other instrument or document furnished pursuant hereto or
thereto; (iii) such assigning Lender confirms that it has delivered to the
assignee and the assignee confirms that it has received a copy of this Agreement
and each of the Loan Documents together with a copy of the most recent financial
statements delivered by the Borrower to the Lenders pursuant to each of the
clauses of Section 6.11 (or if no such statements have been delivered, the
financial statements referred to in Section 4.5 of this Agreement) and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (iv)
such assignee will, independently and without reliance upon the Administrative
Agent, such assigning Lender or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not

                                      -92-
<PAGE>   99

taking action under this Agreement; (v) such assignee confirms that it is an
Eligible Assignee; (vi) such assignee appoints and authorizes the Administrative
Agent to take such action as agent on its behalf and to exercise such powers
under this Agreement and the other Loan Documents as are delegated to the
Administrative Agent by the terms hereof and thereof, together with such powers
as are reasonably incidental thereto; and (vii) such assignee agrees that it
will perform in accordance with their terms all of the obligations which by the
terms of this Agreement are required to be performed by it as a Lender and if
such assignor was the Issuing Lender, of the Issuing Lender.

                  (c) The Administrative Agent shall maintain at its address
referred to in Section 10.2 a copy of each Assignment and Acceptance delivered
to and accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Revolving Credit Commitments of and principal
amount of the Revolving Credit Loans and Letters of Credit Outstandings owing to
each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Loan Parties, the Administrative Agent, the Issuing Lender and the Lenders may
treat each Person whose name is recorded in the Register as a Lender for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrower, the Administrative Agent, the Issuing Lender or any Lender at any
reasonable time and from time to time upon reasonable prior notice. The
Administrative Agent shall supply to the Borrower promptly after any amendment
thereto, a copy of the amended Register.

                  (d) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender or Issuing Lender and an assignee representing that it is
an Eligible Assignee, together with the Revolving Credit Notes subject to such
assignment, the Administrative Agent shall, if such Assignment and Acceptance
has been completed, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Borrower. Within five Business Days after its receipt of such
notice, the Borrower, at its own expense, shall execute and deliver to the
Administrative Agent, in exchange for such surrendered Revolving Credit Notes,
new Revolving Credit Notes to the order of such Eligible Assignee in an amount
equal to the Revolving Credit Commitments assumed by it pursuant to such
Assignment and Acceptance and, if the assigning Lender has retained Revolving
Credit Commitments hereunder, new Revolving Credit Notes to the order of the
assigning Lender in an amount equal to the Commitments retained by it hereunder.
Such new Revolving Credit Notes shall be dated the same date as the surrendered
Revolving Credit Notes and be in substantially the form of Exhibit A hereto.

                  (e) In addition to the other assignment rights provided in
this Section 10.7, each Lender may assign, as collateral or otherwise, any of
its rights under this Agreement (including, without limitation, rights to
payments of principal or interest on the Revolving Credit Loans) to any Federal
Reserve Bank without notice to or consent of the Borrower or the Administrative
Agent; provided, however, that no such assignment shall release the assigning
Lender from any of its obligations hereunder. The terms and conditions of any
such assignment and the documentation evidencing such assignment shall be in
form and substance satisfactory to the assigning Lender and the assignee Federal
Reserve Bank.

                                      -93-
<PAGE>   100

                  (f) Each Lender may sell participations to one or more banks
or other Persons in or to all or a portion of its rights and obligations under
the Loan Documents (including, without limitation, all or a portion of its
Revolving Credit Commitment, the Revolving Credit Loans and Letters of Credit
Outstandings owing to it and the Revolving Credit Notes held by it). The terms
of such participation shall not, in any event, require the participant's consent
to any amendments, waivers or other modifications of any provision of any Loan
Documents, the consent to any departure by any Loan Party therefrom, or to the
exercising or refraining from exercising any powers or rights which such Lender
may have under or in respect of the Loan Documents (including, without
limitation, the right to enforce the obligations of the Loan Parties), except if
any such amendment, waiver or other modification or consent would reduce the
amount, or postpone any date fixed for, any amount (whether of principal,
interest or fees) payable to such participant under the Loan Documents, to which
such participant would otherwise be entitled under such participation. In the
event of the sale of any participation by any Lender, (i) such Lender's
obligations under the Loan Documents (including, without limitation, its
Revolving Credit Commitment) shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (iii) such Lender shall remain the holder of such Revolving
Credit Notes and Obligations for all purposes of this Agreement, and; (iv) the
Borrower, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement.

                  (g) Each participant shall be entitled to the benefits of
Sections 2.10, 2.12, 2.14 and 10.4 as if it were a Lender; provided, however,
that anything herein to the contrary notwithstanding, the Borrower shall not, at
any time, be obligated to pay to any assignee or participant of any interest of
any Lender, under Section 2.10, 2.12, 2.14 or 10.4, any sum in excess of the sum
which if the Borrower would not at the time of such assignment have been
obligated to pay to such assignor Lender any such amount in respect of such
interest had such assignment not been effected or had such participation not
been sold.

                  (h) Notwithstanding the foregoing provisions of this Section
10.7, the aggregate Revolving Credit Commitments and Revolving Credit Loans of
(i) Chase shall be at least equal to that of any other Lender, (ii) Bankers
Trust Company shall be at least equal to that of any other Lender (other than
Chase), (iii) Bank of America, N.A. shall be at least equal to that of any other
Lender (other than Chase) and (iv) Wells Fargo Bank, National Association shall
be at least equal to that of any other Lender (other than Chase); provided that,
(i) if an Event of Default exists, Chase, Bankers Trust Company, Bank of
America, N.A. and/or Wells Fargo Bank, National Association may assign all or
any portion of their respective Commitments and Revolving Credit Loans and (ii)
if Chase ceases to be Administrative Agent for any reason, Chase may assign all
or any portion of its respective Revolving Credit Commitment and Revolving
Credit Loans.

                  10.8. Governing Law; Severability. This Agreement and the
Revolving Credit Notes and the rights and obligations of the parties hereto and
thereto shall be governed by, and construed and interpreted in accordance with,
the law of the State of New York. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this agreement shall be prohibited by or

                                      -94-
<PAGE>   101

invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.

                  10.9. Submission to Jurisdiction: Service of Process. (a) Any
legal action or proceeding with respect to this Agreement or the Revolving
Credit Notes or any document related thereto may be brought in the courts of the
State of New York or of the United States of America for the Southern District
of New York, and, by execution and delivery of this Agreement, the Borrower
hereby accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. The parties hereto
hereby irrevocably waive any objection, including, without limitation, any
objection to the laying of venue or based on the grounds of forum non
conveniens, which any of them may now or hereafter have to the bringing of any
such action or proceeding in such respective jurisdictions.

                  (b) The Borrower irrevocably consents to the service of
process of any of the aforesaid courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
the Borrower at its address provided herein.

                  (c) Nothing contained in this Section 10.9 shall affect the
right of the Administrative Agent, any Lender or any holder of a Revolving
Credit Note to serve process in any other manner permitted by law or commence
legal proceedings or otherwise proceed against the Borrower in any other
jurisdiction.

                  10.10. Section Titles. The Section titles contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.

                  10.11. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.

                  10.12. Entire Agreement. This Agreement, together with all of
the other Loan Documents and all certificates and documents delivered hereunder
or thereunder, and the agreements referred to in Section 2.3(b) embody the
entire agreement of the parties and supersede all prior agreements and
understandings relating to the subject matter hereof.

                  10.13. Confidentiality. Each Lender and the Administrative
Agent agrees to keep information obtained by it pursuant hereto and the other
Loan Documents confidential and agrees that it will only use such information in
connection with the transactions contemplated by this Agreement and not disclose
any of such information other than (i) to such Lender's or the Administrative
Agent's, as the case may be, Affiliates, employees, representatives and agents
who are or are expected to be involved in the evaluation of such information in
connection with the transactions contemplated by this Agreement and who are
advised of the confidential nature of such information, (ii) to the extent such
information presently is or hereafter becomes available to such Lender or the
Administrative Agent, as the case may be, on a nonconfidential

                                      -95-
<PAGE>   102

basis from a source other than the Borrower, (iii) to the extent disclosure is
required by law, regulation or judicial order or requested or required by bank
regulators or auditors, or (iv) to assignees or participants or potential
assignees or participants who agree to be bound by the provisions of this
sentence.

                  10.14. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO WAIVES
ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN
STATEMENT OR ACTION OF ANY PARTY HERETO.

                  10.15. Joint and Several Obligations. Unless the context
clearly indicates otherwise each covenant, agreement, undertaking, condition or
other matter stated herein as a covenant, agreement, undertaking or matter
involving the Borrower shall be jointly and severally binding upon each of the
parties comprising Borrower.

                                      -96-
<PAGE>   103

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first above written.

                                   FELCOR LODGING TRUST INCORPORATED

                                   By: /s/ ANDREW J. WELCH
                                      -------------------------------
                                      Name: Andrew J. Welch
                                      Title: Vice President & Treasurer

                                   FELCOR LODGING LIMITED PARTNERSHIP

                                   By: FelCor Lodging Trust Incorporated,
                                       its general partner

                                   By: /s/ ANDREW J. WELCH
                                      -------------------------------
                                      Name: Andrew J. Welch
                                      Title: Vice President & Treasurer

                                   THE CHASE MANHATTAN BANK,
                                   individually and as Administrative
                                   Agent

                                   By: /s/ ALAN BREINDEL
                                      -------------------------------
                                      Name: Alan Breindel
                                      Title: Managing Director

                     [SIGNATURES CONTINUE ON FOLLOWING PAGE]

<PAGE>   104

                                   BANKERS TRUST COMPANY, individually
                                   and as Documentation Agent

                                   By: /s/ LAURA S. BURWICK
                                      ---------------------------------
                                      Name: Laura S. Burwick
                                      Title: Principal

                     [SIGNATURES CONTINUE ON FOLLOWING PAGE]

<PAGE>   105

                                   BANK OF AMERICA, N.A., individually
                                   and as Documentation Agent

                                   By: /s/ LESA BUTLER
                                      -------------------------------------
                                      Name: Lesa Butler
                                      Title: Principal

                     [SIGNATURES CONTINUE ON FOLLOWING PAGE]

<PAGE>   106

                                   WELLS FARGO BANK, NATIONAL
                                   ASSOCIATION, individually and as
                                   Co-Documentation Agent

                                   By: /s/ J. KENT HOWARD
                                      -------------------------------------
                                      Name: J. Kent Howard
                                      Title: Senior Vice President

                          REMAINDER OF SIGNATURE PAGES
                             INTENTIONALLY OMITTED

<PAGE>   107

                                                                      Schedule I

                                   COMMITMENTS

<TABLE>
<CAPTION>
     LENDER                               REVOLVING CREDIT COMMITMENT
     ------                               ---------------------------
<S>                                       <C>
The Chase Manhattan Bank                                $ 87,500,000

Bankers Trust Company                                   $ 75,000,000

Bank of America, N.A                                    $ 75,000,000

Wells Fargo Bank, National Association                  $ 75,000,000

The Bank of Nova Scotia                                 $ 50,000,000

Banc One, N.A                                           $ 50,000,000

Credit Lyonnais New York Branch                         $ 50,000,000

Fleet National Bank                                     $ 35,000,000

Bank of Montreal                                        $ 25,000,000

PNC Bank, N.A                                           $ 25,000,000

Erste Bank                                              $ 15,000,000

Hua Nan Commercial Bank Ltd., New York Agency           $ 13,500,000

Chang Hwa Commercial Bank Ltd., New York Branch         $ 12,000,000

Citizens Bank of Massachusetts                          $ 12,000,000

                                                        $600,000,000
</TABLE>

<PAGE>   108

                                                                     Schedule II

                         APPLICABLE LENDING OFFICES AND
                              ADDRESSES FOR NOTICES

<TABLE>
<CAPTION>
     LENDER                 DOMESTIC LENDING OFFICE AND ADDRESS                   EURODOLLAR LENDING OFFICE
                                        FOR NOTICES
     ------                 -----------------------------------                  --------------------------
<S>                           <C>                                                <C>
The Chase Manhattan Bank      1 Chase Manhattan Plaza                            1 Chase Manhattan Plaza
                              8th Floor                                          8th Floor
                              New York, NY  10081                                New York, NY  10081
                              Attn:  Christina Gould                             Attn:  Christina Gould
                              Telecopy: (212) 552-5701                           Telecopy: (212) 552-5701
                              Phone: (212) 552-7684                              Phone: (212) 552-7684

Bank One, N.A.                One Bank One Plaza                                 One Bank One Plaza
                              Chicago, Illinois 60670-0374                       Chicago, Illinois 60670-0374
                              contact: Ken Nelson                                contact: Ken Nelson
                              phone: (312) 732-6403                              phone: (312) 732-6403
                              fax: (312) 732-1117                                fax: (312) 732-1117

Bank of Montreal              111 West Monroe                                    111 West Monroe
                              Chicago, Illinois 60603                            Chicago, Illinois 60603
                              contact: Victor Prieto                             contact: Victor Prieto
                              phone: (312) 293-8112                              phone: (312) 293-8112
                              fax: (312) 293-5830                                fax: (312) 293-5830

The Bank of Nova Scotia       Real Estate Banking                                600 Peachtree Street, N.E.
                              One Liberty Plaza                                  Suite 2700
                              New York, NY 10006                                 Atlanta, GA 30308
                              contact: Bruce Ferguson                            contact: Craig Subryan
                              phone: (212) 225-5158                              fax: (404) 888-8998
                              fax: (212) 225-5166

Bank of America, N.A.         901 Main, 51st Floor                               901 Main, 51st Floor
                              Dallas, TX 75202                                   Dallas, TX 75202
                              contact: Lesa J. Butler                            contact: Lesa J. Butler
                              phone: (214) 209-1506                              phone: (214) 209-1506
                              fax: (214) 209-0085                                fax: (214) 209-0085

Chang Hwa Commercial          One World Trade Center, 32nd Floor                 One World Trade Center, 32nd Floor
Bank Ltd., New York           New York, NY 10048                                 New York, NY 10048
Branch                        Contact: Peter Lien                                Contact: Peter Lien
                              phone: (212) 390-7040                              phone: (212) 390-7040
                              fax: (212) 390-7063                                fax: (212) 390-7063
</TABLE>

<PAGE>   109
                                                                     Schedule II
                                                                          Page 2

<TABLE>
<CAPTION>
     LENDER                 DOMESTIC LENDING OFFICE AND ADDRESS                   EURODOLLAR LENDING OFFICE
                                       FOR NOTICES
     ------                 -----------------------------------                  --------------------------
<S>                           <C>                                                <C>
Citizens Bank of              1 Citizens Plaza                                   1 Citizens Plaza
Massachusets                  Providence, RI 02903-1339                          Providence, RI 02903-1339
                              contact: Lawrence Hershoff                         contact: Lawrence Hershoff
                              phone: (401) 456-7448                              phone: (401) 456-7448
                              fax: (401) 282-4485                                fax: (401) 282-4485

Credit Lyonnais New           1301 Avenue of the Americas                        1301 Avenue of the Americas
York Branch                   New York, NY 10019                                 New York, NY 10019
                              contact: Bruno de Floor                            contact: Bruno de Floor
                              phone: (212) 261-3234                              phone: (212) 261-3234
                              fax: (212) 261-7532                                fax: (212) 261-7532

Bankers Trust Company         130 Liberty Street                                 130 Liberty Street
                              Mail Stop 2257                                     Mail Stop 2257
                              New York, NY 10006                                 New York, NY 10006
                              contact: Wendy Williams                            contact: Wendy Williams
                              phone: (212) 250-4854                              phone: (212) 250-4854
                              fax: (212) 250-7351                                fax: (212) 250-7351

Erste Bank                    280 Park Avenue                                    280 Park Avenue
                              West Building                                      West Building
                              New York, NY 10017                                 New York, NY 10017
                              contact: Paul Judicke                              contact: Paul Judicke
                              phone: (212) 984-5634                              phone: (212) 984-5634
                              fax: (212) 984-5627                                fax: (212) 984-5627

Fleet National Bank           115 Perimeter Center Place, Suite 500              115 Perimeter Center Place, Suite 500
                              Atlanta, Georgia 30346                             Atlanta, Georgia 30346
                              contact: Jeanette Streander                        contact: Jeanette Streander
                              phone: (770) 390-6550                              phone: (770) 390-6550
                              fax: (770) 390-8434                                fax: (770) 390-8434

Hua Nan Commercial Bank       Two World Trade Center, Suite 2846                 Two World Trade Center, Suite 2846
Ltd., New York Agency         New York, NY 10048                                 New York, NY 10048
                              contact: Jeng Fang Geeng                           contact: Jeng Fang Geeng
                              phone: (212) 488-2330                              phone: (212) 488-2330
                              fax: (212) 912-1050                                fax: (212) 912-1050
</TABLE>

<PAGE>   110
                                                                     Schedule II
                                                                          Page 3

<TABLE>
<CAPTION>
     LENDER                 DOMESTIC LENDING OFFICE AND ADDRESS                   EURODOLLAR LENDING OFFICE
                                       FOR NOTICES
     ------                 -----------------------------------                  --------------------------
<S>                           <C>                                                <C>
PNC Bank, N.A.                One PNC Plaza                                      One PNC Plaza
                              Mail Stop: P1-POPP-19-2                            Mail Stop: P1-POPP-19-2
                              249 Fifth Avenue                                   249 Fifth Avenue
                              Pittsburgh, PA 15222-2707                          Pittsburgh, PA 15222-2707
                              contact: Jan Dotchin                               contact: Jan Dotchin
                              phone: (412) 762-3986                              phone: (412) 762-3986
                              fax: (412) 768-5754                                fax: (412) 768-5754

Wells Fargo Bank,             5400 LBJ Freeway                                   2120 East Park Place, Suite 100
National Association          Dallas, TX 75240                                   El Segundo, CA 90245
                              contact: Kent Howard                               contact: Match Fundings Administrator
                              phone: (972) 364-1030                              fax: (310) 335-1014
                              fax: (972) 386-4723
</TABLE>

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