AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 11, 2001

REGISTRATION NOS. 333-63768;
333-63768-01 THROUGH 333-63768-74
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------

AMENDMENT NO. 3

TO
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------

<Table>

MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P. MERISTAR HOSPITALITY FINANCE CORP.
(Exact name of Registrant as specified in its (Exact name of Registrant as specified in its
charter) charter)

DELAWARE DELAWARE
(State or other jurisdiction of incorporation or (State or other jurisdiction of incorporation or
organization) organization)

7011 7011
(Primary Standard Industrial Classification Code (Primary Standard Industrial Classification Code
Number) Number)

75-2648837 52-2321015
(IRS Employer Identification No.) (IRS Employer Identification No.)

1010 WISCONSIN AVENUE, N.W. 1010 WISCONSIN AVENUE, N.W.
WASHINGTON, D.C. 20007 WASHINGTON, D.C. 20007
(202) 965-4455 (202) 965-4455
(Address, including zip code, and telephone (Address, including zip code, and telephone
number, including area code, of Registrant's number, including area code, of Registrant's
principal executive offices) principal executive offices)
</Table>

CHRISTOPHER L. BENNETT, ESQ.
VICE PRESIDENT, LEGAL AND SECRETARY
MERISTAR HOSPITALITY CORPORATION
1010 WISCONSIN AVENUE, N.W.
WASHINGTON D.C. 20007
(202) 965-4455
(Name, address, including zip code, and telephone number, including area code,
of agent for service)

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

Copies to:

RICHARD S. BORISOFF, ESQ.
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019-6064
(212) 373-3000
---------------------

APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC: As soon as practicable after
this Registration Statement becomes effective.

If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
---------------------

THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2

TABLE OF ADDITIONAL REGISTRANTS

<Table>
<Caption>
PRIMARY
STANDARD
JURISDICTION OF I.R.S. INDUSTRIAL
EXACT NAME OF GUARANTOR REGISTRANT INCORPORATION/ EMPLOYEE CLASSIFICATION
AS SPECIFIED IN ITS CHARTER FORMATION IDENTIFICATION NO. CODE NO.
- ---------------------------------- --------------- ------------------ --------------

MeriStar Hospitality Corporation....................... Maryland 75-2648842 6798
MeriStar Acquisition Company, L.L.C.................... Delaware 52-2132724 7011
AGH PSS I, Inc. ....................................... Delaware 52-2157232 7011
AGH UPREIT LLC......................................... Delaware 75-2656872 7011
CapStar Houston SW Partners, L.P....................... Delaware 76-0517194 7011
CapStar Medallion Houston Partners, L.P................ Delaware 76-0548501 7011
CapStar Medallion Dallas Partners, L.P................. Delaware 75-2725881 7011
CapStar Medallion Austin Partners, L.P................. Delaware 74-2852380 7011
CapStar Midland Partners, L.P.......................... Delaware 75-2725879 7011
CapStar Dallas Partners, L.P........................... Delaware 75-2694056 7011
CapStar Mockingbird Partners, L.P...................... Delaware 75-2694059 7011
EquiStar Schaumburg Company, L.L.C..................... Delaware 36-4021251 7011
EquiStar Bellevue Company, L.L.C....................... Delaware 91-1689447 7011
EquiStar Cleveland Company, L.L.C...................... Delaware 34-1808020 7011
EquiStar Latham Company, L.L.C......................... Delaware 52-1964079 7011
EquiStar Virginia Company, L.L.C....................... Delaware 54-1823125 7011
EquiStar Ballston Company, L.L.C....................... Delaware 54-1807527 7011
EquiStar Salt Lake Company, L.L.C...................... Delaware 87-0553144 7011
EquiStar Atlanta GP Company, L.L.C..................... Delaware 52-1964084 7011
EquiStar Atlanta LP Company, L.L.C..................... Delaware 52-1964081 7011
CapStar Washington Company, L.L.C...................... Delaware 52-1999173 7011
CapStar C.S. Company, L.L.C............................ Delaware 84-1360788 7011
CapStar San Pedro Company, L.L.C....................... Delaware 33-0727945 7011
CapStar Louisville Company, L.L.C...................... Delaware 31-1566303 7011
CapStar Lexington Company, L.L.C....................... Delaware 52-2050953 7011
CapStar Oklahoma City Company, L.L.C................... Delaware 73-1526587 7011
CapStar Cherry Hill Company, L.L.C..................... Delaware 52-2018013 7011
CapStar Frazer Company, L.L.C.......................... Delaware 23-2895342 7011
CapStar KC Company, L.L.C.............................. Delaware 43-1760635 7011
CapStar National Airport Company, L.L.C................ Delaware 54-1854024 7011
CapStar Georgetown Company, L.L.C...................... Delaware 52-2039522 7011
CapStar Jekyll Company, L.L.C.......................... Delaware 58-2326478 7011
CapStar Detroit Airport Company, L.L.C................. Delaware 38-3370983 7011
CapStar Tucson Company, L.L.C.......................... Delaware 86-0892459 7011
CapStar Mesa Company, L.L.C............................ Delaware 91-1867278 7011
CapStar Morristown Company, L.L.C...................... Delaware 22-3542416 7011
CapStar Indianapolis Company, L.L.C.................... Delaware 35-2008353 7011
CapStar Chicago Company, L.L.C......................... Delaware 52-2052623 7011
CapStar Windstar Locks Company, L.L.C.................. Delaware 52-2061475 7011
CapStar Hartford Company, L.L.C........................ Delaware 52-2088410 7011
CapStar Cross Keys Company, L.L.C...................... Delaware 52-2077796 7011
CapStar Columbia Company, L.L.C........................ Delaware 52-2077797 7011
CapStar Roland Park Company, L.L.C..................... Delaware 52-2086427 7011
CapStar Forrestal Company, L.L.C....................... Delaware 52-2089189 7011
MeriStar Santa Barbara, L.P............................ Delaware 77-0440856 7011
MeriStar LAJV, L.P..................................... Delaware 94-3288332 7011
MeriStar Cathedral City, L.P........................... Delaware 33-0751707 7011
MeriStar Sanibel Inn Company, L.L.C.................... Delaware 65-0872699 7011
MeriStar Sundial Beach Company, L.L.C.................. Delaware 65-0873007 7011
MeriStar Safety Harbor Company, L.L.C.................. Delaware 59-3540019 7011
MeriStar Seaside Inn Company, L.L.C.................... Delaware 65-0872703 7011
MeriStar Plantation Shopping Center Company, L.L.C..... Delaware 65-0872702 7011
MeriStar Song of the Sea Company, L.L.C................ Delaware 65-0872700 7011
MeriStar Shirley's Parcel Company, L.L.C............... Delaware 65-0872206 7011
MeriStar Sanibel Golf Company, L.L.C................... Delaware 65-0872699 7011
MeriStar Marco Island Company, L.L.C................... Delaware 59-3540022 7011
MeriStar SS Plantation Company, L.L.C.................. Delaware 65-0873008 7011
MeriStar Hotel (Calgary Airport) LLC................... Delaware GST 88511 9826 RT0001 7011
MeriStar Hotel (Vancouver) LLC......................... Delaware 88511 7622 GST 88511 7622 7011
RT0001
</Table>
3

MeriStar Hotel (Surrey) LLC............................ Delaware 88511 0627 GST 88511 0627 7011
RT0001
MeriStar Hotel (Burnaby) LLC........................... Delaware 88511 3621 GST 88511 3621 7011
RT0001
AGH 75 Arlington Heights LLC........................... Delaware 75-2692575 7011
75 Arlington Heights Limited Partnership, L.P.......... Delaware 36-4138496 7011
BCHI Acquisition, L.L.C................................ Delaware 75-2717284 7011
MDV Limited Partnership................................ Texas 75-2547035 7011
183 Hotel Associates, Ltd.............................. Texas 75-2613712 7011
Lake Buena Vista Partners, Ltd......................... Florida 59-3272431 7011
Durham I-85 Limited Partnership........................ Delaware 56-1959721 7011
Cocoa Beach Hotels, Ltd................................ Florida 59-2412469 7011
MeriStar Hotel Lessee, Inc. ........................... Delaware 52-2275057 7011
Hotel Columbia Company................................. Maryland 52-2290279 7011
MeriStar LP, Inc. ..................................... Nevada 52-2101842 7011
3100 Glendale Joint Venture............................ Ohio 75-2660903 7011
</Table>
4

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

SUBJECT TO COMPLETION, DATED SEPTEMBER 11, 2001

PROSPECTUS

MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

MERISTAR HOSPITALITY FINANCE CORP.

OFFER TO EXCHANGE $300,000,000 OF THEIR 9% SENIOR NOTES DUE 2008 AND
$200,000,000 OF THEIR 9 1/8% SENIOR NOTES DUE 2011

TERMS OF THE EXCHANGE OFFER

- It will expire at 5:00 p.m., New York City time, on 2001,
unless we extend it.

- If all the conditions to this exchange offer are satisfied, we will
exchange all initial notes that are validly tendered and not withdrawn.

- You may withdraw your tender of initial notes at any time before the
expiration of this exchange offer.

- The exchange notes that we will issue in the exchange offer will be
substantially identical to your initial notes except that, unlike the
initial notes, the exchange notes will have no transfer restrictions or
registration rights.

- The exchange notes are new securities with no established market for
trading.

BEFORE PARTICIPATING IN THIS EXCHANGE OFFER, PLEASE REFER TO THE SECTION
IN THIS PROSPECTUS ENTITLED "RISK FACTORS" COMMENCING ON PAGE 16.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

The date of this prospectus is , 2001.
5

TABLE OF CONTENTS

<Table>
<Caption>
PAGE
----

Summary..................................................... 1
Risk Factors................................................ 16
Use of Proceeds............................................. 33
Capitalization.............................................. 34
Unaudited Pro Forma Combined Financial Information.......... 35
Selected Historical Consolidated Financial Information...... 70
Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 76
Business.................................................... 85
Management.................................................. 95
Certain Relationships and Related Party Transactions........ 103
Principal Securityholders................................... 103
The Exchange Offer.......................................... 105
Description of the Exchange Notes........................... 116
United States Federal Tax Considerations.................... 153
ERISA Considerations........................................ 157
Plan of Distribution........................................ 158
Legal Matters............................................... 159
Experts..................................................... 159
Available Information....................................... 160
Incorporation by Reference.................................. 161
Index to Financial Statements............................... F-1
</Table>

i
6

SUMMARY

This summary highlights information contained elsewhere in this prospectus.
Because it is a summary, it does not contain all of the information that you
should consider before participating in the exchange offer. You should read this
entire prospectus carefully, including the section entitled "Risk Factors"
beginning on page 16 and the financial statements, including the notes to those
financial statements, included elsewhere in this prospectus.

Unless the context otherwise requires, the words "we," "our," "us," and
"MeriStar LP" refer to MeriStar Hospitality Operating Partnership, L.P. and its
direct and indirect subsidiaries, prior to giving effect to the FelCor merger
described below. The term "initial notes" refers to the 9% Senior Notes due 2008
and the 9 1/8% Senior Notes due 2011 that were issued on January 26, 2001. The
term "exchange notes" refers to the 9% Senior Notes due 2008 and the 9 1/8%
Senior Notes due 2011 being offered by this prospectus. The term "notes" refers
to the initial notes and the exchange notes, collectively.

ABOUT OUR COMPANY

MeriStar Hospitality Operating Partnership, L.P. owns a portfolio of
primarily upscale, full-service hotels, diversified geographically as well as by
franchise and brand affiliations, in the United States and Canada. We are the
operating partnership of MeriStar Hospitality Corporation, a real estate
investment trust that operates all of its business through us. MeriStar
Hospitality Corporation, which we also refer to as MeriStar, is our sole general
partner and controls us. As of June 30, 2001, we owned 113 hotels with 28,877
rooms. The hotels are located in major metropolitan areas or rapidly growing
secondary markets and are well located within these markets. A majority of the
hotels are operated under nationally recognized brand names such as Hilton(R),
Sheraton(R), Westin(R), Marriott(R), Radisson(R), Doubletree(R) and Embassy
Suites(R).

We believe that the upscale, full-service segment of the lodging industry
is the most attractive segment in which to own hotels. The upscale, full-service
segment is attractive for several reasons. First, the real estate market has
recently experienced a significant slowdown in the construction of upscale,
full-service hotels. Second, upscale, full-service hotels appeal to a wide
variety of customers, thus reducing the risk of decreasing demand from any
particular customer group. Additionally, these hotels have particular appeal to
both executives and upscale leisure travelers, customers who are generally less
price sensitive than travelers who use limited-service hotels.

Our business strategy is to opportunistically acquire hotel properties and
related businesses with the potential for cash flow growth and to renovate and
reposition each hotel according to the characteristics of the hotel and its
market.

MeriStar Hospitality Corporation and our company were created on August 3,
1998, when American General Hospitality Corporation, a corporation operating as
a real estate investment trust, and its associated entities merged with CapStar
Hotel Company and its associated entities. MeriStar Hospitality Finance Corp. is
a wholly-owned, special purpose subsidiary of our company that was created on
January 23, 2001. The principal executive office of the issuers is located at
1010 Wisconsin Avenue, N.W., Washington, D.C. 20007. Our telephone number is
(202) 965-4455.

ACQUISITION STRATEGY

We focus our attention on investments in hotels located in markets with
economic, demographic and supply dynamics favorable to hotel owners. Through our
extensive due diligence process, we select those acquisition targets where we
believe selective capital improvements and well selected third-party management
will increase the hotel's ability to attract key demand segments, enhance hotel
operations and increase long-term value. In order to evaluate the relative
merits of each investment opportunity, our senior management, together with
MeriStar Hotels & Resorts, Inc., the company that manages nearly all of our
hotels, creates detailed plans covering all areas of renovation and operation.
These plans serve as the basis for our acquisition decisions and guide
subsequent renovation and operating plans, which will be carried out by a
third-party hotel operator.

1
7

FRANCHISES

We employ a flexible strategy in selecting brand names based on a
particular hotel's market environment and the hotel's unique characteristics.
Accordingly, we use various national trade names under licensing arrangements
with national franchisors.

MERGER WITH FELCOR

On May 9, 2001, we and MeriStar Hospitality Corporation entered into a
merger agreement with FelCor Lodging Trust Incorporated, which we also refer to
as FelCor, and FelCor Lodging Limited Partnership, which we also refer to as
FelCor LP. Under the merger agreement, MeriStar Hospitality Corporation will
merge with and into FelCor, which we refer to as the merger, and a wholly owned
subsidiary of FelCor LP will merge with and into our company, which we refer to
as the partnership merger. Upon completion of these mergers, FelCor LP will
become a co-obligor under the notes, and the notes will be guaranteed by the
guarantors under FelCor's senior credit facility. FelCor is a REIT that has
ownership interests in 185 hotels at June 30, 2001, with nearly 50,000 rooms and
suites. Of these hotels, FelCor has a 100% ownership interest in 152 hotels, a
90% or greater interest in entities owning seven hotels, a 60% interest in
entities owning two hotels and a 50% interest in separate entities owning 24
hotels. Fifteen of FelCor's hotels have been designated as held for sale. We
expect the mergers to be completed early in the fourth quarter of 2001. For more
information relating to the mergers, which we refer to together as the FelCor
merger, please refer to the documents attached as exhibits to the registration
statement of which this prospectus is a part.

Following the FelCor merger, on a consolidated basis, we and FelCor LP will
have ownership interests in 298 hotels with approximately 78,000 rooms located
in 39 states and Canada, including 54 hotels in Texas, 37 hotels in Florida and
32 hotels in California.

2
8

SUMMARY OF THE EXCHANGE OFFER

MeriStar Hospitality Operating Partnership and MeriStar Hospitality
Finance, the issuers, are offering to exchange $300,000,000 aggregate principal
amount of their 9% Senior Notes due 2008 and $200,000,000 aggregate principal
amount of their 9 1/8% Senior Notes due 2011 for like amounts of their existing
9% Senior Notes due 2008 and 9 1/8% Senior Notes due 2011. The form and terms of
the exchange notes are the same as the form and terms of the initial notes,
except that the exchange notes will be registered under the Securities Act, will
not bear legends restricting their transfer and will not be entitled to
registration rights under our registration rights agreements. The exchange notes
will evidence the same debt as the initial notes, and both the initial notes and
the exchange notes will be governed by the same indenture.

THE EXCHANGE OFFER.................. The issuers will exchange their
exchange notes for a like aggregate
principal amount at maturity of their
initial notes. In order to exchange
your initial notes, you must properly
tender them to the issuers and we must
accept your tender. The issuers will
exchange all outstanding initial notes
that are validly tendered and not
validly withdrawn.

EXPIRATION DATE..................... This exchange offer will expire at 5:00
p.m., New York City time, on
, 2001, unless the issuers
decide to extend it.

CONDITIONS TO THE EXCHANGE OFFER.... The issuers will complete this exchange
offer unless the exchange offer is not
permissible under applicable law or
Securities and Exchange Commission
policy.

Please refer to the section in this
prospectus entitled "The Exchange
Offer -- Terms of the Exchange
Offer -- Conditions to the Exchange
Offer."

PROCEDURES FOR TENDERING INITIAL
NOTES............................... To participate in this exchange offer,
you must complete, sign and date the
letter of transmittal or its facsimile
and transmit it, together with your
initial notes to be exchanged and all
other documents required by the letter
of transmittal, to U.S. Bank Trust
National Association, as exchange
agent, at its address indicated under
"The Exchange Offer -- Terms of the
Exchange Offer -- Exchange Agent." In
the alternative, you can tender your
initial notes by book-entry delivery
following the procedures described in
this prospectus. If your initial notes
are registered in the name of a broker,
dealer, commercial bank, trust company
or other nominee, you should contact
that person promptly to tender your
initial notes in this exchange offer.
For more information on tendering your
notes, please refer to the section in
this prospectus entitled "The Exchange
Offer -- Terms of the Exchange
Offer -- Procedures for Tendering
Initial Notes."

GUARANTEED DELIVERY PROCEDURES...... If you wish to tender your initial
notes and you cannot get the required
documents to the exchange agent on
time, you may tender your initial notes
by using the guaranteed delivery
procedures described under the section
of this prospectus entitled "The

3
9

Exchange Offer -- Terms of the Exchange
Offer -- Procedures for Tendering
Initial Notes -- Guaranteed Delivery
Procedure."

WITHDRAWAL RIGHTS................... You may withdraw the tender of your
initial notes at any time before 5:00
p.m., New York City time, on the
expiration date of the exchange offer.
To withdraw the tender, you must send a
written or facsimile transmission
notice of withdrawal to the exchange
agent at its address indicated under
the "The Exchange Offer -- Terms of the
Exchange Offer -- Exchange Agent"
before 5:00 p.m., New York City time,
on the expiration date of the exchange
offer.

ACCEPTANCE OF INITIAL NOTES AND
DELIVERY OF EXCHANGE NOTES.......... If all the conditions to the completion
of this exchange offer are satisfied,
the issuers will accept any and all
initial notes that are properly
tendered in this exchange offer on or
before 5:00 p.m., New York City time,
on the expiration date. The issuers
will return any initial note that they
do not accept for exchange to you
without expense as promptly as
practicable after the expiration date.
The issuers will deliver the exchange
notes to you as promptly as practicable
after the expiration date and
acceptance of your initial notes for
exchange. Please refer to the section
in this prospectus entitled "The
Exchange Offer -- Terms of the Exchange
Offer -- Acceptance of Initial Notes
for Exchange; Delivery of Exchange
Notes."

FEDERAL INCOME TAX CONSIDERATIONS
RELATING TO THE EXCHANGE OFFER...... Exchanging your initial notes for
exchange notes will not be a taxable
event to you for United States federal
income tax purposes. Please refer to
the section of this prospectus entitled
"United States Federal Tax
Considerations."

EXCHANGE AGENT...................... U.S. Bank Trust National Association is
serving as exchange agent in this
exchange offer.

FEES AND EXPENSES................... The issuers will pay all expenses
related to this exchange offer. Please
refer to the section of this prospectus
entitled "The Exchange Offer -- Terms
of the Exchange Offer -- Fees and
Expenses."

USE OF PROCEEDS..................... The issuers will not receive any
proceeds from the issuance of the
exchange notes. The issuers are making
this exchange offer solely to satisfy
their obligations under their
registration rights agreements.

CONSEQUENCES TO HOLDERS WHO DO NOT
PARTICIPATE IN THE EXCHANGE OFFER... If you do not participate in this
exchange offer:

- you will not necessarily be able to
require the issuers to register your
initial notes under the Securities
Act,

4
10

- you will not be able to resell, offer
to resell or otherwise transfer your
initial notes unless they are
registered under the Securities Act
or unless you resell, offer to resell
or otherwise transfer them under an
exemption from the registration
requirements of, or in a transaction
not subject to, the Securities Act,
and

- the trading market for your initial
notes will become more limited to the
extent other holders of initial notes
participate in the exchange offer.

RISK FACTORS........................ Please refer to the section in this
exchange offer entitled "Risk
Factors -- Your failure to participate
in the exchange offer will have adverse
consequences."

5
11

SUMMARY OF TERMS OF THE EXCHANGE NOTES

ISSUERS............................. MeriStar Hospitality Operating
Partnership, L.P. and MeriStar
Hospitality Finance Corp. Upon
completion of the FelCor merger, FelCor
Lodging Limited Partnership will become
a co-obligor under the exchange notes.

SECURITIES OFFERED.................. $300,000,000 aggregate principal amount
of 9% Senior Notes due 2008.

$200,000,000 aggregate principal amount
of 9 1/8% Senior Notes due 2011.

The form and terms of the exchange
notes are the same as the form and
terms of the initial notes, except that
the exchange notes will be registered
under the Securities Act, will not bear
legends restricting their transfer and
will not be entitled to registration
rights under our registration rights
agreements. The exchange notes will
evidence the same debt as the initial
notes, and both the initial notes and
the exchange notes will be governed by
the same indenture.

MATURITY DATE....................... January 15, 2008 for the 2008 exchange
notes.

January 15, 2011 for the 2011 exchange
notes.

INTEREST PAYMENT DATES.............. January 15 and July 15, of each year,
commencing January 15, 2002.

MANDATORY REDEMPTION................ None.

GUARANTEES.......................... The issuers' payment obligations under
the exchange notes will be
unconditionally guaranteed on a senior,
unsecured basis by MeriStar Hospitality
Corporation and by all of the
subsidiaries that guarantee our payment
obligations under our senior secured
credit facility. Under some future
circumstances, we or MeriStar
Hospitality Corporation may be required
to cause one or more other subsidiaries
to guarantee the exchange notes on a
senior, unsecured basis. The guarantees
will rank equally with all of the
guarantors' existing and future
unsecured senior debt and senior to all
of the guarantors' subordinated debt.
After the FelCor merger, we anticipate
that the issuers and the guarantors
will guarantee all of the outstanding
indebtedness under FelCor's credit
facility and FelCor LP's senior notes.
In addition, the subsidiaries of FelCor
and FelCor Lodging Limited Partnership
that currently guarantee FelCor's
senior credit facility will guarantee
the exchange notes. The guarantees will
be effectively subordinated to all of
the guarantors' secured debt. For more
information about the guarantees,
please refer to the section of this
prospectus entitled "Description of the
Exchange Notes -- Guarantees."

6
12

OPTIONAL REDEMPTION................. Before January 15, 2004, the issuers
may redeem up to 35% of the aggregate
principal amount of the exchange notes
of a series with the proceeds of one or
more public offerings of the common
equity of MeriStar Hospitality
Corporation at a redemption price equal
to 109% of the principal amount, in the
case of the exchange notes due 2008,
and 109% of the principal amount, in
the case of the exchange notes due
2011, in each case plus accrued and
unpaid interest and liquidated damages,
if any, to the date of redemption;
provided that at least 65% of the
original principal amount of the notes
of the applicable series remains
outstanding immediately after each such
redemption. Please refer to the section
of this prospectus entitled
"Description of the Exchange
Notes -- Optional Redemption."

CHANGE OF CONTROL................... In the event of a change of control of
our company or MeriStar Hospitality
Corporation, you will have the right to
require us to purchase all or any part
of your exchange notes at a purchase
price in cash equal to 101% of the
aggregate principal amount of the
exchange notes, plus accrued and unpaid
interest and liquidated damages, if
any, to the date of purchase. Please
refer to the section of this offering
memorandum entitled "Description of the
Exchange Notes -- Repurchase at the
Option of Holders -- Change of
Control." The FelCor merger will
constitute a change of control under
the indenture.

RANKING............................. The exchange notes will be the issuers'
general unsecured, senior obligations
and will rank equally with all of the
issuers' existing and future unsecured
senior debt and senior to all of the
issuers' subordinated debt. The
exchange notes will be effectively
subordinated to all of our and our
subsidiaries' secured debt and to all
other debt of our non-guarantor
subsidiaries, including without
limitation trade payables in the
ordinary course.

At June 30, 2001, we, MeriStar
Hospitality Corporation and our
respective subsidiaries on a
consolidated basis, had approximately
$1.7 billion of indebtedness
outstanding, including $0.9 billion of
senior debt. Of that $1.7 billion of
indebtedness, our non-guarantor
subsidiaries had $375.1 million of
indebtedness. On a pro forma basis as
of June 30, 2001, after giving effect
to the FelCor merger, we, MeriStar
Hospitality Corporation and our
respective subsidiaries on a
consolidated basis, would have had
approximately $3.6 billion of
indebtedness outstanding, including
$1.9 billion of senior debt. Of that
$3.6 billion of indebtedness, our non-
guarantor subsidiaries would have had
$950.1 million of indebtedness.

7
13

COVENANTS........................... The indenture under which the exchange
notes will be issued limits our ability
and the ability of MeriStar Hospitality
Corporation and our respective
restricted subsidiaries to:

- incur indebtedness and issue
disqualified stock or, in the case of
subsidiaries, preferred stock;

- pay dividends or other distributions;

- repurchase equity interests and
subordinated indebtedness, or make
other specified restricted payments;

- consummate specific asset sales;

- enter into certain transactions with
affiliates;

- make investments;

- create or incur some liens, subject
to the consent of our lenders under
our senior secured credit agreement;
or

- merge or consolidate with any other
person or sell, assign, transfer,
lease, convey or otherwise dispose of
all or substantially all of our
assets.

All of these limitations and
prohibitions have a number of important
qualifications and exceptions. Please
refer to the section of this offering
memorandum entitled "Description of the
Exchange Notes -- Covenants" and
"-- Repurchase at the Option of
Holders -- Asset Sales."

FALL-AWAY COVENANTS................. Under the indenture governing the
exchange notes, in the event, and only
for so long as, the exchange notes are
rated investment grade and no default
or event of default has occurred and is
continuing, many of the covenants
described above will not be applicable
to us and our restricted subsidiaries.

TRADING............................. The exchange notes are new securities,
and no established market for them
currently exists. We cannot assure you
that a market for the exchange notes
will develop or be liquid. The initial
notes are currently eligible for
trading in the Private Offerings,
Resale and Trading through Automatic
Linkage, or PORTAL, system. Following
the commencement of the exchange offer,
you may continue to trade the initial
notes in the PORTAL market. However,
the exchange notes will not be eligible
for trading in this market.

RISK FACTORS........................ You should carefully consider all of
the information contained in this
prospectus and, in particular, you
should evaluate the specific factors
listed under "Risk Factors" on page 16
for risks associated with the exchange
offer.

8
14

SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA

The following table sets forth unaudited pro forma condensed combined
financial data for MeriStar LP and FelCor LP as a combined entity and for
MeriStar and FelCor as a combined entity, in each case giving effect to the
merger and partnership merger as if they had occurred on the dates indicated and
after giving effect to the pro forma adjustments. The unaudited pro forma
condensed combined operating data are presented as if the merger and partnership
merger had been completed on January 1, 2000. The unaudited pro forma condensed
combined balance sheet data at June 30, 2001 is presented as if the merger and
partnership merger had occurred on June 30, 2001. In the opinion of our
management, all adjustments necessary to reflect the effects of these
transactions have been made. The merger and partnership merger will be accounted
for under the purchase method of accounting as provided by Financial Accounting
Standards No. 141. Based on FelCor's current estimate of value for the MeriStar
assets to be acquired in the amount of approximately $3.0 billion and
liabilities to be assumed in the amount of approximately $1.9 billion, no
goodwill will be recorded for this transaction. MeriStar LP and MeriStar will be
the acquired entities, and therefore, the unaudited pro forma condensed combined
financial statements are those of FelCor LP and FelCor.

The unaudited pro forma condensed combined financial data should be read
together with the respective historical audited and unaudited consolidated
financial statements and financial statement notes of MeriStar LP and MeriStar
and of FelCor LP and FelCor included in or incorporated by reference into this
prospectus. See "Available Information" on page 160. The unaudited pro forma
condensed combined financial data is presented for comparative purposes only and
are not necessarily indicative of what the actual combined results of operations
of MeriStar LP and FelCor LP, and MeriStar and FelCor, would have been for the
periods presented, nor does this data purport to represent the results of future
periods. See "Unaudited Pro Forma Combined Financial Information" beginning on
page 35.

FELCOR LODGING LIMITED PARTNERSHIP

<Table>
<Caption>
PRO FORMA
(UNAUDITED)
--------------------------
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
2001 2000(1)
---------- ------------
(IN THOUSANDS, EXCEPT PER
UNIT AND RATIO DATA)

STATEMENT OF OPERATIONS DATA:
Total revenues............................................ $1,412,155 $2,864,452
Net income before extraordinary items..................... $ 91,603 $ 159,171
Net income before extraordinary items applicable to common
unitholders............................................ $ 73,771 $ 123,424
Diluted earnings per unit data:
Net income before extraordinary items applicable to
common unitholders.................................... $ 0.73 $ 1.21
Weighted average common units outstanding.............. 101,352 101,839
OTHER DATA:
Funds From Operations(2).................................. $ 223,177 $ 451,302
EBITDA(3)................................................. $ 396,600 $ 803,172
Ratio of earnings to fixed charges(4)..................... 1.6x 1.5x
</Table>

9
15

<Table>
<Caption>
PRO FORMA
(UNAUDITED)
--------------
JUNE 30,
2001
--------------
(IN THOUSANDS)

BALANCE SHEET DATA:
Investment in hotels, net of accumulated depreciation....... $6,516,043
Total assets................................................ $7,146,928
Debt........................................................ $3,648,693
Redeemable units............................................ $ 301,983
Partners' capital........................................... $2,701,258
</Table>

FELCOR LODGING TRUST INCORPORATED

<Table>
<Caption>
PRO FORMA
(UNAUDITED)
-------------------------
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
2001 2000(1)
---------- ------------
(IN THOUSANDS, EXCEPT PER
SHARE DATA)

STATEMENT OF OPERATIONS DATA:
Total revenues............................................ $1,412,155 $2,864,452
Net income before extraordinary items..................... $ 82,075 $ 145,657
Net income before extraordinary items applicable to common
shareholders........................................... $ 64,525 $ 110,475
Diluted earnings per share data:
Net income before extraordinary items applicable to
common shareholders................................... $ 0.73 $ 1.21
Weighted average common shares outstanding............. 88,818 91,282
OTHER DATA:
Funds From Operations(2).................................. $ 223,177 $ 451,302
EBITDA(3)................................................. $ 396,600 $ 803,172
</Table>

<Table>
<Caption>
PRO FORMA
(UNAUDITED)
--------------
JUNE 30,
2001
--------------
(IN THOUSANDS)

BALANCE SHEET DATA:
Investment in hotels, net of accumulated depreciation....... $6,516,043
Total assets................................................ $7,146,928
Debt........................................................ $3,648,693
Minority interest in FelCor Partnership..................... $ 333,475
Total shareholder's equity.................................. $2,669,766
</Table>

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

(1) In the second quarter of 2000, FelCor recorded a $63 million loss related to
the decision to sell certain non-strategic hotel assets, which is reflected
in the income statements presented for the period.

(2) FelCor considers Funds From Operations to be a key measure of a real estate
investment trust's, or REIT's performance which should be considered along
with, but not as an alternative to, net income and cash flow as a measure of
operating performance and liquidity.

10
16

Operations reported by other REITs that do not define the term in accordance
with the current NAREIT definition, that interpret the current NAREIT
definition differently than FelCor does or that do not adjust Funds From
Operations for rent deferred under SAB 101 and the loss on assets held for
sale, lease termination costs and swap termination expenses. Funds From
Operations does not represent cash generated from operating activities
determined by GAAP and should not be considered as an alternative to net
income, determined in accordance with GAAP, as an indication of FelCor's
financial performance or to cash flow from operating activities, determined
in accordance with GAAP, as a measure of FelCor's liquidity, nor is it
indicative of funds available to fund FelCor's cash needs, including
FelCor's ability to make cash distributions. Funds From Operations may
include funds that may not be available for FelCor management's
discretionary use due to requirements to conserve funds for capital
expenditures and property acquisitions and other commitments and
uncertainties.

The computation of Funds From Operations for FelCor LP and FelCor yields the
same result. The following table details the computation of Funds From
Operations for FelCor LP.

<Table>
<Caption>
PRO FORMA
(UNAUDITED)
-------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
2001 2000
---------------- ------------
(IN THOUSANDS)

Net income before extraordinary charges..................... $ 91,603 $159,171
Loss (gain) on sale of hotels............................... 1,081 (6,024)
Loss on assets held for sale................................ 63,000
Swap termination expense.................................... 14,121
Series B redeemable preferred distributions................. (6,468) (12,937)
Series D redeemable preferred distributions................. (282) (565)
New redeemable preferred distributions...................... (5,250) (10,500)
Depreciation................................................ 123,350 248,990
Depreciation from unconsolidated entities................... 5,022 10,167
-------- --------
Funds From Operations....................................... $223,177 $451,302
======== ========
Weighted average shares and units outstanding(a)............ 106,041 106,536
</Table>

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

(a) Weighted average units outstanding are computed including dilutive
options, unvested stock grants and assuming conversion of Series A
preferred units and Series C preferred units.

(3) EBITDA is computed by adding Funds From Operations, interest expense,
FelCor's portion of interest expense from unconsolidated entities,
amortization expense and its redeemable preferred distributions. EBITDA is
presented because it provides useful information regarding FelCor's ability
to service debt. EBITDA should not be considered as an alternative measure
of operating results or cash flow from operations, as determined in
accordance with GAAP. EBITDA as presented by FelCor may not be comparable to
other similarly titled measures used by other companies. The computation of
EBITDA for FelCor LP and FelCor yields the same result. A reconciliation of
Funds From Operations to EBITDA is as follows:

<Table>
<Caption>
PRO FORMA
(UNAUDITED)
-------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
2001 2000
---------------- ------------
(IN THOUSANDS)

Funds From Operations....................................... $223,177 $451,302
Interest expense............................................ 153,229 313,249
Interest expense from unconsolidated entities............... 4,742 9,188
Amortization expense........................................ 3,452 5,431
Series B redeemable preferred distributions................. 6,468 12,937
Series D redeemable preferred distributions................. 282 565
New redeemable preferred distributions...................... 5,250 10,500
-------- --------
EBITDA...................................................... $396,600 $803,172
======== ========
</Table>

(4) For the purpose of computing the ratio of earnings to fixed charges,
earnings consist of income from continuing operations plus fixed charges,
and minority interest in FelCor LP, with respect to FelCor, excluding
capitalized interest, and fixed charges consist of interest, whether
expensed or capitalized, and amortization of loan costs. Preferred
distributions consist of distributions on preferred units.

11
17

SUMMARY HISTORICAL FINANCIAL INFORMATION

The following tables set forth summary historical consolidated financial
information for MeriStar LP and MeriStar. The summary historical information is
presented as of and for the six months ended June 30, 2001 and 2000 and as of
and for the years ended December 31, 2000, 1999 and 1998. The historical
financial information for the years ended December 31, 2000, 1999 and 1998 has
been derived from the consolidated financial statements and the notes thereto of
MeriStar LP and MeriStar, which have been audited by KPMG LLP, independent
accountants. The selected historical financial information as of and for the six
months ended June 30, 2001 and 2000 has been derived from the unaudited
financial statements which have been prepared by management of MeriStar on the
same basis as the audited financial statements and, in the opinion of the
management of MeriStar, include all adjustments consisting of normal recurring
accruals that are considered necessary for a fair presentation of the results
for such periods. The results of operations for the six months ended June 30,
2001 and 2000 are not necessarily indicative of results to be anticipated for
the entire year. You should read the following in conjunction with "Selected
Historical Consolidated Financial Information," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the consolidated
financial statements and the notes thereto included elsewhere in this prospectus
or incorporated herein by reference.

MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

<Table>
<Caption>
SIX MONTHS
ENDED JUNE 30,
(UNAUDITED) YEAR ENDED DECEMBER 31,
----------------------- ------------------------------------
2001(2) 2000 2000 1999 1998(1)
---------- ---------- ---------- ---------- ----------
(IN THOUSANDS)

RESULTS OF OPERATIONS:
Total revenues......................................... $ 609,851 $ 148,587 $ 400,685 $ 374,820 $ 522,031
Net operating income................................... $ 104,199 $ 63,899 $ 230,340 $ 218,299 $ 135,910
Net income............................................. $ 40,402 $ 12,237 $ 118,036 $ 111,656 $ 85,066
OTHER FINANCIAL DATA:
EBITDA(3).............................................. $ 178,499 $ 118,001 $ 341,028 $ 320,094 $ 194,752
Net cash provided by operating activities.............. $ 114,562 $ 120,671 $ 224,088 $ 228,329 $ 186,891
Net cash (used in) provided by investing activities.... $ (49,534) $ 13,027 $ (14,286) $ (187,952) $ (785,505)
Net cash provided by (used in) financing activities.... $ (45,003) $ 135,629 $ (212,173) $ (41,948) $ 520,457
BALANCE SHEET DATA (AT END OF PERIOD):
Investments in hotel properties, gross................. $3,209,185 $3,164,045 $3,193,730 $3,118,723 $2,957,543
Total assets........................................... $3,084,981 $3,036,517 $3,006,500 $3,086,096 $2,989,609
Long-term debt......................................... $1,653,050 $1,632,433 $1,638,319 $1,676,771 $1,602,352
</Table>

MERISTAR HOSPITALITY CORPORATION

RESULTS OF OPERATIONS:
Total revenues......................................... $ 609,851 $ 148,639 $ 400,778 $ 374,904 $ 525,297
Net operating income................................... $ 103,442 $ 63,310 $ 229,174 $ 217,065 $ 133,906
Net income (loss)...................................... $ 36,375 $ 10,052 $ 105,861 $ 98,964 $ 43,707
OTHER FINANCIAL DATA:
EBITDA(3).............................................. $ 178,360 $ 118,053 $ 341,121 $ 320,164 $ 194,609
Net cash provided by operating activities.............. $ 117,018 $ 121,084 $ 224,037 $ 229,193 $ 162,796
Net cash (used in) provided by investing activities.... $ (49,534) $ 13,027 $ (14,286) $ (187,952) $ (785,505)
Net cash provided by (used in) financing activities.... $ (47,467) $ (136,042) $ (212,121) $ (42,812) $ 543,256
BALANCE SHEET DATA (AT END OF PERIOD):
Investments in hotel properties, gross................. $3,209,185 $3,164,046 $3,193,730 $3,118,723 $2,957,543
Total assets........................................... $3,090,907 $3,043,648 $3,013,008 $3,094,201 $2,998,460
Long-term debt......................................... $1,653,050 $1,632,490 $1,638,319 $1,676,771 $1,602,352
</Table>

12
18

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

(1) MeriStar LP and MeriStar were created on August 3, 1998, when American
General Hospitality Corporation, a corporation operating as a real estate
investment trust, or REIT, and its associated entities merged with CapStar
Hotel Company and its associated entities. In connection with the merger
between CapStar and American General, MeriStar Hotels & Resorts, a separate
publicly traded company, was created to be the lessee and manager of nearly
all of MeriStar's hotels. Prior to August 2, 1998, MeriStar LP's and
MeriStar's operating results consisted of the revenues and expenses of the
hotels.

(2) From August 3, 1998 until January 1, 2001, MeriStar Hotels & Resorts leased
substantially all of MeriStar's hotels, and MeriStar LP and MeriStar earned
lease revenue under the participating lease agreements with its lessees.
Upon assigning the 106 leases with MeriStar Hotels & Resorts to MeriStar's
taxable REIT subsidiaries on January 1, 2001, in conjunction with the REIT
Modernization Act, MeriStar LP's and MeriStar's operating results now
include the revenues and expenses of these hotels.

(3) EBITDA represents earnings before interest expense, income taxes,
depreciation and amortization. MeriStar's management believes that EBITDA is
a useful measure of operating performance because (i) it is industry
practice to evaluate hotel properties based on operating income before
interest, depreciation and amortization and minority interests of common and
preferred holders of units in MeriStar LP, which is generally equivalent to
EBITDA, and (ii) EBITDA is unaffected by the debt and equity structure of
the entity. EBITDA does not represent cash flow from operations as defined
by GAAP, is not necessarily indicative of cash available to fund all cash
flow needs, and should not be considered as an alternative to net income
under GAAP for purposes of evaluating MeriStar LP's or MeriStar's results of
operations and may not be comparable to other similarly titled measures used
by other companies.

For the six months ended June 30, 2001, MeriStar LP's and MeriStar's EBITDA
has been presented before the effect of non-recurring items: swap
termination costs of $9,297; the write-down of investment in STS Hotel Net
of $2,112; FelCor merger costs of $3,789; and, costs to terminate leases
with Prime Hospitality Corporation of $1,315.

The following tables set forth summary historical consolidated financial
information for FelCor LP and FelCor. The summary historical information is
presented as of and for the six months ended June 30, 2001 and 2000 and as of
and for the years ended December 31, 2000, 1999 and 1998. The historical
financial information for the years ended December 31, 2000, 1999 and 1998 is
derived from FelCor LP's and FelCor's consolidated financial statements and the
notes thereto, audited by PricewaterhouseCoopers LLP, independent accountants.
Certain reclassifications have been made to previously reported amounts to
conform to current-year presentation with no effect to previously reported net
income, partners capital or shareholders equity. The selected historical
financial information as of and for the six months ended June 30, 2001 and 2000
have been derived from the unaudited financial statements which have been
prepared by FelCor LP's and FelCor's management on the same basis as the audited
financial statements and, in the opinion of FelCor LP and FelCor's management,
include all adjustments consisting of normal recurring accruals that are
considered necessary for a fair presentation of the results for such periods.
The results of operations for the six months ended June 30, 2001 and 2000 are
not necessarily indicative of results to be anticipated for the entire year. You
should read the following in conjunction with FelCor LP's and FelCor's "Selected
Historical Consolidated Financial Information," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the consolidated
financial statements and the notes thereto included elsewhere in this prospectus
or incorporated in this prospectus by reference.

FELCOR LODGING LIMITED PARTNERSHIP

<Table>
<Caption>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
----------------------- ------------------------------------
2001(2) 2000 2000(1) 1999 1998
---------- ---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT RATIO DATA)

STATEMENT OF OPERATIONS DATA:
Total revenues......................................... $ 560,302 $ 258,159 $ 541,872 $ 495,517 $ 332,600
Net income (loss)...................................... $ 16,341 $ (12,372) $ 66,391 $ 135,776 $ 121,339
Net income (loss) applicable to common unitholders..... $ 4,041 $ (24,730) $ 41,709 $ 111,041 $ 99,916
OTHER DATA:
Funds From Operations(3)............................... $ 135,683 $ 149,380 $ 288,636 $ 286,895 $ 217,363
EBITDA(4).............................................. $ 229,576 $ 238,753 $ 470,861 $ 432,689 $ 306,361
Ratio of earnings to fixed charges(5).................. 1.2x 1.0x 1.5x 2.1x 2.7x
BALANCE SHEET DATA (AT END OF PERIOD):
Total assets........................................... $4,403,528 $4,176,765 $4,103,603 $4,255,751 $4,175,383
Debt................................................... $2,134,093 $1,882,743 $1,838,241 $1,833,954 $1,594,734
</Table>

13
19

FELCOR LODGING TRUST INCORPORATED

STATEMENT OF OPERATIONS DATA:
Total revenues......................................... $ 560,302 $ 258,159 $ 541,872 $ 495,517 $ 332,600
Net income (loss)...................................... $ 15,753 $ (9,973) $ 61,699 $ 131,080 $ 114,839
Net income (loss) applicable to common shareholders.... $ 3,453 $ (22,331) $ 37,017 $ 106,345 $ 93,416
OTHER DATA:
Funds From Operations(3)............................... $ 135,683 $ 149,380 $ 288,636 $ 286,895 $ 217,363
EBITDA(4).............................................. $ 229,576 $ 238,753 $ 470,861 $ 432,689 $ 306,361
BALANCE SHEET DATA (AT END OF PERIOD):
Total assets........................................... $4,403,528 $4,176,765 $4,103,603 $4,255,751 $4,175,383
Debt................................................... $2,134,093 $1,882,743 $1,838,241 $1,833,954 $1,594,734
</Table>

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

(2) Includes hotel revenues and expenses with respect to 96 hotels that were
leased to either DJONT or subsidiaries of Six Continents Hotels prior to the
effectiveness of the REIT Modernization Act on January 1, 2001. Prior to
January 1, 2001, these hotels' revenues were comprised mainly of percentage
lease revenues. Additionally in the first quarter of 2001, FelCor recorded
lease termination costs of $36.2 million with respect to the 96 hotels.

(3) FelCor considers Funds From Operations to be a key measure of a REIT's
performance which should be considered along with, but not as an alternative
to, net income and cash flow as a measure of operating performance and
liquidity.

The White Paper on Funds From Operations approved by the Board of Governors
of NAREIT defines Funds From Operations as net income or loss (computed in
accordance with GAAP), excluding gains or losses from debt restructuring
which would be extraordinary items in accordance with GAAP and sales of
depreciable operating properties, plus real estate related depreciation and
amortization and after comparable adjustments for FelCor's portion of these
items related to unconsolidated entities and joint ventures. FelCor believes
that Funds From Operations is helpful to investors as a measure of the
performance of an equity REIT because, along with cash flow from operating
activities, financing activities and investing activities, it provides
investors with an indication of FelCor's ability to incur and service debt,
to make capital expenditures and to fund other cash needs. FelCor computes
Funds From Operations in accordance with standards established by NAREIT,
except that FelCor adds back rent deferred under SAB 101, the loss on assets
held for sale, lease termination costs and swap termination costs to derive
Funds From Operations. This may not be comparable to Funds From Operations
reported by other REITs that do not define the term in accordance with the
current NAREIT definition, that interpret the current NAREIT definition
differently than FelCor does or that do not adjust Funds From Operations for
rent deferred under SAB 101, the loss on assets held for sale, lease
termination costs and swap termination costs. Funds From Operations does not
represent cash generated from operating activities determined by GAAP and
should not be considered as an alternative to net income (determined in
accordance with GAAP) as an indication of FelCor's financial performance or
to cash flow from operating activities (determined in accordance with GAAP)
as a measure of FelCor's liquidity, nor is it indicative of funds available
to fund FelCor's cash needs, including FelCor's ability to make cash
distributions. Funds From Operations may include funds that may not be
available for FelCor management's discretionary use due to requirements to
conserve funds for capital expenditures and property acquisitions and other
commitments and uncertainties.

14
20

The computation of Funds From Operations for FelCor LP and FelCor yields the
same result. The following table details the computation of Funds From
Operations for FelCor LP.

<Table>
<Caption>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
------------------- ------------------------------
2001 2000 2000 1999 1998
-------- -------- -------- -------- --------
(IN THOUSANDS)

Net income (loss)................................... $ 16,341 $(12,372) $ 66,391 $135,776 $121,339
Deferred rent....................................... 18,604
Lease termination costs............................. 36,226
Swap termination expense............................ 4,824
Gain on sale........................................ (2,595)
Loss on assets held for sale........................ 63,000 63,000
Series B redeemable preferred distributions......... (6,468) (6,468) (12,937) (12,937) (8,373)
Extraordinary charge from write-off of deferred
financing fees.................................... 225 3,865 1,113 3,075
Depreciation........................................ 79,513 81,480 160,745 152,948 90,835
Depreciation from unconsolidated entities........... 5,022 5,136 10,167 9,995 10,487
-------- -------- -------- -------- --------
Funds From Operations............................... $135,683 $149,380 $288,636 $286,895 $217,363
======== ======== ======== ======== ========
Weighted average units outstanding(a)............... 66,759 67,987 67,239 75,251 58,013
</Table>

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

(a) Weighted average units outstanding are computed including dilutive
options, unvested stock grants and assuming conversion of Series A
preferred units to common units.

(4) EBITDA is computed by adding Funds From Operations, interest expense,
FelCor's portion of interest expense from unconsolidated entities,
amortization expense, and FelCor's Series B redeemable preferred
distributions. EBITDA is presented because it provides useful information
regarding FelCor's ability to service debt. EBITDA should not be considered
as an alternative measure of operating results or cash flow from operations,
as determined in accordance with GAAP. EBITDA as presented by FelCor may not
be comparable to other similarly titled measures used by other companies.
The computation of EBITDA for FelCor LP and FelCor yields the same result. A
reconciliation of Funds From Operations to EBITDA is as follows:

Funds From Operations................................ $135,683 $149,380 $288,636 $286,895 $217,363
Interest expense..................................... 81,799 77,644 158,620 125,435 73,182
Interest expense from unconsolidated entities........ 4,742 4,787 9,188 6,729 6,521
Amortization expense................................. 884 474 1,480 693 922
Series B redeemable preferred distributions.......... 6,468 6,468 12,937 12,937 8,373
-------- -------- -------- -------- --------
EBITDA............................................... $229,576 $238,753 $470,861 $432,689 $306,361
======== ======== ======== ======== ========
</Table>

(5) For the purpose of computing the ratio of earnings to fixed charges,
earnings consist of income from continuing operations plus fixed charges,
excluding capitalized interest, and fixed charges consist of interest,
whether expensed or capitalized, and amortization of loan costs.

15
21

RISK FACTORS

This prospectus contains certain forward-looking statements within the
meaning of the federal securities laws. Actual results and the timing of certain
events could differ materially from those projected in the forward-looking
statements due to a number of factors, including those set forth below and
elsewhere in this prospectus. Holders of initial notes should carefully
consider, together with other information in this prospectus, the following
factors, which include the material risks, associated with the exchange offer.

FINANCING RISKS

Our significant amount of debt could limit our operational flexibility or
otherwise adversely affect our financial condition

We have now and, after this offering, will continue to have a significant
amount of debt. At June 30, 2001, we, MeriStar Hospitality Corporation and our
respective subsidiaries on a consolidated basis had total debt of $1.7 billion,
consisting of $0.4 billion of secured debt and $1.3 billion of unsecured debt,
had $39.6 million of debt with a maturity date of less than 12 months and had a
ratio of EBITDA to interest expense of 2.7-to-1 for the six months ended June
30, 2001. On a pro forma basis as of June 30, 2001, after giving effect to the
FelCor merger and the related transactions, we, MeriStar Hospitality Corporation
and our respective subsidiaries on a consolidated basis would have had total
debt of $3.6 billion, consisting of $1.4 billion of secured debt and $2.2
billion of unsecured debt, would have had $26.2 million of debt with a maturity
date of less than 12 months, and would have had a ratio of EBITDA to interest
expense of 2.6-to-1 for the same six month period.

We are subject to the risks normally associated with debt financing,
including the risks that:

- our cash flow from operations will be insufficient to make required
payments of principal and interest;

- existing indebtedness, including secured indebtedness, may not be
refinanced; and

- the terms of any refinancing will not be as favorable as the terms of
existing indebtedness.

The exchange notes are effectively junior in right of payment to our secured
debt and the debt of our non-guarantor subsidiaries

The exchange notes are effectively subordinated to claims by holders of
debt that is secured by our properties and by holders of any other debt,
including indebtedness under our senior secured credit facility, which is
secured by the equity interests of MeriStar Hospitality Corporation in us and by
our equity interests in our subsidiaries. In the event of a bankruptcy,
liquidation, reorganization or other winding-up of our company or upon a default
in payment with respect to, or the acceleration of, any indebtedness under our
senior secured credit agreement or our other secured debt, our assets that
secure the senior secured credit agreement or our other secured debt will be
available to pay obligations on the exchange notes only after all indebtedness
under the senior secured credit agreement or our other secured debt has been
repaid in full from those assets. The exchange notes are also structurally
subordinated to the debt obligations of our subsidiaries that are not
guarantors. In the event of a bankruptcy, liquidation or similar events with
respect to our company, the assets held in each of our non-guarantor
subsidiaries will be available to pay our obligations on the exchange notes only
after the debt obligations of that subsidiary are satisfied in full. At June 30,
2001, we, MeriStar Hospitality Corporation and our respective subsidiaries on a
consolidated basis had an aggregate of $0.4 billion of secured debt, our
non-guarantor subsidiaries have $375.1 million of indebtedness. On a pro forma
basis as of June 30, 2001, after giving effect to the FelCor merger and the
related transactions, we, MeriStar Hospitality Corporation and our respective
subsidiaries on a consolidated basis would have had an aggregate of $1.4 billion
of secured debt and $950.1 million of debt of non-guarantor subsidiaries. There
may not be sufficient assets remaining to pay amounts due on any or all the
exchange notes then outstanding.

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At June 30, 2001, approximately 25.7% of our hotel assets, based on the
number of guest rooms, are encumbered by mortgage debt totaling approximately
$375.1 million. The properties subject to approximately $322.2 million of this
indebtedness are fully cross-collateralized and cross-defaulted. To the extent
mortgages are cross-collateralized, lenders may seek to foreclose upon
properties that are not in the primary collateral for their loans, which may, in
turn, result in acceleration of other debt secured by the properties. If we are
unable to meet our obligations on these mortgages, the properties subject to the
mortgage could be foreclosed upon, which would have a material adverse effect on
us and our ability to generate revenues and repay our debt obligations,
including the exchange notes.

The effective subordination of the notes may therefore adversely affect our
ability to make payments on the notes.

We and MeriStar Hospitality Corporation may be required to refinance
indebtedness, and the failure to refinance that indebtedness may have an
adverse effect on us

If we do not have sufficient funds to repay our indebtedness at maturity,
it may be necessary to refinance the indebtedness through additional debt
financing, private or public offerings of debt securities or additional equity
offerings. If, at the time of any refinancing, prevailing interest rates or
other factors result in higher interest rates on refinancings, increases in
interest expense could adversely affect our cash flow, and, consequently, cash
available for payments on our indebtedness, including the exchange notes. If we
or MeriStar Hospitality Corporation are unable to refinance indebtedness on
acceptable terms, we might be forced to dispose of hotels or other assets on
disadvantageous terms, potentially resulting in losses and adverse effects on
cash flow from operating activities. If we or MeriStar Hospitality Corporation
are unable to make required payments of principal and interest on indebtedness
secured by our hotels, these properties could be foreclosed upon by the lender
with a consequent loss of income and asset value. Accordingly, the inability to
refinance indebtedness of us or MeriStar Hospitality Corporation could adversely
impact our ability to make payments on the exchange notes.

Our senior secured credit facility and other debt instruments have restrictive
covenants that could affect our financial condition

We have in place a senior secured credit facility that, at inception,
provided for a maximum borrowing amount of up to $1.0 billion. The credit
facility is structured as a $300 million, five-year term loan facility; a $200
million, five-and-a-half year term loan facility; and a $500 million, three-year
revolving credit facility with two one-year optional extensions. As of June 30,
2001, we had approximately $422 million outstanding under our senior secured
credit facility. Our ability to borrow under the credit facility is subject to
financial covenants, including leverage and interest rate coverage ratios and
minimum net worth requirements. Our credit facility limits our ability to effect
mergers, asset sales and change of control events and limits dividends to the
lesser of 90% of funds from operations and 100% of funds from operations less a
capital reserve equal to 4% of gross room revenues. The credit facility also
contains a cross-default provision which would be triggered by a default or
acceleration of $20 million or more of indebtedness secured by our assets or $5
million or more of any other indebtedness. FelCor plans to refinance the credit
facility in connection with the FelCor merger with FelCor's existing credit
facility that also contains restrictive covenants.

As of June 30, 2001, MeriStar Hospitality Corporation also had outstanding
$205.0 million of senior subordinated unsecured notes due 2007 that bear
interest at a weighted-average annual rate of 8.71% and $154.3 million of
outstanding convertible notes due 2004 that bear interest at 4.75%. The issuers
and the subsidiary guarantors have guaranteed MeriStar Hospitality Corporation's
payment obligations under the senior subordinated notes on an unsecured, senior
subordinated basis. On a pro forma basis, at June 30, 2001, the combined company
would have had an aggregate of $1.9 billion of indebtedness under its various
series of senior notes and an aggregate of $330.4 million of debt under its line
of credit. All of this

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indebtedness contains or will contain limitations on the borrower to effect
mergers and change of control events, as well as other limitations, including:

- limitations on incurring additional indebtedness and the issuance of
capital stock unless an interest coverage ratio is met;

- limitations on the declaration and payment of dividends;

- limitations on the sale of assets;

- limitations on transactions with affiliates; and

- limitations on liens.

These restrictions may affect our ability to finance our operations or engage in
other business activities that may be in our best interest. For example, on a
pro forma basis, under the most restrictive of these covenants that will be
applicable to the combined company, the combined parent company in the FelCor
merger would be able to invest no more than $611 million in additional
indebtedness for the purpose of acquiring additional hotels and $280 million for
purposes other than acquiring additional hotels following the FelCor merger
assuming the FelCor merger had occurred on June 30, 2001.

The exchange notes contain similar restrictive covenants to the initial
notes. For more information regarding these covenants, please read the sections
of this prospectus entitled "Description of Notes -- Covenants" and
"-- Repurchase at the Option of Holders -- Asset Sales."

We and MeriStar Hospitality Corporation may be able to incur substantially
more debt, which would increase the risks associated with our and MeriStar
Hospitality Corporation's substantial leverage

Although the terms of our and MeriStar Hospitality Corporation's debt
instruments restrict our and MeriStar Hospitality Corporation's ability to incur
additional indebtedness, our and MeriStar Hospitality Corporation's
organizational documents do not limit the amount of indebtedness we or MeriStar
Hospitality Corporation may incur. If new debt is added to our or MeriStar
Hospitality Corporation's current debt, the related risks we and MeriStar
Hospitality Corporation now face could intensify and increase the risk of
default on our indebtedness, including the exchange notes.

Rising interest rates could have an adverse effect on our cash flow and
interest expense

Some of our borrowings bear interest at a variable rate, including amounts
outstanding under our credit facility. In addition, we may incur indebtedness in
the future that bears interest at a variable rate or we may be required to
retain our existing indebtedness at higher interest rates. Accordingly,
increases in interest rates could increase our interest expense and adversely
affect our cash flow, reducing the amounts available to make payments on our
other indebtedness, including the exchange notes.

The funds from operations of the combined company in the merger will be
adversely affected by increased interest expense

Interest expense of the combined company in the merger will be increased
primarily as a result of the debt financing of the approximately $225 million in
aggregate cash consideration being paid to MeriStar Hospitality Corporation
stockholders and our unitholders in the merger and the related merger
transaction costs and financing costs of approximately $59 million. On a pro
forma basis, for the year ended December 31, 2000, interest expense of the
combined company exceeded historical levels by approximately $31.2 million. The
increase in interest expense will have a negative impact on the combined
company's funds from operations of $31.2 million.

OUR RESULTS OF OPERATIONS ARE DEPENDENT ON REVENUES GENERATED BY OUR HOTELS,
WHICH ARE SUBJECT TO A NUMBER OF RISKS RELATED TO THE LODGING INDUSTRY

The recent economic slowdown has adversely affected our RevPAR performance and
that of FelCor and, if it worsens or continues, these effects could be
material

We experienced declines in revenue per available room, or RevPAR, during
the second quarter of 2001, as compared to the comparable period of 2000, of
6.0%. A sharper than anticipated decline in

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business travel was the primary cause of the declines, which were principally
reflected in decreased occupancies. We expect that the hotel industry will
experience a RevPAR decline for the full year 2001. If the current economic
slowdown worsens significantly or continues for a protracted period of time, the
declines in occupancy could also lead to declines in average daily room rates
and could have a material adverse effect on our funds from operations and
earnings.

In addition, FelCor experienced a decline in RevPAR during the second
quarter of 2001, as compared to the comparable period of 2000, of 7.4%. These
declines experienced by both FelCor and us could have a material adverse affect
on the combined company's funds from operations and earnings after the FelCor
merger.

The current economic slowdown and the resulting declines in RevPAR, which
began in March 2001, are currently continuing. FelCor and we both anticipate
that third quarter RevPARs will be less than that of the prior year period and
less than that of the second quarter of 2001. The decline in occupancy during
the second and third quarters is expected to lead to declines in room rates as
hotels compete more aggressively for guests. If the economic slowdown worsens or
continues for a protracted time, it could have a material adverse effect on the
operations and earnings of our company, FelCor, and the combined company.

If the hotel industry is negatively affected by one or more particular risks,
our results of operations could suffer

Various factors could adversely affect our hotel revenues, which are
subject to all of the operating risks inherent in the lodging industry. These
risks include the following:

- changes in general and local economic conditions;

- cyclical overbuilding in the lodging industry;

- varying levels of demand for rooms and related services;

- competition from other hotels, motels and recreational properties, some
of which may be owned or operated by companies having greater marketing
and financial resources than we do;

- dependence on business and commercial travelers and tourism, which may
fluctuate and be seasonal;

- the recurring costs of necessary renovations, refurbishment and
improvements of hotel properties;

- changes in governmental regulations that influence or determine wages,
prices and construction and maintenance costs; and

- changes in interest rates and the availability of credit.

In addition, demographic, geographic or other changes in one or more of the
markets of our hotels could impact the convenience or desirability of the sites
of some hotels, which would in turn affect their operations. Furthermore, due to
the level of fixed costs required to operate full-service hotels, significant
expenditures necessary for the operation of hotels generally cannot be reduced
when circumstances cause a reduction in revenue.

The lodging business is seasonal in nature

Generally, hotel revenues are greater in the second and third calendar
quarters than in the first and fourth calendar quarters although this may not be
true for hotels in major tourist destinations. Revenues for hotels in tourist
areas generally are substantially greater during tourist season than other times
of the year. Seasonal variations in revenue at our hotels can be expected to
cause quarterly fluctuations in our revenues. Quarterly earnings also may be
adversely affected by events beyond our control, such as extreme weather
conditions, economic factors and other considerations affecting travel.

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We may be adversely affected by the limitations in our franchise and licensing
agreements

At June 30, 2001, approximately 88% of our hotels were operated pursuant to
existing franchise or license agreements with nationally recognized hotel
brands. The franchise agreements generally contain specific standards for, and
restrictions and limitations on, the operation and maintenance of a hotel in
order to maintain uniformity within the franchisor system. Those limitations may
conflict with our philosophy, shared with MeriStar Hotels & Resorts, of creating
specific business plans tailored to each hotel and to each market. Standards are
often subject to change over time, in some cases at the discretion of the
franchisor, and may restrict a franchisee's ability to make improvements or
modifications to a hotel without the consent of the franchisor. In addition,
compliance with standards could require a franchisee to incur significant
expenses or capital expenditures. Action or inaction on our part or by our
third-party operators, could result in a breach of standards or other terms and
conditions of the franchise agreements and could result in the loss or
cancellation of a franchise license. Loss of franchise licenses without
replacement would likely have an adverse effect on our hotel revenues.

In connection with terminating or changing the franchise affiliation of a
hotel or a subsequently acquired hotel, we may be required to incur significant
expenses or capital expenditures. Moreover, the loss of a franchise license
could have a material adverse effect upon the operations or the underlying value
of the hotel covered by the franchise because of the loss of associated name
recognition, marketing support and centralized reservation systems provided by
the franchisor. The franchise agreements covering the hotels expire or
terminate, without specified renewal rights, at various times and have differing
remaining terms. As a condition to renewal, the franchise agreements frequently
contemplate a renewal application process, which may require substantial capital
improvements to be made to the hotel. Unexpected capital expenditures could
adversely affect our results of operations and our ability to make payments on
our indebtedness, including the exchange notes.

The lodging industry is highly competitive

We have no single competitor or small number of competitors that are
considered to be dominant in the industry. We operate in areas that contain
numerous competitors, some of which may have substantially greater resources
than us. Competition in the lodging industry is based generally on location,
availability, room rates or accommodations price, range and quality of services
and guest amenities offered. New or existing competitors could significantly
lower rates or offer greater conveniences, services or amenities or
significantly expand, improve or introduce new facilities in markets in which we
compete, thereby adversely affecting our operations and the number of suitable
business opportunities.

Costs of compliance with environmental laws could adversely affect our results
of operations

Under various federal, state and local environmental laws, ordinances and
regulations, a current or previous owner or operator of real property may be
liable for the costs of removal or remediation of hazardous or toxic substances
on, under or in property. Laws often impose liability whether or not the owner
or operator knew of, or was responsible for, the presence of hazardous or toxic
substances. In addition, the presence of contamination from hazardous or toxic
substances, or the failure to properly remediate contaminated property, may
adversely affect the owner's ability to sell or rent real property or to borrow
funds using real property as collateral. Persons who arrange for the disposal or
treatment of hazardous or toxic substances may also be liable for the costs of
removal or remediation of these substances at the disposal or treatment
facility, whether or not the facility is or ever was owned or operated by those
persons.

The operation and removal of underground storage tanks are also regulated
by federal and state laws. In connection with the ownership and operation of the
hotels, we could be held liable for the costs of remedial action with respect to
the regulated substances and storage tanks and claims related thereto.
Activities have been undertaken to close or remove storage tanks located on the
property of several of the hotels.

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All of our hotels have undergone Phase I environmental site assessments,
which generally provide a nonintrusive physical inspection and database search,
but not soil or groundwater analyses, by a qualified independent environmental
engineer. The purpose of a Phase I is to identify potential sources of
contamination for which the hotels may be responsible and to assess the status
of environmental regulatory compliance. The Phase Is have not revealed any
environmental liability or compliance concerns that we believe would have a
material adverse effect on our results of operation or financial condition, nor
are we aware of any environmental liability or concerns. Nevertheless, it is
possible that these environmental site assessments did not reveal all
environmental liabilities or compliance concerns or that material environmental
liabilities or compliance concerns exist of which we are currently unaware.

In addition, our hotels have been inspected to determine the presence of
asbestos. Federal, state and local environmental laws, ordinances and
regulations also require abatement or removal of asbestos-containing materials
and govern emissions of and exposure to asbestos fibers in the air.
Asbestos-containing materials are present in various building materials such as
sprayed-on ceiling treatments, roofing materials or floor tiles at some of the
hotels. Operations and maintenance programs for maintaining asbestos-containing
materials have been or are in the process of being designed and implemented, or
the asbestos-containing materials have been scheduled to be or have been abated,
at these hotels. Any liability resulting from non-compliance or other claims
relating to environmental matters could have a material adverse effect on our
results of operations or financial condition.

Aspects of our operations are subject to government regulation, and changes in
government regulations may have significant effects on our business

A number of states regulate the licensing of hotels and restaurants,
including liquor license grants, by requiring registration, disclosure
statements and compliance with specific standards of conduct. We believe that
our hotels are substantially in compliance with these requirements or, in the
case of liquor licenses, that they have or will promptly obtain the appropriate
licenses. Compliance with, or changes in, these laws could reduce the revenue
and profitability of our hotels and could otherwise adversely affect our
revenues, results of operations and financial condition.

Under the Americans with Disabilities Act, or ADA, all public
accommodations are required to meet federal requirements related to access and
use by disabled persons. These requirements became effective in 1992. Although
significant amounts have been and continue to be invested in ADA required
upgrades to our hotels, a determination that our hotels are not in compliance
with the ADA could result in a judicial order requiring compliance, imposition
of fines or an award of damages to private litigants.

We invest in a single industry

Our current strategy is to acquire interests only in hospitality and
lodging. As a result, we are subject to the risks inherent in investing in a
single industry. The effects on cash available for distribution resulting from a
downturn in the hotel industry may be more pronounced than if we had diversified
our investments.

We have a high concentration of hotels in the upscale, full-service segment,
which may increase our susceptibility to an economic downturn

As a percentage of total rooms, we currently have 65% of our hotels in the
upscale, full-service segment, FelCor currently has 18% of its hotels in this
segment and the combined company will have 38% of its hotels in this segment. In
an economic downturn, hotels in this segment, which generally demand higher room
rates, may be more susceptible to a decrease in revenues, as compared to hotels
in other segments that have lower room rates. This characteristic may result
from hotels in this segment generally targeting business and high-end leisure
travelers. In periods of economic difficulties, business and leisure travelers
may seek to reduce travel costs by limiting trips or seeking to reduce costs on
the trips that are taken, which could have a material adverse effect on our
revenues and results of operations.

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OUR RELATIONSHIP WITH MERISTAR HOTELS & RESORTS MAY INVOLVE CONFLICTS OF
INTEREST

MeriStar Hospitality Corporation and MeriStar Hotels & Resorts have
overlapping officers and directors

MeriStar Hospitality Corporation, our sole general partner, shares four of
the nine members of its board of directors, as well as two senior executives,
with MeriStar Hotels & Resorts. Upon completion of the FelCor merger, FelCor
will share two of the 11 members of its board of directors with MeriStar Hotels
& Resorts, and one of the two directors will continue to serve as the Chief
Executive Officer of MeriStar Hotels & Resorts. MeriStar Hospitality
Corporation's relationship with MeriStar Hotels & Resorts is governed by an
intercompany agreement, which restricts each party from taking advantage of
business opportunities without first presenting those opportunities to the other
party. FelCor and/or MeriStar Hospitality Corporation may have conflicting views
with MeriStar Hotels & Resorts on the manner in which our hotels are operated
and managed, and with respect to lease arrangements, acquisitions and
dispositions. Conflicts may also arise in connection with the $50 million
revolving credit facility that we have provided to MeriStar Hotels & Resorts,
which had $36 million outstanding as of June 30, 2001. As a result, the
management personnel who serve at or have interests in MeriStar Hospitality
Corporation, or FelCor after the FelCor merger, and MeriStar Hotel & Resorts may
well be presented with several decisions which provide them the opportunity to
benefit us to the detriment of MeriStar Hotels & Resorts or benefit MeriStar
Hotels & Resorts to our detriment. Inherent potential conflicts of interest will
be present in all of the numerous transactions among us, FelCor, MeriStar
Hospitality Corporation and MeriStar Hotels & Resorts.

Restrictions on our business, that of MeriStar Hotels & Resorts and on our
future opportunities could affect our business

MeriStar Hospitality Corporation and we are parties to an intercompany
agreement with MeriStar Hotels & Resorts, which will be assumed by FelCor in the
FelCor merger. The intercompany agreement provides that, for so long as the
agreement remains in effect, MeriStar Hotels & Resorts is prohibited from making
real property investments that a real estate investment trust could make unless:

- MeriStar Hospitality Corporation and we are first given the opportunity,
but elect not to pursue the activities or investments;

- it is on land already owned or leased by MeriStar Hotels & Resorts or
subject to a lease or purchase option in favor of MeriStar Hotels &
Resorts;

- MeriStar Hotels & Resorts will operate the property under a trade name
owned by it; or

- it is a minority investment made as part of a lease or management
agreement.

The intercompany agreement will generally grant MeriStar Hotels & Resorts
the right of first refusal with respect to any management opportunity at any of
our properties that MeriStar Hospitality Corporation does not elect to have
managed by a hotel brand owner. This opportunity will be made available to
MeriStar Hotels & Resorts only if MeriStar Hospitality Corporation determines
that:

- consistent with MeriStar Hospitality Corporation's status as a real
estate investment trust, we must enter into a management agreement with
an unaffiliated third party with respect to the property;

- MeriStar Hotels & Resorts is qualified to be the manager of that
property; and

- the property is not to be operated by the owner of a hospitality trade
name under that trade name.

Because of the provisions of the intercompany agreement, the nature of our
business and the opportunities we may pursue will be restricted.

In addition, under the intercompany agreement, each party must cooperate
with the other party to effect any securities issuance of the other party by
assisting in the preparation of any registration statement or other document
required in connection with the issuance.

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Conflicts of interest may arise in connection with the sale of hotels subject
to management agreements

We generally will be obligated under each of our management agreements with
MeriStar Hotels & Resorts to pay a termination fee to MeriStar Hotels & Resorts
if we elect to sell a hotel or if we elect not to restore a hotel after a
casualty and do not replace it with another hotel subject to a management
agreement with a fair market value equal to the fair market value of MeriStar
Hotels & Resorts' remaining management fee due under the management agreement to
be terminated. Where applicable, the termination fee is equal to the present
value, using a discount rate of 10%, of the remaining payments under the
agreement based on the operating results for the 12 months preceding
termination. Based on operating results for the relevant hotels for the 12
months ended June 30, 2001, the aggregate transaction fees payable under all of
the management contracts would have ranged between $170 million and $180
million. A decision to sell a hotel may, therefore, have significantly different
consequences for us and MeriStar Hotels & Resorts.

We lack control over management and operations of the hotels

We are dependent on the ability of MeriStar Hotels & Resorts and other
managers of hotels to operate and manage our hotels. In order to maintain
MeriStar Hospitality Corporation's real estate investment trust status, we
cannot operate our hotels or any subsequently acquired hotels. As a result, we
are unable to directly implement strategic business decisions for the operation
and marketing of our hotels, such as decisions with respect to the setting of
room rates, food and beverage operations and similar matters.

There could be a potential negative impact on our acquisitions

Our relationship with MeriStar Hotels & Resorts could negatively impact our
ability to acquire additional hotels because hotel management companies,
franchisees and others who would have approached us with acquisition
opportunities in hopes of establishing lessee or management relationships may
not do so knowing that we will rely primarily on MeriStar Hotels & Resorts to
manage the acquired properties. These persons may instead provide acquisition
opportunities to hotel companies that will allow them to manage the properties
following the sale. This could have a negative impact on our acquisition
activities in the future.

FEDERAL INCOME TAX RISKS

Requirements imposed on us relating to MeriStar Hospitality Corporation's real
estate investment trust status could cause us to operate in a manner that
might be disadvantageous to noteholders

We are the operating partnership through which MeriStar Hospitality
Corporation holds its assets and conducts its operations. MeriStar Hospitality
Corporation has operated and intends to continue to operate in a manner designed
to permit it to qualify as a real estate investment trust for federal income tax
purposes.

To obtain the favorable tax treatment accorded to real estate investment
trusts under the Internal Revenue Code, MeriStar Hospitality Corporation
normally will be required each year to distribute to its stockholders at least
90% of its real estate investment trust taxable income, determined without
regard to the deduction for dividends paid and by excluding net capital gain.
MeriStar Hospitality Corporation will be subject to income tax on undistributed
real estate investment trust taxable income and net capital gain, and to a 4%
nondeductible excise tax on the amount, if any, by which distributions it pays
with respect to any calendar year are less than the sum of:

- 85% of its ordinary income for the calendar year;

- 95% of its capital gain net income for that year; and

- 100% of its undistributed income from prior years.

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MeriStar Hospitality Corporation's income consists primarily of its share of our
income and its cash flow consists primarily of its share of distributions made
by us.

Our partnership agreement provides that we will not take, or refrain from
taking, any action which, in the judgment of MeriStar Hospitality Corporation,
as our general partner,

(a) could adversely affect the ability of MeriStar Hospitality
Corporation to continue to qualify as a real estate investment trust,
unless MeriStar Hospitality Corporation otherwise ceases to qualify as a
real estate investment trust, or

(b) could subject MeriStar Hospitality Corporation to additional
income or excise taxes applicable to real estate investment trusts under
the Internal Revenue Code,

unless such action or inaction has been specifically consented to by MeriStar
Hospitality Corporation in writing. Our partnership agreement also provides that
MeriStar Hospitality Corporation, as our general partner, shall use its best
efforts to cause us to make sufficient distributions to enable MeriStar
Hospitality Corporation to meet the distribution requirements described above
and to avoid any federal income or excise tax liability, except to the extent
that such distributions would contravene the terms of any notes or other debt
obligations to which we are subject in conjunction with borrowed funds. Finally,
our partnership agreement generally requires us to make pro rata distributions
to all holders of common units, not just to MeriStar Hospitality Corporation.
Thus, whenever distributions are made to MeriStar Hospitality Corporation in
order to satisfy the foregoing requirements, equivalent distributions must be
made to our other partners holding common units.

These provisions of our partnership agreement could in the future cause us
to distribute amounts that otherwise would be spent on future acquisitions,
unanticipated capital expenditures or repayment of debt, which would require us
to borrow funds or to sell assets to fund the cost of these items. In addition,
it is possible that differences in timing between the receipt of income and the
payment of expenses in arriving at our taxable income or the taxable income of
MeriStar Hospitality Corporation and the effect of nondeductible capital
expenditures, the creation of reserves or required debt amortization payments
could in the future require us to borrow funds on a short or long-term basis to
enable MeriStar Hospitality Corporation to continue to qualify as a real estate
investment trust and avoid federal income taxes and the 4% nondeductible excise
tax. In these circumstances, we might need to borrow funds in order to avoid
adverse tax consequences to MeriStar Hospitality Corporation even if we believe
that the then prevailing market conditions generally are not favorable for those
borrowings or that those borrowings are not advisable in the absence of these
tax considerations.

Distributions by us will be determined by MeriStar Hospitality Corporation,
our general partner, and are dependent on a number of factors, including:

- the amount of cash available for distribution;

- our financial condition;

- our decision to reinvest funds rather than to distribute the funds;

- restrictions in our debt instruments;

- our capital expenditure requirements;

- the annual distribution requirements under the real estate investment
trust provisions of the Internal Revenue Code; and

- other factors as we deem relevant.

Although we intend to continue to make distributions so that MeriStar
Hospitality Corporation may satisfy the annual distribution requirement to avoid
corporate income taxation on the earnings that it in turn distributes, we may
not be able to do so.

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If we were subject to federal income taxation as a corporation, our ability to
make payments on the exchange notes could be substantially reduced

We currently are classified as a partnership for federal income tax
purposes. Although we are organized and operated with a view to maintaining that
status, if the Internal Revenue Service were successfully to determine that we
should properly be treated for federal income tax purposes as a corporation
rather than as a partnership, we would be required to pay federal income tax at
corporate tax rates on our taxable income. To the extent that distributions
already had been made to our partners, and, as described above, we generally
expect to make distributions to our partners each year at least equal to the
amount of our taxable income so that MeriStar Hospitality Corporation can make
distributions to its stockholders sufficient to avoid federal income and excise
taxes, we might be required to borrow funds or to liquidate assets to pay the
applicable corporate income tax. This treatment could substantially reduce the
amount of cash available for payments on the notes. In addition to the direct
impact on us, our treatment as a corporation for federal income tax purposes
would also cause MeriStar Hospitality Corporation to cease to qualify as a real
estate investment trust, which would have the possible results described below.

If MeriStar Hospitality Corporation fails to qualify as a real estate
investment trust, it will be subject to federal income tax at corporate rates
and its ability to satisfy its obligations as a guarantor of the notes might
be impaired

Qualification as a real estate investment trust involves the application of
highly technical and complex provisions of the Internal Revenue Code of 1986 for
which there are only limited judicial and administrative interpretations. In
addition, there are not yet any judicial or administrative interpretations of
the federal tax legislation enacted in 1999 with respect to our taxable REIT
subsidiaries. The determination of various factual matters and circumstances not
entirely within the control of MeriStar Hospitality Corporation may affect its
ability to continue to qualify as a real estate investment trust. The complexity
of these provisions and of the applicable income tax regulations that have been
promulgated under the Internal Revenue Code is greater in the case of a real
estate investment trust that holds its assets through a partnership, such as
MeriStar Hospitality Corporation does. Moreover, legislation, new regulations,
administrative interpretations or court decisions might change the tax laws with
respect to qualification as a real estate investment trust or the federal income
tax consequences of that qualification.

If MeriStar Hospitality Corporation fails to qualify as a real estate
investment trust in any taxable year, it will not be allowed a deduction for
distributions to its stockholders in computing its taxable income and it will be
subject to federal income tax, including any applicable alternative minimum tax,
on its taxable income at the applicable corporate rate. In addition, unless it
was entitled to relief under statutory provisions, it would be disqualified from
treatment as a real estate investment trust for the four taxable years following
the year during which qualification is lost. This disqualification might reduce
the funds available to MeriStar Hospitality Corporation to satisfy any
obligations it might have as a guarantor of the notes because of the additional
tax liability for the year or years involved. In addition, to the extent that
distributions to stockholders would have been made in anticipation of MeriStar
Hospitality Corporation qualifying as a real estate investment trust, it might
be required to borrow funds or to liquidate assets to pay the applicable
corporate income tax, including assets held by us.

ADDITIONAL RISKS RELATING TO OUR BUSINESS AND THE EXCHANGE OFFER

We rely on the knowledge and experience of some key personnel, and the loss of
these personnel may have a material adverse effect on our operations

We place substantial reliance on the lodging industry knowledge and
experience and the continued services of our senior management, led by Paul W.
Whetsell and John Emery. While we believe that, if necessary, we could find
replacements for these key personnel, the loss of their services could have a
material adverse effect on our operations. In addition, Messrs. Whetsell and
Emery are currently engaged, and in the future will continue to engage, in the
management of MeriStar Hotels & Resorts.

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Messrs. Whetsell and Emery may experience conflicts of interest in allocating
management time, services and functions between us and MeriStar Hotels &
Resorts.

If we are deemed to be in violation of fraudulent transfer or conveyance laws
at the time of the issuance of the exchange notes and the related guarantees,
our ability and the ability of MeriStar Hospitality Corporation and the other
guarantors to make payments on the exchange notes and the guarantees will be
impaired substantially

Under applicable provisions of the United States Bankruptcy Code or
comparable provisions of state fraudulent transfer and conveyance laws, if an
obligor under the exchange notes or the related guarantees, at the time it
issued the instrument,

(a) incurred indebtedness with the actual intent to hinder, delay or
defraud creditors or

(b)(1) received less than reasonably equivalent value or fair
consideration for the instrument, and

(2)(A) was insolvent at the time of the incurrence,

(B) was rendered insolvent by reason of the incurrence and the
application of its proceeds,

(C) was engaged or were about to engage in a business or
transaction for which the assets remaining with us constituted
unreasonably small capital to carry on its business, or

(D) intended to incur, or believed that it would incur, debts
beyond its ability to pay as they mature,

then, in each case, a court of competent jurisdiction could avoid, in whole or
in part, the exchange notes or the guarantees or, in the alternative, fashion
other equitable relief. The measure of insolvency for purposes of the above
would likely vary depending upon the law applied. Generally, however, an entity
would be considered insolvent if the sum of its debts, including contingent
liabilities, was greater than all of its assets at a fair valuation, or if the
present fair-saleable value of its assets was less than the amount that would be
required to pay the probable liabilities on its existing debts, including
contingent liabilities, as these debts become absolute and matured. We believe
that, for purposes of the United States Bankruptcy Code and state fraudulent
transfer and conveyance laws, the exchange notes and the guarantees are being
issued without the intent to hinder, delay or defraud creditors and for proper
purposes and in good faith; that we and the guarantors will receive reasonably
equivalent value or fair consideration for the exchange notes and guarantees and
that, after the issuance of the exchange notes and the guarantees and the
application of the net proceeds of the exchange notes and the guarantees, we and
the guarantors will be solvent, will have sufficient capital for carrying on our
business and will be able to pay debts as they mature. However, a court passing
on these issues might not agree with the determination of our management.

There may not be a public market for the exchange notes

You may not be able to sell your exchange notes at a particular time, and
the prices that you receive when you sell may not be favorable. We also cannot
assure you as to the level of liquidity of the trading market for the exchange
notes or, in the case of any holders of notes that do not exchange them, the
trading market for the initial notes following completion of the exchange offer.

Furthermore, the liquidity of the trading market in the exchange notes and
the market price quoted for the exchange notes, may be adversely affected by
changes in the overall market for high yield securities and by changes in our
financial performance or prospects or in the prospects for companies in our
industry generally.

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The issuance of the exchange notes may adversely affect the market for the
initial notes

Following commencement of the exchange offer, you may continue to trade the
initial notes in the Private Offerings, Resales and Trading through Automated
Linkages market. If initial notes are tendered for exchange and accepted in the
exchange offer, the trading market for the untendered and tendered but
unaccepted initial notes could be adversely affected. Please refer to the
section in this prospectus entitled "The Exchange Offer -- Your failure to
participate in the exchange offer will have adverse consequences."

Your failure to participate in the exchange offer will have adverse
consequences

The initial notes were not registered under the Securities Act or under the
securities laws of any state and you may not resell them, offer them for resale
or otherwise transfer them unless they are subsequently registered or resold
under an exemption from the registration requirements of the Securities Act and
applicable state securities laws. If you do not exchange your initial notes for
exchange notes pursuant to this exchange offer, or if you do not properly tender
your initial notes in this exchange offer, you will not be able to resell, offer
to resell or otherwise transfer the initial notes unless they are registered
under the Securities Act or unless you resell them, offer to resell or otherwise
transfer them under an exemption from the registration requirements of, or in a
transaction not subject to, the Securities Act. In addition, you may no longer
be able to obligate us to register the initial notes under the Securities Act,
except in the limited circumstances provided under our registration rights
agreements.

Some persons who participate in the exchange offer must deliver a prospectus
in connection with resales of the exchange notes

Based on certain no-action letters issued by the staff of the Securities
and Exchange Commission, we believe that you may offer for resale, resell or
otherwise transfer the exchange notes without compliance with the registration
and prospectus delivery requirements of the Securities Act. However, in some
instances described in this prospectus under "The Exchange Offer," you will
remain obligated to comply with the registration and prospectus delivery
requirements of the Securities Act to transfer your exchange notes. In these
cases, if you transfer any exchange note without delivering a prospectus meeting
the requirements of the Securities Act or without an exemption from registration
of your exchange notes under the Securities Act, you may incur liability under
this act. We do not and will not assume, or indemnify you against, this
liability.

Risks Relating to Forward-Looking Statements

Some of the statements we have made in this prospectus under the sections
entitled "Summary," "Risk Factors," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Business" are
forward-looking. They include statements about our expectations, beliefs, plans,
objectives, assumptions or future events or performance. These forward-looking
statements are based on our expectations and are susceptible to a number of
risks and uncertainties. Some of these risks and uncertainties are beyond our
control. Our actual results may differ materially from those suggested by these
forward-looking statements for various reasons, including those discussed under
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," "Business" and in this "Risk Factors" section.

Because of the preceding and other factors, we cannot give any assurance as
to future results, levels of activity and achievements. Neither we nor any other
person assumes responsibility for the accuracy and completeness of these
forward-looking statements. Any forward-looking statements in this prospectus
speak solely as of the date on which those statements are made.

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RISKS RELATING TO THE FELCOR MERGER

The integration of our operations with FelCor's will make substantial demands
on FelCor's resources, which could divert needed attention away from its other
operations

Our integration with FelCor will make substantial demands on FelCor's
management, operational resources and financial and internal control systems.
FelCor's future operating results will depend in part on its ability to continue
to implement and improve its operating and financial controls. The devotion of
management's time to our integration may limit the time available to management
to attend to other operational, financial and strategic issues of FelCor.

Statements regarding the increased earnings estimates, the anticipated
operating efficiencies, cost savings and other benefits FelCor expects to
realize from our integration are forward-looking statements. Actual results for
the combined operations could differ materially from results currently
anticipated depending upon, among other things:

- FelCor's and our future revenues, expenses and other operating results;

- FelCor's and our ability to maintain present efficiency levels and
realize expected cost savings and synergies;

- unforeseen costs and expenses incurred in connection with our integration
into FelCor; and

- economic or competitive uncertainties and contingencies.

There may be undisclosed liabilities in connection with the merger

We may be subject to undisclosed or otherwise unforeseen environmental,
tax, pension, litigation or other liabilities which are not known to us, or we
may underestimate the liabilities of FelCor of which we are aware. If unknown
liabilities materialize or known liabilities are greater than are currently
estimated, they could result in a material adverse effect on the combined
company's business, financial condition and results of operations and, going
forward, could adversely affect the results of the combined company and its
ability to meet its obligations under the exchange notes.

Our operations may not be integrated successfully with those of FelCor, and
intended benefits of the merger may not be realized, which could have a
negative impact on the ability of FelCor to meet its obligations under the
exchange notes

The future operations and earnings of the combined company will depend in
part on FelCor's ability to integrate our properties into its system and
operations and realize synergies and cost savings. If FelCor fails to integrate
our operations successfully and/or fails to realize the intended benefits of the
merger, FelCor's ability to meet its obligations under the exchange notes could
decrease. In order to achieve the anticipated benefits of the merger, FelCor
will need to:

- realize the anticipated $5 million of annual cost savings in general and
administrative expenses from reductions in personnel, closing and
subletting our corporate offices and the elimination of other duplicate
overhead costs;

- capitalize on increased purchasing power, including for furniture,
fixtures, equipment, insurance and utilities;

- leverage the increased scale in brand negotiations; and

- effectively control the progress of the integration process and the
associated costs.

FelCor's assessment of the potential synergies and cost savings is
preliminary and subject to change. FelCor may need to incur additional costs to
realize them, none of which costs are currently expected to be material.

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FelCor's and our ability to grow may be limited by our ability to attract debt
financing.

Recently, FelCor and we have focused on our internal growth strategies,
which include the renovation, redevelopment and rebranding of hotels to achieve
improved revenue performance. Each of FelCor and us may not be able to fund
growth solely from cash provided from operating activities because each of
FelCor and MeriStar Hospitality Corporation must distribute at least 90% of
their taxable income each year to maintain their status as REITs. Consequently,
FelCor and we rely upon the availability of debt or equity capital to fund hotel
acquisitions and improvements and may be dependent upon its ability to attract
debt financing from public or institutional lenders. FelCor intends to continue
to operate the combined company as a REIT following the merger. FelCor may not
be successful in attracting sufficient debt financing to fund future growth at
an acceptable cost. In addition, FelCor currently has, and expects to continue
following the merger, a policy of limiting debt to not more than 55% of its
investment in hotel assets, at cost. This policy is a board policy only and not
a requirement contained in FelCor's organizational documents. Accordingly, the
policy may be modified or waived by the board, which it has done previously,
increasing the limitation from 40% in June 1998 to 50% in February 2000 and to
its current 55% in May 2001. Unless further waived or modified by its board of
directors, this limitation could also limit FelCor's ability to incur additional
debt to fund its continued growth. At June 30, 2001, on a pro forma basis,
FelCor's consolidated debt represented 50.5% of its investment in hotels at
cost.

FelCor may be unable to complete planned financings for the merger

FelCor intends to obtain an estimated $1.4 billion of financing in
connection with the FelCor merger. In addition, FelCor has obtained a commitment
for $500 million of financing which will be available for use to fund, if
necessary, FelCor's obligation to repurchase up to $500 million of our
outstanding senior notes after the merger. FelCor has completed $963 million of
these planned financings, but has only commitments from lenders for $825 million
of the financings. These commitments are subject to final documentation.
Additionally, FelCor has a term sheet but no commitments for $100 million of
financing in the form of the sale of its perpetual preferred stock. FelCor may
be unable to complete all of these committed or uncommitted financings.

FelCor may not be able to close committed financings necessary to enable it to
make required offers to purchase all of our outstanding notes as a result of
the merger

The terms of approximately $859.3 million in aggregate principal amount of
our notes and MeriStar Hospitality Corporation's convertible subordinated notes
and subordinated notes will require FelCor and FelCor LP to make offers to
repurchase those notes because of the completion of the FelCor merger. FelCor
has obtained commitments for financing sufficient to repurchase all of the notes
that may be tendered for repurchase. However, the commitments that it has
obtained are subject to final documentation and may not be completed. The offers
to purchase must be made within ten days after the FelCor merger occurs, and the
purchases must be completed within 30 to 60 days after the offers are made.
FelCor currently expects, based on the market prices, that the holders of
MeriStar Hospitality Corporation's convertible subordinated notes, of which
$154.3 million in principal amount is outstanding, and MeriStar Hospitality
Corporation's subordinated notes, of which $205.0 million in principal amount is
outstanding, will accept FelCor's offer to repurchase. If all of these notes are
tendered, FelCor will have to pay 100% of the principal amount of the
convertible subordinated notes and 101% of the principal amount of the
subordinated notes plus, in each case, accrued interest. Based on the current
market price of the notes in the principal amount of $500 million, we cannot
predict at this time whether the holders of our notes will tender them under the
offers. If those noteholders tender their notes in that offer, FelCor LP will be
required to redeem the tendered notes at 101% of their principal amount of $500
million outstanding plus accrued interest.

Failure to obtain consents from our franchisors may result in termination
payments

As a condition to the FelCor merger, we must obtain the consent of a number
of our franchisors, and obtaining those consents may require additional
expenditures or impose additional conditions. If required

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consents are not obtained, the FelCor merger may not be completed. If the
failure to obtain one or more consents is waived and the FelCor merger is
completed, the related franchises may be terminated, and we may be liable to the
franchisor for termination payments. Assuming all of our franchises were
terminated on June 30, 2001, we estimate that the aggregate of these termination
payments, if required, would be in the range of $120 million to $130 million.
The loss of a substantial number of franchises and the related termination
payments could have a material adverse effect on our results of operations.

FelCor will be adversely affected by concentrations under a limited number
of brands

Following the FelCor merger, FelCor will continue to be subject to the
potential risks associated with concentration of its hotels under a limited
number of brands. A negative public image or other adverse event which becomes
associated with brand could adversely affect hotels operated under that brand.
The following percentage of FelCor's revenues are expected to be generated by
hotels operated under each of the indicated brands, based on revenues for the
twelve months ended June 30, 2001 on a pro forma basis:

- Embassy Suites 21.1%

- Holiday Inns 18.8%

- Hilton and Hilton
Suites 10.8%

- Sheraton and Sheraton
Suites 9.8%

- Crowne Plaza 7.8%

Should any of these brands suffer a significant decline in popularity with the
traveling public, it could affect FelCor's revenues and profitability.

Failure to complete the merger may require, under specified circumstances,
payment of termination fees

The merger is subject to stockholder approval of both FelCor and MeriStar
Hospitality Corporation and other customary conditions. MeriStar Hospitality
Corporation might not be able to satisfy its obligations under the merger
agreement and complete the merger. Failure by MeriStar Hospitality Corporation
to complete the merger, under specified circumstances, may require it to pay a
termination fee and FelCor's expenses in connection with the merger. These
payments could amount to as much as $40 million. In addition, failure to
complete the merger could result in a possible decline in the market price of
our notes to the extent current market prices reflect a market assumption that
the merger will be completed.

The funds from operations of the combined company will be adversely affected
by increased interest expense

Interest expense of the combined company will be increased primarily as a
result of the debt financing of the approximately $225 million in aggregate cash
consideration being paid to MeriStar Hospitality Corporation stockholders and
our unitholders in the merger and the related merger transaction costs and
financing costs of approximately $59 million. On a pro forma basis, for the year
ended December 31, 2000, interest expense of the combined company exceeded
historical levels by approximately $31.2 million. The increase in interest
expense will have a corresponding negative impact on the combined company's
earnings per share and funds from operations.

Failure to complete the merger may result in other adverse consequences to
MeriStar Hospitality Corporation and us

Under the merger agreement, we, MeriStar Hospitality Corporation and FelCor
agreed to some affirmative and negative covenants, including covenants affecting
the conduct of our respective businesses outside the ordinary course of
business. Accordingly, the parties to the merger agreement may forego
opportunities which otherwise would be available had the merger agreement not
been executed. In

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addition, transactions such as the merger can disrupt relationships with
employees and others with whom the parties have existing or prospective
relationships. Accordingly, if the merger agreement is terminated, the ability
of FelCor, MeriStar Hospitality Corporation or us to continue our pre-merger
business plans could be adversely affected. We and MeriStar Hospitality
Corporation expect to incur approximately $10 million, and FelCor expects to
incur $28 million in expenses for the merger and related transactions, which may
not be reimbursable.

FelCor will have geographic concentration in three states which may create
risks of regional economic and weather conditions

FelCor derived approximately 48% of its revenues for the twelve months
ended June 30, 2001 from hotels located in three states: California, Florida and
Texas. As a result of the FelCor merger, on a pro forma basis, the revenue from
these three states for the twelve months ended June 30, 2001, would be
reallocated to reduce the reliance on any one state, but would still account for
approximately 39% of FelCor's revenues. Therefore, following the FelCor merger,
adverse economic or weather conditions in these states will have a greater
effect on FelCor than similar conditions in other states.

After the FelCor merger, additional conflicts of interest will exist

Certain FelCor directors and executive officers. Six Continents Hotels,
formerly Bass Hotels & Resorts, currently manages 90 of FelCor's hotels. Richard
C. North, who joined FelCor Lodging Trust's board during 1998, is the Group
Finance Director of Six Continents, plc, formerly Bass plc, which is the parent
of Six Continents Hotels, and, together with its affiliates, owns FelCor common
stock and FelCor LP units aggregating approximately 16.1% of FelCor's
outstanding common stock and units.

Acquisition of lessees. As a result of the passage of the REIT
Modernization Act, FelCor was able to form taxable REIT subsidiaries, referred
to as TRSs, to acquire the lessee's interest in its existing hotel leases and to
serve as lessees for any hotels acquired after January 1, 2001. A TRS is a fully
taxable corporation which may be owned 100% by a REIT. A TRS generally is
permitted to engage in businesses, own assets and earn income that, if engaged
in, owned or earned by the REIT, might jeopardize REIT status or result in the
imposition of penalty taxes on the REIT. A TRS is permitted to lease hotels from
the related REIT as long as it does not directly or indirectly operate or manage
hotels, except through an independent hotel management company that satisfies
applicable requirements under the federal income tax laws. A TRS generally is
not allowed to act as a licensor or a franchisor of any brand name under which
any hotel is operated.

In December 2000, FelCor sold one hotel and, effective January 1, 2001,
completed the acquisition of leases with respect to 12 hotels that had been
leased to and operated by Six Continents Hotels. In consideration for the
acquisition and termination of these leases and the related management
agreements, 413,585 shares of FelCor common stock valued at approximately $10
million were issued to Six Continents Hotels. FelCor acquired the remaining 88
leases held by Six Continents Hotels, effective July 1, 2001. FelCor has
contributed these leases to its TRSs. In consideration for these 88 leases,
FelCor issued 100 shares of FelCor common stock and caused its subsidiaries to
agree to new long-term management agreements with subsidiaries of Six Continents
Hotels to manage these hotels. The acquisition of the leases held by Six
Continents Hotels involved negotiations between FelCor and Six Continents
Hotels. Richard C. North, a director of FelCor, is the Group Finance Director of
Six Continents, plc. The interest of Six Continents, plc in those negotiations
was in direct conflict with FelCor's interests. Mr. North abstained from
participating in any discussion or vote by FelCor's board relating to these
transactions.

The acquisition of one of FelCor's primary lessees, DJONT Operations
L.L.C., or DJONT, was completed effective January 1, 2001. In consideration for
the acquisition of DJONT, FelCor caused FelCor LP to issue 416,667 units of
limited partnership interest valued at approximately $10 million. The
acquisition of DJONT required negotiations between FelCor and the owners of
DJONT, including Thomas J. Corcoran, FelCor's president and chief executive
officer, and the children of Charles N. Mathewson, a

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director of FelCor. The interests of Mr. Corcoran and Mr. Mathewson were in
direct conflict with FelCor's interests in these negotiations. Accordingly, they
abstained from participation in the discussion and vote by the FelCor board on
this matter.

Adverse tax consequences to some affiliates on a sale of some
hotels. Messrs. Corcoran and Mathewson may incur additional tax liability if
FelCor sells its investments in six hotels that it acquired in July 1994 from
partnerships controlled by these individuals. Consequently, FelCor's interests
could differ from Messrs. Corcoran's and Mathewson's interests in the event that
FelCor considers a sale of any of these hotels. Decisions regarding a sale of
any of these six hotels must be made by a majority of the independent directors.

Departure of key personnel, including Mr. Corcoran, could adversely affect
FelCor's future operating results

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USE OF PROCEEDS

The issuers will not receive any cash proceeds from the issuance of the
exchange notes in exchange for the outstanding initial notes. The issuers are
making this exchange solely to satisfy their obligations under their
registration rights agreements. In consideration for issuing the exchange notes,
the issuers will receive initial notes in like aggregate principal amount.

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CAPITALIZATION

The following table shows our capitalization as of June 30, 2001 and on a
pro forma basis to give effect to the FelCor merger and the related
transactions. We and MeriStar will be the acquired entities, and therefore the
pro forma amounts are those of FelCor LP and FelCor. You should read this table
in conjunction with the consolidated financial statements and related notes that
are included elsewhere in this prospectus or incorporated herein by reference
and the unaudited pro forma combined financial data and related notes that are
included in this prospectus, and the information in the section entitled
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."

<Table>
<Caption>
JUNE 30, 2001
------------------------
ACTUAL PRO FORMA
---------- ----------
(IN THOUSANDS)

Mortgage, capital lease, and other debt(1).................. $ 732,683 $1,429,169
MeriStar LP credit facility................................. 422,000 --
FelCor line of credit....................................... -- 330,373
Senior Notes:
MeriStar LP 9% due 2008(2)............................. 299,123 299,123
MeriStar LP 9 1/8% due 2011(2)......................... 199,244 199,244
FelCor 7 3/8% due 2004................................. -- 124,370
FelCor 7 5/8% due 2007................................. -- 174,569
FelCor 9 1/2% due 2008................................. -- 496,772
FelCor 8 1/2% due 2011................................. -- 595,073
---------- ----------
Total debt........................................ 1,653,050 3,648,693
Redeemable OP units at redemption value..................... 99,898 301,983
Preferred units............................................. -- 393,265
Common units................................................ 1,116,934 2,307,993
---------- ----------
Total capitalization.............................. $2,869,882 $6,651,934
========== ==========
</Table>

(1) Assumes that the holders of $202,623 of senior subordinated notes of
MeriStar Hospitality Corporation and $154,300 of convertible subordinated
notes of MeriStar Hospitality Corporation, the proceeds of which were loaned
to us under intercompany notes of the same amounts, accept the change of
control repurchase offer that FelCor will be required to make following the
FelCor merger. FelCor believes that it has adequate sources of financing to
pay the change of control repurchase price.

(2) Assumes that the holders of our senior notes do not accept the change of
control repurchase offer that FelCor will be required to make following the
merger. In the event that any of the holders of our senior notes accept the
change of control offer, FelCor believes that it will have adequate sources
of financing to pay the change of control repurchase price.

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UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

The following unaudited pro forma financial information show the
adjustments to the results of operations and financial position resulting from
the proposed merger and partnership merger and from the adoption of certain
provisions of the REIT Modernization Act, or RMA, which was enacted on January
1, 2001 and resulted in changes to the federal tax laws relating to real estate
investment trusts.

PRO FORMA COMBINED STATEMENTS OF OPERATIONS -- PARTNERSHIP MERGER

MeriStar LP will be acquired by FelCor LP, and therefore the unaudited pro
forma combined statements of operations are those of FelCor LP. The following
unaudited pro forma combined statements of operations for the six months ended
June 30, 2001 and the year ended December 31, 2000 are based in part upon the
consolidated statements of operations of FelCor LP, DJONT Operations L.L.C., or
DJONT, Bristol Hotels & Resorts Tenant Companies, or Bristol Tenant, and
MeriStar LP for the six months ended June 30, 2001 and the year ended December
31, 2000 included or incorporated by reference in this prospectus, except for
the consolidated statement of operations of Bristol Tenant for the six months
ended June 30, 2001 which was provided by Bristol Tenant.

The Pro Forma Combined Statements of Operations for the six months ended
June 30, 2001 and the year ended December 31, 2000 assumes that all the
following occurred on January 1, 2000:

- FelCor's acquisition of DJONT Operations, LLC, effective January 1, 2001,
for 416,667 units of limited partnership interest in FelCor LP valued at
approximately $10 million;

- FelCor's acquisition of 12 leases held by Six Continents Hotels, formerly
Bass Hotels & Resorts, effective January 1, 2001, for 413,585 of FelCor's
units of limited partnership interest valued at approximately $10
million;

- FelCor's acquisition of the remaining 88 leases held by Six Continents
Hotels, effective July 1, 2001;

- the assignment of the leases from MeriStar Hotels & Resorts to taxable
REIT subsidiaries, or TRSs, of MeriStar LP; and

- the completion of the FelCor LP merger and the related financings and
application of the net proceeds.

The unaudited pro forma combined statements of operations are not
necessarily indicative of what the results of operations actually would have
been if the partnership merger had occurred and the RMA had been enacted at the
beginning of the periods presented. Additionally, the unaudited pro forma
statements of operations do not attempt to present FelCor LP's results of
operations for any future period. The unaudited pro forma financial information
should be read together with the historical consolidated financial statements
and related notes of MeriStar LP and FelCor LP which are included in this
prospectus or incorporated by reference in this prospectus.

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FELCOR LODGING LIMITED PARTNERSHIP

PRO FORMA COMBINED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2001
(UNAUDITED)
(IN THOUSANDS, EXCEPT FOR PER UNIT AMOUNTS)

<Table>
<Caption>
FELCOR LP MERISTAR LP MERGER
POST RMA HISTORICAL ADJUSTMENTS PRO FORMA
(A) (B) (C) TOTAL
--------- ----------- ----------- ----------

Revenues:
Room and suite revenue................................ $635,857 $402,760 $1,038,617
Food and beverage revenue............................. 123,930 145,383 269,313
Other operating departments........................... 40,635 46,005 86,640
Percentage lease revenue.............................. 10,736 10,736
Retail space rental and other revenue................. 1,882 4,967 6,849
-------- -------- ----------
Total revenues.......................................... 802,304 609,851 1,412,155
-------- -------- ----------
Expenses:
Hotel operating expenses:
Room................................................ 147,215 92,287 239,502
Food and beverage expenses.......................... 95,409 103,890 199,299
Other operating departments......................... 17,428 25,241 42,669
Management and incentive fees......................... 35,697 14,779 50,476
Other property operating costs........................ 220,601 153,718 374,319
Property taxes, insurance, and other.................. 77,417 36,902 $ 139(F) 114,458
Corporate expenses.................................... 6,372 4,535 10,907
Depreciation.......................................... 79,513 57,787 (13,950)(D) 123,350
Other merger and lease termination costs.............. 5,104 5,104
-------- -------- -------- ----------
Total operating expenses................................ 679,652 494,243 (13,811) 1,160,084
-------- -------- -------- ----------
Operating income........................................ 122,652 115,608 13,811 252,071
-------- -------- -------- ----------
Interest expense, net................................... 79,977 60,261 8,531(E) 148,769
Swap termination costs.................................. 4,824 9,297 14,121
Writedown of investments................................ 2,112 2,112
Other................................................... 1,242 160(F) 1,402
-------- -------- -------- ----------
Income before equity in income from unconsolidated
entities, minority interests, and gain (loss) on sale
of assets............................................. 37,851 42,696 5,120 85,667
Equity in income from unconsolidated entities........... 6,328 6,328
Minority interests in other partnerships................ (2,282) (6) (2,288)
Gain (loss) on sale of assets, net...................... 2,955 (1,062) 3(F) 1,896
-------- -------- -------- ----------
Net income before extraordinary items................... 44,852 41,628 5,123 91,603
Preferred distributions................................. (12,300) (282) (5,250)(G) (17,832)
-------- -------- -------- ----------
Net income before extraordinary items applicable to
common unitholders.................................... $ 32,552 $ 41,346 $ (127) $ 73,771
======== ======== ======== ==========
Basic per unit data:
Net income before extraordinary items applicable to
common unitholders.................................. $ 0.53 $ 0.74
======== ==========
Weighted average units outstanding.................... 61,628 38,392(H) 100,020
======== ======== ==========
Diluted per unit data:
Net income before extraordinary items applicable to
common unitholders.................................. $ 0.53 $ 0.73
======== ==========
Weighted average units outstanding.................... 62,069 39,283(H) 101,352
======== ======== ==========
</Table>

See notes to pro forma combined statements of operations.

36
42

FELCOR LODGING LIMITED PARTNERSHIP

PRO FORMA COMBINED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2000
(UNAUDITED)
(IN THOUSANDS, EXCEPT FOR PER UNIT AMOUNTS)

<Table>
<Caption>
FELCOR LP MERISTAR LP MERGER
POST RMA POST RMA ADJUSTMENTS PRO FORMA
(I) (J) (C) TOTAL
---------- ----------- ----------- ----------

Revenues:
Room and suite revenue.................................... $1,309,292 $ 782,288 $2,091,580
Food and beverage revenue................................. 261,569 290,792 552,361
Other operating departments............................... 93,352 84,660 178,012
Percentage lease revenue.................................. 20,925 20,925
Retail space rental and other revenue..................... 3,057 18,424 $ 93(F) 21,574
---------- ---------- -------- ----------
Total revenues.............................................. 1,667,270 1,197,089 93 2,864,452
---------- ---------- -------- ----------
Expenses:
Hotel operating expenses:
Room.................................................... 309,234 184,791 494,025
Food and beverage expenses.............................. 200,855 209,962 410,817
Other operating departments............................. 37,172 48,263 85,435
Management and incentive fees............................. 77,214 28,943 106,157
Other property operating costs............................ 437,763 302,347 740,110
Property taxes, insurance, and other...................... 161,999 72,310 234,309
Corporate expenses........................................ 13,267 9,445 22,712
Depreciation.............................................. 161,316 107,362 (19,688)(D) 248,990
---------- ---------- -------- ----------
Total operating expenses.................................... 1,398,820 963,423 (19,688) 2,342,555
---------- ---------- -------- ----------
Operating income............................................ 268,450 233,666 19,781 521,897
---------- ---------- -------- ----------
Interest expense, net....................................... 156,712 120,850 32,442(E) 310,004
Loss on assets held for sale................................ 63,000 63,000
Other....................................................... 3,376 1,622 406(F) 5,404
---------- ---------- -------- ----------
Income before equity in income from unconsolidated entities,
minority interests, and gain (loss) on sale of assets..... 45,362 111,194 (13,067) 143,489
Equity in income from unconsolidated entities............... 11,436 11,436
Minority interests in other partnerships.................... (3,570) 3 (3,567)
Gains on sale of assets..................................... 4,388 3,439 (14)(F) 7,813
---------- ---------- -------- ----------
Net income before extraordinary items....................... 57,616 114,636 (13,081) 159,171
Preferred distributions..................................... (24,682) (565) (10,500)(G) (35,747)
---------- ---------- -------- ----------
Net income before extraordinary items applicable to common
unitholders............................................... $ 32,934 $ 114,071 $(23,581) $ 123,424
========== ========== ======== ==========
Basic per unit data:
Net income before extraordinary items applicable to common
unitholders............................................. $ 0.53 $ 1.23
========== ==========
Weighted average units outstanding...................... 62,301 38,392(H) 100,693
========== ======== ==========
Diluted per unit data:
Net income before extraordinary items applicable to common
unitholders............................................. $ 0.53 $ 1.21
========== ==========
Weighted average units outstanding...................... 62,556 39,283(H) 101,839
========== ======== ==========
</Table>

See notes to pro forma combined statements of operations.

37
43

NOTES TO PRO FORMA COMBINED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2001,
AND THE YEAR ENDED DECEMBER 31, 2000
(UNAUDITED)

(A) Represents FelCor LP's historical results of operations, excluding
extraordinary items, plus the pro forma effect of FelCor LP's acquisition
of 88 hotel leases from Six Continents Hotels as if the acquisition
occurred on January 1, 2000. The computation is as follows (in thousands,
except per share amounts):

<Table>
<Caption>
FELCOR
FELCOR BRISTOL PRO FORMA POST RMA
HISTORICAL(1) TENANT(2) ADJUSTMENTS TOTAL
------------- --------- ----------- --------

Revenues:
Room and suite revenue.............. $365,343 $270,514 $635,857
Food and beverage revenue........... 53,150 70,780 123,930
Other operating departments......... 24,790 15,845 40,635
Percentage lease revenue............ 115,137 $(115,137)(3)
Retail space rental and other
revenue.......................... 1,882 1,882
-------- -------- --------- --------
Total revenues........................ 560,302 357,139 (115,137) 802,304
-------- -------- --------- --------
Expenses:
Hotel operating expenses:
Room............................. 83,404 63,811 147,215
Food and beverage expenses....... 39,141 56,268 95,409
Other operating departments...... 10,922 6,506 17,428
Management and incentive fees......... 12,612 23,085(4) 35,697
Other property operating costs........ 121,642 110,710 (11,751)(5) 220,601
Property taxes, insurance, and
other............................... 76,460 115,924 (114,967)(3) 77,417
Corporate expenses.................... 6,372 6,372
Depreciation.......................... 79,513 79,513
Lease termination costs............... 36,226 (36,226)(6)
-------- -------- --------- --------
Total operating expenses.............. 466,292 353,219 (139,859) 679,652
-------- -------- --------- --------
Operating income...................... 94,010 3,920 24,722 122,652
-------- -------- --------- --------
Interest expense, net................. 79,621 356 79,977
Swap termination costs................ 4,824 4,824
-------- -------- --------- --------
Income (loss) before equity in income
from unconsolidated entities,
minority interests, and gain on sale
of assets........................... 9,565 3,564 24,722 37,851
-------- -------- --------- --------
Equity in income from unconsolidated
entities............................ 6,328 6,328
Minority interests.................... (2,282) (2,282)
Gain on sale of assets, net........... 2,955 2,955
-------- -------- --------- --------
Net income (loss) before extraordinary
items............................... 16,566 3,564 24,722 44,852
Preferred distributions............... (12,300) (12,300)
-------- -------- --------- --------
Net income (loss) before extraordinary
items applicable to common
shareholders........................ $ 4,266 $ 3,564 $ 24,722 $ 32,552
======== ======== ========= ========
Basic per share data:
Net income (loss) before
extraordinary items applicable to
common shareholders.............. $ 0.07 $ 0.53
======== ========
Weighted average units
outstanding...................... 61,628 61,628
======== ========
Diluted per share data:
Net income (loss) before
extraordinary items applicable to
common shareholders.............. $ 0.07 $ 0.53
======== ========
Weighted average units
outstanding...................... 62,069 62,069
======== ========
</Table>

38
44
NOTES TO FELCOR LP PRO FORMA COMBINED STATEMENTS OF OPERATIONS -- (CONTINUED)

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

(1) Represents the historical results of operations of FelCor LP for the six
months ended June 30, 2001, excluding extraordinary items. Effective January
1, 2001, with the enactment of the REIT Modernization Act, FelCor LP had
completed transactions that resulted in its newly formed taxable REIT
subsidiaries acquiring leases for 96 hotels that were previously leased to
either DJONT or Six Continents Hotels, accordingly, the revenues and
expenses associated with these hotels are included in FelCor Partnership's
historical consolidated statement of operations for the six month period
ended June 30, 2001.

(2) Represents the historical results of operations of FelCor LP's hotels leased
to subsidiaries of Six Continents Hotels for the six months ended June 30,
2001, excluding extraordinary items.

(3) Represents the elimination of historical percentage lease revenue and
expense between FelCor LP and Six Continents Hotels. The expense elimination
also includes a $170,000 adjustment of an estimate of property tax expense.

(4) Represents the adjustment required to record the management fees at their
contractual rates. In the negotiation for the acquisition of the 88 leases
and the new long-term management contracts with Six Continents Hotels,
FelCor LP was able to spread the cost of the lease acquisition cost over the
term of the management agreement, by agreeing to pay management fees that
are higher than those paid by FelCor to other managers for comparable
services. Management fees for the 88 hotels are broken out between base
fees, computed at 2% of total hotel revenue plus 5% of room revenue, and an
incentive fee, computed using a formula incorporating hotel net operating
income and FelCor LP's return on its investment in these hotels. The new
management contracts transfer the operating risk and reward of the hotels to
FelCor LP, as compared to the percentage leases, under which FelCor LP
received percentage lease revenue based solely on hotel revenues.
Additionally, under the new management contracts, FelCor LP has the ability
to terminate management contracts for hotels by substituting hotels with
similar revenue streams.

(5) Represents the elimination of historical franchise fees. These agreements
have been replaced with management contracts.

(6) Represents the elimination of lease termination costs associated with the
acquisition of DJONT and Six Continents Hotels leases in January 2001.

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

(B) Represents historical results of operations, excluding extraordinary items.
Effective January 1, 2001, because of the enactment of the REIT
Modernization Act, taxable REIT subsidiaries of MeriStar LP were assigned
the leases on 106 hotels that had previously been held by MeriStar Hotels &
Resorts and entered into management contracts with MeriStar Hotels &
Resorts to manage these hotels. Accordingly, the related hotel revenues,
expenses and management fees are included in MeriStar LP's historical
results of operations for the six month period ended June 30, 2001. Some
reclassifications have been made to conform to the presentation of FelCor
LP's statement of operations.

39
45
NOTES TO FELCOR LP PRO FORMA COMBINED STATEMENTS OF OPERATIONS -- (CONTINUED)

(C) On May 10, 2001, FelCor and MeriStar announced that they had signed a
merger agreement, under which MeriStar will merge with and into FelCor, a
wholly-owned subsidiary of FelCor Partnership will merge with and into
MeriStar LP, and the limited partners of MeriStar LP, other than FelCor and
its subsidiaries, will exchange their interests in MeriStar LP for
interests in FelCor LP and, where applicable, cash. Under the merger
agreement, each holder of MeriStar common stock will receive, for each
share of MeriStar common stock, $4.60 in cash plus 0.784 of a share of
FelCor common stock. Each holder of common units and profits-only
partnership units in MeriStar LP, other than FelCor and its subsidiaries
will receive, for each common unit and profits-only unit, $4.60 in cash
plus 0.784 of a common unit of FelCor LP. Each holder of Class C preferred
units in MeriStar LP will receive, for each unit, $4.60 in cash plus 0.784
of a Series C preferred unit in FelCor LP. Each holder of Class D preferred
units in MeriStar LP will receive, for each unit, one Series D preferred
unit in FelCor LP. Amounts represent adjustments to record the merger and
related transactions as if the merger had occurred on January 1 of the
fiscal period presented. Shares of FelCor common stock and FelCor LP common
units are valued at $22.10, the closing price of FelCor common stock on the
date of the announcement. The calculation of the merger acquisition cost is
as follows (in thousands, except share and unit data):

<Table>

Issuance of 37.636 million common units of FelCor LP units
in exchange for 48.0 million common and profits-only units
of MeriStar LP............................................ $ 831,759
Issuance of 755,954 FelCor Partnership Series C preferred
units in exchange for 964,227 MeriStar LP Class C
preferred units........................................... 16,707
Payment of $4.60 per unit of MeriStar LP common units, Class
C preferred units and profits-only units.................. 225,260
Issuance of 392,157 FelCor LP Series D preferred units in
exchange for a like number of MeriStar LP Class D
preferred units........................................... 8,690
Issuance of 3.6 million FelCor stock options based on a
0.784 exchange ratio in exchange for MeriStar stock
options, assuming all MeriStar option holders are not
retained by FelCor........................................ 10,600
Assumption of MeriStar's liabilities........................ 1,874,936
Transaction costs........................................... 39,600
----------
Total merger acquisition cost............................... $3,007,552
==========
</Table>

The following is a calculation of estimated transaction costs (in
thousands):

<Table>

Financial advisory fees..................................... $ 12,000
Consent payments in connection with debt agreements......... 10,600
Severance and noncompete payments........................... 8,000
Legal fees.................................................. 3,000
Accounting fees............................................. 1,000
Mailing and filing fees..................................... 1,000
Other....................................................... 4,000
----------
Transaction costs................................. $ 39,600
==========
</Table>

(D) Represents the reduction in historical depreciation associated with the
allocation of the purchase price of MeriStar LP. The allocation of basis to
the assets acquired from MeriStar LP is as follows (in thousands):

<Table>

Total merger acquisition cost............................... $3,007,552
Less: non-real estate assets acquired at historical cost
(which approximates fair value)........................... 202,203
----------
Allocation to investment in hotels.......................... $2,805,349
==========
</Table>

40
46
NOTES TO FELCOR LP PRO FORMA COMBINED STATEMENTS OF OPERATIONS -- (CONTINUED)

The basis is anticipated to be allocated $280.5 million to land, $2,384.6
million to buildings and improvements, and $140.3 million to furniture,
fixtures, and equipment. The depreciable lives assigned to buildings and
improvements are forty years and five years for furniture, fixtures, and
equipment. The adjustment is calculated as follows (in thousands):

<Table>
<Caption>
FOR THE YEAR ENDED FOR THE SIX MONTHS ENDED
DECEMBER 31, 2000 JUNE 30, 2001
------------------ ------------------------

Buildings and improvements acquired from
MeriStar Partnership.......................... $ 59,618 $ 29,809
Furniture, fixtures, and equipment acquired from
MeriStar LP................................... 28,056 14,028
--------- --------
87,674 43,837
Historical MeriStar LP depreciation............. (107,362) (57,787)
--------- --------
Net adjustment.................................. $ (19,688) $(13,950)
========= ========
</Table>

(E) Represents the net adjustment to historical interest expense for the
increase in interest expense related to new borrowings, resulting from
merger related transactions offset by reductions in historical interest
expense related to borrowings, that will be repaid with the proceeds of the
new borrowings, along with the push down of interest expense from MeriStar
to MeriStar LP that is not reflected in MeriStar LP's historical interest
expense, see also note (H), as follows (in thousands):

<Table>
<Caption>
INTEREST FOR THE YEAR ENDED FOR THE SIX MONTHS ENDED
RATE DECEMBER 31, 2000 JUNE 30, 2001
-------- ------------------ ------------------------

Increases:
New senior notes of $600,000........ 8.58%(1) $51,052 $22,965
New mortgage debt of $350,000....... (2) 29,540 11,725
Incremental line of credit
borrowings....................... (3) 6,876 1,019
Amortization of deferred financing
costs of new borrowings of
$19,700 over lives of 1-10
years............................ 5,883 2,942
------- -------
Total increases..................... 93,351 38,651
------- -------
Reductions:
FelCor LP $61,744 mortgage debt
repaid........................... (4) 5,340 1,940
MeriStar LP $356,923 notes payable
to MeriStar repaid............... (5) 24,977 12,489
MeriStar LP $227,000 line of credit
repaid........................... (6) 16,753 8,535
MeriStar LP $195,000 term loans
repaid........................... (6) 16,318 7,739
Historical interest capitalized by
MeriStar LP...................... (5,805) (2,876)
Historical amortization of MeriStar
LP deferred financing costs...... 4,585 2,293
------- -------
Total reductions.................... 62,168 30,120
------- -------
31,183 8,531
Plus push down of interest expense.... 1,259(7)
------- -------
Net adjustment........................ $32,442 $ 8,531
======= =======
</Table>

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

(1) Represents effective fixed rate on notes issued in May 2001.

(2) Represents estimated variable rate of LIBOR plus 200 basis points rate to be
committed by lender. Weighted average 30 day LIBOR was 6.44% for the year
ended December 31, 2000 and 4.70% for the six months ended June 30, 2001. An
increase of 0.125% in interest rates would increase interest expense and
decrease net income by $437,500 and $218,750 for the year ended December 31,
2000 and the six months ended June 30, 2001 respectively.
41
47
NOTES TO FELCOR LP PRO FORMA COMBINED STATEMENTS OF OPERATIONS -- (CONTINUED)

(3) Represents contractual variable rate of LIBOR plus 200 basis points. On a
proforma basis, FelCor LP will have a balance outstanding on the line of
credit of $330,373 for the periods presented. This adjustment represents the
incremental interest on this balance in excess of historical amounts.

(4) Represents the weighted average historical rates which were approximately
8.44% and 6.70% for the periods ended December 31, 2000 and June 30, 2001,
respectively.

(5) Represents contractual fixed rates of 8.71% on subordinated notes with a
principal balance of $202.5 million and 4.75% on convertible notes with a
principal balance of $154.3 million.

(6) Represents the historical weighted average interest rates (adjusted for
historical interest rate hedges) for the periods presented are as follows:

<Table>
<Caption>
2000 2001
----- -----

Line of credit....................................... 7.38% 7.52%
$121 million term loan............................... 8.30% 7.82%
$74 million term loan................................ 8.48% 8.13%
</Table>

FelCor LP expects to assume approximately $500 million of MeriStar LP's
senior notes and approximately $374 million of mortgage debt of MeriStar
LP's subsidiaries in connection with the merger.

(7) See note (F).

(F) FelCor has no assets, liabilities, revenues or expenses other than those
derived from its ownership of FelCor LP. MeriStar has miscellaneous assets,
liabilities, revenues and expenses other than those derived from its
ownership of MeriStar LP. Upon completion of the merger and related
transactions, FelCor will contribute to FelCor LP all assets and
liabilities acquired; accordingly these miscellaneous adjustments are made
to reflect the contribution of the items historically reported only at the
MeriStar level.

(G) Represents distributions on the proposed issuance of $100 million of Series
E cumulative redeemable preferred units at an assumed distribution rate of
10.5%. An increase of 0.125% in the distribution rate would increase the
preferred distributions and decrease net income by $125,000 and $62,500 for
the year ended December 31, 2000 and the six months ended June 30, 2001,
respectively.

(H) Represents the impact of additional units issued in the merger on a basic
and diluted basis, and the dilutive effect of FelCor stock options issued
to MeriStar option holders as follows (in thousands):

<Table>

Basic
Units issued to MeriStar LP unitholders................... 38,392
------
Adjustment to weighted average units-basic................ 38,392
Diluted
Dilutive effect of options issued to MeriStar
optionholders.......................................... 891
------
Adjustment to weighted average units-diluted................ 39,283
======
</Table>

42
48
NOTES TO FELCOR LP PRO FORMA COMBINED STATEMENTS OF OPERATIONS -- (CONTINUED)

(I) Represents FelCor LP's historical results of operations, excluding
extraordinary items, plus the pro forma effect of FelCor LP's acquisition
of DJONT and 100 hotel leases from Six Continents Hotels as if the
acquisition occurred on January 1, 2000. The computation is as follows (in
thousands, except per share amounts):

<Table>
<Caption>
DJONT
FELCOR LP OPERATIONS, BRISTOL BRISTOL TENANT BRISTOL
HISTORICAL LLC TENANT PREDECESSOR TOTAL ELIMINATIONS
(1) (2) (3) (4) HISTORICAL (5)
---------- ----------- -------- -------------- ---------- ------------

Revenues:
Room and suite revenue........... $709,793 $461,978 $143,952 $1,315,723 $ (6,431)
Food and beverage revenue........ 112,612 115,176 36,645 264,433 (2,864)
Other operating departments...... 56,476 31,859 5,401 93,736 (384)
Percentage lease revenue......... $536,907 536,907
Retail space rental and other
revenue........................ 3,057 3,057
-------- -------- -------- -------- ---------- --------
Total revenues.................... 539,964 878,881 609,013 185,998 2,213,856 (9,679)
-------- -------- -------- -------- ---------- --------
Expenses:
Hotel operating expenses:
Room............................. 169,531 109,074 32,163 310,768 (1,534)
Food and beverage expenses....... 84,602 90,025 28,190 202,817 (1,962)
Other operating departments...... 22,168 11,267 3,859 37,294 (122)
Management and incentive fees..... 24,766 16,770 5,589 47,125 (76)
Other property operating costs.... 236,186 178,234 53,903 468,323 (5,929)
Percentage lease expense.......... 277,491 197,210 62,206 536,907
Property taxes, insurance, and
other............................ 89,257 70,498 2,128 710 162,593 (594)
Corporate expenses................ 12,256 1,011 13,267
Depreciation...................... 160,745 572 161,317 (1)
-------- -------- -------- -------- ---------- --------
Total operating expenses.......... 262,258 886,825 604,708 186,620 1,940,411 (10,218)
-------- -------- -------- -------- ---------- --------
Operating income (loss)........... 277,706 (7,944) 4,305 (622) 273,445 539
-------- -------- -------- -------- ---------- --------
Interest expense, net............. 156,712 618 (133) (35) 157,162 168
Loss on assets held for sale...... 63,000 63,000
Other............................. 3,376 3,376
-------- -------- -------- -------- ---------- --------
Income (loss) before equity in
income from unconsolidated
entities, minority interests, and
gain on sale of assets........... 54,618 (8,562) 4,438 (587) 49,907 371
-------- -------- -------- -------- ---------- --------
Equity in income from
unconsolidated entities.......... 14,820 593 15,413
Minority interests................ (3,570) (3,243) (6,813)
Gain on sale of assets............ 4,388 4,388
Income tax expense (benefit)...... 2,798 (267) 2,531
-------- -------- -------- -------- ---------- --------
Net income (loss) before
extraordinary items.............. 70,256 (11,212) 1,640 (320) 60,364 371
Preferred distributions........... (24,682) (24,682)
-------- -------- -------- -------- ---------- --------
Net income (loss) before
extraordinary items applicable to
common shareholders.............. $ 45,574 $(11,212) $ 1,640 $ (320) $ 35,682 $ 371
======== ======== ======== ======== ========== ========
Basic per share data:
Net income before extraordinary
items applicable to common
shareholders................... $ 0.73
========
Weighted average shares
outstanding.................... 62,301
========
Diluted per share data:
Net income before extraordinary
items applicable to common
shareholders................... $ 0.73
========
Weighted average shares
outstanding.................... 62,556
========

PROFORMA FELCOR LP
ADJUSTMENTS POST RMA TOTAL
----------- --------------

Revenues:
Room and suite revenue........... $1,309,292
Food and beverage revenue........ 261,569
Other operating departments...... 93,352
Percentage lease revenue......... $(536,907)(6)
Retail space rental and other
revenue........................ 3,057
--------- ----------
Total revenues.................... (536,907) 1,667,270
--------- ----------
Expenses:
Hotel operating expenses:
Room............................. 309,234
Food and beverage expenses....... 200,855
Other operating departments...... 37,172
Management and incentive fees..... 30,165(7) 77,214
Other property operating costs.... (24,631)(8) 437,763
Percentage lease expense.......... (536,907)(6)
Property taxes, insurance, and
other............................ 161,999
Corporate expenses................ 13,267
Depreciation...................... 161,316
--------- ----------
Total operating expenses.......... (531,373) 1,398,820
--------- ----------
Operating income (loss)........... (5,534) 268,450
--------- ----------
Interest expense, net............. (618)(9) 156,712
Loss on assets held for sale...... 63,000
Other............................. 3,376
--------- ----------
Income (loss) before equity in
income from unconsolidated
entities, minority interests, and
gain on sale of assets........... (4,916) 45,362
--------- ----------
Equity in income from
unconsolidated entities.......... (3,977)(10) 11,436
Minority interests................ 3,243(11) (3,570)
Gain on sale of assets............ 4,388
Income tax expense (benefit)...... (2,531)(12)
--------- ----------
Net income (loss) before
extraordinary items.............. (3,119) 57,616
Preferred distributions........... (24,682)
--------- ----------
Net income (loss) before
extraordinary items applicable to
common shareholders.............. $ (3,119) $ 32,934
========= ==========
Basic per share data:
Net income before extraordinary
items applicable to common
shareholders................... $ 0.53
==========
Weighted average shares
outstanding.................... 62,301
==========
Diluted per share data:
Net income before extraordinary
items applicable to common
shareholders................... $ 0.53
==========
Weighted average shares
outstanding.................... 62,556
==========
</Table>

43
49
NOTES TO FELCOR LP PRO FORMA COMBINED STATEMENTS OF OPERATIONS -- (CONTINUED)

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

(1) Represents the historical results of operations of FelCor LP for the year
ended December 31, 2000. Certain amounts have been reclassified to conform
to the June 30, 2001 presentation with no effect on previously reported net
income.

(2) Represents the historical results of operations of DJONT for the year ended
December 31, 2000. Certain amounts have been reclassified to conform to the
June 30, 2001 presentation with no effect on previously reported net
income.

(3) Represents the historical results of operations of Bristol Tenant for the
nine months ended December 31, 2000. Certain amounts have been reclassified
to conform to the June 30, 2001 presentation with no effect on previously
reported net income.

(4) Represents the historical results of operations of Bristol Tenant
Predecessor for the three months ended March 31, 2000. Certain amounts have
been reclassified to conform to the June 30, 2001 presentation with no
effect on previously reported net income.

(5) Represents adjustment to eliminate historical amounts related to (i) a
hotel leased by Bristol Tenant not owned by FelCor LP and (ii) a hotel
owned by FelCor LP but sold in December 2000.

(6) Represents the elimination of historical percentage lease revenues and
expenses between FelCor LP and the lessees.

(7) Represents the adjustment required to record the management fees at their
contractual rates. In the negotiation for the acquisition of the 88 leases
and the new long-term management contract with Six Continents Hotels,
FelCor LP was able to spread the cost of the lease acquisition cost over
the term of the management agreement, by agreeing to pay management fees
that are higher than those paid by FelCor to other managers for comparable
services. Management fees for the 88 hotels are broken out between a base
fee, computed at 2% of total hotel revenue plus 5% of room revenue, and an
incentive fee, computed using a formula incorporating hotel net operating
income and FelCor LP's return on its investment in these hotels. The new
management contracts transfer the operating risk and reward of the hotels
to FelCor LP, as compared to percentage leases, under which FelCor LP
received percentage lease revenue based solely on hotel revenues.
Additionally, under the new management contracts, FelCor LP has the ability
to terminate management contracts for hotels by substituting hotels with
similar revenue streams.

(8) Represents the elimination of historical franchise fees paid to Bristol
Tenant. These agreements have been replaced with management contracts.

(9) Represents the elimination of $618,000 in interest expense paid by DJONT to
FelCor.

(10) Represents the elimination of FelCor LP's equity in income of DJONT's
consolidated subsidiary.

(11) Represents the elimination of the DJONT minority interest of $3,243,000
represented by FelCor LP's ownership discussed in (10) above.

(12) Represents the elimination of the historical tax provisions of the Bristol
Tenant lessees due to the pro forma taxable loss of the TRSs. No benefit
has been recorded for deferred taxes related to these losses due to the
uncertainty of their recoverability, because based on the weight of
available evidence, FelCor LP management has determined it is more likely
than not that the entire balance of deferred tax assets will not be
realized by the TRSs.

44
50
NOTES TO FELCOR LP PRO FORMA COMBINED STATEMENTS OF OPERATIONS -- (CONTINUED)

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

(J) Represents MeriStar LP's historical results of operations, excluding
extraordinary items, plus the pro forma effect of MeriStar LP's acquisition
of 106 hotel leases from MeriStar Hotels & Resorts as if the acquisition
occurred on January 1, 2000. The computation is as follows (in thousands):

<Table>
<Caption>
MERISTAR LP
HISTORICAL PRO FORMA MERISTAR LP
(1) ADJUSTMENTS POST RMA
----------- ----------- -----------

Revenues:
Room and suite revenue.............................. $ 782,288(2) $ 782,288
Food and beverage revenue........................... 290,792(2) 290,792
Other operating departments......................... 84,660(2) 84,660
Percentage lease revenue............................ $385,141 (364,216)(3) 20,925
Retail space rental and other revenue............... 15,544 2,880(4) 18,424
-------- --------- ----------
Total revenues........................................ 400,685 796,404 1,197,089
-------- --------- ----------
Expenses:
Hotel operating expenses:
Rooms............................................... 184,791(2) 184,791
Food and beverage expenses.......................... 209,962(2) 209,962
Other operating departments......................... 48,263(2) 48,263
Management and incentive fees......................... 28,943(5) 28,943
Other property operating costs........................ 2,731 299,616(6) 302,347
Property taxes, insurance and other................... 47,481 24,829(2) 72,310
Corporate expenses.................................... 9,445 9,445
Depreciation.......................................... 107,362 107,362
-------- --------- ----------
Total operating expenses.............................. 167,019 796,404 963,423
-------- --------- ----------
Operating income...................................... 233,666 233,666
-------- --------- ----------
Interest expense, net................................. 120,850 120,850
Other................................................. 1,622 1,622
-------- --------- ----------
Income (loss) before minority interest and gain on
sale of assets...................................... 111,194 111,194
Minority interests.................................... 3 3
Gain on sale of assets................................ 3,439 3,439
-------- --------- ----------
Net income (loss) before extraordinary items.......... 114,636 114,636
Preferred distributions............................... (565) (565)
-------- --------- ----------
Net income (loss) before extraordinary items
applicable to common shareholders................... $114,071 $ $ 114,071
======== ========= ==========
</Table>

(1) Represents MeriStar LP's historical results of operations, excluding
extraordinary items. Certain reclassifications have been made to conform to
the presentation of FelCor LP's statement of operations.

(2) Represents the historical hotel revenues and expenses of the 106 hotels
formerly leased to MeriStar Hotels & Resorts.

(3) Represents the elimination of historical percentage lease revenue received
from MeriStar Hotels & Resorts.

(4) Represents historical other hotel revenue of the 106 hotels formerly leased
to MeriStar Hotels & Resorts.

(5) Represents the contractual management fee which will be paid to MeriStar
Hotels & Resorts under the new management agreements. The base management
fee under the agreements is 2.5% of hotel revenues.

45
51
NOTES TO FELCOR LP PRO FORMA COMBINED STATEMENTS OF OPERATIONS -- (CONTINUED)

Until January 1, 2001, MeriStar Hotels & Resorts leased substantially all of
our hotels from MeriStar LP. Under these leases, MeriStar Hotels & Resorts
assumed all of the operating risks and rewards of these hotels and paid
MeriStar LP a percentage of revenue at each hotel under the lease
agreements. Therefore, for financial statement purposes through December 31,
2000, MeriStar Hotels & Resorts recorded all of the operating revenues and
expenses of the hotels in its statements of operations, and we recorded
lease revenue earned under the lease agreements in our statements of
operations. Effective January 1, 2001, MeriStar Hotels & Resorts assigned
the hotel leases to our newly created, wholly owned, taxable REIT
subsidiaries and our taxable REIT subsidiaries in turn, entered into
management agreements with MeriStar Hotels & Resorts to manage these hotels.
As a result of this change in structure, our wholly owned taxable REIT
subsidiaries have assumed the operating risks and rewards of the hotels and
now pay MeriStar Hotels & Resorts a management fee to manage the hotels for
us. For consolidated financial statement purposes, effective January 1,
2001, we now record all of the revenues and expenses of the hotels in our
statement of operations, including a management fee paid to MeriStar Hotels
& Resorts. The terms of the management agreements are designed to
substantially mirror the economics of the former leases.

(6) Represents historical other undistributed operating costs of the 106 hotels
formerly leased to MeriStar Hotels & Resorts.

46
52

PRO FORMA COMBINED BALANCE SHEET -- PARTNERSHIP MERGER

MeriStar LP will be acquired by FelCor LP, and therefore the unaudited pro
forma combined balance sheet is that of FelCor LP. The following unaudited pro
forma combined balance sheet as of June 30, 2001 is based in part upon the
consolidated balance sheets of FelCor LP, and MeriStar LP included or
incorporated by reference herein, and the consolidated balance sheet of Bristol
Tenant which was provided by Bristol Tenant.

The Pro Forma Combined Balance Sheet assumes all of the following occurred
on June 30, 2001:

- FelCor LP's acquisition of the remaining 88 leases held by Six Continents
Hotels, effective July 1, 2001, and;

- the completion of the partnership merger and the related financings and
application of the net proceeds.

The unaudited pro forma balance sheet is not necessarily indicative of what
the financial position actually would have been if the partnership merger had
occurred at June 30, 2001. Additionally, the unaudited pro forma combined
balance sheet does not attempt to present FelCor LP's financial position at any
future date. The unaudited pro forma financial information should be read
together with the historical consolidated financial statements and related notes
of MeriStar LP and FelCor LP which are included in this prospectus or
incorporated by reference herein.

47
53

FELCOR LODGING LIMITED PARTNERSHIP

PRO FORMA COMBINED BALANCE SHEET
AS OF JUNE 30, 2001
(UNAUDITED, IN THOUSANDS)

<Table>
<Caption>
FELCOR LP RMA MERISTAR LP
HISTORICAL ACQUISITION FELCOR LP HISTORICAL MERGER PRO FORMA
(A) (B) POST RMA (C) ADJUSTMENTS(D) TOTAL
----------- ----------- ----------- ----------- -------------- ----------

ASSETS

Net investment in hotels.............. $3,710,694 $3,710,694 $2,867,134 $ (61,785)(E) $6,516,043
Investment in unconsolidated
entities............................ 154,980 154,980 41,714 196,694
Assets held for sale.................. 52,122 52,122 52,122
Cash and cash equivalents............. 64,220 $ 1,471 65,691 20,550 86,241
Restricted cash....................... 323,555 323,555 20,201 (316,460)(F) 27,296
Due from MeriStar Hotels & Resorts.... 10,893 10,893
Note receivable from MeriStar Hotels &
Resorts............................. 36,000 36,000
Accounts receivable................... 46,449 33,924 80,373 57,040 137,413
Prepaid expenses...................... 12,056 1,941 13,997 15,765 29,762
Deferred expenses, net................ 32,201 32,201 15,684 (5,734)(G) 42,151
Other assets.......................... 7,251 5,022 12,273 40(H) 12,313
---------- ------- ---------- ---------- --------- ----------
Total assets.................. $4,403,528 $42,358 $4,445,886 $3,084,981 $(383,939) $7,146,928
========== ======= ========== ========== ========= ==========

LIABILITIES, REDEEMABLE UNITS AND PARTNERS' CAPITAL

Debt.................................. $2,134,093 $2,134,093 $1,653,050 $(138,450)(I) $3,648,693
Distributions payable................. 34,199 34,199 24,245 58,444
Accrued expenses and other............ 146,077 $42,358 188,435 188,161 6,787(H) 383,383
Minority interest in other
partnerships........................ 50,474 50,474 2,693 53,167
---------- ------- ---------- ---------- --------- ----------
Total liabilities............. 2,364,843 42,358 2,407,201 1,868,149 (131,663) 4,143,687
---------- ------- ---------- ---------- --------- ----------
Redeemable units at redemption
value............................... 210,929 210,929 99,898 (8,844)(J) 301,983
---------- ------- ---------- ---------- --------- ----------
Preferred units:
Series A preferred units............ 149,515 149,515 149,515
Series B preferred units............ 143,750 143,750 143,750
New preferred units................. 100,000(K) 100,000
Common units.......................... 1,534,491 1,534,491 1,116,934 (343,432)(L) 2,307,993
---------- ------- ---------- ---------- --------- ----------
Partners' Capital..................... 1,827,756 1,827,756 1,116,934 (243,432) 2,701,258
---------- ------- ---------- ---------- --------- ----------
Total liabilities, redeemable
units and partners'
capital..................... $4,403,528 $42,358 $4,445,886 $3,084,981 $(383,939) $7,146,928
========== ======= ========== ========== ========= ==========
</Table>

See notes to pro forma combined balance sheet.

48
54

NOTES TO FELCOR LP PRO FORMA COMBINED BALANCE SHEET
AS OF JUNE 30, 2001
(UNAUDITED)

(A) Represents the historical consolidated balance sheet of FelCor LP as of
June 30, 2001.

(B) Effective January 1, 2001, with the enactment of the REIT Modernization
Act, FelCor LP had completed transactions that resulted in the newly formed
taxable REIT subsidiaries acquiring leases for 96 hotels that were
previously leased to either DJONT or Six Continents Hotels. Accordingly,
the assets and liabilities associated with these hotels are included in
FelCor LP's historical consolidated balance sheet as of June 30, 2001. In
March 2001, we entered into an agreement with Six Continents Hotels to
acquire the remaining 88 hotel leases effective July 1, 2001. In
consideration for the acquisition of these leases, one of FelCor LP's
taxable REIT subsidiaries entered into long-term management agreements with
Six Continents Hotels with regard to these hotels and issued to Six
Continents Hotels 100 shares of FelCor common stock. The pro forma
adjustment column represents the historical hotel assets and liabilities
associated with the 88 hotels as if the Six Continents Hotels leases were
acquired effective June 30, 2001.

(C) Represents the historical consolidated balance sheet of MeriStar LP as of
June 30, 2001. Some reclassifications have been made to conform to the
presentation of FelCor LP's balance sheet.

(D) On May 10, 2001, FelCor and MeriStar announced that they had signed a
merger agreement, under which MeriStar will merge with and into FelCor, and
a wholly-owned subsidiary of FelCor LP will merge with and into MeriStar LP
and the limited partners of MeriStar LP, other than FelCor and its
subsidiaries, will exchange their interests in MeriStar LP for interests in
FelCor LP and, where applicable, cash. Under the merger agreement, each
holder of MeriStar common stock will receive, for each share of MeriStar
common stock, $4.60 in cash plus 0.784 of a share of FelCor common stock.
Each holder of common units and profits-only partnership units in MeriStar
LP, other than FelCor and its subsidiaries, will receive, for each common
unit and profits-only unit, $4.60 in cash plus 0.784 of a common unit of
FelCor LP. Each holder of Class C preferred units in MeriStar LP will
receive, for each unit, $4.60 in cash plus 0.784 of a Series C preferred
unit in FelCor LP. Each holder of Class D preferred units in MeriStar LP
will receive, for each unit, one Series D preferred unit in FelCor LP.
Shares of FelCor common stock and each FelCor LP common units are valued at
$22.10, the closing price of FelCor common stock on the date of the
announcement. Amounts represent adjustments to record the merger and
related transactions as if the merger had occurred on June 30, 2001. The
calculation of the merger acquisition cost is as follows (in thousands,
except share and unit data):

<Table>

Issuance of 37.636 million common units of FelCor LP in
exchange for 48.0 million common and profits-only units of
MeriStar LP............................................... $ 831,759
Issuance of 755,954 FelCor LP Series C preferred units in
exchange for 964,227 MeriStar LP Class C preferred
units..................................................... 16,707
Payment of $4.60 per unit of MeriStar LP common, Class C
preferred and profits-only units.......................... 225,260
Issuance of 392,157 FelCor LP Series D preferred units in
exchange for a like number of MeriStar LP Class D
preferred units........................................... 8,690
Issuance of 3.6 million FelCor stock options based on a
0.784 exchange ratio in exchange for MeriStar stock
options, assuming all MeriStar option holders are not
retained by FelCor........................................ 10,600
Assumption of MeriStar's liabilities........................ 1,874,936
Transaction costs........................................... 39,600
----------
Total merger acquisition cost............................... $3,007,552
==========
</Table>

49
55
NOTES TO FELCOR LP PRO FORMA COMBINED BALANCE SHEET -- (CONTINUED)

The following is a calculation of estimated transaction costs (in
thousands):

<Table>

Financial advisory fees..................................... $12,000
Consent payments in connection with debt agreements......... 10,600
Severance and noncompete payments........................... 8,000
Legal fees.................................................. 3,000
Accounting fees............................................. 1,000
Mailing and filing fees..................................... 1,000
Other....................................................... 4,000
-------
Transaction costs................................. $39,600
=======
</Table>

(E) Represents the purchase accounting adjustment to the historical carrying
value of MeriStar LP investment in hotels as follows (in thousands):

<Table>

FelCor LP allocation to investment in hotels................ $2,805,349
MeriStar LP historical carrying amount...................... 2,867,134
----------
Adjustment............................................. $ (61,785)
==========
</Table>

(F) Represents the release of a portion of the proceeds of the $600 million
notes placement which will be used to repay MeriStar debt upon the closing
of the merger.

(G) Represents the net effect of the following adjustments (in thousands):

<Table>

Deferred financing costs for new borrowings................. $ 9,950
Elimination of historical MeriStar LP deferred financing
costs..................................................... (15,684)
--------
Adjustment............................................. $ (5,734)
========
</Table>

(H) FelCor has no assets, liabilities, revenues or expenses other than those
derived from its ownership of us. MeriStar has miscellaneous assets,
liabilities, revenues and expenses other than those derived from its
ownership of MeriStar LP. Upon completion of the merger and related
transactions, FelCor will contribute to FelCor LP all assets and
liabilities acquired; accordingly these miscellaneous adjustments are made
to reflect the contribution of the items historically reported only at the
MeriStar level.

(I) Represents the net increase in debt as a result of the merger and related
transactions as follows (in thousands):

<Table>

Issuance of new mortgage debt............................... $ 350,000
Net borrowings on new line of credit........................ 290,473
Repayment of MeriStar LP notes payable to MeriStar.......... (356,923)
Repayment of MeriStar LP line of credit..................... (227,000)
Repayment of MeriStar LP term loans......................... (195,000)
---------
Net Adjustment......................................... $(138,450)
=========
</Table>

The issuance of the $600 million senior notes and the repayment of FelCor
mortgage debt are not included as these transactions were completed prior
to June 30, 2001 and are included in the historical amounts.

50
56
NOTES TO FELCOR LP PRO FORMA COMBINED BALANCE SHEET -- (CONTINUED)

(J) Represents the net change in redeemable units as follows (in thousands):

<Table>

Elimination of MeriStar LP historical balance............... $(99,898)
Record at redemption value of $23.40 at June 30, 2001 2.764
million FelCor LP common units issued in exchange for
3.525 million MeriStar LP common and profits-only units,
issuance of 755,954 FelCor LP Series C preferred units in
exchange for 964,227 MeriStar LP Class C preferred units,
and issuance of 392,157 FelCor LP Series D preferred units
in exchange for a like number of MeriStar LP Class D
preferred units........................................... 91,054
--------
Net adjustment.................................... $ (8,844)
========
</Table>

(K) Represents the proposed issuance of $100 million in Series E cumulative
redeemable preferred units.

(L) Represents the net adjustments resulting from the partnership merger and
related transactions as follows (in thousands, except share and unit data):

<Table>
<Caption>
ADDITIONAL
PAID IN
PARTNERS
CAPITAL
-----------

Issuance of 34.872 million units of FelCor LP in exchange
for 44.480 million units of MeriStar LP................... $ 770,677
Issuance of 3.6 million FelCor stock options in exchange for
MeriStar stock options.................................... 10,600
Elimination of historical MeriStar balances................. (1,116,934)
Offering expenses of new $100,000 of FelCor Series E
cumulative redeemable preferred units..................... (3,200)
Allocation to state redeemable units issued to MeriStar unit
holders at redemption value of $23.40 over issuance value
of $22.10................................................. (4,575)
-----------
Net adjustments................................... $ (343,432)
===========
</Table>

51
57

PRO FORMA COMBINED STATEMENTS OF OPERATIONS -- MERGER

MeriStar will be acquired by FelCor, and therefore the unaudited pro forma
combined statements of operations are those of FelCor. The following unaudited
pro forma combined statements of operations for the six months ended June 30,
2001 and the year ended December 31, 2000 are based in part upon the
consolidated statements of operations of FelCor, DJONT, Bristol Tenant, and
MeriStar for the six months ended June 30, 2001 and the year ended December 31,
2000 incorporated by reference, except for the consolidated statement of
operations of Bristol Tenant for the six months ended June 30, 2001 which was
provided by Bristol Tenant.

The Pro Forma Combined Statements of Operations for the six months ended
June 30, 2001 and the year ended December 31, 2000 assumes that all the
following occurred on January 1, 2000:

- FelCor's acquisition of DJONT, effective January 1, 2001, for 416,667
units of limited partnership interest in FelCor LP valued at
approximately $10 million;

- FelCor's acquisition of 12 leases held by Six Continent Hotels, formerly
Bass Hotels & Resorts, effective January 1, 2001, for 413,585 shares of
FelCor common stock valued at approximately $10 million;

- FelCor's acquisition of the remaining 88 leases held by Six Continent
Hotels, effective July 1, 2001;

- the assignment of the leases from MeriStar Hotels & Resorts to taxable
REIT subsidiaries, or TRSs, of MeriStar; and

- the completion of the MeriStar merger and related financings and the
application of the net proceeds.

The unaudited pro forma combined statements of operations are not
necessarily indicative of what the results of operations actually would have
been if the merger had occurred and the RMA had been enacted at the beginning of
the periods presented. Additionally, the unaudited pro forma combined statements
of operations do not attempt to present FelCor's results of operations for any
future period. The unaudited pro forma financial information should be read
together with the historical consolidated financial statements and related notes
of MeriStar and FelCor which are included in this prospectus or incorporated by
reference in this prospectus.

52
58

FELCOR LODGING TRUST INCORPORATED

PRO FORMA COMBINED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2001
(UNAUDITED)
(IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)

<Table>
<Caption>
FELCOR MERISTAR MERGER
POST RMA HISTORICAL ADJUSTMENTS PRO FORMA
(A) (B) (C) TOTAL
--------- ---------- ----------- ----------

Revenues:
Room and suite revenue............................... $635,857 $402,760 $1,038,617
Food and beverage revenue............................ 123,930 145,383 269,313
Other operating departments.......................... 40,635 46,005 86,640
Percentage lease revenue............................. 10,736 10,736
Retail space rental and other revenue................ 1,882 4,967 6,849
-------- -------- ----------
Total revenues......................................... 802,304 609,851 1,412,155
-------- -------- ----------
Expenses:
Hotel operating expenses:
Room............................................... 147,215 92,287 239,502
Food and beverage expenses......................... 95,409 103,890 199,299
Other operating departments........................ 17,428 25,241 42,669
Management and incentive fees........................ 35,697 14,779 50,476
Other property operating costs....................... 220,601 153,718 374,319
Property taxes, insurance, and other................. 77,417 37,041 114,458
Corporate expenses................................... 6,372 4,535 10,907
Depreciation......................................... 79,513 58,405 $(14,568)(D) 123,350
Other merger and lease termination costs............. 5,104 5,104
-------- -------- -------- ----------
Total operating expenses............................... 679,652 495,000 (14,568) 1,160,084
-------- -------- -------- ----------
Operating income....................................... 122,652 114,851 14,568 252,071
-------- -------- -------- ----------
Interest expense, net.................................. 79,977 60,261 8,531(E) 148,769
Swap termination costs................................. 4,824 9,297 14,121
Writedown of investments............................... 2,112 2,112
Other.................................................. 1,402 1,402
-------- -------- -------- ----------
Income before equity in income from unconsolidated
entities, minority interests, and gain (loss) on sale
of assets............................................ 37,851 41,779 6,037 85,667
Equity in income from unconsolidated entities.......... 6,328 6,328
Minority interests..................................... (7,015) (3,121) (1,680)(F) (11,816)
Gain (loss) on sale of assets, net..................... 2,955 (1,059) 1,896
-------- -------- -------- ----------
Net income before extraordinary items.................. 40,119 37,599 4,357 82,075
Preferred distributions................................ (12,300) (5,250)(G) (17,550)
-------- -------- -------- ----------
Net income before extraordinary items applicable to
common shareholders.................................. $ 27,819 $ 37,599 $ (893) $ 64,525
======== ======== ======== ==========
Basic per share data:
Net income before extraordinary items applicable to
common shareholders................................ $ 0.53 $ 0.74
======== ==========
Weighted average shares outstanding.................. 52,614 34,872(H) 87,486
======== ======== ==========
Diluted per share data:
Net income before extraordinary items applicable to
common shareholders................................ $ 0.53 $ 0.73
======== ==========
Weighted average shares outstanding.................. 53,055 35,763(H) 88,818
======== ======== ==========
</Table>

See notes to pro forma combined statements of operations.

53
59

FELCOR LODGING TRUST INCORPORATED

PRO FORMA COMBINED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2000
(UNAUDITED)
(IN THOUSANDS, EXCEPT FOR PER SHARE AMOUNTS)

<Table>
<Caption>
FELCOR MERISTAR MERGER
POST RMA POST RMA ADJUSTMENTS PRO FORMA
(I) (J) (C) TOTAL
---------- ---------- ----------- ----------

Revenues:
Room and suite revenue............................ $1,309,292 $ 782,288 $2,091,580
Food and beverage revenue......................... 261,569 290,792 552,361
Other operating departments....................... 93,352 84,660 178,012
Percentage lease revenue.......................... 20,925 20,925
Retail space rental and other revenue............. 3,057 18,517 21,574
---------- ---------- ----------
Total revenues...................................... 1,667,270 1,197,182 2,864,452
---------- ---------- ----------
Expenses:
Hotel operating expenses:
Room........................................... 309,234 184,791 494,025
Food and beverage expenses..................... 200,855 209,962 410,817
Other operating departments.................... 37,172 48,263 85,435
Management and incentive fees..................... 77,214 28,943 106,157
Other property operating costs.................... 437,763 302,347 740,110
Property taxes, insurance, and other.............. 161,999 72,310 234,309
Corporate expenses.................................. 13,267 9,445 22,712
Depreciation........................................ 161,316 107,362 $(19,688)(D) 248,990
---------- ---------- -------- ----------
Total operating expenses............................ 1,398,820 963,423 (19,688) 2,342,555
---------- ---------- -------- ----------
Operating income.................................... 268,450 233,759 19,688 521,897
---------- ---------- -------- ----------
Interest expense, net............................... 156,712 122,109 31,183(E) 310,004
Loss on assets held for sale........................ 63,000 63,000
Other............................................... 3,376 2,028 5,404
---------- ---------- -------- ----------
Income before equity in income from unconsolidated
entities, minority interests, and gain on sale of
assets............................................ 45,362 109,622 (11,495) 143,489
Equity in income from unconsolidated entities....... 11,436 11,436
Minority interests.................................. (7,357) (10,240) 516(F) (17,081)
Gains on sale of assets............................. 4,388 3,425 7,813
---------- ---------- -------- ----------
Net income before extraordinary items............... 53,829 102,807 (10,979) 145,657
Preferred distributions............................. (24,682) (10,500)(G) (35,182)
---------- ---------- -------- ----------
Net income before extraordinary items applicable to
common shareholders............................... $ 29,147 $ 102,807 $(21,479) $ 110,475
========== ========== ======== ==========
Basic per share data:
Net income before extraordinary items applicable
to common shareholders......................... $ 0.53 $ 1.23
========== ==========
Weighted average shares outstanding............ 55,264 34,872(H) 90,136
========== ======== ==========
Diluted per share data:
Net income before extraordinary items applicable
to common shareholders......................... $ 0.53 $ 1.21
========== ==========
Weighted average shares outstanding............ 55,519 35,763(H) 91,282
========== ======== ==========
</Table>

See notes to pro forma combined statements of operations.

54
60

NOTES TO FELCOR PRO FORMA COMBINED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2001,
AND THE YEAR ENDED DECEMBER 31, 2000
(UNAUDITED)

(A) Represents FelCor's historical results of operations, excluding
extraordinary items, plus the pro forma effect of FelCor's acquisition of
88 hotel leases from Six Continents Hotels as if the acquisition occurred
on January 1, 2000. The computation is as follows (in thousands, except per
share amounts):

<Table>
<Caption>
FELCOR
FELCOR BRISTOL PRO FORMA POST RMA
HISTORICAL(1) TENANT(2) ADJUSTMENTS TOTAL
------------- --------- ----------- --------

Revenues:
Room and suite revenue............................. $365,343 $270,514 $635,857
Food and beverage revenue.......................... 53,150 70,780 123,930
Other operating departments........................ 24,790 15,845 40,635
Percentage lease revenue........................... 115,137 $(115,137)(3)
Retail space rental and other revenue.............. 1,882 1,882
-------- -------- --------- --------
Total revenues....................................... 560,302 357,139 (115,137) 802,304
-------- -------- --------- --------
Expenses:
Hotel operating expenses:
Room............................................. 83,404 63,811 147,215
Food and beverage expenses....................... 39,141 56,268 95,409
Other operating departments...................... 10,922 6,506 17,428
Management and incentive fees...................... 12,612 23,085(4) 35,697
Other property operating costs..................... 121,642 110,710 (11,751)(5) 220,601
Property taxes, insurance, and other............... 76,460 115,924 (114,967)(3) 77,417
Corporate expenses................................. 6,372 6,372
Depreciation....................................... 79,513 79,513
Lease termination costs............................ 36,226 (36,226)(6)
-------- -------- --------- --------
Total operating expenses............................. 466,292 353,219 (139,859) 679,652
-------- -------- --------- --------
Operating income..................................... 94,010 3,920 24,722 122,652
-------- -------- --------- --------
Interest expense, net................................ 79,621 356 79,977
Swap termination costs............................... 4,824 4,824
-------- -------- --------- --------
Income (loss) before equity in income from
unconsolidated entities, minority interests, and
gain on sale of assets............................. 9,565 3,564 24,722 37,851
-------- -------- --------- --------
Equity in income from unconsolidated entities........ 6,328 6,328
Minority interests................................... (2,870) (4,145)(7) (7,015)
Gain on sale of assets, net.......................... 2,955 2,955
-------- -------- --------- --------
Net income (loss) before extraordinary items......... 15,978 3,564 20,577 40,119
Preferred distributions.............................. (12,300) (12,300)
-------- -------- --------- --------
Net income (loss) before extraordinary items
applicable to common shareholders.................. $ 3,678 $ 3,564 $ 20,577 $ 27,819
======== ======== ========= ========
Basic per share data:
Net income (loss) before extraordinary items
applicable to common shareholders................ $ 0.07 $ 0.53
======== ========
Weighted average shares outstanding................ 52,614 52,614
======== ========
Diluted per share data:
Net income (loss) before extraordinary items
applicable to common shareholders................ $ 0.07 $ 0.53
======== ========
Weighted average shares outstanding................ 53,055 53,055
======== ========
</Table>

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

(1) Represents the historical results of operations of FelCor for the six months
ended June 30, 2001, excluding extraordinary items. Effective January 1,
2001, with the enactment of the REIT Modernization Act, FelCor had completed
transactions that resulted in its newly formed taxable subsidiaries
acquiring leases for 96 hotels that were previously leased to either DJONT
or Six Continents Hotels, accordingly, the revenues and expenses associated
with these hotels are included in FelCor's historical consolidated statement
of operations for the six month period ended June 30, 2001.

55
61
NOTES TO FELCOR PRO FORMA COMBINED STATEMENTS OF OPERATIONS -- (CONTINUED)

(2) Represents the historical results of operations of FelCor hotels leased to
subsidiaries of Six Continents Hotels for the six months ended June 30,
2001, excluding extraordinary items.

(3) Represents the elimination of historical percentage lease revenue and
expense between FelCor and Six Continents Hotels. The expense elimination
also includes a $170,000 adjustment of an estimate of property tax expense.

(4) Represents the adjustment required to record the management fees at their
contractual rates. In the negotiation for the acquisition of the 88 leases
and the new long-term management contracts with Six Continents Hotels,
FelCor LP was able to spread the cost of the lease acquisition cost over the
term of the management agreement, by agreeing to pay management fees that
are higher than those paid by FelCor to other managers for comparable
services. Management fees for the 88 hotels are broken out between a base
fee, computed at 2% of total hotel revenue plus 5% of room revenue, and an
incentive fee, computed using a formula incorporating hotel net operating
income and FelCor's return on its investment in these hotels. The new
management contracts transfer the operating risk and reward of the hotels to
FelCor, as compared to the percentage leases, under which FelCor received
percentage lease revenue based solely on hotel revenues. Additionally, under
the new management contracts, FelCor has the ability to terminate management
contracts for hotels by substituting hotels with similar revenue streams.

(5) Represents the elimination of historical franchise fees. These agreements
have been replaced with management contracts.

(6) Represents the elimination of lease termination costs associated with the
acquisition of DJONT and the Six Continents Hotels leases in January 2001.

(7) Represents the adjustment to record FelCor's minority interest holders share
of the revenues and expenses of the Bristol Tenant lessee and the proforma
adjustments.

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

(B) Represents MeriStar's historical results of operations, excluding
extraordinary items. Effective January 1, 2001, because of the enactment of
the REIT Modernization Act, taxable REIT subsidiaries of MeriStar were
assigned the leases on 106 hotels that had previously been held by MeriStar
Hotels & Resorts and entered into management contracts with MeriStar Hotels
& Resorts to manage these hotels. Accordingly, the related hotel revenues,
expenses and management fees are included in MeriStar's historical results
of operations for the six month period ended June 30, 2001. Certain
reclassifications have been made to conform to the presentation of FelCor's
statements of operations.

56
62
NOTES TO FELCOR PRO FORMA COMBINED STATEMENTS OF OPERATIONS -- (CONTINUED)

(C) On May 10, 2001, FelCor and MeriStar announced that they had signed a
merger agreement, under which MeriStar will merge with and into FelCor, a
wholly-owned subsidiary of FelCor LP will merge with and into MeriStar LP,
and the limited partners of MeriStar LP, other than FelCor and its
subsidiaries, will exchange their interests in MeriStar LP for interests in
FelCor LP and, where applicable, cash. Under the merger agreement, each
holder of MeriStar common stock will receive, for each share of MeriStar
common stock, $4.60 in cash plus 0.784 of a share of FelCor common stock.
Each holder of common units and profits-only partnership units in MeriStar
LP, other than FelCor and its subsidiaries will receive, for each common
unit and profits-only unit, $4.60 in cash plus 0.784 of a common unit of
FelCor LP. Each holder of Class C preferred units in MeriStar LP will
receive, for each unit, $4.60 in cash plus 0.784 of a Series C preferred
unit in FelCor LP. Each holder of Class D preferred units in MeriStar LP
will receive, for each unit, one Series D preferred unit in FelCor LP.
Amounts represent adjustments to record the merger and related transactions
as if the merger had occurred on January 1 of the fiscal period presented.
Shares of FelCor common stock and FelCor LP common unit are valued at
$22.10, the closing price of FelCor common stock on the date of the
announcement. The calculation of the merger acquisition cost is as follows
(in thousands, except share and unit data):

<Table>

Issuance of 34.872 million shares of FelCor common stock in
exchange for 44.5 million shares of MeriStar common
stock..................................................... $ 770,677
Issuance of 2.764 million FelCor LP common units in exchange
for 3.5 million MeriStar LP common and profits-only
units..................................................... 61,082
Issuance of 755,954 FelCor LP Series C preferred units in
exchange for 964,227 MeriStar LP Class C preferred
units..................................................... 16,707
Payment of $4.60 per share of MeriStar common stock and per
MeriStar LP common, Class C preferred and profits-only
units..................................................... 225,260
Issuance of 392,157 FelCor LP Series D preferred units in
exchange for a like number of MeriStar LP Class D
preferred units........................................... 8,690
Issuance of 3.6 million FelCor stock options based on a
0.784 exchange ratio in exchange for MeriStar stock
options, assuming all MeriStar option holders are not
retained by FelCor........................................ 10,600
Assumption of MeriStar's liabilities........................ 1,874,936
Transaction costs........................................... 39,600
----------
Total merger acquisition cost............................... $3,007,552
==========
</Table>

The following is a calculation of estimated transaction costs (in
thousands):

<Table>

57
63
NOTES TO FELCOR PRO FORMA COMBINED STATEMENTS OF OPERATIONS -- (CONTINUED)

(D) Represents the reduction in historical depreciation associated with the
allocation of FelCor's purchase price of MeriStar. The allocation of basis
to the assets acquired from MeriStar is as follows (in thousands):

<Table>

<Table>
<Caption>
FOR THE YEAR ENDED FOR THE SIX MONTHS ENDED
DECEMBER 31, 2000 JUNE 30, 2001
------------------ ------------------------

Buildings and improvements acquired from
MeriStar...................................... $ 59,618 $ 29,809
Furniture, fixtures, and equipment acquired from
MeriStar...................................... 28,056 14,028
--------- --------
87,674 43,837
Historical MeriStar depreciation................ (107,362) (58,405)
--------- --------
Net adjustment.................................. $ (19,688) $(14,568)
========= ========
</Table>

(E) Represents the net adjustment to historical interest expense for the
increase in interest expense related to new borrowings resulting from
merger related transactions offset by reductions in historical interest
expense related to borrowings that will be repaid with the proceeds of the
new borrowings as follows (in thousands):

<Table>
<Caption>
INTEREST FOR THE YEAR ENDED FOR THE SIX MONTHS ENDED
RATE DECEMBER 31, 2000 JUNE 30, 2001
-------- ------------------ ------------------------

58
64
NOTES TO FELCOR PRO FORMA COMBINED STATEMENTS OF OPERATIONS -- (CONTINUED)

<Table>
<Caption>
INTEREST FOR THE YEAR ENDED FOR THE SIX MONTHS ENDED
RATE DECEMBER 31, 2000 JUNE 30, 2001
-------- ------------------ ------------------------

Reductions:
FelCor $61,744 mortgage debt
repaid........................... (4) 5,340 1,940
MeriStar $202,623 subordinated notes
repaid........................... 8.71%(5) 17,648 8,824
MeriStar $154,300 convertible notes
repaid........................... 4.75%(5) 7,329 3,665
MeriStar $227,000 line of credit
repaid........................... (6) 16,753 8,535
MeriStar $195,000 term loans
repaid........................... (6) 16,318 7,739
Historical interest capitalized by
MeriStar......................... (5,805) (2,876)
Historical amortization of MeriStar
deferred financing costs......... 4,585 2,293
------- -------
Total reductions.................... 62,168 30,120
------- -------
Net adjustment........................ $31,183 $ 8,531
======= =======
</Table>

(1) Represents effective fixed rate on notes issued in May 2001.

(2) Represents estimated variable rate of LIBOR plus 200 basis points to be
committed by lender. Weighted average 30 day LIBOR was 6.44% for the year
ended December 31, 2000 and 4.70% for the six months ended June 30, 2001. An
increase of 0.125% in interest rates would increase interest expense by
$437,500 and $218,750 and decrease net income available to common
shareholders by $391,563 and $191,406 for the year ended December 31, 2000
and the six months ended June 30, 2001, respectively.

(3) Represents contractual variable rate of LIBOR plus 200 basis points. On a
pro forma basis, FelCor will have a balance outstanding on the line of
credit of $330,373 for the periods presented. This adjustment represents the
incremental interest on this balance in excess of historical amounts.

(4) Represents the weighted average historical rates which were approximately
8.44% and 6.70% for the periods ended December 31, 2000 and June 30, 2001,
respectively.

(5) Represents contractual fixed rates of 8.71% on subordinated notes with a
principal balance of $202.5 million and 4.75% on convertible notes with a
principal balance of $154.3 million.

(6) Represents the historical weighted average interest rates (adjusted for
historical interest rate hedges) for the periods presented are as follows:

<Table>
<Caption>
2000 2001
----- -----

FelCor expects to assume approximately $500 million of MeriStar LP's senior
notes and approximately $374 million of mortgage debt of MeriStar's
subsidiaries in connection with the merger.

(F) Represents adjustment necessary to record impact of merger related
transactions on minority interests. After the partnership merger, MeriStar
LP common unit holders will have the option of redeeming each FelCor common
unit issued to them for an amount of cash equal to the then average market
price of a share of FelCor common stock, or, at FelCor's option, one share
of FelCor common stock. If holders elect to redeem their units, FelCor
intends to redeem them by issuing its common stock. Accordingly, pro forma
effect has not been given to the range of possible results.

(G) Represents dividends on the proposed issuance of $100 million of Series C
cumulative redeemable preferred stock at an assumed dividend rate of 10.5%.
An increase of 0.125% in the dividend rate

59
65
NOTES TO FELCOR PRO FORMA COMBINED STATEMENTS OF OPERATIONS -- (CONTINUED)

would increase the preferred dividends by $125,000 and $62,500 and decrease
net income available to common shareholders by $111,875 and $54,688 for the
year ended December 31, 2000 and the six months ended June 30, 2001,
respectively.

(H) Represents the impact of additional shares issued in the merger on a basic
and diluted basis and the dilutive effect of FelCor stock options issued to
MeriStar option holders as follows (in thousands):

<Table>

Basic
Shares issued to MeriStar stockholders.................... 34,872
------
Adjustment to weighted average shares-basic............... 34,872
Diluted
Dilutive effect of options issued to MeriStar
optionholders.......................................... 891
------
Adjustment to weighted average shares-diluted............... 35,763
======
</Table>

FelCor does not include partnership units in its diluted weighted average
shares computation. If the partnership units were included, the net income
available to common shareholders would be increased by the minority
interest allocated to the partnership unitholders, resulting in no impact
to earnings per share.

60
66
NOTES TO FELCOR PRO FORMA COMBINED STATEMENTS OF OPERATIONS -- (CONTINUED)

(I) Represents FelCor's historical results of operations, excluding
extraordinary items, plus the pro forma effect of FelCor's acquisitions of
DJONT and 100 hotel leases from Six Continents Hotels as if the acquisition
occurred on January 1, 2000. The computation is as follows (in thousands,
except per share amounts):

<Table>
<Caption>
BRISTOL
FELCOR DJONT BRISTOL TENANT
HISTORICAL OPERATIONS, LLC TENANT PREDECESSOR
(1) (2) (3) (4)
---------- --------------- -------- -----------

Revenues:
Room and suite revenue....... $709,793 $461,978 $143,952
Food and beverage revenue.... 112,612 115,176 36,645
Other operating
departments................ 56,476 31,859 5,401
Percentage lease revenue..... $536,907
Retail space rental and other
revenue.................... 3,057
-------- -------- -------- --------
Total revenues................ 539,964 878,881 609,013 185,998
-------- -------- -------- --------
Expenses:
Hotel operating expenses:
Room....................... 169,531 109,074 32,163
Food and beverage
expenses................. 84,602 90,025 28,190
Other operating
departments.............. 22,168 11,267 3,859
Management and incentive
fees......................... 24,766 16,770 5,589
Other property operating
costs........................ 236,186 178,234 53,903
Percentage lease expense...... 277,491 197,210 62,206
Property taxes, insurance, and
other........................ 89,257 70,498 2,128 710
Corporate expenses............ 12,256 1,011
Depreciation.................. 160,745 572
-------- -------- -------- --------
Total operating expenses...... 262,258 886,825 604,708 186,620
-------- -------- -------- --------
Operating income (loss)....... 277,706 (7,944) 4,305 (622)
-------- -------- -------- --------
Interest expense, net......... 156,712 618 (133) (35)
Loss on assets held for
sale......................... 63,000
Other......................... 3,376
-------- -------- -------- --------
Income (loss) before equity in
income from unconsolidated
entities, minority interests,
and gain on sale of assets... 54,618 (8,562) 4,438 (587)
-------- -------- -------- --------
Equity in income from
unconsolidated entities...... 14,820 593
Minority interests............ (8,262) (3,243)
Gain on sale of assets........ 4,388
Income tax expense
(benefit).................... 2,798 (267)
-------- -------- -------- --------
Net income (loss) before
extraordinary items.......... 65,564 (11,212) 1,640 (320)
Preferred distributions....... (24,682)
-------- -------- -------- --------
Net income (loss) before
extraordinary items
applicable to common
shareholders................. $ 40,882 $(11,212) $ 1,640 $ (320)
======== ======== ======== ========
Basic per share data:
Net income (loss) before
extraordinary items
applicable to common
shareholders............... $ 0.74
========
Weighted average shares
outstanding................ 55,264
========
Diluted per share data:
Net income (loss) before
extraordinary items
applicable to common
shareholders............... $ 0.74
========
Weighted average shares
outstanding................ 55,519
========

BRISTOL FELCOR
TOTAL ELIMINATIONS PROFORMA POST RMA
HISTORICAL (5) ADJUSTMENTS TOTAL
---------- ------------ ----------- ----------

Revenues:
Room and suite revenue....... $1,315,723 $ (6,431) $1,309,292
Food and beverage revenue.... 264,433 (2,864) 261,569
Other operating
departments................ 93,736 (384) 93,352
Percentage lease revenue..... 536,907 $(536,907)(6)
Retail space rental and other
revenue.................... 3,057 3,057
---------- -------- --------- ----------
Total revenues................ 2,213,856 (9,679) (536,907) 1,667,270
---------- -------- --------- ----------
Expenses:
Hotel operating expenses:
Room....................... 310,768 (1,534) 309,234
Food and beverage
expenses................. 202,817 (1,962) 200,855
Other operating
departments.............. 37,294 (122) 37,172
Management and incentive
fees......................... 47,125 (76) 30,165(7) 77,214
Other property operating
costs........................ 468,323 (5,929) (24,631)(8) 437,763
Percentage lease expense...... 536,907 (536,907)(6)
Property taxes, insurance, and
other........................ 162,593 (594) 161,999
Corporate expenses............ 13,267 13,267
Depreciation.................. 161,317 (1) 161,316
---------- -------- --------- ----------
Total operating expenses...... 1,940,411 (10,218) (531,373) 1,398,820
---------- -------- --------- ----------
Operating income (loss)....... 273,445 539 (5,534) 268,450
---------- -------- --------- ----------
Interest expense, net......... 157,162 168 (618)(9) 156,712
Loss on assets held for
sale......................... 63,000 63,000
Other......................... 3,376 3,376
---------- -------- --------- ----------
Income (loss) before equity in
income from unconsolidated
entities, minority interests,
and gain on sale of assets... 49,907 371 (4,916) 45,362
---------- -------- --------- ----------
Equity in income from
unconsolidated entities...... 15,413 (3,977)(10) 11,436
Minority interests............ (11,505) 4,063(11) (7,357)
Gain on sale of assets........ 4,388 4,388
Income tax expense
(benefit).................... 2,531 (2,531)(12)
---------- -------- --------- ----------
Net income (loss) before
extraordinary items.......... 55,672 371 (2,299) 53,829
Preferred distributions....... (24,682) (24,682)
---------- -------- --------- ----------
Net income (loss) before
extraordinary items
applicable to common
shareholders................. $ 30,990 $ 371 $ (2,299) $ 29,147
========== ======== ========= ==========
Basic per share data:
Net income (loss) before
extraordinary items
applicable to common
shareholders............... $ 0.53
==========
Weighted average shares
outstanding................ 55,264
==========
Diluted per share data:
Net income (loss) before
extraordinary items
applicable to common
shareholders............... $ 0.53
==========
Weighted average shares
outstanding................ 55,519
==========
</Table>

61
67
NOTES TO FELCOR PRO FORMA COMBINED STATEMENTS OF OPERATIONS -- (CONTINUED)

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

(1) Represents the historical results of operations of FelCor for the year
ended December 31, 2000. Certain amounts have been reclassified to conform
to the June 30, 2001 presentation with no effect on previously reported net
income.

(5) Represents adjustment to eliminate historical amounts related to (i) a
hotel leased by Bristol Tenant not owned by FelCor and (ii) a hotel owned
by FelCor but sold in December 2000.

(6) Represents the elimination of historical percentage lease revenues and
expenses between FelCor and the lessees.

(7) Represents the adjustment required to record the management fees at their
contractual rates. In the negotiation for the acquisition of the 88 leases
and the new long-term management contracts with Six Continents Hotels,
FelCor was able to spread the cost of the lease acquisition cost over the
term of the management agreement, by agreeing to pay management fees, that
are higher than those paid by FelCor to other managers for comparable
services. Management fees for the 88 hotels are broken out between a base
fee, computed at 2% of total hotel revenue plus 5% of room revenue, and an
incentive fee, computed using a formula incorporating hotel net operating
income and FelCor's return on its investment in these hotels. The new
management contracts transfer the operating risk and reward of the hotels
to FelCor, as compared to the percentage leases, under which FelCor
received percentage lease revenue based solely on hotel revenues.
Additionally, under the new management contracts, FelCor has the ability to
terminate management contracts for hotels by substituting hotels with
similar revenue streams.

(8) Represents the elimination of historical franchise fees paid to Six
Continents Hotels. These agreements have been replaced with management
contracts.

(9) Represents the elimination of $618,000 in interest expense paid by DJONT to
FelCor.

(10) Represents the elimination of FelCor's equity in income of DJONT's
consolidated subsidiary.

(11) Represents adjustment of $135,000 to record the minority interest holders
share of the revenues and expenses of the lessees plus the elimination of
the DJONT minority interest of $3,243,000 represented by FelCor's ownership
discussed in (10) above.

(12) Represents the elimination of the historical tax provisions of the Six
Continents Hotels lessees due to the pro forma taxable loss of the TRSs. No
benefit has been recorded for deferred taxes related to these losses due to
the uncertainty of their recoverability, because based on the weight of
available evidence, FelCor management has determined it is more likely than
not that the entire balance of deferred tax assets will not be realized by
the TRSs.

62
68
NOTES TO FELCOR PRO FORMA COMBINED STATEMENTS OF OPERATIONS -- (CONTINUED)

(J) Represents MeriStar's historical results of operations, excluding
extraordinary items, plus the pro forma effect of MeriStar's acquisition of
106 hotel leases from MeriStar Hotels & Resorts as if the acquisitions
occurred on January 1, 2000. The computation is as follows (in thousands):

<Table>
<Caption>
MERISTAR
HISTORICAL PRO FORMA MERISTAR
(1) ADJUSTMENTS POST RMA
---------- ----------- ----------

Revenues:
Room and suite revenue.............................. $ 782,288(2) $ 782,288
Food and beverage revenue........................... 290,792(2) 290,792
Other operating departments......................... 84,660(2) 84,660
Percentage lease revenue............................ $385,141 (364,216)(3) 20,925
Retail space rental and other revenue............... 15,637 2,880(4) 18,517
-------- --------- ----------
Total revenues.............................. 400,778 796,404 1,197,182
-------- --------- ----------
Expenses:
Hotel operating expenses:
Rooms............................................ 184,791(2) 184,791
Food and beverage expenses....................... 209,962(2) 209,962
Other operating departments...................... 48,263(2) 48,263
Management and incentive fees....................... 28,943(5) 28,943
Other property operating costs...................... 2,731 299,616(6) 302,347
Property taxes, insurance and other................. 47,481 24,829(2) 72,310
Corporate expenses.................................. 9,445 9,445
Depreciation........................................ 107,362 107,362
-------- --------- ----------
Total operating expenses.................... 167,019 796,404 963,423
-------- --------- ----------
Operating income...................................... 233,759 233,759
-------- --------- ----------
Interest expense, net................................. 122,109 122,109
Other................................................. 2,028 2,028
-------- --------- ----------
Income before minority interest and gain on sale of
assets.............................................. 109,622 109,622
Minority interests.................................... (10,240) (10,240)
Gain on sale of assets................................ 3,425 3,425
-------- --------- ----------
Net income before extraordinary items applicable to
common shareholders................................. $102,807 $ $ 102,807
======== ========= ==========
</Table>

(1) Represents MeriStar's historical results of operations, excluding
extraordinary items. Certain reclassifications have been made to conform to
the presentation of FelCor's statement of operations.

(2) Represents the historical hotel revenues and expenses of the 106 hotels
formerly leased to MeriStar Hotels & Resorts, Inc.

(3) Represents the elimination of historical percentage lease revenue received
from MeriStar Hotels & Resorts.

(4) Represents historical other hotel revenue of the 106 hotels formerly leased
to MeriStar Hotels & Resorts.

Until January 1, 2001, MeriStar Hotels & Resorts leased substantially all of
its hotels from MeriStar. Under these leases, MeriStar Hotels & Resorts
assumed all of the operating risks and rewards of these hotels and paid
MeriStar a percentage of revenue at each hotel under the lease agreements.
Therefore, for financial statement purposes through December 31, 2000,
MeriStar Hotels & Resorts recorded all of the operating revenues and
expenses of the hotels in its statements of operations, and MeriStar
recorded lease revenue earned under the lease agreements in its statements
of operations. Effective January 1, 2001, MeriStar Hotels & Resorts assigned
the hotel leases to newly created,

63
69
NOTES TO FELCOR PRO FORMA COMBINED STATEMENTS OF OPERATIONS -- (CONTINUED)

wholly owned, taxable REIT subsidiaries of MeriStar and MeriStar's taxable
REIT subsidiaries in turn, entered into management agreements with MeriStar
Hotels & Resorts to manage these hotels. As a result of this change in
structure, MeriStar's wholly owned taxable REIT subsidiaries have assumed
the operating risks and rewards of the hotels and now pay MeriStar Hotels &
Resorts a management fee to manage the hotels for them. For consolidated
financial statement purposes, effective January 1, 2001, MeriStar now
records all of the revenues and expenses of the hotels in its statement of
operations, including a management fee paid to MeriStar Hotels & Resorts.
The terms of the management agreements are designed to substantially mirror
the economics of the former leases.

(6) Represents historical other undistributed operating costs of the 106 hotels
formerly leased to MeriStar Hotels & Resorts.

64
70

PRO FORMA COMBINED BALANCE SHEET -- MERGER

MeriStar will be acquired by FelCor, and therefore the unaudited combined
balance sheet is that of FelCor. The following unaudited pro forma combined
balance sheet as of June 30, 2001 is based in part upon the consolidated balance
sheets of FelCor, and MeriStar incorporated by reference, and the consolidated
balance sheet of Bristol Tenant which was provided by Bristol Tenant.

The Pro Forma Combined Balance Sheet assumes all of the following occurred
on June 30, 2001:

- FelCor's acquisition of the remaining 88 leases held by Six Continent
Hotels, effective July 1, 2001; and

- the completion of the merger and related financings and the application
of the net proceeds.

The unaudited pro forma balance sheet is not necessarily indicative of what
the financial position actually would have been if the merger had occurred and
the RMA had been enacted at June 30, 2001. Additionally, the unaudited pro forma
combined balance sheet does not attempt to present FelCor's financial position
at any future date. The unaudited pro forma financial information should be read
together with the historical consolidated financial statements and related notes
of MeriStar and FelCor which are included in this prospectus or incorporated by
reference in this prospectus.

65
71

FELCOR LODGING TRUST INCORPORATED

PRO FORMA COMBINED BALANCE SHEET
AS OF JUNE 30, 2001
(UNAUDITED, IN THOUSANDS)

<Table>
<Caption>
FELCOR RMA MERISTAR
HISTORICAL ACQUISITION FELCOR HISTORICAL MERGER PRO FORMA
(A) (B) POST RMA (C) ADJUSTMENTS(D) TOTAL
---------- ----------- ----------- ---------- -------------- ----------

ASSETS

Net investment in hotels........... $3,710,694 $ $3,710,694 $2,867,134 $ (61,785)(E) $6,516,043
Investment in unconsolidated
entities......................... 154,980 154,980 41,714 196,694
Assets held for sale............... 52,122 52,122 52,122
Cash and cash equivalents.......... 64,220 1,471 65,691 20,550 86,241
Restricted cash.................... 323,555 323,555 20,201 (316,460)(F) 27,296
Due from MeriStar Hotels &
Resorts.......................... 10,893 10,893
Note receivable from MeriStar
Hotels & Resorts................. 36,000 36,000
Accounts receivable................ 46,449 33,924 80,373 57,040 137,413
Prepaid expenses................... 12,056 1,941 13,997 15,765 29,762
Deferred expenses, net............. 32,201 32,201 21,570 (11,620)(G) 42,151
Other assets....................... 7,251 5,022 12,273 40 12,313
---------- ------- ---------- ---------- --------- ----------
Total assets............... $4,403,528 $42,358 $4,445,886 $3,090,907 $(389,865) $7,146,928
========== ======= ========== ========== ========= ==========

LIABILITIES & SHAREHOLDERS' EQUITY

Debt............................... $2,134,093 $2,134,093 $1,653,050 $(138,450)(H) $3,648,693
Distributions payable.............. 34,199 34,199 24,245 58,444
Accrued expenses and other......... 146,077 $42,358 188,435 194,948 383,383
Minority interest in Operating
Partnership...................... 253,841 253,841 93,288 (13,654)(I) 333,475
Minority interest in other
partnerships..................... 50,474 50,474 2,693 53,167
---------- ------- ---------- ---------- --------- ----------
Total liabilities.......... 2,618,684 42,358 2,661,042 1,968,224 (152,104) 4,477,162
---------- ------- ---------- ---------- --------- ----------
Shareholders' equity:
Preferred stock.................... 293,265 293,265 100,000 (J) 393,265
Common stock....................... 699 699 486 (137)(K) 1,048
Additional paid-in capital......... 2,063,981 2,063,981 1,180,687 (396,114)(K) 2,848,554
Accumulated other comprehensive
income (loss).................... (899) (899) (13,350) 13,350 (L) (899)
Distributions in excess of
earnings......................... (256,221) (256,221) 28,981 (28,981)(L) (256,221)
Less: Common stock in treasury, at
cost............................. (315,981) (315,981) (74,121) 74,121 (L) (315,981)
---------- ------- ---------- ---------- --------- ----------
Total shareholders'
equity................... 1,784,844 1,784,844 1,122,683 (237,761) 2,669,766
---------- ------- ---------- ---------- --------- ----------
Total liabilities and
shareholders' equity..... $4,403,528 $42,358 $4,445,886 $3,090,907 $(389,865) $7,146,928
========== ======= ========== ========== ========= ==========
</Table>

See notes to pro forma combined balance sheet.

66
72

NOTES TO FELCOR PRO FORMA COMBINED BALANCE SHEET
AS OF JUNE 30, 2001
(UNAUDITED)

(A) Represents the historical consolidated balance sheet of FelCor as of June
30, 2001.

(B) Effective January 1, 2001, with the enactment of the REIT Modernization
Act, FelCor had completed transactions that resulted in its newly formed
taxable REIT subsidiaries acquiring leases for 96 hotels that were
previously leased to either DJONT or Six Continents Hotels. Accordingly,
the assets and liabilities associated with these hotels are included in
FelCor's consolidated balance sheet as of June 30, 2001. In March 2001,
FelCor entered into an agreement with Six Continents Hotels to acquire the
remaining 88 hotel leases effective July 1, 2001. In consideration for the
acquisition of these leases, taxable REIT subsidiaries of FelCor entered
into long-term management agreements with Six Continents Hotels with regard
to these hotels and issued to Six Continents Hotels 100 shares of FelCor
common stock. The pro forma adjustment column represents the historical
hotel assets and liabilities associated with the 88 hotels as if the Six
Continents Hotels leases were acquired effective June 30, 2001.

(C) Represents the historical consolidated balance sheet of MeriStar as of June
30, 2001. Certain reclassifications have been made to conform to the
presentation of FelCor's balance sheet.

(D) On May 10, 2001, FelCor and MeriStar announced that they had signed a
merger agreement, under which MeriStar will merge with and into FelCor, a
wholly-owned subsidiary of FelCor LP will merge with and into MeriStar LP
and the limited partners of MeriStar LP, other than FelCor and its
subsidiaries, will exchange their interests in MeriStar LP for interests in
FelCor LP and, where applicable, cash. Under the merger agreement, each
holder of MeriStar common stock will receive, for each share of MeriStar
common stock, $4.60 in cash plus 0.784 of a share of FelCor common stock.
Each holder of common units and profits-only LP units in MeriStar LP, other
than FelCor LP and its subsidiaries, will receive, for each common unit and
profits-only unit, $4.60 in cash plus 0.784 of a common unit of FelCor LP.
Each holder of Class C preferred units in MeriStar LP will receive, for
each unit, $4.60 in cash plus 0.784 of a Series C preferred unit in FelCor
LP. Each holder of Class D preferred units in MeriStar LP will receive, for
each unit, one Series D preferred unit in FelCor LP. Amounts represent
adjustments to record the merger and related transactions as if the merger
had occurred on June 30, 2001. Shares of FelCor common stock and FelCor LP
common units are valued at $22.10, the closing price of FelCor common stock
on the date of the announcement. The calculation of the merger acquisition
cost is as follows (in thousands, except share and unit data):

<Table>

67
73
NOTES TO FELCOR PRO FORMA COMBINED BALANCE SHEET -- (CONTINUED)

The following is a calculation of estimated transaction costs (in
thousands):

<Table>

Financial advisory fees..................................... $12,000
Consent payments in connection with debt agreements......... 10,600
Severance and noncompete payments........................... 8,000
Legal fees.................................................. 3,000
Accounting fees............................................. 1,000
Mailing and filing fees..................................... 1,000
Other....................................................... 4,000
-------
Transaction costs................................. $39,600
=======
</Table>

(E) Represents the purchase accounting adjustment to the historical carrying
value of MeriStar investment in hotels as follows (in thousands):

<Table>

FelCor allocation to investment in hotels................... $2,805,349
MeriStar historical carrying amount......................... 2,867,134
----------
Adjustment............................................. $ (61,785)
==========
</Table>

(F) Represents the release of a portion of the proceeds of the $600 million
notes placement which will be used to repay MeriStar debt upon closing of
the merger.

(G) Represents the net effect of the following adjustments (in thousands):

<Table>

Deferred financing costs for new borrowings................. $ 9,950
Elimination of historical MeriStar deferred financing
costs..................................................... (21,570)
--------
Adjustment............................................. $(11,620)
========
</Table>

(H) Represents the net decrease in debt as a result of the merger and related
transactions as follows (in thousands):

<Table>

Issuance of new mortgage debt............................... $ 350,000
Net borrowings on new line of credit........................ 290,473
Repayment of MeriStar subordinated notes.................... (202,623)
Repayment of MeriStar convertible notes..................... (154,300)
Repayment of MeriStar line of credit........................ (227,000)
Repayment of MeriStar term loans............................ (195,000)
---------
Net adjustment......................................... $(138,450)
=========
</Table>

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74
NOTES TO FELCOR PRO FORMA COMBINED BALANCE SHEET -- (CONTINUED)

(I) Represents the net adjustment to minority interest as follows (in
thousands, except share and unit data):

<Table>

Issuance of 2.769 million FelCor LP common units in exchange
for 3.532 million MeriStar LP common and profits-only
units..................................................... $ 61,082
Issuance of 755,954 FelCor LP Series C preferred units in
exchange for 964,227 MeriStar LP Class C preferred
units..................................................... 16,707
Issuance of 392,157 FelCor LP Series D preferred units in
exchange for a like number of MeriStar LP Class D
preferred units........................................... 8,690
Elimination of historical MeriStar minority interest........ (93,288)
Adjustment to reflect minority interest as 12.5% of common
equity.................................................... (6,845)
--------
Net adjustment.................................... $(13,654)
========
</Table>

The minority interest percentage is calculated as follows (in thousands):

<Table>

Historical FelCor common stock.............................. 52,981
Historical FelCor LP units convertible into FelCor common
stock..................................................... 9,014
FelCor common stock issued in the merger.................... 34,872
FelCor LP units convertible into FelCor common stock issued
in the merger............................................. 3,520
--------
Total shares and units............................ 100,387
========
Units as a percentage of shares and units................... 12.5%
</Table>

(J) Represents the proposed issuance of $100 million in Series C cumulative
redeemable preferred stock.

(K) Represents the net adjustments resulting from the merger and related
transactions as follows (in thousands, except share and unit data):

<Table>
<Caption>
ADDITIONAL
COMMON PAID IN
STOCK CAPITAL
------ -----------

Issuance of 34.872 million shares of FelCor common stock in
exchange for 44.5 million shares of MeriStar common
stock..................................................... $ 349 $ 770,328
Issuance of 3.6 million FelCor stock options in exchange for
MeriStar stock options.................................... 10,600
Elimination of historical MeriStar balances................. (486) (1,180,687)
Offering expenses of new $100,000 of FelCor Series C
cumulative redeemable preferred stock..................... (3,200)
Adjustment to reflect minority interest as 12.5% of common
equity.................................................... 6,845
----- -----------
Net adjustments................................... $(137) $ (396,114)
===== ===========
</Table>

(L) Represents the elimination of historical MeriStar balances.

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75

SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION

MERISTAR LP AND MERISTAR

The following table sets forth selected historical consolidated financial
information for MeriStar LP and MeriStar. The selected historical information is
presented as of and for the six months ended June 30, 2001 and 2000 and as of
and for the years ended December 31, 2000, 1999, 1998, 1997 and 1996. The
historical financial information for the years ended December 31, 2000, 1999 and
1998 has been derived from the consolidated financial statements and financial
statement notes of MeriStar LP and MeriStar which have been audited by KPMG LLP,
independent auditors. The selected historical consolidated financial information
for MeriStar LP as of and for the years ended December 31, 1997 and 1996 has
been derived from the unaudited financial statements which have been prepared by
management of MeriStar. The selected historical financial information for
MeriStar for the years ended December 31, 1997 and 1996 has been derived from
the consolidated financial statements and financial statement notes of MeriStar
which have been audited by KPMG LLP, independent auditors. The selected
historical financial information as of and for the six months ended June 30,
2001 and 2000 has been derived from the unaudited financial statements which
have been prepared by management of MeriStar, on the same basis as the audited
financial statements and, in the opinion of management of MeriStar, include all
adjustments consisting of normal recurring accruals that are considered
necessary for a fair presentation of the results for those periods. The results
of operations for the six months ended June 30, 2001 and 2000 are not
necessarily indicative of results to be anticipated for the entire year. The
following information should be read together with the consolidated financial
statements and financial statement notes of MeriStar LP and MeriStar included in
this prospectus supplement or incorporated in this prospectus by reference. See
"Additional Information" beginning on page 160.

MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

<Table>
<Caption>
SIX MONTHS
ENDED JUNE 30,
(UNAUDITED) YEAR ENDED DECEMBER 31,
----------------------- ----------------------------------------------------------------
1997 1996
2001(B) 2000 2000 1999 1998(A) (UNAUDITED) (UNAUDITED)
---------- ---------- ---------- ---------- ---------- ----------- -----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS AND OPERATING DATA)

RESULTS OF OPERATIONS:
Total revenues....................... $ 609,851 $ 148,587 $ 400,685 $ 374,820 $ 522,031 $ 292,554 $ 102,742
Net operating income................. $ 104,199 $ 63,899 $ 230,340 $ 218,299 $ 135,910 $ 58,537 $ 18,773
Interest expense, net................ $ 60,261 $ 58,417 $ 117,524 $ 100,387 $ 50,492 $ 20,968 $ 12,223
Income before gain (loss) on sale of
assets and extraordinary gain
(loss).............................. $ 42,690 $ 5,398 $ 111,197 $ 116,207 $ 86,304 $ 21,290 $ 3,915
Gain (loss) on sale of assets, net of
tax(C).............................. $ (1,062) $ 3,439 $ 3,439 $ -- $ -- $ -- $ --
Extraordinary gain (loss), net of
tax(D).............................. $ (1,226) $ 3,400 $ 3,400 $ (4,551) $ (1,238) $ (4,092) $ (1,956)
Net income........................... $ 40,402 $ 12,237 $ 118,036 $ 111,656 $ 85,066 $ 17,198 $ 1,959
Net income applicable to common
unitholders......................... $ 40,120 $ 10,916 $ 117,471 $ 111,091 $ 84,416 $ 17,198 $ 1,959
Basic earnings per unit before
extraordinary gain (loss)(E)........ $ 0.85 $ 0.16 $ 2.25 $ 2.22 $ 2.38 $ 1.29 $ 0.31
Diluted earnings per unit before
extraordinary gain (loss)(E)........ $ 0.83 $ 0.16 $ 2.18 $ 2.15 $ 2.25 $ 1.27 $ 0.31
Distributions per common unit(F)..... $ 1.01 $ 1.01 $ 2.02 $ 2.02 $ 0.82 $ -- $ --
Number of partnership units
outstanding(G)...................... 48,712 50,435 48,851 52,193 51,460 26,743 12,754
OTHER FINANCIAL DATA:
EBITDA(H)............................ $ 178,499 $ 118,001 $ 341,028 $ 320,094 $ 194,752 $ 78,891 $ 26,672
Net cash provided by operating
activities.......................... $ 114,562 $ 120,671 $ 224,088 $ 228,329 $ 186,891 $ 55,417 $ 12,147
Net cash (used in) provided by
investing activities................ $ (49,534) $ 13,027 $ (14,286) $ (187,952) $ (785,505) $ (579,758) $ (223,425)
Net cash provided by (used in)
financing activities................ $ (45,003) $ (135,629) $ (212,173) $ (41,948) $ 520,457 $ 584,220 $ 226,131
Ratio of earnings to fixed
charges(I).......................... 1.57x 1.08x 1.8x 1.9x 2.4x 2.7x 1.3x
</Table>

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76

BALANCE SHEET DATA:
Investments in hotel properties,
gross............................... $3,209,185 $3,164,045 $3,193,730 $3,118,723 $2,957,543 $ 950,052 $ 343,092
Total assets......................... $3,084,981 $3,036,517 $3,006,500 $3,086,096 $2,989,609 $1,040,223 $ 354,795
Long-term debt....................... $1,653,050 $1,632,433 $1,638,319 $1,676,771 $1,602,352 $ 491,790 $ 199,476
Redeemable units..................... $ 99,898 $ 93,932 $ 88,545 $ 81,401 $ 89,435 $ 66,847 $ --
Partners' capital.................... $1,116,934 $1,111,010 $1,142,772 $1,203,518 $1,170,220 $ 396,838 $ 49,141
</Table>

MERISTAR HOSPITALITY CORPORATION

<Table>
<Caption>
SIX MONTHS
ENDED JUNE 30
(UNAUDITED) YEAR ENDED DECEMBER 31,
----------------------- -------------------------------------------------------------
2001(B) 2000 2000 1999 1998(A) 1997 1996
---------- ---------- ---------- ---------- ---------- ---------- ---------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS AND OPERATING DATA)

RESULTS OF OPERATIONS:
Total revenues.......................... $ 609,851 $ 148,639 $ 400,778 $ 374,904 $ 525,297 $ 316,393 $ 109,792
Net operating income.................... $ 103,442 $ 63,310 $ 229,174 $ 217,065 $ 133,906 $ 61,512 $ 19,334
Interest expense, net................... $ 60,261 $ 58,417 $ 117,524 $ 100,398 $ 64,378 $ 21,024 $ 12,346
Income before gain (loss) on sale of
assets, extraordinary gain (loss) and
cumulative effect of accounting
change................................. $ 38,658 $ 3,573 $ 99,382 $ 103,496 $ 48,708 $ 24,152 $ 4,353
Gain (loss) on sale of assets, net of
tax(C)................................. $ (1,059) $ 3,425 $ 3,425 $ -- $ -- $ -- $ --
Extraordinary gain (loss), net of
tax(D)................................. $ (1,224) $ 3,054 $ 3,054 $ (4,532) $ (4,080) $ (4,092) $ (1,956)
Cumulative effect of accounting change,
net of tax(J).......................... $ -- $ -- $ -- $ -- $ (921) $ -- $ --
Net income.............................. $ 36,375 $ 10,052 $ 105,861 $ 98,964 $ 43,707 $ 20,060 $ 2,397
Basic earnings (loss) per share before
extraordinary gain (loss)(E)........... $ 0.84 $ 0.14 $ 2.21 $ 2.19 $ 1.45 $ 1.29 $ 0.31
Diluted earnings (loss) per share before
extraordinary gain (loss)(E)........... $ 0.82 $ 0.14 $ 2.14 $ 2.11 $ 1.40 $ 1.27 $ 0.31
Dividends per common share(F)........... $ 1.01 $ 1.01 $ 2.02 $ 2.02 $ 0.82 $ -- $ --
Number of shares of common stock issued
and outstanding(G)..................... 44,480 45,987 44,380 47,257 46,718 24,867 12,754
OTHER FINANCIAL DATA:
EBITDA(H)............................... $ 178,360 $ 118,053 $ 341,121 $ 320,164 $ 194,609 $ 82,502 $ 27,582
Net cash provided by operating
activities............................. $ 117,018 $ 121,084 $ 224,037 $ 229,193 $ 162,796 $ 59,882 $ 13,373
Net cash (used in) provided by investing
activities............................. $ (49,534) $ 13,027 $ (14,286) $ (187,952) $ (785,505) $ (586,259) $(225,251)
Net cash provided by (used in) financing
activities............................. $ (47,467) $ (136,042) $ (212,121) $ (42,812) $ 543,256 $ 588,428 $ 226,830
BALANCE SHEET DATA:
Investments in hotel properties,
gross.................................. $3,209,185 $3,164,046 $3,193,730 $3,118,723 $2,957,543 $ 950,052 $ 343,092
Total assets............................ $3,090,907 $3,043,648 $3,013,008 $3,094,201 $2,998,460 $1,124,642 $ 379,161
Long-term debt.......................... $1,653,050 $1,632,490 $1,638,319 $1,676,771 $1,602,352 $ 492,771 $ 200,361
</Table>

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

(A) MeriStar LP and MeriStar were created on August 3, 1998, when American
General Hospitality Corporation, a corporation operating as a REIT, and its
associated entities merged with CapStar Hotel Company and its associated
entities. In connection with the merger between CapStar and American
General, MeriStar Hotels & Resorts, a separate publicly traded company, was
created to be the lessee and manager of nearly all of MeriStar's hotels.
Prior to August 2, 1998, MeriStar LP's and MeriStar's operating results
consisted of the revenues and expenses of the hotels.

(B) From August 3, 1998 until January 1, 2001, MeriStar Hotels & Resorts leased
substantially all of MeriStar's hotels, and MeriStar LP and MeriStar earned
lease revenue under the participating lease agreements with its lessees.
Upon assigning the 106 leases with MeriStar Hotels & Resorts to MeriStar's
taxable REIT subsidiaries on January 1, 2001, in conjunction with the REIT
Modernization Act, MeriStar LP's and MeriStar's operating results now
include the revenues and expenses of these hotels.

(C) During 2000, MeriStar LP and MeriStar sold three limited service hotels
that resulted in a gain on sales of assets. During 2001, MeriStar LP and
MeriStar sold one hotel that resulted in a loss on the sale of the asset.

(D) During 1996, 1997, 1998, and 1999 some loan facilities were refinanced and
the write-offs of deferred costs associated with these facilities were
recorded as extraordinary losses in accordance with GAAP. During 2000,
MeriStar LP repaid some of its notes payable to MeriStar at a discount, and
MeriStar repurchased some of its convertible notes at a discount, which
resulted

71
77

in extraordinary gains. During 2001, MeriStar LP and MeriStar paid down a
portion of its revolving credit facility resulting in an extraordinary
loss.

(E) Basic and diluted earnings per unit or share before extraordinary loss for
the year ended December 31, 1996 is based on earnings for the period from
August 20, 1996, the date of CapStar's initial public offering, through
December 31, 1996.

(F) No distributions or dividends were declared prior to August 3, 1998, the
date of the merger between American General and CapStar.

(G) As of the end of the period presented.

(H) EBITDA represents earnings before interest expense, income taxes,
depreciation and amortization. MeriStar's management believes that EBITDA
is a useful measure of operating performance because it is industry
practice to evaluate hotel properties based on operating income before
interest, depreciation and amortization, which is generally equivalent to
EBITDA, and EBITDA is unaffected by the debt and equity structure of the
entity. EBITDA does not represent cash flow from operations as defined by
GAAP, is not necessarily indicative of cash available to fund all cash flow
needs, and should not be considered as an alternative to net income under
GAAP for purposes of evaluating MeriStar LP's and MeriStar's results of
operations and may not be comparable to other similarly titled measures
used by other companies.

For the six months ended June 30, 2001, MeriStar LP's and MeriStar's EBITDA
has been presented before the effect of non-recurring items; swap
termination costs of $9,297; the write-down of MeriStar LP's investment in
STS Hotel Net of $2,112; FelCor merger costs of $3,789; and costs to
terminate the leases with Prime Hospitality Corporation of $1,315.

(I) For the purpose of computing the ratio of earnings to fixed charges,
earnings consist of income from continuing operations plus fixed charges,
excluding capitalized interest, and fixed charges consist of interest,
whether expensed or capitalized, and amortization of loan costs.

(J) Under AICPA Statement of Position 98-5, "Reporting on the Costs of Start-Up
Activities," which MeriStar adopted on July 1, 1998, the cumulative effect
of this accounting change was a pre-tax reduction of income for the year
ended December 31, 1998 of $1,485 ($921 net of tax effect).

FELCOR LP AND FELCOR

The following tables set forth selected historical consolidated financial
information for FelCor LP and FelCor. The selected historical information is
presented as of and for the six months ended June 30, 2001 and 2000 and as of
and for the years ended December 31, 2000, 1999, 1998, 1997 and 1996. FelCor LP
and FelCor derived the historical financial information for the years ended
December 31, 2000, 1999, 1998, 1997 and 1996 from the FelCor LP and FelCor
consolidated financial statements and the notes to them, audited by
PricewaterhouseCoopers LLP, independent accountants. The selected historical
financial information as of and for the six months ended June 30, 2001 and 2000
has been derived from the unaudited financial statements which have been
prepared by FelCor LP's and FelCor's management on the same basis as the audited
financial statements and, in the opinion of FelCor LP's and FelCor's management,
include all adjustments consisting of normal recurring accruals that are
considered necessary for a fair presentation of the results for those periods.
The results of operations for the six months ended June 30, 2001 and 2000 are
not necessarily indicative of results to be anticipated for the entire year. The
following information should be read together with FelCor LP's and FelCor's
consolidated financial statements and financial statement notes incorporated in
this prospectus by reference. See "Available Information" beginning on page 160.

FELCOR LODGING LIMITED PARTNERSHIP

<Table>
<Caption>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
----------------------- --------------------------------------------------------------
2001(3) 2000 2000(2) 1999 1998(1) 1997 1996
---------- ---------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS EXCEPT PER SHARE AND RATIO DATA)

STATEMENT OF OPERATIONS DATA:
Total revenues..................... $ 560,302 $ 258,159 $ 541,872 $ 495,517 $ 332,600 $ 169,688 $ 98,934
Net income (loss).................. $ 16,341 $ (12,372) $ 66,391 $ 135,776 $ 121,339 $ 69,467 $ 46,527
Net income (loss) applicable to
common unitholders............... $ 4,041 $ (24,730) $ 41,709 $ 111,041 $ 99,916 $ 57,670 $ 38,793
Basic earnings per unit:
Net income (loss) applicable to
common unitholders before
extraordinary charge........... $ .07 $ (0.39) $ 0.73 $ 1.59 $ 1.95 $ 1.70 $ 1.59
Net income (loss) applicable to
common unitholders............. $ .07 $ (0.39) $ 0.67 $ 1.58 $ 1.89 $ 1.69 $ 1.50
</Table>

72
78

Weighted average common units
outstanding.................... 61,628 63,066 62,301 70,372 52,978 34,126 25,809
Diluted earnings per unit:
Net income (loss) applicable to
common unitholders before
extraordinary charge........... $ 0.07 $ (0.39) $ 0.73 $ 1.59 $ 1.93 $ 1.68 $ 1.58
Net income (loss) applicable to
common unitholders............. $ 0.07 $ (0.39) $ 0.67 $ 1.57 $ 1.87 $ 1.67 $ 1.49
Weighted average common units
outstanding.................... 62,069 63,297 62,556 70,561 53,323 34,467 26,004
OTHER DATA:
Cash flows provided by operating
activities....................... $ 93,630 $ 138,743 $ 277,304 $ 282,365 $ 192,583 $ 97,478 $ 67,494
Cash flows (used in) provided by
investing activities............. $ (265,414) $ (28,629) $ (34,766) $ (205,517) $ (550,498) $ (687,860) $ (478,428)
Cash flows provided by (used in)
financing activities............. $ 209,944 $ (95,385) $ (252,601) $ (75,417) $ 375,064 $ 600,132 $ 251,906
Cash distributions per common
unit(4).......................... $ 1.10 $ 1.10 $ 2.20 $ 2.20 $ 2.545 $ 2.10 $ 1.92
Funds From Operations(5)........... $ 135,683 $ 149,380 $ 288,636 $ 286,895 $ 217,363 $ 129,815 $ 77,141
EBITDA(6).......................... $ 229,576 $ 238,753 $ 470,861 $ 432,689 $ 306,361 $ 165,613 $ 88,355
Ratio of earnings to combined fixed
charges(7)....................... 1.2x 1.0x 1.5x 2.1x 2.7x 3.2x 5.3x
BALANCE SHEET DATA (AT END OF
PERIOD):
Investment in hotels, net of
accumulated depreciation......... $3,710,694 $3,796,755 $3,750,275 $4,035,344 $3,964,484 $1,489,764 $ 899,691
Total assets....................... $4,403,528 $4,176,765 $4,103,603 $4,255,751 $4,175,383 $1,673,364 $ 978,788
Debt............................... $2,134,093 $1,882,743 $1,838,241 $1,833,954 $1,594,734 $ 476,819 $ 239,425
Redeemable units................... $ 210,929 $ 151,948 $ 205,800 $ 52,338 $ 67,595 $ 102,933 $ 98,542
Partners' capital.................. $1,827,756 $1,963,703 $1,880,599 $2,212,651 $2,337,375 $1,049,016 $ 619,496
</Table>

FELCOR LODGING TRUST INCORPORATED

<Table>
<Caption>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
----------------------- -------------------------------------------------------------
2001(3) 2000 2000(2) 1999 1998(1) 1997 1996
---------- ---------- ---------- ---------- ---------- ---------- ---------
(IN THOUSANDS EXCEPT PER SHARE AND RATIO DATA)

STATEMENT OF OPERATIONS DATA:
Total revenues....................... $ 560,302 $ 258,159 $ 541,872 $ 495,517 $ 332,600 $ 169,688 $ 98,934
Net income (loss).................... $ 15,753 $ (9,973) $ 61,699 $ 131,080 $ 114,839 $ 63,650 $ 40,937
Net income (loss) applicable to
common shareholders................ $ 3,453 $ (22,331) $ 37,017 $ 106,345 $ 93,416 $ 51,853 $ 33,203
Basic earnings per share:
Net income (loss) applicable to
common shareholders before
extraordinary charge............. $ 0.07 $ (0.39) $ 0.74 $ 1.59 $ 1.93 $ 1.67 $ 1.54
Net income (loss) applicable to
common shareholders.............. $ 0.07 $ (0.39) $ 0.67 $ 1.57 $ 1.87 $ 1.66 $ 1.44
Weighted average common shares
outstanding...................... 52,614 56,930 55,264 67,392 49,968 31,269 23,023
Diluted earnings per share:
Net income (loss) applicable to
common shareholders before
extraordinary charge............. $ 0.07 $ (0.39) $ 0.74 $ 1.59 $ 1.92 $ 1.65 $ 1.53
Net income applicable to common
shareholders..................... $ 0.07 $ (0.39) $ 0.67 $ 1.57 $ 1.86 $ 1.64 $ 1.43
Weighted average common shares
outstanding...................... 53,055 57,161 55,519 67,581 50,314 31,610 23,218
OTHER DATA:
Cash flows provided by operating
activities......................... $ 93,630 $ 138,743 $ 277,304 $ 282,365 $ 192,583 $ 97,478 $ 67,494
Cash flows (used in) provided by
investing activities............... $ (265,414) $ (28,629) $ (34,766) $ (205,517) $ (550,498) $ (687,860) $(478,428)
</Table>

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79

Cash flows provided by (used in)
financing activities............... $ 209,944 $ (95,385) $ (252,601) $ (75,417) $ 375,064 $ 600,132 $ 251,906
Cash distributions per common
share(4)........................... $ 1.10 $ 1.10 $ 2.20 $ 2.20 $ 2.545 $ 2.10 $ 1.92
Funds From Operations(5)............. $ 135,683 $ 149,380 $ 288,636 $ 286,895 $ 217,363 $ 129,815 $ 77,141
EBITDA(6)............................ $ 229,576 $ 238,753 $ 470,861 $ 432,689 $ 306,361 $ 165,613 $ 88,355
BALANCE SHEET DATA (AT END OF PERIOD):
Investment in hotels, net of
accumulated depreciation........... $3,710,694 $3,796,755 $3,750,275 $4,035,344 $3,964,484 $1,489,764 $ 899,691
Total assets......................... $4,403,528 $4,176,765 $4,103,603 $4,255,751 $4,175,383 $1,673,364 $ 978,788
Debt................................. $2,134,093 $1,882,743 $1,838,241 $1,833,954 $1,594,734 $ 476,819 $ 239,425
Minority interest in FelCor
Partnership........................ $ 253,841 $ 221,878 $ 252,294 $ 90,078 $ 87,353 $ 73,451 $ 76,112
Total shareholders' equity........... $1,784,844 $1,894,258 $1,834,105 $2,174,911 $2,317,617 $1,078,498 $ 641,926
</Table>

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

(1) On July 28, 1998, FelCor completed the merger of Bristol Hotel Company's
real estate holdings with and into FelCor. The merger resulted in the net
acquisition of 107 primarily full-service hotels in return for approximately
31 million shares of newly issued common stock. FelCor subsequently
contributed all assets and liabilities it acquired in the merger to FelCor
LP in exchange for approximately 31 million common units.

(2) In the second quarter of 2000, FelCor recorded a $63 million loss related to
the decision to sell non-strategic hotel assets, which is reflected in the
income statements presented for the period.

(3) Includes hotel revenues and expenses with respect to 96 hotels that were
leased to either DJONT or subsidiaries of Six Continents Hotels prior to the
effectiveness of the REIT Modernization Act on January 1, 2001. Prior to
January 1, 2001, revenues were comprised mainly of percentage lease
revenues. Additionally, in the first quarter of 2001, FelCor recorded lease
termination costs of $36.2 million with respect to the 96 hotels.

(4) In 1998, FelCor declared a special one-time distribution of accumulated but
undistributed earnings and profits as a result of Bristol Hotel Company
merging with and into FelCor, in addition to the annual dividend of $2.20
per common unit. The amount of the one-time distribution was $0.345 per
common unit.

(5) FelCor considers Funds From Operations to be a key measure of a REIT's
performance, which should be considered along with, but not as an
alternative to, net income and cash flow as a measure of operating
performance and liquidity.

The White Paper on Funds From Operations approved by the Board of Governors
of the National Association of Real Estate Investment Trusts, or NAREIT,
defines Funds From Operations as net income or loss, computed in accordance
with GAAP, excluding gains or losses from extraordinary items in accordance
with GAAP and sales of depreciable operating properties, plus real estate
related depreciation and amortization and after comparable adjustments for
FelCor's portion of these items related to unconsolidated entities and joint
ventures. FelCor believes that Funds From Operations is helpful to investors
as a measure of the performance of an equity REIT because, along with cash
flow from operating activities, financing activities and investing
activities, it provides investors with an indication of FelCor's ability to
incur and service debt, to make capital expenditures, and to fund other cash
needs. FelCor computes Funds From Operations in accordance with standards
established by NAREIT, except that FelCor add back rent deferred under SAB
101, the loss on assets held for sale, lease termination costs, and swap
termination expenses to derive Funds From Operations. This may not be
comparable to Funds From Operations reported by other REITs that do not
define the term in accordance with the current NAREIT definition, that
interpret the current NAREIT definition differently than FelCor does or that
do not adjust Funds From Operations for rent deferred under SAB 101, the
loss on assets held for sale or lease termination costs. Funds From
Operations does not represent cash generated from operating activities
determined by GAAP and should not be considered as an alternative to net
income, determined in accordance with GAAP, as an indication of FelCor's
financial performance or to cash flow from operating activities, determined
in accordance with GAAP, as a measure of FelCor's liquidity, nor is it
indicative of funds available to fund FelCor's cash needs, including its
ability to make cash distributions. Funds From Operations may include funds
that may not be available for discretionary use by FelCor's management due
to requirements to conserve funds for capital expenditures and property
acquisitions and other commitments and uncertainties.

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The computation of Funds From Operations for FelCor LP and FelCor yields the
same result. The following table details our computation of Funds From
Operations for FelCor LP.

<Table>
<Caption>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
------------------- ---------------------------------------------------
2001 2000 2000 1999 1998 1997 1996
-------- -------- -------- -------- -------- -------- -------
(IN THOUSANDS)

Net income (loss)....................... $ 16,341 $(12,372) $ 66,391 $135,776 $121,339 $ 69,467 $46,527
Deferred rent........................... 18,604
Lease termination costs................. 36,226
Swap termination expense................ 4,824
Gain on sale............................ (2,595)
Loss on assets held for sale............ 63,000 63,000
Series B redeemable preferred
distributions......................... (6,468) (6,468) (12,937) (12,937) (8,373)
Extraordinary charge from write-off of
deferred financing fees............... 225 3,865 1,113 3,075 185 2,354
Depreciation............................ 79,513 81,480 160,745 152,948 90,835 50,798 26,544
Depreciation from unconsolidated
entities.............................. 5,022 5,136 10,167 9,995 10,487 9,365 1,716
-------- -------- -------- -------- -------- -------- -------
Funds From Operations................... $135,683 $149,380 $288,636 $286,895 $217,363 $129,815 $77,141
======== ======== ======== ======== ======== ======== =======
Weighted average units outstanding(a)... 66,759 67,987 67,239 75,251 58,013 39,157 29,306
</Table>

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

(a) Weighted average units outstanding are computed including dilutive
options, unvested stock grants and assuming conversion of Series A
preferred units to common units.

(6) EBITDA is computed by adding Funds From Operations, interest expense,
FelCor's portion of interest expense from unconsolidated entities,
amortization expense and our Series B redeemable preferred distributions.
EBITDA is presented because it provides useful information regarding
FelCor's ability to service debt. EBITDA should not be considered as an
alternative measure of operating results or cash flow from operations, as
determined in accordance with GAAP. EBITDA as presented by FelCor may not be
comparable to other similarly titled measures used by other companies. The
computation of EBITDA for FelCor LP and FelCor yields the same result. A
reconciliation of Funds From Operations to EBITDA is as follows:

Funds From Operations................................. $135,683 $149,380 $288,636 $286,895 $217,363 $129,815 $77,141
Interest expense...................................... 81,799 77,644 158,620 125,435 73,182 28,792 9,803
Interest expense from unconsolidated entities......... 4,742 4,787 9,188 6,729 6,521 5,895 818
Amortization expense.................................. 884 474 1,480 693 922 1,111 593
Series B redeemable preferred distributions........... 6,468 6,468 12,937 12,937 8,373
-------- -------- -------- -------- -------- -------- -------
EBITDA................................................ $229,576 $238,753 $470,861 $432,689 $306,361 $165,613 $88,355
======== ======== ======== ======== ======== ======== =======
</Table>

(7) For the purpose of computing the ratio of earnings to fixed charges,
earnings consist of income from continuing operations plus fixed charges and
minority interest in FelCor LP, with respect to FelCor, excluding
capitalized interest, and fixed charges consist of interest, whether
expensed or capitalized, and amortization of loan costs.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The management's discussion and analysis of financial condition and results
of operations of MeriStar Hospitality Corporation, FelCor Lodging Trust and
FelCor Lodging Limited Partnership are incorporated in this prospectus by
reference to the companies' Annual Reports on Form 10-K for the year ended
December 31, 2000 and Quarterly Reports on Form 10-Q for the six months ended
June 30, 2001. See "Where You Can Find More Information." The following is the
management's discussion and analysis of the financial condition and results of
operations of MeriStar LP.

GENERAL

We were was created on August 3, 1998, when American General Hospitality
Corporation, a corporation operating as a REIT, and its associated entities
merged with CapStar Hotel Company and its associated entities. In connection
with the merger between CapStar and American General, MeriStar Hotels & Resorts,
a separate publicly traded company, was created to be the lessee and manager of
all but eight of our hotels. The eight hotels not leased by MeriStar Hotels &
Resorts were leased by affiliates of Prime Hospitality Corporation.

Prior to January 1, 2001, in order for MeriStar to maintain its tax status
as a REIT, we were not permitted to participate in the operations of the hotel
properties. To comply with this requirement through December 31, 2000, all of
our properties were subject to leases involving two third-party lessees,
MeriStar Hotels & Resorts and Prime Hospitality Corporation.

On January 1, 2001, changes to the federal tax laws governing REITs,
commonly known as the REIT Modernization Act, became effective. The REIT
Modernization Act permits us to create taxable REIT subsidiaries on or after
January 1, 2001, which are subject to taxation as C corporations. Because of the
REIT Modernization Act, we created a number of these taxable REIT subsidiaries
that are the lessees of our real property. The REIT Modernization Act prohibits
the taxable REIT subsidiaries from engaging in the following activities:

- they may not manage the properties themselves; they are required to enter
into arms length management agreements with independent third-party
managers that are actively involved in the trade or business of hotel
management and manage properties on behalf of other owners,

- they may not lease a property that contains gambling operations, and

- they may not own a brand or franchise under which hotels are operated.

We believe that establishing taxable REIT subsidiaries to lease our
properties provides a more efficient alignment of and ability to capture the
economic interests of property ownership. Under the prior lease structure with
MeriStar Hotels & Resorts, we received lease payments based on the revenues
generated by our properties, but MeriStar Hotels & Resorts operated our
properties in order to maximize net operating income from the properties. This
inconsistency could potentially result in the properties being operated in a way
that did not maximize revenues. With the assignment of the leases for each of
the 106 properties managed by MeriStar Hotels & Resorts to the taxable REIT
subsidiaries and the execution of the new management agreements, we gained the
economic risks and rewards related to the properties that are usually associated
with ownership of real estate, and property revenues became the basis for
MeriStar Hotels & Resorts' management fees. During the six months ended June 30,
2001, one hotel was sold, and we terminated four of the eight leases with Prime
Hospitality. At June 30, 2001, MeriStar Hotels & Resorts managed 109 of our
hotels.

Subsidiaries of MeriStar Hotels & Resorts assigned their participating
leases to our wholly-owned taxable REIT subsidiaries as of January 1, 2001. In
connection with the assignment, our taxable REIT subsidiaries executed new
management agreements with a subsidiary of MeriStar Hotels & Resorts to manage
the hotels. Under these management agreements, the taxable REIT subsidiaries pay
a management fee to MeriStar Hotels & Resorts for each property. The taxable
REIT subsidiaries in turn

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make rental payments to us under the participating leases. The management
agreements have been structured to substantially mirror the economics of the
former leases. The transactions did not result in any cash consideration
exchanged among the parties except in regard to the transfer of hotel operating
assets and liabilities to the taxable REIT subsidiaries. Under the new
management agreements, the base management fee is 2.5% of total hotel revenue
plus incentive payments, based on meeting performance thresholds, that could
total up to 1.5% of total hotel revenue. The agreements have an initial term of
10 years with three renewal periods of five years each at the option of MeriStar
Hotels & Resorts, subject to some exceptions. Because these leases have been
assigned to our taxable REIT subsidiaries, we now bear the operating risk
associated with the hotels.

FINANCIAL CONDITION

June 30, 2001 Compared with December 31, 2000

Our total assets increased by $78.5 million to $3,085.0 million at June 30,
2001 from $3,006.5 million at December 31, 2000 primarily due to:

- lending $36.0 million to MeriStar Hotels & Resorts under a revolving
credit agreement;

- deferring $8.1 million in financing costs related to issuing $500 million
of senior unsecured notes;

- capital expenditures at the hotels;

- the increase in cash and other operating assets of $65.7 million related
to the assignment of the hotel leases with MeriStar Hotels & Resorts to
the taxable subsidiaries; partially offset by

- the decrease of $11.3 million due from MeriStar Hotels & Resorts;

- the sale of one hotel and the use of the $7.3 million in proceeds to
paydown debt; and

- depreciation on hotel assets.

Total liabilities increased by $93.0 million to $1,865.5 million at June
30, 2001 from $1,772.5 million at December 31, 2000 due mainly to:

- net borrowings of long-term debt;

- a $16.0 million increase in accrued interest due to the $500 million
senior secured notes sold in January 2001;

- the adoption of FASB 133 and the related recording of a $7.1 million
liability for the derivative instruments; and

- the increase in operating liabilities of $65.7 million related to the
assignment of the hotel leases with MeriStar Hotels & Resorts to the
taxable REIT subsidiaries.

Long-term debt increased by $14.8 million to $1,653.1 million at June 30,
2001 from $1,638.3 million at December 31, 2000 due primarily to:

- $500 million in senior unsecured notes sold, partially offset set by

- the repayment of the revolving credit facility from the proceeds of the
senior unsecured notes borrowings and cash generated by operations.

Partners' capital decreased $25.9 million to $1,116.9 million at June 30,
2001 from $1,142.8 million at December 31, 2000 due primarily to:

- the payment of distributions;

- allocations of capital to redeemable unitholders as a result of increases
in MeriStar's stock price; and

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- $7.1 million increase in accumulated other comprehensive loss due mainly
to the adoption of SFAS 133 described above; partially offset by

- net income for 2001; and

- the issuance of additional common limited partnership units to MeriStar.

RESULTS OF OPERATIONS

Six Months Ended June 30, 2001 Compared with Six Months Ended June 30, 2000.

Until January 1, 2001, MeriStar Hotels & Resorts leased substantially all
of our hotels. Under these leases, MeriStar Hotels & Resorts assumed all of the
operating risks and rewards of these hotels and paid us a percentage of each
hotel's revenue under the lease agreements. Therefore, for financial statement
purposes through December 31, 2000, MeriStar Hotels & Resorts recorded all of
the operating revenues and expenses of our hotels in its statements of
operations, and we recorded lease revenue earned under the lease agreements in
our statements of operations. Effective January 1, 2001, MeriStar Hotels &
Resorts assigned the hotel leases to our newly created, wholly owned, taxable
REIT subsidiaries and its taxable REIT subsidiaries, in turn, entered into
management agreements with MeriStar Hotels & Resorts to manage the hotels. As a
result of this change in structure, our wholly-owned taxable REIT subsidiaries
have assumed the operating risks and rewards of the hotels and now pay MeriStar
Hotels & Resorts a management fee to manage the hotels. For consolidated
financial statement purposes, effective January 1, 2001, we now record all of
the revenues and expenses of the hotels in our statements of operations,
including the management fee paid to MeriStar Hotels & Resorts.

Our total revenues and total operating expenses increased $461.3 million
and $421.0 million, respectively, for the six months ended June 30, 2001 as
compared to the same period in 2000. As described in the preceding paragraph,
the significant increases result from the fact that we now record the hotel
operating revenue and expenses in our consolidated financial statements
effective January 1, 2001, while it only recorded lease revenue in 2000. As a
result, our operating results for the six months ended June 30, 2001 are not
directly comparable to those for the same period in 2000.

For comparative purposes, the following shows the results for the six
months ended June 30, 2000 on a pro forma basis assuming the leases with
MeriStar Hotels & Resorts were converted to management contracts on January 1,
2000 compared to actual results for the six months ended June 30, 2001 (in
thousands):

<Table>
<Caption>
2001 2000
-------- --------

Revenue..................................................... $609,851 $622,945
Total expenses.............................................. 565,913 548,125
Net income before loss on sale of assets and extraordinary
items..................................................... 42,690 73,601
Net income.................................................. 40,402 80,440
Recurring EBITDA............................................ 178,499 187,339
</Table>

The following table provides our hotels' operating statistics on a same
store basis for the six months ended June 30, 2001 and 2000.

<Table>
<Caption>
2001 2000 CHANGE
------- ------- ------

Revenue per available room................................ $ 79.66 $ 81.18 (1.9)%
Average daily rate........................................ $112.28 $110.38 1.7%
Occupancy................................................. 70.9% 73.5% (3.6)%
</Table>

Total revenue decreased $13.0 million to $609.9 million in 2001 from $622.9
million in 2000, on a pro forma basis, due primarily to a $10.1 million decrease
in room revenue related to a 3.5% decrease in occupancy. This decrease is
attributable to the recent slowing of our national economy and its impact on
business and leisure travel.

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The current economic slowdown and the resulting declines in RevPAR, which
began in March 2001, are currently continuing. We anticipate that third quarter
RevPAR will be less than that of the prior year period and less than that of the
second quarter of 2001. The decline in occupancy during the second and third
quarters is expected to lead to declines in room rates as hotels compete more
aggressively for guests. If the economic slowdown worsens or continues for a
protracted time, it could have a material adverse effect on our operations and
earnings.

Total expenses increased $17.8 million to $565.9 million for the six months
ended June 30, 2001 from $548.1 million for the same period in 2000 on a pro
forma basis due primarily to:

- $9.3 million in swap termination costs;

- the $2.1 million write down of the investment in STS Hotel Net;

- $3.8 million in FelCor merger costs;

- $1.3 million in costs to terminate leases with Prime Hospitality
Corporation;

- an increase in depreciation on hotel assets; and

- a $4.2 million increase in property operating costs due primarily to a
$3.2 million increase in energy costs.

During the six months ended June 30, 2001, we recorded a charge in the
amount of $2.1 million to write-off its investment in STS Hotel Net, a provider
of internet access and related services to the hospitality industry. During
2000, STS Hotel Net continued to pursue its business strategy and operate its
business. During the first quarter of 2001, STS Hotel Net secured additional
equity from an entity which is also engaged in providing similar services to the
hospitality industry. Also, during the first quarter of 2001, the operating
environment for STS Hotel Net deteriorated significantly and STS Hotel Net was
unable to generate adequate revenues or obtain needed additional financing. As a
result, STS Hotel Net significantly curtailed its operations and, accordingly,
we wrote off its investment in STS Hotel Net at March 31, 2001.

Recurring EBITDA is presented before the effect of non-recurring items,
swap termination costs, the write down of the investment in STS Hotel Net,
FelCor merger costs and costs to terminate leases with Prime Hospitality
Corporation. Recurring EBITDA decreased $8.8 million to $178.5 million in 2001
from $187.3 million in 2000.

In 2001, we paid down $300 million of term loans under our revolving credit
facility. This resulted in an extraordinary loss of $1.2 million, net of tax
effect.

In 2001, we sold one hotel and received $7.3 million. This resulted in a
loss on the sale of the asset of $1.1 million, net of tax.

Year Ended December 31, 2000 compared with the Year Ended December 31, 1999

Substantially all of our hotels were leased to and operated by MeriStar
Hotels & Resorts during both fiscal years. Participating lease revenue
represents lease payments from the lessees under the participating lease
agreements. Total revenue increased by $25.9 million to $400.7 million in 2000
compared to $374.8 million in 1999. This increase was primarily attributable to
an increase of $23.7 million in participating lease revenue resulting from an
increase in room revenue at our hotels under lease. The following table provides
our hotels' operating statistics on a same-store basis for the year:

<Table>
<Caption>
2000 1999 CHANGE
------- ------- ------

Revenue per available room................................ $ 77.71 $ 73.51 5.71%
Average daily rate........................................ $107.60 $101.92 5.57%
Occupancy................................................. 72.2% 72.1% 0.14%
</Table>

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Operating expenses increased to $170.3 million for the year ended December
31, 2000 from $156.5 million for the same period in 1999 due primarily to:

- to an increase in depreciation on hotel assets;

- an increase in administrative costs, as we added personnel during 2000 to
address the operating changes associated with the REIT Modernization Act;
and

- increased insurance costs.

Net interest expense increased $17.1 million to $117.5 million for the year
ended December 31, 2000, from $100.4 million in 1999 due mainly to:

- lower capitalized interest due to a decrease in capital expenditures in
2000;

- an increase in variable interest rates during 2000 and higher interest
rates on swap arrangements executed in 2000; partially offset by

- a lower average debt balance during 2000.

In 2000, we repaid $18.2 million of our notes payable to MeriStar at a
discount in connection with its repurchase of its convertible notes at an equal
discount. This resulted in an extraordinary gain of $3.4 million.

In 2000, we sold three limited service hotels and received $24.1 million.
This resulted in a gain on sale of assets of $3.4 million.

EBITDA grew $20.9 million to $341.0 million in 2000 from $320.1 million in
1999. This growth is due to:

- the increase in participating lease revenue; partially offset by

- the increase in administrative and insurance costs.

Year Ended December 31, 1999 compared with the Year Ended December 31, 1998

Substantially all of our hotels were leased to and operated by MeriStar
Hotels & Resorts from August 2, 1998 through the end of the 1999 fiscal year.
Participating lease revenue represents lease payments from the lessees under the
participating lease agreements. Total revenue decreased by $147.2 million to
$374.8 million in 1999 compared to $522.0 million in 1998. This decrease was
primarily attributable to the change in the types of revenues recorded in our
financial statements in periods before and after August 2, 1998, the date of the
merger of CapStar Hotel Company and American General Hospitality Corporation and
the spin-off of MeriStar Hotels & Resorts.

The following table provides our hotels' operating statistics on a
same-store basis for the year:

<Table>
<Caption>
1999 1998 CHANGE
------- ------- ------

Revenue per available room................................ $ 74.05 $ 71.80 3.1%
Average daily rate........................................ $102.39 $100.96 1.4%
Occupancy................................................. 72.3% 71.1% 1.7%
</Table>

There were no department operating expenses in 1999 compared to $142.5
million in 1998. This decrease was the result of the hotel operations being
leased to MeriStar Hotels & Resorts after August 2, 1998, in conjunction with
the merger and spin-off of MeriStar Hotels & Resorts.

Undistributed operating expenses decreased significantly in 1999 as a
result of the merger. Prior to the spin-off of MeriStar Hotels & Resorts we were
responsible for all hotel operating expenses. Subsequent to August 3, 1998, we,
as owner and lessor, were only responsible for real estate taxes, property
insurance and various other undistributed expenses. Depreciation and
amortization increased $43.0 million to $101.8 million in 1999 from $58.8
million in 1998 as a result of the assets acquired in the merger.

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Net interest expense increased $49.9 million to $100.4 million for the year
ended December 31, 1999, from $50.5 million in 1998. This increase was
attributable to:

- the borrowings used to finance the acquisition of hotels during 1998;

- the borrowings used to finance renovations of hotels during 1998 and
1999;

- the new debt associated with the merger;

- higher average interest rates; and

- 1999 borrowings made to finance real estate ventures.

In 1999, we recognized extraordinary losses of $4.6 million due to the
write-off of unamortized deferred financing fees in conjunction with refinancing
some credit facilities.

EBITDA grew $125.3 million to $320.1 million in 1999 from $194.8 million in
1998. This growth is due to:

- the merger;

- other hotel acquisitions which occurred during 1998; partially offset by

- the spin-off of MeriStar Hotels & Resorts.

LIQUIDITY AND CAPITAL RESOURCES

Sources of Cash

Our principal sources of liquidity are cash on hand, cash generated from
operations, and funds from external borrowings and debt and equity offerings. We
expect to fund our continuing operations through cash generated by its hotels.
We also expect to finance hotel acquisitions, hotel renovations and joint
venture investments through a combination of internally generated cash, external
borrowings, and the issuance of our limited partnership units. Additionally,
MeriStar must distribute to stockholders at least 90% of its taxable income,
excluding net capital gains, to preserve its status as a REIT. MeriStar, as our
general partner, is required to use its best efforts to cause our partnership
distributions to it to be sufficient to comply with this requirement. We expect
to fund these distributions through cash generated from operations, borrowings
on the credit facilities or through the preferred return on the investment in
MeriStar Investment Partners, LP. We generated $114.6 million of cash from
operations during the first six months of 2001.

Uses of Cash

We used $49.5 million of cash in investing activities during the six months
ended June 30, 2001, primarily for:

- the $36.0 million note receivable from MeriStar Hotels & Resorts; and

- capital expenditures at hotels; partially offset by

- hotel operating cash received on lease conversions; and

- proceeds from selling one hotel.

We used $45.0 million of cash from financing activities during the six
months ended June 30, 2001 primarily for:

- payments of financing costs, distributions; and

- additional financing costs related to issuing the $500 million of senior
unsecured notes, partially offset by net borrowings on our credit
facilities.

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In January 2001, we sold $500 million of senior unsecured notes. The senior
unsecured notes are structured as:

- $300 million in notes with a 9.0% interest rate which mature on January
15, 2008, and

- $200 million in notes with a 9.13% interest rate which mature on January
15, 2011.

The proceeds were used to repay outstanding debt under our revolving credit
facility and to make payments to terminate some swap agreements that hedged
variable interest rates of the loans that we repaid. The repayments of the term
loans under the credit facility resulted in an extraordinary loss of $1.2
million, net of tax. As of June 30, 2001, we had $273.0 million available under
our senior secured credit facility. The weighted average interest rate on
borrowings outstanding under our credit facility as of June 30, 2001 was 7.7%.

Capital for renovation work is expected to be provided by a combination of
internally generated cash and external borrowings. Initial renovation programs
for most of the hotels are complete or nearing completion. Once initial
renovation programs for a hotel are completed, We expect to spend approximately
4% annually of hotel revenues for ongoing capital expenditure programs,
including room and facilities refurbishments, renovations, and furniture and
equipment replacements. For the six months ended June 30, 2001, we spent $23.8
million on renovation and ongoing property capital expenditure programs. We
intend to spend an additional $28.0 million during 2001 to complete the
renovation programs and for the ongoing capital expenditure programs.

We believe cash generated by operations, together with anticipated
borrowing capacity under the credit facilities, will be sufficient to fund the
existing working capital requirements, ongoing capital expenditures, and debt
service requirements. We believe, however, that future capital decisions will
also be made in response to specific acquisition and/or investment
opportunities, depending on conditions in the capital and/or other financial
markets. Accordingly, we may consider increasing the borrowing capacity or
issuing additional debt or partnership units and these proceeds could be used to
finance acquisitions or investments, refinance existing debt, or repurchase
common stock.

We are obligated to lend MeriStar Hotels & Resorts up to $50 million for
general corporate purposes under a revolving credit agreement. As of June 30,
2001, there was $36 million outstanding under this revolving credit agreement.
FelCor, MeriStar Hotels & Resorts and we have agreed to amend, effective when
the merger is complete, the credit agreement to fix its maturity at February 28,
2004, set the interest rate at 600 basis points over the 30-day London Interbank
Offered Rate and set the default rate of interest at 800 basis points over the
30-day London Interbank Offered Rate. We have agreed to use our best efforts to
obtain the consents of MeriStar Hotels & Resorts' senior lenders to these
amendments.

SEASONALITY

Demand in the lodging industry is affected by recurring seasonal patterns.
For non-resort properties, demand is lower in the winter months due to decreased
travel and higher in the spring and summer months during peak travel season. For
resort properties, demand is generally higher in winter and early spring. Since
the majority of the hotels are non-resort properties, the operations generally
reflect non-resort seasonality patterns. We have lower revenue, operating income
and cash flow in the first and fourth quarters and higher revenue, operating
income and cash flow in the second and third quarters.

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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk from changes in interest rates on long-term
debt obligations that impact the fair value of these obligations. Our policy is
to manage interest rate risk through the use of a combination of fixed and
variable rate debt. Our interest rate risk management objective is to limit the
impact of interest rate changes on earnings and cash flows and to lower the
overall borrowing costs. To achieve these objectives, we borrow at a combination
of fixed and variable rates, and may enter into derivative financial instruments
such as interest rate swaps, caps and treasury locks in order to mitigate our
interest rate risk on a related financial instrument. We do not enter into
derivative or interest rate transactions for speculative purposes. We do not
have cash flow exposure due to general interest rate changes for fixed long-term
debt obligations.

The table below, as of June 30, 2001, presents the principal amounts, in
thousands of dollars, for our fixed and variable rate debt instruments,
weighted-average interest rates by year of expected maturity, and fair values to
evaluate the expected cash flows and sensitivity to interest rate changes.

<Table>
<Caption>
LONG-TERM DEBT
----------------------------------------------------------
AVERAGE AVERAGE
EXPECTED MATURITY FIXED RATE INTEREST RATE VARIABLE RATE INTEREST RATE
- ----------------- ---------- ------------- ------------- -------------

2001................................. $ 3,697 8.2% $ 16,000 7.8%
2002................................. 15,897 8.6% 32,000 7.8%
2003................................. 8,589 8.2% 305,000 7.7%
2004................................. 171,168 5.1% 69,000 7.7%
2005................................. 9,265 8.1% -- --
Thereafter........................... 1,022,434 8.6% -- --
---------- ---- -------- ----
Total...................... $1,231,050 8.1% $422,000 7.5%
========== ==== ======== ====
Fair Value at 6/30/01...... $1,202,095 $422,000
========== ========
</Table>

Upon the sale of $500 million senior unsecured notes in January 2001, our
we reduced the term loans under our senior secured credit facility by $300
million. At that time, we terminated three swap agreements with a notional
amount of $300 million that were designated to hedge interest rates on the term
loans that were repaid. They made net payments totaling $9.3 million to the
counter parties to terminate these swap agreements.

As of June 30, 2001, we had four swap agreements with notional principal
amounts totaling $400 million. These swap agreements provide hedges against the
impact future interest rates have on floating LIBOR rate debt instruments. The
swap agreements effectively fix the 30-day LIBOR between 6.0% and 6.4%. The swap
agreements expire between September 2001 and April 2003. For the six months
ended June 30, 2001 and 2000, we (made)/received net payments of approximately
$(1,627,000) and $165,000, respectively.

On March 22, 2001 we entered into a $100 million forward swap agreement to
fix the 30-day LIBOR at 4.77%. The effective date of the agreement is October 1,
2001 and the agreement expires on July 31, 2003.

In anticipation of the August 1999 completion of our mortgage-backed
secured facility, we entered into two separate hedge transactions during July
1999. Upon completion of the secured facility, we terminated the underlying
treasury lock agreements, resulting in a net payment of $5.1 million. This
amount was deferred and is being recognized as a reduction to interest expense
over the life of the underlying debt. As a result, the effective interest rate
on the secured facility is 7.76%.

As of June 30, 2001, after consideration of the hedge agreements described
above, 99% of we debt had a fixed interest rate, with an overall weighted
average interest rate of 8.02%.

Although we conduct business in Canada, the Canadian operations were not
material to our consolidated financial position, results of operations or cash
flows during the six months ended June 30,

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2001 and 2000 and the years ended December 31, 2000 and 1999. Additionally,
foreign currency transaction gains and losses were not material to our results
of operations for the six months ended June 30, 2001 and 2000 and the years
ended December 31, 2000 and 1999. Accordingly, we were not subject to material
foreign currency exchange rate risk from the effects that exchange rate
movements of foreign currencies would have on our future costs or on future cash
flows we would receive from foreign subsidiaries. To date, we have not entered
into any significant foreign currency forward exchange contracts or other
derivative financial instruments to hedge the effects of adverse fluctuations in
foreign currency exchange rates.

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BUSINESS

GENERAL

We believe that the upscale, full-service segment of the lodging industry
is the most attractive segment in which to own hotels. The upscale, full-service
segment is attractive for several reasons. First, the real estate market has
recently experienced a significant slowdown in the construction of upscale,
full-service hotels. Second, upscale, full-service hotels appeal to a wide
variety of customers, thus reducing the risk of decreasing demand from any
particular customer group. Additionally, these hotels have particular appeal to
both business executives and upscale leisure travelers, customers who are
generally less price sensitive than travelers who use limited-service hotels.

ACQUISITION STRATEGY

We focus our attention on investments in hotels located in markets with
economic, demographic and supply dynamics favorable to hotel owners. Through an
extensive due diligence process, we select those acquisition targets where we
believe selective capital improvements and well selected third-party management
will increase the hotel's ability to attract key demand segments, enhance hotel
operations and increase long-term value. In order to evaluate the relative
merits of each investment opportunity, our senior management, together with
MeriStar Hotels & Resorts, creates detailed plans covering all areas of
renovation and operation. These plans serve as the basis for our acquisition
decisions and guide subsequent renovation and operating plans which will be
carried out by a third-party hotel operator.

For those tax years beginning before January 1, 2001, in order to maintain
its qualification as a REIT, MeriStar Hospitality Corporation was required to
make annual distributions to its stockholders of at least 95% of its real estate
investment trust taxable income, determined without regard to the deduction for
dividends paid and by excluding net capital gains. For the taxable years
beginning January 1, 2001, under the REIT Modernization Act, the percentage of
required annual distributions was reduced to 90%.

Among other things, under the terms of our partnership agreement, we may
not take or refrain from taking any action which, in the judgment of MeriStar
Hospitality Corporation, in its sole and absolute discretion:

- could adversely affect the ability of MeriStar Hospitality Corporation to
continue to qualify as a REIT unless MeriStar Hospitality Corporation
otherwise ceases to qualify as a REIT; or

- could subject MeriStar Hospitality Corporation to any additional taxes
under section 857 or section 4981 of the Internal Revenue Code.

As a result, to complete acquisitions and renovations, we rely heavily on
our ability to raise new capital through debt and equity offerings. That ability
is dependent on the then-current status of the capital markets.

Although we are not currently pursuing direct acquisition opportunities,
due to the current economic environment and the current costs of our equity
capital, we continue to be aware of acquisition opportunities in the upscale,
full-service hotel market. We may make investments in hotels through co-
investment with strategic partners if such investments offer current cash
returns.

THE INTERCOMPANY AGREEMENT

MeriStar Hospitality Corporation and we are parties to an intercompany
agreement with MeriStar Hotels & Resorts. On completion of the FelCor merger,
FelCor will assume MeriStar Hospitality's rights and obligations under the
agreement. The intercompany agreement provides that, for so long as the

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agreement remains in effect, MeriStar Hotels & Resorts is prohibited from making
real property investments that a real estate investment trust could make unless:

- MeriStar Hospitality Corporation and we are first given the opportunity,
but elect not to pursue the activities or investments;

- it is on land already owned or leased by MeriStar Hotels & Resorts or
subject to a lease or purchase option in favor of MeriStar Hotels &
Resorts;

- MeriStar Hotels & Resorts will operate the property under a trade name
owned by MeriStar Hotels & Resorts; or

- it is a minority investment made as part of a lease or management
agreement arrangement.

MeriStar Hospitality Corporation and we have a right of first refusal with
respect to any real property investment to be sold by MeriStar Hotel & Resorts.

- consistent with MeriStar Hospitality Corporation's status as a REIT, it
must enter into a management agreement with an unaffiliated third party
with respect to the property;

- MeriStar Hotels & Resorts is qualified to be the manager of that
property; and

- the property is not to be operated by the owner of a hospitality trade
name under that trade name.

Because of the provisions of the intercompany agreement, the nature of our
business and the opportunities we may pursue will be restricted.

Provision of Services

MeriStar Hotels & Resorts may provide MeriStar Hospitality Corporation and
us with services as MeriStar Hospitality Corporation or we may reasonably
request from time to time, including administrative, renovation supervision,
corporate, accounting, financial, insurance, legal, tax, information technology,
human resources, acquisition identification and due diligence, and operational
services. MeriStar Hospitality Corporation compensates MeriStar Hotels & Resorts
for services provided in an amount determined in good faith by MeriStar Hotels &
Resorts as the amount a third party would charge MeriStar Hospitality
Corporation for comparable services. The arrangements relating to the provision
of these services were not subject to arms-length negotiation.

Equity Offerings

If either MeriStar Hospitality Corporation or MeriStar Hotels & Resorts
desires to engage in a securities issuance, the issuing party will give notice
to the other party as promptly as practicable of its desire to engage in a
securities issuance. The notice will include the proposed material terms of such
issuance, to the extent determined by the issuing party, including whether the
issuance is proposed to be pursuant to public or private offering, the amount of
securities proposed to be issued and the manner of determining the offering
price and other terms of the securities. The non-issuing party will cooperate
with the issuing party in every way to effect any securities issuance of the
issuing party by assisting in the preparation of any registration statement or
other document required in connection with the issuance and, in connection with
that issuance, providing the issuing party with such information as may be
required to be included in the registration statement or other document.

Term

The intercompany agreement will terminate upon the earlier of August 3,
2008, and the date of a change in ownership or control of MeriStar Hotels &
Resorts.

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Credit Facility

We are obligated to lend MeriStar Hotels & Resorts up to $50 million for
general corporate purposes under a revolving credit agreement. On March 1, 2000,
the revolving credit agreement was amended to reduce the maximum borrowing limit
from $75 million to $50 million, increase the interest rate from 350 basis
points over the 30-day London Interbank Offered Rate to 650 basis points over
the 30-day LIBOR and set the maturity date of the loan to the 91st day following
the maturity of MeriStar Hotel & Resorts' senior credit facility, as amended,
restated, refinanced or renewed. As of June 30, 2001, there was $36 million
outstanding under this revolving credit agreement. Upon effectiveness of the
merger, FelCor LP will succeed to our role as lender under this credit facility.

FelCor, MeriStar Hotels & Resorts and we have agreed to amend, effective
when the FelCor merger is complete, the credit agreement to fix its maturity at
February 28, 2004, set the interest rate at 600 basis points over the 30-day
LIBOR and set the default rate of interest at 800 basis points over the 30-day
LIBOR. We have agreed to use best efforts to obtain the consents of MeriStar
Hotels & Resorts' senior lenders to these amendments.

COMPETITION

We compete primarily in the upscale and mid-priced sectors of the
full-service segment of the lodging industry. In each geographic market in which
our hotels are located, there are other full- and limited-service hotels that
compete with our hotels. Competition in the U.S. lodging industry is based
generally on convenience of location, brand affiliation, price, range of
services and guest amenities offered, and quality of customer service and
overall product.

EMPLOYEES

As of June 30, 2001, MeriStar Hospitality Corporation and we employed 50
persons, all of whom work at the corporate headquarters.

FRANCHISES

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The following is a summary of our brand affiliations as of June 30, 2001:

<Table>
<Caption>
NUMBER OF
PROPERTIES
----------

Hilton Brands:
Embassy Suites............................................ 3
Doubletree and Doubletree Guest Suites.................... 6
Hilton and Hilton Suites.................................. 23
Six Continents Brands:
Holiday Inn............................................... 9
Crowne Plaza and Crowne Plaza Suites...................... 5
Holiday Inn Select........................................ 5
Starwood Brands:
Sheraton and Sheraton Suites.............................. 11
Westin.................................................... 4
Marriott Brands:
Courtyard by Marriott..................................... 5
Marriott.................................................. 3
Radisson Brands:
Radisson.................................................. 12
Other Brands................................................ 26
---
Total Hotels...................................... 113
===
</Table>

GOVERNMENTAL REGULATION

Americans with Disabilities Act.

Under the Americans with Disabilities Act, or ADA, all public
accommodations are required to meet specific requirements related to access and
use by disabled persons. These requirements became effective in 1992. Although
significant amounts have been and continue to be invested in ADA required
upgrades to our hotels, a determination that we are not in compliance with the
ADA could result in a judicial order requiring compliance, imposition of fines
or an award of damages to private litigants.

We are likely to incur additional costs of complying with the ADA; however,
such costs are not expected to have a material adverse effect on our results of
operations or financial condition.

Environmental Laws

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In addition, our hotels have been inspected to determine the presence of
asbestos. Federal, state and local environmental laws, ordinances and
regulations also require abatement or removal of asbestos-containing materials
and govern emissions of and exposure to asbestos fibers in the air.
Asbestos-containing materials are present in various building materials such as
sprayed-on ceiling treatments, roofing materials or floor tiles at some of the
hotels. Operations and maintenance programs for maintaining asbestos-containing
materials have been or are in the process of being designed and implemented, or
the asbestos-containing materials have been scheduled to be or have been abated,
at these hotels. Any liability resulting from non-compliance or other claims
relating to environmental matters are not expected to have a material adverse
effect on our results of operations or financial condition.

PROPERTIES

We and MeriStar Hospitality Corporation maintain corporate headquarters in
Washington, D.C. We own hotel properties throughout the United States and
Canada. As of June 30, 2001, we owned 113 hotels. We lease land for seven of our
hotels and also lease part of the land for six of our hotels. No one hotel
property is material to our operations. A typical hotel has meeting and banquet
facilities, food and beverage facilities and guest rooms and suites.

The hotels generally feature comfortable, modern guest rooms, extensive
meeting and convention facilities and full-service restaurant and catering
facilities that attract meeting and convention functions from groups and
associations, upscale business and vacation travelers as well as banquets and
receptions from the local community.

The following table sets forth some information with respect to our hotels
at June 30, 2001:

<Table>
<Caption>
GUEST
HOTEL LOCATION ROOMS
- ----- -------- ------

Sheraton Hotel...................................... Mesa, AZ 273
Crowne Plaza Hotel.................................. Phoenix, AZ 250
Embassy Suites...................................... Tucson, AZ 204
Courtyard by Marriott............................... Century City, CA 134
Hilton Hotel........................................ Irvine, CA 289
Marriott Hotel...................................... Los Angeles, CA 469
Courtyard by Marriott............................... Marina Del Rey, CA 276
Hilton Hotel........................................ Monterey, CA 204
Doral Palm Springs.................................. Palm Springs, CA 285
Hilton Hotel........................................ Sacramento, CA 331
Holiday Inn Select.................................. San Diego, CA 317
Sheraton Hotel...................................... San Francisco, CA 525
Crowne Plaza Hotel.................................. San Jose, CA 239
Wyndham Hotel....................................... San Jose, CA 355
Hilton Hotel........................................ San Pedro, CA 226
Santa Barbara Inn................................... Santa Barbara, CA 71
Holiday Inn......................................... Colorado, Springs, CO 200
Sheraton Hotel...................................... Colorado, Springs, CO 500
</Table>

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<Table>
<Caption>
GUEST
HOTEL LOCATION ROOMS
- ----- -------- ------

Embassy Suites...................................... Englewood, CO 236
Hilton Hotel........................................ Harford, CT 388
Ramada Hotel........................................ Meriden, CT 150
Ramada Hotel........................................ Shelton, CT 155
Doubletree Bradley Airport.......................... Windsor Locks, CT 200
Embassy Row Hilton Hotel............................ Washington, DC 193
Georgetown Inn...................................... Washington, DC 96
The Latham Hotel.................................... Washington, DC 143
South Seas Plantation............................... Captiva, FL 579
Hilton Hotel........................................ Clearwater, FL 426
Ramada Hotel........................................ Clearwater, FL 289
Hilton Hotel........................................ Cocoa Beach, FL 296
Holiday Inn......................................... Ft. Lauderdale, FL 240
Howard Johnson Resort............................... Key Largo, FL 100
Westin Hotel........................................ Key Largo, FL 200
Courtyard by Marriott............................... Lake Buena Vista, FL 314
Sheraton Hotel...................................... Lake Buena Vista, FL 489
Radisson Hotel...................................... Marco Island, FL 268
Holiday Inn......................................... Madeira Beach, FL 149
Radisson Hotel...................................... Orlando, FL 742
Best Western Hotel.................................. Sanibel Island, FL 46
Safety Harbor Resort and Spa........................ Sanibel Island, FL 193
Sanibel Inn......................................... Sanibel Island, FL 96
Seaside Inn......................................... Sanibel Island, FL 32
Song of the Sea..................................... Sanibel Island, FL 30
Sundial Beach Resort................................ Sanibel Island, FL 243
Doubletree Hotel.................................... Tampa, FL 496
Doubletree Guest Suites............................. Atlanta, GA 155
Westin Atlanta Airport.............................. Atlanta, GA 495
Jekyll Inn.......................................... Jekyll Island, GA 262
Wyndham Hotel....................................... Marietta, GA 218
Radisson Hotel...................................... Arlington Heights, IL 201
Radisson Hotels & Suites............................ Chicago, IL 350
Holiday Inn......................................... Rosemont, IL 507
Radisson Hotel...................................... Schaumburg, IL 200
Doubletree Guest Suites............................. Indianapolis, IN 137
Radisson Plaza...................................... Lexington, KY 367
Hilton Hotel........................................ Louisville, KY 321
Holiday Inn Select.................................. Kenner, LA 303
Hilton & Towers..................................... Lafayette, LA 327
Maison de Ville..................................... New Orleans, LA 23
Radisson Hotel...................................... Annapolis, MD 219
Radisson Hotel...................................... Baltimore, MD 148
Sheraton Hotel...................................... Columbia, MD 287
Hilton Hotel........................................ Detroit, MI 151
Hilton Hotel........................................ Grand Rapids, MI 224
Holiday Inn Sports Complex.......................... Kansas City, MO 163
Sheraton Airport Plaza.............................. Charlotte, NC 222
Hilton Hotel........................................ Durham, NC 194
Courtyard by Marriott............................... Durham, NC 146
Ramada Hotel........................................ Mahwah, NJ 128
</Table>

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<Table>
<Caption>
GUEST
HOTEL LOCATION ROOMS
- ----- -------- ------

Sheraton Hotel...................................... Mahwah, NJ 225
Westin Hotel........................................ Morristown, NJ 199
Four Points Hotel................................... Mt. Arlington, NJ 124
Doral Forrestal..................................... Princeton, NJ 290
Courtyard by Marriott............................... Secaucus, NJ 165
Marriott Hotel...................................... Somerset, NJ 440
Doubletree Hotel.................................... Albuquerque, NM 295
Wyndham Hotel....................................... Albuquerque, NM 276
Crowne Plaza Hotel.................................. Las Vegas, NV 201
St. Tropez Suites................................... Las Vegas, NV 149
Radisson Hotel...................................... Rochester, NY 171
Radisson Hotel...................................... Middleburg Heights, OH 237
Hilton Hotel........................................ Toledo, OH 213
Westin Hotel........................................ Oklahoma City, OK 395
Crowne Plaza Hotel.................................. Lake Oswego, OR 161
Sheraton Hotel...................................... Frazer, PA 198
Embassy Suites...................................... Philadelphia, PA 288
Holiday Inn Select.................................. Trevose, PA 215
Hilton Hotel........................................ Arlington, TX 309
Doubletree Hotel.................................... Austin, TX 350
Hilton & Towers..................................... Austin, TX 320
Holiday Inn Select.................................. Bedford, TX 243
Radisson Hotel...................................... Dallas, TX 304
Renaissance Hotel................................... Dallas, TX 289
Sheraton Hotel...................................... Dallas, TX 348
Hilton Hotel........................................ Houston, TX 292
Marriott Hotel...................................... Houston, TX 302
Hilton Hotel........................................ Houston, TX 295
Sheraton Hotel...................................... Houston, TX 382
Holiday Inn Select.................................. Irving, TX 409
Hilton Hotel........................................ Midland, TX 249
Hilton Hotel........................................ Salt Lake City, UT 287
Holiday Inn......................................... Alexandria, VA 178
Radisson Hotel...................................... Alexandria, VA 253
Hilton Hotel........................................ Arlington, VA 209
Hilton Hotel........................................ Arlington, VA 386
Richmond Hotel and Conference Center................ Richmond, VA 280
Hilton Hotel........................................ Bellevue, WA 179
Crowne Plaza Hotel.................................. Madison, WI 226
Holiday Inn......................................... Madison, WI 194
Holiday Inn......................................... Calgary, Alberta, Canada 170
Sheraton Hotel...................................... Guildford, B.C., Canada 278
Holiday Inn......................................... Vancouver, B.C., Canada 100
Ramada Hotel........................................ Vancouver, B.C., Canada 118
------
Total Rooms......................................... 28,877
======
</Table>

The Leases

Until January 1, 2001, subsidiaries of MeriStar Hotels & Resorts leased 106
of the 114 hotels. Each lease provided for an initial term of 12 years. Each
lease provided MeriStar Hotels & Resorts with three

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renewal options of five years each, except in the case of properties with ground
leases having a remaining term of less than 40 years, provided that:

- MeriStar Hotels & Resorts would not have the right to a renewal if a
change in the tax law has occurred that would permit us to operate the
hotel directly;

- if MeriStar Hotels & Resorts elected not to renew a lease for any
applicable hotel, then we had the right to reject the exercise of a
renewal right on a lease of a comparable hotel; and

- the rent for each renewal term would be adjusted to reflect the then fair
market rental value of the hotel.

If MeriStar Hospitality Corporation and MeriStar Hotels & Resorts were
unable to agree upon the then fair market rental value of a hotel, the lease
would have terminated upon the expiration of the then current term and MeriStar
Hotels & Resorts then would have had a right of first refusal to lease the hotel
from us on those terms as MeriStar Hospitality Corporation may have agreed upon
with a third-party lessee.

BASE RENT; PARTICIPATING RENT; ADDITIONAL CHARGES

Each lease required MeriStar Hotels & Resorts to pay:

- fixed monthly base rent,

- participating rent, which was payable monthly and based on specified
percentages of room revenue, food and beverage revenue and telephone and
other revenue at each hotel in excess of base rent, and

- some other amounts, including interest accrued on any late payments or
charges.

Base rent and departmental revenue on which the rent percentage is based
were increased annually by a percentage equal to the percentage increase in the
Consumer Price Index plus 0.75% in the case of the participating rent
departmental revenue thresholds, compared to the prior year. In addition, under
some circumstances, a reduced percentage rate would apply to the revenues
attributable to certain "discounted rates" that MeriStar Hotels & Resorts might
have offered. Base rent was payable monthly in arrears. Participating rent was
payable in arrears based on a monthly schedule adjusted to reflect the seasonal
variations in the hotel's revenue.

The leases required MeriStar Hotels & Resorts to pay rent, liability
insurance, all costs and expenses and all utility and other charges incurred in
the operation of the hotels. We were responsible for real estate and personal
property taxes and assessments, rent payable under ground leases, casualty
insurance, including loss of income insurance, capital impositions and capital
replacements and refurbishments, determined in accordance with generally
accepted accounting principles. The leases also provided for rent reductions and
abatements in the event of damage or destruction or a partial taking of any
hotel.

The leases also provided for a rental adjustment under specified
circumstances in the event of a major renovation of the hotel, or a change in
the franchisor of the hotel.

LESSEE CAPITALIZATION

The leases required MeriStar Hotels & Resorts, as guarantor of the leases,
to maintain a book net worth of not less than $40 million. Further, as of
January 1, 1999, for so long as the tangible net worth of MeriStar Hotels &
Resort was less than 17.5% of the aggregate rents payable under the leases for
the prior calendar year, MeriStar Hotels & Resorts was prohibited from paying
dividends or making distributions other than dividends or distributions made for
the purpose of permitting the partners of the operating partnership to pay taxes
on the taxable income of the operating partnership attributable to its partners
plus any required preferred distributions existing to partners.

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TERMINATION

MeriStar Hospitality Corporation had the right to terminate the applicable
lease upon the sale of a hotel to a third party or, upon MeriStar Hospitality
Corporation's determination not to rebuild after a casualty, upon payment to
MeriStar Hotels & Resorts of the fair market value of the leasehold estate,
except for properties initially identified by MeriStar Hotels & Resorts and
MeriStar Hospitality Corporation as properties slated to be sold. The fair
market value of the leasehold estate was determined by discounting to present
value at a discount rate of 10% per annum the cash flow for each remaining year
of the then current lease term, which cash flow would be deemed to be the cash
flow realized by MeriStar Hotels & Resorts under the applicable lease for the
12-month period preceding the termination date. MeriStar Hospitality Corporation
was to receive as a credit against any such termination payments an amount equal
to any outstanding "New Lease Credits," which means the projected cash flow,
determined on the same basis as the termination payment, of any new leases
entered into between MeriStar Hotels & Resorts and ourselves after the effective
date for the initial term of the new lease amortized on a straight-line basis
over the initial term of the new lease.

PERFORMANCE STANDARDS

MeriStar Hospitality Corporation had the right to terminate the applicable
lease if, in any calendar year, the gross revenues from a hotel were less than
95% of the projected gross revenues for that year as set forth in the applicable
budget unless:

- MeriStar Hotels & Resorts could reasonably demonstrate that the gross
revenue shortfall was caused by general market conditions beyond its
control, or

- MeriStar Hotels & Resorts "cured" the shortfall by paying to us the
difference between the rent that would have been paid to us had the
property achieved gross revenues of 95% of the budgeted amounts and the
rent paid based on actual gross revenues.

MeriStar Hotels & Resorts did not have the cure right for more than two
consecutive years.

The leases also required that MeriStar Hotels & Resorts spend in each
calendar year at least 95% of the amounts budgeted for marketing expenses and
for repair and maintenance expenses.

ASSIGNMENT AND SUBLEASING

MeriStar Hotels & Resorts did not have the right to assign a lease or
sublet a hotel without our prior written consent. For purposes of the lease, a
change in control of MeriStar Hotels & Resorts would have been deemed an
assignment of the lease and would require our consent, which could have been
granted or withheld in our sole discretion.

Management Agreements with MeriStar Hotels & Resorts

Until January 1, 2001, we leased all but eight of our hotels to MeriStar
Hotels & Resorts under the lease agreement described above.

Changes to the federal tax laws governing real estate investment trusts, or
REITs, were enacted in 1999 and became effective on January 1, 2001. Under those
changes, we are permitted to create taxable REIT subsidiaries, which may lease
the property we currently own and are taxable as C corporations. Because of
these changes in the tax laws, we have formed a number of wholly-owned REIT
taxable subsidiaries. We and MeriStar Hotels & Resorts assigned the
participating leases to our taxable REIT subsidiaries and the taxable
subsidiaries entered into management agreements with MeriStar Hotels & Resorts
to manage our hotels. Under these management agreements, the taxable REIT
subsidiaries pay MeriStar Hotels & Resorts a management fee. The taxable REIT
subsidiaries in turn make rental payments to us under the participating leases.
The management agreements have been structured to substantially mirror the
economics and terms of the former leases.

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MANAGEMENT FEES AND PERFORMANCE STANDARDS

Each taxable REIT subsidiary will pay MeriStar Hotels & Resorts a
management fee for each hotel equal to a specified percentage of aggregate hotel
operating revenues, increased or reduced, as the case may be, by 20% of the
positive or negative difference between:

- The actual excess of total operating revenues over total operating
expenses; and

- The projected excess of total operating revenues over total operating
expenses.

The total management fee for a hotel in any fiscal year will not be less than
2.5% or greater than 4.0% of aggregate hotel operating revenues.

TERM AND TERMINATION

The management agreements with MeriStar Hotels & Resorts will have initial
terms of 10 years with three renewal periods of five years each. A renewal will
not go into effect if a change in the federal tax laws permits us or one of our
subsidiaries to operate the hotel directly without adversely affecting the
ability of MeriStar Hospitality Corporation to qualify as a REIT or if MeriStar
Hotels & Resorts elects not to renew the agreement. We may elect not to renew
the management agreements only as provided below.

Our taxable REIT subsidiaries have the right to terminate a management
agreement for a hotel upon the sale of the hotel to a third party or if the
hotel is destroyed and not rebuilt after a casualty. Upon that termination, our
taxable REIT subsidiary will be required to pay MeriStar Hotels & Resorts the
fair market value of the management agreement. That fair market value will be
equal to the present value, using a discount rate of 10%, of the remaining
payments under the agreement, assuming that MeriStar Hotels & Resorts would have
been paid management fees under the agreement based on the operating results for
the 12 months preceding the termination. Our taxable REIT subsidiaries will be
able to credit against any termination payments that projected fees, discounted
to present value at a discount rate of 10%, under any management agreements or
leases entered into between us or our subsidiaries on the one hand and MeriStar
Hotels & Resorts on the other hand after August 3, 1998.

If gross operating profit from a hotel is less than 85% of the amount
projected in the hotel's budget in any fiscal year and gross operating profit
from that hotel is less than 90% of the projected amount in the next fiscal
year, our taxable subsidiaries will have the right to terminate the management
agreement for the hotel, unless:

- we did not materially comply with the capital expenditures contemplated
by the budget for either or both of the applicable fiscal years; or

- MeriStar Hotels & Resorts cures the shortfall by agreeing to reduce its
management fee for the next fiscal year by the amount of the shortfall
between the actual operating profit for the second fiscal year and 90% of
the projected gross operating profit for that year.

MeriStar Hotels & Resorts can only use the cure right once during the term of
the management agreement.

ASSIGNMENT

MeriStar Hotels & Resorts does not have the right to assign a management
agreement without the prior written consent of the relevant taxable REIT
subsidiary. A change in control of MeriStar Hotels & Resorts will require the
consent of the relevant subsidiary, which may be granted or withheld in its sole
discretion.

LEGAL PROCEEDINGS

In the course of our normal business activities, various lawsuits, claims
and proceedings have been or may be instituted or asserted against us. Based on
currently available facts, our management believes that the disposition of
matters that are pending or asserted will not have a material adverse effect on
our consolidated financial position, results of operations or liquidity.

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MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

We have no directors or officers. The following table lists the executive
officers and directors of MeriStar Hospitality Corporation, our general partner.

<Table>
<Caption>
NAME AGE OFFICE OR POSITION HELD
- ---- --- -----------------------

Paul W. Whetsell.................... 50 Director; Chairman and Chief Executive Officer
Steven D. Jorns..................... 52 Director; Vice Chairman
John Emery.......................... 36 Director; Chief Operating Officer
James F. Dannhauser................. 47 Director
Daniel L. Doctoroff................. 42 Director
William S. Janes.................... 48 Director
H. Cabot Lodge III.................. 45 Director
D. Ellen Shuman..................... 46 Director
Bruce G. Wiles...................... 50 Director
James R. Worms...................... 55 Director
</Table>

Paul W. Whetsell. Mr. Whetsell has been Chairman of the Board of Directors
and Chief Executive Officer of MeriStar Hospitality Corporation since August
1998. Mr. Whetsell has also been the Chairman of the Board of Directors and
Chief Executive Officer of MeriStar Hotels & Resorts since August 1988. Before
August 1998, Mr. Whetsell had been Chairman of the Board of Directors of CapStar
Hotel Company since 1996 and had served as President and Chief Executive Officer
of CapStar Hotel Company since its founding in 1987.

Steven D. Jorns. Mr. Jorns has been Vice Chairman of the Board of
Directors of MeriStar Hospitality Corporation since August 1998. Mr. Jorns was
also Chief Operating Officer of MeriStar Hospitality Corporation from August
1998 until January 1999. Mr. Jorns has also been Vice Chairman of the Board of
Directors of MeriStar Hotels & Resorts since August 1998. From April 1996 to
August 1998, Mr. Jorns had been the Chairman of the Board of Directors, Chief
Executive Officer and President of American General Hospitality Corporation. Mr.
Jorns was also the founder of American General Hospitality, Inc. and had served
since its formation in 1981 until August 1998 as its Chairman of the Board of
Directors, Chief Executive Officer and President.

John Emery. Mr. Emery has been a director of MeriStar Hospitality
Corporation since May 2000. Mr. Emery has served as Chief Operating Officer of
MeriStar Hospitality Corporation since April 2000. He currently also serves as
Chief Investment Officer of MeriStar Hotels & Resorts. From August 1998 to April
2000, Mr. Emery was Chief Financial Officer of MeriStar Hospitality Corporation.
From June 1997 until August 1998, Mr. Emery served as Chief Financial Officer
and Secretary of CapStar Hotel Company. From March 1996 to June 1997, Mr. Emery
served as Treasurer of CapStar Hotel Company. Prior to that, from January 1987
to September 1995, he worked for Deloitte & Touche LLP in various capacities,
culminating in Senior Manager for the hotel and real estate industries.

James F. Dannhauser. Mr. Dannhauser has been a director of MeriStar
Hospitality Corporation since August 1998. Mr. Dannhauser has been the Chief
Financial Officer of Six Flags, Inc. since October 1995 and a member of the
Board of Directors of Six Flags since December 1992. Six Flags, Inc. is a
publicly traded amusement park company listed on the NYSE. From 1990 through
June 1996, Mr. Dannhauser was a managing director of Lepercq de Neuflize & Co.
Incorporated, an investment banking firm. Mr. Dannhauser is a member of the
Board of Directors of Lepercq. Mr. Dannhauser serves as a Director of the
International Association of Amusement Parks and Attractions.

Daniel L. Doctoroff. Mr. Doctoroff has been a director of MeriStar
Hospitality Corporation since August 1998. Mr. Doctoroff is a Managing Partner
of Oak Hill Capital Management, Inc., the management company for Oak Hill
Capital Partners, L.P., a private investment partnership. Mr. Doctoroff

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has been Managing Director of Oak Hill Partners, Inc., the investment advisor to
several private investment funds, and its predecessor since August 1987; Vice
President and Director of Acadia Partners MGP, Inc. since March 1992; Vice
President of Keystone, Inc. since March 1992; and a Managing Partner of
Insurance Partners Advisors, L.P. since February 1994. Mr. Doctoroff is also a
Director of MeriStar Hotels & Resorts and Williams Scotsman, Inc.

William S. Janes. Mr. Janes has been a director of MeriStar Hospitality
Corporation since August 1998. Since 1990, Mr. Janes has served as a Principal,
and currently serves as President, of RMB Realty, Inc. which oversees the real
estate investments of Keystone, Inc. and related entities. Prior to that, from
1984 to 1989, Mr. Janes served as Regional General Partner of Lincoln Property
Company. Mr. Janes serves as a Director of MAX FW, LLC, Brazos Asset Management,
Brazos Fund, The Mendik Company Inc., Carr Real Estate Services and American
Skiing Company.

H. Cabot Lodge III. Mr. Lodge has been a director of MeriStar Hospitality
Corporation since August 1998. Mr. Lodge is the co-founder of American Corporate
Real Estate, Inc., a real estate investment bank which, through its affiliate,
Acre Partners, specializes in long term net leases with corporations. Mr. Lodge
is an Executive Vice President of iStar Financial, Inc, which recently merged
with Acre Partners. From August 1983 to August 1995, Mr. Lodge was a Managing
Director and Executive Vice President of W.P. Carey & Co. Mr. Lodge is a member
of the Board of Directors of TelAmerica Media, Inc., High Voltage Engineering
Corp and iStar Financial, Inc. During 1997 and 1998, Mr. Lodge was Chairman of
Superconducting Core Technologies, which filed a voluntary petition under
Chapter 11 of the U.S. Bankruptcy Code in September 1998. Mr. Lodge is also a
principal of Carmel Lodge, LLC, a New York-based investment firm.

D. Ellen Shuman. Ms. Shuman has been a director of MeriStar Hospitality
Corporation since March 8, 2001. Ms. Shuman is Vice President and Chief
Investment Officer of Carnegie Corporation of New York, a position she has held
since January 1999. Prior to January 1999, Ms. Shuman served as Director of
Investments at Yale University. Ms. Shuman is Vice Chair of the Board of
Trustees of Bowdoin College, serving on the Executive, Trustee Affairs and
Honors Committees. Ms. Shuman is also a Board member of The Investment Fund for
Foundations and an investment advisor to Edna McConnell Clark Foundation.

Bruce G. Wiles. Mr. Wiles has been a director, President and Chief
Investment Officer of MeriStar Hospitality Corporation since August 1998. Mr.
Wiles was Executive Vice President of American General Hospitality Corporation
from April 1996 until August 1998. From 1989 to August 1998, Mr. Wiles served as
Executive Vice President of American General Hospitality, Inc, where he was
responsible for acquisition and development activities.

James R. Worms. Mr. Worms has been a director of MeriStar Hospitality
Corporation since August 1998. Mr. Worms has served since August 1995 as a
Managing Director of William E. Simon & Sons L.L.C., a private investment firm
and merchant bank, and President of William E. Simon & Sons Realty, through
which the firm conducts its real estate activities. Prior to joining William E.
Simon & Sons, Mr. Worms was employed in various capacities since March 1987 by
Salomon Brothers Inc, an international investment banking firm, culminating with
Managing Director. Mr. Worms is also a director of MeriStar Hotels & Resorts.

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EXECUTIVE COMPENSATION

The following table sets forth all compensation paid by MeriStar
Hospitality Corporation during 1998, 1999 and 2000 to its chief executive
officer and its two other executive officers. We refer to these three officers
as "named executive officers."

<Table>
<Caption>
LONG-TERM COMPENSATION
ANNUAL COMPENSATION ---------------------------------------------
NAME AND PRINCIPAL ----------------------------------------- SECURITIES
OTHER POSITION OTHER ANNUAL RESTRICTED STOCK UNDERLYING ALL OTHER
COMPENSATION YEAR SALARY BONUS COMPENSATION AWARDS OPTIONS COMPENSATION
- ------------------ ---- -------- -------- ------------ ---------------- ---------- ------------

Paul W. Whetsell(2)....... 2000 $285,000 $220,100 $471,780(6) $1,089,844(4) -- --
Chief Executive 1999 285,000 250,900 3,313 $1,133,656(1)(4) 375,000 --
Officer and Chairman 1998 330,577 217,710 2,312 -- 353,743 --
of the Board
John Emery(2)(3).......... 2000 234,039 211,000 315,970(6) 697,500(4) -- --(5)
Chief Operating 1999 275,000 222,800 2,688 1,116,131(1)(4) 250,000 --
Officer and Director 1998 250,509 170,050 2,000 -- 120,936 --
Bruce G. Wiles(3)(5)...... 2000 300,000 190,300 220,500(6) 261,563(4) -- --(5)
President, Chief 1999 300,000 219,000 8,400 1,116,131(1)(4) 250,000 --
Investment Officer 1998 188,713 177,283 -- -- -- --
and Director
</Table>

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

(1) On February 4, 1999, pursuant to the MeriStar Incentive Plan, Mr. Whetsell
received 25,000 restricted shares of MeriStar Hospitality Corporation, which
vest over five years, and Messrs. Emery and Wiles received 15,000 restricted
shares of MeriStar Hospitality Corporation, which vest over five years.

(2) Mr. Whetsell and Mr. Emery were officers of CapStar Hotel Company from
January 1, 1998 until August 3, 1998, the date of the merger between CapStar
and American General Hospitality Corporation.

(3) Mr. Wiles was an officer of American General Hospitality Corporation from
January 1, 1998 until August 3, 1998, the date of the merger between CapStar
and American General.

(4) In December 1999, the compensation committee of MeriStar Hospitality
Corporation approved the restricted equity award of MeriStar Hospitality
Corporation common stock and other equity compensation to Messrs. Whetsell,
Wiles and Emery. In January 2000, the compensation committee determined that
it would satisfy the restricted equity award by issuing a combination of
restricted MeriStar Hospitality Corporation common stock, which is subject
to a three year vesting period beginning March 31, 2000 and a new class of
our OP Units, which is subject to the satisfaction of certain performance
criteria ("POPs"). The stock portion of the restricted equity award is
valued based on the closing price per share of the MeriStar Hospitality
Corporation common stock on the date of grant. Pursuant to the restricted
equity award, Mr. Whetsell received 350,000 shares of MeriStar Hospitality
Corporation common stock and other equity compensation granted as follows:
(1) 37,500 shares of MeriStar Hospitality Corporation restricted stock on
December 31, 1999, (2) 137,500 shares of MeriStar Hospitality Corporation
restricted stock on March 31, 2000 (of which 62,500 were issued on March 31,
2001 and 12,500 will be issued on March 31, 2002), and (3) 175,000 POPs on
March 29, 2000. Pursuant to the restricted equity award, Mr. Emery received
175,000 shares of MeriStar Hospitality Corporation common stock and other
equity compensation granted as follows: (1) 47,500 shares of MeriStar
Hospitality Corporation restricted stock on December 31, 1999, (2) 40,000
shares of MeriStar Hospitality Corporation restricted stock on March 31,
2000, and (3) 87,500 POPs on March 29, 2000. Pursuant to the restricted
equity award, Mr. Wiles received 125,000 shares of MeriStar Hospitality
Corporation common stock and other equity compensation granted as follows:
(1) 47,500 shares of MeriStar Hospitality Corporation restricted stock on
December 31, 1999, (2) 15,000 shares of MeriStar Hospitality Corporation
restricted stock on March 31, 2000, and (3) 62,500 POPs on March 29, 2000.

(5) In December 1999, the compensation committee approved the grant by MeriStar
Hotels & Resorts, Inc. to (1) Mr. Wiles of options to purchase 50,000 shares
of MeriStar Hotels &
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Resorts, Inc. at $3.06 per share and (2) Mr. Emery of options to purchase
100,000 shares of MeriStar Hotels & Resorts, Inc. at $3.06 per share.

(6) Represents dividends received on unvested MeriStar Hospitality Corporation
restricted stock and distributions on unvested POPs. Other annual
compensation includes miscellaneous compensation of $6,248 for Mr. Emery and
$8,400 for Mr. Wiles.

DIRECTOR COMPENSATION

Independent directors of MeriStar Hospitality Corporation are paid an
annual fee of $20,000. In addition, each independent director is paid $1,250 for
attendance at each meeting of the Board of Directors of MeriStar Hospitality
Corporation, $1,000 for attendance at each meeting of a committee of the Board
of Directors of which such director is a member and $500 for each telephonic
meeting of the Board of Directors or committee of which the director is a
member. Independent directors may elect to receive all or a portion of their
annual retainer in shares of MeriStar Hospitality Corporation common stock
rather than cash. Unless an independent director elects otherwise, fees paid in
stock will be paid at the same time as fees paid in cash.

EMPLOYMENT AGREEMENTS

MeriStar Hospitality Corporation entered into employment agreements with
Paul W. Whetsell and John Emery as of April 1, 2000 and with Bruce G. Wiles as
of August 3, 1998. With respect to Mr. Whetsell, the agreement has an initial
term of three and one-half years with automatic renewal on a year-to-year basis
thereafter unless terminated in accordance with its terms. Mr. Emery's agreement
provides for an initial term of three years with automatic renewals on a
year-to-year basis thereafter, unless terminated in accordance with its terms.
Mr. Wiles' agreement provides for an initial term of one year and automatically
extends on a day-to-day basis so that there is a rolling one-year term; however,
in no event will the term of Mr. Wiles' employment agreement extend beyond
December 31, 2003 or until terminated in accordance with its terms. Some
material terms of these agreements are as follows:

Base Salary

Mr. Whetsell receives a base salary of $285,000 per year. Mr. Whetsell will
also receive a base salary of $190,000 per year as an employee of MeriStar
Hotels & Resorts, Inc. Mr. Emery receives a base salary of $230,000 per year.
Mr. Emery will also receive a base salary of $120,000 per year as an employee of
MeriStar Hotels & Resorts, Inc. Mr. Wiles receives a base salary of $300,000 per
year. Each base salary will be subject to review annually.

Annual Incentive Bonus

Each executive is eligible to receive an annual incentive bonus at the
following targeted amounts of base salary:

<Table>
<Caption>
MAXIMUM
THRESHOLD BONUS
TARGET TARGET AMOUNT
--------- ------ -------

Paul W. Whetsell......................................... 25.0% 125.0% 150.0%
John Emery............................................... 25.0% 112.5% 137.5%
Bruce G. Wiles........................................... 25.0% 100.0% 125.0%
</Table>

The amount of the annual bonus is based on the achievement of predefined
operating or performance goals and other criteria to be established by the
compensation committee of the Board of Directors of MeriStar Hospitality
Corporation.

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Long-Term Incentives

Each executive is eligible to participate in the MeriStar incentive plan.
Awards are made at the discretion of the compensation committee.

Certain Severance Benefits

If at any time during the term of their respective employment agreements or
any automatic renewal period, the employment of Messrs. Whetsell, Wiles or Emery
is terminated, he shall be entitled to receive the benefits described below.

If Mr. Whetsell is terminated without cause or voluntarily terminates with
"good reason," he is entitled to a lump-sum payment determined in accordance
with an equation contained in Mr. Whetsell's employment agreement. In addition,
all of his unvested options and restricted stock will immediately vest and
become exercisable for a period of one year after that and shares of restricted
stock previously granted to him will become free from all contractual
restrictions, effective as of the termination date. In addition, MeriStar
Hospitality Corporation will continue in effect some benefits under the
employment agreement, including, but not limited to, life and health insurance
plans, or their equivalent for a period equal to the greater of two and one-half
years or the remaining term of the employment agreement, without further
extension.

If Mr. Emery is terminated without cause or voluntarily terminates with
"good reason," he is entitled to a lump-sum payment determined in accordance
with an equation contained in Mr. Emery's employment agreement. In addition, all
of his unvested options and restricted stock will immediately vest and become
exercisable for a period of one year after that and shares of restricted stock
previously granted to him will become free from all contractual restrictions,
effective as of the termination date. In addition, MeriStar Hospitality
Corporation will continue in effect some benefits under the employment
agreement, including, but not limited to, life and health insurance plans, or
their equivalent for a period equal to the greater of two years or the remaining
term of the employment agreement, without further extension.

If Mr. Wiles is terminated without cause or voluntarily terminates with
"good reason" he will be entitled to receive:

(1) a lump-sum payment equal to one time his annual base salary,

(2) the amount of his bonus for the preceding year,

(3) immediate vesting and exercisability of all unvested stock options
and restricted stock awards and

(4) the continuance of some benefits under his employment agreement,
but only until the earlier of one year from the end of the term of his
employment agreement or the date on which he obtains health insurance
coverage from a subsequent employer.

Upon termination due to death or disability, each of Messrs. Whetsell,
Emery and Wiles or his estate will receive a lump-sum payment equal to his base
salary, plus the pro rata portion of his bonus for the fiscal year in question,
in addition to payment for one year of any other compensation due the executive
pursuant to his employment contract. Any unvested portion of his stock options
and restricted stock will vest immediately and become exercisable for a period
of one year after that, and the shares of restricted stock previously granted to
him will become free from all contractual restrictions.

In the event that any accelerated vesting of the rights of Messrs.
Whetsell, Emery or Wiles with respect to stock options, restricted stock or any
other payment, benefit or compensation results in the imposition of an excise
tax payable by him under section 4999 of the Internal Revenue Code, or any
successor or other provision with respect to "excess parachute payments" within
the meaning of section 280G(b) of the Internal Revenue Code, MeriStar
Hospitality Corporation will make a cash payment to him in the amount of the
excise tax and shall also make a cash payment to him in an amount

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equal to the total of federal, state and local income and excise taxes for which
he may be liable on account of the excise tax payment.

In the case of Messrs. Whetsell or Emery, in the event of termination of
his employment, he will not be required to seek alternative employment and, in
the event he does secure other employment, no compensation or other benefits
received in respect of his employment shall be set-off or in any other way limit
or reduce the obligations of MeriStar Hospitality Corporation under the
employment agreements.

The FelCor merger is a change in control of MeriStar Hospitality
Corporation under Mr. Wiles' employment agreement. If Mr. Wiles does not accept
employment with FelCor prior to closing of the merger, FelCor expects to pay him
a total of approximately $980,600 in severance and approximately $550,000 in tax
reimbursement payments after the FelCor merger.

COMPENSATION PLANS

We do not have any compensation plans. The following is a summary of the
compensation plans of MeriStar Hospitality Corporation.

MeriStar Hospitality Corporation Incentive Plan

The MeriStar Hospitality Corporation Incentive Plan is administered by
MeriStar Hospitality Corporation's compensation committee. The compensation
committee may delegate its authority to administer the incentive plan. The
compensation committee may not, however, delegate its authority with respect to
grants and awards to individuals subject to Section 16 of the Exchange Act. As
used in this summary, the term "administrator" means the compensation committee
or its delegate, as appropriate.

Each employee of MeriStar Hospitality Corporation or of an affiliate of
MeriStar Hospitality Corporation or any other person whose efforts contribute to
MeriStar Hospitality Corporation's performance is eligible to participate in the
incentive plan. The administrator may from time to time grant stock options,
stock awards, incentive awards or performance shares to the participants. As of
April 5, 2001, the class of participants consisted of approximately 131 persons.

The option price of options granted under the incentive plan may be paid in
cash, with shares of MeriStar Hospitality Corporation common stock, or with a
combination of cash and common stock. The option price will be fixed by the
administrator at the time the option is granted, but the price cannot be less
than 100% for existing employees, 85% in connection with the hiring of new
employees, of the shares' fair market value on the date of grant; provided,
however, no more than 10% of the shares under the incentive plan may be granted
at less than 100% of fair market value. The exercise price of a stock option
granted under the incentive plan may not be less than 100% of the shares' fair
market value on the date of grant, 110% of the fair market value in the case of
a stock option granted under the incentive plan granted to a 10% stockholder of
MeriStar Hospitality Corporation. Options may be exercised at such times and
subject to such conditions as may be prescribed by the administrator but the
maximum term of an option is ten years in the case of a stock option granted
under the incentive plan or five years in the case of a stock option granted
under the incentive plan granted to a 10% stockholder.

Awards granted under the incentive plan are generally nontransferable.
MeriStar Hospitality Corporation may, however, grant awards, outside of the
incentive plan, which are transferable to permitted family members.

At any given time, the maximum number of shares of MeriStar Hospitality
Corporation common stock that may be issued pursuant to awards granted under the
incentive plan will be the total of:

(1) 12.5% of the number of shares of MeriStar Hospitality Corporation
common stock that were outstanding as of the end of the immediately
preceding calendar year rounded downward if necessary to eliminate
fractional shares, minus

(2) the number of shares subject to awards that were granted under the
incentive plan through the last day of the immediately preceding calendar
year, plus
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(3) as of the last day of the immediately preceding calendar year, the
number of shares with respect to which previously granted awards have
expired.

All awards made under the incentive plan will be evidenced by written
agreements between MeriStar Hospitality Corporation and the participant. The
share limitation and the terms of outstanding awards will be adjusted, as the
compensation committee deems appropriate, in the event of a stock dividend,
stock split, combination, reclassification, recapitalization or other similar
event.

MeriStar Hospitality Corporation Directors Plan

The MeriStar Hospitality Corporation Directors Plan provides for awards of
MeriStar Hospitality Corporation common stock to be granted to independent
directors. A maximum of 500,000 shares of MeriStar Hospitality Corporation
common stock may be issued under the directors plan. The share limitation and
terms of outstanding awards will be adjusted, as the MeriStar Hospitality
Corporation compensation committee deems appropriate, in the event of a stock
dividend, stock split, combination, reclassification, recapitalization or other
similar event.

Under the directors plan, each independent director is awarded an option to
purchase 7,500 shares of MeriStar Hospitality Corporation common stock upon
initial commencement of service as a director, whether by appointment or
election. Thereafter, each independent director is granted a stock option to
purchase 5,000 shares of MeriStar Hospitality Corporation common stock on the
first business day following each annual meeting of stockholders of MeriStar
Hospitality Corporation. The exercise price of option grants will be 100% of the
fair market value of the MeriStar Hospitality Corporation common stock on the
date of grant, and options will vest in three annual installments commencing one
year after the date of grant. The exercise price may be paid in cash, cash
equivalents acceptable to the compensation committee, MeriStar Hospitality
Corporation common stock or a combination thereof. Options granted under the
directors plan, once vested, are exercisable for ten years from the date of
grant. Upon termination of service as a director, options that have not vested
are forfeited and vested options may be exercised until they expire. All options
accelerate upon a change in control of MeriStar Hospitality Corporation.

MeriStar Hospitality Corporation Profits-Only Operating Partnership Units Plan

As of March 29, 2000, the Board of Directors of MeriStar Hospitality
Corporation approved the MeriStar Hospitality Corporation Profits-Only Operating
Partnership Units Plan, which we refer to as the "POPs plan." The purpose of the
POPs plan is to attract and retain officers, directors, employees and
consultants of MeriStar Hospitality Corporation and its participating affiliates
and to enable these individuals to acquire an equity interest in and participate
in MeriStar Hospitality Corporation's long-term growth and financial success.

Under the POPs plan, officers, directors, employees and consultants of
MeriStar Hospitality Corporation are eligible to receive restricted Profits-Only
Units in us, which we refer to as "POPs." A holder of POPs normally will be
entitled to receive special allocations of gain on specified dispositions of
operating partnership property, including gain on revaluations of partnership
property, until such time as the capital account attributable to each unit is
equivalent to the value of a unit at the time the POPs were issued. After that,
the holder will receive allocations of common gain and loss on specified
dispositions and upon partnership revaluations based on the holder's percentage
interest in us attributable to the units. A holder of POPs will be entitled to
regular distributions, in the discretion of MeriStar Hospitality Corporation and
subject to the distribution priorities for other classes of partnership
interests, equal to the holder's percentage interest of the proceeds from the
sale of partnership property with respect to which allocations are made to the
holder. POPs are subject to the transfer restrictions contained in the operating
partnership agreement as well as to those additional transfer restrictions
described below that are imposed by the POPs plan and the agreement under which
the POPs are granted. Holders of POPs will be entitled to exchange the POPs held
by them for cash or, at the option of MeriStar Hospitality Corporation, for
shares of common stock of MeriStar Hospitality Corporation, based upon an
exchange formula and the

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satisfaction of other conditions contained in an exchange rights agreement
entered into by the holders and MeriStar Hospitality Corporation.

The POPs plan is administered by the MeriStar Hospitality Corporation
compensation committee. The compensation committee may delegate to one or more
officers or managers of MeriStar Hospitality Corporation or an affiliate of
MeriStar Hospitality Corporation, or to a committee of such officers or
managers, its authority to administer the POPs plan.

Each officer, director, employee or consultant of MeriStar Hospitality
Corporation or a participating affiliate of MeriStar Hospitality Corporation is
eligible to participate in the POPs plan. The administrator may from time to
time grant restricted units to participants. As of June 30, 2001, the class of
participants consisted of approximately 30 persons.

A participant's rights in a POPs award will be nontransferable or
forfeitable or both unless certain conditions prescribed by the administrator
are satisfied. These conditions may include, for example, a requirement that the
participant continue employment with MeriStar Hospitality Corporation for a
specified period or that MeriStar Hospitality Corporation or the participant
achieve stated, performance-related objectives. Generally, if any conditions
remain unfilled with respect to any units awarded to a participant at the time
that participant's employment with MeriStar Hospitality Corporation and its
participating affiliates is terminated, those units will be forfeited. The
compensation committee may, however, provide for complete or partial exceptions
to this forfeiture provision.

Awards granted under the POPs plan are generally nontransferable. The
administrator may, however, permit transfers to a participant's immediate family
and certain other permitted transferees.

At any given time, the maximum number of POPs that may be granted under the
POPs plan is 1,000,000. This limitation and the terms of outstanding awards will
be adjusted, as the administrator deems appropriate, in the event of a dividend
or other distribution by our company or recapitalization, merger, consolidation,
issuance or exchange of POPs or other ownership interests of our company or
other similar event.

OPTIONS GRANTED IN 2000

None of the named executive officers were granted any options by MeriStar
Hospitality Corporation during 2000.

AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES

The following table sets forth some information concerning the exercise of
options to purchase MeriStar Hospitality Corporation common stock during 2000 by
the named executive officers and the value of unexercised in-the-money options
to purchase shares of MeriStar Hospitality Corporation common stock granted to
the named executive officers outstanding as of December 31, 2000.

<Table>
<Caption>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-THE-
SHARES OPTIONS AT FISCAL YEAR-END MONEY OPTIONS AT FISCAL
ACQUIRED VALUE 2000 (#) YEAR-END 2000 ($)(1)
NAME ON EXERCISE REALIZED ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- ----------- ------------ -------------------------- ----------------------------

Paul W. Whetsell...... 0 0 610,830/367,913 849,585/484,165
John Emery............ 0 0 268,022/206,978 262,546/370,663
Bruce G. Wiles........ 0 0 348,429/166,666 185,337/370,664
</Table>

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

(1) On December 29, 2000, the last trading day during fiscal 2000, the closing
price of MeriStar Hospitality Corporation common stock on the New York Stock
Exchange was $19.69 per share.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Mr. Whetsell is an executive officer, director and stockholder of MeriStar
Hotels & Resorts, the manager of a majority of our hotels. Mr. Jorns is a
director and stockholder of MeriStar Hotels & Resorts. Mr. Wiles is an owner of
limited partnership interests in the operating partnership of MeriStar Hotels &
Resorts.

PRINCIPAL SECURITYHOLDERS

SECURITY OWNERSHIP BY PRINCIPAL UNITHOLDERS

The following table sets forth information regarding the beneficial
ownership of the common units of our company as of July 31, 2001 by all persons
known by us to own beneficially more than 5% of the common units of our company.

<Table>
<Caption>
NUMBER OF UNITS
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED PERCENTAGE
------------------------ ------------------ ----------

MeriStar Hospitality Corporation(1)............... 44,474,024 91.3%
1010 Wisconsin Avenue, N.W.
Washington, D.C. 20007
</Table>

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

(1) Includes 495,088 units owned by MeriStar Hospitality Corporation as general
partners of our company and 43,978,936 units owned by MeriStar LP, Inc., a
wholly owned subsidiary of MeriStar Hospitality Corporation, as limited
partners of our company.

None of the directors or executive officers of MeriStar Hospitality
Corporation owns any of our common units.

SECURITY OWNERSHIP OF MERISTAR HOSPITALITY CORPORATION

Because MeriStar Hospitality Corporation has full control over our business
and affairs, we have presented the beneficial ownership of MeriStar Hospitality
Corporation common stock, the only outstanding equity security of MeriStar
Hospitality Corporation.

The following table sets forth some information regarding the beneficial
ownership of MeriStar Hospitality Corporation common stock as of July 31, 2001
by:

- all persons known by us to own beneficially more than 5% of MeriStar
Hospitality Corporation common stock,

- each MeriStar Hospitality Corporation director and named executive
officer, and

- all MeriStar Hospitality Corporation directors and executive officers as
a group.

<Table>
<Caption>
SHARES BENEFICIALLY OWNED
--------------------------
NAME & ADDRESS OF BENEFICIAL OWNER NUMBER PERCENTAGE
- ---------------------------------- ----------- ------------

Franklin Resources, Inc.(1)................................. 6,729,304 15.1%
Wellington Management Company, LLP(2)....................... 3,544,000 7.9%
Cohen & Steers Capital Management, Inc.(3).................. 2,936,700 6.6%
James F. Dannhauser(4)...................................... 10,001 *
Daniel L. Doctoroff(5)...................................... 332,496 *
John Emery(6)............................................... 465,730 1.0%
William S. Janes(7)......................................... 34,146 *
</Table>

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<Table>
<Caption>
SHARES BENEFICIALLY OWNED
--------------------------
NAME & ADDRESS OF BENEFICIAL OWNER NUMBER PERCENTAGE
- ---------------------------------- ----------- ------------

Steven D. Jorns(8).......................................... 844,999 1.9%
H. Cabot Lodge III(9)....................................... 18,476 *
D. Ellen Shuman............................................. -- --
Paul W. Whetsell(10)........................................ 1,314,949 2.9%
James R. Worms(9)........................................... 36,203 *
Bruce G. Wiles(11).......................................... 563,894 1.3%
Executive officers and directors as a group (10 persons).... 3,624,228 7.7%
</Table>

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

* Represents less than 1% of the class.

(1) Beneficial ownership information is based on the Schedule 13G/A jointly
filed by Franklin Resources, Inc., Charles B. Johnson, Rupert H. Johnson,
Jr. and Franklin Advisers, Inc., all located at 777 Mariners Island
Boulevard, San Mateo, California 94404, dated February 9, 2001.

(2) Beneficial ownership information is based on the Schedule 13G/A filed by
Wellington Management Company, LLP, located at 75 State Street, Boston,
Massachusetts 02109, dated February 14, 2001.

(3) Beneficial ownership information is based on the Schedule 13G/A filed by
Cohen & Steers Capital Management, Inc., located at 757 Third Avenue, New
York, New York 10017, dated February 13, 2001.

(4) Includes 10,001 shares of MeriStar Hospitality Corporation common stock
purchasable under vested options.

(5) Includes 53,068 shares held by Cherwell Investors, Inc., 75,260 shares held
by Penobscot Partners, L.P., 100,000 shares held by PTJ Merchant Banking
Partners, L.P. and 12,132 shares held by Oak Hill Partners, Inc., as to
which shares Mr. Doctoroff disclaims beneficial ownership except to the
extent of his pecuniary interest in them. Mr. Doctoroff is Managing
Director of Oak Hill Partners, Inc., the principal business of which is
serving as an investment consultant to Acadia Partners, L.P., which is the
sole shareholder of Cherwell. Mr. Doctoroff is also the Executive Vice
President of PTJ, Inc., which is the managing general partner of PTJ
Merchant. PTJ Merchant is the sole general partner of Penobscot. Mr.
Doctoroff's beneficial holdings also include 25,001 shares of MeriStar
Hospitality Corporation common stock purchasable under vested options.

(6) Includes 318,022 shares of MeriStar Hospitality Corporation common stock
purchasable under vested options and 80,667 shares of restricted MeriStar
Hospitality Corporation common stock granted under stock awards.

(7) Includes 25,001 shares of MeriStar Hospitality Corporation common stock
purchasable under vested options.

(8) Includes 608,743 shares of MeriStar Hospitality Corporation common stock
purchasable under vested options and 30,000 shares of restricted MeriStar
Hospitality Corporation common stock granted under stock awards.

(9) Includes 18,476 shares of MeriStar Hospitality Corporation common stock
that have vested under options granted.

(10) Includes 168,500 shares of restricted MeriStar Hospitality Corporation
common stock granted under stock awards, 694,164 shares of MeriStar
Hospitality Corporation common stock purchasable under vested options and
shares of MeriStar Hospitality Corporation common stock held by entities
through which Mr. Whetsell has beneficial ownership within the meaning of
Rule 13d-3.

(11) Includes 55,667 shares of restricted MeriStar Hospitality Corporation
common stock granted under stock awards, 398,429 shares of MeriStar
Hospitality Corporation common stock purchasable under vested options and
5,758 of our common units, which are exchangeable for MeriStar Hospitality
Corporation common stock.

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THE EXCHANGE OFFER

PURPOSE OF THE EXCHANGE OFFER

Our registration rights agreements require us to file not later than June
25, 2001, which is 150 days following the date of original issuance of the
initial notes, the registration statement of which this prospectus is a part for
a registered exchange offer with respect to an issue of new notes in exchange
for the initial notes. These exchange notes will be substantially identical in
all material respects to the initial notes except that the exchange notes will
be registered under the Securities Act, will not bear legends restricting their
transfer and will not be entitled to registration rights under our registration
rights agreements. This summary of the terms of the registration rights
agreements does not contain all the information that you should consider and we
refer you to the provisions of the registration rights agreements, which have
been filed as an exhibit to the registration statement of which this prospectus
is a part and copies of which are available as indicated under the heading
"Available Information."

We are required to:

- use our best efforts to cause the registration statement to be declared
effective no later than August 24, 2001, which is 210 days after the date
of issuance of the outstanding notes;

- keep the exchange offer effective for not less than 20 business days, or
longer if required by applicable law, after the date that notice of the
exchange offer is mailed to holders of the outstanding notes; and

- use our best efforts to consummate the exchange offer no later than 30
business days after the date the registration statement is declared
effective unless the exchange offer would not be permitted by applicable
law or Securities and Exchange Commission policy.

The exchange offer being made here, if commenced and completed within the
time periods described above, will satisfy those requirements under the
registration rights agreement.

This prospectus, together with the letter of transmittal, is being sent to
all record holders of notes as of outstanding notes as of , 2001.

Based on interpretations by the staff of the Securities and Exchange
Commission in no-action letters issued to third parties, we believe that the
exchange notes issued under the exchange offer may be offered for resale, resold
or otherwise transferred by each holder of exchange notes other than, (a) a
broker-dealer who acquires the initial notes directly from the issuers for
resale under Rule 144A under the Securities Act or any other available exemption
under the Securities Act or (b) any holder that directly or indirectly through
one or more intermediaries, controls or is controlled by, or is under common
control with the issuers, without compliance with the registration and
prospectus delivery provisions of the Securities Act, so long as this holder:

- is acquiring the exchange notes in the ordinary course of its business;
and

- is not participating in, and does not intend to participate in, a
distribution of the exchange notes within the meaning of the Securities
Act and has no arrangement or understanding with any person to
participate in a distribution of the exchange notes within the meaning of
the Securities Act.

By tendering the initial notes in exchange for exchange notes, each holder,
other than a broker-dealer, will be required to make representations regarding
the above matters. If a holder of initial notes is participating in or intends
to participate in, a distribution of the exchange notes, or has any arrangement
or understanding with any person to participate in a distribution of the
exchange notes to be acquired in this exchange offer, that holder may be deemed
to have received restricted securities and may not rely on the applicable
interpretations of the staff of the Securities and Exchange Commission. Any
holder so deemed will have to comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any secondary
resale transaction.

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Each broker-dealer that receives exchange notes for its own account in
exchange for initial notes may be deemed to be an underwriter within the meaning
of the Securities Act and must acknowledge that it will deliver a prospectus
meeting the requirements of the Securities Act in connection with any resale of
those exchange notes. The letter of transmittal states that by so acknowledging
and by delivering a prospectus, a broker-dealer will not be deemed to admit that
it is an underwriter within the meaning of the Securities Act. This prospectus,
as it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with offers to resell, resales and other transfers
of exchange notes received in exchange for initial notes which were acquired by
that broker-dealer as a result of market making or other trading activities. We
have agreed that we will make this prospectus available to any broker-dealer for
a period of time not to exceed 180 days after the completion of the exchange
offer for use in connection with any offer to resell, resale or other transfer.
Please refer to the section in this prospectus entitled "Plan of Distribution."

Each broker-dealer who acquired initial notes directly from the issuers for
resale under Rule 144A under the Securities Act or any other available exemption
under the Securities Act, and not through market-making or other trading
activities:

- may not rely on the applicable interpretations of the staff of the
Securities and Exchange Commission; and

- will have to comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any secondary
resale transaction.

SHELF REGISTRATION STATEMENT

In the event that:

(a) we are not required to file a registration statement as part of the
exchange offer or to complete the exchange offer because it is not permitted by
law or the policies of the Securities and Exchange Commission, in either case
after having sought relief from the Commission; or

(b) selected institutional holders of initial notes notify us at least 20
days before the completion of the exchange offer that (1) the holder is
prohibited by law or policy of the Securities and Exchange Commission from
participating in the exchange offer, or (2) the holder may not resell the
exchange notes acquired by it in the exchange offer to the public without
delivering a prospectus and this prospectus contained in the registration
statement is not appropriate or available for that resale, or (3) the holder is
a broker-dealer and holds notes acquired directly from an issuer, a guarantor or
any of their affiliates (within the meaning of the Securities Act),

then we will instead of, or in the case of clause (b) of this sentence, in
addition to registering the exchange notes:

- use our best efforts, before the earlier of (A) 60 days after we
determine that we are not required to file a registration statement
relating to the exchange offer or (B) 60 days after we receive notice
from a holder as described in clause (b) above, to file with the
Securities and Exchange Commission a shelf registration statement
covering resales of the initial notes;

- use our best efforts to cause the shelf registration statement to be
declared effective under the Securities Act within 120 days after the
date we are required to file a shelf registration statement; and

- use our best efforts to keep the shelf registration statement
continuously effective, supplemented and amended as required by the
Securities Act, in order to permit the prospectus which is a part of the
shelf registration statement to be usable by holders until January 26,
2003.

We will, in the event that a shelf registration statement is filed, provide
to each holder of the outstanding notes being registered copies of the
prospectus that is a part of the shelf registration statement. We will also
notify each holder when the shelf registration statement has become effective
and take those
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112

other actions that are required to permit unrestricted resales of the
outstanding notes being registered. A holder that sells outstanding notes under
the shelf registration statement will be required to be named as a selling
security holder in the related prospectus and to deliver a prospectus to
purchasers, will be subject to certain of the civil liability provisions under
the Securities Act in connection with those sales and will be bound by the
provisions of the registration rights agreements that are applicable to that
holder, including certain indemnification rights and obligations.

LIQUIDATED DAMAGES

In the event that:

(a) we do not file the registration statement or the shelf registration
statement, as the case may be, with the Securities and Exchange Commission on or
before the dates specified above for those filings,

(b) the registration statement or the shelf registration statement, as the
case may be, is not declared effective on or before the dates specified above
for that effectiveness,

(c) the exchange offer is not completed within 30 business days of the date
specified above for the effectiveness of the applicable registration statement,
or

(d) the registration statement or the shelf registration statement, as the
case may be, is filed and declared effective but after the filing and
declaration ceases to be effective or usable in connection with its intended
purpose, each event referred to in clauses (a) through (d), being called a
registration default,

then we will be obligated to pay to each holder of transfer restricted
securities liquidated damages. The outstanding notes remain restricted until:

(a) the date on which the outstanding notes have been exchanged by a person
other than a broker-dealer for exchange notes in a registered exchange offer;

(b) following the exchange by a broker-dealer in a registered exchange
offer of outstanding notes for exchange notes, the date on which the exchange
notes are sold to a purchaser who receives from the broker-dealer on or before
the date of the sale a copy of a prospectus contained in an exchange offer
registration statement;

(c) the date on which the outstanding notes have been effectively
registered under the Securities Act and disposed of in accordance with a shelf
registration statement; or

(d) the date on which the outstanding notes are eligible to be distributed
to the public under Rule 144 under the Securities Act.

The registration statement was not declared effective on or before the date
specified for effectiveness.

Liquidated damages will accrue and be payable semi-annually on the
outstanding notes and the exchange notes, in addition to the stated interest on
the outstanding notes and the exchange notes, in an amount equal to $0.05 per
week per $1,000 principal amount of outstanding notes during the first 90-day
period, which will increase by $0.05 per week per $1,000 principal amount of
outstanding notes for each subsequent 90-day period. In no event will the rate
exceed $0.50 per week per $1,000 principal amount of outstanding notes,
regardless of the number of registration defaults. Liquidated damages will
accrue from the date a registration default occurs until the date on which:

- the registration statement is filed;

- the registration statement or shelf registration statement is declared
effective and the exchange offer is completed;

- the shelf registration statement is declared effective; or

- the shelf registration statement again becomes effective or made usable,
as the case may be.

Following the cure of all registration defaults, the accrual of liquidated
damages will cease.

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Upon completion of the exchange offer, holders of outstanding notes who do
not exchange their outstanding notes for exchange notes in the exchange offer
will generally no longer be entitled to registration rights and will not be able
to offer or sell their outstanding notes, unless those outstanding notes are
subsequently registered under the Securities Act, which, with limited exception,
the issuers will have no obligation to do, or under an exemption from, or in a
transaction not subject to, the Securities Act and applicable state securities
laws. Please refer to the section in this prospectus entitled "-- Your failure
to participate in the exchange offer will have adverse consequences."

TERMS OF THE EXCHANGE OFFER

The Expiration Date; Extensions; Amendments; Termination

This exchange offer will expire at 5:00 p.m., New York City time, on
, 2001, unless the issuers extend it in their reasonable discretion.
The expiration date of this exchange offer will be at least 20 business days
after the commencement of the exchange offer in accordance with Rule 14e-1(a)
under the Securities Exchange Act of 1934 and the registration rights
agreements.

The issuers expressly reserve the right to delay acceptance of any initial
notes, extend or terminate this exchange offer and not accept any initial notes
that they have not previously accepted if any of the conditions described below
under "-- Conditions to the Exchange Offer" have not been satisfied or waived by
them. The issuers will notify the exchange agent of any extension by oral notice
promptly confirmed in writing or by written notice. The issuers will also notify
the holders of the initial notes by mailing an announcement or by a press
release or other public announcement communicated before 9:00 a.m., New York
City time, on the next business day after the previously scheduled expiration
date unless applicable laws require them to do otherwise.

The issuers also expressly reserve the right to amend the terms of this
exchange offer in any manner. If the issuers make any material change, they will
promptly disclose this change in a manner reasonably calculated to inform the
holders of our initial notes of the change including providing public
announcement or giving oral or written notice to these holders. A material
change in the terms of this exchange offer could include a change in the timing
of the exchange offer, a change in the exchange agent and other similar changes
in the terms of this exchange offer. If the issuers make any material change to
this exchange offer, they will disclose this change by means of a post-effective
amendment to the registration statement which includes this prospectus and will
distribute an amended or supplemented prospectus to each registered holder of
initial notes. In addition, the issuers will extend this exchange offer for an
additional five to ten business days as required by the Exchange Act, depending
on the significance of the amendment, if the exchange offer would otherwise
expire during that period. The issuers will promptly notify the exchange agent
by oral notice, promptly confirmed in writing, or written notice of any delay in
acceptance, extension, termination or amendment of this exchange offer.

Procedures for Tendering Initial Notes

Proper Execution and Delivery of Letters of Transmittal

To tender your initial notes in this exchange offer, you must use one of
the three alternative procedures described below:

- Regular delivery procedure: Complete, sign and date the letter of
transmittal, or a facsimile of the letter of transmittal. Have the
signatures on the letter of transmittal guaranteed if required by the
letter of transmittal. Mail or otherwise deliver the letter of
transmittal or the facsimile together with the certificates representing
the initial notes being tendered and any other required documents to the
exchange agent on or before 5:00 p.m., New York City time, on the
expiration date.

- Book-entry delivery procedure: Send a timely confirmation of a
book-entry transfer of your initial notes, if this procedure is
available, into the exchange agent's account at The Depository Trust
Company in accordance with the procedures for book-entry transfer
described under "-- Book-Entry Delivery Procedure" below, on or before
5:00 p.m., New York City time, on the expiration date.

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- Guaranteed delivery procedure: If time will not permit you to complete
your tender by using the procedures described above before the expiration
date, comply with the guaranteed delivery procedures described under
"-- Guaranteed Delivery Procedure" below.

The method of delivery of the initial notes, the letter of transmittal and
all other required documents is at your election and risk. Instead of delivery
by mail, we recommend that you use an overnight or hand-delivery service. If you
choose the mail, we recommend that you use registered mail, properly insured,
with return receipt requested. IN ALL CASES, YOU SHOULD ALLOW SUFFICIENT TIME TO
ASSURE TIMELY DELIVERY. You should not send any letters of transmittal or
initial notes to us. You must deliver all documents to the exchange agent at its
address provided below. You may also request your broker, dealer, commercial
bank, trust company or nominee to tender your initial notes on your behalf.

Only a holder of initial notes may tender initial notes in this exchange
offer. A holder is any person in whose name initial notes are registered on our
books or any other person who has obtained a properly completed bond power from
the registered holder.

If you are the beneficial owner of initial notes that are registered in the
name of a broker, dealer, commercial bank, trust company or other nominee and
you wish to tender your notes, you must contact that registered holder promptly
and instruct that registered holder to tender your notes on your behalf. If you
wish to tender your initial notes on your own behalf, you must, before
completing and executing the letter of transmittal and delivering your initial
notes, either make appropriate arrangements to register the ownership of these
notes in your name or obtain a properly completed bond power from the registered
holder. The transfer of registered ownership may take considerable time.

You must have any signatures on a letter of transmittal or a notice of
withdrawal guaranteed by any of the following, each of which is referred to as
an eligible institution:

- a member firm of a registered national securities exchange or of the
National Association of Securities Dealers, Inc.,

- a commercial bank or trust company having an office or correspondent in
the United States, or

- an eligible guarantor institution within the meaning of Rule 17Ad-15
under the Exchange Act,

unless the initial notes are tendered:

- by a registered holder, or by a participant in The Depository Trust
Company in the case of book-entry transfers, whose name appears on a
security position listing as the owner, who has not completed the box
entitled "Special Issuance Instructions" or "Special Delivery
Instructions" on the letter of transmittal and only if the exchange notes
are being issued directly to this registered holder or deposited into
this participant's account at The Depository Trust Company, or

- for the account of an eligible institution.

If the letter of transmittal or any bond powers are signed by:

(1) The recordholder(s) of the initial notes tendered: The signature
must correspond with the name(s) written on the face of the initial notes
without alteration, enlargement or any change whatsoever.

(2) A participant in The Depository Trust Company: The signature must
correspond with the name as it appears on the security position listing as
the holder of the initial notes.

(3) A person other than the registered holder of any initial
notes: These initial notes must be endorsed or accompanied by bond powers
and a proxy that authorize this person to tender the initial notes on
behalf of the registered holder, in satisfactory form to the issuers as
determined in our sole discretion, in each case, as the name of the
registered holder or holders appears on the initial notes.

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115

(4) Trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity: These persons should so indicate when signing. Unless waived by
us, evidence satisfactory to the issuers of their authority to so act must
also be submitted with the letter of transmittal.

Book-Entry Delivery Procedure

Any financial institution that is a participant in The Depository Trust
Company's systems may make book-entry deliveries of initial notes by causing The
Depository Trust Company to transfer these initial notes into the exchange
agent's account at The Depository Trust Company in accordance with The
Depository Trust Company's procedures for transfer. To effectively tender notes
through The Depository Trust Company, the financial institution that is a
participant in The Depository Trust Company will electronically transmit its
acceptance through the Automatic Tender Offer Program. The Depository Trust
Company will then edit and verify the acceptance and send an agent's message to
the exchange agent for its acceptance. An agent's message is a message
transmitted by The Depository Trust Company to the exchange agent stating that
The Depository Trust Company has received an express acknowledgment from the
participant in The Depository Trust Company tendering the notes that this
participation has received and agrees to be bound by the terms of the letter of
transmittal, and that we may enforce this agreement against this participant.
The exchange agent will make a request to establish an account for the initial
notes at The Depository Trust Company for purposes of the exchange offer within
two business days after the date of this prospectus.

A delivery of initial notes through a book-entry transfer into the exchange
agent's account at The Depository Trust Company will only be effective if an
agent's message or the letter of transmittal or a facsimile of the letter of
transmittal with any required signature guarantees and any other required
documents is transmitted to and received by the exchange agent at the address
indicated below under "-- Exchange Agent" on or before the expiration date
unless the guaranteed delivery procedures described below are complied with.
DELIVERY OF DOCUMENTS TO THE DEPOSITORY TRUST COMPANY DOES NOT CONSTITUTE
DELIVERY TO THE EXCHANGE AGENT.

Guaranteed Delivery Procedure

If you are a registered holder of initial notes and desire to tender your
notes, and (a) these notes are not immediately available, (b) time will not
permit your notes or other required documents to reach the exchange agent before
the expiration date or (c) the procedures for book-entry transfer cannot be
completed on a timely basis and an agent's message delivered, you may still
tender in this exchange offer if:

- you tender through an eligible institution,

- on or before the expiration date, the exchange agent receives a properly
completed and duly executed letter of transmittal or facsimile of the
letter of transmittal, and a notice of guaranteed delivery, substantially
in the form provided by the issuers, with your name and address as holder
of the initial notes and the amount of notes tendered, stating that the
tender is being made by that letter and notice and guaranteeing that
within three New York Stock Exchange Trading days after the expiration
date the certificates for all the initial notes tendered, in proper form
for transfer, or a book-entry confirmation with an agent's message, as
the case may be, and any other documents required by the letter of
transmittal will be deposited by the eligible institution with the
exchange agent, and

- the certificates for all your tendered initial notes in proper form for
transfer or a book-entry confirmation as the case may be, and all other
documents required by the letter of transmittal are received by the
exchange agent within five business days after the expiration date.

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ACCEPTANCE OF INITIAL NOTES FOR EXCHANGE; DELIVERY OF EXCHANGE NOTES

Your tender of initial notes will constitute an agreement between you and
the issuers governed by the terms and conditions provided in this prospectus and
in the related letter of transmittal.

The issuers will be deemed to have received your tender as of the date when
your duly signed letter of transmittal accompanied by your initial notes
tendered, or a timely confirmation of a book-entry transfer of these notes into
the exchange agent's account at The Depository Trust Company with an agent's
message, or a notice of guaranteed delivery from an eligible institution is
received by the exchange agent.

All questions as to the validity, form, eligibility, including time of
receipt, acceptance and withdrawal of tenders will be determined by the issuers
in their sole discretion. The issuers' determination will be final and binding.

The issuers reserve the absolute right to reject any and all initial notes
not properly tendered or any initial notes which, if accepted, would, in their
opinion or their counsel's opinion, be unlawful. The issuers also reserve the
absolute right to waive any conditions of this exchange offer or irregularities
or defects in tender as to particular notes. The issuers' interpretation of the
terms and conditions of this exchange offer, including the instructions in the
letter of transmittal, will be final and binding on all parties. Unless waived,
any defects or irregularities in connection with tenders of initial notes must
be cured within such time as the issuers shall determine. Neither the issuers,
the exchange agent nor any other person will be under any duty to give
notification of defects or irregularities with respect to tenders of initial
notes. Neither the issuers, the exchange agent nor any other person will incur
any liability for any failure to give notification of these defects or
irregularities. Tenders of initial notes will not be deemed to have been made
until such irregularities have been cured or waived. The exchange agent will
return without cost to their holders any initial notes that are not properly
tendered and as to which the defects or irregularities have not been cured or
waived as promptly as practicable following the expiration date.

If all the conditions to the exchange offer are satisfied or waived on the
expiration date, the issuers will accept all initial notes properly tendered and
will issue the exchange notes promptly thereafter. Please refer to the section
of this prospectus entitled "-- Conditions to the Exchange Offer" below. For
purposes of this exchange offer, initial notes will be deemed to have been
accepted as validly tendered for exchange when, as and if the issuers give oral
or written notice of acceptance to the exchange agent.

The issuers will issue the exchange notes in exchange for the initial notes
tendered pursuant to a notice of guaranteed delivery by an eligible institution
only against delivery to the exchange agent of the letter of transmittal, the
tendered initial notes and any other required documents, or the receipt by the
exchange agent of a timely confirmation of a book-entry transfer of initial
notes into the exchange agent's account at The Depository Trust Company with an
agent's message, in each case, in form satisfactory to the issuers and the
exchange agent.

If any tendered initial notes are not accepted for any reason provided by
the terms and conditions of this exchange offer or if initial notes are
submitted for a greater principal amount than the holder desires to exchange,
the unaccepted or non-exchanged initial notes will be returned without expense
to the tendering holder, or, in the case of initial notes tendered by book-entry
transfer procedures described above, will be credited to an account maintained
with the book-entry transfer facility, as promptly as practicable after
withdrawal, rejection of tender or the expiration or termination of the exchange
offer.

In addition, the issuers reserve the right in their sole discretion, as
limited by the provisions of the indenture for the notes, to:

- purchase or make offers for any initial notes that remain outstanding
after the expiration date, or, as described under "-- Expiration Date;
Extensions; Amendments; Terminations," to terminate the exchange offer as
provided in the terms of their registration rights agreements; and

- to the extent permitted by applicable law, purchase initial notes in the
open market, in privately negotiated transactions or otherwise. The terms
of any purchases or offers could differ from the terms of the exchange
offer.
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By tendering into this exchange offer, you will irrevocably appoint the
issuers' designees as your attorney-in-fact and proxy with full power of
substitution and resubstitution to the full extent of your rights on the notes
tendered. This proxy will be considered coupled with an interest in the tendered
notes. This appointment will be effective only when, and to the extent that the
issuers accept your notes in this exchange offer. All prior proxies on these
notes will then be revoked and you will not be entitled to give any subsequent
proxy. Any proxy that you may give subsequently will not be deemed effective.
The issuers' designees will be empowered to exercise all voting and other rights
of the holders as they may deem proper at any meeting of note holders or
otherwise. The initial notes will be validly tendered only if the issuers are
able to exercise full voting rights on the notes, including voting at any
meeting of the note holders, and full rights to consent to any action taken by
the note holders.

WITHDRAWAL OF TENDERS

Except as otherwise provided in this prospectus, you may withdraw tenders
of initial notes at any time before 5:00 p.m., New York City time, on the
expiration date.

For a withdrawal to be effective, you must send a written or facsimile
transmission notice of withdrawal to the exchange agent before 5:00 p.m., New
York City time, on the expiration date at the address provided below under
"-- Exchange Agent" and before acceptance of your tendered notes for exchange by
the issuers.

Any notice of withdrawal must:

- specify the name of the person having tendered the initial notes to be
withdrawn,

- identify the notes to be withdrawn, including, if applicable, the
registration number or numbers and total principal amount of these notes,

- be signed by the person having tendered the initial notes to be withdrawn
in the same manner as the original signature on the letter of transmittal
by which these initial notes were tendered, including any required
signature guarantees, or be accompanied by documents of transfer
sufficient to permit the trustee for the initial notes to register the
transfer of these notes into the name of the person having made the
original tender and withdrawing the tender,

- specify the name in which any of these initial notes are to be
registered, if this name is different from that of the person having
tendered the initial notes to be withdrawn, and

- if applicable because the initial notes have been tendered though the
book-entry procedure, specify the name and number of the participant's
account at The Depository Trust Company to be credited, if different than
that of the person having tendered the initial notes to be withdrawn.

The issuers will determine all questions as to the validity, form and
eligibility, including time of receipt, of all notices of withdrawal and their
determination will be final and binding on all parties. Initial notes that are
withdrawn will be deemed not to have been validly tendered for exchange in this
exchange offer.

The exchange agent will return without cost to their holders all initial
notes that have been tendered for exchange and are not exchanged for any reason,
as promptly as practicable after withdrawal, rejection of tender or expiration
or termination of this exchange offer. In the case of outstanding initial notes
tendered by book-entry transfer into the exchange agent's account at The
Depository Trust Company under the book-entry transfer procedures described
above, the initial notes tendered for exchanged but not exchanged will be
credited to an account maintained with The Depository Trust Company.

You may retender properly withdrawn initial notes in this exchange offer by
following one of the procedures described under "-- Procedures for Tendering
Initial Notes" above at any time on or before the expiration date.

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CONDITIONS TO THE EXCHANGE OFFER

We will complete this exchange offer unless the exchange offer is not be
permissible under applicable law or Securities and Exchange Commission policy.

This condition is for our sole benefit. We may assert this condition
regardless of the circumstances giving rise to it and may also waive it, in
whole or in part, at any time and from time to time, if we determine in our
reasonable discretion that it has not been satisfied, subject to applicable law.
We will not be deemed to have waived our rights to assert or waive this
condition if we fail at any time to exercise it. Each of these rights will be
deemed an ongoing right which we may assert at any time and from time to time.

If we determine that we may terminate this exchange offer because the above
condition is not satisfied, we may:

- refuse to accept and return to their holders any initial notes that have
been tendered,

- extend the exchange offer and retain all notes tendered before the
expiration date, subject to the rights of the holders of these notes to
withdraw their tenders, or

- waive the condition that has not been satisfied and accept all properly
tendered notes that have not been withdrawn or otherwise amend the terms
of this exchange offer in any respect as provided under the section in
this prospectus entitled "-- Expiration Date; Extensions; Amendments;
Termination."

The exchange offer is not conditioned upon any minimum principal amount of
outstanding notes being tendered for exchange.

The issuers have no obligation to, and will not knowingly, accept tenders
of outstanding notes

- from their affiliates, within the meaning of Rule 405 under the
Securities Act,

- from any other holder or holders who are not eligible to participate in
the exchange offer under applicable law or interpretations of the
Securities Act by the Securities and Exchange Commission, or

- if the exchange notes to be received by the holder or holders of
outstanding notes in the exchange offer, upon receipt, will not be
tradable by these holders without restriction under the Securities Act
and the Securities Exchange Act of 1934 and without material restrictions
under the blue sky or securities laws of substantially all of the states
of the United States.

ACCOUNTING TREATMENT

The issuers will record the exchange notes at the same carrying value as
the initial notes as reflected in their accounting records on the date of the
exchange. Accordingly, the issuers will not recognize any gain or loss for
accounting purposes. The issuers will amortize the costs of the exchange offer
and the unamortized expenses related to the issuance of the exchange notes over
the term of the exchange notes.

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EXCHANGE AGENT

The issuers have appointed U.S. Bank Trust National Association as exchange
agent for this exchange offer. You should direct all questions and requests for
assistance on the procedures for tendering and all requests for additional
copies of this prospectus or the letter of transmittal to the exchange agent as
follows:

By Registered or Certified Mail:

U.S. Bank National Trust Association
180 East Fifth Street
St. Paul, MN 55101
Attn: Specialized Finance

By Facsimile:

(for Eligible Institutions only)
(651) 244-1537
Confirm by Telephone:
(651) 244-8161

By Overnight Courier or Hand:

U.S. Bank National Trust Association
180 East 5th Street
St. Paul, MN 55101
Attn: Specialized Finance

FEES AND EXPENSES

The issuers will bear the expenses of soliciting tenders in this exchange
offer and of all other expenses incurred in connection with the exchange offer,
including fees and expenses of the exchange agent and trustee and accounting,
legal, printing and related fees and expenses. The principal solicitation for
tenders under the exchange offer is being made by mail; however, the issuers'
officers and other employees may make additional solicitation by telegraph,
telephone, telecopy or in person.

The issuers will not make any payments to brokers, dealers or other persons
soliciting acceptances of this exchange offer. However, the issuers will pay the
exchange agent reasonable and customary fees for its services and will reimburse
the exchange agent for its reasonable out-of-pocket expenses in connection with
this exchange offer. The issuers will also pay brokerage houses and other
custodians, nominees and fiduciaries their reasonable out-of-pocket expenses for
forwarding copies of the prospectus, letters of transmittal and related
documents to the beneficial owners of the initial notes and for handling or
forwarding tenders for exchange to their customers.

The issuers will pay all transfer taxes, if any, applicable to the exchange
of initial notes in accordance with this exchange offer. However, tendering
holders will pay the amount of any transfer taxes, whether imposed on the
registered holder or any other persons, if:

- certificates representing exchange notes or initial notes for principal
amounts not tendered or accepted for exchange are to be delivered to, or
are to be registered or issued in the name of, any person other than the
registered holder of the notes tendered,

- tendered initial notes are registered in the name of any person other
than the person signing the letter of transmittal, or

- a transfer tax is payable for any reason other than the exchange of the
initial notes in this exchange offer.

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If satisfactory evidence of payment of any of these taxes or of any
exemption from this payment is not submitted with the letter of transmittal, the
amount of the transfer taxes will be billed directly to the tendering holder.

YOUR FAILURE TO PARTICIPATE IN THE EXCHANGE OFFER WILL HAVE ADVERSE CONSEQUENCES

If you do not exchange your initial notes for exchange notes in the
exchange offer or if you do not properly tender your outstanding notes in the
exchange offer, you will not be able to resell, offer to resell or otherwise
transfer the initial notes unless they are registered under the Securities Act
or unless you resell them, offer to resell or otherwise transfer them under an
exemption from the registration requirements of, or in a transaction not under,
the Securities Act. In addition, you will no longer be able to obligate the
issuers to register the outstanding notes under the Securities Act except in the
limited circumstances provided under our registration rights agreements. The
restrictions on transfer of your outstanding notes arise because the issuers
issued the outstanding notes under exemptions from, or in transactions outside
the registration requirements of the Securities Act and applicable state
securities law. In addition, if you want to exchange your outstanding notes in
the exchange offer for the purpose of participating in a distribution of the
exchange notes, you may be deemed to have received restricted securities, and,
if so, will be required to comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale transaction. To
the extent the outstanding notes are tendered and accepted in the exchange
offer, the trading market, if any, for the outstanding notes would be adversely
affected. Please refer to the section in this prospectus entitled "Risk
Factors -- Your Failure to participate in the exchange offer will have adverse
consequences."

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DESCRIPTION OF THE EXCHANGE NOTES

GENERAL

The form and terms of the exchange notes are the same as the form and terms
of the initial notes, except that the exchange notes have been registered under
the Securities Act, will not bear legends restricting the transfer of the notes
and will not be entitled to registration rights under our registration rights
agreement. The issuers issued the initial notes, and will issue the exchange
notes, under the indenture, dated as of January 26, 2001, among MeriStar
Hospitality Operating Partnership, L.P., MeriStar Hospitality Corporation,
MeriStar Hospitality Finance Corp., our subsidiary guarantors and U.S. Bank
Trust National Corporation, as trustee. The terms of the exchange notes include
those stated in the indenture and those made part of the indenture by reference
to the Trust Indenture Act of 1939. The exchange notes are subject to all those
terms, and we refer you to the indenture and the Trust Indenture Act for a
statement of the terms. Each of the 2008 and 2011 initial notes were, and each
of the 2008 and 2011 exchange notes are being, issued as a separate series.

Except as otherwise indicated, the following description relates both to
the initial notes and the exchange notes and is a summary of the material
provisions of the indenture. It does not restate the indenture in its entirety.
We urge you to read the indenture because it, and not this description, defines
your rights as holder of the exchange notes. We have filed a copy of the
indenture as an exhibit to the registration statement which includes this
prospectus.

The definitions of specific terms used in the following summary are
indicated below under "-- Definitions." For purposes of this summary, the terms
"MeriStar," "we" and "our" refer only to MeriStar Hospitality Operating
Partnership, L.P., without including any of our subsidiaries, references to
MeriStar Hospitality Corporation do not include its subsidiaries and the term
"issuers" refers only to MeriStar Hospitality Operating Partnership, L.P. and
MeriStar Hospitality Finance Corp. as co-issuers of the notes and does not
include any of their subsidiaries.

The notes are unsecured, senior obligations of MeriStar and MeriStar
Hospitality Finance, ranking equal in right of payment to all of our unsecured
senior debt and senior in right of payment to all of our subordinated debt. The
notes are effectively subordinated to all of our and our subsidiaries' secured
Indebtedness and to all other Indebtedness of our non-guarantor subsidiaries. At
June 30, 2001, MeriStar Hospitality Corporation, we and our respective
subsidiaries on a consolidated basis had approximately $1.7 billion ($3.6
billion on a pro forma basis after giving effect to the FelCor merger and the
related transactions) of Indebtedness outstanding, including $0.9 billion ($1.9
billion on a pro forma basis) of senior debt. As of the same date, our
non-guarantor subsidiaries would have had approximately $375.1 million ($950.1
million on a pro forma basis) of Indebtedness outstanding, out of that $1.7
billion ($3.6 billion on a pro forma basis) of total Indebtedness. The indenture
permits the incurrence of additional senior debt, including secured debt, in the
future.

Upon completion of the FelCor merger, FelCor LP will become a co-obligor
under the notes and the subsidiaries of FelCor and FelCor LP that currently
guarantee FelCor's senior credit facility will guarantee the notes. It is
anticipated that the issuers and the guarantors will guarantee all of the
outstanding indebtedness under FelCor's credit facility and FelCor LP's senior
notes.

For purposes of the indenture, our subsidiaries are divided into two
categories -- Restricted Subsidiaries, which generally are subject to the
restrictive covenants set forth in the indenture, and Unrestricted Subsidiaries,
which generally are not. On the date of the indenture, none of our subsidiaries
were designated as Unrestricted Subsidiaries.

The initial notes were co-issued, and the exchange notes will be co-issued,
by MeriStar Hospitality Finance, a wholly-owned, special purpose corporation
that was formed by us. MeriStar Hospitality Finance owns no assets other than
nominal equity capital and was formed for the sole purpose of co-issuing the
notes. Some of the covenants in the indenture that apply to us also apply to
MeriStar Hospitality Finance. In addition, the indenture provides that MeriStar
Hospitality Finance may not incur any Indebtedness other than the initial notes,
the exchange notes and guarantees of certain existing indebtedness. The

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indenture also provides that MeriStar Hospitality Finance may not engage in any
business other than co-issuing the initial notes and the exchange notes and
guaranteeing existing Indebtedness.

PRINCIPAL, MATURITY AND INTEREST

The 2008 notes are limited in aggregate principal amount to $300,000,000.
The 2008 exchange notes will mature on January 15, 2008. Interest on the 2008
exchange notes will be payable semi-annually in arrears in cash on January 15
and July 15 of each year, commencing January 15, 2002, at the rate of 9% per
annum to holders of 2008 exchange notes of record on the immediately preceding
January 1 and July 1. Interest on the 2008 exchange notes will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from the date of issuance of such exchange notes. Interest will be
computed on the basis of a 360-day year comprised of twelve 30-day months.

The 2011 notes are limited in aggregate principal amount to $200,000,000.
The 2011 notes will mature on January 15, 2011. Interest on the 2011 exchange
notes will be payable semi-annually in arrears in cash on January 15 and July 15
of each year, commencing January 15, 2002, at the rate of 9 1/8% per annum to
holders of 2011 exchange notes of record on the immediately preceding January 1
and July 1. Interest on the 2011 exchange notes will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from the
date of issuance of such exchange notes. Interest will be computed on the basis
of a 360-day year comprised of twelve 30-day months.

Principal of and premium and interest on the notes and liquidated damages
on the initial notes, if any, are payable at the office or agency maintained for
that purpose or, at our option, payments of interest on the notes and liquidated
damages on the initial notes may be made by check mailed to the holders of the
notes at their respective addresses as set forth in the register of holders of
notes. However, all payments to noteholders who have given us wire transfer
instructions will be required to be made by wire transfer of immediately
available funds to the accounts specified by those noteholders. Until we
otherwise designate, our office or agency will be the office of the trustee
maintained for this purpose. The initial notes were issued, and the exchange
notes will be issued, in denominations of $1,000 and integral multiples of
$1,000.

GUARANTEES

As of the date of issuance of the initial notes, all of the issuers'
Obligations under the notes were guaranteed on an unsecured senior basis by
MeriStar Hospitality Corporation and all of our subsidiaries that guarantee our
Credit Agreement. In addition, the indenture provides that, before guaranteeing
any of our other Indebtedness or Indebtedness of MeriStar Hospitality
Corporation, a Restricted Subsidiary of ours or of MeriStar Hospitality
Corporation that is also a Significant Subsidiary must execute and deliver to
the trustee a supplemental indenture under which the Restricted Subsidiary shall
guarantee, on an unsecured senior basis, all of the issuers' Obligations with
respect to the notes together with an opinion of counsel (which counsel may be
one of our employees) to the effect that the supplemental indenture has been
duly executed and delivered by the Restricted Subsidiary and is in compliance in
all material respects with the terms of the indenture. The guarantees will rank
equally with all of the Guarantors' existing and future senior debt and senior
to all of the Guarantors' subordinated debt. The obligations of the Guarantors
under any guarantees will be effectively subordinated to all secured debt of the
Guarantors and to all indebtedness of their subsidiaries.

The Credit Agreement generally may, from time to time, prohibit the
incurrence of these future guarantees unless and until a time when the
indebtedness under the credit facility is repaid in full.

The indenture provides that no Subsidiary Guarantor may consolidate with or
merge with or into (whether or not such Subsidiary Guarantor is the surviving
person) another corporation, person or entity, whether or not affiliated with
such Subsidiary Guarantor (other than us, MeriStar Hospitality Corporation or
another Subsidiary Guarantor), unless:

(a) except as limited by the provisions of the following paragraph,
the person formed by or surviving the consolidation or merger (if other
than the Subsidiary Guarantor) assumes all the

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obligations of the Subsidiary Guarantor under a supplemental indenture in
form and substance reasonably satisfactory to the trustee pursuant to the
indenture;

(b) immediately after giving effect to the transaction, no default or
event of default exists; and

(c) the Subsidiary Guarantor, or any person formed by or surviving the
consolidation or merger, would be permitted by virtue of the tests
described in the first paragraph of the covenant described below under the
caption "-- Covenants -- Incurrence of Indebtedness and Issuance of Certain
Capital Stock" to incur, immediately after giving effect to the
transaction, at least $1.00 of additional Indebtedness under those tests.

The indenture provides that in the event of either a sale or other
disposition of all or substantially all of the assets of any Subsidiary
Guarantor, which sale or other disposition is otherwise in compliance with the
terms of the indenture, by way of merger, consolidation or otherwise, or a sale
or other disposition of all of the capital stock of any Subsidiary Guarantor,
then the Subsidiary Guarantor (in the event of a sale or other disposition, by
way of a merger, consolidation or otherwise, of all of the capital stock of the
Subsidiary Guarantor) or the corporation acquiring the property (in the event of
a sale or other disposition of all or substantially all of the assets of the
Subsidiary Guarantor) will be automatically and unconditionally released and
relieved of any obligations under its guarantee.

For purposes of a guarantee with respect to the notes, each Subsidiary
Guarantor's liability will be that amount from time to time equal to the
aggregate liability of the Subsidiary Guarantor under the guarantee, but shall
be limited to the lesser of (a) the aggregate amount of our obligations under
the notes and the indenture or (b) the amount, if any, which would not have
either rendered the Subsidiary Guarantor "insolvent" (as the term is defined in
the Federal Bankruptcy Code and in the Debtor and Creditor Law of the State of
New York) or left it with unreasonably small capital at the time its guarantee
with respect to the notes was entered into, after giving effect to the
incurrence of existing Indebtedness immediately before such time. However, it
shall be a presumption in any lawsuit or proceeding in which a Subsidiary
Guarantor is a party that the amount guaranteed pursuant to the guarantee with
respect to the notes is the amount described in clause (a) above unless any
creditor, or representative of creditors of the Subsidiary Guarantor, or debtor
in possession or trustee in bankruptcy of the Subsidiary Guarantor, otherwise
proves in a lawsuit that the aggregate liability of the Subsidiary Guarantor is
limited to the amount described in clause (b). The indenture provides that, in
making any determination as to the solvency or sufficiency of capital of a
Subsidiary Guarantor in accordance with the previous sentence, the right of the
Subsidiary Guarantor to contribution from other Subsidiary Guarantors and any
other rights the Subsidiary Guarantor may have, contractual or otherwise, are
taken into account.

OPTIONAL REDEMPTION

Before January 15, 2004, the issuers may redeem, on any one or more
occasions, with the net cash proceeds of one or more public offerings of the
common equity of MeriStar Hospitality Corporation (within 60 days of the
consummation of any public equity offering), (a) up to 35% of the aggregate
principal amount of the 2008 notes at a redemption price equal to 109% of the
principal amount of the 2008 notes plus accrued and unpaid interest and
liquidated damages thereon, if any, to the redemption date and (b) up to 35% of
the aggregate principal amount of the 2011 notes at a redemption price equal to
109 1/8 % of the principal amount of the 2011 notes plus accrued and unpaid
interest and liquidated damages thereon, if any, to the redemption date.
However, in order to redeem the 2008 notes or the 2011 notes with the net cash
proceeds of an equity offering, at least 65% of the aggregate principal amount
of the notes of that series originally issued must remain outstanding
immediately after each redemption. The Credit Agreement may, from time to time,
prohibit the purchase of the notes with the net cash proceeds of a public equity
offering, unless and until the indebtedness under the Credit Agreement is repaid
in full.

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MANDATORY REDEMPTION

The issuers are not required to make mandatory redemption or sinking fund
payments with respect to the notes.

RANKING

The notes are the issuers' general unsecured obligations that rank equally
in right of payment with all of the issuers' other unsecured senior Indebtedness
and rank senior in right of payment to all of the issuers existing and future
Indebtedness that is expressly subordinated in right of payment to the notes.
The notes are effectively subordinated to all of the issuers' and their
subsidiaries' secured Indebtedness and to all other indebtedness of their
non-guarantor subsidiaries. In the event of bankruptcy, liquidation,
reorganization or other winding up of MeriStar or upon a default in payment with
respect to, or the acceleration of, any Indebtedness under the Credit Agreement
or the issuers' other secured debt, their assets that secure the Credit
Agreement or their other secured debt will be available to pay obligations on
the notes only after all Indebtedness under the Credit Agreement or their other
secured debt has been repaid in full from such assets. We advise you that there
may not be sufficient assets remaining to pay amounts due on any or all the
notes then outstanding.

REPURCHASE AT THE OPTION OF HOLDERS

CHANGE OF CONTROL

The indenture provides that upon the occurrence of a Change of Control,
each holder will have the right to require that we purchase all or a portion of
the holder's notes pursuant to the offer described below, at a purchase price
equal to 101% of the principal amount of the notes plus accrued and unpaid
interest and liquidated damages, if any, to the date of purchase.

Within 10 days following the date upon which the Change of Control occurs,
we must send, by first class mail, a notice to each holder, with a copy to the
trustee, which notice shall govern the terms of the Change of Control offer. The
notice shall state, among other things, the purchase date, which must be no
earlier than 30 days nor later than 60 days from the date the notice is mailed,
other than as may be required by law. Holders electing to have a note purchased
pursuant to a Change of Control offer will be required to surrender their note,
with the form entitled "Option of Holder to Elect Purchase" on the reverse of
the note completed, to the trustee or paying agent, if any, at the address
specified in the notice before the close of business on the third business day
before the Change of Control payment date.

If a Change of Control offer is made, we cannot assure you that we will
have available funds sufficient to pay the Change of Control purchase price for
all the notes that might be delivered by holders seeking to accept that Change
of Control offer. The Credit Agreement prohibits the purchase of notes by us in
the event of a Change of Control, unless and until the time the Indebtedness
under the Credit Agreement is repaid in full. Any future credit agreements or
other agreements relating to senior debt to which we become a party may contain
similar restrictions and provisions.

In the event a Change of Control occurs at a time when we are prohibited
from purchasing notes, we could seek the consent of our lenders to purchase
notes or could attempt to refinance the borrowings that contain that
prohibition. If we do not obtain that consent or repay those borrowings, we will
remain prohibited from purchasing notes. In that case, the failure to purchase
tendered notes would constitute an event of default under the indenture which
would, in turn, constitute a default under the Credit Agreement.

The Change of Control provisions described above will be applicable whether
or not any other provisions of the indenture are applicable. Except as described
above with respect to a Change of Control, the indenture does not contain
provisions that permit the holders of the notes to require that the issuers
repurchase or redeem the notes in the event of a takeover, recapitalization or
similar transaction.

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The definition of Change of Control includes a phrase relating to the sale,
lease, transfer, conveyance or other disposition of "all or substantially all"
of our assets. Although there is a developing body of case law interpreting the
phrase "substantially all," there is no precise established definition of the
phrase under applicable law. Accordingly, the ability of a holder of notes to
require the issuers to repurchase the notes as a result of a sale, lease,
transfer, conveyance or other disposition of less than all of the issuers'
assets to another person may be uncertain.

We will comply with the requirements of Rule 14e-1 under the Securities
Exchange Act of 1934 and any other securities laws and regulations under the
Securities Exchange Act to the extent those laws and regulations are applicable
in connection with the repurchase of notes under a Change of Control offer. To
the extent that the provisions of any securities laws or regulations conflict
with the "Change of Control" provisions of the indenture, the issuers shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached their obligations under the "Change of Control"
provisions of the indenture by virtue of that compliance.

The issuers will not be required to make a Change of Control offer upon a
Change of Control if a third party makes the Change of Control offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in the indenture applicable to a Change of Control offer made by the issuers and
purchases all notes validly tendered and not withdrawn under the Change of
Control offer.

ASSET SALES

The indenture provides that neither we nor MeriStar Hospitality Corporation
will, and neither we nor MeriStar Hospitality Corporation will permit any of our
respective Restricted Subsidiaries to, conduct an Asset Sale, unless:

(a) we, MeriStar Hospitality Corporation or such Restricted
Subsidiary, as the case may be, receive consideration at the time of the
Asset Sale at least equal to the fair market value of the assets sold or
otherwise disposed of, to be evidenced by a resolution of MeriStar
Hospitality Corporation's board of directors described in an officer's
certificate delivered to the trustee; and

(b) at least 75% of the consideration therefor received by us,
MeriStar Hospitality Corporation or such Restricted Subsidiary, as the case
may be, is in the form of cash or Cash Equivalents; provided, however,
that, with respect to the sale of one or more hotel properties, up to 75%
of the consideration may consist of indebtedness of the purchaser of those
hotel properties if that indebtedness is secured by a first priority Lien
on the properties sold. However, the principal amount of the following
shall be deemed to be cash for purposes of this provision:

(1) any of our liabilities or those of MeriStar Hospitality
Corporation or such Restricted Subsidiaries, as shown on our, MeriStar
Hospitality Corporation's or such Restricted Subsidiary's most recent
balance sheet or in the related notes thereto (other than liabilities
that by their terms rank junior in right of payment to the notes or any
guarantee of the notes) that are assumed by the transferee of those
assets; and

(2) any notes or other obligations received by us, MeriStar
Hospitality Corporation or any such Restricted Subsidiary from a
transferee that are converted by us or the Restricted Subsidiary into
cash within 90 days after the closing of the Asset Sale (to the extent
of the cash received).

Notwithstanding the foregoing, the restriction in clause (b) above will not
apply with respect to mortgages, other notes receivable or other securities
received by us, MeriStar Hospitality Corporation or any Restricted Subsidiary
from a transferee of any assets to the extent those mortgages, other notes
receivable or other securities are Investments permitted to be made by us,
MeriStar Hospitality Corporation or the Restricted Subsidiary under the covenant
described below entitled "Restricted Payments."

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In the event and to the extent that the Net Proceeds received by us,
MeriStar Hospitality Corporation and our respective Restricted Subsidiaries
collectively from one or more Asset Sales occurring on or after the date of
issuance of the notes 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 us, MeriStar Hospitality Corporation and our respective Restricted
Subsidiaries has been filed with the Securities and Exchange Commission or
otherwise provided to the trustee), then we or MeriStar Hospitality Corporation
shall, or shall cause the relevant Restricted Subsidiary to, within 365 days
after the date the Net Proceeds so received exceed 10% of Adjusted Consolidated
Net Tangible Assets:

(a) apply the Net Proceeds from the Asset Sale to prepay any
Indebtedness under any Credit Facility, in order to effect a permanent
reduction in the amount of Indebtedness that may be incurred under clause
(b) of the second paragraph of the covenant entitled "Incurrence of
Indebtedness and Issuance of Certain Capital Stock"; or

(b) invest the Net Proceeds from the Asset Sale in property or assets
used in a Hospitality-Related Business, provided that we, MeriStar
Hospitality Corporation or such Restricted Subsidiary will have complied
with this clause (b) if, within 365 days after the Asset Sale, we, MeriStar
Hospitality Corporation or such Restricted Subsidiary, as applicable, shall
have commenced and not completed or abandoned an Investment in compliance
with this clause (b) and shall have segregated the Net Proceeds from our
general funds and our subsidiaries for that purpose and the Investment is
substantially completed within 180 days after the first anniversary of the
Asset Sale.

Any Net Proceeds from an Asset Sale that are not applied or invested as
provided above will be deemed to constitute "excess proceeds." When the
aggregate amount of excess proceeds exceeds $10.0 million, we shall make an
offer, to all holders of notes and other Indebtedness that ranks by its terms
equally in right of payment with the notes and the terms of which contain
substantially similar requirements with respect to the application of Net
Proceeds from Asset Sales as are contained in the indenture to purchase on a
proportional basis the maximum principal amount of notes of each series, that is
an integral multiple of $1,000, that may be purchased out of the excess
proceeds, at an offer price in cash in an amount equal to 100% of the principal
amount of the notes of that series plus accrued and unpaid interest and
liquidated damages thereon, if any, to the date of purchase, in accordance with
the procedures set forth in the indenture. To the extent that the aggregate
amount of notes and other such Indebtedness tendered under an Asset Sale offer
is less than the excess proceeds, we may use any remaining excess proceeds for
general corporate purposes. If the aggregate principal amount of notes of any
series surrendered by holders of those notes exceeds the amount of excess
proceeds available for purchase of those notes, the trustee shall select the
notes of that series to be purchased in the manner described under the caption
"-- Selection And Notice" below. When the offer to purchase is completed, the
amount of excess proceeds shall be reset at zero. Pending the final application
of any Net Proceeds from an Asset Sale under this paragraph, we or any
Restricted Subsidiary may temporarily reduce our Indebtedness or that of a
Restricted Subsidiary that ranks by its terms senior to the notes or otherwise
invest the Net Proceeds in Cash Equivalents. The Credit Agreement generally
prohibits the purchase of notes by us in the circumstances described above
unless and until the time as the Indebtedness under the credit facility is
repaid in full.

We will comply, to the extent applicable, with the requirements of Rule
14e-1 under the Securities Exchange Act and other securities laws and
regulations under the Securities Exchange Act to the extent those laws and
regulations are applicable in connection with any offer to purchase and the
purchase of notes as described above. To the extent that the provisions of any
securities laws or regulations conflict with the "Asset Sale" provisions of the
indenture, we shall comply with the applicable securities laws and regulations
and shall not be deemed to have breached our obligations under the "Asset Sale"
provisions of the indenture by virtue of compliance.

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SELECTION AND NOTICE

If less than all of the notes of a series are to be purchased in an Asset
Sale offer or redeemed at any time, selection of notes of that series for
purchase or redemption will be made by the trustee in compliance with the
requirements of the principal national securities exchange, if any, on which the
notes of that series are listed, or, if the notes of that series are not so
listed, on a proportional basis, by lot or by any method as the trustee shall
deem fair and appropriate. However, no notes of a principal amount of $1,000 or
less shall be redeemed in part, and, if a partial redemption of notes of a
series is made with the proceeds of a public offering of our common equity
securities, selection of the notes of that series or portions of the notes of
that series for redemption shall be made by the trustee only on a proportional
basis or on as nearly a proportional basis as is practicable (except as required
by the procedures of The Depository Trust Company), unless that method is
otherwise prohibited.

Notices of redemption shall be mailed by first class mail at least 30 but
not more than 60 days before the purchase or redemption date to each holder of
notes to be purchased or redeemed at its registered address. If any note of a
series is to be purchased or redeemed in part only, the notice of redemption
that relates to that note shall state the portion of the principal amount of
that note to be purchased or redeemed.

A new note in principal amount equal to the unpurchased or unredeemed
portion of any note purchased or redeemed in part will be issued in the name of
the holder of the note upon cancellation of the original note. On and after the
purchase or redemption date, interest ceases to accrue on notes or portions of
the note called for purchase or redemption as long as the issuers have deposited
with the trustee funds in satisfaction of the applicable redemption price under
the indenture.

COVENANTS

The indenture contains, among others, the following covenants:

Restricted Payments. The indenture provides that neither we nor MeriStar
Hospitality Corporation will, and neither we nor MeriStar Hospitality
Corporation will permit any of our respective Restricted Subsidiaries to,
directly or indirectly:

(a) declare or pay any dividend or make any distribution on account of
our, MeriStar Hospitality Corporation's or any of our respective Restricted
Subsidiaries' Equity Interests, other than: (1) dividends or distributions
payable in our Equity Interests or Equity Interests of MeriStar Hospitality
Corporation (other than Disqualified Stock); (2) dividends or distributions
by one of our or MeriStar Hospitality Corporation's Restricted
Subsidiaries, except that to the extent that a portion of that dividend or
distribution is paid to a holder of Equity Interests of a Restricted
Subsidiary other than us, MeriStar Hospitality Corporation or a Restricted
Subsidiary, the portion of that dividend or distribution is not greater
than that holder's proportional aggregate common equity interest in that
Restricted Subsidiary; and (3) dividends or distributions payable on
Existing Preferred OP Units and Preferred OP Units issued in compliance
with the covenant described below under the caption "-- Incurrence of
Indebtedness and Issuance of Certain Capital Stock";

(b) purchase, redeem or otherwise acquire or retire for value any of
our Equity Interests or those of MeriStar Hospitality Corporation or any of
our respective Restricted Subsidiaries or other Affiliate of ours or
MeriStar Hospitality Corporation's, other than (1) any Equity Interests
owned by us, MeriStar Hospitality Corporation or any of our respective
Restricted Subsidiaries; (2) any Existing Preferred OP Units; and (3) any
Preferred OP Units issued in compliance with the covenant described below
under the caption "-- Incurrence of Indebtedness and Issuance of Certain
Capital Stock";

(c) purchase, redeem or otherwise acquire or retire for value any of
our Indebtedness or any Indebtedness of MeriStar Hospitality Corporation or
any of our respective Restricted Subsidiaries that is subordinated or
junior in right of payment, by its terms, to the notes or any guarantee of
the notes

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before the scheduled final maturity or sinking fund payment dates for
payment of principal and interest in accordance with the original
documentation for the subordinated or junior Indebtedness; or

(d) make any Investment

(all the payments and other actions described in clauses (a) through (d)
above being collectively referred to as "Restricted Payments"), unless,
at the time of the Restricted Payment:

(1) no default or event of default shall have occurred and be
continuing or would occur as a consequence of the Restricted Payment;

(2) we and MeriStar Hospitality Corporation would, at the time of
the Restricted Payment and after giving pro forma effect thereto as if
the Restricted Payment had been made at the beginning of the applicable
four-quarter period, have been permitted to incur at least $1.00 of
additional Indebtedness under the tests described in the first paragraph
of the covenant described under the caption "-- Incurrence of
Indebtedness and Issuance of Certain Capital Stock"; and

(3) the Restricted Payment, together with the aggregate of all
other Restricted Payments made by us, MeriStar Hospitality Corporation
and our respective Restricted Subsidiaries after the date of the
indenture, excluding Restricted Payments permitted by clauses (b), (c),
(d), (e) and (g)(1) of the second next succeeding paragraph, is less
than the sum, without duplication, of

(A) 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 us, MeriStar Hospitality Corporation or any of
our 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
immediately following the date of issuance of the notes to the end of
our most recently ended fiscal quarter for which internal financial
statements are available at the time of such Restricted Payment, plus

(B) 100% of the aggregate net proceeds (including the fair
market value of non-cash proceeds as determined in good faith by the
board of directors of MeriStar Hospitality Corporation) received by
us or MeriStar Hospitality Corporation from the issue or sale, in
either case, since the date of the indenture of either (a) our or
MeriStar Hospitality Corporation's Equity Interests or of (b) our or
MeriStar Hospitality Corporation's debt securities that have been
converted or exchanged into those Equity Interests (other than Equity
Interests (or convertible or exchangeable debt securities) sold to
one of our or MeriStar Hospitality Corporation's Restricted
Subsidiaries and other than Disqualified Stock or debt securities
that have been converted or exchanged into Disqualified Stock), plus

(C) in case, after the date of the indenture, any Unrestricted
Subsidiary has been redesignated a Restricted Subsidiary under the
terms of the indenture or has been merged, consolidated or
amalgamated with or into, or transfers or conveys assets to, or is
liquidated into us, MeriStar Hospitality Corporation or a Restricted
Subsidiary of ours or MeriStar Hospitality Corporation and, only if
no default or event of default shall have occurred and be continuing
or would occur as a consequence of the Restricted Payment, the lesser
of (a) the book value (determined in accordance with GAAP) at the
date of the redesignation, combination or transfer of the aggregate
Investments made by us, MeriStar Hospitality Corporation and our
respective Restricted Subsidiaries in the Unrestricted Subsidiary (or
of the assets transferred or conveyed, as applicable) and (b) the
fair market value of the Investment in the Unrestricted Subsidiary at
the time of the redesignation, combination or transfer (or of the
assets transferred or conveyed, as applicable), in each case as
determined in good faith by the board of directors of MeriStar
Hospitality Corporation, whose determination shall be conclusive and
evidenced by a resolution of the board and, in each

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case, after deducting any Indebtedness associated with the
Unrestricted Subsidiary so designated or combined or with the assets
so transferred or conveyed, plus

(D) 100% of any dividends, distributions or interest actually
received in cash by us, MeriStar Hospitality Corporation or a
Restricted Subsidiary of ours or MeriStar Hospitality Corporation
after the date of the indenture from (a) a Restricted Subsidiary the
Net Income of which has been excluded from the computation of Funds
From Operations, (b) an Unrestricted Subsidiary, (c) a person that is
not a subsidiary or (d) a person that is accounted for on the equity
method (except in the case of each of clauses (b), (c) and (d), to
the extent any such amounts are included in the calculation of Funds
From Operations).

Notwithstanding the foregoing, we or MeriStar Hospitality Corporation may
declare or pay any dividend or make any distribution that is necessary to
maintain MeriStar Hospitality Corporation's status as a REIT under the Internal
Revenue Code if:

(a) the aggregate principal amount of all of our outstanding
Indebtedness and that of MeriStar Hospitality Corporation and our
respective Restricted Subsidiaries on a consolidated basis at such time is
less than 80% of MeriStar Hospitality Corporation's Adjusted Total Assets;
and

(b) no default or event of default shall have occurred and be
continuing.

The foregoing provisions do not prohibit the following:

(a) the payment of any dividend within 60 days after the date of
declaration of the dividend, if at the date of declaration the payment
would have complied with the provisions of the indenture;

(b) (1) the redemption, purchase, retirement or other acquisition of
any OP Unit in exchange for Equity Interests of MeriStar Hospitality
Corporation (other than Disqualified Stock) and (2) the redemption,
purchase, retirement or other acquisition of any Equity Interests of us,
MeriStar Hospitality Corporation or a Restricted Subsidiary (other than OP
Units or Preferred OP Units) in exchange for, or out of the proceeds of,
the substantially concurrent sale (other than to a Restricted Subsidiary of
ours or of MeriStar Hospitality Corporation) of other Equity Interests of
us or MeriStar Hospitality Corporation (other than any Disqualified Stock).
However, in the case of (1) and (2) the amount of any proceeds that is
utilized for the redemption, repurchase, retirement or other acquisition
shall be excluded from clause (3)(B) of the preceding paragraph;

(c) the defeasance, redemption, repayment or purchase of our
Indebtedness or that of MeriStar Hospitality Corporation or any Restricted
Subsidiary that is subordinate or junior in right of payment, by its terms,
to the notes and any guarantee of the notes in a Permitted Refinancing;

(d) the defeasance, redemption, repayment or purchase of our
Indebtedness or that of MeriStar Hospitality Corporation or any Restricted
Subsidiary that is subordinate or junior in right of payment, by its terms,
to the notes and any guarantee of the notes with the proceeds of a
substantially concurrent sale (other than to one of our subsidiaries) of
Equity Interests (other than Disqualified Stock) of us or MeriStar
Hospitality Corporation. However, the amount of any proceeds that is
utilized for the defeasance, redemption, repayment or purchase shall be
excluded from clause (3)(B) of the preceding paragraph;

(e) the purchase, redemption or other acquisition or retirement for
value of any Equity Interests of us or MeriStar Hospitality Corporation
under any management equity subscription agreement, stock option agreement
or stock award. However, the aggregate price paid for all the purchased,
redeemed, acquired or retired Equity Interests shall not exceed $3,000,000
in any 12 month period;

(f) 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 our property or assets;

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(g) (1) the making of any Permitted Investment described in clauses
(a), (b), (c), (d), (f) or (g) of the definition of Permitted Investments
and (2) the making of any Permitted Investment described in clause (e) of
the definition of Permitted Investments; and

(h) payments that would otherwise be Restricted Payments, in an
aggregate amount not to exceed $35 million collectively, provided that at
the time of, and after giving effect to, the proposed payment, we and
MeriStar Hospitality Corporation could have incurred at least $1.00 of
additional Indebtedness under the first paragraph of the covenant described
under the heading "Incurrence of Indebtedness and Issuance of Certain
Capital Stock";

provided, however, in the case of clauses (b)(2), (c), (d), (e), (f), (g)(2) and
(h), no default or event of default shall have occurred and be continuing or
would occur as a consequence of the Permitted Investments.

In determining whether any Restricted Payment is permitted by the foregoing
covenant, we or MeriStar Hospitality Corporation may allocate or reallocate all
or any portion of the Restricted Payment among the clauses (a) through (h) of
the preceding paragraph or among the clauses and the first paragraph of this
covenant including clauses (1), (2) and (3). However, at the time of the
allocation or reallocation, all the Restricted Payments, or allocated portions
of the Restricted Payments, must be permitted under the various provisions of
the foregoing covenant.

The amount of all Restricted Payments (other than cash) shall be the fair
market value, evidenced by a resolution of the board of directors of MeriStar
Hospitality Corporation described in an officer's certificate delivered to the
trustee, on the date of the Restricted Payment of the asset(s) proposed to be
transferred by us, MeriStar Hospitality Corporation or the Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment. Not later
than (a) the end of any calendar quarter in which any Restricted Payment is made
or (b) the making of a Restricted Payment which, when added to the sum of all
previous Restricted Payments made in a calendar quarter, would cause the
aggregate of all Restricted Payments made in the quarter to exceed $5.0 million,
we shall deliver to the trustee an officer's certificate stating that the
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by this covenant were computed, which calculations may be
based upon our latest available financial statements.

The board of directors of MeriStar Hospitality Corporation may designate
any Restricted Subsidiary to be an Unrestricted Subsidiary if the designation
would not cause a default or event of default. For purposes of making the
determination as to whether the designation would cause a default or event of
default, all outstanding Investments by us, MeriStar Hospitality Corporation and
our Restricted Subsidiaries (except to the extent repaid in cash) in the
subsidiary so designated will be deemed to be Restricted Payments at the time of
the designation and will reduce the amount available for Restricted Payments
under the first paragraph of this covenant. All the outstanding Investments will
be deemed to constitute Investments in an amount equal to the greatest of (a)
the net book value of the Investments at the time of the designation, (b) the
fair market value of the Investments at the time of the designation and (c) the
original fair market value of the Investments at the time they were made. The
designation will only be permitted if the Restricted Payment would be permitted
at the time and if the Restricted Subsidiary otherwise meets the definition of
an Unrestricted Subsidiary.

Any designation of a Restricted Subsidiary to be an Unrestricted Subsidiary
by MeriStar Hospitality Corporation's board of directors shall be evidenced to
the trustee by filing with the trustee a certified copy of the resolution of
MeriStar Hospitality Corporation's board of directors giving effect to the
designation and an officer's certificate certifying that the designation
complied with the foregoing conditions.

Incurrence of Indebtedness and Issuance of Certain Capital Stock. The
indenture provides that (1) neither we nor MeriStar Hospitality Corporation
will, and neither we nor MeriStar Hospitality Corporation will permit any of our
respective Restricted Subsidiaries to, directly or indirectly, create, incur,
issue, assume, guarantee or otherwise become directly or indirectly liable with
respect to (collectively, "incur" or an "incurrence" of) any Indebtedness
(including Assumed Indebtedness), (2) neither we nor
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MeriStar Hospitality Corporation will issue, and neither we nor MeriStar
Hospitality Corporation will permit any of our respective Restricted
Subsidiaries to issue, any shares of Disqualified Stock and (3) neither we nor
MeriStar Hospitality Corporation will permit any of our respective Restricted
Subsidiaries to issue any Preferred Stock. However, we or any Guarantor may
incur Indebtedness or issue shares of Disqualified Stock if:

(1) the aggregate principal amount of all outstanding Indebtedness and
Disqualified Stock of us, MeriStar Hospitality Corporation and our
respective Restricted Subsidiaries (including amounts of Refinancing
Indebtedness outstanding pursuant to clause (e) of the next paragraph or
otherwise) determined on a consolidated basis is less than or equal to 65%
of MeriStar Hospitality Corporation's Adjusted Total Assets, after giving
effect to, on a pro forma basis, such incurrence or issuance and the
receipt and application of the proceeds thereof; and

(2) the Fixed Charge Coverage Ratio of MeriStar Hospitality
Corporation for our most recently ended four full fiscal quarters for which
internal financial statements are available immediately preceding the date
on which the additional Indebtedness is incurred or the Disqualified Stock
is issued would have been at least 2.0 to 1.0, determined on a pro forma
basis (including a pro forma application of the net proceeds therefrom), as
if the additional Indebtedness had been incurred, or the Disqualified Stock
had been issued, as the case may be, at the beginning of that four-quarter
period;

provided that we, MeriStar Hospitality Corporation or any of our respective
Restricted Subsidiaries may not incur any Subsidiary Debt or any Secured
Indebtedness if immediately after giving effect to, on a pro forma basis, such
incurrence of such additional Subsidiary Debt or Secured Indebtedness and the
application of the proceeds thereof, the aggregate principal amount of all
outstanding Subsidiary Debt or Secured Indebtedness of us, MeriStar Hospitality
Corporation and our respective Restricted Subsidiaries (including amounts of
Refinancing Indebtedness outstanding pursuant to clause (e) of the next
paragraph or otherwise) on a consolidated basis is greater that 45% of MeriStar
Hospitality Corporation's Adjusted Total Assets.

The foregoing provisions do not apply to:

(a) the incurrence by our or MeriStar Hospitality Corporation's
Unrestricted Subsidiaries of Non-Recourse Indebtedness; however, if any of
such Indebtedness ceases to be Non-Recourse Indebtedness of an Unrestricted
Subsidiary, that event shall be deemed to constitute an incurrence of
Indebtedness by one of our or MeriStar Hospitality Corporation's Restricted
Subsidiaries;

(b) the incurrence by us, MeriStar Hospitality Corporation or our
respective Restricted Subsidiaries of Indebtedness under the Credit
Facilities in an aggregate principal amount not to exceed $900.0 million at
any one time outstanding minus any Net Proceeds that have been applied to
permanently reduce the outstanding amount of the Indebtedness under clause
(a) of the third paragraph of the covenant described under the caption
"-- Repurchase at the Option of Holders -- Asset Sales";

(c) the incurrence by us, MeriStar Hospitality Corporation and our
respective Restricted Subsidiaries of Existing Indebtedness;

(d) the incurrence by us, MeriStar Hospitality Corporation or our
respective Restricted Subsidiaries of Indebtedness under Hedging
Obligations that do not increase our Indebtedness or that of MeriStar
Hospitality Corporation or the Restricted Subsidiary, as the case may be,
other than as a result of fluctuations in interest or foreign currency
exchange rates. However, the Hedging Obligations must be incurred for the
purpose of providing interest rate protection with respect to Indebtedness
permitted under the indenture or to provide currency exchange protection in
connection with revenues generated in currencies other than U.S. dollars;

(e) the incurrence or the issuance by us or MeriStar Hospitality
Corporation of Refinancing Indebtedness or Refinancing Disqualified Stock
or the incurrence or issuance by a Restricted

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Subsidiary of Refinancing Indebtedness or Refinancing Disqualified Stock.
However, the Refinancing Indebtedness or Refinancing Disqualified Stock
must be a Permitted Refinancing;

(f) the incurrence by us, MeriStar Hospitality Corporation or any of
our respective Restricted Subsidiaries of intercompany Indebtedness between
or among us, MeriStar Hospitality Corporation and/or any of our respective
Restricted Subsidiaries. However, (1) any subsequent issuance or transfer
of Equity Interests that results in any of the Indebtedness being held by a
person other than a Restricted Subsidiary and (2) any sale or other
transfer of any of the Indebtedness to a person that is not either us,
MeriStar Hospitality Corporation or a Restricted Subsidiary shall be
deemed, in each case, to constitute an incurrence of the Indebtedness by
us, MeriStar Hospitality Corporation or a Restricted Subsidiary, as the
case may be;

(g) the incurrence of Indebtedness represented by the notes and any
guarantee of the notes;

(h) the incurrence by us, MeriStar Hospitality Corporation or any of
our respective Restricted Subsidiaries, in the ordinary course of business
and consistent with past practice, of surety, performance or appeal bonds;

(i) the incurrence by us, MeriStar Hospitality Corporation or any of
our respective Restricted Subsidiaries of Indebtedness (in addition to
Indebtedness permitted by any other clause of this paragraph) in an
aggregate principal amount at any time outstanding not to exceed $50.0
million collectively;

(j) the incurrence by us, MeriStar Hospitality Corporation or any of
our respective Restricted Subsidiaries of Assumed Indebtedness, except
that, after giving effect to the incurrence of Assumed Indebtedness, we,
MeriStar Hospitality Corporation and our respective Restricted Subsidiaries
must be able to incur at least $1.00 of additional Indebtedness under the
tests described in the preceding paragraph;

(k) the issuance of Preferred OP Units by us or any of our Restricted
Subsidiaries as full or partial consideration for the acquisition of
lodging facilities and related assets, except that, after giving effect to
the issuance of the Preferred OP Units, we, MeriStar Hospitality
Corporation and our respective Restricted Subsidiaries must be able to
incur at least $1.00 of additional Indebtedness under the tests described
in the preceding paragraph; and

(l) the incurrence of Indebtedness by us, MeriStar Hospitality
Corporation or any of our respective Restricted Subsidiaries 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 of our obligations or those of MeriStar
Hospitality Corporation or any of our 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 us, MeriStar Hospitality Corporation
and our respective Restricted Subsidiaries on a consolidated basis in
connection with such disposition.

Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries. The indenture provides that neither we nor MeriStar Hospitality
Corporation will, and neither we nor MeriStar Hospitality Corporation will
permit any of our respective Restricted Subsidiaries to, directly or indirectly,
create or otherwise cause or suffer to exist or become effective any encumbrance
or restriction on the ability of any Restricted Subsidiary to:

(a) (1) pay dividends or make any other distributions to us, MeriStar
Hospitality Corporation or any of our respective Restricted Subsidiaries
(A) on its Capital Stock or (B) with respect to any other interest or
participation in, or measured by, its profits, or (2) pay any Indebtedness
owed to us, MeriStar Hospitality Corporation or any of our respective
Restricted Subsidiaries;

(b) make loans or advances or capital contributions to us, MeriStar
Hospitality Corporation or any of our respective Restricted Subsidiaries;
or

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(c) sell, lease or transfer any of its properties or assets to us,
MeriStar Hospitality Corporation or any of our respective Restricted
Subsidiaries,

except for those encumbrances or restrictions existing under or by
reasons of:

(1) Existing Indebtedness as in effect on the date of the
indenture;

(2) any Credit Facility, except that the encumbrances or
restrictions contained in that facility, as amended, modified,
supplemented, restructured, renewed, restated, refunded, replaced or
refinanced or extended from time to time on one or more occasions, must
be no more restrictive than those contained in the Credit Agreement as
in effect on the date of the indenture;

(3) the indenture and the notes;

(4) applicable law;

(5) any instrument governing Indebtedness or Capital Stock of a
person we, MeriStar Hospitality Corporation or any of our respective
Restricted Subsidiaries acquire or of any person that becomes a
Restricted Subsidiary as in effect at the time of the acquisition or the
person becoming a Restricted Subsidiary (except to the extent the
Indebtedness was incurred in connection with or in contemplation of the
acquisition or that person becoming a Restricted Subsidiary), which
encumbrance or restriction is not applicable to any person, or the
properties or assets of any person, other than the person, or the
property or assets of the person, so acquired; provided that the
Consolidated Cash Flow of that person is not taken into account (to the
extent of the restriction) in determining whether the acquisition was
permitted by the terms of the indenture;

(6) restrictions of the nature described in clause (c) above by
reason of customary non-assignment provisions in leases entered into in
the ordinary course of business and consistent with past practice;

(7) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions of the nature
described in clause (c) above on the property so acquired;

(8) Permitted Refinancings, except that the encumbrance or
restrictions contained in the agreements governing the Permitted
Refinancings must be no more restrictive than those contained in the
agreements governing the Indebtedness or Disqualified Stock being
refinanced; or

(9) customary restrictions in security agreements or mortgages
securing Indebtedness of a Restricted Subsidiary to the extent the
restrictions restrict the transfer of the property subject to such
security agreements and mortgages.

Liens. The indenture provides that neither we nor MeriStar Hospitality
Corporation will, and neither we nor MeriStar Hospitality Corporation will
permit any of our respective Restricted Subsidiaries to, secure any Indebtedness
under the Credit Agreement or any other Indebtedness incurred pursuant to clause
(b) of the second paragraph under "-- Incurrence of Indebtedness and Issuance of
Certain Capital Stock" by a Lien (other than a Stock Pledge) unless
contemporaneously therewith effective provision is made to secure the notes
equally and ratably with the Indebtedness under the Credit Agreement or any such
other Indebtedness incurred pursuant to clause (b) of the second paragraph under
"-- Incurrence of Indebtedness and Issuance of Certain Capital Stock" for so
long as the Indebtedness under any of the Credit Agreement or any other such
Indebtedness incurred pursuant to clause (b) of the second paragraph under
"-- Incurrence of Indebtedness and Issuance of Certain Capital Stock" is secured
by such Lien; provided, however, that this covenant shall not become effective
until such time as it is permitted by the Credit Agreement. The indenture
provides that we and MeriStar Hospitality Corporation will use commercially
reasonable efforts to obtain the consent of the required lenders under the
Credit Agreement to the effectiveness of this covenant.

Maintenance of Total Unencumbered Assets. We, MeriStar Hospitality
Corporation and our respective Restricted Subsidiaries will maintain Total
Unencumbered Assets of not less than 150% of the

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aggregate outstanding principal amount of our, MeriStar Hospitality
Corporation's and our Restricted Subsidiaries' Unsecured Indebtedness (including
amounts of Refinancing Indebtedness outstanding pursuant to clause (e) of the
second paragraph of the covenant entitled "Incurrence of Indebtedness and
Issuance of Certain Capital Stock" above or otherwise); provided, however, that
this covenant shall not become effective until such time as it is permitted by
the Credit Agreement. The indenture provides that we and MeriStar Hospitality
Corporation will use commercially reasonable efforts to obtain the consent of
the required lenders under the Credit Agreement to the effectiveness of this
covenant.

Merger, Consolidation or Sale of Assets. The indenture provides that
neither of the issuers nor MeriStar Hospitality Corporation may consolidate or
merge with or into (whether or not such issuer or MeriStar Hospitality
Corporation, as the case may be, is the surviving corporation), or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of our
respective properties or assets in one or more related transactions, to another
corporation, person or entity unless:

(a) such issuer or MeriStar Hospitality Corporation, as the case may
be, is the surviving corporation or the person formed by or surviving the
consolidation or merger (if other than such issuer or MeriStar Hospitality
Corporation, as the case may be) or to which the sale, transfer or other
disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state of the United States or the
District of Columbia;

(b) the person formed by or surviving any such consolidation or merger
(if other than such issuer or MeriStar Hospitality Corporation, as the case
may be) or the person to which the sale, assignment, transfer, lease,
conveyance or other disposition shall have been made assumes all of such
issuer's or MeriStar Hospitality Corporation's respective obligations, as
the case may be, pursuant to a supplemental indenture under the notes or
the guarantee, as the case may be, and the indenture;

(d) such issuer or MeriStar Hospitality Corporation, as the case may
be, or any person formed by or surviving any such consolidation or merger,
or to which the sale, assignment, transfer, lease, conveyance or other
disposition shall have been made will, at the time of the transaction and
after giving pro forma effect thereto as if the transaction had occurred at
the beginning of the applicable four-quarter period, be permitted to incur
at least $1.00 of additional Indebtedness under the tests as set forth in
the first paragraph of the covenant described under the caption
"-- Incurrence of Indebtedness and Issuance of Certain Capital Stock."

Upon any consolidation, merger, lease, conveyance or transfer in accordance
with the foregoing, the successor person formed by the consolidation or into
which such issuer or MeriStar Hospitality Corporation, as the case may be, are
merged or to which the lease, conveyance or transfer is made shall succeed to,
and be substituted for such issuer or MeriStar Hospitality Corporation, as the
case may be, and may exercise all of our respective rights and powers under the
indenture with the same effect as if the successor had been named as such issuer
or MeriStar Hospitality Corporation, as the case may be, therein and thereafter
(except in the case of a lease) the predecessor corporation will be relieved of
all further obligations and covenants under the indenture and the notes.

Transactions with Affiliates. The indenture provides that neither we nor
MeriStar Hospitality Corporation will, and neither we nor MeriStar Hospitality
Corporation will permit any of our respective Restricted Subsidiaries to, sell,
lease, transfer or otherwise dispose of any of its properties or assets to, or
purchase any property or assets from, or enter into any contract, agreement,
understanding, loan, advance or guarantee with, or for the benefit of, any
Affiliate (each of the foregoing, an "Affiliate Transaction"), unless:

(a) the Affiliate Transaction is on terms that are no less favorable
to us, MeriStar Hospitality Corporation or the relevant Restricted
Subsidiary than those that would have been obtained in a comparable
transaction by us, MeriStar Hospitality Corporation or the Restricted
Subsidiary on an arm's-length basis with an unrelated person;

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(b) we deliver to the trustee:

(1) with respect to any Affiliate Transaction involving aggregate
payments in excess of $5.0 million, an officer's certificate certifying
that the Affiliate Transaction complies with clause (a) above and the
Affiliate Transaction is approved by a majority of the disinterested
members of MeriStar Hospitality Corporation's board of directors; and

(2) with respect to any Affiliate Transaction involving aggregate
payments in excess of $10.0 million, other than an Affiliate Transaction
involving the acquisition or disposition of a lodging facility by us,
MeriStar Hospitality Corporation or any of our respective Restricted
Subsidiaries, an opinion as to the fairness to us, MeriStar Hospitality
Corporation or the Restricted Subsidiary from a financial point of view
issued, at our option, by an investment banking firm of national
standing or a qualified appraiser; and

(c) we deliver to the trustee in the case of an Affiliate Transaction
involving the acquisition or disposition of a lodging facility by us,
MeriStar Hospitality Corporation or our respective Restricted Subsidiaries,
and

(1) involving aggregate payments of more than $5.0 million and less
than $25.0 million, an appraisal by a qualified appraiser to the effect
that the transaction is being undertaking at fair market value, or

(2) involving aggregate payments of $25.0 million or more, an
opinion as to the fairness of the transaction to us, MeriStar
Hospitality Corporation or the Restricted Subsidiary from a financial
point of view issued by an investment banking firm of national standing.

However, the following shall not be deemed Affiliate Transactions:

(A) any employment, deferred compensation, stock option,
noncompetition, consulting or similar agreement we, MeriStar Hospitality
Corporation or any of our respective Restricted Subsidiaries enter into in
the ordinary course of business and consistent with our past practice or
that of MeriStar Hospitality Corporation or the Restricted Subsidiary;

(B) transactions between or among us or MeriStar Hospitality
Corporation and/or our respective Restricted Subsidiaries;

(C) the incurrence of fees in connection with the provision of hotel
management services, except that the fees must be paid in the ordinary
course of business and are consistent with past practice; and

(D) Restricted Payments permitted by the provisions of the indenture
described above under the covenant described under the caption
"-- Restricted Payments."

Line of Business. The indenture provides that for so long as any notes are
outstanding, neither we nor MeriStar Hospitality Corporation will, and neither
we nor MeriStar Hospitality Corporation will permit any of our respective
Restricted Subsidiaries to, engage in any business or activity other than a
Hospitality-Related Business.

Payments for Consent. The indenture provides that neither we nor MeriStar
Hospitality Corporation nor any of our respective subsidiaries will, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any holder of any notes of a series for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of the indenture or the notes of that series unless the consideration is offered
to be paid or agreed to be paid to all holders of the notes of that series that
consent, waive or agree to amend in the time frame described in the solicitation
documents relating to the consent, waiver or agreement.

Covenants of MeriStar Finance. The indenture provides that MeriStar
Finance shall not (a) own any assets other than nominal equity capital, (b)
incur any Indebtedness other than the notes and

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guarantees of certain Indebtedness existing on the day the initial notes were
issued and (c) engage in any business other than the co-issuance of the notes
and the guarantees of the Indebtedness described in clause (b).

COVENANTS UPON ATTAINMENT AND MAINTENANCE OF AN INVESTMENT GRADE RATING

The covenants described above under "Covenants -- Liens,"
"Covenants -- Restricted Payments," "Covenants -- Dividend and Other Payment
Restrictions Affecting Restricted Subsidiaries," and "Covenants -- Transactions
with Affiliates" will 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.

REPORTS

Whether or not required by the rules and regulations of the Securities and
Exchange Commission, as long as any notes of any series are outstanding, the
issuers and MeriStar Hospitality Corporation will furnish to the holders of
notes of that series all quarterly and annual financial information that would
be required to be contained in a filing with the Securities and Exchange
Commission on Forms 10-Q and 10-K if the issuers or MeriStar Hospitality
Corporation were required to file the forms, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and,
with respect to the annual information only, a report thereon by our certified
independent accountants. In addition, whether or not required by the rules and
regulations of the Securities and Exchange Commission, the issuers and MeriStar
Hospitality Corporation will submit a copy of all the information with the
Securities and Exchange Commission for public availability (unless the
Securities and Exchange Commission will not accept such a submission) and file
the information with the trustee and make the information available to investors
and securities analysts who request it in writing. In addition, for as long as
the notes of any series are outstanding, the issuers and MeriStar Hospitality
Corporation will continue to provide to holders and to prospective purchasers of
notes of that series the information required by Rule 144A(d)(4).

EVENTS OF DEFAULT AND REMEDIES

The indenture provides that each of the following constitutes an event of
default with respect to any series of notes:

(a) default for 30 days in the payment when due of interest or
liquidated damages, if any, on the notes of that series;

(b) default in payment when due of the principal of or premium, if
any, on the notes of that series at maturity, upon redemption or otherwise,
including the failure to make a payment to purchase notes of that series
tendered pursuant to a Change of Control offer or an Asset Sale offer);

(c) failure by any issuer, MeriStar Hospitality Corporation or any
Restricted Subsidiary to comply with the covenant described under the
caption "-- Covenants -- Merger, Consolidation or Sales of Assets";

(d) failure by any issuer, MeriStar Hospitality Corporation or any
Restricted Subsidiary for 30 days in the performance of any other covenant,
warranty or agreement in the indenture or the notes of that series after
written notice shall have been given to us by the trustee or to us and the
trustee from holders of at least 25% in principal amount of the notes of
that series then outstanding;

(e) the failure to pay at final stated maturity (giving effect to any
applicable grace periods and any extensions to the grace periods) the
principal amount of Non-Recourse Indebtedness of us, MeriStar Hospitality
Corporation or any of our respective Restricted Subsidiaries with an
aggregate principal amount in excess of the lesser of (1) 10% of the total
assets of us, MeriStar Hospitality Corporation and our respective
Restricted Subsidiaries measured as of the end of our most recent fiscal
quarter for which internal financial statements are available immediately
before the date on which the default occurred, determined on a pro forma
basis, and (2) $50 million, and the failure
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continues for a period of 10 days or more, or the acceleration of the final
stated maturity of any such Non-Recourse Indebtedness (which acceleration
is not rescinded, annulled or otherwise cured within 10 days of receipt by
us, MeriStar Hospitality Corporation or the Restricted Subsidiary of notice
of the acceleration);

(f) the failure to pay at final stated maturity (giving effect to any
applicable grace periods and any extensions to the grace periods) the
principal amount of any Indebtedness (other than Non-Recourse Indebtedness)
of us, MeriStar Hospitality Corporation or any Restricted Subsidiary, or
the acceleration of the final stated maturity of any such Indebtedness if
the aggregate principal amount of such Indebtedness, together with the
principal amount of any other Indebtedness in default for failure to pay
principal at final maturity or which has been accelerated, in each case
with respect to which the 10-day period described above has passed,
aggregates $10.0 million or more at any time;

(g) failure by us, MeriStar Hospitality Corporation or any Restricted
Subsidiary to pay final judgments rendered against them (other than
judgment liens without recourse to any of our, MeriStar Hospitality
Corporation's or our respective Restricted Subsidiaries' assets or property
other than assets or property securing Non-Recourse Indebtedness)
aggregating in excess of $10.0 million, which judgments are not paid,
discharged or stayed for a period of 60 days, except for judgments as to
which a reputable insurance company has accepted full liability;

(h) except as permitted by the indenture, any guarantee with respect
to the notes shall be held in a judicial proceeding to be unenforceable or
invalid or shall cease for any reason to be in full force and effect or any
Guarantor (or its successors and assigns), or any person acting on behalf
of such Guarantor (or its successors and assigns), shall deny or disaffirm
its obligations or shall fail to comply with any obligations under its
guarantee; and

(i) specific events of bankruptcy or insolvency with respect to us,
MeriStar Hospitality Corporation, or any of our respective subsidiaries
that would constitute a Significant Subsidiary or any group of our
respective subsidiaries that, taken together, would constitute a
Significant Subsidiary.

If any event of default occurs and is continuing, the trustee or the
holders of at least 25% in principal amount of the then outstanding notes of the
applicable series may declare all the notes of that series to be due and payable
immediately. Notwithstanding the foregoing, in the case of an event of default
arising from specific events of bankruptcy or insolvency, with respect to:

(1) us,

(2) any of our or MeriStar Hospitality Corporation's subsidiaries that
would constitute a Significant Subsidiary,

(3) any group of our or MeriStar Hospitality Corporation's
subsidiaries that, taken together, would constitute a Significant
Subsidiary or

(4) MeriStar Hospitality Corporation,

all outstanding notes will become due and payable without further action or
notice. Under specific circumstances, the holders of a majority in principal
amount of the outstanding notes of any series may rescind any acceleration with
respect to the notes of that series and its consequences. Holders of the notes
of any series may not enforce the indenture or the notes of that series except
as provided in the indenture. Subject to certain limitations, holders of a
majority in principal amount of the then-outstanding notes of any series may
direct the trustee in its exercise of any trust or power. The trustee may
withhold from holders of the notes of any series notice of any continuing
default or event of default, except a default or event of default relating to
the payment of principal or interest on the notes of that series, if it
determines that withholding notice is in their interest.

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The indenture provides that no holder of a note of any series may pursue a
remedy under the indenture unless:

(a) the holder gives to the trustee written notice of a continuing
event of default or the trustee receives the notice from us or MeriStar
Hospitality Corporation;

(b) the holders of at least 25% in principal amount of the
then-outstanding notes of that series make a written request to the trustee
to pursue a remedy;

(c) the holder of a note of that series or holders of notes of that
series offer and, if requested, provide to the trustee indemnity
satisfactory to the trustee against any loss, liability or expense;

(d) the trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and

(e) during the 60-day period the holders of a majority in principal
amount of the then-outstanding notes of that series do not give the trustee
a direction inconsistent with the request.

However, this provision does not affect the right of a holder of a note of any
series to sue for enforcement of any overdue payment on the notes of that
series.

The issuers and MeriStar Hospitality Corporation are required to deliver to
the trustee annually a statement regarding compliance with the indenture,
including with respect to any Restricted Payments made during that year and the
basis upon which the calculations required by the covenants described under the
caption "-- Covenants -- Restricted Payments" were computed (which calculations
may be based on our latest available financial statements). The issuers and
MeriStar Hospitality Corporation are also required upon becoming aware of any
default or event of default, to deliver to the trustee a statement specifying
the default or event of default.

NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS

None of the directors, officers, employees, incorporators or stockholders,
past, present or future, of us, any successor person or any Guarantor, as such,
shall have any liability for any of our obligations under the notes, any
guarantee of 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 of notes by
accepting a note waives and releases all those liabilities. The waiver and
release are part of the consideration for issuance of the notes. The waiver and
release may not be effective to waive or release liabilities under the federal
securities laws and it is the view of the Securities and Exchange Commission
that such a waiver or release is against public policy.

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

The issuers may, at their option and at any time, elect to have all of the
issuers' obligations and the obligations of any Guarantor discharged with
respect to the outstanding notes of any series ("legal defeasance"), except for:

(a) the rights of holders of outstanding notes of that series to
receive payments in respect of the principal of, premium, if any, and
interest on the notes of that series when the payments are due;

(b) the issuers' obligations and those of the Guarantors with respect
to the notes of that series concerning issuing temporary notes,
registration of notes, mutilated, destroyed, lost or stolen notes and the
maintenance of an office or agency for payment and money for security
payments held in trust;

(c) the rights, powers, trusts, duties and immunities of the trustee,
and the issuers' obligations and those of the Guarantors in connection with
the trustee; and

(d) the legal defeasance provisions of the indenture.

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In addition, the issuers may, at their option and at any time, elect to
have their obligations and those of any Guarantor released with respect to
specific covenants that are described in the indenture ("covenant defeasance").
After this release, any omission to comply with those obligations would not
constitute a default or event of default with respect to the notes of the
applicable series. In the event covenant defeasance occurs, some events, but not
non-payment, bankruptcy, receivership, rehabilitation and insolvency events,
described above under "-- Events of Default and Remedies" would no longer
constitute an event of default with respect to the notes of the applicable
series.

In order to exercise either legal defeasance or covenant defeasance,

(a) the issuers must irrevocably deposit with the trustee, for the
benefit of the holders of the notes of the applicable series, cash in U.S.
dollars, non-callable Government Securities, or a combination of cash in
U.S. dollars and non-callable Government Securities, in amounts that will
be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium, if any,
and interest on the outstanding notes of that series on the stated maturity
or on the applicable redemption date, as the case may be, of such principal
or installment of principal of, premium, if any, or interest on the
outstanding notes of that series;

(b) in the case of legal defeasance, the issuers shall have delivered
to the trustee an opinion of counsel (which counsel may be one of their
employees or an employee of one of their subsidiaries) reasonably
acceptable to the trustee confirming that (1) the issuers have received
from, or there has been published by, the Internal Revenue Service a ruling
or (2) since the date of issuance of the notes of the applicable series,
there has been a change in the applicable federal income tax law, in either
case to the effect that, and based thereon the opinion of counsel shall
confirm that, the holders of the outstanding notes of the applicable series
will not recognize income, gain or loss for federal income tax purposes as
a result of such legal defeasance and will be subject to federal income tax
on the same amounts, in the same manner and at the same times as would have
been the case if the legal defeasance had not occurred;

(c) in the case of covenant defeasance, the issuers shall have
delivered to the trustee an opinion of counsel (which counsel may be one of
their employees or an employee of one of their subsidiaries) reasonably
acceptable to the trustee confirming that the holders of the outstanding
notes of the applicable series will not recognize income, gain or loss for
federal income tax purposes as a result of such covenant defeasance and
will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if the covenant
defeasance had not occurred;

(d) no default or event of default shall have occurred and be
continuing with respect to the notes of the applicable series on the date
of the deposit, other than a default or event of default resulting from the
borrowing of funds applied to the deposit, or insofar as events of default
from bankruptcy or insolvency events are concerned, at anytime in the
period ending on the 123rd day after the date of deposit (or greater period
of time in which any such deposit of trust funds may remain subject to
bankruptcy or insolvency laws insofar as those apply to the deposit by the
issuers);

(e) such legal defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, any material
agreement or instrument, other than the indenture, to which any issuer,
MeriStar Hospitality Corporation or any of their respective subsidiaries is
a party or by which any issuer, MeriStar Hospitality Corporation or any of
their respective subsidiaries is bound;

(f) the issuers shall have delivered to the trustee an opinion of
counsel to the effect that, as of the date of the opinion, (1) the trust
funds will not be subject to any rights of holders of Indebtedness other
than the notes of the applicable series and (2) assuming no intervening
bankruptcy of the issuers or MeriStar Hospitality Corporation between the
date of deposit and the 123rd day following the deposit and assuming no
holder of notes of the applicable series is one of the issuers' or MeriStar
Hospitality Corporation's insiders, after the 123rd day following the
deposit, the

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trust funds will not fall under the effects of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors rights
generally under any applicable United States or state law;

(g) the issuers shall have delivered to the trustee an officer's
certificate stating that the deposit was not made by us with the intent of
preferring the holders of the notes of the applicable series over their
other creditors with the intent of defeating, hindering, delaying or
defrauding their creditors or others; and

(h) the issuers shall have delivered to the trustee an officer's
certificate and an opinion of counsel (which counsel may be one of their
employees), each stating that all conditions precedent provided for
relating to such legal defeasance or such covenant defeasance have been
complied with.

SATISFACTION AND DISCHARGE

The indenture will be discharged and will cease to be of further effect,
except as to surviving rights of registration of transfer or exchange of notes
of the applicable series, as to all outstanding notes of any series when either:

(a) all the notes of that series previously authenticated and
delivered, except lost, stolen or destroyed notes of that series that have
been replaced or paid and notes of that series for whose payment money has
previously been deposited in trust or segregated and held in trust by the
issuers and later repaid to the issuers or discharged from the trust, have
been delivered to the trustee for cancellation; or

(b)(1) all the notes of that series not previously delivered to the
trustee for cancellation have become due and payable by their terms or
shall have been called for redemption and the issuers have irrevocably
deposited or caused to be deposited with the trustee as trust funds in
trust for such purpose an amount of money sufficient to pay and discharge
the entire indebtedness on the notes of that series not previously
delivered to the trustee for cancellation or redemption, for the principal
amount, premium and liquidated damages, if any, and accrued interest to the
date of the deposit; (2) the issuers have paid all other sums payable by
the issuers with respect to the notes of the applicable series under the
indenture; and (3) the issuers have delivered irrevocable instructions to
the trustee to apply the deposited money toward the payment of the notes of
the applicable series at maturity or on the redemption date, as the case
may be.

In addition, the issuers must deliver an officer's certificate and an
opinion of counsel stating that all conditions precedent to satisfaction and
discharge of the indenture with respect to the notes of the applicable series
have been complied with.

TRANSFER AND EXCHANGE

A holder may transfer or exchange notes as provided in the indenture. The
registrar (who will initially be the trustee) and the trustee may require a
holder, among other things, to furnish appropriate endorsements and transfer
documents. The issuers may also require a holder to pay any taxes and fees
required by law or permitted by the indenture. The issuers are not required to
transfer or exchange any note selected for redemption. Also, the issuers are not
required to transfer or exchange any note for a period of 15 days before a
selection of notes to be redeemed.

The registered holder of a note will be treated as the owner of it for all
purposes.

AMENDMENT, SUPPLEMENT AND WAIVER

Except as provided in the next two succeeding paragraphs of this
subsection, the indenture or the notes of any series may be amended or
supplemented with the consent of the holders of at least a majority in principal
amount of the then outstanding notes of each series affected by such amendment
or supplement, including consents obtained in connection with a tender offer or
exchange offer for notes of the series affected. In addition, any existing
default or compliance with any provision of the indenture or
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the notes of any series may be waived with the consent of the holders of a
majority in principal amount of the then-outstanding notes of each series
affected by such waiver, including consent obtained in connection with a tender
offer or exchange offer for notes of the series affected.

Without the consent of each holder affected, an amendment or waiver may
not, with respect to any notes held by a non-consenting holder of notes:

(a) reduce the principal amount of notes of any series whose holders
must consent to an amendment, supplement or waiver;

(b) reduce the principal of or change the fixed maturity of any notes
or alter the provisions with respect to the redemption of the notes;

(d) waive a default or event of default in the payment of principal of
or premium, if any, or interest on any notes, except a rescission of
acceleration of the notes by the holders of at least a majority in
aggregate principal amount of the notes of the applicable series and a
waiver of the payment default that resulted from the acceleration;

(e) make any note payable in money other than that stated in the
notes;

(f) make any change in the provisions of the indenture relating to
waivers of past defaults or the rights of holders of notes to receive
payments of principal of or premium, if any, or interest on the notes;

(g) waive a redemption payment with respect to any note;

(h) make any change in the above amendment and waiver provisions;

(i) modify or change any provision of the indenture or the related
definitions affecting the ranking of the notes or any guarantee of the
notes in a manner which adversely affects the holders in any material
respect;

(j) voluntarily release a Guarantor of the notes except as otherwise
provided in the indenture; or

(k) make any change to the covenants described above under the caption
"-- Repurchase at the Option of Holders."

Notwithstanding the foregoing, without the consent of any holder of notes,
the issuers and the trustee may amend or supplement the indenture or the notes

(a) to cure any ambiguity, defect or inconsistency,

(b) to provide for uncertificated notes in addition to or in place of
certificated notes,

(c) to provide for the assumption of an issuer's or MeriStar
Hospitality Corporation's obligations to holders of the notes in the case
of a merger, consolidation or sale of assets,

(d) to release a Guarantor as provided in the indenture,

(e) to make any change that would provide any additional rights or
benefits to the holders of the notes, including providing for guarantees
with respect to the notes under the covenant described under the caption
"-- Guarantees," or that does not adversely affect the legal rights under
the indenture of any such holder, or

(f) to comply with requirements of the Securities and Exchange
Commission in order to effect or maintain the qualification of the
indenture under the Trust Indenture Act of 1939.

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CONCERNING THE TRUSTEE

The indenture contains limitations on the rights of the trustee, should it
become a creditor of an issuer, to obtain payment of claims in specific cases or
to realize on specific property received in respect of any claim as security or
otherwise. The trustee is permitted to engage in other transactions; however, if
it acquires any conflicting interest it must eliminate the conflict within 90
days, apply to the Securities and Exchange Commission for permission to continue
or resign. The holders of a majority in principal amount of the then-outstanding
notes of any series have the right to direct the time, method and place of
conducting any proceeding for exercising any remedy available to the trustee
with respect to that series, with some exceptions. The indenture provides that
if an event of default occurs, and is not cured, the trustee is required, in the
exercise of its powers, to use the degree of care of a prudent man in the
conduct of his own affairs. Subject to these provisions, the trustee is under no
obligation to exercise any of its rights or powers under the indenture at the
request of any holder of notes, unless the holder shall have offered to the
trustee security and indemnity satisfactory to it against any loss, liability or
expense.

DEFINITIONS

We have provided below selected defined terms as used in the indenture.
Please refer to the indenture for a full description of all those terms, as well
as any other capitalized terms used in this description of the notes for which
no definition is provided.

"Adjusted Consolidated Net Tangible Assets" means the total amount of the
assets of MeriStar Hospitality Corporation, us and our respective Restricted
Subsidiaries on a consolidated basis (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 from the total amount of
assets:

(1) all of the current liabilities of MeriStar Hospitality
Corporation, us and our respective Restricted Subsidiaries on a
consolidated basis, excluding intercompany items, and

(2) 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 MeriStar Hospitality Corporation, us and our respective Restricted
Subsidiaries, prepared in conformity with GAAP and filed with the Securities and
Exchange Commission or otherwise provided to the trustee.

"Adjusted Total Assets" means, for any person, the Total Assets for such
person and its Restricted Subsidiaries as of any Transaction Date, as adjusted
to reflect the application of the proceeds of the incurrence of Indebtedness and
issuance of Disqualified Stock on the Transaction Date.

"Affiliate" of any specified person means any other person directly or
indirectly controlling, controlled by or under direct or indirect common control
with the specified person. For purposes of this definition, "control,"
including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with," as used with respect to any person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of the person, whether through the
ownership of voting securities, by agreement or otherwise. However, the
beneficial ownership of 10% or more of the voting securities of a person shall
be deemed to be control.

"Asset Sale" means:

(a) the sale, lease (other than operating leases in respect of
facilities which are ancillary to the operation of our, MeriStar
Hospitality Corporation's or a Restricted Subsidiary's Hospitality-Related
Business properties or assets) conveyance or other disposition of any of
our property or assets or that of MeriStar Hospitality Corporation or any
Restricted Subsidiary, including by way of a sale and leaseback
transaction;

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(b) the issuance or sale of Equity Interests of any of our or MeriStar
Hospitality Corporation's Restricted Subsidiaries; or

other than, with respect to clauses (a), (b) and (c) above, the following:

(1) the sale or disposition of personal property held for sale in the
ordinary course of business;

(2) the sale or disposal of damaged, worn out or other obsolete
property in the ordinary course of business as long as the property is no
longer necessary for the proper conduct of our business or the business of
MeriStar Hospitality Corporation or such Restricted Subsidiary, as
applicable;

(3) the transfer of assets by us or MeriStar Hospitality Corporation
to one of our respective Restricted Subsidiaries or by one of our or
MeriStar Hospitality Corporation's Restricted Subsidiaries to us or
MeriStar Hospitality Corporation or to another one of our or MeriStar
Hospitality Corporation's Restricted Subsidiaries;

(4) (A) the exchange of one or more lodging facilities and related
assets held by us, MeriStar Hospitality Corporation or one of our
respective Restricted Subsidiaries for one or more lodging facilities and
related assets of any person or entity; however, if any other assets are
received by us, MeriStar Hospitality Corporation or the Restricted
Subsidiary in that exchange, the other consideration must be in cash or
Cash Equivalents and the cash or Cash Equivalent consideration shall be
deemed to be cash proceeds of an Asset Sale for the purposes of calculating
"Net Proceeds" and applying Net Proceeds, if any, as described in the
covenant "Asset Sales," or (B) the issuance of OP Units or Preferred OP
Units as full or partial consideration for the acquisition of lodging
facilities and related assets; however, MeriStar Hospitality Corporation's
board of directors must have determined that the terms of any exchange or
acquisition are fair and reasonable and that the fair market value of the
assets received by us or MeriStar Hospitality Corporation, as described in
an opinion of a qualified appraiser, are equal to or greater than the fair
market value of the assets exchanged, sold or issued by us, MeriStar
Hospitality Corporation or one of our respective Restricted Subsidiaries;

(5) any Restricted Payment, permitted under the covenant described
under the caption "-- Covenants -- Restricted Payments" above;

(6) the sale, lease, conveyance or other disposition of all or
substantially all of our or MeriStar Hospitality Corporation's assets in
compliance with the provisions of the indenture described above under the
captions "-- Repurchase at the Option of Holders -- Change of Control" and
"-- Covenants -- Merger, Consolidation or Sale of Assets";

(7) the conversion of or foreclosure on any mortgage or note, but only
if we, MeriStar Hospitality Corporation or one of our respective Restricted
Subsidiaries receives the real property underlying the mortgage or note; or

(8) any transaction or series of related transactions that would
otherwise be an Asset Sale where the fair market value of the assets, sold,
leased, conveyed or otherwise disposed of was less than $5.0 million or an
Event of Loss or related series of Events of Loss under which the aggregate
value of property or assets involved in such Event of Loss or Events of
Loss is less than $5.0 million.

"Assumed Indebtedness" means, with respect to any specified person:

(a) Indebtedness of any other person existing at the time the other
person merged with or into or became a subsidiary of the specified person;
and

(b) Indebtedness encumbering any asset acquired by the specified
person, in each case excluding Indebtedness incurred in connection with, or
in contemplation of that other person merging with or into or becoming a
subsidiary of, the specified person.

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"Capital Lease Obligation" means, at the time any determination of the
obligation is to be made, the amount of the liability in respect of a capital
lease that would at the time be so required to be capitalized on the balance
sheet in accordance with GAAP.

"Capital Stock" means any and all shares, interests, participations, rights
or other equivalents (however designated) of corporate stock, including, without
limitation, with respect to partnerships, partnership interests, whether general
or limited, and any other interest or participation that confers on a person the
right to receive a share of the profits and losses of, or distributions of
assets of, such partnership.

"Cash Equivalents" means:

(a) securities issued or directly and fully guaranteed or insured by
the United States government or any agency or instrumentality of the U.S.
government having maturities of not more than six months from the date of
acquisition;

(b) (1) certificates of deposit and eurodollar time deposits with
maturities of six months or less from the date of acquisition, (2) bankers
acceptances with maturities not exceeding six months from the date of
acquisition and (3) overnight bank deposits, in each case with any domestic
commercial bank having capital and surplus in excess of $500 million;

(c) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (a) and (b) entered
into with any financial institution meeting the qualifications specified in
clause (b) above;

(d) commercial paper or commercial paper master notes having a rating
of at least P-2 or the equivalent of that rating by Moody's Investors
Service, Inc. or at least A-2 or the equivalent of that rating by Standard
& Poor's Corporation and in each case maturing within six months after the
date of acquisition;

(e) money market mutual funds that provide daily purchase and
redemption features; and

(f) corporate debt with maturities of not greater than six months and
with a rating of at least A or the equivalent of that rating by Standard &
Poor's Corporation and a rating of at least A2 or the equivalent of that
rating by Moody's Investors Service, Inc.

"Change of Control" means the occurrence of any of the following:

(a) the sale, lease or transfer, in one or a series of related
transactions, of all or substantially all of our or MeriStar Hospitality
Corporation's assets to any person or group, as that term is used in
Section 13(d)(3) of the Securities Exchange Act;

(b) the adoption of a plan relating to our or MeriStar Hospitality
Corporation's liquidation or dissolution;

(c) the acquisition by any person or group, as that term is used in
Section 13(d)(3) of the Securities Exchange Act, of a direct or indirect
interest in more than 50% of the ownership of MeriStar Hospitality
Corporation or, other than by MeriStar Hospitality Corporation, of us or
the voting power of MeriStar Hospitality Corporation's voting stock or,
other than by MeriStar Hospitality Corporation, of our general partner
interest by way of purchase, merger or consolidation or otherwise, other
than a creation of a holding company that does not involve a change in our
or MeriStar Hospitality Corporation's beneficial ownership as a result of
the transaction;

(d) our or MeriStar Hospitality Corporation's merger or consolidation
with or into another corporation or merger of another corporation into us
or MeriStar Hospitality Corporation with the effect that immediately after
that transaction our or MeriStar Hospitality Corporation's existing
stockholders immediately before the transaction hold, directly or
indirectly, less than 50% of the total voting power of all securities
generally entitled to vote in the election of directors, managers or
trustees of the person surviving the merger or consolidation; or
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(e) the first day on which a majority of the members of MeriStar
Hospitality Corporation's board of directors are not Continuing Directors.

"Consolidated Cash Flow" means, with respect to any person for any period,
the Consolidated Net Income of that person for the period plus:

(a) an amount equal to any extraordinary loss plus any net loss
realized in connection with an Asset Sale, to the extent the losses were
deducted in computing Consolidated Net Income; plus

(b) provisions for taxes based on the income or profits of the person
for the period, to the extent the provision for taxes was included in
computing Consolidated Net Income; plus

(c) Consolidated Interest Expense of the person for the period to the
extent the expense was deducted in computing Consolidated Net Income; plus

(d) Consolidated Depreciation and Amortization Expense of the person
for the period, to the extent deducted in computing Consolidated Net
Income; less

(e) noncash items increasing the Consolidated Net Income for the
period in each case, on a consolidated basis for the person and its
Restricted Subsidiaries, and determined in accordance with GAAP.

Notwithstanding the foregoing, the provision for taxes on the income or
profits of, the depreciation and amortization of and the interest expense of, a
Restricted Subsidiary of the referent person shall be added to Consolidated Net
Income to compute Consolidated Cash Flow (a) only to the extent, and in the same
proportion, that the Net Income of the Restricted Subsidiary was included in
calculating the Consolidated Net Income of that person, (b) only if a
corresponding amount would be permitted at the date of determination to be
dividended to that person by the Restricted Subsidiary without prior
governmental approval (that has not been obtained), and (c) without direct or
indirect restriction under the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that Restricted Subsidiary or its stockholders. Any
calculation of the Consolidated Cash Flow of an individual hotel property shall
be calculated in a manner consistent with the foregoing.

"Consolidated Current Liabilities" as of the date of determination means
the aggregate amount of liabilities of MeriStar Hospitality Corporation, us and
our respective Restricted Subsidiaries, determined on a consolidated basis,
which may properly be classified as current liabilities, including taxes payable
as accrued, on a consolidated basis, after eliminating:

(A) all intercompany items between us, MeriStar Hospitality
Corporation and any of our respective Restricted Subsidiaries; and

(B) all current maturities of long-term Indebtedness,

all as determined in accordance with GAAP consistently applied.

"Consolidated Depreciation and Amortization Expense" means, with respect to
any person for any period, the total amount of depreciation and amortization
expense, including amortization of goodwill and other intangibles but excluding
amortization of prepaid cash expenses that were paid in a prior period, and the
total amount of non-cash charges, other than non-cash charges that represent an
accrual or reserve for cash charges in future periods or which involved a cash
expenditure in a prior period, of such person and its Restricted Subsidiaries
for the period on a consolidated basis as determined in accordance with GAAP.

"Consolidated Interest Expense" means, with respect to any person for any
period, without duplication, the sum of (a) interest expense, whether paid or
accrued, to the extent the expense was deducted in computing Consolidated Net
Income, including amortization of original issue discount, non-cash interest
payments, the interest component of Capital Lease Obligations, and net payments
(if any) pursuant to Hedging Obligations, but excluding amortization of deferred
financing fees, (b) commissions,
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discounts and other fees and charges paid or accrued with respect to letters of
credit and bankers acceptance financing and (c) interest for which such person
or its Restricted Subsidiary is liable, whether or not actually paid, pursuant
to Indebtedness or under a guarantee of Indebtedness of any other person, in
each case, calculated for such Person and its Restricted Subsidiaries for the
period on a consolidated basis as determined in accordance with GAAP.

"Consolidated Net Income" means, with respect to any person for any period,
the aggregate of the Net Income of such person and its Restricted Subsidiaries
for the period, on a consolidated basis, determined in accordance with GAAP (it
being understood that the net income of Restricted Subsidiaries shall be
consolidated with that of a person only to the extent of the proportionate
interest of such person in such Restricted Subsidiaries), except that the
following shall be excluded:

(a) the Net Income of any person that is not a Restricted Subsidiary
or that is accounted for by the equity method of accounting shall be
excluded, whether or not distributed to us or one of our Restricted
Subsidiaries;

(b) the Net Income of any person that is a Restricted Subsidiary and
that is restricted from declaring or paying dividends or other
distributions, directly or indirectly, by operation of the terms of its
charter, any applicable agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation or otherwise shall be included
only to the extent of the amount of dividends or distributions paid to the
referent person or a Restricted Subsidiary;

(c) the Net Income of any person acquired in a pooling-of-interests
transaction for any period before the date of the acquisition shall be
excluded; and

(d) the cumulative effect of changes in accounting principles shall be
excluded.

"Consolidated Net Tangible Assets" as of any date of determination, means
the total amount of assets, less accumulated depreciation and amortization,
allowances for doubtful receivables, other applicable reserves and other similar
items properly deducted in determining net assets, which would appear on a
consolidated balance sheet of MeriStar Hospitality Corporation, our company and
our respective Restricted Subsidiaries, determined on a consolidated basis in
accordance with GAAP, and after giving effect to purchase accounting and after
deducting therefrom Consolidated Current Liabilities and, to the extent
otherwise included, the amounts of:

(a) minority interests in consolidated subsidiaries held by persons
other than us, MeriStar Hospitality Corporation or one of our respective
subsidiaries;

(b) excess of cost over fair value of assets of businesses acquired,
as determined in good faith by MeriStar Hospitality Corporation's board of
directors;

(c) any revaluation or other write-up in book value of assets after
the date of the indenture as a result of a change in the method of
valuation in accordance with GAAP consistently applied;

(d) unamortized debt discount and expenses and other unamortized
deferred charges, goodwill, patents, trademarks, service marks, trade
names, copyrights, licenses, organization or developmental expenses and
other intangible items;

(e) treasury stock; and

(f) cash set apart and held in a sinking or other analogous fund
established for the purpose of redemption or other retirement of Capital
Stock to the extent the obligation is not reflected in Consolidated Current
Liabilities.

"Continuing Directors" means, as of any date of determination, any member
of MeriStar Hospitality Corporation's board of directors who:

(a) was a member of MeriStar Hospitality Corporation's board of
directors on the date of the indenture; or
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(b) was nominated for election or elected to the board of directors
with the affirmative vote of at least a majority of the Continuing
Directors who were members of MeriStar Hospitality Corporation's board of
directors at the time of the nomination or election.

"Credit Agreement" means the Second Amended and Restated Credit Agreement,
dated as of August 3, 1998 and subsequently amended, entered into between and
among us and the lenders party thereto, providing for borrowings and letters of
credit, including any related notes, security documentation, guarantees,
collateral documents, instruments and agreements executed in connection
therewith, in each case as amended, modified, supplemented, restructured,
renewed, restated, refunded, replaced or refinanced or extended, in each case on
a senior basis, from time to time on one or more occasions with respect to us or
to MeriStar Hospitality Corporation.

"Credit Facilities" means, with respect to us or MeriStar Hospitality
Corporation, one or more senior debt facilities (including, without limitation,
the Credit Agreement) or commercial paper facilities with banks or other
institutional lenders providing for borrowings, receivables financings
(including through the sale of receivables to such lenders or to special purpose
entities formed to borrow from such lenders against such receivables) or letters
of credit, in each case, as amended, restated, modified, renewed, refunded,
replaced or refinanced in whole or in part from time to time.

"default" with respect to the notes of any series means any event that is
or with the passage of time or the giving of notice or both would be an event of
default with respect to the notes of that series.

"Disqualified Stock" means any Capital Stock, other than OP Units and
Preferred OP Units, which by its terms, or by the terms of any security into
which it is convertible or for which it is exchangeable, or upon the happening
of any event, matures or is mandatorily redeemable, under a sinking fund
obligation or otherwise, or redeemable at the option of the holder of the stock,
in whole or in part, on or before the first anniversary of the date on which the
notes mature.

"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock, but excluding any debt security that is
convertible into, or exchangeable for Capital Stock.

"Event Of Loss" means, with respect to any property or asset (tangible or
intangible, real or personal), any of the following: (a) any loss, destruction
or damage of the property or asset or (b) any actual condemnation, seizure or
taking by the power of eminent domain or otherwise of the property or asset, or
confiscation of the property or asset or the requisition of the use of the
property or asset.

"Existing Indebtedness" means our Indebtedness and that of MeriStar
Hospitality Corporation and our respective Restricted Subsidiaries in existence
on the date of the indenture after giving effect to the use of proceeds of this
offering of the notes and excluding, for this purpose, amounts outstanding under
the Credit Agreement and other Indebtedness outstanding pursuant to clause (b)
of the second paragraph under "Covenants -- Incurrence of Indebtedness and
Issuance of Certain Capital Stock" as in effect on the date of the indenture.

"Existing Preferred OP Units" means Preferred OP Units issued and
outstanding on the date of the indenture.

"Fixed Charge Coverage Ratio" means with respect to any person for any
period, the ratio of the Consolidated Cash Flow of that person for the period to
the Fixed Charges of such person for the period. If we, MeriStar Hospitality
Corporation or any of our respective Restricted Subsidiaries incurs, assumes,
guarantees or redeems any Indebtedness, other than revolving credit borrowings
that provide working capital in the ordinary course of business, or issues or
redeems Preferred Stock after the commencement of the period for which the Fixed
Charge Coverage Ratio is being calculated but before the date on which the event
for which the calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated
giving pro forma effect to such incurrence, assumption, guarantee or redemption
of Indebtedness, or the issuance or redemption of Preferred Stock, as if the
same had occurred at the beginning of the applicable four-quarter reference
period. For purposes of making the computation referred to above, acquisitions,
dispositions and
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discontinued operations, as determined in accordance with GAAP, that have been
made by us, MeriStar Hospitality Corporation or any of our respective Restricted
Subsidiaries, including all mergers, consolidations and dispositions, during the
four-quarter reference period or after the reference period and on or before the
Calculation Date, shall be calculated on a pro forma basis assuming that all the
acquisitions, dispositions, discontinued operations, mergers, consolidations,
and the reduction of any associated fixed charge obligations resulting
therefrom, had occurred on the first day of the four-quarter reference period.

"Fixed Charges" means, with respect to any person for any period, the sum
of:

(a) Consolidated Interest Expense of that person and its Restricted
Subsidiaries for the period, whether paid or accrued, to the extent the
expense was deducted in computing Consolidated Net Income; and

(b) the product of:

(1) all cash dividend or distribution payments on any series of
Preferred Stock of that person or its Restricted Subsidiaries, other
than Preferred Stock owned by that person or its Restricted
Subsidiaries; multiplied by

(2) a fraction, the numerator of which is one and the denominator
of which is one minus the then-current combined federal, state and local
statutory tax rate of that person, expressed as a decimal, in each case,
on a consolidated basis and in accordance with GAAP; however, if the
cash dividend or distribution on the Preferred Stock is deductible for
federal tax purposes, then the fraction shall be equal to one.

"Funds From Operations" for any period means the Consolidated Net Income of
MeriStar Hospitality Corporation for such period excluding gains or losses from
debt restructurings and sales of depreciable operating property, plus
depreciation on real estate assets and amortization related to real estate
assets and other non-cash charges related to real estate assets, after
adjustments for unconsolidated partnerships and joint ventures plus minority
interests, if applicable (it being understood that the accounts of such person's
Restricted Subsidiaries shall be consolidated only to the extent of such
person's proportionate interest therein).

"GAAP" means generally accepted accounting principles 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 other statements by another
entity as have been approved by a significant segment of the accounting
profession, which were in effect on the date of the indenture.

"Government Securities" means direct 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.

"guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business) or otherwise
incurring, assuming or becoming liable for the payment of any principal, premium
or interest, direct or indirect, in any manner (including, without limitation,
letters of credit and reimbursement agreements in respect thereof), of all or
any part of any Indebtedness or other obligation of another person (including
agreements to keep-well and to purchase assets, goods, securities or services).

"Guarantor" means (a) MeriStar Hospitality Corporation and (b) any
Subsidiary Guarantor, and in each case its successor, if any.

"Hedging Obligations" means, with respect to any person, the obligations of
that person under (a) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements and (b) other agreements or
arrangements designed to protect that person against fluctuations in interest
rates or currency exchange rates.
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"Hospitality-Related Business" means the lodging business and other
businesses necessary for, incident to, in support of, connected with,
complementary to or arising out of the lodging business, including, without
limitation:

(a) developing, managing, operating, improving or acquiring lodging
facilities, restaurants and other food-service facilities and convention or
meeting facilities, and marketing services related to these facilities;

(b) acquiring, developing, operating, managing or improving any real
estate taken in foreclosure, or similar settlement, by us, MeriStar
Hospitality Corporation or any of our respective Restricted Subsidiaries,
or any real estate ancillary or connected to any lodging owned, managed or
operated by us, MeriStar Hospitality Corporation or any of our respective
Restricted Subsidiaries;

(c) owning and managing mortgages in, or other Indebtedness secured by
Liens on, lodging and real estate related or ancillary to lodging; or

(d) other activities related thereto.

"Indebtedness" means, with respect to any person, any indebtedness of that
person, whether or not contingent, (a) in respect of borrowed money, (b)
evidenced by bonds, notes, debentures or similar instruments or letters of
credit, or reimbursement agreements in respect of the above, (c) representing
Capital Lease Obligations or the balance deferred and unpaid of the purchase
price of any property or (d) representing any Hedging Obligations, except any
such balance that constitutes an accrued expense or trade payable, if and to the
extent any of the foregoing indebtedness, other than letters of credit and
Hedging Obligations, would appear as a liability upon a balance sheet of that
person prepared in accordance with GAAP. Indebtedness also includes, to the
extent not otherwise included, the guarantee of any Indebtedness of such person
or any other person.

"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., currently 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 us, notice of which
shall be given to the trustee.

"Investments" means, with respect to any person, all investments by that
person in other persons, including Affiliates, in the forms of loans (including
guarantees), advances or capital contributions, excluding commission, travel and
similar advances to officers and employees made in the ordinary course of
business, purchases or other acquisitions for consideration of Indebtedness,
Equity Interests or other securities and all other items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
If we, MeriStar Hospitality Corporation or any of our respective Restricted
Subsidiaries sells or otherwise disposes of any Equity Interests of any of our
respective direct or indirect Restricted Subsidiaries with the result that,
after giving effect to any sale or disposition, we or MeriStar Hospitality
Corporation, as the case may be, no longer own, directly or indirectly, greater
than 50% of the outstanding common stock of the Restricted Subsidiary, we or
MeriStar Hospitality Corporation, as the case may be, shall be deemed to have
made an Investment on the date of any such sale or disposition equal to the fair
market value of the investments in such Restricted Subsidiary not sold or
disposed of.

"Lien" means, with respect to any asset, or income or profits therefrom,
any mortgage, lien, pledge, charge, security interest or encumbrance of any kind
in respect of the asset, whether or not filed, recorded or otherwise perfected
under applicable law, including any conditional sale or other title retention
agreement, any lease in the nature of a conditional sale or title retention
agreement, any option or other agreement to sell or give a security interest in
and any filing of or agreement to give any financing statement under the Uniform
Commercial Code (or equivalent statutes) of any jurisdiction.

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

"Net Income" means, with respect to any person, the net income (loss) of
that person, determined as provided by GAAP and before any reduction in respect
of Preferred Stock dividends, but excluding, any gain (but not loss), together
with any related provision for taxes on the gain (but not loss) realized in
connection with any Asset Sale, and also excluding any extraordinary gain (but
not loss), together with any related provision for taxes on the extraordinary
gain (but not loss).

"Net Proceeds" means the aggregate cash proceeds received by us, MeriStar
Hospitality Corporation or any of our respective Restricted Subsidiaries in
respect of any Asset Sale, net of the direct costs relating to the Asset Sale,
including, without limitation, legal, accounting and investment banking fees and
sales commissions; and any relocation expenses incurred as a result of the sale,
taxes paid or payable as a result of the sale, after taking into account any
available tax credits or deductions and any tax sharing arrangements; amounts
required to be applied to the repayment of Indebtedness secured by a Lien on the
asset or assets the subject of the Asset Sale and any reserve for adjustment in
respect of the sale price of the asset or assets.

"Non-Recourse Indebtedness" means Indebtedness (a) as to which none of us,
MeriStar Hospitality Corporation or any of our respective Restricted
Subsidiaries (1) provides credit support, other than in the form of a Lien on an
asset serving as security for Non-Recourse Indebtedness of ours or MeriStar
Hospitality Corporation or of any of our respective Restricted Subsidiaries,
under any undertaking, agreement or instrument that would constitute
Indebtedness, (2) is directly or indirectly liable, other than in the form of a
Lien on an asset serving as security for Non-Recourse Indebtedness of ours or
MeriStar Hospitality Corporation or of any of our respective Restricted
Subsidiaries, or (3) constitutes the lender and (b) no default with respect to
which, including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary, would permit (upon
notice, lapse of time or both) any holder of any of our other Indebtedness or
that of MeriStar Hospitality Corporation or any of our respective Restricted
Subsidiaries to declare a default on the other Indebtedness or cause the payment
of the Indebtedness to be accelerated or payable before its stated maturity.

"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.

"OP Units" means limited partnership interests in us or any successor
operating partnership that require the issuer of the interests to pay dividends
or distributions which are tied to dividends paid on the common stock of
MeriStar Hospitality Corporation and which by their terms may be converted into,
or exercised or redeemed for, cash or MeriStar Hospitality Corporation common
stock.

"Permitted Investments" means any (a) Investments in us or MeriStar
Hospitality Corporation, (b) Investments in any Restricted Subsidiary of ours or
of MeriStar Hospitality Corporation, (c) such Investments in Cash Equivalents,
(d) Investments by us, MeriStar Hospitality Corporation or any of our respective
Restricted Subsidiaries in a person, if as a result of such Investment (1) the
person becomes one of our or MeriStar Hospitality Corporation's Restricted
Subsidiaries, or (2) the person is merged, consolidated or amalgamated with or
into, or transfers or conveys substantially all of its assets to, or is
liquidated into, us, MeriStar Hospitality Corporation or one of our respective
Restricted Subsidiaries, (e) Investments in Unrestricted Subsidiaries or
Permitted Joint Ventures, but only if the Investments are in entities solely or
principally engaged in Hospitality-Related Businesses and the aggregate of the
Investments does not exceed the greater of (1) $50.0 million or (2) 5% of
Consolidated Net Tangible Assets collectively, (f) Investments in MeriStar
Investment Partners, L.P. in an aggregate amount not to exceed $10.0 million
collectively and (g) loans to MeriStar Hotels & Resorts, Inc. in an aggregate
amount not to exceed $25.0 million collectively.

"Permitted Joint Venture" means any corporation, partnership, limited
liability company or partnership or other similar entity formed to hold lodging
properties in which we or MeriStar Hospitality Corporation, directly or
indirectly, own less than a 50.1% interest.

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"Permitted Refinancing" means Refinancing Indebtedness or Refinancing
Disqualified Stock, as the case may be, to the extent:

(a) the principal amount of Refinancing Indebtedness or the
liquidation preference amount of Refinancing Disqualified Stock, as the
case may be, does not exceed the principal amount of Indebtedness or the
liquidation preference amount of Disqualified Stock, as the case may be, so
extended, refinanced, renewed, replaced, defeased or refunded, plus the
amount of premiums and reasonable expenses incurred in connection with the
Refinancing;

(b) the Refinancing Indebtedness or Refinancing Disqualified Stock, as
the case may be, is scheduled to mature or is redeemable at the option of
the holder, as the case may be, no earlier than the Indebtedness or
Disqualified Stock, as the case may be, being refinanced;

(c) in the case of Refinancing Indebtedness, the Refinancing
Indebtedness has a Weighted Average Life to Maturity equal to or greater
than the Weighted Average Life to Maturity of the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded;

(d) in the case of Refinancing Disqualified Stock, the Disqualified
Stock has a Weighted Average Life to Mandatory Redemption equal to or
greater than the Weighted Average Life to Mandatory Redemption of the
Disqualified Stock being extended, refinanced, renewed, replaced, defeased
or refunded;

(e) if the Indebtedness or the Disqualified Stock, as the case may be,
being extended, refinanced, renewed, replaced, defeased or refunded is
subordinated or junior in right of payment to the notes, the Refinancing
Indebtedness or Refinancing Disqualified Stock, as the case may be, is
subordinated or junior in right of payment to the notes on terms at least
as favorable to the holders of notes as those contained in the
documentation governing the Indebtedness or the Disqualified Stock, as the
case may be, being extended, refinanced, renewed, replaced, defeased or
refunded; and

(f) the Refinancing Indebtedness or Refinancing Disqualified Stock is
incurred or issued either by us or by a Restricted Subsidiary who is the
obligor on the Indebtedness or Disqualified Stock being extended,
refinanced, renewed, replaced, defeased or refunded.

"Preferred OP Units" means limited partnership interests in us or any
successor operating partnership that require the issuer of the units to pay
regularly scheduled fixed distributions on the units, which are not related to
dividends on MeriStar Hospitality Corporation's common stock, and which by their
terms may be converted into, or exercised or redeemed for, cash or MeriStar
Hospitality Corporation's common stock.

"Preferred Stock" means (a) any Equity Interest with preferential right in
the payment of dividends or distributions or upon liquidation, and (b) any
Disqualified Stock.

"Refinancing Disqualified Stock" means Disqualified Stock issued in
exchange for, or the proceeds of which are used, to extend, refinance, renew,
replace, defease or refund, Disqualified Stock or Indebtedness permitted to be
issued under the tests described in the first paragraph of the covenant
described under the caption "-- Covenants -- Incurrence of Indebtedness and
Issuance of Certain Capital Stock" or Indebtedness referred to in clauses (c),
(e), (g), (i) and (j) of the second paragraph of that covenant.

"Refinancing Indebtedness" means Indebtedness issued in exchange for, or
the proceeds of which are used to extend, refinance renew, replace, defease or
refund, Indebtedness permitted to be incurred under the tests described in the
first paragraph of the covenant described under the caption "-- Covenants --
Incurrence of Indebtedness and Issuance of Certain Capital Stock" or
Indebtedness referred to in clauses (c), (e), (g), (i) and (j) of the second
paragraph of that covenant described under the caption
"-- Covenants -- Incurrence of Indebtedness and Issuance of Certain Capital
Stock."

"Restricted Investments" means an Investment other than a Permitted
Investment.

"Restricted Subsidiary" of a person means any subsidiary of the referent
person that is not an Unrestricted Subsidiary.

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

"Secured Indebtedness" means any Indebtedness or Disqualified Stock secured
by a Lien upon our property or the property of MeriStar Hospitality Corporation
or any of our respective Restricted Subsidiaries, other than Indebtedness under
a Credit Facility secured only by a Stock Pledge.

"Significant Subsidiary" means any subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
under the Securities Act of 1933, as such Regulation is in effect on the date of
the indenture.

"Stock Pledge" means a first priority security interest in the equity
interests of subsidiaries of ours or subsidiaries of MeriStar Hospitality
Corporation.

"subsidiary" means, with respect to any person:

(1) 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, by such person and one or more
subsidiaries of such person or by one or more subsidiaries of such person,
or 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; and

(2) any partnership;

(a) in which such person or one or more subsidiaries of such person
is, at the time, a general partner and owns alone or together with us a
majority of the partnership interest; or

(b) in which such person or one or more subsidiaries of such person
is, at the time, a general partner and which is controlled by such
person in a manner sufficient to permit its financial statements to be
consolidated with the financial statements of such person in conformity
with GAAP and the financial statements of which are so consolidated.

"Subsidiary Debt" means, without duplication, all Unsecured Indebtedness
(including guarantees other than guarantees by Restricted Subsidiaries of
Secured Indebtedness) of which a Restricted Subsidiary other than a Guarantor is
the obligor. A release of the guarantee of a Guarantor which remains a
Restricted Subsidiary shall be deemed to be an incurrence of Subsidiary Debt in
an amount equal to our proportionate interest in the Unsecured Indebtedness of
such Guarantor.

"Subsidiary Guarantor" means (a) each of our subsidiaries that guarantees
our Credit Agreement on the date of the indenture and (b) any Restricted
Subsidiary that becomes a guarantor of the notes under the terms of the
indenture, and its successor, if any.

"Total Assets" means the sum of:

(a) Undepreciated Real Estate Assets; and

(b) all other assets (excluding intangibles) of us, MeriStar
Hospitality Corporation and our respective Restricted Subsidiaries
determined on a consolidated basis.

"Total Unencumbered Assets" as of any date means the sum of:

(a) those Undepreciated Real Estate Assets not securing any portion of
Secured Indebtedness; and

(b) all other assets (but excluding intangibles) of us, MeriStar
Hospitality Corporation and our respective Restricted Subsidiaries not
securing any portion of Secured Indebtedness determined on a consolidated
basis in accordance with GAAP.

"Transaction Date" means, with respect to the incurrence of any
Indebtedness or issuance of Disqualified Stock by us, MeriStar Hospitality
Corporation or any our respective Restricted Subsidiaries,

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the date such Indebtedness is to be incurred or such Disqualified Stock is to be
issued and, with respect to any Restricted Payment, the date such Restricted
Payment is to be made.

"Undepreciated Real Estate Assets" means, as of any date, the cost (being
the original cost to the us or MeriStar Hospitality Corporation or any our
respective Restricted Subsidiaries plus capital improvements) of real estate
assets of ours, MeriStar Hospitality Corporation and our respective Restricted
Subsidiaries on such date, before depreciation and amortization of such real
estate assets, determined on a consolidated basis.

"Unrestricted Subsidiary" means any subsidiary that is, or has been,
designated by MeriStar Hospitality Corporation's board of directors as an
Unrestricted Subsidiary under a board resolution, but only to the extent that
the Subsidiary:

(1) has no Indebtedness other than Non-Recourse Indebtedness;

(2) is not party to any agreement, contract, arrangement or
understanding with us, MeriStar Hospitality Corporation or any of our
respective Restricted Subsidiaries unless the terms of any such agreement,
contract, arrangement or understanding are no less favorable to us,
MeriStar Hospitality Corporation or the Restricted Subsidiary than those
that might be obtained at the same time from persons who are not our
affiliates;

(3) is a person with respect to which neither we nor MeriStar
Hospitality Corporation nor any of our respective Restricted Subsidiaries
has any direct or indirect obligation (A) to subscribe for additional
Equity Interests or (B) to maintain or preserve that person's financial
condition or to cause that person to achieve any specified levels of
operating results, other than under agreements relating to the management
of hotels entered into between Restricted Subsidiaries and Unrestricted
Subsidiaries in the ordinary course of the subsidiaries' business,
consistent with past practice; and

(4) has not guaranteed or otherwise directly or indirectly provided
credit support for any of our Indebtedness or that of MeriStar Hospitality
Corporation or any of our respective Restricted Subsidiaries.

Any designation by MeriStar Hospitality Corporation's board of directors
made after the date of issuance of the notes shall be evidenced to the trustee
by filing with the trustee a certified copy of the board resolution giving
effect to that designation and an officer's certificate certifying that the
designation complied with the foregoing conditions and was permitted by the
covenant described above under the caption "-- Covenants -- Restricted
Payments." If, at any time, any Unrestricted Subsidiary would fail to meet the
foregoing requirements as an Unrestricted Subsidiary, it shall thereafter cease
to be an Unrestricted Subsidiary for purposes of the indenture and any
Indebtedness of that subsidiary shall be deemed to be incurred by one of our or
MeriStar Hospitality Corporation's Restricted Subsidiaries as of that date, and,
if the Indebtedness is not permitted to be incurred as of that date under the
covenant described under the caption "-- Covenants -- Incurrence of Indebtedness
and Issuance of Certain Capital Stock," we and MeriStar Hospitality Corporation
shall be in default of the covenant.

MeriStar Hospitality Corporation's board of directors may at any time
designate any Unrestricted Subsidiary to be a Restricted Subsidiary, but the
designation will be deemed to be an incurrence of Indebtedness by one of our or
MeriStar Hospitality Corporation's Restricted Subsidiaries of any outstanding
Indebtedness of the Unrestricted Subsidiary, and the designation shall only be
permitted if (a) the Indebtedness is permitted under the covenant described
under the caption "-- Covenants -- Incurrence of Indebtedness and Issuance of
Certain Capital Stock," and (b) no default or event of default would be in
existence following the designation.

MeriStar Hospitality Finance Corp. may not under any circumstances be
designated as an Unrestricted Subsidiary.

"Unsecured Indebtedness" means any Indebtedness or Disqualified Stock of
us, MeriStar Hospitality Corporation or any of our respective Restricted
Subsidiaries that is not Secured Indebtedness.

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"Weighted Average Life to Mandatory Redemption" means, when applied to any
Disqualified Stock at any date, the number of years obtained by dividing (a) the
sum of the products obtained by multiplying (1) the amount of each
then-remaining installment, sinking fund, serial maturity or other required
payments of principal, including payment at final maturity, in respect of the
amount by (2) the number of years, calculated to the nearest one-twelfth, that
will elapse between that date and the making of the payment, by (b) the
then-outstanding liquidation preference amount of the Disqualified Stock.

"Weighted Average Life To Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (a) the sum of the
products obtained by multiplying (1) the amount of each then-remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect of the amount, by (2)
the number of years, calculated to the nearest one twelfth, that will elapse
between that date and the making of the payment, by (b) the then-outstanding
principal amount of the Indebtedness.

BOOK-ENTRY, DELIVERY AND FORM

Except as described below, we will initially issue the exchange notes in
the form of one or more registered notes in global form without coupons. We will
deposit each global note on the date of the closing of this exchange offer with,
or on behalf of, The Depository Trust Company in New York, New York, and
register the exchange notes in the name of The Depository Trust Company or its
nominee, or will leave these notes in the custody of the trustee.

DEPOSITORY PROCEDURES

For your convenience, we are providing you with a description of the
operations and procedures of The Depository Trust Company. The operations and
procedures of The Depository Trust Company are solely within the control of its
settlement system however and may change from time to time. We are not
responsible for these operations and procedures and urge you to contact The
Depository Trust Company or its participants directly to discuss these matters.

The Depository Trust Company has advised us that it is a limited purpose
trust company created to hold securities for its participating organizations and
to facilitate the clearance and settlement of transactions in those securities
between its participants through electronic book entry changes in the accounts
of these participants. These direct participants include securities brokers and
dealers, banks, trust companies, clearing corporations and other organizations.
Access to The Depository Trust Company's system is also indirectly available to
other entities that clear through or maintain a direct or indirect, custodial
relationship with a direct participant. The Depository Trust Company may hold
securities beneficially owned by other persons only through its participants and
the ownership interests and transfers of ownership interests of these other
persons will be recorded only on the records of the participants and not on the
records of The Depository Trust Company.

The Depository Trust Company has also advised us that, in accordance with
its procedures, (1) upon deposit of the global notes, it will credit the
accounts of the direct participants with an interest in the global notes, and
(2) it will maintain records of the ownership interests of these direct
participants in the global notes and the transfer of ownership interests by and
between direct participants. The Depository Trust Company will not maintain
records of the ownership interests of, or the transfer of ownership interests by
and between, indirect participants or other owners of beneficial interests in
the global notes. Both direct and indirect participants must maintain their own
records of ownership interests of, and the transfer of ownership interests by
and between, indirect participants and other owners of beneficial interests in
the global notes.

Investors in the global notes may hold their interests in the notes
directly through The Depository Trust Company if they are direct participants in
The Depository Trust Company or indirectly through organizations that are direct
participants in The Depository Trust Company. All interests in a global note may
be subject to the procedures and requirements of The Depository Trust Company.

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The laws of some states require that some persons take physical delivery in
definitive certificated form of the securities that they own. This may limit or
curtail the ability to transfer beneficial interests in a global note to these
persons. Because The Depository Trust Company can act only on behalf of direct
participants, which in turn act on behalf of indirect participants and others,
the ability of a person having a beneficial interest in a global note to pledge
its interest to persons or entities that are not direct participants in The
Depository Trust Company or to otherwise take actions in respect of its
interest, may be affected by the lack of physical certificates evidencing the
interests.

EXCEPT AS DESCRIBED BELOW, OWNERS OF INTERESTS IN THE GLOBAL NOTES WILL NOT
HAVE NOTES REGISTERED IN THEIR NAMES, WILL NOT RECEIVE PHYSICAL DELIVERY OF
NOTES IN CERTIFICATED FORM AND WILL NOT BE CONSIDERED THE REGISTERED OWNERS OR
HOLDERS OF THESE NOTES UNDER THE INDENTURE FOR ANY PURPOSE.

Payments with respect to the principal of and interest on any notes
represented by a global note registered in the name of The Depository Trust
Company or its nominee on the applicable record date will be payable by the
trustee to or at the direction of The Depository Trust Company or its nominee in
its capacity as the registered holder of the global note representing these
notes under the indenture. Under the terms of the indenture, we and the trustee
will treat the person in whose names the notes are registered, including notes
represented by global notes, as the owners of the notes for the purpose of
receiving payments and for any and all other purposes whatsoever. Payments in
respect of the principal and interest on global notes registered in the name of
The Depository Trust Company or its nominee will be payable by the trustee to
The Depository Trust Company or its nominee as the registered holder under the
indenture. Consequently, none of the issuers, the trustee or any of our agents,
or the trustee's agents has or will have any responsibility or liability for (1)
any aspect of The Depository Trust Company's records or any direct or indirect
participant's records relating to, or payments made on account of, beneficial
ownership interests in the global notes or for maintaining, supervising or
reviewing any of The Depository Trust Company's records or any direct or
indirect participant's records relating to the beneficial ownership interests in
any global note or (2) any other matter relating to the actions and practices of
The Depository Trust Company or any of its direct or indirect participants.

The Depository Trust Company has advised us that its current practice, upon
receipt of any payment in respect of securities such as the notes, including
principal and interest, is to credit the accounts of the relevant participants
with the payment on the payment date, in amounts proportionate to their
respective holdings in the principal amount of beneficial interest in the
security as shown on its records, unless it has reasons to believe that it will
not receive payment on the payment date. Payments by the direct and indirect
participants to the beneficial owners of interests in the global note will be
governed by standing instructions and customary practice and will be the
responsibility of the direct or indirect participants and will not be the
responsibility of The Depository Trust Company, the trustee or us.

Neither the issuers nor the trustee will be liable for any delay by The
Depository Trust Company or any direct or indirect participant in identifying
the beneficial owners of the notes and the issuers and the trustee may
conclusively rely on, and will be protected in relying on, instructions from The
Depository Trust Company for all purposes, including with respect to the
registration and delivery, and the respective principal amounts, of the notes.

Transfers between participants in The Depository Trust Company will be
effected in accordance with The Depository Trust Company's procedures, and will
be settled in same day funds.

The Depository Trust Company has advised us that it will take any action
permitted to be taken by a holder of notes only at the direction of one or more
participants to whose account The Depository Trust Company has credited the
interests in the global notes and only in respect of the portion of the
aggregate principal amount of the notes as to which the participant or
participants has or have given that direction. However, if there is an event of
default with respect to the notes, The Depository Trust Company reserves the
right to exchange the global notes for legended notes in certificated form and
to distribute them to its participants.

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Although The Depository Trust Company has agreed to these procedures to
facilitate transfers of interests in the global notes among participants in The
Depository Trust Company, it is under no obligation to perform or to continue to
perform these procedures and may discontinue them at any time. None of the
issuers, the trustee or any of our or the trustee's respective agents will have
any responsibility for the performance by The Depository Trust Company and its
direct or indirect participants of their respective obligations under the rules
and procedures governing their operations.

Exchange of Book-Entry Notes for Certificated Notes

A global note will be exchangeable for definitive notes in registered
certificated form if:

(1) The Depository Trust Company notifies us that it is unwilling or
unable to continue as depository for the global notes and we fail to
appoint a successor depository within 90 days,

(2) The Depository Trust Company ceases to be a clearing agency
registered under the Exchange Act,

(3) we elect to cause the issuance of the certificated notes upon a
notice of the trustee,

(4) a default or event of default under the indenture for the notes
has occurred and is continuing, or

(5) a request to that effect is made but only upon prior written
notice given to the trustee by or on behalf of The Depository Trust Company
in accordance with the indenture.

In all cases, certificated notes delivered in exchange for any global note
or beneficial interests in a global note will be registered in the name, and
issued in any approved denominations, requested by or on behalf of The
Depository Trust Company, in accordance with its customary procedures.

Exchange of Certificated Notes for Book-Entry Notes

Initial notes issued in certificated form may not be exchanged for
beneficial interests in any global note unless the transferor first delivers to
the trustee a written certificate, in the form provided in the indenture, to the
effect that the transfer will comply with the appropriate transfer restrictions
applicable to the notes.

Same Day Settlement and Payment

The indenture requires that payments in respect of the notes represented by
the global notes, including principal, premium, if any, and interest, be made by
wire transfer of immediately available funds to the accounts specified by the
holder of the global notes. With respect to notes in certificated form, the
issuers will make all payments of principal, premium, if any, and interest on
the notes at their office or agency maintained for such purpose within the city
and state of New York, initially the office of the paying agent maintained for
such purpose, or, at their option, by check mailed to the holders thereof at
their respective addresses set forth in the register of holders of notes.
However, the issuers are required to make all payments of principal, premium, if
any, and interest on notes in certificated form the holders of which have given
the issuers wire transfer instructions, by wire transfer of immediately
available funds to the accounts specified by the holders thereof.

The notes represented by the global notes are expected to be eligible to
trade in The Depository Trust Company's Same-Day Funds Settlement System, and
any permitted secondary market trading activity in such notes will, therefore,
be required by The Depository Trust Company to be settled in immediately
available funds. The issuers expect that secondary trading in any certificated
notes will also be settled in immediately available funds. Transfers between
participants in The Depository Trust Company will be effected in accordance with
The Depository Trust Company's procedures, and will be settled in same day
funds, and transfers between participants in Euroclear and Clearstream will be
effected in the ordinary way in accordance with their respective rules and
operating procedures.

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Because of time zone differences, the securities account of a Euroclear or
Clearstream participant purchasing an interest in a global note from a direct or
indirect participant in The Depository Trust Company will be credited, and any
such crediting will be reported to the relevant Euroclear or Clearstream
participant, during the securities settlement processing day, which must be a
business day for Euroclear and Clearstream, immediately following the settlement
date of The Depository Trust Company. The Depository Trust Company has advised
us that cash received in Euroclear or Clearstream as a result of sales of
interests in a global note by or through a Euroclear or Clearstream participant
to a participant in The Depository Trust Company will be received with value on
the settlement date of The Depository Trust Company but will be available in the
relevant Euroclear or Clearstream cash account only as of the business day for
Euroclear or Clearstream following The Depository Trust Company's settlement
date.

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UNITED STATES FEDERAL TAX CONSIDERATIONS

The following discussion summarizes specified United States federal income
and estate tax considerations that may be relevant to the exchange of
outstanding initial notes for exchange notes pursuant to the exchange offer and
to the ownership and disposition of notes by U.S. and non-U.S. holders, each as
defined below. The following discussion does not purport to be a full
description of all United States federal income and estate tax considerations
that may be relevant to the holding or disposition of the notes and does not
address any other taxes that might be applicable to a holder of the notes, such
as tax consequences arising under the tax laws of any state, locality or foreign
jurisdiction. In the opinion of Paul, Weiss, Rifkind, Wharton & Garrison, our
special United States tax counsel, the discussion accurately reflects the
material United States federal income tax consequences to U.S. and non-U.S.
holders of the consummation of the exchange offer and the ownership and
disposition of the exchange notes. The United States Internal Revenue Service
may not take a similar view of these consequences. Further, this discussion does
not address all aspects of federal income and estate taxation that may be
relevant to particular holders in light of their personal circumstances and does
not deal with persons that are subject to special tax rules, such as dealers in
securities or currencies, traders in securities that elect to use a
mark-to-market method of accounting for their securities holdings, financial
institutions, insurance companies, tax-exempt entities, persons holding the
notes as part of a hedging or conversion transaction, a straddle or a
constructive sale and persons whose functional currency is not the United States
dollar. The discussion below assumes that the notes are held as capital assets
within the meaning of section 1221 of the Internal Revenue Code.

If a partnership holds notes, the tax treatment of a partner will generally
depend upon the status of the partner and the activities of the partnership. If
you are a partner of a partnership holding the notes, you should consult your
tax advisor.

The discussion of the United States federal income and estate tax
considerations below is based on currently existing provisions of the Internal
Revenue Code, the applicable Treasury regulations promulgated and proposed under
the Internal Revenue Code, judicial decisions and administrative
interpretations, all of which are subject to change, possibly on a retroactive
basis. Because individual circumstances may differ, you are strongly urged to
consult your tax advisor with respect to your particular tax situation and the
particular tax effects of any state, local, non-United States or other tax laws
and possible changes in the tax laws.

As used in this offering memorandum, a U.S. holder means a beneficial owner
of a note who is, for United States federal income tax purposes:

- a citizen or resident of the United States;

- a corporation or partnership created or organized in or under the laws of
the United States or of any of its political subdivisions;

- an estate the income of which is subject to United States federal income
taxation regardless of its source; or

- a trust if either a court within the United States is able to exercise
primary supervision over the administration of the trust and one or more
United States persons have the authority to control all substantial
decisions of the trust or the trust has a valid election in effect under
applicable Treasury regulations to be treated as a United States person.

As used in this offering memorandum, a non-U.S. holder means a beneficial
owner of a note who is not a U.S. holder.

EXCHANGE OFFER

The exchange of the initial notes for the exchange notes pursuant to the
exchange offer will not be treated as a taxable event to holders. Consequently,
no gain or loss will be realized by a holder upon

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receipt of an exchange note, the holding period of the exchange note will
include the holding period of the initial note exchanged for such exchange note
and the adjusted tax basis of the exchange note will be the same as the adjusted
tax basis, immediately before the exchange, of the initial note exchanged for
the exchange note.

TAX CONSIDERATIONS FOR U.S. HOLDERS

Stated Interest and Original Issue Discount

A U.S. holder generally will be required to include in gross income as
ordinary interest income the stated interest on a note at the time that the
interest accrues or is received, in accordance with the U.S. holder's regular
method of accounting for United States federal income tax purposes.

The notes were issued at a discount from their face amount. If the de
minimis exception described below had not applied, each note would be treated as
having been issued with original issue discount in an amount equal to the excess
of the stated redemption price at maturity of the note over the issue price of
the note, and a U.S. holder of a note would be required to include the original
issue discount in income under the constant yield method of accrual, prior to
the receipt of payments attributable to such income and regardless of the
holder's method of accounting for federal income tax purposes. For purposes of
the foregoing, the stated redemption price at maturity of a note is equal to its
stated principal amount, and the issue price of a note is the first price at
which a substantial amount of the notes were sold. For purposes of determining
issue price, sales to a bond house, broker or similar person or organization
acting in the capacity of an underwriter, placement agent or wholesaler to the
public were ignored. Because the amount of the original issue discount on the
notes was less than a statutorily defined de minimis amount, the amount of
original issue discount on the notes is treated as zero, absent any election by
the holder of notes to treat such amount as original issue discount.

Market Discount

If a U.S. holder purchased a note at initial issuance for an amount that
was less than its issue price and a de minimis exception did not apply, the
difference is treated as market discount. Unless the U.S. holder makes an
election to include market discount in income as it accrues, any partial
principal payment on the note, gain realized on the sale, exchange or retirement
of the note and unrealized appreciation on some nontaxable dispositions of the
note will be treated as ordinary income to the extent of the market discount
that has not been previously included in income and that is treated as having
accrued on the note prior to the payment or disposition. A U.S. holder also
might be required to defer all or a portion of the interest expense on any
indebtedness incurred or continued to purchase or carry the note, unless the
U.S. holder has made an election to include the market discount in income as it
accrues. Unless the U.S. holder elects to treat market discount as accruing on a
constant yield method, market discount will be treated as accruing on a
straight-line basis over the term of the note. An election made to include
market discount in income as it accrues will apply to all debt instruments
acquired by the U.S. holder on or after the first day of the taxable year to
which the election applies and may be revoked only with the consent of the
Internal Revenue Service.

Sale, Exchange or Retirement of the Notes

A U.S. holder's tax basis in a note generally will be its cost, increased
by any accrued market discount included in income and decreased by any payments
that are not payments of stated interest. A U.S. holder generally will recognize
gain or loss on the sale, exchange, retirement or other taxable disposition of a
note in an amount equal to the difference between the amount of cash plus the
fair market value of any property received, other than any amount received in
respect of accrued interest, which will be taxable as ordinary interest income
if not previously included in income, and the U.S. holder's tax basis in the
note. Subject to the discussion of market discount above, gain or loss
recognized on the sale, exchange, retirement or other taxable disposition of a
note, including amounts attributable to de minimisoriginal issue discount,
generally will be capital gain or loss. In the case of a noncorporate

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U.S. holder, the federal income tax rate applicable to capital gains will depend
upon the holder's holding period for the notes, with a preferential rate
available for notes held for more than one year, and upon the holder's marginal
tax rate for ordinary income. The deductibility of capital losses is subject to
limitations.

Tax Considerations For Non-U.S. Holders

Generally, payments of principal or interest on the notes by us or our
paying agent to a non-U.S. holder will not be subject to U.S. federal income or
income withholding tax, if, in the case of interest:

- the non-U.S. holder does not actually own, and is not deemed to own under
any applicable Treasury regulations, 10% or more of the capital or
profits interests in our company;

- the non-U.S. holder is not, for United States federal income tax
purposes, a controlled foreign corporation related to us either through
actual ownership or deemed to be related to us through ownership under
applicable Internal Revenue Code rules;

- the non-U.S. holder is not a bank whose receipt of interest is described
in section 881(c)(3)(A) of the Internal Revenue Code; and

- either (A) the non-U.S. holder provides us or our agent with an Internal
Revenue Service Form W-8 BEN, or a suitable substitute form, signed under
penalties of perjury that includes its name and address and certifies as
to its non-United States status in compliance with applicable law and
Treasury regulations or (B) a securities clearing organization, bank or
other financial institution that holds customers' securities in the
ordinary course of its trade or business holds the note on behalf of the
beneficial owner and provides a statement to us or our agent signed under
penalties of perjury in which the organization, bank or financial
institution certifies that the form or suitable substitute has been
received by it from the non-U.S. holder or from another financial
institution acting on behalf of the non-U.S. holder and furnishes us or
our agent with a copy.

In the case of notes held by a foreign partnership, the certification
described above normally is provided by the partners as well as by the foreign
partnership and the partnership provides other specified information. Other
methods might be available to satisfy the certification requirements described
above, depending upon the circumstances applicable to the non-U.S. holder.

If these requirements cannot be met and the requirements applicable to
treatment of the interest as effectively connected with the conduct of a United
States trade or business described below are not met, a non-U.S. holder will be
subject to United States federal income withholding tax at a rate of 30% with
respect to payments of interest on the notes, unless the non-US holder provides
us with a properly executed Internal Revenue Service Form W-8BEN (or successor
form) claiming an exemption from or reduction in withholding under an applicable
tax treaty.

A non-U.S. holder generally will not be subject to United States federal
income or income withholding tax on gain realized on the sale, exchange,
redemption, retirement or other disposition of a note, unless the non-U.S.
holder is an individual who is present in the United States for 183 days or more
in the taxable year of the disposition, and other applicable conditions are met,
or the gain is effectively connected with the conduct by the non-U.S. holder of
a trade or business in the United States.

Notwithstanding the above, if a non-U.S. holder is engaged in a trade or
business in the United States and if interest on the note or gain realized on
the disposition of the note is effectively connected with the conduct of the
trade or business, the non-U.S. holder usually will be subject to regular United
States federal income tax on the interest or gain in the same manner as if it
were a U.S. holder, unless an applicable treaty provides otherwise. In addition,
if the non-U.S. holder is a foreign corporation, it may be subject to a branch
profits tax equal to 30%, or a lower rate provided by an applicable treaty, of
its effectively connected earnings and profits for the taxable year, with
specified adjustments. For this purpose, interest on a note will be included in
the foreign corporation's earnings and profits. Even though the effectively
connected income is subject to income tax, and may be subject to the branch
profits tax, it

155
161

generally is not subject to income withholding if the non-U.S. holder delivers a
properly executed Internal Revenue Service Form W-8 ECI (or successor form) to
the payor.

A note held by an individual non-U.S. holder who at the time of death is
not a United States citizen or resident, as defined for United States federal
estate tax purposes, will not be subject to United States federal estate
taxation as a result of the individual's death unless (A) the individual
actually owns, or is deemed to own under any applicable Treasury regulations,
10% or more of the capital or profits interests in our Company or (B) interest
payments with respect to the note would have been, if received at the time of
the individual's death, effectively connected with the conduct by the individual
of a trade or business in the United States.

TAX CONSIDERATIONS APPLICABLE TO U.S. HOLDERS AND NON-U.S. HOLDERS

Information Reporting and Backup Withholding

Noncorporate U.S. holders generally will be subject to information
reporting and might be subject to a backup withholding tax with respect to
payments on, and the proceeds of disposition of, a note. Backup withholding will
apply only if the U.S. holder:

- fails to furnish its taxpayer identification number which, for an
individual, would be his Social Security number;

- furnishes an incorrect taxpayer identification number;

- is notified by the Internal Revenue Service that it has failed to
properly report payments of interest or dividends; or

- in some circumstances, fails to certify, under penalties of perjury, that
it has furnished a correct taxpayer identification number and has not
been notified by the Internal Revenue Service that it is subject to
backup withholding for failure to report interest and dividend payments.

Backup withholding and information reporting generally will not apply to
payments made by us or our paying agent on a note to a non-U.S. holder if the
certification described under "Tax Considerations for Non-U.S. Holders" is
provided or the non-U.S. holder otherwise establishes an exemption, and the
payor does not have actual knowledge that the holder is a U.S. holder or that
the conditions of any other exemption are not, in fact, satisfied. The payments
of proceeds from the disposition of a note to or through a non-United States
office of a broker, as defined in applicable Treasury regulations, that is (A) a
United States person, (B) a controlled foreign corporation for United States
federal income tax purposes, (C) a foreign person 50% or more of whose gross
income from all sources for the 3 prior years is from activities effectively
connected with the conduct of a United States trade or business or (D) a foreign
partnership, if at any time during its tax year, either more than 50% of its
income or capital interests are owned by U.S. holders or the partnership is
engaged in the conduct of a United States trade or business, will be subject to
information reporting requirements unless the broker has documentary evidence in
its files of the holder's non-U.S. holder status and has no actual knowledge to
the contrary or the non-U.S. holder otherwise establishes an exemption. Backup
withholding normally will not apply to any payment of the proceeds from the sale
of a note made to or through a foreign office of a broker; however, backup
withholding might apply if the broker has actual knowledge that the payee is a
U.S. holder. Payments of the proceeds from the sale of a note to or through the
United States office of a broker are subject to information reporting and
possible backup withholding unless the holder certifies, under penalties of
perjury, that it is not a U.S. holder and that other conditions are met or the
holder otherwise establishes an exemption, provided that the broker does not
have actual knowledge that the holder is a U.S. holder or that the conditions of
any other exemption are not, in fact, satisfied.

Holders of notes should consult their tax advisors regarding the
application of backup withholding in their particular situation, the
availability of an exemption from backup withholding and the procedure for
obtaining an exemption, if available.

156
162

The amount of any backup withholding will be allowed as a credit against
the holder's United States federal income tax liability and may entitle the
holder to a refund if the required information is furnished to the Internal
Revenue Service.

THE FOREGOING DISCUSSION IS FOR GENERAL INFORMATION ONLY AND IS NOT TAX
ADVICE. ACCORDINGLY, YOU SHOULD CONSULT YOUR TAX ADVISOR AS TO THE PARTICULAR
TAX CONSEQUENCES TO YOU OF THE EXCHANGE OFFER AND OF HOLDING AND DISPOSING OF
THE NOTES INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL, OR NON-
UNITED STATES TAX LAWS AND ANY RECENT OR PROSPECTIVE CHANGES IN APPLICABLE TAX
LAWS.

ERISA CONSIDERATIONS

The Employee Retirement Income Security Act of 1974 imposes requirements on
employee benefit plans subject to Title I of ERISA, which we refer to as "ERISA
plans," and on those persons who are fiduciaries of ERISA plans. Investments by
ERISA plans are subject to ERISA's general fiduciary requirements, including the
requirement of investment prudence and diversification and the requirement that
an ERISA plan's investments be made in accordance with documents governing the
ERISA plan.

Section 406 of ERISA and Section 4975 of the Internal Revenue Code prohibit
certain transactions involving the assets of an ERISA plan, as well as those
plans that are not subject to ERISA but that are subject to Section 4975 of the
Internal Revenue Code, such as individual retirement accounts, which together
with ERISA plans, we refer to as the "plans," and specified persons, referred to
as "parties in interest" or "disqualified persons," having specified
relationships to such plans, unless a statutory or administrative exemption is
applicable to the transaction. A party in interest or disqualified person who
engages in a prohibited transaction may be subject to excise taxes and to other
penalties and liabilities under ERISA and the Internal Revenue Code. In
addition, the fiduciary of the plan that engaged in a prohibited transaction may
be subject to penalties and liabilities under ERISA and the Internal Revenue
Code.

The fiduciary of a plan that proposes to exchange initial notes for
exchange notes should consider, among other things, whether such exchange of
initial notes for exchange notes may involve (1) a direct or indirect extension
of credit to a party in interest or to a disqualified person, (2) the sale or
exchange of any property between a plan and a party in interest or disqualified
person or (3) the transfer to, or use by or for the benefit of, a party in
interest or disqualified person, of any plan assets. Depending upon the identity
of the plan fiduciary making the decision to acquire or hold the notes, or
exchange the notes for exchange notes, on behalf of a plan, Prohibited
Transaction Class Exemption ("PTCE") 91-38 (relating to investments by bank
collective investment funds), PTCE 84-14 (relating to transactions effected by a
"qualified professional asset manager"), PTCE 95-60 (relating to investments by
an insurance company general account), PTCE 96-23 (relating to transactions
directed by an in-house professional asset manager) or PTCE 90-1 (relating to
investments by insurance company pooled separate accounts), could provide an
exemption from the prohibited transaction provisions of ERISA and Section 4975
of the Internal Revenue Code, although there can be no assurance that all of the
conditions of such exemptions will be satisfied.

Federal, state, local or non-United States laws governing the investment
and management of the assets of governmental plans and other plans which are not
subject to ERISA or the Internal Revenue Code may contain fiduciary and
prohibited transaction requirements similar to those under Title I of ERISA and
Section 4975 of the Internal Revenue Code, which we refer to as "similar laws."
Accordingly, fiduciaries of such plans, in consultation with their counsel,
should consider the impact of their respective laws on investments in the notes
and the considerations discussed above, to the extent applicable.

Because of the above, the initial notes should not be exchanged for
exchange notes by any person investing "plan assets" of any plan or employee
benefit plan subject to similar laws, unless such exchange of initial notes for
exchange notes will not constitute a non-exempt prohibited transaction under
ERISA and the Internal Revenue Code or similar violation of any applicable
similar laws.

157
163

Accordingly, by acceptance of an exchange note, each holder and subsequent
transferee of an exchange note will be deemed to have represented and warranted
that either (1) no portion of the assets used by such purchaser or transferee to
acquire the exchange notes constitutes assets of any employee benefit plan
subject to Title I of ERISA or Section 4975 of the Internal Revenue Code or the
applicable provisions of any similar law or (2) the exchange of the initial
notes for the exchange notes by such purchaser or transferee will not constitute
a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975
of the Internal Revenue Code or similar violation of any applicable similar
laws.

Due to the complexity of these rules and the penalties that may be imposed
upon persons involved in non-exempt prohibited transactions, it is particularly
important that fiduciaries, or other persons, considering exchanging initial
notes for the exchange notes on behalf of, or with the assets of, any plan or
employee benefit plan subject to similar laws, consult with their counsel
regarding the potential applicability of ERISA, Section 4975 of the Internal
Revenue Code and any similar laws to such investment and whether an exemption
would be applicable to the exchange of the initial notes for exchange notes.

PLAN OF DISTRIBUTION

Each broker-dealer that receives exchange notes for its own account
pursuant to the exchange offer in exchange for initial notes acquired by such
broker-dealer as a result of market making or other trading activities may be
deemed to be an "underwriter" within the meaning of the Securities Act and,
therefore, must deliver a prospectus meeting the requirements of the Securities
Act in connection with any resales, offers to resell or other transfers of the
exchange notes received by it in connection with the exchange offer.
Accordingly, each such broker-dealer must acknowledge that it will deliver a
prospectus meeting the requirements of the Securities Act in connection with any
resale of such exchange notes. The letter of transmittal states that by
acknowledging that it will deliver and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of exchange notes received in exchange for initial notes where such
initial notes were acquired as a result of market-making activities or other
trading activities.

We will not receive any proceeds from any sale of exchange notes by
broker-dealers. Exchange notes received by broker-dealers for their own account
pursuant to the exchange offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the exchange notes or a combination of such methods of
resale, at market prices prevailing at the time of resale, at prices related to
such prevailing market prices or negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such exchange notes. Any
broker-dealer that resells exchange notes that were received by it for its own
account pursuant to the exchange offer and any broker or dealer that
participates in a distribution of such exchange notes may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit of any
such resale of exchange notes and any commissions or concessions received by any
such persons may be deemed to be underwriting compensation under the Securities
Act. The letter of transmittal states that by acknowledging that it will deliver
and by delivering a prospectus, a broker-dealer will not be deemed to admit that
it is an "underwriter" within the meaning of the Securities Act.

For a period of 180 days after the completion of the exchange offer, we
will promptly send additional copies of this prospectus and any amendment or
supplement to this prospectus to any broker-dealer that requests these documents
in the letter of transmittal. We have agreed to pay all expenses incident to the
exchange offer, other than commissions or concessions of any brokers or dealers,
and will indemnify the holders of the notes, including any broker-dealers,
against specific liabilities, including liabilities under the Securities Act.

158
164

LEGAL MATTERS

Christopher L. Bennett, Esq., Vice President, Legal of MeriStar Hospitality
Corporate has passed upon the validity of the exchange notes. Paul, Weiss,
Rifkind, Wharton & Garrison, New York, New York, has passed upon specific tax
matters with respect to the exchange offer.

EXPERTS

The financial statements of MeriStar Hospitality Operating Partnership,
L.P. and subsidiaries as of December 31, 2000 and 1999, and for each of the
years in the three-year period ended December 31, 2000 and the financial
statement schedule of real estate and accumulated depreciation have been
included herein in this registration statement in reliance upon the report of
KPMG LLP, independent certified public accountants, appearing elsewhere herein,
and upon the authority of said firm as experts in accounting and auditing.

The financial statements of MeriStar Hospitality Corporation and
subsidiaries as of December 31, 2000 and 1999, and for each of the years in the
three-year period ended December 31, 2000 and the financial statement schedule
of real estate and accumulated depreciation have been incorporated by reference
in this registration statement in reliance upon the report of KPMG LLP,
independent certified public accounts, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing.

The financial statements of FelCor Lodging Trust Incorporated, DJONT
Operations, L.L.C. and FelCor Lodging Limited Partnership incorporated in this
prospectus by reference to the Annual Reports on Form 10-K of FelCor Lodging
Trust Incorporated and FelCor Lodging Limited Partnership for the year ended
December 31, 2000 have been so incorporated in reliance on the reports of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.

The combined financial statements of Bristol Hotels & Resorts Tenant
Companies incorporated in this prospectus by reference from FelCor's Annual
Report on Form 10-K for the year ended December 31, 2000 have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report, which is
incorporated herein by reference, and have been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.

159
165

AVAILABLE INFORMATION

We have filed a registration statement on Form S-4 with the Securities and
Exchange Commission covering the exchange notes, and this prospectus is part of
our registration statement. For further information on us and the exchange
notes, you should refer to our registration statement and its exhibits. This
prospectus summarizes material provisions of contracts and other documents that
we refer you to. Because the prospectus may not contain all the information that
you may find important, you should review the full text of these documents. We
have included copies of these documents as exhibits to our registration
statement.

When the exchange offer is completed, we will be subject to the information
requirements of the Securities Exchange Act and will be required to file reports
and other information with the Securities and Exchange Commission. You can
inspect and copy at prescribed rates the reports and other information that we
file with the Securities and Exchange Commission at the public reference
facilities maintained by the Securities and Exchange Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and also at the
regional offices of the Securities and Exchange Commission located at 7 World
Trade Center, Suite 1300, New York, New York 10048 and the Citicorp Center at
500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. You may
obtain information on the operation of the public reference facilities by
calling the Securities and Exchange Commission at 1-800-SEC-0330. The Securities
and Exchange Commission also maintains an Internet web site at
http://www.sec.gov that contains reports, proxy and information statements and
other information. You can also obtain copies of these materials from us upon
request.

In addition, the indenture requires that, whether or not we are subject to
the reporting requirements of Section 13 or 15(d) of the Securities Exchange
Act, we will provide the trustee and noteholders, and will, if permitted, file
with the Securities and Exchange Commission, all quarterly and annual reports
and other information, documents and reports specified in Sections 13 and 15(d)
of the Securities Exchange Act including a "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and, with respect to the
annual information only, a report on it by its certified independent
accountants, for so long as any of the exchange notes are outstanding. We will
also make the information available to investors and securities analysts who
request it in writing. In addition, for so long as any of the initial notes or
the exchange notes remain outstanding, we have agreed to make available to any
prospective purchaser of these notes or owner of these exchange notes in
connection with any sale of the exchange notes the information required by Rule
144A(d)(4) under the Securities Act. Any requests should be directed to MeriStar
Hospitality Corporation at 1010 Wisconsin Avenue, N.W., Washington, D.C. 20007,
Attention Christopher L. Bennett, Vice President, Legal and Secretary;
Telephone: (202) 295-1000.

WE HAVE NOT AUTHORIZED ANYONE TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ABOUT OUR COMPANY THAT DIFFERS FROM OR ADDS TO THE INFORMATION IN
THIS PROSPECTUS OR IN OUR DOCUMENTS OR THE DOCUMENTS THAT WE PUBLICLY FILE WITH
THE SECURITIES AND EXCHANGE COMMISSION. THEREFORE, IF ANYONE DOES GIVE YOU
DIFFERENT OR ADDITIONAL INFORMATION, YOU SHOULD NOT RELY ON IT.

THE INFORMATION CONTAINED IN THIS PROSPECTUS SPEAKS ONLY AS OF ITS DATE
UNLESS THE INFORMATION SPECIFICALLY INDICATES THAT ANOTHER DATE APPLIES.

160
166

INCORPORATION BY REFERENCE

The Securities and Exchange Commission allows MeriStar Hospitality
Corporation to "incorporate by reference" the information it files with them,
which means that MeriStar Hospitality Corporation can disclose important
business and financial information about us to you that is not included in or
delivered with this prospectus by referring you to those documents.

We incorporate by reference, the following filings of MeriStar Hospitality
Corporation:

- Annual Report on Form 10-K for the fiscal year ended December 31, 2000,
filed on March 6, 2001;

- Quarterly Report on Form 10-Q for the quarter ended March 31, 2001, filed
on May 14, 2001;

- Quarterly Report on Form 10-Q for the quarter ended June 30, 2001, filed
on August 10, 2001;

- Current Report on Form 8-K, filed on January 18, 20001, February 5, 2001,
May 10, 2001 and August 29, 2001; and

- any other filing we will make with the Securities and Exchange Commission
under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act
of 1934 following the date of this prospectus and prior to the
termination of the exchange offer.

YOU MAY REQUEST A COPY OF THESE FILINGS, AT NO COST, BY WRITING OR
TELEPHONING US AT THE FOLLOWING ADDRESS:

c/o Christopher L. Bennett, Vice President, Legal and Secretary
MeriStar Hospitality Corporation
1010 Wisconsin Avenue, N.W.
Washington, D.C. 20007
Telephone requests may be directed to (202) 295-1000.

We incorporate by reference FelCor Lodging Trust Incorporated's:

- Annual Report on Form 10-K for the fiscal year ended December 31, 2000
(only Item 6 -- Selected Financial Data, Item 7 -- Management's
Discussion and Analysis of Financial Condition and Results of Operations,
Item 7A -- Qualitative and Quantitative Disclosures About Market Risk and
Item 8 -- Financial Statements and Supplementary Data);

- Quarterly Report on Form 10-Q for the quarterly period ended March 31,
2001 (only Item 1 -- Financial Statements, Item 2 -- Management's
Discussion and Analysis of Financial Condition and Results of Operations
and Item 3 -- Qualitative and Quantitative Disclosures About Market
Risk); and

- Quarterly Report on Form 10-Q/A for the quarterly period ended June 30,
2001 (only Item 1 -- Financial Statements, Item 2 -- Management's
Discussion and Analysis of Financial Condition and Results of Operations
and Item 3 -- Quantitative Disclosures About Market Risk).

We incorporate by reference FelCor Lodging Limited Partnership's Annual
Report on Form 10-K for the fiscal year ended December 31, 2000 (only Item
6 -- Selected Financial Data, Item 7 -- Management's Discussion and Analysis of
Financial Condition and Results of Operations, Item 7A -- Qualitative and
Quantitative Disclosures About Market Risk and Item 8 -- Financial Statements
and Supplementary Data).

161
167

INDEX TO FINANCIAL STATEMENTS

MERISTAR HOSPITALITY CORPORATION
FELCOR LODGING TRUST INCORPORATED

The financial statements of MeriStar Hospitality Corporation and FelCor
Lodging Trust Incorporated are incorporated in this document by reference to
each of the company's Annual Reports on Form 10-K for the year ended December
31, 2000 and Quarterly Reports on Form 10-Q or Form 10-Q/A for the six months
ended June 30, 2001. The financial statements of FelCor Lodging Limited
Partnership are incorporated by reference to its Annual Report on Form 10-K for
the year ended December 31, 2000. See "Incorporation by Reference."

MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

<Table>
<Caption>
PAGE
----

Condensed Consolidated Balance Sheets -- June 30, 2001
(unaudited) and December 31, 2000......................... F-2
Condensed Consolidated Statements of Operations and
Comprehensive Income -- Six Months Ended June 30, 2001 and
2000 (unaudited).......................................... F-3
Condensed Consolidated Statements of Partners'
Capital -- Six Months Ended June 30, 2001 and 2000
(unaudited)............................................... F-4
Condensed Consolidated Statements of Cash Flows -- Six
Months Ended June 30, 2001 and 2000 (unaudited)........... F-5
Notes to Condensed Consolidated Financial Statements........ F-6
Independent Auditors' Report................................ F-16
Consolidated Balance Sheets -- December 31, 2000 and 1999... F-17
Consolidated Statements of Operations -- Years Ended
December 31, 2000, 1999 and 1998.......................... F-18
Consolidated Statements of Partners' Capital -- Years Ended
December 31, 2000, 1999 and 1998.......................... F-19
Consolidated Statements of Cash Flows -- Years Ended
December 31, 2000, 1999 and 1998.......................... F-20
Notes to Consolidated Financial Statements.................. F-21
Schedule III -- Real Estate and Accumulated Depreciation.... F-43

FELCOR LODGING LIMITED PARTNERSHIP
Consolidated Balance Sheets -- June 30, 2001 (Unaudited) and
December 31, 2000......................................... F-47
Consolidated Statements of Operations -- For the Six Months
Ended June 30, 2001 and 2000 (Unaudited).................. F-48
Consolidated Statements of Cash Flows -- For the Six Months
Ended June 30, 2001 and 2000 (Unaudited).................. F-49
Notes to Consolidated Financial Statements.................. F-50
</Table>

F-1
168

MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)

<Table>
<Caption>
JUNE 30, DECEMBER 31,
2001 2000
------------- -----------------
(UNAUDITED)

ASSETS

Investments in hotel properties............................. $3,209,185 $3,193,730
Accumulated depreciation.................................... (342,051) (287,229)
---------- ----------
2,867,134 2,906,501
Cash and cash equivalents................................... 20,550 242
Accounts receivable, net.................................... 57,040 2,833
Prepaid expenses and other.................................. 15,765 2,767
Note receivable from OpCo................................... 36,000 --
Due from OpCo............................................... 10,893 22,221
Investments in and advances to affiliates................... 41,714 42,196
Restricted cash............................................. 20,201 19,918
Intangible assets, net of accumulated amortization of $6,205
and $5,575................................................ 15,684 9,822
---------- ----------
$3,084,981 $3,006,500
========== ==========

LIABILITIES, MINORITY INTERESTS AND PARTNERS' CAPITAL

Accounts payable, accrued expenses and other liabilities.... $ 126,870 $ 72,197
Accrued interest............................................ 44,352 28,365
Income taxes payable........................................ 1,420 921
Distributions payable....................................... 24,245 24,581
Deferred income taxes....................................... 8,409 8,113
Interest rate swaps......................................... 7,110 --
Notes payable to MeriStar................................... 356,923 356,729
Mortgages and notes payable................................. 1,296,127 1,281,590
---------- ----------
Total liabilities................................. 1,865,456 $1,772,496
---------- ----------
Minority interests.......................................... 2,693 2,687
Redeemable OP units at redemption value..................... 99,898 88,545
Partners' capital -- common OP units 44,479,899 and
44,403,034 issued and outstanding......................... 1,116,934 1,142,772
---------- ----------
$3,084,981 $3,006,500
========== ==========
</Table>

See accompanying notes to condensed consolidated financial statements.

F-2
169

MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME

UNAUDITED

(IN THOUSANDS)

<Table>
<Caption>
SIX MONTHS ENDED
JUNE 30,
-------------------
2001 2000
-------- --------

Revenue:
Hotel operations:
Rooms................................................... $402,760 $ --
Food and beverage....................................... 145,383 --
Other operating departments............................. 46,005 --
Participating lease revenue............................... 10,736 145,031
Office rental and other revenues.......................... 4,967 3,556
-------- --------
Total revenue....................................... 609,851 148,587
-------- --------
Hotel operating expenses by department:
Rooms..................................................... 92,287 --
Food and beverage......................................... 103,890 --
Other operating departments............................... 23,616 --
Office rental, parking and other operating expenses......... 1,625 1,343
Undistributed operating expenses:
Administrative and general................................ 88,055 4,150
Property operating costs.................................. 84,977 --
Property taxes, insurance and other....................... 36,902 25,093
Depreciation and amortization............................. 57,787 54,102
Write down of investment in STS Hotel Net................. 2,112 --
Swap termination costs.................................... 9,297 --
FelCor merger costs....................................... 3,789 --
Cost to terminate leases with Prime Hospitality
Corporation............................................. 1,315 --
-------- --------
Total operating expenses............................ 505,652 84,688
-------- --------
Net operating income........................................ 104,199 63,899
Interest expense, net....................................... 60,261 58,417
-------- --------
Income before minority interests, income taxes, gain (loss)
on sale of asset and extraordinary gain (loss)............ 43,938 5,482
Minority interests.......................................... 6 25
-------- --------
Income before income taxes, gain (loss) on sale of asset and
extraordinary gain (loss)................................. 43,932 5,457
Income tax expense.......................................... 1,242 59
-------- --------
Income before gain (loss) on sale of asset and extraordinary
gain (loss)............................................... 42,690 5,398
Gain (loss) on sale of asset, net of tax effect of ($19) and
($56)..................................................... (1,062) 3,439
Extraordinary gain (loss) on early extinguishments of debt,
net of tax effect of ($17) and $50........................ (1,226) 3,400
-------- --------
Net income.................................................. 40,402 12,237
Other comprehensive income (loss):
Transition adjustment..................................... (2,842) --
Foreign currency translation adjustment................... (159) (534)
Change in fair value of cash flow hedges.................. (4,268) --
-------- --------
Comprehensive income........................................ $ 33,133 $ 11,703
======== ========
Net income applicable to common unitholders................. $ 40,120 $ 11,955
======== ========
Net income applicable to general partner common
unitholder................................................ $ 36,887 $ 10,939
======== ========
Net income applicable to third party limited partner common
unitholders............................................... $ 3,233 $ 1,016
======== ========
Earnings per unit:
Basic:
Income before extraordinary gain (loss)................. $ 0.85 $ 0.16
Extraordinary gain (loss)............................... (0.03) 0.07
-------- --------
Net income.............................................. $ 0.82 $ 0.23
======== ========
Diluted:
Income before extraordinary gain (loss)................. $ 0.83 $ 0.16
Extraordinary gain (loss)............................... (0.02) 0.07
-------- --------
Net income.............................................. $ 0.81 $ 0.23
======== ========
</Table>

See accompanying notes to condensed consolidated financial statements.

F-3
170

MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

CONDENSED CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL
UNAUDITED
(IN THOUSANDS)

<Table>
<Caption>
SIX MONTHS ENDED JUNE 30,
--------------------------
2001 2000
----------- -----------

Balance at beginning of period.............................. $1,142,772 $1,203,518
Contributions............................................... 6,737 10,692
Contribution from general partner related to amortization of
unearned stock-based compensation......................... 1,842 395
Repurchase of units......................................... (3,280) (42,003)
Allocations from redeemable OP units........................ (15,601) (20,344)
Distributions............................................... (48,387) (52,669)
Net income applicable to common unitholders............... 40,120 11,955
Transition adjustment..................................... (2,842) --
Foreign currency translation adjustment................... (159) (534)
Change in fair value of cash flow hedges.................. (4,268) --
---------- ----------
Balance at end of period.................................... $1,116,934 $1,111,010
========== ==========
</Table>

F-4
171

MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
(IN THOUSANDS)

<Table>
<Caption>
SIX MONTHS ENDED JUNE 30,
--------------------------
2001 2000
----------- -----------

Operating activities:
Net income................................................ $ 40,402 $ 12,237
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization............................. 57,787 54,102
Loss (gain) on sale of assets, before tax effect.......... 1,081 (3,495)
Write down of investment in STS Hotel Net................. 2,112 --
Extraordinary loss (gain) on early extinguishment of debt,
before tax effect...................................... 1,243 (3,450)
Minority interests........................................ 6 24
Amortization of stock based compensation.................. 1,842 395
Deferred income taxes..................................... 296 43
Changes in operating assets and liabilities:
Accounts receivable, net............................... (7,007) (3,638)
Prepaid expenses and other............................. 502 8,295
Due from OpCo.......................................... 11,328 (11,449)
Accounts payable, accrued expenses, accrued interest
and other liabilities................................. 4,471 67,845
Income taxes payable................................... 499 (238)
--------- ---------
Net cash provided by operating activities......... 114,562 120,671
--------- ---------
Investing activities:
Investment in hotel properties, net....................... (23,782) (61,243)
Proceeds from disposition of assets....................... 7,274 24,148
Hotel operating cash received in connection with lease
conversions............................................ 3,257 --
Investments in and advances to affiliates, net............ -- (5,511)
(Increase in) repayments of notes receivable.............. (36,000) 57,110
Change in restricted cash................................. (283) (1,477)
--------- ---------
Net cash (used in) provided by investing
activities...................................... (49,534) 13,027
--------- ---------
Financing activities:
Deferred financing costs.................................. (9,906) (1,412)
Proceeds from mortgages and notes payable................. 599,529 100,194
Principal payments on mortgages and notes payable......... (584,830) (126,469)
Repayments of MeriStar borrowings......................... -- (14,556)
Contributions from partners............................... 3,169 1,286
Repurchase of units....................................... (3,280) (42,003)
Distributions paid to partners............................ (49,685) (52,669)
--------- ---------
Net cash used in financing activities............. (45,003) (135,629)
--------- ---------
Effect of exchange rate changes on cash and cash
equivalents............................................... 283 (22)
--------- ---------
Net increase (decrease) in cash and cash equivalents........ 20,308 (1,953)
Cash and cash equivalents, beginning of period.............. 242 2,549
--------- ---------
Cash and cash equivalents, end of period.......... $ 20,550 $ 596
========= =========
</Table>

See accompanying notes to condensed consolidated financial statements.

F-5
172

MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2001
UNAUDITED
(DOLLARS IN THOUSANDS)

1. ORGANIZATION

MeriStar Hospitality Operating Partnership, L.P. ("the Partnership") owns a
portfolio of primarily upscale, full-service hotels in the United States and
Canada. The portfolio is diversified by franchise and brand affiliations. As of
June 30, 2001, the Partnership owned 113 hotels, with 28,877 rooms, 109 of which
are leased by the Partnership's taxable subsidiaries and managed by MeriStar
Hotels & Resorts, Inc., ("OpCo"). Four of the hotels are leased by affiliates of
Prime Hospitality Corporation. During 2000, substantially all of the hotels were
leased to and operated by OpCo.

The Partnership was formed on August 3, 1998, as a result of the merger
between CapStar Hotel Company ("CapStar") and American General Hospitality
Corporation ("AGH") and the subsequent formation of MeriStar Hospitality
Corporation ("MeriStar") , the merged entity. MeriStar, a real estate investment
trust ("REIT") is the general partner and owns a one percent interest as of June
30, 2001. The limited partners are MeriStar LP, Inc., a wholly owned subsidiary
of MeriStar, which held approximately a 90 percent interest as of June 30, 2001
and various third parties, which owned an aggregate interest of nine percent at
June 30, 2001. Partners' capital includes the partnership interests of MeriStar
and MeriStar LP, Inc. MeriStar held 483,202 and 484,591 common OP units as of
June 30, 2001 and December 31, 2000, respectively. MeriStar LP, Inc. held
43,996,697 and 43,918,443 common OP units as of June 30, 2001 and December 31,
2000 respectively. Due to the redemption rights of the limited partnership units
held by third parties, these units have been excluded from partner's capital and
classified as Redeemable OP units and recorded at redemption value. At June 30,
2001 and December 31, 2000 there were 4,232,497 and 4,448,268 redeemable units
outstanding.

On January 1, 2001, changes to the federal tax laws governing real estate
investment trusts, commonly know as the REIT Modernization Act, or RMA, became
effective. The REIT Modernization Act permits the Partnership to create taxable
REIT subsidiaries on or after January 1, 2001, which are subject to taxation
similar to subchapter C corporations. Because of the RMA, the Partnership has
created a number of these taxable REIT subsidiaries that are the lessees of its
real property. The REIT Modernization Act prohibits the taxable REIT
subsidiaries from engaging in the following activities:

- they may not manage the properties themselves; they need to enter into
"arms length" management agreements with an independent third-party
manager that is actively involved in the trade or business of hotel
management and manages properties on behalf of other owners,

- they may not lease a property that contains gambling operations, and

- they may not own a brand or franchise under which hotels are operated.

The Partnership believes that establishing taxable REIT subsidiaries to
lease the properties provides a more efficient alignment of and ability to
capture the economic interest of property ownership. Under the prior lease
structure with MeriStar Hotels, we received lease payments based on the revenues
generated by the properties, but MeriStar Hotels operated the properties in
order to maximize net operating income from the properties. This inconsistency
could potentially result in the properties being operated in a way that did not
maximize revenues. With the assignment of the leases for each of the 106
properties managed by MeriStar Hotels to the taxable REIT subsidiaries and the
execution of the new management agreements, we gained the economic risks and
rewards related to the properties that are usually associated with ownership of
real estate, and property revenues become the basis for MeriStar Hotels'
management fees.

F-6
173
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Subsidiaries of OpCo assigned their participating leases to the
wholly-owned taxable REIT subsidiaries as of January 1, 2001. In connection with
the assignment, the taxable subsidiaries executed new management agreements with
a subsidiary of OpCo to manage the hotels. Under these management agreements,
the taxable subsidiaries pay a management fee to OpCo for each property. The
taxable subsidiaries in turn make rental payments to the Partnership under the
participating leases. The management agreements have been structured to
substantially mirror the economics of the former leases. The transactions did
not result in any cash consideration exchanged among the parties except in
regard to the transfer of hotel operating assets and liabilities to the taxable
subsidiaries. Under the new management agreements, the base management fee is
2.5% of total hotel revenue plus incentive payments, based on meeting
performance thresholds, that could total up to 1.5% of total hotel revenue. The
agreements have an initial term of 10 years with three renewal periods of five
years each at the option of OpCo, subject to some exceptions. Because these
leases have been assigned to the taxable subsidiaries, the Partnership now bears
the operating risk associated with the hotels.

On May 9, 2001, the Partnership and MeriStar entered into an agreement and
Plan of Merger with Felcor Lodging Trust Incorporated ("Felcor") and its
operating partnership. Under the merger agreement, a wholly-owned subsidiary of
FelCor's operating partnership will merge with and into the Partnership, and
MeriStar will merge with and into Felcor. Holders of MeriStar common stock will
receive 0.784 of a share of Felcor common stock and $4.60 in cash for each share
of MeriStar's common stock. Holders of OP Units will receive $4.60 in cash and
0.784 FelCor operating partnership units. Class D Preferred OP Units will get
Series D preferred units in FelCor operating partnership on a one for one basis.
The merger agreement requires the approval of holders of a majority of
MeriStar's outstanding shares of common stock and holders of a majority of the
outstanding shares of common stock of Felcor. MeriStar currently expects the
merger to close during the third quarter of 2001. The Partnership has incurred
$3,789 of costs related to this merger through June 30, 2001.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These unaudited interim financial statements have been prepared according
to the rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures that are normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been omitted. These interim financial statements should be read in
conjunction with the financial statements, accompanying notes and other
information for the year ended December 31, 2000. Certain 2000 amounts have been
reclassified to conform to the 2001 presentation.

In management's opinion, the accompanying unaudited condensed consolidated
interim financial statements reflect all adjustments, which are of a normal and
recurring nature, necessary for a fair presentation of the financial condition
and results of operations and cash flows for the periods presented. The
preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions.
Such estimates and assumptions affect the reported amounts of assets and
liabilities, as well as the disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. The actual results could differ from those
estimates. The results of operations for the interim periods are not necessarily
indicative of the results for the entire year.

Statement of Financial Accounting Standards No. 131, "Disclosures about
Segments of an Enterprise and Related Information" requires a public entity to
report selected information about operating segments in financial reports issued
to shareholders. Based on the guidance provided in the standard, the Partnership
has determined that its business is conducted in one reportable segment. It also
establishes standards for related disclosures about products and services,
geographic areas and major customers. Revenues for Canadian operations totaled
$11,583 and $3,178 for the six months ended June 30, 2001 and 2000.

F-7
174
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin or SAB No. 101, "Revenue Recognition in Financial
Statements." SAB No. 101 addresses lessor revenue recognition in interim periods
related to rental agreements which provide for minimum rental payments, plus
contingent rents based on the lessee's operations, such as a percentage of sales
in excess of an annual specified revenue target. SAB No. 101 requires the
deferral of contingent rental income until specified targets are met. This SAB
relates only to the recognition of the lease revenue in interim periods for
financial reporting purposes; it has no effect on the timing of rent payments
under the leases. The effect of SAB No. 101 was to defer additional contingent
rental income of $425 and $59,322 for the six months ended June 30, 2001 and
2000.

In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard No. 133, "Accounting for Derivative Instruments
and Hedging Activities," which requires that an entity recognize all derivatives
as either assets or liabilities in the balance sheet and measure those
instruments at fair value. In June 1999, the Financial Accounting Standard Board
issued Statement of Financial Accounting Standard No. 137 which amended
Statement of Financial Accounting Standard No. 133 to defer the effective date
to all fiscal quarters of all fiscal years beginning after June 15, 2000. In
June 2000, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard No. 138 which provides additional guidance and
amendments to Statement of Financial Accounting Standard No. 133.

The Partnership's interest rate risk management objective is to limit the
impact of interest rate changes on earnings and cash flows. The Partnership
assesses interest rate cash flow risk by continually identifying and monitoring
changes in interest rate exposures that may adversely impact expected future
cash flows, and by evaluating hedging opportunities. The Partnership does not
enter into derivative instruments for any purpose other than cash flow hedging
purposes.

The Partnership's interest rate swap agreements are considered to be a
hedge against changes in the amount of future cash flows associated with the
interest payments of the Partnership's variable rate debt obligations.
Accordingly, the interest rate swap agreements are reflected at fair value in
the Partnership's consolidated balance sheet as of June 30, 2001 and the related
unrealized gains or losses on these contracts are recorded in partner's capital
as a component of accumulated other comprehensive income.

The Partnership recognized a transition adjustment of $2,842 as the fair
value of these derivative instruments at January 1, 2001. The Partnership
recorded a liability and corresponding charge to other comprehensive loss for
this amount. As of June 30, 2001, the fair value of the Partnership's derivative
instruments represents a liability of $7,110. The estimated net amount recorded
in accumulated other comprehensive income expected to be reclassified to the
statement of operations within the next six months is approximately $3,065.

During June, 2001, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standard No. 141, "Business Combinations," and
No. 142 "Goodwill and other Intangible Assets". We are currently in the process
of evaluating the effect these new standards will have on our financial
statements.

3. NOTE RECEIVABLE FROM OPCO

The Partnership may lend OpCo up to $50,000 for general corporate purposes
pursuant to a revolving credit agreement. The interest rate on this credit
agreement is 650 basis points over the 30-day London Interbank Offered Rate. As
of June 30, 2001, $36,000 was outstanding under this revolving credit agreement.

F-8
175
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4. LONG-TERM DEBT

Long-term debt consisted of the following:

<Table>
<Caption>
JUNE 30, DECEMBER 31,
2001 2000
---------- ------------

Senior Unsecured Notes...................................... $ 498,367 $ --
Credit Facility............................................. 422,000 898,000
Secured Facility............................................ 322,218 324,554
Mortgage Debt and Other..................................... 53,542 59,036
---------- ----------
Mortgages and Notes payable............................... $1,296,127 $1,281,590
Notes payable to MeriStar................................... 356,923 356,729
---------- ----------
$1,653,050 $1,638,319
========== ==========
</Table>

As of June 30, 2001, aggregate future maturities of the above obligations
are as follows:

<Table>

2001.................................................... $ 19,697
2002.................................................... 47,897
2003.................................................... 313,589
2004.................................................... 240,168
2005.................................................... 9,265
Thereafter.............................................. 1,022,434
----------
$1,653,050
==========
</Table>

On January 26, 2001, the Partnership sold $300,000 of 9.0% senior notes due
2008 and $200,000 of 9.13% senior notes due 2011. The notes are unsecured
obligations of the Partnership. MeriStar, together with a number of the
subsidiaries of the Partnership, guarantees payment of principal and interest on
the notes on a senior unsecured basis. The net proceeds from the sale of
$492,000 were used to repay amounts outstanding under the Credit Facility and to
make payments to terminate some swap agreements that hedged variable interest
rates of the loans that were repaid. The terminated swap agreements had notional
amounts totaling $300,000. The Partnership recognized a loss of $9,297 to
terminate these swap agreements. The repayments of term loans under the Credit
Facility resulted in an extraordinary loss of $1,243 ($1,226, net of tax) from
the write-off of deferred financing costs.

5. DISTRIBUTIONS PAYABLE

On June 28, 2001, the Partnership declared a distribution for the three
months ended June 30, 2001 of $0.505 per Common and Class B OP Unit and $0.5575
per Class C OP Unit. The distribution was paid on July 13, 2001.

F-9
176
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

6. EARNINGS PER UNIT

The following is a reconciliation of the numerators and denominators of the
basic and diluted earnings per unit ("EPU") computations for income before
extraordinary gain (loss):

<Table>
<Caption>
SIX MONTHS ENDED
JUNE 30,
-----------------
2001 2000
------- -------

Basic EPU Computation:
Net income before extraordinary gain (loss)............... $41,628 $ 8,837
Distributions paid related to unvested restricted stock of
MeriStar............................................... (403) (335)
Preferred distributions................................... (282) (282)
------- -------
Income before extraordinary gain (loss) available to
common unitholders..................................... 40,943 8,220
Weighted average number of OP Units outstanding........... 48,383 50,269
------- -------
Basic EPU before extraordinary gain (loss)................ $ 0.85 $ 0.16
======= =======
Diluted EPU Computation:
Income before extraordinary gain (loss) available to
common unitholders..................................... 40,943 8,220
Preferred distributions................................... 282 --
Interest on convertible debt of MeriStar.................. 3,591 --
Adjusted net income....................................... 44,816 8,220
Weighted average number of OP units outstanding........... 48,383 50,269
Stock options of MeriStar................................. 359 149
Class D Preferred OP Units................................ 392 --
Convertible debt of MeriStar.............................. 4,538 --
------- -------
Total weighted average number of diluted OP units
outstanding............................................ 53,672 50,418
------- -------
Diluted EPU before extraordinary gain (loss).............. $ 0.83 $ 0.16
======= =======
</Table>

The effects of Class D Preferred OP Units, convertible debt of MeriStar,
and restricted stock of MeriStar were not included in the computation of EPU for
periods in which their effect was anti-dilutive.

7. SUPPLEMENTAL CASH FLOW INFORMATION

<Table>
<Caption>
SIX MONTHS ENDED
JUNE 30,
------------------
2001 2000
-------- -------

Cash paid for interest and income taxes:
Interest, net of capitalized interest of $3,822 and
$3,530, respectively................................... $ 44,274 $59,471
Income taxes.............................................. 511 211
Non-cash investing and financing activities:
Deferred purchase price................................... -- 8,000
Redemption of redeemable OP Units......................... 2,845 24
Operating assets received and liabilities assumed from
lease conversions:
Accounts receivable.................................... 47,200 --
Prepaid expenses and other............................. 13,500 --
Furniture and fixtures................................. 315 --
Accumulated depreciation............................... (163) --
</Table>

F-10
177
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<Table>
<Caption>
SIX MONTHS ENDED
JUNE 30,
------------------
2001 2000
-------- -------

Investment in affiliates, net.......................... 1,629 --
-------- -------
Total operating assets received................... 62,481 --
======== =======
Accounts payable and accrued expenses.................. (65,706) --
Long-term debt......................................... (32) --
-------- -------
Total liabilities assumed......................... (65,738) --
======== =======
</Table>

8. PARTICIPATING LEASE AGREEMENTS

Changes to the federal tax laws governing REITs became effective on January
1, 2001. Under those changes, the Partnership created taxable REIT subsidiaries
that lease the hotels the Partnership currently owns. The taxable subsidiaries
are wholly-owned and are similar to a subchapter C corporation. Accordingly, as
of January 1, 2001, OpCo assigned the participating leases to the taxable REIT
subsidiaries and the taxable subsidiaries entered into management agreements
with OpCo to manage the properties. Under these management agreements, the
taxable REIT subsidiaries pay OpCo a management fee. The taxable REIT
subsidiaries in turn make rental payments to the Partnership under the
participating leases. The management agreements have been structured to
substantially mirror the economics and terms of the former leases.

As of June 30, 2001, the Partnership leases four hotels to Prime
Hospitality. These leases continue to have non-cancelable remaining terms
ranging from 8 to 10 years, subject to earlier termination on the occurrence of
certain contingencies, as defined. The rent due under each percentage lease is
the greater of base rent or percentage rent, as defined. Percentage rent
applicable to room and food and beverage revenue varies by lease and is
calculated by multiplying fixed percentages by the total amounts of such
revenues over specified threshold amounts. Both the minimum rent and the revenue
thresholds used in computing percentage rents are subject to annual adjustments
based on increases in the United States Consumer Price Index. Percentage rent
applicable to other revenues is calculated by multiplying fixed percentages by
the total amounts of such revenues. During interim reporting periods, the
Partnership defers recognition of revenue for lease payments considered to be
contingent until specified percentage rent thresholds are met.

Total lease payments on the Prime Hospitality leases were $7,536 for the
six months ended June 30, 2001. Total lease payment on all of the leases were
$201,385 for the six months ended June 30, 2000.

9. STOCK-BASED COMPENSATION

As of March 31, 2001, MeriStar has granted 586,500 shares of MeriStar
restricted stock to the Partnership's employees. This restricted stock vests
ratably over a three-year or five-year period.

On March 29, 2000, the Partnership granted 462,500 Profits-Only OP Units,
or POPs, to some of the executive officers pursuant to the POPs Plan. The units
vest ratably over three years based on achieving certain operating performance
criteria and upon the occurrence of certain other events. The Profits-Only OP
Units are subject to variable plan accounting.

On April 16, 2001, the Partnership granted 350,000 POPs to some of our
executives pursuant to our POPs plan. The units vest ratably over three years
and upon the occurrence of certain other events.

F-11
178
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

10. ACQUISITIONS AND DISPOSITIONS

On March 21, 2001, the Partnership sold one hotel and received proceeds of
$7,274. The sale resulted in a loss of $1,081 ($1,062, net of tax).

On May 2, 2001, the Partnership terminated the leases of four hotels from
affiliates of Prime Hospitality Corporation for a total cost of $1,315.
Concurrently, the Partnership signed long-term management agreements with
MeriStar Hotels for these properties.

F-12
179
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

11. CONSOLIDATING FINANCIAL INFORMATION

Certain of the Partnership's wholly-owned subsidiaries, together with the
Partnership, are guarantors of debt. The following tables present consolidating
information for the guarantor subsidiaries:

MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

CONSOLIDATING BALANCE SHEET
JUNE 30, 2001

<Table>
<Caption>
MERISTAR
HOSPITALITY NON- TOTAL
OP, L.P. GUARANTOR GUARANTOR ELIMINATIONS CONSOLIDATED
----------- SUBSIDIARIES SUBSIDIARIES ------------ ------------

ASSETS

Investments in hotel properties,
net............................... $ 7,864 $1,401,820 $1,457,450 $ -- $2,867,134
Cash and cash equivalents........... 20,550 -- -- -- 20,550
Accounts receivable, net............ 691 1,955 54,394 -- 57,040
Prepaid expenses and other.......... 1,124 587 14,054 -- 15,765
Notes receivable.................... 123,423 -- -- (87,423) 36,000
Due from OpCo....................... (18,407) (3,357) 32,657 -- 10,893
Due from subsidiaries............... (192,998) 262,116 (69,118) -- --
Investments in and advances to
affiliates........................ 2,635,521 58,911 10,116 (2,662,834) 41,714
Restricted cash..................... 13,872 -- 6,329 -- 20,201
Intangible assets, net.............. 13,700 1,149 835 -- 15,684
---------- ---------- ---------- ----------- ----------
$2,605,340 $1,723,181 $1,506,717 $(2,750,257) $3,084,981
========== ========== ========== =========== ==========

LIABILITIES, MINORITY INTERESTS AND PARTNERS' CAPITAL

Accounts payable, accrued expenses
and other liabilities............. $ 29,497 $ 20,260 $ 77,113 $ -- $ 126,870
Accrued interest.................... 39,983 27 4,342 -- 44,352
Income taxes payable................ 1,420 -- -- -- 1,420
Distributions payable............... 24,245 -- -- -- 24,245
Deferred income taxes............... 8,409 -- -- -- 8,409
Interest rate swaps................. 7,110 -- -- -- 7,110
Notes payable to MeriStar........... 356,923 -- -- -- 356,923
Mortgages and notes payable......... 920,921 87,484 375,145 (87,423) 1,296,127
---------- ---------- ---------- ----------- ----------
Total liabilities......... 1,388,508 107,771 456,600 (87,423) 1,865,456
Minority interests.................. -- 2,693 -- -- 2,693
Redeemable OP units at redemption
value............................. 99,898 -- -- -- 99,898
Partners' capital................... 1,116,934 1,612,717 1,050,117 (2,662,834) 1,116,934
---------- ---------- ---------- ----------- ----------
$2,605,340 $1,723,181 $1,506,717 $(2,750,257) $3,084,981
========== ========== ========== =========== ==========
</Table>

F-13
180
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2001

<Table>
<Caption>
MERISTAR NON-
HOSPITALITY GUARANTOR GUARANTOR TOTAL
OP, L.P. SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
----------- ------------ ------------ ------------ ------------

Revenue:
Hotel operations:
Rooms.............................. $ -- $ -- $402,760 $ -- $402,760
Food and beverage.................. -- -- 145,383 -- 145,383
Other operating departments........ -- -- 46,005 -- 46,005
Participating lease revenue........... 1,237 90,616 96,414 (177,531) 10,736
Office rental, parking and other
revenue............................ 1,963 153 2,851 -- 4,967
-------- -------- -------- --------- --------
Total revenue................. 3,200 90,769 693,413 (177,531) 609,851
Hotel operating expenses by
department:
Rooms.............................. -- -- 92,287 -- 92,287
Food and beverage.................. -- -- 103,890 103,890
Other operating departments........ -- -- 23,616 -- 23,616
Office rental, parking and other
operating expenses................. -- 111 1,514 -- 1,625
Undistributed operating expenses:
Administrative and general......... 2,350 318 85,387 -- 88,055
Property operating costs........... -- 352 84,625 -- 84,977
Property taxes, insurance and
other............................ 2,787 8,267 203,379 (177,531) 36,902
Depreciation and amortization...... 3,431 27,154 27,202 -- 57,787
Write down of investment in STS
Hotel Net........................ 2,112 -- -- -- 2,112
Swap termination costs............. 9,297 -- -- -- 9,297
FelCor merger costs................ 3,789 -- -- -- 3,789
Cost to terminate leases with Prime
Hospitality Corporation.......... 1,315 -- -- -- 1,315
-------- -------- -------- --------- --------
Total operating expenses...... 25,081 36,202 621,900 (177,531) 505,652
-------- -------- -------- --------- --------
Net operating income (loss)............. (21,881) 54,567 71,513 -- 104,199
Interest expense, net................... 44,322 2,583 13,356 -- 60,261
Equity in income from consolidated
entities.............................. 109,073 -- -- (109,073) --
-------- -------- -------- --------- --------
Income before minority interests, income
taxes, loss on sale of assets and
extraordinary loss.................... 42,870 51,984 58,157 (109,073) 43,938
Minority interests...................... -- 6 -- -- 6
-------- -------- -------- --------- --------
Income before income taxes, loss on sale
of assets and extraordinary loss...... 42,870 51,978 58,157 (109,073) 43,932
Income taxes............................ 1,242 -- -- 1,242
-------- -------- -------- --------- --------
Income before loss on sale of assets and
extraordinary loss.................... 41,628 51,978 58,157 (109,073) 42,690
Loss on sale of assets, net............. -- (1,062) -- -- (1,062)
Extraordinary loss on early
extinguishment of debt, net of tax
effect................................ (1,226) -- -- -- (1,226)
-------- -------- -------- --------- --------
Net income.............................. $ 40,402 $ 50,916 $ 58,157 $(109,073) $ 40,402
======== ======== ======== ========= ========
</Table>

F-14
181
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2001

<Table>
<Caption>
MERISTAR NON-
HOSPITALITY GUARANTOR GUARANTOR TOTAL
OP, L.P. SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
----------- ------------ ------------ ------------ ------------

Cash flows provided by (used in)
operating activities................. $(164,661) $ 8,714 $ 270,509 $ -- $114,562
Cash flows provided by (used in)
investing activities................. 218,243 7,274 72,488 (347,539) (49,534)
Cash flows provided by (used in)
financing activities................. (33,274) (16,271) (342,997) 347,539 (45,003)
Effect of exchange rate changes on cash
and cash equivalents................. -- 283 -- -- 283
--------- -------- --------- --------- --------
Change in cash and cash equivalents.... 20,308 -- -- -- 20,308
Cash and cash equivalents, beginning of
year................................. 242 -- -- -- 242
--------- -------- --------- --------- --------
Cash and cash equivalents, end of
year................................. $ 20,550 $ -- $ -- $ -- $ 20,550
========= ======== ========= ========= ========
</Table>

12. RECENT DEVELOPMENTS

On May 9, 2001, the Partnership and MeriStar entered into an Agreement and
Plan of Merger with Felcor Lodging Trust Incorporated ("Felcor")and its
operating partnership. Under the merger agreement, a wholly-owned subsidiary of
FelCor's operating partnership will merge with and into the Partnership, and
MeriStar will merge with and into Felcor. Holders of MeriStar common stock will
receive 0.784 of a share of Felcor common stock and $4.60 in cash for each share
of MeriStar's common stock. Holders of OP Units will receive $4.60 in cash and
0.784 of FelCor Operating Partnership Units. Class D Preferred OP Units will get
Series D preferred Units in FelCor Operating Partnership on a one for one basis.
The merger agreement requires the approval of holders of a majority of
MeriStar's outstanding shares of common stock and holders of a majority of the
outstanding shares of common stock of FelCor. MeriStar currently expect the
merger to close during the third quarter of 2001.

FelCor has filed a registration statement on Form S-4 with the SEC in
connection with the merger transaction. The registration statement has not yet
been declared effective. The Form S-4 contains a prospectus, a proxy statement,
and other documents for MeriStar's stockholder meeting and that of FelCor, at
which time the proposed transaction will be considered. MeriStar and FelCor plan
to mail the proxy statement and prospectus contained in the Form S-4 to their
respective stockholders after the registration statement is declared effective
by the SEC. The Form S-4, proxy statement and prospectus will contain important
information about MeriStar, FelCor, the merger and related matters. Investors
and stockholders should read the Form S-4, proxy statement and the prospectus
and the other documents filed with the SEC in connection with the merger
carefully before they make any decision with respect to the merger. For more
information regarding the persons participating in the solicitation and their
interest in the merger, please see MeriStar's Statement on Schedule 14A, filed
on May 10, 2001.

F-15
182

INDEPENDENT AUDITORS' REPORT

The Partners
MeriStar Hospitality Operating Partnership, L.P.

We have audited the accompanying consolidated balance sheets of MeriStar
Hospitality Operating Partnership, L.P. and subsidiaries (the "Partnership") as
of December 31, 2000 and 1999 and the related consolidated statements of
operations, partners' capital, and cash flows for each of the years in the
three-year period ended December 31, 2000. In connection with our audits of the
consolidated financial statements, we have also audited the financial statement
schedule of real estate and accumulated depreciation. These consolidated
financial statements and financial statement schedule are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these consolidated financial statements and financial statement schedule based
on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of MeriStar
Hospitality Operating Partnership, L.P. and subsidiaries as of December 31, 2000
and 1999, and the results of their operations and their cash flows for each of
the years in the three-year period ended December 31, 2000, in conformity with
accounting principles generally accepted in the United States of America. Also,
in our opinion, the financial statement schedule, when considered in relation to
the basic consolidated financial statements taken as a whole, presents fairly,
in all material respects, the information set forth therein.

KPMG LLP

Washington, D.C.
May 30, 2001

F-16
183

MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2000 AND 1999
(DOLLARS IN THOUSANDS)

<Table>
<Caption>
2000 1999
---------- ----------

ASSETS

Investments in hotel properties............................. $3,193,730 $3,118,723
Accumulated depreciation.................................... (287,229) (182,430)
---------- ----------
2,906,501 2,936,293
Cash and cash equivalents................................... 242 2,549
Accounts receivable, net.................................... 2,833 1,328
Prepaid expenses and other.................................. 2,767 9,137
Note receivable from Lessee................................. -- 57,110
Due from Lessee............................................. 22,221 11,476
Investments in and advances to affiliates................... 42,196 40,085
Restricted cash............................................. 19,918 17,188
Intangible assets, net of accumulated amortization of $5,575
and $2,847................................................ 9,822 10,930
---------- ----------
$3,006,500 $3,086,096
========== ==========

LIABILITIES, MINORITY INTERESTS AND PARTNERS' CAPITAL

Accounts payable, accrued expenses and other liabilities.... $ 72,197 $ 55,866
Accrued interest............................................ 28,365 31,380
Income taxes payable........................................ 921 730
Distributions payable....................................... 24,581 26,263
Deferred income taxes....................................... 8,113 7,477
Notes payable to MeriStar................................... 356,729 374,541
Mortgages and notes payable................................. 1,281,590 1,302,230
---------- ----------
Total liabilities................................. 1,772,496 1,798,487
---------- ----------
Minority interests.......................................... 2,687 2,690
Redeemable OP units at redemption value..................... 88,545 81,401
Partners' capital -- Common OP units, 44,403,034 and
47,256,468 issued and outstanding......................... 1,142,772 1,203,518
---------- ----------
$3,006,500 $3,086,096
========== ==========
</Table>

See accompanying notes to consolidated financial statements.

F-17
184

MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
(IN THOUSANDS)

<Table>
<Caption>
2000 1999 1998
-------- -------- --------

Revenue:
Participating lease revenue.............................. $391,729 $368,012 $135,994
Hotel operations:
Rooms................................................. -- -- 275,610
Food and beverage..................................... -- -- 85,374
Other operating departments........................... -- -- 19,496
Office rental, parking and other revenue................. 8,956 6,808 5,557
-------- -------- --------
Total revenue.................................... 400,685 374,820 522,031
-------- -------- --------
Hotel operating expenses by department:
Rooms................................................. -- -- 65,048
Food and beverage..................................... -- -- 67,493
Other operating departments........................... -- -- 9,975
Office rental, parking and other operating expenses...... 2,731 1,964 2,713
Undistributed operating expenses:
Administrative and general............................ 9,445 5,735 52,213
Property operating costs.............................. -- -- 58,611
Property taxes, insurance and other................... 47,481 47,027 29,240
Lease expense......................................... -- -- 34,641
Depreciation and amortization......................... 110,688 101,795 58,842
Spin-off costs........................................ -- -- 7,345
-------- -------- --------
Total operating expenses......................... 170,345 156,521 386,121
-------- -------- --------
Net operating income....................................... 230,340 218,299 135,910
Interest expense, net...................................... 117,524 100,387 50,492
-------- -------- --------
Income before minority interests, income taxes, gain on
sale of assets, and extraordinary gain (loss)............ 112,816 117,912 85,418
Minority interests......................................... (3) 24 (2,185)
-------- -------- --------
Income before income taxes, gain on sale of assets, and
extraordinary gain (loss)................................ 112,819 117,888 87,603
Income taxes............................................... 1,622 1,681 1,299
-------- -------- --------
Income before gain on sale of assets and extraordinary gain
(loss)................................................... 111,197 116,207 86,304
Gain on sale of assets, net of tax effect of $56........... 3,439 -- --
Extraordinary gain (loss) on early extinguishment of debt,
net of tax effect of $50 in 2000, ($74) in 1999, and
($207) in 1998........................................... 3,400 (4,551) (1,238)
-------- -------- --------
Net income................................................. 118,036 111,656 85,066
Preferred distributions.................................... (565) (565) (650)
-------- -------- --------
Net income available to common unitholders................. $117,471 $111,091 $ 84,416
======== ======== ========
Net income applicable to general partner common
unitholder.......................................... 107,638 101,345 77,225
======== ======== ========
Net income applicable to third party limited partner
common unitholders.................................. 9,833 9,746 7,191
======== ======== ========
Earnings per unit:
Basic:
Income before extraordinary gain...................... $ 2.25 $ 2.22 $ 2.38
Extraordinary gain (loss)............................. 0.07 (0.09) (0.03)
-------- -------- --------
Net income............................................ $ 2.32 $ 2.13 $ 2.35
======== ======== ========
Diluted:
Income before extraordinary gain...................... $ 2.18 $ 2.15 $ 2.25
Extraordinary gain (loss)............................. 0.06 (0.08) (0.03)
-------- -------- --------
Net income............................................ $ 2.24 $ 2.07 $ 2.22
======== ======== ========
</Table>

See accompanying notes to consolidated financial statements.

F-18
185

MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
(IN THOUSANDS)

<Table>

Balance, January 1, 1998.................................... $ 396,838
Contributions............................................... 777,862
Allocation from redeemable OP units......................... 12,234
Distributions............................................... (97,170)
Net income available to common unitholders................ 84,416
Foreign currency translation adjustment................... (3,960)
----------
Comprehensive income........................................ 80,456
----------
Balance, December 31, 1998.................................. 1,170,220
Contributions............................................... 33,459
Distributions............................................... (117,885)
Allocation from redeemable OP units......................... 11,645
Repurchase of OP units...................................... (6,252)
Net income available to common unitholders................ 111,091
Foreign currency translation adjustment................... 1,240
----------
Comprehensive income........................................ 112,331
----------
Balance, December 31, 1999.................................. 1,203,518
Contributions............................................... 9,872
Distributions............................................... (101,730)
Allocation from redeemable OP units......................... (14,957)
Repurchase of OP units...................................... (73,638)
Contribution from general partner related to amortization of
stock-based compensation.................................. 3,070
Net income available to common unitholders................ 117,471
Foreign currency translation adjustment................... (834)
----------
Comprehensive income........................................ 116,637
----------
Balance, December 31, 2000.................................. $1,142,772
==========
</Table>

See accompanying notes to the consolidated financial statements.

F-19
186

MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
(IN THOUSANDS)

<Table>
<Caption>
2000 1999 1998
--------- --------- ----------

Operating activities:
Net income.............................................. $ 118,036 $ 111,656 $ 85,066
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization........................ 110,688 101,795 58,842
Gain on assets sold, before tax effect............... (3,495) --
Extraordinary (gain)loss on early extinguishment of
debt, before tax effect............................ (3,450) 4,625 1,445
Minority interests................................... (3) 24 (2,185)
Non-cash spin-off costs.............................. -- -- 3,205
Amortization of stock based compensation............. 3,070 -- --
Deferred income taxes................................ 636 715 (270)
Changes in operating assets and liabilities:
Accounts receivable, net........................... (1,505) 1,716 29,673
Prepaid expenses and other......................... 6,370 (5,262) 24,760
Due from Lessee.................................... (10,745) (4,039) (7,437)
Accounts payable, accrued expenses, accrued
interest and other liabilities.................. 4,295 16,098 (5,485)
Income taxes payable............................... 191 1,001 (723)
--------- --------- ----------
Net cash provided by operating activities....... 224,088 228,329 186,891
--------- --------- ----------
Investing activities:
Investment in hotel properties, net..................... (90,703) (170,063) (701,710)
Proceeds from disposition of assets..................... 24,148 8,900 --
Purchases of intangible assets.......................... -- -- (5,584)
Investments in and advances to affiliates, net.......... (2,111) (31,298) (2,320)
Purchases of minority interests......................... -- (72) (44)
Repayments of notes receivable.......................... 57,110 9,890 (67,000)
Change in restricted cash............................... (2,730) (5,309) (8,847)
--------- --------- ----------
Net cash used in investing activities........... (14,286) (187,952) (785,505)
--------- --------- ----------
Financing activities:
Deferred financing costs................................ (1,615) (6,005) --
Proceeds from mortgages and notes payable............... 179,388 429,636 1,407,261
Principal payments on mortgages and notes payable....... (200,028) (407,432) (821,051)
Borrowings from MeriStar................................ -- 55,000 --
Repayments to MeriStar on borrowings.................... (14,362) (2,785) --
Repurchase of units..................................... (73,638) (6,252) --
Contributions from partners............................. 1,356 2,249 1,870
Distributions paid to partners.......................... (103,274) (106,359) (67,623)
--------- --------- ----------
Net cash (used in) provided by financing
activities.................................... (212,173) (41,948) 520,457
--------- --------- ----------
Effect of exchange rate changes on cash and cash
equivalents............................................. 64 (53) 204
Net decrease in cash and cash equivalents................. (2,307) (1,624) (77,953)
Cash and cash equivalents, beginning of year.... 2,549 4,173 82,126
--------- --------- ----------
Cash and cash equivalents, end of year.......... $ 242 $ 2,549 $ 4,173
========= ========= ==========
</Table>

See accompanying notes to consolidated financial statements.

F-20
187

MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2000, 1999 AND 1998
(DOLLARS IN THOUSANDS)

1. ORGANIZATION

MeriStar Hospitality Operating Partnership, L.P. (the "Partnership") owns a
portfolio of primarily upscale, full-service hotels, diversified by franchise
and brand affiliations, in the United States and Canada. Substantially all of
the Partnership's hotels are leased to and operated by MeriStar Hotel & Resorts,
Inc. ("OpCo"), an affiliated entity. As of December 31, 2000, the Partnership
owned 114 hotels with 29,090 rooms, 106 of which are leased and operated by
OpCo.

The Partnership was formed on August 3, 1998, as a result of the merger
("the Merger") between CapStar Hotel Company ("CapStar") and American General
Hospitality Corporation ("AGH") and the subsequent formation of MeriStar
Hospitality Corporation ("MeriStar"), the merged entity. MeriStar, a real estate
investment trust ("REIT") is the general partner and owns a one percent interest
as of December 31, 2000. The limited partners are MeriStar LP, Inc., a wholly
owned subsidiary of MeriStar, which held approximately a 90 percent interest as
of December 31, 2000 and various third parties, which owned an aggregate
interest of nine percent at December 31, 2000. Partners' capital includes the
partnership interests of MeriStar and MeriStar LP, Inc. MeriStar held 484,591
and 518,009 common OP units as of December 31, 2000 and 1999, respectively.
MeriStar LP, Inc. held 43,918,443 and 46,738,459 common OP units as of December
31, 2000 and 1999, respectively. Due to the redemption rights of the limited
partnership units held by third parties, these units have been excluded from
partners' capital and classified as Redeemable OP units and recorded at
redemption value.

In order for MeriStar to maintain its tax status as a REIT, the Partnership
has not been permitted to engage in the operations of its hotel properties. To
comply with this requirement, the Partnership has leased all of its real
property to third-party lessee/managers -- OpCo and Prime Hospitality
Corporation.

On January 1, 2001, the REIT Modernization Act (the "RMA") became law. The
RMA permits the Partnership to create wholly-owned taxable REIT subsidiaries
(the "TRS") on or after January 1, 2001, which will be subject to taxation
similar to a subchapter C-Corporation. A TRS will be allowed to lease the real
property owned by the Partnership. Also, the RMA prohibits a TRS from engaging
in certain activities. First, a TRS may not manage the properties itself; it
will need to enter into an "arms length" management agreement with an
independent third-party manager that is actively involved in the trade or
business of hotel management and manages properties on behalf of other owners.
Second, a TRS may not lease a property that contains gambling operations. Third,
a TRS may not own a brand or franchise. The Partnership believes that
establishing these taxable REIT subsidiaries to lease its properties will
provide a more efficient alignment of and ability to capture the economic
interests of property ownership.

Until January 1, 2001, the Partnership leased 106 hotels to OpCo. Each of
the leases was a 12-year participating lease under which OpCo paid the
Partnership a fixed base rent plus participating rent based on a percentage of
hotel revenues. Because of the RMA, the Partnership has created a number of
taxable REIT subsidiaries. The Partnership and OpCo have also agreed to assign
the leases for the 106 hotels to these taxable REIT subsidiaries. The new
management agreements have been structured to mirror the current economics of
the existing leases. The transactions did not result in any cash consideration
exchanged among the parties. Under the new management agreements, the base
management fee is 2.5 percent of total hotel operating revenue with incentives
up to an additional 1.5 percent of total revenue if certain operating thresholds
are achieved. The agreements have an initial term of 10 years with three renewal
periods of five years each at OpCo's option, subject to some exceptions. Because
of these changes, the Partnership now bears the operating risk associated with
its properties.

F-21
188
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation -- The consolidated financial statements
include the accounts of the Partnership and all of its majority owned
subsidiaries. All significant intercompany balances and transactions have been
eliminated.

Investments in unconsolidated joint ventures and affiliated companies in
which the Partnership holds a voting interest of 50% or less and exercises
significant influence are accounted for using the equity method. The Partnership
uses the cost method to account for its investment in entities in which it does
not have the ability to exercise significant influence.

Cash Equivalents and Restricted Cash -- The Partnership considers all
highly liquid investments with an original maturity of three months or less to
be cash equivalents. Restricted cash represents amounts required to be
maintained in escrow under certain of the Partnership's credit facilities.

Investments in Hotel Properties -- Investments in hotel properties are
recorded at cost, which includes the allocated purchase price for hotel
acquisitions, or at fair value at the time of contribution for contributed
property. Property and equipment balances are depreciated using the
straight-line method over lives ranging from five to 40 years. For the years
ended December 31, 2000, 1999 and 1998, the Partnership capitalized interest of
$8,613, $12,540, and $5,182, respectively. Properties held for sale are carried
at the lower of their carrying values or estimated fair values less costs to
sell. Depreciation of these properties is discontinued when an operating
property is classified as held for sale. Properties held for sale are not
material and, therefore, are included in investments in hotel properties.

Intangible Assets -- Intangible assets consist primarily of deferred
financing fees. These deferred fees are amortized on a straight-line basis over
the lives of the related borrowings for up to 10 years. Total accumulated
amortization at December 31, 2000 and 1999 was $5,575 and $2,847, respectively.
In 1999 and 1998, the Partnership recognized extraordinary losses of $4,551 and
$1,238 (net of tax effect of $74 and $207), respectively, due to the write-off
of unamortized deferred financing fees in conjunction with refinancing certain
credit facilities.

Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed
of -- The carrying values of long-lived assets, which include property and
equipment and all intangibles, are evaluated periodically in relation to the
operating performance and future undiscounted cash flows of the underlying
assets. If the analysis indicates that the carrying value is not recoverable
from future cash flows, the long-lived asset is written down to estimated fair
value and an impairment loss is recognized. No impairment losses were recorded
during 2000, 1999 or 1998.

Income Taxes -- No provision for federal income taxes has been reflected in
the financial statements because all taxable income or loss, or tax credits are
passed through to the partners. The Partnership is subject to state, local and
foreign taxes in certain jurisdictions.

Foreign Currency Translation -- Results of operations for the Partnership's
Canadian hotels are maintained in Canadian dollars and translated using the
average exchange rates during the period. Assets and liabilities are translated
to U.S. dollars using the exchange rate in effect at the balance sheet date.
Resulting translation adjustments are reflected in accumulated other
comprehensive income.

Revenue Recognition -- Prior to the Merger, revenue was earned through the
operations and management of the hotel properties and was recognized when
earned. Subsequent to the Merger, the Partnership earns participating lease
revenue. Participating lease revenue represents lease payments from lessees
pursuant to participating lease agreements. Office, retail and parking rental is
generally recognized on a straight-line basis over the terms of the respective
leases.

F-22
189
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Participating Lease Agreements -- The Partnership's participating leases
have non-cancelable remaining terms ranging from 8 to 10 years, subject to
earlier termination on the occurrence of certain contingencies, as defined. The
rent due under each percentage lease is the greater of base rent or percentage
rent, as defined. Percentage rent applicable to room and food and beverage
revenue varies by lease and is calculated by multiplying fixed percentages by
the total amounts of such revenues over specified threshold amounts. Both the
minimum rent and the revenue thresholds used in computing percentage rents are
subject to annual adjustments based on increases in the United States Consumer
Price Index. Percentage rent applicable to other revenues is calculated by
multiplying fixed percentages by the total amounts of such revenues. During
interim reporting periods, the Partnership defers recognition of revenue for
lease payments considered to be contingent until specified percentage rent
thresholds are met.

Changes to the federal tax laws governing REITs were enacted in 1999 and
became effective on January 1, 2001. Under those changes, the Partnership is
permitted to create subsidiaries that lease the property the Partnership
currently owns and are taxable, similar to a subchapter C-Corporation. The
Partnership's taxable REIT subsidiaries are wholly-owned. Accordingly, the
Partnership and OpCo assigned the participating leases to the taxable REIT
subsidiaries and the taxable REIT subsidiaries entered into management
agreements with OpCo to manage the Partnership's properties. Under these
management agreements, the taxable subsidiaries pay OpCo a management fee. The
taxable REIT subsidiaries in turn make rental payments to the Partnership under
the participating leases. The management agreements have been structured to
substantially mirror the economics of the former leases.

Financial Instruments -- From time to time the Partnership enters into swap
and collar agreements that are designated as, and are effective as, hedges
against the impact of interest rate fluctuation on certain of the Partnership's
existing and probable future long-term debt instruments. Because these
agreements qualify for hedge accounting treatment, any gains or losses are
recognized as adjustments to interest expense over the lives of the underlying
debt instruments. For hedge agreements associated with anticipated future debt
instruments, gains or losses are deferred until those debt instruments are
entered into. If the Partnership determines it is no longer probable that the
Partnership will enter into an anticipated debt instrument, any related deferred
gains or losses are recognized in the current period.

Use of Estimates -- The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.

Segment Information -- SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information" requires a public entity to report selected
information about operating segments in financial reports issued to
shareholders. It also establishes standards for related disclosures about
product and services, geographic areas and major customers. Based on the
guidance provided in the standard, the Partnership has determined that its
business is conducted in one operating segment.

The following table summarizes geographic information required to be
disclosed under SFAS No. 131:

<Table>
<Caption>
2000 1999 1998
-------- -------- --------

REVENUE:
U.S. ............................................. $394,264 $367,809 $507,078
Foreign........................................... 6,521 7,011 14,953
-------- -------- --------
$400,785 $374,820 $522,031
======== ======== ========
</Table>

F-23
190
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<Table>

INVESTMENTS IN HOTEL PROPERTIES, NET:
U.S. ............................................. $2,850,348 $2,876,909
Foreign........................................... 56,153 59,384
---------- ----------
$2,906,501 $2,936,293
========== ==========
</Table>

Comprehensive Income -- SFAS No. 130, "Reporting Comprehensive Income,"
requires an enterprise to display comprehensive income and its components in a
financial statement to be included in an enterprise's full set of annual
financial statements or in the notes to financial statements. Comprehensive
income represents a measure of all changes in equity of an enterprise that
result from recognized transactions and other economic events for the period
other than transactions with owners in their capacity as owners. Comprehensive
income of the Partnership includes net income and other comprehensive income
from foreign currency items. Accumulated other comprehensive loss included in
partners' capital was $6,081 and $5,247 as of December 31, 2000 and 1999,
respectively.

New Accounting Pronouncements -- In June 1998, the Financial Accounting
Standards Board ("FASB") issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which requires that an entity recognize all
derivatives as either assets or liabilities in balance sheets and measure those
instruments at fair value. In June 1999, the FASB issued SFAS No. 137 which
amended SFAS No. 133 to defer the effective date to all fiscal quarters of
fiscal years beginning after June 15, 2000. In June 2000, the FASB issued SFAS
No. 138 which provides additional guidance and amendments to SFAS No. 133. The
Partnership recognized a transition adjustment of $2,842 as the fair value of
its derivative instruments at January 1, 2001. The transition adjustment
resulted in an interest rate swap liability and a corresponding charge to other
comprehensive income.

3. INVESTMENTS IN HOTEL PROPERTIES

Investments in hotel properties consists of the following:

<Table>
<Caption>
DECEMBER 31,
-----------------------
2000 1999
---------- ----------

Land........................................................ $ 317,072 $ 318,360
Buildings................................................... 2,461,089 2,378,318
Furniture, fixtures and equipment........................... 338,350 320,787
Construction-in-progress.................................... 77,219 101,258
---------- ----------
Total............................................. $3,193,730 $3,118,723
========== ==========
</Table>

4. INVESTMENTS IN AND ADVANCES TO AFFILIATES

The Partnership has ownership interests in certain unconsolidated joint
ventures and affiliated companies.

In 2000, the Partnership invested $2,100 in STS Hotel Net, a Partnership
that provides high-speed internet portals to guest rooms. This investment is
accounted for using the cost method.

In 1999, the Partnership invested $40,000 in MeriStar Investment Partners,
LP ("MIP"), a joint venture established to acquire upscale, full-service hotels.
The Partnership's investment is in the form of a preferred partnership interest.
The Partnership receives a 16% preferred return on its investment.

F-24
191
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

5. NOTE RECEIVABLE FROM LESSEE

On March 1, 2000, OpCo repaid the remaining balance of $57,110 on its
revolving credit agreement with the Partnership upon closing its bank revolving
credit facility. At that time, OpCo's revolving credit agreement with the
Partnership was also amended to reduce the maximum borrowing limit from $75,000
to $50,000. Any amounts outstanding will bear interest at the rate of the 30-day
London Interbank Offered Rate plus 650 basis points.

6. LONG-TERM DEBT

Long-term debt consists of the following:

<Table>
<Caption>
DECEMBER 31,
-----------------------
2000 1999
---------- ----------

Credit Facility............................................. $ 898,000 $ 908,000
Secured Facility............................................ 324,554 328,954
Mortgage Debt and Other..................................... 59,036 65,276
---------- ----------
Mortgages and notes payable............................... 1,281,590 1,302,230
Notes payable to MeriStar................................... 356,729 374,541
---------- ----------
$1,638,319 $1,676,771
========== ==========
</Table>

Credit Facility -- In conjunction with the Merger, the Partnership entered
into a $1,000,000 senior secured credit facility (the "Credit Facility"). The
Credit Facility is structured as a $300,000, five-year term loan facility; a
$200,000, five-and-a-half year term loan facility; and a $500,000, three-year
revolving credit facility with two one-year optional extensions. The Credit
Facility is secured by MeriStar's common stock, and the partners' ownership
interests in the Partnership and its subsidiaries. The interest rate on the term
loans and revolving facility ranges from 100 to 200 basis points over the 30-day
London Interbank Offered Rate ("LIBOR"), depending on certain financial
performance covenants and long-term senior unsecured debt ratings. The weighted
average interest rate on borrowings outstanding under the Credit Facility as of
December 31, 2000 and 1999 was 8.3% and 8.4%, respectively. As of December 31,
2000, the Partnership had $98.0 million available under the Credit Facility's
revolving facility.

Secured Facility -- In 1999, the Partnership completed a $330,000 10-year
non-recourse financing ("Secured Facility") secured by a portfolio of 19 hotels.
The loan bears a fixed interest rate of 8.01% and matures in 2009. The
Partnership used most of the net proceeds to repay the amounts outstanding under
prior credit facilities.

Mortgage Debt -- In connection with the Merger, the Partnership assumed
mortgage debt secured by seven hotels. The mortgage debt matures between 2001
and 2012 and the interest rates on the mortgages range from 7.5% to 10.5%.

Notes Payable to MeriStar -- In 1997, MeriStar completed the offering of
$150,000 aggregate principal amount (issue price of $149,799, net of discount)
of its 8.75% senior subordinated notes due 2007 (the "Subordinated Notes"). In
conjunction with this transaction, the Partnership borrowed $150,000 from
MeriStar under terms matching those of the Subordinated Notes; however, the
interest rate on the Partnership's note to MeriStar is 8.69%, the effective rate
on the Subordinated Notes. The indenture pursuant to which the Subordinated
Notes were issued contains certain covenants, including maintenance of certain
financial ratios, reporting requirements, and other customary restrictions. The
note provides for semi-annual payments of interest on February 15 and August 15,
commencing on February 15, 1998.

In 1999, under terms matching those of the Subordinated Notes, MeriStar
completed an "add-on" offering of $55,000 of Subordinated Notes. In conjunction
with the "add-on" sale of Subordinated Notes,
F-25
192
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

the Partnership borrowed $55,000 from MeriStar under terms matching those of the
Subordinated Notes; however, the interest rate on the Partnership's note to
MeriStar is 8.69%, the effective rate on the Subordinated Notes. The Partnership
used the net proceeds to repay indebtedness under its Credit Facility and to
invest in MIP. These notes are unsecured obligations of the Partnership and
provide for semi-annual payments of interest on February 15 and August 15,
commencing on August 15, 1999. The outstanding balance on these notes payable to
MeriStar is $202,429 and $202,041 at December 31, 2000 and 1999, respectively.

In 1997, MeriStar completed the offering of $172,500 aggregate principal
amount of its 4.75% convertible subordinated notes due 2004 (the "Convertible
Notes"). In conjunction with this transaction, the Partnership borrowed $172,500
from MeriStar under terms matching those of the Convertible Notes. The proceeds
were used to repay outstanding indebtedness under a prior credit facility and to
finance certain hotel acquisitions. The note provides for semi-annual payments
of interest on April 15 and October 15, commencing on April 15, 1998. During
2000, the Partnership repaid $18,200 of its note to MeriStar at a discount in
connection with MeriStar's repurchase of its Convertible Notes at an equal
discount. This resulted in an extraordinary gain of $3,450 ($3,400, net of
taxes). The outstanding balance on this note payable to MeriStar is $154,300 and
$172,500 at December 31, 2000 and 1999, respectively.

Hedge Agreements -- As of December 31, 2000, the Partnership has seven swap
agreements with notional principal amounts totaling $700,000. These swap
agreements provide hedges against the impact future interest rates have on the
Partnership's floating London Interbank Offered Rate ("LIBOR") debt instruments.
The swap agreements effectively fix the 30-day LIBOR between 6.0% and 7.2%. The
swap agreements expire between September 2001 and July 2003. For the year ended
December 31, 2000, the Partnership has received net payments of $3,081 on these
swaps and other similar swaps that expired during the year.

In anticipation of the August 1999 completion of the Secured Facility, the
Partnership entered into two separate hedge transactions during July 1999. Upon
completion of the Secured Facility, the Partnership terminated the underlying
treasury lock agreements, resulting in a net payment to the Partnership of
$5,100. The amount was deferred and is being recognized as a reduction to
interest expense over the life of the underlying debt. As a result, the
effective interest rate on the Secured Facility is 7.76%.

As of December 31, 2000, after consideration of the hedge agreements
described above, the Partnership has fixed the effective interest rate on 88% of
its long-term debt and its overall weighted average interest rate is 7.93%.

Future Maturities -- Aggregate future maturities of the above obligations
are as follows:

<Table>

2001.................................................... $ 28,288
2002.................................................... 47,897
2003.................................................... 667,589
2004.................................................... 361,168
2005.................................................... 9,265
Thereafter.............................................. 524,112
----------
$1,638,319
==========
</Table>

Management has determined that the fair value of the outstanding balance of
the Partnership's long-term debt approximates $1,589,311 at December 31, 2000.

F-26
193
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

7. INCOME TAXES

The Partnership's income taxes were allocated as follows:

<Table>
<Caption>
2000 1999 1998
------ ------ ------

Taxes on income before gain on sale of assets, and
extraordinary gain (loss)................................ $1,622 $1,681 $1,299
Taxes on gain on sale of assets............................ 56 -- --
Tax expense or (benefit) on extraordinary gain (loss)...... 50 (74) (207)
------ ------ ------
$1,728 $1,607 $1,092
====== ====== ======
</Table>

The Partnership's effective income tax rate is as follows:

<Table>
<Caption>
2000 1999 1998
---- ---- ----

State and local taxes....................................... 1.1% 1.1% 1.1%
Difference in effective rate on foreign subsidiaries........ 0.3 0.3 0.3
Other....................................................... -- -- 0.1
--- --- ---
1.4% 1.4% 1.5%
=== === ===
</Table>

The components of income tax expense related to income before gain on sale
of assets, and extraordinary gain (loss) are as follows:

<Table>
<Caption>
2000 1999 1998
------ ------ ------

Current:
State.................................................... $ 640 $ 815 $1,408
Foreign.................................................. 346 151 161
------ ------ ------
986 966 1,569
Deferred:
State.................................................... 548 675 (270)
Foreign.................................................. 88 40 --
------ ------ ------
636 715 (270)
------ ------ ------
$1,622 $1,681 $1,299
====== ====== ======
</Table>

The tax effects of the principal temporary differences that give rise to
the Partnership's net deferred tax liability are as follows:

<Table>
<Caption>
DECEMBER 31,
----------------
2000 1999
------ ------

Accelerated depreciation.................................... $2,089 $1,477
Fair value of hotel assets acquired......................... 5,440 5,440
Allowance for doubtful accounts............................. (24) (24)
Accrued vacation............................................ (12) (12)
Accrued expenses............................................ 386 386
Other....................................................... 234 210
------ ------
Net deferred tax liability.................................. $8,113 $7,477
====== ======
</Table>

There is no valuation allowance for deferred tax assets as of December 31,
2000 or 1999 as management believes it is more likely than not that these
deferred tax assets will be fully realized.

F-27
194
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

In conjunction with the Merger and related transactions, the Partnership
established a new accounting basis for AGH's assets and liabilities based on
their fair values. In accordance with accounting principles generally accepted
in the United States of America, the Partnership has provided a deferred income
tax liability for the estimated future tax effect of differences between the
accounting and tax bases of assets acquired from AGH. This deferred income tax
liability, related to future state and local income taxes, is estimated as
$5,440, based on information available at the date of the Merger and
subsequently.

8. PARTNERSHIP UNITS

The outstanding units of limited partnership interest in the Partnership
held by third parties are redeemable at the option of the holder for a like
number of shares of common stock of MeriStar, or cash, or a combination thereof,
at the election of MeriStar. Due to these redemption rights, these limited
partnership units have been excluded from partners' capital and are included in
redeemable OP units and measured at redemption value as of the end of the
periods presented. At December 31, 2000 and 1999 there were 4,056,111 and
4,544,420 redeemable units outstanding, respectively. The value of these
redeemable units is based on the closing market price of MeriStar's common stock
at the balance sheet date, which at December 31, 2000 and 1999 was $19.70 and
$16.00, respectively. In addition, there were 392,157 Class D Preferred OP Units
outstanding at December 31, 2000 and 1999 with a redemption value of $22.16 per
unit.

The Partnership's agreement provides for four classes of partnership
interests ("OP Units"): Common OP Units, Class B OP Units, Class C OP Units and
Class D OP Units. Common OP Units and Class B OP Units receive quarterly
distributions per OP Unit equal to the dividend paid on each share of MeriStar's
common stock. Class C OP Units receive a non-cumulative, quarterly distribution
equal to $0.5575 per Class C OP Unit until such time as the dividend rate on
MeriStar's common stock exceeds $0.5575 whereupon the Class C OP Units
automatically convert into Common OP Units. Class D OP Units pay a 6.5%
cumulative annual preferred return based on an assumed price per common share of
$22.16, compounded quarterly to the extent not paid on a current basis. The
Partnership may redeem them at any time after April 1, 2000 at a price of $22.16
per share for cash or, at MeriStar's option, for shares of MeriStar common stock
having a value equal to the redemption price. The holders have the option to
redeem the Class D OP Units at any time after April 1, 2004 for cash or, at the
holders option, for shares of MeriStar common stock having a value equal to
$22.16. All net income earned and capital proceeds received by the Partnership,
after payment of the annual preferred return on Class D OP units, are shared by
the holders of the Common OP Units. As of December 31, 2000 and 1999,
outstanding OP Units were 48,459,145 and 51,800,888 respectively.

During 1999, 65,875 Common OP Units were issued to partially finance the
purchase of a hotel and 974,588 Common OP units were issued as a conditional
component of a purchase agreement for a hotel purchased in 1998. During 1998,
962,858 Common and Class B OP Units were issued to partially finance the
purchases of certain hotels and 3,305,175 Common OP Units were issued to former
holders of AGH OP Units. During 1997, the Partnership issued 1,483,759 Common
and Class B OP Units and 392,157 Class D OP Units to partially finance the
purchases of certain hotels and lease contracts on other hotels.

On March 21, 2000, June 21, 2000, September 25, 2000, and December 20,
2000, the Partnership declared its first, second, third and fourth quarter
distributions, respectively, equivalent to an annual rate of $2.02 per Common
and Class B OP Unit and $2.23 per Class C OP Unit in the Partnership. The amount
of the distribution for each quarter was $0.505 per Common and Class B OP Unit
and $0.5575 per Class C OP Unit and was paid on April 28, 2000, July 31, 2000,
October 31, 2000 and January 31, 2001, respectively.

F-28
195
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

On March 17, 1999, June 21, 1999, September 15, 1999, and December 6, 1999,
the Partnership declared its first, second, third and fourth quarter
distributions, respectively, equivalent to an annual rate of $2.02 per Common
and Class B OP Unit and $2.23 per Class C OP Unit in the Partnership. The amount
of the distribution for each quarter was $0.505 per Common and Class C OP Unit
and $0.5575 per Class C OP Unit and was paid on April 30, 1999, July 30, 1999,
October 29, 1999 and January 31, 2000, respectively.

On September 2, 1998 and November 4, 1998, respectively, the Partnership
declared its third and fourth quarter distributions, equivalent to an annual
rate of $2.02 per Common and Class B OP Unit and $2.23 per Class C OP Unit in
the Partnership. The third quarter distribution was paid on a prorated basis
from August 4, 1998 (the first day of operations following the Merger) through
September 30, 1998. The amount of the distribution was $0.31837 per Common and
Class B OP Unit and was paid on October 30, 1998. The fourth quarter
distribution of $0.505 per Common and Class B OP Unit and $0.5575 per Class C OP
Unit was paid on January 29, 1999.

When MeriStar, the general partner, repurchases its outstanding common
stock, the Partnership repurchases a matching number of units held by MeriStar
at an equal price. In September 1999, MeriStar's Board of Directors authorized
the repurchase of up to five million shares of its common stock from time to
time in open market or privately negotiated transactions. As of December 31,
2000, MeriStar has repurchased a total of 4,083,204 shares for $72,354 which has
been recorded as a reduction to partners' capital as a result of the redemption
of units held by MeriStar to fund the repurchase.

F-29
196
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

9. EARNINGS PER UNIT

The following is a reconciliation of the numerators and denominators of the
basic and diluted earnings per unit ("EPU") computations for income before
extraordinary gain (loss):

<Table>
<Caption>
YEAR ENDED DECEMBER 31,
-----------------------------
2000 1999 1998
-------- -------- -------

Basic EPU Computation:
Net income before extraordinary gain (loss)......... $114,636 $116,207 $86,304
Distributions paid related to unvested restricted
stock of MeriStar................................ (1,168) -- --
Preferred distributions............................. (565) (565) (650)
-------- -------- -------
Income before extraordinary gain (loss) available to
common unitholders............................... 112,903 115,642 85,654
Weighted average number of OP Units outstanding..... 50,122 52,153 36,021
-------- -------- -------
Basic EPU before extraordinary gain (loss).......... $ 2.25 $ 2.22 $ 2.38
======== ======== =======
Diluted EPU Computation:
Income before extraordinary gain (loss) available to
common unitholders............................... $112,903 $115,642 $85,654
Preferred distributions............................. 565 565 650
Interest on convertible debt of MeriStar............ 7,338 8,137 6,377
Distributions paid related to unvested restricted
stock of MeriStar................................ 254 -- --
-------- -------- -------
Adjusted net income................................. 121,060 124,344 92,681
Weighted average number of OP units outstanding..... 50,122 52,153 36,021
OP Unit equivalents:
Stock options of MeriStar........................ 208 102 383
Class D Preferred OP Units....................... 392 392 392
Convertible debt of MeriStar..................... 4,612 5,066 4,454
Restricted stock of MeriStar..................... 126 -- --
-------- -------- -------
Weighted average number of diluted OP units
outstanding.................................... 55,460 57,713 41,250
-------- -------- -------
Diluted EPU before extraordinary gain (loss)..... $ 2.18 $ 2.15 $ 2.25
======== ======== =======
</Table>

10. RELATED-PARTY TRANSACTIONS

Pursuant to an intercompany agreement, the Partnership and OpCo provide
each other with, among other things, reciprocal rights to participate in certain
transactions entered into by each party. In particular, OpCo has a right of
first refusal to become the lessee of any real property acquired by the
Partnership. OpCo also may provide the Partnership with certain services
including administrative, renovation supervision, corporate, accounting,
finance, insurance, legal, tax, information technology, human resources,
acquisition identification and due diligence, and operational services, for
which OpCo is compensated in an amount that the Partnership would be charged by
a third party for comparable services. During the years ended December 31, 2000,
1999 and 1998, the Partnership paid OpCo $1,165, $1,600 and $781 respectively,
for such services.

F-30
197
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Summarized financial information of the Partnership's significant lessee,
OpCo, is as follows:

<Table>
<Caption>
2000 1999
---------- ----------

BALANCE SHEET DATA:
Total assets...................................... $ 339,118 $ 258,931
Total liabilities................................. $ 254,673 $ 179,168
</Table>

<Table>
<Caption>
2000 1999 1998
---------- ---------- --------

OPERATING DATA:
Revenue........................................... $1,411,619 $1,292,114 $562,347
Net income (loss)................................. $ (9,380) $ 6,685 $ 3,950
</Table>

OpCo has a revolving credit facility with the Partnership. On March 1,
2000, OpCo repaid the remaining balance of $57,110 on its revolving credit
agreement with the Partnership upon closing its bank revolving credit facility.
At this time, the revolving credit agreement was amended to reduce the maximum
borrowing limit from $75,000 to $50,000 and the interest rate on the facility
was changed from LIBOR plus 350 basis points to LIBOR plus 650 basis points.
During 2000, 1999 and 1998, the Partnership earned interest of $955, $4,907, and
$1,967, respectively, from this facility. There were no amounts outstanding
under this facility at December 31, 2000.

In order for AGH to qualify as a REIT prior to the Merger, AGH's operating
partnership sold certain personal property relating to certain of the hotels
acquired by AGH in connection with its initial public offering to AGH Leasing,
L.P. (which has since come under the control of OpCo) for $315, which amount was
paid by issuance of a promissory note to AGH's operating partnership. The note
was transferred to the Partnership in connection with the Merger. The promissory
note bears interest at the rate of 10.0% per annum and requires the payment of
quarterly installments of principal and interest over a five-year period ending
on July 31, 2000. This note was repaid during 2000.

Certain members of management and their respective affiliates owned equity
interests relating to a hotel which was acquired by the Partnership in January
1999. Such persons and affiliates received an aggregate of $1,488 of the
Partnership's OP Units in exchange for such interests in the hotel.

11. STOCK-BASED COMPENSATION

MeriStar sponsors a restricted stock plan and a stock option plan (the
"Plans") in which Partnership employees participate. Upon issuance of any stock,
MeriStar is obligated to contribute the proceeds to the Company in exchange for
an equal number of OP units.

Stock Options

At the date of the Merger, CapStar had outstanding approximately 1,758,000
options (the "CapStar Options") under an equity incentive plan. As a result of
the Merger, all holders of CapStar Options received one option in MeriStar and
one option in OpCo, and the original exercise price of the CapStar Options was
allocated between the two companies. In addition, approximately 1,060,000 of the
CapStar Options became fully vested as of the Merger date.

In connection with the Merger, a new equity incentive plan (the "Equity
Incentive Plan") was adopted. This plan authorizes 4,549,561 shares of common
stock to be awarded. Awards may be granted to officers or other key employees of
MeriStar or an affiliate. These shares are exercisable in three annual
installments and expire ten years from the grant date.

F-31
198
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Stock option activity for 2000, 1999 and 1998 is as follows:

<Table>
<Caption>
NUMBER OF AVERAGE
SHARES OPTION PRICE
--------- ------------

Balance, January 1, 1998.................................... 1,601,406 $26.28
Granted................................................... 2,171,796 24.78
Exercised................................................. (37,823) 17.45
Forfeited................................................. (32,000) 29.44
--------- ------
Balance, December 31, 1998.................................. 3,703,379 24.80
Granted................................................... 1,015,750 19.37
Exercised................................................. (94,012) 15.64
Forfeited................................................. (264,064) 27.87
--------- ------
Balance, December 31, 1999.................................. 4,361,053 23.56
Granted................................................... 584,875 16.13
Exercised................................................. (47,153) 17.26
Forfeited................................................. (113,441) 28.62
--------- ------
Balance, December 31, 2000.................................. 4,785,334 $22.68
========= ======
Shares exercisable at December 31, 1998..................... 2,231,072 $24.63
========= ======
Shares exercisable at December 31, 1999..................... 2,577,620 $24.53
========= ======
Shares exercisable at December 31, 2000..................... 3,482,816 $23.99
========= ======
</Table>

The following table summarizes information about stock options outstanding
at December 31, 2000:

<Table>
<Caption>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
------------------------------------ ----------------------
WEIGHTED
AVERAGE WEIGHTED WEIGHTED
REMAINING AVERAGE AVERAGE
RANGE OF NUMBER CONTRACTUAL EXERCISE NUMBER EXERCISE
EXERCISE PRICES OUTSTANDING LIFE PRICE EXERCISABLE PRICE
- --------------- ----------- ----------- -------- ----------- --------

$14.88 to $19.19 1,978,572 7.58 $17.17 1,051,410 $16.59
$19.75 to $25.31 1,160,502 7.04 21.62 852,206 21.68
$25.80 to $31.42 1,435,280 6.02 29.98 1,435,280 29.98
$31.51 to $32.08 210,980 7.00 32.05 143,920 32.04
--------- ---- ------ --------- ------
$14.88 to $32.08 4,785,334 6.96 $22.75 3,482,816 $23.99
========= ==== ====== ========= ======
</Table>

Other Stock Compensation

In conjunction with the Merger, holders of CapStar options were granted a
total of 150,000 shares of stock with a value of $3,205. This restricted stock
vests ratably over a three-year period.

As of December 31, 2000, MeriStar granted 586,500 shares of restricted
stock. This restricted stock vests ratably over a three-year or five-year
period. The Partnership incurred $3,070 in compensation expense in 2000 related
to the amortization of this restricted stock.

As of December 31, 2000, the Partnership has issued 462,500 Profits-Only OP
Units to certain of the Partnership's executive officers pursuant to a
Profits-Only Operating Partnership Units Plan. The units vest over three years
based on achieving certain operating performance criteria and upon the
occurrence of certain other events. The Profits-Only OP Units are subject to
variable plan accounting.

F-32
199
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

12. COMMITMENTS AND CONTINGENCIES

The Partnership leases land at certain hotels from third parties. Certain
leases contain contingent rent features based on gross revenues at the
respective property. Future minimum lease payments required under these
operating leases as of December 31, 2000 were as follows:

<Table>

2001...................................................... $ 1,556
2002...................................................... 1,556
2003...................................................... 1,556
2004...................................................... 1,559
2005...................................................... 1,559
Thereafter................................................ 57,396
-------
$65,182
=======
</Table>

Until January 1, 2001 the Partnership leased all of its hotels to OpCo and
one other lessee under non-cancelable participating leases that expire from 2009
to 2011. Beginning January 1, 2001, the Partnership will lease eight hotels to
one lessee under non-cancelable participating leases that expire in 2009. The
Partnership also leases certain office, retail and parking space to outside
parties under non-cancelable operating leases with initial or remaining terms in
excess of one year. Future minimum rental receipts under these non-cancelable
leases as of December 31, 2000 were as follows:

<Table>

2001..................................................... $ 20,289
2002..................................................... 19,801
2003..................................................... 18,937
2004..................................................... 18,590
2005..................................................... 16,945
Thereafter............................................... 63,428
--------
$157,990
========
</Table>

In the course of the Partnership's normal business activities, various
lawsuits, claims and proceedings have been or may be instituted or asserted
against the Partnership. Based on currently available facts, management believes
that the disposition of matters that are pending or asserted will not have a
material adverse effect on the consolidated financial position, results of
operations or liquidity of the Partnership.

13. ACQUISITIONS AND DISPOSITIONS

During 2000, the Partnership sold three limited service hotels and received
proceeds of $24,148. This resulted in a gain on sale of assets of $3,495
($3,439, net of tax). The Partnership also purchased a full service hotel for
$19,400. Of the $19,400, $11,400 was paid in cash and $8,000 will be paid from
the hotel's future cash flow within the next five years. The acquisition was
funded using existing cash and borrowings on the Credit Facility.

During 1999, the Partnership acquired one hotel for a purchase price of
$10,642 of cash and $1,488 of OP Units. The acquisition was funded using
existing cash and borrowings on the Credit Facility. The Partnership also sold 2
hotels during 1999 for a total price of $8,900. The resulting gain on the sales
was immaterial.

During 1998, the Partnership acquired 70 hotels (containing 17,332 rooms),
of which 53 were acquired pursuant to the Merger. MeriStar purchased AGH for
approximately $1,306,000. MeriStar contributed the net assets acquired to the
Partnership in exchange for approximately 23,913,000 OP Units. The total
purchase price for the remaining 17 acquired hotels during 1998 was $549,068 of
cash and

F-33
200
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

$16,932 of OP Units. The cash portions of these acquisitions were funded through
borrowings on the Credit Facility and a prior credit facility.

The following unaudited pro forma information is presented as if the
Merger, the Spin-Off and all 117 hotels owned at December 31, 1998 had been
acquired at the beginning of 1998. The pro forma information is provided for
informational purposes only. It is based on historical information and does not
necessarily reflect the actual results that would have occurred nor is it
necessarily indicative of future results of operations of the Company. Pro forma
information for 1998 for total revenue, net income and diluted EPU is $332,299,
$107,698 and $2.44, respectively.

F-34
201
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

14. CONSOLIDATING FINANCIAL INFORMATION

Certain of the Partnership's wholly-owned subsidiaries, together with the
Partnership, are guarantors of the Credit Facility and $500 million of senior
unsecured notes issued subsequent to December 31, 2000. The following tables
present consolidating information for the guarantor subsidiaries.

MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

CONSOLIDATING BALANCE SHEET
DECEMBER 31, 2000

<Table>
<Caption>
MERISTAR
HOSPITALITY GUARANTOR NON-GUARANTOR TOTAL
OP, L.P. SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
----------- ------------ ------------- ------------ ------------

ASSETS

Investments in hotel
properties, net.............. $ 7,443 $1,448,104 $1,450,954 $ -- $2,906,501
Cash and cash equivalents...... 242 -- -- -- 242
Accounts receivable, net....... 94 1,525 1,214 -- 2,833
Prepaid expenses and other..... 2,563 381 (177) -- 2,767
Notes receivable............... 87,887 -- -- (87,887) --
Due from Lessee................ (12,130) (450) 34,801 -- 22,221
Due from subsidiaries.......... (194,739) 193,304 1,435 -- --
Investments in and advances to
affiliates................... 2,661,521 59,662 8,487 (2,687,474) 42,196
Restricted cash................ 14,709 -- 5,209 -- 19,918
Intangible assets, net......... 7,531 1,432 859 -- 9,822
---------- ---------- ---------- ----------- ----------
$2,575,121 $1,703,958 $1,502,782 $(2,775,361) $3,006,500
========== ========== ========== =========== ==========

LIABILITIES, MINORITY INTERESTS AND PARTNERS' CAPITAL

Accounts payable, accrued
expenses and other
liabilities.................. $ 32,061 $ 24,189 $ 15,947 $ -- $ 72,197
Accrued interest............... 23,701 -- 4,664 -- 28,365
Income taxes payable........... 921 -- -- -- 921
Distributions payable.......... 24,581 -- -- -- 24,581
Deferred income taxes.......... 8,113 -- -- -- 8,113
Notes payable to MeriStar...... 356,729 -- -- -- 356,729
Mortgages and notes payable.... 897,698 88,189 383,590 (87,887) 1,281,590
---------- ---------- ---------- ----------- ----------
Total liabilities.... 1,343,804 112,378 404,201 (87,887) 1,772,496
Minority interests............. -- 2,687 -- -- 2,687
Redeemable OP units at
redemption value............. 88,545 -- -- -- 88,545
Partners' capital.............. 1,142,772 1,588,893 1,098,581 (2,687,474) 1,142,772
---------- ---------- ---------- ----------- ----------
$2,575,121 $1,703,958 $1,502,782 $(2,775,361) $3,006,500
========== ========== ========== =========== ==========
</Table>

F-35
202
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

CONSOLIDATING BALANCE SHEET
DECEMBER 31, 1999

<Table>
<Caption>
MERISTAR
HOSPITALITY GUARANTOR NON-GUARANTOR TOTAL
OP, L.P. SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
----------- ------------ -------------- ------------ ------------

ASSETS

Investments in hotel
properties, net............. $ 2,129 $1,378,706 $1,555,458 $ -- $2,936,293
Cash and cash equivalents..... 2,549 -- -- -- 2,549
Accounts receivable, net...... -- 1,076 252 -- 1,328
Prepaid expenses and other.... 5,873 2,698 566 -- 9,137
Notes receivable.............. 144,319 -- -- (87,209) 57,110
Due from Lessee............... (20,583) (3,472) 35,531 -- 11,476
Due from subsidiaries......... (181,843) 70,174 111,669 -- --
Investments in and advances to
affiliates.................. 2,674,559 60,097 8,487 (2,703,058) 40,085
Restricted cash............... 13,100 43 4,045 -- 17,188
Intangible assets, net........ 8,088 2,071 771 -- 10,930
---------- ---------- ---------- ----------- ----------
$2,648,191 $1,511,393 $1,716,779 $(2,790,267) $3,086,096
========== ========== ========== =========== ==========

LIABILITIES, MINORITY INTERESTS AND PARTNERS' CAPITAL

Accounts payable, accrued
expenses and other
liabilities................. $ 23,607 $ 17,793 $ 14,466 $ -- $ 55,866
Accrued interest.............. 26,072 -- 5,308 -- 31,380
Income taxes payable.......... 730 -- -- -- 730
Distributions payable......... 26,263 -- -- -- 26,263
Deferred income taxes......... 7,477 -- -- -- 7,477
Note payable to MeriStar...... 374,541 -- -- -- 374,541
Mortgages and notes payable... 904,582 90,627 394,230 (87,209) 1,302,230
---------- ---------- ---------- ----------- ----------
Total liabilities... 1,363,272 108,420 414,004 (87,209) 1,798,487
Minority interests............ -- 2,690 -- -- 2,690
Redeemable OP units at
redemption value............ 81,401 -- -- -- 81,401
Partners' capital............. 1,203,518 1,400,283 1,302,775 (2,703,058) 1,203,518
---------- ---------- ---------- ----------- ----------
$2,648,191 $1,511,393 $1,716,779 $(2,790,267) $3,086,096
========== ========== ========== =========== ==========
</Table>

F-36
203
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

CONSOLIDATING STATEMENT OF OPERATIONS
DECEMBER 31, 2000

<Table>
<Caption>
MERISTAR
HOSPITALITY GUARANTOR NON-GUARANTOR TOTAL
OP, L.P. SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
----------- ------------ ------------- ------------ ------------

Revenue:
Participating lease revenue...... $ 6,544 $183,959 $201,226 -- $391,729
Office rental, parking and other
revenue....................... 2,149 2,404 4,403 -- 8,956
--------- -------- -------- --------- --------
Total revenue............ 8,693 186,363 205,629 -- 400,685
Expenses:
Office rental, parking and other
operating expenses............ -- 928 1,803 -- 2,731
Undistributed operating expenses:
Administrative and general.... 8,820 475 150 -- 9,445
Property taxes, insurance and
other....................... 2,732 22,822 21,927 -- 47,481
Depreciation and
amortization................ 4,588 52,767 53,333 -- 110,688
--------- -------- -------- --------- --------
Total operating
expenses............... 16,140 76,992 77,213 -- 170,345
--------- -------- -------- --------- --------
Net operating income (loss)........ (7,447) 109,371 128,416 -- 230,340
Interest expense, net.............. 86,748 4,619 26,157 -- 117,524
Equity in earnings of consolidated
entities......................... 210,453 -- -- (210,453) --
--------- -------- -------- --------- --------
Income before minority interests,
income taxes, gain on sale of
assets, and extraordinary gain... 116,258 104,752 102,259 (210,453) 112,816
Minority interests................. -- (3) -- -- (3)
--------- -------- -------- --------- --------
Income before income taxes, gain on
sale of assets, and extraordinary
gain............................. 116,258 104,755 102,259 (210,453) 112,819
Income taxes....................... 1,622 -- -- -- 1,622
--------- -------- -------- --------- --------
Income before gain on sale of
assets, and extraordinary gain... 114,636 104,755 102,259 (210,453) 111,197
Gain on sale of assets, net........ -- -- 3,439 -- 3,439
Extraordinary gain on early
extinguishment of debt, net...... 3,400 -- -- -- 3,400
--------- -------- -------- --------- --------
Net income......................... $ 118,036 $104,755 $105,698 $(210,453) $118,036
========= ======== ======== ========= ========
</Table>

F-37
204
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

CONSOLIDATING STATEMENT OF OPERATIONS
DECEMBER 31, 1999

<Table>
<Caption>
MERISTAR
HOSPITALITY GUARANTOR NON-GUARANTOR
OP, L.P. SUBSIDIARIES SUBSIDIARIES ELIMINATIONS TOTAL CONSOLIDATED
------------ ------------ -------------- ------------ ------------------

Revenue:
Participating lease revenue.... $ 7,373 $169,392 $191,247 -- $368,012
Office rental, parking and
other revenue............... 656 2,012 4,140 -- 6,808
-------- -------- -------- --------- --------
Total revenue.......... 8,029 171,404 195,387 -- 374,820
Expenses:
Office rental, parking and
other operating expenses.... 21 578 1,365 -- 1,964
Undistributed operating
expenses:
Administrative and
general................... 5,209 444 82 -- 5,735
Property taxes, insurance
and other................. 2,818 23,819 20,390 -- 47,027
Depreciation and
amortization.............. 4,196 46,442 51,157 -- 101,795
-------- -------- -------- --------- --------
Total operating
expenses............. 12,244 71,283 72,994 -- 156,521
-------- -------- -------- --------- --------
Net operating income (loss)...... (4,215) 100,121 122,393 -- 218,299
Interest expense, net............ 80,798 3,083 16,506 -- 100,387
Equity in earnings of
consolidated entities.......... 200,350 -- -- (200,350) --
-------- -------- -------- --------- --------
Income before minority interests,
income taxes, and extraordinary
loss........................... 115,337 97,038 105,887 (200,350) 117,912
Minority interests............... -- 24 -- -- 24
-------- -------- -------- --------- --------
Income before income taxes and
extraordinary loss............. 115,337 97,014 105,887 (200,350) 117,888
Income taxes..................... 1,681 -- -- -- 1,681
-------- -------- -------- --------- --------
Income before extraordinary
loss........................... 113,656 97,014 105,887 (200,350) 116,207
Extraordinary loss on early
extinguishment of debt, net.... (2,000) (703) (1,848) -- (4,551)
-------- -------- -------- --------- --------
Net income....................... $111,656 $ 96,311 $104,039 $(200,350) $111,656
======== ======== ======== ========= ========
</Table>

F-38
205
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

CONSOLIDATING STATEMENT OF OPERATIONS
DECEMBER 31, 1998

<Table>
<Caption>
MERISTAR
HOSPITALITY GUARANTOR NON-GUARANTOR TOTAL
OP, L.P. SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------------ ------------ -------------- ------------ ------------

Revenue:
Participating lease
revenue................... $ 411 $ 51,007 $ 84,576 -- $135,994
Hotel operations:
Rooms..................... -- 131,729 143,881 -- 275,610
Food and beverage......... -- 53,437 31,937 -- 85,374
Other operating
departments............ -- 11,298 8,198 -- 19,496
Office rental, parking and
other revenue............. 356 3,014 2,187 -- 5,557
-------- -------- -------- --------- --------
Total revenue.......... 767 250,485 270,779 -- 522,031
Hotel operating expenses by
department:
Rooms..................... -- 32,378 32,670 -- 65,048
Food and beverage......... -- 42,941 24,552 -- 67,493
Other operating
departments............ -- 5,831 4,144 -- 9,975
Office rental, parking and
other operating
expenses.................. 1 1,586 1,126 -- 2,713
Undistributed operating
expenses:
Administrative and
general................ 1,504 27,343 23,366 -- 52,213
Property operating
costs.................. -- 29,920 28,691 -- 58,611
Property taxes, insurance
and other.............. 2,815 14,161 12,264 -- 29,240
Lease expense............. -- 1,449 33,192 -- 34,641
Depreciation and
amortization........... 338 28,095 30,409 -- 58,842
Spin-off costs............ 7,345 -- -- -- 7,345
-------- -------- -------- --------- --------
Total operating
expenses............. 12,003 183,704 190,414 -- 386,121
Net operating income (loss)...... (11,236) 66,781 80,365 -- 135,910
Interest expense, net............ 28,350 12,283 9,859 -- 50,492
Equity in earnings of
consolidated entities.......... 126,635 -- -- (126,635) --
Income before minority interests,
income taxes, and extraordinary
loss........................... 87,049 54,498 70,506 (126,635) 85,418
Minority interests............... -- (2,185) -- -- (2,185)
-------- -------- -------- --------- --------
Income before income taxes and
extraordinary loss............. 87,049 56,683 70,506 (126,635) 87,603
Income taxes..................... 1,299 -- -- -- 1,299
-------- -------- -------- --------- --------
Income before extraordinary
loss........................... 85,750 56,683 70,506 (126,635) 86,304
Extraordinary loss on early
extinguishment of debt, net of
tax effect..................... (684) (390) (164) -- (1,238)
-------- -------- -------- --------- --------
Net income....................... $ 85,066 $ 56,293 $ 70,342 $(126,635) $ 85,066
======== ======== ======== ========= ========
</Table>

F-39
206
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

CONSOLIDATING STATEMENT OF CASH FLOWS
DECEMBER 31, 2000

<Table>
<Caption>
MERISTAR
HOSPITALITY GUARANTOR NON-GUARANTOR TOTAL
OP, L.P. SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------------ ------------ -------------- ------------ ------------

Cash flows provided by (used in)
operating activities.......... $ (74,731) $ 31,632 $ 267,187 $ -- $ 224,088
Cash flows provided by (used in)
investing activities.......... 360,238 (118,154) 53,522 (309,892) (14,286)
Cash flows provided by (used in)
financing activities.......... (287,814) 86,458 (320,709) 309,892 (212,173)
Effect of exchange rate changes
on cash and cash
equivalents................... -- 64 -- -- 64
--------- --------- --------- --------- ---------
Net decrease in cash and cash
equivalents................... (2,307) -- -- -- (2,307)
Cash and cash equivalents,
beginning of year............. 2,549 -- -- -- 2,549
--------- --------- --------- --------- ---------
Cash and cash equivalents, end
of year....................... $ 242 $ -- $ -- $ -- $ 242
========= ========= ========= ========= =========
</Table>

MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

CONSOLIDATING STATEMENT OF CASH FLOWS
DECEMBER 31, 1999

<Table>
<Caption>
MERISTAR
HOSPITALITY GUARANTOR NON-GUARANTOR TOTAL
OP, L.P. SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
----------- ------------ -------------- ------------ ------------

Cash flows provided by (used in)
operating activities........... $(184,109) $126,905 $ 285,533 $ -- $ 228,329
Cash flows provided by (used) in
investing activities........... 277,432 (85,854) 137,685 (527,215) (187,952)
Cash flows provided by (used in)
financing activities........... (93,411) (42,534) (423,218) 527,215 (41,948)
Effect of exchange rate changes
on cash and cash equivalents... -- (53) -- -- (53)
--------- -------- --------- --------- ---------
Net decrease in cash and cash
equivalents.................... (88) (1,536) -- -- (1,624)
Cash and cash equivalents,
beginning of year.............. 2,637 1,536 -- -- 4,173
--------- -------- --------- --------- ---------
Cash and cash equivalents, end of
year........................... $ 2,549 $ -- $ -- -- $ 2,549
========= ======== ========= ========= =========
</Table>

F-40
207
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

CONSOLIDATING STATEMENT OF CASH FLOWS
DECEMBER 31, 1998

<Table>
<Caption>
MERISTAR
HOSPITALITY GUARANTOR NON-GUARANTOR TOTAL
OP, L.P. SUBSIDIARIES SUBSIDIARIES CONSOLIDATED
--------------- ------------ -------------- ------------

Cash flows provided by (used in) operating
activities.............................. $(232,033) $ 435,117 $ (16,193) $ 186,891
Cash flows used in investing activities... (134,404) (520,784) (130,317) (785,505)
Cash flows provided by financing
activities.............................. 291,881 84,575 144,001 520,457
Effect of exchange rate changes on cash
and cash equivalents.................... -- 204 -- 204
--------- --------- --------- ---------
Net decrease in cash and cash
equivalents............................. (74,556) (888) (2,509) (77,953)
Cash and cash equivalents, beginning of
year.................................... 77,193 2,424 2,509 82,126
--------- --------- --------- ---------
Cash and cash equivalents, end of year.... $ 2,637 $ 1,536 $ -- $ 4,173
========= ========= ========= =========
</Table>

15. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

The following is a summary of the Partnership's quarterly results of
operations:

<Table>
<Caption>
2000 1999
--------------------------------------- ---------------------------------------
FIRST SECOND THIRD FOURTH FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER QUARTER
------- ------- -------- -------- ------- ------- -------- --------

Total revenue........... $67,080 $81,515 $117,607 $134,483 $64,072 $74,034 $103,193 $133,521
Total operating
expenses.............. 41,339 43,331 42,206 43,469 39,210 38,355 37,388 41,568
Net operating income.... 25,741 38,184 75,401 91,014 24,682 35,679 65,805 91,953
Income before
extraordinary (loss)
gain.................. (2,986) 11,851 45,633 60,138 755 9,150 41,145 65,157
Net income.............. 414 11,851 45,633 60,138 755 9,150 36,594 65,157
Diluted earnings per
unit.................. $ (0.06) $ 0.23 $ 0.85 $ 1.15 $ 0.01 $ 0.17 $ 0.75 $ 1.17
</Table>

16. SUPPLEMENTAL CASH FLOW INFORMATION

<Table>
<Caption>
2000 1999 1998
-------- ------- ----------

Cash paid for interest:
Interest, net of capitalized interest of $8,613,
$12,540 and $5,182, respectively................ $120,539 $93,491 $ 48,156
Income taxes....................................... 699 1,009 2,388
Non-cash investing and financing activities:
Long-term debt assumed in purchase of property and
equipment....................................... -- -- 543
OP Units issued in purchase of property and
equipment....................................... -- 1,488 16,932
Redemption of redeemable OP Units.................. 24 29,412 31,430
Deferred purchase price............................ 8,000 -- --
Book value of assets distributed to spun-off
affiliate....................................... -- -- 41,449
Book value of liabilities distributed to spun-off
affiliate....................................... -- -- (11,768)
Book value of debt distributed to spun-off
affiliate....................................... -- -- (1,116)
Fair value of assets acquired in Merger............ -- -- 1,306,018
Fair value of liabilities assumed in Merger........ -- -- (26,167)
Fair value of debt assumed in Merger............... -- -- (523,944)
</Table>

F-41
208
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

17. SUBSEQUENT EVENTS

On January 26, 2001, the Partnership sold $300,000 of 9.0% senior notes due
2008 and $200,000 of 9.13% senior notes due 2011 (collectively the "Senior
Unsecured Notes"). The notes are unsecured obligations of the Partnership.
MeriStar, together with a number of the Partnership's subsidiaries, guarantee
payment of principal and interest on the notes on a senior unsecured basis. The
net proceeds from the sale of $492,000 were used to repay amounts outstanding
under the Credit Facility and to make payments to terminate certain agreements
that hedged variable interest rates of the loans that were repaid. The
terminated swap agreements had notional amounts of $300,000. The Partnership
recognized a loss of $9,297 on these terminations.

In the first quarter 2001, the Partnership wrote-off its $2,112 investment
in STS Hotel Net after determining that the carrying value of the investment was
not recoverable.

On May 2, 2001, the Partnership paid $1,504 to acquire four hotel leases
from affiliates of Prime Hospitality Corporation. Concurrently, the Partnership
signed long-term management contracts with OpCo for these properties.

On May 9, 2001, the Partnership and MeriStar entered into an Agreement and
Plan of Merger with Felcor Lodging Trust Incorporated ("Felcor")and its
operating partnership. Under the merger agreement, a wholly-owned subsidiary of
FelCor's operating partnership will merge with and into the Partnership, and
MeriStar will merge with and into Felcor. Holders of MeriStar common stock will
receive 0.784 of a share of Felcor common stock and $4.60 in cash for each share
of MeriStar's common stock. Holders of OP Units will receive $4.60 in cash and
0.784 FelCor operating partnership units. Class D Preferred OP Units will get
Series D preferred units in FelCor operating partnership on a one for one basis.
The merger agreement requires the approval of holders of a majority of
MeriStar's outstanding shares of common stock and holders of a majority of the
outstanding shares of common stock of Felcor. MeriStar currently expects the
merger to close during the third quarter of 2001.

F-42
209

MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

SCHEDULE III -- REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2000
(DOLLARS IN THOUSANDS)
<Table>
<Caption>
COSTS SUBSEQUENT
INITIAL COST TO COMPANY TO ACQUISITION
----------------------- ----------------
BUILDING BUILDING
AND AND
ENCUM- IMPROVE- IMPROVE-
DESCRIPTION BRANCES LAND MENTS LAND MENTS
- ----------- ------- --------- ----------- ----- --------

HOTEL ASSETS:
Salt Lake Airport Hilton, UT.............. -- $ 770 $ 12,828 $ -- $ 2,827
Radisson Hotel, Schaumburg, IL............ -- 1,080 5,131 -- 2,282
Sheraton Hotel, Colorado Springs, CO...... (1) 1,071 14,592 1 3,728
Hilton Hotel, Bellevue, WA................ 48 5,211 6,766 -- 3,186
Marriott Hotel, Somerset, NJ.............. (1) 1,978 23,001 -- 4,390
Westin Atlanta Airport, Atlanta, GA....... -- 2,650 15,926 (300) 9,403
Sheraton Hotel, Charlotte, NC............. (1) 4,700 11,057 -- 3,906
Radisson Hotel Southwest, Cleveland, OH... -- 1,330 6,353 -- 4,547
Orange County Airport Hilton, Irvine,
CA...................................... (1) 9,990 7,993 -- 3,133
The Latham Hotel, Washington, DC.......... -- 6,500 5,320 -- 3,889
Hilton Hotel, Arlington, TX............... (1) 1,836 14,689 79 2,828
Hilton Hotel, Arlington, VA............... -- 4,000 15,069 -- 496
Southwest Hilton, Houston, TX............. -- 2,300 15,665 -- 1,244
Embassy Suites, Englewood, CO............. (1) 2,500 20,700 -- 2,782
Holiday Inn, Colorado Springs, CO......... -- 1,600 4,232 -- 1,057
Embassy Row Hilton, Washington, DC........ -- 2,200 13,247 -- 2,240
Hilton Hotel & Towers, Lafayette, LA...... (1) 1,700 16,062 -- 1,808
Hilton Hotel, Sacramento, CA.............. (1) 4,000 16,013 -- 1,678
Santa Barbara Inn, Santa Barbara, CA...... -- 2,600 5,141 -- 1,110
San Pedro Hilton, San Pedro, CA........... -- 640 6,047 -- 2,300
Doubletree Hotel, Albuquerque, NM......... (1) 2,700 15,075 -- 823
Westchase Hilton & Towers, Houston, TX.... (1) 3,000 23,991 -- 1,531
Four Points Hotel, Cherry Hill, NJ........ -- 1,700 4,178 -- 2,181
Sheraton Great Valley Inn, Frazer, PA..... -- 2,150 11,653 11 2,712
Holiday Inn Calgary Airport, Calgary,
Alberta, Canada......................... -- 751 5,011 (36) 1,428
Sheraton Hotel Dallas, Dallas, TX......... -- 1,300 17,268 -- 2,358
Radisson Hotel Dallas, Dallas, TX......... -- 1,800 17,580 -- 1,466
Sheraton Hotel Guildford, Surrey, BC,
Canada.................................. -- 2,366 24,008 (112) (258)
Doubletree Guest Suites, Indianapolis,
IN...................................... 1,000 8,242 -- 893
Ramada Vancouver Centre, Vancouver, BC,
Canada.................................. -- 4,400 7,840 (208) 2,160
Holiday Inn Sports Complex, Kansas City,
MO...................................... -- 420 4,742 -- 1,551
Hilton Crystal City, Arlington, VA........ -- 5,800 29,879 -- 1,036
Doubletree Resort Hotel, Cathedral City,
CA...................................... -- 1,604 16,141 -- 2,837
Radisson Hotel & Suites, Chicago, IL...... 4,870 39,175 -- 1,793
Georgetown Inn, Washington, DC............ -- 6,100 7,103 -- 1,486
Embassy Suites Center City, Philadelphia,
PA...................................... (1) 5,500 26,763 -- 1,457
Doubletree Hotel Austin, Austin, TX....... (1) 2,975 25,678 -- 2,501
Radisson Plaza Hotel, Lexington, KY....... 240 1,100 30,375 -- 6,254
Jekyll Inn, Jekyll Island, GA............. -- -- 7,803 -- 3,218
Holiday Inn Metrotown, Burnaby, BC,
Canada.................................. -- 1,115 5,303 (53) 1,292
Embassy Suites International Airport,
Tucson, AZ.............................. -- 1,640 10,444 -- 2,214
Westin Morristown, NJ..................... -- 2,500 19,128 100 3,501
Doubletree Hotel Bradley International
Airport, Windsor Locks, CT.............. -- 1,013 10,228 87 1,422
Sheraton Hotel, Mesa, AZ.................. -- 1,850 16,938 -- 2,315
Metro Airport Hilton & Suites, Detroit,
MI...................................... -- 1,750 12,639 -- 1,311
Marriott Hotel, Los Angeles, CA........... -- 5,900 48,250 -- 7,208

GROSS AMOUNT AT END OF YEAR
---------------------------------
BUILDING ACCUM-
AND ULATED YEAR OF
IMPROVE- DEPRECIA- CONSTRUC- DATE
DESCRIPTION LAND MENTS TION TION ACQUIRED LIFE
- ----------- -------- ---------- --------- --------- -------- ----

HOTEL ASSETS:
Salt Lake Airport Hilton, UT.............. $ 770 $ 15,655 $ 2,184 1980 3/3/95 40
Radisson Hotel, Schaumburg, IL............ 1,080 7,413 908 1979 6/30/95 40
Sheraton Hotel, Colorado Springs, CO...... 1,072 18,320 2,387 1974 6/30/95 40
Hilton Hotel, Bellevue, WA................ 5,211 9,952 1,108 1979 8/4/95 40
Marriott Hotel, Somerset, NJ.............. 1,978 27,391 3,357 1978 10/3/95 40
Westin Atlanta Airport, Atlanta, GA....... 2,350 25,329 3,084 1982 11/15/95 40
Sheraton Hotel, Charlotte, NC............. 4,700 14,963 1,739 1985 2/2/96 40
Radisson Hotel Southwest, Cleveland, OH... 1,330 10,900 1,190 1978 2/16/96 40
Orange County Airport Hilton, Irvine,
CA...................................... 9,990 11,126 1,255 1976 2/22/96 40
The Latham Hotel, Washington, DC.......... 6,500 9,209 915 1981 3/8/96 40
Hilton Hotel, Arlington, TX............... 1,915 17,517 2,018 1983 4/17/96 40
Hilton Hotel, Arlington, VA............... 4,000 15,565 1,716 1990 8/23/96 40
Southwest Hilton, Houston, TX............. 2,300 16,909 1,728 1979 10/31/96 40
Embassy Suites, Englewood, CO............. 2,500 23,482 2,380 1986 12/12/96 40
Holiday Inn, Colorado Springs, CO......... 1,600 5,289 482 1974 12/17/96 40
Embassy Row Hilton, Washington, DC........ 2,200 15,487 1,482 1969 12/17/96 40
Hilton Hotel & Towers, Lafayette, LA...... 1,700 17,870 1,712 1981 12/17/96 40
Hilton Hotel, Sacramento, CA.............. 4,000 17,691 1,768 1983 12/17/96 40
Santa Barbara Inn, Santa Barbara, CA...... 2,600 6,251 602 1959 12/17/96 40
San Pedro Hilton, San Pedro, CA........... 640 8,347 753 1989 1/28/97 40
Doubletree Hotel, Albuquerque, NM......... 2,700 15,898 1,565 1975 1/31/97 40
Westchase Hilton & Towers, Houston, TX.... 3,000 25,522 2,485 1980 1/31/97 40
Four Points Hotel, Cherry Hill, NJ........ 1,700 6,359 553 1991 3/20/97 40
Sheraton Great Valley Inn, Frazer, PA..... 2,161 14,365 1,190 1971 3/27/97 40
Holiday Inn Calgary Airport, Calgary,
Alberta, Canada......................... 715 6,439 1,261 1981 4/1/97 40
Sheraton Hotel Dallas, Dallas, TX......... 1,300 19,626 1,771 1974 4/1/97 40
Radisson Hotel Dallas, Dallas, TX......... 1,800 19,046 1,746 1972 4/1/97 40
Sheraton Hotel Guildford, Surrey, BC,
Canada.................................. 2,254 23,750 3,558 1992 4/1/97 40
Doubletree Guest Suites, Indianapolis,
IN...................................... 1,000 9,135 824 1987 4/1/97 40
Ramada Vancouver Centre, Vancouver, BC,
Canada.................................. 4,192 10,000 1,605 1968 4/1/97 40
Holiday Inn Sports Complex, Kansas City,
MO...................................... 420 6,293 538 1975 4/30/97 40
Hilton Crystal City, Arlington, VA........ 5,800 30,915 2,681 1974 7/1/97 40
Doubletree Resort Hotel, Cathedral City,
CA...................................... 1,604 18,978 1,557 1985 7/1/97 40
Radisson Hotel & Suites, Chicago, IL...... 4,870 40,968 3,544 1971 7/15/97 40
Georgetown Inn, Washington, DC............ 6,100 8,589 655 1962 7/15/97 40
Embassy Suites Center City, Philadelphia,
PA...................................... 5,500 28,220 2,382 1963 8/12/97 40
Doubletree Hotel Austin, Austin, TX....... 2,975 28,179 2,295 1984 8/14/97 40
Radisson Plaza Hotel, Lexington, KY....... 1,100 36,629 2,876 1982 8/14/97 40
Jekyll Inn, Jekyll Island, GA............. -- 11,021 848 1971 8/20/97 40
Holiday Inn Metrotown, Burnaby, BC,
Canada.................................. 1,062 6,595 890 1989 8/22/97 40
Embassy Suites International Airport,
Tucson, AZ.............................. 1,640 12,658 901 1982 10/23/97 40
Westin Morristown, NJ..................... 2,600 22,629 1,626 1962 11/20/97 40
Doubletree Hotel Bradley International
Airport, Windsor Locks, CT.............. 1,100 11,650 838 1985 11/24/97 40
Sheraton Hotel, Mesa, AZ.................. 1,850 19,253 1,382 1985 12/5/97 40
Metro Airport Hilton & Suites, Detroit,
MI...................................... 1,750 13,950 995 1989 12/16/97 40
Marriott Hotel, Los Angeles, CA........... 5,900 55,458 3,956 1983 12/18/97 40
</Table>

F-43
210
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

SCHEDULE III -- REAL ESTATE AND ACCUMULATED DEPRECIATION -- (CONTINUED)
<Table>
<Caption>
COSTS SUBSEQUENT
INITIAL COST TO COMPANY TO ACQUISITION
----------------------- ----------------
BUILDING BUILDING
AND AND
ENCUM- IMPROVE- IMPROVE-
DESCRIPTION BRANCES LAND MENTS LAND MENTS
- ----------- ------- --------- ----------- ----- --------

Austin Hilton & Towers, TX................ -- 2,700 15,852 -- 2,674
Dallas Renaissance North, TX.............. -- 3,400 20,813 -- 3,550
Houston Sheraton Brookhollow Hotel, TX.... -- 2,500 17,609 -- 2,148
Seelbach Hilton, Louisville, KY........... -- 1,400 38,462 -- 5,550
Midland Hilton & Towers, TX............... -- 150 8,487 -- 1,715
Westin Oklahoma, OK....................... -- 3,500 27,588 -- 1,683
Sheraton Hotel, Columbia, MD.............. -- 3,600 21,393 -- 3,744
Radisson Cross Keys, Baltimore, MD........ -- 1,500 5,615 -- 1,492
Sheraton Fisherman's Wharf, San Francisco,
CA...................................... (1) 19,708 61,751 -- 2,985
Hartford Hilton, CT....................... -- 4,073 24,458 -- 2,824
Holiday Inn Dallas DFW Airport South,
TX...................................... 12,634 3,388 28,847 -- 8
Courtyard by Marriott Meadowlands, NJ..... 3,979 -- 9,649 -- 45
Hotel Maison de Ville, New Orleans, LA.... -- 292 3,015 -- (2)
Hilton Hotel Toledo, OH................... -- -- 11,708 -- 38
Holiday Inn Select Dallas DFW Airport
West, TX................................ -- 947 8,346 -- 213
Holiday Inn Select New Orleans
International Airport, LA............... (1) 3,040 25,616 -- 2,150
Crowne Plaza Madison, WI.................. (1) 2,629 21,634 -- 210
Wyndham Albuquerque Airport Hotel, NM..... -- -- 18,889 -- 112
Wyndham San Jose Airport Hotel, CA........ -- -- 35,743 -- 997
Holiday Inn Select Mission Valley, CA..... 2,410 20,998 -- 176
Sheraton Safari Hotel, Lake Buena Vista,
FL...................................... -- 4,103 35,263 -- 9,062
Hilton Monterey, CA....................... -- 2,141 17,666 -- 4,964
Hilton Hotel Durham, NC................... -- 1,586 15,577 -- 2,390
Wyndham Garden Hotel Marietta, GA......... -- 1,900 17,077 -- 611
Westin Resort Key Largo, FL............... -- 3,167 29,190 -- 340
Doubletree Guest Suites Atlanta, GA....... 8,678 2,236 18,514 -- 3,798
Radisson Hotel Arlington Heights, IL...... -- 1,540 12,645 -- 6,848
Holiday Inn Select Bucks County, PA....... -- 2,610 21,744 -- 2,773
Hilton Hotel Cocoa Beach, FL.............. -- 2,783 23,076 -- 1,784
Radisson Twin Towers Orlando, FL.......... -- 9,555 73,486 -- 8,209
Crowne Plaza Phoenix, AZ.................. -- 1,852 15,957 -- 3,448
Hilton Airport Hotel Grand Rapids, MI..... (1) 2,049 16,657 -- 539
Marriott West Loop Houston, TX............ (1) 2,943 23,934 -- 2,623
Courtyard by Marriott Durham, NC.......... -- 1,406 11,001 -- 47
Courtyard by Marriott, Marina Del Rey,
CA...................................... (1) 3,450 24,534 -- 359
Courtyard by Marriott, Century City, CA... -- 2,165 16,465 -- 20
Courtyard by Marriott, Lake Buena Vista,
FL...................................... -- -- 41,267 -- 2,438
Crowne Plaza, San Jose, CA................ (1) 2,130 23,404 (24) 1,501
Doubletree Hotel Westshore, Tampa, FL..... -- 2,904 23,476 -- 7,312
Howard Johnson Resort Key Largo, FL....... -- 1,784 12,419 -- 507
Radisson Annapolis, MD.................... -- 1,711 13,671 -- 1,945
Holiday Inn Fort Lauderdale, FL........... -- 2,381 19,419 -- 2,126
Holiday Inn Madeira Beach, FL............. -- 1,781 13,349 -- 26
Holiday Inn Chicago O'Hare, IL............ 19,080 4,290 72,631 -- 12,812
Holiday Inn & Suites Alexandria, VA....... -- 1,769 14,064 -- 52
Hilton Clearwater, FL..................... -- -- 69,285 -- 3,608
Radisson Rochester, NY.................... -- -- 6,499 -- 2,520
Radisson Old Towne Alexandria, VA......... -- 2,241 17,796 -- 3,690

Austin Hilton & Towers, TX................ 2,700 18,526 1,291 1974 1/6/98 40
Dallas Renaissance North, TX.............. 3,400 24,363 1,708 1979 1/6/98 40
Houston Sheraton Brookhollow Hotel, TX.... 2,500 19,757 1,467 1980 1/6/98 40
Seelbach Hilton, Louisville, KY........... 1,400 44,012 3,017 1905 1/6/98 40
Midland Hilton & Towers, TX............... 150 10,202 708 1976 1/6/98 40
Westin Oklahoma, OK....................... 3,500 29,271 2,159 1977 1/6/98 40
Sheraton Hotel, Columbia, MD.............. 3,600 25,137 1,513 1972 3/27/98 40
Radisson Cross Keys, Baltimore, MD........ 1,500 7,107 417 1973 3/27/98 40
Sheraton Fisherman's Wharf, San Francisco,
CA...................................... 19,708 64,736 4,356 1975 4/2/98 40
Hartford Hilton, CT....................... 4,073 27,282 1,642 1975 5/21/98 40
Holiday Inn Dallas DFW Airport South,
TX...................................... 3,388 28,855 1,747 1974 8/3/98 --
Courtyard by Marriott Meadowlands, NJ..... -- 9,694 581 1993 8/3/98 40
Hotel Maison de Ville, New Orleans, LA.... 292 3,013 181 1778 8/3/98 40
Hilton Hotel Toledo, OH................... -- 11,746 708 1987 8/3/98 40
Holiday Inn Select Dallas DFW Airport
West, TX................................ 947 8,559 812 1974 8/3/98 40
Holiday Inn Select New Orleans
International Airport, LA............... 3,040 27,766 1,610 1973 8/3/98 40
Crowne Plaza Madison, WI.................. 2,629 21,844 1,384 1987 8/3/98 40
Wyndham Albuquerque Airport Hotel, NM..... -- 19,001 1,146 1972 8/3/98 40
Wyndham San Jose Airport Hotel, CA........ -- 36,740 2,194 1974 8/3/98 40
Holiday Inn Select Mission Valley, CA..... 2,410 21,174 1,282 1970 8/3/98 40
Sheraton Safari Hotel, Lake Buena Vista,
FL...................................... 4,103 44,325 2,437 1985 8/3/98 40
Hilton Monterey, CA....................... 2,141 22,630 1,219 1971 8/3/98 40
Hilton Hotel Durham, NC................... 1,586 17,967 973 1987 8/3/98 40
Wyndham Garden Hotel Marietta, GA......... 1,900 17,688 1,038 1985 8/3/98 40
Westin Resort Key Largo, FL............... 3,167 29,530 1,814 1985 8/3/98 40
Doubletree Guest Suites Atlanta, GA....... 2,236 22,312 1,310 1985 8/3/98 40
Radisson Hotel Arlington Heights, IL...... 1,540 19,493 954 1981 8/3/98 40
Holiday Inn Select Bucks County, PA....... 2,610 24,517 1,335 1987 8/3/98 40
Hilton Hotel Cocoa Beach, FL.............. 2,783 24,860 1,494 1986 8/3/98 40
Radisson Twin Towers Orlando, FL.......... 9,555 81,695 4,701 1972 8/3/98 40
Crowne Plaza Phoenix, AZ.................. 1,852 19,405 1,145 1981 8/3/98 40
Hilton Airport Hotel Grand Rapids, MI..... 2,049 17,196 1,033 1979 8/3/98 40
Marriott West Loop Houston, TX............ 2,943 26,557 1,563 1976 8/3/98 40
Courtyard by Marriott Durham, NC.......... 1,406 11,048 659 1996 8/3/98 40
Courtyard by Marriott, Marina Del Rey,
CA...................................... 3,450 24,893 1,531 1976 8/3/98 40
Courtyard by Marriott, Century City, CA... 2,165 16,485 1,016 1986 8/3/98 40
Courtyard by Marriott, Lake Buena Vista,
FL...................................... -- 43,705 2,565 1972 8/3/98 40
Crowne Plaza, San Jose, CA................ 2,106 24,905 1,501 1975 8/3/98 40
Doubletree Hotel Westshore, Tampa, FL..... 2,904 30,788 1,596 1972 8/3/98 40
Howard Johnson Resort Key Largo, FL....... 1,784 12,926 767 1971 8/3/98 40
Radisson Annapolis, MD.................... 1,711 15,616 829 1975 8/3/98 40
Holiday Inn Fort Lauderdale, FL........... 2,381 21,545 1,225 1969 8/3/98 40
Holiday Inn Madeira Beach, FL............. 1,781 13,375 811 1972 8/3/98 40
Holiday Inn Chicago O'Hare, IL............ 4,290 85,443 4,638 1975 8/3/98 40
Holiday Inn & Suites Alexandria, VA....... 1,769 14,116 882 1985 8/3/98 40
Hilton Clearwater, FL..................... -- 72,893 4,298 1980 8/3/98 40
Radisson Rochester, NY.................... -- 9,019 438 1971 8/3/98 40
Radisson Old Towne Alexandria, VA......... 2,241 21,486 1,223 1975 8/3/98 40
</Table>

F-44
211
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

Ramada Inn Clearwater, FL................. -- 1,270 13,453 -- 89
Richmond Hotel and Conference Center...... -- 245 3,380 -- 58
Crowne Plaza Las Vegas, NV................ -- 3,006 24,011 -- 15
Crowne Plaza Portland, OR................. 4,917 2,950 23,254 -- 58
Four Points Hotel, Mt Arlington, NJ....... 4,328 6,553 6,058 -- 64
Ramada Inn Mahwah, NJ..................... -- 1,117 8,994 -- 121
Ramada Plaza Meriden, CT.................. -- 1,247 10,057 -- 12
Ramada Plaza Shelton, CT.................. 4,567 2,040 16,235 -- 28
Sheraton Crossroads Mahwah, NJ............ -- 3,258 26,185 -- 188
St. Tropez Suites, Las Vegas, NV.......... -- 3,027 24,429 -- 24
Doral Forrestal, Princeton, NJ............ -- 9,578 57,555 -- 7,135
South Seas Plantation, Captiva, FL........ -- 3,084 83,573 -- 7,161
Radisson Suites Beach Resort, Marco
Island, FL.............................. -- 7,120 35,300 -- 2,103
Best Western Sanibel Island, FL........... -- 3,868 3,984 17 302
The Dunes Golf & Tennis Club, Sanibel
Island, FL.............................. -- 7,705 3,043 9 21
Sanibel Inn, Sanibel Island, FL........... -- 8,482 12,045 -- (74)
Seaside Inn, Sanibel Island, FL........... -- 1,702 6,416 22 73
Song of the Sea, Sanibel Island, FL....... -- 339 3,223 19 31
Sundial Beach Resort, Sanibel Island,
FL...................................... -- 320 12,009 -- 556
Holiday Inn, Madison, WI.................. -- 4,143 6,692 -- 78
Safety Harbor Resort and Spa, Sanibel
Island, FL.............................. -- 732 19,618 -- 1,538
-------- ---------- ----- --------
$317,460 $2,207,320 $(388) $253,769
======== ========== ===== ========

Ramada Inn Clearwater, FL................. 1,270 13,542 1,612 1969 8/3/98 40
Richmond Hotel and Conference Center...... 245 3,438 712 1975 8/3/98 40
Crowne Plaza Las Vegas, NV................ 3,006 24,026 2,593 1989 8/3/98 40
Crowne Plaza Portland, OR................. 2,950 23,312 2,623 1988 8/3/98 40
Four Points Hotel, Mt Arlington, NJ....... 6,553 6,122 645 1984 8/3/98 40
Ramada Inn Mahwah, NJ..................... 1,117 9,115 898 1972 8/3/98 40
Ramada Plaza Meriden, CT.................. 1,247 10,069 974 1985 8/3/98 40
Ramada Plaza Shelton, CT.................. 2,040 16,263 1,529 1989 8/3/98 40
Sheraton Crossroads Mahwah, NJ............ 3,258 26,373 2,785 1986 8/3/98 40
St. Tropez Suites, Las Vegas, NV.......... 3,027 24,453 2,360 1986 8/3/98 40
Doral Forrestal, Princeton, NJ............ 9,578 64,690 3,726 1981 8/11/98 40
South Seas Plantation, Captiva, FL........ 3,084 90,734 6,525 1975 10/1/98 40
Radisson Suites Beach Resort, Marco
Island, FL.............................. 7,120 37,403 4,106 1983 10/1/98 40
Best Western Sanibel Island, FL........... 3,885 4,286 665 1967 10/1/98 40
The Dunes Golf & Tennis Club, Sanibel
Island, FL.............................. 7,714 3,064 246 1964 10/1/98 40
Sanibel Inn, Sanibel Island, FL........... 8,482 11,971 989 1964 10/1/98 40
Seaside Inn, Sanibel Island, FL........... 1,724 6,489 481 1964 10/1/98 40
Song of the Sea, Sanibel Island, FL....... 358 3,254 280 1964 10/1/98 40
Sundial Beach Resort, Sanibel Island,
FL...................................... 320 12,565 806 1975 10/1/98 40
Holiday Inn, Madison, WI.................. 4,143 6,770 337 1965 1/11/99 40
Safety Harbor Resort and Spa, Sanibel
Island, FL.............................. 732 21,156 1,547 1926 5/31/00 40
-------- ---------- --------
$317,072 $2,461,089 $188,647
======== ========== ========
</Table>

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

(1) These properties secure the New Secured Facility which, as of December 31,
2000, had an outstanding balance of $324,554.

F-45
212
MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.

SCHEDULE III -- REAL ESTATE AND ACCUMULATED DEPRECIATION -- (CONTINUED)

The components of hotel property and equipment are as follows:

<Table>
<Caption>
PROPERTY AND ACCUMULATED
EQUIPMENT DEPRECIATION
------------ ------------

Land........................................................ $ 317,072 $ --
Building and Improvements................................... 2,461,089 188,647
Furniture and equipment..................................... 338,350 98,582
Construction in progress.................................... 77,219 --
---------- --------
Total property and equipment...................... $3,193,730 $287,229
========== ========
</Table>

A reconciliation of the Company's investment in hotel property and
equipment and related accumulated depreciation is as follows:

<Table>
<Caption>
2000 1999 1998
---------- ---------- ----------

Hotel property and equipment
Balance, beginning of period..................... $3,118,723 $2,957,543 $ 947,597
Acquisitions during period....................... 19,618 12,081 1,865,142
Improvements and construction-in-progress........ 78,911 160,294 144,804
Cost of real estate sold......................... (23,522) (11,195) --
---------- ---------- ----------
Balance, end of period........................... 3,193,730 3,118,723 2,957,543
---------- ---------- ----------
Accumulated depreciation
Balance, beginning of period..................... 182,430 83,797 26,858
Additions-depreciation expense................... 107,363 99,297 56,939
Cost of real estate sold......................... (2,564) (664) --
---------- ---------- ----------
Balance, end of period........................... 287,229 182,430 83,797
---------- ---------- ----------
Net hotel property and equipment, end of
period......................................... $2,906,501 $2,936,293 $2,873,746
========== ========== ==========
</Table>

F-46
213

FELCOR LODGING LIMITED PARTNERSHIP

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)

<Table>
<Caption>
JUNE 30, DECEMBER 31,
2001 2000
----------- ------------
(UNAUDITED)

ASSETS

Investment in hotels, net of accumulated depreciation of
$553,281 at June 30, 2001 and $473,101 at December 31,
2000...................................................... $3,710,694 $3,750,275
Investment in unconsolidated entities....................... 154,980 128,593
Assets held for sale........................................ 52,122 129,294
Cash and cash equivalents................................... 64,220 26,060
Restricted cash............................................. 323,555
Accounts receivable......................................... 46,449 31,241
Note receivable from unconsolidated entity.................. 7,695
Deferred expenses, net of accumulated amortization of $9,934
at June 30, 2001 and $7,146 at December 31, 2000.......... 32,201 23,944
Other assets................................................ 19,307 6,501
---------- ----------
Total assets...................................... $4,403,528 $4,103,603
========== ==========

LIABILITIES AND PARTNERS' CAPITAL

Debt........................................................ $2,134,093 $1,838,241
Distributions declared but unpaid........................... 34,199 33,957
Accrued expenses and other liabilities...................... 146,077 94,232
Minority interest in other partnerships..................... 50,474 50,774
---------- ----------
Total liabilities................................. 2,364,843 2,017,204
---------- ----------
Commitments and contingencies
Redeemable units at redemption value........................ 210,929 205,800
Preferred units, $.01 par value, 20,000 units authorized:
Series A Cumulative Preferred Units, 5,981 units issued
and outstanding........................................ 149,515 149,515
Series B Redeemable Preferred Units, 58 units issued and
outstanding............................................ 143,750 143,750
Partners' capital........................................... 1,534,491 1,587,334
---------- ----------
Total liabilities and partners' capital........... $4,403,528 $4,103,603
========== ==========
</Table>

The accompanying notes are an integral part of these consolidated financial

F-47
214

FELCOR LODGING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000
(UNAUDITED, IN THOUSANDS EXCEPT FOR PER UNIT DATA)

<Table>
<Caption>
SIX MONTHS ENDED
JUNE 30,
-------------------
2001 2000
-------- --------

Revenues:
Hotel operating revenue:
Room................................................... $365,343
Food and beverage...................................... 53,150
Other operating departments............................ 24,790
Percentage lease revenue.................................. 115,137 $256,335
Retail space rental and other revenue..................... 1,882 1,824
-------- --------
Total revenues.................................... 560,302 258,159
-------- --------
Expenses:
Hotel operating expenses:
Room................................................... 83,404
Food and beverage...................................... 39,141
Other operating departments............................ 10,922
Management fees........................................... 12,612
Other property operating costs............................ 121,642
Taxes, insurance and lease expense........................ 76,460 47,588
Corporate expenses........................................ 6,372 6,112
Depreciation.............................................. 79,513 81,480
Lease termination costs................................... 36,226
-------- --------
Total operating expenses.......................... 466,292 135,180
-------- --------
Operating income............................................ 94,010 122,979
Interest expense, net....................................... (79,621) (76,781)
Swap termination expense.................................... (4,824)
Loss on assets held for sale................................ (63,000)
-------- --------
Income (loss) before equity in income from unconsolidated
entities, minority interests, and gain on sale of
assets.................................................... 9,565 (16,802)
Equity in income from unconsolidated entities............... 6,328 5,648
Minority interests in other partnerships.................... (2,282) (2,093)
Gain on sale of assets...................................... 2,955 875
-------- --------
Income (loss) before extraordinary items.................... 16,566 (12,372)
Extraordinary charge from write off of deferred financing
fees...................................................... (225)
-------- --------
Net income (loss)........................................... 16,341 (12,372)
Preferred distributions..................................... (12,300) (12,358)
-------- --------
Net income (loss) applicable to unitholders................. $ 4,041 $(24,730)
======== ========
Per unit data:
Basic:
Net income (loss) applicable to unitholders............ $ 0.07 $ (0.39)
======== ========
Weighted average units outstanding..................... 61,628 63,066
Diluted:
Net income (loss) applicable to unitholders............ $ 0.07 $ (0.39)
======== ========
Weighted average units outstanding..................... 62,069 63,297
</Table>

The accompanying notes are an integral part of these consolidated financial
statements.

F-48
215

FELCOR LODGING LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND 2000
(UNAUDITED, IN THOUSANDS)

<Table>
<Caption>
SIX MONTHS ENDED
JUNE 30,
--------------------
2001 2000
--------- --------

Cash flows from operating activities:
Net income (loss)......................................... $ 16,341 $(12,372)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation............................................ 79,513 81,480
Gain on sale of assets.................................. (2,955) (875)
Amortization of deferred financing fees................. 2,563 2,383
Accretion of debt....................................... (150) (448)
Amortization of unearned officers' and directors'
compensation.......................................... 884 474
Equity in income from unconsolidated entities........... (6,328) (5,648)
Extraordinary write off of deferred financing fees...... 225
Lease termination costs................................. 36,226
Loss on assets held for sale............................ 63,000
Minority interests in other partnerships................ 2,282 2,093
Changes in assets and liabilities:
Accounts receivable..................................... (10,077) (10,204)
Deferred expenses....................................... (11,045) (4,003)
Other assets............................................ (11,297) (1,251)
Deferred rent........................................... 18,604
Accrued expenses and other liabilities.................. (2,552) 5,510
--------- --------
Net cash flow provided by operating activities..... 93,630 138,743
--------- --------
Cash flows provided by (used in) investing activities:
Restricted cash........................................... (323,555)
Improvements and additions to hotels...................... (29,431) (41,408)
Proceeds from sale of interest in hotels.................. 48,049
Operating cash received in acquisition of lessee.......... 25,583
Proceeds from sale of assets.............................. 10,967 1,071
Cash distributions from unconsolidated entities........... 2,973 11,708
--------- --------
Net cash flow used in investing activities......... (265,414) (28,629)
--------- --------
Cash flows provided by (used in) financing activities:
Proceeds from borrowings.................................. 849,748 500,892
Repayment of borrowings................................... (553,746) (451,847)
Purchase of treasury stock................................ (4,046) (56,733)
Proceeds from exercise of stock option.................... 692
Buyback of assumed stock options.......................... (1,860)
Distributions paid to minority interest................... (2,582) (3,054)
Distributions paid to preferred unitholders............... (12,300) (12,368)
Distributions paid to unitholders......................... (67,822) (70,415)
--------- --------
Net cash flow provided by (used in) financing
activities........................................ 209,944 (95,385)
--------- --------
Net change in cash and cash equivalents..................... 38,160 14,729
Cash and cash equivalents at beginning of periods........... 26,060 36,123
--------- --------
Cash and cash equivalents at end of periods................. $ 64,220 $ 50,852
========= ========
Supplemental cash flow information -- interest paid......... $ 84,115 $ 73,259
========= ========
</Table>

The accompanying notes are an integral part of these consolidated financial
statements.

F-49
216

FELCOR LODGING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION

FelCor Lodging Limited Partnership and its subsidiaries (the "Company") at
June 30, 2001, owned interests in 185 hotels in the United States and Canada
with nearly 50,000 rooms and suites (collectively, the "Hotels"). The sole
general partner of the Company is FelCor Lodging Trust Incorporated ("FelCor")
the nation's second largest hotel real estate investment trust ("REIT"). At June
30, 2001, FelCor owned a greater than 85 percent equity interest in the Company.
At June 30, 2001, the Company owned a 100 percent interest in 152 of the Hotels,
a 90 percent or greater interest in entities owning seven hotels, a 60 percent
interest in an entity owning two hotels and 50 percent interests in entities
that own 24 hotels. Fifteen of the Company's hotels have been designated as held
for sale.

On May 9, 2001, the Company entered into an Agreement and Plan of Merger
(the "Merger Agreement") with MeriStar Hospitality Corporation ("MeriStar").
Pursuant to the Merger Agreement, MeriStar will be merged with and into FelCor
subject to the approval of the shareholders of both companies. Under the terms
of the merger plan holders of MeriStar common shares will receive, for each
common share, $4.60 in cash and 0.784 shares of common stock of FelCor. The
Company also will either assume or refinance $1.6 billion in MeriStar debt. A
separate publicly traded company, MeriStar Hotels & Resorts, will continue to
manage the hotels acquired from MeriStar in the merger. The merger is expected
to close in September of 2001.

The transaction will also involve the merger of the Company's subsidiary
with and into MeriStar's subsidiary operating limited partnership. The holders
of common partnership units in MeriStar's partnership will receive, for each
common unit, $4.60 in cash and 0.784 common partnership units in the Company.
Preferred units in MeriStar's partnership will receive similar preferred units
in the Company or a combination of cash and units. The proposed mergers are
subject to shareholder approval and other customary conditions. The equity
portion of the transaction is structured to qualify as a tax free merger with
respect to the share consideration.

On January 1, 2001, the REIT Modernization Act ("RMA") went into effect.
Among other things, the RMA permits a REIT to form taxable subsidiaries that
lease hotels from the REIT, provided that the hotels continue to be managed by
unrelated third parties. Effective January 1, 2001, the Company completed
transactions that resulted in its newly formed taxable subsidiaries acquiring
leases for 96 hotels that were leased to either DJONT Operations, L.L.C. and its
consolidated subsidiaries (collectively "DJONT") or subsidiaries of Six
Continents Hotels, formerly Bass Hotels and Resorts, ("Six Continents Hotels").
By acquiring these leases through its taxable subsidiaries, the Company acquired
the economic benefits and risks of these hotel operations and reports hotel
revenues and expenses rather than percentage lease revenues. Additionally, in
2001, the Company entered into an agreement to acquire its remaining 88 hotel
leases held by Six Continents Hotels. This transaction was effective July 1,
2001.

F-50
217
FELCOR LODGING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

1. ORGANIZATION -- (CONTINUED)

The following table provides a schedule of the Hotels by brand, broken out
between those hotels whose operations are consolidated for purposes of the
Company's financial statements, those hotels whose operations are reported as
unconsolidated entities for purposes of the Company's financial statements and
those hotels operated under leases with Six Continents Hotels at June 30, 2001:

<Table>
<Caption>
UNCONSOLIDATED SIX CONTINENTS
BRAND CONSOLIDATED JOINT VENTURES HOTELS LEASED TOTAL
- ----- ------------ -------------- -------------- -----

Hilton(R) Brands:
Embassy Suites(R)............................ 45 14 59
Doubletree(R) and Doubletree Guest
Suites(R)................................. 14 14
Hampton Inn(R)............................... 2 1 5 8
Hilton Suites(R)............................. 1 1
Homewood Suites(R)........................... 1 1
Six Continents Hotels Brands:
Holiday Inn(R)............................... 1 43 44
Crowne Plaza(R) and Crowne Plaza Suites(R)... 18 18
Holiday Inn Select(R)........................ 10 10
Holiday Inn Express(R)....................... 5 5
Starwood Brands:
Sheraton(R) and Sheraton Suites(R)........... 9 1 10
Westin(R).................................... 1 1
Other Brands................................... 1 7 6 14
-- -- -- ---
Total Hotels......................... 73 24 88 185
== == == ===
</Table>

The Hotels are located in the United States (35 states) and Canada, with a
concentration in Texas (41 hotels), California (19 hotels), Florida (16 hotels)
and Georgia (14 hotels).

At June 30, 2001, (i) subsidiaries of Six Continents Hotels managed 90 of
the Hotels, (ii) subsidiaries of Hilton managed 72 of the Hotels, (iii)
subsidiaries of Starwood Hotels & Resorts Worldwide, Inc. ("Starwood") managed
11 of the Hotels, (iv) subsidiaries of Interstate Hotels Corporation ("IHC")
managed eight of the Hotels and (v) three independent management companies
managed the four remaining Hotels.

Effective January 1, 2001, with the enactment of the RMA, the Company
acquired and contributed to a newly formed taxable REIT subsidiary, all the
equity interests in DJONT. In consideration for the acquisition, the Company
issued an aggregate of 416,667 units of limited partnership interest valued at
approximately $10 million, which, together with DJONT's accumulated
shareholders' deficit of $24.5 million, was expensed as a lease termination cost
in the first quarter of 2001.

Effective January 1, 2001, the Company completed the acquisition of 12 of
the leases, which were held by Six Continents Hotels. In consideration for the
acquisition and termination of these leases and the related management
agreements of such leases, FelCor issued to Six Continents Hotels 413,585 shares
of FelCor common stock valued at approximately $10 million and the Company
issued the corresponding number of units. Of this $10 million in consideration
for acquisition of these leases, approximately $8.3 million associated with 11
of the hotels had been previously accrued in connection with the hotels
designated as held for sale and $1.7 million was expensed as lease termination
costs in the first quarter of 2001. Of the 12 hotels, two have been sold, eight
have been contributed to a joint venture with IHC, one remains to be sold and
one will be retained. In March 2001, the Company contributed the eight hotels
managed by IHC to a joint venture with IHC. The Company also entered into an
agreement with Six

F-51
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FELCOR LODGING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

1. ORGANIZATION -- (CONTINUED)

Continents Hotels to acquire the remaining 88 leases, which became effective
July 1, 2001. In consideration for the acquisition of such leases the Company
entered into long-term management agreements with Six Continents Hotels with
regard to these hotels and, on July 1, 2001, FelCor issued to Six Continents
Hotels 100 shares of FelCor common stock.

Certain reclassifications have been made to prior period financial
information to conform to the current period's presentation with no effect to
previously reported net income or partners' capital.

The financial information for the six months ended June 30, 2001 and 2000,
is unaudited but includes all adjustments (consisting only of normal recurring
accruals) which the Company considers necessary for a fair presentation of the
results for the periods. The financial information should be read in conjunction
with the consolidated financial statements for the year ended December 31, 2000,
included in the Company's Annual Report on Form 10-K ("Form 10-K"). Operating
results for the six months ended June 30, 2001 are not necessarily indicative of
the results that may be expected for the entire year ending December 31, 2001.

2. DEFERRED RENT

The Company recognized deferred lease income under Staff Accounting
Bulletin No. 101 ("SAB 101") of $18.6 million for the six months ended June 30,
2000, respectively. In accordance with SAB 101, rent deferred in the first
quarter of 2001 was fully earned and recognized as percentage lease revenue in
the second quarter of 2001, because all contingencies related to such revenue
were resolved with regard to the leases acquired July 1, 2001. For the six
months ended June 30, 2001, SAB 101 had no financial impact to the Company.

3. ASSETS HELD FOR SALE

In the second quarter of 2000, the Company identified 25 hotels that it
considered non-strategic and announced its intention to sell such hotels. In
connection with the decision to sell these hotels, the Company recorded, at June
30, 2000, an expense of $63 million representing the difference between the net
book value of these hotels and the estimated net proceeds. No depreciation
expense has been recorded on these hotels since June 30, 2000. Revenues related
to the assets held for sale, less costs associated with those assets, were
included in the Company's results of operations for the six months ended June
30, 2001 and 2000, and represented income of $7.1 million and $6.1 million (net
of depreciation expense in 2000), respectively.

In March 2001, the Company contributed eight of the hotels held for sale to
an entity in which the Company owns a 50 percent equity interest and a
subsidiary of IHC holds the other 50 percent equity interest. The Company
contributed assets with a book value of approximately $77 million, received net
cash proceeds of $48 million and retained a $17 million preferred interest.

In June 2001, the Company sold the 140-room Hampton Inn located in
Marietta, Georgia, for a net sales price of $7.1 million. The Company is
actively marketing the remaining 15 hotels held for sale.

F-52
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FELCOR LODGING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

4. INVESTMENT IN UNCONSOLIDATED ENTITIES

The Company owned 50 percent interests in joint venture partnerships that
owned and operated 24 hotels at June 30, 2001, and 16 hotels at June 30, 2000.
The Company also owned a 50% interest in partnerships that owned an undeveloped
parcel of land, a condominium management company and developed and sold
condominiums in Myrtle Beach, South Carolina. The Company accounts for its
investments in these unconsolidated entities under the equity method.

Summarized unaudited combined financial information for 100 percent of
these unconsolidated entities is as follows (in thousands):

<Table>
<Caption>
JUNE 30, DECEMBER 31,
2001 2000
-------- ------------

Balance sheet information:
Investment in hotels...................................... $342,294 $294,941
Non-recourse mortgage debt................................ $266,660 $225,302
Equity.................................................... $ 96,975 $ 82,986
</Table>

<Table>
<Caption>
SIX MONTHS ENDED
JUNE 30,
-----------------
2001 2000
------- -------

Statements of operations information:
Total revenues............................................ $41,300 $39,173
Net income................................................ $14,327 $13,649
Net income attributable to the Company.................... $ 7,399 $ 6,719
Amortization of cost in excess of book value.............. (1,071) (1,071)
------- -------
Equity in income from unconsolidated entities............. $ 6,328 $ 5,648
======= =======
</Table>

F-53
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FELCOR LODGING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

5. DEBT

Debt at June 30, 2001, and December 31, 2000, consisted of the following
(in thousands):

<Table>
<Caption>
JUNE DECEMBER
COLLATERAL INTEREST RATE MATURITY DATE 2001 2000
---------- ------------- -------------- ---------- ----------

Floating Rate Debt:
Line of credit.................. None LIBOR + 200bp August 2003 $ 112,000
Mortgage debt................... 3 hotels LIBOR + 200bp February 2003 61,909
Promissory note................. None LIBOR + 200bp June 2016 $ 650 650
---------- ----------
Total floating rate
debt................... 650 174,559
---------- ----------
Fixed Rate Debt:
Line of credit -- swapped....... None 7.66% August 2003 39,900 250,000
Publicly-traded term notes...... None 7.38% October 2004 174,569 174,505
Publicly-traded term notes...... None 7.63% October 2007 124,370 124,320
Publicly-traded term notes...... None 9.50% September 2008 101,699
Publicly-traded term notes...... None 9.50% September 2008 395,073 394,731
Publicly-traded term notes...... None 8.50% June 2011 595,073
Mortgage debt................... 15 hotels 7.24% November 2007 138,854 140,148
Mortgage debt................... 7 hotels 7.54% April 2009 96,826 97,604
Mortgage debt................... 6 hotels 7.55% June 2009 72,810 73,389
Mortgage debt................... 7 hotels 8.73% May 2010 143,163 144,032
Mortgage debt................... 8 hotels 8.70% May 2010 183,807 184,829
Other........................... 13 hotels 6.96%-7.23% 2000-2005 67,299 80,124
---------- ----------
Total fixed rate debt.... 2,133,443 1,663,682
---------- ----------
Total debt............... $2,134,093 $1,838,241
========== ==========
</Table>

One month LIBOR at June 30, 2001, was 3.835%.

At June 30, 2001, the Company's line of credit was matched with an interest
rate swap agreement, which effectively converted the floating rate on the line
of credit to a fixed rate.

The line of credit contains various affirmative and negative covenants
including limitations on total indebtedness, total secured indebtedness, and
cash distributions, as well as the obligation to maintain certain minimum
tangible net worth and certain minimum interest and debt service coverage
ratios. At June 30, 2001, the Company was in compliance with all such covenants.

The Company's other borrowings contain affirmative and negative covenants
that are generally equal to or less restrictive than the line of credit. Most of
the mortgage debt is non-recourse to the Company and contains provisions
allowing for the substitution of collateral upon satisfaction of certain
conditions. Most of the mortgage debt is prepayable; subject to various
prepayment penalties, yield maintenance, or defeasance obligations.

Interest expense is reported net of interest income of $2.2 million and
$863,000 for the six months ended June 30, 2001 and 2000, respectively, and
capitalized interest of $229,000 and $497,000, respectively.

On June 4, 2001, the Company completed the private placement of $600
million in 8 1/2 percent senior unsecured notes that mature in June 2001.
Approximately $315 million of the proceeds were placed in escrow pending
completion of the merger with MeriStar. The remaining proceeds were used to pay
down the Line of Credit and other floating rate debt. Associated with the pay
down of the Line of Credit, the Company terminated interest rate swaps with a
notional value of $200 million, resulting in a one-time $4.8 million swap
termination cost, which was expensed in the second quarter. An extraordinary
charge of

F-54
221
FELCOR LODGING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

5. DEBT -- (CONTINUED)

$225,000 was recorded to write-off unamortized deferred financing costs
associated with the prepayment of the floating rate debt.

On January 11, 2001, the Company completed the private placement of $100
million in 9 1/2 percent senior unsecured notes that mature in September 2008.
These notes were issued at a premium to yield an effective rate of 9 1/8
percent. The proceeds were used initially to pay down the company's line of
credit.

6. ADOPTION OF SFAS 133

On January 1, 2001, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging
Activities," as amended by SFAS No. 138, "Accounting for Certain Derivative
Instruments and Certain Hedging Activities." SFAS No. 133, as amended,
establishes accounting and reporting standards for derivative instruments.
Specifically, SFAS No. 133 requires an entity to recognize all derivatives as
either assets or liabilities on the balance sheet and to measure those
instruments at fair value. Additionally, the fair value adjustments will affect
either partners' capital or net income depending on whether the derivative
instrument qualifies as a hedge for accounting purposes and the nature of the
hedging activity.

Upon adoption of SFAS 133, on January 1, 2001, the Company recorded the
fair value of its interest swap rate agreements with a notional value of $250
million as an asset of $248,000 with a corresponding credit to accumulated other
comprehensive income reported in partners' capital.

As of June 30, 2001, the Company held an interest rate swap agreement with
a notional value of $50 million. The fixed interest rate paid on this swap was
5.6 percent and the floating swap rate received was 4.06 percent with a maturity
of July 2003. The fair value of the Company's interest rate swap agreement at
June 30, 2001 was a liability of $899,000 which was recorded in accrued expenses
and accumulated other comprehensive income reported in partners' capital.
Assuming no changes in the index rates over the next twelve months, the swap
currently held by the Company would result in additional interest expense of
$561,000. In June 2001, interest rate swaps with a notional amount of $200
million were terminated at a cost of $4.8 million when the corresponding
floating rate debt was prepaid.

In the normal course of business, the Company is exposed to the effect of
interest rate changes. The Company limits these risks by following established
risk management policies and procedures including the use of derivatives.
Derivatives are used primarily to fix the rate on floating rate debt and manage
the cost of borrowing obligations. The Company requires that hedging derivative
instruments are effective in reducing the interest rate risk exposure that they
are designated to hedge. Instruments that meet these hedging criteria are
formally designated as hedges at the inception of the derivative contract. The
Company does not use derivatives for trading or speculative purposes, and the
Company has a policy of only entering into contracts with major financial
institutions.

To determine the fair values of its derivative instruments, the Company
uses a variety of methods and assumptions that are based on market conditions
and risks existing at each balance sheet date. All methods of assessing fair
value result in a general approximation of value, and such value may never
actually be realized.

At June 30, 2001, the Company's financing facilities consist of a $600
million floating rate line of credit. To reduce the risk of variable interest
rates, the Company currently uses an interest rate swap agreement, to
effectively convert a portion of its floating rate debt to fixed-rate debt. The
differences to be paid or received by the Company under the terms of the
interest rate swap agreements are accrued as interest rates change and
recognized as an adjustment to interest expense.

F-55
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FELCOR LODGING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

7. COMPREHENSIVE INCOME

SFAS No. 130, "Reporting Comprehensive Income" establishes standards for
reporting and displaying comprehensive income and its components. Total
comprehensive income for the six months ended June 30, 2001 is calculated as
follows (in thousands):

<Table>

Net income.................................................. $16,341
Realized loss on terminated interest rate swap agreements... 4,824
Unrealized loss on interest rate swap agreements............ (5,723)
-------
Total comprehensive income........................ $15,442
=======
</Table>

Although the Company conducts business in Canada, the Canadian operations
were not material to our consolidated financial position, results of operations
or cash flows during the six months ended June 30, 2001 and 2000. Additionally,
foreign currency transaction gains and losses were not material to the Company's
results of operations for the six months ended June 30, 2001 and 2000.

8. RECENTLY ISSUED STATEMENTS OF FINANCIAL ACCOUNTING STANDARDS

In June 2001, the Financial Accounting Standards Board ("FASB") approved
SFAS No. 141, "Business Combinations," and SFAS No. 142, "Goodwill and Other
Intangible Assets." SFAS No. 141 requires that the purchase method of accounting
be used for all business combinations initiated after June 30, 2001. SFAS No.
142 will be effective for fiscal years beginning after December 15, 2001 and
will require (1) intangible assets (as defined in SFAS No. 141) to be
reclassified into goodwill, (2) goodwill amortization to cease, and (3) the
testing of goodwill for impairment at transition and at interim periods (if an
event or circumstance would result in an impairment). The Company will adopt
SFAS No. 142 on June 30, 2001, with the purchase of any goodwill and intangible
assets acquired after June 30, 2001. The Company has not yet determined the
impact of SFAS No. 142 on the Company's results of operations and financial
position.

9. INCOME TAXES

Under the RMA that became effective January 1, 2001, the Company leases
certain of its hotels to wholly-owned taxable REIT subsidiaries that are subject
to federal and state income taxes. The Company accounts for income taxes in
accordance with the provisions of SFAS No. 109, "Accounting for Income Taxes."
Under SFAS 109, the Company accounts for income taxes using the asset and
liability method under which deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and liabilities and
their respective tax bases. The Company has a deferred tax asset of
approximately $100,000, prior to any valuation allowance, relating to losses of
the taxable REIT subsidiaries during the six months ended June 30, 2001.
Management has provided a 100 percent valuation allowance against this asset due
to uncertainty of realization and accordingly, no provision or benefit from
income taxes is reflected in the accompanying Consolidated Statements of
Operations.

10. GAIN ON SALE OF ASSETS

During the six months ended June 30, 2001, the Company received $3.9
million for the condemnation of three parcels of land and recorded a gain of
$3.0 million.

11. PURCHASE OF DJONT

Effective January 1, 2001, the Company acquired all the equity interests in
DJONT. In consideration for the acquisition, the Company issued 416,667 units of
limited partnership interest valued at

F-56
223
FELCOR LODGING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

11. PURCHASE OF DJONT -- (CONTINUED)

approximately $10 million which, together with DJONT's accumulated shareholders'
deficit of $24.5 million, was expensed as lease termination cost in the first
quarter of 2001.

The Company purchased certain assets and assumed certain liabilities with
this acquisition. The fair values of the acquired assets and liabilities at
January 1, 2001, are as follows (in thousands):

<Table>

Cash and cash equivalents................................... $25,583
Accounts receivable......................................... 30,689
Investment in real estate................................... 10,954
Other assets................................................ 10,358
-------
Total assets acquired............................. 77,584
-------
Accounts payable............................................ 18,656
Due to FelCor Lodging Trust................................. 39,466
Accrued expenses and other liabilities...................... 43,999
-------
Total liabilities assumed......................... 102,121
-------
Liabilities assumed in excess of assets acquired............ 24,537
Value of units issued....................................... 9,896
-------
Lease termination costs..................................... $34,433
=======
</Table>

12. SEGMENT INFORMATION

Following the acquisition of certain of the Company's leases at January 1,
2001, the Company has determined that its reportable segments are those that are
consistent with the Company's method of internal reporting, which segments its
business in 2001 by those hotels that the Company leases to DJONT (whose
operations are consolidated for financial reporting purposes beginning January
1, 2001) and those hotels that the Company leases to Six Continents Hotels.

For the six months ended June 30, 2000, the Company segmented its business
between its two lessees, DJONT and Six Continents Hotels.

The following tables present information for the reportable segments for
the six months ended June 30, 2001 and 2000 (in thousands):

<Table>
<Caption>
SIX
CONTINENTS CORPORATE
DJONT HOTELS SEGMENT NOT ALLOCABLE CONSOLIDATED
SIX MONTHS ENDED JUNE 30, 2001 LEASED LEASED TOTAL TO SEGMENTS TOTAL
- ------------------------------ -------- ---------- -------- ------------- ------------

Total revenues....................... $443,283 $115,137 $558,420 $ 1,882 $560,302
Net income (loss).................... $ 80,431 $ 21,855 $102,286 $(85,945) $ 16,341
Funds from operations................ $160,706 $ 62,161 $222,867 $(87,184) $135,683
Weighted average units
outstanding(1)..................... 66,759
</Table>

<Table>
<Caption>
SIX
CONTINENTS CORPORATE
DJONT HOTELS SEGMENT NOT ALLOCABLE CONSOLIDATED
SIX MONTHS ENDED JUNE 30, 2000 LEASED LEASED TOTAL TO SEGMENTS TOTAL
- ------------------------------ -------- ---------- -------- ------------- ------------

Total revenues....................... $137,813 $118,522 $256,335 $ 1,824 $258,159
Net income (loss).................... $ 69,892 $ (1,059) $ 68,833 $(81,205) $(12,372)
Funds from operations................ $132,459 $104,459 $236,918 $(87,538) $149,380
Weighted average units
outstanding(1)..................... 67,987
</Table>

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

(1) Weighted average units outstanding are computed including dilutive options,
unvested stock grants, and assuming conversion of Series A preferred units
to units.

F-57
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FELCOR LODGING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

13. TREASURY STOCK REPURCHASE PROGRAM

On January 4, 2000, FelCor announced that its Board of Directors had
approved a $200 million increase in its stock repurchase program, authorizing
FelCor to purchase up to an aggregate of $300 million of its outstanding common
shares. Approximately 179,000 of FelCor common shares for approximately $4.0
million have been purchased from January 1, 2001 through March 27, 2001. FelCor
has not repurchased any additional shares since March 27, 2001. These
repurchases have been recorded as a reduction to partners' capital as a result
of the redemption of units held by FelCor to fund the repurchases. Since the
inception of the stock repurchase program FelCor has repurchased approximately
10.5 million shares of FelCor common stock for approximately $189.1 million.

14. EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted
earnings per unit for the six months ended June 30, 2001 and 2000 (in thousands,
except per unit data):

<Table>
<Caption>
SIX MONTHS ENDED
JUNE 30,
-------------------
2001 2000
-------- --------

Numerator:
Income (loss) before extraordinary items.................. $ 16,566 $(12,372)
Extraordinary charge...................................... (225)
-------- --------
Net income (loss)......................................... 16,341 (12,372)
Preferred distributions................................... (12,300) (12,358)
-------- --------
Net income (loss) applicable to unitholders............... $ 4,041 $(24,730)
======== ========
Denominator:
Denominator for basic earnings per unit -- weighted
average units.......................................... 61,628 63,066
Effect of dilutive securities:
Stock options.......................................... 90
Restricted units....................................... 351 231
-------- --------
Denominator for diluted earnings per unit -- adjusted
weighted average units and assumed conversions........ 61,069 63,297
======== ========
Earnings (loss) per unit data:
Basic
Net income (loss) before extraordinary item............ $ 0.07 $ (0.39)
Extraordinary item.....................................
-------- --------
Net income (loss)...................................... $ 0.07 $ (0.39)
======== ========
Diluted
Net income (loss) before extraordinary item............ $ 0.07 $ (0.39)
Extraordinary item.....................................
-------- --------
Net income (loss)...................................... $ 0.07 $ (0.39)
======== ========
</Table>

The Series A preferred units and most of the options granted are
anti-dilutive and not included in the calculation of diluted earnings per unit.

F-58
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FELCOR LODGING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

15. CONSOLIDATING FINANCIAL INFORMATION

Certain of the Company's wholly-owned subsidiaries (FelCor/CSS Holdings,
L.P.; FelCor/CSS Hotels, L.L.C.; FelCor/LAX Hotels L.L.C.; FelCor Eight Hotels,
L.L.C.; FelCor/St. Paul Holdings, L.P.; FelCor/LAX Holdings, L.P.; FHAC Nevada
Holding, L.L.C.; FelCor TRS Holdings, L.P.; Kingston Plantation Development
Corp.; 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.; FelCor Canada Co. and
FelCor Hotel Asset Company, L.L.C., collectively "Subsidiary Guarantors"),
together with FelCor and one of its wholly-owned subsidiaries (FelCor Nevada
Holdings, L.L.C.), are guarantors of senior debt. The following tables present
consolidating information for the Subsidiary Guarantors.

CONSOLIDATING BALANCE SHEET
JUNE 30, 2001
(IN THOUSANDS)

<Table>
<Caption>
SUBSIDIARY NON-GUARANTOR TOTAL
FELCOR L.P. GUARANTORS SUBSIDIARIES ELIMINATIONS CONSOLIDATED
----------- ---------- ------------- ------------ ------------

ASSETS

Net investment in hotel properties..... $ 512,786 $1,638,108 $1,559,800 $3,710,694
Investment in consolidated entities.... 4,096,294 $(4,096,294)
Investment in unconsolidated
entities............................. 136,814 18,166 154,980
Assets held for sale................... 4,391 43,595 4,136 52,122
Cash and cash equivalents.............. 20,586 27,806 15,828 64,220
Restricted cash........................ 323,555 323,555
Due (to) from subsidiary............... (1,604,725) 478,252 1,126,473
Accounts receivable.................... 10,636 35,813 46,449
Deferred assets........................ 26,594 1,174 4,433 32,201
Other assets........................... 6,412 8,188 4,707 19,307
----------- ---------- ---------- ----------- ----------
Total assets.................. $ 3,533,343 $2,251,102 $2,715,377 $(4,096,294) $4,403,528
=========== ========== ========== =========== ==========

LIABILITIES AND PARTNERS' CAPITAL

Debt................................... $ 1,413,691 $ 145,409 $ 574,993 $2,134,093
Distributions payable.................. 34,199 34,199
Accrued expenses and other
liabilities.......................... 46,436 79,080 20,561 146,077
Minority interest in other
partnerships......................... 332 50,142 50,474
----------- ---------- ---------- ----------
Total liabilities............. 1,494,658 224,489 645,696 2,364,843
----------- ---------- ---------- ----------
Redeemable units at redemption value... 210,929 210,929
Preferred units........................ 293,265 293,265
Partners' capital...................... 1,534,491 2,026,613 2,069,681 $(4,096,294) 1,534,491
----------- ---------- ---------- ----------- ----------
Total liabilities and
partners' capital........... $ 3,533,343 $2,251,102 $2,715,377 $(4,096,294) $4,403,528
=========== ========== ========== =========== ==========
</Table>

F-59
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FELCOR LODGING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

15. CONSOLIDATING FINANCIAL INFORMATION -- (CONTINUED)

CONSOLIDATING BALANCE SHEET
JUNE 30, 2000
(IN THOUSANDS)

<Table>
<Caption>
SUBSIDIARY NON-GUARANTOR TOTAL
FELCOR L.P. GUARANTORS SUBSIDIARIES ELIMINATIONS CONSOLIDATED
----------- ---------- ------------- ------------ ------------

ASSETS

Net investment in hotel properties...... $ 593,248 $1,663,611 $1,539,896 $3,796,755
Investment in consolidated entities..... 2,814,305 $(2,814,305)
Investment in unconsolidated entities... 116,811 16,227 133,038
Assets held for sale.................... 4,582 118,510 12,555 135,647
Cash and cash equivalents............... 21,582 8,269 21,001 50,852
Due from Lessee......................... 14,278 18,218 (3,898) 28,598
Due (to) from subsidiary................ (244,385) 263,404 (19,019)
Note receivable from unconsolidated
entity................................ 7,728 7,728
Deferred assets......................... 10,772 1,245 5,076 17,093
Other assets............................ 5,215 1,834 5 7,054
---------- ---------- ---------- ----------- ----------
Total assets................... $3,344,136 $2,091,318 $1,555,616 $(2,814,305) $4,176,765
========== ========== ========== =========== ==========

LIABILITIES AND PARTNERS' CAPITAL

Debt.................................... $1,117,360 $ 118,227 $ 647,156 $1,882,743
Distributions payable................... 35,237 35,237
Accrued expenses and other
liabilities........................... 73,335 73,335
Deferred rent........................... 2,068 7,771 8,765 18,604
Minority interest in other
partnerships.......................... 50,710 50,710
---------- ---------- ---------- ----------
Total liabilities.............. 1,228,000 125,998 706,631 2,060,629
---------- ---------- ---------- ----------
Redeemable units at redemption value.... 151,948 151,948
Preferred units......................... 294,515 294,515
Partners' capital....................... 1,669,673 1,965,320 848,985 $(2,814,305) 1,669,673
---------- ---------- ---------- ----------- ----------
Total liabilities and partners'
capital ..................... $3,344,136 $2,091,318 $1,555,616 $(2,814,305) $4,176,765
========== ========== ========== =========== ==========
</Table>

F-60
227
FELCOR LODGING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

15. CONSOLIDATING FINANCIAL INFORMATION -- (CONTINUED)

CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2001
(IN THOUSANDS)

<Table>
<Caption>
SUBSIDIARY NON-GUARANTOR TOTAL
FELCOR L.P. GUARANTORS SUBSIDIARIES ELIMINATIONS CONSOLIDATED
----------- ---------- ------------- ------------ ------------

Revenues:
Hotel operating revenue................ $441,434 $ 1,849 $443,283
Percentage lease revenue............... $ 42,818 121,932 94,809 $(144,422) 115,137
Other revenue.......................... 1,458 351 73 1,882
-------- -------- -------- --------- --------
Total revenue................. 44,276 563,717 96,731 (144,422) 560,302
-------- -------- -------- --------- --------
Expenses:
Hotel operating expenses............... 266,657 1,064 267,721
Taxes, insurance and other............. 5,215 203,040 12,627 (144,422) 76,460
Corporate expenses..................... 907 3,328 2,137 6,372
Depreciation........................... 13,596 35,719 30,198 79,513
Lease termination costs................ 34,456 1,770 36,226
-------- -------- -------- --------- --------
Total operating expenses...... 54,174 510,514 46,026 (144,422) 466,292
-------- -------- -------- --------- --------
Operating income (loss)................ (9,898) 53,203 50,705 94,010
Interest expense, net.................. (48,343) (5,693) (25,585) (79,621)
Swap termination expense............... (4,824) (4,824)
-------- -------- -------- --------- --------
Income (loss) before equity in income
from unconsolidated entities,
minority interests, and gain on sale
of assets............................ (63,065) 47,510 25,120 9,565
Equity in income from consolidated
entities............................. (72,863) 72,863
-------- ---------
Equity in income from unconsolidated
entities............................. 6,358 (30) 6,328
Minority interests in other
partnerships......................... (235) (2,047) (2,282)
Gain on sale of assets................. 645 2,310 2,955
-------- -------- -------- --------- --------
Income (loss) before extraordinary
items................................ 16,566 47,480 25,383 (72,863) 16,566
Extraordinary charge from writeoff of
deferred financing fees.............. (225) (225) 225 (225)
-------- -------- -------- --------- --------
Net income (loss)...................... 16,341 47,480 25,158 16,341
Preferred distributions................ (12,300) (12,300)
-------- -------- -------- --------- --------
Net income (loss) applicable to
unitholders.......................... $ 4,041 $ 47,480 $ 25,158 $ (72,638) $ 4,041
======== ======== ======== ========= ========
</Table>

F-61
228
FELCOR LODGING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

15. CONSOLIDATING FINANCIAL INFORMATION -- (CONTINUED)

CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2001
(IN THOUSANDS)

<Table>
<Caption>
SUBSIDIARY NON-GUARANTOR TOTAL
FELCOR L.P. GUARANTORS SUBSIDIARIES CONSOLIDATED
----------- ---------- ------------- ------------

Cash flows from operating activities......... $ (47,075) $ 84,999 $ 55,706 $ 93,630
Cash flows from (used in) investing 19,180 (8,249)
activities................................. (276,345) (265,414)
Cash flows from (used in) financing (79,405) (49,544)
activities................................. 338,893 209,944
--------- -------- -------- ---------
Change in cash and cash equivalents.......... 15,473 24,774 (2,087) 38,160
Cash and cash equivalents at beginning of 3,032 17,915
period..................................... 5,113 26,060
--------- -------- -------- ---------
Cash and cash equivalents at end of period... $ 20,586 $ 27,806 $ 15,828 $ 64,220
========= ======== ======== =========
</Table>

CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2000
(IN THOUSANDS)

<Table>
<Caption>
SUBSIDIARY NON-GUARANTOR TOTAL
FELCOR L.P. GUARANTORS SUBSIDIARIES ELIMINATIONS CONSOLIDATED
----------- ---------- ------------- ------------ ------------

Revenues:
Percent rent...................... $ 55,332 $123,202 $ 77,801 $256,335
Other revenue..................... 1,824 1,824
-------- -------- -------- -------- --------
Total revenue........... 57,156 123,202 77,801 258,159
-------- -------- -------- -------- --------
Expenses:
General and administrative........ 1,319 2,937 1,856 6,112
Depreciation...................... 17,803 37,591 26,086 81,480
Taxes, insurance and other........ 7,480 15,292 13,105 35,877
Land leases....................... 965 9,491 1,255 11,711
-------- -------- -------- -------- --------
Total operating
expenses.............. 27,567 65,311 42,302 135,180
-------- -------- -------- -------- --------
Operating income.................. 29,589 57,891 35,499 122,979
Interest expense, net............. (53,711) (5,454) (17,616) (76,781)
Loss on assets held for sale...... (6,170) (53,200) (3,630) (63,000)
-------- -------- -------- -------- --------
Income (loss) before equity in
income from unconsolidated
entities, minority interests and
gain on sale of assets.......... (30,292) (763) 14,253 (16,802)
Equity in income from consolidated
entities........................ 14,480 $(14,480)
Equity in income from
unconsolidated entities......... 4,933 715 5,648
Minority interest other
partnerships.................... (1,493) (600) (2,093)
Gain on sale of assets............ 875 875
-------- -------- -------- -------- --------
Net income (loss)................. (12,372) 827 13,653 (14,480) (12,372)
Preferred distributions........... 12,358 12,358
-------- -------- -------- -------- --------
Net income (loss) applicable to
unitholders..................... $(24,730) $ 827 $ 13,653 $(14,480) $(24,730)
======== ======== ======== ======== ========
</Table>

F-62
229
FELCOR LODGING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

15. CONSOLIDATING FINANCIAL INFORMATION -- (CONTINUED)

CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2000
(IN THOUSANDS)

<Table>
<Caption>
SUBSIDIARY NON-GUARANTOR TOTAL
FELCOR L.P. GUARANTORS SUBSIDIARIES CONSOLIDATED
----------- ---------- ------------- ------------

Cash flows from operating activities......... $ 4,335 $ 90,052 $ 44,356 $138,743
Cash flows from (used in) investing (16,628) (10,827)
activities................................. (1,174) (28,629)
Cash flows from (used in) financing (77,573) (33,140)
activities................................. 15,328 (95,385)
------- -------- -------- --------
Change in cash and cash equivalents.......... 18,489 (4,149) 389 14,729
Cash and cash equivalents at beginning of 12,418 20,612
period..................................... 3,093 36,123
------- -------- -------- --------
Cash and cash equivalents at end of period... $21,582 $ 8,269 $ 21,001 $ 50,852
======= ======== ======== ========
</Table>

16. PRO FORMA INFORMATION (UNAUDITED)

The following unaudited pro forma information for the six months ended June
30, 2001 and 2000 is based in part upon the Consolidated Statements of
Operations of the Company, DJONT, Six Continents Hotels and MeriStar for the six
months ended June 30, 2001 and 2000.

The Pro Forma Combined Statements of Operations for the six months ended
June 30, 2001 and 2000 assumes that all the following occurred on January 1 of
the fiscal period presented:

- the Company's acquisition of DJONT, effective January 1, 2001, for
416,667 units of limited partnership interest valued at approximately $10
million;

- the Company's acquisition of 12 leases held by Bristol Tenant Company,
effective January 1, 2001, for 413,585 shares of FelCor common stock
valued at approximately $10 million;

- the Company's acquisition of the remaining 88 leases held by Bristol
Tenant Company, effective July 1, 2001;

- the assignment of the leases from MeriStar Hotels & Resorts, Inc. to
taxable REIT subsidiaries; and

- the completion of the MeriStar merger and related financings and the
application of the net proceeds.

F-63
230
FELCOR LODGING LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

16. PRO FORMA INFORMATION (UNAUDITED) -- (CONTINUED)

In the opinion of FelCor's management, all material adjustments necessary
to reflect the effects of the preceding transactions have been made. The
unaudited Pro Forma Combined Statement of Operations is presented for
illustrative purposes only and is not necessarily indicative of what the actual
results of operations would have been had the MeriStar merger and the other
transactions described above occurred on the indicated dates, nor do they
purport to represent the Company's results of operations for future periods.

<Table>
<Caption>
PRO FORMA
SIX MONTHS ENDED
JUNE 30,
-----------------------
2001 2000
---------- ----------

Total revenue............................................... $1,412,155 $1,471,031
Net income applicable to unitholders........................ 73,771 $ 88,395
Basic:
Net income applicable to unitholders...................... .74 .88
Weighted average units outstanding........................ 100,020 100,701
Diluted:
Net income applicable to unitholders...................... .73 .87
Weighted average units outstanding........................ 101,352 101,746
</Table>

17. SUBSEQUENT EVENTS

On July 18, 2001, the Company announced the commitment of a $500 million
standby loan facility. The loan facility will be available to fund any purchases
of MeriStar's existing 9 percent Senior Notes due 2009 or 9 1/8 percent Senior
Notes due 2011 pursuant to change in control provisions contained in the
indentures.

On July 26, 2001, the Company announced the increase of its line of credit
from $600 million to $700 million contingent upon the merger with MeriStar
closing. The new unsecured facility has similar terms as the existing facility.
The facility has a term of up to five years, a floating interest rate, and a
tiered spread based on the Company's leverage ratio. The increased line will be
available to refinance a portion of MeriStar's debt and for general corporate
purposes.

The Company has filed a registration statement on Form S-4 with the SEC in
connection with the merger. The registration statement is currently being
reviewed by the SEC but has not been declared effective. The Form S-4 contains a
prospectus, a proxy statement, and other documents for FelCor's and MeriStar's
stockholder meetings at which time the proposed merger will be considered. It is
planned to mail the proxy statement and prospectus contained in the Form S-4 to
our respective stockholders after the registration statement is declared
effective by the SEC. The Form S-4, proxy statement and prospectus will contain
important information about FelCor, MeriStar, the merger and related matters.

F-64
231

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

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P. OR MERISTAR
HOSPITALITY FINANCE CORP. SINCE THE DATE HEREOF OR THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.

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

MERISTAR HOSPITALITY OPERATING PARTNERSHIP, L.P.
MERISTAR HOSPITALITY FINANCE CORP.

OFFER TO EXCHANGE
$300,000,000 OF THEIR 9% SENIOR NOTES DUE 2008
AND
$200,000,000 OF THEIR 9 1/8% SENIOR NOTES DUE 2011

--------------------
PROSPECTUS
--------------------

, 2001

Until , 2001 (90 days after the date of this prospectus), all
dealers effecting transactions in the exchange notes, whether or not
participating in this distribution, may be required to deliver a prospectus.
This is in addition to the obligation of dealers to deliver a prospectus when
acting as underwriters and with respect to their unsold allotment.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
232

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 17-108 of the Delaware Revised Uniform Limited Partnership Act
provides that a limited partnership may indemnify and hold harmless any partners
or other persons from and against any and all claims and demands whatsoever,
subject to standards and restrictions set forth in the partnership agreement.
Accordingly, Section 7.6 of the Second Amended and Restated Agreement of Limited
Partnership Agreement of MeriStar Hospitality Operating Partnership, L.P., dated
as of August 3, 1998, provides that MeriStar Hospitality Operating Partnership
shall indemnify each partner of the partnership and their respective directors,
officers and trustees from and against any and all losses, claims, damages,
liabilities, reasonable legal expenses, judgments, fines, settlements and any
other amounts arising from any and all claims, demands, actions, suits or
proceedings, civil, criminal, administrative or investigative, that relate to
the operations of the partnership.

Section 145 of the Delaware General Corporation Law authorizes a
corporation to indemnify its directors, officers, employees and agents against
certain liabilities they may incur in such capacities, including liabilities
under the Securities Act, provided they act in good faith and in a manner
reasonably believed to be in or not opposed to the best interests of the
corporation. MeriStar Hospitality Finance Corp.'s certificate of incorporation
and bylaws require the company to indemnify its officers and directors to the
full extent permitted by Delaware law.

Section 102 of the Delaware General Corporation Law authorizes a
corporation to limit or eliminate its directors' liability to the corporation or
its stockholders for monetary damages for breaches of fiduciary duties, other
than for

(i) breaches of the duty of loyalty,

(ii) acts or omissions involving bad faith, intentional misconduct or
knowing violations of the law,

(iii) unlawful payments of dividends, stock purchases or redemptions,
or

(iv) transactions from which a director derives an improper personal
benefit.

MeriStar Hospitality Finance Corp.'s certificate of incorporation contains
provisions limiting the liability of the directors to the companies and to its
stockholders to the full extent permitted by Delaware law.

MeriStar Hospitality Corporation's articles of incorporation, obligates it,
to the maximum extent permitted by Maryland law, to indemnify and to pay or
reimburse reasonable expenses in advance of final disposition of a proceeding to
any person (or the estate of any person) who is or was a party to, or is
threatened to be made a party to, any threatened, pending or completed action,
suit or proceeding whether or not by or in the right of MeriStar Hospitality
Corporation, and whether civil, criminal, administrative, investigative or
otherwise, by reason of the fact that such person is or was a director or
officer of MeriStar Hospitality Corporation, or is or was serving at the request
of MeriStar Hospitality Corporation as a director, officer, trustee, partner,
member, agent or employee of another corporation, partnership, limited liability
company, association, joint venture, trust or other enterprise. MeriStar
Hospitality Corporation's articles of incorporation also permits it to indemnify
and advance expenses to any person who served a predecessor of MeriStar
Hospitality Corporation in any of the capacities described above and to any
employee or agent of MeriStar Hospitality Corporation or any predecessor.

The Maryland General Corporation Law requires a Maryland corporation
(unless its charter provides otherwise, which MeriStar Hospitality Corporation's
articles of incorporation does not) to indemnify a director or officer who has
been successful, on the merits or otherwise, in the defense of any Maryland
proceeding to which he is made a party by reason of his service in that
capacity. The Maryland General Corporation Law permits a corporation to
indemnify its present and former directors and officers, among
II-1
233

others, against judgments, penalties, fines, settlements and reasonable expenses
actually incurred by them in connection with any proceeding to which they may be
made a party by reason of their service in those or other capacities unless it
is established that (a) the act or omission of the director or officer was
material to the matter giving rise to the proceeding and (i) was committed in
bad faith or (ii) was the result of active and deliberate dishonesty, (b) the
director or officer actually received an improper personal benefit in money,
property or services or (c) in the case of any criminal proceeding, the director
or officer had reasonable cause to believe that the act or omission was
unlawful. However, a Maryland corporation may not indemnify for an adverse
judgment in a suit by or in the right of the corporation. In addition, the
Maryland General Corporation Law requires MeriStar Hospitality Corporation's, as
a condition to advancing expenses, to obtain (a) a written affirmation by the
director or officer of his good faith belief that he has met the standard of
conduct necessary for indemnification and (b) a written statement by him or on
his behalf to repay the amount paid or reimbursed by MeriStar Hospitality
Corporation if it shall ultimately be determined that the standard of conduct
was not met.

MeriStar Hospitality Corporation has purchased director and officer
liability insurance for the purpose of providing a source of funds to pay any
indemnification described above.

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits

<Table>
<Caption>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT
------- -----------------------

II-2
234

<Table>
<Caption>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT
------- -----------------------

3.21+ -- Certificate of Limited Partnership, as amended, of
CapStar Midland Partners, L.P.
3.22+ -- Limited Partnership Agreement of CapStar Midland
Partners, L.P.
3.23+ -- Certificate of Limited Partnership, as amended, of
CapStar Dallas Partners, L.P.
3.24+ -- Limited Partnership Agreement of CapStar Dallas Partners,
L.P.
3.25+ -- Certificate of Limited Partnership, as amended, of
CapStar Mockingbird Partners, L.P.
3.26+ -- Limited Partnership Agreement of CapStar Mockingbird
Partners, L.P.
3.27+ -- Certificate of Formation, as amended, of EquiStar
Schaumburg Company, L.L.C.
3.28+ -- Limited Liability Company Agreement, as amended, of
EquiStar Schaumburg Company, L.L.C.
3.29+ -- Certificate of Formation, as amended, of EquiStar
Bellevue Company, L.L.C.
3.30+ -- Limited Liability Company Agreement of EquiStar Bellevue
Company, L.L.C.
3.31+ -- Certificate of Formation, as amended, of EquiStar
Cleveland Company, L.L.C.
3.32+ -- Limited Liability Company Agreement of EquiStar Cleveland
Company, L.L.C.
3.33+ -- Certificate of Formation, as amended, of EquiStar Latham
Company, L.L.C.
3.34+ -- Limited Liability Company Agreement of EquiStar Latham
Company, L.L.C.
3.35+ -- Certificate of Formation of EquiStar Virginia Company,
L.L.C.
3.36+ -- Limited Liability Company Agreement of EquiStar Virginia
Company, L.L.C.
3.37+ -- Certificate of Formation, as amended, of EquiStar
Ballston Company, L.L.C.
3.38+ -- Limited Liability Company Agreement of EquiStar Ballston
Company, L.L.C.
3.39+ -- Certificate of Formation, as amended, and Certificate of
Restoration of EquiStar Salt Lake Company, L.L.C.
3.40+ -- Limited Liability Company Agreement of EquiStar Salt Lake
Company, L.L.C.
3.41+ -- Certificate of Formation, as amended, of EquiStar Atlanta
GP Company, L.L.C.
3.42+ -- Limited Liability Company Agreement of EquiStar Atlanta
GP Company, L.L.C.
3.43+ -- Certificate of Formation, as amended, of EquiStar Atlanta
LP Company, L.L.C.
3.44+ -- Limited Liability Company Agreement of EquiStar Atlanta
LP Company, L.L.C.
</Table>

II-3
235

<Table>
<Caption>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT
------- -----------------------

3.45+ -- Certificate of Formation, as amended, of CapStar
Washington Company, L.L.C.
3.46+ -- Limited Liability Company Agreement of CapStar Washington
Company, L.L.C.
3.47+ -- Certificate of Formation, as amended, of CapStar C.S.
Company, L.L.C.
3.48+ -- Limited Liability Company Agreement of CapStar C.S.
Company, L.L.C.
3.49+ -- Certificate of Formation, as amended, of CapStar San
Pedro Company, L.L.C.
3.50+ -- Limited Liability Company Agreement of CapStar San Pedro
Company, L.L.C.
3.51+ -- Certificate of Formation, as amended, of CapStar
Louisville Company, L.L.C.
3.52+ -- Limited Liability Company Agreement of CapStar Louisville
Company, L.L.C.
3.53+ -- Certificate of Formation, as amended, of CapStar
Lexington Company, L.L.C.
3.54+ -- Limited Liability Company Agreement of CapStar Lexington
Company, L.L.C.
3.55+ -- Certificate of Formation, as amended, of CapStar Oklahoma
City Company, L.L.C.
3.56+ -- Limited Liability Company Agreement of CapStar Oklahoma
City Company, L.L.C.
3.57+ -- Certificate of Formation, as amended, of CapStar Cherry
Hill Company, L.L.C.
3.58+ -- Limited Liability Company Agreement of CapStar Cherry
Hill Company, L.L.C.
3.59+ -- Certificate of Formation and Certificate of Merger, as
amended, of CapStar Frazer Company, L.L.C.
3.60+ -- Limited Liability Company Agreement of CapStar Frazer
Company, L.L.C.
3.61+ -- Certificate of Formation, as amended, of CapStar KC
Company, L.L.C.
3.62+ -- Limited Liability Company Agreement of CapStar KC
Company, L.L.C.
3.63+ -- Certificate of Formation, as amended, of CapStar National
Airport Company, L.L.C.
3.64+ -- Limited Liability Company Agreement of CapStar National
Airport Company, L.L.C.
3.65+ -- Certificate of Formation, as amended, of CapStar
Georgetown Company, L.L.C.
3.66+ -- Limited Liability Company Agreement of CapStar Georgetown
Company, L.L.C.
3.67+ -- Certificate of Formation, as amended, of CapStar Jekyll
Company, L.L.C.
3.68+ -- Limited Liability Company Agreement of CapStar Jekyll
Company, L.L.C.
3.69+ -- Certificate of Formation, as amended, of CapStar Detroit
Airport Company, L.L.C.
</Table>

II-4
236

<Table>
<Caption>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT
------- -----------------------

3.70+ -- Limited Liability Company Agreement of CapStar Detroit
Airport Company, L.L.C.
3.71+ -- Certificate of Formation of CapStar Tucson Company,
L.L.C.
3.72+ -- Limited Liability Company Agreement of CapStar Tucson
Company, L.L.C.
3.73+ -- Certificate of Formation, as amended, of CapStar Mesa
Company, L.L.C.
3.74+ -- Limited Liability Company Agreement of CapStar Mesa
Company, L.L.C.
3.75+ -- Certificate of Formation, as amended, of CapStar
Morristown Company, L.L.C.
3.76+ -- Limited Liability Company Agreement of CapStar Morristown
Company, L.L.C.
3.77+ -- Certificate of Formation, as amended, of CapStar
Indianapolis Company, L.L.C.
3.78+ -- Limited Liability Company Agreement of CapStar
Indianapolis Company, L.L.C.
3.79+ -- Certificate of Formation, as amended, of CapStar Chicago
Company, L.L.C.
3.80+ -- Amended and Restated Limited Liability Company Agreement
of CapStar Chicago Company, L.L.C.
3.81+ -- Certificate of Formation, as amended, of CapStar Windsor
Locks Company, L.L.C.
3.82+ -- Limited Liability Company Agreement of CapStar Windsor
Locks Company, L.L.C.
3.83+ -- Certificate of Formation, as amended, of CapStar Hartford
Company, L.L.C.
3.84+ -- Limited Liability Company Agreement of CapStar Hartford
Company, L.L.C.
3.85+ -- Certificate of Formation, as amended, of CapStar Cross
Keys Company, L.L.C.
3.86+ -- Limited Liability Company Agreement of CapStar Cross Keys
Company, L.L.C.
3.87+ -- Certificate of Formation, as amended, of CapStar Columbia
Company, L.L.C.
3.88+ -- Limited Liability Company Agreement of CapStar Columbia
Company, L.L.C.
3.89+ -- Certificate of Formation, as amended, of CapStar Roland
Park Company, L.L.C.
3.90+ -- Limited Liability Company Agreement of CapStar Roland
Park Company, L.L.C.
3.91+ -- Certificate of Formation, as amended, of CapStar
Forrestal Company, L.L.C.
3.92+ -- First Amended and Restated Limited Liability Company
Agreement of CapStar Forrestal Company, L.L.C.
3.93+ -- Certificate of Limited Partnership of MeriStar Santa
Barbara, L.P.
3.94+ -- Certificate of Limited Partnership of MeriStar LAJV, L.P.
</Table>

II-5
237

<Table>
<Caption>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT
------- -----------------------

3.95+ -- Certificate of Limited Partnership of MeriStar Cathedral
City, L.P.
3.96+ -- Certificate of Formation of MeriStar Sanibel Inn Company,
L.L.C.
3.97+ -- Limited Liability Company Agreement of MeriStar Sanibel
Inn Company, L.L.C.
3.98+ -- Certificate of Formation of MeriStar Sundial Beach
Company, L.L.C.
3.99+ -- Limited Liability Company Agreement of MeriStar Sundial
Beach Company, L.L.C.
3.100+ -- Certificate of Formation of MeriStar Safety Harbor
Company, L.L.C.
3.101+ -- Limited Liability Company Agreement of MeriStar Safety
Harbor Company, L.L.C.
3.102+ -- Certificate of Formation of MeriStar Seaside Inn Company,
L.L.C.
3.103+ -- Limited Liability Company Agreement of MeriStar Seaside
Inn Company, L.L.C.
3.104+ -- Certificate of Formation of MeriStar Plantation Shopping
Center Company, L.L.C.
3.105+ -- Limited Liability Company Agreement of MeriStar
Plantation Shopping Center Company, L.L.C.
3.106+ -- Certificate of Formation of MeriStar Song Of The Sea
Company, L.L.C.
3.107+ -- Limited Liability Company Agreement of MeriStar Song Of
The Sea Company, L.L.C.
3.108+ -- Certificate of Formation of MeriStar Shirley's Parcel
Company, L.L.C.
3.109+ -- Limited Liability Company Agreement of MeriStar Shirley's
Parcel Company, L.L.C.
3.110+ -- Certificate of Formation of MeriStar Sanibel Golf
Company, L.L.C.
3.111+ -- Limited Liability Company Agreement of MeriStar Sanibel
Golf Company, L.L.C.
3.112+ -- Certificate of Formation of MeriStar Marco Island
Company, L.L.C.
3.113+ -- Limited Liability Company Agreement of MeriStar Marco
Island Company, L.L.C.
3.114+ -- Certificate of Formation of MeriStar SS Plantation
Company, L.L.C.
3.115+ -- Limited Liability Company Agreement of MeriStar SS
Plantation Company, L.L.C.
3.116+ -- Certificate of Formation of MeriStar Hotel (Calgary
Airport) LLC
3.117+ -- Limited Liability Company Agreement of MeriStar Hotel
(Calgary Airport) LLC
3.118+ -- Certificate of Formation of MeriStar Hotel (Vancouver)
LLC
3.119+ -- Limited Liability Company Agreement of MeriStar Hotel
(Vancouver) LLC
3.120+ -- Certificate of Formation of MeriStar Hotel (Surrey) LLC
3.121+ -- Limited Liability Company Agreement of MeriStar Hotel
(Surrey) LLC
3.122+ -- Certificate of Formation of MeriStar Hotel (Burnaby) LLC
3.123+ -- Limited Liability Company Agreement of MeriStar Hotel
(Burnaby) LLC
3.124+ -- Certificate of Formation of AGH 75 Arlington Heights LLC
</Table>

II-6
238

<Table>
<Caption>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT
------- -----------------------

3.125+ -- Operating Agreement of AGH 75 Arlington Heights LLC
3.126+ -- Certificate of Limited Partnership, as amended, of 75
Arlington Heights Limited Partnership, L.P.
3.127+ -- Limited Partnership Agreement of 75 Arlington Heights
Limited Partnership, L.P.
3.128+ -- Certificate of Formation, as amended, of BCHI
Acquisition, L.L.C.
3.129+ -- Amended and Restated Operating Agreement of BCHI
Acquisitions L.L.C.
3.130+ -- Certificate of Limited Partnership, as amended, of MDV
Limited Partnership
3.131+ -- Second Amended and Restated Limited Partnership Agreement
of MDV Limited Partnership
3.132+ -- Certificate of Limited Partnership, as amended, of 183
Hotel Associates, Ltd.
3.133+ -- Amended and Restated Limited Partnership Agreement of 183
Hotel Associates, Ltd.
3.134+ -- Affidavit and Certificate of Limited Partnership of Lake
Buena Vista Partners, Ltd.
3.135+ -- Amended and Restated Limited Partnership Agreement of
Lake Buena Vista Partners, Ltd.
3.136+ -- Certificate of Limited Partnership of Durham I-85 Limited
Partnership
3.137+ -- Amended and Restated Limited Partnership Agreement of
Durham I-85 Limited Partnership
3.138+ -- Certificate of Limited Partnership, as amended, of Cocoa
Beach Hotels, Ltd.
3.139+ -- Second Amended and Restated Limited Partnership Agreement
of Cocoa Beach Hotels, Ltd.
3.140+ -- Certificate of Incorporation of MeriStar Hotel Lessee,
Inc.
3.141+ -- By-laws of MeriStar Hotel Lessee, Inc.
3.142+ -- Partnership Agreement, as amended, of Hotel Columbia
Company
3.143+ -- Certificate of Incorporation of MeriStar LP, Inc.
3.144+ -- By-laws of MeriStar LP, Inc.
3.145+ -- Amended Partnership Certificate of 3100 Joint Venture
3.146+ -- Amended and Restated Joint Venture Agreement of 3100
Glendale Joint Venture
4.1+ -- Form of 9% Senior Note due 2008.
4.2+ -- Form of 9 1/8% Senior Note due 2011.
4.3******* -- Indenture, dated January 26, 2001, between MeriStar
Hospitality Company Partnership, L.P., MeriStar
Hospitality Finance Corp., MeriStar Hospitality
Corporation, and U.S. Bank Trust National Association.
4.4******* -- Registration Rights Agreement, dated as of January 26,
2001, between MeriStar Hospitality Company Partnership,
L.P., MeriStar Hospitality Finance Corp., MeriStar
Hospitality Corporation and certain subsidiaries of
MeriStar Hospitality Company Partnership, L.P. and Lehman
Brothers Inc. and SG Cowen Securities Corporation.
</Table>

II-7
239

<Table>
<Caption>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT
------- -----------------------

4.5******* -- Registration Rights Agreement, dated as of January 26,
2001, between MeriStar Hospitality Company Partnership,
L.P. and MeriStar Hospitality Finance Corp., MeriStar
Hospitality Corporation and certain subsidiaries of
MeriStar Hospitality Company Partnership, L.P. and
Certain Other Parties.
5.1+ -- Opinion of Christopher L. Bennett, Esq. as to the
legality of the exchange notes.
8.1+ -- Opinion of Paul, Weiss, Rifkind, Wharton & Garrison as to
federal income tax matters.
10.1** -- Second Amended and Restated Agreement of Limited
Partnership of MeriStar Hospitality Company Partnership,
L.P. dated as of August 3, 1998.
10.2** -- Second Amended and Restated Senior Secured Credit
Agreement dated as of August 3, 1998.
10.3** -- Loan Agreement made as of August 3, 1998 between MeriStar
Hospitality Corporation and its affiliates and Secore
Financial Corporation.
10.4* -- Form of MeriStar Incentive Plan.
10.5* -- Form of MeriStar Non-Employee Directors' Incentive Plan.
10.6* -- Form of Employment Agreement between MeriStar Hospitality
Corporation and Paul W. Whetsell.
10.7* -- Form of Employment Agreement between MeriStar Hospitality
Corporation and Steven D. Jorns.
10.8** -- Form of Employment Agreement between MeriStar Hospitality
Corporation and Bruce G. Wiles.
10.9** -- Form of Employment Agreement between MeriStar Hospitality
Corporation and John Emery.
10.10* -- Form of Exchange Rights Agreement, by and among MeriStar
Hospitality Corporation, MeriStar Hospitality Company
Partnership, L.P., and the Persons set forth therein.
10.11* -- Company Partnership, L.P. CMC Company and CMC Company
Partnership, L.P.
10.12* -- Form of [Company] [Operating] Lease.
10.13**** -- Loan Agreement, dated as of August 12, 1999, between
MeriStar Hospitality Company Partnership, L.P. and Lehman
Brothers Holdings Inc. D/B/A Lehman Capital, a division
of Lehman Brothers Holdings Inc.
10.14****** -- Form of Profits-Only Company Partnership Units Plan.
10.15******* -- Amended Intercompany Agreement between MeriStar
Hospitality Corporation, MeriStar Hospitality Company
Partnership, L.P., MeriStar Hotel Lessee, Inc., MeriStar
Hotels & Resorts, Inc. and MeriStar H&R Company L.P.
10.16**** -- Specimen Subordinated Note.
10.17**** -- Specimen Convertible Note (included in Exhibit 10.21).
</Table>

II-8
240

<Table>
<Caption>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT
------- -----------------------

10.18**** -- Indenture, dated as of August 19, 1997, between CapStar
Hotel Company and IBJ Schroder Bank & Trust Company, as
Trustee.
10.19**** -- Second Supplemental Indenture, dated as of August 3,
1998, between MeriStar Hospitality Corporation and IBJ
Schroder Bank & Trust Company, as Trustee.
10.20**** -- Indenture, dated as of October 16, 1997, between CapStar
Hotel Company and First Trust, National Association, as
Trustee (the "Convertible Notes Indenture").
10.21**** -- Certificate dated October 16, 1997, pursuant to Section
3.1 of Convertible Notes Indenture.
10.22**** -- First Supplemental Indenture, dated as of August 3, 1998,
between MeriStar Hospitality Corporation and U.S. Bank
Trust, National Association, as Trustee.
10.23*** -- Indenture, dated as of March 18, 1999, between MeriStar
Hospitality Corporation and IBJ Whitehall Bank & Trust
Company, as Trustee.
10.24*** -- Specimen Certificate of Outstanding Note (included in
Exhibit 10.23 as Exhibit A).
10.25*** -- Specimen Certificate of Exchange Note.
10.26***** -- Form of MeriStar Hospitality Corporation Employee Stock
Purchase Plan.
10.27******* -- First Supplemental Indenture, dated as of January 26,
2001, between MeriStar Hospitality Corporation and The
Bank of New York.
10.28******* -- Third Supplemental Indenture, dated as of January 26,
2001, between MeriStar Hospitality Corporation and The
Bank of New York.
10.29******** -- Agreement and Plan of Merger, dated as of May 9, 2001,
among MeriStar Hospitality Corporation, MeriStar
Hospitality Operating Partnership, L.P., FelCor Lodging
Trust Incorporated and FelCor Lodging Limited
Partnership.
10.30********* -- First Amendment to Agreement and Plan of Merger, dated as
of August 16, 2001, among MeriStar Hospitality
Corporation, MeriStar Hospitality Operating Partnership,
L.P., FelCor Lodging Trust Incorporated and FelCor
Lodging Limited Partnership.
12.1++ -- Schedule Regarding the Computation of Ratios.
21.1+ -- Subsidiaries of the Company.
23.1++ -- Consent of KPMG LLP.
23.2++ -- Consent of PricewaterhouseCoopers LLP.
23.3++ -- Consent of Deloitte & Touche LLP.
23.4+ -- Consent of Christopher L. Bennett, Esq. (included in
Exhibit 5.1).
23.5+ -- Consent of Paul, Weiss, Rifkind, Wharton & Garrison
(included in Exhibit 8.1).
24+ -- Power of Attorney.
25+ -- Form T-1 Statement of Eligibility under the Trust
Indenture Act of 1939, as amended, of U.S. Bank Trust
National Association, as trustee under the Indenture.
99.1+ -- Form of Letter of Transmittal (including Guidelines for
Certification of Taxpayer Identification Number on
Substitute Form W-9).
</Table>

II-9
241

<Table>
<Caption>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT
------- -----------------------

99.2+ -- Form of Notice of Guaranteed Delivery.
</Table>

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

* Incorporated by reference to MeriStar Hospitality Corporation's
Registration Statement on Form S-4 (File No. 333-49611), filed with
the Securities and Exchange Commission on April 7, 1998.

** Incorporated by reference to MeriStar Hospitality Corporation's Annual
Report on Form 10-K (File No. 001-11903), filed with the Securities
and Exchange Commission on March 2, 1999.

*** Incorporated by reference to MeriStar Hospitality Corporation's
Registration Statement on Form S-4 (File No. 333-78163) filed with the
Securities and Exchange Commission on May 10, 1999.

**** Incorporated by reference to MeriStar Hospitality Corporation's Annual
Report on Form 10-K (File No. 001-11903) filed with the Securities and
Exchange commission on March 13, 2000.

***** Incorporated by reference to MeriStar Hospitality Corporation's
Registration Statement on Form S-8 (File No. 333-37888), filed with
the Securities and Exchange Commission on May 25, 2000.

****** Incorporated by reference to MeriStar Hospitality Corporation's
Quarterly Report on Form 10-Q (File No. 001-11903), filed with the
Securities and Exchange Commission on May 12, 2000.

******* Incorporated by reference to MeriStar Hospitality Corporation's Annual
Report on Form 10-K (File No. 001-11903), filed with the Securities
and Exchange Commission on March 6, 2001.

******** Incorporated by reference to MeriStar Hospitality Corporation's
Current Report on Form 8-K (File No. 001-11903), filed with the
Securities and Exchange Commission on May 10, 2001.

*********Incorporated by reference to MeriStar Hospitality Corporation's Current
Report on Form 8-K (file no. 001-11903), filed with the Securities and
Exchange Commission on August 28, 2001.

+ Previously filed.

++ Filed herewith.

(b) Financial Data Schedules

None.

ITEM 22. UNDERTAKINGS.

The undersigned registrants hereby undertake:

(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement;

(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act;

(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof which, individually or in the
aggregate, represent a fundamental change in the information described
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Securities and Exchange Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement;

II-10
242

(iii) to include any material information with respect to the not
previously disclosed in the registration statement or any material
change to such information in the registration statement;

(2) that, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof;

(3) to remove from registration by means of post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.

(4) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this
form, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to the
effective date of the registration statement through the date of responding
to the request.

(5) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in the registration statement when
it became effective.

(6) That, for purposes of determining any liability under the
Securities Act, each filing of the registrant's annual report pursuant to
Section 13(a) or 15(d) of the Exchange Act of 1934 that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrants pursuant to the foregoing provisions, or otherwise, the registrants
have been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrants of expenses
incurred or paid by a director, officer or controlling person of the registrants
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

II-11
243

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Washington, District of
Columbia, on September 11, 2001.

MERISTAR HOSPITALITY OPERATING
PARTNERSHIP, L.P.

By: MERISTAR HOSPITALITY CORPORATION,
as general partner

By: /s/ CHRISTOPHER L. BENNETT
-----------------------------------
Christopher L. Bennett
Vice President, Legal

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED,
THIS REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN
THE CAPACITIES INDICATED BELOW AND ON SEPTEMBER 11, 2001.

<Table>
<Caption>
SIGNATURE TITLE
--------- -----

* Principal Executive Officer
- -----------------------------------------------------
Paul W. Whetsell

* Principal Financial and Accounting Officer
- -----------------------------------------------------
John Emery

*By: /s/ CHRISTOPHER L. BENNETT
------------------------------------------------
Christopher L. Bennett
Attorney-in-fact
</Table>

II-12
244

SIGNATURES

MERISTAR HOSPITALITY FINANCE CORP.

By: /s/ CHRISTOPHER L. BENNETT
-------------------------------------
Christopher L. Bennett
Vice President, Legal

<Table>
<Caption>
SIGNATURE TITLE
--------- -----

* President and Director (Principal Executive
- ----------------------------------------------------- Officer)
Paul W. Whetsell

* President and Director (Principal Financial
- ----------------------------------------------------- and Accounting Officer)
John Emery

*By: /s/ CHRISTOPHER L. BENNETT
------------------------------------------------
Christopher L. Bennett
Attorney-in-fact
</Table>

II-13
245

SIGNATURES

MERISTAR HOSPITALITY CORPORATION

By: /s/ CHRISTOPHER L. BENNETT
-------------------------------------
Christopher L. Bennett
Vice President, Legal

<Table>
<Caption>
SIGNATURE TITLE
--------- -----

* Chief Executive Officer and Chairman of the
- ----------------------------------------------------- Board of Directors (Principal Executive
Paul W. Whetsell Officer)

* Vice Chairman of the Board of Directors
- -----------------------------------------------------
Steven D. Jorns

* President and Director
- -----------------------------------------------------
Bruce G. Wiles

* Chief Operating Officer and Director
- ----------------------------------------------------- (Principal Financial and Accounting Officer)
John Emery

* Director
- -----------------------------------------------------
James F. Dannhauser

* Director
- -----------------------------------------------------
Daniel L. Doctoroff

* Director
- -----------------------------------------------------
William S. Janes

* Director
- -----------------------------------------------------
H. Cabot Lodge III

* Director
- -----------------------------------------------------
D. Ellen Shuman

* Director
- -----------------------------------------------------
James R. Worms

*By: /s/ CHRISTOPHER L. BENNETT
------------------------------------------------
Christopher L. Bennett
Attorney-in-fact
</Table>

II-14
246

SIGNATURES

MERISTAR ACQUISITION COMPANY, L.L.C.
a Delaware limited liability company

By: MeriStar Hospitality Operating Partnership,
L.P.,
a Delaware limited partnership, member

By: MeriStar Hospitality Corporation,
a Maryland corporation, general partner

By: /s/ CHRISTOPHER L. BENNETT
-------------------------------------------
Christopher L. Bennett
Vice President, Legal

<Table>
<Caption>
SIGNATURE TITLE
--------- -----

* Principal Executive Officer
- -----------------------------------------------------
Paul W. Whetsell

* Principal Financial and Accounting Officer
- -----------------------------------------------------
John Emery

*By: /s/ CHRISTOPHER L. BENNETT
------------------------------------------------
Christopher L. Bennett
Attorney-in-fact
</Table>

II-15
247

SIGNATURES

AGH PSS I, INC.
a Delaware corporation

By: /s/ CHRISTOPHER L. BENNETT
-------------------------------------
Christopher L. Bennett
Vice President, Legal

<Table>
<Caption>
SIGNATURE TITLE
--------- -----

* President and Chief Executive Officer and
- ----------------------------------------------------- Director (Principal Executive Officer)
Paul W. Whetsell

* Chief Operating Officer and Treasurer and
- ----------------------------------------------------- Director (Principal Financial and Accounting
John Emery Officer)

*By: /s/ CHRISTOPHER L. BENNETT
------------------------------------------------
Christopher L. Bennett
Attorney-in-fact
</Table>

II-16
248

SIGNATURES

AGH UPREIT LLC
a Delaware limited liability company

By: MeriStar Hospitality Corporation,
a Maryland corporation, member

By: /s/ CHRISTOPHER L. BENNETT
-----------------------------------
Christopher L. Bennett
Vice President, Legal

By: MeriStar Hospitality Operating Partnership, L.P.,
a Delaware limited partnership, member

By: MeriStar Hospitality Corporation,
a Maryland corporation, general partner

By: /s/ CHRISTOPHER L. BENNETT
-----------------------------------
Christopher L. Bennett
Vice President, Legal

<Table>
<Caption>
SIGNATURE TITLE
--------- -----

* Principal Executive Officer
- -----------------------------------------------------
Paul W. Whetsell

* Principal Financial and Accounting Officer
- -----------------------------------------------------
John Emery

*By: /s/ CHRISTOPHER L. BENNETT
------------------------------------------------
Christopher L. Bennett
Attorney-in-fact
</Table>

II-17
249

SIGNATURES

CAPSTAR HOUSTON SW PARTNERS, L.P.
CAPSTAR MEDALLION HOUSTON
PARTNERS, L.P.
CAPSTAR MEDALLION DALLAS PARTNERS, L.P.
CAPSTAR MEDALLION AUSTIN PARTNERS, L.P.
CAPSTAR MIDLAND PARTNERS, L.P.
CAPSTAR DALLAS PARTNERS, L.P.
CAPSTAR MOCKINGBIRD PARTNERS, L.P.
Each of the above being a Delaware limited partnership

By: MeriStar Hospitality Operating Partnership, L.P.,
a Delaware limited partnership, general partner

By: MeriStar Hospitality Corporation,
a Maryland corporation, general partner

By: /s/ CHRISTOPHER L. BENNETT
-----------------------------------
Christopher L. Bennett
Vice President, Legal

<Table>
<Caption>
SIGNATURE TITLE
--------- -----

* Principal Executive Officer
- -----------------------------------------------------
Paul W. Whetsell

* Principal Financial and Accounting Officer
- -----------------------------------------------------
John Emery

*By: /s/ CHRISTOPHER L. BENNETT
------------------------------------------------
Christopher L. Bennett
Attorney-in-fact
</Table>

II-18
250

SIGNATURES

EQUISTAR SCHAUMBURG COMPANY, L.L.C.
EQUISTAR BELLEVUE COMPANY, L.L.C.
EQUISTAR CLEVELAND COMPANY, L.L.C.
EQUISTAR LATHAM COMPANY, L.L.C.
EQUISTAR VIRGINIA COMPANY, L.L.C.
EQUISTAR BALLSTON COMPANY, L.L.C.
EQUISTAR SALT LAKE COMPANY, L.L.C.
EQUISTAR ATLANTA GP COMPANY, L.L.C.
EQUISTAR ATLANTA LP COMPANY, L.L.C.
CAPSTAR WASHINGTON COMPANY, L.L.C.
CAPSTAR C.S. COMPANY, L.L.C.
CAPSTAR SAN PEDRO COMPANY, L.L.C.
CAPSTAR LOUISVILLE COMPANY, L.L.C.
CAPSTAR LEXINGTON COMPANY, L.L.C.
CAPSTAR OKLAHOMA CITY COMPANY, L.L.C.
CAPSTAR CHERRY HILL COMPANY, L.L.C.
CAPSTAR FRAZER COMPANY, L.L.C.
CAPSTAR KC COMPANY, L.L.C.
CAPSTAR NATIONAL AIRPORT COMPANY, L.L.C.
CAPSTAR GEORGETOWN COMPANY, L.L.C.
CAPSTAR JEKYLL COMPANY, L.L.C.
CAPSTAR DETROIT AIRPORT COMPANY, L.L.C.
CAPSTAR TUCSON COMPANY, L.L.C.
CAPSTAR MESA COMPANY, L.L.C.
CAPSTAR MORRISTOWN COMPANY, L.L.C.
CAPSTAR INDIANAPOLIS COMPANY, L.L.C.
CAPSTAR CHICAGO COMPANY, L.L.C.
CAPSTAR WINDSOR LOCKS COMPANY, L.L.C.
CAPSTAR HARTFORD COMPANY, L.L.C.
CAPSTAR CROSS KEYS COMPANY, L.L.C.
CAPSTAR COLUMBIA COMPANY, L.L.C.
CAPSTAR ROLAND PARK COMPANY, L.L.C.
CAPSTAR FORRESTAL COMPANY, L.L.C.
Each of the above being a Delaware limited liability
company

By: MeriStar Hospitality Operating Partnership, L.P.,
a Delaware limited partnership, member

By: MeriStar Hospitality Corporation,
a Maryland corporation, general partner

By: /s/ CHRISTOPHER L. BENNETT
-----------------------------------
Christopher L. Bennett
Vice President, Legal

II-19
251

<Table>
<Caption>
SIGNATURE TITLE
--------- -----

* Principal Executive Officer
- ---------------------------------------------
Paul W. Whetsell

* Principal Financial and Accounting Officer
- ---------------------------------------------
John Emery

*By: /s/ CHRISTOPHER L. BENNETT
- ---------------------------------------------
Christopher L. Bennett
Attorney-in-fact
</Table>

II-20
252

SIGNATURES

MERISTAR SANTA BARBARA, L.P.
MERISTAR LAJV, L.P.
MERISTAR CATHEDRAL CITY, L.P.
Each of the above being a Delaware limited partnership

By: MeriStar Hospitality Operating Partnership, L.P.,
a Delaware limited partnership, general partner

By: MeriStar Hospitality Corporation,
a Maryland corporation, general partner

By: /s/ CHRISTOPHER L. BENNETT
-----------------------------------
Christopher L. Bennett
Vice President, Legal

<Table>
<Caption>
SIGNATURE TITLE
--------- -----

* Principal Executive Officer
- -----------------------------------------------------
Paul W. Whetsell

* Principal Financial and Accounting Officer
- -----------------------------------------------------
John Emery

*By: /s/ CHRISTOPHER L. BENNETT
------------------------------------------------
Christopher L. Bennett
Attorney-in-fact
</Table>

II-21
253

SIGNATURES

MERISTAR SANIBEL INN COMPANY, L.L.C.
MERISTAR SUNDIAL BEACH COMPANY, L.L.C.
MERISTAR SAFETY HARBOR COMPANY, L.L.C.
MERISTAR SEASIDE INN COMPANY, L.L.C.
MERISTAR PLANTATION SHOPPING CENTER COMPANY, L.L.C.
MERISTAR SONG OF THE SEA COMPANY, L.L.C.
MERISTAR SHIRLEY'S PARCEL COMPANY, L.L.C.
MERISTAR SANIBEL GOLF COMPANY, L.L.C.
MERISTAR MARCO ISLAND COMPANY, L.L.C.
MERISTAR SS PLANTATION COMPANY, L.L.C.
MERISTAR HOTEL (CALGARY AIRPORT) LLC
MERISTAR HOTEL (VANCOUVER) LLC
MERISTAR HOTEL (SURREY) LLC
MERISTAR HOTEL (BURNABY) LLC
AGH 75 ARLINGTON HEIGHTS LLC
Each of the above being a Delaware limited liability
company

By: MeriStar Hospitality Operating Partnership, L.P.,
a Delaware limited partnership, member

By: MeriStar Hospitality Corporation,
a Maryland corporation, general partner

By: /s/ CHRISTOPHER L. BENNETT
-----------------------------------
Christopher L. Bennett
Vice President, Legal

<Table>
<Caption>
SIGNATURE TITLE
--------- -----

* Principal Executive Officer
- -----------------------------------------------------
Paul W. Whetsell

* Principal Financial and Accounting Officer
- -----------------------------------------------------
John Emery

*By: /s/ CHRISTOPHER L. BENNETT
------------------------------------------------
Christopher L. Bennett
Attorney-in-fact
</Table>

II-22
254

SIGNATURES

75 ARLINGTON HEIGHTS LIMITED
PARTNERSHIP, L.P.
a Delaware limited partnership

By: AGH 75 Arlington Heights LLC,
a Delaware limited liability company, general
partner

By: MeriStar Hospitality Operating Partnership,
L.P.,
a Delaware limited partnership, member

By: MeriStar Hospitality Corporation,
a Maryland corporation, general partner

By: /s/ CHRISTOPHER L. BENNETT
-----------------------------------
Christopher L. Bennett
Vice President, Legal

<Table>
<Caption>
SIGNATURE TITLE
--------- -----

* Principal Executive Officer
- -----------------------------------------------------
Paul W. Whetsell

* Principal Financial and Accounting Officer
- -----------------------------------------------------
John Emery

*By: /s/ CHRISTOPHER L. BENNETT
------------------------------------------------
Christopher L. Bennett
Attorney-in-fact
</Table>

II-23
255

SIGNATURES

BCHI ACQUISITION, L.L.C.
a Delaware limited liability company

By: AGH UPREIT LLC,
a Delaware limited liability company, member

By: MeriStar Hospitality Operating Partnership,
L.P.,
a Delaware limited partnership, member

By: MeriStar Hospitality Corporation,
a Maryland corporation, general partner

By: /s/ CHRISTOPHER L. BENNETT
-----------------------------------
Christopher L. Bennett
Vice President, Legal

By: MeriStar Hospitality Operating Partnership, L.P.,
a Delaware limited partnership, member

By: MeriStar Hospitality Corporation,
a Maryland corporation, general partner

By: /s/ CHRISTOPHER L. BENNETT
-----------------------------------
Christopher L. Bennett
Vice President, Legal

<Table>
<Caption>
SIGNATURE TITLE
--------- -----

* Principal Executive Officer
- -----------------------------------------------------
Paul W. Whetsell

* Principal Financial and Accounting Officer
- -----------------------------------------------------
John Emery

*By: /s/ CHRISTOPHER L. BENNETT
------------------------------------------------
Christopher L. Bennett
Attorney-in-fact
</Table>

II-24
256

SIGNATURES

MDV LIMITED PARTNERSHIP
a Texas limited partnership

183 HOTEL ASSOCIATES, LTD.
a Texas limited partnership

LAKE BUENA VISTA PARTNERS, LTD.
a Florida limited partnership

DURHAM I-85 LIMITED PARTNERSHIP
a Delaware limited partnership

COCOA BEACH HOTELS, LTD.
a Florida limited partnership

By: AGH UPREIT LLC,
a Delaware limited liability company, their general
partner

By: MeriStar Hospitality Operating Partnership, L.P.,
a Delaware limited partnership, member

By: MeriStar Hospitality Corporation,
a Maryland corporation, general partner

By: /s/ CHRISTOPHER L. BENNETT
-----------------------------------
Christopher L. Bennett
Vice President, Legal

<Table>
<Caption>
SIGNATURE TITLE
--------- -----

* Principal Executive Officer
- -----------------------------------------------------
Paul W. Whetsell

* Principal Financial and Accounting Officer
- -----------------------------------------------------
John Emery

*By: /s/ CHRISTOPHER L. BENNETT
------------------------------------------------
Christopher L. Bennett
Attorney-in-fact
</Table>

II-25
257

SIGNATURES

MERISTAR HOTEL LESSEE, INC.
a Delaware corporation

By: /s/ CHRISTOPHER L. BENNETT
-------------------------------------
Christopher L. Bennett
Vice President, Legal

<Table>
<Caption>
SIGNATURE TITLE
--------- -----

* President and Chief Executive Officer
- ----------------------------------------------------- (Principal Executive Officer)
Paul W. Whetsell

* Chief Operating Officer and Treasurer
- ----------------------------------------------------- (Principal Financial and Accounting Officer)
John Emery

*By: /s/ CHRISTOPHER L. BENNETT
------------------------------------------------
Christopher L. Bennett
Attorney-in-fact
</Table>

II-26
258

SIGNATURES

HOTEL COLUMBIA COMPANY
a Maryland general partnership

By: CapStar Columbia Company, L.L.C.,
a Delaware limited liability company, partner

By: MeriStar Hospitality Operating Partnership, L.P.,
a Delaware limited partnership, member

By: MeriStar Hospitality Corporation,
a Maryland corporation, general partner

By: /s/ CHRISTOPHER L. BENNETT
-----------------------------------
Christopher L. Bennett
Vice President, Legal

By: CapStar Roland Park Company, L.L.C.,
a Delaware limited liability company, partner

By: MeriStar Hospitality Operating Partnership, L.P.,
a Delaware limited partnership, member

By: MeriStar Hospitality Corporation,
a Maryland corporation, general partner

By: /s/ CHRISTOPHER L. BENNETT
-----------------------------------
Christopher L. Bennett
Vice President, Legal

<Table>
<Caption>
SIGNATURE TITLE
--------- -----

* Principal Executive Officer
- -----------------------------------------------------
Paul W. Whetsell

* Principal Financial and Accounting Officer
- -----------------------------------------------------
John Emery

*By: /s/ CHRISTOPHER L. BENNETT
------------------------------------------------
Christopher L. Bennett
Attorney-in-fact
</Table>

II-27
259

SIGNATURES

MERISTAR LP, INC.
a Nevada corporation

By: /s/ CHRISTOPHER L. BENNETT
-------------------------------------
Christopher L. Bennett
Vice President, Legal

<Table>
<Caption>
SIGNATURE TITLE
--------- -----

* President and Chief Executive Officer
- ----------------------------------------------------- (Principal Executive Officer)
Paul W. Whetsell

* Chief Operating Officer and Treasurer
- ----------------------------------------------------- (Principal Financial and Accounting Officer)
John Emery

*By: /s/ CHRISTOPHER L. BENNETT
------------------------------------------------
Christopher L. Bennett
Attorney-in-fact
</Table>

II-28
260

SIGNATURES

3100 GLENDALE JOINT VENTURE
an Ohio general partnership

By: AGH UPREIT LLC,
a Delaware limited liability company, partner

By: MeriStar Hospitality Operating Partnership, L.P.,
a Delaware limited partnership, member

By: MeriStar Hospitality Corporation,
a Maryland corporation, general partner

By: /s/ CHRISTOPHER L. BENNETT
-----------------------------------
Christopher L. Bennett
Vice President, Legal

By: MeriStar Hospitality Operating Partnership, L.P.,
a Delaware limited partnership, partner

By: MeriStar Hospitality Corporation,
a Maryland corporation, general partner

By: /s/ CHRISTOPHER L. BENNETT
-----------------------------------
Christopher L. Bennett
Vice President, Legal

<Table>
<Caption>
SIGNATURE TITLE
--------- -----

* Principal Executive Officer
- -----------------------------------------------------
Paul W. Whetsell

* Principal Financial and Accounting Officer
- -----------------------------------------------------
John Emery

*By: /s/ CHRISTOPHER L. BENNETT
------------------------------------------------
Christopher L. Bennett
Attorney-in-fact
</Table>

II-29
261

EXHIBIT INDEX

<Table>
<Caption>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT
------- -----------------------

3.1+ -- Certificate of Limited Partnership of MeriStar
Hospitality Operating Partnership, L.P.
3.2+ -- Second Amended and Restated Agreement of, as amended,
Limited Partnership of MeriStar Hospitality Operating
Partnership, L.P.
3.3+ -- Certificate of Incorporation of MeriStar Hospitality
Finance Corp.
3.4+ -- By-Laws of MeriStar Hospitality Finance Corp.
3.5* -- Amended and Restated Articles of Incorporation of
MeriStar Hospitality Corporation.
3.6* -- Amended and Restated By-laws of MeriStar Hospitality
Corporation.
3.7+ -- Certificate of Formation, of MeriStar Acquisition
Company, L.L.C.
3.8+ -- Operating Agreement of MeriStar Acquisition Company,
L.L.C.
3.9+ -- Certificate of Incorporation of AGH PSS I, Inc.
3.10+ -- By-Laws of AGH PSS I, Inc.
3.11+ -- Certificate of Formation, of AGH UPREIT LLC
3.12+ -- Operating Agreement of AGH UPREIT LLC
3.13+ -- Certificate of Limited Partnership, of CapStar Houston SW
Partners, L.P.
3.14+ -- Limited Partnership Agreement of CapStar Houston SW
Partners, L.P.
3.15+ -- Certificate of Limited Partnership, as amended, of
CapStar Medallion Houston Partners, L.P.
3.16+ -- Limited Partnership Agreement of CapStar Medallion
Houston Partners, L.P.
3.17+ -- Certificate of Limited Partnership of CapStar Medallion
Dallas Partners, L.P.
3.18+ -- Limited Partnership Agreement of CapStar Medallion Dallas
Partners, L.P.
3.19+ -- Certificate of Limited Partnership, as amended, of
CapStar Medallion Austin Partners, L.P.
3.20+ -- Limited Partnership Agreement of CapStar Medallion Austin
Partners, L.P.
3.21+ -- Certificate of Limited Partnership, as amended, of
CapStar Midland Partners, L.P.
3.22+ -- Limited Partnership Agreement of CapStar Midland
Partners, L.P.
3.23+ -- Certificate of Limited Partnership, as amended, of
CapStar Dallas Partners, L.P.
3.24+ -- Limited Partnership Agreement of CapStar Dallas Partners,
L.P.
3.25+ -- Certificate of Limited Partnership, as amended, of
CapStar Mockingbird Partners, L.P.
3.26+ -- Limited Partnership Agreement of CapStar Mockingbird
Partners, L.P.
3.27+ -- Certificate of Formation, as amended, of EquiStar
Schaumburg Company, L.L.C.
3.28+ -- Limited Liability Company Agreement, as amended, of
EquiStar Schaumburg Company, L.L.C.
3.29+ -- Certificate of Formation, as amended, of EquiStar
Bellevue Company, L.L.C.
3.30+ -- Limited Liability Company Agreement of EquiStar Bellevue
Company, L.L.C.
</Table>
262

<Table>
<Caption>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT
------- -----------------------

3.31+ -- Certificate of Formation, as amended, of EquiStar
Cleveland Company, L.L.C.
3.32+ -- Limited Liability Company Agreement of EquiStar Cleveland
Company, L.L.C.
3.33+ -- Certificate of Formation, as amended, of EquiStar Latham
Company, L.L.C.
3.34+ -- Limited Liability Company Agreement of EquiStar Latham
Company, L.L.C.
3.35+ -- Certificate of Formation of EquiStar Virginia Company,
L.L.C.
3.36+ -- Limited Liability Company Agreement of EquiStar Virginia
Company, L.L.C.
3.37+ -- Certificate of Formation, as amended, of EquiStar
Ballston Company, L.L.C.
3.38+ -- Limited Liability Company Agreement of EquiStar Ballston
Company, L.L.C.
3.39+ -- Certificate of Formation, as amended, and Certificate of
Restoration of EquiStar Salt Lake Company, L.L.C.
3.40+ -- Limited Liability Company Agreement of EquiStar Salt Lake
Company, L.L.C.
3.41+ -- Certificate of Formation, as amended, of EquiStar Atlanta
GP Company, L.L.C.
3.42+ -- Limited Liability Company Agreement of EquiStar Atlanta
GP Company, L.L.C.
3.43+ -- Certificate of Formation, as amended, of EquiStar Atlanta
LP Company, L.L.C.
3.44+ -- Limited Liability Company Agreement of EquiStar Atlanta
LP Company, L.L.C.
3.45+ -- Certificate of Formation, as amended, of CapStar
Washington Company, L.L.C.
3.46+ -- Limited Liability Company Agreement of CapStar Washington
Company, L.L.C.
3.47+ -- Certificate of Formation, as amended, of CapStar C.S.
Company, L.L.C.
3.48+ -- Limited Liability Company Agreement of CapStar C.S.
Company, L.L.C.
3.49+ -- Certificate of Formation, as amended, of CapStar San
Pedro Company, L.L.C.
3.50+ -- Limited Liability Company Agreement of CapStar San Pedro
Company, L.L.C.
3.51+ -- Certificate of Formation, as amended, of CapStar
Louisville Company, L.L.C.
3.52+ -- Limited Liability Company Agreement of CapStar Louisville
Company, L.L.C.
3.53+ -- Certificate of Formation, as amended, of CapStar
Lexington Company, L.L.C.
3.54+ -- Limited Liability Company Agreement of CapStar Lexington
Company, L.L.C.
3.55+ -- Certificate of Formation, as amended, of CapStar Oklahoma
City Company, L.L.C.
</Table>

263

<Table>
<Caption>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT
------- -----------------------

3.56+ -- Limited Liability Company Agreement of CapStar Oklahoma
City Company, L.L.C.
3.57+ -- Certificate of Formation, as amended, of CapStar Cherry
Hill Company, L.L.C.
3.58+ -- Limited Liability Company Agreement of CapStar Cherry
Hill Company, L.L.C.
3.59+ -- Certificate of Formation and Certificate of Merger, as
amended, of CapStar Frazer Company, L.L.C.
3.60+ -- Limited Liability Company Agreement of CapStar Frazer
Company, L.L.C.
3.61+ -- Certificate of Formation, as amended, of CapStar KC
Company, L.L.C.
3.62+ -- Limited Liability Company Agreement of CapStar KC
Company, L.L.C.
3.63+ -- Certificate of Formation, as amended, of CapStar National
Airport Company, L.L.C.
3.64+ -- Limited Liability Company Agreement of CapStar National
Airport Company, L.L.C.
3.65+ -- Certificate of Formation, as amended, of CapStar
Georgetown Company, L.L.C.
3.66+ -- Limited Liability Company Agreement of CapStar Georgetown
Company, L.L.C.
3.67+ -- Certificate of Formation, as amended, of CapStar Jekyll
Company, L.L.C.
3.68+ -- Limited Liability Company Agreement of CapStar Jekyll
Company, L.L.C.
3.69+ -- Certificate of Formation, as amended, of CapStar Detroit
Airport Company, L.L.C.
3.70+ -- Limited Liability Company Agreement of CapStar Detroit
Airport Company, L.L.C.
3.71+ -- Certificate of Formation of CapStar Tucson Company,
L.L.C.
3.72+ -- Limited Liability Company Agreement of CapStar Tucson
Company, L.L.C.
3.73+ -- Certificate of Formation, as amended, of CapStar Mesa
Company, L.L.C.
3.74+ -- Limited Liability Company Agreement of CapStar Mesa
Company, L.L.C.
3.75+ -- Certificate of Formation, as amended, of CapStar
Morristown Company, L.L.C.
3.76+ -- Limited Liability Company Agreement of CapStar Morristown
Company, L.L.C.
3.77+ -- Certificate of Formation, as amended, of CapStar
Indianapolis Company, L.L.C.
3.78+ -- Limited Liability Company Agreement of CapStar
Indianapolis Company, L.L.C.
3.79+ -- Certificate of Formation, as amended, of CapStar Chicago
Company, L.L.C.
3.80+ -- Amended and Restated Limited Liability Company Agreement
of CapStar Chicago Company, L.L.C.
3.81+ -- Certificate of Formation, as amended, of CapStar Windsor
Locks Company, L.L.C.
</Table>
264

<Table>
<Caption>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT
------- -----------------------

3.82+ -- Limited Liability Company Agreement of CapStar Windsor
Locks Company, L.L.C.
3.83+ -- Certificate of Formation, as amended, of CapStar Hartford
Company, L.L.C.
3.84+ -- Limited Liability Company Agreement of CapStar Hartford
Company, L.L.C.
3.85+ -- Certificate of Formation, as amended, of CapStar Cross
Keys Company, L.L.C.
3.86+ -- Limited Liability Company Agreement of CapStar Cross Keys
Company, L.L.C.
3.87+ -- Certificate of Formation, as amended, of CapStar Columbia
Company, L.L.C.
3.88+ -- Limited Liability Company Agreement of CapStar Columbia
Company, L.L.C.
3.89+ -- Certificate of Formation, as amended, of CapStar Roland
Park Company, L.L.C.
3.90+ -- Limited Liability Company Agreement of CapStar Roland
Park Company, L.L.C.
3.91+ -- Certificate of Formation, as amended, of CapStar
Forrestal Company, L.L.C.
3.92+ -- First Amended and Restated Limited Liability Company
Agreement of CapStar Forrestal Company, L.L.C.
3.93+ -- Certificate of Limited Partnership of MeriStar Santa
Barbara, L.P.
3.94+ -- Certificate of Limited Partnership of MeriStar LAJV, L.P.
3.95+ -- Certificate of Limited Partnership of MeriStar Cathedral
City, L.P.
3.96+ -- Certificate of Formation of MeriStar Sanibel Inn Company,
L.L.C.
3.97+ -- Limited Liability Company Agreement of MeriStar Sanibel
Inn Company, L.L.C.
3.98+ -- Certificate of Formation of MeriStar Sundial Beach
Company, L.L.C.
3.99+ -- Limited Liability Company Agreement of MeriStar Sundial
Beach Company, L.L.C.
3.100+ -- Certificate of Formation of MeriStar Safety Harbor
Company, L.L.C.
3.101+ -- Limited Liability Company Agreement of MeriStar Safety
Harbor Company, L.L.C.
3.102+ -- Certificate of Formation of MeriStar Seaside Inn Company,
L.L.C.
3.103+ -- Limited Liability Company Agreement of MeriStar Seaside
Inn Company, L.L.C.
3.104+ -- Certificate of Formation of MeriStar Plantation Shopping
Center Company, L.L.C.
3.105+ -- Limited Liability Company Agreement of MeriStar
Plantation Shopping Center Company, L.L.C.
3.106+ -- Certificate of Formation of MeriStar Song Of The Sea
Company, L.L.C.
3.107+ -- Limited Liability Company Agreement of MeriStar Song Of
The Sea Company, L.L.C.
3.108+ -- Certificate of Formation of MeriStar Shirley's Parcel
Company, L.L.C.
</Table>
265

<Table>
<Caption>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT
------- -----------------------

3.109+ -- Limited Liability Company Agreement of MeriStar Shirley's
Parcel Company, L.L.C.
3.110+ -- Certificate of Formation of MeriStar Sanibel Golf
Company, L.L.C.
3.111+ -- Limited Liability Company Agreement of MeriStar Sanibel
Golf Company, L.L.C.
3.112+ -- Certificate of Formation of MeriStar Marco Island
Company, L.L.C.
3.113+ -- Limited Liability Company Agreement of MeriStar Marco
Island Company, L.L.C.
3.114+ -- Certificate of Formation of MeriStar SS Plantation
Company, L.L.C.
3.115+ -- Limited Liability Company Agreement of MeriStar SS
Plantation Company, L.L.C.
3.116+ -- Certificate of Formation of MeriStar Hotel (Calgary
Airport) LLC
3.117+ -- Limited Liability Company Agreement of MeriStar Hotel
(Calgary Airport) LLC
3.118+ -- Certificate of Formation of MeriStar Hotel (Vancouver)
LLC
3.119+ -- Limited Liability Company Agreement of MeriStar Hotel
(Vancouver) LLC
3.120+ -- Certificate of Formation of MeriStar Hotel (Surrey) LLC
3.121+ -- Limited Liability Company Agreement of MeriStar Hotel
(Surrey) LLC
3.122+ -- Certificate of Formation of MeriStar Hotel (Burnaby) LLC
3.123+ -- Limited Liability Company Agreement of MeriStar Hotel
(Burnaby) LLC
3.124+ -- Certificate of Formation of AGH 75 Arlington Heights LLC
3.125+ -- Operating Agreement of AGH 75 Arlington Heights LLC
3.126+ -- Certificate of Limited Partnership, as amended, of 75
Arlington Heights Limited Partnership, L.P.
3.127+ -- Limited Partnership Agreement of 75 Arlington Heights
Limited Partnership, L.P.
3.128+ -- Certificate of Formation, as amended, of BCHI
Acquisition, L.L.C.
3.129+ -- Amended and Restated Operating Agreement of BCHI
Acquisitions L.L.C.
3.130+ -- Certificate of Limited Partnership, as amended, of MDV
Limited Partnership
3.131+ -- Second Amended and Restated Limited Partnership Agreement
of MDV Limited Partnership
3.132+ -- Certificate of Limited Partnership, as amended, of 183
Hotel Associates, Ltd.
3.133+ -- Amended and Restated Limited Partnership Agreement of 183
Hotel Associates, Ltd.
3.134+ -- Affidavit and Certificate of Limited Partnership of Lake
Buena Vista Partners, Ltd.
3.135+ -- Amended and Restated Limited Partnership Agreement of
Lake Buena Vista Partners, Ltd.
3.136+ -- Certificate of Limited Partnership of Durham I-85 Limited
Partnership
3.137+ -- Amended and Restated Limited Partnership Agreement of
Durham I-85 Limited Partnership
</Table>
266

<Table>
<Caption>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT
------- -----------------------

3.138+ -- Amendment to Certificate of Limited Partnership, as
amended, of Cocoa Beach Hotels, Ltd.
3.139+ -- Second Amended and Restated Limited Partnership Agreement
of Cocoa Beach Hotels, Ltd.
3.140+ -- Certificate of Incorporation of MeriStar Hotel Lessee,
Inc.
3.141+ -- By-laws of MeriStar Hotel Lessee, Inc.
3.142+ -- Partnership Agreement, as amended, of Hotel Columbia
Company
3.143+ -- Certificate of Incorporation of MeriStar LP, Inc.
3.144+ -- By-laws of MeriStar LP, Inc.
3.145+ -- Amended Partnership Certificate of 3100 Joint Venture
3.146+ -- Amended and Restated Joint Venture Agreement of 3100
Glendale Joint Venture
4.1+ -- Form of 9% Senior Note due 2008.
4.2+ -- Form of 9 1/8% Senior Note due 2011.
4.3******* -- Indenture, dated January 26, 2001, between MeriStar
Hospitality Company Partnership, L.P., MeriStar
Hospitality Finance Corp., MeriStar Hospitality
Corporation, and U.S. Bank Trust National Association.
4.4******* -- Registration Rights Agreement, dated as of January 26,
2001, between MeriStar Hospitality Company Partnership,
L.P., MeriStar Hospitality Finance Corp., MeriStar
Hospitality Corporation and certain subsidiaries of
MeriStar Hospitality Company Partnership, L.P. and Lehman
Brothers Inc. and SG Cowen Securities Corporation.
4.5******* -- Registration Rights Agreement, dated as of January 26,
2001, between MeriStar Hospitality Company Partnership,
L.P. and MeriStar Hospitality Finance Corp., MeriStar
Hospitality Corporation and certain subsidiaries of
MeriStar Hospitality Company Partnership, L.P. and
Certain Other Parties.
5.1+ -- Opinion of Christopher L. Bennett, Esq. as to the
legality of the exchange notes.
8.1+ -- Opinion of Paul, Weiss, Rifkind, Wharton & Garrison as to
federal income tax matters.
10.1** -- Second Amended and Restated Agreement of Limited
Partnership of MeriStar Hospitality Company Partnership,
L.P. dated as of August 3, 1998.
10.2** -- Second Amended and Restated Senior Secured Credit
Agreement dated as of August 3, 1998.
10.3** -- Loan Agreement made as of August 3, 1998 between MeriStar
Hospitality Corporation and its affiliates and Secore
Financial Corporation.
10.4* -- Form of MeriStar Incentive Plan.
10.5* -- Form of MeriStar Non-Employee Directors' Incentive Plan.
10.6* -- Form of Employment Agreement between MeriStar Hospitality
Corporation and Paul W. Whetsell.
10.7* -- Form of Employment Agreement between MeriStar Hospitality
Corporation and Steven D. Jorns.
10.8** -- Form of Employment Agreement between MeriStar Hospitality
Corporation and Bruce G. Wiles.
10.9** -- Form of Employment Agreement between MeriStar Hospitality
Corporation and John Emery.
</Table>

267

<Table>
<Caption>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT
------- -----------------------

10.10* -- Form of Exchange Rights Agreement, by and among MeriStar
Hospitality Corporation, MeriStar Hospitality Company
Partnership, L.P., and the Persons set forth therein.
10.11* -- Company Partnership, L.P. CMC Company and CMC Company
Partnership, L.P.
10.12* -- Form of [Company] [Operating] Lease.
10.13**** -- Loan Agreement, dated as of August 12, 1999, between
MeriStar Hospitality Company Partnership, L.P. and Lehman
Brothers Holdings Inc. D/B/A Lehman Capital, a division
of Lehman Brothers Holdings Inc.
10.14****** -- Form of Profits-Only Company Partnership Units Plan.
10.15******* -- Amended Intercompany Agreement between MeriStar
Hospitality Corporation, MeriStar Hospitality Company
Partnership, L.P., MeriStar Hotel Lessee, Inc., MeriStar
Hotels & Resorts, Inc. and MeriStar H&R Company L.P.
10.16**** -- Specimen Subordinated Note.
10.17**** -- Specimen Convertible Note (included in Exhibit 10.21).
10.18**** -- Indenture, dated as of August 19, 1997, between CapStar
Hotel Company and IBJ Schroder Bank & Trust Company, as
Trustee.
10.19**** -- Second Supplemental Indenture, dated as of August 3,
1998, between MeriStar Hospitality Corporation and IBJ
Schroder Bank & Trust Company, as Trustee.
10.20**** -- Indenture, dated as of October 16, 1997, between CapStar
Hotel Company and First Trust, National Association, as
Trustee (the "Convertible Notes Indenture").
10.21**** -- Certificate dated October 16, 1997, pursuant to Section
3.1 of Convertible Notes Indenture.
10.22**** -- First Supplemental Indenture, dated as of August 3, 1998,
between MeriStar Hospitality Corporation and U.S. Bank
Trust, National Association, as Trustee.
10.23*** -- Indenture, dated as of March 18, 1999, between MeriStar
Hospitality Corporation and IBJ Whitehall Bank & Trust
Company, as Trustee.
10.24*** -- Specimen Certificate of Outstanding Note (included in
Exhibit 10.23 as Exhibit A).
10.25*** -- Specimen Certificate of Exchange Note.
10.26***** -- Form of MeriStar Hospitality Corporation Employee Stock
Purchase Plan.
10.27******* -- First Supplemental Indenture, dated as of January 26,
2001, between MeriStar Hospitality Corporation and The
Bank of New York.
10.28******* -- Third Supplemental Indenture, dated as of January 26,
2001, between MeriStar Hospitality Corporation and The
Bank of New York.
10.29******** -- Agreement and Plan of Merger, dated as of May 9, 2001,
among MeriStar Hospitality Corporation, MeriStar
Hospitality Operating Partnership, L.P., FelCor Lodging
Trust Incorporated and FelCor Lodging Limited
Partnership.
10.30********* -- First Amendment to Agreement and Plan of Merger, dated as
of August 16, 2001, among MeriStar Hospitality
Corporation, MeriStar Hospitality Operating Partnership,
L.P., FelCor Lodging Trust Incorporated and FelCor
Lodging Limited Partnership.
</Table>

268

<Table>
<Caption>
EXHIBIT
NO. DESCRIPTION OF DOCUMENT
------- -----------------------

12.1++ -- Schedule Regarding the Computation of Ratios.
21.1+ -- Subsidiaries of the Company.
23.1++ -- Consent of KPMG LLP.
23.2++ -- Consent of PricewaterhouseCoopers LLP.
23.3++ -- Consent of Deloitte & Touche LLP.
23.4+ -- Consent of Christopher L. Bennett, Esq. (included in
Exhibit 5.1).
23.5+ -- Consent of Paul, Weiss, Rifkind, Wharton & Garrison
(included in Exhibit 8.1).
24+ -- Power of Attorney.
25+ -- Form T-1 Statement of Eligibility under the Trust
Indenture Act of 1939, as amended, of U.S. Bank Trust
National Association, as trustee under the Indenture.
99.1+ -- Form of Letter of Transmittal (including Guidelines for
Certification of Taxpayer Identification Number on
Substitute Form W-9).
99.2+ -- Form of Notice of Guaranteed Delivery.
</Table>