5. Debt:

   The Company’s outstanding debt balance as of December 31, 2000 consisted of amounts due under two debt facilities.

   On February 1, 1999, the Company entered into a three-year $140,000 line of credit agreement (the "Line") with a group of banks led by Wachovia Bank, N.A. The Line replaced the Company’s previous $125,000 line of credit (the "Previous Line"). The Line bears interest at rates from LIBOR plus 1.45% to 1.70%, based on the Company’s level of total indebtedness. The Company’s current rate is LIBOR plus 1.45%. A commitment fee of 0.05% is also payable quarterly on the unused portion of the Line. The Company used the proceeds from the Line primarily to pay off the outstanding balances under the Previous Line. The Company has collateralized the Line with 28 of its Current Hotels, with a carrying value of $ 210,694 as of December 31, 2000. The Line requires the Company to maintain certain financial ratios including maximum leverage, minimum interest coverage and minimum fixed charge coverage, as well as certain levels of unsecured and secured debt and tangible net worth, all of which the Company was in compliance with as of December 31, 2000.

   On December 18, 2000, the Company completed an interest rate swap on $50,000 of its outstanding variable rate debt under the Line. This transaction effectively replaces the Company’s variable interest rate based on 30-day LIBOR on $50,000 of the Line with a fixed interest rate of 5.915% until December 18, 2002. The Line’s interest rate spread is currently 1.45%, equating to an effective fixed rate of 7.365% on $50,000 until December 18, 2002.

   On November 3, 1998, the Company closed a $71,000 loan with GE Capital Corporation. The ten-year loan, with a 25-year amortization period, bears interest at a fixed rate of 7.375%. Fourteen of the Company’s Current Hotels, with a carrying value of $120,201 as of December 31, 2000, serve as collateral for the loan. The Company used the net proceeds from the loan to pay down the then existing line of credit balance. As of December 31, 2000, $68,872 was outstanding. All unpaid principal and interest are due on December 1, 2008. The loan agreement with GE Capital Corporation requires monthly principle and interest payments of $519 and requires the Company to establish escrow reserves for the purposes of debt service, capital improvements and property taxes and insurance. These reserves, which are held by GE Capital Corporation, totaled $3,038 as of December 31, 2000 and are included in prepaid expenses and other assets on the accompanying Consolidated Balance Sheets.

   As of December 31, 2000 and 1999 the Company’s outstanding debt balance under its Line totaled $103,800 and $104,500, respectively. From January 1, 1999 through December 18, 2000, interest rates on borrowings were LIBOR plus 1.45%. From December 18, 2000 through December 31, 2000, interest rates on $50,000 of outstanding debt under the Line were at 5.915% plus 1.45%, with the remainder at LIBOR plus 1.45%. Interest costs were payable monthly in arrears. As of December 31, 2000 and 1999 the weighted average interest rates on the outstanding balance under the Line were 7.76% and 6.84%, respectively. During the years ended December 31, 2000, 1999 and 1998, the Company capitalized interest of $26, $163 and $1,513 respectively, related to hotels under development or major renovation.

   During 1999, the Company entered into an interest rate cap agreement to eliminate the exposure to increases in 30-day LIBOR over 7.50%, and therefore from its exposure to interest rate increases over 8.95% under its $140,000 line of credit on a principal balance of $25,000 for the period of March 23, 1999 through March 25, 2002.