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                                                               Exhibit 10.8

                               PURCHASE AGREEMENT


                  THIS PURCHASE AGREEMENT ("Agreement") is made as of the 
31st day of December, 1997, by and among Patriot American Hospitality, Inc., 
a Delaware corporation (the "REIT"), Patriot American Hospitality Operating 
Company, a Delaware corporation (the "OPCO") (the REIT and the OPCO, each a 
"Company" and collectively the "Companies"), and UBS Limited, an English 
corporation ("UBS Limited") and Union Bank of Switzerland, London Branch 
("UBS-LB"), acting through its agent UBS Securities LLC (UBS Limited and 
UBS-LB being hereinafter collectively called the "UBS Parties" and sometimes 
individually, a "UBS Party"). References herein to the "Companies" refer to 
the REIT and the OPCO, and those entities respectively owned or controlled by 
the REIT or the OPCO.

                  IN CONSIDERATION of the mutual covenants contained in this 
Purchase Agreement, the REIT, the OPCO and the UBS Parties agree as follows:

                  SECTION 1. Authorization of Sale of the Shares. Subject to 
the terms and conditions of this Agreement, the REIT has authorized the 
issuance to UBS Limited of up to an aggregate of 3,250,000 shares of common 
stock, par value $0.01 per share, of the REIT (the "REIT Shares") and the 
OPCO has authorized the issuance to UBS Limited of up to an aggregate of 
3,250,000 shares of common stock, par value $0.01 per share (the "OPCO 
Shares"), which REIT Shares and OPCO Shares are paired and traded as a unit 
consisting of one (1) REIT Share and one (1) OPCO Share (hereinafter each 
such paired unit is referred to as a "Paired Share" and the Paired Shares 
referred to in this sentence are herein called the "Purchase Shares"). In 
addition, the REIT and the OPCO may issue to UBS-LB additional Paired Shares 
in settlement of certain of its obligations under the Forward Stock Purchase 
Agreement, dated December 31, 1997 (the "Forward Stock Purchase Agreement"), 
among the REIT, the OPCO and UBS-LB (the "Additional Shares"). The Purchase 
Shares and the Additional Shares are hereinafter collectively called the 
"Shares. "

                  SECTION 2. Agreement to Sell and Purchase the Purchase 
Shares. Subject to the terms and conditions of this Agreement, on the Closing 
Date (as defined in Section 3 hereof), the Companies will sell to UBS Limited 
the Purchase Shares, the number of which shall equal 3,250,000 paired shares 
for a per paired share purchase price of $28.8125 per Paired Share.

                  SECTION 3.  Delivery of the Shares at the Closing.

                  3.1. Closing. The completion of the purchase and sale of 
the Purchase Shares (the "Closing") shall occur as soon as practicable, on 
such date to be agreed upon among the REIT, the OPCO and the UBS Parties, but 
in no event later than the earlier of (i) December 31, 1997 or (ii) three 
business days after the execution of this Agreement (hereinafter, the 
"Closing Date").

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                  3.2. Conditions. At Closing, the Companies shall deliver or 
cause to be delivered to UBS Limited one or more stock certificates 
registered in the name of UBS Limited representing the number of Purchase 
Shares set forth in Section 2 above.

                  The obligation of the Companies to complete the sale of the 
Purchase Shares and deliver such stock certificate(s) to UBS Limited at the 
Closing shall be subject to the following conditions, any one or more of 
which may be waived by both of the Companies acting together: (i) receipt by 
the Companies of Federal Funds (or other mutually agreed upon form of 
payment) in the full amount of the purchase price for the Purchase Shares 
being purchased hereunder, (ii) the accuracy in all material respects, as of 
the Closing Date, of the representations and warranties made by the UBS 
Parties herein and the fulfillment, in all material respects, as of the 
Closing Date, of those undertakings of the UBS Parties to be fulfilled prior 
to the Closing, (iii) the Forward Stock Purchase Agreement shall have been 
fully executed by the parties thereto and (iv) receipt by the Companies of a 
cross-receipt with respect to the Purchase Shares executed by UBS Limited.

                  UBS Limited's obligation to accept delivery of such stock 
certificate(s) and to pay for the Purchase Shares evidenced thereby shall be 
subject to the following conditions: (i) the accuracy in all material 
respects, as of the Closing Date, of the representations and warranties made 
by the Companies herein and the fulfillment in all material respects, as of 
the Closing Date, of those undertakings of the Companies to be fulfilled 
prior to Closing; and (ii) the UBS Parties shall have received all opinions 
and certificates to be delivered by the Companies pursuant to this Agreement.

                  SECTION 4. Representations, Warranties and Covenants of the 
Companies. The Companies hereby represent and warrant to, and covenant with, 
the UBS Parties as follows:

                  4.1. Organization and Qualification. The REIT has been 
formed as a real estate investment trust under Delaware law pursuant to a 
Certificate of Incorporation filed as of January 27, 1983 in the office of 
the Delaware Secretary of State, as amended and restated as of July 1, 1997 
and filed in the office of the Delaware Secretary of State on such date. The 
REIT's existence has not been suspended or terminated nor have any 
dissolution, revocation or forfeiture proceedings regarding the REIT been 
commenced. The REIT has been duly qualified to do business in each 
jurisdiction (i) wherein it owns, leases or manages real property or (ii) 
where the failure so to qualify to do business would have a material adverse 
effect on the financial condition, business, operations or prospects of the 
Companies taken as a whole (a "Material Adverse Effect"). The OPCO has been 
duly organized, is validly existing and in good standing under the laws of 
Delaware. The OPCO's corporate existence has not been suspended or 
terminated, nor have any dissolution, liquidation or forfeiture proceedings 
involving the OPCO been commenced. The OPCO has been duly qualified to do 
business in each jurisdiction (i) wherein such entity owns, leases or manages 
real property or (ii) where the failure so to qualify to do business would 
have a Material Adverse Effect.

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<PAGE>

                  4.2. Authorized Capital Stock. The REIT has 1.5 billion 
authorized shares as of December 1, 1997, consisting of 650 million REIT 
Shares, par value $0.01 per share, 750 million shares of excess stock, par 
value $0.01 per share, and 100 million shares of preferred stock, par value 
$0.01 per share. The OPCO has authorized capital stock as of December 1, 1997 
of 1.5 billion shares, consisting of 650 million OPCO Shares, par value $0.01 
per share, 750 million shares of excess stock, par value $0.01 per share and 
100 million shares of preferred stock, par value $0.01 per share. As of 
December 1, 1997, there were 70,120,137 Paired Shares outstanding, 7,975,970 
Paired Shares were reserved for issuance pursuant to equity plans filed 
pursuant to the Companies' SEC Filings (as defined below), and 12,795,851 
Paired Shares were reserved for issuance upon the election by the Companies 
to acquire, in exchange for Paired Shares, units of limited partnership 
interest in Patriot American Hospitality Partnership, L.P. and Patriot 
American Hospitality Operating Partnership, L.P. tendered by redeeming unit 
holders. No preferred shares of the REIT are currently outstanding. The 
issued and outstanding Paired Shares of the Companies have been duly 
authorized and validly issued, are fully paid and nonassessable, have been 
issued in compliance with all federal and state securities laws, were not 
issued in violation of or subject to any preemptive rights or other rights to 
subscribe for or purchase securities, and conform to the description thereof 
included in the Companies' SEC Filings. Other than as described in the 
Companies' SEC Filings, the REIT does not have outstanding any options to 
purchase, or any preemptive rights or other rights to subscribe for or to 
purchase, any securities or obligations convertible into, or any contracts or 
commitments to issue or sell, shares of its capital stock or any such 
options, rights, convertible securities or obligations. The description of 
the REIT's stock, stock bonus and other stock plans or arrangements and the 
options or other rights granted and exercised thereunder in the Companies' 
SEC Fillings accurately and fairly presents the information required to be 
shown with respect to such plans, arrangements, options and rights.

                  4.3. Issuance, Sale and Delivery of the Shares. The 
Purchase Shares to be sold by the Companies have been duly authorized and, 
when issued, delivered and paid for in the manner set forth in this 
Agreement, will be duly authorized, validly issued, fully paid and 
nonassessable, and will conform to the description thereof included in the 
Companies' SEC Filings or incorporated by reference in the Registration 
Statements, if available. The Additional Shares, if and when issued pursuant 
to the Forward Stock Purchase Agreement, will be duly authorized, validly 
issued, fully paid and nonassessable, and will conform to the description 
thereof included in the Companies' SEC filings or incorporated by reference 
in the Registration Statements. None of the Purchase Shares when issued and 
delivered to the UBS Parties shall be subject to any lien, security interest, 
claim, charge or encumbrance of any nature. No further approval or authority 
of the stockholders or the Board of Directors of the REIT or the OPCO will be 
required for the issuance and/or sale of the Purchase Shares to be sold by 
the Companies as contemplated herein or in the Forward Stock Purchase 
Agreement, except such as shall have been obtained on or before the Closing 
Date. The issuance and/or sale of the Purchase Shares to the UBS Parties by 
the Companies pursuant to this Agreement or the Forward Stock Purchase 
Agreement (as the case may be), the compliance by the Companies with the 
other provisions of this Agreement or the Forward Stock Purchase Agreement 
and the consummation of the other transactions contemplated hereby or thereby 
do not require the consent, approval, authorization, registration 

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or qualification of or with any governmental authority, except such as shall 
have been obtained on or before the Closing Date other than the registration 
of the resale of the Shares by the UBS Parties with the Securities and 
Exchange Commission (the "SEC") and any required Blue Sky filings with the 
States. The Companies meet and will continue to meet the requirements for use 
of Form S-3 under the Securities Act and the rules and regulations 
promulgated thereunder (the "Rules and Regulations"). The Companies have 
filed and will file all documents which are required to file under the 
Securities Exchange Act of 1934, as amended (the "Exchange Act") and all such 
documents (collectively, together with the Companies' registration statements 
filed under the Securities Act which have been declared effective since 
January 1, 1997 and have not been withdrawn, the "Companies' SEC Filings") 
comply in all material respects with the requirements of the Exchange Act and 
the rules and regulations thereunder, as applicable, and none of such 
documents, when so filed, contained or will contain any untrue statement of a 
material fact or omitted to state a material fact required to be stated 
therein or necessary in order to make the statements therein, in light of the 
circumstances under which they were made, not misleading, and any documents 
so filed and incorporated by reference subsequent to the effective date of 
the Registration Statements (as defined in Section 7 below) shall, when they 
are filed with the SEC, conform in all material respects with the 
requirements of the Securities Act and the Rules and Regulations and the 
Exchange Act and the rules and regulations thereunder, as applicable. No 
Registration Statement filed in respect of any of the Purchase Shares or 
Additional Shares, when so filed, will contain any untrue statement of a 
material fact required to be stated therein or necessary in order to make the 
statements therein, in light of the circumstances under which they were made, 
not misleading.

                  4.4. Due Execution, Delivery and Performance of the 
Agreement. Each Company has full legal right, power and authority to enter 
into the Purchase Agreement and the Forward Stock Purchase Agreement and 
perform the transactions contemplated hereby and thereby. The Purchase 
Agreement and the Forward Stock Purchase Agreement have been duly authorized, 
executed and delivered by the Companies. The making and performance of the 
Purchase Agreement and the Forward Stock Purchase Agreement by the Companies 
and the consummation of the transactions herein and therein contemplated will 
not violate any provision of the certificate of incorporation, bylaws, or 
other organizational documents, of the Companies, and will not conflict with, 
result in the breach or violation of, or constitute, either by itself or upon 
notice or the passage of time or both, a default under any material 
agreement, mortgage, deed of trust, lease, franchise, license, indenture, 
permit or other instrument to which either Company is a party or by which 
either Company or its respective properties may be bound or affected, any 
statute or any authorization, judgment, decree, order, rule or regulation of 
any court or any regulatory body, administrative agency or other governmental 
body applicable to either Company or any of its respective properties. No 
consent, approval, authorization or other order of any court, regulatory 
body, administrative agency or other governmental body is required by or on 
the part of either Company for the execution and delivery of this Agreement, 
the Forward Stock Purchase Agreement or the consummation of the transactions 
contemplated hereby or thereby, except in connection with the filing of any 
Registration Statements pursuant to Section 7 below or for compliance with 
the Blue Sky laws applicable to the offering of the Shares. Upon the 
execution and delivery hereof, each of this Agreement and the Forward Stock 
Purchase

                                       4

<PAGE>

Agreement will constitute the valid and binding obligation of the Company, 
enforceable in accordance with its terms, except as enforceability may be 
limited by applicable bankruptcy, insolvency, reorganization, moratorium or 
similar laws affecting creditors' and contracting parties' rights generally 
and except as enforceability may be subject to general principles of equity 
(regardless of whether such enforceability is considered in a proceeding in 
equity or at law) and except as the enforceability of the indemnification 
agreements of the Companies in Section 7.5 hereof may be limited by public 
policy.

                  4.5. Accountants. The Companies' independent certified 
public accountants, who have expressed their opinion with respect to the Most 
Recent Financial Statements (as defined below) are independent accountants as 
required by the Securities Act and the Rules and Regulations. Each Company 
shall cause its independent certified public accountants to deliver, on the 
effective date of the Registration Statement, and thereafter upon the request 
of a UBS Entity (which shall be made no more frequently than once during any 
30-day period), a letter stating that such accountants are independent public 
accountants within the meaning of the Securities Act and otherwise in 
customary form and covering such financial and accounting matters as are then 
customarily covered by letters of independent certified public accountants 
delivered in connection with secondary public offerings of equity securities 
pursuant to a shelf registration statement.

                  4.6. No Defaults. Except as to defaults, violations and 
breaches which individually or in the aggregate would not be material to the 
Companies taken as a whole, neither Company is in violation or default of any 
provision of its certificate of incorporation or bylaws, or other 
organizational documents, and is not in breach of or default with respect to 
any provision of any agreement, judgment, decree, order, mortgage, deed of 
trust, lease, franchise, license, indenture, permit or other instrument to 
which it is a party or by which it or any of its properties are bound; and 
there does not exist any state of fact which constitutes an event of default 
on the part of the Company as defined in such documents or which, with notice 
or lapse of time or both, would constitute such an event of default except 
such defaults which individually or in the aggregate would not be material to 
the Companies.

                  4.7. Contracts. Neither Company, nor to the best of the 
knowledge of each Company, any other party is in breach of or default under 
any contracts to which the REIT is a party except such breach or default 
which individually or in the aggregate would not have a Material Adverse 
Effect.

                  4.8. No Actions. There are no legal or governmental 
actions, suits or proceedings pending or, to the best of the Companies' 
knowledge, threatened to which either Company is or may be a part or of which 
property owned or leased by either Company is or may be the subject, or 
related to environmental or discrimination matters, which actions, suits or 
proceedings might, individually or in the aggregate, prevent or adversely 
affect the transactions contemplated by this Agreement or result in a 
material adverse change in the condition (financial or otherwise), of the 
properties, business, results of operations or prospects of the Company, and 
no labor disturbance by the employees of the Companies exists or is imminent 
which might be expected to affect

                                       5
<PAGE>

adversely such condition, properties, business, results of operations or 
prospects. Except as may be described in the Companies' SEC Filings, neither 
Company is a party or subject to the provisions of any material injunction, 
judgment, decree or order of any court, regulatory body administrative agency 
or other governmental body.

                  4.9. Properties. Each Company has good and marketable title 
to all the properties and assets reflected as owned by such Company in the 
financial statements included in the Most Recent Financial Statements, 
subject to no lien, mortgage, pledge, charge or encumbrance of any kind 
except (i) those, if any, reflected in such financial statements or the 
Companies' SEC Filings, or (ii) those which are not material in amount and do 
not adversely affect the use made and promised to be made of such property by 
the Company. Each Company holds its leased properties under valid and binding 
leases, with such exceptions as are not materially significant in relation to 
the business of the Companies. Each Company owns or leases all such 
properties as are necessary to its operations as now conducted. The REIT is 
qualified as a real estate investment REIT under the Internal Revenue Code of 
1986, as amended, with respect to its taxable years ended December 31, 1995 
and December 31, 1996, and is organized in conformity with the requirements 
for qualification as a real estate investment trust, and its manner of 
operation has enabled it to meet the requirements for qualification as a real 
estate investment trust as of the date hereof, and its proposed manner of 
operation will enable it to meet the requirements for qualification as a real 
estate investment trust in the future.

                  4.10. No Material Change. Since the date of the Most Recent 
Financial Statements, and except as otherwise disclosed in the Companies' SEC 
Filings as of the Closing Date or in writing to the UBS Parties (i) neither 
Company has incurred any liabilities or obligations, indirect, or contingent, 
which will have a Material Adverse Effect or entered into any material verbal 
or written agreement or other material transaction which is not in the 
ordinary course of business (it being agreed that for purposes of this 
sentence the REIT's ordinary course of business shall include the acquisition 
or disposition, directly indirectly, of real estate properties or businesses 
of a type that may be owned by a "real estate investment trust" (as defined 
under the Internal Revenue Code) and the OPCO's ordinary course of business 
shall include the acquisition or disposition, directly or indirectly of 
assets or business related to or engaged in the lodging industry) or which 
could reasonably be expected to result in a material reduction in the future 
earnings of the Companies; (ii) neither Company has sustained any loss or 
interference with its businesses or properties (taken as a whole) from fire, 
flood, windstorm, accident or other calamity, whether or not covered by 
insurance, which has had a material adverse effect on such business or 
properties; (iii) neither Company is in default in the payment of principal 
or interest on any outstanding debt obligations; (iv) there has not been any 
change in the authorized capital of the Companies or material increase in the 
principal amount of outstanding indebtedness of the Companies (other than in 
the ordinary course of business); and (v) there has not been any material 
adverse change in the condition (financial or otherwise), business, 
properties, results of operations or prospects of the Companies.

                  4.11. Intellectual Property. Each Company believes it has 
sufficient trademarks, trade names, patent rights, copyrights, licenses, 
approvals and governmental authorizations to

                                       6
<PAGE>

conduct its businesses as now conducted; and neither Company has knowledge of 
any material infringement by it of trademark, trade name rights, patent 
rights, copyrights, licenses, trade secrets or other similar rights of 
others, and no claim has been made against either Company regarding 
trademark, trade name, patent, copyright, license, trade secrecy or other 
infringement which could have a Material Adverse Effect.

                  4.12. Compliance. Neither Company has been advised, nor has 
reason to believe, that it is conducting business in compliance with all 
applicable laws, rules and regulations of the jurisdictions in which it is 
conducting business, including, without limitation, all applicable local, 
state and federal environmental laws and regulations; except where failure to 
be so in compliance would not materially adversely affect the condition 
(financial or otherwise), business, results of operations or prospects of the 
Companies.

                  4.13. Taxes. Each Company has filed all necessary federal, 
state and foreign income and franchise tax returns and has paid or accrued 
all taxes shown as due thereon (except for those taxes which are being 
contested in good faith through appropriate proceedings, for which adequate 
reserves have been established and which are either reflected in the Most 
Recent Financial Statements or disclosed by the Companies to UBS in writing), 
and neither Company has knowledge of any tax deficiency which has been or 
might be asserted or threatened against the Company which could have a 
Material Adverse Effect.

                  4.14. Transfer Taxes. On the Closing Date, all stock 
transfer or other taxes (other than income taxes) which are required to be 
paid in connection with the sale and transfer of the Purchase Shares to be 
sold to UBS Limited hereunder will be, or will have been, fully paid or 
provided for by the Companies and all laws imposing such taxes will be or 
will have been fully complied with.

                  4.15. Investment Company. Neither of the Companies are 
required to register as an "investment company" as such term is defined in 
the Investment Company Act of 1940, as amended.

                  4.16. Insurance. Each Company maintains insurance (or 
insurance is maintained on its behalf) of the types and in the amounts 
generally deemed adequate under customary industry standards for its 
business, including, but not limited to, insurance covering all real and 
personal property owned or leased by such Company against theft, damage, 
destruction, acts of vandalism and all other risks customarily insured 
against, all of which insurance is in full force and effect.

                  4.17. SEC Filings. The information contained in the 
following documents, which the Companies have furnished to the UBS Parties, 
or will furnish prior to the Closing, is or will be true and correct in all 
material respects as of their respective filing dates:

                   (a)     Joint Annual Report on Form 10-K for the year ended
                           December 31, 1996, which Joint Annual Report includes
                           the REIT's and the OPCO's most



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                           recently available audited financial statements
                           together with the report thereon of the independent
                           certified public accountants (the "Most Recent
                           Financial Statements");

                   (b)     Joint Quarterly Report on Form 10-Q for the quarters
                           ended March 31, 1997, June 30, 1997 and September 30,
                           1997;

                   (c)     the Companies' proxy statements on Form 14A relating
                           to (i) the most recent Annual Meetings of the OPCO's
                           and the REIT's Stockholders and (ii) any Special
                           Meetings of the OPCO's Stockholders and the REIT's
                           Stockholders which occurred during the 12-month
                           period prior to the date hereof or for which a
                           meeting date has been fixed and a proxy statement
                           distributed;

                   (d)     all other documents, if any, filed by or with respect
                           to the REIT and the OPCO with the SEC since January
                           1, 1997 pursuant to Sections 13, 15(d) or 16(a) of
                           the Exchange Act; and

                   (e)     a covenant compliance certification stating that none
                           of the REIT and the OPCO and their respective
                           subsidiaries are in default under any of its credit
                           agreements or other financing arrangements.

                  4.18. Legal Opinion. Prior to the Closing, counsel to the 
Companies will deliver their legal opinions to the UBS Parties in 
substantially the forms of Exhibits A-1 and A-2 hereto.

                  4.19. ERISA. The Companies and their affiliates are in
compliance in all material respects with all applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended and the rules and
regulations promulgated thereunder ("ERISA"). Neither a Reportable Event (as
defined under ERISA) nor a Prohibited Transaction (as defined under ERISA) has
occurred with respect to any Plan (as defined below) of the Companies and/or
their affiliates; no notice of intent to terminate a Plan has been filed nor has
any Plan been terminated within the past five years; no circumstance exists
which constitutes grounds under Section 402 of ERISA entitling the Pension
Benefit Guaranty Corporation ("PBGC") to institute proceedings to terminate, or
appoint a trustee to administer, a Plan, nor has the PBGC instituted any such
proceedings; the Companies and their affiliates have not completely or partially
withdrawn under Sections 4201 or 4202 of ERISA from any Multiemployer Plan (as
defined therein); the Companies and their affiliates have met the minimum
funding requirements of Section 412 of the Internal Revenue Code of 1986, as
amended (the "Code") and Section 302 of ERISA with respect to each Plan and
there is no unfunded current liability (as defined below) with respect to any
Plan; the Companies and their affiliates have not incurred any liability to the
PBGC under ERISA (other than for the payment of premiums under Section 4007 of
ERISA); no part of the funds to be used by the Companies in satisfaction of
their obligations under this Purchase Agreement or the Forward Stock Purchase
Agreement constitute "plan assets" of any "employee benefit plan" within the
meaning of ERISA or of any "plan" within the meaning of Section



                                       8
<PAGE>

4975(e)(1) of the Code, as interpreted by the Internal Revenue Service and 
the U.S. Department of Labor in rules, regulations, releases and bulletins or 
as interpreted under applicable case law. As used below, "Plan" means an 
"employee benefit plan" or "plan" as described in Section 3(3) of ERISA; and 
"unfunded current liability" has the meaning provided in Section 302(d)(8)(A) 
of ERISA.

                  4.20. Certificate. A certificate of each Company executed 
by the chief executive, financial or accounting officer of such Company, to 
be dated the Closing Date in form and substance satisfactory to the UBS 
Parties to the effect that the representations and warranties of the 
Companies set forth in this Section 4 are true and correct as of the date of 
this Agreement and as of the Closing Date, and such Company has complied with 
all the agreements and satisfied all the conditions on its part to be 
performed or satisfied on or prior to such Closing Date.

                  4.21. Environmental Protection. To the knowledge of the 
Companies, except as disclosed in the Companies' SEC Filings, none of the 
Companies or their affiliates' properties contain any Hazardous Materials 
that, under any Environmental Law, (i) would impose liability on the 
Companies or any affiliate that is likely to have a material adverse effect 
on the condition (financial or other), business, results of operations, or 
prospects, of the Companies or (ii) is likely to result in the imposition of 
a lien on any material asset owned, directly or indirectly, by the Companies. 
To the knowledge of the Companies, neither of the Companies nor any of their 
affiliates is subject to any existing, pending or threatened investigation or 
proceeding by any governmental agency or authority with respect or pursuant 
to any Environmental Law, except any which, if adversely determined, would 
not have a Material Adverse Effect. As used herein, "Environmental Laws" mean 
all federal, state, local and foreign environmental, health and safety laws, 
codes and ordinances and all rules and regulations promulgated thereunder, 
including, without limitation laws relating to emissions, discharges, 
releases or threatened releases of pollutants, contaminants, chemicals, or 
industrial, toxic or hazardous substances or wastes into the environment 
(including, without limitation, air, surface water, ground water, land 
surface or subsurface strata) or otherwise relating to the manufacture, 
processing, distribution, use, treatment, storage, disposal, transport or 
handling of pollutants, contaminants, chemicals, or industrial, solid, toxic 
or hazardous substances or wastes; and "Hazardous Material" includes, without 
limitation, (i) all substances which are designated pursuant to Section 
311(b)(2)(A) of the Federal Water Pollution Control Act ("FWPCA"), 33 U.S.C 
Section 1251 et seq.; (ii) any element, compound, mixture, solution, or 
substance which is designated pursuant to Section 102 of the Comprehensive 
Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. 
Section 9601 et seq.; (iii) any hazardous waste having the characteristics 
which are identified under or listed pursuant to Section 3001 of the Resource 
Conservation and Recovery Act ("RCRA"), 42 U.S.C. Section 6901 et seq.; (iv) 
any toxic pollutant listed under Section 307(a) of the FWPCA; (v) any 
hazardous air pollutant which is listed under Section 112 of the Clean Air 
Act, 42 U.S.C. Section 7401 et seq.; (vi) any imminently hazardous chemical 
substance or mixture with respect to which action has been taken pursuant to 
Section 7 of the Toxic Substances Control Act, 15 U.S.C. Section 2601 et 
seq.; and (vii) petroleum, petroleum products, petroleum by-products, 
petroleum decomposition by-products, and waste oil.

                                       9
<PAGE>

                  SECTION 5.  Representations, Warranties and Covenants of 
the  UBS Parties.

                  5.1. Investment. UBS Limited and/or UBS-LB represents and 
warrants to, and covenants with, the Companies that: (i) UBS Limited, taking 
into account the personnel and resources it can practically bring to bear on 
the purchase of the Purchase Shares contemplated hereby, is knowledgeable, 
sophisticated and experienced in making, and is qualified to make, decisions 
with respect to investments in shares presenting an investment decision like 
that involved in the purchase of the Purchase Shares, including investments 
in securities issued by the Companies, and has requested, received, reviewed 
and considered all information it deems relevant in making an informed 
decision to purchase the Purchase Shares; (ii) UBS Limited is acquiring the 
number of Purchase Shares set forth in Section 2 above in the ordinary course 
of its business and for its own account for investment (as defined for 
purposes of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the 
regulations thereunder) only and with no present intention of distributing 
any of such Purchase Shares or any arrangement or understanding with any 
other persons regarding the distribution of such Shares (this representation 
and warranty not limiting the rights of either UBS Party to sell pursuant to 
any Registration Statement); (iii) neither UBS Party will, directly or 
indirectly, sell or otherwise dispose of (or solicit any offers to purchase 
or otherwise acquire) any of the Purchase Shares except in compliance with 
the Securities Act, the Rules and Regulations and any applicable state 
securities or blue sky laws or pursuant to an available exemption or 
exclusion therefrom; (iv) each UBS Party has completed or caused to be 
completed the Registration Statement Questionnaire and the Stock Certificate 
Questionnaire, both attached hereto as Appendix I, for use in preparation of 
the Registration Statement and the answers thereto are true and correct to 
the best knowledge of the UBS Parties as of the date hereof and will be true 
and correct as of the effective date of the Registration Statement; (v) the 
UBS Parties have, in connection with their decision to purchase the number of 
Purchase Shares set forth in Section 2 above, relied solely upon the 
documents identified in Section 4.17, the information referred to in Section 
7.7 and the representations and warranties of the Company contained herein; 
(vi) each of the UBS Parties is an "accredited investor" within the meaning 
of Rule 501 of Regulation D promulgated under the Securities Act and a 
"qualified institutional buyer" within the meaning of Rule 144A promulgated 
under the Securities Act; (vii) the UBS Parties do not directly or indirectly 
have an interest of five percent or more of the Paired Shares outstanding as 
shown in the Companies' Quarterly Reports on Form 10-Q for the quarter ended 
September 30, 1997 and (viii) the Purchaser understands that the Shares will 
contain a legend to the following effect:

                  THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
                  REGISTERED UNDER THE SECURITIES ACT OF 1933. THE SHARES HAVE
                  BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED
                  OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
                  STATEMENT FOR THESE SHARES UNDER THE SECURITIES ACT OF 1933 OR
                  AN OPINION OF THE COMPANY'S COUNSEL THAT REGISTRATION IS NOT
                  REQUIRED UNDER SAID ACT.



                                       10
<PAGE>

                  5.2. Resale. Each UBS Party acknowledges and agrees that 
the Shares are not transferable on the books of either the REIT or the OPCO 
unless the certificate submitted to the transfer agent evidencing the Shares 
is accompanied by a separate officer's certificate: (i) in the form of 
Appendix II hereto, (ii) executed by an officer of, or other authorized 
person designated by, the UBS Parties, and (iii) to the effect that (A) the 
Shares have been sold in accordance with the Registration Statement, the 
Securities Act and the Rules and Regulations and any applicable state 
securities or blue sky laws or pursuant to valid exemptions or exclusions 
therefrom and (B) the requirement under the Securities Act of delivering a 
current prospectus has been satisfied. Each UBS Party acknowledges that there 
may occasionally be times when the Companies must suspend the right of the 
UBS Parties to effect sales of the Shares through use of the Prospectus 
forming a part of the Registration Statement until such time as an amendment 
to the Registration Statement has been filed by the Companies and declared 
effective by the SEC, or until such time as the Companies have filed an 
appropriate report with the SEC pursuant to the Exchange Act (each, a 
"Black-out Period"); provided that no Black-out Period shall exceed 90 
consecutive days. Each UBS Party hereby covenants that it will not sell any 
Shares pursuant to said Prospectus during the period commencing at the time 
at which the Companies give the UBS Parties written notice of the suspension 
of the use of said Prospectus and ending at the time the Companies give the 
UBS Parties written notice that the UBS Parties may thereafter effect sales 
pursuant to said Prospectus. Each UBS Party further covenants to notify the 
REIT and the OPCO promptly of the sale of all of its Shares.

                  5.3. Due Execution, Delivery and Performance of this 
Agreement. The UBS Parties further represent and warrant to, and covenant 
with, the Companies that (i) each UBS Party has full right, power, authority 
and capacity to enter into this Agreement and to consummate the transactions 
contemplated hereby and has taken all necessary action to authorize the 
execution, delivery and performance of this Agreement, and (ii) upon the 
execution and delivery of this Agreement, this Agreement shall constitute a 
valid and binding obligation of the UBS Parties enforceable in accordance 
with its terms, except as enforceability may be limited by applicable 
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting 
creditors' and contracting parties' rights generally and except as 
enforceability may be subject to general principles of equity (regardless of 
whether such enforceability is considered in a proceeding in equity or at 
law) and except as the indemnification agreements of the UBS Parties in 
Section 7.5 hereof may be legally unenforceable.

                  5.4. Residence of UBS Limited. UBS Limited is organized 
under the laws of England and has its principal place of business in London.

                  5.5. Beneficial Ownership of Company Common Stock. The UBS 
Parties further represent and warrant to, and covenant with, the Companies 
that (i) as of the date of this Agreement and immediately prior to the 
purchase and sale of the Purchase Shares, UBS Limited is not a beneficial 
owner, as such term is defined by Rule 13d-3 under the Exchange act of more 
than five (5) percent of the total number of outstanding shares of any 
Company, and (ii) no

                                       11
<PAGE>

officer, director or affiliate of UBS Limited is an officer, director or 
affiliate of any Company. The term "affiliate" has the meaning set forth in 
Rule 405 under the Securities Act.

                  SECTION 6. Survival of Representations, Warranties and 
Agreements. Notwithstanding any investigation made by any party to this 
Purchase Agreement, all covenants, agreements, representations and warranties 
made by the Companies and the UBS Parties herein and in the certificates for 
the Shares delivered pursuant hereto shall survive the execution of this 
Purchase Agreement, the Forward Stock Purchase Agreement, the delivery to UBS 
Limited of the Purchase Shares being purchased and the payment therefor.

                  SECTION 7.  Registration of the Shares; Compliance with the 
 Securities Act.

                   7.1.  Registration Procedures and Expenses.  The Companies 
shall:

                  (a)      within 60 days after receipt of a demand from the UBS
                           Parties, which demand may not be made within 30 days
                           after the Closing, prepare and file with the SEC
                           Registration Statements (as defined below) covering
                           the resale by the UBS Parties, from time to time, of
                           the Shares (not to exceed a number of Shares equal to
                           130% of the number of Purchase Shares) through the
                           facilities of the New York Stock Exchange, the
                           automated quotation system of The Nasdaq Stock Market
                           or the facilities of any other national securities
                           exchange on which the Paired Share is then traded or
                           in privately negotiated transactions (the "Initial
                           Registration Statements"). If the total number of
                           Shares issued to the UBS Parties hereunder and under
                           the Forward Stock Purchase Agreement exceeds the
                           number of Shares covered by the Initial Registration
                           Statements, then the Companies shall prepare and file
                           with the SEC such additional Registration Statements
                           as shall be necessary to cover the resale by UBS-LB
                           of such excess Shares in the same manner as
                           contemplated by the Initial Registration Statements
                           for the Shares covered thereby ("Additional
                           Registration Statements"); provided that prior to
                           delivering certificates evidencing any such excess
                           Shares to UBS-LB, the Companies shall cause such
                           Registration Statements to have become effective. For
                           purposes of this Purchase Agreement, "Registration
                           Statement" means a registration statement under the
                           Securities Act on Form S-3 covering the resale by one
                           or both UBS Parties of up to a specified number of
                           Shares, filed and maintained effective by the
                           Companies pursuant to the provisions of this Section
                           7, including the Prospectus (as defined below)
                           contained therein, any amendments and supplements to
                           such registration statement, including all
                           post-effective amendments thereto, and all exhibits
                           and all material incorporated by reference into such
                           registration statement;

                   (b)     use all reasonable best efforts to cause the SEC to
                           notify the Companies of the SEC's willingness to
                           declare the Initial Registration Statements



                                       12
<PAGE>

                           effective within 60 days after the Registration
                           Statements are filed by the Companies; provided that
                           the Companies will use their reasonable best efforts
                           to cause such Initial Registration Statements to
                           become effective no later than 90 days after the
                           Closing Date;

                   (c)     prepare and file with the SEC such amendments and
                           supplements to the Registration Statements and the
                           prospectus used in connection therewith (the
                           "Prospectus") as may be necessary to keep the
                           Registration Statements effective until the date on
                           which the Shares may be resold by the UBS Parties
                           without registration, by reason of Rule 144(k) under
                           the Securities Act or any other rule of similar
                           effect;

                  (d)      furnish to the UBS Parties with respect to the Shares
                           registered under the Registration Statements (and to
                           each underwriter, if any, of such Shares) such
                           reasonable number of copies of Prospectuses,
                           including any supplements and amendments thereto,
                           promptly following the effectiveness of such
                           Registration Statements an opinion from counsel to
                           the Companies covering the matters set forth on
                           Exhibit B hereto and such other documents as the UBS
                           Parties may reasonably request, in order to
                           facilitate the public sale or other disposition of
                           all or any of the Shares by the UBS Parties;

                   (e)     use their reasonable best efforts to prevent the
                           happening of any event that would cause such
                           Registration Statements to contain a material
                           misstatement or omission or to be not effective and
                           usable for resale of the Shares during the period
                           that such Registration Statements are required to be
                           effective and usable; provided that this paragraph
                           (e) shall in no way limit the Companies' right to
                           suspend the right of the UBS Parties to effect sales
                           under the Registration Statement during any Black-out
                           Period as specified at Section 5.2 above.

                   (f)     file documents required of the Companies for normal
                           blue sky clearance in states specified in writing by
                           the UBS Parties, provided, however, that the
                           Companies shall not be required to qualify to do
                           business or consent to service of process in any
                           jurisdiction in which it is not now so qualified or
                           has not so consented; and

                   (g)     bear all reasonable out-of-pocket expenses in
                           connection with the procedures in paragraphs (a)
                           through (f) of this Section 7.1 and the registration
                           of the Shares pursuant to the Registration
                           Statements, including the reasonable fees and
                           reasonable expenses of counsel or other advisers to
                           the UBS Parties, other than underwriting discounts,
                           brokerage fees and commissions incurred by the UBS
                           Parties, if any.



                                       13
<PAGE>

                  7.2.  Covenants in Connection With Registration.

                  (a) The Companies hereby covenant with the UBS Parties that 
(i) the Companies shall not file any Registration Statement or Prospectus 
relating to the resale of the Shares or any amendment or supplement thereto, 
unless a copy thereof shall have been first submitted to the UBS Parties and 
the UBS Parties did not object thereto in good faith (provided that if the 
UBS Parties do not object within two business days of receiving any such 
material, they shall be deemed to have no objection thereto); (ii) the 
Companies shall immediately notify the UBS Parties of the issuance by the SEC 
of any stop order suspending the effectiveness of such Registration Statement 
or the initiation of any proceedings for such purpose; (iii) the Companies 
shall make every reasonable effort to obtain the withdrawal of any order 
suspending the effectiveness of such Registration Statement at the earliest 
possible moment; (iv) the Companies shall notify the UBS Parties of the 
receipt of any notification with respect to the suspension of the 
qualification of the Shares for sale under the securities or blue sky laws of 
any jurisdiction or the initiation of any proceeding for such purpose; and 
(v) the Companies shall as soon as practicable notify the UBS Parties in 
writing of the existence of any fact which results in any Registration 
Statement, any amendment or post-effective amendment thereto, the Prospectus, 
any prospectus supplement, or any document incorporated therein by reference 
containing an untrue statement of a material fact or omitting to state a 
material fact required to be stated therein or necessary to make the 
statements therein not misleading and shall (except during a Black-out 
Period) prepare a supplement or post-effective amendment to such Registration 
Statement or the Prospectus or any document incorporated therein by reference 
or file any other required document so that, as thereafter delivered to the 
purchasers of the Shares, the Prospectus will not contain an untrue statement 
of a material fact or omit to state any material fact necessary to make the 
statements therein not misleading; provided that this clause (v) shall in no 
way limit the Companies' right to suspend the right of the UBS Parties to 
effect sales under the Registration Statement during any Black-out Period as 
specified at Section 5.2 above.

                  (b) The UBS Parties shall notify the Companies at least two 
business days prior to the date on which it intends to commence effecting any 
resales of Shares under Registration Statements and if the Companies do not, 
within such two-day period, advise the UBS Parties of the existence of any 
facts of the type referred to in Section 7.2(a)(v) above, then the Companies 
shall be deemed to have certified and represented to the UBS Parties that no 
such facts then exist and the UBS Parties may rely on such certificate and 
representation in making such sales. The preceding sentence shall in no way 
limit the Companies obligations under Section 7.2(a) above.

                  7.3. Extension of Required Effectiveness. In the event that 
the Companies shall give any notice required by Section 7.2(a)(v) hereof, the 
period during which the Companies are required to keep such Registration 
Statements effective and useable shall be extended by the number of days 
during the period from and including the date of the giving of such notice to 
and including the date when the UBS Parties are advised in writing by the 
Companies that the use of the Prospectuses may be resumed.

                                       14
<PAGE>

                  7.4. Transfer of Shares After Registration. Each UBS Party 
agrees that it will not effect any disposition of the Shares or its right to 
purchase the Shares that would constitute a sale within the meaning of the 
Securities Act or pursuant to any applicable state securities or blue sky 
laws except as contemplated in Registration Statements referred to in Section 
7.1 or except pursuant to any exemption from the registration requirements of 
the Securities Act (including, without limitation, Rule 144 promulgated 
thereunder and any successor thereto) and that it will promptly notify the 
Company of any changes in the information set forth in any such Registration 
Statements regarding the UBS Parties or its Plan of Distribution.

                  7.5. Indemnification. For the purpose of this Section 7.5, 
the term "Registration Statement" shall include any final prospectus, 
exhibit, supplement or amendment included in or relating to any Registration 
Statement referred to in Section 7.1.

                  (a) Indemnification by Companies. For purposes of this 
Section 7.5, the Companies agree to indemnify and hold harmless the UBS 
Parties and as more particularly described herein. The Companies agree to 
indemnify and hold harmless the UBS Parties and each person, if any, who 
controls either UBS Party within the meaning of the Securities Act, against 
any losses, claims, damages, liabilities or expenses, joint or several, to 
which the UBS Parties or such controlling person may become subject 
(including in settlement of any litigation, if such settlement is effected 
with the written consent of the Companies), insofar as such losses, claims, 
damages, liabilities or expenses (or actions in respect thereof as 
contemplated below) arise out of or are based upon any untrue statement or 
alleged untrue statement of any material fact contained in any Registration 
Statement, including the Prospectus, financial statements and schedules, and 
all other documents filed as a part thereof, as amended at the time of 
effectiveness of such Registration Statement, including any information 
deemed to be a part thereof as of the time of effectiveness pursuant to 
paragraph (b) of Rule 430A, or pursuant to Rule 434, of the Rules and 
Regulations, or the Prospectus, in the form first filed with the SEC pursuant 
to Rule 424(b) of the Regulations, or filed as part of such Registration 
Statement at the time of effectiveness if no Rule 424(b) filing is required, 
or any amendment or supplement thereto, or arise out of or are based upon the 
omission or alleged omission to state in any of them a material fact required 
to be stated therein or necessary to make the statements in any of them not 
misleading, and will reimburse each UBS Party and each such controlling 
person for any legal and other expenses as such expenses are reasonably 
incurred by the UBS Parties or such controlling person in connection with 
investigating, defending, settling, compromising or paying any such loss, 
claim, damage, liability, expense or action. The Companies will also 
indemnify selling brokers, dealers and similar securities industry 
professionals participating in the sale or resale of the Shares, their 
officers, directors and partners and each person who controls any such person 
within the meaning of the Securities Act, provided, however, that the 
Companies will not be liable in any such case to the extent that any such 
loss, claim, damage, liability or expense arises out of or is based upon an 
untrue statement or alleged untrue statement or omission or alleged omission 
made in such Registration Statement, such Prospectus or any amendment or 
supplement thereto in reliance upon and in conformity with written 
information furnished to the Companies (i) by or on behalf of the UBS Parties 
expressly for use therein or (ii) any statement or omission in any Prospectus 
that is corrected in any subsequent Prospectus that was delivered

                                       15
<PAGE>

to a UBS Party prior to the pertinent sale or sales by such UBS Party and not 
delivered by such UBS Party in connection with such sale or sales.

                  (b) Indemnification by UBS Parties. The UBS Parties will 
indemnify and hold harmless the Companies, each of their directors, each of 
their officers who signed any Registration Statement and each person, if any, 
who controls the Companies within the meaning of the Securities Act, against 
any losses, claims, damages, liabilities or expenses, joint and several, to 
which the Companies, each of their directors, each of their officers who 
signed any Registration Statement or any controlling person may become 
subject (including in settlement of any litigation, if such settlement is 
effected with the written consent of the UBS Parties) insofar as such losses, 
claims, damages, liabilities or expenses (or actions in respect thereof as 
contemplated below) arise out of or are based upon any untrue or alleged 
untrue statement of any material fact contained in such Registration 
Statement, such Prospectus, or any amendment or supplement thereto, or arise 
out of or are based upon the omission or alleged omission to state therein a 
material fact required to be stated therein or necessary to make the 
statements therein not misleading, in each case to the extent, but only to 
the extent, that such untrue statement or alleged untrue statement or 
omission or alleged omission was made in such Registration Statement, such 
Prospectus, or any amendment or supplement thereto, in reliance upon and in 
conformity with written information furnished to the Companies by or on 
behalf of the UBS Parties expressly for use therein, and will reimburse the 
Companies, each of their directors, each of their officers who signed such 
Registration Statement and each controlling person for any legal and other 
expense reasonably incurred by the Companies, each of their directors, each 
of their officers who signed such Registration Statement or controlling 
person in connection with investigating, defending, settling, compromising or 
paying any such loss, claim, damage, liability, expense or action.

                  (c) Proceedings. Promptly after receipt by an indemnified 
party under this Section 7.5 of notice of the commencement of any action, 
such indemnified party will, if a claim in respect thereof is to be made 
against an indemnifying party under this Section 7.5 notify the indemnifying 
party in writing of the commencement thereof; but the omission so to notify 
the indemnifying party will not relieve it from any liability which it may 
have to any indemnified party for contribution or otherwise than under the 
indemnity agreement contained in this Section 7.5 or to the extent it is not 
prejudiced as a proximate result of such failure. In case any such action is 
brought against any indemnified party and such indemnified party seeks or 
intends to seek indemnity from an indemnifying party, the indemnifying party 
will be entitled to participate in, and, to the extent that it may wish, 
jointly with all other indemnifying parties similarly notified, to assume and 
control the defense thereof with counsel reasonably satisfactory to such 
indemnified party; provided, however, if the defendants in any such action 
include both the indemnified party and the indemnifying party and the 
indemnified party shall have reasonably concluded that there may be a 
conflict between the positions of the indemnifying party and the indemnified 
party in conducting the defense of any such action or that there may be legal 
defenses available to it and/or other indemnified parties which are different 
from or additional to those available to the indemnifying party, the 
indemnified party or parties shall have the right to select separate counsel 
to assume such legal defenses and to otherwise participate in the defense

                                       16
<PAGE>

of such action on behalf of such indemnified party or parties. Upon receipt 
of notice from the indemnifying party to such indemnified party of its 
election so to assume the defense of such action and approval by the 
indemnified party of counsel, the indemnifying party will not be liable to 
such indemnified party under this Section 7.5 for any reasonable legal or 
other expenses subsequently incurred by such indemnified party in connection 
with the defense thereof unless (i) the indemnified party shall have employed 
such counsel in connection with the assumption of legal defenses in 
accordance with the proviso to the preceding sentence (it being understood, 
however, that the indemnifying party shall be not liable for the expenses of 
more than one separate counsel, approved by such indemnifying party in the 
case of paragraph (a), representing the indemnified parties who are parties 
to such action) or (ii) the indemnifying party shall not have employed 
counsel reasonably satisfactory to the indemnified party to represent the 
indemnified party within a reasonable time after notice of commencement of 
action, in each of which cases the fees and expenses of counsel shall be at 
the expense of the indemnifying party. Notwithstanding the foregoing, without 
the written consent of the indemnified party, the indemnifying party may not 
settle or agree to compromise of any such claim or action for which the 
indemnified party intends to seek reimbursement from the indemnifying party, 
and the indemnified party will permit the indemnifying party to settle or 
compromise any such action or suit at the indemnifying party's sole cost and 
expense if as a result thereof the indemnified party is provided a full and 
unconditional release of such claim or action.

                  (d) Contribution. If the indemnification provided for in 
this Section 7.5 is required by its terms but is for any reason held to be 
unavailable to or otherwise insufficient to hold harmless an indemnified 
party under paragraphs (a), (b) or (c) of this Section 7.5 in respect of any 
losses, claims, damages, liabilities or expenses referred to herein, then 
each applicable indemnifying party shall contribute to the amount paid or 
payable by such indemnified party as a result of any losses, claims, damages, 
liabilities or expenses referred to herein in such proportion as is 
appropriate to reflect the relative benefits received by the Companies and 
the UBS Parties from the purchase and sale of the Shares and the relative 
fault of the Companies and the UBS Parties in connection with the statements 
or omissions or inaccuracies in the representations and warranties in this 
Agreement which resulted in such losses, claims, damages, liabilities or 
expenses, as well as any other relevant equitable considerations. The 
respective relative benefits received by the Companies on the one hand and 
the UBS Parties on the other shall be deemed to be in the same proportion as 
the amount paid by the UBS Parties to the Companies pursuant to this 
Agreement for the Shares purchased by the UBS Parties that were sold pursuant 
to any Registration Statement bears to the difference (the "Difference") 
between the amount the UBS Parties paid for the Shares that were sold 
pursuant to such Registration Statement and the amount received by the UBS 
Parties from such sale. The relative fault of the Companies and the UBS 
Parties shall be determined by reference to, among other things, whether the 
untrue or alleged untrue statement of a material fact or the omission or 
alleged omission to state a material fact or the inaccurate or the alleged 
inaccurate representation and/or warranty relates to information supplied by 
the Companies or by the UBS Parties and the parties' relative intent, 
knowledge, access to information and opportunity to correct or prevent such 
statement or omission. The amount paid or payable by a party as a result of 
the losses, claims, damages, liabilities and expenses referred to above shall 
be deemed to include, subject to the limitations set forth in

                                       17
<PAGE>

paragraph (c) of this Section 7.5 any reasonable legal or other fees or 
expenses incurred by such party in connection with investigating or defending 
any action or claim. The provisions set forth in paragraph (c) of this 
Section 7.5 with respect to notice of commencement of any action shall apply 
if a claim for contribution is to be made under this paragraph (d); provided, 
however, that no additional notice shall be required with respect to any 
action for which notice has been given under paragraph (c) for purposes of 
indemnification. The Companies and the UBS Parties agree that it would not be 
just and equitable if contribution pursuant to this Section 7.5 were 
determined solely by pro rata allocation or by any other method of allocation 
which does not take account of the equitable considerations referred to in 
this paragraph. Notwithstanding the provisions of this Section 7.5, the UBS 
Parties shall not be required to contribute any amount in excess of the 
amount by which the aggregate proceeds received by the UBS Parties from the 
transactions contemplated hereby exceeds the amount of any damages that the 
UBS Parties has otherwise been required to pay by reason of such untrue or 
alleged untrue statement or omission or alleged omission. No person guilty of 
fraudulent misrepresentation (within the meaning of Section 11(f) of the 
Securities Act) shall be entitled to contribution from any person who was not 
guilty of such fraudulent misrepresentation.

                  (e) Relationship Between the REIT and the OPCO. The 
obligations set forth in this Section 8.5 shall in no way limit the ability 
of the parties to allocate liability between themselves.

                  7.6. Termination of Conditions and Obligations. The 
conditions precedent imposed by Section 6 or this Section 7 upon the 
transferability of the Shares shall cease and terminate as to any particular 
number of the Shares when such Shares may be, and in fact are, sold under 
Rule 144(k) promulgated under the Securities Act. Further, as to any 
particular number of Shares, the conditions precedent imposed by Section 5 or 
this Section 7 on the transferability of such Shares shall cease and 
terminate at such earlier time as an opinion of counsel satisfactory to the 
Companies and the UBS Parties shall have been rendered to the effect that 
such conditions are not necessary in order to comply with the Securities Act 
with respect to such Shares. In each such case, the Companies' obligation to 
maintain effective Registration Statements with respect to such Shares which 
are no longer be subject to the restrictions and limitations of Section 5 and 
this Section 7 shall cease.

                  7.7. Information Available. So long as any Registration 
Statement covering the resale of any Shares owned by either UBS Party is 
effective, the Companies will furnish to the UBS Parties:

                   (a)     as soon as practicable after available, one copy of
                           (i) its Joint Annual Report to Stockholders, (ii) its
                           Joint Annual Report on Form 10-K, (iii) its joint
                           Quarterly Reports to Stockholders, (iv) its joint
                           quarterly reports on Form 10-Q, (v) a full copy of
                           the particular Registration Statements covering the
                           Shares (the foregoing, in each case, excluding
                           exhibits) and (vi) upon request, any or all other
                           public filings under the Exchange Act by the
                           Companies; and



                                       18
<PAGE>

                   (b)     upon the reasonable request of either UBS Party, a
                           reasonable number of copies of the Prospectuses to
                           supply to any other party requiring such
                           Prospectuses;

and the Companies, upon the reasonable request of the UBS Parties, will meet 
with the UBS Parties or a representative thereof at the Companies 
headquarters to discuss all information relevant for disclosure in such 
Registration Statements covering the Shares, subject to appropriate 
confidentiality limitations.

                  7.8. Non-Exclusivity. The rights and remedies provided 
under Section 8.5 hereof shall not be in limitation or exclusion of any other 
rights or remedies available to a party, whether by agreement, at law, in 
equity or otherwise, with respect to the inaccuracy of any representation or 
warranty by, or the breach of any covenant of, the other party made herein or 
in the Forward Stock Purchase Agreement.

                  7.9. Notice Requirement. The REIT and the OPCO each 
covenants and agrees that it will notify the UBS Parties at any time it 
becomes aware that as a result of a change in the REIT's and the OPCO's 
capital stock the UBS Parties beneficially hold more than 4.9% of the REIT's 
and the OPCO's Paired Shares.

                  7.10. Transfer of Shares. The Companies covenant and agree 
to use their best efforts to cause the transfer agent to effect promptly any 
transfer of the Shares requested by the UBS Parties and to cause the transfer 
agent to remove promptly the restrictive legend from the Shares upon 
presentation to the transfer agent of all necessary documentation.

                  SECTION 8. Registration Exemptions. For so long as the REIT 
and the OPCO are subject to the reporting requirements of Section 13 or 15 of 
the Exchange Act, the REIT and the OPCO covenant that they will file the 
reports required to be filed by them under the Securities Act and Section 
13(a) and 15(d) of the Exchange Act and the rules and regulations adopted by 
the Commission thereunder.

                  SECTION 9. Broker's Fee. Other than any fees payable under 
or in connection with the Forward Stock Purchase Agreement, each of the 
parties hereto hereby represents that, on the basis of any actions and 
agreements by it, there are no brokers or finders entitled to compensation in 
connection with the sale or issuance of the Shares to the UBS Parties.

                  SECTION 10. Notices. All notices, requests, consents and 
other communications hereunder shall be in writing, shall be mailed by 
first-class registered or certified airmail, by telegram or telecopy or sent 
by nationally recognized overnight express courier postage prepaid, and shall 
be deemed given when so mailed or for telecopies, when transmitted and 
receipt confirmed, and shall be delivered as addressed as follows:

                   (a)      if to the Companies, to:



                                       19
<PAGE>

                           Patriot American Hospitality, Inc.
                           Patriot American Hospitality Operating Company
                           1950 Stemmons Freeway, Suite 6001
                           Dallas, Texas 75207
                           Attn:  John P. Bohlman
                           Telecopier:  214-863-1527

                           with a copy so mailed to:

                           Goodwin, Procter & Hoar LLP
                           Exchange Place
                           Boston, Massachusetts 02109-2881
                           Attn:  Gilbert G. Menna, P.C.
                           Telecopier:  617-523-1231

                           or to such other person at such other place as the
                           Companies shall designate to the UBS Parties in
                           writing; and

                   (b)     if to the UBS Parties, c/o UBS Securities, LLC, 299
                           Park Avenue, New York, New York 10171, Telecopier:
                           212-223-2815 or at such other address or addresses as
                           may have been furnished to the Companies in writing.

                  SECTION 11. Changes. This Agreement may not be modified or
amended except pursuant to an instrument in writing signed by the Companies and
the UBS Parties.

                  SECTION 12. Headings. The headings of the various sections of
this Agreement have been inserted for convenience of reference only and shall
not be deemed to be part of this Agreement.

                  SECTION 13. Severability. In case any provision contained in
this Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.

                  SECTION 14.  Governing Law; Jurisdiction.

                  14.1. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York (without regard to the
conflicts of law principles thereof) and of the federal law of the United States
of America.

                  14.2. Each of the Companies (i) hereby irrevocably submits to
the jurisdiction of, and agrees that any suit shall be brought in, the state and
federal courts



                                       20
<PAGE>

located in the City and County of New York for the purpose of any suit, 
action or other proceeding arising out of or based upon this Agreement or the 
transactions contemplated hereby and (ii) hereby waives to the extent not 
prohibited by applicable law, and agrees not to assert, by way of motion, as 
a defense or otherwise, in any such proceeding, any claim that it is not 
subject personally to the jurisdiction of the above-named courts, that its 
property is exempt or immune from attachment or execution, that any such 
proceeding brought in one of the above-named courts is brought in an 
inconvenient forum, that the venue of any such proceeding brought in one of 
the above-named courts is improper, or that this Agreement, or the 
transactions contemplated hereby may not be enforced in or by such court.

                  SECTION 15. Transfer to Affiliate. Notwithstanding anything 
herein to the contrary, UBS Limited may transfer the Purchase Shares to any 
affiliate of UBS Limited, together with all of UBS Limited's rights 
hereunder; provided that (i) such affiliate shall assume and be subject to 
all of UBS Limited's obligations hereunder; (ii) such affiliate shall be an 
"accredited investor" within the meaning of Rule 501 of Regulation D 
promulgated under the Securities Act; and (iii) such transfer shall be 
consistent with the investment representations set forth at Section 6.1 
hereto. In the event of such an assignment, such affiliate shall in all 
respects be substituted for UBS Limited as a party hereto.

                  SECTION 16. Counterparts. This Agreement may be executed in 
two or more counterparts, each of which shall constitute an original, but all 
of which, when taken together, shall constitute but one instrument, and shall 
become effective when one or more counterparts have been signed by each party 
hereto and delivered to the other parties.

                  SECTION 17. Waiver of Trial by Jury. EACH PARTY HEREBY 
IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO JURY TRIAL IN CONNECTION WITH ANY 
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.

                                       21
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this 
Agreement to be executed by their duly authorized representatives as of the 
day and year first above written.

                                  Patriot American Hospitality, Inc.


                                  By:________________________________
                                       Name:
                                       Title:


                                  Patriot American Hospitality Operating Company


                                  By:________________________________
                                       Name:
                                       Title:


                                  UBS Limited


                                  By:________________________________
                                       Name:
                                       Title:


                                  By:________________________________
                                       Name:
                                       Title:

                                  Union Bank of Switzerland
                                  London Branch


                                  By:________________________________
                                       Name:
                                       Title:


                                  By:________________________________
                                       Name:
                                       Title:




                                       22
<PAGE>

                                                                      Appendix I
                                                                    (one of two)




                         STOCK CERTIFICATE QUESTIONNAIRE



         Pursuant to Section 3 of the Agreement, please provide us with the
following information:


1.       The exact name that your Shares are to be registered in (this is the
         name that will appear on your stock certificate(s)). You may use a
         nominee name if appropriate:               ____________________________

2.       All relationships between each UBS Party and the Registered Holder
         listed in response to Item 1 above:        ____________________________

                                                    ____________________________

                                                    ____________________________

3.       The mailing address of the Registered Holder listed in
         response to item 1 above:                  ____________________________

                                                    ____________________________

                                                    ____________________________

                                                    ____________________________

4.       The Social Security Number or Tax Identification Number of the
         Registered Holder listed in response to item 1 above:
                                                    ____________________________



<PAGE>



                                                                      Appendix I
                                                                    (two of two)


                      REGISTRATION STATEMENT QUESTIONNAIRE

         In connection with the preparation of the Registration Statement,
please provide us with the following information:

                  1. Pursuant to the "Selling Shareholders" section of the
Registration Statement, please state your or your organization's name exactly as
it should appear in the Registration Statement:

                  2. Please provide the number of shares that you or your
organization will own immediately after Closing, including those Shares
purchased by you or your organization pursuant to this Purchase Agreement and
those shares purchased by you or your organization through other transactions:

                  3. Have you or your organization had any position, office or
other material relationship within the past three years with the REIT, the OPCO
or any of their affiliates?


                 _____ Yes                          _____ No

         If yes, please indicate the nature of any such relationships below:

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

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

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


<PAGE>





APPENDIX II

Attention:

                   PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE

                  The undersigned, [an officer of, or other person duly
authorized by] _______________________________________ hereby certifies that
he/she [fill in official name of individual or institution] [said institution]
is the Purchaser of the shares evidenced by the attached certificate, and as
such, sold such shares on ________________ in accordance with Registration
Statement
                              [date]
number ___________________________________________________________________,
      [fill in the number of or otherwise identify Registration Statement]

the Securities Act of 1933, as amended, and any applicable state securities or
blue sky laws and the requirement of delivering a current prospectus by the REIT
and the OPCO has been complied with in connection with such sale.

Print or Type:

                  Name of Purchaser
                    (Individual or
                    Institution):           ____________________________________

                  Name of Individual
                    representing
                    Purchaser (if an
                    Institution)            ____________________________________

                  Title of Individual
                    representing
                    Purchaser (if an
                    Institution):           ____________________________________

Signature by:

                  Individual Purchaser
                    or Individual repre-
                    senting Purchaser:      ____________________________________




<PAGE>




                                                                     EXHIBIT A-1

          [Form of Closing Opinion of Counsel to the REIT and the OPCO]




<PAGE>


                                                                     EXHIBIT A-2

          [Form of Closing Opinion of Counsel to the REIT and the OPCO]



<PAGE>


                                                                       EXHIBIT B

             Opinion Matters for Additional Registration Statements

[opinion paragraphs to be delivered in connection with resale registration
statements]

                  Each of the REIT and the OPCO is duly organized, validly
existing and in good standing under the laws of the State of Delaware, and each
of the REIT and the OPCO has the requisite corporate power and authority to own
its properties and to conduct is business as presently conducted. The REIT is a
real estate investment trust duly organized, validly existing and in good
standing as a business REIT under the laws of the State of Delaware, and the
REIT has the requisite corporate power and authority to own its properties and
to conduct its business as is presently conducted.

                  The [Additional] Shares have been duly authorized and are
validly issued, nonassessable and fully paid, and are not subject to any
preemptive or similar rights.

                  The Registration Statement has been declared effective under
the Securities Act; to our knowledge, no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or threatened; and the Registration Statement, the
Final Prospectus, and each amendment thereof or supplement thereto (except for
the financial statements, schedules and the notes thereto and the other
financial data included or incorporated by reference therein, as to which we
express no opinion) comply as to form in all material respects with the
requirements of the Securities Act and the Exchange Act and the respective rules
of the Commission thereunder.

         While we have not verified, and are not passing upon and do not assume
any responsibility for, the accuracy, completeness or fairness of the statements
contained in the Registration Statement or Final Prospectus, we have
participated in reviews and discussions in connection with the preparation of
the Registration Statement and Final Prospectus, and advise you that, in the
curse of such reviews and discussions, nothing has come tot our attention which
would lead us to believe (i) that the Registration Statement at the time it
became effective (except for the financial statements and the notes thereto and
the other financial data included or incorporated by reference therein, as to
which we express no belief) contained any untrue statement of a material fact or
omitted to state any material fact necessary to make the statements therein not
misleading or (ii)that the Final Prospectus on the date thereof or on the date
of this opinion (except for the financial statements and the notes thereto and
the other financial data included or incorporated by reference therein, as to
which we express no belief) contained any



<PAGE>

untrue statement of a material fact or omitted to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.