REAL ESTATE PURCHASE CONTRACT




     THIS AGREEMENT, made as of the 17th day of May, 1996 between Richard E. and
May L.  Hess at 8042 Old  Oliver  Road,  Erie,  PA 16509  ("Seller"),  and Essex
Partners Inc., a New York corporation with offices at 100 Corporate Woods, Suite
300, Rochester, New York 14623 ("Purchaser"),

WITNESSETH:

     1. Seller  agrees to sell to  Purchaser  and  Purchaser  agrees to buy from
Seller,  in accordance with the terms,  conditions and stipulations set forth in
this Real Estate  Purchase  Contract  ("Contract"),  that real property with all
improvements located thereon, known as 8042 Old Oliver Road, Erie, PA 16509 with
Erie County Index Number 40-017-073.0002.01 (the "Land"). 
    
     2.  PURCHASE  PRICE:  The  total  purchase  price to be paid to  Seller  by
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Purchaser  for the Land  (the  "Purchase  Price")  shall be two  hundred  ninety
thousand dollars ($290,000).
     
     3. PAYMENT OF PURCHASE  PRICE:  Subject to the terms and conditions of this
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Contract,  the  Purchase  Price  shall be  payable  to Seller at the  Closing in
immediately available U.S. funds.


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     4.  DEPOSIT:  Upon  receipt of a fully  executed  Contract  (the "Time Line
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Date"), Purchaser shall deliver its check in the amount of five thousand dollars
($5,000) to Seller's  attorney  which shall  constitute  Purchaser's  good faith
deposit  ("Deposit").  Purchaser  shall have 90 days after the Time Line Date to
notify  Seller of its intent to cancel this  Contract for any reason  whatsoever
and the  full  Deposit  as set  forth  herein  shall  be  directly  returned  to
Purchaser.  Thereafter  in the event this Contract does not close as a result of
failure of any  condition  in Section  16 or through no fault of  Purchaser  and
Purchaser  waives its right to specific  performance  of this  Contract then the
Deposit and any Additional  Deposit as described in Section 10 shall be directly
returned to Purchaser. If Purchaser does not terminate this Contract pursuant to
Section 17 and Purchaser shall fail or refuse to perform its obligations  herein
specified at or before the date of Closing (or any agreed upon  extension),  the
Deposit and Additional Deposit, if any, shall be forfeited as liquidated damages
which the parties hereto agree is a reasonable and proper amount in light of the
circumstances,  and which  forfeiture  shall be Seller's  sole remedy in law and
equity.  "Deposit" of five thousand dollars ($5,000) shall be given to Seller 90
days after Time Line Date. These monies are non-refundable.

     5. TITLE: Promptly after execution the Time Line Date, Seller shall provide
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Purchaser  with a copy of any Abstract of Title and any title policy  pertaining
to the Land in its possession and Purchaser shall order evidence of title to the
Land by the issuance of a current title  insurance  binder (the "Title  Binder")
through a major  national  title  insurance  company  selected by Purchaser (the
"Title Company") in the amount of the Purchase Price. The Title Binder shall set
forth  the state of title to the Land and to other  property  that is or will be
subject to any easements or restrictions  (existing or to be created pursuant to
this




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Contract)  benefiting  the Land,  together with all  exceptions or conditions to
such title, including,  but without limitation to, all easements,  restrictions,
rights-of-way, covenants, reservations, and all other encumbrances affecting the
Land which would appear in the owner's title policy.

     6. SURVEY:  Promptly  after  execution of this  Contract,  Seller agrees to
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provide  Purchaser with the most recent instrument survey pertaining to the Land
in its possession. Purchaser acknowledges Seller is not in possession of survey.

     7. REVIEW OF TITLE  BINDER AND SURVEY:  Purchaser  shall have 60 days after
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the Time Line Date to deliver in writing  to Seller  Purchaser's  objections  to
title.  Purchaser's  failure to object to any item on the Title Binder or survey
within the time limitation imposed hereby shall be deemed to be approval of same
by Purchaser.

     8. OTHER DOCUMENTATION: Seller shall deliver to Purchaser upon execution of
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this Contract the originals or copies of any Phase I and Phase II  environmental
studies,  soils test,  utility  information,  topographical maps and subdivision
plots and  correspondence,  information and documentation  which would relate to
the use and/or  occupancy  of the Land which are in  possession  of Seller or to
which Seller has access without cost other than copying or duplicating charges.


     9. PURCHASER'S  OBJECTION TO TITLE;  DEFECTS IN TITLE:  Should Purchaser as
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described in Section 7 above  deliver to Seller its written  objections to title
or to matters



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contained  in the  survey,  Seller  shall have 60 days either to remove all such
defects or objections or to provide assurances acceptable to Purchaser that same
will be removed at or before Closing;  mortgages,  deeds of trust or other liens
of a specific  amount  shall be cleared  before or at closing,  by seller or, if
requested by the Seller,  by Purchaser  by deduction  from  proceeds due Seller.
Should Seller be unable to cure (or provide  assurances with respect to) any and
all such defects or  objections  (except  liens as provided  above) on or before
expiration of the 60 day period,  then  Purchaser  may, at its option,  elect to
terminate  this  Contract and receive a full refund of the Deposit,  or to waive
its  objections and proceed to Closing.  Seller shall not further  intentionally
encumber or restrict the title to the Land  without  Purchaser's  prior  written
consent, which shall not be unreasonably withheld.

     10. CLOSING: The Closing shall be on or before the sooner of ( i ) the date
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which is thirty (30) days after the date upon which  Purchaser has received site
plan approval for the Improvements (as hereinafter  defined), or ( ii ) 210 days
after the Time Line Date, and shall take place in the offices of the Erie County
Clerk,  or such  other  place  mutually  designated  by the  parties;  provided,
however, that Purchaser may designate an earlier date for the Closing by written
notice delivered to Seller not less than fifteen (15) days prior to such earlier
date for the  Closing  so  designated  in such  notice by  Purchaser.  Provided,
however, that if Purchaser has shown due diligence in endeavoring to satisfy all
contingencies herein and has been delayed by any agency or entity having control
over  satisfaction of those  contingencies,  then it is agreed that upon written
notice to Seller of



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such delay,  Purchaser shall be entitled to an extension of two months to enable
Purchaser  to  satisfy  those  contingencies  and  close  this  transaction.  An
additional  Deposit of $5,000 shall be paid to the Seller on or before the first
day of each month of the extension period.


     11.  PRORATIONS AND  ADJUSTMENTS  AT CLOSING:  Ad Valorem and similar taxes
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assessed  against the Land shall be prorated between Seller and Purchaser at the
time of Closing on the basis of a 365 day year.  Prorations  shall be based upon
current year's taxes and assessments, if available, or upon figures for the last
preceding  year,  in  which  event  Purchaser  and  Seller  shall  readjust  the
prorations when the current year's taxes and assessments  become available.  Any
special  assessments  applicable  to the  Land  including,  but no  limited  to,
"rollback" or other similar  assessments or taxes which apply on a change in use
of the  Land,  if  any,  whether  payable  in a lump  sum,  in  installments  or
otherwise,  shall be paid by Seller. The foregoing obligations shall survive the
Closing.

     12. TRANSACTION  COSTS:  Seller and Purchaser shall each be responsible for
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the payment of  one-half of all  transfer,  state and  documentary  stamps to be
affixed to the  instrument.  Purchaser shall be responsible for all other costs,
including the cost of the Title Policy, Survey and recording the deed, provided,
however, that each party shall pay its own attorney's fees.

     13. WARRANTY DEED AND OTHER DOCUMENTS REQUIRED FOR CLOSING:
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             A. At the Closing, Seller shall deliver the following:

                1. Warranty Deed in fee simple,  free and clear of all liens and
encumbrances,  except  subject to the  following  items now of record:  utility,
rights-of-way  and easements for the purpose of providing utility service to the
property herein  described,  common driveway or party wall agreements,  recorded
restrictions, and zoning regulations; otherwise the title to the above-described
real  estate  shall be good and  marketable  and such as will be  insured at the
regular  rates  by  a  title  insurance  company  licensed  to  do  business  in
Pennsylvania.  Also,  access to a public road may require  issuance of a highway
occupancy permit from the Department of Transportation. A specimen deed shall be
delivered  by Seller to  Purchaser's  attorney for review at least ten (10) days
before Closing.
               
                2. Documents evidencing the legal status, standing and authority
of Seller and such other documents, including standard form Seller's affidavits,
as may be required by Title Company for issuance of the Title Policy.
       
             B. At the Closing, Purchaser shall deliver the following:

                1. The  Purchase  price plus any costs to be shared by Purchaser
in cash,  certified  funds,  or a bank draft.  

                2. Such  documents  evidencing  the legal  status,  standing and
authority


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of Purchaser.


     14.  POSSESSION:  Possession  of the  premises  shall be  delivered  to the
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Purchaser  either  ( i )  120  days  after  Closing,  or ( ii ) 120  days  after
Purchaser has provided  written  notice to vacate,  but in no event prior to the
Closing Date,  and Purchaser has deposited  with Seller's  attorney  twenty-five
thousand  dollars  ($25,000)  which  together  with the Deposit  and  Additional
Deposit,  if any,  would be  forfeited as  liquidated  damages in the event that
Closing does not occur through no fault of Seller.  At Closing,  the twenty-five
thousand dollars ($25,000) together with the Deposit and Additional  Deposit, if
any, will be applied against the Purchase Price.
    
     15. REPRESENTATION AND WARRANTIES: For the purpose of inducing Purchaser to
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enter into and consummate this  transaction,  Seller  represents and warrants to
Purchaser that to the best of his knowledge and belief:

                ( i ) The Land is not currently being used, has never been used,
as a hazardous waste disposal  facility as defined in 40 C.F.R.  Section 260.10;
the Land is free of any lien or  encumbrance  which  may be  created  under  any
applicable state or federal law,  statute or regulation  pertaining to hazardous
waste;  and no  hazardous  waste  has been  placed  onto or into  the Land  (for
purposes hereof,  the term "hazardous waste" includes those substances listed in
40 C.F.R  Section  261.30  and  those  substances  previously  determined  to be
hazardous by any applicable state or federal law, statute or regulation),


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                ( ii ) There is no pending  or  threatened  condemnation  or any
road widening respecting all or any part of the Land.
                  
                ( iii ) Seller is  currently,  or has entered into a contract by
which he will  become,  the owner and holder of fee simple title to the Land and
has full power and  authority to execute this  Contract and all other  documents
necessary to consummate the transaction.

                ( iv )  Seller  warrants  that he has no  knowledge  of any deed
restrictions or other contractual restrictions or covenants which would restrict
or other impair the Purchaser from  developing  and operating a limited  service
hotel on the land.
    
     16. CONDITIONS TO CLOSING:  Purchaser's  obligation to purchase the Land at
the Closing is subject to all of the following conditions, which shall have been
fulfilled to Purchaser's satisfaction:

             A.  At the  Closing,  the  following  conditions  shall  have  been
                 satisfied:
                
                1. Good and  marketable fee simple title to the Land shall be in
the  name  of the  Seller  and  any  beneficial  easements  and/or  restrictions
appurtenant  to the Land  are not  subject  to any  interest,  the  termination,
enforcement,  exercise or  foreclosure  of which could  terminate or prevent the
enforcement of such easement or restriction.


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                2. No portion of the Land has been taken by or is the subject of
a condemnation proceeding or is under threat of condemnation
                      
                3. There has been no material or adverse change to the condition
of the Land or to the  representations  and  warranties  of Seller  set forth in
Section 18 hereof.
                  
             B. The  following  conditions  shall  have  been  satisfied  by the
Purchaser or be deemed waived by the Purchaser on or before Closing:

                1. That zoning and the  conditions of zoning,  including any use
permit, site plan approval,  curb cut permit,  demolition permit,  variances and
other  similar  governmental  approvals  required  by  law  or  necessitated  by
Purchaser's  planned  use of the Land in  conjunction  with  other  land for the
construction  and  operation  thereon of a  three-story,  limited  service hotel
having a minimum of 100 guest rooms,  along with all  facilities  and  amenities
attendant thereto (hereinafter the "Improvements"), shall have been received.
                      
                2. That all platting or  replatting  requirements  in respect of
the Land have been  satisfied  by the  Purchaser to permit the transfer of title
and accommodate  construction and operation of the Improvements under applicable
laws and regulations.
                      
                3. That  Purchaser has  reasonably  determined  that all permits
necessary,  in Purchaser's  sole opinion,  for the construction and operation of
the




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Improvements  on the Land, are available to Purchaser after receipt of site plan
approval.
                     


                4. Easements:  Purchaser,  with Seller's assistance must be able
to obtain  without  cost any and all  easements  necessary to build the proposed
development.  Said easements,  including but not limited to the access easement,
shall be unencumbered and the title insurance in favor of Purchaser shall insure
such easements.
                      
                5. Soil  Conditions:  The soil, in its natural state,  must have
sufficient   load-bearing   characteristics  to  support  Purchaser's   proposed
development,   and  must  have  adequate  permeability  to  drain  the  proposed
development.  Seller warrants that to the best of his knowledge, the Premises do
not contain a landfill, hazardous waste, underground mines, caves or underground
streams and that the soil  condition and water table are such that Purchaser can
build  the  proposed  development  without  incurring  additional  extraordinary
expenses.
                6. That no federal,  state or local  government  restrictions or
requirements  would preclude  construction  and operation of the Improvements on
the Land.
                      
                7. That all  utilities  including  but not limited to  electric,
gas,  telephone,  cable TV, will be  available  for use by  Purchaser  along Old
Oliver Road or on the Land.  Water will be available at the  intersection of Old
Oliver Road and Oliver Road. Purchaser will be responsible for bringing water to
the Land along Old Oliver Road. Seller warrants



<PAGE>
                                      



that to the best of his knowledge  sanitary sewer is currently  available on the
Land. The capacity of these various services, i.e., utilities,  water and sewer,
are not conditions to Closing.
                      
                8. That  Purchaser has  reasonably  determined  that the Land is
free of any hazardous  substances or wastes that would preclude the Construction
of the Improvements on the Land.
                      
                9. That Purchaser is able to secure a franchise for the national
hotel brand of its choice.

             C. During the term of this Contract, Purchaser shall have the right
to enter upon the Land for the  purpose of making the tests and  investigations,
at its expense,  necessary or appropriate  to satisfy the foregoing  conditions.
Purchaser  shall defend,  indemnify and hold Seller  harmless from any liability
which may arise due solely to such entry.  Purchaser  shall repair any damage to
the Land in the event this transaction is not consummated.
     
     17.  FAILURE  OF  CONDITIONS:   If  any  of  the  conditions  precedent  to
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Purchaser's  obligation  to close have not  occurred or been  satisfied  or been
deemed satisfied on or

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before 210 days after the Time Line Date or any  extension  thereof as set forth
in Section 10,  Purchaser at its sole option may: (a) terminate this Contract by
written  notice  delivered to Seller on or before the Closing Date, or (b) waive
such conditions precedent and proceed to Closing.
     
     18.  NOTICES:  All notices and other  communications  hereunder shall be in
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writing and shall be delivered  personally  against  receipt or shall be sent by
registered mail,  certified mail, or Express Mail services,  postage prepaid and
return receipt requested,  or by nationally utilized overnight delivery service,
addressed to the parties as follows:

     As to Seller:     Richard E. and May L. Hess
                       8042 Old Oliver Road
                       Erie, PA  16509

     As to Purchaser:  ESSEX PARTNERS INC.
                       100 Corporate Woods
                       Rochester, New York  14623
                       Attn:  Thomas W. Blank

Any notice in  accordance  herewith  shall be deemed  received  when delivery is
received or refused, as the case may be.  Additionally,  notices may be given by
telephone  facsimile  transmission,  provided  that  an  original  copy  of said
transmission  shall  be  delivered  to  the  addressee  by  nationally  utilized
overnight  delivery services on the day following such  transmission.  Telephone
facsimiles shall be deemed delivered on the date of such transmission.
     
     19.  PARTIES  BOUND:  This Contract  shall be binding upon and inure to the
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benefit


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of Seller and  Purchaser,  their  respective  heirs,  personal  representatives,
successors and assigns.
     

     20.  ASSIGNMENT:  Purchaser may assign this  Contract to a  partnership  in
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which it is a general  partner or a  corporation  in which it is a  shareholder,
provided that Purchaser shall remain  responsible for the faithful  performances
of its obligations under the Contract.

     21.  GOVERNING  LAW: The laws of the  Commonwealth  of  Pennsylvania  shall
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govern  the  validity,  construction,  enforcement  and  interpretation  of this
Contract.
     
     22.  EXPIRATION:  The offer of  Purchaser  extended by the delivery of this
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Contract to Seller shall be  automatically  revoked  unless Seller shall execute
and deliver an executed facsimile copy of the Contract to Purchaser on or before
5:00 p.m., May 13, 1996 to be followed by originals in overnight mail.
     
     23.  MULTIPLE  COUNTERPARTS:  This  Contract may be executed in a number of
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identical  counterparts.  If so  executed,  each  of  such  counterparts  shall,
collectively, constitute one agreement, but in making proof of this Contract, it
shall not be necessary to produce or account for more than one such counterpart.
If  requested  by  Purchaser,  Seller  agrees to  execute a  memorandum  of this
Contract  in form  recordable  in the real  property  records  where the Land is
situate.


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     24. ENTIRE  AGREEMENT:  This Contract  embodies the entire agreement of the
parties in respect of the transaction herein contemplated, superseding all prior
agreements  whether oral or written.  Any amendments  hereto shall be in writing
and executed by the parties hereto.

     Sellers may remove all or part of any building or building  fixtures on the
property but are not obligated to do so.

                                     SELLER
                                               /S/ Richard E. Hess
------------------------------                 ---------------------------------
Witness
                                               /s/ May L. Hess
                                               ---------------------------------
                                               
                                               PURCHASER
                                               ESSEX PARTNERS INC.


/s/ Barbara J. Purvis                          /s/ Jerald P. Eichelberger
_______________________________                By: _____________________________
Witness                                        Exec. V.P.




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