CERTIFICATE OF FORMATION
                                       OF
                           PALMER INN, PRINCETON, LLC

SECRETARY OF STATE
STATE OF NEW JERSEY

         The Undersigned, of the age of eighteen or over, for the purpose of
forming a limited liability company pursuant to the provisions of Title 42,
Limited Liability Companies, General of New Jersey Statutes, does hereby execute
the following Certificate of Formation:

         FIRST: The name of the limited liability company is the PALMER INN,
PRINCETON, LLC (the "Company").

         SECOND: The purpose of the Company is to engage in any activity within
the purposes for which limited liability companies may be organized under the
New Jersey Limited Liability Company Act (the 'Act").

         THIRD: The initial Registered Office of the Company is Ten Washington
Street, P.O. Box 806, Morristown, New Jersey 07963-0905. The name of the
Company's initial Registered Agent at such address is Anita J. Siegel.

         FOURTH: One corporation will be the initial member of the Company.

         FIFTH The name and address of the individual forming the Company is as
follows:

                              Anita J. Siegel, Esq.
                          Schenck, Price, Smith & King
                       10 Washington Street, P.O. Box 905
                        Morristown, New Jersey 07963-0905

         SIXTH: The Company shall dissolve at such time as provided in the
operating agreement for the Company.

         SEVENTH: (a) A member or manager of the Company shall not be personally
liable to the Company for damages for breach of any duty owed to the Company,
except that this provision shall not relieve a member or manager from liability
for any breach of duty based upon an act or omission (1) in breach of such
person's duty of loyalty to the Company or its members, (2) not in good faith or
involving a knowing violation of law, or (3) resulting in receipt by such person
of an improper personal benefit.

         (b) The Company shall indemnify an Agent against such agent's expenses
and liabilities in connection with any proceeding involving the Agent because
the Agent is or was an Agent provided that a judgment or other final
adjudication establishes that the acts or omissions of the Agent (1) were not
in breach of the Agent's duty of loyalty to the Company, (2) were in good faith
or did not involve a knowing violation of law, or (3) did not result in receipt
by the agent of an improper personal benefit.

         (c) In the event that any proceeding is settled by means other than a
judgment in a court of law, the determination as to whether the Agent's acts or
omissions (1) were not in

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breach of the Agent's duty of loyalty to the Company, (2) were in good faith or
did not involve a knowing violation of law, or (3) did not result In receipt by
the agent of an improper personal benefit, shall be made (i) by the Managers of
the Company at a meeting at which is present a quorum, determined without
including Managers who were parties to or otherwise involved in the proceeding,
acting by a majority vote of Managers who are not parties to or otherwise
involved in the proceeding, or if a quorum is not obtainable or even if
obtainable and the quorum of the Managers by a majority vote of the
disinterested Managers directs (ii) by independent legal counsel designated by
the Managers in a written opinion.

         (d) Expenses incurred by an Agent in connection with a proceeding may
be paid by the Company in advance of the final disposition of the proceeding if
authorized by the Managers upon receipt of an undertaking by or on behalf of the
Agent to repay the amount unless it shall ultimately be determined that the
agent is entitled to be indemnified as provided herein.

         (e) If the Company has determined that the Agent is not entitled to
indemnification as above provided, the Agent may apply to a court for an award
of indemnification by the Company as provided in the Act.

         (f) The following words shall have the definitions herein provided:

               (1)  "Expenses" means reasonable costs, disbursements and counsel
                    fees;

               (2)  "Liabilities" means amounts paid or incurred in satisfaction
                    of settlement, judgments, fines and penalties;

               (3)  "Proceeding" means any pending, threatened or completed
                    civil, criminal, administrative or arbitrative action, suit
                    or proceeding, and any appeal therein and any inquiry or
                    investigation which could lead to such action, suit or
                    proceeding; and

         (4) "Agent" means any person who is or was a manager, member, employee
or agent of the Company and any person who is or was a manager, member, employee
or agent of any other enterprise, serving as such at the request of the Company,
or the legal representative of the manager, member, employee or agent,

         EIGHTH All Company members, managers and agents shall be indemnified to
the full extent provided by law. Such indemnification may be funded though
insurance or otherwise as authorized by the Managers of the Company.

         IN WITNESS WHEREOF, the undersigned has hereunto signed this
Certificate of Formation this 31st day of March, 1999.




                                                 /s/ Anita Siegel
                                                 -----------------------------
                                                     Anita J. Siegel