T H E  A M E R I C A N  I N S T I T U T E  O F  A R C H I T E C T S



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                               AIA DOCUMENT A101

                       STANDARD FORM OF AGREEMENT BETWEEN
                              OWNER AND CONTRACTOR

                        WHERE THE BASIS OF PAYMENT IS A
                                 STIPULATED SUM

                                  1987 EDITION

 THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES; CONSULTATION WITH AN ATTORNEY
         IS ENCOURAGED WITH RESPECT TO ITS COMPLETION OR MODIFICATION.

 THE 1987 EDITION OF AIA DOCUMENT A201, GENERAL CONDITIONS OF THE CONTRACT FOR
 CONSTRUCTION, IS ADOPTED IN THIS DOCUMENT BY REFERENCE. DO NOT USE WITH OTHER
  GENERAL CONDITIONS UNLESS THIS DOCUMENT IS MODIFIED. THIS DOCUMENT HAS BEEN
    APPROVED AND ENDORSED BY THE ASSOCIATED GENERAL CONTRACTORS OF AMERICA.

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AGREEMENT

made as of the day of October in the year of
Nineteen Hundred and Ninety-seven.

BETWEEN the Owner:   Erie Hotel LLC
(NAME AND ADDRESS)   c/o Essex Hospitality Associates IV L.P.
                     100 Corporate Woods, Suite 300
                     Rochester, NY 14623

and the Contractor:  DiMarco Constructors Corp.
(NAME AND ADDRESS)   2595 Brighton-Henrietta Townline Road
                     Rochester, NY 14623

The Project is:      Hampton Inn (98 Rooms)
(NAME AND LOCATION)  Old Oliver Road at I-90
                     Erie, PA

The Architect is:    Braun & Steidl
(NAME AND ADDRESS)   1041 West Market Street
                     Akron, OH 44313

The Owner and Contractor agree as set forth below.



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     Copyright 1915,  1918, 1925, 1937, 1951, 1958, 1961, 1963, 1967, 1974,
     1977, (c)1987 by The American  Institute of Architects,  1735 New York
     Avenue,  N.W.,  Washington,  D.C. 20006.  Reproduction of the material
     herein or  substantial  quotation of its  provisions  without  written
     permission of the AIA violates the copyright laws of the United States
     and will be subject to legal prosecution.
---------------------------------------------------------------------------

AIA  DOCUMENT  A101 -  OWNER-CONTRACTOR  AGREEMENT - TWELFTH
EDITION  - AIA  (r) -  (c)1987  THE  AMERICAN  INSTITUTE  OF
ARCHITECTS,  1735 NEW YORK AVENUE,  N.W.,  WASHINGTON,  D.C.
20006                                                            A101-1987 1

WARNING:  Unlicensed photocopying violates U.S. copyright laws and is subject to
legal prosecution.



                                       


<PAGE>


                                   ARTICLE 1
                                   ---------
                             THE CONTRACT DOCUMENTS

The Contract  Documents  consist of this  Agreement,  Conditions of the Contract
(General, Supplementary and other Conditions), Drawings, Specifications, addenda
issued prior to  execution of this  Agreement,  other  documents  listed in this
Agreement and Modifications issued after execution of this Agreement; these form
the  Contract,  and are as fully a part of the  Contract  as if attached to this
Agreement or repeated herein. The Contract  represents the entire and integrated
agreement  between  the  parties  hereto  and  supersedes  prior   negotiations,
representations  or  agreements,  either  written or oral. An enumeration of the
Contract Documents, other than Modifications, appears in Article 9.


                                   ARTICLE 2
                                   ---------
                           THE WORK OF THIS CONTRACT

The  Contractor  shall  execute  the  entire  Work  described  in  the  Contract
Documents, except to the extent specifically indicated in the Contract Documents
to be the responsibility of others, or as follows:






                                   ARTICLE 3
                                   ---------
                DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION

3.1 The date of  commencement  is the  date  from  which  the  Contract  Time of
Paragraph  3.2 is measured,  and shall be the date of this  Agreement,  as first
written above,  unless a different date is stated below or provision is made for
the date to be fixed in a notice to proceed issued by the Owner.

(INSERT THE DATE OF COMMENCEMENT.  IF IT DIFFERS FROM THE DATE OF THIS AGREEMENT
OR, IF APPLICABLE, STATE THAT THE DATE WILL BE FIXED IN A NOTICE TO PROCEED.)

          October 15, 1997

Unless the date of  commencement is established by a notice to proceed issued by
the Owner,  the Contractor  shall notify the Owner in writing not less than five
days  before  commencing  the Work to permit  the  timely  filing of  mortgages,
mechanic's liens and other security interests.


3.2 The Contractor shall achieve Substantial Completion and Certificate of
Occupancy of the entire Work not later than

(INSERT  THE  CALENDAR  DATE OR  NUMBER  OF  CALENDAR  DAYS  AFTER  THE  DATE OF
COMMENCEMENT. ALSO INSERT ANY REQUIREMENTS FOR EARLIER SUBSTANTIAL COMPLETION OF
CERTAIN  PORTIONS  OF  THE  WORK,  IF  NOT  STATED  ELSEWHERE  IN  THE  CONTRACT
DOCUMENTS.)

          June 15, 1998

, subject to  adjustments  of this  Contract  Time as provided  in the  Contract
Documents.

(INSERT  PROVISIONS,  IF ANY,  FOR  LIQUIDATED  DAMAGES  RELATING  TO FAILURE TO
COMPLETE ON TIME.)


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AIA  DOCUMENT  A101 -  OWNER-CONTRACTOR  AGREEMENT - TWELFTH
EDITION  - AIA  (r) -  (c)1987  THE  AMERICAN  INSTITUTE  OF
ARCHITECTS,  1735 NEW YORK AVENUE,  N.W.,  WASHINGTON,  D.C.
20006                                                          A101-1987 2

WARNING:  Unlicensed photocopying violates U.S. copyright laws and is subject to
legal prosecution.


                                       


<PAGE>


                                   ARTICLE 4
                                   ---------
                                  CONTRACT SUM

4.1 The Owner shall pay the  Contractor  in current  funds for the  Contractor's
performance  of the Contract the Contract Sum of Four million two hundred eighty
thousand------------------00/100  Dollars ($4,280,000.00),  subject to additions
and deductions as provided in the Contract Documents.

4.2 The Contract Sum is based upon the following  alternates,  if any, which are
described in the Contract Documents and are hereby accepted by the Owner:

(STATE THE NUMBERS OR OTHER IDENTIFICATION OF ACCEPTED ALTERNATES.  IF DECISIONS
ON OTHER  ALTERNATES ARE TO BE MADE BY THE OWNER  SUBSEQUENT TO THE EXECUTION OF
THIS AGREEMENT,  ATTACH A SCHEDULE OF SUCH OTHER  ALTERNATES  SHOWING THE AMOUNT
FOR EACH AND THE DATE UNTIL WHICH THAT AMOUNT IS VALID.)

1.  Construction testing will be contracted and paid for by Owner.

2.  All above ground structures will be razed to foundation or pad level by
    Owner. Demolition by Contractor will be foundation, pad, underground
    structures and debris from the fire.

3.  Undercut and structural fill is required for the building pad area..

4.  Underground drainage, vent piping and small branch drains shall be PVC.

5.  EIFS heavy duty mesh only at entranceways and columns of porte cochere.

6.  Flat roof shall be a ballasted system with .060 EPDM.

7.  Contractor to unload, store and load FF&E into hotel. Owner will distribute
    and install FF&E.

8.  Contractor to provide Surety Bond , if requested by owner, for an add of
    $27, 000.

9.  The Contract Sum is a guaranteed maximum price. There will be a 50-50 split
    of cost savings realized below the Contract Sum as evidenced by Contractor's
    final job cost run.


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AIA DOCUMENT A101 - OWNER-CONTRACTOR AGREEMENT - TWELFTH
EDITION - AIA (r) - (c)1987 THE AMERICAN INSTITUTE OF
ARCHITECTS, 1735 NEW YORK AVENUE, N.W., WASHINGTON, D.C.
20006                                                  A101-1987 3 

WARNING: Unlicensed photocopying violates U.S. copyright laws and is subject to
legal prosecution.


                                       


<PAGE>


                                   ARTICLE 5
                                   ---------
                               PROGRESS PAYMENTS

5.1 Based upon  Applications  for  Payment  submitted  to the  Architect  by the
Contractor and Certificates for Payment issued by the Architect, the Owner shall
make  progress  payments on account of the  Contract  Sum to the  Contractor  as
provided below and elsewhere in the Contract Documents.

5.2 The period  covered by each  Application  for Payment  shall be one calendar
month ending on the last day of the month, or as follows:  The application shall
be  submitted  on the  Twenty-fifth  (25th)  day  of the  same  month  with  the
percentage  completion  projected  through the last day of the month  subject to
adjustment.  Prior to payment, the application must be approved by the owner and
any building loan lender or the representatives of each.

5.3 Provided an  Application  for Payment is received by the Architect not later
than the  Twenty-fifth  day of a month,  the Owner  shall  make  payment  to the
Contractor  not later  than the  Twentieth  day of the  following  month.  If an
Application for Payment is received by the Architect after the application  date
fixed above, payment shall be made by the Owner not later than Thirty days after
the Architect receives the Application for Payment.

5.4 Each  Application  for  Payment  shall be based upon the  schedule of values
submitted by the  Contractor  in  accordance  with the Contract  Documents.  The
schedule of values  shall  allocate  the entire  Contract  Sum among the various
portions of the Work and be prepared in such form and  supported by such data to
substantiate  its accuracy as the Architect may require.  This schedule,  unless
objected  to by the  Architect,  shall  be  used as a basis  for  reviewing  the
Contractor's Applications for Payment.

5.5 Applications for Payment shall indicate the percentage of completion of each
portion of the Work as of the end of the period covered by the  Application  for
Payment.

5.6 Subject to the  provisions  of the  Contract  Documents,  the amount of each
progress payment shall be computed as follows:

5.6.1.  Take that portion of the  Contract  Sum properly  allocable to completed
Work as determined by multiplying  the percentage  completion of each portion of
the Work by the share of the total Contract Sum allocated to that portion of the
Work in the schedule of values,  less  retainage of ten percent  (10%).  Pending
final  determination of cost to the Owner of changes in the Work, amounts not in
the dispute may be  included  as provided in  Subparagraph  7 3.7 of the General
Conditions  even  though the  Contract  Sum has not yet been  adjusted by Change
Order;

5.6.2 Add that portion of the Contract Sum properly  allocable to materials  and
equipment delivered and suitably stored at the site for subsequent incorporation
in the completed construction less retainage of percent (10%);

5.6.3 Subtract the aggregate of previous payments made by the Owner; and

5.6.4  Subtract  amounts,  if any,  for  which the  Architect  has  withheld  or
nullified a Certificate  for Payment as provided in Paragraph 9.5 of the General
Conditions.

5.8 Reduction or limitation of retainage, if any, shall be as follows:

(IF IT IS INTENDED,  PRIOR TO  SUBSTANTIAL  COMPLETION  OF THE ENTIRE  WORK,  TO
REDUCE  OR LIMIT  THE  RETAINAGE  RESULTING  FROM THE  PERCENTAGES  INSERTED  IN
SUBPARAGRAPHS  5.6.1 AND 5.6.2 ABOVE, AND THIS IS NOT EXPLAINED ELSEWHERE IN THE
CONTRACT DOCUMENTS, INSERT HERE PROVISIONS FOR SUCH REDUCTION OR LIMITATION.)

Until the work is 50% complete,  the Owner will retain 10% of the amount due the
Contractor on account of progress payments. At the time the work is 50% complete
and thereafter, if the manner of completion of the work and its progress are and
remain satisfactory to the Owner and in the absence of other good and sufficient
reasons,  the Owner will (on presentation by the Contractor of consent of surety
for each  application)  authorize any remaining  partial  payments to be made in
full.  Upon  issuance  of a  Certificate  of  Occupancy,  a punch  list  will be
established  with a dollar value. The dollar value will be multiplied by 1.75 to
arrive at the monies to be held until final completion is achieved.

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AIA DOCUMENT A101 - OWNER-CONTRACTOR AGREEMENT - TWELFTH
EDITION - AIA (r) - (c)1987 THE AMERICAN INSTITUTE OF
ARCHITECTS, 1735 NEW YORK AVENUE, N.W., WASHINGTON, D.C.
20006                                                  A101-1987 4 

WARNING: Unlicensed photocopying violates U.S. copyright laws and is subject to
legal prosecution.


                                       


<PAGE>


                                   ARTICLE 6
                                   ---------
                                 FINAL PAYMENT

Final payment, constituting the entire unpaid balance of the Contract Sum, shall
be made by the Owner to the  Contractor  when (1) the  Contract  has been  fully
performed  by the  Contractor  except  for the  Contractor's  responsibility  to
correct  nonconforming  Work as provided in  Subparagraph  12.2.2 of the General
Conditions and to satisfy other requirements,  if any, which necessarily survive
final payment;  and (2) a final  Certificate  for Payment has been issued by the
Architect;  such final  payment shall be made by the Owner not more than 30 days
after the issuance of the  Architect's  final  Certificate  for  Payment,  or as
follows:Contractor must also submit a final Certificate of occupancy from Summit
Township and final certificates from other Municipal or administrative  agencies
which  are  required  to allow  the  building  to open and  operate  as a hotel.
Additionally, Contractor must submit final lien releases.



                                   ARTICLE 7
                                   ---------
                            MISCELLANEOUS PROVISIONS

7.1 Where  reference  is made in this  Agreement  to a provision  of the General
Conditions or another Contract Document,  the reference refers to that provision
as amended or supplemented by other provisions of the Contract Documents.

7.2 Payments due and unpaid under the Contract shall bear interest from the date
payment is due at the rate stated below, or in the absence thereof, at the legal
rate  prevailing  from time to time at the place  where the  Project is located.
(INSERT RATE OF INTEREST  AGREED UPON, IF ANY.) Prime rate as established in the
money rates section of The Wall Street Journal.


(USURY LAWS AND  REQUIREMENTS  UNDER THE FEDERAL  TRUTH IN LENDING ACT,  SIMILAR
STATE AND LOCAL  CONSUMER  CREDIT LAWS AND OTHER  REGULATIONS AT THE OWNER'S AND
CONTRACTOR'S  PRINCIPAL  PLACES OF  BUSINESS  THE  LOCATION  OF THE  PROJECT AND
ELSEWHERE  MAY AFFECT THE VALIDITY OF THIS  PROVISION.  LEGAL  ADVICE  SHOULD BE
OBTAINED  WITH  RESPECT  TO  DELETIONS  OR  MODIFICATIONS,  AND  ALSO  REGARDING
REQUIREMENTS SUCH AS WRITTEN DISCLOSURES OR WAIVERS.)

7.3  Other  provisions:   Contractor  will  cooperate  with  Owner  and  Owner's
construction  and/or permanent lender regarding any requirements and/or requests
of such lender,  including  reasonable requests to amend this Contract to enable
them to advance  progress and final  payments  under the terms of the loan (i.e.
monthly lien releases and final lien releases, as built drawings,  proof of bond
and insurance coverage, current list of all subcontractors).

                                   ARTICLE 8
                                   ---------
                           TERMINATION OR SUSPENSION

8.1 The Contract may be terminated by the Owner or the Contractor as provided in
Article 14 of the General Conditions.

8.2 The Work may be  suspended  by the Owner as  provided in Article 14 of the
General Conditions.

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AIA DOCUMENT A101 - OWNER-CONTRACTOR AGREEMENT - TWELFTH
EDITION - AIA (r) - (c)1987 THE AMERICAN INSTITUTE OF
ARCHITECTS, 1735 NEW YORK AVENUE, N.W., WASHINGTON, D.C.
20006                                                  A101-1987 5 

WARNING: Unlicensed photocopying violates U.S. copyright laws and is subject to
legal prosecution.


                                       


<PAGE>


                                   ARTICLE 9
                                   ---------
                       ENUMERATION OF CONTRACT DOCUMENTS

9.1 The Contract Documents,  except for Modifications  issued after execution of
this Agreement, are enumerated as follows:

9.1.1 The Agreement is the executed Standard Form of Agreement Between Owner and
Contractor, AIA Document A101, 1987 Edition.

9.1.2 The General  Conditions  are the General  Conditions  of the  Contract for
Construction, AIA Document A201, 1987 Edition.

9.1.3 The Supplementary and other Conditions of the Contract are those contained
in the Project Manual dated August 27, 1997 and are as follows:

Document                              Title                                Pages
See Exhibit A

The  Specifications  are  those  contained  in the  Project  Manual  dated as in
Subparagraph 9.1.3, and are as follows:

(EITHER  LIST THE  SPECIFICATIONS  HERE OR REFER TO AN EXHIBIT  ATTACHED TO THIS
AGREEMENT.) 

Section                            Title                                Pages 
See Exhibit A




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AIA DOCUMENT A101 - OWNER-CONTRACTOR AGREEMENT - TWELFTH
EDITION - AIA (r) - (c)1987 THE AMERICAN INSTITUTE OF
ARCHITECTS, 1735 NEW YORK AVENUE, N.W., WASHINGTON, D.C.
20006                                                  A101-1987 6 

WARNING: Unlicensed photocopying violates U.S. copyright laws and is subject to
legal prosecution.


                                    


<PAGE>


9.1.5 The  Drawings  are as  follows,  and are dated  August 27,  1997  unless a
different  date is shown below: 
(EITHER  LIST THE DRAWINGS  HERE OR REFER TO AN EXHIBIT ATTACHED TO THIS 
AGREEMENT.)

Number                                   Title                              Date
See Exhibit B

Includes revised drawings:

CA-2                         Cut-Fill Worksheet                          9/16/97

A-12                         Enlarged Pool/Mechanical Laundry            9/16/97
                             Rooms & Details




9.1.6 The addenda, if any, are as follows:

Number                                 Date                        Pages
1                                 September 9, 1997                  3
2                                 September 16, 1997                 4



Portions  of  addenda  relating  to  bidding  requirements  are not  part of the
Contract  Documents unless the bidding  requirements are also enumerated in this
Article 9.


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AIA DOCUMENT A101 - OWNER-CONTRACTOR AGREEMENT - TWELFTH
EDITION - AIA (r) - (c)1987 THE AMERICAN INSTITUTE OF
ARCHITECTS, 1735 NEW YORK AVENUE, N.W., WASHINGTON, D.C.
20006                                                  A101-1987 7 

WARNING: Unlicensed photocopying violates U.S. copyright laws and is subject to
legal prosecution.


                                       


<PAGE>




9.1.7 Other  documents,  if any,  forming part of the Contract  Documents are as
follows:

(LIST  HERE ANY  ADDITIONAL  DOCUMENTS  WHICH ARE  INTENDED  TO FORM PART OF THE
CONTRACT  DOCUMENTS.  THE GENERAL CONDITIONS  PROVIDE THAT BIDDING  REQUIREMENTS
SUCH AS  ADVERTISEMENT  OR INVITATION TO BID,  INSTRUCTIONS  TO BIDDERS,  SAMPLE
FORMS AND THE  CONTRACTOR'S  BID ARE NOT PART OF THE CONTRACT  DOCUMENTS  UNLESS
ENUMERATED IN THIS AGREEMENT.  THEY SHOULD BE LISTED HERE ONLY IF INTENDED TO BE
PART OF THE CONTRACT DOCUMENTS.)


Bid Letter dated August 27, 1997 including special
conditions, bid form, Letter Summit Township Sewer Authority
dated June 25, 1997, Letter Erie County Conservation
District dated July 14, 1997, Letter First Assembly of God
dated May 12, 1997, (A-1)                                               16 Pages


Contractor Bid dated September 19, 1997 (A-2)                            2 Pages

Contractor Revised Bid dated October 13, 1997 (A-3)

Construction Schedule dated October 13, 1997 (A-4)

Developers Agreement Summit Township Water Authority dated
January 24, 1997                                                         5 Pages

Developers Agreement Summit Township Sewer Authority dated
January 30, 1997                                                         6 Pages

Developers Agreement Summit Township dated January 21, 1997             13 Pages



This Agreement is entered into as of the day and year first written above and is
executed in at least three  original  copies of which one is to be  delivered to
the  Contractor,  one to the  Architect  for  use in the  administration  of the
Contract, and the remainder to the Owner.



OWNER  ERIE HOTEL LLC                   CONTRACTOR   DIMARCO CONSTRUCTORS, CORP.


/s/ Thomas W. Blank                     /s/ John L. DiMarco
---------------------------            -----------------------------------------
(Signature)                                             (Signature)

Thomas W. Blank, Senior Vice Pres.   John L. DiMarco, II,  Exec.  Vice President
----------------------------------   --------------------  -----  --------------
(PRINTED NAME AND TITLE)             (PRINTED NAME, AND TITLE)


CAUTION: YOU SHOULD SIGN AN ORIGINAL AIA DOCUMENT WHICH HAS THIS CAUTION PRINTED
IN RED. AN ORIGINAL  ASSURES THAT CHANGES WILL NOT BE OBSCURED AS MAY OCCUR WHEN
DOCUMENTS ARE REPRODUCED.


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AIA DOCUMENT A101 - OWNER-CONTRACTOR AGREEMENT - TWELFTH
EDITION - AIA (r) - (c)1987 THE AMERICAN INSTITUTE OF
ARCHITECTS, 1735 NEW YORK AVENUE, N.W., WASHINGTON, D.C.
20006                                                  A101-1987 8 

WARNING: Unlicensed photocopying violates U.S. copyright laws and is subject to
legal prosecution.


                                      


<PAGE>


                                   EXHIBIT A
                                  HAMPTON INN
                      OLD OLIVER ROAD, ERIE, PENNSYLVANIA
                                     INDEX


BID DOCUMENTS                                                           PAGE NO.
-------------                                                           --------
Instructions  to  Bidders  (AIA  Document  A701                            1-5
General Conditions (AIA Document A201)                                    1-24 
Supplementary Conditions                                                   1-5

INFORMATION PROVIDED FOR BIDDERS
--------------------------------
     Section 00200 - Geotechnical Investigation and Soil Boring Logs      1-43

TECHNICAL SPECIFICATIONS
------------------------
DIVISION 1 - GENERAL REQUIREMENTS
---------------------------------
     Section 01000 - Special Conditions                                    1-4
     Section 01710 - Cleaning                                              1-2

DIVISION 2 - SITE WORK
----------------------
     Not Used

DIVISION 3 - CONCRETE
---------------------
     Section 03300 - Cast-in-Place Concrete                               1-13
     Section 03410 - Structural Pre-Cast Concrete                          1-5

DIVISION 4 - MASONRY
--------------------
     Section 04200 - Unit Masonry                                          1-9
     Section 04200A - Engineered Masonry                                   1-5

DIVISION 5 - METALS
-------------------
     Section 05120 - Structural Steel                                      1-7
     Section 05210- Steel Joists                                           1-4
     Section 05300 - Metal Decking                                         1-4
     Section 05400 - Cold Formed Metal Framing                             1-3
     Section 05500 - Metal Fabrications                                    1-7
     Section 05520 - Handrails and Railings                                1-7

DIVISION 6 - CARPENTRY
----------------------
     Section 061 00 - Rough Carpentry                                      1-4
     Section 06200 - Finish Carpentry                                      1-4
     Section 06410 - Casework                                              1-4

DIVISION 7 - THERMAL AND MOISTURE PROTECTION
--------------------------------------------
     Section 07210 - Building Insulation                                   1-5
     Section 07241 - Exterior Insulation and Finish System - Class PB      1-4
     Section 07270 - Fire Barrier Systems                                  1-8
     Section 07410 - Manufactured Roof and Wall Systems                    1-5
     Section 07530 - Single-Ply Membrane Roofing                           1-5
     Section 07620 - Sheet Metal Flashing and Trim                         1-5
     Section 07724 - Roof Hatches                                          1-2
     Section 07900 - Joint Sealers                                         1-3



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<PAGE>



DIVISION 8 - DOORS AND WINDOWS
------------------------------
     Section 08110 - Steel Doors and Frames                                1-4
     Section 08210 - Wood Doors                                            1-4
     Section 08305 - Access Doors                                          1-2
     Section 08410 - Aluminum Entrances and Storefronts                    1-4
     Section 08460 - Automatic Entrance Doors                              1-2
     Section 08520 - Aluminum Windows                                      1-3
     Section 08700 - Finish Hardware                                      1-11
     Section 08800 - Glass and Glazing                                     1-5
     Section 08960 - Sloped Glazing System                                 1-7

DIVISION 9 - FINISHES
---------------------
     Section 09260 - Gypsum Wallboard Systems                             1-10
     Section 09300 - Tile                                                 1-4
     Section 09510 - Suspended Acoustical Ceiling                          1-2
     Section 09650 - Resilient Flooring                                    1-4
     Section 09680 - Carpeting                                             1-4
     Section 09800 - Special Coatings                                      1-5
     Section 09900 - Painting                                              1-5
     Section 09955 - Wall Covering                                         1-3

DIVISION 10 -SPECIALTIES
------------------------
     Section 10350 - Flagpoles                                             1-3
     Section 10522 - Fire Extinguishers, Cabinets, and Accessories         1-2
     Section 10800 - Toilet and Bath Accessories                           1-3

DIVISIONS 11 - 12
-----------------
Not Used

DIVISION 13 - SPECIAL CONSTRUCTION
----------------------------------
     Section 13152 - Swimming Pools                                        1-5

DIVISION 14 - CONVEYING SYSTEMS
-------------------------------
     Section 14241 - Hydraulic Passenger Elevators                         1-9
     Section 14560 - Linen Chutes                                          1-2

DIVISION 15 - MECHANICAL
------------------------
     Section 15010 - Basic Mechanical Requirements                         1-8
     Section 15030 - Electrical Requirements for Mechanical Equipment      1-2
     Section 15050 - Basic Mechanical Materials and Methods                1-4
     Section 15051 - Excavation, Backfill and Surface Restoration          1-2
     Section 15055 - Piping Materials and Methods                          1-5
     Section 151 00 -Valves                                                1-3
     Section 15125 - Piping Expansion Joints                            1 Page
     Section 15130 - Flexible Pipe Connectors                           1 Page
     Section 15135 - Gauges and Meters                                  1 Page
     Section 15140 - Pipe Hangers and Supports                             1-3
     Section 15150 - Equipment Bases and Supports                       1 Page
     Section 15160 - Equipment Drives                                   1 Page
     Section 15190 - Mechanical Identification                             1-2
     Section 15260 - Pipe Insulation                                       1-2
     Section 15290 - Duct Insulation                                    1 Page
     Section 1531 0 - Fire Suppression Piping                              1-3
     Section 15325 - Fire Control Equipment                                1-2
     Section 15330 - Sprinkler Systems                                     1-3
     Section 15340 - Standpipe System and Hose                             1-2

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                               TABLE OF CONTENTS
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<PAGE>




     Section 15410 - Interior  Domestic  Water Piping                    1 Page 
     Section 15420 - Interior Drainage and Vent Systems                    1-2 
     Section 15430 - Plumbing  Specialties                                 1-4 
     Section 15440 - Plumbing  Fixtures                                    1-2  
     Section 15453 - Plumbing  Pumps - Water                             1 Page
     Section 15454 - Plumbing  Pumps - Drainage                          1 Page 
     Section 15458 - Domestic Water Heating                                1-3 
     Section 15488 - Interior  Fuel Gas Piping                           1 Page
     Section 15510 - Hydronic  Piping Systems                            1 Page 
     Section 15530A - Refrigerant  Piping                                  1-2 
     Section 15530B - Refrigerant Piping                                   1-2 
     Section 15575 - Breeching, Chimneys and Stacks                      1 Page
     Section 15675 - Air Cooled  Condensing Units                          1-2
     Section 15743 - Air Cooled Condenser                                  1-2  
     Section 15781 - Packaged  Terminal  Air  Conditioning  Unit           1-2
     Section 15788 - Pool Dehumidification Unit (AHI-1)                    1-4 
     Section 15832 - Heat Pump Units                                       1-2 
     Section 15834 - Unit Heaters                                          1-2 
     Section 15857 - Make-Up Air Unit                                      1-3
     Section 15860 - Fans                                                  1-3 
     Section 15870 - Roof Ventilators                                    1 Page 
     Section 15891 - Ductwork                                              1-5  
     Section 15910 - Ductwork  Accessories                                 1-2 
     Section 15940 - Air Outlets and Inlets                              1 Page 
     Section 15970 - Control  Wiring                                     1 Page 
     Section 15990 - Air Balancing                                         1-2

DIVISION 16 - ELECTRICAL
------------------------
     Section 16010 - Basic Electrical Requirements                         1-8
     Section 16050 - Basic Electrical Materials and Methods                1-4
     Section 16051 - Excavation, Backfill and Surface Restoration          1-2
     Section 16070 - Electrical Identification                             1-2
     Section 16080 - Specific Wiring Applications                          1-3
     Section 16110 - Conduit Systems                                       1-8
     Section 16113 - Communication Systems Conduits and Cabinets           1-2
     Section 16120 - Conductors                                            1-3
     Section 16140 - Wiring Devices and Coverplates                        1-2
     Section 16400 - Building Service - Secondary                        1 Page
     Section 16426 - Distribution Switchboard (Below 600 Volts)            1-3
     Section 16433 - Surge Protective Devices                              1-3
     Section 16440 - Disconnect Switches                                 1 Page
     Section 16450 - Grounding and Bonding                                 1-2
     Section 16470 - Panelboard                                            1-2
     Section 16477 - Fuses                                                 1-2
     Section 16480 - Motor Controllers                                     1-2
     Section 16495 - Automatic Transfer Switch                             1-2
     Section 16500 - Lighting Fixtures and Lamps                           1-3
     Section 16520 - Exterior Area Lighting                              1 Page
     Section 16535 - Exit and Emergency Lighting System                  1 Page
     Section 16625 - Emergency Power System                                1-6
     Section 16670 - Lightning Protection System                           1-2
     Section 16720 - Fire Alarm System                                     1-9




                                     96066
                               TABLE OF CONTENTS
                                     Page-3


<PAGE>




                                   EXHIBIT B
                                LIST OF DRAWINGS


CIVIL
-----

C-1   EXISTING CONDITION/DEMOLITION PLAN
C-2   GRADING PLAN
C-3   SITE PLAN
C-4   NOT USED
C-5   STORMWATER MANAGEMENT PLAN
C-6   STRIPPING AND SIGNAGE PLAN
C-7   EROSION AND SEDIMENTATION CONTROL PLAN
C-8   HIGHWAY ACCESS PERMIT
C-9   DETAIL SHEET

ARCHITECTURAL
-------------

A-1   TITLE SHEET
A-2   FIRST FLOOR PLAN
A-3   SECOND FLOOR PLAN
A-4   THIRD FLOOR PLAN
A-5   FOURTH FLOOR PLAN
A-6   ROOF PLAN AND DETAILS
A-7   DOOR SCHEDULE AND DETAILS
A-8   FINISH SCHEDULE, WINDOW SCHEDULE
A-9   ENLARGED UNIT PLANS AND WALL TYPES
A-1 0 ENLARGED LOBBY PLAN AND DETAILS
A-1 1 ENLARGED STAIR PLANS, SECTIONS AND DETAILS
A-12  ENLARGED POOL, LAUNDRY, MECHANICAL ROOMS AND DETAILS
A-13  EXTERIOR ELEVATIONS
A-14  BUILDING SECTION"A"AND SECTIONS
A-15  BUILDING SECTION "B'AND SECTIONS
A-1 6 REFLECTED CEILING PLANS
A-17  FRONT DESK DETAILS
A-18  CABINETRY DETAILS AND INTERIOR ELEVATIONS

STRUCTURAL
----------

S-1  GENERAL NOTES
S-2  FOUNDATION PLAN
S-3  FOUNDATION SECTIONS AND DETAILS
S-4  SECOND FLOOR FRAMING PLAN
S-5  THIRD AND FOURTH FLOOR FRAMING PLAN
S-6  ROOF FRAMING PLANS
S-7  MASONRY PIERS, PLANS, AND DETAILS
S-8  SECTIONS AND DETAILS
S-9  SECTIONS AND DETAILS
S-10 WALL REINFORCING ELEVATIONS








                                     96066
                               TABLE OF CONTENTS
                                     Page-4


<PAGE>


PLUMBING
--------

P1   LEGEND AND SCHEDULES
P2   UNDERGROUND UTILITIES PLAN
P3   FIRST FLOOR PLAN - PLUMBING
P4   SECOND FLOOR PLAN - PLUMBING
P5   THIRD FLOOR PLAN - PLUMBING
P6   FOURTH FLOOR PLAN - PLUMBING
P7   ROOF PLAN - PLUMBING
P8   DETAILS
P9   SOIL, WASTE AND VENT DIAGRAMS
P10  SOIL, WASTE AND VENT DIAGRAMS
P11  SOIL, WASTE AND VENT DIAGRAMS

MECHANICAL
----------

Hl-  HVAC FIRST FLOOR PLAN
H2-  HVAC SECOND FLOOR PLAN
H3-  HVAC THIRD FLOOR PLAN
H4-  HVAC FOURTH FLOOR PLAN
H5-  HVAC LEGEND AND DETAILS
H6-  HVAC SCHEDULES
H7-  HVAC EXHAUST/SUPPLY AIR RISER DIAGRAMS AND PIPING SCHEMATICS 

ELECTRICAL
----------

E-1   ELECTRICAL LEGEND AND SCHEDULES
E-2   ELECTRICAL SITE PLAN
E-3   ELECTRICAL FIRST FLOOR PLAN
E-4   ELECTRICAL SECOND FLOOR PLAN
E-5   ELECTRICAL THIRD FLOOR PLAN
E-6   ELECTRICAL FOURTH FLOOR PLAN
E-7   ELECTRICAL ROOF PLAN
E-8   ENLARGED LOBBY PLAN
E-9   ELECTRICAL SUITES
E-10  ELECTRICAL DETAILS
E-11  ELECTRICAL PANELBOARDS
E-12  ELECTRICAL 1-LINE AND SCHEDULES








                                     96066
                               TABLE OF CONTENTS
                                     Page-5


<PAGE>


                                 BRAUN & STEIDL
                              A R C H I T E C T S
--------------------------------------------------------------------------------

                                ADDDENDUM NO. 1

                                  Hampton Inn
                                    Erie, PA

                      Prepared for Essex Investment Group
                     Prepared by Braun & Steidl Architects
                               Project No. 96066

                               September 9, 1997

This  Addendum is a  modification  of the  Drawings and  Specifications  for the
referenced  project dated August 27, 1997, and is hereby  incorporated  into and
becomes part of said Contract Documents.  It is to be considered in the proposal
and covers additions and/or changes to the Drawings and Specifications.

ARCHITECTURAL
-------------

ITEM 1  A-12 - ENLARGED POOL/MECHANICAL, LAUNDRY ROOMS, AND DETAILS
        -----------------------------------------------------------
        A-15 - BUILDING SECTION
        -----------------------
        A.  As a  point  of  clarification,  the  pool  and  all of its  related
        components  as specified  in Section  13152 - Swimming  Pools,  is to be
        included in your bid.

ELECTRICAL
----------

ITEM 1. SHEET E-2
        ---------
        A. Duct section B/E2 - Add one (1) 4" I.D.  secondary  duct as indicated
        on revision Drawing No. E-2A.

ITEM 2. SHEET E-14
        ----------
        A. Main distribution  panel "MDP" Schedule - Change feeder to "seven (7)
        sets of (4-#500 KCMIL - in 4" c.) and 2-4" c. spare."

ITEM 3. SHEET E-13
        ----------
        A.  Panelboard  Schedule "LS" - Add a GFCI type circuit  breaker at pole
        position No. 5 serving a lighting circuit including lighting fixtures in
        the swimming pool room.


                                     96066
                                 ADDENDUM NO. I
                                     Page 1


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

1041 West Market  Street  Akron,  Ohio  44313-7143  (330)  864-7755  FAX:  (330)
864-3691



<PAGE>


        B.  Panelboard  Schedule "LA" - Add a GFCI type circuit  breaker at pole
        position  No. 16 and No. 18 serving  lighting  circuits in the  swimming
        pool room.

SPECIFICATIONS
--------------

ITEM 1. 10350 - FLAG POLES
        ------------------
        A. Revise Section 2.3 Fittings,  Paragraph B and  sub-paragraphs 1 and 2
        to: Internal Halyard, Winch System: Manually operated winch will control
        stop device and removable  handle,  stainless-steel  cable halyard,  and
        concealed revolving truck assembly with plastic-coated counterweight and
        sling.  Provide  flush access door secured with  cylinder  lock.  Finish
        truck assembly to match Flag Pole.

ITEM 2. 16400 - BUILDING SERVICE - SECONDARY
        ------------------------------------
        A. Paragraph 1.2 Division of Work,  sub-paragraph A. - delete "secondary
        conductors".
        B. Paragraph 1.2 Division of Work - add the following  sub-paragraph "F.
        The Electrical  Contractor  shall provide the secondary  conductors from
        the pad mounted  transformer to the main  distribution  panel. The power
        company will provide  terminators and make secondary  connections at the
        transformer."


                               END OF ADDENDUM 1








                                     96066
                                 ADDENDUM NO. 1
                                     Page 2


<PAGE>



                                 BRAUN & STEIDL
                              A R C H I T E C T S

                                 ADDENDUM NO. 2

                                  Hampton Inn
                                    Erie, PA

                      Prepared for Essex Investment Group
                     Prepared by Braun & Steidl Architects
                               Project No. 96066

                               September 16,1997

This  Addendum is a  modification  of the  Drawings and  Specifications  for the
referenced  project dated August 27, 1997, and is hereby  incorporated  into and
becomes part of said Contract Documents.  It is to be considered in the proposal
and covers additions and/or changes to the Drawings and Specifications.

ARCHITECTURAL
-------------

ITEM 1. A-8 - FINISH SCHEDULE, WINDOW SCHEDULE, AND WINDOW DETAILS
        ----------------------------------------------------------
        A. As a point of  clarification,  to  coordinate  with the overall floor
        plans. Revised finish schedule to read: Men's Toilet            #128A
                                                Women's Toilet          #128B
                                                Storage                 #124
                                                Delete linen storage    #13OA.

ITEM 2. A-18 - INTERIOR ELEVATORS
        -------------------------
        A-9A - ENLARGED UNIT PLANS AND WALL TYPES
        -----------------------------------------
        A. As a point  of  clarification,  on  Deluxe  King  and  Deluxe  Double
        guestrooms,  an  additional  elevation  "N" has been  added to show room
        cabinetry. See Sketch SK- 1 and SK-2.

ITEM 3. A-12 -ENLARGED POOL/MECHANICAL, LAUNDRY ROOM, AND DETAILS  
        ---------------------------------------------------------  
        A. Refer to revised sheet which clarifies  storage #124, Men's 128A, and
        Women's 128B, their respective dimensions and elevations.



                                      96066
                                 ADDENDUM NO. 2
                                     Page 1


--------------------------------------------------------------------------------
1041 West Market  Street  Akron,  Ohio  44313-7143  (330)  864-7755  FAX:  (330)
864-3691




<PAGE>



SPECIFICATIONS
--------------

ITEM 1. SECTION 08700 - FINISH HARDWARE
---------------------------------------
        A. As a point of clarification,  frame seals as manufactured by Door and
        Hardware  Systems  should be contacted  directly  for  national  account
        pricing and supply at (716) 235-8543.

ITEM 2. SECTION 10800 - TOILET AND BATH ACCESSORIES
---------------------------------------------------
        A. 2.3 Toilet and Bath Accessories:
           A.  Guestrooms,  revise Item 5, shower curtain rods,  heavy duty: to;
           Franklin  Brass,  Model 164, 1" satin  stainless steel with E162 FLCS
           flanges, concealed fasteners.



                               END OF ADDENDUM 2








                                     96066
                                 ADDENDUM NO. 2
                                     Page 2


<PAGE>



                                                                      ESSEX
                                                                  PARTNERS INC.
August 27, 1997


DiMarco Constructors Corp.
2595 Brighton-Henrietta Townline Road
Rochester, NY 14623

Attention: John DiMarco, Sr.

Re: Erie Hotel LLC
    c/o Essex Hospitality Associates IV L.P.
    Hampton Inn
    Old Oliver Road @ I-90
    Summit Township, Erie County, Pennsylvania

Dear John:

We are pleased to submit these documents for the above-referenced  project. Your
company  will be one of up to five  bidders on this  project.  Please  note that
these  documents  are  for  bid  purposes  only.  You  will  receive  a  set  of
construction drawings,  specifications and site drawings,  (the "Bid Documents")
directly from the architect.

Initially you will receive the architectural, structural and civil drawings. You
will receive the mechanical and electrical  drawings in about one week. Your bid
will be due  two  weeks  following  receipt  of the  mechanical  and  electrical
drawings.

The bidder  acknowledges that in submitting this bid, he has received,  read and
understands  the Bid  Documents,  has visited the site and is familiar  with the
local  conditions under which the work is to be performed and has correlated all
observations with the requirements of the Bid Documents.

Your work as well as your subcontractors must meet all local, state, and federal
building codes and standards and your bid as submitted reflects the willingness,
ability and costs and expenses to perform at such level.

Let me provide you with  information  which should  assist you in reviewing  the
documentation and preparing your bid:

1. Project Owner:                       Erie Hotel LLC
                                        c/o Essex Hospitality Associates IV L.P.
                                        100 Corporate Woods, Suite 300
                                        Rochester, NY 14623
                                        Telephone: (716) 272-2300
                                        Fax:(716) 272-2396

                                                             100 Corporate Woods
                                                             Rochester, NY 14623
                                                             716-272-2300 
                                                             Fax: 716-272-2396



SECURITIES OFFERED THROUGH ESSEX CAPITALMARKETS INC.                            
REGISTERED BROKER/DEALER MEMBER NASD 
--------------------------------------------------------------------------------

L 0 C A L L Y        B A S E D         G L 0 B A L L Y         C 0 N N E C T E D


<PAGE>




2.  Project Location:                 Old Oliver Road at I-90
                                      North Side of Oliver, South of I-90
                                      and West of Peach Street
                                      Summit Township
                                      County of Erie
                                      State of Pennsylvania

3.  Project Architect:                Braun & Steidl
                                      1041 West Market Street
                                      Akron., OH 44313
                                      Telephone: (330) 864-7755
                                      Fax: (330) 864-3691
                                      Contacts: Charles Schreckenberger 
                                      and John Wheeler

    Structural, Mechanical &
    Electrical Engineers:             Contact through Project Architect


4.  Consulting Engineers:

    -Civil Engineers                  Henry T. Welka & Associates
                                      3200 West 32nd Street
                                      Erie, PA 16506
                                      Telephone: (814) 833-3900
                                      Fax: (814) 833-9550
                                      Contact: James T. Welka

    -Environmental Engineers          Andrew Martin Associates, Inc.
                                      2700 West 21st Street
                                      Erie, PA 16506
                                      Telephone: (814) 838-9591
                                      Fax: (814) 838-9628
                                      Contact: oseph J. Pillitteri, M.A.

   -Geotechnical Engineers            Urban Engineers of Erie, Inc.
                                      502 West 7th Street
                                      Erie, PA 16502-1399
                                      Telephone: (814) 453-5702
                                      Fax: (814) 453-2020
                                      Contacts: LP. Gupta, P.E., Chief Engineer
                                      George H. Willis, P.E., Vice President


                                     - 2 -







5. City Offices:                      Summit Township
                                      8900 Old French Road
                                      Erie, PA 16509
                                      Telephone: (814) 868-9686
                                      Fax: (814) 864-0013

6. Construction Consultant:           Essex Partners Inc.
                                      100 Corporate Woods, Suite 300
                                      Rochester, NY 14623
                                      Telephone: (716) 272-2300
                                      Fax: (716) 272-2396
                                      Contact: Thomas W. Blank,
                                      Senior Vice President

7. Start  Date:                       Upon   issuance   of   Building   Permit,
                                      approximately October 1, 1997.

8. Completion Date:                   Turnover for FF&E fit-up June 1, 1998.
                                      Adjusted based on start date.

                                      Issuance of Certificate of Occupancy on or
                                      before  June 1,  1998.  Adjusted  based on
                                      start date.

9. Bid Format:                        The         dollar  amount   of       your
                                      bid should be  scheduled  according to the
                                      format attached hereto.  There should be a
                                      cost  allocation for each line item unless
                                      such work is not included in this project.
                                      No line item should  include your overhead
                                      and/or  profit,  which should be reflected
                                      in your construction management fee.

                                      A  preliminary   CPM  Schedule  should  be
                                      submitted with your bid.

                                      Performance  and Completion  Bond required
                                      covering and including labor and materials
                                      in an amount equal to 100% of the contract
                                      sum.




                                      - 3 -



<PAGE>






                                      Builder's  Risk  and  Liability  Insurance
                                      will   be   provided   by   the   Builder.
                                      Franchisor,  Project  Owner,  Construction
                                      Consultant  and  any  Construction  Lender
                                      will be added as additional insured.

                                      No Bidder  will be  permitted  to withdraw
                                      his bid within 30 days after the final due
                                      date.  Owner  reserves the right to extend
                                      the bid date up to 30 days,  to reject any
                                      and all bids  and to  waive  informalities
                                      herein.  Any  bid not  conforming  to this
                                      format will be rejected.

10.Special Conditions:                See Addendum attached.

11.Bid Date:                          All bids are to be  received by  September
                                      18, 1997 at 5:00 P.M. at the offices of
                                      Essex Partners Inc., 100 Corporate
                                      Woods, Suite 300, Rochester, NY 14623
                                      Attention: Thomas W. Blank, Senior
                                      Vice President.

                                      Contract  will  be  awarded  expeditiously
                                      thereafter subject to final  clarification
                                      and negotiation and issuance of a Building
                                      Permit.

                                      Facsimile copies will be accepted followed
                                      by a hard copy by overnight  mail the same
                                      day.

12.Contract  Form:                    This contract will be awarded on a cost
                                      plus fixed fee with a guaranteed maximum 
                                      price (AIA Form All).  Change  orders will
                                      not increase the  guaranteed maximum price

                                      There  will  be  a  50/50  split  of  cost
                                      savings   realized  below  the  guaranteed
                                      maximum price.



                                      - 4 -



<PAGE>



                                      Project Owner reserves the right to supply
                                      any equipment  and/or material to the job.
                                      Installation    may   be   by   Owner   or
                                      Contractor. Full credit shall be given for
                                      any   such   substitution   based  on  the
                                      appropriate line item value.


13.Changes:                           All Change Orders, Submittals, Shop
                                      Drawings, Substitutions and Approved
                                      Equals must be submitted to and
                                      approved by the Project Owner,
                                      Construction Consultant and Project
                                      Architect.

                                      There will be 5%  overhead  and/or  profit
                                      mark-up to any change  orders.  All change
                                      orders  will  be   supported   by  back-up
                                      invoices,    work   orders,    and   other
                                      documentation.

14.Bid Documents                      On file at:
   Contact:                           City Blue Print Company
                                      68 Scio Street
                                      Rochester, NY 14604
                                      Telephone: (716) 454-1695
                                      Fax: (716) 232-64S2 (Please contact
                                      City Blue Print Company directly to
                                      obtain additional copies of plans and 
                                      specs at your cost.)

In the event of  discrepancy  between  this letter and the Bid  Documents,  this
letter shall prevail.

                                      - 5 -


<PAGE>




I trust this information is sufficient for you to complete your bid. If you have
any  questions,  please  feel free to contact  the  undersigned.  In my absence,
please ask for Keith Shugerts, our Projects Coordinator.


Very truly yours,



Thomas W. Blank
Senior Vice President

TWB:ah

enclosures








                                      - 6 -



<PAGE>




                               SPECIAL CONDITIONS

1.    Contractor  will be responsible to obtain permits for  demolition,  secure
      utility  disconnects and demolish all structures on the site including the
      excavation and fill of footings  and/or  basements and hauling and dumping
      all material.

2.    Contractor  will be responsible to obtain permits and complete work at the
      intersection  of Old  Oliver  Road  and New  Oliver  Road  and  the  entry
      connection to the Church pursuant to the attached letter agreement.

3.    See reference  letter from Summit Township Sewer  Authority  regarding Old
      Oliver Road lift station. This work is included in the scope of your bid.

4.    See reference letter Erie County Conservation  District regarding notices,
      permits,  design,  structure  integrity,  and  installation of the control
      measures. This work is included in the scope of your bid.

5.    Verify with local code and include in your price if there is the necessity
      for a  standpipe  system in the hotel and siamese  connection  outside the
      hotel and the need for separate fire and domestic water lines and backflow
      preventors. A stubout for landscape irrigation will be necessary.

6.    Verify and  include in your price the  location,  length of utility  runs,
      size of tap and tap fees to be paid to various municipal agencies. It will
      be  necessary  to  determine  if water  supply is to be looped  from Peach
      Street to New Oliver Road.  Include all tap fees and the  building  permit
      fee in your bid.

7.    Wire for cable television and telephone  (including  elevator  telephones)
      including labor and material.

8.    All guest room doors and the exercise  room and meeting room doors to have
      Vingcard 2100 lock sets, the door to the back  office/administrative  area
      to have a push button  combination  lock,  and all others to have cylinder
      style lock sets.  The inside  (vestibule)  set of the front door system to
      also have 2 way voice  communication  and lock deactivation with the front
      desk.

9.    Provide panic hardware  conforming  with  applicable  local,  regional and
      national  building  codes  (exterior  and corridor  doors),  with electric
      strikes and remote readers at all exterior doors (inside  vestibule at the
      front door).




                                     - 7 -


<PAGE>


10.   Contractor to install all vinyl wall covering.  Contractor to provide take
      offs for all wall covering used  throughout the hotel.  Owner will provide
      name of the manufacturer, design number and match, if any.

11.   Carpet  installation  price to include  cutting  and binding of the carpet
      base  to be used  throughout  the  hotel  in all  areas  where  carpet  is
      installed.  Contractor  to provide'  carpet  takeoffs and seaming plans to
      owner for both guest rooms and public  space.  Carpet not to be  installed
      until  just  prior to Owner's  installation  of FF&E.  It will be a double
      stick pad and pattern carpet with border and header.

12.   Elevator doors and frames to be painted with color chosen by Owner.

13.   The Contractor shall be responsible to secure plans,  specifications,  and
      shop drawings from a qualified pool  contractor to install the pool system
      including but not limited to piping,  filtration system, pool lighting and
      all operating and safety  signage and equipment.  Contractor  shall secure
      all permits and licenses for construction and operation of the pool.

14.   Contractor to provide conduit wire,  circuit  breakers,  and conductor for
      signs on the  building,  entryway  to the  site,  and a pole  sign.  Final
      locations to be selected by Owner. HOA switching should be added as needed
      to the site light contractor.

15.   Dumpsters will be provided by General  Contractor through the opening date
      of the hotel.

16.   Contractor  will  accept  delivery  and  distribute  into  the  hotel  the
      expendables,  soft goods and FF&E.  Owner will be responsible for assembly
      and  installation of the FF&E.  Washers,  dryers and ice machines shall be
      moved  into the  hotel to the  areas  in which  they are to be  installed.
      General  Contractor  to install  bolts  into  concrete  pad to  anticipate
      installation of washers. Templates and bolts to be provided by Owner.

17.   Contractor will install appliances in the public area and suites including
      but not limited to garbage disposal, microwave, dishwasher, and coffee and
      juice machine.

18.   Allowances:

        $75,000 landscape and irrigation
        $75,000 exterior signage allowance
        $ 7,500 interior signage allowance

        The above costs shall be incorporated into the contractor's bid.


                                     - 8 -

<PAGE>


19.   The Bid  Documents  are being  simultaneously  delivered  to the  Building
      Department  Summit  Township  and  Pennsylvania  Department  of Labor  and
      Industry.  Any changes required by their review will be provided to you by
      Addendum.

20.   The  Contractor  shall  achieve   Substantial   Completion  and  Permanent
      Certificate of Occupancy on or before June 1, 1998.


















                                     - 9 -


<PAGE>



                        SUMMIT TOWNSHIP SEWER AUTHORITY
                                  ERIE COUNTY
                                  PENNSYLVANIA
                                      1968

                              8890 Old French Road
                         Erie, Pennsylvania 16509-5459
                              Phone (814) 868-4495
                               Fax (814) 866-5821

June 25, 1997


Thomas W. Blank - Chief Operating Officer
Hotel Division
Essex Partners Inc.
100 Corporate Woods, Suite 300
Rochester, NY 14623

Re:     Existing Lift Station @ Old Oliver Rd. - Hampton Inn
        North Side of Oliver Road,  South of I-90 and West of
        Peach Street Summit Township


Dear Mr. Blank:

After a review of the existing  lift station at Old Oliver Road,  this letter is
to inform you of improvements  that will be necessary prior to connection of the
proposed Hampton Inn. The Summit Township Sewer Authority has recently installed
a relief sewer that bypass the Old Oliver Road lift station- The relief line was
installed to make use of gravity as opposed to pumping.  The lift station  while
still  serviceable is in need of some  improvements  in order to accommodate the
increased  flow that you desire.  The following is the minimum  needed to permit
your flows to enter the lift station:

     1 - 1 1/2 HP pump; Estimated Cost        $ 2,300.00
     1 - Low level alarm;  Estimated Cost     $   300.00
     1 - Bar screen manhole; Estimated Cost   $   900.00
             TOTAL COST                       $ 3,500.00

The 1 1/2 HP pump is needed because the STSA does not have spare pump currently.
No spare pump was required with the reduced flow entering the lift station after
the relief sewer was installed.  The low level alarm prevents  unnecessary  pump
operation  when water levels are low and  safeguards  the pumps.  The bar screen
manhole traps/collects solids/rags prior to entering the system. The bar manhole
shall be  constructed  on the Hampton Inn property and be  maintained by Hampton
Inn.  These  improvements  will  be at no  cost  to the  Summit  Township  Sewer
Authority.

Please  submit your detailed site plans for Authority for review as soon as they
become  available.  Please  feel  free to call me at  868-4495  if you  have any
questions or if you desire any additional information.

                                        Sincerely,

                                        /s/ William C. Steff, P.E.
                                        William C. Steff, P.E.
                                        Manager

        
WCS
ENCL.: Bar Screen Manhole Detail
cc:    Mark Welka, Henry T. Welka and Associates
       file


<PAGE>



                       Erie County Conservation District
   12723 ROUTE 19 * P.O. BOX 801 * WATERFORD, PA 16441 * PHONE (814) 796-4203


                                             250029797
                                             July 14, 1997



TO:   Essex Investment Group.  Inc.
      100 Corporate Woods, Suite 300
      Rochester, NY 14623

RE:   Hampton Inn, Summit Twp.,  Erie County

SUBJECT: SOIL EROSION & SEDIMENT POLLUTION CONTROL PLAN

The plan has been reviewed and is adequate to meet the  requirements of PA TITLE
25, Chapter 102, Erosion Control.

The Conservation  District has reviewed this plan solely to determine whether it
is  adequate  to satisfy  the  requirements  of 25 PA Code 102.1 et.  Seq.,  the
Erosion Control Regulations of the Department of Environmental  Protection. By a
determination that the plan is adequate to meet those requirements,  neither the
Conservation  District  nor  the  County  assumes  any  responsibility  for  the
implementation of the plan or the  proper  construction  and  operation  of the
facilities  contained  in  the  plan.  The  design,   structure  integrity,  and
installation  of the control  measures are the  responsibility  of the landowner
and/or the earthmover.  Before any  construction  or earthmoving may begin,  the
appropriate and necessary local,  state and federal permits must be secured from
the agency having specific permitting authority.

A copy of the Soil Erosion and Sediment Pollution Control Plan must be available
at the site of the earthmoving  activity during  construction and until the site
is stabilized.

Comments on the plan are enclosed (See page 2).

Your  Conservation   District  stands  ready  to  assist  you  in  solving  your
conservation  problems.  If you have any questions  regarding  this or any other
projects, please contact our office at the above address and telephone number.


                                         Sincerely,

                                         s/s Gene R. Clemente
                                         Gene R. Clemente              
                                         District  Technician          
                                         ERIE CO. CONSERVATION DISTRICT
                                         

CC:   Henry T. Welka & Assoc.



                  CONSERVATION * DEVELOPMENT * SELF GOVERNMENT



<PAGE>


                                    COMMENTS

1.    This approval does not give any property rights,  either in real estate or
      material nor any exclusive privileges,  nor shall it be construed to grant
      or confer any right, title, easement, or interest in, to, or over any land
      belonging to the Commonwealth of  Pennsylvania;  neither does it authorize
      any injury to private  property  or invasion  of private  rights,  nor any
      infringement of Federal, State, or Local laws or regulations;  nor does it
      obviate the necessity of obtaining Federal assent when necessary.

2.    A copy of the approval  letter and the Soil  Erosion & Sediment  Pollution
      Control Plan must be kept on site at all times during construction.

3.    You must notify the Conservation  District (in writing) five days prior to
      the start of earthmoving project.

4.    The Soil Erosion & Sediment  Pollution Control Plan must be made available
      upon  request  of  an  inspector  from  the  Department  of  Environmental
      Resources, Conservation District, or the Fish Commission.



<PAGE>



                                                                         ESSEX 
                                                                 PARTNERS INC.

May 12, 1997


Leroy W. Gross
Church Council Secretary
First Assembly of God
8150 Oliver Road
Erie, PA 16509

RE:     Intersection of Oliver Road and Old Oliver Road


Dear Leroy:

Thank you for the time we spent on Wednesday May 7, 1997.  Based on our meeting,
I agreed to put in writing our agreement  regarding the Church's conveyance of a
piece of land to Summit  Township in order to reconfigure  the  above-referenced
intersection. The agreement is as follows:

1.    The Church agrees to convey and/or  dedicate the referenced  piece of land
      up to 7,000  square  feet to Summit  Township as such piece is shown on an
      instrument  survey map entitled Oliver Road  Improvements  dated March 13,
      1997 by Henry T. Welka Associates.

2.    Essex Hospitality Associates IV L.P. ("Essex") will pay the sum of $10,000
      in  consideration  for conveyance of the land to Summit  Township;  $5,000
      will be paid on the first day of the month following  opening of its hotel
      (Hampton Inn  developed at Old Oliver Road and Route 19) and the remaining
      $5,000 one year  thereafter.  A promissory note evidencing this obligation
      will be executed at the time of the conveyance.

3.    Essex will  provide a curb cut and paved  access road  (approximately  100
      feet long and 22 feet  wide)  from the  improved  Old  Oliver  Road to the
      eastern most point of the Church parking lot.

4.    Essex will provide a maximum of two room nights per week  (non-cumulative)
      on an as available  basis for speakers and special guests of the Church at
      one half the prevailing  rate for such room. This  consideration  will run
      for a period of five years from the hotel  opening  date or until the sale
      of the hotel to a third party, whichever first occurs.

5.    Essex  will make  application  to place a marque  directional  sign at the
      corner of Oliver Road and Peach  Street,  and will  provide  and pay for a
      position  for the Church on the sign as long as it is  approved  by Summit
      Township.

                                                            100 Corporate Woods
                                                            Rochester, NY 14623
SECURITIES OFFERED THROUGH ESSEX CAPITALMARKETS INC.        716-272-2300
                REGISTERED BROKER/DEALER MEMBER NASD        Fax: 716-272-2396


L 0 C A L L Y       B A S E D        G L 0 B A L L Y          C 0 N N E C T E D


<PAGE>



Leroy W. Gross
May 12, 1997
Page 2


6.    This letter is intended to bind the parties hereto,  however, in the event
      of a written  request by either party,  the terms hereof shall be embodied
      in a definitive agreement approved by legal counsel for both sides.

Leroy, I appreciate your willingness to act quickly on this matter since we hope
to have  all  contingencies  resolved  next  week.  This  will  allow us to seek
subdivision approval with Summit Township prior to the end of May.

I trust this meets with your approval.  If you have any  questions,  please feel
free to contact  me. I hope to  receive  this  executed  letter  following  your
Wednesday, May 14, 1997 meeting.


Sincerely

ESSEX HOSPITALITY ASSOCIATES  IV LP.
by:  Essex Partners, Inc., General Partner


/s/ Thomas W. Blank
Thomas W. Blank
Chief Operating Officer
Hotel Division

TWB:ah


Accepted and Agreed to by the
First Assembly of God
this 14th day of  May, 1997



/s/ Leroy W. Gross
Leroy W. Gross, Church Council Secretary


<PAGE>



                           DiMarco Constructors Corp.
                     2595 Brighton Henrietta Town Line Road
                           Rochester, Now York 14823

               To:       Tom Blank
          Company:       Essex Investment Group
            Phone:
              Fax:       272-2396

             From:       Hal Smallwood

          Company:       DIMARCO CONSTRUCTORS, CORP.
            Phone:       (716) 272-7760
              Fax:       (716) 272-1860

             Date:       9/19/97

                        Pages Including this cover page:     2

Comments:

Tom,
Attached is the breakdown of our quote for the Hampton Inn, Erie, Pa.

Thank you.

Hal Smallwood


<PAGE>

<TABLE>
<CAPTION>
                           DIMARCO CONSTRUCTORS CORP.

                                   BID FORMAT
                             Hampton Inn, Erie, Pa
<S>                               <C>           <C>                                         <C>

     GENERAL CONDITIONS:                              FINISHES:
Supervision                           $95,000    Gypsum Drywall                               $475,000
Temporary Toilets                      $1,800    Tile                                          $68,000
Temporary Phones                       $3,500    Cultured Marble                               $83,000
Temporary Office Trailer               $5,700    Acoustic Ceilings                            Included
Temporary Electric                     $9,500    Acoustic Insulation                          Included
Temporary Water                        $1,700    Resilient Flooring                            $37,000
Construction Testing                   $6,000    Painting                                      $98,000
Equipment Rental                       $8,500    Wall covering - install                      Included
Site Engineering                       $2,100    Carpet Base - install                        Included
Insurance                            Included      TOTAL FINISHES                             $761,000
Project Service                      Included
Winter Protection                     $83,000         SPECIALTIES:
Other                                 $73,403    Miscellaneous Specialties
  TOTAL GENERAL CONDITIONS           $290,603    Louvers and Vents                            Included
                                                 Wall and Corner Guards                         $2,500
     SITE WORK:                                  Flagpole                                       $2,700
Site Preparation                      $37,000    Fire Extinguishers, Cab & Access.              $4,200
Earthwork                             $62,000    Toilet & Bath Accessories                     $25,600
Trenching/Backfilling/Compacting      $31,000      TOTAL SPECIALTIES                           $35,000
Termite Protection                     $4,500
Select Foundation Bedding & Backfill  $17,000         EQUIPMENT
Wood Fences & Gates                              Chutes                                         $4,900
Asphalt Concrete Paving              $130,000      TOTAL EQUIPMENT                              $4,900
Portland Cement Concrete Paving       $14,000
Piped Utilities                       $49,000         FURNISHINGS
Water System                           $6,000    Rugs & Mats                                    $4,500
  TOTAL SITE WORK                    $351,000      TOTAL FURNISHINGS                            $4,500

     CONCRETE                                         CONVEYING SYSTEM
Cast-in-Place Concrete               $183,315    Hydraulic Passenger Elevator                  $78,000
Precast Concrete Deck                $318,500      TOTAL CONVEYING SYSTEM                      $78,000
  TOTAL CONCRETE                     $501,815
                                                      MECHANICAL
     MASONRY                                     Plumbing                                     $295,000
Mortar                               Included    Fire Protection                               $63,545
Masonry Accessories                  Included    Heating, Ventilating, A/C                    $280,000
Concrete Unit Masonry                $207,800    Air Distribution                             Included
  TOTAL MASONRY                      $207,800    Controls                                     Included
                                                   TOTAL MECHANICAL                           $638,545
     METALS                                     
Structural Steel                      $95,300         ELECTRICAL
Steel Joists                         Included    Electrical-General Provisions                $395,000
Metal Decking                        Included    Basic Materials & Methods                    Included
Cold-Formed Metal Framing          In Drywall    Service & Distribution                       Included
Metal Fabrications                   Included    Lighting Fixtures                            Included
Metal Stairs                         Included    Emergency Generator                          Included
  TOTAL METALS                        $95,300    Fire Alarm Voice Communications System       Included
                                                 Conduit System & Pull Wire for Telephone     Included
     WOOD AND PLASTIC                            Conduit System & Pull Wire for Television          $0
Rough  Carpentry                      $35,000      TOTAL ELECTRICAL                           $395,000
Finish  Carpentry                     $26,000
Architectural Woodwork                $74,000
   TOTAL WOOD AND PLASTIC            $135,000 

     THERMAL/MOISTURE PROTECT                         OTHER
Waterproofing                        Included    FF&E (Install Owner Supplied Eq.)             $16,000
Dampproofing                         Included    Swimming Pool                                 $30,000
Plastic Vapor Banter                 Included    Building Permit                              Included
Building Insulation                   $43,000    Performance Bond                         Not Included
Roof Insulation                      Included    Permit                                       Included
Exterior Insul and Finish System     $148,000    Construction Management Fee                        $0
Firestopping                         Included      TOTAL OTHER                                 $46,000
Preformed Metal Roofing               $46,000
Elastic Sheet Roofing                $127,000         ALLOWANCES
Flashing and Sheet Metal             Included    Interior Signage Allowance                     $7,500
Roof Accessories                     Included    Exterior Signage Allowance                    $75,000
Sealants and Caulking                 $16,000    Landscape & Irrigation Allowance              $75,000
TOTAL THERMAL/MOISTURE               $380,000      TOTAL ALLOWANCE                            $157,500

     DOORS & WINDOWS                                  
Metal Doors & Frames                 $100,900
Wood Doors                            $12,100
Access Doors                           $1,600
Mirrored Doors                        $12,000
Aluminum Entrances & Storefronts      $97,000
Structured Windows                   Included
Finish Hardware                       $16,700
Electronic Locks                      $32,500
Automatic Door Equipment              $11,000
Glasing/Sloped                        $71,000
TOTAL DOORS AND WINDOWS              $354,800
                                                 TOTAL BID AMOUNT                           $4,441,863

</TABLE>


<PAGE>


<TABLE>
<CAPTION>
                             CONTRACTOR REVISED BID
                                October 13, 1997

CONTINUATION SHEET                AIA DOCUMENT G703         Page 2 of pages 2
AIA Document G702, APPLICATION AND CERTIFICATE FOR PAYMENT, containing
Contractor's Signed Certificate is attached,
In tabulations below,  amounts are stated to the nearest dollar,
Use Column I on Contracts where variable retainage for line items may apply.

APPLICATION NUMBER:         1
APPLICATION DATE:           10/31/97
PERIOD TO:                  10/31/97
ARCHITECT'S PROJECT NO:     97072

<S>  <C>                             <C>             <C>          <C>         <C>         <C>         <C>      <C>        <C>
------------------------------------------------------------------------------------------------------------------------------------
  A             B                           C            D           E           F            G                   H            I
------------------------------------------------------------------------------------------------------------------------------------
Item   Description of Work              Scheduled        Work Completed       Materials     Total        %     Balance     Retainage
No                                        Value         From        This      Presently   Completed    (G +      To
                                                      Previous     Period      Stored     And Stored     C)    Finish
                                                                              (Not in       To Date            (C - G)
                                                                               D or E)    (D + E + F)
------------------------------------------------------------------------------------------------------------------------------------
 1  General Conditions                 $230,603.00     $0.00       $0.00       $0.00        $0.00      0.00%     230,603.00    0.00
 2  Site Preparation                    $28,000.00     $0.00       $0.00       $0.00        $0.00      0.00%      28,000.00    0.00
 3  Earthwork                           $62,000.00     $0.00       $0.00       $0.00        $0.00      0.00%      62,000.00    0.00
 4  Trenching/Backfilling/Compact       $31,000.00     $0.00       $0.00       $0.00        $0.00      0.00%      31,000.00    0.00
 5  Paving                             $144,000.00     $0.00       $0.00       $0.00        $0.00      0.00%     144,000.00    0.00
 6  Select Foundation Backfill          $17,500.00     $0.00       $0.00       $0.00        $0.00      0.00%      17,500.00    0.00
 7  Utilities                           $55,000.00     $0.00       $0.00       $0.00        $0.00      0.00%      55,000.00    0.00
 8  Cast-In-Place Concrete             $181,910.00     $0.00       $0.00       $0.00        $0.00      0.00%     181,910.00    0.00
 9  Pre-Cast Decks                     $306,184.00     $0.00       $0.00       $0.00        $0.00      0.00%     306,184.00    0.00
10  Concrete Unit Masonry              $207,900.00     $0.00       $0.00       $0.00        $0.00      0.00%     207,900.00    0.00
11  Structural Steel                    $95,300.00     $0.00       $0.00       $0.00        $0.00      0.00%      95,300.00    0.00
12  Rough Carpentry                     $38,000.00     $0.00       $0.00       $0.00        $0.00      0.00%      38,000.00    0.00
13  Finish Carpentry                    $98,756.00     $0.00       $0.00       $0.00        $0.00      0.00%      98,756.00    0.00
14  Building Insulation                 $40,074.00     $0.00       $0.00       $0.00        $0.00      0.00%      40,074.00    0.00
15  E.I.F.S.                           $145,000.00     $0.00       $0.00       $0.00        $0.00      0.00%     145,000.00    0.00
16  Roofing                            $161,500.00     $0.00       $0.00       $0.00        $0.00      0.00%     161,500.00    0.00
17  Sealants & Caulking                 $16,600.00     $0.00       $0.00       $0.00        $0.00      0.00%      16,600.00    0.00
18  Metal Doors & Frames               $110,100.00     $0.00       $0.00       $0.00        $0.00      0.00%     110,100.00    0.00
19  Access Doors                         $1,513.00     $0.00       $0.00       $0.00        $0.00      0.00%       1,513.00    0.00
20  Mirrored Doors                      $12,000.00     $0.00       $0.00       $0.00        $0.00      0.00%      12,000.00    0.00
21  Aluminum Entrances & Storefronts   $108,000.00     $0.00       $0.00       $0.00        $0.00      0.00%     108,000.00    0.00
22  Finish Hardware                     $18,700.00     $0.00       $0.00       $0.00        $0.00      0.00%      18,700.00    0.00
23  Electronic Locks                    $32,500.00     $0.00       $0.00       $0.00        $0.00      0.00%      32,500.00    0.00
24  Glazing/Sloped                      $71,000.00     $0.00       $0.00       $0.00        $0.00      0.00%      71,000.00    0.00
25  Gypsum Drywall                     $475,000.00     $0.00       $0.00       $0.00        $0.00      0.00%     475,000.00    0.00
26  Tile                                $68,000.00     $0.00       $0.00       $0.00        $0.00      0.00%      68,000.00    0.00
27  Cultured Marble                     $82,798.00     $0.00       $0.00       $0.00        $0.00      0.00%      82,798.00    0.00
28  Resilient Flooring                  $35,089.00     $0.00       $0.00       $0.00        $0.00      0.00%      35,089.00    0.00
29  Painting                            $95,511.00     $0.00       $0.00       $0.00        $0.00      0.00%      95,511.00    0.00
30  Specialties                          $9,400.00     $0.00       $0.00       $0.00        $0.00      0.00%       9,400.00    0.00
31  Toilet & Bath Accessories           $25,600.00     $0.00       $0.00       $0.00        $0.00      0.00%      25,600.00    0.00
32  Chutes                               $4,800.00     $0.00       $0.00       $0.00        $0.00      0.00%       4,800.00    0.00
33  Elevator                            $74,633.00     $0.00       $0.00       $0.00        $0.00      0.00%      74,633.00    0.00
34  Plumbing                           $270,000.00     $0.00       $0.00       $0.00        $0.00      0.00%     270,000.00    0.00
35  Fire Protection                     $63,545.00     $0.00       $0.00       $0.00        $0.00      0.00%      63,545.00    0.00
36  HVAC                               $280,000.00     $0.00       $0.00       $0.00        $0.00      0.00%     280,000.00    0.00
37  Electrical                         $395,000.00     $0.00       $0.00       $0.00        $0.00      0.00%     395,000.00    0.00
38  FF&E                                 $3,000.00     $0.00       $0.00       $0.00        $0.00      0.00%       3,000.00    0.00
39  Allowance-Signage                   $82,500.00     $0.00       $0.00       $0.00        $0.00      0.00%      82,500.00    0.00
40  Allowance-Landscaping               $75,000.00     $0.00       $0.00       $0.00        $0.00      0.00%      75,000.00    0.00
41  Swimming Pool                       $27,584.00     $0.00       $0.00       $0.00        $0.00      0.00%      27,584.00    0.00
                                                                                                                               

<PAGE>



CONTINUATION SHEET                AIA DOCUMENT G703         Page 2 of pages 2
AIA Document G702, APPLICATION AND CERTIFICATE FOR PAYMENT, containing
Contractor's Signed Certificate is attached,
In tabulations below,  amounts are stated to the nearest dollar,
Use Column I on Contracts where variable retainage for line items may apply.

APPLICATION NUMBER:         1
APPLICATION DATE:           10/31/97
PERIOD TO:                  10/31/97
ARCHITECT'S PROJECT NO:     97072

------------------------------------------------------------------------------------------------------------------------------------
  A             B                           C            D           E           F            G                   H            I
------------------------------------------------------------------------------------------------------------------------------------
Item   Description of Work              Scheduled        Work Completed       Materials     Total        %     Balance     Retainage
No                                        Value         From        This      Presently   Completed    (G +      To
                                                      Previous     Period      Stored     And Stored     C)    Finish
                                                                              (Not in       To Date            (C - G)
                                                                               D or E)    (D + E + F)
------------------------------------------------------------------------------------------------------------------------------------
                                                       $0.00       $0.00       $0.00        $0.00      0.00%     0.00        0.00 
                                                       $0.00       $0.00       $0.00        $0.00      0.00%     0.00        0.00
                                                       $0.00       $0.00       $0.00        $0.00      0.00%     0.00        0.00
                                                       $0.00       $0.00       $0.00        $0.00      0.00%     0.00        0.00 
------------------------------------------------------------------------------------------------------------------------------------
                                      4,280,000.00     $0.00       $0.00       $0.00        $0.00      0.00%   4,280,000.00    0.00 
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>



<PAGE>


                             DEVELOPER'S AGREEMENT

     THIS AGREEMENT, made this 24th day of January, 1997, by and between:

                              Essex Partners Inc.
                         100 Corporate Woods, Suite 300
                              Rochester, MY 14623

(hereinafter collectively referred to as "Developer"),

                                      AND

     SUMMIT TOWNSHIP WATER AUTHORITY, a Pennsylvania  municipal authority,  with
offices at 8900 Old French Road, Erie, Pennsylvania  (hereinafter referred to as
the "Authority").

                                   BACKGROUND

     A. The  Developer  is the owner of certain  real  estate  located in Summit
Township,   Pennsylvania  and  bearing  Erie  County  Tax  Identification
Nos. 40-17-73-pt 2, 2.01, 2.02.

     B. The Developer  intends to construct a 98-room hotel on said property and
the Developer desires to serve this property with a public water supply system.

     C. All parties hereto have agreed upon certain terms and  conditions  under
which said public water system shall be constructed.


                                     - 1 -

<PAGE>


                                    AGREEMENT

     NOW  THEREFORE:  in  consideration  of the  intention  of the parties to be
legally bound hereby and other good and valuable  consideration,  the parties to
this Agreement hereby agree as follows:

     1. The  Developer  shall pay all costs for the  design of the  contemplated
100-room hotel  including  obtaining all required  permits.  The Authority shall
review and approve the  proposed  design  prior to start of  construction.  Upon
approval  of  such  plans  by  the  Authority,   which  approval  shall  not  be
unreasonably withheld,  Developer agrees to construct or cause to be constructed
the public water  .system in  compliance  with such  approved  plans.  Developer
further  agrees  that such  construction  shall be in  accordance  with  general
specifications for public water mains and appurtenances..  prepared and supplied
by Hill Engineering, Inc., which specifications are likewise incorporated herein
by reference.  Construction  shall be subject to inspection  and approval by the
Authority,  or any  accredited  agents  or  representatives  of  the  Authority.

     2. Developer further understands and agrees that they will assume all costs
and expenses in  connection  with the  construction  of the System and they will
deposit  $2,500 with the Authority to be applied to expenses which the Authority
will  incur  for  engineering,  administrative  and  legal  work-  performed  in
relationship to such construction.



                                      - 2 -


<PAGE>


     3.  Developer  understands  and agrees  that they will assume all costs and
expenses in connection with the construction of the proposed project.

     4. If the Developer undertakes to construct the water system as contractor,
Developer  agrees to  indemnify  and save  harmless  the  Authority  and  Summit
Township  from any and all claims for personal  injury to any person  whether or
not an employee of  Developer,  Authority or Summit  Township,  and likewise for
property damage of any person including Developer, Authority, or Summit Township
arising out of or related to the  construction  of the water system which is the
subject of this  Agreement,  where the injured party alleges and proves that the
loss is  attributable  in whole or in part to any ant of omission or commission,
breach of duty or  negligence  on the part of the  Developer or their agents and
servants.  Such indemnity shall hold Authority and Summit Township harmless from
any and all suits,  costs,  expenses  of defense  (including  attorney's  fees),
judgments and decrees.  In the event the Developer enters into a contract with a
third  party  as  contractor  for  the  construction   contemplated  under  this
Agreement,  then the  Developer  agrees that it will require a specific  term or
condition  within such agreement  providing for the same manner of indemnity and
hold  handless  language  between  such  contractor,  the  Authority  and Summit
Township.  The indemnification  provided through this section does not extend to
liability based upon the acts, omissions, breaches of duty, or negligence of the
Authority,

                                     - 3 -

<PAGE>


Summit Township of any of their agents,  officers,  servants or contractors.

5. In the event the Developer has undertaken the construction referred to herein
as  contractor,  Developer  agrees to  procure  comprehensive  public  liability
insurance in the amount of not less than  $1,000,000 for injury or death and not
less than  $300,000  for property  damage  containing  coverage for  contractual
liabilities  undertaken by Developer or Landowners under the indemnity provision
of this Agreement  satisfactory to the Authority.  In the event Developer enters
into a contract for the  construction  of the water  system with an  independent
contractor,  then the  Developer  agrees that it will require a specific term or
condition  within  such  agreement  obligating  the  contractor  to  obtain  the
insurance upon the same terms and conditions.

6.  Developer  hereby agrees to grant to Authority  the following  rights to the
property.

7. This Agreement  shall be binding on all parties  hereto,  their  assignees or
successors in title. 

8. This  Agreement  shall be  governed  under  and  subject  to  the laws of the
Commonwealth of Pennsylvania.

9. This Agreement  constitutes the entire agreement  between the parties and may
not be altered or amended without the consent of all parties hereto.


                                     - 4 -


<PAGE>



THIS AGREEMENT,  made and executed by the undersigned parties with the intent to
be legally bound hereby.


    ATTEST:                         SUMMIT TOWNSHIP WATER AUTHORITY

    /s/ Arthur H. Kurtz             By /s/ James R. Kupetz
    ----------------------------       -----------------------------
    Arthur H. Kurtz, Secretary         James R. Kupetz, Chairman


    WITNESS:                         DEVELOPER: Essex Partners Inc.


    /s/ Jerald P. Eichelberger              /s/ Thomas W. Blank
    ---------------------------------       ----------------------------------
    Jerald P. Eichelberger, Secretary       Thomas W. Blank, Senior V.P.


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

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

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




                                      - 5 -


<PAGE>



                                   AGREEMENT


     THIS AGREEMENT,  made this 30th day of January,  1997, by and between ESSEX
PARTNERS, INC. (hereinafter called "Developer")

                                      AND

     SUMMIT TOWNSHIP SEWER AUTHORITY (hereinafter called "Authority").

     WITNESSETH:

     WHEREAS,  Developer is the owner of certain  real estate  located in Summit
Township, Erie County, Pennsylvania, more particularly described in  Exhibit "A"
attached  hereto and made a part hereof;  and

     WHEREAS,  Developer  is desirous of serving this  property  with a sanitary
sewer  system  ("System")  in  accordance  with  plans  to be  prepared  by  the
Developer's  Consulting  Engineer;  and

     WHEREAS,  all parties  hereto have agreed upon certain terms and conditions
under which said System shall be constructed;  NOW, THEREFORE,  in consideration
of their  intent  to be  legally  bound  hereby  and  other  good  and  valuable
consideration, the parties hereto agree as follows:

     1.  Developer  understands  and agrees that it shall  provide the Authority
contemporaneously  with this  executed  Agreement a copy of the Summit  Township
Developer's Agreement executed by it and Summit Township.


                                     - 1 -

<PAGE>


     2.  Developer  agrees that prior to  commencement  of  construction  of the
System it shall submit their plans to the Consulting  Engineer for the Authority
and to the  Authority.  Upon approval of said plans by the  Authority,  which is
solely  within the  Authority's  discretion,  Developer  agrees to construct the
System in  compliance  with  said  plans.  Developer  further  agrees  that such
construction  shall be in  accordance  with general  specifications  for gravity
sewers, drains and appurtenances,  prepared by Hill Engineering,  as well as the
Township of Summit's specifications covering backfill,  which specifications are
likewise incorporated herein by reference. Such construction shall be subject to
inspection   and   approval   by   Authority   or  any   accredited   agents  or
representatives.

     Upon the completion of the  construction,  the Developer  shall furnish the
Authority  with "As Built" plans  showing  actual  locations  of all  facilities
constructed hereunder,  including lateral connections. The "As Built" plans must
be similar or equal to a double  matted mylar film  drawing to allow  subsequent
drawings by the Authority.

     3. Developer  further  understands and agrees that it will assume all costs
and  expenses  in  connection  with the  construction  of the System and it will
deposit  $2,500 with the Authority to be applied to expenses which the Authority
will  incur  for  engineering,   administrative  and  legal  work  performed  in
relationship to such construction. Developer specifically understands and agrees
that it shall restore the surface of any public or private property or way


                                     - 2 -

<PAGE>


through  which the System shall be  constructed  to the  condition  that existed
prior thereto.

     5. Upon  completion of the work of  construction  and final  inspection and
acceptance by Authority,  ownership of said System,  including all appurtenances
thereto  shall vest in the  Authority,  and all  right,  title and  interest  of
Developer therein shall cease and terminate; it being the intention of Developer
to dedicate said System to public use, and the acceptance by Authority  shall be
deemed to be acceptance of said dedication.

6.  Developer  also  agrees  that it will  post or cause to be  posted  with the
Authority at the time of final  acceptance a maintenance bond in an amount which
shall  be  equal  to  100% of the  cost of the  construction  of the  System  as
certified  to by  Developer's  engineer.  The  bond  shall  be in  favor  of the
Authority  and shall be effective  for period of one (1) year beyond the date of
final  acceptance by the Authority of said System.  This bond is for the purpose
of  protecting  and holding  harmless the  Authority  from any and all costs and
expenses occasioned by the repair or replacement of the System.

     7. The  Authority  hereby  agrees to accept  into its system  the  effluent
generated by the Developer's  use of the System provided such effluent  complies
with the  Authority's  rules and regulations  which may not be more  restrictive
than  the   requirements   of  the   Department  of   Environmental   Resources,
Environmental  Protection  Agency,  Township  of  Millcreek  and  City of  Erie,
presently  existing or as amended.  If such  effluent  does not comply with such
rules


                                     - 3 -


<PAGE>


and  regulations,  it shall be pre-treated  to comply  therewith.  Further,  the
Authority's  rules and  regulations  shall be in conformity with Summit Township
Ordinance  No. 72-8  adopted  September  13,  1972,  as it may be  amended.  The
Developer  shall comply with the  provisions of the Agreement of November,  1971
between the City of Erie,  Township  of Summit,  Erie City Sewer  Authority  and
Summit  Township  Sewer  Authority as may be amended  from time to time.

     8. The Developer  agrees that no other  connection to System or any lateral
or house  branch  shall be made at any time by  Developer  or any other party or
person without first obtaining consent, in writing, from the Authority.

     9. If the  Developer  undertakes  to  construct  the System as  contractor,
Developer  agrees to  indemnify  and save  harmless  Authority  and  Township of
Summit,  and likewise for the death of any such person and likewise for property
damage of any  person  including  Developer,  Authority  or  Township  of Summit
arising out of or related to the  construction  of the System  where the injured
party  alleges and proves that the loss is  attributable  in whole or in part to
any act of omission or commission,,  breach of duty or negligence on the part of
the Developer or their agents and servants;  said indemnity shall hold Authority
and  Township  of Summit  harmless  from any and all suits,  costs,  expenses of
defense  including  attorney  fees,  and  judgments  and  decrees.  In the event
Developer  enters  into a  contract  with a third  party as  contractor  for the
construction of part or all of the construction of the


                                     - 4 -


<PAGE>


System  then the  Developer  agrees  that it will  require  a  specific  term or
condition of said contract which shall indemnify and hold harmless Authority and
the  Township of Summit to the same extent and with the same effect as Developer
owes indemnity to Authority and the Township of Summit when constructing without
a contractor.  The indemnification provided through this section does not extend
to liability based solely and exclusively  upon the acts or omissions,  breaches
of duty, or negligence of the Authority, the Township of Summit, or any of their
agents, officers, servant, or contractors. The utilization by the Developer of a
separate  contractor does not relieve the Developer of its  indemnification  and
hold harmless of the  Authority and Township.

     10. In the event the  Developer  is  undertaking  the  construction  of the
System as contractor, Developer agrees to procure comprehensive public liability
insurance  in the amount of not less than  $500,000  for injury or death and not
less  than  $100,000  property  damage   containing   coverage  for  contractual
liabilities  undertaken  by Developer  under the  indemnity  provisions  of this
Agreement and require the contractor to have Workmen's  Compensation  Insurance.
Prior to the  commencement  of the work,  Developer  shall  provide to Authority
proof of compliance with the insurance provisions of this Agreement satisfactory
to the  Authority.  In the  event  Developer  enters  into a  contract  for  the
construction  of the System,  then the  Developer  agrees that it will require a
specific term or condition of said Agreement obligating the contractor to obtain
the same insurance and to provide proof thereof.


                                     - 5 -


<PAGE>


     11. The  Developer  shall be  responsible  to procure all permits which are
necessary for the construction, completion, approval and use of this System from
the  Department  of  Environmental  Resources  or any  local,  state or  federal
authority.  Developer  shall also be  responsible  to acquire any  rights-of-way
which may be needed for the  construction  of the System.  The Authority  agrees
that they shall  cooperate in every manner with the Developer in procuring  said
permits or  rights-of-way.  Inability  of  Developer  to procure such permits or
rights-of-way  will permit  Developer to void this Agreement and in the event of
such termination, Developer shall only be responsible for the costs set forth in
Paragraph 3 hereinabove.

     12. This Agreement shall be binding on all parties hereto, the assignees or
successors  in title.  Made and executed the day and year first above written by
the  undersigned  parties,  intending  to be  legally  bound  thereby.



WITNESS:                                DEVELOPER
                                        ESSEX PARTNERS, INC.

/s/ Annette Haley                       /s/ Thomas W. Blank
-----------------                       -------------------
Annette Haley                           Thomas W. Blank, Sr., V.P.


ATTEST:                                 SUMMIT TOWNSHIP SEWER AUTHORITY


/s/                                     By /s/
-------------------------------         ---------------------------------------
   Secretary                                    Chairman


                                     - 6 -


<PAGE>



                             DEVELOPER'S AGREEMENT

                    THIS DEVELOPER'S AGREEMENT entered into
                         this 30th day of January, 1997
                                 by and between

                                SUMMIT TOWNSHIP
                           Erie County, Pennsylvania
                              8900 Old French Road
                            Erie, Pennsylvania 16509
                           (hereinafter "Township")

                                   - a n d -

                              ESSEX PARTNERS, INC.
                           (hereinafter "developer")



Project Name..................  HAMPTON INN OLIVER ROAD @ I-90

Purpose.......................  100-ROOM HOTEL

County Index Number Part of...  40-17-73-2. 40-17-73-2.01,
                                40-17-73-2.02

Size of Development...........  2.5 ACRES

Responsible Party ............  Thomas W. Blank, COO Hotel Division
Address.......................  100 Corporate Woods, Suite 300
                                Rochester, NY 14623

Telephone Number..............  716-272-2300
Date..........................  01-21-97


RECITALS:

     A. It is the function of Township to protect public and other property,  to
control  the  development  of  Township  under the laws of the  Commonwealth  of
Pennsylvania and its Ordinances,  Resolutions and Regulations and to prevent the
creation of health and safety hazards or conditions; and

     B.  Developer  desires to develop  land in Summit  Township for the purpose
stated on title  page and to be known as the  Project  stated on the title  page
(hereinafter referred to as "the development").

     C.  Developer  desires to develop the aforesaid  development  in compliance
with all Pennsylvania law, applicable Township ordinances, resolutions and codes
and in accordance with the terms of this Agreement; and

     D.  Developer  agrees  that it will  construct  at its own cost and expense
including,  but not limited to, engineering,  inspection and legal fees incurred
by the Township,  directly related to all those public and other improvements as
identified in the approved plan; and

     E. Developer agrees to deposit with Township,  as financial  security,  the
amount recommended by the Township Engineer and approved by Township Supervisors
for all  improvements in the form of cash,  irrevocable  letter of credit escrow
account or bonds from a bonding  company or lending  institution  authorized  to
conduct such business in the Commonwealth of Pennsylvania; and

     F.  Developer   desires,   irrespective  of  the  applicable  land  use  or
subdivision ordinance of Township,  other laws of Township,  the County of Erie,
the Commonwealth of Pennsylvania  and the United States of America,  to be bound
by the terms of the within Agreement.

     G. The parties desire to memorialize  their  understanding by entering into
this binding, legal agreement; and


     NOW,  THEREFORE,  in consideration of the mutual covenants contained herein
and intending to be legally bound hereby, the parties agree as follows:




                                     - 2 -



<PAGE>



                            ARTICLE I - DEFINITIONS


     Section 1.01  FINANCIAL SECURITY. Financial security will be in the form of
cash,  irrevocable  letter of credit,  escrow  account,  or bonds from a bonding
company or lending  institution  authorized to conduct such business  within the
Commonwealth of Pennsylvania,  naming Summit Township, Its officers,  agents and
employees as obligee in an amount equal to 110% of the cost of completion of all
public and other  improvements,  when such financial  security is in the form of
cash and 160% of the cost of  completion  of all public and other  improvements,
when such financial  security is in the form of an Irrevocable letter of credit,
escrow account or bond.

     Section 1.02   MAINTENANCE  SECURITY.  Maintenance  security will be in the
form of cash,  irrevocable  letter of  credit,  escrow  account  or bonds from a
bonding  company or lending  institution  authorized  to conduct  such  business
within the Commonwealth of Pennsylvania,  naming Summit Township,  its officers,
agents  and  employees  as  obligee  in an  amount  equal  to 15% of the cost of
installation of all public  improvements,  when such maintenance  security is in
the form of cash and 25% of the cost of installation of all public improvements,
when  such  maintenance  security  is in the form of an  irrevocable  letter  of
credit, escrow account or bond.

     Section 1.03   OTHER  IMPROVEMENTS.  Other  improvements  will be all those
improvements  required by  Township  ordinances  including,  but not limited to,
planting,   grading,   drainage,   storm  water   retention/detention,   paving,
landscaping,  fighting and traffic  control  signage and  devices,  whether such
improvements  are located on  developers  property or on  contiguous  streets or
rights-of-way.

     Section 1.04  PUBLIC  IMPROVEMENTS.  Public  improvements will be all those
improvements  to be conveyed or  otherwise  dedicated  to the  Township or other
public body for public use.


                                     - 3 -

<PAGE>


                       ARTICLE II - PREDEVELOPMENT PHASE

     Section 2.01  PRELIMINARY  PLAN.  Developer  has  heretofore,  or will upon
execution of this Agreement submit a sketch or preliminary plan to Township, the
Planning  Commission  of  Township  and the Erie  County  Metropolitan  Planning
Commission, which plan shall be attached hereto as Exhibit "A".

     Section 2.02 LAND OPERATIONS  PERMIT. The Developer will not start any site
preparation activities,  including clearing,  grubbing,  grading, burning or the
like until a Land Operations Permit has been issued by Township.

     Section 2.03 COMPLIANCE. Developer covenants, promises and agrees to build,
construct and install all improvements in accordance with the rules, regulations
and  specifications  of  Summit  Township  in  existence  on the  date  of  this
agreement.

     Section 2.04  PROJECT COMPLETION.  Construction of all improvements will be
completed within twelve (12) months of issuance of the Land  Development  and/or
building Permit. The completion date will extend automatically for an additional
twelve (12) month period, provided no uncured violations exist.

     Section 2.05 SEWER  PLANNING  MODULE.  Developer  will submit to Township a
sewage facilities planning module for revision to the official sewage facilities
plan of  Township,  which  must  include at a minimum a sketch  plan  indicating
salient  existing  features of the tract and the general  layout of the proposed
development.  Developer  will  submit,  at its  sole  cost  sufficient  data and
information,  including a sewer facilities planning module application  package,
to permit Township or its authorized  representative,  as permittee, to apply to
the Department of Environmental Resources,  Commonwealth of Pennsylvania ("DER')
for all  necessary  permits and  approvals  for the  construction  of a sanitary
sewage system.  Developer will not commence construction of the system until all
necessary  permits and approvals have been received from DER.  Developer  agrees
that the final plan of  development  will not be approved by Township  until DER
approval of such revision has been secured.

     Section 2.06 WATER AUTHORITY AND SEWER AUTHORITY COMPLIANCE. Developer will
provide to Township  certificates  of the Sewer  Authority of Township and Water
Authority  of Township  acknowledging  compliance  with all of their  respective
rules and regulations, prior to the issuance of any building permit by Township.

     Section 2.07 TRANSPORTATION PLAN. Developer agrees,  covenants and promises
to comply with the Township's comprehensive plan and, in particular, the

                                     - 4 -


<PAGE>



Transportation  Plan in constructing the development and any future developments
on  Developer's  parcel,  it being  specifically  under-stood  that the proposed
development will, in all respects, be in accordance with the Transportation Plan
of  Township  as now  existing  or as may be  amended  pursuant  to  Developer's
request.

     Section  2.08 GREEN  SPACE.  Developer  agrees,  covenants  and promises to
comply with the Green space  Ordinance  of Township as now existing or as may be
amended pursuant to Developers request.

     Section  2.09 STORM  WATER  MANAGEMENT.  Developer  agrees,  covenants  and
promises to comply with all regulations,  approvals and  specifications and Acts
promulgated by the United States of America,  the  Commonwealth of Pennsylvania,
Erie County and Township with regard to storm water management.

     Section 2.10 BURNING.  Developer  agrees,  covenants and promises to comply
with the Burning Ordinance of Township and will apply for a permit in accordance
with the  terms  thereof  and will  also be in  conformity  with the  rules  and
regulations of the Department of Environmental Resources, Bureau of Air Quality.
Permit fees for burning  operations will be the  responsibility  of Developer in
accordance  with the amounts  established  by the  Township  Fee  Resolution  as
amended from time to time by Township.

     Section 2.11 FIRE HYDRANTS.  Developer  agrees that Township shall have the
sole right to determine  and approve the location and number of fire hydrants it
deems  necessary  for the  protection  of  development.  All costs and  expenses
relating to the installation of said fire hydrants will be borne by Developer.

     Section  2.12  COSTS.  Developer  will,  upon  initial  submission  of  any
application to develop  property in Township but no later than upon execution of
this  Agreement,  deposit a sum of money in accordance  with the Township Escrow
Deposit  Resolution in effect at the time of application.  From this amount will
be deducted  any fees  incurred by the  Township as a result of the  development
including,  but not limited to,  application  fees,  engineering  or consulating
fees,  engineering  inspection  fees and legal  fees.  If at any time during the
progression  of  development,   it  is  determined  by  Township,  in  its  sole
discretion, that the balance available is, or will be, inadequate to fully cover
anticipated  costs,  Developer  will be  notified  of the  amount of  additional
deposit required.  Developer will remit such additional deposit within ten (1 0)
days of notification.  Developer's  failure to pay the additional deposit within
such ten (10) day period  will cause  immediately  suspension  of review  and/or
issuance of any and all permits  and/or  revocation  of existing  approvals  and
permits. The balance of the deposit will be returned to Developer,  upon written
request, after


                                     - 5 -

<PAGE>


the  completion  of  development,   dedication  and  acceptance  of  all  public
improvements  and the release of the  maintenance  security  required in Section
4.02.

     Section 2.13 FINAL PLAN  APPROVAL.  Developer will submit its final plan of
development  and  plat  for  approval  to  Township  with  all  the  appropriate
signatures   for   recording   with  the  Recorder  of  Deeds  of  Erie  County,
Pennsylvania.  After Township  review for  compliance  with any and all Township
requirements  and  conditions  of  approval,  the  plat  shall  be  recorded  at
Developer's cost.

     Prior  to  recording  the  plat,  Developer  will  install  all  and  other
improvements in accordance with the approved plan and all Ordinances of Township
or provide financial security for the completion thereof.

     Section 2.14  FINANCIAL  SECURITY.  In lieu of  completion of all and other
improvements as required for final approval of the plan,  Developer will provide
to Township  financial  security in amounts sufficient to cover the cost of such
improvements,  as noted in Recital E. Such financial  security will be posted in
cash or with a bonding company or federal or state chartered lending institution
authorized to conduct  business within the  Commonwealth of Pennsylvania  and in
accordance  with  Section  1.01  hereof.  The  Township may adjust the amount of
financial  security by comparing the actual cost of improvements which have been
completed  and  the  estimated   costs  of  the   completion  of  the  remaining
improvements as of the expiration of the 90th day after either the original date
scheduled for completion or rescheduled date for completion.  Subsequent to said
adjustment,  Township may require Developer to post additional security in order
to insure that financial security equals 110% or 160%, as the case may be.

     If  Developer  requires  more than one (1) year from the date of posting of
financial  security  to  complete  the  required  improvements,  the  amount  of
financial  security  may be  increased  by an  additional  10% for each one year
period beyond the first anniversary date from posting of such financial security
or to an amount not  exceeding  110% or 160%, as the case may be, of the cost of
completing  the projects  using the  aforesaid  method.

     The amount of financial security required will be based upon an estimate of
the cost of completion of the improvements  prepared by a professional  engineer
licensed as such in the  Commonwealth  of  Pennsylvania,  retained by Developer,
certified by such  engineer to be a fair and a reasonable  estimate of such cost
and  acknowledged  as  such  Township's  engineer.  Irrespective  of the  above,
Township may establish the amount of financial security required, based upon the
recommendation of Township's engineer.

     Financial security may be released only upon written request from Developer
upon completion of improvements, certified by Township Engineer as complete.

     If  Developer  is unable to complete  the  improvements  identified  in the
approved plan by the date  identified in the approved plan of development by the
date determined in


                                     - 6 -


<PAGE>


accordance with Section 2.04 hereof, Township may, in its sole discretion, seize
the financial security or grant an extension thereto. If Township grants such an
extension to the time for completing such improvements, Developer will secure an
extension to the expiration of financial  security,  which extension will be for
not less than ninety (90) days.

















                                     - 7 -



<PAGE>


                        ARTICLE III - DEVELOPMENT PHASE

     Section  3.01  EROSION  AND   SEDIMENTATION   CONTROLS.   All  erosion  and
sedimentation  controls will be installed in  accordance  with the approved plan
prior to any other  construction  activities  occurring at the development.  The
erosion and sedimentation  controls will be properly  maintained  throughout the
duration of the  development  until all disturbed  areas have been stabilized to
the satisfaction of Township engineer, in his sole discretion.

     Section 3.02 INSTALLATION OF UTILITIES.  Developer will, in accordance with
appropriate subdivision and land development ordinances and regulations, install
all utilities,  including sewer, water, gas, electric, telephone, cable t.v., if
available, and such other utilities to service the development. All utility cuts
necessary for installation of service lines within street  rights-of-way must be
made prior to the installation of the base material for any such paving.

     Section 3.03 CONSTRUCTION OF IMPROVEMENTS.  Developer  covenants,  promises
and agrees to build, construct and install all improvements  including,  but not
limited  to,  paving,  grading,   roads,  storm  water  facilities,   sidewalks,
landscaping and lighting in accordance with the provisions adopted by Resolution
and Ordinance or accepted as commonly used  guidelines or provisions of Township
in effect at the time of final plan or final phase approval. All improvements in
the  development  will be constructed  and installed in accordance with Township
specifications  and  Ordinances  and  must be  certified  as  such  by  Township
engineer.

     Section 3.04  DEDICATION AND CONVEYANCE OF PUBLIC  IMPROVEMENTS.  Developer
will offer for dedication all proposed public improvements  accompanied by legal
descriptions,  as built mylars and executed  deeds of  dedication.  The Township
will not  accept a request  for  dedication  prior to  completion  of the entire
development.  Developer  acknowledges  and agrees that all costs of constructing
such dedications will be borne by Developer. Developer will submit to Township a
detailed and specific plan regarding the construction of such roadway and/or the
cul-de-sac.  Said plan will address and include,  by way of illustration but not
by way of limitation, provisions for storm water drainage, including surface and
subsurface,  depth of road surface and subsurface and location of utility lines.
Said plan must be approved by Township prior to Developers  commencement  of any
work. Developer agrees to construct said roadway according to the approved plan.
Any changes to said plan must be approved by Township.

     Section  3.05  DAMAGE TO EXISTING  ROADWAYS.  Developer,  its  contractors,
subcontractors  and  builders  will keep all  public  roads,  other  drives  and
highways used by

                                     - 8 -


<PAGE>

vehicles  entering and leaving the construction site in good repair and free and
clear of mud and dust.  Additionally existing draining patterns on such roadways
must be  maintained.  If such damage occurs to such roads,  drives and highways,
Developer  will be  responsible  for  the  cost of any  replacement,  repair  or
additional  maintenance  that may be required.  Developer will,  within five (5)
days after notification from Township,  deposit with Township sufficient amounts
to  cover  the  cost of such  replacement,  repair  or  additional  maintenance.
Developer  will keep all roads  clean of mud and dirt.  After  notification  the
Developer will clean roads  immediately.  If Public  roadways are not kept clean
Developer  will pay penalty of $100.00 per day after  written  notification  is
given.  All  penalties  will be deducted from Escrow  Account.  It is Developers
responsibility to police all employees and contractors, for the protection of
Public Roadways, working on site.

     Section 3.06 ON SITE DUST CONTROL.  Developer  will employ such controls as
may reasonably necessary, under the circumstances, to keep dust to a minimum.

     Section 3.07 POLICE AREA.  During  construction  Developer  will police the
construction area daily keeping the same free and clear of all rubbish,  refuse,
brush,  debris and  discarded  building  materials  so as not to create a public
nuisance.  Developer  may  accumulate  such  materials  in the area  approved by
Township  until  such  time as  accumulated  matters  are  removed  from site by
Developer,  provided  that  Township,  in its sole  discretion,  may require the
removal of any such  material by written  communication  indicating  the reasons
therefor  at any time  during  development  Developer  will remove from site and
dispose all rubbish,  refuse,  brush,  debris and discarded  building  materials
leaving the  development  free and clear of the same prior to the release of any
remaining financial security or final acceptance of any public improvements.

     Section 3.08 INFILTRATION OF SEWER SYSTEM.  Developer  covenants,  promises
and  agrees  that no storm  water,  roof  run-off,  drainage  or the  like  will
infiltrate the sanitary  water system  servicing the  development.  Violation of
this covenant will result in the immediate  automatic  revocation of any and all
approvals and permits covering the development Reinstatement of said permits and
approvals may be granted by Township when Developer has sufficient  guarantee to
protect Township from any and all fines for infiltration of storm water.

     Section 3.09 HAULING OVER  WEIGHT-RESTRICTED  ROADS.  Prior to construction
Developer  will  make  arrangements  necessary  in  order  to  comply  with  all
requirements  and  regulations in effect at the time of final plan approval with
respect to hauling  equipment  and  building  materials  over  weight-restricted
roads. Said  requirements and regulations may include,  but not limited to, fees
and/or bonding requirements.


                                     - 9 -


<PAGE>


     Section  3.10 HOURS OF  OPERATION.  Developer  will not permit any grading,
construction  or other  physical  work to be  conducted  on the site between the
hours of 10:00 p.m. and 6:00 a.m. without written permission from Township.

     Section 3.11 INSPECTIONS.  Developer hereby  specifically grants permission
to  Summit  Township,  its  supervisors,   employees,   agents,  contractors  or
consultants to conduct  inspections on its property.  These inspections may take
place at any time and with any  frequency  as  Township  deems  appropriate  and
necessary under the circumstances.

     Section  3.12  SNOW  REMOVAL  AND ICE  CONTROL.  Developer  will be  solely
responsible for providing snow removal and ice control on all streets within the
development whenever a structure is occupied until Township accepts said streets
by way of deeds of dedication or otherwise.  Developer may enter into a separate
legally  binding  agreement  with Township for snow removal and ice control.  It
will be the sole responsibility of Developer to contact the appropriate Township
official in order to execute the appropriate  agreement for snow removal and ice
control.  All costs and fees  incurred  by Township  in the  preparation  of the
agreement will be borne by Developer.  If Developer  elects not to enter into an
agreement for snow removal and ice control with Township, Developer will provide
for the same at its sole cost and expense and such  removal and control  will be
consistent with those techniques normally used by Township.

     Section 3.13  IDENTIFICATION  OF TRAFFIC CONTROL  SIGNAGE.  Developer will,
prior  to  the  issuance  of any  occupancy  permit  for  any  structure  in the
development,  install any and all  identification  and traffic control  signage.
Developer will submit to Township a traffic  circulation  plan  identifying  all
proposed identification and control signage.  Accompanying the circulation plan,
the Developer will submit a traffic  engineering  study for all proposed control
signage. The proposed circulation plan and accompanying engineering studies will
be reviewed  and  recommended  by  Township's  engineer to Township  and must be
approved by Township prior to the  installation of any signage and/or  occupancy
of any structure.

     Section 3.14 OFF STREET PARKING. During construction of any and all phases,
parking for vehicles  related to construction  activities will be arranged so as
not to create a  potential  traffic  hazard  and must be off  street.  On street
parking will be  permitted  only during the time of  preparation  of an off site
parking area, provided,  however, that a minimum of 15 feet of right-of-way must
be remain  unobstructed  at all  times.  After  notice of  violation  and second
violation  occurs  Developer  will pay  penalty of $25.00 per day to be deducted
from escrow fund.


                                     - 10 -


<PAGE>


                      ARTICLE IV - POST DEVELOPMENT PHASE

     Section 4.01  MAINTENANCE  OF DETENTION  SYSTEM.  Developer  will be solely
responsible for the maintenance of any required  detention system.  Developer is
hereby  permitted to transfer title to commonly  shared  detention  systems upon
submission and approval of legal  documentation  as to who will retain ownership
and maintenance  responsibilities  for such system.  Such legal documentation so
specifically  identified  in the manner in which the system will be  maintained,
providing for  inspections  of the same and will  indemnify the party or parties
who cause such  maintenance  to be affected.  The  transfer of common  detention
systems may  include,  but not be limited to,  transfer to home owner  groups of
residential  subdivisions  and/or groups of property owners on commercial sites.
Such documentation  will also include  provisions for municipal  intervention in
the event the  responsible  party or  parties  fail to  maintain  the system and
provide for the assessment of fees related to the cost of such maintenance.

     Section 4.02 MAINTENANCE SECURITY. This only applies when developer conveys
Public  Improvements to Township.  Township will not accept dedication of public
improvements  by Developer  until  Developer  posts with  Township a maintenance
security to ensure  structural  integrity  of said  improvement,  as well as the
functioning  of  said   improvements   in  accordance   with  their  design  and
specifications,  for a period of two (2) years  from the date of  acceptance  of
dedication.  Said maintenance  security will be posted in cash or with a bonding
company or federal or state chartered lending institution  authorized to conduct
business with the  Commonwealth of  Pennsylvania  and in accordance with Section
1.02  hereof.  Developer  hereby  agrees,  covenants  and  promises to make such
replacements,  repairs and maintenance within reasonable notice from Township to
Developer.  Failure to make such  replacements,  repairs or maintenance within a
reasonable  time after such notice  shall be a default  upon which  Township may
proceed to claim Developer's  security and to make such repair,  replacement and
maintenance  from said security.  Notwithstanding  any of the foregoing,  in the
event of an  emergency,  as  determined  by  Township  in its  sole  discretion,
Township may, in perform such repair,  replacement and  maintenance  required to
correct  the  emergency  situation.  Township  shall  notify  developer  of such
emergency as soon as practicable.  Developer  shall  reimburse  Township for all
costs incurred for such repair,  replacement,  and/or maintenance within fifteen
(15) days of  invoicing.  Township  is hereby  authorized  to seize  Developer's
security as  reimbursement  therefor,  if Developer fails to reimburse  Township
within  fifteen  (15) days  after  written  notification  from  Township  of its
intention to seize the security.



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<PAGE>


                         ARTICLE V - GENERAL PROVISIONS

     Section  5.01  INSURANCE.  Developer  will  cause  its  contractors  and/or
subcontractors to obtain and maintain liability and other insurance coverage and
agrees to furnish certificates of such insurance as may be required from time to
time by Township.

     Section 5.02 INDEMNIFICATION. Developer hereby agrees to indemnify and hold
harmless Township, its Supervisors,  officers,  employees,  attorneys and agents
from any and all liability,  suits, actions,  claims, demands,  losses, expenses
and costs of every kind and nature  incurred by or  asserted or imposed  against
Township, its Supervisors,  officers, employees, attorneys and agents, or any of
them,  by  reason of any  accident,  injury,  death or  damage to any  person or
property.  Developer  hereby  agrees  to  indemnify,  defend  and hold  harmless
Township,  its officers,  agents and employees from any and all costs and damage
which  Township, its  officers,  agents and  employees  may sustain or suffer by
reason of Developers  failing to adequately  and properly  perform the terms and
conditions  of this  agreement  including the  construction  of public and other
improvements.  This only applies when developer  conveys public  improvements to
Township.

     Section 5.03 BINDING EFFECT. This Agreement is binding upon Developer,  its
successors,  assigns,  agents,  representatives  and officers,  contractors  and
subcontractors and shall inure to the benefit of Township.

     Section  5.04  ASSIGNABILITY.   This  Agreement  may  not  be  assigned  or
transferred by Developer without the written consent of Township.

     Section 5.05  REVOCATION.  Any permit or approval issued in accordance with
the Land Use and Subdivision Ordinance,  any other Ordinance of Township or this
Agreement will be revoked  automatically  upon Developers failure to satisfy the
terms  and  conditions  of  this  Agreement  or  any  Ordinance,  Resolution  or
Regulation  of  Township  or any laws of the  County  of Erie,  Commonwealth  of
Pennsylvania or the United States of America.

     Section 5.06  COVENANT  RUNNING WITH LAND.  This  Agreement  constitutes  a
covenant  running  with the land and may be  recorded by  Township.  Any and all
expenses  incurred in the  preparation  and recording of this  Agreement will be
borne by Developer.

     Section 5.07 PHASES. Developer will enter into separate agreements for each
and every phase of the development.



                                     - 12 -


<PAGE>


IN WITNESS  WHEREOF,  the parties  hereto have set their hands and seals the day
and year first above written.

ATTEST:                              SUMMIT TOWNSHIP

/s/                                  /s/ Marlin K. Coon
----------------------               ------------------------------------------
                                         Marlin K. Coon, Chairman

                                     /s/ Richard P. Hessinger
                                     ------------------------------------------
                                         Richard P. Hessinger, Vice Chairman

                                     /s/ T. Richard Siegel
                                     ------------------------------------------
                                         T. Richard Siegel, Secretary/Treasurer

WITNESS:                             Essex Partners Inc.

/s/ Annette Haley                    /s/ Thomas W. Blank
----------------------               ------------------------------------------
                                         Thomas W. Blank

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


STATE OF NEW YORK
COUNTY OF MONROE

     On this,  the 28th day of January  1997,  before me, a Notary  Public,  the
undersigned  officer,  personally  appeared  Thomas  W.  Blank  known  to me (or
satisfactorily  proven) to be the  persons  whose  names are  subscribed  to the
within  instrument and  acknowledged  that he executed the same for the purposes
therein contained.

     IN WITNESS WHEREOF, I hereunto set my hand and official seal.


/s/ Mary S. Cott
------------------------------
Notary Public

Mary S. Cott
Notary Public, State of New York
Livingston County #4755744
Commission Expires 7/31/98


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