Document:

Exhibit 10.14

                      FIRST AMENDMENT TO TRANSFER AGREEMENT

         This First Amendment to Transfer Agreement (the "Amendment") is entered
into as of April 3, 2001, by and among GourmetMarket.com, Inc., a Delaware
corporation ("GMC"), and Gourmet Productions, Inc., a California corporation,
doing business as VirtualGourmet.com ("VG") and Rundell Coursey Company, a
Georgia corporation ("RCC"), and hereby amends and modifies that certain
Transfer Agreement dated as of March 23, 2001 ("Transfer Agreement") as follows:

         1. Section 1.3(b) of the Transfer Agreement is hereby amended and
modified to read as follows:

                  (b) On or before July 3, 2001, VG shall deliver to GMC shares
                  of VG's common stock (the "VG Shares") represented by a single
                  stock certificate and equal to twenty percent of the shares
                  outstanding of VG at the time of delivery.

         2. Section 1.8 of the Transfer Agreement is hereby amended and modified
to read as follows:

                  1.8 CLOSING. The Closing for the sale of the Purchased Assets
                  (the "Closing") will be held at the offices of Rundell Coursey
                  Company, 9255 Sunset Blvd., Suite 727, West Hollywood,
                  California, 90069, at 2:00 p.m. on April 10, 2001, or such
                  other place or date as the parties hereto mutually agree to
                  (the "Closing Date").

         3. Section 1.9(b) of the Transfer Agreement is hereby amended and
modified to read as follows:

                  (b) VG AND RCC DELIVERIES. At the Closing, VG will deliver to
                  GMC:

                           (i)      the original $75,000 Note and the $25,000
                                    Note marked as paid;

                           (ii)     the certificate described in SECTION 6.1;
                                    and

         4. Section 3.2 of the Transfer Agreement is hereby amended and modified
to read as follows:

                  3.2 AUTHORIZATION AND ENFORCEABILITY OF AGREEMENTS. As of the
                  Closing, VG will have all requisite corporate power and
                  authority to enter into this Agreement and to perform its
                  obligations hereunder. At the Closing, this Agreement will be
                  duly and validly authorized by and approved by all requisite
                  corporate action (including stockholder approval) on the part
                  of VG. This Agreement has been duly executed and delivered by
                  VG and constitutes the legal, valid, and binding obligation of
                  VG enforceable in accordance with its terms. No further
                  approvals or consents by, or filings with, any federal, state,
                  municipal, foreign or other court or governmental or
                  administrative body, agency, or other third party is required
                  in connection with the execution and delivery by VG of this
                  Agreement, or the consummation by VG of the transactions
                  contemplated hereby including the issuance of the VG Shares.

         3. Section 5.4 of the Transfer Agreement is hereby amended and modified
to read as follows:

                  5.4      DELIVERY OF DOCUMENTS. The documents described in
                           Section 1.9(a) hereof shall have been delivered to VG
                           in a form reasonably acceptable to VG.

         4. Except as expressly set forth herein, all other terms and conditions
of the Transfer Agreement shall remain in full force and effect.

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.

"VG"                                             Gourmet Productions, Inc.
                                                 a California corporation

                                                 By:
                                                    -----------------------
                                                     Name:
                                                     Title:

"GMC"                                            GourmetMarket.com,
                                                 a Delaware corporation

                                                 By:
                                                    -----------------------
                                                     Name:
                                                     Title:

"RCC"                                            Rundell Coursey Company,
                                                 a Georgia corporation

                                                 By:
                                                    ------------------------
                                                     Name:
                                                     Title:MORRISON, BROWN, ARGIZ & COMPANY

                                                                  Exhibit 10.25

Securities and Exchange Commission
450 5th Street, NE
Washington, D.C.

Gentlemen:

         We were previously principal accountants for Pelican Properties
International, Inc. ("Company") and on April 2, 1999 we reported on the
consolidated financial statements of the company as of and for the year ended
December 31, 1998. We have read the Company's statements included under Item 4
of its Form 8K dated January 19, 2000, and are in agreement with the statements
contained in Paragraphs (a), (b) and (c) on Page 2, therein. We have no basis to
agree or disagree with other statements of the registrant contained therein.

/s/ MORRISON, BROWN, ARGIZ & CO.
-------------------------------------
MORRISON, BROWN, ARGIZ & CO.
Certified Public Accountants
Miami, Florida
February 3, 2000MORTGAGE
                                    --------
Prepared by:

CAPIZOLA, FINEMAN & LAPHAM, P.A.
100 North Main Road
Vineland, New Jersey 08360
Tel.(856)692-6900                              /s/ Barbara R. Lapham
                                              --------------------------------
                                              Barbara R. Lapham, Esq.
                                              Attorney at Law of New Jersey

         THIS MORTGAGE dated July 20, 2000 is made by and between PALMER INN,
PRINCETON, LLC, a New Jersey Limited Liability Company, whose address is c/o
Pelican Properties International Corporation, 2 Fenwick Road, Suite 100,
Hampton, Virginia 23651, called "Borrower" and THE MINOTOLA NATIONAL BANK, a
National Banking Association, Dante & Lincoln Avenue, Vineland, New Jersey
08361-6607, called "Lender".

                                   MAJOR TERMS
                                   -----------

Amount of Loan (principal):                  $5,100,000.00
Interest Rate:                               9.75% per annum
Monthly Payment:                             $45,448.01 (principal and interest
                                             payment)
Escrow Payment:                              1/12th of the annual real estate
                                             taxes will be paid in addition to
                                             the monthly payment.
First Payment Date:                          August 20, 2000
Repayment Term:                              Payments are calculated on a 25
                                             year term. The Note, however, will
                                             be due in full in 5 years ("Due in
                                             Full Date").
Due in Full Date:                            July 20, 2005
Mortgaged Property Address:                  3499 U.S. Route 1 South, Lot 59,
                                             Block 7, West Windsor Township,
                                             Mercer County, New Jersey (called
                                             the "Property")
Legal Description:                           The legal description is attached
                                             as Schedule A and made a part of
                                             this Mortgage.
Other Security:                              All personal property now owned or
                                             hereafter acquired by the Borrower,
                                             whether tangible or intangible,
                                             including, but not limited to,
                                             furniture, fixtures, equipment,
                                             vehicles, inventory, stock,
                                             dividends, contracts, contract
                                             rights, securities, debt
                                             instruments, accounts (including
                                             accounts receivable and bank
                                             accounts of any type, rental and
                                             lease payments), goods, chattel
                                             paper, documents, instruments and
                                             general intangibles, together with
                                             all proceeds (such as cash from the
                                             sale of the property), accessories
                                             to, substitutions of, replacement
                                             of, parts to and accessions to the
                                             above Property.

                           OTHER TERMS AND CONDITIONS

I.       BORROWER TO PAY PRINCIPAL AND INTEREST: In return for a loan by Lender
to Borrower, Borrower promises to pay the principal amount of the loan plus
interest to Lender in accordance with the terms of the Mortgage Note. Interest
at the rate provided above will be charged on that part of the principal which
has not been paid from the date of the Note until all principal has been paid.
If the interest rate is a floating rate, any change in the Lender's prime rate
shall be effective immediately with respect to this loan. The first payment is
due on the date stated above and on that. same date every month thereafter until
the Due in Full Date. However, if the purpose the loan is to fund construction,
commencing thirty days from the first draw, Borrower will make monthly payments
of interest only until the end of the Construction Period. On the first day of
the second month following the end of the Construction Period and on the same
date every month thereafter until the Due in Full Date, Borrower will make
regular monthly payments of principal and interest:

II.      EARLY PAYMENTS: Prepayment penalty will be assessed on this loan if
this loan is paid in full within the first fifty-four (54) months after
origination. The schedule of the amount of this penalty will be:

                     3% in months 1 through 36
                     2% in months 27 through 48
                     1% in months 49 through 54

<PAGE>

         The prepayment penalty will apply to the principal balance. Partial
prepayments are allowed up to 10% of the original loan amount without penalty.
If the loan is paid in full with the first fifty-four (54) months of
origination, these partial prepayments will be subject to a prepayment penalty.

III.     LATE CHARGE FOR OVERDUE PAYMENTS: If the Lender has not received any
payment within 15 days after its due date, Borrower will pay a late charge
calculated at 5% of the monthly principal and interest payment in addition to
the payment that is past due.

IV.      DUE IN FULL DATE: At any time after the Due in Full Date, the Lender
may require Borrower to do one or more of the following upon 30 days notice: (a)
the Lender may demand the Borrower to pay the unpaid principal and interest in
full; (b) the Lender may change the monthly payment payable by Borrower; (c) the
Lender may change the interest rate payable by Borrower; (d) the Lender may
change any other term of this Mortgage or the Note; (e) the Lender may change
the interest rate to a "floating rate". This means that the interest rate to be
paid would change each month or (f) the Lender may require Borrower to sign new
documents in order to continue the loan.

THIS LOAN IS PAYABLE IN FULL AT MATURITY. YOU MUST REPAY THE ENTIRE PRINCIPAL
BALANCE OF THE LOAN AND UNPAID INTEREST THEN DUE. THE LENDER IS UNDER NO
OBLIGATION T9 REFINANCE THE LOAN AT THAT TIME. YOU WILL, THEREFORE, BE REQUIRED
TO MAKE PAYMENT OUT OF OTHER ASSETS THAT YOU MAY OWN, OR YOU WILL HAVE TO FIND A
LENDER, WHICH MAY BE THE LENDER YOU HAVE THIS LOAN WITH, WILLING TO LEND YOU THE
MONEY. IF YOU REFINANCE THIS LOAN AT MATURITY, YOU MAY HAVE TO PAY SOME OR ALL
OF THE CLOSING COSTS NORMALLY ASSOCIATED WITH A NEW LOAN EVEN IF YOU OBTAIN
REFINANCING FROM THE SAME LENDER. THE NEW LOAN WILL BE AT PREVAILING MARKET
RATES, WHICH MAY BE CONSIDERABLY HIGHER THAN THE RATE ON THIS LOAN.

V.       MODIFICATION: This Mortgage is subject to modification as provided by
the Mortgage Lien Priority Law, P.L. 1985, ch. 353, and any amendments or
supplements thereto.

VI.      PROPERTY MORTGAGED: The Property mortgaged includes: (a) the land; (b)
all building that are now, or will be, on the land; (c) all condemnation awards
and insurance proceeds relating to the land and building(s); (d) all other
rights that Borrower has, or will have, as owner of the Property; and (e) all
plants, structures, fixtures and equipment attached to the land or buildings.
Fixtures generally include all items attached to buildings such as heating,
plumbing, and electrical equipment, appliances, cabinets, wall to wall carpeting
and similar items. This document hereby grants a security interest in such items
to the Lender.

VII.     BORROWER'S TRANSFER OF RIGHTS IN THE PROPERTY: Borrower mortgages,
grants and conveys the Property to Lender subject to the terms of this Mortgage.
This means that by signing this Mortgage, Borrower gives Lender those rights
that are stated in this Mortgage and also those rights that the law gives to
lenders who hold mortgages on real property. Borrower gives these rights to
protect Lender from possible losses to the Lender if Borrower: (a) fails to pay
all the amounts owed to Lender as stated in the Note; (b) fails to pay, with
interest, any amounts that Lender spends under this Mortgage, to protect the
value of the Property and Lender's rights in the Property; (c) fails to pay,
with interest, any other amounts that Lender lends Borrower as Future Advances
below; and (d) fails to keep all of Borrower's other promises and agreements
under this Mortgage and the Note. When the Borrower pays all amounts due to the
Lender under-the Note and this Mortgage, the Lender's rights under this Mortgage
will end. The Lender will then cancel this Mortgage at Borrower's expense.

VIII.    BORROWER'S PROMISES: The Borrower makes the following promises to the
Lender.

                  A.       Borrower will comply with the terms of the Note and
                           this Mortgage and other documents;
                  B.       Borrower will make all payments required by the Note
                           and this Mortgage;
                  C.       The Borrower has good and marketable title to the
                           Property. This means Borrower owns the Property and
                           guarantees and will defend the Lender against any
                           other claims to the Property.
                  D.       Borrower, will pay when due all taxes, assessments,
                           utilities and other charges imposed upon the Property
                           which are ahead of the Lender's Mortgage. Borrower
                           will not claim any deduction from the taxable value
                           of the Property because of this Mortgage. Borrower
                           will not claim any credit against the principal and
                           interest payable under the Note and this Mortgage for
                           any taxes paid on the Property. Borrower will give
                           paid receipts for taxes, assessments and government
                           charges to the Lender 30 days after they were due to
                           be paid.
                  E.       Borrower must maintain fire and extended coverage
                           insurance on the Property. The Lender may also
                           require flood insurance or other types of insurance.
                           The insurance companies, policies, amounts and types
                           of coverage must be acceptable to the Lender.
                           Policies must be delivered to the Lender. Borrower
                           will notify the Lender of any loss or damage. The
                           Lender may settle any insurance claim on Borrower's
                           behalf if Borrower fails to do so. All payments from
                           the insurance company must be payable to the Lender
                           under a "standard mortgage clause" in the insurance
                           policy. The Lender may use the insurance money to
                           repair and restore the Property or to reduce the
                           amount due under the Note and this Mortgage. This
                           will not. postpone the due date for any payment under
                           the Note and this Mortgage.
                  F.       Borrower will keep the Property in good repair and
                           will not damage or abandon it. Borrower will allow
                           the Lender to inspect the Property upon reasonable
                           notice.

<PAGE>

                  G.       Upon request of the Lender, Borrower will certify in
                           writing the amount due on the Note and this Mortgage
                           and whether or not Borrower has any defense to the
                           obligations of the Note and this Mortgage.
                  H.       Borrower will not accept rent from any tenant for
                           more than two months in advance.
                  I.       Borrower will use the Property according to all laws,
                           ordinances and other requirements of any governmental
                           authority.
                  J.       At the Lender's request. Borrower will make regular
                           monthly payments to the Lender of 1/12 of the
                           estimated yearly real estate taxes and assessments on
                           the Property; and 1/12 of the yearly cost of
                           insurance on the Property. These payments will be
                           held by the Lender without interest to pay the taxes,
                           assessments and insurance premiums as they become
                           due.
                  K.       If the Property includes a unit in a Condominium
                           Projector in a PUD, Borrower will promptly pay, when
                           they are due, all assessments imposed by the owners
                           association or other organization that governs the
                           Condominium Project or PUD.
                  L.       Borrower agrees not to remove, damage or
                           substantially change the building without the consent
                           of the Lender.
                  M.       Borrower will not allow secondary mortgage financing
                           to be secured by this Property, except a permitted
                           construction mortgage.
                  N.       Borrower shall provide annually its financial report
                           to include a balance sheet, income statement and a
                           reconciliation of changes in financial condition.

IX.      DEFAULT: The Lender may declare the Borrower in default on the Mortgage
         Note and this Mortgage if:
                  A.       Borrower fails to make any payment required by the
                           Mortgage Note and this Mortgage within 30days after
                           its due date:
                  B.       Borrower fails to pay any real estate tax or special
                           assessment within 30 days after its due date;
                  C.       Borrower fails to keep the Property insured as
                           required by the Mortgage Note and the Mortgage;
                  D.       Borrower fails to comply with the terms of the
                           Mortgage Note and the Mortgage or any other document
                           given by Borrower concerning this loan;
                  E.       The Borrower changes the ownership of the Property
                           for any reason except by will or intestacy laws upon
                           the death of one or more of the Borrowers;
                  F.       The Borrower sells or transfers the Property or any
                           interest therein to any other person;
                  G.       The holder of any lien or mortgage on the Property
                           starts foreclosure, proceedings;
                  H.       Bankruptcy, insolvency or receivership proceedings
                           are started by or against any of the Borrowers;
                  I.       The Borrower defaults in any mortgage or lien ahead
                           of Borrower's mortgage;
                  J.       There is a material adverse change in the financial
                           condition of the Borrower, in the determination of
                           the Lender's Board of Directors;
                  K.       The Borrower allows any inferior lien to be placed
                           against the Property, except a permitted constriction
                           mortgage;
                  L.       The Borrower defaults on am- obligation to the
                           Lender.
                  M.       For corporate Borrowers: there is any change of
                           ownership of 50% or more of the capital stock of
                           Borrower, except by will or by operation of the
                           intestacy laws.
                  N.       For Partnership and Limited Liability Company
                           Borrowers: there is any sale or any other transfer of
                           or encumbrance placed upon any interest in the
                           partnership or limited liability company, other than
                           a transfer to any other partner or member, or there
                           is a dissolution of the partnership or limited
                           liability company.
                  0.       There is a default under the Security Agreement,
                           Assignment of Leases. Escrow Agreement, or any other
                           document executed by Borrower or any partner, member
                           or stockholder of Borrower or any other person or
                           entity regarding the loan or any collateral for the
                           loan.
                  P.       Lender agrees to give 10 days' notice of default to
                           Borrower.

X.       PAYMENTS FOR BORROWER: If Borrower does not make a Payment required by
the Note or this Mortgage, the Lender may make it for the Borrower. This means
that the Lender may pay the Borrower's past due taxes, assessments, utilities,
government charges, insurance. repairs or other payments to preserve the
Property for the Lender. The Lender may add such payments it makes to the
principal balance due at the interest rate of this loan and demand that the
Borrower repay it immediately to the Lender.

XI.      EMINENT DOMAIN: All or part of the Property may be purchased
involuntarily for public use. If this occurs, Borrower agrees that any amounts
paid be given to the Lender. The Lender may use this to repair or restore the
Property or to reduce the principal or interest on the Note and this Mortgage.
Any remaining balance will be paid to Borrower. This will not delay the due date
of any payments under the Note and this Mortgage

XII.     CONTINUATION OF BORROWER'S OBLIGATIONS: Lender may allow a person who
takes over Borrower's rights and obligations to delay or to change the amount of
the monthly payments of principal and interest due under the Mortgage Note or
under this Mortgage. Even if Lender does this, however, that person and Borrower
both shall be fully obligated under the Mortgage Note and under this Mortgage.
Lender may allow those delays or changes for a person who takes over Borrower's
rights and obligations, even if Lender is requested not to do so. Lender will
not be required to bring a lawsuit against such a person for not fulfilling
obligations under the Mortgage Note or under this Mortgage, even if Lender is
requested to do so.

<PAGE>

XIII.    Non Waiver: The Lender will not lose any right under the mortgage Note
or this Mortgage due to the Lender's failure to enforce the right at an earlier
time. The Lender may declare a default even if it previously did not declare a
default for the same reason.

XIV.     IMMEDIATE PAYMENT IN FULL: If the Lender declares the Borrower to be in
default, the Borrower then must immediately pay the loan in full. This means
that the Lender no longer must accept monthly payments and that the full
principal balance and unpaid interest must be completely paid immediately.

XV.      COSTS UPON DEFAULT: If the Lender declares the Borrower to be in
default, the Borrower must pay the Lender's cost of collecting the loan and
reasonable attorneys' fees.

XVI.     LENDER'S RIGHTS UPON DEFAULT: If the Lender declares that the Mortgage
Note and this Mortgage are in default, the Lender will have all rights given by
law or available in equity or set forth in the Mortgage Note or this Mortgage.
This includes the right to: (a) take possession of and manage the Property; (b)
have a court appoint a receiver to accept rent for the Property; (c) start a
court action, known as foreclosure, which will result in a sale of the Property
to pay all monies due according to the Mortgage Note and this Mortgage; (d) sue
Borrower for any money that Borrower owes the Lender which is not paid as a
result of the sale of the Property, and to sue Borrower for any money that
Borrower owes the Lender, without selling the Property first when permitted by
law; and (e) sue any guarantors of the loan at any time for the money due to the
Lender on this loan.

XVII.    NOTICES: All notices must be in writing (except for notices of change
in interest rate and other payment terms for adjustable rate loans) and
personally delivered or sent by certified mail, return receipt requested, to the
addresses given in this Mortgage. If certified mail is returned unclaimed,
notice may be given by regular mail to the addresses given in this Mortgage.
Address changes may be made upon notice to the other party.

XVIII.   BORROWER'S WAIVERS: Borrower and any guarantors, sureties and endorsers
waive all rights to require the Note holder to (a) demand payment of amounts due
(known as "presentment"); (b) give notice that amounts due have not been paid
(known as "notice of dishonor"); and (c) obtain an official certification of
nonpayment (known as a "protest");

XIX.     FUTURE ADVANCES: Borrower may ask Lender to make one or more loans in
addition to the loan under the Note. Lender may, before this Mortgage is
discharged, make those additional loans to Borrower. This Mortgage will protect
Lender from possible losses that might result from Borrower's failure to pay the
amounts of any of those additional loans plus interest, only if the notes for
those additional loans state that this Mortgage will give Lender such
protection. Additional loans made by Lender that are protected by this Mortgage
will be called "Future Advances". Future Advances shall be subject to all terms
of this Mortgage and shall be repaid according to the Note granting the Future
Advance.

XX.      PURCHASE MONEY MORTGAGE: Any part of the loan proceeds which are used
to pay a part of the purchase price of the Property shall have the benefits of a
purchase money mortgage.

XXI.     APPLICABLE LAW: The law that applies in the place that the Property is
located will govern this Mortgage. If any term of this Mortgage or of the Note
conflicts with the law, all other terms of this Mortgage and of the Note will
still remain in effect if they can be given effect without the conflicting term.
This means that any terms of this Mortgage and of the Note which conflict with
the law can be separated from the remaining terms, and the remaining terms will
still be enforced.

XXII.    LIABILITY OF SIGNERS: If more than one person signs this Mortgage as
Borrower, each person who signs is fully obligated to keep all of Borrower's
promises and obligations contained in this Mortgage. Lender may enforce its
rights under this Mortgage against each Borrower individually or against all
Borrowers together. This means that any one signer may be required to pay all of
the amounts owed under the Note and under this Mortgage. If any person signs
this Mortgage but does not sign the Note, then: (a) that person is signing this
Mortgage only to give that person's rights in the Property to Lender under the
terms of this Mortgage; and (b) that person is not personally obligated to make
payments under the Note.

XXIII.   CAPTIONS: The captions and titles of this Mortgage are for convenience
only. They may not be used to interpret or to define the terms of this Mortgage.

COPY RECEIVED. EACH BORROWER ACKNOWLEDGES RECEIPT OF A TRUE COPY OF THIS
MORTGAGE WITHOUT CHARGE.

SIGNATURES: I agree to the terms of this Mortgage. If the Borrower is a
corporation, its proper corporate officers sign and its corporate seal is
affixed.

Witnessed or Attested by:            PALMER INN, PRINCETON, LLC,
                                     A New Jersey Limited Liability Company

                                BY:
---------------------------        -----------------------------------------
                                   Nathan A. Roesing                 Manager

<PAGE>

                                 SCHEDULE "A".

         BEGINNING of on iron pin in the southwesterly line of Emmons Drive (60
feet wide) which bears South 40 degrees 00' East 255.00 feet from the
intersection of the northwesterly extension of the southwesterly line of Emmons
Drive and the northeasterly extension of the southeasterly line of Wheeler Way
(60 feet wide) and running thence

         1. along the southwesterly line of Emmons Drive South 40 degrees 00'
East 800.00 feet to a masonry nail, thence

2.       along the northwesterly line of U.S. Route 1 (50' to centerline) South
50 degrees 00' West 313.00 feet to a masonry nail, thence

3.       through Route 1 and along lands n/f of National Re/sources North 40
degrees 00' West 580.00 feet to an iron pin, thence

4.       still along National Re/Sources North 31 degrees 01' 50"
west 222.28 feet to an iron pin, thence

5.       still along National Re/sources North 50 degrees 00' East 278.72 feet
to the point and place of BEGINNING.

         Containing 5.86 acres of land.

         Along with an easement for the installation and maintenance of sanitary
sewerage fines and sewerage treatment plant appurtenances described as follows:

         BEGINNING at the end of course #4 above and running thence

1.       North 31 degrees 01' 50" West 2,114.61 feet to a point, thence

2.       North 47 degrees 00' East 232.61 feet to a point, thence

3.       South 31 degrees 01' 50" East 257.28 feet to a point, thence

4.       South 50 degrees 00' West 200.00 feet to o point, thence

5.       South 31 degrees Of 50" East 1,869.66' to a point, thence

6.       South 50 degrees 00' West 30.37 feet to the point and place of
         BEGINNING.

<PAGE>

                                 BORROWER's COPY
                                                         CERTIFIED TO BE
                                                         A TRUE COPY
                                  MORTGAGE NOTE
                                  -------------

         THIS MORTGAGE NOTE dated July 20, 2000 is made by and between PALMER
INN, PRINCETON, LLC, a New Jersey Limited Liability Company, called "Borrower"
and THE MINOTOLA NATIONAL BANK, a National Banking Association, Dante & Lincoln
Avenue, Vineland, New Jersey 08361-6607, called "Lender".

                                   MAJOR TERMS
                                   -----------

Amount of Loan (principal):         $5,100,000.00
Interest Rate                       9.75% per annum
Monthly Payment:                    $45,448.41 (principal and interest payment)
Escrow Payment:                     1/12th of the annual real estate taxes will
                                    be paid in addition to the monthly payment.
First Payment Date:                 August 20, 2000
Repayment Term:                     Payments are calculated on a 25 year term.
                                    The Note, however, will be due in full in 5
                                    years ("Due in Full Date").
Due in Full Date:                   July 20, 2005
Mortgaged Property Address:         3499 U.S. Route 1 South, Lot 59, Block 7,
                                    West Windsor Township, Mercer County, New
                                    Jersey (called the "Property")
Other Security:                     All personal property now owned or hereafter
                                    acquired by the Borrower, whether tangible
                                    or intangible, including, but not limited
                                    to, furniture, fixtures, equipment,
                                    vehicles, inventory, stock, dividends,
                                    contracts, contract rights, securities, debt
                                    instruments, accounts (including accounts
                                    receivable and bank accounts of any type,
                                    rental and lease payments), goods, chattel
                                    paper, documents, instruments and general
                                    intangibles, together with all proceeds
                                    (such as cash from the sale of the
                                    property), accessories to, substitutions of,
                                    replacement of, parts to and accessions to
                                    the above Property.

                           OTHER TERMS AND CONDITIONS
                           --------------------------

I.       BORROWER TO PAY PRINCIPAL AND INTEREST: In return for a loan by Lender
to Borrower, Borrower promises to pay the principal amount of the loan plus
interest to Lender in accordance with the terms of the Mortgage Note. Interest
at the rate provided above will be charged on that part of the principal which
has not been paid from the date of the Note until all principal has been paid.
If the interest rate is a floating rate, any change in the Lender's prime rate
shall be effective immediately with respect to this loan. The first payment is
due on the date stated above and on that same date every month thereafter until
the Due in Full Date. However, if the purpose the loan is to fund construction,
commencing thirty days from the first draw, Borrower will make monthly payments
of interest only until the end of the Construction Period. On the first day of
the second month following the end of the Construction Period and on the same
date every month thereafter until the Due in Full Date, Borrower will make
regular monthly payments of principal and interest.

II.      EARLY PAYMENTS Prepayment penalty will be assessed on this loan if this
loan is paid in full within the first fifty-four (54) months after origination.
The schedule of the amount of this penalty will be:

                    3% in months 1 through 36
                    2% in months 27 through 48
                    1% in months 49 through 54

         The prepayment penalty will apply to the principal balance. Partial
prepayments are allowed up to 10% of the original loan amount without penalty.
If the loan is paid in full with the first fifty-four (54) months of
origination, these partial prepayments will be subject to a prepayment penalty.

III.     LATE CHARGE FOR OVERDUE PAYMENTS: If the Lender has not received any
payment within 15 days after its due date, Borrower will pay a late charge
calculated at 5% of the monthly principal and interest payment in addition to
the payment that is past due.

<PAGE>

IV.      DUE IN FULL DATE: At any time after the Due in Full Date, the Lender
may require Borrower to do one or more of the following upon 30 days notice: (a)
the Lender may demand the Borrower to pay the unpaid principal and interest in
full; (b) the Lender may change the monthly payment payable by Borrower; (c) the
Lender may change the interest rate payable by Borrower; (d) the Lender may
change any other term of the Mortgage or this Mortgage Note; (e) the Lender may
change the interest rate to a "floating rate". This means that the interest rate
to be paid would change each month or (f) the Lender may require Borrower to
sign new documents in order to continue the loan.

THIS LOAN IS PAYABLE IN FULL AT MATURITY. YOU MUST REPAY THE ENTIRE PRINCIPAL
BALANCE OF THE LOAN AND UNPAID INTEREST THEN DUE. THE LENDER IS UNDER NO
OBLIGATION TO REFINANCE THE LOAN AT THAT TIME. YOU WILL, THEREFORE, BE REQUIRED
TO MAKE PAYMENT OUT OF OTHER ASSETS THAT YOU MAY OWN, OR YOU WILL HAVE TO FIND A
LENDER, WHICH MAY BE THE LENDER YOU HAVE THIS LOAN WITH, WILLING TO LEND YOU THE
MONEY. IF YOU REFINANCE THIS LOAN AT MATURITY, YOU MAY HAVE TO PAY SOME OR ALL
OF THE CLOSING COSTS NORMALLY ASSOCIATED WITH A NEW LOAN EVEN IF YOU OBTAIN
REFINANCING FROM THE SAME LENDER. THE NEW LOAN WILL BE AT PREVAILING MARKET
RATES, WHICH MAY BE CONSIDERABLY HIGHER THAN THE RATE ON THIS LOAN.

V.       MORTGAGE TO SECURE LOAN: Borrower has given the Lender a Mortgage on
the Property described above. If applicable, the Borrower has also given the
additional security described above which is evidenced by a security agreement
or other financing documents. The Mortgage and other documents are intended to
protect the Lender from possible losses if the terms of this Mortgage Note and
the Mortgage and other documents are not kept by the Borrower.

VI.      DEFAULT: The Lender may declare the Borrower in default on this
                  Mortgage Note and the Mortgage if:

         A.       Borrower fails to make any payment required by this Mortgage
                  Note and the Mortgage within 30 days after its due date;
         B.       Borrower fails to pay any real estate tax or special
                  assessment within 30 days after its due date;
         C.       Borrower fails to keep the Property insured as required by the
                  Mortgage Note and the Mortgage;
         D.       Borrower fails to comply with the terms of this Mortgage Note
                  and the Mortgage or any other document given by Borrower
                  concerning this loan:
         E.       The Borrower changes the ownership of the Property for any
                  reason except by will or intestacy laws upon the death of one
                  or more of the Borrowers;
         F.       The Borrower sells or transfers the Property or any interest
                  therein to any other person;
         G.       The holder of any lien or mortgage on the Property starts
                  foreclosure proceedings;
         H.       Bankruptcy, insolvency or receivership proceedings are started
                  by or against any of the Borrowers;
         I.       The Borrower defaults in any mortgage or lien ahead of
                  Borrower's mortgage;
         J.       There is a material adverse change in the financial condition
                  of the Borrower, in the determination of the Lender's Board of
                  Directors;
         K.       The Borrower allows any inferior lien to be placed against the
                  Property except a permitted construction mortgage;
         L.       The Borrower defaults on any obligation to the Lender.
         M.       For corporate Borrowers: there is any change of ownership of
                  50% or more of the capital stock of Borrower, except by will
                  or by operation of the intestacy laws.
         N.       For Partnership and Limited Liability Company Borrowers: there
                  is any sale or any other transfer of or encumbrance placed
                  upon any interest in the partnership or limited liability
                  company, other than a transfer to any other partner or member,
                  or there is a dissolution of the partnership or limited
                  liability company.
         O.       There is a default under the Security Agreement, Assignment of
                  Leases, Escrow Agreement, or any other document executed by
                  Borrower or any partner, member or stockholder of Borrower or
                  any other person or entity regarding the loan or any
                  collateral for the loan.
         P.       Lender agrees to give 10 days' notice of default to Borrower.

VII.     CONTINUATION OF BORROWER'S OBLIGATIONS: Lender may allow a person who
takes over Borrower's rights and obligations to delay or to change the amount of
the monthly payments of principal and interest due under this Mortgage Note or
under the Mortgage. Even if Lender does this, however, that person and borrower
both shall be fully obligated under this Mortgage Note and under the Mortgage.
Lender may allow those delays or changes for a person who takes over Borrower's
rights and obligations, even if Lender is requested not to do so. Lender will
not be required to bring a lawsuit against such a person for not fulfilling
obligations under this Mortgage Note or under the Mortgage, even if Lender is
requested to do so.

VIII.    NON WAIVER: The Lender will not lose any right under this Mortgage Note
or the Mortgage due to the Lender's failure to enforce the right at an earlier
time. The Lender may declare a default even if it previously did not declare a
default for the same reason.

IX.      IMMEDIATE PAYMENT IN FULL: If the Lender declares the Borrower to be in
default, the Borrower then must immediately pay the loan in full. This means
that the Lender no longer must accept monthly payments and that the full
principal balance and unpaid interest must be completely paid immediately.
<PAGE>

X.       COSTS UPON DEFAULT: If the Lender declares the Borrower to be in
default, the Borrower must pay the Lender's cost of collecting the loan and
reasonable attorneys' fees.

XI.      LENDER'S RIGHTS UPON DEFAULT: If the Lender declares that this Mortgage
Note and the Mortgage are in default, the Lender will have all rights given by
law or available in equity or set forth in this Mortgage Note or the Mortgage.
This includes the right to: (a) take possession of and manage the Property; (b)
have a court appoint a receiver to accept rent for the Property; (c) start a
court action, known as foreclosure, which will result in a sale of the Property
to pay all movies due according to this Mortgage Note, the Mortgage and any
other document executed as part of this loan transaction; (d) sue Borrower for
any money that Borrower owes the Lender which is not paid as a result of the
sale of the Property, and to sue Borrower for any money that Borrower owes the
Lender, without selling the Property first when permitted by law; and (e) sue
any guarantors of the loan at any time for the money due to the Lender on this
loan.

XII.     NOTICES: All notices must be in writing (except for notices of change
in interest rate and other payment terms for adjustable rate loans) and
personally delivered or sent by certified mail, return receipt requested, to the
addresses given in the Mortgage. If certified mail is returned unclaimed, notice
may be given by regular mail to the addresses given in the Mortgage. Address
changes may be made upon notice to the other party.

XIII.    BORROWER'S WAIVERS: Borrower and any guarantors, sureties and.
endorsers waive all rights to require the Note holder to do certain things.
Those things are: (a) to demand payment of amounts due (known as "presentment");
(b) to give notice that amounts due have not been paid (known as "notice of
dishonor"); (c) to obtain an official certification of nonpayment (known as a
"protest");

XIV.     RESPONSIBILITY OF PERSONS UNDER THIS NOTE: If more than one Borrower
signs this Note, each of the Borrowers is fully and personally obligated to pay
the full amount owed and to keep all of the promises made in this Note. Any
guarantor, surety, or endorser of this Note is also obligated to do these
things. The Note holder may enforce its rights under this Note against each
Borrower individually or against all Borrowers together. This means that any
Borrower may be required to pay all of the amounts owed under this Note.

XV.      SETOFFS: The Lender may apply to or set off against this Note any
amounts which the Lender may owe to any Borrower, including any balance by any
deposit or other account.

XVI.     NO ORAL CHANGES: This Note can only be changed by an agreement in
writing signed by both the Borrowers) and the Lender.

XVII.    OTHER SECURITY: This Note is further secured by any security
agreements, financing statements. loan agreements, pledges, assignments or other
documents signed by Borrower or other parties in connection with this loan
("loan documents").

SIGNATURES: I agree to the terms of this Note. If the Borrower is a corporation,
its proper corporate officers sign and its corporate seal is affixed.

Witnessed or Attested by:                 PALMER INN, PRINCETON, LLC
                                          A New Jersey Limited Liability Company

ILLEGIBLE                                 BY:  /s/ Nathan A. Roesing
                                             -----------------------------------
                                                   Nathan A. Roesing     Manager

<PAGE>

                                 LOAN AGREEMENT
                                 --------------

Prepared by:                                                     BORROWER'S COPY

CAPIZOLA, FINEMAN & LAPHAM, P.A.
100 North Main Road
Vineland, New Jersey 08360                            /s/ Barbara R. Lapham
Tel. (856) 692-6900                                  ---------------------------
                                                          BARBARA R. LAPHAM
                                                          Attorney at Law

         In consideration of the mutual covenants and representations contained
in this Agreement, the Parties agree as follows:

         1.       PARTIES: The parties to this Agreement are as follows:

                    Lender:         MINOTOLA NATIONAL BANK

                    Borrower:       PALMER INN, PRINCETON, LLC,
                                    A New Jersey Limited Liability Company

                    Other Parties:  C. JOHN KNORR, JR.

         2.       LOAN TERMS: Lender has lent or will lend to Borrower
$5,100,000.00 ("the Loan") on the terms set forth in the letters of commitment
dated July 10, 2000 and July 13, 2000 and as follows:

                  The loan will be advanced in one draw on the date of
origination. The interest rate shall be set and fixed as of the date of
origination as determined by the following formula on that date: Wall Street
Journal Prime Rate plus .25%: Payments based upon this rate will be calculated
on a twenty-five (25) year payout; the Loan, however, will be due in full in
five (5) years. At the time of origination, Borrower will pay an origination fee
of 0.5% or $25,500.00.

                  In addition to all other requirements set forth in the
commitment letter and all other loan documents, the following additional
requirements apply to this Loan: '

                  1.1 Prepayment Penalty: A prepayment penalty will be assessed
on this Loan if it is paid in full within the first fifty-four (54) months
after origination. The schedule of the amount of this penalty will be:

                         3% in months 1 through 36
                         2% in months 27 through 48
                         1% in months 49 through 54

                           The prepayment penalty will apply to the principal
balance. Partial prepayments are allowed up to 10% of the original loan amount
without penalty. If the Loan is paid in full within the first fifty-four (54)
months of origination, these partial prepayments will be subject to a prepayment
penalty.

                  1.2 Financial Statements: The Lender will require updated
annual audited financial statements on the Borrower. Personal financial
statements will also be required of the guarantor.

                  1.3 All credit card processing services for the Palmer Inn
will be handled through Minotola National Bank for the life of the loan;
provided Lender has met or bettered Borrower's current services.

<PAGE>

                  1.4 The Lender will require internally prepared quarterly
financial statements for Palmer Inn, Princeton, LLC and Pelican Properties
International Corp.

                  1.5 The Palmer, Princeton, LLC must maintain a debt service
coverage ratio of 1.25x. Net distributions to related companies may not cause
the debt service coverage ratio to go below 1.25x. This requirement will be
evidenced by the receipt of the Federal Tax Trial Balance Report for the Palmer
Inn, Princeton, LLC. This will be calculated on an annual basis.

                  1.6 Palmer Inn, Princeton, LLC and Pelican Properties
International Corp. must maintain a debt service coverage ratio of 1.25x to be
calculated annually using fiscal year end audited financial statements.

                  1.7 Lender will .require the receipt of the loan payment
history for the mortgage loans on the Palmer Inn and McClure House.

         3.       USE OF FUNDS: Borrower will use the money lent by Lender only
as follows:

                  To refinance an existing loan obligation covering property
located at 3499 U.S. Route 1, Lot 59, Block 7, West Windsor Township, Mercer
County, New Jersey.

         4.       LOAN DOCUMENTS: Any loan documents signed by Borrower or Other
Parties shall become a part of this Loan Agreement. All documents shall be
interpreted as being complementary to each other.

                  Borrower has executed or will execute the following loan
documents:

                  Note, Mortgage, Environmental Rider, Assignment of Rents and
Leases, Title Certification & Disclosure, LLC Resolution, Security Agreement and
UCC-1 Financing Statements.

                  Other Parties have executed or will execute the following
documents:

                  Guaranty

                  Borrower and Other Parties will execute and provide any other
documents necessary to carry out the terms of the Loan commitment and this
Agreement. If a corporation is a party to this Agreement, a certified copy of a
resolution authorizing the execution of this Agreement and any other documents
shall be provided. If any partnership or limited liability company is a party to
this Agreement, a copy of the partnership agreement or operating agreement shall
be provided along with a certification from all partners or members that the
partnership or limited liability company has not been dissolved and that all the
loan documents are executed in accordance with the provisions of the partnership
or operating agreement.

5.       LOAN SECURITY: This loan is secured by certain property ( "Security")
of Borrower or Other Parties. By signing this Agreement and the other loan
documents Borrower and Other Parties consent to give this Security for the Loan.
This means that Lender may use the Security to pay the Loan if Borrower
defaults.
                  Borrower has provided the following Security

                  First Mortgage on the real property described in Paragraph 3
above and all blanket first lien security interest in all personal property of
the Borrower.

                  Borrower and Other Parties agree to execute any documents
necessary to provide the Security and to enable Lender to perfect its security
interest now and throughout the term of the Loan.

         6.       PRIOR LIENS: Borrower and Other Parties providing Security for
the Loan agree that they will pay any claim against the Security which may come
ahead of the interest of Lender. This means that Borrower and Other Parties
providing Security agree to pay all real estate taxes, municipal assessments,
prior mortgages, encumbrances, security interests and any prior liens of any
kind on all property which is Security for the Loan.

         7.       PRESERVATION OF SECURITY: Borrower and Other Parties providing
security agree to keep the Security in good condition and repair at their oven
expense.

<PAGE>

         8.       RIGHT TO INSPECT: Lender, its agents, employees or
representatives shall have the right to inspect any Security given on the Loan
at any reasonable time.

         9.       GUARANTIES: Other Parties named below guarantee that every
debt Borrower now owes to Lender or may, in the future owe to Lender, shall be
paid when due, no matter what may happen. This means that Lender can demand
payment from Other Parties guaranteeing the Loan if Borrower defaults on the
Loan. The parties who guarantee the Loan are:

                  C. John Knorr, Jr.

         10.      ASSIGNMENT OF LEASES: Any leases in which Borrower or Other
Parties are Landlords and which cover properly that is Security for this loan
are assigned to Lender. Lender shall have no duty to perform any obligation of
Borrower or Other Parties under these leases. These leases are additional
security for the Loan by Lender to Borrower. Lender shall have the right to
collect rents due from tenants upon default. All tenant security deposits must
be maintained in accounts at the Bank.

         11.      LIMITATIONS ON CORPORATE. PARTNERSHIP OR LIMITED LIABILITY
COMPANY ACTIONS: Any corporation, partnership or limited liability company (LLC)
which has signed this Agreement agrees to the following: (1) to continue in its
present form; (2) to not be dissolved or enter into any reorganization or merger
without Lender's written consent; (3) to not sell, transfer, lease or otherwise
dispose of any substantial part of its assets and (4) to conduct its business in
the ordinary course.

         12.      HAZARD INSURANCE: Borrower and Other Parties shall cause all
real and personal property given as Security to be insured against loss by fire
and other hazards as Lender may reasonably require, including extended coverage
and flood insurance. All policies of insurance shall contain a standard mortgage
or loss lender's payee clause in favor of Lender. The insurance shall be kept in
effect at the cost of Borrower or owner of the Security and the policies shall
be delivered to Lender. If Borrower or Other Parties do not obtain insurance or
do not pay the premiums, Lender may obtain the insurance and/or may pay the
premiums and add the costs to the Loan balance.

         13.      TITLE DOCUMENTS AND SURVEY: Borrower shall furnish to Lender a
current field survey of any real estate used as Security and a mortgagee policy
of title insurance with all usual exceptions removed issued by a title company
authorized to do business in the State of New Jersey. Borrower shall furnish UCC
searches and such other title searches as may be required by Lender. The costs
of all surveys, ti8tle insurance and searches shall be paid by Borrower.

         14.      CONDITIONS AFFECTING ANY SECURITY: Borrower and Other parties
provided Security for the loan (hereafter "Borrower and Other Parties") have
provided a completed Environmental Questionnaire to Lender and agree to provide
any additional information regarding the environmental condition of any real
property given as Security for the Loan, now and in the future. Borrower and
Other Parties have or agree to provide satisfactory inspection reports and
certifications concerning any environmental conditions, termite and
wood-destroying organisms, water quality, and on-site septic systems for any
property serving as Security for the Loan as required by Lender. Throughout the
term of the Loan, Borrower and Other Parties shall comply with all governmental
requirements for approvals, licenses and permits concerning any Security
including, but not limited to any applicable local Certificate of Occupancy
requirements, local rental registration and/or inspection requirements and the
Hotel/Motel and Multiple Dwelling Act. Borrower and Other Parties shall provide
proof of compliance with all applicable requirements at the time of initial
funding and throughout the term of the loan as required by Lender. If any
Property given as Security for the Loan is residential rental property built
before 1978, Borrower and Other Parties shall comply with all applicable laws
and regulations regarding lead based paint by providing the required disclosure
notice and informational pamphlet to all new Tenants prior to commencement of
any residential lease.

                  With respect to all real property securing the Loan
("Property"), Borrower and Other Parties represent, covenant and warrant to
Lender as follows:

                  A.       Underground Tanks. There are no underground tanks on
                           the Property. To the best of their knowledge, any
                           tanks and contaminated materials previously removed
                           from the Property were removed in accordance with all
                           applicable laws and regulations. If any underground
                           tanks are discovered on the Property, Borrower and
                           Other Parties will, at their sole cost, promptly have
                           the tanks and all contaminated materials removed in
                           accordance with all applicable laws and regulations.

<PAGE>

                  B.       Asbestos. No friable asbestos, or any substance
                           containing asbestos exists on the Property. Borrower
                           and Other Parties agree that Borrower and Other
                           Parties will not install, or permit to be installed
                           on .the Property, friable asbestos or any substance
                           containing asbestos. If any such materials are found
                           on the Property, Borrower and Other Parties agree to
                           remove these materials ` promptly at their sole cost
                           in accordance with all applicable laws and
                           regulations.
                  C.       No Pending Action. Neither the Property nor the
                           Borrower and Other Parties or any person or entity
                           using or occupying the property are in violation of,
                           or under threatened investigation by or inquiry by
                           any governmental authority in connection with any
                           laws relating to health or the environment (called
                           "Environmental Laws"). The Property is not and has
                           not been under a plan of remediation or a plan of
                           nonremediation under the Environmental Laws. Borrower
                           and Other Parties will promptly notify Lender, in
                           writing, of any pending or threatened investigation
                           or inquiry by any governmental authority in
                           connection with any Environmental Laws pertaining to
                           the Property.
                  D.       Permits. Borrower and Other Parties and any other
                           person or entity using or occupying the property have
                           not obtained and are not required to obtain any
                           permits, licenses or similar authorizations under any
                           Environmental Laws to construct, occupy, operate or
                           use any buildings, improvements, fixtures and/or
                           equipment forming a part of the Property.
                  E.       Hazardous Substances. Borrower and Other Parties has
                           never used, generated, treated, stored, spilled or
                           discharged any Hazardous Substance or Solid Wastes on
                           or in the Property, and to the best of Borrower's and
                           Other Parties' knowledge, no other person or entity
                           (including prior Owners and prior or present tenants,
                           contractors, agents or other authorized users of the
                           property), has ever used, generated, manufactured,
                           treated, stored, spilled or discharged. any Hazardous
                           Substance or Solid Wastes on, under, about or from
                           the Property or on any adjacent property. Borrower
                           and Other Parties agree not to permit Hazardous
                           Substances or Solid Wastes to be used, generated,
                           manufactured, treated, stored, spilled or discharged
                           on, under, about or from the Property. Borrower and
                           Other Parties agree to keep the Property free of any
                           Hazardous Substance or Solid Wastes. In the event of
                           a discharge or spill on, under, about or from this
                           Property or from an adjacent property which affects
                           this Property, Borrower and Other Parties agree to
                           remediate the Property promptly at their sole cost.
                                    The terms "Hazardous Substance" and "Solid
                           Wastes" shall mean: (a) any hazardous substance,
                           solid waste, pollutant or contaminant as defined in
                           the Comprehensive Environmental Response,
                           Compensation and Liability Act, 42 U.S.C. ss.9601 et
                           seq. (CERCLA), Resource Conservation and Recovery
                           Act, 42 U.S.C. ss.6901 et seq. (RCRA), Superfund
                           Amendments and Reauthorization Act of 1986, Public L.
                           No. 99-499 ("SARA"), the Hazardous Material
                           Transportation Act, 49 U.S.C. Section 1806, et seq.,
                           the New Jersey Industrial Site Recovery Act, NJSA
                           Section 13:1K-6 et seq. ("ISRA"), the Solid Waste
                           Management Act (SUMA), the New Jersey Spill
                           Compensation and Control Act, N.J.S.A. 58:10-23.11 et
                           seq., the Hazardous Discharge Identification Act and
                           the Clean Water Act and any regulations thereunder;
                           (b) any hazardous substance as defined in any other
                           federal, state or local law; (c) any substance
                           containing petroleum or petroleum based products as
                           defined in ss.9001(8) of RCRA, as .amended, 42 U.S.C.
                           ss.6991(8) or 40 CFR 280.1; and (d) PCB's, asbestos,
                           formaldehyde-based insulation or any other substance
                           which requires special handling in its generation,
                           handling, use, collection, storage, treatment, or
                           disposal.
                  F.       Default. Borrower and Other Parties shall be in
                           default under the note, mortgage and any other loan
                           documents if any statement contained in this
                           Agreement is false or if Borrower and Other Parties
                           fail to comply with the terms of this Agreement.
                  G.       Lender's Protection. Borrower and Other Parties give
                           permission to Lender or its representatives to enter
                           upon the Property to make such inspections and tests,
                           as Lender may deem appropriate to determine
                           compliance with this Agreement and to remove and
                           remediate any underground tanks. asbestos and
                           Hazardous Substances and Solid Wastes from the
                           Property if the Borrower and/or Other Patties fail to
                           do so as required by this Agreement. If remediation
                           is required. all costs incurred by Lender for removal
                           and remediation shall be immediately paid by Borrower
                           and Other Parties with interest at the rate provided
                           in the Note and shall be added to the principal
                           balance and secured by the mortgage and other loan
                           documents. Borrower and Other Patties release and
                           waive any future claims against Lender for indemnity
                           or contribution in the event Borrower and or Other

<PAGE>

                           Parties become liable for cleanup or other costs
                           under any of the laws defined above or any other
                           applicable environmental law affecting the property.
                  H.       Indemnification. Borrower and Other Parties shall
                           indemnify and hold Lender harmless from all claims,
                           legal actions, administrative proceedings, fines,
                           penalties, damages, liabilities, costs and expenses
                           (including engineering and expert fees, attorney's
                           fees and court costs) of any kind, resulting from (1)
                           a breach of any representation, covenant, obligation
                           or warranty of Borrower and/or Other Parties under
                           this Agreement; and (2) the ownership and use of the
                           Property and the use of the property by any other
                           person or entity. All amounts due and owing to Lender
                           in accordance with this provision shall be added to
                           the principal balance due under the Note, be paid
                           with interest at the rate provided therein and
                           secured by the mortgage and other loan documents.
                           This Agreement shall survive the payment of the
                           Obligation, release of the Property from the
                           mortgage, and/or foreclosure of the mortgage,
                           execution of a deed in lieu of foreclosure, or any
                           other action by which Lender becomes owner of the
                           Property.

         15.      CONSTRUCTION TERMS If the purpose of the Loan is to fund the
construction of improvements to any property securing the Loan, Borrower and
Other Parties agree to comply with all construction terms and conditions set
forth in the commitment letter, the Mortgage and the Construction Draw
Instructions.

         16.      LENDER'S ATTORNEYS FEES AND COSTS: Borrower shall pay for the
reasonable attorney's fees of Lender including any attorney's fees and costs
incurred as a result of any default by Borrower and in the collection and
enforcement of any judgment entered as a result of that default. Borrower shall
pay for all other costs associated with the closing of the Loan normally
incurred in such transactions including, but not limited to, recording costs,
title insurance and search costs, surveys, and appraisal and other expert fees.
The obligation to pay such costs shall apply to any renewal or modification of
the original loan.

         17.      DEFAULT: It shall be a default in the terms of this Agreement
in the event that Borrower or Other Parties do any of the following:

                  A.       Fail to make any payment required by any of the Loan
                           documents within 30 days after its due date;
                  B.       Fail to pay any real estate tax or special assessment
                           on any real property given as Security within 30 days
                           after its due date;
                  C.       Fail to keep the Security insured as required;
                  D.       Fail to comply with the terms of this Agreement and
                           the other loan documents;
                  E.       Change the ownership of any Security for any reason
                           except by will or intestacy laws upon the death of
                           one or more of Borrowers;
                  F.       Sell or transfer any Security or any interest therein
                           to any other person;
                  G.       The holder of any lien or mortgage on any Security
                           starts foreclosure proceedings;
                  H.       Bankruptcy, insolvency or receivership proceedings
                           are started by or against Borrower or Other Parties;
                  I.       Default in any mortgage or lien ahead of Lender's
                           mortgage;
                  J.       There is a material adverse change in the financial
                           condition of Borrower, in the termination of Lender's
                           Board of Directors;
                  K.       Allow any inferior lien to be placed against the
                           Security, except will allow a second mortgage lien to
                           be placed on the property for the purpose of
                           providing construction and permanent financing for
                           the construction of a twenty-two (22) room addition
                           to the Palmer Inn;
                  L.       Default on any obligation to the Lender.
                  M.       For corporate Borrowers: change ownership of 50% or
                           more of the capital stock of Borrower, except by will
                           or by operation of the intestacy laws.
                  N.       For Partnership and Limited Liability Company
                           Borrowers: there is any sale or any other transfer of
                           or encumbrance placed upon any interest in the
                           partnership or limited liability company, other than
                           a transfer to any other partner or member, or there
                           is a dissolution of the partnership limited liability
                           company.
                  0.       Default under the terms of any other loan documents
                           entered into as part of this transaction.
                  P.       If any judgments are entered against any corporation
                           issuing any stock which is used for security or if
                           there occurs any action against the corporation which
                           endangers its corporate existence or if the
                           corporation shall fail to pay any taxes due to the
                           United States or to any state.
                  Q.       Remove, damage or substantially change any Security
                           without our written consent.

<PAGE>

                  R.       Borrower's business fails to be Year 2000 Compliant,
                           including addressing risks resulting from the failure
                           of Borrower's key vendors, suppliers and customers to
                           be Year 2000 Compliant.
                  S.       Lender agrees to give 10 days' notice of default to
                           Borrower.

         18.      ACCELERATION: In the event of a default, the Loan shall become
immediately due and payable in full without demand.

         19.      FINANCIAL RECORDS: Lender may inspect at any reasonable times
all books, records, tax returns and other financial records of Borrower or Other
Parties signing this Agreement. Borrower and Other Parties guaranteeing the Loan
shall deliver to Lender at least annually a financial statement which shall be
certified as true and correct by Borrower or guarantor.

         20.      NOTICE OF LITIGATION: Borrower and Other Parties shall give
prompt notice to Lender of any litigation or other legal proceedings affecting
them.

         21.      PURCHASE MONEY INTEREST: Any loan funds advanced by Lender for
the purpose of paying the purchase price on any property shall be entitled to
the benefit of being a purchase money mortgage or purchase money security
interest. Any funds advanced by Lender under this Agreement to pay off existing
mortgages, liens or encumbrances shall be entitled to be subrogated to the
rights of the paid mortgage or security holder.

         22.      WAIVER: If Lender delays enforcing any of its rights under
this Agreement it shall not lose those rights. If Lender waives any provision of
this Agreement or any other loan document it shall not be considered to be a
waiver on any other occasion.

         23.      EVENTS NOT AFFECTING GUARANTIES OR SECURITY: Borrower and
Other Parties agree that their liability to pay the Loan or to provide security
will not be limited or canceled because:

                  A.       The obligation cannot be enforced against Borrower;
                  B.       Lender agrees to change the terms of the Loan or
                           extend the payment date or increase the interest
                           rate;
                  C.       Lender releases or exchanges any Security;
                  D.       Lender fails to fully or properly perfect its
                           security interest or to obtain Security;
                  E.       Lender sells any Security;
                  F.       Lender releases any other guarantor,
                  G.       A law, regulation or order of public authority
                           changes Lender's rights under any of the Loan
                           documents;
                  H.       Anything else happens that may affect Lender's rights
                           against Borrower, any guarantor or Other Parties;
                  I.       Lender delays in enforcing any rights under this
                           agreement or under any other loan document;
                  J.       Lender fails to notify Other Parties of a default.

         24.      OFFSET: Lender shall have the right to offset against the
balance due on the Loan any debt or obligation due from Lender to Borrower or to
Other Parties. Lender may retain any property of Borrower or Other Parties that
is in or comes into Lender's possession as additional Security for the Loan.

         25.      LATER LOANS AND MODIFICATIONS: This Agreement and all of the
terms and conditions of it shall apply to any additional or subsequent loans
made by Lender to Borrower and to any renewals or replacements of the Loans.

         26.      COVENANTS AND REPRESENTATIONS: Borrower and Other Parties
represent and warrant to Lender as follows:

                  A.       Any corporation signing this Agreement is a validly
                           existing corporation in good standing under the laws
                           of the State of New Jersey or is authorized to do
                           business in the State of New Jersey;
                  B.       Any partnership is a valid and existing partnership
                           and is authorized to execute this Agreement and any
                           loan documents;
                  C.       Any limited liability company is a valid and existing
                           company and is authorized to execute this Agreement
                           and any loan documents;

<PAGE>

                  D.       The persons executing this Agreement have the power
                           and authority to enter into this Agreement and have
                           taken all necessary action to authorize the signing
                           of this Agreement and any other documents required.
                  E.       The signing and performance of this Agreement and of
                           the Loan and any other documents does not violate or
                           cause a default in any other loan, lien, mortgage or
                           encumbrance;
                  F.       There are no judgments or other liens or pending
                           lawsuits or threatened law suits against Borrower or
                           Other Parties;
                  G.       Borrower and Other Parties have complied with all
                           Federal, State and local statutes, ordinances, laws
                           and regulations relating to the Loan or pertaining to
                           the Security.

         27.      COSTS UPON DEFAULT: Borrower and Other Parties agree to pay
all reasonable expenses of collection including reasonable attorney's fees in
connection with the enforcement of this Agreement and any other documents
executed in connection with the Loan.

         28.      SECONDARY FINANCING: Borrower represents and warrants that
there is no secondary financing in connection with this loan.

         29.      NOTICES: Any notices required or permitted under this
Agreement or any other loan shall be deemed delivered if delivered in person or
sent by certified mail, return receipt requested, to any party at the address
shown in this Agreement or in any of the Loan documents or at the last address
provided to Lender.

         30.      COUNTERPARTS: This Agreement may be signed in one or more
copies, including copies transmitted by telecopier or FAX. Each copy shall be
considered an original agreement, and all signed copies shall constitute a
single agreement. The parties agree that all such signatures may be transferred
to a single document upon the request of any party.

         IN WITNESS WHEREOF, the parties have executed this Loan Agreement on
the date noted below.

Witnessed or Attested by:                  Minotola National Bank

/s/ Kimberley S. Castllini                BY: /s/ William R. Plick
-------------------------------              --------------------------------
Kimberly S. Castellini,                            WILLIAM R. PLICK,
        Assistant Cashier                          Executive Vice President
                                                   Dated: July 19, 2000

                                          PALMER I , PRINCETON, LLC,
                                          A New Jersey Limited Liability Company

  ILLEGIBLE                               BY: /s/ Nathan A. Roesing
-------------------------------              ----------------------------------
                                             Nathan A. Roesing          Manager
                                             Dated: 7/20, 2000

<PAGE>

STATE OF NEW JERSEY   :
                      :SS
COUNTY OF CUMBERLAND  :

         I CERTIFY that on the date above written, Kimberley S. Castellini
personally came before me, and this person acknowledged under oath, to my
satisfaction, that:

         (a)      this person is the Assistant Cashier of Minotola National
                  Bank, the corporation named in this document;

         (b)      this person is the attesting witness to the signing of this
                  document by the proper corporate officer who is William R.
                  Plick, the Executive Vice President of the corporation;

         (c)      this document was signed and delivered by the corporation as
                  its voluntary act duly authorized by a proper resolution of
                  its Board of Directors;

         (d)      this person knows the proper seal of the corporation which was
                  affixed to this document; and

         (e)      this person signed this proof to attest to the truth of these
                  acts.

                                      /s/  Kimberly S. Castellini
                                      -----------------------------------------
                                      Kimberly S. Castellini, Assistant Cashier

Signed and sworn to before me
on July 19, 2000

/s/ Deborah N. Melchiorre
---------------------------

                                                    DEBORAH N. MELCHIORRE
                                                 Notary Public OF NEW JERSEY
STATE OF NEW JERSEY   :                        My emission Expires May 10, 2004
                      : SS                            I. D. # 2225330
COUNTY OF CUMBERLAND  :

I CERTIFY that on____________________, 2000, Nathan A. Roesing, Manager of
Palmer Inn, Princeton, LLC, a New Jersey Limited Liability Company personally
came before me and acknowledged under oath, to my satisfaction, that this person
(or if more than one, each person): ,

         (a)      is named,in and personally signed this document; and

         (b)      signed, sealed and delivered this document as his or her act
                  and deed.

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