Document:

Exhibit 10.11

                              DECLARATION OF TRUST

         Agreement and  declaration of trust made April 24, 2000, by and between
Apple Suites,  Inc., a corporation  organized and existing under the laws of the
Commonwealth of Virginia,  referred to in this declaration as trustee,  and such
persons or entities as may become  parties to this  declaration by acceptance of
certificate  shares,  for the purpose of enabling the trustee to hold and manage
the trust estate and to carry on business as provided below in this declaration.

         The trustee  declares that all property now held or acquired  after the
effective date of this declaration by it or its successor,  as trustee,  and all
income and profits from such property, shall be managed, administered, received,
collected,  disposed of, and  distributed for the benefit of such persons as may
from time to time be  owners of  certificates  of shares  evidencing  beneficial
interests  in this trust  estate,  in the  manner  and  subject to the terms and
conditions set forth in this instrument and any amendments to this instrument.

         The property now held by the trustee subject to the terms of this trust
consists of the following:  Homewood Suites,  12 East Swedesford Road,  Malvern,
Pennsylvania 19355.

                                  ARTICLE ONE
                          CHARACTER OF THE ORGANIZATION

         It is  expressly  declared  that there is created a trust,  of the type
commonly termed a business trust, pursuant to 15 Pa. C.S. Section 9501 et. seq.,
and not a partnership, a corporation, or a joint-stock association.

                                  ARTICLE TWO
                                NAME AND LOCATION

         A. The trustee may be designated as Apple Suites Pennsylvania  Business
Trust,  in  which  name  it  makes  and  executes  contracts  and all  kinds  of
instruments,  conducts business, acquires and conveys real or personal property,
and sues and is sued.

         B. The principal  office of the trust shall be at 9 North Third Street,
Richmond, Virginia 23219, unless and until it is changed by the trustee.

         C. The trustee may establish  such branch offices or places of business
as it shall determine to be in the best interests of the trust.

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                                 ARTICLE THREE
                            CAPITAL STOCK AND SHARES

         A. The  beneficial  interests  in the trust  shall be divided  into 100
shares, no par value.

         B. The trustee may sell or exchange  such shares to such  persons,  for
such sums or other consideration, and on such terms, as it may deem expedient.

         C. The trustee shall issue or cause to be issued to subscribers  for or
purchasers  of such  shares,  certificates  in such  form as the  trustee  deems
proper, evidencing the beneficial interests of such share owners.

         D. The certificates shall be personal property and shall entitle owners
of such certificates to participate in all dividends and other  distributions of
income or principal in the  proportion  which the number of shares of each owner
bears to the total number of shares issued and outstanding.

         E. Any trustee of the trust may acquire, hold, and dispose of shares in
the trust to the same  extent and in the same manner as if it were not a trustee
and without affecting in any way its status or power as such.

                                  ARTICLE FOUR
                               TRANSFER OF SHARES

         A. The  shares of the trust  shall be  transferable  by an  appropriate
instrument  in  writing  and by the  surrender  to the  trustee or to the person
designated therefor by it, but no transfer shall be of any effect as against the
trustee  until it has been  recorded upon the books of the trustee kept for that
purpose. On the transfer and surrender,  and recording in the trust books, a new
certificate  shall be issued to the transferee.  In case of a transfer of only a
part of the shares evidenced by a certificate, a new certificate for the residue
shall be issued to the transferor.

         B. The  person  in whose  name  shares  stand on the books of the trust
shall be deemed to be and treated as the  absolute  owner of such shares for all
purposes of this instrument,  and until the existing  certificate is surrendered
and transfer is recorded as required above, the trustee shall not be affected by
an notice, actual or constructive, of any transfer.

         C. Any person becoming entitled to become a shareholder in the trust as
a result of the death or bankruptcy of any shareholder, or in any way other than
by transfer in accordance with the above provisions of this article, may receive
a new certificate for the share and be recorded on the books of the trust as the
owner of such  share,  upon the  production  of  proper  evidence  of his or her
entitlement  to such share and the delivery of the existing  certificate  to the
trustee or any person  designated by it. Until such evidence is produced and the
existing  certificate is  surrendered,  the trustee shall not be affected by any
notice of the change in title.

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                                  ARTICLE FIVE
                       LOSS OR DESTRUCTION OF CERTIFICATE

         In case of the loss or destruction  of a certificate  of shares,  a new
one may be issued in its  place,  on such  conditions  as the  trustee  may deem
necessary and proper.

                                  ARTICLE SIX
              EFFECT OF DEATH OF SHAREHOLDER OR TRANSFER OF SHARES

         A.  The  death,  insolvency,  or  incapacity  of  one  or  more  of the
shareholders,  or the  transfer  of shares,  shall not operate to  terminate  or
dissolve  the trust or affect its  continuity  in any way,  nor shall such event
entitle any legal  representative  or other  person to dissolve  the trust or to
partition the trust property or to demand an accounting.

         B. In the event of the death of a shareholder, or a transfer of shares,
the transferee,  heirs,  legatees,  or legal  representatives of the decedent or
transferor shall succeed to his or her rights.

                                 ARTICLE SEVEN
                            INSPECTION OF STOCK BOOKS

         The stock books of the trust,  showing the  ownership  of all shares of
the trust and  recording  all  transfers  of such  shares,  shall be  subject to
inspection by any  shareholder or his or her attorney or agent at all reasonable
times, under such reasonable conditions as the trustee may prescribe.

                                 ARTICLE EIGHT
                                    DIVIDENDS

         The  trustee  may,  from time to time,  declare  and pay out of the net
earnings  received by it such dividends as it, in its  discretion,  deems proper
and advisable.

                                  ARTICLE NINE
                             RIGHTS OF SHAREHOLDERS

         A. The rights of  shareholders  and of  transferees  and other  persons
becoming  entitled  to shares of the trust shall be subject to all the terms and
conditions of this declaration of trust.

         B.  The  shares  of the  trust  shall  be  personal  property,  and the
ownership of such shares shall not give any person any legal or equitable  title
in or to the trust property or any part of such

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property,  but shall only  entitle  the owners of shares to their  proportionate
shares of dividends and distributions as provided above.

         C. No  shareholder  shall  have any  rights to manage  or  control  the
property, affairs, or business of the trust, or any power to control the trustee
in these respects.

         D. No  shareholder  shall  have any right to a  partition  of the trust
property or to an accounting during the continuation of the trust.

                                  ARTICLE TEN
                           LIABILITIES OF SHAREHOLDERS

         A. Shareholders shall not be liable for any assessment, and the trustee
shall have no power to bind the shareholders personally.

         B. All persons  dealing with or having any claim against the trustee or
any officer or agent of the trust  shall look only to the funds and  property of
the trust for the payment of any debt, claim,  damage,  judgment,  or decree, or
any money or thing that may become due or payable in any way, whether founded on
contract or tort, and the  shareholders  shall not be personally or individually
liable for any such debt, claim, damage, judgement, or decree.

         C. No  amendment  shall  ever be made  to  this  declaration  of  trust
increasing  or  enlarging  the  liability of  shareholders,  without the written
consent of all the shareholders.

                                 ARTICLE ELEVEN
                        SHAREHOLDERS' MEETINGS; ELECTIONS

         A. The  shareholders  shall meet at the  principal  office of the trust
once each year for the purpose of electing the  trustee(s) and of exercising and
discharging any other powers or duties vested in them by this instrument.

         B. The trustee may call special meetings of shareholders at any time.

         C. The trustee shall notify all  shareholders  of the time and place of
all meetings of  shareholders,  whether regular or special,  and, in the case of
special  meetings,  shall also give  notice to all  shareholders  of the general
purpose of the meeting and the nature of the business to be  considered  at such
meeting,  and such  special  meetings  shall be  limited  to the  business  thus
specified  in the call,  unless  the  owners of at least 50% of all  outstanding
shares consent in writing to the consideration of other matters.

         D. Notice mailed to a shareholder directed to him or her at the address
shown on the books of the trust shall be deemed sufficient for the provisions of
this  article  and for all other  purposes  unless  written  notice of change of
address is given to the trustee.

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         E. At all meetings of shareholders, the president named by the trustee,
or such other person as may be designated by the trustee,  shall  preside.  Each
share shall be entitled to one vote,  and  shareholders  may vote by proxy.  The
owners of one-half of the issued and outstanding shares, or their proxies, shall
constitute  a quorum for the  purposes of any  meeting,  In the  election of the
trustee,  and on other  matters  except where it is  otherwise  provided in this
instrument, a majority of the shares represented and voting at the meeting shall
control.

                                 ARTICLE TWELVE
                             RESIGNATION OF TRUSTEE

         A. Any  trustee  may be removed  during his or her term at any  regular
meeting of trustees or at any meeting  specially  called by any trustee for that
purpose, by a majority of all trustees for any cause by them deemed sufficient.

         B. Written  notification  of any special meeting called for the purpose
of  considering  the  removal  of any  trustee  shall be given or mailed to each
trustee at least ten days prior to such meeting,  but no such notification shall
be necessary in the case of a regular meeting of trustees.

                                ARTICLE THIRTEEN
                   MEETINGS OF TRUSTEE; MANNER OF FUNCTIONING

         A.  Regular  meetings  of the  trustee  shall be held at the  principal
office of the trust at least  once a year,  at such times as it may from time to
time  fix,  and it may hold  meetings  at any time  for the  transaction  of any
business upon the call of any trustee.  The president or, in his or her absence,
any other person as the trustee may designate, shall preside at such meetings.

         B. No  informality  or  defect  in the  manner of  calling  or  holding
meetings, and no failure to call or hold such meeting, shall affect the validity
of any action taken by a majority of all trustees.

         C.  A  majority  of  trustees  shall  constitute  a  quorum;   and  the
concurrence of all trustees shall not be necessary to the validity of any action
taken by them, but the decision or action of a majority of trustees  present and
voting at any meeting shall be conclusive and binding as the act and decision of
the trustees as a body.

         D. Any  trustee  may  delegate  to any one or more of their  number the
exercise  of any power or the  performance  of any duty that  trustees as a body
might exercise or perform.

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                                ARTICLE FOURTEEN
                             REPORTS BY THE TRUSTEE

         The trustee shall annually make a written  report of operations  during
the preceding fiscal year, showing receipts,  disbursements,  and earnings,  and
the assets and condition of the trust estate.  Such report shall be kept on file
at the  principal  office of the trust at all  times,  and shall be  subject  to
inspection by any  shareholder or his or her attorney or agent at any reasonable
time; and a copy or summary of such report shall be furnished to any shareholder
upon written request.

                                ARTICLE FIFTEEN
                               OFFICERS AND AGENTS

         A. The trustee  shall  appoint a president  and a  secretary,  and such
officers  shall have such authority and shall perform such duties as the trustee
shall prescribe and such as are usually incident to those offices in the case of
corporations,  so  far as  applicable  and in the  absence  of the  adoption  of
contrary provisions by the trustee.

         B. The terms of all  officers  shall be fixed by the  trustee,  and the
trustee may at any time,  with or without  cause,  remove or discharge  any such
officer or any agent or  employee;  provided,  that the removal of an officer as
such shall not affect its status as trustee.

                                ARTICLE SIXTEEN
                   GENERAL POWERS AND FUNCTIONS OF THE TRUSTEE

         A. The trustee  shall hold the legal title to all  property at any time
belonging  to  the  trust,  and  shall  have  absolute  and  exclusive  control,
management,  and disposition of such property,  and absolute and exclusive power
and control over the management and conduct of the businesses and affairs of the
trust, free from any power of control on the part of the shareholders.

         B. The trustee may hold, manage, deal with, and dispose of the property
and business of the trust in the same manner as if it were the absolute owner of
such property,  subject only to the specific limitations placed on its powers by
this instrument.

         C. The  enumeration  of powers  contained in this article  shall not be
construed as limiting in any way the general powers conferred on the trustee. It
shall have all powers necessary,  convenient, or appropriate to the purposes and
ends of this trust, and is authorized to take any action that it may deem proper
to carry out such purposes.

         D. The  trustee  shall have the power,  among  others,  to  purchase or
otherwise acquire property, and to sell, exchange,  lease, mortgage,  pledge, or
in any manner  dispose,  encumber,  improve,  or deal with the  property  of the
trust,  or any part of such property or any interest in such  property,  on such
terms and for such consideration and purposes as it deems proper.

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<PAGE>

         E. The trustee may engage in business,  manufacture, and deal in goods,
wares, and merchandise, incur indebtedness, borrow or loan money with or without
security,  enter  into  contracts  of  all  kinds,  execute,  accept,  discount,
negotiate,  and deal in commercial paper and evidences of indebtedness,  execute
conveyances,  mortgages,  deeds of trust,  leases,  and any other  instrument in
writing; it may invest and reinvest the trust funds; it may compromise or settle
any suits,  claims, or demands, or waive or release any rights,  relating to the
trust  estate or  business;  it may appoint  and employ  officers,  agents,  and
attorneys.

         F. The trustee may sue and be sued and prosecute and defend any and all
actions  affecting the trust or its business or property,  either in the name of
the trust or in its own name.

         G. The  trustee  may  adopt  and  enforce  such  bylaws  or  rules  and
regulations,  not inconsistent  with the provisions of this instrument,  as they
may from time to time deem expedient; it may adopt and use a common seal; it may
vote in person or by proxy any stock belonging to the trust estate,  and receive
the dividends on such stock.

                               ARTICLE SEVENTEEN
                           APPLICATION OF TRUST FUNDS

         A. Any act or thing done by the  trustee,  or by the officers or agents
of the trust under authority from the trustee,  shall,  as to strangers  dealing
with such trustee,  officers, or agents, be conclusively deemed to be within the
purposes of this trust and within the powers of the trustee.

         B. No person  dealing  with the trustee or with any officer or agent of
the trust,  shall be bound to see to the application by the trustee of any funds
or property passing into its hands or control.

                                ARTICLE EIGHTEEN
                            LIABILITY OF THE TRUSTEE

         A. No trustee shall be liable for any act or omission whatsoever of any
other trustee or of any officer, agent, or employee of the trust.

         B. No trustee shall be liable for any  negligence or error in judgment,
or for any act or omission, except for its own willful breach of trust.

         C. No trustee  shall be  required  to give any bond or surety to secure
the performance of the trust.

         D. Every act or thing done or  omitted,  and every power  exercised  or
obligation  incurred  by any  trustee in the  administration  of the trust or in
connection  with any  business,  property,  or  concern  of the  trust,  whether
ostensibly  in its own name or in its trust  capacity,  shall be done,  omitted,
exercised, or incurred by it as trustee and not as individuals.

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         E. Every person  contracting  or dealing with the trustee or having any
debt, claim, or judgment against it shall look only to the funds and property of
the trust for  payment or  satisfaction.  No trustee,  officer,  or agent of the
trust shall ever be personally  liable for or on account of any contract,  debt,
tort, claim, damage, judgment, or decree arising out of, or preservation of, the
trust  estate or the conduct of any  business  of the trust.  A  stipulation  or
notice  to  this  effect  may be  inserted  in any  contract,  order,  or  other
instrument made by the trustee or its officers or agents, and on stationery used
by it, but the omission of such  stipulation or notice shall not be construed as
a waiver  of the  above-stated  provision,  and shall not  render  the  trustee,
officers, or agents personally liable.

                                ARTICLE NINETEEN
                REIMBURSEMENT AND INDEMNIFICATION OF THE TRUSTEE

         Each trustee  shall be  indemnified  by and  reimbursed  from the trust
estate for any personal  liability,  loss, or damage incurred or suffered by it,
including liability,  loss or damage resulting from torts, in the administration
of the  trust  estate  or in  conducting  any  business  or  performing  any act
authorized  or permitted by this  declaration  of trust or any amendment to this
declaration,  except such as may arise from its own willful breach of trust; but
such  indemnity or  reimbursement  shall be limited to the trust estate,  and no
shareholder  shall be personally or  individually  liable for such  indemnity or
reimbursement to any extent.

                                 ARTICLE TWENTY
                                    AMENDMENT

         This  declaration of trust may be amended in any particular,  except as
regards the liability of shareholders, by the trustee, but only with the consent
of the owners of at least two-thirds of the shares, or their proxies,  voting at
a meeting  called for that purpose  pursuant to notice given as provided in this
instrument  and  specifying  the  purpose of the  meeting  and the nature of the
proposed amendment.

                               ARTICLE TWENTY-ONE
                            DURATION AND TERMINATION

         A. The  duration  of this  trust  shall  be  perpetual,  unless  sooner
terminated.

         B. The trustee may terminate  and dissolve this trust at any time,  but
only with the  assent of the owners of at least  two-thirds  of the  shares,  or
their proxies,  voting at a meeting  called for that purpose  pursuant to notice
given as provided in this instrument and specifying the purpose of the meeting.

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<PAGE>

         C. On the  termination  of this trust by any cause,  the trustee  shall
liquidate the trust estate, wind up its affairs, and dispose of its property and
assets at public or private sales,  and, after discharging all legal obligations
of the trust, shall distribute the proceeds among the shareholders in proportion
to their  interests,  and for these  purposes the trustee shall  continue to act
until such duties have been fully performed.

                               ARTICLE TWENTY-TWO
                                  GOVERNING LAW

         This  instrument  and the trust shall be governed  by,  construed,  and
enforced in accordance with the laws of the Commonwealth of Pennsylvania.

         In witness,  the parties have executed this declaration of trust on the
day and year first above written.

                                            Apple Suites, Inc., as trustee

                                            By:   /s/  Glade M. Knight
                                                ------------------------------
                                            Name:  Glade M. Knight
                                            Title: CEO and President

                                            Apple Suites, Inc., shareholder

                                            By:   /s/  Glade M. Knight
                                                ------------------------------
                                            Name:  Glade M. Knight
                                            Title: CEO and PresidentExhibit 10.12

                                                                         2/13/96

                                  GROUND LEASE

         1. Parties: Habendum.

         This  Ground  Lease  is made as of the 1st day of  July,  1996,  by and
between  Loretta M.  Cimeo,  George C.  Morelli,  Joseph P.  Morelli,  Esther E.
Morelli, Thomas W. Morelli, Charles P. Morelli, and John J. Morelli, hereinafter
collectively  referred  to as  Landlord,  and Promus  Hotels,  Inc.,  a Delaware
corporation,  hereinafter  referred  to as  Tenant.  Landlord  hereby  leases to
Tenant,  and  Tenant  hereby  hires  from  Landlord  the  Premises   hereinafter
described.

         2. Premises.

         The  "Premises"  consist of:  approximately  4.0 acres of real property
located on Swedesford  Road in Malvern,  East  Whiteland  Township,  PA, as more
fully  described on Exhibit A attached  hereto,  together with any buildings and
other  improvements  hereafter  constructed  thereon  (such  buildings and other
improvements  hereafter  constructed are hereinafter called the "Improvements");
any and all interests of Landlord in streets adjacent  thereto;  and any and all
other rights and interests of Landlord  appurtenant  to said parcel and streets.
"Ground  Leasehold Estate" shall mean all of Tenant's rights and interests under
this Ground  Lease.  "Registry of Deeds"  shall mean the land records  office or
offices in which the deed of the Premises is recorded,  as identified on Exhibit
A.

         Landlord  represents  and  warrants  that  Landlord  has good and clear
record  and  marketable  title to the  Premises,  subject  only to  encumbrances
identified on Exhibit A. Landlord covenants and agrees not to grant or permit or
suffer  to attach  to the  Premises  any  easement,  restriction,  lien or other
encumbrance  affecting the title to the Premises

<PAGE>

during  the  Term of  this  Ground  Lease  other  than  restrictions  and  other
encumbrances  in the name of Landlord  requested by Tenant.  Landlord shall have
thirty (30) days to bond off or otherwise discharge any encumbrance  suffered in
violation of the preceding sentence.

         Tenant  accepts the  Premises "as is" and in their  present  condition.
Tenant hereby  acknowledging  that Tenant has not been  influenced to enter into
this  Ground  Lease  by,  nor  has  Tenant  relied  upon,   any  warranties  and
representations  of Landlord  concerning the physical condition of the Premises,
except as follows:

         (a) No notice from any governmental  body has been served upon Landlord
to date claiming any violation of any law, ordinance, code or regulation;

         (b) No portion of the Premises has been condemned or otherwise taken by
public   authority,   and  Landlord  has  no  actual  knowledge  that  any  such
condemnation is threatened or contemplated;

         (c)  There  are  no  actions,  suits  or  proceedings  pending,  or  to
Landlord's  actual  knowledge,  threatened or  contemplated  which could have an
adverse affect upon the Premises; and

         (d) No portion of the Premises  has ever been used for the  manufacture
or storage of hazardous  waste, as defined by applicable  state local or federal
law.

         The "Original Term" shall be a period of thirty (30) years,  commencing
upon the first day of the month following execution of this Ground Lease.

         The term  "Ground  Lease Year" as used in this Ground  Lease shall mean
each of the  consecutive  twelve-month  periods of the  Original  Term or of any
Extension Term of this Ground Lease.

<PAGE>

         Tenant shall have the absolute and  unconditional  option to extend the
Term of this Ground Lease for one or more of three (3)  successive ten (10) year
Extension  Terms,  each on all of the  terms  and  conditions  set forth in this
Ground Lease.  Each such extension option shall be exercisable by written notice
from Tenant to Landlord given at least six (6) months before the commencement of
each such Extension Term.

         4. Rent.

         During the Term of this Ground Lease, Tenant shall pay rent to Landlord
at the address from time to time specified by Landlord pursuant to Paragraph 20,
absolutely  net without  assertion  of any  counterclaim,  setoff,  deduction or
defense and, except as otherwise  expressly provided herein,  without abatement,
diminution or reduction,  in advance in monthly installments on the first day of
each month during the Term, in an amount equal to one-twelfth of the Annual Rent
specified in this Section.

         The Annual Rent with  respect to the first five (5) Ground  Lease Years
of the Original Term shall be $100,000.

         Upon every  fifth (5th)  anniversary  of the  commencement  date of the
Original Term, the Annual Rent shall be adjusted to equal (i) the product of (A)
$100,000,  multiplied  by (B) a fraction,  the numerator of which is the CPI, as
defined below,  for the last full calendar month preceding such anniversary date
(the  "Extension  Index"),  and the  denominator of which is the CPI, as defined
below, for the last full calendar month preceding the  commencement  date of the
Original Term (the "Beginning Index"),  but not to exceed an increase of fifteen
percent (15%), and in no event shall the Annual Rent be less than $100,000.

         The "CPI"  shall mean the  Consumer  Price  Index for the  Metropolitan
Philadelphia area. All items,  1982-84=100,  as published by the U.S. Department
of Labor,  or, if such

<PAGE>

index is no longer  published,  the most nearly similar index which is published
by the U.S. Department of Labor.

         5. Taxes; Assessments.

         In the event the Premises is a portion of a larger tax parcel, Landlord
agrees to use its best  efforts to have the  Premises  designated  as a separate
parcel  for  taxing  purposes  so that the  assessed  valuation  of the land and
buildings  shall  relate only to the land  constituting  the Premises and to the
buildings and improvements constructed on the Premises.

         In the event the  Premises  is a portion of a larger tax parcel and the
Landlord  is unable to have the  Premises  designated  as a separate  parcel for
taxing  purposes so that taxes are assessed  upon the larger tax parcel of which
the Premises is a portion,  Tenant agrees to pay that portion of the taxes which
is reasonably attributable to the Premises, determined as follows:

         A.   In the event the taxes are identified or apportioned by the taxing
              authorities  or  are  identifiable  or   apportionable   based  on
              valuation or other  information  furnished by the taxing authority
              so that the portion of the taxes  attributable to the value of the
              land  can  be   distinguished   from  the  portion  of  the  taxes
              attributable  to the  value  of the  buildings,  then  as to  that
              portion of the taxes attributable to the value of the land. Tenant
              will pay a percentage  of such portion of the taxes  determined by
              dividing  the  area  of the  Premises  by the  total  area  of the
              assessed parcel,  and as to the portion of the taxes  attributable
              to the value of the  buildings,  Tenant will pay a  percentage  of
              such portion of the taxes  determined  by dividing the gross floor
              area of the

<PAGE>

              building on the Premises by the gross floor area of all  buildings
              located on the assessed parcel.

         B.   In the event the taxes are not  identified or  apportioned  by the
              taxing authority and are not  identifiable or apportionable  based
              on  valuation  or  other  information   furnished  by  the  taxing
              authority  so that the  portion of the taxes  attributable  to the
              value of the land cannot be distinguished  from the portion of the
              taxes  attributable to the value of the buildings,  then as to all
              taxes,  Tenant will pay a percentage  of the taxes  determined  by
              dividing  the  area  of the  Premises  by the  total  area  of the
              assessed parcel.

         Landlord  will notify  Tenant in writing of any taxes  which  Tenant is
required  to pay in  accordance  with  the  provisions  of  this  Section.  Such
notification  shall be furnished to Tenant not less than twenty (20) days before
the date such taxes are due and shall be  accompanied by a copy of the tax bill.
Any taxes which  Tenant is required to pay shall be paid by it no later than the
date on which such taxes are due unless the notification by Landlord is received
by Tenant  less than  twenty  (20) days  before the date on which such taxes are
due, in which event Tenant  shall pay such taxes  within  twenty (20) days after
the date of such notification, and Landlord shall be responsible for the payment
of any penalties,  interest or other charges imposed upon delinquent  payment of
taxes.  In the event the Premises is a portion of a larger tax parcel,  then the
written notification by Landlord to Tenant of such taxes shall set forth (1) the
total taxes on the larger tax parcel  accompanied by a copy of the tax bill; (2)
whether  the  total  taxes  on  the  larger  tax  parcel  are   identifiable  or
apportionable  between  land and  buildings  and if so,  the  amount  of  taxes,
attributable to the land and the amount of taxes attributable to buildings;  and
(3)

<PAGE>

Tenant's  portion of the total  taxes  together  with a  statement  showing  how
Tenant's portion was calculated in accordance with this Section.

         If Tenant fails to pay any taxes which it is required to pay within the
time  period  provided  above,  Landlord  may,  at its  option,  pay said taxes,
together with any and all penalties and said amount shall become immediately due
and payable as additional rent.

         Tenant  shall  have the right in its own name,  or in  Landlord's  name
where  appropriate,  but at its own cost and  expense,  to contest the amount or
legality  of  any  taxes  which  it  is  obligated  to pay  hereunder  and  make
application for the reduction thereof, or any assessment upon which the same may
be based, and the Landlord agrees,  at the request of Tenant, to execute or join
in the execution of any  instruments or documents  necessary in connection  with
such contest or  application.  If Tenant shall contest such tax  assessment,  or
other imposition, the time within which Tenant shall be required to pay the same
shall be extended  until such  contest or  application  shall have been  finally
determined,  except that Tenant shall be responsible  for any penalty imposed by
the  taxing  authority  resulting  from the late  payment  of taxes  due to said
contest.

         In no event shall Tenant be liable for payment of any income, estate or
inheritance taxes imposed upon Landlord or the estate of Landlord.  Tenant shall
not pay any income, franchise,  excise, sales or excess profits tax levied upon,
required to be collected by, or assessed against Landlord.

         Tenant shall,  within thirty (30) days after payment  thereof,  provide
Landlord  with a  photocopy  of the tax bill  marked  "paid"  or other  suitable
evidence that the same has been paid. Not withstanding the specification of such
30-day period,  Tenant's  obligations under the preceding sentence are expressly
agreed to be subject to the general  rights of cure by Tenant after  notice,  as
set forth in Paragraph 13, and by any Ground Leasehold

<PAGE>

Mortgagees  after notice,  as set forth in Paragraph  10. If  applicable  law or
statute  permits  the  payment  of any or all of the  above  items to be made in
installments  (whether or not interest  accrues on the unpaid  balance),  Tenant
may, at Tenant's election,  utilize the permitted  installment method, but shall
pay each installment with any interest before delinquency or the commencement of
tax title proceedings.

         Landlord  shall pay and  discharge all real estate taxes and other sums
due in respect  of, or which  might  become a lien  upon,  the land of which the
Premises  are a part  except to the  extent  the same is the  responsibility  of
Tenant under this Ground Lease.

         All  payments  of  taxes  or  assessments  or  both,  except  permitted
installment payments for betterments and assessments,  shall be prorated for the
initial  partial tax year included  within the Term and for the partial tax year
in which the Term expires. For such permitted installment payments, Tenant shall
pay only the installment(s) falling due during the Term of this Ground Lease.

         Landlord appoints Tenant as Landlord's attorney-in-fact for the purpose
of  making  all  payments  to any  taxing  authorities  and for the  purpose  of
contesting any taxes, assessments, or charges, all as hereinabove set forth.

         If either party shall fail to make any payment of taxes, assessments or
charges as and when the same is required to be paid by it  hereunder  and either
(i) such failure shall  continue for ten (10) days after receipt by it of notice
from the other of such  failure or (ii) the other shall in good faith  determine
that immediate  payment is necessary to prevent jeopardy to the other's interest
in the land  constituting  part of the  Premises and shall  simultaneously  give
notice to the party required to make such payment to such effect,  the other may
cure such failure by making such payment, together with any interest and penalty
thereon,  the  amount of which  payment,  plus  interest  thereon  at a rate two
percent

<PAGE>

(2%) above the so-called  "Prime Rate",  "Base Rate" or "Corporate  Rate" of any
successor  rate  quoted  from  time to  time in the  Wall  Street  Journal  (the
"Involuntary  Interest Rate"),  shall be paid by the party required to make such
payment upon demand.

         6. Uses.

         Tenant currently  intends to use and permit the use of the Premises for
the construction,  maintenance, and operation of a hotel and accessory uses, but
Tenant is not  obligated to construct a hotel or any other  Improvements  on the
Premises.  If,  at  any  time  prior  to the  commencement  of  construction  of
Improvements on the Premises, Tenant determines that Tenant will probably not be
able to secure approvals for and construct a hotel of at least 125 rooms. Tenant
shall  promptly  give notice to Landlord of such fact.  In such event,  Landlord
shall have the option to terminate this Ground Lease by written notice to Tenant
given within thirty (30) days after such notice from Tenant,  in which event the
Ground Lease shall  terminate on the date when Landlord gives such notice,  rent
and other  amounts paid in advance  shall be prorated,  and neither  party shall
have any other  obligation to the other. In the event Tenant gives such a notice
but  Landlord  does  not  elect to  terminate  the  Ground  Lease  Tenant  shall
thereafter  have the absolute  right at any time to use the Premises,  or permit
them to be used, or any lawful purpose except for adult  movies/bookstores or an
abortion  clinic.  In the event that Tenant  constructs a hotel on the Premises,
the Premises shall be used for hotel and accessory uses only during the first 10
Ground Lease years,  and Tenant shall  thereafter have the absolute right at any
time to use the  Premises,  or permit  them to be used,  for any lawful  purpose
except for adult movies/bookstores or an abortion clinic.

         Tenant may obtain zoning  changes and  conditional  use permits and may
enter into  agreements  restricting  use or  granting  easements  in or over the
Premises, provided that

<PAGE>

no such  agreements  shall be binding upon  Landlord or the  Premises  after the
expiration or  termination  of the Term of this Ground Lease without  Landlord's
prior written  consent.  Landlord shall, at Tenant's  request and expense,  join
with Tenant in applications and proceedings to obtain easements,  use and zoning
changes at Tenant's expense.

         7. Improvements.

         At any time and from time to time during the Term of this Ground Lease,
Tenant shall have the right,  but shall not be obligated,  to construct or cause
to be constructed new buildings and other Improvements on all or any part of the
Premises and to demolish, remove, replace, alter, relocate,  reconstruct, or add
to any buildings and other  Improvements now and hereafter  constituting part of
the Premises in whole or in part,  and to modify or change the contour or grade,
or both, of the land.  All salvage shall belong to Tenant.  Notwithstanding  the
foregoing,  except as necessary to comply with  Tenant's  obligation to maintain
the Premises in compliance  with  Requirements of Law, Tenant shall not have the
right to commence  any work under this  paragraph  if there is then a continuing
default  on the part of  Tenant  hereunder  as to which  Landlord  has given the
required  notices  and all  applicable  periods of grace and periods for cure by
Tenant  and  any  Ground  Leasehold  Mortgagees  have  expired  without  cure or
commencement  of  cure  as  in  Paragraphs  10  and  13  of  this  Ground  Lease
specifically provided ("Terminable Default").

         Any  work  of  demolition,  construction,   alteration,  or  repair  of
Improvements undertaken by or for Tenant during the Term of this Ground Lease in
or on the Premises shall be in compliance with all then applicable laws,  codes,
ordinances,  rules,  regulations,   orders  and  requirements  for  permits  and
approvals, including but not restricted to building permits, zoning and planning
requirements, and other such approvals from federal, state,

<PAGE>

county  and  municipal  governmental   authorities  from  time  to  time  having
jurisdiction over the Premises ("Requirements of Law").

         During any major work (as hereinafter defined) or demolition,  removal,
construction, reconstruction, alteration or repair in or on the Premises, Tenant
shall  maintain and shall deliver to Landlord prior to the  commencement  of any
major work  certificates  evidencing  insurance  coverage for  "builder's  risk"
(including   comprehensive  public  liability)  and  for  worker's  compensation
covering all persons  employed in  connection  with the work and with respect to
whom death or bodily  injury  claims could be asserted  against  Landlord or the
Premises. Tenant's obligations under the preceding sentence are expressly agreed
to be subject to the general rights of cure by Tenant after notice, as set forth
in Paragraph 13 and by any Ground  Leasehold  Mortgagees  after  notice,  as set
forth in Paragraph 10.  Notwithstanding  the  provisions of Paragraph 18, unless
Tenant shall  provide  Landlord  with  suitable  payment and  performance  bonds
insuring  completion  of the work Tenant  shall be  personally  liable,  without
limitation,  to complete any major work of  demolition,  removal,  construction,
reconstruction,  alteration  or repair of  Improvements  once begun in or on the
Premises, to the point that the Premises are in compliance with all Requirements
of Law.  However,  nothing in the preceding  sentence shall  obligate  Tenant to
undertake any work of construction, alteration or repair or, except as expressly
set forth  herein,  affect the rights of Tenant to  demolish,  remove,  alter or
replace the Improvements from time to time during the Term of this Ground Lease.
Tenant shall, at Landlord's  request in each case,  provide Landlord with copies
of "as built" plans as soon as practicable (but no more than 180 days) after the
completion of any major work of construction,  alteration or repair in or on the
Premises. Tenant's obligations under the preceding sentence are expressly agreed
to be subject to the general rights to cure by Tenant after notice, as set forth
in

<PAGE>

Paragraph 13, and by any Ground Leasehold  Mortgages after notice,  as set forth
in Paragraph 10. "Major work of  construction,  alteration or repair" shall mean
work having an estimated  cost exceeding  twenty-five  percent (25%) of the then
value of the Improvements.

         Neither party shall permit to be enforced  against the other's interest
in the Premises any mechanic's, materialman's,  contractor's, or subcontractor's
lien arising from any work in or on the Premises,  in the case of Tenant,  or in
or on the land of  which  the  Premises  are a part,  in the  case of  Landlord,
however  such lien may arise.  However,  each party may in good faith and at its
own expense  contest the  validity of any such  asserted  lien,  provided it has
furnished  any  bond  required  under  applicable  lien  laws  or has  otherwise
discharged any lien from said Registry of Deeds. If the responsible  party shall
fail,  within thirty (30) days after notice from the other, to bond off any such
asserted  lien,  the other may cure such failure by arranging  for such bond and
the cost of such bond, plus interest  thereon at the Involuntary  Interest Rate,
shall be paid by the responsible party upon demand.

         Throughout  the Term of this Ground Lease,  Tenant  shall,  at Tenant's
sole cost and expense,  maintain the Premises in accordance  with all applicable
Requirements  of Law and  shall not  commit  waste of the  Improvements  except,
however, that nothing in this sentence defining the duty of maintenance shall be
construed  as  limiting  any  right  given  elsewhere  in this  Ground  Lease to
demolish, remove, alter or replace the Improvements from time to time during the
Term of this Ground Lease.

         Tenant shall have the right,  for so long as there exists no Terminable
Default,  to contest by  appropriate  judicial  or  administrative  proceedings,
without  cost or  expense  to  Landlord,  the  validity  or  application  of any
Requirements of Law and Tenant shall not be

<PAGE>

required to comply with any such  Requirements  of Law until a  reasonable  time
following  final  determination  of Tenant's  contest.  Landlord may, but is not
required to, contest any such law  independently  of Tenant.  Landlord shall, at
Tenant's  request  execute all  documents  and  otherwise  cooperate in Tenant's
contest,  but without cost or expense to Landlord and without any  obligation on
the part of Landlord to attend or have any  representatives  of Landlord  attend
any proceedings in connection with such contest.

         All  Improvements  shall be owned by Tenant and  Tenant  shall have the
entire  insurable  interest in the same until  expiration or termination of this
Ground Lease,  whereupon the same shall,  without compensation to Tenant, be and
become  Landlord's  property  free and clear of all claims to or against them by
Tenant or any third person  claiming  under  Tenant.  Tenant shall hold harmless
Landlord for any obligations and/or liabilities  arising out of Tenant's actions
set forth in this paragraph.

         8. Utilities and Services.

         Tenant shall make all  arrangements,  whether  with private  providers,
governmental  authorities  and/or public utilities,  for all utilities and other
like services to the Premises  during the Term of this Ground Lease,  including,
without  limitation,  electricity,  telephone,  water,  sewage and gas. Landlord
shall have no  responsibility  for such  arrangements.  The  expense,  including
installation,  maintenance,  use and  servicing,  of all  utilities and services
shall be the direct and sole responsibility of Tenant.

         Landlord   grants  to  Tenant  the  right  to  grant  to   governmental
authorities and utility companies, for the purpose of serving only the Premises,
rights of way or  easements  on over the  Premises for poles or conduits or both
for such  utilities and services.  Promptly  after the recording  thereof Tenant
shall  provide  Landlord  with a copy of any  such  rights  of way or  easement.
Tenant's obligations under the preceding sentence are

<PAGE>
expressly  agreed to be subject to the general  rights of cure by Tenant,  after
notice,  as set forth in  Paragraph  13 and by any Ground  Leasehold  Mortgagees
after notice, as set forth in Paragraph 10 hereof.

         9. Assignments, Subleases of Tenant's Interest.

         Except as set forth herein,  Tenant shall have the unrestricted  right,
from time to time,  to assign all or any portion of or any  interest in Tenant's
interest in this Ground  Lease and the  Improvements  (including  the  leasehold
estate created hereunder)  without the prior consent of Landlord,  provided that
no such assignment  shall be valid and effective as against Landlord until there
shall  be  delivered  to  Landlord  a true  copy of the  written  instrument  or
instruments of assignment containing the name and address of the assignee and an
instrument  by which the assignee  assumes all  outstanding  obligations  of the
assignor  including  all  indemnification  obligations  of  the  assignors  then
existing hereunder.

         Upon any such valid  assignment  of this  Ground  Lease  provided  such
assignee  has a net worth in  excess of  $5,000,000  adjusted  by a factor,  the
numerator of which is the Extension  Index as of the date of such assignment and
the  denominator of which is the Beginning  Index as defined in Section 4, has a
good business  reputation and experience in hotel  operation and management if a
hotel has been developed on the leased  premises at the time of the  assignment,
or has a good  business  reputation  and  agrees  that  any  improvements  to be
constructed  on the  leased  premises  will  be in  accordance  with  applicable
township  zoning  ordinances  and standards if a hotel has been developed on the
leased  premises at the time of the assignment the assignor shall be relieved of
all  obligations  of the Tenant  hereunder or under such  separate  Ground Lease
thereafter

<PAGE>

occurring. A certified statement of net worth of the assignee shall be  supplied
to Landlord prior to execution of the assignment for verification of net worth.

         Tenant shall have the absolute right to sublet all or any part or parts
of the Premises and to assign, encumber, extend, or renew any subleases.  Unless
otherwise  expressly  agreed by  Landlord  in writing,  all  subleases  shall be
expressly  subject and subordinate to this Ground Lease, it being understood and
agreed that no such  subleases  shall relieve  Tenant from Tenant's  obligations
under this Ground Lease. Any use of the property for adult  movies/bookstores or
abortion clinic is prohibited.

         10. Ground Leasehold Mortgages; Sale and Ground Leaseback.

         The term "Ground Leasehold Mortgage" as used in this Ground Lease shall
include a mortgage, a deed of trust, a deed to secure debt, assignment, security
interest,  pledge,  financing statement, and any other instruments or agreements
intended to grant  security  for a debt or other  obligation  or other  security
instrument  by  which  the  Ground  Leasehold  Estate  is  mortgaged,  conveyed,
assigned,  or otherwise  transferred,  and shall also  include an  Institutional
Ground Leasehold  Mortgage.  The term "Institution Ground Leasehold Mortgage" as
used in this Ground Lease shall include a Ground Leasehold Mortgage of which the
original holder is an institution.  The term "Institution"  shall mean a savings
bank, a commercial bank or trust company (whether acting individually, or in any
fiduciary  capacity),  an insurance company,  an educational  institution,  or a
state,  municipal  or similar  public  employees'  welfare  or other  pension or
retirement  fund or system  or a  private  profit  sharing  trust or fund,  or a
corporate,  private or union pension trust or fund, or any other  corporation or
entity entitled to exemption from income tax under the Internal  Revenue Code of
the United States as amended from time to time or any other bank, company, firm,
corporation, system, trust, fund or other entity regularly in the business of

<PAGE>

making real estate  mortgage  loans and shall include any of the foregoing  when
acting as  trustee  for  another  holder or  holders,  whether or not such other
holder or  holders  are  themselves  Institutions.  The term  "Ground  Leasehold
Mortgagee" and "Institutional Ground Leasehold Mortgagee" as used in this Ground
Lease  shall refer to the holders of record of Ground  Leasehold  Mortgages  and
Institutional Ground Leasehold Mortgages, respectively, which holders shall each
be  conclusively  deemed in each case to have the address last specified for the
holder of each such Ground Leasehold Mortgage or Institutional  Ground Leasehold
Mortgagee,  as the case may be in notice to  Landlord  as  provided  for in this
Paragraph 10. The terms Ground Leasehold Mortgage and Ground Leasehold Mortgagee
include   Institutional  Ground  Leasehold  Mortgage  and  Institutional  Ground
Leasehold Mortgagee, respectively.

         Tenant  shall have the  absolute  right to enter into Ground  Leasehold
Mortgages  on one or more  occasions  from time to time  without  the consent of
Landlord.

         Each Ground Leasehold  Mortgagee may from time to time specify its name
and a United  States  address by notice to Landlord  and by  recording a copy of
such notice with the Registry of Deeds.  Landlord  shall upon  request  promptly
provide to any Ground  Leasehold  Mortgagee an  acknowledgment  of such name and
address in  recordable  form.  Whether or not Landlord  shall have provided such
acknowledgment,  the projections and provisions of this Ground Lease  applicable
to Ground  Leasehold  Mortgagees  shall be applicable  to each Ground  Leasehold
Mortgagee that has recorded a notice as to its name and address in said Registry
of Deeds as aforesaid.  Any notice to be given by Landlord to a Ground Leasehold
Mortgage  pursuant  to any  provisions  of this  Paragraph  10 shall  be  deemed
properly addressed if sent to the Ground Leasehold Mortgagee at the

<PAGE>

address specified in such Ground Leasehold Mortgagee's most recent duly recorded
notice to Landlord.

         No  cancellation  (other than a  termination  hereof by Landlord  for a
Terminable Default as defined in Paragraph 7), surrender or modification of this
Ground Lease or waiver or amendment of any  provision of this Ground Lease shall
be binding upon or effective as against any Ground  Leasehold  Mortgagee  unless
consented to in writing by such Ground Leasehold Mortgagee.

         Landlord, upon providing to Tenant any notice of (i) default under this
Ground Lease or (ii)  termination  of this Ground Lease,  shall at the same time
provide  a copy of such  notice to every  Ground  Leasehold  Mortgagee.  No such
notice by Landlord to Tenant  shall be deemed to have been duly given unless and
until a copy thereof has been so provided to every Ground  Leasehold  Mortgagee.
From and after  such  notice of  default  has been  given to a Ground  Leasehold
Mortgagee, such Ground Leasehold Mortgagee shall have the same period, after the
giving of such  notice to it,  within  which to remedy  any  default  or acts or
omissions which are the subject matter of such notice or to cause the same to be
remedied,  as is given Tenant after the giving of such notice to Tenant, plus in
the case of  Institutional  Ground  Leasehold  Mortgagees  only,  the additional
periods  of  time  specified  in the  next  two  succeeding  paragraphs  of this
Paragraph 10 to remedy, commence remedying, or cause to be remedied the defaults
or acts or omissions  which are the subject  matter of such notice  specified in
any such notice. Landlord shall accept such performance by or at the instigation
of such  Ground  Leasehold  Mortgagee  for the account of and as if the same had
been done by Tenant and such Ground Leasehold  Mortgagee shall not thereby be or
be deemed to be in possession of the Premises.  If two or more Ground  Leasehold
Mortgagees simultaneously offer to

<PAGE>

perform for or to remedy some default or act or omission of Tenant, Landlord may
elect to accept performance from the  Ground  Leasehold Mortgagee most senior in
lien upon the Ground Leasehold Estate.

         Anything   contained   in   this   Ground   Lease   to   the   contrary
notwithstanding,  if any default  shall occur  which would  entitle  Landlord to
terminate  this Ground Lease under  Paragraph  13,  Landlord  shall have no such
right to terminate unless,  following the expiration of the period of time given
Tenant to cure  such  default  or the act or  omission  which  gave rise to such
default. Landlord shall give notice of termination to every Institutional Ground
Leasehold  Mortgagee  at least  thirty  (30)  days in  advance  of the  proposed
effective date of such  termination if such default is capable of being cured by
the payment of money,  and at least  ninety (90) days in advance of the proposed
effective date of such termination if such default is not capable of being cured
by the payment of money. The provisions of the next succeeding paragraph of this
Paragraph  10 shall apply if,  during such thirty (30) or ninety (90) day period
in advance of the proposed effective date of such termination, any Institutional
Ground Leasehold Mortgagee shall:

         (1)  notify Landlord of such Institutional Ground Leasehold Mortgagee's
              intent to nullify such notice, and

         (2)  pay or cause to be paid  all  rent,  additional  rent,  and  other
              monetary  obligations  of Tenant  under this Ground Lease (a) then
              due and in arrears as specified in such termination notice to such
              Institutional  Ground Leasehold Mortgagee and (b) which may become
              due during such thirty (30) or ninety (90) day period, and

         (3)  comply  with all  non-monetary  obligations  of Tenant  under this
              Ground Lease (a) then in default as specified in such  termination
              notice to such

<PAGE>

              Institutional  Ground Leasehold Mortgagee and (b) which may become
              applicable during such thirty (30) or ninety (90) day period,  but
              only such non-monetary  obligations as are reasonably  susceptible
              of being  complied  with by such  Institutional  Ground  Leasehold
              Mortgagee.

         If Landlord shall elect to terminate this Ground Lease by reason of any
default of Tenant,  and an Institutional  Ground Leasehold  Mortgagee shall have
proceeded in the manner provided for in the immediately  preceding  paragraph of
this Paragraph 10, the specified  date for the  termination of this Ground Lease
as fixed by Landlord in its termination notice shall be extended for a period of
six (6) months,  provided that such  Institutional  Ground  Leasehold  Mortgagee
shall, during such six (6) month period;

         (1)  Pay or cause  to be paid  all  rent,  additional  rent  and  other
              monetary obligations of Tenant under this Ground Lease as the same
              become  due,  and   continue  to  comply  with  all   non-monetary
              obligations of Tenant,  under this Ground Lease,  but only such as
              are  reasonably   susceptible  to  being  complied  with  by  such
              Institutional Ground Leasehold Mortgagee; and

         (2)  for so long as not  enjoined  or  stayed,  take step to acquire or
              sell the Ground  Leasehold  Estate by foreclosure or assignment in
              lieu of foreclosure of the Institutional Ground Leasehold Mortgage
              or other  appropriate  means and  prosecute the same to completion
              with due diligence.

If at the end of such six (6) month period such  Institutional  Ground Leasehold
Mortgagee is continuing  to comply with  subparagraphs  (1) and (2) above,  this
Ground  Lease  shall not then  terminate,  and the time for  completion  by such
Institutional  Ground Leasehold  Mortgagee of its proceedings  shall continue so
long as such Institutional  Ground Leasehold Mortgagee is enjoined or stayed and
thereafter so long as such Institutional

<PAGE>

Ground  Leasehold  Mortgagee  proceeds to complete  steps to acquire or sell the
Ground  Leasehold  Estate by foreclosure or assignment in lieu of foreclosure of
the Institutional  Ground Leasehold  Mortgage or by other appropriate means with
reasonable diligence and continuity.  Nothing in this paragraph,  however, shall
be construed to extend this Ground  Lease beyond the  expiration  of the Term of
the Ground Lease. If an Institutional  Ground  Leasehold  Mortgagee is complying
with this paragraph, upon the acquisition of the Ground Leasehold Estate by such
Institution Ground Leasehold Mortgagee or its designee or any other purchaser at
a foreclosure  sale or otherwise  this Ground Lease shall continue in full force
and effect as if Tenant had not defaulted under this Ground Lease.

         In the event that this Ground Lease is  terminated  by operation of the
federal  Bankruptcy Code or other applicable law, each  Institutional  Mortgagee
shall have the same  rights as in the event of a default by Tenant,  except that
Landlord shall, upon the written request of any Institutional Mortgagee who has
complied  with  the  foregoing  provisions,   execute  a  new  lease  with  such
Institutional  Mortgagee on all of the same terms and  conditions of this Ground
Lease,  for the Term which would  remain  under this Ground  Lease if it had not
been  terminated  and on all of the other terms and  conditions  hereof.  In the
event  that  more  than one  Institutional  Mortgagee  requests such a new lease
Landlord shall grant such new lease to the  Institutional  Mortgagee  requesting
such new lease  which is prior in lien if they are then in  compliance  with the
terms of the Lease.

         The  making  of a Ground  Leasehold  Mortgage  shall  not be  deemed to
constitute an assignment  or transfer of the Ground  Leasehold  Estate nor shall
any Ground  Leasehold  Mortgagee,  as such,  or in the exercise of its rights to
perform  obligations  of Tenant,  be deemed to be an assignee or  transferee  or
mortgagee in possession of the

<PAGE>

Ground  Leasehold Estate so as to require such Ground  Leasehold  Mortgagee,  as
such, to assume or otherwise be obligated to perform any of the terms, covenants
or conditions on the part of the Tenant to be performed  hereunder,  except when
and  then  only  for so long as such  Ground  Leasehold  Mortgagee  enters  into
possession of the Premises in the exercise of its remedies  under the applicable
Ground Leasehold  Mortgage (as distinct from its rights hereunder to cure Tenant
defaults).

         The  purchaser  at any  sale  of the  Ground  Leasehold  Estate  in any
proceedings  for  the  foreclosure  of any  Ground  Leasehold  Mortgage,  or the
assignee or transferee of the Ground  Leasehold  Estate under any  instrument of
assignment  or  transfer  in lieu of the  foreclosure  of any  Ground  Leasehold
Mortgage,  shall be deemed to be an assignee or  transferee  of the Ground Lease
and shall be deemed to have assumed all of the  obligations of Tenant  hereunder
from and after the date of such purchase and assignment, but only for so long as
such  purchaser  or assignee  is the owner of this  Ground  Lease and the Ground
Leasehold Estate. All restrictions hereunder shall apply to any purchaser at any
sale. Any Leasehold  Mortgagee or other acquirer of the Ground  Leasehold Estate
pursuant to foreclosure,  assignment in lieu of foreclosure or other proceedings
may,  upon  acquiring  the  Ground  Leasehold  Estate,  subject  to  all  of the
provisions of Paragraph 9. Nothing  contained  herein shall (i) prevent Landlord
from bidding at such a foreclosure or from negotiating  directly with any Ground
Leasehold  Mortgagee  for the purchase of the interest of such Ground  Leasehold
Mortgagee,  or (ii) require any Ground Leasehold  Mortgagee or its assignee as a
condition  to its  exercise of any rights  hereunder  to comply with or cure any
default of Tenant not reasonably

<PAGE>

susceptible to being complied with or cured by such Ground  Leasehold  Mortgagee
or its assignee in order to comply with the provisions of this Paragraph 10.

          The failure of any Ground  Leasehold  Mortgagee  to exercise in timely
fashion its rights  under this  paragraph  10 to prevent a  termination  of this
Ground  Lease by reason of a default  on the part of Tenant  hereunder  shall be
deemed an  automatic  waiver of such rights if Landlord has  otherwise  properly
elected to terminate this Ground Lease.

          Landlord and Tenant shall  cooperate in including in this Ground Lease
by suitable  amendment  from time to time any provision  which may reasonably be
requested by any current or proposed  Institutional  Ground Leasehold  Mortgagee
for the purpose of implementing the mortgagee  protection provision contained in
this Ground Lease and allowing such Ground Leasehold Mortgagee  reasonable means
to  protect  or  preserve  the  lien of the  Ground  Leasehold  Mortgage  on the
occurrence  of a default  on the part of Tenant  under the terms of this  Ground
Lease. Landlord and Tenant agree to execute and deliver (and to acknowledge,  if
necessary,  for recording  purposes) any agreement  necessary to effect any such
amendment;  provided,  however,  that any such  amendment  shall  not in any way
affect the Term or rent under this Ground  Lease nor  otherwise  in any material
respect adversely affect any rights of Landlord under this Ground Lease.

          Notwithstanding anything in this Ground Lease to the contrary,  Tenant
shall have the absolute  right to sell,  assign,  transfer and convey the Ground
Leasehold  Estate without the purchaser,  assignee,  transferee or grantee being
deemed to have  assumed  or  becoming  obligated  to  perform  any of the terms,
covenants  or  conditions  on the  part of  Tenant  to be  performed  hereunder,
provided  Tenant  simultaneously  with  such  sale,   assignment,   transfer  or
conveyance reserves,  retains or receives, as part of a financing transaction, a
sublease or similar interest commonly known as a "leaseback". In such

<PAGE>

event, such purchaser, assignee, transferee or grantee shall, upon giving notice
to  Landlord  in  accordance  with  Paragraph  10, be entitled to the rights and
projections of a Ground  Leasehold  Mortgagee (or, if such purchaser,  assignee,
transferee or grantee is an Institution,  of an  Institutional  Ground Leasehold
Mortgagee)  under this Ground  Lease,  and Tenant shall remain liable under this
Ground  Lease,  subject to the  rights of  assignment  set forth in this  Ground
Lease.

          11. Insurance; Indemnity.

          Tenant may, but shall not have any obligation to,  maintain  so-called
property  insurance  against fire or other casualty  affecting the  Improvements
from  time to time  constituting  part of the  Premises,  it  being  understood,
however,  that Tenant and any  subtenants  holding  under  Tenant shall have the
entire insurable interest in such Improvements and that the proceeds of any such
insurance  shall be applied as set forth in any Ground  Leasehold  Mortgages  or
paid to Tenant or its subtenants.  Tenant may, but shall not have any obligation
to, repair, restore, replace or reconstruct any Improvements damaged by casualty
or apply any  insurance  proceeds to such repair,  restoration,  replacement  or
reconstruction;  however, if Tenant opts not to repair,  replace, or reconstruct
any  improvements  damaged by  casualty  and Tenant is in default of this Lease,
Landlord  has the right to attach said  proceeds  to the extent of the  default,
subject always to the rights of any Ground Leasehold Mortgagee.

          Tenant  shall  maintain   comprehensive   broad  form  general  public
liability  insurance  against  claims for  bodily  injury or death and damage to
personal property  occurring in or about the Premises or any part thereof or the
adjoining  sidewalks,  curbs,  vaults, and vault space, if any, streets or ways,
with contractual  liability  coverage and limits reasonably  adequate to protect
Landlord and Tenant against judgments from time to time being
<PAGE>

awarded in Pennsylvania  for bodily injury,  death and property  damage.  At the
date hereof, such limits shall be at least $10,000,000 combined single limit for
injury and death and at least $500,000 for property  damage,  which limits shall
be increased upon notice of request from Landlord but not more  frequently  than
every (3) years to such amounts as are from time to time customarily  maintained
for similar commercial  properties in the municipality in which the Premises are
located.   Such  insurance   shall  be  effected  with  insurers  of  recognized
responsibility, qualified to do business or subject to service of process in the
state in which the Premises are located.  Certificates  signed by an  authorized
representative of the insurer or duplicates of such insurance  policies shall be
furnished to Landlord and other insured  parties as evidence that such insurance
is maintained by Tenant and in force, where applicable.  No such insurance shall
be subject to cancellation or reduction without at least thirty (30) days' prior
written  notice given by the  insurance  carrier to Landlord  and other  insured
parties.  All such  policies  shall be  issued  in  favor  of  Ground  Leasehold
Mortgagees,  pursuant to standard mortgagee clauses or endorsements,  Tenant and
Landlord as their interest may appear.

          Landlord and Tenant  release each other from any and all  liability or
responsibility  (to such party or anyone claiming through or under such party by
way of subrogation or otherwise) for any loss or damage to the extent covered by
the insurance policies  maintained by, or for the benefit of, such party even if
such  casualty  shall have been caused by the fault or  negligence  of the other
party or its agents.

          If  Tenant  shall  fail  to  maintain  any  insurance  required  to be
maintained hereunder by Tenant for the benefit of Landlord,  and either (i) such
failure shall  continue for ten (10) days after receipt by Tenant of notice from
Landlord  or  insurer  of such  failure  of (ii)  Landlord  shall in good  faith
determine that immediate arrangements for such insurance

<PAGE>

is necessary to prevent  irreparable injury to an insurable interest of Landlord
under such  insurance  and shall  simultaneously  give  notice to Tenant to such
effect, Landlord may cure such failure by making arrangements for such insurance
and reasonable  cost thereof,  with interest at the  Involuntary  Interest Rate,
shall be paid by Tenant to Landlord upon demand as additional rent hereunder.

          Tenant shall indemnify and save Landlord harmless from and against all
liabilities,   obligations,   claims,  damages,   penalties,  cause  of  action,
judgments,  costs and expenses,  including  reasonable  attorneys' fees, imposed
upon or incurred by Landlord by reason of any bodily  injury or death to persons
or damage to personal property  occurring in the Premises or any part thereof or
arising out of the condition thereof or any construction,  repairs,  alterations
or additions  thereon,  or arising in  connection  with  Tenant's  possession or
occupancy  of the Premises or arising from any breach or default on the part of
Tenant in the  performance of any covenant or agreement on the part of Tenant to
be  performed  pursuant to the terms of this Ground  Lease and other  agreements
relating  to the  Premises.  Anything  in  this  Ground  Lease  to the  contrary
notwithstanding,  Tenant  shall have no  obligation  or  liability in respect of
anything resulting from or arising out of any act or negligence of Landlord, its
agents, contractors, servants and employees.

          12. Eminent Domain.

          If,  during the Term of this Ground  Lease,  the entire  Premises  are
taken by eminent domain or destroyed by the action of any public or quasi-public
authority  or  conveyed  in lieu or in  anticipation  thereof  (collectively,  a
"Taking"),  or if a material portion of the Premises are the subject of a Taking
and Tenant,  at  Tenant's  sole  option,  gives  notice to Landlord  electing to
terminate  the Ground  Lease,  then in either of such events  this Ground  Lease
shall terminate as of the date of possession shall be taken by the authority

<PAGE>

and all rent shall be adjusted as of the date. Landlord hereby assigns to Tenant
the right to  receive,  and  there  shall be paid to  Tenant  or, to the  extent
provided in any Ground Leasehold Mortgages, to Ground Leasehold Mortgagees,  the
amount of any  awards or other  sums  received,  in  proportion  to the  damages
sustained by Tenant,  as  compensation  as a result of any Taking,  (i) the full
value of any Improvements which are the subject of a Taking,  whether or not the
value of the Improvements is subject of a separate award or otherwise separately
determined by the Taking authority; and (ii) the full value of the land which is
the subject of the Taking less an amount  equal to the then  discounted  present
value  of the  rental  income  payable  under  this  Ground  Lease  and the then
discounted present value of the residual value of the Land hereby demised, which
amount shall be paid to Landlord.

          If less than the  entire  Premises  are the  subject  of a Taking  and
Tenant does not elect to terminate this Ground Lease, the rent payable hereunder
shall  thereafter by  permanently  abated in the same  proportion  that the land
which  is  the  subject  of the  Taking  bears  to the  entire  parcel  of  land
constituting part of the Premises immediately prior to the Taking.

          In the event  Landlord  becomes  aware of a Taking or involved  in any
proceedings  or  negotiations  in which  there is  reference  to or  threat of a
possible  Taking of any interest in the Premises,  Landlord  shall promptly give
notice  thereof  and such a  general  description  to Tenant  and to any  Ground
Leasehold Mortgagees,  Landlord,  Tenant and any Ground Leasehold Mortgagees may
appear  in  such  proceedings  or  negotiations  and  be  represented  by  their
respective counsel.

          13. Surrender; Default by Tenant.
<PAGE>
          At the  expiration or earlier  termination  of the Term of this Ground
Lease, Tenant shall surrender the Premises to Landlord.

          If  Tenant  shall  neglect  or fail to pay or cause to be paid rent or
other sums to be paid by it within  thirty (30) days after  notice to Tenant and
to all Ground  Leasehold  Mortgagees from Landlord that the same is overdue,  or
shall neglect or fail to perform or cause to be performed any of Tenant's  other
covenants,  agreements or obligations hereunder for sixty (60) days after notice
to Tenant and all Ground Leasehold  Mortgagees from Landlord specifying the same
(provided  that such period  shall be extended if the matters  complained  of in
such notice  cannot  reasonably  be performed  within sixty (60) days and Tenant
begins  promptly to perform such matters  within sixty (60) days and  thereafter
prosecutes the correction to completion with reasonable diligence), then, in any
of such cases,  Landlord may, after giving an additional thirty (30) days notice
of its  intention  to do so to  Tenant  and  all  Ground  Leasehold  Mortgagees,
terminate  the Term of this Ground Lease,  in which event Tenant shall  promptly
vacate the Premises.  Payment or performance by any Ground  Leasehold  Mortgagee
shall be deemed to be payment or performance by Tenant.

          14. Landlord's Mortgages.

          Landlord  covenants and agrees that it shall not grant  mortgages upon
Landlord's fee interest in the Premises, at any time.

          15. Right of First Refusal.

          If Landlord  wishes to sell the  Premises at any time during the Term,
and if Tenant is not then in  Terminable  Default,  Landlord  shall  first  give
Tenant a notice  offering to sell the Premises to Tenant,  specifying  the terms
and conditions on which Landlord is willing to sell the Premises.  Tenant  shall
have the right to accept such offer by giving written

<PAGE>
notice to Landlord  within  thirty (30) days after  Landlord's  notice is given,
which notice of acceptance shall be accompanied by the deposit (not in excess of
10% of the  price)  called  for in  Landlord's  notice.  If  Tenant  so  accepts
Landlord's offer,  Landlord shall sell and Tenant shall purchase the Premises on
all of the terms and  conditions  of  Landlord's  offer.  If Tenant  does not so
accept Landlord's  offer,  Landlord shall be entitled at any time within six (6)
months  thereafter to sell the Premises on terms and  conditions  not materially
more  favorable to the buyer than those offered to Tenant.  If Landlord does not
sell the Premises within such six (6) month period Landlord shall not thereafter
sell the Premises without giving Tenant such an offer. Any transfers by Landlord
to members of the Morelli  family  shall be exempt from the  provisions  of this
paragraph.  Any and all members of the Morelli  family who become  owners of the
Premises  shall be bound by the  provisions  of the  paragraph  for  purposes of
transfers to purchasers not a member of the Morelli family.

          16. Non-Merger of Fee and Ground Leasehold Estates.

          If  both  Landlord's  and  Tenant's  estates  in the  Premises  or the
Improvements  or both become  vested in the same owner,  this Ground Lease shall
nevertheless  not be destroyed by agreement or by application of the doctrine or
principle of merger except with the express,  recorded  written election of said
owner  and the  express,  recorded  written  consents  of all  Ground  Leasehold
Mortgagees.

          17. Limited Liability of Landlord, Tenant.

          The term  "Landlord,"  as used in this  Ground  Lease,  means only the
owner from time to time of the land which constitutes part of the Premises, such
that in the event of any sale or sales of such land, or assignments,  transfers,
or other  conveyances of Landlord's  rights under this Ground Lease, the selling
or transferring Landlord shall be

<PAGE>

entirely  freed and  relieved  of any  covenants  and  obligations  of  Landlord
hereunder thereafter arising.

         Landlord  agrees that  Landlord  shall look  solely to Tenant's  Ground
Leasehold Estate,  including without limitation  thereof,  the Premises,  in the
event of any  default or breach by Tenant  with  respect to any of the terms and
provisions  of this Ground  Lease on the part of the Tenant to be  performed  or
observed,  it being  understood  and agreed that  Tenant  shall have no personal
liability  and  that no  other  assets  of  Tenant  shall  be  subject  to levy,
execution, or other judicial process or aware for the satisfaction of Landlord's
claim.  For the  purposes of this  paragraph,  the term  "Tenant"  includes  its
general and limited partners, trustees, beneficiaries,  directors, officers, and
stockholders (as applicable from time to time) and Tenant's agents,  contractors
and employees.

         18. Estoppel Certificates.

         Tenant  agrees at any time and from time to time upon not less than ten
(10) days' prior  written  notice by Landlord or any other party  designated  by
Landlord, to execute, acknowledge and deliver, without charge, to Landlord or to
any other party designated by Landlord,  a statement in writing  certifying that
this Ground Lease is in full force and effect and  unmodified  (or if there have
been  modifications,  identifying  the same),  that Tenant has not  received any
notice of default  under or  termination  of this Ground Lease (or if Tenant has
received such notice,  that it has been revoked,  if such be the case), the date
to which the rents to be paid hereunder by Tenant have been paid, and such other
matters  relating to the Premises,  Tenant and this Ground Lease as Landlord may
reasonably request.

         Landlord  agrees  at any time and from  time to time upon not less than
ten (10) days' prior written notice by Tenant,  or a Ground Leasehold  Mortgagee
or any other party

<PAGE>

designated by Tenant,  to execute,  acknowledge and deliver,  without charge, to
Tenant, any Ground Leasehold Mortgagee or any other party designated by Tenant a
statement  in writing  certifying  that this  Ground  Lease is in full force and
effect and  unmodified  (or if there have been  modifications,  identifying  the
same),  that no notice of default or  termination  of this Ground Lease has been
served on Tenant  (or if  Landlord  has  served  such  notice,  that it has been
revoked,  if such be the case),  that  Landlord has no knowledge of any event or
condition  which would  immediately or with the giving of any notice or lapse of
time  entitle it to serve notice of  termination  of this Ground Lease on Tenant
(or if it has such knowledge,  identifying the event or condition which would or
may give  rise to such  right to  terminate),  the date to which the rents to be
paid hereunder have been paid, and such other matters  relating to the Premises,
Landlord and this Ground Lease as Tenant may reasonably request.

         19. Notices.

         All notices and other communications  required or permitted to be given
hereunder shall be in writing and mailed by certified or registered mail, return
receipt  requested,  and addressed as hereinafter  provided.  The time period in
which a response to any notice must be made, if any,  shall commence to run from
the date of receipt, refusal, or attempted delivery on the return receipt of the
notice. Any party listed below may change its address under this Paragraph 20 by
notice to the other party hereto. Until further notice,  notices hereunder shall
be addressed as follows:

If to Landlord:                 Loretta M. Cimeo
                                c/o Thomas W. Morelli
                                209 Great Valley Center
                                Malvern, PA  19355

<PAGE>

with a copy to:

If to Tenant:                   Promus Hotels, Inc.
                                755 Crossover Lane
                                Memphis, TN  38117
                                Attention: General Counsel

and with a copy to each Ground Leasehold Mortgagee;

         The  address  listed for  Landlord  above shall be the address at which
payments of rent and other sums payable  hereunder  shall be made.  Landlord may
change the  address for making  payments  hereunder  by notice to Tenant,  which
address may be different from Landlord's address for notices hereunder.

         20. No Recording; Notices of Ground Lease.

         This Ground  Lease shall not be recorded;  Landlord  and Tenant  hereby
agree, each at the request of the other or of any leasehold mortgagee,  promptly
to  execute,  acknowledge,  and deliver in  recordable  form such short forms or
memorandum  of lease or notices  of  assignments  of rents and  profits or other
instruments containing such information as may from time to time be necessary or
appropriate  under the law of the state in which the Premises  are located.  The
initial  notice of lease or memorandum of lease shall be recorded at the expense
of Landlord  and any other such  instrument  shall be recorded at the expense of
the party requesting such instrument.

         21. Attorneys' Fees and Other Costs.

         The parties to this Ground Lease shall bear their own attorneys fees in
relation to negotiating and drafting this Agreement.  Should Landlord or  Tenant
engage in litigation to enforce their  respective  rights pursuant  hereto,  the
prevailing party shall have the right to indemnify by the  non-prevailing  party
for an amount equal to the prevailing party's reasonable  attorneys' fees, court
costs, and expenses arising therefrom.

<PAGE>

         22. General.

         This Ground Lease shall be governed by and construed in accordance with
the laws of the Commonwealth of  Pennsylvania.  If any provisions of this Ground
Lease  shall to any  extent  and for any  reason  be  invalid  or  illegal,  the
remainder of this Ground Lease shall not be affected thereby.  This Ground Lease
may be amended only by instruments  in writing  executed by Landlord and Tenant.
The failure of Landlord to insist in any one or more  instances  upon the strict
performance  of any of the  covenants of this Ground  Lease,  or to exercise any
remedy  herein set forth,  shall not  constitute  or be construed as a waiver or
relinquishment  of such covenant or remedy in future such instances.  The titles
of the Paragraphs  contained herein are for  identification and convenience only
and shall not be considered in construing this Ground Lease. Unless repugnant to
the context,  the words  "Landlord" and "Tenant"  appearing in this Ground Lease
shall be  construed  to mean those  named in  Paragraph  1 and their  respective
successors  and  assigns,  and  those  claiming  by,  through,  or  under  them,
respectively.  Payment or performance by any Ground  Leasehold  Mortgagee of any
covenant  or  obligation  of Tenant  hereunder  shall be deemed to be payment or
performance by Tenant.

         23. Power of Attorney.

         The  undersigned,  being all of the owners of the Premises,  have made,
and by their execution of this Ground Lease, hereby appoint Thomas W. Morelli as
their true and lawful  attorney-in-fact  for each of them to enter  into,  make,
sign, modify, amend,  compromise,  settle, deliver and to perform each and every
act or thing  necessary  or  desirable  to be done in the exercise of any of the
rights or powers granted in this Ground Lease.  The  undersigned  individuals do
hereby confirm and ratify any writing, or thing that, in the option of Thomas W.
Morelli, is necessary or proper to be entered into,

<PAGE>

made,  signed,  executed,  delivered or  acknowledged in the performance of this
Ground  Lease.  The rights,  powers,  and  authority  of Thomas W.  Morelli,  as
attorney-in-fact, shall commence and be in full force on the date of this Ground
Lease.  These rights,  powers,  and authorities shall continue in full force and
effect until  termination of this Ground Lease. If Thomas W. Morelli is, for any
reason, unable to act as attorney-in-fact, Landlord agrees to promptly appoint a
successor  attorney-in-fact having the same rights, powers and authority granted
to Thomas W.  Morelli  pursuant to this  Section 23. The  undersigned  do hereby
ratify and confirm the  Agreement  To Lease  pertaining  to the  Premises  dated
September 18, 1995, between Thomas W. Morelli and Promus Hotels, Inc.

         IN WITNESS  WHEREOF,  the parties  have caused this Ground  Lease to be
executed under seal as of the day and year first above written.

                                Landlord:

                                /s/ Loretta M. Cimeo
                                ------------------------------------------------
                                Loretta M. Cimeo

                                /s/ George C. Morelli
                                ------------------------------------------------
                                George C. Morelli

                                /s/ Joseph P. Morelli
                                ------------------------------------------------
                                Joseph P. Morelli

                                /s/ Esther E. Morelli
                                ------------------------------------------------
                                Esther E. Morelli

                                /s/ Thomas W. Morelli
                                ------------------------------------------------
                                Thomas W. Morelli

                                /s/ Charles P. Morelli
                                ------------------------------------------------
                                Charles P. Morelli

                                /s/ John J. Morelli
                                ------------------------------------------------
                                John J. Morelli

                                Tenant:     PROMUS HOTELS, INC.

                                By:  /s/ Terry O'Mally
                                     -------------------------------------------
                                Its:  Vice President
                                     -------------------------------------------

<PAGE>

                         CHESTER VALLEY ENGINEERS, INC.
                        CIVIL ENGINEERS & LAND SURVEYORS
                                   EST. 1935

                         #13811 - Homewood  Suites
                         Line Easement Description
                         April 11, 1996
                         Dwg. 15554
                         Page 1

                         ALL  THAT  CERTAIN  line  SITUATE  in  East   Whiteland
                         Township,  Chester County,  Pennsylvania being shown as
[ILLEGIBLE]              Line Easement  Description on Land Development Plan for
                         Homewood  Suites dated November 2, 1995, and being last
                         revised  March 26,  1996 by Chester  Valley  Engineers,
                         Inc.,  Paoli,   Pennsylvania,   and  being  more  fully
                         described  along the  centerline  of a  proposed  storm
                         sewer pipe as follows:

                         BEGINNING  at a point  on  line of land  now or late of
                         Penn  State  University,  said  beginning  point  being
                         measured the two (2)  following  courses and  distances
                         from an iron pin on the southeasterly right of way line
                         of Swedesford Road, E.R.-1002.  94' wide, said iron pin
                         being a common  corner  with  said  land of Penn  State
                         University:  (1) South 28 degrees 04 minutes 35 seconds
                         East 566 35 feet to an iron pin;  (2) South 59  degrees
                         09  minutes  34  seconds  West 17.06 feet to a point of
                         intersection  with a storm  sewer  pipe,  the  point of
                         beginning;   thence   from  the  point  of   beginning,
                         following  said storm sewer pipe  through  said land of
                         Penn State  University had three (3) following  courses
                         and  distances:  (1) South 17  degrees  15  minutes  44
                         seconds  East 32.94 feet to MH #3; (2) South 78 degrees
                         10 minutes 39 seconds  East  241.27  feet to MH #4; (3)
                         continuing  along said storm sewer pipe  easterly to an
                         existing Basin Easement, the point of terminus.

                                  EXHIBIT "A"

    159 WEST LANCASTER AVENUE o P.O. BOX 447 o PAOLI o PENNSYLVANIA o 18508
                      (618) 644-4625 o Fax (618) 889-9183
<PAGE>

                           AMENDMENT TO GROUND LEASE

This  Amendment to Ground Lease  (Amendment)  is entered into as of this the 1st
day of July,  1996,  between Thomas W. Morelli  (hereafter  Landlord) and Promus
Hotels, Inc. (hereafter Tenant).

                                    RECITALS

A.   Of even date  herewith,  Landlord  and Tenant  entered  into a Ground Lease
     regarding  certain  real  property  located  in  Malvern,   East  Whiteland
     Township,  Pennsylvania,  as more  particularly  described  on an Exhibit A
     attached thereto.

B.   Landlord  and  Tenant now desire to amend  certain  portions  of the Ground
     Lease as more particularly set forth herein.

C.   Thomas W.  Morelli is executing  this  Amendment  as  attorney-in-fact  for
     Loretta M. Cimeo, George C. Morelli,  Joseph P. Morelli, Esther E. Morelli,
     Charles P.  Morelli,  and John J. Morelli  pursuant to Section 23. Power of
     Attorney of the Ground Lease.

                                   AGREEMENT

Now,  Therefore,  in consideration of the mutual terms and conditions  contained
herein,  Landlord and Tenant  agree that the Ground  Lease is hereby  amended as
follows:

1.   Section 4. Rent is amended by deleting the second paragraph in its entirety
     and substituting the following language therefore:

     The Annual  Rent with  respect to the first five (5) Ground  Lease Years of
     the Original Term shall be $100,000,  commencing on May 1, 1997 or upon the
     date that the  Improvements  on the  Premises  are opened to the public for
     business, whichever date occurs first.

2.   Except as amended hereby, the Ground Lease shall remain unchanged.

<PAGE>

In Witness Whereof,  Landlord and Tenant have executed this Amendment  effective
on the day and date first written above.

                                                     LANDLORD: THOMAS W. MORELLI

                                                     /s/ Thomas W. Morelli
                                                     ---------------------------

                                                     TENANT: PROMUS HOTELS, INC.

                                                     BY: /s/ Terry O'Malley
                                                         -----------------------

                                                     ITS: Vice President
                                                          ----------------------

<PAGE>
                         CHESTER VALLEY ENGINEERS, INC.
                        CIVIL ENGINEERS & LAND SURVEYORS
                                    EST. 1935

                         #13811 - Homewood  Suites
                         Line Easement Description
                         April 11, 1996
                         Dwg. 15554
                         Page 1

                         ALL  THAT  CERTAIN  line  SITUATE  in  East   Whiteland
                         Township,  Chester County,  Pennsylvania being shown as
[ILLEGIBLE]              Line Easement  Description on Land Development Plan for
                         Homewood  Suites dated November 2, 1995, and being last
                         revised  March 26,  1996 by Chester  Valley  Engineers,
                         Inc.,  Paoli,   Pennsylvania,   and  being  more  fully
                         described  along the  centerline  of a  proposed  storm
                         sewer pipe as follows:

                         BEGINNING  at a point  on  line of land  now or late of
                         Penn  State  University,  said  beginning  point  being
                         measured the two (2)  following  courses and  distances
                         from an iron pin on the southeasterly right of way line
                         of Swedesford Road, E.R.-1002.  94' wide, said iron pin
                         being a common  corner  with  said  land of Penn  State
                         University:  (1) South 28 degrees 04 minutes 35 seconds
                         East 566 35 feet to an iron pin;  (2) South 59  degrees
                         09  minutes  34  seconds  West 17.06 feet to a point of
                         intersection  with a storm  sewer  pipe,  the  point of
                         beginning;   thence   from  the  point  of   beginning,
                         following  said storm sewer pipe  through  said land of
                         Penn State  University the three (3) following  courses
                         and  distances:  (1) South 17  degrees  15  minutes  44
                         seconds  East 32.94 feet to MH #3; (2) South 78 degrees
                         10 minutes 39 seconds  East  241.27  feet to MH #4; (3)
                         continuing  along said storm sewer pipe  easterly to an
                         existing Basin Easement, the point of terminus.

                                  EXHIBIT "A"

    159 WEST LANCASTER AVENUE o P.O. BOX 447 o PAOLI o PENNSYLVANIA o 18508
                      (618) 644-4625 o Fax (618) 889-9183
<PAGE>

                        SECOND AMENDMENT TO GROUND LEASE
                                      AND
                         AMENDMENT TO SHORT FORM LEASE

         THIS SECOND AMENDMENT TO GROUND LEASE AND AMENDMENT TO SHORT FORM LEASE
(collectively,  this  "Amendment")  is  entered  into as of this  the 6th day of
March,  2000,  between LORETTA M. CIMEO,  GEORGE C. MORELLI,  JOSEPH P. MORELLI,
ESTHER E.  MORELLI,  CHARLES P.  MORELLI,  THOMAS W. MORELLI AND JOHN J. MORELLI
(colletively, "Landlord") and PROMUS HOTELS, INC. (hereafter, "Tenant").

                                    RECITALS

         A. On July 1, 1996  Landlord  and Tenant  entered  into a Ground  Lease
regarding  certain real property  located in Malvern,  East Whiteland  Township,
Pennsylvania,  as amended by  Amendment  To Ground  Lease  between  Landlord and
Tenant also dated July 1, 1996 (collectively, the "Ground Lease").

         B.  Landlord  and Tenant also entered into a Short Form Lease which was
recorded in the Office of the Recorder of Deeds, Chester County, Pennsylvania on
November  15,  1996  as  Instrument  No.  68773  in Book  4107,  Page  2237  and
re-recorded  as  Instrument  No. 24154 in Book 4171,  Page 2029 (the "Short Form
Lease").

         C. Due to an error Exhibit A attached to the Ground Lease and the Short
Form Lease does not describe the premises intended to be demised pursuant to the
Ground Lease.

         D. Landlord and Tenant desire to correct said error by amending Exhibit
A attached to the Ground Lease and the Short Form Lease.

         E. Thomas W. Morelli is executing  this  Amendment as  attorney-in-fact
for Lorena M. Cimeo,  George C. Morelli,  Joseph P. Morelli,  Esther E. Morelli,
Charles  P.  Morelli,  and John J.  Morelli  pursuant  to Section  23.  Power of
Attorney of the Ground Lease.

                                   AGREEMENT

         NOW, THEREFORE, in consideration of ten dollars ($10.00) and other good
and valuable consideration,  Landlord and Tenant agree that the Ground Lease and
the Short Form Lease is each amended as follows:

         1.  Exhibit A attached  to each of the Ground  Lease and the Short Form
Lease is hereby  deleted in its entirety and replaced with Exhibit A attached to
this Amendment.

         2. Except as amended hereby,  the Ground Lease and the Short Form Lease
shall remain unchanged.

<PAGE>

         IN WITNESS  WHEREOF,  Landlord and Tenant have executed this  Amendment
effective on the day and year first above written.

                                                    LANDLORD:

                                                    /s/ Thomas W. Morelli
                                                    ---------------------------
                                                    THOMAS W. MORELLI
                                                    as attorney-in-fact

                                                    TENANT:

                                                    PROMUS HOTELS, INC.

                                                    By /s/ Kevin W. Kern
                                                       ------------------------
                                                       Name: Kevin W. Kern
                                                       Title: V.P.

                                       2
<PAGE>

STATE OF PENNSYLVANIA    )
                         ) ss.:
COUNTY OF CHESTER        )

         On this 6th day of March,  2000,  before me, the  undersigned  officer,
personally appeared Thomas W. Morelli, known to me (or satisfactorily proven) to
be the person whose name is 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/ Lynda Ellison
                                             -----------------------------------
                                             Notary Public

My commission expires:

     -----------------------------------
                Notarial Seal
         Lynda Ellison, Notary Public
         Malvern Boro. Chester County
     My Commission Expires June 17, 2002
     -----------------------------------
Member, Pennsylvania Association of Notaries

<PAGE>

STATE OF TENNESSEE   )
                     ) ss.:
COUNTY OF SHELBY     )

         On this 13th day of March,  2000,  before me, the undersigned  officer,
personally  appeared Kevin W. Kern,  Vice President of PROMUS HOTELS,  INC., who
acknowledged  himself to be the Vice President of said  corporation and that he,
as  such  officer,  being  authorized  to do so on  behalf  of the  corporation,
executed the  foregoing  instrument,  for the  purposes  therein  contained,  by
signing the name of the corporation, as Vice President.

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

                                                         /s/ Connie L. ????
                                                         -----------------------
                                                         Notary Public

My commission expires:

12-16-2000
----------------------
                            [NOTARY PUBLIC GRAPHIC]
<PAGE>

                                   EXHIBIT A

                         LEGAL DESCRIPTION OF PREMISES

ALL THAT CERTAIN of land SITUATE in East  Whiteland  Township,  Chester  County,
Pennsylvania, being bounded and described according to a Survey and Plan thereof
entitled ALTA/ACSM Land Title Survey for Promus Hotel Corporation,  dated August
12, 1996 by Chester Valley Engineers, Inc., Paoli, Pennsylvania,  and being more
fully described as follows:

BEGINNING at a point on the southerly Legal Right of May Line of Swedesford Road
- S.R.  1002, 94 feet wide, a corner in common of these and lands now or late of
the Pennsylvania State University:  THENCE from the point of beginning,  leaving
said right of way line, along said lands, South 28 degrees 04 minutes 35 seconds
East  566.35  feet  to a  point  on  line  of  other  lands  now or  late of the
Pennsylvania  State  University:  THENCE along said lands,  along the  northerly
Legal  Right of Way Line for  Limited  Access  of U.S.  Routh  202 - S.R.  0202,
variable width,  South 59 degrees 09 minutes 34 seconds West 168.05 feet: THENCE
continuing  along said right of way line, North 88 degrees 24 minutes 32 seconds
West 186.61  feet to a corner of lands now or late of Loretta M.  Cimeo,  et al:
THENCE  leaving  said right of way line,  along said lands,  North 28 degrees 04
minutes 35 second West 457.22  feet to a point on the  southerly  Legal Right of
Way Line of Swedesford Road - S.R. 1002,  aforesaid:  THENCE along said right of
way line,  along a curve to the right having a radius of 13.468.61  feet. an arc
length of 330.94  feet,  and a chord  bearing  North 57  degrees  36  minutes 55
seconds East 330.94 feet to the point of beginning.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00010-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00010-of-00352.parquet"}]]