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EXHIBIT 10.28

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                           THIRD AMENDED AND RESTATED
                            LINE OF CREDIT AGREEMENT

                                     BETWEEN

                          AGREE LIMITED PARTNERSHIP AND
                            AGREE REALTY CORPORATION

                                       AND

                    LASALLE BANK MIDWEST NATIONAL ASSOCIATION
                    INDIVIDUALLY AND AS AGENT FOR THE LENDERS

                                       AND
                                  TOGETHER WITH

                                FIFTH THIRD BANK
                                     LENDERS

                          DATED AS OF NOVEMBER 27, 2006

                                 $50,000,000.00

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                           THIRD AMENDED AND RESTATED
                            LINE OF CREDIT AGREEMENT

     THIS THIRD AMENDED AND RESTATED LINE OF CREDIT AGREEMENT ("Agreement"),
dated as of November 27, 2006, is made among AGREE LIMITED PARTNERSHIP, a
Delaware limited partnership ("Borrower"), AGREE REALTY CORPORATION, a Maryland
corporation (the "Company"), and LASALLE BANK MIDWEST NATIONAL ASSOCIATION, a
national banking association (formerly known as Standard Federal Bank, N.A.),
individually and as Agent for the Lenders ("Agent"), and together with FIFTH
THIRD BANK, a Michigan banking corporation ("Fifth Third") as Lenders.

                                    RECITALS

     Borrower, the Company, Agent and Bank One, N.A. have been parties to a
Second Amended and Restated Line of Credit Agreement dated as of November 3,
2006 (the "Line of Credit Agreement"). Lenders, Borrower and Company wish to
make certain technical amendments and clarifications to the Line of Credit
Agreement.

     NOW, THEREFORE, in consideration of their mutual covenants and agreements
set forth in this Agreement, the parties hereto agree as follows:

     Borrower and Company acknowledge and admit that the Obligations under the
Line of Credit Agreement dated November 3, 2006, are in full force and effect in
accordance with their terms and neither the Borrower or Company have any
defenses, setoffs or counter-claims with respect thereto or with respect to the
existing Line of Credit Agreement ("Prior Agreement"). Further, as of the date
hereof, Borrower and Company acknowledge that the outstanding Advances under the
Prior Agreement are in the amount of $____________ with interest paid to
_____________ 30, 2006 and that there are no defenses, setoffs or counter-claims
with respect to such Advances.

SECTION 1. DEFINITIONS.

     DEFINITIONS. The following terms shall have the following meanings unless
the context otherwise requires. Defined terms in this Agreement shall include in
the singular number the plural and in the plural number the singular.

     "ADJUSTED FUNDS FROM OPERATION" means, for the period for which it is to be
determined, the operating income of Borrower and the Company for such period,
less operating expenses of Borrower and the Company for such period, determined
in accordance with GAAP, calculated on a basis consistent with the definitions
of Net Operating Income and Operating Expenses herein; but including in
operating expenses all general and administrative expenses, and excluding
operating income and expenses resulting from (i) cumulative changes in
accounting practices, (ii) discontinued operations, (iii) extraordinary items,
(iv) net income of a Subsidiary that is unavailable to Borrower or the Company,
(iv) net income not readily convertible into Dollars or remittable to the United
States, and (v) net income from corporations, partnerships, associations, joint
ventures or other entities in which Borrower or the Company or a Subsidiary has
a minority interest or in which Borrower or the Company does not have control,


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except to the extent actually received. For the purpose of this definition,
"control" means the possession directly or indirectly of the power to direct or
cause the direction of the management and policies of a Person, whether through
the ownership of voting securities or by contract or otherwise.

     "ADJUSTED NET WORTH" means Borrower's and Company's total assets (excluding
intangible assets) less total liabilities, determined in accordance with GAAP.

     "ADVANCE" means each advance and readvance of the principal amount of the
Loan.

     "AFFILIATE" means, with reference to a specified Person, any Person that
directly or indirectly through one or more intermediaries Controls or is
Controlled by or is under common Control with the specified Person and any
Subsidiaries of such specified Person.

     "AGENT" means Agent or any successor Agent appointed pursuant to Section 8.

     "AGREEMENT" means this Second Amended and Restated Line of Credit Agreement
as the same may from time to time hereafter be modified, supplemented or
amended.

     "ANNUAL OPERATING BUDGET" has the meaning provided in Section 5.1.

     "APPLICABLE LAWS" means all existing and future federal, state and local
laws, statutes, orders, ordinances, rules, and regulations or orders, writs,
injunctions or decrees of any court affecting Borrower or any Property, or the
use thereof including, but not limited to, all laws regarding the operation of
the Properties, all zoning, fire safety and building codes, the Americans with
Disabilities Act, and all Environmental Laws (as defined in the Environmental
Indemnity) and Title VIII of the Civil Rights Act of 1968, as amended by the
Housing and Community Developmental Act of 1974.

     "ASSET DISPOSITION" shall mean the sale, lease, assignment or other
transfer for value (each a "Disposition") by the Borrower or Company to any
Person (other than the Borrower or Company) of any asset or right of the
Borrower or Company (including, the loss, destruction or damage of any thereof
or any actual or threatened (in writing to the Borrower or Company)
condemnation, confiscation, requisition, seizure or taking thereof), other than
(a) the Disposition of any asset which is to be replaced, and is in fact
replaced, within thirty (30) days with another asset performing the same or a
similar function, (b) the sale or lease of inventory in the ordinary course of
business.

     "AVAILABLE LOAN AMOUNT" means $50,000,000, as the same may be subsequently
increased pursuant to Section 5.13, but in no event to exceed the Borrowing
Base.

     "BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy", as amended from time to time, and any successor statute or
statutes and all rules and regulations from time to time promulgated thereunder,
and any comparable foreign laws relating to bankruptcy, insolvency or creditors'
rights.

     "BASE RATE" means, at any particular date, the Prime Rate minus 0.75%


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     "BASE RATE MARGIN" has the meaning assigned to such term in Section 2.6.

     "BASE RATE PORTION" means the portion of the Loan made and/or being
maintained at a rate of interest based upon the Base Rate.

     "BORROWER" has the meaning assigned to such term in the first paragraph of
this Agreement.

     "BORROWING BASE" shall mean an amount equal to the lesser of (i) 60% of the
Capital Value of the Borrowing Base Properties and (ii) the Pro-Forma Debt
Amount.

     "BORROWING BASE CERTIFICATE" means a certificate in form attached as
Exhibit A.

     "BORROWING BASE COVENANT" is defined in section 5.13, below.

     "BORROWING BASE PROPERTY" means each Property that is designated by
Borrower in a Borrowing Base Certificate to be part of the Borrowing Base.

     "BUSINESS DAY" means (i) for all purposes other than as covered by clause
(ii) below, any day excluding Saturday, Sunday and any day which shall be in
Detroit, Michigan and Chicago, Illinois a legal holiday or a day on which Agent,
any Lender or banking institutions are authorized or required by law or other
government actions to close, and (ii) with respect to all notices and
determinations in connection with, and payments of principal and interest on,
LIBOR Portions, any day which is a Business Day described in clause (i) and
which is also a day for trading by and between banks for U.S. dollar deposits in
the relevant interbank LIBOR market.

     "CAP RATE" means 7.5% as to any Property that is 100% occupied by
Walgreen's and 8.5% as to any other Property, provided however, that Agent may
increase such Cap Rates at any time to reflect changes in market conditions, and
the Required Lenders may decrease such Cap Rates at any time to reflect changes
in market conditions.

     "CAPITAL VALUE" means, as of any date, the Net Operating Income from each
Property for the most recently ended twelve (12) month period divided by the
appropriate Cap Rate.

     "CAPITALIZED LEASE" as to any Person means (i) any lease of property, real
or personal, the Obligations under which are capitalized on the consolidated
balance sheet of such Person and its Subsidiaries, and (ii) any other such lease
to the extent that the then present value of the minimum rental commitment
thereunder should, in accordance with GAAP, be capitalized on a balance sheet of
the lessee.

     "CAPITALIZED LEASE OBLIGATIONS" as to any Person means all obligations of
such Person under or in respect of Capitalized Leases.

     "CLOSING DATE" means the date of this Agreement.

     "CODE" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor statute, together with all rules and regulations from
time to time promulgated thereunder.


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     "COMMITMENT" means the commitment of each Lender to make its Pro Rata Share
of Advances pursuant to Section 2.1(a), up to the amount set forth below the
signature of each Lender on the signature page of this Agreement.

     "CONSOLIDATED TANGIBLE NET WORTH" means the sum of (i) total stockholders
equity of Borrower and the Company on a consolidated basis, less intangible
assets, determined in accordance with GAAP as of the end of each fiscal quarter
of Borrower and the Company.

     "COMPANY" means Agree Realty Corporation, a Maryland corporation, the sole
general partner of Borrower.

     "CONTINGENT OBLIGATION" as to any Person means any obligation of such
Person guaranteeing or intended to guarantee any Indebtedness, leases (including
Capitalized Leases) dividends or other obligations ("primary obligations") of
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor,(ii) to advance or
supply funds (x) for the purchase or payment of any such primary obligation or
(y) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth, solvency or other financial condition of
the primary obligor, (iii) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary obligation
or (iv) otherwise to assure or hold harmless the owner of such primary
obligation against loss in respect thereof; provided, however, that the term
Contingent Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Contingent Obligation
is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform
thereunder) as determined by such Person in good faith.

     "CONTROL" means in (a) in the case of a corporation, ownership, directly or
through ownership of other entities, of at least ten percent (10%) of all the
voting stock (exclusive of stock which is voting only as required by applicable
law or in the event of nonpayment of dividends and pays dividends only on a
nonparticipating basis at a fixed or floating rate), and (b) in the case of any
other entity, ownership, directly or through ownership of other entities, of at
least ten percent (10%) of all of the beneficial equity interests therein
(calculated by a method that excludes from equity interests, ownership interests
that are nonvoting (except as required by applicable law or in the event of
nonpayment of dividends or distributions) and pay dividends or distributions
only on a non-participating basis at a fixed or floating rate) or, in any case,
(c) the power directly or indirectly, to direct or control, or cause the
direction of, the management policies of another Person, whether through the
ownership of voting securities, general partnership interests, common directors,
trustees, officers by contract or otherwise. The terms "controlled" and
"controlling" shall have meanings correlative to the foregoing definition of
"Control."


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     "DEBT SERVICE COVERAGE RATIO" means for the period for which it is to be
determined, the ratio of (a) EBITDA to (b) Total Debt Service, calculated on an
annual basis as of December 31 of each year.

     "DEFAULT" means any event, act or condition which, with the giving of
notice or lapse of time, or both, would constitute an Event of Default.

     "DEFAULT RATE" means the rate per annum determined by adding 4% to the
Effective Base Rate.

     "DEPRECIATION" shall mean the total amounts added to depreciation,
amortization, obsolescence, valuation and other proper reserves, as reflected on
the Borrower's financial statements and determined in accordance with GAAP.

     "DISTRIBUTION" means any dividends (other than dividends payable solely in
common stock), distributions, return of capital to any stockholders, general or
limited partners or members, other payments, distributions or delivery of
property or cash to stockholders, general or limited partners or members, or any
redemption, retirement, purchase or other acquisition, directly or indirectly,
of any shares of any class of capital stock now or hereafter outstanding (or any
options or warrants issued with respect to capital stock) general or limited
partnership interest, or the setting aside of any funds for the foregoing.

     "DOLLARS" and the symbol "$" each mean the lawful money of the United
States of America.

     "DRAW PERIOD" shall mean the period commencing on the date hereof and
expiring on the date which is thirty-six (36) months after the date hereof.

     "EBITDA" shall mean for any period, (a) the sum for such period of: (i) Net
Income, plus, (ii) Interest Charges, plus (iii) federal and state income taxes,
plus (iv) Depreciation, plus (v) non-cash management compensation expense, plus
(vi) all other non-cash charges.

     "EFFECTIVE BASE RATE" means the Base Rate plus the Base Rate Margin as from
time to time is in effect.

     "EMPLOYEE BENEFIT PLAN" shall mean an employee benefit plan within the
meaning of Section 3(3) of ERISA.

     "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time and any successor statute, together with all rules and
regulations promulgated thereunder. Section references to ERISA are to ERISA, as
in effect at the date of this Agreement and any provisions of ERISA substituted
therefor.

     "ERISA CONTROLLED GROUP" means any corporation or entity or trade or
business or person that is a member of any group described in Section 414(b),
(c), (m) or (o) of the Code of which Borrower or the Company is a member.

     "EVENT OF DEFAULT" has have the meaning assigned to such term in Section 7.


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     "FEDERAL RESERVE BOARD" means the Board of Governors of the Federal Reserve
System as constituted from time to time, or any successor thereto in function.

     "FIRREA" means the Financial Institutions Reform, Recovery and Enforcement
Act of 1989, as amended from time to time.

     "FUNDING COSTS" means all amounts payable in respect of any Lender or
Participant pursuant to Section 2.16.

     "FUNDS FROM OPERATIONS" means consolidated net income (loss) of Borrower
and the Company calculated in accordance with GAAP, excluding gains (or losses)
from debt restructuring and sales (or adjustments to basis of properties or
other assets), plus non-cash charges (primarily depreciation and amortization),
and after adjustments for unconsolidated partnerships and joint ventures, which
adjustments shall be calculated on the same basis.

     "FURNISHED INFORMATION" has the meaning assigned to such terms in Section
4.15.

     "GAAP" means United States generally accepted accounting principles on the
date hereof and as in effect from time to time during the term of this
Agreement, and consistent with those utilized in the preparation of the
financial statements referred to in Section 5.1.

     "GUARANTOR" means Agree Realty Corporation, a Maryland corporation, the
sole general partner of Borrower.

     "GUARANTY" means the Guaranty from the Company to Lenders dated the Closing
Date, and any amendment or supplement thereto or any restatement thereof

     "INDEBTEDNESS" of any Person including Borrower shall mean, without
duplication, (i) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services, (ii) all indebtedness of such
Person evidenced by a note, bond, debenture or similar instrument, (iii) the
face amount of all letters of credit issued for the account of such Person and,
without duplication, all unreimbursed amounts drawn thereunder, (iv) all
indebtedness of any other Person secured by any Lien on any property owned by
such Person, whether or not such indebtedness has been assumed, (v) all
Contingent Obligations of such Person, (vi) all payment obligations of such
Person under any interest rate protection agreement (including, without
limitation, any interest rate swaps, caps, floors, collars and similar
agreements) and currency swaps and similar agreements, (vii) all indebtedness
and liabilities secured by any Lien or mortgage on any property of such Person,
whether or not the same would be classified as a liability on a balance sheet,
(viii) the liability of such Person in respect of banker's acceptances and the
estimated liability under any participating mortgage, convertible mortgage or
similar arrangement, (ix) the aggregate amount of rentals or other consideration
payable by such Person in accordance with GAAP over the remaining unexpired term
of all Capitalized Leases, and (x) all indebtedness, contingent obligations,
etc. of any partnership in which such Person holds a general partnership
interest.

     "INDEMNITEE" has the meaning assigned to such term in Section 9.1(c).


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     "INTEREST CHARGES" shall mean, for any period, the sum of: (a) all
interest, charges and related expenses payable with respect to that fiscal
period to a lender in connection with borrowed money or the deferred purchase
price of assets that are treated as interest in accordance with GAAP, plus (b)
the portion of Capitalized Lease Obligations with respect to that fiscal period
that should be treated as interest in accordance with GAAP, plus (c) all charges
paid or payable (without duplication) during that period with respect to any
Hedging Agreements.

     "INTEREST PERIOD" has the meaning assigned to such term in Section 2.7.

     "LAW" means any law (including common law), constitution, statute, treaty,
regulation, rule, ordinance, order, injunction, writ, decree or award of any
Official Body.

     "LENDERS" means Agent and Fifth Third and their respective successors and
assigns as permitted hereunder, each of which is referred to as a Lender, or any
New Lender pursuant to Section 2.25.

     "LEVERAGE" means the ratio of (i) Indebtedness owed by Borrower and
Guarantor, minus Indebtedness owed to limited partners of Borrower, to (ii) the
Capital Value of Borrower's Properties.

     "LIBOR ADVANCE" means the principal amount of any portion of any Advance or
other Indebtedness bearing interest at the LIBOR Rate.

     "LIBOR MARGIN" has the meaning assigned to such term in Section 2.6.

     "LIBOR PORTION" means each portion of the Loan made and/or being maintained
at a rate of interest calculated by reference to the LIBOR Rate for the same
Interest Period.

     "LIBOR RATE" shall mean, with respect to any Interest Period, the quotient
of: (i) the Base LIBOR Rate applicable to that Interest Period, divided by (ii)
one (1) minus the Reserve Requirement (expressed as a decimal) applicable to the
Interest Period. "Base LIBOR Rate" shall mean, with respect to an Interest
Period, LIBOR as of 11:00 a.m. two (2) London Business Days prior to the first
day of such Interest Period. "LIBOR" shall mean, with respect to an Interest
Period, the British Bankers' Association ("BBA") interest settlement rate based
on an average of rates quoted by BBA designated banks as being, in BBA's view,
the offered rate at which deposits in U.S. Dollars are being quoted to prime
banks in the London interbank market at 11:00 a.m. (London time) two (2) London
Business Days prior to the first day of such Interest Period, such deposits
being for a period of time equal or comparable to such Interest Period and in an
amount equal or comparable to the outstanding LIBOR Portion, as such rates are
determined by Agent and displayed on the page designated "LIBO" on the Reuter
Monitor System or such other display on the Reuter Monitor System as shall
display LIBOR. "Reserve Requirement" shall mean, with respect to an Interest
Period, the daily average during such Interest Period of the aggregate reserve
requirement (including all basic, supplemental, marginal and other reserves and
taking into account any transitional adjustments or other scheduled changes in
reserve requirements during such Interest Period) which may be imposed on
Standard Federal under Regulation D of the Board of Governors of the Federal
Reserve System on Eurocurrency liabilities. "London Business Day" shall mean a
day on which the main office of


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Agent is open for business and dealings in dollar deposits are carried out in
the London interbank market and on which banks, generally, in New York, New York
are open for business.

     "LIEN" means any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other), or
preference, priority or other security agreement of any kind or nature
whatsoever, including, without limitation, any conditional sale or other title
retention agreement, any financing lease having substantially the same effect as
any of the foregoing and the filing of any financing statement or similar
instrument under the Uniform Commercial Code or comparable law of any
jurisdiction, domestic or foreign.

     "LOAN" means in the aggregate, the Advances made to Borrower under this
Agreement and the Notes pursuant to the terms hereof, the aggregate principal
amount of which shall not exceed the Maximum Loan Amount.

     "LOAN DOCUMENTS" means this Agreement, the Notes and the Guaranty.

     "LOAN PORTION" shall mean each Base Rate Portion and each LIBOR Portion of
the Loan.

     "MARGIN STOCK" has the meaning assigned to such term in Regulation U and
Regulation G of the Federal Reserve Board.

     "MATERIAL ADVERSE EFFECT" means any condition which causes or continues the
occurrence of an Event of Default or has a material adverse effect upon (i) the
business, operations, properties, assets, prospects or condition (financial or
otherwise) of Borrower or the Company, individually or taken as a whole, or (ii)
the ability of Borrower or the Company to perform, or of Agent, any Lender, or
any Participant to enforce, any of the Obligations.

     "MATURITY DATE" shall mean the date that is three years after the
Termination Date or such earlier date on which the principal balance of the Loan
and all other sums due in connection with the Loan shall be due as a result of
the acceleration of the Loan.

     "MAXIMUM LOAN AMOUNT" means $50,000,000, as such amount shall be reduced
pursuant to Section 2.10 or increased pursuant to Section 2.25 or otherwise
reduced pursuant to the terms and conditions of this Agreement.

     "MAXIMUM LEGAL RATE" means the maximum nonusurious interest rate, if any,
that at any time or from time to time may be contracted for, taken, reserved,
charged or received on the indebtedness evidenced by the Note and as provided
for herein or the other Loan Documents, under the laws of such state or states
whose laws are held by any court of competent jurisdiction to govern the
interest rate provisions of the Loan.

     "MOODYS" means Moody's Corporation.

     "MULTIEMPLOYER PLAN" means a Plan which is a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA.


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     "NET INCOME" shall mean, with respect to the Borrower for any period, the
net income (or loss) of the Borrower and Company for such period as determined
in accordance with GAAP, excluding any gains from Asset Dispositions, and
extraordinary gains and any gains from discontinued operations.

     "NET OPERATING INCOME" means, with respect to any Borrowing Base Property,
the gross income derived from the operation of such Property calculated on a
trailing twelve-month basis, less Operating Expenses attributable to such
Property calculated on a trailing twelve-month basis, accounted for on an
accrual basis, in accordance with GAAP, including any rent loss or business
interruption insurance proceeds, and water and sewer charges, which are actually
received and Operating Expenses actually paid or payable on an accrual basis
attributable to such Property as set forth on operating statements satisfactory
to Agent. Notwithstanding the foregoing, Net Operating Income shall not include
(i) any condemnation or insurance proceeds (excluding rent or business
interruption insurance proceeds), (ii) any proceeds resulting from the sale,
exchange, transfer, financing or refinancing of all or any portion of the
Property for which it is to be determined, (iii) amounts received from tenants
as security deposits, (iv) amounts received from Affiliates of Borrower or the
Company, which amounts do not represent pass-through rent payments received from
bona-fide third party tenants, (v) interest income, and (vi) any type of income
otherwise included in Net Operating Income but paid directly by any tenant to a
Person other than Borrower or the Company or its agents or representatives.

     "NON-USE FEE" has the meaning assigned to such term in Section 2.14.

     "NON-USE FEE DUE DATE" shall mean the date which is five (5) business days
after the date Agent has furnished Borrower with an invoice showing the amount
of the Non-Use Fee and a calculation of the same.

     "NOTE" has the meaning assigned to such term in Section 2.5.

     "NOTICE OF BORROWING" has the meaning assigned to such term in Section 2.3.

     "NOTICE OF CONVERSION OR CONTINUATION" has the meaning assigned to such
term in Section 2.8(b).

     "OBLIGATIONS" shall mean all payment, performance and other Obligations,
liabilities and Indebtedness of every nature of Borrower from time to time owing
to Agent and Lenders under or in connection with this Agreement or any other
Loan Document, including, without limitation, all sums which now or hereafter
become due to Agent on account of any Rate Management Transaction (hereafter
defined). For the purposes hereof, "Rate Management Transaction" means any
transaction (including an agreement with respect thereto) now existing or
hereafter entered into among Borrower and Agent or any of its subsidiaries or
affiliates or their successors, which is a rate swap, basis swap, forward rate
transaction, commodities swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
forward transaction, currency swap transaction, cross currency rate swap
transaction, currency option, or any other similar transaction or any
combination thereof, whether linked to one or


                                       10

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more interest rates, foreign currencies, commodity prices, equity prices or
other financial measures.

     "OFFICIAL BODY" means any national, federal, state, local or other
government or political subdivision or any agency, authority, bureau, central
bank, commission, department or instrumentality of either, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or domestic.

     "OPERATING EXPENSES" means with respect to any Property, for any given
period (and shall include the pro rata portion for such period of all such
expenses attributable to, but not paid during, such period), all expenses to be
paid or payable, as determined in accordance with GAAP, by Borrower or the
Company during that period in connection with the operation of such Property for
which it is to be determined, including without limitation:

          (i) expenses for cleaning, repair, maintenance, decoration and
     painting of such Property (including, without limitation, parking lots and
     roadways), net of any insurance proceeds in respect of any of the
     foregoing;

          (ii) wages (including overtime payments), benefits, payroll taxes and
     all other related expenses for Borrower and the Company's on-site
     personnel, engaged in the repair, operation and maintenance of such
     Property and service to tenants and on-site personnel engaged in audit and
     accounting functions performed by Borrower;

          (iii) actual management fees, if any, together with any allocated
     management fees or similar fees received from tenants or other parties.
     Such fees shall include all fees for management services whether such
     services are performed at such Property or off-site;

          (iv) the cost of all electricity, oil, gas, water, steam, heat,
     ventilation, air conditioning and any other energy, utility or similar item
     and the cost of building and cleaning supplies;

          (v) the cost of any leasing commissions and tenant concessions or
     improvements payable by Borrower, the Company pursuant to any leases which
     are in effect for such Property at the commencement of that period as such
     costs are recognized in accordance with GAAP, but on no less than a
     straight line basis over the remaining term of the respective Lease,
     exclusive of any renewal or extension or similar options;

          (vi) rent, liability, casualty and fidelity insurance premiums;

          (vii) legal, accounting and other professional fees and expenses;

          (viii) the cost of all equipment to be used in the ordinary course of
     business, which is not capitalized in accordance with GAAP;

          (ix) real estate and other taxes;

          (x) advertising and other marketing costs and expenses;


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          (xi) casualty losses to the extent not reimbursed by a third party;

          (xii) any ground lease payments; and

          (xiii) all amounts that should be reserved, as reasonably determined
     by Borrower and the Company with approval by Agent in its reasonable
     discretion, for repair or maintenance of the Property and to maintain the
     value of the Property.

     Notwithstanding the foregoing, Operating Expenses shall not include (i)
depreciation or amortization or any other non-cash item of expense; (ii)
interest, principal, fees, costs and expense reimbursements of Agent in
administering the Loan but not in exercising any of its rights under this
Agreement or the Loan Documents; or (iii) any expenditure (other than leasing
commissions, tenant concessions and improvements, and replacement reserves)
which is properly treatable as a capital item under GAAP.

     "PARTICIPANT" has the meaning assigned to such term in Section 8.

     "PARTNERSHIP UNIT" means a "Partnership Unit" of Borrower as defined in the
First Amended and Restated Agreement of Limited Partnership of Borrower dated
April 22, 1994.

     "PBGC" means the Pension Benefit Guaranty Corporation established under
ERISA, or any successor thereto.

     "PERMITTED LIENS" has the meaning assigned to such term in Section 6.1.

     "PERSON" means and includes any individual, partnership, joint venture,
firm, corporation, association, company, trust or other enterprise or any
government or political subdivision or agency, department or instrumentality
thereof.

     "PLAN" means any employee benefit plan covered by Title IV of ERISA or
which is subject to Section 412 of the Code or Section 302 of ERISA, for which
Borrower, Guarantor or any member of Borrower's or Guarantor's ERISA Controlled
Group has or may have any obligation or liability, whether direct or indirect.

     "PRIME RATE" means the interest rate announced from time to time by Agent
as its then prime rate, which rate is not necessarily the lowest rate then being
charged to commercial borrowers by Agent or the rate being charged to any other
borrower.

     "PRO-FORMA DEBT AMOUNT" means the assumed principal amount of indebtedness
that would result from applying a 1.5:1.0 debt service coverage requirement to
the Net Operating Income of the Borrowing Base Properties.

     "PRO-FORMA LOAN DEBT SERVICE" means total annual debt service payable on
the Loan, assuming an outstanding principal amount equal to the Available Loan
Amount, a principal amortization term of twenty-five (25) years, and an interest
rate equal to the 10-year U.S. Treasury Rate plus 1.75%.


                                       12

<PAGE>

     "PROPERTY AND PROPERTIES" means a commercial real estate property that is
(i) owned by Borrower, (ii) unencumbered by any Lien; and (iii) of which at
least 75% of the rentable space is occupied by a tenant or tenants under written
leases.

     "PRO RATA SHARE" means with respect to the Commitment of a Lender
(including the making or repayment of the Loan or the payment of fees to Lenders
pursuant to Section 2.14(a), (b) and (c)), the percentage obtained by dividing
the Commitment of such Lender by the total Commitments of all Lenders, as such
percentage may be adjusted by assignments permitted pursuant to Section 8, or
increases or decreases pursuant to Section 2.25.

     "REGULATION D" means Regulation D of the Federal Reserve Board as from time
to time in effect and any successor to all or any portion thereof.

     "RENTS" means all cash, securities, if any, or other cash equivalents, if
any, deposited to secure the performance by the lessees of their Obligations
under the leases and other agreements effecting the use, occupancy or enjoyment
of the Properties, together with all income; rents, additional rents, revenues,
issues and profits (including all oil and gas or other mineral royalties and
bonuses) and all pass-throughs and tenant's required contributions for taxes,
maintenance and utility costs, tenant improvements, leasing commissions, capital
expenditures and other items, from the Properties and all proceeds from the
sale, termination or other disposition of said leases.

     "REPORTABLE EVENT" has the meaning set forth in Section 4043(b) of ERISA
(other than a Reportable Event as to which the provision of 30 days' notice to
the PBGC is waived under applicable regulations).

     "REQUIRED LENDERS" means Lenders whose aggregate Commitments equals or
exceeds 66-2/3% of the aggregate Commitments, excluding from both the numerator
and denominator, however, any Lender then in default for a continuous period
greater than ten (10) Business Days of any obligation for the payment of money
to the Agent in respect of its Pro Rata Share of an Advance or other expense or
liability for which the Agent has in writing requested reimbursement or
indemnification and which the Lenders have agreed to pay by the respective
terms, and within the respective meanings, of this Agreement.

     "S&P" means Standard & Poor's Corporation.

     "SOLVENT" as to any Person means that (i) the sum of the assets of such
Person, at a fair valuation based upon appraisals or comparable valuation, will
exceed its liabilities, including contingent liabilities, (ii) such Person will
have sufficient capital with which to conduct its business as presently
conducted and as proposed to be conducted and (iii) such Person has not incurred
debts, and does not intend to incur debts, beyond its ability to pay such debts
as they mature. For purposes of this definition, "debt" means any liability on a
claim, and "claim" means (x) a right to payment, whether or not such right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured, or unsecured, or (y)
a right to an equitable remedy for breach of performance if such breach gives
rise to a payment, whether or not such right to an equitable remedy is reduced
to judgment, fixed, contingent, matured, unmatured, disputed, undisputed,
secured, or unsecured. With respect to


                                       13

<PAGE>

any such Contingent Liabilities, such liabilities shall be computed in
accordance with GAAP at the amount which, in light of all the facts and
circumstances existing at the time, represents the amount which can reasonably
be expected to become an actual or matured liability.

     "SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, association or other business entity of which more than 50% of the
total voting power of shares of stock (or equivalent ownership or controlling
interest) entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustee thereof is at the time owned
or controlled, directly or indirectly, by that Person or one or more
Subsidiaries of that Person or a combination thereof. A list of the Subsidiaries
of Borrower are set forth on Schedule 2 hereto.

     "TERMINATION DATE" means the date on which the Draw Period expires.

     "TERMINATION EVENT" means (i) a Reportable Event, or (ii) the initiation of
any action by Borrower or the Company, any member of Borrower, the Company, any
ERISA Controlled Group or any other person to terminate a Plan or the treatment
of an amendment to an ERISA Plan as a termination under ERISA, in either case,
which would result in liability to Borrower, the Company, or any of their ERISA
Controlled Group in excess of $100,000, (iii) the institution of proceedings by
the PBGC under Section 4042 of ERISA to terminate an ERISA Plan or to appoint a
trustee to administer any ERISA Plan, (iv) any partial or total withdrawal from
a Multiemployer Plan which in either case, which would result in liability to
Borrower, the Company, or any of their ERISA Controlled Groups in excess of
$100,000, or (v) the taking of any action that would require security to the
Plan under Section 401(a)(29) of the Code.

     "TOTAL DEBT SERVICE" means for the period for which it is to be determined,
the amount of interest and regularly scheduled principal payments payable during
such period in respect of Indebtedness of Borrower and the Company, taking into
account any interest rate swap, cap or other interest rate management agreement;
provided that the entity providing such interest rate management agreement
maintains a credit rating by S&P of equal to or exceeding "A" or the equivalent
rating by Moodys.

     "TOTAL FACILITY FUNDED DEBT" means, as of any date, the aggregate
outstanding principal balance of the Loan and of the $5,000,000 loan from Agent
to Borrower as evidenced by Amended and Restated Promissory Note (Line of
Credit) dated September 21, 1995, and by any and all amendments, restatements,
replacements, renewals, or extensions thereof.

     "TOTAL INTEREST BEARING FUNDED DEBT" means, as of any date, the outstanding
principal amount of interest bearing Indebtedness for borrowed money of Borrower
and the Company.

     "TOTAL INTEREST EXPENSE" means, for the period for which it is to be
determined, the aggregate of all interest paid or payable by Borrower and the
Company with respect to Indebtedness, as determined in accordance with GAAP,
taking into account any interest rate swap, cap or other interest rate
management agreement; provided that the entity providing such interest rate
management agreement maintains a credit rating by S&P of equal to or exceeding
"A" or the equivalent rating by Moodys.


                                       14

<PAGE>

     "TOTAL MARKET CAPITAL" means, as of any date, the sum of (i) Total Interest
Bearing Funded Debt, and (ii) the product of the market value per share of the
common stock of the Company calculated on the basis of the closing quotation
published in the section entitled "New York Stock Exchange Composite
Transactions" in The Wall Street Journal published in New York, New York on the
date such calculation is made, times the total number of shares of the common
stock of the Company issued and outstanding ("Company Share Price") and (iii)
the product of the Company Share Price times the total number of issued and
outstanding Partnership Units.

     "TRANSACTIONS" means each of the transactions contemplated by the Loan
Documents.

     "TRANSACTION COSTS" means all costs and expenses paid or payable by
Borrower relating to the Transactions including, without limitation, the costs
and expenses of Agent in conducting its due diligence with respect to the
Transactions, financing fees, commitment fees, advisory fees, appraisal fees,
legal fees, accounting fees, title insurance premiums, recording charges and
taxes, whether directly or as reimbursement to Agent.

     "TREASURY RATE" means a per annum rate, expressed as a decimal truncated to
the nearest one one-hundredth of a percent, determined by Agent on the date of
calculation (provided, however, if such date is not a Business Day, then on the
next succeeding Business Day) for the current U.S. Treasury with a maturity date
most closely approximating the date which is 10 years from such date of
calculation. The Treasury Yield shall be determined conclusively (in the absence
of manifest error) by Agent's reference to the weekly statistical release
designated as the "H.15 (519)" or any successor publications published by the
Board of Governors of the Federal Reserve System, or any successor agency.

     "UNFUNDED BENEFIT LIABILITIES" means with respect to any Plan at any time,
the amount (if any) by which (i) the present value of all benefit liabilities
under such Plan as defined in Section 4001(a)(16) of ERISA, exceeds (ii) the
fair market value of all Plan assets allocable to such benefits, all determined
as of the then most recent valuation date for such Plan (on the basis of
assumptions prescribed by the PBGC for the purpose of Section 4044 of ERISA).

SECTION 2. AMOUNT AND TERMS OF LINE OF CREDIT LOAN.

     SECTION 2.1 ADVANCES.

     (a) Subject to and upon the terms and conditions herein set forth, each of
the Lenders agrees, at any time and from time to time on and after the Closing
Date and prior to the Termination Date, to make its Pro Rata Share of Advances
to Borrower, but in no event to exceed each Lender's respective Commitment.

     (b) The total amount of Advances outstanding at any time shall not exceed
the Borrowing Base.

     (c) Subject to the other provisions of this Agreement, including, without
limitation, Section 2.10, 2.11, 2.16 and 2.19, amounts borrowed under this
Section 2.1 may be repaid and reborrowed prior to the Termination Date. All
outstanding Advances shall mature on the Termination Date, without further
action on the part of Lenders


                                       15

<PAGE>

     (d) Each Base Rate Advance shall be in the minimum amount of One Hundred
Thousand Dollars ($100,000) and each LIBOR Advance shall be in the minimum
amount of One Million Dollars ($1,000,000). No Advances shall be made after the
Termination Date. There shall be no more than five Loan Portions outstanding at
any time prior to the Termination Date, and there shall be only one Loan Portion
outstanding at any time thereafter.

     (e) Advances shall not be made more often than twice monthly.

     (f) The aggregate principal amount of the Loan at any time outstanding
shall not exceed the Available Loan Amount at such time.

     (g) The obligations of the Lenders to make their Pro Rata Share of each
Advance of the Loan is several and not joint. No Lender shall be liable for the
failure of any other Lender to fund its Pro Rata Share of any Advance hereunder.

     (h) The Termination Date may be extended by Borrower by two (2) successive
one (1) year periods (i.e., to November 5, 2010 and to November 5, 2011),
subject to the following conditions:

          (i) No Event of Default has occurred and is continuing;

          (ii) Borrower has given written notice to Agent of its election to
extend the Termination Date at least one (1) month prior to the Termination
Date; and

          (iii) Concurrently with the written notice under (ii), above, Borrower
has paid to Agent an extension fee for each one year extension of $62,500 for
the pro-rata benefit of the Lenders.

     SECTION 2.2 USE OF PROCEEDS. Borrower shall use the proceeds of the Loan
for general business purposes of Borrower consistent with the "Business
Objectives and Strategies" set forth in the Prospectus of Agree Realty
Corporation dated April 15, 1994; provided, however, that Borrower shall not use
any loan proceeds to invest in any joint venture, partnership, corporation or
other entity unless Borrower (i) acquires at least 50% of the ownership interest
in such entity, and (ii) Borrower has control of such entity. For the purpose of
this definition, "control" means the possession directly or indirectly of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities or by contract or
otherwise.

     SECTION 2.3 NOTICE OF BORROWING. Whenever Borrower desires an Advance
hereunder, it shall give Agent at Agent's office prior to 11:00 A.M., Detroit,
Michigan time, at least one (1) Business Days' prior telex, facsimile, or
telephonic notice (promptly confirmed in writing) of each Base Rate Advance and
at least three (3) Business Day's prior telex, facsimile or telephonic notice
(promptly confirmed in writing) of each LIBOR Advance. Each such notice (a
"Notice of Borrowing") (a) if a request for LIBOR Advance, shall be irrevocable,
(b) shall be executed by the Company as general partner of Borrower, (c) shall
specify (i) the aggregate principal amount of the requested Advance, (ii) the
date of borrowing (which shall be a Business Day), (iii) if a request for LIBOR
Advance, the initial Interest Period to be applicable thereto, (d) shall certify
that, taking into account the amount of the requested Advance, no Default or
Event


                                       16

<PAGE>

of Default has occurred and is continuing, and that all provisions of the Loan
Documents will be complied with after giving effect to such Advance, (e) shall
be in the form annexed hereto as Exhibit "A-1", and (f) shall be accompanied by
an Advance Worksheet in the form attached hereto as Exhibit "A-2".

     SECTION 2.4 DISBURSEMENT OF FUNDS. On the date specified in each Notice of
Borrowing, provided all conditions precedent to the making of such Advance have
been complied with, and further provided that Agent has received, in immediately
available federal funds, each Lender's Pro Rata Share of such Advance, Agent
will make available to Borrower by disbursing to or at the direction of
Borrower, or by depositing in Borrower's account at Agent's office, the amount
of the requested Advance.

     SECTION 2.5 THE NOTES. (a) Borrower's obligation to pay the principal of,
and interest on, the Loan shall be evidenced by (i) the promissory notes in
favor of each Lender (as amended, modified, supplemented, extended or
consolidated, "Notes") duly executed and delivered by Borrower substantially in
the form of Exhibit "B" with blanks in each Note appropriately completed in
conformity herewith, in the aggregate principal amount of the Maximum Loan
Amount, dated the Closing Date, and maturing on the Maturity Date. A separate
Note shall be payable to the order of each Lender, and shall be in the principal
amount of the applicable Lender's Commitment.

     (b) Agent is hereby authorized to record the date and amount of each
Advance and the Pro Rata Share thereof of each Lender, and the date and amount
of each principal and interest payments in its books and records. Such books and
records shall be conclusive and binding on Borrower absent manifest error.

     SECTION 2.6 INTEREST. (a) Borrower shall pay interest in respect of the
unpaid principal amount of each Base Rate Portion from the date of the making of
such Base Rate Portion until such Base Rate Portion shall be paid in full, or
converted to a LIBOR Portion, at a rate per annum which shall be equal to the
sum of the applicable Base Rate Margin set forth below and the Base Rate in
effect from time to time, such rate to change as and when the Base Rate changes.
Borrower shall pay interest in respect of the unpaid principal amount of each
LIBOR Portion from the date of the making of such LIBOR Portion until such LIBOR
Portion shall be paid in full, continued as a LIBOR Portion or converted to a
Base Rate Portion, at a rate per annum which shall be equal to the sum of the
applicable LIBOR Margin set forth below and the relevant LIBOR Rate. The Base
Rate and the LIBOR Margin shall be adjusted quarterly on each April 1, July 1,
October 1 and January 1 based upon Borrower's Debt Service Coverage Ratio and
Leverage, as set forth below, as determined by Agent from the most recently
delivered quarterly financial statements to be delivered by Borrower to Agent,
pursuant to Section 5.1 for Borrower's fiscal quarters ending December 31, March
31, June 30 and September 30, respectively, as applicable. If the financial
statements and projections are not delivered to Agent by the dates set forth in
Section 5.1, the highest Base Rate Margin and LIBOR Margin shall be in effect
until such financial statements and projections are delivered to Agent.


                                       17
<PAGE>

BASE RATE MARGINS AND LIBOR MARGINS

<TABLE>
<CAPTION>
                          less than 60% and   less than 50% and
                           greater than or     greater  than or
LEVERAGE            60%      equal to 50%        equal to 40%     less than 40%
--------           ----   -----------------   -----------------   -------------
<S>                <C>    <C>                 <C>                 <C>
LIBOR MARGIN       1.50%        1.35%               1.15%             1.00%
BASE RATE MARGIN      0%           0%                  0%                0%
</TABLE>

     (b) In the event that, and for so long as, any Event of Default shall have
occurred and be continuing, the outstanding principal amount of the Loan and, to
the extent permitted by law, overdue interest in respect of the Loan, shall bear
interest at the Default Rate. In addition, Borrower shall pay a late payment
charge equal to five (5%) percent of the amount of any payment which is not
received by Agent within ten (10) days after the date such payment is due.

     (c) Interest on the Loan shall accrue from and including the date of each
Advance thereof to but excluding the date of any repayment thereof (provided
that any Advance borrowed and repaid on the same day shall accrue one day's
interest) and Borrower shall pay such interest (i) in respect of each Base Rate
Portion, (A) monthly in arrears on the first day of each month, (B) on the
Maturity Date (whether by acceleration or otherwise) and (C) after the Maturity
Date, on demand, and (ii) in respect of each LIBOR Portion, (A) at the end of
each Interest Period, but if the Interest Period is longer than three (3)
months, then at the end of each quarter, (B) on the date of any prepayment (on
the amount prepaid), (C) on the Maturity Date (whether by acceleration or
otherwise), and (D) after the Maturity Date, on demand.

     (d) Interest on the outstanding principal balance of Base Rate Portions
shall be calculated on the basis of an actual 365 or 366 day year. Interest on
the outstanding principal balance of LIBOR Portions shall be calculated on the
basis of a three hundred sixty (360) day year based on the actual number of days
elapsed.

     (e) This Agreement and the Note are subject to the express condition that
at no time shall Borrower be obligated or required to pay interest on the
principal balance of the Loan at a rate which could subject any Lender to either
civil or criminal liability as a result of being in excess of the Maximum Legal
Rate. If by the terms of this Agreement or the Loan Documents, Borrower is at
any time required or obligated to pay interest on the principal balance due
hereunder at a rate in excess of the Maximum Legal Rate, the interest rate or
the Default Rate, as the case may be, shall be deemed to be immediately reduced
to the Maximum Legal Rate and all previous payments in excess of the Maximum
Legal Rate shall be deemed to have been payments in reduction of principal and
not on account of the interest due hereunder, and at the option of Agent upon
notice to Borrower, the Obligations shall become immediately due and payable.
All sums paid or agreed to be paid to Lenders for the use, forbearance, or
detention of the sums due under the Loan, shall, to the extent permitted by
applicable law, be amortized, prorated, allocated, and spread throughout the
full stated term of the Loan until payment in full so that the rate or amount of
interest on account of the Loan does not exceed the Maximum Legal


                                       18

<PAGE>

Rate of interest from time to time in effect and applicable to the Loan for so
long as the Loan is outstanding.

     SECTION 2.7 INTEREST PERIODS. (a) Borrower shall, in each Notice of
Borrowing or Notice of Conversion or Continuation in respect of the making of,
conversion into or continuation of a LIBOR Portion, select the interest period
(each an "Interest Period") applicable to such LIBOR Portion, which Interest
Period shall, at the option of Borrower, be either a one month, two-month,
three-month, six-month or twelve-month period, provided that:

          (i) the initial Interest Period for any LIBOR Portion shall commence
     on the date of the making of such Advance (including the date of any
     conversion from a Base Rate Portion) and each Interest Period occurring
     thereafter in respect of such Portion shall commence on the date on which
     the next preceding Interest Period expires;

          (ii) if any Interest Period would otherwise expire on a day which is
     not a Business Day, such Interest Period shall expire on the next
     succeeding Business Day;

          (iii) if any Interest Period begins on a day for which there is no
     numerically corresponding day in the calendar month at the end of such
     Interest Period, such Interest Period shall end on the last Business Day of
     such calendar month;

          (iv) no Interest Period in respect of any LIBOR Portion outstanding
     prior to the Termination Date shall extend beyond the Termination Date, and
     no LIBOR Portion shall extend beyond the Maturity Date.

     (b) If upon the expiration of any Interest Period, Borrower has failed to
elect or confirm a new Interest Period pursuant to Section 2.8, Borrower shall
be deemed to have elected to convert such LIBOR Portion into a Base Rate
Portion, effective as of the expiration date of such current Interest Period.

     SECTION 2.8 CONVERSION OR CONTINUATION. (a) Subject to the other provisions
of this Agreement, Borrower shall have the option (i) to convert at any time all
or any part of the outstanding Base Rate Portions to LIBOR Portions, (ii) to
convert all or any part of the outstanding LIBOR Portions to Base Rate Portions,
on the expiration of the Interest Period applicable thereto (or prior to such
expiration date, provided Borrower pays Funding Costs in connection therewith
pursuant to Section 2.16), or (iii) to continue all or any part of the
outstanding LIBOR Portions as LIBOR Portions for an additional Interest Period,
on the expiration of the Interest Period applicable thereto (or prior to such
expiration date, provided Borrower pays Funding Costs in connection therewith
pursuant to Section 2.16); provided that no Loan Portion may be continued as, or
converted into, a LIBOR Portion when any Default with respect to the payment of
money or any Event of Default has occurred and is continuing. In the event LIBOR
Portions are not available pursuant to Section 2.15, Borrower shall be deemed to
have elected to convert such LIBOR Portions into Base Rate Portions, and if such
conversion occurs prior to the expiration date of the applicable Interest
Period, Borrower shall also pay all Funding Costs and other costs, expenses and
losses in connection therewith pursuant to Section 2.16.


                                       19

<PAGE>

     (b) In order to elect to convert or continue a Loan Portion under this
Section 2.8, Borrower shall deliver an irrevocable notice thereof in the form
annexed hereto as Exhibit "C" (a "Notice of Conversion or Continuation") to
Agent no later than 11:00 A.M., Detroit, Michigan time, (which notice may be by
facsimile transmission provided that an original is delivered prior to the close
of business on the immediately succeeding Business Day) three (3) Business Days
prior to the proposed conversion or continuation date in the case of a
conversion to, or a continuation of, a LIBOR Portion. A Notice of Conversion or
Continuation shall specify (i) the requested conversion or continuation date
(which shall be a Business Day), (ii) the amount and type of the Loan Portion to
be converted or continued, (iii) whether a conversion or continuation is
requested, (iv) in the case of a conversion to, or a continuation of, a LIBOR
Portion, the requested Interest Period.

     SECTION 2.9 PRINCIPAL AMORTIZATION. [Deleted].

     SECTION 2.10 VOLUNTARY PREPAYMENTS; TERMINATION. (a) Borrower shall have
the right to repay amounts borrowed pursuant to Section 2.1 from time to time on
the following terms and conditions: (a) Borrower shall give Agent written notice
in the form attached hereto as Exhibit "A-3" (or telephonic notice promptly
confirmed in writing), which notice shall be irrevocable, of its intent to repay
amounts outstanding under the Loan, at least one (1) Business Day prior to a
repayment of LIBOR Portions and Base Rate Portions, which notice shall specify
the amount of such payment and what Loan Portions are to be paid and, in the
case of LIBOR Portions, the specific Advance pursuant to which made, (b)
payments of LIBOR Portions made pursuant to this Section on a date other than
the last day of the Interest Period applicable thereto shall be accompanied by
payment of any Funding Costs resulting from such early payment. If any such
notice is given, the amount specified in such notice shall be due and payable on
the date specified therein.

     (b) Upon at least three (3) Business Days prior irrevocable written notice
to Agent, Borrower shall have the right to terminate the Loan and this Agreement
and reduce the Maximum Loan Amount to zero; provided that Borrower, on the date
specified in such notice, pays to Agent the entire outstanding principal balance
of the Loan, together with all interest accrued and unpaid thereon, all Funding
Costs, and all other sums due under the Notes, this Agreement and the other Loan
documents. Upon such termination, Lenders shall have no further obligation to
make any Advances.

     SECTION 2.11 MANDATORY PREPAYMENTS. [Deleted].

     SECTION 2.12 APPLICATION OF PAYMENTS AND PREPAYMENTS. Unless specifically
provided otherwise, all payments and prepayments of the Loan, whether voluntary
or otherwise, shall be applied first, to unpaid fees, any reasonable
out-of-pocket costs and expenses of Lenders arising as a result of such
prepayment and any Funding Costs, second, to pay any accrued and unpaid interest
then payable with respect to the Loan, third, to pay the outstanding principal
amount of the Loan. Payments applied to the outstanding principal amount of the
Loan shall be first applied to the Base Rate Portions of the Loan, and then to
pay the LIBOR Portions of the Loan in the order of each portion's maturity.


                                       20

<PAGE>

     SECTION 2.13 METHOD AND PLACE OF PAYMENT. (a) Except as otherwise
specifically provided herein, all payments, prepayments under this Agreement and
the Notes shall be made to Agent not later than 12:00 noon, Detroit, Michigan
time, on the date when due and shall be made in lawful money of the United
States of America in immediately available funds at Agent's office, and any
funds received by Agent after such time shall, for all purposes hereof, be
deemed to have been paid on the next succeeding Business Day. Each payment
(including all prepayments on account of principal and interest on the Loan), to
the extent received, shall constitute payment by Borrower to each Lender in the
amount of such Lender's Pro Rata Share of such payment.

     (b) Except as expressly provided to the contrary in Section 2.7 hereof,
whenever any payment to be made hereunder or under the Notes or other Loan
Documents shall be stated to be due on a day which is not an Business Day, the
due date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable at the applicable
rate during such extension.

     (c) All payments made by Borrower hereunder, under the Note and the other
Loan Documents, shall be made irrespective of, and without any deduction for,
any set-off or counterclaims.

     SECTION 2.14 FEES. (a) Borrower shall pay to Agent, for the pro rata
benefit of the Lenders, a fee (the "Non-Use Fee"), computed at the per annum
rate (based on an actual 365 day or 366 day year) set forth in the chart below
on the average daily unfunded portion of the Maximum Loan Amount, from and
including the Closing Date through and including the Termination Date, payable,
in arrears, on (i) the later of Non-Use Fee Due Date or the first day of each
calendar quarter beginning on January 1, 2007 through the Termination Date, and
(ii) on the Termination Date or such earlier date, if any, on which the Maximum
Loan Amount shall terminate in accordance with the terms hereof. Each payment of
the Non-Use Fee, to the extent received, shall constitute payment by Borrower to
each Lender in the amount of such Lender's Pro Rata Share of the Non-Use Fee.

NON-USE FEE RATE

<TABLE>
<CAPTION>
USAGE OF MAXIMUM LOAN AMOUNT   Greater than or equal to 50%   Less than 50%
----------------------------   ----------------------------   -------------
<S>                            <C>                            <C>
NON USE FEE RATE                          0.125%                  0.20%
</TABLE>

     (b) On the Closing Date, Borrower shall pay to Agent for the pro-rata
benefit of the Lenders a commitment fee of $250,000.

     (c) Borrower shall pay to Agent on the Closing Date and during the term of
this Agreement an administrative fee as agreed to in writing by Agent and
Borrower.

     SECTION 2.15 INTEREST RATE UNASCERTAINABLE INCREASED COSTS, ILLEGALITY. (a)
In the event that Agent has determined or, with respect to any Lender or
Participant, has been notified that (which determination or notice shall, absent
manifest error, be final and conclusive and binding upon all parties hereto):


                                       21

<PAGE>

          (i) on any date for determining the LIBOR Rate for any Interest
     Period, that by reason of any changes arising after the date of this
     Agreement affecting the interbank Eurodollar market, adequate and fair
     means do not exist for ascertaining the applicable interest rate on the
     basis provided for in the definition of the LIBOR Rate; or

          (ii) at any time, that the making or continuance by it of any LIBOR
     Portion has become unlawful in order for Agent, any Participant or Lender,
     in good faith, to comply with any Law, guideline, interpretation or
     application thereof by any Official Body charged with the administration or
     compliance with any request or directive (whether or not having the force
     of law and whether or not failure to comply therewith would be unlawful),
     or any change therein, or any change in the interpretation or
     administration thereof by any central bank or Official Body charged with
     the interpretation or administration thereof, or has become impracticable
     as a result of a contingency occurring after the date of this Agreement
     which materially and adversely affects the interbank Eurodollar market;

then, and in any such event, Agent shall, promptly after making such
determination or receiving notice thereof from any Participant or Lender, give
notice by telephone promptly confirmed in writing to Borrower. Thereafter (x) in
the case of clause (i) above, Borrower's right to request LIBOR Portions shall
be suspended, and any Notice of Borrowing, or Notice of Conversion or
Continuation given by Borrower with respect to any borrowing of LIBOR Portions
which has not yet been made shall be deemed cancelled and rescinded by Borrower,
and (y) in the case of clause (ii) above, Borrower shall take one of the actions
specified in clause (b) below as promptly as possible and, in any event, within
the time period required by law.

     (b) In the case of any LIBOR Portion affected by the circumstances
described in clause (a)(ii) above, Borrower shall, either (i) if any such LIBOR
Portion has not yet been made but is then the subject of a Notice of Borrowing,
a request or a Notice of Conversion or Continuation, be deemed to have cancelled
and rescinded such notice, or (ii) if any such LIBOR Portion is then
outstanding, require Agent to convert each such LIBOR Portion into a Base Rate
Portion at the end of the applicable Interest Period or such earlier time as may
be required by law, in each case by giving Agent notice (by telephone promptly
confirmed in writing) thereof within two (2) Business Days after Borrower was
notified by Agent pursuant to clause (a) above.

     (c) In the event that Agent determines at any time following the giving of
notice based on the conditions described in clause (a)(i) or (a)(ii) above that
such conditions no longer exist, Agent shall promptly give notice thereof to
Borrower, whereupon Borrower's right to request LIBOR Portions from Agent and
Agent's and any Lender's obligation to make LIBOR Portions shall be
automatically restored.

     SECTION 2.16 FUNDING COSTS. (a) If any Law, guideline or interpretation or
any change in any Law, guideline or interpretation or application thereof by any
Official Body charged with the interpretation or administration thereof or
compliance with any request or directive (whether or not having the force of
Law) of any central bank or other Official Body:

          (i) subjects any Lender or Participant to any tax or charge with
     respect to this Agreement, the Notes, the Loan, or payments by the Borrower
     of principal, interest, or


                                       22

<PAGE>

     other amounts due from the Borrower hereunder or under the Notes (except
     for taxes on the overall net income of such Lender),

          (ii) imposes, modifies or deems applicable any reserve, special
     deposit or similar requirement against credits or commitments to extend
     credit extended by, or assets (funded or contingent) of, deposits with or
     for the account of, or other acquisition of funds by, any Lender or
     Participant, or

          (iii) imposes, modifies or deems applicable any capital adequacy or
     similar requirement (A) against assets (funded or contingent) of, or
     credits or commitments to extend credit extended by, any Lender, or (B)
     otherwise applicable to the obligations of any Lender or Participant under
     this Agreement,

and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, or impose any expenses (including loss of margin) upon any
Lender or Participant with respect to this Agreement, the Notes, or the making,
maintenance or funding of any part of the Loans (or, in the case of any capital
adequacy or similar requirement, to have the effect of reducing the rate of
return on any Lender's or Participant's capital, taking into consideration such
Lender's or Participant's customary policies with respect to capital adequacy)
by an amount which such Lender or Participant in its sole discretion deems to be
material ("Funding Costs"), such Lender or Participant may from time to time
notify the Borrower and the Agent of the amount determined in good faith (using
any averaging and attribution methods employed in good faith) by such Lender or
Participant (which determination shall be conclusive absent manifest error) to
be necessary to compensate such Lender or Participant for such increase in cost,
reduction of income or additional expense. Such notice shall set forth in
reasonable detail the basis for such determination. Such amount shall be due and
payable by Borrower to the Agent for the account of such Lender within five (5)
Business Days after such notice is given.

     (b) In addition to the compensation required by subsection (a) of this
Section 2.16, the Borrower shall indemnify each Lender or Participant against
any loss or expense (including loss of margin, any loss incurred in liquidating
or employing deposits from third parties and any loss or expense incurred in
connection with funds acquired by a Lender or Participant to fund or maintain a
LIBOR Portion or a Base Rate Portion) which such Lender or Participant sustains
or incurs as a consequence of any:

          (i) payment, prepayment, conversion or renewal of any LIBOR Portion on
     a day other than the last day of an Interest Period (whether or not such
     payment or prepayment is mandatory or automatic and whether or not such
     payment or prepayment is then due), or

          (ii) attempt by the Borrower to revoke (expressly, by later
     inconsistent notices or otherwise) in whole or part any notice relating to
     the selection of a LIBOR Portion under Section 2.3 or prepayments under
     Section 2.10.

     If any Lender or Participant sustains or incurs any such loss or expense it
shall from time to time notify the Borrower of the amount determined in good
faith by such Lender or Participant (which determination shall be conclusive
absent manifest error and may include such


                                       23

<PAGE>

assumptions, allocations of costs and expenses and averaging or attribution
methods as such Lender or Participant shall deem reasonable) to be necessary to
indemnify such Lender or Participant for such loss or expense. Such notice shall
set forth in reasonable detail the basis for such determination. Such amount
shall be due and payable by the Borrower to the Agent for the account of such
Lender or Participant five (5) Business Days after such notice is given.

     SECTION 2.17 SUBSTITUTION OF COLLATERAL. [Deleted].

     SECTION 2.18 BREACH OF AVAILABLE BORROWING BASE COVENANT. [Deleted].

     SECTION 2.19 LETTER OF CREDIT COMMITMENT. Subject to the terms and
conditions hereof, until the Maturity Date, Agent agrees to issue or confirm
Letters of Credit for the account of Borrower in such form as may from time to
time be approved by Agent in favor of such beneficiaries as Borrower shall
specify (the "Letters of Credit"); provided that the aggregate face amount of
the Letters of Credit outstanding or requested, together with Letters of Credit
paid but not reimbursed by Borrower to the extent not an outstanding Advance,
shall at no time exceed Five Million and 00/100 Dollars ($5,000,000.00);
provided, further, that the aggregate face amount of the Letters of Credit
outstanding or requested, when added to the aggregate face amount of all other
Letters of Credit outstanding and all amounts from time to time outstanding
under the Loan together with Letters of Credit paid but not reimbursed by
Borrower to the extent not an Advance, shall not exceed the Borrowing Base. Each
Letter of Credit renewed or issued hereunder shall: (i) be denominated in United
States Dollars; and (ii) expire on a date which is not more than twelve (12)
months from its issuance and at least thirty (30) days' prior to the Loan
Maturity Date.

     SECTION 2.20 REQUESTS FOR LETTERS OF CREDIT. Borrower may request issuance
of a Letter of Credit from Agent by delivery to Agent of a request for Letter of
Credit executed by an authorized officer of Borrower, subject to the following
and to the remaining provisions hereof:

     (a) Each such request for a Letter of Credit shall set forth the
information required on the request for Letter of Credit form provided by the
Agent which form shall include:

          (i) The proposed date of issuance of the Letter of Credit, which must
     be a Business Day;

          (ii) The amount of the Letter of Credit;

          (iii) The beneficiary of the Letter of Credit;

          (iv) The conditions of the Letter of Credit;

          (v) The Expiration Date of the Letter of Credit.

     (b) Each such request for Letter of Credit shall be delivered to Agent
three (3) Business Days prior to the proposed date of issuance of the Letter of
Credit;

     (c) The face amount of the Letter of Credit requested plus the principal
amount of all Advances then outstanding, plus the principal amount of all
Advances requested but not yet


                                       24

<PAGE>

funded, plus the aggregate undrawn portion of any previously issued Letters of
Credit which shall still be outstanding as of the date of the request for Letter
of Credit and the aggregate face amount of Letters of Credit requested but not
yet issued and the amount of all Letters of Credit paid but not yet reimbursed
by Borrower to the extent not an outstanding Advance shall not exceed the
Borrowing Base;

     SECTION 2.21 REIMBURSEMENT OBLIGATIONS OF THE LENDERS. Upon issuance of a
Letter of Credit by Agent, each Lender shall automatically acquire a risk
participation interest in such Letter of Credit based upon its Pro Rata Share.
If Agent shall honor a draft or other demand for payment presented or made under
any Letter of Credit, Agent shall provide notice thereof to each Lender on the
date such draft or demand is honored unless Borrower shall have satisfied its
Reimbursement Obligation by payment to Agent on such date. Upon receipt of such
notice, each Lender shall forthwith (but in any event, no later than 1:00 p.m.
Detroit time on the Business Day of receipt of such notice if such Lender
receives such notice by 10:00 a.m. Detroit time on such day; receipt of such
notice after 10:00 a.m. Detroit time on any day shall be deemed to be received
by 10:00 a.m. Detroit time on the following Business Day), make available to
Agent at its principal office, immediately available funds in an amount equal to
such Lender's Pro Rata Share of any amount paid or disbursed, or to be paid or
disbursed, by Agent to settle its Obligations under any draft or other order,
instrument or demand drawn or presented under any Letter of Credit.

     The obligation of each Lender to provide Agent with such Lender's Pro Rata
Share of the amount of any payment or disbursement made or to be made by Agent
to settle its Obligations under any item drawn or presented under any Letter of
Credit in accordance with the provisions of the preceding paragraph shall be
absolute and unconditional under any and all circumstances and irrespective of
any setoff, counterclaim or defense to payment which such Lender may have or
have had against Agent, including without limitation, any defense based on the
failure of the demand for payment under such Letter of Credit to conform to the
terms of such Letter of Credit, or the legality, validity, regularity or
enforceability of such Letter of Credit or any defense based on the identity of
the transferee of such Letter of Credit or the sufficiency of the transfer if
such Letter of Credit is transferable; provided, however, that no Lender shall
be obligated to reimburse Agent pursuant to the preceding provisions of this
section for any wrongful payment or disbursement made or to be made by Agent
under any Letter of Credit as a result of acts or omissions constituting gross
negligence or willful misconduct on the part of Agent or any of its officers,
employees or agents.

     SECTION 2.22 REIMBURSEMENT OBLIGATIONS OF BORROWER.

     (a) Borrower agrees to reimburse Agent for the total amount of any sums
paid by Agent in connection with Letters of Credit, including any drawing or
demand under Letters of Credit or any Advance made by Agent in respect of
Letters of Credit, and the amount of any taxes, fees, charges or other costs or
expenses whatsoever incurred by Agent in connection with any payment made by
Agent under, or with respect to, such Letter of Credit (the "Reimbursement
Obligation") as set forth in the application.

     (b) Payment by Agent of a draw under any Letter of Credit shall be deemed
an Advance under the Loan in an amount sufficient to discharge Borrower's
Reimbursement


                                       25

<PAGE>

Obligation with interest thereon as set forth in this Agreement as of the date
of payment. To the extent that Borrower is not eligible for an Advance under the
Loan, Borrower shall immediately pay and discharge the Reimbursement Obligation
pursuant to the terms of the application and this Agreement.

     (c) Borrower's Reimbursement Obligations with respect to Letters of Credit
shall be absolute, unconditional and irrevocable and shall remain in full force
and effect until all Obligations of Borrower to the Lenders hereunder shall have
been satisfied, and such Obligations shall not be affected, modified or impaired
upon the happening of any event, including without limitation, any of the
following, whether or not with notice to, or the consent of, the Borrower:

          (i) Any lack of validity or enforceability of any Letter of Credit,
     application or any documentation relating to any Letter of Credit or to any
     transaction related in any way to such Letter of Credit (the "Letter of
     Credit Documents");

          (ii) Any amendment, modification, waiver, consent, or any
     substitution, exchange or release of or failure to perfect any interest in
     collateral or security, if any, with respect to any of the Letter of Credit
     Documents;

          (iii) The existence of any claim, setoff, defense or other right which
     the Borrower may have at any time against any beneficiary or any transferee
     of any Letter of Credit (or any persons or entities for whom any such
     beneficiary or any such transferee may be acting), the Agent or any Lender
     or any other person or entity, whether in connection with any of the Letter
     of Credit Documents, the transactions contemplated herein or therein or any
     unrelated transactions; and

          (iv) Any draft or other statement or document presented under any
     Letter of Credit proving to be forged, fraudulent, invalid or insufficient
     in any respect or any statement therein being untrue or inaccurate in any
     respect; provided, however, that Borrower shall have no Reimbursement
     Obligation for any wrongful payment or disbursement made or to be made
     under any Letter of Credit as a result of acts or omissions constituting
     gross negligence or willful misconduct on the part of Agent or any of its
     officers, employees or agents.

     No setoff, counterclaim, reduction or diminution of any obligation or any
     defense of any kind or nature which the Borrower has or may have against
     the beneficiary of any Letter of Credit shall be available hereunder to
     Borrower against the Agent or any Lender.

     (d) Letter of Credit Fees. Borrower agrees to pay or reimburse Agent upon
demand, for the account of each Lender, a letter of credit fee for the issuance
of such Letter of Credit to be divided by the Lenders in accordance with their
Pro Rata Shares equal to 1/4 of 1% multiplied by the face amount of each Letter
of Credit for the period from and including the date of issuance of such Letter
of Credit to and including the date upon which such Letter of Credit expires or
is terminated, including all periods during which such Letter of Credit is
renewed, and such other normal and customary fees, costs and expenses as are
incurred or charged by Agent from time to time in issuing and effecting payment
under or administering any Letter of Credit (including, without limitation,
amendment fees and transfer fees, if any) and including a fee to be paid to


                                       26

<PAGE>

Agent for the prorata benefit of the Lenders for each Letter of Credit or
renewal of 12.5 basis points.

     SECTION 2.23 INCREASE OF MAXIMUM LOAN AMOUNT

     (a) At any time and from time to time and provided that no Default or Event
of Default has occurred, the Borrower may request (in consultation with the
Agent) that the Maximum Loan Amount be increased, provided that, without the
prior written consent of all of the Lenders, (a) the aggregate amount of the
increases in the Commitment shall not exceed $25,000,000 for a total Maximum
Loan Amount of $75,000,000 and (b) each such increase shall be in a minimum
amount of $5,000,000 and additional increases shall be in integral multiples
thereof. Such request shall be made in a written notice given to the Agent and
the Lenders by the Borrower not less than forty five (45) Business Days prior to
the proposed effective date of such increase, which notice (a "Commitment
Increase Notice") shall specify the amount of the proposed increase in the
Commitment and the proposed effective date of such increase. In the event of
such a Commitment Increase Notice, each of the Lenders shall be given the
opportunity to participate in the requested increase ratably in proportions that
their respective Pro Rata Shares bear to the Commitment. No Lender shall have
any obligation to increase its Pro Rata share pursuant to a Commitment Increase
Notice. On or prior to the date that is thirty (30) Business Days after receipt
of the Commitment Increase Notice, each Lender shall submit to the Agent a
notice indicating the maximum amount of the increase it is willing to accept in
connection with such Commitment Increase Notice (any such notice to the Agent
being herein a "Lender Increase Notice"). Any Lender which does not submit a
Lender Increase Notice to the Agent prior to the expiration of such thirty (30)
Business Day period shall be deemed to have denied any increase in its
participation. In the event that the aggregate increases set forth in the Lender
Increase Notices exceeds the amount requested by the Borrower in the Commitment
Increase Notice, the Agent shall have the right, in consultation with the
Borrower, to allocate the amount of increases among the Lenders in their
respective Pro Rata Share to reach the amount necessary to meet the Borrower's
Commitment Increase Notice. In the event that the Lender Increase Notices in the
aggregate are less than the amount requested by the Borrower, not later than
thirty (30) Business Days prior to the proposed effective date the Borrower may
notify the Agent of any financial institution that shall have agreed to become a
"Lender" party hereto (a "Proposed New Lender") in connection with the
Commitment Increase Notice. Any Proposed New Lender shall be subject to the
consent of the Agent (which consent shall not be unreasonably withheld). If the
Borrower shall not have arranged any Proposed New Lender(s) to commit to the
shortfall from the Lender Increase Notices, then the Borrower shall be deemed to
have reduced the amount of its Commitment Increase Notice to the aggregate
amount set forth in the Lender Increase Notices. Based upon the Lender Increase
Notices, any allocations made in connection therewith and any notice regarding
any Proposed New Lender, if applicable, the Agent shall notify the Borrower and
the Lenders on or before the Business Day immediately prior to the proposed
effective date of the amount of each Lender's and Proposed New Lenders' Pro Rate
Share (the "Effective Commitment Amount") and the amount of the Maximum Loan
Amount, which amount shall be effective on the following Business Day. If the
existing Lenders are not willing to increase the Maximum Loan Amount and
Borrower has not found any Proposed New Lenders and if Agent's affiliate,
LaSalle Capital Markets, has not found any New Lenders, then the Maximum Loan
Amount shall not be increased. Any increase in the Commitment shall be subject
to the following conditions precedent: (A) the Borrower shall have obtained the
consent


                                       27

<PAGE>

thereto of the Guarantor and its reaffirmation of the Loan Document(s), if any,
executed by it, which consent and reaffirmation shall be in writing and in form
and substance reasonably satisfactory to the Agent, (B) as of the date of the
Commitment Increase Notice and as of the proposed effective date of the increase
in the Maximum Loan Amount, all representations and warranties shall be true and
correct in all material respects as though made on such date (except to the
extent stated to relate to a specific earlier date, in which case such
representations and warranties shall be true and correct as of such earlier
date) and no event shall have occurred and then be continuing which constitutes
a Default or an Event of Default, (C) the Borrower, the Agent and each Proposed
New Lender or Lender that shall have agreed to provide a "Commitment" in support
of such increase in the Maximum Loan Amount shall have executed and delivered a
"Commitment and Acceptance" substantially in the form of EXHIBIT K to this
Agreement, and (D) the Borrower and the Proposed New Lender(s) shall otherwise
have executed and delivered such other instruments and documents as the Agent
shall have reasonably requested evidencing such increase, including, for any
Proposed New Lender, a Note, and such other documents as are necessary to accord
such Proposed New Lender the status of a Lender hereunder. If any fee shall be
charged by the Proposed New Lender(s) or Lender(s) that shall have agreed to
provide a "Commitment" in support of such increase in the Maximum Loan Amount in
connection with any such increase, such fee shall be in accordance with then
prevailing market conditions, which market conditions shall have been reasonably
documented by the Agent to the Borrower. Upon satisfaction of the conditions
precedent to any increase in the Maximum Loan Amount, the Agent shall promptly
advise the Borrower and each Lender of the effective date of such increase. Upon
the effective date of any increase in the Maximum Loan Amount that is provided
by a Proposed New Lender, such Proposed New Lender shall be a party to this
Agreement as a Lender and shall have the rights and Obligations of a Lender
hereunder. Nothing contained herein shall constitute, or otherwise be deemed to
be, a commitment on the part of any Lender to increase its Commitment hereunder
at any time.

     (b) For purposes of this subparagraph (b), (i) the term "Buying Lender(s)"
shall mean (A) each Lender the Pro Rata Share of which is greater than its Pro
Rata Share prior to the effective date of any increase in the Maximum Loan
Amount and (B) each Proposed New Lender that is allocated a Pro Rata Share in
connection with any Commitment Increase Notice, and (ii) the term "Selling
Lender(s)" shall mean each Lender whose Pro Rata Share of the Maximum Loan
Amount is decreased from that in effect prior to such increase in the Maximum
Loan Amount. Effective on the effective date of any increase in the Maximum Loan
Amount pursuant to subparagraph (a) above, each Selling Lender hereby sells,
grants, assigns and conveys to each Buying Lender, without recourse, warranty,
or representation of any kind, except as specifically provided herein, an
undivided percentage in such Selling Lender's right, title and interest in and
to its outstanding Pro Rata Share in the respective dollar amounts and
percentages necessary so that, from and after such sale, each such Selling
Lender's share of the Advances outstanding shall equal such Selling Lender's Pro
Rata Share (calculated based upon the new percentage) of the Advances
outstanding. On the effective date of the increase in the Maximum Loan Amount
pursuant to clause (a) above, each Buying Lender hereby purchases and accepts
such grant, assignment and conveyance from the Selling Lenders. Each Buying
Lender hereby agrees that its respective purchase price for the portion of the
Advances outstanding hereby shall equal the respective dollar amount necessary
so that, from and after such payments, each Buying Lender's share of the
Advances outstanding shall equal such Buying Lender's Pro Rata Share (calculated
based upon the new percentage) of the Advances outstanding. Such


                                       28

<PAGE>

amount shall be payable on the effective date of the increase in the Maximum
Loan Amount by wire transfer of immediately available funds to the Agent. The
Agent, in turn, shall wire transfer any such funds received to the Selling
Lenders, in same day funds, for the sole account of the Selling Lenders. Each
Selling Lender hereby represents and warrants to each Buying Lender that such
Selling Lender owns the interests being sold and assigned hereby for its own
account and has not sold, transferred or encumbered any or all of such
interests, except for participations which will be extinguished upon payment to
Selling Lender of an amount equal to the portion of the Advances outstanding
being sold by such Selling Lender. Each Buying Lender hereby acknowledges and
agrees that, except for each Selling Lender's representations and warranties
contained in the foregoing sentence, each such Buying Lender has entered into
its purchase of a Pro Rata Share with respect to such increase on the basis of
its own independent investigation and has not relied upon, and will not rely
upon, any explicit or implicit written or oral representation, warranty or other
statement of the Lenders or the Agent concerning the authorization, execution,
legality, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement or the other Loan Documents.

     (c) If a Proposed New Lender becomes a Lender, then the effective date of
any requested increase in the Maximum Loan Amount will be at the end of an
Interest Period if the LIBOR Rate is in effect, so no Lender will suffer any
loss due to prepayment of a LIBOR Advance unless Borrower reimburses the same."

     (d) To the extent there is any increase in the Maximum Loan Amount,
Advances of any such increase shall be made pursuant to and subject to the terms
and conditions of this Agreement which must be satisfied for any Advance
hereunder, and all Projects submitted by Borrower for an Advance of the
increased Maximum Loan Amount shall be subject to the approval of the Lenders as
provided herein and any existing Loan Documents shall be amended as is
reasonably required by Agent.

SECTION 3. CONDITIONS PRECEDENT.

     SECTION 3.1 CONDITIONS PRECEDENT TO THE INITIAL ADVANCE. The obligation of
each Lender to make its Pro Rata Share of the initial Advance of the Loan on or
after the Closing Date is subject to the satisfaction by Borrower and the
Company on the Closing Date of the following conditions precedent:

     (a) Loan Documents.

          (i) Line of Credit Agreement. Borrower and the Company shall have
     executed and delivered this Agreement to Agent.

          (ii) The Notes. Borrower shall have executed and delivered to Agent
     the Notes in form set forth in Exhibit B hereto, appropriately completed.

          (iii) Guaranty. The Company shall have executed and delivered to Agent
     the Guaranty substantially in the form set forth as Exhibit "H" hereto, (as
     amended, restated, modified or supplemented from time to time, the
     "Guaranty").


                                       29

<PAGE>

          (iv) Letter Agreement. Borrower and Agents shall have entered into a
     letter agreement regarding administrative fees to be paid to Agent by
     Borrower, in form and substance acceptable to Agent.

          (v) Other Agreements. Borrower shall have executed and delivered to
     Agent such other agreements and documents in connection with the Loan as
     Agent may request in form and substance satisfactory to Agent and its
     counsel.

     (b) Opinions of Counsel.

     Agent shall have received legal opinions, dated the Closing Date, addressed
to and for the benefit of the Lenders, from counsel to Borrower, and the
Company, in form and substance satisfactory to Lenders that, among other things:
(i) this Agreement and the Loan Documents have been duly authorized, executed
and delivered by Borrower and the Company and are valid and enforceable in
accordance with their terms, subject to bankruptcy and equitable principles;
(ii) that Borrower and the Company (if necessary) are qualified to do business
and in good standing under the laws of the jurisdiction in which it is
organized, in which it is transacting business and where the Properties are
located; (iii) the Loan does not violate any usury laws; and (iv) the Company
qualifies as a real estate investment trust under Section 856 of the Code.

     (c) Organizational Documents. Agent shall have received evidence
satisfactory to Agent that Borrower and Guarantor are duly organized and in good
standing.

     (d) Certified Resolutions, etc. Agent shall have received a certificate of
the secretary or assistant secretary of the Company and dated the Closing Date,
certifying (i) the names and true signatures of the incumbent officers of the
Company authorized to sign the applicable Loan Documents, (ii) the by-laws of
the Company as in effect on the Closing Date, (iii) the resolutions of the
Company's board of directors approving and authorizing the execution, delivery
and performance of all Loan Documents executed by the Company, and (iv) that
there have been no changes in the certificate of incorporation of such Person
since the date of the most recent certification thereof by the appropriate
Secretary of State.

     (e) Lien Search Reports. Agent shall have received satisfactory (i.e.,
showing no Liens other than Permitted Liens) UCC searches, together with tax
lien, judgment and litigation searches conducted in the appropriate
jurisdictions by a search firm acceptable to Lender with respect to the Borrower
(collectively, the "UCC Searches").

     (f) Financing Statements. [Deleted].

     (g) Financial Statements. Agent shall have received the (i) consolidated
audited financial statements of Borrower and the Company for the most recently
ended fiscal year of Borrower and the Company and the unaudited consolidated
financial statements of Borrower and the Company for each fiscal quarter of
Borrower and the Company ending since the end of such entity's most recent
fiscal year and (ii) for each Properties, annual operating statements for
Borrower's most recent fiscal year together with quarterly operating statements
showing the most recently ended fiscal quarter and the fiscal year to date, and
the Net Operating Income for the most recently completed 12 month period,
current occupancy statements and the approved


                                       30

<PAGE>

operating budget for the current fiscal year. Such financial statements shall be
acceptable to Agent in its sole discretion, and each such statement shall be
certified by the general partner of Borrower that, as of the Closing Date, there
has been no material adverse change in the financial condition of any
Properties, Borrower, or the Company since the date thereof.

     (h) Fees and Operating Expenses. Agent shall have received, for its
account, all Transaction Costs, fees and other fees and expenses due and payable
hereunder on or before the Closing Date, including, without limitation, the
costs of all environmental and real property appraisal reports required to be
delivered hereunder, and the fees and expenses accrued through the Closing Date
of counsel retained by Agent, and each Lender shall have received, for its
account, the fee set forth in Section 2.14(b), and Agent shall have received the
fee set forth in Section 2.14(c).

     (i) Consents, Licenses, Approvals, etc. Agent shall have received certified
copies of all consents, licenses and approvals, if any, required in connection
with the execution, delivery and performance by Borrower and the Company, and
the validity and enforceability, of the Loan Documents, or in connection with
any of the Transactions, and such consents, licenses and approvals shall be in
full force and effect.

     (j) Representations and Warranties. Agent shall have received a
certification by the Company, individually and as general partner of Borrower
certifying that all of the representations and warranties contained in this
Agreement and the other Loan Documents are true and correct with respect to each
of the Properties and Borrower, and that there is no Default or Event of Default
hereunder.

     (k) Certification as to Covenants. Agent shall have received a
certification by the Company, individually and as general partner of Borrower
together, with other evidence satisfactory to Agent that, as of the Closing
Date, the financial covenants set forth in Section 5.13, 5.14, 5.15 and 5.16 are
satisfied and that, as of the Closing Date and after giving effect to the
Transaction to be consummated thereon, there is no Default or Event of Default
hereunder.

     (l) Certification as to Applicable Laws. Agent shall have received such
evidence as Agent shall deem necessary to establish (including, without
limitation, a certification by the Company as general partner of Borrower
certifying) that to Borrower's best knowledge, after due inquiry, each
Properties is in compliance with all Applicable Laws relating to such Properties
as of the Closing Date.

     (m) Additional Matters. Agent shall have received such other certificates,
opinions, documents and instruments relating to the Transactions as may have
been reasonably requested by Agent, and all corporate and other proceedings and
all other documents (including, without limitation, all documents referred to
herein and not appearing as exhibits hereto) and all legal matters in connection
with the Transactions shall be satisfactory in form and substance to Agent.

     SECTION 3.2 CONDITIONS PRECEDENT TO ALL ADVANCES OF THE LOAN. The
obligation of each Lender to make its Pro Rata Share of any Advance under the
Loan (including the initial Advance made on or after the Closing Date) is
subject to the satisfaction on the date such Advance is made of the following
conditions precedent:


                                       31

<PAGE>

     (a) Representations and Warranties. The representations and warranties
contained herein and in the other Loan Documents (other than representations and
warranties which expressly speak only as of a different date) shall be true and
correct in all material respects on such date both before and after giving
effect to the making of such Advance.

     (b) No Default or Event of Default. No Default or Event of Default shall
have occurred and be continuing on such date either before or after giving
effect to the making of such Advance.

     (c) No Injunction. No law or regulation shall have been adopted, no order,
judgment or decree of any governmental authority shall have been issued, and no
litigation shall be pending or threatened, which in the good faith judgment of
Agent would enjoin, prohibit or restrain, or impose or result in the imposition
of any material adverse condition upon, the making of the Advances of Borrower's
obligation to pay (or Agent's or any Agent's right to receive payment of) the
Loan or the other Obligations or the consummation of the Transactions.

     (d) No Material Adverse Change. No event, act or condition shall have
occurred after the Closing Date which, in the judgment of Agent has had or could
have a Material Adverse Effect.

     (e) Notice of Borrowing. Agent shall have received a fully executed Notice
of Borrowing or Notice of Conversion or Continuation, as the case may be, in
respect of the Advance to be made on such date.

     (f) No Litigation. Except for matters identified on Schedule 5 (as the same
may be amended or supplemented), no actions, suits or proceedings shall be
pending or threatened with respect to the Transactions or the Loan Documents,
Borrower or the Company, or with respect to the Properties, that could,
individually or in the aggregate, result in a Material Adverse Effect and
matters identified on Schedule 5, individually or in the aggregate, do not
result in a Material Adverse Effect.

     (g) Title Insurance Policies/Title Searches. [Deleted].

     (h) Payment of Taxes. Agent shall have received proof of payment of any
required recording fees, mortgage recording taxes, documentary stamp taxes,
intangibles taxes or other similar costs in connection with the making of such
Advance.

     (i) Acquisition and Development of Properties. [Deleted].

     (j) Additional Matters. Agent shall have received such other certificates,
opinions, documents and instruments relating to the Transactions as may have
been reasonably requested by Agent, and all corporate and other proceedings and
all other documents (including, without limitation, all documents referred to
herein and not appearing as exhibits hereto) and all legal matters in connection
with the Transactions shall be satisfactory in form and substance to Agent.

     SECTION 3.3 ACCEPTANCE OF BORROWINGS. The acceptance by Borrower of the
proceeds of each Advance shall constitute a representation and warranty by
Borrower and the Company to Agent that all of the conditions required to be
satisfied under this Section 3 in connection with


                                       32

<PAGE>

the making of such Advance and all of the terms and provisions of this Agreement
have been satisfied.

     SECTION 3.4 SUFFICIENT COUNTERPARTS. All certificates, agreements, legal
opinions and other documents and papers referred to in this Section 3, unless
otherwise specified, shall be delivered to Agent and shall be satisfactory in
form and substance to Agent in its sole discretion (unless the form thereof is
prescribed herein) and Borrower and the Company shall deliver sufficient
counterparts of all such materials for distribution to Agent and each Lender.

SECTION 4. REPRESENTATIONS AND WARRANTIES.

     In order to induce Agent to enter into this Agreement and to make the Loan,
Borrower and the Company make the following representations and warranties,
which shall survive the execution and delivery of this Agreement and the Notes
and the making of the Loan and each Advance:

     SECTION 4.1 CORPORATE/PARTNERSHIP STATUS. (a) Borrower, (i) is a duly
organized and validly existing limited partnership, in good standing under the
laws of the jurisdiction of its formation, (ii) has all requisite partnership
power and authority, to own its property and assets (including the Properties)
and to transact the business in which it is engaged or presently proposes to
engage (including this Transaction) and (iii) has duly qualified and is
authorized to do business and is in good standing as a foreign limited
partnership, in every jurisdiction in which it owns or leases real property
(including the Properties) or in which the nature of its business requires it to
be so qualified;

     (b) the Company is a duly organized and validly existing corporation in
good standing under the laws of the jurisdiction of its incorporation; (i) has
all requisite corporate power and authorities to own its property and assets and
to transact the business in which it is engaged or presently proposes to engage
(including this Transaction) and (ii) has duly qualified and is authorized to do
business and is in good standing as a foreign corporation, in every jurisdiction
in which it owns or leases real property (including the Properties) or in which
the nature of its business requires it to be so qualified.

     SECTION 4.2 CORPORATE/PARTNERSHIP POWER AND AUTHORITY. (a) Borrower has the
partnership power and authority to execute, deliver and carry out the terms and
provisions of each of the Loan Documents to which it is a party and has taken
all necessary partnership action to authorize the execution, delivery and
performance by it of such Loan Documents. Borrower has duly executed and
delivered each such Loan Document, and each such Loan Document constitutes its
legal, valid and binding obligation, enforceable in accordance with its terms,
except as enforcement may be limited by applicable insolvency, bankruptcy or
other laws affecting creditors' rights generally, or general principles of
equity whether enforcement is sought in a proceeding in equity or at law.

     (b) The Company has the corporate power and authority to execute, deliver
and carry out the terms and provisions of each of the Loan Documents to which it
is a party and has taken all necessary corporate action to authorize the
execution, delivery and performance by it of such Loan Documents. The Company
has duly executed and delivered each such Loan Document,


                                       33

<PAGE>

and each such Loan Document constitutes its legal, valid and binding obligation,
enforceable in accordance with its terms, except as enforcement may be limited
by applicable insolvency, bankruptcy or other laws affecting creditors' rights
generally, or general principles of equity whether enforcement is sought in a
proceeding in equity or at law.

     SECTION 4.3 NO VIOLATION. Neither the execution, delivery or performance by
Borrower or the Company of the Loan Documents to which it is a party, nor the
compliance by such Person with the terms and provisions thereof nor the
consummation of the Transactions, (a) will contravene any applicable provision
of any law, statute, rule, regulation, order, writ, injunction or decree of any
court or governmental instrumentality, or (b) will conflict with or result in
any breach of, any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien (except pursuant to the Loan Documents)
upon any of the property or assets (including the Properties) of Borrower or the
Company (or of any partnership of which such Person is a partner) pursuant to
the terms of any indenture, mortgage, deed of trust, agreement or other
instrument to which Borrower or the Company (or of any partnership of which such
Person is a partner) is a party or by which it or any of its property or assets
(including the Properties) is bound or to which it may be subject, or (c) will,
with respect to Borrower, violate any provisions of its partnership agreement,
or (d) will, with respect to the Company, violate any provision of its
Certificate of Incorporation or By-Laws.

     SECTION 4.4 LITIGATION. Except as set forth on Schedule 5, there are no
actions, suits or proceedings pending or, to the best of Borrower, or the
Company's knowledge, threatened with respect to any of the Transactions or Loan
Documents, Borrower, the Company, its Subsidiaries, or with respect to the
Properties, that could, individually or in the aggregate, result in a Material
Adverse Effect. All matters set forth on Schedule 5 do not, individually or in
the aggregate, result in a Material Adverse Effect.

     SECTION 4.5 FINANCIAL STATEMENTS; FINANCIAL CONDITION; ETC. The financial
statements delivered pursuant to Section 5.1 were prepared in accordance with
GAAP consistently applied and fairly present the financial condition and the
results of operations of Borrower, the Company and the Properties covered
thereby on the dates and for the periods covered thereby, except as disclosed in
the notes thereto and, with respect to interim financial statements, subject to
normally recurring year-end adjustments. Neither Borrower nor the Company has
any material liability (contingent or otherwise) not reflected in such financial
statements or in the notes thereto. There has been no adverse change in any
condition, fact, circumstance or event that would make any such information
inaccurate, incomplete or otherwise misleading or would affect Borrower or the
Company's ability to perform its obligations under this Agreement.

     SECTION 4.6 SOLVENCY. On the Closing Date and after and giving effect to
the Transactions, Borrower and the Company will be Solvent.

     SECTION 4.7 MATERIAL ADVERSE CHANGE. Since the date of the most recent
audited financial statements delivered pursuant to Section 5.1, there has
occurred no event, act or condition, and to the best of Borrower and the
Company's knowledge, there is no prospective event or condition which has had,
or could have, a Material Adverse Effect.


                                       34
<PAGE>

     SECTION 4.8 USE OF PROCEEDS; MARGIN REGULATIONS. All proceeds of each
Advance will be used by Borrower only in accordance with the provisions of
Section 2.2. No part of the proceeds of any Advance will be used by Borrower to
purchase or carry any Margin Stock or to extend credit to others for the purpose
of purchasing or carrying any Margin Stock. Neither the making of any Advance
nor the use of the proceeds thereof will violate or be inconsistent with the
provisions of Regulations G, T, U or X of the Federal Reserve Board.

     SECTION 4.9 GOVERNMENTAL APPROVALS. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any governmental or public body or authority, or any subdivision
thereof, is required to authorize, or is required in connection with (i) the
execution, delivery and performance of any Loan Document or the consummation of
any of the Transactions or (ii) the legality, validity, binding effect or
enforceability of any Loan Document.

     SECTION 4.10 SECURITY INTERESTS AND LIENS. [Deleted].

     SECTION 4.11 TAX RETURNS AND PAYMENTS. Borrower and the Company have filed
all tax returns required to be filed by them for which the filing date has
passed and not been extended and have paid all taxes and assessments payable by
such Persons which have become due, other than (a) those not yet delinquent or
(b) those that are reserved against in accordance with GAAP which are being
diligently contested in good faith by appropriate proceedings.

     SECTION 4.12 ERISA. (a) Neither Borrower, nor the Company has any Employee
Benefit Plans other than those listed on Schedule 4. No accumulated funding
deficiency (as defined in Section 412 of the Code or Section 302 of ERISA) or
Reportable Event has occurred with respect to any Plan. As of the Closing Date,
the Unfunded Benefit Liabilities do not in the aggregate exceed $500,000.
Borrower, the Company and each member of their respective ERISA Controlled Group
have complied in all material respects with the requirements of ERISA and the
Code and plan documents for each Employee Benefit Plan and Plans and are not in
default (as defined in Section 4219(c)(5) of ERISA) with respect to payments to
a Multiemployer Plan. Neither Borrower, the Company, nor any member of their
respective ERISA Controlled Groups is subject to any present or potential
liability or withdrawal liability or annual withdrawal liability payments,
which, individually or in the aggregate, could materially adversely affect any
of such Persons. To the best knowledge of Borrower, the Company and their
respective ERISA Controlled Group, no Multiemployer Plan is or is likely to be
in reorganization (within the meaning of Section 4241 of ERISA or Section 418 of
the Code) or is insolvent (as defined in Section 4245 of ERISA). No material
liability to the PBGC (other than required premium payments), the Internal
Revenue Service, any Plan or any trust established under Title IV of ERISA has
been, or is expected by Borrower, the Company, or any member of their respective
ERISA Controlled Group to be, incurred by Borrower, the Company, nor any member
of their respective ERISA Controlled Group. Except as otherwise disclosed on
Schedule 4 hereto, none of Borrower, the Company nor, any member of their
respective ERISA Controlled Group has any contingent liability with respect to
any post-retirement benefit under any "welfare plan" (as defined in Section 3(1)
of ERISA), other than liability for continuation coverage under Part 6 of Title
I of ERISA. No lien under Section 412(n) of the Code or 302(f) of ERISA or
requirement to provide security under Section 401 (a)(29) of the Code or Section
307 of ERISA has been or is reasonably expected by Borrower, the Company, or any
member of their respective ERISA


                                       35

<PAGE>

Controlled Group to be imposed on the assets of Borrower, the Company, or any
member of their respective ERISA Controlled Group. Neither Borrower nor the
Company is a party to any collective bargaining agreement. Neither Borrower, the
Company nor any of their ERISA Controlled Group has engaged in any transaction
prohibited by Section 408 of ERISA or Section 4975 of the Code.

     (b) As of the date hereof and throughout the term of this Agreement (i)
neither Borrower nor the Company is or will be an "employee benefit plan" as
defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, and (ii)
the assets of Borrower and the assets of the Company do not and will not
constitute "plan assets" of one or more such plans for purposes of Title I of
ERISA.

     (c) As of the date hereof and throughout the term of this Agreement (i)
Borrower and the Company are not and will not be a "governmental plan" within
the meaning of Section 3(3) of ERISA and (ii) transactions by or with Borrower
and the Company are not and will not be subject to state statutes applicable to
Borrower and the Company regulating investments and fiduciary obligations with
respect to governmental plans.

     SECTION 4.13 CLOSING DATE TRANSACTIONS. On the Closing Date and immediately
prior to the making of the initial Advance hereunder, the Transactions (other
than the making of the Loan) intended to be consummated on the Closing Date will
have been consummated in accordance with the terms of the relevant Loan
Documents and in accordance with all Applicable Laws. All consents and approvals
of, and filings and registrations with, and all other actions by, any Person
required in order to make or consummate such Transactions have been obtained,
given, filed or taken and are or will be in full force and effect.

     SECTION 4.14 REPRESENTATIONS AND WARRANTIES IN LOAN DOCUMENTS. All
representations and warranties made by Borrower or the Company in the Loan
Documents are true and correct in all material respects.

     SECTION 4.15 TRUE AND COMPLETE DISCLOSURE. All factual information (taken
as a whole) furnished by or on behalf of Borrower or the Company in writing to
Agent on or prior to the Closing Date, for purposes of or in connection with
this Agreement or any of the Transactions (the "Furnished Information") is, and
all other such factual information (taken as a whole) hereafter furnished by or
on behalf of Borrower or the Company in writing to Agent will be, true, accurate
and complete in all material respects and will not omit any material fact
necessary to make such information (taken as a whole) not misleading on the date
as of which such information is dated or furnished. As of the Closing Date,
there are no facts, events or conditions directly and specifically affecting
Borrower or the Company known to Borrower or the Company and not disclosed to
Agent, in the Furnished Information, in the Schedules attached hereto or in the
other Loan Documents, which, individually or in the aggregate, have or could be
expected to have a Material Adverse Effect.

     SECTION 4.16 OWNERSHIP OF REAL PROPERTY; LEASES; EXISTING MORTGAGES.
Borrower has good and marketable fee simple (or leasehold title pursuant to
ground leases delivered to Lender) to all of the Properties and good title to
all of its personal property subject to no Liens of any kind except for
Permitted Liens. Borrower has delivered to Agent true and complete copies


                                       36

<PAGE>

of all leases and any amendments or modifications thereto currently in place for
the Properties, and such leases have not been further amended or modified, have
not been terminated, and no material defaults have occurred and are continuing
under such leases as of the date hereof. As of the date of this Agreement, there
are no options or other rights to acquire any of the Properties that run in
favor of any Person and there are no mortgages, deeds of trust, indentures, debt
instruments or other agreements creating a Lien against any of the Properties.

     SECTION 4.17 NO DEFAULT. No Default or Event of Default exists under or
with respect to any Loan Document. Neither Borrower nor the Company is in
default in any material respect beyond any applicable grace period under or with
respect to any other material agreement, instrument or undertaking to which it
is a party or by which it or any of its properties or assets is bound in any
respect, the existence of which default could result in a Material Adverse
Effect.

     SECTION 4.18 LICENSES, ETC. Borrower has obtained and holds in full force
and effect, all material franchises, trademarks, tradenames, copyrights,
licenses, permits, certificates, registrations, authorizations, qualifications,
accreditations, easements, rights of way and other rights, consents and
approvals which are necessary for the operation of the Properties and their
respective businesses as presently conducted including, without limitation, the
maintenance of any licenses or permits, the payment of any fees in connection
therewith for the operation of the Properties.

     SECTION 4.19 COMPLIANCE WITH LAW. To the best knowledge of both Borrower
and the Company, after due inquiry, Borrower and the Company are in compliance
with all Applicable Laws and other laws, rules, regulations, orders, judgments,
writs and decrees, noncompliance with which could result in a Material Adverse
Effect.

     SECTION 4.20 BROKERS. Borrower, the Company, Agent and each Lender hereby
represent and warrant that no brokers or finders were used in connection with
procuring the financing contemplated hereby (and Borrower and the Company hereby
agree to indemnify and save Lenders harmless from and against any and all
liabilities, losses, costs and expenses (including attorneys' fees or court
costs) suffered or incurred by any Lender as a result of any claim or assertion
by any party claiming by, through or under Borrower), that it is entitled to
compensation in connection with the financing contemplated hereby and each
Lender hereby agrees to indemnify and save Borrower harmless from and against
any and all liabilities, losses, costs and expenses (including attorneys' fees
or court costs) suffered or incurred by Borrower as a result of any claim or
assertion by any party claiming by, through or under any Lender that it is
entitled to compensation in connection with the financing contemplated hereby.

     SECTION 4.21 JUDGMENTS. There are no judgments, decrees, or orders of any
kind against Borrower or the Company unpaid of record which would materially or
adversely affect the ability of Borrower, or the Company to comply with its
obligations under the Loan or this Agreement in a timely manner. There are no
federal tax claims or liens assessed or filed against Borrower, the Company or
any related entity, or any principal thereof, and there are no material
judgments against Borrower, or the Company unsatisfied of record or docketed in
any court of the States in which the Properties are located or in any other
court located in the United States and no petition in bankruptcy or similar
insolvency proceeding has ever been filed by or against Borrower or the Company,
and neither Borrower or the Company has ever made any assignment


                                       37

<PAGE>

for the benefit of creditors or taken advantage of any insolvency act or any act
for the benefit of debtors.

     SECTION 4.22 PROPERTY MANAGER. The manager of all of the Borrowing Base
Properties is Borrower.

     SECTION 4.23 REIT STATUS. The Company is a "qualified real estate
investment trust" as defined in Section 856 of the Code.

     SECTION 4.24 INDEBTEDNESS. All Indebtedness for borrowed money of Borrower
and the Company is set forth on Schedule 6.

     SECTION 4.25 SURVIVAL. The foregoing representations and warranties shall
survive the execution and delivery of this Agreement and shall continue in full
force and effect until the indebtedness evidenced by the Note has been fully
paid and satisfied and Lender have no further commitment to advance funds
hereunder. The request for any Advance under this Agreement by Borrower or on
its behalf shall constitute a certification that the aforesaid representations
and warranties are true and correct as of the date of such request, except to
the extent any such representation or warranty shall relate solely to an earlier
date.

     SECTION 4.26 REPORTABLE TRANSACTION. The Borrower does not intend to treat
any Advances and related transactions as being a "reportable transaction"
(within the meaning of Treasury Regulation Section 1.6011-4). In the event the
Borrower determines to take any action inconsistent with such intention, it will
promptly notify the Agent thereof."

SECTION 5. AFFIRMATIVE COVENANTS.

     Borrower and the Company covenant and agree that on and after the Closing
Date and until the Obligations are paid in full:

     SECTION 5.1 FINANCIAL REPORTS. (a) Borrower and the Company will furnish to
Agent: (i) annual audited consolidated financial statements of Borrower and the
Company prepared in accordance with GAAP within 120 days of the end of Borrower
and the Company's fiscal year prepared by nationally recognized independent
public accountants (which accountant's opinion shall be unqualified),
satisfactory to Lender; (ii) within 60 days after the close of each quarterly
accounting period in each fiscal year, the consolidated balance sheet of
Borrower and the Company as of the end of such quarterly period and the related
consolidated statements of income, cash flow and retained earnings for such
quarterly period and for the elapsed portion of the fiscal year ended with the
last day of such quarterly period, each prepared in accordance with GAAP; (iii)
quarterly operating statements (prepared on a basis consistent with that used in
the preparation of the GAAP consolidated financial statements of Borrower and
the Company) for each Property showing the most recently ended fiscal quarter
and the fiscal year to date, and the Net Operating Income for the most recently
completed 12 month period, including a comparison with the most recent Annual
Operating Budget, within 60 days of the end of each fiscal quarter for the
quarterly operating statements, and within 120 days of the end of each fiscal
year for the annual operating statements, (iv) copies of all of Borrower and the
Company's quarterly and annual filings with the Securities and Exchange
Commission and all shareholder reports and


                                       38

<PAGE>

letters to Borrower and the Company's partners and shareholders and all other
publicly released information promptly after their filing or mailing, and (v)
within 60 days of the end of each fiscal quarter, a rent roll for each of the
Properties. Borrower and the Company will furnish such additional reports or
data as Agent may reasonably request, and Borrower and the Company shall
maintain a system of accounting capable of furnishing all such information and
data, and shall maintain its books and records respecting financial and
accounting matters in a proper manner and on a basis consistent with that used
in the preparation of the GAAP consolidated financial statements of Borrower and
the Company. Reports and data requested by Agent from Borrower and the Company
shall be provided to Agent no later than 30 days after such request.

     (b) Officer's Certificates. (i) At the time of the delivery of the
financial statements under clause (a) above, Borrower and the Company shall
provide a certificate of the Company, individually and as the general partner of
Borrower that (1) such financial statements have been prepared in accordance
with GAAP and fairly present the consolidated financial condition and the
results of operations of Borrower, the Company and the Properties on the dates
and for the periods indicated, subject, in the case of interim financial
statements, to normally recurring year end adjustments, (2) to its best
knowledge that no Default or Event of Default has occurred and is continuing as
of the date of such certificate or, if any Default or Event of Default has
occurred and is continuing on such date, specifying the nature and extent
thereof and the action Borrower and the Company propose to take in respect
thereof, (3) that since the date of the prior financial statements delivered
pursuant to such clause, no change has occurred in the financial position of
Borrower and the Company, which change could result in a Material Adverse
Effect, that there has been no change in the Company's tax status as a real
estate investment trust as defined under Section 856 of the Code, or Borrower's
status as a qualified Company subsidiary and (4) demonstrating compliance with
the financial covenants set forth in Sections 5.13, 5.14, 5.15, 5.16, 5.17, 6.5,
6.8 and 6.9 hereof and containing calculations verifying such compliance, in the
form of the Advance Worksheet which is Exhibit A-2 to this Agreement.

     (c) Borrowing Base Certificate. A certificate in form attached as Exhibit A
shall be delivered at closing, upon any addition or release of a Borrowing Base
Property, and upon Agent's request.

     (d) Notice of Default or Litigation. Promptly after Borrower or the Company
obtains actual knowledge thereof, Borrower and the Company shall give Lender
notice of (i) the occurrence of a Default or any Event of Default, (ii) the
occurrence of (x) any event of default under any partnership agreement of
Borrower, any mortgage, deed of trust, indenture or other debt or security
instrument, covering any of the assets of Borrower or the Company or (y) any
event of default under any other material agreement to which Borrower or the
Company is a party, which, if not cured could result in a Material Adverse
Effect, (iii) any litigation or governmental proceeding pending or threatened
(in writing) against Borrower or the Company which could result in a Material
Adverse Effect and (iv) any other event, act or condition which could result in
a Material Adverse Effect. Each notice delivered pursuant to this Section 5.1(d)
shall be accompanied by a certificate of the Company individually and as general
partner of Borrower setting forth the details of the occurrence referred to
therein and describing the actions Borrower and the Company propose to take with
respect thereto.


                                       39

<PAGE>

     (e) From time to time, Borrower and the Company shall provide such other
information and financial documents relating to Borrower and the Company as
Lender may reasonably request.

     SECTION 5.2 BOOKS, RECORDS AND INSPECTIONS. Borrower shall, at Borrower and
the Company's principal place of business, keep proper books of record and
account in which full, true and correct entries shall be made. Borrower and the
Company shall permit officers and designated representatives of Agent and any
Lender to visit and inspect any of the Properties, and to examine and copy the
books of record and account of Borrower, the Company and the Properties
(including, without limitation, leases, statements, bills and invoices), discuss
the affairs, finances and accounts of Borrower and the Company, and be advised
as to the same by, its and their officers and independent accountants, all upon
reasonable notice and at such reasonable times as Agent or any Lender may
desire.

     SECTION 5.3 MAINTENANCE OF INSURANCE. [Deleted].

     SECTION 5.4 TAXES. Borrower and the Company shall pay or cause to be paid,
when due (i.e., before any penalty or fine could be levied or charged), all
taxes, charges and assessments and all other lawful claims required to be paid
by Borrower and the Company, except as contested in good faith and by
appropriate proceedings diligently conducted, if adequate reserves have been
established with respect thereto in accordance with GAAP. Upon request from
Agent, Borrower and the Company shall provide evidence to Agent of payment of
such taxes, charges, assessments and other lawful claims.

     SECTION 5.5 CORPORATE FRANCHISES; CONDUCT OF BUSINESS. (a) Borrower and the
Company shall do or cause to be done, all things necessary to preserve and keep
in full force and effect its existence and good standing in the State of its
organization and in each state in which a Property is located, and its
respective franchises, licenses, permits, certificates, authorizations,
qualifications, accreditations, easements, rights of way and other rights,
consents and approvals, except where the failure to so preserve any of the
foregoing (other than existence and good standing) could not, individually or in
the aggregate, result in a Material Adverse Effect.

     (b) Borrower and the Company shall continue in their present primary
businesses of the acquisition, development, ownership and management of free
standing retail establishments and retail shopping centers and related ancillary
businesses and shall carry on and conduct their businesses in substantially the
same manner and substantially the same field of enterprise as they are presently
conducted.

     SECTION 5.6 COMPLIANCE WITH LAW. Borrower and the Company shall comply with
all Applicable Laws, rules, statutes, regulations, decrees and orders of, and
all applicable restrictions imposed by, all governmental bodies, domestic or
foreign, in respect of the conduct of their business and the ownership of their
property (including the Properties), except for such laws, rules, statutes,
regulations, decrees, orders and restrictions, (a) which Borrower or the Company
are contesting in good faith and in compliance with and pursuant to appropriate
proceedings diligently prosecuted (provided that such contest does not and
cannot (i) expose Agent, any Lender, Borrower or the Company, to any criminal or
civil liability or penalty), or (ii) give rise to a Lien against any of the
Property, or (b) the failure to observe which, taken individually or in


                                       40

<PAGE>

the aggregate, could not result in a Material Adverse Effect. Borrower and the
Company's compliance with this Section shall including, without limitation, the
filing of any required prospectus and/or the maintenance of any licenses or
permits, the payment of any fees in connection therewith for the operation of
the Properties. All Properties shall continue to be operated by Borrower as free
standing retail establishments, retail shopping centers or office buildings, as
applicable.

     SECTION 5.7 PERFORMANCE OF OBLIGATIONS. Borrower and the Company shall
perform all of its obligations under the terms of each debt instrument, lease,
undertaking and contract by which it or any of the properties (including the
Properties) is bound or to which it is a party.

     SECTION 5.8 STOCK. The Company shall at all times cause its issued and
outstanding shares of stock to be listed for trading on a publicly recognized
United States based stock exchange.

     SECTION 5.9 MAINTENANCE OF PROPERTIES. Borrower and the Company shall
ensure that the Properties are kept in good condition and repair, normal wear
and tear and casualty damage in the process of being repaired or restored
excepted.

     SECTION 5.10 COMPLIANCE WITH ERISA. (a) Borrower and the Company shall
maintain each Employee Benefit Plan and Plan in compliance with all material
applicable requirements of ERISA and the Code and with all material applicable
regulations promulgated thereunder. Borrower and the Company shall provide to
Lender, within ten (10) days of sending or receipt, copies of all filings or
correspondence with the Internal Revenue Service, PBGC, Department of Labor,
Plan, Multiemployer Plan or union, regarding any Plan, or regarding or
disclosing any liability or potential liability or violation of law under any
Employee Benefit Plan.

     (b) Borrower and the Company further covenant and agree to deliver to Agent
such certifications or other evidence from time to time throughout the term of
this Agreement, as requested by Agent in its sole discretion but no more
frequently than annually, that (i) neither Borrower nor the Company is an
"employee benefit plan" as defined in Section 3(3) of ERISA, which is subject to
Title I of ERISA, or a "governmental plan" within the meaning of Section 3(3) of
ERISA; (ii) Borrower and the Company are not subject to state statutes
regulating investments and fiduciary obligations with respect to governmental
plans; and (iii) one or more of the following circumstances is true with respect
to each of Borrower and the Company:

          (i) Equity interests in Borrower and the Company are publicly offered
     securities, within the meaning of 29 C.F.R. 2510.3-101(b)(2);

          (ii) Less than 25 percent of each outstanding class of equity
     interests in Borrower and the Company, respectively, are held by "benefit
     plan investors" within the meaning of 29 C.F.R. 2510.3-101(f)(2); or

          (iii) Borrower and the Company qualify as an "operating company" or a
     "real estate operating company" within the meaning of 29 C.F.R.
     2510.3-101(c) or (e) or an investment company registered under The
     Investment Company Act of 1940.


                                       41

<PAGE>

     (c) Borrower and the Company further covenant and agree to notify Agent
within ten (10) days of the date that the certification in this Section 5.10 is
no longer true.

     SECTION 5.11 SETTLEMENT/JUDGMENT NOTICE. Borrower and the Company agree
that they shall, within ten (10) days after a settlement of any obligation in
excess of $100,000 provide written notice to Lender of such settlement together
with a certification signed by the Company individually and as general partner
of Borrower certifying based upon the most recent quarterly consolidated
financial statements of Borrower and the Company, such settlement will not cause
Borrower nor the Company to violate the financial covenants set forth in
Sections 5.13, 5.14, 5.15 and 5.16 hereof. Borrower and the Company further
agree that they shall, within ten (10) days after entry of a final judgment in
excess of $100,000 or final judgments in excess of $250,000 in the aggregate
during the immediately preceding twelve (12) month period, provide written
notice to Agent of such judgment together with a certification signed by the
Company individually and as general partner of Borrower certifying based upon
the most recent quarterly consolidated financial statements of Borrower and the
Company, such judgment will not cause Borrower nor the Company to violate the
financial covenants set forth in Sections 5.13, 5.14, 5.15 and 5.16 hereof.
Borrower and the Company further agrees that it will provide written notice to
Lender after entry of any judgment in excess of $100,000.

     SECTION 5.12 ACCELERATION NOTICE. Borrower and the Company agree that it
shall, within ten (10) days after receipt of written notice that any
Indebtedness of Borrower and the Company hereof has been accelerated, provide
written notice to Agent of such acceleration.

     SECTION 5.13 BORROWING BASE COVENANT. Borrower shall at all times maintain
a Borrowing Base, consisting of at least ten (10) Properties that is greater
than or equal to the outstanding Loan Amount. To the extent the Borrowing Base
Covenant set forth in the preceding clause is not met, then:

     (a) to the extent that the then outstanding principal balance of the Loan
exceeds the Borrowing Base, Borrower shall repay, without penalty or premium
(other than as provided in Section 2.16), that portion of the outstanding
principal balance of the Loan which is in excess of the Borrowing Base within
five (5) Business Days of Borrower's receipt of written notice that the
Borrowing Base Covenant is no longer satisfied.

     (b) The Available Loan Amount shall not be reduced pursuant to Section
5.13(a) above if (i) Borrower shall provide Lender, within five Business Days of
the notice set forth in Section 5.13(a) an additional Borrowing Base Property or
Properties such that the Borrowing Base Covenant is met.

     SECTION 5.14 LEVERAGE. Borrower and the Company on a consolidated basis at
all times shall maintain Leverage equal to or less than 65%.

     SECTION 5.15 PORTFOLIO DEBT SERVICE COVERAGE. Borrower and the Company on a
consolidated basis shall at all times maintain for the most recently ended
twelve (12) month period a ratio of EBIDTA to Total Interest Expense equal to or
greater than 2.00 to 1.00.


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<PAGE>

     SECTION 5.16 CONSOLIDATED TANGIBLE NET WORTH. Borrower and the Company on a
consolidated basis shall at all times on and after date hereof maintain
Consolidated Tangible Net Worth of at least $90,000,000, plus 75% of the cash
proceeds of any equity offering of the Company, net of underwriting discounts
and commissions and other reasonable costs associated therewith.

     SECTION 5.17 FIXED CHARGE COVERAGE. As of the end of each of its fiscal
quarters, on a trailing twelve-month basis, the Borrower shall maintain a ratio
of (a) Funds from Operations, to (b) the aggregate of Total Debt Service plus
preferred dividends, of not less than 1.50 to 1.00.

     SECTION 5.18 MANAGER. Borrower and/or the Company shall at all times remain
the property manager of all of the Properties, and shall maintain the exclusive
right to sell, finance, and grant mortgages upon and manage the Properties.

     SECTION 5.19 FURTHER ASSURANCES. Borrower and the Company will at their
sole cost and expense, at any time and from time to time upon request of Agent
take or cause to be taken any action and execute, acknowledge, deliver or record
any further documents, opinions, deeds of trust, deeds to secure debt,
mortgages, security agreements or other instruments which Agent in its
reasonable discretion deems necessary or appropriate to carry out the purposes
of this Agreement and the other Loan Documents including (i) to consummate the
transfer or sale of the Loan or any portion thereof, (ii) to preserve, protect
and perfect the security intended to be created and preserved in the Properties
and (iii) to establish, preserve and protect the security interest of Lender in
and to any personal property owned by Borrower and installed in, furnished to or
used or intended to be used in connection with any construction in connection
with the Properties or the operation thereof.

     SECTION 5.20 REIT STATUS OF THE COMPANY AND BORROWER. The Company shall at
all times maintain its status as a "qualified real estate investment trust"
under Section 856 of the Code. The Company shall at all times be the sole
general partner of Borrower.

     SECTION 5.21 LOAN DOCUMENT COVENANTS. Borrower and the Company shall comply
with all of the terms and conditions and covenants in the other Loan Documents.

     SECTION 5.22 APPRAISALS; MARKET STUDIES. [Deleted].

     SECTION 5.23 CONTINUATION OF OWNERSHIP; MANAGEMENT. [Deleted].

     SECTION 5.24 DEVELOPMENT PROPERTIES. [Deleted].

SECTION 6. NEGATIVE COVENANTS.

     Borrower and the Company covenant and agree that on and after the Closing
Date until the Obligations are paid in full:

     SECTION 6.1 LIENS. Borrower and Company shall not create, incur, assume or
suffer to exist, directly or indirectly, any Lien on any of the Borrowing Base
Properties, other than the following (collectively, the "Permitted Liens"):


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<PAGE>

     (a) Liens for taxes not yet due or which are being contested in good faith
by appropriate proceedings diligently conducted and with respect to which
adequate reserves are being maintained in accordance with GAAP;

     (b) Statutory liens of landlords and Liens of mechanics, materialmen and
other Liens imposed by Law (other than any Lien imposed by ERISA) created in the
ordinary course of business for amounts not yet due or (i) which are being
contested in good faith by appropriate proceedings diligently conducted, and
(ii) with respect to which adequate bonds have been posted or have been insured
over by the title insurance company if required to do so by Applicable Law or
the terms of the Mortgage; and

     (c) Easements, rights-of-way, zoning and similar restrictions and other
similar charges or encumbrances not interfering with the ordinary conduct of the
business of Borrower and which do not detract materially from the value of any
of the Properties to which they attach or impair materially the use thereof by
Borrower.

     SECTION 6.2 RESTRICTION ON FUNDAMENTAL CHANGES; DISPOSITION OF PROPERTIES.
Without the prior written consent of all of the Lenders, which consent may be
withheld in the sole and absolute discretion of the Lenders, Borrower and the
Company shall not enter into any merger or consolidation, or sell all or
substantially all of their respective assets to any other Person, provided that
Borrower or the Company, may merge with another Person if, prior to and after
giving effect to such merger, no Default or Event of Default shall have occurred
and be continuing, and Borrower or the Company is the surviving entity of such
merger.

     SECTION 6.3 TRANSACTIONS WITH AFFILIATES. Borrower and the Company shall
not enter into any material transaction or series of related transactions,
whether or not in the ordinary course of business, with any Affiliate of
Borrower or an Affiliate of the Company, other than on terms and conditions
substantially as favorable as would be obtainable at the time in a comparable
arm's-length transaction with a Person other than an Affiliate of Borrower or an
Affiliate of the Company, and only if such transaction is subject and
subordinate to the Loan and Loan Documents on terms acceptable to Agent.

     SECTION 6.4 PLANS. Borrower and the Company shall not, nor shall they
permit any member of their respective ERISA Controlled Group to, (i) take any
action which would (A) increase the aggregate present value of the Unfunded
Benefit Liabilities under all Plans to an amount in excess of $500,000 or (B)
result in liability or Contingent Obligation for any post-retirement benefit
under any "welfare plan" (as defined in Section 3(1) of ERISA), other than
liability for continuation coverage under Part 6 of Title I of ERISA or (ii)
engage in any transaction prohibited by Section 408 of ERISA or Section 4975 of
the Code.

     SECTION 6.5 DISTRIBUTIONS. Neither Borrower nor the Company shall declare
or make any Distributions (determined on an historic cumulative basis from and
after the Closing Date) in excess of an amount equal to 95% of Funds from
Operations.

     SECTION 6.6 ADDITIONAL KMART PROPERTIES. [Deleted].


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<PAGE>

     SECTION 6.7 RESTRICTIONS ON SALE OR EXCHANGE OF EQUITY OR DEBT SECURITIES.
Neither Borrower nor the Company shall issue, sell or exchange any stock or
other equity or debt securities of Borrower or the Company to or with any tenant
of Borrower for whatever consideration, or issue, sell or exchange any stock or
partnership interests (other than common stock of the Company as currently
authorized or Partnership Units of Borrower as currently authorized, which in
either case is not limited or preferred as to dividends and distributions) to
any Person, without the prior written consent of all of the Lenders, which
consent shall not be unreasonably withheld.

     SECTION 6.8 NO UNSECURED INDEBTEDNESS. Neither Borrower nor Company will
incur any unsecured Indebtedness, except for Indebtedness that is (i) accounts
payable incurred in the ordinary course of business, and (ii) non-recourse debt.

     SECTION 6.9 LIMIT ON SECURED INDEBTEDNESS. Borrower's and Company's secured
Indebtedness shall not exceed 45% of Borrower's and Company's total assets as
shown on the most recent consolidated financial report to Agent.

SECTION 7. EVENTS OF DEFAULT.

     SECTION 7.1 EVENTS OF DEFAULT. Each of the following events, acts,
occurrences or conditions shall constitute an Event of Default under this
Agreement, regardless of whether such event, act, occurrence or condition is
voluntary or involuntary or results from the operation of law or pursuant to or
as a result of compliance by any Person with any judgment, decree, order, rule
or regulation of any court or administrative or governmental body:

     (a) Failure to Make Payments. Borrower shall (i) default in the payment
when due of any principal of the Loan or (ii) default in the payment within five
(5) days after the due date of (x) any interest on the Loan or (y) any fees,
Transaction Costs or any other amounts owing hereunder; provided, however, that
any interest payable with respect to any delinquent payment shall be calculated
at the Default Rate from the date such payment was actually due as if there were
no grace period.

     (b) Breach of Representation or Warranty. Any representation or warranty
made by Borrower or the Company herein or in any other Loan Document or in any
certificate or statement delivered pursuant hereto or thereto shall prove to be
false or misleading in any material respect on the date as of which made or
deemed made.

     (c) Breach of Covenants.

          (i) Borrower or the Company shall fail to perform or observe any
     agreement, covenant or obligation arising under Sections 5.1, 5.13, 5.14,
     5.15, 5.16, 5.17, 5.18, or Section 6.

          (ii) Borrower or the Company shall fail to perform or observe any
     agreement, covenant or obligation arising under this Agreement (except
     those described in subsections (a), (b) and (c)(i) above), and such failure
     shall continue uncured for thirty (30) days, or such longer period of time
     as is reasonably necessary to cure such Default,


                                       45

<PAGE>

     provided that Borrower or the Company has commenced and is diligently
     prosecuting the cure of such Default and cures it within ninety (90) days.

          (iii) Borrower or the Company shall fail to perform or observe any
     agreement, covenant or obligation arising under any provision of the Loan
     Documents other than this Agreement, which failure shall continue after the
     end of any applicable grace period provided therein.

     (d) Default Under Other Agreements. Borrower or the Company shall default
beyond any applicable grace period in the payment, performance or observance of
any obligation or condition with respect to any Indebtedness including other
Indebtedness owed by Borrower to Agent or any other event shall occur or
condition exist, if the effect of such default, event or condition is to
accelerate the maturity of any such Indebtedness or to permit (without regard to
any required notice or lapse of time) the holder or holders thereof, or any
trustee or agent for such holders, to accelerate the maturity of any such
Indebtedness, or any such Indebtedness shall become or be declared to be due and
payable prior to its stated maturity.

     (e) Bankruptcy, etc. (i) Borrower or the Company shall commence a voluntary
case concerning itself under the Bankruptcy Code; or (ii) an involuntary case is
commenced against Borrower or the Company and the petition is not controverted
within thirty (30) days, or is not dismissed within sixty (60) days, after
commencement of the case or (iii) a custodian (as defined in the Bankruptcy
Code) is appointed for, or takes charge of, all or substantially all of the
property of Borrower or the Company, or Borrower or the Company commences any
other proceedings under any reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to Borrower or the
Company, or there is commenced against Borrower or the Company any such
proceeding which remains undismissed for a period of sixty (60) days; or (iv)
any order of relief or other order approving any such case or proceeding is
entered; or (v) Borrower or the Company is adjudicated insolvent or bankrupt; or
(vi) Borrower or the Company suffers any appointment of any custodian or the
like for it or any substantial part of its property to continue undischarged or
unstayed for a period of sixty (60) days; or (vii) Borrower or the Company makes
a general assignment for the benefit of creditors; or (viii) Borrower or the
Company shall fail to pay, or shall state that it is unable to pay, or shall be
unable to pay, its debts generally as they become due; or (ix) Borrower or the
Company shall call a meeting of its creditors with a view to arranging a
composition or adjustment of its debt; or (x) Borrower or the Company shall by
any act or failure to act consent to, approve of or acquiesce in any of the
foregoing; or (xi) any corporate or partnership action is taken by Borrower or
the Company for the purpose of effecting any of the foregoing.

     (f) ERISA. (i) Any Termination Event shall occur, or (ii) any Plan shall
incur an accumulated funding deficiency (as defined in Section 412 of the Code
or Section 302 of ERISA), whether or not waived, or fail to make a required
installment payment on or before the due date under Section 412 of the Code or
Section 302 of ERISA, or (iii) Borrower, the Company or a member of their
respective ERISA Controlled Group shall have engaged in a transaction which is
prohibited under Section 4975 of the Code or Section 406 of ERISA which could
result in the imposition of liability in excess of $100,000 on any of Borrower,
the Company or any member of their respective ERISA Controlled Group and an
exemption shall


                                       46

<PAGE>

not be applicable or have been obtained under Section 408 of ERISA or Section
4975 of the Code, or (iv) Borrower or the Company or any member of their
respective ERISA Controlled Group shall fail to pay when due an amount which it
shall have become liable to pay to the PBGC, any Plan or a trust established
under Title IV of ERISA, or (v) Borrower or the Company shall have received a
notice from the PBGC of its intention to terminate a Plan or to appoint a
trustee to administer such Plan, which notice shall not have been withdrawn
within fourteen (14) days after the date thereof, or (vi) a condition shall
exist by reason of which the PBGC would be entitled to obtain a decree
adjudicating that an ERISA Plan must be terminated or have a trustee appointed
to administer any ERISA Plan, or (vii) Borrower, the Company or a member of
their respective ERISA Controlled Group suffers a partial or complete withdrawal
from a Multiemployer Plan or is in default (as defined in Section 4219(c)(5) of
ERISA) with respect to payments to a Multiemployer Plan, or (viii) a proceeding
shall be instituted against any of Borrower, the Company or any member of their
respective ERISA Controlled Group to enforce Section 515 of ERISA, or (ix) any
other event or condition shall occur or exist with respect to any Employee
Benefit Plan or Plan which could subject Borrower, the Company or any member of
their respective ERISA Controlled Group to any tax, penalty or other liability
in excess of $100,000 or the imposition of any lien or security interest on
Borrower, the Company or any member of their respective ERISA Controlled Group,
or (ix) with respect to any Multiemployer Plan, the institution of a proceeding
to enforce Section 515 of ERISA, to terminate such Plan, the receipt of a notice
of reorganization or insolvency under Sections 4241 or 4245 of ERISA, in any
event which could result in liability in excess of $100,000 to Borrower, the
Company, or any member of any of their ERISA Controlled Group, or (xi) the
assets of Borrower or the Company become or are deemed to be assets of an
Employee Benefit Plan.

     (g) Judgments. One or more judgments or decrees (i) in an aggregate amount
of $100,000 or more are entered against Borrower or the Company in any
consecutive twelve (12) month period or (ii) which, with respect to Borrower or
the Company, could result in a Material Adverse Effect, shall be entered by a
court or courts of competent jurisdiction against any of such Persons (other
than any judgment as to which, and only to the extent, a reputable insurance
company has acknowledged coverage of such claim in writing) and (x) any such
judgments or decrees shall not be stayed (by appeal or otherwise), discharged,
paid, bonded or vacated within thirty (30) days or (y) enforcement proceedings
shall be commenced by any creditor on any such judgments or decrees.

     (h) Company. The Company fails to remain a publicly-traded real estate
investment trust in good standing with the exchange upon which its stock is
listed and traded and with the Securities and Exchange Commission.

     (i) First Priority Lien. [Deleted].

     (j) Exchange. The Company shall fail to be listed for trading on a publicly
recognized United States based stock exchange.

     (k) Invalidity of Loan Documents. Any of the Loan Documents for any reason,
other than partial or full release in accordance with the terms thereof, ceases
to be in full force or is declared to be null and void or is terminated, or
Borrower or the Company denies that it has any further liability under and Loan
Documents to which it is a party, or gives notice to such effect.


                                       47

<PAGE>

     (l) Material Adverse Change. Any material adverse change in Borrower or the
Company's business or financial conditions, a material adverse change in a
material portion of the Properties has occurred or is imminent, if the full
performance of any of the Obligations is materially impaired.

     SECTION 7.2 RIGHTS AND REMEDIES. (a) Upon the occurrence of any Event of
Default described in Section 7.1(e), the Available Loan Amount and the Maximum
Loan Amount shall automatically and immediately terminate and the unpaid
principal amount of and any and all accrued interest on the Loan and any and all
accrued fees and other Obligations shall automatically become immediately due
and payable, with all additional interest thereon calculated at the Default Rate
from the occurrence of the Default until the Loan is paid in full and without
presentation, demand, or protest or other requirements of any kind (including,
without limitation, valuation and appraisement, diligence, presentment, notice
of intent to demand or accelerate and notice of acceleration), all of which are
hereby expressly waived by Borrower and the Company, and the obligation of each
Lender to make any Advances hereunder shall thereupon terminate; and upon the
occurrence and during the continuance of any other Event of Default, Agent and
the Lenders may, and upon request of the Required Lenders, Agent for the benefit
of the Lenders, shall, by written notice to Borrower (i) declare that the
Available Loan Amount and the Maximum Loan Amount are terminated, whereupon the
Available Loan Amount, and the Maximum Loan Amount and the obligation of each
Lender to make any Advances (or their pro rata share thereof) hereunder shall
immediately terminate, and (ii) declare the unpaid principal amount of and any
and all accrued and unpaid interest on the Loan and any and all accrued fees and
other Obligations to be, and the same shall thereupon be, immediately due and
payable with all additional interest thereon calculated at the Default Rate from
the occurrence of the Default until the Loan is paid in full and without
presentation, demand, or protest or other requirements of any kind (including,
without limitation, valuation and appraisement, diligence, presentment, notice
of intent to demand or accelerate and notice of acceleration), all of which are
hereby expressly waived by Borrower and the Company.

     (b) Agent and any Lender may offset any indebtedness, obligations or
liabilities owed to Borrower or the Company against any indebtedness,
obligations or liabilities of Borrower and the Company to it.

     (c) Agent and the Lenders may avail themselves of any remedies available
under the Loan Documents or at law or equity; and at the direction of the
Required Lenders, Agent, on behalf of the Lenders, shall avail itself of any
such remedies.

     SECTION 7.3 CROSS DEFAULT. Any Borrower default under the terms of any
Indebtedness to any Lender shall constitute an Event of Default under this
Agreement, and at the direction of the Required Lenders, Agent, on behalf of the
Lenders, shall avail itself of any such remedies.

SECTION 8. THE AGENT; LENDERS; PARTICIPANTS

     SECTION 8.1 APPOINTMENT. Each Lender hereby irrevocably designates,
appoints and authorizes Agent and any successor Agent pursuant to Section 8.16
to act as Agent for such Lender under this Agreement and to execute and deliver
or accept on behalf of each of the


                                       48

<PAGE>

Lenders the other Loan Documents. Each Lender hereby irrevocably authorizes, and
each holder of any Note by the acceptance of a Note shall be deemed irrevocably
to authorize, the Agent and any successor Agent pursuant to Section 8.16 to take
such action on its behalf under the provisions of this Agreement and the other
Loan Documents and any other instruments and agreements referred to herein, and
to exercise such powers and to perform such duties hereunder as are specifically
delegated to or required of the Agents by the terms hereof, together with such
powers as are reasonably incidental thereto. Agent agrees to act as the Agent
provided in this Agreement. Any action taken by it in such capacity as
authorized by this Agreement shall be binding on all of the Lenders.

     SECTION 8.2 ADVANCES AND PAYMENTS. (a) All Advances will be made by Agent
on behalf of the Lenders on the requested date of Advance, except that the Pro
Rata Share of any Lender which the Agent receives after 1:00 p.m. Detroit time
on the requested date of Advance, or at any time after the requested date of
Advance, will be disbursed on the Business Day following its receipt. Nothing in
this Agreement or any other Loan Document is to be construed to require Agent to
advance funds on behalf of any Lender or to relieve any Lender from its
obligations to make its Pro Rata Share of Advances or to prejudice any rights
that Borrower may have against any Lender as a result of any default by that
Lender hereunder.

     (b) In order to minimize transfers between the Agent and each Lender of
funds representing the Lender's Pro Rata Share of an Advance, a Borrower
payment, or (to the extent that Agent has not been promptly reimbursed by
Borrower) other amounts for which the Agent is entitled to Lender reimbursement
or indemnification, coincidental transfer and loan account adjustments may be
made on a "net" basis. Not later than the Business Day immediately preceding the
date of a Base Rate Advance and not later than three (3) Business Days
immediately preceding the date of a LIBOR Advance, or not later than the
Business Day immediately prior to a date on which Lender reimbursement of the
Agent is requested, Agent will advise each Lender by telephone, telex or
telecopy as to the purpose and aggregate amount to be disbursed or paid by Agent
and the date of Advance or actual anticipated payment date, as the case may be;
the amount which is such Lender's Pro Rata Share thereof; and, if in order to
cause all loan accounts maintained by Agent for such Lender to conform to its
Pro Rata Share of the Loan, the amount which such Lender is requested to remit
to Agent will be different, the identity of the loan account(s) requiring
adjustment and the nature and amounts due to or from the Lender with respect
thereto. All amounts which a Lender is required to remit to Agent will be made
available to Agent by transfer of same-day funds to the designated wire account
of Agent not later than 1:00 p.m. Detroit time on the date of Advance, as
evidenced by a wire transfer number or actual receipt by Agent. Agent will have
no liability to Borrower for the failure of any Lender to make an Advance on the
date of Advance, and if any date of Advance is on a day when any of the Lenders
are not open for business, then each Lender shall transfer to Agent its Pro Rata
Share on the next day such Lender is open for business.

     (c) All Loan payments in respect of Advances, interest, fees or expenses
incurred by the Lenders and required by Borrower to be reimbursed will be deemed
paid when immediately available U.S. currency or its equivalent is paid in the
amount required by Borrower to Agent. On the Business Day Agent receives a
Borrower payment, Agent will advise each Lender by telephone, telex or telecopy
of the aggregate amount and such Lender's Pro Rata Share of amounts actually
received by Agent in respect of Advances, interest, fees, or, to the extent that


                                       49

<PAGE>

the Lenders previously have remitted to Agent therefor, reimbursements for other
amounts for which Agent has required Lender reimbursement or indemnification.
Agent will pay to such Lender on the same Business Day, by transfer to such
Lender's wire account (as specified by such Lender on Exhibit 8.2 to this
Agreement, or as amended by such Lender from time to time after the date hereof)
its Pro Rata Share, "netted" as permitted herein, of any such payment received
by Agent not later than 1:00 p.m. Detroit time, and otherwise on the next
Business Day.

     (d) Any Agent payment to a Lender under this Agreement in the belief or
expectation that a related payment has been or will be received by Agent from
Borrower, which related payment in fact is not received by Agent, will entitle
Agent to recover such amount from the Lender without set-off, counterclaim or
deduction of any kind. If Agent determines at any time that an amount received
by Agent under this Agreement must be returned to Borrower or paid to any other
Person pursuant to any solvency law or otherwise, then, notwithstanding any
other term or condition of this Agreement, Agent will not be required to
distribute any portion thereof to any Lender. However, if Agent has previously
distributed such amount, each Lender will repay to Agent on demand any portion
of such amount that Agent has distributed to such Lender, together with interest
at such rate, if any, as Agent is required to pay to Borrower or such other
Person, without set-off, counterclaim or deduction of any kind by the Lender.

     SECTION 8.3 AMENDMENTS, CONSENTS AND WAIVERS FOR CERTAIN ACTIONS. (a) Agent
is authorized and empowered on behalf of the Lenders to amend or modify in
writing any provision of this Agreement or another Loan Document which relates
or pertains to the Borrower, or to consent to or waive Borrower's performance of
any obligation on any Event of Default, only with the prior written consent of
the Required Lenders; provided, however, that if another provision of this
Agreement requires the consent of all of the Lenders, any amendment,
modification, consent or waiver as to such provision shall require the prior
written consent of all of the Lenders. When Agent requests the consent of the
Required Lenders or all of the Lenders, as applicable, and does not receive a
written consent or denial thereof from any Lender within five (5) Business Days
after such Lender's receipt of such request, then Agent shall again request the
consent of such Lender, and if Agent does not receive a written consent or
denial from such Lender within five (5) days of such Lender's receipt of such
second request therefor, then such Lender will be deemed to have denied such
consent. Borrower agrees that it will not assert any claim of amendment,
modification, consent or waiver which is not in writing, which writing (i)
references this Agreement or any other of the other Loan Documents, and (ii) is
signed by the Required Lenders. Notwithstanding the foregoing, no amendment or
waiver shall change the definition of Required Lenders or amend this Section
8.3, increase the principal amount of the Loan, reduce the stated interest rate
or fees provided for in the Loan Documents, postpone the scheduled payment of
any principal, interest or fees under the Loan Documents, or modify, amend or
waive compliance by Borrower with Sections 5.13, 5.14, 5.15 or 5.16, except as
expressly provided for in the Loan Documents, without the consent of all
Lenders. Any amendment fee paid by Borrower shall be for the pro-rata benefit of
the Lenders.

     (b) In the event Agent requests the consent or approval of any Lender, the
Required Lenders or of all of the Lenders pursuant to this Agreement or any
other Loan Document or agreement among the Lenders and such consent or approval
is not received from the required Lenders, then Agent may, at its option,
require the nonconsenting Lender(s) to assign its interest in the Loan to Agent
and the other consenting Lenders who wish to participate in the purchase of


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<PAGE>

the nonconsenting Lender's interest in the Loan, or to a replacement Lender
designated by Agent (to the extent Agent and the consenting Lenders do not elect
to purchase the nonconsenting Lender's interest in the Loan) for a price equal
to the then outstanding principal amount thereof plus accrued and unpaid
interest and fees under Section 2.14(a) and (c) due the nonconsenting Lender,
which interest and fees will be paid when collected from Borrower. The
nonconsenting Lender shall assign its interest in the Loan to the parties
designated by Agent pursuant to Section 8.19(a). Any consenting Lender who
wishes to purchase a portion of the nonconsenting Lender's interest in the Loan
shall notify Agent of such election within five (5) Business Days of Agent's
notice to the consenting Lenders of Agent's election to require the
nonconsenting Lender to assign its interest in the Loan as set forth above. The
Lenders who elect to purchase a portion of the nonconsenting Lender's interest
in the Loan (including Agent, if applicable) shall purchase such interest in
proportion to their respective Pro Rata Shares.

     SECTION 8.4 DELEGATION OF DUTIES. The Agent may perform any of its duties
hereunder by or through agents or employees and, subject to Sections 8.7 and 8.8
hereof, shall be entitled to engage and pay for the advice or services of any
attorneys, accountants or other experts concerning all matters pertaining to its
duties hereunder and to rely upon any advice so obtained.

     SECTION 8.5 NATURE OF AGENT'S DUTIES; INDEPENDENT CREDIT INVESTIGATION. The
Agent shall perform its obligations under this Agreement and the other Loan
Documents in good faith according to the same standard of care as that
customarily exercised by the Agent in administering its own loans. The Agent
shall at all times keep accurate books of account reflecting the interests of
the Lenders in the Loans. Such books shall be available to the Lenders for
inspection during business hours with reasonable notice to the Agent. Except as
stated above in this Section 8.5 or as otherwise expressly set forth in this
Agreement, the Agent shall have no duties or responsibilities, and no implied
covenants, functions, responsibilities, duties, obligations, or liabilities
shall be read into this Agreement or otherwise exist. The Agent shall not have
by reason of this Agreement or any other Loan Document a fiduciary relationship
in respect of any Lender; and nothing in this Agreement or any other Loan
Document, expressed or implied, is intended to or shall be so construed as to
impose upon the Agent any obligations in respect of this Agreement except as
expressly set forth herein. Each Lender expressly acknowledges (i) that the
Agent has not made any representations or warranties to them and that no act by
the Agent hereafter taken, including any review of the affairs of the Borrower
or the Company, shall be deemed to constitute any representation or warranty by
the Agent to any Lender; (ii) that it has made and will continue to make,
without reliance upon the Agent, its own independent investigation of the
financial creditworthiness of the Borrower and the Company in connection with
this Agreement and the making and continuance of the Loan; and (iii) that,
except as expressly provided herein, the Agent shall not have any duty or
responsibility, either initially or on a continuing basis, to provide any Lender
with credit or other information with respect thereto, whether coming into its
possession before the making of the Loan or at any time or times thereafter.

     SECTION 8.6 ACTIONS IN DISCRETION OF THE AGENT; INSTRUCTIONS FROM THE
LENDERS. The Agent agrees, upon the written request of the Required Lenders, to
take or refrain from taking any action of the type specified as being within the
Agent's rights, powers or discretion herein. In the absence of a request by the
Required Lenders, the Agent shall have authority, in its sole discretion, to
take or not to take any such action unless this Agreement specifically requires
the


                                       51

<PAGE>

consent of the Required Lenders or all of the Lenders. Any action taken or
failure to act pursuant to such instructions or discretion shall be binding on
the Lenders. No Lender shall have any right of action whatsoever against the
Agent as a result of the Agent acting or refraining from acting hereunder in
accordance with the instructions of the Required Lenders or all of the Lenders,
or in the absence of such instructions, in the absolute discretion of the Agent.

     SECTION 8.7 REIMBURSEMENT AND INDEMNIFICATION OF AGENT BY THE BORROWER. The
Borrower unconditionally agrees to pay or reimburse the Agent and hold the Agent
harmless against (i) liability for the payment of all reasonable out-of-pocket
costs, expenses and disbursements, including but not limited to reasonable fees
and expenses of counsel, incurred by the Agent (a) in connection with costs
incurred in connection with the closing of the Loan for the development,
preparation, printing, execution, administration, syndication, interpretation
and performance of this Agreement and the other Loan Documents, (b) relating to
any amendments, waivers or consents requested by the Borrower pursuant to the
provisions hereof, and (c) in connection with any workout or restructuring, or
in connection with the protection, preservation, exercise or enforcement of this
Agreement or any other Loan Document or collection of amounts due hereunder or
thereunder or the proof and allowability of any claim arising under this
Agreement or any other Loan Document, whether in bankruptcy or receivership
proceedings or otherwise, and (ii) except to the extent the same results from
the breach by any Lender of its obligations hereunder, all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against the Agent, in its capacity as such, in any
way relating to or arising out of this Agreement or any other Loan Documents or
any action taken or omitted by the Agent hereunder or thereunder. In addition,
the Borrower agrees to reimburse and pay the reasonable fees and expenses of the
Agent's legal counsel and other consultants and all reasonable out-of-pocket
expenses of the Agent's regular employees and agents engaged periodically to
review the books, records and business properties of the Borrower and the
Company.

     SECTION 8.8 EXCULPATORY PROVISIONS. Neither Agent nor any of its directors,
officers, employees, agents or Affiliates shall (a) be liable to any Lender for
any action taken or omitted to be taken by it or them hereunder, or in
connection herewith or any other Loan Document, except that Agent shall be
liable with respect to its own gross negligence or willful misconduct, (b) be
responsible in any manner to any Lender for the effectiveness, enforceability,
genuineness, validity or the due execution of this Agreement or any other Loan
Document or for any recital, representation, warranty, document, certificate,
report or statement herein or made or furnished under or in connection with this
Agreement or any other Loan Document, or (c) be under any obligation to any of
the Lenders to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions hereof or thereof on the part of the
Borrower, or the financial condition of the Borrower or the Company, or the
existence or possible existence of any Default or Event of Default.

     SECTION 8.9 REIMBURSEMENT AND INDEMNIFICATION OF AGENT BY LENDERS. Each
Lender agrees to reimburse and indemnify the Agent (to the extent not reimbursed
by the Borrower or the Company and without limiting the obligation of the
Borrower or the Company to do so and to the extent not due to the indemnified
party's gross negligence or willful misconduct) in proportion to each Lender's
Commitment from and against all liabilities,


                                       52

<PAGE>

obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against the Agent, in their capacities as such, in
any way relating to or arising out of this Agreement or any other Loan Document
or any action taken or omitted by the Agent hereunder or thereunder. In
addition, each Lender agrees to reimburse the Agent (to the extent not
reimbursed by the Borrower or the Company and without limiting the obligation of
the Borrower or the Company to do so) in proportion to each Lender's Commitment,
for the reasonable fees and expenses of the Agent's legal counsel and other
consultants and all reasonable out-of-pocket expenses of the Agent's agents
engaged periodically to review the books, records and business properties of the
Borrower or any of the Company.

     SECTION 8.10 RELIANCE BY AGENT. The Agent shall be entitled to rely upon
any writing, telegram, telex or teletype message, resolution, notice, consent,
certificate, letter, cablegram, statement, order or other document or
conversation by telephone or otherwise believed by it to be genuine and correct
and to have been signed, sent or made by the proper person or persons, and upon
the advice and opinions of counsel and other professional advisers selected by
the Agent. The Agent shall be fully justified in failing or refusing to take any
action not expressly authorized hereunder unless it shall first be indemnified
to its satisfaction (which indemnification shall be in proportion to each
Lender's Commitment) by the Lenders against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action.

     SECTION 8.11 NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default unless
the Agent has actual knowledge of such Default or Event of Default or has
received notice from a Lender or the Borrower referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default."

     SECTION 8.12 NOTICES AND INFORMATION. The Agent shall promptly send to each
Lender (a) a copy of all material written notices, requests or demands received
from or given to the Borrower, the Company or any Lender pursuant to the
provisions of this Agreement or the other Loan Documents; and (b) a copy of all
financial reports and information furnished by the Borrower pursuant to Section
5.1 hereof.

     SECTION 8.13 AGENT AND THE LENDERS IN THEIR INDIVIDUAL CAPACITIES. With
respect to their Commitments and Advances made pursuant thereto, the Agent shall
have the same rights and powers hereunder as any other Lender and may exercise
the same as though it were not the Agent, and the term "Lenders" shall, unless
the context otherwise indicates, include the Agent in its individual capacity.
The Agent and its affiliated entities and each of the Lenders and their
respective affiliated entities may, without liability to account, except as
prohibited herein, make loans to, accept deposits from, discount drafts for, act
as trustee under indentures of, and generally engage in any kind of banking or
trust business with the Borrower or the Company, as though the Agent or such
Lender were not a party to this Agreement. The Lenders acknowledge that Agent
has informed them that it has existing credit facilities with the Borrower and
the Company, and that such credit facilities may provide for security interests
in the collateral and rights of offset against accounts of the Borrower and the
Company. Notwithstanding the foregoing, with respect to Agent's loan in the
principal amount of $5,000,000 to Borrower,


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<PAGE>

Agent shall not accept any principal repayment of that loan after the occurrence
and during the continuance of an Event of Default hereunder without Fifth
Third's consent.

     SECTION 8.14 HOLDERS OF NOTES. The Agent may deem and treat any payee of
any Note as the owner thereof for all purposes hereof unless and until written
notice of the assignment or transfer thereof shall have been filed with the
Agent. Any request, authority or consent of any person who at the time of making
such request or giving such authority or consent is the holder of any Note shall
be conclusive and binding on any subsequent holder, transferee or assignee of
such Note or of any note or notes issued in exchange therefor.

     SECTION 8.15 EQUALIZATION OF LENDERS. The Lenders agree among themselves
that, with respect to all amounts received by any Lender for application on any
obligation hereunder or under any Note or under any participation thereof,
whether received by voluntary payment, by realization upon security, by the
exercise of the right of set-off or banker's lien, by counterclaim or by any
other non-pro rata source, equitable adjustment will be made in the manner
stated in the following sentence so that, in effect, all such excess amounts
will be shared ratably among the Lenders in proportion to the outstanding amount
of their Commitments, except as otherwise provided in Sections 2.15, 8.7, 8.9,
8.16 and 9.3 hereof. The Lenders receiving any such amount shall purchase for
cash from each of the other Lenders an interest in each Lender's portion of the
Loans in such amount as shall result in a ratable participation by the Lenders
in the aggregate unpaid amount under the Notes, provided that if all or any
portion of such excess amount is thereafter recovered from the Lender making
such purchase, such purchase shall be rescinded and the purchase price restored
to the extent of such recovery, together with interest or other amounts, if any,
required by Law (including court order) to be paid by the Lender making such
purchase.

     SECTION 8.16 RESIGNATION OF AGENT. Agent may resign as Agent, in its sole
discretion, without the consent of Borrower or Lender. Upon any such
resignation, the Lenders shall have the right to appoint a successor Agent. If,
within thirty (30) days of the Agent's resignation, a successor Agent has not
been appointed or such successor has not accepted such appointment, then the
retiring Agent may, on behalf of the Lenders, appoint a successor Agent. Upon
appointment of a successor Agent, the successor Agent shall succeed to the
rights, powers and duties of the Agent hereunder and the retiring Agent's
rights, powers and duties as Agent shall be terminated without any other or
further act or deed on the part of the retiring Agent, Borrower or the Lenders.
The term Agent shall mean any successor Agent.

     SECTION 8.17 BENEFICIARIES. The provisions of this Section 8 are solely for
the benefit of the Agent and the Lenders, and neither Borrower or the Company
shall have any right to rely on or enforce any of the provisions hereof. In
performing its functions and duties under this Agreement, the Agent shall act
solely as agent of the Lenders and does not assume and shall not be deemed to
have assumed any obligation toward or relationship of agency or trust with or
for the Borrower or the Company.

     SECTION 8.18 AVAILABILITY OF FUNDS. In the event the Agent has not been
notified by a Lender prior to the date upon which any disbursement of the Loans
is to be made that such Lender does not intend to make available to the Agent
such Lender's portion of such disbursement, then the Agent may assume that such
Lender has made or will make such proceeds


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<PAGE>

available to the Agent on such date and the Agent may, in reliance upon such
assumption (but shall not be required to), make available to the Borrower a
corresponding amount. If such Lender's portion of the disbursement is not in
fact made available to the Agent and Agent has advanced such Lender's portion,
the Agent shall be entitled to recover such amount on demand from such Lender.
In such event, the Agent shall be entitled to all interest accrued thereon for
each day during the period commencing on the date such amount was made available
to the Borrower and ending on the date the Agent recovers such amount at a rate
per annum equal to the applicable interest rate under this Agreement.

     SECTION 8.19 FURTHER ASSIGNMENTS AND PARTICIPATION.

     (a) Any Lender may, at its option, assign all or any part of its right,
title and interest in the Loan, including, without limitation, all or a portion
of its obligation to make Advances, and its interest in the outstanding
principal balance of the Loan, to one or more entities (any entity to which an
interest in the Loan is assigned, also a "Lender"); notwithstanding the
foregoing, any such assignment is subject to Agent's and Borrower's prior
written approval, which approval shall not be unreasonably withheld, and shall
be in the minimum amount of $5,000,000; and further notwithstanding the
foregoing, Agent agrees that it will retain a Commitment of not less than twenty
percent (20%) of the Maximum Loan Amount. Such assignment shall not require a
modification of any material terms of the Loan Documents. Assigning Lender and
each new Lender shall enter into an assignment and assumption agreement (the
"Assignment and Assumption") assigning a portion of Lender's rights and
obligations under the Loan, and pursuant to which the new Lender accepts such
assignment and assumes the assigned obligations. From and after the effective
date specified in the Assignment and Assumption (a) each new Lender shall be a
party hereto and to each Loan Document to the extent of the applicable
percentage or percentages set forth in the Assignment and Assumption and, except
as specified otherwise herein, shall succeed to the rights and obligations of
Lender hereunder and thereunder in respect of the Loan (including, without
limitation, its Pro Rata Share of Lender's obligations to make Advances
hereunder), and (b) Assigning Lender, as lender and secured party shall, to the
extent such rights and obligations have been assigned by it pursuant to such
Assignment and Assumption, relinquish its rights and be released from its
obligations hereunder and under the Loan Documents. Neither Agent nor any Lender
shall be responsible for the obligations of any other Lender. Agent and each
Lender shall be liable to Borrower only for their Pro Rata Share of the Loan. If
for any reason any of the Lenders shall fail or refuse to abide by their
obligations under this Agreement, Agent and the other Lenders shall not be
relieved of their obligations, if any, hereunder, including their obligations to
make their Pro Rata Share of any Advance on the date set forth for such Advance
in the Notice of Borrowing; notwithstanding the foregoing, Agent and the Lenders
shall have the right, but not the obligation, at their sole option, to make the
defaulting Lender's Pro Rata Share of such Advance.

     (b) Borrower and the Company agree that it shall, in connection with any
sale of all or any portion of the Loan, whether in whole or to a Lender or
Participant, within ten (10) business days after requested by Lender, furnish
Lender with the certificates required under Section 9.18(a) and (b) and such
other information as reasonably requested by any Lender or Participant in
performing its due diligence in connection with its purchase of an interest in
the Loan.


                                       55

<PAGE>

     (c) Notwithstanding anything herein to the contrary, any financial
institution or other entity may be sold a participation interest in the Loan in
minimum amounts of $5,000,000 by Agent or any Lender without Borrower's or the
Company's consent (such financial institution or entity, a "Participant") (x) if
such sale is without novation and (y) if the other conditions set forth in this
paragraph are met. No Participant shall be considered a Lender hereunder or
under the Note or the Loan Documents. No Participant shall have any rights under
this Agreement, the Note or any of the Loan Documents and the Participant's
rights in respect of such participation shall be solely against the Lender, as
the case may be, as set forth in the participation agreement executed by and
between such Lender and such Participant. The terms of any participation
agreement between Lender and its Participant shall not grant the Participant any
consent rights except for consent to (i) changes in the interest rate and term
of the Loan, (ii) increase in the principal amount of the Loan (except for
protective advances and increases made in accordance with Sections 2.18 hereof),
(iii) release of any party liable for repayment of the Loan, and (iv) and any
postponement of the scheduled payment of any principal, interest or fees, except
as set forth in this Agreement. No participation shall relieve any Lender from
its obligations hereunder or under the Note or the Loan Documents and Lender
shall remain solely responsible for the performance of its obligations
hereunder. The sale of a participation interest pursuant to this paragraph shall
not require a modification of any material terms of the Loan Documents.

     SECTION 8.20 CONFIDENTIAL INFORMATION. Notwithstanding the fact that
information is given to a Lender is otherwise confidential, it is understood
that anything Lender (and each employee, representative or other agent of any
Lender) may disclose to any and all Persons, without limitation of any kind, the
"tax treatment" and "tax structure" (in each case, within the meaning of
Treasury Regulation Section 1.6011-4) of the transactions contemplated hereby
and all materials of any kind (including opinions or other tax analyses) that
are or have been provided to such Lender relating to such tax treatment or tax
structure; provided that, with respect to any document or similar item that in
either case contains information concerning such tax treatment or tax structure
of the transactions contemplated hereby as well as other information, this
sentence shall only apply to such portions of the document or similar item that
relate to such tax treatment or tax structure."

SECTION 9. MISCELLANEOUS.

     SECTION 9.1 PAYMENT OF AGENT'S AND LENDER'S EXPENSES, INDEMNITY, ETC.
Borrower shall:

     (a) whether or not the Transactions hereby contemplated are consummated,
pay all reasonable out-of-pocket costs and expenses of Agent in connection with
the negotiation, preparation, execution and delivery of the Loan Documents and
the documents and instruments referred to therein, in connection with any
amendment, waiver or consent relating to any of the Loan Documents (including,
without limitation, as to each of the foregoing, the reasonable fees and
disbursements of any outside or special counsel to Agent) and of Agent and
Lenders in connection with the preservation of rights under, any amendment,
waiver or consent relating to, and enforcement of, the Loan Documents and the
documents and instruments referred to therein or in connection with any
restructuring or rescheduling of the Obligations (including, without limitation,
the reasonable fees and disbursements of counsel for Agent and the Lenders);


                                       56

<PAGE>

     (b) pay, and hold Agent, and each Lender harmless from and against, any and
all present and future stamp, excise and other similar taxes with respect to the
foregoing matters and hold Agent, and each Lender harmless from and against any
and all liabilities with respect to or resulting from any delay or omission
(other than to the extent attributable to Agent or such Lender) to pay such
taxes; and

     (c) indemnify Agent and each Lender, its officers, directors, employees,
representatives and agents and any persons or entities owned or Controlled by,
owning or Controlling, or under common Control or Affiliated with Agent or each
Lender (each an "Indemnitee") from, and hold each of them harmless against, any
and all losses, liabilities, claims, damages, expenses, obligations, penalties,
actions, judgments, suits, costs or disbursements of any kind or nature
whatsoever (including, without limitation, the reasonable fees and disbursements
of counsel for such Indemnitee in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether or not
such Indemnitee shall be designated a party thereto) that may at any time
(including, without limitation, at any time following the payment of the
Obligations) be imposed on, asserted against or incurred by any Indemnitee as a
result of, or arising in any manner out of, or in any way related to or by
reason of, (i) any of the Transactions or the execution, delivery or performance
of any Loan Document, (ii) the breach of any of Borrower's or the Company' s
representations and warranties or of any of Borrower's and the Company's
Obligations, and (iii) the exercise by Agent and the Lenders of their rights and
remedies (including, without limitation, foreclosure) under any agreements
creating any such Lien (but excluding, as to any indemnitee, any such losses,
liabilities, claims, damages, expenses, obligations, penalties, actions,
judgments, suits, costs or disbursements incurred solely by reason of the gross
negligence or willful misconduct of such Indemnitee as finally determined by a
court of competent jurisdiction) (collectively, "Indemnified Liabilities").
Borrower and the Company further agree that, without Agent's prior written
consent, it will not enter into any settlement of a lawsuit, claim or other
proceeding arising or relating to any Indemnified Liability unless such
settlement includes an explicit and unconditional release from the party
bringing such lawsuit, claim or other proceeding of each Indemnitee.

     SECTION 9.2 NOTICES. Except as otherwise expressly provided herein, all
notices, requests and demands to or upon the respective parties hereto to be
effective shall be in writing (including by facsimile, telex, or cable
communication), and shall be deemed to have been duly given or made when
delivered by hand, or five (5) days after being deposited in the United States
mail, certified or registered, postage prepaid, or, in the case of telex notice,
when sent, answer back received, or, in the case of facsimile notice, when sent,
answer back received, or, in the case of a nationally recognized overnight
courier service, one (1) Business Day after delivery to such courier service,
addressed, in the case of Borrower, the Company and Agent, at the addresses
specified below, or to such other addresses as may be designated by any party in
a written notice to the other parties hereto.

If to Agent, as follows:

                      LaSalle Bank Midwest National Association
                      2600 Big Beaver Road, Mail Code MO 900-420
                      Troy, MI 48084


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<PAGE>

                      Attention: Kathleen W. Bozek, Commercial Real Estate Dept.
                      Facsimile: (248) 822-5749

with copies thereof to:

                      Bodman LLP
                      201 West Big Beaver Road, Suite 500
                      Troy, Michigan 48084
                      Attn: David W. Hipp
                      Facsimile: (313) 743-6002

If to Lenders, as follows:

                      Tim Kalil
                      Fifth Third Bank
                      1000 Town Center, Suite 1500
                      MDJTWN-5H
                      Southfield, Michigan 48075
                      Facsimile: (248) 603-0555
and:

                      LaSalle Bank Midwest National Association
                      2600 Big Beaver Road
                      Troy, MI 48084
                      Attention: Kathleen W. Bozek, Mail Code MO 900-420
                      Commercial Real Estate Dept.
                      Facsimile: (248) 822-5749

If to Borrower or the Company, as follows:

                      Agree Limited Partnership/Agree Realty Corporation
                      31850 Northwestern Highway
                      Farmington Hills, Michigan 48334
                      Attn: Richard Agree
                      Facsimile: (248) 737-9110


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<PAGE>

With a copy thereof to:

                      Leon M. Schurgin
                      Sommers Schwartz Silver & Schwartz
                      2000 Town Center, Suite 900
                      Southfield, MI 48075
                      Facsimile: (248) 936-2156

     SECTION 9.3 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of Borrower, the Company, Agent, the Lenders, all
future holders of the Note and their respective successors and assigns.

     SECTION 9.4 AMENDMENTS AND WAIVERS. Neither this Agreement, the Note, any
other Loan Document to which Borrower or the Company is a party nor any terms
hereof or thereof may be amended, supplemented, modified or waived other than in
a writing executed by Borrower, the Company and Agent. The parties hereto
acknowledge and agree that any amendment, modification approval, waiver or
request to be granted regarding the terms of this Agreement shall be given in
accordance with the terms, provisions and conditions of Section 8.3.

     SECTION 9.5 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part
of Agent or any Lender in exercising any right, power or privilege hereunder or
under any other Loan Document and no course of dealing between Borrower, the
Company and Agent or any Lender shall operate as a waiver thereof nor shall any
single or partial exercise of any right, power or privilege hereunder or under
any other Loan Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder. The
rights and remedies herein expressly provided are cumulative and not exclusive
of any rights or remedies which Agent or any Lender would otherwise have. No
notice to or demand on Borrower or the Company or in any case shall entitle
Borrower or the Company to any other or further notice or demand in similar or
other circumstances or constitute a waiver of the rights of Agent or any Lender,
to any other or further action in any circumstances without notice or demand.

     SECTION 9.6 GOVERNING LAW; SUBMISSION TO JURISDICTION. (a) This Agreement
shall be deemed to contract entered into pursuant to the laws of the State of
Michigan and shall in all respects be governed, construed, applied and enforced
in accordance with the laws of the State of Michigan, provided however, that
with respect to the creation, perfection, priority and enforcement of the lien
of the mortgages, the laws of the State where the Property is located shall
apply.

     (b) Any legal action or proceeding with respect to this Agreement or any
other Loan Document and any action for enforcement of any judgment in respect
thereof may be brought in the courts of the State of Michigan or of the United
States of America for the Eastern District of Michigan, and, by execution and
delivery of this Agreement, Borrower and the Company hereby accept for
themselves and in respect of their property, generally and unconditionally, the
non-exclusive jurisdiction of the aforesaid courts and appellate courts from any
thereof. Borrower and the Company irrevocably consent to the service of process
out of any of the aforementioned


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<PAGE>

courts in any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, to Borrower and the Company at
their addresses set forth opposite their signatures below. Borrower and the
Company hereby irrevocably waive any objection which they now or hereafter have
to the laying of venue of any of the aforesaid actions or proceedings arising
out of or in connection with this Agreement or any other Loan Document brought
in the courts referred to above and hereby further irrevocably waives and agrees
not to please or claim in any such court that any such action or proceeding
brought in any such court has been brought in an inconvenient forum. Nothing
herein shall affect the right of Agent or any Lender, to serve process in any
other manner permitted by law or to commence legal proceedings or otherwise
proceed against Borrower or the Company in any other jurisdiction.

     SECTION 9.7 BORROWER AND THE COMPANY'S ASSIGNMENT. Neither Borrower nor the
Company may assign its rights or obligations hereunder without the prior written
consent of Agent.

     SECTION 9.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.

     SECTION 9.9 EFFECTIVENESS. This Agreement shall become effective on the
date on which all of the parties hereto shall have signed a counterpart hereof
and shall have delivered the same to Agent.

     SECTION 9.10 HEADINGS DESCRIPTIVE. The heading of the several Sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.

     SECTION 9.11 RECAPTURE. To the extent Agent or any Lender receives any
payment by or on behalf of Borrower or the Company, which payment or any part
thereof is subsequently invalidated, declared to be fraudulent or preferential,
set aside or required to be repaid to Borrower or the Company or its estate,
trustee, receiver, custodian or any other party under any bankruptcy law, state
or federal law, common law or equitable cause, then to the extent of such
payment or repayment, the obligation or part thereof which has been paid,
reduced or satisfied by the amount so repaid shall be reinstated by the amount
so repaid and shall be included within the liabilities of Borrower or the
Company to Agent and the Lenders as of the date such initial payment, reduction
or satisfaction occurred.

     SECTION 9.12 SEVERABILITY. In case any provision in or obligation under
this Agreement or the Note or the other Loan Documents shall be invalid, illegal
or unenforceable in any jurisdiction, the validity, legality and enforceability
of the remaining provisions or obligations, or of such provision or obligation
in any other jurisdiction, shall not in any way be affected or impaired thereby.

     SECTION 9.13 SURVIVAL. Except as expressly provided to the contrary herein,
all indemnities set forth herein including, without limitation, in Sections 2.15
and 9.1 shall survive


                                       60

<PAGE>

the execution and delivery of this Agreement, the Note and the Loan Documents
and the making and repayment of the Loan hereunder.

     SECTION 9.14 RELEASE OF CLAIMS; LIMITATION OF LIABILITY. In consideration
of the Lenders making the Loan, Borrower and the Company do each hereby release
and discharge Agent and each Lender of and from any and all claims, harm,
injury, and damage of any and every kind, known or unknown, legal or equitable,
which Borrower or the Company have against the Agent and each Lender from the
date of Borrower's first contact with Agent up to the date of this Agreement.
Borrower and the Company confirm to Agent and the Lenders that they have
reviewed the effect of this release with competent legal counsel of their
choice, or have been afforded the opportunity to do so, prior to execution of
this Agreement and the other Loan Documents and each acknowledge and agree that
Agent and each Lender is relying upon this release in extending the Loan to
Borrower. No claim may be made by Borrower, the Company, or any other Person
against Agent or any Lender or the Affiliates, directors, officers, employees,
attorneys or agent of any of such Persons for any special, indirect,
consequential or punitive damages in respect of any claim for breach of contract
or any other theory of liability arising out of or related to the transactions
contemplated by this Agreement or any other Transactions, or any act, omission
or event occurring in connection therewith; and Borrower and the Company hereby
waive, release and agree not to sue upon any claim for any such damages, whether
or not accrued and whether or not known or suspected to exist in its favor.

     SECTION 9.15 CALCULATIONS; COMPUTATIONS. Except as otherwise expressly
provided herein, the financial statements to be furnished to Agent pursuant
hereto shall be made and prepared in accordance with GAAP consistently applied
throughout the periods involved and consistent with GAAP as used in the
preparation of the financial statements referred to in Section 4.5.

     SECTION 9.16 WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, BORROWER, THE COMPANY, AGENT AND ALL LENDERS EACH HEREBY IRREVOCABLY WAIVES
ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY MATTER
ARISING HEREUNDER OR THEREUNDER.

     SECTION 9.17 NO JOINT VENTURE. Notwithstanding anything to the contrary
herein contained, Agent and Lenders by entering into this Agreement or by taking
any action pursuant hereto, will not be deemed a partner or joint venturer with
Borrower or the Company and Borrower and the Company agree to hold Agent and
each Lender harmless from any damages and expenses resulting from such a
construction of the relationship of the parties hereto or any assertion thereof.

     SECTION 9.18 ESTOPPEL CERTIFICATES. (a) Borrower and Agent each hereby
agree at any time and from time to time upon not less than ten (10) days prior
written notice by Borrower or Agent to execute, acknowledge and deliver to the
party specified in such notice, a statement, in writing, certifying whether this
Agreement is unmodified and in full force and effect (or if there have been
modifications, whether the same, as modified, is in full force and effect and
stating the modifications hereto), and stating whether or not, to the best
knowledge of such certifying party,


                                       61

<PAGE>

any Default or Event of Default has occurred and is then continuing, and, if so,
specifying each such Default or Event of Default; provided, however, that it
shall be a condition precedent to Agent's obligation to deliver the statement
pursuant to this Section, that Agent shall receive, together with Borrower's
request for such statement, a certificate of the Company individually and as
general partner of Borrower stating that no Default or Event of Default exists
as of the date of such certificate (or specifying such Default or Event of
Default).

     (b) Within five (5) Business Days of Agent's request, Borrower shall
execute and deliver a certificate of the Company individually and as general
partner of Borrower confirming the then aggregate outstanding principal balance
of the Loan, the outstanding principal balance of each LIBOR Portion and each
Base Rate Portion, the interest rate for each Loan Portion, the dates to which
all interest has been paid, and the Interest Period for each LIBOR Portion. Such
statement shall be binding and conclusive on Borrower and the Company absent
manifest error.

     SECTION 9.19 NO OTHER AGREEMENTS. The Loan Documents constitute the entire
understanding of the parties with respect to the transactions contemplated
hereby, and all prior understandings with respect thereto, whether written or
oral, shall be of no force and effect.

     SECTION 9.20 CONTROLLING DOCUMENT. In the event of a conflict between the
provisions of this Agreement and the other Loan Documents, the provisions of
this Agreement shall control and govern the conflicting provisions of the other
Loan Documents.

     SECTION 9.21 NO BENEFIT TO THIRD PARTIES. This Agreement is for the sole
and exclusive benefit of Borrower, the Company, Agent and Lenders and all
conditions of the obligation of Agent and Lenders to make Advances hereunder are
imposed solely and exclusively for the benefit of Agent and Lenders and its
assigns and no other person shall have standing to require satisfaction of such
conditions in accordance with their terms or be entitled to assume that Agent
and Lenders will refuse to make Advances in the absence of strict compliance
with any and all thereof and no other person shall under any circumstances be
deemed to be a beneficiary of such conditions, any or all of which may be freely
waived in whole or in part by Agent and the Required Lenders at any time if it
in their sole discretion deems it advisable to do so. Without limiting the
generality of the foregoing, Agent shall not have any duty or obligation to
anyone to ascertain that funds advanced hereunder are used as required by the
terms hereof or to pay the cost of constructing the improvements on any of the
Properties or to acquire materials and supplies to be used in connection
therewith or to pay costs of owning, operating and maintaining same.

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

                           (SIGNATURE PAGE TO FOLLOW)


                                       62

<PAGE>

                                        AGREE LIMITED PARTNERSHIP,
                                        a Delaware limited partnership


                                        By: AGREE REALTY CORPORATION,
                                            its sole general partner, a Maryland
                                            corporation


                                        By: /s/ Richard Agree
                                            ------------------------------------
                                        Name: Richard Agree
                                        Title: President


                                        AGREE REALTY CORPORATION,
                                        a Maryland corporation


                                        By: /s/ Richard Agree
                                            ------------------------------------
                                        Name: Richard Agree
                                        Title: President


                                        LASALLE BANK MIDWEST NATIONAL
                                        ASSOCIATION,
                                        a national banking association, as Agent
                                        and as Lender


                                        By: /s/ Kathleen Bozek
                                            ------------------------------------
                                        Name: Kathleen Bozek
                                        Title: Vice President

                                        Commitment: $30,000,000


                                        FIFTH THIRD BANK,
                                        a Michigan banking corporation, as
                                        Lender


                                        By: /s/ Timothy J. Kalil
                                            ------------------------------------
                                        Name: Timothy J. Kalil
                                        Title: Vice President

                                        Commitment: $20,000,000


                                       63

<PAGE>

                                    SCHEDULES

Schedule 1    Borrowing Base Properties as of closing
Schedule 2    Subsidiaries
Schedule 3    [Deleted]
Schedule 4    Employee Benefit Plans
Schedule 5    Litigation
Schedule 6    Indebtedness

                                    EXHIBITS

Exhibit A-1   Notice of Borrowing
Exhibit A-3   Notice of Voluntary Prepayment
Exhibit C     Notice of Conversion or Continuation
Exhibit 8.2   Lenders' Wire Transfer Instructions
<PAGE>

                                   SCHEDULE 1

                     BORROWING BASE PROPERTIES AS OF CLOSING

<TABLE>
<CAPTION>
PROPERTY NAME                  LOCATION       TENANTS TRAILING 12 MONTHS NOI
-------------                  --------       ------------------------------
<S>                       <C>                 <C>
Ann Arbor Store #1        Ann Arbor, MI       Borders
Big Rapids                Big Rapids, MI      Walgreen's
Borman Center             Roseville, MI       Sam's Club
Boynton Beach             Boynton Beach, FL   Borders
Boynton Beach             Boynton Beach, FL   Circuit City
Bristol & Fenton          Flint, MI           Walgreen's
Eckerd Drug - Albion      Albion, NY          Eckerd Drug
Walgreen - Corunna Road   Flint, MI           Walgreen's
Eckerd Drug - Webster     Webster, NY         Eckerd Drugs
Beecher & Balllenger      Flint, MI           Walgreen's
Midland - Walgreen        Midland, MI         Walgreen's
North Lakeland Plaza      Lakeland, FL        Best Buy, Beall's, Joann's
Canton Township           Canton Twp, MI      Rite Aid
Omaha One 132nd St.       Omaha, NE           Borders
Santa Barbara Borders     Santa Barbara, CA   Border's
Wichita                   Wichita, KS         Borders
</TABLE>

TOTAL NOI
DEBT AMOUNT
VALUE (USING 7.5% CAP RATE FOR WALGREEN'S AND 8.5% FOR ALL OTHERS)
LTV
Debt Service (10-year Treasuries + 1.75%, 25 year amortization)*
DSCR

*    Current 10-year Treasuries + 1.75% = 6.41%

<PAGE>

                                   SCHEDULE 2

                                  SUBSIDIARIES

Agree - Columbia Crossing Project, L.L.C.
Agree - Milestone Center Project, L.L.C.

Agree Facility No. 1, L.L.C.
Lawrence Store No. 203, L.L.C.

Mt. Pleasant Shopping Center, L.L.C.
Tulsa Store No. 264, L.L.C.

ALPSC Associates, L.L.C.
Oklahoma Store No. 151, L.L.C.

Omaha Store No. 166, L.L.C.
Indianapolis Store No. 16, L.L.C.

Phoenix Drive, L.L.C.
Tulsa Store No. 135, L.L.C.

ACCP Maryland, L.L.C.
AMCP Germantown, L.L.C.

Agree Realty South-East, L.L.C.
Ann Arbor Store No. 1, L.L.C.

Boynton Beach Store No. 150, L.L.C.
Agree Bristol & Fenton Project, L.L.C.

AC Realty Company, L.L.C.

<PAGE>

                                   SCHEDULE 3

                                    [DELETED]

<PAGE>

                                   SCHEDULE 4

                             EMPLOYEE BENEFIT PLANS

1. Agree Realty Corporation Profit Sharing Plan, dated April 22, 1994 which as
of the date hereof, has not been funded

<PAGE>

                                   SCHEDULE 5

                                   LITIGATION

NONE

<PAGE>

                                   SCHEDULE 6

                                  INDEBTEDNESS

<TABLE>
<CAPTION>
PROPERTY                          LENDER          PRINCIPAL BALANCE
--------                  ---------------------   -----------------
<S>                       <C>                     <C>
Walgreens -
   Chesterfield Twp, MI     Teachers Insurance       $ 8,973,448
   Grand Blanc, MI             and Annuity
   Pontiac, MI                 Association
   Waterford, MI

Walgreens -
   Petoskey, MI              Nationwide Life         $16,064,103
   Flint, MI                Insurance Company
   Flint, MI
   Rochester, MI
   New Baltimore, MI
   Ypsilanti, MI

Borders,                  Laureate Capital Corp      $ 2,829,901
   Lawrence, KS

Borders,                      CTL Financing          $ 1,045,062
   Indianapolis, IN

Borders Headquarters        Modern Woodman of        $ 6,941,297
   Ann Arbor, MI                 America

Borders -                    Nationwide Life         $13,060,211
   Columbia, MD                 Insurance
   Germantown, MD                Company
   Oklahoma City, OK
   Omaha, NE
                                                     -----------
                                          TOTAL      $48,914,022
                                                     ===========
</TABLE>

<PAGE>

                                   EXHIBIT A-1

                               NOTICE OF BORROWING
                            AGREE LIMITED PARTNERSHIP

                                                      ____________________, 2006

LaSalle Bank Midwest National Association
2600 West Big Beaver Road
Troy, Michigan 48084

Ladies and Gentlemen:

     We refer to that certain Second Amended Line of Credit Agreement dated as
of November 3, 2006, between us, the Lenders and you (the "Loan Agreement").
This certificate is delivered to you pursuant to Section 2.3 of the Loan
Agreement as one of the inducements for an Advance in the amount of
$_____________, which will bring the total unpaid principal balance of the Loan
to $_____________. All capitalized terms used herein shall have the same
meanings herein as they have in the Loan Agreement.

     In order to induce you to make this advance, we hereby represent and
certify as follows:

     1.   No Default or Event of Default has occurred and is continuing under
          the Loan Agreement, Note, Security Instruments or any other Loan
          Documents or would result from the proposed Advance or would result
          from the application of the proceeds therefrom.

     2.   Each of the representations and warranties set forth in the Loan
          Agreement are true and correct as of the date hereof (other than such
          representations and warranties that by their terms refer to a date
          other than the date of such Advance).

     3.   All provisions of the Loan Agreement will be satisfied after giving
          effect to the Advance hereby requested, including, without limitation,
          compliance with the Borrowing Base Covenant.

     The undersigned hereby notifies you (a) that the date of the borrowing
shall be ___________________; and (b) [THE ADVANCE SHALL BE A LIBOR PORTION AND
THE INTEREST PERIOD SHALL BE A ONE, TWO OR THREE MONTH PERIOD] [THE ADVANCE
SHALL BE A BASE RATE PORTION].

                                        AGREE LIMITED PARTNERSHIP


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

<PAGE>

                                   EXHIBIT A-3

                         NOTICE OF VOLUNTARY PREPAYMENT
                            AGREE LIMITED PARTNERSHIP

LaSalle Bank Midwest National Association
2600 West Big Beaver Road
Troy, Michigan 48084
Attn: Kathy Bozek

Ladies and Gentlemen:

     We refer to that certain Second Amended and Restated Line of Credit
Agreement dated as of November 3, 2006, between us, Lenders, and you (the "Loan
Agreement"). This certificate is delivered to you pursuant to Section 2.10 of
the Loan Agreement. All capitalized terms used herein shall have the same
meanings herein as they have in the Loan Agreement.

     The undersigned hereby notifies you that it has elected to prepay
$__________ representing the [Base Rate Portion of $____________] [LIBOR Portion
of _________ with an Interest Rate of _____________ and an Interest Period
ending on _____________]. We hereby acknowledge that we will pay Funding Costs,
as applicable.

                                        AGREE LIMITED PARTNERSHIP

                                        By: Agree Realty Corporation


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

<PAGE>

                                    EXHIBIT C

                      NOTICE OF CONVERSION OR CONTINUATION
                            AGREE LIMITED PARTNERSHIP

                                                       ___________________, 2006

LaSalle Bank Midwest National Association
2600 West Big Beaver Road
Troy, Michigan 48084

Ladies and Gentlemen:

     We refer to that certain Second Amended and Restated Line of Credit
Agreement dated as of November 3, 2006, between us and you (the "Loan
Agreement"). This certificate is delivered to you pursuant to Section 2.8 of the
Loan Agreement. All capitalized terms used herein shall have the same meanings
herein as they have in the Loan Agreement.

     In order to induce you to make the [conversion and/or continuation]
described herein, we hereby represent and certify as follows:

     1.   No Default or Event of Default has occurred and is continuing under
          the Loan Agreement, Note, Security Instruments or any other Loan
          Document or would result from the [conversion and/or continuation]
          described herein.

     2.   Each of the representations and warranties set forth in the Loan
          Agreement, the Note, the Security Instruments and all other Loan
          Documents are true and correct as of the date hereof (other than such
          representations and warranties that by their terms refer to a date
          other than the date of such [conversion and/or continuation]).

     The undersigned hereby requests the following:

               That on [the continuation date] the LIBOR Portion of $__________
          be continued as a LIBOR Portion for an additional [one, two, three or
          six month] Interest Period;

                                       OR

               That on [the conversion date] the LIBOR Portion of $___________
          be continued as a LIBOR Portion for an additional [one, two, three or
          six month] Interest Period;

                                       OR

               That on [the conversion date] the Base-Rate Portion of
          $___________ be converted to a LIBOR Portion for a [one, two, three or
          six month] Interest Period;

<PAGE>

                                       OR

               That on [the conversion date] the LIBOR Portion of $__________ be
          converted to a Base Rate Portion.

                                        AGREE LIMITED PARTNERSHIP

                                        By: Agree Realty Corporation, General
                                            Partner


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

<PAGE>

                                   EXHIBIT 8.2

                       LENDER'S WIRE TRANSFER INSTRUCTIONS

LaSalle Bank Midwest National Association
ABA: 072000805
Account Number: 1378018
ATTN: Agency Services
Ref: Agree Limited Partnership
Contact: Cassandra Hill /phone 248-822-5784/ fax 248-637-5017

[Fifth Third]