Conformed Execution Copy


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                           REVOLVING CREDIT AGREEMENT

                                      among

                         BERKSHIRE REALTY COMPANY, INC.,

                           BRI OP LIMITED PARTNERSHIP,

                               CERTAIN GUARANTORS

                                       and

                                BANKBOSTON, N.A.

                                       and

                          OTHER BANKS WHICH MAY BECOME
                            PARTIES TO THIS AGREEMENT

                                       and

                                BANKBOSTON, N.A.,
                                    AS AGENT

                          DATED AS OF JANUARY 30, 1998


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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
Section                                                                                  Page
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<S>                                                                                        <C>
ss.1.  DEFINITIONS AND RULES OF INTERPRETATION ......................................      1
                                                                                     
         ss.1.1. Definitions ........................................................      1
         ss.1.2. Rules of Interpretation ............................................     22
                                                                                     
ss.2.  THE REVOLVING CREDIT FACILITY AND LETTER OF CREDIT                            
       FACILITY .....................................................................     22
         ss.2.1. Commitment to Lend .................................................     22
         ss.2.2. Unused Commitment Fee ..............................................     23
         ss.2.3. Reduction of Commitment ............................................     23
         ss.2.4. Revolving Credit Notes .............................................     24
         ss.2.5. Interest on Revolving Loans ........................................     24
         ss.2.6. Requests for Revolving Loans .......................................     24
         ss.2.7. Funds for Revolving Loans ..........................................     25
         ss.2.8. Issuance of Letters of Credit ......................................     25
         ss.2.9. Requests for Letters of Credit .....................................     26
         ss.2.10. Form and Expiration of Letters of Credit ..........................     26
         ss.2.11. Banks' Participation in Letters of Credit .........................     26
         ss.2.12. Presentation ......................................................     26
         ss.2.13. Payment of Drafts .................................................     27
         ss.2.14. Uniform Customs and Practice ......................................     27
         ss.2.15. Subrogation .......................................................     28
         ss.2.16. Modification, Consent, etc.........................................     28
         ss.2.17. Letter of Credit Fees .............................................     29
         ss.2.18. Extension of Maturity Date ........................................     29
                                                                                     
ss.3.  REPAYMENT OF THE LOANS .......................................................     29
         ss.3.1. Stated Maturity ....................................................     29
         ss.3.2. Mandatory Prepayments ..............................................     29
         ss.3.3. Optional Prepayments ...............................................     30
         ss.3.4. Partial Prepayments ................................................     30
         ss.3.5. Effect of Prepayments ..............................................     30

ss.4.  CERTAIN GENERAL PROVISIONS ...................................................     30
         ss.4.1. Conversion Options .................................................     30
         ss.4.3. [Intentionally omitted.] ...........................................     31
         ss.4.4. [Intentionally omitted.] ...........................................     31
         ss.4.5. Funds for Payments .................................................     31
         ss.4.6. Computations .......................................................     32
         ss.4.7. Inability to Determine Eurodollar Rate .............................     32
         ss.4.8. Illegality..........................................................     32
</TABLE>
                                                                                
                                      -i-

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<TABLE>
<S>                                                                                      <C>
         ss.4.9. Additional Interest ................................................     33
         ss.4.10. Additional Costs, Etc. ............................................     33
         ss.4.11. Capital Adequacy ..................................................     34
         ss.4.12. Indemnity of Obligors .............................................     35
         ss.4.13. Interest on Overdue Amounts; Late Charge ..........................     35
         ss.4.14. Certificate .......................................................     35

ss.5.  APPRAISALS ...................................................................     35

ss.5A. GUARANTEES ...................................................................     36
         ss.5A.1. Guarantees of Obligations .........................................     36
         ss.5A.2. Continuing Obligation .............................................     36
         ss.5A.3. Waivers with Respect to Obligations ...............................     37
         ss.5A.4. Banks' Power to Waive, etc. .......................................     38
         ss.5A.5. Information Regarding the Borrower, etc. ..........................     39
         ss.5A.6. Certain Guarantor Representations .................................     40
         ss.5A.7. Subrogation .......................................................     40
         ss.5A.8. General Subordination .............................................     40
         ss.5A.9. Future Subsidiaries; Further Assurances ...........................     40

ss.6.  REPRESENTATIONS AND WARRANTIES ...............................................     41
         ss.6.1. Authority, Etc. ....................................................     41
         ss.6.2. Governmental Approvals .............................................     42
         ss.6.3. Title to Properties; Leases ........................................     43
         ss.6.4. Financial Statements ...............................................     43
         ss.6.5. No Material Changes, Etc. ..........................................     44
         ss.6.6. Franchises, Patents, Copyrights, Etc. ..............................     44
         ss.6.7. Litigation .........................................................     44
         ss.6.8. No Materially Adverse Contracts, Etc. ..............................     44
         ss.6.9. Compliance With Other Instruments, Laws, Etc. ......................     44
         ss.6.10. Tax Status ........................................................     45
         ss.6.11. No Event of Default ...............................................     45
         ss.6.12. Holding Company and Investment Company Acts .......................     45
         ss.6.13. Absence of UCC Financing Statements, Etc. .........................     45
         ss.6.14. Setoff, Etc. ......................................................     45
         ss.6.15. [Intentionally Omitted] ...........................................     45
         ss.6.16. Pension Plans .....................................................     45
         ss.6.17. Regulations U and X ...............................................     46
         ss.6.18. Environmental Compliance ..........................................     46
         ss.6.19. Subsidiaries and Nominees .........................................     48
         ss.6.20. [Intentionally omitted] ...........................................     48
         ss.6.21. Loan Documents ....................................................     48
         ss.6.22. Borrowing Base Property ...........................................     48
</TABLE>

                                      -ii-

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<TABLE>
<S>                                                                                       <C>
ss.7.  AFFIRMATIVE COVENANTS ........................................................     51
         ss.7.1. Punctual Payment ...................................................     51
         ss.7.2. Maintenance of Office ..............................................     51
         ss.7.3. Records and Accounts ...............................................     51
         ss.7.4. Financial Statements, Certificates and Information .................     52
         ss.7.5. Notices ............................................................     55
         ss.7.6. Existence: Maintenance of Properties ...............................     57
         ss.7.7. Insurance ..........................................................     57
         ss.7.8. Taxes ..............................................................     60
         ss.7.9. Inspection of Properties and Books .................................     61
         ss.7.10. Compliance with Laws, Contracts, Licenses, and Permits ............     61
         ss.7.11. Use of Proceeds ...................................................     62
         ss.7.12. Further Assurances ................................................     62
         ss.7.13. REIT Status: Operation of Business ................................     62
         ss.7.14. [Intentionally omitted.] ..........................................     62
         ss.7.15. Partnership Status ................................................     62
         ss.7.16. Public Company Status .............................................     62
         ss.7.17. Operation and Control .............................................     63

ss.8.  CERTAIN NEGATIVE COVENANTS ...................................................     63
         ss.8.1. Restrictions on Indebtedness .......................................     63
         ss.8.2. Restrictions on Liens. Etc..........................................     64
         ss.8.3. Restrictions on Investments ........................................     66
         ss.8.4. Merger, Consolidation ..............................................     68
         ss.8.5. Sale and Leaseback .................................................     68
         ss.8.6. Compliance with Environmental Laws .................................     68
         ss.8.7. REIT Distributions .................................................     70
         ss.8:8. Borrower Distributions .............................................     70
         ss.8.9. Asset Sales ........................................................     70
         ss.8.10. Interest Rate Protection ..........................................     71
         ss.8.11. Certain Guarantees ................................................     71
         ss.8.12. ERISA, etc. .......................................................     71
         ss.8.13. Structural Change .................................................     71

ss.9.  FINANCIAL COVENANTS ..........................................................     72
         ss.9.1. Leverage Ratio .....................................................     72
         ss.9.2. Interest Coverage ..................................................     72
         ss.9.3. Debt Service Coverage ..............................................     72
         ss.9.4. Minimum Consolidated Tangible Net Worth ............................     72
         ss.9.5. Secured Debt .......................................................     72
         ss.9.6. Recourse Debt ......................................................     72

ss.10. CLOSING CONDITIONS ...........................................................     73
         ss.10.1. Loan Documents ....................................................     73
</TABLE>

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<TABLE>
<S>                                                                                       <C>
         ss.10.2.  Certified Copies of Organizational Documents .....................     73
         ss.10.3.  By-Laws; Resolutions .............................................     73
         ss.10.4.  Incumbency Certificate: Authorized Signers .......................     73
         ss.10.5.  Opinions of Counsel Concerning Loan Documents ....................     74
         ss.10.6.  Swap Assignment ..................................................     74
         ss.10.7.  Performance: No Default ..........................................     74
         ss.10.8.  Representations and Warranties ...................................     74
         ss.10.9.  Proceedings and Documents ........................................     74
         ss.10.10. Compliance Certificate ...........................................     74
         ss.10.11. Other ............................................................     74

ss.11. CONDITIONS TO ALL BORROWINGS .................................................     75
         ss.11.1. Representations True: No Default ..................................     75
         ss.11.2. No Legal Impediment ...............................................     75
         ss.11.3. Governmental Regulation ...........................................     75
         ss.11.4. Proceedings and Documents .........................................     75
         ss.11.5  Borrowing Documents ...............................................     75

                                                                                          75
ss.12. EVENTS OF DEFAULT; ACCELERATION; ETC .........................................     76
         ss.12.1.  Events of Default and Acceleration ...............................     76
         ss.12.2.  Termination of Commitments .......................................     79
         ss.12.3.  Remedies .........................................................     79
         ss.12.4.  Distribution of Proceeds .........................................     80

ss.13. SETOFF .......................................................................     81

ss.14.THE AGENT .....................................................................     81
         ss.14.1. Authorization .....................................................     81
         ss.14.2. Employees and Agents ..............................................     81
         ss.14.3. No Liability ......................................................     82
         ss.14.4. No Representations ................................................     82
         ss.14.5. Payments ..........................................................     82
         ss.14.6. Holders of Notes ..................................................     83
         ss.14.7. Indemnity .........................................................     83
         ss.14.8. Agent as Bank .....................................................     84
         ss.14.9. Resignation .......................................................     84
         ss.14.10. Notification of Defaults and Events of Default ...................     84
         ss.14.11. Duties in the Case of Enforcement ................................     84

ss.15. EXPENSES .....................................................................     85

ss.16. INDEMNIFICATION ..............................................................     85

ss.17. SURVIVAL OF COVENANTS ETC. ...................................................     86
</TABLE>

                                      -iv-

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<TABLE>
<S>                                                                                       <C>
ss.18. ASSIGNMENT AND PARTICIPATION .................................................     87
         ss.18.1. Conditions to Assignment by Banks .................................     87
         ss.18.IA. Assignment Among Banks ...........................................     87
         ss.18.2. Certain Representations and Warranties: Limitations; Covenants ....     87
         ss.18.3. Register ..........................................................     88
         ss.18.4. New Notes .........................................................     88
         ss.18.5. Participation .....................................................     89
         ss.18.6. Pledge by Bank ....................................................     89
         ss.18.7. No Assignment by REIT or Borrower .................................     89
         ss.18.8. Disclosure ........................................................     89

ss.19. NOTICES, ETC. ................................................................     90

ss.20. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE ...........................     90

ss.21. HEADINGS .....................................................................     91

ss.22. COUNTERPARTS .................................................................     91

ss.23. ENTIRE AGREEMENT, ETC. .......................................................     91

ss.24. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS ...............................     91

ss.25. CONSENTS, AMENDMENTS, WAIVERS, ETC. ..........................................     92 

ss.26. SEVERABILIIY .................................................................     92

ss.27. CONFIDENTIALITY ..............................................................     93   

ss.28. NO UNWRITTEN AGREEMENTS ......................................................     93

ss.29. OBLIGATIONS JOINT AND SEVERAL ................................................     93
</TABLE>


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                                    EXHIBITS


                    A    Form of Revolving Credit Note

                    B    Form of Loan Request

                    C    Form of Compliance Certificate

                    D    Form of Borrowing Base Certificate

                    E    Form of Assignment and Acceptance


                                  SCHEDULES


                    1    Banks and Commitments

                    2    Borrowing Base Properties

                    6.3  Balance Sheet Exceptions

                    6.7  Litigation

                    6.16 Benefit Plans

                    6.19 Subsidiaries and Nominees

                    8.1  Outstanding Indebtedness

                    8.2  Outstanding Liens

                                      -vi-

<PAGE>

                           REVOLVING CREDIT AGREEMENT

     This REVOLVING CREDIT AGREEMENT is made as of the 30th day of January,
1998, by and among BERKSHIRE REALTY COMPANY, INC. (the "REIT"), a Delaware
corporation having its principal place of business at 470 Atlantic Avenue,
Boston, Massachusetts 02210, BRI OP LIMITED PARTNERSHIP (the "OP"), a Delaware
limited partnership having its principal place of business at 470 Atlantic
Avenue, Boston, Massachusetts 02210, the Guarantors named herein and BANKBOSTON,
N.A. and the other lending institutions which may become parties hereto pursuant
to ss.18 (the "Banks"), and BankBoston, N.A., as Agent.

     ss.1. DEFINITIONS AND RULES OF INTERPRETATION

     ss.1.1. Definitions. The following terms shall have the meanings set forth
in this ss.1 or elsewhere in the provisions of this Agreement referred to below:

     Accumulated Benefit Obligations. The actuarial present value of the
accumulated benefit obligations under any Plan, calculated in accordance with
Statement No. 87 of the Financial Accounting Standards Board.

     Adjusted Net Operating Income. With respect to any Eligible Real Estate
for any fiscal period, an amount equal to the Net Operating Income attributable
to such asset for such fiscal period adjusted to add back the general and
administrative expenses of the Borrower allocated to such asset on the books and
records of the Borrower and its Consolidated Subsidiaries, to deduct an assumed
management fee allocated to such asset to a rate of four percent (4%) of the
gross revenues attributable to such asset for such fiscal period and to deduct
an adjustment for capital expenditure requirements at the annual rate of $200
per rental unit.

     Advance Value. With respect to each Borrowing Base Property owned in fee by
the Borrower or by a Nominee acting on behalf of the Borrower (and excluding all
Joint Venture Assets included in the Borrowing Base Property), at the relevant
time of reference thereto, (a) for each Borrowing Base Property owned in fee by
the Borrower or such a Nominee for more than four consecutive fiscal quarters
for which financial reports shall have been provided to the Banks pursuant to
ss.6.4 and/or ss.7.4, the lesser of (i) 60% of its Borrowing Base Value or (ii)
its value as determined by dividing its Adjusted Net Operating Income for the
period of four consecutive fiscal quarters most recently ended for which
financial information is required to have been reported under ss.7.4 by 1.5 and
then dividing the result by the mortgage constant, which is derived by assuming
an interest rate equal to the sum of the yield on United States Treasury
obligations maturing ten years from the date of determination plus two percent
(2%) per annum and assuming a 25-year amortization schedule; and (b) for
Borrowing Base Property owned in fee by the Borrower or such a



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Nominee for less than such period, 60% of its Borrowing Base Value; provided,
however, that to the extent that any Borrowing Base Property is encumbered by
any lien or encumbrance permitted under ss.8.2(ii)(B) that has not been bonded
as provided in ss.7.8, the amount of the Indebtedness secured by such lien or
encumbrance shall be deducted from the value described for such property in
clause (a) or (b) above.

     Agent. BankBoston, N.A. acting as agent for the Banks.

     Agent's Head Office. The Agent's head office located at 100 Federal Street,
Boston, Massachusetts 02110, or at such other location as the Agent may
designate from time to time by notice to the REIT, the Borrower and the Banks.

     Agents Special Counsel. Ropes & Gray or such other counsel as may be
approved by the Agent.

     Agreement. This Revolving Credit Agreement, including the Schedules and
Exhibits hereto.

     Applicable Margin.

          (a) if and so long as the Borrower shall maintain credit ratings on
     its long-term senior unsecured debt from at least two nationally recognized
     credit ratings services, at least one of which shall be Moody's or S&P:

               (i) on any date on which the lowest of such ratings shall be Baa1
          or BBB+ or their equivalent (or better), nine-tenths of one percent
          (.90%);

               (ii) on any date on which the lowest of such ratings shall be
          Baa2 or BBB or their equivalent, one percent (1 %);

               (iii) on any date on which the lowest of such ratings shall be
          Baa3 or BBB- or their equivalent, one and one-tenth percent (1.10%);
          and

               (iv) on any date on which the lowest of such ratings shall be
          lower than Baa3 or BBB- or their equivalent, one and seven-twentieths
          percent (1.35%);

     provided that adjustments to the Applicable Margin set forth in this clause
     (a) shall take effect as of the date that a credit rating agency announces
     the issuance of a new or adjusted rating of the long-term senior unsecured
     debt of the Borrower; and




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          (b) if and so long as the Borrower shall not maintain credit ratings
     on its long-term senior unsecured debt from at least two nationally
     recognized credit ratings services, at least one of which shall be Moody's
     or S&P:

               (i) on any date on which the Leverage Ratio is equal to or less
          than 35%, one and one-tenth percent (1.10%);

               (ii) on any date on which the Leverage Ratio is equal to or less
          than 45% but greater than35 %, one and one-fifth percent (1.20%); and

               (iii) on any date on which the Leverage Ratio is greater than
          45%, one and three-tenths percent (1.30%);

     provided that for purposes of calculating the Applicable Margin set forth
     in this clause (b), (i) the Leverage Ratio shall be determined as of the
     end of the most recent March, June, September or December for which
     financial statements have been furnished (or are required to have been
     furnished) by the Borrower to the Banks pursuant to ss.6.4 and ss.7.4 and
     (ii) any adjustment in such Applicable Margin shall be prospective and
     shall take effect on the fifth Business Day following the date upon which
     such financial statements referred to in the foregoing clause (i) are
     furnished (or are required to be furnished) by the Borrower to the Banks
     pursuant to ss.7.4.

     Appraisal. An MAI appraisal of the value of a parcel of Real Estate,
determined on an orderly liquidation basis, performed by an independent
appraiser selected by the Agent who is not employed by the REIT, the Borrower,
the Agent or a Bank, the form and substance of such appraisal and the identity
of the appraiser to be in accordance with regulatory laws and policies
applicable to the Banks and the form and substance of such appraisal to be
acceptable to the Agent.

     Appraised Value. The fair market value of a parcel of Borrowing Base
Property (including without limitation any Joint Venture Asset) determined by
the most recent Appraisal of such parcel obtained pursuant to ss.5, subject,
however, in the case of each Appraisal to such changes or adjustments to the
value determined thereby as may be required by the appraisal department of the
Agent.

     Balance Sheet Date. December 31, 1996.

     Banks. BKB and the other lending institutions listed on Schedule 1 hereto
and any other Person who becomes an assignee of any rights of a Bank pursuant to
ss.18.

     Base Rate: The higher of (a) the annual rate of interest announced from
time to time by BKB at its head office in Boston, Massachusetts as its "base
rate" and (b) one half of one

                                       -3-

<PAGE>

percent (1/2%) above the overnight federal funds effective rate as published by
the Board of Governors of the Federal Reserve System, as in effect from time to
time.

     Base Rate Revolving Loans. Those Revolving Loans bearing interest
calculated by reference to the Base Rate.

     BKB. BankBoston, N.A.

     Borrower. The OP.

     Borrowing Base Availability. The sum of the Advance Values and the J.V.
Advance Values for all the Borrowing Base Property, minus the outstanding
principal amount of all Unsecured Senior Public Debt; provided, that these shall
be deducted from the Borrowing Base Availability, each of the following:

          (a) except as otherwise agreed in writing by the Majority Banks, the
     amount, if any, by which the Advance Value or J.V. Advance Value, as the
     case may be, of any individual Borrowing Base Property shall exceed 15% of
     the Borrowing Base Availability;

          (b) the amount, if any, by which the aggregate Advance Values and/or
     J.V. Advance Values of properties which are not multifamily housing
     facilities shall exceed 10% of the Borrowing Base Availability; and

          (c) the amount, if any, by which the aggregate J.V. Advance Values of
     Borrowing Base Properties which are Joint Venture Assets shall exceed 10%
     of the Borrowing Base Availability.

     Borrowing Base Certificate. See ss.7.4(m).

     Borrowing Base Property. At the relevant time of reference, the Eligible
Real Estate, plus any other Real Estate approved by the Majority Banks in their
sole good faith judgment. The Borrowing Base Properties as of the date hereof
are listed in Schedule 2 hereto.

     Borrowing Base Value.

     a)   with respect to Eligible Real Estate, the value, calculated quarterly
          as of the end of each fiscal quarter of the Borrower, of such property
          which shall be determined by capitalizing the Adjusted Net Operating
          Income of such parcel for the period of four consecutive fiscal
          quarters then ended at a capitalization rate of 9.0%;



                                      -4-

<PAGE>

     b)   with respect to Borrowing Base Property that is not Eligible Real
          Estate (including without limitation any Joint Venture Asset), the
          Appraised Value of the parcel; and

     c)   notwithstanding (a) above, with respect to Eligible Real Estate which
          has been owned by the Borrower or by a Nominee acting on behalf of the
          Borrower for less than four consecutive fiscal quarters for which
          financial reports shall have provided to the Banks pursuant to ss.6.4
          and/or ss.7.4, the purchase price of such parcel plus the amount of
          any capitalized improvements completed or installed on such property
          since its acquisition by the Borrower or such Nominee.

     Building. With respect to each parcel of Borrowing Base Property, all of
the buildings, structures and improvements now or hereafter located thereon.

     Building Service Equipment. All apparatus, fixtures and articles of
personal property owned by the Borrower now or hereafter attached to or used or
procured for use in connection with the operation or maintenance of any
building, structure or other improvement located on or included in the Borrowing
Base Property, including, but without limiting the generality of the foregoing,
all engines, furnaces, boilers, stokers, pumps, heaters, tank, dynamos, motors,
generators, switchboards, electrical equipment, heating, plumbing, lifting and
ventilating apparatus, air-cooling and air-conditioning apparatus, gas and
electric fixtures, elevators, escalators, fittings, and machinery and all other
equipment of every kind and description, used or procured for use in the
operation of a Building (except apparatus, fixtures or articles of personal
property belonging to lessees or other occupants of such building or to persons
other than the Borrower unless the same be abandoned by any such lessee or other
occupant or person), together with any and all replacements thereof and
additions thereto.

     Business Day. Any day on which banking institutions in Boston,
Massachusetts are open for the transaction of banking business and, in the case
of Eurodollar Rate Loans, which also is a Eurodollar Business Day.

     Capitalized Leases. Leases under which the Borrower or any of its
Subsidiaries is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with generally accepted accounting
principles.

     CERCLA. See ss.6.18.

     CODE. The Internal Revenue Code of 1986, as amended.


                                      -5-

<PAGE>


     Commitment. With respect to each Bank, the amount set forth on Schedule 1
hereto as the amount of such Bank's Commitment to make or maintain Loans to, and
to participate in Letters of Credit for the account of, the Borrower, as the
same may be reduced from time to time.

     Commitment Percentage. With respect to each Bank, the percentage set forth
on Schedule 1 hereto as such Bank's percentage of the aggregate Commitments of
all of the Banks.

     Compliance Certificate. See ss.7.4(g).

     Consolidated or combined. With reference to any term defined herein, that
term as applied to the accounts of the Borrower and its Subsidiaries,
consolidated or combined in accordance with generally accepted accounting
principles.

     Consolidated Fixed Charges. For any fiscal period, an amount equal to the
sum of the consolidated Interest Expense of the Borrower and its Subsidiaries
for such fiscal period plus the aggregate amount of scheduled principal
amortization and preferred dividends on Indebtedness for borrowed money for such
fiscal period and preferred dividends and other preferred Distributions for such
fiscal period of the Borrower and its Subsidiaries determined on a consolidated
basis.

     Consolidated Subsidiary. Any Subsidiary of the Borrower or other entity
whose assets and liabilities are included in the consolidated balance sheet of
the Borrower in accordance with generally accepted accounting principles.

     Consolidated Tangible Net Worth. At any date, the total of:

          (a) partners' equity of the Borrower and its Subsidiaries determined
     in accordance with generally accepted accounting principles on a
     Consolidated basis, excluding the effect of any foreign currency
     translation adjustments; minus

          (b) the amount by which such partners' equity has been increased after
     the Balance Sheet Date by any of (i) the income of any Person accrued prior
     to the date such Person becomes a Subsidiary or is merged into or
     consolidated with the Borrower or any of its Subsidiaries, (ii) the income
     of any Person which is not the Borrower or a Subsidiary except to the
     extent actually distributed in cash to the Borrower or a Subsidiary, (iii)
     the write-up of any asset or the retirement of any Indebtedness or equity
     at less than face value, (iv) extraordinary and nonrecurring gains or (v)
     any after-tax gains attributable to returned surplus assets of any plan;
     minus 

                                      -6-

<PAGE>

          (c) to the extent not already deducted from the amount in clause (a)
     above, (i) treasury stock, (ii) receivables due from an employee stock
     ownership plan and (iii) guarantees of indebtedness incurred by an employee
     stock ownership plan; minus

          (d) the amount of intangible assets carried on the balance sheet of
     the Borrower and its Subsidiaries determined in accordance with generally
     accepted accounting principles on a Consolidated basis, including goodwill,
     patents, patent applications, copyrights, trademarks, tradenames, research
     and development expense, organizational expense, unamortized debt discount
     and expense, deferred financing charges and debt acquisition costs.

     Consolidated Total Assets. The sum of the following:

          (a) the value of each parcel of Real Estate owned in fee by the
     Borrower or a Nominee acting on behalf of the Borrower or a Consolidated
     Subsidiary for a period of not less than four consecutive fiscal quarters
     for which financial reports shall have been delivered pursuant to ss.6.4
     and/or ss.7.4, which shall be determined by capitalizing the Adjusted Net
     Operating Income of such parcel for the period of four consecutive fiscal
     quarters then ended at a capitalization rate of 9.0%;

          (b) the value of each parcel of Real Estate owned in fee by the
     Borrower or such Nominee or a Consolidated Subsidiary for less than the
     period specified in clause (a) above, which shall be deemed to be its
     acquisition cost (or value at which such property is carried on the balance
     sheet of the Borrower or a Subsidiary in accordance with generally accepted
     accounting principles, minus any reserves relating thereto) plus the cost
     of any capitalized improvements made to the property following such
     acquisition;

          (c) the value of each parcel of Real Estate owned indirectly by the
     Borrower or a Consolidated Subsidiary through a joint venture, Subsidiary
     or other entity that is not a Consolidated Subsidiary, which shall be
     determined by (A) capitalizing the Adjusted Net Operating Income of such
     parcel for the period of four consecutive fiscal quarters then ended at a
     capitalization rate of 11 % (provided, however, that in the case of parcels
     used principally for multifamily housing facilities that are owned in fee
     simple by such joint venture, Subsidiary or other entity and have achieved
     90% occupancy for at least three (3) consecutive months, such
     capitalization rate shall be reduced to 9%); (B) deducting from such value
     the principal amount of any debt of such joint venture, Subsidiary or other
     entity secured by such parcel; (C) multiplying the amount calculated in (B)
     by the percentage of the Borrower's ownership interest in the joint
     venture, Subsidiary or other entity; and (D) if, and only if, the Agent
     shall reasonably determine that the Borrower does not

                                      -7-

<PAGE>

     have direct or indirect operating control of the property, discounting the
     amount calculated in (C) by 10%;

          (d) the value of each mortgage loan owned by the Borrower or a
     Consolidated Subsidiary (excluding loans on properties owned in fee by the
     Borrower or a Consolidated Subsidiary), which shall be determined as equal
     to the value at which such mortgage loan is carried on the consolidated
     balance sheet of the Borrower and its Subsidiaries in accordance with
     generally accepted accounting principles minus (without double counting)
     any reserves relating thereto;

          (e) the value of any raw land and any Development Assets (unless
     included above), which shall be determined to be equal to the value at
     which such asset is carried on the consolidated balance sheet of the
     Borrower and its Subsidiaries in accordance with generally accepted
     accounting principles; plus

          (f) other tangible or financial assets, including cash, securities,
     accounts receivable and escrows at the value thereof shown on the
     consolidated balance sheet of the Borrower and its Subsidiaries in
     accordance with generally accepted accounting principles minus (without
     double counting) related reserves.

     Notwithstanding any provision of the foregoing to the contrary, there shall
not be included in Consolidated Total Assets (i) intangible assets, including
without limitation any goodwill or deferred debt costs, (ii) mortgage-backed
securities securing Indebtedness omitted from Consolidated Total Indebtedness as
provided in clause (ii) of the definition of "Consolidated Total Indebtedness"
and (iii) any other asset not identified in paragraphs (a) through (f) above.

     Consolidated Total Indebtedness. All liabilities of the Borrower and its
Subsidiaries determined on a consolidated basis in accordance with generally
accepted accounting principles, excluding (i) minority interests recorded as
liabilities on the balance sheet of any Subsidiary and (ii) Indebtedness that is
secured solely by mortgage-backed securities without recourse to other assets or
revenues of the REIT, the Borrower or any Subsidiary, but specifically including
(A) in accordance with generally accepted accounting principles, any contingent
obligation that is probable and measurable and (B) any guarantee of any
Indebtedness of an unconsolidated Subsidiary or joint venture in which the
Borrower is a direct or indirect investor. For the purpose of clause (B) of the
preceding sentence, the amount of any such guarantee shall be the full principal
amount thereof (including any amount for which the guarantor may be liable on a
joint and several basis), except that if the debt guaranteed is also guaranteed
on a joint and several basis by a third party and the value (determined as
provided in paragraph (a) of the definition of "Consolidated Total Assets", but
modified to use a 12% capitalization rate) of the Real Estate of such
unconsolidated Subsidiary or joint venture which is security for the
Indebtedness supported by such guarantee exceeds the full principal amount of
the loan subject to such guarantee,

                                    -8-

<PAGE>

then only the portion of such full principal amount equal to the percentage
ownership of the unconsolidated Subsidiary or joint venture held by the Borrower
or a Consolidated Subsidiary shall be counted for the purposes of calculating
Consolidated Total Indebtedness.

     Conversion Request. A notice given by the Borrower to the Agent of its
election to convert or continue a Loan in accordance with ss.4.1.

     Debt Service Coverage Ratio. On any date, an amount, expressed as a
percentage, equal to the consolidated Operating Cash Flow of the Borrower and
its Subsidiaries for the period of four consecutive fiscal quarters of the
Borrower (treated as a single accounting period) most recently ended for which
the Borrower has delivered financial statements to the Banks under ss.6.4 or is
required under ss.7.4 to have delivered financial statements to the Banks,
divided by the Consolidated Fixed Charges of the Borrower and its Subsidiaries
for such period.

     Default. See ss.12.1.

     Development Assets. An amount equal to the sum of (a) the aggregate amount
of assets of the Borrower and its Subsidiaries which constitute multifamily
housing facilities "Under Development", determined on a consolidated basis in
accordance with generally accepting accounting principles, plus (b) the
aggregate amount committed and/or budgeted by the Borrower and its Subsidiaries
for costs of developing, designing, constructing and equipping multifamily
housing facilities "Under Development". For the purposes hereof, a facility is
deemed "Under Development" if it is in the process of development, design or
construction or, if constructed, has not achieved a minimum occupancy of tenants
paying rent under leases approved in accordance with the terms of this Agreement
for ninety percent (90%) of all units for a minimum consecutive period of three
(3) months at rental rates at or above the market rental rate for similar
properties in the same geographical area. For the purpose hereof, the facilities
to be developed on raw land adjacent to the sites of existing fully constructed
facilities of the Borrower or a Subsidiary shall include only the facilities to
be developed and not the existing constructed facilities and the amounts
described in clauses (a) and (b) of the first sentence of this definition shall
include all costs of raw land.

     Distribution. The declaration or payment of any dividend on or in respect
of any shares of any class of capital stock of the REIT, other than dividends
payable solely in equity securities of the REIT; the purchase, redemption,
exchange or other retirement of any shares of any class of capital stock of the
REIT, directly or indirectly through a Subsidiary of the REIT or otherwise,
other than purchases, redemptions, exchanges or other retirements paid solely in
equity securities of the REIT; the return of capital by the REIT to its
shareholders as such; the declaration or payment of any distribution on or in
respect of any general or limited partnership interests in the Borrower, other
than distributions payable solely in units of partnership interests of the
Borrower; the purchase, redemption, exchange

                                      -9-

<PAGE>

or other retirement of any units of general or limited partnership interests of
the Borrower, directly or indirectly through the REIT or any Subsidiary of the
Borrower or otherwise, other than purchases, redemptions, exchanges or other
retirements paid solely in partnership interests of the Borrower; the return of
capital by the Borrower to its general or limited partners as such; the payment
by the Borrower of any principal of or interest on the Indebtedness permitted by
ss.8.1(n); or any other distribution on or in respect of any shares of any class
of capital stock of the REIT or in respect of any partnership interest of the
Borrower.

     Dollars or $. Dollars in lawful currency of the United States of America.

     Domestic Lending Office. Initially, the office of each Bank designated as
such in Schedule 1 hereto; thereafter, such other office of such Bank, if any,
located within the United States that will be making or maintaining Base Rate
Revolving Loans.

     Drawdown Date. The date on which any Revolving Loan is made or is to be
made, the date on which any Letter of Credit is to be issued and the date on
which any Revolving Loan is converted or combined in accordance with ss.4.1.

     Durham Construction Loan Agreement. The Amended and Restated Construction
Loan Agreement dated as of January 30, 1998, as from time to time in effect,
among the REIT, the Borrower, the Guarantors, BKB, for itself and as Agent,
Mellon Bank, N.A. and such other lenders as shall from time to time become party
thereto.

     EBITDA. With respect to any Person for any fiscal period, an amount equal
to the sum of (a) the Net Income of such Person for such fiscal period plus (b)
depreciation, amortization, Interest Expense and taxes deducted in calculating
such Net Income, plus (c) any extraordinary or nonrecurring losses deducted in
calculating such Net Income, minus (d) any extraordinary or nonrecurring gains
included in calculating such Net Income, all as determined in accordance with
generally accepted accounting principles.

     Effective Date. January 30, 1998.

     Eligible Assign. Any of (a) a commercial bank organized under the laws of
the United States, or any State thereof or the District of Columbia; (b) a
savings and loan association or savings bank organized under the laws of the
United States, or any State thereof or the District of Columbia; (c) a
commercial bank organized under the laws of any other country which is a member
of the Organization for Economic Cooperation and Development (the "OECD"), or a
political subdivision of any such country, provided that such bank is acting
through a branch or agency located in the country in which it is organized or
another country which is also a member of the OECD; and (d) the central bank of
any country which is a member of the OECD; provided, however, that no
institution described in clause (a), (b) or (c) above shall be an Eligible
Assignee unless it has total assets

                                      -10-

<PAGE>

in excess of $10 billion and unless debt obligations issued by such financial
institutions (or by a parent entity owning beneficially all of the capital stock
of such financial institution) are rated "Ba2" or higher by Moody's or "BB" or
higher by S&P.

     Eligible Real Estate. Real Estate:

          (a) which is utilized principally for a multifamily housing facility;

          (b) which is owned in fee by the Borrower or any Subsidiary which is a
     Guarantor or title to which is held for the benefit of the Borrower or any
     Subsidiary which is a Guarantor in the name of its Nominee;

          (c) which is subject to no mortgage liens, springing liens or negative
     pledges and is subject to no other liens or encumbrances other than
     Permitted Liens;

          (d) with respect to which there shall have been furnished to the Agent
     an owner's or mortgagee's title insurance policy or a title opinion of
     qualified legal counsel obtained in connection with the original
     acquisition of such Eligible Real Estate or as updated pursuant to
     ss.7.4(s) and reasonably acceptable to the Agent in form and in substance
     insuring or opining that such Real Estate is free of all defects in title
     and other encumbrances except those which in the judgment of the Agent have
     no more than an immaterial effect on the value or marketability of such
     Real Estate;

          (e) which has no material structural defects and no material deferred
     maintenance, as evidenced by a written report satisfactory in form and
     substance to the Agent; 

          (f) which is free from environmental hazards as verified by a written
     report of an Environmental Engineer satisfactory in form and substance to
     the Agent;

          (g) which has an occupancy level of 85% or greater; and

          (h) which has adequate insurance, as described in ss.7.7.

     The Eligible Real Estate as of the date hereof is listed Schedule 2 hereto.

     Employee Benefit Plan. Any employee benefit plan within the meaning of
ss.3(3) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate, other than a Multiemployer Plan.

     Environmental Engineer. A firm of independent professional engineers or
other scientists generally recognized as expert in the detection, analysis and
remediation of Hazardous Substances and related environmental matters and
reasonably acceptable to the Agent.

                                      -11-

<PAGE>

     Environmental Laws. See ss.6.18(a).

     ERISA. The Employee Retirement Income Security Act of 1974, as amended and
in effect from time to time.

     ERISA Affiliate. Any Person which is treated as a single employer with the
REIT or the Borrower under ss.414 of the Code.

     ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of ss.4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.

     Eurocurrency Reserve Rate. For any day with respect to a Eurodollar Rate
Loan, the maximum rate (expressed as a decimal) at which any lender subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.

     Eurodollar Business Day. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other eurodollar interbank market as may be selected by the Agent and the Banks
in their sole discretion acting in good faith.

     Eurodollar Lending Office. Initially, the office of each Bank designated as
such in Schedule 1 hereto; thereafter, such other office of such Bank, if any,
that shall be making or maintaining Eurodollar Rate Loans.

     Eurodollar Rate. For any Interest Period with respect to a Eurodollar Rate
Loan, the sum of (a) the arithmetic average of the rates per annum for each
Reference Bank equal to the rate at which such Reference Bank's Eurodollar
Lending Office is offered Dollar deposits two Eurodollar Business Days prior to
the beginning of such Interest Period in an interbank eurodollar market where
the eurodollar and foreign currency and exchange operations of such Eurodollar
Lending Office are customarily conducted, for delivery on the first day of such
Interest Period for the number of days comprised therein and in an amount
comparable to the amount of the Eurodollar Rate Loan to which such Interest
Period applies.

     Eurodollar Rate Loans. The Revolving Loans bearing interest calculated by
reference to a Eurodollar Rate.


                                      -12-

<PAGE>

     Event of Default. See ss.12.l.

     Fee Letter. The letter agreement dated January 26, 1998 among the REIT, the
Borrower, BKB and BancBoston Securities Inc.

     FNMA. The Federal National Mortgage Association.

     FNMA Loan Agreement. The Master Credit Facility Agreement dated as of
November 17, 1995 by and among the Borrower, the REIT, BRI River Oaks Limited
Partnership and Washington Mortgage Financial Group, Ltd., as from time to time
in effect.

     Foreign Trade Regulations. Collectively and as from time to time in effect
(including any successor statutes or regulations), (a) any act that prohibits or
restricts, or empowers the President or executive agencies of the United States
of America to prohibit or restrict, exports to or financial transactions with
any foreign country or foreign national, (b) the regulations with respect to
certain prohibited foreign trade transactions set forth at 15 C.F.R. Parts 730
et seq., 22 C.F.R. Parts 120-130 and 31 C.F.R. Parts 500 et seq. and (c) any
order, regulation, ruling, interpretation, direction, instruction or notice
relating to any of the foregoing.

     Funds From Operations. With respect to any Person for any fiscal period,
net income (computed in accordance with generally accepted accounting
principles), excluding gains (or losses) from debt restructuring and sales of
property and nonrecurring income and expense items, plus depreciation and
amortization, and after adjustments for unconsolidated partnerships and joint
ventures. Adjustments for unconsolidated partnerships and joint ventures will be
calculated to reflect funds from operations on the same basis.

     Generally accepted accounting principals. (a) When used in ss.8.3(j) and
ss.9, whether directly or indirectly through reference to a capitalized term
used therein, (i) principles that are consistent with the principles promulgated
or adopted by the Financial Accounting Standards Board and its predecessors in
effect for the fiscal year ended on the Balance Sheet Date and (ii) to the
extent consistent with such principles, the accounting practices of the REIT
reflected in its financial statements for the year ended on the Balance Sheet
Date and (b) when used in general, other than as provided above, principles that
are (i) consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors, as in effect from time to time
and (ii) consistently applied with past financial statements of the Borrower
adopting the same principles; provided that in each case referred to in this
definition of "generally accepted accounting principles" a certified public
accountant would, insofar as the use of such accounting principles is pertinent,
be in a position to deliver an unqualified opinion (other than a qualification
regarding changes in generally accepted accounting principles) as to financial
statements in which such principles have been properly applied.

                                      -13-

<PAGE>

     Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of ss.3(2) of ERISA maintained or contributed to by the REIT, the
Borrower or any ERISA Affiliate the benefits of which are guaranteed on
termination in full or in part by the PBGC pursuant to Title IV of ERISA, other
than a Multiemployer Plan.

     Guarantor. Each of the REIT, BRI Texas Apartments Limited Partnership, BRI
Benchmark Limited Partnership, BRI Commons Limited Partnership, BRI Hunters Glen
Limited Partnership, BRI Diamond Ridge Associates Limited Partnership, BRI
Foxglove Associates L.L.C., BRI Ridgeview Chase Associates Limited Partnership,
BRI Texas Apartments-II, Inc., Berkshire Apartments, Inc., BRI Hunters Glen-II,
Inc., BRI Baltimore - 31, L.L.C., BRI Emerald, Inc. and each other Person which
shall become a Subsidiary (other than a Special Purpose Subsidiary) of the REIT.

     Hazardous Substances. See ss.6.18(b).

     Indebtedness. All obligations, contingent and otherwise, that in
accordance with generally accepted accounting principles should be classified
upon the obligor's balance sheet as liabilities, including in any event and
whether or not so classified: (a) all debt and similar monetary obligations,
whether direct or indirect; (b) all liabilities secured by any mortgage, pledge,
security interest, lien, charge or other encumbrance existing on property owned
or acquired subject thereto, whether or not the liability secured thereby shall
have been assumed; and (c) all guarantees, endorsements and other contingent
obligations whether direct or indirect in respect of indebtedness of others,
including any obligation to supply funds to or in any manner to invest directly
or indirectly in a Person, to purchase indebtedness, or to assure the owner of
indebtedness against loss through an agreement to purchase goods, supplies or
services for the purpose of enabling the debtor to make payment of the
indebtedness held by such owner or otherwise, the obligation to reimburse the
issuer in respect of any letter of credit and contingent obligations in respect
of interest rate protection agreements; provided, that with respect to the REIT
there shall not be included in Indebtedness any partnership interests of the
Borrower which are required under generally accepted accounting principles to be
carried as liabilities in the balance sheet of the REIT solely by virtue of
their status as minority interests as a result of their being partners in the
Borrower.

     Initial Limited Banner Contribution Agreement. The Initial Limited Partner
Contribution Agreement dated as of April 5, 1995, as from time to time in
effect, between the Borrower and GN Limited Partnership, a Massachusetts limited
partnership.

     Interest Expense. With respect to any Person for any fiscal period, the
interest expense of such Person for such fiscal period determined in accordance
with generally accepted accounting principles.

                                      -14-

<PAGE>

     Interest Payment Date. (a) As to each Loan, the first day of each calendar
month, and (b) also as to each Eurodollar Rate Loan, the last day of the
Interest Period relating thereto.

     Interest Period. With respect to each Loan (a) initially, the period
commencing on the Drawdown Date of such Loan and ending on the last day of one
of the periods set forth below, as selected by the Borrower in a Loan Request
(i) for any Base Rate Revolving Loan, the calendar month which includes the day
immediately following the commencement date and (ii) for any Eurodollar Rate
Loan, one, two, three or six months, and (b) thereafter, each period commencing
on the day following the last day of the next preceding Interest Period
applicable to such Loan and ending on the last day of one of the periods set
forth above, as selected by the Borrower in a Conversion Request; provided that
all of the foregoing provisions relating to Interest Periods are subject to the
following:

          (a) if any Interest Period with respect to a Eurodollar Rate Loan
     would otherwise end on a day that is not a Eurodollar Business Day, that
     Interest Period shall be extended to the next succeeding Eurodollar
     Business Day unless the result of such extension would be to carry such
     Interest Period into another calendar month, in which event such Interest
     Period shall end on the immediately preceding Eurodollar Business Day;

          (b) if any Interest Period with respect to a Base Rate Revolving Loan
     would end on a day that is not a Business Day, that Interest Period shall
     end on the next succeeding Business Day;

          (c) if the Borrower shall fail to give notice as provided in ss.4.1,
     the Borrower shall be deemed to have requested a conversion of the affected
     Eurodollar Rate Loan to a Base Rate Revolving Loan on the last day of the
     then current Interest Period with respect thereto;

          (d) any Interest Period relating to any Eurodollar Rate Loan that
     begins on the last Eurodollar Business Day of a calendar month (or on a day
     for which there is no numerically corresponding day in the calendar month
     at the end of such Interest Period) shall end on the last Eurodollar
     Business Day of a calendar month; and

          (e) any Interest Period relating to any Eurodollar Rate Loan that
     would otherwise extend beyond the Maturity Date shall end on the Maturity
     Date.

     Investments. With respect to any Person, all shares of capital stock,
evidences of Indebtedness and other securities issued by any other Person, all
loans, advances, or extensions of credit to, or contributions to the capital of,
any other Person, all purchases of the securities or business or integral part
of the business of any other Person and commitments and options to make such
purchases, all interests in real property, and all other investments; provided,
however, that the term "Investment" shall not include (i) equipment,

                                      -15-

<PAGE>

inventory and other tangible personal property acquired in the ordinary course
of business, (ii) current trade and customer accounts receivable for services
rendered in the ordinary course of business and payable in accordance with
customary trade terms, (iii) advances to employees for travel expenses, drawing
accounts and similar expenditures, (iv) prepaid expenses made in the ordinary
course of business or (v) stock or other securities acquired in connection with
the satisfaction or enforcement of Indebtedness or claims due or owing to the
Borrower or any Subsidiary or Nominee or as security for any such Indebtedness
or claim. In determining the aggregate amount of Investments outstanding at any
particular time: (a) there shall be included as an Investment all interest
accrued with respect to Indebtedness constituting an Investment unless and until
such interest is paid; provided, however, that accrued interest on mortgage
loans shall not be included in the book value thereof for the purpose of
ss.8.3(j); (b) there shall be deducted in respect of each such Investment any
amount received as a return of capital (but only by repurchase, redemption,
retirement, repayment, liquidating dividend or liquidating distribution); (c)
there shall not be deducted in respect of any Investment any amounts received as
earnings on such Investment, whether as dividends, interest or otherwise, except
that accrued interest included as provided in the foregoing clause (a) may be
deducted when paid; and (d) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.

     Joint Venture Asset. A Borrowing Base Property that is not owned 100% in
fee by the Borrower or a Subsidiary or a Nominee acting on behalf of the
Borrower or a Subsidiary.

     J.V. Advance Value. With respect to each Joint Venture Asset, (a) if the
Borrower has effective operating control of the Joint Venture Asset, an amount
equal to 50% of the Appraised Value of the Joint Venture Asset multiplied by the
Borrower's percentage ownership interest in the Joint Venture Asset or (b) if
the Borrower does not have effective operating control of the Joint Venture
Asset, an amount equal to 40% of the Appraised Value of the Joint Venture Asset
multiplied by the Borrower's percentage ownership interest in the Joint Venture
Asset; provided, however, that to the extent that any Joint Venture Asset is
encumbered by a lien or encumbrance described in ss.8.2(ii)(B) that has not been
bonded as provided in ss.7.8, the amount of the Indebtedness secured by such
lien or encumbrance shall be deducted from the value described for such property
in clause (a) or (b) above.

     Leases. Leases, licenses and agreements whether written or oral, relating
to the use or occupation of space in or on the Building or on the Real Estate by
persons other than the Borrower.

     Letter of Credit Exposure. On any date, the sum of (a) the aggregate face
amount of all drafts that may then or thereafter be presented by beneficiaries
under all Letters of Credit then outstanding, plus (b) the aggregate face amount
of all drafts that the Agent has

                                      -16-

<PAGE>

previously accepted under Letters of Credit but has not paid. Letter of Credit
Exposure shall be allocated to each Bank in accordance with its Commitment
Percentage.

     Leverage Ratio. On any date the quotient, expressed as a percentage, equal
to the Consolidated Total Indebtedness of the Borrower and its Subsidiaries
divided by the Consolidated Total Assets of the Borrower and its Subsidiaries.

     Loan Documents. This Agreement, the Notes, the Letters of Credit, each
Qualified Hedge Agreement, the Fee Letter, the Swap Assignment and all
amendments to the foregoing and other documents, instruments or agreements
executed or delivered by or on behalf of the Borrower or any Nominee in
connection with the Loans.

     Loan Request. See ss.2.6.

     Loans. The Revolving Loans to be made by the Banks hereunder.

     Majority Banks. Banks holding 66 2/3% of the Commitments.

     Margin Stock. "Margin stock" within the meaning of Regulation G, T, U or X
(or any successor provisions) of the Board of Governors of the Federal Reserve
System, or any regulations, interpretations or rulings thereunder, all as from
time to time in effect.

     Maturity Date. January 31, 2000, or such earlier date on which the
Revolving Loans shall become due and payable pursuant to the terms hereof,
subject to extension to January 31, 2001 on the terms set forth in ss.2.18.

     Moody's. Moody's Investors Service, Inc. and its successors and assigns.

     Multiemployer Plan. Any multiemployer plan within the meaning of ss.3(37)
of ERISA maintained or contributed to by the REIT, the Borrower or any ERISA
Affiliate.

     Net Income (or Deficit). With respect to any Person (or any asset of any
Person) for any fiscal period, the net income (or deficit) of such Person (or
attributable to such asset), after deduction of all expenses, taxes and other
proper charges, determined in accordance with generally accepted accounting
principles.

     Net Operating Income. With respect to any Person (or any asset of any
Person) for any fiscal period, an amount equal to the sum of (a) the Net Income
of such Person (or attributable to such asset) for such fiscal period plus (b)
depreciation and amortization, Interest Expense, corporate general and
administrative expenses allocated to such Person (or asset) and any
extraordinary or nonrecurring losses deducted in calculating such Net Income
minus (c) any extraordinary or nonrecurring gains included in calculating such
Net Income, all as determined in accordance with generally accepted accounting
principles.

                                      -17-

<PAGE>

     Nominee. Each Subsidiary of the Borrower which holds fee title to a parcel
of real estate on behalf of the Borrower pursuant to an agency or other written
contractual arrangement approved by the Majority Banks.

     Non-recourse Indebtedness. Indebtedness of the Borrower or a Subsidiary
which is secured by one or more parcels of Real Estate (other than Borrowing
Base Property) or interests therein and Short-term Investments and is not a
general obligation of the REIT, the Borrower, any Subsidiary or any Nominee, the
holder of such Indebtedness having recourse solely to the parcels of Real Estate
securing such Indebtedness, the Building and Leases thereon and the rents and
profits thereof and the Short-term Investments securing such Indebtedness;
provided, however, that the holder of such Indebtedness may have recourse
against the general credit of the REIT, the Borrower or such Subsidiary (i) with
respect to claims based on fraud, intentional misrepresentation, misapplication
of funds, intentional mismanagement or waste, failure to comply with legal
requirements necessary to maintain the tax-exemption on the interest on such
Indebtedness (if applicable) or failure to pay transfer fees and charges due to
the lender in connection with any sale or other transfer of the Real Estate
subject to such Indebtedness, (ii) with respect to claims arising from the
presence of Hazardous Substances on the parcels of Real Estate securing such
Indebtedness, (iii) with respect to reimbursement for payments of real estate
taxes, assessments and premiums for insurance on the Real Estate subject to such
Indebtedness, (iv) with respect to any loss by fire or casualty to the extent
not compensated by insurance proceeds, (v) with respect to any premium required
to be paid on tax-exempt Non-recourse Indebtedness in the event that it shall
become subject to taxation and (vi) with respect to additional expenses and
liabilities related to the Real Estate securing such Indebtedness in an
aggregate amount that shall not exceed in the case of any single issue of such
Indebtedness the sum of $200,000; and provided, further, that such Indebtedness
may be secured or supported by (a) a replacement reserve fund in an amount not
to exceed the product of $300 times the number of units of housing in the
projects financed by such Indebtedness or (b) if such Indebtedness is
tax-exempt, a debt service reserve fund in an amount not exceeding federal tax
guidelines; and provided, further, that Indebtedness of any Special Purpose
Subsidiary shall be considered Non-recourse Indebtedness hereunder even if such
Indebtedness shall constitute a general obligation of such Special Purpose
Subsidiary so long as the only asset of such Special Purpose Subsidiary is the
Real Estate financed by such Indebtedness and there is no recourse for such
Indebtedness to the REIT or the Borrower.

     Notes. The Revolving Credit Notes.

     Obligations. All indebtedness, obligations and liabilities of the Borrower
and its Subsidiaries to any of the Banks and the Agent, individually or
collectively, under this Agreement or any of the other Loan Documents or in
respect of any of the Loans or the Notes or the Letters of Credit, or other
instruments at any time evidencing any of the foregoing, whether existing on the
date of this Agreement or arising or incurred hereafter,

                                      -18-

<PAGE>

direct or indirect, joint or several, absolute or contingent, matured or
unmatured, liquidated or unliquidated, secured or unsecured, arising by
contract, operation of law or otherwise.

     Obligor. Each of the Borrower, the REIT and each Subsidiary of the Borrower
or the REIT which shall become a guarantor hereunder.

     OP Partnership Agreement. The Amended and Restated Agreement of Limited
Partnership of BRI OP Limited Partnership dated as of May 1,1995 among the REIT,
as general partner, and GN Limited Partnership, a Massachusetts limited
partnership, as initial limited partner, as from time to time in effect.

     Operating Cash Flow. With respect to any Person for any fiscal period, an
amount equal to EBITDA for such fiscal period minus an allowance for capital
expenditure requirements computed at the annual rate of $200 per unit for
multifamily housing projects.

     Outstanding. With respect to the Loans, the aggregate unpaid principal
thereof as of any date of determination.

     Partnership Status. With respect to the Borrower, its status as a limited
partnership exempt from federal income taxation under the Code.

     PBGC. The Pension Benefit Guaranty Corporation created by ss.4002 of ERISA
and any successor entity or entities having similar responsibilities.

     Permitted Liens. Liens, security interests and other encumbrances permitted
by ss.8.2.

     Person. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.

     Plan. At any time, any pension benefit plan subject to Title IV of ERISA
maintained, or to which contributions have been made or are required to be made,
by the REIT, the Borrower or any ERISA Affiliate within six years prior to such
time.

     Prior Credit Agreement. The 1992 Credit Agreement dated as of December 30,
1992, as amended and restated through the Amended and Restated 1992 Credit
Agreement dated as of November 21, 1995 among the REIT, the OP, the Guarantors
named herein, BankBoston, N.A., Mellon Bank, N.A. and BankBoston, N.A., as
Agent, and as further amended to the date hereof.

     Prospectus. The Prospectus/Proxy Statement of the REIT dated November 8,
1990 as amended by Supplement No. 1 thereto dated November 29, 1990, Supplement
No. 2

                                      -19-

<PAGE>

thereto dated December 14, 1990, Supplement No. 3 thereto dated January 31,
1991 and Supplement No. 4 thereto dated May 22, 1991.

     Qualified Hedge Agreement. Each of the Master Agreement dated as of October
31, 1995 between BKB and the Borrower and any other interest rate protection
agreement which is entered into between the Borrower and any Bank.

     Real Estate. All real property at any time owned or leased (as lessee or
sublessee) by the Borrower or any of its Subsidiaries or Nominees.

     Record. The grid attached to any Note, or the continuation of such grid, or
any other similar record, including computer records, maintained by any Bank
with respect to any Loan referred to in such Note.

     Reference Bank. BKB.

     Register See ss.183

     REIT Status. With respect to the REIT, its status as a real estate
investment trust as defined in ss.856(a) of the Code.

     Release. See ss.6.18(c)(iii).

     Rent Roll. A report prepared by the Borrower showing with respect to Real
Estate utilized principally for multifamily housing, for each unit its type,
occupancy status, lease expiration date, market rent, lease rent and other
information, substantially in the form presented to the Agent prior to the date
hereof or in such other form as may have been approved by the Agent, such
approval not to be unreasonably withheld.

     Revolving Credit Note Record. A Record with respect to any Revolving Credit
Note.

     Revolving Credit Notes. See ss.2.4.

     Revolving Loans. Revolving loans made or to be made by any of the Banks to
the Borrower pursuant to ss.2.

     S&P. Standard & Poor's, a Division of The McGraw-Hill Companies, Inc., and
its successors and assigns. 

     SEC. The federal Securities and Exchange Commission.

     Short-term Investments. Investments described in subsections (a) through
(g), inclusive, of ss.8.3.


                                      -20-

<PAGE>

     Special Purpose Subsidiary. Any Subsidiary of the REST and/or the Borrower
which was formed (a) solely for the purpose of incurring Non-recourse
Indebtedness and owning properties financed thereby or (b) solely for the
purpose of acting as general partner of an entity described in clause (a).

     State. A state of the United States of America.

     Structural Change. Each entry by the Borrower or any Subsidiary in any
line of business (including without limitation the acquisition of Real Estate
other than for current or eventual use principally as a multifamily housing
facility) other than a line of business in which it is engaged as a continuing
matter on the Effective Date, each spinoff or divestiture affecting the Borrower
or any Subsidiary (excluding such transactions to which only the Borrower and/or
its Subsidiaries are parties) and each Investment permitted by ss.8.3(j), in
each case whether or not permitted by the terms hereof other than ss.8.13.

     Subsidiary. Any corporation, association, partnership, trust, or other
business entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by number
of votes or controlling interests) of the outstanding Voting Interests or, in
the case of a partnership, of which the designated parent or a Subsidiary owns a
majority (by percentage of ownership) of the limited partnership interests or is
a general partner.

     Swap Assignment. See ss. 10.6.

     Test Period. See ss.9.2.

     Total Commitment. The sum of the Commitments of the Banks, as in effect
from time to time.

     Type. As to any Loan, its nature as a Base Rate Revolving Loan or a
Eurodollar Rate Loan.

     Unsecured Senior Public Debt. Unsecured Indebtedness of the REIT or the
Borrower which is issued pursuant to a registration statement filed with the SEC
or an exemption from registration under Rule 144A promulgated under the
Securities Exchange Act of 1934, as amended.

     Voting Interests. Stock or similar ownership interests, of any class or
classes (however designated), the holders of which are at the time entitled, as
such holders, (a) to vote for the election of a majority of the directors (or
persons performing similar functions) of the corporation, association,
partnership, trust or other business entity involved, or (b) to control, manage,
or conduct the business of the corporation, partnership, association, trust or
other business entity involved.

                                      -21-

<PAGE>

     Wholly Owned Subsidiary: Any Subsidiary of which all of the outstanding
capital stock (or other shares of beneficial interest) entitled to vote
generally (other than directors' qualifying shares) is owned by the REIT (or
other specified Person) directly, or indirectly through one or more Wholly Owned
Subsidiaries.

     ss.1.2. Rules of Interpretation.

          (a) A reference to any document or agreement shall include such
     document or agreement as amended, modified or supplemented from time to
     time in accordance with its terms and the terms of this Agreement.

          (b) The singular includes the plural and the plural includes the
     singular.

          (c) A reference to any law includes any amendment or modification to
     such law.

          (d) A reference to any Person includes its permitted successors and
     permitted assigns.

          (e) Accounting terms not otherwise defined herein have the meanings
     assigned to them by generally accepted accounting principles applied on a
     consistent basis by the accounting entity to which they refer.

          (f) The words "include", "includes" and "including" are not limiting.

          (g) All terms not specifically defined herein or by generally accepted
     accounting principles, which terms are defined in the Uniform Commercial
     Code as in effect in Massachusetts, have the meanings assigned to them
     therein.

          (h) Reference to a particular "ss." refers to that section of this
     Agreement unless otherwise indicated.

          (i) The words "herein", "hereof", "hereunder" and words of like import
     shall refer to this Agreement as a whole and not to any particular section
     or subdivision of this Agreement.

     ss.2. THE REVOLVING CREDIT FACILITY AND LETTER OF CREDIT FACILITY.

     ss.2.1. Commitment to Lend. Subject to the terms and conditions set forth
in this Agreement, each of the Banks severally agrees to lend to the Borrower,
and the Borrower may borrow (and repay and reborrow) from time to time between
the Effective Date and the Maturity Date upon notice by the Borrower to the
Agent given in accordance with ss.2.6,

                                      -22-

<PAGE>

such sums as are requested by the Borrower for the purposes set forth in ss.7.11
up to a maximum aggregate principal amount outstanding (after giving effect to
all amounts requested) at any one time equal to such Bank's Commitment minus the
portion of such Bank's Commitment allocated to Letter of Credit Exposure;
provided, that, in all events no Default or Event of Default shall have occurred
and be continuing and the Borrower's pro forma financial statements as required
pursuant to ss.2.6(iii) shall demonstrate compliance with all covenants set
forth therein; and provided, further, that the sum of outstanding principal
amount of the Revolving Loans (after giving effect to all amounts requested)
plus Letter of Credit Exposure shall not at any time exceed either (i) the Total
Commitment or (ii) the Borrowing Base Availability. The Revolving Loans shall be
made pro rata in accordance with each Bank's Commitment Percentage. Each request
for a Revolving Loan hereunder shall constitute a representation and warranty by
the Borrower that all of the conditions set forth in ss.10 have been satisfied
as of the Effective Date and that all of the conditions set forth in ss.11 have
been satisfied on the date of such request.

     ss.2.2. Unused Commitment Fee. The Borrower agrees to pay to the Agent for
the accounts of the Banks in accordance with their respective Commitment
Percentages an unused commitment fee calculated at the rate per annum of
two-tenths of one percent (.20%) on the average daily amount by which the Total
Commitment exceeds the sum of the outstanding principal amount of Revolving
Loans plus the Letter of Credit Exposure during each calendar quarter or portion
thereof commencing on the Effective Date and ending on the Maturity Date. The
unused commitment fee shall be payable quarterly in arrears on the first day of
each calendar quarter for the immediately preceding calendar quarter or portion
thereof, with a final payment on the Maturity Date or, as provided in ss.2.3,
any earlier date on which the Commitments shall be reduced or shall terminate.

     ss.2.3. Reduction of Commitment. The Borrower shall have the right at any
time and from time to time upon five Business Days' prior written notice to the
Agent to reduce by $1,000,000 or an integral multiple of $100,000 in excess
thereof or to terminate entirely the unborrowed portion of the Commitments,
whereupon the Commitments of the Banks shall be reduced pro rata in accordance
with their respective Commitment Percentages of the amount specified in such
notice or, as the case may be, terminated, any such reduction to be without
penalty (unless such reduction requires repayment of a Eurodollar Rate Loan)
provided, that no such reduction may reduce the Total Commitment to an amount
that is less than the sum of the principal amount of Revolving Loans outstanding
plus the Letter of Credit Exposure in effect immediately after giving effect to
such reduction. Promptly after receiving any notice of the Borrower delivered
pursuant to this ss.2.3, the Agent will notify the Banks of the substance
thereof. Upon the effective date of any such reduction or termination, the
Borrower shall pay to the Agent for the respective accounts of the Banks the
full amount of any facility fee under ss.2.2 then accrued on the amount of the
reduction. No reduction or termination of the Commitment may be reinstated.


                                      -23-
<PAGE>


     ss.2.4.  Revolving  Credit Notes. The Revolving Loans shall be evidenced by
separate promissory notes of the Borrower in substantially the form of Exhibit A
hereto (collectively,  the "Revolving Credit Notes"),  dated as of the Effective
Date (or such later date to which interest on the Revolving  Loans has been paid
in full) and completed with  appropriate  insertions.  One Revolving Credit Note
shall be payable to the order of each Bank in the principal amount equal to such
Bank's  Commitment or, if less, the  outstanding  amount of all Revolving  Loans
made by such Bank,  plus  interest  accrued  thereon,  as set forth  below.  The
Borrower  irrevocably  authorizes  each Bank to make or cause to be made,  at or
about  the time of the  Drawdown  Date of any  Revolving  Loan or at the time of
receipt of any payment of principal  thereof,  an  appropriate  notation on such
Bank's Record  reflecting  the making of such Revolving Loan or (as the case may
be) the receipt of such payment.  The outstanding  amount of the Revolving Loans
set forth on such Bank's  Record shall be prima facie  evidence of the principal
amount thereof owing and unpaid to such Bank, but the failure to record,  or any
error in so recording,  any such amount on such Bank's Record shall not limit or
otherwise  affect  the  obligations  of the  Borrower  hereunder  or  under  any
Revolving  Credit  Note to make  payments  of  principal  of or  interest on any
Revolving Credit Note when due.

     ss.2.5. Interest on Revolving Loans.

          (a) Each Base Rate  Revolving  Loan shall bear interest for the period
     commencing with the Drawdown Date thereof and ending on the last day of the
     Interest Period with respect thereto at the Base Rate.

          (b) Each  Eurodollar  Rate  Revolving Loan shall bear interest for the
     period commencing with the Drawdown Date thereof and ending on the last day
     of the Interest  Period with respect thereto at the rate per annum equal to
     the sum of the Eurodollar Rate determined for such Interest Period plus the
     Applicable Margin from time to time in effect.

          (c) The Borrower  promises to pay interest on each  Revolving  Loan in
     arrears on each Interest Payment Date with respect thereto.

          (d) Base Rate Revolving  Loans and Eurodollar Rate Revolving Loans may
     be convened to Loans of the other Type as provided in ss.4.1.

     ss.2.6.  Requests for Revolving  Loans. The Borrower shall notify the Banks
of a potential  request for a  Revolving  Loan as soon as possible  but not less
than three  Business  Days prior to the  Borrower's  proposed  Drawdown Date and
shall  give to the  Banks  written  notice in the form of  Exhibit B hereto  (or
telephonic  notice confirmed in writing in the form of Exhibit B hereto) of each
Revolving  Loan  requested  hereunder  (a "Loan  Request")  no less  than  three
Business  Days prior to the  proposed  Drawdown  Date.  Each such  notice  shall
specify  with respect to the  requested  Revolving  Loan the proposed  principal
amount,


                                      -24-
<PAGE>


Drawdown Date, Interest Period and Type. Each such notice shall also contain (i)
a  calculation  showing that after giving  effect to such advance the sum of the
principal  amount of Revolving Loans to be outstanding plus the Letter of Credit
Exposure  shall not exceed either the Total  Commitment  or the  Borrowing  Base
Availability  then in effect,  (ii) a  certification  by the chief  financial or
chief accounting officer of the REIT that the REIT and the Borrower are and will
be in compliance with all covenants under the Loan Documents after giving effect
to the  making  of such  Revolving  Loan,  and  (iii) a  Compliance  Certificate
prepared on a pro forma basis using the  financial  statements  of the  Borrower
most  recently  provided or required to be provided to the Banks under ss.6.4 or
ss.7.4  adjusted in the best good faith  estimate of the Borrower to give effect
to the proposed  advance.  Promptly  upon receipt of any such notice,  the Agent
shall notify each of the Banks  thereof.  Each such notice shall be  irrevocable
and binding on the REIT and the  Borrower  and shall  obligate  the  Borrower to
accept the  Revolving  Loan  requested  from the Banks on the proposed  Drawdown
Date. Each Loan Request shall be (a) for a Base Rate Revolving Loan in a minimum
aggregate  amount of  $1,000,000  or an integral  multiple of $100,000 in excess
thereof,  or (b) for a Eurodollar  Rate  Revolving  Loan in a minimum  aggregate
amount of  $2,000,000  or an integral  multiple  of $100,000 in excess  thereof;
provided,  however,  that  there  shall be no more  than  five  Eurodollar  Rate
Revolving Loans outstanding at any one time.

     ss.2.7.  Funds for Revolving Loans. Not later than 11:00 a.m. (Boston time)
on the proposed  Drawdown  Date of any Revolving  Loans,  each of the Banks will
make  available  to the  Agent,  at the  Agent's  Head  Office,  in  immediately
available funds, the amount of such Bank's  Commitment  Percentage of the amount
of the requested  Revolving  Loans.  Upon receipt from each Bank of such amount,
and upon receipt of the documents required by ss. 11 and the satisfaction of the
other  conditions set forth therein,  to the extent  applicable,  the Agent will
make available to the Borrower the aggregate amount of such Revolving Loans made
available to the Agent by the Banks by  crediting  such amount to the account of
the Borrower  maintained  at the Agent's Head Office.  The failure or refusal of
any Bank to make  available to the Agent at the aforesaid  time and place on any
Drawdown Date the amount of its Commitment Percentage of the requested Revolving
Loans shall not relieve any other Bank from its several obligation  hereunder to
make  available  to the  Agent  the  amount  of  such  other  Bank's  Commitment
Percentage of any requested Revolving Loans,  including any additional Revolving
Loans  that may be  requested  subject  to the  terms and  conditions  hereof to
provide  funds to replace those not advanced by the Bank so failing or refusing.
In the  event of any such  failure  or  refusal,  the Banks  not so  failing  or
refusing shall be entitled to a priority  position for such Loans as provided in
ss.12.4(b).

     ss.2.8.  Issuance  of  Letters  of  Credits.  Subject  to all the terms and
conditions  of this  Agreement  and so long as no Default  exists,  the Agent on
behalf of the Banks  will  issue for the  account  of the  Borrower  irrevocable
standby letters of credit (the "Letters of Credit") provided,  however,  that no
more than three Letters of Credit may be outstanding  at any one time,  that the
Letter of Credit Exposure in effect at any time shall never exceed $4,000,000


                                      -25-
<PAGE>


and that at no time  shall the sum of the  Letter of  Credit  Exposure  plus the
aggregate  outstanding  principal amount of Revolving Loans exceed the lesser of
the Total Commitment or the Borrowing Base Availability.

     ss.2.9.  Requests for Letters of Credit. The Borrower may from time to time
request a Letter of Credit to be issued by providing to the Agent a notice which
is actually  received  no less than five  Business  Days prior to the  requested
Drawdown  Date for such  Letter  of  Credit  specifying  (a) the  amount  of the
requested  Letter of Credit,  (b) the  beneficiary  thereof,  (c) the  requested
Drawdown Date and (d) the principal terms of the text for such Letter of Credit.
Each Letter of Credit will be issued by forwarding it to the Borrower or to such
other  Person as directed in writing by the  Borrower.  In  connection  with the
issuance  of any Letter of Credit,  the  Borrower  shall  furnish to the Agent a
certificate in substantially  the form of Exhibit B, the Compliance  Certificate
required by ss.  11.5(b) and any  customary  application  forms  required by the
Agent.

     ss.2.10. Form and Expiration of Letters of Credit. Each Letter of Credit to
be issued  under  this  Section 2 and each  draft  accepted  or paid  under such
Letters of Credit shall be issued,  accepted or paid, as the case may be, by the
Agent at its principal office. No Letter of Credit shall provide for the payment
of drafts drawn  thereunder,  and no draft shall be payable,  at a date which is
later than the earlier of (a) the date twelve  months after the date of issuance
or (b) the Maturity Date.  Each Letter of Credit and each draft accepted under a
Letter of Credit  shall be in such form and minimum  amount,  and shall  contain
such terms, as the Agent and the Borrower may agree upon at the time such Letter
of Credit is issued, including a requirement of not less than three Banking Days
after presentation of a draft before payment must be made thereunder.

     ss.2.11.  Banks'  Participation in Letters of Credit.  Upon the issuance of
each  Letter of Credit,  a  participation  therein,  in an amount  equal to each
Bank's Commitment Percentage, shall automatically be deemed granted by the Agent
to each Bank on the date of such issuance and each Bank shall  automatically  be
obligated, to reimburse the Agent to the extent of its Commitment Percentage for
all  obligations  incurred  by the Agent to third  parties  in  respect  of such
Letters of Credit not  reimbursed by the  Borrower.  The Agent will send to each
Bank on a monthly basis a confirmation regarding the participation in Letters of
Credit outstanding during such month.

     ss.2.12.  Presentation.  The Agent may accept or pay any draft presented to
it,  regardless of when drawn and whether or not negotiated,  if such draft, the
other required  documents and any transmittal  advice are presented to the Agent
and dated on or before the  expiration  date of the Letter of Credit under which
such draft is drawn.  Except insofar as  instructions  actually  received may be
given by the Borrower in writing  expressly to the contrary  with regard to, and
prior to, the  Agent's  issuance  of any Letter of Credit for the account of the
Borrower and such contrary  instructions are reflected in such Letter of Credit,
the Agent may honor as complying with the terms of the Letter of Credit and with


                                      -26-
<PAGE>


this Agreement any drafts or other documents otherwise in order signed or issued
by an administrator,  executor,  conservator,  trustee in bankruptcy,  debtor in
possession,  assignee for benefit of  creditors,  liquidator,  receiver or other
legal representative of the party authorized under such Letter of Credit to draw
or issue such drafts or other documents.

     ss.2.13.  Payment of Drafts. At such time as the Agent makes any payment on
a draft  presented or accepted  under a Letter of Credit,  the Borrower  will on
demand pay to the Agent for the  benefit of the Banks in  immediately  available
funds the amount of such payment. Unless the Borrower shall otherwise pay to the
Agent the amount  required  by the  foregoing  sentence,  such  amount  shall be
considered a Revolving Loan.

     ss.2.14. Uniform Customs and Practice. The Uniform Customs and Practice for
Documentary   Credits  (1993  Revision),   International   Chamber  of  Commerce
Publication No. 500, and any subsequent revisions thereof approved by a Congress
of the  International  Chamber  of  Commerce  and  adhered  to by the Agent (the
"Uniform Customs and Practice"),  shall be binding on the Borrower and the Agent
except to the extent otherwise  provided  herein,  in any Letter of Credit or in
any other Loan  Document.  Anything in the Uniform  Customs and  Practice to the
contrary notwithstanding:

          (a) Neither the Borrower nor any  beneficiary  of any Letter of Credit
     shall be deemed an agent of the Agent.

          (b) With  respect to any Letter of Credit,  neither  the Agent nor its
     correspondents  shall  be  responsible  for  or  shall  have  any  duty  to
     ascertain:

               (i) the genuineness of any signature;

               (ii) the validity,  form, sufficiency,  accuracy,  genuineness or
          legal effect of any endorsements;

               (iii)  delay in giving,  or failure to give,  notice of  arrival,
          notice of refusal of documents or of discrepancies in respect of which
          the  Agent  refuses  the  documents  or any  other  notice,  demand or
          protest;

               (iv) the  performance  by any  beneficiary  under  any  Letter of
          Credit of such beneficiary's obligations to the Borrower;

               (v) inaccuracy in any notice received by the Agent;

               (vi) the validity,  form, sufficiency,  accuracy,  genuineness or
          legal effect of any instrument,  draft,  certificate or other document
          required by such Letter of Credit to be presented  before payment of a
          draft,  or the office held by or the  authority of any Person  signing
          any of the same; or


                                      -27-
<PAGE>


               (vii) failure of any instrument to bear any reference or adequate
          reference  to such Letter of Credit,  or failure of any Person to note
          the amount of any  instrument on the reverse of such Letters of Credit
          or to surrender  such Letter of Credit or to forward  documents in the
          manner required by such Letter of Credit.

          (c) The  occurrence  of any of the events  referred  to in the Uniform
     Customs and Practice or in the preceding clauses of this Section 2.14 shall
     not affect or prevent the  vesting of any of the  Agent's  rights or powers
     hereunder or the  Borrower's  obligation to make  reimbursement  of amounts
     paid under any Letter of Credit or any draft accepted thereunder so long as
     the Agent has acted without gross negligence or willful misconduct.

          (d) The Borrower will promptly  examine (i) each Letter of Credit (and
     any  amendments  thereof) sent to it by the Agent and (ii) all  instruments
     and documents  delivered to it from time to time by the Agent. The Borrower
     will  notify  the Agent of any claim of  noncompliance  by notice  actually
     received  within three  Business Days after receipt of any of the foregoing
     documents,  the Borrower being conclusively  deemed to have waived any such
     claim against the Agent and its correspondents unless such notice is given.
     The Agent  shall  have no  obligation  or  responsibility  to send any such
     Letter of Credit or any such instrument or document to the Borrower.

          (e) In the  event  of any  conflict  between  the  provisions  of this
     Agreement  and the Uniform  Customs and  Practice,  the  provisions of this
     Agreement shall govern.

     ss.2.15.  Subrogation.  Upon any  payment by the Agent  under any Letter of
Credit and until the  reimbursement of the Agent by the Borrower with respect to
such payment,  the Agent shall be entitled to be  subrogated  to, and to acquire
and retain,  the rights  which the Person to whom such  payment is made may have
against the Borrower,  all for the benefit of the Banks.  The Borrower will take
such  action  as the Agent  may  reasonably  request,  including  requiring  the
beneficiary  of any Letter of Credit to execute such  documents as the Agent may
reasonably request, to assure and confirm to the Agent such subrogation and such
rights, including the rights, if any, of the beneficiary to whom such payment is
made in accounts  receivable,  inventory and other  properties and assets of any
Obligor.

     ss.2.16.  Modification,  Consent, etc. If the Borrower requests or consents
in writing to any  modification or extension of any Letter of Credit,  or waives
any failure of any draft, certificate or other document to comply with the terms
of such Letter of Credit, and if the Agent consents thereto,  the Agent shall be
entitled to rely on such request,  consent or waiver.  This  Agreement  shall be
binding upon the  Borrower  with respect to such Letter of Credit as so modified
or  extended,  and with  respect  to any  action  taken or  omitted by the Agent
pursuant to any such request, consent or waiver.


                                      -28-
<PAGE>


     ss.2.17.  Letter  of  Credit  Fees.  The  Borrower  will  pay to the  Agent
customary  service  charges and expenses for its services in connection with the
Letters of Credit at the times and in the amounts from time to time in effect in
accordance with its general rate structure, including fees and expenses relating
to issuance,  amendment,  negotiation,  cancellation and similar operations. The
Borrower  will also pay to the Agent for the benefit of the Banks a fee equal to
150 basis points per annum payable  quarterly in arrears on the Letter of Credit
Exposure,  which fee shall be allocated among the Banks in accordance with their
Commitment Percentage.

     ss.2.18.  Extension  of  Maturity  Date.  Upon the  written  request of the
Borrower and the  Guarantors  delivered to the Agent not later than December 31,
1999 and subject to the  satisfaction  of the  conditions  set forth below,  the
Maturity Date shall be extended to January 31, 2001. The conditions  referred to
in the preceding sentence are as follows:

          (a) On the date of such written  request and on January 31,  2000,  no
     Default or Event of Default shall have occurred and be continuing.

          (b) On or before  January 31, 2000,  the Borrower  shall have executed
     and  delivered to the Agent a  replacement  Revolving  Credit Note for each
     Bank in the  principal  amount of such  Bank's  Commitment,  which shall be
     stated to mature on January 31, 2001.

          (c) On or before  January 31, 2000,  the Borrower shall have delivered
     to the Agent the  opinion of the  Borrower's  legal  counsel  updating  and
     confirming as of January 31, 2000 the opinion delivered under ss.10.5.

          (d) On or before January 31, 2000, the Borrower shall pay to the Agent
     an extension fee equal to  one-quarter  of one percent  (.25%) of the Total
     Commitments as in effect on such date, such amount to be distributed  among
     the Banks in accordance with their respective Commitments.

     ss.3. REPAYMENT OF THE LOANS.

     ss.3.1. Stated Maturity. The Borrower promises to pay on the Maturity Date,
and there shall become  absolutely  due and payable on the Maturity Date, all of
the Revolving Loans outstanding on such date,  together with any and all accrued
and unpaid interest thereon.

     ss.3.2.  Mandatory  Prepayments.  If at any time  the sum of the  aggregate
outstanding  principal  amount of the Revolving  Loans plus the Letter of Credit
Exposure exceeds either the Total Commitment or the Borrowing Base  Availability
then in  effect,  then the  Borrower  shall  immediately  pay the amount of such
excess to the Agent for the respective  accounts of the Banks for application to
the Revolving Loans.


                                      -29-
<PAGE>


     ss.3.3.  Optional  Prepayments.  The Borrower shall have the right,  at its
election,  to prepay the outstanding amount of the Loans, as a whole or in part,
at any time  without  penalty  or  premium;  provided,  that the full or partial
prepayment of the  outstanding  amount of any Eurodollar  Rate Loans pursuant to
this  ss.3.3 may be made only on the last day of the  Interest  Period  relating
thereto unless the Borrower shall  simultaneously pay any amounts due on account
of such prepayment  pursuant to ss.4.9 and ss.4.10.  The Borrower shall give the
Agent,  no later than 10:00 a.m.,  Boston time,  at least three  Business  Days'
prior written notice of any prepayment  pursuant to this ss.3.3 of any Base Rate
Revolving  Loans  and at least  four  Eurodollar  Business  Days'  notice of any
proposed  repayment  pursuant' to this ss.3.3 of Eurodollar  Rate Loans, in each
case  specifying the proposed date of payment of Loans and the principal  amount
to be paid.

     ss.3.4.  Partial  Prepayments.  Each partial  prepayment of the Loans under
ss.3.2  and  ss.3.3  shall be in an  integral  multiple  of  $100,000,  shall be
accompanied by the payment of accrued  interest on the principal  prepaid to the
date of payment and,  after payment of such interest,  shall be applied,  in the
absence of  instruction  by the  Borrower,  first to the  principal of Base Rate
Revolving Loans and then to the principal of Eurodollar Rate Loans.

     ss.3.5. Effect of Prepayments. Amounts of the Revolving Loans prepaid under
ss.3.2 and ss.3.3 may be reborrowed as provided in ss.2.

     ss.4. CERTAIN GENERAL PROVISIONS.

     ss.4.1. Conversion Options.

          (a)  The  Borrower  may  elect  from  time  to  time  to  convert  any
     outstanding Loan to a Loan of another Type;  provided that (i) with respect
     to any such  conversion of a Eurodollar  Rate Loan to a Base Rate Revolving
     Loan, the Borrower shall give the Agent at least three Business Days' prior
     written notice of such election,  and such conversion shall only be made on
     the last day of the Interest  Period with respect to such  Eurodollar  Rate
     Loan;  (ii) with respect to any such  conversion  of a Base Rate  Revolving
     Loan to a Eurodollar  Rate Loan, the Borrower shall give the Agent at least
     four Eurodollar  Business Days' prior written notice of such election,  the
     principal  amount of the Loan so converted shall be in a minimum  aggregate
     amount of $2,000,000 or an integral  multiple of $100,000 in excess thereof
     and, after giving effect to the making of such Loan, there shall be no more
     than five Eurodollar  Rate Loans  outstanding at any one time; and (iii) no
     Loan may be converted into a Eurodollar Rate Loan when any Default or Event
     of Default has occurred and is  continuing.  All or any part of outstanding
     Loans of any Type may be converted  as provided  herein,  provided  that no
     partial  conversion  shall  result  in a Base  Rate  Revolving  Loan  in an
     aggregate  principal  amount of less than  $1,000,000 or a Eurodollar  Rate
     Loan in an aggregate  principal amount of less than $2,000,000 and that the
     aggregate principal amount of each Loan shall be in an integral multiple of


                                      -30-
<PAGE>


$100,000.  On the date on which such  conversion is being made,  each Bank shall
take such action as is necessary to transfer its  Commitment  Percentage of such
Loans to its Domestic  Lending Office or its Eurodollar  Lending office,  as the
case may be. Each Conversion  Request  relating to the conversion of a Base Rate
Revolving  Loan to a Eurodollar  Rate Loan shall be irrevocable by the Borrower.
The Agent  shall  notify  the  Banks  promptly  following  its  receipt  of such
Conversion Request.

          (b) Any  Loans of any  Type may be  continued  as such  Type  upon the
     expiration of an Interest  Period with respect thereto by compliance by the
     Borrower with the notice provisions  contained in ss.4.1;  provided that no
     Eurodollar  Rate Loan may be continued as such when any Default or Event of
     Default  has  occurred  and  is  continuing,  but  shall  be  automatically
     converted  to a Base  Rate  Revolving  Loan on the  last  day of the  first
     Interest  Period  relating  thereto  ending during the  continuance  of any
     Default or Event of Default of which the  officers of the Agent active upon
     the Borrower's  account have actual  knowledge.  The Agent shall notify the
     Banks  promptly when any such  automatic  conversion  contemplated  by this
     ss.4.1 is scheduled to occur.

          (c) In the event  that the  Borrower  does not notify the Agent of its
     election   hereunder  with  respect  to  any  Loan,   such  Loan  shall  be
     automatically  converted  to a Base Rate  Revolving  Loan at the end of the
     applicable Interest Period.

     ss.4.2. Limitation on Eurodollar Rate Loans. Notwithstanding the provisions
of ss.4.1,  the Interest  Periods for Eurodollar Rate Loans shall be selected so
that all Eurodollar  Rate Loans shall  terminate on or before March 17, 1998, in
order to facilitate the syndication of the Revolving Loans.

     ss.4.3. [Intentionally omitted.]

     ss.4.4. [Intentionally omitted.]

     ss.4.5. Funds for Payments.

          (a)  All   payments   of   principal,   interest,   Letter  of  Credit
     reimbursement  payments,  facility fees, Agent's fees, closing fees and any
     other amounts due hereunder or under any of the other Loan Documents  shall
     be made to the  Agent,  for the  respective  accounts  of the Banks and the
     Agent,  as the case may be, at the  Agent's  Head  Office,  in each case in
     immediately  available funds. The Agent is hereby  authorized to charge the
     account of the  Borrower  with BKB,  on the dates  when the amount  thereof
     shall  become due and  payable,  with the amounts of the  principal  of and
     interest on the Loans,  Letter of Credit  reimbursement  payments,  and all
     fees,  charges,  expenses and other  amounts  owing to the Agent and/or the
     Banks under the Loan Documents.


                                      -31-
<PAGE>


          (b) All payments by each Obligor  hereunder and under any of the other
     Loan Documents  shall be made without setoff or  counterclaim  and free and
     clear of and without  deduction  for any taxes,  levies,  imposts,  duties,
     charges, fees, deductions, withholdings,  compulsory loans, restrictions or
     conditions  of any  nature  now  or  hereafter  imposed  or  levied  by any
     jurisdiction  or any  political  subdivision  thereof  or  taxing  or other
     authority  therein  unless such  Obligor is  compelled  by law to make such
     deduction  or  withholding.  If any such  obligation  is  imposed  upon any
     Obligor with respect to any amount  payable by it hereunder or under any of
     the other  Loan  Documents,  the  Obligor  will pay to the  Agent,  for the
     account  of the  Banks or (as the case  may be) the  Agent,  on the date on
     which such  amount is due and  payable  hereunder  or under such other Loan
     Document, such additional amount in Dollars as shall be necessary to enable
     the Banks or the Agent to receive  the same net  amount  which the Banks or
     the Agent would have received on such due date had no such  obligation been
     imposed  upon the Obligor.  The Obligor will deliver  promptly to the Agent
     certificates  or other  valid  vouchers  for all  taxes  or  other  charges
     deducted  from  or paid  with  respect  to  payments  made  by the  Obligor
     hereunder or under such other Loan Document.

     ss.4.6.  Computations.  All  computations  of  interest on the Loans and of
other fees to the extent  applicable  shall be based on a 360-day  year and paid
for the actual  number of days  elapsed.  Except as  otherwise  provided  in the
definition of the term "Interest  Period" with respect to Eurodollar Rate Loans,
whenever a payment  hereunder or under any of the other Loan  Documents  becomes
due on a day that is not a Business  Day, the due date for such payment shall be
extended to the next  succeeding  Business Day, and interest shall accrue during
such extension.  The outstanding amount of the Loans as reflected on the records
of the Agent from time to time shall be considered  prima facie evidence of such
amount.

     ss.4.7. Inability to Determine Eurodollar Rate. In the event that, prior to
the  commencement  of any Interest  Period relating to any Eurodollar Rate Loan,
the Agent shall determine that adequate and reasonable  methods do not exist for
ascertaining  the  Eurodollar  Rate for such  Interest  Period,  the Agent shall
forthwith  give notice of such  determination  (which  shall be  conclusive  and
binding on each Obligor and the Banks) to the  Borrower  and the Banks.  In such
event (a) any Loan  Request  with  respect to  Eurodollar  Rate  Loans  shall be
automatically  withdrawn  and shall be deemed a request for Base Rate  Revolving
Loans and (b) each Eurodollar Rate Loan will  automatically,  on the last day of
the then current Interest Period thereof, become a Base Rate Revolving Loan, and
the  obligations of the Banks to make  Eurodollar  Rate Loans shall be suspended
until the Agent determines that the circumstances giving rise to such suspension
no longer exist, whereupon the Agent shall so notify the Borrower and the Banks.


                                      -32-
<PAGE>


     ss.4.8.  Illegality.  Notwithstanding  any other provisions  herein, if any
present or future law, regulation,  treaty or directive or in the interpretation
or  application  thereof shall make it unlawful for any Bank to make or maintain
Eurodollar   Rate  Loans,   such  Bank  shall  forthwith  give  notice  of  such
circumstances  to the Borrower and thereupon (a) the  commitment of such Bank to
make  Eurodollar  Rate Loans or convert Loans of another type to Eurodollar Rate
Loans  shall  forthwith  be  suspended  and (b) the  Eurodollar  Rate Loans then
outstanding shall be converted automatically to Base Rate Revolving Loans on the
last day of each Interest  Period  applicable to such  Eurodollar  Rate Loans or
within such earlier period as may be required by law.

     ss.4.9.  Additional  Interest.  If any Eurodollar  Rate Loan or any portion
thereof is repaid or is converted to a Base Rate  Revolving  Loan for any reason
on a date which is prior to the last  Eurodollar  Business  Day of the  Interest
Period  applicable to such  Eurodollar  Rate Loan,  the Borrower will pay to the
Agent  for  the  account  of the  Banks  in  accordance  with  their  respective
Commitment Percentages, in addition to any amounts of interest otherwise payable
hereunder,  an amount equal to daily interest for the unexpired  portion of such
Interest  Period on the  Eurodollar  Rate Loan or  portion  thereof so repaid or
converted  at a per annum rate equal to the excess,  if any, of (a) the interest
rate  calculated  on the  basis  of  the  Eurodollar  Rate  applicable  to  such
Eurodollar Rate Loan minus (b) the rate of interest obtainable by the Agent upon
the purchase of debt securities customarily issued by the Treasury of the United
States of America which have a maturity date most closely approximating the last
Eurodollar Business Day of such Interest Period. For purposes of this ss.4.9, if
any Eurodollar  Rate Loan or portion thereof is not outstanding on the first day
of the Interest Period  applicable  thereto other than for reasons  described in
ss.4.7,  the Borrower shall be deemed to have  terminated  such  Eurodollar Rate
Loan or portion thereof.

     ss.4.10.  Additional  Coats,  Etc. If any present or future  applicable law
which  expression,  as used herein,  includes  statutes,  rules and  regulations
thereunder and legally binding interpretations thereof by any competent court or
by any  governmental  or other  regulatory  body or  official  with  appropriate
jurisdiction  charged with the administration or the interpretation  thereof and
requests, directives,  instructions and notices at any time or from time to time
hereafter made upon or otherwise  issued to any Bank or the Agent by any central
bank or other  fiscal,  monetary or other  authority  (whether or not having the
force of law), shall:

          (a)  subject  any Bank or the Agent to any tax,  levy,  impost,  duty,
     charge,  fee,  deduction or  withholding of any nature with respect to this
     Agreement,  the other Loan Documents,  such Bank's  Commitment or the Loans
     (other  than taxes  based upon or measured by the income or profits of such
     Bank or the Agent), or

          (b)  materially  change the basis of  taxation  (except for changes in
     taxes on income or profits) of payments to any Bank of the  principal of or
     the interest on any


                                      -33-
<PAGE>


     Loans or any other amounts  payable to any Bank under this Agreement or the
     other Loan Documents, or

          (c) impose or increase or render  applicable (other than to the extent
     specifically provided for elsewhere in this Agreement) any special deposit,
     reserve,   assessment,   liquidity,   capital  adequacy  or  other  similar
     requirements  (whether or not having the force of law) against  assets held
     by, or deposits in or for the account of, or loans by, or commitments of an
     office of any Bank, or

          (d)  impose  on  any  Bank  or  the  Agent  any  other  conditions  or
     requirements with respect to this Agreement,  the other Loan Documents, the
     Loans,  such Bank's  Commitment,  or any class of loans or  commitments  of
     which  any of the Loans or such  Bank's  Commitment  forms a part;  and the
     result of any of the foregoing is

               (i) to increase the cost to any Bank of making, funding, issuing,
          renewing,  extending  or  maintaining  any of the Loans or such Bank's
          Commitment, or

               (ii) to reduce the amount of principal,  interest or other amount
          payable to such Bank or the Agent  hereunder on account of such Bank's
          Commitment or any of the Loans, or

               (iii) to require such Bank or the Agent to make any payment or to
          forego any  interest  or other sum  payable  hereunder,  the amount of
          which  payment or  foregone  interest  or other sum is  calculated  by
          reference to the gross amount of any sum receivable or deemed received
          by such Bank or the Agent from the Borrower hereunder,

then, and in each such case, the Borrower will, upon demand made by such Bank or
(as the case may be) the Agent at any time and from time to time and as often as
the occasion  therefor may arise,  pay to such Bank or the Agent such additional
amounts as such Bank or the Agent shall determine in good faith and certify in a
notice to the Borrower in reasonable  detail to be sufficient to compensate such
Bank or the Agent for such  additional  cost,  reduction,  payment  or  foregone
interest  or other  sum;  provided,  however,  that the  Borrower  shall  not be
required  under this ss.4.10 to reimburse any Bank or the Agent for  incremental
additions  to  administrative  overhead  and  other  similar  internal  costs of
regulatory  compliance.  Each Bank and the Agent shall  allocate the  additional
costs,  reductions,  payments or foregone interest or other sums for which it is
entitled to  compensation  under this ss.4.10  among its customers in good faith
and on an equitable basis.

     ss.4.11. Capital Adequacy. If any present or future law, governmental rule,
regulation,  policy,  guideline or directive (whether or not having the force of
law) or the  interpretation  thereof by a court or  governmental  authority with
appropriate jurisdiction


                                      -34-
<PAGE>


affects the amount of capital  required or expected to be maintained by any Bank
or any corporation  controlling  such Bank and such Bank  reasonably  determines
that the amount of capital so required or expected to be maintained is increased
by or based upon the  existence  of Loans or Letters of Credit made or deemed to
be made or committed to be made under this Agreement,  then such Bank may notify
the Borrower of such fact,  and the Borrower shall pay to such Bank or the Agent
from time to time on demand, as an additional fee payable hereunder, such amount
as such  Bank  shall  determine  in good  faith and  certify  in a notice to the
Borrower in reasonable  detail to be an amount that will  adequately  compensate
such Bank in light of these circumstances for its increased costs of maintaining
such capital.  Each Bank shall allocate such cost increases  among its customers
in good faith and on an equitable basis.

     ss.4.12.  Indemnity of Obligors. Each Obligor agrees to indemnify each Bank
and to hold each Bank harmless  from and against any loss,  cost or expense that
such Bank may sustain or incur as a  consequence  of (a) default by the Borrower
in payment of the  principal  amount of or any interest on any  Eurodollar  Rate
Loans as and when due and payable,  including  any such loss or expense  arising
from interest or fees payable by such Bank to lenders of funds obtained by it in
order to maintain its Eurodollar  Rate Loans,  or (b) default by the Borrower in
making a borrowing or  conversion  after the Borrower has given (or is deemed to
have given) a Loan Request or a Conversion Request.

     ss.4.13.  Interest on Overdue  Amounts;  Late  Charge.  Overdue  principal,
Letter  of  Credit  reimbursement  payments  and (to  the  extent  permitted  by
applicable  law)  interest on the Loans and all other  overdue  amounts  payable
hereunder or under any of the other Loan Documents  shall bear interest  payable
on demand at a rate per annum equal to four and three-quarters  percent (4 3/4%)
above the Base Rate until such  amount  shall be paid in full  (after as well as
before  judgment).  In addition,  the Borrower  shall pay a Late Charge equal to
three  percent (3 %) of any amount of interest,  Letter of Credit  reimbursement
payments and/or principal payable on the Loans which is not paid within ten days
of the date when due.

     ss.4.14.  Certificate.  A  certificate  setting  forth any amounts  payable
pursuant to ss.4.9, ss.4.10, ss.4.11, ss.4.12 or ss.4.13 and a brief explanation
of such  amounts  which  are  due,  submitted  by any  Bank or the  Agent to the
Borrower, shall be prima facie evidence that such amounts are due and owing.

     ss.5. APPRAISALS

     The Agent shall require biennial Appraisals of each Borrowing Base Property
which is not Eligible Real Estate, which will be ordered,  reviewed and approved
by the  appraisal  department  of the Agent,  in order to determine  the current
Appraised  Value of each such Borrowing Base Property and the Borrower shall pay
to the Agent on demand all reasonable  costs of all such  Appraisals;  provided,
however, that so long as no Default or Event of


                                      -35-
<PAGE>


Default shall have occurred and be continuing  and  regulatory  requirements  or
internal policies of the Agent generally  applicable to real estate loans of the
category made under this Agreement  shall not require more frequent  Appraisals,
the  Borrower  shall not be  required  to pay for an  Appraisal  of  either  any
particular  item of Borrowing Base Property more often than once in any 24-month
period. Such appraisals shall be adjusted as the Agent shall determine.

     At the written request of the Borrower at any time (but not more often than
once in any period of six  consecutive  calendar  months) the Agent shall advise
the  Borrower  of the  current  Appraised  Value of each of the  Borrowing  Base
Properties which are not Eligible Real Estate.

     ss.5A. GUARANTEES.

     ss.5A. 1. Guarantees of Obligations. Each Guarantor unconditionally jointly
and severally guarantees that the Obligations will be performed and will be paid
in full in cash when due and  payable,  whether  at the  stated  or  accelerated
maturity  thereof or otherwise,  this guarantee being a guarantee of payment and
not  of  collectability  and  being  absolute  and  in  no  way  conditional  or
contingent. In the event that any part of the Obligations shall not have been so
paid in full when due and payable, each Guarantor will, immediately upon written
notice by the Agent or, without  notice,  immediately  upon the occurrence of an
Event of Default under ss. 12(i), 12(j) or 12(k), pay or cause to be paid to the
Agent for the  account of each Bank in  accordance  with the  Banks'  respective
Commitment  Percentages  the amount of such  Obligations  which are then due and
payable and unpaid.  The  obligations of each Guarantor  hereunder  shall not be
affected by the invalidity,  unenforceability  or irrecoverability of any of the
Obligations  as against any Obligor,  any other  guarantor  thereof or any other
Person.  For purposes hereof,  the Obligations shall be due and payable when and
as the same shall be due and payable  under the terms of this  Agreement  or any
other Loan Document  notwithstanding the fact that the collection or enforcement
thereof may be stayed or enjoined  under the  federal  Bankruptcy  Code or other
applicable law.

     ss.5A.2.  Continuing Obligation. Each Guarantor acknowledges that the Banks
have entered into this  Agreement  (and,  to the extent that the Banks may enter
into any  future  Loan  Document,  will have  entered  into such  agreement)  in
reliance on this Section 5A being a continuing  irrevocable agreement,  and such
Guarantor  agrees that its guarantee may not be revoked in whole or in part. The
obligations of the Guarantors  hereunder  shall terminate when the commitment of
the Banks to extend credit under this Agreement shall have terminated and all of
the  Obligations  have been  indefeasibly  paid in full in cash and  discharged;
provided, however, that:

          (a) if a claim is made  upon the  Banks at any time for  repayment  or
     recovery  of any  amounts or any  property  received  by the Banks from any
     source on account of


                                      -36-
<PAGE>


     any of the  Obligations  and the  Banks  repay or  return  any  amounts  or
     property so received  (including interest thereon to the extent required to
     be paid by the Banks) or

          (b) if the Banks become liable for any part of such claim by reason of
     (i) any judgment or order of any court or  administrative  authority having
     competent  jurisdiction,  or (ii) any  settlement or compromise of any such
     claim, then the Guarantors shall remain liable under this Agreement for the
     amounts so repaid or  property  so  returned  or the  amounts for which the
     Banks become liable (such amounts being deemed part of the  Obligations) to
     the same extent as if such amounts or property  had never been  received by
     the Banks,  notwithstanding  any termination  hereof or the cancellation of
     any instrument or agreement  evidencing any of the  Obligations.  Not later
     than five days after receipt of notice from the Agent, the Guarantors shall
     jointly  and  severally  pay to the Agent an amount  equal to the amount of
     such  repayment  or  return  for which  the  Banks  have so become  liable.
     Payments  hereunder  by a  Guarantor  may be  required  by the Agent on any
     number of occasions.

     ss.5A.3.  Waivers  with  Respect  to  Obligations.  Except  to  the  extent
expressly required by this Agreement or any other Loan Document,  each Guarantor
waives, to the fullest extent permitted by the provisions of applicable law, all
of the following (including all defenses,  counterclaims and other rights of any
nature based upon any of the following):

          (a)  presentment,  demand for payment and protest of nonpayment of any
     of the Obligations, and notice of protest, dishonor or nonperformance;

          (b) notice of acceptance of this  guarantee and notice that credit has
     been extended in reliance on the Guarantor's guarantee of the Obligations;

          (c) notice of any Default or of any  inability to enforce  performance
     of the  obligations of the Borrower or any other Person with respect to any
     Loan  Document,  notice of any intention to accelerate  the maturity of any
     Obligations and notice of any acceleration of maturity of any Obligations;

          (d) demand for  performance or observance  of, and any  enforcement of
     any  provision  of,  the  Obligations,  this  Agreement  or any other  Loan
     Document or any pursuit or  exhaustion  of rights or remedies  with respect
     thereto or against the Borrower or any Person in respect of the Obligations
     or any  requirement  of diligence or promptness on the part of the Agent or
     the Banks in connection with any of the foregoing;

          (e) any act or  omission  on the part of the Agent or the Banks  which
     may impair or prejudice the rights of the Guarantor,  including subrogation
     rights or rights to obtain  exoneration,  contribution,  indemnification or
     any other reimbursement from


                                    -37-
<PAGE>


     the Borrower or any other Person,  or otherwise operate as a deemed release
     or discharge;

          (f) any action  which harms or impairs the value of, or any failure to
     preserve or protect the value of, any Borrowing Base Property;

          (g) any  statute of  limitations  or any  statute or rule of law which
     provides that the  obligation of a surety must be neither  larger in amount
     nor in other respects more burdensome than the obligation of the principal;

          (h) the  provisions of any "single  action" or  "anti-deficiency"  law
     which would otherwise prevent the Banks from bringing any action, including
     any claim  for a  deficiency,  against  the  Guarantor  before or after the
     Banks'  commencement  or  completion  of any  foreclosure  action,  whether
     judicially,  by  exercise of power of sale or  otherwise,  or any other law
     which would otherwise require any election of remedies by the Banks;

          (i) all  demands  and  notices  of  every  kind  with  respect  to the
     foregoing; and

          (j) to the extent  not  referred  to above,  (x) all  defenses  to the
     payment of the  Obligations  of any kind which the  Borrower or any Nominee
     shall  have  waived as to itself  under  this  Agreement  or any other Loan
     Document and (y) all suretyship  defenses which could otherwise be asserted
     by such Guarantor.

     Each Guarantor  represents that it has obtained the advice of counsel as to
the extent to which  suretyship  and other  defenses may be available to it with
respect to its obligations  hereunder in the absence of the waivers contained in
this  Section  5A.3 and that it is the  intent  of the  Guarantor  to waive  all
suretyship and other defenses of whatever nature (other than payment) that would
otherwise be available to it.

     No delay or  omission  on the part of the Agent or the Banks in  exercising
any right under this Agreement or any other Loan Document or under any guarantee
of the Obligations shall operate as a waiver or relinquishment of such right. No
action  which the :Agent or the Banks or the  Borrower or any other  Obligor may
take or refrain  from  taking with  respect to the  Obligations,  including  any
amendments  thereto or  modifications  thereof or waivers with respect  thereto,
shall  affect  the  provisions  of  this  Agreement  or the  obligations  of the
Guarantors hereunder.  None of the rights of the Agent or the Banks shall at any
time in any way be  prejudiced  or  impaired by any act or failure to act on the
part of any  Obligor,  or by any  noncompliance  by any Obligor  with the terms,
provisions and covenants of this Agreement,  regardless of any knowledge thereof
which the Agent or the Bank may have or otherwise be charged with.


                                      -38-
<PAGE>


     ss.5A.4.  Banks' Power to Waive,  etc. Each  Guarantor  grants to the Banks
full power in their discretion,  without notice to or consent of such Guarantor,
such notice and consent  being  hereby  expressly  waived to the fullest  extent
permitted by  applicable  law, and without in any way affecting the liability of
the Guarantor under its guarantee hereunder:

          (a) To waive compliance with, and any Default under, and to consent to
     any amendment to or  modification or termination of any terms or provisions
     of, or to give any waiver in respect  of,  this  Agreement,  any other Loan
     Document,  the,  Obligations or any guarantee thereof (each as from time to
     time in effect);

          (b) To grant any extensions of the Obligations (for any duration), and
     any other  indulgence  with  respect  thereto,  and to effect  any total or
     partial release (by operation of law or otherwise),  discharge,  compromise
     or settlement  with respect to the obligations of the Obligors or any other
     Person in respect of the  Obligations,  whether or not rights  against  the
     Guarantor under this Agreement are reserved in connection therewith;

          (c) To take security in any form for the  Obligations,  and to consent
     to  the  addition  to or  the  substitution,  exchange,  release  or  other
     disposition  of,  or to deal in any  other  manner  with,  any  part of any
     property  contained in such security  whether or not the property,  if any,
     received  upon the  exercise of such power shall be of a character or value
     the same as or  different  from  the  character  or  value of any  property
     disposed  of,  and to  obtain,  modify or  release  any  present  or future
     guarantees of the  Obligations  and to proceed against any of such security
     or such guarantees in any order;

          (d) To collect or liquidate or realize upon any of the  Obligations in
     any manner or to refrain from  collecting or  liquidating or realizing upon
     any of the Obligations; and

          (e) To extend  credit  under this  Agreement,  any other  Document  or
     otherwise  in such  amount as the  Banks may  determine,  even  though  the
     condition of the Obligors  (financial  or  otherwise  on an  individual  or
     consolidated basis) may have deteriorated since the date hereof

     ss.5A.5.   Information   Regarding  the  Borrower,   etc.  Each   Guarantor
acknowledges  and  agrees  that  it has  made  such  investigation  as it  deems
desirable of the risks  undertaken by it in entering into this  Agreement and is
fully satisfied that it understands all such risks. Each Guarantor hereby waives
any  obligation  which  may now or  hereafter  exist on the part of the Banks to
inform it of the risks being  undertaken by entering  into this  Agreement or of
any changes in such risks and,  from and after the date hereof,  each  Guarantor
undertakes to keep itself informed of such risks and any changes  therein.  Each
Guarantor  hereby  expressly waives any duty which may now or hereafter exist on
the part of the Banks to


                                      -39-
<PAGE>


disclose  to the  Guarantor  any  matter  related to the  business,  operations,
character,  collateral,  credit,  condition (financial or otherwise),  income or
prospects of the REIT, the Borrower or their  affiliates or their  properties or
management,  whether  now or  hereafter  known  by  the  Banks.  Each  Guarantor
represents,  warrants  and  agrees  that  it  assumes  sole  responsibility  for
obtaining from the Borrower all  information  concerning  this Agreement and all
other  Loan  Documents  and all other  information  as to the  Borrower  and its
Affiliates or their  properties or management as such Guarantor  deems necessary
or desirable.

     ss.5A.6.  Certain  Guarantor  Representations.  Each  Guarantor  which is a
Subsidiary of the Borrower represents that (a) it is in its best interest and in
pursuit of the  purposes for which it was  organized as an integral  part of the
business  conducted  and  proposed  to be  conducted  by the  Borrower  and  its
Subsidiaries,  and reasonably  necessary and  convenient in connection  with the
conduct of the business  conducted and proposed to be conducted by it, to induce
the Banks to enter into this  Agreement  and to extend credit to the Borrower by
making the Guarantees  contemplated by this Section 5A, (b) the credit available
hereunder will directly or indirectly inure to its benefit, and (c) by virtue of
the  foregoing  it is receiving at least  reasonably  equivalent  value from the
Banks for its Guarantee. Each Guarantor acknowledges that it has been advised by
the Agent that the Banks are unwilling to enter into this  Agreement  unless the
Guarantees  contemplated  by this  Section  5A are given by it.  Each  Guarantor
represents  that (i) it will not be rendered  insolvent  as a result of entering
into this Agreement,  (ii) after giving effect to the transactions  contemplated
by this Agreement, it will have assets having a fair saleable value in excess of
the amount required to pay its probable  liability on its existing debts as they
become  absolute  and matured,  (iii) it has, and will have,  access to adequate
capital for the conduct of its  business  and (iv) it has the ability to pay its
debts from time to time incurred in connection therewith as such debts mature.

     ss.5A.7. Subrogation. Each Guarantor agrees that, until the Obligations are
paid in full,  it will not  exercise  any right of  reimbursement,  subrogation,
contribution,  offset and other claims against the Obligors  arising by contract
or operation of law in  connection  with any payment made or required to be made
by such  Guarantor  under  this  Agreement.  After  the  payment  in full of the
Obligations,  each Guarantor shall be entitled to exercise  against the Borrower
and  the  other  Obligors  all  such  rights  of   reimbursement,   subrogation,
contribution  and  offset,  and all such other  claims,  to the  fullest  extent
permitted by law.

     ss.5A.8.  General  Subordination.  Each Guarantor covenants and agrees that
after  the  occurrence  of an Event of  Default  all  Indebtedness,  claims  and
liabilities  then or  thereafter  owing by the Borrower or any other  Obligor to
such Guarantor whether arising hereunder or otherwise are hereby subordinated to
the prior payment in full of the  Obligations and are so subordinated as a claim
against such Obligor or any of its assets, whether such claim be in the ordinary
course of  business or in the event of  voluntary  or  involuntary  liquidation,
dissolution,  insolvency or  bankruptcy,  so that no payment with respect to any
such


                                      -40-
<PAGE>


Indebtedness,  claim or liability  will be made or received while any such Event
of Default exists.

     ss.5A.9. Future Subsidiaries; Further Assurances. The REIT and the Borrower
will from time to time cause any present or future Subsidiary of the REIT or the
Borrower  which is an owner of Eligible  Real  Estate,  within 30 days after any
such Person becomes a Subsidiary, that is not a Guarantor to join this Agreement
as  a  Guarantor   pursuant  to  a  joinder  agreement  in  form  and  substance
satisfactory to the Agent. Each Guarantor will, promptly upon the request of the
Agent from time to time, execute,  acknowledge and deliver, and file and record,
all such instruments,  and take all such action, as the Agent deems necessary or
advisable to carry out the intent and purposes of this Section 5A.

     ss.6. REPRESENTATIONS AND WARRANTIES.

     The REIT and the Borrower  represent and warrant to the Agent and the Banks
as follows.

     ss.6.1. Authority, Etc.

          (a) Good  Standing and  Authority of REIT.  The REIT (i) is a Delaware
     corporation duly organized pursuant to its Certificate of Incorporation and
     amendments  thereto  filed with the  Secretary  of State of Delaware and is
     validly existing and in good standing under the laws of Delaware,  (ii) has
     all  requisite  power to own its  property  and conduct its business as now
     conducted  and as presently  contemplated,  (iii) is in good  standing as a
     foreign entity and is duly authorized to do business in The Commonwealth of
     Massachusetts  and in each  other  jurisdiction  where a  failure  to be so
     qualified in such other jurisdiction could have a materially adverse effect
     on the  business,  assets or financial  condition of the REIT and (iv) is a
     real estate  investment  trust in full  compliance with and entitled to the
     benefits of ss.856 of the Code.

          (b) Good  Standing and  Authority  of Borrower.  The Borrower (i) is a
     Delaware limited  partnership duly organized pursuant to the OP Partnership
     Agreement and amendments thereto and its Certificate of Limited Partnership
     and amendments thereto filed with the Secretary of State of Delaware and is
     validly existing and in good standing under the laws of Delaware,  (ii) has
     all  requisite  power to own its  property  and conduct its business as now
     conducted  and as presently  contemplated,  (iii) is in good  standing as a
     foreign entity and is duly authorized to do business in The Commonwealth of
     Massachusetts,  in the jurisdictions in which Borrowing Base Property owned
     by the Borrower is located and in each other  jurisdiction  where a failure
     to be so  qualified  in such other  jurisdiction  could  have a  materially
     adverse  effect on the  business,  assets  or  financial  condition  of the
     Borrower and (iv) is a limited  partnership in full compliance with and not
     required to pay


                                      -41-
<PAGE>


     federal  income taxes under the Code. The Borrower has provided each of the
     Banks with a true and complete copy of each of the OP Partnership Agreement
     and the Initial Limited Partner Contribution  Agreement,  each as in effect
     on the Effective Date.

          (c)  Nominees.  Each of the Nominees and each other  Subsidiary of the
     REIT and/or the Borrower (i) is a corporation, limited partnership, limited
     liability  company or trust duly  organized  under the laws of its State of
     organization  and is validly  existing and in good standing  under the laws
     thereof,  (ii) has all requisite  power to own its property and conduct its
     business as now  conducted  and as presently  contemplated  and (iii) is in
     good standing and is duly  authorized  to do business in each  jurisdiction
     where  Borrowing  Base  Property  held by it is  located  and in each other
     jurisdiction  where a failure to be so  qualified  could have a  materially
     adverse effect on the business,  assets or financial  condition of the REIT
     or the Borrower on such Nominee or Subsidiary.

          (d)  Authorization.  The execution,  delivery and  performance of this
     Agreement and the other Loan Documents to which the REIT or the Borrower or
     a  Subsidiary  or  Nominee  is to  become  a  party  and  the  transactions
     contemplated  hereby and thereby (i) are within the  authority  of the REIT
     and the Borrower and any party thereto,  (ii) have been duly  authorized by
     all necessary proceedings on the part of the REIT and the Borrower and each
     such  Subsidiary  or Nominee,  (iii) do not conflict  with or result in any
     breach  or  contravention  of  any  provision  of  law,  statute,  rule  or
     regulation  to which the REIT or the Borrower or any  Subsidiary or Nominee
     is subject or any  judgment,  order,  writ,  injunction,  license or permit
     applicable  to the REIT or the  Borrower or any  Subsidiary  or Nominee and
     (iv)  do  not  conflict  with  any  provision  of  the  charter  documents,
     partnership  agreement,  declaration of trust or other charter documents or
     bylaws of, or any agreement or other  instrument  binding upon, the REIT or
     the Borrower or any Subsidiary or Nominee.

          (e)  Enforceability.  The execution and delivery of this Agreement and
     the  other  Loan  Documents  to  which  the  REIT  or the  Borrower  or any
     Subsidiary  or Nominee party thereto is or is to become a party will result
     in valid and legally  binding  obligations of the REIT and the Borrower and
     each  such  Subsidiary  and  Nominee  enforceable  against  each of them in
     accordance  with the respective  terms and  provisions  hereof and thereof,
     except  as   enforceability   is   limited   by   bankruptcy,   insolvency,
     reorganization, moratorium or other laws relating to or affecting generally
     the  enforcement  of  creditors'  rights  and  except  to the  extent  that
     availability of the remedy of specific  performance or injunctive relief is
     subject to the discretion of the court before which any proceeding therefor
     may be brought.

     ss.6.2. Governmental Approvals. The execution, delivery and performance by
the REIT and the Borrower and any  Subsidiary  or Nominee of this  Agreement and
the  other  Loan  Documents  to  which  the  REIT or the  Borrower  or any  such
Subsidiary or Nominee


                                      -42-
<PAGE>


party  thereto  is or is to  become a party  and the  transactions  contemplated
hereby and thereby do not require  the  approval or consent of, or filing  with,
any  governmental  agency or authority,  except as may be required in connection
with environmental transfer statutes relating to Real Estate acquisitions.

     ss.6.3.  Title to Properties;  Leases.  Except as indicated on Schedule 6.3
hereto, the Borrower and its Subsidiaries (or if applicable in the case of Joint
Venture  Assets,  the  relevant  joint  venture or other  entity) own all of the
assets  relating  to the  Borrowing  Base  Properties,  subject  to no rights of
others,  including any mortgages,  leases,  conditional sales agreements,  title
retention agreements,  liens or other encumbrances except Permitted Liens (or in
the case of property  owned by such a joint venture or other  entity,  rights of
others that would be Permitted  Liens if such joint venture or other entity were
a Subsidiary).

     ss.6.4. Financial Statements.  The following financial statements have been
furnished to each of the Banks:

          (a) The consolidated balance sheet of the REIT and its Subsidiaries as
     of the Balance  Sheet Date and their  related  consolidated  statements  of
     income and cash flows for the fiscal  year then  ended,  accompanied  by an
     auditor's  report  prepared  without  qualification  by  Coopers & Lybrand,
     L.L.P.  or another  "Big Five"  accounting  firm.  Such  balance  sheet and
     statements of income and cash flows have been  prepared in accordance  with
     generally accepted  accounting  principles and fairly present the financial
     condition  of the REIT as at the close of business on the date  thereof and
     the results of  operations  for the fiscal  year then  ended.  There are no
     contingent  liabilities  of the Borrower or any of its  Subsidiaries  as of
     such date involving material amounts,  known to the officers of the REIT or
     the  Borrower or any of their  Subsidiaries  not  disclosed in said balance
     sheet and the related notes thereto.

          (b)  An  unaudited   consolidated   balance  sheet  and  an  unaudited
     consolidated  statement  of  income  and  cash  flows  of the  REIT and its
     Subsidiaries  for each of the fiscal  quarters  of the REIT ended March 31,
     June 30 and September 30, 1997 certified by REIT's chief financial or chief
     accounting  officer to have been  prepared  in  accordance  with  generally
     accepted   accounting   principles   consistent  with  those  used  in  the
     preparation  of  the  annual  audited  statements   delivered  pursuant  to
     subsection (a) above and to fairly  present the financial  condition of the
     REIT and its  Subsidiaries as at the close of business on the dates thereof
     and the results of operations  for the fiscal  quarters then ended (subject
     to year-end adjustments).  There are no contingent liabilities of the REIT,
     the  Borrower  or any of their  Subsidiaries  as of such dates known to the
     officers  of the REIT or the  Borrower  or any of their  Subsidiaries  that
     involve  material  amounts but are not disclosed in such balance sheets and
     the related notes thereto.


                                      -43-
<PAGE>


          (c) An unaudited statement of operating income for each Borrowing Base
     Property for the fiscal year ended December 31, 1997  satisfactory  in form
     to the Agent and  certified  by the  Borrower's  chief  financial  or chief
     accounting  officer  as  fairly  presenting  the  operating  income of such
     parcels for such period.

     ss.6.5. No Material  Changes,  Etc. Since the Balance Sheet Date, there has
occurred no materially adverse change in the financial  condition or business of
the REIT and its  Subsidiaries  taken as a whole as shown on or reflected in the
consolidated  balance  sheet of the REIT as of the Balance  Sheet  Date,  or its
consolidated  statement  of income or cash flows for the fiscal year then ended,
other than  changes in the  ordinary  course of  business  that have not had any
materially  adverse  effect  either  individually  or in  the  aggregate  on the
business or financial condition of the REIT or the Borrower.

     ss.6.6. Franchises, Patents, Copyrights, Etc. The REIT and its Subsidiaries
possess all franchises,  patents, copyrights,  trademarks, trade names, licenses
and permits, and rights in respect of the foregoing, adequate for the conduct of
their business  substantially  as now conducted  without known conflict with any
rights of others.

     ss.6.7. Litigation.  Except as stated on Schedule 6.7 there are no actions,
suits,  proceedings or investigations of any kind pending or threatened  against
the REIT or the  Borrower or any of their  Subsidiaries  or Nominees  before any
court, tribunal or administrative agency or board that, if adversely determined,
might, either in any case or in the aggregate,  materially  adversely affect the
properties,  assets, financial condition or business of the REIT or the Borrower
or  materially  impair  the  right  of  the  REIT  or  the  Borrower  and  their
Subsidiaries or Nominees to carry on business  substantially as now conducted by
them,  or  result  in  any  substantial  liability  not  adequately  covered  by
insurance,  or for which  adequate  reserves are not  maintained  on the balance
sheet of the REIT  referred to in ss.6.4(a),  or which  question the validity of
this Agreement or any of the other Loan Documents,  or any action taken or to be
taken pursuant hereto or thereto.

     ss.6.8. No Materially Adverse Contracts,  Etc. Neither the Borrower nor any
of their Subsidiaries or Nominees is subject to any charter,  corporate or other
legal restriction,  or any judgment,  decree, order, rule or regulation that has
or is  expected  in the  future  to  have a  materially  adverse  effect  on the
business, assets or financial condition of the REIT or the Borrower. Neither the
REIT nor the  Borrower nor any of their  Subsidiaries  or Nominees is a party to
any  contract  or  agreement  that has or is  expected,  in the  judgment of the
officers of the REIT or the Borrower,  to have any materially  adverse effect on
the business of any of them.

     ss.6.9. Compliance With Other Instruments,  Laws, Etc. Neither the REIT nor
the  Borrower nor any of their  Subsidiaries  or Nominees is in violation of any
provision  of  its  charter,   partnership  agreement  or  other  organizational
documents, by-laws, or any agreement or instrument to which it may be subject or
by which it or any of its properties


                                      -44-
<PAGE>


may be  bound  or  any  decree,  order,  judgment,  statute,  license,  rule  or
regulation,  in any of the foregoing  cases in a manner that could result in the
imposition  of  substantial  penalties or materially  and  adversely  affect the
financial condition, properties or business of the REIT or the Borrower or their
Subsidiaries or Nominees.

     ss.6.10.  Tax  Status.  The  REIT  and  the  Borrower  and  each  of  their
Subsidiaries and Nominees (a) has made or filed all federal and state income and
all other tax returns,  reports and declarations required by any jurisdiction to
which it is subject,  (b) has paid all taxes and other governmental  assessments
and  charges  shown  or  determined  to be  due on  such  returns,  reports  and
declarations,  except  those being  contested  in good faith and by  appropriate
proceedings and (c) has set aside on its books  provisions  reasonably  adequate
for the payment of all taxes for periods subsequent to the periods to which such
returns,  reports  or  declarations  apply.  There  are no  unpaid  taxes in any
material amount claimed to be due by the taxing  authority of any  jurisdiction,
and the  officers  of the REIT and the  Borrower  know of no basis  for any such
claim.

     ss.6.11.  No Event of Default.  No Default or Event of Default has occurred
and is continuing.

     ss.6.12.  Holding Company and Investment Company Acts. Neither the REIT nor
the Borrower nor any of their  Subsidiaries or Nominees is a "holding  company",
or a  "subsidiary  company"  of a  "holding  company",  or an  "affiliate"  of a
"holding  company",  as such terms are  defined in the  Public  Utility  Holding
Company  Act of  1935;  nor is it an  "investment  company",  or an  "affiliated
company" or a "principal  underwriter" of an "investment company", as such terms
are defined in the Investment Company Act of 1940.

     ss.6.13.  Absence of UCC Financing Statements,  Etc. Except with respect to
Permitted Liens, there is no financing  statement,  security agreement,  chattel
mortgage,  real estate  mortgage or other  document  filed or recorded  with any
filing records, registry, or other public office, that purports to cover, affect
or give notice of any present or possible  future lien on, or security  interest
or  security  title  in,  any  property  of the  REIT or the  Borrower  or their
Subsidiaries or Nominees or rights thereunder.

     ss.6.14.  Setoff,  Etc. The Obligations and the rights of the Agent and the
Banks with  respect to the  Obligations  are not subject to any setoff,  claims,
withholdings or other defenses. In the case of all Borrowing Base Property owned
directly  by the  Borrower,  the  Borrower is the owner of such  Borrowing  Base
Property free from any lien,  security  interest,  encumbrance or other claim or
demand,  except for Permitted Liens. In the case of all the remaining  Borrowing
Base Property, the Borrower is the sole beneficial owner thereof and its Nominee
holds such Borrowing Base Property on behalf of the Borrower free from any lien,
security  interest,  encumbrance or other claim or demand,  except for Permitted
Liens.


                                      -45-
<PAGE>


     ss.6.15. [Intentionally Omitted].

     ss.6.16. Pension Plans. Each Plan (other than a Multiemployer Plan) and, to
the  knowledge  of the  REIT and the  Borrower,  each  Multiemployer  Plan is in
material  compliance with the applicable  provisions of ERISA and the Code. Each
Multiemployer  Plan and each Plan that  constitutes a "defined benefit plan" (as
defined in ERISA) are set forth in Schedule  6.16.  The REIT,  the  Borrower and
each ERISA  Affiliate  have met all of the funding  standards  applicable to all
Plans that are not  Multiemployer  Plans,  and no  condition  exists which would
permit  the  institution  of  proceedings  to  terminate  any Plan that is not a
Multiemployer  Plan under  section 4042 of ERISA.  To the best  knowledge of the
REIT  and the  Borrower,  no  Plan  that is a  Multiemployer  Plan is  currently
insolvent  or in  reorganization  or has been  terminated  within the meaning of
ERISA.

     ss.6.17.  Regulations U and X. No portion of any Loan is to be used for the
purpose of  purchasing  or carrying any "margin  security" or "margin  stock" as
such  terms are used in  Regulations  U and X of the Board of  Governors  of the
Federal Reserve System, 12 C.F.R. Parts 221 and 224.

     ss.6.18. Environmenta1 Compliance. The REIT and the Borrower have taken all
commercially  reasonable steps to investigate the past and present condition and
usage of the Real Estate and the  operations  conducted  thereon and, based upon
such investigation, make the following representations and warranties.

          (a) With  respect  to the  Borrowing  Base  Property,  and to the best
     knowledge  of the REIT and the  Borrower  with  respect  to all other  Real
     Estate,  none of the REIT, the Borrower,  their Subsidiaries or Nominees or
     any operator of the Real Estate, or any operation thereon, is in violation,
     or alleged violation, of any judgment, decree, order, law, license, rule or
     regulation   pertaining  to  environmental   matters,   including   without
     limitation,  those arising under the Resource Conservation and Recovery Act
     ("RCRA"),  the  Comprehensive  Environmental  Response,   Compensation  and
     Liability Act of 1980 as amended ("CERCLA"),  the Superfund  Amendments and
     Reauthorization  Act of 1986  ("SARA"),  the Federal  Clean Water Act,  the
     Federal  Clean Air Act, the Toxic  Substances  Control Act, or any state or
     local  statute,  regulation,  ordinance,  order or decree  relating  to the
     environment  (hereinafter  "Environmental  Laws"), which violation involves
     the Borrowing  Base Property or involves other Real Estate and would have a
     material  adverse  effect on the  environment  or the  business,  assets or
     financial condition of the REIT or the Borrower.

          (b) Neither the REIT nor the Borrower nor any of its  Subsidiaries  or
     Nominees  has  received  written  notice  from any third  party  including,
     without limitation, any federal, state or local governmental authority, (i)
     that it has been identified by the United States  Environmental  Protection
     Agency ("EPA) as a


                                      -46-
<PAGE>


     potentially responsible party under CERCLA with respect to a site listed on
     the National  Priorities List, 40 C.F.R.  Part 300 Appendix B (1986);  (ii)
     that any  hazardous  waste,  as  defined  by 42  U.S.C.  ss.  9601(5),  any
     hazardous substances as defined by 42 U.S.C. ss. 9601(14), any pollutant or
     contaminant as defined by 42 U.S.C.  ss.9601(33)  or any toxic  substances,
     oil or hazardous  materials or other  chemicals or substances  regulated by
     any  Environmental  Laws ("Hazardous  Substances")  which it has generated,
     transported  or disposed of have been found at any site at which a federal,
     state or local  agency or other  third party has  conducted  or has ordered
     that the  REIT,  the  Borrower  or any of their  Subsidiaries  or  Nominees
     conduct a remedial investigation, removal or other response action pursuant
     to any Environmental  Law; or (iii) that it is or shall be a named party to
     any claim, action, cause of action,  complaint,  or legal or administrative
     proceeding (in each case, contingent or otherwise) arising out of any third
     party's  incurrence  of  costs,  expenses,  losses or  damages  of any kind
     whatsoever in connection with the release of Hazardous Substances.

          (c) With  respect  to the  Borrowing  Base  Property,  and to the best
     knowledge  of the REIT and the  Borrower  with  respect  to all other  Real
     Estate, except as set forth in the environmental site assessment reports of
     an  Environmental  Engineer  provided to the Agent  prior to the  Effective
     Date:  (i) no  portion of the Real  Estate has been used for the  handling,
     processing,   storage  or  disposal  of  Hazardous   Substances  except  in
     accordance with applicable  Environmental  Laws, and no underground tank or
     other underground storage receptacle for Hazardous Substances is located on
     any  portion  of the  Borrowing  Base  Property;  (ii) in the course of any
     activities  conducted by the REIT,  the  Borrower,  their  Subsidiaries  or
     Nominees or the operators of their properties, no Hazardous Substances have
     been  generated or are being used on the Real Estate  except in  accordance
     with applicable Environmental Laws; (iii) there has been no past or present
     releasing,   spilling,  leaking,  pumping,  pouring,  emitting,   emptying,
     discharging,  injecting,  escaping,  disposing or dumping (a  "Release") or
     threatened  Release of  Hazardous  Substances  on,  upon,  into or from the
     Borrowing  Base  Property,  or,  to the best  knowledge  of the REIT or the
     Borrower,  on, upon,  into or from the other  properties of the Borrower or
     its Subsidiaries or Nominees, which Release would in the case of such other
     properties  have a material  adverse effect on the value of any of the Real
     Estate  or  adjacent  properties  or the  environment;  (iv)  to  the  best
     knowledge  of the REIT or the  Borrower,  there have been no  Releases  on,
     upon,  from or into any real  property  in the  vicinity of any of the Real
     Estate which, through soil or groundwater  contamination,  may have come to
     be located on, and which would have a material  adverse effect on the value
     of,  the Real  Estate;  and (v) any  Hazardous  Substances  that  have been
     generated on any of the Real Estate have been transported  off-site only by
     carriers having an identification number issued by the EPA or approved by a
     state or  local  environmental  regulatory  authority  having  jurisdiction
     regarding the  transportation  of such substance and, to the best knowledge
     of the REIT and the Borrower without independent investigation,  treated or
     disposed


                                      -47-
<PAGE>


     of only by treatment or disposal  facilities  maintaining  valid permits as
     required under all applicable  Environmental  Laws, which  transporters and
     facilities  have  been and are,  to the best  knowledge  of the REIT or the
     Borrower,   operating  in  compliance  with  such  permits  and  applicable
     Environmental Laws.

          (d) Neither the REIT nor the Borrower nor any of their Subsidiaries or
     Nominees  nor  any  of  the  Borrowing  Base  Property  is  subject  to any
     applicable   Environmental  Law  requiring  the  performance  of  Hazardous
     Substances  site  assessments,  or the removal or  remediation of Hazardous
     Substances,  or the  giving  of notice  to any  governmental  agency or the
     recording  or  delivery  to other  Persons of an  environmental  disclosure
     document or  statement by virtue of the  transactions  set forth herein and
     contemplated  hereby,  or as a condition to the  recording of any mortgage,
     deed of trust or deed in fee on or to such  Borrowing  Base  Property or to
     the effectiveness of any other transactions  contemplated hereby, except as
     may be required in connection with environmental transfer statutes relating
     to Real Estate acquisitions.

     ss.6.19.  Subsidiaries  and  Nominees.  Schedule 6.19 sets forth all of the
Subsidiaries  and  Nominees  of  the  REIT  and  the  Borrower.   The  form  and
jurisdiction of organization of each of the Subsidiaries  and Nominees,  and the
ownership  interest therein of the REIT and the Borrower,  are set forth in said
Schedule 6.19.

     ss.6.20. [Intentionally omitted].

     ss.6.21.  Loan Documents.  All of the representations and warranties of the
REIT,  the Borrower and the other  Obligors made in the other Loan  Documents or
any document or instrument delivered to the Agent or the Banks pursuant to or in
connection  with any of such Loan Documents are true and correct in all material
respects.

     ss.6.22.  Borrowing  Base  Property.  The  REIT and the  Borrower  make the
following   representations  and  warranties   concerning  each  Borrowing  Base
Property.

          (a) Off-Site Utilities. All water, sewer, electric, gas, telephone and
     other  utilities are installed to the property  lines of the Borrowing Base
     Property and, except in the case of drainage  facilities,  are connected to
     the Building located thereon with valid permits and are adequate to service
     the Building in compliance with applicable law.

          (b) Access,  Etc. The streets abutting the Borrowing Base Property are
     public  roads,  to which the  Borrowing  Base Property has direct access by
     trucks and other motor  vehicles  and by foot,  or are  private  ways (with
     direct  access by trucks  and other  motor  vehicles  and by foot to public
     roads) to which the Borrowing Base Property has direct access.  All private
     ways providing access to the Borrowing Base Property are


                                      -48-
<PAGE>


     zoned in a manner which will permit  access to the Building  over such ways
     by trucks and other commercial and industrial vehicles.

          (c)  Independent  Building.  The Building is fully  independent in all
     respects including, without limitation, in respect of structural integrity,
     heating, ventilating and air conditioning,  plumbing,  mechanical and other
     operating and  mechanical  systems,  and  electrical,  sanitation and water
     systems,  all of which are connected directly to off-site utilities located
     in public  streets  or ways.  The  Building  is  located  on a lot which is
     separately assessed for purposes of real estate tax assessment and payment.
     The Building,  all Building  Service  Equipment and all paved or landscaped
     areas related to or used in connection with the Building are located wholly
     within the perimeter  lines of the lot or lots on which the Borrowing  Base
     Property is located.

          (d) Condition of Building; No Asbestos.  There are no material defects
     in the roof,  foundation,  structural  elements  and  masonry  walls of the
     heating, ventilating and air conditioning,  electrical, sprinkler, plumbing
     or  other  mechanical  systems  or its  Building  or its  Building  Service
     Equipment.  No  asbestos  is  located  in or on the  Building,  except  for
     nonfriable  asbestos or contained friable asbestos which is being monitored
     and/or   remediated  in   accordance   with  the   recommendations   of  an
     Environmental  Engineer. An asbestos operation and maintenance program must
     be instituted and maintained for all asbestos-containing  materials located
     in such Borrowing Base Property to the extent required by applicable law or
     by the Environmental Engineer.

          (e)   Building   Compliance   with  Law.  The  Building  as  presently
     constructed  does not  violate  any  applicable  federal  or  state  law or
     governmental  regulation,  or any  local  ordinance,  order or  regulation,
     including but not limited to laws,  regulations,  or ordinances relating to
     zoning,  building use and occupancy,  subdivision control, fire protection,
     health and sanitation.  The Building  complies with applicable  zoning laws
     and regulations and is not a so-called  non-conforming use. The zoning laws
     permit use of the  Building  for its current  use.  There is such number of
     parking  spaces on the lot or lots on which the Borrowing  Base Property is
     located as is adequate under the zoning laws and  regulations to permit use
     of the Building for its current use. Such Borrowing Base Property is not in
     violation of the federal  Americans with Disabilities Act, and the Borrower
     or its  Nominee  has made  reasonable  efforts to comply with such Act with
     respect to such Borrowing Base Property.

          (f) No Required Real Property Consents, Permits, Etc. Neither the REIT
     nor the Borrower nor any  Subsidiary or Nominee has received any notice of,
     or has any  knowledge  of,  any  approvals,  consents,  licenses,  permits,
     utility  installations  and  connections  (including,  without  limitation,
     drainage  facilities),  curb cuts and  street  openings,  required  for the
     maintenance, operation, servicing and use of the Borrowing Base Property or
     the Building for its current use which have not been granted,


                                     -49-
<PAGE>


     effected,  or performed  and  completed (as the case may be) or any fees or
     charges  therefor  which  have  not been  fully  paid.  No such  approvals,
     consents,  permits or licenses (including,  without limitation, any railway
     siding agreements) will terminate, or become void or voidable or terminable
     on any  foreclosure  sale  of the  Borrowing  Base  Property.  To the  best
     knowledge of the REIT and the Borrower,  there are no outstanding  notices,
     suits,  orders,  decrees or judgments relating to zoning,  building use and
     occupancy, fire, health, sanitation or other violations affecting, against,
     or with respect to, the Borrowing Base Property or any part thereof

          (g) Insurance. Neither the REIT nor the Borrower nor any Subsidiary or
     Nominee has  received  any notice  from any insurer or its agent  requiring
     performance  of any work with  respect to the  Borrowing  Base  Property or
     canceling  or  threatening  to  cancel  any  policy of  insurance,  and the
     Borrowing  Base Property  complies with the  requirements  of all insurance
     carriers.

          (h) Real Property Taxes; Special  Assessments.  There are no unpaid or
     outstanding  real  estate or other taxes or  assessments  on or against the
     Borrowing  Base Property or any part thereof which are payable by the REIT,
     the Borrower or any  Subsidiary  or Nominee  (except only real estate taxes
     not yet required to be paid under ss.7.8). There have been delivered to the
     Agent  true and  correct  copies  of the real  estate  tax  bills  for each
     Borrowing  Base Property for the three fiscal tax years  preceding the date
     of inclusion of such property in such Borrowing Base Property. There are no
     betterment  assessments or other special assessments presently pending with
     respect to any portion of the Borrowing Base Property, and neither the REIT
     nor the Borrower nor any  Subsidiary  or Nominee has received any notice of
     any such special assessment being contemplated,  except such assessments as
     are  included  in the  Borrower's  capital  expenditures  budget  for  such
     Borrowing Base Property.

          (i)  Historic  Status.  The  Building is not a historic  structure  or
     landmark  and neither  the  Building  nor the  Borrowing  Base  Property is
     located  within any historic  district  pursuant to any  federal,  state or
     local law or governmental regulation.

          (j) Eminent  Domain.  There are no  material  pending  eminent  domain
     proceedings  against the Borrowing Base Property or any part thereof,  and,
     to the  knowledge  of the REIT,  the Borrower  and their  Subsidiaries  and
     Nominees,  no such proceedings are presently  threatened or contemplated by
     any taking authority.

          (k)  Leases.  An  accurate  and  complete  Rent Roll as of the date of
     inclusion of each  Borrowing  Base Property in the Borrowing  Base (or such
     other  recent date as may be  acceptable  to the Agent) with respect to all
     Leases of any portion of the  Borrowing  Base Property has been provided to
     the Agent. The Leases reflected on such Rent Roll constitute as of the date
     thereof  the sole  agreements  and  understandings  relating  to leasing or
     licensing of space at such Borrowing Base Property and in the


                                      -50-
<PAGE>


     Building relating thereto. There are no occupancies,  rights, privileges or
     licenses in or to any Borrowing Base Property or portion thereof other than
     pursuant to the Leases reflected in Rent Rolls previously  furnished to the
     Agent for such  Borrowing Base  Property.  The Rent Rolls  furnished to the
     Agent  accurately  and  completely  set  forth  all  rents  payable  by and
     security, if any, deposited by tenants, no tenant having paid more than one
     month's  rent in  advance.  All  tenant  improvements  or work to be  done,
     furnished  or paid for by the REIT or the  Borrower  or any  Subsidiary  or
     Nominee,  or credited or allowed to a tenant,  for, or in connection  with,
     the  Building  pursuant  to any  Lease has been  completed  and paid for or
     provided for in a manner  satisfactory to the Agent.  No material  leasing,
     brokerage  or like  commissions,  fees or payments are due from the REIT or
     the Borrower or any Subsidiary or Nominee in respect of the Leases.

          (1) Other Material Real Property Agreements;  No Options. There are no
     material agreements pertaining to the Borrowing Base Property, any Building
     thereon or the  operation or  maintenance  of either  thereof other than as
     described in this Agreement  (including the Schedules  hereto) or otherwise
     disclosed  in  writing  to the  Agent  and  the  Banks  by the  REIT or the
     Borrower;  and no person or entity has any right or option to  acquire  the
     Borrowing Base Property on any Building  thereon or any portion  thereof or
     interest therein.

     ss.7. AFFIRMATIVE COVENANTS.

     The REIT and the Borrower  covenant and agree that,  so long as any Loan or
Note is outstanding or any Bank has any obligation to make any Loans:

     ss.7.1.  Punctual  Payment.  The Borrower will duly and  punctually  pay or
cause to be paid the  principal  and  interest  on the  Loans,  Letter of Credit
reimbursement payments and all interest and fees provided for in this Agreement,
all in accordance  with the terms of this Agreement and the Notes as well as all
other sums owing pursuant to the Loan Documents.

     ss.7.2.  Maintenance  of  Office.  Each of the REIT and the  Borrower  will
maintain its chief executive office in Boston,  Massachusetts,  or at such other
place  in the  United  States  of  America  as the  REIT or the  Borrower  shall
designate  upon  written  notice  to the  Agent and the  Banks,  where  notices,
presentations  and demands to or upon the REIT or the Borrower in respect of the
Loan Documents may be given or made.

     ss.7.3.  Records and Accounts. The REIT and the Borrower will (a) keep, and
cause each of their Subsidiaries to keep, true and accurate records and books of
account in which full,  true and correct entries will be made in accordance with
generally accepted accounting  principles and (b) maintain adequate accounts and
reserves for all taxes (including  income taxes),  depreciation and amortization
of its properties and the properties of their  Subsidiaries,  contingencies  and
other reserves.


                                      -51-
<PAGE>


     ss.7.4.  Financial Statements.  Certificates and Information.  The REIT and
Borrower will deliver to each of the Banks:

          (a) as soon as  practicable,  but in any event not later  than 90 days
     after the end of each  fiscal year of the REIT,  the  audited  consolidated
     balance sheet of the REIT and its Subsidiaries at the end of such year, and
     the related  audited  consolidated  statements of income and cash flows for
     such year,  each  setting  forth in  comparative  form the  figures for the
     previous  fiscal year,  all such  statements  to be in  reasonable  detail,
     prepared in accordance with generally accepted accounting  principles,  and
     accompanied  by an  auditor's  report  prepared  without  qualification  by
     Coopers & Lybrand,  L.L.P.  or by another "Big Five"  accounting  firm, the
     Form 10-K filed with the SEC (unless the SEC has approved an extension,  in
     which event the REIT and the Borrower will deliver to the Agent and each of
     the Banks a copy of the Form 10-K simultaneously with delivery to the SEC),
     and any  other  information  the  Banks may need to  complete  a  financial
     analysis of the REIT and the Borrower,  together  with a written  statement
     from  such  accountants  to the  effect  that they have read a copy of this
     Agreement,   and  that,  in  making  the  examination   necessary  to  said
     certification,  they have  obtained no knowledge of any Default or Event of
     Default,  or, if such accountants shall have obtained knowledge of any then
     existing  Default or Event of Default they shall disclose in such statement
     any such Default or Event of Default;  provided that such accountants shall
     not be liable to the Agent or the Banks for failure to obtain  knowledge of
     any Default or Event of Default;

          (b) as soon as  practicable,  but in any event not later  than 45 days
     after  the end of each of the  first  three  fiscal  quarters  of the REIT,
     copies  of the  unaudited  consolidated  balance  sheet of the REIT and its
     Subsidiaries  as at the end of such  quarter,  and  the  related  unaudited
     consolidated  statements  of income and cash  flows for the  portion of the
     REIT's fiscal year then elapsed,  all in reasonable  detail and prepared in
     accordance  with generally  accepted  accounting  principles  (which may be
     provided by inclusion in the Form 10-Q of the REIT for such period provided
     pursuant to subsection  (e) below),  together with a  certification  by the
     principal  financial or accounting officer of the REIT that the information
     contained  in such  financial  statements  fairly  presents  the  financial
     position of the REIT and its  Subsidiaries on the date thereof  (subject to
     year-end adjustments);

          (c) as soon as  practicable,  but in any event not later  than 90 days
     after the end of each fiscal year of the Borrower, the audited consolidated
     balance sheet of the Borrower and its Subsidiaries at the end of such year,
     and the related  audited  consolidated  statements of income and cash flows
     for such year,  each setting forth in comparative  form the figures for the
     previous  fiscal year,  all such  statements  to be in  reasonable  detail,
     prepared in accordance with generally accepted accounting  principles,  and
     accompanied  by an  auditor's  report  prepared  without  qualification  by
     Coopers & Lybrand, L.L.P. or by another "Big Five" accounting firm, and any
     other


                                      -52-
<PAGE>


     information  the Banks may need to  complete a  financial  analysis  of the
     Borrower,  together with a written  statement from such  accountants to the
     effect that they have read a copy of this  Agreement,  and that,  in making
     the  examination  necessary to said  certification,  they have  obtained no
     knowledge of any Default or Event of Default, or, if such accountants shall
     have obtained  knowledge of any then  existing  Default or Event of Default
     they shall disclose in such statement any such Default or Event of Default;
     provided  that  such  accountants  shall  not be liable to the Agent or the
     Banks for failure to obtain knowledge of any Default or Event of Default;

          (d) as soon as  practicable,  but in any event not later  than 45 days
     after the end of each of the first three fiscal  quarters of the  Borrower,
     copies of the unaudited  consolidated balance sheet of the Borrower and its
     Subsidiaries  as at the end of such  quarter,  and  the  related  unaudited
     consolidated  statements  of income and cash  flows for the  portion of the
     Borrower's fiscal year then elapsed,  all in reasonable detail and prepared
     in accordance with generally accepted accounting principles,  together with
     a  certification  by the principal  financial or accounting  officer of the
     Borrower that the information contained in such financial statements fairly
     presents the financial position of the Borrower and its Subsidiaries on the
     date thereof (subject to year-end adjustments);

          (e) as soon as  practicable,  but in any event not later  than 45 days
     after the end of each of the first  three  fiscal  quarters  of the REIT in
     each  year,  copies of Form 10-Q  filed  with the SEC  (unless  the SEC has
     approved an extension in which event the REIT and the Borrower will deliver
     such  copies  of the  Form  10-Q  to  the  Agent  and  each  of  the  Banks
     simultaneously with delivery to the SEC);

          (f) as soon as  practicable,  but in any event not later  than 45 days
     after the end of each  fiscal  quarter  of the REIT  (including  the fourth
     fiscal quarter in each year), copies of an income statement for such fiscal
     quarter for each Borrowing Base  Property,  prepared on a basis  consistent
     with  the  statement  furnished  pursuant  to  ss.6.4(c)  together  with  a
     certification by the Borrower's chief financial or chief accounting officer
     that the information contained in such income statement fairly presents the
     results of  operations of the Real Estate for such period;  provided,  that
     capital  expenditures  information need not be included with respect to any
     parcel of Real Estate other than  Borrowing Base Property or other Eligible
     Real Estate;

          (g)  simultaneously  with the  delivery  of the  financial  statements
     referred to in  subsections  (a) and (b) above,  a statement (a "Compliance
     Certificate") certified by the principal financial or accounting officer of
     the Borrower in the form of Exhibit C hereto  setting  forth in  reasonable
     detail computations  evidencing  compliance with the covenants contained in
     ss.8.3(j), ss.8.8, ss.8.10(c) and ss.9, and (if applicable) reconciliations
     to reflect changes in generally  accepted  accounting  principles since the
     Balance Sheet Date;


                                      -53-
<PAGE>


          (h)  contemporaneously  with the filing or mailing thereof,  copies of
     all  material  of a  financial  nature  filed  with  the SEC or sent to the
     stockholders of the REIT or the partners of the Borrower;

          (i) as soon as  practicable  but in any event  not later  than 45 days
     after the end of each fiscal year of the Borrower,  updated Rent Rolls with
     respect to the Borrowing  Base  Properties;  provided,  that at the written
     request of the Agent the Borrower will provide the Agent updated Rent Rolls
     with respect to the Borrowing Base Properties  within 45 days after the end
     of each fiscal quarter of the Borrower;

          (j) [intentionally omitted];

          (k) [intentionally omitted];

          (l) [intentionally omitted];

          (m) not later  than 45 days  following  the last day of each  calendar
     quarter,  a copy of the report for such calendar  quarter  substantially in
     the form  prepared  for  management  and approved by the Agent prior to the
     date hereof as to the Net Operating Income and capital expenditures of each
     Borrowing Base Property, accompanied by a calculation of the Borrowing Base
     Value  and  Advance  Value or J.V.  Advance  Value of each  Borrowing  Base
     Property and a calculation of the Borrowing Base Availability (a "Borrowing
     Base  Certificate")  certified by the  principal  financial  or  accounting
     officer of the Borrower in the form of Exhibit D hereto; provided, however,
     that if any  Default  or  Event  of  Default  shall  have  occurred  and be
     continuing,  each such report shall be provided not later than ten Business
     Days following the end of the applicable calendar quarter,

          (n) when  requested  by the  Agent or any Bank,  copies of all  annual
     federal  income  tax  returns  and  amendments  thereto of the REIT and the
     Borrower;

          (o) when  requested  by the  Agent,  copies  of the  monthly  or other
     periodic  income  statements  prepared  by the  Borrower  for each  item of
     Borrowing  Base Property and for each other parcel of Real Estate  included
     in the  determination  of Consolidated  Total Assets and, when requested by
     the Agent  with  respect to any fiscal  year of the  Borrower,  a report of
     Coopers & Lybrand,  L.L.P. or another "Big Five"  accounting firm providing
     as  supplemental  information  to the audited  financial  statements of the
     Borrower and its Subsidiaries for such fiscal year the Net Operating Income
     of each item of  Borrowing  Base  Property and of each other parcel of Real
     Estate included in the determination of Consolidated Total Assets as of the
     last day of such fiscal year;


                                      -54-
<PAGE>


          (p) when  requested  by the Agent or any Bank,  a  certificate  of the
     Borrower  and the  REIT  evidencing  compliance  with all  requirements  of
     applicable laws and regulations necessary to maintain REIT Status;

          (q) not later than February 28 of each year,  commencing  February 28,
     1998 or such later date as the Agent may approve, the Borrower will provide
     to the  Agent  and the Banks an annual  business  plan,  setting  forth its
     proposed business prospects for the upcoming year;

          (r) not later than ten days following the occurrence thereof,  written
     notification  of each  Structural  Change  and each  merger or other  event
     permitted  under  Section 8.4 which have a value  equal to or greater  than
     $50,000,000 describing such event in reasonable detail;

          (s) from time to time  promptly  following  the  request of the Agent,
     such  evidence  as the Agent  may  request  (including  real  estate  title
     updates)  with respect to the continued  compliance  of the Borrowing  Base
     Properties with the  requirements of Eligible Real Estate (except that such
     evidence  shall not be  requested  more than once in any fiscal year of the
     Borrower unless an Event of Default shall have occurred and be continuing);
     and

          (t) from time to time such other financial data and information in the
     possession  of the  REIT  or the  Borrower  (including  without  limitation
     auditors' management letters, property inspection and environmental reports
     and  information  as to zoning  and  other  legal  and  regulatory  changes
     affecting the REIT, the Borrower or any Subsidiary or Nominee) as the Agent
     may reasonably request.

     ss.7.5. Notices.

          (a) Defaults. The REIT and the Borrower will promptly notify the Agent
     in writing of the occurrence of any Default or Event of Default,  including
     without  limitation any event or condition which,  with the passage of time
     or giving of notice or both,  could  constitute  an "Event of  Default"  as
     defined in Article XVI of the FNMA Loan Agreement. If any Person shall give
     any  notice  or take any  other  action in  respect  of a  claimed  default
     (whether or not  constituting  an Event of Default) under this Agreement or
     under any note, evidence of indebtedness,  indenture or other obligation to
     which or with  respect  to which the REIT or the  Borrower  or any of their
     Subsidiaries  is a party or obligor,  whether as principal  or surety,  and
     such default  would permit the holder of such note or  obligation  or other
     evidence  of  indebtedness  to  accelerate  the  maturity  thereof,   which
     acceleration  would  have a  material  adverse  effect  on the  REIT or the
     Borrower,  the REIT and the Borrower  shall  forthwith  give written notice
     thereof to the Agent and each of the Banks, describing the notice or action
     and the nature of the claimed default.


                                      -55-
<PAGE>


          (b) Environmental Events. The REIT and the Borrower will promptly give
     notice to the Agent (i) upon the REIT,  the Borrower or any  Subsidiary  or
     Nominee obtaining knowledge of any potential or known Release, or threat of
     Release,  of  any  Hazardous  Substances  at or  from  the  Borrowing  Base
     Property; (ii) of any violation of any Environmental Law that the REIT, the
     Borrower or any of their  Subsidiaries or Nominees reports in writing or is
     reportable  by such  Person in  writing  (or for which any  written  report
     supplemental  to any oral  report is made) to any  federal,  state or local
     environmental agency and (iii) upon becoming aware thereof, of any inquiry,
     proceeding,  investigation,  or other  action,  including a notice from any
     agency of potential environmental liability, or any federal, state or local
     environmental  agency or board,  that in either case involves the Borrowing
     Base  Property  or has the  potential  to  materially  affect  the  assets,
     liabilities,  financial  conditions or operations of the REIT, the Borrower
     or any Subsidiary or Nominee.

          (c) Notification of Claims Against  Borrowing Base Property.  The REIT
     and the Borrower will, immediately upon becoming aware thereof,  notify the
     Agent in writing of any  setoff,  claims  (including,  with  respect to the
     Borrowing  Base  Property,  environmental  claims),  withholdings  or other
     defenses to which any of the Borrowing Base Property,  or the rights of the
     Agent or the  Banks  with  respect  to the  Borrowing  Base  Property,  are
     subject.

          (d) Notice of Litigation and Judgments. The REIT and the Borrower will
     give notice to the Agent in writing within 15 days of becoming aware of any
     litigation or proceedings  threatened in writing or any pending  litigation
     and  proceedings   affecting  the  REIT,  the  Borrower  or  any  of  their
     Subsidiaries or Nominees or to which the REIT, the Borrower or any of their
     Subsidiaries  or Nominees is or is to become a party involving an uninsured
     claim  against the  Borrower or any of its  Subsidiaries  or Nominees  that
     could  reasonably  be expected to have a materially  adverse  effect on the
     REIT, the Borrower and stating the nature and status of such  litigation or
     proceedings.  The REIT and the Borrower  will give notice to the Agent,  in
     writing,  in form and detail  satisfactory to the Agent, within ten days of
     any judgment not covered by insurance,  whether final or otherwise, against
     the REIT, the Borrower or any of its  Subsidiaries or Nominees in an amount
     in excess of $1,000,000.

          (e) Notice of Proposed  Sales.  Encumbrances  or Transfer of Borrowing
     Base Properties. The REIT and the Borrower will promptly give notice to the
     Agent of any proposed  sale,  encumbrance or transfer of any Borrowing Base
     Property,  such notice to be accompanied by a Compliance  Certificate and a
     Borrowing  Base  Certificate,  each prepared on a pro forma basis using the
     financial  statements of the REIT most recently  provided or required to be
     provided  to the  Banks  under  ss.6.4  or  ss.7.4  adjusted  in  the  best
     good-faith  estimate  of the REIT and the  Borrower  to give effect to such
     sale, encumbrance or transfer and demonstrating that no Default or Event of
     Default with respect to the covenants referred to therein shall exist after
     giving effect to such


                                      -56-
<PAGE>


     sale,   encumbrance  or  transfer  and   calculating   the  Borrowing  Base
     Availability after giving effect to such sale, encumbrance or transfer.

          (f)  Notification of Banks.  Promptly after receiving any notice under
     this  ss.7.5,  the Agent will  forward a copy thereof to each of the Banks,
     together with copies of any certificates or other written  information that
     accompanied such notice.

     ss.7.6. Existence; Maintenance of Properties.

          (a) The  REIT  will do or cause to be done  all  things  necessary  to
     preserve  and keep in full  force and effect  its  existence  as a Delaware
     corporation.  The Borrower will do or cause to be done all things necessary
     to preserve  and keep in full force and effect its  existence as a Delaware
     limited  partnership.  The REIT and the  Borrower  will cause each of their
     Subsidiaries and Nominees to do or cause to be done all things necessary to
     preserve  and keep in full force and effect its legal  existence.  The REIT
     and the  Borrower  will do or  cause  to be done all  things  necessary  to
     preserve  and keep in full  force all of their  rights and  franchises  and
     those of their  Subsidiaries and Nominees.  The REIT and the Borrower will,
     and will cause each of their  Subsidiaries  and  Nominees  to,  continue to
     engage  primarily in the  businesses  now  conducted by them and in related
     businesses;  provided  however,  that the REIT shall not own or operate any
     Real  Estate or other  property  and  shall  conduct  business  solely as a
     general or limited partner of the Borrower.

          (b) The REIT and the Borrower  (i) will cause all of their  properties
     and those of their  Subsidiaries and Nominees used or useful in the conduct
     of their businesses or the businesses of their Subsidiaries and Nominees to
     be maintained in good condition, repair and working order and supplied with
     all  necessary  equipment  in all cases in which the failure so to do would
     have a material  adverse  effect on the  condition  of the  Borrowing  Base
     Properties  taken  as a whole  or on the  financial  condition,  assets  or
     operations of the REIT and its Subsidiaries taken as a whole, and (ii) will
     cause to be made all necessary repairs, renewals, replacements, betterments
     and  improvements  thereof in all cases in which the failure so to do would
     have a material  adverse  effect on the  condition  of the  Borrowing  Base
     Properties  taken  as a whole  or on the  financial  condition,  assets  or
     operations of the REIT and its Subsidiaries taken as a whole.

     ss.7.7. Insurance.

          (a) The  REIT and the  Borrower  will,  at its  expense,  procure  and
     maintain  for the  benefit  of the REIT  and the  Borrower  and the  Agent,
     insurance policies issued by such insurance companies,  in such amounts, in
     such form and substance, and with such coverages, endorsements, deductibles
     and  expiration  dates  as are  acceptable  to  the  Agent,  providing  the
     following types of insurance covering the Real Estate:


                                      -57--
<PAGE>


               (i) "All Risks" property  insurance  (including broad form flood,
          broad  form   earthquake  and   comprehensive   boiler  and  machinery
          coverages) on each Building and the contents  therein of the REIT, the
          Borrower  and their  Subsidiaries  and  Nominees in an amount not less
          than one hundred percent (100%) of the full  replacement  cost of each
          Building and the contents  therein of the REIT, the Borrower and their
          Subsidiaries and Nominees, with deductibles not to exceed $100,000 for
          any one occurrence,  with a replacement cost coverage endorsement,  an
          agreed  amount  endorsement,   and,  if  requested  by  the  Agent,  a
          contingent  liability from operation of building laws  endorsement,  a
          demolition  cost  endorsement  and an increased  cost of  construction
          endorsement in such amounts as the Agent may require. Full replacement
          cost  as  used  herein  means  the  cost  of  replacing  the  Building
          (exclusive of the cost of excavations,  foundations and footings below
          the lowest basement  floor) and the contents  therein of the REIT, the
          Borrower and their  Subsidiaries  and Nominees  without  deduction for
          physical depreciation thereof.

               (ii) During the course of construction or repair of any Building,
          the  insurance  required  by clause  (i) above  shall be  written on a
          builders risk, completed value, non-reporting form, meeting all of the
          terms  required by clause (i) above,  covering the total value of work
          performed,  materials,  equipment,  machinery and supplies  furnished,
          existing structures, and temporary structures being erected on or near
          the Real Estate, including coverage against collapse and damage during
          transit or while being stored off-site, and containing a permission to
          occupy  endorsement;  provided  that the  insurance  required  by this
          clause (ii) may be provided by the construction contractor.

               (iii) Flood  insurance  if at any time any Building is located in
          any federally  designated  "special  hazard area"  (including any area
          having special flood,  mudslide and/or flood-related  erosion hazards,
          and shown on a Flood Hazard Boundary Map or a Flood Insurance Rate Map
          published by the Federal  Emergency  Management  Agency as Zone A, AO,
          A1-30, AE, A99, AH, VO, Vl-30, VE, V, M or E) and the broad form flood
          coverage  required by clause (i) above is not available,  in an amount
          equal  to the  full  replacement  cost  or  the  maximum  amount  then
          available under the National Flood Insurance Program.

               (iv) Rent loss  insurance in an amount  sufficient  to recover at
          least (1) the total  estimated gross rent receipts for the Real Estate
          for a twelve month period,  plus (2) to the extent paid  separately by
          tenants and not included in clause (1), all taxes, charges,  sewer use
          fees,  water  rates,  assessments  of every name and  nature,  and any
          government charges for a twelve month period.


                                      -58-
<PAGE>


               (v) Commercial  general  liability  insurance  against claims for
          personal  injury (to include,  without  limitation,  bodily injury and
          personal and advertising injury) and property damage liability, all on
          an occurrence basis, if commercially available, with such coverages as
          the Agent  may  reasonably  request  (including,  without  limitation,
          contractual  liability coverage,  completed  operations coverage for a
          period  of two  years  following  completion  of  construction  of any
          improvements  on the Real Estate,  and coverages  equivalent to an ISO
          broad form  endorsement),  with a general  aggregate Limit of not less
          than $15,000,000,  a completed  operations aggregate limit of not less
          than $1,000,000,  and a combined single "per occurrence"  limit of not
          less than  $1,000,000 for bodily injury,  property  damage and medical
          payments.

               (vi)  During  the  course  of   construction  or  repair  of  any
          improvements  on the Real Estate,  owner's  contingent  or  protective
          liability  insurance covering claims not covered by or under the terms
          or provisions of the insurance required by clause (v) above.

               (vii) Employers liability insurance.

               (viii) Umbrella liability  insurance with limits of not less than
          $50,000,000 to be in excess of the limits of the insurance required by
          clauses (v), (vi) and (vii) above,  with coverage at least as broad as
          the primary  coverages of the insurance  required by clauses (v), (vi)
          and (vii) above, with any excess liability insurance to be at least as
          broad as the coverages of the lead umbrella policy.  All such policies
          shall be endorsed to provide defense coverage obligations.

               (ix)  Workers'  compensation  insurance  for all employees of the
          REIT, the Borrower or their Subsidiaries engaged on or with respect to
          the Real Estate.

               (x) Such other  insurance in such form and in such amounts as may
          from time to time be required  by the Agent  against  other  insurable
          hazards and casualties  which at the time are commonly insured against
          in the case of  properties  of similar  character  and location to the
          Real Estate.

          The  REIT  and the  Borrower  shall  pay  all  premiums  on  insurance
     policies.  The REIT and the Borrower shall deliver  duplicate  originals or
     certified  copies of all such  policies to the Agent,  and the REIT and the
     Borrower  shall promptly  furnish to the Agent all renewal  notices and, so
     requested by the Agent, evidence that all premiums or portions thereof then
     due and payable have been paid. At least seven days prior to the expiration
     date of the policies, the REIT and the Borrower shall


                                      -59-
<PAGE>


     deliver  to  the  Agent  evidence  of  continued   coverage,   including  a
     certificate of insurance, as may be satisfactory to the Agent.

          (b) All policies of insurance required by this Agreement shall contain
     clauses or endorsements to the effect that (i) the insurer waives any right
     of setoff,  counterclaim,  subrogation,  or any deduction in respect of any
     liability of the REIT, the Borrower or any Subsidiary or Nominee, (ii) such
     insurance  is primary  and  without  right of  contribution  from any other
     insurance  which  may  be  available,  (iii)  such  policies  shall  not be
     modified,  canceled or terminated  prior to the scheduled  expiration  date
     thereof  without  the  insurer  thereunder  giving  at least 30 days  prior
     written  notice to the Agent by certified or registered  mail, and (iv) the
     Agent or the Banks shall not be liable for any premiums  thereon or subject
     to any  assessments  thereunder,  and  shall in all  events  be in  amounts
     sufficient to avoid any coinsurance liability.

          (c) The insurance required by this Agreement may be effected through a
     blanket policy or policies  covering  additional  locations and property of
     the REIT, the Borrower and other Persons not included in the Borrowing Base
     Property,  provided that such blanket policy or policies comply with all of
     the terms and provisions of this ss.7.7.

          (d) All  policies of  insurance  required by this  Agreement  shall be
     issued by  companies  licensed to do business in the State where the policy
     is issued and also in The Commonwealth of Massachusetts and having a rating
     in Best's Key Rating Guide of at least "A-" and a financial  size  category
     of at least "XI"; provided, that such ratings and financial size categories
     as in effect on the date hereof shall be acceptable for the duration of the
     periods of any extensions or renewals of policies  currently in effect, but
     the issuers of any subsequent policies shall be required to meet the rating
     and category size requirements set forth above.

          (e) Neither the REIT nor the  Borrower nor any  Subsidiary  or Nominee
     shall carry separate insurance,  concurrent in kind or form or contributing
     in the event of loss,  with any  insurance  required  under this  Agreement
     unless  such  insurance  complies  with the  terms and  provisions  of this
     ss.7.7.

          (f) In the event of any loss or damage to the Borrowing  Base Property
     in excess of the deductible, the REIT and the Borrower shall give immediate
     written notice to the insurance  carrier and the Agent, and the Agent shall
     furnish a copy of such notice promptly to each of the Banks.

     ss.7.8.  Taxes. The REIT, the Borrower and each Subsidiary and Nominee will
duly pay and  discharge,  or cause to be paid and  discharged,  before  the same
shall become delinquent,  all taxes,  assessments and other governmental charges
imposed upon it and upon


                                      -60-
<PAGE>


the Borrowing Base Property and the other Real Estate, sales and activities,  or
any part thereof, or upon the income or profits therefrom, as well as all claims
for labor,  materials,  or supplies that if unpaid might by law become a lien or
charge upon any of its property; provided that any such tax, assessment, charge,
levy or claim need not be paid if the validity or amount thereof shall currently
be  contested  in good faith by  appropriate  proceedings  and if the REIT,  the
Borrower or such Subsidiary shall have set aside on its books adequate  reserves
with  respect  thereto;   and  provided,   further.   that  forthwith  upon  the
commencement  of  proceedings  to foreclose  any lien that may have  attached as
security therefor, the REIT, the Borrower and each Subsidiary and Nominee either
(i) will provide a bond issued by a surety  reasonably  acceptable  to the Agent
and sufficient to stay all such proceedings or (ii) if no such bond is provided,
will pay each such tax, assessment, charge, levy or claim.

     ss.7.9. Inspection of Properties and Banks. The REIT and the Borrower shall
upon two Business Days' notice permit the Banks, through the Agent or any of the
Banks'  other  designated  representatives,  at the  expense of the REIT and the
Borrower  to visit and  inspect  during  business  hours  any of the  REIT,  the
properties of the Borrower or any of their  Subsidiaries and Nominees to examine
the books of  account  of the REIT,  the  Borrower  and their  Subsidiaries  and
Nominees (and to make copies thereof and extracts  therefrom) and to discuss the
affairs,  finances and accounts of the REIT, the Borrower and their Subsidiaries
and Nominees with, and to be advised as to the same by, their  officers,  all at
such  reasonable  times  during  business  hours and  intervals as the Agent may
reasonably request.

     ss.7.10. Compliance with Laws, Contracts, Licenses, and Permits.

          (a) The REIT and the Borrower will comply with, and will cause each of
     their Subsidiaries and Nominees to comply in all material respects with (i)
     all applicable  laws and  regulations  now or hereafter in effect  wherever
     their businesses are conducted,  including all Environmental Laws, (ii) the
     provisions of their respective corporate charters,  partnership  agreements
     or declarations  of trust, as the case may be, and other charter  documents
     and by-laws, (iii) all agreements and instruments to which any of them is a
     party or by which they or any of their  properties may be bound (other than
     those  described  in  ss.7.10(b)  below) and (iv) all  applicable  decrees,
     orders, and judgments. If at any time while any Loan or Note is outstanding
     or  the  Banks  have  any   obligation   to  make  Loans   hereunder,   any
     authorization,  consent,  approval,  permit or  license  from any  officer,
     agency or  instrumentality  of any  government  shall  become  necessary or
     required  in order that the REIT or the  Borrower  may  fulfill  any of its
     obligations  hereunder,  the REIT and the Borrower will immediately take or
     cause to be taken all  reasonable  steps  within their power to obtain such
     authorization,  consent,  approval, permit or license and furnish the Agent
     with evidence thereof.

          (b) The REIT and the Borrower will comply with, and will cause each of
     their  Subsidiaries  and Nominees to comply in all material  respects with,
     all agreements and


                                      -61-
<PAGE>


     instruments  to which  any of them is a party  or by  which  they or any of
     their  properties may be bound which relate to the maintenance or operation
     of any individual parcel of Real Estate owned by any of them.

     ss.7.11. Use of Proceeds. The Borrower may use the proceeds of the Loans to
fund real estate  acquisitions,  capital  improvements  and general  partnership
needs;  provided,  however,  that the Borrower will not, directly or indirectly,
apply any part of the proceeds of any  extension of credit made  pursuant to the
Loan  Documents  to  purchase  or to carry  Margin  Stock or to any  transaction
prohibited  by the Foreign  Trade  Regulations  or by other laws or  regulations
applicable to the Banks.

     ss.7.12. Further Assurances. The REIT and the Borrower will cooperate with,
and will cause each of their  Subsidiaries  and Nominees to cooperate  with, the
Agent and the Banks and execute such further  instruments  and  documents as the
Banks or the Agent shall reasonably  request to carry out to their  satisfaction
the transactions contemplated by this Agreement and the other Loan Documents.

     ss.7.13.  REIT Status;  Operation  of Business.  The REIT at all times will
comply with all  requirements of applicable  laws and  regulations  necessary to
maintain  REIT  Status.   The  REIT  shall  continue  to  be  self-advised   and
self-managed  and to operate its  business  as  currently  advised,  managed and
conducted and in compliance  with the terms and conditions of this Agreement and
the other Loan Documents.

     ss.7.14. [Intentionally omitted.]

     ss.7.15.  Partnership  Status.  The Borrower shall at all times comply with
all  requirements of applicable  laws and regulations  necessary to maintain its
status as a limited  partnership  not liable for federal  income taxes under the
Code. The REIT or a Wholly Owned  Subsidiary of the REIT shall be and remain the
sole  general  partner of the  Borrower,  and the REIT and/or one or more Wholly
Owned  Subsidiaries  of the REIT shall own not less than 51 % of the outstanding
Partnership Units (as defined in the OP Partnership  Agreement) of the Borrower.
The Borrower  shall not issue limited  partnership  interests  other than to the
REST or a Wholly Owned  Subsidiary  of the REIT except in exchange for transfers
of Real  Estate or of  businesses  similar to those  previously  acquired by the
Borrower. The REIT shall, or shall cause any Wholly Owned Subsidiary of the REIT
which acts as sole general  partner of the Borrower to,  observe and perform all
covenants  applicable to it as such sole general  partner which are contained in
the OP  Partnership  Agreement,  including  without  limitation  in Section  7.8
thereof,  and  to  perform  and  observe  all  covenants  applicable  to it as a
Subsidiary of the REIT which are contained in this Agreement.

     ss.7.16.  Public Company Status.  The REIT will continue to comply with all
of the requirements of applicable laws,  regulations and requirements of the New
York Stock


                                      -62-
<PAGE>


Exchange ("NYSE") in order to continue to be listed on the NYSE, and to remain a
publicly-traded company.

     ss.7.17.  Operation and Control.  The Borrower  shall carry on all existing
business operations through the Borrower and its Wholly Owned Subsidiaries.

ss.8. CERTAIN NEGATIVE COVENANTS.

     The REIT and the Borrower  covenant and agree that,  so long as any Loam or
Note is outstanding or any of the Banks has any obligation to make any Loans:

     ss.8.1.  Restrictions on Indebtedness.  The REIT and the Borrower will not,
and will not permit any of their  Subsidiaries  or Nominees to,  create,  incur,
assume,  guarantee  or be or remain  liable,  contingently  or  otherwise,  with
respect to any Indebtedness other than:

          (a) Indebtedness to the Banks arising under any of the Loan Documents;

          (b) current  liabilities of the Borrower or its Subsidiaries  incurred
     in the  ordinary  course  of  business  but not  incurred  through  (i) the
     borrowing of money, or (ii) the obtaining of credit except for credit on an
     open account basis customarily  extended and in fact extended in connection
     with normal purchases of goods and services;

          (c) Indebtedness  (i) of the REIT, the Borrower or their  Subsidiaries
     in respect of taxes,  assessments  and  governmental  charges or levies and
     (ii) of the  Borrower or its  Subsidiaries  in respect of claims for labor,
     materials  and supplies,  in each case to the extent that payment  therefor
     shall  not at the  time  be  required  to be made in  accordance  with  the
     provisions of ss.7.8;

          (d)  Indebtedness  in respect of judgments or awards that have been in
     force for less than the  applicable  period for taking an appeal so long as
     execution is not levied  thereunder or in respect of which the REIT and the
     Borrower  shall  at the time in good  faith be  prosecuting  an  appeal  or
     proceedings  for review and in respect of which a stay of  execution  shall
     have been obtained pending such appeal or review;

          (e) endorsements for collection, deposit or negotiation and warranties
     of products or services,  in each case  incurred in the ordinary  course of
     business;

          (f) subject to the provisions of ss.9.1,  Non-recourse Indebtedness of
     the Borrower or any Subsidiary of the Borrower;

          (g) Indebtedness in respect of reverse repurchase  agreements having a
     term of not more than 180 days with  respect to  Investments  described  in
     ss.8.3(d) or (e);


                                      -63-
<PAGE>


          (h) subject to the provisions of ss.9.1 and ss.9.6, Capitalized Leases
     and Indebtedness  secured by purchase money security  interests on tangible
     personal property of the Borrower and its Subsidiaries;  provided, that the
     amount  of such  Indebtedness  shall  not  exceed  the  book  value of such
     tangible personal property;

          (i) [intentionally omitted];

          (i)  Indebtedness  of the  Borrower  in  respect  of  Qualified  Hedge
     Agreements and other interest rate  protection  agreements  permitted under
     ss.8.10;

          (k)  Indebtedness of the Borrower in the outstanding  principal amount
     of not more than $63,345,000 owing under the FNMA Loan Agreement;

          (1) Indebtedness existing on the Effective Date and listed on Schedule
     8.1 hereto;

          (m)  Indebtedness  not  exceeding   $13,100,000  in  principal  amount
     outstanding under the Durham Construction Loan Agreement;

          (n)  Indebtedness of the Borrower to the REIT evidenced by the Amended
     and  Restated  Promissory  Note dated  September  25, 1997 in the  original
     principal amount of $68,425,000;

          (o)  Unsecured  Senior  Public  Debt  of the  REIT  or  the  Borrower;
     provided,  that prior to the  issuance of any tranche of  Unsecured  Senior
     Public  Debt,  the  Borrower  shall  deliver to the Agent a Borrowing  Base
     Certificate  demonstrating  the Borrowing  Base  Availability  after giving
     effect  to  such  issuance  and  a  Compliance  Certificate   demonstrating
     compliance with the covenants set forth therein after giving effect to such
     issuance; and

          (p) other  Indebtedness  for  borrowed  money which does not exceed in
     aggregate  principal  amount  outstanding at any time the amount  permitted
     under ss.9.6.

     ss.8.2. Restrictions on Liens, Etc. The REIT and the Borrower will not, and
will not permit any of their Subsidiaries or Nominees to, (a) create or incur or
suffer to be created or  incurred or to exist any lien,  encumbrance,  mortgage,
pledge,  charge,  restriction or other security interest of any kind upon any of
its property or assets of any character whether now owned or hereafter acquired,
or upon the income or profits  therefrom;  (b)  transfer  any of its property or
assets or the income or profits therefrom for the purpose of subjecting the same
to the  payment  of  Indebtedness  or  performance  of any other  obligation  in
priority to payment of its general creditors;  (c) acquire,  or agree or have an
option to acquire,  any property or assets.  upon conditional sale or other tide
retention or purchase  money  security  agreement,  device or  arrangement;  (d)
suffer to exist for a period of more than 30 days after


                                      -64-
<PAGE>


whatsoever over its general  creditors;  (e) sell,  assign,  pledge or otherwise
transfer any accounts,  contract rights,  general intangibles,  chattel paper or
instruments,  with or without recourse;  or (f) incur or maintain any obligation
to any holder of  Indebtedness of the REIT or the Borrower or such Subsidiary or
Nominee  which  prohibits the creation or  maintenance  of any lien securing the
Obligations;  provided that the REIT, the Borrower and any Subsidiary or Nominee
may create or incur or suffer to be created or incurred or to exist:

               (i) liens in favor of the  Borrower  on all or part of the assets
          of  Subsidiaries  of  the  Borrower  securing  Indebtedness  owing  by
          Subsidiaries of the Borrower to the Borrower;

               (ii) liens on properties to secure taxes,  assessments  and other
          governmental  charges or claims for labor,  material  or  supplies  in
          respect of  obligations  which (A) are not yet due and  payable or (B)
          are not yet required to be paid under ss.7.8;

               (iii)  deposits or pledges made in connection  with, or to secure
          payment of, workers'  compensation,  unemployment  insurance,  old age
          pensions or other Social Security obligations;

               (iv) liens on properties  other than the Borrowing  Base Property
          in respect of judgments or awards,  the  Indebtedness  with respect to
          which is permitted by ss.8.1(d);

               (v) encumbrances on Real Estate  consisting of easements,  rights
          of way, zoning restrictions,  restrictions on the use of real property
          and defects and  irregularities  in the title  thereto,  landlord's or
          lessor's  liens under leases to which the Borrower or a Subsidiary  or
          Nominee  of  the  Borrower  is  a  party  and  other  minor  liens  or
          encumbrances,  none of which interferes materially with the use of the
          property  affected  in the  ordinary  conduct of the  business  of the
          Borrower and its Subsidiaries, which defects do not individually or in
          the aggregate have a materially  adverse effect on the business of the
          Borrower  individually  or of the Borrower and its  Subsidiaries  on a
          consolidated basis;

               (vi)  liens  on  Real  Estate  (other  than  the  Borrowing  Base
          Properties)   and   Short-term   Investments   securing   Non-recourse
          Indebtedness permitted by ss.8.1(f);

               (vii)  Capitalized  Leases and purchase money security  interests
          permitted by ss.8.1(h);


                                      -65-
<PAGE>


               (viii)  liens in favor of the Agent and the Banks  under the Loan
          Documents;

               (ix) [intentionally omitted];

               (x) liens  securing  the  Indebtedness  permitted by ss.8.1(k) on
          Real Estate other than any Borrowing Base Property,  personal property
          installed  on such Real  Estate  and the gross  revenues  of such Real
          Estate and on notes or bonds  evidencing loans secured by mortgages or
          deeds of trust on real property;

               (xi) the lien on the property  known as The Berkshires at Crooked
          Creek in Durham,  North Carolina and related contract rights and other
          assets  securing  the  Indebtedness  of the  Obligor  under the Durham
          Construction Loan Agreement;

               (xii) other liens on  properties  other than the  Borrowing  Base
          Property  existing on the  Effective  Date and listed on Schedule  8.2
          hereto; and

               (xiii) liens  securing  Indebtedness  permitted  under  ss.8.1(o)
          hereof, to the extent that such liens are permitted under ss.9.5.

     ss.8.3.  Restrictions on  Investments.  The REIT and the Borrower will not,
and will not permit any of their  Subsidiaries to, make or permit to exist or to
remain outstanding any Investment except Investments in:

          (a) marketable  direct or guaranteed  obligations of the United States
     of America;

          (b) marketable  direct  obligations  of any of the following:  Federal
     Home Loan Mortgage Corporation, Student Loan Marketing Association, Federal
     Home Loan Barb, FNMA,  Government National Mortgage  Association,  Bank for
     Cooperatives,  Federal  Intermediate Credit Banks, Federal Financing Banks,
     Export-Import  Bank of the United States,  Federal Land Banks, or any other
     agency or instrumentality of the United States of America;

          (c) demand deposits,  certificates of deposit, bankers acceptances and
     time  deposits of United  States  banks  having  total  assets in excess of
     $100,000,000;  provided,  however, that the aggregate amount at any time so
     invested   with  any  single  bank  having   total   assets  of  less  than
     $1,000,000,000 will not exceed $200,000;

          (d)  securities  commonly  known as  "commercial  paper"  issued  by a
     corporation  organized and existing under the laws of the United States of
     America or any State which at the time of purchase  are rated by Moody's or
     by S&P at not less


                                      -66-
<PAGE>


     than "P 1" or "P 2" if then rated by Moody's, and not less than "A 1" or "A
     2" if then rated by S&P;

          (e) mortgage-backed  securities  guaranteed by the Government National
     Mortgage  Association,  FNMA or the Federal Home Loan Mortgage  Corporation
     and other  mortgage-backed bonds which at the time of purchase are rated by
     Moody's or by S&P at not less than "AA" if then  rated by  Moody's  and not
     less than "AA" if then rated by S&P;

          (f) repurchase  agreements  having a term not greater than 90 days and
     fully secured by securities  described in the foregoing subsection (a), (b)
     or (e)  with  banks  described  in the  foregoing  subsection  (c) or  with
     financial  institutions or other corporations having total assets in excess
     of $500,000,000;

          (g) shares of so-called  "money market funds"  registered with the SEC
     under the Investment  Company Act of 1940 which maintain a level  per-share
     value,  invest  principally  in  Investments  described  in  the  foregoing
     subsections (a) through (f) and have total assets in excess of $50,000,000;

          (h) Investments of the Borrower and its  Subsidiaries in fee interests
     in Real Estate  utilized  principally for  multifamily  housing,  including
     earnest money deposits relating thereto and transaction costs;

               (i) Investments in Subsidiaries of the REIT and the Borrower;

               (i)  other  Investments   consisting  of  (i)  loans  secured  by
          mortgages or deeds of trust on real property,  (ii) assets included in
          clause (a) of the definition of "Development  Assets" herein and other
          raw  land,  (iii)  Investments  in  Real  Estate  included  in  "Other
          Investments" as defined on page 67 of the original Prospectus and (iv)
          Investments  in entities other than  Subsidiaries  all of whose assets
          consist  of Real  Estate  or other  Investments  permitted  hereunder;
          provided that the aggregate  value,  determined as provided  below, of
          the Investments of the Borrower and its  Subsidiaries  permitted under
          this subsection (j) at no time shall exceed twenty-five percent (25 %)
          of  Consolidated  Total  Assets;  and  provided,   further,  that  the
          aggregate value, as provided below, of the Investments of the Borrower
          and its  Subsidiaries  permitted  under clause (ii) of this subsection
          (j) at no time shall  exceed  fifteen  percent (15 %) of  Consolidated
          Total Assets.  For the purposes of this  subsection  (3), the value of
          the Investments permitted hereunder shall be calculated as provided in
          the definition of  "Consolidated  Total Assets" in ss. 1.1;  provided,
          however,  that in the event that such  definition  does not  provide a
          means of valuing any Investment described in this subsection (3), then
          such Investment shall be valued at book value determined in accordance
          with generally accepted accounting principles; and


                                      -67-
<PAGE>


          (k) a loan to GGC L.L.C., a Maryland limited liability company, in the
     principal amount of $7,500,000.

     ss.8.4. Merger, Consolidation. The REIT and the Borrower will not, and will
not  permit  any of their  Subsidiaries  to,  become a party  to any  merger  or
consolidation  except  (i) the  merger  or  consolidation  of one or more of the
Subsidiaries  or Nominees of the Borrower with and into the  Borrower,  (ii) the
merger or consolidation of two or more  Subsidiaries or Nominees of the Borrower
and (iii) the merger or  consolidation  of the Borrower  with another  Person in
which the Borrower is the surviving entity and prior to which the Borrower shall
have  provided to each of the Banks a Compliance  Certificate  prepared on a pro
forma basis using the financial statements of the REIT most recently provided or
required to be provided to the Banks under ss.6.4 or ss.7.4 adjusted in the best
good  faith  estimate  of  the  Borrower  to  give  effect  to  such  merger  or
consolidation and demonstrating that no Default or Event of Default with respect
to the  covenants  referred to therein  shall exist after giving  effect to such
merger or consolidation.

     ss.8.5.  Sale and  Leaseback.  The REIT and the Borrower will not, and will
not permit any of their Subsidiaries or Nominees to, enter into any arrangement,
directly or  indirectly,  whereby the REIT,  the Borrower or any  Subsidiary  or
Nominee shall sell or transfer any Real Estate owned by it in order that then or
thereafter  the REIT, the Borrower or any Subsidiary or Nominee shall lease back
such Real Estate.

     ss.8.6.  Compliance with Environmental Laws. The REIT and the Borrower will
not, and will not permit any of their Subsidiaries or Nominees to, do any of the
following:  (a) use any of the Real Estate or any portion  thereof as a facility
for the  handling,  processing,  storage or  disposal of  Hazardous  Substances,
except for small quantities of Hazardous  Substances used in the ordinary course
of business and in compliance with all applicable  Environmental Laws, (b) cause
or permit to be located on any of the Real Estate any underground  tank or other
underground   storage  receptacle  for  Hazardous   Substances  except  in  full
compliance with Environmental Laws, (c) generate any Hazardous Substances on any
of the Real  Estate  except in full  compliance  with  Environmental  Laws,  (d)
conduct any  activity at any Real Estate or use any Real Estate in any manner so
as to cause a Release of Hazardous  Substances  on, upon or into the Real Estate
or any  threatened  Release of  Hazardous  Substances  which  might give rise to
liability  under  CERCLA or any other  Environmental  Law,  or (e)  directly  or
indirectly  transport or arrange for the transport of any  Hazardous  Substances
(except in compliance with all Environmental Laws).

     The REIT and the Borrower shall:

               (i) in the event of any change in  Environmental  Laws  governing
          the  assessment,  release or removal of  Hazardous  Substances,  which
          change would lead a prudent  lender to require  additional  testing to
          avail itself of any statutory insurance or limited liability, take all
          action (including, without


                                      -68-
<PAGE>


          limitation, the conducting of engineering tests at the sole expense of
          the REIT and the Borrower) to confirm that no Hazardous Substances are
          or ever were Released or disposed of on the Borrowing  Base  Property;
          and

               (ii) if any  Release or disposal of  Hazardous  Substances  shall
          occur or shall have occurred on the Borrowing Base Property (including
          without limitation any such Release or disposal occurring prior to the
          acquisition  of such Borrowing Base Property by the REIT, the Borrower
          or any  Subsidiary  or  Nominee),  cause the  prompt  containment  and
          removal of such Hazardous  Substances and remediation of the Borrowing
          Base  Property  in  full  compliance  with  all  applicable  laws  and
          regulations;  provided,  that all such actions shall be required to be
          taken only by or pursuant to the advice of an Environmental  Engineer;
          and provided,  further, that the REIT and the Borrower shall be deemed
          to be in compliance  with  Environmental  Laws for the purpose of this
          clause  (ii) so long as either of them or a  responsible  third  party
          with sufficient  financial  resources is taking  reasonable  action to
          remediate or manage any event of  noncompliance in accordance with the
          advice of an  Environmental  Engineer  and no action  shall  have been
          commenced by any enforcement agency.

     All  costs  related  to  environmental  compliance  requirements  shall  be
included in the Borrower's capital  expenditures budget (unless a third party as
described  above is  responsible  for such  costs of  compliance  and is  taking
reasonable action to remediate or manage any event of noncompliance as described
above).

     The  Agent  may  engage  its  own  Environmental  Engineer  to  review  the
environmental  assessments  and the compliance of the REIT and the Borrower with
the  covenants  contained  herein  and  the  recommendations  of the  Borrower's
Environmental  Engineer.  The REIT and the  Borrower  will  take all  reasonable
precautions to identify environmental liabilities and not to incur environmental
liabilities unless they are limited and manageable.

     At any time after an Event of Default  shall have occurred  hereunder,  or,
whether or not an Event of Default  shall have  occurred,  at any time after the
Agent or the Majority  Banks shall receive  notice from the REIT or the Borrower
of a Release  or  threatened  Release  of  Hazardous  Substances,  or shall have
received  notice  from any  other  source  deemed  reliable  by the Agent or the
Majority  Banks  that a  Release  of  Hazardous  Substances  may have  occurred,
relating to any Borrowing Base Property, the Agent may at its election (and will
at the request of the  Majority  Banks) after five days prior notice to the REIT
and the Borrower  obtain such  environmental  assessments of such Borrowing Base
Property prepared by an Environmental  Engineer as may be necessary or advisable
for the purpose of evaluating or confirming (i) whether any Hazardous Substances
are present in the soil or water at or adjacent' to such Borrowing Base Property
and (ii) whether the use and operation of such  Borrowing  Base Property  comply
with all Environmental Laws. Environmental


                                      -69-
<PAGE>


assessments  may include  detailed  visual  inspections  of such  Borrowing Base
Property  including,  without  limitation,  any and all storage  areas,  storage
tanks,  drains, dry wells and leaching areas, and the taking of soil samples, as
well as such other  investigations  or analyses as are necessary or  appropriate
for a complete  determination  of the compliance of such Borrowing Base Property
and the use and operation  thereof with all applicable  Environmental  Laws. All
such environmental assessments shall be at the sole cost and expense of the REIT
and the Borrower.

     ss.8.7. REIT Distributions.  The REIT will not make any Distributions which
would cause it to violate any of the following covenants:

          (a) In the event that an Event of Default  shall have  occurred and be
     continuing,  the REIT shall make no  Distributions in respect of its Series
     1997-A  Convertible  Preferred Stock and shall make no other  Distributions
     except dividends declared prior to such occurrence and other  Distributions
     required  under  the Code to  maintain  the REIT  Status  of the  REIT,  as
     evidenced by a  certification  of the  principal  financial  or  accounting
     officer  of  the  REIT   containing   calculations  in  reasonable   detail
     satisfactory in form and substance to the Agent.

          (b)  Notwithstanding  the  foregoing,  at any  time  when an  Event of
     Default  under  ss.12.1(a)  or  ss.12.1(b)  or an  Event of  Default  under
     ss.12.1(d) (with respect to the covenants contained in ss.9 or this ss.8.7)
     shall have occurred and be continuing beyond the applicable cure period and
     the Agent has accelerated the maturity of the  Obligations,  the REIT shall
     not make any Distributions whatsoever, directly or indirectly.

     ss.8.8.   Borrower   Distributions.   The   Borrower   will  not  make  any
Distributions  except (a)  Distributions  necessary to enable the REIT to make a
Distribution  which at the time is permitted under ss.8.7 and (b)  Distributions
to partners of the Borrower  other than the REIT in proportion to  Distributions
permitted  under  clause  (a);  provided,  however,  that in any Test Period the
aggregate  amount of  Distributions  by the Borrower shall not exceed 90% of the
consolidated Funds From Operations of the Borrower and its Subsidiaries for such
Test  Period,  except  to  the  extent  necessary  to  enable  the  REIT  to pay
Distributions required under the Code to maintain the REIT Status of the REIT.

     ss.8.9.  Asset Sales.  Neither the REIT nor the Borrower nor any Subsidiary
or Nominee  shall sell,  transfer or  otherwise  dispose of any  Borrowing  Base
Property  (except as the result of a condemnation or casualty and except for the
granting of Permitted Liens) unless there shall have been delivered to the Banks
(a) a  statement  that no Default or Event of  Default  exists,  (b) a pro forma
Compliance  Certificate  demonstrating that the REIT and the Borrower will be in
compliance with their covenants  referred to therein after giving effect to such
sale, transfer or other disposition and (c) a Borrowing Base Certificate setting
forth in reasonable  detail the  computation of the Borrowing Base  Availability
after giving


                                      -70-
<PAGE>


effect to such  sale,  transfer  or other  disposition.  In the  event  that any
proposal to sell or  liquidate  the REIT,  the Borrower or their assets shall be
pending  before,  or shall have been approved by, the  shareholders of the REIT,
then the proceeds (net of customary broker fees and other transaction costs and,
in the case of assets  other than  Borrowing  Base  Properties,  net of any debt
secured by a lien  thereon) of the sales of any of their assets shall be applied
first to the reduction of the Revolving Loans and the cash  collateralization of
any Letter of Credit  Exposure before being applied to any other purposes of the
REST or the Borrower.

     ss.8.10.  Interest Rate Protection.  The REIT and the Borrower shall obtain
interest  rate  protection  satisfactory  to  the  Agent,  with  respect  to all
Revolving  Loans and other floating rate and short-term debt amounts that exceed
20% of Consolidated Total Assets.

     ss.8.11. Certain Guarantees.  None of the Non-recourse  Indebtedness of the
Borrower or any  Subsidiary  or Nominee  shall be  guaranteed by the REIT or the
Borrower or any  Subsidiary  or  Nominee;  provided,  however,  that two or more
issues of  Non-recourse  Indebtedness  of Special  Purpose  Subsidiaries  may be
cross-guaranteed  and  cross-collateralized  if,  and  only  if,  each  of  such
guarantees  would be  Non-recourse  Indebtedness if incurred as direct debt; and
provided,  that the  Borrower  may  guarantee  the  Indebtedness  referred to in
ss.8.1(j).  In addition,  none of the REIT, the Borrower,  any Subsidiary or any
Nominee shall guarantee any  Indebtedness of any Person in which the Borrower is
not a direct or indirect investor as permitted under ss.8.3.

     ss.8.12.  ERISA.  etc. Each of the Borrower and the REIT shall comply,  and
shall cause all ERISA Affiliates to comply, in all material  respects,  with the
provisions of ERISA and the Code  applicable to each Plan.  Each of the Borrower
and the REIT shall  meet,  and shall  cause all ERISA  Affiliates  to meet,  all
minimum  funding  requirements  applicable  to them  with  respect  to any  Plan
pursuant  to section  302 of ERISA or section  412 of the Code,  without  giving
effect  to any  waivers  of  such  requirements  or  extensions  of the  related
amortization  periods  which may be  granted.  At no time shall the  Accumulated
Benefit  Obligations under any Plan that is not a Multiemployer  Plan exceed the
fair market value of the assets of such Plan  allocable to such benefits by more
than $500,000. The Borrower and the REIT shall not withdraw, and shall cause all
other  ERISA  Affiliates  not  to  withdraw,  in  whole  or in  part,  from  any
Multiemployer Plan so as to give rise to withdrawal liability exceeding $500,000
in the  aggregate.  At no time shall the  actuarial  present  value of  unfunded
liabilities for  post-employment  health care benefits,  whether or not provided
under a Plan,  calculated in a manner  consistent  with Statement No. 106 of the
Financial Accounting Standards Board, exceed $500,000.

     ss.8.13.  Structural  Change.  The Borrower and its Subsidiaries  shall not
undertake  or  participate  in any  Structural  Change  which has the  effect of
committing  or altering  the status of more than 15% of the  consolidated  total
assets determined in accordance with generally accepted accounting principles of
the Borrower and its Subsidiaries as shown on their  consolidated  balance sheet
as of the most recent fiscal quarter end for which financial


                                      -71-
<PAGE>


statements  are required to have been  furnished to the Banks pursuant to ss.6.4
or ss.7.4, except upon the prior written consent of the Majority Banks.

     ss.9. FINANCIAL COVENANTS

     The REIT and the Borrower  covenant and agree that,  so long as any Loan or
Note is  outstanding  or any Bank has any  obligation  to make any Loans each of
them will comply with the following:

     ss.9.1.  Leverage  Ratio.  The REIT and the  Borrower  will not  permit the
Leverage  Ratio as of the last day of any fiscal  quarter  to exceed  fifty-five
percent (55%).

     ss.9.2.  Interest  Coverage.  The REIT and the Borrower will not permit the
consolidated  EBITDA of the Borrower and its Subsidiaries for any period of four
consecutive  fiscal quarters (treated as a single accounting  period) (the "Test
Period")  to be less than 2.0 times the  consolidated  Interest  Expense  of the
Borrower and its Subsidiaries for the Test Period.

     ss.9.3.  Debt Service  Coverage.  The REIT and the Borrower will not permit
the Debt Service Coverage Ratio for any Test Period to be less than 175%.

     ss.9.4.  Minimum  Consolidated  Tangible Net Worth.  The Borrower  will not
permit the Consolidated  Tangible Net Worth of the Borrower and its Subsidiaries
on the  last  day of any  fiscal  quarter  to be  less  than  the sum of (a) (i)
$300,000,000  for the period  January 1, 1998 through  December  31, 1998,  (ii)
$275,000,000  for the period January 1, 1999 through December 31, 1999, or (iii)
$250,000,000  for the period January 1, 2000 through December 31, 2000, plus (b)
in each case 75 % of the consolidated  amount realized by the REIT, the Borrower
and their  Subsidiaries  (net of  issuance  costs)  from the  issuance of equity
securities  and the receipt of capital  contributions  (measured  in the case of
payments or contributions of assets other than cash by the initial book value of
such assets  recorded in the books of the REIT,  the Borrower or the  applicable
Subsidiary) after December 31, 1997.

     ss.9.5.  Secured Debt. At no time shall the aggregate outstanding principal
amount of  Indebtedness  of the Borrower and its  Subsidiaries  secured by liens
permitted  by  ss.ss.8.2(vi),  8.2(vii),  8.2(x) and  8.2(xi),  determined  on a
consolidated basis, exceed 40% of Consolidated Total Assets.

     ss.9.6. Recourse Debt. At no time shall the aggregate outstanding amount of
Indebtedness  of the Borrower  and its  Subsidiaries  permitted  by ss.8.  1(h),
8.1(k), [8.1(1)],  8.1(m) or 8.1(j),  determined on a consolidated basis, exceed
$80,000,000;  provided,  however,  that  Indebtedness  permitted under ss.8.1(k)
shall  not be  included  in the  foregoing  calculations  and so  long  as  such
Indebtedness constitutes Non-recourse Indebtedness.


                                      -72-


<PAGE>


ss. 10. CLOSING CONDITIONS.

     The obligations of the Agent and the Banks to make the Revolving Credit
Loans and issue Letters of Credit from and after the Effective Date shall be
subject to the satisfaction of the following conditions precedent on or prior to
the Effective Date:

     ss. 10.1. Loan Documents. Each of the Loan Documents shall have been duly
executed and delivered by the respective parties thereto, shall be in full force
and effect and shall be in form and substance satisfactory to the Majority
Banks. Each Bank shall have received a fully executed copy of each such
document. Replacement Revolving Credit Notes satisfactory in form and substance
to the Banks shall have been executed on behalf of the Borrower and delivered to
the Banks.

     ss. 10.2. Certified Copies of Organizational Documents. Each of the Banks
shall have received from the REIT and the Borrower a copy, certified as of a
recent date by the appropriate officer of each State in which the REIT, the
Borrower or any Subsidiary or Nominee is organized and a duly authorized officer
of the REIT to be true and complete, of the certificate of incorporation of the
REIT, the certificate of limited partnership of the Borrower and each
organizational document of each Subsidiary and Nominee, in each case as amended
through the Effective Date. Each of the Banks shall have received from the
Borrower a copy, certified as of the Effective Date, by a duly authorized
officer of the REIT as general partner of the Borrower, of the OP Partnership
Agreement as amended through the Effective Date.

     ss. 10.3. Bylaws; Resolutions. All action on the part of the REIT, the
Borrower and each Subsidiary and Nominee necessary for the valid execution,
delivery and performance by each of the REIT, the Borrower and such Subsidiary
and Nominee of this Agreement and the other Loan Documents to which it is or is
to become a party shall have been duly and effectively taken, and evidence
thereof satisfactory to the Agent shall have been provided to each of the Banks.
Each of the Banks shall have received from each of the REIT, the Borrower and
each applicable Subsidiary and Nominee true copies of its by-laws and the
resolutions adopted by its shareholders and board of directors, partners,
beneficiaries and trustees, as the case may be, authorizing the transactions
described herein, each certified by its clerk, secretary, trustee or authorized
partner as of a recent date to be true and complete.

     ss. 10.4. Incumbency Certificate; Authorized Signers. Each of the Banks
shall have received from the REIT, the Borrower and each applicable Subsidiary
and Nominee an incumbency certificate, dated as of the Effective Date, signed by
a duly authorized officer of the REIT or officer, trustee or partner of each
applicable Subsidiary and Nominee and giving the name and bearing a specimen
signature of each individual who shall be authorized: (a) to sign, in the name
and on behalf of the REIT, the Borrower and each such Subsidiary and Nominee,
each of the Loan Documents to which the REIT, the Borrower or such Subsidiary or
Nominee is or is to become a party; (b) to make Loan and Conversion



                                      -73-
<PAGE>




Requests; and (c) to give notices and to take other action on behalf of the REIT
or the Borrower under the Loan Documents.

     ss. 10.5. Opinions of Counsel Concerning Loan Documents. Each of the Banks
shall have received the favorable opinions addressed to the Banks and the Agent
and dated as of the Effective Date, in form and substance satisfactory to the
Agent, from Scott D. Spelfogel, Senior Vice President and General Counsel of the
REIT and the Borrower.

     ss. 10.6. Swap Assignment. The Collateral Assignment of Interest Rate Swap
dated as of November 21, 1995 (as from time to time amended, the "Swap
Assignment") between the Borrower and BKB as Agent under the Prior Credit
Agreement shall have confirmed by Borrower to benefit the Agent and the Banks
with respect to the Obligations.

     ss. 10.7. Performance; No Default. The REIT and the Borrower shall have
performed ~and complied with all terms and conditions herein required to be
performed or complied with by it on or prior to the Effective Date, and on the
Effective Date there shall exist no Default or Event of Default; and the Banks
shall have received a certificate to these effects signed on behalf of the REIT
and the Borrower by their respective chief financial officers.

     ss. 10.8. Representataions and Warranties. The representations and
warranties made by the REIT and the Borrower and any Subsidiaries and Nominees
in the Loan Documents or otherwise made by or on behalf of the REIT, the
Borrower or any Subsidiaries or Nominees in connection therewith or after the
date thereof shall have been true and correct in all material respects when made
and shall also be true and correct in all material respects on the Effective
Date.

     ss. 10.9. Proceedings and Documents. All proceedings in connection with the
transactions contemplated by this Agreement and the other Loan Documents shall
be reasonably satisfactory to the Agent and the Agent's Special Counsel in form
and substance, and the Agent shall have received all information and such
counterpart originals or certified copies of such documents and such other
certificates, opinions or documents as the Agent and the Agent's Special Counsel
may reasonably require.

     ss. 10.10. Compliance Certificate. A Compliance Certificate dated as of the
date of the Effective Date demonstrating compliance with each of the covenants
calculated therein as of the fiscal quarter ended September 30, 1997 (after
giving effect, on a pro forma basis, to changes in the capital structure of the
Borrower effected since that date), shall have been delivered to the Agent.

     ss. 10.11. Other. The Agent shall have reviewed such other documents,
instruments, certificates, opinions, assurances, consents and approvals as the
Agent or the Agent's Special Counsel may reasonably have requested.


                                      -74-
<PAGE>


ss. 11. CONDITIONS TO ALL BORROWINGS.

     The obligations of the Banks to make any Loan or to issue any Letter of
Credit, whether on or after the Effective Date, shall also be subject to the
satisfaction of the following conditions precedent:

     ss. 11.1. Representations True; No Default. Each of the representations and
warranties of the REIT, the Borrower and their Subsidiaries contained in this
Agreement, the other Loan Documents or in any document or instrument delivered
pursuant to or in connection with this Agreement shall be true as of the date as
of which they were made and shall also be true at and as of the time of the
making of such Loan, with the same effect as if made at and as of that time
(except to the extent of changes resulting from transactions contemplated or
permitted by this Agreement and the other Loan Documents and changes occurring
in the ordinary course of business that singly or in the aggregate are not
materially adverse, and except to the extent that such representations and
warranties relate expressly to an earlier date) and no Default or Event of
Default shall have occurred and be continuing. Each of the Banks shall have
received a certificate of the REIT and the Borrower signed by an authorized
officer of the REIT to such effect.

     ss. 11.2. No Legal Impediment. No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable opinion
of any Bank would make it illegal for such Bank to make such Loan or to issue
any Letter of Credit.

     ss. 11.3. Governmental Regulation. Each Bank shall have received such
statements in substance and form reasonably satisfactory to such Bank as such
Bank shall require for the purpose of compliance with any applicable regulations
of the Comptroller of the Currency or the Board of Governors of the Federal
Reserve System.

     ss. 11.4. Proceedings and Documents. All proceedings in connection with the
Loan shall be satisfactory in substance and in form to the Majority Banks, and
the Majority Banks shall have received all information and such counterpart
originals or certified or other copies of such documents as the Majority Banks
may reasonably request.

     ss. 11.5. Borrowing Documents. In the case of any request for a Revolving
Loan, each of the Banks shall have received each of the following:

          (a) the request for a Revolving Loan required by ss. 2.6 or, as the
     case may be, for a request Letter of Credit required by ss. 2.9 in the form
     of Exhibit B hereto, fully completed; and

          (b) the pro forma Compliance Certificate required by clause (iii) of
     ss. 2.6 or ss. 2.9, as the case may be, prepared in a manner reasonably
     acceptable to the Agent.


                                      -75-
<PAGE>


ss. 12. EVENTS OF DEFAULT; ACCELERATION; ETC.

     ss. 12.1. Events of Default and Acceleration. If any of the following
events ("Events of Default" or, if the giving of notice or the lapse of time or
both is required, then, prior to such notice or lapse of time, "Defaults") shall
occur:

          (a) the Borrower shall fail to pay any principal of the Loans or
     reimbursement of payments under Letters of Credit when the same shall
     become due and payable, whether at the stated date of maturity or any
     accelerated date of maturity or at any other date fixed for payment;

          (b) the Borrower shall fail to pay any interest on the Loans or any
     other sums due hereunder or under any of the other Loan Documents, when the
     same shall become due and payable, whether at the stated date of maturity
     or any accelerated date of maturity or at any other date fixed for payment;

          (c) [intentionally omitted];

          (d) the REIT or the Borrower shall fail to comply with any covenant
     contained in ss. 7.4, ss. 8.3(j), ss. 8.7, ss. 8.8, ss. 9.1, ss. 9.2, ss.
     9.3, ss. 9.4, ss. 9.5 or ss. 9.6, and such failure shall continue for 30
     days after written notice thereof shall have been given to the REIT and the
     Borrower by the Agent;

          (e) the REIT or the Borrower shall fail to comply with any covenant
     contained in ss. 7.5(b) through (e), ss. 7.6(b), ss. 7.8 or ss. 7.10, and
     such failure shall continue for 15 days after written notice thereof shall
     have been given to the REIT and the Borrower by the Agent (or, in the case
     of ss. 7.5(b) through (e) for 15 days after any of the chief executive
     officer, chief operating officer, chief financial officer, chief accounting
     officer or general counsel of the REIT or the Borrower shall have actual
     notice of any event or condition of which notice is required to be given
     thereunder), provided, that such 15-day period shall terminate before the
     close of business on the 15th day in the event that the REIT and the
     Borrower shall not be using diligent best efforts to cure such default;

          (f) the REIT, the Borrower or any of their Subsidiaries or Nominees
     shall fail to perform any other term, covenant or agreement contained
     herein or in any of the other Loan Documents (other than those specified
     above in this ss. 12);

          (g) any representation or warranty of the REIT, the Borrower or any of
     their Subsidiaries or Nominees in this Agreement or any other Loan Document
     or in any other document or instrument delivered pursuant to or in
     connection with this Agreement shall prove to have been false in any
     material respect upon the date when made or deemed to have been made or
     repeated;


                                      -76-
<PAGE>


          (h) with respect to any indebtedness valued in excess of $5,000,000,
     the REIT, the Borrower or any of their Subsidiaries or Nominees shall fail
     to pay at maturity, or within any applicable period of grace, any
     obligation for borrowed money or credit received or in respect of any
     Capitalized Leases, or fail to observe or perform any material term,
     covenant or agreement contained in any agreement by which it is bound,
     evidencing or securing any such borrowed money or credit received or in
     respect of any Capitalized Leases for such period of time as would permit
     (assuming the giving of appropriate notice if required) the holder or
     holders thereof or of any obligations issued thereunder to accelerate the
     maturity thereof;

          (i) the REIT, the Borrower or any of their Subsidiaries or Nominees
     (A) shall make an assignment for the benefit of creditors, or admit in
     writing its general inability to pay or generally fail to pay its debts as
     they mature or become due, or shall petition or apply for the appointment
     of a trustee or other custodian, liquidator or receiver of the REIT, the
     Borrower or any of their Subsidiaries or Nominees or of any substantial
     part of the assets of any thereof, (B) shall commence any case or other
     proceeding relating to the REIT, the Borrower or any of their Subsidiaries
     or Nominees under any bankruptcy, reorganization, arrangement, insolvency,
     readjustment of debt, dissolution or liquidation or similar law of any
     jurisdiction, now or hereafter in effect, or (C) shall take any action to
     authorize or in furtherance of any of the foregoing;

          (j) a petition or application shall be filed for the appointment of a
     trustee or other custodian, liquidator or receiver of the REIT, the
     Borrower or any of their Subsidiaries or Nominees or any substantial part
     of the assets of any thereof, or a case or other proceeding shall be
     commenced against the REIT, the Borrower or any of their Subsidiaries or
     Nominees under any bankruptcy, reorganization, arrangement, insolvency,
     readjustment of debt, dissolution or liquidation or similar law of any
     jurisdiction, now or hereafter in effect, and the REIT, the Borrower or any
     of their Subsidiaries or Nominees shall indicate its approval thereof,
     consent thereto or acquiescence therein or such petition, application, case
     or proceeding shall not have been dismissed within 60 days following the
     filing or commencement thereof;

          (k) a decree or order is entered appointing any such trustee,
     custodian, liquidator or receiver or adjudicating the REIT, the Borrower or
     any of their Subsidiaries or Nominees bankrupt or insolvent, or approving a
     petition in any such case or other proceeding, or a decree or order for
     relief is entered in respect of the REIT, the Borrower or any of its
     Subsidiaries or Nominees in an involuntary case under federal bankruptcy
     laws as now or hereafter constituted;

          (l) there shall remain in force, undischarged, unsatisfied and
     unstayed, for more than 30 days, whether or not consecutive, any uninsured
     final judgment against


                                      -77-
<PAGE>


     the REIT, the Borrower or any of their Subsidiaries or Nominees that, with
     other outstanding uninsured final judgments, undischarged, against the
     REIT, the Borrower or any of their Subsidiaries or Nominees exceeds in the
     aggregate $2,000,000;

          (m) if any of the Loan Documents shall be canceled, terminated,
     revoked or rescinded otherwise than in accordance with the terms thereof or
     with the express prior written agreement, consent or approval of the Banks,
     or any action at law, suit or in equity or other legal proceeding to
     cancel, revoke or rescind any of the Loan Documents shall be commenced by
     or on behalf of the REIT, the Borrower or any of their Subsidiaries or
     Nominees or any of their respective holders of Voting Interests, or any
     court or any other governmental or regulatory authority or agency of
     competent jurisdiction shall make a determination that, or issue a
     judgment, order, decree or ruling to the effect that, any one or more of
     the Loan Documents is illegal, invalid or unenforceable in accordance with
     the terms thereof;

          (n) with respect to any Guaranteed Pension Plan, an ERISA Reportable
     Event shall have occurred and the Majority Banks shall have determined in
     their reasonable discretion that such event reasonably could be expected to
     result in liability of the REIT, the Borrower or any of their Subsidiaries
     or Nominees to the PBGC or such Guaranteed Pension Plan in an aggregate
     amount exceeding $1,000,000 and such event in the circumstances occurring
     reasonably could constitute grounds for the termination of such Guaranteed
     Pension Plan by the PBGC or for the appointment by the appropriate United
     States District Court of a trustee to administer such Guaranteed Pension
     Plan; or a trustee shall have been appointed by the United States District
     Court to administer such Plan; or the PBGC shall have instituted
     proceedings to terminate such Guaranteed Pension Plan;

          (o) the REIT, the Borrower or any of their Subsidiaries or Nominees
     shall be indicted for a federal crime, a punishment for which could include
     the forfeiture of any assets of the Borrower or such Subsidiaries or
     Nominees included in the Borrowing Base Property;

          (p) there shall occur any "Event of Default" is defined in Section
     12.1 of the Durham Construction Loan Agreement;

          (q) there shall occur any "Event of Default" as defined in Article XVI
     of the FNMA Loan Agreement; or

          (r) any Person or a number of Persons acting as a group shall acquire
     direct or indirect ownership of more than 30% of the issued and outstanding
     common stock of the REIT;


                                      -78-
<PAGE>


then, and in any such event, so long as the same may be continuing, the Agent
may, and upon the request of the Majority Banks shall, by notice in writing to
the REIT and the Borrower declare all amounts owing with respect to this
Agreement, the Notes and the other Loan Documents to be, and they shall
thereupon forthwith become, immediately due and payable and require the Borrower
immediately to deposit with the Agent in cash an amount equal to the then Letter
of Credit Exposure (which cash shall be held and applied to reimbursement of
Letter of Credit payments, in each case) without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived by the
Borrower; provided that in the event of any Event of Default specified in ss.
12(i), ss. 12(j) or ss. 12(k), all such amounts shall become immediately due and
payable automatically and without any requirement of notice from any of the
Banks or the Agent.

     ss. 12.1A. Limitation of Cure Periods. Notwithstanding the provisions of
subsections (c), (d) and (e) of ss. 12.1, the cure periods provided therein
shall not be allowed and the occurrence of a Default thereunder immediately
shall constitute an Event of Default for all purposes of this Agreement and the
other Loan Documents if, within the period of twelve months immediately
preceding the occurrence of such Default, there shall have occurred two periods
of cure or portions thereof under any one or more than one of said subsections
(excluding, however, any period of cure with respect to any Default or Defaults
under ss.7.4).

     ss. 12.2. Termination of Commitments. If any one or more Events of Default
specified in ss. 12(i), ss. 12(j) or ss. 12(k) shall occur, then immediately and
without any action on the part of the Agent or any Bank any unused portion of
the credit hereunder shall terminate and the Banks shall be relieved of all
obligations to make Loans or issue Letters of Credit to the Borrower. If any
other Event of Default shall have occurred and be continuing, any Bank may by
notice to the REIT and the Borrower terminate its obligations to make Loans or
issue Letters of Credit to the Borrower. No termination under this ss. 12.2
shall relieve the REIT or the Borrower of any of the Obligations or any of its
existing obligations to such Bank arising under other agreements or instruments.

     ss. 12.3. Remedies. In case any one or more of the Events of Default shall
have occurred and be continuing, and whether or not the Banks shall have
accelerated the maturity of the Loans pursuant to ss. 12.1, each Bank, if owed
any amount with respect to the Loans may, with the consent of the Majority Banks
but not otherwise, proceed to protect and enforce its rights and remedies under
this Agreement, the Notes or any of the other Loan Documents by suit in equity,
action at law or other appropriate proceeding, whether for the specific
performance of any covenant or agreement contained in this Agreement and the
other Loan Documents or any instrument pursuant to which the Obligations to such
Bank are evidenced, including to the full extent permitted by applicable law the
obtaining of the ex parte appointment of a receiver, and, if such amount shall
have become due, by declaration or otherwise, proceed to enforce the payment
thereof or any other legal or equitable right of such Bank. No remedy herein
conferred upon any Bank or the Agent or



                                      -79-
<PAGE>


the holder of any Note is intended to be exclusive of any other remedy and each
and every remedy shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law or in equity or by
statute or any other provision of law.

     ss. 12.4. Distribution of Proceeds. In the event that, following the
occurrence or during the continuance of any Event of Default, the Agent or any
Bank, as the case may be, collects or receives any monies for application to any
of the Obligations, such monies shall be applied as follows:

          (a) First, to the payment of, or (as the case may be) the
     reimbursement of, the Agent or the Banks for or in respect of all
     reasonable costs, expenses, disbursements and losses which shall have been
     incurred or sustained by the Agent or any Bank to protect or preserve the
     collateral or in connection with the collection of such monies by the Agent
     or any Bank, for the exercise, protection or enforcement by the Agent or
     any Bank of all or any of the rights, remedies, powers and privileges of
     the Agent or any Bank under this Agreement or any of the other Loan
     Documents or in support of any provision of adequate indemnity to the Agent
     or any Bank against any taxes or liens which by law shall have, or may
     have, priority over the rights of the Agent or such Bank to such monies;

          (b) Second, to all other Obligations (except Obligations in respect of
     Qualified Hedge Agreements) in such order or preference as the Majority
     Banks shall determine; provided, however, that (i) distributions in respect
     of such Obligations shall be made pari passu among Obligations with respect
     to the Agent's fee payable pursuant to ss. 4.3 and all other Obligations,
     (ii) in the event that any Bank shall have wrongfully failed or refused to
     make an advance under ss. 2.3 and such failure or refusal shall be
     continuing, advances made by other Banks during the pendency of such
     failure or refusal shall be entitled to be repaid as to principal and
     accrued interest in priority to the other Obligations described in this
     subsection (b), and (iii) Obligations owing to the Banks with respect to
     each type of obligation such as interest, principal, fees and expenses,
     shall be made among the Banks pro rata; and provided, further that the
     Majority Banks may in their discretion make proper allowance to take into
     account any Obligations not then due and payable;

          (c) Third, to Obligations in respect of Qualified Hedge Agreements in
     such order or preference as the Majority Banks shall determine; provided,
     that such Obligations owing to the Banks party to Qualified Hedge
     Agreements with respect to each type of obligation such as interest,
     principal, fees and expenses, shall be made among the Banks pro rata; and

          (d) Fourth, the excess, if any, shall be returned to the Borrower or
     to such other Persons as are entitled thereto.


                                      -80-
<PAGE>


ss. 13. SETOFF.

     During the continuance of any Event of Default, any deposits (general or
specific, time or demand, provisional or final, regardless of currency,
maturity, or the branch of where such deposits are held) or other sums credited
by or due from any of the Banks to the REIT or the Borrower and any securities
or other property of the REIT or the Borrower in the possession of such Bank may
be applied to or set off against the payment of Obligations and any and all
other liabilities, direct, or indirect, absolute or contingent, due or to become
due, now existing or hereafter arising, of the REIT and the Borrower to such
Bank. Each of the Banks agrees with each other Bank that (a) if an amount to be
set off is to be applied to Indebtedness of the REIT or the Borrower to such
Bank, other than Indebtedness evidenced by the Notes held by such Bank, such
amount shall be applied ratably to such other Indebtedness and to the
Indebtedness evidenced by all such Notes held by such Bank, and (b) if such Bank
shall receive from the REIT or the Borrower, whether by voluntary payment,
exercise of the right of setoff, counterclaim, cross action, enforcement of the
claim evidenced by the Notes held by such Bank by proceedings against the REIT
or the Borrower at law or in equity or by proof thereof in bankruptcy,
reorganization, liquidation, receivership or similar proceedings, or otherwise,
and shall retain and apply to the payment of the Note or Notes held by such Bank
any amount in excess of its ratable portion of the payments received by all of
the Banks with respect to the Notes held by all of the Banks, such Bank will
make such disposition and arrangements with the other Banks with respect to such
excess, either by way of distribution, pro tanto assignment of claims,
subrogation or otherwise as shall result in each Bank receiving in respect of
the Notes held by it its proportionate payment as contemplated by this
Agreement; provided that if all or any part of such excess payment is thereafter
recovered from such Bank, such disposition and arrangements shall be rescinded
and the amount restored to the extent of such recovery, but without interest.

ss. 14. THE AGENT.

     ss. 14.1. Authorization. The Agent is authorized to take such action on
behalf of each of the Banks and to exercise all such powers as are hereunder and
under any of the other Loan Documents and any related documents delegated to the
Agent, together with such powers as are reasonably incident thereto, provided
that no duties or responsibilities not expressly assumed herein or therein shall
be implied to have been assumed by the Agent. The relationship between the Agent
and the Banks is and shall be that of agent and principal only, and nothing
contained in this Agreement or any of the other Loan Documents shall be
construed to constitute the Agent as a trustee for any Bank.

     ss. 14.2. Employees and Agents. The Agent may exercise its powers and
execute its duties by or through employees or agents and shall be entitled to
take, and to rely on, advice


                                      -81-
<PAGE>


of counsel concerning all matters pertaining to its rights and duties under this
Agreement and the other Loan Documents. The Agent may utilize the services of
such Persons as the Agent in its sole discretion may reasonably determine, and
all reasonable fees and expenses of any such Persons shall be paid by the
Borrower.

     ss. 14.3. No Liability. Neither the Agent nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent, or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the Agent or such other
Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.

     ss. 14.4. No Representation. The Agent shall not be responsible for the
execution or validity or enforceability of this Agreement, the Notes, any of the
other Loan Documents or any instrument at any time constituting, or intended to
constitute, collateral security for the Notes, or for the value of any such
collateral security or for the validity, enforceability or collectability of any
such amounts owing with respect to the Notes, or for any recitals or statements,
warranties or representations made herein or in any of the other Loan Documents
or in any certificate or instrument hereafter furnished to it by or on behalf of
the REIT, the Borrower or any of their Subsidiaries, or be bound to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
covenants or agreements herein or in any instrument at any time constituting, or
intended to constitute, collateral security for the Notes. The Agent shall not
be bound to ascertain whether any notice, consent, waiver or request delivered
to it by the REIT, the Borrower or any holder of any of the Notes shall have
been duly authorized or is true, accurate and complete. The Agent has not made
nor does it now make any representations or warranties, express or implied, nor
does it assume any liability to the Banks, with respect to the creditworthiness
or financial condition of the REIT, the Borrower or any of their Subsidiaries or
Nominees. Each Bank acknowledges that it has, independently and without reliance
upon the Agent or any other Bank, and based upon such information and documents
as it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement.

     ss. 14.5. Payments.

          (a) A payment in immediately available funds by the REIT or the
     Borrower to the Agent hereunder or under any of the other Loan Documents
     for the account of any Bank shall constitute a payment to such Bank. The
     Agent agrees to distribute to each Bank not later than one Business Day
     after the Agent's receipt of good funds, determined in accordance with the
     Agent's customary practices, such Bank's pro rata share of payments
     received by the Agent for the account of the Banks except as otherwise
     expressly provided herein or in any of the other Loan Documents. 


                                      -82-
<PAGE>


          (b) If in the opinion of the Agent the distribution of any amount
     received by it in such capacity hereunder, under the `Notes or under any of
     the other Loan Documents might involve it in liability, it may refrain from
     making distribution until its right to make distribution shall have been
     adjudicated by a court of competent jurisdiction. If a court of competent
     jurisdiction shall adjudge that any amount received and distributed by the
     Agent is to be repaid, each Person to whom any such distribution shall have
     been made shall either repay to the Agent its proportionate share of the
     amount so adjudged to be repaid or shall pay over the same in such manner
     and to such Persons as shall be determined by such court.

          (c) Notwithstanding anything to the contrary contained in this
     Agreement or any of the other Loan Documents, any Bank that fails (i) to
     make available to the Agent its pro rata share of any Loan or (ii) to
     comply with the provisions of ss. 12 with respect to making dispositions
     and arrangements with the other Banks, where such Bank's share of any
     payment received, whether by setoff or otherwise, is in excess of its pro
     rata share of such payments due and payable to all of the Banks, in each
     case as, when and to the full extent required by the provisions of this
     Agreement, shall be deemed delinquent (a "Delinquent Bank") and shall be
     deemed a Delinquent Bank until such time as such delinquency is satisfied.
     A Delinquent Bank shall be deemed to have assigned any and all payments due
     to it from the REIT and the Borrower, whether on account of outstanding
     Loans, interest, fees or otherwise, to the remaining nondelinquent Banks
     for application to, and reduction of, their respective pro rata shares of
     all outstanding Loans. The Delinquent Bank hereby authorizes the Agent to
     distribute such payments to the nondelinquent Banks in proportion to their
     respective pro rata shares of all outstanding Loans. A Delinquent Bank
     shall be deemed to have satisfied in full a delinquency when and if, as a
     result of application of the assigned payments to all outstanding Loans of
     the nondelinquent Banks, the Banks' respective pro rata shares of all
     outstanding Loans have returned to those in effect immediately prior to
     such delinquency and without giving effect to the nonpayment causing such
     delinquency.

     ss. 14.6. Holders of Notes. The Agent may deem and treat the payee of any
Note as the absolute owner or purchaser thereof for all purposes hereof until it
shall have been furnished in writing with a different name by such payee or by a
subsequent holder, assignee or transferee.

     ss. 14.7. Indemnity. The Banks ratably agree hereby to indemnify and hold
harmless the Agent from and against any and all claims, actions and suits
(whether groundless or otherwise), losses, damages, costs, expenses (including
any expenses for which the Agent has not been reimbursed by the Borrower as
required by ss. 15), and liabilities of every nature and character arising out
of or related to this Agreement, the Notes, or any of the other Loan Documents
or the transactions contemplated or evidenced hereby or thereby, or the



                                      -83-
<PAGE>


Agent's actions taken hereunder or thereunder, except to the extent that any of
the same shall be directly caused by the Agent's willful misconduct or gross
negligence.

     ss. 14.8. Agent as Bank. In its individual capacity, BKB shall have the
same obligations and the same rights, powers and privileges in respect to its
Commitment and the Loans made by it, and as the holder of any of the Notes as it
would have were it not also the Agent.

     ss. 14.9. Resignation. The Agent may resign at any time by giving 60 days'
prior written notice thereof to the Banks, the REIT and the Borrower. Upon any
such resignation, the Majority Banks shall have the right to appoint as a
successor Agent any bank whose senior debt obligations are rated not less than
"A" or its equivalent by Moody's or not less than "A" or its equivalent by S&P
and which has total assets in excess of $10 billion. Unless a Default or Event
of Default shall have occurred and be continuing, such successor Agent shall be
reasonably acceptable to the REIT and the Borrower. If no successor Agent shall
have been so appointed by the Majority Banks and shall have accepted such
appointment within 30 days after the retiring Agent's giving of notice of
resignation, then the Banks other than the Agent may appoint a successor Agent,
which shall be a bank whose debt obligations are rated not less than "A" or its
equivalent by Moody's or not less than "A" or its equivalent by S&P and which
has total assets in excess of $10 billion. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations hereunder. After any retiring Agent's
resignation, the provisions of this Agreement and the other Loan Documents shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Agent.

     ss. 14.10. Notification of Defaults and Events of Default. Each Bank hereby
agrees that, upon learning of the existence of a Default or an Event of Default,
it shall promptly notify the Agent thereof. The Agent hereby agrees that upon
receipt of any notice under this ss. 14.10 it shall promptly notify the other
Banks of the existence of such Default or Event of Default.

     ss. 14.11. Duties in the Case of Enforcement. In case one of more Events of
Default have occurred and shall be continuing, and whether or not acceleration
of the Obligations shall have occurred, the Agent shall, if (a) so requested by
the Majority Banks and (b) the Banks have provided to the Agent such additional
indemnities and assurances against expenses and liabilities as the Agent may
reasonably request, proceed to enforce the provisions of this Agreement to
exercise all or any such other legal and equitable and other rights or remedies
as it may have in respect of such Borrowing Base Property. The Majority Banks
may direct the Agent in writing as to the method and the extent of any sale or
other disposition, the Banks hereby agreeing to indemnify and hold the Agent
harmless from all liabilities incurred in respect of all actions taken or
omitted in accordance with such



                                      -84-
<PAGE>



directions, provided that the Agent need not comply with any such direction to
the extent that the Agent reasonably believes the Agent's compliance with such
direction to be unlawful or commercially unreasonable in any applicable
jurisdiction.

ss. 15. EXPENSES.

     The REIT and the Borrower agree to pay (a) the reasonable costs of
producing and reproducing this Agreement, the other Loan Documents and the other
agreements and instruments mentioned herein, (b) any taxes (including any
interest and penalties in respect thereto) payable by the Agent or any of the
Banks (other than taxes based upon the Agent's or any Bank's net income, except
that the Agent and the Banks shall be entitled to indemnification for any and
all amounts paid by them in respect of taxes based on income or other taxes
assessed by any State in which Borrowing Base Property is located, or other
taxes payable on or with respect to the transactions contemplated by this
Agreement, including any taxes payable by the Agent or any of the Banks after
the Effective Date (the REIT and the Borrower hereby agreeing to indemnify the
Agent and each Bank with respect thereto), (c) all title insurance premiums,
appraisal fees, engineer's fees, reasonable internal charges of the Agent
(determined in good faith and in accordance with the Agent's internal policies
applicable generally to its customers) for commercial finance exams and
engineering and environmental reviews and the reasonable fees, expenses and
disbursements of the Agent's Special Counsel and any local counsel to the Agent
incurred in connection with the preparation, administration or interpretation of
the Loan Documents and other instruments mentioned herein (excluding, however,
the preparation of agreements evidencing participation granted under ss. 18.5),
each closing hereunder, and amendments, modifications, approvals, consents or
waivers hereto or hereunder, (d) the reasonable fees, expenses and disbursements
of the Agent incurred by the Agent in connection with the preparation,
administration or interpretation of the Loan Documents and other instruments
mentioned herein, (e) all reasonable out-of-pocket expenses (including travel,
reasonable attorneys' fees and costs, which attorneys may be employees of any
Bank or the Agent and the fees and costs of appraisers, engineers, investment
bankers or other experts retained by any Bank or the Agent) incurred by any Bank
or the Agent in connection with the enforcement of or preservation of rights
under any of the Loan Documents against the REIT, the Borrower or any of their
Subsidiaries or the administration thereof after the occurrence of a Default or
Event of Default and (f) all reasonable fees, expenses and disbursements of any
Bank or the Agent incurred in connection with UCC searches, UCC filings or
mortgage recordings. All invoices for expenses over $25,000 shall be reviewed by
the Borrower prior to payment. The covenants of this ss. 15 shall survive
payment or satisfaction of payment of amounts owing with respect to the Notes.

ss. 16. INDEMNIFICATION.

     Each of the REIT and the Borrower agree to indemnify and hold harmless the
Agent and the Banks and each director, officer, employee, agent and Person who
controls the


                                      -85-
<PAGE>


Agent or any Bank from and against any and all claims, actions and suits whether
groundless or otherwise, and from and against any and all liabilities, losses,
damages and expenses of every nature and character arising out of or relating to
this Agreement or any of the other Loan Documents or the transactions
contemplated hereby and thereby including, without limitation, (a) any actual or
proposed use by the REIT, the Borrower or any of their Subsidiaries of the
proceeds of any of the Loans, (b) any actual or alleged infringement of any
patent, copyright, trademark, service mark or similar right of the REIT, the
Borrower or any of their Subsidiaries comprised in the Borrowing Base Property,
(c) the REIT, the Borrower or any of their Subsidiaries entering into or
performing this Agreement or any of the other Loan Documents or (d) with respect
to the REIT, the Borrower and their Subsidiaries and their respective properties
and assets, the violation of any Environmental Law, the Release or threatened
Release of any Hazardous Substances or any action, suit, proceeding or
investigation brought or threatened with respect to any Hazardous Substances
(including, but not limited to claims with respect to wrongful death, personal
injury or damage to property), in each case including, without limitation, the
reasonable fees and disbursements of counsel and allocated costs of internal
counsel (determined in good faith and in accordance with internal policies of
the Agent or a Bank, as the case may be, applicable generally to its customers)
incurred in connection with any such investigation, litigation or other
proceeding; provided, however, that the Borrower shall not be obligated under
this ss. 16 to indemnify any Person for liabilities arising from such Person's
own gross negligence, willful misconduct or breach of this Agreement. In
litigation, or the preparation therefor, the Banks and the Agent shall be
entitled to select a single law firm as their own counsel and, in addition to
the foregoing indemnity, the REIT and the Borrower agree to pay promptly the
reasonable fees and expenses of such counsel. If, and to the extent that the
obligations of the REIT and the Borrower under this ss. 16 are unenforceable for
any - reason, the REIT and the Borrower hereby agree to make the maximum
contribution to the payment in satisfaction of such obligations which is
permissible under applicable law. The provisions of this ss. 16 shall survive
the repayment of the Loan and the termination of the obligations of the Banks
hereunder.

ss. 17. SURVIVAL OF COVENANTS ETC.

     All covenants, agreements, representations and warranties made herein, in
the Notes, in any of the other Loan Documents or in any documents or other
papers delivered by or on behalf of the REIT, the Borrower or any of their
Subsidiaries pursuant hereto shall be deemed to have been relied upon by the
Banks and the Agent, notwithstanding any investigation heretofore or hereafter
made by any of them, and shall survive the making by the Banks of any of the
Loans, as herein contemplated, and shall continue in full force and effect so
long as any amount due under this Agreement or the Notes or any of the other
Loan Documents remains outstanding or any Bank has any obligation to make any
Loans. The indemnification obligations of the REIT and the Borrower provided
herein and the other Loan Documents shall survive the full repayment of amounts
due and the termination of the obligations of the Banks hereunder and thereunder
to the extent provided herein and therein.


                                      -86-
<PAGE>


All statements contained in any certificate or other paper delivered to any Bank
or the Agent at any time by or on behalf of the REIT, the Borrower or any of
their Subsidiaries pursuant hereto or in connection with the transactions
contemplated hereby shall constitute representations and warranties by the REIT,
the Borrower or such Subsidiary hereunder.

ss. 18. ASSIGNMENT AND PARTICIPATION.

     ss. 18.1. Conditions to Assignment by Banks. Except as provided herein,
each Bank may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Agreement (including all or a
portion of its Commitment Percentage and Commitment and the same portion of the
Loans at the time owing to it, and the Notes held by it and its share of Letter
of Credit Exposure); provided that (a) each of the and the Borrower shall have
given its prior written consent to such assignment, which shall not unreasonably
be withheld, (b) each such assignment shall be of a constant, and not varying,
percentage of all the assigning Bank's rights and obligations under this
Agreement, (c) each assignment shall be in an amount that is a whole multiple of
$1,000,000, and (d) the parties to such assignment shall execute and deliver to
the Agent, for recording in the Register (as hereinafter defined), an Assignment
and Acceptance, substantially in the form of Exhibit E hereto (an "Assignment
and Acceptance"), together with any Notes subject to such assignment. Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be at
least five Business Days after the execution thereof, (i) the assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Bank hereunder,
and (ii) the assigning Bank shall, to the extent provided in such assignment and
upon payment to the Agent of the registration fee referred to in ss. 18.3, be
released from its obligations under this Agreement.

     ss. 18.1A. Assignment Among Banks. Notwithstanding the provisions of ss.
18.1, in the event that the debt obligations of any Bank shall be rated less
than "Ba2" by Moody's or less than "BB" by S&P, each other Bank party hereto or
any two or more of them acting together shall be entitled on ten Business Days'
prior written notice to the Agent, the REIT, the Borrower and such Bank to
purchase the interest of such Bank hereunder, in whole and not in part, at a
purchase price equal to the outstanding principal amount of such Bank's
Commitment Percentage in the Loans advanced hereunder and its share of Letter of
Credit Exposure plus accrued and unpaid interest thereon to the purchase date,
together with any fees or other amounts that may be owing to such Bank
hereunder, including without limitation additional interest with respect to such
Bank's Commitment Percentage in any Eurodollar Rate Loan calculated as provided
in ss. 4.9. Such transfer shall be effected by the execution and delivery of an
Assignment and Acceptance.

     ss. 18.2. Certain Reprsentations and Warranties; Limitations; Covenants. By
executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows: (a) 


                                      -87-
<PAGE>



other than the representation and warranty that it is the legal and beneficial
owner of the interest being assigned thereby free and clear of any adverse
claim, the assigning Bank makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
the other Loan Documents or any other instrument or document furnished pursuant
hereto; (b) the assigning Bank makes no representation or warranty and assumes
no responsibility with respect to the financial condition of the REIT, the
Borrower and their Subsidiaries or any other Person primarily or secondarily
liable in respect of any of the Obligations, or the performance or observance by
the REIT, the Borrower and their Subsidiaries or any other Person primarily or
secondarily liable in respect of any of the Obligations of any of their
obligations under this Agreement or any of the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto; (c) such assignee
confirms that it has received a copy of this Agreement, together with copies of
the most recent financial statements referred to in ss. 6.4 and ss. 7.4 and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (d)
such assignee will, independently and without reliance upon the assigning Bank,
the Agent or any other Bank and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (e) such assignee represents
and warrants that it is an Eligible Assignee; (f) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement and the other Loan Documents as are delegated
to the Agent by the terms hereof or thereof, together with such powers as are
reasonably incidental thereto; (g) such assignee agrees that it will perform in
accordance with their terms all of the obligations that by the terms of this
Agreement are required to be performed by it as a Bank; and (h) such assignee
represents and warrants that it is legally authorized to enter into such
Assignment and Acceptance.

     ss. 18.3. Register. The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register or similar list (the "Register") for
the recordation of the names and addresses of the Banks and the Commitment
Percentages of, and principal amount of the Loans owing to the Banks from time
to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Agent and the Banks may treat each Person
whose name is recorded in the Register as a Bank hereunder for all purposes of
this Agreement. The Register shall be available for inspection by the Borrower
and the Banks at any reasonable time and from time to time upon reasonable prior
notice. Upon each such recordation, the assigning Bank agrees to pay to the
Agent a registration fee in the sum of $2,000.

     ss. 18.4. New Notes. Upon its receipt of an Assignment and Acceptance
executed by the parties to such assignment, together with each Note subject to
such assignment, the Agent shall (a) record the information contained therein in
the Register, and (b) give prompt


                                      -88-
<PAGE>



notice thereof to the REIT, the Borrower and the Banks (other than the assigning
Bank). Within five Business Days after receipt of such notice, the Borrower, at
its own expense, shall execute and deliver to the Agent, in exchange for each
surrendered Note, a new Note to the order of such Eligible Assignee in an amount
equal to the amount assumed by such Eligible Assignee pursuant to such
Assignment and Acceptance and, if the assigning Bank has retained some portion
of its obligations hereunder, a new Note to the order of the assigning Bank in
an amount equal to the amount retained by it hereunder. Such new Notes shall
provide that they are replacements for the surrendered Notes, shall be in an
aggregate principal amount equal to the aggregate principal amount of the
surrendered Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of the assigned
Notes. The surrendered Notes shall be canceled and returned to the Borrower.

     ss. 18.5. Participation. Each Bank may sell participation to one or more
banks or other entities in all or a portion of such Bank's rights and
obligations under this Agreement and the other Loan Documents; provided that (a)
each such participation shall be in an amount of not less than $5,000,000, (b)
any such sale or participation shall not affect the rights and duties of the
selling Bank hereunder to the Borrower, (c) the only rights granted to the
participant pursuant to such participation arrangements with respect to waivers,
amendments or modifications of the Loan Documents shall be the rights to approve
waivers, amendments or modifications that would reduce the principal of or the
interest rate on any Loans, extend the term or increase the amount of the
Commitment of such Bank as it relates to such participant, reduce the amount of
any fees to which such participant is entitled or extend any regularly scheduled
payment date for principal or interest and (d) no participant shall have the
right to grant further participation or assign its rights, obligations or
interests under such participation to other Persons without the prior written
consent of the Majority Banks.

     ss. 18.6. Pledge by Bank. Any Bank may at any time pledge all or any
portion of its interest and rights under this Agreement (including all or any
portion of its Note) to any of the twelve Federal Reserve Banks organized under
ss. 4 of the Federal Reserve Act, 12 U.S.C. ss. 341. No such pledge or the
enforcement thereof shall release the pledgor Bank from its obligations
hereunder or under any of the other Loan Documents.

     ss. 18.7. No Assignment by REIT or Borrower. Neither the REIT nor the
Borrower shall assign or transfer any of its rights or obligations under any of
the Loan Documents without the prior written consent of each of the Banks.

     ss. 18.8. Disclosure. The REIT and the Borrower agree that in addition to
disclosures made in accordance with standard banking practices any Bank may
disclose information obtained by such Bank pursuant to this Agreement to
assignees or participants and potential assignees or participants hereunder.


                                      -89-
<PAGE>


ss. 19. NOTICES, ETC..

     Except as otherwise expressly provided in this Agreement, all notices and
other communications made or required to be given pursuant to this Agreement or
the Note shall be in writing and shall be delivered in hand, mailed by United
States registered or certified first class mail, postage prepaid, sent by
overnight courier, or sent by telegraph, telecopy, telefax or telex and
confirmed by delivery via courier or postal service, addressed as follows:

          (a) if to the REIT or the Borrower, c/o Berkshire Realty Company,
     Inc., 470 Atlantic Avenue, Boston, Massachusetts 02210, Attention: Legal
     Department, Telecopy No. (617) 556-1408, or at such other address for
     notice as the REIT or the Borrower shall last have furnished in writing to
     the Agent and the Banks;

          (b) if to the Agent or BKB, at 100 Federal Street, Boston,
     Massachusetts 02110, Attention: Real Estate Division, Telecopy No. (617)
     434-0645 or such other address for notice as the Agent or BKB,
     respectively, shall last have furnished in writing to the REIT, the
     Borrower and the other Banks; or

          (c) if to any Bank, at such Bank's address set forth on Schedule 1
     hereto, or such other address for notice as such Bank shall have last
     furnished in writing to the Person giving the notice. Any such notice or
     demand shall be deemed to have been duly given or made and to have become
     effective (i) if delivered by hand, overnight courier or facsimile to a
     responsible officer of the party to which it is directed, at the time of
     the receipt thereof by such officer or the sending of such facsimile and
     (ii) if sent by registered or certified first-class mail, postage prepaid,
     on the third Business Day following the mailing thereof

ss. 20. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE.

     THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS, EXCEPT AS OTHERWISE
SPECIFICALLY PROVIDED THEREIN, ARE CONTRACTS UNDER THE LAWS OF THE COMMONWEALTH
OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF SUCH COMMONWEALTH (EXCLUDING THE LAWS APPLICABLE TO
CONFLICTS OR CHOICE OF LAW). THE REIT, THE BORROWER AND EACH GUARANTOR AGREE
THAT ANY SUIT FOR THE ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR
ANY FEDERAL COURT SITTING THEREIN AND CONSENT TO THE NONEXCLUSIVE JURISDICTION
OF SUCH COURT AND TO SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE
REIT, THE BORROWER OR SUCH


                                      -90-
<PAGE>


GUARANTOR BY MAIL AT THE ADDRESS SPECIFIED IN ss. 19. THE REIT, THE BORROWER AND
SUCH GUARANTOR HEREBY WAIVE ANY OBJECTION THAT ANY OF THEM MAY NOW OR HEREAFTER
HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS
BROUGHT IN AN INCONVENIENT COURT.

ss. 21. HEADINGS.

     The captions in this Agreement are for convenience of reference only and
shall not define or limit the provisions hereof

ss. 22. COUNTERPARTS.

     This Agreement and any amendment hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which when so
executed and delivered shall be an original, and all of which together shall
constitute one instrument. In proving this Agreement it shall not be necessary
to produce or account for more than one such counterpart signed by the party
against whom enforcement is sought.

ss. 23. ENTIRE AGREEMENT, ETC.

     The Loan Documents and any other documents executed in connection herewith
or therewith express the entire understanding of the parties with respect to the
transactions contemplated hereby. Neither this Agreement nor any term hereof may
be changed, waived, discharged or terminated, except as provided in ss. 25.

ss. 24. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS.

     EACH OF THE REIT, THE BORROWER, THE GUARANTORS, THE AGENT AND THE BANKS
HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM
ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY NOTE OR ANY OF
THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR
THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. EXCEPT TO THE EXTENT EXPRESSLY
PROHIBITED BY LAW, THE REIT, THE BORROWER AND EACH GUARANTOR HEREBY WAIVE ANY
RIGHT ANY OF THEM MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN
THE PRECEDING SENTENCE ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES
OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. THE REIT, THE
BORROWER AND EACH GUARANTOR (A) CERTIFY THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY BANK OR THE AGENT HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH BANK OR


                                      -91-
<PAGE>


THE AGENT WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVERS AND (B) ACKNOWLEDGE THAT THE AGENT AND THE BANKS HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH THEY ARE PARTIES
BY, AMONG OTHER THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED IN THIS ss. 24.

ss. 25. CONSENTS, AMENDMENTS, WAIVERS, ETC.

     Except as otherwise expressly provided in this Agreement, any consent or
approval required or permitted by this Agreement may be given, and any term of
this Agreement or of any other instrument related hereto or mentioned herein may
be amended, and the performance or observance by the Borrower of any terms of
this Agreement or such other instrument or the continuance of any Default or
Event of Default may be waived (either generally or in a particular instance and
either retroactively or prospectively) with, but only with, the written consent
of the Majority Banks. Notwithstanding the foregoing, (a) the REIT and the
Borrower from time to time may provide supplements amending Schedule 6.19 hereto
(but not any other Schedule hereto) without the consent of the Majority Banks
and (b) the rate of interest on and the term of the Notes, the amount of the
Commitments of the Banks, and the amount of any fee payable to a Bank hereunder
may not be changed without the written consent of each Bank affected thereby;
the definition of Majority Banks may not be amended without the written consent
of all of the Banks; and the amount of the Agent's fee payable for the Agent's
account and the provisions of ss. 14 may not be amended without the written
consent of the Agent. No waiver shall extend to or affect any obligation not
expressly waived or impair any right consequent thereon. No course of dealing or
delay or omission on the part of the Agent or any Bank in exercising any right
shall operate as a waiver thereof or otherwise be prejudicial thereto. No notice
to or demand upon the REIT or the Borrower shall entitle the REIT or the
Borrower to other or further notice or demand in similar or other circumstances.
The Majority Banks agree to respond in a timely fashion to any request for a
consent, approval, amendment, waiver or other action made by the REIT or the
Borrower hereunder.

ss. 26. SEVERABILITY.

     The provisions of this Agreement are severable, and if any one clause or
provision hereof shall be held invalid or unenforceable in whole or in part in
any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction, and shall not
in any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision of this Agreement in any jurisdiction.


                                      -92-
<PAGE>


ss. 27. CONFIDENTIALITY.

     Neither the Agent nor any Bank will make any disclosure of confidential
information furnished to it under this Agreement or any other Loan Document by
the REIT, the Borrower or any Subsidiary or Nominee unless such information
shall have become public, except:

          (a) in connection with operations under or the enforcement of this
     Agreement or any other Loan Document;

          (b) pursuant to any statutory or regulatory requirement or any
     mandatory court order, subpoena or other legal process;

          (c) to any parent or corporate affiliate of the Agent or such Bank, to
     any participant or proposed participant under ss. 18.5 or to any proposed
     assignee under ss. 18.1; provided, however, that before receiving any such
     information (i) any such Person shall have agreed to comply with the
     restrictions set forth in this ss. 27 with respect to such information and
     (ii) in addition, in the case of a proposed assignee, the consent of the
     REIT to such proposed assignee shall have been received as provided in ss.
     18.1;

          (d) to its independent counsel, auditors and other professional
     advisors with an instruction to such Person to keep such information
     confidential; and

          (e) with the prior written consent of the REIT, to any other Person.

ss. 28. NO UNWRITTEN AGREEMENTS.

     The written loan documents represent the final agreement between the
parties and may not be contradicted by evidence of prior, contemporaneous or
subsequent oral agreements of the parties. There are no unwritten oral
agreements between the parties.

ss. 29. OBLIGATIONS JOINT AND SEVERAL.

     The obligations and agreements of the REIT and the Borrower under this
Agreement and the other Loan Documents are joint and several.


                                      -93-
<PAGE>


                      [THIS PAGE INTENTIONALLY LEFT BLANK]













                                      -94-
<PAGE>




     IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as a
sealed instrument as of the date first set forth above.


                                   BERKSHIRE REALTY COMPANY, INC.



                                   By: /s/ MARIANNE PRITCHARD
                                       -----------------------------------------
                                       Marianne Pritchard
                                       Senior Vice President/Chief Financial
                                         Officer


                                   BRI OP LIMITED PARTNERSHIP

                                   By Berkshire Apartments, Inc.,
                                    its General Partner



                                   By: /s/ MARIANNE PRITCHARD
                                       -----------------------------------------
                                       Marianne Pritchard
                                       Senior Vice President/Chief Financial
                                         Officer


                                   BANKBOSTON, N.A., individually
                                     and as Agent



                                   By: /s/ [ILLEGIBLE]
                                       -----------------------------------------
                                       Authorized Officer



                                      -95-
<PAGE>






                                   BRI TEXAS APARTMENTS LIMITED PARTNERSHIP

                                   By BRI Texas Apartments-II, Inc.,
                                    its General Partner



                                   By: /s/ MARIANNE PRITCHARD
                                       -----------------------------------------
                                       Marianne Pritchard
                                       Vice President and Treasurer


                                   BRI BENCHMARK LIMITED PARTNERSHIP
                                   BRI COMMONS LIMITED PARTNERSHIP

                                   By Berkshire Apartments, Inc., the
                                    General Partner of each



                                   By: /s/ MARIANNE PRITCHARD
                                       -----------------------------------------
                                       Marianne Pritchard
                                       Senior Vice President/Chief Financial
                                        Officer


                                   BRI HUNTERS GLEN LIMITED
                                    PARTNERSHIP

                                   By BRI Hunters Glen - II, Inc.
                                    its General Partner



                                   By: /s/ MARIANNE PRITCHARD
                                       -----------------------------------------
                                       Marianne Pritchard
                                       Vice President and Treasurer


                                      -95-A
<PAGE>



                                   BRI RIDGEVIEW CHASE
                                    LIMITED PARTNERSHIP

                                   By BRI Emerald, Inc.
                                    its General Partner


                                   By: /s/ MARIANNE PRITCHARD
                                       -----------------------------------------
                                       Marianne Pritchard
                                       Senior Vice President and Treasurer


                                   BRI DIAMOND RIDGE ASSOCIATES
                                    LIMITED PARTNERSHIP

                                   By BRI Baltimore - 31, L.L.C.
                                    its General Partner

                                   By Berkshire Apartments, Inc.,
                                    its Manager


                                   By: /s/ MARIANNE PRITCHARD
                                       -----------------------------------------
                                       Marianne Pritchard
                                       Senior Vice President and Chief
                                       Financial Officer


                                   BRI FOXGLOVE ASSOCIATES, L.L.C.

                                   By Berkshire Apartments, Inc.
                                    its Manager


                                   By: /s/ MARIANNE PRITCHARD
                                       -----------------------------------------
                                       Marianne Pritchard
                                       Senior Vice President/Chief 
                                       Financial Officer


                                      -96-
<PAGE>


                                   BERKSHIRE APARTMENTS, INC.



                                   By: /s/ MARIANNE PRITCHARD
                                       -----------------------------------------
                                       Marianne Pritchard
                                       Senior Vice President/Chief Financial
                                       Officer


                                   BRI TEXAS APARTMENTS-II, INC.


                                   By: /s/ MARIANNE PRITCHARD
                                       -----------------------------------------
                                       Marianne Pritchard
                                       Vice President/Treasurer


                                   BRI HUNTERS GLEN -II, INC.


                                   By: /s/ MARIANNE PRITCHARD
                                       -----------------------------------------
                                       Marianne Pritchard
                                       Vice President and Treasurer


                                   BRI EMERALD, INC.



                                   By: /s/ MARIANNE PRITCHARD
                                       -----------------------------------------
                                       Marianne Pritchard
                                       Senior Vice President and Treasurer



                                      -97-
<PAGE>




                                   BRI BALTIMORE - 31, L.L.C.

                                   By: Berkshire Apartments, Inc. 
                                    its Manager



                                   By: /s/ MARIANNE PRITCHARD
                                       -----------------------------------------
                                       Marianne Pritchard
                                       Senior Vice President and Chief
                                       Financial Officer


                                      -98-
<PAGE>




                      [THIS PAGE INTENTIONALLY LEFT BLANK]









<PAGE>
                                                                       EXHIBIT A


                          FORM OF REVOLVING CREDIT NOTE
$                                                               __________,1998


     FOR VALUE RECEIVED, the undersigned BRI OP LIMITED PARTNERSHIP, a Delaware
limited partnership, hereby promises to pay to _______________ or order, in
accordance with the terms of the Credit Agreement hereinafter referred to, to
the extent not sooner paid, on January 31, 2000, ________________ DOLLARS ($ ),
or such amount as may be advanced by the payee hereof under said Credit
Agreement with daily interest from the date hereof, computed as provided in said
Credit Agreement, on the principal amount hereof from time to time unpaid, at a
rate per annum on each portion of the principal amount which shall at all times
be equal to the rate of interest applicable to such portion in accordance with
said Credit Agreement, and with interest on overdue principal and, to the extent
permitted by applicable law, on overdue installments of interest and late
charges at the rates provided in said Credit Agreement. Interest shall be
payable on the dates specified in said Credit Agreement, except that all accrued
interest shall be paid at the stated or accelerated maturity hereof or upon the
prepayment in full hereof.

     Payments hereunder shall be made to BankBoston, N.A., as Agent for the
payee hereof, 100 Federal Street, Boston, Massachusetts 02110.

     This Revolving Credit Note is one of one or more Revolving Credit Notes
evidencing borrowings under and is entitled to the benefits and subject to the
provisions of a certain Revolving Credit Agreement dated as of January 30, 1998,
as from time to time in effect, among the undersigned, Berkshire Realty Company,
Inc., a Delaware corporation, certain Guarantors named therein, BankBoston,
N.A., for itself and as Agent, and such other Banks as may be from time to time
named therein. The principal of this Revolving Credit Note may be due and
payable in whole or in part prior to the maturity date stated above and is
subject to mandatory prepayment in the amounts and under the circumstances set
forth in said Credit Agreement, and may be prepaid in whole or from time to time
in part, all as set forth in said Credit Agreement.

     In case an Event of Default, as defined in said Credit Agreement, shall
occur, the entire principal amount of this Revolving Credit Note may become or
be declared due and payable in the manner and with the effect provided in said
Credit Agreement.


                                       A-1
<PAGE>




     This Revolving Credit Note shall be governed by and construed in accordance
with the laws of The Commonwealth of Massachusetts (without giving effect to the
conflict of laws rules of any jurisdiction).

     The undersigned maker and all guarantors and endorsers, hereby waive
presentment, demand, notice, protest and all other demands and notices in
connection with the delivery, acceptance, performance and enforcement of this
Revolving Credit Note, except as specifically otherwise provided in said Credit
Agreement, and assent to extensions of time of payment or forbearance or other
indulgence without notice.

                                        BRI OP LIMITED PARTNERSHIP

                                        By Berkshire Apartments, Inc.,
                                         its General Partner


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










                                       A-2

<PAGE>




                                                                       EXHIBIT B


                         FORM OF LOAN OR CREDIT REQUEST


BankBoston, N.A., for Itself
and as Agent
100 Federal Street
Boston, Massachusetts 02110
Attn: Real Estate Division

Ladies and Gentlemen:

     Pursuant to the provisions of ss. 2.6 or ss. 2.9 of the Revolving Credit
Agreement dated as of January 30, 1998 (the "Credit Agreement"), among BRI OP
Limited Partnership (the "Borrower"), Berkshire Realty Company, Inc., certain
Guarantors named therein, BankBoston, N.A., for itself and as Agent, and the
other Banks from time to time party thereto, the Borrower hereby requests and
certifies as follows:

     1. Revolving Loan. The Borrower hereby requests a Revolving Loan under ss.
2.1 of the Credit Agreement:

          rincipal Amount: $

          ype (Eurodollar, Base Rate):
          rawdown Date:                  , 19

          nterest Period:

by credit to the general account of the Borrower with the Agent at the Agent's
Head Office.

     2. Letter of Credit. The Borrower hereby requests a Letter of Credit under
ss. 2.9 of the Credit Agreement:

          Stated Amount: $

          Issue Date:

          Termination Date:

          Beneficiary:


<PAGE>




          Delivery Address:

     3. No Default. The undersigned chief financial or chief accounting officer
of the Borrower certifies that the Borrower is and will be in compliance with
all covenants under the Loan Documents after giving effect to the making of the
Revolving Loan or the issuance of the Letter of Credit requested hereby.
Attached to this Loan or Credit Request is a Compliance Certificate prepared on
a pro forma basis using the financial statements of the Borrower most recently
provided or required to be provided under ss.6.4 or ss.7.4 of the Credit
Agreement adjusted in the best good-faith estimate of the Borrower to give
effect to the making of the Revolving Loan or the issuance of the Letter of
Credit requested hereby.

     4. Representations True. Each of the representations and warranties of the
Borrower and its Subsidiaries contained in the Credit Agreement, in the other
Loan documents or in any document or instrument delivered pursuant to or in
connection with the Credit Agreement was true as of the date as of which it was
made and shall also be true at and as of the Drawdown Date for the Revolving
Loan or the date of issue of the Letter of Credit requested hereby, with the
same effect as if made at and as of such Drawdown Date or date of issue (except
to the extent of changes resulting from transactions contemplated or permitted
by the Credit Agreement and the other Loan Documents and changes occurring in
the ordinary course of business that singly or in the aggregate are not
materially adverse, and except to the extent that such representations and
warranties relate expressly to an earlier date) and no Default or Event of
Default has occurred and is continuing.

     5. Other Conditions. All other conditions to the making of the Revolving
Loan or the issuance of the Letter of Credit requested hereby set forth in ss.
11 of the Credit Agreement have been satisfied.

     6. Drawdown Date. Except to the extent, if any, specified by notice
actually received by the Agent prior to the Drawdown Date specified above, the
foregoing representations and warranties shall be deemed to have been made by
the Borrower on and as of such Drawdown Date.

     7. Definitions. Terms defined in the Credit Agreement are used herein with
the meanings so defined.




                                       B-2
<PAGE>




      IN WITNESS WHEREOF, I have hereunto set my hand this ________ day of _____
199_.

                                        BRI OP LIMITED PARTNERSHIP

                                        By Berkshire Apartments, Inc.,
                                         its General Partner


                                        By
                                           ------------------------------------
                                           Chief Financial or Chief
                                           Accounting Officer




                                       B-3
<PAGE>




                      [THIS PAGE INTENTIONALLY LEFT BLANK]









<PAGE>




                                                                       EXHIBIT C

                                     FORM OF
                             COMPLIANCE CERTIFICATE



BankBoston, N.A., for Itself and
as Agent
100 Federal Street
Boston, Massachusetts 02110
Attn: Real Estate Division

Ladies and Gentlemen:

     Reference is made to the Revolving Credit Agreement dated as of January 30,
1998 (the "Credit Agreement") by and among BRI OP Limited Partnership, a
Delaware limited partnership (the "Borrower"), Berkshire Realty Company, Inc., a
Delaware corporation, certain Guarantors named therein, BankBoston, N.A., for
itself and as Agent, and the other Banks from time to time party thereto. Terms
defined in the Credit Agreement and not otherwise defined herein are used herein
as defined in the Credit Agreement.

     Pursuant to ss.6.4 or ss.7.4 of the Credit Agreement, the Borrower is
furnishing to you herewith [or has most recently furnished to you] the financial
statements of the Borrower and its Subsidiaries for the fiscal period ended
__________ (the "Balance Sheet Date"). Such financial statements have been
prepared in accordance with generally accepted accounting principles and present
fairly, in all material respects, the financial position of the Borrower and the
Subsidiaries covered thereby at the date thereof and the results of their
operations for the periods covered thereby, subject in the case of interim
statements only to normal year-end audit adjustments and the addition of
footnotes.

     This certificate is submitted in compliance with the requirements of ss.
2.6, ss. 2.9, ss.7.4(g), ss.7.5(e), ss.8.1(o), ss.8.9 or ss. 11.5(b) of the
Credit Agreement. If this certificate is provided under a provision other than
ss.7.4(z), the calculations provided below are made on a pro forma basis using
the financial statements of the Borrower and its Subsidiaries as of the Balance
Sheet Date adjusted in the best good-faith estimate of the Borrower to give
effect to the making of a Revolving Loan or disposition of property that
occasions the preparation of this certificate; and the nature of such event and
the Borrower's estimate of its effects are set forth in reasonable detail in an
attachment hereto. The undersigned officer of the Borrower is its chief
financial or chief accounting officer.

     The undersigned officer has caused the provisions of the Credit Agreement
to be reviewed and has no knowledge of any Default or Event of Default. [Note:
If the signer does have knowledge of any Default or Event of Default, the form
of certificate should be revised


                                       C-1
<PAGE>




to specify the Default or Event of Default, the nature thereof and the actions
taken, being taken or proposed to be taken by the Borrower with respect
thereto.]

     The Borrower is providing the following information to demonstrate
compliance as of the Balance Sheet Date with the following covenants:

1.   ss. 8.3(j)). Other Investments.

     A.   Consolidated Total Assets

          Consolidated Total Assets (from Schedule 1, Part A)         $_________

     B.   Other Investments (value to be calculated as
          provided in the definition of "Consolidated Total
          Assets" in ss. 1.1 if applicable, otherwise at book
          value)

          (i)  Loans secured by mortgages or deeds of trust on
               real property, referred to in clause (i) of ss.
               8.3(j) (per balance sheet)                             $_________

          (ii) Multifamily housing facilities "Under
               Development" and raw land, referred to in
               clause (ii) of ss. 8.3(j) (per balance sheet)           _________

          (iii) "Other Investments" in Real Estate (per
               balance sheet)                                          _________

          (iv) Investments in real estate companies other than
               Subsidiaries                                            _________

               Total (i) through (iv)                                 $_________


     B divided by A equals (may not exceed 25%):                       ________%

     Item B (ii) divided by A equals (may not exceed 15%):             ________%

2.   ss. 8.8. Borrower Distributions.

     A.   Consolidated Funds From Operations

          Consolidated net income for most recent quarter 
               (per  income statement)                                $_________


                                       C-2
<PAGE>




          Minus gains (or losses) from debt restructuring
          and sales of property                                       (________)

          Plus depreciation and amortization                          __________

          Adjustments for unconsolidated partnerships and
          joint ventures                                              __________

          Subtotal for most recent quarter                            $_________

          Consolidated Funds From Operations for three prior
          quarters:

               Quarter ended _________                                 _________

               Quarter ended _________                                 _________

               Quarter ended _________                                 _________

          Total                                                       $_________
 
     B.   Distributions for Test Period

          Subtotal for most recent quarter                            $_________

          Distributions for three prior quarters:

               Quarter ended _________                                 _________

               Quarter ended _________                                 _________

               Quarter ended _________                                 _________

          Total                                                       $_________
 



          B divided by A equals (may not exceed 90% except
          to extent that Distributions are required to
          maintain REIT Status):                                      _________%

3.   ss. 8.10(c). Interest Rate Protection.
         
     A.   Consolidated Total Assets

          Consolidated Total Assets (per Schedule 1, Part A)          $_________


                                       C-3
<PAGE>




          Times 20%                                                   __________

     B.   Floating Rate and Short-Term Debt

          Revolving Loans                                             $_________

          Other floating rate debt                                    __________

          Other short-term debt                                       __________

          Total                                                       $_________

     C.   B minus A =                                                 $_________

     D.   Notional amount of interest rate protection                 $_________

          D must exceed C.

4.   ss. 9.1. Leverage Ratio.

     A.   Consolidated Total Indebtedness

          Consolidated Total Indebtedness (per Schedule 1,
          Part B)                                                     $_________

     B.   Consolidated Total Assets

          Consolidated Total Assets (per Schedule 1, Part A)          __________

     A divided by B (may not exceed 55%):                             _________%

5.   ss. 9.2. Interest Coverage.

     A.   Consolidated EBITDA for Test Period

          Consolidated Net Income for most recent quarter
          (per income statement)                                      $_________

          Plus depreciation and amortization                          __________

          Plus Interest Expense                                       __________

          Plus taxes                                                  __________



                                       C-4
<PAGE>


          Plus extraordinary or nonrecurring losses                   __________

          Minus extraordinary or nonrecurring gains                   (________)

          Subtotal for most recent quarter                            $_________

          Consolidated EBITDA for three prior quarters:

          Quarter ended _________                                     _________

          Quarter ended _________                                     _________

          Quarter ended _________                                     _________

          Total                                                       $_________

     B.   Consolidated Interest Expense

          Subtotal for most recent quarter (per income statement)     $_________

          Consolidated Interest Expense for three prior quarters:

          Quarter ended _________                                     __________

          Quarter ended _________                                     __________

          Quarter ended _________                                     __________

          Total                                                       $_________

     A divided by B equals (may not be less than 200%):               _________%

6.   ss. 9.3. Debt Service Coverage.

     A.   Consolidated Operating Cash Flow for Test Period

          Consolidated net income for most recent quarter
          (per income statement)                                      $_________

          Minus gains (or losses) from debt restructuring
          and sales of property                                       (________)


                                       C-5
<PAGE>


          Plus depreciation and amortization                          __________

          Adjustments for unconsolidated partnerships and
          joint ventures                                              __________

          Subtotal = Funds From Operations                            $_________

          Plus Interest Expense                                       __________

          Minus an allowance for capital expenditure
          requirements computed at the annual rate of $200
          per unit for multifamily housing projects as
          provided in the definition of "Operating Cash
          Flow" in ss. 1.1                                            (________)

          Subtotal for most recent quarter                            $_________

          Consolidated Operating Cash Flow for three prior 
          quarters:

          Quarter ended _________                                     _________

          Quarter ended _________                                     _________

          Quarter ended _________                                     _________

          Total                                                       $_________

     B.   Consolidated Fixed Charges for Test Period

          Consolidated Interest Expense for most recent
          quarter (per income statements)                             $_________

          Plus principal payments (excluding principal paid
          from proceeds of permitted refunding debt)                  __________

          Plus preferred Distributions                                __________

          Subtotal for most recent quarter                            $_________

          Consolidated Fixed Charges for three prior
          quarters:



                                       C-6
<PAGE>


          Quarter ended _________                                     __________

          Quarter ended _________                                     __________

          Quarter ended _________                                     __________

          Total                                                       $_________

     A divided by B equals (may not be less than 175 %):

7.   ss. 9.4. Minimum Consolidated Tangible Net Worth

     A.   Consolidated Tangible Net Worth

          Partners equity (per balance sheet)                         $_________

          Minus adjustments for certain increases in
          partners' equity                                            (________)

          Minus treasury stock, ESOP receivables
          and guarantees of ESOP debt                                 (________)

          Minus goodwill and other intangibles                        (________)

          Total                                                       $_________

     B.   Certain Increases in Consolidated Capital 
          (since December 31, 1997)

          Net amount realized from issuance of equity
          securities                                                  $_________

          Plus amount realized from receipt of
          capital contributions                                       __________

          Total                                                       $_________

          A minus ($__________ plus 75 % of B) equals:                __________
          (A must equal or exceed $__________ plus 75% of B.)

8.   Secured Debt

     A.   Secured Debt


                                      C-7
<PAGE>


          Secured Non-recourse Indebtedness                           $_________

          Capitalized Leases and purchase money debt                  __________

          FNMA secured debt                                           __________

          Durham construction loan                                    __________

          Other permitted secured debt                                __________

          Total                                                       $_________

     B.   Consolidated Total Assets

          From item 1(A)above                                         $_________

          A divided by B (may not exceed 40%) =                       _________%

9.   Recourse Debt

          Capitalized Leases and purchase money debt                  $_________

          FNMA debt (unless non-recourse)                             __________

          Certain existing debt                                       __________

          Durham construction loan                                    __________

          Other permitted debt                                        __________

          Total (may not exceed $80,000,000)=                         $_________


                                      C-8
<PAGE>


     IN WITNESS WHEREOF, the undersigned, officer of the Borrower has set his or
her hand and seal this ______ day of _______, 199_.


                                        BRI OP LIMITED PARTNERSHIP

                                        By Berkshire Apartments, Inc.,
                                         its General Partner


                                        By:
                                           -----------------------------------
                                           Chief Financial or Chief
                                           Accounting Officer


                                      C-9
<PAGE>



                        Compliance Certificate Schedule 1

                  Calculation of Consolidated Total Assets and
                      Consolidated Total Indebtedness as of
                               Balance Sheet Date


A.   Consolidated Total Assets

     1.   Aggregate value of Real Estate owned in fee (from
          Worksheet #1, attached):                                    $_________

     Plus

     2.   Aggregate value of Real Estate owned by joint
          venture or unconsolidated subsidiary (from
          Worksheet #2, attached):                                    $_________

     Plus

     3.   Aggregate book value of mortgage loans owned
          (excluding loans on properties owned in fee by the
          Borrower or a Consolidated Subsidiary) (from
          balance sheet)                                              $_________

          Minus (without double counting) related reserves            (________)

          Total                                                       $_________

     Plus

     4.   Aggregate book value of raw land and construction
          work in progress (not included above) (from
          balance sheet)                                              $_________

     Plus

     5.   Aggregate book value of other tangible or
          financial assets (from balance sheet)                       $_________

          Minus (without double counting) related reserves            (________)



                                      C-10
<PAGE>




          Total                                                       $_________

     Subtotal of Items 1 through 5                                    $_________

     Minus

     6.   All intangible assets included above, including
          without limitation any goodwill or deferred debt
          cost                                                        (________)

     7.   Mortgage-backed securities securing Indebtedness
          excluded from Consolidated Total Indebtedness               (________)

     8.   Any other deductions                                        (________)

     Subtotal deductions                                              (________)

     Total=                                                           $_________

B.   Consolidated Total Indebtedness

     All liabilities (from balance sheet)                             $_________

     Minus minority interests recorded as liabilities on the
     balance sheet of any Subsidiary                                  (________)

     Minus Indebtedness secured solely by mortgage-backed
     securities                                                       (________)

     Plus additional contingent liabilities not included
     above                                                            __________

     Plus guarantees of debt of joint ventures not included
     above                                                            __________

     Total                                                            $_________




Note:     If any guarantee is valued at less than the full principal amount
          thereof pursuant to the last sentence of the definition of
          "Consolidated Total Indebtedness", provide a full explanation below or
          on a separate sheet.



                                      C-11
<PAGE>




Compliance Certificate Schedule I -- Worksheet #1: 

     Value of Real Estate Owned in Fee by Borrower or Consolidated Subsidiary


A.   Properties Held for More Than One Year


Name          Adjusted N.O.I.             Capitalization Rate          Va1ue
----          ---------------             -------------------          -----

              $______________                    9%                    $____




                                                Total Value of
                                                Category A:           $_______


                                      C-12


<PAGE>



B.   Properties Held for Less Than One Year

                                                  Cost
                                               (including
                   Acquisition                  completed
 Name                Date                      improvements             Value
 ----                ----                      ------------             -----


                                               $___________            $______




                                                  Total Value of
                                                  Category B:          $_______

                                                  Total Item 1:        $
                                                                        ========


                                      C-13


<PAGE>




Compliance Certificate Schedule I -- Worksheet #2:

     Value of Real Estate Owned in Part by Joint Venture or Unconsolidated
     Subsidiary


A.   Properties Held for More Than One Year

<TABLE>
<CAPTION>
   
    Joint  
   Venture     Property      Adjusted   Capitalization     Gross      Net      BRI 
  Discount*     Value         N.O.I.         Rate          Value      Debt     Value*    Percentage*
  ---------     -----         ------    --------------     -----      ----     ------    -----------
<S>            <C>           <C>            <C>            <C>        <C>       <C>         <C>          <C> 
                             $______         __%           $___       $___       ___%        ___%        $______


                                                                                        Total Value of
                                                                                        Category A:      $______
</TABLE>


----------
*    If applicable.


                                      C-14

<PAGE>



B.   Properties Held for Less Than One Year

<TABLE>
<CAPTION>
                                             Cost
                                          (including      Actual
     Joint                Acquisition      completed      Adjusted     Gross                Net               BRI
    Venture    Property     Date          improvements)    N.O.I.      Value       Debt    Value*      %*   Discount*     Value
    -------    --------     ----          -------------    ------      -----      ------   ------     ---   ---------     -----
<S>            <C>           <C>            <C>            <C>        <C>         <C>      <C>        <C>      <C>        <C>
                                           $_________     $______     $______     $_____   $_____     __%      10%        $_____



                                                                                  Total Value of
                                                                                  Category B:       $________
                                                                                 
                                                                                 
                                                                                  Total Item 2 =    $
                                                                                                     =========
</TABLE>

----------
*    If applicable.


                                      C-15


<PAGE>
                                                                       EXHIBIT D

                                     FORM OF
                           BORROWING BASE CERTIFICATE

BankBoston, N.A., for Itself and
     as Agent
100 Federal Street
Boston, Massachusetts 02110
Attn: Real Estate Division

Ladies and Gentlemen:

     Reference is made to the Revolving Credit Agreement dated as of January 30,
1998 (the "Credit Agreement") by and among BRI OP Limited Partnership, a
Delaware limited partnership (the "Borrower"), Berkshire Realty Company, Inc., a
Delaware corporation, certain Guarantors named therein, BankBoston, N.A., for
itself and as Agent, and the other Banks from time to time party thereto. Terms
defined in the Credit Agreement and not otherwise defined herein are used herein
as defined in the Credit Agreement.

     Pursuant to ss. 6.4 or ss. 7.4 of the Credit Agreement, the Borrower is
furnishing to you herewith [or has most recently furnished to you] the financial
statements of the Borrower and its Subsidiaries for the fiscal period ended
__________ (the "Balance Sheet Date").

     This certificate is submitted in compliance with the requirements of ss.
2.6, ss. 2.9, ss. 7.4(m), ss. 7.5(e), ss. 8.1(o) or ss. 8.9 of the Credit
Agreement. If this certificate is provided under a provision other than ss.
7.4(m), the calculations provided below are made on a pro forma basis using the
financial statements of the Borrower and its Subsidiaries as of the Balance
Sheet Date adjusted in the best good-faith estimate of the Borrower to give
effect to the disposition of property that occasions the preparation of this
certificate; and the nature of such event and the Borrower's estimate of its
effects are set forth in reasonable detail in an attachment hereto. The
undersigned officer of the Borrower is its chief financial or chief accounting
officer.

                                      D-1

<PAGE>




                            I. BORROWING BASE VALUES

A.   Eligible Real Estate

                       Adjusted Net
                     Operating Income
                    for Four Quarters
                      Ending Balance                          Capitalized Value
Name                    Sheet Date                                 @ 9% Rate
----                    ----------                                 ---------
                     $                                        $



B.   Eligible Real Estate Recently Acquired

                Purchase                 Capitalized
Name            Price                    Improvements                     Total
----            -----                    ------------                     -----

                $                        $                                $



C.   Other Borrowing Base Property

         Name                             Appraised Value
         ----                             ---------------
                                          $



                                      D-2
<PAGE>

                               II. ADVANCE VALUES


A.   Borrowing Base Properties

                                                                       Lesser
           60% of                  Cash                               of Values
          Borrowing                Flow            Tax                minus Tax
Name      Base Value               Value         Adjustment           Adjustment
----      ----------               -----         ----------           ----------
          $                        $             ($         )         $



                                   Total=                             $
                                                                      ==========


B.   Borrowing Base Properties Recently Approved

                                          60% of
                                          Borrowing
         Name                             Base Value
         ----                             ----------
                                          $

                 Total=                   $
                                          =========



                                      D-3
<PAGE>

                             III. J.V. ADVANCE VALUES

               40% or 5O%                                                J.V.
               Appraisal           Percentage      Tax                  Advance
Name         (as applicable}       Ownership       Adjustment            Maine
----         ---------------       ---------       ----------            -----
               $                          %        ($       )



                                    Total=                             $
                                                                       =========


                                      D-4
<PAGE>


                         IV. BORROWING BASE AVAILABILITY


         Advance Values of Borrowing
           Base Properties (item IIA)                             $____________

         Advance Values of Borrowing
            Base Properties recently
            acquired (item IIB)

________________
         J.V. Advance Values (item III)                           _____________
                                                 Subtotal         $
                                                                  =============

         Minus amount by which any individual
            Advance Value or J.V. Advance
            Value exceeds 15% of Subtotal                         (____________)

         Minus amount by which aggregate 
            Advance Values and/or J.V. 
            Advance Values of properties 
            that are not multifamily 
            having facilities exceed 10% 
            of Subtotal                                           (____________)

         Minus amount by which J.V.
            Advance Values (item III)
            exceed 10% of Subtotal                                (____________)

                                             Total=                $
                                                                   ============

     In connection with the foregoing, the undersigned certifies that each of
the Borrowing Base Properties listed above, as of the date hereof, meets all
requirements of being Eligible Real Estate, except only for requirements which
were specifically excepted by the Majority Banks in their approval of Real
Estate that is not Eligible Real Estate to become Borrowing Base Property under
the Credit Agreement.


                                      D-5
<PAGE>

     IN WITNESS WHEREOF, the undersigned officer of the Borrower has set his or
her hand and seal this __ day of _______,199_

                                       BRI OP LIMITED PARTNERSHIP

                                       By Berkshire Apartments, Inc.,
                                          its General Partner



                                       By:_______________________________
                                           Chief Financial or Chief
                                            Accounting Officer


                                      D-6
<PAGE>

                                                                       EXHIBIT E



                                     FORM OF

                            ASSIGNMENT AND ACCEPTANCE

                         Dated as of ____________, 19__



     Reference is made to the Revolving Credit Agreement dated as of January 30,
1998 (as amended and in effect from time to time, the "Credit Agreement"), by
and among BRI OP Limited Partnership, a Delaware limited partnership (the
"Borrower") Berkshire Realty Company, Inc., a Delaware corporation (the "REIT"),
certain Guarantors named therein, the financial institutions listed from time to
time party thereto (collectively, the "Banks") and BankBoston, N.A., as agent
(in such capacity, the "Agent") for the Banks. Terms defined in the Credit
Agreement and used herein without definition shall have the respective meanings
herein assigned to such terms in the Credit Agreement.

     [Name of Assigning Lender] (the "Assignor") and [Name of Assignee] (the
"Assignee") hereby agree as follows:

     1. The Assignor hereby sells and assigns to the Assignee and the Assignee
hereby purchases and assumes from the Assignor, a ___________ percent (___%)
interest in all of the Assignor's rights and obligations under the Credit
Agreement as of the Assignment Date (as defined in paragraph 4 below),
including, without limitation, (a) the Assignor's obligation to make Loans
thereunder and (b) the Assignor's interest in all unpaid interest and commitment
fees accrued as of the Assignment Date.

     2. (a) The Assignor (i) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (ii) represents that as
of the date hereof, before giving effect to the assignment contemplated hereby,
its Commitment is $__________ and the aggregate outstanding principal balance of
the Loans made by it equals $________; (iii) makes no representation or warranty
and assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Loan Documents or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of any Loan Document or any other instrument or document furnished pursuant
thereto, other than that it is the legal and beneficial owner of the interest
being assigned by it hereunder and that such interest is free and clear of any
adverse claim; (iv) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or the
REIT or the performance or observance by the Borrower or the REIT of its
obligations under the other Loan Documents to which it is a party or any other
instrument or document delivered or executed pursuant thereto; and (v) attaches
to the copy hereof forwarded to the Agent the Note held by it.


                                      E-1
<PAGE>

         (b) The Assignor requests that the Agent exchange its Note for new
Notes executed by the Borrower and payable to each of the Assignor and the
Assignee as follows:

        Notes Payable to 
          the Order of:                      Amount of Notice
          -------------                      ----------------

        [Assignor]                          $_________________

        [Assignee]                          $_________________

                                                        
     3. The Assignee (a) represents and warrants that it is legally authorized
to enter into this Assignment and Acceptance; (b) confirms that it has received
a copy of the Loan Documents, together with copies of the most recent financial
statements delivered pursuant to ss. 7.4 of the Credit Agreement and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (c) agrees
that it will, independently and without reliance upon the Assignor, any other
Bank, or the Agent and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents; (d) appoints and authorizes the
Agent to take such action as agent on its behalf and to exercise such powers as
are reasonably incidental thereto pursuant to the terms of the Loan Documents;
(e) agrees that it will perform in accordance with their terms all the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Bank; and (f) agrees not to disclose confidential
information of the Borrower or any Subsidiary, Nominee or Indemnitor as and to
the extent provided in ss. 27 of the Credit Agreement.

     4. The effective date for this Assignment and Acceptance shall
be__________, 19__ (the "Assignment Date"). Following the execution of this
Assignment and Acceptance, each party hereto and each Person consenting hereto
shall deliver its duly executed counterpart hereof to the Agent for acceptance
and recording in the Register by the Agent.

     5. Upon such acceptance and recording, from and after the Assignment Date,
(i) the Assignee shall be a party to the Credit Agreement and, to the extent
provided in this Assignment and Acceptance, have the rights and obligations of a
Bank thereunder, and (ii) the Assignor shall, with respect to that portion of
its interest under the Credit Agreement assigned hereunder, relinquish its
rights and be released from its obligations under the Credit Agreement.

     6. Upon such acceptance and recording, from and after the Assignment Date,
the Agent shall make all payments in respect of the rights and interests
assigned hereby (including payments of principal, interest, fees and other
amounts) to the Assignee. On the Assignment Date, the Assignee wil1 pay to the
Agent for the pro rata account of the Assignor an amount


                                      E-2
<PAGE>

equal to the percentage of the Assignor's interest assumed by the Assignee
hereunder, times the aggregate outstanding principal amount of the Loans made by
the Assignor.

     7. THIS ASSIGNMENT AND ACCEPTANCE IS INTENDED TO TAKE EFFECT AS A SEALED
INSTRUMENT FOR ALL PURPOSES TO BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS (WITHOUT REFERENCE TO CONFLICT OF
LAWS).

     8. This Assignment and Acceptance may be executed in any number of
counterparts which shall together constitute but one and the same agreement.

     IN WITNESS WHEREOF, intending to be legally bound, each of the undersigned
has caused this Assignment and Acceptance to be executed on its behalf by its
officer thereunto duly authorized, as of the date first above written.


                                   [ASSIGNOR]



                                   By: _________________________
                                       Title:


                                   [ASSIGNEE]



                                   By: _________________________
                                       Title:



CONSENTED TO:



BANKBOSTON, N.A.,
as Agent



By: _________________________
    Authorized Officer


                                      E-3
<PAGE>







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<PAGE>


                                                                      SCHEDULE 1


                              BANKS AND COMMITMENTS

              Name and                                        Commitment
              Address               Commitment                Percentage
              -------               ----------                ----------

BankBoston, N.A.                   $130,000,000                   100%
100 Federal Street
Boston, Massachusetts 02110

Attn:   Real Estate Division

Fax:    (617) 434-0645


Eurodollar Lending Office:

Same as above

                                   ------------                   ----
                                   $130,000,000                   100%









<PAGE>







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<PAGE>

SCHEDULE 2              BORROWING BASE PROPERTIES

<TABLE>
<CAPTION>
                                                      Borrowing
     Name                  Location                   Base Values     Advance Values               Owner
     ----                  --------                   -----------     --------------               -----
<S>                     <C>                          <C>               <C>          <C>
Benchmark               Irving, Texas                $  9,450,941      $ 5,670,565  BRI Benchmark Limited Partnership
Hunters Glen            Plano, Texas                   11,812,909        7,087,745  BRI Hunters Glen Limited Partnership
Providence              Dallas, Texas                   6,909,097        4,145,458  BRI Commons Limited Partnership
Stoneledge Plantation   Greenville, South Carolina     13,100,281        7,860,169  BRI OP Limited Partnership
Sun Chase               Bradenton, Florida              5,905,495        3,543,297  BRI OP Limited Partnership
Huntington Brook        Dallas, Texas                  12,312,479        7,387,487  BRI Texas Apartments Limited Partnership
Huntington Lake         Dallas, Texas                  18,333,529       11,000,117  BRI Texas Apartments Limited Partnership
Huntington Ridge        Irving, Texas                   9,621,428        5,772,857  BRI Texas Apartments Limited Partnership
Summer Place            Dallas, Texas                   7,542,865        4,525,719  BRI Texas Apartments Limited Partnership
Sweetwater              Richardson, Texas              20,732,895       12,439,737  BRI Texas Apartments Limited Partnership
Liriope                 Belcamp, Maryland               7,623,956        4,574,374  BRI Foxglove Associates L.L.C.
Ridgeview Chase         Westminster, Maryland          11,923,488        7,154,093  BRI Ridgeview Chase Limited Partnership 
Diamond Ridge           Baltimore, Maryland             4,646,934        2,788,160  BRI Diamond Ridge Associates Limited Partnership
Hilltop                 Baltimore, Maryland             1,259,502          755,701  BRI OP Limited Partnership
                                                     -----------       -----------
                                                     $141,175,799      $84,705,479
                                                     ============      ===========
</TABLE>

<PAGE>



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<PAGE>




SCHEDULE 6.3               BALANCE SHEET EXCEPTIONS

                                      NONE


<PAGE>




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<PAGE>




SCHEDULE 6.7                      LITIGATION

                                      NONE




<PAGE>




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<PAGE>




SCHEDULE 6.16                     BENEFIT PLANS


(I)    Berkshire Realty Company, Inc. 401(k) Plan 
       Plan 100

(II)   Berkshire Group's Employee and Dependent Group Medical and Dental Plan
       Plan 501

(III)  Berkshire Financial Company Limited Partnership Employee Group Life and
       Accidental Death and Dismemberment Plan 
       Plan 502

(IV)   Berkshire Group Employee Group Long Term Disability Plan 
       Plan 503

(V)    Berkshire Group Employee Group Business Travel Life Insurance Plan 
       Plan 504

(VI)   BRI OP Limited Partnership Supplemental Executive Retirement Plan

(VII)  BRI OP Limited Partnership Deferred Compensation Plan





<PAGE>




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<PAGE>



<TABLE>
<CAPTION>
====================================================================================================================================
                                                            SCHEDULE 6.19
                                                   BERKSHIRE REALTY COMPANY, INC.
------------------------------------------------------------------------------------------------------------------------------------
   ENTITY NAME                          PURPOSE/OWNER OF                         GENERAL PARTNER(S)           LIMITED PARTNER(S)
====================================================================================================================================
<S>                            <C>                                           <C>                          <C>
BRI OP Limited Partnership     Arbors at Breckinridge Apartments, Arbors     Berkshire Apartments, Inc.        Berkshire Realty
                               at Breckinridge Land, The Avalon on                                         Company, Inc. and others
                               Abernathy, The Berkshires Apartments,
                               British Woods Apartments, Brookfield
                               Trace Apartments, Brookwood Valley
                               Apartments, Chestnut Hill Villa
                               Apartments, College Plaza Shopping
                               Center, Cumberland Cove Apartments,
                               Cumberland Cove II, Durham Land, East
                               Lake Village Apartments, Hilltop
                               Apartments, Highland Ridge Apartments,
                               Huntington Downs Apartments, The Lakes
                               at Jacaranda Apartments, The Oaks
                               Apartments, Polos West Apartments,
                               Roper Mountain Woods Apartments,
                               Southpoint at Massapequa Apartments,
                               Stoneledge Plantation Apartments,
                               Sunchase Apartments, Tara Crossing
                               Shopping Center, Windover Apartments
                               and Woodland Meadows Land
------------------------------------------------------------------------------------------------------------------------------------
Bill Altamonte Limited         Altamonte Bay Club Apartments                 BRI Altamonte-II, Inc.       BRI OP Limited Partnership
Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Arborview Associates       Arborview Apartments                          BRI Emerald, Inc.            BRI OP Limited Partnership
Limited Partnership     
------------------------------------------------------------------------------------------------------------------------------------
BRI Benchmark Limited          Benchmark Apartments                          Berkshire Apartments, Inc.   BRI OP Limited Partnership
Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Calvert's Walk Associates  Calvert's Walk Apartments                     BRI Emerald, Inc.            BRI OP Limited Partnership
Limited Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Commons Limited            The Providence Apartments                     Berkshire Apartments, Inc.   BRI OP Limited Partnership
Partnership                    
------------------------------------------------------------------------------------------------------------------------------------
BRI Conventry Park Limited     Golf Side Apartments                          Berkshire Apartments, Inc.   BRI OP Limited Partnership
Partnership  
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>



<PAGE>

<TABLE>
<CAPTION>
====================================================================================================================================
                                                            SCHEDULE 6.19
                                                   BERKSHIRE REALTY COMPANY, INC.
------------------------------------------------------------------------------------------------------------------------------------
   ENTITY NAME                          PURPOSE/OWNER OF                         GENERAL PARTNER(S)           LIMITED PARTNER(S)
====================================================================================================================================
<S>                            <C>                                           <C>                          <C>
BRI Countrywood General        Countrywood Apartments                        BRI River Oaks Limited                 N/A
Partnership                                                                  Partnership
                                                                             BRI Texas Apartments Limited
                                                                             Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Diamond Ridge Associates   Diamond Ridge Apartments                      BRI Baltimore - 31, L.L.C.   BRI OP Limited Partnership
Limited Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Fairbrook Associates       Stratton Meadows Apartments                   BRI Emerald, Inc.            BRI OP Limited Partnership
Limited Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Fourth Rolling Road        Courtleigh Apartments                         BRI Emerald, Inc.            BRI OP Limited Partnership
Associates Limited Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Frederick Road Associates  Jamestown Apartments                          BRI Baltimore - 22, L.L.C.             N/A
                                                                             BRI OP Limited Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Frederick Road II General  Maker of note collateralized by               BRI Baltimore- 22, L.L.C.              N/A
Partnership                    Jamestown Apartments                          BRI Frederick Road Associates
------------------------------------------------------------------------------------------------------------------------------------
BRI Harper's Mill Limited      BRI Harper's Mill Apartments                  BRI Emerald, Inc.            BRI OP Limited Partnership
Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Henley Associates Limited  Rolling Wind Apartments                       BRI Emerald, Inc.            BRI OP Limited Partnership
Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Heritage Hill Limited      The Channel Apartments                        BRI Emerald, Inc.            BRI OP Limited Partnership
Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Hidden Oaks Partnership    Pleasant Wood Apartments                      BRI River Oaks Limited                 N/A
                                                                             Partnership
                                                                             BRI Texas Apartments Limited
                                                                             Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Hunters Glen Limited       Hunters Glen Apartments                       BRI Hunters Glen-II, Inc.    BRI OP Limited Partnership
Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Huntington Chase Limited   Huntington Chase at Indian Trail              BRI Huntington Chase-II,     BRI OP Limited Partnership
Partnership                    Apartments                                    Inc.
------------------------------------------------------------------------------------------------------------------------------------
BRI Lamplighter Ridge Limited  The Lighthouse Apartments                     BRI Emerald, Inc.            BRI OP Limited Partnership
Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Newport Limited            Newport Apartments                            BRI Newport-II, Inc.         BRI OP Limited Partnership
Partnership
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>



<PAGE>

<TABLE>
<CAPTION>
====================================================================================================================================
                                                            SCHEDULE 6.19
                                                   BERKSHIRE REALTY COMPANY, INC.
------------------------------------------------------------------------------------------------------------------------------------
   ENTITY NAME                          PURPOSE/OWNER OF                         GENERAL PARTNER(S)           LIMITED PARTNER(S)
====================================================================================================================================
<S>                            <C>                                           <C>                          <C>
BRI OP Management Limited      Employer of certain                           BRI Apartments, Inc.         BRI OP Limited Partnership
Partnership                    management personnel
------------------------------------------------------------------------------------------------------------------------------------
BRI Park Colony-Woodland       Park Colony Apartments                        BRI Park Colony-Woodland-II, BRI OP Limited Partnership
Limited Partnership            and Woodland Meadows Apartments               Inc.
------------------------------------------------------------------------------------------------------------------------------------
BRI Plainfleld Associates      Hazelcrest Apartments                         BRI Baltimore-23, L.L.C.                N/A
                                                                             BRI OP Limited Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Plaintield II General      Maker of note collateralized by               BRI Baltimore-23, L.L.C,                N/A
Partnership                    Hazelcrest Apartments                         BRI Plainfield Associates
------------------------------------------------------------------------------------------------------------------------------------
BRI Plantation Colony Limited  Plantation Colony Apartments                  BRI Plantation Colony-II,    BRI OP Limited Partnership
Partnership                                                                  Inc.
------------------------------------------------------------------------------------------------------------------------------------
BRI Purnell Associates         Fairway Ridge Apartments                      BRI Baltimore-24, L.L.C.                N/A
                                                                             BRI OP Limited Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Purnell Associates II      Maker of note collateralized by Fairway       BRI Baltimore - 24, L.L.C.              N/A
General Partnership            Ridge Apartments                              BRI Purnell Associates
                                                            
------------------------------------------------------------------------------------------------------------------------------------
BRI Ridgeview Chase Associates Ridgeview Chase Apartments                    BRI Emerald, Inc.            BRI OP Limited Partnership
Limited Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI River Oaks Limited         River Oaks Apartments                         BRI River Oaks-II, Inc.      BRI OP Limited Partnership
Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Rolling Road Associates    Heraldry Square Apartments                    BRI Baltimore - 25, L.L.C.              N/A
                                                                             BRI OP Limited Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Rolling Road II General    Maker of note collateralized by               BRI Baltimore - 25, L.L.C.              N/A
Partnership                    Heraldry Square Apartments                    BRI Rolling Road Associates
                                                          
------------------------------------------------------------------------------------------------------------------------------------
BRI Second Kingswood Common    Maker of note collateralized by               BRI Baltimore - 26, L.L.C.              N/A
II General Partnership         Kingswood Common II Apartments                BRI Second Kingwood
                                                                             Common Associates
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>



<PAGE>

<TABLE>
<CAPTION>
====================================================================================================================================
                                                            SCHEDULE 6.19
                                                   BERKSHIRE REALTY COMPANY, INC.
------------------------------------------------------------------------------------------------------------------------------------
   ENTITY NAME                          PURPOSE/OWNER OF                         GENERAL PARTNER(S)           LIMITED PARTNER(S)
====================================================================================================================================
<S>                            <C>                                           <C>                          <C>
BRI Second Kingswood Common    Kingswood Common II Apartments                BRI Baltimore - 26, L.L.C.   BRI OP Limited Partnership
Associates Limited Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Second Rolling Road        Kingswood Common I Apartments                 BRI Baltimore - 27, L.L.C.              N/A
Associates                                                                   BRI OP Limited Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Second Rolling Road II     Maker of note collateralized by               BRI Baltimore - 27, L.L.C.              N/A
General Partnership            Kingswood Common I Apartments                 BRI Second Rolling Road
                                                                             Associates
------------------------------------------------------------------------------------------------------------------------------------
BRI Southwest Apartments       Indigo Land                                   Berkshire Apartments, Inc.   BRI OP Limited Partnership
Limited Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Texas Apartments Limited   Huntington, Brooks, Huntington Lakes,         BRI Texas Apartments-II,     BRI OP Limited Partnership
Partnership                    Huntington Ridge, Kings Crossing              Inc.
                               Apartments, Kingwood Lakes Apartments,
                               The Indigo on Forest, Prescott Place
                               Apartments, Prescott Place-II Apartments,
                               Summer Apartments and Sweetwater
------------------------------------------------------------------------------------------------------------------------------------
BRI The Estates Limited        The Estates Apartments                        BRI Emerald, Inc.            BRI OP Limited Partnership
Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI The Point Limited          The Point Apartments                          BRI Texas Apartments         BRI OP Limited Partnership
Partnership                                                                  Limited Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Third RollIng Road         Coventry Apartments                           BRI Emerald, Inc.            BRI OP Limited Partnership
Associates Limited Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Timbers Limited            The Timbers Apartments                        BRI Timbers - II, Inc.       BRI OP Limited Partnership
Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Warren Park Associates     Warren Park Apartments                        BRI Baltimore - 29, L.L.C.             N/A
                                                                             BRI 0P Limited Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Warren Park II General     Maker of note collateralized by Warren        BRI Baltimore -29, L.L.C.              N/A
Partnership                    Park Apartments                               BRI Warren Park Associates
------------------------------------------------------------------------------------------------------------------------------------
BRI Washington Square Limited  The Cove Apartments                           BRI Emerald, Inc.            BRI OP Limited Partnership
Partnership
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>



<PAGE>

<TABLE>
<CAPTION>
====================================================================================================================================
                                                            SCHEDULE 6.19
                                                   BERKSHIRE REALTY COMPANY, INC.
------------------------------------------------------------------------------------------------------------------------------------
   ENTITY NAME                          PURPOSE/OWNER OF                         GENERAL PARTNER(S)           LIMITED PARTNER(S)
====================================================================================================================================
<S>                            <C>                                           <C>                          <C>
BRI Westchester Limited        Westchester Apartments                        BRI Westchester, Inc.        BRI OP Limited Partnership
Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Williston Associates       Williston Apartments                          BRI Baltimore - 28, L.L.C.              N/A
                                                                             BRI OP Limited Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Williston II General       Maker of note collateralized by               BRI Baltimore - 28, L.L.C.              N/A
Partnership                    Williston Apartments                          BRI Williston Associates
------------------------------------------------------------------------------------------------------------------------------------
Spring Valley Partnership      Spring Valley Marketplace                     Krupp Cash Plus-V                       N/A
                                                                             Limited Partnership
                                                                             BRI OP Limited Partnership
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>



<PAGE>

<TABLE>
<CAPTION>
====================================================================================================================================
                                                            SCHEDULE 6.19
                                                   BERKSHIRE REALTY COMPANY, INC.
                                                            CORPORATIONS
------------------------------------------------------------------------------------------------------------------------------------
       ENTITY NAME                  PURPOSE/OWNER OF                     STOCKHOLDER(S)                       MEMBER(S)
------------------------------------------------------------------------------------------------------------------------------------
<S>                         <C>                                        <C>                            <C>
Berkshire Realty Company,   Real estate investment trust               Traded on the NYSE                        N/A
Inc.
------------------------------------------------------------------------------------------------------------------------------------
Berkshire Apartments, Inc.  General partner of                         Berkshire Realty Company,                 N/A
                            BRI Southwest Apts. Limited Partnership,   Inc.
                            BRI Coventry Park Limited Partnership,
                            BRI Commons Limited Partnership and
                            BRI Benchmark Limited Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Altamonte-II, Inc.      General partner of                         Berkshire Realty Company, Inc.            N/A
                            BRI Altamonte Limited Partnership          Inc.
------------------------------------------------------------------------------------------------------------------------------------
BRI Baltimore - 22, L.L.C.  General partner of                                     N/A                Berkshire Realty Company, Inc.
                            BRI Frederick Associates                                                  BRI OP Limited Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Baltimore - 23, L.L.C.  General partner of                                     N/A                Berkshire Realty Company, Inc.
                            BRI Plainfleld Associates                                                 BRI OP Limited Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Baltimore - 24, L.L.C.  General partner of                                     N/A                Berkshire Realty Company, Inc.
                            BRI Purnell Associates                                                    BRI OP Limited Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Baltimore -25, LILC.    General partner of                                     N/A                Berkshire Realty Company, Inc.
                            BRI Rolling Road Associates                                               BRI OP Limited Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI BaltImore - 26, L.L.C.  General partner of BRI Second                          N/A                Berkshire Realty Company, Inc.
                            Kingswood Common Associates                                               BRI OP LimIted Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Baltimore - 27, L.L.C.  General partner of                                     N/A                Berkshire Realty Company, Inc.
                            BRI Second Rolling Road Associates                                        BRI OP Limited Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Baltimore - 28, L.L.C.  General partner of                                     N/A                Berkshire Realty Company, Inc.
                            BRI Williston Associates                                                  BRI OP Limited Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Baltimore - 29, L.L.C.  General partner of                                     N/A                Berkshire Realty Company, Inc.
                            BRI Warren Associates                                                     BRI OP Limited Partnership
------------------------------------------------------------------------------------------------------------------------------
</TABLE>



<PAGE>

<TABLE>
<CAPTION>
====================================================================================================================================
                                                            SCHEDULE 6.19
                                                   BERKSHIRE REALTY COMPANY, INC.
                                                            CORPORATIONS
------------------------------------------------------------------------------------------------------------------------------------
       ENTITY NAME                    PURPOSE/OWNER OF                        STOCKHOLDER(S)                   MEMBER(S)
------------------------------------------------------------------------------------------------------------------------------------
<S>                         <C>                                        <C>                            <C>                 
BRI Baltimore - 31, L.L.C.  General partner of BRI Diamond Ridge                  N/A                 Berkshire Realty Company, Inc.
                            Associates Limited Partnership                                            BRI OP Limited Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Emerald, Inc.           General partner of                         Berkshire Realty Company, Inc.             N/A
                            BRI Harper's Mill Limited Partnership
                            BRI Heritage Hill Limited Partnership
                            BRI Lamplighter Ridge Limited Partnership
                            BRI Washington Sq. Limited Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Foxglove Associates     Owner of Liriope Apartments                            N/A            BRI OP Limited Partnership
L.L.C.
------------------------------------------------------------------------------------------------------------------------------------
BRI Huntington Chase-II,    General partner of BRI Huntington          Berkshire Realty Company, Inc.             N/A
Inc.                        Chase Limited Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Newport-II, Inc.        General partner of                         Berkshire Realty Company, Inc.             N/A
                            BRI Newport Limited Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Park Colony-Woodland-   General partner of BRI Park Colony -       Berkshire Realty Cotnpauy, Inc.            N/A
II, Inc.                    Woodland Limited Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Plantation Colony-II,   General partner of BRI                     Berkshire Realty Company, Inc.             N/A
Inc.                        Plantation Colony Limited Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI River Oaks-II Inc.      General partner of BRI River               Berkshire Realty Company, Inc.             N/A
                            Oaks Limited Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Texas Apartments-II,    General partner of BRI Texas               Berkshire Realty Company, Inc.             N/A
Inc.                        Apartments Limited Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Timbers-II, Inc.        General partner of BRI Timbers             Berkshire Realty Company, Inc.             N/A
                            Limited Partnership
------------------------------------------------------------------------------------------------------------------------------------
BRI Westchester, Inc.       General partner of                         Berkshire Realty Company, Inc.             N/A
                            BRI Westchester Limited Partnership
====================================================================================================================================
</TABLE>

<PAGE>








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<PAGE>




SCHEDULE 8.1                OUTSTANDING INDEBTEDNESS

                                      NONE








<PAGE>






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<PAGE>





            SCHEDULE 8.2        OUTSTANDING LIENS

                                      NONE