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                                                                  Exhibit 10.1



         SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

         This Second Amended and Restated Loan and Security Agreement (this
"Agreement") is entered into to be effective the 30 day of September, 1998,
among The Provident Bank (the "Bank") and Lexford Residential Trust, f/k/a/
Lexford, Inc., f/k/a Cardinal Realty Services, Inc., Cardinal GP VIII
Corporation, Cardinal GP X Corporation, Cardinal Apartment Services, Inc.,
Cardinal GP XII Corporation, Cardinal Industries Development Corporation,
Cardinal Ancillary Insurance Agency, Inc., an Ohio corporation, Cardinal
Ancillary Insurance Agency, Inc., a Delaware corporation, Cardinal Industries of
Florida Services Corporation, Cardinal Industries of Georgia Services
Corporation, Cardinal Industries of Texas, Inc., Cardinal Industries Services
Corporation, Cardinal Realty Company, Cardinal Regulatory of Kentucky, Inc.,
Cardinal Regulatory of West Virginia, Inc., CII of Pennsylvania, Inc., R/E
Management Services, Inc., Walker Place Limited Liability Company, Cardinal GP
XIII Corporation, Cardinal GP XIV Corporation, Cardinal GP XV Corporation,
Cardinal GP XVI Corporation, Cardinal GP XVIII Corporation, Cardinal LP XIX
Corporation, fka Cardinal GP XIX Corporation, and Lexford Properties, Inc.,
jointly and severally (herein each a "Company" or collectively, the
"Companies").

R E C I T A L S:

         I. Some of the Companies and the Bank entered into a Loan and Security
Agreement dated August 11, 1995 (the "Loan Agreement") and various loan
documents executed in connection therewith (the "Loan Documents"); and

         II. Lexford Properties, Inc. ("Lexford") acquired all or substantially
all of the management agreements held by the Companies at the time Lexford
became an affiliate of Cardinal Realty Services, Inc. and therefore by a First
Assumption of Loan and Security Agreement dated February 26, 1997, Lexford
assumed joint and several liability with the other Companies for all repayment
obligations on the Loan Agreement, which Assumption Agreement shall be included
in any reference hereafter to the Loan Agreement; and

         III. Lexford Residential Trust organized on January 16, 1998 and merged
with Lexford, Inc. on March 3, 1998; and

         IV. The Companies and the Bank desire to ratify the current credit
facility and amend and restate the Loan Agreement by increasing the Revolving
Line resulting in an aggregate sum available for loans and advances of
$40,000,000 to be evidenced by a Cognovit Promissory Note (Revolving Line of
Credit) together with certain changes to the financial covenants of the Loan
Agreement and certain other changes as have been agreed to by the parties
hereto. The original Loan Agreement dated August 11, 1995, as heretofore
superseded and replaced in its entirety by that certain Amended and Restated



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Loan and Security Agreement dated as of September 30, 1997 is superseded and
replaced in its entirety by this Agreement.

         NOW, THEREFORE the Loan Agreement is amended and restated as follows:

1.   Revolving Lines of Credit.

1.1. Loans. The Bank, subject to the terms and conditions hereof, will make
loans and advances to the Companies on a revolving basis up to the aggregate sum
of $40,000,000.00 for the uses and purposes specified in subsection 2.2 hereof
(the "Revolving Line of Credit"). The Bank shall have no obligation to advance
or re-advance any sums pursuant to the Revolving Line of Credit at any time when
a set of facts or circumstances exists, which, by themselves, upon the giving of
notice, the lapse of time, or any one or more of the foregoing would constitute
an Event of Default under this Agreement. The proceeds of the Revolving Line of
Credit may be advanced, repaid, and readvanced, prior to maturity and otherwise
subject to the terms and provisions of the Note, as hereinafter defined. Each of
the loans or advances under the Revolving Line of Credit shall be secured by the
security interests hereinafter provided in this Agreement or any other security
agreements, pledge agreements or other security instruments executed prior to
the date hereof or in connection with this Agreement or executed after the date
hereof among the Bank and the Companies.

1.2. Letters of Credit. On or after the date hereof through and including the
maturity date of the Note, provided there has been no Event of Default hereunder
which has occurred and is continuing, the Bank shall, upon the request of the
Companies and subject to the terms and conditions of this Agreement, issue one
(1) or more irrevocable standby or trade letters of credit for the account of
one or more of the Companies up to the maximum aggregate principal amount
available under the Revolving Line of Credit and subject to the use limitations
of subsection 2.2 of this Agreement, and each having an expiration date not
later than the maturity date of the Note (herein each a "Letter of Credit" or
collectively the "Letters of Credit"). Application for a Letter of Credit shall
be made on the form of the Bank customarily used for similar letters of credit.
One or more of the Companies shall provide the application not less than three
(3) days prior to the required date of issuance of the Letter of Credit. Amounts
paid by the Bank to cover any draws under the Letters of Credit as from time to
time amended or modified, shall be deemed to have been advancements made under
the Note, as hereinafter defined, for the Revolving Line of Credit. Prior to any
draws for Letters of Credit under the Revolving Line of Credit, the maximum
principal balance of the Note, available for advances, shall be reduced by the
principal (face) amount of all outstanding Letters of Credit, the principal
(face) amount of all pending applications for Bank's issuance of Letters of
Credit, and amounts previously drawn under the Revolving Line of Credit which
remain outstanding and unpaid. The Companies shall pay to the Bank on the date a
Letter of Credit is issued and on each anniversary thereof until such Letter of
Credit expires a fee equal to one percent (1%) per annum of the undrawn amount
available to be drawn under such Letter of Credit. Such fees shall be earned
when paid and shall not be subject to 


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rebate or refund by the Bank in the event that any Letter of Credit is
terminated or reduced. The fee for the Letter of Credit shall be calculated on
the basis of a three hundred sixty (360) day year factor applied to the actual
number of days elapsed or that will elapse.

2.   Terms and Uses of Loan.

2.1. Interest Rates; Fees; Terms; Costs. The Companies agree to pay the Bank
monthly interest on the unpaid balance of the Revolving Line of Credit at the
rate of interest set forth in the Note, refinancings, renewals, extensions,
modifications, or amendments thereto or substitutions or replacements therefor
in substantially the form set forth in Exhibit A attached hereto (herein
"Note"). The basic terms of the Revolving Line of Credit, as reflected in the
Note, are as follows:

Original principal balance available of $40,000,000.00. Interest to accrue at
The Provident Bank Prime Rate minus one percent (P-l%). Interest only monthly
unless the Companies elect to term out all or any portion of the outstanding
principal balance, which election may be made one or more times at the
Companies' discretion. In the event of an election to term out, the then
outstanding principal balance to be termed out and accrued interest thereon will
be amortized over sixty (60) months at a fixed interest rate equal to two
percent (2%) over the then five (5) year Treasury Constant Maturity Security in
equal monthly payments of principal and interest.

     Repayment of the Revolving Line of Credit shall be made, and the
maturity date thereof shall be determined, in accordance with the terms of the
Note. The Companies shall pay all reasonable costs and expenses incidental to
the Revolving Line of Credit or the enforcement of the Bank's rights in
connection therewith. Such costs shall include, but not be limited to,
reasonable fees and out-of-pocket expenses of the Bank's counsel, audit fees,
search fees, recording fees, inspection fees, documentary stamps, revenue
stamps, note and mortgage taxes. To the extent any such costs are incurred by
Bank, Bank may elect, following notice to the Companies, to charge such costs to
the Revolving Line of Credit without further authorization of the Companies.

2.2. Use of Proceeds. The Revolving Line of Credit shall be used for, and
only used for the following purposes:

     To fund the month end cash balances on deposit accounts of the
Companies maintained at the Bank, to fund short term working capital for daily
operating needs including (a) Letters of Credit, and (b) to fund the Companies'
equity capital contributions to entities formed to purchase multi-family
properties, payment of dividends, purchase of multi-family management contracts,
purchase mortgage servicing contracts or engage in the commercial mortgage
banking industry. Any funding under clause (b) is preapproved by the Bank, so
long as any purchase does not cause on a proforma basis a negative impact on the
prior four quarters cumulative EBITDA of the Companies and the proforma on any
such acquisition is received by the Bank bearing the 


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written approval of any two officers of the Company as designated in 
subsection 2.3 to be received by the Bank within fifteen (15) days of such 
approval.

2.3. Draw Requests. Draw requests on behalf of the Companies shall be requested
by any two of the following: the President and Chief Executive Officer, the
Executive Vice President and Chief Financial Officer, the Senior Vice President
and Controller, the Senior Vice President and Treasurer of Lexford Residential
Trust, or any other officer acceptable to the Bank and designated in writing by
the Companies. Such officer(s) shall only make a draw request if conditions
exist such that (a) no event, fact, or circumstance has occurred since the
closing of the Loans, which, taken together or by itself, upon the giving of
notice, lapse of time or otherwise, has had a materially adverse effect on the
Companies' ability to perform their obligations under this Agreement except as
set forth in any documentation presented to the Bank and accepted by the Bank in
its sole discretion; (b) there has been no Event of Default hereunder or no
event has occurred and is continuing which, upon the giving of notice, lapse of
time or otherwise, would constitute an Event of Default hereunder; and (c) the
requested advance is otherwise in accordance with the purpose limitations in
subsection 2.2 hereof. Unless specifically requested by the Bank written
certification of the foregoing is waived. Each such request shall be made in
person, by phone, or by modem according to the Bank's procedures and shall be
deposited to the general demand deposit account of Lexford Residential Trust
with the exception of draws to fund month end cash balances on deposit accounts
of the Companies maintained at the Bank which shall be deposited into special
cash balance accounts.

2.4. Prepayment. The Companies shall pay to the Bank a prepayment premium in the
amount of Two Hundred Fifty Thousand and no/100 Dollars ($250,000.00) with
respect to any prepayment of principal of the Loan which occurs before August,
1998 resulting from the Companies' decision to refinance all or any material
portion of the indebtedness evidenced by the Note.

2.5. Unused Line Fee. Effective December 31, 1997, and on each three (3) month
anniversary from that date, if the Companies have not drawn on the Note an
average daily balance of at least $15,000,000 for the preceding Three (3) month
period, then the Company shall pay the Bank an unused line fee equal to one
eighth of one percent (1/8%) of the difference between the average daily balance
and $40,000,000 (($40,000,000 minus average daily balance) times 0.125% = unused
line fee).

3.   Security Interest.

3.1. Grant of Security Interest. The Companies, jointly and severally, hereby
grant, pledge, and assign to the Bank a security interest in all of the
Companies' personal property assets, including without limitation, all of the
Companies' right, title, and interest in and to the following property, whether
the Companies' interest therein is as owner, co-owner, lessee, consignee,
general partner, limited partner, secured party, or otherwise, be it now owned
or existing or hereafter arising or acquired, and wherever 



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located, together with all substitutions, replacements, additions, and
accessions therefor or thereto: (a) all of the Companies' inventory including,
but not limited to, all goods, merchandise, and other personal property
furnished under any contract of service or intended for sale or lease, all
parts, supplies, raw materials, work in process, finished goods, materials used
or consumed in the Companies' businesses, and repossessed and returned goods
(herein the "Inventory"); (b) all of the Companies' machinery, equipment, tools,
furniture, furnishings, and computing and data processing systems (herein the
"Equipment"); (c) all of the Companies' accounts, accounts receivable,
management contracts, drafts, acceptances, and other forms of obligations, all
books, records, ledger cards, computer programs, and other documents, or
property at anytime evidencing or relating to the Company's accounts, including
but not limited to, those arising from or in connection with (i) a Company's
sale, lease, or other disposition of Collateral or sale of services, (ii) rights
pursuant to all property management contracts and franchise agreements, and
rights under the assignments or other dispositions thereof, (iii) rights
pursuant to all mortgage servicing agreements, and (iv) loans or advances to or
for the benefit of partnerships, corporations or other business entities in
which the Companies have an ownership interest which are not evidenced by an
instrument (herein the "Accounts"); (d) all of the Companies' general
intangibles, contract rights, income tax refunds, bond refunds, security deposit
refunds, utilities deposit refunds, preference recoveries, or other claims in
respect of any transfers of any kind, including, but not limited to, (i)
settlements of pending or threatened litigation or asserted claims, (ii)
obligations of purchasers of general partner interests, (iii) rights under
insurance policies, (iv) loans and advances to the Companies' senior and
executive management not evidence by an instrument, (v) any and all claims or
offsets against various Affiliated Entities, as hereinafter defined, (vi) rights
to cash payments and other distributions pursuant to plans of reorganization
confirmed in bankruptcy proceedings, and (vii) general and limited partnership
interests (herein the "Intangibles"); (e) all of the Companies' instruments,
notes, notes receivable, certificates of deposit, and other writings evidencing
a right to payment of money, whether negotiable or non-negotiable, including,
but not limited to, (i) obligations of limited partnerships to the Companies
pursuant to promissory notes secured by mortgages, (ii) obligations of limited
partnerships to the Companies pursuant to various mortgage differential
promissory notes, (iii) mortgage obligations or participation or other interests
therein held by the Companies, (iv) loans and advances to executive and senior
management evidenced by instruments, (v) subscription promissory notes executed
and delivered by various limited partners to certain limited partnerships and
subsequently assigned to the Companies, (vi) promissory notes arising out of the
sale of general partner interests, (vii) promissory notes and other instruments
executed pursuant to plans of reorganization confirmed in bankruptcy
proceedings, and (viii) instruments evidencing loans or advances to or for the
benefit of partnerships, corporations, or other business entities in which the
Companies have an ownership interest (herein the "Instruments"); (f) all
documents, negotiable documents, documents of title, warehouse receipts, storage
receipts, dock warrants, express bills, freight bills, airbills, bills of
lading, and other documents relating thereto, all cash and non-cash proceeds
thereof including, but not limited to, notes, drafts, checks, instruments,
insurance proceeds, indemnity proceeds, assignment or other contractual



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proceeds, warranty and guaranty proceeds (herein the "Documents"); (g) all of
the Companies' chattel paper, including without limitation furniture and
equipment leases (herein the "Chattel Paper"); (h) trade names, trademarks,
trademark applications, trade secrets, service marks, data bases, software and
software systems, information systems, discs, tapes, goodwill, patents, patent
applications, copyrights, copyright applications, licenses and franchises
(herein the "Intellectual Property"); (i) all deposit accounts, wherever
located, whether general, special, time, demand, provisional, or final, all cash
or monies wherever located, any and all deposits or other sums at any time
credited by or due from the Bank to the Companies, any and all policies,
certificates of insurance, securities, goods, cash and property owned by the
Companies or in which any of the Companies has an interest, which now or
hereafter are at any time in the possession or control of the Bank or in transit
by mail or carrier to or from the Bank, or in the possession of any third party
acting on the Bank's behalf, without regard to whether the Bank received the
same in pledge for safekeeping, as agent for collection or transmission, or
otherwise, or whether the Bank has conditionally released the same (herein the
"Deposits"); and (j) all of the Companies' stock in any corporation (herein the
"Stock") (all of the Inventory, the Equipment, the Accounts, the Stock, the
Intangibles, the Instruments, the Chattel Paper, the Documents, the Intellectual
Property, the Deposits herein, collectively, the "Personal Property
Collateral");

         Subject to terms of prior mortgages, if any, the Companies agree that
to further secure the indebtedness evidenced by the Note, the Companies shall,
at the Bank's request, also grant to the Bank a mortgage lien on the real
property owned by one or more of the Companies (the "Real Estate Collateral")
(the Personal Property Collateral and the Real Estate Collateral herein
collectively, the "Collateral").

         The security interests hereby granted are to secure the prompt and full
payment and complete performance of all Obligations of the Companies to the
Bank. The word "Obligations" is used in its most comprehensive sense and
includes, without limitation, all indebtedness, debts, and liabilities
(including principal, interest, late charges, collection costs, attorneys' fees
and the like) of the Companies to the Bank, whether now existing or hereafter
arising, either created by the Companies alone or together with another or
others, primary or secondary, secured or unsecured, absolute or contingent,
liquidated or unliquidated, direct or indirect, whether evidenced by note,
draft, application for letter of credit, or otherwise, and any and all renewals
of or substitutes therefor, including all indebtedness owed by the Companies to
the Bank in connection with the Loan.

         It is the Companies' express intention that the continuing security
interest granted hereby, shall extend to all present and future obligations of
the Companies to the Bank arising under this Agreement, including, but not
limited to, the Note or the renewals, refinancing, or replacements thereof,
whether or not such Obligations are reduced or extinguished and thereafter
increased or reincurred and whether or not such Obligations are specifically
contemplated as of the date hereof. The absence of any reference to this
Agreement in any documents, instruments, or agreements evidencing or relating to
any 


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obligation secured hereby shall not limit or be construed to limit the scope or
applicability of this Agreement.

         The Companies have cooperated in the refinance of a number of first
mortgages by the limited partnerships in which the Companies hold general and/or
limited partnership interests, which refinances have been funded by affiliates
or securitized offerings of PaineWebber. The Bank approved the refinancings
which required execution by the Companies of subordination agreements related to
obligations owed by the limited partnerships and included in the Collateral
pledged to the Bank. In particular subordination agreements concerning the
lender's rights under the management contracts held by both the Companies and
Lexford, whether as the Companies successor or as a direct obligation to
Lexford, were approved in writing by the Bank (all subordinations approved in
writing by the Bank are hereafter referred to as the "PaineWebber
Subordinations").

         The Bank hereby agrees that in the event of additional refinancings by
any limited partnership, the Bank hereby approves any subordination of any
Company's interest in or claims against the limited partnership so long as the
same are consistent with or no less favorable than the terms of the PaineWebber
Subordinations. Upon the Company's request, the Bank will confirm its approval
of such subordination to any refinancing lender.

         Lexford as security for repayment of its obligations under the Loan
Agreement does hereby grant, assign and transfer to the Bank all of its right,
title and interest in any and all of its management contracts, as that term is
defined in the this Agreement and subject to any PaineWebber Subordination
consented to in writing by the Bank. Provided further, Lexford represents that
there is no existing security interest in Lexford's rights in and to any of its
management contracts and Lexford further agrees it shall not grant any security
interest in any management contract, now existing or hereafter entered into with
a Third Party Property Owner, except the security interest in favor of Bank
created hereunder.

3.2. Setoff. The Companies, jointly and severally, authorize the Bank, upon the
occurrence and continuation of any fact, event, circumstance, individually or
taken together which constitute an Event of Default or would constitute an Event
of Default but for the lapse of any applicable notice or cure period and without
regard to whether the Bank has exercised any right of acceleration and at any
time, thereafter, without notice, to appropriate and apply any balances,
credits, deposits, accounts, or money of any of the Companies in the Bank's
possession, custody, or control to be applied in such order of preference as the
Bank may determine to the payment of any of the Obligations whether or not the
Obligations are due or matured. Provided further that Bank shall not appropriate
any account of an Affiliated Entity as that term is defined in subsection 4.1
below, Bank shall have the right to place a ten (10) day hold on the account of
any Affiliated Entity as that term is defined in subsection 4.1 below and to the
extent any of the Companies advanced funds to the Affiliated Entities within
ninety (90) days of the 



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commencement of the hold, the Companies agree for themselves and on behalf of
the Affiliated Entities that such funds are held in trust for the Companies and
the Bank is hereby authorized to appropriate such funds from the account of each
Affiliated Entity up to the lesser of the account balance or the aggregate total
of all such advances during the ninety (90) day period. Notwithstanding the
provisions above to the contrary, nothing herein shall prevent the Affiliated
Entities from having access to the funds in such accounts during such ten (10)
day hold for the limited purpose of paying their obligations to creditors,
provided that such obligations are routine and incurred in the ordinary course
of the business of the Affiliated Entities.


3.3. Representations and Covenants Regarding the Collateral. The Companies
represent, warrant, and covenant to the best of their knowledge and in good
faith as follows: (a) except for the security interests and liens granted
hereby, and subject to the provisions of subsections 5.5 and 3.1 hereof or as
otherwise approved by the Bank with respect to specific items of Collateral
(e.g., for rights of first refusal, put and call options and similar interests)
one or more of the Companies are, or as to Collateral arising or to be acquired
after the date hereof, shall be, the sole and exclusive owner of the Collateral,
and the Collateral is and shall remain free from any and all liens, security
interests, encumbrances, claims, and interests, and no security agreement,
financing statement, equivalent security, or lien instrument, or continuation
statement covering any of the Collateral is on file or of record in any public
office, (b) the Companies shall not create, permit, or suffer to exist, and
shall take such action as is necessary to remove, any claim to or interest in,
or lien or encumbrance upon the Collateral except the security interests granted
hereby and subject to the provisions of subsection 5.5 hereof, and shall defend
the right, title, and interest of the Bank in and to the Collateral against all
claims and demands of all persons and entities at any time claiming the same or
any interest therein; (c) the Companies' principal place of business and chief
executive office is located at the address set forth in subsection 9.3 of this
Agreement; the Collateral, to the extent possible, and the records concerning
the Collateral shall be kept at that address unless the Bank shall give its
prior written consent otherwise; and the Companies have no other places of
business or place where the Collateral is located except 6954 Americana Parkway,
Reynoldsburg, Ohio 43068 and Freeport Parkway, Suite 200, Irving, Texas 75063,
and the Huntington Center, 41 South High Street, Suite 2410, Columbus, Ohio
43215; (d) from time to time and in no event less frequently than annually the
Companies shall provide the Bank with an updated report disclosing the
location(s) of the Collateral and of any records pertaining thereto; (e) at
least thirty (30) days prior to the occurrence of any of the following events,
the Companies shall deliver to the loan officer who is handling the Companies'
Obligations on behalf of the Bank written notice of such impending events: (i) a
change in and of the Companies' principal place of business or chief executive
office; (ii) the opening or closing of any place of the Companies' name,
identity or corporate structure; (f) each of the Accounts is based on an actual
and bona fide sale and delivery of goods or services or extension of credit, and
the Companies believe that the Companies' Account Debtors have accepted the
goods or services, owe and are obligated to pay the full amounts reflected in
the invoices, according to the terms 



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thereof; and (g) any and all taxes and fees relating to the Companies'
businesses shall be the Companies' sole responsibility, the Companies shall pay
the same when due, and none of said taxes and fees represent a lien on or claim
against the Accounts, other than taxes which are not then due or which are being
contested in good faith and for which adequate reserves have been allocated in
accordance with generally accepted accounting principles consistently applied.

3.4. Application of Proceeds from Collection of Accounts; Government Accounts;
Perfection. All amounts received by the Bank representing payment of Accounts or
proceeds from the sale of Inventory or of the other Collateral may be applied by
the Bank to the payment of the Obligations in such order of preference as the
Bank may determine. If any material portion of the Companies' accounts arise out
of contracts with or orders from the United States or any department, agency, or
instrumentality thereof, the Companies shall immediately (i) notify the Bank
thereof in writing and (ii) execute any instrument and take any steps which the
Bank deems necessary pursuant to the Federal Assignment of Claims Act of 1940,
as amended (41 USC Section 15) in order that all money due and to become due
under such contract or order shall be assigned to the Bank. The Companies agree
to execute, deliver, file, and record all such notices, affidavits, assignments,
financing statements, and other instruments as shall in the reasonable judgment
of the Bank be necessary or desirable to evidence, validate, and perfect the
security interests of the Bank in the Accounts.

3.5. Books and Records. The Companies shall at all times keep accurate and
complete records of the Collateral, and at all reasonable times and from time to
time, shall allow the Bank, by or through any of its officers, agents,
attorneys, or accountants, to examine, inspect and, if applicable, make copies
of, the Collateral wherever located. In addition, upon request of the Bank, the
Companies shall provide the Bank with copies of any agreements and such other
documentation and information relating to the Collateral as the Bank may
reasonably require.

3.6. Preservation and Disposition of Collateral. (a) Prior to the subsequent
placement of any Collateral in or upon any real property which any of the
Companies has leased or mortgaged, the Companies shall at the Bank's request
obtain a waiver from the lessor and/or the mortgagee, as the case may be, with
respect to the rights (whether present or future) of the lessor or mortgagee
with respect to that Collateral. At all times subsequent to the date of this
Agreement, the Companies shall advise the Bank promptly, in writing and in
reasonable detail of, (i) any material encumbrance or claim asserted against any
of the Collateral; (ii) any material change in the composition of the
Collateral; and (iii) the occurrence of any other event that would have a
material adverse effect upon the aggregate value of the Collateral or upon the
security interests of the Bank; (b) the Companies shall not sell or otherwise
dispose of the Collateral, except that the Companies may (i) sell or otherwise
dispose of the Inventory in the ordinary course of their businesses; (ii) may
sell Equipment in a commercially reasonably manner for consideration fairly
reflecting prevailing market values for property of like nature, (iii) may
replace Equipment with newer equipment of like kind and replacement value, and



<PAGE>   10



(iv) collect their Accounts and notes receivable in the ordinary course of their
businesses and in connection therewith, grant releases to the obligors
thereunder; (c) the Companies shall keep the Collateral in good condition and
shall not misuse, abuse, secrete, waste, or destroy any of the same; (d) the
Companies shall not use the Collateral in violation of any statute, ordinance,
regulation, rule, decree, or order; (e) the Companies shall pay promptly when
due all taxes, assessments, charges, or levies upon the Collateral or in respect
to the income or profits therefrom, other than taxes being contested in good
faith and for which adequate reserves have been allocated in accordance with
generally accepted accounting principles consistently applied; and (f) at its
option following notice to the Companies and the Companies' failure to
discharge, maintain, or perform, the Bank may discharge delinquent taxes or
liens, security interests, or other encumbrances not permitted under subsection
5.5 of this Agreement at any time levied or placed on the Collateral and may pay
for the maintenance and preservation of the Collateral. The Companies agree to
reimburse the Bank upon demand for any payment made or any expense incurred
(including reasonable attorneys' fees) by the Bank pursuant to the foregoing
authorization. Prior to an Event of Default, any payments under subsection
3.6(f) shall be treated as an advance under the Note. Should the Companies fail
to pay said sum to the Bank upon demand, interest shall accrue thereon, from the
date of demand until paid in full, at the highest rate set forth in any document
or instrument evidencing any of the Obligations.

3.7. Extensions and Compromises. With respect to any Obligations secured by any
of the Collateral, the Companies assent to all extensions or postponements of
the time of payment of such Obligations or any other indulgence in connection
with such Obligations, to each substitution, exchange or release of Collateral,
to the addition or release of any party primarily or secondarily liable thereon,
to the acceptance of partial payments on such Obligations and to the settlement,
compromise or adjustment of such Obligations, all in such manner and at such
time or times as the Bank may deem advisable. The Bank shall have no duty as to
the collection or protection of Collateral or any income therefrom, nor as to
the preservation of any right pertaining thereto, beyond the safe custody of
Collateral in the possession of the Bank. The foregoing sentence is not intended
to modify in any respect, the Bank's obligation as a depository with respect to
the deposits of the Companies held by the Bank.

3.8. Financing-Statements; Lien Notation. The Companies agree to execute,
deliver, file, and record all such notices, affidavits, assignments, financing
statements, and other instruments as shall in the reasonable judgment of the
Bank be necessary or desirable to evidence, validate, and perfect the security
interests of the Bank in any portion of the Collateral. At the request of the
Bank, the Companies shall join with the Bank in executing, delivering, and
filing one or more financing statements in a form satisfactory to the Bank, and
shall pay the costs of filing the same in all public offices wherever filing is
reasonably deemed by the Bank to be necessary or desirable. A carbon,
photographic, or other reproduction of this Agreement or of a financing
statement shall be sufficient as a financing statement. If certificates of title
are issued or outstanding with respect to any Collateral, the Companies shall
cause the interest of the Bank to be properly noted thereon at the Companies'
expense.




<PAGE>   11

3.9. Bank's Appointment as Attorney-in-Fact. The Companies, jointly and
severally, hereby irrevocably constitute and appoint the Bank and any officer or
agent thereof, with full power of substitution, as the Companies, true and
lawful attorney-in-fact with full irrevocable power and authority in their place
and stead and in their names or in the Bank's own name, from time to time in the
Bank's discretion, for the sole purpose of carrying out the terms of this
Agreement, to take any and all appropriate action and to execute any and all
documents and instruments that may be necessary or desirable to accomplish the
purposes of this Agreement and, without limiting the generality of the
foregoing, hereby grants to the Bank the power and right, on behalf of the
Companies, without notice to or assent from the Companies: (a) to execute, file,
and record all such financing statements, certificates of title, and other
certificates of registration and operation and similar documents and instruments
as the Bank may reasonably deem necessary or desirable to protect, perfect, and
validate the Bank's security interests in the collateral; (b) upon the
occurrence and continuation of an Event of Default, to receive, collect, take,
endorse, sign, compromise, assign, and deliver in any of the Companies' or the
Bank's name, any and all checks, notes, drafts, or other documents or
instruments relating to the Collateral; and (c) upon the occurrence and during
the continuance of an Event of Default, (i) to notify postal authorities to
change the address for delivery of the Companies' mail to an address designated
by the Bank (the Bank shall exercise the same degree of care when dealing with
any of the Companies' mail received by it as the Bank exercises in connection
with its own mail), (ii) to open such mail delivered to the designated address,
(iii) to sign and indorse any invoices, freight or express bills, bills of
lading, storage, or warehouse receipts, drafts against debtors, assignments,
verifications, and notices in connection with accounts and other documents
relating to the Collateral; (iv) to commence and prosecute any suits, actions,
or proceedings at law or in equity in any court of competent jurisdiction to
collect the Collateral or any part thereof and to enforce any other right in
respect of any Collateral; (v) to defend any suit, action or proceeding brought
with respect to any Collateral; (vi) to negotiate, settle, compromise, or adjust
any account, suit, action, or proceeding described above and, in connection
therewith, to give such discharges or releases as the Bank may deem appropriate;
and (vii) generally, to sell, transfer, pledge, make any agreement with respect
to or otherwise deal with any of the Collateral as fully and completely as
though the Bank were the absolute owner thereof for all purposes, and to do, at
the Bank's option and the Companies' expense, at any time or from time to time,
all acts and things which the Bank reasonably deems necessary to protect,
preserve or realize upon the Collateral and the Bank's security interests
therein, in order to effect the purposes of this Agreement.

         The Companies hereby ratify all that said attorney shall lawfully do or
cause to be done by virtue hereof. This power of attorney is a power coupled
with an interest and shall be irrevocable. The powers conferred upon the Bank
hereunder are solely to protect its interests in the Collateral and shall not
impose any duty upon the Bank to exercise any such powers. The Bank shall be
accountable only for amounts that the Bank actually receives as a result of the
exercise of such powers and neither the Bank nor any of its officers, directors,
employees or agents shall be responsible to any of the Companies for 



<PAGE>   12


any act or failure to act, except for the Bank's own gross negligence or willful
misconduct.

3.10. Upon repayment of all indebtedness or upon sale of assets in subsection
5.4, the Bank will take such action as may be necessary to evidence the release
of the Bank's lien on such assets.

4.    Warranties and Representations. Each of the Companies warrants and 
represents to the Bank:

4.1.  Corporate Organization and Authority. Each Company (a) is a corporation,
real estate investment trust or limited liability company duly organized,
validly existing and in good standing under the laws of the State of its
incorporation or organization; (b) has a principal place of business in
Columbus, Ohio (c) has all requisite corporate or limited liability company
power, and authority and all necessary licenses and permits to own and operate
its properties and to carry on its business as now conducted and as presently
proposed to be conducted, except where the lack of authority to obtain such
licenses and permits would not have a material adverse effect on the business
operations or financial condition of said Company; (d) is not doing business or
conducting any activity in any jurisdiction in which it has not duly qualified
and become authorized to do business, except where the failure to qualify to do
business has not or would not have a material adverse effect on the business,
operations, or financial condition of each Company, and (e) to the extent that
each Company, or any of the limited partnerships or other entities of which each
Company is a partner, shareholder, or member, (each an "Affiliated Entity" and
collectively with each Affiliated Entity of all of the Companies the "Affiliated
Entities"), is doing business in any jurisdiction in which it has not duly
qualified and is not authorized to do business or has not obtained all necessary
licenses and permits to own and operate its properties and to carry on its
business, said Company or said Affiliated Entity is and will continue to work
diligently to cure and correct such lack of qualification or authorization to do
business and obtain such licenses and permits.

4.2.  Borrowing is Legal and Authorized. (a) The Board of Directors, or other
equivalent body, of each Company has duly authorized the execution and delivery
of this Agreement and of the notes and documents contemplated herein; (b) this
Agreement, the notes and other documents executed in connection with this
Agreement will constitute valid and binding obligations of each Company
enforceable in accordance with their respective terms; (c) the execution of this
Agreement and related notes and documents and the compliance by each Company
with all the provisions of this Agreement (i) are within the legal and
organizational powers of each Company; and (ii) are legal and will not conflict
with, result in any breach in any provision of, constitute a default under, or
result in the creation of any lien or encumbrance upon any property of each
Company (other than in favor of the Bank) under the provisions of, any
agreement, charter instrument, bylaw, or other instrument to which said Company
is a party or by which it may be bound; and (d) there are no limitations in any
indenture, contract, agreement, mortgage, deed of trust, or other agreement or
instrument to which each Company is now 




<PAGE>   13


a party or by which each Company may be bound with respect to the payment of
principal or interest on any indebtedness, or each Company's ability to incur
indebtedness, including the Note to be executed in connection with this
Agreement.

4.3. Taxes. All tax returns required to be filed by each Company in any
jurisdiction have in fact been filed, and there are no material taxes,
assessments, fees, and other governmental charges upon said Company, or upon any
of its properties, which are due and payable which have not been paid except to
the extent being contested in good faith pursuant to appropriate proceedings
sufficient to stay execution. Each Company does not know of any material
proposed additional tax assessment against it. The provisions for taxes on the
books of each Company for its current fiscal period are adequate.

4.4. Compliance with Law. Each Company (a) is not in violation of any laws,
ordinances, governmental rules, or regulations to which it is subject, including
without limitation any laws, rulings, or regulations relating to the Employee
Retirement Income Security Act of 1974 or Section 4975 of the Internal Revenue
Code and (b) has not failed to obtain any licenses, permits, franchises, or
other governmental or environmental authorizations necessary to the ownership of
its properties or to the conduct of its business, which violation or failure in
either subsection (a) or subsection (b) of this section might materially and
adversely affect the business, prospects, profits, properties, or condition
(financial or otherwise) of each Company.

4.5. Financial Statements; Full Disclosure. The Companies' consolidated
financial statements for the fiscal year ending December 31, 1994, December 31,
1995, and December 31, 1996, which have been supplied to the Bank have been
prepared in accordance with generally accepted accounting principles
consistently applied and fairly represent the Company's consolidated financial
condition as of such dates. No material adverse change in each Company's
financial condition has occurred since the date of the latest financial
statement. The financial statements referred to in this paragraph do not, nor
does this Agreement or any written statement furnished by each Company to the
Bank in connection with obtaining the Revolving Line of Credit, contain any
untrue statement of a material fact or omit a material fact necessary to make
the statements contained therein or herein not misleading. Each Company has
disclosed to the Bank in writing all facts which materially affect the
properties, business, prospects, profits or condition (financial or otherwise)
of each Company or the ability of each Company to perform this Agreement.

4.6. No Insolvency. On the date of each Company's entering into the Revolving
Line of Credit and after giving effect to all indebtedness of each Company
(excluding inter-company obligations and, except in the case of Lexford
Residential Trust, the Revolving Line of Credit), (a) each Company will be able
to pay its obligations as they become due and payable; (b) the present fair
saleable value of each Company's assets exceeds the amount that will be required
to pay its probable liability on its obligations as the same become absolute and
matured; (c) the sum of each Company's property at a fair valuation exceeds each
Company's indebtedness; (d) each Company will have sufficient capital to 


<PAGE>   14



engage in each Company's business. Each Company's grant of Collateral for the
Loan constitutes fair consideration and reasonably equivalent value because of
the receipt of the proceeds of the Loan or other benefits from the extension of
credit to the Companies.

4.7. Government Consent. Neither the nature of each Company or of its business
or properties, nor any relationship between each Company and any other entity or
person, nor any circumstance in connection with the execution of this Agreement,
is such as to require a consent, approval, or authorization of, or filing,
registration, or qualification with, any governmental authority on the part of
each Company as a condition to the execution and delivery of this Agreement and
the notes and documents contemplated herein, provided, however, that the Bank
acknowledges that the execution of this Agreement constitutes a material
transaction for each Company which will be reported in compliance with federal
securities law.

4.8. Title to Collateral. Each Company has good title to all the Collateral
which is owned by it, free from any liens and encumbrances, except as referenced
in subsection 3.3.

4.9. No Defaults. No event has occurred and no condition exists which would
constitute an Event of Default pursuant to this Agreement. Each Company is not
in violation in any material respect of any term of any agreement, charter
instrument, bylaw, or other instrument to which it is a party or by which it may
be bound.

4.10. Environmental Protection. Each Company (a) has no actual knowledge of the
permanent placement, burial, or disposal of any Hazardous Substances (as
hereinafter defined) on any real property owned (whether now owned or hereafter
acquired), leased, or used by each Company or any of the other Companies (the
"Premises"), of any spills, releases, discharges, leaks, or disposal of
Hazardous Substances that have occurred or are presently occurring on, under, or
onto the Premises, or of any spills, releases, discharges, leaks, or disposal of
Hazardous substances that have occurred or are occurring off the Premises as a
result of each Company's or the other Companies' improvement, operation, or use
of the Premises which would result in noncompliance with any of the
Environmental Laws (as hereinafter defined); (b) is and has been in compliance
with all applicable Environmental Laws; (c) knows of no pending or threatened
environmental, civil, criminal, or administrative proceedings against any
Company or the other companies relating to Hazardous Substances; (d) knows of no
facts or circumstances that would give rise to any future civil, criminal, or
administrative proceeding against any Company or the other Companies relating to
Hazardous Substances; and (e) will not permit any of its, or any of the other
Companies' employees, agents, contractors, subcontractors, or any other person
occupying or present on the Premises to generate, manufacture, store, dispose,
or release on, about, or under the Premises any Hazardous Substances which would
result in the Premises not complying with the Environmental Laws.



<PAGE>   15



As used herein, "Hazardous Substances" shall mean and include all hazardous and
toxic substances, wastes, materials, compounds, pollutants, and contaminants
(including, without limitation, asbestos (excluding non-friable asbestos),
polychlorinated biphenyls, and petroleum products) which are included under or
regulated by the Comprehensive Environmental Response, compensation and
Liability Act, as amended, 42 U.S.C. Section 9601, et seq., the Toxic Substances
Control Act, 15 U.S.C. Section 2601, et seq., the Resource Conservation and
Recovery Act, 42 U.S.C. Section 6901, et seq., the Water Quality Act of 1987, 33
U.S.C. Section 1251, et seq., and the Clean Air Act, 42 U.S.C. Section 7401, et
seq., and any state or local statute, ordinance, law, code, rule, regulation, or
order regulating or imposing liability (including strict liability) or standards
of conduct regarding Hazardous Substances (hereinafter the "Environmental
Laws"), but does not include such substances as are permanently incorporated
into a structure or any part thereof in such a way as to preclude their
subsequent release into the environment, or the permanent or temporary storage
or disposal of household hazardous substances by tenants, and which are thereby
exempt from or do not give rise to any violation of the aforementioned
Environmental Laws.

4.11. Assignability and Transferability of Interests. Not less seventy-five
percent (75%) of the management contracts, notes, partnership interests, and
interests in other Collateral are assignable and transferable to the Bank,
except that with respect to personal service contracts only the right to receive
payments and distributions may be assigned to the Bank and the Bank may not be
substituted for any Company as the party responsible for performing such
services.

4.12. Regulation U. None of the transactions contemplated in this Agreement will
violate or result in a violation of Section 7 of the Securities Exchange Act of
1934, as amended, or any regulation issued pursuant thereto, including, without
limitation, Regulation U of the Board of Governors of the Federal Reserve
System, 12 C.F.R., Chapter II, except to the extent, if any, that shares of the
common stock of Lexford Residential Trust held by one or more of the Companies
constitutes a "margin security". The Companies do not own or intend to carry or
purchase any "margin security" within the meaning of said Regulation U.

4.13. Reaffirmation of Warranties and Representations. On the date of each
advance pursuant to the Revolving Line of Credit, and as a condition for any
advance, the warranties and representations set forth in this entire Section 4
shall be true and correct on and as of such date with the same effect as though
such warranties and representations had been made on and as of such date, except
to the extent that such warranties and representations expressly relate to an
earlier date. The Bank may require a written affidavit to memorialize the fact
that all warranties and representations are in fact true and correct on and as
of such date.

5. Company Business Covenants. Each of the Companies covenants that on and after
the date of this Agreement until terminated pursuant to the terms of this
Agreement, or so long as any of the indebtedness provided for herein remains
unpaid:



<PAGE>   16



5.1. Payment of Taxes and Claims. Each Company will pay before they become
delinquent (a) all taxes, assessments and governmental charges or levies imposed
upon it or its property; and (b) all claims or demands of materialmen,
mechanics, carriers, warehousemen, landlords, bailees, and other like persons
which, if unpaid, might result in the creation of a lien or encumbrance upon its
property provided that the Company may contest any item described in clauses (a)
and (b) of this subsection 5.1 in good faith as long as adequate resources are
maintained in accordance with generally accepted accounting principles
consistently applied.

5.2. Maintenance of Properties and Corporate Existence. Each Company shall (a)
maintain the property owned by each Affiliated Entity and all of that Company's
other property in good condition and make all renewals, replacements, additions,
betterments, and improvements thereto including the ability to sell assets,
dissolve or withdraw Companies which are deemed necessary by that Company to be
in the best interests of the Company; (b) keep true books of records and
accounts in which full and correct entries will be made of all its business
transactions, including, without limitation, any transaction with any Affiliated
Entity, and reflect in its financial statements adequate accruals and
appropriations to reserves; (c) do or cause to be done all things necessary (i)
except as contemplated by clause (a), to preserve and keep in full force and
effect its existence, general partnership rights, contractual management rights,
franchises, and other rights, (ii) except as contemplated by clause (a), to
maintain its status as a corporation or limited liability company duly organized
and existing and in good standing under the laws of the state of its
incorporation or organization, (iii) except as contemplated by clause (a), to
maintain where necessary its status as a corporation licensed to do business as
a foreign corporation in any state in which it is presently so qualified, and
(iv) except as contemplated by clause (a), to maintain on behalf of each
Affiliated Entity its status as a business entity qualified to do business in
the state in which each such Affiliated Entity does business; (d) not acquire,
incur, or assume directly or indirectly, any material contingent liability in
connection with the release of any Hazardous Substances into the Environment, or
dispose of, or allow to be disposed of, or otherwise release Hazardous
Substances or solid waste on or onto said Company's Premises; (e) not be in
violation of any laws, ordinances, or governmental rules and regulations or fail
to obtain any licenses, permits, franchises, or other governmental
authorizations necessary to the ownership of its properties or to the conduct of
its business, which violation or failure to obtain might materially and
adversely affect the business, prospects, profits, properties, or condition
(financial or otherwise) of said Company, and (f) notify the Bank immediately
upon any change in the status of its continued existence as (i) a corporation or
limited liability company under the laws of the State of its incorporation or
organization, (ii) a general or limited partner in any partnership in which it
holds such an interest as of the date of this Agreement, or (iii) a management
company as it pertains to the material loss of any partnerships for which it
performs such function as of the date of this Agreement.

5.3. Insurance. The Companies shall have and maintain insurance at all times (a)
insuring against risks of fire (including so-called extended coverage),
explosion, theft, 




<PAGE>   17


sprinkler leakage, and such other casualties, and (b) insuring against liability
for personal injury and property damage in such amounts that are maintained by
similar businesses and as may be required by applicable law with reputable and
financially sound insurance companies. The Company will provide, at the request
of the Bank, a detailed list of the insurance then in effect, stating names of
insurance companies, the amounts and rate of insurance, dates of expiration
thereof and the properties and risks covered thereby. All policies of insurance
shall provide for twenty (20) days' written minimum cancellation notice to the
Bank and, at request of the Bank, shall be delivered to and held by it. From and
after the occurrence and during the continuance of an Event of Default, the Bank
may act as attorney for the Companies in obtaining, adjusting, settling, and
canceling such insurance and endorsing any drafts. In the event of failure to
provide insurance as herein provided, the Bank may, at its option following
notice to the Companies, provide such insurance, and the Companies shall pay to
the Bank, upon demand, the cost thereof. Should the Companies fail to pay said
sum to the Bank upon demand, interest shall accrue thereon from the date of
demand until paid in full at the highest rate set forth in any document or
instrument evidencing any of the Obligations. The Companies shall notify Bank in
writing within ten (10) days of the occurrence of any damage resulting in an
uninsured claim for the sum of $100,000 or greater made by any Company. The
Companies shall maintain adequate insurance at the Affiliated Entity level. The
Bank shall be listed as an additional insured on all insurance policies
maintained by the Companies at either the Company or Affiliated Entity level.

5.4. Sale of Assets; Merger; Subsidiaries; Tradenames. Said Company will not
sell, lease, transfer, or otherwise dispose of any of its material assets other
than real estate assets sold in the normal course of business or cause any
Affiliated Entity to sell, lease, transfer, or otherwise dispose of, any of such
Affiliated Entity's material assets. Except as in the normal course of business,
said Company shall not without the prior written consent of the Bank consolidate
with or merge into any other entity, or permit any other entity to consolidate
with or merge into it. Except for acquisition of additional Affiliated Entities
from the proceeds of the Revolving Line of Credit in accordance herewith, said
Company shall comply with subsection 2.2 when acquiring all or substantially all
of the assets or business of any other company, person, or entity by means other
than proceeds of the Revolving Line of Credit. The Company has no subsidiaries
or affiliates except for (a) other Companies, (b) the partnership in which it is
a general or limited partner and (c) one or more SPV subsidiaries. Said Company
conducts business only in the name of said Company or in the registered trade
names of said Company. Except as otherwise permitted by subsection 2.2 or this
subsection 5.4, said Company shall not create or acquire any subsidiaries or
conduct business under any other trade names without the prior written consent
of the Bank.

5.5. Negative Pledge. The Companies shall not cause, permit, agree, consent to
cause or permit in the future (upon the happening of a contingency or
otherwise), any of its property or any of the real or personal property of any
Affiliated Entity, whether now owned or hereafter acquired, to become subject to
a lien or encumbrance; except: (a) liens in connection with the deposits
required by worker's compensation, unemployment 



<PAGE>   18


insurance, social security, and other like laws; (b) taxes, assessments,
reservations, exceptions, encroachments, easements rights of way, covenants,
conditions, restrictions, leases, and other similar title exceptions or
encumbrances affecting real property, provided they do not in the aggregate
materially detract from the value of said property or materially interfere with
its use in the ordinary conduct of said Company's or said Affiliated Entity's
business; (c) inchoate liens arising under ERISA to secure the contingent
liability of said Company; (d) liens in place as of the date of signing of this
Agreement; (e) liens on the real property owned by an Affiliated Entity which
said Company has disclosed to the Bank in writing on or before the date of this
Agreement as they currently exist or are refinanced on terms no less favorable
except market interest rate increases and similar changes in market terms to
said Affiliated Entity than the existing terms; (f) purchase money security
interests entered in the ordinary course of business; and (g) rights of first
refusal, call and put options or other similar arrangements entered into with
co-owners of equity interests in Affiliated Entities.

5.6.  Permitted Indebtedness; Other Borrowings in the Ordinary Course of
Business. Said Company shall not (a) create or incur any indebtedness for
borrowed money or advances, except for the Revolving Line of Credit, or (b)
guarantee, endorse, or otherwise become surety for or upon the obligations of
others, except: (i) by endorsement of negotiable instruments for deposit or
collection in the ordinary course of business; (ii) non-recourse indebtedness
which is exculpatory to said Company for a monetary liability; (iii)
indebtedness to trade creditors no more than sixty (60) days past the date such
indebtedness was originally incurred except contested liabilities as described
in subsection 5.1; (iv) for obligations as a general partner incurred in the
ordinary course of the partnership's business; (v) purchase money obligations
and other indebtedness incurred in the ordinary course of said Company's
business; and (vi) existing indebtedness guaranteed by Lexford Residential Trust
as of the date of signing of this Agreement.

5.7.  Minimum Security. Said Company shall maintain, in conjunction with the
other Companies, as minimum security for the Revolving Line of Credit,
Collateral having an aggregate resale value at least equal to the outstanding
principal balance of the Note and any interest accrued thereon. "Aggregate
Resale Value" shall mean the fair market value of the Collateral, in the
aggregate, in an arms length transaction between parties of substantially equal
bargaining position given a reasonable period of time for negotiation and sale.

5.8.  Sale of Accounts; No Consignment. Except as outlined in subsection 5.3,
said Company shall not sell, assign, or encumber, except to the Bank, any of its
Accounts or notes receivable. Said Company shall not permit any of its Inventory
to be sold or transferred on consignment or acquire or possess any of its
Inventory on consignment.

5.9.  Ownership. None of the Companies shall permit any material change in its
ownership, without the prior written consent of the Bank.



<PAGE>   19



5.10. Maintenance of Intercorporate Funds Agreement. No Company shall materially
amend, modify, restate, or otherwise change any of the terms, provisions, and
conditions set forth in the Intercorporate Funds Agreement dated August 11,
1995, and shall notify the Bank immediately upon termination of such
Intercorporate Funds Agreement by any party thereto.

5.11. Trade Accounts Payable. No Company shall permit its trade accounts payable
to be past due for more than sixty (60) days unless being contested in good
faith and for which adequate reserves are maintained in accordance with
generally accepted accounting principles, consistently applied.

5.12. Net Worth. The Companies shall maintain at all times a Net Worth, as
determined on a quarterly basis and calculated in accordance with generally
accepted accounting principles and "equity method" accounting principles,
consistently applied, of not less than $60,000,000. "Net Worth" shall mean the
consolidated shareholder's equity of the Companies increased by consolidated
liabilities for deferred compensation and the cost of treasury shares.

5.13. Ratio of Total Liabilities to Net Worth. The Companies shall maintain an
aggregate ratio of total liabilities excluding non-recourse debt to Net Worth,
calculated in accordance with generally accepted accounting principles
consistently applied, of not greater than 1.5 to 1.0.

5.14. Ratio of Net Operating Cash Flow to Debt Service. The Companies shall
maintain an aggregate calendar year to date ratio of Net Operating Cash Flow as
reported in the Companies' public financial statements to required contractual
payments of principal and interest to the Bank on the Loan pursuant to this
Agreement of not less than to 2.0 to 1.0.

5.15. Recurring Cash Flow. The Companies shall maintain annual recurring EBITDA
(earnings before interest and non-recurring noncash items (excluding interest on
wholly owned properties), taxes, depreciation, and amortization) of not less
than $15,000,000.

5.16. Environmental Compliance and Indemnification. The Companies hereby
indemnify the Bank and hold the Bank harmless from and against any loss, damage,
cost, expense, or liability (including strict liability) directly or indirectly
arising from or attributable to the generation, storage, release, threatened
release, discharge, disposal, or presence (whether by one or more of the
Companies or any employees, agents, contractor, or subcontractors of one or more
of the Companies or any predecessor in title or any third persons occupying or
present on the Premises), or the breach of any of the representations and
warranties regarding the Premises, including, without limitation: (a) those
damages or expenses arising under the Environmental Laws; (b) the costs of any
repair, cleanup, or detoxification of the Premises, including the soil and
ground water thereof, and the preparation and implementation of any closure,
remedial, or other required plans; (c) damage to any natural resources; and (d)
all reasonable costs and expenses incurred by 


<PAGE>   20


the Bank in connection with clauses (a), (b) and (c) including, but not limited
to reasonable attorney's fees.

         The indemnification provided for herein shall not apply to any losses,
liabilities, damages, injuries, expenses or costs which: (i) arise from the
gross negligence or willful misconduct of the Bank, or (ii) relate to Hazardous
Substances placed or disposed of on the premises after the Bank acquires title
to the Premises through foreclosure or otherwise.

5.17. Maintenance of Accounts. Said Company shall maintain all of its primary
operating and deposit accounts and all deposit accounts for the Affiliated
Entities at the Bank, unless required by the respective first mortgage holders
of the Affiliated Entities or regulatory authorities to be maintained elsewhere.

5.18. Change in Management Agreements. Except for subordinations permitted by
subsection 3.2 of this Agreement, said Company shall not change any terms of the
property management agreements which are part of the Collateral without the
prior written consent of the Bank, which consent shall not be unreasonably
withheld.

6.    Financial Information and Reporting. The Companies shall provide to the 
Bank the following documentation and information and deliver the following on a
consolidated basis (except as specified below) within forty-five (45) days after
the end of the first three quarters of each calendar year: (a) financial
statements, including a balance sheet, statements of income and surplus and cash
flow reports for the Companies, certified by the President and Chief Executive
Officer, or the Executive Vice President and Chief Financial Officer or the
Senior Vice President and Controller or the Senior Vice President and Treasurer
of Lexford Residential Trust, as fairly representing the Companies' financial
condition using accounting principles consistently applied as of the end of such
period; (b) statements signed by the President and Chief Executive Officer, or
the Executive Vice President and Chief Financial Officer or the Senior Vice
President and Controller or the Senior Vice President and Treasurer of Lexford
Residential Trust, setting forth and certifying the compliance of the Companies
with the terms of this Agreement; (c) a report in the event one or more of the
Companies has become aware of its termination as (i) a general partner of (ii)
an owner of, or (iii) the property management company of any Affiliated Entity
and an analysis of the financial impact of such termination; (e) immediately
upon becoming aware of the existence of any set of facts or circumstances which,
by themselves, upon the giving of notice, the lapse of time, or any one or more
of the foregoing, would constitute a breach of any of the terms or conditions of
this Agreement or an Event of Default under this Agreement, a written notice
specifying the nature and period of existence thereof and what action the
Company is taking or proposes to take with respect thereto; and (f) at the
request of the Bank, such other information as the Bank may from time to time
reasonably require.

6.1.  Periodic Disclosure and Reporting. The Companies shall provide to the 
Bank the following documentation and information: (a) within fifteen (15) days
after filing, copies 



<PAGE>   21


of any and all materials filed by the Companies with the Securities and Exchange
Commission, regardless of whether the Companies have filed such materials on
their own behalf, in their capacity as a general partner, or otherwise; (b) at
the request of the Bank, filing copies of any and all federal corporate income
tax returns, together with any amendments, exhibits, or supplements thereto, and
any related documentation filed with the Internal Revenue Service; (c)
immediately upon becoming aware of the existence of any set of facts or
circumstances which, by themselves, upon the giving of notice, the lapse of
time, or any one or more of the foregoing, would constitute a breach of any of
the terms or conditions of this Agreement or an Event of Default under this
Agreement, a written notice specifying the nature and period of existence
thereof and what action the Companies are taking or propose to take with respect
thereto; and (d) at the request of the Bank, such other information as the Bank
may from time to time reasonably require.

6.2. Annual Financial Statements. The Companies shall deliver to the Bank within
ninety (90) days of the end of each fiscal year: (a) consolidated audited
financial statements, which have been prepared in accordance with generally
accepted accounting principles consistently applied and certified by independent
certified public accountants reasonably satisfactory to the Bank, containing a
balance sheet, statements of income and shareholder's equity, statements of cash
flows, followed by any management letters written by such accountants; (b) at
the request of the Bank, consolidated unaudited financial statements prepared by
the Companies in accordance with "equity method" accounting principles
consistently applied, containing a balance sheet, statements of income and
shareholder's equity, and statements of cash flows; (c) at request of the Bank a
report signed by the President and Chief Executive Officer, or the Executive
Vice President and Chief Financial Officer or the Senior Vice President and
Controller, or the Senior Vice President and Treasurer of Lexford Residential
Trust setting forth a detailed analysis of each of the Affiliated Entities'
financial condition including financial statements reflecting (i) net cash flow,
occupancy percent, gross revenue, operating expenses (which includes fees and
payments to the Companies), maintenance, and repair expense, net operating
income, mortgage payments not due to the Companies and net cash flows; (ii) any
advances from the Companies to, or notes due to the Companies from (balance due
and estimated value), the Affiliated Entities, (iii) all fees, advances,
interest, and principal payments paid to Companies by the Affiliated Entities,
and (iv) lender, mortgage balance, payment amount, and status of each mortgage
encumbering all property owned by an Affiliated Entity; (d) financial
statements, including balance sheet and income statement of each Affiliated
Entity, and (e) the unaudited actual cash flow statements of the Affiliated
Entities, all of which may be presented in a computer disk format reasonably
acceptable to the Bank.

7.   Default.

7.1. Events of Default. An "Event of Default" shall exist if any of the
following occurs and is continuing: (a) the Companies fail to make any payment
of principal or interest on any note executed in connection with this Agreement
on or within fifteen (15) days of the date such payment is due; (b) the
Companies fail to perform or observe any 


<PAGE>   22


covenant contained in subsections 3.3, 4.1 through 5.18, inclusive, of this
Agreement and such failure continues for more than thirty (30) days after such
failure shall first occur; (c) the Companies fail to perform or observe any
other covenant contained in this Agreement and such failure continues for more
than seven (7) days after such failure shall first occur, (d) the Companies fail
to comply with any other provision of this Agreement, and such failure continues
for more than thirty (30) days after discovery of such failure by any of the
parties to this Agreement; (e) any warranty, representation, or other statement
by or on behalf of the Companies contained in this Agreement or in any
instrument furnished in compliance with or in reference to this Agreement is
false or misleading in any material respect, or the Companies fail to perform or
observe any covenant contained in any mortgages, security agreement or other
agreement in favor of the Bank and such failure continues for more than thirty
(30) days from the date after discovery of such failure by any of the parties to
this Agreement; (f) one or more of the Companies fails to perform or observe any
covenant contained in any security agreement, or other agreement in favor of the
Bank and such failure continues for more than thirty (30) days from the date
after discovery of such failure by any of the parties to this Agreement; (g) one
or more of the Companies makes an assignment for the benefit of creditors, or
consents to or suffers the appointment of a trustee, receiver, or liquidator;
(h) bankruptcy, reorganization, arrangement, insolvency, or liquidation
proceedings are instituted by one or more of the Companies and such proceeding
is not dismissed or staged within 90 days of the commencement thereof; (i)
bankruptcy, reorganization, arrangement, insolvency, or liquidation proceedings
are instituted against one or more of the Companies and such proceeding Is not
dismissed or stayed within 90 days of the commencement thereof; (j) failure to
give the Bank notice that an Affiliated Entity is involved in any bankruptcy,
reorganization, arrangement, insolvency, or liquidation proceedings; (k) an
uninsured final judgment or judgments for the payment of money aggregating in
excess of $100,000 is or are outstanding against one or more of the Companies
and any such judgment or judgments have not been discharged in full or stayed;
(l) the occurrence of any event which allows the acceleration of the maturity of
any indebtedness of the Companies to the Bank or any of the Affiliated Entities
to the Bank under any indenture, agreement, or undertaking other than this
Agreement which evidences an obligation or obligations at one or more of the
Companies aggregating $100,000 or more and more than thirty (30) days have
passed since the occurrence of such acceleration event without such acceleration
having been rescinded or the obligations accelerated having been discharged; (m)
the occurrence of any event which allows the acceleration of the maturity of any
material indebtedness of the Companies to any other person, corporation, or
entity under any indenture, agreement, or undertaking and the failure of the
Companies to cure any resulting default within the longer of thirty (30) days
from such occurrence or the period provided in any applicable documentation
governing such indebtedness; (n) the loss by the Companies of the ability to
manage other than by sale of properties at least eighty percent (80%) of the
Affiliated Entities existing on August 11, 1995, provided, such loss causes an
event which materially impairs the prospect of payment or performance by the
Companies in accordance with this Agreement; or (o) an event occurs which
materially impairs the prospect of payment or performance by the Companies in
accordance with 



<PAGE>   23


this Agreement and more than five (5) days have passed since notice was given to
the Companies of such event without cure of such default.

8.   Remedies on Default.

8.1. Legal and Contractual Remedies. Upon the occurrence of an Event of Default
and for so long thereafter as such Even of Default continues, the Bank shall
have the rights and remedies of a Secured Party under this Agreement, under any
other instrument or agreement securing, evidencing, or relating to the
Obligations and under the law of the State of Ohio, or any other applicable
state law, and the Bank may exercise any right, power, or remedy permitted to
the Bank by law or any provision of this Agreement. Without limiting the
generality of the foregoing, upon the occurrence or continuation of an Event of
Default, the Bank shall have the right without further notice or demand to the
Companies (a) to declare the entire principal and all interest accrued on the
Obligations to be forthwith due and payable, without any presentment, demand,
protest, or other notice of any kind, all of which are hereby expressly waived
by the Companies, and (b) to take possession of the Collateral and all books and
records relating to the Collateral and for that purpose the Bank may enter upon
any premises on which the Collateral or books and records relating to the
Collateral or any part thereof may be situated and remove the same therefrom.
The Companies expressly agree that the Bank, without demand of performance or
other demand, advertisement, or notice of any kind (except the notices specified
below of time and place of public sale or disposition or time after which a
private sale or disposition is to occur) to or upon the Companies or any other
person or entity (all and each of which demands, advertisements, and/or notices
are hereby expressly waived), may forthwith in a commercially reasonable manner
consistent with applicable economic, industry, and market conditions for
property or collateral of like nature, collect, receive, appropriate, and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
lease, assign, give option or options to purchase or sell or otherwise dispose
of and deliver the Collateral (or contract to do so), or any part thereof, in
one or more parcels at public or private sale or sales, at any of the Bank's
offices or elsewhere at such prices as the Bank may deem best, for cash or on
credit or for future delivery without assumption of any credit risk. The Bank
shall have the right upon any such public sale or sales, and, to the extent
permitted by law, upon any such private sale or sales, to purchase the whole or
any part of the Collateral so sold, free of any right or equity of redemption.
The Companies further agree, at the Bank's request, to assemble the Collateral
and to make it available to the Bank at such places as the Bank may reasonably
select. The Companies further agree to allow the Bank to use or occupy the
Companies' premises, without charge, for the purpose of effecting the Bank's
remedies in respect of the Collateral. The Bank shall apply the net proceeds of
any such collection, recovery, receipt, appropriation, realization or sale,
after deducting all reasonable costs and expenses of every kind incurred in
connection therewith or incidental to the care or safekeeping of any or all of
the Collateral or in any way relating to the rights of the Bank hereunder,
including reasonable attorneys' fees and legal expenses, to the payment in whole
or in part of the Obligations, in such order as the Bank may elect, and only
after so paying over such net proceeds and after the payment by the Bank of any
other amount 


<PAGE>   24



required by any provision of law, need the Bank account for the surplus, if any.
To the extent permitted by applicable law, the Companies waive all claims,
damages and demands against the Bank arising out of the repossession, retention,
sale or disposition of the Collateral. The Companies agree that the Bank need
not give more than ten (10) days' notice (which notification shall be deemed
given when mailed, postage prepaid, addressed to one or more of the Companies at
its address set forth in this Agreement, or when telecopied or telegraphed to
that address or when telephoned or otherwise communicated orally to one or more
of the Companies or any of their agents at that address) of the time and place
of any public sale or of the time after which a private sale may take place and
that such notice is reasonable notification of such matters. The Companies shall
remain liable for any deficiency if the proceeds of any sale or disposition of
the Collateral are insufficient to pay all amounts to which the Bank is
entitled. The Companies shall also be liable for the costs of collecting any of
the Obligations or otherwise enforcing the terms thereof or of this Agreement,
including reasonable attorneys' fees. Upon the occurrence of any Event of
Default, in addition to all other remedies set forth above, any and all funds
due and owing to the Bank, whether before or after any acceleration of the
amount due to the Bank, shall bear interest at the prime rate (as that term is
defined in the Note) plus two percent.

8.2. Appointment of Receiver. In addition to any remedy herein before provided
and not in limitation thereof, upon the occurrence and continuation of any Event
of Default, and at any time prior to or after the institution of any enforcement
proceeding, the Bank shall have the right to make application to a court of
competent jurisdiction for appointment of a receiver for all or any part of the
Collateral and the businesses of the Companies without regard to the adequacy of
the Collateral for the repayment of the indebtedness secured by the Collateral
or the solvency of the Companies or any person or persons liable for the payment
of the Obligations, and the Companies do hereby irrevocably consent to such
appointment, waive any and all defenses to such appointment and agree not to
oppose any application therefor by the Bank, but nothing herein is to be
construed to deprive the Companies of any right, remedy or privilege the
Companies may now have under the law to have a receiver appointed, provided,
however, that the appointment of such receiver, trustee or other appointee by
virtue of any court order, statute, or regulation shall not impair or in any
manner prejudice the rights of the Bank to receive payment of the income and
proceeds of the Collateral pursuant to other terms and provisions hereof. Any
such receiver shall have all of the usual power to hold, develop, rent, lease,
manage, maintain, operate, contract, and otherwise use or permit the use of the
Collateral upon such terms and conditions as said receiver may deem to be
prudent and reasonable under the circumstances. Such receivership shall, at the
option of the Bank, continue until full payment of all of the Obligations or
until title to all of the Collateral shall have passed to the Bank pursuant to
an enforcement proceeding.

9.   Miscellaneous.

9.1. Limited Appointment of Lexford Residential Trust as Attorney-in-Fact. Each
of the Companies hereby irrevocably constitutes and appoints Lexford Residential
Trust and 



<PAGE>   25


any officer or agent thereof, with full power of substitution, as said Company's
true and lawful attorney-in-fact with full irrevocable power and authority in
the place and stead of each of the corporations and limited liability companies
constituting the Companies and in their names as set forth above in the preamble
to this Agreement, for the purpose of carrying out the terms of this Agreement,
to take any and all appropriate action and to execute any and all documents and
instruments that may be necessary or desirable to accomplish the purposes of
this Agreement and without limiting the generality of the foregoing hereby
grants to Lexford Residential Trust the power and right, on behalf of any one or
more of the Companies, without notice or assent: (a) to execute and deliver to
the Bank such contracts, instruments, release, and other agreements or documents
as the Bank shall reasonably deem necessary to evidence the terms and conditions
of this Agreement; (b) to certify or attest to the execution, delivery, filing,
or recording of such contracts, instruments, releases, and other documents
described in subsection (a) above; (c) to execute, file, and record all such
financing statements, certificates of title, mortgages, security agreements,
assignments, deeds of trust, and other certificates of registration and
operation and similar documents and instruments as the Bank may deem necessary
or desirable to grant, protect, perfect, and validate the Bank's security
interests, mortgages, or other liens in or on the Collateral, or any portion
thereof; and (d) to provide the financial and other information and disclosures
to the Bank required pursuant to this Agreement. The Companies hereby ratify all
that said attorney shall lawfully do or cause to be done by virtue hereof. This
power of attorney is a power coupled with an interest and shall be irrevocable.

9.2. Assumption by New Entities. Upon the creation of a new entity which would
have been one of the Companies if in existence as of the date of this Agreement,
the Companies shall cause such new entity to assume any indebtedness evidenced
by the Note, pledge all of its assets to secure such indebtedness, cause all of
its stock to be pledged to secure such indebtedness, and otherwise be bound by
the covenants and agreements of this Agreement.

9.3. Notices. (a) All communications under the default (including, without
limitation, the exercise of remedies available due to a default or an Event of
Default) provisions of this Agreement shall be by certified mail, return receipt
requested. All other communications under this Agreement or under the notes
executed pursuant thereto shall be in writing, by fax, by overnight delivery or
shall be mailed by first class mail, postage prepaid, (1) if to the Bank, at the
following address, or at such other address as may have been furnished in
writing to the Companies by the Bank:

         The Provident Bank
         10 West Broad Street
         Columbus, Ohio 43215
         Attn:  William R. McNamara, Vice President
         Fax Number:  (614) 221-0875


<PAGE>   26


(2) if to the Companies, at the following address, or at such other address as
may have been furnished in writing to the Bank by the Companies:

   Lexford Residential Trust
   The Huntington Center, 41 South High Street
   Columbus, OH 43215
   Attn: Mark D. Thompson, Executive Vice President and Chief Financial Officer
         Michael F. Sosh, Senior Vice President and Treasurer
   Fax Number:  (614) 225-1100

(b) any notice so addressed and mailed by registered or certified mail shall be
deemed to be given two (2) business days following the date when so mailed.

9.4. Reproduction of Documents. This Agreement and all documents relating
hereto, including, without limitation, (a) consents, waivers, and modifications
which may hereafter be executed, (b) documents received by the Bank at the
closing or otherwise, and (c) financial statements, certificates, and other
information previously or hereafter furnished to the Bank, may be reproduced by
the Bank by any photographic, photostatic, microfilm, microcard, miniature
photographic, or other similar process and the Bank may destroy any original
document so reproduced. The Companies agree and stipulate that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by the Bank in the
regular course of business) and that any enlargement, facsimile, or further
reproduction of such reproduction shall likewise be admissible in evidence.

9.5. Survival, Successors, and Assigns. All warranties, representations, and
covenants made by the Companies herein or on any certificate or other instrument
delivered by it or on its behalf under this Agreement shall be considered to
have been relied upon by the Bank and shall survive the closing of the Revolving
Line of Credit regardless of any investigation made by the Bank on its behalf.
All statements in any such certificate or other instrument shall constitute
warranties and representations by the Companies. This Agreement shall inure to
the benefit of and be binding upon the heirs, successors and assigns of each of
the parties.

9.6. Amendment and Waiver, Duplicate originals. This Agreement may be amended,
and the observance of any term of this Agreement may be waived, with (and only
with) the written consent of the Companies and the Bank; provided however that
nothing herein shall change the Bank's sole discretion (as set forth elsewhere
in this Agreement) to make advances, determinations, decisions, or to take or
refrain from taking other actions. No delay or failure or other course of
conduct by the Bank in the exercise of any power or right shall operate as a
waiver thereof; nor shall any single or partial exercise of the same preclude
any other or further exercise thereof, or the exercise of any other power or
right. Two or more duplicate originals of this Agreement may be signed by the
parties, each of 



<PAGE>   27


which shall be an original but all of which together shall constitute one and
the same instrument.

9.7. Uniform Commercial Code and Generally Accepted Accounting Principles.
Unless the context otherwise requires, all terms used herein which are defined
in the Uniform Commercial Code as enacted in Ohio shall have the meaning stated
therein, and all accounting terms shall be determined in accordance with
generally accepted accounting principles, consistently applied.

9.8. Enforceability and Governing Law. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction, as to such jurisdiction, shall
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. No delay or omission on
the part of the Bank in exercising any right shall operate as a waiver of such
right or any other right. All of the Bank's rights and remedies, whether
evidenced hereby or by any other agreement or instruments, shall be cumulative
and may be exercised singularly or concurrently. This Agreement shall be
governed by and construed in accordance with the laws of the State of Ohio. The
Companies agree that any legal suit, action or proceeding arising out of or
relating to this Agreement may be instituted in a state or federal court of
appropriate subject matter jurisdiction in the State of Ohio; waive any
objection which they may have now or hereafter to the venue of any suit, action,
or proceeding in any such court; and irrevocably submit to the jurisdiction of
any such court in any such suit, action, or proceeding.

9.9. Waiver of Right to Trial by Jury. EACH PARTY TO THIS AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, OR
CAUSE OF ACTION (1) ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT,
DOCUMENT, OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (2) IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE
TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING AND WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE; AND EACH
PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION, OR CAUSE
OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER
OF THEIR RIGHT TO TRIAL BY JURY.


<PAGE>   28

9.10. Advertising. The Companies agree that the Bank may advertise or otherwise
disclose for marketing purposes the extent and nature of the credit extended or
to be extended and other services provided to the Companies by the Bank in
connection with or relating in any way to the Loan. The Companies have the right
of advance inspection and approval of all advertising (using their name) not to
be unreasonably withheld or delayed.

9.11. Term of Agreement. The term of this Agreement shall commence with the date
hereof and end on the date when, after written notice from either party to the
other that no further loans are to be made hereunder, the Companies pay in full
the Loan and all other obligations of the Companies to the Bank which are
secured hereby, and the Bank has no further obligations of any type to the
Companies.

9.12. Singular and Plural; Joint and Several Liability. As used in this
Agreement, the singular shall include the plural, the plural the singular and
the use of masculine, feminine, or neuter gender shall include all genders, as
the context may require. Reference in this Agreement to any one or more of the
Companies shall mean all of the Companies, jointly and severally; therefore the
obligations of the Companies in this Agreement shall be the joint and several
liability of each such Company.

9.13. Definitions. As used in this Agreement, the meanings assigned to defined 
terms are set forth in the appropriate sections of this Agreement.

9.14. Warrant of Attorney. With full knowledge of all constitutional rights, if
any payment under the Note is not received by the Bank on or before the date
when due, or should default be made in the performance or observance of the
covenants and agreements of this Agreement or any of the other loan documents
evidencing the Loan, after any applicable notice or period of grace, the
Companies hereby authorize and empower any attorney of any court of record
within the United States of America or elsewhere to appear for the Companies
and, with or without complaint filed, confess judgment or a series of judgments
against the Companies in favor of the Bank as of any time, present, or future,
for the then due and unpaid balance or balances of the principal, interest, late
charges, and collections expenses evidenced by the Note, or any part thereof,
together with the costs of the suit, and to waive and release all errors in said
proceedings and petitions in error and the right to appeal from the judgment
rendered, on which judgment or judgments one or more executions may issue
forthwith; and for so doing this Agreement or a copy thereof verified by
affidavit shall be a sufficient warrant. The foregoing warrant of attorney shall
survive any judgment rendered pursuant to the Note, and if any such judgment be
vacated for any reason, the Bank nevertheless may thereafter use the foregoing
warrant of attorney to obtain an additional judgment or judgments against the
Companies.



<PAGE>   29

                            SIGNED AND ACKNOWLEDGED:

WARNING--BY SIGNING THIS PAPER, YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME, A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR, WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT,
OR ANY OTHER CAUSE. (SEC. 2323.13, O.R.C.).

                                                Lexford Residential Trust    
                                                                             
                                                                             
                                                By:  /s/ John B. Bartling    
                                                    ------------------------ 
                                                     John B. Bartling,       
                                                Its: Chief Executive Officer 
                                                                             
                                                                             
                                                Provident Bank               
                                                                             
                                                                             
                                                By:  /s/ William R. McNamara 
                                                    ------------------------ 
                                                     William R. McNamara     
                                                Its: Vice President