FINANCING AGREEMENT

         THIS FINANCING  AGREEMENT  (this  "Agreement") is made this 23rd day of
April,  1999, by and among  MID-ATLANTIC  REALTY TRUST, a real estate investment
trust  organized  under the laws of the State of Maryland  ("Mid-Atlantic")  and
MART LIMITED PARTNERSHIP,  a limited partnership organized under the laws of the
State  of  Maryland  ("MART";  each   of  Mid-Atlantic  and  MART a  "Borrower";
Mid-Atlantic and MART,  collectively,  the "Borrowers"),  jointly and severally;
and FMB BANK ("FMB"), FIRST UNION NATIONAL BANK ("First Union"),  PROVIDENT BANK
OF  MARYLAND,  a banking  corporation  organized  under the laws of the State of
Maryland  ("Provident"),  and CHEVY CHASE BANK,  FSB, a  depository  institution
chartered  under the laws of the United  States  ("Chevy  Chase") and each other
financial  institution which is a party to this Agreement,  whether by execution
of this Agreement or otherwise (collectively,  the "Lenders" and individually, a
"Lender"); and FMB BANK, in its capacity as administrative agent for each of the
Lenders  (the  "Administrative  Agent") and FIRST UNION  NATIONAL  BANK,  in its
capacity  as  documentation  agent for each of the Lenders  (the  "Documentation
Agent").


                                    RECITALS

         A. The  Borrowers  have  applied to the Lenders  for credit  facilities
consisting of (i) a revolving credit facility in the maximum principal amount of
$75,000,000 and (ii) a letter of credit facility in the maximum principal amount
of  $5,000,000,  as part of that  revolving  credit  facility  to be used by the
Borrowers for the Permitted Uses described in this Agreement.

         B. The Lenders  severally  are willing to make those credit  facilities
available  jointly and severally to the Borrowers  upon the terms and subject to
the conditions set forth in this Agreement.


                                   AGREEMENTS

         NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
hereby agree as follows:


                                    ARTICLE I
                                   DEFINITIONS

     Section 1.1    Certain Defined Terms.

         As used in this  Agreement,  the  terms  defined  in the  Preamble  and
Recitals hereto shall have the respective  meanings specified  therein,  and the
following terms shall have the following meanings:

         "Adjusted Unencumbered NOI" means as to the Borrowers on a consolidated
basis for any  period of  determination  thereof,  the  annualized  NOI less the
Unencumbered Capital Expenditure Reserve.

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         "Administrative  Agent" means the Person defined as the "Administrative
Agent" in the preamble of this  Agreement  and shall also include any  successor
Administrative   Agent   appointed   pursuant   to  Section   8.7.3   (Successor
Administrative Agent).

         "Administrative  Agency Fee" and "Administrative  Agency Fees" have the
meanings described in Section 8.8 (Administrative Agency Fee).

         "Administrative Agent's Obligations" shall mean any and all Obligations
payable solely to and for the exclusive benefit of the  Administrative  Agent by
either of the  Borrowers  under the terms of this  Agreement  and/or  any of the
other  Financing  Documents,   including,   without  limitation,   any  and  all
Administrative Agency Fees and Letter of Credit Fees.

         "Affiliate"  means,  with respect to any designated  Person,  any other
Person,  (a)  directly  or  indirectly   controlling,   directly  or  indirectly
controlled  by, or under  direct or  indirect  common  control  with the  Person
designated,  (b) directly or  indirectly  owning or holding five percent (5%) or
more of any equity interest in such designated  Person, or (c) five percent (5%)
or more of whose stock or other equity interest is directly or indirectly  owned
or held by such designated  Person.  For purposes of this  definition,  the term
"control"  (including  with  correlative  meanings,   the  terms  "controlling",
"controlled by" and "under common control with") means the possession,  directly
or  indirectly,  of the power to direct or cause the direction of the management
and policies of a Person,  whether  through  ownership of voting  securities  or
other equity interests or by contract or otherwise.

         "Agreement"  means this  Financing  Agreement,  as  amended,  restated,
supplemented or otherwise  modified in writing in accordance with the provisions
of Section 9.2 (Amendments; Waivers).

         "Agents" means the  Administrative  Agent and the Documentation  Agent,
collectively.

         "Agents'  Obligations"  means the  collective  reference to any and all
Obligations  payable  solely to and for the  exclusive  benefit of either of the
Agents  by  either or both of the  Borrowers  under the terms of this  Agreement
and/or any of the other Financing Documents.

         "Annual Debt Service" means as to the Borrowers on a consolidated basis
for any period of determination  thereof,  the amount required to fully amortize
the outstanding Unsecured Indebtedness with an amortization of twenty (20) years
and an implied  interest rate equivalent to the ten (10) year Treasury Note rate
plus two and one-half percent (2.5%) per annum.

         "Applicable  Interest  Rate" means (a) the  Eurodollar  Rate or (b) the
Base Rate.

         "Applicable  Margin" means the applicable  rate per annum added, as set
forth in Section 2.4.1  (Applicable  Interest Rates) to the Eurodollar Base Rate
or the Prime Rate.

         "Assets"  means at any date all assets that,  in  accordance  with GAAP
consistently  applied,  should be classified as assets on a consolidated balance
sheet of the Borrowers and their respective Subsidiaries.

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         "Assignee" means any Eligible  Assignee to which any Lender assigns all
or any portion of its interests  under this Agreement,  any Commitment,  and the
Revolving Loan, in accordance with the provisions of Section 9.5 (Assignments by
Lenders),  together  with any and all  successors  and assigns of such  Eligible
Assignees; "Assignees" means the collective reference to all Assignees.

         "Bankruptcy  Code" means Title 11 of the United States Code, as amended
from time to time, and any successor Laws.

         "Base  Rate"  means the sum of (a) the  Applicable  Margin plus (b) the
Prime Rate.

         "Base Rate Loan"  means any  advance  of the  Revolving  Loan for which
interest is to be computed with reference to the Base Rate.

         "Business Day" means any day other than a Saturday, Sunday or other day
on which (a) in the case of FMB (as Administrative Agent and Lender), commercial
banks in the State are  authorized  or required to close and, (b) in the case of
the Lenders  other than FMB,  those  Lenders are closed for the  transaction  of
business at the  addresses  stated after their names on the  signature  pages of
this Agreement.

         "Cancellation   Fee"  has  the  meaning   described  in  Section  2.1.7
(Cancellation Fee).

         "Cash and Cash Equivalents" means unrestricted (a) cash, (b) securities
with maturities of one year or less from the date of acquisition issued or fully
guaranteed or insured by the United States Government or any agency thereof, (c)
certificates of deposit with maturities of one (1) year or less from the date of
acquisition  of, or money market  accounts  maintained  with the  Administrative
Agent,  any  Affiliate  of  the  Administrative  Agent,  or any  other  domestic
commercial  bank having  capital  and  surplus in excess of One Hundred  Million
Dollars  ($100,000,000.00)  or such other  domestic  financial  institutions  or
domestic  brokerage  houses to the extent  disclosed  to, and  approved  by, the
Administrative  Agent and (d)  commercial  paper of a domestic  issuer  rated at
least either A-1 by Standard & Poor's  Corporation  (or its successor) or P-1 by
Moody's  Investors  Service,  Inc. (or its successor) with maturities of six (6)
months or less from the date of acquisition.

         "Closing  Date"  means the  Business  Day,  in any event not later than
April 23, 1999 on which the  Administrative  Agent shall be  satisfied  that the
conditions  precedent set forth in Section 4.1  (Conditions to Initial  Advance)
have been fulfilled or otherwise waived by the Administrative Agent.

         "Commitment" means with respect to each Lender, such Lender's Revolving
Credit  Commitment  or  Letter  of Credit  Commitment,  as the case may be,  and
"Commitments" means the collective reference to the Revolving Credit Commitments
and the Letter of Credit Commitment of all of the Lenders.

         "Committed  Amount"  means with respect to each Lender,  such  Lender's
Revolving Loan Committed  Amount and Letter of Credit Committed  Amount,  as the
case may be, and  "Committed  Amounts"  means  collectively  the Revolving  Loan
Committed Amount and the Letter

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of Credit Committed Amount, of each of the Lenders.

         "Commitment Fee" has the meaning described in Section 2.3.3 (Commitment
Fee).

         "Commonly   Controlled   Entity"  means  an  entity,   whether  or  not
incorporated,  which is under  common  control with either  Borrower  within the
meaning of Section 414(b) or (c) of the Internal Revenue Code.

         "Contingent  Liabilities"  means as to the Borrowers on a  consolidated
basis for any period of determination  thereof (a) any contingent  obligation of
any Person  required to be shown on the  Borrowers'  balance sheet in accordance
with GAAP, and (b) any  obligation  required to be disclosed in the footnotes to
the  Borrowers'  financial  statements  in  accordance  with GAAP,  guaranteeing
partially or in whole any  Indebtedness,  lease,  dividend or other  obligation,
exclusive of contractual indemnities and guarantees of non-monetary  obligations
(other  than  guarantees  of  completion)  which have not yet been  called on or
quantified of any Person and excluding any long-term  ground lease  obligations.
Notwithstanding  the foregoing,  any litigation  required to be disclosed in the
footnotes to the Borrowers'  financial  statements in accordance with GAAP shall
not be  included  as a  "Contingent  Liability"  unless the same shall have been
reserved for in accordance with GAAP.

         "Corporate  Leverage Ratio" means as to the Borrowers on a consolidated
basis  for  any  period  of  determination   thereof  the  ratio  of  (a)  Total
Indebtedness to (b) Total Asset Value.

         "Current  Letter of Credit  Obligations"  has the meaning  described in
Section 2.2.5 (Payments of Letters of Credit).

         "Credit Facility" means with respect to each Lender,  such Lender's Pro
Rata Share of the Revolving Credit Facility or the Letter of Credit Facility, as
the case may be, and "Credit Facilities" means collectively the Revolving Credit
Facility  and the  Letter  of  Credit  Facility  and any  and all  other  credit
facilities now or hereafter extended under or secured by this Agreement.

         "Deed of Trust" and "Deeds of Trust"  have the  meanings  described  in
Section 4.1.6 (Deeds of Trust).

         "Default"  means an event  that,  with the giving of notice or lapse of
time, or both, would constitute an Event of Default under the provisions of this
Agreement.


         "EBITDA"  means as to the  Borrowers  on a  consolidated  basis for any
period of  determination  thereof,  the net earnings (loss) for such period plus
the sum of the  following  (to the extent  included  in the  calculation  of net
earnings (loss) and without  duplication):  (a)  depreciation  and  amortization
expense  plus (b)  Interest  Expense plus (c) income tax expense paid or accrued
plus (d) extraordinary  losses, losses from sales of assets and losses resulting
from forgiveness of Indebtedness  minus (e)  extraordinary  gains and gains from
sales of assets plus (f)  expenses  associated  with  significant  non-recurring
events minus (g) income  associated with significant  non-recurring  events plus
(h) minority interest expense.

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         "Eligible  Assignee"  means any Person who is: (a)  currently a Lender;
(b) a  commercial  bank,  trust  company,  insurance  company,  savings and loan
association,  savings  bank,  investment  bank,  pension  fund  or  mutual  fund
organized under the laws of the United States of America,  or any state thereof,
and having total assets in excess of  $5,000,000,000;  or (c) a commercial  bank
organized  under  the  laws  of any  other  country  which  is a  member  of the
Organization for Economic Cooperation and Development  ("OECD"),  or a political
subdivision  of  any  such  country,  and  having  total  assets  in  excess  of
$10,000,000,000,  provided  that such bank is acting  through a branch or agency
located in the United  States of  America.  If such  Person is not  currently  a
Lender,  such Person's senior unsecured long term indebtedness must be rated BBB
or higher by S&P,  Baa2 or higher by  Moody's,  or the  equivalent  or higher of
either  such  rating  by  another  rating  agency  of  national  reputation  and
reasonably acceptable to the Administrative Agent.

         "Enforcement  Costs"  means  all  expenses,  charges,  costs  and  fees
whatsoever  (including,  without  limitation,  reasonable  outside and allocated
in-house counsel  attorney's fees and expenses) of any nature whatsoever paid or
incurred  following  an  uncured  Event  of  Default  by or  on  behalf  of  the
Administrative Agent and/or any of the Lenders in connection with (a) any or all
of the Obligations,  the Agents'  Obligations,  this Agreement and/or any of the
other  Financing  Documents,  (b)  recording  of the  Deeds  of  Trust,  (c) the
creation,   perfection,   collection,   maintenance,    preservation,   defense,
protection,  realization  upon,  disposition,  sale or enforcement of all or any
part of this  Agreement,  any collateral  securing the Obligations or any of the
other  Financing  Documents,  including,  without  limitation,  those  costs and
expenses more specifically  enumerated in Section 9.10 (Enforcement  Costs), and
(d) the monitoring, administration, processing and/or servicing of any or all of
the Obligations, the Agents' Obligations, this Agreement and/or any of the other
Financing Documents.

         "ERISA" means the Employee  Retirement  Income Security Act of 1974, as
amended from time to time.

         "Eurodollar  Base Rate" means for any  Interest  Period with respect to
any Eurodollar  Loan, the per annum interest rate rounded upward,  if necessary,
to the nearest  1/100 of 1%,  appearing on Telerate  Page 3750 (or any successor
page) as the London  interbank  offered rate for deposits in Dollars at or about
11:00 a.m.  (London time) on the date that is two (2)  Eurodollar  Business Days
prior to the first day of such  Interest  Period for a term  comparable  to such
Interest  Period.  If for any  reason  such  rate  is not  available,  the  term
"Eurodollar  Base Rate" shall mean,  for any  Eurodollar  Loan for any  Interest
Period  therefor,  the rate per annum  (rounded  upwards,  if necessary,  to the
nearest  1/100 of 1%)  appearing  on  Reuters  Screen  LIBO  Page as the  London
interbank  offered  rate for  deposits  in Dollars at  approximately  11:00 a.m.
(London  time) two (2)  Eurodollar  Business Days prior to the first day of such
Interest  Period  for a term  comparable  to  such  Interest  Period;  provided,
however,  if more than one rate is  specified on Reuters  Screen LIBO Page,  the
applicable rate shall be the arithmetic mean of all such rates (rounded upwards,
if necessary, to the nearest 1/100 of 1%).

         "Eurodollar  Business Day" means any Business Day on which  dealings in
United States Dollar deposits are carried out on the London interbank market and
on which commercial banks

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are open for domestic and international  business  (including dealings in Dollar
deposits) in London, England.

         "Eurodollar  Loan"  means any advance of the  Revolving  Loan for which
interest is to be computed with reference to the Eurodollar Rate.

         "Eurodollar  Rate" means for any  Interest  Period with  respect to any
Eurodollar  Loan,  (a) the  Applicable  Margin,  plus (b) the per annum  rate of
interest calculated pursuant to the following formula:

                                    Eurodollar Base Rate
                                    1.00 - Reserve Percentage

         "Event of Default"  has the meaning  described  in ARTICLE VII (Default
and Rights and Remedies).

         "Extension Fee" has the meaning  described in Section 2.3.4  (Extension
Fee).

         "Facilities"  means the  collective  reference  to the loan,  letter of
credit,  interest rate protection,  foreign exchange risk, cash management,  and
other credit facilities now or hereafter  provided to either of the Borrowers by
the  Administrative  Agent or the Lenders  under this  Agreement or otherwise by
FMB.

         "FAD" or "funds available for  distribution"  means as to the Borrowers
on a  consolidated  basis for any  period of  determination  thereof,  FFO minus
principal amortization and non-revenue generating capital expenditures.

         "Federal Funds Rate" means for any day of  determination,  the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers,  as published for such
day (or, if such day is not a Business Day) by the Federal  Reserve Bank for the
next preceding Business Day) by the Federal Reserve Bank of Richmond or, if such
rate is not so  published  for any day that is a Business  Day,  the  average of
quotations  for such day on such  transactions  received  by the  Administrative
Agent from three (3) federal funds brokers of  recognized  standing  selected by
the Administrative Agent.

         "Fees"  means  the  collective  reference  to each fee  payable  to the
Administrative  Agent,  for its own  account or for the  ratable  benefit of the
Lenders,  under  the  terms of this  Agreement  or under the terms of any of the
other Financing Documents,  including,  without limitation, the Revolving Credit
Unused Line Fees,  Letter of Credit Fees, the  Cancellation  Fee, the Commitment
Fee, the Extension Fee and the Agency Fees.

         "Financing  Documents" means at any time  collectively  this Agreement,
the Notes,  the Deeds of Trust,  the  Security  Documents,  the Letter of Credit
Documents,   and  any  other  instrument,   agreement  or  document  previously,
simultaneously or hereafter  executed and delivered by the Borrowers,  or either
of them  and/or any other  Person,  singly or  jointly  with  another  Person or
Persons, evidencing, securing, guarantying or in connection with this Agreement,
any  Note,  any  Deed  of  Trust,  any of  the  Security  Documents,  any of the
Facilities, and/or any of the

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Obligations or the Agents' Obligations.

         "Fixed  Charge   Coverage  Ratio"  means  as  to  the  Borrowers  on  a
consolidated  basis for any  period of  determination  thereof  the ratio of (a)
EBITDA to (b) the sum of:

                           (i)      total   Interest   Expense,   whether  paid,
                  accrued or capitalized;

                           (ii)     scheduled   principal   payments  (excluding
                  balloon payments due at maturity); and

                           (iii)    dividends on preferred stock;

all for the most recent quarter.

         "Fixed or  Capital  Assets"  of a Person at any date  means all  assets
which would, in accordance with GAAP consistently  applied, be classified on the
balance sheet of such Person as property, plant or equipment at such date.

         "FFO"  or  "funds  from  operations"  means  as to the  Borrowers  on a
consolidated  basis for any  period  of  determination  thereof,  the sum of net
income (computed in accordance with GAAP),  excluding the cumulative  effects of
changes in accounting  principles,  extraordinary or unusual items, and gains or
losses from debt  restructuring  and sales of property,  plus  depreciation  and
amortization,  and after adjustments for  unconsolidated  partnerships and joint
ventures (which adjustments shall be calculated to reflect funds from operations
as aforesaid).

         "GAAP" means  generally  accepted  accounting  principles in the United
States of America in effect from time to time.

         "Governmental  Authority" means any nation or government,  any state or
other  political  subdivision  thereof  and  any  entity  exercising  executive,
legislative,  judicial,  regulatory or administrative functions of or pertaining
to government and any department, agency or instrumentality thereof.

         "Hazardous Materials" means (a) any "hazardous waste" as defined by the
Resource  Conservation  and Recovery Act of 1976,  as amended from time to time,
and regulations promulgated thereunder; (b) any "hazardous substance" as defined
by the Comprehensive  Environmental Response,  Compensation and Liability Act of
1980, as amended from time to time, and regulations promulgated thereunder;  (c)
any  substance  the presence of which on any  property  now or hereafter  owned,
acquired or operated by either of the  Borrowers,  or any Affiliate of either of
the  Borrowers,  is  prohibited  by any Law  similar  to those set forth in this
definition;  and (d) any other substance which by Law requires  special handling
in its collection, storage, treatment or disposal.

         "Hazardous Materials  Contamination"  means the contamination  (whether
presently  existing or occurring  after the date of this Agreement) by Hazardous
Materials  of any  property  owned,  operated  or  controlled  by  either of the
Borrowers, or any Affiliate of either of the Borrowers, or

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for which either of the Borrowers,  or any Affiliate of either of the Borrowers,
has responsibility,  including,  without limitation,  improvements,  facilities,
soil,  ground  water,  air or other  elements  on, or of,  any  property  now or
hereafter  owned,  acquired  or  operated  by  either of the  Borrowers,  or any
Affiliate of either of the Borrowers,  and any other  contamination by Hazardous
Materials for which either of the  Borrowers,  or any Affiliate of either of the
Borrowers, is, or is claimed to be, responsible.

         "Indebtedness"  of a Person means at any date the total  liabilities of
such  Person at such  time  determined  in  accordance  with  GAAP  consistently
applied.

         "Indebtedness for Borrowed Money" of a Person means at any time the sum
at such time of (a)  Indebtedness  of such Person for borrowed  money or for the
deferred  purchase  price of property or services,  (b) any  obligations of such
Person in respect of letters of credit, banker's or other acceptances or similar
obligations  issued  or  created  for the  account  of such  Person,  (c)  Lease
Obligations of such Person with respect to Capital  Leases,  (d) all liabilities
secured by any Lien on any property owned by such Person, to the extent attached
to such  Person's  interest  in such  property,  even though such Person has not
assumed or become personally liable for the payment thereof,  (e) obligations of
third parties which are being  guarantied or indemnified  against by such Person
or which are secured by the property of such Person;  (f) any obligation of such
Person under an employee stock ownership plan or other similar  employee benefit
plan;  (g) any  obligation of such Person or a Commonly  Controlled  Entity to a
Multi-employer  Plan;  and (h) any  obligations,  liabilities  or  indebtedness,
contingent  or  otherwise,  under or in  connection  with,  any interest rate or
currency swap  agreements,  cap, floor,  and collar  agreements,  currency spot,
foreign  exchange  and  forward  contracts  and  other  similar  agreements  and
arrangements;  but excluding  trade and other  accounts  payable in the ordinary
course of business in accordance  with  customary  trade terms and which are not
overdue (as determined in accordance  with customary  trade  practices) or which
are being disputed in good faith by such Person and for which adequate  reserves
are being provided on the books of such Person in accordance with GAAP.

         "Interest  Coverage  Ratio" means as to the Borrowers on a consolidated
basis for any period of  determination  thereof,  the ratio of (a) EBITDA to (b)
total Interest Expense, whether paid, accrued or capitalized.

         "Interest Expense" means, for any period and without duplication, total
interest  expense  of  the  Borrowers,  whether  paid,  accrued  or  capitalized
(including  the interest  component  of Capital  Leases but  excluding  interest
expense covered by an interest  reserve  established  under a construction  loan
facility)  plus the Borrowers'  shares (based on ownership) of accrued,  paid or
capitalized  interest with respect to any Indebtedness of an affiliate of either
of the Borrowers.

         "Interest  Payment  Date"  means the first day of each  calendar  month
commencing on May 1, 1999 and continuing  thereafter  until the Obligations have
been irrevocably paid in full.

         "Interest   Period"  means  as  to  any  Eurodollar  Loan,  the  period
commencing  on and including  the date such  Eurodollar  Loan is made (or on the
effective  date of the  Borrowers'  election  to convert any Base Rate Loan to a
Eurodollar Loan in accordance with the provisions

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of this Agreement) and ending on and including the day which is 30, 60, 90, 120,
150, 180 or 270 days thereafter, as selected by the Borrowers in accordance with
the provisions of this Agreement, and thereafter,  each period commencing on the
last day of the then  preceding  Interest  Period for such  Eurodollar  Loan and
ending on and  including  the day which is 30, 60, 90, 120, 150, 180 or 270 days
thereafter,  as selected by the Borrowers in accordance  with the  provisions of
this Agreement; provided, however that:

                  (a) the first day of any Interest Period shall be a Eurodollar
         Business Day;

                  (b) if any  Interest  Period would end on a day that shall not
         be a Eurodollar Business Day, such Interest Period shall be extended to
         the next succeeding Eurodollar Business Day unless such next succeeding
         Eurodollar Business Day would fall in the next calendar month, in which
         case, such Interest  Period shall end on the next preceding  Eurodollar
         Business Day; and

                  (c) no  Interest  Period  shall  extend  beyond the  Revolving
         Credit Expiration Date.

         "Interest  Rate Election  Notice" has the meaning  described in Section
2.4.2(e) (Selection of Interest Rates).

         "Interest  Rate  Protection  Agreement"  means  any  interest  rate  or
currency swap agreements,  hedging, cap, floor, and collar agreements,  currency
spot and forward  contracts and other similar  agreements and arrangements  with
the Administrative Agent or any Affiliate of the Administrative Agent.

         "Internal  Revenue  Code" means the Internal  Revenue Code of 1986,  as
amended from time to time, and the Income Tax Regulations issued and proposed to
be issued thereunder.

         "Laws" means all  ordinances,  statutes,  rules,  regulations,  orders,
injunctions, writs, or decrees of any Governmental Authority.

         "Letter of Credit"  and  "Letters  of Credit"  shall have the  meanings
described in Section 2.2.1 (Letters of Credit).

         "Letter of Credit  Agreement"  means the  collective  reference to each
letter of credit  application  and  agreement  substantially  in the form of the
Administrative Agent's then standard form of application for letter of credit or
such other form as may be approved by the  Administrative  Agent,  executed  and
delivered by either of the Borrowers in connection with the issuance of a Letter
of Credit, as the same may from time to time be amended, restated,  supplemented
or modified;  and "Letter of Credit  Agreements"  means all of the  foregoing in
effect at any time and from time to time.

         "Letter of Credit Cash Collateral Account" has the meaning described in
Section 2.2.3 (Terms of Letters of Credit).

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         "Letter  of  Credit  Documents"  means  any and  all  drafts  under  or
purporting to be under a Letter of Credit,  any Letter of Credit Agreement,  and
any other instrument,  document or agreement executed and/or delivered by either
of the Borrowers or any other Person under,  pursuant to or in connection with a
Letter of Credit or any Letter of Credit Agreement.

         "Letter of Credit Facility" means the facility  established pursuant to
Section 2.2 (Letter of Credit Facility).

         "Letter of Credit  Fee" and "Letter of Credit  Fees" have the  meanings
described in Section 2.2.2 (Letter of Credit Fees).

         "Letter of Credit  Obligations"  means the collective  reference to all
Obligations of either of the Borrowers with respect to the Letters of Credit and
the Letter of Credit Agreements.

         "Liabilities"  means at any date all  liabilities  that,  in accordance
with  GAAP  consistently  applied,  should be  classified  as  liabilities  on a
consolidated balance sheet of the Borrowers and their respective Subsidiaries.

         "Lien" means any mortgage,  deed of trust,  deed to secure debt, grant,
pledge,   security   interest,   assignment,    encumbrance,   judgment,   lien,
hypothecation,  provision in any  instrument or other document for confession of
judgment,  cognovit  or other  similar  right or remedy,  claim or charge of any
kind,  whether  perfected or unperfected,  avoidable or unavoidable,  including,
without limitation, any conditional sale or other title retention agreement, any
lease  in the  nature  thereof,  and the  filing  of or  agreement  to give  any
financing  statement  under the  Uniform  Commercial  Code of any  jurisdiction,
excluding the precautionary filing of any financing statement by any lessor in a
true lease transaction under the Uniform  Commercial Code of any jurisdiction or
the  agreement  to give any  financing  statement  by any lessee in a true lease
transaction.

         "Loan Notice" has the meaning described in Section 2.1.2 (Procedure for
Making Advances).

         "Multi-employer  Plan"  means a Plan that is a  Multi-employer  plan as
defined in Section 4001(a)(3) of ERISA.

         "Net Outstandings" of any Lender means, at any time, the sum of (a) all
amounts   paid  by  such   Lender   (other   than   pursuant   to  Section   8.5
(Indemnification))  to the Administrative Agent in respect to the Revolving Loan
or  otherwise  under  this  Agreement,   minus  (b)  all  amounts  paid  by  the
Administrative  Agent to such Lender  which are  received by the  Administrative
Agent and which,  pursuant to this  Agreement,  are paid over to such Lender for
application in reduction of the outstanding  principal  balance of the Revolving
Loan.

         "NOI" means as to the Borrowers on a consolidated  basis for any period
of  determination  thereof the sum of (a) rents and other income received in the
ordinary course of business from the Unencumbered Properties (including proceeds
of rent loss  insurance but excluding  pre-paid  rents and revenues and security
deposits except to the extent applied in satisfaction of tenants'

                                       10



<PAGE>






obligations for rent and further adjusted to omit the straight-line treatment of
rent) minus (b) all expenses (other than Interest Expense and minority  interest
expense) paid or accrued  related to the ownership,  operation or maintenance of
the Unencumbered  Properties,  including, but not limited to, taxes, assessments
and other similar charges,  insurance,  utilities,  payroll costs,  maintenance,
repair and landscaping expenses,  marketing expenses, general and administrative
expenses and property management fees (equal to the greater of actual management
fees or three and one-half of one percent (3.5%) of revenues),  but specifically
excluding general overhead expenses of the Borrowers.

         "Non-Ratable  Loan" means an advance under the  Revolving  Loan made by
FMB in accordance with the provisions of Section 2.5.2 (Settlement Procedures as
to Revolving Loan).

         "Note" means any Revolving Credit Note, as the case may be, and "Notes"
means  collectively  each Revolving  Credit Note, and any other  promissory note
which may from time to time evidence all or any portion of the Obligations.

         "Obligations"  means  all  present  and  future  indebtedness,  duties,
obligations, and liabilities,  whether now existing or contemplated or hereafter
arising, of either of the Borrowers to the Lenders and/or  Administrative  Agent
and/or the  Documentation  Agent under,  arising pursuant to, in connection with
and/or on account of the provisions of this Agreement,  each Note, each Security
Document,  Interest Rate Protection  Agreement and/or any of the other Financing
Documents,  the Revolving Loan, and/or any of the Facilities including,  without
limitation,  the  principal of, and interest on, each Note,  late  charges,  the
Fees,  Enforcement Costs, and prepayment  premiums or breakage charges (if any),
letter of credit fees or fees charged with respect to any guaranty of any letter
of credit.

         "Occupancy  Rate"  means for any  period of  determination  the  ratio,
expressed as a percentage,  of (a) the aggregate square footage of a real estate
Asset actually occupied by tenants paying rent pursuant to binding leases to (b)
the aggregate rentable square footage of such real estate Asset.

         "Outstanding Letter of Credit Obligations" has the meaning described in
Section 2.2.3 (Terms of Letters of Credit).

         "PBGC" means the Pension Benefit Guaranty Corporation.

         "Permitted  Liens" means:  (a) Liens for Taxes which are not delinquent
or which the Administrative Agent has determined in the exercise of its sole and
absolute  discretion  (i) are being  diligently  contested  in good faith and by
appropriate proceedings,  and such contest operates to suspend collection of the
contested Taxes and enforcement of a Lien, (ii) the respective  Borrower has the
financial ability to pay, with all penalties and interest,  at all times without
materially and adversely  affecting  such Borrower,  and (iii) are not, and will
not be with appropriate filing, the giving of notice and/or the passage of time,
entitled  to  priority  over any Lien of the  Administrative  Agent  and/or  the
Lenders;   (b)  deposits  or  pledges  to  secure   obligations  under  workers'
compensation,  social security or similar laws, or under unemployment  insurance
in the ordinary course of business; (c) Liens existing as of the date hereof and
reflected on the

                                       11



<PAGE>






Borrowers'  financial  statements provided pursuant to Section 3.1.10 (Financial
Condition)  (d) judgment Liens to the extent the entry of such judgment does not
constitute a Default or an Event of Default under the terms of this Agreement or
result  in the  sale  or  levy  of,  or  execution  on  any of the  Unencumbered
Properties;  and (e) Liens  created  subsequent  to the date hereof which do not
constitute or result in a Default or an Event of Default under the terms of this
Agreement.

         "Permitted Uses" means as of the date hereof, the payment of all of the
Borrowers'  obligations to the  Administrative  Agent, and after the date hereof
(a) the payment of  operating  and general  corporate  expenses,  (b) to provide
financing for acquisition,  development,  expansion and renovation costs of real
estate  properties of either of the Borrowers and (c) to support the issuance of
standby letters of credit for the Borrowers' ordinary business purposes.

         "Person"   means  and  includes  an  individual,   a   corporation,   a
partnership,  a joint venture,  a limited  liability  company or partnership,  a
trust, an unincorporated  association,  a Governmental  Authority,  or any other
organization or entity.

         "Plan"  means any pension plan that is covered by Title IV of ERISA and
in respect  of which  either  Borrower  or a  Commonly  Controlled  Entity is an
"employer" as defined in Section 3 of ERISA.

         "Post-Default  Rate"  means the Base Rate in effect  from time to time,
plus two percent (2%) per annum.

         "Post-Termination  Date  Letter of Credit" and  "Post-Termination  Date
Letters of Credit"  have the  meanings  described  in  Section  2.2.3  (Terms of
Letters of Credit).

         "Prepayment"   means  a  Revolving   Loan  Optional   Prepayment,   and
"Prepayments" mean collectively all Revolving Loan Optional Prepayments.

         "Pricing Ratio" means the Corporate Leverage Ratio.

         "Prime  Rate"  means the  floating  and  fluctuating  per  annum  prime
commercial lending rate of interest of the Administrative  Agent, as established
and declared by the  Administrative  Agent at any time or from time to time. The
Prime Rate shall be adjusted automatically,  without notice, as of the effective
date of any change in such prime  commercial  lending rate.  The Prime Rate does
not  necessarily   represent  the  lowest  rate  of  interest   charged  by  the
Administrative Agent or any of the Lenders to borrowers.

         "Pro Rata Share" means at any time and as to any Lender, the percentage
derived by dividing the unpaid principal amount of the Revolving Loan and Letter
of Credit  Obligations  owing to that Lender by the aggregate  unpaid  principal
amount of all Revolving Loans and Letter of Credit Obligations then outstanding;
or if no Revolving  Loans or Letter of Credit  Obligations are  outstanding,  by
dividing the total amount of such  Lender's  Commitments  by the total amount of
the Commitments of the Administrative Agent and all of the Lenders.

         "REIT" means a real estate  investment trust under the Internal Revenue
Code.

                                       12



<PAGE>






         "Reportable Event" means any of the events set forth in Section 4043(c)
of ERISA or the regulations thereunder.

         "Reserve  Percentage" means, at any time, the then current maximum rate
for which reserves  (including any basic,  supplemental,  marginal and emergency
reserves) are required to be  maintained by member banks of the Federal  Reserve
System  under  Regulation  D of the Board of  Governors  of the Federal  Reserve
System against "Eurocurrency liabilities", as that term is defined in Regulation
D.  The  Eurodollar  Rate  shall  be  adjusted  automatically  on  and as of the
effective date of any change in the Reserve Percentage.

         "Responsible  Officer"  means for each  Borrower,  its chief  executive
officer,  president or executive  vice  president  or, with respect to financial
matters, its chief financial officer.

         "Requisite  Lenders" means at any time of determination  one or more of
the Lenders holding at least sixty percent (60%) of the Commitments.

         "Revolving Credit  Commitment" means the agreement of a Lender relating
to the making  the  Revolving  Loan and  advances  thereunder  subject to and in
accordance  with  the  provisions  of  this  Agreement;  and  "Revolving  Credit
Commitments"  means the collective  reference to the Revolving Credit Commitment
of each of the Lenders.

         "Revolving Credit Commitment  Period" means the period of time from the
Closing Date to the Business Day  preceding  the  Revolving  Credit  Termination
Date.

         "Revolving  Credit  Committed  Amount"  has the  meaning  described  in
Section 2.1.1 (Revolving Credit Facility).

         "Revolving  Credit  Expiration  Date"  means  April 22 2002;  provided,
however,  from  January 1, 2001  through  January 31, 2001,  the  Borrowers  may
request in writing to extend the Revolving  Credit  Expiration Date for a period
of one (1) year, provided no Event of Default exists. Any decision to extend the
Revolving  Credit  Expiration  Date shall be made  within  sixty (60) days after
receipt of the Borrower's written request in the sole and absolute discretion of
the Administrative Agent and the Lenders,  respectively,  and shall be evidenced
in writing executed by each of them.

         "Revolving  Credit  Facility"  means the  facility  established  by the
Lenders pursuant to Section 2.1 (Revolving Credit Facility).

         "Revolving  Credit Note" and "Revolving Credit Notes" have the meanings
described in Section 2.1.3 (Revolving Credit Notes).

         "Revolving  Credit Pro Rata Share" has the meaning described in Section
2.1.1 (Revolving Credit Facility).

         "Revolving  Credit  Termination  Date"  means  the  earlier  of (a) the
Revolving Credit  Expiration Date, or (b) the date on which the Revolving Credit
Commitments are terminated

                                       13



<PAGE>






pursuant to Section 7.2 (Remedies) or otherwise.

         "Revolving  Credit Unused Line Fee" and  "Revolving  Credit Unused Line
Fees" have the meanings described in Section 2.1.6 (Revolving Credit Unused Line
Fee).

         "Revolving Loan" has the meaning  described in Section 2.1.1 (Revolving
Credit Facility).

         "Revolving  Loan  Account" has the meaning  described in Section  2.1.5
(Revolving Loan Account).

         "Revolving  Loan  Optional  Prepayment"  and  "Revolving  Loan Optional
Prepayments" have the meanings  described in Section 2.1.4 (Optional  Prepayment
of Revolving Loan).

         "Secured  Indebtedness" is defined as all indebtedness secured by deeds
of trust, mortgages, indemnity deeds of trust or any other lien instruments.

         "Security   Documents"  means   collectively  any  assignment,   pledge
agreement,  security  agreement,  mortgage,  deed of trust, deed to secure debt,
financing statement and any similar  instrument,  document or agreement under or
pursuant to which a Lien is now or hereafter  granted to, or for the benefit of,
the Administrative  Agent and/or the Lenders on any real or personal property of
any  Person to secure  all or any  portion of the  Obligations  and the  Agents'
Obligations,  all as the  same  may  from  time to time  be  amended,  restated,
supplemented or otherwise modified.

         "Settlement  Date"  means  each  Business  Day after the  Closing  Date
selected by the  Administrative  Agent in its sole discretion  subject to and in
accordance with the provisions of Section (Settlement Procedures as to Revolving
Loan) as of which a Settlement Report is delivered by the  Administrative  Agent
and on which  settlement is to be made among the Lenders in accordance  with the
provisions of Section 2.3.5 (Payments).

         "Settlement  Report" means each report  prepared by the  Administrative
Agent and delivered to each Lender and setting forth,  among other things, as of
the Settlement  Date indicated  thereon and as of the next preceding  Settlement
Date, the aggregate  outstanding  principal  balance of the Revolving Loan, each
Lender's Revolving Credit Pro Rata Share thereof, each Lender's Net Outstandings
and all Non-Ratable Loans made, and all payments of principal, interest and Fees
received  by the  Administrative  Agent  from the  Borrowers  during  the period
beginning on such next preceding  Settlement  Date and ending on such Settlement
Date.

         "State" means the State of Maryland.

         "Subordinated  Debt"  means  the  convertible  subordinated  debentures
issued by Mid-  Atlantic in the  principal  amount of  $60,000,000  scheduled to
mature September __, 2003.

         "Subordinated Indebtedness" means all Indebtedness,  including, without
limitation,  the  Subordinated  Debt,  incurred  at any  time by  either  of the
Borrowers, which is subordinated to the Obligations.

                                       14



<PAGE>






         "Subsidiary"  means any  corporation or limited  liability  company the
majority of the voting shares of which at the time are owned  directly by either
Borrower  and/or  by  one  or  more  Subsidiaries  of  either  Borrower  or  any
partnership,  joint  venture  or  limited  partnership  the  majority  ownership
interests of which at the time are owned directly by either  Borrower  and/or by
one or more Subsidiaries of either Borrower.

         "Tangible Net Worth" means as to the Borrowers on a consolidated  basis
at any date of determination thereof, Total Asset Value minus Total Liabilities.

         "Taxes"  means all taxes and  assessments  whether  general or special,
ordinary  or  extraordinary,  or  foreseen  or  unforeseen,  of every  character
(including  all  penalties  or  interest  thereon),  which  at any  time  may be
assessed,  levied,  confirmed or imposed by any Governmental Authority on either
of the Borrowers or any of its or their properties or assets or any part thereof
or in respect of any of its or their franchises, businesses, income or profits.

         "Total Asset Value" means as to the Borrowers on a  consolidated  basis
for any period of determination thereof, the sum of:

                  (a) for all properties  owned during the entire fiscal quarter
         most recently ended,  EBITDA for the most recent quarter annualized and
         divided by a capitalization  rate of ten percent (10%) and with respect
         to any properties  acquired during the most recent fiscal quarter,  the
         undepreciated  purchase price paid for such properties less any amounts
         paid to either of the Borrowers or any  Subsidiary as a purchase  price
         adjustment, held in escrow, retained as a contingency reserve, or other
         similar  arrangement  (including without  duplication the Borrower's or
         Subsidiary's  proportionate share of undepreciated  purchase price paid
         for  such  property  of  unconsolidated  Affiliates  of  either  of the
         Borrowers or such Subsidiary;

                  (b) new development projects at GAAP value, limited to fifteen
         percent (15%) of Total Asset Value;

                  (c) raw land at GAAP value,  limited to five  percent  (5%) of
         Total Asset Value; and

                  (d) Cash and Cash Equivalents.

         "Total  Indebtedness" means as to the Borrowers on a consolidated basis
for any period of  determination  thereof,  all  borrowings,  including lines of
credit,  mortgages payable,  construction loans, debt in unconsolidated entities
and Contingent Liabilities, excluding the Subordinated Debt.

         "Total  Liabilities"  means as to the Borrowers on a consolidated basis
for any period of determination  thereof,  all items shown as liabilities on the
Borrowers'  consolidated  balance  sheet,  excluding the  Subordinated  Debt and
minority interests.

         "Total Revolving Credit Committed  Amount" has the meaning described in
Section 2.1.1

                                       15



<PAGE>






(Revolving Credit Facility).

         "Unencumbered  Asset Value" means as to the Borrowers on a consolidated
basis for any period of determination thereof, the Adjusted Unencumbered NOI for
all Unencumbered  Properties for the most recent quarter  annualized and divided
by a ten percent (10%) capitalization  rate.  Properties that do not satisfy the
conditions set forth in the definition of  Unencumbered  Properties  will not be
given any worth in the determination of Unencumbered Asset Value.

         "Unencumbered  Capital Expenditure Reserve" means a reserve for capital
expenditures  relating to the Unencumbered  Properties calculated at the rate of
$.25 per square foot.

         "Unencumbered  Interest  Coverage"  means  as  to  the  Borrowers  on a
consolidated  basis for any period of  determination  thereof,  the ratio of (a)
Adjusted  Unencumbered  NOI for the most  recent  quarter to (b) total  Interest
Expense on all unsecured  borrowings,  excluding the Subordinated  Debt, whether
paid, accrued or capitalized, for the most recent quarter.

         "Unencumbered   Leverage   Ratio"  means  as  to  the  Borrowers  on  a
consolidated  basis for any period of  determination  thereof,  the ratio of (a)
total Unsecured Indebtedness to (b) total Unencumbered Asset Value.

         "Unencumbered  Properties" means properties,  excluding raw land, owned
by one or both of the  Borrowers  or a  Subsidiary  of either of the  Borrowers,
that, collectively,  have an Occupancy Rate in the aggregate equal to or greater
than eighty-five  percent (85%) with all tenants  comprising such Occupancy Rate
paying base rent in accordance with the terms of their respective  leases (i.e.,
no arrearages in excess of sixty (60) days) and actually occupying and operating
at the premises  (i.e.,  none of the tenants  comprising the Occupancy Rate have
"gone dark") and each of which satisfies the following criteria:

                  (a)  it is improved;

                  (b)  it is  either  (i)  owned  in  fee  simple  by one of the
         Borrowers or a Subsidiary  or (ii) leased to one of the  Borrowers or a
         Subsidiary pursuant to a ground lease with (A) an aggregate term of not
         less than thirty (30) years  inclusive of all ground lessee  options to
         extend  acceptable to the Agents and the Lenders and (B) with notice of
         default to the Administrative Agent with opportunity to cure acceptable
         to the Agents and the Lenders,  including,  the Administrative  Agent's
         right to assume the ground lessee's obligations under the lease without
         the ground lessor's approval;

                  (c) it is not subject to any Lien other than  Permitted  Liens
         described in subsections (a) through (d), inclusive,  of the definition
         of Permitted Liens;

                  (d)  it  has  been  accepted  by  the  Requisite  Lenders  for
         inclusion as an Unencumbered Property; and

                                       16



<PAGE>






                  (e) it has an  Occupancy  Rate of  seventy  percent  (70%)  or
         greater,  with all tenants  comprising  such Occupancy Rate paying base
         rent in accordance with the terms of their respective  leases (i.e., no
         arrearages  in excess of sixty (60) days) and  actually  occupying  and
         operating at the premises  (i.e.,  none of the tenants  comprising  the
         Occupancy Rate have "gone dark").

         "Unsecured  Indebtedness" includes all unsecured borrowings,  excluding
the Subordinated Debt.

         "Wholly Owned Subsidiary" means any domestic United States  corporation
or limited  liability  company  all the shares of stock of all  classes of which
(other  than  directors'  qualifying  shares) at the time are owned  directly or
indirectly by a Borrower  and/or by one or more Wholly Owned  Subsidiaries  of a
Borrower  or any  partnership,  joint  venture  or limited  partnership  all the
ownership  interests of which at the time are owned directly by either  Borrower
and/or by one or more Subsidiaries of either Borrower.

         "Year 2000  Problem"  means the  inability  of  computers  and computer
software,  as well as embedded  microchips in non-computing  devices, to perform
properly,  including the performance of date-sensitive functions with respect to
certain  dates prior to and after  December 31, 1999,  together with any and all
consequences related thereto.

     Section 1.2  Accounting  Terms and  Other  Definitional  Provisions.  
                  --------------------------------------------------------

         Unless otherwise  defined herein,  as used in this Agreement and in any
certificate,  report  or  other  document  made or  delivered  pursuant  hereto,
accounting terms not otherwise defined herein,  and accounting terms only partly
defined herein,  to the extent not defined,  shall have the respective  meanings
given to them under GAAP, as consistently  applied to the applicable Person. All
terms used herein  which are defined by the Uniform  Commercial  Code shall have
the same meanings as assigned to them by the Uniform  Commercial Code unless and
to the  extent  varied by this  Agreement.  The  words  "hereof",  "herein"  and
"hereunder"  and words of similar import when used in this Agreement shall refer
to  this  Agreement  as a  whole  and not to any  particular  provision  of this
Agreement, and article, section, subsection, schedule and exhibit references are
references to articles, sections or subsections of, or schedules or exhibits to,
as the case may be, this Agreement unless otherwise  specified.  As used herein,
the singular  number shall  include the plural,  the plural the singular and the
use of the  masculine,  feminine or neuter gender shall include all genders,  as
the context may require. Reference to any one or more of the Financing Documents
shall mean the same as the foregoing may from time to time be amended, restated,
substituted, extended, renewed, supplemented or otherwise modified. Reference in
this  Agreement  and  the  other  Financing  Documents  to the  "Borrower",  the
"Borrowers",  "each  Borrower"  or  otherwise  with  respect  to  either  of the
Borrowers shall mean each and every Borrower and both of the Borrowers,  jointly
and severally, unless a specific Borrower is expressly identified.

                                       17



<PAGE>






                                   ARTICLE II
                              THE CREDIT FACILITIES

     Section 2.1 The Revolving Credit Facility.

               2.1.1   Revolving Credit Facility.

                       Subject to and upon the provisions of this Agreement, the
Lenders  collectively,  but severally,  establish a revolving credit facility in
favor of the Borrowers. The aggregate of all advances under the Revolving Credit
Facility  is  sometimes  referred  to  in  this  Agreement  collectively  as the
"Revolving Loan".

                        The amount set forth below  opposite  each Lender's name
is herein called such Lender's "Revolving Credit Committed Amount" and the total
of each Lender's  Revolving  Credit Committed Amount is herein called the "Total
Revolving  Credit Committed  Amount".  The  proportionate  share set forth below
opposite each Lender's name is herein called such Lender's "Revolving Credit Pro
Rata Share":

Lender                            Revolving Credit            Revolving Credit
------                              Committed                   Pro Rata Share
                                      Amount                    --------------
                                      ------
FMB                                $30,000,000                       40%

First Union                        $25,000,000                     33.34%
Provident                          $10,000,000                     13.33%
Chevy Chase                        $10,000,000                     13.33%
Total Revolving Credit             $75,000,000                      100%
Committed Amount


                        Neither the Administrative  Agent nor any of the Lenders
shall be responsible  for the Revolving  Credit  Commitment of any other Lender,
nor will the  failure  of any  Lender  to  perform  its  obligations  under  its
Revolving Credit  Commitment in any way relieve any other Lender from performing
its obligations under its Revolving Credit Commitment.

                        During the Revolving Credit  Commitment  Period,  any or
all of the Borrowers may request advances under the Revolving Credit Facility in
accordance  with the  provisions of this  Agreement;  provided that after giving
effect to either Borrower's request:

                        (a) the outstanding  principal  balance of each Lender's
Pro Rata Share of the  Revolving  Loan and of the  Letter of Credit  Obligations
would not exceed such Lender's Revolving Credit Pro Rata Share; and,

                        (b) the aggregate outstanding principal balance of the

                                       18



<PAGE>






Revolving Loan and all Letter of Credit  Obligations  would not exceed the Total
Revolving Credit Committed Amount.

               2.1.2  Procedure for Making  Advances  Under the Revolving  Loan;
Lender Protection Loans.

               The Borrowers may borrow under the Revolving  Credit  Facility on
any Business Day; provided,  however, advances shall be in amounts not less than
One Million Dollars  ($1,000,000) and may only be made in integral  multiples of
Five Hundred Thousand Dollars ($500,000).  The maximum number of advances of the
Revolving  Loan  outstanding  at any point in time  shall be ten (10).  Advances
under the  Revolving  Loan shall be  deposited  to a demand  deposit  account of
Mid-Atlantic  with the  Administrative  Agent or shall be  otherwise  applied as
directed by the Borrowers,  which direction the Administrative Agent may require
to be in writing. Not later than 10:00 a.m. (Baltimore City Time) on the date of
the requested borrowing,  the Borrowers shall give the Administrative Agent oral
or written  notice (a "Loan  Notice")  of the amount  and (if  requested  by the
Administrative  Agent) the  purpose of the  requested  borrowing.  Any oral Loan
Notice shall be confirmed in writing by the Borrowers  within three (3) Business
Days after the making of the requested  advance under the Revolving  Loan.  Each
Loan Notice shall be  irrevocable.  Upon  receipt of any such Loan  Notice,  the
Administrative  Agent  shall  promptly  notify each Lender of the amount of each
advance to be made by such  Lender on the  requested  borrowing  date under such
Lender's Revolving Credit Commitment.

               Not later than 1:00 p.m.  (Baltimore City Time) on each requested
borrowing date for the making of advances under the Revolving  Loan, each Lender
shall,  if it has received  timely notice from the  Administrative  Agent of the
Borrowers'  request for such  advances,  make  available  to the  Administrative
Agent,  in  funds  immediately  available  to the  Administrative  Agent  at the
Administrative Agent's office set forth in Section 9.1 (Notices),  such Lender's
Pro Rata Share of the advances to be made on such date.

               In addition, subsequent to a Default each of the Borrowers hereby
irrevocably  authorizes  the Lenders at any time and from time to time,  without
further  request from or notice to the  Borrowers,  to make  advances  under the
Revolving  Loan  which  the  Administrative  Agent,  in its  sole  and  absolute
discretion,  deems  necessary or appropriate to cure the Default,  if curable by
the payment of money and  protect  the  interests  of the  Administrative  Agent
and/or  any or all of the  Lenders  under  this  Agreement,  including,  without
limitation,   principal  of,  and/or   interest  on,  the  Revolving  Loan,  the
Obligations  (including any Letter of Credit  Obligations),  and/or  Enforcement
Costs,  prior to,  on, or after the  termination  of other  advances  under this
Agreement,  regardless  of  whether  the  outstanding  principal  amount  of the
Revolving  Loan  which the  Lenders  may  advance  hereunder  exceeds  the Total
Revolving Credit Committed Amount.

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<PAGE>






               2.1.3 Revolving Credit Notes.

               The  obligation  of the  Borrowers to pay each  Lender's Pro Rata
Share of the Revolving  Loan,  with interest,  shall be evidenced by a series of
promissory notes (as from time to time extended, amended, restated, supplemented
or  otherwise   modified,   collectively   the  "Revolving   Credit  Notes"  and
individually a "Revolving Credit Note") substantially in the form of EXHIBIT "A"
attached  hereto  and made a part  hereof,  with  appropriate  insertions.  Each
Lender's  Revolving  Credit Note shall be dated as of the Closing Date, shall be
payable  to the  order of such  Lender at the times  provided  in the  Revolving
Credit Note,  and shall be in the principal  amount of such  Lender's  Revolving
Credit Pro Rata Share. Each of the Borrowers acknowledges and agrees that if the
outstanding  principal  balance of the Revolving Loan  outstanding  from time to
time exceeds the aggregate face amount of the Revolving  Credit Notes the excess
shall bear interest at the Post-Default Rate and shall be payable,  with accrued
interest,  ON DEMAND. The Revolving Credit Notes shall not operate as a novation
of any of the Obligations or nullify, discharge, or release any such Obligations
or the continuing  contractual  relationship of the parties hereto in accordance
with the provisions of this Agreement.

               2.1.4 Optional Prepayments of Revolving Loan.

               The Borrowers  shall have the option at any time and from time to
time to prepay (each a "Revolving Loan Optional Prepayment" and collectively the
"Revolving Loan Optional  Prepayments")  the Revolving Loan, in whole or in part
without premium or penalty;  provided,  however, partial Revolving Loan Optional
Prepayments  shall be in amounts not less than One Million Dollars  ($1,000,000)
and may only be made in integral  multiples  of Five  Hundred  Thousand  Dollars
($500,000) and any prepayment shall be subject to payment of all applicable sums
as calculated  pursuant to Section 2.4.4  (Indemnity).  Revolving  Loan Optional
Prepayments  shall be made  following a timely and proper  written notice to the
Administrative  Agent with respect thereto specifying the date and amount of any
intended Revolving Loan Optional  Prepayment.  The amount to be prepaid shall be
paid by the Borrowers to the Administrative Agent on the date specified for such
prepayment. Revolving Loan Optional Prepayments shall be irrevocable.

                                       20



<PAGE>






               2.1.5 Revolving Loan Account.

               The  Administrative  Agent  will  establish  and  maintain a loan
account on its books (the "Revolving Loan Account") to which the  Administrative
Agent  will (a)  debit  (i) the  principal  amount  of each  advance  under  the
Revolving  Loan made by the  Lenders  hereunder  as of the date  made,  (ii) the
amount of any interest  accrued on the Revolving Loan as and when due, and (iii)
any other amounts due and payable by the Borrowers to the  Administrative  Agent
and/or the Lenders from time to time under the  provisions of this  Agreement in
connection with the Revolving Loan, including,  without limitation,  Enforcement
Costs, Fees, late charges,  and service,  collection and audit fees, as and when
due and  payable,  and (b)  credit all  payments  made by the  Borrowers  to the
Administrative  Agent on account of the Revolving  Loan as of the date made. All
credit  entries to the  Revolving  Loan  Account  are  conditional  and shall be
readjusted as of the date made if final and indefeasible payment is not received
by the Administrative  Agent in cash or solvent credits. Any and all periodic or
other  statements or  reconciliations,  and the  information  contained in those
statements or  reconciliations,  of the  Revolving  Loan Account shall be final,
binding and  conclusive  upon the  Borrowers  and the  Lenders in all  respects,
absent manifest error, unless the Administrative Agent receives specific written
objection thereto from the Borrowers within thirty (30) Business Days after such
statement or reconciliation shall have been sent by the Administrative Agent.

               2.1.6 Revolving Credit Unused Line Fee.

               The  Borrowers  shall  pay to the  Administrative  Agent  for the
ratable  benefit  of the  Lenders a  quarterly  revolving  credit  facility  fee
(collectively,  the  "Revolving  Credit  Unused Line Fees" and  individually,  a
"Revolving  Credit  Unused Line Fee") in an amount equal to the aggregate of (a)
one-quarter  of one  percent  (.25%) per annum on the average  daily  unused and
undisbursed  portion of the Total Revolving  Credit  Committed  Amount up to and
including Forty Million Dollars ($40,000,000) and (b) fifteen  one-hundredths of
one percent (.15%) per annum on the average daily unused and undisbursed portion
of the Total  Revolving  Credit  Committed  Amount  in  excess of Forty  Million
Dollars  ($40,000,000),  as in effect  from time to time  accruing  during  each
calendar quarter.  The accrued and unpaid portion of the Revolving Credit Unused
Line Fee shall be due and payable by the Borrowers to the  Administrative  Agent
on the first day of each  calendar  quarter,  commencing  on the first such date
following the date hereof,  and on the Revolving  Credit  Termination  Date. The
Outstanding  Letter  of Credit  Obligations  are  considered  usage of the Total
Revolving  Credit  Committed Amount for the purpose of determining the Revolving
Credit Unused Line Fee.

                                       21



<PAGE>






               2.1.7 Cancellation Fee.

               In  the  event  of the  termination  by,  or on  behalf  of,  the
Borrowers,  of the Revolving Credit Commitment prior to April 23, 2002, or April
23, 2003 if the one-year extension is requested and granted, the Borrowers shall
pay a fee (the "Cancellation Fee") equal to one-eighth of one percent (.125%) of
the Total Revolving Credit Committed Amount ($93,750).  Payment of the Revolving
Loan in whole or in part by or on behalf  of the  Borrowers,  by court  order or
otherwise,  following  and as a  result  of the  institution  of any  bankruptcy
proceeding  by or against the  Borrowers,  shall be deemed to be a prepayment of
the Revolving Loan subject to the  Cancellation Fee provided in this subsection.
The Cancellation Fee shall be paid to the  Administrative  Agent for the ratable
benefit of the Lenders.

     Section 2.2 The Letter of Credit Facility.
                  -----------------------------

               2.2.1 Letters of Credit.

               Subject to and upon the  provisions of this  Agreement,  and as a
part of the Revolving Credit Commitments,  each of the Borrowers, upon the prior
approval of the  Administrative  Agent, may obtain standby letters of credit (as
the same may from time to time be amended,  supplemented or otherwise  modified,
each a "Letter of Credit" and  collectively  the  "Letters of Credit")  from the
Administrative  Agent from time to time.  The Borrowers  will not be entitled to
obtain a Letter of Credit  unless  (a) the  Borrowers  are then able to obtain a
Revolving  Loan from the  Lenders in an amount not less than the  proposed  face
amount of the Letter of Credit  requested by the  Borrowers,  and (b) the sum of
the then Outstanding Letter of Credit  Obligations  (including the amount of the
requested Letter of Credit) does not exceed Five Million Dollars ($5,000,000).

               2.2.2 Letter of Credit Fees.

               Prior to or  simultaneously  with the  opening of each  Letter of
Credit,  the  Borrowers  shall pay to the  Administrative  Agent for the ratable
benefit of the  Lenders,  a letter of credit fee (each a "Letter of Credit  Fee"
and  collectively  the  "Letter of Credit  Fees") in an amount  equal to one and
one-quarter of one percent (1.25%) per annum of the face amount of the Letter of
Credit.  The Letter of Credit Fees shall be paid upon the opening of each Letter
of Credit for the initial  period of the Letter of Credit up to one (1) year and
subsequent to the first anniversary thereof,  quarterly in arrears. In addition,
the Borrowers shall pay to the  Administrative  Agent, for its own account,  any
and all additional issuance, negotiation,  processing, transfer or other fees to
the extent and as and when  required by the  provisions  of any Letter of Credit
Agreement. All such additional fees are included in and are a part of the "Fees"
payable by the Borrowers  under the provisions of this Agreement and are for the
sole and  exclusive  benefit of the  Administrative  Agent and are a part of the
Administrative Agent's Obligations.

                                       22



<PAGE>




               2.2.3 Terms of Letters of Credit;  Post-Termination  Date Letters
of Credit.

               Each Letter of Credit shall (a) be opened pursuant to a Letter of
Credit  Agreement  and (b)  expire on a date not  later  than the  Business  Day
preceding the Revolving Credit Expiration Date; provided, however, if any Letter
of Credit does have an expiration date later than the Business Day preceding the
Revolving  Credit  Termination  Date (each a "Post-  Termination  Date Letter of
Credit"  and  collectively,  the  "Post-Termination  Date  Letters of  Credit"),
effective as of the Business Day preceding the Revolving Credit Termination Date
and without prior notice to or the consent of the  Borrowers,  the Lenders shall
make advances  under the Revolving  Loan for the account of the Borrowers in the
aggregate face amount of all such Letters of Credit. The amount of each Lender's
advance shall be equal to its  Revolving  Credit Pro Rata Share of the aggregate
face  amount of all such  Letters  of Credit.  The  Administrative  Agent  shall
deposit the  proceeds of such  advances  into one or more  non-interest  bearing
accounts  with and in the name of the  Administrative  Agent and over  which the
Administrative  Agent alone shall have exclusive  power of access and withdrawal
(collectively,  the "Letter of Credit Cash Collateral  Account").  The Letter of
Credit Cash Collateral  Account is to be held by the  Administrative  Agent, for
the ratable  benefit of the Lenders,  as additional  collateral and security for
any Letter of Credit Obligations relating to the  Post-Termination  Date Letters
of  Credit.  The  Borrowers  hereby  assign,  pledge,  grant and set over to the
Administrative  Agent, for the ratable benefit of the Lenders,  a first priority
security  interest in, and Lien on, all of the funds on deposit in the Letter of
Credit Cash  Collateral  Account,  together with any and all proceeds  (cash and
non-cash)  and products  thereof as additional  collateral  and security for the
Letter of Credit Obligations  relating to the  Post-Termination  Date Letters of
Credit. The Borrowers  acknowledge and agree that the Administrative Agent shall
be  entitled  to fund any draw or draft on any  Post-Termination  Date Letter of
Credit  from the  monies on  deposit  in the  Letter of Credit  Cash  Collateral
Account without notice to or consent of the Borrowers or any of the Lenders. The
Borrowers further acknowledge and agree that the Administrative Agent's election
to fund any draw or draft on any Post-Termination Date Letter of Credit from the
Letter of Credit Cash Collateral shall in no way limit, impair,  lessen, reduce,
release or  otherwise  adversely  affect the  Borrowers'  obligation  to pay any
Letter of Credit  Obligations  under or  relating to the  Post-Termination  Date
Letters of Credit. At such time as all  Post-Termination  Date Letters of Credit
have   expired   and  all  Letter  of  Credit   Obligations   relating   to  the
Post-Termination   Date   Letters  of  Credit  have  been  paid  in  full,   the
Administrative  Agent  agrees to apply  the  amount  of any  remaining  funds on
deposit  in the Letter of Credit  Cash  Collateral  Account  to the then  unpaid
balance of the Obligations under the Revolving Credit Facility in such order and
manner as the  Administrative  Agent shall  determine  in its sole and  absolute
discretion in accordance with the provisions of this Agreement,  and thereafter,
any remaining balance shall be paid to the Borrowers.

               The  aggregate  face  amount of all  Letters of Credit at any one
time  outstanding  and  issued  by  the  Administrative  Agent  pursuant  to the
provisions  of  this  Agreement,  including,  without  limitation,  any  and all
Post-Termination Date Letters of Credit, plus the amount of any unpaid Letter of
Credit Fees  accrued or  scheduled  to accrue  thereon,  and less the  aggregate
amount of all drafts  issued under or  purporting to have been issued under such
Letters of Credit that have been paid by the Administrative  Agent and for which
the Administrative

                                       23



<PAGE>






Agent has been  reimbursed by the  Borrowers in full in accordance  with Section
2.2.5 (Payments of Letters of Credit) and the Letter of Credit  Agreements,  and
for which the  Administrative  Agent has no further  obligation or commitment to
restore all or any portion of the amounts drawn and reimbursed, is herein called
the "Outstanding Letter of Credit Obligations".

               2.2.4 Procedures for Letters of Credit.

               The Borrowers shall give the Administrative  Agent written notice
at least five (5) Business Days prior to the date on which the Borrower  desires
the  Administrative  Agent to issue a Letter of  Credit.  Such  notice  shall be
accompanied  by a duly executed  Letter of Credit  Agreement  specifying,  among
other things: (a) the name and address of the intended beneficiary of the Letter
of Credit,  (b) the requested  face amount of the Letter of Credit,  (c) whether
the Letter of Credit is to be revocable or irrevocable,  (d) the Business Day on
which the  Letter of Credit is to be opened  and the date on which the Letter of
Credit is to expire,  (e) the terms of payment of any draft or drafts  which may
be drawn under the Letter of Credit,  and (f) any other terms or provisions  the
Borrowers desire to be contained in the Letter of Credit. Such notice shall also
be accompanied by such other information, certificates, confirmations, and other
items as the  Administrative  Agent may  require  to assure  that the  Letter of
Credit is to be issued in accordance with the provisions of this Agreement and a
Letter of Credit Agreement.  In the event of any conflict between the provisions
of this  Agreement  and the  provisions  of a Letter  of Credit  Agreement,  the
provisions  of  this  Agreement  shall  prevail  and  control  unless  otherwise
expressly  provided in the Letter of Credit Agreement.  Upon (x) receipt of such
notice,  (y) payment of all Letter of Credit Fees and all other Fees  payable in
connection with the issuance of such Letter of Credit, and (z) receipt of a duly
executed Letter of Credit Agreement, the Administrative Agent shall process such
notice  and  Letter  of  Credit  Agreement  in  accordance  with  its  customary
procedures  and open such Letter of Credit on the Business Day specified in such
notice.

               2.2.5 Payments of Letters of Credit.

               The Borrowers hereby promise to pay to the Administrative  Agent,
ON  DEMAND  and in  United  States  Dollars,  the  following  which  are  herein
collectively referred to as the "Current Letter of Credit Obligations":

               (a) the amount which the Administrative Agent has paid or will be
required  to pay under each draft or draw on a Letter of  Credit,  whether  such
demand be in advance of the Administrative  Agent's payment or for reimbursement
for such payment;

               (b)  any  and all  reasonable  charges  and  expenses  which  the
Administrative  Agent may pay or incur  relative to the Letter of Credit  and/or
such draws or drafts; and

               (c) interest on the amounts  described in (a) and (b) not paid by
the  Borrowers as and when due and payable  under the  provisions of (a) and (b)
above from the day the same are due and payable until paid in full at a rate per
annum equal to the then current highest rate of interest on the Revolving Loan.

                                       24



<PAGE>






               In  addition,  the  Borrowers  hereby  promise to pay any and all
other  Letter of Credit  Obligations  as and when due and payable in  accordance
with the provisions of this Agreement and the Letter of Credit  Agreements.  The
obligation of the Borrowers to pay Current Letter of Credit  Obligations and all
other Letter of Credit Obligations shall be absolute and unconditional under any
and all circumstances and irrespective of any setoff, counterclaim or defense to
payment  which the  Borrowers  or any other  account  party may have or have had
against the beneficiary of such Letter of Credit, the Administrative  Agent, any
of the Lenders, or any other Person, including,  without limitation, any defense
based on the failure of any draft or draw to conform to the terms of such Letter
of Credit,  any draft or other  document  proving to be  forged,  fraudulent  or
invalid, or the legality, validity,  regularity or enforceability of such Letter
of Credit, any draft or other documents  presented with any draft, any Letter of
Credit Agreement,  this Agreement, or any of the other Financing Documents,  all
whether  or not the  Administrative  Agent or any of the  Lenders  had actual or
constructive knowledge of the same, and irrespective of any collateral, security
or guarantee  therefor or right of offset with respect thereto and  irrespective
of any other circumstances  whatsoever which constitutes,  or might be construed
to constitute,  an equitable or legal  discharge of the Borrowers for any Letter
of Credit Obligations,  in bankruptcy or otherwise;  provided, however, that the
Borrowers shall not be obligated to reimburse the  Administrative  Agent for any
wrongful  payment  under  such  Letter  of  Credit  made  as  a  result  of  the
Administrative Agent's willful misconduct or gross negligence. The obligation of
the Borrowers to pay the Letter of Credit  Obligations  shall not be conditioned
or contingent upon the pursuit by the  Administrative  Agent or any other Person
at any time of any right or remedy  against  any  Person  which may be or become
liable  in  respect  of all or any  part  of  such  obligation  or  against  any
collateral,  security or  guarantee  therefor  or right of offset  with  respect
thereto.

               The Letter of Credit  Obligations shall continue to be effective,
or be  reinstated,  as the case may be,  if at any  time  payment  of all or any
portion of the Letter of Credit  Obligations  is rescinded or must  otherwise be
restored or returned by the Administrative  Agent or any of the Lenders upon the
insolvency,  bankruptcy,  dissolution,  liquidation  or  reorganization  of  any
Person, or upon or as a result of the appointment of a receiver,  intervenor, or
conservator  of,  or  trustee  or  similar  officer  for,  any  Person,  or  any
substantial part of such Person's property,  all as though such payments had not
been made.

                                       25



<PAGE>






               2.2.6 Change in Law; Increased Cost.

               If any change in any law or regulation  or in the  interpretation
thereof  by  any  court  or  other  Governmental   Authority  charged  with  the
administration  thereof shall either (a) impose,  modify or deem  applicable any
reserve, special deposit or similar requirement against Letters of Credit issued
by the Administrative Agent, or (b) impose on the Administrative Agent or any of
the  Lenders  any other  condition  regarding  this  Agreement  or any Letter of
Credit,  and the result of any event  referred  to in  clauses  (a) or (b) above
shall  be  to  increase  the  cost  to  the  Administrative  Agent  of  issuing,
maintaining  or extending the Letter of Credit or the cost to any of the Lenders
of  funding  any  obligation  under or in  connection  with the Letter of Credit
(which  increase  in cost  shall be the  result  of the  Administrative  Agent's
reasonable  allocation of the aggregate of such cost  increases  resulting  from
such events), then, upon demand by the Administrative Agent, the Borrowers shall
immediately  pay to the  Administrative  Agent from time to time as specified by
the  Administrative  Agent,  additional  amounts  which shall be  sufficient  to
compensate the  Administrative  Agent and the Lenders for such  increased  cost,
together with interest on each such amount from the date demanded  until payment
in full  thereof at a rate per annum equal to the then  highest  current rate of
interest on the Revolving Loan. A certificate as to such increased cost incurred
by  the  Administrative  Agent  and/or  any  of the  Lenders,  submitted  by the
Administrative  Agent to the  Borrowers,  shall be conclusive,  absent  manifest
error.

               2.2.7 General Letter of Credit Provisions.

               The Borrowers hereby instruct the Administrative Agent to pay any
draft  complying  with the terms of any  Letter of  Credit  irrespective  of any
instructions of the Borrowers to the contrary. The Borrowers assume all risks of
the acts and  omissions  of the  beneficiary  and other  users of any  Letter of
Credit.  The  Administrative  Agent, the Lenders and their respective  branches,
Affiliates and/or  correspondents shall not be responsible for and the Borrowers
hereby  indemnify  and hold the  Administrative  Agent,  the  Lenders  and their
respective branches,  Affiliates and/or correspondents harmless from and against
all liability, loss and expense (including reasonable attorney's fees and costs)
incurred by the  Administrative  Agent,  the  Lenders  and/or  their  respective
branches,  Affiliates and/or correspondents  relative to and/or as a consequence
of (a) any failure by the  Borrowers  to perform the  agreements  hereunder  and
under any Letter of Credit Agreement,  (b) any Letter of Credit Agreement,  this
Agreement,  any Letter of Credit and any draft,  draw and/or acceptance under or
purported  to be under any Letter of Credit,  (c) any action taken or omitted by
the  Administrative  Agent,  any of the Lenders  and/or any of their  respective
branches,  Affiliates and/or correspondents at the request of the Borrowers, (d)
any failure or inability to perform in  accordance  with the terms of any Letter
of Credit by reason of any  control  or  restriction  rightfully  or  wrongfully
exercised by any de facto or de jure Governmental Authority, group or individual
asserting  or  exercising  governmental  or  paramount  powers,  and/or  (e) any
consequences arising from causes beyond the control of the Administrative Agent,
any of the Lenders and/or any of their respective  branches,  Affiliates  and/or
correspondents.

               Except  for  willful   misconduct   or  gross   negligence,   the
Administrative

                                       26



<PAGE>






Agent,   the  Lenders  and  their   respective   branches,   Affiliates   and/or
correspondents,  shall not be liable or  responsible  in any respect for any (a)
error, omission, interruption or delay in transmission,  dispatch or delivery of
any one or more  messages  or advices in  connection  with any Letter of Credit,
whether  transmitted  by cable,  telegraph,  mail or  otherwise  and despite any
cipher or code which may be  employed,  and/or (b) action,  inaction or omission
which  may be  taken  or  suffered  by it or  them  in  good  faith  or  through
inadvertence  in identifying or failing to identify any beneficiary or otherwise
in connection with any Letter of Credit.

               Any Letter of Credit may be  amended,  modified  or revoked  only
upon  the  receipt  by the  Administrative  Agent  from  the  Borrowers  and the
beneficiary   (including  any  transferee   and/or   assignee  of  the  original
beneficiary), of a written consent and request therefor.

               If any Laws,  order of court and/or  ruling or  regulation of any
Governmental  Authority of the United States (or any state  thereof)  and/or any
country  other than the United States  permits a  beneficiary  under a Letter of
Credit to require the  Administrative  Agent,  the  Lenders  and/or any of their
respective  branches,  Affiliates  and/or  correspondents to pay drafts under or
purporting  to be under a Letter of  Credit  after  the  expiration  date of the
Letter of Credit, the Borrowers shall reimburse the Administrative Agent and the
Lenders, as appropriate,  for any such payment pursuant to provisions of Section
2.2.6 (Change in Law; Increased Cost).

               Except as may otherwise be  specifically  provided in a Letter of
Credit or Letter of Credit Agreement,  the laws of the State of Maryland and the
Uniform   Customs  and  Practice  for   Documentary   Credits,   1993  Revision,
International  Chamber of Commerce  Publication No. 500 shall govern the Letters
of Credit.  The Laws,  rules,  provisions and regulations of the Uniform Customs
and Practice for Documentary  Credits are hereby  incorporated by reference.  In
the event of a conflict between the Uniform Customs and Practice for Documentary
Credits and the laws of the State of Maryland,  the Uniform Customs and Practice
for Documentary Credits shall prevail.

               2.2.8 Participations in the Letters of Credit.

               Each Lender  hereby  irrevocably  authorizes  the  Administrative
Agent to issue  Letters  of Credit in  accordance  with the  provisions  of this
Agreement.  As of the date  each  Letter  of  Credit  is opened or issued by the
Administrative  Agent pursuant to the provisions of this Agreement,  each Lender
shall have an undivided participating interest in (a) the rights and obligations
of the Administrative Agent under such Letter of Credit, and (b) the Outstanding
Letter of Credit  Obligations  of the  Borrowers  with respect to such Letter of
Credit,  in an amount equal to each Lender's  Revolving Credit Pro Rata Share of
such Outstanding Letter of Credit Obligations.

                                       27



<PAGE>






               2.2.9 Payments by the Lenders to the Administrative Agent.

               If the  Borrowers  fail to pay to the  Administrative  Agent  any
Current  Letter  of  Credit  Obligations  as  and  when  due  and  payable,  the
Administrative  Agent shall promptly notify each of the Lenders and shall demand
payment from each of the Lenders such Lender's  Revolving  Credit Pro Rata Share
of such unpaid Current Letter of Credit Obligations.  In addition, if any amount
paid to the  Administrative  Agent  on  account  of  Current  Letter  of  Credit
Obligations  is  rescinded  or  required  to be  restored  or turned over by the
Administrative Agent upon the insolvency, bankruptcy,  dissolution,  liquidation
or  reorganization of the Borrowers or upon or as a result of the appointment of
a  receiver,  intervenor,  trustee,  conservator  or  similar  officer  for  the
Borrowers,  or is otherwise  not  indefeasibly  covered by an advance  under the
Revolving  Loan,  the  Administrative  Agent shall  promptly  notify each of the
Lenders  and shall  demand  payment  from each of the  Lenders of its  Revolving
Credit Pro Rata Share of its portion of the Current Letter of Credit Obligations
to be remitted to the Borrowers.

               Each of the Lenders  irrevocably  and  unconditionally  agrees to
honor any such demands for payment under this Section and promises to pay to the
Administrative  Agent's  account on the same Business Day as demanded the amount
of its  Revolving  Credit  Pro  Rata  Share  of the  Current  Letter  of  Credit
Obligations in immediately available funds, without any setoff,  counterclaim or
deduction  of any  kind.  Any  payment  by a  Lender  hereunder  shall in no way
release,  discharge  or lessen the  obligation  of the  Borrowers to pay Current
Letter of Credit Obligations to the Administrative  Agent in accordance with the
provisions of this Agreement.

               The obligation of each of the Lenders to remit the amounts of its
Revolving Credit Pro Rata Share of Current Letter of Credit  Obligations for the
account  of  the  Administrative   Agent  pursuant  to  this  Section  shall  be
unconditional  and irrevocable  under any and all  circumstances  and may not be
terminated,  suspended or delayed for any reason  whatsoever,  provided that all
payments of such  amounts by each of the Lenders  shall be without  prejudice to
the rights of each of the Lenders  with  respect to the  Administrative  Agent's
alleged  willful  misconduct.   Any  claim  any  Lender  may  have  against  the
Administrative  Agent as a result of the Administrative  Agent's alleged willful
misconduct  may be  brought  by such  Lender in a separate  action  against  the
Administrative  Agent  but may not be used as a  defense  to  payment  under the
provisions of this Section.

               No failure  of any  Lender to remit the  amount of its  Revolving
Credit  Pro  Rata  Share  of  Current  Letter  of  Credit   Obligations  to  the
Administrative  Agent  pursuant to this Section shall affect the  obligations of
the Administrative  Agent under any Letter of Credit, and if any Lender does not
remit to the  Administrative  Agent the amount of its Revolving  Credit Pro Rata
Share of Current Letter of Credit Obligations on the same day as demanded,  then
without limiting such Lender's obligation to transmit funds on the same Business
Day as  demanded,  such  Lender  shall be  obligated  to pay,  on  demand of the
Administrative  Agent and without setoff,  counterclaim or deduction of any kind
whatsoever  interest on the unpaid amount at the Federal Funds Rate for each day
from the date such amount shall be due and payable to the  Administrative  Agent
until the date such  amount  shall have been paid in full to the  Administrative
Agent by such Lender.

                                       28



<PAGE>






     Section 2.3 General Financing Provisions.

               2.3.1 Borrowers' Representatives.

               The Borrowers hereby represent and warrant to the  Administrative
Agent and the  Lenders  that each of them will  derive  benefits,  directly  and
indirectly,  from each Letter of Credit and from each  advance of the  Revolving
Loan, both in their separate capacity and as a member of the integrated group to
which each of the Borrowers  belong and because the successful  operation of the
integrated group is dependent upon the continued  successful  performance of the
functions  of the  integrated  group as a whole,  because  (a) the  terms of the
consolidated  financing  provided  under this  Agreement are more favorable than
would  otherwise  be  obtainable  by the  Borrowers  individually,  and  (b) the
Borrowers'  additional  administrative  and other costs and reduced  flexibility
associated  with  individual  financing  arrangements  which would  otherwise be
required if obtainable would substantially  reduce the value to the Borrowers of
the financing.  The Borrowers in the discretion of their respective  managements
are to agree among themselves as to the allocation of the benefits of Letters of
Credit and the  proceeds of the  Revolving  Loan;  provided,  however,  that the
Borrowers   shall  be  deemed  to  have   represented   and   warranted  to  the
Administrative Agent and the Lenders at the time of allocation that each benefit
and use of proceeds is a Permitted Use.

               For administrative convenience,  each Borrower hereby irrevocably
appoints  Mid-Atlantic  as  the  Borrower's  attorney-in-fact,   with  power  of
substitution (with the prior written consent of the Administrative  Agent in the
exercise of its sole and absolute discretion), in the name of Mid-Atlantic or in
the name of the  Borrower or  otherwise to take any and all actions with respect
to this Agreement,  the other Financing Documents and/or the Obligations as Mid-
Atlantic may so elect from time to time, including, without limitation,  actions
to (a)  request  advances  under the  Revolving  Loan,  apply for and direct the
benefits of Letters of Credits,  and direct the Administrative Agent to disburse
or credit the  proceeds  of any  advance of the  Revolving  Loan  directly to an
account of Mid-Atlantic,  either of the Borrowers or otherwise,  which direction
shall  evidence  the  making of such  advance  of the  Revolving  Loan and shall
constitute  the  acknowledgment  by each of the  Borrowers of the receipt of the
proceeds of such advance of the Revolving  Loan or the benefit of such Letter of
Credit, (b) enter into, execute,  deliver, amend, modify,  restate,  substitute,
extend and/or renew this  Agreement,  any other  Financing  Documents,  security
agreements,  mortgages, deposit account agreements,  instruments,  certificates,
waivers, letter of credit applications,  releases, documents and agreements from
time to time,  and (c) endorse any check or other item of payment in the name of
the  Borrower  or in the name of  Mid-Atlantic.  The  foregoing  appointment  is
coupled with an interest, cannot be revoked without the prior written consent of
the  Administrative  Agent,  and may be  exercised  from  time  to time  through
Mid-Atlantic  duly  authorized  officer,  officers  or other  Person or  Persons
designated by Mid-Atlantic to act from time to time on behalf of Mid-Atlantic.

               Each of the Borrowers hereby  irrevocably  authorizes each of the
Lenders to make advances of the Revolving Loan to either of the  Borrowers,  and
hereby irrevocably  authorizes the Administrative  Agent to issue or cause to be
issued Letters of Credit for the account of either of the Borrowers, pursuant to
the provisions of this Agreement upon the written,

                                       29



<PAGE>






oral or  telephone  request  any one or more of the  Persons who is from time to
time a Responsible Officer of a Borrower under the provisions of the most recent
certificate of corporate  resolutions and/or incumbency of the Borrowers on file
with the  Administrative  Agent and also  upon the  written,  oral or  telephone
request of any one of the Persons who is from time to time a Responsible Officer
of Mid-Atlantic under the provisions of the most recent certificate of corporate
resolutions  and/or incumbency for Mid-Atlantic on file with the  Administrative
Agent.

               Neither the  Administrative  Agent nor any of the Lenders assumes
any responsibility or liability for any errors,  mistakes,  and/or discrepancies
in the oral,  telephonic,  written or other  transmissions of any  instructions,
orders,  requests and  confirmations  between the  Administrative  Agent and the
Borrowers, or either of them, or the Administrative Agent and any of the Lenders
in connection with the Credit Facilities, any advance of the Revolving Loan, any
Letter of Credit or any other  transaction in connection  with the provisions of
this Agreement.  Without implying any limitation on the joint and several nature
of the Obligations,  the Lenders agree that, notwithstanding any other provision
of  this   Agreement,   the  Borrowers  may  create   reasonable   inter-company
indebtedness  between or among the Borrowers  with respect to the  allocation of
the  benefits and  proceeds of the  advances  and Credit  Facilities  under this
Agreement.  The Borrowers agree among themselves,  and the Administrative  Agent
and the Lenders consent to that agreement,  that each Borrower shall have rights
of  contribution  from the other  Borrower  to the extent such  Borrower  incurs
Obligations  in excess of the  proceeds of the  Revolving  Loan  received by, or
allocated  to  purposes  for the direct  benefit  of,  such  Borrower.  All such
indebtedness  and rights shall be, and are hereby agreed by the Borrowers to be,
subordinate  in priority  and payment to the  indefeasible  repayment in full in
cash of the Obligations,  and, unless the Administrative Agent agrees in writing
otherwise, shall not be exercised or repaid in whole or in part until all of the
Obligations  have been  indefeasibly  paid in full in cash. Each Borrower hereby
waives  all  rights of  counterclaim,  recoupment  and  offset  between or among
themselves arising on account of that indebtedness and otherwise.  Each Borrower
shall not evidence the  inter-company  indebtedness or rights of contribution by
note or other  instrument,  and shall not secure such  indebtedness or rights of
contribution with any Lien or security.

               2.3.2 Computation of Interest and Fees.

               All applicable Fees and interest shall be calculated on the basis
of a year of 360 days for the actual number of days  elapsed.  Any change in the
interest  rate on any of the  Obligations  resulting  from a change in the Prime
Rate shall  become  effective  as of the opening of business on the day on which
such change in the Prime Rate is announced.

               2.3.3 Commitment Fee.

               On or before  the  Closing  Date the  Borrowers  shall pay to the
Administrative  Agent for the ratable  benefit of the Lenders a  commitment  fee
(the  "Commitment  Fee")  equal to one  quarter  of one  percent  (.25%)  of the
Revolving  Credit  Facility  ($187,500),  which fee has been fully earned and is
non-refundable.

                                       30



<PAGE>






               2.3.4 Extension Fee.

               In consideration of any agreement by the Administrative Agent and
the Lenders to extend the Revolving Credit Expiration Date for an additional one
(1) year period to April 22, 2003, the Borrowers shall pay to the Administrative
Agent  for the  ratable  benefit  of the  Lenders,  an  extension  fee  equal to
one-eighth of one percent  (.125%) of the Revolving  Credit  Facility  ($93,750)
(the  "Extension  Fee").  Any extension fee shall be due and payable on the date
the  extension is granted and shall be fully earned when due and  non-refundable
upon payment.

               2.3.5 Payments.

               All  payments of the  Obligations  and the  Agents'  Obligations,
including, without limitation, principal, interest, Prepayments, and Fees, shall
be paid by the Borrowers  without setoff or counterclaim  to the  Administrative
Agent (except as otherwise provided herein) at the Administrative Agent's office
specified in Section 9.1 (Notices) in immediately available funds not later than
noon  (Baltimore  City  Time)  on the due  date of such  payment.  All  payments
received  by the  Administrative  Agent  after such time shall be deemed to have
been received by the Administrative Agent for purposes of computing interest and
Fees and otherwise as of the next Business Day. Payments shall not be considered
received  by the  Administrative  Agent  until  such  payments  are  paid to the
Administrative Agent in immediately available funds.

               2.3.6 Liens; Setoff.

               The Borrowers hereby grant to the Administrative Agent and to the
Lenders a continuing Lien for all of the Obligations and the Agents' Obligations
upon any and all monies, securities, and other property of the Borrowers and the
proceeds  thereof,  now or  hereafter  held or received by or in transit to, the
Administrative  Agent,  any  of  the  Lenders,   and/or  any  Affiliate  of  the
Administrative Agent and/or any of the Lenders,  from or for the Borrowers,  and
also upon any and all deposit  accounts  (general or special) and credits of the
Borrowers,  if any,  with the  Administrative  Agent,  any of the Lenders or any
Affiliate  of the  Administrative  Agent  or any of  the  Lenders,  at any  time
existing, excluding any deposit accounts held by the Borrowers in their capacity
as trustee for Persons who are not  Borrowers or  Affiliates  of the  Borrowers.
Without  implying any  limitation on any other rights the  Administrative  Agent
and/or the Lenders may have under the Financing  Documents or  applicable  Laws,
during the  continuance  of an Event of  Default,  the  Administrative  Agent is
hereby  authorized by the  Borrowers at any time and from time to time,  without
notice  to the  Borrowers,  to set off,  appropriate  and apply any or all items
hereinabove referred to against all Obligations and the Agents' Obligations then
outstanding  (whether or not then due), all in such order and manner as shall be
determined by the Administrative Agent in its sole and absolute discretion.

                                       31



<PAGE>






               2.3.7 Requirements of Law.

               In the event that any Lender shall have  determined in good faith
that (a) the adoption of any Laws regarding capital adequacy,  or (b) any change
therein or in the  interpretation  or  application  thereof or (c) compliance by
such  Lender or any  corporation  controlling  such  Lender  with any request or
directive  regarding  capital adequacy  (whether or not having the force of law)
from any central bank or Governmental  Authority,  does or shall have the effect
of reducing the rate of return on the capital of such Lender or any  corporation
controlling  such Lender,  as a consequence  of the  obligations  of such Lender
hereunder to a level below that which such Lender or any corporation controlling
such Lender would have  achieved  but for such  adoption,  change or  compliance
(taking  into  consideration  the  policies of such  Lender and the  corporation
controlling such Lender,  with respect to capital  adequacy) by an amount deemed
by such Lender to be material,  then from time to time, after submission by such
Lender to the  Borrowers  of a written  request  therefor and a statement of the
basis  for such  determination,  the  Borrowers  shall pay to such  Lender  such
additional amount or amounts in order to compensate for such reduction.

               2.3.8 Guaranty.

               (a)  Each  Borrower  hereby   unconditionally   and  irrevocably,
guarantees to the Administrative Agent and the Lenders:

                    (i) the due and punctual payment in full (and not merely the
collectibility)  by the  other  Borrower  of the  Obligations  and  the  Agents'
Obligations,  including unpaid and accrued interest  thereon,  in each case when
due and payable, all according to the terms of this Agreement, the Notes and the
other Financing Documents;

                    (ii) the due and  punctual  payment  in full (and not merely
the  collectibility)  by the other  Borrower of all other sums and charges which
may at any time be due and payable in accordance with this Agreement,  the Notes
or any of the other Financing Documents;

                    (iii) the due and punctual performance by the other Borrower
of all of the other terms,  covenants and conditions  contained in the Financing
Documents; and

                    (iv) all the other Obligations of the other Borrower.

              (b)  The  obligations  and  liabilities  of  each  Borrower  as  a
guarantor under this Section 2.3.8 shall be absolute and unconditional and joint
and several, irrespective of the genuineness,  validity, priority, regularity or
enforceability  of this  Agreement,  any of the  Notes  or any of the  Financing
Documents or any other circumstance which might otherwise  constitute a legal or
equitable discharge of a surety or guarantor. Each Borrower in its capacity as a
guarantor expressly agrees that the Administrative Agent and the Lenders may,

                                       32



<PAGE>






in their sole and absolute  discretion,  without  notice to or further assent of
such  Borrower  and  without  in any  way  releasing,  affecting  or in any  way
impairing the joint and several  obligations and liabilities of such Borrower as
a guarantor hereunder:

                    (i) waive  compliance  with, or any defaults under, or grant
any other indulgences under or with respect to any of the Financing Documents;

                    (ii) modify,  amend,  change or terminate any  provisions of
any of the Financing Documents;

                    (iii) grant extensions or renewals of or with respect to the
Credit Facilities, the Notes or any of the other Financing Documents;

                    (iv)  effect  any  release,  subordination,   compromise  or
settlement in  connection  with this  Agreement,  any of the Notes or any of the
other Financing Documents;

                    (v) agree to the  substitution,  exchange,  release or other
disposition of any collateral for the Obligations and the Agents' Obligations or
to the subordination of any lien or security interest therein;

                    (vi) make advances for the purpose of  performing  any term,
provision or covenant  contained in this  Agreement,  any of the Notes or any of
the other Financing  Documents with respect to which the Borrowers shall then be
in default;

                    (vii)  make  future  advances   pursuant  to  the  Financing
Agreement or any of the other Financing Documents;

                    (viii) assign, pledge, hypothecate or otherwise transfer the
Commitments, the Obligations, the Notes, any of the other Financing Documents or
any interest  therein,  all as and to the extent  permitted by the provisions of
this Agreement;

                    (ix) deal in all respects with the other Borrower as if this
Section 2.3.8 were not in effect;

                    (x) effect any release,  compromise or  settlement  with the
other  Borrower,  whether in its capacity as a Borrower or as a guarantor  under
this Section 2.3.8, or any other guarantor; and

                    (xi) provide debtor-in-possession  financing or allow use of
cash  collateral in proceedings  under the Bankruptcy  Code, it being  expressly
agreed by all Borrowers that any such financing and/or use

                                       33



<PAGE>






                  would be part of the Obligations.

              (c) The obligations and liabilities of each Borrower, as guarantor
under this Section 2.3.8, shall be primary,  direct and immediate,  shall not be
subject to any  counterclaim,  recoupment,  set off,  reduction or defense based
upon any  claim  that a  Borrower  may have  against  the  other  Borrower,  the
Administrative  Agent, any one or more of the Lenders and/or any other guarantor
and shall not be  conditional  or contingent  upon pursuit or enforcement by the
Administrative  Agent or other  Lenders of any  remedies it may have against the
Borrowers  with  respect  to  this  Agreement,  the  Notes  or any of the  other
Financing  Documents,  whether  pursuant to the terms thereof or by operation of
law. Without limiting the generality of the foregoing,  the Administrative Agent
and the  Lenders  shall not be  required  to make any demand  upon either of the
Borrowers, or to sell any collateral or otherwise pursue, enforce or exhaust its
or their  remedies  against  the  Borrowers  or any  collateral  either  before,
concurrently  with or after  pursuing  or  enforcing  its  rights  and  remedies
hereunder.  Any one or more successive or concurrent  actions or proceedings may
be brought  against each Borrower under this Section  2.3.8,  either in the same
action,  if any,  brought against one of the Borrowers or in separate actions or
proceedings,  as  often  as the  Administrative  Agent  may  deem  expedient  or
advisable.  Without limiting the foregoing,  it is specifically  understood that
any  modification,  limitation  or  discharge  of  any  of  the  liabilities  or
obligations of either of the Borrowers, any other guarantor or any obligor under
any of the Financing Documents, arising out of, or by virtue of, any bankruptcy,
arrangement,  reorganization  or similar  proceeding for relief of debtors under
federal or state law  initiated  by or against  one of the  Borrowers,  in their
respective  capacities as borrowers and guarantors  under this Section 2.3.8, or
under any of the Financing Documents shall not modify,  limit,  lessen,  reduce,
impair, discharge, or otherwise affect the liability of each Borrower under this
Section 2.3.8 in any manner whatsoever,  and this Section 2.3.8 shall remain and
continue in full force and effect.  It is the intent and purpose of this Section
2.3.8 that each  Borrower  shall and does hereby  waive all rights and  benefits
which might accrue to any other guarantor by reason of any such proceeding,  and
the  Borrowers  agree  that  they  shall be  liable  for the full  amount of the
obligations  and  liabilities  under  this  Section  2.3.8,  regardless  of, and
irrespective to, any  modification,  limitation or discharge of the liability of
one of the  Borrowers,  any  other  guarantor  or any  obligor  under any of the
Financing Documents, that may result from any such proceedings.

              (d) Each Borrower,  as guarantor under this Section 2.3.8,  hereby
unconditionally, jointly and severally, irrevocably and expressly waives:

                    (i)  presentment  and demand for payment of the  Obligations
and protest of non-payment;

                    (ii)  notice  of  acceptance  of this  Section  2.3.8 and of
presentment, demand and protest thereof;

                    (iii) notice of any default  hereunder or under the Notes or
any of the other Financing Documents and notice of all indulgences;

                                       34



<PAGE>






                    (iv) notice of any  increase in the amount of any portion of
or all of the indebtedness guaranteed by this Section 2.3.8;

                    (v) demand for observance, performance or enforcement of any
of the terms or provisions of this Section 2.3.8,  the Notes or any of the other
Financing Documents;

                    (vi)  all  errors  and  omissions  in  connection  with  the
Lender's administration of all indebtedness guaranteed by this Section 2.3.8;

                    (vii) any right or claim of right to cause a marshalling  of
the assets of one or both of the Borrowers;

                    (viii) any act or  omission of the  Administrative  Agent or
the Lenders which changes the scope of the risk as guarantor hereunder;  and all
other  notices and demands  otherwise  required  by law which the  Borrower  may
lawfully waive.

                    Within  ten  (10)  days   following   any   request  of  the
Administrative  Agent so to do, each  Borrower  will furnish the  Administrative
Agent and the Lenders  and such other  persons as the  Administrative  Agent may
direct with a written  certificate,  duly acknowledged stating in detail whether
or not any  credits,  offsets or  defenses  exist with  respect to this  Section
2.3.8.

     Section 2.4 Interest.

          2.4.1 Applicable Interest Rates.

              (a) Each advance of the Revolving  Loan shall bear interest  until
maturity  (whether by  acceleration,  declaration,  extension or  otherwise)  at
either the Base Rate or the  Eurodollar  Rate,  as selected and specified by the
Borrowers in an Interest Rate Election  Notice  furnished to the  Administrative
Agent in  accordance  with the  provisions  of Section  2.4.2(e)  (Selection  of
Interest Rates), or as otherwise determined in accordance with the provisions of
this Section.

              (b)  Notwithstanding  the foregoing,  following the occurrence and
during  the  continuance  of  an  Event  of  Default,   at  the  option  of  the
Administrative  Agent,  all  Loans  and all other  Obligations  and the  Agents'
Obligations shall bear interest at the Post-Default Rate.

              (c) The Applicable  Margin for (i)  Eurodollar  Loans shall be one
and one quarter of one percent (1.25%) per annum, and (ii) Base Rate Loans shall
be zero  percent  (0%) per annum  unless and until a change is  required  by the
operation of Section 2.4.1(d).

              (d) Changes in the Applicable Margin shall be made not more

                                       35



<PAGE>






frequently  than  quarterly  based  on  the  Pricing  Ratio,  determined  by the
Administrative  Agent in the exercise of its sole and absolute  discretion  from
the quarterly  reports  required by Section 6.1.1(b)  (Quarterly  Statements and
Certificates),  except that the first such determination  shall be made based on
the Borrowers' annual financial  statements required by Section 6.1.1(a) (Annual
Statements and  Certificates)  for the Borrowers' fiscal year ended December 31,
1998 and shall be  effective  as of the first day of the first  month  after the
Administrative Agent receives such statements.  The Applicable Margin (expressed
as  percentages)  shall vary  depending upon the  Borrowers'  Pricing Ratio,  as
follows:

--------------------------------------------------------------------------------
          Pricing Ratio                Applicable Margin       Applicable Margin
                                      for Eurodollar Loans   for Base Rate Loans
--------------------------------------------------------------------------------
    less than or equal to 45%                1.25%                    0%
--------------------------------------------------------------------------------
        Greater than 45%                    1.50%                     0%

              2.4.2 Selection of Interest Rates.

              (a) The Borrowers may select the initial Applicable  Interest Rate
or Applicable Interest Rates to be charged on the Revolving Loan.

              (b) From time to time after the date of this Agreement as provided
in this Section,  by a proper and timely Interest Rate Election Notice furnished
to the  Administrative  Agent in  accordance  with  the  provisions  of  Section
2.4.2(e),  the  Borrowers  may select an  initial  Applicable  Interest  Rate or
Applicable  Interest Rates for any advances of the Revolving Loan or may convert
the Applicable Interest Rate and, when applicable,  the Interest Period, for any
existing advance of the Revolving Loan to any other Applicable Interest Rate or,
when applicable, any other Interest Period.

              (c) The Borrowers' selection of an Applicable Interest Rate and/or
an Interest Period,  the Borrowers'  election to convert an Applicable  Interest
Rate and/or an Interest Period to another  Applicable  Interest Rate or Interest
Period,  and any  other  adjustments  in an  interest  rate are  subject  to the
following limitations:

                    (i) the Borrowers  shall not at any time select or change to
               an  Interest  Period that  extends  beyond the  Revolving  Credit
               Expiration Date;

                    (ii) no  change  from the  Eurodollar  Rate to the Base Rate
               shall become  effective on a day other than a Business Day and on
               a day which is the last day of the then current  Interest Period,
               no change of an Interest  Period shall become  effective on a day
               other than the last day of the then current Interest Period,  and
               no change from the Base Rate to the Eurodollar  Rate shall become
               effective  on a day  other  than  a  day  which  is a  Eurodollar
               Business Day;

                    (iii) any Applicable Interest Rate change for any portion of
               the Revolving Loan to be effective on a date on which any

                                       36



<PAGE>






                  principal   payment  on  account  of  the  Revolving  Loan  is
                  scheduled  to be paid shall be made only  after  such  payment
                  shall have been made;

                    (iv)  the  first  day of each  Interest  Period  shall  be a
               Eurodollar Business Day;

                    (v) as of the effective date of a selection, there shall not
               exist a Default or an Event of Default; and

                    (vi) the minimum principal amount of a Eurodollar Loan shall
               be One Million Dollars ($1,000,000).

                   (d) If a request for an advance under the  Revolving  Loan is
not  accompanied  by an  Interest  Rate  Election  Notice or does not  otherwise
include a  selection  of an  Applicable  Interest  Rate and, if  applicable,  an
Interest Period, or if, after having made a selection of an Applicable  Interest
Rate and, if  applicable,  an Interest  Period,  the  Borrowers  fail or are not
otherwise  entitled  under the  provisions  of this  Agreement to continue  such
Applicable  Interest Rate or Interest  Period,  the Borrowers shall be deemed to
have selected the Base Rate as the  Applicable  Interest Rate until such time as
the Borrowers have selected a different  Applicable  Interest Rate and specified
an Interest  Period in accordance  with,  and subject to, the provisions of this
Section.

                   (e) The Lenders will not be obligated to make advances of the
Revolving Loan, to convert the Applicable Interest Rate on the Revolving Loan to
another Interest Rate, or to change Interest Periods,  unless the Administrative
Agent  shall have  received  an  irrevocable  written or  telephonic  notice (an
"Interest  Rate Election  Notice") from the Borrowers  specifying  the following
information:

                    (i) the amount to be borrowed or converted,

                    (ii) a selection of the Base Rate or the Eurodollar Rate,

                    (iii) the length of the  Interest  Period if the  Applicable
               Interest Rate selected is the Eurodollar Rate, and

                    (iv) the  requested  date on which  such  election  is to be
               effective.

                   Any  telephonic  notice must be confirmed  in writing  within
three (3) Business Days.  Each Interest Rate Election Notice must be received by
the Administrative  Agent not later than 10:00 a.m. (Baltimore City Time) on the
Business Day of any requested borrowing or conversion in the case of a selection
of the Base Rate and not later  than  10:00  a.m.  (Baltimore  City Time) on the
third  Business  Day before the  effective  date of any  requested  borrowing or
conversion in the case of a selection of the Eurodollar Rate.

                                       37



<PAGE>






                   2.4.3 Inability to Determine Eurodollar Base Rate.

                   In the event  that (a) the  Administrative  Agent  shall have
determined  that,  by reason of  circumstances  affecting  the London  interbank
eurodollar  market,  adequate and reasonable means do not exist for ascertaining
the Eurodollar  Base Rate for any requested  Interest  Period with respect to an
advance of the Revolving  Loan the Borrowers  have requested to be made or to be
converted to a Eurodollar Loan or (b) the  Administrative  Agent shall determine
that the Eurodollar Base Rate for any requested  Interest Period with respect to
an advance of the Revolving  Loan the Borrowers  have requested to be made or to
be converted to a Eurodollar  Loan does not  adequately  and fairly  reflect the
cost to the Lenders of funding or converting such advance of the Revolving Loan,
the  Administrative  Agent  shall  give  telephonic  or  written  notice of such
determination  to the  Borrowers at least one (1) day prior to the proposed date
for funding or converting  such advance of the Revolving Loan. If such notice is
given,  any request for a  Eurodollar  Loan shall be made or converted to a Base
Rate Loan. Until such notice has been withdrawn by the Administrative Agent, the
Borrowers  will not request  that any advance of the  Revolving  Loan be made or
converted to a Eurodollar Loan.

                   2.4.4 Indemnity.

                   The   Borrowers   agree  to  indemnify   and   reimburse  the
Administrative  Agent and the Lenders and to hold the  Administrative  Agent and
the Lenders  harmless from any loss,  cost (including  administrative  costs) or
expense  which any one or more of the  Administrative  Agent or the  Lenders may
sustain or incur as a  consequence  of (a) a default by the Borrowers in payment
when due of the principal  amount of or interest on any Eurodollar Loan, (b) the
failure of the Borrowers to make, or convert the Applicable Interest Rate of, an
advance of the Revolving Loan after the Borrowers have given a Loan Notice or an
Interest  Rate  Election  Notice,  (c) the failure of the  Borrowers to make any
prepayment of a Eurodollar  Loan after the  Borrowers  have given notice of such
intention to make such a prepayment, and/or (d) the making by the Borrowers of a
prepayment  of a  Eurodollar  Loan on a day  which  is not the  last  day of the
Interest  Period  for  such  Eurodollar  Loan,  calculated  as  provided  in the
following paragraph.  This agreement and covenant of the Borrowers shall survive
termination   or  expiration  of  this   Agreement  and  payment  of  the  other
Obligations.

                   Contemporaneously  with  any  prepayment  of  principal  of a
Eurodollar  Loan, a prepayment  premium  shall be due and payable to the Lenders
calculated by discounting to present  value,  as of the date of the  prepayment,
the remaining payments of principal and interest on the Eurodollar Loan, using a
discount rate equal to two and one-half of one percent (2.5%) above the yield to
maturity of that  non-callable  debt  obligation of the United  States  Treasury
having a maturity  date nearest in time to the maturity  date of the  Eurodollar
Loan.  If such  discounted  value  exceeds  the unpaid  principal  amount of the
Eurodollar  Loan,  then the prepayment  premium shall be an amount equal to such
excess,  but in no event less than  one-half of one  percent  (0.5 of 1%) of the
amount  being  prepaid.  If the  discounted  value  does not  exceed  the unpaid
principal amount of the Eurodollar  Loan, the prepayment  premium shall be equal
to one-half of one percent (0.5 of 1%) of the amount being prepaid. The maturity
date and yields to maturity of the applicable United States Treasury  obligation
shall be determined on the basis

                                       38



<PAGE>






of quotations  published in The Wall Street Journal on the date of prepayment or
from such other  source as the  Administrative  Agent,  in its sole  discretion,
shall deem appropriate.

                   The  Administrative  Agent  and  the  Lenders  shall  not  be
obligated  or required to have  actually  reinvested  the prepaid  amount of the
Eurodollar  Loan in any  Treasury  obligation  as a condition  precedent  to the
Borrowers  being obligated to pay a prepayment  premium as outlined  above.  The
Administrative  Agent and the  Lenders  shall  not be  obligated  to accept  any
prepayment of principal unless it is accompanied by the prepayment  premium,  if
any, due in  connection  therewith as calculated  pursuant to the  provisions of
this paragraph.  No prepayment  premium payable in connection  herewith shall in
any event or under any circumstances be deemed or construed as a penalty.

                   2.4.5 Payment of Interest.

                   (a)  Unpaid  and  accrued  interest  on  any  advance  of the
Revolving  Loan  shall be paid  monthly,  in  arrears,  on the first day of each
calendar  month,  commencing  on the  first  such  date  after  the date of this
Agreement,  and on the  first  day of each  calendar  month  thereafter,  and at
maturity (whether by acceleration, declaration, extension or otherwise).

                   (b)  Notwithstanding  the  foregoing,  any and all unpaid and
accrued interest on any Base Rate Loan converted to a Eurodollar Loan or prepaid
shall  be  paid  immediately  upon  such  conversion   and/or   prepayment,   as
appropriate.

                   (c) Unpaid and accrued  interest on any Eurodollar Loan shall
be paid on the last  Business Day of each  Interest  Period for such  Eurodollar
Loan  and at  maturity  (whether  by  acceleration,  declaration,  extension  or
otherwise);  provided,  however that any and all unpaid and accrued  interest on
any  Eurodollar  Loan prepaid prior to  expiration of the then current  Interest
Period for such Eurodollar Loan shall be paid immediately upon prepayment.

     Section 2.5 Settlement Among Lenders.

                   2.5.1 Revolving Loan.

                   It is agreed that each Lender's Net Outstandings are intended
by the Lenders to be equal at all times to such  Lender's  Revolving  Credit Pro
Rata Share of the aggregate  outstanding  principal amount of the Revolving Loan
outstanding.   Notwithstanding  such  agreement,   the  several  and  not  joint
obligation of each Lender to fund the Revolving Loan made in accordance with the
terms of this  Agreement  ratably in  accordance  with such  Lender's  Revolving
Credit Pro Rata Share and each  Lender's  right to receive its ratable  share of
principal payments on the Revolving Loan in accordance with its Revolving Credit
Pro Rata Share, the Lenders agree that in order to facilitate the administration
of this  Agreement and the Financing  Documents that  settlement  among them may
take place on a periodic basis in accordance with the provisions of this Section
2.5 (Settlement Among Lenders).

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<PAGE>






                   2.5.2 Settlement Procedures as to Revolving Loan.

                   (a) In General.  To the extent and in the manner  hereinafter
provided in this Section 2.5.2, settlement among the Lenders as to the Revolving
Loan may occur  periodically on Settlement Dates determined from time to time by
the Administrative Agent not less frequently than weekly, which may occur before
or after the  occurrence  or during  the  continuance  of a Default  or Event of
Default  and  whether  or not all of the  conditions  set forth in  Section  4.2
(Conditions to All Extensions of Credit) have been met. On each  Settlement Date
payments shall be made by or to FMB and the other Lenders in the manner provided
in this Section 2.5.2 in accordance with the Settlement  Report delivered by the
Administrative Agent pursuant to the provisions of this Section 2.5.2 in respect
of such  Settlement  Date so that as of each  Settlement  Date, and after giving
effect to the  transactions to take place on such Settlement Date, each Lender's
Net  Outstandings  shall equal such Lender's  Revolving Credit Pro Rata Share of
the Revolving Loan outstanding.

                   (b)  Selection of  Settlement  Dates.  If the  Administrative
Agent elects,  in its  discretion,  but subject to the consent of FMB, to settle
accounts  among the Lenders with respect to principal  amounts of the  Revolving
Loan less frequently than each Business Day, then the Administrative Agent shall
designate  periodic  Settlement  Dates which may occur on any Business Day after
the  Closing  Date;  provided,  however,  that the  Administrative  Agent  shall
designate  as a Settlement  Date any  Business Day which is an Interest  Payment
Date;  and provided  further,  that a Settlement  Date shall occur at least once
during  each  seven-day  period.  The  Administrative  Agent  shall  designate a
Settlement Date by delivering to each Lender a Settlement  Report not later than
12:00  noon  (Baltimore  City  Time)  on the  proposed  Settlement  Date,  which
Settlement  Report  shall be with  respect to the period  beginning  on the next
preceding Settlement Date and ending on such designated Settlement Date.

                   (c) Non-Ratable Loans and Payments. Between Settlement Dates,
the  Administrative  Agent shall request and FMB may (but shall not be obligated
to) advance to the Borrowers out of FMB's own funds, the entire principal amount
of any advance under the Revolving Loan requested or deemed  requested  pursuant
to Section 2.1.2  (Procedure for Making  Advances Under the Revolving Loan) (any
such  advance  under the  Revolving  Loan being  referred  to as a  "Non-Ratable
Loan").  The  making  of each  Non-Ratable  Loan by FMB  shall be deemed to be a
purchase by FMB of a 100%  participation in each other Lender's Revolving Credit
Pro  Rata  Share  of the  amount  of such  Non-Ratable  Loan.  All  payments  of
principal,  interest and any other amount with respect to such  Non-Ratable Loan
shall be payable to and received by the Administrative  Agent for the account of
FMB. Upon demand by FMB,  with notice to the  Administrative  Agent,  each other
Lender  shall pay to FMB, as the  repurchase  of such  participation,  an amount
equal to 100% of such Lender's  Revolving Credit Pro Rata Share of the principal
amount of such  Non-Ratable  Loan. Any payments  received by the  Administrative
Agent  between  Settlement  Dates  which in  accordance  with the  terms of this
Agreement  are to be  applied  to the  reduction  of the  outstanding  principal
balance of  Revolving  Loan,  shall be paid over to and retained by FMB for such
application,  and such payment to and  retention by FMB shall be deemed,  to the
extent of each other Lender's  Revolving  Credit Pro Rata Share of such payment,
to be a purchase by each such other Lender of a participation in the

                                       40



<PAGE>






advance under the Revolving Loan (including the repurchase of  participations in
Non-Ratable  Loans)  made by FMB.  Upon  demand by another  Lender,  with notice
thereof to the Administrative  Agent, FMB shall pay to the Administrative Agent,
for the account of such other Lender, as a repurchase of such participation,  an
amount equal to such other Lender's  Revolving Credit Pro Rata Share of any such
amounts (after  application  thereof to the repurchase of any  participations of
FMB in such other Lender's  Revolving  Credit Pro Rata Share of any Non- Ratable
Loans) paid only to FMB by the Administrative Agent.

                   (d) Net Decrease in  Outstandings.  If on any Settlement Date
the  increase,  if any, in the dollar  amount of any Lender's  Net  Outstandings
which is required to comply with the first sentence of Section 2.5.1  (Revolving
Loan) is less than such  Lender's  Revolving  Credit  Pro Rata  Share of amounts
received  by the  Administrative  Agent  but  paid  only to FMB  since  the next
preceding  Settlement Date, such Lender and the  Administrative  Agent, in their
respective records, shall apply such Lender's Revolving Credit Pro Rata Share of
such amounts to the increase in such  Lender's Net  Outstandings,  and FMB shall
pay to the  Administrative  Agent,  for the account of such  Lender,  the excess
allocable to such Lender.

                   (e) Net Increase in  Outstandings.  If on any Settlement Date
the  increase,  if any, in the dollar  amount of any Lender's  Net  Outstandings
which is required to comply with the first sentence of Section 2.5.1  (Revolving
Loan) exceeds such Lender's  Revolving Credit Pro Rata Share of amounts received
by the  Administrative  Agent  but paid  only to FMB  since  the next  preceding
Settlement Date, such Lender and the  Administrative  Agent, in their respective
records,  shall  apply  such  Lender's  Revolving  Credit Pro Rata Share of such
amounts to the increase in such Lender's Net Outstandings, and such Lender shall
pay to the Administrative Agent, for the account of FMB, any excess.

                   (f)  No  Change  in  Outstandings.  If  a  Settlement  Report
indicates  that no advance  under the  Revolving  Loan has been made  during the
period since the next preceding  Settlement  Date, then such Lender's  Revolving
Credit Pro Rata Share of any amounts  received by the  Administrative  Agent but
paid  only to FMB  shall  be paid by FMB to the  Administrative  Agent,  for the
account of such Lender.  If a Settlement  Report  indicates that the increase in
the dollar  amount of a Lender's  Net  Outstandings  which is required to comply
with the first  sentence of Section 2.5.1  (Revolving  Loan) is exactly equal to
such  Lender's  Revolving  Credit  Pro Rata  Share of  amounts  received  by the
Administrative  Agent but paid only to FMB since the next  preceding  Settlement
Date, such Lender and the  Administrative  Agent, in their  respective  records,
shall apply such Lender's Revolving Credit Pro Rata Share of such amounts to the
increase in such Lender's Net Outstandings.

                   (g) Return of  Payments.  If any  amounts  received by FMB in
respect of the  Obligations or the Agents'  Obligations are later required to be
returned  or  repaid  by FMB to the  Borrowers  or any  other  obligor  or their
respective  representatives  or successors in interest,  whether by court order,
settlement or otherwise,  in excess of the FMB's Revolving Credit Pro Rata Share
of all such amounts  required to be returned by all  Lenders,  each other Lender
shall,  upon demand by FMB with notice to the  Administrative  Agent, pay to the
Administrative  Agent for the account of FMB,  an amount  equal to the excess of
such Lender's

                                       41



<PAGE>






Revolving  Credit Pro Rata Share of all such amounts  required to be returned by
all Lenders over the amount, if any, returned directly by such Lender.

                   (h) Payments to Administrative Agent; Lenders.

                         (i) Payment by any Lender to the  Administrative  Agent
                    shall be made not later than 2:00 p.m. (Baltimore City Time)
                    on the Business Day such  payment is due,  provided  that if
                    such payment is due on demand by another Lender, such demand
                    is made on the  paying  Lender  not later  than  10:00  a.m.
                    (Baltimore  City Time) on such Business Day.  Payment by the
                    Administrative  Agent  to any  Lender  shall be made by wire
                    transfer,  promptly  following  the  Administrative  Agent's
                    receipt of funds for the  account of such  Lender and in the
                    type of funds received by the Administrative Agent, provided
                    that if the  Administrative  Agent receives such funds at or
                    prior  to  12:00  p.m.  noon  (Baltimore  City  Time),   the
                    Administrative  Agent shall pay such funds to such Lender by
                    2:00 p.m.  (Baltimore  City Time) on such Business Day. If a
                    demand for  payment is made  after the  applicable  time set
                    forth  above,  the  payment  due  shall be made by 2:00 p.m.
                    (Baltimore  City Time) on the first  Business Day  following
                    the date of such demand.

                         (ii) If a Lender shall,  at any time,  fail to make any
                    payment to the Administrative Agent required hereunder,  the
                    Administrative  Agent  may,  but shall not be  required  to,
                    retain  payments that would otherwise be made to such Lender
                    hereunder and apply such payments to such Lender's defaulted
                    obligations  hereunder,  at such time, and in such order, as
                    the Administrative Agent may elect in its sole discretion.

                         (iii) With  respect to the  payment of any funds  under
                    this Section 2.5.2, whether from the Administrative Agent to
                    a Lender or from a Lender to the  Administrative  Agent, the
                    party  failing to make full payment when due pursuant to the
                    terms hereof shall, upon demand by the other party, pay such
                    amount  together with interest on such amount at the Federal
                    Funds Rate.

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<PAGE>






                   2.5.3 Settlement of Other Obligations.

                   All other  amounts  received by the  Administrative  Agent on
account  of, or  applied  by the  Administrative  Agent to the  payment  of, any
Obligation owed to the Lenders (including,  without limitation,  Fees payable to
the Lenders and proceeds from the sale of, or other realization upon, all or any
part of any  collateral  following an Event of Default) that are received by the
Administrative  Agent not later  than  11:00  a.m.  (Baltimore  City  Time) on a
Business Day will be paid by the Administrative Agent to each Lender on the same
Business Day, and any such amounts that are received by the Administrative Agent
after 11:00 a.m. (Baltimore City Time) will be paid by the Administrative  Agent
to each Lender on the following  Business Day. Unless  otherwise  stated herein,
the Administrative Agent shall distribute Fees payable to the Lenders ratably to
the Lenders  based on each  Lender's  Revolving  Credit Pro Rata Share and shall
distribute proceeds from the sale of, or other realization upon, all or any part
of any collateral  following an Event of Default ratably to the Lenders based on
the amount of the Obligations then owing to each Lender.

                   2.5.4 Presumption of Payment.

                   Unless the  Administrative  Agent shall have received  notice
from a Lender prior to 12:00 p.m. noon  (Baltimore City Time) on the date of the
requested  date for the making of advances  under the  Revolving  Loan that such
Lender  will not make  available  to the  Administrative  Agent,  such  Lender's
Revolving  Credit Pro Rata Share of the  advances  to be made on such date,  the
Administrative  Agent may assume that such Lender has made such amount available
to the  Administrative  Agent on such date in  accordance  with this Section 2.5
(Settlement Among Lenders), and the Administrative Agent, in its sole discretion
may, in reliance upon such  assumption,  make available to the Borrowers on such
date a corresponding amount on behalf of such Lender.

                   If and to the  extent  such  Lender  shall  not  have so made
available to the Administrative Agent its Revolving Credit Pro Rata Share of the
advances  under the  Revolving  Loan made on such date,  and the  Administrative
Agent shall have so made  available to the Borrowers a  corresponding  amount on
behalf of such Lender,  such Lender shall, on demand,  pay to the Administrative
Agent such corresponding amount,  together with interest thereon, at the Federal
Funds Rate, for each day from the date such corresponding amount shall have been
so available by the  Administrative  Agent to the Borrowers  until the date such
amount shall have been repaid to the Administrative Agent. Such Lender shall not
be  entitled  to  payment of any  interest  which  accrues  on the  amount  made
available by the  Administrative  Agent to the Borrowers for the account of such
Lender until such time as such Lender  reimburses the  Administrative  Agent for
such amount, together with interest thereon, as provided in this Section 2.5.4.

                   A certificate of the  Administrative  Agent  submitted to any
Lender with  respect to any amounts  owing to the  Administrative  Agent by such
Lender  under this Section 2.5 shall be  conclusive  and binding on such Lender,
absent  manifest  error.  If such  Lender  does  not  pay  such  amounts  to the
Administrative Agent promptly upon the Administrative Agent's

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<PAGE>






demand,  the  Administrative  Agent shall promptly  notify the Borrowers of such
Lender's failure to make payment, and the Borrowers shall immediately repay such
amounts to the Administrative  Agent,  together with accrued interest thereon at
the applicable rate on the Revolving  Loan, all without  prejudice to the rights
and remedies of the Administrative  Agent against any defaulting Lender. Any and
all amounts due and payable to the  Administrative  Agent by the Borrowers under
this  Section 2.5  constitute  and shall be part of the  Administrative  Agent's
Obligations.

                   Unless the  Administrative  Agent shall have received  notice
from  the  Borrowers  prior  to the  date on  which  any  payment  is due to the
Administrative  Agent that the Borrowers will not make such payment in full, the
Administrative  Agent may assume that the  Borrowers  have made such  payment in
full to the Administrative  Agent on such date and the  Administrative  Agent in
its  sole  discretion  may,  in  reliance  upon  such  assumption,  cause  to be
distributed  to each Lender on such due date an amount  equal to the amount then
due such Lender.  If and to the extent the Borrowers shall not have so made such
payment in full to the Administrative  Agent and the Administrative  Agent shall
have  distributed  to any Lender all or any portion of such amount,  such Lender
shall repay to the  Administrative  Agent on demand the amount so distributed to
such Lender,  together with interest thereon at the Federal Funds Rate, for each
day from the date such amount is  distributed to such Lender until the date such
Lender repays such amount to the Administrative Agent.


                                   ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

     Section 3.1 Representations and Warranties.

     The Borrowers,  for themselves and for each other, represent and warrant to
the Administrative Agent and the Lenders, as follows:

              3.1.1 Standing.

              Each Borrower (a) is duly  organized,  and existing under the laws
of the state in which it is organized, (b) has the power to own its property and
to carry on its  business as now being  conducted  and is duly  qualified  to do
business and is in good standing in each  jurisdiction in which the character of
the properties  owned or leased by it therein or in which the transaction of its
business makes such qualification necessary.

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<PAGE>






              3.1.2 Power and Authority.

              Each  Borrower has full power and authority to execute and deliver
this  Agreement,  and the other  Financing  Documents to which it is a party, to
make the  borrowings  and request  Letters of Credit under this Agreement and to
incur and  perform  the  Obligations  whether  under this  Agreement,  the other
Financing Documents or otherwise,  all of which have been duly authorized by all
proper and necessary action. No consent or approval of shareholders, partners or
any  creditors  of  either  Borrower,  and  no  consent,   approval,  filing  or
registration with or notice to any Governmental  Authority on the part of either
Borrower,  is required as a condition to the  execution,  delivery,  validity or
enforceability of this Agreement,  or any of the other Financing  Documents,  or
the performance by either Borrower of the Obligations.

              3.1.3 Binding Agreements.

              This  Agreement  and the other  Financing  Documents  executed and
delivered  by the  Borrowers  have been  properly  executed  and  delivered  and
constitute  the valid and legally  binding  obligations of the Borrowers and are
fully  enforceable  against  each of the  Borrowers  in  accordance  with  their
respective terms, subject to bankruptcy, insolvency, reorganization,  moratorium
and other laws of general  applications  affecting  the rights and  remedies  of
creditors and secured parties,  and general  principles of equity  regardless of
whether applied in a proceeding in equity or at law.

              3.1.4 No Conflicts.

              Neither the  execution,  delivery and  performance of the terms of
this Agreement or of any of the other Financing Documents executed and delivered
by either Borrower nor the consummation of the transactions contemplated by this
Agreement will conflict with,  violate or be prevented by (a) either  Borrower's
organizational  documents,  (b) any existing  mortgage,  indenture,  contract or
agreement binding on either Borrower or affecting its property, or (c) any Laws.

              3.1.5 No Defaults, Violations.

              (a) No Default or Event of Default has occurred and is continuing.

              (b) None of the  Borrowers is in default  under or with respect to
any obligation  under any existing  mortgage,  indenture,  contract or agreement
binding on it or affecting its property in any respect which could be materially
adverse to the business,  operations,  property or financial condition of either
Borrower,  or which  could  materially  adversely  affect the  ability of either
Borrower to perform its obligations  under this Agreement or the other Financing
Documents, to which either Borrower is a party.

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<PAGE>






              3.1.6 Compliance with Laws.

              None of the  Borrowers  is in  violation  of any  applicable  Laws
(including,  without limitation,  any Laws relating to employment practices,  to
environmental,  occupational and health standards and controls) or order,  writ,
injunction,  decree or  demand of any  court,  arbitrator,  or any  Governmental
Authority  affecting either Borrower or any of its properties,  the violation of
which,  considered  in the  aggregate,  could  materially  adversely  affect the
business, operations or properties of either Borrower.

              3.1.7 Margin Stock.

              None of the proceeds of the Revolving Loan will be used,  directly
or indirectly,  by either Borrower for the purpose of purchasing or carrying, or
for the purpose of reducing or retiring any  indebtedness  which was  originally
incurred  to  purchase or carry,  any  "margin  security"  within the meaning of
Regulation  G (12 CFR Part  207),  or  "margin  stock"  within  the  meaning  of
Regulation U (12 CFR Part 221), of the Board of Governors of the Federal Reserve
System or for any other purpose which might make the  transactions  contemplated
in this Agreement a "purpose  credit" within the meaning of said Regulation G or
Regulation  U, or cause this  Agreement to violate any other  regulation  of the
Board of Governors of the Federal Reserve System or the Securities  Exchange Act
of 1934 or the Small Business  Investment Act of 1958, as amended,  or any rules
or regulations promulgated under any of such statutes.

              3.1.8 Investment Company Act; Margin Securities.

              None of the Borrowers is an investment  company within the meaning
of the  Investment  Company  Act of 1940,  as  amended,  nor is it,  directly or
indirectly,  controlled  by or  acting  on  behalf  of any  Person  which  is an
investment  company within the meaning of said Act.  Neither of the Borrowers is
engaged principally,  or as one of its important activities,  in the business of
extending  credit for the purpose of  purchasing or carrying  "margin  security"
within the meaning of Regulation G (12 CFR Part 207),  or "margin  stock" within
the meaning of  Regulation U (12 CFR Part 221), of the Board of Governors of the
Federal Reserve System.

              3.1.9 Litigation.

              Except as otherwise  disclosed on Schedule  3.1.9  attached to and
made  a  part  of  this  Agreement,   there  are  no  proceedings,   actions  or
investigations pending or, so far as either Borrower knows, threatened before or
by any court, arbitrator or any Governmental Authority which, in any one case or
in the aggregate,  if determined  adversely to the interests of either Borrower,
would have a material  adverse  effect on the  business,  properties,  condition
(financial  or  otherwise)  or  operations,  present or  prospective,  of either
Borrower.

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<PAGE>






              3.1.10 Financial Condition.

              The  consolidated  financial  statements  of the  Borrowers  dated
December 31, 1998,  are  complete and correct and fairly  present the  financial
position  of each of the  Borrowers  and the  results  of their  operations  and
transactions  in  their  surplus  accounts  as of the  date  and for the  period
referred  to and have  been  prepared  in  accordance  with  GAAP  applied  on a
consistent  basis  throughout  the period  involved.  There are no  liabilities,
direct or indirect,  fixed or contingent,  of either  Borrower as of the date of
such  financial  statements  which  are not  reflected  therein  or in the notes
thereto.  There  has  been no  adverse  change  in the  financial  condition  or
operations of either Borrower since the date of such financial statements and to
the Borrowers'  knowledge no such adverse change is pending or threatened.  None
of the Borrowers has guaranteed the obligations of, or made any investment in or
advances to, any Person, except as disclosed in such financial statements.

              3.1.11 Full Disclosure.

              The financial  statements referred to in Section 3.1.10 (Financial
Condition)  of this  Agreement,  the  Financing  Documents  (including,  without
limitation,  this  Agreement),  and  the  statements,  reports  or  certificates
furnished by either Borrower in connection  with the Financing  Documents (a) do
not contain any untrue  statement of a material fact and (b) when taken in their
entirety,  do not omit  any  material  fact  necessary  to make  the  statements
contained  therein  not  misleading.  There is no fact known to either  Borrower
which  such  Borrower  has not  disclosed  to the  Administrative  Agent and the
Lenders  in  writing  prior to the date of this  Agreement  with  respect to the
transactions  contemplated  by the  Financing  Documents  which  materially  and
adversely  affects or in the future  could,  in the  reasonable  opinion of that
Borrower  materially  adversely  affect the  condition,  financial or otherwise,
results of operations, business, or assets of either Borrower.

              3.1.12 Indebtedness for Borrowed Money.

              Except for the Obligations and the Agents'  Obligations and except
as set forth in Schedule  3.1.12  attached to and made a part of this Agreement,
the Borrowers have no Indebtedness for Borrowed Money. The Administrative  Agent
has received photocopies of all promissory notes evidencing any Indebtedness for
Borrowed  Money  set  forth  in  Schedule  3.1.12,  together  with  any  and all
subordination agreements, other agreements,  documents, or instruments securing,
evidencing,  guarantying  or  otherwise  executed and  delivered  in  connection
therewith.

                                       47



<PAGE>






              3.1.13 Taxes.

              Each of the Borrowers has filed all returns, reports and forms for
Taxes which,  to the knowledge of the Borrowers,  are required to be filed,  and
has paid all Taxes as shown on such returns or on any assessment received by it,
to the extent  that such Taxes have  become  due,  unless and to the extent only
that such Taxes, assessments and governmental charges are currently contested in
good faith and by appropriate  proceedings by a Borrower, such Taxes are not the
subject of any Liens other than Permitted Liens, and adequate  reserves therefor
have been  established  as  required  under  GAAP.  All tax  liabilities  of the
Borrowers  were as of the date of audited  financial  statements  referred to in
Section 3.1.10 (Financial  Condition),  and are now,  adequately provided for on
the books of the Borrowers,  as appropriate.  No tax liability has been asserted
by the Internal  Revenue Service or any state or local authority  against either
Borrower for Taxes in excess of those already paid.

              3.1.14 ERISA.

              With respect to any Plan that is maintained or  contributed  to by
the Borrower and/or by any Commonly  Controlled  Entity or as to which either of
the  Borrowers  retains  material   liability:   (a)  no  "accumulated   funding
deficiency"  as defined in Code ss.412 or ERISA ss.302 has occurred,  whether or
not that accumulated funding deficiency has been waived; (b) no Reportable Event
has occurred  other than events for which  reporting has been waived or that are
unlikely to result in material  liability  for either of the  Borrowers;  (c) no
termination  of any plan subject to Title IV of ERISA has occurred;  (d) neither
the  Borrower  nor any  Commonly  Controlled  Entity has  incurred  a  "complete
withdrawal"  within the meaning of ERISA  ss.4203 from any  Multi-employer  Plan
that is likely to result in material liability for one or more of the Borrowers;
(e) neither the  Borrower  nor any  Commonly  Controlled  Entity has  incurred a
"partial  withdrawal"  within the meaning of ERISA  ss.4205  with respect to any
Multi-employer  Plan that is likely to result in material  liability  for one or
more of the Borrowers;  (f) no Multi-employer  Plan to which the Borrower or any
Commonly  Controlled  Entity has an obligation to contribute is to the knowledge
of the Borrowers,  in  "reorganization"  within the meaning of ERISA ss.4241 nor
has notice been received by the Borrower or any Commonly  Controlled Entity that
such a Multi-employer Plan will be placed in "reorganization".

              3.1.15 Title to Properties.

              The  Borrowers  have  good  and  marketable  title to all of their
respective properties,  including, without limitation, the properties and assets
reflected  in  the  balance  sheets  described  in  Section  3.1.10   (Financial
Condition).  The Borrowers have legal, enforceable and uncontested rights to use
freely such property and assets. The Borrowers represent and warrant that either
one of the  Borrowers or a Wholly Owned  Subsidiary  of one of the Borrowers has
good and marketable title to each of the Unencumbered  Properties free and clear
of any liens other than the Permitted Liens and the unrecorded Deeds of Trust.

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<PAGE>






              3.1.16  Presence of Hazardous  Materials  or  Hazardous  Materials
Contamination.

              To the  best  of  each  Borrower's  knowledge,  (a)  no  Hazardous
Materials  are located on any real  property  owned,  controlled  or operated by
either  Borrower  or  for  which  either  Borrower  is,  or is  claimed  to  be,
responsible, except for reasonable quantities of necessary supplies and products
for use by a Borrower or its tenants in the ordinary  course of its current line
of business and stored,  used and disposed in accordance with  applicable  Laws;
and (b) no property  owned,  controlled  or  operated by either  Borrower or for
which either Borrower has, or is claimed to have,  responsibility  has ever been
used as a manufacturing,  storage,  or dump site for Hazardous  Materials nor is
affected by Hazardous Materials Contamination at any other property.

              3.1.17 Year 2000 Representations and Warranties.

              Each of the  Borrowers  represents  and warrants to the Agents and
the Lenders that the following  statements are true,  correct and complete as of
the date hereof, and as of the date of each advance of the Revolving Loan or the
issuance of any Letter of Credit hereunder:  (a) based on a comprehensive review
and  assessments  of its  systems  and  equipment  and  those  of  its  material
suppliers, vendors and customers, the Borrowers reasonably believe that the Year
2000 Problem, including costs of remediation, could not be expected to result in
a material adverse change in the financial  condition of the Borrowers from that
expressed in the financial  statements most recently  submitted by the Borrowers
prior to the date hereof;  (b) each of the  Borrowers  has  developed  plans for
preventing  the Year 2000  Problem  from  having a  material  impact  within its
operations,  and the  implementation of such plans,  including  testing,  are on
schedule in all material respects; and (c) the Borrowers have developed feasible
contingency plans to insure  uninterrupted and unimpaired  business operation in
the  event of  failure  of their  own  systems  or  equipment  or those of their
material  suppliers,  vendors or  customers  due to the Year 2000  Problem.  The
Borrowers  covenant and agree with the Agents and the Lenders that the Borrowers
shall  provide the Agents and the Lenders with any further  assurances as to the
Borrowers'  avoidance and  resolution of the Year 2000 Problem as the Agents and
the Lenders may request from the Borrowers from time to time.

     Section 3.2 Survival;  Updates of  Representations  and  Warranties.  
                 --------------------------------------------------------

     All  representations  and  warranties  contained  in or  made  under  or in
connection with this Agreement and the other  Financing  Documents shall survive
the  Closing  Date,  the  making of any  advance  under the  Revolving  Loan and
extension of credit made hereunder,  and the incurring of any other  Obligations
and shall be deemed to have been made at the time of each request for, and again
at the time the making of, each advance under the Revolving Loan or the issuance
of each Letter of Credit,  except that the  representations and warranties which
relate  to  financial  statements  which  are  referred  to  in  Section  3.1.10
(Financial  Condition),  shall  also be  deemed  to cover  financial  statements
furnished from time to time to the Administrative Agent and the Lenders pursuant
to Section 6.1.1 (Financial Statements).

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<PAGE>






                                   ARTICLE IV
                              CONDITIONS PRECEDENT

     Section 4.1 Conditions to the Initial Advance and Initial Letter of Credit.
                 --------------------------------------------------------------

     The making of the initial advance under the Revolving Loan and the issuance
of the initial  Letter of Credit is subject to the  fulfillment on or before the
Closing Date of the following  conditions  precedent in a manner satisfactory in
form and substance to the Administrative Agent and its counsel:

              4.1.1 Organizational Documents - Borrowers.

              The Administrative Agent shall have received for each Borrower (as
appropriate):

              (a) a certificate  of good standing  certified by the Secretary of
State, or other appropriate Governmental Authority, of the state of organization
of such Borrower;

              (b) a certified copy from the appropriate  Governmental  Authority
under which such  Borrower is organized,  of such  Borrower's  recorded  limited
partnership certificate and all recorded amendments thereto;

              (c) a  certificate  of  qualification  to  do  business  for  such
Borrower certified by the Secretary of State or other Governmental  Authority of
each state in which such Borrower conducts business;

              (d) a certificate dated as of the Closing Date by the Secretary or
an Assistant Secretary of Mid-Atlantic covering:

                    (i) true and complete  copies of Mid-  Atlantic's  corporate
               charter, bylaws, and all amendments thereto;

                    (ii)  true  and  complete   copies  of  the  resolutions  of
               Mid-Atlantic's  Board of Trustees  authorizing (A) the execution,
               delivery and  performance of the Financing  Documents to which it
               is a party, (B) the borrowings hereunder, and (C) the granting of
               the  Liens  contemplated  by this  Agreement  and  the  Financing
               Documents to which Mid-Atlantic is a party;

                    (iii)  the  incumbency,  authority  and  signatures  of  the
               officers of  Mid-Atlantic  authorized to sign this  Agreement and
               the other Financing  Documents to which Mid- Atlantic is a party;
               and

                    (iv) the identity of Mid-Atlantic's current

                                       50



<PAGE>






                  trustees.

              (e) a certificate of the general partners of MART, dated as of the
 Closing Date:

                    (i) stating that attached to the  certificate  is a true and
               complete  copy  of  MART's   Partnership   Agreement,   with  all
               amendments,    modifications,     restatements,    substitutions,
               extensions and renewals thereto;

                    (ii) authorizing (A) the execution, delivery and performance
               of the  Financing  Documents  to which  MART is a party,  (B) the
               borrowings  hereunder and any and all other Obligations,  (C) the
               granting  of the Liens  contemplated  by this  Agreement  and the
               Security  Documents to which MART is a party, and (D) any and all
               other actions or agreements taken with respect to the Obligations
               or any collateral by any general partner of MART at any time;

                    (iii)  setting  forth the  identity  and  signatures  of the
               general partners of MART and of other  Responsible  Officers then
               authorized  to  sign  this  Agreement  and  the  other  Financing
               Documents  and the  Security  Documents to which MART is a party;
               and

                    (iv)  identifying  MART's current  partners and other equity
               holders,  as  well  as  their  respective   percentage  ownership
               interests.

              4.1.2 Opinion of Borrowers' Counsel.

                    The  Administrative  Agent shall have received the favorable
opinion of counsel for the Borrowers  addressed to the Administrative  Agent and
the  Lenders  in  form  satisfactory  to  the   Administrative   Agent  and  the
Documentation Agent.

              4.1.3 Consents, Licenses, Approvals, Etc.

                    The  Administrative  Agent shall have received copies of all
consents,  licenses and  approvals,  required in connection  with the execution,
delivery,  performance,  validity and enforceability of the Financing Documents,
and such consents, licenses and approvals shall be in full force and effect.

                                       51



<PAGE>






              4.1.4  Notes.

                    The Administrative Agent shall have received for delivery to
each  of  the  Lenders  the  Revolving  Credit  Notes,  each  conforming  to the
requirements  hereof and executed by a Responsible  Officer of each Borrower and
attested by a duly authorized representative of each Borrower.

               4.1.5 Financing Documents.

                    Each   Borrower   shall  have  executed  and  delivered  the
Financing Documents to be executed by it.

               4.1.6 Unencumbered Properties.

                    (a) The Borrowers shall have delivered to the Agents and the
Lenders for each of the  Unencumbered  Properties  described  on Schedule  4.1.6
attached hereto and made a part hereof:

                         (i) evidence  satisfactory to the Administrative  Agent
                    regarding the current and past pollution  control  practices
                    at such real  property  in  connection  with the  discharge,
                    emission,  handling,  disposal  or  existence  of  Hazardous
                    Materials,  which may include, at the Administrative Agent's
                    request,  an  environmental  audit  of  such  real  property
                    prepared   by  a   person   or   firm   acceptable   to  the
                    Administrative Agent;

                         (ii)  an   unconditional   commitment   or  binder  for
                    mortgagee's   title   insurance   in  form   and   substance
                    satisfactory  to the  Administrative  Agent and  issued by a
                    title insurance company  satisfactory to the  Administrative
                    Agent;

                         (iii) a current survey  satisfactory in all respects to
                    the  Administrative  Agent,  prepared by a  registered  land
                    surveyor  or  engineer  satisfactory  to the  Administrative
                    Agent;

                         (iv) a  description  of  the  property  including  age,
                    location  and  Occupancy  Rate and a  structural  engineer's
                    report of the improvements;

                         (v) an operating  statement and rent roll for the three
                    (3) preceding  fiscal years (or portion  thereof that one of
                    the Borrowers or a Subsidiary  owned the real  property) and
                    the current  fiscal year  through  the fiscal  quarter  most
                    recently  ended,   prepared  by  a  Responsible  Officer  of
                    Mid-Atlantic;

                         (vi) an  operating  budget for the current  fiscal year
                    and a capital  expenditure  budget for the next  twelve (12)
                    months;

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<PAGE>






                         (vii) lease roll over schedule and lease abstracts;

                         (viii) a deed of  trust,  mortgage,  indemnity  deed of
                    trust or other lien instrument, as appropriate,  granting to
                    the  Administrative  Agent,  for the ratable  benefit of the
                    Lenders  with  respect to the  Obligations  and the  ratable
                    benefit  of  the  Agents   with   respect  to  the   Agents'
                    Obligations,  a first  lien on such real  property,  subject
                    only to the Permitted Liens  (individually a "Deed of Trust"
                    and collectively,  the "Deeds of Trust"). The Deeds of Trust
                    shall be held in  escrow  by the  Administrative  Agent  and
                    recorded only in accordance  with the terms of Section 7.2.5
                    (Recordation of Deeds of Trust);

                         (ix)  upon  request  of the  Administrative  Agent,  be
                    accompanied by a signed opinion of counsel  addressed to the
                    Administrative  Agent and each of the  Lenders,  in form and
                    substance satisfactory to the Administrative Agent, and from
                    counsel,  satisfactory to the Administrative Agent, licensed
                    to practice in the state where the subject real  property is
                    located;

                         (x) if the  property  is subject to a ground  lease,  a
                    copy of the  ground  lease and all  amendments  thereto,  as
                    recorded; and

                         (xi) such other information as the Administrative Agent
                    may reasonably request.

               4.1.7  Other Financing Documents.

                    In addition to the  Financing  Documents  to be delivered by
the  Borrowers,  the  Administrative  Agent shall have  received  the  Financing
Documents duly executed and delivered by Persons other than the Borrowers.

               4.1.8  Other Documents, Etc.

                    The  Administrative  Agent  shall have  received  such other
certificates,  opinions,  documents and instruments confirmatory of or otherwise
relating to the  transactions  contemplated  hereby as may have been  reasonably
requested by the Administrative Agent.

               4.1.9  Payment of Fees.

                    The Administrative Agent and the Lenders shall have received
payment of any Fees due on or before the Closing Date.

               4.1.10  Solvency.

                    The  Administrative  Agent shall have  received and approved
the Financial  Condition  Certificate in the form of EXHIBIT "C" attached hereto
and made a part hereof.

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<PAGE>






               4.1.11  Letters of Credit.

                    The Administrative Agent and the Lenders shall have received
and approved a list of all Letters of Credit  issued and  outstanding,  or to be
issued and outstanding, as of the Closing Date.

     Section 4.2  Conditions to all Extensions of Credit.
                  ---------------------------------------

                    The making of all advances  under the Revolving Loan and the
issuance  of all  Letters  of  Credit  are  subject  to the  fulfillment  of the
following conditions precedent in a manner satisfactory in form and substance to
the Administrative Agent and its counsel:

               4.2.1  Compliance.

                    Each  Borrower  shall  have  complied  and shall  then be in
compliance  with  all  terms,  covenants,  conditions  and  provisions  of  this
Agreement and the other Financing Documents that are binding upon it.

               4.2.2  Default.

                    There shall exist no Event of Default or Default hereunder.

               4.2.3  Representations and Warranties.

                    The  representations and warranties of each of the Borrowers
contained among the provisions of this Agreement shall be true and with the same
effect as though such  representations  and warranties had been made at the time
of the making of, and of the request for, each advance under the Revolving  Loan
or the issuance of each Letter of Credit,  except that the  representations  and
warranties which relate to financial statements which are referred to in Section
3.1.10 (Financial Condition), shall also be deemed to cover financial statements
furnished  from time to time to the  Administrative  Agent  pursuant  to Section
6.1.1 (Financial Statements).

               4.2.4  Adverse Change.

                    No adverse  change  shall  have  occurred  in the  condition
(financial or otherwise),  operations or business of either Borrower that would,
in the good faith judgment of the  Administrative  Agent,  materially impair the
ability of that Borrower to pay or perform any of the Obligations.

               4.2.5  Legal Matters.

                    All  legal  documents  incident  to each  advance  under the
Revolving   Loan  and  each  of  the  Letters  of  Credit  shall  be  reasonably
satisfactory to counsel for the Administrative Agent.

                                       54



<PAGE>






                                    ARTICLE V
                            UNENCUMBERED PROPERTIES.

     Section 5.1  Unencumbered Properties as of the Closing Date.
                  -----------------------------------------------

     The  Unencumbered  Properties  as of the date  hereof are those  properties
identified on Schedule 4.1.6 (Unencumbered Properties).

     Section 5.2   Addition of Unencumbered Properties

     Subsequent  to  the  date  hereof  the  Borrower  may  request  that  other
properties be included in the  Unencumbered  Properties and in conjunction  with
such request,  deliver to the Administrative Agent and each of the Lenders, each
of the items required  pursuant to Section 4.1.6  (Unencumbered  Properties) for
such real property. The Administrative Agent and the Lenders shall have a period
not to exceed  thirty  (30)  Business  Days  after  receipt  of all of the items
referred  to  in  Section  4.1.6   (Unencumbered   Properties)  to  review  such
submissions and determine  whether or not such real property will be included in
the Unencumbered  Properties.  If the Requisite Lenders approve the inclusion of
the real property in the  Unencumbered  Properties,  the real property  shall be
included.

     Section 5.3 Removal of Properties from the Unencumbered Properties.
                 -------------------------------------------------------

     The  Borrowers  shall provide to the  Administrative  Agent and the Lenders
notice not less than  thirty (30) days prior to the date they desire to have any
property  removed from the Unencumbered  Properties.  A property may cease to be
one of the  Unencumbered  Properties  provided  that (a) no  Default or Event of
Default  exists under the  Financing  Documents and the removal of such property
from the  Unencumbered  Properties  does not  result in a Default or an Event of
Default and (b) the Requisite  Lenders approve of the elimination of the subject
property from the Unencumbered Properties.


                                   ARTICLE VI
                           COVENANTS OF THE BORROWERS

     Section 6.1  Affirmative Covenants.

          So  long  as any of the  Obligations  or  Letters  of  Credit  (or the
     Commitments  therefor)  or the  Agents'  Obligations  shall be  outstanding
     hereunder,  the Borrowers  agree jointly and severally  with the Agents and
     the Lenders as follows:

               6.1.1  Financial Statements.

              The Borrowers  shall furnish to the  Administrative  Agent and the
Lenders:

                    (a) Annual Statements and Certificates.  The Borrowers shall
furnish to the Administrative Agent and the Lenders as soon as available, but in
no event  more than one  hundred  and  twenty  (120) days after the close of the
Borrowers' fiscal years, (i) a copy

                                       55



<PAGE>






of the annual  financial  statement in  reasonable  detail  satisfactory  to the
Administrative Agent relating to the Borrowers, prepared in accordance with GAAP
and  examined  and  audited  by   independent   certified   public   accountants
satisfactory  to the  Administrative  Agent,  which  financial  statement  shall
include a consolidated  and  consolidating  balance sheet of the Borrowers as of
the end of such fiscal year and  consolidated  and  consolidating  statements of
income,  cash flows and changes in shareholders equity of the Borrowers for such
fiscal  year,  and (ii) a  Compliance  Certificate,  in  substantially  the form
attached to this Agreement as EXHIBIT "B", containing a detailed  computation of
each  financial  covenant in this  Agreement  which is applicable for the period
reported  and a  certification  that no change has  occurred to the  information
provided  to the  Lenders  in  connection  with the  application  for the Credit
Facilities (except as set forth on any schedule attached to the  certification),
each prepared by a Responsible  Officer of the Borrowers in a format  acceptable
to the  Administrative  Agent and (iii) a management letter in the form prepared
by the Borrowers' independent certified public accountants.

                    (b) Quarterly  Statements  and  Certificates.  The Borrowers
shall furnish to the Administrative  Agent and the Lenders as soon as available,
but in no event more than forty five (45) days after the close of the Borrowers'
fiscal  quarters,  (i)  consolidated  and  consolidating  balance  sheets of the
Borrowers as of the close of such period, consolidated and consolidating income,
cash flows and changes in equity statements for such period, all as prepared and
certified  by  a  Responsible  Officer  of  the  Borrowers,   (ii)  consolidated
statements  of  operation,   occupancy  summaries,   leasing  activity  reports,
operating  statements  by profit  center and such other  financial  reports  and
information  as the  Administrative  Agent  may  require,  all as  prepared  and
certified  by a  Responsible  Officer of the  Borrowers  and (iii) a  Compliance
Certificate,  in substantially the form attached to this Agreement as EXHIBIT B,
containing a detailed  computation of each financial  covenant in this Agreement
which is applicable for the period reported and a certification that no material
adverse  change has  occurred  to the  information  provided  to the  Lenders in
connection with the application for the Credit  Facilities  (except as set forth
on any  schedule  attached  to the  certification),  prepared  by a  Responsible
Officer of or on behalf of each Borrowers in a format acceptable to the Lenders,
all as prepared and  certified by a  Responsible  Officer of the  Borrowers  and
accompanied  by a  certificate  of that  officer  stating  whether any event has
occurred which constitutes a Default or an Event of Default  hereunder,  and, if
so, stating the facts with respect thereto.

                    (c) Monthly Statements and Certificates. The Borrowers shall
furnish to the Administrative Agent and the Lenders as soon as available, but in
no event more than  thirty  (30) days after the close of the  Borrowers'  fiscal
months,  consolidated  statements of  operation,  occupancy  summaries,  leasing
activity reports, operating statements by profit center and such other financial
reports and information as the Administrative Agent may require, all as prepared
and certified by a Responsible Officer of the Borrowers.

                    (d)  Annual  Budget and  Projections.  The  Borrowers  shall
furnish to the Lender as soon as available,  but in no event later than the 10th
day before the end of each fiscal year:

                         (i) a consolidated and consolidating budget for

                                                       56



<PAGE>






                  the following fiscal year, and

                         (ii) a loan  usage  projection  on a  consolidated  and
                    consolidating basis.

                    (e) Additional Reports and Information.  The Borrowers shall
furnish to the  Administrative  Agent and the Lenders promptly,  such additional
information, reports or statements as the Administrative Agent and/or any of the
Lenders  may from time to time  reasonably  request  and  additional  Compliance
Certificates as required pursuant to Section 7.1.3 (Failure to Comply).

               6.1.2  Reports to SEC and to Stockholders.

                    The Borrowers will furnish to the  Administrative  Agent and
the Lenders,  promptly upon the filing or making thereof,  at least one (l) copy
of all  financial  statements,  reports,  notices and proxy  statements  sent by
either Borrower to its stockholders,  and of all regular and other reports filed
by either  Borrower  with any  securities  exchange or with the  Securities  and
Exchange  Commission.  Mid-Atlantic  shall at all times remain a publicly traded
company listed on a public stock exchange.

               6.1.3  Recordkeeping, Rights of Inspection, Etc.

                    (a) Each of the  Borrowers  shall  maintain  (i) a  standard
system of accounting in  accordance  with GAAP,  and (ii) proper books of record
and account in which full, true and correct entries are made of all dealings and
transactions in relation to its properties, business and activities.

                    (b)  Each  of  the   Borrowers   shall   permit   authorized
representatives of the Administrative Agent to review,  audit, check and inspect
the Borrowers'  books of record at any time with  reasonable  notice and to make
abstracts  and  photocopies  thereof,  and to discuss the affairs,  finances and
accounts of the  Borrowers,  with the officers,  directors,  employees and other
representatives of the Borrowers and their respective  accountants,  all at such
times during normal  business hours and other  reasonable  times and as often as
the Administrative Agent may reasonably request.

                    (c) Each of the Borrowers hereby irrevocably  authorizes and
directs all accountants and auditors  employed by either of the Borrowers at any
time  prior  to the  repayment  in  full  of the  Obligations  and  the  Agents'
Obligations to exhibit and deliver to the  Administrative  Agent and the Lenders
copies of any and all of the financial  statements,  trial balances,  management
letters, or other accounting records of any nature of either of the Borrowers in
the accountant's or auditor's possession,  and to disclose to the Administrative
Agent  and any of the  Lenders  any  information  they may have  concerning  the
financial  status and business  operations of either of the Borrowers.  Further,
the Borrowers each hereby authorize all  Governmental  Authorities to furnish to
the  Administrative  Agent and the  Lenders  copies of reports  or  examinations
relating to either of the Borrowers, whether made by the Borrowers or otherwise.

                                       57



<PAGE>






                    (d) Any and all costs and expenses incurred by, or on behalf
of,  the  Administrative  Agent in  connection  with the  conduct  of any of the
foregoing  shall be part of the  Enforcement  Costs and shall be  payable to the
Administrative Agent upon demand.

               6.1.4  REIT Existence.

                    Mid-Atlantic  shall  maintain its existence as a real estate
investment  trust  under  the  Internal  Revenue  Code in good  standing  in the
jurisdiction in which it is incorporated and in each other jurisdiction where it
is  required  to  register  or qualify to do business if the failure to do so in
such other  jurisdiction  might have a material adverse effect on the ability of
the Borrowers to perform the  Obligations  and the Agents'  Obligations,  on the
conduct  of  Mid-  Atlantic's  operations  or  on  the  Borrowers'  consolidated
financial condition.

               6.1.5  Partnership Existence.

                    MART shall  maintain its existence as a limited  partnership
in good  standing  in the  jurisdiction  in which it is formed and in each other
jurisdiction  where it is  required to register or qualify to do business if the
failure to do so in such other jurisdiction might have a material adverse effect
on the  ability of the  Borrowers  to perform  the  Obligations  and the Agents'
Obligations,   on  the  conduct  of  MART's  operations  or  on  the  Borrowers'
consolidated financial condition.

               6.1.6  Compliance with Laws.

                    Each of the Borrowers  shall comply with all applicable Laws
and  observe  the  valid   requirements   of   Governmental   Authorities,   the
noncompliance  with or the  nonobservance of which might have a material adverse
effect on the  ability of the  Borrowers  to  perform  the  Obligations  and the
Agents'  Obligations,  on the  conduct of the  Borrowers'  operations  or on the
Borrowers' consolidated financial condition.

               6.1.7  Preservation of Properties.

                    Each of the  Borrowers  will  at all  times  (a)  maintain,
preserve,  protect and keep its  properties,  whether  owned or leased,  in good
operating condition, working order and repair (ordinary wear and tear excepted),
and from time to time will make all proper repairs,  maintenance,  replacements,
additions and  improvements  thereto needed to maintain such  properties in good
operating  condition,  working order and repair,  and (b) do or cause to be done
all  things  necessary  to  preserve  and to keep in full  force and  effect its
material franchises, leases of real and personal property, trade names, patents,
trademarks  and permits which are necessary for the orderly  continuance  of its
business.

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               6.1.8  Line of Business.

                    Each of the  Borrowers  will,  and will  cause each of their
Subsidiaries  to,  continue  to engage  substantially  only in the  business  of
owning,  acquiring,  developing,  leasing and managing primarily neighborhood or
community shopping centers in the Middle Atlantic region of the United States.

               6.1.9  Insurance.

                    Each of the Borrowers will at all times maintain with "A" or
better rated  insurance  companies  such  insurance as is required by applicable
Laws and such other insurance,  in such amounts,  of such types and against such
risks, hazards, liabilities, casualties and contingencies as are usually insured
against in the same geographic areas by business entities engaged in the same or
similar business.  Without limiting the generality of the foregoing, each of the
Borrowers  will keep  adequately  insured all of its  property  against  loss or
damage  resulting from fire or other risks insured against by extended  coverage
and maintain  public  liability  insurance  against claims for personal  injury,
death or property damage occurring upon, in or about any properties  occupied or
controlled by it, or arising in any manner out of the  businesses  carried on by
it, all in such amounts not less than the Administrative  Agent shall reasonably
determine  from  time  to  time.  Each of the  Borrowers  shall  deliver  to the
Administrative Agent on the Closing Date (and thereafter on each date there is a
material  change in the  insurance  coverage)  a  certificate  of a  Responsible
Officer of the Borrowers  containing a detailed  list of the  insurance  then in
effect and stating the names of the insurance companies,  the types, the amounts
and rates of the insurance,  dates of the expiration  thereof and the properties
and risks covered thereby.  Within thirty (30) days after notice in writing from
the Administrative Agent, the Borrowers will obtain such additional insurance as
the Administrative Agent may reasonably request.

               6.1.10  Taxes.

                    Except to the extent that the validity or amount  thereof is
being  contested  in good  faith  and by  appropriate  proceedings,  each of the
Borrowers  will pay and  discharge all Taxes prior to the date when any interest
or penalty would accrue for the nonpayment thereof.  Each of the Borrowers shall
furnish to the Administrative  Agent at such times as the  Administrative  Agent
may require  proof  satisfactory  to the  Administrative  Agent of the making of
payments or deposits required by applicable Laws including,  without limitation,
payments or deposits with respect to amounts withheld by either of the Borrowers
from wages and salaries of employees  and amounts  contributed  by either of the
Borrowers  on account of federal and other  income or wage taxes and amounts due
under the Federal Insurance Contributions Act, as amended.

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               6.1.11  ERISA.

                    Each of the  Borrowers  will,  and  will  cause  each of its
Commonly Controlled  Entities to, comply with the funding  requirements of ERISA
with respect to Plans for its  respective  employees.  Neither of the  Borrowers
will  permit  with  respect  to any  Plan  (a)  any  prohibited  transaction  or
transactions  under ERISA or the Internal  Revenue Code,  which results,  or may
result, in any material  liability of the Borrower,  or (b) any Reportable Event
if, upon termination of the plan or plans with respect to which one or more such
Reportable  Events  shall  have  occurred,  there is or  would  be any  material
liability of the Borrower to the PBGC.  Upon the Lender's  request,  each of the
Borrowers will deliver to the Lender a copy of the most recent actuarial report,
financial statements and annual report completed with respect to any Plan.

              6.1.12 Notification of Events of Default and Adverse Developments.

                    Each   of  the   Borrowers   shall   promptly   notify   the
Administrative Agent upon obtaining knowledge of the occurrence of:

                    (a) any Event of Default;

                    (b) any Default;

                    (c) any litigation  instituted or threatened  against either
of the  Borrowers  and of the  entry of any  judgment  or Lien  (other  than any
Permitted  Liens)  against  any of the  assets  or  properties  of either of the
Borrowers where the claims against either Borrower exceed Five Hundred  Thousand
Dollars ($500,000) and are not covered by insurance;

                    (d) any  event,  development  or  circumstance  whereby  the
financial statements furnished hereunder fail in any material respect to present
fairly, in accordance with GAAP, the financial condition and operational results
of either of the Borrowers;

                    (e) any  judicial,  administrative  or  arbitral  proceeding
pending  against  either of the  Borrowers  and any  judicial or  administrative
proceeding  known by either of the  Borrowers to be  threatened  against  either
Borrower which, if adversely  decided,  could  materially  adversely  affect the
financial condition or operations (present or prospective) of either Borrower;

                    (f) the  receipt by either of the  Borrowers  of any notice,
claim or demand from any Governmental Authority which alleges that either of the
Borrowers  is in  violation of any of the terms of, or has failed to comply with
any applicable  Laws regulating its operation and business,  including,  but not
limited  to,  the  Occupational  Safety  and  Health  Act and the  Environmental
Protection Act; and

                    (g) any other  development  in the  business  or  affairs of
either of the Borrowers which may be materially adverse;

in each case describing in detail  satisfactory to the Administrative  Agent the
nature thereof

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and the action the Borrowers propose to take with respect thereto.

               6.1.13  Hazardous Materials; Contamination.

                    Each of the Borrowers agree to:

                    (a) give notice to the Administrative Agent immediately upon
acquiring  knowledge of the presence of any Hazardous Materials or any Hazardous
Materials  Contamination on any property owned, operated or controlled by either
Borrower  or for which  either  Borrower  is, or is claimed  to be,  responsible
(provided that such notice shall not be required for Hazardous  Materials placed
or stored on such property in accordance  with  applicable  Laws in the ordinary
course (including, without limitation, quantity) of a Borrower's or its tenant's
line of business expressly described in this Agreement), with a full description
thereof;

                    (b)  promptly  comply with any Laws  requiring  the removal,
treatment   or  disposal  of  Hazardous   Materials   or   Hazardous   Materials
Contamination and provide the Administrative Agent with satisfactory evidence of
such compliance;

                    (c) provide the  Administrative  Agent,  within  thirty (30)
days after a demand by the  Administrative  Agent, with a bond, letter of credit
or  similar  financial  assurance  evidencing  to  the  Administrative   Agent's
satisfaction that the necessary funds are available to pay the cost of removing,
treating,  and  disposing of such  Hazardous  Materials  or Hazardous  Materials
Contamination  and  discharging  any Lien which may be  established  as a result
thereof on any property owned,  operated or controlled by either Borrower or for
which either Borrower is, or is claimed to be, responsible; and

                    (d) as part of the Obligations,  defend,  indemnify and hold
harmless  the  Administrative  Agent,  each of the  Lenders  and  each of  their
respective  Administrative Agents, employees,  trustees,  successors and assigns
from any and all claims which may now or in the future  (whether before or after
the  termination  of this  Agreement) be asserted as a result of the presence of
any Hazardous Materials or any Hazardous Materials Contamination on any property
owned,  operated or controlled by either  Borrower for which either Borrower is,
or is claimed to be,  responsible.  Each Borrower  acknowledges  and agrees that
this  indemnification  shall survive the  termination  of this Agreement and the
Commitments and the payment and performance of all of the other Obligations.

               6.1.14  Financial Covenants.

                    (a) Corporate  Leverage Ratio.  The Borrowers shall maintain
at all  times  and  tested  as of the end of each  fiscal  quarter  a  Corporate
Leverage Ratio of less than or equal to fifty-five percent (55%).

                    (b) Interest Coverage Ratio. The Borrowers shall maintain at
all times and tested as of the end of each fiscal  quarter an Interest  Coverage
Ratio of equal to or greater than 2.0 to 1.0.

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                    (c)  Fixed  Charge  Coverage  Ratio.   The  Borrowers  shall
maintain  at all times and tested as of the end of each  fiscal  quarter a Fixed
Charge Coverage Ratio equal to or greater than 1.5 to 1.0.

                    (d)   Unencumbered   Leverage  Ratio.  The  Borrowers  shall
maintain  at all  times  and  tested  as of the end of each  fiscal  quarter  an
Unencumbered Leverage Ratio of less than or equal to fifty-five percent (55%).

                    (e)  Unencumbered  Interest  Coverage  Ratio.  The Borrowers
shall  maintain at all times and tested as of the end of each fiscal  quarter an
Unencumbered Interest Coverage Ratio of equal to or greater than 2.0 to 1.0.

                    (f) Unencumbered  Debt Service Coverage Ratio. The Borrowers
shall  maintain at all times and tested as of the end of each  fiscal  quarter a
ratio of Adjusted Unencumbered NOI for the most recent fiscal quarter annualized
divided by the Annual Debt Service on the Unsecured  Indebtedness of equal to or
greater than 1.5 to 1.0.

                    (g) Tangible Net Worth.  The Borrowers shall maintain at all
times and tested as of the end of each  fiscal  quarter a Tangible  Net Worth of
not less than $200,000,000 plus eighty percent (80%) of the net proceeds of each
public or private equity  offering of the Borrowers  subsequent to September 30,
1998.

                    (h) Secured Indebtedness Ratio. The Borrowers shall maintain
at all times and tested as of the end of each fiscal  quarter,  a total  Secured
Indebtedness of less than or equal to forty percent (40%) of Total Asset Value.

               6.1.15  Investments in Real Estate Assets.

                    Each of the Borrowers agree that investments in:

                    (a) real estate Assets other than anchored  neighborhood  or
community shopping centers shall at no time have an aggregate value in excess of
ten percent (10%) of Total Asset Value;

                    (b)  new  development  projects  shall  at no  time  have an
aggregate value in excess of fifteen percent (15%) of Total Asset Value;

                    (c) raw land  shall at no time  have an  aggregate  value in
excess of five percent (5%) of Total Asset Value; and

                    (d)  unconsolidated  joint ventures shall at no time have an
aggregate value in excess of ten percent (10%) of Total Asset Value.

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                    6.1.16 Deeds of Trust a Contemporaneous Exchange;  Financial
Condition Certificates.

                    The Deeds of Trust are a transfer of the owner's interest in
the  applicable  real  property as of the date  delivered to the  Administrative
Agent.  As Deeds of Trust are delivered  subsequent  to the Closing  Date,  such
Deeds  of  Trust  are not  being  delivered  or  transferred  on  account  of an
antecedent  debt;  the  Deeds  of Trust  are  intended  to be a  contemporaneous
exchange for new value.  The Borrowers shall deliver,  or cause to be delivered,
to the Administrative  Agent, a Financial  Condition  Certificate in the form of
EXHIBIT  "D"  attached  hereto  and  made a part  hereof  simultaneous  with the
delivery of any Deed of Trust after the date hereof.

                    6.1.17 Deeds of Trust.

                    Each Deed of Trust to be  executed  and  delivered  pursuant
hereto shall:

                    (a)  be  in  form   and   substance   satisfactory   to  the
Administrative Agent and the Documentation Agent; and

                    (b) upon  recording,  create a first  priority  Lien in such
real property in favor of the  Administrative  Agent, for the ratable benefit of
the Lenders  with respect to the  Obligations  and for the benefit of the Agents
with respect to the Agents' Obligations, subject only to Permitted Liens, zoning
ordinances, and such other matters as the Administrative Agent may approve.

     Section 6.2 Negative Covenants.

         So  long  as any of the  Obligations  or  Letters  of  Credit  (or  the
Commitments therefor) or the Agents' Obligations shall be outstanding hereunder,
the  Borrowers  agree with the Agents and the  Lenders  that  without  the prior
written consent of the Administrative Agent:

                    6.2.1 Merger, Acquisition or Sale of Assets.

                    Neither  of the  Borrowers  will  enter  into any  merger or
consolidation  unless one of the Borrowers is the surviving  controlling  entity
and the  merger  or  consolidation  will not  cause a  violation  of any term or
condition  of this  Agreement.  Neither  of the  Borrowers  will  enter into any
amalgamation,  windup or  dissolve  themselves  (or  suffer any  liquidation  or
dissolution),  or sell, lease or otherwise dispose of any of its assets,  except
assets  disposed  of in the  ordinary  course of  business  prior to an Event of
Default and assets disposed of that, when aggregated with the assets disposed of
by both of the Borrowers  since the Closing  Date,  is less than twenty  percent
(20%) of the  Borrowers'  assets as of the  Closing  Date.  Any  consent  of the
Administrative  Agent to the  disposition  of any assets may be conditioned on a
specified use of the proceeds of disposition.

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                    6.2.2 Indebtedness.

                    Neither  of the  Borrowers  will  create,  incur,  assume or
suffer to exist any  Indebtedness for Borrowed Money or permit any Subsidiary to
do so, except:

                    (a) the Obligations;

                    (b) current accounts payable arising in the ordinary course;

                    (c) Indebtedness secured by Permitted Liens;

                    (d)  Indebtedness  of the  Borrowers  existing  on the  date
hereof and reflected on the financial  statements  furnished pursuant to Section
3.1.10 (Financial Condition); and

                    (e) Subordinated Debt and Subordinated Indebtedness.

                    6.2.3 Loans and Other Transactions.

                    Except as otherwise  provided in this Agreement,  neither of
the Borrowers  will, and nor will either of them permit any of its  Subsidiaries
to, (a) guaranty or otherwise become contingently liable for the Indebtedness or
obligations  of any Person (other than a  Subsidiary),  or (b) make any loans or
advances, or otherwise extend credit to any Person, except:

                         (i) any  advance to an officer  or  employee  of either
                    Borrower or any Subsidiary, provided that the maximum amount
                    of any such  advance  to one  individual  shall  not  exceed
                    $150,000 and the  aggregate  amount of all such  advances by
                    all of the  Borrowers  and  their  Subsidiaries  (taken as a
                    whole) outstanding at any time shall not exceed Five Hundred
                    Thousand Dollars ($500,000);

                         (ii) the  endorsement  of  negotiable  instruments  for
                    deposit  or  collection  or  similar   transactions  in  the
                    ordinary course of business; and

                         (iii) loans to any  officers or  employees  pursuant to
                    MART's  Restricted  Stock  Plan so long as such loans in the
                    aggregate  shall not exceed  $2,150,000  outstanding  at any
                    time.

                    6.2.4 Distributions.

                    Neither  of  the  Borrowers  will,  or  permit  any  of  its
Subsidiaries  to, make  distributions  in excess ninety percent (90%) of diluted
FFO and  ninety-five  percent  (95%) of FAD for the most  recent four (4) fiscal
quarters;  provided,  however,  this limitation shall not preclude the Borrowers
from making the minimum distributions required to maintain REIT status under the
Internal Revenue Code.

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                    6.2.5 Liens.

                    Neither of the Borrowers will (a) create,  incur,  assume or
suffer to exist any Lien upon any of its properties or assets, whether now owned
or hereafter  acquired,  or permit any Subsidiary so to do, except for Permitted
Liens and (b) allow or suffer to exist the failure of any Lien  described in the
Security Documents to attach to, and/or remain at all times perfected on, any of
the property described in the Security Documents.

                    6.2.6 Transactions with Affiliates.

                    Neither of the Borrowers nor any of their  Subsidiaries will
enter into or  participate in any  transaction  with any Affiliate or, except in
the ordinary  course of business,  with the officers,  directors,  employees and
other representatives of either Borrower and/or any Subsidiary.

                    6.2.7 Other Businesses.

                    Neither of the Borrowers nor any of their  Subsidiaries will
engage  directly or  indirectly  in any business  other than its current line of
business described elsewhere in this Agreement.

                    6.2.8 ERISA Compliance.

                    Neither of the Borrowers nor any Commonly  Controlled Entity
shall:  (a)  engage in or permit any  "prohibited  transaction"  (as  defined in
ERISA);  (b) cause any  "accumulated  funding  deficiency"  as  defined in ERISA
and/or the Internal  Revenue  Code;  (c)  terminate any pension plan in a manner
which  could  result  in the  imposition  of a lien on the  property  of  either
Borrower  pursuant to ERISA;  (d) terminate or consent to the termination of any
Multi-employer  Plan; or (e) incur a complete or partial withdrawal with respect
to any Multi- employer Plan.

                    6.2.9 Prohibition on Hazardous Materials.

                    Neither of the Borrowers  shall place,  manufacture or store
or permit to be placed,  manufactured  or stored any Hazardous  Materials on any
property owned,  operated or controlled by either Borrower,  or any Affiliate of
either of the  Borrowers,  or for which  either  Borrower,  or any  Affiliate of
either of the Borrowers, is responsible other than Hazardous Materials placed or
stored on such  property in  accordance  with  applicable  Laws in the  ordinary
course of a Borrower's business expressly described in this Agreement.

                    6.2.10 Amendments.

                    Neither of the Borrowers will amend or terminate or agree to
amend or terminate any ground lease governing any of the Unencumbered Properties
or consent to or waive any material provisions thereof.

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                    6.2.11 Method of Accounting; Fiscal Year.

                    Neither of the Borrowers shall:

                    (a)  change  the  method  of  accounting   employed  in  the
preparation of any financial  statements  furnished to the Administrative  Agent
under the provisions of Section 6.1.1 (Financial Statements), unless required to
conform  to GAAP and on the  condition  that the  Borrowers'  accountants  shall
furnish such  information as the  Administrative  Agent may request to reconcile
the changes with the Borrowers' prior financial statements

                    (b) change its fiscal  year from a year  ending on  December
31.


                                   ARTICLE VII
                         DEFAULT AND RIGHTS AND REMEDIES

     Section 7.1           Events of Default.

         The  occurrence  of any  one or  more  of the  following  events  shall
constitute an "Event of Default" under the provisions of this Agreement:

                    7.1.1 Failure to Pay.

                    The failure of the  Borrowers to pay any of the  Obligations
or the Agents'  Obligations  as and when due and payable in accordance  with the
provisions  of this  Agreement,  the Notes  and/or  any of the  other  Financing
Documents and such failure continues for five (5) days.

                    7.1.2 Breach of Representations and Warranties.

                    Any  representation or warranty made in this Agreement or in
any report, statement, schedule, certificate,  opinion (including any opinion of
counsel for the Borrowers),  financial  statement or other document furnished in
connection with this Agreement,  any of the other  Financing  Documents,  or the
Obligations,  shall  prove to have been false or  misleading  when made (or,  if
applicable, when reaffirmed) in any material adverse respect.

                    7.1.3 Failure to Comply with Specific Covenants.

                    The failure of the  Borrowers to perform,  observe or comply
with any covenant  contained in Section 6.1.14  (Financial  Covenants),  Section
6.1.15  (Investments  in Real Estate  Assets) or Section  6.2.5 (Liens) and such
failure is not corrected and the Borrower in compliance  with such covenant,  as
evidenced   and  certified  by  the   Borrowers'   Compliance   Certificate   in
substantially  the form attached to this Agreement as Exhibit B, dated not later
than  thirty  (30)  days  after  notice  from  the  Administrative  Agent to the
Borrowers.

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                    7.1.4 Failure to Comply with Other Covenants.

                    The failure of the Borrowers to materially perform,  observe
or comply with any covenant,  condition or agreement contained in this Agreement
and not  otherwise  specifically  covered in this  ARTICLE VII and such  failure
continues  uncured  for a period  of  thirty  (30) days  after  notice  from the
Administrative Agent to the Borrowers,  unless the nature of the failure is such
that (a) it cannot be cured within the thirty (30) day period, (b) the Borrowers
institute  corrective  action  within  the  thirty  (30) day  period and (c) the
Borrowers complete the cure within a period of an additional thirty (30) days.

                    7.1.5   Default   Under   Other   Financing   Documents   or
Obligations.

                    A default  shall  occur  under  any of the  other  Financing
Documents or under any other  Obligations,  and such default is not cured within
any applicable grace period provided therein.

                    7.1.6 Receiver; Bankruptcy.

                    Either  Borrower  or any  Subsidiary  shall (a) apply for or
consent to the appointment of a receiver, trustee or liquidator of itself or any
of its  property,  (b) admit in writing its  inability  to pay its debts as they
mature,  (c) make a general  assignment  for the  benefit of  creditors,  (d) be
adjudicated a bankrupt or insolvent, (e) file a voluntary petition in bankruptcy
or a  petition  or an answer  seeking  or  consenting  to  reorganization  or an
arrangement   with   creditors  or  to  take   advantage   of  any   bankruptcy,
reorganization, insolvency, readjustment of debt, dissolution or liquidation law
or statute, or an answer admitting the material  allegations of a petition filed
against it in any proceeding  under any such law, or take  corporate  action for
the purposes of effecting any of the  foregoing,  or (f) by any act indicate its
consent  to,  approval  of  or  acquiescence  in  any  such  proceeding  or  the
appointment of any receiver of or trustee for any of its property, or suffer any
such  receivership,  trusteeship  or proceeding to continue  undischarged  for a
period of sixty (60) days,  or (g) by any act indicate its consent to,  approval
of or  acquiescence  in any order,  judgment or decree by any court of competent
jurisdiction or any Governmental  Authority  enjoining or otherwise  prohibiting
the operation of a material  portion of either  Borrower's  or any  Subsidiary's
business or the use or disposition of a material portion of either Borrower's or
any Subsidiary's assets.

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<PAGE>






                    7.1.7 Involuntary Bankruptcy, etc.

                    (a) An order for relief shall be entered in any  involuntary
case brought  against  either  Borrower or any  Subsidiary  under the Bankruptcy
Code,  or (b) any such case shall be commenced  against  either  Borrower or any
Subsidiary and shall not be dismissed within sixty (60) days after the filing of
the petition, or (c) an order, judgment or decree under any other Law is entered
by any court of competent jurisdiction or by any other Governmental Authority on
the  application  of a  Governmental  Authority or of a Person other than either
Borrower or any Subsidiary (i) adjudicating  either Borrower,  or any Subsidiary
bankrupt or insolvent,  or (ii) appointing a receiver,  trustee or liquidator of
either  Borrower  or of any  Subsidiary,  or of a  material  portion  of  either
Borrower's  or any  Subsidiary's  assets,  or (iii)  enjoining,  prohibiting  or
otherwise  limiting the operation of a material portion of either  Borrower's or
any  Subsidiary's  business or the use or disposition  of a material  portion of
either Borrower's or any Subsidiary's assets, and such order, judgment or decree
continues  unstayed and in effect for a period of thirty (30) days from the date
entered.

                    7.1.8 Judgment.

                    Unless   adequately   insured   in   the   opinion   of  the
Administrative  Agent,  the entry of a final  judgment  for the payment of money
involving more than $100,000 against either Borrower or any Subsidiary,  and the
failure by such  Borrower or such  Subsidiary to discharge the same, or cause it
to be discharged,  within thirty (30) days from the date of the order, decree or
process under which or pursuant to which such judgment was entered, or to secure
a stay of execution pending appeal of such judgment.

                    7.1.9 Default Under Other Borrowings.

                    Subject  to the  provisions  of  Section  9.19  (Default  by
Related  Entities),  default shall be made with respect to any  Indebtedness for
Borrowed Money of either of the Borrowers in excess of $250,000 in the aggregate
if the effect of such default is to accelerate the maturity of such Indebtedness
for  Borrowed  Money or to permit the holder or obligee  thereof or other  party
thereto to cause such Indebtedness for Borrowed Money to become due prior to its
stated maturity.

                    7.1.10 Challenge to Agreements.

                    Either  Borrower  shall  challenge  the validity and binding
effect of any  provision  of any of the  Financing  Documents or shall state its
intention to make such a challenge of any of the  Financing  Documents or any of
the Financing  Documents shall for any reason (except to the extent permitted by
its express terms) cease to be effective.

                    7.1.11 Material Adverse Change.

                    The Administrative Agent, in its sole discretion, determines
in good faith that a material  adverse  change  has  occurred  in the  financial
condition of either of the Borrowers.

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                    7.1.12 Impairment of Position.

                    The Administrative Agent, in its sole discretion, determines
in good faith that an event has occurred  which  impairs the prospect of payment
of any of the Obligations.

                    7.1.13  Liquidation,  Termination,  Dissolution,  Change  in
Management, etc.

                    Either Borrower shall  liquidate,  dissolve or terminate its
existence or any change  occurs in the executive  management of either  Borrower
without the prior written consent of the Administrative Agent.

     Section 7.2 Remedies.

         Upon  the   occurrence  of  any  Default  or  Event  of  Default,   the
Administrative  Agent may, in the exercise of its sole and  absolute  discretion
from time to time, and shall, at the direction of the Requisite Lenders,  at any
time  thereafter  exercise any one or more of the  following  rights,  powers or
remedies.

                    7.2.1 Acceleration.

                    The  Administrative  Agent  may  declare  any  or all of the
Obligations  to  be  immediately  due  and  payable,   notwithstanding  anything
contained in this  Agreement or in any of the other  Financing  Documents to the
contrary,  without  presentment,  demand,  protest,  notice  of  protest  or  of
dishonor, or other notice of any kind, all of which the Borrowers hereby waive.

                    7.2.2 Further Advances.

                    The  Administrative  Agent  may  from  time to time  without
notice to the Borrowers suspend,  terminate or limit any further advances, loans
or other extensions of credit under the Commitments, under this Agreement and/or
under any of the other Financing Documents. So long as (a) a Default pursuant to
Section 7.1.3  (Failure to Comply with Specific  Covenants)  exists and prior to
delivery of the Compliance  Certificate required pursuant to such Section or (b)
a Default  exists  pursuant  to  Section  7.1.4  (Failure  to Comply  with Other
Covenants),  no further advances,  loans or other extensions of credit requested
by the Borrowers under the  Commitments,  under this Agreement and/or any of the
other  Financing  Documents  shall be made.  Further,  upon the occurrence of an
Event of Default or Default  specified in Sections 7.1.6 (Receiver;  Bankruptcy)
or 7.1.7  (Involuntary  Bankruptcy,  etc.), the Commitments and any agreement in
any of the  Financing  Documents to provide  additional  credit  and/or to issue
Letters of Credit shall immediately and  automatically  terminate and the unpaid
principal  amount of the Notes (with  accrued  interest  thereon)  and all other
Obligations then outstanding,  shall immediately  become due and payable without
further action of any kind and without presentment, demand, protest or notice of
any kind, all of which are hereby expressly waived by the Borrowers.

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                    7.2.3 Performance by Administrative Agent.

                    If the Borrowers  shall fail to pay the  Obligations and the
Agents' Obligations or otherwise fail to perform,  observe or comply with any of
the conditions,  covenants,  terms, stipulations or agreements contained in this
Agreement or any of the other  Financing  Documents,  the  Administrative  Agent
without notice to or demand upon the Borrowers and without  waiving or releasing
any of the  Obligations  or any Default or Event of  Default,  may (but shall be
under no obligation to) at any time thereafter make such payment or perform such
act for the account and at the expense of the Borrowers,  and may enter upon the
premises of the Borrowers  for that purpose and take all such action  thereon as
the Administrative  Agent may consider necessary or appropriate for such purpose
and each of the Borrowers hereby irrevocably  appoints the Administrative  Agent
as its attorney-in-fact to do so, with power of substitution, in the name of the
Administrative  Agent, in the name of any or all of the Lenders,  or in the name
of any or all of the  Borrowers  or  otherwise,  for the use and  benefit of the
Administrative  Agent,  but at the cost and expense of the Borrowers and without
notice to the  Borrowers.  All sums so paid or  advanced  by the  Administrative
Agent  together  with  interest  thereon  from the date of  payment,  advance or
incurring  until  paid in full  at the  Post-Default  Rate  and  all  costs  and
expenses,  shall be deemed part of the Enforcement  Costs,  shall be paid by the
Borrowers to the Administrative Agent on demand, and shall constitute and become
a part of the Administrative Agent's Obligations.

                    7.2.4 Other Remedies.

                    The  Administrative  Agent may from time to time  proceed to
protect or  enforce  the rights of the  Administrative  Agent  and/or any of the
Lenders by an action or actions at law or in equity or by any other  appropriate
proceeding,  whether  for  the  specific  performance  of any  of the  covenants
contained in this Agreement or in any of the other Financing  Documents,  or for
an injunction against the violation of any of the terms of this Agreement or any
of the other Financing Documents,  or in aid of the exercise or execution of any
right,  remedy or power  granted in this  Agreement,  the  Financing  Documents,
and/or  applicable  Laws.  The  Administrative  Agent and each of the Lenders is
authorized to offset and apply to all or any part of the Obligations all moneys,
credits  and  other  property  of  any  nature  whatsoever  of any or all of the
Borrowers now or at any time  hereafter in the  possession  of, in transit to or
from,  under the control or custody of, or on deposit with,  the  Administrative
Agent, any of the Lenders or any Affiliate of the Administrative Agent or any of
the Lenders.

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                    7.2.5 Recordation of Deeds of Trust.

                    Upon the  occurrence  of an Event of Default  under  Section
7.1.1  (Failure  to  Pay),  Section  7.1.3  (Failure  to  Comply  with  Specific
Covenants),  Section 7.1.6 (Receiver;  Bankruptcy),  Section 7.1.7  (Involuntary
Bankruptcy),  Section  7.1.8  (Judgment),  Section  7.1.9  (Default  Under Other
Borrowings)  or Section  7.1.13  (Liquidation,  Termination,  Dissolution),  the
Administrative Agent shall be entitled to record immediately the Deeds of Trust,
at the expense of the  Borrowers.  Upon the  occurrence  of any Event of Default
under any provision of this Agreement other than those  specifically  identified
in the preceding  sentence,  with notice to the  Borrowers,  the  Administrative
Agent shall record the Deeds of Trust,  at the expense of the  Borrowers  thirty
(30) days after  occurrence of the Event of Default  (including  all  applicable
cure and grace periods).


                                  ARTICLE VIII
                            THE ADMINISTRATIVE AGENT

     Section 8.1  Appointment.

         Each Lender hereby  designates  and appoints FMB as its  Administrative
Agent under this Agreement and the Financing  Documents,  and each Lender hereby
irrevocably  authorizes  the  Administrative  Agent to take  such  action  or to
refrain  from  taking  such action on its behalf  under the  provisions  of this
Agreement  and the  Financing  Documents  and to exercise such powers as are set
forth  herein or  therein,  together  with such other  powers as are  reasonably
incidental  thereto.  The  Administrative  Agent  agrees  to act as  such on the
express  conditions  contained  in this ARTICLE  VIII.  The  provisions  of this
ARTICLE  VIII are solely for the  benefit  of the  Administrative  Agent and the
Lenders  and  neither the  Borrowers  nor any Person  shall have any rights as a
third party  beneficiary  of any of the  provisions  hereof.  In performing  its
functions and duties under this Agreement,  the  Administrative  Agent shall act
solely as an  administrative  representative  of the Lenders and does not assume
and shall not be deemed to have assumed any obligation toward or relationship of
agency or trust  with or for the  Lenders,  the  Borrowers  or any  Person.  The
Administrative  Agent may  perform  any of its  duties  hereunder,  or under the
Financing Documents, by or through its agents or employees.

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     Section 8.2  Nature of Duties.

                    8.2.1 In General

                    The Administrative  Agent shall have no duties,  obligations
or responsibilities except those expressly set forth in this Agreement or in the
Financing Documents.  The duties of the Administrative Agent shall be mechanical
and administrative in nature. The Administrative  Agent shall not have by reason
of this Agreement a fiduciary relationship in respect of any Lender. Each Lender
shall make its own  independent  investigation  of the  financial  condition and
affairs of the  Borrowers in connection  with the extension of credit  hereunder
and shall make its own appraisal of the credit worthiness of the Borrowers,  and
the Administrative Agent shall have no duty or responsibility,  either initially
or on a  continuing  basis,  to  provide  any  Lender  with any  credit or other
information with respect thereto,  whether coming into its possession before the
Closing Date or at any time or times  thereafter.  If the  Administrative  Agent
seeks the consent or approval of any of the Lenders to the taking or  refraining
from taking of any action hereunder,  then the  Administrative  Agent shall send
notice thereof to each Lender.  The  Administrative  Agent shall promptly notify
each Lender any time that the  applicable  percentage of Lenders has  instructed
the Administrative Agent to act or refrain from acting pursuant hereto.

                    8.2.2 Express Authorization

                    The Administrative Agent is hereby expressly and irrevocably
authorized by each of the Lenders,  as Administrative  Agent on behalf of itself
and the other Lenders:

                    (a) to receive on behalf of each of the  Lenders any payment
or collection on account of the Obligations and to distribute to each Lender its
Pro Rata Share of all such payments and  collections  so received as provided in
this Agreement;

                    (b) to receive all  documents  and items to be  furnished to
the Lenders  under the  Financing  Documents  (nothing  contained  herein  shall
relieve the  Borrowers  of any  obligation  to deliver any item  directly to the
Lenders to the extent expressly required by the provisions of this Agreement);

                    (c) to act or refrain from acting in this  Agreement  and in
the other  Financing  Documents  with respect to those matters so designated for
the Administrative Agent;

                    (d) to act as  nominee  for and on behalf of the  Lenders in
and under this Agreement and the other Financing Documents;

                    (e) to  arrange  for the  means  whereby  the  funds  of the
Lenders are to be made available to the Borrowers;

                    (f) to  distribute  promptly to the Lenders,  if required by
the terms of this Agreement,  all written information,  requests,  notices, Loan
Notices, payments,

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Prepayments,  documents  and other items  received  from the  Borrowers or other
Person;

                    (g) to  amend,  modify,  or  waive  any  provisions  of this
Agreement or the other  Financing  Documents on behalf of the Lenders subject to
the  requirement  that  certain of the  Lenders'  consent be obtained in certain
instances  as  provided  in 9.2.2  (Circumstances  Where  Consent  of all of the
Lenders is Required) and in certain other  provisions  of this  Agreement  which
require the consent of the Requisite Lenders;

                    (h) to  deliver  to the  Borrowers  and other  Persons,  all
requests,  demands,  approvals,  notices,  and consents received from any of the
Lenders;

                    (i) to  exercise  on behalf of each  Lender  all  rights and
remedies  of the  Lenders  upon the  occurrence  of any Event of Default  and/or
Default  specified  in  this  Agreement  and/or  in any of the  other  Financing
Documents or applicable Laws;

                    (j) to execute any of the Security  Documents  and any other
documents  on behalf of the Lenders as the secured  party for the benefit of the
Administrative Agent and the Lenders; and

                    (k) to take such other  actions as may be  requested  by the
Requisite Lenders.

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     Section 8.3  Rights, Exculpation, Etc.

         Neither the  Administrative  Agent nor any of its officers,  directors,
employees  or agents  shall be  liable to any  Lender  for any  action  taken or
omitted  by them  hereunder  or  under  any of the  Financing  Documents,  or in
connection herewith or therewith,  except that the Administrative Agent shall be
obligated  on the  terms  set  forth  herein  for  performance  of  its  express
obligations hereunder,  and except that the Administrative Agent shall be liable
with  respect  to  its  own  gross   negligence  or  willful   misconduct.   The
Administrative  Agent shall not be liable for any  apportionment or distribution
of  payments  made  by it in  good  faith  and  if  any  such  apportionment  or
distribution  is  subsequently  determined  to have  been made in error the sole
recourse of any Lender to whom payment was due but not made, shall be to recover
from the other  Lenders  any  payment  in excess of the amount to which they are
determined to be entitled (and such other Lenders hereby agree to return to such
Lender any such erroneous payments received by them). The  Administrative  Agent
agrees  with each  Lender to assist the  Lenders in a  reasonable  manner in any
Lender's  efforts to recover payments due to it from one or more of the Lenders.
The  Administrative  Agent  shall  not be  responsible  to any  Lender  for  any
recitals, statements, representations or warranties herein or for the execution,
effectiveness,   genuineness,   validity,   enforceability,    collectible,   or
sufficiency  of  this  Agreement  or  any  of  the  Financing  Documents  or the
transactions contemplated thereby, or for the financial condition of any Person.
The  Administrative  Agent shall not be required to make any inquiry  concerning
either  the  performance  or  observance  of  any of the  terms,  provisions  or
conditions of this Agreement or any of the Financing  Documents or the financial
condition of any Person,  or the existence or possible  existence of any Default
or  Event  of  Default.  The  Administrative  Agent  may  at  any  time  request
instructions  from the Lenders with respect to any actions or approvals which by
the  terms  of  this  Agreement  or  of  any  of  the  Financing  Documents  the
Administrative  Agent is  permitted  or  required  to take or to grant,  and the
Administrative  Agent shall be  absolutely  entitled to refrain  from taking any
action  or to  withhold  any  approval  and  shall  not be under  any  liability
whatsoever  to any Person for  refraining  from any  action or  withholding  any
approval under any of the Financing  Documents until it shall have received such
instructions from the applicable percentage of the Lenders. Without limiting the
foregoing,  no Lender  shall  have any right of action  whatsoever  against  the
Administrative  Agent  as  a  result  of  the  Administrative  Agent  acting  or
refraining  from  acting  under  this  Agreement  or any of the other  Financing
Documents in accordance with the  instructions  of the applicable  percentage of
the  Lenders  and   notwithstanding   the  instructions  of  the  Lenders,   the
Administrative  Agent shall have no obligation to take any action if it, in good
faith,  believes  that  such  action  exposes  the  Administrative  Agent to any
liability and the Administrative Agent provides justification for its refusal to
the Lenders.

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     Section 8.4  Reliance.

         The  Administrative  Agent  shall be  entitled to rely upon any written
notices,  statements,  certificates,  orders or other documents or any telephone
message or other  communication  (including  any  writing,  telex,  telecopy  or
telegram)  believed  by it in good faith to be genuine  and  correct and to have
been signed,  sent or made by the proper Person, and with respect to all matters
pertaining to this  Agreement or any of the  Financing  Documents and its duties
hereunder  or   thereunder,   upon  advice  of  counsel   selected  by  it.  The
Administrative  Agent may deem and treat the  original  Lenders as the owners of
the respective Notes for all purposes until receipt by the Administrative  Agent
of a written  notice of  assignment,  negotiation  or transfer  of any  interest
therein  by the  Lenders in  accordance  with the terms of this  Agreement.  Any
interest,  authority  or  consent  of any  holder of any of the  Notes  shall be
conclusive and binding on any subsequent holder, transferee, or assignee of such
Notes.  The  Administrative  Agent  shall be entitled to rely upon the advice of
legal  counsel,  independent  accountants,  and other  experts  selected  by the
Administrative Agent in its sole discretion.

     Section 8.5  Indemnification.

         Each  Lender,   severally,   agrees  to  reimburse  and  indemnify  the
Administrative  Agent  for and  against  any and all  liabilities,  obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses, advances
or disbursements including,  without limitation,  Enforcement Costs, of any kind
or nature  whatsoever  which may be imposed on, incurred by, or asserted against
the Administrative Agent in any way relating to or arising out of this Agreement
or any  of the  Financing  Documents  or any  action  taken  or  omitted  by the
Administrative Agent under this Agreement for any of the Financing Documents, in
proportion  to each  Lender's Pro Rata Share,  all of the  foregoing as they may
arise, be asserted or be imposed from time to time; provided,  however,  that no
Lender shall be liable for any portion of such liabilities, obligations, losses,
damages,  penalties,  actions,  judgments,  suits, costs, expenses,  advances or
disbursements  resulting  from the  Administrative  Agent's gross  negligence or
willful misconduct.  The obligations of the Lenders under this Section 8.5 shall
survive  the  payment in full of the  Obligations  and the  termination  of this
Agreement.

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     Section 8.6  FMB Individually.

         With respect to its  Commitments and the Revolving Loan made by it, and
the Notes  issued to it, FMB shall  have and may  exercise  the same  rights and
powers  hereunder and is subject to the same  obligations and liabilities as and
to the extent set forth herein for any other Lender.  The terms "the Lenders" or
"Requisite  Lenders"  or any similar  terms  shall,  unless the context  clearly
otherwise  indicates,  include FMB in its individual capacity as a Lender or one
of the  Requisite  Lenders.  FMB and its  Affiliates  may lend money to,  accept
deposits  from  and  generally  engage  in any kind of  banking,  trust or other
business  with the  Borrowers,  any Affiliate of either  Borrower,  or any other
Person or any of their  officers,  directors  and  employees  as if FMB were not
acting as the Administrative  Agent pursuant hereto and the Administrative Agent
may accept fees and other consideration from the Borrowers, any Affiliate of the
Borrowers or any of their officers,  directors and employees (in addition to the
Agency Fees or other arrangement fees heretofore agreed to between the Borrowers
and the Administrative  Agent) for services in connection with this Agreement or
otherwise without having to account for or share the same with the Lenders.

     Section 8.7  Successor Administrative Agent.

                    8.7.1 Resignation.

                    The Administrative  Agent may resign from the performance of
all its  functions  and duties  hereunder  at any time by giving at least thirty
(30) Business Days' prior written notice to the Borrowers and the Lenders.  Such
resignation shall take effect upon the acceptance by a successor  Administrative
Agent of appointment  pursuant to Section 8.7.2 (Appointment of Successor) or as
otherwise provided below.

                    8.7.2 Appointment of Successor.

                    Upon any such  notice of  resignation  pursuant  to  Section
8.7.1  (Resignation),  the  Requisite  Lenders  shall appoint a successor to the
Administrative  Agent. If a successor to the Administrative Agent shall not have
been  so  appointed   within  said  thirty  (30)   Business   Day  period,   the
Administrative Agent retiring, upon notice to the Borrowers,  shall then appoint
a successor  Administrative  Agent who shall serve as the  Administrative  Agent
until such time, as the Requisite Lenders appoint a successor the Administrative
Agent as provided above.

                    8.7.3 Successor Administrative Agent.

                    Upon the acceptance of any appointment as the Administrative
Agent under the Financing  Documents by a successor  Administrative  Agent, such
successor  to the  Administrative  Agent shall  thereupon  succeed to and become
vested with all the rights, powers,  privileges and duties of the Administrative
Agent retiring,  and the Administrative  Agent retiring shall be discharged from
its  duties  and   obligations   under  the  Financing   Documents.   After  any
Administrative  Agent's  resignation  as  the  Administrative  Agent  under  the
Financing  Documents,  the  provisions  of this  ARTICLE VIII shall inure to its
benefit  as to any  actions  taken or omitted to be taken by it while it was the
Administrative Agent under the Financing Documents.

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     Section 8.8  Administrative Agency Fee.

         The   Borrowers   shall  pay  to  the   Administrative   Agent  a  loan
administration and agency fee (collectively,  the  "Administrative  Agency Fees"
and individually,  an "Administrative  Agency Fee") in accordance with the terms
and  provisions  of the Agency  Letter  Agreement  dated  January 8, 1999 by and
between the Borrowers and the Administrative Agent.

     Section 8.9  Exercise of Remedies.

         Each  Lender  agrees  that it will not have any right  individually  to
enforce  or seek to enforce  this  Agreement  or any  Financing  Document  or to
realize upon any collateral  security for the  Commitments,  it being understood
and  agreed  that  such  rights  and  remedies  may  be  exercised  only  by the
Administrative Agent.

     Section 8.10 Consents.

         (a) In the event the Administrative Agent requests the consent
of a Lender and does not receive a written denial  thereof,  or a written notice
from a Lender that due course  consideration of the request requires  additional
time, in each case, within ten (10) Business Days after such Lender's receipt of
such request, then such Lender will be deemed to have given such consent.

         (b) In the event the Administrative Agent requests the consent
of a Lender and such  consent is denied,  then FMB may, at its  option,  require
such  Lender to assign its  interest  in the  Revolving  Loan to FMB for a price
equal to the then  outstanding  principal amount thereof plus accrued and unpaid
interest,  fees and costs  and  expenses  due such  Lender  under the  Financing
Documents,  which principal,  interest, fees and costs and expenses will be paid
on the date of such  assignment.  In the event that FMB  elects to  require  any
Lender to assign its  interest to FMB, FMB will so notify such Lender in writing
within thirty (30) days  following  such Lender's  denial,  and such Lender will
assign its interest to FMB no later than five (5) days following receipt of such
notice.

     Section 8.11 Dissemination of Information.

         The Administrative  Agent will provide the Lenders with any information
received by the Administrative  Agent from the Borrowers which is required to be
provided  to the  Administrative  Agent or to the Lenders  hereunder;  provided,
however,  that the  Administrative  Agent shall not be liable to any one or more
the Lenders for any failure to do so,  except to the extent that such failure is
attributable  to  the   Administrative   Agent's  gross  negligence  or  willful
misconduct.

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                                   ARTICLE IX
                                  MISCELLANEOUS

     Section 9.1  Notices.

         All  notices,  requests  and  demands  to or upon the  parties  to this
Agreement  shall be in  writing  and shall be deemed to have been  given or made
when  delivered  by hand on a Business  Day, or two (2) days after the date when
deposited in the mail,  postage prepaid by registered or certified mail,  return
receipt requested,  or when sent by overnight courier,  on the Business Day next
following  the day on which the notice is delivered to such  overnight  courier,
addressed as follows:

              Borrowers:    Mid-Atlantic Realty Trust
                            MART Limited Partnership
                            170 West Ridgely Road, Suite 300
                            Lutherville, Maryland 21093
                            Attention:  F. Patrick Hughes, President


                  Administrative
                  Agent:            FMB Bank
                                    25 South Charles Street, 12th Floor
                                    P.O. Box 1596
                                    Baltimore, Maryland 21203
                                    Attention:     David A. Kennedy
                                                   Mary Frances Isakov

                  Documentation
                  Agent:            First Union National Bank
                                    Real Estate Capital Markets
                                    REIT Banking Group
                                    One First Union Center, NC-01-66
                                    Attention:     Rex E. Rudy

Chevy Chase:      Baltimore Business Group
                  Chevy Chase Bank, FSB
                  135 East Baltimore Street
                  Baltimore, Maryland 21201
                  Attention: Robert H. Newton, Jr.


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Provident:        Provident Bank of Maryland
                  Real Estate Lending Division
                  114 East Lexington Street, 4th Floor
                  P.O. Box 1661
                  Baltimore, Maryland 21203-1661
                  Attention:    Christopher M. Nevin


         By written notice,  each party to this Agreement may change the address
to which notice is given to that party,  provided that such changed notice shall
include a street address to which notices may be delivered by overnight  courier
in the ordinary course on any Business Day.

     Section 9.2 Amendments; Waivers.

                    9.2.1 In General.

                    This Agreement and the other Financing  Documents may not be
amended,  modified,  or changed in any respect except by an agreement in writing
signed by the  Administrative  Agent,  the Requisite  Lenders and the Borrowers,
and, to the extent provided in Section 9.2.2 (Circumstances Where Consent of all
of  the  Lenders  is  Required),  by an  agreement  in  writing  signed  by  the
Administrative  Agent,  all of the Lenders and the  Borrowers.  No waiver of any
provision of this  Agreement  or of any of the other  Financing  Documents,  nor
consent  to any  departure  by the  Borrowers  therefrom,  shall in any event be
effective  unless the same shall be in writing signed by the Requisite  Lenders.
No course of dealing between the Borrowers and the  Administrative  Agent and/or
any of the Lenders and no act or failure to act from time to time on the part of
the  Administrative  Agent and/or any of the Lenders shall  constitute a waiver,
amendment or modification of any provision of this Agreement or any of the other
Financing  Documents or any right or remedy under this  Agreement,  under any of
the other Financing  Documents or under  applicable  Laws.  Without implying any
limitation  on the  foregoing,  and subject to the  provisions  of Section 9.2.2
(Circumstances Where Consent of all of the Lenders is Required):

                         (a) Any waiver or consent  shall be  effective  only in
                    the specific  instance,  for the terms and purpose for which
                    given,  subject  to such  conditions  as the  Administrative
                    Agent and Lenders may specify in any such instrument.

                         (b) No waiver of any Default or Event of Default  shall
                    extend  to any  subsequent  or  other  Default  or  Event of
                    Default, or impair any right consequent thereto.

                         (c) No notice to or demand on the Borrowers in any case
                    shall entitle the  Borrowers to any other or further  notice
                    or demand in the same, similar or other circumstance.

                         (d) No failure or delay by the  Lenders to insist  upon
                    the

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<PAGE>






               strict performance of any term, condition,  covenant or agreement
               of this Agreement or of any of the other Financing Documents,  or
               to exercise any right,  power or remedy  consequent upon a breach
               thereof, shall constitute a waiver,  amendment or modification of
               any such term,  condition,  covenant or  agreement or of any such
               breach or preclude  the Lenders from  exercising  any such right,
               power or remedy at any time or times.

                         (e) By  accepting  payment  after  the due  date of any
                    amount  payable  under  this  Agreement  or under any of the
                    other Financing  Documents,  the Lenders shall not be deemed
                    to waive the right either to require prompt payment when due
                    of all other amounts  payable under this  Agreement or under
                    any  of the  other  Financing  Documents,  or to  declare  a
                    default for  failure to effect  such  prompt  payment of any
                    such other amount.

                    9.2.2  Circumstances  Where Consent of all of the Lenders is
Required.

                    Notwithstanding  anything to the contrary  contained herein,
no  amendment,  modification,  change or waiver shall be  effective  without the
consent of all of the Lenders to:

                         (a)  extend  the  maturity  of  the  principal  of,  or
                    interest on, any Note or of any of the other Obligations;

                         (b) reduce the  principal  amount of any Note or of any
                    of the other  Obligations,  the rate of interest  thereon or
                    the Fees due to the Lenders,  except as expressly  permitted
                    therein;

                         (c) change the aggregate Commitments;

                         (d)  change the date of  payment  of  principal  of, or
                    interest on, any Note or of any of the other Obligations;

                         (e)  change  the  method  of  calculation  utilized  in
                    connection with the computation of interest and Fees;

                         (f) change the  manner of pro rata  application  by the
                    Administrative  Agent of payments made by the Borrowers,  or
                    any other  payments  required  hereunder  or under the other
                    Financing Documents;

                         (g) modify this Section, Section 8.11 (Dissemination of
                    Information), or the definition of "Requisite Lenders";

                         (h)  release  or  agree  to  subordinate  any  material
                    portion of any collateral or Financing  Document  (except to
                    the extent provided herein or therein); or

                         (i) waive the performance, observance or compliance

                                       80



<PAGE>






                    with  or  amend  Section  6.1.14  (Financial  Covenants)  or
                    Section 6.2 (Negative Covenants).

         Additionally,  no  change  may be  made  to the  amount  of a  Lender's
Commitment or to the Lender's  percentage of all  Commitments  without the prior
written consent of that Lender.

     Section 9.3 Cumulative Remedies.

         The rights,  powers and remedies  provided in this Agreement and in the
other  Financing  Documents are  cumulative,  may be exercised  concurrently  or
separately,  may be  exercised  from  time to  time  and in  such  order  as the
Administrative  Agent  shall  determine,  subject  to  the  provisions  of  this
Agreement,  and are in addition to, and not  exclusive  of,  rights,  powers and
remedies provided by existing or future applicable Laws. In order to entitle the
Administrative Agent to exercise any remedy reserved to it in this Agreement, it
shall not be  necessary  to give any  notice,  other than such  notice as may be
expressly  required in this  Agreement.  Without  limiting the generality of the
foregoing and subject to the terms of this Agreement,  the Administrative  Agent
may:

                    (a) proceed  against either of the Borrowers with or without
proceeding against any other Person who may be liable (by endorsement, guaranty,
indemnity or otherwise) for all or any part of the Obligations;

                    (b) proceed  against either of the Borrowers with or without
proceeding under any of the other Financing  Documents or against any collateral
and security for all or any part of the Obligations;

                    (c) without  reducing or  impairing  the  obligation  of the
Borrowers and without notice,  release or compromise with any guarantor or other
Person  liable  for  all or any  part of the  Obligations  under  the  Financing
Documents or otherwise;

                    (d) without  reducing or impairing  the  obligations  of the
Borrowers and without notice thereof:

                         (i) fail to perfect  the Lien in any or all  collateral
                    or to release any or all collateral or to accept  substitute
                    collateral;

                         (ii) approve the making of advances under the Revolving
                    Loan under this Agreement;

                         (iii)  waive any  provision  of this  Agreement  or the
                    other Financing Documents;

                         (iv) exercise or fail to exercise  rights of set-off or
                    other rights; or

                                       81



<PAGE>






                         (v) accept partial payments or extend from time to time
                    the maturity of all or any part of the Obligations.

     Section 9.4  Severability.

         In case one or more  provisions,  or part  thereof,  contained  in this
Agreement  or in the other  Financing  Documents  shall be  invalid,  illegal or
unenforceable  in any respect  under any Law,  then without need for any further
agreement, notice or action:

                    (a)  the  validity,   legality  and  enforceability  of  the
remaining  provisions  shall remain effective and binding on the parties thereto
and shall not be affected or impaired thereby;

                    (b) the  obligation to be fulfilled  shall be reduced to the
limit of such validity;

                    (c) if such provision or part thereof  pertains to repayment
of  the  Obligations,   then,  at  the  sole  and  absolute  discretion  of  the
Administrative  Agent, all of the Obligations of the Borrowers to the Agents and
the Lenders shall become immediately due and payable; and

                    (d) if the  affected  provision  or part  thereof  does  not
pertain to repayment  of the  Obligations,  but operates or would  prospectively
operate to invalidate this Agreement in whole or in part, then such provision or
part  thereof only shall be void,  and the  remainder  of this  Agreement  shall
remain operative and in full force and effect.

                                       82



<PAGE>






     Section 9.5  Assignments by Lenders.

         Any Lender may,  with the prior written  consent of the  Administrative
Agent (which consent shall not be unreasonably withheld),  but without notice to
or consent of the Borrowers, assign to any Eligible Assignee (each an "Assignee"
and   collectively,   the  "Assignees")  all  or  a  portion  of  such  Lender's
Commitments;  provided that, after giving effect to such assignment, such Lender
must  continue  to hold a Pro Rata Share of the  Commitments  at least  equal to
fifty  percent  (50%) of its Pro Rata  Share of the  Commitments  as of the date
hereof  and the  minimum  amount  which may be  assigned  shall be Five  Million
Dollars  ($5,000,000).  Any Lender that elects to make such an assignment  shall
pay to the Administrative Agent, for the exclusive benefit of the Administrative
Agent, an  administrative  fee for processing each such assignment in the amount
of Three Thousand Five Hundred Dollars ($3,500.00). Such Lender and its Assignee
shall notify the  Administrative  Agent and the Borrowers in writing of the date
on which the assignment is to be effective (the "Adjustment Date"). On or before
the  Adjustment  Date,  the assigning  Lender,  the  Administrative  Agent,  the
Borrowers  and the  respective  Assignee  shall  execute  and  deliver a written
assignment  agreement in the form of EXHIBIT "E" attached hereto and made a part
hereof,  which shall  constitute  an amendment  to this  Agreement to the extent
necessary to reflect such  assignment.  Upon the request of any assigning Lender
following an assignment  made in accordance with this Section 9.5, the Borrowers
shall issue new Notes to the assigning  Lender and its Assignee  reflecting such
assignment, in exchange for the existing Notes held by the assigning Lender.

         In addition,  notwithstanding the foregoing, any Lender may at any time
pledge all or any portion of such Lender's rights under this  Agreement,  any of
the Commitments or any of the Obligations to a Federal Reserve Bank.

     Section 9.6  Participations by Lenders.
                  -------------------------

         Any Lender may at any time sell to one or more  financial  institutions
participating  interests in any of such  Lender's  Obligations  or  Commitments;
provided, however, that (a) no such participation shall relieve such Lender from
its  obligations  under  this  Agreement  or under  any of the  other  Financing
Documents  to  which  it  is a  party,  (b)  such  Lender  shall  remain  solely
responsible  for the  performance  of its  obligations  under this Agreement and
under all of the other Financing  Documents to which it is a party,  and (c) the
Borrowers, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Financing Documents.

     Section 9.7  Disclosure of Information by Lenders.
                  -------------------------------------

         In connection with any sale,  transfer,  assignment or participation by
any Lender in accordance  with Section 9.5  (Assignments  by Lenders) or Section
9.6 (Participations by Lenders), each Lender shall have the right to disclose to
any actual or potential  purchaser,  assignee,  transferee  or  participant  all
financial  records,  information,  reports,  financial  statements and documents
obtained in connection  with this  Agreement  and/or any of the other  Financing
Documents or otherwise.

                                       83



<PAGE>






     Section 9.8  Successors and Assigns.
                  ----------------------

         This Agreement and all other Financing  Documents shall be binding upon
and inure to the  benefit of the  Borrowers,  the  Administrative  Agent and the
Lenders and their respective  heirs,  personal  representatives,  successors and
assigns,  except  that the  Borrowers  shall not have the right to assign  their
rights hereunder or any interest herein without the prior written consent of the
Administrative Agent and the Requisite Lenders of the Lenders.

     Section 9.9  Continuing Agreements.
                  ---------------------

         All covenants,  agreements,  representations and warranties made by the
Borrowers in this Agreement, in any of the other Financing Documents, and in any
certificate delivered pursuant hereto or thereto shall survive the making by the
Lenders  of the  Revolving  Loan,  the  issuance  of  Letters  of  Credit by the
Administrative  Agent and the  execution  and  delivery  of the Notes,  shall be
binding  upon the  Borrowers  regardless  of how long  before  or after the date
hereof any of the Obligations  were or are incurred,  and shall continue in full
force and effect so long as any of the  Obligations  are outstanding and unpaid.
From time to time upon the Administrative Agent's request, and as a condition of
the release of any one or more of the  Security  Documents,  the  Borrowers  and
other  Persons  obligated  with  respect to the  Obligations  shall  provide the
Administrative   Agent  with  such   acknowledgments   and   agreements  as  the
Administrative  Agent may require to the effect that there  exists no  defenses,
rights of setoff or  recoupment,  claims,  counterclaims,  actions  or causes of
action of any kind or nature whatsoever against the Administrative Agent, any or
all of the Lenders, and/or any of its or their Administrative Agents and others,
or to the extent there are, the same are waived and released.

     Section 9.10  Enforcement Costs.
                   -----------------

         The Borrowers  agree to pay to the  Administrative  Agent on demand all
Enforcement  Costs,  together  with  interest  thereon from the date incurred or
advanced  until paid in full at a per annum rate of interest  equal at all times
to the Post-Default Rate. Enforcement Costs shall be immediately due and payable
at the time  advanced or incurred,  whichever is earlier.  Without  implying any
limitation on the foregoing,  the Borrowers  agree,  as part of the  Enforcement
Costs,  to pay upon  demand any and all  recordation,  stamp and other Taxes and
fees payable or determined  to be payable in  connection  with the execution and
delivery of this  Agreement  and the other  Financing  Documents and to save the
Administrative  Agent and the  Lenders  harmless  from and  against  any and all
liabilities with respect to or resulting from any delay in paying or omission to
pay any  Taxes or fees  referred  to in this  Section.  The  provisions  of this
Section  shall  survive  the  execution  and  delivery  of this  Agreement,  the
repayment of the other  Obligations  and shall survive the  termination  of this
Agreement.

                                       84



<PAGE>






     Section 9.11  Applicable Law; Jurisdiction.

                    9.11.1 Applicable Law.

                    As a material  inducement  to the Agents and the  Lenders to
enter into this Agreement,  each of the Borrowers  acknowledges  and agrees that
the Financing  Documents,  including,  this Agreement,  shall be governed by the
Laws of the State, as if each of the Financing  Documents and this Agreement had
each been  executed,  delivered,  administered  and performed  solely within the
State even though for the convenience  and at the request of the Borrowers,  one
or more of the Financing Documents may be executed elsewhere. The Agents and the
Lenders  acknowledge,  however,  that  remedies  under  certain of the Financing
Documents  that relate to property  outside the State may be subject to the laws
of the state in which the property is located.

                    9.11.2 Submission to Jurisdiction.

                    Each   of  the   Borrowers   irrevocably   submits   to  the
jurisdiction  of any state or federal  court sitting in the State over any suit,
action or proceeding  arising out of or relating to this Agreement or any of the
other Financing  Documents.  Each of the Borrowers  irrevocably  waives,  to the
fullest extent permitted by law, any objection that it may now or hereafter have
to the laying of the venue of any such suit, action or proceeding brought in any
such court and any claim that any such suit, action or proceeding brought in any
such court has been brought in an inconvenient forum. Final judgment in any such
suit,  action or proceeding  brought in any such court shall be  conclusive  and
binding  upon the  Borrowers  and may be  enforced  in any  court  in which  the
Borrowers are subject to  jurisdiction,  by a suit upon such judgment,  provided
that  service of process is effected  upon the  Borrowers  in one of the manners
specified in this Section or as otherwise permitted by applicable Laws.

                    9.11.3 Service of Process.

                    Each of the  Borrowers  hereby  consents  to  process  being
served in any suit,  action or  proceeding  of the  nature  referred  to in this
Section  by the  mailing of a copy  thereof by  registered  or  certified  mail,
postage  prepaid,  return receipt  requested,  to the Borrower at the Borrower's
address  designated  in or  pursuant  to Section 9.1  (Notices).  The  Borrowers
irrevocably  agree  that such  service  (y)  shall be  deemed  in every  respect
effective  service of process  upon the  Borrowers  in any such suit,  action or
proceeding,  and (z) shall, to the fullest extent permitted by law, be taken and
held to be valid personal  service upon the  Borrowers.  Nothing in this Section
shall  affect  the right of the  Administrative  Agent to serve  process  in any
manner otherwise permitted by law or limit the right of the Administrative Agent
otherwise  to bring  proceedings  against  the  Borrowers  in the  courts of any
jurisdiction or jurisdictions.

     Section 9.12  Duplicate Originals and Counterparts.
                   ------------------------------------ 

         This Agreement may be executed in any number of duplicate  originals or
counterparts,  each of such duplicate  originals or counterparts shall be deemed
to be an original and all taken together  shall  constitute but one and the same
instrument.

                                       85



<PAGE>






     Section 9.13  Headings.

         The  headings in this  Agreement  are included  herein for  convenience
only,  shall not constitute a part of this Agreement for any other purpose,  and
shall  not be  deemed  to  affect  the  meaning  or  construction  of any of the
provisions hereof.

     Section 9.14  No Agency.

         Nothing herein contained shall be construed to constitute the Borrowers
as the Administrative  Agent of the  Administrative  Agent or any of the Lenders
for any  purpose  whatsoever  or to permit  the  Borrowers  to pledge any of the
credit  of  the  Administrative  Agent  or  any  of  the  Lenders.  Neither  the
Administrative  Agent nor any of the Lenders shall be  responsible or liable for
any  shortage,  discrepancy,  damage,  loss or  destruction  of any  part of any
collateral wherever the same may be located and regardless of the cause thereof.
Neither  the  Administrative  Agent nor any of the  Lenders  shall,  by anything
herein or in any of the Financing  Documents or otherwise,  assume either of the
Borrowers'   obligations  under  any  contract  or  agreement  assigned  to  the
Administrative  Agent and/or the Lenders,  and neither the Administrative  Agent
nor any of the Lenders shall be  responsible  in any way for the  performance by
the Borrowers of any of the terms and conditions thereof.

     Section 9.15  Date of Payment.
                   ---------------

         Should the principal of or interest on the Notes become due and payable
on other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day and in the case of principal,  interest shall be payable
thereon at the rate per annum specified in the Notes during such extension.

     Section 9.16  Entire Agreement.
                   ----------------

         This Agreement is intended by the Administrative Agent, the Lenders and
the Borrowers to be a complete, exclusive and final expression of the agreements
contained  herein.  Neither  the  Administrative  Agent,  the  Lenders  nor  the
Borrowers shall hereafter have any rights under any prior agreements  pertaining
to the  matters  addressed  by this  Agreement  but  shall  look  solely to this
Agreement for definition and  determination of all of their  respective  rights,
liabilities and responsibilities under this Agreement.

                                       86



<PAGE>






     Section 9.17  Waiver of Trial by Jury.
                   ------------------------

         THE BORROWERS,  THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY JOINTLY
AND  SEVERALLY  WAIVE  TRIAL BY JURY IN ANY  ACTION OR  PROCEEDING  TO WHICH THE
BORROWERS,  OR EITHER OF THEM, AND THE ADMINISTRATIVE AGENT AND/OR ANY OR ALL OF
THE LENDERS MAY BE PARTIES,  ARISING OUT OF OR IN ANY WAY PERTAINING TO (A) THIS
AGREEMENT,  (B) ANY OF THE  FINANCING  DOCUMENTS,  OR (C) ANY  COLLATERAL.  THIS
WAIVER  CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS  AGAINST ALL PARTIES
TO SUCH ACTIONS OR  PROCEEDINGS,  INCLUDING  CLAIMS AGAINST  PARTIES WHO ARE NOT
PARTIES TO THIS AGREEMENT.

         This  waiver  is  knowingly,  willingly  and  voluntarily  made  by the
Borrowers,  the  Administrative  Agent and the Lenders,  and the Borrowers,  the
Administrative Agent and the Lenders hereby represent that no representations of
fact or opinion have been made by any  individual to induce this waiver of trial
by jury or to in any way  modify or  nullify  its  effect.  The  Borrowers,  the
Administrative  Agent  and the  Lenders  further  represent  that they have been
represented in the signing of this Agreement and in the making of this waiver by
independent  legal counsel,  selected of their own free will, and that they have
had the opportunity to discuss this waiver with counsel.

     Section 9.18  Liability of the Administrative Agent and the Lenders.
                   ------------------------------------------------------

         The Borrowers  hereby agree that neither the  Administrative  Agent nor
any of the Lenders  shall be  chargeable  for any  negligence,  mistake,  act or
omission  of any  accountant,  examiner,  agency  or  attorney  employed  by the
Administrative   Agent  and/or  any  of  the  Lenders  in  making  examinations,
investigations  or  collections,   or  otherwise  in  perfecting,   maintaining,
protecting or realizing upon any lien or security interest or any other interest
in any collateral or other security for the Obligations.

         By accepting or approving  anything required to be observed,  performed
or fulfilled by the Borrowers or to be given to the Administrative  Agent and/or
any of the Lenders  pursuant  to this  Agreement  or any of the other  Financing
Documents,  neither the  Administrative  Agent nor any of the  Lenders  shall be
deemed to have warranted or represented  the condition,  sufficiency,  legality,
effectiveness or legal effect of the same, and such acceptance or approval shall
not  constitute  any  warranty or  representation  with  respect  thereto by the
Administrative Agent and/or the Lenders.

                                       87



<PAGE>






     Section 9.19  Default By Related Entities.
                   ---------------------------

         A payment  default or any other  default by the Borrowers or any entity
in which one or more of them has a  controlling  interest  with  respect  to any
Indebtedness  for Borrowed Money which is non-recourse and secured solely by one
or more  properties  shall not constitute an Event of Default if (a) the default
does not cause an event of default under Section 6.1.14  (Financial  Covenants),
(b) no assets other than the property or properties securing the indebtedness in
default is subject to  recourse  for  payment of the  indebtedness,  and (c) the
Borrowers  have promptly  notified the  Administrative  Agent of the default and
provided the Administrative  Agent a current Compliance  Certificate in the form
of Exhibit B taking into account the default that has occurred and the impact of
the collection of the indebtedness by the lender to whom it is owed.

         IN WITNESS  WHEREOF,  each of the  parties  hereto  have  executed  and
delivered this  Agreement  under their  respective  seals as of the day and year
first written above.

WITNESS OR ATTEST:                         MID-ATLANTIC REALTY TRUST



_________________________                  By:____________________________(Seal)
                                              Paul F. Robinson
                                              Vice President


WITNESS OR ATTEST:                         MART LIMITED PARTNERSHIP
                                           By:  Mid-Atlantic Realty Trust, 
                                                General Partner



_________________________                  By:____________________________(Seal)
                                              Paul F. Robinson
                                              Vice President



                                       88



<PAGE>






WITNESS:                                 FMB BANK
                                         in its capacity as Administrative Agent



_________________________                By:____________________________(Seal)
                                            Mary Frances Isakov
                                            Assistant Vice President



_________________________                By:____________________________(Seal)
                                            David A. Kennedy
                                            Vice President
                                            Address: FMB Bank
                                                     25 South Charles Street, 
                                                      12th Floor
                                                     P.O. Box 1596
                                                     Baltimore, Maryland 21203
                                                     Attention: David A. Kennedy


WITNESS:                                 FMB BANK
                                         in its capacity as a Lender



_________________________                By:____________________________(Seal)
                                            Mary Frances Isakov
                                            Assistant Vice President



_________________________                By:____________________________(Seal)
                                            David A. Kennedy
                                            Vice President
                                            Address: FMB Bank
                                                     25 South Charles Street, 
                                                      12th Floor
                                                     P.O. Box 1596
                                                     Baltimore, Maryland 21203
                                                     Attention: David A. Kennedy



                                       89



<PAGE>






WITNESS:                                 FIRST UNION NATIONAL BANK
                                         in its capacity as Documentation Agent



_________________________                By:____________________________(Seal)
                                            Name:
                                            Title:
                                            Address: Real Estate Capital Markets
                                                     REIT Banking Group
                                                     One First Union Center, 
                                                     NC-01-66
                                                     Attention: Rex E. Rudy


WITNESS:                                 FIRST UNION NATIONAL BANK
                                         in its capacity as a Lender



_________________________                By:____________________________(Seal)
                                            Name:
                                            Title:
                                            Address: Real Estate Capital Markets
                                                     REIT Banking Group
                                                     One First Union Center, 
                                                     NC-01-66
                                                     Attention: Rex E. Rudy



                                       90



<PAGE>






WITNESS:                                 PROVIDENT BANK OF MARYLAND
                                         in its capacity as a Lender



_________________________               By:____________________________(Seal)
                                            Christopher M. Nevin
                                            Vice President
                                        Address: Provident Bank of Maryland
                                                 Real Estate Lending 
                                                 Division
                                                 114 East Lexington Street,
                                                 4th Floor
                                                 P.O. Box 1661
                                                 Baltimore, Maryland 21203-1661
                                                 Attention: Christopher M. Nevin




                                       91



<PAGE>






WITNESS:                                CHEVY CHASE BANK, FSB
                                        in its capacity as a Lender



_________________________               By:____________________________(Seal)
                                           Name:
                                           Title:
                                           Address: Baltimore Business Group
                                                    Chevy Chase Bank, FSB
                                                    135 East Baltimore Street
                                                    Baltimore, Maryland 21201
                                                    Attention: Robert H. Newton,
                                                                Jr.



                                       92



<PAGE>






                                LIST OF EXHIBITS

Revolving Credit Note

Compliance Certificate

Financial Condition Certificate - Closing

Financial Condition Certificate - Post Closing

Assignment and Assumption Agreement

Financing Agreement

                                       93



<PAGE>






                                LIST OF SCHEDULES

Schedule 3.1.9             Litigation

Schedule 3.1.12            Indebtedness for Borrowed Money

Schedule 4.1.6             Unencumbered Properties





                                       94



<PAGE>








<TABLE>
<CAPTION>


                                TABLE OF CONTENTS

<S>                                                                                                               <C>
ARTICLE I DEFINITIONS                                                                                             1

Section 1.1       Certain Defined Terms.                                                                          1
Section 1.2       Accounting Terms and Other Definitional Provisions.                                            17

ARTICLE II THE CREDIT FACILITIES                                                                                 17

Section 2.1       The Revolving Credit Facility.                                                                 17
         2.1.1    Revolving Credit Facility.                                                                     17
         2.1.2    Procedure for Making Advances Under the Revolving Loan; Lender Protection Loans.               18
         2.1.3    Revolving Credit Notes.                                                                        19
         2.1.4    Optional Prepayments of Revolving Loan.                                                        20
         2.1.5    Revolving Loan Account.                                                                        20
         2.1.6    Revolving Credit Unused Line Fee.                                                              20
         2.1.7    Cancellation Fee.                                                                              21
Section 2.2       The Letter of Credit Facility.                                                                 21
         2.2.1    Letters of Credit.                                                                             21
         2.2.2    Letter of Credit Fees.                                                                         21
         2.2.3    Terms of Letters of Credit; Post-Termination Date Letters of Credit.                           22
         2.2.4    Procedures for Letters of Credit.                                                              23
         2.2.5    Payments of Letters of Credit.                                                                 23
         2.2.6    Change in Law; Increased Cost.                                                                 24
         2.2.7    General Letter of Credit Provisions.                                                           25
         2.2.8    Participations in the Letters of Credit.                                                       26
         2.2.9    Payments by the Lenders to the Administrative Agent.                                           26
Section 2.3       General Financing Provisions.                                                                  27
         2.3.1    Borrowers' Representatives.                                                                    27
         2.3.2    Computation of Interest and Fees.                                                              29
         2.3.3    Commitment Fee.                                                                                29
         2.3.4    Extension Fee.                                                                                 29
         2.3.5    Payments.                                                                                      29
         2.3.6    Liens; Setoff.                                                                                 29
         2.3.7    Requirements of Law.                                                                           30
         2.3.8    Guaranty.                                                                                      30
Section 2.4       Interest.                                                                                      33
         2.4.1    Applicable Interest Rates.                                                                     33
         2.4.2    Selection of Interest Rates.                                                                   34
         2.4.3    Inability to Determine Eurodollar Base Rate.                                                   36
         2.4.4    Indemnity.                                                                                     36
         2.4.5    Payment of Interest.                                                                           37
Section 2.5       Settlement Among Lenders.                                                                      37
         2.5.1    Revolving Loan.                                                                                37
         2.5.2    Settlement Procedures as to Revolving Loan.                                                    38
         2.5.3    Settlement of Other Obligations.                                                               40
         2.5.4    Presumption of Payment.                                                                        41

                                        i
</TABLE>



<PAGE>




<TABLE>
<CAPTION>


<S>               <C>                                                                                                      <C>
ARTICLE III REPRESENTATIONS AND WARRANTIES                                                                       42


Section 3.1       Representations and Warranties.                                                                42
         3.1.1    Standing.                                                                                      42
         3.1.2    Power and Authority.                                                                           42
         3.1.3    Binding Agreements.                                                                            42
         3.1.4    No Conflicts.                                                                                  42
         3.1.5    No Defaults, Violations.                                                                       43
         3.1.6    Compliance with Laws.                                                                          43
         3.1.7    Margin Stock.                                                                                  43
         3.1.8    Investment Company Act; Margin Securities.                                                     43
         3.1.9    Litigation.                                                                                    44
         3.1.10   Financial Condition.                                                                           44
         3.1.11   Full Disclosure.                                                                               44
         3.1.12   Indebtedness for Borrowed Money.                                                               44
         3.1.13   Taxes.                                                                                         45
         3.1.14   ERISA.                                                                                         45
         3.1.15   Title to Properties.                                                                           45
         3.1.16   Presence of Hazardous Materials or Hazardous Materials Contamination.                          46
         3.1.17   Year 2000 Representations and Warranties.                                                      46
Section 3.2       Survival; Updates of Representations and Warranties.                                           46

ARTICLE IV CONDITIONS PRECEDENT                                                                                  47

Section 4.1       Conditions to the Initial Advance and Initial Letter of Credit.                                47
         4.1.1    Organizational Documents - Borrowers.                                                          47
         4.1.2    Opinion of Borrowers' Counsel.                                                                 48
         4.1.3    Consents, Licenses, Approvals, Etc.                                                            48
         4.1.4    Notes.                                                                                         48
         4.1.5    Financing Documents.                                                                           49
         4.1.6    Unencumbered Properties.                                                                       49
         4.1.7    Other Financing Documents.                                                                     50
         4.1.8    Other Documents, Etc.                                                                          50
         4.1.9    Payment of Fees.                                                                               50
         4.1.10   Solvency.                                                                                      50
         4.1.11   Letters of Credit.                                                                             50
Section 4.2       Conditions to all Extensions of Credit.                                                        51
         4.2.1    Compliance.                                                                                    51
         4.2.2    Default.                                                                                       51
         4.2.3    Representations and Warranties.                                                                51
         4.2.4    Adverse Change.                                                                                51
         4.2.5    Legal Matters.                                                                                 51

ARTICLE V Unencumbered Properties.                                                                               51

Section 5.1       Unencumbered Properties as of the Closing Date.                                                51
Section 5.2       Addition of Unencumbered Properties                                                            52
Section 5.3       Removal of Properties from the Unencumbered Properties.                                        52

ARTICLE VI COVENANTS OF THE BORROWERS                                                                            52

Section 6.1       Affirmative Covenants.                                                                         52
         6.1.1    Financial Statements.                                                                          52

                                       ii



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         6.1.2    Reports to SEC and to Stockholders.                                                            54
         6.1.3    Recordkeeping, Rights of Inspection, Etc.                                                      54
         6.1.4    REIT Existence.                                                                                54
         6.1.5    Partnership Existence.                                                                         55
         6.1.6    Compliance with Laws.                                                                          55
         6.1.7    Preservation of Properties.                                                                    55
         6.1.8    Line of Business.                                                                              55
         6.1.9    Insurance.                                                                                     55
         6.1.10   Taxes.                                                                                         56
         6.1.11   ERISA.                                                                                         56
         6.1.12   Notification of Events of Default and Adverse Developments.                                    56
         6.1.13   Hazardous Materials; Contamination.                                                            57
         6.1.14   Financial Covenants.                                                                           58
         6.1.15   Investments in Real Estate Assets.                                                             59
         6.1.16   Deeds of Trust a Contemporaneous Exchange; Financial Condition Certificates.                   59
         6.1.17   Deeds of Trust.                                                                                59
Section 6.2       Negative Covenants.                                                                            59
         6.2.1    Merger, Acquisition or Sale of Assets.                                                         60
         6.2.2    Indebtedness.                                                                                  60
         6.2.3    Loans and Other Transactions.                                                                  60
         6.2.4    Distributions.                                                                                 61
         6.2.5    Liens.                                                                                         61
         6.2.6    Transactions with Affiliates.                                                                  61
         6.2.7    Other Businesses.                                                                              61
         6.2.8    ERISA Compliance.                                                                              61
         6.2.9    Prohibition on Hazardous Materials.                                                            61
         6.2.10   Amendments.                                                                                    62
         6.2.11   Method of Accounting; Fiscal Year.                                                             62

ARTICLE VII DEFAULT AND RIGHTS AND REMEDIES                                                                      62

Section 7.1       Events of Default.                                                                             62
         7.1.1    Failure to Pay.                                                                                62
         7.1.2    Breach of Representations and Warranties.                                                      62
         7.1.3    Failure to Comply with Specific Covenants.                                                     63
         7.1.4    Failure to Comply with Other Covenants.                                                        63
         7.1.5    Default Under Other Financing Documents or Obligations.                                        63
         7.1.6    Receiver; Bankruptcy.                                                                          63
         7.1.7    Involuntary Bankruptcy, etc.                                                                   63
         7.1.8    Judgment.                                                                                      64
         7.1.9    Default Under Other Borrowings.                                                                64
         7.1.10   Challenge to Agreements.                                                                       64
         7.1.11   Material Adverse Change.                                                                       64
         7.1.12   Impairment of Position.                                                                        64
         7.1.13   Liquidation, Termination, Dissolution, Change in Management, etc.                              65
Section 7.2       Remedies.                                                                                      65
         7.2.1    Acceleration.                                                                                  65
         7.2.2    Further Advances.                                                                              65
         7.2.3    Performance by Administrative Agent.                                                           65
         7.2.4    Other Remedies.                                                                                66
         7.2.5    Recordation of Deeds of Trust.                                                                 66

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ARTICLE VIII THE ADMINISTRATIVE AGENT                                                                            67

Section 8.1       Appointment.                                                                                   67
Section 8.2       Nature of Duties.                                                                              67
         8.2.1    In General                                                                                     67
         8.2.2    Express Authorization                                                                          67
Section 8.3       Rights, Exculpation, Etc.                                                                      68
Section 8.4       Reliance.                                                                                      69
Section 8.5       Indemnification.                                                                               70
Section 8.6       FMB Individually.                                                                              70
Section 8.7       Successor Administrative Agent.                                                                70
         8.7.1    Resignation.                                                                                   70
         8.7.2    Appointment of Successor.                                                                      70
         8.7.3    Successor Administrative Agent.                                                                71
Section 8.8       Administrative Agency Fee.                                                                     71
Section 8.9       Exercise of Remedies.                                                                          71
Section 8.10      Consents.                                                                                      71
Section 8.11      Dissemination of Information.                                                                  72

ARTICLE IX MISCELLANEOUS                                                                                         72

Section 9.1       Notices.                                                                                       72
Section 9.2       Amendments; Waivers.                                                                           73
         9.2.1    In General.                                                                                    73
         9.2.2    Circumstances Where Consent of all of the Lenders is Required.                                 74
Section 9.3       Cumulative Remedies.                                                                           75
Section 9.4       Severability.                                                                                  76
Section 9.5       Assignments by Lenders.                                                                        76
Section 9.6       Participations by Lenders.                                                                     77
Section 9.7       Disclosure of Information by Lenders.                                                          77
Section 9.8       Successors and Assigns.                                                                        77
Section 9.9       Continuing Agreements.                                                                         77
Section 9.10      Enforcement Costs.                                                                             78
Section 9.11      Applicable Law; Jurisdiction.                                                                  78
         9.11.1   Applicable Law.                                                                                78
         9.11.2   Submission to Jurisdiction.                                                                    78
         9.11.3   Service of Process.                                                                            79
Section 9.12      Duplicate Originals and Counterparts.                                                          79
Section 9.13      Headings.                                                                                      79
Section 9.14      No Agency.                                                                                     79
Section 9.15      Date of Payment.                                                                               79
Section 9.16      Entire Agreement.                                                                              80
Section 9.17      Waiver of Trial by Jury.                                                                       80
Section 9.18      Liability of the Administrative Agent and the Lenders.                                         80
Section 9.19      Default By Related Entities.                                                                   81


</TABLE>



                                       iv



<PAGE>




                          $75,000,000 CREDIT FACILITIES

                               FINANCING AGREEMENT


                              Dated April 23, 1999


                                 By and Between


                           MID-ATLANTIC REALTY TRUST,


                            MART LIMITED PARTNERSHIP


                                       And


                                    FMB BANK,
                             as Administrative Agent


                                       And


                           FIRST UNION NATIONAL BANK,
                             as Documentation Agent