REVOLVING CREDIT AGREEMENT

                                     among

                            GROVE OPERATING, L.P.,
                             GROVE PROPERTY TRUST

                                      and

                          RHODE ISLAND HOSPITAL TRUST
                                 NATIONAL BANK

                                      and

                         OTHER BANKS WHICH MAY BECOME
                           PARTIES TO THIS AGREEMENT

                                     with

                  RHODE ISLAND HOSPITAL TRUST NATIONAL BANK,
                                   AS AGENT

                          BANCBOSTON SECURITIES, INC.
                                  AS ARRANGER

                             Dated April 30, 1998



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                               Table of Contents

1..DEFINITIONSAND RULES OF INTERPRETATION............ ....1
      1.1.Definitions................................ ....1
      1.2.Rules of Interpretation.................... ....1
2..THE  REVOLVING CREDIT FACILITY.................... ....1
      2.1. Commitment to Lend.............................1
      2.2. The Revolving Credit Notes.....................2
      2.3. Interest on Revolving Credit Loans; Fees.......2
      2.4. Requests for Revolving Credit Loans............4
      2.5. Conversion Options.............................7
      2.6. Funds for Revolving Credit Loans...............8
3..REPAYMENT OF THE REVOLVING CREDIT LOANS................9
      3.1. Maturity.......................................9
      3.2. Optional Repayments of Revolving Credit Loans..10
4..CERTAIN GENERAL PROVISIONS.............................10
      4.1. Funds for Payments.............................10
      4.2. Computations...................................11
      4.3. Inability to Determine LIBOR Rate..............12
      4.4. Illegality.....................................12
      4.5. Additional Costs, Etc..........................13
      4.6. Capital Adequacy...............................14
      4.7. Certificate....................................14
      4.8. Indemnity......................................15
      4.9. Interest on Overdue Amounts....................15
5..BORROWING BASE.........................................15
      5.1. Additions and Replacements to Eligible Properties.  15
      5.2. Removal from Eligible Properties...............16
      5.3. Recourse Obligations...........................17
6..REPRESENTATIONSAND WARRANTIES..........................17
7..AFFIRMATIVE COVENANTS..................................19
8. NEGATIVE COVENANTS.....................................22
9..FINANCIAL COVENANTS....................................25
10.CONDITIONS TO THE CLOSING DATE.........................27
      10.1. Loan Documents................................27
      10.2. Certified Copies of Organization Documents....27
      10.3. By-Laws; Resolutions..........................27
      10.4. Incumbency Certificate; Authorized Signers....27
      10.5. Survey and Taxes..............................28
      10.6. Title Insurance; Title Exception Documents....28
      10.7. Leases, Service Contracts and Other Documents.28
      10.8. Estoppel Agreements...........................28
      10.9. Certificates of Insurance.....................28
      10.10. Hazardous Substance Assessments..............29

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      10.11.Opinion   of  Counsel  Concerning   Organization  and  Loan
      Documents............................................29
      10.12. Structural Condition Assurances..............29
      10.13. Permit Assurances; Compliance................29
      10.14. Guaranty.....................................29
      10.15. Financial Analysis of Initial Eligible Properties.  29
      10.16. Inspection of Eligible Properties............30
      10.17. Certifications from Government Officials; UCC-11
      Reports.30
      10.18. Proceedings and Documents....................30
      10.19. Fees.........................................30
      10.20.Closing Certificate..........................30
11.CONDITIONS TO ALL BORROWINGS............................30
      11.1. Representations   True;  No  Event  of  Default; 
      Compliance Certificate...............................30
      11.2. No Legal Impediment...........................31
      11.3. Governmental Regulation.......................31
12.EVENTS OF DEFAULT; ACCELERATION; ETC....................31
      12.1. EVENTS OF DEFAULT; ACCELERATION...............31
      12.2. Termination of Commitments....................33
      12.3. Remedies......................................33
      12.4. Distribution of Proceeds......................34
13.SETOFF..................................................34
14.ENVIRONMENTAL MATTERS...................................35
      14.1.Representations and Warranties...................35
      14.2.Environmental Indemnity and Covenants............37
15.THE AGENT...............................................39
      15.1.Authorization.................................39
      15.2.Employees and Agents..........................39
      15.3.No Liability..................................39
      15.4.No Representations............................40
      15.5.Payments......................................40
      15.6.Holders of Revolving Credit Notes.............42
      15.7.Indemnity.....................................42
      15.8.Agent as Bank.................................42
      15.9.Notification of Defaults and Events of Default.42
      15.10.Duties in the Case of Enforcement............42
      15.11.Successor Agent..............................43
      15.12.Notices......................................43
16.ASSIGNMENT; PARTICIPATIONS; ETC.........................44
      16.1.Conditions to Assignment by Banks.............44
      16.2.Certain   Representations   and   Warranties;   Limitations;
      Covenants.............................................44
      16.3.Register......................................45
      16.4.New Revolving Credit Notes....................46

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      16.5.Participations................................46
      16.6.Pledge by Lender..............................46
      16.7.No Assignment by Borrower.....................47
      16.8.Disclosure....................................47
17.CONSENTS, AMENDMENTS, WAIVERS, ETC.....................47
18.MISCELLANEOUS.........................................48
19.WAIVER OF JURY TRIAL..................................50
20.PREJUDGMENT REMEDY WAIVER.............................50


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                                   EXHIBITS

      A      Form of Revolving Credit Note
      B      Eligible Property Conditions
      C      Form of Lease Summaries
      D      Form of Loan Request
      E      Form of Compliance Certificate
      F      Form of Closing Certificate
      G      Form of Assignment and Assumption Agreement


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                    Schedules to Revolving Credit Agreement

SCHEDULE 1        Banks' Commitments
SCHEDULE 2        Definitions and Rules of Interpretation
SCHEDULE 3        List of Additional Guarantors and Eligible
                  Properties
SCHEDULE 6(b)     Capitalization; Outstanding Securities, Etc.
SCHEDULE 6(c)     Partially Owned Real Estate Holding Entities
SCHEDULE 6(p)     Subsidiaries/Joint Ventures


<PAGE>
                          REVOLVING CREDIT AGREEMENT

      This  REVOLVING  CREDIT  AGREEMENT  is made as of the 30th day of  April,
1998, by and among GROVE OPERATING,  L.P., a Delaware limited  partnership (the
"Borrower"),  GROVE PROPERTY  TRUST, a Maryland  corporation  which is the sole
general  partner of the Borrower (the  "Guarantor"),  each having its principal
place of business at 598 Asylum  Avenue,  Hartford,  Connecticut  06105,  RHODE
ISLAND  HOSPITAL  TRUST NATIONAL BANK, a national  banking  association  having
its principal  place of business at One  BankBoston  Plaza,  Providence,  Rhode
Island  02903,  and the other  lending  institutions  which may become  parties
hereto pursuant to 15 (individually,  a "Bank" and collectively,  the "Banks")
and RHODE ISLAND  HOSPITAL  TRUST  NATIONAL  BANK, as agent for itself and each
other Bank (in such capacity, the "Agent").

      1.  DEFINITIONS AND RULES OF INTERPRETATION.

           1.1.Definitions.Except  as otherwise expressly provided herein,
all  capitalized  terms used in this  Agreement,  the  exhibits  hereto and any
notes,  certificates,  reports  or  other  documents  or  instruments  made  or
delivered  pursuant  to or in  connection  with this  Agreement  shall have the
meanings set forth for such terms in Schedule 2 hereto.

           1.2.Rules  of   Interpretation.Except  as  otherwise  expressly
provided  herein,  the rules of  interpretation  set forth in Schedule 2 hereto
shall  apply  to  this   Agreement,   the   exhibits   hereto  and  any  notes,
certificates,  reports or other  documents  or  instruments  made or  delivered
pursuant to or in connection with this Agreement.

      2.  THE REVOLVING CREDIT FACILITY.

           2.1.Commitment  to  Lend. Subject  to the provisions of 2.4 and
the other terms and conditions set forth in this  Agreement,  each of the Banks
severally  agrees to lend to the Borrower  and the Borrower may borrow,  repay,
and  reborrow  from each Bank from time to time  between the  Closing  Date and
the  Maturity  Date  upon  notice  by  the  Borrower  to  the  Agent  given  in
accordance  with 2.4 hereof,  such sums as are requested by the Borrower up to
a maximum aggregate  principal amount  outstanding  (after giving effect to all
amounts  requested) at any one time equal to such Bank's  Commitment;  provided
that  the sum of the  outstanding  aggregate  amount  of the  Revolving  Credit
Loans  (after  giving  effect to all amounts  requested)  shall not at any time
exceed the Borrowing  Base at such time.  The Borrower  agrees that it shall be
an Event of  Default  if at any time the  outstanding  Revolving  Credit  Loans

<PAGE>

exceed  the  Borrowing  Base at such  time and such  excess  is not paid to the
Agent on behalf of the Banks  within  thirty (30) days of the  Agent's  request
therefor.  The Total  Commitment  of the Banks shall be  automatically  reduced
pro rata in accordance  with each Bank's  Commitment  Percentage to $35,000,000
on the  anniversary  of the Closing Date unless prior to such  anniversary  the
outstanding  principal  balance of the  Revolving  Credit  Loans  shall  exceed
$35,000,000 at any one time.

      The  Revolving  Credit  Loans shall be made pro rata in  accordance  with
each Bank's  Commitment  Percentage.  Each request for a Revolving  Credit Loan
made  pursuant to 2.4 hereof shall  constitute a  representation  and warranty
by the Borrower  that the  conditions  set forth in 10 have been  satisfied as
of the  Closing  Date and  that  the  conditions  set  forth  in 11 have  been
satisfied  on the date of such  request and will be  satisfied  on the proposed
Drawdown  Date of the  requested  Revolving  Credit Loan.  No Revolving  Credit
Loan shall be  required  to be made by any Bank  unless  all of the  conditions
contained  in 10  have  been  satisfied  as of the  Closing  Date and that the
conditions  set  forth in 11 have  been met at the time of any  request  for a
Revolving Credit Loan.

           2.2.The  Revolving  Credit  Notes. The  Revolving  Credit  Loans
shall be evidenced  by the  Revolving  Credit  Notes.  A Revolving  Credit Note
shall be payable  to the order of each Bank in an  aggregate  principal  amount
equal to such Bank's  Commitment.  The  Borrower  irrevocably  authorizes  each
Bank to make or cause to be made,  at or about  the time of the  Drawdown  Date
of any  Revolving  Credit  Loan or at the time of  receipt  of any  payment  of
principal on such Bank's  Revolving  Credit Notes,  an appropriate  notation on
such  Bank's  Revolving  Credit  Note  Record  reflecting  the  making  of such
Revolving  Credit  Loan or (as the case may be) the  receipt  of such  payment.
The outstanding  amount of the Revolving  Credit Loans set forth on such Bank's
Revolving  Credit Note Record  shall be prima facie  evidence of the  principal
amount  thereof  owing and unpaid to such Bank,  but the failure to record,  or
any error in so  recording,  any such  amount on such Bank's  Revolving  Credit
Note  Record  shall  not  limit or  otherwise  affect  the  obligations  of the
Borrower  hereunder  or under any  Revolving  Credit  Note to make  payments of
principal of or interest on any Revolving Credit Note when due.

          2.3.Interest on Revolving Credit Loans; Fees.

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

earlier paid in accordance with 3.2) at a rate equal to the Base Rate.

           (b)  LIBOR Rate.  Each LIBOR Rate Loan shall bear  interest  for the
      period  commencing  with the Drawdown Date thereof and ending on the last
      day of each Interest  Period with respect thereto (unless earlier paid in
      accordance  with 3.2) at a rate equal to the LIBOR Rate  determined  for
      such Interest Period plus one and two-tenths of one percent (1.20%).

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

           (d)  Closing  Fee.  The  Borrower  agrees  to  pay to  the  Agent  a
      closing fee as set forth in that  certain  letter  agreement  dated March
      27, 1998 between the Agent and the Borrower.

           (e)  Unused Fee.  From and after the date  hereof  until the earlier
      of (i) the  Maturity  Date or (ii)  the  date on  which  the  Commitments
      terminate,  the Borrower agrees to pay to the Agent,  for the accounts of
      the Banks in accordance with their respective Commitment Percentages,  an
      unused fee in an amount  equal to either (a)  fifteen  hundredths  of one
      percent  (0.15%) per annum on the Daily Unused  Commitment,  for each day
      that the aggregate  outstanding principal balance of all Revolving Credit
      Loans is more than fifty  percent (50%) of the Total  Commitment  and (b)
      eighteen  hundredths of one percent (0.18%) per annum on the Daily Unused
      Commitment,  for  each  day  that  the  aggregate  outstanding  principal
      balance  of all  Revolving  Credit  Loans is equal to or less than  fifty
      percent (50%) of the Total  Commitment,  in each case  calculated  during
      each calendar  quarter or portion thereof for the first calendar  quarter
      of the term of this  Agreement and the last calendar  quarter of the term
      of this Agreement,  if either of same is not a full calendar quarter from
      the date hereof to the Maturity Date (the "Unused  Fee").  The Unused Fee
      shall be payable  quarterly  in arrears  on the  fifteenth  (15th) day of
      each  January,  April,  July  and  October  quarter  for the  immediately
      preceding  calendar  quarter  commencing on the first such date following
      the Closing  Date,  with a final  payment on the earlier of (i)  Maturity
      Date or (ii) any earlier date on which the Commitments shall terminate.
<PAGE>


           (f)  Agent's  Fee. The  Borrowers  shall pay to the Agent an Agent's
      fee as set forth in that certain  letter  agreement  dated March 27, 1998
      between the Agent and the Borrower.

           2.4. Requests   for   Revolving   Credit   Loans. The   following
provisions  shall apply to each request by the Borrower for a Revolving  Credit
Loan:

           (a)  The  Borrower  shall  submit a  Completed  Loan  Request to the
      Agent.  The  Agent  shall  promptly  deliver  a  duplicate  copy  of such
      Completed  Loan  Request  to each  Bank  which  is  then a party  to this
      Agreement  at the time such loan  request  is made.  Except as  otherwise
      provided  herein,  each  Completed  Loan  Request  shall be in a  minimum
      amount  of (i)  $250,000  if  such  Loan  Request  does  not  involve  an
      Acquisition  Property or a New Eligible Property or (ii) $500,000 if such
      Loan  Request  involves  an  Acquisition   Property  or  a  New  Eligible
      Property.  Each Completed  Loan Request shall be irrevocable  and binding
      on the Borrower and shall  obligate the Borrower to accept the  Revolving
      Credit  Loans  requested  from the Banks on the proposed  Drawdown  Date,
      unless such  Completed  Loan  Request is  withdrawn  (x) in the case of a
      request for a LIBOR Rate Loan,  at least five (5) Business  Days prior to
      the proposed  Drawdown Date for such  Revolving  Credit Loan,  and (y) in
      the case of a request  for a Base Rate  Loan,  at least two (2)  Business
      Days prior to the proposed Drawdown Date for such Revolving Credit Loan.

           (b)  Each  Completed  Loan  Request may be delivered by the Borrower
      to the Agent by 10:00 a.m. on any Business Day, and

                     (i)..in the case of a loan  request  that does not involve
                an Acquisition  Property or a New Eligible  Property,  at least
                one (1)  Business Day prior to the  proposed  Drawdown  Date of
                any Base Rate Loan,  and at least three (3) LIBOR Business Days
                prior to the proposed Drawdown Date of any LIBOR Rate Loan; and

                     (ii).in the case of a loan  request  involving  a proposed
                Acquisition  Property or  Properties,  a good faith estimate of
                such loan  request  shall be  provided  at least  fifteen  (15)
                Business  Days  prior to the  proposed  Drawdown  Date,  with a
                Completed  Loan  Request  to be  provided  at  least  five  (5)
                Business Days prior to the proposed Drawdown Date; and

<PAGE>

                     (iii)in the case of a loan  request  involving  a proposed
                New  Eligible  Property,  a good  faith  estimate  of such loan
                request  shall be provided  at least  thirty (30) days prior to
                the proposed  Drawdown  Date,  with a Completed Loan Request to
                be  provided  at least  five  (5)  Business  Days  prior to the
                proposed Drawdown Date.

           (c)  Each Completed Loan Request shall include:

                     (A)  in the case of a loan  request  that does not involve
                an  Acquisition   Property  or  a  New  Eligible  Property,   a
                completed  writing in the form of Exhibit D hereto  specifying:
                (1)  the  principal   amount  of  the  Revolving   Credit  Loan
                requested,  (2) the proposed  Drawdown  Date of such  Revolving
                Credit  Loan,  (3)  the  Interest  Period  applicable  to  such
                Revolving  Credit Loan, (4) the Type of such  Revolving  Credit
                Loan being  requested  and (5) the purpose for which such funds
                will be used (a "Completed Exhibit D"); and

                     (B)..in the case of a loan  request  involving  a proposed
                Acquisition  Property,  (x) a  Completed  Exhibit  D,  and  (y)
                evidence  that the  proposed  Acquisition  Property  meets  the
                following    conditions    (collectively,    the   "Acquisition
                Conditions"):

                          (1)  the   proposed    Acquisition    Property   when
                     aggregated  with the other Real  Estate  Assets  would not
                     violate the covenants contained in 7(e); and

                          (2)  the proposed  Acquisition Property does not have
                     unperformed  or  unpaid  remediation  costs  that  are not
                     budgeted  and  part  of  a  remediation  plan  with  costs
                     estimates  approved  by  the  Agent.  The  Completed  Loan
                     Request  shall  include  evidence  that the  Borrower  has
                     performed a hazardous  waste due  diligence  review of the
                     proposed Acquisition  Property,  and have attached to it a
                     copy of an environmental  site assessment  report obtained
                     by  the   Borrower  in   connection   with  the   proposed
                     acquisition  which  contains  sufficient   information  to
                     permit  the  above   determination   regarding   potential
                     remediation  costs or other  environmental 

<PAGE>

      liabilities to be made. Such  environmental  site assessments shall be
     satisfactory  to the Agent in all  respects  and shall be  submitted to the
     Agent at least ten (10) Business Days prior to the proposed  Drawdown Date;
     and 

(C)..in the case of a loan request involving the addition of a proposed
     New Eligible  Property,  (v) a Completed  Exhibit D, (w) evidence  that the
     proposed New Eligible Property meets the Acquisition Conditions, (x) all of
     the documents and other  information  relating to the proposed New Eligible
     Property  required by the Eligible Property  Conditions,  (y) evidence that
     the proposed  New Eligible  Property  does not have  unperformed  or unpaid
     remediation costs that are not budgeted and part of a remediation plan with
     costs estimates  approved by the Agent.  and (z) evidence that the proposed
     New Eligible  Property when aggregated  with the other Eligible  Properties
     would not violate the covenants contained in 7(e).

           (d)  No Bank shall be  obligated to fund any  Revolving  Credit Loan
           unless:

                     (i)..a Completed Loan Request has been timely  received by
                the Agent as provided in subsection (a) above; and

                     (ii).both before and after giving  effect to the Revolving
                Credit Loan to be made pursuant to the Completed  Loan Request,
                all  of  the  conditions  contained  in  10  shall  have  been
                satisfied as of the Closing Date and all of the  conditions set
                forth  in  11  shall   have  been  met,   including,   without
                limitation,  the condition under 11.1 that there be no Default
                or Event of Default under this Agreement; and

                     (iii)the Agent shall have  received a  certificate  in the
                form of Exhibit E hereto signed by the chief financial  officer
                of the  Borrower  (in  his  capacity  as  such  and  not in his
                individual  capacity)  (copies of which shall be  delivered  by
                the Agent  promptly to the Banks)  setting  forth  computations
                evidencing  compliance with the covenants  contained in 9 
                on a pro  forma  basis  after  giving   effect  to 
                such  requested   Revolving   Credit  Loan,
<PAGE>

                and   certifying   that   to   the   best  knowledge  of 
                such officer  after due inquiry,  both before and
                after giving effect to such  requested  Revolving  Credit Loan,
                no Default or Event of Default  exists or will exist under this
                Agreement or any other Loan Document; and

                     (iv) in  the  case  of a loan  request  not  involving  an
                Acquisition  Property or a New Eligible Property,  the proceeds
                of the  Revolving  Credit Loan are to be used for the  purposes
                and meet the conditions set forth therein; and

                     (v)..in the case of a loan  request  involving  a proposed
                Acquisition  Property,  the  Acquisition  Conditions  have been
                met; and

                     (vi) in  the  case  of  a  loan  request   involving   the
                acquisition  of  an  Acquisition   Property  and  its  proposed
                inclusion as a New  Eligible  Property,  the Eligible  Property
                Conditions and the Acquisition Conditions have been met.

           2.5. Conversion Options.

           (a)  The  Borrower  may  elect  from  time to time  to  convert  any
      outstanding  Revolving  Credit Loan to a Revolving Credit Loan of another
      Type,  provided  that (i) with respect to any such  conversion of a LIBOR
      Rate  Loan  to a  Base  Rate  Loan,  such  conversion  shall  take  place
      automatically  at the end of the  applicable  Interest  Period unless the
      Borrower  provides  notice to the Agent of its request to  continue  such
      Revolving  Credit  Loan as a LIBOR Rate Loan as  provided  in 2.5(b) and
     2.5(a)(ii);  (ii)  subject  to the  further  proviso  at the end of this
      2.5(a)  and  subject  to  2.5(b)  and  2.5(d),   with  respect  to  any
      conversion  of a Base Rate Loan to a LIBOR  Rate Loan (or a  continuation
      of a LIBOR Rate Loan,  as provided in 2.5(b)),  the Borrower  shall give
      the Agent at least three (3) LIBOR  Business  Days' prior written  notice
      of such  election,  which such  notice  must be  received by the Agent by
      10:00 a.m. on any Business  Day;  and (iii) no Revolving  Credit Loan may
      be converted  into a LIBOR Rate Loan when any Default or Event of Default
      has occurred and is  continuing.  The Agent shall  provide each Bank with
      a copy of such  notice  promptly  after its receipt  thereof.  All or any
      part of outstanding  Revolving  Credit Loans of any Type may be converted
      as  provided   herein,  provided  that  each  Conversion  Request  
      relating   to  the  conversion  of  a  Base  Rate  Loan

<PAGE>

      to a LIBOR  Rate  Loan  shall  be  for  an  amount  equal 
      to $250,000  or an  integral  multiple of $50,000 in excess
      thereof and shall be irrevocable by the Borrower.

           (b)  Any Revolving  Credit Loan of any Type may be continued as such
      upon the  expiration of the Interest  Period with respect  thereto (i) in
      the case of Base Rate Loans,  automatically and (ii) in the case of LIBOR
      Rate Loans by  compliance  by the  Borrower  with the  notice  provisions
      contained  in  2.5(a)(ii);  provided  that no  LIBOR  Rate  Loan  may be
      continued  as  such  when  any  Event  of  Default  has  occurred  and is
      continuing  but shall be  automatically  converted to a Base Rate Loan on
      the last day of the first Interest Period relating  thereto ending during
      the  continuance  of any Event of  Default.  The Agent  shall  notify the
      Banks promptly when any such automatic  conversion  contemplated  by this
      2.5(b) is scheduled to occur.

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

           (d)  The  Borrower  may not  request  or  elect a  LIBOR  Rate  Loan
      pursuant  to 2.4,  elect to  convert a Base  Rate  Loan to a LIBOR  Loan
      pursuant  to 2.5(a) or elect to  continue a LIBOR Rate Loan  pursuant to
      2.5(b) if,  after  giving  effect  thereto,  there would be greater than
      five (5) LIBOR Rate Loans then  outstanding.  Any  Revolving  Credit Loan
      Request  for a LIBOR Rate Loan that would  create  greater  than five (5)
      LIBOR Rate Loans  outstanding  shall be deemed to be a Loan Request for a
      Base Rate Loan.

           2.6.Funds for Revolving Credit Loans.

           (a)  Subject  to the other  provisions  of this 2,  not later  than
      11:00 a.m. on the proposed  Drawdown Date of any Revolving  Credit Loans,
      each of the Banks will make  available to the Agent,  at its Head Office,
      in  immediately  available  funds,  the amount of such Bank's  Commitment
      Percentage of the amount of the  requested  Revolving  Credit Loan.  Upon
      receipt from each Bank of such amount,  the Agent will make  available to
      the  Borrower the  aggregate  amount of such  Revolving  Credit Loan made
      available  to the Agent by the  Banks;  all such  funds  received  by the
      Agent by 11:00 a.m. on any  Business  Day will be made  available  to the
      Borrower  not later  than  2:00  p.m.  on the same  Business  Day.  Funds
      received  after such  time will  be  made  available by  not later
<PAGE>


      than  11:00  a.m.   on  the  next   Business   Day.  The  failure 
      or  refusal  of  any  Bank  to  make   available
      to the  Agent at the  aforesaid  time  and  place on any
      Drawdown  Date the amount of its  Commitment  Percentage of the requested
      Revolving  Credit  Loan shall not relieve any other Bank from its several
      obligation  hereunder  to make  available  to the Agent the amount of its
      Commitment  Percentage of any requested  Revolving  Credit Loan but in no
      event shall the Agent (in its capacity as Agent) have any  obligation  to
      make any  funding  or shall any Bank be  obligated  to fund more than its
      Commitment  Percentage  of the  requested  Revolving  Credit  Loan  or to
      increase  its  Commitment  Percentage  on  account  of  such  failure  or
      otherwise.

           (b)  The Agent may,  unless  notified  to the  contrary  by any Bank
      prior to a Drawdown  Date,  assume that such Bank has made  available  to
      the Agent on such  Drawdown  Date the  amount of such  Bank's  Commitment
      Percentage  of the  Revolving  Credit  Loan to be  made on such  Drawdown
      Date,  and the Agent may (but it shall not be  required  to), in reliance
      upon such  assumption,  make  available to the  Borrower a  corresponding
      amount.  If any Bank makes  available  to the Agent such amount on a date
      after such Drawdown  Date,  such Bank shall pay to the Agent on demand an
      amount equal to the product of (i) the  average,  computed for the period
      referred to in clause (iii) below, of the weighted  average interest rate
      paid by the Agent for federal  funds  acquired  by the Agent  during each
      day  included  in such  period,  multiplied  by (ii) the  amount  of such
      Bank's  Commitment  Percentage of such Revolving Credit Loan,  multiplied
      by (iii) a fraction,  the  numerator  of which is the number of days that
      elapsed from and  including  such  Drawdown Date to the date on which the
      amount of such Bank's  Commitment  Percentage  of such  Revolving  Credit
      Loan  shall  become   immediately   available  to  the  Agent,   and  the
      denominator  of which is 365. A statement of the Agent  submitted to such
      Bank with  respect to any  amounts  owing under this  paragraph  shall be
      prima  facie  evidence  of the  amount due and owing to the Agent by such
      Bank.

      3.  REPAYMENT OF THE REVOLVING CREDIT LOANS.

           3.1. Maturity. The  Borrower  promises  to pay  on  the  Maturity
Date,  and there shall become  absolutely due and payable on the Maturity Date,
all unpaid  principal of the Revolving  Credit Loans  outstanding on such date,
together  with any and all  accrued  and unpaid  interest  thereon,  
the unpaid balance of any fees  accrued  through  such 
<PAGE>

date,  and any and all other unpaid amounts due under this  Agreement,
the Revolving  Credit Notes or any other of the Loan Documents.

           3.2. Optional  Repayments of Revolving Credit Loans. The Borrower
shall have the right,  at its  election,  to prepay the  outstanding  amount of
the Revolving  Credit Loans,  in whole or in part, at any time without  penalty
or premium;  provided that the  outstanding  amount of any LIBOR Rate Loans may
not be prepaid  unless the  Borrower  pays all amounts  due and  payable  under
4.8  hereof  for  each  LIBOR  Rate  Loan  so  prepaid  at the  time  of  such
prepayment.  The Borrower  shall give the Agent,  no later than 10:00 a.m.,  at
least five (5) Business Days prior written  notice of any  prepayment  pursuant
to this 3.2 of any  Revolving  Credit Loans,  specifying  the proposed date of
prepayment of Revolving  Credit Loans and the  principal  amount to be prepaid.
The Agent shall  provide  each Bank with a copy of such notice  promptly  after
its receipt  thereof.  Each such partial  prepayment  of the  Revolving  Credit
Loans shall be a minimum of $100,000,  or, if less, the outstanding  balance of
the  Revolving  Credit Loans then being  repaid,  shall be  accompanied  by the
payment of all charges  outstanding  on all  Revolving  Credit Loans so prepaid
and of all accrued  interest on the  principal  prepaid to the date of payment,
and shall be applied,  in the absence of instruction by the Borrower,  first to
the  principal  of Base Rate  Loans  and then to the  principal  of LIBOR  Rate
Loans, at the Agent's option.

      4.  CERTAIN GENERAL PROVISIONS.

           4.1.Funds for Payments.

           (a)  All  payments  of  principal,  interest,  fees,  and any  other
      amounts due hereunder or under any of the other Loan  Documents  shall be
      made to the Agent,  for the  respective  accounts of the Banks or (as the
      case may be) the  Agent,  at the  Agent's  Head  Office,  in each case in
      Dollars and in immediately available funds.

           (b)  All  payments by the  Borrower  hereunder  and under any of the
      other Loan  Documents  shall be made without setoff or  counterclaim  and
      free and clear of and without deduction for any taxes,  levies,  imposts,
      duties,  charges,  fees,  deductions,  withholdings,   compulsory  liens,
      restrictions  or  conditions  of any nature now or  hereafter  imposed or
      levied  by any  jurisdiction  or any  political  subdivision  thereof  or
      taxing or other  authority  therein  unless the  Borrower is compelled by
      law to make such  deduction or  withholding.  If any such  obligation  is
      imposed   upon  the   Borrower   with   respect   to   any  
      amount  payable   by   it  hereunder  or under  any  of 

<PAGE>

      the  other  Loan   Documents,  the  Borrower   shall  pay  to
      the  Agent,  for the  account of the Banks or (as the case may be)
      the Agent, on the date on which such amount is due and payable  hereunder
      or under such other Loan Document,  such additional  amount in Dollars as
      shall be  necessary  to enable the Banks to  receive  the same net amount
      which  the  Banks  would  have  received  on such  due  date  had no such
      obligation  been imposed  upon the  Borrower.  The Borrower  will deliver
      promptly to the Agent  certificates or other valid vouchers for all taxes
      or other  charges  deducted from or paid with respect to payments made by
      the  Borrower  hereunder  or under such other  Loan  Document.  The Agent
      shall  provide  each Bank with a copy of such notice  promptly  after its
      receipt thereof.

           (c)  The Agent  and the Banks  acknowledge  that the  Borrower  will
      establish a demand deposit  account with the Agent and intends to deposit
      into such  account on a monthly  basis an amount not less than the amount
      of  interest  due  and  payable  during  such  month.   Without  limiting
      anything  set forth  herein,  the Agent  shall be entitled to charge such
      account of the Borrower  with the Bank for any sum due and payable by the
      Borrower   hereunder   or  under  any  of  the  other   Loan   Documents.
      Notwithstanding  anything  to the  contrary  contained  herein  or in any
      other Loan  Document,  if, on any date that a payment is due to the Agent
      or the Banks  under the Loan  Documents,  there are  sufficient  funds in
      such  account to make such  payment and there is no legal  impediment  of
      any kind to Agent's  effecting  such  payment by debiting  such  account,
      then Borrower  shall have no obligation to make such payment  (other than
      by way of Agent's  debiting  such  account in  accordance  with the above
      provisions  of this  paragraph  (c)) and no late  charge or default  rate
      interest  shall  accrue,  and no  Event of  Default  shall  result,  from
      Borrower's  failure  to make such  payment  while such  sufficient  funds
      remain in such account to make such payment.

           4.2.Computations. All  computations of interest on the Revolving
Credit  Loans and of  commitment  or other  similar fees (if any) to the extent
applicable  shall be based on a 360-day year and paid for the actual  number of
days  elapsed.  Except as  otherwise  provided  in the  definition  of the term
"Interest  Period"  with  respect  to LIBOR  Rate  Loans,  whenever  a  payment
hereunder  or under any of the other Loan  Documents  becomes due on a day that
is not a Business  Day, the due date for such payment  shall be extended to the
next   succeeding   Business  Day,  and  interest   shall  accrue  during  such
extension.  The  outstanding   amount  of  the  Revolving  Credit  Loans 
as   reflected   on   the   Revolving  Credit   Note 

<PAGE>

Record from time to time shall  constitute  prima facie evidence of the
principal amount thereof.

           4.3. Inability  to Determine LIBOR  Rate. In the event,  prior to
the  commencement  of any Interest  Period relating to any LIBOR Rate Loan, the
Agent shall  reasonably  determine that adequate and reasonable  methods do not
exist for  ascertaining  the LIBOR  Rate that  would  otherwise  determine  the
rate of interest to be  applicable  to any LIBOR Rate Loan during any  Interest
Period (and the rate of interest  applicable to all  indebtedness due and owing
to the Agent by any  Person to the  extent  that the  principal  amount of such
indebtedness  was  intended  to bear  interest  at the LIBOR  Rate),  the Agent
shall  forthwith give notice of such  determination  (which shall be conclusive
and  binding on the  Borrower)  to the  Borrower  and the Banks.  In such event
(a) any  Completed  Loan  Request  with  respect to LIBOR  Rate Loans  shall be
automatically  withdrawn  and shall be deemed a  request  for Base Rate  Loans,
(b)  each  LIBOR  Rate  Loan  will  automatically,  on the last day of the then
current  Interest  Period  thereof,  become  a Base  Rate  Loan,  and  (c)  the
obligations  of the Banks to make  LIBOR Rate Loans  shall be  suspended  until
the Agent  reasonably  determines  that the  circumstances  giving rise to such
suspension  no longer  exist,  whereupon the Agent shall so notify the Borrower
and the Banks.

           4.4. Illegality. Notwithstanding  any other provisions herein, if
any  present  or  future  law,  regulation,  treaty  or  directive  or  in  the
interpretation  or  application  thereof shall make it unlawful for any Bank to
make or maintain  LIBOR Rate Loans,  such Bank shall  forthwith  give notice of
such  circumstances  to the Borrower and thereupon  (a) the  Commitment of such
Bank to make LIBOR  Rate  Loans or convert  Base Rate Loans to LIBOR Rate Loans
shall  forthwith be suspended  and (b) such Bank's  Commitment  Percentage of a
LIBOR Rate Loans then  outstanding  shall be  converted  automatically  to Base
Rate Loans on the last day of each  Interest  Period  applicable  to such LIBOR
Rate Loans or within such  earlier  period as may be required by law, all until
such time as it is no longer  unlawful for such Bank to make or maintain  LIBOR
Rate  Loans.  The  Borrower  hereby  agrees  promptly  to pay the Agent for the
account  of such  Bank,  upon  demand,  any  additional  amounts  necessary  to
compensate  such  Bank for any  out-of-pocket  costs  incurred  by such Bank in
making  any  conversion  required  by this  4.4  prior  to the  last day of an
Interest  Period with respect to a LIBOR Rate Loan,  including  any interest or
fees  payable by such Bank to lenders of funds  obtained by it in order to make
or maintain its LIBOR Rate Loans hereunder.

<PAGE>


           4.5.  Additional  Costs,  Etc.  If any present or future applicable
law,  which  expression,   as  used  herein,   includes  statutes,   rules  and
regulations  thereunder and  interpretations  thereof by any competent court or
by any  governmental  or other  regulatory  body or official  charged  with the
administration  or  the  interpretation   thereof  and  requests,   directives,
instructions  and notices at any time or from time to time  hereafter made upon
or otherwise  issued to any Bank by any central bank or other fiscal,  monetary
or other  authority  (whether or not having the force of law, but if not having
the  force  of law,  then  generally  applied  by the  Banks  with  respect  to
similar loans), shall:

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

           (b)  materially  change the basis of taxation (except for changes in
      taxes on income or profits) of payments to any Bank of the  principal  of
      or the  interest  on any  Revolving  Credit  Loans or any  other  amounts
      payable to the Agent or any Bank under this  Agreement  or the other Loan
      Documents, or

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

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

      and the result of any of the foregoing is

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

                (ii) to reduce  the  amount  of  principal,  interest  or other
           amount  payable to  such Bank  hereunder  on  account  of 

<PAGE>


           such  Bank's Commitment or any of the Revolving Credit Loans, or

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

      then, and in each such case, the Borrower will,  upon demand made by such
Bank at any time and from  time to time and as often as the  occasion  therefor
may  arise,  pay to such  Bank  such  additional  amounts  as such  Bank  shall
determine  in good  faith to be  sufficient  to  compensate  such Bank for such
additional  cost,  reduction,  payment  or  foregone  interest  or  other  sum,
provided  that such Bank is  generally  imposing  similar  charges on its other
similarly situated borrowers.

           4.6. Capital  Adequacy. If  any future  law,  governmental  rule,
regulation,  policy,  guideline or  directive  (whether or not having the force
of law,  but if not  having  the force of law,  then  generally  applied by the
Banks with respect to similar loans) or the  interpretation  thereof by a court
or governmental  authority with appropriate  jurisdiction affects the amount of
capital  required  or  expected  to be  maintained  by  banks  or bank  holding
companies  and any Bank or the Agent  determines  that the  amount  of  capital
required to be  maintained  by it is increased  by or based upon the  existence
of  Revolving  Credit  Loans made or deemed to be made  pursuant  hereto,  then
such Bank or the Agent may notify the  Borrower of such fact,  and the Borrower
shall  pay to such  Bank or the  Agent  from  time  to  time on  demand,  as an
additional fee payable  hereunder,  such amount as such Bank or the Agent shall
determine  in good  faith  and  certify  in a notice to the  Borrower  to be an
amount  that  will   adequately   compensate   such  Bank  in  light  of  these
circumstances  for its increased costs of maintaining  such capital.  Each Bank
and the Agent shall  allocate such cost  increases  among its customers in good
faith and on an equitable  basis,  and will not charge the  Borrower  unless it
is  generally  imposing  a  similar  charge  on its  other  similarly  situated
borrowers.

           4.7. Certificate. A  certificate  setting  forth  any  additional
amounts  payable  pursuant  to  4.5  or 4.6 and a brief  explanation  of such
amounts  which are due,  submitted  by any Bank or the  Agent to the  Borrower,
shall be prima facie evidence that such amounts are due and owing.

<PAGE>


           4.8. Indemnity. In  addition  to the  other  provisions  of  this
Agreement  regarding such matters,  the Borrower  agrees to indemnify the Agent
and each Bank and to hold the Agent and each  Bank  harmless  from and  against
any loss,  cost or expense  (but  excluding  any loss of  anticipated  profits)
that the Agent or such Bank may  sustain or incur as a  consequence  of (a) the
failure by the Borrower to pay any  principal  amount of or any interest on any
LIBOR  Rate  Loans as and  when due and  payable,  including  any such  loss or
expense  arising  from  interest  or fees  payable by the Agent or such Bank to
lenders of funds  obtained  by it in order to  maintain  its LIBOR Rate  Loans,
(b) the failure by the  Borrower to make a borrowing  or  conversion  after the
Borrower  has  given  a  Completed  Loan  Request  for a LIBOR  Rate  Loan or a
Conversion  Request  for a LIBOR Rate Loan,  and (c) the making of any  payment
of a LIBOR  Rate Loan or the  making of any  conversion  of any such  Revolving
Credit  Loan to a Base  Rate  Loan on a day  that  is not the  last  day of the
applicable  Interest Period with respect  thereto,  including  interest or fees
payable by the Agent or a Bank to lenders of funds  obtained  by it in order to
maintain any such LIBOR Rate Loans.

           4.9. Interest on Overdue  Amounts. Overdue  principal and (to the
extent  permitted by applicable  law)  interest on the  Revolving  Credit Loans
and all  other  overdue  amounts  payable  hereunder  or under any of the other
Loan  Documents  shall  bear  interest  payable  on  demand at a rate per annum
equal to four  percent  (4%)  above the Base Rate until  such  amount  shall be
paid in full (after as well as before  judgment).  In  addition,  the  Borrower
shall  pay a  late  charge  equal  to  three  percent  (3%)  of any  amount  of
principal  (other than  principal  due on the Maturity  Date)  and/or  interest
charges on the  Revolving  Credit  Loans which is not paid within ten (10) days
of the date when due.

      5.  BORROWING BASE.

     5.1. Additions and  Replacements to Eligible  Properties.From  time to time
          during the term of the Revolving  Credit  Loans,  due to the fact that
          the Borrower may wish to enter into financial  transactions  involving
          certain Eligible  Properties,  or for other reasons,  the Borrower may
          request in  writing  to the Banks to  replace  or add to the  Eligible
          Properties  to be used in  calculating  the Borrowing  Base.  Any such
          request  for  replacement  or  addition  may be approved by the Agent,
          which  approval  may be given  or  withheld  by the  Agent in its sole
          discretion,  as hereinafter provided.  The Agent shall approve or deny
          such request in writing  within thirty (30) days of receipt,  provided
          that the Agent has received,  at the time such request is made, all of
          the  information  regarding the Real Estate Asset proposed to be added
          to the

<PAGE>

Eligible Properties to be used in calculating the Borrowing Base required by the
Eligible  Property  Conditions.  Any  property  so  approved  by the  Agent as a
replacement  of  or  addition  to  the  Eligible  Properties  (a  "New  Eligible
Property")  shall  thereafter be included in computing the Borrowing  Base.  The
Borrower  shall  reimburse  the Agent  for its  reasonable  costs  and  expenses
(including  reasonable  attorneys' fees and expenses of the Agent's  counsel) in
evaluating the proposed New Eligible  Property.  Without in any way limiting the
absolute  discretion  of the Agent to approve  or deny any  request to include a
property  as a New  Eligible  Property,  before a  property  shall  become a New
Eligible Property,  the Borrower shall have, in any case,  satisfied each of the
following conditions (the "Additional Eligible Property Conditions"):

           (a)  The  Acquisition  Conditions  have been met with respect to the
      Property  (whether  or not the  proposed  New  Eligible  Property is then
      owned  by  the  Borrower  or an  Additional  Guarantor  or is a  proposed
      Acquisition Property);

           (b)  The Borrower or an Additional  Guarantor (as applicable)  shall
      satisfy,  with  respect to the proposed  New  Eligible  Property,  to the
      satisfaction of the Agent (in its sole discretion),  each of the Eligible
      Property Conditions with respect to each New Eligible Property;

           (c)  No  Default  or  Event  of  Default   shall  exist  under  this
      Agreement or any other Loan  Document at the time of any  acceptance of a
      New Eligible  Property,  unless such Default or Event of Default would be
      cured  thereby  and  the  Borrower  shall  have  delivered  a  compliance
      certificate  in the form of Exhibit E to the Agent (with  copies for each
      Bank) to such effect;

           (d)  The New Eligible  Property shall be 100% owned in fee simple by
      the Borrower or an  Additional  Guarantor (as  applicable)  and the title
      thereof shall be  unencumbered by any mortgage,  deed of trust,  security
      agreement or other lien (whether voluntary or involuntary); and

           (e)  The Agent  shall,  in its sole  discretion,  have  approved  in
      writing the  addition  of the  property as a New  Eligible  Property  for
      inclusion in the Borrowing Base.

           5.2.Removal  from  Eligible  Properties. From  time to time during
the term of the Revolving  Credit Loans,  due to the fact that the Borrower may
wish  to  enter  into  financial   transactions   involving   certain  Eligible
Properties,  or for other  reasons,  the  Borrower  may request in 

<PAGE>


      writing  that the Banks  allow  the  Borrower  to  remove an  Eligible
     Property from being used in calculating the Borrowing Base. The Agent shall
     approve or deny such request in writing within thirty (30) days of receipt.
     The  Borrower  shall  reimburse  the  Agent  for its  reasonable  costs and
     expenses (including  reasonable attorneys' fees and expenses of the Agent's
     counsel) in evaluating  the proposed  removal.  The Agent shall approve the
     removal so long as:  (i) the  Borrower  demonstrates  to the Agent that any
     such removal shall in no way affect any of the Borrower's  representations,
     warranties,  or  covenants  hereunder,  including,  but not limited to, the
     Borrower's  covenants  regarding the Borrowing Base, and (ii) no Default or
     Event of Default shall have occurred and be continuing hereunder.


           5.3.Recourse  Obligations.  Notwithstanding  the  foregoing,  the
Obligations  are full recourse  obligations of the Borrower,  the Guarantor and
the  Additional  Guarantors and all of their  respective  assets and properties
shall be  available  for the  payment  in full in cash and  performance  of the
Obligations.

      6.  REPRESENTATIONS  AND  WARRANTIES.  The  Borrower  and the  Guarantor
represent  and  warrant to the Agent and the Banks on the date  hereof,  on the
date  of  any  Revolving  Loan  Request,  and  on  each  Drawdown  Date  of any
Revolving  Credit Loan that:  (a) each of the Borrower,  the Guarantor and each
Additional  Guarantor is duly formed or  organized,  validly  existing,  and in
good standing under the laws of its  jurisdiction of  organization  and is duly
qualified  and in  good  standing  in  every  other  jurisdiction  where  it is
required to be so qualified,  and the  execution,  delivery and  performance by
each of the Borrower,  the Guarantor and each Additional  Guarantor of the Loan
Documents (i) are within its trust,  partnership,  limited liability company or
corporate  authority,  (ii) have been duly  authorized,  (iii) do not  conflict
with or contravene its Charter  Documents;  (b) the  outstanding  equity of the
Borrower on the date hereof is  comprised  of a general  partner  interest  and
limited  partner  interests,  all of  which  have  been  duly  issued  and  are
outstanding  and fully paid and,  with  respect to limited  partner  interests,
nonassessable,  all as set  forth  in  Schedule  6(b)  hereto;  (c) each of the
direct or  indirect  interests  of the  Borrower  in any  Partially-Owned  Real
Estate  Holding  Entity is set forth on Schedule  6(c) hereto (as updated  from
time to time in  accordance  with  the  terms  hereof),  including  the type of
entity in which the  interest is held,  the  percentage  interest  owned by the
Borrower  in such  entity,  the  capacity  in  which  the  Borrower  holds  the
interest,  and the Borrower's  ownership interest therein;  provided,  that the
Borrower  agrees to update (at the end of each calendar  quarter) such Schedule
6(c) in connection with any additional  Investment in any Partially-Owned 
 Real  Estate  Holding  Entity  after  the  date  hereof  that  is


<PAGE>

permitted by the terms hereof;  (d) upon  execution and delivery  thereof,  each
Loan Document shall  constitute the legal,  valid and binding  obligation of the
Borrower,  the  Guarantor  or the  Additional  Guarantors,  as the  case may be,
enforceable  in  accordance  with  its  terms;  (e)  each of the  Borrower,  the
Guarantor and each  Additional  Guarantor has good and  marketable  title to all
Eligible  Properties  and other material  properties,  subject only to Permitted
Liens  and  possesses  or has  the  legal  right  to use all  assets,  including
intellectual properties, franchises and Consents adequate for the conduct of its
business as now conducted, without known conflict with any rights of others; (f)
the  Borrower has  provided to the Agent and the Banks its  unaudited  pro forma
Financials  as of December 31, 1997 and for the period then ended,  and such pro
forma Financials are complete and correct in all material respects and have been
prepared in accordance with GAAP  consistently  applied;  (g) since December 31,
1997,  there has been no materially  adverse  change of any kind in the Borrower
which would have a Materially  Adverse Effect; (h) the Guarantor has provided to
the Agent and the Banks (i) the pro forma condensed  consolidated  balance sheet
of the  Guarantor  and its  Subsidiaries  (including,  without  limitation,  the
Borrower) as of December 31, 1997 and their related  consolidated  statements of
operations  for the fiscal year ended December 31, 1997 and (ii) the SEC Filings
which  contain a summary of  information  relating to the Real Estate Assets and
such  information  is true and  correct  in all  material  respects;  (i)  since
December 31, 1997,  there has been no materially  adverse  change of any kind in
the Guarantor which would have a Materially  Adverse Effect; (j) each Additional
Guarantor  has  delivered  to the Agent and the  Banks its  unaudited  operating
statements  as at  December  31,  1997 and for the  period  then  ended and such
operating  statements  are complete and correct in all  material  respects;  (k)
since December 31, 1997, there has been no materially adverse change of any kind
in any Additional  Guarantor which would have a Materially  Adverse Effect;  (l)
there are no legal or other  proceedings  or  investigations  pending or, to the
best  knowledge of the  Borrower,  the  Guarantor or any  Additional  Guarantor,
threatened  against the  Borrower,  the Guarantor or such  Additional  Guarantor
before any court,  tribunal or regulatory  authority  which would,  if adversely
determined,  alone  or  together,  have a  Materially  Adverse  Effect;  (m) the
execution,  delivery, performance of its obligations, and exercise of its rights
under the Loan  Documents by the Borrower,  the  Guarantor  and each  Additional
Guarantor, including borrowing under this Agreement (i) to the best knowledge of
the Borrower and the Guarantor  after due inquiry,  do not require any Consents;
and (ii) are not and will not be in conflict  with or prohibited or prevented by
(A)  any  Requirement  of  Law,  (B)  any  Charter  Document,  trust  minute  or
resolution, or (C) in any material respect,  instrument,  agreement or provision
thereof, in each case



<PAGE>
 binding on the Borrower,  the Guarantor or any  Additional  Guarantor
or affecting  any property of the  Borrower,  the  Guarantor or any  Additional
Guarantor;   (n)  neither  the  Guarantor,  the  Borrower  nor  any  Additional
Guarantor  is in  violation  of (A)  any  Charter  Document,  trust  minute  or
resolution,  (B) any  instrument  or  agreement,  in each case binding on it or
affecting  its  property,  or (C) any  Requirement  of Law,  in a manner  which
could have a Materially  Adverse Effect,  including,  without  limitation,  all
applicable  federal and state tax laws, ERISA and Environmental  Laws; (o) none
of the Eligible  Properties  shall be subject to or encumbered by any mortgage,
deed of trust,  security  agreement,  lien or encumbrance  of any kind,  except
for Permitted  Liens;  (p) except as set forth on Schedule 6(p) attached hereto
and other  Investments  expressly  permitted by the terms  hereof,  neither the
Guarantor  nor the  Borrower  has any  Subsidiaries  and is not a party  to any
partnership  or joint  venture;  (q) the Guarantor  qualifies and has not taken
any  action  that  would  prevent  it from  qualifying  as a REIT  pursuant  to
856-860  of the  Code  and the  related  regulations  for its tax  year  ended
December 31, 1997 and all  subsequent  years  during the term of the  Revolving
Credit  Loans;  (r) the  Borrower has provided the Agent on behalf of the Banks
with Lease  Summaries and information  packages  regarding each of the Eligible
Properties,  and such  information  packages  fairly  represent the position of
each  of the  Eligible  Properties  on the  date  hereof  or as of the  date of
delivery  thereof (if applicable);  (s) neither the Borrower,  the Guarantor or
any  of  their  respective  Subsidiaries  is  an  "investment  company",  or an
"affiliated company" or a "principal  underwriter" of an "investment  company",
as such terms are defined in the  Investment  Company  Act of 1940;  and (t) no
security of the  Guarantor  traded on a National  Securities  Exchange has been
suspended  from  trading  or  de-listed,  except  that  the  securities  of the
Guarantor  may have been  suspended  from trading for brief periods of time due
to various public offerings of the securities of the Guarantor.

      7.  AFFIRMATIVE  COVENANTS.  The  Borrower and the Guarantor jointly and
severally  agree that until the  termination  of the Commitment and the payment
and  satisfaction  in  full  of all  the  Obligations,  the  Borrower  and  the
Guarantor  will  comply  with  their   respective   obligations  as  set  forth
throughout  this  Agreement and will,  and will cause each of their  respective
Subsidiaries to:

           (a)  furnish  the  Agent  on  behalf  of the  Banks:  (i) as soon as
      available  but in any event  within  ninety  (90) days after the close of
      each fiscal year,  the  Guarantor's  audited  Financials  for such fiscal
      year, certified by the Guarantor's  accountants;  (ii) within ninety (90)
      days after the close of each fiscal year (or 

<PAGE>


           contemporaneously with the filing thereof with the SEC), the Form
          10-K (or with  respect to the 1997 fiscal year of the  Guarantor,  the
          Form 10-K) filed by the  Guarantor  with the SEC with  respect to such
          fiscal  year;  (iii)  as soon as  available  but in any  event  within
          forty-five  (45) days  after  the end of each  fiscal  quarter  of the
          Guarantor the Form 10-Q  statement (or with respect to the 1997 fiscal
          year  of the  Guarantor,  the  Form  10-QSB  statement)  filed  by the
          Guarantor  with the SEC with  respect  to such  fiscal  quarter,  (iv)
          together  with  the  quarterly  and  annual  audited   Financials,   a
          certificate  of the Borrower and the Guarantor (in  substantially  the
          form  attached  to  Exhibit  E  hereto)  setting  forth   computations
          demonstrating  compliance  with  the  Borrower's  and the  Guarantor's
          financial  covenants  set forth in 9 hereof,  and  certifying  that no
          Default or Event of Default has  occurred,  or if it has,  the actions
          taken by the  Borrower or the  Guarantor  with  respect  thereto;  (v)
          contemporaneously  with the  filing,  mailing  or  issuances  thereof,
          copies of all  material  of a financial  nature  filed with the SEC or
          sent to the  owners/stockholders  or partners of the  Guarantor or the
          Borrower  and  copies  of all  press  and  news  releases  made by the
          Borrower,  the Guarantor or any  Additional  Guarantor;  (vi) promptly
          after its receipt  thereof,  annual  financial  information  regarding
          commercial  tenants  in the  Eligible  Properties  as  applicable  and
          available  and  (vii)  if a  Default  or  an  Event  of  Default  or a
          materially adverse change in any of the Eligible Properties shall have
          occurred,  Appraisals (or updates thereof if required) of the Eligible
          Properties  within  thirty  (30) days  after the  request of the Agent
          therefor;  (viii) from time to time,  upon request of the Agent or the
          Banks,  such other financial data and information  about the Borrower,
          the   Guarantors,   the  Additional   Guarantors,   their   respective
          Subsidiaries,  the Real Estate Assets and as the Agent may  reasonably
          request,  and which is prepared by such Person in the normal course of
          its business or is required  for  securities  and tax law  compliance,
          including without limitation, pro forma financial statements, complete
          rent rolls and summary  rent  rolls,  existing  governmental  reports,
          surveys,  title  insurance  policies and insurance  certificates  with
          respect to the Real Estate Assets.


           (b)  keep true and  accurate  books of  account in  accordance  with
      GAAP  and  to   permit   the   Agent  or  any  Bank  or  its   designated
      representatives  during normal business hours and upon  reasonable  prior
      notice (unless,  in each case, a Default or Event of Default has occurred
      whereupon no such notice shall be required) to inspect the  Borrower's or
      the  Guarantor's  premises  and to  examine  and be 

<PAGE>


advised as to such or other business records upon the request of the 
Agent or such Bank;

           (c)  maintain in good  operating  condition its business and assets,
      to keep its  business  and assets  adequately  insured,  to maintain  its
      chief  executive  office in the United  States,  to continue to engage in
      the same lines of business,  and to comply with all  Requirements of Law,
      including ERISA and Environmental Laws;

           (d)  notify the Agent on behalf of the Banks  promptly in writing of
      (i)  the  occurrence  of any  Default  or  Event  of  Default,  (ii)  any
      noncompliance  with  ERISA  or any  Environmental  Law or  proceeding  in
      respect thereof which could have a Materially  Adverse Effect,  (iii) any
      change of name or address,  (iv) any threatened or pending  litigation or
      similar  proceeding   affecting  the  Borrower,   the  Guarantor  or  any
      Additional  Guarantor or any of the Eligible  Properties which could have
      a  Materially   Adverse  Effect  or  any  material  change  in  any  such
      litigation or proceeding  previously  reported and (v) claims against any
      assets or properties of the Borrower or the Guarantor  which could have a
      Materially Adverse Effect;

           (e)  use the  proceeds  of the  Revolving  Credit  Loans  solely  to
      finance  acquisitions  by the Borrower or Subsidiaries of the Borrower of
      Real Estate Assets and to pay reasonable and customary  costs  associated
      with such  acquisitions  in accordance  with the terms hereof and for the
      repair and  improvement  of presently  owned Real Estate  Assets and such
      acquired  Real  Estate  Assets,  and  not  for the  carrying  of  "margin
      security" or "margin  stock" within the meaning of Regulations U and X of
      the Board of Governors of the Federal  Reserve  System,  12 C.F.R.  Parts
      221 and 224; provided, that,  notwithstanding the foregoing, the Borrower
      may use a portion of the aggregate  outstanding  principal  amount of the
      Revolving  Credit Loans not in excess of $5,000,000  for general  working
      capital purposes of the Borrower;

           (f)  cooperate  with the Agent  and the  Banks,  take  such  action,
      execute such  documents,  and provide such  information  as the Agent and
      the Banks may from time to time  reasonably  request in order  further to
      effect the  transactions  contemplated  by and the  purposes  of the Loan
      Documents;

           (g)  do or cause to be done all  things  necessary  (i) to  preserve
      and keep in full force and effect the  existence  of the  Guarantor  as
     a  Maryland  real  estate  investment  trust  and  its 

<PAGE>
               election to be taxed as a REIT under the  provisions  of Sections
          856-860 of the Code,  or such other laws as may be applicable in order
          to maintain the current material  characteristics  of the Guarantor as
          an investment vehicle and tax entity, and (ii) to preserve and keep in
          full  force and  effect the  listing  of the  Guarantor  on a National
          Securities  Exchange,  (iii) to cause the  Guarantor  to  continue  to
          operate  as a  fully-integrated,  self-administered  and  self-managed
          REIT,  which,  together  with its  Subsidiaries  owns and  operates an
          improved  property  portfolio  comprised  primarily of  apartment  and
          retail  properties,  (iv) to cause the  Guarantor not to engage in any
          business  other than the  business  of acting as a REIT and serving as
          the  general  partner  and limited  partner of the  Borrower  and as a
          member,  partner or  stockholder  of other  Persons,  (v) to cause the
          Guarantor  to  conduct  all  or  substantially  all  of  its  business
          operations through the Borrower or through subsidiary  partnerships or
          other entities in which (x) the Borrower or the Guarantor  directly or
          indirectly  owns or controls as least 51% of the voting  interests  as
          well  being  entitled  to at  least  51% of  the  profits  and  losses
          distributions  and (y)  the  Borrower  or the  Guarantor  directly  or
          indirectly  (through  wholly-owned  Subsidiaries) acts as sole general
          partner or managing member.

           (h)  maintain at least one  operating  account of the  Borrower  and
      the Guarantor with the Agent; and

           (i)  take  all  steps  reasonably  necessary  to  cause  any and all
      payments due to any third party under any management fee agreements  with
      respect to the Eligible  Properties to be subordinated in full in writing
      to  the  prior  payment  of  the   Revolving   Credit  Loans  during  the
      continuance  of a  Default  or an Event  of  Default,  each on terms  and
      conditions reasonably satisfactory the Agent in all respects.

      8.  NEGATIVE  COVENANTS. The  Borrower  and the  Guarantor  jointly and
severally  agree that until the  termination  of the Commitment and the payment
and  satisfaction  in  full  of all  the  Obligations,  the  Borrower  and  the
Guarantor  will not, and will not permit any of their  respective  Subsidiaries
to,:

           (a)  create,  incur  or  assume  any  Indebtedness  other  than  (i)
      Indebtedness   to  the  Agent  and  the  Banks  arising  under  the  Loan
      Documents,  (ii)  Indebtedness  in respect of the acquisition of personal
      property  which  does not exceed  $500,000  in  aggregate  amount for the
      Borrower, the Guarantor and their respective



<PAGE>

               Subsidiaries,  (iii) current liabilities not incurred through the
          borrowing of money or the obtaining of credit except credit on an open
          account customarily extended, (iv) Indebtedness in respect of taxes or
          other governmental  charges contested in good faith and by appropriate
          proceedings;   (v)   Indebtedness  of  the  Borrower  or  any  of  its
          Subsidiaries, the payment of which is without recourse to the Borrower
          or such  Subsidiary,  incurred in connection  with the  acquisition of
          Real  Estate  Assets  (other  than  the  Eligible  Properties)  or the
          financing or  refinancing  of any  permitted  Indebtedness  secured by
          liens on such Real Estate Assets; and (vi) Recourse  Indebtedness (not
          including the Revolving Credit Loans) of the Borrower or the Guarantor
          in an aggregate principal amount not in excess of five percent (5%) of
          Consolidated Total Adjusted Asset Value at any time;

           (b)  create  or incur  any  Liens on any  property  or assets of the
      Borrower,  the Guarantor or any of their respective  Subsidiaries  except
      (i) Liens  securing the  Obligations;  (ii) Liens securing taxes or other
      governmental  charges  not yet due;  (iii)  deposits  or pledges  made in
      connection  with social  security  obligations;  (iv) Liens of  carriers,
      warehousemen,  mechanics  and  materialmen,  less than 120 days old as to
      obligations   not  yet  due;   (v)   easements,   rights-of-way,   zoning
      restrictions  and  similar  minor  Liens  which  individually  and in the
      aggregate do not have a Materially  Adverse  Effect;  (vi) purchase money
      security   interests  in  personal   property   securing  purchase  money
      Indebtedness  permitted by Section  8(a)(ii),  covering only the personal
      property so acquired;  (vii)  mortgage  liens on, pledges of and security
      interests  in  (A)  the  Real  Estate  Assets  other  than  the  Eligible
      Properties acquired with Indebtedness  permitted by Section 8(a)(v),  (B)
      any personal  property of the Borrower,  the Guarantor or such Subsidiary
      directly  related or  appurtenant  to such Real Estate Assets and (C) if,
      and only  if,  the  applicable  Subsidiary  that  incurs  such  permitted
      Indebtedness  and  grants  such  liens on such  Real  Estate  Assets  and
      related personal  property is a special purpose entity that owns only the
      Real Estate  Assets and  personal  property  that  secure the  applicable
      permitted   Indebtedness,   the  outstanding  equity  interests  of  such
      Subsidiary,  in each case that  secure such  Indebtedness  and cover only
      the  Real  Estate  Assets  and  personal  property  directly  related  or
      appurtenant to such Real Estate Assets so acquired and equity  interests;
      and (viii)  liens  securing  the  payment of  Indebtedness  permitted  by
      8(a)(vi)  hereof that encumber only the Real Estate Asset  acquired with
      the initial proceeds of such Indebtedness;


<PAGE>

           (c)  make any Investments  other than  investments in (i) marketable
      obligations  of the United  States  maturing  within  one (1) year,  (ii)
      certificates of deposit,  bankers' acceptances and time, money market and
      demand  deposits  of United  States  Federal  and state  chartered  banks
      having  total  assets in excess  of  $1,000,000,000,  (iii) as long as no
      Default or Event of Default  shall have  occurred  and be  continuing  or
      would result  therefrom  Investments  consisting of (A) all of the issued
      and  outstanding  capital stock of, or equity  interests in, a Subsidiary
      of the  Borrower  or (B) a  majority  of the  capital  stock of or equity
      interests  in a  Partially-Owned  Real Estate  Holding  Entity,  (iv) any
      other  investments  made by the  Guarantor in the ordinary  course of the
      Guarantor's  business in a manner  consistent  with past practice if such
      investments  qualify  under  Section  856(c)(5)(A)  of the  Code  (or any
      successor  regulation  thereto),  for  purposes of  inclusion in the "75%
      asset test" relating to the Guarantor's status as a REIT; provided,  that
      the Guarantor may not make any  investments  in other REITs,  unless such
      Investment  in any single REIT does not exceed more than fifteen  percent
      (15%) of the  Guarantor's  total assets,  determined  in accordance  with
      GAAP and provided,  further,  that the aggregate value of all Investments
      under  this  subsection  (c)(iv)  shall  not  exceed  at any time  thirty
      percent  (30%)  of the  total  assets  of the  Guarantor,  determined  in
      accordance with the Code and the regulations promulgated thereunder,  (v)
      investments  in respect of  Acquisition  Properties  or other Real Estate
      Assets  acquired by the Borrower after the date hereof in accordance with
      the terms of this  Agreement;  (vi)  intercompany  loans  provided by the
      Borrower to the  Guarantor  solely in  connection  with stock  repurchase
      arrangements  of the  Guarantor;  or (vii) such other  investments as the
      Agent may from time to time approve in writing;

           (d)  become party to a merger,  or to effect any  disposition of any
      properties or assets other than by the Guarantor,  the Borrower or any of
      their respective  Subsidiaries in the ordinary course of their respective
      businesses  as a REIT or as a  Subsidiary  of a REIT,  or to  purchase or
      otherwise  acquire  assets  other  than the  acquisition  of  Acquisition
      Properties  or other Real Estate Assets or the making of  Investments  in
      accordance  with the terms hereof and the  purchase of personal  property
      in the ordinary course of their respective businesses;

           (e)  (i)in the case of the Borrower,  make (A) annual Distributions
      in excess of ninety  percent  (90%) of Funds from  Operations  or (B) any
      Distributions  during any period when any


<PAGE>

               Event of Default has occurred and is  continuing  or would result
          therefrom;  provided, however, that the Borrower may at all times make
          Distributions  to the extent  (after taking into account all available
          funds of the Guarantor  from all other  sources)  required in order to
          enable the  Guarantor  to continue to qualify as a REIT;  and (ii) the
          case of the Guarantor, during any period when any Event of Default has
          occurred and is continuing,  make any  Distributions  in excess of the
          Distributions  required  to be  made  by the  Guarantor  in  order  to
          maintain its status as a REIT;

           (f)  cause  or  permit  (a)  the  occupancy  for  all  Units  in the
      Eligible  Properties (under valid and enforceable  Leases with bona fide,
      third party  tenants) to be less than  ninety  percent  (90%) of all such
      Units at any time or (b) the  occupancy  for all Units in any  individual
      Eligible  Property  (under valid and  enforceable  Leases with bona fide,
      third party  tenants) to be less than  eighty  percent  (80%) of all such
      Units at any time; or

           (g)  at any time  cause or permit any of the  Partnership  Documents
      to be  modified,  amended  or  supplemented  in any  respect  whatsoever,
      without (in each case) the express prior  written  consent or approval of
      the Agent,  if such changes would affect the  Guarantor's  REIT status or
      otherwise  materially  adversely  affect  the rights of the Agent and the
      Banks hereunder or under any other Loan Document.

      9.  FINANCIAL  COVENANTS. The  Borrower and the  Guarantor  jointly and
severally  agree that until the  termination  of the Commitment and the payment
and  satisfaction  in  full  of all  the  Obligations,  the  Borrower  and  the
Guarantor will not:

           (a)  cause  or  permit  the  outstanding  principal  amount  of  the
      Revolving  Credit Loans to exceed sixty  percent (60%) of the Fair Market
      Value of Eligible  Properties at any time;  provided,  that, the Borrower
      shall  have the right to either  (i) pay down the  outstanding  principal
      amount of the Revolving  Credit Loans,  or (ii) request in writing to the
      Agent to add to the  Eligible  Properties  from  additional  Real  Estate
      Assets on which all real estate due  diligence  requirements  referred to
      in 2 hereof  have  been met and  subject  to the right of the  Agents to
      approve or disapprove such request in accordance with 5 hereof,  in each
      case in order to cure the  Borrower's  failure to comply  with this 9(a)
      within the time period referred to in 12.1(c) hereof;

<PAGE>


           (b)  cause or permit the ratio of Adjusted EBITDA  calculated solely
      with  respect  to the  Eligible  Properties  to Pro  Forma  Debt  Service
      Charges to be less than 1.75 to 1.0 as at the end of any  fiscal  quarter
      of the Guarantor ending on or after March 31, 1998;

           (c)  cause or permit the ratio of EBITDA to Total  Interest  Expense
      of the  Guarantor  to be less than 2.0 to 1.0 as at the end of any fiscal
      quarter of the Guarantor ending on or after the March 31, 1998.

           (d)  cause or permit the ratio of Operating  Cash Flow to Total Debt
      Service  for the  Guarantor  to be less than 1.75 to 1.0 as at the end of
      any  fiscal  quarter  of the  Guarantor  ending on or after the March 31,
      1998.

           (e)  cause  or  permit  Consolidated  Total  Liabilities  to  exceed
      fifty-five  percent (55%) of  Consolidated  Total Adjusted Asset Value as
      at the end of any  fiscal  quarter  of the  Guarantor  ending on or after
      March 31, 1998.

           (f)  cause or permit  Secured  Indebtedness  to exceed forty percent
      (40%) of  Consolidated  Total  Adjusted  Asset Value as at the end of any
      fiscal quarter of the Guarantor ending on or after March 31, 1998.

           (g)  cause or permit  Tangible  Net Worth to be less than the sum of
      (a) $90,000,000  plus (b) ninety percent (90%) of the aggregate  proceeds
      received by the Guarantor (net of fees and expenses  customarily incurred
      in  transactions  of such type) in connection with any offering of stock,
      stock equivalents,  partnership  interests,  or other, similar investment
      interests  in the  Guarantor  as at the end of any fiscal  quarter of the
      Guarantor ending on or after March 31, 1998.

           (h)  cause or permit the aggregate Budgeted  Renovation Costs of all
      Renovations  to  exceed  fifteen  percent  (15%)  of  Consolidated  Total
      Adjusted  Asset  Value  as at  the  end  of  any  fiscal  quarter  of the
      Guarantor ending on or after March 31, 1998.

           (i)  cause  or  permit   the  value  of   Unhedged   Variable   Rate
      Indebtedness  to  exceed  thirty  percent  (30%)  of  Consolidated  Total
      Adjusted  Asset  Value  as at  the  end  of  any  fiscal  quarter  of the
      Guarantor ending on or after March 31, 1998.


<PAGE>

      10. CONDITIONS  TO THE CLOSING  DATE. The  obligations  of the Banks to
enter  into  this  Agreement  shall  be  subject  to  the  satisfaction  of the
following conditions precedent on or prior to April ___, 1998:

           10.1. Loan  Documents. Each of the Loan Documents shall have been
duly executed and delivered by the respective  parties  thereto and shall be in
full force and effect.

           10.2. Certified  Copies  of  Organization   Documents. The  Agent
shall have  received  (i) from the  Borrower a copy,  certified  as of a recent
date  by a duly  authorized  officer  of the  Guarantor,  in  its  capacity  as
general partner of the Borrower,  to be true and complete,  of the Agreement of
Limited  Partnership  of the Borrower  and any other  agreement  governing  the
rights  of the  partners  of the  Borrower,  (ii)  from the  Guarantor  a copy,
certified  as of a  recent  date by the  appropriate  officer  of the  State of
Maryland to be true and correct,  of the  declaration of trust of the Guarantor
and  (iii)  from  each   Additional   Guarantor   copies  of  such   Additional
Guarantor's  Charter Documents,  in each case along with any other organization
documents of the Borrower or the  Guarantor or the  Additional  Guarantors,  as
the case may be, and each as in effect on the date of such certification.

           10.3. By-Laws;   Resolutions. All  action  on  the  part  of  the
Borrower,  the Guarantor and the Additional  Guarantors necessary for the valid
execution,  delivery and  performance  by the  Borrower,  the Guarantor and the
Additional  Guarantors of this  Agreement and the other Loan Documents to which
any of them is or is to become a party  shall  have  been duly and  effectively
taken,  and  evidence  thereof  satisfactory  to  the  Banks  shall  have  been
provided to the Agent.  The Agent shall have received from the  Guarantor,  for
itself  and in  its  capacity  as  general  partner  of the  Borrower  and  the
Additional  Guarantors,  true copies of its by-laws and the resolutions adopted
by its board of directors  authorizing the  transactions  described  herein and
evidencing  the  due   authorization,   execution  and  delivery  of  the  Loan
Documents to which it and/or the  Borrower or the  Additional  Guarantors  is a
party,  each  certified  by the  secretary  as of a recent  date to be true and
complete.

               10.4. Incumbency Certificate; Authorized Signers. The Agent shall
          have received from the Guarantor for itself and as general  partner of
          the Borrower and the Additional Guarantors, an incumbency certificate,
          dated as of the Closing Date,  signed by a duly authorized  officer of
          the Guarantor and giving the name and bearing a specimen  signature of
          each individual who shall be authorized:  (a) to sign, in the name and
          on behalf of the Borrower, the Guarantor and the Additional

<PAGE>

               Guarantors,  as the case may be,  each of the Loan  Documents  to
          which  the  Borrower  or  the  Guarantor  or  any  of  the  Additional
          Guarantors is or is to become a party; (b) to make Loan and Conversion
          Requests  on behalf of the  Borrower;  and (c) to give  notices and to
          take other  action on behalf of the  Borrower or the  Guarantor or the
          Additional Guarantors, as applicable, under the Loan Documents.


           10.5.  Survey  and  Taxes. The  Agent  shall have  received  (a) a
Survey  of  each  of  the  Initial  Eligible  Properties,   together  with  the
applicable  Surveyor  Certificate,  bearing dates  acceptable to the Agent, and
in form and substance  acceptable to the Agent,  and (b) evidence of payment of
real estate  taxes and  municipal  charges on the Initial  Eligible  Properties
which are or will become due and payable on or before the Closing Date.

           10.6. Title Insurance;  Title Exception  Documents. The Agent (on
behalf of the Banks)  shall have  received  the Title  Policies.  The Agent (on
behalf of the  Banks)  shall  have  received  true and  accurate  copies of all
documents listed as exceptions under each Title Policy.

           10.7. Leases,  Service Contracts and Other  Documents. The  Agent
shall have received from the Borrower  Lease  Summaries,  all material  Service
Agreements, and all Partnership Documents.

           10.8. Estoppel   Agreements. The   Agent   shall  have   received
Estoppel  Agreements in form and substance  satisfactory  to the Agent, in each
case from each of the  commercial  tenants  under the Leases  which occupy more
than  five  percent  (5%)  square  feet of  gross  rentable  area of any of the
Eligible Properties.

           10.9. Certificates  of  Insurance. The  Agent shall have received
(a) current  certificates  of insurance as to all of the  insurance  maintained
by Borrower on the Initial  Eligible  Properties  (including flood insurance if
necessary)  from the insurer or an independent  insurance  broker,  identifying
insurers,   types  of  insurance,   insurance  limits,  and  policy  terms  and
insurance  binders  naming the Agent as  Mortgagee,  loss payee and  additional
insured;  (b) certified  copies of all policies  evidencing  such insurance (or
certificates  therefor  signed by the  insurer or an agent  authorized  to bind
the  insurer);   and  (c)  such  further   information  and  certificates  from
Borrower,  its  insurers  and  insurance  brokers  as the Agent may  reasonably
request.

<PAGE>


           10.10. Hazardous  Substance  Assessments. The  Agent  shall  have
received  hazardous  waste  site  assessment  reports  running  in favor of the
Agent and the Banks  concerning  Hazardous  Substances (or the threat  thereof)
and asbestos  with respect to the Initial  Eligible  Properties,  dated as of a
date  satisfactory to the Banks,  from  environmental  engineers  acceptable to
the Agent,  such reports to be in form and substance  satisfactory to the Agent
and each of the Banks.  The Agent  shall  have the right to obtain  third-party
review of the reports at the Borrower's expense.

            10.11. Opinion  of  Counsel  Concerning  Organization  and  Loan  
      Documents. Each   of  the  Banks  and  the  Agent  shall  have  received
favorable  opinions  addressed to the Banks and the Agent in form and substance
satisfactory  to the Banks and the Agent from  Cummings  &  Lockwood  (or other
counsel),   as  counsel  to  the  Borrower,   the  Guarantor,   the  Additional
Guarantors and their respective subsidiaries.

           10.12. Structural  Condition  Assurances. The  Agent  and each of
the Banks shall have received  evidence  satisfactory  to the Agent and each of
the  Banks  as to the  good  physical  condition  of  the  Buildings  and  that
utilities  and public water and sewer  service is available at the lot lines of
the Initial  Eligible  Properties and connected  directly to the Buildings with
all necessary Permits.

           10.13. Permit   Assurances;   Compliance. The  Agent  shall  have
received   evidence   reasonably   satisfactory  to  the  Agent  that  (i)  all
activities  being conducted on the Initial  Eligible  Properties  which require
federal,  state or local  Permits have been duly licensed and that such Permits
are in full force and effect,  and (ii) the Initial Eligible  Properties are in
compliance  with all zoning,  land use,  environmental,  architectural  access,
historical and building laws.

           10.14. Guaranty. The  Guaranty  shall have been duly executed and
delivered by the  Guarantor.  The  Additional  Guaranties  shall have been duly
executed and delivered by the Additional Guarantors.

           10.15. Financial  Analysis of Initial  Eligible  Properties. Each
of the Banks shall have  completed to its  satisfaction,  a financial  analysis
of each Initial  Eligible  Property,  which  analysis  shall  include,  without
limitation,  a review,  with respect to each Initial Eligible Property,  of (i)
the most  recent  rent  rolls,  (ii) three (3) year  historical  and  projected
operating  statements,  (iii) cash flow projections,  (iv) capital  
expenditure  budgets  (which  shall be subject to the  review  and 


<PAGE>

     approval  of each of the Banks),  (v) market  data,  (vi) Lease  Summaries,
     (vii) tenant financial  statements,  to the extent available for commercial
     tenants,  and (viii) an aging of rent  payments and rent payment  histories
     for each tenant.


               10.16. Inspection of Eligible Properties. The Agent and each
     Bank shall have  completed to its  satisfaction  an inspection of
     the Initial Eligible Properties at the Borrower's expense.


           10.17. Certifications   from   Government   Officials;   UCC-11   
Reports. The  Agent shall have  received  (i)  long-form  certifications  from
government  officials  evidencing  the  legal  existence,   good  standing  and
foreign  qualification  of  the  Borrower,   the  Guarantor  and  each  of  the
Additional  Guarantors,  along  with a  certified  copy of the  certificate  of
limited  partnership of the Borrower and the Additional  Guarantors,  all as of
the most recent  practicable  date;  and (ii) UCC-11  search  results  from the
appropriate  jurisdictions  for the Borrower,  the Guarantor and the Additional
Guarantors.

           10.18. Proceedings  and Documents. All  proceedings in connection
with  the  transactions   contemplated  by  this  Agreement,   the  other  Loan
Documents  and  all  other  documents  incident  thereto  shall  be  reasonably
satisfactory  in form and  substance  to each of the Banks  and to the  Agent's
counsel,  and  the  Agent,  each of the  Banks  and  such  counsel  shall  have
received all information and such  counterpart  originals or certified or other
copies of such documents as the Agent may reasonably request.

           10.19. Fees. The  Borrower shall have paid to the Agent,  for the
accounts of the Banks or for its own account,  as  applicable,  all  reasonable
fees  and  expenses  that  are  due  and  payable  as of the  Closing  Date  in
accordance with this Agreement.

           10.20. Closing  Certificate. The Borrower and the Guarantor shall
have  delivered  a  Closing  Certificate  to the  Agent,  the  form of which is
attached hereto as Exhibit F.

      11. CONDITIONS TO ALL BORROWINGS. The  obligations of the Banks to make
any Revolving  Credit Loan,  whether on or after the Closing  Date,  shall also
be subject to the satisfaction of the following conditions precedent:

           11.1. Representations  True;  No Event  of  Default;  Compliance  
      Certificate. Each   of  the   representations   and  warranties  of  the
Borrower,  the  Guarantor  and  the  Additional  Guarantors

<PAGE>

     contained in this Agreement, the other Loan Documents or in any document or
     instrument delivered pursuant to or in connection with this Agreement shall
     be true as of the date as of which they were made and shall also be true at
     and as of the time of the making of each  Revolving  Credit Loan,  with the
     same  effect as if made at and as of that  time  (except  to the  extent of
     changes resulting from transactions  contemplated or not prohibited by this
     Agreement or the other Loan Documents and changes occurring in the ordinary
     course of business,  and except to the extent that such representations and
     warranties relate expressly to an earlier date); and no Default or Event of
     Default under this  Agreement  shall have occurred and be continuing on the
     date of any Loan Request or on the Drawdown  Date of any  Revolving  Credit
     Loan.  Each of the Banks shall have received a certificate  of the Borrower
     signed by an authorized officer of the Borrower as provided in 2.5(d)(iii).


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

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

      12. EVENTS OF DEFAULT; ACCELERATION; ETC.

          12.1. EVENTS OF DEFAULT;  ACCELERATION. If any of the following events
          ("Events of Default") shall occur:  (a) the Borrower shall fail to pay
          (i) when due and payable any principal of or interest on the Revolving
          Credit Loans or (ii) any other sum due under any of the Loan Documents
          within five (5) days following written demand for payment of the same;
          (b) the  Borrower  or the  Guarantor  shall fail to perform  any term,
          covenant or agreement contained in 8 or 9 (other than the covenant set
          forth in 9(a)  hereof);  (c) the  Borrower  shall fail to perform  the
          covenant set forth in 9(a) hereof and such failure shall  continue for
          thirty  (30)  days  after the Bank has  given  written  notice of such
          failure to the Borrower pursuant to 18 hereof; (d) the Borrower or the
          Guarantor or any Additional  Guarantor shall fail to perform any other
          term,  covenant or agreement  contained in the Loan Documents and such
          failure  shall  continue for thirty (30) days after the Bank has given
          written notice of such failure to the Borrower;  provided, that if any
          such  failure is of a nature that it cannot be  corrected  within such
          thirty (30) day period

<PAGE>

but  is  capable  of  being  corrected  within  an additional  twenty (20)
day period,  such failure shall not  constitute  an Event of Default  hereunder
so long as (i) the Borrower or the Guarantor or such Additional  Guarantor,  as
applicable,  institutes  reasonable  curative action within such initial period
and  diligently  pursues such action to completion  and (ii) such failure shall
be  fully  cured  within  such  additional  twenty  (20)  day  period;  (e) any
representation  or warranty of the Borrower or the Guarantor or any  Additional
Guarantor in any of the Loan  Documents or in any  certificate  or notice given
in  connection  therewith  shall have been false or  misleading in any material
respect at the time made or deemed to have been made;  (f) the  Borrower or the
Guarantor  or  any  Additional   Guarantor  shall  be  in  default  beyond  the
expiration of any applicable  grace period under any  environmental,  financial
or  payment  covenant  set  forth in any  agreement  or  agreements  evidencing
Indebtedness  owing  to  the  Bank  or any  affiliates  of the  Bank  or  other
Indebtedness in excess of $1,000,000 in aggregate  principal  amount,  or shall
fail to pay such  Indebtedness  when due,  subject to any applicable  period of
grace;  (g) any of the  Loan  Documents  shall  cease to be in full  force  and
effect,  (h) the Borrower,  the Guarantor,  any Additional  Guarantor or any of
their  respective  Subsidiaries (i) shall make an assignment for the benefit of
creditors,  (ii) shall be adjudicated  bankrupt or insolvent,  (iii) shall seek
the  appointment  of, or be the  subject  of an order  appointing,  a  trustee,
liquidator  or receiver as to all or part of its assets,  (iv) shall  commence,
approve  or  consent  to,  any  case  or  proceeding   under  any   bankruptcy,
reorganization  or  similar  law  and,  in the case of an  involuntary  case or
proceeding,  such case or proceeding  is not dismissed  within thirty (30) days
following  the  commencement  thereof,  or (v) shall be the subject of an order
for  relief in an  involuntary  case  under  federal  bankruptcy  law;  (i) the
Borrower or the Guarantor or any  Additional  Guarantor  shall be unable to pay
its debts as they  mature;  (j) there shall remain  undischarged  for more than
ten (10) days any final  (beyond  any  applicable  appeal  period)  judgment or
execution  action  against the  Borrower  or the  Guarantor  or any  Additional
Guarantor  (not  covered by  insurance  reasonably  satisfactory  to the Agent)
that,  together  with  other  outstanding  claims  (not  covered  by  insurance
reasonably  satisfactory  to the  Agent)  and  execution  actions  against  the
Borrower or the Guarantor or such Additional  Guarantor  exceeds  $1,000,000 in
the aggregate;  or (k) the Guarantor  shall cease to be the general  partner of
the Borrower at any time:

      then, and in any such event,  so long as the same may be continuing,  the
Agent may,  and upon the  request of the  Majority  Banks  shall,  by notice in
writing  to the  Borrower,  declare  all  amounts  owing  with  respect to
this  Agreement,  the Revolving  Credit Notes and the other Loan

<PAGE>


Documents to be, andthey shall thereupon forthwith become, immediately due and 
payable without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by the Borrower and the Guarantor; 
provided that in the event of any Event of Default specified in 12.1(h) or 
12.1(i), all suchamounts shall become immediately due and payable automatically 
and without any requirement of notice from any of the Banks or the Agent or 
action by the Banks or the Agent.


           12.2. Termination  of  Commitments. If  any one or more Events of
Default  specified in 12.1(h) or 12.1(i)  shall occur,  any unused portion of
the  Commitments  hereunder  shall  forthwith  terminate and the Banks shall be
relieved of all  obligations  to make  Revolving  Credit Loans to the Borrower.
If any other  Event of  Default  shall have  occurred  and be  continuing,  the
Majority  Banks may, by notice to the Borrower,  terminate  the unused  portion
of the Total  Commitment  hereunder,  and upon such  notice  being  given  such
unused portion of the Total  Commitment  shall  terminate  immediately  and the
Banks shall be relieved of all further  obligations  to make  Revolving  Credit
Loans.  No such  termination of the Total  Commitment  hereunder  shall relieve
the Borrower of any of the  Obligations  or any of its existing  obligations to
any Bank arising under other agreements or instruments.

           12.3. Remedies. In  the event that one or more  Events of Default
shall have  occurred  and be  continuing,  whether or not the Banks  shall have
accelerated the maturity of the Revolving  Credit Loans pursuant to 12.1,  the
Majority  Banks may direct the Agent to proceed  to  protect  and  enforce  the
rights  and  remedies  of the Agent and the Banks  under  this  Agreement,  the
Revolving  Credit  Notes,  any or all of the  other  Loan  Documents  or  under
applicable  law  by  suit  in  equity,  action  at  law  or  other  appropriate
proceeding   (including  for  the  specific  performance  of  any  covenant  or
agreement  contained  in this  Agreement  or the other  Loan  Documents  or any
instrument  pursuant to which the  Obligations  are evidenced  and, to the full
extent  permitted by applicable law, the obtaining of the ex parte  appointment
of a  receiver),  and, if any amount shall have become due, by  declaration  or
otherwise,  proceed  to  enforce  the  payment  thereof  or any other  legal or
equitable  right or remedy of the Agent and the Banks under the Loan  Documents
or applicable  law. No remedy herein  conferred  upon the Banks or the Agent or
the holder of any  Revolving  Credit Note is intended  to be  exclusive  of any
other  remedy and each and every  remedy  shall be  cumulative  and shall be in
addition to every other remedy  given  hereunder or under any of the other Loan
Documents  or now or  hereafter  existing  at law or in equity or by statute or
any other provision of law.


<PAGE>

           12.4. Distribution  of Proceeds. In the event that, following the
occurrence and during the  continuance of any Default or Event of Default,  the
Agent or any Bank, as the case may be,  receives any monies in connection  with
the Revolving  Credit Loans,  such monies shall be distributed  for application
as follows:

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

           (b)  Second,  to all  other  Obligations  pro  rata  based  upon the
      amount  of the  Obligations  due each of the  Agent  and the  Banks;  and
      provided,  further,  that the Agent  may in its  discretion  make  proper
      allowance to take into account any Obligations not then due and payable;

           (c)  Third,   upon  payment  and   satisfaction  in  full  or  other
      provisions for payment in full  satisfactory to the Majority Banks of all
      of the  Obligations,  to the  payment of any  obligations  required to be
      paid  pursuant  to  9-504(1)(c)  of the Uniform  Commercial  Code of the
      State of Connecticut or any similar law; and

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

      13. SETOFF. Without  demand or notice,  during the  continuance  of any
Event of Default,  any deposits in any account  (general or  specific,  time or
demand,  provisional or final, regardless of currency,  maturity, or the branch
at which  such  deposits  are held) in the  possession  of the Agent or a Bank,
other than those  accounts  in the  possession  of First  Union  National  Bank
which relate to any currently  existing secured  financing between the Borrower
and First  Union  National  Bank,  may be  applied  to or set off  against  the
payment  of the  Obligations.  Each of the Banks  agrees  with each  other Bank
that (a) if  pursuant  to any  agreement  between  such  Bank and the  Borrower
(other  than this  Agreement  or any other Loan  Document,  an amount 
 to be set off is to be applied to 
<PAGE>



Indebtedness  of the Borrower to such Bank, other than  with respect to the 
Obligations,  such  amount  shall  be  applied  ratably  to  such
other  Indebtedness and to the Obligations,  and (b) if such Bank shall receive
from the  Borrower,  whether by  voluntary  payment,  exercise  of the right of
setoff,   counterclaim,   cross  action,  enforcement  of  the  Obligations  by
proceedings  against the  Borrower  at law or in equity or by proof  thereof in
bankruptcy,  reorganization,  liquidation, receivership or similar proceedings,
or  otherwise,  and shall  retain  and apply to the  payment  of the  Revolving
Credit Note or  Revolving  Credit  Notes held by such Bank any amount in excess
of its  ratable  portion  of the  payments  received  by all of the Banks  with
respect to the  Revolving  Credit  Notes  held by all of the  Banks,  such Bank
will make such disposition and  arrangements  with the other Banks with respect
to  such  excess,  either  by way of  distribution,  pro  tanto  assignment  of
claims,  subrogation  or otherwise,  as shall result in each Bank  receiving in
respect of the Revolving Credit Notes held by it its  proportionate  payment as
contemplated  by  this  Agreement;  provided  that  if all or any  part of such
excess payment is thereafter  recovered from such Bank,  such  disposition  and
arrangements  shall be rescinded and the amount  restored to the extent of such
recovery,  but without interest.  Notwithstanding the foregoing,  no Bank shall
exercise  a right  of  setoff  if such  exercise  would  limit or  prevent  the
exercise of any other remedy or other recourse against the Borrower.

      14. ENVIRONMENTAL MATTERS.

           14.1.Representations and Warranties. The  Borrower,  the Guarantor,
and each  Additional  Guarantor  represent  and  warrant  to the  Agent and the
Banks on the date  hereof,  on the date of any  Revolving  Loan  Request and on
each  Drawdown  Date of any  Revolving  Credit  Loan  that  the  Borrower,  the
Guarantor and each Additional  Guarantor has caused  environmental  assessments
to be conducted  and/or taken other steps to  investigate  the past and present
environmental   condition   and  usage  of  the  Real  Estate  Assets  and  the
operations  conducted   thereon. Except  as  disclosed  in  the  environmental
assessments  provided  to the  Agent  pursuant  to 10.10  and based  upon such
assessments  and/or  investigation,   the  Borrower,  the  Guarantor  and  each
Additional  Guarantor  represent and warrant,  to the best of their  knowledge,
that: (a) none of the Borrower,  the Guarantor,  any Additional Guarantor,  any
of their  respective  Subsidiaries  or any  operator  of the Real Estate or any
portion  thereof,  or  any  operations  thereon  is in  violation,  or  alleged
violation,  of any Environmental  Law, which violation or alleged violation (in
writing)  has,  or its  remediation  would have,  by itself or when  aggregated
with all such other  violations  or alleged  violations,  a Materially 
 Adverse  Effect, (b) none of the Borrower,  the Guarantor,  the


<PAGE>

 Additional   Guarantor  or   any  of  their   respective  
Subsidiaries  has  received   notice   from   any   third
party,   including,   without   limitation,   any   federal,   state  or  local
governmental  authority,  (i) that it has been  identified by the United States
Environmental  Protection  Agency  ("EPA") as a potentially  responsible  party
under  CERCLA with respect to a site listed on the  National  Priorities  List,
40 C.F.R.  Part 300  Appendix  B  (1986),  (ii) that any  hazardous  waste,  as
defined  by 42 U.S.C.  6903(5),  any  hazardous  substances  as  defined by 42
U.S.C.    9601(14),  any  pollutant  or  contaminant  as  defined by 42 U.S.C.
9601(33)  or  any  toxic  substances,  oil or  hazardous  materials  or  other
chemicals  or  substances  regulated  by  any  Environmental  Laws  ("Hazardous
Substances")  which  it has  generated,  transported  or  disposed  of has been
found at any site at which a  federal,  state or local  agency  or other  third
party has  conducted  or has ordered  that the  Borrower,  the  Guarantor,  any
Additional  Guarantor  or  any  of  their  respective  Subsidiaries  conduct  a
remedial  investigation,  removal  or other  response  action  pursuant  to any
Environmental  Law,  or  (iii)  that it is or  shall  be a named  party  to any
claim,  action,  cause  of  action,   complaint,  or  legal  or  administrative
proceeding  (in each case,  contingent or  otherwise)  arising out of any third
party's  incurrence  of  costs,  expenses,   losses  or  damages  of  any  kind
whatsoever  in  connection  with the  release of  Hazardous  Substances;  which
event  described  in any such notice would have a  Materially  Adverse  Effect,
(c) (i) no portion of the Real  Estate  Assets has been used,  from the time of
ownership by the Borrower,  the Guarantor,  or an Additional Guarantor,  as the
case may be, for the  handling,  processing,  storage or disposal of  Hazardous
Substances  except in accordance  with  applicable  Environmental  Laws; and no
underground  tank  or  other  underground   storage  receptacle  for  Hazardous
Substances  is  located  on any  portion  of any Real  Estate  Asset  except in
accordance  with  applicable  Environmental  Laws,  (ii) in the  course  of any
activities   conducted  by  the  Borrower,   the   Guarantor,   any  Additional
Guarantor,  their respective  Subsidiaries or to the knowledge of the Borrower,
without any  independent  inquiry other than as set forth in the  environmental
assessments,  the operators of the Real Estate  Assets,  or any ground or space
tenants on any Real Estate Asset,  no Hazardous  Substances have been generated
or are  being  used on  such  Real  Estate  Asset  except  in  accordance  with
applicable  Environmental  Laws,  (iii)  there  has  been  no  present  or past
releasing,   spilling,   leaking,   pumping,   pouring,   emitting,   emptying,
discharging,  injecting,  escaping,  disposing  or  dumping  (a  "Release")  or
threatened  Release of Hazardous  Substances  on,  upon,  into or from the Real
Estate Assets from the time of ownership by the  Borrower,  the Guarantor or an
Additional  Guarantor,  as the  case  may  be,  (iv)  to the  knowledge  of the
Borrower  without  any  independent  inquiry  other  than as set  forth  in the
environmental  assessments,  there have been no Releases on, upon, 
from or into any real  property  in the  vicinity of any

<PAGE>


               of the Real Estate  Assets  which,  through  soil or  groundwater
               contamination,  may have come to be located  on such Real  Estate
               Assets, and (v) any Hazardous Substances that have been generated
               by the Borrower, the Guarantor or any Additional Guarantor or any
               of their respective Subsidiaries at any of the Real Estate Assets
               have  been  transported  off-site  only  by  carriers  having  an
               identification  number issued by the EPA,  treated or disposed of
               only  by  treatment  or  disposal  facilities  maintaining  valid
               permits as required under applicable  Environmental  Laws; any of
               which  events  described  in clauses  (i) through (v) above would
               have a Materially Adverse Effect, (d) by virtue of the use of the
               Revolving  Credit Loans  proceeds  contemplated  hereby,  or as a
               condition to the effectiveness of any of the Loan Documents, none
               of the Borrower,  the Guarantor,  any Additional Guarantor or any
               of the Real Estate is subject to any applicable Environmental Law
               requiring   the   performance   of  Hazardous   Substances   site
               assessments,   or  the  removal  or   remediation   of  Hazardous
               Substances, or the giving of notice to any governmental agency or
               the  recording or delivery to other  Persons of an  environmental
               disclosure  document or statement. 


                14.2.Environmental  Indemnity  and Covenants.

           (a)  The Borrower,  the  Guarantor,  and each  Additional  Guarantor
      jointly and severally  agree that they will  indemnify and hold the Agent
      and each Bank,  and each of their  respective  Affiliates,  harmless from
      and  against  any and all  claims,  expense,  damage,  loss or  liability
      incurred  by the Agent or any Bank  (including  all  reasonable  costs of
      legal  representation  incurred  by the  Agent or any Bank in  connection
      with any investigative,  administrative or judicial  proceeding,  whether
      or not the  Agent  or any  Bank  is  party  thereto,  but  excluding,  as
      applicable for the Agent or a Bank, any claim,  expense,  damage, loss or
      liability as a result of: (x) the gross negligence or willful  misconduct
      of the Agent or such Bank or any of their respective  Affiliates,  or (y)
      any of the below events which first occur  following the transfer or sale
      of the applicable Real Estate Asset to a party  indemnified  hereunder or
      to a bona fide third party purchaser;  and the indemnity set forth herein
      shall not apply to any claim or loss  arising  after the date of purchase
      of  a  Real  Estate  Asset  from  the  Borrower,  the  Guarantor,  or  an
      Additional  Guarantor  (as the case  may be) by a  subsequent  owner  who
      purchases  such Real Estate  Asset with the proceeds of loans made by the
      Agent or any Bank,  unless such claim or loss was directly or  indirectly
      caused  by the  Borrower,  the  Guarantor  or the  Additional  Guarantor)
      relating  to  (a)  any  Release  or   threatened   Release  of  Hazardous
      Substances  on any Real Estate;  (b) any  


<PAGE>

      violation of any  Environmental  Laws  with   respect 
      to  conditions  at any  Real  Estate  or  the  operations
      conducted  thereon;  (c) the  investigation  or  remediation  of off-site
      locations at which the Borrower, the Guarantor,  any Additional Guarantor
      or any  of  their  respective  Subsidiaries  or  their  predecessors  are
      alleged to have directly or indirectly disposed of Hazardous  Substances;
      or  (d)  any  action,  suit,   proceeding  or  investigation  brought  or
      threatened  with  respect to any  Hazardous  Substances  relating to Real
      Estate  Assets  (including,  but not limited to,  claims with  respect to
      wrongful death,  personal injury or damage to  property). In  litigation,
      or the preparation therefor,  the Bank and the Agent shall be entitled to
      select   their  own   counsel   and   participate   in  the  defense  and
      investigation  of such  claim,  action or  proceeding,  and the  Borrower
      shall  bear the  expense  of such  separate  counsel of the Agent and the
      Bank if (i) in the  written  opinion  of  counsel  to the  Agent  and the
      Banks,  use of counsel  of the  Borrower's  choice  could  reasonably  be
      expected to give rise to a conflict of interest,  (ii) the Borrower shall
      not have employed  counsel  reasonably  satisfactory to the Agent and the
      Lenders within a reasonable  time after notice of the  institution of any
      such  litigation  or  proceeding,  or (iii) the Borrower  authorizes  the
      Agent  and  the  Bank  to  employ  separate  counsel  at  the  Borrowers'
      expense.  It is expressly  acknowledged by the Borrower and the Guarantor
      that this  covenant of  indemnification  shall survive the payment of the
      Loans  and  shall  inure to the  benefit  of the  Agent and the Banks and
      their  respective  Affiliates,  their  respective  successors,  and their
      respective  assigns  under  the  Loan  Documents   permitted  under  this
      Agreement.

           (b)  If the Agent has  reasonable  grounds to believe that a Release
      has  occurred  with respect to any  Eligible  Property,  whether or not a
      Default or an Event of Default shall have occurred,  the Agent may obtain
      (provided  the  Borrower  refuses to so obtain upon  request of the Agent
      with a qualified  consultant or expert approved by the Agent) one or more
      environmental  assessments or audits of such Eligible  Property  prepared
      by  a  hydrogeologist,   an  independent   engineer  or  other  qualified
      consultant or expert  approved by the Agent,  which  approval will not be
      unreasonably  withheld, to evaluate or confirm (i) whether any Release of
      Hazardous  Substances  has occurred in the soil or water at such Eligible
      Property  and  (ii)  whether  the use  and  operation  of  such  Eligible
      Property  materially  complies  with  all  Environmental  Laws.  All such
      environmental  assessments  shall be at the sole cost and  expense of the
      Borrowers,   provided,   however,   such  costs  and  expenses  shall  be
      reasonable in all respects.

<PAGE>


           (c)  The  Borrower,  the  Guarantor  and each  Additional  Guarantor
      covenants  and  agrees  that if any  Release  or  disposal  of  Hazardous
      Substances shall occur or shall have occurred on any Eligible  Properties
      owned  by it or any of its  Subsidiaries,  such  Borrower,  Guarantor  or
      Additional  Guarantor  will cause the prompt  containment  and removal of
      such Hazardous  Substances and remediation of such Eligible Properties as
      necessary to comply with all Environmental Laws.

      15. THE AGENT.

           15.1. Authorization.

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

           (b)  The Borrower, without further inquiry or investigation,  shall,
      and is hereby  authorized  by the Banks to, assume that all actions taken
      by  the  Agent  hereunder  and in  connection  with  or  under  the  Loan
      Documents  are duly  authorized  by the  Banks.  The Banks  shall  notify
      Borrower  of any  successor  to Agent by a  writing  signed  by  Majority
      Banks, which successor shall be reasonably acceptable to the Borrower.

           15.2. Employees  and  Agents. The  Agent may  exercise its powers
and  execute  its  duties  by or  through  employees  or  agents  and  shall be
entitled  to take,  and to rely on,  advice of counsel  concerning  all matters
pertaining  to its rights and duties  under this  Agreement  and the other Loan
Documents.  The Agent may  utilize the  services  of such  Persons as the Agent
in its sole  discretion may reasonably  determine,  and all reasonable fees and
expenses of any such Persons shall be paid by the Borrower.

           15.3. No   Liability. Neither   the   Agent,   nor   any  of  its
shareholders,  directors,  officers or employees nor any other Person assisting
them in their  duties nor any agent or  employee  thereof,  shall


<PAGE>

           be liable for any waiver, consent or approval given or any action
           taken,  or  omitted  to be  taken,  in good  faith  by it or them
           hereunder  or  under  any  of the  other  Loan  Documents,  or in
           connection  herewith  or  therewith,  or be  responsible  for the
           consequences  of any  oversight or error of judgment  whatsoever,
           except that the Agent may be liable for losses due to its willful
           misconduct or gross negligence.



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

           15.5. Payments.

           (a)  A payment by the Borrower to the Agent  hereunder or any of the
      other Loan  Documents  for the  account of any Bank  shall  constitute  a
      payment to such Bank.  The Agent agrees to  distribute  to each Bank such
      Bank's pro rata share of  payments  received by the Agent for the account
      of the Banks,  as provided  herein or in any of the other Loan Documents.
      All such  payments  shall be made on the date  received,  if before 
      2:00  p.m.,  and  if  after  2:00 p.m.,  on    the 

<PAGE>


      next  Business  Day. If payment is not made on the day  received, 
      the funds  shall be invested by the Agent  in  overnight  obligations, 
      and  interest  thereon  paid pro rata to the Banks.

           (b)  If in the reasonable  opinion of the Agent the  distribution of
      any  amount  received  by  it  in  such  capacity  hereunder,  under  the
      Revolving  Credit  Notes or under any of the other Loan  Documents  might
      involve  it  in  material   liability,   it  may   refrain   from  making
      distribution  until  its  right  to make  distribution  shall  have  been
      adjudicated  by a court  of  competent  jurisdiction,  provided  that the
      Agent  shall   invest  any  such   undistributed   amounts  in  overnight
      obligations  on behalf of the Banks and  interest  thereon  shall be paid
      pro  rata  to the  Banks.  If a court  of  competent  jurisdiction  shall
      adjudge that any amount  received and  distributed  by the Agent is to be
      repaid,  each Person to whom any such  distribution  shall have been made
      shall either repay to the Agent its proportionate  share of the amount so
      adjudged  to be repaid or shall pay over the same in such  manner  and to
      such Persons as shall be determined by such court.

           (c)  Notwithstanding  anything  to the  contrary  contained  in this
      Agreement or any of the other Loan Documents,  any Bank that fails (i) to
      make  available to the Agent its pro rata share of any  Revolving  Credit
      Loan or (ii) to comply with the  provisions of 13 with respect to making
      dispositions  and  arrangements  with the other Banks,  where such Bank's
      share of any  payment  received,  whether by setoff or  otherwise,  is in
      excess of its pro rata share of such  payments  due and payable to all of
      the Banks,  in each case as, when and to the full extent  required by the
      provisions  of  this  Agreement,   or  to  adjust  promptly  such  Bank's
      outstanding  principal and its pro rata Commitment Percentage as provided
      in 2.1,  shall be deemed  delinquent (a "Delinquent  Bank") and shall be
      deemed  a  Delinquent  Bank  until  such  time  as  such  delinquency  is
      satisfied.  A  Delinquent  Bank shall be deemed to have  assigned any and
      all  payments  due  to it  from  the  Borrower,  whether  on  account  of
      outstanding Revolving Credit Loans, interest,  fees or otherwise,  to the
      remaining  nondelinquent  Banks for  application  to, and  reduction  of,
      their  respective  pro rata shares of all  outstanding  Revolving  Credit
      Loans.  The  Delinquent  Bank hereby  authorizes  the Agent to distribute
      such  payments  to  the  nondelinquent   Banks  in  proportion  to  their
      respective  pro rata shares of all  outstanding  Revolving  Credit Loans.
      If  not  previously   satisfied   directly  by  the  Delinquent  Bank,  a
      Delinquent  Bank shall be deemed to have  satisfied in full a 
      delinquency  when  and  if,  as  a  result  of  application 
<PAGE>


               of the assigned payments to all outstanding Revolving Credit
               Loans of the nondelinquent  Banks, the Banks' respective pro
               rata shares of all outstanding  Revolving  Credit Loans have
               returned  to  those  in  effect  immediately  prior  to such
               delinquency  and  without  giving  effect to the  nonpayment
               causing such delinquency.

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

           15.7. Indemnity. The  Banks ratably and severally agree hereby to
indemnify  and hold  harmless  the Agent from and  against  any and all claims,
actions and suits (whether groundless or otherwise),  losses,  damages,  costs,
expenses  (including  any expenses for which the Agent has not been  reimbursed
by the  Borrower as  required  by 18),  and  liabilities  of every  nature and
character  arising out of or related to this  Agreement,  the Revolving  Credit
Notes, or any of the other Loan Documents or the  transactions  contemplated or
evidenced  hereby  or  thereby,  or the  Agent's  actions  taken  hereunder  or
thereunder,  except  to the  extent  that  any of the same  shall  be  directly
caused by the Agent's willful misconduct or gross negligence.

           15.8. Agent as Bank. In its individual  capacity as a Bank, Rhode
Island  Hospital  Trust National Bank shall have the same  obligations  and the
same  rights,  powers  and  privileges  in respect  to its  Commitment  and the
Revolving  Credit  Loans made by it, and as the holder of any of the  Revolving
Credit Notes, as it would have were it not also the Agent.

           15.9. Notification  of Defaults and Events of Default. Each  Bank
hereby agrees that,  upon  learning of the  existence of a default,  Default or
an Event of Default,  it shall (to the extent  notice has not  previously  been
provided)  promptly  notify the Agent  thereof.  The Agent  hereby  agrees that
upon  receipt of any  notice  under  this  15.9 it shall  promptly  notify the
other Banks of the existence of such default, Default or Event of Default.

           15.10. Duties  in the  Case of  Enforcement. In  case one of more
Events of Default  have  occurred and shall be  continuing,  and whether or not
acceleration  of the Obligations  shall have occurred,  the Agent shall, if (a)
so  requested  by the  Majority  Banks and (b) the Banks have  provided  to the
Agent  such  additional   indemnities  and  assurances 

<PAGE>

against expenses and liabilities as the Agent may reasonably request, proceed to
enforce the  provisions  of this  Agreement.  The Majority  Banks may direct the
Agent in  writing  as to the  method  and the  extent  of any such sale or other
disposition,  the Banks  (including  any Bank  which is not one of the  Majority
Banks)  hereby  agreeing to ratably and  severally  indemnify and hold the Agent
harmless  from all  liabilities  incurred  in  respect of all  actions  taken or
omitted in  accordance  with such  directions,  provided that the Agent need not
comply with any such direction to the extent that the Agent reasonably  believes
the Agent's  compliance  with such  direction  to be  unlawful  or  commercially
unreasonable in any applicable jurisdiction.


           15.11. Successor  Agent. Rhode  Island  Hospital  Trust  National
Bank,  or any  successor  Agent,  may  resign  as Agent  at any time by  giving
written  notice  thereof to the Banks and to the  Borrower.  In  addition,  the
Majority  Banks  may  remove  the  Agent in the  event of the  Agent's  willful
misconduct  or gross  negligence.  Any such  resignation  or  removal  shall be
effective  upon   appointment   and  acceptance  of  a  successor   Agent,   as
hereinafter  provided.  Upon any such  resignation  or  removal,  the  Majority
Banks  shall  have the  right to  appoint a  successor  Agent,  provided  that,
unless  a  Default  or  an  Event  of  Default   shall  have  occurred  and  be
continuing,  the Borrower shall have the right to approve any successor  Agent,
which  approval  shall  not be  unreasonably  withheld.  If,  in the  case of a
resignation  by the Agent,  no successor  Agent shall have been so appointed by
the Majority  Banks and approved by the Borrower,  and shall have accepted such
appointment,  within  thirty  (30) days after the  retiring  Agent's  giving of
notice of  resignation,  then the  retiring  Agent may, on behalf of the Banks,
appoint any one of the other Banks as a successor  Agent.  Upon the  acceptance
of any  appointment  as Agent  hereunder by a successor  Agent,  such successor
Agent  shall  thereupon  succeed  to and  become  vested  with all the  rights,
powers,  privileges  and  duties of the  retiring  or  removed  Agent,  and the
retiring or removed  Agent  shall be  discharged  from all  further  duties and
obligations  as Agent under this  Agreement.  After any Agent's  resignation or
removal  hereunder  as Agent,  the  provisions  of this 15 shall  inure to its
benefit  as to any  actions  taken  or  omitted  to be taken by it while it was
Agent under this  Agreement.  The Agent  agrees that it shall not assign any of
its rights or duties as Agent to any other Person.

           15.12. Notices. Any   notices  or  other   information   required
hereunder  to be provided to the Agent shall be  forwarded by the Agent to each
of the Banks on the same day (if  practicable)  and,  in any case,  on the next
Business Day  following the Agent's  receipt  thereof.  The Agent's 

<PAGE>

receipt of such notice shall be deemed to constitute receipt by the Banks of any
such notice.


      16. ASSIGNMENT; PARTICIPATIONS; ETC.

           16.1. Conditions  to  Assignment  by  Banks. Except  as  provided
herein,  each  Bank  may  assign  to one or more  Eligible  Assignees  all or a
portion  of  its  interests,   rights  and  obligations  under  this  Agreement
(including  all or a portion of its  Commitment  Percentage  and Commitment and
the same  portion of the  Revolving  Credit  Loans at the time owing to it) and
the  Revolving  Credit  Notes  held by it;  provided  that (a) the  Agent  and,
unless  a  Default  or  an  Event  of  Default   shall  have  occurred  and  be
continuing,  the  Borrower  each shall have the right to approve  any  Eligible
Assignee,  which approval shall not be unreasonably  withheld,  it being agreed
that the Agent and the  Borrower  must  approve or reject a  proposed  Eligible
Assignee  within  seven (7) days of  receiving a written  request from any Bank
for such  approval  and if the Agent or the  Borrower  fails to respond  within
such seven (7) day period,  such request for approval shall be deemed  approved
by the  Agent or the  Borrower,  or both,  as the  case may be,  (b) each  such
assignment  shall be of a constant,  and not a varying,  percentage  of all the
assigning  Bank's rights and obligations  under this Agreement,  (c) subject to
the  provisions of 2.2 hereof,  each Bank shall have at all times an amount of
its  Commitment  of not  less  than  $8,000,000  and  (d) the  parties  to such
assignment  shall  execute  and  deliver to the  Agent,  for  recording  in the
Register   (as   hereinafter    defined),   an   assignment   and   assumption,
substantially   in  the  form  of   Exhibit  G  hereto  (an   "Assignment   and
Assumption"),  together  with  any  Revolving  Credit  Notes  subject  to  such
assignment.  Upon such  execution,  delivery,  acceptance and  recording,  from
and after the  effective  date  specified in each  Assignment  and  Assumption,
which  effective  date  shall be at least  five (5)  Business  Days  after  the
execution  thereof,  (i) the assignee  thereunder  shall be a party hereto and,
to the extent provided in such  Assignment and Assumption,  have the rights and
obligations  of a Bank  hereunder and  thereunder,  and (ii) the assigning Bank
shall,  to the  extent  provided  in such  assignment  and upon  payment to the
Agent of the  registration  fee  referred  to in 16.3,  be  released  from its
obligations  under this  Agreement.  Any such  Assignment and Assumption  shall
run to the  benefit  of the  Borrower  and a fully  executed  copy of any  such
Assignment  and   Assumption   shall  be  delivered  by  the  Assignor  to  the
Borrower.

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


<PAGE>

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


           16.3 Register. The   Agent   shall   maintain  a  copy  of  each
Assignment and  Assumption  delivered to it and a register or similar list (the
"Register")  for the  recordation  of the names and  addresses of the Banks and
the Commitment  Percentages  of, and principal  amount of the Revolving  Credit
Loans  owing to,  the Banks  from time to time.  The  entries  in the  Register
shall be conclusive,  in the absence of manifest error,  and the Borrower,  the
Agent and the Banks  may  treat  each  Person  whose  name is  recorded  in the
Register  as  a  Bank  hereunder  for  all  purposes  of  this  Agreement.
The  Register  shall be available  for  inspection




<PAGE>
by the Borrower and the Banks at any reasonable  time and from time to time upon
reasonable prior notice.  Upon each such recordation,  the assigning Bank agrees
to pay to the Agent a registration fee in the sum of $2,500


           16.4. New   Revolving  Credit   Notes. Upon  its  receipt  of  an
Assignment  and  Assumption   executed  by  the  parties  to  such  assignment,
together  with each  Revolving  Credit Notes  subject to such  assignment,  the
Agent shall (a) record the information  contained therein in the Register,  and
(b) give prompt  notice  thereof to the  Borrower and the Banks (other than the
assigning  Bank).  Within five (5) Business  Days after receipt of such notice,
the Borrower,  at its own expense,  shall execute and deliver to the Agent,  in
exchange for each  surrendered  Revolving  Credit Notes, a new Revolving Credit
Notes to the order of such  Eligible  Assignee in an amount equal to the amount
assumed by such Eligible  Assignee  pursuant to such  Assignment and Assumption
and,  if the  assigning  Bank has  retained  some  portion  of its  obligations
hereunder,  a new Revolving  Credit Notes to the order of the assigning Bank in
an amount  equal to the amount  retained by it  hereunder.  Such new  Revolving
Credit  Notes shall  provide  that they are  replacements  for the  surrendered
Revolving  Credit  Notes,  shall be in an aggregate  principal  amount equal to
the  aggregate  principal  amount of the  surrendered  Revolving  Credit Notes,
shall be dated the effective  date of such  Assignment and Assumption and shall
otherwise  be in  substantially  the  form  of the  assigned  Revolving  Credit
Notes.  The surrendered  Revolving  Credit Notes shall be canceled and returned
to the Borrower.

           16.5. Participations. Each  Bank may sell  participations to one
or more banks or other  entities in all or a portion of such Bank's  rights and
obligations  under this Agreement and the other Loan  Documents;  provided that
(a)  unless a  Default  or an Event  of  Default  shall  have  occurred  and be
continuing,  the Borrower shall have approved such  participant  (such approval
not to be unreasonably  withheld),  (b) each such participation  shall be in an
amount of not less than $8,000,000,  (c) any such sale or  participation  shall
not  affect  the  rights  and  duties  of the  selling  Bank  hereunder  to the
Borrower and the Agent and the Bank shall  continue to exercise all  approvals,
disapprovals  and other functions of a Bank, and (d) no participant  shall have
the right to grant  further  participations  or assign its rights,  obligations
or  interests  under such  participation  to other  Persons  without  the prior
written consent of the Agent.

           16.6. Pledge  by  Lender. Notwithstanding  any other provision
of  this  Agreement,  any Bank at no cost to the  Borrower  may at 


<PAGE>
any time  pledge  all or any  portion  of its  interest  and  rights  under this
Agreement (including all or any portion of its Revolving Credit Notes) to any of
the twelve Federal  Reserve Banks  organized under 4 of the Federal Reserve Act,
12 U.S.C.  341.  No such pledge or the  enforcement  thereof  shall  release the
pledgor  Bank from its  obligations  hereunder  or under  any of the other  Loan
Documents.


           16.7.    No Assignment by Borrower. The  Borrower shall not assign
or transfer any of its rights or  obligations  under any of the Loan  Documents
without prior Unanimous Bank Approval.

           16.8. Disclosure. The   Borrower  agrees  that,  in  addition  to
disclosures made in accordance with standard banking  practices,  any Bank may,
after written  notice to the Borrower,  disclose  information  obtained by such
Bank  pursuant to this  Agreement to assignees or  participants  and  potential
assignees or participants  hereunder.  Any such disclosed  information shall be
treated  by  any   assignee   or   participant   with  the  same   standard  of
confidentiality set forth herein.

      17. CONSENTS,  AMENDMENTS,  WAIVERS, ETC. Except as otherwise expressly
provided in this  Agreement,  any consent or approval  required or permitted by
this  Agreement  may be given,  and any term of this  Agreement or of any other
of the other Loan Documents may be amended,  and the  performance or observance
by the Borrower or the  Guarantor  of any terms of this  Agreement or the other
Loan Documents or the  continuance of any default,  Default or Event of Default
may  be  waived  (either  generally  or in a  particular  instance  and  either
retroactively  or  prospectively)  with, but only with, the written  consent of
the Majority Banks.

      Notwithstanding the foregoing,  Unanimous Bank Approval shall be required
for any amendment, modification or waiver of this Agreement that:

                (i)  reduces or forgives any principal of any unpaid  Revolving
           Credit  Loan  or  any  interest  thereon   (including  any  interest
           "breakage"  costs) or any fees due any Bank  hereunder,  or  permits
           any prepayment not otherwise permitted hereunder; or

                (ii) changes  the  unpaid  principal  amount of, or the rate of
           interest on, any Revolving Credit Loan; or

                (iii)changes the date fixed for any payment of  principal 
            of or interest  on  any   Revolving   Credit  Loan  



<PAGE>

         (including,  without  limitation,  any extension of the
          Maturity Date) or any fees payable hereunder; or


                (iv) changes  the amount of any Bank's  Commitment  (other than
           pursuant  to  an  assignment   permitted   under  15.1  hereof)  or
           increases the amount of the Total Commitment; or

                (v)  amends  or  otherwise   changes  the   definition  of  the
           Borrowing Base, or the method of calculating such Borrowing Base; or

                (vi) amends any of the covenants contained in 9 hereof; or

                (vii)releases  or  reduces  the   liability  of  the  Guarantor
           pursuant to the Guaranty; or

                (viii)....modifies  any  provision  herein or in any other Loan
           Document  which by the terms thereof  expressly  requires  Unanimous
           Bank Approval; or

                (ix) amends any of the provisions  governing  funding contained
           in 2 hereof; or

                (x)  changes the  rights,  duties or  obligations  of the Agent
           specified in 15 hereof  (provided that no amendment or modification
           to such 15 or to the fee payable to the Agent under this  Agreement
           may be made without the prior written consent of the Agent); or

                (xi) changes the  definitions  of Majority  Banks or  Unanimous
           Bank Approval.

      No waiver shall extend to or affect any obligation  not expressly  waived
or impair  any right  consequent  thereon.  No  course of  dealing  or delay or
omission  on the part of the Agent or the Banks or any Bank in  exercising  any
right shall  operate as a waiver  thereof or otherwise be  prejudicial  to such
right or any other  rights of the  Agent or the  Banks.  No notice to or demand
upon the  Borrower  shall  entitle the  Borrower to other or further  notice or
demand in similar or other circumstances.

      18. MISCELLANEOUS. The   Borrower  and  the   Guarantor   jointly  and
severally  agree to  indemnify  and  hold  harmless  the  Agent  and the  Banks
against  all  claims  and  losses  of  every  kind  arising  out  of  the  Loan
Documents,  including  without  limitation  against  those  in  respect  of th


<PAGE>

application  of  Environmental  Laws  to the  Borrower.  The  Borrower  and the
Guarantor  shall  pay to the  Agent  and  the  Banks  promptly  on  demand  all
reasonable  costs and  expenses  (including  any  taxes  and  legal  appraisal,
engineering  and  other  professional  fees,  syndication  fees and fees of its
commercial   finance  examiner)   incurred  by  the  Agent  and  the  Banks  in
connection   with   the   preparation,   negotiation,   execution,   amendment,
syndication  or  enforcement of any of the Loan  Documents.  Any  communication
to be made  hereunder  shall (a) be made in writing and by hand  delivery or by
registered or certified  first class mail,  and (b) be made or delivered to the
address of the party  receiving  notice which is identified  with its signature
below  (unless  such  party  has by five (5)  days'  written  notice  specified
another  address),  and shall be deemed  made or  delivered,  when  dispatched,
left at that  address,  or five (5) days after being mailed,  postage  prepaid,
to such  address.  This  Agreement  shall  be  binding  upon  and  inure to the
benefit of each party  hereto and its  successors  and assigns (but neither the
Guarantor  nor the  Borrower  may assign its rights or  obligations  hereunder)
and the Guarantor  and the Borrower  agree to cooperate and execute and deliver
any and all  agreements,  documents  and  instruments  reasonably  required  in
connection  with  the  terms  hereof,   including,   without  limitation,   any
documents  reasonably  required by any Bank in connection  with the  assignment
by such  Bank of any of its  rights  and  remedies  hereunder.  No  failure  or
delay by the  Agent  and the  Banks  to  exercise  any  right  hereunder  shall
operate as a waiver  thereof,  nor shall any single or partial  exercise of any
right,  power or privilege  preclude any other right,  power or privilege.  The
provisions of this  Agreement  are  severable  and if any one provision  hereof
shall  be  held  invalid  or   unenforceable   in  whole  or  in  part  in  any
jurisdiction,  such  invalidity  or  unenforceability  shall  affect  only such
provision in such  jurisdiction.  This  Agreement,  together  with all Exhibits
and Schedules  hereto,  expresses the entire  understanding of the parties with
respect  to the  transactions  contemplated  hereby.  This  Agreement  and  any
amendment hereby may be executed in several  counterparts,  each of which shall
be an original,  and all of which shall  constitute one  agreement.  In proving
this  Agreement,  it shall  not be  necessary  to  produce  more  than one such
counterpart  executed by the party to be charged.  THIS  AGREEMENT AND THE NOTE
ARE  CONTRACTS  UNDER  THE  LAWS OF THE  STATE  OF  CONNECTICUT  AND  SHALL  BE
CONSTRUED IN ACCORDANCE  THEREWITH AND GOVERNED  THEREBY.  THE BORROWER  AGREES
THAT ANY SUIT FOR THE  ENFORCEMENT  OF ANY OF THE LOAN DOCUMENTS MAY BE BROUGHT
IN THE  COURTS  OF THE  STATE  OF  CONNECTICUT  OR ANY  FEDERAL  COURT  SITTING
THEREIN.

<PAGE>


      19. WAIVER  OF  JURY  TRIAL. THE  BORROWER  AND THE  GUARANTOR,  AS AN
INDUCEMENT  TO THE  AGENT AND THE BANKS TO ENTER  INTO THIS  AGREEMENT,  HEREBY
WAIVE ALL  RIGHTS  TO A JURY  TRIAL  WITH  RESPECT  TO ANY  ACTION  ARISING  IN
CONNECTION WITH ANY LOAN DOCUMENT.

      20. PREJUDGMENT   REMEDY   WAIVER. THE   BORROWER  AND  THE  GUARANTOR
ACKNOWLEDGE  THAT THE FINANCING  EVIDENCED  HEREBY IS A COMMERCIAL  TRANSACTION
WITHIN THE MEANING OF CHAPTER 903a OF THE  CONNECTICUT  GENERAL  STATUTES.  THE
BORROWER AND THE  GUARANTOR  HEREBY WAIVE THEIR RIGHT TO NOTICE AND PRIOR COURT
HEARING OR COURT ORDER UNDER  CONNECTICUT  GENERAL  STATUTES  SECTIONS  52-278a
ET. SEQ.  AS AMENDED OR UNDER ANY OTHER  STATE OR FEDERAL  LAW WITH  RESPECT TO
ANY AND ALL  PREJUDGMENT  REMEDIES  THE  AGENT  AND THE  BANKS  MAY  EMPLOY  TO
ENFORCE THEIR RIGHTS AND REMEDIES  HEREUNDER.  MORE SPECIFICALLY,  THE BORROWER
ACKNOWLEDGE  THAT THE BANK'S AND THE AGENT'S  ATTORNEY  MAY,  PURSUANT TO CONN.
GEN. STAT.  52-278F,  ISSUE A WRIT FOR A PREJUDGMENT REMEDY WITHOUT SECURING A
COURT ORDER.  THE BORROWER  ACKNOWLEDGE  AND RESERVE  THEIR RIGHT TO NOTICE AND
A  HEARING  SUBSEQUENT  TO THE  ISSUANCE  OF A WRIT FOR  PREJUDGMENT  REMEDY AS
AFORESAID  AND THE AGENT  AND THE  BANKS  ACKNOWLEDGE  THE  BORROWER'S  AND THE
GUARANTOR'S RIGHT TO SAID HEARING SUBSEQUENT TO THE ISSUANCE OF SAID WRIT.

<PAGE>

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


                     .....     GROVE OPERATING, L.P.

                     .....     By:Grove Property Trust



                     .....     By:                            
                     .....           Name:  Joseph Labrosse
                     .....           Title:    Treasurer
                     .....           Address:  598 Asylum Avenue
                     .....           Hartford, Connecticut   06105
                     .....           Telephone:  (860) 520-4789
                     .....           Telecopy:    (860) 947-6960



                     .....     GROVE PROPERTY TRUST



                     .....     By:                            
                     .....           Name:  Joseph Labrosse
                     .....           Title:    Treasurer
                     .....           Address:  598 Asylum Avenue
                     .....           Hartford, Connecticut   06105
                     .....           Telephone:  (860) 520-4789
                     .....           Telecopy:    (860) 947-6960


<PAGE>


                     .....     RHODE ISLAND HOSPITAL
TRUST NATIONAL BANK,
                     .....     individually and as Agent



                     .....     By:                            
                     .....           Name:
                     .....           Title:



                     .....     By:                            
                     .....           Name:  James F. St. Thomas
                     .....           Title:    First Vice President
                     .....           Address:  One BankBoston Plaza
                     .....                  Providence, RI 02903
                     .....           Telephone:  (401) 278-7416
                     .....           Telecopy:    (401) 278-8006



                     .....     CITIZENS BANK OF RHODE
                     .....     ISLAND



                     .....     By:                            
                     .....           Name:
                     .....           Title:
                     .....           Address:  One Citizens Plaza
                     .....                  Providence, RI 02903
                                            Telecopy: (401) 455-5410

<PAGE>

                     .....     FIRST UNION NATIONAL BANK



                     .....     By:____________________________
                     .....           Name:
                     .....           Title:
                     .....           Address: Real Estate Capital
                     .....                 Markets Group
                     .....                 One First Union Center
                     .....                 6th Floor
                     .....                 Charlotte, NC 28288
                     .....           Telecopy: (704) 383-6205