THIRD AMENDMENT TO
                 AMENDED AND RESTATED BUSINESS LOAN AGREEMENT

         THIS THIRD AMENDMENT TO AMENDED AND RESTATED BUSINESS LOAN AGREEMENT
("Third Amendment"), made as of December 19, 1999, by and between AGREE
LIMITED PARTNERSHIP, a Delaware limited partnership, whose address is 31850
Northwestern Highway, Farmington Hills, Michigan 48334 (the "Borrower") and
MICHIGAN NATIONAL BANK, a national banking association, whose address is
27777 Inkster Road (10-02), Farmington Hills, Michigan 48333-9065 (the
"Bank"). Capitalized terms used but not defined in this Third Amendment shall
have the meaning assigned to such terms in the Restated Agreement (as defined
below).

                                   RECITALS

         WHEREAS, Borrower and Bank entered into an Amended and Restated
Business Loan Agreement dated September 30, 1996, but effective September 21,
1996, as amended by First Amendment and Second Amendment thereto ("Restated
Agreement"), whereby Bank agreed to make a $5,000,000 Line of Credit Loan
("Loan") available to Borrower;

         WHEREAS, the Loan has been extended but will mature December 19,
1999; and

         WHEREAS, Borrower has requested Bank to extend the maturity date of
the Loan and modify and amend certain terms of the Restated Agreement to
evidence the extension of the Loan and Bank has agreed to do so upon the
terms and condition of this Third Amendment.

                                  AGREEMENT

         NOW, THEREFORE, in consideration of and in reliance upon the
foregoing recitals of fact and the agreements among the parties set forth in
this Agreement, the Restated Agreement is hereby amended as follows:

A.       AMENDMENT OF RESTATED AGREEMENT.

         1. Amendment of Section I. The MATURITY DATE AND LOAN DATE set forth
in Section I of the Restated Agreement are changed to read "December 19,
2000" and "December 19, 1999", respectively.

B.       REPRESENTATIONS AND WARRANTIES.

         Borrower represents, warrants, covenants and agrees that as of the
date hereof, after giving effect to the consummation of the transactions
contemplated by this Third Amendment:

         1. Authority. Each of Borrower and Guarantor, as applicable, has
full power, authority and legal right to enter into the Third Amendment and
the Note (as defined below). The execution, delivery and performance by
Borrower and Guarantor of the applicable Third Amendment documents:


                  (a) have been duly authorized by all necessary partnership
         or corporate action, as applicable, of Borrower and Guarantor;

                  (b) do not and will not, by lapse of time, the giving of
         notice or otherwise, contravene the terms of Borrower's or
         Guarantor's respective partnership agreement or certificate,
         articles of incorporation or bylaws or of any indenture, agreement
         or undertaking to which Borrower or Guarantor is a party or by which
         Borrower or Guarantor is or any of their respective property are
         bound;

                  (c) do not and will not require any governmental consent,
         registration or approval;

                  (d) do not and will not, by lapse of time, the giving of
         notice or otherwise, contravene any material contractual or
         governmental restriction to which Borrower or Guarantor, or any of
         their respective property may be subject; and

                  (e) do not and will not, except as contemplated herein,
         result in the imposition of any lien, charge, security interest or
         encumbrance upon any property of Borrower or Guarantor under any
         existing indenture, mortgage, deed of trust, loan or credit
         agreement or other material agreement or instrument to which
         Borrower or Guarantor is a party or by which Borrower or Guarantor
         or any of their respective property may be bound or affected.

         2. Binding Effect. Each of the Third Amendment documents is the
legal, valid and binding obligation of Borrower and Guarantor, as
appropriate, and is enforceable against Borrower and Guarantor, as
appropriate, in accordance with its terms, except as such enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors' rights generally and
by equitable principles (whether or not any action to enforce such document
is brought at law or in equity).

         3. Agreement Representations and Warranties. The warranties and
representations of Borrower contained in the Restated Agreement and the
Related Documents are true, correct and complete on and as of the Effective
Date and the date hereof, to the same extent as though made on and as of that
date, and taking into account any revised Exhibits attached to this Third
Amendment.

         4. Default. Upon closing of the Third Amendment transaction, no
Event of Default or Default has occurred and is continuing, and neither
Borrower or Guarantor has any defense, setoff or counterclaim with respect to
the Note, the Restated Agreement or any documents executed in connection
therewith.

                                      2



C.       CONDITIONS TO CLOSING.

         In addition to those conditions set forth elsewhere in the Restated
Agreement, the obligations of Bank under this Third Amendment are conditioned
upon (a) the fulfillment, in a manner satisfactory to Bank on or before the
date hereof, of each of the following terms and conditions or (b) the
delivery on or before the date hereof, duly executed, in form and substance
satisfactory to Bank (and their counsel) of the following documents, as the
case may be:

         1.       Third Amendment Documents.

                  (a) Third Amendment. Borrower and Guarantor shall have
executed and delivered this Third Amendment to Bank.

                  (b) Fifth Amended and Restated Note. Borrower shall have
executed and delivered the Fifth Amended and Restated Note ("Note").

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

         2. Organizational Documents. Bank shall have received (i) with
respect to Guarantor, the certificate of incorporation of Guarantor, as
amended, modified or supplemented to the date hereof, certified to be true,
correct and complete by the appropriate Secretary of State, together with a
good standing certificate from such Secretary of State, and (ii) with respect
to Borrower, the agreement of limited partnership of Borrower, as amended,
modified or supplemented to the date hereof, certified to be true, correct
and complete by a general partner of Borrower, together with a copy of the
certificate of limited partnership of Borrower, as amended, modified or
supplemented to the date hereof, certified to be true, correct and complete
by the appropriate Secretary of State.

         3. Certified Resolutions. Bank shall have received a certificate of
the secretary or assistant secretary of Guarantor and dated the date hereof,
certifying (i) the names and true signatures of the incumbent officers of
Guarantor authorized to sign the applicable Third Amendment documents and
(ii) the resolutions of Guarantor's board of directors approving and
authorizing the execution, delivery and performance of all Third Amendment
documents executed by Guarantor.

         4. Additional Matters. Bank shall have received such other
certificates, opinions, documents and instruments relating to the Third
Amendment transaction as may have been reasonably requested by Bank, and all
corporate and other proceedings and all other documents and all legal matters
in connection with the Third Amendment transaction shall be satisfactory in
form and substance to Bank.

                                      3



D.       AMENDMENT AND AFFIRMATION OF LOAN DOCUMENTS.

         1. Affirmation of Loan Documents. Borrower and Guarantor acknowledge
and affirm that (i) the Restated Agreement, as amended by the Third
Amendment, the Mortgages, the Assignments and the Guaranty are enforceable
against the Borrower and Guarantor, as applicable, and remain in full force
and effect and shall be unamended, unchanged and unmodified, except as
specifically set forth in the Third Amendment; and (ii) the Collateral and
the Guaranty shall continue to secure and/or guaranty the repayment of the
Obligations, whether or not the Obligations were contemplated by Borrower,
Guarantor or Bank at the time of the execution of the Restated Agreement and
the Related Documents, as amended hereby.

E.       MISCELLANEOUS.

         1. Section Titles. The section titles contained in this Third
Amendment shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties.

         2. Parties. Whenever in this Third Amendment reference is made to
any of the parties hereto, such reference shall be deemed to include,
wherever applicable, a reference to the successors and assigns of the
Borrower, Guarantor and Bank.

         3. References. Any reference to the Restated Agreement contained in
any notice, request, certificate, or other document executed concurrently
with or after the execution and delivery of this Third Amendment shall be
deemed to include this Third Amendment unless the context shall otherwise
require.

         4. Continued Effectiveness. Notwithstanding anything contained
herein, the terms of this Third Amendment are not intended to and do not
serve to effect a novation as to the Restated Agreement. The parties hereto
expressly do not intend to extinguish the Restated Agreement; instead, it is
the express intention of the parties hereto to reaffirm Borrower's
Obligations created under the Restated Agreement, as amended by this Third
Amendment.

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

         6 Release of Claims; Limitation of Liability. In consideration of
Bank entering into this Third Amendment, Borrower and Guarantor do each
hereby release and discharge Bank of and from any and all claims, harm,
injury, and damage of any and every kind, known or unknown, legal or
equitable, which Borrower or Guarantor have against Bank through the date of
this Third Amendment. Borrower and Guarantor confirm to Bank that they have
reviewed the effect of this release with competent legal counsel of their
choice, or have been afforded the opportunity to do so, prior to execution of
this Third Amendment and each acknowledge and agree that Bank is relying upon
this release in entering into this Third Amendment. No claim may be made by
Borrower, Guarantor, or any other Person against Bank or the affiliates,
directors, officers, employees, attorneys or Bank of any of such Persons for
any special, indirect, consequential or punitive damages in respect of any
claim for

                                      4



breach of contract or any other theory of liability arising out of or related
to the transactions contemplated by the Agreement or any other transactions,
or any act, omission or event occurring in connection therewith; and Borrower
and Guarantor hereby waive, release and agree not to sue upon any claim for
any such damages, whether or not accrued and whether or not known or
suspected to exist in its favor.

         7. Entire Agreement. This Third Amendment, the exhibits attached
hereto, and the other Third Amendment documents represent the entire
agreement between the parties hereto relating to the Third Amendment and may
not be altered or modified in any respect, except upon the execution by the
parties hereto of a written document or instrument so providing.

         IN WITNESS WHEREOF, this Third Amendment has been duly executed as
of the day and year first above written.

                                      AGREE LIMITED PARTNERSHIP,
                                      a Delaware limited partnership

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

                                               By:  ________________________
                                                        Name:  Richard Agree
                                                        Title:  President


                                      MICHIGAN NATIONAL BANK,
                                      a national banking association

                                      By:  ___________________________
                                               Name:   Irwin S. Knox
                                               Title:  Vice President


                                      5


                            AGREEMENT OF GUARANTOR

         By executing this Third Amendment the undersigned "Guarantor" agrees
that the Indebtedness of Borrower is and, notwithstanding this Third
Amendment, will continue to be guaranteed to Bank in accordance with the
terms of the Amended and Restated Guaranty made September 30, 1996
("Guaranty") and executed and delivered by Guarantor to Bank, without limit.
In addition, Guarantor: (1) acknowledges and agrees that the Guarantor has
completely read and understands this Third Amendment; (2) consents to all of
the provisions of this Third Amendment relating to Borrower; (3) acknowledges
and agrees that the Guaranty continues in full force and effect; (4)
acknowledges receipt of good and lawful consideration for execution of the
Guaranty and this Third Amendment; (5) agrees promptly to furnish such
Financial Statements to Bank concerning the Guarantor as Bank shall
reasonably request; (6) agrees to all of those portions of this Third
Amendment which apply to Guarantor; (7) acknowledges and agrees that this
Third Amendment has been freely executed without duress and after an
opportunity was provided to Guarantor for review of this Third Amendment by
competent legal counsel of Guarantor's choice; and (8) acknowledges that the
Bank has provided Guarantor with a copy of this Third Amendment and such
other Related Documents as Guarantor has requested.


                                     GUARANTOR:

                                     AGREE REALTY CORPORATION,
                                     a Maryland corporation


                                     By: ________________________
                                            Richard A. Agree
                                     Its:   President


0667104.02

                                      6