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                                                                   EXHIBIT 10.28



                             PROJECT LOAN AGREEMENT
                               (Indianapolis, IN)

         PROJECT LOAN AGREEMENT, dated as of November ___, 2002 (this
"Agreement"), between WILMINGTON TRUST COMPANY, not in its individual capacity,
but solely as Owner Trustee, having an office at Rodney Square North, 1100 North
Market Street, Wilmington, Delaware 19890 (together with its permitted
successors and assigns, the "Lender"), and INDIANAPOLIS STORE NO. 16 L.L.C, a
Delaware limited liability company having its principal office at c/o Agree
Realty Corp., 31850 Northwestern Highway, Farmington Hills, Michigan 49334
(together with its permitted successors and assigns, the "Borrower").
Capitalized terms used in this Agreement and not otherwise defined shall have
the respective meanings as specified in Section 1 hereof.


                              Preliminary Statement

         The Borrower is the owner of the land located in the City of
Indianapolis, Marion County, Indiana and more particularly described on Exhibit
A (the "Land"). In order to obtain permanent financing for the Land and the
Improvements thereon, the Borrower has requested the Lender to provide to the
Borrower a loan in the principal amount of $1,301,866.24 (the "Project Loan").
The Lender desires to make the Project Loan to the Borrower, which Project Loan
is evidenced by the Project Loan Note of even date herewith and which Project
Loan Note is secured by a Mortgage and an Assignment of Leases and Rents, each
of even date herewith, from the Borrower to Lender.

         Subject to the terms and conditions of this Agreement, the Lender has
agreed to make the Project Loan to the Borrower.

         NOW THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto covenant and agree as follows:


                             SECTION 1. DEFINITIONS

         1.1 Defined Terms. For the purposes of this Agreement the following
terms shall have the meaning given to such term below:

         "Access Laws" shall mean the Fair Housing Amendments Act of 1988 and
the Americans with Disabilities Act of 1990, as such may be amended from time to
time, and any other Federal, State or local statute, law, ordinance, code, rule,
regulation, order, or decree regulating, relating to or imposing liability or
standards of conduct relating to barrier-free access or access of the
handicapped or disabled to the Property, including, without limitation, the
Americans with Disabilities Act Accessibility Guidelines for Buildings and
Facilities.


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         "Account(s)" shall have the meaning specified in Section 9.1.

         "Affiliate" with respect to any Person, any other Person (i) which
directly or indirectly controls, is controlled by, or is under common control
with such Person, (ii) which beneficially owns or holds 5% or more of any class
of the voting or other equity interests of such Person, or (iii) 5% or more of
any class of voting interests or other equity interests of which is beneficially
owned or held, directly or indirectly, by such Person. Control, as used in this
definition, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract or otherwise, including
the power to elect a majority of the directors or trustees of a corporation or
trust, as the case may be.

         "Agreement" shall mean this Project Loan Agreement, as it may be
amended, supplemented or otherwise modified from time to time.

         "Assignment of Lease" shall mean the Assignment of Leases and Rents, of
even date herewith, made by the Borrower in favor of the Lender.

         "Bankruptcy Code" shall mean Title 11 of the United States Code
entitled "Bankruptcy", as now or hereafter in effect, or any successor thereto.

         "Basic Rent" shall be equal to Project Loan Debt Service during the
Basic Term and as set forth on Schedule II to the Lease during the Renewal
Terms.

         "Beneficial Owner" shall have the meaning specified in Section 5.4(b).

         "Borrower" shall have the meaning specified in the introductory
paragraph hereof.

         "Borrower's Certificate" shall mean the certification by Borrower of
certain representations with respect to Borrower delivered by Borrower in
connection with the closing of the Project Loan.

         "Business Day" shall mean any day other than a Saturday or Sunday or a
legal holiday on which commercial banks are authorized or required to be closed
for business in New York, New York.

         "Called Principal" shall mean with respect to the Project Loan Note,
the principal of the Project Loan Note that is to be prepaid pursuant to Section
3.2 or has become or is declared to be immediately due and payable pursuant to
Section 10, as the context requires.

         "Closing Date" shall mean n November 25, 2002.

         "Code" shall have the meaning assigned to such term in Section 4.18.




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         "Collateral" shall mean all assets of the Borrower, now owned or
hereafter acquired, upon which a Lien is purported to be created by the Security
Documents.

         "Collateral Trust Event of Default" shall mean those "Events of
Default" specified in subsections (a), (c) (with respect to any representation,
warranty or statement made by Lessee only), (d), (f), and (i) of Section 6.1 of
the Collateral Trust Indenture.

         "Collateral Trust Indenture" shall mean the Collateral Trust Indenture
dated as of November 15, 2002 by and between Wilmington Trust Company, not in
its individual capacity but solely as Owner Trustee, and Wells Fargo Bank
Northwest, N.A., as Trustee.

         "Collateral Trustee" shall mean Wells Fargo Bank Northwest, N.A., its
permitted successors and assigns.

         "Contingent Obligation" shall mean as to any Person, any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other monetary obligations ("primary obligations") of any other
Person (the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of such Person, whether or not
contingent, (a) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (b) to advance or supply
funds (i) for the purchase or payment of any such primary obligation or (ii) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (c) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (d) otherwise to assure or hold harmless
the owner of such primary obligation against loss in respect thereof; provided,
however, that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.

         "Contractual Obligation" shall mean as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.

         "Default" shall mean any of the events specified in the "Events of
Default" subsection, whether or not any requirement for the giving of notice,
the lapse of time, or both, or any other condition has been satisfied.

         "Default Payment" shall have the meaning assigned to such term in
section 10.1.




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         "Developer Equity" shall mean, as of the date hereof, the amount of
$173,109.16 as such amount is increased, dollar for dollar, as a result of the
application of principal payments to the Project Loan which reduce the principal
balance of the Project Loan.

         "Developer Yield" shall mean the sum of $1,731.09 per month, payable as
Supplemental Rent under the Lease.

         "Discounted Value" shall mean with respect to the Called Principal of
the Project Loan Note, the amount obtained by discounting all Remaining
Scheduled Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a discount
factor (applied on the same periodic basis as that on which interest on the
Project Loan Note is payable) equal to the Reinvestment Yield with respect to
such Called Principal.

         "Dollar, Dollars, U.S. Dollars" and the symbol "$" shall mean lawful
money of the United States of America.

         "Environmental Laws" shall mean all federal, state, local and foreign
Laws and regulations, including permits, licenses, authorizations, bonds,
orders, judgments, consent decrees issued, or entered into, pursuant thereto,
relating to pollution or protection of human health or the environment or
employee safety in the work place.

         "ERISA" shall have the meaning assigned to such term in Section
4.18(b).

         "Event of Default" shall mean any of the events specified in the
"Events of Default" subsection, provided that any requirement for the giving of
notice, the lapse of time, or both, or any other condition, has been satisfied.

         "Exculpated Persons" shall have the meaning assigned to such term in
Section 11.8.

         "GAAP" shall mean generally accepted accounting principles as are in
effect from time to time.

         "Governmental Authority" shall mean the United States of America, any
state and any municipality, local government or other political subdivision
thereof and any agency, department, bureau, board, commission or other
instrumentality or any of them, now existing or subsequently created.

         "Guarantor" shall mean Borders Group, Inc., a Michigan corporation, its
successors and assigns.

         "Guaranty" shall mean the Lease Guaranty Agreement of even date
herewith entered into by Guarantor for the benefit of Lessor with respect to the
obligations of Lessee under the Lease.




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         "Hazardous Substance" shall mean any of the following: (i) any
petroleum or petroleum product, explosives, radioactive materials, asbestos,
formaldehyde, polychlorinated biphenyls, lead and radon gas; (ii) any substance,
material, product, derivative, compound or mixture, mineral, chemical, waste,
gas, medical waste, or pollutant, in each case whether naturally occurring,
man-made or the by-product of any process, that is toxic, harmful or hazardous
to the environment or human health or safety; or (iii) any substance, material,
product, derivative, compound or mixture, mineral, chemical, waste, gas, medical
waste or pollutant that would support the assertion of any claim under any
Environmental Law, whether or not defined as hazardous as such under any
Environmental Law.

         "Improvements" shall mean the improvements now or hereafter to be
constructed on the Land.

         "Indebtedness" shall mean as to any Person at a particular time, (a)
indebtedness for borrowed money or for the deferred purchase price of property
or services in respect of which such Person is liable, contingently or
otherwise, as obligor, guarantor or otherwise and (b) obligations under leases
which shall have been or should be, in accordance with GAAP, recorded as capital
leases in respect of which obligations such Person is liable, contingently or
otherwise, or in respect of which obligations such Person assures a creditor
against loss.

         "Independent Director" shall mean a Person which is a director among
the board of directors of the managing member or general partner, as applicable,
of Borrower which is reasonably satisfactory to Lender who shall not have been
at the time of such individual's appointment or at any time thereafter, and may
not have been at any time during the preceding two years (i) a shareholder of,
or an officer, director, partner or employee of, Borrower or any of its
shareholders, subsidiaries or affiliates, (ii) a substantial creditor, customer
of, or supplier to, Borrower or any of its shareholders, subsidiaries or
affiliates, (iii) a Person or other entity controlling or under common control
with any such shareholder, partner, supplier or customer, or (iv) a member of
the immediate family of any such shareholder, officer, director, partner,
employee, supplier or customer. As used herein, the term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person or entity, whether through
ownership of voting securities, by contract or otherwise.

         "Insurance Requirements" shall mean all terms and conditions of any
insurance policy required by the Mortgage to be maintained by the Borrower and
all requirements of the issuer of any such policy.

         "Land" shall have the meaning specified in the Preliminary Statement.

         "Law" shall mean any law (including common law), constitution, statute,
treaty, regulation, rule, ordinance, opinion, release, ruling, order,
injunction, writ, decree or award of any Official Body.

         "Lease" shall mean the Lease, dated as of the date hereof, between the
Lessee and the Borrower with respect to the Property.




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         "Lease Event of Default" shall have the meaning given to such term in
Section 18.1 of the Lease.

         "Legal Requirements" shall have the meaning given to such term in the
Appendix to the Lease.

         "Lender" shall have the meaning assigned to such term in the
introductory paragraph hereto.

         "Lender's Rights" shall have the meaning assigned to such term in
Section 11.3.

         "Lessee" shall mean Borders, Inc., a Colorado corporation, its
permitted successors and assigns.

         "Lessor" shall have the meaning given to such term in the Appendix to
the Lease.

         "Lessor Liens" shall mean any Lien, true lease or sublease or
disposition of title arising as a result of (a) any claim against the Lessor,
(b) any act or omission of the Lessor which is not required by the Project Loan
Documents or is in violation of any of the terms of the Project Loan Documents,
(c) any claim against the Lessor with respect to the Property against which
Lessee is not required to indemnify Lessor or (d) any claim against the Lessor
arising out of any transfer by the Lessor of all or any portion of the interest
of the Lessor in the Property, other than the transfer of title to or possession
of the Property by Lessor pursuant to and in accordance with the Lease or the
Project Loan Agreement or pursuant to the exercise of the remedies set forth in
Article XVIII of the Lease.

         "Lien" shall mean any mortgage, deed of trust, pledge, lien, security
interest, charge or other encumbrance or security arrangement of any nature
whatsoever, whether voluntarily or involuntarily given, including any
conditional sale or title retention arrangement, and any assignment, deposit
arrangement or lease intended as, or having the effect of, security.

         "Maturity Date" shall mean the maturity date set forth in the Project
Loan Note.

         "Mortgage" shall mean the Mortgage or Deed of Trust, as applicable,
dated as of the date hereof, made by the Borrower in favor of the Lender.

         "Non-Consolidation Opinion" shall have the meaning assigned to such
term in Section 5.4(n).

         "Note Rate" shall mean six and eighty-five one-hundredths percent
(6.85%) per annum.

         "Obligation" shall mean any obligation or liability of the Borrower to
the Lender, however created, arising or evidenced, whether direct or indirect,
absolute or contingent, now or




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hereafter existing, or due or to become due, under or in connection with this
Agreement or any other Project Loan Document.

         "Obligations" shall have the meaning specified in the Mortgage.

         "Official Body" shall mean any national, federal, state, local or other
government or political subdivision or any agency, authority, bureau, central
bank, commission, department or instrumentality of either, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or domestic.

         "Operative Agreements" shall have the meaning assigned to such term in
the Lease.

         "Overdue Rate" shall mean an amount equal to the greater of (i) two
percent (2%) per annum over the then current prime rate of interest published by
the Wall Street Journal, or its successor, from time to time and (ii) two
percent (2%) per annum over the Note Rate.

         "Participation Agreement" shall mean the Participation Agreement dated
as of November 15, 2002 by and among Lessee, Guarantor, Lender, the Collateral
Trustee and the beneficial owner and the purchasers identified therein.

         "Permits" shall mean all consents, licenses and building permits
required for construction, completion, occupancy and operation of the
Improvements in accordance with all Legal Requirements affecting the Property.

         "Permitted Exceptions" shall mean those exceptions to title of the
Property set forth on Schedule 1 to this Agreement and approved by the Lender.

         "Person" shall mean an individual, partnership, corporation, business
trust, joint stock company, limited liability company, limited liability
partnership, trust, unincorporated association, joint venture, Governmental
Authority or other entity of whatever nature.

         "Prepayment Premium" shall mean with respect to the Project Loan Note,
an amount equal to the excess, if any, of the Discounted Value of the Remaining
Scheduled Payments with respect to the Called Principal of the Project Loan Note
over the amount of such Called Principal, provided that the Prepayment Premium
may in no event be less than zero.

         "Principal Office" shall mean Rodney Square North, 1100 North Market
Street, Wilmington, Delaware 19890.

         "Project Loan" shall have the meaning set forth in the Preliminary
Statement.

         "Project Loan Debt Service" shall mean the debt service payable
pursuant to the Project Loan Note as set forth on Schedule I to the Project Loan
Note.




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         "Project Loan Documents" shall mean the collective reference to this
Agreement, the Project Loan Note, the Security Documents, and all other
documents and instruments from time to time evidencing or securing the Project
Loan.

         "Project Loan Note" shall have the meaning specified in Section 2.2.

         "Property" shall mean the collective reference to the Land and the
Improvements.

         "REA" shall have the meaning specified in Section 11.2 of the Lease.

         "Regulated Substances" shall mean any substance, including any solid,
liquid, semisolid, gaseous, thermal, thoriated or radioactive material, refuse,
garbage, wastes, chemicals, petroleum products, by-products, co products,
impurities, dust, scrap, heavy metals, any substance defined as a "hazardous
substance," "pollutant," "pollution," "contaminant," "hazardous or toxic
substance," "extremely hazardous substance," "toxic chemical," "toxic waste,"
"hazardous waste," "industrial waste," "residual waste," "solid waste,"
"municipal waste," "mixed waste," "infectious waste," "chemotherapeutic waste,"
"medical waste," "regulated substance" or any related materials, substances or
wastes as now or hereafter defined pursuant to any Environmental Laws, the
generation, manufacture, extraction, processing, distribution, treatment,
storage, disposal, transport, recycling, reclamation, use, reuse, spilling,
leaking, dumping, injection, pumping, leaching, emptying, discharge, escape,
release or other management or mismanagement of which is regulated by the
Environmental Laws.

         "Reinvestment Yield" shall mean, with respect to the Called Principal
of the Project Loan Note, .50% over the yield to maturity implied by (i) the
yields reported as of 10:00 A.M. (New York City time) on the second Business Day
preceding the Settlement Date with respect to such Called Principal, on the
display designated as Screen USD on the Bloomberg Financial Markets Services
Screen (or such other display as may replace Screen USD on Bloomberg Financial
Markets Screen) for actively traded U.S. Treasury securities having a maturity
equal to the Remaining Average Life of such Called Principal as of such
Settlement date, or (ii) if such yields are not reported as of such time or the
yields reported as of such time are not ascertainable, the Treasury Constant
Maturity Series Yields reported, for the latest day for which such yields have
been so reported as of the second Business Day preceding the Settlement Date
with respect to such called Principal, in Federal Reserve Statistical Release
H.15 (519) (or any comparable successor publication) for actively traded U.S.
Treasury securities having a constant maturity equal to the Remaining Average
Life of such Called Principal as of such Settlement Date. Such implied yield
will be determined, if necessary, by (a) converting U.S. Treasury bill
quotations to bond-equivalent yields in accordance with accepted financial
practice and (b) interpolating linearly between (1) the actively traded U.S.
Treasury security with the maturity closest to and greater than the Remaining
Average Life and (2) the actively traded U.S. Treasury security with the
maturity closest to and less than the Remaining Average Life.

         "Remaining Average Life" shall mean, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth year)
obtained by dividing (i) such Called Principal into (ii) the sum of the products
obtained by multiplying (a) the principal component of each




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remaining Scheduled Payment with respect to such Called Principal by (b) the
number of years (calculated to the nearest one-twelfth year) that will elapse
between the Settlement Date with respect to such Called Principal and the
scheduled due date of such Remaining Scheduled Payment.

         "Remaining Scheduled Payment" shall mean, with respect to the Called
Principal of the Project Loan Note, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date with respect to
such Called Principal if no payment or purchase of such Called Principal were
made prior to its scheduled due date, provided that if such Settlement Date is
not a date on which interest payments are due to be made under the terms of the
Project Loan Note, then the amount of the next succeeding scheduled interest
payment will be reduced by the amount of interest accrued to such Settlement
Date and required to be paid on such Settlement Date pursuant to Section 3.2 or
Section 10.

         "Renewal Terms" shall have the meaning assigned to such term in Section
2.2(b) of the Lease.

         "Rent" shall have the meaning assigned to such term in Section 3.4 of
the Lease.

         "Responsible Officer" shall mean an individual holding the office of
vice president or higher or manager, as applicable.

         "Scheduled Payment Dates" shall mean the dates upon which payments of
interest on and principal of the Project Loan are due and payable pursuant to
the Project Loan Note.

         "Security Documents" shall mean the collective reference to the
Mortgage, the Assignment of Lease and consent thereto, and all other documents
from time to time securing the indebtedness evidenced by the Project Loan Note.

         "Settlement Date" shall mean, with respect to the Called Principal of
the Project Loan Note, the date on which such Called Principal is to be prepaid
pursuant to Section 3.2 or has become or is declared to be immediately due and
payable pursuant to Section 10, as the context requires.

         "SPC Member" shall have the meaning assigned thereto in Section 5.4(k).

         "Standstill Period" shall mean, for the purposes of Section 10.1, a
period commencing either (i) upon the occurrence of an Event of Default under
Sections 10.1(j) or (k) hereof (except for a default under section 18.1(a) of
the Lease as a result of Lessee's failure to pay Basic Rent) or (ii) on the date
that Lender delivers to Borrower written notice that an Event of Default has
occurred under Section 10.1(l) hereof or under Section 10.1(k) hereof as a
result of the failure of Lessee to pay Basic Rent, and in each such case
terminating ninety (90) days thereafter, provided, however, that if a Lease
Event of Default described in Section 18.1(g) of the Lease shall have occurred
and is then continuing, such period shall terminate on the earlier to occur of
(x) the final date under the Bankruptcy Code that Lessee or a bankruptcy trustee
may elect to assume or reject



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the Lease and (y) ninety (90) days after the Lease Event of Default under
Section 18(g) of the Lease.

         "Subsidiary" of any Person shall mean any corporation, partnership,
joint venture, trust or estate of which (or in which) more than 50% of:

                  (i) the outstanding capital stock having Voting Power to elect
         a majority of the Board of Directors of such corporation (irrespective
         of whether at the time capital stock of any other class or classes of
         such corporation shall or might having Voting Power upon the occurrence
         of any contingency),

                  (ii) the interest in the capital or profits of such
         partnership or joint venture, or

                  (iii) the beneficial interest of such trust or estate,

is at the time directly or indirectly owned by such Person, by such Person and
one or more of its Subsidiaries or by one or more of such Person's Subsidiaries.

         "Supplemental Rent" shall mean all amounts, liabilities and obligations
(other than Basic Rent) which Lessee assumes or agrees to pay to Lessor or any
other Person under the Lease or under any of the other Operative Agreements
including, without limitation, fees, costs and expenses payable to Lender and to
the Collateral Trustee or other Persons pursuant to Sections 5.3(a) and 7.4 of
the Project Loan Agreement, any payments required to be made by Lessor under the
REA and Termination Value.

         "Taxes" shall have the meaning given to such term in the Participation
Agreement.

         "Termination Value" shall mean an amount equal to the sum of the
outstanding principal amount of the Project Loan Note, together with accrued and
unpaid interest and any Prepayment Premium and any other amounts due and owing
by Lessee or Lessor to Lender or any other Person under the Operative
Agreements, all calculated as of the Termination Date or the Prepayment Date, as
the case may be.

         "Title Company" shall mean First American Title Insurance Company,
together with such reinsurers or coinsurers of such title company or companies,
or such other title companies as may be approved by the Lender.

         1.2 Construction. Unless the context of this Agreement otherwise
clearly requires, the following rules of construction shall apply to this
Agreement and each of the other Project Loan Documents:

                  (a) references to the plural include the singular, the plural,
the part and the whole; "or" has the inclusive meaning represented by the phrase
"and/or," and "including" has the meaning represented by the phrase "including
without limitation";



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                  (b) references to "determination" of or by the Lender shall be
deemed to include good faith estimates by the Lender (in the case of
quantitative determinations) and good faith beliefs by the Lender (in the case
of qualitative determinations) and such determination shall be conclusive absent
manifest error;

                  (c) whenever the Lender is granted the right herein to act in
its sole discretion or to grant or withhold consent such right shall be
exercised in good faith;

                  (d) the words "hereof," "herein," "hereunder," "hereto" and
similar terms in this Agreement or any other Project Loan Document refer to this
Agreement or such other Project Loan Document as a whole and not to any
particular provision of this Agreement or such other Project Loan Document;

                  (e) the section and other headings contained in this Agreement
or such other Project Loan Document and the Table of Contents preceding this
Agreement or such other Project Loan Document are for reference purposes only
and shall not control or affect the construction of this Agreement or such other
Project Loan Document or the interpretation thereof in any respect;

                  (f) article, section, subsection, clause, schedule and exhibit
references are to this Agreement or other Project Loan Document, as the case may
be, unless otherwise specified;

                  (g) reference to any Person includes such Person's successors
and assigns but, if applicable, only if such successors and assigns are
permitted by this Agreement or other Project Loan Document, as the case may be,
and reference to a Person in a particular capacity excludes such Person in any
other capacity;

                  (h) reference to any agreement (including this Agreement and
any other Project Loan Document together with the schedules and exhibits hereto
or thereto), document or instrument means such agreement, document or instrument
as amended, modified, replaced, substituted for, superseded or restated;

                  (i) relative to the determination of any period of time,
"from" means "from and including," "to" means "to but excluding" and "through"
means "through and including"; and

                  (j) references to "shall" and "will" are intended to have the
same meaning.

         1.3 Accounting Principles. Except as otherwise provided in this
Agreement, all computations and determinations as to accounting or financial
matters and all financial statements to be delivered pursuant to this Agreement
shall be made and prepared in accordance with GAAP (including principles of
consolidation where appropriate), and all accounting or financial terms shall
have the meanings ascribed to such terms by GAAP; provided, that if any change
in GAAP or the application thereof occurs hereafter, or if the Lessee adopts a
change to its accounting principles or methods with the agreement of its
independent certified public accountants, and such change results in a change in
the calculation of any financial covenant or




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<PAGE>

restriction set forth herein, then the parties hereto agree to enter into and
diligently pursue negotiations in order to amend such financial covenant or
restriction so as to equitably reflect such change, with the desired result that
the criteria for evaluating the financial condition and results of operations of
the Lessee shall be the same after such change as if such change had not been
made.

                           SECTION 2. THE PROJECT LOAN

         2.1 Project Loan Commitment. Subject to the terms and conditions of
this Agreement and relying upon the representations and warranties herein set
forth, the Lender agrees to make the Project Loan to the Borrower on the Closing
Date.

         2.2 Note. The Project Loan shall be evidenced by a promissory note of
the Borrower, in favor of Lender of even date herewith in the principal amount
of $1,301,866.24 (the "Project Loan Note") due and payable in installments as
provided therein, and in any event payable in full on or before December 1,
2017.

         2.3 Maximum Interest Rate. If at any time the designated rate
applicable to the Project Loan made by the Lender exceeds the highest lawful
rate, the rate of interest on the Project Loan shall be limited to the Lender's
highest lawful rate.

         2.4 Use of Proceeds. The proceeds of the Project Loan shall be used by
the Borrower only for the payment in full of all indebtedness outstanding on the
Closing Date which is secured by a lien upon the Property.

                               SECTION 3. PAYMENTS

         3.1 Payments. All payments and prepayments to be made in respect of
principal, interest, fees or other amounts due from the Borrower hereunder shall
be payable prior to 11:00 A.M. (Eastern time) on the Scheduled Payment Dates set
forth in the Project Loan Note without presentment, demand, protest or notice of
any kind, all of which are hereby expressly waived by the Borrower, and without
setoff, counterclaim or other deduction of any nature, and an action therefor
shall immediately accrue. Such payments shall be made to the Lender at the
Principal Office in U.S. Dollars or at such other location as directed by Lender
in writing, and in immediately available funds. If any payment is required
hereunder on a day that is not a Business Day, then such payment shall be due on
the next succeeding Business Day.

         3.2 Prepayments. (a) Optional Prepayments. The Borrower shall have the
right from time to time upon sixty (60) days prior written notice to Lender and
Lessee to prepay the Project Loan in whole but not in part, subject to payment
of the Prepayment Premium, if any, on a Scheduled Payment Date.

         Such notice shall set forth the following:



                                       12

<PAGE>

                           (i) the date, which shall be a Business Day, on which
                  the proposed prepayment is to be made (the "Prepayment Date");

                           (ii) the total principal amount of such prepayment;
                  and

                           (iii) the estimated calculation of the Prepayment
                  Premium, if any.

         A Prepayment Notice shall be irrevocable. The Termination Value
calculated as of the Prepayment Date shall be due and payable to Lender on the
Prepayment Date, provided, however, that if such payment is not made on the
Prepayment Date, the Lease, this Project Loan Agreement and the other Operative
Agreements shall remain in full force and effect unless and until such payment
is made in full. No Prepayment Premium shall be payable in connection with the
repayment of the Loan in full on or after the date which is six months
immediately preceding the Maturity Date.

                  (b) Mandatory Prepayments. On any date on which the Lessee is
obligated to pay the Lessor an amount equal to the Termination Value in
connection with the delivery of a Termination Notice, the Borrower shall prepay
the Project Loan in full on such date in accordance with Section 9.1(b)(ii).

         3.3 Indemnity. In addition to any other indemnifications provided
herein or in the other Project Loan Documents, the Borrower covenants and agrees
at its sole cost and expense to protect, defend, indemnify and save harmless the
Lender and any and all of its successors and assigns hereunder from and against
all liabilities, obligations, claims, demands, damages, penalties, causes of
action, losses, fines, costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses), imposed upon or incurred by or
asserted against the Lender and any and all respective successors and assigns
hereunder (except to the extent caused by the gross negligence or willful
misconduct of the indemnified party) by reason of any of the following for which
the cause of action or liability accrued prior to a foreclosure or deed in lieu
of foreclosure or other transfer of the Property pursuant to the Lender's
exercise of its remedies hereunder: (a) any accident, injury to or death of
persons or loss of or damage to property occurring in, on or about the Property
or any part thereof or on the adjoining sidewalks, curbs, adjacent property or
adjacent parking areas, streets or ways; (b) any use, non-use or condition in,
on or about the Property or any part thereof or on adjoining sidewalks, curbs,
adjacent property or adjacent parking areas, streets or ways; (c) any failure on
the part of the Borrower to perform or comply with any of the terms of this
Agreement; (d) performance of any labor or services or the furnishing of any
materials or other property in respect of the Property or any part thereof; (e)
the presence, disposal, escape, seepage, leakage, spillage, discharge, emission
or release of any Hazardous Substance or asbestos on, from, or affecting the
Property or any property contiguous therewith; (f) to the extent not covered by
insurance, any personal injury (including wrongful death) or property damage
(real or personal) arising out of or related to any Hazardous Substance or
asbestos and any lawsuit brought or threatened, settlement reached, or
government order relating to such Hazardous Substance or asbestos; (g) any
violation of the Environmental Laws which are based upon or in any way related
to such Hazardous Substance or asbestos including,




                                       13

<PAGE>

without limitation, the costs and expenses of any remedial action, reasonable
attorney and consultant fees, investigation and laboratory fees, court costs,
and litigation expenses; (h) any failure of the Property to comply with any
Access Laws; (i) the occupation, condition, operation, service, design,
maintenance or management of the Property and (j) ownership of the Mortgage,
ownership of the Property by the Borrower or the ownership by Borrower of any
interest therein, or receipt of any Rents pursuant to the Assignment of Leases
and Rents or the Mortgage. Any amounts payable to Lender and any and all of its
respective successors and assigns hereunder by reason of the application of this
Section 3.3 shall be secured by the Mortgage and shall become immediately due
and payable and shall bear interest at the Overdue Rate from the date loss or
damage is sustained by the Lender and any or all of its respective successors
and assigns hereunder until paid. The obligations and liabilities of the
Borrower under this Section 3.3 shall survive any termination, satisfaction or
assignment of the Mortgage and the exercise by the Lender of any of its rights
or remedies hereunder including, but not limited to, the acquisition of the
Property by foreclosure or a conveyance in lieu of foreclosure. Nothing herein
contained, however, shall be deemed to impose personal liability on Borrower or
the Exculpated Persons for repayment of the Project Loan.

                  SECTION 4. BORROWER REPRESENTATIONS AND WARRANTIES

         In order to induce the Lender to enter into this Agreement, and in
order to induce the Lender to make the Project Loan to the Borrower, the
Borrower represents and warrants to the Lender as follows:

         4.1 Existence; Compliance with Law. The Borrower (a) is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, (b) has the power and authority, and the legal right, to own and
operate its property and to conduct the business in which it is currently
engaged, (c) is duly qualified and in good standing under the law of the
jurisdiction in which the Property is located and (d) is in compliance with all
material Legal Requirements.

         4.2 Power; Authorization; Enforceable Obligations. The Borrower has the
power and authority, and the legal right, to make, deliver and perform the
Project Loan Documents to which it is a party and to borrow hereunder and has
taken all necessary action to authorize the borrowings on the terms and
conditions of this Agreement and the Project Loan Note and to authorize the
execution, delivery and performance of the Project Loan Documents to which it is
a party. No consent or authorization of, filing with, notice to or other act by
or in respect of, any Governmental Authority or any other Person is required in
connection with the borrowings hereunder or with the execution, delivery,
performance, validity or enforceability of the Project Loan Documents to which
the Borrower is a party. This Agreement has been, and each other Project Loan
Document to which it is a party will be, duly executed and delivered on behalf
of the Borrower. This Agreement constitutes, and each other Project Loan
Document to which it is a party when executed and delivered will constitute, a
legal, valid and binding obligation of the Borrower enforceable against the
Borrower in accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar



                                       14

<PAGE>

laws relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.

         4.3 No Litigation. There is no action, suit or proceeding pending, or
to the best of the Borrower's knowledge threatened, against or affecting the
Borrower or the Property or that might have a materially adverse affect on the
Borrower or the Property in any court, or before or by any Governmental
Authority, whether federal, state, county or municipal.

         4.4 Consents, Approvals, Authorizations, Etc. No consent, approval,
order or authorization of or registration, declaration or filing with any
Governmental Authority is required in connection with the valid execution and
delivery of the Project Loan Documents or the carrying out or performance of any
of the transactions required or contemplated by the Project Loan Documents or,
if required, such consent, approval, order or authorization has been obtained or
such registration, declaration or filing has been accomplished.

         4.5 No Legal Bar. The execution, delivery and performance of the
Project Loan Documents, the borrowing under this Agreement and the use of the
proceeds of the Project Loan will not violate any Legal Requirement or any
Contractual Obligation of the Borrower and will not result in, or require, the
creation or imposition of any Lien on any of the Borrower's properties or
revenues pursuant to any Legal Requirement or Contractual Obligation, except for
the Lien of the Security Documents.

         4.6 Compliance with Building Codes, Zoning Laws, Etc. The Borrower has
no knowledge of any existing, probable or potential violations of any Legal
Requirement affecting the Land or present use or occupancy of the Improvements.

         4.7 Ownership of Property; Liens. The Borrower has good record and
marketable title in fee simple to, or a valid leasehold interest in, the
Property, and good title to, or a valid leasehold interest in, all its other
property, and none of such property is subject to any Lien, other than a
Permitted Exception.

         4.8 No Default. The Borrower is not in default under or with respect to
any Contractual Obligation in any respect which could be materially adverse to
the business, operations, property or financial or other condition of the
Borrower, or which could materially adversely affect the ability of the Borrower
to perform its obligations under the Project Loan Documents.

         4.9 Taxes. The Borrower has filed or caused to be filed all tax returns
that are required to be filed, and has paid all taxes shown to be due and
payable on such returns or on any assessments made against the Borrower or the
Property and all other taxes, fees or other charges imposed on the Borrower or
the Property by any Governmental Authority (other than those taxes, the amount
or validity of which is being contested in good faith by appropriate proceedings
diligently prosecuted and with respect to which prior notice has been given to
the Lender and reserves satisfactory to the Lender have been provided or a bond
satisfactory to the Lender has



                                       15

<PAGE>

been posted); and no tax Liens have been filed and no claims are being asserted
with respect to any such taxes, fees or other charges. The tax identification
number of Borrower is 38-3341707.

         4.10 Availability of Utilities. All utility services and facilities
necessary for the operation of the Improvements for their intended use without
impediment or delay (including, without limitation, gas, electrical, water and
sewage services and facilities) are available at the boundaries of the Land.

         4.11 Permits, Etc. All Permits for the Improvements required to the
date that this representation is being made have been obtained and are in full
force and effect.

         4.12 Financial Statements. Any and all financial statements delivered
to the Lender by or on behalf of the Borrower are true and correct in all
material respects and fairly present the financial conditions of their subjects
as of their respective dates, no material adverse change has occurred in the
financial conditions reflected since their respective dates and no additional
Indebtedness has been incurred by their subjects since the respective dates of
the latest statements, other than the borrowings contemplated by this Agreement
or other Indebtedness which has been approved by the Lender in writing. No such
financial statement or any certificate or statement furnished to the Lender by
or on behalf of the Borrower in connection with the transactions contemplated by
this Agreement, and no representation or warranty in this Agreement, contains
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements contained in such financial
statements, certificates or other statements or this Agreement not misleading.
The Borrower is not a debtor under any state or federal bankruptcy or insolvency
proceeding. The Borrower is not contemplating either the filing of a petition by
it under any state or federal bankruptcy or insolvency laws or the liquidation
of all or a major portion of Borrower's assets or property, and Borrower has no
knowledge of any Person contemplating the filing of any such petition against
it. The Borrower's assets do not and, immediately following the incurrence of
the Project Loan, will not constitute unreasonably small capital to carry out
its business as conducted or as proposed to be conducted. Borrower does not
intend to, and does not believe that it will, include the Project Loan and its
liabilities beyond its abilities to pay such Project Loan as it matures (taking
into account the timing and amounts of cash scheduled to be received by Borrower
pursuant to the Lease).

         4.13 Federal Regulations. No part of the proceeds of the Project Loan
will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation T, U or V of
the Board of Governors of the Federal Reserve System as now and from time to
time hereafter in effect. If requested by the Lender, the Borrower will furnish
to the Lender a statement to the foregoing effect in conformity with the
requirements of FR Form U-1 referred to in said Regulation U.

         4.14 Investment Company Act; Other Regulations. The Borrower is not an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. The
Borrower is not subject to



                                       16

<PAGE>

regulation under any Federal or State statute or regulation (other than
Regulation X of the Board of Governors of the Federal Reserve System) which
limits its ability to incur Indebtedness.

         4.15 Environmental Matters. To the best of Borrower's knowledge and
except as set forth in the Phase I Environmental Site Assessment of Borders
Books, 5612 Castleton Corner Lane, Indianapolis, Indiana 46250 dated November
14, 2002 prepared by EMG:

                  (a) The Property does not contain any Regulated Substances in
amounts or concentrations which (i) constitute or constituted a violation of, or
(ii) could give rise to liability under, any Environmental Law.

                  (b) The Property and all operations at the Property are in
compliance with all applicable Environmental Laws, and there is no contamination
at, under or about the Property or violation of any Environmental Law with
respect to the Property.

                  (c) The Borrower has not received any notice of violation,
alleged violation, non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with regard to the
Property and the Borrower does not have knowledge or reason to believe that any
such notice will be received or is being threatened.

                  (d) Regulated Substances have not been transported or disposed
of from the Property in violation of, or in a manner or to a location which
could reasonably be expected to give rise to liability under, any Environmental
Law, nor have any Regulated Substances been generated, treated, stored or
disposed of at, on or under the Property in violation of, or in a manner that
could reasonably be expected to give rise to liability under, any applicable
Environmental Law.

                  (e) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower is or will be named as a party with
respect to the Property nor are there any consent decrees or other decrees,
consent orders, administrative orders or other orders, or other administrative
or judicial requirements outstanding under any Environmental Law with respect to
the Property.

                  (f) There has been no release or threat of release of
Regulated Substances at or from the Property, or arising from or related to the
operations of the Borrower in connection with the Property, in violation of or
in amounts or in a manner that could give rise to liability under any
Environmental Laws.

         4.16 Regulation H. The Mortgage does not encumber improved real
property which is located in an area that has been identified by the Secretary
of Housing and Urban Development as an area having special flood hazards and in
which flood insurance has been made available under the National Flood Insurance
Act of 1968.



                                       17

<PAGE>

         4.17     No Other Assets, Indebtedness.

                  (a) Borrower does not own and will not own any asset or
property other than the Property and incidental property necessary for the
ownership or operation of the Property.

                  (b) Borrower has not made and will not make any loans or
advances to any third party (including any affiliate or constituent party, any
Beneficial Owner or any affiliate of any constituent party of Beneficial Owner),
and shall not acquire obligations or securities of its affiliates.

                  (c) Borrower is and will remain solvent and Borrower will pay
its debts and liabilities (including, as applicable, shared personnel and
overhead expenses) from its assets as the same shall become due.

         4.18     ERISA.

                  (a) The Borrower represents and warrants that the Borrower is
not a "foreign person" within the meaning of Section 1445(f)(3) of the Internal
Revenue Code of 1986, as amended (the "Code"), and the related Treasury
Department regulations, including temporary regulations.

                  (b) The Borrower represents and warrants that, as of the date
of this Agreement and throughout the term of the Project Loan, (i) the Borrower
is not an "employee benefit plan" as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), which is subject
to Title I of ERISA, and (ii) the assets of the Borrower do not constitute "plan
assets" of one or more such plans within the meaning of 29 CFR Section
2510.3-101.

                  (c) The Borrower represents and warrants to the Lender that,
as of the date of this Agreement and throughout the term of the Project Loan (i)
the Borrower is not and will not be a "governmental plan" within the meaning of
Section 3(32) of ERISA, and (ii) transactions by or with the Borrower or any
Affiliates of the Borrower are not subject to state statutes regulating
investments of and fiduciary obligations with respect to governmental plans.

                  (d) The Borrower covenants and agrees to deliver to the Lender
such certifications or other evidence from time to time throughout the term of
the Project Loan, as reasonably requested by the Lender in its sole discretion,
that (i) the Borrower is not an "employee benefit plan" or a "governmental
plan"; (ii) the Borrower is not subject to state statutes regulating investments
and fiduciary obligations with respect to governmental plans; and (iii) one or
more of the following circumstances is true:

                           (1) Equity interests in the Borrower are publicly
                  offered  securities,  within the meaning of 29
                  CFR ss. 2510.3-101(b)(2);

                           (2) Less than 25 percent of all equity interests in
                  the Borrower are held by "benefit plan investors" within the
                  meaning of 29 CFR ss. 2510.3-101(f)(2); or



                                       18

<PAGE>

                           (3) the Borrower qualifies as an "operating company"
                  or a "real estate operating company" within the meaning of 29
                  CFR ss. 2510.3.101(c) or (e) or an investment company
                  registered under the Investment Company Act of 1940.

                  (e) The execution and delivery of this Agreement and the
issuance of the Project Loan Note hereunder will not involve any transaction
that is subject to the prohibitions of section 406 of ERISA or in connection
with which a tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of the
Code.

         The Borrower shall indemnify the Lender and defend and hold the Lender
and any and all of its successors and assigns hereunder harmless from and
against all civil penalties, excise taxes, or other loss, cost, damage and
expense (including, without limitation, reasonable attorneys' fees and
disbursements and costs incurred in the investigation, defense and settlement of
claims and losses incurred in correcting any prohibited transaction or in the
transfer of a prohibited loan, and in obtaining any individual prohibited
transaction exemption under ERISA that may be required, in the Lender's sole
discretion) that the Lender and any and all of its successors and assigns
hereunder may incur, directly or indirectly, as a result of a default under this
Section 4.18. This indemnity shall survive any termination, satisfaction or
foreclosure of this Agreement or the Mortgage. Nothing herein contained,
however, shall be deemed to impose personal liability on the Borrower or the
other Exculpated Persons for repayment of the Project Loan.

                        SECTION 5. AFFIRMATIVE COVENANTS

         The Borrower agrees, unless otherwise consented to in writing by the
Lender, that, so long as the Project Loan Note remains outstanding and unpaid,
the Borrower shall:

         5.1 Certain Notices. Give notice to the Lender promptly upon the
occurrence of:

                  (a) the receipt by the Borrower of any notice given to the
Borrower that a default by the Borrower has occurred under the Lease;

                  (b) the giving by the Borrower of any notice alleging that a
default has occurred under the Lease;

                  (c) any Default or Event of Default;

                  (d) any (i) default or event of default under any Contractual
Obligation of the Borrower or (ii) litigation, investigation or proceeding which
may exist at any time between the Borrower and any Governmental Authority; and

                  (e) any litigation or proceeding affecting the Borrower in
which the amount involved is $100,000 or more and not covered by insurance or in
which injunctive or similar relief is sought.



                                       19

<PAGE>

         Each notice pursuant to this subsection shall be accompanied by a
statement of a Responsible Officer setting forth details of the occurrence
referred to in such notice and stating what action the Borrower proposes to take
with respect to such occurrence.

         5.2 Indemnification. Indemnify the Lender against any claims for
brokerage fees or commissions asserted in connection with the Project Loan and
to pay all expenses incurred by the Lender in connection with the defense of any
action or proceeding brought to collect any such brokerage fees or commissions.

         5.3 Expenses. (a) Pay or reimburse the Lender for all expenses incurred
by the Lender before and after the date of this Agreement with respect to any
and all transactions contemplated by this Agreement including, without
limitation, the preparation of any document reasonably required by the Lender
and the enforcement of any of the Lender's rights under this Agreement and the
other Project Loan Documents, the closing and annual fees of Lender and the
closing and annual fees and expenses payable to the Collateral Trustee, each in
amounts as agreed to by Lessee, and all costs and expenses (including reasonable
attorneys' fees of special counsel and, if reasonably required, local or other
counsel) incurred by Lender in connection with any amendments, waivers or
consents under or in respect of this Agreement or the other Project Loan
Documents, including, without limitation (a) the costs and expenses incurred in
enforcing or defending (or determining whether or how to enforce or defend) any
rights under this Agreement or the other Project Loan Documents or in responding
to any subpoena or other legal process or informal investigative demand issued
in connection with this Agreement or the other Project Loan Documents, and (b)
the costs and expenses, including financial advisors' fees, incurred in
connection with the insolvency or bankruptcy of the Borrower or in connection
with any work-out or restructuring of the transactions contemplated hereby and
by the other Project Loan Documents.

                  (b) If any action or proceeding is commenced by the Lender,
including, without limitation, any action to foreclose the lien of the Mortgage
or to collect the Project Loan or to which the Lender is made a party, or in
which it becomes necessary to defend or uphold the lien of the Mortgage, or in
which the Lender is served with any legal process, discovery notice or subpoena
relating to the Lender's lending to the Borrower, the Borrower will reimburse
the Lender for all expenses which have been or may be incurred by the Lender
arising from or in connection with such action or proceeding.

         5.4 Single Purpose Entity; Separateness.

                  (a) Borrower will not engage in any business other than the
ownership, management, leasing and operation of the Property and Borrower will
conduct and operate its business as presently conducted and operated.

                  (b) Borrower will not enter into any contract or agreement
with any affiliate of Borrower, any constituent party of Borrower, the holder of
any partnership or membership interest, any manager or the owner of any
beneficial interest in Borrower (each, a "Beneficial Owner") or any affiliate of
any constituent party or Beneficial Owner, except upon terms and




                                       20

<PAGE>

conditions that are intrinsically fair and substantially similar to those that
would be available on an arms-length basis with third parties other than any
such party.

                  (c) Borrower has done or caused to be done and will do all
things necessary to observe organizational formalities and preserve its
existence including, without limitation, the holding of such annual and other
meetings as are required by the Borrower's organizational documents, and
Borrower will not, nor will Borrower permit any constituent party or Beneficial
Owner to amend, modify or otherwise change the partnership certificate,
partnership agreement, articles of incorporation and bylaws, trust certificate
and agreement or other organizational documents of Borrower or such constituent
party or Beneficial Owner, if such amendments would violate any provision of the
Project Loan Documents, without the prior written consent of Lender, which
consent shall not be unreasonably withheld, nor will Borrower permit any
constituent party or Beneficial Owner to amend, modify or otherwise change the
partnership certificate, partnership agreement, articles of incorporation and
bylaws, trust certificate and agreement or other organizational documents of
such constituent party or Beneficial Owner, if such amendment, modification or
change (i) would adversely affect the bankruptcy remote nature of Borrower; or
(ii) would cause any of the assumptions upon which the Non-Consolidation Opinion
is based to become inaccurate or untrue in any respect; or (iii) would adversely
affect Lender's interest in the Project Loan. The Borrower shall deliver copies
of minutes of annual meetings of the Borrower to the Lender within thirty (30)
days of its receipt of written request therefor.

                  (d) Borrower will maintain books, records, financial
statements and bank accounts separate from those of its affiliates and any
constituent party and Borrower will file its own tax returns where required by
applicable code or regulation. Borrower shall maintain its books, records,
resolutions and agreements as official records. However, the Borrower does not
and is not required to maintain its books in accordance with GAAP.

                  (e) Borrower will be, and at all times will hold itself out to
the public as, a legal entity separate and distinct from any other entity
(including any Affiliate of Borrower, any constituent party of Borrower, any
Beneficial Owner or any Affiliate of any constituent party), and shall conduct
business in its own name and shall maintain and utilize separate stationery,
invoices and checks. Borrower shall correct any known or unknown
misunderstanding regarding its status as a separate entity and shall not
identify itself as a division or part of its Affiliates or any of its Affiliates
as a division or part of Borrower.

                  (f) Borrower will maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size and character and
in light of its contemplated business operations.

                  (g) Neither Borrower nor any constituent party will seek or
effect the liquidation, dissolution, winding up, consolidation or merger, in
whole or in part, of Borrower or the sale of all or substantially all of
Borrower's or any constituent party's assets.



                                       21

<PAGE>

                  (h) Borrower will not commingle the funds and other assets of
Borrower with those of any affiliate or constituent party, any Beneficial Owner,
or any affiliate of any constituent party or Beneficial Owner, or any other
Person.

                  (i) Borrower has and will maintain its assets in such a manner
that it will not be costly or difficult to segregate, ascertain or identify its
individual assets from those of any affiliate or constituent party, any
Beneficial Owner, or any affiliate of any constituent party or Beneficial Owner,
or any other Person.

                  (j) Borrower does not and will not hold itself out to be
responsible for the debts or obligations of any other Person.

                  (k) If Borrower is a (i) limited liability company,
partnership or business trust, at least one manager, managing partner, general
partner or trustee (the "SPC Member") of Borrower shall itself be a limited
liability company or corporation the sole asset of which is its interest in
Borrower and which at all times has as one of its members or directors an
individual who qualifies as an Independent Director, or (ii) corporation, at
least one of its directors shall be an individual who qualifies as an
Independent Director and who is a shareholder of such corporation, and the SPC
Member (in any case described in clause (i)), or the Independent Director (in
any case described in clause (ii)), will at all times comply with each of the
representations, warranties, and covenants contained in this Section 5.4 as if
such representation, warranty or covenant were made, mutatis mutandis, directly
by such SPC Member or Independent Director. In any case described in clause (i),
the SPC Member and the Beneficial Owner, and in any case described in clause
(ii), the Independent Director and the Beneficial Owner, shall cause the
Borrower at all times to comply with each of the representations, warranties,
and covenants contained in this Section 5.4.

                  (l) Borrower shall not cause or permit the board of directors
of Borrower or the SPC Member, as applicable, to take any action which, under
the terms of any certificate of incorporation, by-laws, operating agreement or
any voting trust agreement with respect to any common stock, requires the
unanimous vote of the board of directors of Borrower or the general partners or
members of Borrower or the SPC Member, as applicable, unless at the time of such
action there shall be at least one member of the board of directors of Borrower
or the SPC Member, as applicable, who is an Independent Director.

                  (m) The Borrower has not incurred and will not incur any
indebtedness, secured or unsecured, direct or indirect, absolute or contingent
(including guaranteeing any obligation), other than (i) the Project Loan or (ii)
unsecured trade debt customarily payable within thirty (30) days;

                  (n) The Borrower shall conduct its business so that the
assumptions made with respect to the Borrower, in that certain opinion letter
(the "Non-Consolidation Opinion") dated of even date herewith delivered by
Dickinson Wright PLLC in connection with this Agreement are and shall remain
true and correct in all respects for the term of the Project Loan Note.


                                       22

<PAGE>
         The Borrower shall deliver a certificate to the Lender within 30 days
upon written request from the Lender but not more frequently than on an annual
basis except for good cause shown, certifying as to its compliance with each of
the provisions of this Section 5.4.

         5.5 Inspection of Property; Discussions. Borrower shall permit
representatives of the Lender to visit and inspect any of its properties and
examine and make abstracts from any of its books and records at any reasonable
time and as often as may reasonably be desired and to discuss the business,
operations, properties and financial and other condition of the Borrower with
officers and employees of the Borrower and with its independent certified public
accountants.

         5.6 Compliance with Project Loan Documents. The Borrower shall at all
times (a) observe and perform all of the covenants, conditions and obligations
required to be performed by it (whether in its capacity as Lessor or otherwise)
under each Project Loan to which it is a party and (b) observe and perform, or
cause to be observed and performed, all of the covenants, conditions and
obligations of the Lessee under the Lease, even in the event that the Lease is
terminated at stated expiration, following a Lease Event of Default or
otherwise.

         5.7 Further Assurances. At any time and from time to time, upon the
written request of the Lender, and at the sole expense of the Borrower, the
Borrower will promptly and duly execute and deliver such further instruments and
documents and take such further action as the Lender may reasonably request for
the purpose of obtaining or preserving the full benefits of this Agreement and
the other Project Loan Documents and of the rights and powers herein or therein
granted.

         5.8 Books and Records; Financial Statements. (a) The Borrower shall
keep adequate books and records of account and furnish to Lender: (i) copies of
all tax returns filed by the Borrower within twenty (20) days after the filing
thereof and (ii) such additional information regarding the Borrower and the
Property as may be reasonably requested by Lender.


                          SECTION 6. NEGATIVE COVENANTS

         The Borrower agrees that, so long as the Project Loan Note remains
outstanding and unpaid, the Borrower shall not:

         6.1 Limitation on Liens. Create, incur, assume or suffer to exist any
Lien upon the Property except for:

                  (a) Liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings, provided that adequate reserves with
respect thereto are maintained on the books of the Borrower in conformity with
GAAP;



                                       23
<PAGE>
                  (b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business which
are not overdue for a period of more than sixty (60) days or which are being
contested in good faith by appropriate proceedings;

                  (c) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case detract
from the value of the Property or interfere with the ordinary conduct of the
business of the Borrower;

                  (d) Liens created pursuant to the Project Loan Documents; and

                  (e) Permitted Exceptions.

         6.2 Limitation on Contingent Obligations. Create, incur, assume or
suffer to exist any Contingent Obligations.

         6.3 Discharge of Liens. Create or permit to exist at any time, and
will, at its own expense, promptly take such action as may be necessary duly to
discharge, or cause to be discharged, all Lessor Liens attributable to it,
provided, that the Borrower shall not be required to discharge any Lessor Lien
while the same is being contested in good faith by appropriate proceedings
diligently prosecuted so long as such proceedings shall not involve any material
danger of impairment of any of the Liens contemplated by the Security Documents
or of the sale, forfeiture or loss of, and shall not materially interfere with
the disposition of, the Property or title thereto or any interest therein or the
payment of Rent.

         6.4 Transfer or Encumbrance of the Property. (a) Except as otherwise
provided in Sections 6.4(b) and (c) hereof, so long as the Project Loan is
outstanding the Borrower shall not, without the prior written consent of the
Lender, which consent may be withheld by Lender in its sole discretion, transfer
the Property or any part thereof or any interest therein, or permit the Property
or any part thereof or any interest therein to be transferred.

                  (b) The Borrower and the Lender agree that a Beneficial Owner
may transfer its interest in the Borrower upon the satisfaction of each of the
following terms and conditions:

                           (i) no Event of Default shall have occurred and be
                  continuing under the Project Loan Documents at the time of
                  such transfer;

                           (ii) such transfer is permitted under the documents
                  governing the Borrower and such Beneficial Owner, and such
                  transfer will not cause the Lender, Collateral Trustee or the
                  purchasers under the Participation Agreement to consolidate
                  the assets, liabilities and results of the activities of the
                  Borrower with the consolidated financial statements of any of
                  Lender, the Collateral Trustee and/or the purchasers under the
                  Participation Agreement, respectively;

                           (iii) the transferee provides the Lender with such
                  certificates, assumption agreements, documents, showings and
                  legal opinions as may be



                                       24
<PAGE>
                  reasonably requested by the Lender in connection with such
                  transfer, including, without limitation a "bring down" letter
                  updating the Non-Consolidation Opinion provided to the Lender
                  by the Borrower on the date hereof, all substantially in the
                  same form and content as those showings delivered in
                  connection with the closing of the Project Loan on the Closing
                  Date;

                           (iv) each of the provisions of Section 5.4 hereof are
                  satisfied following such transfer;

                           (v) the Borrower pays the Lender, concurrently with
                  the closing of such transfer, all of the Lender's costs and
                  expenses incurred in connection with such transfer described
                  in Section 6.4(f) hereof; and

                           (vi) the Lessee and the Guarantor have consented to
                  such transfer, provided, however, that Lessee and Guarantor
                  shall be deemed to have consented to such transfer if Borrower
                  and the transferee have complied with the provisions of this
                  Section 6.4(b) to the satisfaction of Lender.

         Notwithstanding the foregoing, however, (1) limited partnership
interests in any limited partnership or in any general partner or in any
Beneficial Owner or in any trustee or manager of the Borrower, or membership
interests in Borrower (other than the transfer of interests in or of the SPC
Member), or any ownership interest, direct or indirect, in any trustee, member
or manager or in any Beneficial Owner of the Borrower shall be freely
transferable without compliance with the terms of this Section 6.4(b) and the
removal and replacement of any trustee or manager of the Borrower may be
accomplished, without compliance with the terms of this Section 6.4(b) and (2)
any involuntary transfer caused by the death of any general partner,
shareholder, joint venturer, member, manager or other Beneficial Owner of
Borrower or any Person holding any interest in the Borrower, any Beneficial
Owner of the Borrower or any trustee or manager of the Borrower, or if the
Borrower is a partnership, any limited partner thereof, shall not require
compliance with the terms of this Section 6.4 so long as the Borrower is
reconstituted, if required, following such death.

                  (c) The Borrower and the Lender agree that the Property may be
transferred to a transferee upon the satisfaction of each of the following terms
and conditions:

                           (i) no Event of Default shall have occurred and be
                  continuing under the Project Loan Documents at the time of
                  such transfer;

                           (ii) the Borrower pays the Lender, concurrently with
                  the closing of such transfer, a non-refundable assumption fee
                  in an amount equal to $7,500.00, together with all of the
                  Lender's costs and expenses incurred in connection with such
                  transfer described in Section 6.4(f) hereof;

                           (iii) the transferee assumes and agrees to pay
                  (subject to the non-recourse provisions of Section 11.8
                  hereof) the indebtedness secured by the Mortgage and to
                  perform all obligations under Project Loan Documents and prior


                                       25
<PAGE>
                  to or concurrently with the closing of such transfer, the
                  transferee executes, without any cost or expense to the
                  Lender, such documents and agreements as the Lender shall
                  reasonably require to evidence and effectuate said assumption
                  and delivers such legal opinions as the Lender may reasonably
                  require;

                           (iv) the transferor and the transferee execute,
                  without any cost or expense to the Lender, new financing
                  statements or financing statement amendments and any
                  additional documents reasonably requested by the Lender;

                           (v) the Lessee and the transferee have executed a
                  Lease assignment and assumption agreement reasonably
                  acceptable to the Lender;

                           (vi) Lessee and Guarantor shall have consented to
                  such transfer, provided, however, that Lessee and Guarantor
                  shall be deemed to have consented to such transfer if Borrower
                  and the transferee have complied with the condition of this
                  Section 6.4(c) to the satisfaction of Lender;

                           (vii) the transferor or the transferee shall cause to
                  be delivered to the Lender, without any cost or expense to the
                  Lender, such endorsements to the Lender's title insurance
                  policy, hazard insurance endorsements or certificates and
                  other similar materials as the Lender may deem necessary at
                  the time of the transfer, all in form and substance reasonably
                  satisfactory to the Lender, including, without limitation, an
                  endorsement or endorsements to the Lender's title insurance
                  policy insuring the lien of the Mortgage, extending the
                  effective date of such policy to the date of execution and
                  delivery (or, if later, of recording) of the assumption
                  agreement referenced above in Section 6.4(c)(iii) with no
                  additional exceptions added to such policy and insuring that
                  fee simple title to the Property is vested in the transferee,
                  or, in lieu thereof, such other documents or evidence as the
                  Lender may reasonably require in order to confirm that such
                  policy is unaffected by the transfer;

                           (viii) such transfer is not construed so as to
                  relieve Lessee or Guarantor of their respective obligations
                  under any guaranty or indemnity agreement executed by them in
                  connection with the Project Loan and Lessee and Guarantor
                  execute, without any cost or expense to the Lender, such
                  documents and agreements as the Lender shall reasonably
                  require to evidence and effectuate the ratification of each
                  such guaranty and indemnity;

                           (ix) the Lender shall have received such legal
                  opinions as may be reasonably requested by the Lender in
                  connection with such transfer in substantially the same form
                  and content as those opinions delivered in connection with the
                  closing of the Project Loan on the Closing Date, including,
                  but not limited to, a substantive non-consolidation bankruptcy
                  opinion in the same form as the Non-Consolidation Opinion;

                                       26
<PAGE>
                           (x) such transfer is not construed so as to relieve
                  any current guarantor or indemnitor of its obligations under
                  any guaranty or indemnity agreement executed in connection
                  with the Project Loan secured by the Project Loan Documents
                  and each such current guarantor and indemnitor executes,
                  without any cost or expense to the Lender, such documents and
                  agreements as the Lender shall reasonably require to evidence
                  and effectuate the ratification of each such guaranty and
                  indemnity agreement, provided that if the transferee or a
                  party associated with the transferee approved by the Lender in
                  its sole discretion assumes the obligations of the current
                  guarantor or indemnitor under its guaranty or indemnity
                  agreement and the transferee or such party associated with the
                  transferee, as applicable, executes, without any cost or
                  expense to the Lender, a new guaranty or indemnity agreement
                  in form and substance reasonably satisfactory to the Lender,
                  then the Lender shall execute and deliver to transferor,
                  concurrently with such transaction, a release of the current
                  guarantor or indemnitor from all obligations arising under its
                  guaranty or indemnity agreement from and after the closing of
                  such transfer; and

                           (xi) the transferor executes and delivers to Lender,
                  without any cost or expense to Lender, a release of Lender,
                  its officers, directors, employees and agents, from all claims
                  and liability relating to the transactions evidenced by the
                  Project Loan Documents through and including the date of the
                  transfer, which agreement shall be in form and substance
                  satisfactory to Lender and binding upon the transferee.

         Upon compliance with each of the terms and conditions described above,
the Lender shall release the transferor from and after the date of such transfer
of its obligations as Borrower and shall deliver a certificate of compliance and
release; provided that in no event shall any such transfer waive or release such
transferor for any liability on account of any breach of any representation,
warranty, covenant or obligation with respect to the transferor set forth in the
Project Loan Documents or for any fraudulent or willful misconduct of the
transferor.

                  (d) The Lender shall not be required to demonstrate any actual
impairment of its security or any increased risk of default hereunder in order
to declare the Project Loan immediately due and payable upon any transfer of the
Property without the Lender's consent as set forth herein. This provision shall
apply to every transfer of the Property in violation of this Section 6.4
regardless of whether voluntary or not.

                  (e) The Lender's consent to a transfer of an interest of a
Beneficial Owner or the Property shall not be deemed to be a waiver of the
Lender's right to require such consent to any future transfer of an interest of
a Beneficial Owner or the Property. Any transfer of an interest of a Beneficial
Owner or the Property made in contravention of this Section 6.4 shall be null
and void and of no force and effect.

                  (f) The Borrower agrees to bear and shall pay or reimburse the
Lender on demand for all reasonable expenses (including, without limitation,
reasonable attorneys' fees and disbursements, title search costs and title
insurance endorsement premiums) incurred by the



                                       27
<PAGE>
Lender in connection with the review, approval and documentation of each
transfer of the Property or ownership interest in the Borrower.


                   SECTION 7. CONDITIONS PRECEDENT TO FUNDING

         The Lender shall not be obligated to fund the Project Loan until all of
the conditions set forth in this Section 7 and in the Participation Agreement
shall have been satisfied.

         7.1 Closing Documents. The Lender shall have received all the items set
forth in this subsection, in each case in form and substance satisfactory to the
Lender.

                  (a) Taxes. Evidence that all past and current (if then due and
payable) taxes and assessments applicable to the Property or payable by the
Borrower have been paid.

                  (b) Title Insurance Policy. A mortgagee's policy of title
insurance or satisfactory evidence of the Title Company's unconditional
obligation to issue such a policy, dated as the date of the recording of the
Mortgage. Such policy shall (i) be in the amount of the Project Loan (or the
maximum amount that the title insurance company is permitted by law to insure,
whichever is lower); (ii) insure the Lender that the Mortgage creates a valid
first Lien on the Property, free and clear of all defects and encumbrances,
except for the Permitted Exceptions; (iii) provide full coverage against
mechanics' liens and against survey exceptions not specified as Permitted
Exceptions; and (iv) contain such other endorsements and affirmative coverage as
the Lender may reasonably request. The Lender shall be furnished with copies of
all documents that appear as exceptions in such policy or commitment.

                  (c) Survey. A survey of the Land, certified to the Lender, the
Collateral Trustee and the Title Company by an independent professional licensed
land surveyor satisfactory to the Lender, which survey shall be made in
accordance with the Minimum Standard Detail Requirements for Land Title Surveys
jointly established and adopted by the American Land Title Association and the
American Congress on Surveying and Mapping in 1999. Without limiting the
generality of the foregoing, there shall be surveyed and shown on such survey
the following: (i) the locations of all buildings and other structures, if any,
on the Land and the established building setback lines; (ii) the lines and the
width of streets abutting the Land; (iii) all access and other easements
appurtenant to or necessary or desirable to the use of the Land; (iv) all
roadways, paths, driveways, easements, encroachments and overhanging projections
and similar encumbrances affecting the Land, whether recorded, apparent from a
physical inspection of the Land or otherwise known to the surveyor; (v) any
party walls with structures on adjoining property and encroachments on any
adjoining property by the building structures and improvements on the Land; and
(vi) if the Land is described by reference to a filed map, a legend relating the
survey to such map.

                  (d) Borrower's Certificate. The Borrower's Certificate.

                                       28
<PAGE>
                  (e) Hazard Insurance. Policies or certificates of insurance
required by the Lease, accompanied by evidence of the payment of the premiums
for such policies, with mortgagee loss payable endorsements naming the
Collateral Trustee as sole loss payee.

                  (f) Flood Insurance. If requested by the Lender, a policy of
flood insurance in an amount equal to the lesser of (i) the maximum limit of
coverage available under the National Flood Insurance Act of 1968, as amended,
and (ii) the amount of the Project Loan.

                  (g) Permits. All Permits issued prior to the Closing Date.

                  (h) Soil and Geological Report. If requested by the Lender, a
soil and geological report, including a summary of soil test borings issued by a
professional engineer satisfactory to the Lender.

                  (i) Opinions of Counsel. An opinion of counsel for the
Borrower and Lessee in form and substance satisfactory to the Lender, and a
non-consolidation opinion with respect to the Borrower, in form and substance
satisfactory to Lender ("Non-Consolidation Opinion").

                  (j) Project Loan Documents. Duly executed copies of all
Project Loan Documents and the original counterpart No. 1 of the Lease.

                  (k) Organizational Documentation. If the Borrower, is a
limited partnership, limited liability partnership or a limited liability
company, with respect to such entity:

                           (1) the partnership agreement or limited liability
                  company agreement, including all amendments and attachments,
                  certified by a general partner or member;

                           (2) the partnership certificate or certificate of
                  formation, including all amendments, certified by an official
                  in whose office it is filed or recorded, together with a
                  certificate of good standing from such office and from the
                  state in which the Property is located, if applicable;

                           (3) any certificates filed or recorded or required to
                  be filed or recorded by such partnership or limited liability
                  company in the state of its formation and the state where the
                  Land is located in order for it to do business in those
                  states;

                           (4) any consents by other partners or members
                  required for the borrowing contemplated by this Agreement and
                  the execution, delivery and performance of the Project Loan
                  Documents and appropriate resolutions and certificates
                  authorizing the execution, delivery and performance by
                  Borrower of its obligations hereunder and designating those
                  individuals authorized to enter into this Agreement and the
                  other Operative Agreements; and



                                       29
<PAGE>
                           (5) if requested by the Lender, an acknowledgment by
                  each of the partners or members of his or its continued
                  membership in the Borrower.

         7.2 Additional Matters. All other documents and legal matters in
connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to the Lender and its counsel.

         7.3 Environmental Audit. The Lender shall have received an
environmental audit performed by an environmental engineering firm acceptable to
Lender, in form and substance acceptable to the Lender.

         7.4 Trustee Fees. All closing fees and expenses of Lender and of the
Collateral Trustee, including reasonable attorneys' fees of counsel to such
parties, and the annual administrative fee for the Lender and the Collateral
Trustee for the first year of the Project Loan shall be paid on or before the
Closing Date.


                        SECTION 8. INTENTIONALLY DELETED


             SECTION 9. MATTERS RELATING TO PAYMENTS AND COLLATERAL

         9.1 The Account. (a) Pursuant to the Collateral Trust Indenture, Lender
will, on the Closing Date, assign all of its right, title and interest in and to
the Project Loan Note, this Agreement and the other Operative Agreements to the
Collateral Trustee, and hereby directs Borrower to pay and direct all payments
of every kind or nature required under this Agreement, and the other Operative
Agreements with the Collateral Trustee, in accordance with written instructions
provided by the Collateral Trustee. The Lender shall cause the Collateral
Trustee to establish one or more accounts (the "Account(s)") into which all
payments, receipts and other consideration of any kind whatsoever received
pursuant to the Project Loan Note and the other Operative Agreements shall be
deposited.

                  (b) Except as otherwise provided in Section 9.2, payments
deposited from time to time in the Account(s) shall be paid out as follows:

                           (i) An amount equal to Project Loan Debt Service due
                  and owing on the next Scheduled Payment Date as set forth on
                  Schedule I to the Project Loan Note shall be paid out of the
                  Account by the Collateral Trustee on the date received, and
                  shall be applied to the payment of principal and interest then
                  due and payable on the Project Loan until such amounts are
                  paid in full.

                           (ii) An amount equal to any such payment identified
                  by the Lessee as a payment in respect of the Termination Value
                  pursuant to Section 17.1 or Article XXXV of the Lease shall be
                  paid out of the Account by the Collateral Trustee promptly
                  after receipt, and shall be applied on the date deposited in
                  the Account,




                                       30
<PAGE>
                  first, to the payment of the outstanding of principal of ,
                  accrued interest and premium, if any, and all other amounts
                  due and payable on the Project Loan or the Project Loan
                  Documents to Lender until such amounts are paid in full, and
                  second, the remainder, if any, shall be paid to such Person or
                  Persons as the Borrower may designate.

                           (iii) An amount equal to any such payments identified
                  by the Lessee as Supplemental Rent shall be paid out of the
                  Account by the Lender promptly after receipt, and shall be
                  applied on the date deposited in the Account to the payment of
                  any amounts then owing to the parties entitled to receipt of
                  such Supplemental Rent.

If the Lender or the Collateral Trustee receives any payment in lieu of Project
Loan Debt Service in any case or proceeding arising under the Bankruptcy Code,
then such payment shall be deemed to be a payment on account of Project Loan
Debt Service for the purpose of this Section 9.1. In the event that the Lessee
shall fail to identify the nature of any payment deposited by it in the Account,
or the Collateral Trustee in its reasonable judgment shall determine that the
identification made by the Lessee is incorrect or inappropriate, the nature of
such payment shall instead be identified by the Lender in its reasonable
judgment and applied in the manner specified above.

                  (c) Upon payment in full of the Project Loan and all other
amounts owing by the Borrower hereunder or under any other Project Loan
Document, any moneys remaining in the Account shall be paid to the Borrower or
such other Person or Persons as the Borrower may designate.

         9.2 Proceeds of Collateral; Proceeds Remaining in Account. (a) All
moneys collected by the Collateral Trustee upon any sale or other disposition of
the Property (including all moneys realized from the exercise of remedies under
the Mortgage), together with all other moneys received by the Collateral Trustee
in connection therewith (except as otherwise specified in Section 9.1) and (b)
all moneys contained in the Account after an Event of Default or on the Maturity
Date (if the Project Loan has not then been repaid in full), or deposited in the
Account thereafter (except as otherwise specified in Section 9.1(c)), shall be
applied as follows:

                  First, to the payment of (x) any and all sums advanced by the
         Collateral Trustee in order to preserve the Collateral or preserve its
         security interest therein and (y) the expenses of retaking, holding,
         preparing for sale or lease, selling or otherwise disposing or
         realizing on the Collateral, or of any exercise by the Collateral
         Trustee of its rights under the Project Loan Documents, together with
         attorneys' fees and court costs;

                  Second, to the payment of the amounts then due and unpaid for
         principal of, interest on, premium, if any, and any other amounts then
         due and unpaid in respect of the Project Loan or under any other
         Project Loan Documents;



                                       31
<PAGE>
                  Third, to the extent moneys remain after application pursuant
         to clauses First through Second above, to the Borrower or to whomever
         may be lawfully entitled to receive such surplus.

         9.3 Certain Remedial Matters. Notwithstanding any other provision of
this Agreement or any other Project Loan Document, except following the
occurrence and during the continuance of an Event of Default, the Borrower shall
at all times retain the right, but not to the exclusion of the Lender or the
Collateral Trustee, (A) to receive from the Lessee all notices, certificates and
other documents and all information that the Lessee is permitted or required to
give or furnish to the "Borrower" or the "Lessor" pursuant to the Lease, the
Participation Agreement or any other Operative Agreement, (B) to inspect the
Property, (C) to retain all rights with respect to insurance that Article XVI of
the Lease specifically confers upon the "Lessor", in its individual capacity,
(D) subject to the provisions of the Security Documents, to institute
proceedings for specific performance by the Lessee with the provisions of the
Lease, and (E) subject to the other applicable provisions of this Agreement, to
perform for the Lessee under Article XIX of the Lease.

         9.4 Release of the Property, etc. (a) If the Lessee shall at any time
purchase the Property pursuant to Section 17.2 of the Lease, then, upon
satisfaction by the Borrower of its obligation to prepay the Project Loan
pursuant to Section 3.2(b) and to pay accrued interest and Prepayment Premium,
if any, on the Project Loan so prepaid pursuant to Section 3.2, the Property
shall be released from the Liens created by the Security Documents, all without
delivery of any instrument or performance of any act by any party. In addition,
upon payment in full of the Project Loan and all other amounts owing by the
Borrower hereunder or under any other Project Loan Document by the Borrower, the
Property shall be released from the Liens created by the Security Documents, all
without delivery of any instrument or performance of any act by any party. Upon
request of the Borrower following any such release, the Lender shall, at the
sole cost and expense of the Borrower, execute and deliver to the Borrower or
the Lessee such documents as the Borrower shall reasonably request to evidence
such release.

                  (b) Notwithstanding anything to the contrary herein, upon the
payment in full of (i) the Project Loan and all other amounts owing by the
Borrower hereunder or under any other Project Loan Document and (ii) all amounts
owing by the Lessee to any other Person under the Operative Agreements, all
remaining moneys in the Account shall be paid out to the Borrower.


                          SECTION 10. EVENTS OF DEFAULT

         10.1 Events of Default. The occurrence of any of the events set forth
in this subsection shall constitute an "Event of Default":

                  (a) The Borrower shall fail to make any Scheduled Payment
pursuant to the Project Loan Note, which failure continues unremedied for a
period of three (3) Business Days; or



                                       32
<PAGE>
                  (b) Any transfer of the interest of a Beneficial Owner or any
transfer of all or any part of the Property in violation of Section 6.4 hereof;
or

                  (c) The Borrower shall fail to comply with the provisions of
Section 5.4 hereof and such failure shall continue unremedied for a period of
thirty (30 ) days; or

                  (d) The Borrower shall fail to comply with the provisions of
Sections 6.1, 6.2 or 6.3 hereof or shall fail to provide (or cause the Lessee to
provide) the insurance required under the Lease; or

                  (e) Any representation or warranty made or deemed made by the
Borrower herein, in the Mortgage or in any other Project Loan Document or which
is contained in any certificate, document or financial or other statement
furnished by it at any time under or in connection with this Agreement or any
other Project Loan Document shall prove to have been incorrect in any material
respect on or as of the date made or deemed made; or

                  (f) The Borrower shall default in the observance or
performance of any other agreement contained in this Agreement, the Mortgage or
any other Project Loan Document and such failure shall continue unremedied for a
period of sixty (60) days after either actual knowledge thereof by the Borrower
or written notice thereof has been given to the Borrower by the Lender or the
Collateral Trustee; or

                  (g) (i) The Borrower shall commence any case, proceeding or
other action (A) under any existing or future law of any jurisdiction, domestic
or foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for it or
for all or any substantial part of its assets, or the Borrower shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against the Borrower any case, proceeding or other action of a nature
referred to in clause (i) above which (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of sixty (60) days; or (iii) there shall
be commenced against the Borrower any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets which results in the entry of
an order for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within sixty (60) days from the entry thereof;
or (iv) the Borrower shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii), or (iii) above (without regard to the grace periods contained in said
clauses); or (v) the Borrower shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as they become due; or

                  (h) One or more judgments or decrees shall be entered against
the Borrower involving in the aggregate a liability (not paid or fully covered
by insurance) of $100,000 or




                                       33
<PAGE>
more, and all such judgments or decrees shall not have been vacated, discharged,
stayed or bonded pending appeal within sixty (60) days from the entry thereof;
or

                  (i) (i) Any of the Project Loan Documents shall cease, for any
reason, to be in full force and effect, or the Borrower shall so assert, or (ii)
the Lien created by any of the Security Documents shall cease to be enforceable
and of the same effect and priority purported to be created thereby; or

                  (j) The Lease shall cease, for any reason, to be in full force
and effect or the Lessee shall so assert; or

                  (k) A Lease Event of Default shall have occurred and be
continuing; or

                  (l) A Collateral Trust Event of Default shall have occurred
and be continuing;

then, and in any such event, (A) if such event is an Event of Default specified
in paragraph (g) of this Section, automatically the Project Loan (with accrued
interest thereon and Prepayment Premium) and all other amounts owing under this
Agreement and the other Project Loan Documents shall immediately become due and
payable, whereupon Lender shall be entitled to exercise all remedies provided
for in the Security Documents and pursue such other rights or remedies as may be
available at law or in equity; (B) if such event is an Event of Default
specified in paragraphs (a), (b), (c), (d), (e), (f), (h) or (i) of this
Section, either or both of the following actions may be taken: the Lender may by
notice to the Borrower, declare the Project Loan (with accrued interest thereon)
and all other amounts owing under this Agreement and the other Project Loan
Documents together with the Prepayment Premium, if any, to be due and payable
forthwith, whereupon the same shall immediately become due and payable and
Lender may exercise all remedies provided for in the Security Documents and
pursue such other rights or remedies as may be available at law or in equity,
and (C) if such an event is an Event of Default specified in clauses (j), (k) or
(l) of this Section with respect to which Lender has accelerated the Project
Loan and will exercise its remedies, so long as no other Event of Default has
occurred and is continuing hereunder (other than an Event of Default under
Section 10.1(a) hereof), Borrower may elect to pay to Lender during the
Standstill Period all amounts then due and owing pursuant to the Project Loan
Note and other Project Loan Documents, together with the Prepayment Premium, if
any (collectively the "Default Payment"), in full satisfaction of the
obligations of the Borrower thereunder, and upon the failure of Borrower to make
the Default Payment within the Standstill Period, the Lender may by written
notice to Borrower declare the Project Loan (with accrued interest thereon) and
Prepayment Premium, if any, and all other amounts owing under this Agreement and
the other Project Loan Documents to be due and payable forthwith and the same
shall be immediately due and payable, whereupon Lender shall be entitled to
exercise all remedies provided for in the Security Documents and pursue such
other rights or remedies as may be available at law or in equity. Except as
expressly provided above in this Section, presentment, demand, protest and all
other notices of any kind are hereby expressly waived.

                                       34
<PAGE>
         Upon the occurrence of any Event of Default, the Borrower shall pay
interest on the unpaid principal balance of the Project Loan Note at a rate
equal to the Overdue Rate. The Overdue Rate shall be computed from the
occurrence of the Event of Default until the earlier of the cure of such
default, the waiver of such default by Lender or the actual receipt and
collection of all amounts due under this Agreement and under the Project Loan
Note. This charge shall be added to the Obligations, and shall be deemed secured
by the Mortgage. This clause, however, shall not be construed as an agreement or
privilege to extend the date of the payment of the Obligations, nor as a waiver
of any other right or remedy accruing to the Lender by reason of the occurrence
of any Event of Default. If the Overdue Rate is above the maximum rate permitted
by applicable law, the Overdue Rate shall be the maximum rate permitted by
applicable law.

         10.2 Intentionally Deleted.

         10.3 Intentionally Deleted.

         10.4 Power of Attorney. For the purpose of carrying out the provisions
and exercising the rights, powers and privileges granted in this subsection, the
Borrower hereby irrevocably constitutes and appoints the Lender its true and
lawful attorney-in-fact to execute, acknowledge and deliver any instruments and
do and perform any acts such as are referred to in this subsection in the name
and on behalf of the Borrower. This power of attorney is a power coupled with an
interest and cannot be revoked.


                            SECTION 11. MISCELLANEOUS

         11.1 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand,
when delivered, (b) in the case of delivery by mail, three (3) days after being
deposited in the mails, postage prepaid, or (c) in the case of delivery by
facsimile transmission, when sent and receipt has been confirmed, addressed as
follows, or to such other address as may be hereafter notified by the respective
parties hereto:

         The Borrower:              INDIANAPOLIS STORE NO. 16 L.L.C.
                                    c/o Agree Realty Corp.
                                    31850 Northwestern Highway
                                    Farmington Hills, MI 49334

         The Lender:                Wilmington Trust Company
                                    Rodney Square North
                                    1100 North Market Street
                                    Wilmington, Delaware 19890
                                    Attention: Corporate Trust Department
                                    Fax:  302-651-1576

                                       35
<PAGE>
         The Lessee:                Borders, Inc.
                                    100 Phoenix Drive
                                    Ann Arbor, Michigan 48104
                                    Attention:  Vice President - Development
                                    Fax:  734-477-1285

provided that any notice, request or demand to or upon the Lender shall not be
effective until received.

         11.2 Modifications. Any provision of this Agreement may be changed,
waived or terminated only by an instrument in writing signed by the party
against whom enforcement of the change, waiver or termination is sought.

         11.3 Rights Cumulative. All rights, powers and remedies given to the
Lender under this Agreement are cumulative and not alternative, and are in
addition to all rights, powers and remedies otherwise afforded the Lender (all
rights, powers and remedies of the Lender collectively, the "Lender's Rights");
any forbearance or delay by the Lender in exercising any of the Lender's Rights
shall not be deemed to be a waiver, and the exercise or partial exercise of any
of the Lender's Rights shall not preclude the further exercise of any of the
Lender's Rights which shall continue in full force and effect until specifically
waived by an instrument in writing executed by the Lender. All representations,
warranties and covenants contained in any of the Project Loan Documents shall
survive the making of the advances of the Project Loan.

         11.4 Schedules. The Schedules attached to this Agreement are essential
to and are made a part of this Agreement.

         11.5 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF INDIANA, WITHOUT
REGARD TO PRINCIPLES OF CONFLICT OF LAWS.

         11.6 Waiver of Jury Trial, Submission to Jurisdiction. THE BORROWER
IRREVOCABLY WAIVES TRIAL BY JURY AND ANY OBJECTIONS, INCLUDING WITHOUT
LIMITATION ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, WHICH IT MAY NOW OR IN THE FUTURE HAVE TO THE BRINGING OF ANY
SUCH ACTION OR PROCEEDING IN ANY SUCH JURISDICTION. All judicial actions, suits
or proceedings brought against the Borrower and its property with respect to its
obligations, liabilities or any other matter under or arising out of or in
connection with this Agreement or any other Project Loan Document or for
recognition or enforcement of any judgment rendered in any such proceedings may
be brought in any trial or appellate state or federal court of competent
jurisdiction in the state in which the Property is located. By execution and
delivery of this Agreement, the Borrower accepts, generally and unconditionally,
the non-exclusive jurisdiction of such courts and irrevocably waives, and agrees
not to plead or claim, any objection that it may ever have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient




                                       36
<PAGE>
court. The Borrower irrevocably agrees that all process in any proceeding or any
court arising out of or in connection with this Agreement or any of the other
Project Loan Documents, may be effected by mailing to the Borrower a copy by
registered or certified mail or any substantially similar form of mail, postage
prepaid, to the Borrower at its address set forth in subsection 11.1 or at such
other address of which the Lender shall have been notified in accordance with
the terms of such subsection. Such service shall be effective five (5) days
after such mailing. Such service will be effective and binding service in every
respect. The Borrower shall not assert that such service did not constitute
effective and binding service within the meaning of any applicable state or
federal law, rule, regulation or the like. Nothing in this Agreement shall
affect the right to effect service of process in any other manner permitted by
law or shall limit the right to sue in any other jurisdiction.

         11.7 Captions. The captions in this Agreement are for convenience of
reference only, and in no way limit or amplify the provisions of this Agreement.

         11.8 Obligations Non-Recourse. Anything to the contrary contained in
this Project Loan Agreement, the Project Loan Note or in any other Project Loan
Document notwithstanding, neither the Borrower nor any member or partner of the
Borrower, nor any member, partner, officer, director or shareholder thereof, nor
any of their respective successors or assigns (all such Persons being
hereinafter referred to collectively as the "Exculpated Persons"), shall be
personally liable in any respect for any representation, warranty, liability,
indemnities or obligation hereunder or in any other Project Loan Document
including the payment of the principal of, interest on or Prepayment Premium
with respect to the Project Loan Note, or for monetary damages for the breach of
performance of any of the covenants contained in the Project Loan Agreement, the
Project Loan Note, the Mortgage or any other Project Loan Document. The Lender
agrees that, in the event it pursues any remedies available to it under this
Project Loan Agreement, the Project Loan Note, the Assignment of Lease, the
Mortgage or under any other Project Loan Document, the Lender shall have no
recourse against the Borrower nor any Exculpated Person, for any deficiency,
loss or claim for monetary damages or otherwise resulting therefrom and recourse
shall be had solely and exclusively only against the Property; but nothing
contained herein shall be taken to prevent recourse against or the enforcement
of remedies against the Property in respect of any and all liabilities,
obligations and undertakings contained in the Mortgage, this Project Loan
Agreement, the Project Loan Note, the Assignment of Lease or in any other
Project Loan Document. Notwithstanding the provisions of this paragraph, nothing
in the Mortgage, the Assignment of Lease, this Project Loan Agreement, the
Project Loan Note or any other Project Loan Document shall: (a) constitute a
waiver, release or discharge of any indebtedness or obligation evidenced by the
Project Loan Note or arising under the Mortgage or the Project Loan Agreement or
secured by the Mortgage, but the same shall continue until paid or discharged;
(b) relieve the Borrower from liability and responsibility for the following,
Borrower acknowledging its personal liability therefor in each case (but only to
the extent of the damages arising by reason of ): (i) active waste knowingly
committed by the Borrower with respect to the Property (ii) any fraud or
misrepresentation on the part of the Borrower or any such Exculpated Person;
(iii) any environmental matter affecting the Property which is introduced or
caused by Borrower or a Beneficial Owner; (iv) the failure of Borrower to
maintain its existence as a special purpose, "bankruptcy remote" entity in good
standing, subject to the cure rights set forth




                                       37
<PAGE>
in Section 10.1(c); (v) the failure of Borrower or any Beneficial Owner to
comply with the provisions of Section 6 hereof; (vi) misappropriation or
misapplication by the Borrower (i.e., application in a manner contrary to any of
the Project Loan Documents) of any insurance proceeds or condemnation award paid
or delivered to the Borrower by any Person other than the Lender; or (vii) any
rents or other income received by the Borrower from the Lessee that are not
turned over to the Lender in accordance with the Assignment of Lease; or (c)
affect or in any way limit the Lender's rights and remedies hereunder with
respect to the rights and powers assigned under the Assignment of Lease or to
obtain a judgment against the Borrower (provided that no deficiency judgment or
other money judgment shall be enforced against the Borrower except to the extent
of the Borrower's interest in the Property or to the extent the Borrower may be
liable as otherwise contemplated in clause (b) of this Section).

         11.9 Attorneys' Fees. If the Lender or Collateral Trustee retains the
services of an attorney or any other consultants in order to enforce this
Agreement, or any portion thereof, the Borrower agrees to pay to Lender and/or
Collateral Trustee, as the case may be, all costs and expenses, including,
without limitation, reasonable attorneys' fees, incurred by them as a result
thereof and such costs, fees and expenses shall be included in the indebtedness
secured by the Mortgage.

         11.10 Successive Actions. A separate right of action hereunder shall
arise each time the Lender acquires knowledge of any matter indemnified by the
Borrower under this Agreement. Separate and successive actions may be brought
hereunder to enforce any of the provisions hereof at any time and from time to
time. No action hereunder shall preclude any subsequent action, and the Borrower
hereby waives and covenants not to assert any defense in the nature of splitting
of causes of action or merger of judgments.

         11.11 No Waiver; Time of Essence.. The failure of any party hereto to
enforce any right or remedy hereunder, or to promptly enforce any such right or
remedy, shall not constitute a waiver thereof nor give rise to any estoppel
against such party nor excuse any of the parties hereto from their respective
obligations hereunder. Any waiver of such right or remedy must be in writing and
signed by the party to be bound. This Agreement is subject to enforcement at law
or in equity, including actions for damages or specific performance. Time is of
the essence of this Agreement.

         11.12 Binding Effect; Term; Assignability. This Agreement shall be
binding upon the parties hereto and shall inure to the benefit of the parties
hereto and their respective successors and assigns.

         11.13 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be effective only upon delivery and thereafter
shall be deemed an original, and all of which shall be taken to be one and the
same instrument, for the same effect as if all parties hereto had signed the
same signature page. Any signature page of this Agreement may be detached from
any counterpart of this Agreement without impairing the legal effect of any
signatures thereon and may be attached to another counterpart of this Agreement
identical in form hereto but having attached to it one or more additional
signature pages.

                                       38
<PAGE>
         11.14 Severability. Should any part of this Agreement for any reason be
declared invalid, such decision shall not affect the validity of any remaining
portion, which remaining portion shall remain in full force and effect as if
this Agreement had been executed with the invalid portion thereof eliminated and
it is hereby declared the intention of the parties hereto that they would have
executed the remaining portion of this Agreement without including therein any
such part, parts or portion which may, for any reason, be hereafter declared
invalid.

         11.15 Survival. This Project Loan Agreement shall be deemed to be
continuing in nature and shall remain in full force and effect and the liability
of Borrower under Section 11.8(b) shall survive payment of the indebtedness
secured by the Project Loan Documents and the exercise by Lender of any remedy
under the Mortgage or any of the other Project Loan Documents, including,
without limitation, any foreclosure or deed in lieu thereof, even if, as a part
of such remedy, the Project Loan is paid or satisfied in full.

         IN WITNESS WHEREOF, this Agreement has been duly executed by the Lender
and the Borrower as of the date first written above.

                                  WILMINGTON TRUST COMPANY, not in its
                                  individual capacity, but solely as
                                  Owner Trustee



                                  By:  /s/Donald G. MacKelcan
                                     -----------------------------------------
                                        Name:  Donald G. MacKelcan
                                        Title:  Vice President


                                  INDIANAPOLIS STORE NO. 16 L.L.C.
                                  a Delaware limited liability company

                                  By:   AGREE LIMITED PARTNERSHIP,
                                        a Delaware limited partnership
                                        Its:  Authorized Member

                                        By:  Agree Realty Corporation,
                                             a Maryland corporation
                                             Its:  General Partner


                                             By:  /s/ Richard Agree
                                                ------------------------------
                                                      Richard Agree, President
<PAGE>
                       EXHIBIT A TO PROJECT LOAN AGREEMENT

                          LEGAL DESCRIPTION OF THE LAND

A part of the Northeast Quarter of Section 21, Township 17 North, Range 4 East
in Marion County, Indiana, more particularly described as follows:

Commencing at the Southeast corner of said Quarter Section; thence North 00
degrees 14 minutes 50 seconds West along the East line thereof 527.89 feet;
thence North 46 degrees 08 minutes 14 seconds West 176.94 feet; thence North 00
degrees 56 minutes 10 seconds West 1043.44 feet; thence North 66 degrees 03
minutes 50 seconds East 33.55 feet; thence North 50 degrees 31 minutes 43
seconds West 24.06 feet to a tangent curve concave Southerly having a central
angle of 65 degrees 23 minutes 18 seconds and a radius of 405.00 feet; thence
Westerly along said curve in an arc distance of 462.20 (said arc being subtended
by a chord having a bearing of North 83 degrees 13 minutes 22 seconds West and a
length of 437.53 feet); thence South 64 degrees 04 minutes 59 seconds West 83.29
feet; thence North 25 degrees 55 minutes 01 feet (seconds) West 198.07 feet to a
tangent curve concave Easterly having a central angle of 13 degrees 16 minutes
03 seconds and a radius of 1506.55 feet; thence Northerly along said curve an
arc distance of 348.86 feet (said arc being subtended by a chord having a
bearing of North 19 degrees 16 minutes 59 seconds West and a length of 348.08
feet) to the POINT OF BEGINNING of the herein described parcel; thence
continuing Northerly along said curve concave Easterly, having a central angle
of 11 degrees 44 minutes 00 seconds and a radius of 1506.55 feet, an arc
distance of 308.52 feet, (said arc being subtended by a chord having a bearing
of North 06 degrees 46 minutes 59 seconds West a length of 307.98 feet) to the
South right-of-way line of 86th Street; thence along said right-of-way the next
three courses: (1) North 89 degrees 05 minutes 02 seconds East 25.00 feet; (2)
North 81 degrees 19 minutes 07 seconds East 111.02 feet; (3) North 89 degrees 05
minutes 02 seconds East 72.37 feet; thence South 00 degrees 14 minutes 50
seconds East 359.74 feet; thence North 69 degrees 29 minutes 49 seconds West
48.22 feet to a non-tangent curve concave Southwesterly having a central angle
of 20 degrees 16 minutes 28 seconds and a radius of 365.00 feet; thence
Northwesterly along said curve an arc distance of 129.16 feet (said arc being
subtended by a chord having a bearing of North 81 degrees 37 minutes 33 seconds
West and a length of 128.48 feet) to the Point of Beginning.

Together with non-exclusive easements for ingress and egress and public
utilities over access roads described in Exhibit A of the Declaration of
Easement dated January 25, 1983 and recorded in the Office of Recorder of Marion
County, Indiana on February 15, 1983 as Instrument No. 83-10408.

Also together with all the rights and easements granted in the Easement
Agreements recorded as Instruments #81-35027, #81-56327 and #85-92377 in the
Office of the Recorder of Marion County, Indiana.
<PAGE>
                                   Schedule 1

                              Permitted Exceptions

1.       Real estate taxes assessed for the year 2002 are a lien but are not yet
         due and payable.

2.       Restrictive Covenants set out in Section 6.6(b) and (c) of Article VI
         of the Memorandum of Operating Agreement recorded December 30, 1970 as
         Instrument No. 70-58244; as modified by amendments recorded November
         27, 1972 as Instrument No. 72-71956, February 24, 1974 as Instrument
         No. 74-10776.

3.       Covenants, conditions and restrictions contained in a Deed from
         H-Castleton to Castleton Corner Associates dated May 19, 1981 and
         recorded June 8, 1981 as Instrument No. 81-35025; as modified by an
         amendment dated August 23, 1983 and recorded September 2, 1983 as
         Instrument No. 83-63599.

4.       Reciprocal rights to use roads for vehicular and pedestrian access and
         covenants prohibiting the construction of any barriers as set out in a
         nonbarrier agreement dated June 5, 1981 and recorded June 8, 1981 as
         Instrument No. 81-35027.

5.       Easements, covenants and obligation set out in a sewer agreement dated
         June 5, 1981 and recorded June 8, 1981 as Instrument No. 81-56327.

6.       Covenants, restrictions and obligations contained in a Declaration of
         Development Standards, Covenants and Restrictions for Castleton Corner
         dated November 16, 1981 and recorded November 20, 1981 as Instrument
         No. 81-71812; as modified by an amendment dated August 25, 1983 and
         recorded September 2, 1983 as Instrument No. 83-63600.

7.       Commitments Relative to Use or Development of Real Estate made in
         Connection with Variance or Special Exception Grant recorded October
         19, 1982 as Instrument No. 82-57795; as modified by an instrument
         recorded October 25, 1989 as Instrument No. 89-106405.

8.       Terms and conditions of a Declaration of Easement dated January 25,
         1982 and February 15, 1983 as Instrument No. 83-10408.

9.       Easement for storm water drainage as set out in a Drainage Agreement
         recorded December 30, 1983 as Instrument No. 83-95762.

10.      Easements, covenants and obligations set out in an Operating and
         Reciprocal Easement Agreement by and between Castleton Corner
         Associates and Lincoln National Bank & Trust Company, as Trustee dated
         October 22, 1985 and recorded October 22, 1985 as Instrument No.
         85-92377.
<PAGE>
11.      Covenants and restrictions set out in a Declaration of Restrictions
         dated October 9, 1985 and recorded November 11, 1985 as Instrument No.
         85-99368; as modified by amendments recorded October 29, 1986 as
         Instrument No. 86-110969 and February 27, 1990 as Instrument No.
         90-18459.

12.      Terms and provisions of an Electric Line Easement in favor of
         Indianapolis Power & Light Company dated May 9, 1990 and recorded June
         6, 1990 as Instrument No. 90-55214.