_________________________________________________________________


                         THIRD AMENDMENT TO CREDIT AGREEMENT

                                     BY AND AMONG

                        ASSOCIATED ESTATES REALTY CORPORATION,

                                      Borrower,


                                 NATIONAL CITY BANK,

                                  as Managing Agent


                BANK OF AMERICA NATIONAL TRUST & SAVINGS ASSOCIATION,

                                as Documentation Agent

                                         AND


                          THE BANKS IDENTIFIED ON SCHEDULE 1

                           Dated:  as of December 18, 1998







          _________________________________________________________________ 




                                  THIRD AMENDMENT TO
                                   CREDIT AGREEMENT 



               THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this "Amendment")

          is made as of December 18, 1998, by and among ASSOCIATED ESTATES

          REALTY CORPORATION, an Ohio corporation ("Borrower"), and

          NATIONAL CITY BANK, as Managing Agent under the Credit Agreement

          defined in the following recitals (in such capacity, the

          "Managing Agent"), BANK OF AMERICA NATIONAL TRUST AND SAVINGS

          ASSOCIATION, as Documentation Agent under the Credit Agreement

          (in such capacity, the "Documentation Agent") and each of the

          Banks identified on Schedule 1 attached hereto (the "Banks").

                                   R E C I T A L S

               A.   Pursuant to that certain credit agreement, dated as of

          June 30, 1998, by and among Borrower, the Managing Agent and Bank

          of America National Trust and Savings Association, as

          Documentation Agent, and the Banks identified on Schedule 1

          thereto, such Banks agreed to advance certain Loans and to issue

          certain Letters of Credit to Borrower, on the terms and subject

          to the conditions set forth therein, and Borrower agreed to repay

          the same, with interest thereon, as provided therein.

               B.   The aforementioned credit agreement has been amended

          (1) by a First Amendment to Credit Agreement, dated as of

          August 6, 1998; (2) by a Second Amendment to Credit Agreement,

          dated as of August 31, 1998.  As so amended, such credit

          agreement is referred to as the "Credit Agreement".

               C.   Certain Events of Defaults occurred as of September 30,

          1998, in respect of Borrower's compliance with certain covenants

          set forth in the Credit Agreement (the "Existing Defaults") which

          the Required Banks have not waived and which, immediately prior

          to the execution and delivery of this Amendment, remain uncured.

                                          1  


               D.   The Managing Agent, at the direction and with the

          express approval of the Required Banks in accordance with the

          applicable provisions of the Credit Agreement, has further agreed

          with Borrower to amend the Credit Agreement in order to reflect

          the parties' understandings regarding certain changes to the

          financial covenants set forth in the Credit Agreement, the Banks'

          approval of certain changes to Borrower's accounting practices

          relevant to particular kinds of capital expenditures and in order

          to make other mutually acceptable changes to the Credit

          Agreement, upon and subject to the terms and conditions

          hereinafter set forth.

               NOW, THEREFORE, for Ten Dollars ($10.00) and other valuable

          consideration, the receipt and sufficiency of which are hereby

          acknowledged, the parties agree as follows:

                    1.   Defined Terms.  Capitalized terms which are used

          in this Amendment without being defined herein shall have the

          meanings ascribed to them in the Amended Credit Agreement

          (defined below).

                    2.   Amendment of the Credit Agreement.  The parties

          agree that the Credit Agreement shall be further amended,

          effective as of the Effective Date (as hereinafter defined), so

          that from and after the Effective Date the Credit Agreement shall

          be completely amended and restated as set forth in Annex 1 to

          this Amendment.  As so amended and restated, the Credit Agreement

          is referred to herein as the "Amended Credit Agreement".  The

          parties acknowledge that certain exhibits and schedules which are

          referred to in the Amended Credit Agreement have been omitted

          therefrom.  Each exhibit and schedule so omitted remains

          identical to the corresponding version thereof which was appended


                                          2


          to the Credit Agreement; all such exhibits and schedules shall be

          deemed to be incorporated in the Amended Credit Agreement by this

          reference.

                    3.  Conditions Precedent to this Amendment.  On or

          prior to the effective date of this Amendment (the "Effective

          Date"), each of the following conditions precedent shall have

          been satisfied:

                         (a)  Proof of Corporate Authority.  The Managing
                         Agent shall have received from Borrower copies,
                         certified by a duly authorized officer of Borrower
                         to be true and complete on and as of the Effective
                         Date, of records of all corporate action taken by
                         Borrower to authorize (i) the execution and
                         delivery of this Amendment; (ii) the making by
                         Borrower of the borrowings contemplated by the
                         Amended Credit Agreement, as amended hereby; and
                         (iii) the performance of its other obligations and
                         agreements hereunder and under the Amended Credit
                         Agreement;

                         (b)  Incumbency Certificate.  The Managing Agent
                         shall have received from Borrower an incumbency
                         certificate, dated as of the Effective Date,
                         signed by a duly authorized officer of Borrower
                         and giving the name and bearing a specimen
                         signature of each individual who shall be
                         authorized to sign, in the name and on behalf of
                         Borrower, this Amendment and the Amended Credit
                         Agreement.

                         (c)  Officers' Certificate.  The Managing Agent
                         shall have received from Borrower a certificate
                         dated as of the Effective Date, signed by a duly
                         authorized officer of Borrower and certifying on
                         terms acceptable to the Managing Agent that each
                         of the representations and warranties of Borrower
                         in the Amended Credit Agreement is true and
                         correct in all material respects on and as of the
                         Effective Date.

                         (d)  Legality of Transactions.  No change in
                         applicable law shall have occurred as a
                         consequence of which it shall have become and
                         continue to be unlawful (i) for the Managing Agent
                         or any Bank to perform any of its agreements or
                         obligations under the Amended Credit Agreement or
                         any other Loan Document on or as of the Effective
                         Date; or (ii) for Borrower to perform any of its
                         agreements or obligations under the Amended Credit
                         Agreement or any Loan Document.


                                          3  


                         (e)  Performance, Etc.  Except for the Existing
                         Defaults, Borrower shall have duly and properly
                         performed, complied with and observed, in all
                         material respects, each of its covenants,
                         agreements and obligations contained in each of
                         the Loan Documents to which Borrower is a party or
                         by which Borrower is bound.  No event shall have
                         occurred on or prior to the Effective Date, and no
                         condition shall exist as of the Effective Date,
                         which constitutes or would (with the delivery of
                         notice or the passing of time, or both) constitute
                         a Default or an Event of Default under the Amended
                         Credit Agreement.

                         (f)  Compliance with Laws. Each of the borrowings
                         made and each Letter of Credit issued under the
                         Credit Agreement is, and each borrowing to be made
                         and each Letter of Credit to be issued under the
                         Amended Credit Agreement shall be, in compliance
                         with the requirements of all applicable laws,
                         regulations, rules and orders, including without
                         limitation the Environmental Laws and the
                         requirements imposed by the SEC or by the Board of
                         Governors of the Federal Reserve System under
                         Regulations U, G and X.

                         (g)  Payment of Waiver Fee and Certain Expenses. 
                         Borrower shall have (i) paid to the Managing
                         Agent, for the benefit of the Banks as hereinafter
                         provided, a Waiver Fee (the "Waiver Fee") in the
                         amount of Three Hundred Seventy-Five Thousand
                         Dollars ($375,000); and (ii) reimbursed the
                         Managing Agent for all reasonable out-of-pocket
                         costs and expenses, including, without limitation,
                         all fees and disbursements of legal counsel to the
                         Managing Agent which shall have been incurred by
                         the Managing Agent in connection with the
                         negotiation and preparation of this Amendment and
                         the documents and instruments described or
                         referred to herein.

                         (h)  Changes: None Adverse.  From the date of the
                         most recent balance sheets referred to in
                         Section 4.5 of the Amended Credit Agreement or
                         delivered in accordance with the requirements of
                         the Amended Credit Agreement, in either case
                         through and including the Effective Date, no
                         changes shall have occurred in the assets,
                         liabilities, financial condition, business,
                         operations or prospects of Borrower or Borrower's
                         Consolidated Subsidiaries which, individually or
                         in the aggregate, are material and adverse to
                         Borrower and its Consolidated Subsidiaries.

                         (i)  Compliance Certificate.  The Managing Agent
                         shall have received a Compliance Certificate, the
                         required calculations under which shall
                         demonstrate Borrower's compliance with the

                                          4 


                         covenants set forth in the Amended Credit
                         Agreement.

                         (j)  Other Approvals.  The Managing Agent shall
                         have received such other approvals, opinions,
                         certificates, instruments and documents with
                         respect to the transactions described herein as it
                         may request.

                         (k)  Representations and Warranties.  Each of the
                         representations and warranties made by or on
                         behalf of Borrower in the Amended Credit Agreement
                         or in any other Loan Document shall be true,
                         correct and complete in all material respects as
                         of the Effective Date.

                    4.   Acknowledgement of Certain Matters.  

                         (a)  The Managing Agent acknowledges its receipt

          of the Waiver Fee in the amount referred to in Section 3(g),

          above, and further acknowledges that the Facility Fee has been

          paid for the period ending as of June 30, 1999.

                         (b)  Borrower, the Managing Agent and each Bank

          acknowledges that this Amendment, and the implementation of the

          terms of the Amended Credit Agreement resulting from this

          Amendment, have been made in contemplation of Borrower's revising

          its accounting policies to reflect, in accordance with GAAP, the

          accounting treatment of certain suite renovation expenditures in

          a manner consistent with the application of the Capital

          Expenditure Allocation set forth in the Amended Credit Agreement. 

          The Managing Agent and each Bank approves such revision to

          Borrower's accounting practices, and agrees that the

          implementation of such revision shall not constitute inconsistent

          application of GAAP for purposes of the Amended Credit Agreement.

                         (c)  The Managing Agent and each Bank agrees that

          Borrower may, for the purposes of determining Interest Expense

          for Borrower's fiscal quarter and fiscal year ended December 31,

          1998, effect a proforma adjustment to the interest payable during


                                          5 


          such fiscal quarter to reflect the difference between the

          interest actually paid in respect of the Obligations during such

          fiscal quarter and attributable to the unavailability of LIBOR

          Rate Loans under the Credit Agreement by reason of the Existing

          Defaults and the interest which would have been paid in respect

          of the Obligations during such fiscal quarter if LIBOR Rate Loans

          at a LIBOR Margin of One Hundred Forty (140) basis points had

          been available to Borrower during the period commencing upon the

          occurrence of the Existing Defaults and concluding on the

          Effective Date.

                    5.  Ratification.  Except as specifically modified and

          amended by this Amendment, the Credit Agreement and each other

          Loan Document is unchanged and remains in full force and effect. 

          Borrower hereby ratifies and affirms the Credit Agreement and

          every term and condition thereof, as the same are amended and

          restated as provided herein, and represents and warrants to the

          Managing Agent and each Bank that (a) as of the date hereof and

          except for the Existing Defaults, there is no Default or Event of

          Default; (b) all of Borrower's representations and warranties

          under the Amended Credit Agreement are true and correct in all

          material respects as of the Effective Date; and (c) Borrower has

          no offsets or claims against the Managing Agent or any Bank

          under, in respect of or in any way related to the Amended Credit

          Agreement or any Loan Document.

                    6.  Binding Effect.  This Amendment shall be binding

          upon and shall inure to the benefit of the parties hereto and

          their respective successors and permitted assigns.

                    7.  Effective Date.  The amendments contemplated by

          this Amendment shall be effective, as of the date first set forth


                                          6 


          above (the "Effective Date"), upon (i) the execution of this

          instrument by Borrower, the Managing Agent, the Documentation

          Agent and the Banks; and (ii) the satisfaction of each of the

          conditions precedent set forth in Section 3 of this Amendment.  

                    8.   Regarding Borrower's Debt Ratings.  Borrower

          warrants and represents that as of the Effective Date, Borrower's

          Debt Ratings are as follows:


                         Moody's:  BBB-; and

                         S&P:      Baa3


                    9.   Regarding the Existing Defaults.  The Managing

          Agent and the Banks agree that provided that all of the

          conditions precedent set forth in Section 3, above, shall have

          been fulfilled on or before the Effective Date, all of the

          Existing Defaults, and all rights and remedies available to the

          Banks or the Managing Agent in consequence of the Existing

          Defaults, shall be waived.

                    10.  Counterparts.  This Amendment may be executed in

          multiple counterparts, and signature pages from any counterpart

          may be appended to any other counterpart.  All such counterparts

          shall constitute a single, unified instrument.

                    IN WITNESS WHEREOF, this Amendment has been duly

          executed and delivered by or on behalf of each of the parties as

          of the date first set forth above.

                                      7


                                   BORROWER:

                                   ASSOCIATED ESTATES REALTY CORPORATION


                                   By:  /s/ Jeffrey I. Friedman
                                        -------------------------------        
                                        Print Name:  Jeffrey I. Friedman   
                                        Title:  President                  

                                   5025 Swetland Court
                                   Cleveland, Ohio  44143
                                   Telephone:  (216) 261-5000
                                   Facsimile:  (216) 289-9600
                                   Attn:  Jeffrey I. Friedman, President

                                   8


                                   MANAGING AGENT:

                                   NATIONAL CITY BANK


                                   By:  /s/  Gary L. Wimer
                                        ------------------
                                        Gary L. Wimer
                                        Vice President

                                   National City Center
                                   1900 East Ninth Street
                                   Locator No. 2118
                                   Cleveland, Ohio  44114
                                   Telephone:  (216) 575-2233
                                   Facsimile:  (216) 575-3160
                                   Attn:  Gary L. Wimer, Vice President
                                        Investment Real Estate Div.



                                   THE  DOCUMENTATION AGENT:

                                   BANK OF AMERICA NATIONAL TRUST AND 
                                   SAVINGS ASSOCIATION 

                                   By:  /s/ Richard G. Baer, Jr.
                                        --------------------------------
                                        Print Name:  Richard G. Baer, Jr.
                                        Title:  Vice President
                                        
                                        
                                   231 South LaSalle Street, 12-Q
                                   Chicago, Illinois  60697
                                   Telephone:  (312) 828-5149
                                   Facsimile:  (312) 974-4970
                                   Attn:  Richard G. Baer, Jr., 
                                          Vice-President

                                          9


                                   THE BANKS:

                                   NATIONAL CITY BANK


                                   By:  /s/  Gary L. Wimer
                                        --------------------
                                        Gary L. Wimer
                                        Vice President

                                   National City Center
                                   1900 East Ninth Street
                                   Locator No. 2118
                                   Cleveland, Ohio  44114
                                   Telephone:  (216) 575-2233
                                   Facsimile:  (216) 575-3160
                                   Attn:  Gary L. Wimer, Vice President
                                        Investment Real Estate Div.



                                   BANK OF AMERICA NATIONAL TRUST AND 
                                   SAVINGS ASSOCIATION 

                                   By:  /s/ Richard G. Baer, Jr.
                                        --------------------------------
                                        Print Name:  Richard G. Baer, Jr.
                                        Title:  Vice President

                                   231 South LaSalle Street, 12-Q
                                   Chicago, Illinois  60697
                                   Telephone:  (312) 828-5087
                                   Facsimile:  (312) 974-4970
                                   Attn:  Richard G. Baer, Jr.,
                                        Vice-President


                                   BANK ONE, N.A. 

                                   By:  /s/ Douglas D. Lyons
                                       ---------------------
                                        Print Name:  Douglas D. Lyons
                                        Title:  Vice President


                                   30 South Park Place
                                   Painesville, Ohio  44077
                                   Telephone:  (440) 352-5580
                                   Facsimile:  (440) 352-5971
                                   Attn:  Douglas Lyons, Vice-President


                                          10


                                   MANUFACTURERS AND TRADERS TRUST COMPANY

                                   By:  /s/ Kevin Quinn                    
                                        --------------------------------
                                        Print Name:  Kevin Quinn
                                        Title:  Assistant Vice President

                                   One Fountain Plaza
                                   Buffalo, New York  14203-1495
                                   Telephone:  (716) 848-7337
                                   Facsimile:  (716) 848-7318
                                   Attn:  Kevin B. Quinn,
                                          Assistant Vice President

                                   

                                   HARRIS TRUST & SAVINGS BANK

                                   By:  /s/  Gregory M. Bins               
                                        ----------------------------
                                        Print Name:  Gregory M. Bins
                                        Title:  Vice President

                                   111 West Monroe Street
                                   Chicago, Illinois   60690
                                   Telephone:  (312) 461-2203
                                   Facsimile:  (312) 461-2968
                                   Attn:  Gregory M. Bins, 
                                        Vice President



                                   HUNTINGTON BANK - CLEVELAND, N.A.

                                   By:  /s/  Gerald A. Buck
                                        ---------------------------
                                        Print Name:  Gerald A. Buck
                                        Title:  Vice President

                                   917 Euclid Avenue
                                   Cleveland, Ohio  44115
                                   Telephone:  (216) 515-6882
                                   Facsimile:  (216) 515-6369
                                   Attn:  Gerald A. Buck,
                                          Vice President


                                          11


                                   CITIZENS BANK OF RHODE ISLAND

                                   By:  /s/  John K. Cooper
                                        ---------------------------
                                        Print Name:  John K. Cooper
                                        Title:  Vice President

                                   One Citizens Plaza
                                   Fourth Floor
                                   Providence, Rhode Island  02903
                                   Telephone:  (401) 456-7283
                                   Facsimile:  (401) 455-5410
                                   Attn:  John K. Cooper
                                        Vice President


                                   FIRSTMERIT BANK, N.A.

                                   By:  /s/  Peter D. Collins              
                                        -----------------------------
                                        Print Name:  Peter D. Collins
                                        Title:  Vice President

                                   123 West Prospect Avenue
                                   Cleveland, Ohio  44115-1070
                                   Telephone:  (216) 694-5638
                                   Facsimile:  (216) 621-3201
                                   Attn:  Peter D. Collins,
                                        Vice President


                                   SOUTHTRUST BANK, N.A.

                                   By:  /s/ Sam Boroughs
                                        --------------------------
                                        Print Name:  Sam Boroughs
                                        Title:  Asst. Vice President
                    
                                   420 North 20th Street
                                   Birmingham, Alabama  35203
                                   Attn:  Sam Boroughs
                                   Telephone:  (205) 254-5039
                                   Facsimile:  (205) 254-5022


                                   COMMERZBANK AKTIENGESELLSCHAFT

                                   By:  /s/ Douglas P. Traynor
                                        ------------------------------
                                        Print Name:  Douglas P. Traynor
                                        Title:  Vice President
                    
                                   Two World Financial Center
                                   New York, New York 10281-1050
                                   Attn:  Douglas Traynor, Vice President
                                   Telephone:  (212) 266-7569
                                   Facsimile:  (212) 266-7565

                                         12

<TABLE>

                                      SCHEDULE 1

                                          to

                                 Third Amendment to 
                                   Credit Agreement

<CAPTION>
 
                                   Participation
          Bank                     Percentage          Credit Commitment
          -----------------------  -------------       -----------------
          <S>                      <C>                 <C>
          National City Bank            14%              $ 35,000,000

          Bank of America National      14%              $ 35,000,000
            Trust and Savings
            Association

          Manufacturers and Traders      8%              $ 20,000,000
            Trust Company

          Harris Trust & Savings Bank   10%              $ 25,000,000
           
          Bank One, N.A.                12%              $ 30,000,000

          Huntington Bank -             10%              $ 25,000,000
             Cleveland, N.A.

          Citizens Bank of               8%              $ 20,000,000
             Rhode Island

          FirstMerit Bank, N.A.          4%              $ 10,000,000

          SouthTrust Bank, N.A.         10%              $ 25,000,000

          Commerzbank                   10%              $ 25,000,000
             Aktiengesellschaft

                                        100%             $250,000,000
</TABLE>


                        AMENDED AND RESTATED CREDIT AGREEMENT


                    THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of
          December 18, 1998, by and among ASSOCIATED ESTATES REALTY
          CORPORATION, an Ohio corporation (hereinafter, "Borrower"), the
          banks and lending institutions set forth on Schedule 1 hereto
          (the "Banks"), and NATIONAL CITY BANK, a national banking
          association ("NCB"), in its capacity as agent for the Banks (in
          such capacity, the "Managing Agent"), and BANK OF AMERICA
          NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking
          association, in its capacity as Documentation Agent (in such
          capacity, the "Documentation Agent").

                                       RECITALS

               A.   Pursuant to a Credit Agreement, dated as of
          June 30, 1998, by and among Borrower, the Managing Agent, the
          Documentation Agent and those Banks which were identified on
          Schedule A thereto (the "Original Credit Agreement"), such Banks
          agreed to make Loans and to issue Letters of Credit to Borrower
          upon the terms and subject to the conditions set forth therein.

               B.   The Original Credit Agreement has been amended by (1)
          that certain First Amendment to Credit Agreement dated as of
          August 7, 1998, and (2) that certain Second Amendment to Credit
          Agreement, dated as of August 31, 1998.  As so amended, the
          Original Credit Agreement is referred to as the "Amended Credit
          Agreement".

               C.   Borrower, the Managing Agent, the Documentation Agent
          and the Banks have agreed to amend and restate the Amended Credit
          Agreement in its entirety as hereinafter set forth.

                                      ARTICLE 1.

                                    INTERPRETATION

                    Section 1.1  General.  For the purposes of this
          Agreement, the following general rules of interpretation shall
          apply to the extent that they are not clearly inconsistent with
          the context or the subject-matter of specific provisions hereof:

                    (a)  The expression "this Agreement" shall mean this
          Credit Agreement (including all of the Schedules and Exhibits
          annexed hereto) as originally executed, or, if supplemented,
          amended or restated from time to time, as so supplemented,
          amended or restated;

                    (b)  Singular nouns shall include the plural and vice
          versa, and all references to dollars shall mean United States
          Dollars;

                    (c)  Accounting terms not otherwise defined herein
          shall have the meanings assigned to them in accordance with
          Generally Accepted Accounting Principles (as hereinafter
          defined); and


                                          14  


                    (d)  All Schedules and Exhibits to this instrument
          shall be deemed to be incorporated herein by reference.

                    Section 1.2  Definitions.  In addition to terms defined
          elsewhere in this Agreement, the terms set forth below shall have
          the following meanings for the purpose of this Agreement:

                    "Absolute Interest Period" means, with respect to a
          Competitive Bid Loan made at an Absolute Rate, a period not more
          than one hundred eighty (180) days after the Draw Date for such
          Competitive Bid Loan, as requested by Borrower and offered by a
          Bank, but in no event extending beyond the Termination Date.  If
          an Absolute Interest Period would end on a day which is not a
          Business Day, such Absolute Interest Period shall end on the next
          succeeding Business Day.

                    "Absolute Rate" means a fixed rate of interest (rounded
          to the nearest 1/100 of 1%) for an Absolute Interest Period with
          respect to a Competitive Bid Loan offered by a Bank and accepted
          by the Borrower at such rate.

                    "Absolute Rate Loan" means a Competitive Bid Loan made
          at the Absolute Rate.

                    "Accountants" means Price, Waterhouse & Co., or such
          other nationally recognized firm of certified public accountants
          as may from time to time be selected by Borrower and acceptable
          to the Managing Agent, with the consent of the Required Banks.

                    "Adjusted Prime Rate" means, at any time, the sum of
          the Prime Rate plus the Prime Rate Margin in effect at such time.

                    "Adjusted Unencumbered Debt Service" means, for any
          fiscal period of Borrower and its Wholly-Owned Subsidiaries, an
          amount equal to the Debt Service for such period in respect of
          all Unencumbered Debt of Borrower and its Wholly-Owned
          Subsidiaries, assuming that (a) the rate of interest payable in
          respect of all such Unencumbered Debt were the greater of (i)
          seven percent (7.0%) per annum, or (ii) two percent (2.0%) per
          annum in excess of the prevailing rate, as of the applicable date
          of determination, for ten (10) year U.S. Treasury obligations;
          and (b) all such Unencumbered Debt were payable in equal monthly
          installments of principal and interest over a twenty-five (25)
          year mortgage amortization schedule.

                    "Affiliate" means, in relation to any Person (an
          "Affiliated Person"), any Person (other than a Subsidiary) which
          (directly or indirectly) controls or is controlled by or is under
          common control with such Affiliated Person. For the purposes of
          this definition, the term "control" shall mean the possession
          (directly or indirectly) of the power to direct or to cause the
          direction of the management or the policies of a Person, whether
          through the ownership of shares of any class in the capital or
          any other voting securities of such Person, by contract or
          otherwise.

                    "Agency Fee" means an annual fee, payable to the
          Managing Agent in consideration for its serving as the Managing

                                          15  


          Agent in respect of the Loan Documents, as and when set forth in
          a letter agreement between Borrower and the Managing Agent dated
          of even date herewith.

                    "Aggregate Consolidated Indebtedness"  means, at any
          time, the sum of (i) the outstanding principal balance at such
          time of Consolidated Indebtedness, plus (ii) the amount at such
          time of the Consolidated Group Percentage Interest of all
          Investment Entity Indebtedness.

                    "Aggregate Market Value" means, at any time, the sum of
          (i) Market Value at such time, plus (ii) the amount at such time
          of the Consolidated Group Percentage Interest of Investment
          Entity Market Value.

                    "Apartment Suites" means all multi-family residential
          rental units owned by Borrower, its Consolidated Subsidiaries or
          any Investment Entity, without regard to whether such units are
          subject to any governmental financial support, operating
          assistance or regulation.  The number of Apartment Suites shall,
          for any purpose relevant to this Agreement, mean the aggregate
          number of Apartment Suites owned by Borrower, its Consolidated
          Subsidiaries or any Investment Entity on the final day of the
          fiscal period most recently expired as of the date of such
          determination; as to any Investment Entity, the number of
          Apartment Suites for the purposes of the determination of the
          amount of the Capital Expenditure Allocation shall be equal to
          the Consolidated Group Percentage Interest in all of the
          Apartment Suites owned by such Investment Entity.

                    "Applicable Margin" means, as at any date, a percentage
          per annum for Prime Rate Loans and Ratable LIBOR Rate Loans,
          determined by reference to Borrower's Debt Rating as set forth
          below:

                                          16

<TABLE>

<CAPTION>
                        Debt Rating       Ratable LIBOR      Prime     
                   --------------------  --------------  ------------
                                           Rate Margin    Rate Margin
                                          (expressed in  (expressed in
             Level     S&P      Moody's   basis points)  basis points)
             ----- ---------  ---------   -------------  -------------
              <S>   <C>        <C>        <C>            <C>
               1    A- to A+   A3 to A1       100             -0-
               2    BBB+       Baa1           110             -0-

               3    BBB        Baa2           125             -0-
               4    BBB-       Baa3           140             -0-
               5   <BBB-      <Baa3           225              25
</TABLE>


          The Applicable Margin for each Prime Rate Loan and each Ratable
          LIBOR Rate Loan (the "Prime Rate Margin" and the "LIBOR Margin",
          respectively) shall be determined by reference to the Debt Rating
          in effect as of the Draw Date for such Loan (subject, in the case
          of each Prime Rate Loan, to adjustment during the pendency of
          such Loan to reflect any changes in Borrower's Debt Rating),
          provided that:
               (A)  if the applicable Debt Ratings established by S&P and
               Moody's shall be at differing levels, the Applicable Margin
               shall be determined by reference to the lower Debt Rating,
               provided, however, that if the difference between the Debt
               Ratings shall be more than one level, the Applicable Margin
               shall be one (1) level higher than the lower of the two Debt
               Ratings;

               (B)  if only one of S&P and Moody's shall have a Debt Rating
               in effect, then:  (x) if both S&P and Moody's are engaged in
               the business of rating indebtedness, the Applicable Margin
               should be the grade that is one level below the available
               Debt Rating; or (y) if either S&P or Moody's is no longer
               engaged in the business of rating indebtedness, the
               Applicable Margin shall be the grade corresponding to the
               available Debt Rating; and

               (C)  if neither S&P nor Moody's shall have a Debt Rating in
               effect for Borrower, the Applicable Margin shall be the
               grade corresponding to Level 5 shown on the preceding table.

                    "Assets Under Development" means, as of the date of the
          determination thereof, any new real estate project (or the
          expansion area of any existing real estate project) owned by
          Borrower, any Consolidated Subsidiary or any Investment Entity on
          which the construction of one or more new, income-producing
          buildings has been commenced and is continuing, provided,
          however, that projects (or, in the case of phased projects as to
          which discrete portions thereof are constructed and completed at
          different times, identifiable phases of such projects) shall
          cease being Assets Under Development at such time as a
          certificate of occupancy is issued with respect to the
          construction performed with respect to such projects or discrete
          phases.  For the purposes of this Agreement, land and


                                          17 


          improvements comprised in Assets Under Development shall be
          valued, at any time, at (i) the then-current book values thereof
          (as determined in accordance with GAAP) for those Assets Under
          Development owned by Borrower and its Consolidated Subsidiaries;
          and (ii) the applicable Consolidated Group Percentage Interest of
          the then-current book value (as determined in accordance with
          GAAP) for each Asset Under Development owned by an Investment
          Entity.

                    "Banks" means, collectively, each of the banks or
          lending institutions identified on Schedule 1 hereto, as such
          Schedule may be amended from time to time pursuant to Section 2.1
          hereof, and the respective successors and assigns of such banks
          and lending institutions. "Bank" means any of the Banks.

                    "Business Day" means any day other than a Saturday or
          Sunday on which commercial banking institutions are open for
          business in Cleveland, Ohio; for all purposes relevant to the
          issuance of LIBOR Rate Loans (including, without limitation, the
          determination of the LIBOR Rate and of the Draw Date for Ratable
          LIBOR Rate Loans and Competitive Bid Loans), "Business Day" shall
          mean any day other than a Saturday or Sunday on which commercial
          banking institutions are open for business in Cleveland, Ohio,
          and in London, England.

                    "Capital Expenditure Allocation" means, for any party,
          an annual amount determined by multiplying the sum of Two Hundred
          Dollars ($200.00) by the number of Apartment Suites owned by such
          party as of the final day of such fiscal year (or, in the case of
          any fiscal quarter, by multiplying the sum of Fifty Dollars
          ($50.00) by the number of Apartment Suites owned by such party as
          of the final day of such fiscal quarter).

                    "Capitalization Factor" means the annual rate of nine
          and one-quarter percent (9.25%).

                    "Capitalized Income Value" means, as of any date, an
          amount equal to the EBITDA of Borrower and its Consolidated
          Subsidiaries, including Service EBITDA in an amount not to exceed
          $2,500,000 on an annualized basis, divided by the Capitalization
          Factor.  For the purposes of this provision, the EBITDA of
          Borrower and its Consolidated Subsidiaries shall, as appropriate,
          be subject to the Pro Forma Adjustment to reflect any acquisition
          made by Borrower or any of its Consolidated Subsidiaries during
          the applicable fiscal period.

                    "Closing Date" means the date first set forth in the
          preamble of this instrument.

                    "Code" means the United States Internal Revenue Code of
          1986, as amended from time to time, or any successor federal tax
          code, and any reference to any statutory provision shall be
          deemed to be a reference to any successor provision or
          provisions.

                    "Competitive Bid Fee" means a fee, in the amount of One
          Thousand Two Hundred and Fifty Dollars ($1,250), which shall be
          earned by, and shall be due and payable to, the Managing Agent
          for Managing Agent-administered Competitive Bid Loans as provided
          in Section 2.3(c)(vii), below.

                    "Competitive Bid Borrowing Notice" means the notice, to
          be submitted by Borrower to the Managing Agent in accordance with


                                          18 


          Section 2.3 of this Agreement, reflecting Borrower's acceptance
          of Banks' Competitive Bid Quotes submitted as therein provided.

                    "Competitive Bid LIBOR Rate Loan" means a Competitive
          Bid Loan which is a LIBOR Rate Loan.

                    "Competitive Bid Loan" means each of the Loans made or
          to be made to Borrower by one or more Banks in accordance with
          Section 2.3 of this Agreement.

                    "Competitive Bid Note" means, collectively, the 
          promissory notes of Borrower which are to be dated, executed and
          delivered by Borrower to the Banks on the Closing Date, together
          with any amendment, modification, supplement or renewal thereof
          and with any instruments given in substitution or replacement
          therefor.

                    "Competitive Bid Quote" means an offer by a Bank, in
          response to a Competitive Bid Quote Request, which shall be
          substantially similar in every material respect to the form
          attached hereto as Exhibit A, and shall be delivered by such Bank
          to the Managing Agent in accordance with Section 2.3, below.

                    "Competitive Bid Quote Request" means the request by
          the Borrower for the Banks to offer to make Competitive Bid Loans
          to Borrower in the amount and for the Interest Periods to be set
          forth therein; each Competitive Bid Quote Request shall be
          substantially similar in every material respect to the form
          attached hereto as Exhibit B.

                    "Competitive LIBOR Bid Rate" means the annual rate of
          interest (expressed as a margin of LIBOR) offered by a Bank to
          Borrower in such Bank's Competitive Bid Quote made pursuant to
          Section 2.3, below.

                    "Compliance Certificate" means a certificate,
          substantially in the form of Exhibit C, evidencing Borrower's
          compliance with the applicable requirements imposed by this
          Agreement after giving effect to the making of each Loan.

                    "Consolidated Subsidiaries" means all of Borrower's
          Subsidiaries, and all other Persons, with which Borrower reports
          financial results on a consolidated basis in accordance with
          GAAP.

                    "Consolidated Group" means Borrower and all of its
          Consolidated Subsidiaries.

                    "Consolidated Group Percentage Interest" means, with
          respect to any Investment Entity at any time, the aggregate
          percentage of the total equity interests in such Investment
          Entity which is then held by members of the Consolidated Group,
          determined by calculating the greater of (i) the percentage of
          all issued and outstanding stock or partnership or membership
          interests in such Investment Entity which is held by members of
          the Consolidated Group, in the aggregate, or (ii) the percentage
          of the total book value of such Investment Entity that would be
          received by members of the Consolidated Group, in the aggregate,
          upon the liquidation of such Investment Entity after repayment in
          full of all Indebtedness of such Investment Entity.

                    "Consolidated Indebtedness" means, collectively, all
          Indebtedness of Borrower and its Consolidated Subsidiaries.


                                          19


                    "Contingent Obligation" means any direct or indirect
          liability, contingent or otherwise, with respect to any
          Indebtedness, lease, dividend, letter of credit, banker's
          acceptance or other obligation of another Person incurred to
          provide assurance to the obligee of such obligation that such
          obligation will be paid or discharged, that any agreements
          relating thereto will be complied with, or that the holders of
          such obligation will be protected (in whole or in part) against
          loss in respect thereof.  Contingent Obligations shall include,
          without limitation, (i) the direct or indirect guaranty,
          endorsement (otherwise than for collection or deposit in the
          ordinary course of business), co-making, discounting with
          recourse or sale with recourse by any Person of the obligation of
          another Person; (ii) any liability for the obligations of another
          Person through any agreement (contingent or otherwise):  (A) to
          purchase, repurchase or otherwise acquire such obligation or any
          security therefor, or to provide funds for the payment or
          discharge of such obligation (whether in the form of loans,
          advances, stock purchases, capital contributions or otherwise),
          (B) to maintain the solvency of any balance sheet item, level of
          income or financial condition of another, or (C) to make take-or-
          pay, pay-or-play or similar payments if required regardless of
          nonperformance by any other party or parties to an agreement, if
          in the case of any agreement described under subclauses (A), (B)
          or (C) of this sentence the purpose or intent thereof is to
          provide the assurance described above.  The amount of any
          Contingent Obligation shall be equal to the amount of the
          obligation so guaranteed or otherwise supported.

                    "Controlled Partnerships" means (a) MIG/PINES
          Development, Ltd., a Florida limited partnership in which
          Borrower or a Wholly-Owned Subsidiary of Borrower owns and
          controls all of the general partner interest and a controlling
          percentage of all of the limited partner interests, and (b)
          MIG/Orlando Development, Ltd., a Florida limited partnership in
          which Borrower or a Wholly-Owned Subsidiary of Borrower owns and
          controls all of the general partner interests and a controlling
          percentage of all of the limited partner interests.

                    "Conventional Apartment Projects" means multi-family,
          income-producing properties which are not subject to any
          financial support or operating assistance or regulation (other
          than landlord/tenant laws and regulations generally applicable to
          all apartment projects) imposed by or available from any Federal,
          state or local government or governmental instrumentality;
          without limiting the generality of the foregoing, projects which
          are so-called "congregate care facilities", "assisted living
          facilities" or "Section 8 housing projects" shall not be
          considered to be Conventional Apartment Projects for the purposes
          of this Agreement.

                    "Corrective Bid" means a supplemental Competitive Bid
          Quote submitted by a Bank to the Managing Agent as and when
          provided in Section 2.3(c), below, or to the Borrower as and when
          provided in Section 2.3(d), below, correcting a manifest error
          contained in a Competitive Bid Quote therefore submitted by such
          Bank.

                    "Credit Commitment" means, in relation to any Bank, the
          maximum amount to be loaned (or otherwise made available) by such
          Bank to Borrower as such Bank's share of Ratable Loans or Letters
          of Credit, or in respect of the purchase of portions of, or
          interests in, Swingline Loans as provided in Section 2.16, but


                                          20 


          excluding any Competitive Bid Loans from such Bank to Borrower. 
          The amount of each Bank's Credit Commitment as of the date hereof
          is set forth on Schedule 1.

                    "Debt Rating" means, as of any date, the rating for
          Borrower most recently announced by either S&P or Moody's for any
          class of long-term, unsecured public indebtedness issued by
          Borrower (without regard to whether such indebtedness has been or
          will be issued by Borrower).  For the purposes of this Agreement:
          (a) if any rating established by S&P or Moody's shall be changed,
          such change will be effective as of the date on which the same is
          first announced publicly by the Rating Agency making such change;
          and (b) if S&P or Moody's shall change the basis on which ratings
          are established, each reference to the Debt Rating announced by
          such Rating Agency shall refer to the then-equivalent rating by
          such Rating Agency.

                    "Debt Service" means, for any fiscal period of Borrower
          and its Consolidated Subsidiaries, all actual interest payments
          and principal payments, including capitalized interest but
          excluding balloon payments of principal, payable during such
          fiscal period, by Borrower and its Consolidated Subsidiaries with
          respect to Indebtedness for Borrowed Money on a consolidated
          basis.
                    "Default" means any event or occurrence which, with the
          giving of notice or the passage of time, or both, would
          constitute an Event of Default.

                    "Default Interest Rate" means an annual rate of
          interest equal to the lesser of (i) two and one-fourth percent
          (2-1/4%) above the Prime Rate; or (ii) the maximum rate of
          interest which may lawfully be charged in respect of the
          Obligations.
                    "Direct Invitation to Bid" means the Borrower's request
          to each of the Banks for the submission of Competitive Bid Quotes
          which is issued in accordance with Section 2.3(d) of this
          Agreement.

                    "Distributable Cash Flow" means, with respect to any
          fiscal period of Borrower, an amount equal to the Net Income of
          Borrower and its Consolidated Subsidiaries for such period,
          including any adjustments for Investment Entities, adjusted to
          reflect (i) gains or losses from the sale of property, and (ii)
          non-recurring and extraordinary items; plus (x) depreciation and
          amortization, less the sum of (A) the Capital Expenditure
          Allocation applicable to all Apartment Suites owned by Borrower,
          its Consolidated Subsidiaries and all Investment Entities, and
          (B) loan amortization payments, exclusive of "balloon" principal
          payments.

                    "Distribution" means:

                    (i)  The declaration or payment of any dividends or
                    other distributions on or in respect of capital stock
                    (except distributions in such common stock); or

                    (ii)  The redemption, acquisition or other retirement
                    of Securities, except such redemptions, acquisitions or
                    other retirements made as a part of the same
                    transaction from the net proceeds of the sale of such
                    Securities.


                                          21 


                    "Dividend" means any payment or distribution declared
          or made in respect of any common stock, preferred stock, or any
          other ownership interest in or in respect of Borrower which,
          pursuant to GAAP, would be considered as an equity interest in
          Borrower (including, without limitation, distributions in such
          capital stock).

                    "Documentation Agent" means Bank of America National
          Trust and Savings Associations and its successors and assigns. 
          The Documentation Agent shall have no duties or responsibilities
          in such capacity under this Agreement without the prior, written
          consent of the Documentation Agent and the Managing Agent.

                    "Draw Date" means, in relation to any Loan, the day on
          which such Loan is made or to be made to Borrower pursuant to
          this Agreement.

                    "EBITDA" means, for any fiscal period of Borrower and
          its Consolidated Subsidiaries, the sum of (a) Net Income for such
          period, plus (b) Interest Expense for such period, plus (c)
          depreciation and amortization for such period (but excluding (x)
          gains or losses on the sale of Property, (y) non-recurring
          charges and extraordinary items, and (z) equity gains or losses
          from each Investment Entity included therein), plus (d)
          Investment Entity EBITDA.

                    "Employee Benefit Plan" means an "employee benefit
          plan" as defined in Section 3(3) of ERISA.

                    "Environmental Laws" means all present and future laws,
          statutes, ordinances, rules, regulations, orders, and
          determinations of any Federal, state or local governmental
          authority pertaining to health, protection of the environment,
          natural resources, conservation, wildlife, waste management,
          regulation of activities involving Hazardous Substances, and
          pollution, including, without limitation, the Comprehensive
          Environmental Response, Compensation, and Liability Act
          ("Superfund" or "CERCLA"), 42 U.S.C. SS 9601 et seq., the
          Superfund Amendments and Reauthorization Act of 1986 ("SARA"), 42
          U.S.C. SS 9601(20)(D), the Resource Conservation and Recovery Act
          ("RCRA"), 42 U.S.C. SS 6901 et  seq., the Federal Water Pollution
          Control Act, as amended by the Clean Water Act (the "Clean Water
          Act"), 33 U.S.C. SS 1251 et seq., the Clean Air Act ("CAA"), 42
          U.S.C. SS 7401 et seq., and the Toxic Substances Control Act, 15
          U.S.C. SS 2601 et seq., together with any and all applicable
          licenses, permits or governmental approvals pertaining to, or
          establishing standards with respect to, any of the foregoing
          matters, as any of the foregoing may be amended or supplemented.

                    "ERISA" means the Employee Retirement Income Security
          Act of 1974, and the rules and regulations issued thereunder, as
          the same may be amended from time to time, and including any
          successor statute.

                    "ERISA Affiliate" means, in relation to any Person, any
          trade or business (whether or not incorporated) which is a member
          of a group of which that Person is a member and which is under
          common control with such Person within the meaning of the
          regulations promulgated under Section 414 of the Code, as
          amended.

                    "ERISA Liabilities" means the aggregate of all unfunded
          vested benefits under any plan of Borrower or any ERISA Affiliate


                                          22 


          of Borrower under any Plan covered by ERISA that is not a Multi-
          employer Plan, and all potential withdrawal liabilities of any
          thereof under all Multiemployer Plans.

                    "Event of Default" means any event or condition
          described in Section 7.1 of this Agreement.

                    "Executive Officers" means Jeffrey I. Friedman, Susan
          M. Friedman, Larry E. Wright and Louis E. Vogt.

                    "Extraordinary Disposition" means, with respect to
          Borrower, the sale, lease, transfer or other disposition of
          assets, other than assets transferred or disposed in the ordinary
          course of business, whether by way of the sale of assets or the
          sale of stock or other rights in which Borrower has any ownership
          interest, and whether in one transaction or a series of related
          or unrelated transactions.

                    "Face Amount" means, as to any Letter of Credit which
          is issued or to be issued pursuant to Section 2.14 of this
          Agreement, the maximum amount which is available at the time of
          such determination to be drawn under such Letter of Credit.

                    "Facility Fee" means an annual fee, payable in advance
          to the Managing Agent for the ratable benefit of the Banks on the
          Closing Date and on each anniversary of such date during the
          pendency of this Agreement, in an amount determined by
          multiplying the Maximum Commitment in effect as of such date by
          fifteen one-hundredths of one percent (0.15%).

                    "Floating Rate Debt" means any Indebtedness for
          Borrowed Money which bears interest at a rate or rates which
          fluctuate or may fluctuate from time to time (whether by
          Borrower's election or by reference to any index) during the
          pendency of such Indebtedness, provided, however, that any such
          Indebtedness as to which the obligor has procured and maintains
          an interest-rate hedging instrument eliminating the risk of
          interest-rate fluctuation shall, to the extent and during the
          term of such hedging instrument, not be considered to be
          "Floating Rate Debt" for the purposes of this Agreement.  For
          purposes of this definition, "interest-rate hedging instrument"
          shall mean an interest-rate hedging instrument with a maturity
          date not less than twelve months after the date such instrument
          is purchased and with a maximum rate of interest not to exceed
          three percentage points in excess of the rate on the Indebtedness
          for which the hedging instrument was procured.

                    "Funded Percentage" means, with respect to each Bank at
          any time, such Bank's share of all Obligations outstanding at
          such time, expressed as a fraction having as a denominator the
          Outstanding Amount at such time and having as a numerator the
          aggregate of (x) such Bank's Pro Rata Share of all Ratable Loans
          and all Letters of Credit and participation interest in Swingline
          Loans then outstanding, and (y) the outstanding principal balance
          at such time of all Competitive Bid Loans advanced by such Bank
          to Borrower.

                    "Generally Accepted Accounting Principles" or "GAAP"
          means generally accepted accounting principles in effect from
          time to time in the United States.  Such accounting principles
          shall be consistently applied at all times during the pendency of
          this Agreement except to the extent that changes in the



                                          23 


          application thereof are required in order to maintain compliance
          with GAAP.

                    "Guaranteed Pension Plan" means any pension plan
          maintained by Borrower or any ERISA Affiliate of Borrower, or to
          which Borrower or any ERISA Affiliate contributes, some or all of
          the benefits under which are guaranteed by the Pension Benefit
          Guaranty Corporation within the U.S. Department of Labor.

                    "Hazardous Substances" means (i) any hazardous wastes
          and/or toxic chemicals, materials, substances or wastes as
          defined by or for the purposes of any of the Environmental Laws;
          (ii) any "oil", as defined by the Clean Water Act, as amended
          from time to time, and regulations promulgated thereunder
          (including crude oil or any fraction thereof and any petroleum
          products or derivatives thereof); (iii) any substance, the
          presence of which is prohibited, regulated or controlled by any
          other applicable federal or state or local laws, regulations,
          statutes or ordinances now in force or hereafter enacted relating
          to waste disposal or environmental protection with respect to the
          exposure to, or manufacture, possession, presence, use,
          generation, storage, transportation, treatment, release,
          emission, discharge, disposal, abatement, cleanup, removal,
          remediation or handling of any such substances; (iv) any asbestos
          or asbestos-containing materials, polychlorinated biphenyls
          ("PCBs") in the form of electrical equipment, fluorescent light
          fixtures with ballasts, cooling oils or any other form, urea
          formaldehyde, atmospheric radon at levels over four picocuries
          per cubic liter; (v) any solid, liquid, gaseous or thermal
          irritant or contaminant, such as smoke, vapor, soot, fumes,
          alkalis, acids, chemicals, pesticides, herbicides, sewage,
          industrial sludge or other similar wastes; (iv) industrial, 
          nuclear or medical by-products; and (vii) any underground storage
          tank(s).

                    "Head Office" means, in relation to the Managing Agent,
          the head office of National City Bank, located at 1900 East Ninth
          Street, Cleveland, Ohio  44101-0756 or such other office as may
          be designated as such by written notice to Borrower and the Banks
          by National City Bank or any successor Managing Agent.

                    "Indebtedness" means, in relation to any Person, at any
          time, all of the obligations of such Person which, in accordance
          with GAAP, would be classified as indebtedness upon a balance
          sheet (including any footnote thereto) of such Person prepared at
          such time, and in any event shall include, without limitation:

                    (i)  all indebtedness of such Person arising or
                    incurred under or in respect of (A) any guaranties
                    (whether direct or indirect) by such Person of the
                    indebtedness, obligations or liabilities of any other
                    Person, or (B) any endorsement by such Person of any of
                    the indebtedness, obligations or liabilities of any
                    other Person (otherwise than as an endorser of
                    negotiable instruments received in the ordinary course
                    of business and presented to commercial banks for
                    collection of deposit), or (C) the discount by such
                    Person, with recourse to such Person, of any of the
                    indebtedness, obligations or liabilities of any other
                    Person;

                    (ii) all indebtedness of such Person arising or
                    incurred under or in respect of any agreement,


                                          24  


                    contingent or otherwise made by such Person (A) to
                    purchase any indebtedness of any other Person or to
                    advance or supply funds for the payment or purchase of
                    any indebtedness of any other Person or (B) to
                    purchase, sell or lease (as lessee or lessor) any
                    property, products, materials or supplies or to
                    purchase or sell transportation or services, primarily
                    for the purpose of enabling any other Person to make
                    payment of any indebtedness of such other Person or to
                    assure the owner or holder of such other Person's
                    indebtedness against loss, regardless of the delivery
                    or non-delivery of the property, products, materials or
                    supplies or the furnishing or non-furnishing of the
                    transportation or services, or (C) to make any loan,
                    advance, capital contribution or other investment in
                    any other Person for the purpose of assuring a minimum
                    equity, asset base, working capital or other balance
                    sheet condition for or as at any date, or to provide
                    funds for the payment of any liability, dividend or
                    stock liquidation payment, or otherwise to supply funds
                    to or in any manner invest in any other Person;

                    (iii)  all indebtedness, obligations and liabilities
                    secured by or arising under or in respect of any Lien,
                    upon or in Property owned by such Person, even though
                    such Person has not assumed or become liable for the
                    payment of such indebtedness, obligations and
                    liabilities;

                    (iv)  all indebtedness created or arising under any
                    conditional sale or other title retention agreement
                    with respect to Property acquired by such Person, even
                    though the rights and remedies of the seller or lender
                    (or lessor) under such agreement in the event of
                    default are limited to repossession or sale of such
                    Property; 

                    (v)  all indebtedness arising or incurred under or in
                    respect of any Contingent Obligation; and

                    (vi) to the extent not included in Interest Expense,
                    all obligations to make payments under any interest
                    rate protection agreements, foreign currency exchange
                    agreements, commodity purchase or option agreement or
                    other interest, exchange rate or commodity price
                    hedging agreement.

                    "Indebtedness for Borrowed Money" means at any time,
          all Indebtedness (i) in respect of any money borrowed (including
          pursuant to this Agreement); (ii) under or in respect of any
          Contingent Obligation (whether direct or indirect) of any money
          borrowed; (iii) evidenced by any loan or credit agreement,
          promissory note, debenture, bond, guaranty or other similar
          written obligation to pay money; or (iv) arising under leases
          which, in accordance with GAAP, should be reflected as
           indebtedness on a balance sheet.

                    "Interest Expense" means, for any period, the aggregate
          interest payable by Borrower and all of Borrower's Consolidated
          Subsidiaries during such period, determined in accordance with
          GAAP.




                                          25


                    "Interest Period" means:  (a)  For each LIBOR Rate Loan
          (including both Ratable LIBOR Rate Loans and all Competitive Bid
          Loans), the period commencing on the Draw Date for such Loan and
          ending one, two, three, four or six months thereafter; (b) for
          each Prime Rate Loan, the period commencing on the Draw Date for
          such Loan and ending on the earliest of (i) the date on which
          such Loan is repaid; (ii) the date on which such Loan is
          converted to a Ratable LIBOR Rate Loan pursuant to this
          Agreement, or (iii) the Termination Date; (c) for each Absolute
          Rate Loan, the Absolute Interest Period, and (d) for each
          Competitive Bid Loan, including but not limited to Absolute Rate
          Competitive Bid Loans, the period not to exceed one hundred
          eighty (180) days requested by Borrower in a Competitive Bid Loan
          Request and confirmed by a Bank in a Competitive Bid Quote which
          is accepted by Borrower.  No Interest Period in any case may
          extend beyond the Termination Date.  Any Interest Period which
          would otherwise end on a day which is not a Business Day shall
          end on the next succeeding Business Day (unless such Business Day
          falls in another calendar month, in which case such Interest
          Period shall end on the Business Day immediately preceding such
          day); each Interest Period in respect of a LIBOR Rate Loan or a
          Competitive Bid Loan which begins on the last Business Day of a
          calendar month (or on a day for which there is no numerically
          corresponding day in the calendar month at the end of such
          Interest Periods) shall end on the last Business Day of a
          calendar month.

                    "Investment" means any investment in any other Person
          by stock purchase, capital contribution, loan, advance, guaranty
          of any Indebtedness or creation or assumption of any other
          liability in respect of any Indebtedness of such Person
          (including, without limitation, any liability of any kind
          described in clause (i) or (ii) of the definition of the term
          "Indebtedness" set forth in this Section), or the transfer or
          sale of Property (otherwise than in the ordinary course of the
          business) to any other Person for less than payment in full in
          cash of the transfer or sale price or the fair value thereof
          (whichever of such price or value is higher).

                    "Investment Entity" means any Person in which Borrower
          or any of its Consolidated Subsidiaries, directly or indirectly,
          has an ownership interest, whose financial results are not
          consolidated with those of Borrower and its Consolidated
          Subsidiaries.

                    "Investment Entity Capitalized Income Value" means,
          with respect to any Investment Entity and as of any date, an
          amount equal to its Investment Entity EBITDA on an annualized
          basis, divided by the Capitalization Factor.  For the purposes of
          this provision, Investment Entity EBITDA shall be subject to Pro
          Forma Adjustment to reflect any acquisitions made by such
          Investment Entity during the applicable fiscal period.

                    "Investment Entity Debt Service" means, in respect of
          any Investment Entity and for any fiscal period, all actual
          interest payments and principal payments, including capitalized
          interest but excluding balloon payments of principal, payable
          during such fiscal period by such Investment Entity.

                    "Investment Entity EBITDA" means, with respect to any
          Investment Entity and for any fiscal period, the sum of (a) such
          Investment Entity's Net Income for such period,; plus (b) such
          Investment Entity's Investment Entity Interest Expense for such


                                          26


          period; plus (c) depreciation and amortization for such period
          (but excluding (x) gains or losses from the sale of Property; and
          (y) non-recurring charges and extraordinary items).

                    "Investment Entity Interest Expense" means, for any
          Investment Entity and any period, the aggregate interest payable
          by such Investment Entity for such period, determined in
          accordance with GAAP.

                    "Investment Entity Market Value" means, with respect to
          any Investment Entity and as of any date, the sum of such
          entity's Investment Entity Capitalized Market Value, plus (i)
          fifty percent (50%) of the book value of such Investment Entity's
          Assets Under Development and Raw Land, plus (ii) one hundred
          percent (100%) of the value of all unrestricted and non-pledged
          cash equivalents owned by such Investment Entity (all as of the
          date of determination).

                    "Investment Entity Secured Debt" means, with respect to
          any Investment Entity and as of any date, any Indebtedness for
          Borrowed Money of such Investment Entity which is secured by any
          Lien upon any property or asset, and any judgment lien in excess
          of $250,000 upon any property or asset.

                    "Investment Grade Debt Rating" shall mean Debt Ratings
          from each of Moody's and S&P which are not lower than the Debt
          Ratings for such Rating Agencies on Level 4 of the table of
          Applicable Margins set forth above.

                    "Invitation for Bids" means a written notice, given by
          the Managing Agent to each Bank following the Managing Agent's
          receipt of a proper Competitive Bid Quote Request from Borrower.

                    "Issuance Date" means, in relation to any Letter of
          Credit, the day on which such Letter of Credit is issued or is to
          be issued pursuant to this Agreement.

                    "Issuing Bank", means NCB or its successor as the Bank
          responsible for the issuance of Letters of Credit in accordance
          with Section 2.14.

                    "Late Charge" means with respect to any delinquent
          payment of principal or interest hereunder a fee that is equal to
          the greater of One Hundred and 00/100 Dollars ($100.00) or five
          percent (5.0%) of the delinquent payment, charged to Borrower or
          added to the unpaid balance of the Notes whenever any payment of
          principal or interest is not paid when due.

                    "Legal Requirements" means all applicable laws, rules,
          regulations, ordinances, judgments, orders, decrees, injunctions,
          arbitral awards, permits, licenses, authorizations, directions
          and requirements of all governments, departments, commissions,
          boards, courts, authorities, agencies, and officials and officers
          thereof, that are in effect now or at any time in the future.
                    "Letter of Credit" means any stand-by letter of credit
          issued by the Issuing Bank pursuant to this Agreement.

                    "Letter of Credit Fee" means a fee, payable to the
          Issuing Bank, equal to one-eighth of one percent (0.125%) of the
          Face Amount of each Letter of Credit, payable in advance for the
          issuance of each respective Letter of Credit.



                                          27


                    "Letter of Credit Commission" means a commission,
          payable annually in advance to the Managing Agent for the ratable
          benefit of the Banks, in an amount determined by multiplying the
          Face Amount of each Letter of Credit issued hereunder by the
          LIBOR Margin in effect as at the Issuance Date for such Letter of
          Credit.  The Letter of Credit Commission shall be paid annually
          in respect of each Letter of Credit, with the first year's
          payment being due and payable, in advance, on the Issuance Date
          therefor and subsequent years' payments (each of which shall be
          determined by multiplying the Face Amount of such Letter of
          Credit by the LIBOR Margin then in effect) being due and payable
          in advance on each anniversary thereof so long as such Letter of
          Credit remains outstanding.

                    "Letter of Credit Usage" means, as at the date on which
          the same is determined, the sum of (x) the aggregate of the Face
          Amounts of all Letters of Credit then outstanding, plus (y) the
          aggregate amount of all drawings under Letters of Credit honored
          by the Issuing Bank and not theretofore either reimbursed by
          Borrower or converted into Loans as provided in Section 2.14(e).

                    "Liabilities" means, collectively (x) all indebtedness,
          obligations and other liabilities of Borrower and Borrower's
          Consolidated Subsidiaries, whether matured or unmatured,
          liquidated or unliquidated, direct or indirect, absolute or
          contingent, joint or several, secured or unsecured, arising by
          contract, operation of law or otherwise, classified as
          liabilities in accordance with GAAP on a balance sheet of
          Borrower; and (y) the Consolidated Group Percentage Interest of
          all Investment Entities' indebtedness, obligations and other
          liabilities, whether matured or unmatured, direct or indirect,
          liquidated or unliquidated, absolute or contingent, joint or
          several, secured or unsecured, arising by contract, operation of
          law or otherwise classified as liabilities in accordance with
          GAAP on the balance sheet of such Investment Entities.

                    "LIBOR" means the rate (rounded upward to the next
          highest 1/100 of 1%) obtained by dividing (x) the rate of
          interest per annum determined by the Managing Agent equal to the
          offered rates for deposits in U.S. Dollars of one, two, three,
          four or six-month periods (as the case may be) commencing on the
          first date of the applicable Interest Period for which such rate
          is determined as such rate appears on the Telerate system as of
          11:00 a.m. (London, England time) on the date which is two (2)
          Business Days preceding the first day of such Interest Period,
          for a period comparable to the duration of such Interest Period
          and in an amount comparable to the amount of the LIBOR Rate Loan
          to be outstanding during such Interest Period, by (y) a
          percentage equal to 100% minus the stated maximum rate of all
          reserves required to be maintained against "LIBOR Rate
          liabilities" as specified in Regulation D (or against any other
          category of liabilities which includes deposits by reference to
          which the interest rate on LIBOR Rate Loans or loans is
          determined or any category of extensions of credit or other
          assets which includes loans by a non-United States office of a
          bank to United States residents) on such date to any member bank
          of the Federal Reserve System.

                    "LIBOR Break Funding Costs" means an amount sufficient
          to reimburse each Bank for any and all loss, cost or expense
          actually incurred by such Bank as the result of the occurrence of
          any  LIBOR Break Funding Event, including, without limitation,
          (i) any loss incurred in obtaining, liquidating or reemploying


                                          28


          deposits from third parties, but excluding loss of margin for the
          period after any such prepayment, and (ii) the excess, if any, of
          the amount of interest that otherwise would have accrued on the
          principal amount so paid, prepaid or repaid or not borrowed for
          the period, beginning with the date of such payment, prepayment
          or repayment until the last day of the Interest Period that would
          otherwise have been in effect for such LIBOR Rate Loan, at the
          applicable rate of interest for such LIBOR Rate Loan over the
          amount of interest that otherwise would have accrued on such
          principal amount at a rate per annum equal to the interest
          component of the amount each Bank would have bid in the London
          interbank market for dollar deposits of leading banks in amounts
          comparable to such principal amount and with maturities
          comparable to such period all as determined as of the date of the
          occurrence of the LIBOR Break Funding Event.

                    "LIBOR Break Funding Event" means any of the events or
          occurrences set forth in Sections 2.9(a) or 2.9(b).

                    "LIBOR Rate" means, for each Interest Period applicable
          to each LIBOR Rate Loan, the sum of LIBOR plus the LIBOR Margin
          in effect as of the Draw Date for such Loan.

                    "LIBOR Rate Loan" means a Loan (without regard to
          whether the same is a Ratable Loan or a Competitive Bid Loan)
          which bears interest at the LIBOR Rate.

                    "Licenses and Permits" means all licenses, permits,
          registrations and recordings thereof and all applications for
          such licenses, permits and registrations now owned or hereafter
          acquired by Borrower and required or necessary for the business
          operations of Borrower.

                    "Lien" means any lien, mortgage, pledge, security
          interest, charge or other encumbrance of any kind, including any
          conditional sale or other title retention agreement, any lease in
          the nature thereof, and any agreement to give any security
          interest.

                    "Loan Documents" mean this Agreement, the Notes and any
          other agreement, instrument, certificate or document now or
          hereafter executed in connection with or pursuant to this
          Agreement, including without limitation the Letter of Credit
          applications submitted to the Managing Agent by the Borrower
          pursuant to Section 2.14(a) of this Agreement, as the same may be
          modified, amended or supplemented from time to time.

                    "Loans" mean, collectively, the revolving credit loans,
          (each, singly, a "Loan"), including both all Ratable Loans and
          all Swingline Loans and Competitive Bid Loans, made or to be made
          to Borrower pursuant to this Agreement.

                    "Managing Agent" means NCB, acting in such capacity for
          the Banks under the Loan Documents pursuant to this Agreement,
          and includes (where the context so admits) any other Person or
          Persons succeeding to such functions in accordance with
          Article 8, below.

                    "Market Value" means, as of any date, an amount equal
          to the sum of (i) Borrower's Capitalized Income Value, plus (ii)
          fifty percent (50%) of the book value of Borrower's Assets Under
          Development and Raw Land, plus (iii) one hundred percent (100%)
          of the value of all unrestricted and non-pledged cash equivalents


                                          29


          owned by Borrower (all as of the date of determination of Market
          Value).

                    "Maximum Commitment" means the lesser of (i) Two
          Hundred Fifty Million Dollars ($250,000,000) or (ii) the sum of
          the Credit Commitments.

                    "Moody's" means Moody's Investors Service, Inc. and its
          successors. 

                    "Multiemployer Plan" means a "multiemployer plan" as
          defined in Section 4001(a) (3) of ERISA which is maintained for
          employees of Borrower or any ERISA Affiliate of Borrower.
                    "Net Income" means the net income of Borrower and
          Borrower's Consolidated Subsidiaries as computed in accordance
          with GAAP, as reported in Borrower's most recent report on Forms
          10-Q or 10-K, as filed with the SEC.

                    "Net Worth" means, as of any date, Market Value as of
          such date less the aggregate of all then-outstanding Liabilities
          of Borrower and its Consolidated Subsidiaries.

                    "Notes" means, collectively, the promissory notes of
          Borrower in the form of Exhibit D (the "Ratable Notes") and
          Exhibit D-1 (the "Competitive Bid Notes"), which are to be dated,
          executed and delivered to the Banks by Borrower on the date
          hereof.  "Note" shall mean any one of the Notes, together with
          any amendment, modification, supplement or renewal thereof and
          with any instruments given in substitution or replacement
          thereof.

                    "Obligations" means, collectively, all of the
          indebtedness, obligations and liabilities existing on the date
          hereof or arising from time to time hereafter, whether direct,
          indirect, absolute, contingent, joint or several, matured or
          unmatured, liquidated or unliquidated, secured or unsecured,
          arising by contract, operation of law or otherwise, of Borrower
          to the Managing Agent or any one or more of the Banks (i) in
          respect of the Loans made, or the Letters of Credit issued,
          pursuant to this Agreement; or (ii) under or in respect of any
          one or more of the Loan Documents. Obligations shall also
          include, without limitation, all interest, charges and other fees
          payable hereunder (or under any of the Loan Documents) by
          Borrower, or due hereunder (or under any of the Loan Documents)
          from Borrower to the Managing Agent or any one or more of the
          Banks from time to time, together with all costs and expenses
          referred to in Section 9.5 herein.

                    "Outstanding Amount" means, at any time, the aggregate
          of (x) the principal balance of all Ratable Loans, Swingline
          Loans and Competitive Bid Loans then outstanding hereunder, plus
          (y) the Face Amount of all Letters of Credit then outstanding
          hereunder, plus (z) the amount of any draw or disbursement made
          under any Letter of Credit which Borrower does not convert into a
          Loan or otherwise reimburse to the Issuing Bank as and when
          required by Section 2.14, below.  Notwithstanding the foregoing
          to the contrary, the principal balance of any Competitive Bid
          Loans which may be outstanding from time to time shall be
          excluded from the Outstanding Amount solely for the purpose of
          calculating the amount of the Commitment Fee.




                                          30


                    "Participation Percentage" means, in relation to a
          particular Bank, the percentage set forth with respect to such
          Bank on Schedule 1.

                    "Payment Authorization" means the form substantially in
          the form of attached Exhibit E, executed by Borrower and
          delivered to Managing Agent notifying Managing Agent of any
          payment by Borrower hereunder or under the Notes, and if
          appropriate, authorizing Managing Agent to debit one or more
          designated accounts of Borrower for such payment amount.

                    "Person" shall include an individual, company,
          corporation, association, partnership, joint venture,
          unincorporated trade or business enterprise, trust, estate, or
          any other legal entity, or a government (Federal, state or
          local), court, arbitrator or any agency, instrumentality or
          official of the foregoing.

                    "Preferred Stock" means any form of security which has
          a preferential dividend return and ownership priority over the
          common stock of Borrower and is classified as shareholders'
          equity or capital stock of Borrower in accordance with GAAP.

                    "Prime Rate" means the rate of interest as in effect
          from time to time of the Managing Agent as its prime rate at its
          Head Office, without regard to whether the Managing Agent shall
          at times lend to other borrowers at lower rates of interest; if
          there is no such prime rate, then such other rate as may be
          substituted by the Managing Agent for its Prime Rate.

                    "Prime Rate Loan" means a Loan which bears interest at
          the Adjusted Prime Rate.

                    "Property" means all types of real, personal, tangible,
          intangible or mixed property.

                    "Pro Forma Adjustment" means, with respect to EBITDA or
          Investment Entity EBITDA in respect of any fiscal quarter, an
          adjustment to such EBITDA to reflect any acquisitions made by
          Borrower or such Investment Entity during such fiscal quarter,
          assuming (i) the lesser of ninety percent (90%) or actual
          occupancy, (ii) that such acquisition occurred on and as of the
          initial day of such fiscal quarter, and (iii) that one hundred
          percent of the cost of the property so acquired was financed by
          Indebtedness unless Borrower shall provide the Managing Agent
          with evidence to the contrary.

                    "Pro Rata Share" means, in relation to any Ratable
          Loan, any Letter of Credit or any other item (other than
          Swingline Loans and Competitive Bid Loans) arising under this
          Agreement, the share of any Bank in such item, which shall be in
          the same proportion which the aggregate amount of all of the
          Obligations owing to such Bank with respect to such item at such
          time shall bear to the aggregate amount of all of the Obligations
          then owing to all of the Banks with respect to such item, net of
          any and all charges or fees due and payable to the Managing Agent
          under the Loan Documents.

                    "Ratable Loans" means those Loans, other than
          Competitive Bid Loans and Swingline Loans, made or to be made to
          Borrower under this Agreement.  Prime Rate Loans which are
          Ratable Loans are sometimes referred to herein as "Ratable Prime



                                          31


          Rate Loans"; LIBOR Rate Loans which are Ratable Loans are
          sometimes referred to as "Ratable Competitive Bid Loans".

                    "Rate Option" means the Prime Rate or the LIBOR Rate.

                    "Rating Agency" means Moody's and/or S&P.

                    "Raw Land" means all parcels of unimproved and
          undeveloped real property owned by Borrower, any Consolidated
          Subsidiary or any Investment Entity.  For the purposes of this
          Agreement, Raw Land shall, at any time, be valued at (i) the
          then-current book value thereof (as determined in accordance with
          GAAP) for all Raw Land owned by Borrower or any Consolidated
          Subsidiary; and (ii) the applicable Consolidated Group Percentage
          Interest of the then-current book value of all Raw Land owned by
          an Investment Entity.

                    "Real Estate Project" means any income producing,
          multi-family apartment project owned by Borrower, any
          Consolidated Subsidiary or any Investment Entity.

                    "REIT" means a qualified real estate investment trust,
          as defined in the Code.

                    "Request For Advance" means the form, substantially in
          the form of attached Exhibit F, to be executed by Borrower and
          delivered to the Managing Agent, requesting an advance of Loan
          proceeds hereunder, and, among other items, notifying the
          Managing Agent of Borrower's intended use of such Loan proceeds.

                    "Request for Issuance of Letter of Credit" means the
          form, substantially similar to that which is attached hereto as
          Exhibit G, to be executed by Borrower and delivered to the
          Managing Agent, requesting the issuance of a Letter of Credit and
          providing the information required in connection therewith by
          Section 2.14(a), below.

                    "Required Banks" means (a) until such time as the
          Credit Commitments have been terminated as contemplated by this
          Agreement, those Banks having at least sixty-six and two-thirds
          percent (66-2/3%) of the aggregate of all Banks' Credit
          Commitments; and (b) after the termination of the Credit
          Commitments, those Banks having at least sixty-six and two-thirds
          percent (66-2/3%) of the aggregate of the Outstanding Amount.

                    "S&P" means Standard & Poor's Ratings Group, and its
          successors.

                    "SEC" means the Securities and Exchange Commission or
          any successor agency.

                    "Securities" means any stock, shares, voting trust
          certificates, bonds, debentures, notes, or other evidences of
          indebtedness, secured or unsecured, convertible, subordinated or
          otherwise, or in general any instruments commonly known as
          "securities" or any certificates of interest, shares or
          participation in temporary or interim certificates for the
          purchase or acquisition of, or any right to subscribe to,
          purchase or acquire, any of the foregoing.

                    "Secured Debt" means any Indebtedness for Borrowed
          Money which is secured by any Lien upon any property or asset,



                                          32


          and any judgment lien in excess of $250,000 upon any property or
          asset.

                    "Service EBITDA" means, for any fiscal period of
          Borrower, that portion of Borrower's EBITDA which is attributable
          (in accordance with GAAP) to payments received by Borrower, or
          from any of its Consolidated Subsidiaries, for the performance of
          services.

                    "Subsidiary" means (i) any corporation in which
          Borrower (or a Subsidiary of Borrower) owns at least a majority
          of the Securities having voting power for the election of
          directors; or (ii) any partnership, association, joint venture or
          similar business organization in which Borrower (or any
          Subsidiary of Borrower) owns at least fifty percent (50%) of the
          ownership interest having voting power for the entity so
          controlled.

                    "Swingline Lender" means the Managing Agent, in its
          capacity as a Bank.

                    "Swingline Loans" means loans, the aggregate
          outstanding principal balance of which may not exceed Five
          Million Dollars ($5,000,000) at any time, made by the Swingline
          Lender in accordance with Section 2.16.

                    "Termination Date" means the earliest of (i)
          June 30, 2001, subject to extension in accordance with Section
          2.1(b), below; or (ii) the date upon which the entire outstanding
          principal balance of the Notes shall become due pursuant to the
          provisions hereof (whether as a result of acceleration by the
          Managing Agent or the Required Banks or otherwise); (iii) the
          date on which the Credit Commitments shall terminate by virtue of
          Borrower's exercise of its option under Section 2.15, below; or
          (iv) the date upon which the Credit Commitments terminate
          pursuant to Section 7.2 hereof.

                    "Unencumbered Assets Capitalized Income Value" means,
          as of any date, an amount equal to Unencumbered EBITDA on an
          annualized basis, divided by the Capitalization Factor.  For the
          purposes of this provision, Borrower's EBITDA shall be subject to
          adjustment, in accordance with the Pro Forma Adjustment, to
          reflect any acquisitions made during the applicable fiscal
          period.

                    "Unencumbered Debt" means all Indebtedness for Borrowed
          Money which is not Secured Debt.

                    "Unencumbered EBITDA" means, for any fiscal quarter of
          Borrower and its Consolidated Subsidiaries, the aggregate of
          Service EBITDA for such period (not to exceed $625,000) and that
          portion of EBITDA which is attributable, under GAAP, to earnings
          derived from Unencumbered Real Estate Assets.

                    "Unencumbered Real Estate Assets" means all real estate
          projects (including Raw Land, Assets Under Development and
          income-producing apartment projects) owned by Borrower or any of
          Borrower's Wholly Owned Subsidiaries which are not subject to any
          Lien securing an obligation for the payment of money (other than
          real property taxes and assessments which are not then due and
          payable and Liens in favor of mechanics or material vendors which
          are being contested in accordance with the terms of this
          Agreement).  Real estate projects (including Raw Land, Assets


                                          33


          Under Development and income-producing apartment projects) which
          are subject to ground leases and as to which Borrower or any of
          Borrower's Wholly Owned Subsidiaries acquires the ground
          leasehold interest after the date of this Agreement shall not be
          considered to be Unencumbered Real Estate Assets.

                    "Unencumbered Suites" means, for any fiscal period and
          for any party, the number of Apartment Suites located in
          Unencumbered Real Estate Assets which are income-producing
          apartment projects owned by such party as of the final day of
          such fiscal period.

                    "Wholly Owned Subsidiary" of a Person means (i) any
          Subsidiary of which such Person (and/or one or more wholly owned
          Subsidiary of such Person) shall own or control, directly or
          indirectly, all of the outstanding voting securities; or (ii) any
          partnership, association or similar business organization of
          which such person (and/or one or more Wholly Owned Subsidiaries
          of such Person) shall own or control all of the outstanding
          voting Securities or ownership interests.


                                      ARTICLE 2.
                           THE LOANS AND LETTERS OF CREDIT

                    Section 2.1  Commitments.  (a) Each Bank, severally and
          not jointly, agrees, upon the terms and subject to the conditions
          contained in this Agreement, to make Ratable Loans to Borrower
          and to issue, or participate as hereinafter provided in the
          issuance of, the Letters of Credit for Borrower, from time to
          time prior to the Termination Date.  The principal amount of each
          Bank's Pro Rata Share of each Ratable Loan shall be equal to such
          Bank's Participation Percentage of the aggregate principal amount
          of such Loan, and the amount of each Bank's Pro Rata Share in
          each Letter of Credit shall be equal to such Bank's Participation
          Percentage of the Face Amount of such Letter of Credit.

                    (b)  Provided (i) that there is not then (or on the
          commencement of the extension term resulting from Borrower's
          exercise of the extension option set forth in this
          Section 2.1(b)) any Event of Default hereunder or under any other
          Loan Document, and no circumstance which would, with the passing
          of time or delivery of notice (or both) constitute such an Event
          of Default; and (ii) that Borrower shall then, and upon the
          commencement of the extension term resulting from Borrower's
          exercise of the extension option set forth in this Section
          2.1(b), have Investment Grade Debt Ratings issued by Moody's and
          S&P, Borrower may extend the Termination Date for a period of one
          (1) year by providing the Managing Agent and each Bank with
          written notice of its election to do so not more than one hundred
          twenty (120) nor less than sixty (60) days prior to the first
          anniversary of the Commencement Date.  Thereafter, and provided
          that the Termination Date has theretofore been extended as
          provided in this Section 2.1(b), Borrower may extend the
          Termination Date (as extended as aforesaid) for successive and
          consecutive periods of one (1) year each, provided, as to each
          instance (x) that Borrower shall exercise such option by
          providing the Managing Agent and each Bank with written notice of
          its election to do so not earlier than one hundred twenty (120)
          days, nor later than sixty (60) days prior to the first (or, if
          the Termination Date has theretofore been extended to permit the
          same, each successive) anniversary of the Closing Date; and


                                          34 


          (y) that the Managing Agent and all of the Banks shall elect, in
          their discretion, to consent to each such extension of the
          Termination Date.

                    Section 2.2  Making the Ratable Loans.  (a) Each Bank
          will, subject to the terms and conditions of this Agreement, make
          an amount equal to its Participation Percentage in each Ratable
          Loan available to the Managing Agent for disbursement to Borrower
          at such times and in such amounts as shall be requested by
          Borrower in compliance with Section 2.13, below.  Borrower may,
          subject to the terms and conditions of this Agreement, borrow on
          a revolving basis from the Banks from time to time until the
          Termination Date sums, the outstanding amount of which shall not,
          when added to the Letter of Credit Usage and the outstanding
          principal balance of all Swingline Loans and Competitive Bid
          Loans, exceed the Maximum Commitment at any time.  Each Ratable
          Loan shall be in an amount equal to or greater than One Million
          Dollars ($1,000,000.00); provided, however, (i) with regard to
          each Bank individually, the aggregate sum of each such Bank's Pro
          Rata Share of all outstanding Ratable Loans and its Pro Rata
          Share of the Letter of Credit Usage shall not exceed such Bank's
          Credit Commitment; and (ii) with regard to the Banks
          collectively, the aggregate sum of all Loans and the Letter of
          Credit Usage shall not exceed the Maximum Commitment.  The
          Borrower may borrow, repay and reborrow hereunder on and after
          the date hereof until the Termination Date, subject to the terms,
          provisions and limitations set forth herein. 

                    (b)  The absolute and unconditional obligation of
          Borrower to repay to each Bank such Bank's respective Pro Rata
          Share of the principal of each Ratable Loan and the interest
          thereon, as well as Borrower's absolute and unconditional
          obligation to repay such Bank's respective Pro Rata Share of the
          Face Amount of each Letter of Credit together with any

          disbursements made under any Letter of Credit, as and when
          required as hereinafter provided, shall be evidenced by a
          separate Note for each Bank in the amount of its respective
          Credit Commitment.  All payments under the Notes shall be made to
          the Managing Agent at its Head Office, for the account of the
          Banks; the Managing Agent shall allocate all payments received
          from Borrower among all Banks in accordance with each Bank's Pro
          Rata Share.

                    Section 2.3  Competitive Bid Loans.  
                         (a) General Provisions.  

                              (i)  In addition to Ratable Loans and
          Swingline Loans made pursuant to this Agreement, but subject to
          the other terms and conditions hereof (including, without
          limitation, the requirement that the aggregate Outstanding Amount
          -- which for the purposes of this Section 2.3 shall include the
          outstanding principal amount of all Competitive Bid Loans and
          Swingline Loans -- not exceed the Maximum Commitment at any
          time), and provided (x) that there is then no Default or Event of
          Default hereunder; and (y) Borrower shall then have Investment
          Grade Debt Ratings from Moody's and S&P, Borrower may from time
          to time  prior to the Termination Date request the Banks to make
          offers to make Competitive Bid Loans to Borrower.  Each Bank may
          (but shall not be obligated to) make such offers in response to
          Borrower's written request therefor given in accordance with the
          procedures set forth herein.  Borrower may (but shall not be
          obligated to) accept such offers in the manner provided in this


                                          35


          Section 2.3.  All of the Competitive Bid Loans shall be evidenced
          by the Competitive Bid Notes.

                              (ii)  No Competitive Bid Loan shall affect or
          limit the obligation of the Bank making such Competitive Bid Loan
          to continue to fund its entire Participation Percentage of all
          Ratable Loans and to participate in the issuance of all Letters
          of Credit thereafter made or issued hereunder, notwithstanding
          that the aggregate of (x) the outstanding principal balance of
          all Competitive Bid Loans made by such Bank, and (y) such Bank's
          Pro Rata share of all Ratable Loans and all Letters of Credit
          made or issued hereunder may exceed such Bank's Credit
          Commitment.  The aggregate principal balance of all Competitive
          Bid Loans which may be outstanding at any time shall not exceed
          fifty percent (50%) of the Maximum Commitment.  Borrower may not
          make more than three (3) requests for Competitive Bid Loans in
          any period of thirty (30) consecutive days, or more than one (1)
          request for Competitive Bid Loans in any ten (10) day period
          (without regard to whether such requests are made by means of
          Competitive Bid Quote Requests to the Managing Agent or Direct
          Invitations to Bid issued by Borrower to all of the Banks).  Each
          request made by Borrower for Competitive Bid Loans (whether by
          means of its Competitive Bid Quote Requests to the Managing Agent
          or Direct Invitations to Bid issued directly to all of the Banks)
          may invite offers to bid for as many as three (3) Competitive Bid
          Loans; each such request may specify particular amounts and
          Interest Periods for the Competitive Bid Loans contemplated
          thereby, or, subject to the other requirements of this Section
          2.3, may establish desired ranges of principal amounts and
          Interest Periods for which Borrower thereby solicits offers from
          the Banks.  Except as specifically set forth in this
          Section 2.3(a)(ii), no Competitive Bid Loan may be continued at
          the expiration of its stated Interest Period; all Competitive Bid
          Loans shall, if not repaid at the end of the applicable Interest
          Period, either be replaced by a Ratable Loan or by another
          Competitive Bid Loan made in accordance with and subject to the
          terms and conditions of this Agreement.  If, at the time of the
          expiration of the Interest Period for any Competitive Bid Loan,
          any Default or Event of Default shall exist hereunder, and if the
          Required Banks shall not elect (notwithstanding such Default or
          Event of Default) to make a Ratable Loan to replace such expiring
          Competitive Bid Loan, then, provided that at such time (x) the
          Credit Commitments have not been terminated in accordance with
          Section 7.2(a), below, and (y) the Obligations have not been
          accelerated in accordance with Section 7.2(b), below, the Bank
          (or Banks) which funded such Competitive Bid Loan shall
          automatically be deemed to have elected to replace such expiring
          Competitive Bid Loan with another Competitive bid Loan in the
          identical principal amount, at an interest rate not to exceed the
          Default Interest Rate and having an Interest Period commencing as
          of the final day of the Interest Period for such expiring
          Competitive Bid Loan and concluding on the date on which the
          Default or Event of Default at issue is cured or waived by the
          Required Banks and such Competitive Bid Loan is replaced by a
          Ratable Loan or by another Competitive Bid Loan made in
          accordance with and upon and subject to the terms and conditions
          set forth in this Agreement.

                         (b) Funding the Competitive Bid Loans.  Each Bank  
          making a Competitive Bid Loan shall place at the disposal of the
          Managing Agent, at the Managing Agent's Head Office not later
          than 2:00 p.m., Cleveland time, on the Draw Date for such
          Competitive Bid Loan, the principal amount of such Competitive


                                          36


          Bid Loan in immediately available and freely transferrable funds. 
          If such Bank also has an outstanding Competitive Bid Loan that is
          payable on such Draw Date, Borrower agrees that such Bank may
          (with prior notice to the Managing Agent) fund only the amount of
          any net increase between the principal balance of the outstanding
          Competitive Bid Loan and the new Competitive Bid Loan, in which
          event the outstanding Competitive Bid Loan shall be deemed to
          have been funded to Borrower on the terms of the new Competitive
          Bid Loan.  Provided that the conditions precedent applicable to
          such Loan under Article 3 of this Agreement shall be satisfied as
          at such Draw Date, the Managing Agent shall disburse the proceeds
          of such Competitive Bid Loan to Borrower at the time and in the
          manner provided at Section 2.13 of this Agreement.

                         (c)  Competitive Bid Loans Administered by
          the Managing Agent.  

                              (i)  If Borrower elects to have the Managing
          Agent administer the solicitation and acceptance of offers to
          make Competitive Bid Loans, Borrower shall provide the Managing
          Agent with written notice of such election, accompanied by
          Borrower's completed Competitive Bid Quote Request, by telecopy
          for the Managing Agent's receipt not later than (x) 9:00 a.m.,
          Cleveland time, at least five (5) Business Days before the
          proposed Draw Date for each Competitive Bid LIBOR Rate Loan so
          requested; and (y) 9:00 a.m., Cleveland time, at least one (1)
          Business Day before the proposed Draw Date for each Absolute Rate
          Loan so requested.  Each  Competitive Bid Quote Request submitted
          by Borrower shall specify:

                                   (1)  the proposed Draw Date and Interest
               Period for each Competitive Bid Loan so requested; 

                                   (2)  the requested principal amount of
               each such Competitive Bid Loan, which shall be in whole
               multiples of One Million Dollars ($1,000,000) and shall in
               no case be less than Five Million Dollars ($5,000,000); or
               the desired range of principal amounts (subject in each case
               to the foregoing requirement) and Interest Periods for which
               Borrower thereby solicits bids from the Banks; and

                                   (3)  whether the Competitive Bid Quotes
               so requested are for Competitive Bid LIBOR Rate Loans or for
               the Absolute Rate Loans.

          The Managing Agent shall reject any Competitive Bid Quote Request
          which does not comply in all material respects with the form of
          Competitive Bid Quote Request appended as Exhibit B or which is
          not given as and when provided above; such rejection shall be
          confirmed by written notice from the Managing Agent to Borrower
          by telecopy promptly after it occurs.

                              (ii)  Not later than 1:00 p.m., Cleveland
          time, on the same Business Day on which it receives a proper
          Competitive Bid Quote Request from Borrower, the Managing Agent
          shall provide each Bank, by telecopy, with an Invitation for Bids
          consistent with the Competitive Bid Quote Request to which it
          pertains, reflecting Borrower's request to each Bank for its
          submission of a Competitive Bid Quote responsive to such
          Competitive Bid Quote Request.  Each Bank may, in its discretion


                                          37


          (but shall have no obligation to), submit its Competitive Bid
          Quote in response to such Invitation in accordance with the
          procedure set forth herein.  Each Competitive Bid Quote shall be
          furnished to the Managing Agent, by telecopy, not later than
          1:00 p.m. Cleveland time at least four (4) Business Days before
          the proposed Draw Date for each requested Competitive Bid LIBOR
          Rate Loan or 10:00 A.M., Cleveland time, on the proposed Draw
          Date for each requested Absolute Rate Loan (or such earlier time
          as Borrower and the Managing Agent may agree).  Notwithstanding
          the foregoing to the contrary, as to each Competitive Bid Loan
          procedure which is administrated by the Managing Agent and for so
          long as NCB shall serve as the Managing Agent hereunder, NCB may,
          in its capacity as a Bank, submit Competitive Bid Quotes only by
          providing Borrower with written notice of its election to do so,
          along with its Competitive Bid Quote, by telecopy, at least one-
          half hour before the relevant deadline for submission of
          Competitive Bid Quotes by the other Banks.  All Competitive Bid
          Quotes shall be irrevocable once given, provided, however, that
          any Bank which submits a Competitive Bid Quote which contains a
          manifest error may supplement such Competitive Bid Quote at any
          time prior to the Managing Agent's transmission of its written
          notice to Borrower describing the Competitive Bid Quotes received
          by the Managing Agent and including such original Competitive Bid
          Quote by providing the Managing Agent, by telecopy, with a
          corrective Competitive Bid Quote (a "Corrective Quote") otherwise
          in accordance with the foregoing criteria, together with express
          written notice that such Corrective Quote is submitted for the
          purpose of correcting a manifest error in such Bank's original
          Competitive Bid Quote. 

                              (iii)  Each Competitive Bid Quote shall be
          substantially in the form attached hereto as Exhibit A, shall
          identify the Bank making such quote, shall constitute an offer by
          the Bank submitting such Competitive Bid Quote to make a
          Competitive Bid Loan to Borrower in the principal amount, for the
          Interest Period or Interest Periods and at the Competitive LIBOR
          Bid Rate or the Absolute Rate set forth therein (or in such
          lesser principal amount as may result from apportionment by the
          Managing Agent as hereinafter provided), and shall specify the
          following additional information:

                                   (1)  the proposed Draw Date and the
                    proposed Interest Period for each Competitive Bid Loan
                    contemplated thereby (which shall in each case
                    correspond to those requested in the relevant
                    Invitation for Bids); 

                                   (2)  the principal amount of the
                    Competitive Bid Loan for which such offer is being
                    made, which amount (x) shall be an integral multiple of
                    One Million Dollars ($1,000,000) and not less than Five
                    Million Dollars ($5,000,000), and (y) may not exceed
                    the principal amount of the Competitive Bid Loans
                    requested in Borrower's Competitive Bid Quote Request; 

                                   (3)  the minimum amount, if any, of the
                    Competitive Bid Loan or Loans which may be accepted by
                    Borrower; and

                                          38  


                                   (4)  the Competitive LIBOR Bid Rate or
                    the Absolute Rate, as applicable, for each such
                    Competitive Bid Loan.

          The Managing Agent shall reject Competitive Bid Quotes which are
          submitted after the applicable deadline as set forth above, which
          fail to include all of the information required above, which
          include additional or different terms than those requested in the
          applicable Invitation for Bids or which deviate in any fashion
          from the form of Competitive Bid Quote (by addition of qualifying
          language or otherwise) attached hereto as Exhibit A.  The
          Managing Agent shall not disclose the contents of any Bank's
          Competitive Bid Quote to any other Bank prior to the Managing
          Agent's receipt of Borrower's Competitive Bid Borrowing Notice.

                              (iv) At or before 5:00 p.m., Cleveland time,
          at least four (4) Business Days before the proposed Draw Date for
          each Competitive Bid LIBOR Rate Loan, or 10:30 a.m., Cleveland
          time, on the Draw Date for each Absolute Rate Loan for which the
          Managing Agent shall have received timely and proper Competitive
          Bid Quotes (or Corrective Quotes) submitted in accordance with
          the foregoing procedures, the Managing Agent shall provide
          Borrower with written notice thereof, by telecopy.  Such notice
          shall describe the aggregate principal amount of Competitive Bid
          Loans for which offers have been received for each Interest
          Period for which Competitive Bid Loans were requested in the
          relevant Bid Request and the respective principal amounts and
          Competitive LIBOR Bid Rates or Absolute Rates so offered.

                              (v) Borrower may accept offers to make
          Competitive Bid Loans only by providing the Managing Agent with
          written notice, by telecopy, of its election to do so not later
          than (i) 11:00 a.m., Cleveland time, at least three (3) Business
          Days before the proposed Draw Date for any Competitive Bid Loan,
          or (ii) 11:00 a.m., Cleveland time, on the Draw Date for any
          Absolute Rate Loan.  Such notice (a "Competitive Bid Borrowing
          Notice") shall specify the aggregate principal amount of the
          offers so accepted and the applicable interest rate therefor. 
          Borrower's failure to provide its Competitive Bid Borrowing
          Notice as and when specified in the preceding sentence shall
          constitute Borrower's unqualified rejection of all such offers. 
          Borrower may accept any proper Competitive Bid Quote provided
          that:

                                   (1)  the aggregate principal amount of
               all Competitive Bid Loans to be disbursed on a specified
               Draw Date may not exceed the applicable amount set forth in
               the related Competitive Bid Quote Request;

                                   (2)  acceptance of offers for
               Competitive Bid Loans having identical Interest Periods may
               only be based upon ascending Competitive LIBOR Bid Rates or
               Absolute Rates, as appropriate, for such Loans; and

                                   (3)  Borrower may not accept any offer
               that fails to comply with the requirements of this
               Agreement.


                                          39


                              (vi)  If two or more Banks shall make
          Competitive Bid Quotes having identical Competitive LIBOR Bid
          Rates or Absolute Rates for Competitive Bid Loans of identical
          Interest Periods, the Managing Agent shall apportion the
          principal amount of all such Competitive Bid Loans among such
          Banks in proportion to the aggregate principal amounts of such
          Banks' respective Competitive Bid Quotes (which shall be rounded
          upwards to the nearest multiple of $1,000.00).  Allocations by
          the Managing Agent of the amounts of Competitive Bid Loans shall
          be binding and conclusive, absent manifest error.  The Managing
          Agent shall, not later than 5:00 p.m., Cleveland time, on the
          third Business Day before the applicable Draw Date, notify each
          Bank of its receipt of a Competitive Bid Borrowing Notice and the
          principal amounts of the Competitive Bid Loans allocated to each
          participating Bank.

                              (vii)  Borrower shall pay the Managing Agent
          an administrative fee (the "Competitive Bid Fee") in the amount
          of One Thousand Two Hundred Fifty Dollars ($1,250) for each
          Competitive Bid Quote Request transmitted by Borrower to the
          Managing Agent pursuant to this Section 2.4(c).  Each Competitive
          Bid Fee shall be deemed to have been earned by the Managing Agent
          with respect to each Managing Agent-administered Competitive Bid
          Loan solicitation process (without regard to whether any Bank
          shall issue or Borrower shall accept any Competitive Bid Quote in
          response thereto, or to whether any Competitive Bid Loan
          resulting from such Competitive Bid Request shall be funded). 
          The Competitive Bid Fee in respect of each such process may be
          deducted from the proceeds of any Managing Agent-administered
          Competitive Bid Loan; Borrower and each Bank hereby expressly
          authorize the Managing Agent to deduct its Competitive Bid Fee
          from such proceeds.

                         (d)  Competitive Bid Loans Administered
          by Borrower.  (i) Borrower may request offers to make Competitive
          Bid Loans from all (but not less than all) of the Banks directly
          by providing each Bank and the Managing Agent with its Direct
          Invitation to Bid not later than (x) 1:00 p.m., Cleveland time,
          at least five (5) Business Days before the proposed Draw Date for
          the Competitive Bid LIBOR Rate Loans described therein; and (y)
          9:00 A.M., Cleveland time, at least one (1) Business Day before
          the Draw Date for each Absolute Rate Loan so requested.  Each
          Direct Invitation to Bid shall specify:

                                   (1) the proposed Draw Date and Interest
               Period for each Competitive Bid Loan so requested;

                                   (2) the requested principal amount of
               each such Competitive Bid Loan, which shall be in whole
               multiples of One Million Dollars ($1,000,000) and shall in
               no case be less than Five Million Dollars ($5,000,000); or
               the desired range of principal amounts (subject in each case
               to the foregoing requirement) and Interest Periods for which
               Borrower thereby solicits bids from the Banks; and

                                   (3)  whether the Competitive Bid Quotes
               so requested are for Competitive Bid LIBOR Rate Loans or for
               Absolute Rate Loans.

                                          40 


                              (ii) Each Bank may, in its discretion (but
          shall have no obligation to), submit its Competitive Bid Quote in
          response to such Direct Invitation in accordance with the
          procedure set forth herein.  Each Competitive Bid Quote shall be
          furnished to Borrower, by telecopy, not later than 1:00 p.m.
          Cleveland time at least four (4) Business Days before the
          proposed Draw Date for each requested Competitive Bid LIBOR Rate
          Loan, or 10:00 A.M., Cleveland time, on the proposed Draw Date
          for each requested Absolute Rate Loan (or such earlier time as
          Borrower and the Managing Agent may agree).  All Competitive Bid
          Quotes shall be irrevocable once given, provided, however, that
          any Bank which submits a Competitive Bid Quote which contains a
          manifest error may supplement such Competitive Bid Quote at any
          time prior to the Borrower's acceptance of such original
          Competitive Bid Quote by providing Borrower, by telecopy with a
          Corrective Bid otherwise in accordance with the foregoing
          criteria, together with express written notice that such
          Corrective Bid is submitted for the purpose of correcting a
          manifest error in such Bank's original Competitive Bid Quote. 
          Each Competitive Bid Quote shall identify the Bank making such
          quote, shall constitute an offer by the Bank submitting such
          Competitive Bid Quote to make a Competitive Bid Loan to Borrower
          in the principal amount, for the Interest Period or Interest
          Periods and at the Competitive LIBOR Bid Rate set forth therein
          (or in such lesser principal amounts as may result from
          apportionment by the Borrower as hereinafter provided and shall
          specify the following additional information:

                                   (1)  the proposed Draw Date and the
                    proposed Interest Period for the Competitive Bid Loan
                    contemplated thereby (which shall in each case
                    correspond to those requested in the relevant Direct
                    Invitation for Bids);

                                   (2)  the principal amount of the
                    Competitive Bid Loan for which such offer is being
                    made, which amount (x) must be an integral multiple of
                    One Million Dollars ($1,000,000) and not less than Five
                    Million Dollars ($5,000,000), and (y) may not exceed
                    the principal amount of the Competitive Bid Loans
                    requested in Borrower's Direct Invitation;

                                   (3)  the minimum amount, if any, of the
                    Competitive Bid Loan or Loans which may be accepted by
                    Borrower; and

                                   (4)  the Competitive LIBOR Bid Rate or
                    the Absolute Rate, as appropriate, for each such
                    Competitive Bid Loan; and

          Borrower shall reject Competitive Bid Quotes which are submitted
          after the applicable deadline as set forth above, which fail to
          include all of the information required above, which include
          additional or different terms than those requested in the
          applicable Invitation for Bids or which deviate in any fashion
          from the form of Competitive Bid Quote (by addition of qualifying
          language or otherwise) attached hereto as Exhibit A.  Borrower
          shall notify any Bank whose Competitive Bid Quote is so rejected

                                          41  


          by telecopy promptly after such rejection.  Borrower shall not
          disclose the contents of any Bank's Competitive Bid Quote to any
          other Bank prior to Borrower's acceptance of offers to make
          Competitive Bid Loans as provided in the following paragraph.

                              (iii) Borrower may accept offers to make
          Competitive Bid Loans only by providing the Managing Agent and
          each Bank with written notice, by telecopy, of its acceptance or
          rejection of the offers submitted to it in response to its Direct
          Invitation to Bid not later than 11:00 a.m., Cleveland time, at
          least three (3) Business Days before the proposed Draw Date for
          any Competitive Bid LIBOR Rate Loan or 11:00 a.m., Cleveland
          time, on the Draw Date for each Absolute Rate Loan.  Borrower's
          failure to provide such notice as and when specified in the
          preceding sentence shall constitute Borrower's unqualified
          rejection of all such offers.  Each acceptance notice shall
          specify the aggregate principal amount of the offers so accepted
          and the applicable interest rate therefor.  Borrower may accept
          any proper Competitive Bid Quote, provided that:

                                   (1)  the aggregate principal amount of
               all Competitive Bid Loans to be disbursed on a specified
               Draw Date may not exceed the applicable amount set forth in
               the related Competitive Bid Quote Request;

                                   (2)  acceptance of offers for
               Competitive Bid Loans having identical Interest Periods may
               only be based upon ascending Competitive LIBOR Bid Rates or
               Absolute Rates, as appropriate, for such Loans; and

                                   (3)  Borrower may not accept any offer
               that fails to comply with the requirements of this
               Agreement.

                              (iv)  If two or more Banks shall make
          Competitive Bid Quotes having identical Competitive LIBOR Margins
          or Absolute Rates for Competitive Bid Loans of identical Interest
          Periods, Borrower shall apportion the principal amount of all
          such Competitive Bid Loans among such Banks in proportion to the
          aggregate principal amounts of such Banks' respective Competitive
          Bid Quotes (which shall be rounded upwards to the nearest
          multiple of $1,000).  Allocations by Borrower of the amounts of
          Competitive Bid Loans shall be binding and conclusive, absent
          manifest error.

                    Section 2.4  Interest Payable on the Loans.

                    (a)  Method of Selecting Rate Options and Interest
          Periods.  Borrower shall select the Rate Option for each Ratable
          Loan and shall select the Interest Period applicable to each
          Ratable LIBOR Rate Loan from time to time.  Borrower shall give
          the Managing Agent its irrevocable Request For Advance not later
          than 1:00 p.m. Cleveland time at least one (1) Business Day
          before the Draw Date of each Ratable Prime Rate Loan and three
          (3) Business Days before the Draw Date for each Ratable LIBOR
          Rate Loan, specifying:



                                          42 


                    (i)  the Draw Date (which shall be a Business Day) for
                    such Loan;

                    (ii)  the aggregate amount of such Loan;

                    (iii)  the Rate Option selected for such Loan; and

                    (iv) in the case of each LIBOR Rate Loan, the Interest
                    Period applicable thereto.

          Each LIBOR Rate Loan shall bear interest from and including the
          first day of the Interest Period applicable thereto until (but
          not including) the last day of such Interest Period at the
          interest rate determined as applicable to such LIBOR Rate Loan. 
          Borrower shall select Interest Periods with respect to LIBOR Rate
          Loans so that it is not necessary to pay a LIBOR Rate Loan prior
          to the last day of the applicable Interest Period in order to
          repay the Loans on the Termination Date.  Provided that no
          Default or Event of Default shall have occurred and be
          continuing, Borrower may elect to continue a Ratable Loan (but
          not a Competitive Bid Loan) as a Ratable LIBOR Rate Loan by
          giving irrevocable written, telephonic or telegraphic notice
          thereof to the Managing Agent not less than three (3) Business
          Days prior to the last day of the then-current Interest Period
          applicable to such Ratable LIBOR Rate Loan, specifying the
          duration of the succeeding Interest Period therefor.  The
          continuation of any Ratable LIBOR Rate Loan as provided in the
          preceding sentence shall constitute the making of a new LIBOR
          Rate Loan in the principal amount of the Ratable LIBOR Rate Loan
          so continued and for the Interest Period selected as described
          above; the Draw Date for such new LIBOR Rate Loan shall be the
          first Business Day following the expiration of the Interest
          Period of the Loan so continued.  If the Managing Agent does not
          receive timely notice of such election, Borrower shall be deemed
          to have elected to convert such LIBOR Rate Loan to a Prime Rate
          Loan at the end of the then-current Interest Period.  Provided
          that no Default or Event of Default shall have occurred and be
          continuing, Borrower may, on any Business Day, convert any
          outstanding Prime Rate Loan, or portion thereof, into a LIBOR
          Rate Loan in the same aggregate principal amount.  If Borrower
          desires to convert a Prime Rate Loan, it shall give the Managing
          Agent prior written, telephonic or telegraphic notice three (3)
          Business Days prior to the requested conversion date, which
          notice shall specify the duration of the Interest Period
          applicable thereto.  The Managing Agent shall notify the Banks of
          its receipt of such notice from Borrower not later than
          5:00 p.m., Cleveland time, on the Business Day on which the
          Managing Agent receives such notice.

                    (b)  Determination of Adjusted Prime Rate.  The
          Managing Agent shall determine the Adjusted Prime Rate in effect
          from time to time.  Any change in the Adjusted Prime Rate shall,
          for all purposes of this Agreement and the other Loan Documents,
          become effective on the effective date of such change in the
          Prime Rate as announced by the Managing Agent in accordance with
          the Managing Agent's customary practices.



                                          43


                    (c)  Payments.  

                    (i)  Borrower shall pay to the Managing Agent, for the
                    account of the Banks in accordance with their
                    respective Pro Rata Shares, monthly in arrears on the
                    last Business Day of each month beginning with the
                    month following the month in which the Closing Date
                    occurs, interest on the outstanding principal amount of
                    the Adjusted Prime Rate Loans at the annual rate equal
                    to the Adjusted Prime Rate; provided, however, that if
                    Borrower elects, pursuant to the final paragraph of
                    Section 2.4(a), to convert a Prime Rate Loan, or any
                    portion thereof, to a LIBOR Rate Loan, Borrower shall
                    pay to the Managing Agent, for the account of the Banks
                    in accordance with their respective Pro Rata Shares,
                    all accrued but unpaid interest on the Prime Rate Loan,
                    or such portion thereof, being converted, for the
                    period commencing on the date of the last payment date
                    under this paragraph 2.4(c)(i) and concluding on the
                    day immediately preceding the first day of the Interest
                    Period for the LIBOR Rate Loan into which the Prime
                    Rate Loan is converted.

                    (ii)  Borrower shall pay to the Managing Agent, for the
                    account of the Banks in accordance with their
                    respective Pro Rata Shares, interest, in arrears, on
                    the outstanding principal amount of the Ratable LIBOR
                    Rate Loans at the annual rate equal to the LIBOR Rate. 
                    Such interest shall be due and payable on the last
                    Business Day of the applicable Interest Period for each
                    LIBOR Rate Loan having an Interest Period of ninety
                    (90) days or less; for all other LIBOR Rate Loans,
                    interest shall be payable, in arrears as aforesaid, on
                    (x) that Business Day which is ninety (90) days after
                    the respective Draw Dates for such LIBOR Rate Loans;
                    and (y) on the final day of the Interest Period
                    therefor.

                    (iii)  Borrower shall pay to the Managing Agent, for
                    the account of each Bank having a Competitive Bid Loan
                    outstanding to Borrower, interest, in arrears, on the
                    outstanding principal balance of the Competitive Bid
                    Loans at the annual rate equal to the Competitive LIBOR
                    Bid Rate or the Absolute Rate applicable to such
                    Competitive Bid Loans.  Such interest shall be due and
                    payable on the last business day of the applicable
                    Interest Period for each Competitive Bid Loan having an
                    Interest Period of ninety (90) days or less; for all
                    other Competitive Bid Loans, interest shall be payable,
                    in arrears as aforesaid, on (x) that Business Day which
                    is ninety (90) days after the respective Draw Dates for
                    such Competitive Bid Loans; and (y) on the final day of
                    the Interest Period therefor.

                    (d)  Interest on Overdue Payments; Default Interest
          Rate. If any payment of principal or interest, or any drawing or
          disbursement made under any Letter of Credit, is not paid when
          due, or prior to the expiration of the applicable period of grace

                                          44 


          (if any) therefor, the Managing Agent shall, upon the request of
          the Required Banks, charge and collect from Borrower, or add to
          the unpaid balance of the Notes, a Late Charge.  The Managing
          Agent may charge interest on the Late Charge at the Default
          Interest Rate until such time as the required payment of
          principal and interest (together with the Late Charge) is paid
          hereunder.  Any Late Charge charged and collected by the Managing
          Agent shall be distributed to the Banks in accordance with their
          respective Pro Rata Shares. Any Late Charge charged and collected
          by the Managing Agent in respect of any Competitive Bid Loan
          shall be distributed to the Banks making such Loan in proportion
          to their respective shares in such Competitive Bid Loans.  No
          failure by the Managing Agent to charge or collect any Late
          Charge in respect of any delinquent payment shall be considered
          to be a waiver by the Managing Agent or the Banks of any rights
          they may have hereunder, including without limitation the right
          subsequently to impose a Late Charge for such delinquent payment
          or to take such other actions as may then be available to them
          hereunder or at law or in equity, including but not limited to
          the right to terminate the Credit Commitments or to accelerate
          the Obligations pursuant to the terms of Section 7.2 hereof.  If
          the Notes have been accelerated pursuant to Section 7.2(b), or if
          an Event of Default hereunder or under any other Loan Document
          shall have occurred and be continuing, the outstanding principal
          balance of the indebtedness advanced under this Agreement,
          together with all accrued interest thereon and any and all other
          Obligations, shall bear interest from the date on which such
          amount shall have first become due and payable (or the date on
          which any such Event of Default shall have occurred) to the date
          on which such amount shall be paid (whether before or after
          judgment) at the Default Interest Rate.  Interest at the Default
          Interest Rate will continue to accrue and will (to the extent
          permitted by applicable law) be compounded daily until the
          Obligations in respect of such payment are discharged (whether
          before or after judgment).

                    Section 2.5  Repayments and Prepayments of Principal.

                    (a)  Optional Prepayments.  Without derogating from the
          mandatory prepayment requirements contained in Section 2.5(c)
          hereof, Borrower shall have the right to prepay the principal of
          the Ratable Loans in full or in part at any time and from time to
          time upon payment to Managing Agent of all accrued interest to
          the date of payment; provided, however, that (i) all partial
          payments of principal shall be in an amount equal to or greater
          than One Million Dollars ($1,000,000); (ii) Borrower may not make
          any optional prepayment of any LIBOR Rate Loan during the fifteen
          (15)-day period commencing on the Draw Date for such LIBOR Rate
          Loan; and (iii) all Loans may be prepaid without penalty or
          premium.  Borrower may not prepay any Competitive Bid Loan
          without the prior, written consent of the Bank which made such
          Competitive Bid Loan.  If Borrower shall prepay any LIBOR Rate
          Loan on a day other than the final day of the applicable Interest
          Period therefor, such prepayment must include an amount equal to
          the aggregate LIBOR Break Funding Costs applicable to or
          resulting from such prepayment in accordance with Section 2.9,
          below.


                                          45


                    (b)  Mandatory Prepayments.

                    (i)  If at any time the Outstanding Amount exceeds the
                    Maximum Commitment, Borrower shall immediately prepay
                    all sums in excess of the Maximum Commitment.

                    (ii)  If (and on each occasion that) a drawing or
                    disbursement is made under a Letter of Credit and
                    Borrower shall not reimburse the Issuing Bank therefor
                    (either by causing the amount of such drawing or
                    disbursement to be converted into a Loan or by paying
                    the Issuing Bank the amount of such drawing or
                    disbursement in immediately available funds), as and
                    when required by Section 2.14, below, Borrower shall
                    immediately repay an amount equal to the amount of such
                    drawing or disbursement, together with interest thereon
                    at the rate contemplated by Section 2.14, below.

                    (c)  Application of Prepayments.  Any prepayment under
          the Notes shall be applied by the Managing Agent as set forth in
          Section 2.6 hereof.  To the extent that any prepayment shall be
          applied to a LIBOR Rate Loan, the Managing Agent shall (unless
          such prepayment shall result from the acceleration of the Notes
          following the occurrence of an Event of Default by Borrower)
          retain such amount until the expiration of the Interest Period
          applicable to such LIBOR Rate Loan, and shall apply such payment
          at such time so as to minimize the LIBOR Break Funding Costs
          otherwise applicable to such prepayment, unless specifically
          instructed by Borrower to pay, repay or prepay such LIBOR Rate
          Loan and nonetheless incur the applicable LIBOR Break Funding
          Cost.

                    (d)  Maturity.  Subject to the terms and conditions of
          this Agreement, Borrower will be entitled to reborrow all or any
          part of the principal of the Notes repaid or prepaid prior to the
          termination of the Credit Commitments.  The Credit Commitments
          shall terminate, and all of the indebtedness evidenced by each
          Note shall, if not sooner paid, be in any event absolutely and
          unconditionally due and payable in full by Borrower on the
          Termination Date.

                    (e)  Notice of Prepayments of Principal.  Borrower will
          provide the Managing Agent at least (1) one Business Day's
          advance, written notice of Borrower's intention to make any
          voluntary prepayment of principal.  Such notice shall be
          irrevocable and shall specify the date of prepayment and the
          aggregate amount to be paid.  The Managing Agent will promptly
          notify each Bank of its receipt of such notice.

                    Section 2.6  Payments and Computations.

                    (a)  Time and Place of Payments.  Except as
          specifically provided to the contrary in Section 2.14, below,
          each payment to be made by Borrower under this Agreement or any
          other Loan Document shall be made directly to the Managing Agent
          at its Head Office, not later than 12:00 noon Cleveland Time, on
          the due date of each such payment, in immediately available and
          freely transferrable funds.  Any payment received after such time

                                          46


          will be deemed to have been received on the next Business Day. 
          All payments of interest, principal and all other amounts owing
          hereunder or under the Notes or any other Loan Document shall be
          documented by Borrower's transmitting to the Managing Agent, via
          telecopy, a Payment Authorization; the funds representing such
          payment shall be transferred to the Managing Agent in accordance
          with such Payment Authorization.  On the same Business Day that
          it receives (or is deemed to receive) payments hereunder the
          Managing Agent will distribute (or cause to be distributed) to
          each Bank, in immediately available and freely transferrable
          funds:  (x) such Bank's Pro Rata Share of such payments in
          respect of all items other than payments under Competitive Bid
          Loans, and (y) such Bank's share of all payments on account of
          any Competitive Bid Loans made by such Bank.  If the Managing
          Agent fails to forward such payment by the close of business on
          the same Business Day as such payment is received (or as deemed,
          as described above, to have been received) by the Managing Agent,
          the Managing Agent shall remit to each Bank its Participation
          Percentage of such payment on the immediately following Business
          Day, together with interest thereon until payment at the
          customary rate set by the Managing Agent for the correction of
          errors among banks.

                    (b)  Application of Funds.  Notwithstanding anything
          herein to the contrary, and notwithstanding anything set forth in
          the Payment Authorization, the funds received by the Managing
          Agent with respect to the Obligations shall be applied as
          follows:

                    (i)  No Default.  Provided that the Notes have not been
                    accelerated pursuant to Section 7.2(b), below, and
                    provided further that no Event of Default shall have
                    occurred and be continuing at the time that the
                    Managing Agent receives such funds, in the following
                    manner: (a) first, to the payment of all reasonable
                    costs and expenses incurred in the collection of the
                    Obligations; (b) second, to the payment of all interest
                    and principal of all Swingline Loans; (c) third, to the
                    payment of all accrued but unpaid interest at the time
                    of such payment; and (d) fourth, to the payment of
                    principal as allocated by Borrower (with the approval
                    of the Managing Agent) between Competitive Bid Loans
                    and Ratable Loans, with principal payments in respect
                    of the latter to be apportioned among the Banks in
                    accordance with their respective Pro Rata Shares.

                    (ii)  Default.  If the Notes have been accelerated
                    pursuant to Section 7.2(b), or if an Event of Default
                    hereunder shall have occurred and be continuing
                    hereunder at the time the Managing Agent receives such
                    funds, in the following manner: (a) first to the
                    payment or reimbursement of the Banks and the Managing
                    Agent for all costs, expenses, disbursements and losses
                    which shall have been incurred or sustained by the
                    Banks or the Managing Agent in or incidental to the
                    collection of the Obligations owed by Borrower
                    hereunder or the exercise, protection, or enforcement
                    by the Banks or the Managing Agent of all or any of the

                                          47


                    rights, remedies, powers and privileges of the Banks
                    and the Managing Agent under this Agreement, the Notes,
                    or any of the other Loan Documents and in and towards
                    the provision of adequate indemnity to the Managing
                    Agent and any of the Banks against all taxes or Liens
                    which by law shall have, or may have priority over the
                    rights of the Managing Agent or the Banks in and to
                    such funds; and (b) second to the payment of all of the
                    Obligations in accordance with Section 2.6(b)(i) above,
                    provided, however, that in such case the principal of,
                    and interest in respect of, the Obligations shall be
                    allocated among the Banks in accordance with their
                    respective Funded Percentages.

                    (c)  Payments on Business Days.  If any sum would (but
          for the provisions of this Section 2.6(c)) become due and payable
          on any day which is not a Business Day, then such sum shall
          become due and payable on the next succeeding Business Day, and
          interest payable on such sum shall continue to accrue and shall
          be adjusted by the Managing Agent accordingly.

                    (d)  Computation of Interest.  All computations of
          interest payable under this Agreement, the Notes, or any of the
          other Loan Documents shall be computed by the Managing Agent on
          the basis of the actual principal amount outstanding on each day
          during the payment period, and shall be calculated on the basis
          of the actual number of days elapsed during such period on the
          basis of a year consisting of three hundred and sixty (360) days. 
          The daily interest charge shall be one three-hundred-sixtieth
          (1/360th) of the annual interest amount.  Each determination of
          any interest rate by the Managing Agent shall be conclusive and
          binding in the absence of manifest error. Absent manifest error,
          a certificate or statement signed by an authorized officer of the
          Managing Agent shall be conclusive evidence of the amount of the
          Obligations due and unpaid as of the date of such certificate or
          statement.

                    Section 2.7  Payments to be Free of Deductions.  Each
          sum to be paid by Borrower under this Agreement, any Note, or any
          of the other Loan Documents shall be made in accordance with
          Section 2.6 hereof, without set-off, deduction or counterclaim
          whatsoever, and free and clear of taxes, levies, imposts, duties,
          charges, fees, deductions, withholdings, compulsory loans,
          restrictions or conditions of any nature now or hereafter imposed
          or levied by any governmental or taxing authority, unless
          Borrower is compelled by law to make any such deduction or
          withholding.  In the event that any such obligation to deduct or
          withhold is imposed upon Borrower with respect to any such
          payment: (a) Borrower shall be permitted to make the deduction or
          withholding required by law in respect of such payment, and (b)
          there shall become and be absolutely due and payable by Borrower
          to the Managing Agent or such Bank on the date on which the said
          payment shall become due and payable, and Borrower hereby
          promises to pay to the Managing Agent or such Bank on such date,
          such additional amount as shall be necessary to enable the
          Managing Agent or such Bank to receive the same net amount which
          the Managing Agent or such Bank would have received on such due
          date had no such obligation been imposed by law.  Notwithstanding

                                          48


          the foregoing to the contrary, this Section 2.7 shall not apply
          in the case of any deductions or withholdings made in respect of
          taxes charged upon or by reference to the overall net income,
          profits or gains of the Managing Agent or any Bank.

                    Section 2.8  Use of Proceeds.

                    (a)  Permitted Uses of Loan Proceeds.  Borrower
          represents, warrants and covenants to the Managing Agent and to
          each Bank that all proceeds of the Loans shall be used by
          Borrower for its general corporate purposes, including without
          limitation for working capital, property acquisition and the
          construction and expansion of Real Estate Projects.

                    (b)  Permitted Uses of Letters of Credit.  Borrower
          represents, warrants and covenants to the Managing Agent and to
          each Bank that Letters of Credit shall be used solely for the
          purpose of providing credit enhancement for Borrower in
          connection with financings of Conventional Apartment Projects
          acquired or refinanced by Borrower (including but not limited to
          the replacement of existing letters of credit), and for no other
          purpose or purposes.

                    (c)  Prohibited Uses.  Borrower represents, warrants
          and covenants to the Managing Agent and to each Bank that the
          proceeds of all Loans shall be used only for the uses permitted
          as provided above, and that no part of the proceeds of any Loans
          will be used (directly or indirectly) so as to result in a
          violation of Regulations T, U or X of the Board of Governors of
          the Federal Reserve System or for any other purpose violative of
          any rule or regulation of such Board.

                    Section 2.9  LIBOR Break Funding Costs.  Borrower shall
          pay to the Managing Agent, for the benefit of the Banks entitled
          thereto, the LIBOR Break Funding Costs that the Managing Agent
          determines are attributable to: 

                    (a)  any payment (including, without limitation, the
          acceleration of the Loans pursuant to this Agreement or any Loan
          Document), repayment, mandatory or optional prepayment, or
          conversion of a LIBOR Rate Loan for any reason on a date other
          than the last day of the Interest Period for such LIBOR Rate
          Loan; or

                    (b)  any failure by Borrower for any reason to borrow a
          LIBOR Rate Loan on the date for such borrowing specified in the
          relevant notice of borrowing or Request for Advance given
          pursuant to this Agreement.

          All LIBOR Break Funding Costs attributable to Ratable LIBOR Rate
          Loans shall be for the ratable benefit of the Banks.  All such
          costs in respect of Competitive Bid Loans shall be on account of
          those Banks which have funded such Competitive Bid Loans.

                    Section 2.10  Additional Costs.

                    (a)  Notwithstanding any conflicting provision of this
          Agreement to the contrary, if any applicable law or governmental

                                          49


          regulation applicable to nationally chartered banking
          associations in the United States of America and not in effect as
          of the date hereof shall (i) subject the Managing Agent or any
          Bank to any tax, levy, impost, duty, charge, fee, deduction or
          withholding of any nature with respect to any Loan or Letter of
          Credit, this Agreement, any Note, or any of the other Loan
          Documents or the payment by Borrower of any amounts payable to
          the Managing Agent or any Bank hereunder or thereunder; or
          (ii) materially change, in the reasonable opinion of the party so
          affected, the basis of taxation of payments to the Managing Agent
          or any Bank of the principal of or the interest on any Note or
          any other amounts payable to the Managing Agent or any Bank under
          this Agreement, or any of the other Loan Documents; or (iii)
          impose or increase or render applicable any special or
          supplementary special deposit or reserve or similar requirements
          (whether or not having the force of law) against assets held by,
          or deposits in or for the account of, or any eligible liabilities
          of, or loans by any office or branch of, the Managing Agent or
          any Bank; or (iv) impose on the Managing Agent or any Bank any
          other condition or requirement with respect to this Agreement,
          any Note, or any of the other Loan Documents, and if the result
          of any of the foregoing is (A) to increase the cost to the
          Managing Agent or any Bank of making, funding or maintaining all
          or any part of the principal of the Loans or of issuing,
          maintaining or making draws or disbursements under the Letters of
          Credit, or (B) to reduce the amount of principal, interest or any
          other sum payable by Borrower to the Managing Agent or any Bank
          under this Agreement, any Note, or any of the other Loan
          Documents, or (C) to require the Managing Agent or any Bank to
          make any payment or to forego any interest or other sum payable
          by Borrower to the Managing Agent or any Bank under this
          Agreement, any Note, or any of the other Loan Documents, the
          amount of which payment or foregone interest or other sum is
          measured by or calculated by reference to the gross amount of any
          sum receivable or deemed received by the Managing Agent or any
          Bank from Borrower under this Agreement, any Note, or any of the
          other Loan Documents, then, and in each such case, Borrower will
          pay to the Managing Agent for the Managing Agent or the account
          of a Bank, as the case may be, within sixty (60) days of written
          notice by the Managing Agent or such Bank, such additional
          amounts as will (in the reasonable opinion of the Managing Agent
          or such Bank, as the case may be) be sufficient to compensate the
          Managing Agent or such Bank for such additional cost, reduction,
          payment or foregone interest or other sum actually incurred by
          the Managing Agent or any Bank in consequence of such law or
          governmental regulation.  Anything in this paragraph to the
          contrary notwithstanding, the foregoing provisions of this
          paragraph shall not apply in the case of any additional cost,
          reduction, payment or foregone interest or other sum resulting
          solely from or arising solely as a consequence of (x) any taxes
          charged upon or by reference to the overall net income, profits
          or gains of the Managing Agent or any Bank; or (y) the internal
          requirements or policies of the Managing Agent or any Bank.

                    (b)  If any present or future applicable law shall make
          it unlawful for Borrower to perform any one or more of its
          agreements or obligations under this Agreement, any Note or any
          of the other Loan Documents, then the obligations of the Banks

                                          50


          under their respective Credit Commitments shall terminate
          immediately. If any present or future applicable law shall make
          it unlawful for Borrower to perform any one or more of its
          agreements or obligations under this Agreement, any Note, or any
          of the other Loan Documents, and the Managing Agent or any Bank
          shall at any time determine (which reasonable determination shall
          be conclusive and binding on Borrower) (i) that, as a consequence
          of the effect or operation (whether direct or indirect) of any
          such applicable law, any one or more of the rights, remedies,
          powers or privileges of the Managing Agent or any Bank under or
          in respect of this Agreement, any Note, or any of the other Loan
          Documents shall be or become invalid, unenforceable or materially
          restricted; and (ii) that all or any one or more of the rights,
          remedies, powers and privileges so affected are of material
          importance to the Managing Agent or any Bank (as determined by
          the party so affected), then the Managing Agent shall, at the
          direction of the Required Banks, by giving notice to Borrower,
          declare all of the Obligations, including, without limitation,
          the entire unpaid principal of the Notes, all of the unpaid
          interest accrued thereon and any and all other sums due and
          payable by Borrower to the Managing Agent or the Banks under this
          Agreement, any Note, and any of the other Loan Documents, to be
          immediately due and payable, and, thereupon, such Obligations
          shall (if not already due and payable) forthwith become and be
          due and payable without further notice or other formalities of
          any kind, all of which are hereby expressly waived.

                    (c)  If the Managing Agent or any Bank shall reasonably
          determine that any law or governmental regulation applicable to
          nationally chartered banking associations in the United States of
          America and not in effect as of the date hereof regarding capital
          adequacy, or in the event of any change in any existing such law
          or governmental regulation or in the interpretation or
          administration thereof by any governmental authority, central
          bank or comparable agency charged with the interpretation or
          administration thereof, or compliance by any Bank with any
          request or directive regarding capital adequacy (whether or not
          having the force of law) from any such authority, central bank or
          comparable agency, has or would have the effect of reducing the
          rate of return on such Bank's capital, as a consequence of its
          obligations hereunder, to a level below that which such Bank
          could have achieved but for such adoption, change or compliance
          (taking into consideration such Bank's policies with respect to
          capital adequacy) by any amount deemed by such Bank to be
          material, then Borrower shall pay to such Bank upon demand such
          amount or amounts, in addition to the amounts payable under the
          other provisions of this Agreement or any other Loan Document, as
          will compensate such Bank for such reduction.  Determinations by
          any Bank of the additional amount or amounts required to
          compensate such Bank in respect of the foregoing shall be
          conclusive in the absence of manifest error.  In determining such
          amount or amounts, each Bank may use any reasonable averaging and
          attribution methods of general application.

                    (d)  Borrower acknowledges that any Bank which is not a
          nationally chartered banking association in the United States
          shall nevertheless be entitled to the benefit of all of the
          provisions of Section 2.10 to the same extent and upon the same

                                          51


          terms and procedures as would apply if any such Bank were a
          nationally chartered banking association in the United States of
          America.

                    Section 2.11  Indemnification for Losses. Without
          derogating from any of the other provisions of this Agreement or
          any of the other Loan Documents, Borrower hereby absolutely and
          unconditionally agrees to indemnify the Managing Agent and each
          Bank, upon demand at any time and as often as the occasion
          therefor may require, against any and all claims, demands, suits,
          actions, damages, losses, costs, expenses and all other
          liabilities whatsoever which the Managing Agent or any Bank or
          any of their respective directors, officers, employees or agents
          may sustain or incur as a consequence of, on account of, in
          relation to or in any way in connection with (a) any failure by
          Borrower to pay, punctually on the due date thereof, any amount
          payable under this Agreement, any Note, or any of the other Loan
          Documents beyond the expiration of the period of grace (if any)
          applicable thereto, or (b) the acceleration, in accordance with
          Section 7.2 hereof, of the maturity of any of the Obligations, or
          (c) any failure by Borrower to perform or comply with any of the
          terms and provisions of this Agreement, any Note or any of the
          other Loan Documents.  Such claims, demands, suits, actions,
          damages, losses, costs or expenses shall include, without
          limitation (i) any costs incurred by the Managing Agent or any
          Bank in carrying funds to cover any overdue principal, overdue
          interest or any other overdue sums payable by Borrower under this
          Agreement, any Note, or any of the other Loan Documents; (ii) any
          interest payable by the Managing Agent or any Bank to the lenders
          of the funds borrowed by the Managing Agent or any Bank in order
          to carry the funds referred to in clause (i) of this Section
          2.11; and (iii) any losses (but excluding losses of anticipated
          profit) incurred or sustained by the Managing Agent or any Bank
          in liquidating or re-employing funds acquired from third parties
          to make, fund or maintain all or any part of the Loans or to
          issue, maintain or make draws or disbursements under the Letters
          of Credit.

                    Section 2.12  Statements by the Managing Agent or Any
          Bank.  A statement signed by an officer of the Managing Agent or
          any Bank (as the case may be) setting forth any additional amount
          required to be paid by Borrower to the Managing Agent or such
          Bank under Sections 2.10 and 2.11 hereof shall be submitted by
          the Managing Agent or such Bank to Borrower in connection with
          each demand made at any time by the Managing Agent (with copies
          thereof delivered to each other Bank) or such Bank under either
          of such Sections.  A claim by the Managing Agent or any Bank for
          all or any part of any additional amounts required to be paid by
          Borrower under Sections 2.10 and 2.11 hereof may be made before
          or after any payment to which such claim relates.  Each such
          statement shall, in the absence of manifest error, constitute
          conclusive evidence of the additional amount required to be paid
          to the Managing Agent or such Bank.

                    Section 2.13  Requests for Advances.  (a) All requests
          for draws, advances, or disbursements of the proceeds of Ratable
          Loans shall be made by Borrower, in writing, on a Request for
          Advance.  Such Requests for Advance may be transmitted to the

                                          52


          Managing Agent at its Head Office via fax, provided that Borrower
          immediately notify the Managing Agent by telephone of such
          transmission.  All such Requests for Advance for Ratable Loans
          shall be transmitted to and received by the Managing Agent not
          later than 1:00 p.m., Cleveland Time, on the Business Day
          determined in accordance with Section 2.4(a).  All such Requests
          for Advance for such Ratable Loans shall be accompanied by (x) a
          written certification, signed by a duly authorized officer of
          Borrower (or a properly designated delegate of such an officer),
          indicating Borrower's Debt Rating as of the date of such Request
          for Advance, and (y) such documents, reports and other materials
          as may be necessary to enable the Managing Agent (and each Bank)
          to confirm that the conditions precedent to the disbursement of
          such requested Loan have been satisfied.

                    (b)  The Managing Agent shall notify the Banks promptly
          by telephone of Managing Agent's receipt of Borrower's Request
          for Advance, but in no event shall Managing Agent notify the
          Banks later than 5:00 p.m. Cleveland Time, on the day on which
          the Managing Agent actually receives the applicable Request for
          Advance.  In addition, the Managing Agent shall provide each Bank
          with a copy of each such Request for Advance, together with all
          accompanying materials, promptly upon the Managing Agent's
          receipt thereof, and shall provide each Bank with a statement
          showing the Managing Agent's calculation of its respective
          Participation Percentage of each Ratable Loan so requested.  Each
          Bank will, upon receiving notice from the Managing Agent of
          Borrower's Request for Advance, be obligated to place at the
          disposal of the Managing Agent, not later than 12:00 noon
          Cleveland Time on the Draw Date set forth on such Request for
          Advance, an aggregate amount in dollars equal to such Bank's
          Participation Percentage of each Ratable Loan requested. The
          payment by each such Bank of such aggregate amount shall be made
          to the Managing Agent at the Managing Agent's Head Office in
          immediately available and freely transferrable funds.

                    (c)  The Managing Agent shall disburse the proceeds of
          each Loan to Borrower, in immediately available funds, not later
          than 1:30 p.m., Cleveland time, on the Draw Date described
          therefor, provided that:  (i) Borrower shall have provided the
          Managing Agent with a Request for Advance for each Ratable Loan
          as and when provided above; (ii) all of the conditions precedent
          applicable to such Loan under Article 3, below, shall be
          satisfied as at the Closing Date or such later Draw Date as may
          be applicable to such Loan; and (z) each Bank shall fund the
          amount equal to its Participation Percentage in each Ratable Loan
          as provided in Section 2.13(b), above.  If after Borrower shall
          have provided the Managing Agent with its Request for Advance for
          any Ratable Loan, and provided that all of the conditions
          precedent for the making of such Ratable Loan shall have been
          satisfied, any Bank shall for any reason not fund its
          Participation Percentage in such Ratable Loan, the Managing Agent
          shall so notify Borrower.  If in such event Borrower shall so
          request, the Managing Agent shall advance that portion of such
          Ratable Loan equal to the aggregate of the funding Banks'
          Participation Percentages thereof, without thereby waiving or
          releasing any right or claim that the Managing Agent or Borrower
          may have as against any Bank which failed to fund its

                                          53  


          Participation Percentage in such Loan as and when required under
          Section 2.13(b).

                    Section 2.14.  The Letters of Credit.

                    (a)  Issuance of Letters of Credit; Conditions and
          Limitations.  Upon the terms and conditions set forth in this
          Agreement, Borrower may request, in accordance with the
          provisions of this Section 2.14, that the Issuing Bank issue one
          or more Letters of Credit for the account of Borrower from time
          to time prior to the Termination Date.  If Borrower desires the
          issuance of a Letter of Credit, it shall deliver to the Managing
          Agent a Request for Issuance of Letter of Credit no later than
          1:00 P.M. (Cleveland time) at least five (5) Business Days before
          the proposed Issuance Date therefor.  The Request for Issuance of
          Letter of Credit shall be accompanied by a Letter of Credit
          Application, on the Issuing Bank's then-customary form, and shall
          contain the following information with respect to each requested
          Letter of Credit: (i) its proposed Issuance Date (which shall be
          a Business Day), (ii) its proposed Face Amount, (iii) its
          proposed expiration date, (iv) the name and address of its
          proposed beneficiary, and (v) a summary of its purpose and
          contemplated terms.  Borrower shall, in addition, furnish (x) a
          certificate, signed by a duly authorized officer of Borrower (or
          a properly designated delegate of such an officer), indicating
          Borrower's Debt Rating as of the date of such Request for
          Issuance of a Letter of Credit; and (y) a precise description of
          any documents to be presented under, and any other terms of, the
          requested Letter of Credit, together with the text of any
          certificate to be presented by the beneficiary which, if
          presented by the beneficiary prior to the expiration date of the
          Letter of Credit, would require the Issuing Bank to make payment
          under the Letter of Credit. No Letter of Credit shall require
          payment against a conforming draft to be made thereunder on the
          same Business Day that such draft is presented if such
          presentation is made after 10:00 A.M. (Cleveland time) on such
          Business Day.  The minimum Face Amount of any Letter of Credit
          shall be One Million Dollars ($1,000,000).  The issuance of each
          Letter of Credit shall be subject to the satisfaction, on the
          Issuance Date for each Letter of Credit, of all of the conditions
          precedent set forth in Section 3.2, below, and to the following
          additional limitations:

                         (i)  Borrower shall not request the
                    issuance of a Letter of Credit if, after
                    giving effect to the issuance of such Letter
                    of Credit, the Letter of Credit Usage would
                    equal or exceed Twenty-Five Million Dollars
                    ($25,000,000);

                         (ii)  Borrower shall not request the
                    issuance of a Letter of Credit if, after
                    giving effect to the issuance of such Letter
                    of Credit, the Outstanding Amount would
                    exceed the Maximum Commitment; and

                         (iii)  In no event shall the Issuing
                    Bank issue any Letter of Credit having an

                                          54


                    expiration date later than the first to occur
                    of (x) Termination Date or (y) one (1) year
                    after its Issuance Date; provided that,
                    subject to the foregoing clause (x), this
                    clause (y) shall not prevent the Issuing Bank
                    from agreeing that a Letter of Credit will
                    automatically be renewed for a period not to
                    exceed one (1) year if the Issuing Bank does
                    not cancel such renewal, provided that at any
                    such renewal date all of the conditions to
                    the issuance of a Letter of Credit and set
                    forth or referred to in this Section 2.14(a)
                    shall be satisfied.

                    (b)  Issuance of Letters of Credit; Purchase of
          Participations Therein.  Upon receipt by the Managing Agent of a
          Request for Issuance of Letter of Credit from Borrower, the
          Managing Agent shall promptly so notify each Bank, and shall
          provide each Bank with a copy of such Request for Issuance of
          Letter of Credit.  Provided that all of the conditions precedent
          to the issuance of the requested Letter of Credit have been
          satisfied, the Issuing Bank shall cause each Letter of Credit
          properly requested hereunder to be issued as requested by
          Borrower in accordance with the terms of the respective Request
          for Issuance for Letter of Credit therefor.  Immediately upon the
          issuance of each Letter of Credit, each Bank (other than the
          Issuing Bank) shall be deemed to have irrevocably purchased from
          the Issuing Bank a participation in such Letter of Credit and any
          and all drawings and disbursements thereunder in an amount equal
          to such Bank's Pro Rata Share of the Face Amount of such Letter
          of Credit, and each Bank hereby covenants and agrees to purchase
          and pay for such participation on the terms and subject to the
          conditions set forth in this Section 2.14.  

                    (c)  Payment in Certain Circumstances.  Each Letter of
          Credit may provide that the Issuing Bank may (but shall not be
          required to) pay the beneficiary thereof upon the occurrence of
          an Event of Default and the acceleration of the maturity of the
          Loans or, if payment is not then due to the beneficiary, provide
          for the deposit of funds in an account to secure payment to the
          beneficiary, and that any funds so deposited shall be paid to
          such beneficiary provided that all conditions to such payment are
          satisfied, or returned to the Issuing Bank for distribution to
          the Banks (or, if all Obligations then shall have been
          indefeasibly paid in full, to Borrower) if no payment to such
          beneficiary has been made and if the final date available for
          drawings under the Letter of Credit has passed.  Each payment or
          deposit of funds by the Issuing Bank as provided in this
          paragraph shall be treated for all purposes of this Agreement as
          a drawing duly honored by the Issuing Bank under the related
          Letter of Credit.

                    (d)  Termination of Credit Commitments.  If the Credit
          Commitments shall terminate when any Letter of Credit is
          outstanding, Borrower shall, on or prior to the date of such
          termination:  (i) cause each outstanding Letter of Credit to be
          cancelled, and an amount equal to all amounts previously drawn
          under Letters of Credit and not theretofore reimbursed by

                                          55


          Borrower or converted into Loans pursuant to Section 2.14(e) to
          be paid immediately to or as directed by the Issuing Bank; or
          (ii) deposit, with the Managing Agent, an amount equal to the
          Letter of Credit Usage to secure all outstanding Letters of
          Credit which are not cancelled as described in the preceding
          clause.

                    (e)  Payment of Amounts Drawn Under Letters of Credit. 
          Upon receipt by the Issuing Bank of any request for drawing under
          its Letter of Credit by the beneficiary thereof, the Issuing Bank
          shall notify Borrower and the Managing Agent promptly after its
          receipt of notice of any such request, and in any event at least
          two (2) Business Days prior to the date on which the Issuing Bank
          intends to honor such drawing (unless under the terms of the
          Letter of Credit the Issuing Bank is required to honor a drawing
          prior to the second Business Day after presentation of a request
          for drawing, in which case the Issuing Bank shall provide
          Borrower and the Managing Agent with such notice of such request
          as may be practicable under the circumstances).  The Managing
          Agent shall provide each Bank with a true and complete copy of
          such notice within one (1) Business Day of the Managing Agent's
          receipt of the same.  Borrower shall, and hereby covenants and
          agrees to, reimburse the Issuing Bank on the day on which such
          drawing is honored in an amount, in immediately available funds,
          equal to the amount of such drawing; provided that (i) unless
          Borrower shall have notified the Managing Agent prior to
          11:00 A.M. (Cleveland time) on the Business Day immediately prior
          to the date of such drawing that Borrower intends to reimburse
          the Issuing Bank for the amount of such drawing with funds other
          than the proceeds of Loans, Borrower shall be deemed to have
          given a Request for Advance to the Managing Agent requesting a
          Prime Rate Loan on the date on which such drawing is honored, in
          the amount of such drawing; and (ii) the Banks shall, on the date
          of such drawing, make Loans in the amount of such drawing, the
          proceeds of which shall be applied directly by the Managing Agent
          to reimburse the Issuing Bank for the amount of such drawing; and
          provided further, that if for any reason proceeds of such Loans
          are not received by the Issuing Bank on such date in an amount
          equal to the amount of such drawing, Borrower shall reimburse the
          Issuing Bank, on the next Business Day, in an amount equal to the
          excess of the amount of such drawing over the amount of such
          Loans which are actually received, plus accrued interest on such
          amount at the Default Interest Rate.

                    (f)  Payment by Banks.  If Borrower shall fail to
          reimburse the Issuing Bank as and when required above for the
          amount of any drawing honored by the Issuing Bank under a Letter
          of Credit issued by it, the Issuing Bank shall promptly notify
          each Bank of the unreimbursed amount of such drawing and of such
          Bank's respective Pro Rata Share thereof.  Each Bank shall make
          available to the Issuing Bank an amount equal to its respective
          Pro Rata Share of such unreimbursed drawing, in immediately
          available funds, at the office of the Issuing Bank specified in
          such notice, not later than 12:00 P.M. (Cleveland time) on the
          first Business Day after such Bank's receipt of such notice from
          the Issuing Bank.  If any Bank fails so to make available to the
          Issuing Bank the amount of such Bank's Pro Rata Share of such
          Letter of Credit, the Issuing Bank shall be entitled to recover

                                          56  


          such amount on demand from such Bank, together with interest at
          the customary rate set by the Issuing Bank for the correction of
          errors among banks.  Nothing in this provision shall prejudice
          the right of any Bank to recover from the Issuing Bank any
          amounts made available by such Bank to the Issuing Bank pursuant
          to this provision in the event that it is determined by a court
          of competent jurisdiction that the payment with respect to a
          Letter of Credit by the Issuing Bank in respect of which payment
          was made by the Issuing Bank constituted gross negligence or
          willful misconduct on the part of the Issuing Bank.  The Issuing
          Bank shall, or shall cause the Managing Agent to, distribute to
          each other Bank which has paid all amounts payable by it under
          this Section 2.14(f) with respect to any Letter of Credit issued
          by the Issuing Bank such other Bank's Pro Rata Share of all
          payments received by the Issuing Bank from Borrower in
          reimbursement of drawings honored by the Issuing Bank under such
          Letter of Credit when such payments are received.

                    (g)  Compensation.  Borrower agrees to pay the
          following amounts with respect to each Letter of Credit issued
          pursuant to this Agreement:

                         (i)  a Letter of Credit Fee equal to 1/8
                    of 1% of the Face Amount of such Letter of
                    Credit, payable in advance to the Issuing
                    Bank on the Issuance Date of such Letter of
                    Credit; and

                         (ii)  a Letter of Credit Commission in
                    an amount equal to the LIBOR Margin in effect
                    as of the Issuance Date of such Letter of
                    Credit, multiplied by the Face Amount of such
                    Letter of Credit, payable, in advance, to the
                    Managing Agent for the ratable benefit of the
                    Banks, on the Issuance Date of such Letter of
                    Credit (and, solely in the case of Letters of
                    Credit which are renewed after the expiration
                    of the initial period thereof, on each
                    renewal date for so long as such Letters of
                    Credit remain outstanding); and

                         (iii)  with respect to the issuance, amendment or
                    transfer of each Letter of Credit and each drawing made
                    thereunder, documentary and processing charges in
                    accordance with the Issuing Bank's standard schedule
                    for such charges in effect at the time of such
                    issuance, amendment, transfer or drawing, as the case
                    may be.

          Promptly upon receipt by the Managing Agent of the Letter of
          Credit Commission, the Managing Agent shall distribute to each
          Bank its Pro Rata Share of such amount.

                    (h)  Obligations Absolute.  The obligation of Borrower
          to reimburse the Issuing Bank for drawings made under the Letters
          of Credit and the obligations of the Banks under Section 2.14(f)
          shall be unconditional and irrevocable, and shall be paid


                                          57


          strictly in accordance with the terms of this Agreement under all
          circumstances including, without limitation, the following:

                         (i)  any lack of validity or
                    enforceability of any Letter of Credit;

                         (ii)  the existence of any claim, set-
                    off, defense or other right which Borrower
                    may have at any time against a beneficiary or
                    any transferee of any Letter of Credit (or
                    any persons or entities for whom any such
                    transferee may be acting), the Issuing Bank,
                    the Managing Agent, any Bank or any other
                    Person, whether in connection with this
                    Agreement, the transactions contemplated
                    herein or any unrelated transaction
                    (including any underlying transaction between
                    Borrower and the beneficiary for which the
                    Letter of Credit was procured);

                         (iii)  any draft, demand, certificate or
                    any other document presented under any Letter
                    of Credit proving to be forged, fraudulent,
                    invalid or insufficient in any respect or any
                    statement therein being untrue or inaccurate
                    in any respect;

                         (iv)  payment by the Issuing Bank under
                    any Letter of Credit against presentation of
                    a demand, draft or certificate or other
                    document which does not comply with the terms
                    of such Letter of Credit, provided that such
                    payment does not constitute gross negligence
                    or willful misconduct of the Issuing Bank;

                         (v)  any other circumstance or
                    occurrence whatsoever, which is similar to
                    any of the foregoing; or

                         (vi)  the fact that a default or an
                    Event of Default shall have occurred and be
                    continuing.

                    (i)  Indemnification; Nature of the Issuing Bank's
          Duties.  In addition to amounts payable as elsewhere provided in
          this Section 2.14, and without limiting any other indemnification
          provided for in this Agreement, Borrower agrees to protect,
          indemnify, pay and save the Issuing Bank harmless from and
          against any and all claims, demands, liabilities, damages,
          losses, costs, charges and expenses (including reasonable
          attorneys' fees) which the Issuing Bank may incur or be subject
          to as a consequence, direct or indirect, of (i) the issuance of
          the Letters of Credit, other than as a result of the gross
          negligence or willful misconduct of the Issuing Bank as
          determined by a court of competent jurisdiction, or (ii) the
          failure of the Issuing Bank to honor a drawing under any Letter
          of Credit as a result of any act or omission, whether rightful or
          wrongful, of any present or future de jure or de facto government

                                          58


          or governmental authority.  Borrower assumes all risks of the
          acts and omissions of, or misuse of the Letters of Credit issued
          by the Issuing Bank by, the respective beneficiaries of such
          Letters of Credit.  In furtherance and not in limitation of the
          foregoing, the Issuing Bank shall not be responsible for: 
          (i) the form, validity, sufficiency, accuracy, genuineness or
          legal effect of any document submitted by any party in connection
          with the application for and issuance of Letters of Credit, even
          if any of the foregoing should in fact prove to be invalid,
          insufficient, inaccurate, fraudulent or forged in any respect;
          (ii) the validity or insufficiency of any instrument transferring
          or assigning or purporting to transfer or assign any Letter of
          Credit or the rights or benefits thereunder or proceeds thereof,
          in whole or in part, which may prove to be invalid or ineffective
          for any reason; (iii) the failure of the beneficiary of any
          Letter of Credit to comply fully with conditions required in
          order to draw upon such Letter of Credit; (iv) the errors,
          omissions, interruptions or delays in transmission or delivery of
          any messages, by mail, cable, telegraph, telecopy, telex or
          otherwise, whether or not they be in cipher; (v) the errors in
          interpretation of technical terms; (vi) any loss or delay in the
          transmission or otherwise of any document required in order to
          make a drawing under any Letter of Credit or any proceeds
          thereof; (vii) the misapplication by the beneficiary of any
          Letter of Credit of the proceeds of any drawing under such Letter
          of Credit; and (viii) for any consequences arising from causes
          beyond the control of the Issuing Bank.  None of the above shall
          affect, impair, or prevent the vesting of any of the Issuing
          Bank's rights or powers hereunder.  In determining whether to pay
          under any Letter of Credit, the Issuing Bank shall be responsible
          only to determine that the documents and certificates required to
          be delivered under that Letter of Credit have been delivered and
          that the same comply on their face with the requirements of that
          Letter of Credit.  Borrower shall have no obligation to indemnify
          the Issuing Bank in respect of any liability incurred by the
          Issuing Bank arising solely out of the gross negligence or
          willful misconduct of the Issuing Bank, as determined by a court
          of competent jurisdiction, or out of the wrongful dishonor by the
          Issuing Bank of a proper demand for payment made under the
          Letters of Credit issued by it.

                    (j)  Amendments.  Borrower may request that the Issuing
          Bank amend any Letter of Credit by delivering to the Managing
          Agent and the Issuing Bank a notice specifying the nature, terms
          and proposed date of the requested amendment.  The Issuing Bank
          may amend Letters of Credit, provided that any amendment
          extending the expiry date or increasing the face amount of any
          Letter of Credit shall be permitted only if the Issuing Bank
          would, at the time of the proposed be permitted to issue a new
          Letter of Credit having such an expiry date or face amount under
          this Section 2.14 on the date of the amendment.

                    Section 2.15  Voluntary Termination of the Credit
          Commitments.  Borrower may cause the Banks to terminate this
          Agreement and to terminate the Credit Commitments upon the
          following conditions and requirements:  (a) Borrower shall
          provide the Managing Agent and each Bank with not less than
          thirty (30) days prior, written notice of its election to do so,

                                          59 


          which notice shall specify the date on which Borrower would
          propose to effect such termination (which date may be extended
          for a period not to exceed thirty (30) days, by written notice
          from Borrower to the Managing Agent and the Banks prior to the
          date first specified for such termination); (b) Borrower shall,
          on or before such effective date, prepay all Loans in full in
          accordance with Section 2.5(b) of this Agreement; (c) there shall
          be no Letters of Credit outstanding as of the effective date of
          such termination; (d) Borrower shall pay all fees which, but for
          such termination, would have been payable to the Managing Agent
          and the Banks as contemplated by this Agreement for the unexpired
          balance of the term of this Agreement; and (e) Borrower shall
          pay, or shall reimburse the Managing Agent and each Bank for, all
          out-of-pocket costs and expenses (including reasonable attorneys'
          fees) incurred by them in connection with or as the result of
          Borrower's election to cause the Credit Commitments to be
          terminated as provided in this Section 2.15.  From and after the
          effective date of any termination affected in accordance with
          this Section 2.15, and provided that Borrower shall have complied
          with the requirements set forth above, none of the parties to
          this Agreement shall have any further duties or obligations
          hereunder.

                    Section 2.16  Swingline Loans.

                    (a) In addition to Ratable Loans and Competitive Bid
          Loans available hereunder, Borrower may, on and subject to the
          terms and conditions set forth in this Section 2.16, obtain
          Swingline Loans from the Swingline Lender in the aggregate
          principal amount not to exceed Five Million Dollars ($5,000,000). 
          Swingline Loans will be made available to Borrower for same-day
          borrowings, provided that Borrower shall provide the Managing
          Agent with a Request for Advance for each Swingline Loan not
          later than 1:00 p.m. Cleveland time on the proposed Draw Date for
          each Swingline Loan and otherwise in accordance with Section
          2.13.  Provided that there shall then be no uncured Event of
          Default, and provided further that the making of the requested
          Swingline Loans shall not cause the Outstanding Amount to exceed
          the Maximum Commitment, the Swingline Lender will make the
          proceeds of each requested Swingline Loan available to Borrower
          not later than 4:00 p.m., Cleveland time, on the requested Draw
          Date therefor.

                    (b)  Each Swingline Loan shall be in a principal amount
          not less than One Million Dollars ($1,000,000).  All Swingline
          Loans shall bear interest at the Adjusted Prime Rate.  No
          Swingline Loan shall be outstanding for more than five (5) days,
          and Swingline Loans shall not be outstanding for more than ten
          (10) days in any calendar month.

                    (c)  Each Bank unconditionally agrees that it will,
          upon the written request of the Swingline Lender, purchase an
          amount equal to its Participation Percentage of any Swingline
          Loan regardless of whether the conditions precedent for making
          any Loan otherwise provided in this Agreement are satisfied at
          the time of such request (and regardless of whether a Default or
          Event of Default shall then exist).  Such purchase shall take
          place on the Business Day immediately after the date of the

                                          60


          Swingline Lender's written request therefor.  From and after the
          date on which the Banks purchase their respective Participation
          Percentages of such Swingline Loan (and to the extent of such
          purchases), such Swingline Loan shall:  (i)  be treated, for all
          purposes relevant to this Agreement, as a Ratable Loan made by
          the purchasing Banks, and not as a Swingline Loan made by the
          Swingline Lender (and each Bank's payment of the purchase price
          shall constitute its funding of a Ratable Loan in the amount of
          the purchase price paid by it); and (ii) shall no longer
          constitute a Swingline Loan, except that all interest accruing on
          or attributable to such Swingline Loan for the period prior to
          the date of such purchase shall be paid when due by Borrower to
          the Managing Agent for the benefit of the Swingline Lender and
          all amounts accruing on or attributable to such Loan for the
          period from and after the date of such purchase shall be paid
          when due by Borrower to the Managing Agent for the benefit of the
          purchasing Banks.  If prior to purchasing its Participation
          Percentage of a Swingline Loan an Event of Default of the nature
          described in Section 7.1(h) or (i) of this Agreement shall have
          occurred and such event prevents the consummation of such
          purchase, each Bank will purchase an undivided participating
          interest in such Swingline Loan.  From and after the date of each
          Bank's purchase of its participating interest in a Swingline
          Loan, if the Swingline Lender receives any payment on account
          thereof, the Swingline Lender will distribute to such Bank its
          participating interest in such amount (appropriately adjusted, in
          the case of interest payments; to reflect the period during which
          such Bank's participating interest was outstanding and funded);
          provided, however, that if such payment was received by the
          Swingline Lender and is required to be returned to Borrower, each
          Bank will return to the Swingline Lender any portion thereof
          previously distributed to it by the Swingline Lender.  If any
          Bank shall fail to purchase its Participation Percentage of a
          Swingline Loan upon the Swingline Lender's written request
          therefor (or to purchase a participating interest in a Swingline
          Loan under the circumstances described above), the Swingline
          Lender shall be entitled to recover the amount of such Bank's
          Participation Percentage in such Swingline Loan from such Bank on
          demand, together with interest thereon at the customary rate
          established by the Swingline Lender for the correction of errors
          among banks.


                                      ARTICLE 3.

                        CONDITIONS PRECEDENT TO DISBURSEMENTS

                    Section 3.1  Conditions Precedent to the Initial
          Closing. On or prior to the Closing Date, each of the following
          conditions precedent shall have been satisfied:

                    (a)  Certified Copies of Charter Documents and Bylaws.
          The Managing Agent shall have received from Borrower (i) a copy,
          certified by a duly authorized officer of Borrower to be true and
          complete on and as of the Closing Date, of Borrower's Articles of
          Incorporation, and by-laws or code of regulations as in effect on
          the Closing Date (together with any an all amendments thereto);
          (ii) the charter or other organizational documents of Borrower,

                                          61


          certified by the Ohio Secretary of State; and (iii) a Certificate
          of Good Standing and Certificate of Continued Existence for
          Borrower, each issued by the Ohio Secretary of State as of a date
          not more than five (5) days before the Closing Date.

                    (b)  Proof of Corporate Authority.  The Managing Agent
          shall have received from Borrower copies, certified by a duly
          authorized officer of Borrower to be true and complete on and as
          of the Closing Date, of records of all corporate action taken by
          Borrower to authorize (i) the execution and delivery of this
          Agreement and the other Loan Documents and to which it is or is
          to become a party as contemplated or required by this Agreement;
          (ii) its performance of all of its obligations under each of such
          documents; and (iii) the making by Borrower of the borrowings
          contemplated hereby.

                    (c)  Incumbency Certificate.  The Managing Agent shall
          have received from Borrower an incumbency certificate, dated as
          of the Closing Date, signed by a duly authorized officer and
          giving the name and bearing a specimen signature of each
          individual who shall be authorized (i) to sign, in the name and
          on behalf of Borrower, each of the Loan Documents to which
          Borrower is or is to become a party on the Closing Date; and (ii)
          to give notices and to take other action on behalf of Borrower
          under the Loan Documents.

                    (d)  Officers' Certificates.  The Managing Agent shall
          have received from Borrower a certificate dated as of the Closing
          Date signed by a duly authorized officer of Borrower and
          certifying, on terms acceptable to the Managing Agent, that each
          of the representations and warranties of Borrower in this
          Agreement and in the other Loan Documents was true and correct
          when made, and is true and correct on and as of the Closing Date.

                    (e)  Loan Documents.  (i) Each of the Loan Documents
          shall have been duly and properly authorized, executed and
          delivered by Borrower, and all such documents shall be in full
          force and effect on and as of the Closing Date; and (ii) executed
          originals of each of the Notes shall have been delivered to the
          Banks in accordance with their respective Credit Commitments.
          Executed originals or (as the case may be) executed counterparts
          of each of the other Loan Documents shall have been delivered to
          the Managing Agent and each Bank.

                    (f)  Legality of Transactions.  No change in applicable
          law shall have occurred as a consequence of which it shall have
          become and continue to be unlawful (i) for the Managing Agent or
          any Bank to perform any of its agreements or obligations under
          any of the Loan Documents to which it is a party on the Closing
          Date; or (ii) for Borrower to perform any of its agreements or
          obligations under any of the Loan Documents to which it is a
          party on the Closing Date.

                    (g)  Performance, Etc.  Borrower shall have duly and
          properly performed, complied with and observed, in all material
          respects, each of its covenants, agreements and obligations
          contained in each of the Loan Documents to which Borrower is a
          party or by which Borrower is bound on the Closing Date.  No

                                          62


          event shall have occurred on or prior to the Closing Date, and no
          condition shall exist on the Closing Date, which constitutes or
          would constitute a Default or an Event of Default.

                    (h)  Compliance with Laws. The borrowings made, and
          other financial accommodations provided, under this Agreement are
          and shall be in compliance with the requirements of all
          applicable laws, regulations, rules and orders, including without
          limitation the Environmental Laws and the requirements imposed by
          the SEC or by the Board of Governors of the Federal Reserve
          System under Regulations U, G and X.

                    (i)  Legal Opinion.  The Managing Agent and each Bank
          shall have received a written legal opinion, addressed to the
          Managing Agent and each Bank and dated as of the Closing Date,
          from legal counsel for Borrower, which shall be substantially in
          the form of attached Exhibit I and shall otherwise be acceptable
          to the Managing Agent and each Bank.

                    (j)  Expenses.  Borrower shall have reimbursed the
          Managing Agent for all reasonable out-of-pocket costs and
          expenses, including without limitation all fees and disbursements
          of legal counsel to the Managing Agent which shall have been
          incurred by Managing Agent.  Each Bank agrees that it shall be
          responsible for any legal fees incurred by it in connection with
          the negotiation, review, execution and delivery of the Loan
          Documents.

                    (k)  Payment of Certain Fees.  Borrower shall have paid
          the Agency Fee, and shall have paid the Closing Fee and the
          initial annual installment of the Facility Fee on the Closing
          Date in accordance with Section 5.10.

                    (l)  Purpose Certificate.  The Managing Agent shall
          have received from Borrower on the Closing Date a certificate, in
          form and substance satisfactory to the Managing Agent and each
          Bank and signed by an officer of Borrower, stating the purpose to
          which the proceeds of the Loan or Loans to be made on the Closing
          Date are to be applied, certifying that such purpose is permitted
          under Section 2.8 of this Agreement and providing such other
          information with respect to the use of such proceeds as the
          Managing Agent may reasonably request.

                    (m)  Changes: None Adverse.  From the date of the most
          recent balance sheets referred to in Section 4.5 of this
          Agreement to the Closing Date, no changes shall have occurred in
          the assets, liabilities, financial condition, business,
          operations or prospects of Borrower or Borrower's Consolidated
          Subsidiaries which, individually or in the aggregate, are
          materially adverse to Borrower and its Consolidated Subsidiaries.

                    (n)  Compliance Certificate.  The Managing Agent shall
          have received a Compliance Certificate, the required calculations
          under which shall be modified so as to demonstrate the compliance
          by Borrower with the covenants of this Agreement required to be
          measured in such Certificate, giving effect for the purpose of
          such calculations the disbursement to Borrower of the Loan (or
          Loans) on the Closing Date.

                                          63


                    (o)  Financial Statements.  The Managing Agent and each
          Bank shall have received the financial statements referred to in
          Section 4.5, certified by an officer of Borrower, and the
          Managing Agent and each Bank shall have been satisfied that such
          financial statements accurately reflect the financial status and
          condition of Borrower and its Consolidated Subsidiaries.

                    (p)  Americans with Disabilities Act ("ADA")
          Requirements.  Borrower shall adopt and take commercially
          reasonable efforts to implement a compliance program in order to
          cause each real estate project owned by Borrower or any of its
          Consolidated Subsidiaries which is not in compliance with Title
          III of the Americans with Disabilities Act, as such act may be
          amended, modified or replaced from time to time hereafter (the
          "ADA") to be brought into such compliance, to the extent that
          such action is required by law, at Borrower's sole cost and
          expense, and shall not cause or permit any future improvements to
          all or any part of any such property to be made which are not in
          compliance with the ADA.

                    (q)  Representations and Warranties.  Each of the
          representations and warranties made by or on behalf of Borrower
          in this Agreement or in any other Loan Document shall be true,
          correct and complete in all material respects.

                    (r)  Evidence of Insurance.  Borrower shall have
          provided the Managing Agent with original counterparts of
          Borrower's insurance policies required by the terms of this
          Agreement; such policies shall comply with the requirements
          therefor set forth herein.

                    (s)  Other Approvals.  The Managing Agent shall have
          received such other approvals, opinions, certificates,
          instruments and documents with respect to the transactions
          described herein as it may reasonably request.

                    Section 3.2  Conditions Precedent to Subsequent Loans
          and Letters of Credit.  The obligation of the Banks to make or
          disburse any one or more Loans and to issue any Letters of Credit
          from time to time after the Closing Date shall be subject to the
          satisfaction, prior thereto or concurrently therewith, of each of
          the following conditions precedent:

                    (a)  Legality of Transactions.  It shall not be
          unlawful (a) for any Bank or the Managing Agent to perform any of
          its agreements or obligations under any of the Loan Documents to
          which such Person is a party on the Draw Date of such Loan or the
          Issuance Date of such Letter of Credit; or (b) for Borrower to
          perform any of its agreements or obligations under any of the
          Loan Documents.

                    (b)  Representations and Warranties.  Each of the
          representations and warranties made by or on behalf of Borrower
          to the Banks or the Managing Agent in this Agreement or any other
          Loan Document (a) shall be true and correct when made and (b)
          shall, for all purposes of this Agreement, be deemed to be
          repeated on and as of the date of the Borrower's Request for
          Advance for such Loan or Request for Issuance of Letter of

                                          64  


          Credit, and shall be true and correct in all material respects as
          of each such date.

                    (c)  Performance, etc.  Borrower shall have duly and
          properly performed, complied with and observed, in all material
          respects, each of its covenants, agreements and obligations
          contained in this Agreement and/or in all of the other Loan
          Documents.

                    (d)  No Default.  No event shall have occurred on or
          prior to such date and be continuing on such date, and no
          condition shall exist on such date which constitutes a Default or
          Event of Default, and the making of such Loan or the issuance of
          such Letter of Credit shall not result in a Default or an Event
          of Default.

                    (e)  Proceedings and Documents.  All corporate,
          governmental and other proceedings in connection with the
          transactions contemplated hereby and by the other Loan Documents,
          and all instruments and documents incidental thereto shall be
          completed and in place (and, to the extent required by the
          Managing Agent, duly recorded) in form and substance satisfactory
          to the Managing Agent, and the Managing Agent shall have received
          all such counterpart originals or certified or other copies of
          all such instruments and documents as the Managing Agent shall
          have reasonably requested.

                    (f)  Borrowing Purpose.  Borrower shall have provided
          the Managing Agent with a report describing in detail reasonably
          acceptable to the Managing Agent the proposed use of the proceeds
          of such Loan, and providing such other information as the
          Managing Agent may reasonably request.

                    (g)  Maximum Credit.  The making of such Loan or the
          issuance of such Letter of Credit shall not result in the
          Outstanding Amount exceeding the Maximum Commitment.

                    (h)  Other Approvals.  The Managing Agent shall have
          received such other approvals, opinions, certificates,
          instruments and documents as it may reasonably request.

                                      ARTICLE 4.

                            REPRESENTATIONS AND WARRANTIES

                    Borrower represents and warrants to the Managing Agent
          and to each Bank as follows:

                    Section 4.1  Corporate Existence and Authority.

                    (a)  Borrower:  (i) is duly organized, validly existing
          and in good standing as a corporation under the laws of the State
          of Ohio; (ii) has full corporate power and authority and full
          legal right to own or to hold under lease its Property and to
          conduct its businesses as they are presently conducted; and (iii)
          has timely filed all tax returns and duly made all elections
          necessary or appropriate for Borrower to be taxed as a REIT under
          Sections 856 through 860 of the Code for each fiscal year of

                                          65 


          Borrower since 1994, and is a self-administered REIT.  Borrower
          is qualified and licensed, admitted or approved to do business in
          each jurisdiction wherein the character of its Property or the
          nature of its business make such qualification necessary or
          advisable and where the failure to so qualify would have a
          materially adverse effect on Borrower.

                    (b)  Borrower has appropriate corporate power and
          authority, and full legal right, to enter into this Agreement and
          each of the other Loan Documents, and to perform, observe and
          comply with all of its agreements and obligations under each and
          all of such documents.

                    (c)  Except as set forth on Schedule 4.1(c), Borrower
          does not own or hold of record (whether directly or indirectly)
          any shares of any class in the capital of any corporation, nor
          does Borrower own or hold (whether directly or indirectly) any
          legal and/or beneficial equity interest in any partnership,
          business trust or joint venture or in any other unincorporated
          trade or business enterprise.

                    Section 4.2  Due Authorization.

                    (a)  The execution and delivery by Borrower of this
          Agreement and each of the other Loan Documents, the performance
          by Borrower of all of its agreements and obligations under such
          documents, and the making by Borrower of the borrowings
          contemplated by this Agreement have been duly authorized by all
          necessary corporate action on the part of Borrower and do not and
          will not (i) contravene any provision of its charter documents or
          by-laws or code of regulations (each as in effect from time to
          time); (ii) conflict with, or result in a breach of the terms,
          conditions or provisions of, or constitute a default under, or
          (except as expressly contemplated by the terms of this Agreement)
          result in the creation of any Lien upon any of the Property of
          Borrower under any agreement, trust deed, indenture, mortgage or
          other instrument to which Borrower is a party or by which
          Borrower or any Property of Borrower is bound or affected; (iii)
          violate or contravene any provision of any law, rule or
          regulation (including, without limitation, Regulations G, T, U or
          X of the Board of Governors of the Federal Reserve System) or any
          order, ruling or interpretation thereunder or any decree, order
          or judgment of any court or governmental or regulatory authority,
          bureau, agency or official (all as from time to time in effect
          and applicable to Borrower); or (iv) require any waivers,
          consents or approvals by any of the creditors or trustees for
          creditors of Borrower or any other Person.

                    (b)  Except as to matters which Borrower has procured,
          obtained or performed prior to or concurrently with its execution
          and delivery of this Agreement, no approval, consent, order,
          authorization or license by, or giving notice to, or taking any
          other action with respect to, any governmental or regulatory
          authority or agency is required under any provision of any
          applicable law:

                    (i)  for the execution and delivery by Borrower of this
                    Agreement, each Note, and the other Loan Documents, for

                                          66 


                    the performance by Borrower of any of the agreements
                    and obligations hereunder or thereunder or for the
                    making by Borrower of the borrowing contemplated by
                    this Agreement, or for the conduct by Borrower of its
                    business; or

                    (ii) to ensure the continuing legality, validity,
                    binding effect, enforceability or admissibility in
                    evidence of this Agreement, the Notes and the other
                    Loan Documents.

                    Section 4.3  Enforceability of Documents.

                    (a)  On or before the Closing Date, Borrower will have
          duly executed and delivered each of the Loan Documents required
          of it by this Agreement, and each such Loan Document will be in
          full force and effect.  Each Loan Document shall constitute the
          legal, valid and binding obligation of Borrower, enforceable
          against Borrower in accordance with its respective terms.

                    (b)  The representations and warranties made by
          Borrower in this Section 4.3 are subject to the following
          qualifications:

                    (i)  the enforceability of any rights and remedies
                    provided in any of the Loan Documents or against any
                    particular party thereto is subject to applicable
                    bankruptcy, reorganization, moratorium or other similar
                    laws affecting generally the enforcement of creditors'
                    rights; and

                    (ii)  the availability of equitable remedies for the
                    enforcement of any provision of any of the Loan
                    Documents may be subject to the discretion of the court
                    before which any proceeding for the enforcement of any
                    provision may be brought.

                    Section 4.4  No Default.

                    (a)  No event has occurred and is continuing, and no
          condition exists, which constitutes a Default or an Event of
          Default.

                    (b)  No default by Borrower and no accrued right of
          rescission, cancellation or termination on the part of Borrower,
          exists under this Agreement or any of the other Loan Documents.

                    Section 4.5  Financial Statements.  Borrower has
          furnished the Managing Agent with copies of its annual financial
          statements dated December 31, 1997, as audited by Borrower's
          Accountants and certified by Borrowers' chief financial officer,
          together with Borrower's unaudited quarterly financial statements
          for the quarter ended as of September 30, 1998, certified by
          Borrower's chief financial officer, all of which have been
          prepared in accordance with GAAP.  Such balance sheets and other
          financial statements present fairly the financial condition of
          Borrower and its Consolidated Subsidiaries as of the respective
          dates thereof. Such statements of income present fairly the

                                          67


          results of operations of Borrower and its Consolidated
          Subsidiaries for the fiscal period then ended.  There are no
          material liabilities or obligations, secured or unsecured
          (whether accrued, absolute or actual, contingent or otherwise),
          which were not reflected in the balance sheets of Borrower as at
          such date or in the footnotes thereto, and which should, in
          accordance with GAAP, have been reflected in such balance sheets.

                    Section 4.6  No Adverse Changes.  No changes have
          occurred in the assets, liabilities or financial condition of 
          Borrower or its Consolidated Subsidiaries from those reflected in
          the most recent balance sheets referred to in Section 4.5 hereof
          which, individually or in the aggregate, have been materially
          adverse.  Since the date of the most recent balance sheet, there
          has been no materially adverse development in the business or in
          the operations or prospects of Borrower.

                    Section 4.7  Title to Assets.  Except as set forth in
          Schedule 4.7, Borrower or a Consolidated Subsidiary has good,
          sufficient and legal title to, or leasehold interest in, all the
          Property and assets reflected in the most recent balance sheet
          referred to in Section 4.5, other than assets disposed of since
          the date of such balance sheet in the ordinary course of business
          or pursuant to a plan of disposition of assets disclosed to and
          approved by the Required Banks.

                    Section 4.8  Indebtedness for Borrowed Money.  Except
          as permitted under Section 6.7, no Indebtedness of Borrower is
          secured by or otherwise benefits from any Lien on or with respect
          to the whole or any part of Borrower's properties or assets,
          present or future.  There exists no default or event or condition
          which, with the giving of notice or passage of time, or both,
          would constitute a default under the provisions of any instrument
          evidencing or securing any Indebtedness of Borrower or of any
          agreement relating thereto.

                    Section 4.9  Litigation.  Except as disclosed in
          Schedule 4.9 or pursuant to Section 5.5, there is no pending
          action, suit, proceeding or investigation pending, or, to
          Borrower's knowledge, threatened, before any court, governmental
          or regulatory authority, agency, commission or official, board of
          arbitration or arbitrator against Borrower or in which Borrower
          is a participant which, if determined adversely to Borrower,
          could reasonably be expected to affect, in any material and
          adverse way, the financial position, assets, business, operations
          or prospects of Borrower.  There are no proceedings pending or
          threatened against Borrower which call into question the validity
          or enforceability of any of the Loan Documents.

                    Section 4.10  No Materially Adverse Contracts. 
          Borrower is not a party to or bound by any contracts, agreements
          or instruments (whether written or oral) which, either
          individually or in the aggregate, materially adversely affect the
          financial position, business, operations or prospects of
          Borrower.

                    Section 4.11  Tax Returns.  Borrower has filed all
          federal, state and other tax returns required to be filed by it

                                          68


          and has made reasonable provisions, in accordance with GAAP, for
          the payment of all taxes (if any) which have or may become due
          and payable pursuant to any of the said returns or pursuant to
          any matters raised by audits or for other reasons.  In addition,
          Borrower has paid or caused to be paid all real and personal
          property taxes and assessments and other governmental charges
          lawfully levied or imposed on or against it or its Property,
          other than those presently payable without payment of interest or
          penalty and those which are subject to contests initiated by
          Borrower in good faith and diligently prosecuted, in each case as
          permitted by and subject to the requirements of Section 5.8,
          below.

                    Section 4.12  Contracts with Affiliates or
          Subsidiaries.  (a) Except as permitted by Section 6.9 hereof and
          as otherwise set forth on Schedule 4.1(c) hereto, Borrower is not
          a party to or otherwise bound by any material agreements,
          instruments or contracts (whether written or oral) with any
          Affiliate or Subsidiary.

                    (b)  Except as permitted by Section 6.9 and as
          otherwise set forth on Schedule 4.1(c) hereto, there is no
          Indebtedness for Borrowed Money owing by Borrower to any
          Affiliate nor is there Indebtedness for Borrowed Money owing by
          any Affiliate to Borrower.

                    Section 4.13  Employee Benefit Plans.  Borrower does
          not maintain any Employee Benefit Plans or Guaranteed Pension
          Plans, except for those which are described on Schedule 4.13,
          attached hereto and made a part hereof by this reference.

                    Section 4.14  Governmental Regulation.  Borrower is not
          a "public utility company", a "holding company" or a "subsidiary"
          or an "affiliate" of a "holding company," as such terms are
          defined in the federal Public Utility Holding Company Act of
          1935, as amended. Borrower is not an "investment company" or a
          company "controlled" by an "investment company," as such terms
          are defined in the federal Investment Company Act of 1940, as
          amended.  Borrower is not subject to regulation under the Public
          Utility Holding Company Act of 1935, the Federal Power Act, the
          Interstate Commerce Act or the Investment Company Act of 1940 or
          under any federal or state statute or regulation limiting its
          ability to incur Indebtedness for Borrowed Money.

                    Section 4.15  Securities Activities. Borrower is not
          engaged in the business of extending credit for the purpose of
          purchasing or carrying any "margin security" or "margin stock" as
          such terms are used in Regulation U and X of the Board of
          Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and
          224.

                    Section 4.16  Disclosure.  Neither this Agreement nor
          any other Loan Document, or any other document, certificate or
          written statement furnished to the Managing Agent or any Bank by
          or on behalf of Borrower for use in connection with the
          transactions contemplated by 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 therein not

                                          69


          misleading as of the date of such document, certificate or other
          statement.

                    Section 4.17  No Material Default.  Borrower is not in
          default under any order, writ, judgment, injunction, decree,
          statute or governmental rule, indenture, agreement, contract,
          lease or other instrument or contract applicable to it, which
          default would have a material adverse effect on the business,
          assets, Properties or condition, financial or otherwise, of
          Borrower or in the performance of any covenants or conditions
          respecting any of its Indebtedness; no holder of any Indebtedness
          of Borrower has given notice of any asserted default thereunder,
          and no liquidation or dissolution of Borrower and no
          receivership, insolvency, bankruptcy, reorganization or other
          similar proceedings relative to Borrower or its Property is
          pending or (to Borrower's knowledge) threatened.

                    Section 4.18  Environmental Conditions.  (a) Borrower
          has obtained all necessary permits, licenses, variances,
          satisfactory clearances and all other necessary approvals
          (collectively the "EPA Permits") for the operation and conduct of
          its business from all applicable federal, state, and local
          governmental authorities, utility companies or
          development-related entities including, but not limited to, any
          and all appropriate Federal or State environmental protection
          agencies and other County or City departments, public water works
          and public utilities.  All EPA Permits are in full force and
          effect; no such EPA Permit has expired or been suspended, denied
          or revoked, or is under challenge by any Person.  Borrower is in
          compliance with each EPA Permit, and Borrower has no knowledge or
          information concerning any condition or fact which might or could
          cause a suspension, denial or revocation of any of Borrower's EPA
          Permits.

                    (b)  Neither Borrower nor any Property owned by
          Borrower is (i) subject to any material private or governmental
          litigation, threatened litigation, Lien or judicial or
          administrative notice, order or action relating to Hazardous
          Substances or environmental problems, impairments or liabilities;
          or (ii) with any applicable notice or lapse of time (or both),
          and/or failure to take certain curative or remedial actions, in
          direct or indirect violation of any Environmental Laws.

                    (c)  To the best of Borrower's knowledge, there has
          been no Release (as defined in CERCLA) into, on or from any
          Property and no Hazardous Substances (except for (x) "Household
          Waste" as that term is defined at 40 C.F.R. 261.4(b)(l) (1990),
          and (y) de minimis amounts of Hazardous Substances which neither
          violate any Environmental Laws nor require any affirmative
          remediation or corrective action) are located on or have been
          treated, stored, processed, disposed of, handled, transported to
          or from, disposed of upon the or into, upon or from any of
          Borrower's Property.  Borrower shall not allow any Hazardous
          Substance to exist or be treated, stored, disposed, Released,
          located, discharged, possessed, managed, processed, or otherwise
          handled on any Property or in the operation or conduct of its
          business in violation of Environmental Laws, and shall comply
          with all Environmental Laws affecting Borrower's Property.

                                          70


                    (d)  Borrower and its Affiliates do not and shall not
          transport or engage in the business of transporting, in any
          manner, any Hazardous Substances.

                    (e)  Borrower is not aware of any circumstances which
          would result in any material obligation under any Environmental
          Law to remediate any Hazardous Substances in, on or under any of
          Borrower's Property.

                    Section 4.19  Licenses and Permits.   Borrower owns or
          possesses all material Licenses and Permits and rights with
          respect thereto necessary for the lawful and proper conduct of
          its business as presently conducted and proposed to be conducted,
          without any known conflict with the rights of others, free of any
          Lien not permitted by Section 6.7 of this Agreement.  All such
          Licenses and Permits are in full force and effect, and Borrower
          is in compliance with the requirements imposed by, or in respect
          of, all such Licenses and Permits without any known conflict with
          the valid rights of others which could affect or impair in any
          material manner the business, assets or condition, financial or
          otherwise, of Borrower.  No event has occurred and is continuing
          which permits, or after notice or lapse of time or both would
          permit, the revocation or termination of any such License or
          Permit, or affect the rights of Borrower thereunder.  There is no
          litigation or other proceeding or dispute with respect to any
          such Licenses and Permits which has, or is reasonably likely to
          have, any material adverse effect on the validity or continued
          availability of any such Licenses and Permits.

                    Section 4.20  Solvency.  (a) Immediately after the date
          hereof and immediately following the making of each Loan and
          after giving effect to the application of the proceeds of such
          Loans:  (i) the fair value of the assets of Borrower and its
          Consolidated Subsidiaries, at a fair valuation, exceeds and will
          exceed the debts and liabilities, subordinated, contingent or
          otherwise, of Borrower and its Consolidated Subsidiaries; (ii)
          the present fair saleable value of the Property of Borrower and
          its Consolidated Subsidiaries will be greater than the amount
          that would be required to pay the probable liability of Borrower
          and its Consolidated Subsidiaries on their debts and other
          liabilities, subordinated, contingent or otherwise, as such debts
          and other liabilities become absolute and matured; (iii) Borrower
          and its Consolidated Subsidiaries will be able to pay their debts
          and liabilities, subordinated, contingent or otherwise, as such
          debts and liabilities become absolute and matured; and (iv)
          Borrower and its Consolidated Subsidiaries will not have
          unreasonably small capital with which to conduct the businesses
          in which they are engaged as such businesses are now conducted
          and are proposed to be conducted after the date hereof.

                    (b)  Borrower does not intend to, or to permit any of
          its Consolidated Subsidiaries to, and does not believe that it or
          any of its Consolidated Subsidiaries will, incur debts beyond its
          ability to pay such debts as they mature, taking into account the
          timing of and amounts of cash to be received by it or any such
          Consolidated Subsidiary and the timing of the amounts to be
          payable in respect of Borrower's Consolidated Indebtedness.


                                          71

                    Section 4.21  Insurance.  Borrower and its Subsidiaries
          carry insurance on their Real Estate Projects with Qualified
          Insurers (as defined below), in such amounts, with such
          deductibles and covering such risks as are customarily carried by
          companies engaged in similar businesses and owning similar Real
          Estate Projects in localities where Borrower and its Subsidiaries
          operate, including, without limitation:

                    (a)  Property and casualty insurance (including
          coverage for flood and other water damage for any Real Estate
          Project located within a 100-year flood plain) in the amount of
          the replacement cost of the improvements at the Project;

                    (b)  Builder's risk insurance for any Real Estate
          Project under construction in the amount of the construction cost
          of such Real Estate Project;

                    (c)  Loss of rental income insurance in the amount not
          less than one year's gross revenues from the Real Estate
          Projects; and

                    (d)  Comprehensive general liability insurance in the
          amount of $20,000,000 per occurrence.

                    Section 4.22  REIT Status.  Borrower is in good
          standing on the New York Stock Exchange and is qualified and
          currently is in compliance in all material respects with all
          provisions of the Code applicable to the qualification of
          Borrower as a REIT.

                    Section 4.23  "Year 2000" Compliance.  Borrower has
          conducted a comprehensive review and assessment of its computer
          applications and has made inquiry of its key suppliers, vendors
          and customers with respect to the "year 2000 problem" (that is,
          the risk that computer applications may not be able properly to
          perform date-sensitive functions after December 31, 1999) and,
          based on that review and inquiry, Borrower does not believe the
          year 2000 problem will result in a material adverse change in
          Borrower's business, financial condition or ability to repay the
          Obligations as and when required by this Agreement.


                                      ARTICLE 5.

                          AFFIRMATIVE COVENANTS OF BORROWER

                    Borrower covenants with and warrants to the Managing
          Agent and to each Bank that from and after the Closing Date and
          until all of the Obligations are paid and satisfied in full,
          Borrower shall comply with, observe, perform or fulfill all of
          the covenants set forth in this Article 5.

                    Section 5.1  Reports and Other Information. 
          (a) Borrower shall provide to the Managing Agent as soon as
          available, and in any event within forty-five (45) days after the
          close of each of the first three quarters of each fiscal year of
          Borrower, balance sheets of Borrower as of the end of such
          quarter and statements of income and statements of cash flow of

                                          72


          Borrower and its Consolidated Subsidiaries for the period
          commencing at the end of the previous fiscal year and ending with
          the end of such quarter, certified by the chief financial
          officer, principal accounting officer or chief executive officer
          of Borrower, together with a certificate of such officer stating
          that of the date of such certificate and to the best of his
          knowledge, after reasonable inquiry, no event has occurred which
          constitutes an Event of Default or would constitute an Event of
          Default with the giving of notice or the lapse of time or both,
          or, if an Event of Default or such an event has occurred and is
          continuing, a statement as to the nature thereof and the action
          which Borrower has taken or proposes to take with respect
          thereto, and further setting out in such detail as is reasonably
          required by the Banks (i) Borrower's compliance with the
          requirements of Sections 5.19, 6.7 and 6.8 hereof, (ii) a
          borrowing report, certified by a duly authorized officer of
          Borrower, on behalf of Borrower, and (iii) such other information
          as may reasonably be requested by the Banks with respect to
          Borrower or Borrower's business or Property.

                    (b)  Borrower shall provide to the Managing Agent as
          soon as available, and in any event within ninety (90) days after
          the end of each fiscal year of Borrower a copy of the annual
          financial statements of Borrower and its Consolidated
          Subsidiaries for such year, including therein a copy of the
          balance sheets of Borrower and its Consolidated Subsidiaries as
          of the end of such fiscal year and statements of income and
          statements of cash flow and statements of Shareholders' Equity of
          Borrower and its Consolidated Subsidiaries, certified without
          qualification by Borrower's Accountants, together with a
          certificate of the chief financial officer, principal accounting
          officer or chief executive officer of Borrower stating that, as
          of the date of such certificate, to the best of his knowledge and
          after reasonable inquiry, no event has occurred which constitutes
          an Event of Default or would constitute an Event of Default with
          the giving of notice or the lapse of time or both, or, if an
          Event of Default or such an event has occurred and is continuing,
          a statement as to the nature thereof and the action which
          Borrower has taken or proposes to take with respect thereto and
          further setting out in such detail as is reasonably required by
          the Banks (i) Borrower's compliance with the requirements of
          Sections 5.19, 6.7 and 6.8 hereof, (ii) a borrowing report,
          certified by a duly authorized officer of Borrower, and (iii)
          such other information as may be reasonably requested by the
          Banks with respect to Borrower or Borrower's business or
          Property.

                    (c)  Borrower shall provide to the Managing Agent,
          promptly after sending or filing thereof, copies of all reports
          which Borrower sends to its shareholders, and copies of all
          reports and registration statements which Borrower files with the
          Securities and Exchange Commission.

                    (d)  Borrower shall provide to the Managing Agent as
          soon as possible, and in any event within five (5) days after the
          occurrence thereof, any information as to the occurrence of an
          Event of Default, or an event which with notice or lapse of time
          or both would constitute an Event of Default, continuing on the

                                          73


          date of such statement, together with a statement of the chief
          financial officer or treasurer of Borrower setting forth the
          details of such Event of Default or event, and the action which
          Borrower proposes to take with respect thereto.

                    (e)  Borrower shall provide to the Managing Agent,
          immediately upon Borrower's receipt thereof, copies of all
          notices and other written communications received by Borrower
          from Moody's or S&P relating to any change, or proposed change,
          in Borrower's Debt Rating (including, without limitation, any
          notice that either Moody's or S&P has changed, or is changing,
          the basis on which its ratings are established or reported).

                    (f)  Borrower shall provide the Managing Agent with
          such other information relating to Borrower (including, without
          limitation, any business plan of Borrower) as the Managing Agent
          may from time to time reasonably request.

                    Section 5.2  Maintenance of Property; Insurance. 
          (a) Borrower covenants and agrees to keep and maintain all of its
          Property in good repair, working order and condition, reasonable
          wear and tear excepted, and from time to time to make, or use all
          reasonable legal remedies to cause to be made, all proper
          repairs, renewals or replacements, betterments and improvements
          thereto so that the business carried on in connection therewith
          may be properly and advantageously conducted at all times.

                    (b)  Borrower covenants and agrees to keep all of its
          Properties insured against loss or damage by theft, fire, smoke,
          sprinklers, riot and explosion, such insurance (the "Insurance")
          to be in such form, in such amounts and against such other risks
          and hazards as are customarily maintained by other Persons
          operating similar businesses and having similar properties in the
          same general areas, including but not limited to liability
          coverage, with an insurer which is financially sound and
          reputable and which has been accorded a rating by A.M. Best
          Company, Inc. (or any successor rating agency) of A-/X (or any
          replacement rating of equivalent stature) or better (a "Qualified
          Insurer").  In the event that an insurer ceases to be a Qualified
          Insurer during the term of any Insurance policy, Borrower shall
          replace such coverage, at the end of the then-current policy
          term, by a policy issued by a Qualified Insurer.  Borrower
          further shall, in addition, require that the insurer with respect
          to each such Insurance policy provide for at least thirty (30)
          days' advance written notice to Borrower of any cancellation or
          termination of, or other change of any nature whatsoever in, the
          coverage provided under any such policy.

                    Section 5.3  REIT Status; Corporate Existence; Listing. 
          (a)  Borrower shall make all filings under the Code necessary to
          preserve and maintain (i) its qualifications as a REIT under the
          Code and (ii) the applicability to Borrower and its shareholders
          of the method of taxation provided for in Section 857(b) of the
          Code (and any successor provision thereto).

                    (b)  Borrower shall preserve and maintain its existence
          and all of its rights, franchises and privileges as an Ohio
          corporation.

                                          74 


                    (c)  Borrower shall preserve and maintain the listing
          of its common stock on the New York Stock Exchange.

                    Section 5.4  Compliance with Laws.  (a) Borrower shall,
          and hereby covenants and agrees to, comply with all acts, rules,
          regulations, orders, directions and ordinances of any
          legislative, administrative or judicial body or official,
          applicable to the operation of Borrower's business.

                    (b)  Borrower will promptly notify the Managing Agent
          in the event that Borrower receives any notice, claim or demand
          from any governmental agency which alleges that Borrower is in
          material violation of any of the terms of, or has failed to
          comply with any applicable order issued pursuant to any Federal,
          state or local statute regulating its operation and business,
          including, but not limited to, the Occupational Safety and Health
          Act, the ADA and all Environmental Laws.

                    Section 5.5  Notice of Litigation; Judgments.  Borrower
          shall furnish or cause to be furnished to the Managing Agent,
          promptly (and, in any event, within five (5) Business Days) after
          Borrower shall have first become aware of the same, a written
          notice setting forth full particulars of and what action Borrower
          is taking or proposes to take with respect to (a) any final
          judgment in an amount exceeding Five Hundred Thousand Dollars
          ($500,000.00) rendered against Borrower or any Affiliate of
          Borrower; (b) the commencement or institution of any legal or
          administrative action, suit, proceeding or investigation by or
          against Borrower in or before any court, governmental or
          regulatory body, agency, commission or official, board of
          arbitration or arbitrator, the outcome of which could materially
          and adversely affect Borrower's current or future financial
          position, assets, business, operations or prospects, or could
          prevent or impede the implementation or completion, observance or
          performance of any of the arrangements or transactions
          contemplated by any of the Loan Documents; or (c) the occurrence
          of any adverse development, not previously disclosed by Borrower
          to the Managing Agent in writing, in any such action, suit,
          proceeding or investigation.

                    Section 5.6  Notice of Other Events.  (a) If (and on
          each occasion that) any event shall occur or any condition shall
          develop which constitutes a Default or an Event of Default, then,
          promptly (and, in any event, within five (5) Business Days) after
          Borrower shall have first become aware of the same, Borrower will
          furnish or cause to be furnished to the Managing Agent a written
          notice specifying the nature and the date of the occurrence of
          such event or (as the case may be), the nature and the period of
          existence of such condition and what action Borrower is taking or
          proposes to take with respect thereto.

                    (b)  Immediately upon Borrower's first becoming aware
          of any of the following occurrences, Borrower will furnish or
          cause to be furnished to the Managing Agent (for further
          distribution to Banks) written notice with full particulars of:  
          (i) the business failure, insolvency or bankruptcy of Borrower;
          (ii) the rescission, cancellation or termination, or the creation
          or adoption, of any material agreement or contract to which

                                          75 


          Borrower is a party; (iii) any material labor dispute, any
          attempt by any labor union or organization representatives to
          organize or represent employees of Borrower, or any unfair labor
          practices or proceedings of the National Labor Relations Board
          with respect to Borrower; or any defaults or events of default
          under any material agreement of Borrower or any material
          violations of any laws, regulations, rules or ordinances of any
          governmental or regulatory body by Borrower or with respect to
          any of Borrower's Property.

                    Section 5.7  Inspections.  Borrower shall permit any
          officer, employee, consultant or other representative or agent of
          the Managing Agent or of any Bank to visit and inspect, from time
          to time and at any reasonable time, after prior notice to
          Borrower, any of the assets or Property owned or held under lease
          by Borrower, to examine the books of account, records, reports
          and the papers (and to make copies thereof and to take extracts
          therefrom) of Borrower and to discuss the affairs, finances and
          accounts of Borrower with the directors and executive officers,
          as the case may be, of Borrower.  All of such activities shall be
          coordinated by and through the Managing Agent.

                    Section 5.8  Payment of Taxes and Other Claims. 
          Borrower shall pay and discharge promptly all taxes, assessments
          and other governmental charges or levies at any time imposed upon
          it or upon its income, revenues or Property, as well as all
          claims of any kind (including claims for labor, material or
          supplies) which, if unpaid, might by law become a Lien or charge
          upon all or any part of its income, revenues or Property. 
          Notwithstanding the foregoing to the contrary, Borrower may,
          provided that there is not then an Event of Default hereunder,
          contest the propriety or amount of any such taxes, assessments or
          governmental charges, or of any such claims, if (a) such contest
          is instituted in good faith and prosecuted with reasonable
          diligence; (b) such contest shall preclude the sale or forfeiture
          of the affected Property (or Borrower shall provide the Managing
          Agent with such reasonable security or other assurances as may be
          requested by the Managing Agent in connection with such contest);
          and (c) Borrower shall indemnify the Managing Agent and all of
          the Banks of and from any and all liability, loss, cost or
          expense incurred by or asserted against any such party in
          connection with, or in consequence of, any such contest.

                    Section 5.9  Payment of Indebtedness.  Borrower will
          duly and punctually pay or cause to be paid the principal and
          interest on the Loans, all draws and disbursements under the
          Letters of Credit and all fees and other amounts payable
          hereunder or under the Loan Documents, as and when required by
          this Agreement and/or the other Loan Documents.  Borrower shall
          pay all other Indebtedness (whether existing on the date hereof
          or arising at any time thereafter) as and when the same is due
          and payable.

                    Section 5.10  Payment of Fees.  Borrower shall, and
          hereby covenants and agrees to, pay the following fees as and
          when described below:



                                          76 


                    (a)  The Facility Fee, payable to the Managing Agent
          for the ratable benefit of the Banks annually in advance, on the
          Closing Date and on each anniversary of such date during the
          pendency of this Agreement in an amount equal to fifteen
          hundredths of one percent (0.15%) of the Maximum Commitment;

                    (b)  The Agency Fee in accordance with the letter
          agreement described above;

                    (c)  The Letter of Credit Fee in accordance with
          Section 2.14; 

                    (d)  The Letter of Credit Commission in accordance with
          Section 2.14; and 

                    (e)  The Competitive Bid Fee in accordance with
          Section 2.3.

                    Section 5.11  Performance of Obligations Under the Loan
          Documents.  Borrower will duly and properly perform, observe and
          comply with all of its agreements, covenants and obligations
          under this Agreement and each of the other Loan Documents.

                    Section 5.12  Governmental Consents and Approvals. 
          (a) Borrower will obtain or cause to be obtained all such
          approvals, consents, orders, authorizations and licenses from,
          give all such notices promptly to, register, enroll or file all
          such agreements, instruments or documents promptly with, and
          promptly take all such other action with respect to, any
          governmental or regulatory authority, agency or official, or any
          central bank or other fiscal or monetary authority, agency or
          official, as may be required from time to time under any
          provision of any applicable law:

                    (i)  for the performance by Borrower of any of its
                    agreements or obligations under the Notes, this
                    Agreement or any of the other Loan Documents or for the
                    payment by Borrower to the Managing Agent at its Head
                    Office of any sums which shall become due and payable
                    by Borrower to the Managing Agent or any Bank
                    thereunder;

                    (ii)  to ensure the continuing legality, validity,
                    binding effect or enforceability of the Notes or any of
                    the other Loan Documents or of any of the agreements or
                    obligations thereunder of Borrower; or

                    (iii)  to continue the proper operation of the business
                    and operations of Borrower.

                    (b)  Borrower shall duly perform and comply with the
          terms and conditions of all such approvals, consents, orders,
          authorizations and Licenses and Permits from time to time granted
          to or made upon Borrower.

                    Section 5.13  Notice as to Certain Documents.  If (and
          on each occasion that) any of the following events shall occur:


                                          77  


                    (i)  the charter or other organizational documents of
                    Borrower shall at any time be modified or amended in
                    any respect whatever; or

                    (ii) the by-laws or code of regulations of Borrower
                    shall at any time be modified or amended in any respect
                    whatever;

          then promptly (and, in any event, within one (1) Business Day)
          after the occurrence of any such event, Borrower shall furnish
          the Managing Agent with a true and complete copy of each such
          modification, amendment or supplement.

                    Section 5.14  Notice of Termination of Certain
          Documents.  (a)  If (and on each occasion that) any of the
          following events shall occur:

                    (i)  any Loan Document shall at any time be terminated,
                    cancelled or rescinded for any reason whatever; or

                    (ii)  any action at law, suit in equity or other legal
                    proceeding shall at any time be commenced or threatened
                    in writing by any person (A) to terminate, cancel or
                    rescind any Loan Document, or (B) to enforce any other
                    Person's performance or observance of or compliance
                    with any covenants, agreements or obligations under any
                    Loan Document; or

                    (iii)  any Person which is a party to or otherwise
                    bound by any Loan Document shall fail or refuse to
                    perform, comply with or observe or shall otherwise
                    breach any one or more of its covenants, agreements or
                    obligations under such Loan Document;

          then Borrower will promptly (and, in any event, within one (1)
          Business Day) after Borrower shall have first become aware of the
          occurrence of any such event, furnish to the Managing Agent
          written notice setting forth the particulars thereof.

                    (b)  Borrower will take or cause to be taken, promptly
          and without any expense to the Managing Agent or any Bank, all
          such action as may be required to prevent, and will refrain from
          taking any action that might cause, the termination,
          cancellation, amendment or rescission of this Agreement or any of
          the other Loan Documents.

                    Section 5.15  Employee Benefit Plans and Guaranteed
          Pension Plans.  (a) Borrower will not establish any Guaranteed
          Pension Plans or Employee Benefit Plans without the Managing
          Agent's prior written consent (which will not be unreasonably
          withheld or delayed), (b) Borrower will make full payment when
          due of all amounts which, under the provisions of Employee
          Benefit Plans or under applicable law, are required to be paid as
          contributions thereto, (c) Borrower will not permit to exist any
          accumulated funding deficiency, whether or not waived, (d)
          Borrower will file on a timely basis all reports, notices and
          other filings required by any governmental agency with respect to
          any of its Employee Benefit Plans, (e) Borrower will make any

                                          78 


          payments to Multiemployer Plans required to be made under any
          agreement relating to such Multiemployer Plans, or under any law
          pertaining thereto, (f) Borrower will cause the actuarial present
          value of all benefit commitments under each Guaranteed Pension
          Plan to be less than the current value of the assets of such
          Guaranteed Pension Plan allocable to such benefit commitments,
          (g) Borrower will furnish to all participants, beneficiaries and
          employees under any of the Employee Benefit Plans, within the
          periods prescribed by law, all reports, notices and other
          information to which they are entitled under applicable law, and
          (h) Borrower will take no action which would cause any of the
          Employee Benefit Plans to fail to meet any qualification
          requirement imposed by the Code, as amended.  As used herein, the
          term "accumulated funding deficiency" has the meaning specified
          in Section 302 of ERISA and Section 412 of the Code, and the
          terms "actuarial present value", "benefit commitments" and
          "current value" have the meaning specified in Section 4001 of
          ERISA.

                    Section 5.16  Further Assurances.  Borrower will
          execute, acknowledge and deliver, or cause to be executed,
          acknowledged and delivered, any and all such further assurances
          and other agreements or instruments, and take or cause to be
          taken all such other action, as shall be reasonably requested by
          the Managing Agent from time to time in order to give full effect
          to any of the Loan Documents.

                    Section 5.17  Deliberately Omitted.

                    Section 5.18  Use of Proceeds.  Borrower shall use all
          Loan proceeds for the purposes permitted by Section 2.8 of this
          Agreement.

                    Section 5.19  Financial Covenants.

                    (a)  Consolidated Indebtedness to Market Value Ratio. 
          Aggregate Consolidated Indebtedness shall not, at any time
          through and including December 31, 2000, exceed fifty-five
          percent (55%) of Aggregate Market Value.  After December 31,
          2000, Aggregate Consolidated Indebtedness shall not, at any time,
          exceed fifty percent (50%) of Aggregate Market Value.  For the
          purposes of this Section 5.19(a), the Consolidated Group
          Percentage Share of Investment Entity Market Value shall not
          exceed fifteen percent (15%) of Market Value.

                    (b)  Secured Debt to Market Value.  The sum of (i) the
          aggregate outstanding principal balance of all Secured Debt of
          Borrower and its Consolidated Subsidiaries, plus (ii) the
          Consolidated Group Percentage Interest of Investment Entity
          Secured Debt shall not, at any time, exceed twenty percent (20%)
          of Aggregate Market Value.

                    (c)  Floating Rate Debt.  The aggregate outstanding
          principal balance of (i) all Floating Rate Debt of Borrower and
          its Consolidated Subsidiaries and (ii) the Consolidated Group
          Percentage Interest of all Floating Rate Debt of the Investment
          Entities shall not exceed fifty percent (50%) of the aggregate of
          the outstanding principal balance of (x) all Indebtedness for

                                          79 


          Borrowed Money of Borrower and its Consolidated Subsidiaries; and
          (y) the Consolidated Group Percentage Interest of all
          Indebtedness for Borrowed Money of the Investment Entities.

                    (d)  Debt Service Coverage Ratio.  The sum of EBITDA
          and the Consolidated Group Percentage Interest of all Investment
          Entity EBITDA, each on an annualized basis (determined by
          multiplying the quarterly EBITDA by a factor of four, and subject
          to the adjustments described in the following sentence), shall at
          all times exceed the sum of all required payments of Debt Service
          and the Consolidated Group Percentage Interest of Investment
          Entity Debt Service by a ratio of not less than two (2.00) to one
          (1).  For the purposes of this provision, Borrower's EBITDA and
          Investment Entity EBITDA shall, as appropriate, be subject to Pro
          Forma Adjustment to reflect any acquisitions made by Borrower or
          any Investment Entity, respectively, during the applicable fiscal
          period.

                    (e)  Unencumbered Debt Service Coverage Ratio. 
          Borrower and its Wholly-Owned Subsidiaries (which, for all
          purposes of this Section 5.19(e) shall include the Controlled
          Partnerships) shall at all times maintain a ratio of Unencumbered
          EBITDA to all required payments of Debt Service as described in
          this Section 5.19(e) on all the Unencumbered Debt of Borrower and
          such Subsidiaries, on an annualized basis (determined by
          multiplying the quarterly Unencumbered EBITDA by a factor of
          four, and subject to the adjustments described in this Section
          5.19(e)) of not less than two (2.0) to one (1).  For the purposes
          of this provision:  (i)  Unencumbered EBITDA shall be subject to
          Pro Forma Adjustment to reflect any acquisition of an
          Unencumbered Real Estate Asset (other than Raw Land or Assets
          Under Development) made during the applicable period; and (ii)
          Unencumbered EBITDA for each fiscal period of Borrower and its
          Wholly-Owned Subsidiaries shall be adjusted to deduct the Capital
          Expenditure Allocation attributable to such parties' Unencumbered
          Suites.

                    (f)  Unencumbered Real Estate Assets to Unencumbered
          Debt Ratio.  The ratio of the aggregate value of the Unencumbered
          Real Estate Assets of Borrower and its Wholly-Owned Subsidiaries
          (which, for all purposes of this Section 5.19(f), shall include
          the Controlled Partnerships) to the aggregate outstanding
          principal balance of Unencumbered Debt of Borrower and its
          Wholly-Owned Subsidiaries shall at all times through and
          including December 31, 2000, equal or exceed one and three-
          quarters (1.75) to one (1); thereafter, such ratio shall at all
          times exceed two (2) to one (1).  The value of Unencumbered Real
          Estate Assets for the purposes of this Section 5.19(f) shall be
          the sum of (A) all Unencumbered Assets Capitalized Income Value
          for Borrower and its Wholly-Owned Subsidiaries (which, solely for
          the purposes of this Section 5.19(f), shall be determined by
          Unencumbered EBITDA for Borrower and its Wholly-Owned
          Subsidiaries for each fiscal period, as adjusted to deduct an
          amount equal to the Capital Expenditure Allocation attributable
          to such parties' Unencumbered Suites) plus (B) fifty percent
          (50%) of the book value of all Assets Under Development which are
          Unencumbered Real Estate Assets, plus (C) fifty percent (50%) of
          the book value of all Raw Land which is Unencumbered Real Estate

                                          80 


          Assets.  For the purposes of this Section 5.19(f):  (1) the
          aggregate of the value (determined as provided in this Section
          5.19(f) of Assets Under Development and Raw Land included in
          Unencumbered Real Estate Assets shall not exceed ten percent
          (10%) of Unencumbered Assets Capitalized Income Value; and (2)
          the value (determined as provided in this Section 5.19(f) of Raw
          Land included in Unencumbered Real Estate Assets shall not exceed
          five percent (5%) of Unencumbered Assets Capitalized Income
          Value.

                    (g)  Dividend Ratio.  Borrower shall not pay any
          Dividends during the fiscal year ending December 31, 1998, in
          excess of those Dividends which have been paid as of the date
          hereof.  The amount of all Dividends paid by Borrower during its
          fiscal year ending December 31, 1999, shall not exceed ninety-
          five percent (95%) of Borrower's Distributable Cash Flow for such
          fiscal year; this ratio shall be tested on a year-to-date basis
          for the purposes of this Section 6.19(g) as of June 30, 1999, and
          as of the end of each subsequent fiscal quarter of Borrower
          thereafter on a cumulative quarterly basis for the balance of
          such fiscal year.  The amount of all Dividends paid by Borrower
          during any fiscal year ending after December 31, 1999, shall not
          exceed ninety percent (90%) of Borrower's Distributable Cash Flow
          for any such fiscal year.  This ratio shall be tested in respect
          of the fiscal year ending December 31, 2000, on a year-to-date
          basis for the purposes of this Section 5.19(g) as of June 30,
          2000, and thereafter on a cumulative quarterly basis for the
          balance of such fiscal year.  For each fiscal year of Borrower
          after December 31, 2000, this ratio shall be tested on a
          cumulative quarterly basis.  

                    (h)  Assets Under Development and Raw Land.  The
          aggregate value of the Assets Under Development and Raw Land
          shall not, at any time, exceed twenty percent (20%) of the
          Aggregate Market Value at such time.

                    (i)  Fixed Charge Coverage Ratio.  Borrower shall at
          all times maintain the ratio of EBITDA to the sum of (i) all
          required payments of Debt Service of Borrower and its
          Consolidated Subsidiaries on an annualized basis (determined by
          multiplying the quarterly EBITDA by a factor of four); (ii) all
          required payments of Investment Entity Debt Service of all
          Investment Entities on an annualized basis, and (iii) all
          dividend payments regarding Preferred Stock, of not less than one
          and three-quarters (1.75) to one (1).  For the purposes of this
          Section 5.19(i), EBITDA and Investment Entity EBITDA for each
          fiscal year shall be reduced by an amount equal to the Capital
          Expenditure Allocation for such fiscal year.

                    (j)  Minimum Net Worth.  The Net Worth of Borrower and
          its Consolidated Subsidiaries which are Wholly Owned Subsidiaries
          (which, for the purposes of this Section 5.19 (j), shall include
          the Controlled Partnerships) shall, at all times equal or exceed
          Three Hundred Twenty-Five Million Dollars ($325,000,000).  If
          Borrower shall make any equity offerings (including, without
          limitation, any public offering, however characterized, which
          would be treated as an equity offering for the purposes of GAAP)
          during the pendency of this Agreement, the minimum Net Worth

                                          81 


          required to be maintained hereunder shall be not less than the
          sum of Three Hundred Twenty-Five Million Dollars ($325,000,000)
          plus ninety percent (90%) of the net proceeds to Borrower of such
          offering.

                    (k)  Concentration of Stock.  The Executive Officers of
          Borrower shall, individually or in the aggregate, at all times
          own, beneficially and of record, an aggregate of not less than
          five hundred thousand shares of Borrower's capital stock on an
          undiluted basis.

                    (l)  Conventional Apartments Ratio.  The number of
          Conventional Apartment units owned by Borrower and its
          Consolidated Subsidiaries shall, at all times, exceed eighty
          percent (80%) of the number of all Apartment Suites owned by
          Borrower and its Consolidated Subsidiaries.

                    (m)  Adjusted Unencumbered Debt Service Coverage Ratio. 
          Borrower and its Wholly-Owned Subsidiaries (which, for the
          purposes of this Section 5.19(m), shall include the Controlled
          Partnerships) shall at all times maintain a ratio of Unencumbered
          EBITDA to Adjusted Unencumbered Debt Service greater than one and
          one-half (1.50) to one (1.0).  For the purpose of this Section
          5.19(m), Unencumbered EBITDA for any fiscal period shall be
          reduced by an amount equal to the Capital Expenditure Allocation
          for such fiscal period.


                                      ARTICLE 6.

                            NEGATIVE COVENANTS OF BORROWER

                    Borrower covenants with and represents and warrants to
          the Managing Agent and to each Bank that from and after the
          Closing Date and until all of the Obligations are paid and
          satisfied in full:

                    Section 6.1  Limitation on Nature of Business. 
          Borrower will not at any time make any material alterations in
          the nature or character of its business as carried on at the date
          hereof, or undertake, conduct or transact any business in a
          manner prohibited by applicable law.

                    Section 6.2  Limitation on Consolidation and Merger.
          Borrower shall not at any time consolidate with or merge into or
          with any Person or Persons or enter into or undertake any plan or
          agreement of consolidation or merger with any Person.  This
          Section 6.2 shall not prohibit Borrower from merging any one or
          more of Borrower's Subsidiaries with or into Borrower.

                    Section 6.3  Limitation on Distributions, Dividends and
          Return of Capital.  (a)  Borrower shall not, if any Event of
          Default shall exist at the time:  (i) declare or pay any
          Distribution or cash dividends of any kind on any shares of any
          class in its capital; (ii) make any payments on account of the
          purchase or other acquisition or redemption or other retirement
          of any shares of any class in its capital, or any warrants or
          options to purchase any such shares; or (iii) make any other

                                          82 


          Distributions of any kind in respect of any shares of any class
          in its capital.

                    (b)  Borrower shall make such Distributions as may be
          necessary to permit Borrower to preserve its status as a REIT,
          provided, however, that the making of any Distribution for such
          purpose which would be prohibited or would, if made, constitute a
          Default or Event of Default under any provision of this Agreement
          shall nevertheless be prohibited, or shall constitute a Default
          or an Event of Default, as the case may be.

                    (c)  Borrower shall not at any time make (whether
          directly or indirectly) any payment of any kind on any
          Indebtedness (other than the Obligations) to any other Person
          while any Default or Event of Default exists hereunder.

                    (d)  Borrower shall not at any time make (whether
          directly or indirectly) any payments or other distributions of
          any kind to any Affiliate or transfer or assign (whether directly
          or indirectly) any Property or assets of any kind to any
          Affiliate; excluding, however, from the operation of the
          foregoing provisions of this paragraph:

                    (i)  payments on transactions or contracts which are
                    permissible under Section 6.9;

                    (ii)  remuneration payable by Borrower to its
                    employees, directors, or officers in amounts approved
                    by its board of directors or officers;

                    (iii)  reimbursements by Borrower of the business
                    expenses of employees, directors and officers incurred
                    in the ordinary course of business; and

                    (iv)  payments, distributions or transfers which are
                    consolidated on Borrower's financial statements.

          Notwithstanding any provision of this Section 6.3 to the
          contrary, Borrower shall not be permitted to make any
          Distribution which would vitiate or jeopardize in any material
          way Borrower's status or qualification as a REIT or would violate
          any other provision of this Agreement.

                    Section 6.4  Limitation on Disposition of Assets. 
          During the term of this Agreement, Borrower shall not at any time
          engage in any sale, lease (as lessor), liquidation or other
          transfer, distribution or disposition of all or any material part
          of its Property or assets (either by or through a single
          transaction or by or through a series of separate but related
          transactions).

                    Section 6.5  Limitation on Investments.  Borrower shall
          not make any Investments of any kind whatever in any Person or
          Persons, except for:

                    (a)  Investments in property to be used in the ordinary
          course of business of Borrower as multi-family apartment
          projects;

                                          83 


                    (b)  Investments in undeveloped land for the
          development of multi-family apartment projects; 

                    (c)  Investments arising from the sale of goods and
          services in the ordinary course of business of Borrower;

                    (d)  Investments in a Subsidiary or Affiliate permitted
          pursuant to Section 6.3(d)(iv), and Investments in joint ventures
          and partnerships engaged solely in the business of purchasing,
          developing, owning, operating, managing and leasing Real Estate
          Projects;

                    (e)  Investments in direct obligations of the United
          States of America, or any agency thereof or obligations
          guaranteed by the United States of America, provided that such
          obligations mature within two (2) years from the date of
          acquisition thereof;

                    (f)  Investments in certificates of deposit maturing
          within two (2) years from the date of acquisition issued by any
          bank or trust company organized under the laws of the United
          States or any state thereof having capital surplus and undivided
          profits aggregating at least One Hundred Million and 00/100
          Dollars ($100,000,000.00); or

                    (g)  Investments in commercial paper given the highest
          rating by a national credit rating agency and maturing not more
          than two (2) years from the date of creation thereof.

          Notwithstanding any restriction set forth in this Section 6.5 to
          the contrary, Borrower shall be permitted to make such
          Investments in the ordinary course of Borrower's business as
          shall not vitiate or jeopardize in any material way Borrower's
          status or qualification as a REIT and shall not, singly or
          cumulatively, violate any other provisions of this Agreement.

                    Section 6.6  Acquisition of Margin Securities.  
          Borrower shall not own, purchase or acquire (or enter into any
          contract to purchase or acquire) any "margin security" as defined
          by any regulation of the Federal Reserve Board as now in effect
          or as the same may hereafter be in effect unless, prior to any
          such purchase or acquisition or entering into any such contract,
          the Managing Agent, for its benefit and that of each Bank, shall
          have received an opinion of counsel satisfactory to the Managing
          Agent and each Bank to the effect that such purchase or
          acquisition will not cause this Agreement or the Notes to be in
          violation of Regulation G, T, U, X or any other regulation of the
          Federal Reserve Board then in effect.

                    Section 6.7  Limitation on Mortgages, Liens and
          Encumbrances.  Borrower shall not at any time create, assume or
          incur any mortgage, Lien or other encumbrance in respect of any
          of its Property, assets, income or revenues of any character if
          as a result of doing so Borrower shall (x) breach any of
          Borrower's warranties or representations under this Agreement, or
          (y) violate any covenant contained in this Agreement. 
          Notwithstanding the foregoing, Borrower will not create, assume,
          incur or permit to exist any involuntary Lien on any of its

                                          84 


          Property, assets, income or revenues other than:  (i)  Liens for
          taxes, assessments or governmental charges or claims the payment
          of which is not at the time required by any provision of this
          Agreement; (ii) statutory Liens of landlords and Liens of
          carriers, warehousemen, mechanics, materialmen and other Liens
          imposed by law incurred in the ordinary course of business for
          sums not yet delinquent or being contested in good faith, if such
          reserve or other appropriate provision, if any, as shall be
          required by GAAP, shall have been made in respect thereof; and
          (iii) Liens (other than any Lien imposed by ERISA) incurred or
          deposits made in the ordinary course of business in connection
          with workers' compensation, unemployment insurance and other
          types of social security, or to secure the performance of
          tenders, statutory obligations, surety and appeal bonds, bids,
          leases, government contracts, performance and return-of-money
          bonds and other similar obligations (exclusive of Indebtedness
          for Borrowed Money).
                    
                    Section 6.8  Limitation on Sales and Leasebacks. 
          Borrower shall not at any time, directly or indirectly, sell and
          thereafter lease back any of its assets or Property.

                    Section 6.9  Transactions with Affiliates.  Except as
          set forth on Schedule 4.1(c), Borrower shall not at any time
          enter into or participate in any agreements or transactions of
          any kind with any Affiliates of Borrower, except (i) agreements
          or transactions that individually produce annual payments of less
          than One Hundred Thousand Dollars ($100,000.00) and are otherwise
          not prohibited by the terms of this Agreement; (ii) agreements or
          transactions entered into in the ordinary course of business on
          an arms-length basis and on terms generally available between
          unrelated Persons; or (iii) agreements permitted pursuant to
          Section 6.3(d)(iv).

                    Section 6.10  Limitation on Certain Transactions. 
          Borrower shall not acquire or purchase any equity interest in any
          other entity, or acquire or purchase any assets or obligation of
          any other entity or incur any Indebtedness for Borrowed Money if
          any such acquisition, purchase or financing (whether in any
          specific transaction or in a series of transactions or
          undertakings) would result in a violation of any one or more (or
          all) of the covenants set forth in Section 5.19 above.

                                      ARTICLE 7.

                             EVENTS OF DEFAULT; REMEDIES

                    Section 7.1  Events of Default.  The occurrence of any
          one or more of the following events shall constitute an "Event of
          Default":

                    (a)  Principal and Interest. Any principal, interest or
          any other sum payable under this Agreement or the Notes (or any
          Note) shall not be paid within five (5) days of the date on which
          the same first became due and payable hereunder, or Borrower
          shall fail to reimburse the Issuing Bank for any draws or
          disbursements made under any Letters of Credit as and when
          required by the terms of Section 2.14, above;

                                          85 


                    (b)  Representations and Warranties. Any representation
          or warranty at any time made by or on behalf of Borrower in this
          Agreement, any Loan Document or in any certificate, written
          report or statement furnished to the Managing Agent or to any
          Bank in connection therewith shall prove to have been untrue,
          incorrect or breached in any material respect on or as of the
          date on which the same was made or was deemed to have been made
          or repeated;

                    (c)  Certain Covenants.  Borrower shall fail to comply
          with the covenants set forth in Sections 5.2(b), 5.5(a), 5.19 or
          Article 6;

                    (d)  Other Covenants.  Borrower shall fail to perform,
          comply with or observe any other covenant or agreement contained
          in this Agreement and such failure or breach shall continue for
          more than twenty (20) days after the earlier of the date on which
          Borrower shall have first become aware of such failure or breach
          or the date on which the Managing Agent or any Bank shall have
          first notified Borrower of such failure or breach (provided,
          however, that solely with respect to defaults of the nature
          described in this Section 7.1(d) which cannot be cured by the
          payment of money and cannot using appropriate diligence be cured
          within such 20-day period, Borrower shall not be deemed to have
          defaulted hereunder provided that Borrower shall commence
          reasonable curative action with respect to such matter within
          such 20-day period and shall thereafter diligently and
          continuously prosecute the same to a timely completion);

                    (e)  Loan Documents.  Borrower shall fail to observe or
          perform in any material fashion any of its obligations or
          undertakings under any Loan Document other than this Agreement,
          and such failure shall continue beyond the applicable period of
          grace (if any) provided therein, or any Loan Document shall cease
          to be legal, valid, binding or enforceable in accordance with its
          terms;

                    (f)  Litigation.  Any action at law, suit in equity or
          other legal or administrative proceeding to amend, cancel, revoke
          or rescind any Loan Document shall be commenced by or on behalf
          of Borrower or by any court or any other governmental authority
          or any court or any other governmental authority shall make a
          determination, or issue a judgment, order, decree or ruling to
          the effect that, any one or more of the covenants, agreements or
          obligations of Borrower hereunder or under any one or more of the
          other Loan Documents are illegal, invalid or unenforceable in
          accordance with the terms thereof;

                    (g)  Acceleration of Other Agreements.  Borrower shall
          default under any agreement, instrument or contract to which
          Borrower is a party or by which any of its assets or Property is
          bound, and such default shall result in all or any material part
          of the Indebtedness of Borrower becoming or being declared due
          and payable prior to the date on which such Indebtedness or any
          part thereof would otherwise have become due and payable;

                    (h)  Insolvency-Voluntary.  If Borrower shall: 
          (1) take any action for the termination, winding up, liquidation

                                          86 


          or dissolution of Borrower; (2) make a general assignment for the
          benefit of creditors, become insolvent or be unable to pay its
          debts as they mature; (3) file a petition in voluntary
          liquidation or bankruptcy; (4) file a petition or answer or
          consent seeking the reorganization of Borrower, or the
          readjustment of any of the Indebtedness of Borrower; (5) commence
          any case or proceeding under applicable insolvency or bankruptcy
          laws now or hereafter existing; (6) consent to the appointment of
          any receiver, administrator, custodian, liquidator or trustee of
          all or any part of its assets or property; (7) take any corporate
          action for the purpose of effecting any of the foregoing; or
          (8) be adjudicated as bankrupt or insolvent; 

                    (i)  Insolvency-Involuntary.  If any petition for any
          proceedings in bankruptcy or liquidation or for the
          reorganization or readjustment of Indebtedness of Borrower shall
          be filed, or any case or proceeding shall be commenced, under any
          applicable bankruptcy or insolvency laws now or hereafter
          existing, against Borrower, or any receiver, administrator,
          custodian, liquidator or trustee shall be appointed for Borrower
          or for all or any part of Borrower's assets or Property, or any
          order for relief shall be entered in a proceeding with respect to
          the Borrower under the provisions of the United States Bankruptcy
          Code, as amended and such proceeding or such appointment shall
          not be dismissed or discharged, as the case may be, within
          forty-five (45) days after the filing or appointment thereof;

                    (j)  Judgment.  Any final and non-appealable judgment,
          order or decree for the payment of money in excess of Five
          Hundred Thousand and 00/100 Dollars ($500,000.00) shall be
          rendered against Borrower, and shall not be discharged within
          thirty (30) days after the date of the entry thereof;

                    (k)  ERISA.  Any Termination Event shall occur and, as
          of the date thereof or any subsequent date, the sum of the
          various liabilities of Borrower and its ERISA Affiliates
          including, without limitation, any liability to the Pension
          Benefit Guaranty Corporation or its successor or to any other
          party under Sections 4062, 4063, or 4064 of ERISA or any other
          provision of law resulting from or otherwise associated with such
          event exceeds One Hundred Thousand Dollars ($100,000.00); or
          Borrower or any of its ERISA Affiliates as an employer under any
          Multiemployer Plan shall have made a complete or partial
          withdrawal from such Multiemployer Plans and the plan sponsors of
          such Multiemployer Plans shall have notified such withdrawing
          employer that such employer has incurred a withdrawal liability
          requiring a payment in an amount exceeding One Hundred Thousand
          Dollars ($100,000.00);

                    (l)  Material Adverse Change.  Any material adverse
          change shall occur in Borrower's operations, financial condition
          or ability to pay the Obligations as and when they become due and
          payable; or

                    (m)  Loss of Licenses or Permits.  Any of the Licenses
          and Permits now held or hereafter acquired by Borrower, shall be
          revoked or terminated and not renewed and the absence of any such
          Licenses and Permits would have a material adverse impact on the

                                          87 


          business, Property, prospects, profits or condition (financial or
          otherwise) of Borrower.

                    Section 7.2  Termination of Commitments and
          Acceleration of Obligations.  If any one or more of the Events of
          Default shall at any time occur and be continuing:

                    (a)  Upon the request of the Required Banks, the
          Managing Agent shall, by giving notice to Borrower, immediately
          terminate the Credit Commitments of all of the Banks in full, and
          each Bank shall thereupon be relieved of all of its obligations
          to make any Loans and to issue (or participate as hereinabove
          provided in the issuance of) any Letters of Credit hereunder;
          except that if there shall be a Default under Section 7.1(h) or
          (i) hereof, the Credit Commitments of all of the Banks shall
          automatically terminate in full concurrently with the occurrence
          of such Default, and each Bank shall thereupon be relieved of all
          of its obligations to make any Loans hereunder.

                    (b)  The Managing Agent, upon the request of the
          Required Banks, shall, by giving notice to Borrower (a "Notice of
          Acceleration"), declare all of the Obligations, including the
          entire unpaid principal of the Notes, all of the unpaid interest
          accrued thereon, and any and all other sums payable by Borrower
          under this Agreement, the Notes, or any of the other Loan
          Documents to be immediately due and payable; except that if there
          shall be an Event of Default under Section 7.1(h) or (i), all of
          the Obligations, including the entire unpaid balance of all of
          the Notes, all of the unpaid interest accrued thereon and all (if
          any) other sums payable by Borrower under this Agreement, the
          Notes or any of the other Loan Documents shall automatically and
          immediately be due and payable without notice to Borrower; and
          except further that if there shall be an Event of Default under
          Section 7.1(h) or (i), and if the Managing Agent, in accordance
          with the terms of this Agreement, shall give a Notice of
          Acceleration to Borrower, Borrower shall not be required to pay
          any prepayment penalties in connection with the acceleration of
          any of the Obligations of Borrower. Thereupon, all of such
          Obligations which are not already due and payable shall forthwith
          become and be absolutely and unconditionally due and payable,
          without presentment, demand, protest or any further notice or any
          other formalities of any kind, all of which are hereby expressly
          and irrevocably waived.

                    (c)  Subject always to the provisions of Section 8.8
          hereof, the Managing Agent may proceed to protect and enforce all
          or any of its or the Banks' rights, remedies, powers and
          privileges under this Agreement, the Notes or any of the other
          Loan Documents by action at law, suit in equity or other
          appropriate proceedings, whether for specific performance of any
          covenant contained in this Agreement, any Note or any of the
          other Loan Documents, or in aid of the exercise of any power
          granted to the Managing Agent herein or therein. 

                    Section 7.3  No Implied Waiver; Rights Cumulative. No
          delay on the part of the Managing Agent or any Bank in exercising
          any right, remedy, power or privilege hereunder or under any of
          the other Loan Documents or provided by statute or at law or in

                                          88 


          equity or otherwise shall impair, prejudice or constitute a
          waiver of any such right, remedy, power or privilege or be
          construed as a waiver of any Default or Event of Default or as an
          acquiescence therein.  No right, remedy, power or privilege
          conferred on or reserved to the Managing Agent or any Bank under
          any of the Loan Documents or otherwise is intended to be
          exclusive of any other right, remedy, power or privilege.  Each
          and every right, remedy, power and privilege conferred on or
          reserved to the Managing Agent or any Bank under any of the Loan
          Documents or otherwise shall be cumulative and in addition to
          each and every other right, remedy, power or privilege so
          conferred on or reserved to Managing Agent or any such Bank, and
          may be exercised at such time or times and in such order and
          manner as the Managing Agent or any such Bank shall (in its sole
          and complete discretion) deem expedient.


                                      ARTICLE 8.

                     CONCERNING THE MANAGING AGENT AND THE BANKS

                    Section 8.1  Appointment of the Managing Agent.  Each
          of the Banks hereby appoints NCB to serve as its Managing Agent
          under this Agreement and the other Loan Documents, and in such
          capacity to administer this Agreement and the other Loan
          Documents.

                    Section 8.2  Authority.  Each of the Banks hereby
          irrevocably authorizes the Managing Agent (i) to take such action
          on its behalf under this Agreement and the other Loan Documents
          and to exercise such powers and perform such duties hereunder and
          thereunder as are delegated to or required of the Managing Agent
          by the terms hereof or thereof, together with such powers as are
          reasonably incidental thereto; and (ii) to take such action on
          such Bank's behalf as the Managing Agent shall consider
          reasonably necessary or advisable for the protection, collection
          or enforcement of any of the Obligations.

                    Section 8.3  Acceptance of Appointment.  The Managing
          Agent hereby accepts its appointment as Managing Agent for each
          of the Banks under this Agreement and the other Loan Documents,
          on the terms set forth in this Agreement, including the
          following:

                    (a)  The Managing Agent makes no representation as to
          the value, validity or enforceability of this Agreement or of any
          of the other Loan Documents or as to the correctness of any
          statement contained in this Agreement or in any of the other Loan
          Documents (other than statements made by the Managing Agent
          herein or therein); 

                    (b)  The Managing Agent may exercise its powers and
          perform its duties under this Agreement and the other Loan
          Documents either directly or through its agents or attorneys;

                    (c)  The Managing Agent shall be entitled to obtain
          from counsel selected by it advice with respect to legal matters
          pertaining to this Agreement or any of the other Loan Documents,

                                          89 


          and shall not be liable for any action taken, omitted to be taken
          or suffered in good faith in accordance with the advice of such
          counsel, except for losses due to the Managing Agent's gross
          negligence or willful misconduct;

                    (d)  The Managing Agent shall not be required to use
          its own funds in the performance of any of its duties or in the
          exercise of any of its rights or powers, and shall not be
          obligated to take any action which, in its reasonable judgment,
          would involve it in any expense or liability unless it shall have
          been furnished security or indemnity in an amount and in form and
          substance satisfactory to it;

                    (e)  The Managing Agent, in performing its duties and
          functions under this Agreement and the other Loan Documents on
          behalf of the Banks, will exercise the same care which it
          normally exercises in making and handling loans in which it alone
          is interested, but the Managing Agent does not assume further
          responsibility; and

                    (f)  The Managing Agent shall not be removed, replaced
          or succeeded without its consent except (i) for its gross
          negligence or willful misconduct; and (ii) the Required Banks
          may, with the prior, written consent of Borrower, direct the
          Managing Agent to resign as such by providing the Managing Agent
          with not less than thirty (30) days' prior, written notice of
          their election to do so, in which event the provisions of Section
          8.16, below, shall govern the replacement of the resigning
          Management Agent.

                    Section 8.4  Application of Moneys.  All moneys
          realized by the Managing Agent under the Loan Documents shall be
          held by the Managing Agent for application in accordance with
          Section 2.6(b) hereof.

                    Section 8.5  Reliance by the Managing Agent and Banks. 
          The Managing Agent and each Bank shall be entitled to rely on any
          notice, consent, certificate, affidavit, letter, telegram,
          telecopy, facsimile or teletype message, statement, order,
          instrument or other document believed by it to be genuine and
          correct and to have been signed or sent by the proper person or
          persons.  The Managing Agent shall deem and treat the payee of
          any Note as the absolute owner thereof for all purposes hereof
          until such time as it receives written notice of an assignment
          permitted hereunder of such payee's interest, together with the
          written agreement of the assignee in form and substance
          reasonably satisfactory to Managing Agent that such assignee is
          bound by this Agreement as a "Bank" hereunder.

                    Section 8.6  Exculpatory Provisions.  (a) Neither the
          Managing Agent nor any of its shareholders, directors, officers,
          employees or agents shall be liable in any manner to any Bank for
          any action taken, omitted to be taken or suffered in good faith
          by it or them under any of the Loan Documents or in connection
          therewith, or be responsible for the consequences of any
          oversight or error of judgment, except for losses due to gross
          negligence or willful misconduct of the Managing Agent or any
          such shareholder, director, officer, employee or agent.  Without

                                          90 


          limiting the generality of the foregoing, under no circumstances
          shall the Managing Agent be subject to any liability to any Bank
          on account of any action taken or omitted to be taken by the
          Managing Agent in compliance with the direction of the Required
          Banks or all Banks, as the case may be as provided for hereunder.

                    (b)  The Managing Agent shall not be responsible in any
          manner to any Bank for the due execution, effectiveness,
          genuineness, validity, enforceability, perfection or recording of
          this Agreement, any of the Notes, any of the other Loan Documents
          or for any certificate, report or other document used under or in
          connection with this Agreement or any of the other Loan
          Documents, or for the truth or accuracy of any recitals,
          statements, warranties or representations contained herein or in
          any certificate, report or other document at any time hereafter
          furnished or purporting to have been furnished to it by or on
          behalf of Borrower, or any other Person, or be under any
          obligation to any Bank to ascertain or inquire as to the
          performance or observance of any of the covenants, agreements or
          conditions set forth in this Agreement, the Notes or any of the
          other Loan Documents or as to the use of any moneys lent
          hereunder or thereunder, except for losses due to the Managing
          Agent's gross negligence or willful misconduct.

                    (c)  The Managing Agent shall not be obligated to take
          any action or refrain from taking any action hereunder or under
          any Loan Document that might, in its judgment, involve it in any
          expense or liability until it shall have been indemnified to its
          satisfaction by, or received an agreement to indemnify from, each
          Bank.  If a court of competent jurisdiction shall determine that
          any amount received and distributed by the Managing Agent is to
          be repaid, each Person to whom any such distribution shall have
          been made shall either repay to the Managing Agent such Person's
          proportionate share of the amount so determined to be repaid or
          shall pay over the same in such manner and to such Persons as
          shall be determined by such court.

                    Section 8.7  Action by the Managing Agent.  Except as
          otherwise expressly provided in this Agreement or in any other
          Loan Document, the Managing Agent will take such action, assert
          such rights and pursue such remedies under this Agreement and the
          other Loan Documents as the Required Banks or all of the Banks,
          as the case may be as provided for hereunder, shall direct. 
          Except as otherwise expressly provided in any of the Loan
          Documents, the Managing Agent will not (and will not be obligated
          to) take any action, assert any rights or pursue any remedies
          under this Agreement or any of the other Loan Documents in
          violation or contravention of any express direction or
          instruction of the Required Banks or all of the Banks, as the
          case may be as provided for hereunder.  As to any matter
          pertaining to the enforcement of this Agreement or any other Loan
          Document, or in any instance in which the consent of the Required
          Banks or all of the Banks is required by the terms of this
          Agreement, the Managing Agent may refuse (and will not be
          obligated) to take any action, assert any rights or pursue any
          remedies under this Agreement or any of the other Loan Documents
          without the express written direction and instruction of the
          Required Banks or all of the Banks, as the case may be as

                                          91 


          provided for hereunder.  If the Managing Agent fails, within a
          commercially reasonable time, to take such action as may properly
          be directed by the Required Banks or all of the Banks, as the
          case may be as provided for hereunder, such parties may, acting
          collectively and pursuant to the written consent of the Required
          Banks or all of the Banks, as appropriate, take such action in
          the Managing Agent's place and stead, on behalf of all Banks. 
          All notices, Loan Documents, supporting documentation and other
          material information required to be delivered by Borrower to the
          Managing Agent hereunder shall be delivered to each Bank within a
          reasonable time after the Managing Agent's receipt of same by the
          Managing Agent.  Without limiting the generality of the
          foregoing, the Managing Agent shall, within fifteen (15) Business
          Days of its receipt of any financial statements or other
          financial reporting information, certificates, or notices
          hereunder (including, without limitation, the evidence of
          insurance required by Section 3.1(r), above), received by the
          Managing Agent in connection with this Agreement, forward the
          same to the Banks, unless a shorter period for the transmittal of
          any such item is required by other provisions of this Agreement. 
          Additionally, the Managing Agent shall promptly provide the Banks
          with copies of all notices which the Managing Agent sends to
          Borrower pursuant to this Agreement.  Additionally, the Managing
          Agent shall, if any Bank shall request other documents furnished
          to the Managing Agent by the Borrower in connection with this
          Agreement or the transactions contemplated hereby, furnish the
          same to the requesting Bank within fifteen (15) Business Days
          after its request therefor.  No Bank (specifically including any
          Bank which is the holder of a Competitive Bid Note which
          evidences an outstanding Competitive Bid Loan made by such Bank
          but excluding the Managing Agent, acting in its capacity as the
          Managing Agent) shall be entitled to take any enforcement action
          of any kind under any of the Loan Documents, except as expressly
          provided in this Agreement.  Without limiting the generality of
          the foregoing, no Bank which is the holder of a Competitive Bid
          Note evidencing an outstanding Competitive Bid Loan made by such
          Bank may initiate or prosecute any remedial or enforcement action
          in consequence of Borrower's failure to pay any principal or
          interest in respect of such Competitive Bid Loan except through
          the Managing Agent and at the direction of the Required Banks,
          and otherwise upon and subject to the procedures applicable to
          Events of Default under this Agreement.  Action that may be taken
          by Required Banks or all of the Banks, as the case may be as
          provided for hereunder, may be taken pursuant to a vote at a
          meeting (which may be held by telephone conference call) of all
          Banks, or pursuant to the written consent or direction of such
          Banks.  Each Bank shall be entitled to request such reasonable
          information about Borrower from the Managing Agent as such Bank
          may determine to be appropriate.

                    Section 8.8  Defaults.  The Managing Agent will
          promptly notify each Bank of any Default or Event of Default or
          any failure by Borrower to make any payment in respect of any of
          the Notes, provided, however, that the Managing Agent shall not
          be deemed to have knowledge of any item until such time as the
          Managing Agent's officers responsible for administration of the
          Loans shall receive written notice thereof or have actual
          knowledge of such event.  If any Bank (including without

                                          92 


          limitation any Bank which is the holder of a Competitive Bid Note
          evidencing an outstanding Competitive Bid Loan made by such Bank)
          shall become aware of any Default or Event of Default, it shall
          promptly notify the Managing Agent and each other Bank thereof,
          provided, however, that no Bank shall be deemed to have knowledge
          of any Default or Event of Default until such time as its
          officers responsible for administration of the Loans shall
          receive written notice thereof or shall have actual knowledge of
          such event.

                    Section 8.9  Amendments, Waivers and Consents.  Any
          provision of this Agreement, the Notes or the other Loan
          Documents may be amended or waived upon the consent of the
          Required Banks; and after such consent the Managing Agent, on
          behalf of all Banks, may execute and deliver to Borrower a
          written instrument waiving or amending such provision; provided,
          however, that the written consent of the Managing Agent and all
          of the Banks will be necessary for any amendment or waiver which
          would result in (i) a change in the Maximum Commitment which
          would increase the same to an amount greater than Two Hundred
          Fifty Million Dollars ($250,000,000); (ii) a reduction in the
          interest rates payable by Borrower hereunder or thereunder or in
          the amount of the Facility Fee, Letter of Credit Fee, or Letter
          of Credit Commission; (iii) a change in the payment schedule;
          (iv) a change in this paragraph or of the definition of "Required
          Banks" or any provision of this Agreement which requires consent
          or action of all Banks for action thereunder; or (v) a release of
          any collateral or guaranty.

                    Section 8.10  Indemnification.  Each Bank agrees to
          indemnify the Managing Agent (in its capacity as the Managing
          Agent hereunder and not in its capacity as a Bank, and to the
          extent that the Managing Agent is not promptly reimbursed by
          Borrower), in accordance with (and limited to) such Bank's
          respective Participation Percentage, from and against any and all
          liabilities, obligations, losses, damages, penalties, interests,
          actions, judgments and suits of any kind or nature whatsoever
          which may be imposed on, incurred by or asserted against the
          Managing Agent (solely in its capacity as Managing Agent
          hereunder) relating to or arising out of this Agreement or any of
          the other Loan Documents or relating to any action taken or
          omitted by the Managing Agent under this Agreement or any of the
          other Loan Documents, provided that no Bank shall be liable under
          this Section 8.11 for any portion of such liabilities,
          obligations, losses, damages, penalties, interest, actions,
          judgments or suits resulting from the Managing Agent's gross
          negligence or willful misconduct.

                    Section 8.11  Reimbursement of the Managing Agent. 
          Upon the occurrence of an Event of Default which Borrower has not
          cured within a reasonable period of time and subject to the
          consent of the Required Banks (or all Banks, as appropriate) to
          the taking by the Managing Agent of any action under the Loan
          Documents, each Bank further agrees to reimburse the Managing
          Agent, in accordance with (and limited to) such Bank's respective
          Participation Percentage, for all out-of-pocket costs or expenses
          reasonably incurred by the Managing Agent in connection with its
          duties under this Agreement, but only to the extent such fees,

                                          93 


          disbursements, expenses and compensation have not been promptly
          reimbursed to the Managing Agent by Borrower.  If any such sums
          are reimbursed to the Managing Agent by Borrower after one or
          more Banks have reimbursed the Managing Agent for such sums, the
          Managing Agent will refund such sums ratably to the Banks which
          contributed such sums.

                    Section 8.12  Dealing with the Banks.  The Managing
          Agent may at all times deal solely with the several Banks for all
          purposes of this Agreement and the protection, enforcement and
          collection of the Notes, including without limitation the
          acceptance and reliance upon any certificate, consent or other
          document executed on behalf of one or more of the Banks and the
          division of payments pursuant to Sections 2.4, 2.5, 2.6 or 8.5
          hereof.  The Managing Agent shall not have a fiduciary
          relationship in respect of any Bank by reason of this Agreement. 
          The Managing Agent shall have no implied duties to the Banks, or
          any obligation to the Banks to take any action hereunder except
          for those actions which are specifically provided by this
          Agreement to be taken by the Managing Agent.  No Bank shall have
          a fiduciary relationship in respect of the Managing Agent by
          reason of this Agreement.  No Bank shall have any implied duties
          to the Managing Agent, or any obligation to the Managing Agent to
          take any action hereunder except any action specifically provided
          by this Agreement to be taken by the Banks.

                    Section 8.13  The Managing Agent as Bank.  NCB shall,
          in its capacity as a Bank under the Loan Documents, have the same
          obligations, rights, remedies, powers and privileges under the
          Loan Documents as it would have were it not also the Managing
          Agent.

                    Section 8.14  Duties Not to be Increased.  The duties
          and liabilities of the Managing Agent under this Agreement and
          the other Loan Documents shall not be increased or otherwise
          changed without its express prior written consent.  The Managing
          Agent shall have no duty to provide information to the Banks
          except as expressly set forth herein.

                    Section 8.15  Bank Credit Decisions.  Each Bank
          acknowledges that it has, independently of and without reliance
          upon the Managing Agent or any of the other Banks, made its own
          credit analysis and decision to enter into this Agreement and the
          other Loan Documents to which it is a party.  Each Bank also
          acknowledges that it will, independently of and without reliance
          upon the Managing Agent or any of the other Banks, continue to
          make its own credit decisions in taking or not taking action
          under this Agreement or any of the other Loan Documents and in
          determining the compliance or lack thereof by Borrower and any
          other Person with any provision of any Loan Document or other
          document or agreement.

                    Section 8.16  Resignation of the Managing Agent.  NCB
          and any successor Managing Agent may resign as such at any time
          by giving at least ninety (90) days' prior written notice of
          resignation to each Bank and to Borrower.  Such resignation will
          be effective on the date which is specified in such notice.  Upon
          any such resignation by NCB as Managing Agent, or in the event

                                          94 


          the office of Managing Agent shall thereafter become vacant for
          any other reason, the Required Banks shall appoint a successor
          Managing Agent, by an instrument in writing signed by the
          Required  Banks and delivered to such successor Managing Agent
          and Borrower, whereupon such successor Managing Agent shall
          succeed to all of the rights and obligations of the resigning
          Managing Agent as if originally named.  The resigning Managing
          Agent shall duly assign, transfer and deliver to such successor
          Managing Agent all moneys at the time held by it hereunder, after
          deducting therefrom its expenses for which it is entitled to be
          reimbursed.  Upon such succession of any such successor Managing
          Agent, the prior Managing Agent shall thereafter be discharged
          from its duties and obligations hereunder.  After the resignation
          of an Managing Agent, the provisions of this Section shall
          continue in effect for its benefit in respect of any actions
          taken or omitted to be taken by it while it was acting as
          Managing Agent.

                    Section 8.17  Assignment of Notes: Participation. 
          (a) Each Bank may assign to one or more banks or other financial
          institutions all or a portion of its rights and obligations under
          this Agreement, the Ratable Notes, the Competitive Bid Notes and
          the other Loan Documents; provided that (i) for each such
          assignment, the parties thereto shall execute and deliver an
          assignment and assumption agreement, in form and substance
          acceptable to the Managing Agent, together with any Notes subject
          to such assignment, and (ii) no such assignment shall be for less
          than Five Million and 00/100 Dollars ($5,000,000.00) of the
          aggregate of the assigning Bank's Credit Commitment, unless such
          assignment is to a then-current holder of a Note.  Any Bank
          proposing to effect an assignment hereunder shall provide prior,
          written notice of its intention to do so to Borrower and the
          Managing Agent; such notice shall identify the proposed assignee
          and the amount and terms of such proposed assignment.  Borrower
          and the Managing Agent shall each have the right to approve the
          proposed assignee (and each hereby agrees not unreasonably to
          withhold its approval), provided, however, that Borrower shall
          have no right to approve (or to refrain from approving) if, at
          the time of its receipt of any notice proposing an assignment,
          any Default or Event or Default shall exist.  In addition, in the
          event of the occurrence of an Event of Default which remains
          uncured for a period of ninety (90) days or more from the date on
          which it occurred, the Managing Agent shall not, from and after
          the expiration of such ninety (90) day period have the right to
          approve (or disapprove) any assignment which otherwise complies
          with the requirements set forth in this Section 8.17(a).  Subject
          to the foregoing, upon the delivery of an executed assignment and
          assumption agreement as described in the preceding sentence to
          the Managing Agent, from and after the date specified as the
          effective date therein (the "Acceptance Date"), (x) the assignee
          thereunder shall be a party hereto, and, to the extent that
          rights and obligations hereunder have been assigned to it
          pursuant to such agreement, such assignee shall have the rights
          and obligations of a Bank hereunder; and (y) the assignor
          thereunder shall, to the extent that rights and obligations
          hereunder have been assigned by it pursuant to such agreement,
          relinquish its rights (other than any rights it may have pursuant
          to Section 9.5 which will survive) and be released from its

                                          95  


          obligations under this Agreement (and, in the case of an
          assignment covering all or the remaining portion of an assigning
          Bank's rights and obligations under this Agreement, such Bank
          shall cease to be a party hereto).

                    (b)  Each Bank may sell participations of up to fifty
          percent (50%) of its rights and obligations under the Loan
          Documents, excluding Competitive Bid Loans, to one or more
          Persons; provided, however, that (i) any selling Banks'
          obligations under the Loan Documents shall remain unchanged by
          any such participation, (ii) such Bank shall remain solely
          responsible to the other parties hereto for the performance of
          such obligations, (iii) such Bank shall remain the holder of its
          Note for all purposes of the Loan Documents, (iv) the
          participating banks or other entities shall be entitled to the
          cost protection provisions of Sections 2.10 and 9.5 hereof, but a
          participant shall not be entitled to receive pursuant to such
          provisions an amount larger than its share of the amount to which
          the Bank granting such participation would have been entitled,
          (v) Borrower, the Managing Agent and the other Banks shall
          continue to deal solely and directly with the selling Bank in
          connection with such Bank's rights and obligations under the Loan
          Documents, and (vi) no such transfer shall include the transfer
          of any of such Bank's rights to grant consents or approve
          amendments or modifications to the Loan Documents except with
          respect to those items requiring the action of or consent by all
          Banks or affecting the rights and obligations of Managing Agent. 
          Each Bank may share any and all information received by it from
          or on behalf of the Borrower pursuant to this Agreement or any of
          the other Loan Documents with any participant or prospective
          participant of such Bank.

                    (c)  Notwithstanding any other provision of this
          Agreement to the contrary, National City Bank agrees that so long
          as it shall be the Managing Agent its Credit Commitment shall
          equal or exceed the Credit Commitment of any other Bank.

                                      ARTICLE 9.

                          PROVISIONS OF GENERAL APPLICATION

                    Section 9.1  Duration.  This Agreement shall continue
          in full force and effect and the duties, covenants, and
          liabilities of Borrower hereunder and all the terms, conditions,
          and provisions hereof relating thereto shall continue to be fully
          operative until all Obligations to the Managing Agent and each
          Bank have been satisfied in full, provided, however that
          notwithstanding the provisions of this Section 9.1 the
          Commitments shall expire and all Obligations shall be due and
          payable on the Termination Date.

                    Section 9.2  Notices.  (a)  All notices and other
          communications pursuant to this Agreement shall be in writing,
          either delivered in hand or sent by recognized overnight courier
          service, by certified mail, postage prepaid and return receipt
          requested, or by telex, telecopier, facsimile transmission or
          telegraph, addressed as follows:


                                          96


                    (i)  If to Borrower, to:

                         Associated Estates Realty Corporation
                         5025 Swetland Court
                         Cleveland, Ohio  44143
                         Telecopier:  (216) 289-9600
                         Attn:  Jeffrey I. Friedman, President


                    with a copy to:

                         Associates Estates Realty Corporation
                         5025 Swetland Court
                         Cleveland, Ohio  44143
                         Telecopier:  (216) 289-9600
                         Attn:  Martin A. Fishman, Esq.,
                                General Counsel

                    (ii) If to the Managing Agent, to:

                         National City Bank
                         1900 East Ninth Street
                         Cleveland, Ohio   44101
                         Telecopier:  (216) 575-3160
                         Attn:  Gary L. Wimer, Vice President

                         with a copy to:

                         Taft, Stettinius & Hollister
                         Bond Court Building, Suite 600
                         1300 East Ninth Street
                         Cleveland, Ohio  44114
                         Telecopier:  (216) 241-2837
                         Attn:  William K. Smith, Esq.

                   (iii) If to a Bank, to such Bank's address set forth 
                         on Schedule 1;

          or to such other addresses or by way of such telex and other
          numbers as any party hereto shall have designated in a written
          notice to the other parties hereto.

                    (b)  Except as otherwise expressly provided herein, any
          notice or other communication given under this Agreement or any
          other Loan Document shall be deemed to have been duly given or
          made and to have become effective when delivered in hand to the
          party to which it is directed, or, if sent by certified mail, or
          by telex, telecopier, facsimile transmission or telegraph, and
          properly addressed in accordance with Section 9.2(a): (i) when
          received by the addressee; or (ii) if sent by certified mail, on
          the date noted on Borrower's return receipt.  Any notice sent by
          telex, telecopier or facsimile transmission or telegraph shall be
          confirmed by a counterpart thereof sent by overnight courier or
          hand-delivery.

                    Section 9.3  Survival of Representations.  All
          representations and warranties made by or on behalf of Borrower
          in this Agreement or any of the other Loan Documents shall be

                                          97


          deemed to have been relied upon by the Managing Agent and each
          Bank notwithstanding any investigation made by Managing Agent or
          any Bank.  All such representations and warranties shall survive
          the making of each of the Loans and the issuance of the Letters
          of Credit until all of the Obligations shall have been paid in
          full.

                    Section 9.4  Amendments.  Each of the Loan Documents
          may be modified, amended or supplemented in any respect whatever,
          only by a written instrument signed by Borrower and the Managing
          Agent with the prior written consent or approval of the Required
          Banks or all of the Banks (as the case may be), all in accordance
          with the terms of Section 8.9 hereof.

                    Section 9.5  Costs, Expenses, Taxes and
          Indemnification.  (a)  Borrower absolutely and unconditionally
          agrees to pay to the Managing Agent, and to reimburse the
          Managing Agent for, all reasonable out-of-pocket costs and
          expenses (including legal fees and expenses) which shall at any
          time be incurred or sustained by the Managing Agent or any of its
          directors, officers, employees or agents as a consequence of or
          any way in connection with:  (a) the preparation, negotiation,
          execution and delivery of the Loan Documents; (b) the perfection
          and continuation of the rights of the Banks and the Managing
          Agent in connection with the Loans; (c) preparation, negotiation,
          execution, or delivery of any amendment or modification of any of
          the Loan Documents; or (d) in the granting by the Managing Agent
          or any Bank of any consents, approvals or waivers under any of
          the Loan Documents.

                    (b)  Borrower absolutely and unconditionally agrees to
          pay to the Managing Agent, for the account of Managing Agent and
          each Bank and upon demand by the Managing Agent or any Bank at
          any time and as often as the occasion therefor may require, all
          reasonable out-of-pocket costs and expenses which shall be
          incurred or sustained by the Managing Agent, any Bank or their
          respective directors, officers, employees or agents as a
          consequence of, on account of, in relation to or any way in
          connection with the exercise, protection or enforcement any of
          its rights, remedies, powers or privileges hereunder or under any
          of the Loan Documents or in connection with any litigation,
          proceeding or dispute arising from or related to any of the Loan
          Documents (including, but not limited to, all of the reasonable
          fees and disbursements of consultants, legal advisers,
          accountants, experts and agents for the Managing Agent or any
          Bank, the reasonable travel and living expenses away from home of
          employees, consultants, experts or agents of the Managing Agent
          or any Bank, and the reasonable fees of agents, consultants and
          experts of the Managing Agent or any Bank for services rendered
          on its behalf).

                    (c)  Borrower shall absolutely and unconditionally
          indemnify and hold harmless the Managing Agent and each Bank
          against any and all claims, demands, suits, actions, causes of
          action, damages, losses, settlement payments, obligations, costs,
          expenses and all other liabilities whatsoever which shall at any
          time or times be incurred or sustained by the Managing Agent or
          any Bank or by any of their respective shareholders, directors,

                                          98 


          officers, employees, subsidiaries, Affiliates or agents on
          account of, or in relation to, or in any way in connection with,
          any of the arrangements or transactions contemplated by,
          associated with or ancillary to this Agreement or any of the
          other Loan Documents, without regard to whether all or any of the
          transactions contemplated by, associated with or ancillary to
          this Agreement, or any of such Loan Documents shall ultimately be
          consummated.

                    (d)  Borrower hereby covenants and agrees that any sums
          expended by the Managing Agent or any Bank for which Managing
          Agent or any Bank is entitled to reimbursement under this Section
          9.5 shall be immediately due and payable upon demand by the
          Managing Agent or any Bank, and shall bear interest at the
          Default Interest Rate from the date on which the Managing Agent
          or such Bank incurred such expense until the date such payment is
          made in full.

                    (e)  Borrower's indemnity obligations under this
          Section 9.5 shall not extend to any losses, costs, expenses or
          damages proximately caused by the gross negligence or willful
          misconduct of any party which, absent this Section 9.5(e), would
          be entitled to indemnification hereunder.

                    Section 9.6  Set-Off; Sharing of Set-Off Proceeds.  (a) 
          Borrower hereby confirms to the Managing Agent and to each Bank
          the continuing and immediate rights of set-off of the Managing
          Agent and each Bank with respect to all deposits, balances and
          other sums credited by or due from Managing Agent or such Bank or
          any of their respective offices or branches to Borrower, which
          rights are in addition to any other rights which the  Managing
          Agent or such Bank may have under applicable law.  If any
          principal, interest or other sum payable by Borrower to the
          Managing Agent or any Bank under the Notes or any of the Loan
          Documents is not paid punctually as and when the same shall first
          become due and payable, or if any Event of Default shall at any
          time occur and be continuing, any deposits, balances or other
          sums credited by or due from Managing Agent or such Bank or any
          of their respective offices or branches to Borrower, may, without
          any prior notice of any kind to Borrower, and without any other
          conditions precedent now or hereafter imposed by statute, rule or
          law or otherwise (all of which are hereby expressly and
          irrevocably waived by Borrower), be immediately set off,
          appropriated and applied by the Managing Agent or such Bank
          toward the payment and satisfaction of the Obligations in
          accordance with the provisions of paragraph (b) below.

                    (b)  Each Bank and the Managing Agent agrees that if it
          shall receive (whether by payment received otherwise than in
          accordance with the terms of the Loan Documents, exercise of the
          right of set-off, counterclaim, cross-claim, enforcement of any
          claim, or proceedings against Borrower or any other Person or
          Persons, proof of claim in bankruptcy, reorganization,
          liquidation, receivership or other similar proceedings, or
          otherwise), and shall retain and apply to the payment of any of
          the Obligations owing to it any amount in excess of its Funded
          Percentage of the aggregate of all payments received by all of
          the Banks and the Managing Agent in respect of all of the

                                          99 


          Obligations, such Bank will promptly make such dispositions and
          arrangements with the other Banks and the Managing Agent with
          respect to such excess, either by way of distribution, pro tanto
          assignment of claim, subrogation or otherwise, as shall result in
          each of the Banks receiving its Funded Percentage of such
          payments.

                    Section 9.7  Binding Effect; Assignment.  This
          Agreement shall be binding upon and inure to the benefit of the
          parties hereto and their respective successors and permitted
          assigns; provided, however, that (i) Borrower may not assign or
          delegate any of its rights or obligations hereunder without the
          express prior written consent of the Managing Agent and all
          Banks; and (ii) no Bank may assign or delegate its rights or
          obligations hereunder except in accordance with Section 8.18
          hereof.

                    Section 9.8  Governing Law; Jurisdiction and Venue. 
          (a) This instrument and the rights and obligations of all parties
          hereunder shall be governed by and construed under the
          substantive laws of the State of Ohio, without reference to the
          conflict of laws principles of such state.

                    (b) The Managing Agent, each Bank and Borrower hereby
          designate all state and federal courts of record sitting in
          Cleveland, Ohio as forums where any action, suit or proceeding in
          respect of or arising out of this Agreement, the Notes, Loan
          Documents, or the transactions contemplated by this Agreement may
          be prosecuted as to all parties, their successors and assigns,
          and each hereby consents to the jurisdiction and venue of such
          courts.  Borrower waives any and all personal rights under the
          laws of any other state to object to jurisdiction within the
          State of Ohio for the purposes of litigation to enforce the
          Obligations of Borrower.  In the event any such litigation shall
          be commenced, Borrower agrees that service of process may be
          made, and personal jurisdiction over Borrower obtained, by
          service of a copy of the summons, complaint and other pleadings
          required to commence such litigation upon Borrower's appointed
          Managing Agent for Service of Process in the State of Ohio, which
          the undersigned hereof designates to be:  Martin A. Fishman,
          Esq., 5025 Swetland Court, Cleveland, Ohio 44143.  Borrower
          recognizes and agrees that such designation agency has been
          created for the benefit of the Borrower, and the parties agree
          that this designation shall not be revoked, withdrawn, or
          modified without the prior written consent of the Managing Agent.

                    Section 9.9  WAIVER OF JURY TRIAL.  AS A MATERIAL
          INDUCEMENT FOR THE BANKS TO EXTEND CREDIT TO BORROWER, AND AFTER
          HAVING THE OPPORTUNITY TO CONSULT COUNSEL, BORROWER HEREBY
          EXPRESSLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LAWSUIT OR
          PROCEEDING RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
          DOCUMENTS OR ARISING IN ANY WAY FROM THE OBLIGATIONS.

                    Section 9.10 Waivers.  Borrower waives notice of
          nonpayment, demand, notice of demand, presentment, protest and
          notice of protest with respect to the Obligations, or notice of
          acceptance hereof, notice of the Loans made, credit extended, or
          any other action taken in reliance hereon, and all other demands

                                         100 


          and notices of any description, except for those notices which
          are expressly provided for herein.

                    Section 9.11  Integration of Schedules and Exhibits. 
          The Exhibits and Schedules annexed to this Agreement are part of
          this Agreement and are incorporated herein by reference.

                    Section 9.12  Headings.  The table of contents,
          headings of the Articles, Sections and paragraphs of this
          Agreement have been inserted for convenience of reference only
          and shall not be deemed to alter, limit or affect the scope,
          meaning or interpretation of any provision of this Agreement.

                    Section 9.13  Counterparts.  This Agreement may be
          executed in any number of counterparts, and signature pages but
          all of such counterparts shall together constitute a single
          agreement.  In making proof of this Agreement, it shall not be
          necessary to produce or account for more than one counterpart
          hereof signed by each of the parties hereto.

                    Section 9.14  Severability.  If any provision of this
          Agreement, or the application thereof to any person or
          circumstance shall be invalid or unenforceable to any extent, the
          balance of this Agreement and the application of all provisions
          of this Agreement to all other persons and circumstances shall
          not be affected thereby; each provision of this Agreement shall
          remain valid and enforceable to the fullest extent permitted by
          law.

                    Section 9.15  Miscellaneous.  All of the rights of the
          Managing Agent and each Bank contained in this Agreement shall
          likewise apply insofar as applicable to any modification of or
          supplement to this Agreement. No officers, directors,
          shareholders or employees of Borrower shall have any personal
          liability for any obligations under this Agreement or as a result
          of any documents or certificates delivered pursuant to this
          Agreement, except in cases of actual fraud or willful misconduct;
          provided, however, that nothing in this sentence shall be deemed
          in any way to limit the absolute and unconditional liability of
          Borrower for the full and timely payment, observance and
          performance of all of its obligations hereunder.

                    Section 9.16  Confidentiality.  (a)  Borrower
          acknowledges that from time to time financial advisory,
          investment banking and other services may be offered or provided
          to Borrower or one or more of its Affiliates by the Managing
          Agent or any Bank, or by their respective Affiliates, and
          Borrower hereby authorizes the Managing Agent and each Bank to
          share any information delivered to it by Borrower or its
          Affiliates pursuant to this Agreement, or in connection with
          their respective decisions to enter into this Agreement, with any
          such Affiliate, it being understood that any such Affiliate
          receiving such information shall be bound by the provisions of
          clause (b) below as if it were a Bank hereunder.

                    (b)  Each Bank and the Managing Agent agrees to keep
          confidential, in accordance with their customary procedures for
          handling confidential information, any non-public information

                                         101 


          supplied to it by Borrower pursuant to this Agreement which is
          identified by Borrower as being confidential at the time the same
          is delivered to Managing Agent or any Bank.  Notwithstanding the
          foregoing to the contrary, the Managing Agent and any Bank may
          disclose any such information: (i) to the extent required by
          statute, rule, regulation or judicial process, (ii) to its
          counsel, (iii) to regulatory personnel, auditors or accountants,
          (iv) to the Managing Agent or any other Bank, (v) in connection
          with any litigation to which any one or more of the Banks or the
          Managing Agent is a party, (vi) to an Affiliate of Managing Agent
          or any Bank as provided in clause (a) above, or (vii) to any
          assignee or participant (or prospective assignee or participant)
          so long as such assignee or participant (or prospective assignee
          or participant) agrees to be bound by the provisions hereof.


                                         102


                    IN WITNESS WHEREOF, the parties have caused this Credit
          Agreement to be signed by their respective officers as of the day
          first above written.

                                   BORROWER:

                                   ASSOCIATED ESTATES REALTY CORPORATION


                                   By:  /s/ Jeffrey I. Friedman
                                        ------------------------------
                                        Print Name:Jeffrey I. Friedman
                                        Title:  President


                                   5025 Swetland Court
                                   Cleveland, Ohio  44143
                                   Telephone:  (216) 261-5000
                                   Facsimile:  (216) 289-9600
                                   Attn:  Jeffrey I. Friedman, President


                                   MANAGING AGENT:

                                   NATIONAL CITY BANK


                                   By:  /s/ Gary L. Wimer
                                        ------------------------------
                                        Gary L. Wimer
                                        Vice President


                                   National City Center
                                   1900 East Ninth Street
                                   Locator No. 2118
                                   Cleveland, Ohio  44114
                                   Telephone:  (216) 575-2233
                                   Facsimile:  (216) 575-3160
                                   Attn:  Gary L. Wimer, Vice President
                                        Investment Real Estate Div.


                                   THE  DOCUMENTATION AGENT:

                                   BANK OF AMERICA NATIONAL TRUST AND 
                                   SAVINGS ASSOCIATION 

                                   By:  /s/  Richard G. Baer, Jr.
                                        -------------------------------
                                        Print Name:  Richard G. Baer
                                        Title:  Vice President
                                        
                                        
                                   231 South LaSalle Street, 12-Q
                                   Chicago, Illinois  60697
                                   Telephone:  (312) 828-5149
                                   Facsimile:  (312) 974-4970
                                   Attn:  Richard G. Baer, Jr., 
                                          Vice-President


                                   THE BANKS:

                                   NATIONAL CITY BANK


                                   By:  /s/ Gary L. Wimer
                                        ------------------------------
                                        Gary L. Wimer
                                        Vice President

                                   National City Center
                                   1900 East Ninth Street
                                   Locator No. 2118
                                   Cleveland, Ohio  44114
                                   Telephone:  (216) 575-2233
                                   Facsimile:  (216) 575-3160
                                   Attn:  Gary L. Wimer, Vice President
                                          Investment Real Estate Div.



                                   BANK OF AMERICA NATIONAL TRUST AND 
                                   SAVINGS ASSOCIATION 

                                   By:  /s/  Richard G. Baer, Jr.
                                        --------------------------------
                                        Print Name:  Richard G. Baer, Jr.
                                        Title:  Vice President

                                   231 South LaSalle Street, 12-Q
                                   Chicago, Illinois  60697
                                   Telephone:  (312) 828-5087
                                   Facsimile:  (312) 974-4970
                                   Attn:  Richard G. Baer, Jr.,
                                          Vice-President 


                                   BANK ONE, N.A. 

                                   By:  /s/  Douglas D. Lyons
                                        ---------------------------------
                                        Print Name:Douglas D. Lyons
                                        Title:  Vice President


                                   30 South Park Place
                                   Painesville, Ohio  44077
                                   Telephone:  (440) 352-5580
                                   Facsimile:  (440) 352-5971
                                   Attn:  Douglas Lyons, Vice-President



                                   MANUFACTURERS AND TRADERS TRUST COMPANY

                                   By:  /s/ Kevin B. Quinn
                                        --------------------------------
                                        Print Name:  Kevin B. Quinn
                                        Title:  Assistant Vice President

                                   One Fountain Plaza
                                   Buffalo, New York  14203-1495
                                   Telephone:  (716) 848-7337
                                   Facsimile:  (716) 848-7318
                                   Attn:  Kevin B. Quinn, 
                                          Assistant Vice President

                                   

                                   HARRIS TRUST & SAVINGS BANK

                                   By:  /s/  Gregory M. Bins
                                        ---------------------------------
                                        Print Name: Gregory M. Bins
                                        Title:  Vice President

                                   111 West Monroe Street
                                   Chicago, Illinois   60690
                                   Telephone:  (312) 461-2203
                                   Facsimile:  (312) 461-2968
                                   Attn:  Gregory M. Bins, 
                                          Vice President 


                                   HUNTINGTON BANK - CLEVELAND, N.A.

                                   By:  /s/ Gerald A. Buck
                                        ---------------------------------
                                        Print Name:  Gerald A. Buck
                                        Title:  Vice President

                                   917 Euclid Avenue
                                   Cleveland, Ohio  44115
                                   Telephone:  (216) 515-6882
                                   Facsimile:  (216) 515-6369
                                   Attn:  Gerald A. Buck,
                                          Vice President



                                   CITIZENS BANK OF RHODE ISLAND

                                   By:  /s/  John K. Cooper
                                        ----------------------------
                                        Print Name:  John K. Cooper
                                        Title:  Vice President

                                   One Citizens Plaza
                                   Fourth Floor
                                   Providence, Rhode Island  02903
                                   Telephone:  (401) 456-7283
                                   Facsimile:  (401) 455-5410
                                   Attn:  John K. Cooper
                                          Vice President

                                   FIRSTMERIT BANK, N.A.

                                   By:  /s/  Peter D. Collins
                                        ---------------------------------
                                        Print Name:  Peter D. Collins
                                        Title:  Vice President

                                   123 West Prospect Avenue
                                   Cleveland, Ohio  44115-1070
                                   Telephone:  (216) 694-5638
                                   Facsimile:  (216) 621-3201
                                   Attn:  Peter D. Collins,
                                          Vice President


                                   SOUTHTRUST BANK, N.A.

                                   By:  /s/ Sam Boroughs
                                        --------------------------------
                                        Print Name:  Sam Boroughs
                                        Title:  Assistant Vice President
                    
                                   420 North 20th Street
                                   Birmingham, Alabama  35203
                                   Attn:  Sam Boroughs
                                   Telephone:  (205) 254-5039
                                   Facsimile:  (205) 254-5022

                                   COMMERZBANK AKTIENGESELLSCHAFT

                                   By:  /s/  Douglas P. Traynor       
                                        ---------------------------------
                                   Print Name:  Douglas P. Traynor 
                                        Title:  Vice President


                                   By:  /s/ James J. Henry            
                                        ---------------------------------
                                   Print Name:    James J. Henry
                                        Title:  Senior Vice President

                                   Two World Financial Center
                                   New York, New York 10281-1050
                                   Attn:  Douglas Traynor, Vice President
                                   Telephone:  (212) 266-7569
                                   Facsimile:  (212) 266-7565


                                         107


                                      SCHEDULE 1

                                          to

                                 First Amendment to 
                                   Credit Agreement
<TABLE>
<CAPTION>

               
                                   Participation
                Bank                 Percentage        Credit Commitment
          ------------------       -------------       -----------------
          <S>                      <C>                 <C>

          National City Bank            14%              $ 35,000,000

          Bank of America National      14%              $ 35,000,000
            Trust and Savings
            Association

          Manufacturers and Traders      8%              $ 20,000,000
            Trust Company

          Harris Trust & Savings Bank   10%              $ 25,000,000
           
          Bank One, N.A.                12%              $ 30,000,000

          Huntington Bank -             10%              $ 25,000,000
             Cleveland, N.A.

          Citizens Bank of               8%              $ 20,000,000
             Rhode Island

          FirstMerit Bank, N.A.          4%              $ 10,000,000

          SouthTrust Bank, N.A.         10%              $ 25,000,000

          Commerzbank                   10%              $ 25,000,000
             Aktiengesellschaft
                                        ---              ------------
                                        100%             $250,000,000
</TABLE>