Document:

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                                                                    Exhibit 10.9

                              AMENDED AND RESTATED

                        MASTER CREDIT FACILITY AGREEMENT

                                 BY AND BETWEEN

        SUN SECURED FINANCING LLC, a Michigan limited liability company,

     ASPEN-FT. COLLINS LIMITED PARTNERSHIP, a Michigan limited partnership,

               SUN SECURED FINANCING HOUSTON LIMITED PARTNERSHIP,
                         a Michigan limited partnership,

       SUN COMMUNITIES FINANCE, LLC, a Michigan limited liability company,

           SUN HOLLY FOREST LLC, a Michigan limited liability company,

            SUN SADDLE OAK LLC, a Michigan limited liability company

                                       AND

                       ARCS COMMERCIAL MORTGAGE CO., L.P.

                                   dated as of

                                 April 28, 2004

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                                TABLE OF CONTENTS

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<S>                                                                                                               <C>
ARTICLE 1 THE COMMITMENT.....................................................................................       2
   SECTION 1.01.    The Commitment...........................................................................       2
   SECTION 1.02.    Requests for Advances....................................................................       3
   SECTION 1.03.    Maturity Date of Advances................................................................       3
   SECTION 1.04.    Interest on Advances.....................................................................       4
   SECTION 1.05.    Coupon Rates for Advances................................................................       5
   SECTION 1.06.    Notes....................................................................................       5
   SECTION 1.07.    Extension of Original Variable Facility Termination Date and Variable Facility
   Termination Date..........................................................................................       6
   SECTION 1.08.    Conversion from Variable Facility Commitment to Fixed Facility Commitment................       7
   SECTION 1.09.    Limitations on Right to Convert..........................................................       7
   SECTION 1.10.    Conditions to Conversion.................................................................       8
ARTICLE 2 THE ADVANCES.......................................................................................       8
   SECTION 2.01.    Rate Setting for an Advance..............................................................       8
   SECTION 2.02.    Advance Confirmation Instrument for Variable Advances....................................       9
   SECTION 2.03.    Breakage and other Costs.................................................................       9
   SECTION 2.04.    Advances.................................................................................       9
   SECTION 2.05.    Determination of Allocable Facility Amount and Valuations................................      10
   SECTION 2.06.    Right to Advances Based on Increased Collateral Value....................................      10
ARTICLE 3 COLLATERAL CHANGES.................................................................................      11
   SECTION 3.01.    Right to Add Collateral..................................................................      11
   SECTION 3.02.    Procedure for Adding Collateral..........................................................      11
   SECTION 3.03.    Right to Obtain Releases of Collateral...................................................      12
   SECTION 3.04.    Procedure for Obtaining Releases of Collateral...........................................      12
   SECTION 3.05.    Right to Substitute Collateral...........................................................      16
   SECTION 3.06.    Procedure for Substituting Collateral....................................................      16
ARTICLE 4 EXPANSION OF CREDIT FACILITY.......................................................................      18
   SECTION 4.01.    Right to Increase Commitment.............................................................      18
   SECTION 4.02.    Procedure for Obtaining Increases in Commitment..........................................      18
ARTICLE 5 TERMINATION OF FACILITIES..........................................................................      19
   SECTION 5.01.    Right to Complete or Partial Termination of Facilities...................................      19
   SECTION 5.02.    Procedure for Complete or Partial Termination of Facilities..............................      19
   SECTION 5.03.    Right to Terminate Credit Facility.......................................................      20
   SECTION 5.04.    Procedure for Terminating Credit Facility................................................      20
ARTICLE 6 CONDITIONS PRECEDENT TO ALL REQUESTS...............................................................      20
   SECTION 6.01.    Conditions Applicable to All Requests....................................................      20
   SECTION 6.02.    Conditions Precedent to Initial Advance..................................................      22
   SECTION 6.03.    Conditions Precedent to Future Advances..................................................      23
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<S>                                                                                                                <C>
   SECTION 6.04.    Conditions Precedent to Addition of an Additional Mortgaged Property to the
   Collateral Pool...........................................................................................      24
   SECTION 6.05.    Conditions Precedent to Release of Property from the Collateral Pool.....................      24
   SECTION 6.06.    Conditions Precedent to Substitution of a Substitute Mortgaged Property into the
   Collateral Pool...........................................................................................      26
   SECTION 6.07.    Conditions Precedent to Increase in Commitment...........................................      27
   SECTION 6.08.    Conditions Precedent to Conversion.......................................................      27
   SECTION 6.09.    Conditions Precedent to Complete or Partial Termination of Facilities....................      27
   SECTION 6.10.    Conditions Precedent to Termination of Credit Facility...................................      28
   SECTION 6.11.    Delivery of Closing Documents Relating to Advance Request, Addition Request or
   Expansion Request.........................................................................................      28
   SECTION 6.12.    Delivery of Property-Related Documents...................................................      28
ARTICLE 7 REPRESENTATIONS AND WARRANTIES.....................................................................      29
   SECTION 7.01.    Representations and Warranties of Borrower...............................................      29
   SECTION 7.02.    Representations and Warranties of Lender.................................................      29
ARTICLE 8 AFFIRMATIVE COVENANTS OF BORROWER..................................................................      30
   SECTION 8.01.    Compliance with Agreements...............................................................      30
   SECTION 8.02.    Maintenance of Existence.................................................................      30
   SECTION 8.03.    Financial Statements; Accountants' Reports; Other Information............................      30
   SECTION 8.04.    Access to Records; Discussions With Officers and Accountants.............................      32
   SECTION 8.05.    Certificate of Compliance................................................................      33
   SECTION 8.06.    Maintain Licenses........................................................................      33
   SECTION 8.07.    Inform Lender of Material Events.........................................................      33
   SECTION 8.08.    Compliance with Applicable Laws..........................................................      34
   SECTION 8.09.    Alterations to the Mortgaged Properties..................................................      34
   SECTION 8.10.    Loan Document Taxes......................................................................      35
   SECTION 8.11.    Further Assurances.......................................................................      35
   SECTION 8.12.    Transfer of Ownership Interest of Borrower and Sun ......................................      35
   SECTION 8.13.    Transfer of Ownership of Mortgaged Property..............................................      37
   SECTION 8.14.    Change in Senior Management..............................................................      38
   SECTION 8.15.    Intentionally Omitted....................................................................      38
   SECTION 8.16.    Ownership of Mortgaged Properties........................................................      38
   SECTION 8.17.    Compliance with Net Worth Test...........................................................      38
   SECTION 8.18.    Compliance with Liquidity Test...........................................................      38
   SECTION 8.19.    Compliance with Borrower's Consolidated EBITDA to Interest Ratio.........................      38
   SECTION 8.20.    Special Covenants Regarding King's Court.................................................      39
ARTICLE 9 NEGATIVE COVENANTS OF BORROWER.....................................................................      39
   SECTION 9.01.    Other Activities.........................................................................      39
   SECTION 9.02.    Liens....................................................................................      39
   SECTION 9.03.    Indebtedness.............................................................................      40
   SECTION 9.04.    Principal Place of Business..............................................................      40
   SECTION 9.05.    Condominiums.............................................................................      40
   SECTION 9.06.    Restrictions on Distributions............................................................      40
ARTICLE 10 FEES..............................................................................................      40
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<S>                                                                                                                <C>
   SECTION 10.01.   Standby Fee..............................................................................      40
   SECTION 10.02.   Origination Fee..........................................................................      40
   SECTION 10.03.   Due Diligence Fees.......................................................................      41
   SECTION 10.04.   Legal Fees and Expenses..................................................................      41
   SECTION 10.05.   Failure to Close any Request.............................................................      42
   SECTION 10.06.   Rate Preservation Fee....................................................................      42
ARTICLE 11 EVENTS OF DEFAULT.................................................................................      42
   SECTION 11.01.   Events of Default........................................................................      42
ARTICLE 12 REMEDIES..........................................................................................      45
   SECTION 12.01.   Remedies; Waivers........................................................................      45
   SECTION 12.02.   Waivers; Rescission of Declaration.......................................................      45
   SECTION 12.03.   Lender's Right to Protect Collateral and Perform Covenants and Other Obligations.........      45
   SECTION 12.04.   No Remedy Exclusive......................................................................      46
   SECTION 12.05.   No Waiver................................................................................      46
   SECTION 12.06.   No Notice................................................................................      46
ARTICLE 13 RIGHTS OF FANNIE MAE..............................................................................      46
   SECTION 13.01.   Special Pool Purchase Contract...........................................................      46
   SECTION 13.02.   Assignment of Rights.....................................................................      46
   SECTION 13.03.   Release of Collateral....................................................................      47
   SECTION 13.04.   Replacement of Lender....................................................................      47
   SECTION 13.05.   Fannie Mae and Lender Fees and Expenses..................................................      47
   SECTION 13.06.   Third-Party Beneficiary..................................................................      47
ARTICLE 14 INSURANCE, REAL ESTATE TAXES AND REPLACEMENT RESERVES.............................................      48
   SECTION 14.01.   Insurance and Real Estate Taxes..........................................................      48
   SECTION 14.02.   Replacement Reserves.....................................................................      48
ARTICLE 15 PERSONAL LIABILITY OF THE BORROWER................................................................      48
   SECTION 15.01.   Personal Liability of Borrower...........................................................      48
ARTICLE 16 INTEREST RATE PROTECTION..........................................................................      49
   SECTION 16.01.   Interest Rate Protection.................................................................      49
   SECTION 16.02.   Cap Terms................................................................................      50
   SECTION 16.03.   Cap Security Agreement; Delivery of Cap Payments.........................................      50
   SECTION 16.04.   Termination..............................................................................      51
   SECTION 16.05.   Performance Under Cap Documents..........................................................      51
   SECTION 16.06.   Escrow Provisions........................................................................      51
   SECTION 16.07.   Cap Escrow Fund..........................................................................      52
ARTICLE 17 MISCELLANEOUS PROVISIONS..........................................................................      52
   SECTION 17.01.   Counterparts.............................................................................      52
   SECTION 17.02.   Amendments, Changes and Modifications....................................................      52
   SECTION 17.03.   Payment of Costs, Fees and Expenses......................................................      52
   SECTION 17.04.   Payment Procedure........................................................................      53
   SECTION 17.05.   Payments on Business Days................................................................      53
   SECTION 17.06.   Choice of Law; Consent to Jurisdiction; Waiver of Jury Trial.............................      54
   SECTION 17.07.   Severability.............................................................................      55
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<S>                                                                                                                <C>
   SECTION 17.08.   Notices..................................................................................      55
   SECTION 17.09.   Further Assurances and Corrective Instruments............................................      57
   SECTION 17.10.   Term of this Agreement...................................................................      57
   SECTION 17.11.   Assignments; Third-Party Rights..........................................................      57
   SECTION 17.12.   Headings.................................................................................      58
   SECTION 17.13.   General Interpretive Principles..........................................................      58
   SECTION 17.14.   Interpretation...........................................................................      58
   SECTION 17.15.   Standards for Decisions, Etc.............................................................      58
   SECTION 17.16.   Decisions in Writing.....................................................................      58
   SECTION 17.17.   Requests.................................................................................      59
   SECTION 17.18.   Tax Service Contracts....................................................................      59
</TABLE>

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                                    EXHIBITS

<TABLE>
<S>              <C>
EXHIBIT A        Schedule of Initial Mortgaged Properties and Initial Valuations
EXHIBIT B-1      Fixed Facility Note (5, 7, 10, 12 and 15-year term)
EXHIBIT B-2      Fixed Facility Note (9+1 term)
EXHIBIT C        Variable Facility Note
EXHIBIT D        Certificate of Borrower
EXHIBIT E        Guaranty
EXHIBIT F        Compliance Certificate
EXHIBIT G-1      Organizational Certificate (Sun Secured Financing LLC, Sun
                 Communities, LLC, Sun Holly Forest LLC, and Sun Saddle Oak LLC)
EXHIBIT G-2      Organizational Certificate (Aspen-Ft. Collins Limited Partnership)
EXHIBIT G-3      Organizational Certificate (Sun Secured Financing Houston Limited Partnership)
EXHIBIT G-4      Organizational Certificate (Guarantor-Sun)
EXHIBIT H        Conversion Request
EXHIBIT I        Master Credit Facility Agreement Conversion Amendment
EXHIBIT J        Rate Form
EXHIBIT K        Advance Confirmation Instrument
EXHIBIT L        Advance Request
EXHIBIT M        Request
EXHIBIT N        Confirmation of Obligations
EXHIBIT O        Expansion Request
EXHIBIT P        Facility Termination Request
EXHIBIT Q        Amendment to Master Credit Facility Agreement
EXHIBIT R        Credit Facility Termination Request
EXHIBIT S        Interest Rate Cap Security, Pledge and Assignment Agreement

APPENDIX I       Definitions
</TABLE>

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              AMENDED AND RESTATED MASTER CREDIT FACILITY AGREEMENT

      THIS AMENDED AND RESTATED MASTER CREDIT FACILITY AGREEMENT is made as of
the 28th day of April, 2004 by and among (a) (i) SUN SECURED FINANCING LLC, a
Michigan limited liability company ("SSF"), (ii) ASPEN-FT. COLLINS LIMITED
PARTNERSHIP, a Michigan limited partnership ("Aspen"), (iii) SUN SECURED
FINANCING HOUSTON LIMITED PARTNERSHIP, a Michigan limited partnership
("Houston"; individually and collectively, SSF, Aspen and Houston, the "Original
Borrower"), (iv) SUN COMMUNITIES FINANCE, LLC, a Michigan limited liability
company ("SCF"), (v) SUN HOLLY FOREST LLC, a Michigan limited liability company
("Forest"), and (iv) SUN SADDLE OAK LLC, a Michigan limited liability company
("Saddle Oak") (individually and collectively, SSF, Aspen, Houston, SCF, Forest
and Saddle Oak, "Borrower"), and (b) ARCS COMMERCIAL MORTGAGE CO., L.P., a
California limited partnership ("Lender").

                                    RECITALS

      A.    Original Borrower and Lender entered into that certain Master Credit
Facility Agreement dated as of May 29, 2002, as amended by that certain First
Amendment to Master Credit Facility Agreement dated as of August 29, 2002, as
further amended by that certain Second Amendment to Master Credit Facility dated
as of November 26, 2002, and as further amended by that certain Third Amendment
to Master Credit Facility Agreement dated as of April 5, 2004 (as amended, the
"Original Agreement") pursuant to which Lender agreed to make credit available
to Original Borrower under the terms and conditions set forth in the Original
Agreement.

      B.    Pursuant to the Original Agreement, among other things, various
Mortgaged Properties (each capitalized term used but not defined has the
definition ascribed to it in Article I of this Agreement) were added to the
Collateral Pool.

      C.    Pursuant to the Original Agreement, Lender established a
$152,362,500 Commitment in favor of Original Borrower, comprised of a
$75,000,000 Variable Facility and a $77,362,500 Fixed Facility.

      D.    Original Borrower has requested that various terms and conditions of
the Original Agreement be modified. Borrower and Lender now wish to amend and
restate the Original Agreement in its entirety.

      E.    Borrower and Lender desire to, among other things, provide for the
increase in the Commitment to $390,000,000, modify the amount by which the
Commitment may be expanded, and modify certain other terms of the Original
Agreement as set forth hereinafter.

      F.    Borrower owns one or more Manufactured Housing Communities as more
particularly described in Exhibit A to this Agreement.

      G.    To secure the obligations of Borrower under this Agreement and the
other Loan Documents issued in connection with the Credit Facility, Borrower
shall create a Collateral Pool

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in favor of Lender. The Collateral Pool shall be comprised of (i) Security
Instruments on the Manufactured Housing Communities listed on Exhibit A and (ii)
any other Security Documents executed by Borrower pursuant to this Agreement or
any other Loan Documents.

      H.    Each Security Document shall be cross-defaulted (i.e., a default
under any Security Document, or under this Agreement, shall constitute a default
under each Security Document, and this Agreement) and cross-collateralized
(i.e., each Security Instrument shall secure all of Borrower's obligations under
this Agreement and the other Loan Documents) and it is the intent of the parties
to this Agreement that Lender may accelerate any Note without needing to
accelerate any other Note and that in the exercise of its rights and remedies
under the Loan Documents, Lender may, except as provided in this Agreement,
exercise and perfect any and all of its rights in and under the Loan Documents
with regard to any Mortgaged Property without needing to exercise and perfect
its rights and remedies with respect to any other Mortgaged Property and that
any such exercise shall be without regard to the Allocable Facility Amount
assigned to such Mortgaged Property and that Lender may recover an amount equal
to the full amount outstanding in respect of any of the Notes in connection with
such exercise and any such amount shall be applied as determined by Lender in
its sole and absolute discretion.

      I.    Subject to the terms, conditions and limitations of this Agreement,
Lender has agreed to modify and increase the Credit Facility.

      NOW, THEREFORE, Borrower and Lender, in consideration of the mutual
promises and agreements contained in this Agreement, hereby agree to amend and
restate, in its entirety, the Original Agreement as follows:

                                   ARTICLE 1

                                 THE COMMITMENT

      SECTION 1.01. The Commitment.

      Subject to the terms, conditions and limitations of this Agreement:

            (a)   Variable Facility Commitment. Lender agrees to make Variable
Advances to Borrower from time to time during the Variable Facility Availability
Period. The aggregate principal balance of the Variable Advances Outstanding at
any time shall not exceed the Variable Facility Commitment. Except as provided
in Section 2.06 of this Agreement, no Variable Advance shall be made as a result
of increases in the Valuation of any Mortgaged Property; provided, however,
Borrower shall not be precluded from obtaining a release of a Mortgaged Property
as otherwise provided herein. Borrower may re-borrow any part of the Variable
Advances which it has previously borrowed and repaid.

            (b)   Fixed Facility Commitment. Lender agrees to make Fixed
Advances to Borrower from time to time during the Fixed Facility Availability
Period. The aggregate original principal of the Fixed Advances shall not exceed
the Fixed Facility Commitment. Except as provided in Section 2.06 of this
Agreement, no Fixed Advance shall be made as a result of

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increases in the Valuation of any Mortgaged Property; provided, however,
Borrower shall not be precluded from obtaining a release of a Mortgaged Property
as otherwise provided herein. The borrowing of a Fixed Advance shall permanently
reduce the Fixed Facility Commitment by the original principal amount of such
Fixed Advance. Borrower may re-borrow as a Variable Advance (but not as a Fixed
Advance) any part of the Fixed Advance which it has previously borrowed and
repaid.

      SECTION 1.02. Requests for Advances.

      Borrower shall request an Advance by giving Lender an Advance Request in
accordance with Section 2.04. The Advance Request shall indicate whether the
Request is for a Fixed Advance, a Variable Advance or both.

      SECTION 1.03. Maturity Date of Advances.

            (a)   Variable Advances. The MBS Issue Date shall be the first day
of a month and the maturity date of the MBS funding each Variable Advance shall
be specified by Borrower in its Advance Request, which date shall be:

            (i)   no earlier than the date which completes three full months
                  after the MBS Issue Date; and

            (ii)  no later than the date which completes nine full months after
                  the MBS Issue Date.

      For these purposes, a year shall be deemed to consist of 12 30-day months.
For example, the date which completes three full months after September 1 shall
be December 1; and the date which completes three full months after January 1
shall be April 1.

      No principal payments in respect of any Variable Advance shall be due
prior to the maturity date of such Variable Advance. Any prepayment of Variable
Advances shall apply to the Variable Advance designated by Borrower.

            (b)   Fixed Advances. The maturity date of each Fixed Advance shall
be specified by Borrower, provided that such maturity date shall be the 5th,
7th, 10th, 12th or 15th anniversary of the making of such Fixed Advance,
provided that in no event shall the maturity date of any Fixed Advance be later
than the 15th anniversary of the Initial Closing Date. In the event the Borrower
elects a maturity of a Fixed Advance of the 10 years from the making of such
Fixed Advance, the Borrower may elect a "9+1" maturity, which Fixed Advance
shall be evidenced by a promissory note in substantially the form of Exhibit B-2
to this Agreement. All Fixed Advances having a maturity other than a "9+1"
maturity shall be evidenced by a promissory note in substantially the form of
Exhibit B-1 to this Agreement.

      The principal of each Fixed Advance shall be amortized on a 30-year
schedule, provided that Lender may, in its sole discretion (consistent with
Lender's criteria for the analysis of repayment plans for similar loans secured
by similar properties), based on an analysis of Borrower's plan to repay the
relevant Fixed Advance, permit payments of principal to begin (i)

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in the case of a Fixed Advance having a maturity date seven (7) years from the
date of such Fixed Advance, the date one (1) year after the date of the Fixed
Advance, (ii) in the case of a Fixed Advance having a maturity date ten (10)
years from the date of such Fixed Advance, the date two (2) years after the date
of the Fixed Advance, and (iii) in the case of a Fixed Advance having a maturity
date more than ten (10) years from the date of such Fixed Advance, such date as
Lender may elect in its sole discretion.

      If a 100% participation in a Fixed Advance is purchased by Fannie Mae in
return for MBS, Borrower may, at its option, elect to have such Fixed Advance
evidenced by a series of Fixed Facility Notes, each having an original principal
amount selected by Borrower (totaling, in the aggregate, the original principal
amount of such Fixed Advance); provided no such Fixed Facility Note may have an
original principal amount of less than $5,000,000.

            (c)   Prepayment. Fixed Advances are not prepayable at any time,
provided that, notwithstanding the foregoing, if Borrower has elected yield
maintenance with respect to any Fixed Advance, Borrower (i) may prepay not less
than all of such Fixed Advance during the last six months of the term of such
Fixed Advance, and (ii) (A) if a 100% participation interest in the Fixed
Advance has been purchased by Fannie Mae in return for MBS, may prepay not less
than all of such Fixed Advance or (B) if a 100% participation interest in the
Fixed Advance has been purchased by Fannie Mae for cash, may prepay all or any
portion of such Fixed Advaance pursuant to the yield maintenance provisions of
the Fixed Facility Note.

      SECTION 1.04. Interest on Advances.

            (a)   Partial Month Interest. Notwithstanding anything to the
contrary in this Section, if an Advance is not made on the first day of a
calendar month, Borrower shall pay interest on the original stated principal
amount of the Advance for the partial month period commencing on the Closing
Date for the Advance and ending on the last day of the calendar month in which
the Closing Date occurs, (i) for a Variable Advance at a rate per annum equal to
the greater of (1) the Coupon Rate as determined in accordance with Section
1.05(a) and (2) a rate determined by Lender, based on Lender's cost of funds and
approved in advance, by Borrower, pursuant to the procedures mutually agreed
upon by Borrower and Lender, and (ii) for a Fixed Advance at a rate, per annum
equal to the greater of (1) the interest rate for the described in subsection
(c)(i) of this Section and (2) a rate determined by Lender, based on Lender's
cost of funds, and approved in advance, by Borrower, pursuant to procedures
mutually agreed upon by Borrower and Lender.

            (b)   Variable Advances.

                  (i)   Discount. Each Variable Advance shall be a discount
      loan. The original stated principal amount of a Variable Advance shall be
      the sum of the Price and the Discount. The Price and Discount of each
      Variable Advance shall be determined in accordance with the procedures set
      out in Section 2.01. The proceeds of the Variable Advance made available
      by Lender to Borrower will equal the original stated principal amount of
      the Variable Advance. Borrower shall pay to Lender, in advance of Lender
      making a Variable Advance requested by Borrower, the entire Discount for
      the Variable

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      Advance. On the maturity of each Variable Advance, the Borrower shall pay
      the Lender an amount equal to the original stated principal amount of such
      Variable Advance.

                  (ii)  Variable Facility Fee. In addition to paying the
      Discount and the partial month interest, if any, Borrower shall pay
      monthly installments of the Variable Facility Fee to Lender for each
      Variable Advance from the applicable MBS Issue Date to its maturity date.
      The Variable Facility Fee shall be payable in advance, in accordance with
      the terms of the Variable Facility Note. The first installment shall be
      payable on or prior to the Closing Date for the Variable Advance and shall
      apply to the first full calendar month of such MBS. Subsequent
      installments shall be payable on the first day of each calendar month,
      commencing on the first day of the second full calendar month of such MBS,
      to its maturity date. Each installment of the Variable Facility Fee shall
      be in an amount equal to the product of (1) the Variable Facility Fee, (2)
      the original stated principal amount of the Variable Advance, and (3)
      1/12.

            (c)   Fixed Advances.

                  (i)   Annual Interest Rate. Each Fixed Advance shall bear
      interest at a rate, per annum, equal to the sum of (1) the Pass-Through
      Rate for such Fixed Advance and (2) the Fixed Facility Fee (to the extent
      not included in the Pass-Through Rate).

                  (ii)  Fixed Facility Fee. In addition to paying the partial
      month interest, if any, Borrower shall pay monthly installments of the
      Pass-Through Rate and the Fixed Facility Fee to Lender for each Fixed
      Advance in accordance with the terms of the Fixed Facility Note. The
      Pass-Through Rate and the Fixed Facility Fee shall be payable in arrears,
      in accordance with the terms of the Fixed Facility Note. The first
      installment shall be payable on the first day of each calendar month,
      commencing on the first day of the second full calendar month following
      the making of a Fixed Advance, to its maturity date. Each installment of
      the Fixed Facility Fee shall be in an amount equal to the product of (1)
      the Fixed Facility Fee, (2) the Outstanding principal balance of the Fixed
      Advance, and (3) 1/12. The interest rate stated in each Fixed Facility
      Note includes both the Pass-Through Rate and the Fixed Facility Fee.

      SECTION 1.05. Coupon Rates for Advances.

            (a)   Variable Advances. The Coupon Rate shall equal the sum of (1)
an interest rate as determined by Lender (rounded to three places) payable for
the MBS pursuant to the MBS Commitment ("MBS Imputed Interest Rate") and (2) the
Variable Facility Fee.

            (b)   Fixed Advances. The Coupon Rate shall be the rate of interest
applicable to such Fixed Advance pursuant to Section 1.04(c)(i).

      SECTION 1.06. Notes.

            (a)   Variable Advances. The obligation of Borrower to repay shall
be evidenced by the Variable Facility Note. The Variable Facility Note shall be
payable to the order of Lender and shall be made in the amount of the Variable
Facility Commitment.

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<PAGE>

            (b)   Fixed Advances. The obligation of Borrower to repay shall be
evidenced by the Fixed Facility Notes. The Fixed Facility Notes shall be payable
to the order of Lender and shall be made in the original principal amount of
each Fixed Advance.

      SECTION 1.07. Extension of Original Variable Facility Termination Date and
Variable Facility Termination Date.

      Borrower shall have the right to extend (i) the Original Variable Facility
Termination Date for (a) one (1) period, which period shall end on the date five
(5) years after the Initial Closing Date, (b) if the Borrower has extended the
Original Variable Facility Termination Date pursuant to (a) above, one (1)
additional period, which period shall end on the date ten (10) years after the
Initial Closing Date, and (ii) the Variable Facility Termination Date for one
(1) five (5) year period, which period shall end on the date ten (10) years
after the Initial Closing Date (in each case, an "Extension"), in each case upon
satisfaction of each of the following conditions:

            (a)   Borrower provides written notice requesting the Extension
("Extension Notice") to Lender not less than 90 nor more than 360 days prior to
the then effective Original Variable Facility Termination Date or Variable
Facility Termination Date, as applicable.

            (b)   No Event of Default or Potential Event of Default exists on
either the date the Extension Notice is given or on the then effective Variable
Facility Termination Date.

            (c)   All of the representations and warranties of Borrower
contained in Article 7 of this Agreement and the other Loan Documents are true
and correct in all material respects on the date the Extension Notice is given
and on the then effective Original Variable Facility Termination Date, or
Variable Facility Termination Date, as applicable, or any such changes to the
truth and accuracy of such representations and warranties shall not have had a
Material Adverse Effect on the Borrower or any of the Mortgaged Properties.

            (d)   Borrower is in compliance with all of the covenants contained
in Articles 8 and 9 on the date the Extension Notice is given and on the then
effective Variable Facility Termination Date.

      Upon receipt of the Extension Notice with respect to the Original Variable
Termination Date extension referred to in Section 1.07(a)(i), and upon
compliance with the conditions set forth above, the Original Variable Facility
Termination Date shall be extended until the date five (5) years after the
Initial Closing Date on the terms and conditions contained in this Agreement and
the other Loan Documents. Upon receipt of the Extension Notice with respect to
the Original Variable Facility Date extension referred to in Section
1.07(a)(ii), and upon compliance with the conditions set forth above, the
Original Variable Facility Termination Date shall be extended until the date ten
(10) years after the Initial Closing Date on the terms and conditions contained
in this Agreement and the other Loan Documents. Upon receipt of the Extension
Notice with respect to the Variable Termination Date and upon compliance with
the conditions set forth above, the Variable Facility Termination Date shall be
extended until the date ten (10) years after the Initial Closing Date on the
terms and conditions contained in this Agreement and the other Loan Documents.
The Variable Facility Fee, the Rate Preservation Fee and the

                                       6

<PAGE>

Standby Fee applicable to the Variable Facility during the Extension shall be as
determined by Lender, pursuant to the terms of this Agreement.

      SECTION 1.08. Conversion from Variable Facility Commitment to Fixed
Facility Commitment.

      Except as provided in Section 1.09, Borrower shall have the right, from
time to time during the Fixed Facility Availability Period, to convert all or
any portion of the Variable Facility Commitment to the Fixed Facility
Commitment. The Variable Facility Commitment shall be reduced by, and the Fixed
Facility Commitment shall be increased by, the amount of each conversion.

            (a)   Request. To convert all or a portion of the Variable Facility
Commitment to the Fixed Facility Commitment, Borrower shall deliver a Conversion
Request to Lender. Each Conversion Request shall designate (1) the amount of the
conversion and (2) any Variable Advances Outstanding which will be prepaid on or
before the Closing Date for the conversion as required by Section 1.09(c). If,
after Lender determines the interest rate to be applicable to the Fixed Loan
after conversion, Borrower elects not to proceed with the conversion, it shall
so notify Lender in writing. If Borrower revokes any Conversion Request pursuant
to the preceding sentence, it shall be responsible for the reasonable costs and
expenses incurred by Lender in connection with such Conversion Request.

            (b)   Determination of Interest Rate for Conversion. The
determination of the interest rate applicable for any Fixed Advance relating to
the conversion of any or all of the Variable Facility Commitment to the Fixed
Facility Commitment shall be made not later than the Business Day following the
date on which Borrower requests such determination be made, provided that (i)
the Future Advance Request for such Fixed Advance has been approved by Lender
and (ii) Borrower requests that the interest rate determination be made not
later than 10:00 a.m. Eastern time on the Business Day prior to the day on which
Borrower desires the interest rate determination to be made.

            (c)   Closing. Subject to Section 1.09 and provided that all
conditions contained in Section 1.10 are satisfied, Lender shall permit the
requested conversion to close at offices designated by Lender on a Closing Date
selected by Lender, and occurring within 30 Business Days after Lender's receipt
of the Conversion Request (or on such other date as Borrower and Lender may
agree). At the closing, Lender and Borrower shall execute and deliver, at the
sole cost and expense of Borrower, in form and substance satisfactory to Lender,
the Conversion Documents.

      SECTION 1.09. Limitations on Right to Convert.

      Borrower's right to convert all or any portion of the Variable Facility
Commitment to the Fixed Facility Commitment is subject to the following
limitations:

            (a)   Closing Date. The Closing Date shall occur during the Fixed
Facility Availability Period.

                                       7

<PAGE>

            (b)   Minimum Request. Each Conversion Request shall be in the
minimum amount of $5,000,000.

            (c)   Obligation to Prepay Variable Advances. Borrower shall prepay
any difference by which, after the conversion, the aggregate unpaid principal
balance of all Variable Advances Outstanding will exceed the Variable Facility
Commitment. No Facility Termination Fee shall be due in connection with any
Conversion.

            (d)   Conversion in Connection with Advance. The amount of the
Variable Facility Commitment converted to a Fixed Facility Commitment shall be
equal to the amount of a Fixed Advance made simultaneously with such conversion.

      SECTION 1.10. Conditions to Conversion.

      The conversion of all or any portion of the Variable Facility Commitment
to the Fixed Facility Commitment is subject to the satisfaction, on or before
the Closing Date, of (a) the conditions precedent contained in Section 6.08 and
(b) all applicable General Conditions contained in Section 6.01.

                                   ARTICLE 2

                                  THE ADVANCES

      SECTION 2.01. Rate Setting for an Advance.

      Rates for an Advance shall be set in accordance with the following
procedures:

            (a)   Preliminary, Nonbinding Quote. At Borrower's request Lender
shall quote an estimate of the Pass-Through Rate (for a proposed Fixed Advance),
which Pass-Through Rate shall not include the Fixed Facility Fee or MBS Imputed
Interest Rate (for a proposed Variable Advance), which MBS Imputed Interest Rate
shall not include the Variable Facility Fee. Lender's quote shall be based on
(1) a solicitation of bids from institutional investors selected by Lender and
(2) the proposed terms and amount of the Advance selected by Borrower. The quote
shall not be binding upon Lender.

            (b)   Rate Setting. If Borrower satisfies all of the conditions to
Lender's obligation to make the Advance, then Borrower may submit to Lender, by
facsimile transmission before 1:00 p.m. Washington, D.C. time on any Business
Day ("Rate Setting Date"), a completed and executed Rate Form. The Rate Form
shall specify the amount, term, MBS Issue Date (if applicable), Facility Fee,
the proposed maximum Coupon Rate ("Maximum Annual Coupon Rate") and Closing Date
for the Advance.

            (c)   Rate Confirmation. Within one Business Day after receipt of
the Rate Form, Lender shall solicit bids from institutional investors selected
by Lender based on the information in the Rate Form and, provided the actual
Coupon Rate (if the low bid were accepted) would be at or below the Maximum
Annual Coupon Rate, shall obtain a commitment ("MBS Commitment") for the
purchase of an MBS having the bid terms described in the related

                                       8

<PAGE>

Rate Form or, in the case of the purchase of a 100% participation in any Fixed
Advance by Fannie Mae for cash, a commitment from Fannie Mae ("Fannie Mae
Commitment") for the purchase of such participation having the bid terms
described in the related Rate Form. Lender shall then complete and countersign
the Rate Form thereby confirming the amount, term, MBS Issue Date (if
applicable), MBS Delivery Date (if applicable), MBS Imputed Interest Rate or
Pass-Through Rate, Facility Fee, Coupon Rate, Discount, Price, and Closing Date
for the Advance and shall immediately deliver by facsimile transmission the Rate
Form to Borrower.

      SECTION 2.02. Advance Confirmation Instrument for Variable Advances.

      On or before the Closing Date for a Variable Advance, Borrower shall
execute and deliver to Lender a fully executed Advance Confirmation Instrument,
confirming the amount, term, MBS Issue Date, MBS Delivery Date, MBS Imputed
Interest Rate, Variable Facility Fee, Coupon Rate, Discount, Price and Closing
Date for the Advance, and Borrower's obligation to repay the Variable Advance in
accordance with the terms of the Variable Facility Note and this Agreement. Upon
the funding of the Variable Advance, Lender shall insert the date of funding on
the Advance Confirmation Instrument and deliver a copy of the completed Advance
Confirmation Instrument to Borrower to evidence the date of funding and to
confirm that the Advance Confirmation Instrument is not effective until the date
of funding. Lender's failure to do so shall not invalidate the Advance
Confirmation Instrument or otherwise affect in any way any obligation of
Borrower to repay Variable Advances in accordance with the Advance Confirmation
Instrument, the Variable Facility Note or the other Loan Documents.

      SECTION 2.03. Breakage and other Costs.

      If Lender obtains, and then fails to fulfill, an MBS Commitment or a
Fannie Mae Commitment because the Advance is not made (for a reason other than
Lender's default), Borrower shall pay all reasonable out-of-pocket costs payable
to the potential investor and other reasonable costs, fees and damages incurred
by Lender in connection with its failure to fulfill an MBS Commitment or a
Fannie Mae Commitment.

      SECTION 2.04. Advances.

      Borrower may deliver an Advance Request to Lender.

            (a)   If the Advance Request is to obtain the Initial Advance and
all conditions precedent contained in Section 6.02 and the General Conditions
contained in Section 6.01 are satisfied on or before the Closing Date for the
Initial Advance, Lender shall make the Initial Advance on the Initial Closing
Date or on such other date as Borrower and Lender may agree.

            (b)   If the Advance Request is to obtain a Future Advance, such
Advance Request shall be in the minimum amount of $3,000,000. Borrower may have
one or more Advances of not less than $3,000,000 even though such Advances are
made on the same day and mature on the same date. If all conditions precedent
contained in Section 6.03 and the General Conditions contained in Section 6.01
are satisfied, Lender shall make the requested Future Advance, at a closing to
be held at offices designated by Lender on a Closing Date selected by

                                       9

<PAGE>

Lender, which date shall be not more than three (3) Business Days after
Borrower's receipt from Lender of the confirmed Rate Form (or on such other date
as Borrower and Lender may agree).

            (c)   Upon the making of an Advance, in no event shall the aggregate
of all Advances Outstanding exceed the lesser of (i) the Commitment Amount in
effect at the time the Advance is requested, and (ii) $400,000,000.

      SECTION 2.05. Determination of Allocable Facility Amount and
Valuations.

            (a)   Initial Determinations. On the Initial Closing Date, Lender
shall determine (i) the Allocable Facility Amount and Valuation for each
Mortgaged Property and (ii) the Aggregate Debt Service Coverage Ratio and the
Aggregate Loan to Value Ratio. The determinations of Allocable Facility Amounts
and Valuations made as of the Initial Closing Date shall remain unchanged until
the First Anniversary.

            (b)   Monitoring Determinations. (i) Once each calendar month or, if
the Commitment consists only of a Fixed Facility Commitment, once each Calendar
Year, within 20 Business Days after Borrower has delivered to Lender the reports
required in Section 8.03, Lender shall determine the Aggregate Debt Service
Coverage Ratio and the Aggregate Loan to Value Ratio, provided that the
Aggregate Debt Service Coverage Ratio and the Aggregate Loan to Value Ratio
determined as of the Initial Closing Date shall be in effect for purposes of
Future Advances until the date 90 days after the Initial Closing Date, and
calculations required in connection with the other covenants set forth in the
Loan Documents, and whether the Borrower is in compliance, (ii) after the First
Anniversary, on an annual basis, and if Lender reasonably decides that changed
market or property conditions warrant, Lender shall determine Allocable Facility
Amounts and Valuations, (iii) Lender shall also redetermine Allocable Facility
Amounts to take account of any addition, release or substitution of Collateral
or other event which invalidates the outstanding determinations. In determining
Valuations, Lender shall use the then current Cap Rates. Until redetermined, the
outstanding Allocable Facility Amounts and Valuations shall remain in effect.
During the first Loan Year a Mortgaged Property is in the Collateral Pool, all
calculations of Aggregate Debt Service Coverage and Aggregate Loan to Value
Ratios including such Mortgaged Property shall be based on actual operations of
such Mortgaged Property during the period the Mortgaged Property was in the
Collateral Pool and underwriting proforma results for the remainder of such Loan
Year.

      SECTION 2.06. Right to Advances Based on Increased Collateral Value.

      At any time during the Variable Facility Availability Period after the
First Anniversary, the Borrower shall have a one-time right to a Future Advance
based on the increased value of the Mortgaged Properties. Borrower's right to a
Future Advance pursuant to this Section shall be subject to the following
conditions:

            (a)   Request. The Borrower shall deliver an Advance Request to
Lender. The Advance Request shall include the following:

                  (i)   The amount of the proposed Future Advance; and

                                       10

<PAGE>

                  (ii)  If applicable, a request that Lender inform the Borrower
      of the Variable Facility Fee or Fixed Facility Fee applicable to the
      requested Future Advance.

            (b)   Determination of Amount of Advance. The maximum amount of a
proposed Future Advance requested pursuant to this Section 2.06 shall be the
amount that when added to the then current total of Advances Outstanding equals
the maximum amount of Advances that could be outstanding and the Coverage and
LTV Tests be satisfied. For purposes of calculating compliance with the Coverage
and LTV Tests for purposes of this Section 2.06, Lender shall evaluate the
Collateral Pool in accordance with DUS Guide Underwriting Requirements. In no
event shall the Future Advance requested pursuant to this Section 2.06, together
with the then current Advances Outstanding, exceed the lesser of (i) the
Commitment Amount in effect at the time the Future Advance is requested, and
(ii) $400,000,000.

            (c)   Variable Facility Fee. The Variable Facility Fee applicable to
any Future Advance made pursuant to this Section 2.06 (regardless of whether
such Advance is drawn from the Reserved Amount) shall be the Variable Facility
Fee determined by Lender at the time of the making of the Future Advance.

            (d)   Origination Fee. Borrower shall pay, on the Closing Date of
the Future Advance made pursuant to this Section 2.06, the Expansion Origination
Fee to the extent provided in Section 10.02(b).

            (e)   Closing. If all conditions precedent contained in Section 6.03
of this Agreement and all applicable General Conditions contained in Section
6.01 of this Agreement are satisfied, Lender shall make a Future Advance, at a
closing to be held at offices designated by Lender on a Closing Date selected by
Lender, and occurring within thirty (30) calendar days after Lender's approval
of the Future Advance (or on such other date as Borrower and Lender may agree).

                                   ARTICLE 3

                               COLLATERAL CHANGES

      SECTION 3.01. Right to Add Collateral.

      Subject to the terms and conditions of this Article, Borrower shall have
the right, from time to time during the Term of this Agreement, to add
Manufactured Housing Communities to the Collateral Pool.

      SECTION 3.02. Procedure for Adding Collateral.

      The procedure for adding Collateral contained in this Section 3.02 shall
apply to all additions of Collateral including, but not limited to, additions of
Collateral in connection with substitutions of Collateral and expansion of the
Credit Facility.

                                       11

<PAGE>

            (a)   Request. Borrower may deliver to Lender an Addition Request to
add one or more Manufactured Housing Communities to the Collateral Pool. Each
Addition Request shall be accompanied by the following: (i) the information
required by the DUS Guide Underwriting Requirements including any Lender
memoranda relating to Manufactured Housing Communities issued by Fannie Mae from
time to time and any additional information Lender may reasonably request; and
(ii) the payment of all Additional Collateral Due Diligence Fees.

            (b)   Underwriting. Lender shall evaluate the proposed Additional
Mortgaged Property in accordance with the DUS Guide Underwriting Requirements
including any Lender memoranda relating to Manufactured Housing Communities
issued by Fannie Mae from time to time, and shall make underwriting
determinations as to the Aggregate Debt Service Coverage Ratio and the Aggregate
Loan to Value Ratio applicable to the Collateral Pool on the basis of the lesser
of (1) the acquisition price of the proposed Additional Mortgaged Property if
purchased as a single acquisition or a reasonable allocation of total purchase
price if purchased as part of a portfolio purchase by Borrower within 12 months
of the related Addition Request, and (2) a Valuation made with respect to the
proposed Additional Mortgaged Property. Within 30 Business Days (provided that
Lender shall use reasonable efforts to respond sooner) after receipt of (1) the
Addition Request and (2) all reports, certificates and documents required by the
DUS Guide Underwriting Requirements including any Lender memoranda relating to
Manufactured Housing Communities issued by Fannie Mae from time to time,
including a zoning analysis undertaken in accordance with Section 206 of Part
III of the DUS Guide, Lender shall notify Borrower whether it shall consent to
the Addition Request. If Lender consents it shall set forth the Aggregate Debt
Service Coverage Ratio and the Aggregate Loan to Value Ratio which it estimates
shall result from the addition of the proposed Additional Mortgaged Property.
Within 30 Business Days after receipt of Lender's consent to the Addition
Request, Borrower shall notify Lender whether it elects to add the proposed
Additional Mortgaged Property to the Collateral Pool. If Borrower fails to
respond within the period of 30 Business Days, it shall be conclusively deemed
to have elected not to add the proposed Additional Mortgaged Property to the
Collateral Pool.

            (c)   Closing. If Lender consents to the Addition Request, Borrower
timely elects to add the proposed Additional Mortgaged Property to the
Collateral Pool and all conditions precedent contained in Section 6.04 and all
General Conditions contained in Section 6.01 are satisfied, Lender shall permit
the addition of the proposed Additional Mortgaged Property to the Collateral
Pool, at a closing to be held at offices designated by Lender on a Closing Date
selected by Lender, occurring within 20 Business Days after Lender's receipt of
Borrower's election (or on such other date as Borrower and Lender may agree).

      SECTION 3.03. Right to Obtain Releases of Collateral.

      Subject to the terms and conditions of this Article, Borrower shall have
the right to obtain a release of Collateral from the Collateral Pool.

      SECTION 3.04. Procedure for Obtaining Releases of Collateral.

                                       12

<PAGE>

            (a)   Request. To obtain a release of Collateral from the Collateral
Pool, Borrower may deliver a Release Request to Lender. The Release Request
shall not result in a termination of all or any part of the Credit Facility.
Borrower may terminate all or any part of the Credit Facility only by delivering
a Facility Termination Request or Credit Facility Termination Request pursuant
to Article 5.

            (b)   Closing. If all conditions precedent contained in Section 6.05
and all General Conditions contained in Section 6.01 are satisfied, Lender shall
cause the Release Property to be released, at a closing to be held at offices
designated by Lender on a Closing Date selected by Lender, and occurring not
less than 15 days after Lender's receipt of the Release Request (or on such
other date as Borrower and Lender may agree), by executing and delivering, and
causing all applicable parties to execute and deliver, all at the sole cost and
expense of Borrower, the Release Documents. Borrower shall prepare the Release
Documents and submit them to Lender for its review.

            (c)   Release Price. The Release Price for each Mortgaged Property
shall be (A) the greater of (i) 110% of the Allocable Facility Amount for the
Release Property and (ii) the amount of any Advances Outstanding which are
required to be repaid by Borrower to Lender so that, immediately after the
release, the Aggregate Debt Service Coverage Ratio immediately prior to the
release is not reduced and the Aggregate Loan to Value Ratio immediately prior
to the release is not increased, (B) if after the release of the Release
Property (regardless of the Aggregate Loan to Value Ratio or the Aggregate Debt
Service Coverage Ratio prior to the release), the Aggregate Loan to Value Ratio
is 65% or less and the Aggregate Debt Service Coverage is 1.35:1.0 or greater,
then the Release Price shall be the Allocable Facility Amount for the Release
Property, or (C) if after the release of the Release Property (regardless of the
Aggregate Loan to Value Ratio or the Aggregate Debt Service Coverage Ratio prior
to the release), the Aggregate Loan to Value Ratio is 60% or less and the
Aggregate Debt Service Coverage Ratio is 1.55:1.0 or greater, then the Release
Price, if any, shall be the amount of any Advances Outstanding which are
required to be repaid by Borrower to Lender so that, immediately after the
release, the Aggregate Debt Service Coverage Ratio is no less than 1.55:1.0 and
the Aggregate Loan to Value Ratio is no more than 60%. In addition, Borrower
shall pay to Lender all other amounts due under the Notes and any Advance
Confirmation Instruments evidencing the Advances being repaid. Notwithstanding
the provisions of this Section 3.04(c), upon the maturity of any Fixed Advance
and the repayment in full of all amounts owing in connection with such Fixed
Advance, the Release Price for any Mortgaged Property to be released from the
collateral pool in conjunction with such repayment shall be equal to the
Outstanding Allocated Facility Amount for such Released Property.

            (d)   Application of Release Price. The Release Price shall be
applied first against the Variable Advances Outstanding until there are no
further Variable Advances Outstanding, then against the prepayment of Fixed
Advances Outstanding, so long as the prepayment is permitted under the
applicable Fixed Facility Note. If, on the date Borrower pays the Release Price,
Variable Advances are Outstanding but not then due and payable, Lender shall
hold the Release Price in an interest-bearing account as additional Collateral,
until the next date on which Variable Advances are due and payable, at which
time Lender shall apply the appropriate portion of the Release Price to such
Variable Advances.

                                       13

<PAGE>

            (e)   Special Provisions Regarding Expansion Property. The Parties
acknowledge that certain portions of the Mortgaged Properties commonly known as
Eagle Crest, Boulder Ridge, and Windham Hills are currently undeveloped and
vacant (such undeveloped and vacant portions, individually and collectively, the
"EXPANSION PROPERTY"). Notwithstanding any provisions in this Agreement to the
contrary, Borrower shall be permitted to release an Expansion Property from the
Collateral Pool without the payment of a Release Price upon the satisfaction of
each of the following conditions:

                  (i)     Lender shall have approved the legal description of
      the relevant Mortgaged Property remaining in the Collateral Pool after the
      release of the Expansion Property;

                  (ii)    Borrower shall have transferred the Expansion Property
      into a separate tax parcel and the Mortgaged Property remaining in the
      Collateral Pool shall have a separate tax identification number;

                  (iii)   If necessary, Borrower shall have subdivided or
      replatted the Mortgaged Property, as required by the jurisdiction in which
      the Mortgaged Property is located, such that the Mortgaged Property
      remaining in the Collateral Pool after the release of the Expansion
      Property shall be a separate parcel, on which Lender can exercise all
      rights and remedies afforded in this Agreement and the Security
      Instrument, including conveying the Mortgaged Property upon foreclosure;

                  (iv)    Borrower shall have recorded any easements, in a form
      and substance required by Lender, benefiting the Mortgaged Property after
      the release of the Expansion Property including, but not limited to,
      easements granting use and/or access to amenities on the Expansion
      Property, utility easements for utilities located or to be located on the
      Expansion Property benefiting the remaining Mortgaged Property, and
      parking or access easements;

                  (v)     The Expansion Property shall be deeded to an entity,
      that is not a Borrower under this Agreement, at the time of such release;

                  (vi)    Borrower shall amend the existing Security Instrument
      for such Mortgaged Property to reflect the new legal description of the
      Mortgaged Property, which legal description shall include any beneficial
      easements;

                  (vii)   Borrower shall cause the existing title policy for
      such Mortgaged Property to be amended to reflect the new legal description
      of the Mortgaged Property, which legal description shall include any
      beneficial easements as insured parcels;

                  (viii)  Borrower covenants that the Expansion Property shall
      be developed and operated in a manner compatible with the use of the
      remaining Mortgaged Property as a manufactured housing community; and

                                       14

<PAGE>

                  (ix)    Borrower shall pay all of Lender's reasonable costs
      and expenses, including legal fees and expenses, in connection with the
      release of any Expansion Property.

            (f)   Special Provisions Regarding Eagle Crest. The Parties
acknowledge that Borrower intends to dedicate to the Town of Lady Lake, Florida
the water supply system and wastewater treatment plant (the "WATER OAK WATER
TREATMENT FACILITY") located on Parcels A, B and C of that certain Mortgaged
Property commonly known as Water Oak in Lake County, Florida (the "WATER OAK
PROPERTY"). Lender hereby agrees to consent to such dedication and to release
the Water Oak Water Treatment Facility from the Collateral Pool upon the
satisfaction of the following conditions:

                  (i)     Lender shall have reviewed and approved the final form
      of the Agreement for Purchase and Sale, the Rate Agreement, the Water and
      Wastewater Capacity Reservation Agreement, the Golf Course and Common Area
      Utilization Agreement and the Technical Assistance Agreement, each by and
      between SCF and the Town of Lady Lake, and any other documents executed in
      connection with the dedication of the Water Oak Water Treatment Facility;

                  (ii)    If the legal description of the Water Oak Water
      Treatment Facility is not Parcels A, B, and C of the Water Oak Property,
      Lender shall have approved the legal description of the Water Oak Water
      Treatment Facility to be released from the Collateral Pool;

                  (iii)   If necessary, Borrower shall have transferred the
      Water Oak Water Treatment Facility into a separate Tax ID parcel and
      remainder of the Water Oak Property shall have a Tax ID separate from the
      Water Oak Water Treatment Facility;

                  (iv)    If necessary, Borrower shall have subdivided or
      replatted the Water Oak Property, as required by the Lake County, Florida,
      such that the Water Oak Property remaining in the Collateral Pool after
      the release of the Water Oak Water Treatment Facility shall be a separate
      parcel, on which Lender can exercise all rights and remedies afforded in
      this Agreement and the Security Instrument including conveying the Water
      Oak Property upon foreclosure;

                  (v)     Borrower shall have recorded any easements, in form
      and substance required by the Governmental Authority having jurisdiction
      over the Water Oak Property in connection with the continued operation of
      the Water Oak Property pertaining to the Water Oak Water Treatment
      Facility, and if reasonably requested by Lender, any other easements
      pertaining to the continued operation of the Water Oak Property;

                  (vi)    The Water Oak Water Treatment Facility shall be deeded
      to the Town of Lady Lake, at the time of the release of the Water Oak
      Water Treatment Facility;

                                       15

<PAGE>

                  (vii)   Borrower shall amend the existing Security Instrument
      for the Water Oak Property to remove the Water Oak Water Treatment
      Facility from the legal description, which legal description shall include
      any beneficial easements;

                  (viii)  Borrower shall cause the existing title policy for
      such Mortgaged Property to be amended to remove the Water Oak Water
      Treatment Facility from the legal description, which legal description
      shall include any beneficial easements as insured parcels; and

                  (ix)    Borrower shall pay all of Lender's reasonable costs
      and expenses, including legal fees and expenses, in connection with the
      dedication and release of the Water Oak Treatment Facility.

      SECTION 3.05. Right to Substitute Collateral.

      Subject to the terms, conditions and limitations of this Section 3.05,
Borrower shall have the right to add one or more Manufactured Housing
Communities to the Collateral Pool in substitution of one or more Mortgaged
Properties then in the Collateral Pool ("Substitute Mortgaged Property").

      SECTION 3.06. Procedure for Substituting Collateral.

            (a)   Request. Borrower may deliver to Lender a Substitution Request
to add one or more Manufactured Housing Communities in substitution of one or
more Mortgaged Properties then in the Collateral Pool. Each Substitution Request
shall be accompanied by

                  (i)   the information required by the DUS Guide Underwriting
Requirements including any Lender memoranda relating to Manufactured Housing
Communities issued by Fannie Mae from time to time and any additional
information Lender may reasonably request; and (ii) a statement whether the
addition of the Substitute Mortgaged Property will occur simultaneously with the
release of the Release Property and, if not, the proposed date on which the
Substitute Mortgaged Property will be added to the Collateral Pool which, in no
event, shall be a date which is more than 90 days after the proposed date of the
release of the Release Property.

            (b)   Underwriting. Lender shall make underwriting determinations as
to the Aggregate Debt Service Coverage Ratio and the Aggregate Loan to Value
Ratio immediately prior to and immediately after giving effect to the proposed
substitution, and the Valuation and the Net Operating Income for both the
Substitute Mortgaged Property and the Release Property. Notwithstanding anything
to the contrary contained herein, underwriting determinations with respect to
the proposed Substitute Mortgaged Property shall be made on the basis of a
Valuation and otherwise in accordance with the DUS Guide Underwriting
Requirements including any Lender memoranda relating to Manufactured Housing
Communities issued by Fannie Mae from time to time. Within 30 days after receipt
of (i) the Substitution Request and (ii) all reports, certificates and documents
required under the DUS Guide including any Lender memoranda relating to
Manufactured Housing Communities issued by Fannie Mae from time to time,
including a zoning analysis undertaken in accordance with Section 206 of Part
III of the DUS

                                       16

<PAGE>

Guide, Lender shall notify Borrower whether Lender shall consent to Substitution
Request. If Lender consents, it shall set forth the Aggregate Debt Service
Coverage Ratio and the Aggregate Loan to Value Ratio which it estimates shall
result from the substitution of the Substitute Mortgaged Property into the
Collateral Pool. Within 30 days after receipt of Lender's consent notice,
Borrower shall notify Lender whether it elects to cause such substitution to
occur. If Borrower fails to respond within the period of 30 days, it shall be
conclusively deemed to have elected not to cause the proposed substitution to
occur.

            (c)   Closing. If Lender consents to the Substitution Request,
Borrower timely elects to cause such substitution to occur and all conditions
precedent contained in Section 6.06 and all General Conditions contained in
Section 6.01 are satisfied, Lender shall permit the Substitute Mortgaged
Property to be substituted into the Collateral Pool in replacement of the
Release Property, at a closing to be held at offices designated by Lender on a
Closing Date selected by Lender and approved by Borrower, and occurring

                  (i)   if the addition of the Substitute Mortgaged Property and
      the release of the Release Property are to occur simultaneously, within 30
      days after Lender's receipt of Borrower's election (or on such other date
      as Borrower and Lender may agree); or

                  (ii)  if the addition of the Substitute Mortgaged Property is
      to occur subsequent to the release of the Release Property, within 90 days
      after the release of the Release Property.

If, in the case of clause (ii) of this paragraph, the addition of the Substitute
Mortgaged Property to the Collateral Pool does not occur within 90 days or such
longer period as approved by Lender, in its sole discretion, after the release
of the Release Property, then Borrower shall have waived its right to substitute
such Release Property with the Substitute Mortgaged Property, the Release Price
shall be determined pursuant to Section 3.04(c) and Borrower shall comply with
the requirement contained in Section 3.04(d). Such Release Price, or the
applicable portion thereof, shall be immediately due and payable by Borrower to
Lender to reduce the Advances Outstanding as required by, and in the manner
contained in, Section 3.04(d).

            (d)   Restriction on Borrowings. If the addition of the Substitute
Mortgaged Property and the release of the Release Property does not occur
simultaneously then, until the addition of the Substitute Mortgaged Property,
the aggregate unpaid principal balance of Advances Outstanding shall not exceed
the amount of the then-existing Commitment minus the Allocable Facility Amount
of the Release Property, unless Borrower has delivered additional Collateral
reasonably acceptable to Lender in an amount at least equal to such Allocable
Facility Amount. If the aggregate unpaid principal balance of Advances
Outstanding exceeds such amount (and satisfactory additional Collateral has not
been delivered by Borrower to Lender), Borrower shall pay such excess as a
condition precedent to the addition of a Substitute Mortgaged Property.
Notwithstanding the foregoing, in no event shall the value of the additional
Collateral exceed 15% of the principal balance of the Advances Outstanding. Any
payment received by Lender under this Section shall be applied against Advances
Outstanding in the manner prescribed for Release Prices pursuant to Section
3.04(d). The additional Collateral shall

                                       17

<PAGE>

be released to Borrower upon the addition of the applicable Substitute Mortgaged
Property to the Collateral Pool.

                                   ARTICLE 4

                          EXPANSION OF CREDIT FACILITY

      SECTION 4.01. Right to Increase Commitment.

      Subject to the terms, conditions and limitations of this Article, Borrower
shall have the right, during the Fixed Facility Availability Period, to increase
the Fixed Facility Commitment and, during the Variable Facility Availability
Period, to increase the Variable Facility Commitment. Borrower's right to
increase the Commitment is subject to the following limitations:

            (a)   Maximum Amount of Increase in Commitment. As of the Initial
Closing Date, the amount of the Commitment is $390,000,000. The maximum amount
by which the Commitment may be increased is $10,000,000.

            (b)   Minimum Request. Each Request for an increase in the
Commitment shall be in the minimum amount of $5,000,000.

            (c)   Terms and Conditions. The terms and conditions of this
Agreement shall apply to any increase in the Commitment closed prior to the
First Anniversary. Thereafter, the Variable Facility Fee, Fixed Facility Fee,
Rate Preservation Fee and Standby Fee applicable to any increase in the
Commitment shall be mutually agreed upon by Lender and Borrower; provided,
however, (i) that if Borrower incurs a Standby Fee, then the Variable Facility
Fee and Fixed Facility Fee shall, subject to the provisions of Section 10.01 of
this Agreement, remain unchanged for so long as the Commitment is outstanding
and the Standby Fee is paid, and (ii) that if Borrower elects to pay the Rate
Preservation Fee, then the Variable Facility Fee and the Fixed Facility Fee
shall, subject to the provisions of Section 10.06 of this Agreement, remain
unchanged for so long as the Rate Preservation Fee is paid.

      SECTION 4.02. Procedure for Obtaining Increases in Commitment.

            (a)   Request. To obtain an increase in the Commitment, Borrower
shall deliver an Expansion Request to Lender. Each Expansion Request shall
include the following:

                  (i)   The total amount of the proposed increase;

                  (ii)  A designation of the increase as being part of the Fixed
      Facility Commitment and/or the Variable Facility Commitment;

                  (iii) A request that Lender inform Borrower of any change in
      the Geographical Diversification Requirements; and

                                       18

<PAGE>

                  (iv)  If the increase in the Commitment is to close after the
      date one year after the date hereof, a request that Lender inform Borrower
      of the Fixed Facility Fee, the Variable Facility Fee, Rate Preservation
      Fee and the Standby Fee to apply to Advances drawn from such increase in
      the Commitment.

            (b)   Closing. If all conditions precedent contained in Section 6.07
and all General Conditions contained in Section 6.01 are satisfied, Lender shall
permit the Expansion Request to occur, at a closing to be held at offices
designated by Lender on a Closing Date selected by Lender and approved by
Borrower, and occurring not less than fifteen (15) Business Days after Lender's
receipt of the Expansion Request (or on such other date as Borrower and Lender
may agree).

                                   ARTICLE 5

                            TERMINATION OF FACILITIES

      SECTION 5.01. Right to Complete or Partial Termination of
Facilities.

      Subject to the terms and conditions of this Article, Borrower shall have
the right to permanently reduce the Variable Facility Commitment and/or the
Fixed Facility Commitment.

      SECTION 5.02. Procedure for Complete or Partial Termination of
Facilities.

            (a)   Request. To permanently reduce the Variable Facility
Commitment or the Fixed Facility Commitment, Borrower shall deliver a Facility
Termination Request to Lender. A permanent reduction of the Variable Facility
Commitment to $0 shall be referred to as a "Complete Variable Facility
Termination." A permanent reduction of the Fixed Facility Commitment to $0 shall
be referred to as a "Complete Fixed Facility Termination." The Facility
Termination Request shall include the following:

                  (i)   The proposed amount of the reduction in the Variable
      Facility Commitment and/or Fixed Facility Commitment; and

                  (ii)  Unless there is a Complete Variable Facility Termination
      or a Complete Fixed Facility Termination, a designation by Borrower of any
      Variable Advances which will be prepaid and/or any Fixed Advances which
      will be prepaid or defeased.

Any release of Collateral, whether or not made in connection with a Facility
Termination Request, must comply with all conditions to a release which are
contained in Article 6.

            (b)   Closing. If all conditions precedent contained in Section 6.09
and all General Conditions contained in Section 6.01 are satisfied, Lender shall
reduce the Variable Facility Commitment or Fixed Facility Commitment, as the
case may be, to the amount designated by Borrower, at a closing to be held at
offices designated by Lender on a Closing Date selected by Lender, within thirty
(30) Business Days after Lender's receipt of the Facility Termination Request
(or on such other date as Borrower and Lender may agree), by executing

                                       19

<PAGE>

and delivering the Facility Termination Document evidencing the reduction in the
Facility Commitment.

      SECTION 5.03. Right to Terminate Credit Facility.

      Subject to the terms and conditions of this Article, Borrower shall have
the right to terminate this Agreement and the Credit Facility and receive a
release of all of the Collateral.

      SECTION 5.04. Procedure for Terminating Credit Facility.

            (a)   Request. To terminate this Agreement and the Credit Facility,
Borrower shall deliver a Credit Facility Termination Request to Lender.

            (b)   Closing. If all conditions precedent contained in Section 6.10
are satisfied, this Agreement shall terminate, and Lender shall cause all of the
Collateral to be released, at a closing to be held at offices designated by
Lender on a Closing Date selected by Lender, within 20 Business Days after
Lender's receipt of the Credit Facility Termination Request (or on such other
date as Borrower and Lender may agree), by executing and delivering, and causing
all applicable parties to execute and deliver, all at the sole cost and expense
of Borrower, the Credit Facility Termination Documents.

                                   ARTICLE 6

                      CONDITIONS PRECEDENT TO ALL REQUESTS

      SECTION 6.01. Conditions Applicable to All Requests.

      The obligation of Lender to close the transaction requested in a Request
shall be subject to the following general conditions precedent ("General
Conditions") in addition to any other conditions precedent contained in this
Agreement:

            (a)   Compliance with Debt Service Coverage RatioSECTION 8.16
Compliance with Debt Service Coverage Ratio. Except in connection with a Credit
Facility Termination Request or a Rollover Variable Advance, the Aggregate Debt
Service Coverage Ratio shall be not less than 1.30:1.0.

            (b)   Compliance with Loan to Value RatioSECTION 8.17 Compliance
with Loan to Value Ratio. Except in connection with a Credit Facility
Termination Request or a Rollover Variable Advance, the Aggregate Loan to Value
Ratio shall not be greater than 75%.

            (c)   Geographical Diversification; Compliance with Concentration
TestSECTION 8.18 Geographical Diversification. Except in connection with a
Credit Facility Termination Request or a Rollover Variable Advance, the
Mortgaged Properties in the Collateral Pool shall comply with the Geographical
Diversification Requirements.

            (d)   Payment of Expenses. The payment by Borrower of Lender's and
Fannie Mae's reasonable fees and expenses payable in accordance with this
Agreement, including, but not limited to, the legal fees and expenses contained
in Section 10.04.

                                       20

<PAGE>

            (e)   No Material Adverse Change. Except in connection with a Credit
Facility Termination Request or a Rollover Variable Advance, there has been no
material adverse change in the financial condition, business or prospects of
Borrower or Sun or in the physical condition, operating performance or value of
any of the Mortgaged Properties since the date of the most recent Compliance
Certificate (or, with respect to the conditions precedent to the Initial
Advance, from the condition, business or prospects reflected in the financial
statements, reports and other information obtained by Lender during its review
of Borrower and Sun and the Initial Mortgaged Properties).

            (f)   No Default. Except in connection with a Credit Facility
Termination Request, there shall exist no Event of Default or Potential Event of
Default on the Closing Date for the Request and, after giving effect to the
transaction requested in the Request, no Event of Default or Potential Event of
Default shall have occurred other than an Event of Default or Potential Event of
Default that would be cured as a result of the consummation of such Request.

            (g)   No Insolvency. Neither the Borrower nor Sun is insolvent
(within the meaning of any applicable federal or state laws relating to
bankruptcy or fraudulent transfers) or will be rendered insolvent by the
transactions contemplated by the Loan Documents, including the making of a
Future Advance, or, after giving effect to such transactions, will be left with
an unreasonably small capital with which to engage in its business or
undertakings, or will have intended to incur, or believe that it has incurred,
debts beyond its ability to pay such debts as they mature or will have intended
to hinder, delay or defraud any existing or future creditor.

            (h)   No Untrue Statements. The Loan Documents shall not contain any
untrue or misleading statement of a material fact and shall not fail to state a
material fact necessary to make the information contained therein not misleading
if such statement or failure has a Material Adverse Effect.

            (i)   Representations and Warranties. Except in connection with a
Credit Facility Termination Request or a Rollover Variable Advance, all
representations and warranties made by Borrower and Sun in the Loan Documents
shall be true and correct in all material respects on the Closing Date for the
Request with the same force and effect as if such representations and warranties
had been made on and as of the Closing Date for the Request, other than those
representations and warranties which, if not materially true and correct, do not
have a Material Adverse Effect.

            (j)   No Condemnation or Casualty. Except in connection with a
Credit Facility Termination Request or a Rollover Variable Advance, there shall
not be pending or threatened any condemnation or other taking, whether direct or
indirect, against any Mortgaged Property (other than a Mortgaged Property
subject to a Release Request) and there shall not have occurred any casualty to
any improvements located on any Mortgaged Property (other than a Mortgaged
Property subject to a Release Request), which condemnation or casualty would
have a Material Adverse Effect.

                                       21

<PAGE>

            (k)   Delivery of Closing Documents. Except in connection with a
Rollover Variable Advance, the receipt by Lender of the following, each dated as
of the Closing Date for the Request, in form and substance satisfactory to
Lender in all respects:

                  (i)   The Loan Documents required for consummation of such
      Request, if any;

                  (ii)  A Compliance Certificate;

                  (iii) An Organizational Certificate; and

                  (iv)  Such other documents, instruments, approvals (and, if
      requested by Lender, certified duplicates of executed copies thereof) and
      opinions as Lender may reasonably request.

            (l)   Covenants. Except in connection with a Credit Facility
Termination Request or a Rollover Variable Advance, Borrower is in full
compliance with each of the covenants contained in Articles 8 and 9 of this
Agreement, without giving effect to any notice and cure rights of Borrower, to
the extent that any such non-compliance will not have a Material Adverse Effect
on the Borrower.

      SECTION 6.02. Conditions Precedent to Initial Advance.

      The obligation of Lender to make the Initial Advance is subject to the
following conditions precedent:

            (a)   Receipt by Lender of the fully executed Advance Request;

            (b)   Delivery to the Title Company, for filing and/or recording in
all applicable jurisdictions, of all applicable Loan Documents required by
Lender, including a duly executed and delivered original of the Variable
Facility Note, Fixed Facility Notes, the Guaranty, the Initial Security
Instruments covering the Initial Mortgaged Properties and UCC-1 Financing
Statements covering the portion of the Collateral comprised of personal
property, and other appropriate instruments, in form and substance satisfactory
to Lender and in form proper for recordation, as may be necessary in the opinion
of Lender to perfect the Liens created by the applicable Security Instruments
and any other Loan Documents creating a Lien in favor of Lender, and the payment
of all taxes, fees and other charges payable in connection with such execution,
delivery, recording and filing;

            (c)   If applicable, the receipt by Lender of the first installment
of the Variable Facility Fee and the entire Discount payable by Borrower
pursuant to Section 1.04;

            (d)   If applicable, the receipt by Lender of the first installment
of the Fixed Facility Fee and any interest payable by the Borrower pursuant to
Section 1.04; and

            (e)   Receipt by Lender of the Initial Origination Fee to the extent
provided pursuant to Section 10.02(a) and the Initial Due Diligence Fee pursuant
to Section 10.03(a).

                                       22

<PAGE>

      SECTION 6.03. Conditions Precedent to Future Advances.

      The obligation of Lender to make a requested Future Advance is subject to
the following conditions precedent:

            (a)   Except in connection with a Rollover Variable Advance, receipt
by Lender of the fully executed Advance Request;

            (b)   Except in connection with a Rollover Variable Advance,
delivery by Lender to Borrower of the Rate Form for the Future Advance;

            (c)   Except in connection with a Rollover Variable Advance, after
giving effect to the requested Future Advance, the Coverage and LTV Tests will
be satisfied;

            (d)   If the Advance is a Fixed Advance, delivery of a Fixed
Facility Note, duly executed by Borrower, in the amount and reflecting all of
the terms of the Fixed Advance;

            (e)   If the Advance is a Variable Advance, delivery of the Advance
Confirmation Instrument, duly executed by Borrower;

            (f)   If the Advance is made in connection with the addition of a
Mortgaged Property to the Collateral Pool, for any Title Insurance Policy not
containing a Revolving Credit Endorsement, the receipt by Lender of an
endorsement to the Title Insurance Policy, amending the effective date of the
Title Insurance Policy to the Closing Date increasing the limits of liability by
the amount of the Future Advance and showing no additional exceptions to
coverage other than the exceptions shown on the Initial Closing Date and other
exceptions approved by Lender;

            (g)   If the Advance is a Variable Advance, the receipt by Lender of
the first installment of Variable Facility Fee for the Variable Advance and the
entire Discount for the Variable Advance payable by Borrower pursuant to Section
1.04;

            (h)   Except in connection with a Rollover Variable Advance, no
material adverse change in the financial condition of Borrower or Sun has
occurred between the respective dates of the financial statements which were
most recently furnished to Lender relating to such entities;

            (i)   Except in connection with a Rollover Variable Advance, no
Governmental Approval not already obtained or made is required for the execution
and delivery of the documents to be delivered in connection with the Future
Advance;

            (j)   Except in connection with a Rollover Variable Advance,
Borrower is not under any cease or desist order or other orders of a similar
nature, temporary or permanent of any Governmental Authority which would have
the effect of preventing or hindering performance of the terms and provisions of
the Agreement or any other Loan Documents, nor are there any proceedings
presently in progress or, to its knowledge, contemplated which, if successful,
would lead to the issuance of any such order; and

                                       23

<PAGE>

            (k)   Receipt by Lender of the Expansion Origination Fee, if
applicable.

      SECTION 6.04. Conditions Precedent to Addition of an Additional Mortgaged
Property to the Collateral Pool.

      The addition of an Additional Mortgaged Property to the Collateral Pool on
the applicable Closing Date is subject to the satisfaction of the following
conditions precedent:

            (a)   If the addition of an Additional Mortgaged Property is
completed prior to the First Anniversary, satisfaction of the Coverage and LTV
Tests after giving effect to the addition of the Additional Mortgaged Property;

            (b)   If the addition of an Additional Mortgaged Property to the
Collateral Pool closes on or after the First Anniversary, (i) the Additional
Mortgaged Property has a Debt Service Coverage Ratio of at least l30% and a
Loan-to-Value Ratio of not more than 75%, in each case based on the underwriting
performed pursuant to Section 3.02(b), and (ii) satisfaction of the Coverage and
LTV Tests after giving effect to the addition of the Additional Mortgaged
Property;

            (c)   Receipt by the Lender of all legal fees and expenses payable
by the Borrower in connection with the Collateral Additional Request pursuant to
Section 10.03(b);

            (d)   Delivery to the Title Company, with fully executed
instructions directing the Title Company to file and/or record in all applicable
jurisdictions, all applicable Addition Loan Documents required by Lender,
including duly executed and delivered original copies of any Security
Instruments and UCC-1 Financing Statements covering the portion of the
Additional Mortgaged Property comprised of personal property, and other
appropriate documents, in form and substance reasonably satisfactory to Lender
and in form proper for recordation, as may be necessary in the opinion of Lender
to perfect the Lien created by the applicable additional Security Instrument,
and any other addition Loan Document creating a Lien in favor of Lender, and the
payment of all taxes, fees and other charges payable in connection with such
execution, delivery, recording and filing;

            (e)   If required by Lender, amendments to the Notes and the
Security Instruments, reflecting the addition of any Additional Borrower and/or
the Additional Mortgaged Property to the Collateral Pool and, as to any Security
Instrument so amended, the receipt by Lender of an endorsement to the Title
Insurance Policy insuring the Security Instrument, amending the effective date
of the Title Insurance Policy to the Closing Date and showing no additional
exceptions to coverage other than the exceptions shown on the Initial Closing
Date and other exceptions approved by Lender; and

            (f)   If the Title Insurance Policy for the Additional Mortgaged
Property contains a tie-in Endorsement, an endorsement to each other Title
Insurance Policy containing a tie-in Endorsement, adding a reference to the
Additional Mortgaged Property.

      SECTION 6.05. Conditions Precedent to Release of Property from the
Collateral Pool.

                                       24

<PAGE>

      The obligation of Lender to release a Property from the Collateral Pool by
executing and delivering the Release Documents on the Closing Date is subject to
the satisfaction of the following conditions precedent on or before the Closing
Date:

            (a)   Immediately after giving effect to the requested release, the
Coverage and LTV Tests will be satisfied or if the provisions of Section
3.04(c)(B) are applicable, immediately after such release the Aggregate Debt
Service Coverage Ratio is 1.35:1.0 or greater and the Aggregate Loan to Value
Ratio is 65% or less or if the provisions of Section 3.04(c)(C) are applicable,
immediately after such release the Aggregate Debt Service Coverage Ratio is
1.55:1.0 or greater and the Aggregate Loan to Value Ratio is 60% or less;

            (b)   Receipt by Lender of the Release Price, if due ;

            (c)   Receipt by Lender on the Closing Date of one or more
counterparts of each Release Document, dated as of the Closing Date, signed by
each of the parties (other than Lender) who is a party to such Release Document;

            (d)   If required by Lender, amendments to the Notes and the
Security Instruments, reflecting the release of the Release Property from the
Collateral Pool;

            (e)   If Lender determines the Release Property to be one phase of a
project, and one or more other phases of the project are Mortgaged Properties
which will remain in the Collateral Pool ("Remaining Mortgaged Properties"),
Lender must determine that the Remaining Mortgaged Properties can be operated
separately from the Release Property and any other phases of the project which
are not Mortgaged Properties and whether any cross use agreements or easements
are necessary. In making this determination, Lender shall evaluate whether the
Remaining Mortgaged Properties comply with the terms of Sections 203 and 208 of
Part III of the DUS Guide;

            (f)   Receipt by Lender of endorsements to the tie-in endorsements
of the Title Insurance Policies, if deemed necessary by Lender, to reflect the
release;

            (g)   Receipt by Lender on the Closing Date of a Confirmation of
Obligations, dated as of the Closing Date, signed by Borrower and Sun, pursuant
to which Borrower and Sun confirm their obligations under the Loan Documents;

            (h)   The remaining Mortgaged Properties in the Collateral Pool
shall satisfy the Geographical Diversification Requirements; and

            (i)   Notwithstanding the other provisions of this Section 6.05, no
release of any of the Mortgaged Properties shall be made unless the Borrower has
provided title insurance, taking into account tie-in endorsements, to Lender in
respect of each of the remaining Mortgaged Properties in the Collateral Pool in
an amount equal to the lesser of (i) 115% of the Initial Value of the highest
valued Mortgaged Property remaining in the Collateral Pool and (ii) the
aggregate amount of Advances Outstanding.

                                       25

<PAGE>

      SECTION 6.06. Conditions Precedent to Substitution of a Substitute
Mortgaged Property into the Collateral Pool.

      The substitution of a Substitute Mortgaged Property into the Collateral
Pool is subject to the satisfaction of the following conditions precedent:

            (a)   (i) The Substituted Mortgaged Property has a Debt Service
Coverage Ratio of at least l.30:1.0 and a Loan-to-Value Ratio of not more than
75%, in each case based on the underwriting performed pursuant to Section
3.02(b), and (ii) the Collateral Pool satisfies the Coverage and LTV Tests after
giving effect to the addition of the Substituted Mortgaged Property;

            (b)   The Aggregate Loan to Value Ratio of the Collateral Pool,
taking into account the Substituted Mortgaged Property, is equal to or less than
the Aggregate Loan to Value Ratio of the Collateral Pool immediately prior to
the substitution of the Substituted Mortgaged Property;

            (c)   The Aggregate Debt Service Coverage Ratio of the Collateral
Pool, taking into account the Substituted Mortgaged Property, is equal to or
greater than the Aggregate Debt Service Coverage Ratio of the Collateral Pool
immediately prior to the substitution of the Substituted Mortgaged Property;

            (d)   Receipt by the Lender of all legal fees and expenses payable
by the Borrower in connection with the Substitution Request pursuant to Section
10.03(b);

            (e)   Receipt by Lender of the Substitution Fee;

            (f)   Delivery to the Title Company, with fully executed
instructions directing the Title Company to file and/or record in all applicable
jurisdictions, all applicable Substitution Loan Documents required by Lender,
including duly executed and delivered original copies of any Security
Instruments and UCC-1 Financing Statements covering the portion of the
Substitute Mortgaged Property comprised of personal property, and other
appropriate documents, in form and substance satisfactory to Lender and in form
proper for recordation, as may be necessary in the opinion of Lender to perfect
the Lien created by the applicable additional Security Instrument, and any other
Substitution Loan Document creating a Lien in favor of Lender, and the payment
of all taxes, fees and other charges payable in connection with such execution,
delivery, recording and filing;

            (g)   If required by Lender, amendments to the Notes and the
Security Instruments, reflecting the addition of the Substitute Mortgaged
Property to the Collateral Pool;

            (h)   If the Title Insurance Policy for the Substitute Mortgaged
Property contains a tie-in endorsement, and endorsement to each other Title
Insurance Policy containing a tie-in endorsement, adding a reference to the
Substitute Mortgaged Property; and

            (i)   Delivery to Lender of additional Collateral or the repayment
of Advances Outstanding to the extent required pursuant to Section 3.04(d).

                                       26

<PAGE>

      SECTION 6.07. Conditions Precedent to Increase in Commitment.

      The right of Borrower to increase the Commitment is subject to the
satisfaction of the following conditions precedent on or before the Closing
Date:

            (a)   The Coverage and LTV Tests will be satisfied;

            (b)   Receipt by Lender of fully executed original copies of all
Expansion Loan Documents, each of which shall be in full force and effect, and
in form and substance satisfactory to Lender in all respects; and

            (c)   If determined necessary by Lender, Borrower's agreement to
such Geographical Diversification Requirements as Lender may determine.

      SECTION 6.08. Conditions Precedent to Conversion.

      The conversion of all or a portion of the Variable Facility Commitment to
the Fixed Facility Commitment is subject to the satisfaction of the following
conditions precedent on or before the Closing Date:

            (a)   After giving effect to the requested conversion, the Coverage
and LTV Tests will be satisfied;

            (b)   Prepayment by Borrower in full of any Variable Advances
Outstanding which Borrower has designated for payment, together with other
amounts due with respect to the prepayment of such Variable Advances; and

            (c)   Receipt by Lender of one or more counterparts of each
Conversion Document, dated as of the Closing Date, signed by each of the parties
(other than Lender) to such Conversion Document.

      SECTION 6.09. Conditions Precedent to Complete or Partial Termination of
Facilities.

      The right of Borrower to terminate the Variable Facility Commitment and/or
the Fixed Facility Commitment and the obligation of Lender to execute the
Facility Termination Document, are subject to the satisfaction of the following
conditions precedent on or before the Closing Date:

            (a)   Payment by Borrower in full of all of the Variable Advances
Outstanding and Fixed Advances Outstanding, as the case may be, required to
reduce the aggregate unpaid principal balance of all Variable Advances
Outstanding and Fixed Advances Outstanding, as the case may be, to not greater
than the reduced Variable Facility Commitment and Fixed Facility Commitment, as
the case may be, including any associated prepayment premiums or other amounts
due under the Notes (but if Borrower is not required to prepay all of the
Variable Advances or Fixed Advances Outstanding, as the case may be, Borrower
shall have the right to select which of the Variable Advances or Fixed Advances,
as the case may be, shall be repaid);

                                       27

<PAGE>

            (b)   Receipt by Lender of the Facility Termination Fee, provided
that no Facility Termination Fee shall be due during the six months prior to the
Variable Facility Termination Date; and

            (c)   Receipt by Lender on the Closing Date of one or more
counterparts of the Facility Termination Document, dated as of the Closing Date,
signed by each of the parties (other than Lender) who is a party to such
Facility Termination Document.

      SECTION 6.10. Conditions Precedent to Termination of Credit Facility.

      The right of Borrower to terminate this Agreement and the Credit Facility
and to receive a release of all of the Collateral from the Collateral Pool and
Lender's obligation to execute and deliver the Credit Facility Termination
Documents on the Closing Date are subject to the following conditions precedent:

            (a)   Payment by Borrower in full of all of the Notes Outstanding on
the Closing Date, including any associated prepayment premiums or other amounts
due under the Notes and all other amounts owing by Borrower to Lender under this
Agreement;

            (b)   Defeasance by Borrower, if necessary, in accordance with the
provisions of this Agreement, with respect to all Fixed Facility Notes
Outstanding on the Closing Date; and

            (c)   Receipt by Lender of the Facility Termination Fee, provided
that no Facility Termination Fee shall be due during the six months prior to the
Variable Facility Termination Date or Original Variable Facility Termination
Date, as applicable.

      SECTION 6.11. Delivery of Closing Documents Relating to Advance Request,
Addition Request or Expansion Request.

      With respect to the closing of an Advance Request (other than a Rollover
Variable Advance), an Addition Request or an Expansion Request, it shall be a
condition precedent that Lender receives each of the following, each dated as of
the Closing Date for the Request, in form and substance satisfactory to Lender
in all respects:

            (a)   Loan Documents. Fully executed original copies of each Loan
Document required to be executed in connection with the Request, duly executed
and delivered by the parties thereto (other than Lender), each of which shall be
in full force and effect.

            (b)   Opinion. Favorable opinions of counsel to Borrower and Sun, as
to the due organization and qualification of Borrower and Sun, the due
authorization, execution, delivery and enforceability of each Loan Document
executed in connection with the Request and such other matters as Lender may
reasonably require.

      SECTION 6.12. Delivery of Property-Related Documents.

      With respect to each of the Initial Mortgaged Properties or an Additional
Mortgaged Property, it shall be a condition precedent that Lender receive each
of the following, each dated

                                       28

<PAGE>

as of the Closing Date for the Initial Advance or an Additional Mortgaged
Property, as the case may be, in form and substance satisfactory to Lender in
all respects:

            (a)   A favorable opinion of local counsel to Borrower or Lender as
to the enforceability of the Security Instrument, and any other Loan Documents,
executed in connection with the Request.

            (b)   A commitment for the Title Insurance Policy applicable to the
Mortgaged Property and a pro forma Title Insurance Policy based on the
Commitment.

            (c)   The Insurance Policy (or a certified copy of the Insurance
Policy) applicable to the Mortgaged Property.

            (d)   The Survey applicable to the Mortgaged Property.

            (e)   Evidence satisfactory to Lender of compliance of the Mortgaged
Property with property laws as required by Sections 205 and 206 of Part III of
the DUS Guide.

            (f)   An Appraisal of the Mortgaged Property.

            (g)   A Replacement Reserve Agreement, providing for the
establishment of a replacement reserve account, to be pledged to Lender, in
which the owner shall (unless waived by Lender) periodically deposit amounts for
replacements for improvements at the Mortgaged Property and as additional
security for Borrower's obligations under the Loan Documents.

            (h)   A Completion/Repair and Security Agreement, together with
required escrows, on the standard form required by the DUS Guide.

            (i)   An Assignment of Management Agreement, on the standard form
required by the DUS Guide.

            (j)   An Assignment of Leases and Rents, if Lender determines one to
be necessary or desirable, provided that the provisions of any such assignment
shall be substantively identical to those in the Security Instrument covering
the Collateral, with such modifications as may be necessitated by applicable
state or local law.

                                   ARTICLE 7

                         REPRESENTATIONS AND WARRANTIES

      SECTION 7.01. Representations and Warranties of Borrower.

      The representations and warranties of Borrower are contained in the
Certificate of Borrower, the form of which is attached to this Agreement as
Exhibit D.

      SECTION 7.02. Representations and Warranties of Lender.

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      Lender hereby represents and warrants to Borrower as follows:

            (a)   Due Organization. Lender is a limited partnership duly
organized, validly existing and in good standing under the laws of California.

            (b)   Power and Authority. Lender has the requisite power and
authority to execute and deliver this Agreement and to perform its obligations
under this Agreement.

            (c)   Due Authorization. The execution and delivery by Lender of
this Agreement, and the consummation by it of the transactions contemplated
thereby, and the performance by it of its obligations thereunder, have been duly
and validly authorized by all necessary action and proceedings by it or on its
behalf.

                                   ARTICLE 8

                        AFFIRMATIVE COVENANTS OF BORROWER

      Borrower agrees and covenants with Lender that, at all times during the
Term of this Agreement:

      SECTION 8.01. Compliance with Agreements.

      Borrower shall comply with all the terms and conditions of each Loan
Document to which it is a party or by which it is bound; provided, however, that
Borrower's failure to comply with such terms and conditions shall not be an
Event of Default until the expiration of the applicable notice and cure periods,
if any, specified in the applicable Loan Document.

      SECTION 8.02. Maintenance of Existence.

      Borrower shall maintain its existence and continue to be duly organized
under the laws of the state of its organization. Borrower shall continue to be
duly qualified to do business in each jurisdiction in which such qualification
is necessary to the conduct of its business and where the failure to be so
qualified would adversely affect the validity of, the enforceability of, or the
ability to perform, its obligations under this Agreement or any other Loan
Document.

      SECTION 8.03. Financial Statements; Accountants' Reports; Other
Information.

      Borrower shall keep and maintain at all times complete and accurate books
of accounts and records in sufficient detail to correctly reflect (x) all of
Borrower's financial transactions and assets and (y) the results of the
operation of each Mortgaged Property and copies of all written contracts, Leases
and other instruments which affect each Mortgaged Property (including all bills,
invoices and contracts for electrical service, gas service, water and sewer
service, waste management service, telephone service and management services).
In addition, Borrower shall furnish, or cause to be furnished, to Lender:

            (a)   Annual Financial Statements. As soon as available, and in any
event within 100 days after the close of its fiscal year during the Term of this
Agreement, the audited

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<PAGE>

balance sheet of Sun as of the end of such fiscal year, the audited statement of
income, equity and retained earnings of Sun for such fiscal year and the audited
statement of cash flows of Sun for such fiscal year, all in a form substantially
similar to the financial statements of Sun delivered to Lender prior to the
Initial Closing Date, prepared in accordance with GAAP, consistently applied,
and accompanied by a certificate of Sun's independent certified public
accountants to the effect that such financial statements have been prepared in
accordance with GAAP, consistently applied, and that such financial statements
fairly present the results of its operations and financial condition for the
periods and dates indicated, with such certification to be free of material
exceptions and qualifications as to the scope of the audit or as to the going
concern nature of the business. As soon as available, and in any event within
100 days after the close of its fiscal year during the Term of this Agreement,
the unaudited (which may be internally prepared by Sun) balance sheet of the
Borrower as of the end of such fiscal year, the unaudited (which may be
internally prepared by Sun) statement of income, equity and retained earnings of
Borrower for such fiscal year and the unaudited (which may be internally
prepared by Sun) statement of cash flows for Borrower for such fiscal year,
accompanied by a certificate of the Chief Financial Officer of Sun stating that
such financial statements have been prepared in accordance with GAAP,
consistently applied, and fairly present, in all material respects, the results
of its operations and financial condition for the periods and dates indicated
subject to year end adjustments in accordance with GAAP.

            (b)   Quarterly Financial Statements. As soon as available, and in
any event within 55 days after each of the first three fiscal quarters of each
fiscal year during the Term of this Agreement, the unaudited (which may be
internally prepared by Sun) balance sheet of Borrower and Sun as of the end of
such fiscal quarter, the unaudited (which may be internally prepared by Sun)
statement of income and retained earnings of Borrower and Sun and the unaudited
(which may be internally prepared by Sun) statement of cash flows of Borrower
and Sun for the portion of the fiscal year ended with the last day of such
quarter, all in reasonable detail and stating in comparative form the respective
figures for the corresponding date and period in the previous fiscal year,
accompanied by a certificate of the Chief Financial Officer of Sun stating that
such financial statements have been prepared in accordance with GAAP,
consistently applied (subject to customary year-end adjustments), and fairly
present, in all material respects, the results of its operations and financial
condition for the periods and dates indicated subject to year end adjustments in
accordance with GAAP.

            (c)   Quarterly Property Statements. As soon as available, and in
any event within 55 days after each Calendar Quarter, a statement of income and
expenses of each Mortgaged Property accompanied by a certificate of the Chief
Financial Officer of Sun to the effect that each such statement of income and
expenses fairly, accurately and completely presents, in all material respects,
the operations of each such Mortgaged Property for the period indicated.

            (d)   Annual Property Statements. On an annual basis within 55 days
after the close of its fiscal year, an annual statement of income and expenses
of each Mortgaged Property accompanied by a certificate of the Chief Financial
Officer of Sun to the effect that each such statement of income and expenses
fairly, accurately and completely presents, in all material respects, the
operations of each such Mortgaged Property for the period indicated.

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<PAGE>

            (e)   Updated Rent Rolls. Upon Lender's request (but not more
frequently than quarterly), a current Rent Roll for each Mortgaged Property,
showing the name of each tenant, and for each tenant, the space occupied, the
lease expiration date, the rent payable, the rent paid and any other information
requested by Lender and accompanied by a certificate of the Chief Financial
Officer of Sun to the effect that each such Rent Roll fairly, accurately and
completely presents, in all material respects, the information required therein.

            (f)   Security Deposit Information. Upon Lender's request, an
accounting of all security deposits held in connection with any Lease of any
part of any Mortgaged Property, and if segregation of security deposits is
required by Applicable Law or if the Borrower otherwise segregates security
deposits, including the name and identification number of the accounts in which
such security deposits are held, the name and address of the financial
institutions in which such security deposits are held and the name and telephone
number of the person to contact at such financial institution, along with any
authority or release necessary for Lender to access information regarding such
accounts.

            (g)   Accountants' Reports; Other Reports. Promptly upon receipt
thereof: (i) copies of any reports or management letters submitted to Sun by its
independent certified public accountants in connection with the examination of
its financial statements made by such accountants (except for reports otherwise
provided pursuant to subsection (a) above); provided, however, that Borrower
shall only be required to deliver such reports and management letters to the
extent that they relate to Borrower or any Mortgaged Property; and (ii) all
schedules, financial statements or other similar reports delivered by Borrower
pursuant to the Loan Documents or requested by Lender with respect to Borrower's
business affairs or condition (financial or otherwise) or any of the Mortgaged
Properties.

            (h)   Annual Budgets. Prior to the start of its fiscal year, an
annual budget for each Mortgaged Property for such fiscal year, setting forth an
estimate of all of the costs and expenses, including capital expenses, of
maintaining and operating each Mortgaged Property.

      SECTION 8.04. Access to Records; Discussions With Officers and
Accountants.

      To the extent permitted by law and in addition to the applicable
requirements of the Security Instruments, Borrower shall permit Lender to:

            (a)   inspect, make copies and abstracts of such of Borrower's books
and records as may relate to the Obligations or any Mortgaged Property;

            (b)   after providing reasonable advance notice to Sun, discuss
Borrower's affairs, finances and accounts with Sun's Senior Management and
senior accounting staff and discuss matters relating to the conditions,
operations or maintenance of the Mortgaged Properties with such personnel and
the Regional manager responsible for such Mortgaged Properties; and

            (c)   receive any other information that Lender deems reasonably
necessary or relevant in connection with any Advance, any Loan Document or the
Obligations.

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<PAGE>

Notwithstanding the foregoing, prior to an Event of Default or Potential Event
of Default and in the absence of an emergency, all inspections shall be
conducted at reasonable times during normal business hours upon reasonable
notice to the Borrower.

      SECTION 8.05. Certificate of Compliance.

      Borrower shall deliver to Lender concurrently with the delivery of the
financial statements and/or reports required by Section 8.03 (a) and (b) a
certificate signed by, and in his capacity as, the Chief Financial Officer of
Sun (i) setting forth in reasonable detail the calculations required to
establish whether Sun was in compliance with the requirements of Sections 8.17,
8.18 and 8.19 of this Agreement on the date of such financial statements, and
(ii) stating that, to the best knowledge of such individual following reasonable
inquiry, no Event of Default or Potential Event of Default has occurred, or if
an Event of Default or Potential Event of Default has occurred, specifying the
nature thereof in reasonable detail and the action Borrower is taking or
proposes to take. Any certificate required by this Section shall run directly to
and be for the benefit of Lender and Fannie Mae.

      SECTION 8.06. Maintain Licenses.

      Borrower shall procure and maintain in full force and effect all licenses,
Permits, charters and registrations which are material to the conduct of its
business and shall abide by and satisfy all terms and conditions of all such
licenses, Permits, charters and registrations.

      SECTION 8.07. Inform Lender of Material Events.

      Borrower shall promptly inform Lender in writing of any of the following
(and shall deliver to Lender copies of any related written communications,
complaints, orders, judgments and other documents relating to the following) of
which Borrower has actual knowledge:

            (a)   Defaults. The occurrence of any Event of Default or any
Potential Event of Default under this Agreement or any other Loan Document;

            (b)   Regulatory Proceedings. The commencement of any rulemaking or
disciplinary proceeding or the promulgation of any proposed or final rule which
would have, or may reasonably be expected to have, a Material Adverse Effect on
Sun or the Borrower; the receipt of notice from any Governmental Authority
having jurisdiction over Borrower, Sun or the OP that (A) any license, Permit,
charter, membership or registration material to the conduct of Borrower's ,
Sun's or the OP's business or the Mortgaged Properties has been suspended or
revoked or (B) Borrower, Sun or the OP has been required to cease and desist any
practice, procedure or policy employed by Borrower, Sun or the OP in the conduct
of its business, and such cessation would have, or may reasonably be expected to
have, a Material Adverse Effect;

            (c)   Bankruptcy Proceedings. The commencement of any proceedings by
or against Borrower, Sun or the OP under any applicable bankruptcy,
reorganization, liquidation, insolvency or other similar law now or hereafter in
effect or of any proceeding in which a receiver, liquidator, trustee or other
similar official is sought to be appointed for it;

                                       33

<PAGE>

            (d)   Environmental Claim. The receipt from any Governmental
Authority or other Person of any notice of violation, claim, demand, abatement,
order or other order or direction (conditional or otherwise) for any damage,
including personal injury (including sickness, disease or death), tangible or
intangible property damage, contribution, indemnity, indirect or consequential
damages, damage to the environment, pollution, contamination or other adverse
effects on the environment, removal, cleanup or remedial action or for fines,
penalties or restrictions, resulting from or based upon (i) the existence or
occurrence, or the alleged existence or occurrence, of a Hazardous Substance
Activity or (ii) the violation, or alleged violation, of any Hazardous Materials
Laws in connection with any Mortgaged Property or any of the other assets of
Borrower;

            (e)   Material Adverse Effects. The occurrence of any act, omission,
change or event (including the commencement or threat of any proceedings by or
against Borrower or Sun in any Federal, state or local court, or before any
Governmental Authority, or before any arbitrator), which has, or would have, a
Material Adverse Effect, subsequent to the date of the most recent audited
financial statements of Sun delivered to Lender pursuant to Section 8.03;

            (f)   Accounting Changes. Any material change in Borrower's or Sun's
accounting policies or financial reporting practices; and

            (g)   Legal and Regulatory Status. The occurrence of any act,
omission, change or event, including any Governmental Approval, the result of
which is to change or alter in any way the legal or regulatory status of
Borrower.

      SECTION 8.08. Compliance with Applicable Laws.

      Borrower shall comply in all material respects with all Applicable Laws
now or hereafter affecting any Mortgaged Property or any part of any Mortgaged
Property or requiring any alterations, repairs or improvements to any Mortgaged
Property. Borrower shall procure and continuously maintain in full force and
effect, and shall abide by and satisfy all material terms and conditions of all
Permits.

      SECTION 8.09. Alterations to the Mortgaged Properties.

      Except as otherwise provided in the Loan Documents, Borrower shall have
the right to undertake any alteration, improvement, demolition, removal or
construction (collectively, "Alterations") to the Mortgaged Property which it
owns without the prior consent of Lender; provided, however, that in any case,
no such Alteration shall be made to any Mortgaged Property without the prior
written consent of Lender if (i) such Alteration could reasonably be expected to
adversely affect the value of such Mortgaged Property or its operation as a
manufactured housing community in substantially the same manner in which it is
being operated on the date such Mortgaged Property became Collateral, (ii) the
construction of such Alteration could reasonably be expected to result in
material interference to the occupancy of tenants of such Mortgaged Property
such that tenants in occupancy with respect to five percent (5%) or more of the
Leases would be permitted to terminate their Leases or to abate the payment of
all or any portion of their rent due to such Alterations, or (iii) such
Alteration will be completed in more than 12 months

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<PAGE>

from the date of commencement. Notwithstanding the foregoing, Borrower must
obtain Lender's prior written consent to construct a single or related series of
Alterations with respect to any Mortgaged Property (i) costing in the aggregate
in excess of $500,000 or (ii) having a material adverse effect on the use or
operation of such Mortgaged Property and the Borrower must give prior notice to
the Lender of its intent to commence the Alterations with respect to such
Mortgaged Property costing in excess of $250,000; provided, however, that the
preceding requirements shall not be applicable to Alterations made, conducted or
undertaken by Borrower as part of Borrower's routine maintenance, repair,
replacement, renovation or restoration of the Mortgaged Properties as required
by the Loan Documents or, if such Alterations are emergency in nature, in which
case the Borrower shall give notice to Lender as promptly as reasonably
practical.

      SECTION 8.10. Loan Document Taxes.

      If any tax, assessment or Imposition (other than a franchise tax, excise
tax or income tax imposed on or measured by, the net income or capital
(including branch profits tax) of Lender (or any transferee or assignee thereof,
including a participation holder)) ("Loan Document Taxes") is levied, assessed
or charged by the United States, or any State in the United States, or any
political subdivision or taxing authority thereof or therein upon any of the
Loan Documents or the obligations secured thereby, the interest of Lender in the
Mortgaged Properties, or Lender by reason of or as holder of the Loan Documents
arising in connection with the Credit Facility, Borrower shall pay all such Loan
Document Taxes to, for, or on account of Lender (or provide funds to Lender for
such payment, as the case may be) as they become due and payable and shall
promptly furnish proof of such payment to Lender, as applicable. In the event of
passage of any law or regulation permitting, authorizing or requiring such Loan
Document Taxes to be levied, assessed or charged, which law or regulation in the
opinion of counsel to Lender may prohibit Borrower from paying the Loan Document
Taxes to or for Lender, Borrower shall enter into such further instruments as
may be permitted by law to obligate Borrower to pay such Loan Document Taxes to
the extent provided herein.

      SECTION 8.11. Further Assurances.

      Borrower, at the request of Lender, shall execute and deliver and, if
necessary, file or record such statements, documents, agreements, UCC financing
and continuation statements and such other instruments and take such further
action as Lender from time to time may request as reasonably necessary,
desirable or proper to carry out more effectively the purposes of this Agreement
or any of the other Loan Documents or to subject the Collateral to the lien and
security interests of the Loan Documents or to evidence, perfect or otherwise
implement, to assure the lien and security interests intended by the terms of
the Loan Documents or in order to exercise or enforce its rights under the Loan
Documents, provided the foregoing does not materially increase Borrower's
obligations or materially decrease its rights hereunder.

      SECTION 8.12. Transfer of Ownership Interest of Borrower and Sun.

            (a)   Prohibition on Transfers. Subject to paragraph (b) of this
Section, neither of the Borrower or Sun shall cause or permit a Transfer or a
Change of Control.

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<PAGE>

            (b)   Permitted Transfers. Notwithstanding the provisions of
paragraph (a) of this Section, the following Transfers are permitted without the
consent of Lender:

                  (i)     A Transfer that occurs by inheritance, devise, or
      bequest or by operation of law upon the death of a natural person who is
      the owner of a direct or indirect ownership interest in Borrower or Sun.

                  (ii)    A Transfer to trusts established for the benefit of
      the transferor and/or immediate family members for estate planning
      purposes.

                  (iii)   A Transfer of member interests by the members or
      limited partners of Borrower or stock of Sun; provided, however, that no
      Change in Control occurs as the result of such Transfer.

                  (iv)    The issuance by Borrower or Sun of additional member
      interests or stock, as the case may be, and the subsequent Transfer of
      such interest; provided, however, that no Change in Control occurs as the
      result of such Transfer.

                  (v)     A merger with or acquisition of another entity by
      Borrower or Sun, provided that (A) Borrower or Sun, as the case may be, is
      the surviving entity after such merger or acquisition, (B) no Change in
      Control occurs, and (C) such merger or acquisition does not result in an
      Event of Default, as such terms are defined in this Agreement.

                  (vi)    A Transfer of a Mortgaged Property to one or more,
      direct or indirect, wholly owned Affiliate of Sun or the OP, so long as
      such entity meets the requirements of a "Borrower" under this Agreement,
      makes the representations and warranties made by the Borrower under this
      Agreement, and executes such documents as Lender may reasonably require to
      evidence such entity's obligations under the Loan Documents.

                  (vii)   A Transfer to an Approved Acquiring Person, so long as
      Lender receives a fee equal to one percent (1%) of the then Outstanding
      principal balance of the Advances then in effect.

                  (viii)  A Transfer of interests in Sun on public stock
      exchanges, provided no Change of Control occurs.

                  (ix)    In connection with any permitted Transfer submitted to
      Lender for review, Borrower shall reimburse Lender for all of Lender's
      reasonable out-of-pocket costs (including reasonable attorneys' fees)
      incurred in reviewing and documenting the Transfer request.

            (c)   Consent to Prohibited Transfers. Lender may, in its sole and
absolute discretion, consent to a Transfer that would otherwise violate this
Section if, prior to the Transfer, Borrower, Sun or the OP, as the case may be,
has satisfied each of the following requirements:

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<PAGE>

                  (i)   the submission to Lender of all information required by
      Lender to make the determination required by this Section;

                  (ii)  the absence of any Event of Default;

                  (iii) the transferee meets all of the eligibility, credit,
      management and other standards (including any standards with respect to
      previous relationships between Lender and the transferee and the
      organization of the transferee) customarily applied by Lender at the time
      of the proposed Transfer to the approval of Borrower, Sun or the OP, as
      the case may be, in connection with the origination or purchase of similar
      mortgages, deeds of trust or deeds to secure debt on multifamily
      properties;

                  (iv)  in the case of a Transfer of direct or indirect
      ownership interests in Borrower, Sun or the OP, as the case may be, if
      transferor or any other person has obligations under any Loan Documents,
      the execution by the transferee of one or more individuals or entities
      acceptable to Lender of an assumption agreement that is acceptable to
      Lender and that, among other things, requires the transferee to perform
      all obligations of transferor or such person set forth in such Loan
      Document, and may require that the transferee comply with any provisions
      of this Instrument or any other Loan Document which previously may have
      been waived by Lender;

                  (v)   Lender's receipt of all of the following:

                        (A)   a transfer fee equal to 1 percent of the
            Outstanding principal balance of the Advances immediately prior to
            the transfer.

                        (B)   In addition, Borrower shall be required to
            reimburse Lender for all of Lender's reasonable out-of-pocket costs
            (including reasonable attorneys' fees) incurred in reviewing and
            documenting the Transfer request.

      SECTION 8.13. Transfer of Ownership of Mortgaged Property.

            (a)   Prohibition on Transfers. Subject to paragraph (b) of this
Section, none of the Borrower, Sun or the OP shall cause or permit a Transfer of
a Mortgaged Property.

            (b)   Permitted Transfers. Notwithstanding provision (a) of this
Section, the following Transfers of a Mortgaged Property by Borrower are
permitted without the consent of Lender:

                  (i)   The grant of a leasehold interest in home sites or
      commercial spaces in accordance with the Security Instrument.

                  (ii)  A sale or other disposition of obsolete or worn out
      personal property having a value of less than $50,000 in any Calendar Year
      per Mortgaged Property or having a value of $50,000 or more if it is
      contemporaneously replaced by comparable personal property of equal or
      greater value which is free and clear of liens, encumbrances and security
      interests other than those created by the Loan Documents.

                                       37

<PAGE>

                  (iii) The creation of a mechanic's or materialmen's liens or
      judgment liens against a Mortgaged Property for equipment and vehicles in
      an aggregate amount not in excess of $100,000, or mechanic's or
      materialmen's liens or judgment liens against a Mortgaged Property which
      are released of record, bonded to the reasonable satisfaction of Lender,
      or otherwise remedied to Lender's satisfaction within 30 days of the date
      of creation.

                  (iv)  The grant of an easement, right of way, license or
      similar real property interest if, prior to the granting of the easement,
      right of way, license or similar real property interest, Borrower causes
      to be submitted to Lender all information required by Lender to evaluate
      the easement, and if Lender consents to such easement based upon Lender's
      determination that the easement will not materially and adversely affect
      the operation of the Mortgaged Property or Lender's interest in the
      Mortgaged Property and Borrower pays to Lender, within 15 days of demand,
      all reasonable costs and expenses incurred by Lender in connection with
      reviewing Borrower's request. Lender shall not unreasonably withhold its
      consent to or withhold its agreement to subordinate the lien of a Security
      Instrument to (A) the grant of a utility easement serving a Mortgaged
      Property to a publicly operated utility, (B) the grant of an easement
      related to expansion or widening of roadways, or (C) easements for cable
      and internet services, and the installation and use of cable and internet
      equipment, provided that any such easement is in form and substance
      reasonably acceptable to Lender and does not materially and adversely
      affect the access, use or marketability of a Mortgaged Property.

      SECTION 8.14. Change in Senior Management.

      Borrower shall give Lender notice of any change in the identity of any
member of Senior Management.

      SECTION 8.15. Intentionally Omitted.

      SECTION 8.16. Ownership of Mortgaged Properties.

      Borrower shall be the sole owner of each of the Mortgaged Properties free
and clear of any Liens other than Permitted Liens.

      SECTION 8.17. Compliance with Net Worth Test.

      Sun shall at all times maintain its Net Worth so that it is not less than
$350,000,000.

      SECTION 8.18. Compliance with Liquidity Test.

      Sun shall not permit at any time its Liquidity to be less than $3,000,000.

      SECTION 8.19. Compliance with Borrower's Consolidated EBITDA to Interest
Ratio.

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<PAGE>

      The Borrower shall not permit the Consolidated EBITDA to Interest Ratio
computed for any fiscal quarter or year to be less than 125%.

      SECTION 8.20. Special Covenants Regarding King's Court.

      The parties are aware that certain phases of the Additional Mortgaged
Property commonly known as King's Court in Traverse City, Michigan are not
connected to the municipal water system. Borrower hereby covenants that in the
event that the water supplied to these phases is not in compliance with the
requirements of any Governmental Authority having jurisdiction over water, and
such non-compliance is not cured by Borrower within thirty (30) days, Borrower
will at its sole cost and expense hook up and connect all phases to the
municipal water system within ninety (90) days of receiving notice from Lender
of such requirement.

                                   ARTICLE 9

                         NEGATIVE COVENANTS OF BORROWER

      Borrower agrees and covenants with Lender that, at all times during the
Term of this Agreement:

      SECTION 9.01. Other Activities.

      Borrower shall not:

            (a)   amend its Organizational Documents in any material respect
without the prior written consent of Lender;

            (b)   dissolve or liquidate in whole or in part;

            (c)   except as otherwise provided in this Agreement, without the
prior written consent of Lender, merge or consolidate with any Person; or

            (d)   use, or permit to be used, any Mortgaged Property for any uses
or purposes other than as a Manufactured Housing Community and ancillary uses
consistent with Manufactured Housing Communities, including providing goods and
services to residents of the Mortgaged Property (other than the sale of or
financing of manufactured homes). Notwithstanding the foregoing, Borrower shall
be permitted to improve any Expansion Property provided that (i) such
development is in a manner consistent with the operation and development of the
existing developed property, and (ii) if the improvement is for any purpose
other than infrastructure, additional home sites and amenities to be used by the
Mortgaged Property, in Lender's sole judgment such other improvement will not
decrease the value of the Mortgaged Property on which the Expansion Property is
located.

      SECTION 9.02. Liens.

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<PAGE>

      Borrower shall not create, incur, assume or suffer to exist any Lien on
any Mortgaged Property or any part of any Mortgaged Property, except the
Permitted Liens.

      SECTION 9.03. Indebtedness.

      Borrower shall not incur or be obligated at any time with respect to any
Indebtedness in connection with any of the Mortgaged Properties, provided
Borrower may incur or be obligated for Indebtedness in an amount not to exceed
$100,000 with respect to each Mortgaged Property for the purchase or lease of
equipment or vehicles used in connection with the operation or maintenance of
such Mortgaged Property.

      SECTION 9.04. Principal Place of Business.

      Borrower shall not change its principal place of business or the location
of its books and records, each as set forth in Borrower's Certificate, without
first giving 15 days' prior written notice to Lender.

      SECTION 9.05. Condominiums.

      Borrower shall not submit any Mortgaged Property to a condominium regime
during the Term of this Agreement.

      SECTION 9.06. Restrictions on Distributions.

      The Borrower shall not make any distributions of any nature or kind
whatsoever to the owners of its Ownership Interests in respect of such Ownership
Interests as such if, at the time of such distribution, a Potential Event of
Default or an Event of Default has occurred and remains uncured.

                                   ARTICLE 10

                                      FEES

      SECTION 10.01. Standby Fee.

      Borrower shall pay the Standby Fee to Lender for the period from the date
ninety (90) days after the Initial Closing Date to the end of the Term of this
Agreement. The Standby Fee shall be payable monthly, in arrears, on the first
Business Day following the end of the month, except that the Standby Fee for the
last month during the Term of this Agreement shall be paid on the last day of
the Term of this Agreement. If Borrower pays the Standby Fee, no Commitment
shall be reduced or terminated as a result of Borrower's failure to borrow any
or all of such Commitment and no fee maintenance shall be due in respect of such
Commitment unless Borrower fails to borrow any or all of such Commitment for 24
consecutive months (such that there are no Outstanding Advances), at which time
the unused portion of the Commitment shall be terminated and all fees, including
the Facility Termination Fee, shall be due at such time.

      SECTION 10.02. Origination Fee.

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<PAGE>

            (a)   Initial Origination Fee. Borrower shall pay to Lender an
origination fee equal to $712,912.50 (which is equal to the product obtained by
multiplying (i) the Commitment in excess of $152,362,500 as of the date of this
Agreement ($237,637,500) by (ii) .30%). With respect to any Fixed Advance, at
Borrower's option, in lieu of paying the Initial Origination Fee as set forth in
the preceding sentence, Borrower may elect to increase the Fixed Facility Fee as
follows:

            5 Year Term:                      8.5 basis point increase per annum
            7 Year Term                       6 basis point increase per annum
            10 Years or Greater Term          5 basis point increase per annum

            (b)   Expansion Origination Fee. Upon the making of any Advance or
portion of any Advance in excess of $390,000,000 for which an origination fee or
an Expansion Origination Fee has not been paid, Borrower shall pay to Lender an
origination fee ("Expansion Origination Fee") equal to the product obtained by
multiplying (i) the amount of such Advance or portion of such Advance by (ii)
..30%.

      SECTION 10.03. Due Diligence Fees.

            (a)   Initial Due Diligence Fees. Borrower shall pay to Lender due
diligence fees ("Initial Due Diligence Fees") with respect to the Initial
Mortgaged Properties (other than those Initial Mortgaged Properties comprising
the Collateral Pool prior to the Initial Closing Date) in an amount equal to
$14,750 for each Mortgaged Property.

      Borrower has previously paid to Lender a portion of the Initial Due
Diligence Fees and shall pay the remainder of the Initial Due Diligence Fees to
Lender on the Initial Closing Date. Any portion of the Initial Due Diligence
Fees paid to Lender not actually used by Lender to cover due diligence expenses
shall be promptly refunded to Borrower. If the actual cost of due diligence
expenses exceeds the Initial Due Diligence Fees, the Borrower shall promptly pay
such excess cost. Borrower has also paid to Lender due diligence fees in an
amount equal to $7,750 in respect of each Mortgaged Property comprising the
Collateral Pool pursuant to the Original Agreement.

            (b)   Additional Due Diligence Fees for Additional Collateral.
Borrower shall pay to Lender additional due diligence fees (the "Additional
Collateral Due Diligence Fees") with respect to each Additional Mortgaged
Property in an amount equal to $14,750. The Additional Collateral Due Diligence
Fees shall be paid together with any Additional Request or Substitution Request.
Any portion of the Additional Collateral Due Diligence Fees paid to Lender but
not actually used by Lender to cover due diligence expenses shall be promptly
refunded to Borrower. If the actual cost of due diligence expenses exceeds the
Additional Collateral Due Diligence Fees, the Borrower shall promptly pay such
excess cost.

      SECTION 10.04. Legal Fees and Expenses.

            (a)   Initial Legal Fees. Borrower shall pay, or reimburse Lender
for, all out-of-pocket legal fees and expenses incurred by Lender and by Fannie
Mae in connection with the

                                       41

<PAGE>

preparation, review and negotiation of this Agreement and any other Loan
Documents executed on the date of this Agreement in an amount agreed upon by
Borrower and Lender.

            (b)   Fees and Expenses Associated with Requests. Borrower shall
pay, or reimburse Lender for, all reasonable costs and expenses incurred by
Lender, including the out-of-pocket legal fees and expenses incurred by Lender
in connection with the preparation, review and negotiation of all documents,
instruments and certificates to be executed and delivered in connection with
each Request, the performance by Lender of any of its obligations with respect
to the Request, the satisfaction of all conditions precedent to Borrower's
rights or Lender's obligations with respect to the Request, and all transactions
related to any of the foregoing, including the cost of title insurance premiums
and applicable recordation and transfer taxes and charges and all other
reasonable costs and expenses in connection with a Request. The obligations of
Borrower under this subsection shall be absolute and unconditional, regardless
of whether the transaction requested in the Request actually occurs. Borrower
shall pay such costs and expenses to Lender on the Closing Date for the Request,
or, as the case may be, after demand by Lender when Lender determines that such
Request will not close.

      SECTION 10.05. Failure to Close any Request.

      If Borrower makes a Request, such Request is approved by Lender and
thereafter Borrower fails to close on the Request for any reason other than the
default by Lender, then Borrower shall pay to Lender and Fannie Mae all actual
damages incurred by Lender and Fannie Mae in connection with the failure to
close.

      SECTION 10.06. Rate Preservation Fee.

      At Borrower's election, Borrower shall incur the Rate Preservation Fee
commencing on the first day after the First Anniversary. Borrower shall notify
Lender in writing not less than 30 days prior to the First Anniversary if it
elects to pay the Rate Preservation Fee. If Borrower fails to provide written
notice to Lender by the First Anniversary, Borrower shall be deemed to have
elected not to pay the Rate Preservation Fee. If Borrower elects (or is deemed
to have elected) not to pay the Rate Preservation Fee, such election shall be
final. If Borrower elects to pay the Rate Preservation Fee, such election may be
irrevocably terminated by at least 30 days' written notice of such termination
by Borrower to Lender. The Rate Preservation Fee shall be payable monthly, in
arrears, on the first Business Day following the end of the month, except that
the Rate Preservation Fee for the last month during the Term of this Agreement
shall be paid on the last day of the Term of this Agreement.

                                   ARTICLE 11

                                EVENTS OF DEFAULT

      SECTION 11.01. Events of Default.

      Each of the following events shall constitute an "Event of Default" under
this Agreement, whatever the reason for such event and whether it shall be
voluntary or involuntary, or within or

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<PAGE>

without the control of Borrower or be effected by operation of law or pursuant
to any judgment or order of any court or any order, rule or regulation of any
Governmental Authority:

            (a)   the occurrence of a default under any Loan Document beyond the
cure period, if any, set forth therein; or

            (b)   the failure by Borrower to pay when due any amount payable by
Borrower under any Note, any Mortgage, this Agreement or any other Loan
Document, including any fees, costs or expenses; or

            (c)   the failure by Borrower to perform or observe any covenant
contained in Sections 8.01 through 8.20 or Sections 9.01 through 9.06 for 30
days after receipt of notice of such failure by Borrower from Lender, provided
that such period shall be extended for up to 30 additional days if Borrower, in
the reasonable discretion of Lender, is diligently pursuing a cure of such
default within 30 days after receipt of notice from Lender; or

            (d)   any warranty, representation or other written statement made
by or on behalf of Borrower or Sun contained in this Agreement, any other Loan
Document or in any instrument furnished in compliance with or in reference to
any of the foregoing, is false or misleading in any material respect on any date
when made or deemed made; or

            (e)   (i) Borrower, Sun or the OP shall (A) commence a voluntary
case under the Federal bankruptcy laws (as now or hereafter in effect), (B) file
a petition seeking to take advantage of any other laws, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, debt adjustment, winding up
or composition or adjustment of debts, (C) consent to or fail to contest in a
timely and appropriate manner any petition filed against it in an involuntary
case under such bankruptcy laws or other laws, (D) apply for or consent to, or
fail to contest in a timely and appropriate manner, the appointment of, or the
taking of possession by, a receiver, custodian, trustee or liquidator of itself
or of a substantial part of its property, domestic or foreign, (E) admit in
writing its inability to pay, or generally not be paying, its debts as they
become due, (F) make a general assignment for the benefit of creditors, (G)
assert that Borrower, Sun or the OP has no liability or obligations under this
Agreement or any other Loan Document to which it is a party; or (H) take any
action for the purpose of effecting any of the foregoing; or (ii) a case or
other proceeding shall be commenced against Borrower, Sun or the OP in any court
of competent jurisdiction seeking (A) relief under the Federal bankruptcy laws
(as now or hereafter in effect) or under any other laws, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, winding upon or composition
or adjustment of debts, or (B) the appointment of a trustee, receiver,
custodian, liquidator or the like of Borrower, Sun or the OP , or of all or a
substantial part of the property, domestic or foreign, of Borrower, Sun or the
OP and any such case or proceeding shall continue undismissed or unstayed for a
period of 60 consecutive calendar days, or any order granting the relief
requested in any such case or proceeding against Borrower, Sun or the OP
(including an order for relief under such Federal bankruptcy laws) shall be
entered; or

            (f)   if any provision of this Agreement or any other Loan Document
or the lien and security interest purported to be created hereunder or under any
Loan Document shall at any

                                       43

<PAGE>

time for any reason cease to be valid and binding in accordance with its terms
on Borrower or Sun, or shall be declared to be null and void, or the validity or
enforceability hereof or thereof or the validity or priority of the lien and
security interest created hereunder or under any other Loan Document shall be
contested by Borrower or Sun seeking to establish the invalidity or
unenforceability hereof or thereof, or Borrower or Sun (only with respect to the
Guaranty) shall deny that it has any further liability or obligation hereunder
or thereunder; or

            (g)   (i) the execution by Borrower of a chattel mortgage or other
security agreement on any materials, fixtures or articles used in the
construction or operation of the improvements located on any Mortgaged Property
or on articles of personal property located therein, provided Borrower shall be
permitted to execute a security agreement in connection with the financing of up
to, in the aggregate, $100,000 in connection with each Mortgaged Property for
the purchase or lease of equipment or vehicles used in connection with the
operation or maintenance of such Mortgaged Property, or (ii) if any such
materials, fixtures or articles are purchased pursuant to any conditional sales
contract or other security agreement or otherwise so that the Ownership thereof
will not vest unconditionally in Borrower free from encumbrances, or (iii) if
Borrower does not furnish to Lender upon request the contracts, bills of sale,
statements, receipted vouchers and agreements, or any of them, under which
Borrower claim title to such materials, fixtures, or articles; or

            (h)   the failure by Borrower to comply with any requirement of any
Governmental Authority within 30 days after written notice of such requirement
shall have been given to Borrower by such Governmental Authority if such
noncompliance has a Material Effect on Borrower; provided that, if action is
commenced and diligently pursued by Borrower within such 30 days, then Borrower
shall have an additional 30 days or, if longer, the time permitted by the
Governmental Authority to comply with such requirement; or

            (i)   a dissolution or liquidation for any reason (whether voluntary
or involuntary) of Borrower or Sun; or

            (j)   any judgment against Borrower or Sun, any attachment or other
levy against any portion of Borrower's or Sun's assets with respect to a claim
or claims in an amount in excess of $500,000 in the aggregate with respect to
Borrower, or $1,000,000 in the aggregate with respect to Sun remains unpaid,
unstayed on appeal undischarged, unbonded, not fully insured or undismissed for
a period of 60 days; or

            (k)   the failure by Borrower or Sun to perform or observe any
material term, covenant, condition or agreement hereunder, other than as
contained in subsections (a) through (j) above, or in any other Loan Document,
within 30 days after receipt of notice from Lender identifying such failure,
provided such period shall be extended for up to 30 additional days if Borrower,
in the reasonable discretion of Lender, is diligently pursuing a cure of such
default within 30 days after receipt of notice from Lender.

                                       44

<PAGE>

                                   ARTICLE 12

                                    REMEDIES

      SECTION 12.01. Remedies; Waivers.

      Upon the occurrence of an Event of Default, Lender may do any one or more
of the following (without presentment, protest or notice of protest, all of
which are expressly waived by Borrower), subject, however, to the limitations
set forth in Article 15 hereof:

            (a)   by written notice to Borrower, to be effective upon dispatch,
terminate the Commitment and declare the principal of, and interest on, the
Advances and all other sums owing by Borrower to Lender under any of the Loan
Documents forthwith due and payable, whereupon the Commitment will terminate and
the principal of, and interest on, the Advances and all other sums owing by
Borrower to Lender under any of the Loan Documents will become forthwith due and
payable.

            (b)   Lender shall have the right to pursue any other remedies
available to it under any of the Loan Documents.

            (c)   Lender shall have the right to pursue all remedies available
to it at law or in equity, including obtaining specific performance and
injunctive relief.

      SECTION 12.02. Waivers; Rescission of Declaration.

      Lender shall have the right, to be exercised in its complete discretion,
to waive any breach hereunder (including the occurrence of an Event of Default),
by a writing setting forth the terms, conditions, and extent of such waiver
signed by Lender and delivered to Borrower. Unless such writing expressly
provides to the contrary, any waiver so granted shall extend only to the
specific event or occurrence which gave rise to the waiver and not to any other
similar event or occurrence which occurs subsequent to the date of such waiver.

      SECTION 12.03. Lender's Right to Protect Collateral and Perform Covenants
and Other Obligations.

      If Borrower or Sun fails to perform the covenants and agreements contained
in this Agreement or any of the other Loan Documents, then Lender at Lender's
option may make such appearances, disburse such sums and take such action as
Lender deems reasonably necessary, in its sole discretion, to protect Lender's
interest, including (i) disbursement of reasonable attorneys' fees, (ii) entry
upon the Mortgaged Property to make repairs and replacements, (iii) procurement
of satisfactory insurance as provided in the Security Instrument encumbering the
Mortgaged Property, and (iv) if the Security Instrument is on a leasehold,
exercise of any option to renew or extend the ground lease on behalf of Borrower
and the curing of any default of Borrower in the terms and conditions of the
ground lease. Any amounts disbursed by Lender pursuant to this Section, with
interest thereon, shall become additional indebtedness of Borrower secured by
the Loan Documents. Unless Borrower and Lender agree to other terms of payment,
such amounts shall be immediately due and payable and shall bear interest from
the date of

                                       45

<PAGE>

disbursement at the weighted average, as determined by Lender, of the interest
rates in effect from time to time for each Advance unless collection from
Borrower of interest at such rate would be contrary to applicable law, in which
event such amounts shall bear interest at the highest rate which may be
collected from Borrower under applicable law. Nothing contained in this Section
shall require Lender to incur any expense or take any action hereunder.

      SECTION 12.04. No Remedy Exclusive.

      Unless otherwise expressly provided, no remedy herein conferred upon or
reserved is intended to be exclusive of any other available remedy, but each
remedy shall be cumulative and shall be in addition to other remedies given
under the Loan Documents or existing at law or in equity.

      SECTION 12.05. No Waiver.

      No delay or omission to exercise any right or power accruing under any
Loan Document upon the happening of any Event of Default or Potential Event of
Default shall impair any such right or power or shall be construed to be a
waiver thereof, but any such right and power may be exercised from time to time
and as often as may be deemed expedient.

      SECTION 12.06. No Notice.

      To entitle Lender to exercise any remedy reserved to Lender in this
Article, it shall not be necessary to give any notice, other than such notice as
may be required under the applicable provisions of this Agreement, any of the
other Loan Documents or Applicable Law.

                                   ARTICLE 13

                              RIGHTS OF FANNIE MAE

      SECTION 13.01. Special Pool Purchase Contract.

      Borrower acknowledges that Fannie Mae is entering into an agreement with
Lender ("Special Pool Purchase Contract"), pursuant to which, inter alia, (i)
Lender shall agree to assign all of its rights under this Agreement to Fannie
Mae, (ii) Fannie Mae shall accept the assignment of the rights, (iii) subject to
the terms, limitations and conditions contained in the Special Pool Purchase
Contract, Fannie Mae shall agree to purchase a 100% participation interest in
each Advance issued under this Agreement by (a) issuing to Lender an MBS, in the
amount and for a term equal to the Advance purchased and backed by an interest
in the Fixed Facility Note or the Variable Facility Note, as the case may be,
and the Collateral Pool securing the Notes or (b) paying cash to Lender in the
amount equal to the Advance purchased and backed by any interest in the Fixed
Facility Note and the Collateral Pool securing the Notes, (iv) Lender shall
agree to assign to Fannie Mae all of Lender's interest in the Notes and
Collateral Pool securing the Notes, and (v) Lender shall agree to service the
loans evidenced by the Notes.

      SECTION 13.02. Assignment of Rights.

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<PAGE>

      Borrower acknowledges and consents to the assignment to Fannie Mae of all
of the rights of Lender under this Agreement and all other Loan Documents,
including the right and power to make all decisions on the part of Lender to be
made under this Agreement and the other Loan Documents, but Fannie Mae, by
virtue of this assignment, shall not be obligated to perform the obligations of
Lender under this Agreement or the other Loan Documents.

      SECTION 13.03. Release of Collateral.

      Borrower hereby acknowledges that, after the assignment of Loan Documents
contemplated in Section 13.02, Lender shall not have the right or power to
effect a release of any Collateral pursuant to Article 6. Borrower acknowledges
that the Security Instruments provide for the release of the Collateral under
Articles 3 and 5. Accordingly, Borrower shall not look to Lender for performance
of any obligations contained in Articles 3 and 5, but shall look solely to the
party secured by the Collateral to be released for such performance. Lender
represents and warrants to Borrower that the party secured by the Collateral
shall be subject to the release provisions contained in Articles 3 and 5 by
virtue of the release provisions in each Security Instrument.

      SECTION 13.04. Replacement of Lender.

      At the request of Fannie Mae, Borrower and Lender shall agree to the
assumption by another lender designated by Fannie Mae (which lender shall meet
Fannie Mae's then current standards for lenders for credit facilities of the
type and size of the credit facility evidenced by this Agreement), of all of the
obligations of Lender under this Agreement and the other Loan Documents, and/or
any related servicing obligations, and, at Fannie Mae's option, the concurrent
release of Lender from its obligations under this Agreement and the other Loan
Documents, and/or any related servicing obligations, and shall execute all
releases, modifications and other documents which Fannie Mae determines are
necessary or desirable to effect such assumption, all without material cost to
Borrower.

      SECTION 13.05. Fannie Mae and Lender Fees and Expenses.

      Borrower agree that any provision providing for the payment of fees, costs
or expenses incurred or charged by Lender pursuant to this Agreement shall be
deemed to provide for Borrower's payment of all reasonable fees, costs and
expenses incurred or charged by Lender or Fannie Mae in connection with the
matter for which fees, costs or expenses are payable.

      SECTION 13.06. Third-Party Beneficiary.

      Borrower hereby acknowledge and agree that Fannie Mae is a third party
beneficiary of all of the representations, warranties and covenants made by
Borrower to, and all rights under this Agreement conferred upon, Lender, and, by
virtue of its status as third-party beneficiary and/or assignee of Lender's
rights under this Agreement, Fannie Mae shall have the right to enforce all of
the provisions of this Agreement against Borrower.

                                       47

<PAGE>

                                   ARTICLE 14

              INSURANCE, REAL ESTATE TAXES AND REPLACEMENT RESERVES

      SECTION 14.01. Insurance and Real Estate Taxes.

      Borrower shall establish funds for taxes, insurance premiums and certain
other charges for each Mortgaged Property in accordance with Section 7(a) of the
Security Instrument for each Mortgaged Property.

      SECTION 14.02. Replacement Reserves.

      Borrower shall execute a Replacement Reserve Agreement for the Mortgaged
Property which they own and shall (unless waived by Lender by separate
agreement) make all deposits for replacement reserves in accordance with the
terms of the Replacement Reserve Agreement.

                                   ARTICLE 15

                       PERSONAL LIABILITY OF THE BORROWER

      SECTION 15.01. Personal Liability of Borrower.

                  (a)   Limits on Personal Liability. The Lender's only recourse
            for the payment and performance of the Obligations shall be the
            Lender's exercise of its rights and remedies with respect to the
            Mortgaged Properties and any other Collateral held by the Lender as
            security for the Obligations. Notwithstanding the foregoing, no
            general partner of Borrower shall have personal liability under this
            Section 15.01(a) (unless such general partner is a guarantor under
            the Guaranty). This limitation on the Borrower's liability shall not
            impair the Lender's enforcement of its rights set forth in the
            Guaranty.

                  (b)   Exceptions to Limits on Personal Liability. The Borrower
            (but not any general partner of Borrower [unless such general
            partner is a guarantor under the Guaranty]) shall be personally
            liable to Lender for an amount equal to any loss or damage suffered
            by Lender as a result of (1) failure of Borrower to pay to Lender
            upon demand after an Event of Default all Rents to which Lender is
            entitled under the Security Instrument encumbering the Mortgaged
            Property and the amount of all security deposits collected by
            Borrower; (2) failure of Borrower to apply all insurance proceeds,
            condemnation proceeds or security deposits from tenants as required
            by the Security Instrument encumbering the Mortgaged Property; (3)
            fraud or written material misrepresentation (at the time made) by
            Borrower or any officer, director, partner, member or employee of
            Borrower in connection with the application for or creation of the
            Obligations or any request for any action or consent by Lender; (4)
            failure to apply Rents, first, to the payment of reasonable
            operating expenses and then to amounts ("Debt Service Amounts")
            payable under the Loan Documents, provided that prior to such
            application, Rents may be commingled with other funds of Sun or its
            Affiliates

                                       48

<PAGE>

            (except that Borrower will not be personally liable (i) to the
            extent that Borrower lacks the legal right to direct the
            disbursement of such sums because of a bankruptcy, receivership or
            similar judicial proceeding, or (ii) with respect to Rents of a
            Mortgaged Property that are distributed in any Calendar Quarter if
            Borrower has paid all operating expenses and Debt Service Amounts
            for that Calendar Quarter); (5) a Final Loss with respect to the
            Obligations upon the filing of a voluntary petition in a Bankruptcy
            proceeding by the Borrower, Sun or the OP or the filing of an
            involuntary proceeding in Bankruptcy against the Borrower, Sun or
            the OP or an Affiliate thereof by Borrower, Sun or the OP or an
            Affiliate thereof; (6) Borrower's acquisition of any property or
            operation of any business not permitted by Section 33 of any
            Security Instrument; (7) a Transfer that is not a Permitted Transfer
            of Mortgaged Properties or a Permitted Transfer of Ownership
            Interests; or (8) any and all indemnification obligations contained
            in Section 18 of any Security Instrument.

                  (c)   Miscellaneous. To the extent that Borrower has personal
            liability under this Section, such liability shall be joint and
            several with that of Sun under the Guaranty and Lender may exercise
            its rights against Borrower or Sun personally without regard to
            whether Lender has exercised any rights against the Mortgaged
            Property or any other security, or pursued any rights against any
            guarantor, or pursued any other rights available to Lender under the
            Loan Documents or applicable law.

                                   ARTICLE 16

                            INTEREST RATE PROTECTION

      SECTION 16.01. Interest Rate Protection.

            (a)   The Initial Cap. To protect against fluctuations in interest
rates, Borrower shall make arrangements for a Cap to be in place and maintained
at all times with respect to the Variable Advances Outstanding. Each initial Cap
relating to a Variable Advance Outstanding shall be in place for a period
beginning on the date such Cap is purchased and ending not earlier than the date
which is three years from the purchase of such Cap (the "Initial Cap Period").
Notwithstanding the foregoing, any Cap in place on the Initial Closing Date
purchased by Borrower pursuant to the Original Agreement shall be deemed to meet
the requirement of an initial Cap otherwise required to be purchased under this
Agreement.

            (b)   Subsequent Caps. Subject to the other terms of Article 16,
additional Caps (each, a "Subsequent Cap") shall be purchased by Borrower (i)
upon the expiration of the Cap in place for the Initial Cap Period, and (ii) if
elected by the Borrower, at the time any Additional Variable Advance is made.
Any Subsequent Cap purchased pursuant to the preceding sentence shall be in
effect for a period beginning on the date of the expiration of the initial Cap
or Closing Date of the Future Advance Request, as the case may be, and ending on
the Variable Facility Termination Date or, if shorter, three (3) years from the
Closing Date of the Future Advance Request. If the Variable Facility Termination
Date is extended pursuant to Section 1.07 of this

                                       49

<PAGE>

Agreement, the Borrower shall obtain Subsequent Caps pursuant to this Article 16
for a period for the shorter of (i) three years and (ii) the period ending on
the Variable Facility Termination Date. It is the intention of the parties, and
a condition of the Variable Facility Commitment, that the Borrower shall obtain,
and shall maintain at all times during the term of this Agreement so long as
there are any Variable Facility Advances Outstanding, a Cap or Caps in an
aggregate notional principal amount equal to the portion of the Variable
Advances Outstanding elected by the Borrower pursuant to this Article 16 and
covering the entire term of the Variable Facility Commitment and meeting the
conditions set forth in Section 16.02. If the Variable Advances Outstanding
decrease, the Borrower may amend the Cap or Caps to provide for a decrease in
the notional amount to an amount equal to the reduced amount of the Variable
Facility Commitment, provided that the Lender gives its prior written approval
to the documents reflecting the amendment (which approval shall not be
unreasonably withheld, delayed or conditioned). If the Aggregate Debt Service
Coverage Ratio increases at the end of the period ending at the end of the
second Loan Year, the Borrower may amend or replace the Cap or Caps to provide
an amended or substitute Cap or Caps that meet the requirements of Section
16.02, provided that the Lender gives its prior written approval to the
documents reflecting the amendment to the Cap or Caps or substitute Cap or Caps,
which approval shall not be unreasonably withheld, delayed or conditioned.

      SECTION 16.02. Cap Terms.

      Each Cap shall:

      (i)   together with all other Caps in place, provide for a notional
      principal amount equal at all times to the outstanding principal balance
      of the Variable Facility Commitment;

      (ii)  be in effect at the time of its purchase for not less than the
      shorter of (a) the entire term of the Variable Facility Commitment and (b)
      three (3) years;

      (iii) provide for a notional interest rate equal to not less than the
      lowest interest rate that would result in an Aggregate Debt Service
      Coverage Ratio of not less than 1.0 to 1.0 (the "Cap Interest Rate"), and
      require the counterparty to make interest payments on the notional
      principal amount at a rate equal to the amount by which Coupon Rate
      exceeds the Cap Interest Rate;

      (iv)  require the counterparty to make such interest payments to an
      account pledged to the Lender pursuant to the Cap Security Agreement; and

      (v)   be evidenced, governed and secured on terms and conditions, and
      pursuant to documentation (the "Cap Documents"), in form and content
      reasonably acceptable to Fannie Mae, and with a counterparty (a
      "Counterparty") reasonably approved by Fannie Mae.

      SECTION 16.03. Cap Security Agreement; Delivery of Cap Payments.

                                       50

<PAGE>

      Pursuant to a Cap Security Agreement, the Lender shall be granted an
enforceable, perfected, first priority lien on and security interest in each Cap
and payments due under the Cap (including scheduled and termination payments) in
order to secure the Borrower's obligations to the Lender under this Agreement.
With respect to each Cap, the Cap Security Agreement must be delivered by the
Borrower to the Lender no later than the effective date of the Cap.

      SECTION 16.04. Termination.

      The Borrower shall not terminate, transfer or consent to any transfer of
any existing Cap without the Lender's prior written consent as long as the
Borrower is required to maintain a Cap pursuant to this Agreement; provided,
however, that if, and at such time as, any Variable Facility Commitment
terminates, the Borrower shall have the right to terminate the existing Cap with
respect to such Variable Facility Commitment.

      SECTION 16.05. Performance Under Cap Documents.

      The Borrower agrees to comply fully with, and to otherwise perform when
due, its obligations under, all applicable Cap Documents and all other
agreements evidencing, governing and/or securing any Cap arrangement
contemplated under this Article 16. The Borrower shall not exercise, without the
Lender's prior written consent, and upon the occurrence and during the
continuance of an Event of Default, shall exercise, at the Lender's direction,
any rights or remedies under any Cap Document, including without limitation the
right of termination.

      SECTION 16.06. Escrow Provisions.

      (a)   Monthly Cap Escrow Payment. Until the Borrower obtains a Cap or Caps
that have a term through the entire term of the Variable Facility Commitment,
the Borrower shall, on the first Business Day of each month, deposit with the
Lender the Monthly Cap Escrow Payment. The "Monthly Cap Escrow Payment" means,
with respect to the first 36 months after the purchase of a Cap for less than
the entire remaining term of any portion of the Variable Facility Commitment, an
amount equal to one thirty-sixth (1/36) of 125% of the cost, as reasonably
estimated quarterly by the Lender, to obtain any required Subsequent Cap plus
any amount required to increase the Cap Escrow Fund to the amount then required
to be funded in the Cap Escrow Fund based on the then current cost estimate.

      In no event shall the Borrower be required to make deposits into the Cap
Escrow Fund if the amount in the Cap Escrow Fund equals or exceeds 125% of the
cost, as then reasonably estimated by the Lender, to obtain any required
Subsequent Cap.

      In lieu of the Monthly Cap Escrow Payment, Borrower may, on the date any
Cap is purchased, deliver to Lender a letter of credit issued by a financial
institution reasonably acceptable to Lender and having terms and conditions
reasonably acceptable to Lender having a face amount equal to 125% of the cost,
as reasonably estimated by Lender, to obtain any required Subsequent Caps.
Lender or Borrower may require, not more often than quarterly, an increase or
decrease, as the case may be, in the face amount of the Letter of Credit to
increase or decrease, as the case may be, the face amount of the Letter of
Credit to 125% of the then current estimate of the cost to acquire any required
Subsequent Cap.

                                       51

<PAGE>

      SECTION 16.07. Cap Escrow Fund.

      The Lender shall deposit the Monthly Cap Escrow Payments in an
interest-bearing account (the "Cap Escrow Fund") which meets the standards for
custodial accounts as required by Lender from time to time. (The Monthly Cap
Escrow Payment and all other funds in the Cap Escrow Fund are referred to
collectively as the "Cap Escrow Fund"). Lender or a designated representative of
Lender shall have the sole right to make withdrawals from such account. All
interest earned on funds in the Cap Escrow Fund shall be added to and become
part of the Cap Escrow Fund. Lender shall not be responsible for any losses
resulting from the investment of the Cap Escrow Fund or for obtaining any
specific level or percentage of earnings on such investment. If applicable law
requires and provided that no Event of Default or Potential Event of Default
exists under any of the Loan Documents, Lender shall pay to Borrower the
interest earned on the Cap Escrow Fund once each year. Borrower assigns to
Lender the Cap Escrow Fund as additional security for all of the Borrower's
obligations under the Loan Documents; provided, however, Lender shall make
disbursements from the Cap Escrow Fund in accordance with the terms of this
Agreement. Funds in the Cap Escrow Fund shall be used by the Lender to purchase
any required Subsequent Cap. To the extent such Cap Escrow Funds are
insufficient to purchase any required Subsequent Cap, the Borrower shall
promptly remit such funds to the Lender or the provider of the Cap. Any amount
in the Cap Escrow Fund not used to purchase a Subsequent Cap shall be returned
to the Borrower at such time as Lender determines that no additional Subsequent
Caps will be required to be purchased.

                                   ARTICLE 17

                            MISCELLANEOUS PROVISIONS

      SECTION 17.01. Counterparts.

      To facilitate execution, this Agreement may be executed in any number of
counterparts. It shall not be necessary that the signatures of, or on behalf of,
each party, or that the signatures of all persons required to bind any party,
appear on each counterpart, but it shall be sufficient that the signature of, or
on behalf of, each party, appear on one or more counterparts. All counterparts
shall collectively constitute a single agreement. It shall not be necessary in
making proof of this Agreement to produce or account for more than the number of
counterparts containing the respective signatures of, or on behalf of, all of
the parties hereto.

      SECTION 17.02. Amendments, Changes and Modifications.

      This Agreement may be amended, changed, modified, altered or terminated
only by written instrument or written instruments signed by all of the parties
hereto.

      SECTION 17.03. Payment of Costs, Fees and Expenses.

      Borrower shall pay, on demand, all reasonable fees, costs, charges or
expenses (including the fees and expenses of attorneys, accountants and other
experts) incurred by Lender in connection with:

                                       52

<PAGE>

            (a)   Any amendment, consent or waiver to this Agreement or any of
the Loan Documents (whether or not any such amendments, consents or waivers are
entered into).

            (b)   Defending or participating in any litigation arising from
actions by third parties and brought against or involving Lender with respect to
(i) any Mortgaged Property, (ii) any event, act, condition or circumstance in
connection with any Mortgaged Property or (iii) the relationship between Lender
and Borrower, Sun and the OP in connection with this Agreement or any of the
transactions contemplated by this Agreement unless caused by the gross
negligence or willful misconduct of Lender.

            (c)   The administration or enforcement of, or preservation of
rights or remedies under, this Agreement or any other Loan Documents or in
connection with the foreclosure upon, sale of or other disposition of any
Collateral granted pursuant to the Loan Documents.

            (d)   Any disclosure documents, including fees payable to any rating
agencies, including the reasonable fees and expenses of Lender's outside
attorneys and accountants.

Borrower shall also pay, on demand, any transfer taxes, documentary taxes,
assessments or charges made by any governmental authority by reason of the
execution, delivery, filing, recordation, performance or enforcement of any of
the Loan Documents or the Advances. However, Borrower will not be obligated to
pay any franchise, excise, estate, inheritance, income, excess profits or
similar tax on Lender. Any attorneys' fees and expenses payable by Borrower
pursuant to this Section shall be recoverable separately from and in addition to
any other amount included in such judgment, and such obligation is intended to
be severable from the other provisions of this Agreement and to survive and not
be merged into any such judgment. Any amounts payable by Borrower pursuant to
this Section, with interest thereon if not paid when due, shall become
additional indebtedness of Borrower secured by the Loan Documents. Such amounts
shall bear interest from the date such amounts are due until paid in full at the
weighted average, as determined by Lender, of the interest rates in effect from
time to time for each Advance unless collection from Borrower of interest at
such rate would be contrary to applicable law, in which event such amounts shall
bear interest at the highest rate which may be collected from Borrower under
applicable law. The provisions of this Section are cumulative with, and do not
exclude the application and benefit to Lender of, any provision of any other
Loan Document relating to any of the matters covered by this Section.

      SECTION 17.04. Payment Procedure.

      All payments to be made to Lender pursuant to this Agreement or any of the
Loan Documents shall be made in lawful currency of the United States of America
and in immediately available funds by wire transfer to an account designated by
Lender before 2:00 p.m. (Washington, D.C. time) on the date when due.

      SECTION 17.05. Payments on Business Days.

      In any case in which the date of payment to Lender or the expiration of
any time period hereunder occurs on a day which is not a Business Day, then such
payment or expiration of such

                                       53

<PAGE>

time period need not occur on such date but may be made on the next succeeding
Business Day with the same force and effect as if made on the day of maturity or
expiration of such period, except that interest shall continue to accrue for the
period after such date to the next Business Day.

      SECTION 17.06. Choice of Law; Consent to Jurisdiction; Waiver of Jury
Trial.

      NOTWITHSTANDING ANYTHING IN THE NOTES, THE SECURITY DOCUMENTS OR ANY OF
THE OTHER LOAN DOCUMENTS TO THE CONTRARY, EACH OF THE TERMS AND PROVISIONS, AND
RIGHTS AND OBLIGATIONS OF THE BORROWER UNDER THE NOTES, AND THE BORROWER AND SUN
UNDER THE OTHER LOAN DOCUMENTS, SHALL BE GOVERNED BY, INTERPRETED, CONSTRUED AND
ENFORCED PURSUANT TO AND IN ACCORDANCE WITH THE LAWS OF THE DISTRICT OF COLUMBIA
(EXCLUDING THE LAW APPLICABLE TO CONFLICTS OR CHOICE OF LAW) EXCEPT TO THE
EXTENT OF PROCEDURAL AND SUBSTANTIVE MATTERS RELATING ONLY TO (1) THE CREATION,
PERFECTION AND FORECLOSURE OF LIENS AND SECURITY INTERESTS, AND ENFORCEMENT OF
THE RIGHTS AND REMEDIES, AGAINST THE MORTGAGED PROPERTIES, WHICH MATTERS SHALL
BE GOVERNED BY THE LAWS OF THE JURISDICTION IN WHICH THE MORTGAGED PROPERTY IS
LOCATED, (2) THE PERFECTION, THE EFFECT OF PERFECTION AND NON-PERFECTION AND
FORECLOSURE OF SECURITY INTERESTS ON PERSONAL PROPERTY (OTHER THAN DEPOSIT
ACCOUNTS), WHICH MATTERS SHALL BE GOVERNED BY THE LAWS OF THE JURISDICTION
DETERMINED BY THE CHOICE OF LAW PROVISIONS OF THE DISTRICT OF COLUMBIA UNIFORM
COMMERCIAL CODE AND (3) THE PERFECTION, THE EFFECT OF PERFECTION AND
NON-PERFECTION AND FORECLOSURE OF DEPOSIT ACCOUNTS, WHICH MATTERS SHALL BE
GOVERNED BY THE LAWS OF THE JURISDICTION IN WHICH THE DEPOSIT ACCOUNT IS
LOCATED. BORROWER AND SUN AGREE THAT ANY CONTROVERSY ARISING UNDER OR IN
RELATION TO THE NOTES, THE SECURITY DOCUMENTS OR ANY OTHER LOAN DOCUMENT SHALL
BE, EXCEPT AS OTHERWISE PROVIDED HEREIN, LITIGATED IN DISTRICT OF COLUMBIA. THE
LOCAL AND FEDERAL COURTS AND AUTHORITIES WITH JURISDICTION IN DISTRICT OF
COLUMBIA SHALL, EXCEPT AS OTHERWISE PROVIDED HEREIN, HAVE JURISDICTION OVER ALL
CONTROVERSIES WHICH MAY ARISE UNDER OR IN RELATION TO THE LOAN DOCUMENTS,
INCLUDING THOSE CONTROVERSIES RELATING TO THE EXECUTION, JURISDICTION, BREACH,
ENFORCEMENT OR COMPLIANCE WITH THE NOTES, THE SECURITY DOCUMENTS OR ANY OTHER
ISSUE ARISING UNDER, RELATING TO, OR IN CONNECTION WITH ANY OF THE LOAN
DOCUMENTS. THE BORROWER AND SUN IRREVOCABLY CONSENT TO SERVICE, JURISDICTION,
AND VENUE OF SUCH COURTS FOR ANY LITIGATION ARISING FROM THE NOTES, THE SECURITY
DOCUMENTS OR ANY OF THE OTHER LOAN DOCUMENTS, AND WAIVE ANY OTHER VENUE TO WHICH
IT MIGHT BE ENTITLED BY VIRTUE OF DOMICILE, HABITUAL RESIDENCE OR OTHERWISE.
NOTHING CONTAINED HEREIN, HOWEVER, SHALL PREVENT LENDER FROM BRINGING ANY SUIT,
ACTION OR PROCEEDING OR EXERCISING ANY RIGHTS AGAINST BORROWER AND SUN AND
AGAINST THE COLLATERAL IN

                                       54

<PAGE>

ANY OTHER JURISDICTION. INITIATING SUCH SUIT, ACTION OR PROCEEDING OR TAKING
SUCH ACTION IN ANY OTHER JURISDICTION SHALL IN NO EVENT CONSTITUTE A WAIVER OF
THE AGREEMENT CONTAINED HEREIN THAT THE LAWS OF DISTRICT OF COLUMBIA SHALL
GOVERN THE RIGHTS AND OBLIGATIONS OF BORROWER AND SUN AND LENDER AS PROVIDED
HEREIN OR THE SUBMISSION HEREIN BY BORROWER AND SUN TO PERSONAL JURISDICTION
WITHIN DISTRICT OF COLUMBIA THE BORROWER AND SUN (I) COVENANT AND AGREE NOT TO
ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING UNDER ANY OF THE LOAN
DOCUMENTS TRIABLE BY A JURY AND (II) WAIVES ANY RIGHT TO TRIAL BY JURY TO THE
EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST. THIS WAIVER IS INTENDED
TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO
A JURY TRIAL WOULD OTHERWISE ACCRUE. FURTHER, THE BORROWER AND SUN HEREBY
CERTIFY THAT NO REPRESENTATIVE OR AGENT OF LENDER (INCLUDING, BUT NOT LIMITED
TO, LENDER'S COUNSEL) HAS REPRESENTED, EXPRESSLY OR OTHERWISE, TO THE BORROWER
AND SUN THAT LENDER WILL NOT SEEK TO ENFORCE THE PROVISIONS OF THIS SECTION. THE
FOREGOING PROVISIONS WERE KNOWINGLY, WILLINGLY AND VOLUNTARILY AGREED TO BY
BORROWER AND SUN UPON CONSULTATION WITH INDEPENDENT LEGAL COUNSEL SELECTED BY
BORROWER'S AND SUN'S FREE WILL.

      SECTION 17.07. Severability.

      In the event any provision of this Agreement or in any other Loan Document
shall be held invalid, illegal or unenforceable in any jurisdiction, such
provision will be severable from the remainder hereof as to such jurisdiction
and the validity, legality and enforceability of the remaining provisions will
not in any way be affected or impaired in any jurisdiction.

      SECTION 17.08. Notices.

            (a)   Manner of Giving Notice. Each notice, direction, certificate
or other communication hereunder (in this Section referred to collectively as
"notices" and singly as a "notice") which any party is required or permitted to
give to the other party pursuant to this Agreement shall be in writing and shall
be deemed to have been duly and sufficiently given if:

                  (i)   personally delivered with proof of delivery thereof (any
      notice so delivered shall be deemed to have been received at the time so
      delivered);

                  (ii)  sent by Federal Express (or other similar overnight
      courier) designating morning delivery (any notice so delivered shall be
      deemed to have been received on the Business Day it is delivered by the
      courier);

                  (iii) sent by telecopier or facsimile machine which
      automatically generates a transmission report that states the date and
      time of the transmission, the length of the document transmitted, and the
      telephone number of the recipient's telecopier or facsimile machine (to be
      confirmed with a copy thereof sent in accordance

                                       55

<PAGE>

      with paragraphs (1) or (2) above within two Business Days) (any notice so
      delivered shall be deemed to have been received (i) on the date of
      transmission, if so transmitted before 5:00 p.m. (local time of the
      recipient) on a Business Day, or (ii) on the next Business Day, if so
      transmitted on or after 5:00 p.m. (local time of the recipient) on a
      Business Day or if transmitted on a day other than a Business Day);

addressed to the parties as follows:

      As to Borrower:     Sun Communities, Inc.
                          27777 Franklin Road
                          The American Center, Suite 200
                          Southfield, Michigan 48034
                          Attention: Gary A. Shiffman
                          Telecopy No.: (248) 208-2645

      with a copy to:     Jaffe, Raitt, Heuer & Weiss Professional Corporation
                          Attention: Richard A. Zussman, Esq.
                          (prior to September 1, 2004)
                          One Woodward Avenue
                          Suite 2400
                          Detroit, Michigan  48226
                          Telecopy No.: (313) 961-8358

                          (on or after September 1, 2004)
                          The American Center
                          27777 Franklin Road
                          Suite 2500
                          Southfield, Michigan 48034
                          Telecopy No.: (248) 351-3082

      As to Lender:       ARCS Commercial Mortgage Co., L.P.
                          26901 Agoura Road
                          Suite 200
                          Calabasas Hills, California 91301-9932
                          Attention: Loan Administration Department
                          Telecopy No.: (818) 880-3330

      As to Fannie Mae:   Fannie Mae
                          3939 Wisconsin Avenue, N.W.
                          Washington, D.C. 20016-2899
                          Attention: Vice President for Multifamily Asset
                                     Management
                          Telecopy No.: (202) 752-5016

      with a copy to:     Venable LLP
                          575 7th Street, N.W.
                          Suite 1000

                                       56

<PAGE>

                          Washington, D.C. 20004
                          Attention: Lawrence H. Gesner, Esquire
                          Telecopy No.: (202) 344-8300

            (b)   Change of Notice Address. Any party may, by notice given
pursuant to this Section, change the person or persons and/or address or
addresses, or designate an additional person or persons or an additional address
or addresses, for its notices, but notice of a change of address shall only be
effective upon receipt. Each party agrees that it shall not refuse or reject
delivery of any notice given hereunder, that it shall acknowledge, in writing,
receipt of the same upon request by the other party and that any notice rejected
or refused by it shall be deemed for all purposes of this Agreement to have been
received by the rejecting party on the date so refused or rejected, as
conclusively established by the records of the U.S. Postal Service, the courier
service or facsimile.

      SECTION 17.09. Further Assurances and Corrective Instruments.

            (a)   Further Assurances. To the extent permitted by law, the
parties hereto agree that they shall, from time to time, execute, acknowledge
and deliver, or cause to be executed, acknowledged and delivered, such
supplements hereto and such further instruments as Lender or Borrower may
request and as may be required in the opinion of Lender or its counsel to
effectuate the intention of or facilitate the performance of this Agreement or
any Loan Document.

            (b)   Further Documentation. Without limiting the generality of
subsection (a), in the event any further documentation or information is
required by Lender to correct patent mistakes in the Loan Documents, materials
relating to the Title Insurance Policies or the funding of the Advances,
Borrower shall provide, or cause to be provided to Lender, at their cost and
expense, such documentation or information, so long as the obligations of
Borrower are not materially increased thereby or the rights of Borrower are not
materially decreased thereby. Borrower shall execute and deliver to Lender such
documentation, including any amendments, corrections, deletions or additions to
the Notes, the Security Instruments or the other Loan Documents as is reasonably
required by Lender and at reasonable cost to the Borrower.

            (c)   Compliance with Investor Requirements. Without limiting the
generality of subsection (a), Borrower shall do anything necessary to comply
with the reasonable requirements of Lender to enable Lender to sell the MBS
backed by an Advance.

      SECTION 17.10. Term of this Agreement.

      This Agreement shall continue in effect until the Credit Facility
Termination Date.

      SECTION 17.11. Assignments; Third-Party Rights.

      No Borrower shall assign this Agreement, or delegate any of its
obligations hereunder, without the prior written consent of Lender. Lender may
assign its rights and obligations under this Agreement separately or together,
without Borrower's consent, only to Fannie Mae, but may

                                       57

<PAGE>

not delegate its obligations under this Agreement unless required to do so
pursuant to Section 13.04.

      SECTION 17.12. Headings.

      Article and Section headings used herein are for convenience of reference
only, are not part of this Agreement and are not to affect the construction of,
or to be taken into consideration in interpreting, this Agreement.

      SECTION 17.13. General Interpretive Principles.

      For purposes of this Agreement, except as otherwise expressly provided or
unless the context otherwise requires, (i) the terms defined in Appendix I and
elsewhere in this Agreement have the meanings assigned to them in this Agreement
and include the plural as well as the singular, and the use of any gender herein
shall be deemed to include the other genders; (ii) accounting terms not
otherwise defined herein have the meanings assigned to them in accordance with
GAAP; (iii) references herein to "Articles," "Sections," "subsections,"
"paragraphs" and other subdivisions without reference to a document are to
designated Articles, Sections, subsections, paragraphs and other subdivisions of
this Agreement; (iv) a reference to a subsection without further reference to a
Section is a reference to such subsection as contained in the same Section in
which the reference appears, and this rule shall also apply to paragraphs and
other subdivisions; (v) a reference to an Exhibit or a Schedule without a
further reference to the document to which the Exhibit or Schedule is attached
is a reference to an Exhibit or Schedule to this Agreement; (vi) the words
"herein," "hereof," "hereunder" and other words of similar import refer to this
Agreement as a whole and not to any particular provision; and (vii) the word
"including" means "including, but not limited to."

      SECTION 17.14. Interpretation.

      The parties hereto acknowledge that each party and their respective
counsel have participated in the drafting and revision of this Agreement and the
Loan Documents. Accordingly, the parties agree that any rule of construction
which disfavors the drafting party shall not apply in the interpretation of this
Agreement and the Loan Documents or any amendment or supplement or exhibit
hereto or thereto.

      SECTION 17.15. Standards for Decisions, Etc.

      Unless otherwise provided herein, if Lender's approval is required for any
matter hereunder, such approval may be granted or withheld in Lender's sole and
absolute discretion. Unless otherwise provided herein, if Lender's designation,
determination, selection, estimate, action or decision is required, permitted or
contemplated hereunder, such designation, determination, selection, estimate,
action or decision shall be made in Lender's sole and absolute discretion.
Lender shall not unreasonably withhold, delay or condition any approval or
determination with respect to any matter described in Sections 3.04(e), 3.04(f)
and 17.19.

      SECTION 17.16. Decisions in Writing.

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<PAGE>

      Any approval, designation, determination, selection, action or decision of
Lender or Borrower must be in writing to be effective.

      SECTION 17.17. Requests.

      The Borrower may submit up to a total of six Requests (other than Advance
Requests not related to the addition of Mortgaged Property to the Collateral
Pool, which shall not count as Requests for purposes of the limitation in this
Section 17.17) per Calendar Year.

      SECTION 17.18. Tax Service Contracts.

      The Borrower shall, on the Initial Closing Date, reimburse Lender for the
cost of a tax service contract or contracts. The tax service contract provider
will monitor and confirm the accurate and timely payment of real estate taxes
during the Term of this Agreement.

      SECTION 17.19. Special Provisions Regarding Boulder Ridge.

      Borrower has advised Lender and Lender has hereby acknowledges that a
portion of Tract II of the Mortgaged Property commonly known as Boulder Ridge
(the "BOULDER RIDGE PROPERTY") comprising the developed portion of Tract II is a
separate parcel from the Expansion Property included within the Boulder Ridge
Property. Borrower has advised Lender that to facilitate future development of
the Expansion Property included within the Boulder Ridge Property, it may seek
to combine the Expansion Property included within the Boulder Ridge Property
with the developed portion of the Boulder Ridge Property resulting in all of
Tract II becoming a single parcel. In such event, Lender shall consent to such
replatting or resubdivision, subordinate to its lien on the Boulder Ridge
Property to any easements and other matters caused by such replatting or
resubdivision and execute and deliver all documents required by the applicable
Governmental Authority in connection therewith, upon the satisfaction of each of
the following conditions:

            (i)   Lender shall have reviewed and approved the final form of
resubdivision or replatting of the Boulder Ridge Property and all documents it
is required to execute in connection therewith, and Lender shall have determined
that such resubdivision or replatting or the related documents do not materially
interfere with the continuing operation of the Boulder Ridge Property; and

            (ii)  Borrower shall pay all of Lender's reasonable costs and
expenses, including legal fees and expenses, in connection with the replatting
or resubdivision.

            [THE REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY BLANK]

                                       59

<PAGE>

      IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.

                             BORROWER:

                             SUN SECURED FINANCING LLC, a Michigan
                             limited liability company

                             By: Sun Communities Operating Limited
                                 Partnership, a Michigan limited
                                 partnership, its sole member

                                 By: Sun Communities, Inc., a Maryland
                                     Corporation, its general partner

                                     By: /s/ Jonathan M. Colman
                                         ----------------------
                                         Name: Jonathan M. Colman
                                         Title: Executive Vice President -
                                                Acquisitions

                             ASPEN - FT. COLLINS LIMITED
                             PARTNERSHIP, a Michigan limited partnership

                             By: Sun GP L.L.C., a Michigan limited liability
                                 company, its general partner

                                 By: Sun Communities, Inc., a Maryland
                                     Corporation, its manager

                                     By: /s/ Jonathan M. Colman
                                         ----------------------
                                         Name: Jonathan M. Colman
                                         Title: Executive Vice President -
                                                Acquisitions

                             SUN SECURED FINANCING HOUSTON LIMITED
                             PARTNERSHIP, a Michigan limited partnership

                             By: Sun Secured Financing GP, Inc., a Michigan
                                 corporation, its general partner

                                 By: /s/ Jonathan M. Colman
                                     ----------------------
                                     Name: Jonathan M. Colman
                                     Title: Executive Vice President -
                                            Acquisitions

                                       60

<PAGE>

                             SUN COMMUNITIES FINANCE, LLC, a Michigan
                             limited liability company

                             By: Sun Communities Operating Limited Partnership,
                                 a Michigan limited partnership, its managing
                                 member

                                 By: Sun Communities, Inc., a Maryland
                                     Corporation, its general partner

                                     By: /s/ Jonathan M. Colman
                                         ----------------------
                                         Name: Jonathan M. Colman
                                         Title: Executive Vice President -
                                                Acquisitions

                             SUN HOLLY FOREST LLC, a Michigan limited liability
                             company

                             By: Sun Communities Operating Limited Partnership,
                                 a Michigan limited partnership, its managing
                                 member

                                 By: Sun Communities, Inc., a Maryland
                                     Corporation, its general partner

                                     By: /s/ Jonathan M. Colman
                                         ----------------------
                                         Name: Jonathan M. Colman
                                         Title: Executive Vice President -
                                                Acquisitions

                             SUN SADDLE OAK LLC, a Michigan limited liability
                             company

                             By: Sun Communities Operating Limited Partnership,
                                 a Michigan limited partnership, its managing
                                 member

                                 By: Sun Communities, Inc., a Maryland
                                     Corporation, its general partner

                                     By: /s/ Jonathan M. Colman
                                         ----------------------
                                         Name: Jonathan M. Colman
                                         Title: Executive Vice President -
                                                Acquisitions

                                       61

<PAGE>

                             LENDER

                             ARCS COMMERCIAL  MORTGAGE CO., L.P., a California
                             limited partnership

                             By: ACMC Realty, Inc., a California Corporation,
                                 its General Partner

                                 By: /s/ Timothy L. White
                                     --------------------
                                     Timothy L. White
                                     Chief Operating Officer

                                       62<PAGE>

                                                                  Exhibit 10.9.1

                                   APPENDIX I
                                  DEFINITIONS

For all purposes of the Agreement, the following terms shall have the respective
meanings set forth below:

            "Acquiring Person" means a "person" or "group of persons" within the
      meaning of Sections 13(d) and 14(d) of the Securities Exchange Act of
      1934, as amended.

            "Addition Loan Documents" means the Security Instrument covering an
      Additional Mortgaged Property and any other documents, instruments or
      certificates required by Lender in connection with the addition of the
      Additional Mortgaged Property to the Collateral Pool pursuant to Article
      3.

            "Addition Request" means a written request, substantially in the
      form of Exhibit M to the Agreement, to add Additional Mortgaged Properties
      to the Collateral Pool as set forth in Section 3.02(a).

            "Additional Borrower" means the owner of an Additional Mortgaged
      Property, which entity becomes a Borrower under the Agreement and the
      applicable Loan Documents.

            "Additional Collateral Due Diligence Fees" means the due diligence
      fees paid by Borrower to Lender with respect to each Additional Mortgaged
      Property.

            "Additional Mortgaged Property" means each Manufactured Housing
      Community owned by any Borrower or Additional Borrower (either in fee
      simple or as tenant under a ground lease meeting all of the requirements
      of the DUS Guide) and added to the Collateral Pool after the Initial
      Closing Date pursuant to Article 3.

            "Advance" means a Variable Advance (including a Rollover Variable
      Advance) or a Fixed Advance.

            "Advance Confirmation Instrument" means the written instrument,
      substantially in the form of Exhibit K to the Agreement, issued by
      Borrower to Lender to confirming Borrower's obligation to repay Variable
      Advances pursuant to Section 2.02.

            "Advance Request" means a written request, substantially in the form
      of Exhibit L to the Agreement, for an Advance made pursuant to Section
      2.04.

            "Affiliate" means, as applied to any Person, any other Person
      directly or indirectly controlling, controlled by, or under common control
      with, that Person. For the purposes of this definition, "control"
      (including with correlative meanings, the terms "controlling," "controlled
      by" and "under common control with"), as applied to any Person, means the

                                       1

<PAGE>

      possession, directly or indirectly, of the power to direct or cause the
      direction of the management (other than property management) and policies
      of that Person, whether through the ownership of voting securities,
      partnership interests or by contract or otherwise.

            "Aggregate Debt Service Coverage Ratio" means, for any specified
      date, the ratio (expressed as a percentage) of--

            (a)   the aggregate of the Net Operating Income for the preceding 12
            month period for the Mortgaged Properties

                                       to

            (b)   the Facility Debt Service on the specified date.

            "Aggregate Loan to Value Ratio" means, for any specified date, the
      ratio (expressed as a percentage) of--

            (a)   the Advances Outstanding on the specified date,

                                       to

            (b)   the aggregate of the Valuations most recently obtained prior
                  to the specified date for all of the Mortgaged Properties.

            "Agreement" means the Amended and Restated Master Credit Facility
      Agreement, as it may be amended, supplemented or otherwise modified from
      time to time, including all Recitals, Appendices and Exhibits to the
      Agreement, each of which is hereby incorporated into the Agreement by this
      reference.

            "Allocable Facility Amount" means the portion of the Credit Facility
      allocated to a particular Mortgaged Property by Lender in accordance with
      the Agreement. The Allocable Facility Amount for each Mortgaged Property
      shall equal the then current Aggregate Loan to Value Ratio multiplied by
      the then current Valuation of such Mortgaged Property.

            "Amortization Period" means the period of 30 years.

            "Applicable Law" means (a) all applicable provisions of all
      constitutions, statutes, rules, regulations and orders of all governmental
      bodies, all Governmental Approvals and all orders, judgments and decrees
      of all courts and arbitrators, (b) all zoning, building, environmental and
      other laws, ordinances, rules, regulations and restrictions of any
      Governmental Authority affecting the ownership, management, use,
      operation, maintenance or repair of any Mortgaged Property, including the
      Americans with Disabilities Act (if applicable), the Manufactured Home
      Construction and Safety Standards Act of 1974, the Fair Housing Amendment
      Act of 1988 and Hazardous

                                       2

<PAGE>

      Materials Laws (as defined in the Security Instrument), (c) any building
      permits or any conditions, easements, rights-of-way, covenants,
      restrictions of record or any recorded or unrecorded agreement affecting
      or concerning any Mortgaged Property including planned development
      permits, condominium declarations, and reciprocal easement and regulatory
      agreements with any Governmental Authority, (d) all laws, ordinances,
      rules and regulations, whether in the form of rent control, rent
      stabilization or otherwise, that limit or impose conditions on the amount
      of rent that may be collected from the units of any Mortgaged Property,
      and (e) requirements of insurance companies or similar organizations,
      affecting the operation or use of any Mortgaged Property or the
      consummation of the transactions to be effected by the Agreement or any of
      the other Loan Documents.

            "Appraisal" means an appraisal of a Manufactured Housing Community
      conforming to the requirements of Chapter 5 of Part III of the DUS Guide
      and accepted by Lender.

            "Appraised Value" means the value set forth in an Appraisal.

            "Approved Acquiring Person" means any person, corporation, limited
      partnership, limited liability company, limited liability limited
      partnership, real estate investment trust or any other entity, or the
      beneficial owner(s) of any of the foregoing who (a) has a net worth of at
      least $250,000,000, (b) owns, directly or indirectly, manufactured housing
      communities comprising at least a total of 15,000 manufactured home sites,
      and (c) within the immediately preceding ten (10) year period has not been
      the primary controlling party on a loan acquired in whole or in part by
      Fannie Mae where the borrower (i) has defaulted on the loan or (ii) filed
      a voluntary bankruptcy or (iii) contested a foreclosure or forfeiture
      proceeding initiated by Fannie Mae or (iv) otherwise engaged in
      adversarial litigation with Fannie Mae.

            "Borrower" means, individually and collectively, Sun Secured
      Financing LLC, a Michigan limited liability company, Aspen-Ft. Collins
      Limited Partnership, a Michigan limited partnership, Sun Secured Financing
      Houston Limited Partnership, a Michigan limited partnership, Sun
      Communities Finance, LLC, a Michigan limited liability company, Sun Holly
      Forest LLC, a Michigan limited liability company, Sun Saddle Oak LLC, a
      Michigan limited liability company, and any Additional Borrower becoming a
      party to the Agreement and any other Loan Documents, but excluding any
      party which was a Borrower and any and all Mortgaged Properties owned by
      such Borrower have been released from the Collateral Pool.

            "Business Day" means a day on which Fannie Mae is open for business.

            "Calendar Quarter" means, with respect to any year, any of the
      following three month periods: (a) January-February-March; (b)
      April-May-June; (c) July-August-September; and (d)
      October-November-December.

                                       3

<PAGE>

            "Calendar Year" means the 12-month period from the first day of
      January to and including the last day of December, and each 12-month
      period thereafter.

            "Cap" means an interest rate cap provided pursuant to, and
      satisfying the requirements of, Article 16.

            "Cap Documents" has the meaning set forth in Section 16.02.

            "Cap Interest Rate" has the meaning set forth in Section 16.02.

            "Cap Rate" means, for each Mortgaged Property, a capitalization rate
      reasonably selected by Lender for use in determining the Valuations and
      based on similar criteria as the most recent Appraisal of such Mortgage
      Property as reasonably modified or supplemented by Lender, as disclosed to
      Borrower from time to time. If the Borrower elects to challenge the Cap
      Rate determined by Lender for any Mortgaged Property, the Borrower shall
      notify Lender of such challenge in writing not more than five (5) Business
      Days after Borrower is informed of the Cap Rate by Lender. Promptly upon
      receipt of notice of such challenge, Lender shall order a study of
      capitalization rates applicable to the relevant Mortgaged Property by an
      appraiser reasonably acceptable to Lender (a "Cap Rate Study"). If the
      Borrower and Lender accept the results of the Cap Rate Study, the
      capitalization rate recommended by the Cap Rate Study shall be the Cap
      Rate applicable to such Mortgaged Property until the next Valuation of
      such Mortgaged Property. If either the Borrower or Lender does not accept
      the Cap Rate Study, the objecting party shall notify the other party
      within five (5) Business Days, whereupon the Lender shall promptly order
      two additional Cap Rate Studies. The Cap Rate shall be the average
      capitalization rate set forth in the two additional Cap Rate Studies. The
      Borrower shall pay the cost of all Cap Rate Studies.

            "Cap Security Agreement" means, with respect to a Cap, the Interest
      Rate Cap Security, Pledge and Assignment Agreement between the Borrower
      and the Lender, for the benefit of Lender, in the form attached as Exhibit
      S to this Agreement as such agreement may be amended, modified,
      supplemented or restated from time to time.

            "Cash Equivalents" means:

            (a)   securities issued or fully guaranteed or insured by the United
                  States Government or any agency thereof and backed by the full
                  faith and credit of the United States having maturities of not
                  more than twelve (12) months from the date of acquisition.

            (b)   certificates of deposit, time deposits, demand deposits,
                  eurodollar time deposits, repurchase agreements, reverse
                  repurchase agreements, or bankers' acceptances, having in each
                  case a term of not more than twelve (12) months, issued by any
                  commercial bank having membership in the FDIC, or by any U.S.
                  commercial lender (or any branch or agency of a non-U.S. bank
                  licensed to conduct business in the U.S.) having combined

                                       4

<PAGE>

                  capital and surplus of not less than $100,000,000 whose
                  short-term securities are rated at least A-1 by Standard &
                  Poor's Corporation or P-1 by Moody's Investors Service, Inc.;
                  and

            (c)   commercial paper of an issuer rated at least A-1 by Standard &
                  Poor's Corporation or P-1 by Moody's Investors Service, Inc.
                  and in either case having a term of not more than twelve (12)
                  months.

            "Change of Control" means the earliest to occur of: (a) the date on
      which Sun or the OP ceases for any reason whatsoever to be the sole
      general partner or managing member of any Borrower, either directly or
      indirectly as the sole general partner or managing member of one or more
      Affiliates who are members or partners of any Borrower, unless the
      successor to Sun or the OP is an Approved Acquiring Person or an Affiliate
      thereof, or (b) the date on which Sun or the OP, or any combination
      thereof, shall cease for any reason to be the holder, directly or
      indirectly, of at least 51% of the voting interest of any Borrower or to
      own, directly or indirectly, at least 40% of the equity, profits or other
      limited partnership interests or membership interests in, or Voting Equity
      Capital (or any other Securities or ownership interests) of any Borrower,
      unless in either case the successor to Sun or the OP is an Approved
      Acquiring Person (other than an Approved Acquiring Person or an Affiliate
      thereof), or (c) the date on which an Acquiring Person (other than an
      Approved Acquiring Person or an Affiliate thereof) becomes (by
      acquisition, consolidation or merger), directly or indirectly, the
      beneficial owner of more than 49% of the total Voting Equity Capital (or
      of any other Securities or ownership interest) of any Borrower, Sun or the
      OP then outstanding.

            "Chief Financial Officer" means the chief financial officer of Sun
      or any other person with responsibility for any of the functions typically
      performed in a corporation by the chief financial officer.

            "Closing Date" means the Initial Closing Date and each date after
      the Initial Closing Date on which the funding or other transaction
      requested in a Request is required to take place.

            "Collateral" means the Mortgaged Properties and other collateral
      from time to time or at any time encumbered by the Security Instruments,
      or any other property securing Borrower's obligations under the Loan
      Documents.

            "Collateral Pool" means all of the Collateral.

            "Commitment" means, at any time, the sum of the Fixed Facility
      Commitment and the Variable Facility Commitment.

            "Commitment Amount" means the lesser of (a) the amount that would
      result in an Aggregate Loan to Value Ratio of 75%, or (b) the amount that
      would result in (i) an Aggregate Debt Service Coverage Ratio of 1.0 for
      the portion of the Commitment that will be the Variable Facility
      Commitment (using a prorated portion of the Net Operating

                                       5

<PAGE>

      Income and using the Facility Debt Service for only the Variable Facility
      Commitment in making such determination of Debt Service Coverage Ratio),
      provided that such amount shall not exceed 103% of the amount that would
      result using the calculation set forth in (ii) below, and (ii) an
      Aggregate Debt Service Coverage Ratio of 1.30 for the portion of the
      Commitment that will be the Fixed Facility Commitment (using a prorated
      portion of the Net Operating Income and using the Facility Debt Service
      for only the Fixed Facility Commitment in making such determination of
      Aggregate Debt Service Coverage Ratio).

            "Complete Fixed Facility Termination" shall have the meaning set
      forth in Section 5.02(a).

            "Complete Variable Facility Termination" shall have the meaning set
      forth in Section 5.02(a).

            "Compliance Certificate" means a certificate of Borrower
      substantially in the form of Exhibit F to the Agreement.

            "Consolidated EBITDA" means, for any period, and without double
      counting any item, the EBITDA for Sun and its Subsidiaries for such period
      on a consolidated basis.

            "Consolidated EBITDA to Interest Ratio" means, for any period of
      determination, the ratio (expressed as a percentage) of--

            (a)   the excess of--

                        (i)   the Consolidated EBITDA for the period, less

                        (ii)  the Imputed Capital Expenditures for the period;

                                       to

            (b)   the Consolidated Interest Expense for the period.

            "Consolidated Interest Expense" means, for any period of
      determination, and without double counting any item, the sum of the
      Interest Expense for Sun for such period on a consolidated basis.

            "Conversion Amendment" means the Master Credit Facility Conversion
      Amendment, substantially in the form of Exhibit I to the Agreement,
      reflecting the conversion of all or any portion of the Variable Facility
      Commitment to the Fixed Facility Commitment as set forth in Section
      1.08(b).

            "Conversion Documents" means the Conversion Amendment, together with
      an amendment to each Security Document and other applicable Loan
      Documents, in form and substance reasonably satisfactory to Lender,
      reflecting the change in the Fixed Facility Commitment and the Variable
      Facility Commitment pursuant to Section 1.08.

                                       6

<PAGE>

            "Conversion Request" means a written request, substantially in the
      form of Exhibit H to the Agreement, to convert all or any portion of the
      Variable Facility Commitment to the Fixed Facility Commitment pursuant to
      Section 1.08.

            "Coupon Rate" means, with respect to a Variable Advance, the imputed
      interest rate determined by Lender pursuant to Section 1.05(a) and, with
      respect to a Fixed Advance, the interest rate determined by Lender
      pursuant to Section 1.05(b).

            "Coverage and LTV Tests" mean, for any specified date, each of the
      following financial tests:

                  (a)   The Aggregate Debt Service Coverage Ratio is not less
      than 1.30:1.0.

                  (b)   The Aggregate Loan to Value Ratio does not exceed 75%.

            "Credit Facility" means the Fixed Facility and the Variable
      Facility.

            "Credit Facility Termination Documents" means the instruments
      releasing the Security Instruments as lien on the Mortgaged Properties,
      UCC-3 Termination Statements terminating the UCC-1 Financing Statements on
      the Mortgaged Properties, and such other documents and instruments
      necessary to evidence the release of the Collateral from any lien securing
      the Obligations, and the Notes, all in connection with the termination of
      the Agreement and the Credit Facility pursuant to Article 5.

            "Credit Facility Termination Request" means a written request,
      substantially in the form of Exhibit R to the Agreement, to terminate the
      Agreement and the Credit Facility pursuant to Section 5.04(a).

            "Debt Service Coverage Ratio" means -

            (a)   For any Mortgaged Property, for any specified date, the ratio
                  (expressed as a percentage) of --

                  (i)   the aggregate of the Net Operating Income for the
                        preceding 12 month period for the subject Mortgaged
                        Property

                                       to

                  (ii)  the Facility Debt Service on the specified date,
                        assuming, for the purpose of calculating the Facility
                        Debt Service for this definition, that Advances
                        Outstanding shall be the Allocable Facility Amount for
                        the subject Mortgaged Property.

            (b)   For purposes of determining the Commitment Amount, the ratio
                  (expressed in decimal form) of --

                                       7

<PAGE>

                  (i)   the applicable portion of Net Operating Income for the
                        preceding 12 month period

                                       to

                  (ii)  the applicable Facility Debt Service, as described in
                        the definition of Commitment Amount.

            "Discount" means, with respect to any Variable Advance, an amount
      equal to the excess of --

            (i)   the face amount of the MBS backed by the Variable Advance,
                  over

            (ii)  the Price of the MBS backed by the Variable Advance.

            "DUS Guide" means the Fannie Mae Multifamily Delegated Underwriting
      and Servicing (DUS) Guide, as such Guide may be amended from time to time,
      including exhibits to the DUS Guide and amendments in the form of Lender
      Memos, Guide Updates and Guide Announcements (and, if such Guide is no
      longer used by Fannie Mae, the term "DUS Guide" as used in the Agreement
      means the Fannie Mae Multifamily Negotiated Transactions (NT) Guide, as
      such Guide may be amended from time to time, including amendments in the
      form of Lender Memos, Guide Updates and Guide Announcements). All
      references to specific articles and sections of, and exhibits to, the DUS
      Guide shall be deemed references to such articles, sections and exhibits
      as they may be amended, modified, updated, superseded, supplemented or
      replaced from time to time.

            "DUS Guide Underwriting Requirements" means the overall underwriting
      requirements for Manufactured Housing Communities as set forth in the DUS
      Guide.

            "EBITDA" means, for any period, the sum determined in accordance
      with GAAP, of the following, for any Person on a consolidated basis--

            (a)   the net income (or net loss) of such Person during such
      Period;

            (b)   all amounts treated as expenses for real estate depreciation,
      Interest Expense and the amortization of intangibles of any kind to the
      extent included in the determination of such net income (or loss); and

            (c)   all accrued taxes on or measured by income to the extent
      included in the determination of such net income (or loss);

            provided, however, that net income (or loss) shall be computed for
      these purposes without giving effect to extraordinary losses or
      extraordinary gains.

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

                                       8

<PAGE>

            "Event of Default" means any event defined to be an "Event of
      Default" under Article 11.

            "Expansion" means an increase in the Commitment made in accordance
      with Article 4.

            "Expansion Loan Documents" means amendments to the Variable Facility
      Note or the Fixed Facility Notes, as the case may be, increasing the
      amount of such Note to the amount of the Commitment, as expanded in
      accordance with Article 4 and amendments to the Security Instruments,
      increasing the amount secured by such Security Instruments to the amount
      of the Commitment.

            "Expansion Request" means a written request, substantially in the
      form of Exhibit O to the Agreement, to obtain an Expansion pursuant to
      Section 4.02.

            "Facility Debt Service" means -

            (a)   For use in determining the Commitment Amount on the Initial
                  Closing Date, the sum of the amount of interest and principal
                  amortization that would be payable during the 12 month period
                  immediately succeeding the Initial Closing Date, with respect
                  to the full amount of the initial Commitment, except that, for
                  these purposes:

                  (i)   the initial amount of the Variable Facility Commitment
                        shall be deemed to require level monthly payments of
                        principal and interest (at an interest rate equal to (A)
                        the Three Month LIBOR rate plus (B) the Variable
                        Facility Fee plus (C) 300 basis points) in an amount
                        necessary to fully amortize the original principal
                        amount of the Variable Facility Commitment over the
                        Amortization Period, with such amortization deemed to
                        commence on the first day of the 12 month period; and

                  (ii)  the initial amount of the Fixed Facility Commitment
                        shall be deemed to require level monthly payments of
                        principal and interest (at an interest rate equal to (A)
                        the base United States Treasury Index Rate for
                        securities having a maturity substantially similar to
                        the maturity of the Fixed Advance plus (B) the
                        anticipated investor spread (as determined by the
                        Lender) for Fixed Advances having similar
                        characteristics as the Fixed Advance to be made in
                        connection with the Fixed Facility Commitment plus (C)
                        the Fixed Facility Fee) in an amount necessary to fully
                        amortize the original principal amount of the Fixed
                        Facility Commitment over the Amortization Period, with
                        such amortization to commence on the first day of the 12
                        month period.

                                       9

<PAGE>

                        The interest rates described in this clause (a)
                        determined as of the Initial Closing Date are
                        hereinafter referred to as the "Underwriting Rates."

            (b)   For use in determining the additional borrowing capacity
                  created by the addition of Additional Mortgaged Properties and
                  the amount of any Future Advance made pursuant to Section
                  2.06, the sum of:

                  (i)   the amount of interest and principal amortization,
                        during the 12 month period immediately succeeding the
                        specified date, with respect to the Advances Outstanding
                        on the specified date and Advances to be obtained
                        relating to the Additional Mortgaged Properties, except
                        that, for these purposes:

                        (A)   each Variable Advance Outstanding or to be
                              obtained relating to the Additional Mortgaged
                              Properties shall be deemed to require level
                              monthly payments of principal and interest at a
                              rate equal to the rate that would apply to such
                              Variable Advance if the Underwriting Rates were
                              being determined on the date of calculation, in an
                              amount necessary to fully amortize the original
                              principal amount of the Variable Advance over the
                              Amortization Period, with such amortization deemed
                              to commence on the first day of the 12 month
                              period; and

                        (B)   each Fixed Advance Outstanding shall require level
                              monthly payments of principal and interest (at the
                              Coupon Rate for the Fixed Advance) in an amount
                              necessary to fully amortize the original principal
                              amount of the Fixed Advance over the Amortization
                              Period, with such amortization to commence on the
                              first day of the 12 month period; and

                        (C)   each Fixed Advance to be obtained shall be deemed
                              to require level monthly payments of principal and
                              interest at a rate equal to the estimated Coupon
                              Rate for such Fixed Advance in an amount necessary
                              to fully amortize the original principal amount of
                              such Fixed Advance over the Amortization Period,
                              with such amortization deemed to commence on the
                              first day of the 12 month period; and

                  (ii)  the amount of the Standby Fees, if any, payable to
                        Lender pursuant to Section 10.01 during such 12 month
                        period (assuming, for these purposes, that the Advances
                        Outstanding throughout the 12 month

                                       10

<PAGE>

                        period are always equal to the amount of Advances
                        Outstanding on the specified date).

            (c)   For use in determining the Aggregate Debt Service Coverage
                  Ratio for purposes of determining Release Prices pursuant to
                  Section 3.04(c) of the Agreement, for purposes of determining
                  compliance with the Coverage and LTV Tests, and for other
                  ongoing monitoring purposes, as of any specified date, the sum
                  of:

                  (i)   the amount of interest and principal amortization,
                        during the 12 month period immediately succeeding the
                        specified date, with respect to the Advances Outstanding
                        on the specified date, except that, for these purposes:

                        (A)   each Variable Advance shall be deemed to require
                              level monthly payments of principal and interest
                              (at the Coupon Rate for such Variable Advance) in
                              an amount necessary to fully amortize the original
                              principal amount of the Variable Advance over the
                              Amortization Period, with such amortization deemed
                              to commence on the first day of the 12 month
                              period; and

                        (B)   each Fixed Advance shall require level monthly
                              payments of principal and interest (at the Coupon
                              Rate for such Fixed Advance) in an amount
                              necessary to fully amortize the original principal
                              amount of the Fixed Advance over the Amortization
                              Period, with such amortization to commence on the
                              first day of the 12 month period; and

                  (ii)  the amount of the Standby Fees, if any, payable to
                        Lender pursuant to Section 10.01 during such 12 month
                        period (assuming, for these purposes, that the Advances
                        Outstanding throughout the 12 month period are always
                        equal to the amount of Advances Outstanding on the
                        specified date).

            "Facility Termination Document" means the Amendment of the Master
      Credit Facility Agreement, substantially in the form of Exhibit Q to the
      Agreement, evidencing the permanent reduction in the Facility Commitment
      pursuant to Section 5.02.

            "Facility Termination Fee" means, with respect to a reduction in the
      Variable Facility Commitment pursuant to Article 5 (other than in
      connection with the conversion of a Variable Advance to a Fixed Advance or
      as otherwise provided in the Loan Documents), the sum of an amount equal
      to the product obtained by multiplying

                  (1)   the reduction in the Variable Facility Commitment, by

                                       11

<PAGE>

                  (2)   the Variable Facility Fee, by

                  (3)   the present value factor calculated using the following
                        formula:

                                1 - (1 + r)(-n)/r

                  [r = Yield Rate

                  n = the number of years and any fraction thereof remaining
                      between the Closing Date for the reduction in the
                      Commitment and the date six (6) months prior to the
                      Variable Facility Termination Date]

      The "Yield Rate" means the rate, determined as of the Initial Closing
      Date, on the U.S. Treasury security having a maturity closest to the
      Variable Facility Termination Date.

            "Facility Termination Request" means a written request,
      substantially in the form of Exhibit P to the Agreement, for a permanent
      reduction in the Variable Facility Commitment or the Fixed Facility
      Commitment pursuant to Section 5.02.

            "Fannie Mae" means the federally-chartered and stockholder-owned
      corporation organized and existing under the Federal National Mortgage
      Association Charter Act, 12 U.S.C. Section 1716 et seq.

            "Fees" means Additional Collateral Due Diligence Fee, Facility
      Termination Fee, Fixed Facility Fee, Rate Preservation Fee, Standby Fee,
      Substitution Fee, Variable Facility Fee any and all other fees specified
      in the Agreement.

            "Final Loss" shall mean, with respect to any Mortgaged Property, the
      positive difference, if any, between (A) the Obligations unpaid at the
      time of calculation and (B) the sum of the amounts realized from the sale
      of the applicable REO Property or the value of the REO Property determined
      as set forth below, together with Net Operating Income from the time the
      applicable property becomes an REO property, as of the Final Loss Date.

            "Final Loss Date" shall mean, with respect to any Mortgaged
      Property, the later of the date the REO Property was sold to an unrelated
      third party or, if the REO Property has not been sold for a period of
      twelve (12) months following the date it became an REO Property, the value
      of the REO Property determined as provided in the definition of REO
      Property.

            "First Anniversary" means the date that is one year after the
      Initial Closing Date.

            "Fixed Advance" means a loan made by Lender to Borrower under the
      Fixed Facility Commitment.

                                       12

<PAGE>

            "Fixed Facility" means the agreement of Lender to make Fixed
      Advances to Borrower pursuant to Section 1.01.

            "Fixed Facility Availability Period" means the period beginning on
      the Initial Closing Date and ending on the date 10 years after the Initial
      Closing Date.

            "Fixed Facility Commitment" means $177,362,500, plus such amount as
      Borrower may elect to add to the Fixed Facility Commitment in accordance
      with Section 1.08 and Article 4.

            "Fixed Facility Fee" means (i) 48 basis points for a Fixed Advance
      drawn from the Fixed Facility Commitment in effect during the period
      ending on the First Anniversary (whenever such Fixed Advance is made) and
      (ii) for any Fixed Advance drawn from any portion of the Fixed Facility
      Commitment (excluding the Reserved Amount), increased under Article 4 or
      converted under Section 1.08 from any portion of the Variable Commitment
      after the period ending on the First Anniversary, the number of basis
      points determined at the time of such increase by Lender as the Fixed
      Facility Fee for such Fixed Advances (which shall be based on the amount
      then being charged by Lender to other borrowers of comparable financial
      condition as Borrower (taking into account the financial condition of Sun
      to the extent and in a similar manner as the financial condition of Sun
      was taken into account in the original underwriting of the Credit
      Facility) on credit facilities secured by manufactured housing properties
      having similar characteristics regarding leverage, geographic diversity,
      recourse and other material terms as reasonably determined by Lender). In
      the event the Rate Preservation Fee is being paid, there shall be no
      change in the Fixed Facility Fee with respect to the portion of the Fixed
      Facility Commitment on which the Rate Preservation Fee is being paid.

            "Fixed Facility Note" means a promissory note, in the form attached
      as Exhibit B-1 or B-2, as applicable, to the Agreement, which will be
      issued by Borrower to Lender, concurrently with the funding of each Fixed
      Advance, to evidence Borrower's obligation to repay the Fixed Advance.

            "Fixed Facility Termination Date" means the date 15 years after the
      Initial Closing Date.

            "Future Advance" means an Advance made after the Initial Closing
      Date.

            "GAAP" means generally accepted accounting principles in the United
      States in effect from time to time, consistently applied.

            "General Conditions" shall have the meaning set forth in Article 6.

            "Geographical Diversification Requirements" means a requirement that
      the Collateral Pool consist of not less than five (5) Mortgaged Properties
      located in at least three (3) states and, upon any increase in the
      Commitment pursuant to Article 4 of the

                                       13

<PAGE>

      Agreement, such requirements as to the geographical diversification of the
      Collateral Pool as the Lender may determine at the time of such increase.

            "Governmental Approval" means an authorization, permit, consent,
      approval, license, registration or exemption from registration or filing
      with, or report to, any Governmental Authority.

            "Governmental Authority" means any court, board, agency, commission,
      office or authority of any nature whatsoever for any governmental unit
      (federal, state, county, district, municipal, city or otherwise) whether
      now or hereafter in existence.

            "Gross Revenues" means, for any specified period, with respect to
      any Manufactured Housing Community, all income (including, without
      limitation, community fees) in respect of such Manufactured Housing
      Community as reflected on the certified operating statement for such
      specified period as adjusted to exclude unusual income (e.g. temporary or
      nonrecurring income), income not allowed under the DUS Guide as shown in
      Section 403.02 of Part III (e.g. interest income, furniture income, etc.),
      and the value of any unreflected concessions. Any type of income included
      in Gross Revenues at the time of the initial underwriting of any Mortgaged
      Property shall continue to be included in the calculation of Gross
      Revenues thereafter.

            "Guaranty" means that certain Guaranty to be executed by Sun in the
      form of Exhibit E to this Agreement.

            "Hazardous Materials", with respect to any Mortgaged Property, shall
      have the meaning given that term in the Security Instrument encumbering
      the Mortgaged Property.

            "Hazardous Materials Law", with respect to any Mortgaged Property,
      shall have the meaning given that term in the Security Instrument
      encumbering the Mortgaged Property.

            "Hazardous Substance Activity" means any storage, holding,
      existence, release, spill, leaking, pumping, pouring, injection, escaping,
      deposit, disposal, dispersal, leaching, migration, use, treatment,
      emission, discharge, generation, processing, abatement, removal,
      disposition, handling or transportation of any Hazardous Materials from,
      under, into or on any Mortgaged Property in violation of Hazardous
      Materials Laws, including the discharge of any Hazardous Materials
      emanating from any Mortgaged Property in violation of Hazardous Materials
      Laws through the air, soil, surface water, groundwater or property and
      also including the abandonment or disposal of any barrels, containers and
      other receptacles containing any Hazardous Materials from or on any
      Mortgaged Property in violation of Hazardous Materials Laws, in each case
      whether sudden or nonsudden, accidental or nonaccidental.

            "Impositions" means, with respect to any Mortgaged Property, all (1)
      water and sewer charges which, if not paid, may result in a lien on all or
      any part of the Mortgaged Property, (2) premiums for fire and other hazard
      insurance, rent loss insurance and such

                                       14

<PAGE>

      other insurance as Lender may require under any Security Instrument, (3)
      Taxes, and (4) amounts for other charges and expenses which Lender at any
      time reasonably deems necessary to protect the Mortgaged Property, to
      prevent the imposition of liens on the Mortgaged Property, or otherwise to
      protect Lender's interests.

            "Imputed Capital Expenditures" means, for any four (4) consecutive
      quarters, an amount equal to the average number of manufactured housing
      sites owned by Sun during such period multiplied by Seventy-Five Dollars
      ($75.00) per manufactured housing site, and for any period of less than
      four (4) consecutive quarters, an appropriate proration of such figure.

            "Indebtedness" means, with respect to any Person, as of any
      specified date, without duplication, all:

                  (a) indebtedness of such Person for borrowed money or for the
      deferred purchase price of property or services (other than (i) current
      trade liabilities incurred in the ordinary course of business and payable
      in accordance with customary practices, and (ii) for construction of
      improvements to property, if such Person has a non-contingent contract to
      purchase such property, and (iii) for the purchase of manufactured homes,
      in which case such Indebtedness may be secured by such homes);

                  (b) other indebtedness of such Person which is evidenced by a
      note, bond, debenture or similar instrument;

                  (c) obligations of such Person under any lease of property,
      real or personal, the obligations of the lessee in respect of which are
      required by GAAP to be capitalized on a balance sheet of the lessee or to
      be otherwise disclosed as such in a note to such balance sheet;

                  (d) obligations of such Person in respect of acceptances (as
      defined in Article 3 of the Uniform Commercial Code of the District of
      Columbia) issued or created for the account of such Person;

                  (e) liabilities secured by any Lien on any property owned by
      such Person even though such Person has not assumed or otherwise become
      liable for the payment of such liabilities; and

                  (f) as to any Person ("guaranteeing person"), any obligation
      of (a) the guaranteeing person or (b) another Person (including any bank
      under any letter of credit) to induce the creation of a primary obligation
      (as defined below) with respect to which the guaranteeing person has
      issued a reimbursement, counterindemnity or similar obligation, in either
      case guaranteeing, or in effect guaranteeing, any indebtedness, lease,
      dividend or other obligation ("primary obligations") of any third person
      ("primary obligor") in any manner, whether directly or indirectly,
      including any obligation of the guaranteeing person, whether or not
      contingent, to (1) purchase any such primary obligation or any property
      constituting direct or indirect security therefor, (2) advance or

                                       15

<PAGE>

      supply funds for the purchase or payment of any such primary obligation or
      to maintain working capital or equity capital of the primary obligor or
      otherwise to maintain the net worth or solvency of the primary obligor,
      (3) purchase property, securities or services primarily for the purpose of
      assuring the owner of any such primary obligation of the ability of the
      primary obligor to make payment of such primary obligation, or (4)
      otherwise assure or hold harmless the owner of any such primary obligation
      against loss in respect of the primary obligation, provided, however, that
      the term "Contingent Obligation" shall not include endorsements of
      instruments for deposit or collection in the ordinary course of business.
      The amount of any Contingent Obligation of any guaranteeing person shall
      be deemed to be the lesser of (i) an amount equal to the stated or
      determinable amount of the primary obligation in respect of which such
      Contingent Obligation is made and (ii) the maximum amount for which such
      guaranteeing person may be liable pursuant to the terms of the instrument
      embodying such Contingent Obligation, unless such primary obligation and
      the maximum amount for which such guaranteeing person may be liable are
      not stated or determinable, in which case the amount of such Contingent
      Obligation shall be such guaranteeing person's maximum reasonably
      anticipated liability in respect thereof as determined by Owner in good
      faith.

            "Initial Advance" means the Variable Advance Outstanding on the
      Initial Closing Date in the amount of $152,637,500 and the Fixed Advance
      Outstanding on the Initial Closing Date in the amount of $177,362,500.

            "Initial Closing Date" means the date of the Agreement.

            "Initial Mortgaged Properties" means the Manufactured Housing
      Communities described on Exhibit A to the Agreement and which represent
      the Manufactured Housing Communities which are made part of the Collateral
      Pool on the Initial Closing Date.

            "Initial Origination Fee" shall have the meaning set forth in
      Section 1.02(a).

            "Initial Security Instruments" means the Security Instruments
      covering the Initial Mortgaged Properties.

            "Initial Valuation" means, when used with reference to specified
      Collateral, the Valuation initially performed for the Collateral as of the
      date on which the Collateral was added to the Collateral Pool. The Initial
      Valuation for each of the Initial Mortgaged Properties is as set forth in
      Exhibit A to the Agreement.

            "Insurance Policy" means, with respect to a Mortgaged Property, the
      insurance coverage and insurance certificates evidencing such insurance
      required to be maintained pursuant to the Security Instrument encumbering
      the Mortgaged Property.

            "Interest Expense" means, for any period, the sum of--

                                       16

<PAGE>

            (a)   gross interest expense for the period (including all
      commissions, discounts, fees and other charges in connection with standby
      letters of credit and similar instruments) for Sun; and

            (b)   the portion of the up-front costs and expenses for Rate
      Contracts entered into by Sun (to the extent not included in gross
      interest expense) fairly allocated to such Rate Contracts as expenses for
      such period, reduced by interest income earned on Rate Contracts not
      otherwise accounted for, as determined in accordance with GAAP;

            (c)   provided, that, all interest expense accrued by Sun during
      such period, even if not payable on or before the Termination Date, shall
      be included within "Interest Expense."

            "Internal Revenue Code" means the Internal Revenue Code of 1986, as
      amended. Each reference to the Internal Revenue Code shall be deemed to
      include (a) any successor internal revenue law and (b) the applicable
      regulations whether final, temporary or proposed.

            "Lease" means any lease, any sublease or subsublease, license,
      concession or other agreement (whether written or oral and whether now or
      hereafter in effect) pursuant to which any Person is granted a possessory
      interest in, or right to use or occupy all or any portion of any space in
      any Mortgaged Property, and every modification, amendment or other
      agreement relating to such lease, sublease, subsublease or other agreement
      entered into in connection with such lease, sublease, subsublease or other
      agreement, and every guarantee of the performance and observance of the
      covenants, conditions and agreements to be performed and observed by the
      other party thereto.

            "Lender" shall have the meaning set forth in the first paragraph of
      the Agreement, but shall refer to any replacement Lender if the initial
      Lender is replaced pursuant to the terms of Section 13.04.

            "Lien" means any mortgage, deed of trust, deed to secure debt,
      security interest or other lien or encumbrance (including both consensual
      and non-consensual liens and encumbrances).

            "Liquidity" means, at any time, the amount of cash and Cash
      Equivalents owned by a Person.

            "Loan Documents" means the Agreement, the Notes, the Guaranty, the
      Advance Confirmation Instruments, the Security Documents, all documents
      executed by the Borrower or Sun pursuant to the General Conditions set
      forth in Article 6 of the Agreement and any other documents executed by
      the Borrower, Sun or the OP from time to time in connection with the
      Agreement or the transactions contemplated by the Agreement.

                                       17

<PAGE>

            "Loan to Value Ratio " means, for a Mortgaged Property, for any
      specified date, the ratio (expressed as a percentage) of --

            (a)   the Allocable Facility Amount of the subject Mortgaged
            Property on the specified date,

                                       to

            (b)   the Valuation most recently obtained prior to the specified
            date for the subject Mortgaged Property.

            "Loan Year" means the 12-month (plus any partial month) period from
      the first day of the first calendar month after the Initial Closing Date
      to and including the last day of the twelfth calendar month after the
      first anniversary of the Initial Closing Date, and each 12-month period
      thereafter.

            "Manufactured Housing Community" means a residential development
      consisting of sites for manufactured homes, related amenities, utility
      services, landscaping, roads and other infrastructure.

            "Material Adverse Effect" means, with respect to any circumstance,
      act, condition or event of whatever nature (including any adverse written
      determination in any litigation, arbitration, or governmental
      investigation or proceeding), whether singly or in conjunction with any
      other event or events, act or acts, condition or conditions, or
      circumstance or circumstances, whether or not related, a material adverse
      change in or a materially adverse effect upon any of (a) the business,
      operations, property or condition (financial or otherwise) of the Borrower
      or Sun, (b) the present or future ability of the Borrower or Sun to
      perform the Obligations for which it is liable, (c) the validity,
      priority, perfection or enforceability of the Agreement or any other Loan
      Document or the rights or remedies of Lender under any Loan Document, or
      (d) the value of, or Lender's ability to have recourse against, any
      Mortgaged Property.

            "MBS" means a mortgage-backed security issued by Fannie Mae which is
      "backed" by an Advance and has an interest in the Notes and the Collateral
      Pool securing the Notes, which interest permits the holder of the MBS to
      participate in the Notes and the Collateral Pool to the extent of such
      Advance.

            "MBS Imputed Interest Rate" shall have the meaning set forth in
      Section 1.05(a).

            "MBS Issue Date" means the date on which an MBS is issued by Fannie
      Mae.

            "MBS Delivery Date" means the date on which an MBS is delivered by
      Fannie Mae.

            "Mortgaged Property and Mortgaged Properties" means, individually
      and collectively, the Additional Mortgaged Properties, the Substitute
      Mortgaged Properties

                                       18

<PAGE>

      and the Initial Mortgaged Properties, but excluding each Release Property
      from and after the date of its release from the Collateral Pool.

            "Net Operating Income" means, for any specified period, with respect
      to any Mortgaged Property, the Gross Revenues during such period less the
      aggregate Operating Expenses during such period. If a Mortgaged Property
      is not in the Collateral Pool for the entire specified period, the Net
      Operating Income for the Mortgaged Property for the time within the
      specified period during which the Mortgaged Property was in the Collateral
      Pool shall be the Mortgaged Property's actual Gross Revenues for each full
      Calendar Quarter the Mortgaged Property was part of the Collateral Pool
      and the Mortgaged Property's pro forma net operating income determined by
      Lender in accordance with the underwriting procedures set forth in Chapter
      4 of Part III of the DUS Guide (Determination of Loan Amount) as modified
      by Section 2 of Lender Memorandum 2001-02 issued by Fannie Mae relating to
      manufactured housing for each full Calendar Quarter during the specified
      period that the Mortgaged Property was not part of the Collateral Pool.

            "Net Worth" means, as of any specified date, for any Person, the
      excess of the Person's assets over the Person's liabilities, determined in
      accordance with GAAP, on a consolidated basis, provided that all real
      property shall be valued on an undepreciated basis.

            "Note" means any Fixed Facility Note or the Variable Facility Note.

            "Obligations" means the aggregate of the obligations of Borrower and
      Sun under the Agreement and the other Loan Documents.

            "OP" means Sun Communities Operating Limited Partnership, a Michigan
      limited partnership.

            "Operating Expenses" means, for any period, with respect to any
      Manufactured Housing Community, all expenses in respect of the
      Manufactured Housing Community, as determined by Lender in accordance with
      the DUS Guide based on the certified operating statement for such
      specified period as adjusted to provide for the following: (i) all
      appropriate types of expenses, including a management fee of 4% or such
      other amount as Lender may reasonably determine as prevailing at the time
      of calculation in the market in which the Manufactured Housing Commitment
      is located and deposits to the Replacement Reserves (whether funded or
      not), are included in the total operating expense figure; (ii) upward
      adjustments to individual line item expenses to reflect market norms or
      actual costs and correct any unusually low expense items, which could not
      be replicated by a different owner or manager (e.g., a market rate
      management fee will be included regardless of whether or not a management
      fee is charged, market rate payroll will be included regardless of whether
      shared payroll provides for economies, etc.); and (iii) downward
      adjustments to individual line item expenses to reflect unique or aberrant
      costs (e.g., non-recurring capital costs, non-operating borrower expenses,
      etc.).

                                       19

<PAGE>

            "Organizational Certificate" means, collectively, certificates from
      Borrower and Sun to Lender, in the form of Exhibits G-1 and G-2 to the
      Agreement, certifying as to certain organizational matters with respect to
      Borrower and Sun.

            "Organizational Documents" means all certificates, instruments and
      other documents pursuant to which an organization is organized or
      operates, including but not limited to, (i) with respect to a corporation,
      its articles of incorporation and bylaws, (ii) with respect to a limited
      partnership, its limited partnership certificate and partnership
      agreement, (iii) with respect to a general partnership or joint venture,
      its partnership or joint venture agreement and (iv) with respect to a
      limited liability company, its articles of organization and operating
      agreement.

            "Original Variable Advance" means the Variable Advance made pursuant
      to the Original Agreement having an Outstanding principal balance of
      $75,000,000 on the Initial Closing Date.

            "Original Variable Facility Termination Date" means May 29, 2007,
      unless extended pursuant to Section 1.07.

            "Outstanding" means, when used in connection with promissory notes,
      other debt instruments or Advances, for a specified date, promissory notes
      or other debt instruments which have been issued, or Advances which have
      been made, but have not been repaid in full as of the specified date.

            "Outstanding Allocated Facility Amount" means the allocable facility
      amount for any Mortgaged Property on the date such Mortgaged Property
      became a part of the collateral pool minus a pro rata portion of all
      principal payments made by Borrower pursuant to regularly scheduled
      monthly amortization in respect of any Fixed Advance.

            "Ownership Interests" means, with respect to any entity, any
      ownership interests in the entity and any economic rights (such as a right
      to distributions, net cash flow or net income) to which the owner of such
      ownership interests is entitled.

            "Pass-Through Rate" means the interest rate for a Fixed Advance as
      determined by Lender (rounded to three places) as determined in accordance
      with Section 2.01.

            "PBGC" means the Pension Benefit Guaranty Corporation or any entity
      succeeding to any or all of its functions under ERISA.

            "Permits" means all permits and accreditations, or similar licenses
      or approvals issued and/or required by an applicable Governmental
      Authority or any Applicable Law in connection with the ownership, use,
      occupancy, leasing, management, operation, repair, maintenance or
      rehabilitation of any Mortgaged Property or any Borrower's business.

                                       20

<PAGE>

            "Permitted Liens" means, with respect to a Mortgaged Property, (i)
      the exceptions to title to the Mortgaged Property set forth in the Title
      Insurance Policy for the Mortgaged Property which are approved by Lender,
      (ii) the Security Instrument encumbering the Mortgaged Property, (iii) a
      Lien imposed or created by Applicable Law, (iv) Liens reasonably required
      to permit the development of property owned by an Affiliate of the
      Borrower which is located adjacent to the Mortgaged Property, provided
      such Liens do not have a Material Adverse Effect and (v) any other Liens
      approved by Lender.

            "Person" means an individual, an estate, a trust, a corporation, a
      partnership, a limited liability company or any other organization or
      entity (whether governmental or private).

            "Potential Event of Default" means any event which, with the giving
      of notice or the passage of time, or both, would constitute an Event of
      Default.

            "Price" means, with respect to an Advance, the proceeds of the sale
      of the MBS backed by the Advance.

            "Property" means any estate or interest in any kind of property or
      asset, whether real, personal or mixed, and whether tangible or
      intangible.

            "Rate Contracts" means interest rate and currency swap agreements,
      cap, floor and collar agreements, interest rate insurance, currency spot
      and forward contracts and other agreements or arrangements designed to
      provide protection against fluctuations in interest or currency exchange
      rates.

            "Rate Form" means the completed and executed document from Borrower
      to Lender pursuant to Section 2.01(b), substantially in the form of
      Exhibit J to the Agreement, specifying the terms and conditions for the
      requested Advance.

            "Rate Preservation Fee" means for any month, an amount equal to the
      product obtained by multiplying: (i) 1/12, by (ii) 12.5 basis points, by
      (iii) the Reserved Amount. The Rate Preservation Fee shall be paid monthly
      in arrears commencing on the first month after the First Anniversary for
      so long as Borrower wishes to have a Reserved Amount, but shall no longer
      be payable following an Expansion adding the Reserved Amount to the
      Commitment.

            "Rate Setting Date" shall have the meaning set forth in Section
      2.01(b).

            "Release Documents" mean instruments releasing the applicable
      Security Instrument as a Lien on the Release Property, and UCC-3
      Termination Statements terminating the UCC-1 Financing Statements, and
      such other documents and instruments to evidence the release of the
      Release Property from the Collateral Pool.

                                       21

<PAGE>

            "Release Property" means the Mortgaged Property to be released
      pursuant to Section 3.04.

            "Release Price" shall have the meaning set forth in Section 3.04(c).

            "Release Request" means a written request, substantially in the form
      of Exhibit M to the Agreement, to obtain a release of Collateral from the
      Collateral Pool pursuant to Section 3.04(a).

            "Rent Roll" means, with respect to any Manufactured Housing
      Community, a rent roll prepared and certified by the owner of the
      Manufactured Housing Community, on Fannie Mae Form 4243, as set forth in
      Exhibit III-3 of the DUS Guide as modified by Section 3.02 of Lender
      Memorandum 2001-02 issued by Fannie Mae relating to manufactured housing,
      or on another form approved by Lender and containing substantially the
      same information as Form 4243 requires.

            "REO Property" means a Mortgaged Property securing the Obligations
      that was acquired by Lender or a designee of either by foreclosure or deed
      in lieu of foreclosure. In the case of a foreclosure, the date the
      property was acquired shall be deemed to occur at the expiration of the
      applicable redemption period. The value of an REO Property held for twelve
      (12) months following the expiration of the redemption period shall be
      determined by an Appraisal.

            "Replacement Reserve Agreement" means a Replacement Reserve and
      Security Agreement, reasonably required by Lender, and completed in
      accordance with the requirements of the DUS Guide.

            "Request" means an Advance Request, an Addition Request, an
      Expansion Request, a Substitution Request, a Release Request, a Conversion
      Request, a Credit Facility Termination Request, or a Facility Termination
      Request.

            "Reserved Amount" means all or a portion of the amount by which
      Borrower may increase the Commitment pursuant to Article 4, in an amount
      designated in writing from time to time by the Borrower as the amount on
      which the Fixed Facility Fee and the Variable Facility Fee shall not
      increase in the event of an Expansion for so long as the Borrower timely
      pays the Rate Preservation Fee on such amount.

            "Rollover Variable Advance" means a Variable Advance made solely to
      refinance an existing Variable Advance on the maturity date of such
      Variable Advance.

            "Security" means a "security" as set forth in Section 2(1) of the
      Securities Act of 1933, as amended.

            "Security Documents" means the Security Instruments, the Replacement
      Reserve Agreements and any other documents executed by Borrower and Sun
      from time to time to secure any of Borrower's and Sun's obligations under
      the Loan Documents.

                                       22

<PAGE>

            "Security Instrument" means, for each Mortgaged Property, a separate
      Multifamily Mortgage, Deed of Trust or Deed to Secure Debt, Assignment of
      Leases and Rents and Security Agreement given by a Borrower to or for the
      benefit of Lender to secure the obligations of Borrower under the Loan
      Documents. With respect to each Mortgaged Property owned by a Borrower,
      the Security Instrument shall be substantially in the form published by
      Fannie Mae for use in the state in which the Mortgaged Property is
      located. If the Collateral Pool includes any Mortgaged Properties located
      in the State of California, "Security Instrument" shall include any
      additional Multifamily Mortgage, Deed of Trust or Deed to Secure Debt,
      Assignment of Leases and Rents and Security Agreement given by a Borrower
      to or for the benefit of Lender to secure the obligations of Borrower
      under the Loan Documents deemed desirable by Lender. The amount secured by
      the Security Instrument shall be equal to the Commitment in effect from
      time to time.

            "Senior Management" means (i) the Chief Executive Officer, Chairman
      of the Board, President, Chief Financial Officer and Chief Operating
      Officer of Sun, and (ii) any other individuals with responsibility for any
      of the significant functions typically performed in a corporation by the
      officers described in clause (i).

            "Single-Purpose" means, with respect to a Person which is any form
      of partnership or corporation or limited liability company, that such
      Person at all times from and after the Initial Closing Date (or, in the
      case of an Additional Borrower, from and after the date such Additional
      Borrower becomes a party to the Master Agreement):

            (i)     has been a duly formed and existing partnership, corporation
                    or limited liability company, as the case may be;

            (ii)    has been duly qualified in each jurisdiction in which such
                    qualification was at such time necessary for the conduct of
                    its business;

            (iii)   has complied with the provisions of its organizational
                    documents and the laws of its jurisdiction of formation in
                    all respects;

            (iv)    has observed all customary formalities regarding its
                    partnership or corporate existence, as the case may be;

            (v)     has accurately maintained its financial statements,
                    accounting records and other partnership or corporate
                    documents separate from those of any other Person;

            (vi)    has collected rents from the tenants of its Mortgaged
                    Property and deposited such rents in such Person's operating
                    account, before all such cash in such operating accounts are
                    transferred to a master operating account maintained by Sun,
                    the OP or another Affiliate;

                                       23

<PAGE>

            (vii)   has identified itself in all dealings with secured creditors
                    (other than trade creditors in the ordinary course of
                    business and creditors for the construction of improvements
                    to property on which such Person has a non-contingent
                    contract to purchase such property) under its own name and
                    as a separate and distinct entity;

            (viii)  is and has been adequately capitalized in light of its
                    contemplated business operations;

            (ix)    has not assumed, guaranteed or become obligated for the
                    liabilities of any other Person (except in connection with
                    the Credit Facility or the endorsement of negotiable
                    instruments in the ordinary course of business) or held out
                    its credit as being available to satisfy the obligations of
                    any other Person;

            (x)     has not acquired obligations or securities of any other
                    Person;

            (xi)    in relation to a Borrower, except for loans or advances made
                    in the ordinary course of business to Affiliates, has not
                    made loans or advances to any other Person;

            (xii)   has not entered into and was not a party to any transaction
                    with any Affiliate of such Person, except in the ordinary
                    course of business and on terms which are no less favorable
                    to such Person than would be obtained in a comparable
                    arm's-length transaction with an unrelated third Party;

            (xiii)  has not engaged in a non-exempt prohibited transaction
                    described in Section 406 of ERISA or Section 4975 of the
                    Internal Revenue Code;

            (xiv)   shall not acquire any real or personal property other than
                    the Mortgaged Property and personal property related to the
                    operation and maintenance of the Mortgaged Property; and

            (xv)    shall not operate any business other than the management and
                    operation of the Mortgaged Property (in particular and
                    without limiting the foregoing, the Borrower is not and
                    shall not engage in the retail sale or financing of
                    Manufactured Homes, although this shall not prohibit any
                    Affiliate of Borrower from engaging in such sale or
                    financing. Borrower shall not rent Homes under Leases
                    providing that upon payment of the stipulated rent or a
                    nominal charge, the Borrower shall convey title to the Home
                    to the lessee, although this shall not prohibit any
                    Affiliate of Borrower from engaging in such practice).

            Notwithstanding anything contained in the definition of
            Single-Purpose to the contrary, whether express or implied, Lender
            and Borrower agree that the following operations and activities of
            any and all Borrowers and their Affiliates

                                       24

<PAGE>

            shall not be considered a violation of any obligation to maintain a
            Single-Purpose: (i) preparing and distributing consolidated
            financial statements which include the operation of the Borrowers
            and their Mortgaged Properties with the operations of Sun, the OP
            and/or other Affiliates; (ii) offering services to residents of the
            Mortgaged Property through Affiliates or other third parties for
            which fees and charges may be collected by such Borrower or the
            Affiliate and paid to such Affiliate or third party, which may
            include, without limitation, cable and internet services,
            landscaping, snow removal, lease or sale of manufactured homes, and
            child care; (iii) transferring all Gross Revenue, whether cash, cash
            equivalents or similar assets to Sun, the OP or any other Affiliate
            after collection thereof and depositing such Gross Revenue in the
            operating bank account maintained for the Mortgaged Property; (iv)
            having Sun, the OP or any Affiliate pay all payables, debts and
            other liabilities arising from or in connection with the operation
            of any Mortgaged Property from commingled funds; (v) using ancillary
            assets in connection with the operation of the Mortgaged Properties
            held in the name of Sun, the OP or any Affiliates, such as vehicles
            and office and maintenance equipment; (vi) treating the Mortgaged
            Properties for all purposes as part of and within the portfolio of
            manufactured housing communities owned by the OP or any Affiliate,
            including for marketing, promotion and providing information and
            reports to the public or required by Applicable Law; and (vii)
            allocating general overhead and administrative costs incurred by
            Sun, the OP and/or other Affiliates to Borrowers in a fair and
            equitable manner.

            "Standby Fee" means, (A) for any month, an amount equal to the
      product obtained by multiplying: (i) 1/12, by (ii) 12.5 basis points, by
      (iii) the Unused Capacity for such month, and (B) for any period for which
      the Standby Fee is redetermined pursuant to the terms of the Master
      Agreement, the number of basis points per annum determined at the time of
      such redetermination (which shall be based on the Standby Fee then being
      charged by Lender to other borrowers of comparable financial condition as
      Borrower (taking into account the financial condition of Sun to the extent
      and in a similar manner as the financial condition of Sun was taken into
      account in the original underwriting of the Credit Facility) on credit
      facilities secured by manufactured housing properties having similar
      characteristics regarding leverage, geographic diversity, recourse and
      other material terms as reasonably determined by Lender).

            "Subsidiary" means, when used with reference to a specified Person,
      (i) any Person that, directly or indirectly, through one or more
      intermediaries, is controlled by the specified Person, (ii) any Person of
      which the specified Person is, directly or indirectly, the owner of more
      than 50% of any voting class of Ownership Interests or (iii) any Person
      (A) which is a partnership and (B) of which the specified Person is a
      general partner and owns more than 50% of the partnership interests.

            "Substitute Mortgaged Property" means each Manufactured Housing
      Community owned by Borrower (either in fee simple or as tenant under a
      ground lease meeting all of

                                       25

<PAGE>

      the requirements of the DUS Guide) and added to the Collateral Pool after
      the Initial Closing Date in connection with a substitution of Collateral
      as permitted by Section 3.05.

            "Substitution Fee" means, with respect to any substitution effected
      in accordance with Section 3.05, a fee equal to 30 basis points multiplied
      by the Allocable Facility Amount of the Substitute Mortgage Property added
      to the Collateral Pool.

            "Sun" means Sun Communities, Inc., a Maryland corporation.

            "Surveys" means the as-built surveys of the Mortgaged Properties
      prepared in accordance with the requirements of Part III, Section 113 of
      the DUS Guide, or otherwise approved by Lender.

            "Taxes" means all taxes, assessments, vault rentals and other
      charges, if any, general, special or otherwise, including all assessments
      for schools, public betterments and general or local improvements, which
      are levied, assessed or imposed by any public authority or quasi-public
      authority, and which, if not paid, will become a lien, on the Mortgaged
      Properties.

            "Term of this Agreement" shall be determined as provided in Section
      17.10.

            "Termination Date" means, at any time during which Fixed Advances
      are Outstanding, the latest maturity date for any Fixed Advance
      Outstanding, and, at any time during which Fixed Advances are not
      Outstanding, the Variable Facility Termination Date.

            "Three-Month LIBOR" means the London interbank offered rate for
      three-month U.S. dollar deposits, as such rate is reported in The Wall
      Street Journal. In the event that a rate is not published for Three-Month
      LIBOR, then the nearest equivalent duration London interbank offered rate
      for U.S. Dollar deposits shall be selected at Lender's reasonable
      discretion. If the publication of Three-Month LIBOR is discontinued,
      Lender shall determine such rate from another equivalent source selected
      by Lender in its reasonable discretion.

            "Title Company" means Lawyer's Title Insurance Company.

            "Title Insurance Policies" means the mortgagee's policies of title
      insurance issued by the Title Company from time to time relating to each
      of the Security Instruments, conforming to the requirements of Part III,
      Section 111 of the DUS Guide, together with such endorsements,
      coinsurance, reinsurance and direct access agreements with respect to such
      policies as Lender may, from time to time, consider necessary or
      appropriate, whether or not required by the DUS Guide, including variable
      credit endorsements, if available, and tie-in Endorsements, if available,
      and with a limit of liability under the policy (subject to the limitations
      contained in Sections 6(a)(i) and 6(a)(iii) of the Stipulations and
      Conditions of the policy) equal to the Commitment.

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            "Transfer" means --

            (1) as used with respect to Ownership Interests in Borrower or Sun
      means (i) a sale, assignment, pledge, transfer or other disposition of any
      ownership interest in Borrower or Sun, or (ii) the issuance or other
      creation of new ownership interests in Borrower or Sun or in any entity
      that has a direct or indirect ownership interest in Borrower or Sun, or
      (iii) a merger or consolidation of Borrower, as the case may be, into
      another entity or of another entity into Borrower as the case may be, or
      (iv) the reconstitution of Borrower from one type of entity to another
      type of entity, or (v) the amendment, modification or any other change in
      the governing instrument or instruments of Borrower or Sun which has the
      effect of materially changing the relative powers, rights, privileges,
      voting rights or economic interests of the ownership interests in Borrower
      or Sun, in each case excluding (a) any Transfer to or from an Affiliate,
      (b) sales and purchases of stock of Sun on any public stock exchange, (c)
      private placements of ownership interests in Sun or any Affiliate that do
      not result in a Change of Control, or (c) any conversion of any ownership
      interest in the OP or an Affiliate to stock in Sun, provided that any
      Transfer, sale, purchase or conversion does not otherwise conflict with or
      violate the terms and conditions of this Agreement.

            (2) as used with respect to ownership interests in a Mortgaged
      Property means a sale, assignment, lease, pledge, transfer or other
      disposition (whether voluntary or by operation of law) of, or the granting
      or creating of a lien, encumbrance or security interest in, any estate,
      rights, title or interest in a Mortgaged Property, or any portion thereof,
      excluding the granting of easements, rights of way, licenses and similar
      property matters reasonably necessary for the operation of a Mortgaged
      Property. Transfer does not include a conveyance of a Mortgaged Property
      at a judicial or non-judicial foreclosure sale under any security
      instrument or the Mortgaged Property becoming part of a bankruptcy estate
      by operation of law under the United States Bankruptcy Code.

            "Unused Capacity" means, for any month, the sum of the daily average
      during such month of the undrawn amount of the Commitment available under
      Article 1 of the Agreement for the making of Advances, without regard to
      any unclosed Requests or to the fact that a Request must satisfy
      conditions precedent.

            "Valuation" means, for any specified date, with respect to a
      Manufactured Housing Community, (a) if an Appraisal of the Manufactured
      Housing Community was more recently obtained than a Cap Rate for the
      Manufactured Housing Community, the Appraised Value of such Manufactured
      Housing Community, or (b) if a Cap Rate for the Manufactured Housing
      Community was more recently obtained than an Appraisal of the Manufactured
      Housing Community, the value derived by dividing--

            (i)   the Net Operating Income of such Manufactured Housing
                  Community, by

            (ii)  the most recent Cap Rate determined for the Mortgaged
                  Property.

                                       27

<PAGE>

      Notwithstanding the foregoing, any Valuation for a Manufactured Housing
      Community calculated for a date occurring before the first anniversary of
      the date on which the Manufactured Housing Community becomes a part of the
      Collateral Pool shall equal the Appraised Value of such Manufactured
      Housing Community, unless Lender determines that changed market or
      property conditions warrant that the value be determined as set forth in
      the preceding sentence.

            "Variable Advance" means a loan made by Lender to Borrower under the
      Variable Facility Commitment.

            "Variable Facility" means the agreement of Lender to make Variable
      Advances to Borrower pursuant to Section 1.01.

            "Variable Facility Availability Period" means the period beginning
      on the Initial Closing Date and ending on the 90th day before the Variable
      Facility Termination Date.

            "Variable Facility Commitment" means an aggregate amount of
      $212,637,500, which shall be evidenced by the Variable Facility Note in
      the form attached hereto as Exhibit C, plus such amount as Borrower may
      elect to add to the Variable Facility Commitment in accordance with
      Article 4, less such amount as Borrower may elect to convert from the
      Variable Facility Commitment to the Fixed Facility Commitment in
      accordance with Section 1.08, and less such amount by which Borrower may
      elect to reduce the Variable Facility Commitment in accordance with
      Article V.

            "Variable Facility Fee" means (i) 58 basis points per annum for any
      Variable Advance drawn from the Variable Facility Commitment initially
      available under the Agreement or in effect as the result of an expansion
      of the Variable Facility Commitment on or before the First Anniversary
      (whether or not drawn by such date), (ii) for any Variable Advance drawn
      from any portion of the Variable Facility Commitment increased under
      Article 4 after the First Anniversary, the number of basis points per
      annum determined at the time of such increase by Lender as the Variable
      Facility Fee for such Variable Advance (which shall be based on the amount
      then being charged by Lender to other borrowers of comparable financial
      condition as Borrower (taking into account the financial condition of Sun
      to the extent and in a similar manner as the financial condition of Sun
      was taken into account in the original underwriting of the Credit
      Facility) on credit facilities secured by manufactured housing properties
      having similar characteristics regarding leverage, geographic diversity,
      recourse and other material terms as reasonably determined by Lender), and
      (iii) if the Variable Facility Termination Date is extended pursuant to
      Section 1.07, for any Variable Advance drawn from any portion of the
      Variable Commitment (excluding the Reserved Amount) after the original
      Variable Facility Availability Period, the number of basis points per
      annum determined by Lender as the Variable Facility Fee for such period,
      which fee shall be set by Lender not less than 30 days prior to the
      commencement of such period and shall be based on the amount then being
      charged by Lender to other borrowers of comparable financial condition as
      Borrower (taking into account the financial condition of Sun to the

                                       28

<PAGE>

      extent and in a similar manner as the financial condition of Sun was taken
      into account in the original underwriting of the Credit Facility) on
      credit facilities secured by manufactured housing properties having
      similar characteristics regarding leverage, geographic diversity, recourse
      and other material terms as reasonably determined by Lender. In the event
      the Rate Preservation Fee is being paid, there shall be no change in the
      Variable Facility Fee with respect to the portion of the Variable Facility
      Commitment on which the Rate Preservation Fee is being paid.

            "Variable Facility Note" means, individually and collectively,
      promissory notes, each in the form attached as Exhibit C to the Agreement,
      which have been issued by Borrower to Lender to evidence Borrower's
      obligation to repay Variable Advances.

            "Variable Facility Termination Date" means the date five years after
      the Initial Closing Date unless extended pursuant to Section 1.07.

            "Voting Equity Capital" means Securities, partnership or member
      interests of any class or classes, the holders of which are ordinarily, in
      the absence of contingencies, entitled to elect a majority of the board of
      directors (or Persons performing similar functions).

                                       29

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