Document:

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                                                                   EXHIBIT 10.30

                                                                  EXECUTION COPY

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                                CREDIT AGREEMENT

                          Dated as of January 16, 2004

                                  by and among

                           POST APARTMENT HOMES, L.P.,
                                           as Borrower

                         WACHOVIA CAPITAL MARKETS, LLC,
                                           as Sole Lead Arranger and
                                              Sole Bookrunner,

                      WACHOVIA BANK, NATIONAL ASSOCIATION,
                                           as Administrative Agent,

                                  BANK ONE, NA,
                                           as Syndication Agent,

                       WELLS FARGO BANK and SUNTRUST BANK,
                                           as Co-Documentation Agents,

                                       and

                     The financial institutions party hereto
                    and their assignees under Section 12.5.,
                                           as Lenders

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<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                                  <C>
Article I. Definitions...........................................................................    1

         Section 1.1.  Definitions...............................................................    1
         Section 1.2.  General; References to Times..............................................    27

Article II. Credit Facility......................................................................    27

         Section 2.1.  Revolving Loans...........................................................    27
         Section 2.2.  Bid Rate Loans............................................................    28
         Section 2.3.  Swingline Loans...........................................................    31
         Section 2.4.  Letters of Credit.........................................................    33
         Section 2.5.  Rates and Payment of Interest on Loans....................................    37
         Section 2.6.  Number of Interest Periods................................................    38
         Section 2.7.  Repayment of Loans........................................................    38
         Section 2.8.  Prepayments...............................................................    38
         Section 2.9.  Continuation..............................................................    39
         Section 2.10.  Conversion...............................................................    39
         Section 2.11.  Notes....................................................................    40
         Section 2.12.  Voluntary Reductions of the Commitment...................................    40
         Section 2.13.  Expiration or Maturity Date of Letters of Credit Past Termination Date...    41
         Section 2.14.  Amount Limitations.......................................................    41
         Section 2.15.  Increase of Commitments..................................................    41

Article III. Payments, Fees and Other General Provisions.........................................    42

         Section 3.1.  Payments..................................................................    42
         Section 3.2.  Pro Rata Treatment........................................................    43
         Section 3.3.  Sharing of Payments, Etc..................................................    43
         Section 3.4.  Several Obligations.......................................................    44
         Section 3.5.  Minimum Amounts...........................................................    44
         Section 3.6.  Fees......................................................................    44
         Section 3.7.  Computations..............................................................    45
         Section 3.8.  Usury.....................................................................    45
         Section 3.9.  Agreement Regarding Interest and Charges..................................    46
         Section 3.10.  Statements of Account....................................................    46
         Section 3.11.  Defaulting Lenders.......................................................    46
         Section 3.12.  Taxes....................................................................    47

Article IV. Yield Protection, Etc................................................................    49

         Section 4.1.  Additional Costs; Capital Adequacy........................................    49
         Section 4.2.  Suspension of LIBOR Loans.................................................    50
         Section 4.3.  Illegality................................................................    51
         Section 4.4.  Compensation..............................................................    51
         Section 4.5.  Affected Lenders..........................................................    52
         Section 4.6.  Treatment of Affected Loans...............................................    52
         Section 4.7.  Change of Lending Office..................................................    53
</TABLE>

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<TABLE>
<S>                                                                                                  <C>
         Section 4.8.  Assumptions Concerning Funding of LIBOR Loans.............................    53

Article V. Conditions Precedent..................................................................    53

         Section 5.1.  Initial Conditions Precedent..............................................    53
         Section 5.2.  Conditions Precedent to All Loans and Letters of Credit...................    55
         Section 5.3.  Conditions as Covenants...................................................    56

Article VI. Representations and Warranties.......................................................    56

         Section 6.1.  Representations and Warranties............................................    56
         Section 6.2.  Survival of Representations and Warranties, Etc...........................    62

Article VII. Affirmative Covenants...............................................................    62

         Section 7.1.  Preservation of Existence and Similar Matters.............................    63
         Section 7.2.  Compliance with Applicable Law and Material Contracts.....................    63
         Section 7.3.  Maintenance of Property...................................................    63
         Section 7.4.  Conduct of Business.......................................................    63
         Section 7.5.  Insurance.................................................................    63
         Section 7.6.  Payment of Taxes and Claims...............................................    64
         Section 7.7.  Visits and Inspections....................................................    64
         Section 7.8.  Use of Proceeds; Letters of Credit........................................    64
         Section 7.9.  Environmental Matters.....................................................    65
         Section 7.10.  Books and Records........................................................    65
         Section 7.11.  Further Assurances.......................................................    65
         Section 7.12.  New Subsidiaries/Guarantors..............................................    65
         Section 7.13.  REIT Status..............................................................    66
         Section 7.14.  Exchange Listing.........................................................    66
         Section 7.15.  Post-Closing Requirement.................................................    66

Article VIII. Information........................................................................    67

         Section 8.1.  Quarterly Financial Statements............................................    67
         Section 8.2.  Year-End Statements.......................................................    67
         Section 8.3.  Compliance Certificate....................................................    67
         Section 8.4.  Additional Quarterly and Annual Information...............................    68
         Section 8.5.  Pro Forma Financial Information...........................................    68
         Section 8.6.  Other Information.........................................................    68

Article IX. Negative Covenants...................................................................    70

         Section 9.1.  Financial Covenants.......................................................    70
         Section 9.2.  Restricted Payments.......................................................    70
         Section 9.3.  Indebtedness..............................................................    72
         Section 9.4. Certain Permitted Investments..............................................    72
         Section 9.5.  Investments Generally.....................................................    73
         Section 9.6.  Liens; Negative Pledges; Other Matters....................................    74
         Section 9.7.  Merger, Consolidation, Sales of Assets and Other Arrangements.............    75
         Section 9.8.  Fiscal Year...............................................................    75
         Section 9.9.  Modifications of Organizational Documents.................................    75
</TABLE>

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<TABLE>
<S>                                                                                                  <C>
         Section 9.10.  Transactions with Affiliates.............................................    75
         Section 9.11.  ERISA Exemptions.........................................................    76

Article X. Default...............................................................................    76

         Section 10.1.  Events of Default........................................................    76
         Section 10.2.  Remedies Upon Event of Default...........................................    79
         Section 10.3.  Remedies Upon Default....................................................    80
         Section 10.4.  Allocation of Proceeds...................................................    80
         Section 10.5.  Collateral Account.......................................................    81
         Section 10.6.  Performance by Agent.....................................................    82
         Section 10.7.  Rights Cumulative........................................................    82

Article XI. The Agent............................................................................    82

         Section 11.1.  Authorization and Action.................................................    82
         Section 11.2.  Agent's Reliance, Etc....................................................    83
         Section 11.3.  Notice of Defaults.......................................................    84
         Section 11.4.  Wachovia as Lender.......................................................    84
         Section 11.5.  Approvals of Lenders.....................................................    84
         Section 11.6.  Lender Credit Decision, Etc..............................................    85
         Section 11.7.  Indemnification of Agent.................................................    86
         Section 11.8.  Successor Agent..........................................................    86
         Section 11.9.  Titled Agents............................................................    87

Article XII. Miscellaneous.......................................................................    87

         Section 12.1.  Notices..................................................................    87
         Section 12.2.  Expenses.................................................................    88
         Section 12.3.  Setoff...................................................................    89
         Section 12.4.  Litigation; Jurisdiction; Other Matters; Waivers.........................    89
         Section 12.5.  Successors and Assigns...................................................    90
         Section 12.6.  Amendments...............................................................    93
         Section 12.7.  Nonliability of Agent and Lenders........................................    94
         Section 12.8.  Confidentiality..........................................................    94
         Section 12.9.  Indemnification..........................................................    95
         Section 12.10.  Termination; Survival...................................................    96
         Section 12.11.  Severability of Provisions..............................................    97
         Section 12.12.  GOVERNING LAW...........................................................    98
         Section 12.13.  Counterparts............................................................    98
         Section 12.14.  Obligations with Respect to Loan Parties................................    98
         Section 12.15.  Limitation of Liability.................................................    98
         Section 12.16.  Entire Agreement........................................................    98
         Section 12.17.  Construction............................................................    99
</TABLE>

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SCHEDULE 1.1(A)                List of Loan Parties
SCHEDULE 6.1.(b)               Ownership Structure
SCHEDULE 6.1.(f)               Title to Properties; Liens
SCHEDULE 6.1.(g)               Indebtedness and Guaranties
SCHEDULE 6.1.(h)               Litigation
SCHEDULE 6.1(m)                Plan Assets; Prohibited Transactions
SCHEDULE 9.6(b)                Other Permitted Negative Pledges
SCHEDULE 9.6(c)                Other Permitted Restrictions
SCHEDULE 9.10.                 Transactions With Affiliates

EXHIBIT A                      Form of Assignment and Acceptance Agreement
EXHIBIT B                      Form of Designation Agreement
EXHIBIT C                      Form of Notice of Borrowing
EXHIBIT D                      Form of Notice of Continuation
EXHIBIT E                      Form of Notice of Conversion
EXHIBIT F                      Form of Notice of Swingline Borrowing
EXHIBIT G                      Form of Swingline Note
EXHIBIT H                      Form of Bid Rate Quote Request
EXHIBIT I                      Form of Bid Rate Quote
EXHIBIT J                      Form of Bid Rate Quote Acceptance
EXHIBIT K                      Form of Revolving Note
EXHIBIT L                      Form of Bid Rate Note
EXHIBIT M                      Form of Opinion of Counsel
EXHIBIT N                      Form of Compliance Certificate
EXHIBIT O                      Form of Guaranty

                                       iv
<PAGE>
      THIS CREDIT AGREEMENT (the "Agreement") dated as of January 16, 2004 by
and among POST APARTMENT HOMES, L.P., a Georgia limited partnership (the
"Borrower"), each of the financial institutions initially a signatory hereto
together with their assignees pursuant to Section 12.5.(d), Wachovia Bank,
National Association, as Agent, WACHOVIA CAPITAL MARKETS, LLC, as Sole Lead
Arranger and Sole Bookrunner, BANK ONE, NA, as Syndication Agent, and WELLS
FARGO BANK and SUNTRUST BANK, as Co-Documentation Agents.

      WHEREAS, the Agent and the Lenders desire to make available to the
Borrower a revolving credit facility in the initial amount of $350,000,000,
which will include a $20,000,000 letter of credit subfacility and a $20,000,000
swingline subfacility, on the terms and conditions contained herein.

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

                             ARTICLE I. DEFINITIONS

SECTION 1.1. DEFINITIONS.

      In addition to terms defined elsewhere herein, the following terms shall
have the following meanings for the purposes of this Agreement:

      "ACCESSION AGREEMENT" means an Accession Agreement substantially in the
form of Annex I to the Guaranty.

      "ADDITIONAL COSTS" has the meaning given that term in Section 4.1.

      "ADJUSTED EBITDA" means, for any period, the sum of EBITDA for such period
minus Capital Reserves for such period.

      "ADJUSTED EURODOLLAR RATE" means, with respect to each Interest Period for
any LIBOR Loan, the rate obtained by dividing (a) LIBOR for such Interest Period
by (b) a percentage equal to 1 minus the stated maximum rate (stated as a
decimal) of all reserves, if any, required to be maintained against
"Eurocurrency liabilities" as specified in Regulation D of the Board of
Governors of the Federal Reserve System (or against any other category of
liabilities which includes deposits by reference to which the interest rate on
LIBOR Loans is determined or any category of extensions of credit or other
assets which includes loans by an office of any Lender outside of the United
States of America to residents of the United States of America).

      "AFFILIATE" means any Person (other than the Agent or any Lender): (a)
directly or indirectly controlling, controlled by, or under common control with,
the Borrower; (b) directly or indirectly owning or holding twenty percent
(20.0%) or more of any Equity Interest in the Borrower; or (c) twenty percent
(20.0%) or more of whose voting stock or other Equity Interest is directly or
indirectly owned or held by the Borrower. For purposes of this definition,
"control" (including with correlative meanings, the terms "controlling",
"controlled by" and "under
<PAGE>
common control with") means the possession directly or indirectly of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities or by contract or otherwise.

      "AGENT" means Wachovia Bank, National Association, as contractual
representative for the Lenders under the terms of this Agreement, and any of its
successors.

      "AGREEMENT DATE" means the date as of which this Agreement is dated.

      "APPLICABLE LAW" means all applicable provisions of constitutions,
statutes, rules, regulations and orders of all governmental bodies and all
orders and decrees of all courts, tribunals and arbitrators.

      "APPLICABLE MARGIN" means the percentage per annum determined, at any
time, based on the range into which the Borrower's Credit Rating then falls, in
accordance with the table set forth below. The following provisions apply to the
determination of the Applicable Margin:

      (a) any change in the Borrower's Credit Rating which would cause it to
move to a different Level in the below table shall effect a change in the
Applicable Margin on the Business Day on which such change occurs;

      (b) as of the Agreement Date, the Applicable Margin is determined based on
Level 3;

      (c) at any time during the eighteen (18) month period immediately
following the Agreement Date when the Applicable Margin is determined based on a
Level 2 or higher, if a Level Reduction Triggering Event shall occur, the
Applicable Margin shall thereafter be determined based on Level 3 until such
time as the condition causing such Level Reduction Triggering Event ceases to
exist, after which time the Applicable Margin shall be determined based on the
range into which the Borrower's Credit Rating then falls in accordance with the
table set forth below until another Level Reduction Triggering Event shall
occur;

      (d) notwithstanding clause (c) to the contrary, during any period that the
Borrower has received Credit Ratings that are not equivalent, the Applicable
Margin shall be determined by the lower of such two Credit Ratings;

      (e) notwithstanding clause (c) to the contrary, during any period for
which the Borrower has received a Credit Rating from only one Rating Agency,
then the Applicable Margin shall be determined based on such Credit Rating; and

      (f) notwithstanding clause (c) to the contrary, during any period for
which the Borrower has not received a Credit Rating from either Rating Agency,
then the Applicable Margin shall be determined based on Level 4.

                                       2
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<TABLE>
<CAPTION>
                     BORROWER'S CREDIT RATING          APPLICABLE MARGIN FOR LIBOR    APPLICABLE MARGIN FOR BASE
    LEVEL                  (S&P/MOODY'S)                          LOANS                       RATE LOANS
------------   -----------------------------------     ----------------------------   --------------------------
<S>            <C>                                     <C>                            <C>
      1        (Greater than or equal to) BBB+/Baa1               0.65%                         (0.25%)

      2        BBB/Baa2                                           0.75%                          0.0%

      3        BBB-/Baa3                                          0.90%                          0.0%

      4        (Less than) BBB-/Baa3                              1.35%                          0.25%
</TABLE>

      "ARRANGER" means Wachovia Capital Markets, LLC, together with its
successors and permitted assigns.

      "ASSIGNEE" has the meaning given that term in Section 12.5.(d).

      "ASSIGNMENT AND ACCEPTANCE AGREEMENT" means an Assignment and Acceptance
Agreement among a Lender, an Assignee and the Agent, substantially in the form
of Exhibit A.

      "BASE RATE" means the per annum rate of interest equal to the greater of
(a) the Prime Rate or (b) the Federal Funds Rate plus one-half of one percent
(0.5%). Any change in the Base Rate resulting from a change in the Prime Rate or
the Federal Funds Rate shall become effective as of 12:01 a.m. on the Business
Day on which each such change occurs. The Base Rate is a reference rate used by
the Lender acting as the Agent in determining interest rates on certain loans
and is not intended to be the lowest rate of interest charged by the Lender
acting as the Agent or any other Lender on any extension of credit to any
debtor.

      "BASE RATE LOAN" means a Revolving Loan bearing interest at a rate based
on the Base Rate.

      "BENEFIT ARRANGEMENT" means at any time an employee benefit plan within
the meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan
and which is maintained or otherwise contributed to by any member of the ERISA
Group.

      "BID RATE" has the meaning given that term in Section 2.2.(c)(ii)(C).

      "BID RATE BORROWING" has the meaning given that term in Section 2.2.(b).

      "BID RATE LOAN" means a loan made by a Lender under Section 2.2.

      "BID RATE NOTES" has the meaning given that term in Section 2.11.(b).

      "BID RATE QUOTE" means an offer in accordance with Section 2.2.(c) by a
Lender to make a Bid Rate Loan with one single specified interest rate.

      "BID RATE QUOTE REQUEST" has the meaning given that term in Section
2.2.(b).

      "BOND ENHANCED INDEBTEDNESS" means as of any date the sum of (a) the
Indebtedness under the Tax Exempt Bonds of the Borrower and its Subsidiaries
determined on a consolidated

                                       3
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basis, plus (b) Borrower's and its Subsidiaries' pro rata share of the
Indebtedness under Tax Exempt Bonds of its Unconsolidated Affiliates.

      "BOND ENHANCEMENT VALUE" means the lesser of (i) $26,797,500 or (ii) Bond
Enhanced Indebtedness (including Borrower's pro rata share of such debt of
Unconsolidated Affiliates) times 1% and divided by the Capitalization Rate.

      "BORROWER" has the meaning set forth in the introductory paragraph hereof
and shall include the Borrower's successors and permitted assigns.

      "BUSINESS DAY" means (a) any day other than a Saturday, Sunday or other
day on which banks in Charlotte, North Carolina or New York, New York are
authorized or required to close and (b) with reference to a LIBOR Loan, any such
day that is also a day on which dealings in Dollar deposits are carried out in
the London interbank market.

      "CAPITAL RESERVES" means, for any period and with respect to any
Mutifamily Property, an amount equal to (a) $200 per apartment unit in such
Multifamily Property times, (b) a fraction, the numerator of which is the number
of days in such period and the denominator of which is 365. If the term Capital
Reserves is used without reference to any specific Property, then the amount
shall be determined on an aggregate basis with respect to all Multifamily
Properties of the Consolidated Group and a proportionate share of all Mutifamily
Properties now or hereafter owned, or occupied under a Ground Lease, by all
Unconsolidated Affiliates.

      "CAPITALIZATION RATE" means 8%.

      "CAPITALIZED LEASE OBLIGATION" means obligations under a lease that is
required to be capitalized for financial reporting purposes in accordance with
GAAP. The amount of a Capitalized Lease Obligation is the capitalized amount of
such obligation as would be required to be reflected on the balance sheet
prepared in accordance with GAAP of the applicable Person as of the applicable
date.

      "CASH EQUIVALENTS" means: (a) securities issued, guaranteed or insured by
the United States of America or any of its agencies with maturities of not more
than one year from the date acquired; (b) certificates of deposit with
maturities of not more than one year from the date acquired issued by a United
States federal or state chartered commercial bank of recognized standing, or a
commercial bank organized under the laws of any other country which is a member
of the Organization for Economic Cooperation and Development, or a political
subdivision of any such country, acting through a branch or agency, which bank
has capital and unimpaired surplus in excess of $500,000,000.00 and which bank
or its holding company has a short-term commercial paper rating of at least A-2
or the equivalent by S&P or at least P-2 or the equivalent by Moody's; (c)
repurchase agreements and reverse repurchase agreements with terms of not more
than seven days from the date acquired, for securities of the type described in
clause (a) above and entered into only with commercial banks having the
qualifications described in clause (b) above; (d) commercial paper issued by any
Person incorporated under the laws of the United States of America or any State
thereof and rated at least A-2 or the equivalent thereof by S&P or at least P-2
or the equivalent thereof by Moody's, in each case with maturities of not more
than one year from the date acquired; (e) money market sweep accounts maintained

                                       4
<PAGE>
with banks satisfying the requirements in clause (b) above and providing for
investments in Eurodollar deposits and other investments otherwise constituting
Cash Equivalents as provided herein; and (f) investments in money market funds
registered under the Investment Company Act of 1940, which have net assets of at
least $500,000,000.00 and at least 85% of whose assets consist of securities and
other obligations of the type described in clauses (a) through (d) above.

      "CERTIFICATE OF OCCUPANCY" means a certificate of occupancy or comparable
regulatory certification, permit or approval, whether temporary or permanent,
which permits lawful occupancy of a Property.

      "CHANGE OF CONTROL" means the occurrence of any of the following events:

      (a) Any Person or group (within the meaning of the Securities Exchange Act
of 1934 and the rules of the Securities and Exchange Commission thereunder as in
effect on the date hereof) shall have acquired beneficial ownership, directly or
indirectly, of voting stock of PPI (or other securities convertible into such
voting stock) representing 40% or more of the combined voting power of all
voting stock of PPI;

      (b) During any period of up to 24 consecutive months, commencing after the
Agreement Date, individuals who at the beginning of such 24-month period were
directors of PPI (together with any new director whose election by PPI's Board
of Directors or whose nomination for election by PPI's shareholders was approved
by a vote of at least one half of the directors then still in office who either
were directors at the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason to constitute at
least 50% of the directors of PPI then in office; provided, that directors who
cease to serve on the Board of Directors during such 24 month period because of
disability, death, resignation or reaching the mandatory retirement age for
directors shall be treated as if they did not serve on the Board of Directors at
the beginning of the 24-month period for purposes of the calculation provided in
this clause (ii) and clause (iii);

      (c) during any period of up to 24 consecutive months, commencing after the
Agreement Date, (a) individuals who at the beginning of such 24-month period
were directors of PPI cease for any reason to constitute at least 75% of the
directors of PPI then in office (calculated as provided in clause (ii) of this
definition) and (b) any two of the Chief Executive Officer of PPI, the Chief
Financial Officer of PPI, the Chief Investment Officer of PPI and the President
of the Post Apartment Management division of the Borrower cease for any reason
(including, without limitation, death or disability) to serve in such capacity
on a full time basis, and, within 180 days thereafter, such individuals are not
replaced with individuals reasonably acceptable to the Requisite Lenders;

      (d) PPI fails to own directly all of the Equity Interests of each of GP
Sub and LP Sub; and

      (e) GP Sub fails to be the sole general partner of the Borrower.

                                       5
<PAGE>
As used in this definition, "beneficial ownership" shall have the meaning
provided in Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934 as in effect on the date hereof.

      "COLLATERAL ACCOUNT" means a special non-interest bearing deposit account
maintained by the Agent at the Principal Office and under its sole dominion and
control.

      "COMMITMENT" means, as to each Lender, such Lender's obligation to make
Revolving Loans pursuant to Section 2.1. and to issue (in the case of the Agent)
or participate in (in the case of the Lenders) Letters of Credit pursuant to
Section 2.4.(a) and 2.4.(i), respectively, in an amount up to, but not exceeding
(but in the case of the Lender acting as the Agent excluding the aggregate
amount of participations in the Letters of Credit held by other Lenders), the
amount set forth for such Lender on its signature page hereto as such Lender's
"Commitment Amount" or as set forth in the applicable Assignment and Acceptance
Agreement, as the same may be reduced from time to time pursuant to Section
2.12. or as appropriate to reflect any assignments to or by such Lender effected
in accordance with Section 12.5.

      "COMMITMENT PERCENTAGE" means, as to each Lender, the ratio, expressed as
a percentage, of (a) the amount of such Lender's Commitment to (b) the aggregate
amount of the Commitments of all Lenders hereunder; provided, however, that if
at the time of determination the Commitments have terminated or been reduced to
zero, the "Commitment Percentage" of each Lender shall be the Commitment
Percentage of such Lender in effect immediately prior to such termination or
reduction.

      "COMPLIANCE CERTIFICATE" has the meaning given that term in Section 8.3.

      "CONSOLIDATED GROUP" means PPI, GP Sub, LP Sub, the Borrower and the
Borrower's consolidated Subsidiaries, as determined in accordance with GAAP.

      "CONSOLIDATED INCOME AVAILABLE FOR DISTRIBUTION" means, in any fiscal
year, the sum of the following for such fiscal year, calculated on a
consolidated basis: (i) EBITDA, less (ii) GAAP Interest Expense less (iii)
letter of credit fees on Tax Exempt Bonds.

      "CONSTRUCTION-IN-PROCESS" means at any time on a consolidated basis for a
Person and its Subsidiaries, the sum of all cash expenditures for land and
improvements (including indirect costs internally allocated and development
costs) on all Properties that are under construction or with respect to which
construction is scheduled to commence within twelve (12) months of the relevant
determination.

      "CONTINUE", "CONTINUATION" and "CONTINUED" each refers to the continuation
of a LIBOR Loan from one Interest Period to another Interest Period pursuant to
Section 2.9.

      "CONVERT", "CONVERSION" and "CONVERTED" each refers to the conversion of a
Loan of one Type into a Loan of another Type pursuant to Section 2.10.

                                       6
<PAGE>
      "CREDIT EVENT" means any of the following: (a) the making (or deemed
making) of any Loan and (b) the issuance of a Letter of Credit.

      "CREDIT RATING" means the rating assigned by a Rating Agency to the senior
unsecured long term indebtedness of the Borrower.

      "DEFAULT" means any of the events specified in Section 10.1., whether or
not there has been satisfied any requirement for the giving of notice, the lapse
of time, or both.

      "DEFAULTING LENDER" has the meaning set forth in Section 3.11.

      "DERIVATIVES CONTRACT" means any and all rate swap transactions, basis
swaps, credit derivative transactions, forward rate transactions, commodity
swaps, commodity options, forward commodity contracts, equity or equity index
swaps or options, bond or bond price or bond index swaps or options or forward
bond or forward bond price or forward bond index transactions, interest rate
options, forward foreign exchange transactions, cap transactions, floor
transactions, collar transactions, currency swap transactions, cross-currency
rate swap transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, but excluding "cash flow hedge"
transactions as defined under GAAP prior to the occurrence of a termination
event thereunder. Not in limitation of the foregoing, the term "Derivatives
Contract" includes any and all transactions of any kind, and the related
confirmations, which are subject to the terms and conditions of, or governed by,
any form of master agreement published by the International Swaps and
Derivatives Association, Inc., any International Foreign Exchange Master
Agreement, or any other master agreement, including any such obligations or
liabilities under any such master agreement.

      "DERIVATIVES TERMINATION VALUE" means, in respect of any one or more
Derivatives Contracts, after taking into account the effect of any legally
enforceable netting agreement relating to such Derivatives Contracts, (a) for
any date on or after the date such Derivatives Contracts have been closed out
and termination value(s) determined in accordance therewith, such termination
value(s), and (b) for any date prior to the date referenced in clause (a) the
amount(s) determined as the mark-to-market value(s) for such Derivatives
Contracts, as determined based upon one or more mid-market or other readily
available quotations provided by any recognized dealer in such Derivatives
Contracts (which may include the Agent or any Lender).

      "DESIGNATED LENDER" means a special purpose corporation which is sponsored
by a Lender, that is engaged in making, purchasing or otherwise investing in
commercial loans in the ordinary course of its business and that issues (or the
parent of which issues) commercial paper rated at least P-1 (or the then
equivalent grade) by Moody's or A-1 (or the then equivalent grade) by S&P that,
in either case, (a) is organized under the laws of the United States of America
or any state thereof, (b) shall have become a party to this Agreement pursuant
to Section 12.5.(e) and (c) is not otherwise a Lender.

                                       7
<PAGE>
      "DESIGNATED LENDER NOTE" means a Bid Rate Note of the Borrower evidencing
the obligation of the Borrower to repay Bid Rate Loans made by a Designated
Lender.

      "DESIGNATED PROPERTIES" means Multifamily Properties known as Post Bennie
Dillon (located in Nashville, Tennessee), Post Wilson Buildings (located in
Dallas, Texas), Post American Beauty Mill (located in Dallas, Texas), and Post
Rice Lofts (located in Houston, Texas); provided, however, at such time as the
Borrower or a Subsidiary (other than a Subsidiary described in the last sentence
of the definition of Subsidiary) becomes the holder of fee simple title to any
of the Multifamily Properties described in this definition or the lessee of any
such Multifamily Properties (pursuant to a Ground Lease), such Multifamily
Properties will cease to be Designated Properties.

      "DESIGNATING LENDER" has the meaning given that term in Section 12.5.(e).

      "DESIGNATION AGREEMENT" means a Designation Agreement between a Lender and
a Designated Lender and accepted by the Agent, substantially in the form of
Exhibit B or such other form as may be agreed to by such Lender, such Designated
Lender and the Agent.

      "DEVELOPMENT PROPERTIES" means at any time on a consolidated basis for a
Person and its Subsidiaries, the sum of (A) 100% of the aggregate amount of cash
expenditures made to acquire each unimproved Property then held for development
plus (B) the sum of the following items as to which (x) actual construction or
other physical development or redevelopment activities have commenced, and (y)
no Certificate of Occupancy shall have been issued or received: (i) costs then
budgeted to develop any such unimproved Property, plus (ii) without duplication,
where any such Property is being developed or redeveloped in phases, as to any
phase which is still being developed or redeveloped and for which a Certificate
of Occupancy has not been received, the cash expenditures made and costs then
budgeted for development or redevelopment of such phase (including indirect
costs internally allocated in accordance with GAAP).

      "DOLLARS" or "$" means the lawful currency of the United States of
America.

      "EBITDA" with respect to the Consolidated Group for any period means
(without duplication) an amount, determined on a consolidated basis, equal to
the sum of (a) the net income (or loss) of the Consolidated Group for such
period before minority interests, exclusive of the following (but only to the
extent included in the determination of such net income (loss)): (i)
depreciation and amortization expense; (ii) Interest Expense; (iii) all
provisions for any Federal, state or other income taxes; (iv) asset impairment
and restructuring charges, and all other extraordinary or nonrecurring gains and
losses; (v) changes in deferred taxes and other noncash items; (vi) noncash
expense associated with stock compensation; (vii) distributions on Preferred
Securities; and (viii) gains or losses from early extinguishment of Indebtedness
and redemption of Preferred Securities (including any gains or losses in respect
of any derivative agreements or arrangements in effect that are related to such
Indebtedness or Preferred Securities), in each case on a consolidated basis
determined in accordance with GAAP applied on a consistent basis; plus (b)
Borrower's pro rata share of "EBITDA" from its Unconsolidated

                                       8
<PAGE>
Affiliates (determined for such Unconsolidated Affiliates in a manner consistent
with the foregoing), all as determined in accordance with GAAP.

      "EFFECTIVE DATE" means the later of: (a) the Agreement Date; and (b) the
date on which all of the conditions precedent set forth in Section 5.1. shall
have been fulfilled or waived in writing by the Requisite Lenders.

      "ELIGIBLE ASSIGNEE" means any Person who is: (i) currently a Lender; (ii)
a commercial bank, trust company, insurance company, investment bank or pension
fund organized under the laws of the United States of America, or any state
thereof, and having total assets in excess of $5,000,000,000; (iii) a savings
and loan association or savings bank organized under the laws of the United
States of America, or any state thereof, and having a tangible net worth of at
least $500,000,000; or (iv) a commercial bank organized under the laws of any
other country which is a member of the Organization for Economic Cooperation and
Development, or a political subdivision of any such country, and having total
assets in excess of $10,000,000,000, provided that such bank is acting through a
branch or agency located in the United States of America. If such Person is not
currently a Lender, such Person's senior unsecured long term indebtedness must
be rated BBB or higher by S&P, Baa2 or higher by Moody's, or the equivalent or
higher of either such rating by another Rating Agency acceptable to the Agent.
Notwithstanding the foregoing, during any period in which an Event of Default
shall have occurred and be continuing under any of subsections (a), (b), (f) or
(g) of Section 10.1., the term "Eligible Assignee" shall mean any Person that is
not an individual.

      "ELIGIBLE GROUND LEASE" means a ground lease (including if applicable
related agreements with the lessor) containing terms and conditions which, taken
as a whole, would reasonably be expected to allow the lessee to obtain leasehold
mortgage financing of its interest in such ground lease from institutional
lenders who are regularly engaged in the business of leasehold mortgage
financing, provided customary real estate underwriting criteria are otherwise
satisfied, all as determined by the Borrower in its good faith business
judgment, including (a) a term of thirty-five (35) years or more, inclusive of
any unexercised extension options that may be exercised by the lessee without
the consent or approval of the lessor (or in the absence of a remaining term of
such length, the right to purchase or otherwise acquire the fee simple title to
the leased property on terms advantageous to the lessee), and (b) leasehold
mortgagee protection provisions which are, in the Borrower's good faith business
judgment, reasonable under the circumstances.

      "ELIGIBLE PROPERTY" means a Property which satisfies all of the following
requirements:

      (a) such Property is a Multifamily Property;

      (b) such Property is owned in fee simple, is a Designated Property, or is
leased under an Eligible Ground Lease, in any case, by the Borrower or a
Subsidiary;

      (c) neither such Property, nor any interest of the Borrower or its
Subsidiaries therein, is subject to any Lien (other than Permitted Liens) or to
any Negative Pledge;

                                       9
<PAGE>
      (d) if such Property (other than any Designated Property) is owned by a
Subsidiary or leased by a Subsidiary pursuant to an Eligible Ground Lease, (i)
none of the Borrower's direct or indirect ownership interest in such Subsidiary
is subject to any Lien (other than Permitted Liens) or to any Negative Pledge,
(ii) the Borrower directly, or indirectly through a Subsidiary, has the right to
take the following actions without the need to obtain the consent of any Person:
(A) to create a Lien on such Property as security for Indebtedness of the
Borrower or such Subsidiary, as applicable, and (B) to sell, transfer or
otherwise dispose of such Property; (iii) the Borrower must own directly or
indirectly not less than 66.67% of the outstanding Equity Interests of such
Subsidiary; and (iv) such Subsidiary has no Indebtedness other than (x) standby
letters of credit, Capitalized Lease Obligations and purchase money debt as
required for the development and operation of the Property not to exceed
$500,000 and (y) Indebtedness owing to the Borrower or another Subsidiary; and

      (e) such Property is free of all structural defects or major architectural
deficiencies, title defects, environmental conditions or other adverse matters
except for defects, conditions or matters individually or collectively which do
not have a material adverse effect on the value of such Property.

      "ELIGIBLE QI CASH AND CASH EQUIVALENTS" means at any time the sum of (i)
proceeds from the sale of Properties by the Borrower or a Subsidiary which are
held by a Qualified Intermediary in and as cash or Cash Equivalents in a
"qualified escrow account" within the meaning of the regulations issued pursuant
to Section 1031 of the Internal Revenue Code pursuant to an exchange agreement
intended for the purposes of implementing a tax deferred exchange transaction
under Section 1031 under the Code minus (ii) all costs, expenses and other
obligations incurred by or owing to the Qualified Intermediary or any other
Person which are to be paid from such qualified escrow account prior to or at
the time of the disbursement of the proceeds from such qualified escrow account
by the Qualified Intermediary. In the event (a) all or a portion of the cash or
Cash Equivalents held by the Qualified Intermediary become subject to any Lien
or (b) the Qualified Intermediary becomes subject to any bankruptcy or
insolvency proceedings, then with respect to clause (a) above, the value of the
cash or Cash Equivalents subject to such Lien shall be deemed to be zero ($0)
and with respect to clause (b) above, the cash or Cash Equivalents held by such
Qualified Intermediary shall be deemed to be zero ($0).

      "ENVIRONMENTAL LAWS" means any Applicable Law relating to environmental
protection or the manufacture, storage, disposal or clean-up of Hazardous
Materials including, without limitation, the following: Clean Air Act, 42 U.S.C.
Section 7401 et seq.; Federal Water Pollution Control Act, 33 U.S.C. Section
1251 et seq.; Solid Waste Disposal Act, as amended by the Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901 et seq.; Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Section 9601 et seq.;
National Environmental Policy Act, 42 U.S.C. Section 4321 et seq.; regulations
of the Environmental Protection Agency and any applicable rule of common law and
any judicial interpretation thereof relating primarily to the environment or
Hazardous Materials.

      "EQUITY INTEREST" means, with respect to any Person, any share of capital
stock of (or other ownership or profit interests in) such Person, any warrant,
option or other right for the purchase or other acquisition from such Person of
any share of capital stock of (or other

                                       10
<PAGE>
ownership or profit interests in) such Person, any security convertible into or
exchangeable for any share of capital stock of (or other ownership or profit
interests in) such Person or warrant, right or option for the purchase or other
acquisition from such Person of such shares (or such other interests), and any
other ownership or profit interest in such Person (including, without
limitation, partnership, member or trust interests therein), whether voting or
nonvoting, and whether or not such share, warrant, option, right or other
interest is authorized or otherwise existing on any date of determination.

      "EQUITY ISSUANCE" means any issuance by a Person of any Equity Interest
and shall in any event include the issuance of any Equity Interest upon the
conversion or exchange of any security constituting Indebtedness that is
convertible or exchangeable, or is being converted or exchanged, for Equity
Interests.

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

      "ERISA GROUP" means the Borrower and all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414 of the Internal Revenue Code.

      "EVENT OF DEFAULT" means any of the events specified in Section 10.1.,
provided that any requirement for notice or lapse of time or any other condition
has been satisfied.

      "EXCLUDED SUBSIDIARY" means any Wholly Owned Subsidiary of the Borrower
which is prohibited from guarantying the Indebtedness of any other Person
pursuant to any document, instrument or agreement evidencing Secured
Indebtedness of such Subsidiary.

      "EXISTING CREDIT AGREEMENT" means that certain Fifth Amended and Restated
Credit Agreement dated as of January 12, 2001 by and among the Borrower, the
lenders party thereto, Wachovia Bank, N.A., as Administrative Agent, First Union
National Bank, as Syndication Agent and SunTrust Bank, as Documentation Agent.

      "FACILITY FEE" means the per annum percentage set forth in the table below
corresponding to the Level at which the "Applicable Margin" is determined in
accordance with the definition thereof:

<TABLE>
<CAPTION>
     LEVEL                FACILITY FEE
----------------        ----------------
<S>                     <C>
    1 and 2                   0.15%

       3                      0.20%

       4                      0.30%
</TABLE>

As of the Agreement Date, the Facility Fee equals 0.20%.

      "FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upward to the nearest 1/100th of 1%) equal to the weighted average of the rates
on overnight Federal funds

                                       11
<PAGE>
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published by the Federal Reserve Bank of New York
on the Business Day next succeeding such day, provided that (a) if such day is
not a Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day, and (b) if no such rate is
so published on such next succeeding Business Day, the Federal Funds Rate for
such day shall be the average rate quoted to the Agent by federal funds dealers
selected by the Agent on such day on such transaction as determined by the
Agent.

      "FEES" means the fees and commissions provided for or referred to in
Section 3.6. and any other fees payable by the Borrower to the Agent, the Titled
Agents, or the Lenders hereunder or under any other Loan Document.

      "FIXED CHARGES" means for any period, the sum of (a) Interest Expense paid
during such period plus (b) regularly scheduled principal payments on Total
Indebtedness during such period (excluding any balloon, bullet or similar
principal payment payable on any Total Indebtedness which repays such Total
Indebtedness in full) plus (c) all Preferred Dividends paid during such period,
all on a consolidated basis determined in accordance with GAAP on a consistent
basis.

      "FLOATING RATE INDEBTEDNESS" means, as of any given date, all Indebtedness
of the Consolidated Group on a consolidated basis determined in accordance with
GAAP applied on a consistent basis which bears interest at a variable rate
during the scheduled life of such Indebtedness and for which interest rate
"caps", "collars", swap agreements or other hedging arrangements which
effectively cause such variable rates to be equivalent to fixed interest rates
or subject to maximum interest rates have not been obtained.

      "GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession, which are applicable to the circumstances as of the date of
determination.

      "GAAP INTEREST EXPENSE" means with respect to the members of the
Consolidated Group for any period of time determined on a consolidated basis,
the sum of (a) the Interest Expense of such Persons for such Period minus (b)
capitalized interest not funded by a construction loan which is included in
calculating such Interest Expense, in each case on a consolidated basis
determined in accordance with GAAP applied on a consistent basis.

      "GP SUB" means Post GP Holdings, Inc., a Georgia corporation which is a
Wholly Owned Subsidiary of PPI, the general partner of the Borrower and the
owner of a 1% general partner interest in the Borrower as of the Effective Date.

      "GOVERNMENTAL APPROVALS" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.

      "GOVERNMENTAL AUTHORITY" means any national, state or local government
(whether domestic or foreign), any political subdivision thereof or any other
governmental,

                                       12
<PAGE>
quasi-governmental, judicial, public or statutory instrumentality, authority,
body, agency, bureau or entity (including, without limitation, the Federal
Deposit Insurance Corporation, the Comptroller of the Currency or the Federal
Reserve Board, any central bank or any comparable authority) or any arbitrator
with authority to bind a party at law.

      "GROSS ASSET VALUE" on a consolidated basis for the Consolidated Group,
shall mean as of any date of determination the sum (without duplication) of the
following:

      (a) the aggregate amount of the unpledged portion of all unrestricted cash
and Cash Equivalents of each member of the Consolidated Group; plus

      (b) with respect to each Stabilized Multifamily Property, the Net
Operating Income for such Stabilized Multifamily Property for the most recent
four fiscal quarters, divided by the Capitalization Rate; provided, however,
that if such Multifamily Property first became a Stabilized Multifamily Property
at any time after the commencement of such four fiscal quarter period, the
valuation in this clause (b) shall be made on an annualized basis using the Net
Operating Income for the period of one, two or three most recent fiscal
quarters, as the case may be, during which such Multifamily Property constituted
a Stabilized Multifamily Property (with such Net Operating Income being
multiplied by four, two, or one and one-third, as applicable, and with such
total being divided by the Capitalization Rate); plus

      (c) with respect to each Other Multifamily Property, the undepreciated
GAAP book value of such Other Multifamily Property; plus

      (d) the undepreciated GAAP book value of Construction-In-Process of the
Borrower and its Subsidiaries; plus

      (e) the Bond Enhancement Value; plus

      (f) the undepreciated GAAP book value of Unimproved Land and Notes
Receivable; plus

      (g) Eligible QI Cash and Cash Equivalents limited to 10% of Gross Asset
Value; plus

      (h) the Borrower's and its Subsidiaries' pro rata share of the preceding
items of any Unconsolidated Affiliate of the Borrower or its Subsidiaries
(determined in a manner consistent with the foregoing).

      Gross Asset Value shall be calculated on a pro forma basis as if assets
acquired during the relevant period were owned as of the beginning of the
relevant period, and all assets disposed of during the relevant period were not
owned during any portion of the relevant period.

      "GROUND LEASE" means an Eligible Ground Lease or an Ineligible Ground
Lease.

                                       13
<PAGE>
      "GUARANTORS" means, individually and collectively, as the context shall
require, PPI, GP Sub, LP Sub, any Significant Subsidiary which becomes a
Guarantor and any Subsidiary that elects to become a Guarantor.

      "GUARANTY", "GUARANTEED" or to "GUARANTEE" as applied to any obligation
means and includes: (a) a guaranty (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), directly or
indirectly, in any manner, of any part or all of such obligation, or (b) an
agreement, direct or indirect, contingent or otherwise, and whether or not
constituting a guaranty, the practical effect of which is to assure the payment
or performance (or payment of damages in the event of nonperformance) of any
part or all of such obligation whether by: (i) the purchase of securities or
obligations, (ii) the purchase, sale or lease (as lessee or lessor) of property
or the purchase or sale of services primarily for the purpose of enabling the
obligor with respect to such obligation to make any payment or performance (or
payment of damages in the event of nonperformance) of or on account of any part
or all of such obligation, or to assure the owner of such obligation against
loss, (iii) the supplying of funds to or in any other manner investing in the
obligor with respect to such obligation, (iv) repayment of amounts drawn down by
beneficiaries of letters of credit (including Letters of Credit), or (v) the
supplying of funds to or investing in a Person on account of all or any part of
such Person's obligation under a Guaranty of any obligation or indemnifying or
holding harmless, in any way, such Person against any part or all of such
obligation. As the context requires, "Guaranty" shall also mean the Guaranty to
which the Guarantors are parties substantially in the form of Exhibit O.

      "HAZARDOUS MATERIALS" means all or any of the following: (a) substances
that are defined or listed in, or otherwise classified pursuant to, any
applicable Environmental Laws as "hazardous substances", "hazardous materials",
"hazardous wastes", "toxic substances" or any other formulation intended to
define, list or classify substances by reason of deleterious properties such as
ignitability, corrosivity, reactivity, carcinogenicity, reproductive toxicity,
"TCLP" toxicity or "EP toxicity"; (b) oil, petroleum or petroleum derived
substances, natural gas, natural gas liquids or synthetic gas and drilling
fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal resources; (c)
any flammable substances or explosives or any radioactive materials; (d)
asbestos in any form; and (e) electrical equipment which contains any oil or
dielectric fluid containing levels of polychlorinated biphenyls in excess of
fifty parts per million.

      "INDEBTEDNESS" means, with respect to a Person, at the time of computation
thereof, all of the following (without duplication): (a) all obligations of such
Person in respect of money borrowed; (b) all obligations of such Person, whether
or not for money borrowed (i) represented by notes payable, or drafts accepted,
in each case representing extensions of credit, (ii) evidenced by bonds,
debentures, notes or similar instruments, or (iii) constituting purchase money
indebtedness, conditional sales contracts, title retention debt instruments or
other similar instruments, upon which interest charges are customarily paid or
that are issued or assumed as full or partial payment for property or services
rendered; (c) Capitalized Lease Obligations of such Person; (d) all
reimbursement obligations of such Person under any letters of credit or
acceptances (whether or not the same have been presented for payment); (e) all
Off-Balance Sheet Obligations of such Person; (f) all obligations of such Person
to purchase, redeem, retire, defease or otherwise make any payment in respect of
any Mandatorily Redeemable Stock issued

                                       14
<PAGE>
by such Person or any other Person, valued at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends; (g) all
obligations of such Person with respect to any take-out commitment to the extent
all conditions to such commitment have been satisfied or waived net of asset
value (but not less than zero); (h) all obligations of such Person with respect
to any forward equity commitment net, in the case of forward equity commitments
to acquire multifamily real estate assets or equity interests in a Person owning
directly or indirectly multifamily real estate assets, the value of such real
estate assets or interests therein (but not less than zero); (i) purchase
obligations and repurchase obligations to the extent all conditions to such
purchase or repurchase have been satisfied or waived net of asset value (but not
less than zero); (j) net obligations under any Derivative Contract in an amount
equal to the Derivatives Termination Value thereof; (k) all Indebtedness of
other Persons which such Person has guaranteed or is otherwise recourse to such
Person; (l) all Indebtedness of another Person secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien (other than certain Permitted Liens) on property or
assets owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness or other payment obligation; and (m)
such Person's pro rata share of the Indebtedness of any Unconsolidated Affiliate
of such Person; provided, however, that Indebtedness shall not include (x) any
such obligations subject to defeasance arrangements in accordance with GAAP, or
(y) obligations in respect of Mandatorily Redeemable Stock to the extent of any
sinking fund payments that have been made in connection therewith, but only, in
the case of (x) and (y) such defeasance and sinking fund payments shall be held
as restricted cash that is escrowed or maintained in a trust or escrow account
or other fund with one or more trustees relating to the applicable indenture or
other agreement pertaining to such obligations; and provided, further, that
Indebtedness described in the foregoing clauses (g), (h) and (i) shall not
include any such obligation that can be satisfied solely by the issuance of
Equity Interests (other than Mandatorily Redeemable Stock).

      "INELIGIBLE GROUND LEASE" means a ground lease other than an Eligible
Ground Lease.

      "INTELLECTUAL PROPERTY" has the meaning given that term in Section
6.1.(s).

      "INTEREST EXPENSE" means for any period for the Consolidated Group
(without duplication), (a) all interest expense incurred for such period,
including capitalized interest not funded under a construction loan, plus (b)
recurring fees (such as recurring issuer, trustee and credit enhancement fees),
whether paid or accrued, in connection with Tax Exempt Bonds or other credit
enhanced Indebtedness of any member of the Consolidated Group for such period
plus (c) the Borrower's or any of its Subsidiaries's pro rata share of the
foregoing from Unconsolidated Affiliates, in each case on a consolidated basis
determined in accordance with GAAP applied on a consistent basis.

      "INTEREST PERIOD" means:

      (a) with respect to any LIBOR Loan, each period commencing on the date
such LIBOR Loan is made or the last day of the next preceding Interest Period
for such Loan and ending 7 days or 1, 2, 3 or 6 months thereafter, as the
Borrower may select in a Notice of Borrowing, Notice of Continuation or Notice
of Conversion, as the case may be, except that each

                                       15
<PAGE>
Interest Period of 1, 2, 3 or 6 months days duration that commences on the last
Business Day of a calendar month shall end on the last Business Day of the
appropriate subsequent calendar month; and

      (b) with respect to any Bid Rate Loan, the period commencing on the date
such Bid Rate Loan is made and ending on any Business Day not less than 7 nor
more than 360 days thereafter, as the Borrower may select as provided in Section
2.2.(b).

Notwithstanding the foregoing: (i) if any Interest Period would otherwise end
after the Termination Date, such Interest Period shall end on the Termination
Date; and (ii) each Interest Period that would otherwise end on a day which is
not a Business Day shall end on the next Business Day (or, if the next Business
Day falls in the next calendar month, then on the immediately preceding Business
Day).

      "INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended.

      "INVESTMENT" means, with respect to any Person, any acquisition or
investment (whether or not of a controlling interest) by such Person, by means
of any of the following: (a) the purchase or other acquisition of any Equity
Interest in another Person, (b) a loan, advance or extension of credit to,
capital contribution to, Guaranty of Indebtedness of, or purchase or other
acquisition of any Indebtedness of, another Person, including any partnership or
joint venture interest in such other Person, or (c) the purchase or other
acquisition (in one transaction or a series of transactions) of assets of
another Person that constitute the business or a division or operating unit of
another Person. Notwithstanding the foregoing to the contrary, Investments in
Development Properties shall include the budgeted costs described in the
definition of Development Properties. Any binding commitment or option to make
an Investment in any other Person shall constitute an Investment. Except as
expressly provided otherwise, for purposes of determining compliance with any
covenant contained in a Loan Document, the amount of any Investment shall be the
amount actually invested, without adjustment for subsequent increases or
decreases in the value of such Investment.

      "INVESTMENT GRADE RATING" means a Credit Rating of BBB-/Baa3 (or
equivalent) or higher from either of the Rating Agencies.

      "L/C COMMITMENT AMOUNT" equals $20,000,000.

      "LP SUB" means Post LP Holdings, Inc., a Georgia corporation which is a
Wholly Owned Subsidiary of PPI and the owner of a majority of the limited
partnership interests in the Borrower as of the Effective Date.

      "LENDER" means each financial institution from time to time party hereto
as a "Lender" or a "Designated Lender," together with its respective successors
and permitted assigns, and as the context requires, includes the Swingline
Lender; provided, however, that the term "Lender" shall exclude each Designated
Lender when used in reference to any Loan other than a Bid Rate Loan, the
Commitments or terms relating to any Loan other than a Bid Rate Loan and the
Commitments and shall further exclude each Designated Lender for all other
purposes under the

                                       16
<PAGE>
Loan Documents except that any Designated Lender which funds a Bid Rate Loan
shall, subject to Section 12.5.(e), have the rights (including the rights given
to a Lender contained in Sections 12.2. and 12.9.) and obligations of a Lender
associated with holding such Bid Rate Loan.

      "LENDING OFFICE" means, for each Lender and for each Type of Loan, the
office of such Lender specified as such on its signature page hereto or in the
applicable Assignment and Acceptance Agreement, or such other office of such
Lender as such Lender may notify the Agent in writing from time to time.

      "LETTER OF CREDIT" has the meaning given that term in Section 2.4.(a).

      "LETTER OF CREDIT DOCUMENTS" means, with respect to any Letter of Credit,
collectively, any application therefor, any certificate or other document
presented in connection with a drawing under such Letter of Credit and any other
agreement, instrument or other document governing or providing for (a) the
rights and obligations of the parties concerned or at risk with respect to such
Letter of Credit or (b) any collateral security for any of such obligations.

      "LETTER OF CREDIT LIABILITIES" means, without duplication, at any time and
in respect of any Letter of Credit, the sum of (a) the Stated Amount of such
Letter of Credit plus (b) the aggregate unpaid principal amount of all
Reimbursement Obligations of the Borrower at such time due and payable in
respect of all drawings made under such Letter of Credit. For purposes of this
Agreement, a Lender (other than the Lender acting as the Agent) shall be deemed
to hold a Letter of Credit Liability in an amount equal to its participation
interest in the related Letter of Credit under Section 2.4.(i), and the Lender
acting as the Agent shall be deemed to hold a Letter of Credit Liability in an
amount equal to its retained interest in the related Letter of Credit after
giving effect to the acquisition by the Lenders other than the Lender acting as
the Agent of their participation interests under such Section.

      "LEVEL REDUCTION TRIGGERING EVENT" means, as of the end of any fiscal
quarter of PPI and the Borrower, the occurrence of either of the following
events: (a) the ratio of Total Indebtedness at the end of such fiscal quarter to
Gross Asset Value at the end of such fiscal quarter exceeds 0.55 to 1.0, or (b)
the ratio of Adjusted EBITDA to Fixed Charges for the 4 fiscal quarter period
then ending is less than 1.65 to 1.0.

      "LIBOR" means, for any LIBOR Loan for any Interest Period therefor, the
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If for any reason such rate is not
available, the term "LIBOR" shall mean, for any LIBOR Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on the Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest Period
for a term comparable to such Interest Period; provided, however, if more than
one rate is specified on the Reuters Screen LIBO Page, the applicable rate shall
be the arithmetic mean of all such rates.

                                       17
<PAGE>
      "LIBOR LOAN" means a Revolving Loan bearing interest at a rate based on
LIBOR.

      "LIEN" as applied to the property of any Person means: (a) any security
interest, encumbrance, mortgage, deed to secure debt, deed of trust, pledge,
lien, charge or lease constituting a Capitalized Lease Obligation, conditional
sale or other title retention agreement, or other security title or encumbrance
of any kind in respect of any property of such Person, or upon the income or
profits therefrom; (b) any arrangement under which any property of such Person
is transferred, sequestered or otherwise identified for the purpose of
subjecting the same to the payment of Indebtedness or performance of any other
obligation in priority to the payment of the general, unsecured creditors of
such Person; (c) the filing of any financing statement under the Uniform
Commercial Code or its equivalent in any jurisdiction, other than a financing
statement filed (i) in respect of a lease not constituting a Capitalized Lease
Obligation pursuant to Section 9-505 (or a successor provision) of the Uniform
Commercial Code as in effect in an applicable jurisdiction or (ii) in connection
with a sale or other disposition of accounts or other assets not prohibited by
this Agreement in a transaction not otherwise constituting or giving rise to a
Lien; and (d) any agreement by such Person to grant, give or otherwise convey
any of the foregoing.

      "LOAN" means a Revolving Loan, a Bid Rate Loan or a Swingline Loan.

      "LOAN DOCUMENT" means this Agreement, each Note, each Letter of Credit
Document, the Guaranty and each other document or instrument now or hereafter
executed and delivered by a Loan Party in connection with, pursuant to or
relating to this Agreement.

      "LOAN PARTY" means each of the Borrower and each other Person who
guarantees all or a portion of the Obligations and/or who pledges any collateral
security to secure all or a portion of the Obligations. Schedule 1.1.(A) sets
forth the Loan Parties in addition to the Borrower as of the Agreement Date.

      "MANDATORILY REDEEMABLE STOCK" means, with respect to any Person, any
Equity Interest of such Person which by the terms of such Equity Interest (or by
the terms of any security into which it is convertible or for which it is
exchangeable or exercisable), upon the happening of any event or otherwise (a)
matures or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise (other than an Equity Interest which is redeemable solely in exchange
for common stock or other equivalent common Equity Interests), (b) is
convertible into or exchangeable or exercisable for Indebtedness or Mandatorily
Redeemable Stock, or (c) is redeemable at the option of the holder thereof, in
whole or in part (other than an Equity Interest which is redeemable solely in
exchange for common stock or other equivalent common Equity Interests), in each
case on or prior to the date on which all Revolving Loans are scheduled to be
due and payable in full.

      "MATERIAL ADVERSE EFFECT" means a materially adverse effect on (a) the
business, properties, financial condition or operations of the Borrower and its
Subsidiaries taken as a whole, (b) the ability of the Borrower or any other Loan
Party to perform its obligations under any Loan Document to which it is a party,
(c) the validity or enforceability of any of the Loan Documents, (d) the rights
and remedies of the Lenders and the Agent under any of the Loan

                                       18
<PAGE>
Documents or (e) the timely payment of the principal of or interest on the Loans
or other amounts payable in connection therewith.

      "MATERIAL PLAN" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $10,000,000.

      "MATERIAL SUBSIDIARY" means any Subsidiary that comprises at least 5% of
Unencumbered Asset Value.

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

      "MORTGAGE" means a mortgage, deed of trust, deed to secure debt or similar
security instrument made by a Person owning an interest in real property
granting a Lien on such interest in real property as security for the payment of
Indebtedness of such Person or another Person.

      "MULTIEMPLOYER PLAN" means at any time multiemployer plan within the
meaning of Section 4001(a)(3) of ERISA to which any member of the ERISA Group is
then making or accruing an obligation to make contributions or has within the
preceding five plan years made contributions, including for these purposes any
Person which ceased to be a member of the ERISA Group during such five year
period.

      "MULTIFAMILY PROPERTY" means a Property improved with one or more
residential apartment communities (including the Property known as Post
Riverside).

      "NEGATIVE PLEDGE" means a provision of any agreement (other than this
Agreement or any other Loan Document) that prohibits or limits the creation of
any Lien on any assets of a Person as security for Indebtedness of the Person
owning such asset or any other Person; provided, however, that for purposes of
this Agreement the following shall not be deemed to constitute a "Negative
Pledge": (i) provisions in agreements or instruments evidencing or governing
senior Indebtedness that have the effect of imposing limitations or restrictions
on the amount of secured Indebtedness that the Borrower or any Subsidiary or
other Loan Party may incur or maintain, or (ii) provisions in any agreements
relating to the sale of a Subsidiary, or any asset of the Borrower, any
Subsidiary, or any other Loan Party, pending such sale, provided that any such
provision applies only to the Subsidiary or the asset that is to be sold.

      "NET OPERATING INCOME" means, for any period for any Multifamily Property,
the sum of the following (without duplication): (a) rents and other revenues
received in the ordinary course from such Multifamily Property (excluding
pre-paid rents and revenues and security deposits except to the extent applied
in satisfaction of tenants' obligations for rent) minus (b) all expenses paid or
accrued related to the ownership, operation or maintenance of such Multifamily
Property, including but not limited to taxes, assessments and the like,
insurance, utilities, payroll costs, maintenance, repair and landscaping
expenses, marketing expenses, and general and administrative expenses (including
an appropriate allocation for legal, accounting, advertising, marketing and
other expenses incurred in connection with such Multifamily Property, but
specifically excluding general overhead expenses of the Borrower or any
subsidiary and any property management fees) minus (c) the Capital Reserves for
such Multifamily Property for

                                       19
<PAGE>
such period minus (d) the greater of (i) the actual property management fee paid
during such period with respect to such Multifamily Property and (ii) an imputed
management fee in the amount of three percent (3.0%) of the gross revenues for
such Multifamily Property for such period minus (e) in the case of each
Designated Property, operating cash flow distributions paid to the non-affiliate
partner of the Subsidiary that owns such Designated Property.

      "NET PROCEEDS" means with respect to any Equity Issuance by a Person, the
aggregate amount of all cash and the book value (for financial accounting
purposes) of all other property received by such Person in respect of such
Equity Issuance net of investment banking fees, legal fees, accountants' fees,
underwriting discounts and commissions and other customary fees and expenses
actually incurred by such Person in connection with such Equity Issuance.

      "NON-MULTIFAMILY PROPERTY" means any Property for which greater than 20%
of the square footage is attributable to uses other than multifamily apartment
rental use, but excluding Post Riverside mixed-use property.

      "NONRECOURSE INDEBTEDNESS" means, with respect to a Person, Indebtedness
for borrowed money in respect of which recourse for payment (except for
customary exceptions for fraud, misapplication of funds, environmental
indemnities, and other customary exceptions to recourse liability) is
contractually limited to specific assets of such Person encumbered by a Lien
securing such Indebtedness.

      "NOTE" means a Revolving Note, a Bid Rate Note or a Swingline Note.

      "NOTES RECEIVABLE" mean mortgage and notes receivable and reimbursement
agreements (to the extent obligations are payable under such reimbursement
agreements), including interest payments thereunder, of each member of the
Consolidated Group (other than such mortgage and notes receivable and
reimbursement agreements owing from other members of the Consolidated Group).

      "NOTICE OF BORROWING" means a notice in the form of Exhibit C to be
delivered to the Agent pursuant to Section 2.1.(b) evidencing the Borrower's
request for a borrowing of Revolving Loans.

      "NOTICE OF CONTINUATION" means a notice in the form of Exhibit D to be
delivered to the Agent pursuant to Section 2.9. evidencing the Borrower's
request for the Continuation of a LIBOR Loan.

      "NOTICE OF CONVERSION" means a notice in the form of Exhibit E to be
delivered to the Agent pursuant to Section 2.10. evidencing the Borrower's
request for the Conversion of a Loan from one Type to another Type.

      "NOTICE OF SWINGLINE BORROWING" means a notice in the form of Exhibit F to
be delivered to the Agent pursuant to Section 2.3. evidencing the Borrower's
request for a borrowing of Swingline Loans.

                                       20
<PAGE>
      "OBLIGATIONS" means, individually and collectively: (a) the aggregate
principal balance of, and all accrued and unpaid interest on, all Loans; (b) all
Reimbursement Obligations and all other Letter of Credit Liabilities; and (c)
all other indebtedness, liabilities, obligations, covenants and duties of the
Borrower and the other Loan Parties owing to the Agent or any Lender of every
kind, nature and description, under or in respect of this Agreement or any of
the other Loan Documents, including, without limitation, the Fees and
indemnification obligations, whether direct or indirect, absolute or contingent,
due or not due, contractual or tortious, liquidated or unliquidated, and whether
or not evidenced by any promissory note.

      "OFF-BALANCE SHEET OBLIGATIONS" means liabilities and obligations of any
Person in respect of "off-balance sheet arrangements" (as defined in the SEC
Off-Balance Sheet Rules) which such Person would be required to disclose in the
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" section of such Person's report on Form 10-Q or Form 10-K (or their
equivalents) which such Person is required to file with the Securities and
Exchange Commission (or any Governmental Authority substituted therefor). As
used in this definition, the term "SEC Off-Balance Sheet Rules" means the
Disclosure in Management's Discussion and Analysis About Off-Balance Sheet
Arrangements, Securities Act Release No. 33-8182, 68 Fed. Reg. 5982 (Feb. 5,
2003) (to be codified at 17 CFR pts. 228, 229 and 249).

      "OTHER MULTIFAMILY PROPERTY" means, during any fiscal quarter of the
Borrower, each Multifamily Property owned (or leased pursuant to a Ground Lease)
by the Borrower or any of its Subsidiaries that is not a Stabilized Multifamily
Property.

      "PARTICIPANT" has the meaning given that term in Section 12.5.(c).

      "PBGC" means the Pension Benefit Guaranty Corporation and any successor
agency.

      "PERMITTED LIENS" means, as to any Person: (a) Liens securing taxes,
assessments and other charges or levies imposed by any Governmental Authority
(excluding any Lien imposed pursuant to any of the provisions of ERISA or
pursuant to any Environmental Laws) or the claims of materialmen, mechanics,
carriers, warehousemen or landlords for labor, materials, supplies or rentals
incurred in the ordinary course of business, which are not at the time required
to be paid or discharged under Section 7.6; (b) Liens consisting of deposits or
pledges made, in the ordinary course of business, in connection with, or to
secure payment of, obligations under workers' compensation, unemployment
insurance or similar Applicable Laws; (c) Liens consisting of encumbrances in
the nature of zoning restrictions, easements, and rights or restrictions of
record on the use of real property, which do not materially detract from the
value of such property or impair in any material respect the intended use
thereof in the business of such Person; (d) the rights of tenants under leases
or subleases not interfering with the ordinary conduct of business of such
Person; (e) Liens in favor of the Agent for the benefit of the Lender; (f) Liens
in existence as of the Agreement Date and set forth in Schedule 6.1.(f); and (g)
in the case of the Designated Properties, Liens in favor of the Borrower or a
Subsidiary.

      "PERSON" means an individual, corporation, partnership, limited liability
company, association, trust or unincorporated organization, or a government or
any agency or political subdivision thereof.

                                       21
<PAGE>
      "PLAN" means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (a) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (b) has at any time within the
preceding five years been maintained, or contributed to, by any Person which was
at such time a member of the ERISA Group for employees of any Person which was
at such time a member of the ERISA Group.

      "POST-DEFAULT RATE" means, in respect of any principal of any Loan or any
other Obligation that is not paid when due (whether at stated maturity, by
acceleration, by optional or mandatory prepayment or otherwise), a rate per
annum equal to two percent (2.0%) plus the Base Rate as in effect from time to
time.

      "PPI" means Post Properties, Inc., a Georgia corporation, and its
successors and assigns.

      "PREFERRED DIVIDENDS" means, for any period and without duplication, all
Restricted Payments paid during such period on Preferred Securities issued by
any member of the Consolidated Group. Preferred Dividends shall not include
dividends or distributions paid or payable (a) solely in Equity Interests (other
than Mandatorily Redeemable Stock) payable to holders of such class of Equity
Interests; (b) to any member of the Consolidated Group; or (c) constituting or
resulting in the redemption of Preferred Securities, other than scheduled
redemptions not constituting balloon, bullet or similar redemptions in full.

      "PREFERRED SECURITIES" means, with respect to any Person, Equity Interests
in such Person which are entitled to preference or priority over any other
Equity Interest in such Person in respect of the payment of dividends or
distribution of assets upon liquidation or both.

      "PRIME RATE" means the rate of interest per annum announced publicly by
the Lender acting as the Agent as its prime rate from time to time. The Prime
Rate is not necessarily the best or the lowest rate of interest offered by the
Lender acting as the Agent or any other Lender.

      "PRINCIPAL OFFICE" means the office of the Agent located at One Wachovia
Center, Charlotte, North Carolina, or such other office of the Agent as the
Agent may designate from time to time.

      "PROPERTY" means any parcel (or group of related parcels) of real property
owned or leased (in whole or in part) or operated by any member of the
Consolidated Group or, as the context may require, their Unconsolidated
Affiliates, and which is located in a state of the United States of America or
the District of Columbia.

      "RATING AGENCY" means S&P and Moody's.

      "RECEIVABLES" means any right of payment from or on behalf of any obligor,
whether constituting an account, chattel paper, instrument, general intangible
or otherwise, arising from the sale or financing by a member of the Consolidated
Group of merchandise or services, and monies due thereunder, security in the
merchandise and services financed thereby, records

                                       22
<PAGE>
related thereto, and the right to payment of any interest or finance charges and
other obligations with respect thereto, proceeds from claims on insurance
policies related thereto, any other proceeds related thereto, and any other
related rights.

      "REGISTER" has the meaning given that term in Section 12.5.(f).

      "REGULATORY CHANGE" means, with respect to any Lender, any change
effective after the Agreement Date in Applicable Law (including without
limitation, Regulation D of the Board of Governors of the Federal Reserve
System) or the adoption or making after such date of any interpretation,
directive or request applying to a class of banks, including such Lender, of or
under any Applicable Law (whether or not having the force of law and whether or
not failure to comply therewith would be unlawful) by any Governmental Authority
or monetary authority charged with the interpretation or administration thereof
or compliance by any Lender with any request or directive regarding capital
adequacy.

      "REIMBURSEMENT OBLIGATION" means the absolute, unconditional and
irrevocable obligation of the Borrower to reimburse the Agent for any drawing
honored by the Agent under a Letter of Credit.

      "REIT" means a Person qualifying for treatment as a "real estate
investment trust" under the Internal Revenue Code.

      "REQUISITE LENDERS" means, as of any date, Lenders having at least 66 2/3%
of the aggregate amount of the Commitments (not held by Defaulting Lenders who
are not entitled to vote), or, if the Commitments have been terminated or
reduced to zero, Lenders holding at least 66 2/3% of the principal amount of the
Loans and Letter of Credit Liabilities (not held by Defaulting Lenders who are
not entitled to vote).

      "RESPONSIBLE OFFICER" means each of the President, Chief Financial
Officer, and Controller of PPI, G P Sub, or the Borrower, as the case may be.

      "RESTRICTED PAYMENT" means: (a) any dividend or other distribution, direct
or indirect, on account of any Equity Interest of any member of the Consolidated
Group now or hereafter outstanding, except a dividend payable in Equity
Interests; (b) any redemption, conversion, exchange, retirement, sinking fund or
similar payment, purchase or other acquisition for value, direct or indirect, of
any Equity Interest of any member of the Consolidated Group now or hereafter
outstanding, except to the extent the consideration given in respect thereof
constitutes Equity Interests; and (c) any payment made to retire, or to obtain
the surrender of, any outstanding warrants, options or other rights to acquire
any Equity Interests of any member of the Consolidated Group now or hereafter
outstanding, except to the extent such payment is made in Equity Interests.

      "REVOLVING LOAN" means a loan made by a Lender to the Borrower pursuant to
Section 2.1.(a).

      "REVOLVING NOTE" has the meaning given that term in Section 2.11.(a).

                                       23
<PAGE>
      "SECURED INDEBTEDNESS" means, with respect to a Person as of any given
date, the sum of (a) the aggregate principal amount of all Indebtedness of such
Person outstanding at such date and that is secured in any manner by any Lien on
such Person's Property plus (b) such Person's pro rata share of the aggregate
principal amount of all Indebtedness of any of such Person's Unconsolidated
Affiliates outstanding at such date and that is secured in any manner by any
Lien on the Property of such Unconsolidated Affiliate.

      "SECURED RECOURSE INDEBTEDNESS" means, as of any given date, the Total
Secured Indebtedness on such date (other than Bond Enhanced Indebtedness subject
to credit support from FNMA and Taxable FNMA Debt, in each case, existing on the
Agreement Date) that is not Nonrecourse Indebtedness.

      "SECURITIES ACT" means the Securities Act of 1933, as amended from time to
time, together with all rules and regulations issued thereunder.

      "SIGNIFICANT SUBSIDIARY" means any existing or future Wholly Owned
Subsidiary of the Borrower, the assets of which constitute more than 5% of Gross
Asset Value and which is not an Excluded Subsidiary.

      "SOLVENT" means, when used with respect to any Person, that (a) the fair
value and the fair salable value of its assets (excluding any Indebtedness due
from any affiliate of such Person) are each in excess of the fair valuation of
its total liabilities (including all contingent liabilities computed at the
amount which, in light of all the facts and circumstances existing at such time,
represents the amount that could reasonably be expected to become an actual and
matured liability); (b) such Person is able to pay its debts or other
obligations in the ordinary course as they mature; and (c) such Person has
capital not unreasonably small to carry on its business and all business in
which it proposes to be engaged.

      "S&P" means Standard & Poor's Rating Services, a division of The
McGraw-Hill Companies, Inc. and its successors.

      "SPECIFIED EVENT OF DEFAULT" means the Events of Default described in
Sections 10.1.(a), 10.1.(f) and 10.1.(g) of this Agreement

      "STABILIZED MULTIFAMILY PROPERTY" means, during any fiscal quarter of the
Borrower, each Multifamily Property owned (or leased pursuant to a Ground Lease)
by the Borrower or any of its Subsidiaries that either (i) has achieved an 85%
occupancy rate with tenants who are paying rent under executed leases in any
prior fiscal quarter of the Borrower during which such Multifamily Property was
owned or leased by the Borrower or any Subsidiary, or (ii) has been completed
for at least four full fiscal quarters (with completion evidenced by a
Certificate of Occupancy) prior to such fiscal quarter or, with respect to any
Multifamily Property acquired (or newly leased pursuant to a Ground Lease) by
the Borrower or any Subsidiary, has been owned or leased by the Borrower or such
Subsidiary for at least four full fiscal quarters prior to such fiscal quarter.

                                       24
<PAGE>
      "STATED AMOUNT" means, at any time, the amount then available to be drawn
by a beneficiary under a Letter of Credit, after giving effect to any increase
or reduction in effect as of such time in accordance with the terms of such
Letter of Credit.

      "SUBSIDIARY" means, for any Person, any corporation, partnership or other
entity of which at least a majority of the securities or other ownership
interests having by the terms thereof ordinary voting power to elect a majority
of the board of directors or other persons performing similar functions of such
corporation, partnership or other entity (without regard to the occurrence of
any contingency) is at the time directly or indirectly owned or controlled by
such Person or one or more Subsidiaries of such Person or by such Person and one
or more Subsidiaries of such Person, and shall include all Persons the accounts
of which are consolidated with those of such Person pursuant to GAAP. Those
Persons owning or leasing (pursuant to a Ground Lease) the Designated Properties
that are not otherwise Subsidiaries shall nevertheless be deemed to be
Subsidiaries for the purposes of this Agreement.

      "SWINGLINE COMMITMENT" means the Swingline Lender's obligation to make
Swingline Loans pursuant to Section 2.3. in an amount up to, but not exceeding,
$20,000,000, as such amount may be reduced from time to time in accordance with
the terms hereof.

      "SWINGLINE LENDER" means Wachovia Bank, National Association, together
with its respective successors and assigns.

      "SWINGLINE LOAN" means a loan made by the Swingline Lender to the Borrower
pursuant to Section 2.3.(a).

      "SWINGLINE NOTE" means the promissory note of the Borrower payable to the
order of the Swingline Lender in a principal amount equal to the amount of the
Swingline Commitment as originally in effect and otherwise duly completed,
substantially in the form of Exhibit G.

      "TANGIBLE NET WORTH" means at any date the sum of (a) the sum of (i) the
book value of Properties owned by members of the Consolidated Group plus (ii)
accumulated depreciation of Properties owned by members of the Consolidated
Group to the extent reflected in the then book value of the assets of the
members of the Consolidated Group plus (iii) the book value of all other assets
of the members of the Consolidated Group, all determined in accordance with GAAP
on a consolidated basis minus (b) the sum of (i) all amounts appearing on the
assets side of the balance sheet of any member of the Consolidated Group for
assets which would be classified as intangible assets under GAAP plus (ii) all
GAAP liabilities of the Consolidated Group.

      "TAX EXEMPT BONDS" means tax exempt revenue bonds or similar instruments
issued by a Governmental Authority on behalf of any member of the Consolidated
Group, or any of such Person's Unconsolidated Affiliates to finance Multifamily
Properties of such Person.

      "TAXABLE FNMA DEBT" means taxable multifamily housing revenue bonds issued
by the Borrower or other members of the Consolidated Group and supported by
credit enhancement provided by Fannie Mae.

                                       25
<PAGE>
      "TAXES" has the meaning given that term in Section 3.12.

      "TERMINATION DATE" means January 16, 2007.

      "TITLED AGENTS" means the Sole Lead Arranger and Sole Bookrunner, the
Syndication Agent and each Co-Documentation Agent, and their respective
successors and permitted assigns.

      "TOTAL INDEBTEDNESS" means, as of any given date, total Indebtedness of
the Consolidated Group on a consolidated basis determined in accordance with
GAAP applied on a consistent basis.

      "TOTAL SECURED INDEBTEDNESS" means, as of any given date, the sum of (a)
the aggregate principal amount of all Indebtedness of the Consolidated Group on
a consolidated basis determined in accordance with GAAP applied on a consistent
basis outstanding at such date and that is secured in any manner by any Lien on
the Property of any member of the Consolidated Group plus (b) any such member's
pro rata share of the aggregate principal amount of all Indebtedness of any of
such member's Unconsolidated Affiliates on a consolidated basis determined in
accordance with GAAP applied on a consistent basis outstanding at such date and
that is secured in any manner by any Lien on the Property of such Unconsolidated
Affiliate.

      "TYPE" with respect to any Revolving Loan, refers to whether such Loan is
a LIBOR Loan or Base Rate Loan.

      "UNCONSOLIDATED AFFILIATE" means, with respect to any Person, any other
Person in whom such Person holds an Investment, which Investment is accounted
for in the financial statements of such Person on an equity basis of accounting
and whose financial results would not be consolidated under GAAP with the
financial results of such Person on the consolidated financial statements of
such Person.

      "UNENCUMBERED ADJUSTED NET OPERATING INCOME" means, for any Eligible
Property for a given period, Net Operating Income from such Eligible Property
during such period as adjusted for any non-recurring items during such period.

      "UNENCUMBERED ASSET VALUE" means, as of any date, the sum (without
duplication) of:

      (a) with respect to each Stabilized Multifamily Property that is an
Eligible Property, the Unencumbered Adjusted Net Operating Income for such
Stabilized Multifamily Property for the most recent four fiscal quarters,
divided by the Capitalization Rate; provided, however, that if such Eligible
Property first became a Stabilized Multifamily Property at any time after the
commencement of such four fiscal quarter period, the valuation in this clause
(a) shall be made on an annualized basis using the Unencumbered Adjusted Net
Operating Income for the period of one, two or three most recent fiscal
quarters, as the case may be, during which such Eligible Property constituted a
Stabilized Multifamily Property (with such Unencumbered Adjusted Net Operating
Income being multiplied by three, two, or one and one-third, as applicable, and
with such total being divided by the Capitalization Rate); plus

                                       26
<PAGE>
      (b) with respect to each Other Multifamily Property that is an Eligible
Property, the undepreciated GAAP book value of such Other Multifamily Property;
plus

      (c) the undepreciated GAAP book value of Unimproved Land of the Borrower
and its Subsidiaries and Construction-In-Process with respect to Eligible
Properties of the Borrower and its Subsidiaries limited to a maximum amount
equal to 10% of Unencumbered Asset Value.

Notwithstanding the foregoing, the sum of (without duplication) (i) the
Unencumbered Asset Value attributable to Eligible Properties owned by
Subsidiaries of the Borrower that are not Guarantors, plus (ii) the Unencumbered
Asset Value attributable to Eligible Properties owned by Subsidiaries of the
Borrower that are not Wholly Owned Subsidiaries, plus (iii) the Unencumbered
Asset Value attributable to the Designated Properties shall be limited to a
maximum amount equal to 10% of the Unencumbered Asset Value; provided, the
Unencumbered Asset Value attributable to the Designated Properties shall be
limited to a maximum amount equal to 4% of the Unencumbered Asset Value.

Unencumbered Asset Value shall be calculated on a pro forma basis as if assets
acquired during the relevant period were owned as of the beginning of the
relevant period, and all assets disposed of during the relevant period were not
owned during any portion of the relevant period.

      "UNFUNDED LIABILITIES" means, with respect to any Plan at any time, the
amount (if any) by which (a) the value of all benefit liabilities under such
Plan, determined on a plan termination basis using the assumptions prescribed by
the PBGC for purposes of Section 4044 of ERISA, exceeds (b) the fair market
value of all Plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of a member of the ERISA Group to the
PBGC or any other Person under Title IV of ERISA.

      "UNIMPROVED LAND" consists of land acquired for which no development has
occurred and for which no development is scheduled to commence in the following
12 months.

      "UNSECURED INDEBTEDNESS" means, as of a given date, Total Indebtedness
that is not Total Secured Indebtedness.

      "WACHOVIA" means Wachovia Bank, National Association together with its
successors and assigns.

      "WHOLLY OWNED SUBSIDIARY" means any Subsidiary of a Person in respect of
which all of the equity securities or other ownership interests (other than, in
the case of a corporation, directors' qualifying shares) are at the time
directly or indirectly owned or controlled by such Person or one or more other
Subsidiaries of such Person or by such Person and one or more other Subsidiaries
of such Person.

                                       27
<PAGE>
SECTION 1.2. GENERAL; REFERENCES TO TIMES.

      Unless otherwise indicated, all accounting terms, ratios and measurements
shall be interpreted or determined in accordance with GAAP in effect as of the
Agreement Date. References in this Agreement to "Sections", "Articles",
"Exhibits" and "Schedules" are to sections, articles, exhibits and schedules
herein and hereto unless otherwise indicated. references in this Agreement to
any document, instrument or agreement (a) shall include all exhibits, schedules
and other attachments thereto, (b) shall include all documents, instruments or
agreements issued or executed in replacement thereof, to the extent permitted
hereby and (c) shall mean such document, instrument or agreement, or replacement
or predecessor thereto, as amended, supplemented, restated or otherwise modified
as of the date of this Agreement and from time to time thereafter to the extent
not prohibited hereby and in effect at any given time. Wherever from the context
it appears appropriate, each term stated in either the singular or plural shall
include the singular and plural, and pronouns stated in the masculine, feminine
or neuter gender shall include the masculine, the feminine and the neuter.
Unless explicitly set forth to the contrary, a reference to "Subsidiary" means a
Subsidiary of the Borrower or a Subsidiary of such Subsidiary and a reference to
an "Affiliate" means a reference to an Affiliate of the Borrower. Titles and
captions of Articles, Sections, subsections and clauses in this Agreement are
for convenience only, and neither limit nor amplify the provisions of this
Agreement. Unless otherwise indicated, all references to time are references to
Charlotte, North Carolina time.

                           ARTICLE II. CREDIT FACILITY

SECTION 2.1. REVOLVING LOANS.

      (a) Generally. Subject to the terms and conditions hereof, during the
period from the Effective Date to but excluding the Termination Date, each
Lender severally and not jointly agrees to make Revolving Loans to the Borrower
in an aggregate principal amount at any one time outstanding up to, but not
exceeding, the amount of such Lender's Commitment. Subject to the terms and
conditions of this Agreement, during the period from the Effective Date to but
excluding the Termination Date, the Borrower may borrow, repay and reborrow
Revolving Loans hereunder.

      (b) Requesting Revolving Loans. The Borrower shall give the Agent notice
pursuant to a Notice of Borrowing or telephonic notice of each borrowing of
Revolving Loans. Each Notice of Borrowing shall be delivered to the Agent before
12:00 noon (i) in the case of LIBOR Loans, on the date three Business Days prior
to the proposed date of such borrowing and (ii) in the case of Base Rate Loans,
on the proposed date of such borrowing. Any such telephonic notice shall include
all information to be specified in a written Notice of Borrowing and shall be
promptly confirmed in writing by the Borrower pursuant to a Notice of Borrowing
sent to the Agent by telecopy on the same day of the giving of such telephonic
notice. The Agent will transmit by telecopy the Notice of Borrowing (or the
information contained in such Notice of Borrowing) to each Lender promptly upon
receipt by the Agent. Each Notice of Borrowing or telephonic notice of each
borrowing shall be irrevocable once given and binding on the Borrower.

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<PAGE>
      (c) Disbursements of Revolving Loan Proceeds. No later than 1:00 p.m. on
the date specified in the Notice of Borrowing, each Lender will make available
for the account of its applicable Lending Office to the Agent at the Principal
Office, in immediately available funds, the proceeds of the Revolving Loan to be
made by such Lender. With respect to Revolving Loans to be made after the
Effective Date, unless the Agent shall have been notified by any Lender prior to
the specified date of borrowing that such Lender does not intend to make
available to the Agent the Revolving Loan to be made by such Lender on such
date, the Agent may assume that such Lender will make the proceeds of such
Revolving Loan available to the Agent on the date of the requested borrowing as
set forth in the Notice of Borrowing and the Agent may (but shall not be
obligated to), in reliance upon such assumption, make available to the Borrower
the amount of such Revolving Loan to be provided by such Lender. Subject to
satisfaction of the applicable conditions set forth in Article V. for such
borrowing, the Agent will make the proceeds of such borrowing available to the
Borrower no later than 3:00 p.m. on the date and at the account specified by the
Borrower in such Notice of Borrowing.

SECTION 2.2. BID RATE LOANS.

      (a) Bid Rate Loans. So long as the Borrower maintains an Investment Grade
Rating, in addition to borrowings of Revolving Loans, at any time during the
period from the Effective Date to but excluding the Termination Date the
Borrower may, as set forth in this Section, request the Lenders to make offers
to make Bid Rate Loans to the Borrower in Dollars. The Lenders may, but shall
have no obligation to, make such offers and the Borrower may, but shall have no
obligation to, accept any such offers in the manner set forth in this Section.

      (b) Requests for Bid Rate Loans. When the Borrower wishes to request from
the Lenders offers to make Bid Rate Loans, it shall give the Agent notice (a
"Bid Rate Quote Request") so as to be received no later than 10:00 a.m. on the
Business Day that is two Business Days prior to the date of borrowing proposed
therein. The Agent shall deliver to each Lender a copy of each Bid Rate Quote
Request promptly upon receipt thereof by the Agent. The Borrower may request
offers to make Bid Rate Loans for up to three (3) different Interest Periods in
each Bid Rate Quote Request; provided that the request for each separate
Interest Period shall be deemed to be a separate Bid Rate Quote Request for a
separate borrowing (a "Bid Rate Borrowing"). Each Bid Rate Quote Request shall
be substantially in the form of Exhibit H and shall specify as to each Bid Rate
Borrowing:

            (i) the proposed date of such Bid Rate Borrowing, which shall be a
      Business Day;

            (ii) the aggregate amount of such Bid Rate Borrowing, which (x)
      shall be in the minimum amount of $3,000,000 and integral multiples of
      $1,000,000 and (y) shall not cause any of the limits specified in Section
      2.14. to be violated; and

            (iii) the duration of the Interest Period applicable thereto.

Except as otherwise provided in this subsection (b), no Bid Rate Quote Request
shall be given within 5 Business Days (or such other number of days as the
Borrower and the Agent, with the consent of the Requisite Lenders, may agree) of
the giving of any other Bid Rate Quote Request.

                                       29
<PAGE>
      (c) Bid Rate Quotes.

            (i) Each Lender may submit one or more Bid Rate Quotes, each
      containing an offer to make a Bid Rate Loan in response to any Bid Rate
      Quote Request; provided that, if the Borrower's request under Section
      2.2.(b) specified more than one Interest Period, such Lender may make a
      single submission containing one or more Bid Rate Quotes for each such
      Interest Period. Each Bid Rate Quote must be submitted to the Agent not
      later than 10:00 a.m. on the proposed date of borrowing; provided that the
      Lender then acting as Agent may submit a Bid Rate Quote only if it
      notifies the Borrower of the terms of the offer contained therein not
      later than 9:45 a.m. on the proposed date of such borrowing. Subject to
      Articles V. and X., any Bid Rate Quote so made shall be irrevocable except
      with the consent of the Agent given at the request of the Borrower. Any
      Bid Rate Loan may be funded by a Lender's Designated Lender (if any) as
      provided in Section 12.5.(e), however such Lender shall not be required to
      specify in its Bid Rate Quote whether such Bid Rate Loan will be funded by
      such Designated Lender.

            (ii) Each Bid Rate Quote shall be substantially in the form of
      Exhibit I and shall specify:

                  (A) the proposed date of borrowing and the Interest Period
            therefor;

                  (B) the principal amount of the Bid Rate Loan for which each
            such offer is being made; provided that the aggregate principal
            amount of all Bid Rate Loans for which a Lender submits Bid Rate
            Quotes (x) may be greater or less than the Commitment of such Lender
            but (y) shall not exceed the principal amount of the Bid Rate
            Borrowing for a particular Interest Period for which offers were
            requested;

                  (C) the rate of interest per annum (rounded upwards, if
            necessary, to the nearest 1/10,000th of 1%) offered for each such
            Bid Rate Loan (the "Bid Rate"); and

                  (D) the identity of the quoting Lender.

      Unless otherwise agreed by the Agent and the Borrower, no Bid Rate Quote
      shall contain qualifying, conditional or similar language or propose terms
      other than or in addition to those set forth in the applicable Bid Rate
      Quote Request and, in particular, no Bid Rate Quote may be conditioned
      upon acceptance by the Borrower of all (or some specified minimum) of the
      principal amount of the Bid Rate Loan for which such Bid Rate Quote is
      being made.

      (d) Notification by Agent. The Agent shall, as promptly as practicable
after the Bid Rate Quotes are submitted (but in any event not later than 10:30
a.m. on the proposed date of borrowing), notify the Borrower of the terms (i) of
any Bid Rate Quote submitted by a Lender that is in accordance with Section
2.2.(c) and (ii) of any Bid Rate Quote that amends, modifies or

                                       30
<PAGE>
is otherwise inconsistent with a previous Bid Rate Quote submitted by such
Lender with respect to the same Bid Rate Quote Request. Any such subsequent Bid
Rate Quote shall be disregarded by the Agent unless such subsequent Bid Rate
Quote is submitted solely to correct a manifest error in such former Bid Rate
Quote. The Agent's notice to the Borrower shall specify (A) the aggregate
principal amount of the Bid Rate Borrowing for which offers have been received
and (B) the principal amounts and Bid Rates so offered by each Lender
(identifying the Lender that made each Bid Rate Quote).

      (e) Acceptance by Borrower.

            (i) Not later than 11:00 a.m. on the proposed date of borrowing, the
      Borrower shall notify the Agent of its acceptance or nonacceptance of the
      offers so notified to it pursuant to Section 2.2.(d) which notice shall be
      in the form of Exhibit J. In the case of acceptance, such notice shall
      specify the aggregate principal amount of offers for each Interest Period
      that are accepted. The failure of the Borrower to give such notice by such
      time shall constitute nonacceptance. The Agent shall promptly notify each
      affected Lender. The Borrower may accept any Bid Rate Quote in whole or in
      part; provided that:

                  (A) the aggregate principal amount of each Bid Rate Borrowing
            may not exceed the applicable amount set forth in the related Bid
            Rate Quote Request;

                  (B) the aggregate principal amount of each Bid Rate Borrowing
            shall comply with the provisions of Section 3.5. but shall not cause
            the limits specified in Section 2.14. to be violated;

                  (C) acceptance of offers may be made only in ascending order
            of Bid Rates in each case beginning with the lowest rate so offered;

                  (D) the Borrower may not accept any Bid Rate Quote that fails
            to comply with Section 2.2.(c) or otherwise fails to comply with the
            requirements of this Agreement); and

                  (E) any acceptance in part shall be in a minimum amount of
            $3,000,000 and integral multiples of $1,000,000 in excess thereof.

            (ii) If offers are made by two or more Lenders with the same Bid
      Rates for a greater aggregate principal amount than the amount in respect
      of which offers are permitted to be accepted for the related Interest
      Period, the principal amount of Bid Rate Loans in respect of which such
      offers are accepted shall be allocated by the Agent among such Lenders in
      proportion to the aggregate principal amount of such offers.
      Determinations by the Agent of the amounts of Bid Rate Loans shall be
      conclusive in the absence of manifest error.

      (f) Obligation to Make Bid Rate Loans. The Agent shall promptly notify
each Lender whose Bid Rate Quote has been accepted and the amount and rate
thereof. A Lender who is notified that it has been selected to make a Bid Rate
Loan may designate its Designated Lender (if any) to fund such Bid Rate Loan on
its behalf, as described in Section 12.5.(e). Any

                                       31
<PAGE>
Designated Lender which funds a Bid Rate Loan shall on and after the time of
such funding become the obligee under such Bid Rate Loan and be entitled to
receive payment thereof when due. No Lender shall be relieved of its obligation
to fund a Bid Rate Loan, and no Designated Lender shall assume such obligation,
prior to the time the applicable Bid Rate Loan is funded. Any Lender whose offer
to make any Bid Rate Loan has been accepted shall, not later than 3:00 p.m. on
the date specified for the making of such Loan, make the amount of such Loan
available to the Agent at its Principal Office in immediately available funds,
for the account of the Borrower. The amount so received by the Agent shall,
subject to the terms and conditions of this Agreement, be made available to the
Borrower no later than 4:00 p.m. on such date by depositing the same, in
immediately available funds, in an account of the Borrower designated by the
Borrower.

      (g) No Effect on Commitment. Except for the purpose and to the extent
expressly stated in Section 2.12., the amount of any Bid Rate Loan made by any
Lender shall not constitute a utilization of such Lender's Commitment.

SECTION 2.3. SWINGLINE LOANS.

      (a) Swingline Loans. Subject to the terms and conditions hereof, during
the period from the Effective Date to but excluding the Termination Date, the
Swingline Lender agrees to make Swingline Loans to the Borrower in an aggregate
principal amount at any one time outstanding up to, but not exceeding, the
amount of the Swingline Commitment. If at any time the aggregate principal
amount of the Swingline Loans outstanding at such time exceeds the Swingline
Commitment in effect at such time, the Borrower shall immediately pay the Agent
for the account of the Swingline Lender the amount of such excess. Subject to
the terms and conditions of this Agreement, the Borrower may borrow, repay and
reborrow Swingline Loans hereunder.

      (b) Procedure for Borrowing Swingline Loans. The Borrower shall give the
Agent and the Swingline Lender notice pursuant to a Notice of Swingline
Borrowing or telephonic notice of each borrowing of a Swingline Loan. Each
Notice of Swingline Borrowing shall be delivered to the Swingline Lender no
later than 1:00 p.m. on the proposed date of such borrowing. Any such telephonic
notice shall include all information to be specified in a written Notice of
Swingline Borrowing and shall be promptly confirmed in writing by the Borrower
pursuant to a Notice of Swingline Borrowing sent to the Swingline Lender by
telecopy on the same day of the giving of such telephonic notice. On the date of
the requested Swingline Loan and subject to satisfaction of the applicable
conditions set forth in Article V. for such borrowing, the Swingline Lender will
make the proceeds of such Swingline Loan available to the Borrower in Dollars,
in immediately available funds, at the account specified by the Borrower in the
Notice of Swingline Borrowing not later than 4:00 p.m. on such date.

      (c) Interest. Swingline Loans shall bear interest at a per annum rate
equal to the Adjusted Eurodollar Rate for an Interest Period of 30 days plus the
Applicable Margin for LIBOR Loans (or at such other rate or rates as the
Borrower and the Swingline Lender may agree from time to time in writing).
Interest payable on Swingline Loans is solely for the account of the Swingline
Lender. All accrued and unpaid interest on Swingline Loans shall be payable on
the dates and in the manner provided in Section 2.5. with respect to interest on

                                       32
<PAGE>
LIBOR Loans (except as the Swingline Lender and the Borrower may otherwise agree
in writing in connection with any particular Swingline Loan).

      (d) Swingline Loan Amounts, Etc. Each Swingline Loan shall be in the
minimum amount of $1,000,000 and integral multiples of $500,000 or such other
minimum amounts agreed to by the Swingline Lender and the Borrower. Any
voluntary prepayment of a Swingline Loan must be in integral multiples of
$100,000 or the aggregate principal amount of all outstanding Swingline Loans
(or such other minimum amounts upon which the Swingline Lender and the Borrower
may agree) and in connection with any such prepayment, the Borrower must give
the Swingline Lender prior written notice thereof no later than 10:00 a.m. on
the date of such prepayment. The Swingline Loans shall, in addition to this
Agreement, be evidenced by the Swingline Note.

      (e) Repayment and Participations of Swingline Loans. The Borrower agrees
to repay each Swingline Loan within 5 Business Days after the date such
Swingline Loan was made. Notwithstanding the foregoing, the Borrower shall repay
the entire outstanding principal amount of, and all accrued but unpaid interest
on, the Swingline Loans on the Termination Date (or such earlier date as the
Swingline Lender and the Borrower may agree in writing). In lieu of demanding
repayment of any outstanding Swingline Loan from the Borrower, the Swingline
Lender may, on behalf of the Borrower (which hereby irrevocably directs the
Swingline Lender to act on its behalf), request a borrowing of Base Rate Loans
from the Lenders in an amount equal to the principal balance of such Swingline
Loan. The amount limitations of Section 3.5.(a) shall not apply to any borrowing
of Base Rate Loans made pursuant to this subsection. The Swingline Lender shall
give notice to the Agent of any such borrowing of Base Rate Loans not later than
12:00 noon on the proposed date of such borrowing and the Agent shall give
prompt notice of such borrowing to the Lenders. No later than 2:00 p.m. on such
date, each Lender will make available to the Agent at the Principal Office for
the account of Swingline Lender, in immediately available funds, the proceeds of
the Base Rate Loan to be made by such Lender. The Agent shall pay the proceeds
of such Base Rate Loans to the Swingline Lender, which shall apply such proceeds
to repay such Swingline Loan. If the Lenders are prohibited from making Loans
required to be made under this subsection for any reason, including without
limitation, the occurrence of any of the Events of Default described in Sections
10.1.(f) or 10.1.(g), each Lender shall purchase from the Swingline Lender,
without recourse or warranty, an undivided interest and participation to the
extent of such Lender's Commitment Percentage of such Swingline Loan, by
directly purchasing a participation in such Swingline Loan in such amount
(regardless of whether the conditions precedent thereto set forth in Section
5.2. are then satisfied, whether or not the Borrower has submitted a Notice of
Borrowing and whether or not the Commitments are then in effect, any Event of
Default exists or all the Loans have been accelerated) and paying the proceeds
thereof to the Agent for the account of the Swingline Lender in Dollars and in
immediately available funds. If such amount is not in fact made available to the
Swingline Lender by any Lender, the Swingline Lender shall be entitled to
recover such amount on demand from such Lender, together with accrued interest
thereon for each day from the date of demand thereof, at the Federal Funds Rate.
If such Lender does not pay such amount forthwith upon the Swingline Lender's
demand therefor, and until such time as such Lender makes the required payment,
the Swingline Lender shall be deemed to continue to have outstanding Swingline
Loans in the amount of such unpaid participation obligation for all purposes of
the Loan

                                       33
<PAGE>
Documents (other than those provisions requiring the other Lenders to purchase a
participation therein). Further, such Lender shall be deemed to have assigned
any and all payments made of principal and interest on its Loans, and any other
amounts due to it hereunder, to the Swingline Lender to fund Swingline Loans in
the amount of the participation in Swingline Loans that such Lender failed to
purchase pursuant to this Section until such amount has been purchased (as a
result of such assignment or otherwise). A Lender's obligation to purchase such
a participation in a Swingline Loan shall be absolute and unconditional and
shall not be affected by any circumstance whatsoever, including without
limitation, (i) any claim of setoff, counterclaim, recoupment, defense or other
right which such Lender or any other Person may have or claim against the Agent,
the Swingline Lender or any other Person whatsoever, (ii) the occurrence or
continuation of a Default or Event of Default (including without limitation, any
of the Defaults or Events of Default described in Sections 10.1.(f) or 10.1.(g))
or the termination of any Lender's Commitment, (iii) the existence (or alleged
existence) of an event or condition which has had or could have a Material
Adverse Effect, (iv) any breach of any Loan Document by the Agent, any Lender or
the Borrower or (v) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing.

SECTION 2.4. LETTERS OF CREDIT.

      (a) Letters of Credit. Subject to the terms and conditions of this
Agreement, the Agent, on behalf of the Lenders, agrees to issue for the account
of the Borrower during the period from and including the Effective Date to, but
excluding, the date 30 days prior to the Termination Date one or more letters of
credit (each a "Letter of Credit") up to a maximum aggregate Stated Amount at
any one time outstanding not to exceed the L/C Commitment Amount.

      (b) Terms of Letters of Credit. At the time of issuance, the amount, form,
terms and conditions of each Letter of Credit, and of any drafts or acceptances
thereunder, shall be subject to approval by the Agent and the Borrower.
Notwithstanding the foregoing, in no event may the expiration date of any Letter
of Credit extend beyond the earlier of (i) the date one year from its date of
issuance or (ii) the date that is five (5) days prior to the Termination Date.
Notwithstanding the foregoing to the contrary, any Letter of Credit with an
expiration date of up to one year from its date of issuance may provide for the
extension of such expiration date for additional periods of up to one year;
provided, that such extended expiration date may not extend beyond the date
described in the foregoing clause (ii) unless an amount of money equal to the
Stated Amount of such Letter of Credit is paid to the Agent on the date that is
thirty (30) days prior to the Termination Date for deposit into the Cash
Collateral Account.

      (c) Requests for Issuance of Letters of Credit. The Borrower shall give
the Agent written notice (or telephonic notice promptly confirmed in writing) at
least 5 Business Days prior to the requested date of issuance of a Letter of
Credit, such notice to describe in reasonable detail the proposed terms of such
Letter of Credit and the nature of the transactions or obligations proposed to
be supported by such Letter of Credit, and in any event shall set forth with
respect to such Letter of Credit the proposed (i) Stated Amount, (ii) the
beneficiary, and (iii) the expiration date. The Borrower shall also execute and
deliver such customary letter of credit application forms as requested from time
to time by the Agent. Provided the Borrower has given the notice prescribed by
the first sentence of this subsection and subject to the other terms and
conditions of

                                       34
<PAGE>
this Agreement, including the satisfaction of any applicable conditions
precedent set forth in Article V., the Agent shall issue the requested Letter of
Credit on the requested date of issuance for the benefit of the stipulated
beneficiary. Upon the written request of the Borrower, the Agent shall deliver
to the Borrower a copy of each issued Letter of Credit within a reasonable time
after the date of issuance thereof. To the extent any term of a Letter of Credit
Document is inconsistent with a term of any Loan Document, the term of such Loan
Document shall control.

      (d) Reimbursement Obligations. Upon receipt by the Agent from the
beneficiary of a Letter of Credit of any demand for payment under such Letter of
Credit, the Agent shall promptly notify the Borrower of the amount to be paid by
the Agent as a result of such demand and the date on which payment is to be made
by the Agent to such beneficiary in respect of such demand; provided, however,
the Agent's failure to give, or delay in giving, such notice shall not discharge
the Borrower in any respect from the applicable Reimbursement Obligation. The
Borrower hereby unconditionally and irrevocably agrees to pay and reimburse the
Agent for the amount of each demand for payment under such Letter of Credit on
or prior to the date on which payment is to be made by the Agent to the
beneficiary thereunder, without presentment, demand, protest or other
formalities of any kind (other than notice as provided in this subsection). Upon
receipt by the Agent of any payment in respect of any Reimbursement Obligation,
the Agent shall promptly pay to each Lender that has acquired a participation
therein under the second sentence of Section 2.4.(i) such Lender's Commitment
Percentage of such payment.

      (e) Manner of Reimbursement. Upon its receipt of a notice referred to in
the immediately preceding subsection (d), the Borrower shall advise the Agent
whether or not the Borrower intends to borrow hereunder to finance its
obligation to reimburse the Agent for the amount of the related demand for
payment and, if it does, the Borrower shall submit a timely request for such
borrowing as provided in the applicable provisions of this Agreement. If the
Borrower fails to so advise the Agent, or if the Borrower fails to reimburse the
Agent for a demand for payment under a Letter of Credit by the date of such
payment, then (i) if the applicable conditions contained in Article V. would
permit the making of Revolving Loans, the Borrower shall be deemed to have
requested a borrowing of Revolving Loans (which shall be Base Rate Loans) in an
amount equal to the unpaid Reimbursement Obligation and the Agent shall give
each Lender prompt notice of the amount of the Revolving Loan to be made
available to the Agent not later than 1:00 p.m. and (ii) if such conditions
would not permit the making of Revolving Loans, the provisions of subsection (j)
of this Section shall apply. The limitations of Section 3.5.(a) shall not apply
to any borrowing of Base Rate Loans under this subsection.

      (f) Effect of Letters of Credit on Commitments. Upon the issuance by the
Agent of any Letter of Credit and until such Letter of Credit shall have expired
or been terminated, the Commitment of each Lender shall be deemed to be utilized
for all purposes of this Agreement in an amount equal to the product of (i) such
Lender's Commitment Percentage and (ii) the sum of (A) the Stated Amount of such
Letter of Credit plus (B) any related Reimbursement Obligations then
outstanding.

      (g) Agent's Duties Regarding Letters of Credit; Unconditional Nature of
Reimbursement Obligations. In examining documents presented in connection with
drawings under Letters of Credit and making payments under such Letters of
Credit against such

                                       35
<PAGE>
documents, the Agent shall only be required to use the same standard of care as
it uses in connection with examining documents presented in connection with
drawings under letters of credit in which it has not sold participations and
making payments under such letters of credit. The Borrower assumes all risks of
the acts and omissions of, or misuse of the Letters of Credit by, the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation of
the foregoing, neither the Agent nor any of the Lenders shall be responsible for
(i) the form, validity, sufficiency, accuracy, genuineness or legal effects of
any document submitted by any party in connection with the application for and
issuance of or any drawing honored under any Letter of Credit even if it should
in fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (ii) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any Letter of
Credit, or the rights or benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for any reason; (iii) failure
of the beneficiary of any Letter of Credit to comply in fact fully with
conditions required in order to draw upon such Letter of Credit; (iv) errors,
omissions, interruptions or delays in transmission or delivery of any messages,
by mail, cable, telex, telecopy or otherwise, whether or not they be in cipher;
(v) errors in interpretation of technical terms; (vi) any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any Letter of Credit, or of the proceeds thereof; (vii) the misapplication
by the beneficiary of any Letter of Credit, or the proceeds of any drawing under
any Letter of Credit; or (viii) any consequences arising from causes beyond the
control of the Agent or the Lenders. None of the above shall affect, impair or
prevent the vesting of any of the Agent's rights or powers hereunder. Any action
taken or omitted to be taken by the Agent under or in connection with any Letter
of Credit, if taken or omitted in the absence of gross negligence or willful
misconduct, shall not create against the Agent or any Lender any liability to
the Borrower or any Lender. In this connection, the obligation of the Borrower
to reimburse the Agent for any drawing made under any Letter of Credit shall be
absolute, unconditional and irrevocable and shall be paid strictly in accordance
with the terms of this Agreement and any other applicable Letter of Credit
Document under all circumstances whatsoever, including without limitation, the
following circumstances: (A) any lack of validity or enforceability of any
Letter of Credit Document or any term or provisions therein; (B) any amendment
or waiver of or any consent to departure from all or any of the Letter of Credit
Documents; (C) the existence of any claim, setoff, defense or other right which
the Borrower may have at any time against the Agent, any Lender, any beneficiary
of a Letter of Credit or any other Person, whether in connection with this
Agreement, the transactions contemplated hereby or in the Letter of Credit
Documents or any unrelated transaction; (D) any breach of contract or dispute
between the Borrower, the Agent, any Lender or any other Person; (E) any demand,
statement or any other document presented under a Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any respect or any statement
therein or made in connection therewith being untrue or inaccurate in any
respect whatsoever; (F) any non-application or misapplication by the beneficiary
of a Letter of Credit of the proceeds of any drawing under such Letter of
Credit; (G) payment by the Agent under any Letter of Credit against presentation
of a draft or certificate which does not strictly comply with the terms of such
Letter of Credit; and (H) any other act, omission to act, delay or circumstance
whatsoever that might, but for the provisions of this Section, constitute a
legal or equitable defense to or discharge of the Borrower's Reimbursement
Obligations. Notwithstanding anything to the contrary contained in this Section
or Section 12.9., but not in limitation of the Borrower's unconditional
obligation to reimburse the Agent for any drawing made under a Letter

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<PAGE>
of Credit as provided in this Section, the Borrower shall have no obligation to
indemnify the Agent or any Lender in respect of any liability incurred by the
Agent or a Lender arising solely out of the gross negligence or willful
misconduct of the Agent or a Lender in respect of a Letter of Credit as actually
and finally determined by a court of competent jurisdiction. Except as otherwise
provided in this Section, nothing in this Section shall affect any rights the
Borrower may have with respect to the gross negligence or willful misconduct of
the Agent or any Lender with respect to any Letter of Credit.

      (h) Amendments, Etc. The issuance by the Agent of any amendment,
supplement or other modification to any Letter of Credit shall be subject to the
same conditions applicable under this Agreement to the issuance of new Letters
of Credit (including, without limitation, that the request therefor be made
through the Agent), and no such amendment, supplement or other modification
shall be issued unless either (i) the respective Letter of Credit affected
thereby would have complied with such conditions had it originally been issued
hereunder in such amended, supplemented or modified form or (ii) the Requisite
Lenders shall have consented thereto. In connection with any such amendment,
supplement or other modification, the Borrower shall pay the Fees, if any,
payable under the last sentence of Section 3.6.(b).

      (i) Lenders' Participation in Letters of Credit. Immediately upon the
issuance by the Agent of any Letter of Credit each Lender shall be deemed to
have irrevocably and unconditionally purchased and received from the Agent,
without recourse or warranty, an undivided interest and participation to the
extent of such Lender's Commitment Percentage of the liability of the Agent with
respect to such Letter of Credit and each Lender thereby shall absolutely,
unconditionally and irrevocably assume, as primary obligor and not as surety,
and shall be unconditionally obligated to the Agent to pay and discharge when
due, such Lender's Commitment Percentage of the Agent's liability under such
Letter of Credit. In addition, upon the making of each payment by a Lender to
the Agent in respect of any Letter of Credit pursuant to the immediately
following subsection (j), such Lender shall, automatically and without any
further action on the part of the Agent or such Lender, acquire (i) a
participation in an amount equal to such payment in the Reimbursement Obligation
owing to the Agent by the Borrower in respect of such Letter of Credit and (ii)
a participation in a percentage equal to such Lender's Commitment Percentage in
any interest or other amounts payable by the Borrower in respect of such
Reimbursement Obligation (other than the Fees payable to the Agent pursuant to
the third and last sentences of Section 3.6.(b)).

      (j) Payment Obligation of Lenders. Each Lender severally agrees to pay to
the Agent on demand in immediately available funds in Dollars the amount of such
Lender's Commitment Percentage of each drawing paid by the Agent under each
Letter of Credit to the extent such amount is not reimbursed by the Borrower
pursuant to Section 2.4.(d); provided, however, that in respect of any drawing
under any Letter of Credit, the maximum amount that any Lender shall be required
to fund, whether as a Revolving Loan or as a participation, shall not exceed
such Lender's Commitment Percentage of such drawing. Each such Lender's
obligation to make such payments to the Agent under this subsection, and the
Agent's right to receive the same, shall be absolute, irrevocable and
unconditional and shall not be affected in any way by any circumstance
whatsoever, including without limitation, (i) the failure of any other Lender to
make its payment under this subsection, (ii) the financial condition of the
Borrower or any other Loan Party,

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<PAGE>
(iii) the existence of any Default or Event of Default, including any Event of
Default described in Section 10.1.(f) or 10.1.(g) or (iv) the termination of the
Commitments. Each such payment to the Agent shall be made without any offset,
abatement, withholding or deduction whatsoever.

      (k) Information to Lenders. Upon the issuance of each Letter of Credit,
the Agent shall report to the Lenders the face amount of the Letter of Credit
then issued and the aggregate face amount of all Letters of Credit then
outstanding. In addition, upon the request of any Lender from time to time, the
Agent shall deliver to such Lender information reasonably requested by such
Lender with respect to each Letter of Credit then outstanding. Other than as set
forth in this subsection, the Agent shall have no duty to notify the Lenders
regarding the issuance or other matters regarding Letters of Credit issued
hereunder. The failure of the Agent to perform its requirements under this
subsection shall not relieve any Lender from its obligations under Section
2.4.(j).

SECTION 2.5. RATES AND PAYMENT OF INTEREST ON LOANS.

      (a) Rates. The Borrower promises to pay to the Agent for the account of
each Lender interest on the unpaid principal amount of each Loan made by such
Lender for the period from and including the date of the making of such Loan to
but excluding the date such Loan shall be paid in full, at the following per
annum rates:

            (i) during such periods as such Loan is a Base Rate Loan, at the
      Base Rate (as in effect from time to time) plus the Applicable Margin;

            (ii) during such periods as such Loan is a LIBOR Loan, at the
      Adjusted Eurodollar Rate for such Loan for the Interest Period therefor
      plus the Applicable Margin; and

            (iii) if such Loan is a Bid Rate Loan, at the Bid Rate for such Loan
      for the Interest Period therefor quoted by the Lender making such Loan in
      accordance with Section 2.2.

Notwithstanding the foregoing, during the continuance of an Event of Default,
the Borrower shall pay to the Agent for the account of each Lender interest at
the Post-Default Rate on the outstanding principal amount of any Loan made by
such Lender, on all Reimbursement Obligations and on any other amount payable by
the Borrower hereunder or under the Notes held by such Lender to or for the
account of such Lender (including without limitation, accrued but unpaid
interest to the extent permitted under Applicable Law).

      (b) Payment of Interest. Accrued interest on each Loan shall be payable
(i) in the case of a Base Rate Loan, monthly in arrears on the first day of each
calendar month, (ii) in the case of a LIBOR Loan or a Bid Rate Loan, on the last
day of each Interest Period therefor, and, if such Interest Period is longer
than three months, at three-month intervals following the first day of such
Interest Period, and (iii) in the case of any Loan, upon the payment, prepayment
or Continuation thereof or the Conversion of such Loan to a Loan of another Type
(but only on the principal amount so paid, prepaid, Continued or Converted).
Interest payable at the Post-Default Rate shall be payable from time to time on
demand. Promptly after the determination of any

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<PAGE>
interest rate provided for herein or any change therein, the Agent shall give
notice thereof to the Lenders to which such interest is payable and to the
Borrower. All determinations by the Agent of an interest rate hereunder shall be
conclusive and binding on the Lenders and the Borrower for all purposes, absent
manifest error.

SECTION 2.6. NUMBER OF INTEREST PERIODS.

      There may be no more than 8 different Interest Periods for LIBOR Loans and
Bid Rate Loans, collectively, outstanding at the same time (for which purpose
Interest Periods described in different lettered clauses of the definition of
the term "Interest Period" shall be deemed to be different Interest Periods even
if they are coterminous).

SECTION 2.7. REPAYMENT OF LOANS.

      (a) Revolving Loans. The Borrower shall repay the entire outstanding
principal amount of, and all accrued but unpaid interest on, the Revolving Loans
on the Termination Date.

      (b) Bid Rate Loans. The Borrower shall repay the entire outstanding
principal amount of, and all accrued but unpaid interest on, each Bid Rate Loan
on the last day of the Interest Period of such Bid Rate Loan.

SECTION 2.8. PREPAYMENTS.

      (a) Optional. Subject to Section 4.4., the Borrower may prepay any Loan
(other than a Bid Rate Loan where the Lender making such Bid Rate Loan has
declined to permit such prepayment) at any time without premium or penalty. The
Borrower shall give the Agent at least one Business Day's prior written notice
of the prepayment of any Revolving Loan.

      (b) Mandatory. If at any time the aggregate principal amount of all
outstanding Revolving Loans, together with the aggregate amount of all Letter of
Credit Liabilities, the aggregate principal amount of all outstanding Bid Rate
Loans and the aggregate principal amount of all outstanding Swingline Loans,
exceeds the aggregate amount of the Commitments in effect at such time, the
Borrower shall immediately pay to the Agent for the accounts of the Lenders the
amount of such excess. Such payment shall be applied to pay all amounts of
principal outstanding on the Loans and any Reimbursement Obligations pro rata in
accordance with Section 3.2. and if any Letters of Credit are outstanding at
such time the remainder, if any, shall be deposited into the Collateral Account
for application to any Reimbursement Obligations. If the Borrower is required to
pay any outstanding LIBOR Loans or Bid Rate Loans by reason of this Section
prior to the end of the applicable Interest Period therefor, the Borrower shall
pay all amounts due under Section 4.4.

SECTION 2.9. CONTINUATION.

      So long as no Default or Event of Default shall have occurred and be
continuing, the Borrower may on any Business Day, with respect to any LIBOR
Loan, elect to maintain such LIBOR Loan or any portion thereof as a LIBOR Loan
by selecting a new Interest Period for such LIBOR Loan. Each new Interest Period
selected under this Section shall commence on the last

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<PAGE>
day of the immediately preceding Interest Period. Each selection of a new
Interest Period shall be made by the Borrower giving to the Agent a Notice of
Continuation not later than 11:00 a.m. on the third Business Day prior to the
date of any such Continuation. Such notice by the Borrower of a Continuation
shall be by telephone or telecopy, confirmed immediately in writing if by
telephone, in the form of a Notice of Continuation, specifying (a) the proposed
date of such Continuation, (b) the LIBOR Loans and portions thereof subject to
such Continuation and (c) the duration of the selected Interest Period, all of
which shall be specified in such manner as is necessary to comply with all
limitations on Loans outstanding hereunder. Each Notice of Continuation shall be
irrevocable by and binding on the Borrower once given. Promptly after receipt of
a Notice of Continuation, the Agent shall notify each Lender by telecopy, or
other similar form of transmission, of the proposed Continuation. If the
Borrower shall fail to select in a timely manner a new Interest Period for any
LIBOR Loan in accordance with this Section, or if a Default or Event of Default
shall have occurred and be continuing, such Loan will automatically, on the last
day of the current Interest Period therefor, Convert into a Base Rate Loan
notwithstanding the first sentence of Section 2.10. or the Borrower's failure to
comply with any of the terms of such Section.

SECTION 2.10. CONVERSION.

      So long as no Default or Event of Default shall have occurred and be
continuing, the Borrower may on any Business Day, upon the Borrower's giving of
a Notice of Conversion to the Agent, Convert all or a portion of a Loan of one
Type into a Loan of another Type. Any Conversion of a LIBOR Loan into a Base
Rate Loan shall be made on, and only on, the last day of an Interest Period for
such LIBOR Loan and, upon Conversion of a Base Rate Loan into a LIBOR Loan, the
Borrower shall pay accrued interest to the date of Conversion on the principal
amount so Converted. Each such Notice of Conversion shall be given not later
than 11:00 a.m. on the Business Day prior to the date of any proposed Conversion
into Base Rate Loans and on the third Business Day prior to the date of any
proposed Conversion into LIBOR Loans. Promptly after receipt of a Notice of
Conversion, the Agent shall notify each Lender by telecopy, or other similar
form of transmission, of the proposed Conversion. Subject to the restrictions
specified above, each Notice of Conversion shall be by telephone (confirmed
immediately in writing) or telecopy in the form of a Notice of Conversion
specifying (a) the requested date of such Conversion, (b) the Type of Loan to be
Converted, (c) the portion of such Type of Loan to be Converted, (d) the Type of
Loan such Loan is to be Converted into and (e) if such Conversion is into a
LIBOR Loan, the requested duration of the Interest Period of such Loan. Each
Notice of Conversion shall be irrevocable by and binding on the Borrower once
given.

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<PAGE>
SECTION 2.11. NOTES.

      (a) Revolving Note. The Revolving Loans made by each Lender shall, in
addition to this Agreement, also be evidenced by a promissory note of the
Borrower substantially in the form of Exhibit K (each a "Revolving Note"),
payable to the order of such Lender in a principal amount equal to the amount of
its Commitment as originally in effect and otherwise duly completed.

      (b) Bid Rate Notes. The Bid Rate Loans made by any Lender shall, in
addition to this Agreement, also be evidenced by a promissory note of the
Borrower substantially in the form of Exhibit L (each a "Bid Rate Note"),
payable to the order of such Lender and otherwise duly completed.

      (c) Records. The date, amount, interest rate, Type and duration of
Interest Periods (if applicable) of each Loan made by each Lender to the
Borrower, and each payment made on account of the principal thereof, shall be
recorded by such Lender on its books and such entries shall be binding on the
Borrower absent manifest error.

      (d) Lost, Stolen, Destroyed or Mutilated Notes. Upon receipt by the
Borrower of (i) written notice from a Lender that a Note of such Lender has been
lost, stolen, destroyed or mutilated, and (ii) (A) in the case of loss, theft or
destruction, an unsecured agreement of indemnity from such Lender in form
reasonably satisfactory to the Borrower, or (B) in the case of mutilation, upon
surrender and cancellation of such Note, the Borrower shall at its own expense
execute and deliver to such Lender a new Note dated the date of such lost,
stolen, destroyed or mutilated Note.

SECTION 2.12. VOLUNTARY REDUCTIONS OF THE COMMITMENT.

      The Borrower shall have the right to terminate or reduce the aggregate
unused amount of the Commitments (for which purpose use of the Commitments shall
be deemed to include the aggregate amount of Letter of Credit Liabilities and
the aggregate principal amount of all outstanding Swingline Loans and Bid Rate
Loans) at any time and from time to time without penalty or premium upon not
less than 5 Business Days prior written notice to the Agent of each such
termination or reduction, which notice shall specify the effective date thereof
and the amount of any such reduction and shall be irrevocable once given and
effective only upon receipt by the Agent. The Agent will promptly transmit such
notice to each Lender. The Commitments, once terminated or reduced may not be
increased or reinstated. Any reduction in the aggregate amount of the
Commitments to $100,000,000 or less shall result in a proportionate reduction
(rounded to the next lowest integral multiple of multiple of $100,000) in the
Swingline Commitment and the L/C Commitment Amount.

SECTION 2.13. EXPIRATION OR MATURITY DATE OF LETTERS OF CREDIT PAST TERMINATION
DATE.

      If on the date (the "Facility Termination Date") the Commitments are
terminated (whether voluntarily, by reason of the occurrence of an Event of
Default or otherwise), there are any Letters of Credit outstanding hereunder,
the Borrower shall, on the Facility Termination Date, pay to the Agent an amount
of money equal to the Stated Amount of such Letter(s) of

                                       41
<PAGE>
Credit for deposit into the Collateral Account. If a drawing pursuant to any
such Letter of Credit occurs on or prior to the expiration date of such Letter
of Credit, the Borrower authorizes the Agent to use the monies deposited in the
Collateral Account to make payment to the beneficiary with respect to such
drawing or the payee with respect to such presentment. If no drawing occurs on
or prior to the expiration date of such Letter of Credit, the Agent shall
withdraw the monies deposited in the Collateral Account with respect to such
outstanding Letter of Credit on or before the date five (5) Business Days after
the expiration date of such Letter of Credit and apply such funds to the
Obligations, if any, then due and payable in the order prescribed by Section
10.4., with any balance of such funds remaining being paid over promptly to the
Borrower.

SECTION 2.14. AMOUNT LIMITATIONS.

      Notwithstanding any other term of this Agreement or any other Loan
Document, no Lender shall be required to make a Loan and the Agent shall not be
required to issue a Letter of Credit, if immediately after the making of such
Loan or the issuance of such Letter of Credit:

      (a) the aggregate principal amount of all outstanding Revolving Loans,
together with the aggregate principal amount of all outstanding Bid Rate Loans,
the aggregate principal amount of all outstanding Swingline Loans and the
aggregate amount of all Letter of Credit Liabilities, would exceed the aggregate
amount of the Commitments at such time; or

      (b) the aggregate principal amount of all outstanding Bid Rate Loans would
exceed 50% of the aggregate amount of the Commitments at such time.

SECTION 2.15. INCREASE OF COMMITMENTS.

      The Borrower shall have the right to request increases in the aggregate
amount of the Commitments (provided that the aggregate amount of increases in
the Commitments pursuant to this Section shall not exceed $50,000,000) by
providing written notice to the Agent, which notice shall be irrevocable once
given. Each such increase in the Commitments must be in an aggregate minimum
amount of $20,000,000 and integral multiples of $10,000,000 in excess thereof.
No Lender shall be required to increase its Commitment and any new Lender
becoming a party to this Agreement in connection with any such requested
increase must be an Eligible Assignee. If a new Lender becomes a party to this
Agreement, or if any existing Lender agrees to increase its Commitment, such
Lender shall on the date it becomes a Lender hereunder (or increases its
Commitment, in the case of an existing Lender) (and as a condition thereto)
purchase from the other Lenders its Commitment Percentage (as determined after
giving effect to the increase of Commitments) of any outstanding Revolving
Loans, by making available to the Agent for the account of such other Lenders at
the Principal Office, in same day funds, an amount equal to the sum of (A) the
portion of the outstanding principal amount of such Revolving Loans to be
purchased by such Lender plus (B) the aggregate amount of payments previously
made by the other Lenders under Section 2.4.(j) which have not been repaid plus
(C) interest accrued and unpaid to and as of such date on such portion of the
outstanding principal amount of such Revolving Loans. The Borrower shall pay to
the Lenders amounts payable, if any, to such Lenders under Section 4.4. as a
result of the prepayment of any such Revolving Loans. No increase of the
Commitments may be effected under this Section if (x) a Default or Event of

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<PAGE>
Default shall be in existence on the effective date of such increase or (y) any
representation or warranty made or deemed made by the Borrower or any other Loan
Party in any Loan Document to which any such Loan Party is a party is not (or
would not be) true or correct in all material respects on the effective date of
such increase (except for representations or warranties which expressly relate
solely to an earlier date (in which case such representations and warranties
shall have been true and correct in all material respects on and as of such
earlier date) and changes in factual circumstances or transactions, in either
event not prohibited hereunder). In connection with any increase in the
aggregate amount of the Commitments pursuant to this subsection, (a) any Lender
becoming a party hereto shall execute such documents and agreements as the Agent
may reasonably request and (b) the Borrower shall make appropriate arrangements
so that each new Lender, and any existing Lender increasing its Commitment,
receives a new or replacement Note, as appropriate, in the amount of such
Lender's Commitment within 2 Business Days of the effectiveness of the
applicable increase in the aggregate amount of Commitments.

            ARTICLE III. PAYMENTS, FEES AND OTHER GENERAL PROVISIONS

SECTION 3.1. PAYMENTS.

      Except to the extent otherwise provided herein, all payments of principal,
interest and other amounts to be made by the Borrower under this Agreement or
any other Loan Document shall be made in Dollars, in immediately available
funds, without deduction, set-off or counterclaim, to the Agent at its Principal
Office, not later than 2:00 p.m. on the date on which such payment shall become
due (each such payment made after such time on such due date to be deemed to
have been made on the next succeeding Business Day). Subject to Sections 3.2.
and 3.3., the Agent, or any Lender for whose account any such payment is made,
may (but shall not be obligated to) debit the amount of any such payment which
is not made by such time from any special or general deposit account of the
Borrower with the Agent or such Lender, as the case may be (with notice to the
Borrower, the other Lenders and the Agent). The Borrower shall, at the time of
making each payment under this Agreement or any Note, specify to the Agent the
amounts payable by the Borrower hereunder to which such payment is to be
applied. Each payment received by the Agent for the account of a Lender under
this Agreement or any Note shall be paid to such Lender at the applicable
Lending Office of such Lender no later than 5:00 p.m. on the date of receipt. If
the Agent fails to pay such amount to a Lender as provided in the previous
sentence, the Agent shall pay interest on such amount until paid at a rate per
annum equal to the Federal Funds Rate from time to time in effect. If the due
date of any payment under this Agreement or any other Loan Document would
otherwise fall on a day which is not a Business Day such date shall be extended
to the next succeeding Business Day and interest shall be payable for the period
of such extension.

SECTION 3.2. PRO RATA TREATMENT.

      Except to the extent otherwise provided herein: (a) each borrowing from
the Lenders under Section 2.1.(a) shall be made from the Lenders, each payment
of the Fees under Section 3.6.(a), the first sentence of Section 3.6.(b) and
Section 3.6.(c) shall be made for the account of the Lenders, and each
termination or reduction of the amount of the Commitments under Section 2.12.
shall be applied to the respective Commitments of the Lenders, pro rata
according to the amounts of their respective Commitments; (b) each payment or
prepayment of

                                       43
<PAGE>
principal of Revolving Loans by the Borrower shall be made for the account of
the Lenders pro rata in accordance with the respective unpaid principal amounts
of the Revolving Loans held by them, provided that if immediately prior to
giving effect to any such payment in respect of any Revolving Loans the
outstanding principal amount of the Revolving Loans shall not be held by the
Lenders pro rata in accordance with their respective Commitments in effect at
the time such Loans were made, then such payment shall be applied to the
Revolving Loans in such manner as shall result, as nearly as is practicable, in
the outstanding principal amount of the Revolving Loans being held by the
Lenders pro rata in accordance with their respective Commitments; (c) each
payment of interest on Revolving Loans by the Borrower shall be made for the
account of the Lenders pro rata in accordance with the amounts of interest on
such Loans then due and payable to the respective Lenders; (d) the making,
Conversion and Continuation of Revolving Loans of a particular Type (other than
Conversions provided for by Section 4.6.) shall be made pro rata among the
Lenders according to the amounts of their respective Commitments (in the case of
making of Loans) or their respective Loans (in the case of Conversions and
Continuations of Loans) and the then current Interest Period for each Lender's
portion of each Loan of such Type shall be coterminous; (e) the Lenders'
participation in, and payment obligations in respect of, Letters of Credit under
Section 2.4., shall be pro rata in accordance with their respective Commitments;
(f) the Lenders' participation in, and payment obligations in respect of,
Swingline Loans under Section 2.3., shall be in accordance with their respective
Commitments; and (g) each mandatory prepayment of principal of Bid Rate Loans by
the Borrower pursuant to Section 2.8.(b) shall be made for account of the
Lenders then owed Bid Rate Loans pro rata in accordance with the respective
unpaid principal amounts of the Bid Rate Loans then owing to each such Lender.
All payments of principal, interest, fees and other amounts in respect of the
Swingline Loans shall be for the account of the Swingline Lender only (except to
the extent any Lender shall have acquired a participating interest in any such
Swingline Loan pursuant to Section 2.3.(e)).

SECTION 3.3. SHARING OF PAYMENTS, ETC.

      If a Lender shall obtain payment of any principal of, or interest on, any
Loan made by it to the Borrower under this Agreement, or shall obtain payment on
any other Obligation owing by the Borrower or a Loan Party through the exercise
of any right of set-off, banker's lien or counterclaim or similar right or
otherwise or through voluntary prepayments directly to a Lender or other
payments made by the Borrower to a Lender not in accordance with the terms of
this Agreement and such payment should be distributed to the Lenders pro rata in
accordance with Section 3.2. or Section 10.4., as applicable, such Lender shall
promptly purchase from the other Lenders participations in (or, if and to the
extent specified by such Lender, direct interests in) the Loans made by the
other Lenders or other Obligations owed to such other Lenders in such amounts,
and make such other adjustments from time to time as shall be equitable, to the
end that all the Lenders shall share the benefit of such payment (net of any
reasonable expenses which may be incurred by such Lender in obtaining or
preserving such benefit) pro rata in accordance with Section 3.2. or Section
10.4. To such end, all the Lenders shall make appropriate adjustments among
themselves (by the resale of participations sold or otherwise) if such payment
is rescinded or must otherwise be restored. The Borrower agrees that any Lender
so purchasing a participation (or direct interest) in the Loans or other
Obligations owed to such other Lenders may exercise all rights of set-off,
banker's lien, counterclaim or similar rights with respect to such participation
as fully as if such Lender were a direct holder of Loans in the amount of such

                                       44
<PAGE>
participation. Nothing contained herein shall require any Lender to exercise any
such right or shall affect the right of any Lender to exercise, and retain the
benefits of exercising, any such right with respect to any other indebtedness or
obligation of the Borrower.

SECTION 3.4. SEVERAL OBLIGATIONS.

      No Lender shall be responsible for the failure of any other Lender to make
a Loan or to perform any other obligation to be made or performed by such other
Lender hereunder, and the failure of any Lender to make a Loan or to perform any
other obligation to be made or performed by it hereunder shall not relieve the
obligation of any other Lender to make any Loan or to perform any other
obligation to be made or performed by such other Lender.

SECTION 3.5. MINIMUM AMOUNTS.

      (a) Borrowings and Conversions. Each borrowing of Base Rate Loans shall be
in an aggregate minimum amount of $1,000,000 and integral multiples of $500,000
in excess thereof. Each borrowing and each Conversion of LIBOR Loans shall be in
an aggregate minimum amount of $1,000,000 and integral multiples of $1,000,000
in excess of that amount. Each Bid Rate Loan shall be in a minimum amount of
$3,000,000 and integral multiples of $1,000,000 in excess thereof.

      (b) Prepayments. Each voluntary prepayment of Revolving Loans shall be in
an aggregate minimum amount of $1,000,000 and integral multiples of $500,000 in
excess thereof (or, if less, the aggregate principal amount of Revolving Loans
then outstanding).

      (c) Reductions of Commitments. Each reduction of the Commitments under
Section 2.12. shall be in an aggregate minimum amount of $10,000,000 and
integral multiples of $5,000,000 in excess thereof.

      (d) Letters of Credit. The initial Stated Amount of each Letter of Credit
shall be at least $100,000.

SECTION 3.6. FEES.

      (a) Facility Fees. The Borrower agrees to pay to the Agent for the account
of each Lender a facility fee equal to the average daily amount of the
Commitment of such Lender (whether or not utilized) times the Facility Fee for
the period from and including the Agreement Date to but excluding the date such
Commitment is terminated or reduced to zero or the Termination Date, such fee to
be paid in arrears on (i) the last day of March, June, September and December in
each year, (ii) the date of each reduction in the Commitments (but only on the
amount of the reduction) and (iii) on the Termination Date.

      (b) Letter of Credit Fees. The Borrower agrees to pay to the Agent for the
account of each Lender a letter of credit fee at a rate per annum equal to the
Applicable Margin for LIBOR Loans times the daily average Stated Amount of each
Letter of Credit for the period from and including the date of issuance of such
Letter of Credit (x) to and including the date such Letter of Credit expires or
is terminated or (y) to but excluding the date such Letter of Credit is drawn in

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full. In addition, the Borrower shall pay to the Agent for its own account and
not the account of any Lender, a fronting fee in respect of each Letter of
Credit at the rate equal to the greater of (i) $500 or (ii) one-eighth of one
percent (0.125%) per annum on the daily average Stated Amount of such Letter of
Credit for the period from and including the date of issuance of such Letter of
Credit (A) to and including the date such Letter of Credit expires or is
terminated or (B) to but excluding the date such Letter of Credit is drawn in
full. The fees provided for in the two immediately preceding sentences shall be
nonrefundable and payable on (i) the last day of March, June, September and
December in each year, (ii) the Termination Date, (iii) the date the Commitments
are terminated or reduced to zero and (iv) thereafter from time to time on
demand of the Agent. The Borrower shall pay directly to the Agent from time to
time on demand all commissions, charges, costs and expenses in the amounts
customarily charged by the Agent from time to time in like circumstances with
respect to the issuance of each Letter of Credit, drawings, amendments and other
transactions relating thereto.

      (c) Administrative and Other Fees. The Borrower agrees to pay the
administrative and other fees of the Agent as may be agreed to in writing from
time to time.

      (d) Bid Rate Auction Fee. If the Borrower submits more than 2 Bid Rate
Quote Requests during any calendar month, the Borrower agrees to pay to the
Agent for its own account a fee equal to $2,500 for each additional Bid Rate
Quote Request submitted during such calendar month.

SECTION 3.7. COMPUTATIONS.

      Unless otherwise expressly set forth herein, any accrued interest on any
Loan, any Fees or any other Obligations due hereunder shall be computed on the
basis of a year of 360 days and the actual number of days elapsed.

SECTION 3.8. USURY.

      In no event shall the amount of interest due or payable on the Loans or
other Obligations exceed the maximum rate of interest allowed by Applicable Law
and, if any such payment is paid by the Borrower or received by any Lender, then
such excess sum shall be credited as a payment of principal, unless the Borrower
shall notify the respective Lender in writing that the Borrower elects to have
such excess sum returned to it forthwith. It is the express intent of the
parties hereto that the Borrower not pay and the Lenders not receive, directly
or indirectly, in any manner whatsoever, interest in excess of that which may be
lawfully paid by the Borrower under Applicable Law.

SECTION 3.9. AGREEMENT REGARDING INTEREST AND CHARGES.

      The parties hereto hereby agree and stipulate that the only charge imposed
upon the Borrower for the use of money in connection with this Agreement is and
shall be the interest specifically described in Section 2.5.(a)(i) through (iii)
and in Section 2.3.(c). Notwithstanding the foregoing, the parties hereto
further agree and stipulate that all agency fees, syndication fees, facility
fees, closing fees, letter of credit fees, underwriting fees, default charges,
late charges, funding or "breakage" charges, increased cost charges, attorneys'
fees and reimbursement for

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<PAGE>
costs and expenses paid by the Agent or any Lender to third parties or for
damages incurred by the Agent or any Lender, are charges made to compensate the
Agent or any such Lender for underwriting or administrative services and costs
or losses performed or incurred, and to be performed or incurred, by the Agent
and the Lenders in connection with this Agreement and shall under no
circumstances be deemed to be charges for the use of money. All charges other
than charges for the use of money shall be fully earned and nonrefundable when
due.

SECTION 3.10. STATEMENTS OF ACCOUNT.

      The Agent will account to the Borrower monthly with a statement of Loans,
Letters of Credit, accrued interest and Fees, charges and payments made pursuant
to this Agreement and the other Loan Documents, and such account rendered by the
Agent shall be deemed conclusive upon Borrower absent manifest error. The
failure of the Agent to deliver such a statement of accounts shall not relieve
or discharge the Borrower from any of its obligations hereunder.

SECTION 3.11. DEFAULTING LENDERS.

      (a) Generally. If for any reason any Lender (a "Defaulting Lender") shall
fail or refuse to perform any of its obligations under this Agreement or any
other Loan Document to which it is a party within the time period specified for
performance of such obligation or, if no time period is specified, if such
failure or refusal continues for a period of two Business Days after notice from
the Agent, then, in addition to the rights and remedies that may be available to
the Agent or the Borrower under this Agreement or Applicable Law, such
Defaulting Lender's right to participate in the administration of the Loans,
this Agreement and the other Loan Documents, including without limitation, any
right to vote in respect of, to consent to or to direct any action or inaction
of the Agent or to be taken into account in the calculation of the Requisite
Lenders, shall be suspended during the pendency of such failure or refusal. If a
Lender is a Defaulting Lender because it has failed to make timely payment to
the Agent of any amount required to be paid to the Agent hereunder (without
giving effect to any notice or cure periods), in addition to other rights and
remedies which the Agent or the Borrower may have under the immediately
preceding provisions or otherwise, the Agent shall be entitled (i) to collect
interest from such Defaulting Lender on such delinquent payment for the period
from the date on which the payment was due until the date on which the payment
is made at the Federal Funds Rate, (ii) to withhold or setoff and to apply in
satisfaction of the defaulted payment and any related interest, any amounts
otherwise payable to such Defaulting Lender under this Agreement or any other
Loan Document and (iii) to bring an action or suit against such Defaulting
Lender in a court of competent jurisdiction to recover the defaulted amount and
any related interest. Any amounts received by the Agent in respect of a
Defaulting Lender's Loans shall not be paid to such Defaulting Lender and shall
be held uninvested by the Agent and either applied against the purchase price of
such Loans under the following subsection (b) or paid to such Defaulting Lender
upon the Defaulting Lender's curing of its default.

      (b) Purchase or Cancellation of Defaulting Lender's Commitment. Any Lender
who is not a Defaulting Lender shall have the right, but not the obligation, in
its sole discretion, to acquire all of a Defaulting Lender's Commitment. Any
Lender desiring to exercise such right shall give written notice thereof to the
Agent and the Borrower no sooner than 2 Business Days and not later than 5
Business Days after such Defaulting Lender became a Defaulting Lender. If

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<PAGE>
more than one Lender exercises such right, each such Lender shall have the right
to acquire an amount of such Defaulting Lender's Commitment in proportion to the
Commitments of the other Lenders exercising such right. If after such 5th
Business Day, the Lenders have not elected to purchase all of the Commitment of
such Defaulting Lender, then the Borrower may, by giving written notice thereof
to the Agent, such Defaulting Lender and the other Lenders, either (i) demand
that such Defaulting Lender assign its Commitment to an Eligible Assignee
subject to and in accordance with the provisions of Section 12.5.(d) for the
purchase price provided for below or (ii) terminate the Commitment of such
Defaulting Lender, whereupon such Defaulting Lender shall no longer be a party
hereto or have any rights or obligations hereunder or under any of the other
Loan Documents. No party hereto shall have any obligation whatsoever to initiate
any such replacement or to assist in finding an Eligible Assignee. Upon any such
purchase or assignment, the Defaulting Lender's interest in the Loans and its
rights hereunder (but not its liability in respect thereof or under the Loan
Documents or this Agreement to the extent the same relate to the period prior to
the effective date of the purchase) shall terminate on the date of purchase, and
the Defaulting Lender shall promptly execute all documents reasonably requested
to surrender and transfer such interest to the purchaser or assignee thereof,
including an appropriate Assignment and Acceptance Agreement and,
notwithstanding Section 12.5.(d), shall pay to the Agent an assignment fee in
the amount of $10,000. The purchase price for the Commitment of a Defaulting
Lender shall be equal to the amount of the principal balance of the Loans
outstanding and owed by the Borrower to the Defaulting Lender. Prior to payment
of such purchase price to a Defaulting Lender, the Agent shall apply against
such purchase price any amounts retained by the Agent pursuant to the last
sentence of the immediately preceding subsection (a). The Defaulting Lender
shall be entitled to receive amounts owed to it by the Borrower under the Loan
Documents which accrued prior to the date of the default by the Defaulting
Lender, to the extent the same are received by the Agent from or on behalf of
the Borrower. There shall be no recourse against any Lender or the Agent for the
payment of such sums except to the extent of the receipt of payments from any
other party or in respect of the Loans.

SECTION 3.12. TAXES.

      (a) Taxes Generally. All payments by the Borrower of principal of, and
interest on, the Loans and all other Obligations shall be made free and clear of
and without deduction for any present or future excise, stamp or other taxes,
fees, duties, levies, imposts, charges, deductions, withholdings or other
charges of any nature whatsoever imposed by any taxing authority, but excluding
(i) franchise taxes, (ii) any taxes (other than withholding taxes) that would
not be imposed but for a connection between the Agent or a Lender and the
jurisdiction imposing such taxes (other than a connection arising solely by
virtue of the activities of the Agent or such Lender pursuant to or in respect
of this Agreement or any other Loan Document), (iii) any taxes imposed on or
measured by any Lender's assets, net income, receipts or branch profits, and
(iv) any taxes, fees, duties, levies, imposts, charges, deductions, withholdings
or other charges to the extent imposed as a result of the failure of the Agent
or a Lender, as applicable, to provide and keep current (to the extent legally
able) any certificates, documents or other evidence required to qualify for an
exemption from, or reduced rate of, any such taxes fees, duties, levies,
imposts, charges, deductions, withholdings or other charges or required by the
immediately following subsection (c) to be furnished by the Agent or such
Lender, as applicable (such non-excluded items being collectively called
"Taxes"). If any withholding or deduction from

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<PAGE>
any payment to be made by the Borrower hereunder is required in respect of any
Taxes pursuant to any Applicable Law, then the Borrower will:

            (i) pay directly to the relevant Governmental Authority the full
      amount required to be so withheld or deducted;

            (ii) promptly forward to the Agent an official receipt or other
      documentation satisfactory to the Agent evidencing such payment to such
      Governmental Authority; and

            (iii) pay to the Agent for its account or the account of the
      applicable Lender, as the case may be, such additional amount or amounts
      as is necessary to ensure that the net amount actually received by the
      Agent or such Lender will equal the full amount that the Agent or such
      Lender would have received had no such withholding or deduction been
      required.

      (b) Tax Indemnification. If the Borrower fails to pay any Taxes when due
to the appropriate Governmental Authority or fails to remit to the Agent, for
its account or the account of the respective Lender, as the case may be, the
required receipts or other required documentary evidence, the Borrower shall
indemnify the Agent and the Lenders for any incremental Taxes, interest or
penalties that may become payable by the Agent or any Lender as a result of any
such failure. For purposes of this Section, a distribution hereunder by the
Agent or any Lender to or for the account of any Lender shall be deemed a
payment by the Borrower.

      (c) Tax Forms. Prior to the date that any Lender or Participant organized
under the laws of a jurisdiction outside the United States of America becomes a
party hereto, such Person shall deliver to the Borrower and the Agent such
certificates, documents or other evidence, as required by the Internal Revenue
Code or Treasury Regulations issued pursuant thereto (including Internal Revenue
Service Forms W-8ECI and W-8BEN, as applicable, or appropriate successor forms),
properly completed, currently effective and duly executed by such Lender or
Participant establishing that payments to it hereunder and under the Notes are
(i) not subject to United States Federal backup withholding tax and (ii) not
subject to United States Federal withholding tax under the Internal Revenue
Code. Each such Lender or Participant shall (x) deliver further copies of such
forms or other appropriate certifications on or before the date that any such
forms expire or become obsolete and after the occurrence of any event requiring
a change in the most recent form delivered to the Borrower or the Agent and (y)
obtain such extensions of the time for filing, and renew such forms and
certifications thereof, as may be reasonably requested by the Borrower or the
Agent. The Borrower shall not be required to pay any amount pursuant to last
sentence of subsection (a) above to any Lender or Participant that is organized
under the laws of a jurisdiction outside of the United States of America or the
Agent, if it is organized under the laws of a jurisdiction outside of the United
States of America, if such Lender, Participant or the Agent, as applicable,
fails to comply with the requirements of this subsection. If any such Lender or
Participant fails to deliver the above forms or other documentation, then the
Agent may withhold from any payments to be made to such Lender under any of the
Loan Documents such amounts as are required by the Internal Revenue Code. If any
Governmental Authority asserts that the Agent did not properly withhold or
backup withhold, as the case may be, any tax or other amount from payments made
to or for the account

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<PAGE>
of any Lender, such Lender shall indemnify the Agent therefor, including all
penalties and interest, any taxes imposed by any jurisdiction on the amounts
payable to the Agent under this Section, and costs and expenses (including all
reasonable fees and disbursements of any law firm or other external counsel and
the allocated cost of internal legal services and all disbursements of internal
counsel) of the Agent. The obligation of the Lenders under this Section shall
survive the termination of the Commitments, repayment of all Obligations and the
resignation or replacement of the Agent.

      (d) Refunds. If the Agent or any Lender (or a Participant) receives a
refund of any Taxes as to which it has been indemnified by the Borrower or with
respect to which the Borrower has paid additional amounts pursuant to this
Section 3.12, it shall pay over such refund to the Borrower, net of all
out-of-pocket expenses of the Agent or such Lender (or Participant) and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund). The Agent and each Lender (and Participant) shall
take such action as the Borrower may reasonably request in order to apply for
and obtain any refund of such amounts as the Borrower reasonably determines to
be appropriate under the circumstances, provided that any such actions shall be
at the sole cost and expense of the Borrower.

                       ARTICLE IV. YIELD PROTECTION, ETC.

SECTION 4.1. ADDITIONAL COSTS; CAPITAL ADEQUACY.

      (a) Additional Costs. The Borrower shall promptly pay to the Agent for the
account of a Lender from time to time such amounts as such Lender may determine
to be necessary to compensate such Lender for any costs incurred by such Lender
that it determines are attributable to its making or maintaining of any LIBOR
Loans or its obligation to make any LIBOR Loans hereunder, any reduction in any
amount receivable by such Lender under this Agreement or any of the other Loan
Documents in respect of any of such Loans or such obligation or the maintenance
by such Lender of capital in respect of its Loans or its Commitment (such
increases in costs and reductions in amounts receivable being herein called
"Additional Costs"), in each case resulting from any Regulatory Change that: (i)
changes the basis of taxation of any amounts payable to such Lender under this
Agreement or any of the other Loan Documents in respect of any of such Loans or
its Commitment (other than taxes, fees, duties, levies, imposts, charges,
deductions, withholdings or other charges which are excluded from the definition
of Taxes pursuant to the first sentence of Section 3.12.(a)); or (ii) imposes or
modifies any reserve, special deposit or similar requirements (other than
Regulation D of the Board of Governors of the Federal Reserve System or other
reserve requirement to the extent utilized in the determination of the Adjusted
Eurodollar Rate for such Loan) relating to any extensions of credit or other
assets of, or any deposits with or other liabilities of, such Lender, or any
commitment of such Lender (including, without limitation, the Commitment of such
Lender hereunder); or (iii) has or would have the effect of reducing the rate of
return on capital of such Lender to a level below that which such Lender could
have achieved but for such Regulatory Change (taking into consideration such
Lender's policies with respect to capital adequacy).

      (b) Additional Costs in Respect of Letters of Credit. Without limiting the
obligations of the Borrower under the preceding subsections of this Section (but
without duplication), if as a result of any Regulatory Change or any risk-based
capital guideline or other requirement

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<PAGE>
heretofore or hereafter issued by any Governmental Authority there
shall be imposed, modified or deemed applicable any tax, reserve, special
deposit, capital adequacy or similar requirement against or with respect to or
measured by reference to Letters of Credit and the result shall be to increase
the cost to the Agent of issuing (or any Lender of purchasing participations in)
or maintaining its obligation hereunder to issue (or purchase participations in)
any Letter of Credit or reduce any amount receivable by the Agent or any Lender
hereunder in respect of any Letter of Credit, then the Borrower shall pay to the
Agent for its account or the account of such Lender, as applicable, from time to
time as specified by the Agent or a Lender, such additional amounts as shall be
sufficient to compensate the Agent or such Lender for such increased costs or
reductions in amount.

      (c) Notification and Determination of Additional Costs. Each of the Agent
and each Lender agrees to notify the Borrower of any event occurring after the
Agreement Date entitling the Agent or such Lender to compensation under any of
the preceding subsections of this Section as promptly as practicable; provided,
however, (i) the failure of the Agent or any Lender to give such notice shall
not release the Borrower from any of its obligations hereunder (and in the case
of a Lender, to the Agent) and (ii) in no event shall the Borrower be liable for
any amounts incurred more than 180 days prior to receipt of such notice. The
Agent or such Lender agrees to furnish to the Borrower (and in the case of a
Lender, to the Agent) a certificate setting forth in reasonable detail the basis
and amount of each request by the Agent or such Lender for compensation under
this Section. Absent manifest error, determinations by the Agent or any Lender
of the effect of any Regulatory Change shall be conclusive, provided that such
determinations are made on a reasonable basis and in good faith. Amounts payable
by the Borrower pursuant to this Section 4.1 shall be due not later than 10 days
after receipt by the Borrower of such certificate.

SECTION 4.2. SUSPENSION OF LIBOR LOANS.

      Anything herein to the contrary notwithstanding, if, on or prior to the
determination of any Adjusted Eurodollar Rate for any Interest Period:

            (a) the Agent reasonably determines (which determination shall be
      conclusive) that by reason of circumstances affecting the relevant market,
      adequate and reasonable means do not exist for ascertaining the Adjusted
      Eurodollar Rate for such Interest Period, or

            (b) the Agent reasonably determines (which determination shall be
      conclusive) that the Adjusted Eurodollar Rate will not adequately and
      fairly reflect the cost to the Lenders of making or maintaining LIBOR
      Loans for such Interest Period;

then the Agent shall give the Borrower and each Lender prompt notice thereof
and, so long as such condition remains in effect, the Lenders shall be under no
obligation to, and shall not, make additional LIBOR Loans, Continue LIBOR Loans
or Convert Loans into LIBOR Loans and the Borrower shall, on the last day of
each current Interest Period for each outstanding LIBOR Loan, either repay such
Loan or Convert such Loan into a Base Rate Loan.

SECTION 4.3. ILLEGALITY.

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<PAGE>
      Notwithstanding any other provision of this Agreement, if any Lender shall
reasonably determine (which determination shall be conclusive and binding) that
it has become unlawful for such Lender to honor its obligation to make or
maintain LIBOR Loans hereunder, then such Lender shall promptly notify the
Borrower thereof (with a copy to the Agent) and such Lender's obligation to make
or Continue, or to Convert Loans of any other Type into, LIBOR Loans shall be
suspended until such time as such Lender may again make and maintain LIBOR Loans
(in which case the provisions of Section 4.6. shall be applicable).

SECTION 4.4. COMPENSATION.

      The Borrower shall pay to the Agent for the account of each Lender such
amount or amounts as shall be sufficient (in the reasonable determination of
such Lender) to compensate it for any loss, cost or expense (excluding lost
profits) that such Lender determines is attributable to:

            (a) any payment or prepayment (whether mandatory or optional) of a
      LIBOR Loan or Bid Rate Loan, or Conversion of a LIBOR Loan, made by such
      Lender for any reason (including, without limitation, acceleration) on a
      date other than the last day of the Interest Period for such Loan; or

            (b) any failure by the Borrower for any reason (including, without
      limitation, the failure of any of the applicable conditions precedent
      specified in Article V. to be satisfied) to borrow a LIBOR Loan or Bid
      Rate Loan from such Lender on the date for such borrowing, or to Convert a
      Base Rate Loan into a LIBOR Loan or Continue a LIBOR Loan on the requested
      date of such Conversion or Continuation.

Any Lender requesting compensation under this Section shall provide the Borrower
with a statement setting forth in reasonable detail the basis for requesting
such compensation and the method for determining the amount thereof. Absent
manifest error, determinations by any Lender in any such statement shall be
conclusive, provided that such determinations are made on a reasonable basis and
in good faith. Amounts payable by the Borrower pursuant to this Section 4.4
shall be due not later than 10 days after receipt by the Borrower of such
statement.

SECTION 4.5. AFFECTED LENDERS.

      If (a) a Lender requests compensation pursuant to Section 3.12. or 4.1.,
and the Requisite Lenders are not also doing the same, or (b) the obligation of
any Lender to make LIBOR Loans or to Continue, or to Convert Base Rate Loans
into, LIBOR Loans shall be suspended pursuant to Section 4.2. or 4.3. but the
obligation of the Requisite Lenders shall not have been suspended under such
Sections, then, so long as there does not then exist any Default or Event of
Default, the Borrower may either (i) demand that such Lender (the "Affected
Lender"), and upon such demand the Affected Lender shall promptly, assign its
Commitment to an Eligible Assignee subject to and in accordance with the
provisions of Section 12.5.(d) for a purchase price equal to the aggregate
principal balance of Loans then owing to the Affected Lender plus any accrued
but unpaid interest thereon and accrued but unpaid fees owing to the Affected
Lender, or (ii) pay to the Affected Lender the aggregate principal balance of
Loans then owing to the Affected Lender plus any accrued but unpaid interest
thereon and accrued but unpaid fees owing to the Affected

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<PAGE>
Lender, whereupon the Affected Lender shall no longer be a party hereto or have
any rights or obligations hereunder or under any of the other Loan Documents.
Each of the Agent and the Affected Lender shall reasonably cooperate in
effectuating the replacement of such Affected Lender under this Section, but at
no time shall the Agent, such Affected Lender nor any other Lender be obligated
in any way whatsoever to initiate any such replacement or to assist in finding
an Eligible Assignee. The exercise by the Borrower of its rights under this
Section shall be at the Borrower's sole cost and expenses and at no cost or
expense to the Agent, the Affected Lender or any of the other Lenders. The terms
of this Section shall not in any way limit the Borrower's obligation to pay to
any Affected Lender compensation owing to such Affected Lender pursuant to
Section 3.12. or 4.1.

SECTION 4.6. TREATMENT OF AFFECTED LOANS.

      If the obligation of any Lender to make LIBOR Loans or to Continue, or to
Convert Base Rate Loans into, LIBOR Loans shall be suspended pursuant to Section
4.2. or 4.3., then such Lender's LIBOR Loans shall be automatically Converted
into Base Rate Loans on the last day(s) of the then current Interest Period(s)
for LIBOR Loans (or, in the case of a Conversion required by Section 4.3., on
such earlier date as such Lender may specify to the Borrower with a copy to the
Agent) and, unless and until such Lender gives notice as provided below that the
circumstances specified in Section 4.3. that gave rise to such Conversion no
longer exist:

            (a) to the extent that such Lender's LIBOR Loans have been so
      Converted, all payments and prepayments of principal that would otherwise
      be applied to such Lender's LIBOR Loans shall be applied instead to its
      Base Rate Loans; and

            (b) all Loans that would otherwise be made or Continued by such
      Lender as LIBOR Loans shall be made or Continued instead as Base Rate
      Loans, and all Base Rate Loans of such Lender that would otherwise be
      Converted into LIBOR Loans shall remain as Base Rate Loans.

If such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section or 4.3. that gave rise to the Conversion of
such Lender's LIBOR Loans pursuant to this Section no longer exist (which such
Lender agrees to do promptly upon such circumstances ceasing to exist) at a time
when LIBOR Loans made by other Lenders are outstanding, then such Lender's Base
Rate Loans shall be automatically Converted, on the first day(s) of the next
succeeding Interest Period(s) for such outstanding LIBOR Loans, to the extent
necessary so that, after giving effect thereto, all Loans held by the Lenders
holding LIBOR Loans and by such Lender are held pro rata (as to principal
amounts, Types and Interest Periods) in accordance with their respective
Commitments.

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<PAGE>
SECTION 4.7. CHANGE OF LENDING OFFICE.

      Each Lender agrees that it will use reasonable efforts to designate an
alternate Lending Office with respect to any of its Loans affected by the
matters or circumstances described in Sections 3.12., 4.1., 4.2. or 4.3. to
reduce the liability of the Borrower or avoid the results provided thereunder,
so long as such designation is not disadvantageous to such Lender as determined
in good faith by such Lender.

SECTION 4.8. ASSUMPTIONS CONCERNING FUNDING OF LIBOR LOANS.

      Calculation of all amounts payable to a Lender under this Article IV.
shall be made as though such Lender had actually funded LIBOR Loans through the
purchase of deposits in the relevant market bearing interest at the rate
applicable to such LIBOR Loans in an amount equal to the amount of the LIBOR
Loans and having a maturity comparable to the relevant Interest Period;
provided, however, that each Lender may fund each of its LIBOR Loans in any
manner it sees fit and the foregoing assumption shall be used only for
calculation of amounts payable under this Article IV.

                         ARTICLE V. CONDITIONS PRECEDENT

SECTION 5.1.  INITIAL CONDITIONS PRECEDENT.

      The obligation of the Lenders to effect or permit the occurrence of the
first Credit Event hereunder, whether as the making of a Loan or the issuance of
a Letter of Credit, is subject to the following conditions precedent:

      (a) The Agent shall have received each of the following, in form and
substance satisfactory to the Agent:

            (i) Counterparts of this Agreement executed by each of the parties
      hereto;

            (ii) Revolving Notes and Bid Rate Notes executed by the Borrower,
      payable to the order of each Lender (or Designated Lender, if applicable)
      and complying with the applicable provisions of Section 2.11., and the
      Swingline Note executed by the Borrower;

            (iii) The Guaranty executed by each Guarantor existing as of the
      Effective Date;

            (iv) An opinion of King & Spalding LLP, counsel to the Loan Parties,
      addressed to the Agent, the Lenders and the Swingline Lender,
      substantially in the form of Exhibit M;

            (v) The certificate of partnership of the Borrower certified as of a
      recent date by the Secretary of State of Georgia;

            (vi) A good standing certificate with respect to the Borrower issued
      as of a recent date by the Secretary of State of Georgia;

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<PAGE>
            (vii) A certificate of incumbency signed by the Secretary or
      Assistant Secretary of GP Sub with respect to each of the officers of GP
      Sub authorized to execute and deliver on behalf of the Borrower the Loan
      Documents to which the Borrower is a party and the officers of the
      Borrower then authorized to deliver Notices of Borrowing, Notices of
      Swingline Borrowings, Bid Rate Quote Requests, Bid Rate Quote Acceptances,
      Notices of Continuation and Notices of Conversion and to request the
      issuance of Letters of Credit;

            (viii) Copies, certified by the Secretary or Assistant Secretary of
      GP Sub, of (i) the partnership agreement of the Borrower and (ii) all
      corporate (or comparable) action taken by GP Sub to authorize the
      execution, delivery and performance of the Loan Documents to which the
      Borrower is a party;

            (ix) The articles of incorporation, articles of organization,
      certificate of limited partnership or other comparable organizational
      instrument (if any) of each Guarantor certified as of a recent date by the
      Secretary of State of the state of formation of such Guarantor;

            (x) A certificate of good standing or certificate of similar meaning
      with respect to each Guarantor issued as of a recent date by the Secretary
      of State of the state of formation of each such Guarantor;

            (xi) A certificate of incumbency signed by the Secretary or
      Assistant Secretary (or other individual performing similar functions) of
      each Guarantor with respect to each of the officers of such Guarantor
      authorized to execute and deliver the Loan Documents to which such
      Guarantor is a party;

            (xii) Copies certified by the Secretary or Assistant Secretary of
      each Guarantor (or other individual performing similar functions) of (i)
      the by-laws of such Guarantor, if a corporation, the operating agreement,
      if a limited liability company, the partnership agreement, if a limited or
      general partnership, or other comparable document in the case of any other
      form of legal entity and (ii) all corporate, partnership, member or other
      necessary action taken by such Guarantor to authorize the execution,
      delivery and performance of the Loan Documents to which it is a party;

            (xiii) The Fees then due and payable under Section 3.6., and any
      other Fees payable to the Agent, the Titled Agents and the Lenders on or
      prior to the Effective Date;

            (xiv) A Compliance Certificate calculated as of September 30, 2003;

            (xv) Such other documents, agreements and instruments as the Agent
      on behalf of the Lenders may reasonably request; and

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<PAGE>
(b) In the good faith judgment of the Agent and the Lenders:

            (i) There shall not have occurred (i) subsequent to September 30,
      2003, any material adverse change in the business, properties, financial
      condition or operations of the Borrower and its Subsidiaries taken as a
      whole, or (ii) any changes in the business, properties, financial
      condition, or operations of the Borrower and its Subsidiaries that would
      cause the financial and business projections, budgets, pro forma data and
      forecasts concerning the Borrower and its Subsidiaries included in the
      Information Memorandum dated October 16, 2003, distributed to the Lenders
      to be materially inaccurate, taken as a whole, as of the Closing Date (it
      being understood that actual results may vary from such projections,
      forecasts, and similar forward-looking information, and do not and are not
      intended to provide any guarantee or assurance that actual results will be
      consistent therewith);

            (ii) No litigation, action, suit, investigation or other arbitral,
      administrative or judicial proceeding shall be pending or threatened which
      could reasonably be expected to (1) result in a Material Adverse Effect or
      (2) restrain or enjoin, impose materially burdensome conditions on, or
      otherwise materially and adversely affect the ability of the Borrower or
      any other Loan Party to fulfill its obligations under the Loan Documents
      to which it is a party; and

            (iii) The Borrower and its Subsidiaries shall have received all
      approvals, consents and waivers, and shall have made or given all
      necessary filings and notices as shall be required to consummate the
      transactions contemplated hereby without the occurrence of any default
      under, conflict with or violation of (1) any Applicable Law or (2) any
      agreement, document or instrument to which the Borrower or any other Loan
      Party is a party or by which any of them or their respective properties is
      bound, except for such approvals, consents, waivers, filings and notices
      the receipt, making or giving of which would not reasonably be likely to
      (A) have a Material Adverse Effect, or (B) restrain or enjoin, impose
      materially burdensome conditions on, or otherwise materially and adversely
      affect the ability of the Borrower or any other Loan Party to fulfill its
      obligations under the Loan Documents to which it is a party.

SECTION 5.2. CONDITIONS PRECEDENT TO ALL LOANS AND LETTERS OF CREDIT.

      The obligations of the Lenders to make any Loans, of the Agent to issue
Letters of Credit, and of the Swingline Lender to make any Swingline Loan are
all subject to the further condition precedent that: (a) no Default or Event of
Default shall have occurred and be continuing as of the date of the making of
such Loan or date of issuance of such Letter of Credit or would exist
immediately after giving effect thereto; and (b) the representations and
warranties made or deemed made by the Borrower and each other Loan Party in the
Loan Documents to which any of them is a party, shall be true and correct in all
material respects on and as of the date of the making of such Loan or date of
issuance of such Letter of Credit with the same force and effect as if made on
and as of such date (except to the extent that such representations and
warranties expressly relate solely to an earlier date (in which case such
representations and warranties shall have been true and accurate on and as of
such earlier date) and except for changes in factual circumstances or
transactions, in either event not prohibited hereunder). Each Credit Event shall

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<PAGE>
constitute a certification by the Borrower to the effect set forth in the
preceding sentence (both as of the date of the giving of notice relating to such
Credit Event and, unless the Borrower otherwise notifies the Agent prior to the
date of such Credit Event, as of the date of the occurrence of such Credit
Event). In addition, if such Credit Event is the making of a Loan or the
issuance of a Letter of Credit, the Borrower shall be deemed to have represented
to the Agent and the Lenders at the time such Loan is made or Letter of Credit
issued that all conditions to the occurrence of such Credit Event contained in
Article V. have been satisfied.

SECTION 5.3. CONDITIONS AS COVENANTS.

      If the Lenders make any Loans, or the Agent issues a Letter of Credit,
prior to the satisfaction of all conditions precedent set forth in Sections 5.1.
and 5.2., then unless satisfaction of such condition(s) shall have been waived
by the Requisite Lenders, the Borrower shall nevertheless cause such condition
or conditions to be satisfied within 5 Business Days after the date of the
making of such Loans or the issuance of such Letter of Credit. Unless set forth
in writing to the contrary, the making of its initial Loan by a Lender shall
constitute a certification by such Lender to the Agent and the other Lenders
that the Borrower has satisfied the conditions precedent for initial Loans set
forth in Sections 5.1. and 5.2. that have not previously been waived by the
Requisite Lenders.

                   ARTICLE VI. REPRESENTATIONS AND WARRANTIES

SECTION 6.1. REPRESENTATIONS AND WARRANTIES.

      In order to induce the Agent and each Lender to enter into this Agreement
and to make Loans and issue Letters of Credit, the Borrower represents and
warrants to the Agent and each Lender as follows:

      (a) Organization; Power; Qualification. Each of the Borrower, its
Subsidiaries and the other Loan Parties is a corporation, partnership or other
legal entity, duly organized or formed, validly existing and in good standing
under the jurisdiction of its incorporation or formation, has the power and
authority to own or lease its respective properties and to carry on its
respective business as now being and hereafter proposed to be conducted and is
duly qualified and is in good standing as a foreign corporation, partnership or
other legal entity, and authorized to do business, in each jurisdiction in which
the character of its properties or the nature of its business requires such
qualification or authorization and where the failure to be so qualified or
authorized could reasonably be expected to have, in each instance, a Material
Adverse Effect.

      (b) Ownership Structure. As of the Agreement Date, Schedule 6.1.(b) is a
complete and correct list of all Subsidiaries of PPI and the Borrower setting
forth for each such Subsidiary, (i) the jurisdiction of organization of such
Subsidiary, (ii) each member of the Consolidated Group holding any Equity
Interests in such Subsidiary, (iii) the nature of the Equity Interests held by
each Person holding an Equity Interest in such Subsidiary, (iv) the percentage
of ownership of such Subsidiary represented by such Equity Interests and (v)
whether such Subsidiary is a Material Subsidiary or Significant Subsidiary (or
would have constituted a Significant Subsidiary had it not qualified as an
Excluded Subsidiary). Except as disclosed in such Schedule, as of the Agreement
Date, (i) each of PPI and its Subsidiaries and the Borrower

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<PAGE>
and its Subsidiaries owns, free and clear of all Liens, and has the unencumbered
right to vote, all outstanding Equity Interests in each Person shown to be held
by it on such Schedule and (ii) all of the issued and outstanding capital stock
of each such Person organized as a corporation is validly issued, fully paid and
nonassessable. As of the Agreement Date, Schedule 6.1.(b) correctly sets forth
all Unconsolidated Affiliates of the Borrower, including the correct legal name
of such Person, the type of legal entity which each such Person is, and all
Equity Interests in such Person held directly or indirectly by the Borrower.

      (c) Authorization of Agreement, Etc. The Borrower has the right and power,
and has taken all necessary action to authorize it, to borrow and obtain other
extensions of credit hereunder. The Borrower and each other Loan Party has the
right and power, and has taken all necessary action to authorize it, to execute,
deliver and perform each of the Loan Documents to which it is a party in
accordance with their respective terms and to consummate the transactions
contemplated hereby and thereby. The Loan Documents to which the Borrower or any
other Loan Party is a party have been duly executed and delivered by the duly
authorized officers of such Person and each is a legal, valid and binding
obligation of such Person enforceable against such Person in accordance with its
respective terms except as the same may be limited by bankruptcy, insolvency,
and other similar laws affecting the rights of creditors generally and the
availability of equitable remedies for the enforcement of certain obligations
(other than the payment of principal) contained herein or therein may be limited
by equitable principles generally.

      (d) Compliance of Loan Documents with Laws, Etc. The execution, delivery
and performance of this Agreement, the Notes and the other Loan Documents to
which the Borrower or any other Loan Party is a party in accordance with their
respective terms and the borrowings and other extensions of credit hereunder do
not and will not, by the passage of time, the giving of notice, or both: (i)
require any Governmental Approval or violate any Applicable Law (including all
Environmental Laws) relating to the Borrower or any other Loan Party; (ii)
conflict with, result in a breach of or constitute a default under the
organizational documents of the Borrower or any other Loan Party, or any
material indenture, agreement or other instrument to which the Borrower or any
other Loan Party is a party or by which it or any of its respective properties
may be bound; or (iii) result in or require the creation or imposition of any
Lien upon or with respect to any property now owned or hereafter acquired by the
Borrower or any other Loan Party.

      (e) Compliance with Law; Governmental Approvals. The Borrower, each
Subsidiary and each other Loan Party is in compliance with each Governmental
Approval applicable to it and in compliance with all other Applicable Law
(including without limitation, Environmental Laws) relating to the Borrower, a
Subsidiary or such other Loan Party except for noncompliances which, and
Governmental Approvals the failure to possess which, would not, individually or
in the aggregate, cause a Default or Event of Default or have a Material Adverse
Effect.

      (f) Title to Properties; Liens. As of the Agreement Date, Schedule 6.1.(f)
sets forth all of the Multifamily Properties owned or leased by the Borrower,
each Subsidiary and each other Loan Party and identifies each Eligible Property.
Each such Person has good, marketable

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<PAGE>
and legal title to, or a valid leasehold interest in, its respective assets,
except where any such failure does not have and is not reasonably expected to
have a Material Adverse Effect. As of the Agreement Date, there are no Liens
against any assets of the Borrower, any Subsidiary or any other Loan Party
except for Permitted Liens.

      (g) Existing Notes Payable. Schedule 6.1.(g) is, as of September 30, 2003,
a complete and correct listing of all Indebtedness included in the "Notes
Payable" line item of the consolidated balance sheet of PPI as of such date.
During the period from such date to the Agreement Date, no additional
Indebtedness that would be included in the "Notes Payable" line item of the
consolidated balance sheet of PPI has been incurred except as set forth on such
Schedule.

      (h) Litigation. Except as set forth on Schedule 6.1.(h), there are no
actions, suits or proceedings pending (nor, to the knowledge of the Borrower,
are there any actions, suits or proceedings threatened) against or in any other
way relating adversely to or affecting the Borrower, any Subsidiary or any other
Loan Party or any of its respective property in any court or before any
arbitrator of any kind or before or by any other Governmental Authority which
could reasonably be expected to have a Material Adverse Effect. There are no
strikes, slow downs, work stoppages or walkouts or other material labor disputes
in progress or threatened relating to the Borrower, any Subsidiary or any other
Loan Party which, in any case, has had or could reasonably be expected to have a
Material Adverse Effect.

      (i) Taxes. All federal, state and other material tax returns of the
Borrower, any Subsidiary or any other Loan Party required by Applicable Law to
be filed have been duly filed, and all federal, state and other taxes,
assessments and other governmental charges or levies upon the Borrower, any
Subsidiary and each other Loan Party and its respective properties, income,
profits and assets which are due and payable have been paid, except any such
nonpayment which is at the time permitted under Section 7.6. or otherwise could
not reasonably be expected to have a Material Adverse Effect. As of the
Agreement Date, insofar as is known to the Borrower, none of the United States
income tax returns of the Borrower, its Subsidiaries or any other Loan Party is
under audit. All charges, accruals and reserves on the books of the Borrower and
each of its Subsidiaries in respect of any taxes or other governmental charges
are in accordance with GAAP, except where the failure to maintain such charges,
accruals or reserves could not reasonably be expected to have a Material Adverse
Effect.

      (j) Financial Statements. The Borrower has furnished to each Lender copies
of (i) the audited consolidated balance sheet of PPI for the fiscal year ending
December 31, 2002, and the related audited consolidated statements of
operations, cash flows and shareholders' equity for the fiscal year ending on
such dates, with the opinion thereon of PriceWaterhouseCoopers LLP, and (ii) the
unaudited consolidated balance sheet of PPI for the fiscal quarter ending
September 30, 2003, and the related unaudited consolidated statements of
operations, cash flows and shareholders' equity of PPI for the fiscal quarter
ending on such date. Such financial statements (including in each case related
schedules and notes) are complete and correct and present fairly in all material
respects, in accordance with GAAP consistently applied throughout the periods
involved, the consolidated financial position of PPI and the results of
operations and the cash flow for such periods (subject, as to interim
statements, to changes

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<PAGE>
resulting from normal year-end audit adjustments). None of PPI and its
Subsidiaries or the Borrower and its Subsidiaries has on the Agreement Date any
material contingent liabilities, liabilities, liabilities for taxes, unusual or
long-term commitments or unrealized or forward anticipated losses from any
unfavorable commitments that would be required to be set forth in its financial
statements or in the notes thereto, except as referred to or reflected or
provided for in said financial statements for the period ending September 30,
2003.

      (k) No Material Adverse Change. Since September 30, 2003, there has been
no material adverse change in the consolidated financial condition, operations,
business or properties of the Borrower and its consolidated Subsidiaries taken
as a whole. Each of the Borrower, its Subsidiaries and the other Loan Parties is
Solvent.

      (l) ERISA. Each member of the ERISA Group is in compliance with its
obligations under the minimum funding standards of ERISA and the Internal
Revenue Code with respect to each Plan and is in compliance with the presently
applicable provisions of ERISA and the Internal Revenue Code with respect to
each Plan, except in each case for noncompliances which could not reasonably be
expected to have a Material Adverse Effect. As of the Agreement Date, no member
of the ERISA Group has (i) sought a waiver of the minimum funding standard under
Section 412 of the Internal Revenue Code in respect of any Plan, (ii) failed to
make any contribution or payment to any Plan or Multiemployer Plan or in respect
of any Benefit Arrangement, or made any amendment to any Plan or Benefit
Arrangement, which has resulted or could result in the imposition of a Lien or
the posting of a bond or other security under ERISA or the Internal Revenue Code
or (iii) incurred any liability under Title IV of ERISA other than a liability
to the PBGC for premiums under Section 4007 of ERISA.

      (m) Not Plan Assets; No Prohibited Transaction. Except as set forth on
Schedule 6.1(m), (i) none of the assets of the Borrower, any Subsidiary of the
Borrower whose Equity Interests are owned directly by the Borrower, or any other
Loan Party constitute "plan assets" within the meaning of ERISA, the Internal
Revenue Code and the respective regulations promulgated thereunder, and (ii) the
execution, delivery and performance of this Agreement and the other Loan
Documents, and the borrowing and repayment of amounts hereunder, do not and will
not constitute "prohibited transactions" under ERISA or the Internal Revenue
Code.

      (n) Absence of Defaults. Neither the Borrower, any Subsidiary nor any
other Loan Party is in default under its articles of incorporation, bylaws,
partnership agreement or other similar organizational documents, and no event
has occurred, which has not been remedied, cured or waived: (i) which
constitutes a Default or an Event of Default; or (ii) which constitutes a
default or event of default by the Borrower, any Subsidiary or any other Loan
Party under any agreement (other than this Agreement) or under any judgment,
decree or order to which the Borrower or any Subsidiary or other Loan Party is a
party or by which the Borrower or any Subsidiary or other Loan Party or any of
their respective properties may be bound where such default or event of default
is reasonably expected to have, individually or in the aggregate, a Material
Adverse Effect.

      (o) Environmental Laws. Each of the Borrower, its Subsidiaries and the
other Loan Parties has obtained all Governmental Approvals which are required
under Environmental Laws

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<PAGE>
and is in compliance with all terms and conditions of such Governmental
Approvals which the failure to obtain or to comply with could reasonably be
expected to have a Material Adverse Effect. Except for any of the following
matters that could not be reasonably expected to have a Material Adverse Effect,
(i) the Borrower is not aware of, and has not received notice of, any past,
present, or future events, conditions, circumstances, activities, practices,
incidents, actions, or plans which, with respect to the Borrower, its
Subsidiaries and each other Loan Party, may interfere with or prevent compliance
or continued compliance with Environmental Laws, or may give rise to any
common-law or legal liability, or otherwise form the basis of any claim, action,
demand, suit, proceeding, hearing, study, or investigation, based on or related
to the manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling or the emission, discharge, release or threatened release
into the environment, of any Hazardous Material; and (ii) there is no civil,
criminal, or administrative action, suit, demand, claim, hearing, notice, or
demand letter, notice of violation, investigation, or proceeding pending or, to
the Borrower's knowledge, threatened against the Borrower, its Subsidiaries and
each other Loan Party relating in any way to Environmental Laws.

      (p) Investment Company; Public Utility Holding Company. Neither the
Borrower nor any Subsidiary nor any other Loan Party is (i) an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended, (ii) a "holding company" or a
"subsidiary company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company", within the meaning
of the Public Utility Holding Company Act of 1935, as amended, or (iii) subject
to any other Applicable Law which purports to regulate or restrict its ability
to borrow money or to consummate the transactions contemplated by this Agreement
or to perform its obligations under any Loan Document to which it is a party.

      (q) Margin Stock. Neither the Borrower, any Subsidiary nor any other Loan
Party is engaged principally, or as one of its important activities, in the
business of extending credit for the purpose, whether immediate, incidental or
ultimate, of buying or carrying "margin stock" within the meaning of Regulation
U of the Board of Governors of the Federal Reserve System.

      (r) Affiliate Transactions. Except as permitted by Section 9.10., neither
the Borrower, any Subsidiary nor any other Loan Party is a party to any
transaction (including the purchase, sale, lease or exchange of any property or
the rendering of any service) with any Affiliate of the Borrower, any Subsidiary
or any other Loan Party.

      (s) Intellectual Property. Each of the Borrower, each other Loan Party and
each other Subsidiary owns or has the right to use, under valid license
agreements or otherwise, all material licenses, franchises, trademarks,
trademark rights, trade names, trade name rights, trade secrets and copyrights
(collectively, "Intellectual Property") necessary to the conduct of its
businesses as now conducted and as contemplated by the Loan Documents, without
known conflict with any license, franchise, trademark, trade secret, trade name,
copyright, or other proprietary right of any other Person, in any case where the
failure to own or have the right to use such Intellectual Property, or where
such conflict, could reasonably be expected to have a Material Adverse Effect.
The Borrower, each other Loan Party and each other Subsidiary have taken all
such steps as they deem reasonably necessary to protect their respective rights
under and with respect to

                                       61
<PAGE>
such Intellectual Property, the absence of which in their respective businesses
could reasonably be expected to have a Material Adverse Effect. No material
claim has been asserted by any Person with respect to the use of any
Intellectual Property by the Borrower, any other Loan Party or any other
Subsidiary, or challenging or questioning the validity or effectiveness of any
Intellectual Property, the absence of which in their respective businesses could
reasonably be expected to have a Material Adverse Effect. The use of such
Intellectual Property by the Borrower, its Subsidiaries and the other Loan
Parties, does not infringe on the rights of any Person, subject to such claims
and infringements as do not, in the aggregate, give rise to any liabilities on
the part of the Borrower, any other Loan Party or any other Subsidiary that
could reasonably be expected to have a Material Adverse Effect.

      (t) Business. As of the Agreement Date, the Borrower and its Subsidiaries
are principally engaged in the business of owning, acquiring, renovating,
developing and managing Multifamily Properties, together with other business
activities reasonably related or incidental thereto.

      (u) Broker's Fees. No broker's or finder's fee, commission or similar
compensation will be payable with respect to the transactions contemplated
hereby. No other similar fees or commissions will be payable by any Loan Party
for any other services rendered to the Borrower or any of its Subsidiaries
ancillary to the transactions contemplated hereby.

      (v) Accuracy and Completeness of Information. No written information,
report or other papers or data (excluding financial projections and other
forward looking statements) furnished to the Agent or any Lender by, on behalf
of, or at the direction of, the Borrower, any Subsidiary or any other Loan Party
in connection with or relating in any way to this Agreement, contained any
untrue statement of a fact material to the creditworthiness of the Borrower, any
Subsidiary or any other Loan Party or omitted to state a material fact necessary
in order to make such statements contained therein, in light of the
circumstances under which they were made, not misleading. All financial
statements furnished to the Agent or any Lender by, on behalf of, or at the
direction of, the Borrower, any Subsidiary or any other Loan Party in connection
with or relating in any way to this Agreement, present fairly in all material
respects, in accordance with GAAP consistently applied throughout the periods
involved, the financial position of the Persons involved as at the date thereof
and the results of operations for such periods. All financial projections and
other forward looking statements prepared by or on behalf of the Borrower, any
Subsidiary or any other Loan Party that have been or may hereafter be made
available to the Agent or any Lender were or will be prepared in good faith
based on assumptions set forth therein or otherwise believed to be reasonable
based on information then available to the Borrower (it being understood that
actual results may vary from such projections, and such projections do not and
are not intended to provide any guarantee or assurance that actual results will
be consistent with such projections).

      (w) REIT Status. PPI qualifies as a REIT and is in compliance with all
requirements and conditions imposed under the Internal Revenue Code to allow PPI
to maintain its status as a REIT.

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      (x) Tax Shelter Regulations. None of the Borrower, any Guarantor, nor any
Subsidiary of any of the foregoing intends to treat the Loan or the transactions
contemplated by this Agreement and the other Loan Documents as being a
"reportable transaction" (within the meaning of Treasury Regulation Section
1.6011-4). If any such party determines to take any action inconsistent with
such intention, the Borrower will promptly notify each Lender thereof. If the
Borrower so notifies a Lender, the Borrower acknowledges that such Lender may
treat the Loan as part of a transaction that is subject to Treasury Regulation
Section 301.6112-1, and such Lender will maintain the lists and other records,
including the identity of the applicable party to the Loan as required by such
Treasury Regulation.

SECTION 6.2. SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC.

      All statements contained in any certificate, financial statement or other
instrument delivered by or on behalf of the Borrower, any Subsidiary or any
other Loan Party to the Agent or any Lender pursuant to or in connection with
this Agreement or any of the other Loan Documents (including, but not limited
to, any such statement made in or in connection with any amendment thereto or
any statement contained in any certificate, financial statement or other
instrument delivered by or on behalf of the Borrower prior to the Agreement Date
and delivered to the Agent or any Lender in connection with closing the
transactions contemplated hereby) shall constitute representations and
warranties made by the Borrower under this Agreement. All representations and
warranties made under this Agreement and the other Loan Documents shall be
deemed to be made at and as of the Agreement Date, the Effective Date and the
date of the occurrence of any Credit Event, except to the extent that such
representations and warranties expressly relate solely to an earlier date (in
which case such representations and warranties shall have been true and accurate
on and as of such earlier date) and except for changes in factual circumstances
specifically permitted hereunder. All such representations and warranties shall
survive the effectiveness of this Agreement, the execution and delivery of the
Loan Documents and the making of the Loans and the issuance of the Letters of
Credit.

                       ARTICLE VII. AFFIRMATIVE COVENANTS

      For so long as this Agreement is in effect, unless the Requisite Lenders
(or, if required pursuant to Section 12.6., all of the Lenders) shall otherwise
consent in the manner provided for in Section 12.6., the Borrower shall comply
with the following covenants:

SECTION 7.1. PRESERVATION OF EXISTENCE AND SIMILAR MATTERS.

      Except as otherwise permitted under Section 9.7., the Borrower shall, and
shall cause each Subsidiary and each other Loan Party to, preserve and maintain
its respective existence, rights, franchises, licenses and privileges in the
jurisdiction of its incorporation or formation and qualify and remain qualified
and authorized to do business in each jurisdiction in which the character of its
properties or the nature of its business requires such qualification and
authorization, except where the failure to be so authorized and qualified, or to
maintain such rights, franchises, licenses and privileges, could not, reasonably
be expected to have a Material Adverse Effect.

SECTION 7.2. COMPLIANCE WITH APPLICABLE LAW AND MATERIAL CONTRACTS.

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      The Borrower shall, and shall cause each Subsidiary and each other Loan
Party to, comply with (a) all Applicable Law, including the obtaining of all
Governmental Approvals, and (b) all terms and conditions of all material
contracts to which it is a party, in each case where such failure to comply
could reasonably be expected to have a Material Adverse Effect.

SECTION 7.3. MAINTENANCE OF PROPERTY.

      In addition to the requirements of any of the other Loan Documents, the
Borrower shall, and shall cause each Subsidiary and other Loan Party to, (a)
protect and preserve all of its material properties, including, but not limited
to, all Intellectual Property, and maintain in good repair, working order and
condition all tangible properties, ordinary wear and tear excepted, and (b) make
or cause to be made all needed and appropriate repairs, renewals, replacements
and additions to such properties, in each case in the preceding clauses (a) and
(b) to the extent required so that the business carried on in connection
therewith may be properly and advantageously conducted at all times, except
where the failure to take any such action could not reasonably be expected to
have a Material Adverse Effect.

SECTION 7.4. CONDUCT OF BUSINESS.

      The Borrower shall, and shall cause its Subsidiaries and the other Loan
Parties, taken as a whole, to engage principally in the business of owning,
acquiring, renovating, developing and managing Multifamily Properties, together
with other business activities reasonably related or incidental thereto.

SECTION 7.5. INSURANCE.

      In addition to the requirements of any of the other Loan Documents, the
Borrower shall, and shall cause each Subsidiary and other Loan Party to,
maintain insurance with financially sound and reputable insurance companies
against such risks and in such amounts as is customarily maintained by Persons
engaged in similar businesses or as may be required by Applicable Law, and from
time to time deliver to the Agent upon its request a detailed list, together
with copies of all policies of the insurance then in effect, stating the names
of the insurance companies, the amounts and rates of the insurance, the dates of
the expiration thereof and the properties and risks covered thereby.

SECTION 7.6. PAYMENT OF TAXES AND CLAIMS.

      The Borrower shall, and shall cause each Subsidiary and other Loan Party
to, pay and discharge when due (a) all taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits or upon any
properties belonging to it, and (b) all lawful claims of materialmen, mechanics,
carriers, warehousemen and landlords for labor, materials, supplies and rentals
which, if unpaid, might become a Lien on any properties of such Person;
provided, however, that this Section shall not require the payment or discharge
of any such tax, assessment, charge, levy or claim (i) which is being contested
in good faith by appropriate proceedings which operate to suspend the collection
thereof and for which adequate reserves have been established on the books of
the Borrower, such Subsidiary or such other Loan Party, as applicable, in

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accordance with GAAP, or (ii) which could not otherwise reasonably be expected
to have a Material Adverse Effect.

SECTION 7.7. VISITS AND INSPECTIONS.

      The Borrower shall, and shall cause each Subsidiary and other Loan Party
to, permit representatives or agents of any Lender or the Agent, from time to
time after reasonable prior notice if no Event of Default shall be in existence,
as often as may be reasonably requested, but only during normal business hours
and at the expense of such Lender or the Agent (unless a Default or Event of
Default shall be continuing, in which case the exercise by the Agent or such
Lender of its rights under this Section shall be at the expense of the
Borrower), as the case may be, to: (a) visit and inspect all properties of the
Borrower or such Subsidiary or other Loan Party to the extent any such right to
visit or inspect is within the control of such Person; (b) inspect and make
extracts from their respective books and records, including but not limited to
management letters prepared by independent accountants; and (c) discuss with its
officers and employees and its independent accountants (provided any discussions
with such accountants shall be only after prior written notice to the Borrower
and, at the Borrower's election, with the Borrower's participation in such
discussions) its business, properties, condition (financial or otherwise),
results of operations and performance. If requested by the Agent, the Borrower
shall execute an authorization letter addressed to its accountants authorizing
the Agent or any Lender to discuss the financial affairs of the Borrower and any
Subsidiary or any other Loan Party with its accountants, in each case after
prior written notice thereof to the Borrower and, at the Borrower's elections,
with the Borrower's participation in such discussions..

SECTION 7.8. USE OF PROCEEDS; LETTERS OF CREDIT.

      The Borrower shall use the proceeds of all Loans and all Letters of Credit
for general corporate purposes only. Except as provided in Section 9.2(d)., the
Borrower shall not, and shall not permit any Subsidiary or other Loan Party to,
use any part of such proceeds or Letters of Credit to purchase or carry, or to
reduce or retire or refinance any credit incurred to purchase or carry, any
margin stock (within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System) or to extend credit to others for the purpose of
purchasing or carrying any such margin stock.

SECTION 7.9. ENVIRONMENTAL MATTERS.

      The Borrower shall, and shall cause all of its Subsidiaries and the other
Loan Parties to, comply with all Environmental Laws the failure with which to
comply could reasonably be expected to have a Material Adverse Effect. If the
Borrower, any Subsidiary or any other Loan Party shall (a) receive notice that
any violation of any Environmental Law may have been committed or is about to be
committed by such Person, (b) receive notice that any administrative or judicial
complaint or order has been filed or is about to be filed against the Borrower,
any Subsidiary or any other Loan Party alleging violations of any Environmental
Law or requiring the Borrower, any Subsidiary or any other Loan Party to take
any action in connection with the release of Hazardous Materials or (c) receive
any notice from a Governmental Authority or private party alleging that the
Borrower, any Subsidiary or any other Loan Party may be liable or responsible
for costs associated with a response to or cleanup of a release of Hazardous
Materials

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or any damages caused thereby, and such notices, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect, the
Borrower shall provide the Agent and each Lender with a copy of such notice
promptly, and in any event within 10 Business Days, after the receipt thereof by
the Borrower, any Subsidiary or any other Loan Party. The Borrower shall, and
shall cause its Subsidiaries and the other Loan Parties to, take promptly all
actions reasonably available to it to prevent the imposition of any Liens on any
of their respective properties arising out of or related to any Environmental
Laws that could reasonably be expected to have a Material Adverse Effect.

SECTION 7.10. BOOKS AND RECORDS.

      The Borrower shall, and shall cause each of its Subsidiaries and the other
Loan Parties to, maintain books and records pertaining to its respective
business operations in such detail, form and scope as is consistent with good
business practice and in accordance with GAAP.

SECTION 7.11. FURTHER ASSURANCES.

      The Borrower shall, at the Borrower's cost and expense and upon request of
the Agent, execute and deliver or cause to be executed and delivered, to the
Agent such further instruments, documents and certificates, and do and cause to
be done such further acts that may be reasonably necessary or advisable in the
reasonable opinion of the Agent to carry out more effectively the provisions and
purposes of this Agreement and the other Loan Documents.

SECTION 7.12. NEW SUBSIDIARIES/GUARANTORS.

      (a) Requirement to Become Guarantor. Within 30 days of any Person (other
than an Excluded Subsidiary) becoming a Significant Subsidiary after the
Effective Date, the Borrower shall deliver to the Agent each of the following
items, each in form and substance satisfactory to the Agent: (i) an Accession
Agreement executed by such Significant Subsidiary and (ii) the items that would
have been delivered under Sections 5.1.(a)(iv) and (ix) through (xii) if such
Significant Subsidiary had been one on the Effective Date; provided, however,
promptly (and in any event within 30 days) upon any Excluded Subsidiary ceasing
to be subject to the restriction which prevented it from delivering an Accession
Agreement pursuant to this Section, such Subsidiary shall comply with the
provisions of this Section. The Agent shall send to each Lender copies of each
of the foregoing items once the Agent has received all such items with respect
to a Significant Subsidiary.

      (b) Other Guarantors.

            (i) The Borrower may, at its option, cause any Subsidiary that is
      not already a Guarantor to become a Guarantor by executing and delivering
      to the Agent the items required to be delivered under the immediately
      preceding subsection (a).

            (ii) Notwithstanding Section 10.1(c)(i), if the Borrower determines
      that it has not satisfied any of the financial covenants set forth in
      Section 9.1(g) or Section 9.1(h), but that any such financial covenant
      would have been satisfied if one or more Subsidiaries that were not
      already Guarantors had become a Guarantor in the manner

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      described in the immediately preceding subsection (b)(i), the Borrower
      shall on the same day that such determination is first made by the
      Borrower notify the Agent in writing of such determination and thereafter
      shall have a period of 10 Business Days to cause such Subsidiary or
      Subsidiaries to execute and deliver to the Agent those items required to
      be delivered under the immediately preceding subsection (a) for such
      Subsidiary or Subsidiaries to become a Guarantor. If such items are
      delivered to the Agent within such time period, and if the inclusion of
      such Subsidiary or Subsidiaries as a Guarantor would cause such financial
      covenant to be satisfied, such financial covenant shall be deemed to have
      been satisfied, and any resulting non-compliance cured, effective
      immediately prior to the first date as to which such non-compliance would
      have otherwise occurred, such that no Event of Default shall be deemed to
      have arisen therefrom.

      (c) Release of a Guarantor. The Borrower may request in writing that the
Agent release, and upon receipt of such request the Agent shall release, a
Guarantor from the Guaranty so long as: (i) such Guarantor ceases to be a
Subsidiary of the Borrower in a transaction not prohibited by Section 9.6, or
such Guarantor meets, or will meet simultaneously with its release from the
Guaranty, all of the provisions of the definition of the term "Excluded
Subsidiary" or such Guarantor has ceased to be, or simultaneously with its
release from the Guaranty will cease to be, a Significant Subsidiary or has
obtained a loan secured by a mortgage on its principal Property; (ii) such
Guarantor is not otherwise required to be a party to the Guaranty under the
immediately preceding subsection (a); (iii) no Default or Event of Default shall
then be in existence or would occur as a result of such release, including
without limitation, a Default or Event of Default resulting from a violation of
any of the covenants contained in Section 9.1.; and (iv) the Agent shall have
received such written request at least 10 Business Days prior to the requested
date of release. Delivery by the Borrower to the Agent of any such request shall
constitute a representation by the Borrower that the matters set forth in the
preceding sentence (both as of the date of the giving of such request and as of
the date of the effectiveness of such request) are true and correct with respect
to such request.

SECTION 7.13. REIT STATUS.

      The Borrower shall at all times maintain its status as a REIT.

SECTION 7.14. EXCHANGE LISTING.

      PPI shall maintain at least one class of common shares of PPI having
trading privileges on the New York Stock Exchange or the American Stock Exchange
or which is the subject of price quotations in the over-the-counter market as
reported by the National Association of Securities Dealers Automated Quotation
System.

SECTION 7.15. POST-CLOSING REQUIREMENT

      By no later than February 29, 2004, the Borrower shall have provided to
the Agent (a) copies certified by the Secretary or Assistant Secretary of each
of GP Sub and LP Sub of resolutions duly adopted by the boards of directors of
each of GP Sub and LP Sub authorizing the execution of the Guaranty by each such
entity and (b) a supplemental opinion of King & Spalding LLP addressed to the
Agent and the Lenders regarding the due authorization of the

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Guaranty by GP Sub and LP Sub and such other matters regarding the Guaranty as
King & Spalding LLP was unable to opine on as of the Effective Date due to the
absence of the duly adopted resolutions described in the immediately preceding
clause (a).

                            ARTICLE VIII. INFORMATION

      For so long as this Agreement is in effect, unless the Requisite Lenders
(or, if required pursuant to Section 12.6., all of the Lenders) shall otherwise
consent in the manner set forth in Section 12.6., the Borrower shall furnish to
each Lender (or to the Agent if so provided below) at its Lending Office:

SECTION 8.1. QUARTERLY FINANCIAL STATEMENTS.

      As soon as available and in any event within 45 days after the close of
each of the first, second and third fiscal quarters of PPI and the Borrower, the
unaudited consolidated balance sheet of PPI as at the end of such period and the
related unaudited consolidated statements of income, shareholders' equity and
cash flows of PPI for such period, setting forth in each case in comparative
form the figures as of the end of and for the corresponding periods of the
previous fiscal year, all of which shall be certified by the chief executive
officer and the chief financial officer of PPI, in his or her opinion, to
present fairly in all material respects, in accordance with GAAP, the
consolidated financial position of PPI as at the date thereof and the results of
operations for such period (subject to normal year-end audit adjustments).

SECTION 8.2. YEAR-END STATEMENTS.

      Within 90 days after the end of each fiscal year of PPI, the audited
consolidated balance sheet of PPI as at the end of such fiscal year and the
related audited consolidated statements of income, shareholders' equity and cash
flows of PPI for such fiscal year, setting forth in comparative form the figures
as at the end of and for the previous fiscal year, all of which shall be
certified by (a) the chief executive officer and chief financial officer of PPI,
in his or her opinion, to present fairly in all material respects, in accordance
with GAAP, the consolidated financial position of PPI as at the date thereof and
the results of operations for such period and (b) independent certified public
accountants of recognized national standing acceptable to the Agent, whose
certificate shall be unqualified and in scope and substance satisfactory to the
Requisite Lenders.

SECTION 8.3. COMPLIANCE CERTIFICATE.

      At the time financial statements are furnished pursuant to Sections 8.1.
and 8.2., and if the Requisite Lenders reasonably believe that an Event of
Default specified in Sections 10.1(a), 10.1(b) and 10.1(f) of this Agreement or
Default under Section 10.1(g) may occur, then within 10 days of the Agent's
request with respect to any other fiscal period, a certificate substantially in
the form of Exhibit N (a "Compliance Certificate") executed by the chief
financial officer or chief accounting officer of the Borrower: (a) setting forth
in reasonable detail as at the end of such quarterly accounting period, fiscal
year, or other fiscal period, as the case may be, the calculations required to
establish whether or not the Borrower was in compliance with the
covenants contained in Sections 9.1., 9.2. and 9.4. and (b) stating that, to the
best of his or her

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<PAGE>
knowledge, information and belief after due inquiry, no Default or Event of
Default exists, or, if such is not the case, specifying such Default or Event of
Default and its nature, when it occurred, whether it is continuing and the steps
being taken by the Borrower with respect to such event, condition or failure.
Each Compliance Certificate shall be accompanied by a reasonably detailed list
of all assets included in calculations of Unencumbered Asset Value and shall
disclose which assets have been added or removed from such calculation since the
previous list delivered to the Agent.

SECTION 8.4. ADDITIONAL QUARTERLY AND ANNUAL INFORMATION.

Within 45 days after the close of each of the first, second and third fiscal
quarters of PPI and the Borrower, and within 90 days after the close of the
fourth fiscal quarter of PPI and the Borrower, Borrower shall provide the Agent
with the following financial information certified by the chief financial
officer of Borrower: (a) a statement of funds from operations of PPI for such
fiscal quarter; (b) a list of capital expenditures during such fiscal quarter;
(c) a report of Properties acquired during such fiscal quarter, including the
Net Operating Income of such Properties for such fiscal quarter, the cost of
such Properties and the mortgage debt of such Properties, if any, at the end of
such fiscal quarter; (d) a statement of Properties sold during such fiscal
quarter and the sales price; and (e) a breakdown of Net Operating Income by
Property for the four quarter period then ended, including total revenues,
expenses and economic occupancy.

SECTION 8.5 PRO-FORMA FINANCIAL INFORMATION

      Within 60 days after the close of each of the first, second and third
fiscal quarters of each fiscal year of the Borrower the following projected
financial information for the second, third and fourth fiscal quarters,
respectively, of such fiscal year, and by the last day of February of each
fiscal year, the following projected financial information for the first fiscal
quarter of such fiscal year: PPI's forecasted consolidated statements of income
(containing sufficient detail to calculate EBITDA) and sources and uses of
funds, all prepared as applicable on a consistent basis with PPI's historical
financial statements, together with (i) forecasted capital expenditures,
revenue, expenses and occupancy, (ii) forecasted Net Operating Income by market,
and (iii) projected calculations of the covenants contained in Sections 9.1.,
9.2. and 9.4., except that the projected covenant calculations to be delivered
by the last day of February of each fiscal year shall be projections for all of
such fiscal year.

SECTION 8.6. OTHER INFORMATION.

      (a) Management Reports. Promptly upon receipt thereof, copies of all
material management reports, if any, submitted to PPI or its Board of Directors
by its independent public accountants including;

      (b) Securities Filings. Within 5 Business Days of the filing thereof,
copies of all registration statements (excluding the exhibits thereto (unless
requested by the Agent) and any registration statements on Form S-8 or its
equivalent), reports on Forms 10-K, 10-Q and 8-K (or their equivalents) and all
other periodic reports which the Borrower, any Subsidiary or any other Loan
Party shall file with the Securities and Exchange Commission (or any
Governmental Authority substituted therefor) or any national securities
exchange;

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<PAGE>
      (c) Shareholder Information. Promptly upon the mailing thereof to the
shareholders of PPI or the partners of the Borrower generally, copies of all
financial statements, reports and proxy statements so mailed and promptly upon
the issuance thereof copies of all press releases issued by the Borrower, any
Subsidiary or any other Loan Party;

      (d) ERISA. If and when any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as defined in
Section 4043 of ERISA) with respect to any Plan which might constitute grounds
for a termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA or notice that any Multiemployer
Plan is in reorganization, is insolvent or has been terminated, a copy of such
notice; (iii) receives notice from the PBGC under Title IV of ERISA of an intent
to terminate, impose liability (other than for premiums under Section 4007 of
ERISA) in respect of, or appoint a trustee to administer any Plan, a copy of
such notice; (iv) applies for a waiver of the minimum funding standard under
Section 412 of the Internal Revenue Code, a copy of such application; (v) gives
notice of intent to terminate any Plan under Section 4041(c) of ERISA, a copy of
such notice and other information filed with the PBGC; (vi) gives notice of
withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of such
notice; or (vii) fails to make any payment or contribution to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement or makes any
amendment to any Plan or Benefit Arrangement which has resulted or could result
in the imposition of a Lien or the posting of a bond or other security, a
certificate of the chief financial officer of the Borrower setting forth details
as to such occurrence and the action, if any, which the Borrower or applicable
member of the ERISA Group is required or proposes to take;

      (e) Litigation. To the extent the Borrower, any of its Subsidiary or any
other Loan Party is aware of the same, prompt notice of the commencement of any
proceeding or investigation by or before any Governmental Authority and any
action or proceeding in any court or other tribunal or before any arbitrator
against or in any other way relating adversely to, or adversely affecting, the
Borrower, any of its Subsidiary or any other Loan Party or any of their
respective properties, assets or businesses which could reasonably be expected
to have a Material Adverse Effect, and prompt notice of the receipt of notice
that any United States income tax returns of the Borrower, any of its
Subsidiaries or any other Loan Party are being audited, the outcome of which
audits could reasonably be expected to have a Material Adverse Effect;

      (f) Modification of Organizational Documents. A copy of any amendment to
the articles of incorporation, bylaws, partnership agreement or other similar
organizational documents of the Borrower or any other Loan Party, which
amendment would have a material adverse effect on such Person's ability to
perform or comply with its obligations under the Loan Documents, promptly upon,
and in any event within 15 Business Days of, the effectiveness thereof; `

      (g) Change of Management or Financial Condition. Prompt notice of any
change in the senior management of the Borrower or any other Loan Party and any
change in the business,

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financial condition, operations or properties of the Borrower, any Subsidiary or
any other Loan Party, which in the case of any of the foregoing changes has had
or could reasonably be expected to have Material Adverse Effect;

      (h) Default. Notice of the occurrence of any of the following promptly
upon a Responsible Officer of the Borrower or any other Loan Party obtaining
knowledge thereof: (i) any Default or Event of Default or (ii) any event which
constitutes or which with the passage of time, the giving of notice, or
otherwise, would constitute a default or event of default by the Borrower, any
Subsidiary of the Borrower or any other Loan Party under any contract to which
any such Person is a party or by which any such Person or any of its respective
properties may be bound and where such default or event of default could be
reasonably expected to have a Material Adverse Effect;

      (i) Judgments. Prompt notice of any order, judgment or decree in excess of
$10,000,000 (exclusive of amounts subject to insurance coverage or to
reimbursement or indemnity payments from a surety or other creditworthy party)
having been entered against the Borrower, any Subsidiary of the Borrower or any
other Loan Party or any of their respective properties or assets;

      (j) Notice of Violations of Law. Prompt notice if the Borrower, any
Subsidiary of the Borrower or any other Loan Party shall receive any
notification from any Governmental Authority alleging a violation of any
Applicable Law or any inquiry which could reasonably be expected to have a
Material Adverse Effect;

      (k) Significant Subsidiary. Prompt notice of any Person becoming a
Significant Subsidiary; and

      (l) Other Information. From time to time and promptly upon each request,
such data, certificates, reports, statements, opinions of counsel, documents or
further information regarding the business, assets, liabilities, financial
condition, results of operations or business prospects of the Borrower, any of
its Subsidiaries or any other Loan Party as the Agent or any Lender may
reasonably request.

                         ARTICLE IX. NEGATIVE COVENANTS

      For so long as this Agreement is in effect, unless the Requisite Lenders
(or, if required pursuant to Section 12.6., all of the Lenders) shall otherwise
consent in the manner set forth in Section 12.6., the Borrower shall comply with
the following covenants:

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SECTION 9.1. FINANCIAL COVENANTS.

      The Borrower shall not permit:

      (a) Maximum Leverage Ratio. The ratio of (i) Total Indebtedness to (ii)
Gross Asset Value, to exceed (a) 0.575 to 1.0 at any time during the first 18
months after the Effective Date and (b) 0.55 to 1.0 at any time thereafter.

      (b) Minimum Interest Coverage Ratio. The ratio of (i) EBITDA for the four
fiscal quarter period of the Borrower most recently ending to (ii) Interest
Expense for such period, to be less than 2.0 to 1.0 at the end of each fiscal
quarter of the Borrower.

      (c) Minimum Fixed Charge Coverage Ratio. The ratio of (i) Adjusted EBITDA
for the four fiscal quarter period of the Borrower most recently ending to (ii)
Fixed Charges for such period, to be less than (a) 1.60 to 1.00 at the end of
each fiscal quarter of the Borrower during the first 18 months after the
Effective Date and (b) 1.65 to 1.00 at the end of each fiscal quarter of the
Borrower thereafter.

      (d) Maximum Total Secured Indebtedness. The ratio of (i) Total Secured
Indebtedness to (ii) Gross Asset Value, to be greater than 0.35 to 1.00 at any
time.

      (e) Maximum Secured Recourse Indebtedness. The ratio of (i) Secured
Recourse Indebtedness to (ii) Gross Asset Value, to be greater than 0.1 to 1.00
at any time.

      (f) Minimum Tangible Net Worth. Tangible Net Worth at any time to be less
than (i) $950,000,000 plus (ii) 90% of the Net Proceeds of all Equity Issuances
(excluding Equity Issuances to other members of the Consolidated Group) effected
by any member of the Consolidated Group after December 31, 2002.

      (g) Gross Asset Value of Borrower and Subsidiary Guarantors. The ratio of
(i) Gross Asset Value attributable only to the Borrower and its Subsidiaries
that are Guarantors to (ii) Gross Asset Value, to be less than 0.85 to 1.00 at
any time.

      (h) Minimum Unencumbered Assets Leverage Ratio. The ratio of (i)
Unencumbered Asset Value to (ii) Unsecured Indebtedness, to be less than 1.75
to1.00 at any time.

      (i) Minimum Unencumbered Interest Coverage Ratio. The ratio of (i)
Unencumbered Adjusted Net Operating Income for all Eligible Properties for the
four fiscal quarter period of the Borrower most recently ending to (ii) Interest
Expense attributable to Unsecured Indebtedness for such period, to be less than
2.0 to 1.0 at the end of each fiscal quarter of the Borrower.

      (j) Maximum Floating Rate Indebtedness to Gross Asset Value. The ratio of
(i) Floating Rate Indebtedness to (ii) Gross Asset Value, to be greater than 0.3
to 1.0 at any time.

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SECTION 9.2. RESTRICTED PAYMENTS.

      The Borrower shall not, and shall not permit any other member of the
Consolidated Group to, declare or make any Restricted Payment; provided,
however, that:

      (a) the Borrower may declare or make cash distributions to its partners
and PPI may declare or make cash distributions to it shareholders, during any
fiscal year in an aggregate amount not to exceed 100% of Consolidated Income
Available for Distribution for such fiscal year, together with (i) sums in
excess of the foregoing amount as are required for PPI to remain in compliance
with Section 7.13. and to avoid incurring any Federal income tax on ordinary
real estate investment trust taxable income, and (ii) amounts for capital gains
dividends declared within such fiscal year in an aggregate amount not to exceed
$15,000,000; provided, however, if the Borrower receives or maintains during
such fiscal year a Credit Rating that is less than an Investment Grade Rating,
then cash distributions to Borrower's partners and PPI's shareholders in such
fiscal year will be limited to an aggregate amount not to exceed 95% of
Consolidated Income Available for Distribution for such fiscal year with the
same exceptions contained in clauses (i) and (ii) above; and provided, further,
that while a Specified Event of Default shall exist, then PPI may not make cash
distributions to its shareholders and the Borrower may not make cash
distributions to its partners other than GP Sub and LP Sub;

      (b) Subsidiaries may make Restricted Payments to PPI, the Borrower or any
other Subsidiary;

      (c) Restricted Payments may be made to partners, members, shareholders and
other owners of Equity Interests in Subsidiaries (i) as required pursuant to
contractual obligations or the applicable organizations documents in effect with
respect to such Subsidiary, and (ii) otherwise so long as no Event of Default
would then exist after giving effect thereto; provided, however, that while a
Specified Event of Default shall exist, Subsidiaries may make only the
Restricted Payments described in clause (b) above;

      (d) PPI may redeem, repurchase, or otherwise acquire for value any shares
of PPI's capital stock, and Borrower may redeem, repurchase, or otherwise
acquire for value any of the Borrower's partnership interests unless, in either
case, immediately thereafter and after giving effect thereto, an Event of
Default would then exist; and

      (e) Cash distributions by PPI and Borrower on Preferred Securities so long
as no Specified Event of Default then exists.

SECTION 9.3. INDEBTEDNESS.

      The Borrower shall not, and shall not permit any Subsidiary or any other
Loan Party to, incur, assume, or otherwise become obligated in respect of any
Indebtedness after the Agreement Date if immediately prior to the assumption,
incurring or becoming obligated in respect thereof, or immediately thereafter
and after giving effect thereto, an Event of Default is or would be in
existence, including without limitation, an Event of Default resulting from a
violation of any of the covenants contained in Section 9.1.

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SECTION 9.4. CERTAIN PERMITTED INVESTMENTS.

      The Borrower shall not, and shall not permit any Subsidiary or any other
Loan Party, to make any Investment in or otherwise own the following items
(whether through the Borrower, a Subsidiary, any other Loan Party or the
Borrower's Unconsolidated Affiliates) which would cause the aggregate value of
such holdings of the Borrower, such Subsidiaries and the other Loan Parties to
exceed the applicable limits set forth below:

      (a) Investments in Unimproved Land shall not exceed 5% of Gross Asset
Value at any time;

      (b) Investments in securities of companies that are listed and actively
traded on a national securities exchange shall not exceed 5% of Gross Asset
Value at any time;

      (c) Investments in Non-Multifamily Properties shall not exceed 5% of Gross
Asset Value at any time;

      (d) Investments in Notes Receivable shall not exceed 15% of Gross Asset
Value at any time;

      (e) Investments in Unconsolidated Affiliates shall not exceed 20% of Gross
Asset Value at any time; and

      (f) Investments in Development Properties shall not exceed 20% of Gross
Asset Value at any time. In addition to the foregoing limitations, the aggregate
value of all of the items subject to the limitations in the preceding clauses
(a) through (f) shall not exceed 25% of Gross Asset Value at any time.

For the purposes of this Section 9.4, (i) the Investment of the Borrower in any
Unconsolidated Affiliates will equal (A) the Borrower's pro rata share of the
Adjusted EBITDA from such assets as determined for the preceding fiscal quarter,
divided by (B) the Capitalization Rate, and (ii) all other Investments will be
valued at the lower of undepreciated GAAP book value or market value.

SECTION 9.5. INVESTMENTS GENERALLY.

      The Borrower shall not, and shall not permit any Subsidiary or other Loan
Party to, directly or indirectly, acquire, make or purchase any Investment, or
permit any Investment of such Person to be outstanding on and after the
Agreement Date, other than the following:

      (a) Investments in Subsidiaries in existence on the Agreement Date and
disclosed on Schedule 6.1.(b);

      (b) Investments to acquire Equity Interests of a Subsidiary or any other
Person who after giving effect to such acquisition would be a Subsidiary, so
long as in each case (i) immediately prior to such Investment, and after giving
effect thereto, no Event of Default is or

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would be in existence and (ii) if such Subsidiary is (or after giving effect to
such Investment would become) a Significant Subsidiary, and is not an Excluded
Subsidiary, the terms and conditions set forth in Section 7.12. are satisfied;

      (c) Investments permitted under Section 9.4.;

      (d) Investments in Cash Equivalents;

      (e) intercompany Indebtedness among the Borrower and its Wholly Owned
Subsidiaries provided that such Indebtedness is permitted by the terms of
Section 9.3.;

      (f) loans and advances to officers and employees for moving,
entertainment, travel and other similar expenses in the ordinary course of
business consistent with past practices; and

      (g) any other Investment so long as immediately prior to making such
Investment, and immediately thereafter and after giving effect thereto, no Event
of Default is or would be in existence.

SECTION 9.6. LIENS; NEGATIVE PLEDGES; OTHER MATTERS.

      (a) The Borrower shall not, and shall not permit any Subsidiary or other
Loan Party to, create, assume, or incur any Lien (other than Permitted Liens)
upon any of its properties, assets, income or profits of any character whether
now owned or hereafter acquired if immediately prior to the creation, assumption
or incurring of such Lien, or immediately thereafter, a Default or Event of
Default is or would be in existence, including without limitation, a Default or
Event of Default resulting from a violation of any of the covenants contained in
Section 9.1.

      (b) The Borrower shall not, and shall not permit any Subsidiary or other
Loan Party to, enter into, assume or otherwise be bound by any Negative Pledge,
except for a Negative Pledge contained (i) in any agreement (x) evidencing
Indebtedness which the Borrower or such Subsidiary may create, incur, assume, or
permit or suffer to exist under Section 9.3., (y) which Indebtedness is secured
by a Lien permitted to exist, and (z) which prohibits the creation of any other
Lien on only the property securing such Indebtedness as of the date such
agreement was entered into; (ii) leases and other agreements restricting the
assignment, sublease, or pledge thereof; (iii) the organizational documents and
financing agreements applicable solely to any Subsidiary that is participating
in a structured finance arrangement as a "bankruptcy remote" Subsidiary; (iv)
the organizational documents or other agreements binding on any Excluded
Subsidiary or any non-Wholly Owned Subsidiary; (v) in any agreements evidencing
or governing Unsecured Indebtedness otherwise permitted by Section 9.3 of this
Agreement in a principal amount not less than $25,000,000; or (vii) any
agreements more particularly described on Schedule 9.6(b) to this Agreement and
any extensions, renewals, refinancings, or replacements of such agreements.

      (c) The Borrower shall not, and shall not permit any Subsidiary or other
Loan Party to, create or otherwise cause or suffer to exist or become effective
any consensual encumbrance or restriction of any kind on the ability of any
Subsidiary to: (i) pay dividends or make any other

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distribution on any of such Subsidiary's capital stock or other equity interests
owned by the Borrower or any Subsidiary; (ii) pay any Indebtedness owed to the
Borrower or any Subsidiary; (iii) make loans or advances to the Borrower or any
Subsidiary; or (iv) transfer any of its property or assets to the Borrower or
any Subsidiary, except for any such encumbrances or restrictions (A) imposed by
Applicable Law, (B) contained in agreements relating to the sale of a Subsidiary
or assets pending such sale, or relating to Indebtedness secured by a Lien on
assets that the Borrower or such Subsidiary may create, incur, assume, or permit
or suffer to exist under Sections 9.3. and 9.6., provided that in any such case
the encumbrances and restrictions apply only to the Subsidiary or the assets
that are the subject of such sale or Lien, as the case may be, (C) set forth in
the organizational documents or other agreements binding on or applicable to any
Excluded Subsidiary or any non-Wholly Owned Subsidiary, (D) contained in the
organizational documents or financing agreements of any Subsidiary that is
participating in a structured finance arrangement as a "bankruptcy remote"
Subsidiary, or (E) contained in the agreements described on Schedule 9.6(c) to
this Agreement and any renewals, extensions, refinancings, or replacements of
any such agreements.

SECTION 9.7. MERGER, CONSOLIDATION, SALES OF ASSETS AND OTHER ARRANGEMENTS.

      The Borrower shall not, and shall not permit any Subsidiaries or other
Loan Parties to: (i) enter into any transaction of merger or consolidation; (ii)
liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution); or (iii) convey, sell, lease, sublease, transfer or otherwise
dispose of, in one transaction or a series of related transactions, all or
substantially all of the assets of the Borrower and its Subsidiaries taken as a
whole, whether now owned or hereafter acquired; provided, however, that:

      (a) any of the actions described in the immediately preceding clauses (i)
and (ii) may be taken with respect to any Subsidiary that is not also a Loan
Party so long as immediately prior to the taking of such action, and immediately
thereafter and after giving effect thereto, no Event of Default is or would be
in existence;

      (b) a Person may merge with and into the Borrower or another Loan Party,
as the case may be, so long as (i) the Borrower or the other Loan Party, as the
case may be, is the survivor of such merger, (ii) immediately prior to such
merger, and immediately thereafter and after giving effect thereto, no Event of
Default is or would be in existence; and (iii) the Borrower shall have given the
Agent and the Lenders at least 10 Business Days' prior written notice of such
merger (except that such prior notice shall not be required in the case of the
merger of a Subsidiary with and into the Borrower or another Loan Party); and

      (c) the Borrower and each Subsidiary may convey, sell, lease, sublease,
transfer or otherwise dispose of assets among themselves.

SECTION 9.8. FISCAL YEAR.

      Neither PPI nor the Borrower shall not change its fiscal year from that in
effect as of the Agreement Date.

SECTION 9.9. MODIFICATIONS OF ORGANIZATIONAL DOCUMENTS.

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      The Borrower shall not, and shall not permit any Loan Party or other
Subsidiary to, amend, supplement, restate or otherwise modify its articles or
certificate of incorporation, by-laws, operating agreement, declaration of
trust, partnership agreement or other applicable organizational document if such
amendment, supplement, restatement or other modification could reasonably be
expected to have a Material Adverse Effect.

SECTION 9.10. TRANSACTIONS WITH AFFILIATES.

      The Borrower shall not, and shall not permit any of its Subsidiaries or
any other Loan Party to, permit to exist or enter into, any transaction
(including the purchase, sale, lease or exchange of any property or the
rendering of any service) with any Affiliate (excluding other members of the
Consolidated Group), except transactions (i) pursuant to the reasonable
requirements of the business of the Borrower or any of its Subsidiaries and upon
fair and reasonable terms which are not less favorable in any material respect
to the Borrower or such Subsidiary than would be obtained in a comparable arm's
length transaction with a Person that is not an Affiliate or (ii) described on
Schedule 9.10.

SECTION 9.11. ERISA EXEMPTIONS.

      Except as set forth on Exhibit 6.1(m), the Borrower shall not, and shall
not permit any Subsidiary of the Borrower whose Equity Interests are owned
directly by the Borrower to, permit any of its respective assets to become or be
deemed to be "plan assets" within the meaning of ERISA, the Internal Revenue
Code and the respective regulations promulgated thereunder.

                               ARTICLE X. DEFAULT

SECTION 10.1. EVENTS OF DEFAULT.

      Each of the following shall constitute an Event of Default, whatever the
reason for such event and whether it shall be voluntary or involuntary or be
effected by operation of Applicable Law or pursuant to any judgment or order of
any Governmental Authority:

      (a) Default in Payment of Principal. The Borrower shall fail to pay when
due (whether upon demand, at maturity, by reason of acceleration or otherwise)
the principal of any of the Loans, or any Reimbursement Obligation.

      (b) Default in Payment of Interest and Other Obligations. The Borrower
shall fail to pay when due any interest on any of the Loans or any of the other
payment Obligations owing by the Borrower under this Agreement or any other Loan
Document, or any other Loan Party shall fail to pay when due any payment
Obligation owing by such other Loan Party under any Loan Document to which it is
a party, and such failure shall continue for a period of 5 Business Days.

      (c) Default in Performance. (i) The Borrower shall fail to perform or
observe any term, covenant, condition or agreement contained in clause (i) of
Section 8.6.(h) or in Article IX. or (ii) the Borrower or any other Loan Party
shall fail to perform or observe any term, covenant, condition or agreement
contained in this Agreement or any other Loan Document to which it is a party
and not otherwise mentioned in this Section and such failure shall continue for
a period of

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30 days after the earlier of (x) the date upon which a Responsible Officer of
the Borrower or such Loan Party obtains knowledge of such failure or (y) the
date upon which the Borrower has received written notice of such failure from
the Agent.

      (d) Misrepresentations. Any written statement, representation or warranty
made or deemed made by or on behalf of the Borrower or any other Loan Party
under this Agreement or under any other Loan Document, or any amendment hereto
or thereto, or in any other writing or statement at any time furnished or made
or deemed made by or on behalf of the Borrower or any other Loan Party to the
Agent or any Lender, shall at any time prove to have been incorrect or
misleading, in light of the circumstances in which made or deemed made, in any
material respect when furnished or made or deemed made.

      (e) Indebtedness Cross-Default.

            (i) The Borrower, any Subsidiary or any other Loan Party shall fail
      to pay when due, within any applicable cure period, the principal of, or
      interest on, (A) any Indebtedness (other than the Loans and Nonrecourse
      Indebtedness) having an aggregate outstanding principal amount of
      $10,000,000 or more ("Material Recourse Indebtedness") or (B) any
      Nonrecourse Indebtedness having an aggregate outstanding principal amount
      of $20,000,000 or more ("Material Nonrecourse Indebtedness"; together with
      the Material Recourse Indebtedness, the "Material Indebtedness") ; or

            (ii) (x) The maturity of any Material Indebtedness shall have been
      accelerated in accordance with the provisions of any indenture, contract
      or instrument evidencing, providing for the creation of or otherwise
      concerning such Material Indebtedness or (y) any Material Indebtedness
      shall have been required to be prepaid or repurchased prior to the stated
      maturity thereof; or

            (iii) any other event shall have occurred and be continuing which
      permits any holder or holders of Material Indebtedness, any trustee or
      agent acting on behalf of such holder or holders or any other Person, to
      accelerate the maturity of any such Material Indebtedness or require any
      such Material Indebtedness to be prepaid or repurchased prior to its
      stated maturity.

      (f) Voluntary Bankruptcy Proceeding. The Borrower, any other Loan Party or
any Material Subsidiary shall: (i) commence a voluntary case under the
Bankruptcy Code of 1978, as amended, or other federal bankruptcy laws (as now or
hereafter in effect); (ii) file a petition seeking to take advantage of any
other Applicable Laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts; (iii) 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 Applicable
Laws or consent to any proceeding or action described in the immediately
following subsection; (iv) 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; (v) admit in writing its inability to
pay its debts as they become due; (vi) make a general assignment for the benefit
of creditors; (vii) make a conveyance

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fraudulent as to creditors under any Applicable Law; or (viii) take any
corporate or partnership action for the purpose of effecting any of the
foregoing.

      (g) Involuntary Bankruptcy Proceeding. A case or other proceeding shall be
commenced against the Borrower, any other Loan Party or any Material Subsidiary
in any court of competent jurisdiction seeking: (i) relief under the Bankruptcy
Code of 1978, as amended, or other federal bankruptcy laws (as now or hereafter
in effect) or under any other Applicable Laws, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment
of debts; or (ii) the appointment of a trustee, receiver, custodian, liquidator
or the like of such Person, or of all or any substantial part of the assets,
domestic or foreign, of such Person, and such case or proceeding shall continue
undismissed or unstayed for a period of 60 consecutive calendar days, or an
order granting the remedy or other relief requested in such case or proceeding
against the Borrower, such Material Subsidiary or such other Loan Party
(including, but not limited to, an order for relief under such Bankruptcy Code
or such other federal bankruptcy laws) shall be entered.

      (h) Litigation; Enforceability. The Borrower or any other Loan Party shall
disavow, revoke or terminate (or attempt to terminate) any Loan Document to
which it is a party or shall otherwise challenge or contest in any action, suit
or proceeding in any court or before any Governmental Authority the validity or
enforceability of this Agreement, any Note or any other Loan Document or this
Agreement, any Note, the Guaranty or any other Loan Document shall cease to be
in full force and effect (except as a result of the express terms thereof).

      (i) Judgment. A judgment or order for the payment of money or for an
injunction shall be entered against the Borrower, any Subsidiary or any other
Loan Party, by any court or other tribunal and (i) such judgment or order shall
continue for a period of 30 days without being paid, stayed or dismissed through
appropriate appellate proceedings and (ii) (A) the amount of such judgment or
order exceeds, individually or together with all other such outstanding
judgments or orders (exclusive of amounts subject to insurance coverage or to
reimbursement or indemnity payments from a surety or other creditworthy party)
entered in such calendar year against the Borrower and such other Loan Parties,
$10,000,000, (B) the amount of such judgment or order exceeds, individually or
together with all other such outstanding judgments or orders (exclusive of
amounts subject to insurance coverage or to reimbursement or indemnity payments
from a surety or other creditworthy party) entered in such calendar year entered
against any Subsidiary of the Borrower that is not a Guarantor, $20,000,000, or
(C) in the case of an injunction or other non-monetary judgment, such judgment
will have a Material Adverse Effect.

      (j) Attachment. A warrant, writ of attachment, execution or similar
process shall be issued against any property of the Borrower, any Subsidiary or
any other Loan Party which exceeds, individually or together with all other such
warrants, writs, executions and processes, $10,000,000 in amount, in the case of
the Borrower or any other Loan Party, or $20,000,000 in amount, in the case of
any other Subsidiary of the Borrower that is not a Guarantor, and such warrant,
writ, execution or process shall not be discharged, vacated, stayed or bonded
for a period of 30 days; provided, however, that if a bond has been issued in
favor of the claimant or other Person obtaining such warrant, writ, execution or
process, the issuer of such bond shall execute a waiver or subordination
agreement in form and substance satisfactory to the Agent

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pursuant to which the issuer of such bond subordinates its right of
reimbursement, contribution or subrogation to the Obligations and waives or
subordinates any Lien it may have on the assets of any Loan Party.

      (k) ERISA. Any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $10,000,000 which it shall have
become liable to pay under Title IV of ERISA; or notice of intent to terminate a
Material Plan shall be filed under Title IV of ERISA by any member of the ERISA
Group, any plan administrator or any combination of the foregoing which could
cause one or more members of the ERISA Group to incur a current payment
obligation in excess of $10,000,000; or the PBGC shall institute proceedings
under Title IV of ERISA to terminate, to impose liability (other than for
premiums under Section 4007 of ERISA) in respect of, or to cause a trustee to be
appointed to administer, any Material Plan which could cause one or more members
of the ERISA Group to incur a current payment obligation in excess of
$10,000,000; or a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any Material Plan must be
terminated which could cause one or more members of the ERISA Group to incur a
current payment obligation in excess of $10,000,000; or there shall occur a
complete or partial withdrawal from, or a default, within the meaning of Section
4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans which
could cause one or more members of the ERISA Group to incur a current payment
obligation in excess of $10,000,000.

      (l) Loan Documents. An Event of Default (as defined therein) shall occur
under any of the other Loan Documents.

      (m) Change of Control. There shall occur a Change of Control.

SECTION 10.2. REMEDIES UPON EVENT OF DEFAULT.

      Upon the occurrence of an Event of Default the following provisions shall
apply:

      (a) Acceleration; Termination of Facilities.

            (i) Automatic. Upon the occurrence of an Event of Default specified
      in Sections 10.1.(f) or 10.1.(g), (A)(i) the principal of, and all accrued
      interest on, the Loans and the Notes at the time outstanding and (ii) all
      of the other Obligations of the Borrower, including, but not limited to,
      the other amounts owed to the Lenders, the Swingline Lender and the Agent
      under this Agreement, the Notes or any of the other Loan Documents shall
      become immediately and automatically due and payable by the Borrower
      without presentment, demand, protest, or other notice of any kind, all of
      which are expressly waived by the Borrower, (B) all of the Commitments,
      the obligation of the Lenders to make Revolving Loans, the Swingline
      Commitment, the obligation of the Swingline Lender to make Swingline
      Loans, and the obligation of the Agent to issue Letters of Credit
      hereunder, shall all immediately and automatically terminate and (C) the
      Borrower shall pay to the Agent an amount of money equal to the Stated
      Amount of all Letters of Credit then outstanding for deposit into the
      Collateral Account, which money shall thereafter be paid, applied,
      remitted and otherwise dealt with in accordance with Section 2.13 of this
      Agreement.

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            (ii) Optional. If any other Event of Default shall have occurred and
      be continuing, the Agent shall, at the direction of the Requisite Lenders:
      (A) declare (1) the principal of, and accrued interest on, the Loans and
      the Notes at the time outstanding and (2) all of the other Obligations,
      including, but not limited to, the other amounts owed to the Lenders and
      the Agent under this Agreement, the Notes or any of the other Loan
      Documents to be forthwith due and payable, whereupon the same shall
      immediately become due and payable without presentment, demand, protest or
      other notice of any kind, all of which are expressly waived by the
      Borrower, (B) terminate the Commitments and the obligation of the Lenders
      to make Loans hereunder and the obligation of the Agent to issue Letters
      of Credit hereunder and (C) make demand upon the Borrower for payment to
      the Agent of an amount of money equal to the Stated Amount of all Letters
      of Credit then outstanding for deposit into the Collateral Account,
      whereupon the Borrower shall immediately pay such money to the Agent, and
      which money shall thereafter be paid, applied, remitted and otherwise
      dealt with in accordance with Section 2.13 of this Agreement. Further, if
      the Agent has exercised any of the rights provided under the preceding
      sentence, the Swingline Lender shall: (x) declare the principal of, and
      accrued interest on, the Swingline Loans and the Swingline Note at the
      time outstanding, and all of the other Obligations owing to the Swingline
      Lender, to be forthwith due and payable, whereupon the same shall
      immediately become due and payable without presentment, demand, protest or
      other notice of any kind, all of which are expressly waived by the
      Borrower and (y) terminate the Swingline Commitment and the obligation of
      the Swingline Lender to make Swingline Loans.

      (b) Loan Documents. The Requisite Lenders may direct the Agent to, and the
Agent if so directed shall, exercise any and all of its rights under any and all
of the other Loan Documents.

      (c) Applicable Law. The Requisite Lenders may direct the Agent to, and the
Agent if so directed shall, exercise all other rights and remedies it may have
under any Applicable Law.

SECTION 10.3. REMEDIES UPON DEFAULT.

      Upon the occurrence of a Default specified in Sections 10.1.(f) or
10.1.(g), the Commitments shall immediately and automatically terminate.

SECTION 10.4. ALLOCATION OF PROCEEDS.

      If an Event of Default shall have occurred and be continuing and maturity
of any of the Obligations has been accelerated, all payments received by the
Agent under any of the Loan Documents, in respect of any principal of or
interest on the Obligations or any other amounts payable by the Borrower
hereunder or thereunder, shall be applied in the following order and priority:

            (a) amounts due to the Agent and the Lenders in respect of fees and
      expenses due under Section 12.2.;

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            (b) payments of interest on Swingline Loans;

            (c) payments of interest on all other Loans and Reimbursement
      Obligations, to be applied for the ratable benefit of the Lenders;

            (d) payments of principal of Swingline Loans;

            (e) payments of principal of all other Loans and Reimbursement
      Obligations, to be applied for the ratable benefit of the Lenders;

            (f) amounts to be deposited into the Collateral Account in respect
      of Letters of Credit;

            (g) amounts due the Agent and the Lenders pursuant to Sections 11.7.
      and 12.9.;

            (h) payments of all other amounts due and owing by the Borrower and
      the other Loan Parties under any of the Loan Documents, if any, to be
      applied for the ratable benefit of the Lenders; and

            (i) any amount remaining after application as provided above, shall
      be paid to the Borrower or whomever else may be legally entitled thereto.

SECTION 10.5. COLLATERAL ACCOUNT.

      (a) As collateral security for the prompt payment in full when due of all
Letter of Credit Liabilities and the other Obligations, the Borrower hereby
pledges and grants to the Agent, for the benefit of the Agent and the Lenders as
provided herein, a security interest in all of its right, title and interest in
and to the Collateral Account and the balances from time to time in the
Collateral Account (including the investments and reinvestments therein provided
for below). The balances from time to time in the Collateral Account shall not
constitute payment of any Letter of Credit Liabilities until applied by the
Agent as provided herein. Anything in this Agreement to the contrary
notwithstanding, funds held in the Collateral Account shall be subject to
withdrawal only as provided in this Section and in Section 2.13.

      (b) Amounts on deposit in the Collateral Account shall be invested and
reinvested by the Agent in such Cash Equivalents as the Agent shall determine in
its sole discretion. All such investments and reinvestments shall be held in the
name of and be under the sole dominion and control of the Agent. The Agent shall
exercise reasonable care in the custody and preservation of any funds held in
the Collateral Account and shall be deemed to have exercised such care if such
funds are accorded treatment substantially equivalent to that which the Agent
accords other funds deposited with the Agent, it being understood that the Agent
shall not have any responsibility for taking any necessary steps to preserve
rights against any parties with respect to any funds held in the Collateral
Account.

      (c) If an Event of Default shall have occurred and be continuing, the
Requisite Lenders may, in their discretion, at any time and from time to time,
instruct the Agent to

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liquidate any such investments and reinvestments and credit the proceeds thereof
to the Collateral Account and apply or cause to be applied such proceeds and any
other balances in the Collateral Account to the payment of any of the Letter of
Credit Liabilities due and payable.

      (d) If (i) no Default or Event of Default has occurred and is continuing
and (ii) all of the Letter of Credit Liabilities have been paid in full, the
Agent shall, from time to time, at the request of the Borrower, deliver to the
Borrower, against receipt but without any recourse, warranty or representation
whatsoever, such of the balances in the Collateral Account as exceed the
aggregate amount of Letter of Credit Liabilities at such time.

      (e) The Borrower shall pay to the Agent from time to time such fees as the
Agent normally charges for similar services in connection with the Agent's
administration of the Collateral Account and investments and reinvestments of
funds therein.

SECTION 10.6. PERFORMANCE BY AGENT.

      If the Borrower shall fail to perform any covenant, duty or agreement
contained in any of the Loan Documents, the Agent may perform or attempt to
perform such covenant, duty or agreement on behalf of the Borrower after the
expiration of any cure or grace periods set forth herein. In such event, the
Borrower shall, at the request of the Agent, promptly pay any amount reasonably
expended by the Agent in such performance or attempted performance to the Agent,
together with interest thereon at the applicable Post-Default Rate from the date
of such expenditure until paid. Notwithstanding the foregoing, neither the Agent
nor any Lender shall have any liability or responsibility whatsoever for the
performance of any obligation of the Borrower under this Agreement or any other
Loan Document.

SECTION 10.7. RIGHTS CUMULATIVE.

      The rights and remedies of the Agent and the Lenders under this Agreement
and each of the other Loan Documents shall be cumulative and not exclusive of
any rights or remedies which any of them may otherwise have under Applicable
Law. In exercising their respective rights and remedies the Agent and the
Lenders may be selective and no failure or delay by the Agent or any of the
Lenders in exercising any right shall operate as a waiver of it, nor shall any
single or partial exercise of any power or right preclude its other or further
exercise or the exercise of any other power or right.

                              ARTICLE XI. THE AGENT

SECTION 11.1. AUTHORIZATION AND ACTION.

      Each Lender hereby appoints and authorizes the Agent to take such action
as contractual representative on such Lender's behalf and to exercise such
powers under this Agreement and the other Loan Documents as are specifically
delegated to the Agent by the terms hereof and thereof, together with such
powers as are reasonably incidental thereto. Not in limitation of the foregoing,
each Lender authorizes and directs the Agent to enter into the Loan Documents
for the benefit of the Lenders. Each Lender hereby agrees that, except as
otherwise set forth herein, any action taken by the Requisite Lenders in
accordance with the provisions of this Agreement or the Loan Documents, and the
exercise by the Requisite Lenders of the powers set forth herein or

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therein, together with such other powers as are reasonably incidental thereto,
shall be authorized and binding upon all of the Lenders. Nothing herein shall be
construed to deem the Agent a trustee or fiduciary for any Lender nor to impose
on the Agent duties or obligations other than those expressly provided for
herein. At the request of a Lender, the Agent will forward to such Lender copies
or, where appropriate, originals of the documents delivered to the Agent
pursuant to this Agreement or the other Loan Documents. The Agent will also
furnish to any Lender, upon the request of such Lender, a copy of any
certificate or notice furnished to the Agent by the Borrower, any Loan Party or
any other Affiliate of the Borrower, pursuant to this Agreement or any other
Loan Document not already delivered to such Lender pursuant to the terms of this
Agreement or any such other Loan Document. As to any matters not expressly
provided for by the Loan Documents (including, without limitation, enforcement
or collection of any of the Obligations), the Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Requisite Lenders (or all of the
Lenders if explicitly required under any other provision of this Agreement), and
such instructions shall be binding upon all Lenders and all holders of any of
the Obligations; provided, however, that, notwithstanding anything in this
Agreement to the contrary, the Agent shall not be required to take any action
which exposes the Agent to personal liability or which is contrary to this
Agreement or any other Loan Document or Applicable Law. Not in limitation of the
foregoing, the Agent shall not exercise any right or remedy it or the Lenders
may have under any Loan Document upon the occurrence of a Default or an Event of
Default unless the Requisite Lenders have so directed the Agent to exercise such
right or remedy.

SECTION 11.2. AGENT'S RELIANCE, ETC.

      Notwithstanding any other provisions of this Agreement or any other Loan
Documents, neither the Agent nor any of its directors, officers, agents,
employees or counsel shall be liable for any action taken or omitted to be taken
by it or them under or in connection with this Agreement or any other Loan
Document, except for its or their own gross negligence or willful misconduct.
Without limiting the generality of the foregoing, the Agent: (a) may treat the
payee of any Note as the holder thereof until the Agent receives written notice
of the assignment or transfer thereof signed by such payee and in form
satisfactory to the Agent; (b) may consult with legal counsel (including its own
counsel or counsel for the Borrower or any other Loan Party), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (c) makes no warranty or
representation to any Lender or any other Person and shall not be responsible to
any Lender or any other Person for any statements, warranties or representations
made by any Person in or in connection with this Agreement or any other Loan
Document; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of any of
this Agreement or any other Loan Document or the satisfaction of any conditions
precedent under this Agreement or any Loan Document on the part of the Borrower
or other Persons or inspect the property, books or records of the Borrower or
any other Person; (e) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement or any other Loan Document, any other instrument or document
furnished pursuant thereto or any collateral covered thereby or the perfection
or priority of any Lien in favor of the Agent on behalf of the Lenders in any
such collateral; and (f) shall incur no liability under or in

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respect of this Agreement or any other Loan Document by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telephone
or telecopy) believed by it to be genuine and signed, sent or given by the
proper party or parties.

SECTION 11.3. NOTICE OF DEFAULTS.

      The Agent shall not be deemed to have knowledge or notice of the
occurrence of a Default or Event of Default unless the Agent has received notice
from a Lender or the Borrower referring to this Agreement, describing with
reasonable specificity such Default or Event of Default and stating that such
notice is a "notice of default." If any Lender (excluding the Lender which is
also serving as the Agent) becomes aware of any Default or Event of Default, it
shall promptly send to the Agent such a "notice of default." Further, if the
Agent receives such a "notice of default", the Agent shall give prompt notice
thereof to the Lenders.

SECTION 11.4. WACHOVIA AS LENDER.

      Wachovia, as a Lender, shall have the same rights and powers under this
Agreement and any other Loan Document as any other Lender and may exercise the
same as though it were not the Agent; and the term "Lender" or "Lenders" shall,
unless otherwise expressly indicated, include Wachovia in each case in its
individual capacity. Wachovia and its affiliates may each accept deposits from,
maintain deposits or credit balances for, invest in, lend money to, act as
trustee under indentures of, serve as financial advisor to, and generally engage
in any kind of business with, the Borrower, any other Loan Party or any other
affiliate thereof as if it were any other bank and without any duty to account
therefor to the other Lenders. Further, the Agent and any affiliate may accept
fees and other consideration from the Borrower for services in connection with
this Agreement and otherwise without having to account for the same to the other
Lenders. The Lenders acknowledge that, pursuant to such activities, Wachovia or
its affiliates may receive information regarding the Borrower, other Loan
Parties, other Subsidiaries and other Affiliates (including information that may
be subject to confidentiality obligations in favor of such Person) and
acknowledge that the Agent shall be under no obligation to provide such
information to them.

SECTION 11.5. APPROVALS OF LENDERS.

      All communications from the Agent to any Lender requesting such Lender's
determination, consent, approval or disapproval (a) shall be given in the form
of a written notice to such Lender, (b) shall be accompanied by a description of
the matter or issue as to which such determination, approval, consent or
disapproval is requested, or shall advise such Lender where information, if any,
regarding such matter or issue may be inspected, or shall otherwise describe the
matter or issue to be resolved, (c) shall include, if reasonably requested by
such Lender and to the extent not previously provided to such Lender, written
materials and a summary of all oral information provided to the Agent by the
Borrower in respect of the matter or issue to be resolved, and (d) shall include
the Agent's recommended course of action or determination in respect thereof.
Each Lender shall reply promptly, but in any event within 10 Business Days (or
such lesser or greater period as may be specifically required under the Loan
Documents) of receipt of such communication. Except as otherwise provided in
this Agreement and except with respect to items requiring the unanimous consent
or approval of the Lenders under Section 12.6.,

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unless a Lender shall give written notice to the Agent that it specifically
objects to the recommendation or determination of the Agent (together with a
written explanation of the reasons behind such objection) within the applicable
time period for reply, such Lender shall be deemed to have conclusively approved
of or consented to such recommendation or determination.

SECTION 11.6. LENDER CREDIT DECISION, ETC.

      Each Lender expressly acknowledges and agrees that neither the Agent nor
any of its officers, directors, employees, agents, counsel, attorneys-in-fact or
other affiliates has made any representations or warranties as to the financial
condition, operations, creditworthiness, solvency or other information
concerning the business or affairs of the Borrower, any other Loan Party, any
Subsidiary or any other Person to such Lender and that no act by the Agent
hereafter taken, including any review of the affairs of the Borrower, any other
Loan Party or any other Subsidiary, shall be deemed to constitute any such
representation or warranty by the Agent to any Lender. Each Lender acknowledges
that it has, independently and without reliance upon the Agent, any other Lender
or counsel to the Agent, or any of their respective officers, directors,
employees and agents, and based on the financial statements of the Borrower, the
Subsidiaries or any other Affiliate thereof, and inquiries of such Persons, its
independent due diligence of the business and affairs of the Borrower, the Loan
Parties, the Subsidiaries and other Persons, its review of the Loan Documents,
the legal opinions required to be delivered to it hereunder, the advice of its
own counsel and such other documents and information as it has deemed
appropriate, made its own credit and legal analysis and decision to enter into
this Agreement and the transactions contemplated hereby. Each Lender also
acknowledges that it will, independently and without reliance upon the Agent,
any other Lender or counsel to the Agent or any of their respective officers,
directors, employees and agents, and based on such review, advice, documents and
information as it shall deem appropriate at the time, continue to make its own
decisions in taking or not taking action under the Loan Documents. Except for
notices, reports and other documents and information expressly required to be
furnished to the Lenders by the Agent under this Agreement or any of the other
Loan Documents, the Agent shall have no duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, financial and other condition or creditworthiness of the Borrower, any
other Loan Party or any other Affiliate thereof which may come into possession
of the Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or other Affiliates. Each Lender acknowledges that the Agent's
legal counsel in connection with the transactions contemplated by this Agreement
is only acting as counsel to the Agent and is not acting as counsel to such
Lender.

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SECTION 11.7. INDEMNIFICATION OF AGENT.

      Each Lender agrees to indemnify the Agent (to the extent not reimbursed by
the Borrower and without limiting the obligation of the Borrower to do so) pro
rata in accordance with such Lender's respective Commitment Percentage, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may at any time be imposed on, incurred by, or asserted
against the Agent (in its capacity as Agent but not as a Lender) in any way
relating to or arising out of the Loan Documents, any transaction contemplated
hereby or thereby or any action taken or omitted by the Agent under the Loan
Documents (collectively, "Indemnifiable Amounts"); provided, however, that no
Lender shall be liable for any portion of such Indemnifiable Amounts to the
extent resulting from the Agent's gross negligence or willful misconduct as
determined by a court of competent jurisdiction in a final, non-appealable
judgment or if the Agent fails to follow the written direction of the Requisite
Lenders unless such failure is pursuant to the reasonable advice of counsel of
which the Lenders have received notice. Without limiting the generality of the
foregoing but subject to the preceding proviso, each Lender agrees to reimburse
the Agent (to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so) promptly upon demand for its ratable share
of any out-of-pocket expenses (including counsel fees of the counsel(s) of the
Agent's own choosing) incurred by the Agent in connection with the preparation,
negotiation, execution, or enforcement of, or legal advice with respect to the
rights or responsibilities of the parties under, the Loan Documents, any suit or
action brought by the Agent to enforce the terms of the Loan Documents and/or
collect any Obligations, any "lender liability" suit or claim brought against
the Agent and/or the Lenders, and any claim or suit brought against the Agent
and/or the Lenders arising under any Environmental Laws. Such out-of-pocket
expenses (including counsel fees) shall be advanced by the Lenders on the
request of the Agent notwithstanding any claim or assertion that the Agent is
not entitled to indemnification hereunder upon receipt of an undertaking by the
Agent that the Agent will reimburse the Lenders if it is actually and finally
determined by a court of competent jurisdiction that the Agent is not so
entitled to indemnification. The agreements in this Section shall survive the
payment of the Loans and all other amounts payable hereunder or under the other
Loan Documents and the termination of this Agreement. If the Borrower shall
reimburse the Agent for any Indemnifiable Amount following payment by any Lender
to the Agent in respect of such Indemnifiable Amount pursuant to this Section,
the Agent shall share such reimbursement on a ratable basis with each Lender
making any such payment.

SECTION 11.8. SUCCESSOR AGENT.

      The Agent may resign at any time as Agent under the Loan Documents by
giving written notice thereof to the Lenders and the Borrower. The Agent may be
removed as Agent under the Loan Documents for good cause by all of the Lenders
(other than the Lender then acting as the Agent) upon 30 days' prior notice.
Upon any such resignation or removal, the Requisite Lenders (other than the
Lender then acting as Agent, in the case of the removal of the Agent under the
immediately preceding sentence) shall have the right to appoint a successor
Agent which appointment shall, provided no Default or Event of Default shall
have occurred and be continuing, be subject to the Borrower's approval, which
approval shall not be unreasonably withheld or delayed (except that the Borrower
shall, in all events, be deemed to have approved

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each Lender and its affiliates as a successor Agent). If no successor Agent
shall have been so appointed in accordance with the immediately preceding
sentence, and shall have accepted such appointment, within 30 days after the
resigning Agent's giving of notice of resignation or the Lenders' removal of the
resigning Agent, then the resigning or removed Agent may, on behalf of the
Lenders, appoint a successor Agent, which shall be a Lender, if any Lender shall
be willing to serve, and otherwise shall be a commercial bank having total
combined assets of at least $10,000,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations under the Loan Documents. After any Agent's
resignation or removal hereunder as Agent, the provisions of this Article XI.
shall continue to inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under the Loan Documents.

SECTION 11.9. TITLED AGENTS.

      Each of the Titled Agents in each such respective capacity, assumes no
responsibility or obligation hereunder, including, without limitation, for
servicing, enforcement or collection of any of the Loans, nor any duties as an
agent hereunder for the Lenders. The titles of "Sole Lead Arranger", "Sole
Bookrunner", and "Syndication Agent" are solely honorific and imply no fiduciary
responsibility on the part of the Titled Agents to the Agent, the Borrower or
any Lender and the use of such titles does not impose on the Titled Agents any
duties or obligations greater than those of any other Lender or entitle the
Titled Agents to any rights other than those to which any other Lender is
entitled.

                           ARTICLE XII. MISCELLANEOUS

SECTION 12.1. NOTICES.

      Unless otherwise provided herein, communications provided for hereunder
shall be in writing and shall be mailed, telecopied or delivered as follows:

      If to the Borrower:

                  Post Apartment Homes, L.P.
                  One Riverside
                  4401 Northside Parkway
                  Suite 800
                  Atlanta, Georgia 30327-3057
                  Attn:  Chris Papa,
                         Chief Financial Officer
                  Telephone:  (404) 846-5028
                  Telecopy:  (404) 504-9388

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         If to the Agent:

                  Wachovia Bank, National Association
                  Wachovia Securities
                  191 Peachtree Street, N.E.
                  Atlanta, Georgia 30303-1757
                  Attention:  Cathy Casey
                  Telecopy Number: (404) 332-5649
                  Telephone Number: (404) 332-4066

         If to a Lender:

                  To such Lender's address or telecopy number, as applicable,
                  set forth on its signature page hereto or in the applicable
                  Assignment and Acceptance Agreement.

or, as to each party at such other address as shall be designated by such party
in a written notice to the other parties delivered in compliance with this
Section. All such notices and other communications shall be effective (i) if
mailed, when received; (ii) if telecopied, when transmitted; or (iii) if hand
delivered, when delivered. Notwithstanding the immediately preceding sentence,
all notices or communications to the Agent or any Lender under Article II. shall
be effective only when actually received. Neither the Agent nor any Lender shall
incur any liability to the Borrower (nor shall the Agent incur any liability to
the Lenders) for acting upon any telephonic notice referred to in this Agreement
which the Agent or such Lender, as the case may be, believes in good faith to
have been given by a Person authorized to deliver such notice or for otherwise
acting in good faith hereunder.

SECTION 12.2. EXPENSES.

      The Borrower agrees (a) to pay or reimburse the Agent for the "Covered
Costs" described in the mandate letters between the Agent and the Borrower,
dated March 21, 2003 and October 10, 2003, (b) to pay or reimburse the Agent and
the Lenders for all their costs and expenses incurred in connection with the
enforcement or preservation of any rights under the Loan Documents, including
the reasonable fees and disbursements of their respective counsel (including the
allocated fees and expenses of in-house counsel) and any payments in
indemnification or otherwise payable by the Lenders to the Agent pursuant to the
Loan Documents, (c) to pay, and indemnify and hold harmless the Agent and the
Lenders from, any and all recording and filing fees and any and all liabilities
with respect to, or resulting from any failure to pay or delay in paying,
documentary, stamp, excise and other similar taxes, if any, which may be payable
or determined to be payable in connection with the execution and delivery of any
of the Loan Documents, or consummation of any amendment, supplement or
modification of, or any waiver or consent under or in respect of, any Loan
Document and (d) to the extent not already covered by any of the preceding
subsections, to pay or reimburse the Agent and the Lenders for all their
reasonable out-of-pocket costs and expenses incurred in connection with any
bankruptcy or other proceeding of the type described in Sections 10.1.(f) or
10.1.(g), including the reasonable fees and disbursements of counsel to the
Agent and any Lender, whether such fees and expenses are incurred prior to,
during or after the commencement of such proceeding or the confirmation or
conclusion of any such proceeding. If the Borrower shall fail to pay any

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amounts required to be paid by it pursuant to this Section, the Agent and/or the
Lenders may pay such amounts on behalf of the Borrower and either deem the same
to be Loans outstanding hereunder or otherwise Obligations owing hereunder.

SECTION 12.3. SETOFF.

      Subject to Section 3.3. and in addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
the Agent, each Lender and each Participant is hereby authorized by the
Borrower, at any time or from time to time during the continuance of an Event of
Default, without prior notice to the Borrower or to any other Person, any such
notice being hereby expressly waived, but in the case of a Lender or Participant
subject to receipt of the prior written consent of the Agent exercised in its
sole discretion, to set off and to appropriate and to apply any and all deposits
(general or special, including, but not limited to, indebtedness evidenced by
certificates of deposit, whether matured or unmatured) and any other
indebtedness at any time held or owing by the Agent, such Lender or any
affiliate of the Agent or such Lender, to or for the credit or the account of
the Borrower against and on account of any of the Obligations, irrespective of
whether or not any or all of the Loans and all other Obligations have been
declared to be, or have otherwise become, due and payable as permitted by
Section 10.2., and although such obligations shall be contingent or unmatured.

SECTION 12.4. LITIGATION; JURISDICTION; OTHER MATTERS; WAIVERS.

      (a) EACH PARTY HERETO ACKNOWLEDGES THAT ANY DISPUTE OR CONTROVERSY BETWEEN
OR AMONG THE BORROWER, THE AGENT OR ANY OF THE LENDERS WOULD BE BASED ON
DIFFICULT AND COMPLEX ISSUES OF LAW AND FACT AND WOULD RESULT IN DELAY AND
EXPENSE TO THE PARTIES. ACCORDINGLY, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
EACH OF THE LENDERS, THE AGENT AND THE BORROWER HEREBY WAIVES ITS RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT OR
TRIBUNAL IN WHICH AN ACTION MAY BE COMMENCED BY OR AGAINST ANY PARTY HERETO
ARISING OUT OF THIS AGREEMENT, THE NOTES, OR ANY OTHER LOAN DOCUMENT OR BY
REASON OF ANY OTHER SUIT, CAUSE OF ACTION OR DISPUTE WHATSOEVER BETWEEN OR AMONG
THE BORROWER, THE AGENT OR ANY OF THE LENDERS OF ANY KIND OR NATURE.

      (b) EACH OF THE BORROWER, THE AGENT AND EACH LENDER HEREBY AGREES THAT THE
FEDERAL DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK OR, AT THE OPTION OF
THE AGENT, ANY STATE COURT LOCATED IN NEW YORK, NEW YORK, SHALL HAVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN OR AMONG THE
BORROWER, THE AGENT OR ANY OF THE LENDERS, PERTAINING DIRECTLY OR INDIRECTLY TO
THIS AGREEMENT, THE LOANS AND LETTERS OF CREDIT, THE NOTES OR ANY OTHER LOAN
DOCUMENT OR TO ANY MATTER ARISING HEREFROM OR THEREFROM. THE BORROWER AND EACH
OF THE LENDERS EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN
ANY ACTION OR PROCEEDING COMMENCED IN SUCH COURTS. EACH PARTY FURTHER WAIVES ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF

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ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR
PROCEEDING WAS BROUGHT IN AN INCONVENIENT FORUM AND EACH AGREES NOT TO PLEAD OR
CLAIM THE SAME. THE CHOICE OF FORUM SET FORTH IN THIS SECTION SHALL NOT BE
DEEMED TO PRECLUDE THE BRINGING OF ANY ACTION BY THE AGENT OR ANY LENDER OR THE
ENFORCEMENT BY THE AGENT OR ANY LENDER OF ANY JUDGMENT OBTAINED IN SUCH FORUM IN
ANY OTHER APPROPRIATE JURISDICTION.

      (c) THE PROVISIONS OF THIS SECTION HAVE BEEN CONSIDERED BY EACH PARTY WITH
THE ADVICE OF COUNSEL AND WITH A FULL UNDERSTANDING OF THE LEGAL CONSEQUENCES
THEREOF, AND SHALL SURVIVE THE PAYMENT OF THE LOANS AND ALL OTHER AMOUNTS
PAYABLE HEREUNDER OR UNDER THE OTHER LOAN DOCUMENTS, THE TERMINATION OR
EXPIRATION OF ALL LETTERS OF CREDIT AND THE TERMINATION OF THIS AGREEMENT.

SECTION 12.5. SUCCESSORS AND ASSIGNS.

      (a) The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns, except that the Borrower may not assign or otherwise transfer any of
its rights or obligations under this Agreement without the prior written consent
of all Lenders and any such assignment or other transfer to which all of the
Lenders have not so consented shall be null and void.

      (b) Any Lender may make, carry or transfer Loans at, to or for the account
of any of its branch offices or the office of an affiliate of such Lender except
to the extent such transfer would result in increased costs to the Borrower.

      (c) Any Lender may at any time grant to one or more banks or other
financial institutions (each a "Participant") participating interests in its
Commitment or the Obligations owing to such Lender; provided, however, (i) any
such participating interest must be for a constant and not a varying percentage
interest, (ii) no Lender may grant a participating interest in its Commitment,
or if the Commitments have been terminated, the aggregate outstanding principal
balance of Notes held by it, in an amount less than $10,000,000 and (iii) after
giving effect to any such participation by a Lender, the amount of its
Commitment, or if the Commitments have been terminated, the aggregate
outstanding principal balance of Notes held by it, in which it has not granted
any participating interests must be equal to $10,000,000 and integral multiples
of $1,000,000 in excess thereof. Except as otherwise provided in Section 12.3.,
no Participant shall have any rights or benefits under this Agreement or any
other Loan Document. In the event of any such grant by a Lender of a
participating interest to a Participant, such Lender shall remain responsible
for the performance of its obligations hereunder, and the Borrower and the Agent
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement. Any agreement
pursuant to which any Lender may grant such a participating interest shall
provide that such Lender shall retain the sole right and responsibility to
enforce the obligations of the Borrower hereunder including, without limitation,
the right to approve any amendment, modification or waiver of any provision of
this Agreement; provided, however, such Lender may

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agree with the Participant that it will not, without the consent of the
Participant, agree to (i) increase, or extend the term or extend the time or
waive any requirement for the reduction or termination of, such Lender's
Commitment, (ii) extend the date fixed for the payment of principal of or
interest on the Loans or portions thereof owing to such Lender, (iii) reduce the
amount of any such payment of principal, (iv) reduce the rate at which interest
is payable thereon or (v) release any Guarantor (except as otherwise permitted
under Section 7.12.(c)). An assignment or other transfer which is not permitted
by subsection (d) or (e) below shall be given effect for purposes of this
Agreement only to the extent of a participating interest granted in accordance
with this subsection (c). The selling Lender shall notify the Agent and the
Borrower of the sale of any participation hereunder and, if requested by the
Agent, certify to the Agent that such participation is permitted hereunder.

      (d) Any Lender may with the prior written consent of the Agent and, so
long as no Default or Event of Default shall have occurred and be continuing,
the Borrower (which consent, in each case, shall not be unreasonably withheld),
assign to one or more Eligible Assignees (each an "Assignee") all or a portion
of its Commitment and its other rights and obligations under this Agreement and
the Notes; provided, however, (i) no such consent by the Borrower shall be
required in the case of any assignment to another Lender or any affiliate of
such Lender or another Lender and no such consent by the Agent shall be required
in the case of any assignment by a Lender to any affiliate of such Lender; (ii)
any partial assignment shall be in an amount at least equal to $10,000,000 and
integral multiples of $1,000,000 in excess thereof and after giving effect to
such assignment the assigning Lender retains a Commitment, or if the Commitments
have been terminated, holds Notes having an aggregate outstanding principal
balance, of at least $10,000,000 and integral multiples of $1,000,000 in excess
thereof; (iii) each such assignment shall be effected by means of an Assignment
and Acceptance Agreement; and (iv) after giving effect to any such assignment by
the Lender then acting as Agent, such Lender shall retain a Commitment greater
than or equal to the lesser of (x) the Commitment of such Lender as of the
Agreement Date (or the date such Lender first became a party to this Agreement)
or (y) the Commitment of the Lender holding the second largest Commitment as of
the Agreement Date, provided, the Lender then acting as Agent shall not be
subject to the restriction contained in the foregoing clause (y) if an Event of
Default exists and is continuing and, provided, further, the Lender then acting
as Agent shall not be required to increase its Commitment if the Lender holding
the second largest Commitment as of the Agreement Date increases its Commitment
as a result of the Borrower's election to increase the aggregate commitments in
accordance with Section 2.15 of this Agreement or as a result of a merger or
other combination with another Lender. Upon execution and delivery of such
instrument and payment by such Assignee to such transferor Lender of an amount
equal to the purchase price agreed between such transferor Lender and such
Assignee, such Assignee shall be deemed to be a Lender party to this Agreement
as of the effective date of the Assignment and Acceptance Agreement and shall
have all the rights and obligations of a Lender with a Commitment as set forth
in such Assignment and Acceptance Agreement, and the transferor Lender shall be
released from its obligations hereunder to a corresponding extent, and no
further consent or action by any party shall be required. Upon the consummation
of any assignment pursuant to this subsection (d), the transferor Lender, the
Agent and the Borrower shall make appropriate arrangements so that new Notes are
issued to the Assignee and such transferor Lender, as appropriate. In connection
with

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any such assignment, the transferor Lender shall pay to the Agent an
administrative fee for processing such assignment in the amount of $4,500.

      (e) Any Lender (each, a "Designating Lender") may at any time while the
Borrower has been assigned an Investment Grade Rating from either S&P or Moody's
designate one Designated Lender to fund Bid Rate Loans on behalf of such
Designating Lender subject to the terms of this subsection (e) and the
provisions in the immediately preceding subsections (c) and (d) shall not apply
to such designation. No Lender may designate more than one Designated Lender.
The parties to each such designation shall execute and deliver to the Agent for
its acceptance a Designation Agreement. Upon such receipt of an appropriately
completed Designation Agreement executed by a Designating Lender and a designee
representing that it is a Designated Lender, the Agent will accept such
Designation Agreement and give prompt notice thereof to the Borrower, whereupon
(i) the Borrower shall execute and deliver to the Designating Lender a
Designated Lender Note payable to the order of the Designated Lender, (ii) from
and after the effective date specified in the Designation Agreement, the
Designated Lender shall become a party to this Agreement with a right to make
Bid Rate Loans on behalf of its Designating Lender pursuant to Section 2.2.
after the Borrower has accepted a Bid Rate Quote (or portion thereof) of the
Designating Lender, and (iii) the Designated Lender shall not be required to
make payments with respect to any obligations in this Agreement except to the
extent of excess cash flow of such Designated Lender which is not otherwise
required to repay obligations of such Designated Lender which are then due and
payable; provided, however, that regardless of such designation and assumption
by the Designated Lender, the Designating Lender shall be and remain obligated
to the Borrower, the Agent and the Lenders for each and every of the obligations
of the Designating Lender and its related Designated Lender with respect to this
Agreement, including, without limitation, any indemnification obligations under
Section 11.7. and any sums otherwise payable to the Borrower by the Designated
Lender. Each Designating Lender shall serve as the administrative agent of the
Designated Lender and shall on behalf of, and to the exclusion of, the
Designated Lender: (i) receive any and all payments made for the benefit of the
Designated Lender and (ii) give and receive all communications and notices and
take all actions hereunder, including, without limitation, votes, approvals,
waivers, consents and amendments under or relating to this Agreement and the
other Loan Documents. Any such notice, communication, vote, approval, waiver,
consent or amendment shall be signed by the Designating Lender as administrative
agent for the Designated Lender and shall not be signed by the Designated Lender
on its own behalf and shall be binding on the Designated Lender to the same
extent as if signed by the Designated Lender on its own behalf. The Borrower,
the Agent and the Lenders may rely thereon without any requirement that the
Designated Lender sign or acknowledge the same. No Designated Lender may assign
or transfer all or any portion of its interest hereunder or under any other Loan
Document, other than assignments to the Designating Lender which originally
designated such Designated Lender. The Borrower, the Lenders and the Agent each
hereby agrees that it will not institute against any Designated Lender or join
any other Person in instituting against any Designated Lender any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding under any
federal or state bankruptcy or similar law, until the later to occur of (x) one
year and one day after the payment in full of the latest maturing commercial
paper note issued by such Designated Lender and (y) the Termination Date.

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      (f) The Agent shall maintain at the Principal Office a copy of each
Assignment and Acceptance Agreement delivered to and accepted by it and a
register for the recordation of the names and addresses of the Lenders and the
Commitment of each Lender from time to time (the "Register"). The Agent shall
give each Lender and the Borrower notice of the assignment by any Lender of its
rights as contemplated by this Section. The Borrower, the Agent and the Lenders
may treat each Person whose name is recorded in the Register as a Lender
hereunder for all purposes of this Agreement. The Register and copies of each
Assignment and Acceptance Agreement shall be available for inspection by the
Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice to the Agent. Upon its receipt of an Assignment and
Acceptance Agreement executed by an assigning Lender, together with each Note
subject to such assignment, the Agent shall, if such Assignment and Acceptance
Agreement has been completed and if the Agent receives the processing and
recording fee described in subsection (d) above, (i) accept such Assignment and
Acceptance Agreement, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Borrower.

      (g) In addition to the assignments and participations permitted under the
foregoing provisions of this Section, any Lender may assign and pledge all or
any portion of its Loans and its Notes to any Federal Reserve Bank as collateral
security pursuant to Regulation A and any Operating Circular issued by such
Federal Reserve Bank, and such Loans and Notes shall be fully transferable as
provided therein. No such assignment shall release the assigning Lender from its
obligations hereunder.

      (h) A Lender may furnish any information concerning the Borrower, any
other Loan Party or any of their respective Subsidiaries in the possession of
such Lender from time to time to Assignees and Participants (including
prospective Assignees and Participants) subject to compliance with Section 12.8.

      (i) Anything in this Section to the contrary notwithstanding, no Lender
may assign or participate any interest in any Loan held by it hereunder to the
Borrower, any other Loan Party or any of their respective Affiliates or
Subsidiaries.

      (j) Each Lender agrees that, without the prior written consent of the
Borrower and the Agent, it will not make any assignment hereunder in any manner
or under any circumstances that would require registration or qualification of,
or filings in respect of, any Loan or Note under the Securities Act or any other
securities laws of the United States of America or of any other jurisdiction.

SECTION 12.6. AMENDMENTS.

      Except as otherwise expressly provided in this Agreement, any consent or
approval required or permitted by this Agreement or any other Loan Document to
be given by the Lenders may be given, and any term of this Agreement or of any
other Loan Document may be amended, and the performance or observance by the
Borrower or any other Loan Party or any Subsidiary of any terms of this
Agreement or such other Loan Document or the continuance of any Default or Event
of Default may be waived (either generally or in a particular instance and
either retroactively or prospectively) with, but only with, the written consent
of the Requisite Lenders

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<PAGE>
(and, in the case of an amendment to any Loan Document, the written consent of
the Borrower). Notwithstanding the foregoing, no amendment, waiver or consent
shall, unless in writing, and signed by all of the Lenders (or the Agent at the
written direction of the Lenders), do any of the following: (i) increase the
Commitments of the Lenders (except as contemplated by Section 2.15.) or subject
the Lenders to any additional obligations; (ii) reduce the principal of, or
interest rates that have accrued or that will be charged on the outstanding
principal amount of, any Loans or Fees or other Obligations; (iii) reduce the
amount of any Fees payable hereunder; (iv) postpone any date fixed for any
payment of any principal of, or interest on, any Loans or any other Obligations,
or extend the expiration date of any Letter of Credit beyond the Termination
Date; (v) change the Commitment Percentages (except as a result of any increase
in the aggregate amount of the Commitments contemplated by Section 2.15.,
3.11.(b) or 4.5.) or amend or otherwise modify the provisions of Section 3.2.;
(vi) modify the definition of the term "Requisite Lenders" or modify in any
other manner the number or percentage of the Lenders required to make any
determinations or waive any rights hereunder or to modify any provision hereof,
including without limitation, any modification of this Section if such
modification would have such effect; (vii) release any Guarantor from its
obligations under the Guaranty (except as otherwise permitted under Section
7.12.(c)); or (viii) amend or otherwise modify the provisions of Section
2.14.(a). Further, no amendment, waiver or consent unless in writing and signed
by the Agent, in addition to the Lenders required hereinabove to take such
action, shall affect the rights or duties of the Agent under this Agreement or
any of the other Loan Documents. Any amendment, waiver or consent relating to
Section 2.3. or the obligations of the Swingline Lender under this Agreement or
any other Loan Document shall, in addition to the Lenders required hereinabove
to take such action, require the written consent of the Swingline Lender. No
waiver shall extend to or affect any obligation not expressly waived or impair
any right consequent thereon and any amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose set forth
therein. No course of dealing or delay or omission on the part of the Agent or
any Lender in exercising any right shall operate as a waiver thereof or
otherwise be prejudicial thereto. Except as otherwise explicitly provided for
herein or in any other Loan Document, no notice to or demand upon the Borrower
shall entitle the Borrower to any other or further notice or demand in similar
or other circumstances.

SECTION 12.7. NONLIABILITY OF AGENT AND LENDERS.

      The relationship between the Borrower and the Lenders and the Agent shall
be solely that of borrower and lender. Neither the Agent nor any Lender shall
have any fiduciary responsibilities to the Borrower and no provision in this
Agreement or in any of the other Loan Documents, and no course of dealing
between or among any of the parties hereto, shall be deemed to create any
fiduciary duty owing by the Agent or any Lender to any Lender, the Borrower, any
Subsidiary or any other Loan Party. Neither the Agent nor any Lender undertakes
any responsibility to the Borrower to review or inform the Borrower of any
matter in connection with any phase of the Borrower's business or operations.

SECTION 12.8. CONFIDENTIALITY.

      Except as otherwise provided by Applicable Law, the Agent and each Lender
shall utilize all non-public information obtained pursuant to the requirements
of this Agreement which has been identified as confidential or proprietary by
the Borrower in accordance with its customary

                                       95
<PAGE>
procedure for handling confidential information of this nature and in accordance
with safe and sound banking practices but in any event may make disclosure: (a)
to any of their respective affiliates (provided they shall agree to keep such
information confidential in accordance with the terms of this Section); (b) as
reasonably requested by any bona fide Assignee, Participant or other transferee
in connection with the contemplated transfer of any Commitment or participations
therein as permitted hereunder (provided they shall agree to keep such
information confidential in accordance with the terms of this Section); (c) as
required or requested by any Governmental Authority or representative thereof or
pursuant to legal process or in connection with any legal proceedings; (d) to
the Agent's or such Lender's independent auditors and other professional
advisors (provided they shall be notified of the confidential nature of the
information); (e) after the happening and during the continuance of an Event of
Default, to any other Person, in connection with the exercise by the Agent or
the Lenders of rights hereunder or under any of the other Loan Documents; and
(f) to the extent such information (x) becomes publicly available other than as
a result of a breach of this Section or (y) becomes available to the Agent or
any Lender on a nonconfidential basis from a source other than the Borrower or
any Affiliate, provided this clause (y) shall not apply to the extent the Agent
or any Lender had reason to believe in the exercise of its good faith judgment
that the source of such confidential information breached a confidentiality
agreement or duty in disclosing such information to the Agent or any Lender.
Notwithstanding anything herein to the contrary, any Lender may disclose to any
and all persons, without limitation of any kind, such Lender's U.S. federal
income tax treatment and the U.S. federal tax structure of the transactions
contemplated hereby relating to such Lender and all materials of any kind
(including opinions or other tax analyses) that are provided to it relating to
such tax treatment and tax structure; provided, however, that (i) no disclosure
of any information relating to such tax treatment or tax structure may be made
to the extent nondisclosure is reasonably necessary in order to comply with
applicable securities laws, and (ii) the foregoing is not intended to waive the
attorney-client privilege or any other privileges, including the tax advisor
privilege under Section 7525 of the Internal Revenue Code of 1986, as amended
from time to time.

SECTION 12.9. INDEMNIFICATION.

      (a) The Borrower shall and hereby agrees to indemnify, defend and hold
harmless the Agent, any affiliate of the Agent and each of the Lenders and their
respective directors, officers, shareholders, agents, employees and counsel
(each referred to herein as an "Indemnified Party") from and against any and all
losses, costs, claims, damages, liabilities, deficiencies, judgments and
reasonable out-of-pocket costs and expenses of every kind and nature (including,
without limitation, amounts paid in settlement, court costs and the reasonable
fees and disbursements of counsel incurred in connection with any litigation,
investigation, claim or proceeding or any advice rendered in connection
therewith, but excluding losses, costs, claims, damages, liabilities,
deficiencies, judgments or expenses indemnification in respect of which is
specifically covered by Section 3.12. or 4.1. or expressly excluded from the
coverage of such Sections) incurred by an Indemnified Party in connection with,
arising out of, or by reason of, any suit, cause of action, claim, arbitration,
investigation or settlement, consent decree or other proceeding (the foregoing
referred to herein as an "Indemnity Proceeding") which is in any way related
directly or indirectly to: (i) this Agreement or any other Loan Document or the
transactions contemplated thereby; (ii) the making of any Loans or issuance of
Letters of Credit hereunder; (iii) any actual or proposed use by the Borrower of
the proceeds of the Loans or Letters of Credit; (iv) the

                                       96
<PAGE>
Agent's or any Lender's entering into this Agreement; (v) the fact that the
Agent and the Lenders have established the credit facility evidenced hereby in
favor of the Borrower; (vi) the fact that the Agent and the Lenders are
creditors of the Borrower and have or are alleged to have information regarding
the financial condition, strategic plans or business operations of the Borrower
and the Subsidiaries; (vii) the fact that the Agent and the Lenders are material
creditors of the Borrower and are alleged to influence directly or indirectly
the business decisions or affairs of the Borrower and the Subsidiaries or their
financial condition; (viii) the exercise of any right or remedy the Agent or the
Lenders may have under this Agreement or the other Loan Documents; provided,
however, that the Borrower shall not be obligated to indemnify any Indemnified
Party for any acts or omissions of such Indemnified Party in connection with
matters described in this clause (viii) that constitute gross negligence or
willful misconduct; or (ix) any violation or non-compliance by the Borrower or
any Subsidiary of any Applicable Law (including any Environmental Law)
including, but not limited to, any Indemnity Proceeding commenced by (A) the
Internal Revenue Service or state taxing authority or (B) any Governmental
Authority or other Person under any Environmental Law, including any Indemnity
Proceeding commenced by a Governmental Authority or other Person seeking
remedial or other action to cause the Borrower or its Subsidiaries (or its
respective properties) (or the Agent and/or the Lenders as successors to the
Borrower) to be in compliance with such Environmental Laws.

      (b) The Borrower's indemnification obligations under this Section shall
apply to all Indemnity Proceedings arising out of, or related to, the foregoing
whether or not an Indemnified Party is a named party in such Indemnity
Proceeding. In this connection, this indemnification shall cover all reasonable
out-of-pocket costs and expenses of any Indemnified Party in connection with any
deposition of any Indemnified Party or compliance with any subpoena (including
any subpoena requesting the production of documents). This indemnification
shall, among other things, apply to any Indemnity Proceeding commenced by other
creditors of the Borrower or any Subsidiary, any shareholder of the Borrower or
any Subsidiary (whether such shareholder(s) are prosecuting such Indemnity
Proceeding in their individual capacity or derivatively on behalf of the
Borrower), any account debtor of the Borrower or any Subsidiary or by any
Governmental Authority.

      (c) This indemnification shall apply to any Indemnity Proceeding arising
during the pendency of any bankruptcy proceeding filed by or against the
Borrower and/or any Subsidiary.

      (d) Promptly after receipt by an Indemnified Party of written notice of
any loss, claim, damage or liability in respect of which indemnity may be sought
by it hereunder, such Indemnified Party will notify the Borrower thereof,
provided that the failure to give any such notice hereunder shall not affect the
obligation of the Borrower under this Agreement or any of the other Loan
Documents. Thereafter, such Indemnified Party and the Borrower shall consult, to
the extent appropriate, with a view to minimizing the cost to the Borrower of
its obligations hereunder. In case any such Indemnified Party receives written
notice of any loss, claim, damage or liability in respect of which indemnity may
be sought by it hereunder, and it notifies the Borrower thereof, the Borrower
will be entitled to participate in the defense thereof, and to the extent that
the Borrower may elect by notice delivered to such Indemnified Party promptly
after receiving aforesaid notice from such Indemnified Party, to assume the
defense thereof, with counsel reasonably satisfactory at all times to the
Indemnified Party; provided that if the parties

                                       97
<PAGE>
against whom any loss, claim, damage or liability arises include both the
Indemnified Party and the Borrower, and such Indemnified Party shall have
reasonably concluded that there may be legal defenses available to it or other
Indemnified Parties which are different from or additional to those available to
the Borrower and may conflict therewith, such Indemnified Party or Parties shall
have the right to select separate counsel to assume such legal defense and
otherwise to participate in the defense of such loss, claims, damage or
liability on behalf of such Indemnified Party or Parties. Upon receipt of notice
from the Borrower to such Indemnified Party of the Borrower's election so to
assume the defense of such loss, claim, damage or liability and approval of
counsel by such Indemnified Party, the Borrower shall not be liable to such
Indemnified Party for any legal expenses subsequently incurred by such
Indemnified Party in connection with the defense thereof, unless (i) such
Indemnified Party shall have employed counsel in connection with the assumption
of legal defenses in accordance with the proviso to the immediately preceding
sentence, (ii) the Borrower shall not have employed and continue to employ
counsel reasonably satisfactory to such Indemnified Party to represent such
Indemnified Party, or (iii) the Borrower shall have approved the employment of
counsel for such Indemnified Party at the Borrower's expense. The Borrower shall
not be liable for any settlement of any Indemnity Proceeding effected without
its written consent, which consent shall not be unreasonably withheld. The
Borrower will not settle any claim, action or proceeding in respect of which
indemnity may be sought against the Borrower under this Agreement or any other
Loan Document, whether or not any Indemnified Party is an actual or potential
party to such claim, action or proceeding, without the Agent's written consent,
which shall not be unreasonably withheld, unless such settlement does not
require any performance by any Indemnified Party and includes an unconditional
release of each Indemnified Party that is an actual or potential party from all
liability arising out of such claim, action or proceeding.

      (e) If and to the extent that the obligations of the Borrower hereunder
are unenforceable for any reason, the Borrower hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which is
permissible under Applicable Law.

      (f) The Borrower's obligations hereunder shall survive any termination of
this Agreement and the other Loan Documents and the payment in full in cash of
the Obligations, and are in addition to, and not in substitution of, any other
of their obligations set forth in this Agreement or any other Loan Document to
which it is a party.

SECTION 12.10. TERMINATION; SURVIVAL.

      At such time as (a) all of the Commitments have been terminated, (b) all
Letters of Credit have terminated, (c) none of the Lenders nor the Swingline
Lender is obligated any longer under this Agreement to make any Loans and (d)
all Obligations (other than obligations which survive as provided in the
following sentence) have been paid and satisfied in full, this Agreement shall
terminate. The indemnities to which the Agent, the Lenders and the Swingline
Lender are entitled under the provisions of Sections 3.12., 4.1., 4.4., 11.7.,
12.2. and 12.9. and any other provision of this Agreement and the other Loan
Documents, and the provisions of Section 12.4., shall continue in full force and
effect and shall protect the Agent, the Lenders and the Swingline Lender (i)
notwithstanding any termination of this Agreement, or of the other Loan
Documents, against events arising after such termination as well as before and
(ii) at all times after any such

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<PAGE>
party ceases to be a party to this Agreement with respect to all matters and
events existing on or prior to the date such party ceased to be a party to this
Agreement.

SECTION 12.11. SEVERABILITY OF PROVISIONS.

      Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective only to the
extent of such prohibition or unenforceability without invalidating the
remainder of such provision or the remaining provisions or affecting the
validity or enforceability of such provision in any other jurisdiction.

SECTION 12.12. GOVERNING LAW.

      THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF GEORGIA APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY
PERFORMED, IN SUCH STATE.

SECTION 12.13. COUNTERPARTS.

      This Agreement and any amendments, waivers, consents or supplements may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all of which counterparts together shall constitute but
one and the same instrument.

SECTION 12.14. OBLIGATIONS WITH RESPECT TO LOAN PARTIES.

      The obligations of the Borrower to direct or prohibit the taking of
certain actions by the other Loan Parties as specified herein shall be absolute
and not subject to any defense the Borrower may have that the Borrower does not
control such Loan Parties.

SECTION 12.15. LIMITATION OF LIABILITY.

      Neither the Agent nor any Lender, nor any affiliate, officer, director,
employee, attorney, or agent of the Agent or any Lender shall have any liability
with respect to, and the Borrower hereby waives, releases, and agrees not to sue
any of them upon, any claim for any special, indirect, incidental, or
consequential damages suffered or incurred by the Borrower in connection with,
arising out of, or in any way related to, this Agreement or any of the other
Loan Documents, or any of the transactions contemplated by this Agreement or any
of the other Loan Documents. The Borrower hereby waives, releases, and agrees
not to sue the Agent or any Lender or any of the Agent's or any Lender's
affiliates, officers, directors, employees, attorneys, or agents for punitive
damages in respect of any claim in connection with, arising out of, or in any
way related to, this Agreement or any of the other Loan Documents, or any of the
transactions contemplated by this Agreement or financed hereby.

                                       99
<PAGE>
SECTION 12.16. ENTIRE AGREEMENT.

      This Agreement, the Notes, and the other Loan Documents referred to herein
embody the final, entire agreement among the parties hereto and supersede any
and all prior commitments, agreements, representations, and understandings,
whether written or oral, relating to the subject matter hereof and thereof and
may not be contradicted or varied by evidence of prior, contemporaneous, or
subsequent oral agreements or discussions of the parties hereto. There are no
oral agreements among the parties hereto.

SECTION 12.17. CONSTRUCTION.

      The Agent, the Borrower and each Lender acknowledge that each of them has
had the benefit of legal counsel of its own choice and has been afforded an
opportunity to review this Agreement and the other Loan Documents with its legal
counsel and that this Agreement and the other Loan Documents shall be construed
as if jointly drafted by the Agent, the Borrower and each Lender.

                                      100
<PAGE>
         IN WITNESS WHEREOF, the parties hereto have caused this Credit
Agreement to be executed by their authorized officers all as of the day and year
first above written.

                           POST APARTMENT HOMES, L.P.

                           By:  Post GP Holdings, Inc., its sole general partner

                           By: /s/ Christopher J. Papa
                               ----------------------------------
                               Name: Christopher J. Papa
                               Title: Chief Financial Officer

                       [Signatures Continued on Next Page]

                                      101
<PAGE>
                 [SIGNATURE PAGE TO CREDIT AGREEMENT DATED AS OF
               JANUARY 16, 2004 WITH POST APARTMENT HOMES, L.P.]

                                    Wachovia Bank, National Association, as
                                      Agent, as a Lender and as Swingline Lender

                                    By: /s/ Cathy A. Casey
                                        -----------------------------------
                                        Name: Cathy A. Casey
                                        Title: Director

                                    Commitment Amount:

                                    $75,000,000

                                    LENDING OFFICE (ALL TYPES OF LOANS):

                                    Wachovia Bank, National Association
                                    REIT Banking Group
                                    191 Peachtree Street, N.E.
                                    Atlanta, Georgia 30303-1757
                                    Attention:  Cathy Casey
                                    Telecopy Number: (404) 332-5649
                                    Telephone Number: (404) 332-4066

                       [Signatures Continued on Next Page]

                                      102
<PAGE>
                 [SIGNATURE PAGE TO CREDIT AGREEMENT DATED AS OF
               JANUARY 16, 2004 WITH POST APARTMENT HOMES, L.P.]

                             BANK ONE, NA, as Syndication Agent and as a Lender

                             By: /s/ Marc Kramer
                                 ----------------------------------
                                 Name: Marc Kramer
                                 Title: Director

                             Commitment Amount:

                             $55,000,000

                             LENDING OFFICE (ALL TYPES OF LOANS):

                             Bank One, NA
                             1 Bank One Plaza
                             Suite ILI-0315
                             Chicago, Illinois 60670
                             Attention:  Marc Kramer
                             Telecopy Number: (312) 325-3122
                             Telephone Number: (312) 325-3121

                       [Signatures Continued on Next Page]

                                      103
<PAGE>
                 [SIGNATURE PAGE TO CREDIT AGREEMENT DATED AS OF
               JANUARY 16, 2004 WITH POST APARTMENT HOMES, L.P.]

                             SUNTRUST BANK, as a Documentation Agent and as a
                               Lender

                             By: /s/ W. John Wendler
                                 -----------------------------------
                                 Name: W. John Wendler
                                 Title: Director

                             Commitment Amount:

                             $50,000,000

                             LENDING OFFICE (ALL TYPES OF LOANS):

                             SunTrust Bank
                             8245 Boone Boulevard, Suite 820
                             Vienna, Virginia 22182
                             Attention:  John Wendler
                             Telecopy Number: (703) 902-9245
                             Telephone Number: (703) 902-9041

                       [Signatures Continued on Next Page]

                                      104
<PAGE>
                 [SIGNATURE PAGE TO CREDIT AGREEMENT DATED AS OF
               JANUARY 16, 2004 WITH POST APARTMENT HOMES, L.P.]

                              WELLS FARGO BANK, as a Documentation Agent and as
                                a Lender

                              By: /s/ John S. Misiura
                                  ------------------------------------
                                  Name: John S. Misiura
                                  Title: Vice President

                              Commitment Amount:

                              $50,000,000

                              LENDING OFFICE (ALL TYPES OF LOANS):

                              Wells Fargo Bank
                              2859 Paces Ferry Road, Suite 1805
                              Atlanta, Georgia 30339
                              Attention:  Jack Misiura
                              Telecopy Number: (770) 435-2262
                              Telephone Number: (770) 319-5223

                       [Signatures Continued on Next Page]

                                      105
<PAGE>
                 [SIGNATURE PAGE TO CREDIT AGREEMENT DATED AS OF
               JANUARY 16, 2004 WITH POST APARTMENT HOMES, L.P.]

                                            PNC BANK, NATIONAL ASSOCIATION

                                            By: /s/ Wayne P. Robertson
                                                --------------------------------
                                                Name: Wayne P. Robertson
                                                Title: Senior Vice President

                                            Commitment Amount:

                                            $35,000,000

                                            LENDING OFFICE (ALL TYPES OF LOANS):

                                            PNC Bank, National Association
                                            One PNC Plaza
                                            Mail Stop P1-POPP-19-2
                                            249 Fifth Avenue
                                            Pittsburgh, Pennsylvania 15222
                                            Attn:  Wayne Robertson
                                            Telecopier: (412) 762-6500
                                            Telephone:  (412) 762-8452

                       [Signatures Continued on Next Page]

                                      106
<PAGE>
                 [SIGNATURE PAGE TO CREDIT AGREEMENT DATED AS OF
               JANUARY 16, 2004 WITH POST APARTMENT HOMES, L.P.]

                                            AMSOUTH BANK

                                            By: /s/ David G. Ellis
                                                -------------------------------
                                                Name: David G. Ellis
                                                Title: AVP

                                            Commitment Amount:

                                            $30,000,000

                                            LENDING OFFICE (ALL TYPES OF LOANS):

                                            AmSouth Bank
                                            1900 5th Avenue North
                                            Birmingham, Alabama 35288
                                            Attn:  David Ellis
                                            Telecopier: (205) 326-4075
                                            Telephone:  (205) 581-7646

                       [Signatures Continued on Next Page]

                                      107
<PAGE>
                 [SIGNATURE PAGE TO CREDIT AGREEMENT DATED AS OF
               JANUARY 16, 2004 WITH POST APARTMENT HOMES, L.P.]

                                            SOUTHTRUST BANK

                                            By: /s/ Lisa S. Smith
                                                -------------------------------
                                                Name: Lisa S. Smith
                                                Title: Vice President

                                            Commitment Amount:

                                            $25,000,000

                                            LENDING OFFICE (ALL TYPES OF LOANS):

                                            Southtrust Bank
                                            600 West Peachtree, Suite 2600
                                            Mail Code B-024-PT-0037
                                            Atlanta, Georgia 30308
                                            Attn:  Lisa Smith
                                            Telecopier: (404) 214-5899
                                            Telephone:  (404) 214-5905

                       [Signatures Continued on Next Page]

                                      108
<PAGE>
                 [SIGNATURE PAGE TO CREDIT AGREEMENT DATED AS OF
               JANUARY 16, 2004 WITH POST APARTMENT HOMES, L.P.]

                                            JPMORGAN CHASE BANK

                                            By: /s/ Susan M. Tate
                                                -------------------------------
                                                Name: Susan M. Tate
                                                Title: Vice President

                                            Commitment Amount:

                                            $20,000,000

                                            LENDING OFFICE (ALL TYPES OF LOANS):

                                            JPMorgan Chase Bank
                                            707 Travis Street
                                            6th Floor North
                                            Houston, Texas 77002
                                            Attn:  Susan Tate
                                            Telecopier:  (713) 216-2391
                                            Telephone:   (713) 216-1511

                       [Signatures Continued on Next Page]

                                      109
<PAGE>
                 [SIGNATURE PAGE TO CREDIT AGREEMENT DATED AS OF
               JANUARY 16, 2004 WITH POST APARTMENT HOMES, L.P.]

                                        FIRST COMMERCIAL

                                        By: /s/ Bruce M.J. Ju
                                            -------------------------------
                                            Name: Bruce M.J. Ju
                                            Title: V.P. & General Manager

                                        Commitment Amount:

                                        $10,000,000

                                        LENDING OFFICE (ALL TYPES OF LOANS):

                                        First Commercial
                                        750 Third Avenue, 34th Floor
                                        New York, New York 10017
                                        Attn:  Julie Yang
                                        Telecopier: (212) 599-6133
                                        Telephone:  (212) 599-6868 x214

                                      110<PAGE>

                                                                   EXHIBIT 10.45

                              EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT (the "Agreement"), is made and entered into
as of this 1st day of December, 2003, by and among CHRISTOPHER J. PAPA (the
"Executive"), and POST PROPERTIES, INC., a Georgia corporation (the "Company"):

REASONS FOR THIS AGREEMENT. The Company has identified Executive as an
individual with significant skills and experience critical to the business of
the Company. In view of the significant and growing demand for executive talent,
the potential impact on the Company's executives of the transformational changes
occurring within our industry and company, and the need to ensure continuity of
the Company's senior management team, the Company desires to provide Executive
through this Agreement with certain incentives to remain in the Company's
employment. This Agreement is also designed to provide additional motivation for
meeting the Company's goals and objectives, to address potential long term
employment concerns of Executive, and to impose certain reasonable restrictions
on Executive's activities designed to protect the Company's interests should
Executive's employment terminate.

         Executive acknowledges that the Company and Company Affiliates shall
disclose or make available Confidential Information and Trade Secrets to
Executive that could be used by Executive to the Company's or Affiliated
Companies' detriment. In addition, in connection with his employment, Executive
shall develop important relationships and contacts with employees valuable to
the Company and Affiliated Companies.

         Executive further acknowledges that Sections 7, 8, 9, and 10 of this
Agreement are fair and reasonable, enforcement of the provisions of this
Agreement will not cause him undue hardship, and the provisions of this
Agreement are reasonably necessary and commensurate with the need to protect the
Company and Affiliated Companies and their business interests and property from
irreparable harm.

         WHEREAS, the Company desires to employ Executive, and Executive desires
to be employed by the Company on the terms and conditions contained in this
Agreement, and in consideration of the mutual promises and agreements contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties to this Agreement, intending to be
legally bound, hereby agree as follows:

SECTION 1. DEFINITIONS.

         1.1.     Board. The term "Board" for purposes of this Agreement shall
mean the Board of Directors of the Company.

         1.2.     Cash Compensation. The term "Cash Compensation" for purposes
of this Agreement shall mean the sum of

                  (a)      Executive's combined annual salary (as determined
         without regard to any salary deferral election) from the Company
         pursuant to Section 5.1 in effect on the day before Executive's
         employment terminates under Section 4 or Section 6.1 or Section 6.3 or,
         if greater, Executive's

<PAGE>

         average annualized combined annual salary (as determined without regard
         to any salary deferral election) from the Company pursuant to Section
         5.1 over the three (3) consecutive year period (or, if less,
         Executive's period of employment by the Company) which ends on the date
         that Executive's employment so terminates, and

                  (b)      the average annual bonuses which have been paid by
         the Company pursuant to Section 5.2 or which would have been paid
         pursuant to Section 5.2 but for a bonus deferral election with respect
         to Executive's performance over the three (3) consecutive year period
         which ends on the date that Executive's employment so terminates (or,
         if less, Executive's period of employment by the Company) whether such
         bonuses are paid (or would have been paid but for a bonus deferral
         election) in cash, in property, or in any combination of cash and
         property; provided, however,

                  (c)      neither the value of any stock option or restricted
         stock grants made by the Company to Executive in any calendar year, nor
         any income which Executive realizes in any calendar year from the
         exercise of any such stock options or the lapse of any restrictions on
         such restricted stock grants, nor any payments under the Company's
         Shareholder Value Plan or stock granted under Section 5.5(b) shall be
         treated as part of Executive's salary under Section 1.2(a), as part of
         Executive's bonuses under Section 1.2(b), or otherwise be considered or
         treated as Cash Compensation.

         1.3.     Cause. The term "Cause" for purposes of this Agreement shall
(subject to Section 1.3(d)) mean:

                  (a)      Executive is convicted of, pleads guilty to, or
         confesses or otherwise admits to the Company or a prosecutor, or
         otherwise publicly admits, any felony or any act of fraud,
         misappropriation, or embezzlement, or Executive engages in a fraudulent
         act or course of conduct;

                  (b)      There is any material act or omission by Executive
         involving malfeasance or negligence in the performance of Executive's
         duties to the Company to the material detriment of the Company; or

                  (c)      Executive breaches in any material respect any of the
         covenants set forth in Section 7, Section 8, Section 9 or Section 10 of
         this Agreement; provided, however,

                  (d)      No such act or omission or event shall be treated as
         "Cause" under this Agreement unless (i) Executive has been provided a
         detailed, written statement of the basis for the Company's belief such
         act or omission or event constitutes "Cause" and an opportunity to meet
         with the Compensation Committee (together with Executive's counsel if
         Executive chooses to have Executive's counsel present at such meeting)
         after Executive has had a reasonable period in which to review such
         statement and, if the allegation is under Section 1.3(b) or
         Section 1.3(c), has had at least a thirty (30) day period to take
         corrective action, and (ii) the Compensation Committee after such
         meeting (if Executive meets with the Compensation Committee) and after
         the end of such thirty (30) day correction period (if applicable)
         determines reasonably and in good faith and by the affirmative vote of
         at least a majority of the members of the Compensation Committee

                                       2
<PAGE>

         then in office at a meeting called and held for such purpose that
         "Cause" does exist under this Agreement.

         1.4.     Change in Control. The term "Change in Control" for purposes
of this Agreement shall mean:

                  (a)      a "change in control" of the Company of a nature that
         would be required to be reported in response to Item 6(e) of Schedule
         14A for a proxy statement filed under Section 14(a) of the Securities
         Exchange Act as in effect on the date of this Agreement;

                  (b)      a "person" (as that term is used in 14(d)(2) of the
         Exchange Act) becomes the beneficial owner (as defined in Rule 13d-3
         under the Exchange Act) directly or indirectly of securities
         representing 45% or more of the combined voting power for election of
         directors of the then outstanding securities of the Company;

                  (c)      the individuals who at the beginning of any period of
         two consecutive years or less (starting on or after the date of this
         Agreement) constitute the Company's Board cease for any reason during
         such period to constitute at least a majority of the Company's Board,
         unless the election or nomination for election of each new member of
         the Board was approved by vote of at least two-thirds of the members of
         such Board then still in office who were members of such Board at the
         beginning of such period;

                  (d)      the shareholders of the Company approve any
         reorganization, merger, consolidation, or share exchange as a result of
         which the common stock of the Company shall be changed, converted, or
         exchanged into or for securities of another organization (other than a
         merger with a Company Affiliate identified in Section 1.7(a), (b) or
         (c) of this Agreement or a wholly-owned subsidiary of the Company), or
         any dissolution or liquidation of the Company, or any sale or the
         disposition of 50% or more of the assets or business of the Company; or

                  (e)      the shareholders of the Company approve any
         reorganization, merger, consolidation, or share exchange with another
         corporation unless (i) the persons who were the beneficial owners of
         the outstanding shares of the common stock of the Company immediately
         before the consummation of such transaction beneficially own more than
         60% of the outstanding shares of the common stock of the successor or
         survivor corporation in such transaction immediately following the
         consummation of such transaction and (ii) the number of shares of the
         common stock of such successor or survivor corporation beneficially
         owned by the persons described in Section 1.4(e)(i) immediately
         following the consummation of such transaction is beneficially owned by
         each such person in substantially the same proportion that each such
         person had beneficially owned shares of Company common stock
         immediately before the consummation of such transaction, provided (iii)
         the percentage described in Section 1.4(e)(i) of the beneficially owned
         shares of the successor or survivor corporation and the number
         described in Section 1.4(e)(ii) of the beneficially owned shares of the
         successor or survivor corporation shall be determined exclusively by
         reference to the shares of the successor or survivor corporation which
         result from the beneficial ownership of shares of common

                                       3
<PAGE>

         stock of the Company by the persons described in Section 1.4(e)(i)
         immediately before the consummation of such transaction.

         1.5.     Code. The term "Code" for purposes of this Agreement shall
mean the Internal Revenue Code of 1986, as amended.

         1.6.     Company. The term "Company" for purposes of this Agreement
shall mean the Company and any successor to the Company.

         1.7.     Company Affiliate. The term "Company Affiliate" for purposes
of this Agreement shall mean (a) Post Apartment Homes, L.P. and any successor to
such organization, (b) Post Services, Inc. and any successor to such
organization, (c) Post GP Holdings, Inc. and any successor to such organization
and (d) any other organization if the Company, Post Apartment Homes, L.P., Post
Services, Inc. or Post GP Holdings, Inc. (i) beneficially own more than twenty
percent (20%) of the outstanding voting capital stock of such organization (if
such organization is a corporation) or more than twenty percent (20%) of the
beneficial interests of such organization (if such organization is not a
corporation) as of the date of this Agreement and (ii) possess the power to
direct or cause the direction of the day to day operations and affairs of such
organization, whether through ownership of voting securities, by contract, in
the capacity of general partner, manager or managing member or otherwise as of
the date of this Agreement.

         1.8.     Compensation Committee. The term "Compensation Committee" for
purposes of this Agreement shall mean the Executive Compensation and Management
Development Committee of the Board.

         1.9.     Confidential or Proprietary Information. The term
"Confidential or Proprietary Information" for purposes of this Agreement shall
mean any secret, confidential, or proprietary information of the Company or a
Company Affiliate (not otherwise included in the definition of Trade Secret in
Section 1.18 of this Agreement) that has not become generally available to the
public by the act of one who has the right to disclose such information without
violating any right of the Company or a Company Affiliate.

         1.10.    Disability. The term "Disability" for purposes of this
Agreement shall mean that Executive, as a result of a mental or physical
condition or illness affecting a major life activity, is unable to perform the
essential functions of Executive's job at the Company for any consecutive
180-day period, even with reasonable accommodation, all as reasonably determined
by the Compensation Committee.

         1.11.    Effective Date. The term "Effective Date" for purposes of this
Agreement shall mean either the date which includes the "closing" of the
transaction which makes a Change in Control effective, if the Change in Control
is made effective through a transaction which has a "closing", or the date a
Change in Control is reported in accordance with applicable law as effective to
the Securities and Exchange Commission, if the Change in Control is made
effective other than through a transaction which has a "closing".

         1.12.    Exchange Act. The term "Exchange Act" for purposes of this
Agreement shall mean the Securities Exchange Act of 1934, as amended.

                                       4
<PAGE>

         1.13.    Good Reason.

         (1)      The term "Good Reason" for purposes of Section 6 of this
Agreement shall (subject to Section 1.13(e)) mean:

                  (a)      there is a reduction after a Change in Control, but
         before the end of Executive's Protection Period, in Executive's salary
         from the Company pursuant to Section 5.1 or there is a reduction after
         a Change in Control, but before the end of Executive's Protection
         Period, in Executive's eligibility to receive any bonuses from the
         Company pursuant to Section 5.2 or incentive compensation from the
         Company pursuant to Section 5.3 or Section 5.4 substantially different
         from the eligibility of other senior Company executives to receive such
         bonuses or incentive compensation, all without Executive's express
         written consent; or

                  (b)      there is a reduction after a Change in Control, but
         before the end of Executive's Protection Period, in the scope,
         importance, or prestige of Executive's duties, responsibilities, or
         authority at the Company (other than as a result of a mere change in
         Executive's title, if such change in title is consistent with the
         organizational structure of the Company following such Change in
         Control) without Executive's express written consent; or

                  (c)      the Company at any time after a Change in Control,
         but before the end of Executive's Protection Period (without
         Executive's express written consent), transfers Executive's primary
         work site from Executive's primary work site on the date of such Change
         in Control or, if Executive subsequently consents in writing to such a
         transfer under this Agreement, from the primary work site that was the
         subject of such consent, to a new primary work site that is more than
         35 miles from Executive's then current primary work site, unless such
         new primary work site is closer to Executive's primary residence than
         Executive's then current primary work site; or

                  (d)      the Company fails (without Executive's express
         written consent) after a Change in Control, but before the end of
         Executive's Protection Period, to continue to provide to Executive
         health and welfare benefits, deferred compensation benefits, executive
         perquisites (other than the use of a company airplane for personal
         purposes), and stock option and restricted stock grants that are in the
         aggregate comparable in value to those provided to Executive
         immediately prior to the Change in Control Date; provided, however,

                  (e)      No such act or omission shall be treated as "Good
         Reason" under

         Section 1.13(1) unless

                           (i)      (A) Executive delivers to the Compensation
                  Committee a detailed, written statement of the basis for
                  Executive's belief that such act or omission constitutes Good
                  Reason, (B) Executive delivers such statement before the later
                  of (1) the end of the ninety (90) day period that starts on
                  the date there is an act or

                                       5
<PAGE>

                  omission which forms the basis for Executive's belief that
                  Good Reason exists, or (2) the end of the period mutually
                  agreed upon for purposes of this  Section 1.13(1)(e)(i)(B) in
                  writing by Executive and the Chairman of the Compensation
                  Committee, (C) Executive gives the Compensation Committee a
                  thirty (30) day period after the delivery of such statement to
                  cure the basis for such belief, and (D) Executive actually
                  submits Executive's written resignation to the Compensation
                  Committee during the sixty (60) day period that begins
                  immediately after the end of such thirty (30) day period if
                  Executive reasonably and in good faith determines that Good
                  Reason continues to exist after the end of such thirty (30)
                  day period, or

                           (ii)     the Company states in writing to Executive
                  that Executive has the right to treat any such act or omission
                  as Good Reason under this Agreement and Executive resigns
                  during the sixty (60) day period that starts on the date such
                  statement is actually delivered to Executive;

                  (f)      If (A) Executive gives the Compensation Committee the
         statement described in Section 1.13(1)(e)(i) before the end of the
         thirty (30) day period that immediately follows the end of the
         Protection Period and Executive thereafter resigns within the period
         described in Section 1.13(1)(e)(i), or (B) the Company provides the
         statement to Executive described in Section 1.13(1)(e)(ii) before the
         end of the thirty (30) day period that immediately follows the end of
         the Protection Period and Executive thereafter resigns within the
         period described in Section 1.13(1)(e)(ii), then (C) such resignation
         shall be treated under this Agreement as if made in Executive's
         Protection Period; and

                  (g)      If Executive consents in writing to any reduction
         described in Section 1.13(1)(a) or Section 1.13(1)(b), to any transfer
         described in Section 1.13(1)(c) or to any failure described in Section
         1.13(1)(d) in lieu of exercising Executive's right to resign for Good
         Reason and delivers such consent to the Company, the date such consent
         is delivered to the Company thereafter shall be treated under this
         definition as the date of a Change in Control for purposes of
         determining whether Executive subsequently has Good Reason under this
         Agreement to resign under Section 6.1 or Section 6.3 as a result of any
         subsequent reduction described in Section 1.13(1)(a) or Section
         1.13(1)(b), any subsequent transfer described in Section 1.13(1)(c), or
         any subsequent failure described in Section 1.13(1)(d).

         (2)      The term "Good Reason" for purposes of Section 4 of this
Agreement shall mean:

                  (a)      the Company changes Executive's eligibility for
         compensation and benefits in a manner that results in Executive's
         compensation and benefits being reduced five percent (5%) more than the
         reduction of other senior Company executives' compensation and
         benefits; or

                  (b)      there is a significant reduction in Executive's level
         of responsibility or authority at the Company (other than a mere change
         in Executive's title) without Executive's express written consent; or

                                       6
<PAGE>

                  (c)      the Company transfers Executive's primary work site
         from the Executive's primary work site on the date of this Agreement
         or, if the Executive subsequently consents in writing to such a
         transfer under this Agreement, from the primary work site that was the
         subject of such consent, to a new primary work site that is more than
         35 miles from Executive's then current primary work site, unless such
         new primary work site is closer to Executive's primary residence than
         Executive's then current primary work site or unless Executive provides
         his express written consent.

                  (d)      No such act or omission shall be treated as "Good
         Reason" under Section 1.13(2) unless

                  (i)      (A) Executive delivers to the Compensation Committee
         a detailed, written statement of the basis for Executive's belief that
         such act or omission constitutes Good Reason, (B) Executive delivers
         such statement before the later of (1) the end of the ninety (90) day
         period that starts on the date there is an act or omission which forms
         the basis for Executive's belief that Good Reason exists, or (2) the
         end of the period mutually agreed upon for purposes of this Section
         1.13(2)(d)(i)(B) in writing by Executive and the Chairman of the
         Compensation Committee, (C) Executive gives the Compensation Committee
         a thirty (30) day period after the delivery of such statement to cure
         the basis for such belief, and (D) Executive actually submits
         Executive's written resignation to the Compensation Committee during
         the sixty (60) day period that begins immediately after the end of such
         thirty (30) day period if Executive reasonably and in good faith
         determines that Good Reason continues to exist after the end of such
         thirty (30) day period, or

                  (ii)     the Company states in writing to Executive that
         Executive has the right to treat any such act or omission as Good
         Reason under this Section 1.13(2) and Executive resigns during the
         sixty (60) day period that starts on the date such statement is
         actually delivered to Executive.

         1.14.    Gross Up Payment. The term "Gross Up Payment" for purposes of
this Agreement shall mean a payment to or on behalf of Executive which shall be
sufficient to pay (a) any excise tax described in  Section 13 in full, (b) any
federal, state and local income tax and social security and other employment tax
on the payment made to pay such excise tax as well as any additional taxes on
such payment and (c) any interest or penalties assessed by the Internal Revenue
Service on Executive which are related to the payment of such excise tax unless
such interest or penalties are attributable to Executive's willful misconduct or
gross negligence.

         1.15.    Multifamily Property. The term "Multifamily Property" for
purposes of this Agreement and any renewal of this Agreement shall mean any real
property on which an upscale multifamily residential-use development has been
constructed or is under construction as of the date of this or any renewal of
this Agreement.

         1.16.    Protection Period. The term "Protection Period" for purposes
of this Agreement shall (subject to Section 1.13(1)(f)) mean the three (3) year
period which begins on the Effective Date for a Change in Control.

                                       7
<PAGE>

         1.17.    Restricted Period. The term "Restricted Period" for purposes
of this Agreement shall mean the period which starts on the date Executive's
employment by the Company terminates for any reason or no reason and which ends
(i) on the first anniversary of such termination date for purposes of Section 9
and Section 10 and (ii) on the second anniversary of such termination date for
purposes of Section 7 and Section 8.

         1.18.    Trade Secret. The term "Trade Secret" for purposes of this
Agreement shall mean information, including, but not limited to, technical or
nontechnical data, a formula, a pattern, a compilation, a program, a device, a
method, a technique, a drawing, a process, financial data, financial plans,
product plans, or a list of actual or potential customers or suppliers that:

                  (a)      derives economic value, actual or potential, from not
         being generally known to, and not being readily ascertainable by proper
         means by, other persons who can obtain economic value from its
         disclosure or use, and

                  (b)      is the subject of reasonable efforts by the Company
         or a Company Affiliate to maintain its secrecy.

SECTION 2. EMPLOYMENT.

         Subject to the terms of this Agreement, the Company hereby employs
Executive, and Executive hereby accepts such employment with the Company.
Executive shall initially serve as the Executive Vice President and Chief
Financial Officer of the Company and initially shall have the duties, rights,
and responsibilities normally associated with such positions, including
oversight over all of the Company's accounting, reporting, budgeting, financing,
and investor relations, as well as such other comparable duties as assigned by
the Company. Executive shall devote his full business time, skills, and best
efforts to rendering services on behalf of the Company and shall exercise such
care as is customarily required by executives undertaking similar duties for
entities similar to the Company.

SECTION 3. TERM.

         Unless earlier terminated in accordance with  Section 4, the employment
of Executive under this Agreement shall commence as of the date of this
Agreement and shall continue up to, but not including, the first anniversary of
such date; provided, however, that, unless the Board or Executive decides
otherwise, and notifies the other party of that decision in writing before an
anniversary of the date of this Agreement, this Agreement shall renew on the
first anniversary of each successive anniversary of the date of this Agreement.

SECTION 4. TERMINATION.

         The Company may terminate this Agreement at any time; provided, that if
termination is without Cause or Executive resigns for Good Reason, the Company
shall continue to pay Executive pursuant to its standard payroll practices his
base salary under Section 5.1 as if he were still employed for a period of one
year. In addition, if termination is without Cause or Executive resigns for Good
Reason, the Company shall pay Executive any bonus which he would be eligible to
receive under Section 5.2 were he to remain employed for a period of one year.
In addition,

                                       8
<PAGE>

if termination is without Cause or Executive resigns for Good Reason, the
Company shall, to the extent permitted, continue to provide to Executive for a
period of one year the same coverage and benefits as Executive was provided
under the Company's benefit plans pursuant to Section 5.10 of this Agreement on
the day before Executive's employment terminated. If the Company cannot provide
such coverage and benefits under the Company's employee benefit plans, the
Company shall either provide such coverage and benefits to Executive outside
such plans at no additional expense or tax liability to Executive or shall
reimburse Executive for Executive's cost to purchase such coverage and benefits
and for any tax liability for such reimbursements. In addition, notwithstanding
anything contained herein to the contrary, in the event that Executive is
terminated without Cause or resigns for Good Reason, (1) each outstanding stock
option granted to Executive by the Company shall become exercisable immediately
before his termination of employment to the full extent the option would have
become exercisable if Executive had remained employed by the Company for a
period of one year from the date Executive's employment terminates, and each
option shall remain exercisable until the earlier of (a) the expiration of the
term of the option or (b) the date the option would have expired if Executive's
employment had terminated at the end of the term of this Agreement (as
determined immediately prior to the date Executive's employment terminates)
without Cause or for Good Reason; (2) Executive, immediately before his
termination of employment, shall vest in any outstanding restricted stock
granted by the Company to the full extent Executive would have vested in the
restricted stock had Executive remained employed by the Company for a period of
one year; and (3) Executive shall have the right to receive the bonus or
bonuses, if any, that Executive would have been entitled to receive under the
Shareholder Value Plan if Executive had remained employed by the Company for a
period of one year. Notwithstanding anything contained herein to the contrary,
Executive further agrees that termination for Cause shall result in the
immediate termination and forfeiture of all rights to compensation and benefits,
including any options to purchase Company stock which have not vested, as
provided herein.

SECTION 5. COMPENSATION.

         5.1. Base Salary. Commencing on the date of this Agreement, the Company
shall pay Executive during the term of Executive's employment under this
Agreement, an annual base salary of $275,000, less required deductions. The
Compensation Committee shall review Executive's Base Salary on an annual basis,
and the Compensation Committee, upon such review and in its sole discretion, may
increase or decrease Executive's Base Salary by an amount that the Compensation
Committee deems appropriate in light of the Company's and Executive's
performance during the period covered by such review; provided, however, that
Executive's Base Salary shall not be reduced below $275,000 per annum. The Base
Salary, less any required deductions, shall be paid to Executive in accordance
with the Company's standard payroll practices and procedures for salaried
employees.

         5.2. Bonus. In addition to the annual Base Salary, Executive shall be
eligible to receive an annual bonus, provided that certain personal and
corporate goals to be established by the Compensation Committee are met or
exceeded. In the event that Executive is paid a bonus under  Section 5.2 for any
period of time less than one year, Executive's bonus shall be a pro rata share
of the annual bonus.

                                       9
<PAGE>

         5.3. Incentive Compensation. In addition to the annual Base Salary and
Bonus awarded under Section 5.1 and Section 5.2, Executive shall receive an
option to purchase shares of the Company's common stock each year in a number
and at a price to be determined by the Compensation Committee. Unless decided
otherwise by the Compensation Committee in a manner consistent with the
Company's practice with respect to other senior Company executives, any options
awarded pursuant to Section 5.3 shall vest over a three-year period in the
following manner:

         One year after options granted:     33% of options vest
         Two years after options granted:    33% of options vest
         Three years after options granted:  34% of options vest.

In the event Executive is granted an option for any period of time less than one
year, Executive shall receive a pro rata share of the annual option grant.

         5.4.     Restricted Stock Awards And Shareholder Value Plan. In
addition to any other compensation provided in Sections 5.1, 5.2, and 5.3 of
this Agreement, Executive shall be eligible during the term of this Agreement to
receive an award of Restricted Stock and a Target Bonus under the Shareholder
Value Plan (the "Plan"). The terms and conditions of any award under this
section shall be determined by the Compensation Committee.

         5.5.     Signing Bonus. Within five business days following the date of
this Agreement, Executive shall receive:

         a)       a cash signing bonus of $95,000, less required deductions;

         b)       a grant of a certain number of shares of the Company's common
stock, such number to be determined by dividing $100,000 by the closing price of
the Company's common stock on the first business day following the date of this
Agreement (rounded down to the nearest whole number). Such stock grant shall
vest over five (5) years at the annual rate of 1/5 (or the nearest whole number
of shares rounded down) of the total number of shares of stock granted pursuant
to this paragraph; and

         c)       an option to purchase 50,000 additional shares of the
Company's common stock at the closing price on the first business day following
the date of this Agreement. Such options shall vest at the rate of 20% each year
over the five years following the date of this Agreement.

         5.6.     Automobile Allowance. In addition to any other compensation
provided in  Sections 5.1, 5.2, 5.3, and 5.4 of this Agreement, Executive shall
receive an annual automobile allowance of $7,200.00 (Seven Thousand Two Hundred
Dollars). Executive shall have complete discretion with respect to the
expenditure of the Automobile Allowance.

         5.7.     Comparison With Other REIT's. At regular intervals the Company
shall continue to retain Compensation Consultants to assure that the total
compensation paid to Executive is comparable to that being paid to executives at
comparable Apartment REITs, and/or other REITs of a similar size, all as
determined by the Compensation Committee.

                                       10
<PAGE>

         5.8.     Expenses. Executive shall be reimbursed for all reasonable
business-related expenses incurred by Executive at the request of or on behalf
of the Company, including, without limitation, first class travel expenses
incurred in connection with the performance of Executive's duties and
responsibilities hereunder.

         5.9.     Vacation. In addition to Company holidays, Executive shall be
eligible to take up to four (4) weeks (20 business days) of vacation during each
calendar year. Vacation days not taken in the year granted are forfeited and
Executive will not receive pay in lieu of vacation.

         5.10.    Benefit Plans. Executive shall be entitled to participate in
such medical, dental, disability, hospitalization, life insurance, and other
employee benefit plans as are maintained by the Company for the benefit of
senior executive officers.

         5.11.    Relocation Expenses. The Company will reimburse Executive for
all reasonable relocation expenses, including the cost of movers, a reasonable
period of storage, if necessary, and up to two separate house-hunting trips for
Executive, Executive's wife, and Executive's children. The Company will also
provide Executive with a temporary furnished apartment in Atlanta, Georgia and
reimbursement of all reasonable commuting expenses for a reasonable period prior
to Executive's permanent relocation. The Company will also provide a payment, if
necessary, to Executive in the amount of any federal, state or local taxes
assessed on Executive as a result of any reimbursement made under Section 5.11.

SECTION 6. CHANGE IN CONTROL.

         6.1.     General Rule.

         (1)      If there is a Change in Control and either (a) the Company
during Executive's Protection Period terminates Executive's employment without
Cause, (b) Executive during Executive's Protection Period resigns for Good
Reason, or (c) Executive resigns for any or no reason whatsoever at any time
during the 90 day period that (i) starts on the first anniversary of the
Effective Date, or if the Effective Date comes before July 1, 2004, which (ii)
starts immediately after the end of the 180 day period which begins on the
Effective Date, then the Company shall pay Executive three (3) times Executive's
then Cash Compensation in cash in a lump sum within thirty (30) days after the
date Executive's employment so terminates;

         (2)      (a) Each outstanding stock option granted to Executive by the
Company shall (notwithstanding the terms under which such option was granted)
become fully vested and exercisable on the date Executive's employment so
terminates and shall (notwithstanding the terms under which such option was
granted) remain exercisable for the remaining term of each such option (as
determined as if there had been no such termination of Executive's employment),
subject to the same terms and conditions as if Executive had remained employed
by the Company or a Company Affiliate for such term or such period (other than
any term or condition which gives the Company the right to cancel any such
option) and (b) any restrictions on any outstanding restricted stock grants to
Executive by the Company immediately shall

                                       11
<PAGE>

(notwithstanding the terms under which such grant was made) expire and
Executive's right to such stock shall be non-forfeitable; and

         (3)      From the date of such termination of Executive's employment
until the end of Executive's Protection Period, the Company shall continue to
provide to Executive (i) the same coverage and benefits as Executive was
provided under the Company's employee benefit plans pursuant to Section 5.10 of
this Agreement on the day before Executive's employment terminated or, at
Executive's election, on any date in the one (1) year period which ends on the
date of such termination of employment and (ii) the same executive perquisites
(other than use of a company airplane for personal purposes) as Executive
enjoyed on the day before Executive's employment terminated or, at Executive's
election, on any date in the one (1) year period which ends on the date of such
termination; provided, however, if the Company cannot provide such coverage and
benefits under the Company's employee benefit plans, the Company either shall
provide such coverage and benefits to Executive outside such plans at no
additional expense or tax liability to Executive or shall reimburse Executive
for Executive's cost to purchase such coverage and benefits and for any tax
liability for such reimbursements.

         (4)      If Employee is entitled to and accepts benefits under Section
6 of this Agreement, Employee shall not be entitled to and shall not receive any
benefits under Section 4 of this Agreement.

         6.2.     No Increase In Other Benefits.

         If Executive's employment terminates under the circumstances described
in Section 6.1 or Section 6.3, Executive expressly waives Executive's right, if
any, to have any payment made under Section 6.1 taken into account to increase
the benefits otherwise payable to, or on behalf of, Executive under any employee
benefit plan, whether qualified or unqualified, maintained by the Company or a
Company Affiliate.

         6.3.     Termination In Anticipation Of A Change In Control.

         Executive shall be treated under  Section 6.1 as if Executive's
employment had been terminated without Cause or Executive had resigned for Good
Reason during Executive's Protection Period if:

                  (1)      Executive's employment is terminated by the Company
         without Cause or Executive resigns for Good Reason,

                  (2)      such termination is effected or such resignation is
         effective at any time in the sixty (60) day period which ends on the
         Effective Date of a Change In Control, and

                  (3)      there is an Effective Date for such Change In
         Control.

         6.4.     Death Or Disability.

                                       12
<PAGE>

         Executive agrees that the Company will have no obligation to Executive
or his estate under this Section 6 if Executive's employment terminates
exclusively as a result of Executive's death or a Disability.

SECTION 7. NO SOLICITATION OF CUSTOMERS.

         Executive will not, during the Restricted Period, for purposes of
competing with the Company or any Company Affiliate, solicit on Executive's own
behalf or on behalf of any other person, firm, or corporation which engages,
directly or indirectly, in the development, operation, management, leasing or
landscaping of a Multifamily Property, any customer of the Company or any
Company Affiliate with whom Executive had a personal business interaction at any
time during the two (2) years immediately prior to the termination of
Executive's employment by the Company. Section 7 shall not prohibit a general
solicitation not targeted at Company's customers and in which Executive has no
participation or involvement.

SECTION 8. ANTIPIRATING OF EMPLOYEES.

         Executive will not during the Restricted Period employ or seek to
employ on Executive's own behalf or on behalf of any other person, firm or
corporation that engages, directly or indirectly, in the development, operation,
management, leasing, or landscaping of a Multifamily Property, any person who
was employed by the Company or any Company Affiliate in an executive,
managerial, or supervisory capacity during the term of Executive's employment by
the Company and with whom Executive had business dealings during the two (2)
year period which ends on the date Executive's employment by the Company
terminates (whether or not such employee would commit a breach of contract), and
who has not ceased to be employed by the Company or any Company Affiliate for a
period of at least one (1) year. Section 8 shall not prohibit a general
solicitation not targeted at Company employees and in which Executive has no
participation or involvement.

SECTION 9. TRADE SECRETS AND CONFIDENTIAL OR PROPRIETARY INFORMATION.

         Executive hereby agrees to hold in a fiduciary capacity for the benefit
of the Company and each Company Affiliate, and will not directly or indirectly
use or disclose, any Trade Secret that Executive may have acquired during the
term of Executive's employment by the Company for so long as such information
remains a Trade Secret even if such information remains a Trade Secret after the
expiration of the Restricted Period.

         In addition, Executive agrees during the Restricted Period to hold in a
fiduciary capacity for the benefit of the Company and each Company Affiliate,
and not to directly or indirectly use or disclose, any Confidential or
Proprietary Information that Executive may have acquired (whether or not
developed or compiled by Executive and whether or not Executive was authorized
to have access to such information) during the term of, in the course of, or as
a result of Executive's employment by the Company.

SECTION 10. COVENANT NOT TO COMPETE.

                                       13
<PAGE>

         During the Restricted Period, Executive shall not serve as an employee,
independent contractor, or otherwise render any advice or services similar to
those listed in Section 2 of this Agreement, directly or indirectly, to any
person, firm, or corporation listed on Appendix A of this Agreement with respect
to its operations in markets where the Company is currently engaged in business.
Executive agrees that the entities listed on Appendix A are the Company's
principal competitors in the markets where the Company is currently engaged in
business. Executive further agrees that Executive and the Company will, in
return for additional consideration, agree to update Appendix A in connection
with the annual renewal of this Agreement in order to fairly include only the
Company's principal competitors.

SECTION 11. REASONABLE AND NECESSARY RESTRICTIONS.

         Executive acknowledges that the restrictions, prohibitions, and other
provisions set forth in this Agreement, including without limitation the
Restricted Period and those set forth in Sections 7, 8, 9, and 10, are
reasonable, fair and equitable in scope, terms, and duration; are necessary to
protect the legitimate business interests of the Company; and are a material
inducement to the Company to enter into this Agreement. Executive covenants that
Executive will not challenge the enforceability of this Agreement nor will
Executive raise any equitable defense to its enforcement.

SECTION 12. SPECIFIC PERFORMANCE.

         Executive acknowledges that the obligations undertaken by him pursuant
to this Agreement are unique and that the Company likely will have no adequate
remedy at law if Executive shall fail to perform any of Executive's obligations
under this Agreement, and Executive therefore confirms that the Company's right
to specific performance of the terms of this Agreement is essential to protect
the rights and interests of the Company. Accordingly, in addition to any other
remedies that the Company may have at law or in equity, the Company will have
the right to have all obligations, covenants, agreements, and other provisions
of this Agreement specifically performed by Executive, and the Company will have
the right to obtain preliminary and permanent injunctive relief to secure
specific performance and to prevent a breach or contemplated breach of this
Agreement by Executive, and Executive submits to the jurisdiction of the courts
of the State of Georgia for this purpose.

SECTION 13. TAX PROTECTION.

         If the Company or the Company's independent accountants (which shall
consider such issue upon the reasonable request of the Executive) determine that
any payments and benefits called for under this Agreement, together with any
other payments and benefits made available to Executive by the Company or a
Company Affiliate, will result in Executive's being subject to an excise tax
under  Section 4999 of the Code or if such an excise tax is assessed against
Executive as a result of any such payments and other benefits, the Company shall
make a Gross Up Payment to or on behalf of Executive as and when any such
determination or assessment is made, provided Executive takes such action (other
than waiving Executive's right to any payments or benefits in excess of the
payments or benefits which Executive has expressly agreed to waive under this
Section 13) as the Company reasonably requests under the circumstances to
mitigate or challenge such

                                       14
<PAGE>

tax; provided, however, if the Company or the Company's independent accountants
make such a determination and, further, determine that Executive will not be
subject to any such excise tax if Executive waives Executive's right to receive
a part of such payments or benefits and such part does not exceed $25,000,
Executive shall irrevocably waive Executive's right to receive such part if an
independent accountant or lawyer retained by Executive and paid by the Company
agrees with the determination made by the Company or the Company's independent
accountants with respect to the effect of such reduction in payments or
benefits. Any determinations under this Section 13 shall be made in accordance
with Section 280G of the Code and any applicable related regulations (whether
proposed, temporary, or final) and any related Internal Revenue Service rulings
and any related case law and, if the Company reasonably requests that Executive
take action to mitigate or challenge, or to mitigate and challenge, any such tax
or assessment (other than waiving Executive's right to any payments or benefits
in excess of the payments or benefits which Executive has expressly agreed to
waive under this Section 13) and Executive complies with such request, the
Company shall provide Executive with such information and such expert advice and
assistance from the Company's independent accountants, lawyers, and other
advisors as Executive may reasonably request and shall pay for all expenses
incurred in effecting such compliance and any related fines, penalties,
interest, and other assessments.

SECTION 14. MISCELLANEOUS.

         14.1.    Binding Effect. This Agreement shall inure to the benefit of
and shall be binding upon Executive and his executor, administrator, heirs,
personal representatives, and assigns, and the Company and its successors and
assigns; provided, however, that Executive shall not be entitled to assign or
delegate any of his rights or obligations hereunder without the prior written
consent of the Company.

         14.2.    Construction of Agreement. No provision of this Agreement or
any related document shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or judicial
authority, including an arbitrator, by reason of such party having or being
deemed to have structured or drafted such provision.

         14.3.    Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia.

         14.4.    Survival of Agreements. All covenants and agreements made
herein shall survive the execution and delivery of this Agreement and the
termination of Executive's employment hereunder for any reason.

         14.5.    Headings. The paragraph and section headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.

         14.6.    Notices. All notices, requests, consents, and other
communications hereunder shall be in writing and shall be deemed to be given
when delivered personally or mailed first class, registered or certified mail,
postage prepaid, in either case, addressed as follows:

                                       15
<PAGE>

         (a)      If to Executive:

                  Mr. Christopher J. Papa
                  35 Wolf Hill Drive
                  Warren, New Jersey 07059

                  with a copy to:

         (b)      If to the Company:

                  Post Properties, Inc.
                  One Riverside
                  4401 Northside Parkway
                  Suite 800
                  Atlanta, GA 30327-3057
                  Attention: Corporate Secretary

                  with a copy to:

                  William A. Clineburg, Jr.
                  King & Spalding
                  191 Peachtree Street
                  Atlanta, GA 30303-1763

         14.7.    Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

         14.8.    Entire Agreement. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof and, upon the
Effective Date, will supersede and replace all prior agreements, written or
oral, between the parties hereto or with respect to the subject matter hereof.
This Agreement may be modified only by a written instrument signed by each of
the parties hereto.

         14.9.    Severability. In the event that any provision or portion of
this Agreement shall be determined to be invalid or unenforceable for any
reason, in whole or in part, the remaining provisions of this Agreement shall be
unaffected thereby and shall remain in full force and effect to the fullest
extent permitted by law.

         14.10.   No Waiver. No waiver by either party of any breach by the
other party of any condition or provision contained in this Agreement to be
performed by such other party shall be deemed a waiver of a similar or
dissimilar condition or provision at the same or any prior or subsequent time.
Any waiver must be in writing and signed by Executive or an authorized officer
of the Company, as the case may be.

                                       16
<PAGE>

         14.11.   Reference; Non-Disparagement. In the event of Executive's
termination without Cause or resignation for Good Reason, the Company agrees to
provide Executive with a reference. The Company agrees not to disparage or
demean Executive, publicly or otherwise. Executive also agrees not to disparage
or demean the Company, Company Affiliates, Company officers or directors, or
Company shareholders, publicly or otherwise.

         IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.

                                            POST PROPERTIES, INC.

                                            By: /s/ David P. Stockert
                                                --------------------------------
                                            Name: David P. Stockert
                                            Title: President and Chief Executive
                                                   Officer

                                            EXECUTIVE

                                            /s/ Christopher J. Papa
                                            ------------------------------------
                                            Christopher J. Papa

                                       17
<PAGE>

                                                                   EXHIBIT 10.45

                                   APPENDIX A

AMLI Residential Properties Trust
Apartment Investment and Management Company (AIMCO)
Archstone-Smith
AvalonBay Communities, Inc.
Camden Property Trust
Cornerstone Realty Income Trust Inc.
Equity Residential
Fairfield Properties, L.P.
Gables Residential Trust
Harold A. Dawson Company Inc.
JPI
Julian LeCraw & Co., Inc.
Lane Company
Lincoln Property Company
Mid-America Apartment Communities, Inc.
Summit Properties Inc.
The Finger Companies
The Hanover Company
Trammell Crow Residential
United Dominion Realty Trust
Wood Partners, LLC

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