Exhibit 4 (viii)

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                                 LEASE AGREEMENT

                         Dated as of September 26, 2001

                                     between

                      FIRST UNION DEVELOPMENT CORPORATION,

                                    as Lessor

                                       and

                               TOYS "R" US, INC.,

                                    as Lessee

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This Lease  Agreement is subject to a security  interest in favor of First Union
National Bank, as the agent for the Primary Financing Parties and respecting the
Security  Documents,  as the agent for the Secured Parties (the "Agent") under a
Security  Agreement  dated  as  of  September  26,  2001,  between  First  Union
Development  Corporation,  as the Borrower and the Agent, as amended,  modified,
extended,  supplemented and/or restated from time to time in accordance with the
applicable provisions thereof. This Lease Agreement has been executed in several
counterparts.  To the  extent,  if any,  that this Lease  Agreement  constitutes
chattel  paper (as such term is defined  in the  Uniform  Commercial  Code as in
effect in any  applicable  jurisdiction),  no  security  interest  in this Lease
Agreement may be created  through the transfer or possession of any  counterpart
other than the original counterpart  containing the receipt therefor executed by
the Agent on the signature page hereof.


<PAGE>

                                TABLE OF CONTENTS

ARTICLE I......................................................................1
    1.1 Definitions............................................................1
    1.2 Interpretation.........................................................2

ARTICLE II.....................................................................2
    2.1 Property...............................................................2
    2.2 Lease Term.............................................................2
    2.3 Title..................................................................2
    2.4 Lease Supplement.......................................................3

ARTICLE III....................................................................3
    3.1 Rent...................................................................3
    3.2 Payment of Basic Rent..................................................3
    3.3 Supplemental Rent......................................................3
    3.4 Performance on a Non-Business Day......................................4
    3.5 Rent Payment Provisions................................................4
    3.6 Payment to Agent.......................................................5

ARTICLE IV.....................................................................5
    4.1 Taxes; Utility Charges.................................................5

ARTICLE V......................................................................5
    5.1 Quiet Enjoyment........................................................5

ARTICLE VI.....................................................................6
    6.1 Net Lease..............................................................6
    6.2 No Termination or Abatement............................................6

ARTICLE VII....................................................................7
    7.1 Ownership of the Property..............................................7

ARTICLE VIII...................................................................8
    8.1 Condition of the Property..............................................8
    8.2 Possession and Use of the Property.....................................9
    8.3 Integrated Property...................................................10

ARTICLE IX....................................................................10
    9.1 Compliance With Legal Requirements, Insurance Requirements and
          Manufacturer's Specifications and Standards.........................10

ARTICLE X.....................................................................11
   10.1 Maintenance and Repair; Return........................................11
   10.2 Environmental Inspection..............................................12

ARTICLE XI....................................................................12
   11.1 Modifications.........................................................12

ARTICLE XII...................................................................14
   12.1 Warranty of Title.....................................................14

ARTICLE XIII..................................................................15
   13.1 Permitted Contests Other Than in Respect of Indemnities...............15


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<PAGE>

   13.2 Impositions, Utility Charges, Other Matters;
          Compliance with Legal Requirements..................................15

ARTICLE XIV...................................................................15
   14.1 Public Liability and Workers' Compensation Insurance..................15
   14.2 Permanent Hazard and Other Insurance..................................16
   14.3 Coverage..............................................................17
   14.4 Policies..............................................................18
   14.5 Insurance Coverage During Construction Period.........................18

ARTICLE XV....................................................................18
   15.1 Casualty and Condemnation.............................................18
   15.2 Environmental Matters.................................................21
   15.3 Notice of Environmental Matters.......................................22

ARTICLE XVI...................................................................23
   16.1 Termination Upon Certain Events.......................................23
   16.2 Procedures............................................................23

ARTICLE XVII..................................................................23
   17.1 Lease Events of Default...............................................23
   17.2 Surrender of Possession...............................................26
   17.3 Reletting.............................................................27
   17.4 Damages...............................................................27
   17.5 Power of Sale.........................................................28
   17.6 Final Liquidated Damages..............................................28
   17.7 Environmental Costs...................................................29
   17.8 Waiver of Certain Rights..............................................29
   17.9 Assignment of Rights Under Contracts..................................29
   17.10 Remedies Cumulative..................................................29
   17.11 Lessee's Right to Cure by Purchase of the Property...................30

ARTICLE XVIII.................................................................30
   18.1 Lessor's Right to Cure Lessee's Lease Defaults........................30

ARTICLE XIX...................................................................30
   19.1 Provisions Relating to Lessee's Exercise
          of its Purchase Option..............................................30
   19.2 No Purchase or Termination With Respect to
          Less than All of a Property.........................................31

ARTICLE XX....................................................................31
   20.1 Purchase Option or Sale Option-General Provisions.....................31
   20.2 Lessee Purchase Option................................................32
   20.3 Third Party Sale Option...............................................32

ARTICLE XXI...................................................................33

ARTICLE XXII..................................................................34
   22.1 Sale Procedure........................................................34
   22.2 Application of Proceeds of Sale.......................................36
   22.3 Indemnity for Excessive Wear..........................................37
   22.4 Appraisal Procedure...................................................37
   22.5 Certain Obligations Continue..........................................38


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ARTICLE XXIII.................................................................38
   23.1 Holding Over..........................................................38

ARTICLE XXIV..................................................................39
   24.1 Risk of Loss..........................................................39

ARTICLE XXV...................................................................39
   25.1 Assignment............................................................39
   25.2 Subleases.............................................................39

ARTICLE XXVI..................................................................40
   26.1 No Waiver.............................................................40

ARTICLE XXVII.................................................................40
   27.1 Acceptance of Surrender...............................................40
   27.2 No Merger of Title....................................................40

ARTICLE XXVIII................................................................41
   28.1 [Reserved]............................................................41

ARTICLE XXIX..................................................................41
   29.1 Notices...............................................................41

ARTICLE XXX...................................................................41
   30.1 Miscellaneous.........................................................41
   30.2 Amendments and Modifications..........................................41
   30.3 Successors and Assigns................................................41
   30.4 Headings and Table of Contents........................................41
   30.5 Counterparts..........................................................41
   30.6 GOVERNING LAW.........................................................42
   30.7 Calculation of Rent...................................................42
   30.8 Memoranda of Lease and Lease Supplement...............................42
   30.9 Allocations between the Lenders and Lessor............................42
   30.10 Limitations on Recourse..............................................42
   30.11 WAIVERS OF JURY TRIAL................................................43
   30.12 Exercise of Lessor Rights............................................43
   30.13 SUBMISSION TO JURISDICTION; VENUE....................................43
   30.14 USURY SAVINGS PROVISION..............................................43
   30.15 Restriction On Collateralization.....................................44

EXHIBITS
--------

EXHIBIT A - Lease Supplement No. ____
EXHIBIT B - Memorandum of Lease and Lease Supplement No. ____


                                      iii
<PAGE>

                                 LEASE AGREEMENT
                                 ---------------

      THIS LEASE AGREEMENT dated as of September 26, 2001 (as amended, modified,
extended,  supplemented,  restated  and/or  replaced  from  time to  time,  this
"Lease")  is between  FIRST  UNION  DEVELOPMENT  CORPORATION,  a North  Carolina
corporation,  as  lessor  (the  "Lessor"),  and TOYS "R" US,  INC.,  a  Delaware
corporation, as lessee (the "Lessee").

                              W I T N E S S E T H:
                              - - - - - - - - - -

      A.  WHEREAS,  subject  to the terms and  conditions  of the  Participation
Agreement and the Agency Agreement,  Lessor will (i) acquire one or more parcels
of real property,  which will (or may) have existing  Improvements  thereon, and
(ii)   fund  the   acquisition,   installation,   testing,   use,   development,
construction,  operation,  maintenance, repair, refurbishment and restoration of
the Property by the Construction Agent; and

      B. WHEREAS,  the Interim Term shall  commence with respect to the Property
on the  Closing  Date and the Basic  Term  shall  commence  with  respect to the
Property upon the Rent Commencement Date; and

      C. WHEREAS, this is a transaction between unrelated parties wherein Lessor
desires  to lease to  Lessee,  and Lessee  desires  to lease  from  Lessor,  the
Property.

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

                                    ARTICLE I

      1.1 Definitions.

            For purposes of this Lease, capitalized terms used in this Lease and
not  otherwise  defined  herein  shall  have the  meanings  assigned  to them in
Appendix A to that certain  Participation  Agreement  dated as of September  26,
2001 (as amended,  modified,  extended,  supplemented,  restated and/or replaced
from time to time in accordance  with the  applicable  provisions  thereof,  the
"Participation   Agreement")  among  Lessee,   Lessor,   the  various  financial
institutions  and other  institutional  investors which are parties thereto from
time to time as Tranche A Note  Purchasers,  the various banks and other lending
institutions  which are parties  thereto from time to time as Tranche B Lenders,
the various banks and other lending  institutions which are parties thereto from
time to time as Cash Collateral Lenders, First Union National Bank, as agent for
the Primary  Financing  Parties and  respecting the Security  Documents,  as the
agent for the Secured  Parties,  and First Union  National  Bank,  as the Escrow
Agent.  Unless  otherwise  indicated,  references  in this  Lease  to  articles,
sections,  paragraphs,  clauses,  appendices,  schedules and exhibits are to the
same contained in this Lease.


<PAGE>

      1.2 Interpretation.

            The  rules of usage  set forth in  Appendix  A to the  Participation
Agreement shall apply to this Lease.

                                   ARTICLE II

      2.1 Property.

            Subject  to the  terms  and  conditions  hereinafter  set  forth and
contained in the Lease Supplement relating to the Property, Lessor hereby leases
to Lessee and Lessee hereby leases from Lessor, the Property.

      2.2 Lease Term.

            The interim  term of this Lease with  respect to the  Property  (the
"Interim Term") shall begin upon the Closing Date (the "Commencement  Date") and
shall end on the Rent  Commencement  Date,  unless the  Interim  Term is earlier
terminated.  The basic  term of this Lease with  respect  to the  Property  (the
"Basic Term") shall begin upon the Rent  Commencement  Date and shall end on the
tenth  anniversary  of the  Closing  Date,  unless  the  Basic  Term is  earlier
terminated.

            Not less than one  hundred  eighty  (180)  days and no more than two
hundred  forty  (240) days prior to the end of the Basic  Term,  Lessee may give
Lessor and the Agent written notice of Lessee's desire to extend the Basic Term.
Lessor,   each  Primary  Financing  Party  and  the  Agent  shall  each  make  a
determination, in the absolute and sole discretion of each such party, not later
than one hundred  twenty-five  (125) days prior to the then  current  Expiration
Date  whether or not such party  will  agree to extend  the  Expiration  Date as
requested;  provided,  however,  that  failure by any such party to respond (not
later  than one  hundred  twenty-five  (125)  days  prior  to the  then  current
Expiration  Date) to Lessee's request shall be deemed to constitute a refusal by
such party to the  extension  of the  Expiration  Date.  In response to Lessee's
request for an extension of the  Expiration  Date,  if (a) Lessor,  each Primary
Financing Party and the Agent shall agree in writing to the requested extension,
then the Term shall be extended  and shall expire on the agreed upon date or (b)
Lessor,  any Primary  Financing Party or the Agent shall refuse (or be deemed to
have refused) to agree to the requested extension, then the Basic Term shall not
be extended and shall expire on the then current Expiration Date.

      2.3 Title.

            The  Property  is leased to Lessee  without  any  representation  or
warranty,  express or implied, by Lessor and subject to the rights of parties in
possession  (if  any),  the state of title  (including  without  limitation  the
Permitted Liens) existing as of the Commencement  Date, and all applicable Legal
Requirements.  Lessee shall in no event have any recourse against Lessor for any
defect in Lessor's title to the Property or any interest of Lessee therein other
than for Lessor Liens.


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<PAGE>

      2.4 Lease Supplement.

            On or prior to the Commencement  Date,  Lessee and Lessor shall each
execute and deliver a Lease  Supplement  for the  Property  effective as of such
Commencement Date in substantially the form of Exhibit A hereto; provided, on or
prior  to the  Rent  Commencement  Date,  Lessee  and  Lessor  shall,  upon  the
reasonable request of either party,  execute and deliver an amended and restated
Lease Supplement for the Property effective as of such Rent Commencement Date.

                                   ARTICLE III

      3.1 Rent.

            (a) (i) Lessee  shall pay Basic  Rent in  arrears on each  Scheduled
      Interest Payment Date; provided,  however, Lessee shall have no obligation
      to pay Basic Rent with respect to the Property until the Rent Commencement
      Date; provided, further, any amount of Basic Rent payable on the Scheduled
      Interest  Payment  Date  occurring on August 1, 2011 shall be paid on July
      31,  2011,  and (ii)  Lessee  shall pay Cash  Collateral  Rent on the Cash
      Collateral Maturity Date.

            (b) Basic  Rent  shall be due and  payable  in  lawful  money of the
      United States and shall be paid by wire transfer of immediately  available
      funds on or before the due date  therefor to such  account at such bank as
      Lessor shall from time to time direct.

            (c) Lessee's  inability or failure to take  possession of all or any
      portion  of  any  Property  when  delivered  by  Lessor,  whether  or  not
      attributable  to any act or omission of Lessor,  the  Construction  Agent,
      Lessee or any other Person or for any other reason  whatsoever,  shall not
      delay  or  otherwise  affect  Lessee's  obligation  to pay  Rent  for such
      Property in accordance with the terms of this Lease.

            (d) Lessee shall make all payments of Rent payable to Lessor by wire
      transfer initiated prior to 10:00 a.m., Charlotte, North Carolina time, on
      the applicable date for payment of such amount.

      3.2 Payment of Basic Rent.

            Basic Rent shall be paid  absolutely  net to Lessor or its designee,
so that this  Lease  shall  yield to Lessor  the full  amount  thereof,  without
setoff, deduction or reduction.

      3.3 Supplemental Rent.

            Lessee  shall  pay  to the  Person  entitled  thereto  any  and  all
Supplemental  Rent when and as the same shall become due and  payable.  All such
payments of  Supplemental  Rent payable to any  Financing  Party shall be in the
full amount thereof, without setoff, deduction or


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<PAGE>

reduction.  Lessee shall pay to the appropriate Person, as Supplemental Rent due
and owing to such Person, among other things, on demand, (a) any and all payment
obligations  (except  for  amounts  payable  as  Basic  Rent,  payments  made in
connection with the satisfaction or removal of Lessor Liens, certain Transaction
Expenses funded by Advances pursuant to the Operative Agreements,  principal and
interest  due and  owing  under the Notes or the Note  Purchase  Agreement,  the
Tranche  B  Credit  Agreement  or the  Cash  Collateral  Credit  Agreement,  any
Make-Whole  Amount,  prepayment  premiums and other  amounts  payable  under the
Notes, the Note Purchase  Agreement,  the Tranche B Credit Agreement or the Cash
Collateral Credit Agreement that arise solely as a result of an Event of Default
attributable  to the Lessor,  amounts  expressly  excluded from  indemnification
pursuant to Sections 11.1, 11.2 and 11.7 of the Participation Agreement, amounts
due and owing or otherwise  payable or incurred as a result of or in  connection
with any voluntary assignment,  transfer or sale of a participation  interest by
Lessor or any Tranche A Note Purchaser  (other than as set forth in Section 5.14
of the Participation  Agreement or Section 13.2 of the Note Purchase Agreement),
Tranche B Lender or Cash  Collateral  Lender,  legal  expenses of any individual
Tranche A Note  Purchaser,  Tranche B Lender or Cash  Collateral  Lender,  costs
incurred by any individual  Tranche A Note  Purchaser,  Tranche B Lender or Cash
Collateral Lender in determining to participate in the transaction  contemplated
by the  Operative  Agreements  (including  costs and expenses of  reviewing  the
Operative  Agreements  and  or  private  placement   memorandum),   and  payment
obligations of one Financing  Party to another  Financing Party other than those
set forth in Section  13.2 of the Note  Purchase  Agreement)  owing from time to
time under the Operative  Agreements by any Person to the Agent, the Lessor, the
Escrow Agent, any Primary Financing Party, or any other Person,  (b) interest at
the applicable  Overdue Rate on any portion of any installment of Basic Rent not
paid when due for the  period  for which the same  shall be  overdue  and on any
portion of any payment of  Supplemental  Rent payable to any Financing Party not
paid when due for the period  from the due date until the same shall be paid and
(c) amounts referenced as Supplemental Rent obligations  pursuant to Section 8.3
of the Participation  Agreement. The expiration or other termination of Lessee's
obligations  to  pay  Basic  Rent  hereunder  shall  not  limit  or  modify  the
obligations  of Lessee  with  respect to  Supplemental  Rent.  Unless  expressly
provided  otherwise  in this  Lease,  in the event of any failure on the part of
Lessee to pay and discharge any Supplemental  Rent as and when due, Lessee shall
also promptly pay and discharge any fine, penalty, interest or cost which may be
assessed or added for nonpayment or late payment of such Supplemental  Rent, all
of which shall also constitute Supplemental Rent.

      3.4 Performance on a Non-Business Day.

            If any  Basic  Rent is  required  hereunder  on a day  that is not a
Business Day, then such Basic Rent shall be due on the  corresponding  Scheduled
Interest Payment Date. If any Supplemental  Rent is required  hereunder on a day
that is not a Business Day, then such Supplemental Rent shall be due on the next
succeeding Business Day.

      3.5 Rent Payment Provisions.

            Lessee  shall make payment of all Basic Rent and  Supplemental  Rent
when due regardless of whether any of the Operative Agreements pursuant to which
same is calculated and is owing shall have been  rejected,  avoided or disavowed
in any bankruptcy or insolvency


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<PAGE>

proceeding involving any of the parties to any of the Operative Agreements. Such
Operative  Agreements,  including without limitation  provisions relating to the
payment of Supplemental  Rent with the proceeds of Advances  pursuant to Section
8.3(d)  of the  Participation  Agreement,  and  their  related  definitions  are
incorporated herein by reference and shall survive any termination, amendment or
rejection of any such Operative Agreements.

      3.6 Payment to Agent.

            The Lessor  hereby  instructs  the  Lessee,  and the  Lessee  hereby
acknowledges and agrees,  that until such time as the Notes are paid in full and
the Liens evidenced by the Security Documents  (including the Security Agreement
and the Mortgage Instruments) have been released (i) any and all Rent (excluding
Excepted  Payments) and any and all other amounts of any kind or type under this
Lease due and owing or payable to any Person shall  instead be paid  directly to
the Agent (excluding  Excepted Payments) or as the Agent may direct from time to
time for allocation and distribution in accordance with the procedures set forth
in Section 8.7 of the Participation Agreement.

                                   ARTICLE IV

      4.1 Taxes; Utility Charges.

            Subject to the terms of Article XIII relating to permitted contests,
Lessee  shall  pay or cause  to be paid  all  Impositions  with  respect  to the
Property and/or the use, occupancy,  operation,  repair, access,  maintenance or
operation  thereof and all charges for  electricity,  power,  gas,  oil,  water,
telephone,  sanitary sewer service and all other rents,  utilities and operating
expenses of any kind or type used in or on any  Property  during the Term.  Upon
Lessor's  reasonable  written  request,  Lessee shall  provide from time to time
Lessor with evidence of all such payments  referenced in the foregoing sentence.
Lessee  shall be entitled  to receive  any credit or refund with  respect to any
Imposition  or utility  charge paid by Lessee.  Unless an Event of Default shall
have occurred and be continuing,  the amount of any credit or refund received by
Lessor on account of any Imposition or utility charge paid by Lessee, net of the
costs and expenses incurred by Lessor in obtaining such credit or refund,  shall
be  promptly  paid over to Lessee.  All  charges for  Impositions  or  utilities
imposed  with  respect  to the  Property  for a period  during  which this Lease
expires or  terminates  shall be adjusted and prorated on a daily basis  between
Lessor and  Lessee,  and each party  shall pay or  reimburse  the other for such
party's pro rata share thereof.

                                    ARTICLE V

      5.1 Quiet Enjoyment.

            Subject to the rights of Lessor contained in Sections 17.2, 17.3 and
20.3 and the other terms of this Lease and the other Operative Agreements and so
long as no Lease Event of Default shall have occurred and be continuing,  Lessee
shall peaceably and quietly have, hold and


                                       5
<PAGE>

enjoy the Property for the Term,  free of any claim or other action by Lessor or
anyone rightfully  claiming by, through or under Lessor (other than Lessee) with
respect to any matters arising from and after the Commencement Date.

                                   ARTICLE VI

      6.1 Net Lease.

            This Lease shall  constitute  a net lease,  and the  obligations  of
Lessee hereunder are absolute and unconditional.  Lessee shall pay all operating
expenses arising out of the use, operation and/or occupancy of the Property. Any
present  or future law to the  contrary  notwithstanding,  this Lease  shall not
terminate, nor shall Lessee be entitled to any abatement, suspension, deferment,
reduction, setoff, counterclaim,  or defense with respect to the Rent, nor shall
the  obligations  of Lessee  hereunder be affected  (except as expressly  herein
permitted and by performance of the obligations in connection therewith) for any
reason whatsoever,  including without limitation by reason of: (a) any damage to
or  destruction  of the  Property  or any part  thereof;  (b) any  taking of the
Property or any part thereof or interest  therein by  Condemnation or otherwise;
(c) any  prohibition,  limitation,  restriction  or  prevention of Lessee's use,
occupancy or enjoyment of the Property or any part thereof,  or any interference
with such use, occupancy or enjoyment by any Person or for any other reason; (d)
any title defect,  Lien or any matter  affecting title to the Property;  (e) any
eviction by paramount title or otherwise;  (f) any default by Lessor  hereunder;
(g)  any  action  for  bankruptcy,  insolvency,   reorganization,   liquidation,
receivership,  dissolution  or other  proceeding  relating to or  affecting  the
Agent,  any  Primary  Financing  Party,  Lessor,   Lessee  or  any  Governmental
Authority;  (h) the impossibility or illegality of performance by Lessor, Lessee
or both; (i) any action of any Governmental  Authority or any other Person;  (j)
Lessee's acquisition of ownership of all or part of the Property;  (k) breach of
any warranty or  representation  with  respect to the Property or any  Operative
Agreement;  (l) any defect in the  condition,  quality or fitness for use of the
Property or any part  thereof;  or (m) any other cause or  circumstance  whether
similar or  dissimilar  to the  foregoing  and whether or not Lessee  shall have
notice  or  knowledge  of any of the  foregoing.  The  parties  intend  that the
obligations of Lessee  hereunder shall be covenants,  agreements and obligations
that are separate and independent  from any obligations of Lessor  hereunder and
shall continue  unaffected  unless such  covenants,  agreements and  obligations
shall have been modified or terminated in accordance  with an express  provision
of this Lease.  Lessor and Lessee  acknowledge  and agree that the provisions of
this Section 6.1 have been specifically reviewed and subject to negotiation.

      6.2 No Termination or Abatement.

            Lessee shall remain  obligated  under this Lease in accordance  with
its terms and shall not take any  action to  terminate,  rescind  or avoid  this
Lease,  notwithstanding any action for bankruptcy,  insolvency,  reorganization,
liquidation,  dissolution,  or other  proceeding  affecting  any  Person  or any
Governmental  Authority,  or any  action  with  respect  to  this  Lease  or any
Operative Agreement which may be taken by any trustee, receiver or liquidator of
any Person or any  Governmental  Authority  or by any court with  respect to any
Person, or any Governmental


                                       6
<PAGE>

Authority.  Lessee  hereby  waives all right (a) to terminate or surrender  this
Lease (except as permitted  under the terms of the Operative  Agreements) or (b)
to avail itself of any  abatement,  suspension,  deferment,  reduction,  setoff,
counterclaim or defense with respect to any Rent.  Lessee shall remain obligated
under this Lease in  accordance  with its terms and Lessee hereby waives any and
all rights now or  hereafter  conferred  by statute or otherwise to modify or to
avoid strict compliance with its obligations  under this Lease.  Notwithstanding
any such  statute or  otherwise,  Lessee  shall be bound by all of the terms and
conditions contained in this Lease.

                                   ARTICLE VII

      7.1 Ownership of the Property.

            (a) Lessor  and  Lessee  intend  that (i) for  financial  accounting
      purposes  with  respect  to Lessee  (A) this  Lease  will be treated as an
      "operating lease" pursuant to Statement of Financial  Accounting Standards
      No.  13, as  amended,  (B)  Lessor  will be the  owner  and  lessor of the
      Property and (C) Lessee will be the lessee of the  Property,  but (ii) for
      federal  and  all  state  and  local  income  tax  purposes,  and  for all
      bankruptcy  purposes  (including the substantive law upon which bankruptcy
      proceedings  are  based),  (A) this Lease  will be treated as a  financing
      arrangement  and (B) Lessee  will be treated as the owner of the  Property
      and will be entitled to all tax benefits ordinarily available to owners of
      property  similar to the Property for such tax  purposes.  Notwithstanding
      the  foregoing,  neither party hereto has made, or shall be deemed to have
      made, any  representation or warranty as to the availability of any of the
      foregoing  treatments under applicable  accounting rules, tax, bankruptcy,
      regulatory, commercial or real estate law or under any other set of rules.
      Lessee  shall  claim  the cost  recovery  deductions  associated  with the
      Property,  and Lessor shall not, to the extent not prohibited by Law, take
      on its tax  return a position  inconsistent  with  Lessee's  claim of such
      deductions.

            (b) In order to secure the  obligations  of Lessee now  existing  or
      hereafter arising under any and all Operative Agreements,  pursuant hereto
      and to the Lease  Supplement,  Lessee  hereby  conveys,  grants,  assigns,
      transfers,  hypothecates,  mortgages  and  sets  over to  Lessor,  for the
      benefit of the Secured Parties,  a security  interest (but subject only to
      the  security  interest  in the  assets  granted by Lessor in favor of the
      Agent  in  accordance  with  the  Security   Agreement  and  the  Mortgage
      Instruments)  in and lien on all right,  title and interest of Lessee (now
      owned or hereafter acquired) in and to the Property, to the extent such is
      personal property and irrevocably grants and conveys a lien, deed of trust
      or mortgage,  as  applicable,  on all right,  title and interest of Lessee
      (now owned or  hereafter  acquired)  in and to the  Property to the extent
      such is real  property.  Lessor and Lessee  further intend and agree that,
      for  the  purpose  of  securing  the  obligations  of  Lessee  and/or  the
      Construction  Agent now existing or hereafter  arising under the Operative
      Agreements,  this Lease as supplemented by the Lease Supplement shall be a
      security agreement and financing statement within the meaning of Article 9
      of the Uniform  Commercial  Code  respecting the Lessee's  interest in the
      Property and all proceeds (including without limitation insurance proceeds
      thereof) to the extent such is personal  property and an irrevocable grant
      and conveyance of a lien, deed of trust or


                                       7
<PAGE>

      mortgage, as applicable,  on the Lessee's interest in the Property and all
      proceeds (including without limitation  insurance proceeds thereof) to the
      extent such is real  property and  constitutes a grant by Lessee to Lessor
      of a security interest, lien, deed of trust or mortgage, as applicable, in
      all of Lessee's  right,  title and interest in and to the Property and all
      proceeds (including without limitation  insurance proceeds thereof) of the
      conversion,   voluntary  or  involuntary,  of  the  foregoing  into  cash,
      investments,  securities or other  property,  whether in the form of cash,
      investments, securities or other property, and an assignment of all rents,
      profits and income  produced by the  Property.  Lessee and Lessor  further
      intend and agree that notifications to Persons holding such proceeds,  and
      acknowledgments,  receipts or confirmations from financial intermediaries,
      bankers or agents (as applicable) of Lessee,  when given,  shall be deemed
      to have been  given for the  purpose of  perfecting  the  foregoing  lien,
      security  interest,  mortgage lien or deed of trust, as applicable,  under
      applicable  law.  Lessee  shall  promptly  take such  actions as necessary
      (including  without  limitation  the  filing of  Uniform  Commercial  Code
      Financing   Statements,   Uniform  Commercial  Code  Fixture  Filings  and
      memoranda  (or short  forms) of this  Lease and the Lease  Supplement)  to
      ensure that the lien,  security interest,  mortgage lien or deed of trust,
      as applicable,  in the Property and the other items  referenced above will
      be deemed to be a perfected lien, security interest, mortgage lien or deed
      of trust,  as  applicable,  of first  priority  (subject  to all liens and
      security  interests  granted  to the Agent  and/or the  Primary  Financing
      Parties  under the  Security  Documents  (other  than this  Lease))  under
      applicable law and will be maintained as such throughout the Term.

                                  ARTICLE VIII

      8.1 Condition of the Property.

            LESSEE  ACKNOWLEDGES  AND  AGREES  THAT IT IS LEASING  THE  PROPERTY
"AS-IS  WHERE-IS"  WITHOUT  REPRESENTATION,  WARRANTY  OR  COVENANT  (EXPRESS OR
IMPLIED) BY LESSOR (EXCEPT THAT LESSOR SHALL KEEP THE PROPERTY FREE AND CLEAR OF
LESSOR LIENS) AND IN EACH CASE SUBJECT TO (A) THE STATE OF TITLE  EXISTING AS OF
THE COMMENCEMENT  DATE, (B) THE RIGHTS OF ANY PARTIES IN POSSESSION  THEREOF (IF
ANY),  (C) ANY  STATE OF FACTS  REGARDING  ITS  PHYSICAL  CONDITION  OR WHICH AN
ACCURATE  SURVEY  MIGHT SHOW,  (D) ALL  APPLICABLE  LEGAL  REQUIREMENTS  AND (E)
VIOLATIONS OF LEGAL  REQUIREMENTS  WHICH MAY EXIST ON THE DATE HEREOF AND/OR THE
DATE OF THE APPLICABLE  LEASE  SUPPLEMENT.  NEITHER LESSOR NOR THE AGENT NOR ANY
Primary  Financing  Party  HAS  MADE  OR  SHALL  BE  DEEMED  TO  HAVE  MADE  ANY
REPRESENTATION,  WARRANTY OR COVENANT  (EXPRESS OR IMPLIED)  (EXCEPT THAT LESSOR
SHALL KEEP THE  PROPERTY  FREE AND CLEAR OF LESSOR  LIENS) OR SHALL BE DEEMED TO
HAVE  ANY  LIABILITY  WHATSOEVER  AS TO THE  TITLE,  VALUE,  HABITABILITY,  USE,
CONDITION, DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE OF THE PROPERTY
(OR ANY  PART  THEREOF),  OR ANY  OTHER  REPRESENTATION,  WARRANTY  OR  COVENANT
WHATSOEVER, EXPRESS OR


                                       8
<PAGE>

IMPLIED, WITH RESPECT TO THE PROPERTY (OR ANY PART THEREOF),  AND NEITHER LESSOR
NOR THE AGENT NOR ANY  Primary  Financing  Party SHALL BE LIABLE FOR ANY LATENT,
HIDDEN,  OR PATENT DEFECT  THEREON OR THE FAILURE OF THE  PROPERTY,  OR ANY PART
THEREOF,  TO  COMPLY  WITH ANY  LEGAL  REQUIREMENT.  LESSEE  HAS OR PRIOR TO THE
COMMENCEMENT  DATE WILL HAVE BEEN  AFFORDED  FULL  OPPORTUNITY  TO  INSPECT  THE
PROPERTY  AND THE  IMPROVEMENTS  THEREON  (IF ANY),  IS OR WILL BE  (INSOFAR  AS
LESSOR, THE AGENT AND EACH Primary Financing Party ARE CONCERNED) SATISFIED WITH
THE RESULTS OF ITS  INSPECTIONS  AND IS ENTERING  INTO THIS LEASE  SOLELY ON THE
BASIS OF THE  RESULTS  OF ITS OWN  INSPECTIONS,  AND ALL RISKS  INCIDENT  TO THE
MATTERS DESCRIBED IN THE PRECEDING  SENTENCE,  AS BETWEEN LESSOR,  THE AGENT AND
THE Primary Financing  Parties,  ON THE ONE HAND, AND LESSEE, ON THE OTHER HAND,
ARE TO BE BORNE BY LESSEE.

      8.2 Possession and Use of the Property.

            (a) At all times during the Term with respect to the Property,  such
      Property shall be a Permitted  Facility and shall be used by Lessee in the
      ordinary  course of its  business.  Lessee  shall pay, or cause to be paid
      during the Term, all charges and costs required in connection with the use
      of the Property as contemplated by this Lease.  Lessee shall not commit or
      permit any waste of the Property or any part thereof.

            (b) As of the  Commencement  Date,  the  address  stated in  Section
      6.2(i) of the  Participation  Agreement is the principal place of business
      and  chief  executive  office  of  Lessee  (as such  terms are used in the
      Uniform Commercial Code) and its location of jurisdiction (as such term is
      used in the Uniform  Commercial  Code of any applicable  jurisdiction)  is
      Delaware.  As of the Completion  Date, the principal place of business and
      chief  executive  office of Lessee (as such terms are used in the  Uniform
      Commercial  Code of any  applicable  jurisdiction)  will be located at the
      Property  and its  location of  jurisdiction  (as such term is used in the
      Uniform Commercial Code of any applicable  jurisdiction) will be Delaware.
      Lessee  will  provide  Lessor with prior  written  notice of any change of
      location of its  principal  place of  business,  the location of its chief
      executive  office or the  location of its  jurisdiction  of  organization.
      Regarding the Property,  the Lease Supplement shall correctly identify the
      initial  location of the related  Equipment (if any) and  Improvements (if
      any) and contain an accurate legal  description  for the related parcel of
      Land.  The  Equipment  and  Improvements  respecting  the Property will be
      located only at the location identified in the Lease Supplement.

            (c) Lessee will not attach or  incorporate  any item of Equipment to
      or in any other item of  equipment or personal  property,  or to or in any
      real  property,  in a manner that could give rise to the  assertion of any
      Lien on  such  item of  Equipment  by  reason  of such  attachment  or the
      assertion of a claim that such item of Equipment  has become a fixture and
      is subject to a Lien in favor of a third  party that is prior to the Liens
      thereon created by the Operative Agreements.


                                       9
<PAGE>

            (d) On or prior to the Rent  Commencement  Date,  Lessor  and Lessee
      shall execute a Lease Supplement (or,  pursuant to Section 2.4, an amended
      and restated Lease Supplement)  which shall contain an Equipment  Schedule
      that has a general  description  of the Equipment  which shall  comprise a
      part of the  Property,  a schedule that has a general  description  of the
      Improvements  which  shall  comprise  a part of the  Property  and a legal
      description of the Land upon which such  Improvements will be constructed,
      all of which shall be leased hereunder as of the Rent  Commencement  Date.
      As of the Rent Commencement Date, such Equipment,  Improvements, Land, all
      additional  Equipment and all additional  Improvements  which are financed
      under the Operative Agreements after the Closing Date and the remainder of
      such  Property  shall be deemed to have been  accepted  by Lessee  for all
      purposes of this Lease and to be subject to this Lease.

            (e) At all  times  during  the Term,  Lessee  will  comply  with all
      obligations  under and (to the extent no Lease Event of Default exists and
      provided  that  any such  exercise  of  rights  and  remedies  hereinafter
      referred to will not impair the value, utility or remaining useful life of
      such  Property)  shall be  permitted  to exercise  all rights and remedies
      under,  all  operation  and  easement  agreements  and  related or similar
      agreements applicable to such Property.

      8.3 Integrated Property.

            On the Rent  Commencement  Date,  Lessee shall, at its sole cost and
expense, cause the Property, together with any Appurtenant Rights, to constitute
(and for the  duration  of the Term shall  continue  to  constitute)  all of the
equipment,  facilities, rights, personal property and real property necessary or
appropriate  to  operate,  utilize,  maintain  and  control  the  Property  in a
commercially reasonable manner.

                                   ARTICLE IX

      9.1 Compliance  With   Legal  Requirements,   Insurance  Requirements  and
          Manufacturer's Specifications and Standards.

            Subject to the terms of Article XIII relating to permitted contests,
Lessee, at its sole cost and expense, shall (a) comply with all applicable Legal
Requirements  (including  without  limitation  all  Environmental  Laws) and all
Insurance  Requirements  relating to the  Property,  (b)  procure,  maintain and
comply  with all  licenses,  permits,  orders,  approvals,  consents  and  other
authorizations  required  for  the  acquisition,   installation,  testing,  use,
development,  construction,  operation,  maintenance,  repair, refurbishment and
restoration   of  the   Property,   and  (c)  comply  with  all   manufacturer's
specifications  and standards,  including  without  limitation the  acquisition,
installation, testing, use, development,  construction,  operation, maintenance,
repair, refurbishment and restoration of the Property, whether or not compliance
therewith shall require  structural or extraordinary  changes in the Property or
interfere  with the use and  enjoyment  of the  Property  unless the  failure to
procure, maintain and comply with such items identified in subparagraphs (b) and
(c),  individually  or in the  aggregate,  shall not and could not reasonably be
expected to have a Material  Adverse Effect.  Lessor agrees to take such actions
as may be


                                       10
<PAGE>

reasonably  requested by Lessee in connection  with the  compliance by Lessee of
its obligations under this Section 9.1.

                                    ARTICLE X

      10.1 Maintenance and Repair; Return.

            (a)  Lessee,  at its  sole  cost and  expense,  shall  maintain  the
      Property in the repair and condition as existed as of the Completion  Date
      (ordinary wear and tear excepted) and make all necessary  repairs  thereto
      and replacements  thereof,  of every kind and nature  whatsoever,  whether
      interior  or   exterior,   ordinary  or   extraordinary,   structural   or
      nonstructural  or  foreseen  or  unforeseen,  in each case as  required by
      Section 9.1 and on a basis  consistent  with the operation and maintenance
      of Lessee's properties or equipment comparable in type and function to the
      Property,  such that the Property is capable of being immediately utilized
      by a third  party  and in  compliance  with  standard  industry  practice,
      subject, however, to the provisions of Article XV with respect to Casualty
      and Condemnation.

            (b) Lessee  shall not use or locate any  component  of the  Property
      outside of the Approved State therefor.  Lessee shall not move or relocate
      any  component  of  the  Property   beyond  the  boundaries  of  the  Land
      (comprising  part of such  Property)  described  in the  applicable  Lease
      Supplement,  except  for the  temporary  removal  of  Equipment  and other
      personal property for repair or replacement.

            (c) If any  component  of  the  Property  becomes  worn  out,  lost,
      destroyed,  damaged beyond repair or otherwise  permanently rendered unfit
      for use, Lessee, at its own expense, will within a reasonable time replace
      such component with a replacement component which is free and clear of all
      Liens  (other  than  Permitted  Liens and  Lessor  Liens) and has a value,
      utility and useful life at least equal to the component replaced (assuming
      the component replaced had been maintained and repaired in accordance with
      the  requirements  of this Lease).  All components  which are added to the
      Property shall immediately become the property of (and title thereto shall
      vest in)  Lessor  and shall be deemed  incorporated  in the  Property  and
      subject to the terms of this Lease as if originally leased hereunder.

            (d) Upon  reasonable  advance  notice  and during  regular  business
      hours,  Lessor and its agents shall have the right to inspect the Property
      and all maintenance  records with respect  thereto,  but shall not, in the
      absence of a Lease Event of Default,  schedule any such inspection  during
      the months of October,  November or December,  nor materially  disrupt the
      business of Lessee. In connection with any such inspection  initiated upon
      the occurrence of, and thereafter during any continuance of, a Lease Event
      of Default,  costs and  expenses in  connection  with any such  inspection
      shall be borne by the Lessee.


                                       11
<PAGE>

            (e) Lessee shall cause to be  delivered to Lessor (at Lessee's  sole
      expense) one (1) or more additional Appraisals (or reappraisals or updates
      of prior  Appraisals  of the Property) as Lessor may request if and to the
      extent any of Lessor, the Agent or any Primary Financing Party is required
      pursuant to any applicable Legal Requirement to obtain such Appraisals (or
      reappraisals  or updates of prior  Appraisals)  and upon the occurrence of
      any Lease Event of Default.

            (f) Lessor  shall  under no  circumstances  be required to build any
      improvements  or install any equipment on the Property,  make any repairs,
      replacements,  alterations or renewals of any nature or description to the
      Property, make any expenditure whatsoever in connection with this Lease or
      maintain  the  Property  in any  way.  Lessor  shall  not be  required  to
      maintain,  repair or rebuild all or any part of the  Property,  and Lessee
      waives the right to (i) require Lessor to maintain, repair, or rebuild all
      or any part of the Property, or (ii) make repairs at the expense of Lessor
      pursuant  to  any  Legal  Requirement,  Insurance  Requirement,  contract,
      agreement, covenant, condition or restriction at any time in effect.

            (g) Lessee shall, upon the expiration or earlier termination of this
      Lease, if Lessee shall not have exercised its Purchase Option with respect
      to the Property and purchased the Property,  surrender the Property (i) to
      Lessor  pursuant  to the  exercise  of the  applicable  remedies  upon the
      occurrence and continuance of a Lease Event of Default or (ii) pursuant to
      the second  paragraph of Section  22.1(a)  hereof,  to Lessor or the third
      party purchaser, as the case may be, subject to Lessee's obligations under
      this Lease (including  without limitation the obligations of Lessee at the
      time of such  surrender  under  Sections 9.1,  10.1(a)  through (f), 10.2,
      11.1, 12.1, 22.1 and 23.1).

      10.2 Environmental Inspection.

            If Lessee has not given notice of exercise of its Purchase Option on
the Expiration  Date pursuant to Section 20.1 or for whatever reason Lessee does
not elect (for itself or its  designee) to purchase  the Property in  accordance
with the terms of this Lease,  then not more than one hundred  eighty (180) days
nor less  than  sixty  (60) days  prior to the  Expiration  Date,  Lessee at its
expense  shall  cause to be  delivered  to Lessor a Phase I  environmental  site
assessment recently prepared (no more than thirty (30) days prior to the date of
delivery) by an independent  recognized  professional  reasonably  acceptable to
Lessor, and in form, scope and content reasonably satisfactory to Lessor.

                                   ARTICLE XI

      11.1 Modifications.

            (a) Lessee at its sole cost and  expense,  at any time and from time
      to time without the consent of Lessor may make modifications, alterations,
      renovations,  improvements  and  additions  to the  Property  or any  part
      thereof  and  substitutions  and  replacements   therefor   (collectively,
      "Modifications"), and Lessee shall make any and all


                                       12
<PAGE>

      Modifications  required  to be made  pursuant  to all Legal  Requirements,
      Insurance  Requirements and  manufacturer's  specifications and standards;
      provided,  that: (i) no Modification  shall  materially  impair the value,
      utility or useful life of the Property from that which existed immediately
      prior to such Modification  (assuming the Property has been maintained and
      repaired in accordance  with the  requirements  of this Lease);  (ii) each
      Modification  shall be done  expeditiously  and in a good and  workmanlike
      manner;  (iii) no  Modification  shall  adversely  affect  the  structural
      integrity  of the  Property;  provided,  however,  an  Improvement  may be
      demolished   provided  Lessee  (x)  constructs  another   Modification  in
      replacement  thereof,  (y) Lessee shall  finance the proposed  replacement
      Modification  outside of this lease  facility,  and (z) such  Modification
      shall not have a Material  Adverse Effect;  (iv) to the extent required by
      Section  14.2(a),  Lessee shall  maintain  builders' risk insurance at all
      times when a  Modification  is in  progress;  (v)  subject to the terms of
      Article XIII  relating to permitted  contests,  Lessee shall pay all costs
      and  expenses  and  discharge  any  Liens  arising  with  respect  to  any
      Modification; (vi) each Modification shall comply with the requirements of
      this Lease (including without limitation Sections 8.2 and 10.1); and (vii)
      no  Improvement  shall be demolished or otherwise  rendered  unfit for use
      unless Lessee shall finance the proposed replacement  Modification outside
      of this  lease  facility;  provided,  further,  Lessee  shall not make any
      Modification  (unless required by any Legal Requirement) to the extent any
      such  Modification,  individually  or in the  aggregate,  shall  or  could
      reasonably   be  expected  to  have  a  Material   Adverse   Effect.   All
      Modifications  shall  immediately  and without  further  action upon their
      incorporation  into the  Property  (1) become  property of Lessor,  (2) be
      subject  to this  Lease and (3) be titled  in the name of  Lessor.  Lessee
      shall not remove or attempt  to remove any  Modification  titled to Lessor
      from the Property, except as set forth in Section 10.1. Lessee, at its own
      cost and  expense,  will pay for the repairs of any damage to the Property
      caused by the removal or attempted removal of any Modification.

            (b) The construction  process provided for in the Agency  Agreement,
      the  subdivision  of the Property and sale of the Excess Land provided for
      in Section  8.13 of the  Participation  Agreement  and the  provisions  of
      Section  21.1 are  acknowledged  by  Lessor to be  consistent  with and in
      compliance with the terms and provisions of this Article XI.

            (c) At the request of Lessee,  Lessor  shall  execute and deliver to
      Lessee  such  authorizations  and other  documents  as may  reasonably  be
      required  in  connection  with  any  application  for  permits,  licenses,
      consents,  approvals,  entitlements and other authorizations  required for
      any such Modification,  and, if reasonably requested by Lessee, shall join
      as a party  therein;  provided,  that  all  costs  and  expenses  actually
      incurred by Lessor shall be payable by Lessee.


                                       13
<PAGE>

                                   ARTICLE XII

      12.1 Warranty of Title.

            (a) Lessee hereby acknowledges and shall cause title in the Property
      (including  without  limitation  all  Equipment,  all  Improvements,   all
      replacement components to the Property and all Modifications)  immediately
      and without  further  action to vest in and become the  property of Lessor
      and to be  subject  to the  terms of this  Lease  from and  after the date
      hereof or such date of  incorporation  into the  Property.  Lessee  agrees
      that, subject to the terms of Article XIII relating to permitted contests,
      Lessee shall not  directly or  indirectly  create or allow to remain,  and
      shall promptly  discharge at its sole cost and expense,  any Lien, defect,
      attachment,  levy,  title retention  agreement or claim upon the Property,
      any component thereof or any Modifications or any Lien,  attachment,  levy
      or claim with  respect to the Rent or with  respect to any amounts held by
      Lessor, the Agent or any Primary Financing Party pursuant to any Operative
      Agreement,  other than  Permitted  Liens and Lessor  Liens.  Lessee  shall
      promptly  notify Lessor in the event it receives  actual  knowledge that a
      Lien other than a Permitted  Lien or Lessor Lien has occurred with respect
      to the Property, the Rent or any other such amounts, and Lessee represents
      and warrants  to, and  covenants  with,  Lessor that the Liens in favor of
      Lessor and/or the Agent created by the Operative Agreements are (and until
      the Financing  Parties under the  Operative  Agreements  have been paid in
      full shall remain) first  priority  Liens subject only to Permitted  Liens
      and Lessor Liens. At all times subsequent to the Commencement Date, Lessee
      shall (i) cause a valid, perfected, first priority Lien on the Property to
      be in place in favor of the Agent (for the benefit of the Secured Parties)
      and (ii) file,  or cause to be filed,  all necessary  documents  under the
      applicable real property law and Article 9 of the Uniform  Commercial Code
      to perfect such title and Liens.

            (b)  Subject to Section  11.1(b),  nothing  contained  in this Lease
      shall be  construed  as  constituting  the consent or request of Lessor or
      Agent,  expressed or implied, to or for the performance by any contractor,
      mechanic,  laborer,  materialman,  supplier  or  vendor  of any  labor  or
      services or for the  furnishing  of any  materials  for any  construction,
      alteration,  addition,  repair or  demolition of or to the Property or any
      part thereof.  NOTICE IS HEREBY GIVEN THAT NEITHER LESSOR NOR THE AGENT IS
      AND NEITHER SHALL BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED
      OR TO BE  FURNISHED  TO LESSEE,  OR TO ANYONE  HOLDING THE PROPERTY OR ANY
      PART THEREOF  THROUGH OR UNDER  LESSEE,  AND THAT NO  MECHANIC'S  OR OTHER
      LIENS FOR ANY SUCH LABOR,  SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT
      THE INTEREST OF LESSOR OR THE AGENT IN AND TO THE PROPERTY.


                                       14
<PAGE>

                                  ARTICLE XIII

      13.1 Permitted Contests Other Than in Respect of Indemnities.

            Except to the  extent  otherwise  provided  for in Section 11 of the
Participation  Agreement,  Lessee,  on its  own  or on  Lessor's  behalf  but at
Lessee's sole cost and expense,  may contest,  by appropriate  administrative or
judicial proceedings conducted in good faith and with due diligence, the amount,
validity  or  application,  in  whole  or in  part,  of any  Legal  Requirement,
Imposition  or utility  charge  payable  pursuant  to Section 4.1 or 13.2 or any
Lien,  attachment,  levy,  encumbrance or encroachment  and Lessor agrees not to
pay,  settle or  otherwise  compromise  any such  item,  provided,  that (a) the
commencement and  continuation of such proceedings  shall suspend the collection
of any such contested amount from, and suspend the enforcement  thereof against,
the Property,  the Lessor, the Agent and each Primary Financing Party; (b) there
shall not be imposed a Lien (other than Permitted Liens and Lessor Liens) on the
Property  that would  subject any part of the Property or any Rent to a material
risk of being  sold,  forfeited,  lost or deferred  or a material  reduction  in
value; (c) at no time during the permitted  contest shall there be a risk of the
imposition  of criminal  liability or material  civil  liability on Lessor,  the
Agent or any Primary Financing Party for failure to comply therewith; and (d) in
the event that,  at any time,  there shall be a material  risk of extending  the
application  of such item beyond the end of the Term,  then Lessee shall deliver
to Lessor,  the Agent and each other  Financing  Party an Officer's  Certificate
certifying  as to the  matters  set forth in  clauses  (a),  (b) and (c) of this
Section 13.1. Lessor shall execute and deliver to Lessee such authorizations and
other  documents  as may  reasonably  be  required in  connection  with any such
contest and, if reasonably  requested by Lessee,  shall join as a party therein;
provided,  that all reasonable  costs and expenses  actually  incurred by Lessor
shall be payable by Lessee.

      13.2 Impositions,  Utility Charges,  Other Matters;  Compliance with Legal
           Requirements.

            Except with  respect to  Impositions,  Legal  Requirements,  utility
charges and such other matters  referenced in Section 13.1 which are the subject
of  ongoing  proceedings  contesting  the same in a manner  consistent  with the
requirements of Section 13.1,  Lessee shall cause (a) all  Impositions,  utility
charges,  Insurance  Requirements  and such  other  matters  to be timely  paid,
settled or compromised, as appropriate, with respect to the Property and (b) the
Property  to  comply  with  all  applicable  Legal  Requirements  and  Insurance
Requirements.

                                   ARTICLE XIV

      14.1 Public Liability and Workers' Compensation Insurance.

            Subject to Section 14.5,  during the Term for the  Property,  Lessee
shall procure and carry, at Lessee's sole cost and expense,  commercial  general
liability  and  umbrella  liability  insurance  for claims for injuries or death
sustained by persons or damage to property  while on the Property or  respecting
the Equipment and such other public liability  coverages as are then customarily
carried by similarly  situated  companies  conducting  business  similar to that


                                       15
<PAGE>

conducted by Lessee. Such insurance shall be on terms and in amounts that are no
less  favorable  than  insurance  maintained  by Lessee with  respect to similar
properties and equipment that it owns and are then carried by similarly situated
companies  conducting  business  similar to that conducted by Lessee,  and in no
event shall have a minimum combined single limit per occurrence coverage (i) for
commercial  general  liability of less than  $1,000,000.00 and (ii) for umbrella
liability of less than  $25,000,000.00.  The  policies  shall name Lessee as the
insured  and shall be  endorsed  to name  Lessor,  the  Agent  and each  Primary
Financing  Party as additional  insureds.  The policies shall also  specifically
provide that such policies  shall be considered  primary  insurance  which shall
apply to any loss or claim  arising in connection  with the Property  before any
contribution by any insurance which Lessor,  the Agent or any Primary  Financing
Party may have in force.  In the operation of the Property,  Lessee shall comply
with applicable  workers'  compensation  laws and protect Lessor,  the Agent and
each Primary Financing Party against any liability under such laws.

      14.2 Permanent Hazard and Other Insurance.

            (a) During the Term,  Lessee shall keep the Property insured against
      all risk of physical  loss or damage by fire and other risks covered under
      an all risk,  extended  coverage or "special form" policy of insurance and
      shall  maintain  builders'  risk  insurance  during  construction  of  any
      Improvements  or  Modifications  in each case in  amounts no less than the
      Property  Cost of the Property from time to time and on terms that (i) are
      no less favorable than insurance  covering other similar  properties owned
      by  Lessee  and (ii) are then  carried  by  similarly  situated  companies
      conducting  business  similar to that  conducted  by Lessee.  The policies
      shall name  Lessee as the insured and shall be endorsed to name Lessor and
      the Agent (on  behalf of the  Secured  Parties)  as  additional  insureds,
      mortgagees and loss payees,  as their interests may appear;  provided,  so
      long as no Lease  Event of Default  exists,  any and all  losses  shall be
      adjusted by Lessee,  and any loss  payable  under the  insurance  policies
      required  by this  Section  for  losses up to  $1,650,000  will be paid to
      Lessee.

            (b) If,  during the Term with  respect to the  Property  the area in
      which the Property is located is designated a "flood-prone"  area pursuant
      to the  Flood  Disaster  Protection  Act of  1973,  or any  amendments  or
      supplements  thereto or is in a zone  designated A or V, then Lessee shall
      comply with the National Flood Insurance Program as set forth in the Flood
      Disaster  Protection  Act of 1973.  In addition,  Lessee will fully comply
      with the  requirements of the National Flood Insurance Act of 1968 and the
      Flood Disaster Protection Act of 1973, as each may be amended from time to
      time, and with any other Legal Requirement,  concerning flood insurance to
      the extent that it applies to the Property. During the Term, Lessee shall,
      in the operation and use of the Property,  maintain workers'  compensation
      insurance  consistent  with that carried by similarly  situated  companies
      conducting  business  similar to that  conducted by Lessee and  containing
      minimum liability limits of no less than $100,000.


                                       16
<PAGE>

      14.3 Coverage.

            (a) As of the date of this Lease and annually  thereafter during the
      Term,  Lessee shall  furnish the Agent (on behalf of Lessor,  each Primary
      Financing Party and the other  beneficiaries  of such insurance  coverage)
      with certificates, in form and substance reasonably satisfactory to Agent,
      prepared  by the  insurers  or  insurance  broker  of Lessee  showing  the
      insurance  required under  Sections 14.1 and 14.2 to be in effect,  naming
      (to the extent of their respective  interests)  Lessor, the Agent and each
      Primary  Financing Party as additional  insureds (in the case of liability
      insurance) and mortgagees and loss payees (in the case of property/hazard,
      builders' risk and flood insurance) and evidencing the other  requirements
      of this Article XIV. All such  insurance  shall be at the cost and expense
      of Lessee  (except  that such costs and expenses  during the  Construction
      Period shall be paid in  accordance  with the  provisions of Section 14.5)
      and  provided  by  nationally  recognized,   financially  sound  insurance
      companies  having an A/X or better rating by A.M. Best's Key Rating Guide,
      or such other insurance  companies  acceptable to the Agent.  Lessee shall
      cause such  certificates to include a provision for ten (10) days' advance
      written  notice by the  insurer to the Agent (on  behalf of  Lessor,  each
      Primary  Financing  Party and the other  beneficiaries  of such  insurance
      coverage)  in the event of  cancellation  or material  alteration  of such
      insurance.

            (b) Lessee agrees that the insurance policy or policies  required by
      Sections  14.1,  14.2(a) and 14.2(b) shall include an  appropriate  clause
      pursuant  to  which  any such  policy  shall  provide  that it will not be
      invalidated  with  respect to the rights of the  Lessor,  the Agent or any
      Primary  Financing Party should Lessee or any Contractor,  as the case may
      be, have waived any or all rights of recovery against any party for losses
      covered by such policy or due to any breach of  warranty,  fraud,  action,
      inaction or  misrepresentation by Lessee or any Person acting on behalf of
      Lessee.  Lessee hereby waives any and all such rights against Lessor,  the
      Agent and each Primary  Financing  Party to the extent of payments made to
      any such Person under any such policy.

            (c)  Neither  Lessor  nor  Lessee  shall  carry  separate  insurance
      concurrent in kind or form or  contributing  in the event of loss with any
      insurance  required  under this Article XIV,  except that Lessor may carry
      separate liability insurance at Lessor's sole cost so long as (i) Lessee's
      insurance is designated as primary and in no event excess or  contributory
      to any  insurance  Lessor may have in force  which  would  apply to a loss
      covered under Lessee's policy and (ii) each such insurance policy will not
      cause Lessee's  insurance required under this Article XIV to be subject to
      a coinsurance exception of any kind.

            (d)  Lessee  shall  pay as  they  become  due all  premiums  for the
      insurance  required  by Section  14.1 and  Section  14.2,  shall  renew or
      replace  each policy  prior to the  expiration  date  thereof or otherwise
      maintain  the  coverage  required  by such  Sections  without any lapse in
      coverage.


                                       17
<PAGE>

      14.4 Policies.

            Except as limited during the Construction Period pursuant to Section
      2.6(g) of the Agency Agreement, all insurance required by this Article XIV
      may be provided under (i) an individual policy covering the Property, (ii)
      a blanket policy or policies which includes other liabilities,  properties
      and  locations of Lessee,  (iii) a plan of  self-insurance,  provided that
      Lessee  shall not be permitted  to  self-insure  with respect to liability
      insurance,  property insurance and flood insurance respecting the Property
      unless  the  Lessee  shall  maintain  a Debt  Rating of at least Baa2 from
      Moody's and at least BBB from S&P, (iv) an increased coverage or "umbrella
      policy"  provided  and  utilized  to  increase  the  coverage  provided by
      individual or blanket  policies in lower  amounts  (provided the aggregate
      limits of liability  shall comply with the provisions of this Article XIV)
      or (v) a combination of any of the foregoing insurance programs.

      14.5 Insurance Coverage During Construction Period.

            During the  Construction  Period,  Lessee shall,  in its capacity as
      Lessee  hereunder  and  as  Construction  Agent  pursuant  to  the  Agency
      Agreement,  procure the  insurance  policies  and  coverages  set forth in
      Sections  14.1,  14.2 and 14.3  above.  During  the  Construction  Period,
      premiums for such policies and coverage shall be paid with the proceeds of
      one or more  Advances  made  in  accordance  with  the  provisions  of the
      Operative  Agreements  and upon  satisfaction  or  express  waiver  of the
      conditions  applicable to such Advance, and such amounts shall be added to
      the Property Cost respecting the Property.

                                   ARTICLE XV

      15.1 Casualty and Condemnation.

            (a)  Subject  to the  provisions  of the Agency  Agreement  and this
      Article XV and Article XVI (in the event Lessee delivers,  or is obligated
      to deliver or is deemed to have  delivered,  a  Termination  Notice),  and
      prior to the  occurrence  and  continuation  of a Lease Default or a Lease
      Event of Default,  Lessee shall be entitled to receive (and Lessor  hereby
      irrevocably  assigns to Lessee all of Lessor's  right,  title and interest
      in) any condemnation proceeds,  award,  compensation or insurance proceeds
      under  Sections  14.2(a) or 14.2(b)  hereof to which  Lessee or Lessor may
      become  entitled by reason of their  respective  interests in the Property
      (i) if all or a portion of the  Property is damaged or  destroyed in whole
      or in part by a Casualty or (ii) if the use, access,  occupancy,  easement
      rights or title to the  Property  or any part  thereof is the subject of a
      Condemnation;  provided,  however,  if a Default or Event of Default shall
      have occurred and be continuing or if such condemnation  proceeds,  award,
      compensation  or insurance  proceeds  shall exceed  $1,650,000,  then such
      condemnation proceeds,  award, compensation or insurance proceeds shall be
      paid directly to Lessor or, if received by Lessee,  shall be held in trust
      for  Lessor,  and  shall be paid  over by  Lessee  to  Lessor  and held in
      accordance  with the terms of this paragraph (a).  Except as expressly set
      forth in this Section 15.1, all such amounts in excess of $1,650,000  held
      by Lessor hereunder on


                                       18
<PAGE>

      account of any  condemnation  proceeds,  award,  compensation or insurance
      proceeds  either paid directly to Lessor or turned over to Lessor shall be
      held as security for the performance of Lessee's obligations hereunder and
      under the other Operative Agreements.  When all such obligations of Lessee
      with respect to such matters  (and all other  obligations  of Lessee which
      should have been satisfied pursuant to the Operative Agreements as of such
      date) have been  satisfied  or  expressly  waived,  all amounts so held by
      Lessor  shall be paid over to Lessee,  except to the extent  such  amounts
      have been previously disbursed pursuant to Section 15.1(e).

            (b)  Lessee  may appear in any  proceeding  or action to  negotiate,
      prosecute,  adjust or appeal  any  claim  for any  condemnation  proceeds,
      award,  compensation or insurance  payment on account of any such Casualty
      or Condemnation and shall pay all expenses thereof. At Lessee's reasonable
      request,  Lessor and the Agent shall  participate in any such  proceeding,
      action,  negotiation,   prosecution  or  adjustment;  provided,  that  all
      reasonable costs and expenses  actually incurred by Lessor or the Agent in
      connection  therewith  shall be payable by the  Lessee.  Lessor and Lessee
      agree that this Lease shall control the rights of Lessor and Lessee in and
      to any  such  condemnation  proceeds,  award,  compensation  or  insurance
      payment.  So long as no Lease Default or Lease Event of Default shall have
      occurred  and be  continuing,  Lessor  shall not  agree to or  accept  any
      compromise  relating to any such  proceeding  or action  without  Lessee's
      prior written approval.

            (c) If Lessee shall receive notice of a Casualty where damage to the
      Improvements  is  estimated  to equal or exceed ten  percent  (10%) of the
      Property Cost of the Property,  Lessee shall give notice thereof to Lessor
      promptly  after  Lessee's  receipt  of such  notice.  In the event  such a
      Casualty occurs (regardless of whether Lessee gives notice thereof),  then
      Lessee shall be deemed to have  delivered a  Termination  Notice to Lessor
      and the  provisions  of  Sections  16.1 and 16.2  shall  apply;  provided,
      however, if no Lease Default or Lease Event of Default shall have occurred
      and be  continuing  and if the cost to  repair,  restore  or  replace  the
      damaged  portion of the  Improvements is less than thirty percent (30%) of
      the Property Cost of the Property and Lessee  delivers  within thirty (30)
      days of such Casualty  written notice to Lessor that it intends to repair,
      restore or replace the portion of the Property  affected by such Casualty,
      then  Lessee may repair,  restore or replace  the portion of the  Property
      affected  by such  Casualty  pursuant to the terms and  conditions  of the
      Operative Agreements, including without limitation Sections 10.1, 11.1 and
      15.1 of this Lease and proceeds of any  insurance  policies held by Lessor
      pursuant to this Section 15.1 shall be made  available for  Restoration in
      accordance with Section 15.1(e) hereof.  If Lessee shall receive notice of
      a Condemnation of the Property or any portion thereof or interest  therein
      where the fair market value of the Property  shall be  diminished  by more
      than ten  percent  (10%),  Lessee  shall  give  notice  thereof  to Lessor
      promptly  after  Lessee's  receipt  of such  notice.  In the event  such a
      Condemnation  occurs  (regardless of whether Lessee gives notice thereof),
      then  Lessee  shall be deemed to have  delivered a  Termination  Notice to
      Lessor and the provisions of Sections 16.1 and 16.2 shall apply.


                                       19
<PAGE>

            (d) In the event of a  Casualty  or a  Condemnation  (regardless  of
      whether  notice  thereof must be given  pursuant to paragraph  (c)),  this
      Lease shall  terminate  with  respect to the Property in  accordance  with
      Section  16.1 if Lessee,  within  thirty (30) days after such  occurrence,
      delivers to Lessor a notice to such effect.

            (e) (i) If, pursuant to this Section 15.1, Lessee does not deliver a
      notice to  terminate  this  Lease  pursuant  to clause (d) above or is not
      required to deliver a notice to  terminate  this Lease  pursuant to clause
      (c)  above,  then this  Lease  shall  continue  in full  force and  effect
      following a Casualty or Condemnation with respect to the Property,  Lessee
      shall,  at  its  sole  cost  and  expense  (subject  to  reimbursement  in
      accordance  with this Section  15.1)  promptly and  diligently  repair any
      damage  to the  Property  caused  by  such  Casualty  or  Condemnation  in
      conformity   with   the   requirements   of   Sections   10.1   and   11.1
      ("Restoration"),   using  the  as-built   Plans  and   Specifications   or
      manufacturer's  specifications for the applicable Improvements,  Equipment
      or other  components  of the  Property  (as modified to give effect to any
      subsequent Modifications or for such Modifications to be made as a part of
      such  Restoration  as may be permitted  under  Section  11.1  hereof,  any
      previous  Condemnation  affecting the Property,  and all applicable  Legal
      Requirements), so as to restore the Property to the same or a greater fair
      market value, and such that the Property shall after such Restoration have
      the same or greater useful life and utility as existed  immediately  prior
      to such  Casualty or  Condemnation  (assuming all  maintenance  and repair
      standards have been satisfied). In such event, title to the Property shall
      remain with Lessor.

                  (ii) If the award,  compensation  or  proceeds  received by or
      turned over to Lessor,  in accordance with Section 15.1(a),  in respect of
      any  Casualty  or  Condemnation  (collectively,  as used  in this  Section
      15.1(e),  "proceeds"),  and if a Lease  Default or Lease  Event of Default
      shall  not  have  occurred  and be  continuing,  then  Lessor  shall  make
      available for expenses related to the Restoration of the Property all such
      proceeds it receives  pursuant  to the terms of this Lease  provided  that
      such  Restoration  shall be accomplished as provided in Section 15.1(g) so
      long as such Restoration can, in the reasonable  judgment of the Agent, be
      completed  by the  earlier  of (A) two (2)  years  after  the  date of the
      Casualty or  Condemnation  or (B) the date one hundred  eighty  (180) days
      prior to the  Expiration  Date,  and in such a manner so that the Property
      will have a value at least  equal to its value  prior to the  Casualty  or
      Condemnation.

                  (iii) Any such proceeds held by Lessor for  Restoration  shall
      be made  available by Lessor (or at Lessor's  election by a disbursing  or
      escrow  agent who shall be selected by Lessor and whose fees shall be paid
      by  Lessee)  from  time  to  time  as  requested  by  Lessee,  but no more
      frequently than once a month as the Restoration progresses,  upon delivery
      to the Agent of the following: (i) evidence reasonably satisfactory to the
      Agent of the  estimated  cost of  Restoration;  (ii) funds (or  assurances
      reasonably  satisfactory  to the  Agent  that such  funds  are  available)
      sufficient  in addition to such proceeds to complete and fully pay for the
      Restoration;  and (iii) such  architect's  certificates,  waivers of lien,
      contractor's  sworn  statements,  title insurance  endorsements,  plats of
      survey and such other  evidence of cost,  payment and  performance  as the
      Agent may  reasonably  require and  approve.  No payment made prior to the
      final  completion of


                                       20
<PAGE>

      Restoration  shall exceed  ninety  percent  (90%) of the value of the work
      performed  from time to time,  as such value  shall be  determined  by the
      Agent in its reasonable  judgment.  Prior to commencement of the work, and
      from time to time thereafter,  if so requested by the Agent,  Lessee shall
      deposit  with Lessor an amount of funds in excess of the  proceeds  which,
      together with such proceeds,  shall at all times be at least sufficient in
      the reasonable  judgment of the Agent to pay the entire unpaid cost of the
      Restoration,  free and clear of all Liens or claims of Lien.  Any  surplus
      which may remain out of the proceeds  held by Lessor after  payment of all
      costs of the Restoration shall be paid to Lessee.  At Lessee's  reasonable
      request,  Lessor will deposit any proceeds held by it for Restoration into
      an interest-bearing  account which is backed directly or indirectly by the
      full faith and credit of the United  States  government  over which Lessor
      has sole  possession,  authority  and control,  and otherwise on terms and
      conditions reasonably satisfactory to the Agent.

                  (f) In no  event  shall  a  Casualty  or  Condemnation  affect
      Lessee's obligations to pay Rent pursuant to Article III.

                  (g)  Notwithstanding  anything  to the  contrary  set forth in
      Section  15.1(a) or Section  15.1(e),  if during the Basic Term a Casualty
      occurs  with  respect  to the  Property  or  Lessee  receives  notice of a
      Condemnation with respect to the Property,  and following such Casualty or
      Condemnation,  the Property  cannot  reasonably  be restored,  repaired or
      replaced on or before the day one hundred  eighty  (180) days prior to the
      Expiration Date to the same or a greater fair market value,  and such that
      the  Property  shall  after such  repair or  restoration  have the same or
      greater  useful  life and  utility  as existed  immediately  prior to such
      Casualty or Condemnation  (assuming all  maintenance and repair  standards
      have been  satisfied) or on or before such day the Property is not in fact
      so  restored,  repaired  or  replaced,  then  Lessee  shall be required to
      exercise  its  Purchase  Option for the  Property on the next Payment Date
      occurring   not  less  than  sixty  (60)  days  after  such   Casualty  or
      Condemnation  (notwithstanding  the limits on such  exercise  contained in
      Section 20.2) and pay Lessor the Termination Value for the Property. After
      the  payment  by Lessee of the  Termination  Value for the  Property,  any
      Excess Proceeds shall be paid to the Lessee.

      15.2 Environmental Matters.

            (a)  Promptly  upon  Lessee's  actual  knowledge  of the presence of
Hazardous  Substances  in any  portion of the  Property  in  concentrations  and
conditions  that  constitute  an  Environmental  Violation  and  which,  in  the
reasonable  opinion  of  Lessee,  the cost to  undertake  any  legally  required
response,  clean up,  remedial or other action will or might result in a cost to
Lessee of more than  $100,000,  Lessee  shall  notify  Lessor in writing of such
condition.  In the event of any Environmental  Violation  (regardless of whether
notice  thereof must be given),  Lessee  shall,  not later than thirty (30) days
after  Lessee has  actual  knowledge  of such  Environmental  Violation,  either
deliver to Lessor a Termination  Notice with respect to the Property pursuant to
Section 16.1,  if  applicable,  or, at Lessee's sole cost and expense,  promptly
during such  thirty (30) day period  deliver to Lessor  notice of  intention  to
remediate,  and thereafter  promptly and  diligently  undertake and complete any
response, clean up, remedial or


                                       21
<PAGE>

other action (including  without limitation the pursuit by Lessee of appropriate
action against any off-site or third party source for  contamination)  necessary
to remove,  cleanup or remediate the Environmental  Violation in compliance with
all  Environmental  Laws.  Any such  undertaking  shall be timely  completed  in
accordance  with  prudent  industry  standards.  If  Lessee  does not  deliver a
Termination Notice with respect to the Property pursuant to Section 16.1, Lessee
shall,  upon completion of remedial action by Lessee,  cause to be prepared by a
reputable  environmental  consultant  reasonably  acceptable  to  Agent a report
describing the  Environmental  Violation and the actions taken by Lessee (or its
agents) in  response to such  Environmental  Violation,  and a statement  by the
consultant that the Environmental Violation has been remedied in compliance with
applicable  Environmental  Law.  Not less than sixty (60) days and not more than
one  hundred  eighty  (180) days prior to any time that  Lessee  elects to cease
operations with respect to the Property or to re-market the Property pursuant to
the Sale  Option  pursuant  to  Section  20.1  hereof or  pursuant  to any other
provision of any  Operative  Agreement,  Lessee at its expense shall cause to be
delivered to Agent a Phase I  environmental  site  assessment (or an update of a
prior Phase I environmental  site assessment)  respecting the Property  recently
prepared  (no more than  thirty (30) days prior to the date of  delivery)  by an
independent  recognized  professional  acceptable  to  Agent  in its  reasonable
discretion  and  in  form,  scope  and  content  satisfactory  to  Agent  in its
reasonable  discretion.  Subject to Section 5.4(b) of the Agency Agreement,  but
notwithstanding any other provision of any Operative Agreement,  if Lessee fails
to comply with the foregoing obligation regarding the Phase I environmental site
assessment,  Lessee  shall  be  obligated  to  purchase  the  Property  for  its
Termination  Value and shall not be permitted to exercise (and Lessor shall have
no  obligation  to honor any such  exercise)  any  rights  under  any  Operative
Agreement  regarding a sale of the Property to a Person other than Lessee or any
Affiliate or other designee of Lessee.

            (b) Notwithstanding any provision herein to the contrary, the Lessor
acknowledges  and agrees  that the  enforcement  by the  Lessee of the  seller's
obligations   under  the  Purchase   Agreement  with  respect  to  the  Existing
Environmental Matters shall be deemed to satisfy Lessee's obligations under this
Section 15.2(a) above with respect to such Existing Environmental Matters.

      15.3 Notice of Environmental Matters.

            Promptly,  but in any event  within  fifteen (15) days from the date
Lessee has actual  knowledge  thereof,  Lessee shall  provide to Lessor  written
notice of any pending or threatened  claim,  action or proceeding  involving any
Environmental Law or any Release on or in connection with the Property. All such
notices shall describe in reasonable  detail the nature of the claim,  action or
proceeding and Lessee's  proposed response  thereto.  In addition,  Lessee shall
provide  to  Lessor,  within ten (10) days of  receipt,  copies of all  material
written   communications  with  any  Governmental   Authority  relating  to  any
Environmental  Law in connection  with the Property.  Lessee shall also promptly
provide such detailed reports of any such material  environmental  claims as may
reasonably be requested by Lessor.


                                       22
<PAGE>

                                   ARTICLE XVI

      16.1 Termination Upon Certain Events.

            If Lessee has  delivered,  or is deemed to have  delivered,  written
notice of a termination of this Lease to Lessor in the form described in Section
16.2(a) (a "Termination  Notice") pursuant to the provisions of this Lease, then
following the applicable Casualty, Condemnation or Environmental Violation, this
Lease shall terminate upon the payment in full of the Termination  Value for the
Property  in  accordance  with the  terms  of the  Operative  Agreements  on the
applicable Termination Date.

      16.2 Procedures.

            (a) A Termination Notice shall contain: (i) notice of termination of
      this Lease on a Payment Date not more than sixty (60) days after  Lessor's
      receipt of such Termination  Notice (the "Termination  Date");  and (ii) a
      binding and irrevocable  agreement of Lessee to pay the Termination  Value
      for the Property and purchase the Property on such Termination Date.

            (b) On  the  Termination  Date,  Lessee  shall  pay  to  Lessor  the
      Termination  Value for the Property,  and Lessor shall convey the Property
      or  the  remaining  portion  thereof,  if  any,  to  Lessee  (or  Lessee's
      designee), all in accordance with Section 20.2.

                                  ARTICLE XVII

      17.1 Lease Events of Default.

            If any one (1) or more of the following  events (each a "Lease Event
of Default") shall occur and be continuing:

            (a) Lessee  shall fail to make payment of (i) any Basic Rent (except
      as set forth in clause  (ii)) or any fees  within five (5)  Business  Days
      after the same has become due and payable or (ii) any Termination Value or
      Cash Collateral Rent, on the date any such payment is due and payable,  or
      any payment of Basic Rent or Supplemental  Rent due on the due date of any
      payment of Termination Value, or any amount due on the Expiration Date;

            (b) Lessee  shall  fail to make  payment  of any  Supplemental  Rent
      (other than Supplemental  Rent referred to in Section  17.1(a)(ii)) or the
      Construction  Agent shall fail to make any payment of any amount under any
      Operative  Agreement  which has become due and  payable,  in either  case,
      within thirty (30) days after receipt of written  notice that such payment
      is due and payable;


                                       23
<PAGE>

            (c) Lessee  shall fail to maintain  insurance as required by Article
      XIV of this Lease or to deliver  any  requisite  annual  certificate  with
      respect  thereto  within thirty (30) days of the date such  certificate is
      due under the terms hereof;

            (d) (i) Lessee  shall fail to observe  or perform  any  covenant  or
      agreement  contained  in  Sections  8.3A.2(i),   8.2A.3  or  8.3B  of  the
      Participation  Agreement,  or (ii) Lessee shall fail to observe or perform
      any term, covenant,  obligation or condition of Lessee under this Lease or
      any other Operative  Agreement to which Lessee is a party other than those
      set forth in  Sections  17.1(a),  (b),  (c),  or (d)(i)  hereof,  and such
      failure  shall  continue for thirty (30) days after the Lessee  either has
      received  written notice thereof or a Responsible  Officer of Lessee shall
      have actual knowledge thereof;  provided,  that in the case of this clause
      (ii),  if such failure is not capable of remedy by the payment of money or
      otherwise  within such  thirty  (30) day period but may be  remedied  with
      further diligence and if the Lessee has and continues to pursue diligently
      such remedy,  then the Lessee shall be granted  additional  time to pursue
      such remedy;  provided,  further, in no event shall such additional period
      exceed  ninety  (90)  days or (iii)  any  representation  or  warranty  or
      statement  of fact made by Lessee  set forth in this Lease or in any other
      Operative Agreement or in any document entered into in connection herewith
      or  therewith  or in any  document,  certificate  or  financial  or  other
      statement  delivered in connection herewith or therewith shall be false or
      inaccurate in any material way when made;

            (e) An Agency  Agreement Event of Default shall have occurred and be
      continuing and shall not have been expressly waived;

            (f)  Any  obligation  of the  Lessee  or  any  of  its  Subsidiaries
      representing a Material  Subsidiary  Group (other than its  obligations in
      respect of the Operative  Agreements),  whether as  principal,  guarantor,
      surety  or  other  obligor,  for the  payment  of any  Indebtedness  in an
      aggregate Consolidated principal amount exceeding $25,000,000 (i) shall be
      declared to be due and payable,  or shall be required to be prepaid  other
      than pursuant to a regularly  scheduled  prepayment or required prepayment
      (unless  such  required  prepayment  results  from a  default  or event of
      default  thereunder),  prior to the expressed  maturity  thereof,  or (ii)
      shall not be paid when due or within  any  grace  period  for the  payment
      thereof;

            (g) The liquidation or dissolution of the Lessee,  or the suspension
      of the business of the Lessee,  or the filing by the Lessee of a voluntary
      petition or an answer seeking reorganization,  arrangement,  receivership,
      readjustment   of  its  debts,   insolvency,   liquidation,   dissolution,
      winding-up or for any other relief under the Bankruptcy Code, or under any
      other insolvency act or law, state or federal,  now or hereafter existing,
      or any other action of the Lessee  indicating its consent to,  approval of
      or  acquiescence  in, any such petition or proceeding;  the application by
      the Lessee for, or the  appointment  by,  consent or  acquiescence  of the
      Lessee of a receiver,  a trustee or a custodian of the Lessee for all or a
      substantial part of its property;  the making by the Lessee of any general
      assignment  for the benefit of  creditors;  the inability of the Lessee or
      the  admission by the Lessee in writing of its  inability to pay its debts
      as they mature or the Lessee is generally


                                       24
<PAGE>

      not paying its debts and other  financial  obligations  as they become due
      and payable; or the Lessee taking any corporate action to authorize any of
      the foregoing;

            (h) The  filing of an  involuntary  petition  against  the Lessee in
      bankruptcy or seeking  reorganization,  arrangement,  readjustment  of its
      debts, insolvency,  liquidation,  dissolution, winding-up or for any other
      relief under the  Bankruptcy  Code, or under any other  insolvency  act or
      law,  state or federal,  now or  hereafter  existing;  or the  involuntary
      appointment of a receiver,  a trustee or a custodian of the Lessee for all
      or a  substantial  part of its  property;  or the issuance of a warrant of
      attachment,  execution or similar process against any substantial  part of
      the property of the Lessee,  and the continuance of any of such events for
      sixty (60) days undismissed or undischarged;

            (i) [Reserved];

            (j) The entering of any order in any proceedings  against the Lessee
      or any Subsidiary of the Lessee decreeing the dissolution,  divestiture or
      split-up  of the  Lessee or any  Subsidiary  of the  Lessee and such order
      remains in effect for more than sixty (60) days;

            (k) [Reserved];

            (l) [Reserved];

            (m) Judgments or decrees against one or more of the Lessee or any of
      its Subsidiaries  representing a Material Subsidiary Group in an aggregate
      Consolidated amount exceeding  $25,000,000 shall be rendered by a court of
      competent   jurisdiction   and   remain   unpaid,   unstayed   on  appeal,
      undischarged,  unbonded or undismissed  for a period of 30 days;  provided
      that any such judgment or order shall not give rise to an Event of Default
      under  this  paragraph  (m) if and for so long as (i) the  amount  of such
      judgment  or order is covered by a valid and binding  policy of  insurance
      between  the  defendant  and  the  insurer  covering  full  payment  (less
      deductibles  and/or  self-insured  retention  not  to  exceed  $1,000,000)
      thereof and (ii) such  insurer  has been  notified,  and has not  disputed
      coverage, of the amount of such judgment or order;

            (n) (i) any Termination  Event shall occur with respect to which the
      Lessee or any of its  Subsidiaries  shall have been assessed any liability
      in an aggregate  Consolidated  amount exceeding  $25,000,000  which amount
      shall remain unpaid for a period of 30 days, (ii) any Accumulated  Funding
      Deficiency in an aggregate Consolidated amount exceeding $25,000,000 shall
      exist  with  respect  to any  Pension  Plan and such  Accumulated  Funding
      Deficiency shall not have been eliminated within a period of 30 days after
      it shall  have been  determined,  (iii)  any  Person  shall  engage in any
      Prohibited  Transaction  involving  any  Employee  Benefit  Plan and, as a
      result  thereof,  the  Lessee or any of its  Subsidiaries  shall have been
      assessed  an  excise  tax  penalty  in an  aggregate  Consolidated  amount
      exceeding  $25,000,000 which amount shall remain unpaid for a period of 30
      days;  unless  and to the  extent  only that (a) such  Termination  Event,
      Accumulated   Funding  Deficiency  or  Prohibited   Transaction  is  being
      contested by


                                       25
<PAGE>

      appropriate  proceedings in good faith by the Lessee or such Subsidiary or
      Subsidiaries and (b) the amount of the Lien provided under Section 4068 of
      ERISA, if such Lien shall arise as a result of any of the foregoing, would
      not, if  subtracted  from  Consolidated  Tangible  Net Worth,  result in a
      violation of Section 8.3B.7 of the Participation Agreement;

            (o)  Except  as  permitted   pursuant  to  Section   8.3B.1  of  the
      Participation  Agreement,  any  Person  or two or more  Persons  acting in
      concert shall have acquired  beneficial  ownership  (within the meaning of
      Rule  13d-3 of the  Securities  and  Exchange  Act of 1934),  directly  or
      indirectly, of Voting Stock of the Lessee (or other securities convertible
      into such Voting Stock)  representing  20% or more of the combined  voting
      power of all Voting  Stock of the Lessee;  or (ii) during any period of up
      to 24  consecutive  months,  commencing  before or after the Closing Date,
      individuals who at the beginning of such 24-month period were directors of
      the Lessee shall cease to  constitute a majority of the board of directors
      of the Lessee and the replacements thereof shall not have been approved by
      a vote of at least a majority  of the  members  of the board of  directors
      then still in office who either were  members of the board of directors at
      the beginning of such period or whose  election as members of the board of
      directors was previously so approved;

            (p) Any  Operative  Agreement  to which the Lessee is a party  shall
      cease to be in full force and effect;

then,  in any such  event,  Lessor  may,  in  addition  to the other  rights and
remedies  provided for in this Article XVII and in Section 18.1,  terminate this
Lease by  giving  Lessee  five  (5)  days  written  notice  of such  termination
(provided,  notwithstanding  the  foregoing,  this  Lease  shall be deemed to be
automatically  terminated  without the giving of notice upon the occurrence of a
Lease Event of Default under Sections 17.1(g), (h) or (j)), and this Lease shall
terminate, and all rights of Lessee under this Lease (other than Lessee's rights
to enforce  Lessor's  obligation  to convey  title to the  Property to Lessee in
accordance  with the  provisions  of Sections  17.6 and/or  17.11)  shall cease.
Lessee shall, to the fullest extent  permitted by law, pay as Supplemental  Rent
all costs and expenses incurred by or on behalf of Lessor or any other Financing
Party,  including without limitation reasonable fees and expenses of counsel, as
a result of any Lease Event of Default hereunder.

      A POWER OF SALE HAS BEEN  GRANTED  IN THIS  LEASE AS  SUPPLEMENTED  BY THE
LEASE SUPPLEMENT. A POWER OF SALE MAY ALLOW LESSOR TO TAKE THE PROPERTY AND SELL
THE PROPERTY WITHOUT GOING TO COURT IN A FORECLOSURE  ACTION UPON THE OCCURRENCE
AND CONTINUANCE OF A LEASE EVENT OF DEFAULT.

      17.2 Surrender of Possession.

            If  a  Lease  Event  of  Default  shall  have  occurred   after  the
Commencement  Date and be  continuing,  and whether or not this Lease shall have
been terminated  pursuant to Section 17.1,  Lessee shall,  upon thirty (30) days
written notice, surrender to Lessor possession of


                                       26
<PAGE>

the Property.  Lessor may enter upon and repossess the Property by such means as
are  available at law or in equity,  and may remove Lessee and all other Persons
and any and all personal  property and Lessee's  equipment  and  personalty  and
severable  Modifications  from the  Property.  Lessor shall have no liability by
reason of any such entry,  repossession or removal  performed in accordance with
applicable  law.  Upon the written  demand of Lessor,  Lessee  shall  return the
Property  promptly  to  Lessor,  in the manner and  condition  required  by, and
otherwise in accordance with the provisions of, Section 22.1(c) hereof.

      17.3 Reletting.

            If  a  Lease  Event  of  Default  shall  have  occurred   after  the
Commencement  Date and be  continuing,  and whether or not this Lease shall have
been  terminated  pursuant to Section  17.1,  Lessor may,  but shall be under no
obligation  to, relet any or all of the  Property,  for the account of Lessee or
otherwise,  for such term or terms (which may be greater or less than the period
which  would  otherwise  have  constituted  the balance of the Term) and on such
conditions (which may include concessions or free rent) and for such purposes as
Lessor  may  determine,  and Lessor may  collect,  receive  and retain the rents
resulting  from such  reletting.  Lessor  shall not be liable to Lessee  for any
failure to relet the  Property  or for any  failure to collect any rent due upon
such reletting.

      17.4 Damages.

            Neither  (a)  the  termination  of  this  Lease  as to the  Property
pursuant to Section 17.1;  (b) the  repossession  of the  Property;  nor (c) the
failure of Lessor to relet the  Property,  the  reletting  of all or any portion
thereof,  nor the  failure of Lessor to collect or receive  any rentals due upon
any such  reletting,  shall relieve Lessee of its  liabilities  and  obligations
hereunder,  all of which shall  survive any such  termination,  repossession  or
reletting.  If any  Lease  Event  of  Default  shall  have  occurred  after  the
Commencement  Date and be continuing  and this Lease is  terminated  pursuant to
Section 17.1,  Lessee shall  forthwith pay to Lessor all Rent and other sums due
and payable  hereunder  to and  including  without  limitation  the date of such
termination.  In the event this Lease is not terminated  pursuant hereto, on the
days on which the Basic Rent or  Supplemental  Rent, as applicable,  are payable
under this Lease or would have been  payable  under this Lease and until the end
of the Term hereof Lessee shall pay Lessor,  as current  liquidated  damages (it
being agreed that it would be impossible accurately to determine actual damages)
an amount equal to the Basic Rent and  Supplemental  Rent that are payable under
this Lease or would have been payable by Lessee  hereunder if this Lease had not
been terminated  pursuant to Section 17.1, less the net proceeds,  if any, which
are  actually  received by Lessor with  respect to the period in question of any
reletting  of the  Property  or any portion  thereof;  provided,  that  Lessee's
obligation  to make  payments  of Basic  Rent and  Supplemental  Rent under this
Section 17.4 shall  continue  only so long as Lessor shall not have received the
amounts  specified  in  Section  17.6.  In  calculating  the  amount of such net
proceeds from  reletting,  there shall be deducted all of Lessor's,  the Agent's
and any Primary Financing Party's reasonable  expenses in connection  therewith,
including without limitation repossession costs, brokerage or sales commissions,
fees and expenses for counsel and any necessary  repair or alteration  costs and
expenses  incurred  in  preparation  for such  reletting.  To the extent  Lessor


                                       27
<PAGE>

receives  any damages  pursuant to this  Section  17.4,  such  amounts  shall be
regarded as amounts paid on account of Rent.  Lessee  specifically  acknowledges
and agrees that its  obligations  under this  Section 17.4 shall be absolute and
unconditional  under  any  and  all  circumstances  and  shall  be  paid  and/or
performed,  as the case  may be,  without  notice  or  demand  and  without  any
abatement,  reduction,  diminution,  setoff, defense, counterclaim or recoupment
whatsoever.

      17.5 Power of Sale.

            (a) Without  limiting  any other  remedies  set forth in this Lease.
Lessor and Lessee  agree that Lessee has  granted,  pursuant  to Section  7.1(b)
hereof and the Lease Supplement, a Lien against the Property WITH POWER OF SALE,
and that,  upon the occurrence and during the  continuance of any Lease Event of
Default,  Lessor shall have the power and authority,  to the extent  provided by
law,  after  prior  notice and lapse of such time as may be  required by law, to
foreclose its interest (or cause such interest to be  foreclosed)  in all or any
part of the Property.

            (b) Upon the occurrence and during the  continuance of a Lease Event
of Default,  the Lessor,  in lieu of or in addition to  exercising  any power of
sale  hereinabove  given,  may  proceed  by a suit or suits in equity or at law,
whether for a  foreclosure  hereunder,  or for the sale of such  interest in the
Property,  against Lessee for the Termination  Value or for the appointment of a
receiver  pending any foreclosure  hereunder or the sale of such interest in the
Property,  or for the  enforcement of any other  appropriate  legal or equitable
remedy.

      17.6 Final Liquidated Damages.

            If a Lease Event of Default shall have  occurred and be  continuing,
whether or not this Lease shall have been  terminated  pursuant to Section  17.1
and whether or not Lessor shall have  collected any current  liquidated  damages
pursuant to Section 17.4,  Lessor shall have the right to recover,  by demand to
Lessee and at  Lessor's  election,  and Lessee  shall pay to Lessor,  as and for
final liquidated damages, but exclusive of the indemnities payable under Section
11  of  the  Participation  Agreement  (which,  if  requested,   shall  be  paid
concurrently),  and in lieu of all current liquidated damages beyond the date of
such demand (it being agreed that it would be impossible accurately to determine
actual damages) the Termination Value (including, without limitation, the Make -
Whole  Amount).  Upon  payment of the  amount  specified  pursuant  to the first
sentence of this Section 17.6,  Lessee shall be entitled to receive from Lessor,
either at Lessee's request or upon Lessor's election, in either case at Lessee's
cost,  Lessor's  entire  right,  title  and  interest  in and  to the  Property,
Improvements, Fixtures, Modifications,  Equipment and all components thereof, in
each case in recordable  form and otherwise in conformity  with local custom and
free and  clear of the Lien of this  Lease  (including  without  limitation  the
release of any  memoranda  of Lease  and/or  the Lease  Supplement  recorded  in
connection  therewith)  and any Lessor Liens.  The Property shall be conveyed to
Lessee  "AS-IS,  WHERE-IS" and in its then present  physical  condition.  If any
statute or rule of law shall limit the amount of such final  liquidated  damages
to less than the amount  agreed  upon,  Lessor  shall be entitled to the maximum
amount allowable under such statute or rule of law;  provided,  however,  Lessee
shall not be  entitled  to receive an  assignment  of  Lessor's  interest in the
Property, the Improvements, Fixtures, Modifications, Equipment or the components
thereof unless Lessee shall have paid in full the


                                       28
<PAGE>

Termination  Value.  Lessee  specifically   acknowledges  and  agrees  that  its
obligations  under this Section 17.6 shall be absolute and  unconditional  under
any and all circumstances  and shall be paid and/or  performed,  as the case may
be, without notice or demand and without any abatement,  reduction,  diminution,
setoff, defense, counterclaim or recoupment whatsoever.

      17.7 Environmental Costs.

            If a Lease Event of Default shall have  occurred and be  continuing,
and  whether or not this Lease  shall have been  terminated  pursuant to Section
17.1,  Lessee  shall pay  directly to any third party (or at Lessor's  election,
reimburse Lessor) for the cost of any environmental  testing and/or  remediation
work  undertaken  respecting  the  Property,  as such  testing or work is deemed
appropriate in the reasonable  judgment of Lessor,  and shall indemnify and hold
harmless Lessor and each other Indemnified  Person  therefrom.  Lessee shall pay
all amounts  referenced in the  immediately  preceding  sentence within five (5)
Business Days of any request by Lessor for such payment.  The provisions of this
Section  17.7  shall not limit the  obligations  of Lessee  under any  Operative
Agreement  regarding   indemnification   obligations,   environmental   testing,
remediation and/or work.

      17.8 Waiver of Certain Rights.

            If this Lease shall be terminated  pursuant to Section 17.1,  Lessee
waives,  to the fullest  extent  permitted by Law, (a) any notice of re-entry or
the institution of legal  proceedings to obtain re-entry or possession;  (b) any
right of redemption,  re-entry or possession; (c) the benefit of any laws now or
hereafter in force  exempting  property from liability for rent or for debt; and
(d) any other  rights  which  might  otherwise  limit or modify any of  Lessor's
rights or remedies under this Article XVII.

      17.9 Assignment of Rights Under Contracts.

            If a Lease Event of Default shall have  occurred and be  continuing,
and  whether or not this Lease  shall have been  terminated  pursuant to Section
17.1,  Lessee shall upon Lessor's demand (and provided Lessee has not cured such
Lease Event of Default  pursuant to Section 17.11 or otherwise paid to Lessor an
amount equal to the liquidated damages set forth in Section 17.6 within ten (10)
days after written demand therefor) immediately assign, transfer and set over to
Lessor  all of  Lessee's  right,  title and  interest  in and to each  agreement
executed by Lessee in connection with the  acquisition,  installation,  testing,
use, development,  construction,  operation,  maintenance, repair, refurbishment
and restoration of the Property  (including  without limitation all right, title
and interest of Lessee with respect to all  warranty,  performance,  service and
indemnity  provisions),  as  and to the  extent  that  the  same  relate  to the
acquisition,  installation, testing, use, development,  construction, operation,
maintenance,  repair,  refurbishment  and  restoration of the Property or any of
them.

      17.10 Remedies Cumulative.

            The remedies  herein provided shall be cumulative and in addition to
(and not in  limitation  of) any  other  remedies  available  at law,  equity or
otherwise, including without


                                       29
<PAGE>

limitation any mortgage foreclosure remedies;  provided,  however,  Lessor shall
not  exercise any rights or  remedies,  other than the right to  terminate  this
Agreement,  to collect  current or full liquidated  damages  pursuant to Section
17.4 and 17.6  above  and to  transfer  and  convey  the  Property  to Lessee in
accordance with Section 17.6 above, and to seek to enforce the  indemnifications
under this Agreement and any other Operative Agreement,  unless and until Lessee
shall have failed to pay to Lessor the  liquidated  damages set forth in Section
17.6 within ten (10) days after the Agent has  delivered to the Lessee a written
demand therefor.

      17.11 Lessee's Right to Cure by Purchase of the Property.

            Notwithstanding  anything  in  this  Lease  or in any  of the  other
Operative  Agreements to the contrary,  upon the occurrence and continuance of a
Lease Default or Lease Event of Default,  Lessee may, but shall not be obligated
to, cure any such Lease  Default or Lease Event of Default,  as the case may be,
by purchasing  the  Property,  such  purchase to be  consummated  as provided in
Section 19.1 and Section 20.2.

                                  ARTICLE XVIII

      18.1 Lessor's Right to Cure Lessee's Lease Defaults.

            Lessor,  without  waiving or releasing any obligation or Lease Event
of Default,  may (but shall be under no obligation to) remedy any Lease Event of
Default for the  account  and at the sole cost and expense of Lessee,  including
without  limitation the failure by Lessee to maintain the insurance  required by
Article   XIV,   and  may,  to  the  fullest   extent   permitted  by  law,  and
notwithstanding any right of quiet enjoyment in favor of Lessee,  enter upon the
Property,  and take all such action  thereon as may be necessary or  appropriate
therefor.  No such  entry  shall  be  deemed  an  eviction  of any  lessee.  All
reasonable  out-of-pocket  costs and  expenses  so incurred  (including  without
limitation fees and expenses of counsel),  together with interest thereon at the
Overdue  Rate from the date on which such sums or  expenses  are paid by Lessor,
shall be paid by Lessee to Lessor on demand.

                                   ARTICLE XIX

      19.1 Provisions Relating to Lessee's Exercise of its Purchase Option.

            Subject to Section 19.2, in connection  with any termination of this
Lease, or in connection with Lessee's exercise of its Purchase Option,  upon the
date on which  this  Lease is to  terminate,  and upon  tender  by Lessee of the
amounts set forth in  Sections  16.2(b) or 20.2,  as  applicable,  Lessor  shall
execute  and deliver to Lessee (or to Lessee's  designee)  at Lessee's  cost and
expense an assignment (by limited or special warranty deed or other  appropriate
instrument)  of  Lessor's  entire  interest  in the  Property,  in each  case in
recordable form and otherwise in conformity with local custom and free and clear
of the Lien of this Lease,  the Liens of the  Security  Documents  and any other
Operative  Agreements and any Lessor Liens, but without any other warranties (of
title or otherwise) from Lessor and such other documents or instruments as


                                       30
<PAGE>

may be  reasonably  requested by Lessee to effect the  conveyance  or assignment
contemplated  by this Section  19.1.  The  Property  shall be conveyed to Lessee
"AS-IS, "WHERE-IS" and in then present physical condition.

      19.2 No  Purchase  or  Termination  With  Respect  to Less  than  All of a
           Property.

            Except as expressly permitted pursuant to Section 21.1, Lessee shall
not be entitled to exercise  its Purchase  Option or the Sale Option  separately
with  respect  to a  portion  of the  Property  consisting  of Land,  Equipment,
Improvements  but shall be required to exercise its Purchase  Option or the Sale
Option with respect to the entire Property.

                                   ARTICLE XX

      20.1 Purchase Option or Sale Option-General Provisions.

            Not less than one  hundred  eighty  (180)  days and no more than two
hundred  forty  (240)  days  prior to the  Expiration  Date or,  respecting  the
Purchase Option only, not less than sixty (60) days and no more than two hundred
forty (240) days prior to any Payment Date (such Expiration Date or,  respecting
the Purchase Option only, any such Payment Date being hereinafter referred to as
the "Election  Date"),  Lessee may give Agent (on behalf of Lessor)  irrevocable
written notice (the  "Election  Notice") that Lessee is electing (a) to purchase
the Property on the applicable Election Date (the "Purchase Option") or (b) with
respect to an Election Notice given in connection with the Expiration Date only,
the option to  re-market  the  Property  to a Person  other  than  Lessee or any
Affiliate of Lessee and cause a sale of the Property to occur on the  applicable
Election  Date  pursuant to the terms of Section  22.1 (the "Sale  Option").  If
Lessee does not give an Election  Notice  indicating the Purchase  Option or the
Sale Option at least one hundred eighty (180) days and not more than two hundred
forty (240) days prior to the  Expiration  Date,  then Lessee shall be deemed to
have elected for the Purchase Option to apply on the Expiration  Date. If Lessee
shall  either (i) elect (or be deemed to have  elected) to exercise the Purchase
Option or (ii) elect the Sale  Option and fail to cause the  Property to be sold
in accordance  with the terms of Section 22.1 on the  applicable  Election Date,
then in  either  case  Lessee  shall  pay to  Lessor  on the date on which  such
purchase or sale is scheduled to occur an amount equal to the Termination  Value
for the  Property  (which the parties do not intend to be a  "bargain"  purchase
price) and, upon receipt of such amounts and  satisfaction of such  obligations,
Lessor shall transfer to Lessee (or to Lessee's designee) all of Lessor's right,
title and interest in and to the Property in accordance with Section 20.2.

            If the  Property is the subject of  remediation  efforts  respecting
Hazardous  Substances at the applicable Election Date which could materially and
adversely  impact the Fair Market Sales Value of the Property (with  materiality
determined in Lessor's reasonable discretion), then Lessee shall be obligated to
purchase the Property pursuant to Section 20.2.


                                       31
<PAGE>

      20.2 Lessee Purchase Option.

            Provided,  no Lease  Default or Lease  Event of  Default  shall have
occurred and be  continuing  (other than those that will be cured by the payment
of the  Termination  Value for the  Property)  and  provided,  that the Election
Notice has been appropriately given specifying the Purchase Option, Lessee shall
purchase the Property on the  applicable  Election  Date at a price equal to the
Termination  Value for the  Property  (which  the  parties do not intend to be a
"bargain" purchase price).

            Subject to Section 19.2, in connection  with any termination of this
Lease, or in connection with Lessee's exercise of its Purchase Option,  upon the
date on which this Lease is to  terminate  with respect to the Property and upon
tender by Lessee of the  amounts  set forth in Section  16.2(b) or this  Section
20.2, as applicable,  Lessor shall  execute,  acknowledge  (where  required) and
deliver to Lessee,  at Lessee's cost and expense,  each of the following:  (a) a
special or limited  warranty  Deed  conveying  the Property (to the extent it is
real  property) to Lessee (or Lessee's  designee)  free and clear of the Lien of
this Lease, the Liens of the Credit Documents and any other Operative Agreements
and any Lessor Liens;  (b) a Bill of Sale  conveying the Property (to the extent
it is personal  property) to Lessee (or Lessee's designee) free and clear of the
Lien of this Lease,  the Liens of the Credit  Documents and any other  Operative
Agreements  and any Lessor  Liens;  (c) any real estate tax  affidavit  or other
document  required by law to be executed  and filed in order to record the Deed;
and (d) FIRPTA affidavits and such documents or instruments as may be reasonably
requested by Lessee to effect the  conveyance and release  contemplated  by this
Section 20.2. All of the foregoing  documentation  must be in form and substance
reasonably  satisfactory to Agent and Lessee.  The Property shall be conveyed to
Lessee (or Lessee's  designee)  "AS-IS,  WHERE-IS" and in then present  physical
condition.

            On the  applicable  Election  Date on which  Lessee  has  elected to
exercise its Purchase  Option,  Lessee shall pay (or cause to be paid) to Lessor
or the Agent,  as  appropriate,  the sum of all  reasonable  costs and  expenses
incurred by any such party in connection with the election by Lessee to exercise
its  Purchase  Option and all Rent then due and  payable  or accrued  under this
Lease and/or any other Operative Agreement.

      20.3 Third Party Sale Option.

            (a)  Provided,  that (i) no Default  or Event of Default  shall have
      occurred  and  be  continuing  and  (ii)  the  Election  Notice  has  been
      appropriately given specifying the Sale Option,  Lessee shall undertake to
      cause a sale of the  Property  on the  applicable  Election  Date  (all as
      specified in the Election  Notice),  in accordance  with the provisions of
      Section 22.1 hereof. Such Election Date on which a sale is required may be
      hereafter referred to as the "Sale Date".

            (b) In the event Lessee  exercises  the Sale Option then, as soon as
      practicable  and in all  events not less than sixty (60) days and not more
      than one hundred  eighty (180) days prior to the Sale Date,  Lessee at its
      expense shall cause to be delivered to Lessor a Phase I environmental site
      assessment  (or an  update  of a Phase  I  environmental  site  assessment
      previously  delivered)  for the Property  recently  prepared (no more than
      thirty


                                       32
<PAGE>

      (30) days old prior to the date of delivery) by an independent  recognized
      professional  reasonably  acceptable  to  Lessor  and in form,  scope  and
      content reasonably  satisfactory to Lessor. In the event that Lessor shall
      not have received  such  environmental  site  assessment by the date sixty
      (60) days prior to the Sale Date or in the event  that such  environmental
      assessment  shall  reveal  the  existence  of any  material  violation  of
      Environmental  Laws, other material  Environmental  Violation or potential
      material Environmental Violation (with materiality determined in each case
      by  Lessor in its  reasonable  discretion),  then  Lessee on the Sale Date
      shall  pay to  Lessor an  amount  equal to the  Termination  Value for the
      Property.  Upon receipt of such payment,  Lessor shall  transfer to Lessee
      all of  Lessor's  right,  title and  interest  in and to the  Property  in
      accordance with Section 19.1.

                                   ARTICLE XXI

      21.1 Subdivision and Sale of Excess Land.

            (a) Lessee shall have the right to subdivide  the Property  into one
      or  more  parcels  of Land  in  accordance  with  Section  8.13(a)  of the
      Participation Agreement.

            (b) The  Construction  Agent and the Lessee  shall have the  option,
      exercisable  by giving Lessor no less than sixty (60) days written  notice
      of the Construction Agent's or the Lessee's election to sell, transfer and
      convey all or any  portion of the Excess Land on the  following  terms and
      conditions:

                  (i) prior to any such sale,  transfer,  conveyance or purchase
            of such Excess  Land,  the  Construction  Agent or the Lessee  shall
            cause  the  Property  to  be  subdivided  in  accordance   with  the
            provisions of Section 8.13(a) of the Participation Agreement;

                  (ii) the Excess Land Payment  Amount for the Excess Land shall
            be paid to Lessor on the effective  date of any such sale,  transfer
            or conveyance of the Excess Land for  application in accordance with
            Section 8.7(b)(vii) of the Participation  Agreement and the Property
            Cost for the Property  immediately  prior to such sale,  transfer or
            conveyance shall be reduced by the Excess Land Payment Amount;

                  (iii) the Remaining  Property  shall continue to constitute an
            area with  appropriate  easement and operating  agreements such that
            the  value  of the  Remaining  Property  is at  least  equal  to the
            Property Cost allocable to such Remaining Property after application
            of the Excess  Land  Payment  Amount and such that the  utility  and
            useful life of the Remaining Property are not diminished;

                  (iv) the Remaining  Property shall at all times satisfy all of
            the terms and conditions of the Operative Agreements;


                                       33
<PAGE>

                  (v) all Rent and other amounts due and payable by Lessee under
            any  Operative  Agreement  shall  be paid on or prior to the date of
            such sale, transfer, conveyance or purchase of the Excess Land; and

                  (vi) no Default or Event of Default shall have occurred and be
            continuing on the date of such sale,  transfer and conveyance of the
            Excess Land.

      Lessee shall pay, or cause to be paid, all  reasonable  costs and expenses
      incurred by any Financing  Party in  connection  with a sale of any Excess
      Land.

            (c) To the  extent  not  previously  released  pursuant  to  Section
      8.13(a)(ii) of the  Participation  Agreement,  upon the sale,  transfer or
      conveyance  of any Excess Land in  accordance  with this  Section 21.1 and
      Section  8.13 of the  Participation  Agreement,  the Excess  Land shall be
      released from the Lien of this Lease, the Liens of the Security  Documents
      and any other  Operative  Agreements  and any Lessor Liens.  In connection
      with any sale of Excess Land,  Lessor shall  execute,  acknowledge  (where
      required)  and deliver to the  purchaser  thereof,  at  Lessee's  cost and
      expense,  each of the  following:  (a) a special or limited  warranty Deed
      conveying  the Excess  Land;  (b) any real estate tax  affidavit  or other
      document  required by law to be executed  and filed in order to record the
      Deed;  and (c) FIRPTA  affidavits and such documents or instruments as may
      be  reasonably  requested by Lessee to effect the  conveyance  and release
      contemplated by this Section 21.1. All of the foregoing documentation must
      be in form and substance reasonably  satisfactory to Agent and Lessee. The
      Excess Land shall be conveyed  "AS-IS,  WHERE-IS"  and in its then present
      physical condition.

                                  ARTICLE XXII

      22.1 Sale Procedure.

            (a) During the Marketing Period,  Lessee, on behalf of Lessor, shall
      obtain bids for the cash  purchase of the  Property in  connection  with a
      sale to one (1) or more third party  purchasers to be  consummated  on the
      Sale Date,  shall notify  Lessor  promptly of the name and address of each
      prospective  purchaser and the cash price which each prospective purchaser
      shall have offered to pay for the Property and shall  provide  Lessor with
      such  additional  information  about  the  bids  and the bid  solicitation
      procedure as Lessor may  reasonably  request  from time to time.  All such
      prospective  purchasers must be Persons other than Lessee or any Affiliate
      of  Lessee.  On the Sale Date,  Lessee  shall pay (or cause to be paid) to
      Lessor or the Agent, as appropriate,  the sum of all reasonable  costs and
      expenses  incurred  by  Lessor  and/or  the  Agent (as the case may be) in
      connection  with such sale of the Property,  all Rent then due and payable
      or accrued under this Lease and/or any other Operative Agreement.

            Lessor may reject any and all bids and may  solicit  and obtain bids
      by giving Lessee written notice to that effect;  provided,  however,  that
      notwithstanding the foregoing,  Lessor may not reject any bid submitted by
      Lessee if such bid is greater than


                                       34
<PAGE>

      or equal to the Limited Recourse Amount for the Property, and represents a
      bona  fide  offer  from one (1) or more  third  party  purchasers.  If the
      highest price which a prospective purchaser or the prospective  purchasers
      shall have  offered to pay for the  Property on the Sale Date is less than
      the  Limited  Recourse  Amount  for the  Property  or if such bid does not
      represent a bona fide offer from one (1) or more third parties or if there
      are no bids,  Lessee may  withdraw  its  exercise  of the Sale  Option and
      exercise  Lessee's Purchase Option by purchasing the Property on such Sale
      Date in accordance  with Section  20.2,  failing which Lessor may elect to
      retain the  Property by giving  Lessee  prior  written  notice of Lessor's
      election to retain the same,  and  promptly  upon  receipt of such notice,
      Lessee  shall  surrender,  or cause to be  surrendered,  the  Property  in
      accordance  with the terms and conditions of Section 10.1. Upon acceptance
      of any bid, Lessor agrees,  at Lessee's request and expense,  to execute a
      contract  of sale  with  respect  to  such  sale,  so long as the  same is
      consistent  with the terms of this  Article 22 and  provides  by its terms
      that it is nonrecourse to Lessor.

            Unless Lessor shall have elected to retain the Property  pursuant to
      the provisions of the preceding paragraph, Lessee shall arrange for Lessor
      to sell the Property  free and clear of the Lien of this Lease,  the Liens
      of the  Security  Documents  and any other  Operative  Agreements  and any
      Lessor Liens,  without  recourse or warranty (of title or otherwise),  for
      cash on the Sale Date to the purchaser or purchasers  offering the highest
      cash sales price,  as identified by Lessee or Lessor,  as the case may be;
      provided,  however,  solely  as to  Lessor,  any  Lessor  Lien  shall  not
      constitute a Lessor Lien so long as Lessor is diligently and in good faith
      contesting,  at the  cost  and  expense  of  Lessor  such  Lessor  Lien by
      appropriate  proceedings  in which  event (with the consent of the Lessee,
      but without  penalty or cost to Lessee) the applicable  Sale Date shall be
      delayed  for the  period of such  contest.  To effect  such  transfer  and
      assignment, Lessor shall execute, acknowledge (where required) and deliver
      to the  appropriate  purchaser  each of the  following:  (a) a special  or
      limited  warranty  Deed  conveying  the Property (to the extent it is real
      property) to the appropriate  purchaser free and clear of the Lien of this
      Lease,  the  Liens  of  the  Credit  Documents  and  the  other  Operative
      Agreements and any Lessor Liens; (b) a Bill of Sale conveying the Property
      (to  the  extent  it  is  personal  property)  titled  to  Lessor  to  the
      appropriate  purchaser free and clear of the Lien of this Lease, the Liens
      of the Credit Documents and the other Operative  Agreements and any Lessor
      Liens; (c) any real estate tax affidavit or other document required by law
      to be  executed  and filed in order to record  the  Deed;  and (d)  FIRPTA
      affidavits  and such  other  documents  or  instruments  required  for the
      issuance of an owner's policy of title insurance subject only to the Liens
      encumbering the Property on the  Commencement  Date and those consented to
      by Lessee, or otherwise to effect the conveyance and release  contemplated
      herein, as appropriate. All of the foregoing documentation must be in form
      and  substance  reasonably  satisfactory  to Lessor and the Agent.  Lessee
      shall  surrender the Property so sold or subject to such documents to each
      purchaser in the  condition  specified in Section  10.1,  or in such other
      condition  as may be agreed  between  Lessee and such  purchaser.  Neither
      Lessor nor Lessee  shall take or fail to take any action  which would have
      the effect of unreasonably discouraging bona fide third party bids for the
      Property.  If the  Property  is  neither  (i)  sold  on the  Sale  Date in
      accordance  with the terms of this  Section  22.1,  nor (ii)  retained  by
      Lessor pursuant to an affirmative election made by


                                       35
<PAGE>

      Lessor  pursuant to the second  sentence of the second  paragraph  of this
      Section  22.1(a),  then (x)  Lessee  shall be deemed to have  elected  the
      Purchase  Option and shall be  obligated to pay Lessor on the Sale Date an
      amount equal to the aggregate  Termination Value for the Property less any
      sales  proceeds  received,  and (y) Lessor shall  transfer the Property to
      Lessee in accordance with Section 20.2.

            (b) In the event Lessee  shall have elected the Sale Option,  Lessee
      hereby  unconditionally  promises  to pay to Lessor on the  earlier of the
      Sale Date or the Expiration Date, the Maximum Residual  Guarantee  Amount.
      On the Sale Date if (x) Lessor  receives the aggregate  Termination  Value
      for the  Property  from one (1) or more  third  party  purchasers  and (y)
      Lessor and such other parties  receive all other amounts  specified in the
      last  sentence of the first  paragraph of Section  22.1(a) then Lessee may
      retain any excess above Termination  Value. If the Property is retained by
      Lessor pursuant to an affirmative  election made by Lessor pursuant to the
      provisions of Section 22.1(a), then Lessee hereby unconditionally promises
      to pay to Lessor on the Sale Date all  Basic  Rent and  Supplemental  Rent
      (exclusive  of a payment of the  Termination  Value) due and payable on or
      prior to the Sale Date and,  without  duplication,  all other amounts then
      due  and  owing  pursuant  to  the  Operative   Agreements  and,   without
      duplication, an amount equal to the Maximum Residual Guarantee Amount. Any
      payment of the foregoing  amounts  described in this Section 22.1(b) shall
      be made, without duplication,  together with a payment of all Rent and all
      other amounts  referenced  in the last sentence of the first  paragraph of
      Section 22.1(a).

            (c) In the event that the Property is either sold to one (1) or more
      third  party  purchasers  on the  Sale  Date  or  retained  by  Lessor  in
      connection  with an  affirmative  election made by Lessor  pursuant to the
      provisions of Section 22.1(a),  then in either case on the applicable Sale
      Date Lessee shall  provide  Lessor or such third party  purchaser  (unless
      otherwise  agreed by such third  party  purchaser)  with (i) all  permits,
      certificates  of  occupancy,   governmental  licenses  and  authorizations
      necessary to use,  operate,  repair,  access and maintain the Property for
      the purpose it is being used by Lessee,  and (ii) such  manuals,  permits,
      easements,  licenses,  intellectual property, know-how,  rights-of-way and
      other rights and privileges in the nature of an easement as are reasonably
      necessary or  desirable in  connection  with the use,  operation,  repair,
      access to or  maintenance  of the  Property  for its  intended  purpose or
      otherwise  as Lessor or such third  party  purchaser(s)  shall  reasonably
      request (and a royalty-free license or similar agreement to effectuate the
      foregoing  on terms  reasonably  agreeable  to Lessor or such third  party
      purchaser(s),  as  applicable).  All  assignments,   licenses,  easements,
      agreements and other  deliveries  required by clauses (i) and (ii) of this
      paragraph (c) shall be in form  reasonably  satisfactory to Lessor or such
      third party  purchaser(s),  as applicable,  and shall be fully  assignable
      (including  without  limitation  both primary  assignments and assignments
      given in the nature of security) without payment of any fee, cost or other
      charge.

      22.2 Application of Proceeds of Sale.

            Lessor  shall apply the  proceeds of sale of the Property to a third
party pursuant to the Sale Option in the following order of priority:


                                       36
<PAGE>

            (a) FIRST,  to pay or to reimburse  Lessor (and/or the Agent, as the
      case may be) for the payment of all reasonable costs and expenses incurred
      by Lessor  (and/or the Agent,  as the case may be) in connection  with the
      sale (to the extent Lessee has not  satisfied  its  obligation to pay such
      costs and expenses);

            (b)  SECOND,  so long as the  Tranche B Credit  Agreement,  the Cash
      Collateral  Credit  Agreement or the Note Purchase  Agreement is in effect
      and any Financing or any other amounts are owing to the Financing  Parties
      under any  Operative  Agreement,  to the Agent to be applied  pursuant  to
      intercreditor  provisions among Lessor,  the Primary Financing Parties and
      the  Agent  contained  in  the  Operative  Agreements,  including  without
      limitation Section 8.7 of the Participation Agreement; and

            (c) THIRD, to Lessee.

      22.3 Indemnity for Excessive Wear.

            If the  proceeds of the sale  described in Section 22.1 with respect
to the Property shall be less than the Limited  Recourse  Amount with respect to
the  Property,  and at the  time of such  sale it  shall  have  been  reasonably
determined  (pursuant  to the  Appraisal  Procedure)  that the Fair Market Sales
Value of the Property shall have been impaired by greater than expected wear and
tear during the term of the Lease,  Lessee  shall pay to Lessor  within ten (10)
days after receipt of Lessor's  written  statement (i) the amount of such excess
wear and tear  determined by the  Appraisal  Procedure or (ii) the amount of the
Sale Proceeds Shortfall, whichever amount is less.

      22.4 Appraisal Procedure.

            For  determining  the Fair Market Sales Value of the Property or any
other amount which may, pursuant to any provision of any Operative Agreement, be
determined by an appraisal procedure,  Lessor and Lessee shall use the following
procedure (the "Appraisal Procedure"). Lessor and Lessee shall endeavor to reach
a mutual  agreement  as to such  amount  for a  period  of ten  (10)  days  from
commencement  of the Appraisal  Procedure  under the  applicable  Section of the
Lease,  and if they cannot  agree within ten (10) days,  then two (2)  qualified
appraisers,  one (1)  chosen  by Lessee  and one (1)  chosen  by  Lessor,  shall
mutually agree thereupon,  but if either party shall fail to choose an appraiser
within  twenty (20) days after  notice from the other party of the  selection of
its appraiser,  then the appraisal by such appointed  appraiser shall be binding
on Lessee and Lessor.  If the two (2) appraisers cannot agree within twenty (20)
days  after  both shall have been  appointed,  then a third  appraiser  shall be
selected  by the two (2)  appraisers  or,  failing  agreement  as to such  third
appraiser  within thirty (30) days after both shall have been appointed,  by the
American  Arbitration  Association.  The  decisions of the three (3)  appraisers
shall be given within twenty (20) days of the appointment of the third appraiser
and the decision of the appraiser  most  different from the average of the other
two (2) shall be  discarded  and such  average  shall be  binding  on Lessor and
Lessee;  provided,  that if the highest  appraisal and the lowest  appraisal are
equidistant  from the third  appraisal,  the third appraisal shall be binding on
Lessor and Lessee. The fees and expenses of the appraiser


                                       37
<PAGE>

appointed  by  Lessee  shall be paid by  Lessee;  the fees and  expenses  of the
appraiser  appointed  by Lessor  shall be paid by Lessor (such fees and expenses
not being indemnified  pursuant to Section 11 of the  Participation  Agreement);
and the fees and  expenses  of the  third  appraiser  shall be  divided  equally
between Lessee and Lessor.

      22.5 Certain Obligations Continue.

            During the Marketing  Period,  the  obligation of Lessee to pay Rent
with respect to the Property  (including  without  limitation the installment of
Basic Rent due on the Sale Date) shall  continue  undiminished  until payment in
full to Lessor of the Maximum Residual Guarantee Amount,  the sale proceeds,  if
any,  remaining after the payment of the Maximum Residual  Guarantee Amount, the
amount due under  Section  22.3,  if any, and all other amounts due to Lessor or
any other Person with respect to the Property or any Operative Agreement. Lessor
shall have the right,  but shall be under no duty,  to solicit  bids, to inquire
into the  efforts  of Lessee  to  obtain  bids or  otherwise  to take  action in
connection with any such sale, other than as expressly  provided in this Article
XXII.

                                  ARTICLE XXIII

      23.1 Holding Over.

            If Lessee shall for any reason  remain in possession of the Property
after the  expiration or earlier  termination of this Lease (unless the Property
is conveyed  to Lessee),  such  possession  shall be as a tenancy at  sufferance
during which time Lessee shall continue to pay  Supplemental  Rent that would be
payable by Lessee  hereunder  were the Lease then in full force and effect  with
respect to the  Property  and  Lessee  shall  continue  to pay Basic Rent at the
lesser of the highest lawful rate and one hundred ten percent (110%) of the last
payment of Basic Rent due with respect to the Property prior to such  expiration
or earlier termination of this Lease. Such Basic Rent shall be payable from time
to time upon demand by Lessor and such additional  amount of Basic Rent shall be
applied  by Lessor  ratably  to the  Primary  Financing  Parties  based on their
relative amounts of the then outstanding Property Cost for the Property.  During
any  period of  tenancy  at  sufferance,  Lessee  shall,  subject  to the second
preceding  sentence,  be  obligated  to perform  and  observe  all of the terms,
covenants and conditions of this Lease, but shall have no rights hereunder other
than the right, to the extent given by law to tenants at sufferance, to continue
their occupancy and use of the Property. Nothing contained in this Article XXIII
shall constitute the consent,  express or implied, of Lessor to the holding over
of Lessee after the expiration or earlier  termination of this Lease (unless the
Property is conveyed to Lessee) and nothing  contained  herein  shall be read or
construed as preventing  Lessor from  maintaining  a suit for  possession of the
Property or exercising any other remedy available to Lessor at law or in equity.


                                       38
<PAGE>

                                  ARTICLE XXIV

      24.1 Risk of Loss.

            During the Term,  unless Lessee shall not be in actual possession of
the  Property  solely  by  reason  of  Lessor's  exercise  of  its  remedies  of
dispossession  under Article XVII, the risk of loss or decrease in the enjoyment
and  beneficial  use of the  Property  as a result of the damage or  destruction
thereof by fire, the elements,  casualties,  thefts, riots, wars or otherwise is
assumed  by Lessee  except as  limited  pursuant  to  Section  5.4 of the Agency
Agreement, and Lessor shall in no event be answerable or accountable therefor.

                                   ARTICLE XXV

      25.1 Assignment.

            (a)  Lessee  may not  assign  this  Lease  or any of its  rights  or
      obligations  hereunder or with respect to the Property in whole or in part
      to any Person without the prior written consent of each of the Agent,  the
      Tranche A Note Purchasers, the Tranche B Lenders and the Lessor; provided,
      that  Lessee may assign  this Lease and  Lessee's  rights and  obligations
      hereunder to any successor to Lessee by merger or consolidation, or to the
      purchaser  of all or  substantially  all of the  stock or assets of Lessee
      (but only to the extent such  merger,  consolidation  or sale is permitted
      under Section 8.3B.1 of the Participation Agreement),  without the consent
      of any of the Agent, the Tranche A Note Purchasers,  the Tranche B Lenders
      or the Lessor.

            (b) No  assignment  by Lessee  (referenced  in this  Section 25.1 or
      otherwise) or other  relinquishment of possession to the Property shall in
      any way discharge or diminish any of the  obligations  of Lessee to Lessor
      hereunder and Lessee shall remain directly and primarily  liable under the
      Operative Agreements as to any rights or obligations assigned by Lessee.

      25.2 Subleases.

            (a)  Promptly,  but in any  event  within  five (5)  Business  Days,
      following  the  execution  and delivery of any sublease  permitted by this
      Article XXV,  Lessee shall notify Lessor and the Agent of the execution of
      such  sublease and shall provide a copy of such sublease to Lessor and the
      Agent.  As of the date of the Lease  Supplement,  Lessee  shall  lease the
      Property  described in such Lease Supplement from Lessor, and any existing
      tenant  respecting  the  Property  shall  automatically  be deemed to be a
      subtenant of Lessee and not a tenant of Lessor.

            (b)  Without  the prior  written  consent of the Agent,  any Primary
      Financing Party or the Lessor and subject to the other  provisions of this
      Section 25.2, Lessee may sublet the Property or any portion thereof to any
      wholly-owned Subsidiary of Lessee or any other Person;  provided, all such
      subleasing shall be done on market terms at fair


                                       39
<PAGE>

      market rents, and shall in no way diminish the fair market value or useful
      life of the  Property.  Except  as  otherwise  provided  in  this  Section
      25.2(b),  no other  subleasing with respect to the Property or any portion
      thereof shall be permitted  without the written  consent of the Lessor and
      the Agent,  which consent  shall not be  unreasonably  delayed,  denied or
      conditional.

            (c) No sublease  (referenced  in this Section 25.2 or  otherwise) or
      other  relinquishment  of  possession  to the  Property  shall  in any way
      discharge or diminish any of Lessee's  obligations to Lessor hereunder and
      Lessee shall remain  directly and primarily  liable under this Lease as to
      the Property, or portion thereof, so sublet. The term of any such sublease
      shall not extend beyond the Term. Each sublease shall be expressly subject
      and subordinate to this Lease.

                                  ARTICLE XXVI

      26.1 No Waiver.

            No failure by Lessor or Lessee to insist upon the strict performance
of any term  hereof or to  exercise  any right,  power or remedy  upon a default
hereunder,  and no  acceptance  of full or partial  payment  of Rent  during the
continuance of any such default,  shall  constitute a waiver of any such default
or of any such term.  To the fullest  extent  permitted by law, no waiver of any
default shall affect or alter this Lease,  and this Lease shall continue in full
force and effect with respect to any other then existing or subsequent default.

                                  ARTICLE XXVII

      27.1 Acceptance of Surrender.

            No surrender to Lessor of this Lease or of all or any portion of the
Property or of any part of any thereof or of any interest therein shall be valid
or  effective  unless  agreed to and accepted in writing by Lessor and no act by
Lessor or the Agent or any representative or agent of Lessor or the Agent, other
than a written acceptance, shall constitute an acceptance of any such surrender.

      27.2 No Merger of Title.

            There  shall be no merger of this Lease or of the  leasehold  estate
created  hereby by reason of the fact that the same Person may  acquire,  own or
hold,  directly  or  indirectly,  in  whole or in  part,  (a) this  Lease or the
leasehold  estate created hereby or any interest in this Lease or such leasehold
estate, (b) any right, title or interest in the Property,  (c) any Notes, or (d)
a beneficial interest in Lessor.


                                       40
<PAGE>

                                 ARTICLE XXVIII

      28.1 [Reserved].

                                  ARTICLE XXIX

      29.1 Notices.

            All notices required or permitted to be given under this Lease shall
be in writing and  delivered  as provided in Section  12.2 of the  Participation
Agreement.

                                   ARTICLE XXX

      30.1 Miscellaneous.

            Anything  contained in this Lease to the  contrary  notwithstanding,
all claims  against  and  liabilities  of Lessee or Lessor  arising  from events
commencing  prior to the  expiration or earlier  termination of this Lease shall
survive such expiration or earlier  termination.  If any provision of this Lease
shall be held to be unenforceable  in any  jurisdiction,  such  unenforceability
shall not affect the  enforceability  of any other  provision  of this Lease and
such  jurisdiction or of such provision or of any other provision  hereof in any
other jurisdiction.

      30.2 Amendments and Modifications.

            Neither this Lease nor any Lease Supplement may be amended,  waived,
discharged or terminated  except in  accordance  with the  provisions of Section
12.4 of the Participation Agreement.

      30.3 Successors and Assigns.

            All the  terms  and  provisions  of this  Lease  shall  inure to the
benefit of the parties  hereto and their  respective  successors  and  permitted
assigns.

      30.4 Headings and Table of Contents.

            The headings and table of contents in this Lease are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.

      30.5 Counterparts.

            This Lease may be  executed in any number of  counterparts,  each of
which shall be an original,  but all of which shall together  constitute one (1)
and the same instrument.


                                       41
<PAGE>

      30.6 GOVERNING LAW.

            THIS LEASE  SHALL BE  GOVERNED  BY AND  CONSTRUED,  INTERPRETED  AND
ENFORCED IN ACCORDANCE  WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT
GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW), EXCEPT TO
THE EXTENT THE LAWS OF THE STATE WHERE THE  PROPERTY IS LOCATED ARE  REQUIRED TO
APPLY.

      30.7 Calculation of Rent.

            All calculation of Rent payable hereunder shall be computed based on
the actual  number of days elapsed over a year of three hundred sixty (360) days
or, to the extent such Rent is based on the Prime  Lending  Rate,  three hundred
sixty-five (365) (or three hundred sixty-six (366), as applicable) days.

      30.8 Memoranda of Lease and Lease Supplement.

            This Lease shall not be recorded;  provided, Lessor and Lessee shall
promptly  record  a  memorandum  of this  Lease  and the  Lease  Supplement  (in
substantially  the form of Exhibit A attached  hereto) or a short form lease (in
form and substance reasonably  satisfactory to Lessor) regarding the Property in
the local filing office with respect thereto,  in all cases at Lessee's cost and
expense,  and as required  under  applicable law to  sufficiently  evidence this
Lease  and any such  Lease  Supplement  in the  applicable  real  estate  filing
records.

      30.9 Allocations between the Lenders and Lessor.

            Notwithstanding  any other  term or  provision  of this Lease to the
contrary,  the allocations of the proceeds of the Property and any and all other
Rent and other amounts received hereunder shall be subject to the inter-creditor
provisions among the Primary  Financing  Parties  contained in the Intercreditor
Agreement and the other Operative  Agreements (or as otherwise  agreed among the
Primary Financing Parties from time to time).

      30.10 Limitations on Recourse.

            Notwithstanding  anything  contained in this Lease to the  contrary,
except with respect to a breach of Lessor's  covenant set forth in Section 30.15
and Lessor's obligations to discharge Lessor Liens, Lessee agrees to look solely
to Lessor's  estate and interest in the Property (and in no  circumstance to the
Agent, the Primary  Financing Parties or otherwise to Lessor) for the collection
of any  judgment  requiring  the  payment  of money by  Lessor  in the  event of
liability  by  Lessor,  and  no  other  property  or  assets  of  Lessor  or any
shareholder,  owner or partner  (direct  or  indirect)  in or of Lessor,  or any
director,  officer,  employee,  beneficiary,  Affiliate of any of the  foregoing
shall be subject  to levy,  execution  or other  enforcement  procedure  for the
satisfaction of the remedies of Lessee under or with respect to this Lease,  the
relationship  of Lessor and Lessee  hereunder or Lessee's use of the Property or
any other  liability  of Lessor to  Lessee.  Nothing  in this  Section  shall be
interpreted so as to limit the terms of Sections 6.1 or 6.2 or the provisions of
Section 12.9 of the Participation Agreement.


                                       42
<PAGE>

      30.11 WAIVERS OF JURY TRIAL.

            EACH OF THE PARTIES HERETO IRREVOCABLY AND  UNCONDITIONALLY,  TO THE
FULLEST  EXTENT  ALLOWED BY  APPLICABLE  LAW,  WAIVE  TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS LEASE AND FOR ANY COUNTERCLAIM THEREIN.

      30.12 Exercise of Lessor Rights.

            Lessee hereby  acknowledges and agrees that the rights and powers of
Lessor under this Lease have been assigned to the Agent pursuant to the terms of
the Security  Agreement and the other  Operative  Agreements.  Lessor and Lessee
hereby acknowledge and agree that (a) the Agent shall, in its discretion, direct
and/or act on behalf of Lessor pursuant to the provisions of Sections 8.2(e) and
8.6 of the Participation  Agreement, (b) all notices to be given to Lessor shall
be given to the Agent and (c) all  notices to be given by Lessor may be given by
the Agent, at its election.

      30.13 SUBMISSION TO JURISDICTION; VENUE.

            THE  PROVISIONS  OF  SECTION  12.7  OF THE  PARTICIPATION  AGREEMENT
RELATING TO  SUBMISSION TO  JURISDICTION  AND VENUE ARE HEREBY  INCORPORATED  BY
REFERENCE HEREIN, MUTATIS MUTANDIS.

      30.14 USURY SAVINGS PROVISION.

            IT IS THE INTENT OF THE PARTIES HERETO TO CONFORM TO AND CONTRACT IN
STRICT  COMPLIANCE WITH APPLICABLE USURY LAW FROM TIME TO TIME IN EFFECT. TO THE
EXTENT ANY RENT OR PAYMENTS HEREUNDER ARE HEREINAFTER CHARACTERIZED BY ANY COURT
OF COMPETENT  JURISDICTION  AS THE REPAYMENT OF PRINCIPAL AND INTEREST  THEREON,
THIS SECTION 30.14 SHALL APPLY.  ANY SUCH RENT OR PAYMENTS SO  CHARACTERIZED  AS
INTEREST  MAY BE  REFERRED TO HEREIN AS  "INTEREST."  ALL  AGREEMENTS  AMONG THE
PARTIES  HERETO ARE HEREBY  LIMITED BY THE  PROVISIONS OF THIS  PARAGRAPH  WHICH
SHALL  OVERRIDE  AND  CONTROL  ALL SUCH  AGREEMENTS,  WHETHER  NOW  EXISTING  OR
HEREAFTER  ARISING AND WHETHER  WRITTEN OR ORAL.  IN NO WAY, NOR IN ANY EVENT OR
CONTINGENCY  (INCLUDING  WITHOUT  LIMITATION  PREPAYMENT OR  ACCELERATION OF THE
MATURITY OF ANY OBLIGATION), SHALL ANY INTEREST TAKEN, RESERVED, CONTRACTED FOR,
CHARGED,  OR  RECEIVED  UNDER  THIS  LEASE  OR  OTHERWISE,  EXCEED  THE  MAXIMUM
NONUSURIOUS  AMOUNT  PERMISSIBLE  UNDER  APPLICABLE  LAW.  IF, FROM ANY POSSIBLE
CONSTRUCTION  OF ANY OF THE  OPERATIVE  AGREEMENTS  OR  ANY  OTHER  DOCUMENT  OR
AGREEMENT, INTEREST WOULD OTHERWISE BE PAYABLE IN


                                       43
<PAGE>

EXCESS OF THE MAXIMUM NONUSURIOUS AMOUNT, ANY SUCH CONSTRUCTION SHALL BE SUBJECT
TO THE  PROVISIONS OF THIS  PARAGRAPH  AND SUCH AMOUNTS UNDER SUCH  DOCUMENTS OR
AGREEMENTS  SHALL BE  AUTOMATICALLY  REDUCED TO THE MAXIMUM  NONUSURIOUS  AMOUNT
PERMITTED  UNDER  APPLICABLE  LAW,  WITHOUT THE  NECESSITY  OF  EXECUTION OF ANY
AMENDMENT OR NEW DOCUMENT OR AGREEMENT. IF LESSOR SHALL EVER RECEIVE ANYTHING OF
VALUE WHICH IS  CHARACTERIZED  AS INTEREST WITH RESPECT TO THE OBLIGATIONS  OWED
HEREUNDER OR UNDER APPLICABLE LAW AND WHICH WOULD, APART FROM THIS PROVISION, BE
IN EXCESS OF THE MAXIMUM  LAWFUL  AMOUNT,  AN AMOUNT  EQUAL TO THE AMOUNT  WHICH
WOULD HAVE BEEN EXCESSIVE  INTEREST SHALL,  WITHOUT  PENALTY,  BE APPLIED TO THE
REDUCTION  OF THE  COMPONENT OF PAYMENTS  DEEMED TO BE PRINCIPAL  AND NOT TO THE
PAYMENT OF INTEREST, OR REFUNDED TO LESSEE OR ANY OTHER PAYOR THEREOF, IF AND TO
THE EXTENT SUCH AMOUNT WHICH WOULD HAVE BEEN EXCESSIVE  EXCEEDS THE COMPONENT OF
PAYMENTS  DEEMED TO BE  PRINCIPAL.  THE RIGHT TO DEMAND  PAYMENT OF ANY  AMOUNTS
EVIDENCED  BY ANY OF THE  OPERATIVE  AGREEMENTS  DOES NOT  INCLUDE  THE RIGHT TO
RECEIVE ANY INTEREST WHICH HAS NOT OTHERWISE ACCRUED ON THE DATE OF SUCH DEMAND,
AND LESSOR  DOES NOT INTEND TO CHARGE OR RECEIVE  ANY  UNEARNED  INTEREST IN THE
EVENT OF SUCH DEMAND. ALL INTEREST PAID OR AGREED TO BE PAID TO LESSOR SHALL, TO
THE EXTENT PERMITTED BY APPLICABLE LAW, BE AMORTIZED,  PRORATED,  ALLOCATED, AND
SPREAD THROUGHOUT THE FULL STATED TERM (INCLUDING WITHOUT LIMITATION ANY RENEWAL
OR  EXTENSION)  OF THIS LEASE SO THAT THE AMOUNT OF  INTEREST ON ACCOUNT OF SUCH
PAYMENTS DOES NOT EXCEED THE MAXIMUM  NONUSURIOUS AMOUNT PERMITTED BY APPLICABLE
LAW.

      30.15 Restriction On Collateralization.

            Except  to  the  extent  required  or  permitted  by  the  Operative
Agreements,  Lessor  shall not  mortgage,  pledge,  hypothecate  or encumber its
interest in this Lease or the Property.

                            [signature pages follow]


                                       44
<PAGE>

      IN WITNESS WHEREOF, the parties have caused this Lease to be duly executed
and delivered as of the date first above written.

                                                FIRST UNION DEVELOPMENT
                                                CORPORATION, as Lessor

                                                By: /s/ EVANDER S. JONES, JR.
                                                    ----------------------------
                                                Name: EVANDER S. JONES, JR.
                                                      --------------------------
                                                Title: VICE PRESIDENT
                                                       -------------------------

                                                TOYS "R" US, INC., as Lessee

                                                By:
                                                    ----------------------------
                                                Name:
                                                      --------------------------
                                                Title:
                                                       -------------------------

Receipt of this original
counterpart of the foregoing
Lease is hereby acknowledged
as the date hereof

FIRST UNION NATIONAL BANK,
as the Agent

By: /s/ EVANDER S. JONES, JR.
    ----------------------------
Name: EVANDER S. JONES, JR.
      --------------------------
Title: VICE PRESIDENT
       -------------------------


<PAGE>

      IN WITNESS WHEREOF, the parties have caused this Lease to be duly executed
and delivered as of the date first above written.

                                             FIRST UNION DEVELOPMENT
                                             CORPORATION, as Lessor

                                             By:
                                                 -------------------------------
                                             Name:
                                                   -----------------------------
                                             Title:
                                                    ----------------------------

                                             TOYS "R" US, INC., as Lessee

                                             By: /s/ JON W. KIMMINS
                                                 -------------------------------
                                             Name: JON W. KIMMINS
                                                   -----------------------------
                                             Title: SR. VICE PRESIDENT-TREASURER
                                                    ----------------------------

Receipt of this original
counterpart of the foregoing
Lease is hereby acknowledged
as the date hereof

FIRST UNION NATIONAL BANK,
as the Agent

By:
    ----------------------------
Name:
      --------------------------
Title:
       -------------------------


<PAGE>

                                                          EXHIBIT A TO THE LEASE
                                                          ----------------------

                             LEASE SUPPLEMENT NO. 1

      THIS  LEASE  SUPPLEMENT  NO.  1  (this  "Lease  Supplement")  dated  as of
September 26, 2001 between FIRST UNION DEVELOPMENT CORPORATION, a North Carolina
corporation,  as  lessor  (the  "Lessor"),  and TOYS "R" US,  INC.,  a  Delaware
corporation, as lessee (the "Lessee").

      WHEREAS,  Lessor  is the  owner  or  will  be the  owner  of the  Property
described on Schedule 1 hereto (the "Leased  Property")  and wishes to lease the
same to Lessee;

      NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein  contained  and other good and  valuable  consideration,  the receipt and
sufficiency  of which are  hereby  acknowledged,  the  parties  hereto  agree as
follows:

      SECTION  1.  Definitions;  Rules of  Usage.  For  purposes  of this  Lease
Supplement, capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to them in Appendix A to the Participation Agreement,
dated as of September 26, 2001,  among  Lessee,  Lessor,  the various  financial
institutions  and other  institutional  investors  which are parties hereto from
time to time as Tranche A Note  Purchasers,  the various banks and other lending
institutions  which are  parties  hereto from time to time as Tranche B Lenders,
the various banks and other lending  institutions which are parties thereto from
time to time as Cash Collateral Lenders, First Union National Bank, as the Agent
for the Primary Financing Parties and respecting the Security Documents,  as the
Agent for the Secured  Parties,  and First Union National Bank, as Escrow Agent,
as such  may be  amended,  modified,  extended,  supplemented,  restated  and/or
replaced from time to time.

      SECTION 2. The Property.  Attached hereto as Schedule 1 is the description
of the Leased Property,  with an Equipment  Schedule attached hereto as Schedule
1-A, a schedule of  Improvements  attached  hereto as  Schedule  1-B and a legal
description  of the Land  attached  hereto as Schedule 1-C.  Effective  upon the
execution and delivery of this Lease Supplement by Lessor and Lessee, the Leased
Property  shall be subject  to the terms and  provisions  of the Lease.  Without
further  action,  any and all  additional  Equipment  funded under the Operative
Agreements  and any and all  additional  Improvements  made to the Land shall be
deemed to be titled to the Lessor and subject to the terms and conditions of the
Lease and this Lease Supplement.

      This Lease Supplement shall constitute a mortgage, deed of trust, security
agreement  and  financing  statement  under  the laws of the  state in which the
Leased Property is situated. The maturity date of the obligations secured hereby
shall be September 26, 2011, unless extended.


<PAGE>

      For purposes of provisions of the Lease and this Lease Supplement  related
to the  creation and  enforcement  of the Lease and this Lease  Supplement  as a
security agreement and a fixture filing,  Lessee is the debtor and Lessor is the
secured party.  The mailing  addresses of the debtor (Lessee  herein) and of the
secured  party  (Lessor  herein)  from  which  information  concerning  security
interests hereunder may be obtained are set forth on the signature pages hereto.
A  carbon,  photographic  or other  reproduction  of the  Lease  and this  Lease
Supplement  or of any  financing  statement  related to the Lease and this Lease
Supplement shall be sufficient as a financing  statement for any of the purposes
referenced herein.

      SECTION 3. Use of  Property.  At all times during the Term with respect to
the Property,  Lessee will comply with all obligations  under and (to the extent
no Lease  Event of Default  exists and  provided,  that such  exercise  will not
impair the value of the Property)  shall be permitted to exercise all rights and
remedies  under,  all operation and easement  agreements  and related or similar
agreements applicable to the Property.

      SECTION  4.   Ratification;   Incorporation   by   Reference.   Except  as
specifically  modified  hereby,  the terms and  provisions  of the Lease and the
Operative  Agreements are hereby ratified and confirmed and remain in full force
and  effect.  The Lease is hereby  incorporated  herein by  reference  as though
restated herein in its entirety.

      SECTION 5. Original Lease Supplement. The single executed original of this
Lease Supplement marked "THIS COUNTERPART IS THE ORIGINAL EXECUTED  COUNTERPART"
on the signature  page thereof and  containing the receipt of the Agent therefor
on or  following  the  signature  page thereof  shall be the  original  executed
counterpart of this Lease Supplement (the "Original Executed  Counterpart").  To
the extent that this Lease Supplement constitutes chattel paper, as such term is
defined  in  the  Uniform  Commercial  Code  as  in  effect  in  any  applicable
jurisdiction,  no  security  interest  in this Lease  Supplement  may be created
through the transfer or  possession of any  counterpart  other than the Original
Executed Counterpart.

      SECTION 6. GOVERNING LAW. THIS LEASE  SUPPLEMENT  SHALL BE GOVERNED BY AND
CONSTRUED,  INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE PRINCIPLES  THEREOF  RELATING TO
CONFLICTS OF LAW), EXCEPT TO THE EXTENT THE LAWS OF THE STATE WHERE THE PROPERTY
IS LOCATED ARE REQUIRED TO APPLY.

      SECTION 7. Mortgage;  Power of Sale.  Without  limiting any other remedies
set forth in the  Lease,  in the event  that a court of  competent  jurisdiction
rules that the Lease  constitutes  a  mortgage,  deed of trust or other  secured
financing  as is the intent of the  parties,  then Lessor and Lessee  agree that
Lessee hereby grants a Lien against the Leased  Property WITH POWER OF SALE, and
that,  upon the occurrence of any Lease Event of Default,  Lessor shall have the
power and authority, to the extent provided by law, after prior notice and lapse
of such time as may be required by law, to foreclose its interest (or cause such
interest to be foreclosed) in all or any part of the Leased Property.


                                       2
<PAGE>

      SECTION 8. Lessee Acknowledgment.  The Lessee hereby acknowledges that the
Lessor's rights hereunder have been assigned to the Agent.

      SECTION 9. Counterpart Execution. This Lease Supplement may be executed in
any  number  of  counterparts  and by each of the  parties  hereto  in  separate
counterparts,  all such counterparts  together  constituting but one (1) and the
same instrument.

      For purposes of the provisions of this Lease  Supplement  concerning  this
Lease  Supplement  constituting  a security  agreement and fixture  filing,  the
addresses of the debtor (Lessee  herein) and the secured party (Lessor  herein),
from whom  information may be obtained about this Lease  Supplement,  are as set
forth on the signature pages hereto.

        [The remainder of this page has been intentionally left blank.]


                                       3
<PAGE>

         IN WITNESS  WHEREOF,  each of the parties  hereto has caused this Lease
Supplement to be duly executed by an officer thereunto duly authorized as of the
date and year first above written.

                                            FIRST UNION DEVELOPMENT
                                            CORPORATION, as Lessor

                                            By:
                                                --------------------------------
                                            Name:
                                                  ------------------------------
                                            Title:
                                                   -----------------------------

                                            First Union Development Corporation
                                            c/o First Union Securities, Inc.
                                            One First Union Center
                                            301 South College Street, TW-14
                                            Charlotte, North Carolina 28288-5604
                                            Attn:    Van S. Jones

                                            TOYS "R" US, INC., as Lessee

                                            By:
                                                --------------------------------
                                            Name:
                                                  ------------------------------
                                            Title:
                                                   -----------------------------

                                            Toys "R" Us, Inc.
                                            461 From Road
                                            Paramus, New Jersey  07652
                                            Attn:    General Counsel

Receipt of this original counterpart of the foregoing Lease Supplement is hereby
acknowledged as the date hereof.

                                            FIRST UNION NATIONAL BANK, as the
                                            Agent

                                            By:
                                                --------------------------------
                                            Name:
                                                  ------------------------------
                                            Title:
                                                   -----------------------------

                                            First Union National Bank
                                            c/o First Union Securities, Inc.
                                            301 South College Street, TW-14
                                            Charlotte, North Carolina 28288-5604
                                            Attn:  Van S. Jones


<PAGE>

                                   SCHEDULE 1
                            TO LEASE SUPPLEMENT NO. 1

                      (Description of the Leased Property)

Office  facility  formerly  known as the  Pointview  Office  Complex  located on
Cyanamid Drive and Berdan Avenue in the Township of Wayne,  Passaic County,  New
Jersey,  consisting  of two  (2)  buildings  of five  (5)  and  six  (6)  stores
respectively,  containing  approximately  490,780 square feet of net usable area
and  approximately  560,060 square feet of gross rentable area in the aggregate,
constructed on approximately  192 acres,  identified as Block 3703, Lot 1, Block
3703,  Lots 2 and 3 and  Block  4200,  Lot 1 on the Tax Maps of Wayne  Township,
together with certain  easements,  described on Schedule 1-C attached hereto and
incorporated herein by reference.


<PAGE>

                                  SCHEDULE 1-A
                            TO LEASE SUPPLEMENT NO. 1

                                   (Equipment)

All  equipment  purchased  from proceeds of the Advances and located on the real
property  described on Schedule 1-C attached hereto and  incorporated  herein by
reference.


<PAGE>

                                  SCHEDULE 1-B
                            TO LEASE SUPPLEMENT NO. 1

                                 (Improvements)

Two (2)  buildings  of five  (5) and  six (6)  stores  respectively,  containing
approximately  490,780 square feet of net usable area and approximately  560,060
square feet of gross rentable area in the aggregate.

Site  improvements  include  asphalt  paved  parking  areas,  curbing,  signage,
landscaping, yard lighting and drainage.


<PAGE>

                                  SCHEDULE 1-C
                            TO LEASE SUPPLEMENT NO. 1

                                     (Land)


<PAGE>

                                                          EXHIBIT B TO THE LEASE
                                                          ----------------------

This Instrument Prepared By and Mail To:
Moore & Van Allen, PLLC
Bank of America Corporate Center
100 North Tryon Street, Floor 47
Charlotte, NC  28202-4003
Attention:  Lea Stromire Johnson

----------------------------------------

                                                        Space above this line
                                                        for Recorder's use

--------------------------------------------------------------------------------

                          MEMORANDUM OF LEASE AGREEMENT
                                       AND
                             LEASE SUPPLEMENT NO. 1

      THIS   MEMORANDUM  OF  LEASE   AGREEMENT  AND  LEASE   SUPPLEMENT   NO.  1
("Memorandum"),  dated as of September  26, 2001,  is by and between FIRST UNION
DEVELOPMENT  CORPORATION,  a North Carolina corporation (hereinafter referred to
as "Lessor") and TOYS "R" US, INC., a Delaware corporation (hereinafter referred
to as "Lessee").

                                   WITNESSETH:

      That for value received, Lessor and Lessee do hereby covenant, promise and
agree as follows:

      1. Demised  Premises and Date of Lease.  Lessor has leased to Lessee,  and
Lessee has leased from Lessor,  for the Term (as hereinafter  defined),  certain
real  property and other  property  located in the Township of Wayne,  County of
Passaic, State of New Jersey and identified on the Tax Maps of Wayne Township as
Block  3703,  Lot 1,  Block  3703 Lots 2 and 3 and  Block  4200,  Lot 1,  which,
together with certain  easements,  is described in the attached  Schedule 1 (the
"Property"),  pursuant  to the terms of a Lease  Agreement  between  Lessor  and
Lessee  dated as of  September  26,  2001 (as  such  may be  amended,  modified,
extended, supplemented, restated and/or replaced from time to time, "Lease") and
a Lease Supplement No.1 between Lessor and Lessee dated as of September 26, 2001
(the "Lease Supplement").

      The Lease and the Lease Supplement  shall  constitute a mortgage,  deed of
trust and security agreement and financing statement under the laws of the state
in which the Property is situated.  The maturity date of the obligations secured
thereby shall be September 26, 2011, unless extended.

      For purposes of provisions of the Lease and the Lease  Supplement  related
to the  creation  and  enforcement  of the Lease and the Lease  Supplement  as a
security agreement and a fixture filing,  Lessee is the debtor and Lessor is the
secured party. The mailing addresses of the debtor


<PAGE>

(Lessee herein) and of the secured party (Lessor herein) from which  information
concerning  security interests hereunder may be obtained are as set forth on the
signature pages hereof.  A carbon,  photographic  or other  reproduction of this
Memorandum  or of any  financing  statement  related  to the Lease and the Lease
Supplement shall be sufficient as a financing  statement for any of the purposes
referenced herein.

      2. Term, Renewal, Extension and Purchase Option. The term of the Lease for
the Property  ("Term")  commenced  as of September  26, 2001 and shall end as of
September  26,  2011,  unless  the Term is  extended  or earlier  terminated  in
accordance with the provisions of the Lease.  The Lease contains  provisions for
renewal and extension. The tenant has a purchase option under the Lease.

      3. Tax Payer Numbers.

         Lessor's tax payer number:  56-1610288.

         Lessee's tax payer number:  22-3260693.

      4. Mortgage;  Power of Sale. Lessor and Lessee intend that for bankruptcy,
receivership,  UCC commercial law and real estate law this Lease will be treated
as a  financing  arrangement  and  Lessee  will be  treated  as the owner of the
Property.

      Without  limiting any other remedies set forth in the Lease,  in the event
that a court of  competent  jurisdiction  rules  that the  Lease  constitutes  a
mortgage,  deed of trust or other  secured  financing  as is the  intent  of the
parties,  then Lessor and Lessee agree that Lessee has granted,  pursuant to the
terms of the Lease and the Lease  Supplement,  a Lien against the Property  WITH
POWER OF SALE, and that,  upon the occurrence and during the  continuance of any
Lease Event of Default, Lessor shall have the power and authority, to the extent
provided by law, after prior notice and lapse of such time as may be required by
law, to foreclose its interest (or cause such interest to be  foreclosed) in all
or any part of the Property.

      5.  Restriction  on  Collateralization.  Except to the extent  required or
permitted  by the  Operative  Agreements,  Lessor  shall not  mortgage,  pledge,
hypothecate or encumber its interest in the Lease or the Property.

      6. Effect of Memorandum.  The purpose of this instrument is to give notice
of the Lease and the Lease Supplement and their respective terms,  covenants and
conditions  to the same  extent as if the Lease  and the Lease  Supplement  were
fully set forth  herein.  This  Memorandum  shall not  modify in any  manner the
terms, conditions or intent of the Lease or the Lease Supplement and the parties
agree that this Memorandum is not intended nor shall it be used to interpret the
Lease or the Lease  Supplement  or determine the intent of the parties under the
Lease or the Lease Supplement.

      7. Lessee Acknowledgment. The Lessee hereby acknowledges that the Lessor's
rights hereunder have been assigned to First Union National Bank, as Agent.


                                       2
<PAGE>

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

                                     LESSOR:

                                     FIRST UNION DEVELOPMENT CORPORATION


                                     By:
                                         -----------------------------------
                                     Name:
                                           ---------------------------------
                                     Title:
                                            --------------------------------


                                     First   Union   Development Corporation
                                     One First Union Center
                                     301  South  College Street
                                     Charlotte,   North Carolina  28288-5604
                                     Attn:
                                           ---------------------------------

                                     LESSEE:

                                     TOYS "R" US, INC.


                                     By:
                                         -----------------------------------
                                     Name:
                                           ---------------------------------
                                     Title:
                                            --------------------------------

                                     461 From Road
                                     Paramus, New Jersey  07652
                                     Attn:    General Counsel


<PAGE>

STATE OF NORTH CAROLINA:
                       SS
COUNTY OF MECKLENBURG:

      I certify that on  ___________,  2001  personally  came before me and this
person  acknowledged  under oath to my satisfaction that: (a) this person is the
___________   of  First  Union   Development   Corporation,   a  North  Carolina
corporation, named in the foregoing Mortgage; and (b) the foregoing Mortgage was
signed and delivered by the  corporation as its voluntary act duly authorized by
a proper resolution of its Board of Directors.

      WITNESSETH my hand and seal.

                                            ____________________________________
                                            Notary Public

My Commission Expires:_______________


<PAGE>

STATE OF ___________________________________:
                                            SS
COUNTY OF  _________________________________:

      I certify that on  ___________,  2001  personally  came before me and this
person  acknowledged  under oath to my satisfaction that: (a) this person is the
___________  of Toys  "R" Us, a  Delaware  corporation,  named in the  foregoing
Mortgage;  and (b) the  foregoing  Mortgage  was  signed  and  delivered  by the
corporation as its voluntary act duly  authorized by a proper  resolution of its
Board of Directors.

      WITNESSETH my hand and seal.

                                            ____________________________________
                                            Notary Public

My Commission Expires:_______________
<PAGE>

                                   SCHEDULE 1
                                   ----------

                            (Description of Property)