Exhibit 10.2




                                 EXECUTION COPY

                               TERM LOAN AGREEMENT

                                   dated as of

                                December 8, 2000

                                      among

                      SECURITY CAPITAL GROUP INCORPORATED,
                                as the Borrower,

         EACH OF THE FINANCIAL INSTITUTIONS INITIALLY A SIGNATORY HERETO
            TOGETHER WITH THEIR ASSIGNEES UNDER SECTION 10.8. HEREOF,
                                 AS THE LENDERS,

                             BANK OF AMERICA, N.A.,
                             as Documentation Agent,

               COMMERZBANK AG, NEW YORK AND GRAND CAYMAN BRANCHES,
                            as Co-Documentation Agent

                            THE CHASE MANHATTAN BANK
                              as Syndication Agent,

                                     Each of
                     WELLS FARGO BANK, NATIONAL ASSOCIATION
                                       and
                             CHASE SECURITIES INC.,
                     as Co-Lead Arranger/Joint Book Manager,

                                       and

                     WELLS FARGO BANK, NATIONAL ASSOCIATION,
                             as Administrative Agent



<PAGE>


                                TABLE OF CONTENTS


ARTICLE I.  DEFINITIONS.......................................................1

         SECTION 1.1.  Definitions............................................1
         SECTION 1.2.  Accounting Terms and Determinations; Time References...19
         SECTION 1.3.  Subsidiaries...........................................20
         SECTION 1.4.  Interpretation Generally...............................20

ARTICLE II.  CREDIT FACILITY..................................................20

         SECTION 2.1.  Making of Term Loans...................................20
         SECTION 2.2.  Request for Term Loans.................................21
         SECTION 2.3.  Funding................................................21
         SECTION 2.4.  Continuation...........................................21
         SECTION 2.5.  Conversion.............................................22
         SECTION 2.6.  Interest Rate..........................................22
         SECTION 2.7.  Number of Interest Periods.............................22
         SECTION 2.8.  Repayment of Loans.....................................23
         SECTION 2.9.  Extension of Termination Date..........................24
         SECTION 2.10. Inclusion of Securities in Unencumbered Pool...........24
         SECTION 2.11. Notes..................................................24

ARTICLE III.  GENERAL LOAN PROVISIONS.........................................24

         SECTION 3.1.  Fees...................................................24
         SECTION 3.2.  Computation of Interest and Fees.......................25
         SECTION 3.3.  Pro Rata Treatment.....................................25
         SECTION 3.4.  Sharing of Payments, Etc...............................25
         SECTION 3.5.  Defaulting Lenders.....................................26
         SECTION 3.6.  Usury..................................................26
         SECTION 3.7.  Agreement Regarding Interest and Charges...............26
         SECTION 3.8.  Statements of Account..................................27
         SECTION 3.9.  Agent's Reliance.......................................27
         SECTION 3.10. Foreign Lenders........................................27

ARTICLE IV. YIELD PROTECTION, ETC.............................................27

         SECTION 4.1.  Additional Costs; Capital Adequacy.....................27
         SECTION 4.2.  Suspension of LIBOR Loans..............................29
         SECTION 4.3.  Illegality.............................................29
         SECTION 4.4.  Compensation...........................................29
         SECTION 4.5.  Affected Lenders.......................................30
         SECTION 4.6.  Treatment of Affected Loans............................30
         SECTION 4.7.  Change of Lending Office...............................31

ARTICLE V.  CONDITIONS........................................................31

         SECTION 5.1.  Initial Conditions.....................................31
         SECTION 5.2.  Conditions to Loans....................................33




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<PAGE>


         SECTION 5.3.  Conditions as Covenants................................34
         SECTION 5.4.  Termination if Conditions Not Satisfied................34

ARTICLE VI.  REPRESENTATIONS AND WARRANTIES...................................34

         SECTION 6.1.  Existence and Power....................................34
         SECTION 6.2.  Ownership Structure....................................34
         SECTION 6.3.  Authorization of Agreement, Notes, Loan Documents
                         and Borrowings.......................................34
         SECTION 6.4.  Compliance of Agreement, Notes, Loan Documents and
                         Borrowing with Laws, etc.............................35
         SECTION 6.5.  Compliance with Law; Governmental Approvals............35
         SECTION 6.6.  Indebtedness and Guarantees............................35
         SECTION 6.7.  Transactions with Affiliates...........................35
         SECTION 6.8.  Absence of Defaults....................................36
         SECTION 6.9.  Financial Information..................................36
         SECTION 6.10. Litigation.............................................36
         SECTION 6.11. ERISA..................................................36
         SECTION 6.12. Environmental Matters..................................36
         SECTION 6.13. Taxes..................................................37
         SECTION 6.14. Other Related Companies................................37
         SECTION 6.15. Not an Investment Company..............................37
         SECTION 6.16. Full Disclosure........................................37
         SECTION 6.17. Insurance..............................................38
         SECTION 6.18. Not Plan Assets........................................38
         SECTION 6.19. Sole Shareholder.......................................38
         SECTION 6.20. Unencumbered Pool Securities...........................38
         SECTION 6.21. Solvency...............................................38

ARTICLE VII.  COVENANTS.......................................................39

         SECTION 7.1.  Information............................................39
         SECTION 7.2.  Payment of Obligations.................................41
         SECTION 7.3.  Maintenance of Property; Insurance.....................41
         SECTION 7.4.  Conduct of Business and Maintenance of Existence.......42
         SECTION 7.5.  Compliance with Laws...................................42
         SECTION 7.6.  Inspection of Property, Books and Records..............42
         SECTION 7.7.  Financial Covenants....................................42
         SECTION 7.8.  Sales of Unencumbered Pool Securities..................43
         SECTION 7.9.  Limitation on Dividends and Other Payment
                         Restrictions Affecting Subsidiaries..................43
         SECTION 7.10. Consolidations, Mergers and Sales of Assets............44
         SECTION 7.11. Use of Proceeds........................................44
         SECTION 7.12. ERISA..................................................45
         SECTION 7.13. Negative Pledge........................................45
         SECTION 7.14. Restricted Payments; Agreements with Affiliates........45
         SECTION 7.15. Loans to Other Persons.................................45




                                      -ii-


<PAGE>


         SECTION 7.16.  ERISA Exemptions......................................46
         SECTION 7.17.  Exchange Listing......................................46
         SECTION 7.18.  Subsidiary Guaranties.................................46
         SECTION 7.19.  Covenants Regarding Guarantors........................46
         SECTION 7.20.  Investment Limitation.................................47
         SECTION 7.21.  Minimum Ownership by Borrower and Guarantors..........47

ARTICLE VIII.  DEFAULTS.......................................................48

         SECTION 8.1.  Events of Default......................................48
         SECTION 8.2.  Remedies...............................................50
         SECTION 8.3.  Allocation of Proceeds.................................50
         SECTION 8.4.  Rescission of Acceleration by Supermajority Lenders....51

ARTICLE IX.  THE AGENT........................................................51

         SECTION 9.1.  Appointment and Authorization..........................51
         SECTION 9.2.  Agent and Affiliates...................................52
         SECTION 9.3.  Approvals of Lenders...................................52
         SECTION 9.4.  Consultation with Experts..............................53
         SECTION 9.5.  Liability of Agent.....................................53
         SECTION 9.6.  Indemnification of Agent...............................53
         SECTION 9.7.  Credit Decision........................................54
         SECTION 9.8.  Successor Agent........................................54
         SECTION 9.9.  Titled Parties.........................................55

ARTICLE X.  MISCELLANEOUS.....................................................55

         SECTION 10.1. Notices................................................55
         SECTION 10.2. No Waivers.............................................56
         SECTION 10.3. Expenses...............................................56
         SECTION 10.4. Stamp, Intangible and Recording Taxes..................58
         SECTION 10.5. Indemnification........................................58
         SECTION 10.6. Setoff.................................................58
         SECTION 10.7. Amendments.............................................59
         SECTION 10.8. Successors and Assigns.................................60
         SECTION 10.9. Governing Law..........................................61
         SECTION 10.10.Litigation.............................................61
         SECTION 10.11.Counterparts; Integration..............................62
         SECTION 10.12.Notice of Final Agreement..............................62
         SECTION 10.13.Invalid Provisions.....................................63
         SECTION 10.14.Additional Guarantors; Release of Guarantors...........63



Exhibit A                Form of Assignment and Acceptance Agreement
Exhibit B                Form of Guaranty
Exhibit C                Form of Notice of Borrowing
Exhibit D                Form of Notice of Continuation




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<PAGE>


Exhibit E                Form of Notice of Conversion
Exhibit F                Form of Note
Exhibit G                Form of Unencumbered Pool Certificate
Exhibit H                Form of Opinion of Borrower and Guarantor Counsel

Schedule 1.1.            Initial Guarantors
Schedule 2.10.           Unencumbered Pool Securities
Schedule 6.2.            Ownership Structure
Schedule 6.6.            Indebtedness and Guarantees
Schedule 6.17.           Insurance
Schedule 6.20.           Agreements Restricting Sale of Traded Securities














                                      -iv-


<PAGE>


                              TERM LOAN AGREEMENT


         THIS TERM LOAN  AGREEMENT  (this  "Agreement")  dated as of December 8,
2000 by and among SECURITY CAPITAL GROUP  INCORPORATED,  a Maryland  corporation
("Borrower"),  each of the financial  institutions  initially a signatory hereto
together with their  assignees  pursuant to Section 10.8.  ("Lenders"),  BANK OF
AMERICA, N.A., as Documentation Agent (the "Documentation  Agent"),  COMMERZBANK
AG,  NEW  YORK  AND  GRAND  CAYMAN  BRANCHES,  as  Co-Documentation  Agent  (the
"Co-Documentation  Agent"),  THE CHASE  MANHATTAN  BANK,  successor by merger to
Chase  Bank  Of  Texas,   National   Association,   as  Syndication  Agent  (the
"Syndication   Agent"),   WELLS  FARGO  BANK,  NATIONAL  ASSOCIATION  and  CHASE
SECURITIES  INC.,  as  Co-Lead   Arrangers/Joint  Book  Managers  (the  "Co-Lead
Arrangers")  and  WELLS  FARGO  BANK,  NATIONAL   ASSOCIATION,   as  contractual
representative  for Lenders to the extent and in the manner  provided in Article
IX. below (in such capacity "Agent").

         WHEREAS,  Borrower  has  requested  that  Lenders  make  term  loans to
Borrower in an aggregate  principal  amount of  $530,000,000  which  Lenders are
willing to do on, and subject to, the terms and conditions of this Agreement;

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

                             ARTICLE I. DEFINITIONS

         SECTION 1.1.  Definitions.

         The following terms, as used herein, have the following meanings:

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

         "Additional Costs" has the meaning given that term in Section 4.1.

         "Affiliate"  means any Person which  controls,  is  controlled by or is
under common control with  Borrower.  As used herein,  the term "control"  means
possession, directly or indirectly, of the power to vote twenty percent (20%) or
more of any class of  voting  securities  of a Person or to direct or  otherwise
cause the direction of the management or policies of a Person,  whether  through
the ownership of voting securities, by contract or otherwise.

         "Applicable  Law"  means all  applicable  provisions  of local,  state,
federal and foreign constitutions,  statutes,  rules,  regulations,  ordinances,
decrees,  permits,  concessions  and orders of all  governmental  bodies and all
orders and decrees of all courts, tribunals and arbitrators.

         "Applicable  Margin" means the percentage  per annum  determined at any
time based on the range into which  Borrower's  Credit  Rating  then  falls,  in
accordance  with the table set forth


<PAGE>


below.  Any change in Borrower's  Credit Rating which would cause the Applicable
Margin to be  determined  based on a  different  Level in the table  shall  take
effect on the date on which such change occurs.  Notwithstanding anything to the
contrary in this  paragraph,  during any period in which  Borrower has no Credit
Rating from either S&P or Moody's, the Applicable Margin shall be the percentage
corresponding to Level 6 in the table. During any period in which Borrower shall
only have one Credit Rating, the Applicable Margin shall be based on such Credit
Rating.  During any period that Borrower  receives  only two Credit  Ratings and
such  Credit  Ratings  are  not  equivalent,  the  Applicable  Margin  shall  be
determined  by the lower of such two Credit  Ratings.  During  any  period  that
Borrower  receives more than two Credit  Ratings and such Credit Ratings are not
equivalent,  the  Applicable  Margin shall be determined by the lower of the two
highest Credit Ratings.


<TABLE>
<CAPTION>
<S>              <C>                                    <C>                              <C>


-------------- ------------------------------------------ ---------------------------- ----------------------------
                       Borrower's Credit Rating              Applicable Margin for     Applicable Margin for Base
    Level          (S&P/Moody's/Fitch or equivalent)              LIBOR Loans                  Rate Loans
-------------- ------------------------------------------ ---------------------------- ----------------------------
      1        A/A2 or equivalent                                     1.00%                        0.0%
-------------- ------------------------------------------ ---------------------------- ----------------------------
      2        A-/A3 or equivalent                                    1.10%                        0.0%
-------------- ------------------------------------------ ---------------------------- ----------------------------
      3        BBB+/Baa1 or equivalent                                1.20%                        0.0%
-------------- ------------------------------------------ ---------------------------- ----------------------------
      4        BBB/Baa2 (or equivalent)                               1.30%                        0.0%
-------------- ------------------------------------------ ---------------------------- ----------------------------
      5        BBB-/Baa3 (or equivalent)                              1.40%                        0.10%
-------------- ------------------------------------------ ---------------------------- ----------------------------
      6        Lower than BBB-/Baa3 or equivalent                     1.80%                        0.50%
-------------- ------------------------------------------ ---------------------------- ----------------------------
</TABLE>


         "Approved Issuer" means an Issuer which the  Supermajority  Lenders has
approved  in  writing as being  eligible  for  inclusion  in  determinations  of
Borrower's  compliance  with the  limitation of clause (a) of the  definition of
Unencumbered Pool Value. As of the Effective Date, the only Approved Issuers are
Archstone  Communities Trust,  CarrAmerica Realty Corp., ProLogis Trust, Regency
Realty Corporation and Storage USA, Inc.

         "Assignee" has the meaning given that term in Section 10.8.(c).

         "Assignment   and  Acceptance   Agreement"   means  an  Assignment  and
Acceptance Agreement between a Lender and an Assignee, substantially in the form
of Exhibit A.

         "Authorized  Representative"  means,  with  respect to any Person,  the
Chairman, Vice Chairman, any Managing Director, the Chief Financial Officer, any
controller or any other officer,  employee or representative of such Person duly
authorized  by such  Person to act on behalf of such Person in  connection  with
this Agreement and the transactions  contemplated hereby; provided that evidence
of such authority shall have been provided to Agent promptly  following  Agent's
request  therefor and such evidence shall be  satisfactory in form and substance
to Agent.

         "Available  Loan Amount"  means,  at any time,  the amount,  if any, by
which (a) the  Unencumbered  Pool Value at such time divided by 2.0, exceeds (b)
all Unsecured Liabilities (excluding the Loans) of Borrower and its Consolidated
Subsidiaries.




                                      -2-


<PAGE>


         "Base Rate"  means the  greater of (a) the rate of  interest  per annum
established  from time to time by Agent and  designated as its prime rate (which
rate of interest  may not be the lowest rate  charged by Agent or any of Lenders
on similar  loans) and (b) the Federal  Funds Rate plus  one-half of one percent
(0.5%). Each change in the Base Rate shall become effective without prior notice
to Borrower or Lenders  automatically  as of the opening of business on the date
of such change in the Base Rate.

         "Base Rate Loan"  means any Loan  hereunder  with  respect to which the
interest rate is calculated by reference to the Base Rate.

         "Business Day" means (a) any day except a Saturday, Sunday or other day
on which  commercial  banks  in  Atlanta,  Georgia,  New  York,  New York or San
Francisco, California are authorized or required to close and (b) with reference
to LIBOR Loans,  any such day on which  dealings in Dollar  deposits are carried
out in the London interbank market.

         "Capital  Management  Entity" means a Subsidiary of the Borrower  which
(i) provides  investment  management or investment advisory services pursuant to
any contract or agreement  or series of  contracts or  agreements;  or (ii) is a
Person that (A) is  registered  under the  Investment  Company  Act of 1940,  as
amended (the "Investment Company Act"), or (B) is exempt from registration under
the Investment  Company Act and makes passive  investments in companies or funds
in which such Person does not have  representation  on the board of directors or
similar body or participate on a regular basis in the management of such company
or fund. Any Subsidiary which is or would be included in the "Financial Services
Division"  of the Borrower as currently  disclosed on the  Borrower's  financial
statements  shall not be  included  as a Capital  Management  Entity.  As of the
Effective  Date,  the only Capital  Management  Entities  are  Security  Capital
European Realty and Security Capital Preferred Growth Incorporated.

         "Capitalized  Lease  Obligation"  means  Indebtedness   represented  by
obligations  under a lease that is  required  to be  capitalized  for  financial
reporting purposes in accordance with generally accepted accounting  principles,
and the  amount of such  Indebtedness  shall be the  capitalized  amount of such
obligations determined in accordance with such principles.

         "Cash Flow" means, with respect to a Person for the four fiscal quarter
period ending as of the date of determination, such Person's net income for such
period determined in accordance with generally accepted  accounting  principles,
except  that  cash  dividends  and  other  cash  received  from  Investments  in
Consolidated  Subsidiaries,  other  Subsidiaries  or any other  Persons shall be
substituted  for net  income  of  Consolidated  Subsidiaries  and for  equity in
earnings of any such  Subsidiaries or other Persons,  exclusive of the following
amounts  (but only to the extent that any of the  following  amounts  were taken
into account when  determining  such net income):  (a) income taxes  accrued for
such  period;  (b) interest  expense paid or accrued for such period  (excluding
interest accrued in respect of any "zero coupon"  Indebtedness and other similar
Indebtedness  for which interest is not due and payable);  (c)  depreciation and
amortization  expenses for such period;  (d) the return of capital  component of
dividends  received  for such period (to the extent that such  component  is not
reflected  already in net income);  (e) non-recurring  extraordinary  income and
expenses,   non-recurring  special  charges  (such  as




                                      -3-


<PAGE>


restructuring  charges,  non-recurring asset write-downs,  and costs and charges
related to asset  acquisitions and  dispositions),  and  non-recurring  costs or
charges related to accounting charges for such period; provided, however, to the
extent that the cash component of the expenses, costs and charges referred to in
this clause (e) would exceed $10,000,000 in the aggregate for such period,  such
excess shall not be excluded  from net income;  (f) capital gains and losses for
such period on any disposition of Investments in any Real Estate  Companies that
are Strategic Investees; and (g) unrealized gains and losses.

         "Cash Flow Available for Distribution"  means, with respect to a Person
for a given  period,  such  Person's  net income for such period  determined  in
accordance  with  generally  accepted  accounting  principles,  except that cash
dividends and other cash received from Investments in Consolidated Subsidiaries,
other  Subsidiaries  or any other Persons shall be substituted for net income of
Consolidated Subsidiaries and for equity in earnings of any such Subsidiaries or
other Persons,  exclusive of the following  amounts (but only to the extent that
any of the following  amounts were taken into account when  determining such net
income):  (a) interest expense accrued (but not paid) for such period (excluding
interest accrued in respect of any "zero coupon"  Indebtedness and other similar
Indebtedness  for which interest is not due and payable);  (b)  depreciation and
amortization  expenses for such period;  (c) the return of capital  component of
dividends  received  for such period (to the extent that such  component  is not
reflected  already in net income);  (d) non-recurring  extraordinary  income and
expenses,   non-recurring  special  charges  (such  as  restructuring   charges,
non-recurring  asset  write-downs,  and  costs  and  charges  related  to  asset
acquisitions and  dispositions),  and non-recurring  costs or charges related to
accounting charges for such period;  provided,  however,  to the extent that the
cash component of the expenses, costs and charges referred to in this clause (d)
would exceed $10,000,000 in the aggregate for such period, such excess shall not
be excluded from net income; (e) capital gains and losses for such period on any
disposition  of  Investments  in any Real Estate  Companies  that are  Strategic
Investees; and (f) unrealized gains and losses.

         "Cash Flow to Interest  Ratio" means,  for any Person and for any given
period,  the ratio of (a) the sum of each of the following of such Person during
such period: (i) net income,  (ii) income taxes paid or accrued,  (iii) interest
expense paid or accrued (excluding any capitalized interest and interest accrued
in respect of any "zero-coupon"  Indebtedness or other similar  Indebtedness for
which interest is not due and payable) and (iv)  depreciation  and  amortization
deductions (but only to the extent, in each case, that such taxes,  expenses and
deductions are reflected in the calculation of such Person's net income for such
period) to (b)  interest  expense  paid or accrued  (excluding  any  capitalized
interest and interest  accrued in respect of any  "zero-coupon"  Indebtedness or
other similar  Indebtedness  for which  interest is not due and payable) by such
Person during such period, including interest on any Indebtedness of such Person
convertible into capital stock of such Person.

         "Chase"  means  The  Chase  Manhattan  Bank,  and  its  successors  and
permitted assigns.

         "Commitment" means, as to each Lender, such Lender's obligation to make
a Term Loan to the Borrower on the Effective Date pursuant to Section 2.1. in an
amount up to, but not




                                      -4-


<PAGE>


exceeding,  the amount set forth for such Lender on its signature page hereto as
such Lender's "Commitment Amount."

         "Compliance  Certificate"  means the  certificate  described in Section
7.1.(c).

         "Consolidated  Subsidiary" means, with respect to a Person at any date,
any Subsidiary or other entity the accounts of which would be consolidated  with
those of such Person in its consolidated financial statements in accordance with
generally accepted accounting principles, if such statements were prepared as of
such date (other than (a) any  Strategic  Investee,  (b) any Capital  Management
Entity  and (c) any  Subsidiary  that is a  preferred  stock  subsidiary  of any
Affiliate of such Person the economic interest in which Subsidiary owned by such
Person is less than 15% of the aggregate thereof).

         "Contingent   Obligation"   means,  for  any  Person,  any  commitment,
undertaking,  Guarantee or other obligation  constituting a contingent liability
that must be accrued under generally accepted accounting principles.

         "Continue",   "Continuation"   and  "Continued"   each  refers  to  the
continuation  of a LIBOR  Loan from one  Interest  Period  to the next  Interest
Period pursuant to Section 2.4.

         "Convert",  "Conversion"  and "Converted" each refers to the conversion
of a Loan of one Type into a Loan of another Type pursuant to Section 2.5.

         "Credit  Rating" of any Person  means the rating  assigned  by a Rating
Agency to the senior unsecured long term indebtedness of such Person.

         "Default"  means any condition or event which  constitutes  an Event of
Default  or which  with the  giving of  notice  or lapse of time or both  would,
unless cured or waived, become an Event of Default.

         "Defaulting Lender" has the meaning given that term in Section 3.5.

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

         "EBITDA"  means,  with  respect  to a  Person  and for a  given  period
determined on a consolidated  basis,  such Person's net income  exclusive of the
following (but only to the extent, in each case, reflected in the calculation of
such  Person's  net income for such  period):  (i) income taxes paid or accrued,
(ii)  interest  expense paid or accrued,  (iii)  depreciation  and  amortization
deductions,  (iv) extraordinary gains and losses (whether cash or noncash),  and
(v) non-recurring extraordinary expenses, non-recurring special charges (such as
restructuring  charges,  non-recurring asset write-downs,  and costs and charges
related to asset  acquisitions and  dispositions),  and  non-recurring  costs or
charges related to accounting charges for such period; provided, however, to the
extent that the cash component of the expenses, costs and charges referred to in
this clause (v) would exceed $10,000,000 in the aggregate for such period,  such
excess shall not be excluded from net income.




                                      -5-


<PAGE>


         "Effective  Date" means the date this  Agreement  becomes  effective in
accordance with Section 5.1.

         "Eligible  Assignee"  means any Person who is: (i)  currently a Lender;
(ii) a commercial bank,  trust company,  savings and loan  association,  savings
bank,  insurance  company,  investment  bank or pension fund organized under the
laws of the United  States of America,  or any state  thereof,  and having total
assets in excess of  $5,000,000,000;  or (iii) a commercial bank organized under
the laws of any other country which is a member of the Organization for Economic
Cooperation and  Development  ("OECD"),  or a political  subdivision of any such
country,  and having total assets in excess of  $10,000,000,000,  provided  that
such bank is acting  through a branch or agency  located in the United States of
America.  If such  Person  is not  currently  a  Lender,  such  Person's  senior
unsecured  long term  indebtedness  must be rated BBB or higher by S&P,  Baa2 or
higher by Moody's,  or the equivalent or higher of either such rating by another
rating agency acceptable to Agent. Notwithstanding the foregoing, if an Event of
Default shall have occurred and be continuing  under Section 8.1.(a) or (b), the
term "Eligible Assignee" shall mean any Person that is not an individual.

         "Environmental  Laws" means any and all Applicable Laws relating to the
environment  and that are  applicable to Borrower and its assets or  properties,
the effect of the  environment  on human health or to  emissions,  discharges or
releases of pollutants,  contaminants,  Hazardous  Substances or wastes into the
environment  including,  without limitation,  ambient air, surface water, ground
water,  or  land,  or  otherwise   relating  to  the  manufacture,   processing,
distribution,  use,  treatment,  storage,  disposal,  transport  or  handling of
pollutants,  contaminants,  Hazardous  Substances  or wastes or the  clean-up or
other remediation thereof.

         "ERISA" means the Employee  Retirement  Income Security Act of 1974, as
amended, or any successor statute.

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

         "ERISA  Plan" means any  employee  benefit  plan  subject to Title I of
ERISA.

         "Event of Default" means the occurrence of any of the events  specified
in Section  8.1.,  whatever  the  reason for such event and  whether it shall be
voluntary or  involuntary  or be effected by operation of law or pursuant to any
judgment  or  order  of any  court  or any  order,  rule  or  regulation  of any
governmental or nongovernmental  body;  provided that any requirement for notice
or lapse of time or any other condition has been satisfied.

         "Extension Request" has the meaning given that term in Section 2.9.

         "Federal  Funds Rate" means,  on any day,  the rate per annum  (rounded
upward,  if  necessary,  to the  nearest  1/100th  of 1%) equal to the  weighted
average of the rates on overnight Federal funds transactions with members of the
Federal  Reserve  System  arranged  by Federal  funds  brokers  on such day,  as
published  by the  Federal  Reserve  Bank of New York on the




                                      -6-


<PAGE>


Business Day next  succeeding  such day,  provided that (a) if such day is not a
Business  Day,  the  Federal  Funds Rate for such day shall be such rate on such
transactions  on the next  preceding  Business  Day as so  published on the next
succeeding  Business  Day,  and (b) if no such  rate is  published  on such next
succeeding  Business  Day,  the  Federal  Funds  Rate for such day  shall be the
average  rate  quoted to Agent on such day on such  transactions  as  reasonably
determined by Agent.

         "Fitch" means Fitch, Inc.

         "Fixed  Charges"  means,  with  respect to a Person for the four fiscal
quarter period ending as of the date of determination,  the sum of (a) the total
amount of accrued or paid  interest  (including,  without  limitation,  interest
expense  attributable to Capitalized  Lease  Obligations but excluding  interest
accrued  in  respect  of  any  "zero  coupon"  Indebtedness  and  other  similar
Indebtedness  for which interest is not due and payable) of such Person for such
period, and in any event shall include all accrued, paid or capitalized interest
with respect to any  Indebtedness  or other  obligation in respect of which such
Person  is  wholly or  partially  liable,  whether  pursuant  to any  repayment,
interest  carry,  performance  Guarantee or otherwise  (excluding any such "zero
coupon"  Indebtedness  and other  similar  Indebtedness)  and in any event shall
include  all letter of credit  fees paid or accrued by such  Person  during such
period plus (b) regularly  scheduled  principal payments on Indebtedness of such
Person  during  such  period,  other  than (i) any  balloon,  bullet or  similar
principal  payment payable on any  Indebtedness of such Person which spreads the
final payment  thereof over a period and thereby  reduces  refinancing  risk and
repays such Indebtedness in full and (ii) in the case of the Borrower, principal
payments  in respect of the Term  Loans.  "Fixed  Charges"  shall  include  such
Person's ownership share of all of the foregoing of any Affiliate of such Person
(excluding,  in the case of Borrower, any Affiliate that is a Strategic Investee
or Capital Management  Entity) that is not a Consolidated  Subsidiary (with such
ownership  share being based on the greater of such Person's  nominal  ownership
interest or economic  interest in any such Affiliate).  For purposes of clarity,
when determining Borrower's compliance with Section 7.7.(c), the amount of Fixed
Charges  of  Strategic  Investees  and  Capital  Management  Entities  shall  be
disregarded.

         "Foreign  Lender"  means  any  Lender  organized  under the laws of any
jurisdiction  other than the United States of America,  any State thereof or the
District of Columbia.

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

         "Governmental   Authority"  means  any  government  (or  any  political
subdivision  or  jurisdiction   thereof),   court,   bureau,   agency  or  other
governmental  authority having jurisdiction over Borrower,  any Guarantor or any
other Subsidiary, or any of its or their business, operations or properties.

         "Guarantee"  by  any  Person  means  any   obligation,   contingent  or
otherwise,  of such Person directly or indirectly  guaranteeing any Indebtedness
or other  obligation of any other Person and, without limiting the generality of
the foregoing, any obligation,  direct or indirect,  contingent or otherwise, of
such Person (a) to purchase or pay (or advance or supply  funds for the purchase
or




                                      -7-


<PAGE>


payment of) such Indebtedness or other obligation  (whether arising by virtue of
partnership arrangements,  by agreement to keep-well, to purchase assets, goods,
securities  or services,  to  take-or-pay,  or to maintain  financial  statement
conditions  or otherwise) or (b) entered into for the purpose of assuring in any
other manner the obligee of such Indebtedness or other obligation of the payment
thereof or to protect such obligee  against loss in respect thereof (in whole or
in part),  provided that the term Guarantee shall not include  endorsements  for
collection or deposit in the ordinary course of business.  The term  "Guarantee"
used as a verb has a corresponding meaning.

         "Guarantor" means SC Realty  Incorporated,  a Nevada corporation,
Security  Capital Holdings S.A., a Luxembourg  corporation,  each of the Persons
identified  on Schedule  1.1. and any other  Subsidiary  of Borrower  that later
becomes a party to the Guaranty.

         "Guaranty"  means the Guaranty  dated as of the date hereof in favor of
Agent and Lenders to which each of the  Guarantors is a party and  substantially
in the form of Exhibit B.

         "Hazardous  Substances"  means  any  toxic,  radioactive,   caustic  or
otherwise hazardous substance, including petroleum, its derivatives, by-products
and  other  hydrocarbons,  or any  substance  having  any  constituent  elements
displaying any of the foregoing characteristics,  which if managed, disposed of,
released or discharged would require  reporting,  clean-up or remediation  under
Environmental Laws.

         "Homestead"   means   Homestead   Village   Incorporated,   a  Maryland
corporation, and its successors.

         "Indebtedness"  of any Person means at any date,  without  duplication,
(a) all  obligations of such Person for borrowed  money,  (b) all obligations of
such  Person  evidenced  by  bonds,  debentures,  notes  or other  similar  debt
instruments,  (c) all  obligations  of such Person to pay the purchase  price of
property or services if such  obligations  are payable after the receipt of such
property or rendition of such services,  except (i) accounts  payable arising in
the  ordinary  course of  business,  (ii)  obligations  incurred in the ordinary
course to pay the purchase price of Securities so long as such  obligations  are
paid  within  customary  settlement  periods and (iii)  obligations  to purchase
Securities pursuant to subscription or stock purchase  agreements,  or otherwise
make capital contributions, in or with respect to Strategic Investees or Capital
Management  Entities,  (d) all Capitalized Lease Obligations of such Person, (e)
all  reimbursement  obligations  of such  Person  under  letters  of  credit  or
acceptances in respect of drawings thereunder to the extent not reimbursed,  (f)
all Indebtedness  secured by a Lien on any asset of such Person,  whether or not
such  Indebtedness  is  otherwise  an  obligation  of such  Person,  and (g) all
Indebtedness of others Guaranteed by such Person or which is otherwise  recourse
to such Person,  including all  Indebtedness  of any  partnership  of which such
Person is a general  partner.  Notwithstanding  the  foregoing,  for purposes of
calculating  Borrower's  compliance with Section 7.7.,  accounts  payable (other
than deferred  compensation  and obligations  incurred in the ordinary course to
pay the purchase price of Securities so long as such obligations are paid within
customary settlement periods) of Borrower in excess of 3.0% of the undepreciated
book  value  (determined  in  accordance  with  generally  accepted   accounting
principles)  of the assets of the  Borrower,  at any time  outstanding  shall be
treated as Indebtedness to the extent of such excess. In addition,  for




                                      -8-


<PAGE>


purposes  of  calculating   Borrower's   compliance  with  Section  7.7.(d)  the
Borrower's  Indebtedness shall include the Borrower's  ownership share of all of
the foregoing of any Affiliate of Borrower  (excluding  any Affiliate  that is a
Strategic  Investee or a Capital  Management  Entity) that is not a Consolidated
Subsidiary  (with  such  ownership  share  being  based on the  greater  of such
Person's nominal ownership  interest or economic interest in any such Affiliate)
and which Indebtedness is secured in any manner by any Lien on any property.

         "Intangible  Assets" means, with respect to any Person,  the amount (to
the extent reflected in determining  stockholders' equity of such Person) of all
items which in accordance with generally accepted accounting principles would be
properly classified as intangible assets.

         "Interest  Period"  means with  respect to any LIBOR  Loan,  the period
commencing on the date of the borrowing, Conversion or Continuation of such Loan
and ending on the last day of the period  selected by  Borrower  pursuant to the
provisions  below. The duration of each Interest Period shall be one, two, three
or six  months,  in each  case as  Borrower  may,  in an  appropriate  Notice of
Borrowing,  Notice of Continuation or Notice of Conversion,  select. In no event
shall an Interest Period extend beyond the Termination  Date.  Whenever the last
day of any Interest  Period would otherwise occur on a day other than a Business
Day, the last day of such Interest Period shall be extended to occur on the next
succeeding Business Day; provided,  however,  that if such extension would cause
the last day of such  Interest  Period to occur in the next  following  calendar
month,  the last day of such Interest  Period shall occur on the next  preceding
Business Day.

         "Internal  Revenue  Code" means the Internal  Revenue Code of 1986,  as
amended, or any successor statute.

         "Investment"  means, with respect to a Person,  the legal or beneficial
ownership  by such  Person of any  capital  stock or other  equity  interest  in
another Person, whether or not such ownership constitutes a controlling interest
in such other Person,  and shall include all  Consolidated  Subsidiaries of such
Person.

         "Investment  Grade" means, with respect to an Issuer,  that such Issuer
has Credit Ratings of BBB-/Baa3 (or  equivalent) or better  assigned by at least
two of S&P, Moody's and Fitch.

         "Issuer"  means with  respect to a Security,  the Person  issuing  such
Security.

         "Lending  Office" means, for each Lender and for each Type of Loan, the
office of such Lender  specified as such on its signature  page hereto,  or such
other office of such Lender as such Lender may notify Agent in writing from time
to time.

         "LIBO Rate" means,  with respect to each Interest  Period,  the average
rate of interest per annum (rounded upwards,  if necessary,  to the next highest
1/16th of 1%) at which  deposits in immediately  available  funds in Dollars are
offered to Agent (at  approximately  9:00 a.m.,  two Business  Days prior to the
first  day of such  Interest  Period)  by first  class  banks  in the  interbank
Eurodollar  market  where the  Eurodollar  operations  of Agent are  customarily
conducted,  for delivery on the first day of such Interest Period, such deposits
being for a period of time equal or




                                      -9-


<PAGE>


comparable  to such  Interest  Period and in an amount equal to or comparable to
the principal  amount of the LIBOR Loan to which such Interest  Period  relates.
Each  determination  of the LIBO Rate by Agent shall, in absence of demonstrable
error, be conclusive and binding.

         "LIBOR  Loan"  means  any Loan  hereunder  with  respect  to which  the
interest  rate is  calculated  by  reference  to the LIBO Rate for a  particular
Interest Period.

         "Lien"  as  applied  to the  property  of any  Person  means:  (a)  any
mortgage,  deed to secure debt,  deed of trust,  pledge,  lien,  charge or lease
constituting a Capitalized  Lease  Obligation,  conditional  sale or other title
retention agreement,  or other security interest,  security title or encumbrance
of any kind in respect of any  property  of such  Person,  or upon the income or
profits  therefrom;  (b) any  arrangement,  express or implied,  under which any
property of such Person is transferred,  sequestered or otherwise identified for
the purpose of subjecting the same to the payment of Indebtedness or performance
of any other  obligation  in priority to the payment of the  general,  unsecured
creditors of such Person;  and (c) the filing of, or any agreement to give,  any
financing  statement under the Uniform  Commercial Code or its equivalent in any
jurisdiction.

         "Loan" means a Term Loan.

         "Loan Document" means this Agreement,  each of the Notes, the Guaranty,
any agreement  evidencing the fees referred to in Section 3.1.(b) and each other
document or  instrument  executed and  delivered by Borrower or any Guarantor in
connection with this Agreement or any of the other foregoing documents.

         "Majority  Lenders" means,  as of any date,  Lenders whose combined Pro
Rata Shares exceed 50.0%.

         "Market  Value"  means,  with  respect to a Security and on the date of
determination  thereof,  the value  determined in accordance  with the following
method applicable to such Security:

                  (a) in the case of a  Security  listed  on the New York  Stock
         Exchange, the American Stock Exchange, or some other principal national
         securities exchange in the United States of America,  the reported last
         sale price of a unit of such  security  regular way on a given day, or,
         in case no such  sale  takes  place on such  day,  the  average  of the
         reported  closing bid and asked prices regular way, in each case on the
         New York Stock  Exchange  Composite  Tape,  the American Stock Exchange
         Composite  Tape or the principal  national  securities  exchange in the
         United States of America on which the security is listed or admitted to
         trading, as applicable,  or, if such Security is not listed or admitted
         to trading on any national  securities exchange in the United States of
         America,  the  closing  sales  price,  or if there is no closing  sales
         price,  the  average  of the  closing  bid  and  asked  prices,  in the
         over-the-counter  market as reported  by the  National  Association  of
         Securities Dealers Automated Quotation System,

                  (b) in the case of a Security  listed on a principal  national
         securities exchange in Luxembourg, Amsterdam or other European country,
         the price of such  Security as




                                      -10-


<PAGE>


         reported  on such  exchange by the most  widely  recognized  reporting
         method  customarily  relied  upon by  financial  institutions  in such
         country  and  which  method  is   reasonably   acceptable  to  Co-Lead
         Arrangers,

                  (c) in the case of a  Security  issued by an  investment  fund
         which  invests  primarily  in the  Securities  of publicly  traded real
         estate  companies  and  the net  asset  value  of  which  is  regularly
         determined  (and in any event at least every three months) and reported
         publicly, the reported net asset value of such Security,

                  (d) in the case of any other  Security,  one of the following,
         as  provided  below  (determined  on a  per  share  basis  in a  manner
         acceptable to Co-Lead Arrangers):

                           (i) in the case of a  Security  issued  by a  private
                  investment  fund which invests  primarily in the Securities of
                  publicly traded real estate  companies and the net asset value
                  of which is  regularly  determined  (and in any event at least
                  every three  months) and  reported  to its  shareholders,  the
                  reported net asset value of such Security,

                           (ii)  the sum of (A)  EBITDA  of the  Issuer  of such
                  Security for the fiscal  quarter of such Issuer most  recently
                  ending  multiplied  by 4  divided  by 9.25% (or in the case of
                  Securities  issued by  Homestead,  EBITDA of Homestead for the
                  four fiscal quarter  period of Homestead most recently  ending
                  prior to the date of  determination  divided by 11.00%),  plus
                  (B) with  respect to any  tangible  assets of such Issuer that
                  did not  generate  income  included  in the  determination  of
                  EBITDA,  the book  value of such  assets as of the end of such
                  fiscal quarter, minus (C) the total liabilities of such Issuer
                  as of the end of such fiscal quarter, or

                           (iii) the book value of such Security as reflected on
                  the balance sheet of Borrower thereof as of the fiscal quarter
                  of Borrower most recently ending.

         Securities  issued by Urban Growth Property Trust,  CWS Communities and
         by BelmontCorp  shall be valued in accordance with the method described
         in the immediately preceding clause (ii), Securities issued by Security
         Capital European Real Estate Shares,  Security Capital Preferred Growth
         Incorporated  and  Security  Capital U.S.  Real Estate  Shares shall be
         valued in  accordance  with the  method  described  in the  immediately
         preceding  clause  (i),  and  Securities  issued  by  Security  Capital
         European Realty, City Center Retail Trust and Interparking Incorporated
         shall  be  valued  in  accordance  with  the  method  described  in the
         immediately preceding clause (iii); provided,  however, if Urban Growth
         Property Trust and Interparking Incorporated merge or otherwise combine
         pursuant to a transaction  not otherwise  prohibited by this Agreement,
         the  Securities  issued by the  entity  resulting  from such  merger or
         combination  shall be valued in accordance with the method described in
         the immediately  preceding clause (ii).  Securities of any other Issuer
         shall be valued  in  accordance  with one of such  methods  as  Co-Lead
         Arrangers and Borrower may agree.  The value of Securities of an Issuer
         may be  determined  in  accordance  with the  method  described  in the
         immediately  preceding  clause (iii) for a maximum period of two years,
         after  which such value  shall be  determined  in  accordance  with the
         immediately




                                      -11-


<PAGE>


         preceding  clause  (ii)  (or  clause  (i) in  the  case  of a  private
         investment  fund,  if  such  method  is  then  acceptable  to  Co-Lead
         Arrangers) if no other valuation  method referred to above should then
         apply.

Any  determination  of  the  "Market  Value"  of a  Security  pursuant  to  this
definition  shall be based on the  assumption  that offers of such  Security are
exempt from  registration  under the Securities  Act. In addition if the "Market
Value"  of a  Security  determined  pursuant  to the  above  provisions  of this
definition  would be less than zero,  then such "Market Value" shall be equal to
zero.

         "Market Value Net Worth" means, on a given date, (a) the sum of (i) the
Market Value on and as of such date of all Securities (excluding preferred stock
referred to in the immediately  following clause (ii)) owned by Borrower and its
Consolidated  Subsidiaries  and  which  Securities  are  issued  by Real  Estate
Companies,  (ii) the  aggregate  liquidation  preference  value of any preferred
stock owned by the Borrower and its Consolidated  Subsidiaries on and as of such
date,  (iii) the book value of all other assets of Borrower and its Consolidated
Subsidiaries  (excluding all Intangible Assets and Securities issued by a Person
which has no  publicly  traded  Securities)  on and as of such date and (iv) all
cash and cash equivalents of Borrower and its  Consolidated  Subsidiaries on and
as of such date, minus (b) the Total  Liabilities  (excluding  deferred taxes on
unrealized gains) of Borrower and its Consolidated  Subsidiaries as of such date
as determined in accordance with generally accepted accounting  principles.  The
Market  Value of  Securities  which are the  subject  of  purchase  obligations,
repurchase obligations, forward commitments and other unfunded obligations shall
be  included  in Market  Value Net Worth to the  extent  that the amount of such
purchase  obligations,  repurchase  obligations,  forward  commitments and other
unfunded obligations are included in Total Liabilities.

         "Materially  Adverse  Effect" means a materially  adverse effect on (a)
the business, assets, liabilities, financial condition, or results of operations
of  Borrower  and  its  Consolidated  Subsidiaries,  or any  Guarantor  and  its
Consolidated  Subsidiaries,  in each case taken as a whole,  (b) the  ability of
Borrower or any Guarantor to perform its obligations  under any Loan Document to
which it is a party,  (c) the  validity  or  enforceability  of any of such Loan
Documents,  (d) the rights and  remedies  of Lenders and Agent under any of such
Loan  Documents or (e) the timely payment of the principal of or interest on the
Loans or other amounts payable in connection therewith.

         "Moody's" means Moody's Investors Service, Inc.

         "Net  Worth"  means,  for any  Person,  all  amounts  which  would,  in
accordance  with generally  accepted  accounting  principles,  be included under
stockholders' equity on the balance sheet of such Person.

         "Non-ERISA Plan" means any Plan subject to Section 4975 of the Internal
Revenue Code.

         "Nonrecourse   Indebtedness"   means,   with   respect   to  a  Person,
Indebtedness for borrowed money in respect of which recourse for payment (except
for customary  exceptions for fraud




                                      -12-


<PAGE>


and other similar exceptions  acceptable to the Agent in its sole discretion) is
contractually  limited to specific  assets of such Person  encumbered  by a Lien
securing such Indebtedness.

         "Note" means a  promissory  note  executed by Borrower,  payable to the
order of a Lender,  substantially  in the form of  Exhibit F and in the  initial
principal amount equal to such Lender's Commitment.

         "Notice  of  Borrowing"  means a notice in the form of  Exhibit C to be
delivered to Agent pursuant to Section 2.2.  evidencing  Borrower's  request for
the borrowing of the Term Loans.

         "Notice of Continuation"  means a notice in the form of Exhibit D to be
delivered to Agent pursuant to Section 2.4.  evidencing  Borrower's  request for
the Continuation of a borrowing of Loans.

         "Notice  of  Conversion"  means a notice in the form of Exhibit E to be
delivered to Agent pursuant to Section 2.5.  evidencing  Borrower's  request for
the Conversion of a borrowing of Loans.

         "Obligations" means, individually and collectively:  (a) all Loans; (b)
any and all renewals and  extensions  of any of the  foregoing and (c) all other
indebtedness,  liabilities,  obligations, covenants and duties of Borrower owing
to Agent,  or any  Lender of every  kind,  nature and  description,  under or in
respect of this Agreement or any of the other Loan Documents,  whether direct or
indirect,  absolute or  contingent,  due or not due,  contractual  or  tortious,
liquidated or unliquidated, and whether or not evidenced by any promissory note.

         "Organizational  Documents"  means with  respect to a Person and to the
extent  applicable,  such  Person's  articles  of  incorporation,   articles  of
organization,  partnership  agreement,  bylaws  or  other  similar  organization
documents.

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

         "Permitted  Liens" means (a) pledges or deposits made to secure payment
of worker's  compensation  (or to  participate  in any fund in  connection  with
worker's compensation  insurance),  unemployment  insurance,  pensions or social
security  programs,   (b)  encumbrances   consisting  of  zoning   restrictions,
easements, or other restrictions on the use of real property, provided that such
items  do not  materially  impair  the use of  such  property  for the  purposes
intended  and none of which is violated in any  material  respect by existing or
proposed  structures  or land use,  (c) Liens for taxes not yet due and payable,
(d)  Liens  imposed  by  mandatory  provisions  of  Applicable  Law  such as for
materialmen's,  mechanic's,  warehousemen's  and other like Liens arising in the
ordinary course of business,  securing  payment of  Indebtedness  the payment of
which is not yet due, (e) Liens for taxes,  assessments and governmental charges
or assessments that are being contested in good faith by appropriate proceedings
diligently  conducted,  and for which reserves, if any, required under generally
accepted accounting principles have been provided, (f) Liens expressly permitted
under  the  terms of the  Loan




                                      -13-


<PAGE>


Documents, and (g) any extension, renewal or replacement of the foregoing to the
extent  such  Lien as so  extended,  renewed  or  replaced  would  otherwise  be
permitted hereunder.

         "Person" means an individual, a corporation,  a partnership,  a limited
liability company, an association,  a trust or any other entity or organization,
including a government or political  subdivision or an agency or instrumentality
thereof.

         "Plan"  means at any time an  employee  pension  benefit  plan which is
covered by Title IV of ERISA or subject to the minimum  funding  standards under
Section 412 of the Internal Revenue Code.

         "Pro  Rata  Share"  means,  with  respect  to  any  Lender,  (a) if the
Commitments  have not been terminated and the Term Loans have not been made, the
percentage  obtained by dividing (i) the amount of such  Lender's  Commitment by
(ii) the aggregate amount of Commitments of all Lenders;  (b) if the Commitments
have been  terminated  but the Term  Loans have not been  made,  the  percentage
obtained  by dividing  (i) the amount of such  Lender's  Commitment  immediately
prior  to such  termination  by (ii) the  aggregate  amount  of all  Commitments
immediately prior to such termination;  or (c) if the Term Loans have been made,
the percentage  obtained by dividing (i) the unpaid principal amount of the Term
Loan owing to such Lender by (ii) the unpaid principal amount of all Term Loans.

         "Public  Subsidiary"  means  any  Subsidiary  whose  Securities  having
ordinary  voting  power to elect  members  of the  board of  directors  or other
persons  performing similar functions are listed on the New York Stock Exchange,
American Stock Exchange or some other principal national  securities exchange or
have price  quotations in the  over-the-counter  market reported by the National
Association of Securities Dealers Automated Quotation System.

         "Qualifying Security" means, at any time of determination, any Security
(1) which is common stock,  beneficial  interest in a trust,  or the  equivalent
thereof,  (2) which is owned by, and  registered  in the name of,  Borrower or a
Guarantor  and (3) which at such  time  meets  all of the  following  conditions
(which compliance Agent shall have the right to confirm):

         (a) such  Security is not subject to any Lien other than Liens of the
types described in clauses (c) through (e) of the definition of Permitted Liens;

         (b) all  representations  and  warranties of Borrower in this Agreement
and the other Loan Documents relating in any way to such Security (or the Issuer
thereof)  are true in all  material  respects  (except  to the  extent  (i) such
representations  or  warranties  specifically  relate to an earlier date or (ii)
such  representations  or  warranties  become  untrue  by  reason  of  events or
conditions otherwise permitted hereunder and the other Loan Documents);

         (c) the Issuer of such Security (i) is a REIT;  (ii) has filed with its
most  recently  filed (or has  announced its intention to file with its initial)
federal income tax return an election to be a REIT or has made such election for
a previous  taxable year, and such election has not been  terminated or revoked;
(iii)  is  a  Real  Estate  Company   (including  any  organized  as  a  societe
d'investissement  a capital  fixe,  a 1929  holding  company,  or other  similar
entity);or (iv) is a fund




                                      -14-


<PAGE>


registered under the Investment  Company Act of 1940, which has net assets of at
least  $15,000,000  and whose  assets  consist only of  Securities  of the types
described in the immediately  preceding  clauses (i) through (iii) and temporary
investments in cash or cash equivalents;

         (d) either (a) the Issuer of such Security is Investment  Grade, or (b)
the  ratio of (i) such  Issuer's  Indebtedness  to (ii) its Net  Worth  plus the
amount  of  accumulated  depreciation  of  such  Issuer,  determined  as of such
Issuer's  fiscal quarter most recently  ending and in accordance  with generally
accepted  accounting  principles  (or other method of  accounting  acceptable to
Agent), does not exceed 1.0 to 1.0; and

         (e) no event or condition exists which permits any holder or holders of
Indebtedness  of such  Issuer,  any  trustee  or agent  acting on behalf of such
holder or holders or any other Person,  to  accelerate  the maturity of any such
Indebtedness  and such Person  shall not have waived its right to so  accelerate
with respect to such event.

         "Rating  Agency"  means  S&P,  Moody's,  Fitch or any other  nationally
recognized  securities  rating agency selected by Borrower and acceptable to the
Majority Lenders.

         "Real  Estate  Company"  means any Person (a) engaged  primarily in the
business of owning,  acquiring,  developing,  selling, leasing or operating real
property  and  related  assets or (b) who owns,  directly or  indirectly,  other
Persons engaged in the type of business  described in the immediately  preceding
clause (a).

         "Reduced Rate" has the meaning given that term in Section 3.10.

         "Regulations  T, U and X" means  Regulations T, U and X of the Board of
Governors of the Federal Reserve System, as in effect from time to time.

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

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

         "Related Company" means any of Borrower,  any Guarantor or any of their
respective Subsidiaries.

         "Restricted  Payment" means (a) cash payment or other  distributions of
property on, or in respect of, any class of stock of, or other  equity  interest
in, a Person,  or other payments or




                                      -15-


<PAGE>


transfers  of  property  made  in  respect  of  the  redemption,  repurchase  or
acquisition of such stock or equity  interest,  other than any  distribution  or
other  payment  payable  solely  in  capital  stock of such  Person  and (b) any
prepayment  of  principal  of,  premium,  if any,  or interest  on,  redemption,
conversion, exchange, purchase, retirement,  defeasance, sinking fund or similar
payment with respect to, any Indebtedness of Borrower or any of its Subsidiaries
that is subordinated in right of payment to the Loans and the other Obligations,
other than, so long as no Default or Event of Default shall have occurred and be
continuing  or  would  arise  therefrom,  any  redemption,  repurchase  or other
acquisition or retirement of any such  Indebtedness made by exchange for, or out
of the net cash proceeds of, a  substantially  concurrent  issue and sale of (i)
capital  stock  (other than any capital  stock to the extent that is or upon the
happening of an event or passage of time would be, required to be redeemed prior
to the Termination  Date or is redeemable at the option of the holder thereof at
any time prior to such maturity, or is convertible into or exchangeable for debt
securities at any time prior to such  maturity) of Borrower to any Person (other
than  to a  Subsidiary)  or  (ii)  Indebtedness  of  Borrower  so  long  as such
Indebtedness (1) is subordinated to the Loans and the other Obligations at least
to the same extent as the  subordinated  Indebtedness so redeemed,  repurchased,
retired or acquired  and (2) does not have a stated  maturity  earlier  than the
stated maturity for the  Indebtedness  being redeemed,  repurchased or otherwise
acquired or retired.

         "Revolving  Credit  Agreement"  means that certain Amended and Restated
Credit  Agreement  dated as of the date  hereof by and among the  Borrower,  the
financial  institutions  from time to time party thereto as  "Lenders",  Bank of
America,  N.A., as  Documentation  Agent,  Chase,  as Syndication  Agent,  Chase
Securities Inc. and Wells Fargo, as Co-Lead  Arrangers/Joint Book Managers,  and
Wells Fargo, as Administrative Agent.

         "S&P" means  Standard & Poor's Rating Group,  a division of McGraw-Hill
Companies, Inc.

         "Securities Act" means the Securities Act of 1933, as amended,  and all
rules and regulations issued pursuant thereto.

         "Security"  has the meaning given that term in Article 8 of the UCC and
shall in any event  include  capital  stock,  shares (as defined in Md.  Corps &
Ass'ns Code Ann.  ss.8-101(c)),  beneficial  interest in real estate  investment
trusts or other trusts, and other similar equity interests.

         "Service  Subsidiary"  means a  Subsidiary  of Borrower  that  provides
services  for a fee  and  which  Subsidiary  is  material  to  the  consolidated
financial condition of Borrower.

         "Shareholders' Equity" means, at any date with respect to a Person, the
Tangible Net Worth of such Person less, to the extent not otherwise  deducted in
the  determination  thereof,  the aggregate amount of Contingent  Obligations of
such Person, all determined as of such date.

         "Strategic  Investee" means,  with respect to the Borrower,  any Person
(other  than any  Guarantor  or any of the  Service  Subsidiaries)  of which the
Borrower  initially  owns,  directly  or  indirectly,   more  than  25%  of  the
outstanding securities or other ownership interests having ordinary voting power
to elect a majority of the board of  directors or other  individuals




                                      -16-


<PAGE>


performing  similar  functions.  As of the Effective  Date,  the only  Strategic
Investees are  Archstone  Communities  Trust,  BelmontCorp,  CarrAmerica  Realty
Corp.,  City Center Retail Trust,  CWS Communities  Trust,  Homestead,  ProLogis
Trust,  Regency Realty Corporation,  Storage USA, Inc. and Urban Growth Property
Trust. If Urban Growth  Property Trust and  Interparking  Incorporated  merge or
otherwise  combine  pursuant to a transaction  not otherwise  prohibited by this
Agreement,  the entity resulting from such merger or combination shall be deemed
to be a Strategic Investee.

         "Subsidiary"  means any Person of which  securities or other  ownership
interests  having  ordinary  voting  power to elect a  majority  of the board of
directors  or  other  persons  performing  similar  functions,  are at the  time
directly or indirectly owned by another Person,  or by one or more  Subsidiaries
of such other  Person or by such other  Person and one or more  Subsidiaries  of
such other Person.

         "Supermajority  Lenders" means, as of any date,  Lenders whose combined
Pro Rata Shares equal or exceed 66-2/3%.

         "Tangible Net Worth" means,  with respect to a Person,  at any date the
Net Worth of such Person less its Intangible  Assets,  all determined as of such
date in accordance with generally accepted accounting principles.

         "Term Loan" has the meaning given that term in Section 2.1.

         "Termination Date" means the first anniversary of the date on which the
Term Loans were made,  or such later date to which such date may be  extended in
accordance with Section 2.9.

         "Total  Liabilities" means, as to any Person, at a particular date, all
liabilities  which would,  in  conformity  with  generally  accepted  accounting
principles,  be properly  classified as a liability on the balance sheet of such
Person as at such date, and in any event shall (a) include (without duplication)
(i) Indebtedness of such Person, (ii) all Contingent Obligations of such Person,
(iii)  liabilities  of any  Affiliate of such Person that is not a  Consolidated
Subsidiary of such Person,  which  liabilities  such Person has Guaranteed or is
otherwise  obligated on a recourse  basis,  (iv) such Person's  ownership  share
(based on the greater of such Person's  nominal  ownership  interest or economic
interest  in  such  Affiliate)  of the  Nonrecourse  Indebtedness  of  any  such
Affiliate,  and (v) all purchase obligations,  repurchase  obligations,  forward
commitments (including forward commitments to purchase equity interests, to make
investments or to make loans) and any other unfunded obligations of such Person;
and (b) not include (i) any accounts payable owing to a trade creditor and which
is not  evidenced  by any  instrument  and  any  accounts  payable  representing
deferred compensation, (ii) accrued expenses, (iii) deferred taxes on unrealized
gains,  (iv)  declared but unpaid  dividends and (v) in the case of the Borrower
and its Subsidiaries,  Indebtedness or other liabilities of Strategic  Investees
or Capital Management Entities.

         "Traded  Security"  means  a  Security  meeting  all of  the  following
criteria:  (a) such  Security  (i) is  listed  on the New York  Stock  Exchange,
American Stock Exchange or some other




                                      -17-


<PAGE>


principal national securities exchange in the United States of America; (ii) has
price  quotations  in the  over-the-counter  market  reported  by  the  National
Association of Securities Dealers Automated  Quotation System or (iii) is listed
on the principal national  securities  exchange in Luxembourg,  the Netherlands,
the United Kingdom of Great Britain or other European country  acceptable to the
Co-Lead Arrangers; (b) such Security is not subject to any instrument,  document
or  agreement  which  in any way  prohibits  the sale of such  Security  for any
specified period of time or otherwise (other than (i) any agreement in existence
on the date hereof among the equity holders of the Issuer of such  Security,  or
any provision in existence on the date hereof in the Organizational Documents of
such Issuer,  which agreement or provision restricts the resale of such Issuer's
Securities,  as the same may be amended  or  otherwise  modified  with the prior
written consent of Majority Lenders,  and (ii) any agreement between Borrower or
a Guarantor and an  underwriter  entered into in connection  with an offering by
such  underwriter  of  Securities  of the  Issuer  of such  Security,  in  which
agreement Borrower agrees not to sell such Security for a period ending no later
than 180 days after such offering);  and (c) the offer and sale of such Security
by  Borrower  would not be subject  to any  registration  requirements  or other
restrictions  under the  Securities  Act or other  Applicable Law other than (i)
volume  limitations  imposed  under  Rule  144(e) of the  Securities  Act,  (ii)
restrictions  on the manner of resale  imposed  under Rule 144(f) and (g) of the
Securities Act, (iii)  restrictions under Regulation 144A or S of the Securities
and Exchange  Commission  and (iv) other  restrictions  related to the timing of
offers and sales consented to by the Majority Lenders in writing.

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

         "Unencumbered  Pool  Certificate"  means a report  substantially in the
form of Exhibit G certified by an Authorized Representative of Borrower, setting
forth a detailed  calculation of the  Unencumbered  Pool Value and including the
Market Value of the Qualifying  Securities,  the identity of each Issuer of such
Qualifying  Securities,  and reasonably detailed calculations  establishing that
the applicable Issuers meet the applicable requirements contained in clauses (a)
and (b) of the definition of Unencumbered Pool Value.

         "Unencumbered Pool Securities" means those Qualifying  Securities that,
pursuant  to  Section  2.10.,  are  to be  included  in  determinations  of  the
Unencumbered  Pool Value.  If at any time an  Unencumbered  Pool Security  shall
cease to be a  Qualifying  Security,  then it shall cease to be an  Unencumbered
Pool Security.

         "Unencumbered  Pool  Value"  means,  at any given time,  the  aggregate
Market Value of all Unencumbered Pool Securities at such time subject,  however,
to the following  limitations:  (a) at least 80% of the Unencumbered  Pool Value
shall be  attributable  to Traded  Securities  issued by Approved  Issuers  each
having a Cash Flow to Interest Ratio for the period of four  consecutive  fiscal
quarters  most  recently  ending  of  not  less  than  1.5  to  1.0,  (b) of the
Unencumbered  Pool Value  attributable  to such  Securities  referred  to in the
immediately  preceding  clause  (a),  no more  than 40% of such  value  shall be
attributable  to  Securities  issued  by  any  one  Approved  Issuer,   (c)  the
Unencumbered Pool Securities must be comprised of Securities issued by 5 or more
Issuers, and (d) the Unencumbered Pool Securities referred to in the immediately
preceding




                                      -18-


<PAGE>


clause (a) must be comprised of Securities issued by at least 3 Issuers that are
Investment  Grade. The amount of the obligation to purchase  Securities that are
the subject of purchase obligations, repurchase obligations, forward commitments
and other  unfunded  obligations  of the  Borrower  or any  Guarantor,  shall be
included when  determining  the  Unencumbered  Pool Value to the extent that the
amount of such purchase obligations, repurchase obligations, forward commitments
and other  unfunded  obligations  are  included in  Unsecured  Liabilities.  For
purposes of this definition,  the Market Value of Securities that are subject to
purchase  obligations,  repurchase  obligations,  forward  commitments and other
unfunded obligations of the Borrower or any Guarantor shall not be less than the
amount of these obligations.  From and after the date 10 Business Days following
the  Effective  Date,  the  Unencumbered  Pool  Value of all  Unencumbered  Pool
Securities  owned by any Guarantor  identified  on Schedule 1.1.  shall equal $0
unless prior to such 10th  Business Day the Borrower has  delivered to the Agent
the items referred to in Sections 5.1.(d), (e), and (j) through (m) with respect
to such Guarantor.

         "Unsecured Liabilities" means, as to any Person as of a given date, all
liabilities  which would,  in  conformity  with  generally  accepted  accounting
principles,  be properly  classified as a liability on the consolidated  balance
sheet  of such  Person  that  are not  secured  in any  manner  by a Lien in any
property,  and shall in any event include  (without  duplication) the following:
(a) all unsecured  Indebtedness  of such Person;  (b) all purchase  obligations,
repurchase  obligations,  forward commitments and unfunded obligations;  (c) all
accounts payable of such Person;  (d) all Guarantees by such Person of Unsecured
Liabilities of other Persons and (e) unsecured subordinated debt.

     "U.S.   Realty"   means   Security   Capital   U.S.   Realty,   a   societe
d'investissement  a capital  fixe  formed  under the laws of the Grand  Duchy of
Luxembourg, and its successors.

     "U.S. Realty  Acquisition" means the acquisition by SC Realty  Incorporated
of all of the issued and  outstanding  shares of common  stock and other  equity
interests of Security Capital Holdings S.A. owned by U.S. Realty,  together with
any related  transactions,  all as contemplated  by the U.S. Realty  Acquisition
Agreement.
     "U.S.  Realty  Acquisition   Agreement"  means  that  certain   Transaction
Agreement  dated as of  September  26,  2000 by and  among  Borrower,  SC Realty
Incorporated and U.S. Realty.

     "Wells  Fargo"  means  Wells  Fargo  Bank,  National  Association,  and its
successors and permitted assigns.

         SECTION 1.2.  Accounting Terms and Determinations; Time References.

         Unless  otherwise  specified  herein,  all accounting terms used herein
shall be interpreted, all accounting determinations hereunder shall be made, and
all financial statements required to be delivered hereunder shall be prepared in
accordance with generally accepted accounting  principles as in effect from time
to time,  applied on a basis  consistent  (except  for changes  concurred  in by
Borrower's   independent  public  accountants)  with  the  most  recent  audited
financial  statements  of Borrower  delivered  to  Lenders;  provided  that,  if
Borrower  notifies  Agent that Borrower  wishes to amend any covenant in Section
7.7.  or  7.14.(a)  hereof to  eliminate  the




                                      -19-


<PAGE>


effect  of  any  change  in  generally  accepted  accounting  principles  on the
operation of such  covenant  (or if Agent  notifies  Borrower  that the Majority
Lenders wish to amend any such Section for such purpose), then the compliance by
Borrower  with such  covenant  shall be  determined  on the  basis of  generally
accepted accounting  principles in effect immediately before the relevant change
in generally accepted accounting principles became effective,  until either such
notice is  withdrawn  or such  covenant is amended in a manner  satisfactory  to
Borrower and the Majority Lenders. When calculating (i) an Issuer's Cash Flow to
Interest Ratio for purposes of the definition of Unencumbered Pool Value and for
Section 2.10.  and (ii) the ratio of an Issuer's  Indebtedness  to its Net Worth
plus  accumulated  depreciation  for purposes of clause (d) of the definition of
Qualifying  Security and for Section  2.10.,  the  financial  statements of such
Issuer for a given fiscal  quarter may be used up to and  including  the date 65
days after the end of the immediately  following  fiscal quarter of such Issuer.
Unless  otherwise  indicated,  all  references  to time  are  references  to San
Francisco, California time.

         SECTION 1.3.  Subsidiaries.

         Unless   explicitly   set  forth  to  the  contrary,   a  reference  to
"Subsidiary"  shall  mean  a  Subsidiary  of  Borrower  and  a  reference  to an
"Affiliate" shall mean a reference to an Affiliate of Borrower.

         SECTION 1.4.  Interpretation Generally.

         References in this Agreement to "Sections",  "Articles", "Exhibits" and
"Schedules" are to sections,  articles, exhibits and schedules herein and hereto
unless  otherwise  indicated.  references  in this  Agreement  or any other Loan
Document  to any  document,  instrument  or  agreement  (a)  shall  include  all
exhibits, schedules and other attachments thereto, as updated from time to time,
(b) shall include all documents, instruments or agreements issued or executed in
replacement thereof, and (c) shall mean such document,  instrument or agreement,
or replacement or predecessor thereto, as amended, modified or supplemented from
time to time in  accordance  with its terms  and in  effect  at any given  time.
References  to a Person shall include the  permitted  successors  and assigns of
such Person. Terms not otherwise defined herein and which are defined in the UCC
are used herein with the  respective  meanings  given them in the UCC.  Wherever
from the context it appears appropriate, each term stated in either the singular
or plural  shall  include the singular  and plural,  and pronouns  stated in the
masculine,  feminine or neuter gender shall include the masculine,  the feminine
and the neuter.

                           ARTICLE II. CREDIT FACILITY

         SECTION 2.1.  Making of Term Loans.

         Subject to the terms and conditions set forth in this  Agreement,  each
Lender  severally  agrees to make a term loan (a "Term Loan") to Borrower on the
Effective  Date,  in a  principal  amount  not to exceed  the lesser of (a) such
Lender's  Commitment  and (b)  such  Lender's  Pro Rata  Share of the  aggregate
principal amount of Term Loans requested by Borrower in the Notice of Borrowing.
Notwithstanding  any  other  provision  of  this  Agreement  or any  other  Loan
Document,  no Term Loan shall be made to Borrower if Agent  determines  that the
making of




                                      -20-


<PAGE>


such Term Loan  would  result  in a  violation  of the  margin  requirements  of
Regulation  U as  specified  in 12  C.F.R.  ss.  221.3(a)(1)  (or any  successor
regulation).  Once  repaid,  the  principal  balance  of a Term  Loan may not be
reborrowed.

         SECTION 2.2.  Request for Term Loans.

         To  request  the Term  Loans,  Borrower  shall  deliver  the  Notice of
Borrowing  to Agent not later than (a) 9:00 a.m. at least one Business Day prior
to the Effective  Date if the Term Loans are to be Base Rate Loans and (b) 10:00
a.m. at least three  Business Days prior to the Effective Date if the Term Loans
are to be LIBOR  Loans.  The Notice of  Borrowing  shall  specify the  aggregate
principal  amount of Term Loans to be borrowed,  the date such Term Loans are to
be borrowed (which must be a Business Day on or after the Effective  Date),  the
Type of the  requested  Term Loans and if such Term Loans are to be LIBOR Loans,
the initial  Interest  Period for such Loans.  The Notice of Borrowing  shall be
irrevocable  once given and binding on Borrower.  Prior to delivering the Notice
of Borrowing,  Borrower may (without  specifying  whether the Term Loans will be
Base Rate Loans or LIBOR Loans)  request that Agent  provide  Borrower  with the
most recent LIBO Rate  available to Agent.  Agent shall provide such quoted rate
to  Borrower  and to Lenders on the date of such  request or as soon as possible
thereafter.

         SECTION 2.3.  Funding.

         Promptly  after receipt of the Notice of Borrowing  under Section 2.2.,
Agent shall  notify each Lender by telex or telecopy,  or other  similar form of
transmission  of the  proposed  borrowing.  No later than 9:00 a.m.  on the date
specified in the Notice of  Borrowing,  each Lender will make  available for the
account of its applicable  Lending Office to Agent at Agent's Lending Office, in
immediately  available  funds,  the proceeds of the Term Loan to be made by such
Lender. Upon fulfillment of all applicable  conditions  contained in Article V.,
Agent shall make available to Borrower at Agent's Lending Office, not later than
11:00 a.m. on the date  specified  in the Notice of  Borrowing,  the proceeds of
such Term Loans  received  by Agent.  The  failure of any Lender to deposit  the
amount  described  above with Agent shall not  relieve  any other  Lender of its
obligations hereunder to make its Term Loan.

         SECTION 2.4.  Continuation.

         So long as no Event of Default shall have  occurred and be  continuing,
Borrower  may on any  Business  Day,  with  respect to any LIBOR Loan,  elect to
maintain  such LIBOR Loan or any portion  thereof as a LIBOR Loan by selecting a
new Interest Period for such LIBOR Loan. Each new Interest Period selected under
this  Section  shall  commence  on the  last  day of the  immediately  preceding
Interest  Period.  Each  selection  of a new  Interest  Period  shall be made by
Borrower's  giving of a Notice of Continuation  not later than 12:00 noon on the
third  Business  Day prior to the date of any such  Continuation  by Borrower to
Agent.  Promptly after receipt of a Notice of  Continuation,  Agent shall notify
each Lender by telex or telecopy,  or other similar form of  transmission of the
proposed  Continuation.  Such notice by Borrower of a  Continuation  shall be by
telephone or telecopy,  confirmed immediately in writing if by telephone, in the
form of a Notice of Continuation,  specifying (a) the date of such Continuation,
(b) the LIBOR Loan and portion thereof subject to such  Continuation and (c) the
duration of the  selected  Interest




                                      -21-


<PAGE>


Period, all of which shall be specified in such manner as is necessary to comply
with all limitations on Loans outstanding hereunder. Each Notice of Continuation
shall be  irrevocable  by and binding on Borrower once given.  If Borrower shall
fail to select in a timely  manner a new  Interest  Period for any LIBOR Loan in
accordance with this Section,  such Loan will automatically,  on the last day of
the  current  Interest  Period   therefore,   Convert  into  a  Base  Rate  Loan
notwithstanding failure of Borrower to comply with Section 2.5.

         SECTION 2.5.  Conversion.

         So long as no Event of Default shall have  occurred and be  continuing,
Borrower  may on any  Business  Day,  upon  Borrower's  giving  of a  Notice  of
Conversion to Agent,  Convert the entire amount of all or a portion of a Loan of
one Type into a Loan of  another  Type.  Promptly  after  receipt of a Notice of
Conversion,  Agent  shall  notify  each  Lender by telex or  telecopy,  or other
similar form of  transmission  of the proposed  Conversion.  Any Conversion of a
LIBOR  Loan into a Base Rate Loan shall be made on, and only on, the last day of
an Interest Period for such LIBOR Loan. Each such Notice of Conversion  shall be
given not later  than 12:00  noon on the  Business  Day prior to the date of any
proposed  Conversion into Base Rate Loans and on the third Business Day prior to
the  date  of  any  proposed  Conversion  into  LIBOR  Loans.   Subject  to  the
restrictions specified above, each Notice of Conversion shall be by telephone or
telecopy  confirmed  immediately  in  writing if by  telephone  in the form of a
Notice of Conversion  specifying (a) the requested date of such Conversion,  (b)
the Type of Loan to be  Converted,  (c) the  portion  of such Type of Loan to be
Converted,  (d) the Type of Loan  such Loan is to be  Converted  into and (e) if
such  Conversion is into a LIBOR Loan,  the  requested  duration of the Interest
Period of such Loan.  Each  Notice of  Conversion  shall be  irrevocable  by and
binding on Borrower once given. Each Conversion from a Base Rate Loan to a LIBOR
Loan shall be in an  aggregate  amount for the Loans of all  Lenders of not less
than $1,000,000 or integral multiples of $500,000 in excess of that amount.

         SECTION 2.6.  Interest Rate.

         (a) All Loans.  The unpaid  principal of each Base Rate Loan shall bear
interest  from the date of the making of such Loan to but not including the date
of  repayment  thereof at a rate per annum equal to the Base Rate in effect from
day to day plus the Applicable  Margin for Base Rate Loans. The unpaid principal
of each LIBOR Loan shall bear  interest from the date of the making of such Loan
to but not including the date of repayment  thereof at a rate per annum equal to
the LIBO Rate plus the Applicable Margin for LIBOR Loans.

         (b)  Default  Rate.  All  past-due  principal  of,  and to  the  extent
permitted by Applicable  Law,  interest on, the Loans shall bear interest  until
paid at the Base Rate from time to time in effect plus two percent (2%).

         SECTION 2.7.  Number of Interest Periods.

         Anything herein to the contrary  notwithstanding,  there may be no more
than 3 different Interest Periods outstanding at the same time.




                                      -22-


<PAGE>


         SECTION 2.8.  Repayment of Loans.

         (a) Payment of Interest.  All accrued and unpaid interest on the unpaid
principal  amount of each Loan  shall be payable  (i)  monthly in arrears on the
first day of each month, commencing with the first full calendar month occurring
after the Effective Date, (ii) on the Termination Date, and (iii) on any date on
which the principal balance of such Loan is due and payable in full.

         (b) Payment of Principal of Term Loans.  The entire  outstanding
principal  balance  of all Term  Loans  shall be due and  payable in full on the
Termination Date.

         (c)  Optional  Prepayments.  Borrower  may,  upon at least one Business
Day's prior notice to Agent,  prepay any Loan in whole at any time, or from time
to time in part in an amount equal to $500,000 or integral multiples of $100,000
in excess of that amount.  If Borrower  shall prepay the  principal of any LIBOR
Loan on any date  other  than the last  day of the  Interest  Period  applicable
thereto, Borrower shall pay the amounts, if any, due under Section 4.4.

         (d) Mandatory  Prepayments.  If at any time the  aggregate  outstanding
principal  balance of Loans  exceeds the  Available  Loan Amount,  then Borrower
shall,  within 10 Business Days of Borrower  obtaining  actual  knowledge of the
occurrence  of  such  excess,  eliminate  such  excess.  If such  excess  is not
eliminated  within such 10  Business  Day  period,  then the entire  outstanding
principal balance of all Loans shall be immediately due and payable in full.

         (e) General  Provisions as to Payments.  Except to the extent otherwise
provided  herein,  all payments of  principal,  interest and other amounts to be
made by  Borrower  under this  Agreement,  the Notes or any other Loan  Document
shall be made in  Dollars,  in  immediately  available  funds,  without  setoff,
deduction or counterclaim,  to Agent at its Lending Office, not later than 11:00
a.m. on the date on which such payment  shall become due (each such payment made
after  such  time on such due date to be  deemed  to have  been made on the next
succeeding  Business  Day). The parties agree that if Borrower makes any payment
due hereunder  after 11:00 a.m. but before 5:00 p.m. on the date such payment is
due, such late payment shall not constitute a Default under Section  8.1.(a) but
shall  nevertheless  for all other  purposes,  including but not limited to, the
calculation of interest,  be deemed to have been paid as of the next  succeeding
Business Day as provided in the parenthetical  phrase of the preceding sentence.
Each payment  received by Agent for the account of a Lender under this Agreement
or any Note  shall  be paid to such  Lender,  by wire  transfer  of  immediately
available  funds in  accordance  with the wiring  instructions  provided by such
Lender  to Agent  from  time to time,  for the  account  of such  Lender  at the
applicable  Lending Office of such Lender.  In the event Agent fails to pay such
amounts to such Lender within one Business Day of receipt by Agent,  Agent shall
pay interest on such amount at a rate per annum equal to the Federal  Funds Rate
from time to time in effect. If the due date of any payment under this Agreement
or any other Loan Document would otherwise fall on a day which is not a Business
Day such date shall be extended to the next succeeding Business Day and interest
shall be payable for the period of such extension.




                                      -23-


<PAGE>


         SECTION 2.9.  Extension of Termination Date.

          Borrower  may  request  that  Agent and  Lenders  extend  the  current
Termination  Date by one year by executing and  delivering to Agent at least 10,
but not more than 30,  Business  Days prior to the current  Termination  Date, a
written  request for such  extension.  Such request  shall be  irrevocable  once
given.  Agent shall forward to each Lender a copy of any such request  delivered
to the Agent  promptly  upon receipt  thereof.  So long as each of the following
conditions  are  satisfied  on  the  current   Termination   Date,  the  current
Termination Date shall be  automatically  extended for one year: (a) immediately
prior to such extension,  no Default or Event of Default shall have occurred and
be  continuing  or would  result  after  giving  effect to such  extension;  (b)
Borrower  shall have paid the fees payable  under  Section  3.1.(a);  and (c) at
least 20% of the  initial  aggregate  balance of the Term Loans  shall have been
repaid.

         SECTION 2.10.  Inclusion of Securities in Unencumbered Pool.

         As of the Effective Date hereof,  the Securities  described in Schedule
2.10.  are the only  Unencumbered  Pool  Securities.  If Borrower  desires  that
additional  Securities become Unencumbered Pool Securities,  Borrower shall give
Agent prior written notice thereof,  such notice to set forth:  (a) the identity
of the Issuer of such  Securities;  (b) the number of such  Securities to become
Unencumbered Pool Securities; (c) whether such Securities are Traded Securities;
(d) the per share  Market  Value of such  Securities  as of the most recent date
available;  (e) if such Issuer is not  Investment  Grade,  a calculation  of the
ratio  of  such  Issuer's   Indebtedness  to  its  Net  Worth  plus  accumulated
depreciation;  (f) such Issuer's Credit Rating(s),  if any; and (g) whether such
Securities are to be subject to the  limitations of clause (a) of the definition
of  Unencumbered  Pool  Value,  and if so, a  calculation  of the  Cash  Flow to
Interest  Ratio  referred to in such clause (a). Such notice must be accompanied
by an  Unencumbered  Pool  Certificate  setting  forth on a pro forma  basis the
Unencumbered  Pool Value  assuming that such  Securities are  Unencumbered  Pool
Securities,  and if such Securities are owned by a wholly-owned  Subsidiary that
is not already a Guarantor,  the items  required to be delivered  under  Section
10.14.  Promptly upon receipt of such notice and  Unencumbered  Pool Certificate
(but in any event within 3 Business Days), Agent will forward copies of the same
to  Lenders.  So  long  as  such  Securities  are  Qualifying  Securities,  such
Securities shall become  Unencumbered Pool Securities 10 Business Days following
Agent's receipt of such notice,  Unencumbered Pool Certificate and the items, if
any, required to be delivered under Section 10.14.

         SECTION 2.11.  Notes.

         The  obligation of Borrower to repay the Term Loans shall,  in addition
to this Agreement, be evidenced by the Notes.


                      ARTICLE III. GENERAL LOAN PROVISIONS


         SECTION 3.1.  Fees.

         (a) If, pursuant to Section 2.9., Borrower requests an extension of the
Termination Date, Borrower agrees to pay to Agent for the account of each Lender
an extension fee equal to




                                      -24-


<PAGE>


one-quarter of one percent (0.25%) of the principal amount of the Term Loan made
by such Lender as of the date on which such extension occurs.  Such fee shall be
payable on the date on which such extension occurs.

         (b) Borrower agrees to pay to Co-Lead  Arrangers such fees for services
rendered by Co-Arrangers as shall be separately agreed upon between Borrower and
Co-Lead Arrangers.

         SECTION 3.2.  Computation of Interest and Fees.

         Interest  on the Loans and all fees shall be computed on the basis of a
year of 360 days and paid for the actual number of days elapsed  (including  the
first day but excluding the last day of a period).

         SECTION 3.3.  Pro Rata Treatment.

         Except to the extent otherwise provided herein: (a) the Term Loans made
under Section 2.1. shall be made by Lenders,  and each payment of the fees under
Section 3.1.(a) shall be made for account of Lenders,  pro rata according to the
amounts of their  respective  Commitments;  (b) each  payment or  prepayment  of
principal of Loans by Borrower  shall be made for account of Lenders pro rata in
accordance  with the respective  unpaid  principal  amounts of the Loans held by
them;  (c) each  payment  of  interest  on Loans by  Borrower  shall be made for
account of Lenders pro rata in  accordance  with the amounts of interest on such
Loans then due and payable to the respective Lenders; and (d) the Conversion and
Continuation of Loans of a particular Type (other than Conversions  provided for
by Section 4.6.) shall be made pro rata among  Lenders  according to the amounts
of their respective Loans and the then current Interest Period for each Lender's
portion of each Loan of such Type shall be coterminous.

         SECTION 3.4.  Sharing of Payments, Etc.

         If a Lender shall obtain  payment of any  principal of, or interest on,
any Loan under this Agreement,  or shall obtain payment on any other  Obligation
owing by Borrower  through the  exercise of any right of set-off  under  Section
10.6. or otherwise,  banker's lien or counterclaim or similar right or otherwise
or through voluntary  prepayments directly to a Lender or other payments made by
Borrower to a Lender not in accordance with the terms of this Agreement and such
payment,  pursuant to the immediately  preceding Section,  should be distributed
pro rata to Lenders,  such Lender shall promptly purchase from the other Lenders
participations  in (or, if and to the extent  specified by such  Lender,  direct
interests in) the Loans made by the other Lenders or other  Obligations  owed to
such other Lenders in such amounts, and make such other adjustments from time to
time as shall be equitable,  to the end that all Lenders shall share the benefit
of such  payment  (net of any  expenses  which may be incurred by such Lender in
obtaining or preserving  such benefit) in accordance  with their  respective Pro
Rata Shares.  To such end, all Lenders shall make appropriate  adjustments among
themselves (by the resale of  participations  sold or otherwise) if such payment
is rescinded or must otherwise be restored.




                                      -25-


<PAGE>


         SECTION 3.5.  Defaulting Lenders.

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

         SECTION 3.6.  Usury.

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

         SECTION 3.7.  Agreement Regarding Interest and Charges.

         THE PARTIES  HERETO  HEREBY  AGREE AND  STIPULATE  THAT THE ONLY CHARGE
IMPOSED UPON BORROWER FOR THE USE OF MONEY IN CONNECTION  WITH THIS AGREEMENT IS
AND SHALL BE THE INTEREST  DESCRIBED IN SECTION 2.6. THE PARTIES  HERETO FURTHER
AGREE AND  STIPULATE  THAT ALL OTHER  CHARGES  IMPOSED BY  LENDERS  AND AGENT ON
BORROWER IN CONNECTION WITH THIS AGREEMENT,  INCLUDING ALL AGENCY FEES, FACILITY
FEES,  EXTENSION  FEES,   UNDERWRITING  FEES,  DEFAULT  CHARGES,  LATE  CHARGES,
ATTORNEYS'  FEES AND  REIMBURSEMENT  FOR COSTS AND EXPENSES PAID BY AGENT OR ANY
LENDER TO THIRD  PARTIES OR FOR DAMAGES




                                      -26-


<PAGE>


INCURRED BY AGENT OR ANY LENDER,  ARE CHARGES  MADE TO  COMPENSATE  AGENT OR ANY
SUCH LENDER FOR  UNDERWRITING  OR  ADMINISTRATIVE  SERVICES  AND COSTS OR LOSSES
PERFORMED OR INCURRED,  AND TO BE PERFORMED OR INCURRED, BY AGENT AND LENDERS IN
CONNECTION  WITH THIS  AGREEMENT AND THE OTHER LOAN DOCUMENTS AND SHALL UNDER NO
CIRCUMSTANCES  BE DEEMED TO BE CHARGES FOR THE USE OF MONEY.  ALL CHARGES  OTHER
THAN CHARGES FOR THE USE OF MONEY SHALL BE FULLY EARNED AND  NONREFUNDABLE  WHEN
DUE.

         SECTION 3.8.  Statements of Account.

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

         SECTION 3.9.  Agent's Reliance.

         Neither  Agent nor any Lender shall incur any liability to Borrower for
acting upon any telephonic  notice permitted under this Agreement which Agent or
such  Lender  believes  reasonably  and in good  faith to have been  given by an
individual authorized to deliver a Notice of Borrowing, Notice of Conversion, or
Notice of Continuation on behalf of Borrower.

         SECTION 3.10.  Foreign Lenders.

         Prior to the date that any Foreign Lender becomes a party hereto,  such
Person shall deliver to the Borrower and the Agent such certificates,  documents
or  other  evidence,  as  required  by the  Internal  Revenue  Code or  Treasury
Regulations  issued pursuant thereto  (including  Internal Revenue Service Forms
W-8ECI or W-8BEN,  as applicable,  or  appropriate  successor  forms),  properly
completed,  currently  effective and duly executed by such Lender or participant
establishing  that  payments  to it  hereunder  and  under the Notes are (i) not
subject to United States Federal backup  withholding  tax or (ii) not subject to
United States Federal  withholding  tax under the Internal  Revenue Code because
such payment is either effectively  connected with the conduct by such Lender or
participant  of a trade or business in the United States or totally  exempt from
United  States  Federal  withholding  tax by  reason of the  application  of the
provisions  of a treaty to which the United  States is a party or such Lender is
otherwise exempt.

                       ARTICLE IV. YIELD PROTECTION, ETC.

         SECTION 4.1.  Additional Costs; Capital Adequacy.

         (a)  Additional  Costs.  Borrower  shall  promptly pay to Agent for the
account of a Lender from time to time such amounts as such Lender may reasonably
determine to be necessary to  compensate  such Lender for any costs  incurred by
such Lender that it determines are  attributable to its making or maintaining of
any  LIBOR  Loans or its  obligation  to make any




                                      -27-


<PAGE>


LIBOR Loans  hereunder,  any  reduction in any amount  receivable by such Lender
under this  Agreement  or any of the other Loan  Documents  in respect of any of
such Loans or such  obligation or the  maintenance  by such Lender of capital in
respect of its Loans or its Commitment  (such  increases in costs and reductions
in amounts receivable being herein called "Additional Costs"), in each such case
resulting from any Regulatory  Change that: (i) changes the basis of taxation of
any amounts payable to such Lender under this Agreement or any of the other Loan
Documents  in respect of any of such Loans or its  Commitment  (other than taxes
imposed  on or  measured  by the  overall  net  income of such  Lender or of its
Lending  Office for any of such Loans by the  jurisdiction  in which such Lender
has its principal  office or such Lending  Office);  or (ii) imposes or modifies
any reserve,  special deposit or similar requirements (including Regulation D of
the Board of Governors of the Federal Reserve System) relating to any extensions
of credit or other assets of, or any deposits with or other liabilities of, such
Lender, or any commitment of such Lender  (including,  without  limitation,  the
Commitment of such Lender  hereunder);  or (iii) has or would have the effect of
reducing  the rate of return on  capital  of such  Lender to a level  below that
which such Lender could have  achieved but for such  Regulatory  Change  (taking
into consideration such Lender's policies with respect to capital adequacy).

         (b) Lender's Suspension of LIBOR Loans.  Without limiting the effect of
the provisions of the immediately  preceding subsection (a), if by reason of any
Regulatory  Change,  any Lender either (i) incurs  Additional  Costs based on or
measured by the excess  above a  specified  level of the amount of a category of
deposits or other liabilities of such Lender that includes deposits by reference
to which the  interest  rate on LIBOR  Loans is  determined  as provided in this
Agreement or a category of  extensions  of credit or other assets of such Lender
that includes LIBOR Loans or (ii) becomes  subject to restrictions on the amount
of such a category  of  liabilities  or assets that it may hold,  then,  if such
Lender so elects by notice to Borrower (with a copy to Agent), the obligation of
such  Lender to make or  Continue,  or to Convert  any other Type of Loans into,
LIBOR Loans hereunder shall be suspended until such Regulatory  Change ceases to
be in effect (in which case the provisions of Section 4.6. shall apply).

         (c) Notification and  Determination  of Additional  Costs.  Each Lender
agrees to notify Borrower of any event occurring after the date hereof entitling
such  Lender to  compensation  under any of the  preceding  subsections  of this
Section as  promptly  as  practicable;  provided,  however,  subject to the last
sentence of this subsection, the failure of any Lender to give such notice shall
not release Borrower from any of its obligations  hereunder.  Such Lender agrees
to furnish to Borrower a certificate  setting forth the basis and amount of each
request by such Lender for compensation  under this Section.  Determinations  by
Agent or any Lender of the effect of any Regulatory  Change shall be prima facie
evidence  of the  matters  so  certified.  A Lender  shall only be  entitled  to
compensation under the preceding  subsection (a) as a result of events occurring
during  the  120-day  period  ending on the date  Borrower  receives  the notice
described  in the first  sentence  of this  subsection  and if such  Lender uses
reasonable allocation and attribution methods to determine such compensation.




                                      -28-


<PAGE>


         SECTION 4.2.  Suspension of LIBOR Loans.

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

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

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

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

         SECTION 4.3.  Illegality.

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

         SECTION 4.4.  Compensation.

         Borrower  shall  pay to Agent  for  account  of each  Lender,  upon the
request  of such  Lender  through  Agent,  such  amount or  amounts  as shall be
sufficient (in the  reasonable  opinion of such Lender) to compensate it for any
loss, cost or expense that such Lender  determines is  attributable  to: (a) any
payment or  prepayment  (whether  mandatory  or  optional)  of a LIBOR Loan,  or
Conversion  of a LIBOR  Loan,  made by such  Lender for any  reason  (including,
without  limitation,  acceleration)  on a date  other  than  the last day of the
Interest  Period for such Loan;  or (b) any failure by  Borrower  for any reason
(including,  without limitation, the failure of any of the applicable conditions
precedent  specified in Article V. to be  satisfied) to borrow a LIBOR Loan from
such Lender on the date for such borrowing,  or to Convert a Base Rate Loan into
a LIBOR Loan or Continue a LIBOR Loan on the requested  date of such  Conversion
or Continuation.  Upon Borrower's  request,  any Lender requesting  compensation
under this Section  shall provide  Borrower  with a statement  setting forth the
basis for requesting such compensation and the method for determining the amount
thereof.  Any such statement shall be prima facie evidence of the matters stated
therein.




                                      -29-


<PAGE>


         SECTION 4.5.  Affected Lenders.

         If any Lender  requests  compensation  pursuant to Section 4.1., or the
obligation of any Lender to make LIBOR Loans or to Continue,  or to Convert Base
Rate Loans into,  LIBOR Loans shall be suspended  pursuant to Section 4.1.(b) or
4.3.,  then,  so long as there  does  not then  exist  any  Default  or Event of
Default,  Borrower  may (but  shall  not be  obligated  to) take  either  of the
following actions: (a) demand that such Lender (the "Affected Lender"), and upon
such demand the Affected  Lender shall  promptly,  assign its Commitment (or, if
the Term Loans have been made, such Lender's Term Loan) to an Eligible  Assignee
subject to and in  accordance  with the  provisions  of Section  10.8.(c)  for a
purchase price equal to the outstanding  principal balance of such Term Loan, if
any,  then owing to the  Affected  Lender plus any  accrued but unpaid  interest
thereon and accrued but unpaid fees owing to the Affected Lender,  or (b) pay to
the Affected Lender the outstanding principal balance of such Term Loan, if any,
then owing to the Affected Lender plus any accrued but unpaid  interest  thereon
and accrued but unpaid fees owing to the Affected Lender, whereupon the Affected
Lender shall no longer be a party  hereto or have any rights  hereunder or under
any of the other Loan  Documents.  Agent and the Affected  Lender may (but shall
not be obligated to) cooperate in effectuating  the replacement of such Affected
Lender under this Section,  but at no time shall Agent, such Affected Lender, or
any  other  Lender be  obligated  in any way  whatsoever  to  initiate  any such
replacement or to assist in finding an Assignee. The exercise by Borrower of its
rights under this Section shall be at Borrower's sole cost and expense and at no
cost or expense to Agent, the Affected Lender, or any of the other Lenders.  The
terms of this Section shall not in any way limit Borrower's obligation to pay to
any Affected  Lender  compensation  owing to such  Affected  Lender  pursuant to
Section 4.1.

         SECTION 4.6.  Treatment of Affected Loans.

         If the obligation of any Lender to make LIBOR Loans or to Continue,  or
to Convert  Base Rate Loans into,  LIBOR Loans  shall be  suspended  pursuant to
Section  4.1.(b),  4.2.  or  4.3.,  then  such  Lender's  LIBOR  Loans  shall be
automatically  Converted  into  Base Rate  Loans on the last  day(s) of the then
current  Interest  Period(s)  for LIBOR Loans (or,  in the case of a  Conversion
required by Section  4.1.(b) or 4.3.,  on such  earlier  date as such Lender may
specify to  Borrower  with a copy to Agent)  and,  unless and until such  Lender
gives notice as provided below that the circumstances specified in Section 4.1.,
4.2. or 4.3. that gave rise to such Conversion no longer exist:

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

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

         If such Lender gives notice to Borrower (with a copy to Agent) that the
circumstances specified in Section 4.1. or 4.3. that gave rise to the Conversion
of such  Lender's  LIBOR Loans




                                      -30-


<PAGE>


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

         SECTION 4.7.  Change of Lending Office.

         Each Lender agrees that it will use reasonable  efforts to designate an
alternate  Lending  Office  with  respect  to any of its Loans  affected  by the
matters or  circumstances  described  in  Sections  4.1.  or 4.3.  to reduce the
liability of Borrower or avoid the results provided thereunder,  so long as such
designation is not  disadvantageous  to such Lender as determined by such Lender
in its sole  discretion,  except that such Lender  shall have no  obligation  to
designate a Lending Office located in the United States of America.


                              ARTICLE V. CONDITIONS

         SECTION 5.1.  Initial Conditions.

         The  obligation  of a  Lender  to  make  a Term  Loan  to  Borrower  in
accordance  with the terms hereof,  is subject to the condition  precedent  that
Borrower deliver to Agent each of the following,  each of which shall be in form
and substance satisfactory to Agent:

         (a) counterparts of this Agreement executed by each of the parties
hereto;

         (b) Notes executed by Borrower, payable to each Lender;

         (c) the  Guaranty  executed  by SC Realty  Incorporated,  Security
Capital Holdings S.A. and the Persons identified on Schedule 1.1.;

         (d) an  opinion  of  Mayer,  Brown  and  Platt,  counsel  to  Borrower
and Guarantors,  and addressed to Agent and Lenders in substantially the form of
Exhibit H;

         (e) an opinion of Arendt & Medernach,  local Luxembourg counsel to
Security  Capital  Holdings  S.A.,  regarding  such matters of Luxembourg law as
Agent may  request,  including  without  limitation,  the  organization  of such
Guarantor,  the  authorization,  execution and delivery by such Guarantor of the
Guaranty,  noncontravention  of  Luxembourg  law,  and  enforcement  of  foreign
judgments;

         (f) the articles of incorporation of Borrower certified as of a recent
date by the Secretary of State of the State of Maryland;

         (g) a Certificate  of Good Standing with respect to Borrower  issued as
of a  recent  date by the  Secretary  of  State of the  State  of  Maryland  and
certificates  of  qualification   to  transact   business  or  other  comparable
certificates with respect to Borrower issued by each Secretary of




                                      -31-


<PAGE>


State (and any state  department of taxation,  as  applicable)  of each state in
which Borrower is required to be so qualified;

         (h) a certificate  of  incumbency  signed by the Secretary or Assistant
Secretary  of  Borrower  with  respect  to  each  of the  officers  of  Borrower
authorized  to execute  and deliver the Loan  Documents  to which  Borrower is a
party and to  execute  and  deliver  the  Notice of  Borrowing,  and  Notices of
Conversion and Notices of Continuation;

         (i) certified copies (certified by the Secretary or Assistant Secretary
of Borrower) of the by-laws of Borrower and of all corporate or other  necessary
action taken by Borrower to authorize the execution, delivery and performance of
the Loan Documents to which it is a party;

         (j) the Organizational Documents of each Guarantor certified as of a
recent date by the Secretary of State or other similar Governmental Authority of
the jurisdiction of its formation;

         (k) a certificate of good standing or  certificate  of similar  meaning
with respect to each  Guarantor  issued as of a recent date by the  Secretary of
State of the State or other  similar  Governmental  Authority of the  respective
jurisdiction  of its formation and  certificates  of  qualification  to transact
business or other comparable  certificates with respect to each Guarantor issued
by each  Secretary of State or other  similar  Governmental  Authority  (and any
state  department  of  taxation,  as  applicable)  of each  state in which  such
Guarantor is required to be so qualified;

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

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

         (n) a Form FR U-1 and a Form FR G-3  executed by Borrower  with
respect to all Unencumbered Pool Securities;

         (o) an Unencumbered Pool Certificate calculated as of the Effective
Date;

         (p) certified copies  (certified by a senior executive officer of
Borrower) of the following documents and instruments relating to the U.S. Realty
Acquisition:

             (i) the U.S. Realty Acquisition Agreement and any amendments
thereto; and




                                      -32-


<PAGE>


             (ii) the Registration Statement on Form S-4, Registration
No.  333-47926,  as filed with the  Securities  and Exchange  Commission on
October 13, 2000, as amended;

         (q) a certificate of a senior  executive  officer of Borrower  stating
that all conditions precedent to the consummation of the U.S. Realty Acquisition
as set forth in the U.S.  Realty  Acquisition  Agreement  have been satisfied or
waived in writing, together with a copy of any such waiver;

         (r) such  evidence  as Agent may  request  to confirm  that any
Securities  acquired  by Borrower or a  Guarantor  in  connection  with the U.S.
Realty  Acquisition  which are to be Unencumbered Pool Securities are registered
in the name of Borrower or a Guarantor;

         (s) evidence that all  conditions  precedent  contained in Sections 5.1
and 5.2 of the  Revolving  Credit  Agreement  have been  satisfied (or waived as
permitted therein);

         (t)  payment  of all loan  closing  fees and any  other  fees  then due
and payable to the Agent and the Lenders in connection with this Agreement; and

         (u) such other  documents and  instruments as Agent,  or any Lender
through Agent, may reasonably request.

         SECTION 5.2.  Conditions to Loans.

         The  obligation  of any  Lender to make a Term Loan is  subject  to the
condition  precedent that the following  conditions be satisfied in the judgment
of Agent:

         (a)      timely receipt by Agent of the Notice of Borrowing;

         (b) the  proposed  use of proceeds of such Loans set forth in the
 Notice of Borrowing is consistent with the provisions of Section 7.11.;

         (c)  immediately  before and after the making of such Loans, no Default
(including  without  limitation  the  existence  of the  condition  described in
Section 2.8.(d)) or Event of Default shall have occurred and be continuing; and

         (d) the  representations  and  warranties  of Borrower  and  Guarantors
contained  in the Loan  Documents  to which any is a party  shall be true in all
material  respects on and as of the date of such Loans  except to the extent (x)
such representations or warranties specifically relate to an earlier date or (y)
such  representations  or  warranties  become  untrue  by  reason  of  events or
conditions otherwise permitted hereunder and the other Loan Documents.

The  delivery  of the  Notice of  Borrowing  and the  making of each Loan  shall
constitute a certification  by Borrower to Agent and Lenders that the statements
in the immediately preceding clauses (b) through (d) are true.




                                      -33-


<PAGE>


         SECTION 5.3.  Conditions as Covenants.

         If  Lenders  make  the Term  Loans  prior  to the  satisfaction  of all
conditions  precedent set forth in Section  5.1.,  Borrower  shall  nevertheless
cause such  condition or  conditions  to be satisfied  within five Business Days
after the date of the making of such Loans.

         SECTION 5.4.  Termination if Conditions Not Satisfied.

     This Agreement shall terminate  (other than those  provisions  hereof which
expressly survive its termination) if (a) the conditions  precedent contained in
Section  5.1.  have  not  been  satisfied  (or  waived  in  accordance  with the
applicable provisions of Section 10.7.) by March 31, 2001 or (b) the U.S. Realty
Acquisition Agreement is terminated.


                   ARTICLE VI. REPRESENTATIONS AND WARRANTIES

         Borrower represents and warrants to Agent and each Lender as follows:

         SECTION 6.1.  Existence and Power.

         Each of Borrower and Guarantors is a corporation, partnership, trust or
other legal entity duly organized,  validly  existing and in good standing under
the laws of the  jurisdiction of its formation,  and has all requisite power and
authority and all governmental licenses, authorizations,  consents and approvals
required to carry on its business as now conducted and is duly  qualified and is
in good standing,  and authorized to do business,  in each jurisdiction in which
the  character of its  properties  or the nature of its business  requires  such
qualification  or  authorization  except where the failure to be so qualified or
authorized would not have a Materially Adverse Effect.

         SECTION 6.2.  Ownership Structure.

         Schedule  6.2.  correctly  sets  forth  the  corporate   structure  and
ownership  interests  of  Borrower  and  all  of its  Consolidated  Subsidiaries
including  the correct  legal name of  Borrower  and each such  Subsidiary,  and
Borrower's relative equity interest in each such Subsidiary.

         SECTION 6.3.  Authorization of Agreement, Notes, Loan Documents
 and Borrowings.

         Each of Borrower and Guarantors has the right and power,  and has taken
all  necessary  action  to  authorize  it, to  borrow  hereunder  in the case of
Borrower, and to execute,  deliver and perform the Loan Documents to which it is
a party  in  accordance  with  their  respective  terms  and to  consummate  the
transactions  contemplated  hereby and  thereby.  Each of the Loan  Documents to
which Borrower or any Guarantor is a party have been duly executed and delivered
by the duly  authorized  officers of Borrower  or such  Guarantor  and each is a
legal,  valid and binding  obligation of Borrower or such Guarantor  enforceable
against  Borrower or such  Guarantor in accordance  with its  respective  terms,
except as the same may be limited by bankruptcy,  insolvency,  and other similar
laws  affecting  the  rights of  creditors  generally  and the  availability




                                      -34-


<PAGE>


of equitable remedies for the enforcement of certain obligations (other than the
payment of  principal)  contained  herein or therein may be limited by equitable
principles generally.

         SECTION 6.4.  Compliance of Agreement, Notes, Loan Documents and
 Borrowing with Laws, etc.

         The execution, delivery and performance by Borrower or any Guarantor of
the Loan  Documents to which Borrower or such Guarantor is a party in accordance
with their respective terms and the borrowing of Loans hereunder do not and will
not, by the passage of time,  the giving of notice or otherwise  (a) require any
Governmental  Approval or violate any Applicable Law relating to Borrower or any
Guarantor the failure to possess or to comply with which would have a Materially
Adverse Effect; (b) conflict with, result in a breach of or constitute a default
under  the  Organizational  Documents  of  Borrower  or  any  Guarantor,  or any
indenture, agreement or other instrument to which Borrower or any Guarantor is a
party or by which it or any of its  properties may be bound and the violation of
which would have a Materially  Adverse  Effect;  or (c) result in or require the
creation or  imposition  of any Lien upon or with  respect to any  property  now
owned or hereafter  acquired by Borrower or any Guarantor  other than  Permitted
Liens.

         SECTION 6.5.  Compliance with Law; Governmental Approvals.

         Each of Borrower and Guarantors is in compliance with each Governmental
Approval  applicable to it and in  compliance  with all other  Applicable  Laws,
except for  noncompliances  which,  and  Governmental  Approvals  the failure to
possess which,  would not, singly or in the aggregate,  cause a Default or Event
of  Default  or have a  Materially  Adverse  Effect  and in respect of which (if
Borrower  or  such  Guarantor,  as  applicable,  has  actual  knowledge  of such
Applicable Law or Governmental Approval) adequate reserves have been established
on the books of Borrower or such Guarantor, as applicable.

         SECTION 6.6.  Indebtedness and Guarantees.

         Schedule 6.6. is a complete and correct listing of all Indebtedness and
Guarantees  of Borrower as of the date hereof.  Borrower has performed and is in
compliance with all of the terms of all Indebtedness of Borrower  (including all
Guarantees of any Indebtedness)  having an aggregate  principal amount in excess
of $5,000,000,  and all  instruments  and agreements  relating  thereto,  and no
default  or event of  default,  or event or  condition  which with the giving of
notice, the lapse of time or otherwise, would constitute such a default or event
of default, exists with respect to any such Indebtedness. As of the date hereof,
no Guarantor has any  Indebtedness or Guarantees other than  Indebtedness  under
(a) the  Guaranty,  (b) the other Loan  Documents  to which such  Guarantor is a
party,  (c) the Guaranty of (and as defined in) the Revolving  Credit  Agreement
and (d) Guarantees permitted under Section 7.19.(a)(w).

         SECTION 6.7.  Transactions with Affiliates.

         Neither  Borrower nor any Guarantor is a party to any transaction  with
any Affiliate which is in violation of Section 7.14.(b).




                                      -35-


<PAGE>


         SECTION 6.8.  Absence of Defaults.

         Neither  Borrower nor any Guarantor is in default under its  respective
Organizational  Documents,  and no  event  has  occurred,  which  has  not  been
remedied,  cured or  waived  (a)  which  constitutes  a  Default  or an Event of
Default; or (b) which constitutes, or which with the passage of time, the giving
of notice or  otherwise,  would  constitute,  a default  or event of  default by
Borrower  or any  Guarantor  under  any  material  agreement  (other  than  this
Agreement) or judgment,  decree or order to which Borrower or any Guarantor is a
party or by which  Borrower or any  Guarantor  or any of its  properties  may be
bound.

         SECTION 6.9.  Financial Information.

         The audited  consolidated  balance sheet of Borrower as at December 31,
1999 and the related consolidated statements of operations, stockholders' equity
and cash flows for the fiscal year then ending,  reported on by Arthur  Andersen
LLP,  and  the  unaudited  consolidated  balance  sheet  of the  Borrower  as at
September  30, 2000,  and the related  consolidated  statements  of  operations,
stockholders'  equity and cash flows for the fiscal  period ending on such date,
copies of all of which have been delivered to Agent and Lenders, fairly present,
in conformity  with  generally  accepted  accounting  principles,  the financial
position of Borrower  as of such dates and its  results of  operations  and cash
flows for such periods (subject, as to interim statements,  to changes resulting
from normal  year-end audit  adjustments  and the omission of footnotes).  Since
December 31, 1999 and with  reference  to such date,  there has been no material
adverse  change in the  financial  position or results of operations of Borrower
and its Consolidated Subsidiaries taken as a whole.

         SECTION 6.10.  Litigation.

         There is no  action,  suit or  proceeding  pending  against,  or to the
knowledge  of Borrower  threatened  against or  affecting,  any Related  Company
before any court or  arbitrator  or any  Governmental  Authority (a) which would
reasonably be expected to materially adversely affect the business,  properties,
financial  position,  results of  operations  or  prospects  of Borrower and its
Consolidated Subsidiaries taken as a whole or (b) which in any manner draws into
question the validity of any Loan Document.

         SECTION 6.11.  ERISA.

         Neither  Borrower  nor any  Guarantor  maintains,  nor has at any  time
maintained,  any Plan subject to the provisions of ERISA.  Neither  Borrower nor
any  Guarantor is, and at no time has been, a member of any ERISA Group with any
Person that has at any time maintained any such Plan.

         SECTION 6.12.  Environmental Matters.

         In the ordinary course of their business, the Related Companies conduct
an  ongoing  review  of the  effect  of  Environmental  Laws on their  business,
operations  and  properties,  in the course of which they  identify and evaluate
associated liabilities and costs (including,  without




                                      -36-


<PAGE>


limitation,  any capital or  operating  expenditures  required  for  clean-up or
closure of properties  presently or previously  owned,  any capital or operating
expenditures  required  to achieve or  maintain  compliance  with  environmental
protection standards imposed by law or as a condition of any license,  permit or
contract,  any  related  constraints  on  operating  activities,  including  any
periodic or  permanent  shutdown of any facility or reduction in the level of or
change in the nature of operations  conducted thereat,  any costs or liabilities
in connection with off-site disposal of wastes or Hazardous Substances,  and any
actual or potential liabilities to third parties,  including employees,  and any
related  costs  and  expenses).  On the  basis  of  this  review,  Borrower  has
reasonably concluded that such associated  liabilities and costs,  including the
costs of compliance  with  Environmental  Laws,  are unlikely to have a material
adverse effect on the business,  financial  condition,  results of operations or
prospects of Borrower and its Consolidated Subsidiaries, considered as a whole.

         SECTION 6.13.  Taxes.

         As of the date hereof,  the United States Federal income tax returns of
the  "affiliated  group" (as  defined  in the  Internal  Revenue  Code) of which
Borrower is a member for the  calendar  years prior to and  including  1995 have
been examined and closed.  No other United States  Federal income tax returns of
such affiliated group have been examined to date. The members of such affiliated
group have filed all United  States  Federal  income tax  returns  and all other
material  tax returns  which are  required to be filed by them and have paid all
material  taxes due  pursuant  to such  returns or  pursuant  to any  assessment
received  by or any of them except for taxes  being  contested  in good faith by
appropriate   proceedings   and  for  which   appropriate   reserves  have  been
established.  The  charges,  accruals  and  reserves on the books of Borrower in
respect of taxes or other governmental  charges are, in the opinion of Borrower,
adequate.

         SECTION 6.14.  Other Related Companies.

         Each of the  corporate  Related  Companies  other than Borrower and the
Guarantors  is a corporation  duly  incorporated,  validly  existing and in good
standing  under  the  laws of its  jurisdiction  of  incorporation,  and has all
corporate powers and all material  Governmental  Approvals  required to carry on
its business as now conducted.

         SECTION 6.15.  Not an Investment Company.

         Neither  Borrower nor any Guarantor is an "investment  company"  within
the meaning of the Investment Company Act of 1940, as amended.

         SECTION 6.16.  Full Disclosure.

         All written  information  furnished  by or on behalf of Borrower or any
Guarantor  to Agent and  Lenders  for  purposes  of or in  connection  with this
Agreement and the other Loan Documents or any transaction contemplated hereby or
thereby is, and all such  information  (other than projections and other similar
forward-looking  information) hereafter furnished by or on behalf of Borrower or
any  Guarantor  to Agent and Lenders  will be true and  accurate in all material
respects on the date as of which such  information  is stated or  certified  and
does not, and will not,




                                      -37-


<PAGE>


fail to state any  material  facts  necessary to make the  statements  contained
therein not misleading.  All financial  projections  prepared by or on behalf of
Borrower or any Guarantor  that have been or may hereafter be made  available to
Agent or any Lender were or will be prepared in good faith based on  assumptions
believed by management of Borrower to be  reasonable.  Borrower has disclosed to
Agent in  writing  any and all facts  known to  Borrower  which  materially  and
adversely  affect or may  affect  (to the  extent  Borrower  can now  reasonably
foresee),  the business,  operations or financial  condition of Borrower and its
Consolidated  Subsidiaries,  taken as a whole, or the ability of Borrower or any
Guarantor to perform its  obligations  under the Loan Documents to which it is a
party.

         SECTION 6.17.  Insurance.

         Schedule 6.17. sets forth a true and correct description of the
insurance coverage maintained by or on behalf of Borrower currently in effect.

         SECTION 6.18.  Not Plan Assets.

         The assets of  neither  Borrower  nor any  Guarantor  constitute  "plan
assets"  within  the  meaning  of  ERISA,  the  Internal  Revenue  Code  and the
respective regulations  promulgated  thereunder,  of any ERISA Plan or Non-ERISA
Plan. The execution,  delivery and performance by Borrower and Guarantors of the
Loan  Documents  to which any is a party,  and the  borrowing  and  repayment of
amounts  hereunder,  do not and will not  constitute  "prohibited  transactions"
under ERISA or the Internal Revenue Code.

         SECTION 6.19.  Sole Shareholder.

         Borrower  owns,   directly  or  indirectly,   all  of  the  issued  and
outstanding capital stock of each Guarantor.

         SECTION 6.20.  Unencumbered Pool Securities.

         Each Security that is included in  determinations  of the  Unencumbered
Pool Value satisfies all  requirements of the definition of Qualifying  Security
that are  applicable to such  Security.  Schedule  6.20.  sets forth,  as of the
Effective  Date, a complete  listing of all  agreements  and all  provisions  of
Organizational  Documents  of the  types  referred  to in  clause  (b)(i) of the
definition of Traded Security, with respect to each Unencumbered Pool Security.

         SECTION 6.21.  Solvency.

         (a) The fair  value and the fair  salable  value of  Borrower's  assets
(excluding  any  Indebtedness  due from any  Affiliate of Borrower)  are each in
excess of the fair  valuation of Borrower's  total  liabilities  (including  all
contingent  liabilities);  and (b)  Borrower  is able to pay its  debts or other
obligations  in the ordinary  course as they mature and (c) Borrower has capital
not  unreasonably  small to carry on its  business  and all business in which it
proposes to be engaged.




                                      -38-


<PAGE>


                             ARTICLE VII. COVENANTS

         Borrower agrees that, so long as Lenders have any Commitments hereunder
or any Obligation remains unpaid:

         SECTION 7.1.  Information.

         Borrower will deliver to Agent:

         (a) as soon as available and in any event within 135 days after the end
of each  respective  fiscal year of  Borrower  and any of its  Subsidiaries  the
financial  statements of which are audited, a consolidated balance sheet of such
Person as of the end of such fiscal year and the related consolidated statements
of earnings,  stockholders'  equity and cash flows for such fiscal year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all  reported  on  in  a  manner  acceptable  to  Agent  by  independent  public
accountants of nationally  recognized standing (delivery by Borrower of its Form
10-K  under  subsection  (f)  below  shall  satisfy  the  requirements  of  this
subsection  (a) to the extent such Form 10-K  contains the items  required to be
delivered under this subsection);

         (b) as soon as available  and in any event within 65 days after the end
of each of the first three  fiscal  quarters of each  respective  fiscal year of
Borrower  and any of its  Subsidiaries  the  financial  statements  of which are
audited,  a balance  sheet of such Person as of the end of such  quarter and the
related  statements  of earnings,  stockholders'  equity and cash flows for such
quarter  and for the  portion of such  Person's  fiscal year ended at the end of
such  quarter,   setting  forth  in   comparative   form  the  figures  for  the
corresponding  quarter and the  corresponding  portion of such Person's previous
fiscal  year,  all  certified  (subject to normal  year-end  adjustments)  as to
fairness of presentation,  generally accepted accounting  principles (subject to
absence  of  full  footnote   disclosures)  and  consistency  by  an  Authorized
Representative  of such  Person  (delivery  by  Borrower  of its Form 10-Q under
subsection (f) below shall satisfy the  requirements  of this  subsection (b) to
the extent such Form 10-Q contains the items required to be delivered under this
subsection);

         (c)  simultaneously   with  the  delivery  of  each  set  of  financial
statements  referred  to in the  immediately  preceding  clauses  (a) and (b), a
certificate  of an  Authorized  Representative  of Borrower (i) setting forth in
reasonable detail the calculations required to establish whether Borrower was in
compliance with the  requirements of Sections 7.7. and 7.14. on the date of such
financial  statements,  (ii)  stating  whether  any  Default or Event of Default
exists on the date of such  certificate  and, if any Default or Event of Default
then exists,  setting forth the details thereof and the action which Borrower is
taking or proposes to take with respect thereto,  (iii) setting forth a schedule
of all  Contingent  Obligations  of  Borrower  as of the date of such  financial
statements, and (iv) setting forth a schedule, in such form as may be reasonably
satisfactory to Agent, of information  with respect to assets and liabilities of
Consolidated Subsidiaries of Borrower;




                                      -39-


<PAGE>


         (d) as soon  as  possible  and in any  event  within  5  Business  Days
following the end of each calendar month or promptly upon the reasonable request
of Agent, an Unencumbered Pool Certificate;

         (e) within five days after any  executive  officer of Borrower  obtains
knowledge of any Default or Event of Default,  a  certificate  of an  Authorized
Representative  of Borrower  setting  forth the  details  thereof and the action
which Borrower is taking or proposes to take with respect thereto;

         (f)  promptly  upon the  filing  thereof,  copies  of all  registration
statements  (other than the exhibits thereto and any registration  statements on
Form S-8 or its  equivalent),  reports  on Forms  10-K,  10-Q and 8-K (or  their
equivalents)  and  all  other  periodic  reports  which  Borrower  or any of its
Affiliates  which  it  directly  or  indirectly  controls  shall  file  with the
Securities  and Exchange  Commission  (or any  governmental  agency  substituted
therefor) or any national securities exchange;

         (g)  promptly  upon the release  thereof,  copies of all press
releases of Borrower and any of its  Affiliates  which it directly or indirectly
controls;

         (h)  promptly  upon the  mailing  thereof to the  shareholders  of
Borrower  generally,  copies  of all  financial  statements,  reports  and proxy
statements so mailed;

         (i) promptly upon obtaining  knowledge thereof, a description in
reasonable  detail of any action,  suit or  proceeding  commenced or  threatened
against  any of the  Related  Companies  which is  reasonably  likely  to have a
Materially Adverse Effect;

         (j) promptly upon the occurrence thereof, any material change in the
senior management of Borrower or any Guarantor;

         (k)  promptly   upon  the   occurrence   thereof,   any  amendment  to
the Organizational Documents of Borrower or any Guarantor;

         (l) promptly upon the filing  thereof,  the annual report of Borrower
filed with the Secretary of State of the State of Maryland;

         (m) promptly upon Agent's request,  (i) amendments or other supplements
to any Form FR U-1 or Form FR G-3 delivered under this Agreement, (ii) new Forms
FR U-1 or Forms FR G-3,  and (iii) such  information  regarding  the  Securities
owned by Borrower or any Guarantor as Agent may request;

         (n) promptly upon any executive officer of Borrower obtaining knowledge
that an  event  or  condition  has  occurred  or  exists  which  results  in any
Unencumbered  Pool  Security  ceasing to be  eligible  for  qualification  as an
Unencumbered Pool Security, notice of such event or condition;




                                      -40-


<PAGE>


         (o)  within 5  Business  Days of the sale or other  disposition  by the
Borrower or any Guarantor of any Unencumbered  Pool  Securities,  notice of such
sale together with an Unencumbered  Pool Certificate  giving effect to such sale
or transfer; and

         (p)  from  time to  time  such  additional  information  regarding  the
financial  position or business of Borrower and its Subsidiaries as Agent or any
Lender may reasonably request.

Agent shall  deliver to each Lender a copy of each item  delivered  to the Agent
under the  immediately  preceding  subsections  (a)  through (o)  promptly  upon
receipt by Agent.

         SECTION 7.2.  Payment of Obligations.

         Borrower will pay and discharge,  and will cause each Subsidiary (other
than any Public  Subsidiary) to pay and discharge,  at or before  maturity,  all
their  respective  material  obligations  and  liabilities,  including,  without
limitation,  tax  liabilities,  except  where the same may be  contested in good
faith by  appropriate  proceedings  unless  the  contest  thereof  would  have a
Materially  Adverse Effect on Borrower,  and will maintain,  and will cause each
Subsidiary  (other than any Public  Subsidiary) to maintain,  in accordance with
generally accepted accounting  principles,  appropriate reserves for the accrual
of any of the same.

         SECTION 7.3.  Maintenance of Property; Insurance.

         (a) Borrower will keep, and will cause each Subsidiary  (other than any
Public Subsidiary) to keep, all property useful and necessary in its business in
good working order and  condition,  ordinary wear and tear and insured  casualty
losses excepted.

         (b) Borrower will maintain,  and will cause each Subsidiary (other than
any Public  Subsidiary) to maintain,  (i) physical damage  insurance on all real
and personal  property on an all risks basis  (including the perils of flood and
earthquake if located in designated  flood and earthquake  zones),  covering the
repair and replacement cost of all such property and consequential loss coverage
for business  interruption  and extra expense  (provided that the amount of such
insurance with respect to earthquakes  need not exceed  $15,000,000 for property
located   in   California),   (ii)   public   liability   insurance   (including
products/completed  operations  liability  coverage)  in an amount not less than
$5,000,000 in primary  coverage and  $25,000,000 in umbrella  coverage and (iii)
such other insurance  coverage in such amounts and with respect to such risks as
is consistent  with  insurance  maintained by businesses of comparable  type and
size in the industry. All such insurance shall be provided by insurers having an
A.M. Best policyholders rating of not less than A-IX (with respect to liability)
and A-XI (with respect to property  damage) or such other  insurers as Agent may
approve in writing.  Borrower  will  deliver to Agent (i) upon  request of Agent
from time to time full information as to the insurance carried, (ii) within five
(5)  days of  receipt  of  notice  from  any  insurer  a copy of any  notice  of
cancellation  or material  change in coverage  from that existing on the date of
this Agreement and (iii) forthwith,  notice of any cancellation or nonrenewal of
coverage by Borrower.

         (c) Except as otherwise  permitted under Section 7.10.,  Borrower will,
and will cause each  Subsidiary to, qualify and remain  qualified and authorized
to do business in each




                                      -41-


<PAGE>


jurisdiction  in which the  character  of its  properties  or the  nature of its
business  requires such  qualification or authorization and where the failure to
be so  qualified  or  authorized  would  have a  Materially  Adverse  Effect  on
Borrower.

         SECTION 7.4.  Conduct of Business and Maintenance of Existence.

         Except as  otherwise  permitted  under  Section  7.10.,  Borrower  will
continue,  and will cause each Subsidiary to continue,  to engage in business of
the same general type as now  conducted  by Borrower and its  Subsidiaries,  and
will  preserve,  renew and keep in full  force and  effect,  and will cause each
Subsidiary to preserve, renew and keep in full force and effect their respective
existence and their respective  rights,  privileges and franchises  necessary or
desirable  in the normal  conduct of  business;  provided  that  nothing in this
Section  shall  prohibit  the  dissolution  of  a  Subsidiary  (other  than  any
Guarantor) if (a) the  Borrower's  Board of Directors has  determined  that such
dissolution is in the best interest of Borrower,  (b) such  dissolution will not
be materially  disadvantageous to Lenders and (c) such dissolution will not have
a Materially Adverse Effect.

         SECTION 7.5.  Compliance with Laws.

         Borrower will comply,  and cause each  Subsidiary  to comply,  with all
Applicable Laws, including without limitation,  all Environmental Laws and ERISA
and the rules and regulations  thereunder,  except where compliance therewith is
contested in good faith by  appropriate  proceedings or the failure to so comply
would not have a Materially Adverse Effect.

         SECTION 7.6.  Inspection of Property, Books and Records.

         Borrower  will keep,  and will cause each  Subsidiary  to keep,  proper
books of record and account in which full,  true and  correct  entries  shall be
made  of  all  dealings  and  transactions  in  relation  to  its  business  and
activities;  and  will  permit,  and  will  cause  each  Subsidiary  to  permit,
representatives   of  Agent  to  visit  and  inspect  any  of  their  respective
properties, to examine and make abstracts from any of their respective books and
records and to discuss  their  respective  affairs,  finances and accounts  with
their  respective  officers,  employees and  independent  public  accountants in
Borrower's  presence prior to an Event of Default,  all at such reasonable times
during  business  hours  and as  often as may  reasonably  be  desired  and with
reasonable  notice so long as no Event of  Default  shall have  occurred  and be
continuing.

         SECTION 7.7.  Financial Covenants.

         (a) Minimum Shareholders' Equity. Borrower shall not at any time permit
the  Shareholders'  Equity of  Borrower  and its  Subsidiaries  determined  on a
consolidated basis in accordance with generally accepted  accounting  principles
to be less than (i) 75% of Shareholders' Equity of Borrower and its Subsidiaries
determined  on a  consolidated  basis  in  accordance  with  generally  accepted
accounting  principles  immediately  after  giving  effect  to the  U.S.  Realty
Acquisition  plus (ii) 75% of the  amount by which the  Shareholders'  Equity of
Borrower and its Subsidiaries  determined on a consolidated  basis in accordance
with generally




                                      -42-


<PAGE>


accepted  accounting  principles  has been  increased by the issuance of capital
stock after the U.S. Realty Acquisition.

         (b) Ratio of Total  Liabilities  to Market  Value Net  Worth.  Borrower
shall not at any time permit the ratio of (i) the Total  Liabilities of Borrower
and its  Consolidated  Subsidiaries  determined  in  accordance  with  generally
accepted  accounting  principles  to (ii) the Market Value Net Worth of Borrower
and its Consolidated Subsidiaries to exceed 1.0 to 1.0.

         (c) Ratio of Cash Flow to Fixed Charges.  Borrower shall not permit the
ratio of (i) the Cash Flow of Borrower and its Consolidated Subsidiaries to (ii)
the Fixed Charges of Borrower and its Consolidated  Subsidiaries to be less than
1.50 to 1.00 at the end of any fiscal quarter.

         (d) Ratio of Secured  Indebtedness to Market Value.  Borrower shall not
permit  the  ratio  of  (i)  the  aggregate   outstanding  principal  amount  of
Indebtedness of Borrower and its  Consolidated  Subsidiaries  that is secured in
any manner by any Lien on any  property to (ii) the sum of the amounts in clause
(a) of the  definition  of Market  Value Net Worth,  to exceed 0.1 to 1.0 at any
time.

         (e) Ratio of Unencumbered Pool Value to Unsecured Liabilities. Borrower
shall  not  permit  the  ratio of (i) the  Unencumbered  Pool  Value to (ii) the
Unsecured Liabilities of Borrower and its Consolidated Subsidiaries,  to be less
than 2.00 to 1.00 at any time.

         SECTION 7.8.  Sales of Unencumbered Pool Securities.

         Borrower  shall  not,  and shall not  permit any  Guarantor  to,  sell,
transfer,  convey or otherwise dispose of any Unencumbered Pool Securities if an
Event of Default exists immediately prior to such sale, transfer,  conveyance or
disposition, or would exist immediately after giving effect thereto.

         SECTION 7.9.  Limitation on Dividends and Other Payment Restrictions
 Affecting Subsidiaries.

         Except for  limitations  contained in the Revolving  Credit  Agreement,
Borrower  will not,  and will not cause or permit  any  Consolidated  Subsidiary
(excluding any Strategic Investee Subsidiary) to, directly or indirectly, create
or  otherwise  cause or suffer to exist,  or enter into any  agreement  with any
Person that would  cause to become  effective,  any  consensual  encumbrance  or
restriction of any kind, on the ability of any such  Consolidated  Subsidiary to
(a) pay dividends, in cash or otherwise, or make any other distribution on or in
respect of its  capital  stock or any other  interest  or  participation  in, or
measured  by, its  profits,  to  Borrower or any other  Subsidiary,  (b) pay any
Indebtedness  owed to  Borrower  or any  other  Subsidiary,  (c)  make  loans or
advances to, or guarantee any Indebtedness or other  obligations of, Borrower or
any other  Subsidiary  or (d) transfer any of its property or assets to Borrower
or any other  Subsidiary,  except any  encumbrance or  restriction  (i) existing
under any agreement  governing the terms of or otherwise  arising as a result of
purchase  money  Indebtedness  for  equipment  or other  goods  acquired  in the
ordinary course of business that only imposes  encumbrances  and restrictions on




                                      -43-


<PAGE>


the  goods  so  acquired;  (ii)  contained  in any  agreement  for  the  sale or
disposition  of the capital stock of or other equity  interest in, or assets of,
any Subsidiary;  provided,  however,  that such  encumbrances  and  restrictions
described in this clause (ii) are only  applicable to such Subsidiary or assets,
as  applicable,  and any such sale or  disposition  is made in  compliance  with
Section 7.10. to the extent  applicable  thereto;  or (iii)  existing  under any
agreement that refinances or replaces the agreements  containing the encumbrance
or restrictions in the foregoing clause (i); provided,  however,  that the terms
and conditions of any such  restrictions  permitted  under this clause (iii) are
not  materially  less  favorable  to Lenders than those under or pursuant to the
agreement evidencing the Indebtedness refinanced.

         SECTION 7.10. Consolidations, Mergers and Sales of Assets.

         Neither  Borrower  nor any of its  Subsidiaries  (other than any Public
Subsidiary)  may (a)  consolidate  or merge with or into any other  Person,  (b)
sell, lease or otherwise transfer, directly or indirectly, and whether by one or
a series of related transactions,  a substantial portion of any of its assets to
any other Person, or (c) purchase or otherwise acquire,  directly or indirectly,
by one or a series of  related  transactions,  all or  substantially  all of the
assets of, or outstanding  capital stock of or other equity interest in, another
Person,  except  that (x) a  Subsidiary  (other than a  Guarantor)  may merge or
consolidate  with  another  Person  or  sell,  lease  or  otherwise  transfer  a
substantial  portion of its  assets to another  Person,  and (y)  Borrower  or a
Subsidiary may purchase or otherwise  acquire,  all or substantially  all of the
assets of, or outstanding capital stock of or other equity interests in, another
Person,  so long as (i)  Borrower  shall have given Agent at least 10 days prior
notice thereof (except in the case of a acquisition of capital stock of or other
equity interest in, existing  Affiliates),  (ii) after giving effect thereto, no
Default or Event of Default shall have occurred and be continuing,  and Borrower
shall have delivered to Agent a certificate of an Authorized  Representative  of
Borrower  setting  forth in  reasonable  detail  the  calculations  required  to
establish  whether  Borrower  will be in  compliance  with the  requirements  of
Sections 7.7. and 7.14.  after giving pro forma effect  thereto and (iii) in the
case of a consolidation or merger,  the Person  surviving such  consolidation or
merger will be a Subsidiary after giving effect thereto.

         SECTION 7.11.  Use of Proceeds.

         Borrower  will use the proceeds of all Loans made under this  Agreement
only (a) to finance  (i) the  purchase  by  Borrower  (directly,  or  indirectly
through  wholly-owned  Subsidiaries) of Securities  issued by Persons created by
Borrower or specified by Borrower  consistent  with the business  objectives  of
Borrower and (ii) loans by Borrower  permitted under Section 7.15., in each case
in order to consummate the U.S. Realty Acquisition,  (b) to acquire, directly or
indirectly,  shares of any of its  capital  stock,  and to redeem,  purchase  or
otherwise  retire  Indebtedness  of Borrower  that is  subordinated  in right of
payment to the Loans and the other Obligations, in each case, in connection with
the U.S. Realty Acquisition,  including  post-transaction  flow-back and (c) for
general corporate purposes related to the U.S. Realty Acquisition,  in each case
to the extent otherwise permitted hereunder, and for no other purposes. Borrower
will not use any proceeds of the Loans for the purpose of purchasing or carrying
any




                                      -44-


<PAGE>


"margin  stock" within the meaning of  Regulations  T, U and X if such use would
result in a violation by any party hereto of any of Regulations T, U and X.

         SECTION 7.12.  ERISA.

         Borrower  will  not  at any  time  maintain  any  Plan  subject  to the
provisions of ERISA and will not at any time be a member of any ERISA Group with
any Person that has at any time maintained any such Plan.

         SECTION 7.13.  Negative Pledge.

         Borrower will not create,  assume or suffer to exist any Lien on any of
its right,  title or interest in or to (a) any  capital  stock of any  Guarantor
(including any of Borrower's  indirect  ownership interest in such Guarantor) or
(b) any  capital  stock  of or  other  equity  interest  in any of the  Services
Subsidiaries.

         SECTION 7.14.  Restricted Payments; Agreements with Affiliates.

         (a) Borrower shall not directly or indirectly declare or make, or incur
any liability to make, any Restricted Payments; provided, however, so long as no
Event of Default  shall have  occurred and be  continuing  (and would not result
from the  occurrence  of the  following),  Borrower  may (i) pay cash  dividends
during any periods of four consecutive fiscal quarters ending during the term of
this Agreement in an aggregate  amount not to exceed 50% of Borrower's Cash Flow
Available  for   Distribution   for  such  four  fiscal  quarter  period;   (ii)
notwithstanding  the preceding  clause (i), pay cash dividends to the holders of
the 257,642  shares of  Borrower's  Series B Cumulative  Convertible  Redeemable
Voting Preferred Stock currently issued and outstanding (the "Series B Shares"),
and any other  securities  into which the Series B Shares  may be  exchanged  or
converted but only to the extent required to do so under the terms of the Series
B Shares as in effect  June 5, 1998;  provided,  however,  for  purposes of this
clause  (ii)  only if any  Event of  Default  other  than any  Event of  Default
described  in Section  8.1.(a) or (f)  through  (i) shall have  occurred  and be
continuing,  Borrower  may pay cash  dividends to the holders of Series B Shares
but only to the extent  required to do so under the terms of the Series B Shares
as in effect June 5, 1998; and (iii) acquire, directly or indirectly,  shares of
any of its capital stock, and redeem,  purchase or otherwise retire Indebtedness
of Borrower that is  subordinated in right of payment to the Loans and the other
Obligations.

         (b) Borrower  shall not,  and shall not permit any of its  Subsidiaries
that are not Public  Subsidiaries to, enter into any transaction  requiring such
Person to pay any  amounts  to or  otherwise  transfer  property  to, or pay any
management  or other fees to, any Affiliate  other than on terms and  conditions
substantially as favorable to Borrower or such Subsidiary as would be obtainable
at the  time in a  comparable  arm's-length  transaction  with a  Person  not an
Affiliate.

         SECTION 7.15.  Loans to Other Persons.

         Borrower  shall not,  and shall not permit any  Guarantor  to,  make or
permit to be outstanding any loan or advance to any Person;  provided,  however,
Borrower may make loans to




                                      -45-


<PAGE>


any  Subsidiary  (excluding  any Public  Subsidiary)  the  accounts of which are
consolidated with those of Borrower in its consolidated  financial statements in
accordance with generally accepted accounting principles,  so long as no Default
or Event of Default  exists at the time of (or would  result from) the making of
such loan. In addition to the foregoing,  Borrower and Guarantors may make loans
and advances to employees  for moving,  entertainment,  travel and other similar
expenses in the ordinary course of business consistent with past practices.

         SECTION 7.16.  ERISA Exemptions.

         Borrower  shall not  permit any of its assets to become or be deemed to
be "plan assets" within the meaning of ERISA,  the Internal Revenue Code and the
respective  regulations  promulgated  thereunder,  of  any  ERISA  Plan  or  any
Non-ERISA Plan.

         SECTION 7.17.  Exchange Listing.

         Borrower  will maintain at least one class of common shares of Borrower
having  trading  privileges on the New York Stock Exchange or the American Stock
Exchange or which is listed on The NASDAQ Stock Market's National Market.

         SECTION 7.18.  Subsidiary Guaranties

         Borrower  will  not  cause  or  permit  any  Subsidiary,   directly  or
indirectly,  to provide a Guarantee (an "Other Guarantee") of the payment of any
Indebtedness  of Borrower or any Guarantor  ("Other  Indebtedness")  unless such
Subsidiary  (a) is a Guarantor  or (b)  simultaneously  executes  and delivers a
guaranty  of the  Obligations  in form  and  substance  satisfactory  to  Agent;
provided,  however,  that if such Other Indebtedness is (i) Indebtedness that is
ranked pari passu in right of payment  with the  Obligations  or the guaranty of
such  Subsidiary,  as the case may be, the guaranty of such Subsidiary  shall be
pari passu in right of payment with the Other  Guarantee;  or (ii)  Indebtedness
subordinated  in right of  payment  to the  Obligations  (or any  guaranty  by a
Subsidiary thereof), the guaranty by such Subsidiary shall be senior in right of
payment to the Other Guarantee (which shall provide that such Other Guarantee is
subordinated  to the guaranty of such  Subsidiary  to the same extent and in the
same manner as the Other  Indebtedness is subordinated to the Obligations or the
guaranty of such Subsidiary thereof, as the case may be).

         SECTION 7.19.  Covenants Regarding Guarantors.

         (a)  Indebtedness  and  Accounts  Payable.  Borrower  will  not  permit
Guarantors to incur, assume or suffer to exist any of the following  (determined
on a collective basis): (i) accounts payable (excluding  obligations to purchase
Securities pursuant to subscription or stock purchase  agreements,  or otherwise
make capital contributions, in or with respect to Strategic Investees or Capital
Management  Entities)  in excess of  $10,000,000  in the  aggregate  at any time
outstanding and (ii) any Indebtedness other than:

               (w) Indebtedness owing to Borrower;




                                      -46-


<PAGE>


               (x)   Indebtedness   under  the  Guaranty  and,  subject  to
               compliance  with  Section  7.18.,   under  Guarantees  of  senior
               unsecured  long term  Indebtedness  of  Borrower  so long as such
               Indebtedness  so Guaranteed is of a type  described in clause (a)
               or (b) of the definition of Indebtedness;

               (y) Indebtedness represented by declared but unpaid dividends;
                and

               (z)  Indebtedness  in respect of the  Guaranty  of (and as
                defined  in) the Revolving Credit Agreement.

         (b)   Asset Transfers.  Borrower will not permit any Guarantor to
 sell, transfer or otherwise convey any of its assets other than:

               (x)  sales and transfers of Unencumbered Pool Securities to the
                    extent permitted under Section 7.8.; and

               (y)  transfers of assets to Borrower  and any other  Guarantor
                    that is organized under the laws of, and has its chief
                    executive office in,  any State of the  United  States of
                    America  or the  District  of Columbia, so long as no
                    Default or Event of Default shall have occurred and be
                    continuing or would result from such transfer.

         (c)   Independent   Director.   As  of  the  date  hereof,   SC  Realty
Incorporated's  Independent Director (as defined in such Guarantor's articles of
incorporation)  is James R. Wilcox.  Borrower  shall cause such Guarantor to pay
such  Independent  Director a director's  fee not greater than  comparable  fees
received by independent directors of entities similar to such Guarantor engaging
in  comparable  activities  with similar  risks.  Borrower  will not permit such
Guarantor to permit such Independent  Director to be a trustee in bankruptcy for
Borrower.

         (d) Compliance with and Amendment of Charter or Bylaws.  Borrower shall
cause  each  Guarantor  to (a)  comply  with  the  terms  of its  Organizational
Documents and (b) not amend, supplement,  restate or otherwise modify any of the
terms of its Organizational Documents.

         SECTION 7.20.  Investment Limitation.

         The Borrower shall not permit the aggregate  value of all Securities of
Strategic  Investees and Securities held by the Capital  Management  Entities in
real estate  companies,  the value of which is determined in accordance with the
method  referred to in clause  (d)(iii) of the  definition of Market  Value,  to
exceed  15% of the  value  of all  Securities  held  by  the  Borrower  and  its
Subsidiaries.  For purposes of this Section, the value of Securities held by the
Borrower and the Capital  Management  Entities referred to in this Section shall
be determined  in  accordance  with the  valuations  methods  referred to in the
definition of Market Value.

         SECTION 7.21.  Minimum Ownership by Borrower and Guarantors.

         At no time shall Borrower  permit (a) the aggregate value of all assets
of the types  referred to in clause (a) of the  definition  of Market  Value Net
Worth that are  directly  owned by Borrower




                                      -47-


<PAGE>


and Guarantors to be less than (b) 90.0% of the aggregate value of all assets of
such types owned by Borrower and its Consolidated Subsidiaries.

                             ARTICLE VIII. DEFAULTS

         SECTION 8.1.  Events of Default.

         If one or more of the  following  events  shall  have  occurred  and be
continuing:

         (a)  Borrower  shall fail to pay within 1 Business  Day of the due date
thereof any principal of any Obligation,  or shall fail to pay within 3 Business
Days of the due date thereof any interest owing on any Obligation, or shall fail
to pay  within  10  Business  Days of the due  date  thereof  any  fees or other
Obligation;

         (b)  Borrower  shall  fail to  observe  or perform  any  covenant  or
agreement contained in Section 7.1.(e), Section 7.10., Section 7.13. (if, in the
case of such Section 7.13.,  such failure was willful or  intentional),  Section
7.19.(a)(ii), Section 7.19.(c), Section 7.19.(d) or Section 7.21.;

         (c)  Borrower  shall  fail to  observe  or perform  any  covenant  or
agreement  contained  in  this  Agreement  (other  than  those  covered  by  the
immediately  preceding  clause (a) or (b)) for a period of 30 days after written
notice thereof from Agent has been received by Borrower;

         (d)  an Event of Default under and as defined in any Loan  Document
shall occur and be continuing or Borrower or any Guarantor shall fail to observe
or perform any covenant or agreement  contained in any of the Loan  Documents to
which it is a party (other than those  expressly  covered by any other clause of
this Section 8.1.) and such failure shall continue beyond any applicable  period
of grace;

         (e)  any  representation,  warranty,  certification  or statement made
or deemed  made (i) by or on  behalf of  Borrower  in this  Agreement  or in any
certificate,  financial  statement or other Loan Document to which it is a party
delivered  pursuant to this Agreement or any other Loan Document,  or (ii) by or
on behalf of any Guarantor in the  Guaranty,  or in any  certificate,  financial
statement or other Loan  Document to which it is a party  delivered  pursuant to
this Agreement or any other Loan Document, shall prove to have been incorrect or
misleading in any material respect when made or deemed made;

         (f)  Borrower or any Guarantor  shall fail to make any payment in
respect  of any of its  Indebtedness  (other  than the  Obligations)  having  an
aggregate  outstanding principal balance in excess of $25,000,000 in the case of
Borrower or  $10,000,000  in the case of a Guarantor,  when due and such failure
shall continue beyond any applicable grace period;

         (g)  the  maturity  of any  Indebtedness  of  Borrower  or any
Guarantor in an aggregate  principal amount in excess of $25,000,000 in the case
of  Borrower  or  $10,000,000  in the case of a  Guarantor,  shall have been (i)
accelerated  in accordance  with the  provisions of any  indenture,  contract or
instrument providing for the creation of or concerning such Indebtedness or (ii)
required to be prepaid in full prior to the stated maturity thereof;




                                      -48-


<PAGE>


         (h)  Borrower,  any  Guarantor  or any  Issuer of a  Qualifying
Security  shall  commence  a  voluntary   case  or  other   proceeding   seeking
liquidation,  reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the  appointment  of a trustee,  receiver,  liquidator,  custodian or
other similar official of it or any substantial  part of its property,  or shall
consent to any such relief or to the appointment of or taking  possession by any
such official in an involuntary case or other proceeding  commenced  against it,
or shall make a general  assignment for the benefit of creditors,  or shall fail
generally  to pay its debts as they  become  due,  or shall  take any  corporate
action to authorize any of the foregoing;

         (i)  an  involuntary  case  or  other  proceeding  shall  be  commenced
against Borrower,  any Guarantor or any Issuer of a Qualifying  Security seeking
liquidation,  reorganization  or other  relief  with  respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the  appointment  of a trustee,  receiver,  liquidator,  custodian or
other similar  official of it or any  substantial  part of its property and such
involuntary case or other proceeding shall remain undismissed and unstayed for a
period of 60 days;  or an order for  relief  shall be entered  against  any such
Person under the federal bankruptcy laws as now or hereafter in effect;

         (j)  a judgment or order for the payment of money in excess of
$25,000,000  with  respect  to  Borrower  or  $10,000,000  with  respect  to any
Guarantor shall be rendered against Borrower or a Guarantor and such judgment or
order shall  continue  unsatisfied  and unstayed for a period of 30  consecutive
days;

         (k)  during any period of twelve  consecutive  calendar months,
individuals  who were  directors  of Borrower or a Guarantor on the first day of
such period  shall cease to  constitute  a majority of the board of directors of
Borrower or such Guarantor, as applicable; provided, however, that the directors
of Borrower or a Guarantor, as applicable, may include any new director that (i)
is an officer,  director or employee of a Related Company or (ii) is required in
order (as a practical  matter) for the  composition of the board of directors of
Borrower or such Guarantor,  as applicable,  to comply with any provision of the
Organizational Documents of Borrower or such Guarantor, as applicable, regarding
independent directors;

         (l)  if a change in the management of Borrower or a Guarantor has
occurred  there shall have occurred  without the consent of Agent within 10 days
of such change any adverse  change  reasonably  deemed  material by Agent in the
identity of persons  constituting  management of Borrower or such Guarantor,  as
applicable;

         (m)  any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the  Securities  Exchange Act of 1934,  as amended  (the  "Exchange
Act")) is or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that a Person will be deemed to have  "beneficial
ownership" of all securities that such Person has the right to acquire,  whether
such right is exercised immediately or only after the passage of time), directly
or  indirectly,  of  more  than  25% of  the  total  voting  power  of the  then
outstanding voting stock of Borrower;




                                      -49-


<PAGE>


         (n)  the assets of  Borrower or any  Guarantor  at any time  constitute
assets,  within  the  meaning  of  ERISA,  the  Internal  Revenue  Code  and the
respective regulations  promulgated  thereunder,  of any ERISA Plan or Non-ERISA
Plan;

         (o)  any Guarantor shall, or shall attempt to, disavow,  revoke or
terminate the Guaranty or its obligations thereunder;

         (p)  Borrower shall cease to own, directly or indirectly,  all of the
issued and outstanding capital stock of each Guarantor; or

         (q)  an Event of Default under and as defined in the Revolving  Credit
Agreement shall have occurred and be continuing.

         SECTION 8.2.  Remedies.

         Upon the  occurrence  of an Event of Default,  and in every such event,
Agent shall, upon the direction of the Supermajority  Lenders,  (i) by notice to
Borrower  terminate the Commitments  (if then in effect),  which shall thereupon
terminate,  and (ii) by  notice  to  Borrower  declare  the  Loans and all other
Obligations  to be,  and the  Loans and all other  Obligations  shall  thereupon
become,  immediately due and payable  without  presentment,  demand,  protest or
notice of intention to  accelerate,  all of which are hereby waived by Borrower.
Notwithstanding  the  foregoing,  upon the  occurrence  of any of the  Events of
Default  specified in clause (h) or (i) of Section  8.1.,  without any notice to
Borrower or any other act by Agent,  the  Commitments  (if then in effect) shall
thereupon  immediately and  automatically  terminate and the Loans and all other
Obligations  shall  become  immediately  due and  payable  without  presentment,
demand, protest, notice of intention to accelerate or notice of acceleration, or
other  notice  of any kind,  all of which are  hereby  waived  by  Borrower.  In
addition upon the occurrence of an Event of Default,  the Supermajority  Lenders
may direct Agent to, and Agent if so directed shall,  instruct Borrower to cease
making Investments and upon receipt of any such instruction Borrower shall cease
to do so. Not in limitation of the foregoing, upon the occurrence of an Event of
Default, the Supermajority Lenders may direct Agent to, and Agent if so directed
shall,  exercise  any and all of its rights  under any and all of the other Loan
Documents and under Applicable Law.

         SECTION 8.3.  Allocation of Proceeds.

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

         (a) amounts due to Agent, and Lenders in respect of Fees and expenses
due under Sections 3.1. and 10.3.,  ratably in accordance  with the amounts then
payable;

         (b) payments of interest on Loans, to be applied for the ratable
benefit of Lenders;




                                      -50-


<PAGE>


         (c) payments of principal of Loans, to be applied for the ratable
benefit of Lenders;

         (d) amounts due to Agent and Lenders pursuant to Sections 9.6.
and 10.5.;

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

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

         SECTION 8.4.  Rescission of Acceleration by Supermajority Lenders.

         If at any time after  acceleration of the maturity of the  Obligations,
Borrower  shall pay all  arrears  of  interest  and all  payments  on account of
principal  of the  Obligations  which  shall have become due  otherwise  than by
acceleration  (with  interest  on  principal  and,  to the extent  permitted  by
Applicable Law, on overdue  interest,  at the rates specified in this Agreement)
and all Events of Default and Defaults  (other than  nonpayment  of principal of
and accrued  interest  on the  Obligations  due and payable  solely by virtue of
acceleration)   shall  be  remedied  or  waived  to  the   satisfaction  of  the
Supermajority  Lenders,  then by written notice to Borrower,  the  Supermajority
Lenders may elect,  in the sole  discretion of such  Supermajority  Lenders,  to
rescind and annul the acceleration and its  consequences;  but such action shall
not  affect  any  subsequent  Default or Event of Default or impair any right or
remedy consequent thereon. The provisions of the preceding sentence are intended
merely to bind the  Lenders to a decision  which may be made at the  election of
the Supermajority  Lenders; they are not intended to benefit Borrower and do not
give  Borrower  the  right to  require  the  Lenders  to  rescind  or annul  any
acceleration hereunder, even if the conditions set forth herein are satisfied.


                              ARTICLE IX. THE AGENT

         SECTION 9.1.  Appointment and Authorization.

         Each Lender hereby appoints and authorizes Agent to take such action as
contractual  representative  on its behalf and to exercise such powers under the
Loan Documents as are delegated to Agent by the terms thereof, together with all
such powers as are reasonably incidental thereto.  Borrower shall be entitled to
rely  conclusively upon a written notice or written response from Agent as being
made pursuant to the requisite  concurrence  or consent of Lenders  necessary to
take  such  action  without   investigation  or  otherwise   contacting  Lenders
hereunder.  Nothing  herein  shall be  construed to deem Agent a trustee for any
Lender nor to impose on Agent duties or obligations  other than those  expressly
provided for herein.  Not in  limitation  of the  foregoing,  each Lender agrees
Agent has no  fiduciary  obligations  to such Lender under this  Agreement,  any
other Loan Document or otherwise. At the request of a Lender, Agent will forward
to  each  Lender  copies  or,  where  appropriate,  originals  of the  documents
delivered  to Agent  pursuant to Section 5.1. The Agent will also furnish to any
Lender,  upon the request of such Lender,  a copy of any  certificate  or notice
furnished  to Agent by  Borrower  pursuant to this  Agreement  or any other Loan
Document  not already  delivered  to such  Lender  pursuant to the terms of this
Agreement  or any such other Loan  Document.  As to




                                      -51-


<PAGE>


any matters not expressly provided for by the Loan Documents (including, without
limitation, enforcement or collection of the Notes), Agent shall not be required
to exercise any  discretion or take any action,  but shall be required to act or
to refrain from acting (and shall be fully  protected in so acting or refraining
from  acting)  upon  the  instructions  of  the  Majority   Lenders,   and  such
instructions  shall be  binding  upon all  Lenders  and all  holders  of  Notes;
provided,  however,  that Agent shall not be  required to take any action  which
exposes  Agent to personal  liability or which is contrary to this  Agreement or
any other Loan Document or Applicable  Law. Not in limitation of the  foregoing,
Agent  shall not  exercise  any right or remedy it or Lenders may have under any
Loan Document upon the occurrence of a Default or an Event of Default unless the
Supermajority  Lenders have so directed  Agent to exercise such right or remedy.
Agent shall not be deemed to have  knowledge  or notice of the  occurrence  of a
Default or Event of Default unless Agent has actual knowledge of such Default or
Event of Default. In the event that Agent has actual knowledge of the occurrence
of a Default or Event of  Default,  Agent shall give  prompt  notice  thereof to
Lenders.  Each  Lender  authorizes  and  directs  Agent to  enter  into the Loan
Documents for the benefit of Lenders.  Each Lender hereby agrees that, except as
otherwise  set forth  herein,  any action taken by the  Majority  Lenders or the
Supermajority Lenders, as applicable,  in accordance with the provisions of this
Agreement or the Loan Documents, and the exercise by the Majority Lenders or the
Supermajority Lenders, as applicable, of the powers set forth herein or therein,
together with such other powers as are reasonably  incidental thereto,  shall be
authorized and binding upon all of Lenders.

         SECTION 9.2.  Agent and Affiliates.

         Wells Fargo,  as a Lender,  shall have the same rights and powers under
this  Agreement and any other Loan Document as any other Lender and may exercise
the same as though it were not Agent;  and the term "Lender" or "Lenders" shall,
unless otherwise  expressly  indicated,  include Wells Fargo in each case in its
individual  capacity.  Wells Fargo and its  affiliates and the other Lenders and
their respective  affiliates may each accept deposits from, maintain deposits or
credit balances for,  invest in, lend money to, act as trustee under  indentures
of, and  generally  engage in any kind of business  with  Borrower,  any Related
Company and any Affiliate of Borrower and any Related  Company as if Wells Fargo
or such Lender  were any other bank and without any duty to account  therefor to
the other Lenders.

         SECTION 9.3.  Approvals of Lenders.

         All  communications  from Agent to any Lender  requesting such Lender's
determination,  consent,  approval or disapproval (a) shall be given in the form
of a written notice to such Lender, (b) shall be accompanied by a description of
the  matter  or thing as to  which  such  determination,  approval,  consent  or
disapproval is requested, or shall advise such Lender where such matter or thing
may be  inspected,  or  shall  otherwise  describe  the  matter  or  issue to be
resolved,  (c) shall include, if reasonably  requested by such Lender and to the
extent not previously  provided to such Lender,  written materials and a summary
of all oral  information  provided  to Agent by  Borrower  or any  Guarantor  in
respect of the matter or issue to be  resolved,  and (d) shall  include  Agent's
recommended  course of action or determination  in respect thereof.  Each Lender
shall reply  promptly,  but in any event within  fifteen  Business Days (or such
lesser period as may be required




                                      -52-


<PAGE>


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

         SECTION 9.4.  Consultation with Experts.

         Agent may consult  with legal  counsel (who may be counsel for Borrower
or a Guarantor), independent public accountants and other experts selected by it
and shall not be liable  for any  action  taken or  omitted to be taken by it in
good  faith in  accordance  with the  advice  of such  counsel,  accountants  or
experts.

         SECTION 9.5.  Liability of Agent.

         Neither  Agent nor any of its  affiliates  nor any of their  respective
directors, officers, agents or employees shall be liable for any action taken or
not taken by Agent in connection  with any of the Loan  Documents in the absence
of its own gross negligence or willful misconduct.  Neither Agent nor any of its
affiliates nor any of their respective directors,  officers, agents or employees
shall be responsible  for or have any duty to ascertain,  inquire into or verify
(a) any statement, warranty or representation made in connection with any of the
Loan Documents, or any borrowing hereunder, (b) the performance or observance of
any of  the  covenants  or  agreements  of  Borrower  or a  Guarantor,  (c)  the
satisfaction  of any  condition  specified  in Article V., or (d) the  validity,
effectiveness  or  genuineness  of any  of  the  Loan  Documents  or  any  other
instrument or writing furnished in connection herewith or therewith. Agent shall
not  incur  any  liability  by  acting in  reliance  upon any  notice,  consent,
certificate,  statement,  or other writing  (which may be a bank wire,  telex or
similar  writing)  believed by it in good faith to be genuine or to be signed by
the proper party or parties.

         SECTION 9.6.  Indemnification of Agent.

         Lenders  agree to  indemnify  Agent (to the  extent not  reimbursed  by
Borrower and without limiting the obligation of Borrower to do so) in accordance
with  Lenders'  respective  Pro  Rata  Shares,  from  and  against  any  and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs,  expenses or disbursements of any kind or nature  whatsoever which may at
any time be  imposed  on,  incurred  by, or  asserted  against  Agent in any way
relating to or arising out of the Loan  Documents or any action taken or omitted
by Agent under the Loan Documents;  provided,  however,  that no Lender shall be
liable  for any  portion  of such  liabilities,  obligations,  losses,  damages,
penalties,  actions,  judgments,  suits, costs, expenses or disbursements (i) to
the extent arising from Agent's gross  negligence or willful  misconduct or (ii)
if Agent fails to follow the written  direction of the Majority  Lenders  unless
such failure is pursuant to Agent's good faith reliance on the advice of counsel
of which Lenders have received  notice.  Without  limiting the generality of the
foregoing,  each Lender agrees to reimburse  Agent  promptly upon demand for its
ratable share of any out-of-pocket expenses (including counsel fees) incurred by
Agent  in  connection  with  the  preparation,  execution,   administration,  or
enforcement  of, or legal advice with respect to the rights or  responsibilities
of the  parties  under,




                                      -53-


<PAGE>


the Loan Documents, to the extent that Agent is not reimbursed for such expenses
by Borrower.  The  agreements  in this Section  shall survive the payment of the
Loans and all other amounts payable  hereunder or under the other Loan Documents
and the termination of this Agreement.

         SECTION 9.7.  Credit Decision.

         Each Lender  expressly  acknowledges  that neither Agent nor any of its
officers,  directors,  employees, agents,  attorneys-in-fact or other affiliates
has made any  representations  or  warranties  to such Lender and that no act by
Agent  hereinafter  taken,  including  any review of the  affairs of Borrower or
Guarantors,  shall be deemed to  constitute  any  representation  or warranty by
Agent to any Lender.  Each Lender  acknowledges  that it has,  independently and
without  reliance upon Agent, any other Lender or counsel to Agent, and based on
the  financial  statements  of Borrower or Guarantors  and its  affiliates,  its
review of the Loan Documents,  the legal opinions required to be delivered to it
hereunder,  the  advice  of  its  own  counsel  and  such  other  documents  and
information as it has deemed appropriate, made its own credit and legal analysis
and  decision  to enter into this  Agreement  and the  transaction  contemplated
hereby.  Each Lender also acknowledges  that it will,  independently and without
reliance  upon Agent,  any other  Lender or counsel to Agent,  and based on such
review,  advice,  documents and information as it shall deem  appropriate at the
time,  continue to make its own  decisions in taking or not taking  action under
the Loan Documents.  Except for notices,  reports and other documents  expressly
required to be furnished to Lenders by Agent hereunder, Agent shall have no duty
or  responsibility  to provide any Lender  with any credit or other  information
concerning the business, operations,  property, financial and other condition or
creditworthiness  of Borrower,  any Guarantor,  any other Related Company or any
other  Affiliate  thereof which may come into  possession of Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or other affiliates.

         SECTION 9.8.  Successor Agent.

         Agent may resign at any time by giving 30 days'  prior  written  notice
thereof,  to Lenders and Borrower.  Agent may be removed as Agent under the Loan
Documents  for good cause  upon 30 days'  prior  written  notice to Agent by the
Supermajority  Lenders.  Upon any such resignation or removal, the Supermajority
Lenders shall have the right to appoint a successor Agent. If no successor Agent
shall  have been so  appointed  by the  Supermajority  Lenders,  and shall  have
accepted such  appointment,  within 30 days after the current  Agent's giving of
notice of  resignation  or the  Supermajority  Lenders'  removal of the  current
Agent,  then the current  Agent may,  on behalf of Lenders,  appoint a successor
Agent,  which shall be a Lender,  if any Lender  shall be willing to serve.  Any
successor  Agent must be a bank (a) whose debt  obligations  (or whose  parent's
debt  obligations) are rated not less than investment grade or its equivalent by
Moody's or not less than  investment  grade or its  equivalent by S&P, (b) which
has total assets in excess of  $10,000,000,000  and (c) so long as no Default or
Event of Default shall have occurred and be continuing, reasonably acceptable to
Borrower.  Upon  the  acceptance  of its  appointment  as Agent  hereunder  by a
successor  Agent,  such successor  Agent shall  thereupon  succeed to and become
vested  with all the rights and duties of the  current  Agent,  and the  current
Agent shall be discharged from its duties and obligations hereunder. The current
Agent  shall at the expense of  Borrower  execute and deliver to such  successor
Agent such instruments of transfer as may be




                                      -54-


<PAGE>


reasonably  necessary to accomplish such  succession.  After any current Agent's
resignation  hereunder as Agent,  the  provisions of this Article shall inure to
its  benefit as to any  actions  taken or omitted to be taken by it while it was
Agent.

         SECTION 9.9.  Titled Parties.

         None  of the  Documentation  Agent,  the  Co-Documentation  Agent,  the
Syndication  Agent  nor  either  of the  Co-Lead  Arrangers  in such  respective
capacities (all such Persons,  "Titled Parties"),  assumes any responsibility or
obligation hereunder, including, without limitation, for servicing,  enforcement
or  collection  of any of the Loans,  nor any duties as an agent  hereunder  for
Lenders.  The  titles  of  "Documentation  Agent",   "Co-Documentation   Agent",
"Syndication Agent",  "Co-Lead Arrangers",  and "Joint Book Managers" are solely
honorific and imply no fiduciary  responsibility on the part of any Title Party,
in its respective capacity as such, to Agent, Borrower or any Lender and the use
of such  titles  does  not  impose  on any  such  Titled  Party  any  duties  or
obligations  greater  than those of any other Lender or entitle any Titled Party
to any rights other than those to which any other Lender is entitled.


                            ARTICLE X. MISCELLANEOUS

         SECTION 10.1.  Notices.

         All notices,  requests and other  communications to any party under the
Loan Documents shall be in writing (including bank wire, facsimile  transmission
or similar writing) and shall be given to such party as follows:

         If to Borrower:

                  Security Capital Group Incorporated
                  125 Lincoln Avenue
                  Santa Fe, New Mexico  87501
                  Attention:  Jeffrey A. Klopf
                  Telecopier:  (505) 988-8920
                  Telephone:  (505) 982-9292

                  with a copy to:

                  Security Capital Group Incorporated
                  777 Market Center Avenue
                  El Paso, Texas 79912-8412
                  Attention: Paul E. Szurek
                  Telecopier:  (915) 877-3301
                  Telephone:  (915) 877-6390




                                      -55-


<PAGE>


                  and to:

                  Mayer, Brown & Platt
                  190 South LaSalle Street
                  Chicago, Illinois 60603
                  Attention:  J. Paul Forrester
                  Telecopier:  (312) 701-7711
                  Telephone:  (312) 701-7366

         If to a Lender or Agent:

                  To such Lender's or Agent's Lending Office

or as to each party at such other  address as such party  shall  designate  in a
written  notice  to the  other  parties.  Each  such  notice,  request  or other
communication  shall be  effective  (a) if given by mail,  72 hours  after  such
communication  is  deposited  in the mails with  first  class  postage  prepaid,
addressed as aforesaid or (b) if given by any other means (including facsimile),
when delivered at the applicable address provided for in this Section;  provided
that  notices to Agent under  Article II., and any notice of a change of address
for notices,  shall not be effective until received.  In addition to the Agent's
Lending  Office,  Borrower  shall send copies of the  information  described  in
Section 7.1. to the following address of Agent:

                  Wells Fargo Bank, National Association
                  Real Estate Group
                  Koll Center
                  2030 Main Street, Suite 800
                  Irvine, California  92714
                  Attention:  Ms. Cherri Rodgers

         SECTION 10.2.  No Waivers.

         No  failure or delay by Agent or any  Lender in  exercising  any right,
power or privilege under any Loan Document shall operate as a waiver thereof nor
shall any  single or  partial  exercise  thereof  preclude  any other or further
exercise  thereof or the exercise of any other right,  power or  privilege.  The
rights and remedies  provided in the Loan Documents  shall be cumulative and not
exclusive of any rights or remedies provided by law.

         SECTION 10.3.  Expenses.

         Borrower will pay on demand all present and future reasonable  expenses
of:

         (a) Agent in connection with the negotiation,  preparation,  execution,
delivery  and  administration  (including  reasonable  out-of-pocket  costs  and
expenses  incurred in connection  with the  assignment of  Commitments  or Loans
pursuant to Section  10.8.) of this  Agreement,  the Notes and each of the other
Loan  Documents,  whenever the same shall be executed and  delivered,  including
appraisers'  fees,  search  fees,  recording  fees and the  reasonable  fees and




                                      -56-


<PAGE>


disbursements of: (i) Alston & Bird LLP, counsel for Agent, (ii) Locke Liddell &
Sapp LLP,  counsel for The Chase  Manhattan Bank and Chase  Securities  Inc. and
(iii) each local counsel retained by Agent;

         (b) Agent in connection with the  negotiation,  preparation,  execution
and delivery of any waiver, amendment or consent by Agent or any Lender relating
to this  Agreement,  the Notes or any of the other  Loan  Documents  or sales of
participations  in any Lender's  Commitment or Loans,  including the  reasonable
fees and disbursements of counsel to Agent;

         (c) Agent and each of Lenders  in  connection  with any  restructuring,
refinancing or "workout" of the transactions contemplated by this Agreement, the
Notes  and  the  other  Loan  Documents,   including  the  reasonable  fees  and
disbursements of counsel to Agent and any Lender actually incurred;

         (d) Agent and each of  Lenders,  after the  occurrence  of a Default or
Event of Default,  in  connection  with the  collection  or  enforcement  of the
obligations of Borrower or any Guarantor under this Agreement,  the Notes or any
other Loan Document,  including the reasonable fees and disbursements of counsel
to Agent or to any Lender actually incurred if such collection or enforcement is
done by or through an attorney;

         (e) Subject to any  limitation  contained in Section  10.5.,  Agent and
each of Lenders in connection with prosecuting or defending any claim in any way
arising out of, related to, or connected with this  Agreement,  the Notes or any
of the other Loan Documents,  including the reasonable fees and disbursements of
counsel  to Agent or any  Lender  actually  incurred  and of  experts  and other
consultants retained by Agent or any Lender in connection therewith;

         (f) Agent and each of  Lenders,  after the  occurrence  of a Default or
Event of Default,  in connection with the exercise by Agent or any Lender of any
right or remedy  granted  to it under  this  Agreement,  the Notes or any of the
other Loan Documents  including the reasonable fees and disbursements of counsel
to Agent or any Lender actually incurred; and

         (g) Agent and each of Lenders, to the extent not already covered by any
of the  preceding  subsections,  in  connection  with  any  bankruptcy  or other
proceeding of the type described in Sections  8.1.(h) or (i), and the reasonable
fees and  disbursements of counsel to Agent and any Lender actually  incurred in
connection  with  the  representation  of  Agent or such  Lender  in any  matter
relating to or arising out of any such proceeding,  including without limitation
(i) any motion for relief from any stay or similar order,  (ii) the negotiation,
preparation,  execution  and delivery of any document  relating to Agent or such
Lender and (iii) the negotiation  and preparation of any plan of  reorganization
of Borrower or any Guarantor,  whether  proposed by Borrower or such  Guarantor,
Lenders or any other  Person,  and whether  such fees and  expenses are incurred
prior  to,  during  or  after  the   commencement  of  such  proceeding  or  the
confirmation or conclusion of any such proceeding.




                                      -57-


<PAGE>


         SECTION 10.4.  Stamp, Intangible and Recording Taxes.

         Borrower  will  pay  any  and  all  stamp,  intangible,   registration,
recordation  and similar taxes,  fees or charges and shall  indemnify  Agent and
each Lender  against any and all  liabilities  with respect to or resulting from
any delay in the payment or  omission  to pay any such  taxes,  fees or charges,
which  may be  payable  or  determined  to be  payable  in  connection  with the
execution,  delivery,  recording,  performance or enforcement of this Agreement,
the Notes and any of the other Loan Documents or the perfection of any rights or
Liens thereunder.

         SECTION 10.5.  Indemnification.

         Borrower shall and hereby agrees to indemnify, defend and hold harmless
Agent and each of Lenders and their respective directors,  officers,  agents and
employees from and against (a) any and all losses, claims, damages, liabilities,
deficiencies,  judgments  or  expenses  incurred  by any of them  (except to the
extent that it results from their own gross  negligence  or willful  misconduct)
arising  out  of or by  reason  of any  litigation,  investigations,  claims  or
proceedings  which arise out of or are in any way related to: (i) this Agreement
or any of the other Loan Documents, or the transactions  contemplated hereby and
thereby;  (ii) the making of Loans; (iii) any actual or proposed use by Borrower
of the  proceeds of the Loans;  or (iv) Agent's or Lenders'  entering  into this
Agreement,  the other  Loan  Documents  or any other  agreements  and  documents
relating  hereto,  including,  without  limitation,  amounts paid in settlement,
court costs and the reasonable  fees and  disbursements  of counsel  incurred in
connection with any such litigation,  investigation,  claim or proceeding or any
advice rendered in connection with any of the foregoing and (b) any such losses,
claims, damages,  liabilities,  deficiencies,  judgments or expenses incurred in
connection  with any remedial or other  similar  action  taken by Borrower,  any
Guarantor, Agent or any of Lenders in connection with the required compliance by
Borrower,  any  Guarantor  or any of the  other  Subsidiaries,  or any of  their
respective  properties,  with any federal,  state or local Environmental Laws or
other material environmental rules, regulations, orders, directions, ordinances,
criteria or  guidelines.  If and to the extent that the  obligations of Borrower
hereunder are unenforceable  for any reason,  Borrower hereby agrees to make the
maximum  contribution to the payment and satisfaction of such obligations  which
is permissible  under  Applicable Law.  Borrower's  obligations  hereunder shall
survive any  termination  of this Agreement and the other Loan Documents and the
payment  in  full  of the  Obligations,  and  are in  addition  to,  and  not in
substitution of, any other of its other  obligations set forth in this Agreement
and the other Loan Documents.

         SECTION 10.6.  Setoff.

         In addition to any rights now or hereafter granted under Applicable Law
and  not by  way of  limitation  of any  such  rights,  each  Lender  is  hereby
authorized  by  Borrower,  at any time or from time to time,  without  notice to
Borrower or to any other Person,  any such notice being hereby expressly waived,
but subject to receipt of Agent's  prior written  consent  exercised in its sole
discretion,  to set-off  and to  appropriate  and to apply any and all  deposits
(general or special,  including,  but not limited to, indebtedness  evidenced by
certificates   of  deposit,   whether   matured  or  unmatured)  and  any  other
indebtedness  at any time held or owing by such Lender or any




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<PAGE>


affiliate  of such  Lender,  to or for the  credit or the  account  of  Borrower
against  and on account of any of the  Obligations  then due and owing after the
expiration of any  applicable  grace  periods.  Nothing  contained  herein shall
require any Lender to exercise  any such right or shall  affect the right of any
Lender to exercise,  and retain the benefits of exercising,  any such right with
respect to any other indebtedness or obligation of Borrower. Borrower agrees, to
the fullest  extent it may  effectively  do so under  Applicable  Law,  that any
holder of a  participation  in a Note,  whether or not acquired  pursuant to the
foregoing arrangements,  may exercise rights of setoff or counterclaim and other
rights  with  respect  to such  participation  as fully as if such  holder  of a
participation  were a  direct  creditor  of  Borrower  in  the  amount  of  such
participation.

         SECTION 10.7.  Amendments.

         Any consent or approval  required or permitted by this  Agreement or in
any other Loan Document  (other than any agreement  evidencing the fees referred
to in Section  3.1.(b)) to be given by Lenders may be given, and the performance
or  observance  by  Borrower  or any  Guarantor  of any  terms of any such  Loan
Document  or the  continuance  of any  Default or Event of Default may be waived
(either  generally  or in a  particular  instance  and either  retroactively  or
prospectively) with, but only with, the written consent of the Majority Lenders.
Any provision of this  Agreement or of any other Loan  Document  (other than any
agreement  evidencing the fees referred to in Section 3.1.(b)) may be amended or
otherwise  modified with,  but only with,  the written  consent of Borrower or a
Guarantor,  as  applicable,  and the  Majority  Lenders.  Any  provision  of any
agreement  evidencing the fees referred to in Section  3.1.(b) may be amended or
otherwise  modified  only in  writing by the  applicable  Co-Lead  Arranger  and
Borrower, and the performance or observance by Borrower of any terms of any such
agreement may be waived only with the written consent of the applicable  Co-Lead
Arranger. Notwithstanding the foregoing, none of the following may be amended or
otherwise modified, nor may compliance by Borrower or a Guarantor, as applicable
thereunder or with respect thereto be waived, without the written consent of all
Lenders and Borrower or such Guarantor, as applicable:  (a) the principal amount
of any Loan (including forgiveness of any amount of principal); (b) the rates of
interest  on the  Loans  and the  amount of any  interest  payable  on the Loans
(including the forgiveness of any accrued but unpaid interest); (c) the dates on
which any principal or interest  payable by Borrower  under any Loan Document is
due; (d) the  provisions  of this Section;  (e) the  Termination  Date;  (f) the
definition of Commitment, Available Loan Amount and Unencumbered Pool Value (and
the  definitions  used in either such  definition and the  percentages and rates
used in the  calculation  thereof);  and (g) the amount and payment  date of any
fees.  Notwithstanding  the  foregoing,  none of the following may be amended or
otherwise modified, nor may compliance by Borrower or a Guarantor, as applicable
thereunder or with respect thereto be waived, without the written consent of the
Supermajority  Lenders and Borrower or such  Guarantor,  as applicable:  (i) the
definitions of Approved Issuer, Qualifying Securities and Supermajority Lenders;
and (ii) the provisions of Section 7.7. through and including  Section 7.19. and
Section 7.21.  Further,  no amendment,  waiver or consent  unless in writing and
signed by Agent,  in  addition  to  Lenders  required  hereinabove  to take such
action,  shall affect the rights or duties of Agent under this  Agreement or any
of the other Loan  Documents.  Further,  no Guarantor shall be released from the
Guaranty (except as permitted by Section  10.14.(b)),  nor shall the Guaranty be
terminated (except as expressly  permitted by the terms thereof),  unless all of
the Lenders consent thereto in




                                      -59-


<PAGE>


writing. No waiver shall extend to or affect any obligation not expressly waived
or impair  any right  consequent  thereon.  No  course  of  dealing  or delay or
omission  on the part of any  Lender  or Agent in  exercising  any  right  shall
operate as a waiver thereof or otherwise be prejudicial thereto. No notice to or
demand upon Borrower shall entitle Borrower to other or further notice or demand
in similar or other circumstances.

         SECTION 10.8.  Successors and Assigns.

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

         (b) Any  Lender  may at any time  grant  to one or more  banks or other
financial  institutions which are not affiliates of, or otherwise related in any
way to, Borrower or any Guarantor (each a "Participant") participating interests
in its Commitment or the Obligations  owing to such Lender;  provided,  however,
(i) no Lender may grant a participating  interest in its  Commitment,  or if the
Term Loans have been made, the aggregate  outstanding  principal  balance of the
Note held by it, in an amount less than $10,000,000 and (ii) after giving effect
to any such  participation  by Agent in its capacity as a Lender,  the amount of
its Commitment,  or if the Term Loans have been made, the aggregate  outstanding
principal  balance  of the Note  held by it,  in which  it has not  granted  any
participating  interests  must be at  least  $10,000,000.  Except  as  otherwise
provided  in Section  10.6.,  no  Participant  shall have any rights or benefits
under this Agreement or any other Loan Document.  In the event of any such grant
by a Lender of a  participating  interest to a  Participant,  such Lender  shall
remain  responsible  for  the  performance  of its  obligations  hereunder,  and
Borrower and Agent shall  continue to deal solely and directly  with such Lender
in connection with such Lender's  rights and  obligations  under this Agreement.
Any  agreement  pursuant  to which any  Lender  may grant  such a  participating
interest  shall  provide  that  such  Lender  shall  retain  the sole  right and
responsibility  to enforce  the  obligations  of Borrower  hereunder  including,
without limitation,  the right to approve any amendment,  modification or waiver
of any provision of this  Agreement;  provided,  however,  such Lender may agree
with the Participant  that it will not,  without the consent of the Participant,
agree to (i) increase,  or except as  contemplated  by Section 2.9.,  extend the
term  or  extend  the  time or  waive  any  requirement  for  the  reduction  or
termination  of, such  Lender's  Commitment,  (ii) extend the date fixed for the
payment of  principal of or interest on the Loans or portions  thereof  owing to
such Lender,  (iii) reduce the amount of any such payment of principal,  or (iv)
reduce the rate at which  interest is payable  thereon.  An  assignment or other
transfer  which is not permitted by  subsection  (c) or (d) below shall be given
effect for  purposes  of this  Agreement  only to the extent of a  participating
interest granted in accordance with this subsection (b).

         (c) Any Lender may with the prior written consent of Agent and, so long
as no Event of Default shall have occurred and be  continuing,  Borrower  (which
consent, in each case, shall not be unreasonably withheld) at any time assign to
one or more Eligible Assignees which are not affiliates of, or otherwise related
in any way to,  Borrower or any Guarantor  (each an "Assignee") all or a portion
of its rights and  obligations  under this  Agreement  and the Notes;




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<PAGE>


provided, however, (i) no such consent by Borrower or Agent shall be required in
the case of any  assignment to another Lender or any affiliate of such Lender or
another Lender; (ii) any partial assignment shall be in an amount at least equal
to $10,000,000 and after giving effect to such  assignment the assigning  Lender
retains a Commitment,  or if the Term Loans have been made,  holds a Note having
an aggregate outstanding  principal balance, of at least $10,000,000;  and (iii)
each such assignment  shall be effected by means of an Assignment and Acceptance
Agreement.  Upon  execution and delivery of such  instrument and payment by such
Assignee to such  transferor  Lender of an amount  equal to the  purchase  price
agreed between such transferor Lender and such Assignee,  such Assignee shall be
deemed to be a Lender party to this  Agreement and shall have all the rights and
obligations  of a  Lender  as  set  forth  in  such  Assignment  and  Acceptance
Agreement,  and the  transferor  Lender shall be released  from its  obligations
hereunder to a  corresponding  extent,  and no further  consent or action by any
party shall be required.  Upon the  consummation  of any assignment  pursuant to
this  subsection  (c), the  transferor  Lender,  Agent and  Borrower  shall make
appropriate  arrangements  so that new Notes are issued to the Assignee and such
transferor Lender, as appropriate.  In connection with any such assignment,  the
transferor Lender shall pay to Agent an  administrative  fee for processing such
assignment in the amount of $3,000.

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

         (e) A Lender may  furnish any  information  concerning  any  Guarantor,
Borrower or any of its  Subsidiaries  in the possession of such Lender from time
to time to Assignees  and  Participants  (including  prospective  Assignees  and
Participants).

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

         SECTION 10.9.  Governing Law.

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

         SECTION 10.10.  Litigation.

         (a) EACH PARTY  HERETO  ACKNOWLEDGES  THAT ANY  DISPUTE OR  CONTROVERSY
BETWEEN OR AMONG  BORROWER,  AGENT OR ANY OF LENDERS WOULD BE BASED ON DIFFICULT
AND  COMPLEX  ISSUES  OF LAW AND FACT AND THAT A TRIAL BY JURY  COULD  RESULT IN
SIGNIFICANT DELAY AND EXPENSE.  ACCORDINGLY,  TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW,




                                      -61-


<PAGE>


EACH OF LENDERS, AGENT AND BORROWER HEREBY WAIVES TRIAL BY JURY IN ANY ACTION OR
PROCEEDING OF ANY KIND OR NATURE IN ANY COURT OR TRIBUNAL IN WHICH AN ACTION MAY
BE COMMENCED BY OR AGAINST BORROWER ARISING OUT OF THIS AGREEMENT,  THE NOTES OR
ANY OTHER LOAN  DOCUMENT OR BY REASON OF ANY OTHER  CAUSE OR DISPUTE  WHATSOEVER
BETWEEN OR AMONG BORROWER, AGENT OR ANY OF LENDERS OF ANY KIND OR NATURE.

         (b) BORROWER, AGENT AND EACH LENDER EACH HEREBY AGREES THAT THE FEDERAL
DISTRICT COURT OF THE SOUTHERN  DISTRICT OF NEW YORK OR, AT THE OPTION OF AGENT,
ANY STATE  COURT  LOCATED  IN THE  BOROUGH  OF  MANHATTAN,  NEW YORK  SHALL HAVE
NON-EXCLUSIVE  JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN
OR AMONG BORROWER, AGENT OR ANY OF LENDERS, PERTAINING DIRECTLY OR INDIRECTLY TO
THIS  AGREEMENT,  THE NOTES OR ANY OTHER LOAN DOCUMENT OR TO ANY MATTER  ARISING
HEREFROM OR  THEREFROM.  BORROWER  EXPRESSLY  SUBMITS AND CONSENTS IN ADVANCE TO
SUCH  JURISDICTION  IN ANY ACTION OR  PROCEEDING  COMMENCED IN SUCH COURTS.  THE
CHOICE OF FORUM SET FORTH IN THIS  SECTION  SHALL NOT BE DEEMED TO PRECLUDE  THE
BRINGING OF ANY ACTION BY AGENT OR ANY LENDER OR THE ENFORCEMENT BY AGENT OR ANY
LENDER  OF  ANY  JUDGMENT  OBTAINED  IN  SUCH  FORUM  IN ANY  OTHER  APPROPRIATE
JURISDICTION.  FURTHER,  BORROWER  IRREVOCABLY  WAIVES,  TO THE  FULLEST  EXTENT
PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF THE VENUE OF ANY SUCH  PROCEEDING  BROUGHT IN SUCH A COURT AND ANY
CLAIM THAT ANY SUCH  PROCEEDING  BROUGHT IN SUCH A COURT HAS BEEN  BROUGHT IN AN
INCONVENIENT FORUM.

         (c) THE FOREGOING WAIVERS HAVE BEEN MADE WITH THE ADVICE OF COUNSEL AND
WITH A FULL UNDERSTANDING OF THE LEGAL CONSEQUENCES  THEREOF,  AND SHALL SURVIVE
THE PAYMENT OF THE LOANS AND ALL OTHER  AMOUNTS  PAYABLE  HEREUNDER OR UNDER THE
OTHER LOAN DOCUMENTS AND THE TERMINATION OF THIS AGREEMENT.

         SECTION 10.11.  Counterparts; Integration.

         This  Agreement  may be signed in any number of  counterparts,  each of
which shall be an original,  with the same effect as if the  signatures  thereto
and hereto were upon the same  instrument.  This  Agreement,  together  with the
other Loan Documents,  constitutes the entire agreement and understanding  among
the  parties   hereto  and   supersedes   any  and  all  prior   agreements  and
understandings, oral or written, relating to the subject matter hereof.

         SECTION 10.12.  Notice of Final Agreement.

         THIS AGREEMENT  REPRESENTS THE FINAL AGREEMENT  BETWEEN THE PARTIES AND
MAY NOT BE  CONTRADICTED  BY EVIDENCE OF PRIOR,




                                      -62-


<PAGE>


CONTEMPORANEOUS,  OR SUBSEQUENT  ORAL  AGREEMENTS  OF THE PARTIES.  THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

         SECTION 10.13.  Invalid Provisions.

         Any  provision of this  Agreement or any other Loan  Document held by a
court of competent  jurisdiction to be illegal,  invalid or unenforceable  shall
not invalidate the remaining provisions of such Loan Document which shall remain
in full  force and  effect  and the  effect  thereof  shall be  confined  to the
provision held invalid or illegal.

         SECTION 10.14.  Additional Guarantors; Release of Guarantors.

         (a)  Additional   Guarantors.   Any  direct  or  indirect  wholly-owned
Subsidiary of Borrower may become a Guarantor by delivering to Agent each of the
following:  (i) an Accession Agreement duly executed by such Subsidiary and (ii)
the items that would have been delivered  under Sections  5.1.(d),  (e), and (j)
through (m) if such Subsidiary had been a Guarantor on the date hereof.

         (b) Release of Guarantors. If a Guarantor no longer owns any Securities
that are  Unencumbered  Pool  Securities  and is not  required to  guaranty  the
Obligations  under Section 7.18.,  then upon the written  request of Borrower to
Agent and so long as no Default or Event of Default  shall have  occurred and be
continuing,  Agent shall release such Guarantor  from the Guaranty.  To evidence
such release,  Agent agrees to execute and deliver, at the sole cost and expense
of Borrower, such instruments as Borrower may reasonably request.

                         [Signatures on Following Pages]











                                      -63-


<PAGE>


         IN WITNESS  WHEREOF,  the parties  hereto have caused this  Amended and
Restated  Credit  Agreement to be duly executed by their  respective  authorized
officers as of the day and year first above written.

                                            SECURITY CAPITAL GROUP INCORPORATED


                                            By:_________________________________
                                                 Name:__________________________
                                                 Title:_________________________











                       [Signatures Continued on Next Page]











                                      -64-


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                                  SCHEDULE 1.1

                               Initial Guarantors


Alston Holdings SARL (f/k/a Security Capital Holdings Investment I SARL)
Barcelona Holdings SARL (f/k/a Security Capital Holdings Investment II SARL)
Coventry Holdings SARL (f/k/a Security Capital Holdings Investment III SARL)
Dublin Holdings SARL (f/k/a Security Capital Holdings Investment IV SARL)
Edinburgh Holdings SARL (f/k/a Security Capital Holdings Investment V SARL)
Frankfurt Holdings SARL (f/k/a Security Capital Holdings Investment VI SARL)
Geneva Holdings SARL (f/k/a Security Capital Holdings Investment VII SARL)
Helsinki Holdings SARL (f/k/a Security Capital Holdings Investment VIII SARL)
Istanbul Holdings SARL (f/k/a Security Capital Holdings Investment IX SARL)
Johnstone Holdings SARL (f/k/a Security Capital Holdings Investment X SARL)
Kirkwall Holdings SARL (f/k/a Security Capital Holdings Investment XI SARL)
Libson Holdings SARL (f/k/a Security Capital Holdings Investment XII SARL)
Madrid Holdings SARL (f/k/a Security Capital Holdings Investment XIII SARL)
Arden Square Holdings SARL (f/k/a Security Capital Shopping Center I SARL)
Blossom Valley Holdings SARL (f/k/a Security Capital Shopping Center II SARL)
Cooper Street Plaza Holdings SARL (f/k/a Security Capital Shopping Center
   III SARL)
Dallas Holdings SARL (f/k/a Security Capital Shopping Center IV SARL)
El Camino Holdings SARL (f/k/a Security Capital Shopping Center V SARL)
Friars Mission Holdings SARL (f/k/a Security Capital Shopping Center VI SARL)
Security Capital Office Portfolio SARL
Security Capital Storage Portfolio SARL
Sheffield Holdings SARL (f/k/a Security Capital Holdings Investment XIV SARL)
Redondo Village Holdings SARL (f/k/a Security Capital Shopping Center VII SARL)