GUARANTY OF FRANCHISE FINANCE CORPORATION OF AMERICA
              ----------------------------------------------------


THIS  GUARANTY,   dated  December  31,  1996,  is  given  by  Franchise  Finance
Corporation of America,  a corporation  organized under the laws of the State of
Delaware (the  "Guarantor")  in favor of NationsBank,  N.A., a national  banking
association organized under the laws of the United States ("NationsBank") .

1.  Unconditional  Guaranty.  In consideration  of and to induce  NationsBank to
enter into any Transactions, as defined in the ISDA Master Agreement between our
subsidiary FFCA Mortgage  Corporation  ("Counterparty")  and NationsBank,  dated
December 31, 1996 (the "Agreement"), the Guarantor unconditionally guarantees to
NationsBank  and its  successors  and assigns  (collectively,  the "Bank"),  the
prompt payment when due of all present and future obligations and liabilities of
all kinds (including any renewals,  extensions or modifications thereof) arising
out of any  Transactions  pursuant  to the  Agreement  between  the Bank and the
Counterparty (the "Obligations") .

This  Guaranty is  unconditional  and shall not be affected by the  genuineness,
validity,  regularity or  enforceability  of the  Obligations  or any instrument
evidencing  any  Obligations,  or by the  existence,  validity,  enforceability,
perfection,  or  extent  of any  collateral  therefor,  or by  any  circumstance
relating to the Obligations  which might otherwise  constitute a defense to this
Guaranty.  This Guaranty is absolute and  unconditional and shall remain in full
force and effect and be binding upon the  Guarantor,  its successors and assigns
until all of the Obligations  have been satisfied in full. In the event that any
payment by the  Counterparty  in respect of any Obligations is rescinded or must
otherwise  be returned  for any reason  whatsoever  the  Guarantor  shall remain
liable  hereunder in respect of such Obligations as if such payment had not been
made.

The  Guarantor  agrees that the Bank may resort to the  Guarantor for payment of
any of the Obligations  whether or not the Bank has proceeded  against any other
obligor  principally or secondarily  liable for any  Obligations,  including the
Counterparty.  The Bank shall not be obligated to file any claim relating to the
Obligations,  including  any claim in the event  that the  Counterparty  becomes
subject to a bankruptcy,  reorganization or similar proceeding,  and the failure
of the Bank to file any such claim shall not affect the Guarantor's  obligations
hereunder.  The Guarantor also specifically  waives the presentment to or demand
of payment from anyone whomsoever liable upon any of the Obligations,  including
presentment,  demand,  protest  or notice  of  dishonor,  and all other  notices
whatsoever.

2. Consents.  The Guarantor agrees that the Bank may at any time extend the time
of payment of or renew any of the  Obligations,  or make any agreement  with the
Counterparty or with any other party or person liable on any of the Obligations,
for the extension,  renewal,  payment,  compromise,  discharge or release of the
Obligations (in whole or in part), or for any  modification of the terms thereof
or of any agreement between the Bank and Counterparty or any such other party or
person,  without  in any  way  impairing  or  affecting  this  Guaranty  for any
outstanding Obligations.

3.  Rights;  Expenses.  No  failure  by the  Bank to  exercise,  and no delay in
exercising,  any  right,  remedy or power  hereunder  shall  operate as a waiver
thereof,  nor shall any  single or  partial  exercise  by the Bank of any right,
remedy or power  hereunder  preclude any other or future  exercise of any right,
remedy or power.  Each and every right,  remedy and power hereby  granted to the
Bank or allowed by law or other  agreement shall be cumulative and not exclusive
of any other right,  remedy or power.  The Guarantor agrees to pay on demand all
out-of-pocket  expenses  (including the  reasonable  fees and expenses of Bank's
counsel) in any way relating to the  enforcement  or protection of Bank's rights
under this Guaranty.
                                      -1-
<PAGE>

4. Subrogation. The Guarantor shall not exercise any rights which it may have or
acquire by way of subrogation  until all of the  Obligations are paid in full to
the Bank. If any amounts are paid to the Guarantor in violation of the foregoing
limitation, then such amounts shall be held in trust for the benefit of the Bank
and shall  forthwith  be paid to the Bank to reduce  the  amount of  outstanding
Obligations,  whether  matured  or  unmatured.  Subject to the  foregoing,  upon
payment of all of the Obligations to the Bank, the Guarantor shall be subrogated
to the rights of the Bank against the Counterparty,  and the Bank agrees to take
at the Guarantor's  expense such actions as the Guarantor may reasonably require
to implement such subrogation.

5. Assignment; Termination. The Guarantor shall not assign its rights, interest,
duties or  obligations  hereunder to any other  person  without the Bank's prior
written  consent.  This Guaranty may be terminated by the Guarantor  upon thirty
(30) days' prior written notice to the Bank, and will remain in force until such
time period elapses;  provided,  however,  that the Guarantor shall remain fully
liable for, and this Guaranty shall continue to govern, all Obligations  arising
or which may arise  from  Transactions  entered  into  between  the Bank and the
Counterparty prior to the actual termination of the Guaranty.  None of the terms
or provisions of this Guaranty may be waived, amended, supplemented or otherwise
modified except by a written instrument executed by the Guarantor and the Bank.

6. Taxes.  All payments by the Guarantor  hereunder will be made in full without
set-off  or  counterclaim  and free  and  clear of and  without  withholding  or
deduction  for or on account of any  present  or future  taxes,  duties or other
charges, unless the withholding or deduction of such taxes or duties is required
by law. In any such event,  however,  the  Guarantor  shall pay such  additional
amounts as may be  necessary  in order that the net amount  received by the Bank
after such withholding or deduction shall equal the full amounts of moneys which
would  have been  received  by the Bank in the  absence of such  withholding  or
deduction.  The Guarantor will pay all stamp duties and other  documentary taxes
payable in  connection  with this  Guaranty  and will keep the Bank  indemnified
against failure to pay the same.

7. Payments.  The Guarantor hereby  guarantees that the Obligations will be paid
to the Bank without  set-off or  counterclaim,  in lawful currency of the United
States of America at the offices of the Bank as specified in the Agreement.

8. Representations.  The Guarantor is duly organized,  validly subsisting and in
good  standing  under  the  laws  of  its   jurisdiction  of   incorporation  or
organization,  and has full corporate power to execute, deliver and perform this
Guaranty.  The Guarantor has duly authorized this Guaranty, and the signatory of
this Guaranty has been duly authorized and has full power to execute and deliver
this  Guaranty  on behalf of the  Guarantor.  This  Guaranty  and the  providing
thereof  to the  Bank  does  not  violate  any of the  Guarantor's  constitutive
documents,  and this Guaranty does not violate any law,  regulation or agreement
applicable  to the Guarantor or its assets.  This Guaranty  constitutes a valid,
binding and enforceable  agreement  against the Guarantor in accordance with its
terms

9.  Governing  Law;  Jurisdiction.  This  Guaranty  shall be  governed  by,  and
construed  in  accordance  with,  the  laws of the  State of New  York,  without
reference to its conflicts of laws principles.  With respect to any suit, action
or proceeding concerning this Guaranty, the Bank and the Guarantor submit to the
non-exclusive  jurisdiction of the Federal and State courts located in the City,
County  and  State of New  York.  The Bank and the  Guarantor  specifically  and
irrevocably waives (i) any objection which it may have at any time to the laying
of venue of any suit,  action or  proceeding  brought in such  courts,  (ii) any
claim that the same has been  brought in an  inconvenient  forum,  and (iii) the
right to object that such courts do not have jurisdiction over it.
                                      -2-
<PAGE>
IN WITNESS  WHEREOF,  this  Guaranty has been duly executed and delivered by the
Guarantor to the Bank as of the date first above written.


Franchise Finance Corporation of America

By:  /s/ John Barravechia
---------------------------------------------------
Name:  John Barravechia
Title: Chief Financial Officer
                                                   ACCEPTED AND AGREED:
                                                   --------------------

                                                   NationsBank, N.A.

                                                   By:  /s/ R. Vaughan Dodd
                                                       -------------------------
                                                   Name:  R. Vaughan Dodd
                                                   Title:  Senior Vice President
<PAGE>
(Multicurrency--Cross Border)

                                     ISDA(R)

                  International Swap Dealers Association. Inc.

                                MASTER AGREEMENT


                          dated as of December 31, 1996
                                     ---------------------

NationsBank, N.A.                   and  FFCA Mortgage Corporation
------------------------------------   -----------------------------------------

have entered and/or anticipate  entering into one or more  transactions  (each a
"Transaction")  that are or will be  governed by this  Master  Agreement,  which
includes the schedule (the  "Schedule"),  and the documents and other confirming
evidence (each a "Confirmation")  exchanged between the parties confirming those
Transactions.

Accordingly, the parties agree as follows:--

1.       Interpretation
(a)      Definitions. The terms defined in Section 14  and in  the Schedule will
have the meanings therein specified for the purpose of this Master Agreement.

(b)      Inconsistency.  In  the   event  of  any  inconsistency   between   the
provisions of the Schedule and the other  provisions  of this Master  Agreement,
the  Schedule  will  prevail.  In the  event of any  inconsistency  between  the
provisions  of  any  Confirmation  and  this  Master  Agreement  (including  the
Schedule),  such  Confirmation  will  prevail  for the  purpose of the  relevant
Transaction.

(c)      Single Agreement.  All Transactions are entered into in reliance on the
fact that this Master  Agreement and all  Confirmations  form a single agreement
between the parties  (collectively  referred  to as this  "Agreement"),  and the
parties would not otherwise enter into any Transactions.

2.       Obligations

(a)      General Conditions.

         (i) Each party will make each  payment or  delivery  specified  in each
         Confirmation to be made by it, subject to the other  provisions of this
         Agreement.

         (ii)  Payments  under this  Agreement  will be made on the due date for
         value  on that  date  in the  place  of the  account  specified  in the
         relevant  Confirmation  or  otherwise  pursuant to this  Agreement,  in
         freely  transferable  funds and in the manner customary for payments in
         the required currency.  Where settlement is by delivery (that is, other
         than by  payment),  such  delivery  will be made for receipt on the due
         date  in the  manner  customary  for  the  relevant  obligation  unless
         otherwise  specified in the relevant  Confirmation or elsewhere in this
         Agreement.

         (iii) Each obligation of each party under Section 2(a)(i) is subject to
         (1) the condition precedent that no Event of Default or Potential Event
         of  Default  with  respect  to the  other  party  has  occurred  and is
         continuing,  (2) the condition precedent that no Early Termination Date
         in respect of the relevant Transaction has occurred or been effectively
         designated and (3) each other applicable  condition precedent specified
         in this Agreement.


        Copyright (C)1992 by International Swap Dealers Association, Inc.
<PAGE>
(b)      Change of Account. Either party may change its account for  receiving a
payment  or  delivery  by giving  notice to the other  party at least five Local
Business Days prior to the  scheduled  date for the payment or delivery to which
such change  applies unless such other party gives timely notice of a reasonable
objection to such change,

(c)      Netting. If on any date amounts would otherwise be payable:--

         (i)    in the same currency; and

         (ii)   in respect of the same Transaction,

by each party to the other,  then, on such date, each party's obligation to make
payment of any such amount will be  automatically  satisfied and discharged and,
if the  aggregate  amount that would  otherwise  have been  payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party,  replaced by an  obligation  upon the party by whom the larger  aggregate
amount  would  have been  payable  to pay to the other  party the  excess of the
larger aggregate amount over the smaller aggregate amount.

The parties may elect in respect of two or more  Transactions  that a net amount
will be  determined  in respect of all  amounts  payable on the same date in the
same  currency  in  respect of such  Transactions,  regardless  of whether  such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation  by specifying  that  subparagraph  (ii) above
will not apply to the Transactions  identified as being subject to the election,
together with the starting date (in which case  subparagraph (ii) above will not
or will cease to, apply to such  Transactions from such date). This election may
be  made  separately  for  different  groups  of  Transactions  and  will  apply
separately to each pairing of Offices through which the parties make and receive
payments or deliveries.

(d)      Deduction or Withholding for Tax.

         (i) Gross-Up.  All payments  under this  Agreement will be made without
         any deduction or  withholding  for or on account of any Tax unless such
         deduction or withholding is required by any applicable law, as modified
         by the practice of any relevant governmental revenue authority, then in
         effect.  If a party is so  required  to deduct or  withhold,  then that
         party ("X") will:--

         (1) promptly notify the other party ("Y") of such requirement;

         (2) pay to the  relevant  authorities  the full  amount  required to be
         deducted or withheld (including the full amount required to be deducted
         or  withheld  from  any  additional  amount  paid by X to Y under  this
         Section  2(d))  promptly  upon the  earlier  of  determining  that such
         deduction  or  withholding  is required or  receiving  notice that such
         amount has been assessed against Y;

         (3) promptly forward to Y an official receipt (or a certified copy), or
         other documentation reasonably acceptable to Y, evidencing such payment
         to such authorities; and

         (4) if such Tax is an  Indemnifiable  Tax, pay to Y, in addition to the
         payment to which Y is otherwise  entitled  under this  Agreement,  such
         additional  amount  as is  necessary  to  ensure  that  the net  amount
         actually received by Y (free and clear of Indemnifiable  Taxes, whether
         assessed  against  X or Y) will  equal  the full  amount  Y would  have
         received had no such deduction or withholding been required. However, X
         will not be  required to pay any  additional  amount to Y to the extent
         that it would not be required to be paid but for:--

                (A) the  failure by Y to comply  with or perform  any  agreement
                contained in Section 4(a)(i), 4(a)(iii) or 4(d); of

                (B)  the  failure  of a  representation  made by Y  pursuant  to
                Section 3(f) to be accurate  and true unless such failure  would
                not  have  occurred  but for (I) any  action  taken  by a taxing
                authority, or brought in a court of competent  jurisdiction,  on
                or  after  the  date on  which a  Transaction  is  entered  into
                (regardless  of whether  such  action is taken or  brought  with
                respect  to a party to this  Agreement)  or (II) a Change in Tax
                Law.
                                                                   ISDA (R) 1992
                                        2
<PAGE>
         (ii)   Liability. If:-

                (1) X is  required  by any  applicable  law,  as modified by the
                practice of any relevant governmental revenue authority, to make
                any deduction or  withholding in respect of which X would not be
                required  to  pay  an  additional  amount  to  Y  under  Section
                2(d)(i)(4);

                (2) X does not so deduct or withhold; and

                (3) a  liability  resulting  from such  Tax is assessed directly
                against X,

         then,  except  to the  extent Y has  satisfied  or then  satisfies  the
         liability  resulting from such Tax, Y will promptly pay to X the amount
         of such liability  (including any related  liability for interest,  but
         including any related  liability for penalties  only if Y has failed to
         comply  with or perform any  agreement  contained  in Section  4(a)(i),
         4(a)(iii) of 4(d)).

(e)      Default Interest; Other Amounts. Prior to the occurrence  or  effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment  obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after  judgment) on the overdue  amount to the other party on
demand in the same  currency  as such  overdue  amount, for the period from (and
including)  the  original  due date for payment to (but  excluding)  the date of
actual  payment, at the Default Rate.  Such  interest  will be calculated on the
basis of daily  compounding and the actual number of days elapsed.  If, prior to
the occurrence or effective  designation of an Early Termination Date in respect
of  the  relevant  Transaction,  a  party  defaults  in the  performance  of any
obligation  required to be settled by  delivery,  it will  compensate  the other
party on demand if and to the extent  provided for in the relevant  Confirmation
of elsewhere in this Agreement.

3.       Representations

Each party represents to the other party (which  representations  will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the  representations in Section 3(f), at all times until the
termination of this Agreement) that:--

(a)      Basic Representations.

         (i) Status. It is duly organised and validly existing under the laws of
         the jurisdiction of its organisation or incorporation  and, if relevant
         under such laws, in good standing;

         (ii) Powers.  It has the power to execute this  Agreement and any other
         documentation  relating to this  Agreement  to which it is a party,  to
         deliver this  Agreement  and any other  documentation  relating to this
         Agreement  that it is  required  by this  Agreement  to deliver  and to
         perform its obligations under this Agreement and any obligations it has
         under any Credit Support  Document to which it is a party and has taken
         all  necessary  action  to  authorise  such  execution,   delivery  and
         performance;

         (iii)  No  Violation  or  Conflict.   Such   execution,   delivery  and
         performance  do not violate or conflict with any law  applicable to it,
         any provision of its constitutional documents, any order or judgment of
         any court or other agency of government  applicable to it or any of its
         assets or any contractual restriction binding on or affecting it or any
         of its assets;

         (iv) Consents. All governmental and other consents that are required to
         have been  obtained by it with respect to this  Agreement or any Credit
         Support  Document to which it is a party have been  obtained and are in
         full force and effect and all conditions of any such consents have been
         complied with; and

         (v) Obligations  Binding.  Its obligations under this Agreement and any
         Credit  Support  Document to which it is a party  constitute its legal,
         valid and binding  obligations,  enforceable  in accordance  with their
         respective  terms  (subject to applicable  bankruptcy,  reorganisation,
         insolvency,  moratorium  or similar laws  affecting  creditors'  rights
         generally and subject, as to enforceability, to equitable principles of
         general  application  (regardless of whether enforcement is sought in a
         proceeding in equity or at law)).
                                                                   ISDA (R) 1992
                                        3
<PAGE>
(b)      Absence of Certain  Events.  No Event of Default or Potential  Event of
         Default or, to its knowledge,  Termination Event with respect to it has
         occurred  and is  continuing  and no such event or  circumstance  would
         occur as a result of its entering  into or performing  its  obligations
         under this  Agreement or any Credit  Support  Document to which it is a
         party,

(c)      Absence  of  Litigation.  There is not  pending  or, to its  knowledge,
         threatened  against it or any of its  Affiliates  any  action,  suit or
         proceeding  at  law  or  in  equity  or  before  any  court,  tribunal,
         governmental  body, agency or official or any arbitrator that is likely
         to affect the legality,  validity or enforceability  against it of this
         Agreement or any Credit Support  Document to which it is a party or its
         ability to perform its obligations  under this Agreement or such Credit
         Support Document.

(d)      Accuracy of Specified  Information.  All applicable information that is
         furnished  in writing  by or on behalf of it to the other  party and is
         identified  for the purpose of this Section 3(d) in the Schedule is, as
         of the date of the  information,  true,  accurate and complete in every
         material respect.

(e)      Payer Tax Representation. Each representation specified in the Schedule
         as being made by it for the  purpose of this  Section  3(e) is accurate
         and true.

(f)      Payee  Tax  Representations.   Each  representation  specified  in  the
         Schedule  as being made by it for the purpose of this  Section  3(f) is
         accurate and true.

4.       Agreements

Each party  agrees with the other that,  so long as either party has or may have
any  obligation  under this  Agreement or under any Credit  Support  Document to
which it is a party:--

(a)      Furnish  Specified Information. It will deliver  to the other party or,
in certain cases under  subparagraph  (iii) below,  to such government or taxing
authority as the other party reasonably directs:--

         (i) any forms, documents or certificates relating to taxation specified
         in the Schedule or any Confirmation;

         (ii) any other documents specified in the Schedule or any Confirmation;
         and

         (iii) upon reasonable  demand by such other party, any form or document
         that may be required  or  reasonably  requested  in writing in order to
         allow such other party or its Credit Support Provider to make a payment
         under this Agreement or any applicable  Credit Support Document without
         any deduction or withholding  for or on account of any Tax or with such
         deduction or withholding at a reduced rate (so long as the  completion,
         execution or submission of such form or document  would not  materially
         prejudice the legal or  commercial  position of the party in receipt of
         such  demand),  with any  such  form or  document  to be  accurate  and
         completed in a manner  reasonably  satisfactory to such other party and
         to be  executed  and  to be  delivered  with  any  reasonably  required
         certification,

in each case by the date specified in the Schedule or such  Confirmation  or, if
none is specified, as soon as reasonably practicable,

(b)      Maintain Authorisations. It will use all reasonable efforts to maintain
in full force and effect all  consents of any  governmental  or other  authority
that are  required to be obtained by it with  respect to this  Agreement  or any
Credit  Support  Document  to  which it is a party  and will use all  reasonable
efforts to obtain any that may become necessary in the future.

(c)      Comply with Laws. If will comply  in all  material  respects  with  all
applicable  laws and  orders to which it may be  subject if failure so to comply
would  materially  impair  its  ability to perform  its  obligations  under this
Agreement or any Credit Support Document to which it is a party.

(d)      Tax Agreement. It will give  notice of any failure  of a representation
made by it under  Section 3(f) to be accurate and true promptly upon learning of
such failure.

(e)      Payment of Stamp Tax. Subject to Section 11, it will pay  any Stamp Tax
levied or imposed upon it or in respect of its execution or  performance of this
Agreement by a jurisdiction in which it is incorporated,
                                                                   ISDA (R) 1992
                                        4
<PAGE>
organised  managed and controlled,  or considered to have its seat or in which a
branch or office through which it is acting for the purpose of this Agreement is
located  ("Stamp Tax  Jurisdiction")  and will indemnify the other party against
any  Stamp Tax levied or imposed upon the other party or in respect of the other
party's   execution  or  performance  of this  Agreement  by any such  Stamp Tax
Jurisdiction  which is not also a Stamp Tax  Jurisdiction  with  respect  to the
other party.

5.       Events of Default and Termination Events

(a)      Event of Default.  The  occurrence  at any time with respect to a party
or, if applicable,  any Credit  Support  Provider of such party or any Specified
Entity of such  party of any of the  following  events  constitutes  an event of
default (an 'Event of Default") with respect to such party:--

         (i) Failure to Pay or Deliver.  Failure by the party to make, when due,
         any payment under this Agreement or delivery  under Section  2(a)(i) or
         2(e)  required to be made by it if such  failure is not  remedied on or
         before the third Local  Business  Day after  notice of such  failure is
         given to the party;

         (ii)  Breach of  Agreement.  Failure  by the  party to  comply  with or
         perform any agreement or  obligation  (other than an obligation to make
         any payment under this Agreement or delivery  under Section  2(a)(i) or
         2(e) or to give  notice  of a  Termination  Event or any  agreement  or
         obligation  under  Section  4(a)(i),  4(a)(iii) or 4(d)) to be complied
         with or performed  by the party in  accordance  with this  Agreement if
         such  failure  is not  remedied  on or before the  thirtieth  day after
         notice of such failure is given to the party;

         (iii)  Credit Support Default.

                (1) Failure by the party or any Credit Support  Provider of such
                party to comply with or perform any  agreement or  obligation to
                be  complied  with or  performed  by it in  accordance  with any
                Credit Support  Document if such failure is continuing after any
                applicable grace period has elapsed;

                (2)  the  expiration  or  termination  of  such  Credit  Support
                Document  or the  failing  or  ceasing  of such  Credit  Support
                Document  to be in full force and effect for the purpose of this
                Agreement  (in either  case other  than in  accordance  with its
                terms)  prior to the  satisfaction  of all  obligations  of such
                party  under  each  Transaction  to which  such  Credit  Support
                Document relates without the written consent of the other party;
                or

                (3)  the  party  or  such  Credit  Support  Provider disaffirms,
                disclaims,  repudiates  or  rejects,  in  whole  or  in part, or
                challenges the validity of such Credit Support Document;

         (iv)  Misrepresentation.  A representation (other than a representation
         under Section 3(e) or (f)) made or repeated or deemed to have been made
         or repeated by the party or any Credit  Support  Provider of such party
         in this  Agreement or any Credit Support  Document  proves to have been
         incorrect or misleading  in any material  respect when made or repeated
         or deemed to have been made or repeated;

         (v) Default under Specified Transaction.  The party, any Credit Support
         Provider of such party or any applicable Specified Entity of such party
         (1) defaults under a Specified  Transaction and, after giving effect to
         any  applicable  notice  requirement  or grace  period,  there occurs a
         liquidation  of, an  acceleration  of  obligations  under,  or an early
         termination of, that Specified Transaction,  (2) defaults, after giving
         effect to any applicable notice  requirement or grace period, in making
         any payment or delivery  due on the last  payment, delivery or exchange
         date  of,  or  any  payment  on  early   termination  of,  a  Specified
         Transaction  (or  such  default  continues  for at  least  three  Local
         Business Days if there is no  applicable  notice  requirement  or grace
         period) or (3) disaffirms,  disclaims,  repudiates or rejects, in whole
         or in part,  a  Specified  Transaction  (or such action is taken by any
         person or entity  appointed  or  empowered  to operate it or act on its
         behalf);

         (vi) Cross Default.  If "Cross Default" is specified in the Schedule as
         applying to the party,  the  occurrence  or existence of (l) a default,
         event of default or other similar condition or event (however
                                                                   ISDA (R) 1992
                                        5
<PAGE>
         described)  in respect of such party,  any Credit  Support  Provider of
         such party of any applicable  Specified  Entity of such party under one
         or more agreements or instruments relating to Specified Indebtedness of
         any of them  (individually  or  collectively) in an aggregate amount of
         not less than the  applicable  Threshold  Amount (as  specified  in the
         Schedule) which has resulted in such Specified  Indebtedness  becoming,
         or  becoming  capable at such time of being  declared,  due and payable
         under such  agreements or  instruments,  before it would otherwise have
         been due and  payable  or (2) a  default  by such  party,  such  Credit
         Support   Provider   or  such   Specified   Entity   (individually   or
         collectively) in making one of more payments on the due date thereof in
         an aggregate  amount of not less than the applicable  Threshold  Amount
         under  such  agreements  or  instruments  (after  giving  effect to any
         applicable notice requirement or grace period);

         (vii)  Bankruptcy. The party, any Credit Support Provider of such party
         or any applicable Specified Entity of such party:--

                (1)  is  dissolved  (other  than  pursuant  to a  consolidation,
                amalgamation or merger);  (2) becomes  insolvent or is unable to
                pay its  debts or fails or  admits  in  writing  its  inability-
                generally  to pay its  debts as they  become  due;  (3)  makes a
                general  assignment,  arrangement or composition with or for the
                benefit  of its  creditors;  (4)  institutes  or has  instituted
                against it a  proceeding  seeking a judgment  of  insolvency  or
                bankruptcy   or  any  other  relief  under  any   bankruptcy  or
                insolvency law or other similar law affecting creditors' rights,
                or a petition is presented for its  winding-up  or  liquidation,
                and, in the case of any such  proceeding or petition  instituted
                or presented against it, such proceeding or petition (A) results
                in a judgment of  insolvency  or  bankruptcy  or the entry of an
                order for relief or the making of an order for its winding-up or
                liquidation  or (B)  is not  dismissed,  discharged,  stayed  or
                restrained  in each case  within 30 days of the  institution  or
                presentation  thereof;  (5)  has a  resolution  passed  for  its
                winding-up,  official  management  or  liquidation  (other  than
                pursuant to a consolidation,  amalgamation or merger); (6) seeks
                or  becomes  subject  to the  appointment  of an  administrator,
                provisional   liquidator,    conservator,   receiver,   trustee,
                custodian  or  other  similar  official  for  it or  for  all or
                substantially  all its  assets;  (7) has a  secured  party  take
                possession  of all or  substantially  all  its  assets  or has a
                distress,  execution,  attachment,  sequestration or other legal
                process   levied,   enforced  or  sued  on  or  against  all  or
                substantially  all its assets and such secured  party  maintains
                possession,  or any such  process is not  dismissed,  discharged
                stayed or  restrained,  in each case within 30 days  thereafter:
                (8) causes or is subject to any event with  respect to it which,
                under the applicable laws of any jurisdiction,  has an analogous
                effect to any of the  events  specified  in  clauses  (1) to (7)
                (inclusive);  or (9) takes  any  action  in  furtherance  of, or
                indicating its consent to, approval of, or acquiescence  in, any
                of the foregoing acts; or

         (viii)  Merger  Without  Assumption.  The party or any  Credit  Support
         Provider of such party consolidates or amalgamates with, or merges with
         or into, or transfers all or  substantially  all its assets to, another
         entity and, at the time of such consolidation,  amalgamation, merger or
         transfer.--

                (1) the  resulting,  surviving  or  transferee  entity  fails to
                assume all the  obligations of such party or such Credit Support
                Provider under this Agreement or any Credit Support  Document to
                which it or its  predecessor  was a party by operation of law or
                pursuant to an agreement  reasonably  satisfactory  to the other
                party to this Agreement; or

                (2) the benefits of any Credit  Support  Document fail to extend
                (without the consent of the other party) to the  performance  by
                such   resulting,   surviving  or   transferee   entity  of  its
                obligations under this Agreement,

(b)      Termination  Events. The occurrence at any time with respect to a party
         or, if  applicable,  any  Credit Support Provider  of such party or any
         Specified Entity of such party of any event specified below constitutes
         an  Illegality  if the event is specified in (i) below,  a Tax Event if
         the event is  specified in (ii) below or a Tax Event Upon Merger if the
         event is specified in (iii) below,  and, if specified to be applicable,
         a Credit Event
                                                                   ISDA (R) 1992
                                        6
<PAGE>
Upon Merger if the event is  specified  pursuant to (iv) below or an  Additional
Termination Event if the event is specified pursuant to (v) below:--

         (i)  Illegality.  Due  to  the  adoption  of,  or any  change  in,  any
         applicable  law after the date on which a Transaction  is entered into,
         or due to the promulgation of, or any change in, the  interpretation by
         any court, tribunal or regulatory authority with competent jurisdiction
         of any applicable law after such date, it becomes  unlawful (other than
         as a result of a breach by the party of  Section  4(b)) for such  party
         (which will be the Affected Party):--

                (1) to perform any absolute or  contingent  obligation to make a
                payment  or  delivery  or to receive a payment  or  delivery  in
                respect of such Transaction or to comply with any other material
                provision of this Agreement relating to such Transaction; or

                (2) to perform, or for any Credit Support Provider of such party
                to perform,  any contingent or other  obligation which the party
                (or such Credit  Support  Provider) has under any Credit Support
                Document relating to such Transaction;

         (ii) Tax Event. Due to (x) any action taken by a taxing  authority,  or
         brought in a court of competent  jurisdiction,  on or after the date on
         which a Transaction is entered  into,(regardless of whether such action
         is taken or brought with respect to a party to this Agreement) or (y) a
         Change in Tax Law, the party  (which will be the Affected  Party) will,
         or  there  is a  substantial  likelihood  that  it  will,  on the  next
         succeeding  Scheduled  Payment Date (1) be required to pay to the other
         party an  additional  amount in respect of an  Indemnifiable  Tax under
         Section  2(d)(i)(4)  (except in respect of interest under Section 2(e),
         6(d)(ii)  or 6(e)) or (2)  receive  a payment  from  which an amount is
         required to be deducted or withheld  for or on account of a Tax (except
         in respect of interest  under  Section  2(e),  6(d)(ii) or 6(e)) and no
         additional  amount is  required to be paid in respect of such Tax under
         Section  2(d)(i)(4)  (other than by reason of Section  2(d)(i)(4)(A) or
         (B));

         (iii) Tax Event Upon Merger.  The party (the  "Burdened  Party") on the
         next succeeding  Scheduled  Payment Date will either (1) be required to
         pay an  additional  amount in  respect  of an  Indemnifiable  Tax under
         Section  2(d)(i)(4)  (except in respect of interest under Section 2(e),
         6(d)(ii)  or 6(e)) or (2)  receive a payment  from  which an amount has
         been deducted or withheld for or on account of any Indemnifiable Tax in
         respect of which the other party is not  required to pay an  additional
         amount  (other  than by reason of  Section  2(d)(i)(4)(A)  or (B)),  in
         either case as a result of a party  consolidating or amalgamating with,
         or merging with or into, or transferring all or  substantially  all its
         assets to, another entity (which will be the Affected Party) where such
         action does not constitute an event described in Section 5(a)(viii);

         (iv)  Credit  Event  Upon  Merger.  If "Credit  Event  Upon  Merger" is
         specified in the Schedule as applying to the party,  such  party ("X"),
         any Credit Support Provider of X or any applicable  Specified Entity of
         X  consolidates  or  amalgamates  with,  or  merges  with or  into,  or
         transfers all or  substantially  all its assets to,  another entity and
         such  action  does  not  constitute  an  event   described  in  Section
         5(a)(viii)  but the  creditworthiness  of the  resulting,  surviving or
         transferee  entity is  materially  weaker  than that of X, such  Credit
         Support  Provider  or  such  Specified  Entity,  as the  case  may  be,
         immediately  prior  to  such  action  (and,  in  such  event,  X or its
         successor or transferee,  as appropriate,  will be the Affected Party);
         or

         (v) Additional Termination Event. If any "Additional Termination Event"
         is  specified  in the Schedule or any  Confirmation  as  applying,  the
         occurrence  of such event (and,  in such event,  the Affected  Party or
         Affected Parties shall be as specified for such Additional  Termination
         Event in the Schedule or such Confirmation).

(c)      Event of Default  and  Illegality.  If an event or  circumstance  which
would otherwise  constitute or give rise to an Event of Default also constitutes
an  Illegality,  it will be treated as an Illegality  and will not constitute an
Event of Default.
                                                                   ISDA (R) 1992
                                        7
<PAGE>
6.      Early Termination

(a)      Right to Terminate  Following Event of Default. If at any time an Event
of Default with respect to a party (the "Defaulting  Party") has occurred and is
then continuing,  the other  party (the "Non-defaulting Party") may, by not more
than 20 days notice to the  Defaulting  Party  specifying  the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions.  If, however,
"Automatic  Early  Termination"  is  specified  in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur  immediately  upon the  occurrence  with  respect to such party of an
Event of Default  specified in Section  5(a)(vii)(l),  (3),  (5), (6) or, to the
extent  analogous  thereto,  (8), and as of the time  immediately  preceding the
institution  of the  relevant  proceeding  or the  presentation  of the relevant
petition upon the  occurrence  with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).

(b)      Right to Terminate Following Termination Event.

         (i) Notice.  If a  Termination  Event occurs,  an Affected  Party will,
         promptly upon becoming aware of it, notify the other party,  specifying
         the nature of that Termination Event and each Affected  Transaction and
         will also give such other  information  about that Termination Event as
         the other party may reasonably require.

         (ii) Transfer to Avoid Termination Event. If either an Illegality under
         Section 5(b)(i)(l) or a Tax Event occurs and there is only one Affected
         Party,  or if a Tax Event Upon Merger occurs and the Burdened  Party is
         the  Affected  Party,  the Affected  Party will,  as a condition to its
         right to designate an Early  Termination  Date under Section  6(b)(iv),
         use all reasonable  efforts (which will not require such party to incur
         a loss, excluding  immaterial,  incidental expenses) to transfer within
         20 days after it gives notice under Section  6(b)(i) all its rights and
         obligations   under  this   Agreement   in  respect  of  the   Affected
         Transactions  to another  of its  Offices  or  Affiliates  so that such
         Termination Event ceases to exist.

         If the Affected  Party is not able to make such a transfer it will give
         notice to the other  party to that  effect  within  such 20 day period,
         whereupon  the other  party may effect  such a transfer  within 30 days
         after the notice is given under Section 6(b)(i).

         Any such  transfer  by a party  under  this  Section  6(b)(ii)  will be
         subject to and conditional  upon the prior written consent of the other
         party,  which  consent  will  not be  withheld  if such  other  party's
         policies  in  effect  at  such  time  would  permit  it to  enter  into
         transactions with the transferee on the terms proposed.

         (iii) Two Affected Parties.  If an Illegality under Section  5(b)(i)(l)
         or a Tax Event  occurs and there are two Affected  Parties,  each party
         will use all reasonable efforts to reach agreement within 30 days after
         notice  thereof is given under Section  6(b)(i) on action to avoid that
         Termination Event.

         (iv)   Right to Terminate. If:-

                (1) a transfer  under  Section  6(b)(ii) or an  agreement  under
                Section  6(b)(iii),  as the case may be,  has not been  effected
                with respect to all Affected  Transactions  within 30 days after
                an Affected Party gives notice under Section 6(b)(i); or

                (2) an Illegality under Section 5(b)(i)(2),  a Credit Event Upon
                Merger or an Additional Termination Event occurs, or a Tax Event
                Upon Merger  occurs and the  Burdened  Party is not the Affected
                Party,

         either party in the case of an  Illegality,  the Burdened  Party in the
         case of a Tax Event Upon Merger,  any  Affected  party in the case of a
         Tax Event or an Additional  Termination Event if there is more than one
         Affected  Party,  or the party which is not the  Affected  Party in the
         case of a Credit Event Upon Merger or an Additional  Termination  Event
         if there is only  one  Affected  Party  may,  by not more  than 20 days
         notice to the other party and provided  that the  relevant  Termination
         Event is then
                                                                   ISDA (R) 1992
                                        8
<PAGE>
         continuing,  designate  a day not  earlier  than the day such notice is
         effective  as an Early  Termination  Date in  respect  of all  Affected
         Transactions.

(c)      Effect of Designation.

         (i) If notice  designating  an Early  Termination  Date is given  under
         Section 6(a) or (b), the Early  Termination Date will occur on the date
         so  designated,  whether  or not  the  relevant  Event  of  Default  or
         Termination Event is then continuing.

         (ii)  Upon  the  occurrence  or  effective   designation  of  an  Early
         Termination  Date,  no further  payments or  deliveries  under  Section
         2(a)(i)  or 2(e) in  respect  of the  Terminated  Transactions  will be
         required to be made, but without  prejudice to the other  provisions of
         this  Agreement.  The  amount,  if any,  payable in respect of an Early
         Termination Date shall be determined pursuant to Section 6(e).

(d)      Calculations.

         (i) Statement.  On or as soon as reasonably  practicable  following the
         occurrence  of an Early  Termination  Date,  each  party  will make the
         calculations on its part, if any, contemplated by Section 6(e) and will
         provide to the other  party a  statement  (1)  showing,  in  reasonable
         detail,  such  calculations  (including  all  relevant  quotations  and
         specifying  any  amount  payable  under  Section  6(e)) and (2)  giving
         details of the relevant account to which any amount payable to it is to
         be paid.  In the absence of written  confirmation  from the source of a
         quotation  obtained in determining a Market  Quotation,  the records of
         the party  obtaining such quotation will be conclusive  evidence of the
         existence and accuracy of such quotation.

         (ii) Payment Date. An amount  calculated as being due in respect of any
         Early  Termination  Date under  Section 6(e) will be payable on the day
         that notice of the amount payable is effective (in the case of an Early
         Termination  Date which is designated or occurs as a result of an Event
         of Default) and on the day which is two Local  Business  Days after the
         day on which notice of the amount  payable is effective (in the case of
         an  Early  Termination  Date  which  is  designated  as a  result  of a
         Termination  Event).  Such  amount will be paid  together  with (to the
         extent permitted under applicable law) interest thereon (before as well
         as after  judgment) in the Termination  Currency,  from (and including)
         the relevant Early  Termination  Date to (but  excluding) the date such
         amount  is  paid,  at  the  Applicable  Rate.  Such  interest  will  be
         calculated on the basis of daily  compounding  and the actual number of
         days elapsed.

(e) Payments on Early  Termination.  If an Early  Termination  Date occurs,  the
following  provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the  "First  Method"  or the  "Second  Method".  If the  parties  fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The  amount,  if any,  payable  in  respect  of an  Early  Termination  Date and
determined pursuant to this Section will be subject to any Set-off.

         (i)    Events of Default. If the Early Termination Date results from an
                Event of Default--

                (1) First Method and Market  Quotation.  If the First Method and
                Market  Quotation  apply,  the Defaulting  Party will pay to the
                Non-defaulting  Party the excess,  if a positive number,  of (A)
                the   sum  of  the   Settlement   Amount   (determined   by  the
                Non-defaulting Party) in respect of the Terminated  Transactions
                and the  Termination  Currency  Equivalent of the Unpaid Amounts
                owing  to the  Non-defaulting  Party  over  (B) the  Termination
                Currency   Equivalent  of  the  Unpaid   Amounts  owing  to  the
                Defaulting Party.

                (2) First  Method and Loss.  If the First Method and Loss apply,
                the Defaulting Party will pay to the Non-defaulting  party, if a
                positive number, the  Non-defaulting  Party's Loss in respect of
                this Agreement.

                (3) Second Method and Market Quotation. If the Second Method and
                Market  Quotation  apply, an amount will be payable equal to (A)
                the sum of the Settlement Amount (determined by the
                                                                   ISDA (R) 1992
                                        9
<PAGE>
                Non-defaulting Party) in respect of the Terminated  Transactions
                and the  Termination  Currency  Equivalent of the Unpaid Amounts
                owing  to the  Non-defaulting  Party  less  (B) the  Termination
                Currency   Equivalent  of  the  Unpaid   Amounts  owing  to  the
                Defaulting  Party.  If that  amount is a  positive  number,  the
                Defaulting Party will pay it to the Non-defaulting  Party; if it
                is a  negative  number,  the  Non-defaulting  Party will pay the
                absolute value of that amount to the Defaulting Party.

                (4) Second Method and Loss. If the Second Method and Loss apply,
                an amount will be payable  equal to the  Non-defaulting  Party's
                Loss in respect of this  Agreement. If that amount is a positive
                number,  the Defaulting Party will pay it to the  Non-defaulting
                Party; if it is a negative number, the Non-defaulting Party will
                pay the absolute value of that amount to the Defaulting Party.

         (ii)   Termination Events. If the Early Termination Date results from a
                Termination Event:--

                (1) One  Affected  Party.  If there is one Affected  Party,  the
                amount  payable will be determined  in  accordance  with Section
                6(e)(i)(3),  if Market Quotation applies, or Section 6(e)(i)(4),
                if Loss applies,  except that, in either case, references to the
                Defaulting Party and to the Non-defaulting  Party will be deemed
                to be  references  to the Affected  Party and the party which is
                not the Affected Party,  respectively,  and, if Loss applies and
                fewer than all the Transactions are being terminated, Loss shall
                be calculated in respect of all Terminated Transactions.

                (2)  Two Affected Parties. If there are two Affected Parties:--

                     (A) if Market Quotation applies,  each party will determine
                     a   Settlement   Amount  in  respect   of  the   Terminated
                     Transactions,  and an amount  will be payable  equal to (I)
                     the  sum of (a)  one-half  of the  difference  between  the
                     Settlement  Amount of the party with the higher  Settlement
                     Amount  ("X") and the  Settlement  Amount of the party with
                     the lower  Settlement  Amount ("Y") and (b) the Termination
                     Currency  Equivalent of the Unpaid  Amounts owing to X less
                     (II) the  Termination  Currency  Equivalent  of the  Unpaid
                     Amounts owing to Y; and

                     (B) if Loss applies,  each party will determine its Loss in
                     respect  of this  Agreement  (or,  if  fewer  than  all the
                     Transactions  are  being  terminated,  in  respect  of  all
                     Terminated  Transactions)  and an  amount  will be  payable
                     equal to one-half of the difference between the Loss of the
                     party with the higher  Loss ("X") and the Loss of the party
                     with the lower Loss ("Y").

                If the amount payable is a positive  number, Y will pay it to X;
                if it is a negative  number,  X will pay the  absolute  value of
                that amount to Y.

         (iii)  Adjustment  for  Bankruptcy.  In  circumstances  where  an Early
         Termination Date occurs because "Automatic Early  Termination"  applies
         in respect of a party,  the amount  determined  under this Section 6(e)
         will be subject to such adjustments as are appropriate and permitted by
         law to reflect  any  payments  or  deliveries  made by one party to the
         other under this  Agreement  (and  retained by such other party) during
         the period from the  relevant  Early  Termination  Date to the date for
         payment determined under Section 6(d)(ii),

         (iv)  Pre-Estimate.  The parties agree that if Market Quotation applies
         an  amount   recoverable  under  this  Section  6(e)  is  a  reasonable
         pre-estimate of loss and not a penalty.  Such amount is payable for the
         loss of bargain and the loss of  protection  against  future  risks and
         except as otherwise  provided in this  Agreement  neither party will be
         entitled to recover any  additional  damages as a  consequence  of such
         losses.
                                                                   ISDA (R) 1992
                                       10
<PAGE>
7.       Transfer

Subject  to  Section  6(b)(ii),  neither  this  Agreement  nor any  interest  or
obligation  in or under this  Agreement  may be  transferred  (whether by way of
security or otherwise) by either party without the prior written  consent of the
other party, except that:--

(a)      a party  may make  such a  transfer  of this  Agreement  pursuant  to a
consolidation  or amalgamation  with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and

(b)      a party may make such a transfer of all or any part of its  interest in
any amount payable to it from a Defaulting Party under Section 6(e).

Any purported transfer that is not in compliance with this Section will be void.

8.       Contractual Currency

(a)      Payment in the Contractual Currency.  Each payment under this Agreement
will be made in the  relevant  currency  specified  in this  Agreement  for that
payment (the "Contractual Currency"). To the extent permitted by applicable law,
any obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual  Currency,  except to the extent such  tender  results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in  converting  the  currency  so  tendered  into the  Contractual
Currency,  of the full amount in the Contractual Currency of all amounts payable
in respect of this  Agreement.  If for any reason the amount in the  Contractual
Currency  so  received  falls  short of the amount in the  Contractual  Currency
payable in respect of this  Agreement, the party  required  to make the  payment
will, to the extent permitted by applicable law, immediately pay such additional
amount in the  Contractual  Currency as may be necessary to  compensate  for the
shortfall.  If for any reason the amount in the Contractual Currency so received
exceeds  the  amount in the  Contractual  Currency  payable  in  respect of this
Agreement,  the party  receiving the payment will refund  promptly the amount of
such excess.

(b)      Judgments.  To the extent  permitted by applicable law, if any judgment
or order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this  Agreement,  (ii) for
the payment of any amount  relating to any early  termination in respect of this
Agreement  or (iii) in respect of a judgment  or order of another  court for the
payment  of any  amount  described  in (i) or  (ii)  above,  the  party  seeking
recovery,  after recovery in full of the aggregate amount to which such party is
entitled  pursuant  to the  judgment  or  order,  will be  entitled  to  receive
immediately  from the other party the amount of any shortfall of the Contractual
Currency  received  by such  party as a  consequence  of sums paid in such other
currency  and  will  refund  promptly  to the  other  party  any  excess  of the
Contractual  Currency  received by such party as a  consequence  of sums paid in
such other  currency if such shortfall or such excess arises or results from any
variation  between  the rate of exchange  at which the  Contractual  Currency is
converted  into the  currency of the  judgment or order for the purposes of such
judgment or order and the rate of  exchange at which such party is able,  acting
in a reasonable  manner and in good faith in  converting  the currency  received
into the Contractual  Currency,  to purchase the  Contractual  Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange  payable in connection  with the purchase of or conversion  into the
Contractual Currency.

(c)      Separate Indemnities. To the extent permitted by applicable  law, these
indemnities  constitute  separate  and  independent  obligations  from the other
obligations in this  Agreement,  will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
of claim or proof  being  made for any other  sums  payable  in  respect of this
Agreement.

(d)      Evidence  of  Loss.  For  the  purpose  of this  Section  8, it will be
sufficient for a party to demonstrate  that it would have suffered a loss had an
actual exchange or purchase been made.
                                                                   ISDA (R) 1992
                                       11
<PAGE>
9.       Miscellaneous

(a)      Entire Agreement.  This Agreement  constitutes the entire agreement and
understanding  of the parties with respect to its subject  matter and supersedes
all oral communication and prior writings with respect thereto.

(b)      Amendments.  No  amendment,  modification  or waiver in respect of this
Agreement will be effective unless in writing  (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.

(c)      Survival Of Obligations.  Without  prejudice to Sections  2(a)(iii) and
6(c)(ii),  the  obligations of the parties under this Agreement will survive the
termination of any Transaction.

(d)      Remedies Cumulative.  Except as provided in this Agreement, the rights,
powers,  remedies and  privileges  provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.

(e)      Counterparts and Confirmations.

         (i) This  Agreement  (and each  amendment,  modification  and waiver in
         respect of it) may be executed and delivered in counterparts (including
         by facsimile transmission), each of which will be deemed an original.

         (ii) The parties  intend  that they are  legally  bound by the terms of
         each  Transaction  from the moment they agree to those  terms  (whether
         orally or otherwise).  A Confirmation  shall be entered into as soon as
         practicable   and  may  be  executed  and  delivered  in   counterparts
         (including by facsimile  transmission)  or be created by an exchange of
         telexes or by an  exchange  of  electronic  messages  on an  electronic
         messaging  system,  which  in  each  case  will be  sufficient  for all
         purposes  to  evidence  a binding  supplement  to this  Agreement.  The
         parties will specify therein  or through  another  effective means that
         any  such  counterpart, telex  or  electronic  message   constitutes  a
         Confirmation.

(f)      No Waiver of Rights. A failure or delay in exercising any right,  power
or privilege in respect of this  Agreement  will not be presumed to operate as a
waiver,  and a single or partial exercise of any right,  power or privilege will
not be presumed to preclude any subsequent or further  exercise,  of that right,
power or privilege or the exercise of any other right, power or privilege.

(g)      Headings.  The headings used in this  Agreement are for  convenience of
reference  only and are not to affect  the  construction  of or to be taken into
consideration in interpreting this Agreement.

10.      Offices; Multibranch Parties

(a)      If Section  10(a) is specified in the Schedule as applying,  each party
that enters  into a  Transaction  through an Office  other than its head or home
office represents to the other party that, notwithstanding  the place of booking
office or jurisdiction  of  incorporation  or  organisation  of such party,  the
obligations of such party are the same as if it had entered into the Transaction
through  its head or home  office.  This  representation  will be  deemed  to be
repeated by such party on each date on which a Transaction is entered into.

(b)      Neither party may change the Office through which it makes and receives
payments  or  deliveries  for the  purpose of a  Transaction  without  the prior
written consent of the other party.

(c)      If a party is specified as a Multibranch  Party in the  Schedule,  such
Multibranch  Party  may  make and  receive  payments  or  deliveries  under  any
Transaction  through any Office listed in the Schedule,  and the Office  through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.

11.       Expenses

A Defaulting Party will, on demand,  indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses,  including legal fees and
Stamp  Tax,  incurred  by such  other  party by  reason of the  enforcement  and
protection of its rights under this Agreement or any Credit Support Document
                                                                   ISDA (R) 1992
                                       12
<PAGE>
to which the Defaulting  Party is a party or by reason of the early  termination
of any Transaction, including. but not limited to, costs of collection.

12.      Notices

(a)      Effectiveness.  Any  notice or other  communication  in respect of this
Agreement  may be given in any manner set forth below  (except  that a notice or
other  communication  under  Section  5 or 6  may  not  be  given  by  facsimile
transmission  or  electronic  messaging  system) to the  address or number or in
accordance  with the  electronic  messaging  system  details  provided  (see the
Schedule) and will be deemed effective as indicated:--

         (i) if in writing and delivered in person or by courier, on the date it
         is delivered;

         (ii) if sent by  telex,  on the  date  the  recipient's  answerback  is
         received;

         (iii) if sent by facsimile transmission,  on the date that transmission
         is received by a responsible  employee of the recipient in legible form
         (it being  agreed  that the  burden of proving  receipt  will be on the
         sender and will not be met by a  transmission  report  generated by the
         sender's facsimile machine):

         (iv) if sent by certified or registered mail (airmail,  if overseas) or
         the equivalent  (return  receipt  requested),  on the date that mail is
         delivered or its delivery is attempted; or

         (v) if sent by electronic messaging system, on the date that electronic
         message is received,  

unless the date of that  delivery  (or  attempted  delivery)  or that receipt as
applicable,  is not a Local Business Day or that  communication is delivered (or
attempted) or received,  as  applicable,  after the close of business on a Local
Business  Day,  in which  case  that  communication  shall be  deemed  given and
effective on the first following day that is a Local Business Day.

(b)  Change of  Addresses.  Either  party may by notice to the other  change the
address,  telex or facsimile  number or electronic  messaging  system details at
which notices or other communications are to be given to it.

13.      Governing Law and Jurisdiction

(a)      Governing  Law.  This  Agreement  will be governed by and  construed in
accordance with the law specified in the Schedule.

(b)      Jurisdiction.  With respect to any suit action or proceedings  relating
to this Agreement ("Proceedings"), each party irrevocably:--

         (i)  submits  to  the  jurisdiction  of the  English  courts,  if  this
         Agreement  is  expressed  to be  governed  by  English  law,  or to the
         non-exclusive  jurisdiction  of the courts of the State of New York and
         the United States District Court located in the Borough of Manhattan in
         New York City,  if this  Agreement  is  expressed to be governed by the
         laws of the State of New York; and

         (ii) waives any  objection  which it may have at any time to the laying
         of venue of any Proceedings brought in any such court, waives any claim
         that such  Proceedings  have been brought in an inconvenient  forum and
         further waives the right to object,  with respect to such  Proceedings,
         that such court does not have any jurisdiction over such party,

Nothing in this Agreement  precludes  either party from bringing  Proceedings in
any other jurisdiction  (outside,  if this Agreement is expressed to be governed
by English law, the Contracting  States, as defined in Section 1(3) of the Civil
Jurisdiction  and  Judgments  Act  1982  or  any   modification,   extension  or
re-enactment thereof  for the time  being in  force)  nor will the  bringing  of
Proceedings  in  any  one  or  more  jurisdictions   preclude  the  bringing  of
Proceedings in any other jurisdiction.

(c)      Service of Process.  Each party irrevocably  appoints the Process Agent
(if any) specified  opposite its name in the Schedule to receive,  for it and on
its behalf, service of process in any Proceedings. If for any
                                                                   ISDA (R) 1992
                                       13
<PAGE>
reason  any  party's  Process  Agent is unable to act as such,  such  party will
promptly notify the other party and within 30 days appoint a substitute  process
agent acceptable to the other party. The parties  irrevocably consent to service
of process  given in the manner  provided for notices in Section 12.  Nothing in
this  Agreement  will affect the right of either  party to serve  process in any
other manner permitted by law.

(d)      Waiver of Immunities.  Each party  irrevocably  waives,  to the fullest
extent  permitted by applicable law, with respect to itself and its revenues and
assets  (irrespective of their use or intended use), all immunity on the grounds
of sovereignty or other similar grounds from (i) suit, (ii)  jurisdiction of any
court. (iii) relief by way of injunction,  order for specific performance or for
recovery of property,  (iv)  attachment of its assets  (whether  before or after
judgment)  and (v) execution or  enforcement  of any judgment to which it or its
revenues or assets might  otherwise be entitled in any Proceedings in the courts
of  any  jurisdiction  and  irrevocably  agrees,  to  the  extent  permitted  by
applicable law, that it will not claim any such immunity in any Proceedings.

14.      Definitions

As used in this Agreement:--

"Additional Termination Event" has the meaning specified in Section 5(b).

"Affected Party" has the meaning specified in Section 5(b).

"Affected  Transactions"  means  (a)  with  respect  to  any  Termination  Event
consisting  of  an  Illegality,   Tax  Event  or  Tax  Event  Upon  Merger,  all
Transactions  affected by the occurrence of such Termination  Event and (b) with
respect to any other Termination Event, all Transactions.

"Affiliate"  means,  subject to the  Schedule,  in relation  to any person,  any
entity  controlled,  directly  or  indirectly,  by the  person,  any entity that
controls.  directly  or  indirectly.  the  person  or  any  entity  directly  or
indirectly under common control with the person. For this purpose,  "control" of
any entity or person  means  ownership  of a majority of the voting power of the
entity or person.

"Applicable Rate" means:--

(a)      in respect of obligations  payable or deliverable  (or which would have
been but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;

(b)      in respect of an  obligation  to pay an amount  under  Section  6(e) of
either  party from and after the date  (determined  in  accordance  with Section
6(d)(ii)) on which that amount is payable, the Default Rate;

(c)      in respect of all other  obligations  payable or deliverable  (or which
would  have been but for  Section  2(a)(iii))  by a  Non-defaulting  Party,  the
Non-default Rate; and

(d)      in all other cases, the Termination Rate.

"Burdened Party" has the meaning specified in Section 5(b).

"Change in Tax Law" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation  of any  law)  that  occurs  on or after  the  date on which  the
relevant Transaction is entered into.

"consent" includes a consent approval, action, authorisation, exemption, notice,
filing. registration or exchange control consent.

"Credit Event Upon Merger" has the meaning specified in Section 5(b).

"Credit Support Document" means any agreement or instrument that is specified as
such in this Agreement.

"Credit Support Provider" has the meaning specified in the Schedule.

"Default  Rate"  means a rate per  annum  equal to the  cost  (without  proof or
evidence of any actual  cost) to the relevant  payee (as  certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
                                                                   ISDA (R) 1992
                                       14
<PAGE>
"Defaulting Party" has the meaning specified in Section 6(a).

"Early  Termination  Date" means the date  determined in accordance with Section
6(a) or 6(b)(iv).

"Event of Default" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.

"Illegality" has the meaning specified in Section 5(b).

"Indemnifiable  Tax" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation  authority  imposing such
Tax and the  recipient  of such  payment or a person  related to such  recipient
(including,  without  limitation,  a connection  arising from such  recipient or
related person being or having been a citizen or resident of such  jurisdiction,
or being or having been organised,  present or engaged in a trade or business in
such  jurisdiction,  or having or having had a permanent  establishment or fixed
place of business in such  jurisdiction,  but  excluding  a  connection  arising
solely  from such  recipient  or  related  person  having  executed,  delivered,
performed  its  obligations  or  received a payment  under,  or  enforced,  this
Agreement or a Credit Support Document).

"law" includes any treaty,  law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
"lawful" and "unlawful" will be construed accordingly.

"Local Business Day" means,  subject to the Schedule,  a day on which commercial
banks are open for business  (including dealings in foreign exchange and foreign
currency  deposits) (a) in relation to any obligation under Section 2(a)(i),  in
the place(s) specified in the relevant Confirmation or, if not so specified,  as
otherwise agreed by the parties in writing or determined  pursuant to provisions
contained, or incorporated by reference,  in this Agreement,  (b) in relation to
any other  payment,  in the place where the relevant  account is located and, if
different,  in the principal  financial  centre, if any, of the currency of such
payment (c) in relation to any notice or other  communication,  including notice
contemplated  under Section  5(a)(i),  in the city  specified in the address for
notice  provided by the recipient and, in the case of a notice  contemplated  by
Section  2(b),  in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.

"Loss"  means,  with  respect  to  this  Agreement  or  one or  more  Terminated
Transactions,  as the  case  may  be,  and a  party,  the  Termination  Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case  expressed as a negative  number)
in connection  with this  Agreement or that  Terminated  Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the  election of such party but without  duplication,  loss or
cost  incurred  as a  result  of  its  terminating,  liquidating,  obtaining  or
reestablishing any hedge or related trading position (or any gain resulting from
any of them).  Loss  includes  losses  and costs (or  gains) in  respect  of any
payment or delivery  required to have been made (assuming  satisfaction  of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made, except, so as to avoid  duplication,  if Section 6(e)(i)(l) or (3)
or  6(e)(ii)(2)(A)  applies.  Loss does not  include a  party's  legal  fees and
out-of-pocket  expenses referred to under Section I1. A party will determine its
Loss as of the relevant  Early  Termination  Date, or, if that is not reasonably
practicable,  as of the earliest date thereafter as is reasonably practicable. A
party  may (but need not)  determine  its Loss by  reference  to  quotations  of
relevant  rates or  prices  from one or more  leading  dealers  in the  relevant
markets.

"Market  Quotation" means,  with respect to one or more Terminated  Transactions
and a party  making  the  determination,  an amount  determined  on the basis of
quotations from Reference  Market-makers.  Each quotation will be for an amount,
if any, that would be paid to such party  (expressed as a negative number) or by
such party  (expressed as a positive  number) in  consideration  of an agreement
between such party  (taking into account any existing  Credit  Support  Document
with  respect  to the  obligations  of such  party)  and the  quoting  Reference
Market-maker to enter into a transaction (the  "Replacement  Transaction")  that
would have the effect of  preserving  for such party the economic  equivalent of
any payment or delivery  (whether  the  underlying  obligation  was  absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such  Terminated  Transaction
or group of  Terminated  Transactions that would, but for the  occurrence of the
relevant Early Termination Date, have
                                                                   ISDA (R) 1992
                                       15
<PAGE>
been required  after that date.  For this purpose,  Unpaid Amounts in respect of
the  Terminated  Transaction  or  group  of  Terminated  Transactions  are to be
excluded but,  without  limitation,  any payment or delivery that would, but for
the relevant Early Termination Date, have been required  (assuming  satisfaction
of each applicable  condition precedent) after that Early Termination Date is to
be included. The Replacement  Transaction would be subject to such documentation
as such party and the  Reference  Marker-maker  may, in good faith,  agree.  The
party  making the  determination  (or its agent)  will  request  each  Reference
Market-maker to provide its quotation to the extent reasonably practicable as of
the same day and time (without  regard to different time zones) on or as soon as
reasonably  practicable  after the relevant Early  Termination Date. The day and
time as of which those  quotations  are to be obtained  will be selected in good
faith by the party obliged to make a  determination  under Section 6(e), and, if
each party is so obliged,  after consultation with the other. If more than three
quotations are provided, the Market Quotation will be the arithmetic mean of the
quotations,  without  regard to the  quotations  having the  highest  and lowest
values. If exactly three such quotations are provided, the Market Quotation will
be the quotation remaining after disregarding the highest and lowest quotations.
For this  purpose,  if more than one  quotation  has the same  highest  value or
lowest value,  then one of such quotations  shall be disregarded.  If fewer than
three  quotations are provided,  it will be deemed that the Market  Quotation in
respect  of such  Terminated  Transaction  or group of  Terminated  Transactions
cannot be determined.

"Non-default  Rate" means a rate per annum equal to the cost  (without  proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.

"Non-defaulting Party" has the meaning specified in Section 6(a),

"Office" means a branch or office of a party,  which may be such party's head or
home office.

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

"Reference  Market-makers"  means four leading  dealers in the  relevant  market
selected  by the party  determining  a Market  Quotation  in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an  extension  of credit  and (b) to the  extent  practicable,  from  among such
dealers having an office in the same city.

"Relevant Jurisdiction" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organised, managed and controlled or considered
to have its  seat,  (b) where an Office  through  which the party is acting  for
purposes of this  Agreement  is located,  (c) in which the party  executes  this
Agreement and (d) in relation to any payment, from or through which such payment
is made.

"Scheduled  Payment  Date"  means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction,

"Set-off" means set-off, offset,  combination of accounts, right of retention or
withholding  or  similar  right or  requirement  to which the payer of an amount
under Section 6 is entitled or subject  (whether  arising  under this Agreement,
another contract,  applicable law or otherwise) that is exercised by, or imposed
on, such payer.

"Settlement  Amount"  means,  with respect to a party and any Early  Termination
Date, the sum of:-

(a)      the Termination  Currency  Equivalent of the Market Quotations (whether
positive or negative)  for each  Terminated  Transaction  or group of Terminated
Transactions for which a Market Quotation is determined; and

(b)      such party's Loss (whether  positive or negative and without  reference
to any Unpaid  Amounts) for each  Terminated  Transaction or group of Terminated
Transactions  for which a Market Quotation cannot be determined or would not (in
the  reasonable  belief  of  the  party  making  the  determination)  produce  a
commercially reasonable result.

"Specified Entity" has the meaning specified in the Schedule.
                                                                   ISDA (R) 1992
                                       16
<PAGE>
"Specified Indebtedness" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.

"Specified  Transaction"  means,  subject to the Schedule,  (a) any  transaction
(including an agreement with respect thereto) now existing or hereafter  entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable  Specified  Entity of such party) and the other party to
this  Agreement  (or any Credit  Support  Provider  of such  other  party or any
applicable  Specified  Entity  of  such  other  party)  which  is  a  rate  swap
transaction,  basis swap,  forward rate transaction,  commodity swap,  commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option,  foreign  exchange  transaction,  cap  transaction,  floor
transaction, collar transaction, currency swap transaction,  cross-currency rate
swap transaction,  currency option or any other similar  transaction  (including
any option with respect to any of these  transactions),  (b) any  combination of
these  transactions  and (c) any other  transaction  identified  as a  Specified
Transaction in this Agreement or the relevant confirmation.

"Stamp Tax" means any stamp, registration, documentation or similar tax.

"Tax" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest,  penalties and additions thereto) that is
imposed by any  government  or other taxing  authority in respect of any payment
under this Agreement other than a stamp, registration,  documentation or similar
tax.

"Tax Event" has the meaning specified in Section 5(b).

"Tax Event Upon Merger" has the meaning specified in Section 5(b).

"Terminated  Transactions"  means with respect to any Early Termination Date (a)
if resulting  from a Termination  Event,  all Affected  Transactions  and (b) if
resulting from an Event of Default,  all Transactions (in either case) in effect
immediately  before  the  effectiveness  of the  notice  designating  that Early
Termination  Date (or, if "Automatic  Early  Termination"  applies,  immediately
before that Early Termination Date).

"Termination Currency" has the meaning specified in the Schedule.

"Termination Currency Equivalent" means, in respect of any amount denominated in
the Termination  Currency,  such Termination  Currency amount and, in respect of
any amount  denominated in a currency other than the  Termination  Currency (the
"Other  Currency"),  the amount in the  Termination  Currency  determined by the
party  making the  relevant  determination  as being  required to purchase  such
amount of such Other Currency as at the relevant Early  Termination Date, or, if
the relevant Market  Quotation or Loss (as the case may be), is determined as of
a later date, that later date,  with the Termination  Currency at the rate equal
to the spot exchange rate of the foreign  exchange  agent  (selected as provided
below) for the purchase of such Other Currency with the Termination  Currency at
or about  11:00  a.m.  (in the  city in which  such  foreign  exchange  agent is
located) on such date as would be customary for the determination of such a rate
for the  purchase  of such  Other  Currency  for  value  on the  relevant  Early
Termination  Date or that later date.  The foreign  exchange agent will, if only
one party is obliged to make a determination  under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.

"Termination Event" means an Illegality,  a Tax Event or a Tax Event Upon Merger
or, if specified to be  applicable,  a Credit Event Upon Merger or an Additional
Termination Event

"Termination  Rate" means a rate per annum equal to the  arithmetic  mean of the
cost (without  proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.

"Unpaid Amounts" owing to any party means,  with respect to an Early Termination
Date,  the  aggregate  of (a) in respect  of all  Terminated  Transactions,  the
amounts that became  payable (or that would have become  payable but for Section
2(a)(iii))  to such  party  under  Section  2(a)(i)  on or prior  to such  Early
Termination  Date and which remain unpaid as at such Early  Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii))  required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market
                                                                   ISDA (R) 1992
                                       17
<PAGE>
value of that which was (or would have been) required to be  delivered as of the
originally  scheduled  date for  delivery,  in each case  together  with (to the
extent  permitted  under  applicable  law)  interest,  in the  currency  of such
amounts, from (and including) the date such amounts or obligations were or would
have been required to have been paid or performed to (but  excluding) such Early
Termination  Date,  at the  Applicable  Rate.  Such amounts of interest  will be
calculated  on the  basis of daily  compounding  and the  actual  number of days
elapsed. The fair market value of any obligation referred to in clause (b) above
shall be reasonably  determined  by the party obliged to make the  determination
under  Section 6(e) or, if each party is so obliged,  it shall be the average of
the  Termination  Currency  Equivalents  of the fair  market  values  reasonably
determined by both parties.

IN WITNESS  WHEREOF the parties have executed  this  document on the  respective
dates  specified  below with effect from the date specified on the first page of
this document.




NationsBank, N.A.                          FFCA Mortgage Corporation
--------------------------------           -------------------------------------
      (Name of Party)                               (Name of Party)


By: /s/ R. Vaughan Dodd                    By:  /s/ Gary J. Naquin
  ------------------------------             -----------------------------------
Name:    R. Vaughan Dodd                   Name:   Gary J. Naquin
Title:   Senior Vice President             Title:  President
Date:    12-31-96                          Date:   12-31-96

                                                                   ISDA (R) 1992
                                       18
<PAGE>
                        SCHEDULE to the MASTER AGREEMENT
                      dated as of December 31, 1996 between
                        NATIONSBANK, N.A. ("Party A") and
                      FFCA MORTGAGE CORPORATION ("Party B")



            PART 1: Termination Provisions and Certain Other Matters
                    ------------------------------------------------

(a)      "Credit  Agreement" means the Credit Agreement dated as of December 27,
1995 among  Franchise  Finance  Corporation  of America,  certain  lenders,  and
NationsBank of Texas,  N.A., as  Administrative  Lender,  as amended,  modified,
supplemented, restated or replaced from time to time.

(b)      "Specified Entity" means in relation to Party A for the purpose of:-

         Section 5(a)(v), none; Section 5(a)(vi), none; Section 5(a)(vii), none;
         and Section 5(b)(iv), none;

                  in relation to Party B for the purpose of:-

         Section 5(a)(v), none; Section 5(a)(vi), none; Section 5(a)(vii), none;
         and Section 5(b)(iv), none.

(c)      "Specified Transaction" will have the meaning specified in Section l4.

(d)      The "Cross-Default"  provisions of Section 5(a)(vi) will apply to Party
A and Party B. In connection therewith,  "Specified  Indebtedness" will have the
meaning  specified  in  Section  14,  except  that such term  shall not  include
obligations in respect of deposits  received in the ordinary course of a party's
banking  business,  and  "Threshold  Amount"  means with  respect to Party A, an
amount equal to three percent of Party A's shareholders'  equity,  determined in
accordance  with  generally  accepted  accounting  principles  in  such  party's
jurisdiction of incorporation or organization,  consistently  applied, as at the
end of such party's most  recently  completed  fiscal year and,  with respect to
Party B, $1,000,000.

With respect to Party B, an Event of Default (with Party B being the  Defaulting
Party) shall also occur under this Agreement upon the occurrence of any Event of
Default specified in the Credit Agreement.

(e)      The "Credit  Event Upon Merger"  provisions  of Section  5(b)(iv)  will
apply to Party A and to the Credit Support Provider of Party B.

(f)      The "Automatic  Early  Termination"  provision of Section 6(a) will not
apply to Party A or Party B.

(g)      Payments on Early Termination. For the purpose of Section 6(e):-

         (i)      Market Quotation will apply.
         (ii)     The Second Method will apply.

(h)      "Termination Currency" means United States Dollars.
                                        1
<PAGE>   
         (i) Additional Termination Event. Additional Termination Event will not
apply.



                           PART 2: Tax Representations
                                   -------------------

(a)      Payer Tax  Representations.  For the  purpose of  Section  3(e) of this
Agreement, Party A and Party B will make the following representation:-

         It is not required by any  applicable  law, as modified by the practice
         of  any  relevant   governmental  revenue  authority  of  any  Relevant
         Jurisdiction  to make any deduction or withholding for or on account of
         any Tax from any  payment  (other than  interest  under  Section  2(e),
         6(d)(ii) or 6(e) of this Agreement) to be made by it to the other party
         under this Agreement. In making this representation, it may rely on (x)
         the accuracy of any representations made by the other party pursuant to
         Section 3(f) of this Agreement,  (y) the  satisfaction of the agreement
         contained in Section  4(a)(i) or 4(a)(iii)  of this  Agreement  and the
         accuracy and  effectiveness of any document provided by the other party
         pursuant to Section  4(a)(i) or 4(a)(iii) of this Agreement and (z) the
         satisfaction  of the agreement of the other party  contained in Section
         4(d) of this Agreement,  provided that it shall not be a breach of this
         representation  where  reliance  is placed on clause  (y) and the other
         party does not deliver a form or document  under  Section  4(a)(iii) by
         reason of material prejudice to its legal or commercial position.

(b)      Payee Tax  Representations.  For the  purposes of Section  3(f) of this
Agreement, Party A and Party B make no representations.



                     PART 3: Agreement to Deliver Documents
                             ------------------------------

For the purpose of Section 4(a)(i) and (ii) of this Agreement, each party agrees
to deliver the following documents:

(a)      Tax forms, documents or certificates to be delivered are:  none.

(b)      Other documents to be delivered are:-
<TABLE>
<CAPTION>
                                    Form/                               Date by                    Covered by
 Party required to                Document/                           which to be                 Section 3(d)
 deliver document                Certificate                           delivered                 Representation
--------------------    ----------------------------------     ------------------------------    -------------------
<S>                     <C>                                    <C>                               <C>
Party A and             Certified copies of all                Upon execution and delivery       Yes
Party B                 corporate authorizations and any       of this Agreement
                        other documents with respect to
                        the execution, delivery and
                        performance of this Agreement
                        and any Credit Support Document

Party A and             Certificate of authority and           Upon execution and delivery       Yes
Party B                 specimen signatures of                 of this Agreement and
                        individuals executing this             thereafter upon request of
                        Agreement, any Credit Support          the other party
                        Document and Confirmations.
</TABLE>
                                       2
<PAGE>
                              PART 4: Miscellaneous
                                      -------------

(a)      Address  for  Notices.  For  the  purpose  of  Section  12(a)  of  this
Agreement:-

Address for notice or communications to Party A:

                            NationsBank, N.A.
                            100 N. Tryon St., NC1-007-13-01
                            Charlotte, North Carolina  28255
                            Attention:  Derivatives Documentation Unit
                            (Telex No:  669959; Answerback:  NATIONSBK CHA)
                            Facsimile No.:  704-386-4113

Address for notice or communications to Party B:

                            FFCA Mortgage Corporation
                            The Perimeter Center
                            17207 North Perimeter Drive
                            Scottsdale, AZ  85255
                            Attention: Gary Naquin
                            Telephone No.:  800-528-1179
                            Facsimile No.:  602-585-2225

                  with a copy to:

                            FFCA Mortgage Corporation
                            The Perimeter Center
                            17207 North Perimeter Drive
                            Scottsdale, AZ  85255
                            Attention: Dennis Ruben
                            Telephone No.:  800-528-1179
                            Facsimile No.:  602-585-2225

         As to Party B's Credit Support Provider:

                            Franchise Finance Corporation of America
                            The Perimeter Center
                            17207 North Perimeter Drive
                            Scottsdale, AZ  85255
                            Attention: John Barravecchia
                            Telephone No.:  800-528-1179
                            Facsimile No.:  602-585-2225

                  with a copy to:

                            Franchise Finance Corporation of America
                            The Perimeter Center
                            17207 North Perimeter Drive
                            Scottsdale, AZ  85255
                            Attention: Dennis Ruben
                            Telephone No.:  800-528-1179
                            Facsimile No.:  602-585-2225

(b)      Process Agent.  For the purpose of Section 13(c):

Party A appoints as its Process Agent:  Not applicable.

Party B appoints as its Process Agent:  Not applicable.
                                       3
<PAGE>
(c)      Offices.  The provisions of Section 10(a) will apply to this Agreement.

(d)      Multibranch Party. For the purpose of Section 10(c) of this Agreement:-

Party A is not a Multibranch Party.

Party B is not a Multibranch Party.

(e)      Calculation  Agent. The Calculation  Agent is Party A, unless otherwise
specified in a Confirmation in relation to the relevant Transaction.

(f)      Credit Support Document.  Details of any Credit Support Document:-

The Guaranty of Franchise  Finance  Corporation  of America dated as of the date
hereof and substantially in the form of Exhibit I hereto.

(g)      Credit Support  Provider.  Credit Support Provider means in relation to
Party A,

Not applicable.

Credit Support Provider means in relation to Party B,

Franchise Finance Corporation of America.

(h)      Governing  Law.  This  Agreement  will be governed by and  construed in
accordance  with the laws of the State of New York  (without  reference  to that
jurisdiction's choice of law doctrine).

(i)      Netting of Payments.  Subparagraph  (ii) of Section 2(c) will not apply
to any Transaction unless specified in the relevant Confirmation.

(j)      "Affiliate"  will have the  meaning  specified  in  Section  14 of this
Agreement.



                            PART 5: Other Provisions
                                    ----------------

(a)      The parties  agree to add the  following  provision to the Agreement as
Section 6(f):

         "Set-off.  Any amount (the "Early  Termination  Amount") payable to one
party  (the  Payee) by the other  party  (the  Payer)  under  Section  6(e),  in
circumstances  where there is a Defaulting  Party or one  Affected  Party in the
case where a Termination Event under Section 5(b)(iv) has occurred, will, at the
option of the party ("X") other than the Defaulting  Party or the Affected Party
(and without prior notice to the  Defaulting  Party or the Affected  Party),  be
reduced by its set-off  against any  amount(s)  (the "Other  Agreement  Amount")
payable  (whether  at such  time or in the  future or upon the  occurrence  of a
contingency) by the Payee to the Payer  (irrespective of the currency,  place of
payment  or  booking  office of the  obligations)  under any other  agreement(s)
between the Payee and the Payer or  instrument(s)  or  undertaking(s)  issued or
executed  by one  party  to or in favor  of,  the  other  party  (and the  Other
Agreement  Amount will be discharged  promptly and in all respects to the extent
it is so set-off). X will give notice to the other party of any set-off effected
under this Section 6(f).

For this purpose,  either the Early  Termination  Amount or the Other  Agreement
Amount (or the relevant  portion of such amounts) may be converted by X into the
currency in which the other is denominated at the rate of exchange at which such
party  would be able,  acting  in a  reasonable  manner  and in good  faith,  to
purchase the relevant amount of such currency.
                                       4
<PAGE>
If an obligation is unascertained,  X may in good faith estimate that obligation
and set-off in respect of the estimate, subject to the relevant party accounting
to the other when the obligation is ascertained.

Nothing  in this  Section  6(f) shall be  effective  to create a charge or other
security interest.  This Section 6(f) shall be without prejudice and in addition
to any right of set-off,  combination of accounts,  lien or other right to which
any  party is at any time  otherwise  entitled  (whether  by  operation  of law,
contract or otherwise)."

(b)      Exchange of Confirmations. For each Transaction entered into hereunder,
Party A shall  promptly send to Party B a  Confirmation,  via telex or facsimile
transmission.  Party B agrees to respond to such  Confirmation  within three (3)
Business Days, either confirming agreement thereto or requesting a correction of
any error(s) contained therein. Failure by Party B to respond within such period
shall not affect the validity or enforceability of such Transaction and shall be
deemed to be an affirmation of the terms contained in such Confirmation,  absent
manifest error. The parties agree that any such exchange of telexes or facsimile
transmissions shall constitute a Confirmation for all purposes hereunder.

(c)      Notice by Facsimile  Transmission.  Section 12(a) is hereby  amended by
inserting the words "or 13(c)"  between the number "6" and the word "may" in the
second line thereof.

(d)      Waiver of Right to Trial by Jury. Each party hereby  irrevocably waives
any and all rights to trial by jury with respect to any legal proceeding arising
out of or relating to this Agreement or any Transaction contemplated hereby.

(e)      Recording of Conversations.  Each party to this Agreement  acknowledges
and agrees to the tape or  electronic  recording  of  conversations  between the
parties to this  Agreement  whether by one or other or both of the parties,  and
that  any  such  recordings  may be  submitted  in  evidence  in any  action  or
proceeding relating to the Agreement or any Transaction.

(f)      Eligible Swap  Participant.  Each party represents to the other that it
is an  "eligible  swap  participant"  as defined  under the  regulations  of the
Commodity Futures Trading Commission, currently at 17 C.F.R. ss.35.1(b)(2).

(g)      Relationship Between Parties.  Each party represents to the other party
and will be  deemed  to  represent  to the  other  party on the date on which it
enters into a Transaction that (absent a written  agreement  between the parties
that  expressly  imposes  affirmative  obligations  to  the  contrary  for  that
Transaction):-

         (i) Non-Reliance. It is acting for its own account, and it has made its
own independent  decisions to enter into that Transaction and as to whether that
Transaction is appropriate or proper for it based upon its own judgment and upon
advice from such advisors as it has deemed  necessary.  It is not relying on any
communication  (written or oral) of the other party as investment advice or as a
recommendation  to  enter  into  that  Transaction;  it  being  understood  that
information  and  explanations   related  to  the  terms  and  conditions  of  a
Transaction  shall not be considered  investment  advice or a recommendation  to
enter into that Transaction. Further, such party has not received from the other
party any assurance or guarantee as to the expected results of that Transaction.

         (ii)  Evaluation  and  Understanding.  It is capable of evaluating  and
understanding (on its own behalf or through  independent  professional  advice),
and  understands  and  accepts,   the  terms,   conditions  and  risks  of  that
Transaction.  It is also capable of assuming,  and assumes,  the  financial  and
other risks of that Transaction.

         (iii)  Status of  Parties.  The other  party is not acting as an agent,
fiduciary or advisor for it in respect of that Transaction.
                                       5
<PAGE>
(h)      Agreement  Modification.  Section  5(a)(iv) of the  Agreement is hereby
amended by  inserting  "material"  immediately  before the first  occurrence  of
"representation" in the first line thereof.

(i)      Incorporation by Reference of Terms of Credit Agreement.  The covenants
set forth in Articles V and VI of the Credit  Agreement,  as in effect as of the
date of this  Agreement,  and the  representations  and  warranties  of  Party B
contained in Article IV of the Credit Agreement,  as in effect as of the date of
this Agreement,  are hereby incorporated by reference in, and made part of, this
Agreement to the same extent as if such covenants and  representations  were set
forth in full herein.  Party B hereby agrees that,  during the period commencing
with the date of this Agreement  through and including such date on which all of
Party B's obligations under this Agreement are fully performed, Party B will (a)
observe,  perform,  and fulfill  (subject to any grace  periods  provided in the
Credit  Agreement)  each and every such covenant  applicable to Party B, as such
covenants are in effect on the date of this Agreement and (b) deliver to Party A
at the address for notices to Party A provided in Part 4 each notice,  document,
certificate  or other  writing as Party B is  obligated  to furnish to any other
party to the  Credit  Agreement.  No  amendment  or  modification  of, or waiver
granted under,  such covenants of the Credit  Agreement  shall be effective with
respect to such  covenants  as  incorporated  into this  Agreement  without  the
written  consent of Party A. In the event the  Credit  Agreement  terminates  or
becomes no longer binding on Party B prior to the termination of this Agreement,
such covenants will remain in force and effect for purposes of this Agreement as
though  set  forth in full  herein  until  the date on  which  all of Party  B's
obligations  under this  Agreement are fully  performed,  and this  Agreement is
terminated.

(j)      Optional  Termination.  Any party hereto may terminate any  Transaction
before its stated  Termination Date on a Cash Settlement Date (as defined below)
by giving a notice in writing (a "Termination Notice"), by facsimile or by telex
to the other  party,  not less  than  five (5)  Business  Days  before  the Cash
Settlement Date. For purposes hereof, "Cash Settlement Date" shall mean December
27, 2000 and bi-annually thereafter (but excluding the stated Termination Date).
Provided that said Termination Notice has been given, then the appropriate party
shall receive a cash settlement of the relevant  Transaction,  which shall be an
amount in USD equal to the  amount  which  would  have been  payable if the Cash
Settlement  Date were an Early  Termination  Date with  respect to the  relevant
Transaction as a result of a Termination Event (the "Cash Settlement Amount").

The Calculation  Agent shall determine the Cash Settlement  Amount in good faith
in accordance  with its normal market  practices as at the close of business two
(2) Business Days prior to the Cash Settlement  Date, and shall notify the other
party of the Cash  Settlement  Amount to be either paid by it or received by it,
as the case may be, on the Cash  Settlement  Date;  provided,  however,  that if
Party B disputes  the Cash  Settlement  Amount then the Cash  Settlement  Amount
shall be  determined  by averaging  the  determinations  of the Cash  Settlement
Amount from three  Reference  Market-makers  chosen by agreement of the parties.
Once a Termination  Notice is given,  it shall be irrevocable  unless  otherwise
agreed  by the  parties.  Once the Cash  Settlement  Amount  has been  fully and
finally paid,  then all rights,  duties and obligations of the parties under and
with respect to the relevant Transaction shall terminate.

Accepted and agreed:


NATIONSBANK, N.A.                       FFCA MORTGAGE CORPORATION


/s/  R. Vaughan Dodd                    /s/  Gary J. Naquin
------------------------------          --------------------------------
Name:  R. Vaughan Dodd                  Name:  Gary J. Naquin
Title:   Senior Vice President          Title: President
                                       6
<PAGE>
                                    EXHIBIT I
                                    ---------

              GUARANTY OF FRANCHISE FINANCE CORPORATION OF AMERICA
              ----------------------------------------------------


THIS  GUARANTY,  dated  ______,  is given by Franchise  Finance  Corporation  of
America, a ____________________ (the "Guarantor") in favor of NationsBank, N.A.,
a national  banking  association  organized  under the laws of the United States
("NationsBank") .

1.  Unconditional  Guaranty.  In consideration  of and to induce  NationsBank to
enter into any Transactions, as defined in the ISDA Master Agreement between our
subsidiary FFCA Mortgage  Corporation  ("Counterparty")  and NationsBank,  dated
December 31, 1996 (the "Agreement"), the Guarantor unconditionally guarantees to
NationsBank  and its  successors  and assigns  (collectively,  the "Bank"),  the
prompt payment when due of all present and future obligations and liabilities of
all kinds (including any renewals,  extensions or modifications thereof) arising
out of any  Transactions  pursuant  to the  Agreement  between  the Bank and the
Counterparty (the "Obligations") .

This  Guaranty is  unconditional  and shall not be affected by the  genuineness,
validity,  regularity or  enforceability  of the  Obligations  or any instrument
evidencing  any  Obligations,  or by the  existence,  validity,  enforceability,
perfection,  or  extent  of any  collateral  therefor,  or by  any  circumstance
relating to the Obligations  which might otherwise  constitute a defense to this
Guaranty.  This Guaranty is absolute and  unconditional and shall remain in full
force and effect and be binding upon the  Guarantor,  its successors and assigns
until all of the Obligations  have been satisfied in full. In the event that any
payment by the  Counterparty  in respect of any Obligations is rescinded or must
otherwise  be returned  for any reason  whatsoever  the  Guarantor  shall remain
liable  hereunder in respect of such Obligations as if such payment had not been
made.

The  Guarantor  agrees that the Bank may resort to the  Guarantor for payment of
any of the Obligations  whether or not the Bank has proceeded  against any other
obligor  principally or secondarily  liable for any  Obligations,  including the
Counterparty.  The Bank shall not be obligated to file any claim relating to the
Obligations,  including  any claim in the event  that the  Counterparty  becomes
subject to a bankruptcy,  reorganization or similar proceeding,  and the failure
of the Bank to file any such claim shall not affect the Guarantor's  obligations
hereunder.  The Guarantor also specifically  waives the presentment to or demand
of payment from anyone whomsoever liable upon any of the Obligations,  including
presentment,  demand,  protest  or notice  of  dishonor,  and all other  notices
whatsoever.

2. Consents.  The Guarantor agrees that the Bank may at any time extend the time
of payment of or renew any of the  Obligations,  or make any agreement  with the
Counterparty or with any other party or person liable on any of the Obligations,
for the extension,  renewal,  payment,  compromise,  discharge or release of the
Obligations (in whole or in part), or for any  modification of the terms thereof
or of any agreement between the Bank and Counterparty or any such other party or
person,  without  in any  way  impairing  or  affecting  this  Guaranty  for any
outstanding Obligations.

3.  Rights;  Expenses.  No  failure  by the  Bank to  exercise,  and no delay in
exercising,  any  right,  remedy or power  hereunder  shall  operate as a waiver
thereof,  nor shall any  single or  partial  exercise  by the Bank of any right,
remedy or power  hereunder  preclude any other or future  exercise of any right,
remedy or power.  Each and every right,  remedy and power hereby  granted to the
Bank or allowed by law or other  agreement shall be cumulative and not exclusive
of any other right,  remedy or power.  The Guarantor agrees to pay on demand all
out-of-pocket  expenses  (including the  reasonable  fees and expenses of Bank's
counsel) in any way relating to the  enforcement  or protection of Bank's rights
under this Guaranty.
                                       7
<PAGE>
4. Subrogation. The Guarantor shall not exercise any rights which it may have or
acquire by way of subrogation  until all of the  Obligations are paid in full to
the Bank. If any amounts are paid to the Guarantor in violation of the foregoing
limitation, then such amounts shall be held in trust for the benefit of the Bank
and shall  forthwith  be paid to the Bank to reduce  the  amount of  outstanding
Obligations,  whether  matured  or  unmatured.  Subject to the  foregoing,  upon
payment of all of the Obligations to the Bank, the Guarantor shall be subrogated
to the rights of the Bank against the Counterparty,  and the Bank agrees to take
at the Guarantor's  expense such actions as the Guarantor may reasonably require
to implement such subrogation.

5. Assignment; Termination. The Guarantor shall not assign its rights, interest,
duties or  obligations  hereunder to any other  person  without the Bank's prior
written  consent.  This Guaranty may be terminated by the Guarantor  upon thirty
(30) days' prior written notice to the Bank, and will remain in force until such
time period elapses;  provided,  however,  that the Guarantor shall remain fully
liable for, and this Guaranty shall continue to govern, all Obligations  arising
or which may arise  from  Transactions  entered  into  between  the Bank and the
Counterparty prior to the actual termination of the Guaranty.  None of the terms
or provisions of this Guaranty may be waived, amended, supplemented or otherwise
modified except by a written instrument executed by the Guarantor and the Bank.

6. Taxes.  All payments by the Guarantor  hereunder will be made in full without
set-off  or  counterclaim  and free  and  clear of and  without  withholding  or
deduction  for or on account of any  present  or future  taxes,  duties or other
charges, unless the withholding or deduction of such taxes or duties is required
by law. In any such event,  however,  the  Guarantor  shall pay such  additional
amounts as may be  necessary  in order that the net amount  received by the Bank
after such withholding or deduction shall equal the full amounts of moneys which
would  have been  received  by the Bank in the  absence of such  withholding  or
deduction.  The Guarantor will pay all stamp duties and other  documentary taxes
payable in  connection  with this  Guaranty  and will keep the Bank  indemnified
against failure to pay the same.

7. Payments.  The Guarantor hereby  guarantees that the Obligations will be paid
to the Bank without  set-off or  counterclaim,  in lawful currency of the United
States of America at the offices of the Bank as specified in the Agreement.

8. Representations.  The Guarantor is duly organized,  validly subsisting and in
good  standing  under  the  laws  of  its   jurisdiction  of   incorporation  or
organization,  and has full corporate power to execute, deliver and perform this
Guaranty.  The Guarantor has duly authorized this Guaranty, and the signatory of
this Guaranty has been duly authorized and has full power to execute and deliver
this  Guaranty  on behalf of the  Guarantor.  This  Guaranty  and the  providing
thereof  to the  Bank  does  not  violate  any of the  Guarantor's  constitutive
documents,  and this Guaranty does not violate any law,  regulation or agreement
applicable  to the Guarantor or its assets.  This Guaranty  constitutes a valid,
binding and enforceable  agreement  against the Guarantor in accordance with its
terms

9.  Governing  Law;  Jurisdiction.  This  Guaranty  shall be  governed  by,  and
construed  in  accordance  with,  the  laws of the  State of New  York,  without
reference to its conflicts of laws principles.  With respect to any suit, action
or proceeding concerning this Guaranty, the Bank and the Guarantor submit to the
non-exclusive  jurisdiction of the Federal and State courts located in the City,
County  and  State of New  York.  The Bank and the  Guarantor  specifically  and
irrevocably waives (i) any objection which it may have at any time to the laying
of venue of any suit,  action or  proceeding  brought in such  courts,  (ii) any
claim that the same has been  brought in an  inconvenient  forum,  and (iii) the
right to object that such courts do not have jurisdiction over it.
                                       8
<PAGE>
IN WITNESS  WHEREOF,  this  Guaranty has been duly executed and delivered by the
Guarantor to the Bank as of the date first above written.


Franchise Finance Corporation of America

By:  /s/ Gary J. Naquin
----------------------------------------------------
Name:  Gary J. Naquin
Title: President 
                                                   ACCEPTED AND AGREED:

                                                   NationsBank, N.A.

                                                   By: /s/ R. Vaughan Dodd
                                                       -------------------------
                                                   Name:  R. Vaughan Dodd
                                                   Title:  Senior Vice President