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                                CREDIT AGREEMENT


                          Dated as of February 11, 1999

                                      AMONG

                    FRANCHISE FINANCE CORPORATION OF AMERICA,

                                 CERTAIN LENDERS

                                       and

                                NATIONSBANK, N.A.
                             as Administrative Agent



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<PAGE>
                                TABLE OF CONTENTS

                             ARTICLE I. DEFINITIONS
1.1    DEFINITIONS..........................................................   1
1.2    ACCOUNTING AND OTHER TERMS...........................................  23
                  ARTICLE II. AMOUNTS AND TERMS OF ADVANCES
2.1    ADVANCES UNDER THE LOAN..............................................  23
2.2    MAKING ADVANCES......................................................  24
2.3    EVIDENCE OF INDEBTEDNESS.............................................  26
2.4    REDUCTION OF COMMITMENT..............................................  26
2.5    PREPAYMENTS..........................................................  27
2.6    REPAYMENT............................................................  28
2.7    INTEREST.............................................................  28
2.8    DEFAULT INTEREST.....................................................  29
2.9    CONTINUATION AND CONVERSION ELECTIONS................................  29
2.10   FEES.................................................................  30
2.11   FUNDING LOSSES.......................................................  31
2.12   COMPUTATIONS AND MANNER OF PAYMENTS..................................  31
2.13   YIELD PROTECTION.....................................................  32
2.14   USE OF PROCEEDS......................................................  35
2.15   EXTENSION OPTION AND CONVERSION OPTION RELATING TO THE LOAN..........  35
2.16   COMMITMENT INCREASE..................................................  36
                        ARTICLE III. CONDITIONS PRECEDENT
3.1    CONDITIONS PRECEDENT TO THE INITIAL ADVANCE..........................  37
3.2    CONDITIONS PRECEDENT TO ALL ADVANCES.................................  39
                  ARTICLE IV.REPRESENTATIONS AND WARRANTIES
4.1    ORGANIZATION AND QUALIFICATION.......................................  40
<PAGE>

4.2    DUE AUTHORIZATION; VALIDITY..........................................  40
4.3    CONFLICTING AGREEMENTS AND OTHER MATTERS.............................  40
4.4    FINANCIAL STATEMENTS.................................................  41
4.5    LITIGATION...........................................................  41
4.6    COMPLIANCE WITH LAWS REGULATING THE INCURRENCE OF INDEBTEDNESS.......  41
4.7    AUTHORIZATIONS, TITLE TO PROPERTIES, AND RELATED MATTERS.............  42
4.8    OUTSTANDING DEBT AND LIENS...........................................  42
4.9    TAXES................................................................  42
4.10   ERISA................................................................  42
4.11   ENVIRONMENTAL LAWS...................................................  43
4.12   DISCLOSURE...........................................................  43
4.13   INVESTMENTS; SUBSIDIARIES............................................  44
4.14   CERTAIN FEES.........................................................  44
4.15   INTELLECTUAL PROPERTY................................................  44
4.16   INVESTMENT COMPANY ACT...............................................  44
4.17   RESTRICTED PAYMENTS..................................................  44
4.18   STATUS AS A REAL ESTATE INVESTMENT TRUST.............................  44
4.19   COMMON ENTERPRISE....................................................  44
4.20   SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC....................... 45
4.21   YEAR 2000 COMPLIANCE.................................................. 45
                        ARTICLE V. AFFIRMATIVE COVENANTS
5.1    COMPLIANCE WITH LAWS AND PAYMENT OF DEBT.............................. 45
5.2    INSURANCE............................................................. 46
5.3    INSPECTION RIGHTS..................................................... 46
5.4    RECORDS AND BOOKS OF ACCOUNT; CHANGES IN GAAP......................... 46
5.5    REPORTING REQUIREMENTS................................................ 46
5.6    USE OF PROCEEDS....................................................... 48
5.7    MAINTENANCE OF EXISTENCE AND ASSETS................................... 48
5.8    PAYMENT OF TAXES...................................................... 49
5.9    INDEMNITY............................................................. 49
5.10   AUTHORIZATIONS AND MATERIAL AGREEMENTS................................ 50
5.11   INTERCOMPANY NOTES.................................................... 50
5.12   FURTHER ASSURANCES.................................................... 50
5.13   SUBSIDIARIES AND OTHER OBLIGORS....................................... 50
5.14   INTEREST HEDGE AGREEMENTS............................................. 50
5.15   YEAR 2000 COMPLIANCE.................................................. 51

                                      -ii-
<PAGE>

                        ARTICLE VI. NEGATIVE COVENANTS
6.1    FINANCIAL COVENANTS................................................... 51
6.2    INDEBTEDNESS.......................................................... 51
6.3    CONTINGENT LIABILITIES................................................ 52
6.4    LIENS................................................................. 52
6.5    PROHIBITION OF FUNDAMENTAL CHANGES.................................... 52
6.6    DISPOSITIONS OF ASSETS................................................ 53
6.7    DISTRIBUTIONS AND RESTRICTED PAYMENTS................................. 53
6.8    BUSINESS.............................................................. 53
6.9    TRANSACTIONS WITH AFFILIATES.......................................... 53
6.10   LOANS AND INVESTMENTS................................................. 54
6.11   FISCAL YEAR AND ACCOUNTING METHOD..................................... 54
6.12   AMENDMENT OF CORPORATE DOCUMENTS...................................... 54
6.13   COMPLIANCE WITH ERISA................................................. 54
6.14   SUBSIDIARIES AND OTHER OBLIGORS....................................... 55
6.15   AMENDMENTS TO MATERIAL AGREEMENTS..................................... 55
6.16   PROHIBITED TRANSACTIONS............................................... 55
6.17   NO NEW SUBSIDIARIES................................................... 55
6.18   ASSET SECURITIZATION AFFILIATES....................................... 55
6.19   REPAYMENT OF ADVANCES UNDER THE AMENDED AND RESTATED
         CREDIT AGREEMENT ..................................................  55
                       ARTICLE VII. EVENTS OF DEFAULT
7.1    EVENTS OF DEFAULT....................................................  56
7.2    REMEDIES UPON DEFAULT................................................  58
7.3    CUMULATIVE RIGHTS....................................................  58
7.4    WAIVERS..............................................................  59
7.5    PERFORMANCE BY ADMINISTRATIVE AGENT OR ANY LENDER....................  59
7.6    EXPENDITURES.........................................................  59
7.7    CONTROL..............................................................  59
                       ARTICLE VIII. ADMINISTRATIVE AGENT
8.1    AUTHORIZATION AND ACTION.............................................  59
8.2    ADMINISTRATIVE AGENT'S RELIANCE, ETC.................................  60

                                      -iii-
<PAGE>
8.3    NATIONSBANK, N.A. AND AFFILIATES.....................................  60
8.4    LENDER CREDIT DECISION...............................................  61
8.5    INDEMNIFICATION BY LENDERS...........................................  61
8.6    SUCCESSOR ADMINISTRATIVE AGENT.......................................  61
                            ARTICLE IX. MISCELLANEOUS
9.1    AMENDMENTS AND WAIVERS...............................................  62
9.2    NOTICES..............................................................  62
9.3    PARTIES IN INTEREST..................................................  64
9.4    ASSIGNMENTS AND PARTICIPATIONS.......................................  65
9.5    SHARING OF PAYMENTS..................................................  65
9.6    RIGHT OF SET-OFF.....................................................  66
9.7    COSTS, EXPENSES, AND TAXES...........................................  66
9.8    RATE PROVISION.......................................................  68
9.9    CONFIDENTIALITY......................................................  69
9.10   SEVERABILITY.........................................................  70
9.11   EXCEPTIONS TO COVENANTS..............................................  70
9.12   COUNTERPARTS.........................................................  70
9.13   GOVERNING LAW; WAIVER OF JURY TRIAL..................................  70
9.14   ENTIRE AGREEMENT.....................................................  71


                                      -iv-
<PAGE>
                         TABLE OF SCHEDULES AND EXHIBITS

                                    SCHEDULES

Schedule 4.1    Organization and Qualification
Schedule 4.5    Litigation
Schedule 4.8    Debt, Contingent  Liabilities and  Liens  of  Company  and  each
                Subsidiary Entity in Existence on the Closing Date
Schedule 4.11   Environmental  Liabilities of Company and each Subsidiary on the
                Closing Date
Schedule 4.13   Investments

                                    EXHIBITS

Exhibit A       - Note (Evidencing Loan)
Exhibit B       - Guaranty Agreement
Exhibit C       - Compliance Certificate
Exhibit D       - Conversion/Continuation Notice
Exhibit E       - Borrowing Notice
Exhibit F       - Assignment and Acceptance
Exhibit G       - Subordination Agreement
Exhibit H       - Confidentiality Agreement

                                       -v-
<PAGE>
                    FRANCHISE FINANCE CORPORATION OF AMERICA

                                CREDIT AGREEMENT

     THIS CREDIT AGREEMENT (this  "AGREEMENT") is dated as of February 11, 1999,
among  FRANCHISE  FINANCE   CORPORATION  OF  AMERICA,  a  Delaware   corporation
("COMPANY"),  Lenders  from time to time party  hereto or to an  Assignment  and
Acceptance,   and  NATIONSBANK,   N.A.,  a  national  banking  association,   as
Administrative Agent (in such capacity, "ADMINISTRATIVE AGENT").

                                   BACKGROUND

     Lenders have been requested to provide Company funds to finance the ongoing
working  capital  and  general  corporate  requirements  of  Company,  including
acquisitions to the extent permitted  hereunder.  Lenders have agreed to provide
such financing, subject to the terms and conditions set forth below.

                                    AGREEMENT

     NOW, THEREFORE, for valuable consideration hereby acknowledged, the parties
hereto agree as follows:

                                   ARTICLE I.

                                   DEFINITIONS

     1.1  DEFINITIONS.  As used in this Agreement,  the following terms have the
respective  meanings  indicated below (such meanings to be applicable equally to
both the singular and plural forms of such terms):

     "ACCUMULATED  DEPRECIATION"  means,  as of any date of  determination,  the
accumulated depreciation and amortization of prepaid expenses of Company and its
Consolidated  Subsidiaries determined in accordance with GAAP as of such date of
determination.

     "ADJUSTED NET WORTH" means,  as of any date of  determination,  for Company
and its Consolidated Subsidiaries determined in accordance with GAAP, the sum of
(a) Net Worth, plus (b) Accumulated Depreciation.
<PAGE>
     "ADJUSTMENT   DATE"  means,  for  purposes  of  the  determination  of  the
Applicable Margin and the Commitment Fee, the effective date of any issuance of,
or change in, the Index Debt Rating which results in a change in the  Applicable
Margin and the Commitment Fee.

     "ADMINISTRATIVE  AGENT"  means  NationsBank,   N.A.,  in  its  capacity  as
Administrative Agent hereunder, or any successor  Administrative Agent appointed
pursuant to SECTION 8.6 hereof.

     "ADVANCE" means an advance made by a Lender to Company  pursuant to SECTION
2.1 hereof.

     "AFFILIATE" means a Person that directly, or indirectly through one or more
intermediaries,  Controls or is  Controlled  By or is Under Common  Control with
another Person.

     "AGREEMENT" means this Credit Agreement, as hereafter amended, modified, or
supplemented from time to time.

     "AMENDED AND RESTATED CREDIT  AGREEMENT"  means that certain Second Amended
and Restated  Credit  Agreement,  dated as of December 29, 1997,  among Company,
certain lenders and co-agents,  and Administrative Agent, as amended,  modified,
supplemented or restated from time to time.

     "APPLICABLE LAW" means (a) in respect of any Person, all provisions of Laws
applicable  to such  Person,  and all  orders  and  decrees  of all  courts  and
arbitrators in proceedings or actions to which the Person in question is a party
and (b) in  respect  of  contracts  made or  performed  in the  State of  Texas,
"Applicable  Law"  shall  also mean the laws of the  United  States of  America,
including, without limiting the foregoing, 12 USC Sections 85 and 86, as amended
to the date  hereof  and as the same may be amended at any time and from time to
time hereafter,  and any other statute of the United States of America now or at
any time  hereafter  prescribing  the  maximum  rates of  interest  on loans and
extensions  of credit,  and the laws of the State of Texas,  including,  without
limitation,  Art. 1H, if applicable, and if Art. 1H is not applicable,  Art. 1D,
and any  other  statute  of the  State  of Texas  now or at any  time  hereafter
prescribing  maximum  rates of  interest  on loans  and  extensions  of  credit;
provided, that the parties agree that the provisions of Chapter 346 of the Texas
Finance Code, as amended, shall not apply to the Advances,  this Agreement,  the
Notes or any other Loan Papers.

     "APPLICABLE  MARGIN" means the following per annum percentages,  applicable
in the following situations:

                            APPLICABILITY                    BASE RATE    LIBOR
                            -------------                    ---------    -----
     CATEGORY 1 - There is no Index Debt  Rating or the
     Index Debt Rating is the following: below BBB- by S&P
     or below Baa3 by Moody's                                   0.25      1.50

                                      -2-
<PAGE>
     CATEGORY 2 - The Index Debt Rating is the following:
     BBB- by S&P or Baa3 by Moody's                             0.00      1.00

     CATEGORY 3 - The Index Debt Rating is the following:
     BBB by S&P or Baa2 by Moody's                              0.00      0.95

     CATEGORY 4 - The Index Debt Rating is the following:
     BBB+ by S&P or Baa1 by Moody's                             0.00      0.90

     CATEGORY 5 - The Index Debt Rating is the following:
     A- or better by S&P or A3 or better by Moody's             0.00      0.80

The Applicable Margin payable by Company on the Advances  outstanding  hereunder
shall  be  adjusted  on  each  Adjustment  Date  according  to the  most  recent
determination  of the Index Debt  Rating;  PROVIDED,  that if (i) there exists a
Default or (ii)  Company  does not have an Index  Debt  Rating,  the  Applicable
Margin shall be (A) 0.25% per annum with  respect to Base Rate  Advances and (B)
1.50% per annum with respect to LIBOR  Advances.  For purposes of the foregoing,
if the Index  Debt  Rating  established  by S&P or Moody's  shall fall  within a
different  category,  the Applicable  Margin shall be determined by reference to
whichever  Index Debt Rating  shall fall  within the  inferior  (or  numerically
lower)  category.  If the rating  system of Moody's or S&P shall change prior to
the Maturity  Date,  Company and Lenders shall  negotiate in good faith to amend
the  references to specific  ratings in this  definition to reflect such changed
rating system.

     "ART. 1D" means Article 5069-1D, Title 79, Revised Civil Statutes of Texas,
1925, as amended.

     "ART. 1H" means Article 5069-1H, Title 79, Revised Civil Statutes of Texas,
as amended.

     "ASSET  SALE"  means any sale or other  disposition,  or series of sales or
other dispositions (including,  without limitation,  by merger or consolidation,
and whether by operation of law or otherwise), made on or after the Closing Date
by Company or any of its  Subsidiaries  to any Person (other than Company or any
of its Subsidiaries) of (a) all or substantially all of the outstanding  Capital
Stock of any of its Subsidiaries,  (b) all or substantially all of its assets or
the assets of any  division  of Company  or any of its  Subsidiaries  or (c) any
other asset or assets of Company or any of its Subsidiaries,  including the sale
of notes in connection with an Asset  Securitization (but excluding any Retained
Securities in connection  with such Asset  Securitization);  PROVIDED,  HOWEVER,
that the following shall not be considered an Asset Sale hereunder: (i) the sale
or  other  disposition  by  Company  or any of its  Subsidiaries  of worn out or
obsolete  tools,  property  or  equipment;  (ii)  the  sale of  debt  or  equity
investment  securities  in the  ordinary  course of  business;  and (iii)  sales
resulting  from the  exercise by Tenants  under  Leases with respect to Property
owned by Company and its Subsidiaries as of the Closing Date of purchase options
granted by Company and its Subsidiaries to such Tenants.

                                      -3-
<PAGE>
         "ASSET SALE PROCEEDS" means cash payments received by Company or any of
its Subsidiaries (including,  without limitation,  any cash payments received by
way of  deferred  payment  of  principal  pursuant  to a note or  receivable  or
otherwise,  but only as and when received) from any Asset Sale (after  repayment
of any Indebtedness due by reason of such Asset Sale or to effect the release of
any Lien on the property or assets  being sold),  in each case net of the amount
of (a) reasonable  brokers',  underwriters'  and advisors' fees and  commissions
payable in connection with such Asset Sale, (b) all Taxes  reasonably  estimated
to be payable as a direct  consequence  of such Asset Sale,  (c) the  reasonable
fees  and  expenses   (including,   without   limitation,   severance  payments)
attributable  to such Asset Sale,  and (d) to the extent not included in clauses
(a)  through  (c),  any amount  required  to be paid to any Person  (other  than
Company  and  any of its  Subsidiaries)  owning  a  beneficial  interest  in the
property or assets sold.  For purposes of this  definition,  Asset Sale Proceeds
shall be deemed to include,  without  limitation,  any award of compensation for
any asset or property or group thereof taken by  condemnation  or eminent domain
and  insurance  proceeds  for the loss of or damage to any asset or  property if
such award or proceeds equals or exceeds $50,000 (per  occurrence) and within 90
days after the receipt  thereof  replacement or repair of such asset or property
has not commenced, except that in the event that at any time such replacement or
repair is abandoned or is otherwise  discontinued or is not diligently  pursued,
the remaining award or proceeds, as the case may be, shall constitute Asset Sale
Proceeds at such time.

     "ASSET SECURITIZATION" means the sale, disposition,  transfer or assignment
by Company or any of its Subsidiaries to a special purpose corporation, trust or
other  entity,  of notes  evidencing  obligations  to repay secured or unsecured
loans  owned by Company or any such  Subsidiary,  which  notes are  subsequently
sold,  transferred or assigned to one or more Asset  Securitization  Affiliates,
and, as a result of such sale,  transfer or assignment,  bonds,  certificates or
other evidences of ownership  representing  interests in pools of such loans are
issued, either simultaneously or subsequently.

     "ASSET  SECURITIZATION  AFFILIATE"  means an Affiliate of Company or any of
its Subsidiaries which owns no assets (other than initial capitalization of each
Affiliate  not to exceed  $100,000)  and  transacts no business  other than as a
depositor,  conduit or grantor in an Asset  Securitization,  including,  without
limitation,  any real  estate  mortgage  investment  conduit or special  purpose
corporation,  trust or other  entity  whose  sole  purpose is to effect an Asset
Securitization   or  a  warehousing  of  loans  in   anticipation  of  an  Asset
Securitization.

     "ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered into
by a Lender and an Eligible Assignee,  and accepted by Administrative  Agent, in
the form of EXHIBIT F hereto,  as each such agreement may be amended,  modified,
extended, restated, renewed, substituted or replaced from time to time.

     "AUDITOR" means Arthur Andersen LLP, or other independent  certified public
accountants selected by Company and acceptable to Administrative Agent.

                                      -4-
<PAGE>
     "AUTHORIZATIONS" means all filings,  recordings and registrations with, and
all validations or exemptions, consents and Licenses from, any Tribunal.

     "AUTHORIZED  OFFICER" means the chief executive officer,  an executive vice
president or senior vice president of Company or any other executive  officer of
Company  authorized by Company from time to time of which  Administrative  Agent
has been notified in writing.

     "BANK  AFFILIATE"  means  the  holding  company  of  any  Lender,   or  any
wholly-owned  direct or indirect  subsidiary of such holding  company or of such
Lender.

     "BASE RATE ADVANCE" means an Advance bearing interest at the Base Rate.

     "BASE RATE" means a  fluctuating  rate per annum as shall be in effect from
time  to time  equal  to the  lesser  of (a)  the  higher  of (i) the sum of the
Applicable Margin plus the rate of interest as then in effect announced publicly
by NationsBank, N.A. in Dallas, Texas from time to time as its U.S. dollar prime
commercial lending rate (such rate may or may not be the lowest rate of interest
charged  by  NationsBank  from  time to time) or (ii) the sum of the  Applicable
Margin,  plus 0.50%,  plus the Federal  Funds Rate,  and (b) the Highest  Lawful
Rate.  The Base Rate shall be adjusted  automatically  without  notice as of the
opening of  business on the  effective  date of each change in the prime rate or
Federal Funds Rate, as applicable, to account for such change.

     "BORROWING"  means a borrowing  under the Facility of the same Type made on
the same day.

     "BORROWING NOTICE" has the meaning set forth in SECTION 2.2(A) hereof.

     "BUSINESS DAY" means a day on which  commercial  banks are open (a) for the
transaction of commercial banking business in Dallas, Texas and Phoenix, Arizona
and (b) with respect to any LIBOR Advance for the  transaction of  international
business (including dealings in Dollar deposits) in London, England.

     "CAPITAL  LEASES"  means  capital  leases  and  subleases,  as  defined  in
accordance with GAAP.

     "CAPITAL  STOCK"  means,  as to any Person,  the equity  interests  in such
Person, including, without limitation, the shares of each class of capital stock
of any Person  that is a  corporation  and each class of  partnership  interests
(including,  without limitation,  general,  limited and preference units) in any
Person that is a partnership.

     "CASH  EQUIVALENTS"  means investments  (directly or through a money market
fund) in (a)  certificates  of deposit and other  interest  bearing  deposits or
accounts  with United  States  commercial  banks  having a combined  capital and
surplus of at least  $300,000,000,  which certificates,  deposits,  and accounts
mature within one year from the date of  investment  and are fully insured as to
principal by the Federal Deposit Insurance  Corporation or any successor agency,
(b)  obligations  issued or  unconditionally  guaranteed  by the  United  States
government,  or issued by 

                                      -5-
<PAGE>
an agency  thereof and backed by the full faith and credit of the United  States
government,   which  obligations  mature  within  one  year  from  the  date  of
investment,  (c) direct obligations issued by any state or political subdivision
of the United  States,  which mature within one year from the date of investment
and have the  highest  rating  obtainable  from  S&P or  Moody's  on the date of
investment,  and (d) commercial paper which has one of the three highest ratings
obtainable from S&P or Moody's.

     "CASH FLOW FROM  OPERATIONS"  means, for any period of  determination,  for
Company and its  Consolidated  Subsidiaries on a consolidated  basis, net income
PLUS depreciation and  amortization,  all as determined in accordance with GAAP;
PROVIDED that there shall not be included in such  calculation  (a) any proceeds
of any  insurance  policy  other than  rental  guaranty  insurance  or  business
interruption  insurance  received by such Person,  (b) any gain or loss which is
classified as "extraordinary" in accordance with GAAP, (c) any capital gains and
taxes on capital gains or (d) any gains or losses from sales of Properties.

     "CHANGE  OF  CONTROL"  means (a) a  transaction  or series of  transactions
whereby  any Person or group  (within  the  meaning of Section  13(d)(3)  of the
Securities  Exchange  Act of 1934,  as  amended,  and the rules and  regulations
promulgated  thereunder  (the "1934 ACT")) shall  acquire  beneficial  ownership
(within the meaning of Rule 13d-3 of the 1934 Act),  directly or indirectly,  of
securities of Company (or other  securities  convertible  into such  securities)
representing  35% of the  combined  voting  power of all  securities  of Company
entitled to vote in the election of directors (for purposes of this  definition,
a "Controlling Person") or (b) at any time a majority of Company's directors are
persons  who  were  not (i) in  office  on the  Closing  Date or (ii)  initially
nominated  by  directors  who were in office on the Closing Date or by successor
directors elected or appointed upon the initial  nomination of such directors or
successors  directors.  In connection  with clause (a) above,  a Person or group
shall not be a  "Controlling  Person" if such Person or group holds voting power
in good  faith  and not for the  purpose  of  circumventing  the  effect  of the
occurrence of a Change of Control as an agent, bank, broker, nominee, trustee or
holder of revocable proxies given in response to a solicitation  pursuant to the
1934 Act, for one or more beneficial owners who do not individually, or, if they
are a group acting in concert,  as a group,  have the voting power  specified in
the previous sentence.

     "CLOSING DATE" means the date of this Agreement.

     "CODE" means the Internal  Revenue Code of 1986, as amended,  and the rules
and regulations issued thereunder, as from time to time in effect.

     "COMMITMENT"  means, with respect to the Loan prior to the Conversion Date,
initially  $75,000,000,  as such amount may be increased from time to time up to
an amount not in excess of  $100,000,000 in accordance with the terms of SECTION
2.16  hereof or as such  amount may be reduced  from time to time in  accordance
with the terms of SECTION 2.4 hereof,  provided  that (a) on the Option Date, if
Company and Lenders  have not agreed to an  Extension  Option or Company has not
exercised its Conversion  Option,  in each case in accordance  with the terms of
SECTION 2.15  hereof,  

                                      -6-
<PAGE>
the  Commitment  shall  mean $0.00 and (b) on or after the Final  Maturity,  the
Commitment shall mean $0.00.

     "COMMITMENT FEE" means the fee described in SECTION 2.10 hereof.

     "COMPANY"  means  Franchise  Finance  Corporation  of  America,  a Delaware
corporation.

     "COMPLIANCE  CERTIFICATE"  means a certificate of an Authorized  Officer of
Company acceptable to Administrative Agent, in the form of EXHIBIT C hereto, (a)
certifying  that such  individual  has no  knowledge  that a Default or Event of
Default has occurred and is continuing,  or if a Default or Event of Default has
occurred and is continuing,  a statement as to the nature thereof and the action
being taken or proposed to be taken with respect thereto,  and (b) setting forth
detailed calculations with respect to each of the covenants described in SECTION
6.1 hereof.

     "CONFIDENTIAL INFORMATION" has the meaning specified in SECTION 9.9 hereof.

     "CONFIDENTIALITY   AGREEMENT"   means  a   Confidentiality   Agreement   in
substantially  the form of EXHIBIT H hereto,  as such  agreement may be amended,
modified or supplemented from time to time.

     "CONSENSUAL  LIEN" means any Lien of the type  described in clauses (g) and
(h) of the definition of Permitted Liens.

     "CONSEQUENTIAL  LOSS," with respect to (a) Company's  payment of all or any
portion of the  then-outstanding  principal  amount of a LIBOR  Advance on a day
other  than the last day of the  related  Interest  Period,  including,  without
limitation,  payments made as a result of the  acceleration of the maturity of a
Note, (b) (subject to  Administrative  Agent's prior  consent),  a LIBOR Advance
made on a date other than the date on which the Advance is to be made  according
to SECTION 2.2(A) hereof or SECTION 2.9 hereof,  or (c) any of the circumstances
specified in SECTION 2.4 hereof and SECTION 2.5 hereof on which a  Consequential
Loss may be incurred,  means any loss, cost or expense incurred by any Lender as
a  result  of  the  timing  of  the  payment  or  Advance  or  in   liquidating,
redepositing,  redeploying  or  reinvesting  the  principal  amount  so  paid or
affected by the timing of the Advance or the circumstances  described in SECTION
2.4 hereof and  SECTION  2.5 hereof,  which  amount  shall be the sum of (i) the
interest that, but for the payment or timing of Advance,  such Lender would have
earned in respect of that principal amount,  reduced,  if such Lender is able to
redeposit, redeploy, or reinvest the principal amount, by the interest earned by
such  Lender  as a  result  of  redepositing,  redeploying  or  reinvesting  the
principal  amount  plus (ii) any  expense or penalty  incurred by such Lender by
reason of  liquidating,  redepositing,  redeploying or reinvesting the principal
amount.  Each  determination by each Lender of any Consequential Loss is, in the
absence of demonstrable error, conclusive and binding.

                                      -7-
<PAGE>
     "CONSOLIDATED  SUBSIDIARY" means, as to any Person, each Subsidiary of such
Person  (whether then existing or thereafter  created or acquired) the financial
statements  of which are (or should have been)  consolidated  with the financial
statements of such Person in accordance with GAAP.

     "CONTINGENT LIABILITY" means, as to any Person, any obligation,  contingent
or  otherwise,  of such Person  guaranteeing  or having the  economic  effect of
guaranteeing  any  Indebtedness or obligation of any other Person in any manner,
whether directly or indirectly,  including without  limitation any obligation of
such Person,  direct or  indirect,  (a) to purchase or pay (or advance or supply
funds for the  purchase or payment of) such  Indebtedness  or to purchase (or to
advance or supply  funds for the  purchase  of) any  security for the payment of
such  Indebtedness,  (b) to purchase  Property  or  services  for the purpose of
assuring the owner of such  Indebtedness of its payment,  or (c) to maintain the
solvency,  working  capital,  equity,  cash flow, fixed charge or other coverage
ratio, or any other  financial  condition of the primary obligor so as to enable
the primary  obligor to pay any  Indebtedness  or to comply  with any  agreement
relating to any Indebtedness or obligation, and shall, in any event, include any
contingent obligation under any letter of credit,  application for any letter of
credit or other related documentation.

     "CONTINUE,"  "CONTINUATION"  and "CONTINUED" each refer to the continuation
pursuant to SECTION 2.9 hereof of a LIBOR  Advance from one  Interest  Period to
the next Interest Period.

     "CONTROL" or  "CONTROLLED  BY" or "UNDER COMMON  CONTROL" mean  possession,
direct or indirect,  of power to direct or cause the  direction of management or
policies  (whether  through  ownership  of voting  securities,  by  contract  or
otherwise);  provided  that,  in any event (a) it shall include any director (or
Person holding the equivalent  position) or executive officer (or Person holding
the equivalent  position) of such Person or of any Affiliate of such Person, (b)
any  Person  which  beneficially  owns 5% or more (in  number  of  votes) of the
securities  having  ordinary  voting  power for the  election of  directors of a
corporation shall be conclusively presumed to control such corporation,  (c) any
general  partner of any partnership  shall be  conclusively  presumed to control
such  partnership,  (d) any other Person who is a member of the immediate family
(including parents,  spouse,  siblings and children) of any general partner of a
partnership, and any trust whose principal beneficiary is such individual or one
or more members of such immediate family and any Person who is controlled by any
such  member or  trust,  or is the  executor,  administrator  or other  personal
representative  of such Person,  shall be conclusively  presumed to control such
Person,  and (e) no Person shall be deemed to be an  Affiliate of a  corporation
solely by reason of his being an officer or director of such corporation.

     "CONTROLLED  GROUP"  means,  as to any Person,  all members of a controlled
group of corporations and all trades or businesses (whether or not incorporated)
which are under common  control with such Person and which,  together  with such
Person,  are treated as a single employer under Section 414(b),  (c), (m) or (o)
of the Code.

     "CONVERSION  OR  CONTINUANCE  NOTICE"  has the meaning set forth in SECTION
2.9(B) hereof.

                                      -8-
<PAGE>
     "CONVERSION  DATE"  means the date  upon  which  the Loan  converts  from a
revolving loan to a term loan, in accordance  with the terms of SECTION  2.15(B)
hereof.

     "CONVERSION  OPTION"  means that option to be  exercised  by Company on the
Option  Date or the Final  Maturity  in  accordance  with the  terms of  SECTION
2.15(B) hereof to convert the Loan to a term loan.

     "DEBT FOR BORROWED  MONEY" means,  as to any Person,  at any date,  without
duplication,  (a) all  obligations  of such Person for borrowed  money,  (b) all
obligations of such Person  evidenced by bonds,  debentures,  notes,  letters of
credit (or applications for letters of credit) or other similar instruments, (c)
all obligations of such Person to pay the deferred purchase price of property or
services,  except  trade  accounts  payable  arising in the  ordinary  course of
business,  (d) all obligations of such Person secured by a Lien on any assets or
property of any Person and (e) Intercompany Notes.

     "DEBTOR   RELIEF  LAWS"  means   applicable   bankruptcy,   reorganization,
insolvency, receivership, liquidation, arrangement, conservatorship, moratorium,
or similar Laws, or principles of equity affecting the enforcement of creditors'
rights generally.

     "DEFAULT" means any event  specified in SECTION 7.1 hereof,  whether or not
any requirement in connection with such event for the giving of notice, lapse of
time, or happening of any further condition has been satisfied.

     "DISTRIBUTION"  means, as to any Person,  (a) any declaration or payment of
any  distribution or dividend (other than a stock dividend) on, or the making of
any pro rata distribution,  loan, advance, or investment to or in any holder (in
its  capacity  as a  partner,  shareholder  or  other  equity  holder)  of,  any
partnership interest or shares of Capital Stock or other equity interest of such
Person, or (b) any purchase,  redemption, or other acquisition or retirement for
value of any shares of  partnership  interest or Capital  Stock or other  equity
interest of such Person.

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

     "ELIGIBLE  ASSIGNEE" means (a) a Lender, (ii) an Affiliate of a Lender, and
(iii) any other  Person  approved by both  Administrative  Agent and,  unless an
Event of Default has occurred and is  continuing  at the time any  assignment is
effected in accordance with SECTION 9.4(A) hereof, Company, such approval not to
be unreasonably  withheld or delayed by Company or Administrative Agent and such
approval to be deemed  given by Company if no objection is received by assigning
Lender and  Administrative  Agent from Company  within two  Business  Days after
notice of such  proposed  assignment  has been  provided by assigning  Lender to
Company; PROVIDED, HOWEVER, that neither Company nor any of its Affiliates shall
qualify as an Eligible Assignee.

     "ENVIRONMENTAL  CLAIM" means any written  notice by any  Tribunal  alleging
potential  liability for damage to the  environment,  or by any Person  alleging
potential liability for personal injury 

                                      -9-
<PAGE>
(including  sickness,  disease or death),  resulting  from or based upon (a) the
presence   or  release   (including   sudden  or   non-sudden,   accidental   or
non-accidental,  leaks or  spills)  of any  Hazardous  Material  at,  in or from
property,  whether or not owned by Company  or any of its  Subsidiaries,  or (b)
circumstances forming the basis of any violation,  or alleged violation,  of any
Environmental Law.

     "ENVIRONMENTAL  LAWS"  means  the  Comprehensive   Environmental  Response,
Compensation,  and Liability  Act (42 U.S.C.  ss.9601 Et SEQ.)  ("CERCLA"),  the
Hazardous Material  Transportation Act (49 U.S.C. ss.1801 ET Seq.), the Resource
Conservation  and Recovery  Act (42 U.S.C  ss.6901 ET Seq.),  the Federal  Water
Pollution Control Act (33 U.S.C.  ss.1251 ET seq.), the Clean Air Act (42 U.S.C.
ss.7401 et SEQ.), the Toxic Substances Control Act (15 U.S.C.  ss.2601 ET Seq.),
and the Occupational  Safety and Health Act (29 U.S.C. ss.651 et SEQ.) ("OSHA"),
as such laws have been or hereafter may be amended or supplemented,  and any and
all similar present or future federal, state and local Laws.

     "ERISA"  means the Employee  Retirement  Income  Security  Act of 1974,  as
amended, and the rulings and regulations issued thereunder, as from time to time
in effect.

     "ERISA  AFFILIATE"  means any Person that for purposes of Title IV of ERISA
is a member of the controlled group of Company or any of its Subsidiaries, or is
under common control with Company or any of its Subsidiaries, within the meaning
of Section 414(c) of the Code.

     "ERISA EVENT" means (a) a Reportable  Event,  within the meaning of Section
4043 of ERISA,  unless the 30-day notice  requirement  with respect  thereto has
been waived by the PBGC, (b) the issuance by the  administrator of any Plan of a
notice of intent to  terminate  such Plan in a distress  situation,  pursuant to
Section  4041(a)(2) and 4041(c) of ERISA (including any such notice with respect
to a plan amendment  referred to in Section 4041(e) of ERISA), (c) the cessation
of operations at a facility in the circumstances described in Section 4062(e) of
ERISA,  (d) the withdrawal by Company,  any  Subsidiary of Company,  or an ERISA
Affiliate  from a Multiple  Employer  Plan during a Plan year for which it was a
substantial employer, as defined in Section 4001(a)(2) of ERISA, (e) the failure
by Company,  any Subsidiary of Company, or any ERISA Affiliate to make a payment
to a Plan required under Section 302 of ERISA,  (f) the adoption of an amendment
to a Plan requiring the provision of security to such Plan,  pursuant to Section
307 of ERISA,  or (g) the  institution by the PBGC of proceedings to terminate a
Plan,  pursuant  to Section  4042 of ERISA,  or the  occurrence  of any event or
condition  that  constitutes  grounds  under  Section  4042  of  ERISA  for  the
termination of, or the appointment of a trustee to administer, a Plan.

                                      -10-
<PAGE>
     "EVENT OF DEFAULT" means any of the events specified in SECTION 7.1 hereof,
provided  there has been satisfied any  requirement in connection  therewith for
the giving of notice, lapse of time, or happening of any further condition.

     "EXTENSION  OPTION" means that option to be exercised by Company and agreed
to by Lenders in accordance  with the terms of SECTION  2.15(A) hereof to extend
the Loan for an additional 364 day period beyond the Option Date.

     "FACILITY"  means the Loan  evidenced by this  Agreement and the other Loan
Papers.

     "FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight  federal  funds  transactions  with members of the Federal  Reserve
System arranged by federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next  preceding  Business Day) by the Federal
Reserve Bank of Dallas,  or, if such rate is not so published  for any day which
is a  Business  Day,  the  average  of the  quotations  for  such  date  on such
transactions  received by Administrative  Agent from three federal funds brokers
of recognized standing selected by it.

     "FINAL  MATURITY"  means, in the event that Company and Lenders have agreed
to an Extension Option or Company has exercised its Conversion Option, that date
which is 364 days after the Option  Date,  but in no event later than the stated
maturity date of the Amended and Restated Credit Agreement.

     "FIXED CHARGE COVERAGE RATIO" means, as of any date of  determination,  for
Company and its  Consolidated  Subsidiaries  determined in accordance with GAAP,
the  ratio  of (a) the sum of (i)  Cash  Flow  From  Operations  for the  twelve
calendar  month period  ending on or most  recently  ended prior to such date of
determination  PLUS (ii) cash interest  payable on all  Indebtedness  (including
interest  in  respect  of  Capital  Leases)  of  Company  and  its  Consolidated
Subsidiaries  during such period to (b) the sum of (i) cash interest  payable on
all  Indebtedness  (including  interest  in  respect of  Capitalized  Leases) of
Company and its Consolidated Subsidiaries during such period PLUS (ii) regularly
scheduled  principal amounts of all Indebtedness of Company and its Consolidated
Subsidiaries  (including  the principal  portion of rentals  payable under Lease
Obligations)  payable  during such period,  excluding,  however,  any  regularly
scheduled  principal  payment on  Indebtedness  of Company and its  Consolidated
Subsidiaries  which pays such  Indebtedness in full, but only to the extent that
the amount of such final payment is greater than the scheduled principal payment
immediately  preceding such final payment,  plus (iii) without duplication,  the
principal amounts of all Indebtedness of Company and its Subsidiaries (including
the principal portion of rentals payable under Lease Obligations) required to be
prepaid or purchased during such period.

     "FUNDED  MORTGAGES"  means  promissory notes secured by duly recorded first
priority mortgages,  deeds of trust,  assignments of rents, security agreements,
fixture  filings and similar  instruments  executed by a purchaser or owner of a
Property in favor of Company or any  Subsidiary of Company,  or a trustee acting
for the benefit of Company or any Subsidiary of Company,  relating to loans made
by Company or any Subsidiary of Company to unaffiliated third parties secured by
such Property, the principal amount of which was or will be funded from proceeds
of Advances or Intercompany Loans.

                                      -11-
<PAGE>
     "GAAP"  means  generally  accepted  accounting   principles  applied  on  a
consistent  basis.  Application  on a  consistent  basis  shall  mean  that  the
accounting  principles  observed  in a  current  period  are  comparable  in all
material  respects  to those  applied  in a  preceding  period,  except  for new
developments  or statements  promulgated by the Financial  Accounting  Standards
Board.

     "GUARANTY"  of a Person means any  agreement by which such Person  assumes,
guarantees,  endorses,  contingently agrees to purchase or provide funds for the
payment of, or  otherwise  becomes  liable  upon,  the  obligation  of any other
Person,  or  agrees  to  maintain  the net  worth or  working  capital  or other
financial  condition of any other Person,  or otherwise  assures any creditor or
such other Person against loss,  including,  without  limitation,  any agreement
which assures any creditor or such other Person  payment or  performance  of any
obligation,  or any take-or-pay  contract and shall include without  limitation,
the contingent liability of such Person in connection with any application for a
letter  of  credit  (without  duplication  of any  amount  already  included  in
Indebtedness).

     "GUARANTY  AGREEMENT"  means a Guaranty  Agreement,  duly  executed by each
Guarantor,  in  substantially  the  form  of  EXHIBIT  B  hereto,  appropriately
completed,  as such  agreement  may be  amended,  modified,  extended,  renewed,
restated, substituted or replaced from time to time.

     "GUARANTORS"  means each  Subsidiary  of Company and each other Person from
time to time guaranteeing payment of the Obligations to Administrative Agent and
Lenders.

     "HAZARDOUS MATERIALS" means all materials subject to any Environmental Law,
including,  without  limitation,  materials  listed  in 49 C.F.R.  ss.  172.101,
Hazardous  Substances,  explosive or radioactive  materials,  hazardous or toxic
wastes or substances, petroleum or petroleum distillates,  asbestos, or material
containing asbestos.

     "HAZARDOUS  SUBSTANCES" means hazardous waste as defined in the Clean Water
Act,  33 U.S.C.  ss.  1251 ET Seq.,  the  Comprehensive  Environmental  Response
Compensation  and  Liability  Act as amended  by the  Superfund  Amendments  and
Reauthorization  Act, 42 U.S.C.  ss.  9601 ET Seq.,  the  Resource  Conservation
Recovery Act, 42 U.S.C. ss. 6901 ET seq., and the Toxic Substances  Control Act,
15 U.S.C. ss. 2601 ET Seq.

     "HIGHEST  LAWFUL RATE" means at the particular time in question the maximum
rate of interest  which,  under  Applicable  Law,  Lenders are then permitted to
charge  on the  Obligations.  If the  maximum  rate  of  interest  which,  under
Applicable Law, Lenders are permitted to charge on the Obligations  shall change
after the date hereof, the Highest Lawful Rate shall be automatically  increased
or decreased,  as the case may be, from time to time as of the effective time of
each change in the Highest Lawful Rate without  notice to Company.  For purposes
of determining  the Highest Lawful Rate under the Applicable Law of the State of
Texas,  the  applicable  rate  ceiling  shall  be (a) the  weekly  rate  ceiling
described in and computed in accordance with the provisions of Art.  ID.003,  or
(b) if the parties  subsequently  contract  as allowed by  Applicable  Law,  the
quarterly  ceiling or the annualized  ceiling computed  pursuant to Art. ID.008;
provided,  however,  that at any time the weekly  rate  ceiling,  the  quarterly
ceiling or the annualized  ceiling shall be less than 18% 

                                      -12-
<PAGE>
per annum or more than 24% per annum,  the provisions of Art.  ID.009(a) and (b)
shall control for purposes of such determination, as applicable.

     "INCREASED  ADVANCE  COSTS" has the meaning  specified  in SECTION  2.13(E)
hereof.

     "INCREASED  ADVANCE  COSTS  RETROACTIVE  EFFECTIVE  DATE"  has the  meaning
specified in SECTION 2.13(E) hereof.

     "INCREASED  ADVANCE  COSTS SET DATE" has the meaning  specified  in SECTION
2.13(E) hereof.

     "INDEBTEDNESS" means, without duplication,  with respect to any Person, all
obligations of such Person,  determined on a consolidated  basis and measured in
accordance  with GAAP that is required to be  classified on the balance sheet as
liabilities,  and in any event shall include (without  duplication) (a) Debt for
Borrowed Money, (b) Capital Lease  obligations,  (c)  reimbursement  obligations
relating to letters of credit, (d) Contingent Liabilities relating to any of the
foregoing, (e) Withdrawal Liability,  (f) indebtedness,  if any, associated with
Interest Hedge Agreements with other Persons,  (g) payments due for the deferred
purchase price of property and services (but  excluding  trade payables that are
less than 90 days old and (h) obligations (contingent or otherwise) to purchase,
retire or redeem any Capital Stock of such Person.

     "INDEMNITEES" has the meaning ascribed thereto in SECTION 5.9 hereof.

     "INDEX  DEBT  RATING"  means the rating  applicable  to  Company's  senior,
unsecured, non-credit enhanced long term indebtedness for borrowed money.

     "INITIAL  ADVANCE"  means the initial  Advance made in accordance  with the
terms  hereof,  which  shall only be after  Company  has  satisfied  each of the
conditions  set  forth  in  SECTION  3.1 and  SECTION  3.2  hereof  (or any such
condition shall have been waived by each Lender).

     "INSUFFICIENCY" means, with respect to any Plan, the amount, if any, of its
unfunded benefit liabilities within the meaning of Section 4001(a)(18) of ERISA.

     "INTERCOMPANY LOANS" means all loans made by Company to its Subsidiaries.

     "INTERCOMPANY  NOTES" means all promissory  notes payable to Company by any
Subsidiary of Company evidencing the obligation to repay Intercompany  Loans, as
such notes may be amended, modified,  extended, renewed, substituted or replaced
from time to time.

     "INTEREST  HEDGE  AGREEMENTS"  means any  interest  rate  swap  agreements,
interest  cap  agreements,  interest  rate  collar  agreements,  or any  similar
agreements or arrangements  designed to hedge the risk of variable interest rate
volatility,  or foreign currency hedge, exchange or similar agreements, on terms
and  conditions  reasonably  acceptable to  Administrative  Agent  (evidenced by

                                      -13-
<PAGE>
Administrative  Agent's consent in writing),  as such agreements or arrangements
may be modified, supplemented, and in effect from time to time.

     "INTEREST PERIOD" means the period beginning on the date an Advance is made
or continued as or converted  into a LIBOR Advance and ending one, two, three or
six  months  thereafter  (as  Company,  in its sole  discretion,  shall  select)
PROVIDED, HOWEVER, that:

         (a)  Company  may not select any  Interest  Period  that ends after any
     principal repayment date unless, after giving effect to such selection, the
     aggregate  principal  amount of LIBOR Advances having Interest Periods that
     end on or prior to such principal  repayment date,  shall be at least equal
     to the  principal  amount of Advances  due and payable on and prior to such
     date;

         (b) whenever the last day of any Interest  Period would otherwise occur
     on a day other than a Business  Day, the last day of such  Interest  Period
     shall be extended to occur on the next succeeding  Business Day,  PROVIDED,
     HOWEVER,  that if such extension  would cause the last day of such Interest
     Period to occur in the next following  calendar month, the last day of such
     Interest Period shall occur on the next preceding Business Day; and

         (c) whenever the first day of any Interest Period occurs on a day of an
     initial calendar month for which there is no numerically  corresponding day
     in the calendar  month that  succeeds  such initial  calendar  month by the
     number of months  equal to the  number of months in such  Interest  Period,
     such Interest  Period shall end on the last Business Day of such succeeding
     calendar month.

     "INVESTMENT"  means any acquisition of all or  substantially  all assets of
any Person,  or any direct or indirect  purchase or other  acquisition  of, or a
beneficial  interest in, capital stock or other  securities of any other Person,
or any direct or  indirect  loan,  extension  of  credit,  advance  (other  than
advances to employees  for moving and travel  expenses,  drawing  accounts,  and
similar   expenditures  in  the  ordinary   course  of  business),   or  capital
contribution to or investment in any other Person,  including without limitation
the incurrence or sufferance of Debt or accounts  receivable of any other Person
that are not current  assets or do not arise from sales to that other  Person in
the ordinary course of business.

     "LAW" means any constitution,  statute, law, ordinance,  regulation,  rule,
order, writ, injunction, or decree of any Tribunal.

     "LEASE" means any lease, sublease, license, franchise,  concession or other
agreement,  whether written or oral,  permitting any other Person to use, occupy
or possess any Property.

     "LEASE  OBLIGATIONS"  means the obligations of Company and its Consolidated
Subsidiaries to pay rent or other amounts under a Capital Lease or any Operating
Lease.

                                      -14-
<PAGE>
     "LENDERS"  means  the  lenders  listed  on  the  signature  pages  of  this
Agreement,  and each Eligible  Assignee which hereafter  becomes a party to this
Agreement pursuant to SECTION 9.4 hereof, for so long as any such Person is owed
any portion of the Obligations or obligated to make any Advances under the Loan.

     "LENDING  OFFICE"  means,  with  respect  to each  Lender,  its  branch  or
affiliate,  (a)  initially,  the  office of such  Lender,  branch  or  affiliate
identified as such on the signature  pages hereof,  and (b)  subsequently,  such
other office of such Lender, branch or affiliate as such Lender may designate in
writing  to  Company  and  Administrative  Agent as the  office  from  which the
Advances of such Lender will be made and maintained and for the account of which
all payments of principal  and interest on the Advances and the  Commitment  Fee
will  thereafter be made.  Lenders may have more than one Lending Office for the
purpose of making Base Rate Advances and LIBOR Advances.

     "LIBOR ADVANCE" means an Advance bearing interest at the LIBOR Rate.

     "LIBOR RATE" means a simple per annum  interest rate equal to the lesser of
(a)  the  Highest  Lawful  Rate,  and (b) the sum of the  LIBOR  Rate  plus  the
Applicable  Margin. The LIBOR Rate shall, with respect to LIBOR Advances subject
to reserve or deposit requirements,  be subject to premiums assessed therefor by
each Lender, which are payable directly to each Lender.

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

     "LICENSE"  means,  as to any Person,  any license,  permit,  certificate of
need, authorization, orders, certification,  accreditation, franchise, approval,
or grant of rights by any Tribunal or third person  necessary or appropriate for
such Person to own,  maintain,  or operate its business or Property,  unless the
failure to obtain,  retain,  or comply with same would not constitute a Material
Adverse Change.

     "LIEN" means any mortgage, pledge, security interest, encumbrance, lien, or
charge of any kind, including without limitation any agreement to give or not to
give  any of the  foregoing,  any  conditional  sale or  other  title  retention
agreement,  any lease in the nature  thereof,  and the filing of 

                                      -15-
<PAGE>
or agreement  to give any  financing  statement or other  similar form of public
notice under any Laws (except for the filing of a financing  statement or notice
in connection with an Operating Lease).

     "LITIGATION"  means any proceeding,  claim,  lawsuit,  arbitration,  and/or
investigation  conducted  or  threatened  by or before any  Tribunal,  including
without limitation proceedings, claims, lawsuits, and/or investigations under or
pursuant  to any  environmental,  occupational,  safety and  health,  antitrust,
unfair competition,  securities,  Tax, or other Law, or under or pursuant to any
contract, agreement, or other instrument.

     "LOAN"  means that  certain  Loan made to Company  on the  Closing  Date in
accordance with SECTION 2.1(A) hereof.

     "LOAN  PAPERS"  means this  Agreement;  the Notes;  any Interest Rate Hedge
Agreements  executed  between  Company  and any  Lender or Bank  Affiliate;  all
Guaranty  Agreements;  each  Assignment and  Acceptance;  all  promissory  notes
evidencing any portion of the Obligations; and all other documents, instruments,
agreements  or  certificates  executed  or  delivered  by  Company or any of its
Subsidiaries,  as security for Company's  obligations  hereunder,  in connection
with the loans to Company or otherwise;  as each such document  shall,  with the
consent of Lenders pursuant to the terms hereof, be amended,  revised,  renewed,
extended, substituted or replaced from time to time.

     "MAJORITY  LENDERS" means any combination of Lenders having at least 66.67%
of the Advances under the Loan; provided, however, that if no Advances under the
Loan are outstanding  under this  Agreement,  such term means any combination of
Lenders  having  a  Specified  Percentage  equal  to  at  least  66.67%  of  the
Commitment.

     "MANAGEMENT  FEES" means all fees from time to time  directly or indirectly
paid or  payable  by  Company  or any  Subsidiary  of  Company to any Person for
management services for managing any portion of any Property.

     "MATERIAL   ADVERSE   CHANGE"  or  "MATERIAL   ADVERSE  EFFECT"  means  any
circumstance  or event that (a) can reasonably be expected to cause a Default or
an Event of Default, (b) otherwise can reasonably be expected to (i) be material
and adverse to the continued operation of any Company and its Subsidiaries taken
as a whole, or (ii) be material and adverse to the financial condition, business
operations,  prospects or Properties of Company and its Subsidiaries  taken as a
whole, or (c) in any manner whatsoever does or can reasonably be expected to (i)
materially and adversely affect the validity or  enforceability  of any material
provision of any of the Loan Papers or (ii) materially and adversely  affect the
ability of Company or any Subsidiary of Company to perform its obligations under
the Loan Papers executed by it.

     "MATURITY  DATE"  means the  earlier of (a) the later of the Option Date or
the Final Maturity or (b) the date all of the Obligations become due and payable
(whether by acceleration, prepayment in full, scheduled reduction or otherwise).

                                      -16-
<PAGE>
     "MAXIMUM  AMOUNT"  means  the  maximum  amount  of  interest  which,  under
Applicable Law, Administrative Agent or any Lender is permitted to charge on the
Obligations.

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

     "MULTIEMPLOYER  PLAN"  means a  multiemployer  plan,  as defined in Section
4001(a)(3) of ERISA, to which Company,  any Subsidiary of Company,  or any ERISA
Affiliate  is making or accruing an  obligation  to make  contributions,  or has
within any of the  preceding  five plan years made or accrued an  obligation  to
make  contributions,  such  plan  being  maintained  pursuant  to  one  or  more
collective bargaining agreements.

     "MULTIPLE  EMPLOYER  PLAN"  means a single  employer  plan,  as  defined in
Section  4001(a)(15) of ERISA,  that (a) is maintained for employees of Company,
any Subsidiary of Company,  or any ERISA Affiliate and at least one Person other
than Company, any Subsidiary of Company, and any ERISA Affiliate,  or (b) was so
maintained  and in respect of which Company,  any Subsidiary of Company,  or any
ERISA  Affiliate could have liability under Section 4064 or 4069 of ERISA in the
event such plan has been or were to be terminated.

     "NET CASH PROCEEDS" means with respect to any offering or other disposition
of Capital Stock by any Person,  the  aggregate  amount of cash received by such
Person in connection with such  transaction  minus  reasonable  fees,  costs and
expenses and related Taxes.

     "NET WORTH" means, at any time, the shareholders' equity of Company and its
Consolidated Subsidiaries, determined on a consolidated basis in accordance with
GAAP at such time.

     "NOTE" means each  promissory  note of Company  evidencing the Advances and
obligations  owing hereunder to each Lender under the Loan, in substantially the
form of EXHIBIT A hereto, as each such note may be amended, extended,  restated,
renewed,  substituted or replaced from time to time, and each promissory note of
Company  evidencing  the Loan after the  Conversion  Date,  in  accordance  with
SECTION  2.15  hereof,  as each such Note may be  extended,  restated,  renewed,
substituted or replaced from time to time.

     "OBLIGATIONS"  means all present and future  obligations,  indebtedness and
liabilities,  and all renewals and  extensions  of all or any part  thereof,  of
Company and each  Subsidiary  of Company to any Lender or  Administrative  Agent
arising from, by virtue of, or pursuant to this Agreement, any of the other Loan
Papers and any and all renewals and extensions  thereof or any part thereof,  or
future amendments thereto,  all interest accruing on all or any part thereof and
reasonable  attorneys' fees incurred by Lenders and Administrative Agent for the
administration, execution of waivers, amendments and consents, and in connection
with any restructuring,  workouts or in the enforcement or the collection of all
or any part thereof, whether such obligations,  indebtedness and liabilities are
direct,  indirect,  fixed,  contingent,  joint,  several  or joint and  several.
Without  limiting the  generality of the foregoing,  "Obligations"  includes all
amounts which would be owed by Company, each Subsidiary of Company and any other
Person (other than Administrative  Agent or Lenders) to 

                                      -17-
<PAGE>
Administrative Agent or Lenders under any Loan Paper, but for the fact that they
are  unenforceable  or  not  allowable  due to the  existence  of a  bankruptcy,
reorganization  or similar  proceeding  involving  Company,  any  Subsidiary  of
Company or any other Person  (including  all such amounts which would become due
but for the filing of any petition in  bankruptcy,  or the  commencement  of any
insolvency,  reorganization  or like  proceeding of Company,  any  Subsidiary of
Company or any other Person under any Debtor Relief Law).

     "OPERATING  LEASES" means operating  leases,  as defined in accordance with
GAAP.

     "OPTION DATE" means that date which is 364 days after the Closing Date.

     "PBGC" means the Pension  Benefit  Guaranty  Corporation,  or any successor
agency or entity performing substantially the same functions.

     "PERMITTED  DISTRIBUTIONS"  means,  for  Company  for  any  fiscal  year of
Company,  an amount  not to exceed  95% of Cash  Flow From  Operations  for such
fiscal year, commencing with the 1996 fiscal year of Company.

     "PERMITTED LIENS" means

         (a) those imposed by the Loan Papers (as defined in this  Agreement) or
     by  the  Loan  Papers  (as  defined  in the  Amended  and  Restated  Credit
     Agreement);

         (b)  Liens  in  connection  with  workers'  compensation,  unemployment
     insurance or other social security  obligations  (which phrase shall not be
     construed to refer to ERISA);

         (c)  deposits,  pledges  or liens to secure  the  performance  of bids,
     tenders,  contracts  (other  than  contracts  for the  payment of  borrowed
     money), leases, statutory obligations, surety, customs, appeal, performance
     and  payment  bonds and other  obligations  of like  nature  arising in the
     ordinary course of business;

         (d) mechanics',  workmen's,  carriers,  warehousemen's,  materialmen's,
     landlords' or other like Liens  arising in the ordinary  course of business
     with respect to obligations which are not due or which are either (i) being
     contested in good faith and by appropriate proceedings diligently conducted
     (including,  if applicable, by a Tenant of a Property as required under the
     Lease  relating  thereto  or by a  mortgagor  under a  Funded  Mortgage  as
     required thereby) and in respect of which adequate reserves shall have been
     established  in  accordance  with  GAAP on the books of  Company  or of its
     Subsidiaries  or (ii) the  obligation  of a Tenant of a Property  under its
     Lease or of a mortgagor  under a Funded  Mortgage and Company or any of its
     Subsidiaries has made a demand upon such Tenant or mortgagor to pay amounts
     owed in order to remove such Liens;  provided  that if the Tenant  fails to
     pay such amounts  then  Company or its  Subsidiary,  as  applicable,  shall
     promptly take all necessary action to remove such Liens;

                                      -18-
<PAGE>
         (e) Liens for  taxes,  assessments,  fees or  governmental  charges  or
     levies not  delinquent  or to the extent that payment  hereof is either (i)
     being  contested in good faith and by  appropriate  proceedings  diligently
     conducted (including,  if applicable, by a Tenant of a Property as required
     under the Lease relating  thereto or by a mortgagor under a Funded Mortgage
     as required thereby),  and in respect of which adequate reserves shall have
     been  established  in  accordance  with GAAP on the books of Company or any
     Subsidiary of Company or (ii) the  obligation of a Tenant of Property under
     its Lease or of a mortgagor  under a Funded  Mortgage and Company or any of
     its  Subsidiaries  has made a demand upon such Tenant or  mortgagor  to pay
     amounts  owed in order to remove  such Liens;  provided  that if the Tenant
     fails to pay such amounts then Company or its  Subsidiary,  as  applicable,
     shall promptly take all necessary action to remove such Liens;

         (f)  easements,  rights of way,  restrictions,  leases of  Property  to
     others,   easements   for   installations   of  public   utilities,   title
     imperfections  and  restrictions,   zoning  ordinances  and  other  similar
     encumbrances  affecting  Property  which in the aggregate do not materially
     adversely  affect the value of such Property or  materially  impair its use
     for the operation of the business of Company or any Subsidiary of Company;

         (g) Liens on Property acquired by Company or any of its Subsidiaries in
     the ordinary course of business, securing Indebtedness of Company or any of
     its  Subsidiaries  incurred or assumed for the purpose of financing  all or
     part of the cost of acquiring  such  Property;  provided that (i) such Lien
     attaches solely to the Property so acquired in such transaction,  (ii) such
     Lien  attaches to such Property  concurrently  with or within 90 days after
     the  acquisition  thereof,  (iii) such  Property is used in the business of
     Company or any of its Subsidiaries, (iv) the amount of Indebtedness secured
     by Lien shall not exceed  100% of the cost of such  Property,  and (v) such
     Indebtedness is permitted to be incurred  hereunder and would not otherwise
     result in a Default or Event of Default hereunder; and

         (h) Liens on the  Property  constituting  Company's  executive  offices
     located in Scottsdale,  Arizona, securing Indebtedness for the acquisition,
     construction or improvement thereof.

     "PERSON" means an  individual,  partnership,  joint  venture,  corporation,
trust, Tribunal, unincorporated organization, and government, or any department,
agency, or political subdivision thereof.

     "PLAN" means a Single Employer Plan or a Multiple Employer Plan.

     "PROHIBITED TRANSACTION" has the meaning specified therefor in Section 4975
of the Code or Section 406 of ERISA.

                                      -19-
<PAGE>
     "PROPERTY"  means all types of real,  personal,  tangible,  intangible,  or
mixed property, whether owned in fee simple or leased.

     "QUARTERLY DATE" means the last Business Day of each March, June, September
and December during the term of this Agreement, commencing on March 31, 1999.

     "RATABLE"  means,  as to any  Lender,  in  accordance  with  its  Specified
Percentage.

     "REAL  ESTATE  INVESTMENT  TRUST means the  classification  for federal tax
purposes as a real estate  investment trust pursuant to Part II, Subchapter M of
Chapter 1 of the Code.

     "REFINANCING  ADVANCE"  means an Advance that is used to pay the  principal
amount of an  existing  Advance (or any  performance  thereof) at the end of its
Interest  Period and which,  after giving effect to such  application,  does not
result in an increase in the aggregate amount of outstanding Advances.

     "REGULATORY  CHANGE"  means any change  after the date  hereof in  federal,
state,  or  foreign  Laws  (including  the  introduction  of any new Law) or the
adoption  or making  after  such  date of any  interpretations,  directives,  or
requests of or under any federal,  state, or foreign Laws (whether or not having
the  force  of  Law)  by  any  Tribunal  charged  with  the   interpretation  or
administration  thereof,  applying  to a class of  financial  institutions  that
includes any Lender.

     "REPORTABLE  EVENT" means a reportable  event as defined in Section 4043 of
ERISA and the  regulations  issued under such  section,  with respect to a Plan,
excluding,  however,  such events as to which the PBGC by regulation  waived the
requirement  of Section  4043(a) of ERISA that it be notified  within 30 days of
the  occurrence  of such  event,  provided  that a failure  to meet the  minimum
funding standard of Section 412 of the Code and of Section 302 of ERISA shall be
a Reportable  Event regardless of the issuance of any such waivers in accordance
with either Section 4043(a) of ERISA or Section 412(d) of the Code.

     "RESTRICTED  PAYMENTS"  means  (a) any  direct  or  indirect  distribution,
Distribution  or other payment on account of any general or limited  partnership
interest  in (or the  setting  aside of funds  for,  or the  establishment  of a
sinking fund or analogous  fund with respect to), or shares of Capital  Stock or
other  securities of, Company or any Subsidiary of Company;  (b) any payments of
principal  of, or interest  on, or fees  related to, or any other  payments  and
prepayments  with  respect to, or the  establishment  of, or any payment to, any
sinking fund or analogous  fund for the purpose of making any such  payments on,
Indebtedness  of  Company  or any  Subsidiary  of  Company  (including,  without
limitation,  Debt  evidenced  by  the  Intercompany  Notes,  but  excluding  the
Obligations);  (c) any  Management  Fee or any  management,  consulting or other
similar  fees,  or  any  interest  thereon,  payable  by  Company  or any of its
Subsidiaries to any Affiliate of Company;  and (d) any administration fee or any
administration,  consulting  or other  similar  fees,  or any interest  thereon,
payable by Company or any of its  Subsidiaries to any Affiliate of Company or to
any other Person.

                                      -20-
<PAGE>
     "RETAINED  SECURITIES"  means any class of  securities  or portion  thereof
purchased or retained by Company or any Subsidiary from any  corporation,  trust
or other entity in conjunction with any Asset Securitization.

     "RIGHTS" means rights, remedies, powers, and privileges.

     "S&P" means Standard & Poor's  Ratings  Group,  a Division of  McGraw-Hill,
Inc., a New York corporation.

     "SINGLE  EMPLOYER PLAN" means a single employer plan, as defined in Section
4001(a)(15) of ERISA,  other than a Multiple  Employer Plan,  that is maintained
for employees of Company or any ERISA Affiliate.

     "SOLVENT" means, with respect to any Person, that on such date (a) the fair
value of the  Property  of such  Person  is  greater  than the  total  amount of
liabilities,  including,  without  limitation,  Contingent  Liabilities  of such
Person,  (b) the present fair salable  value of the assets of such Person is not
less than the amount that will be required to pay the probable liability of such
Person on its debts as they become  absolute and  matured,  (c) such Person does
not intend to, and does not believe  that it will,  incur  debts or  liabilities
beyond such Person's  ability to pay as such debts and liabilities  mature,  and
(d) such Person is not engaged in business or a transaction, and is not about to
engage in business or a  transaction,  for which such  Person's  Property  would
constitute an unreasonably small capital.

     "SPECIAL COUNSEL" means the law firm of Donohoe,  Jameson & Carroll,  P.C.,
Dallas,  Texas,  special counsel to Administrative  Agent, or such other counsel
selected by Administrative Agent from time to time.

     "SPECIFIED  PERCENTAGE" means, as to any Lender,  the percentage  indicated
beside its name on the signature  pages  hereof,  or as adjusted or specified in
any Assignment and Acceptance, or amendment to this Agreement.

     "SUBORDINATION  AGREEMENT" means a subordination agreement substantially in
the form of EXHIBIT G hereto, as amended,  modified or supplemented from time to
time.

     "SUBSIDIARY" of any Person means

         (a) any corporation, partnership, joint venture, trust, estate or other
     Person of which (or in which) more than 50% of:

             (i) the  outstanding  Capital  Stock having voting power to elect a
         majority  of the  Board of  Directors  of such  corporation  (or  other
         Persons  performing  similar functions of such entity, and irrespective
         of whether at the time  Capital  Stock of any 

                                      -21-
<PAGE>
         other class or classes of such  corporation  shall or might have voting
         power upon the occurrence of any contingency),

             (ii) the interest in the capital or profits of such  partnership or
         joint venture,

             (iii) the beneficial interest of such trust or estate, or

             (iv) the equity interest of such other Person,

     is at the time  directly or indirectly  owned by (A) such Person,  (B) such
     Person  and  one or  more  of its  Subsidiaries  or (C) one or more of such
     Person's Subsidiaries, and

         (b) any corporation which is a non-qualified  REIT Subsidiary under the
     Code of which more than 50% of the non-voting preferred Capital Stock is at
     the time directly or indirectly owned by (i) such Person,  (ii) such Person
     and one or more of its  Subsidiaries  or (iii) one or more of such Person's
     Subsidiaries;  PROVIDED,  HOWEVER,  Subsidiary does not mean or include any
     Asset Securitization Affiliate.

     "TAXES" means all taxes,  assessments,  imposts,  fees, or other charges at
any time imposed by any Laws or Tribunal.

     "TENANTS" means any and all tenants, licensees, occupants,  concessionaires
or other Person or Persons possessing,  occupying or otherwise using or having a
right to use, any space at Property of Company or its Subsidiaries and giving or
paying  rent  or  other  consideration,   whether  under  written  agreement  or
otherwise.

     "TOTAL  ASSETS"  means,  at any time,  all assets  (calculated  without any
deduction  for  accumulated   depreciation)  of  Company  and  its  Consolidated
Subsidiaries  determined on a consolidated basis in accordance with GAAP at such
time.

     "TOTAL INDEBTEDNESS"  means,  without duplication,  with respect to Company
and its  Consolidated  Subsidiaries,  the sum of all Indebtedness of Company and
its  Consolidated   Subsidiaries,   excluding   Indebtedness  evidenced  by  the
Intercompany  Notes  (which  Debt  is  subject  to a  Subordination  Agreement),
calculated on a consolidated basis in accordance with GAAP.

     "TOTAL SECURED  INDEBTEDNESS"  means, at any time, the aggregate  amount of
Indebtedness  of  Company  and  its  Consolidated   Subsidiaries  determined  in
accordance  with  GAAP on a  consolidated  basis  that is  secured  solely  by a
Consensual Lien.

     "TOTAL  UNENCUMBERED  ASSETS" means,  at any time, the aggregate  amount of
Total  Assets  of  Company  and  its  Consolidated  Subsidiaries  determined  in
accordance  with GAAP on a  consolidated  

                                      -22-
<PAGE>
basis which are not subject to a Lien,  other than  Permitted  Liens of the type
described in clauses (a) through (f) of the definition thereof.

     "TOTAL UNSECURED  INDEBTEDNESS" means, at any time, the aggregate amount of
Indebtedness of Company and its Consolidated Subsidiaries that is not secured by
a Lien,  other than Permitted Liens of the type described in clauses (a) through
(f) of the definition thereof.

     "TRIBUNAL" means any state, commonwealth, federal, foreign, territorial, or
other court or government or regulatory body, subdivision,  agency,  department,
commission, board, bureau, or instrumentality of a governmental body.

     "TYPE" refers to the distribution  between Advances bearing interest at the
Base Rate or LIBOR Rate.

     "UCC" means the Uniform Commercial Code as adopted in the State of Texas.

     "UNUSED  COMMITMENT"  means, on any date,  with respect to each Lender,  an
amount equal to the product of such Lender's Specified Percentage  multiplied by
the  Commitment in effect on such date,  minus an amount equal to the sum of all
outstanding Advances made by such Lender under the Loan which are outstanding on
such date.

     "WITHDRAWAL  LIABILITY"  has the  meaning  given  such term under Part I of
Subtitle E of Title IV of ERISA.

     1.2 ACCOUNTING AND OTHER TERMS. All accounting terms used in this Agreement
which are not otherwise  defined  herein shall be construed in  accordance  with
GAAP  consistently   applied  on  a  consolidated  basis  for  Company  and  its
Consolidated Subsidiaries,  unless otherwise expressly stated herein. References
herein to one gender shall be deemed to include all other genders.  Except where
the context otherwise requires,  all references to time are deemed to be Dallas,
Texas time.

                                   ARTICLE II.

                          AMOUNTS AND TERMS OF ADVANCES

     2.1 ADVANCES UNDER THE LOAN. Each Lender severally agrees, on the terms and
subject to the conditions  hereinafter set forth, to make Advances to Company on
any  Business Day during the period from the Closing Date to the Option Date or,
if Company and Lenders  have agreed to extend the Loan until the Final  Maturity
pursuant to SECTION  2.15(A)  hereof,  to the Final  Maturity,  in an  aggregate
principal amount not to exceed at any time  outstanding such Lender's  Specified
Percentage of the Commitment.  On the Conversion Date, if Company has elected to
convert  the  Loan to a term  loan  pursuant  to  SECTION  2.15(B)  hereof,  all
outstanding  Advances shall convert to a term loan in the amount of the Advances
outstanding  on the Conversion  Date, and no scheduled  

                                      -23-
<PAGE>
payments  of  principal  of  Advances  in respect of the term loan  (other  than
Refinancing  Advances)  shall be required  to be made until the Final  Maturity.
Subject to the terms and  conditions  of this  Agreement,  until the  Conversion
Date,  Company may borrow,  repay and  reborrow  the  Advances.  Notwithstanding
anything in this  SECTION 2.1 to the  contrary,  at no time shall the sum of all
the aggregate principal amount of Advances outstanding under the Loan exceed the
Commitment.  After the Conversion  Date, no Advances will be available under the
Loan except Refinancing Advances.

     2.2 MAKING ADVANCES.

     (a) Each Borrowing of Advances under the Loan prior to the Conversion  Date
shall be made upon the  written  notice of Company,  received by  Administrative
Agent not later than (i) 12:00 noon three  Business  Days prior to the  proposed
date of the  Borrowing,  in the case of LIBOR  Advances  and (ii) not later than
10:00 a.m.  on the date of such  Borrowing,  in the case of Base Rate  Advances.
Each such notice of a Borrowing  (a  "BORROWING  NOTICE")  shall be by telecopy,
promptly  confirmed  by letter,  in  substantially  the form of EXHIBIT E hereto
specifying therein:

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

         (ii) the amount  of such  proposed  Borrowing  which,  (A) prior to the
     Conversion  Date,  shall  not  exceed  the  Commitment  less the sum of all
     Advances  then  outstanding,  and (B) shall,  in the case of a Borrowing of
     LIBOR Advances,  be in an amount of not less than $5,000,000 or an integral
     multiple of $1,000,000 in excess thereof and, in the case of a Borrowing of
     Base Rate  Advances,  be in an amount  of not less  than  $1,000,000  or an
     integral multiple of $500,000 in excess thereof;

       (iii) the Type of Advances of which the Borrowing is to be comprised; and

        (iv) if the Borrowing is to be comprised of LIBOR Advances, the duration
     of the initial Interest Period applicable to such Advances.

     If the  Borrowing  Notice  fails to specify  the  duration  of the  initial
Interest  Period for any Borrowing  comprised of LIBOR  Advances,  such Interest
Period shall be one month.  Administrative Agent shall give prompt notice (which
may be by telecopy or telephonic, to be confirmed by telecopy) of its receipt of
a Borrowing  Notice to each Lender.  Each Lender shall,  before 2:00 p.m. on the
date  of each  Advance  hereunder  under  the  Loan  (other  than a  Refinancing
Advance), make available to

                                      -24-
<PAGE>
                              Administrative Agent
                                NationsBank Plaza
                                 901 Main Street
                                   14th Floor
                               Dallas, Texas 75202
                               Attn. Theresa Belk

such Lender's  Specified  Percentage of the aggregate Advances under the Loan to
be made on that day in immediately available funds.

     (b) Unless any applicable condition specified in ARTICLE III hereof has not
been satisfied,  Administrative  Agent will make the funds on Advances under the
Loan  promptly  available to Company  (other than with respect to a  Refinancing
Advance) by wiring Norwest Bank Minneapolis,  N.A., ABA #091000019,  Beneficiary
Bank: Norwest Bank Arizona, Beneficiary Account:  8711701002,  Beneficiary Name:
FFCA, or such other account as shall have been specified by Company.

     (c) After giving effect to any Borrowing,  (i) there shall not be more than
ten different  Interest  Periods in effect and (ii) the  aggregate  principal of
outstanding Advances shall not exceed the Commitment.

     (d) No Interest  Period for a Borrowing  under the  Facility  shall  extend
beyond the Maturity Date.

     (e) Unless a Lender shall have notified  Administrative  Agent prior to the
date of any Advance that it will not make available its Specified  Percentage of
any  Advance,  Administrative  Agent may  assume  that such  Lender has made the
appropriate   amount   available  in  accordance   with  SECTION   2.2(A),   and
Administrative  Agent may, in reliance upon such  assumption,  make available to
Company a corresponding  amount.  If and to the extent any Lender shall not have
made such amount  available  to  Administrative  Agent,  such Lender and Company
severally  agree to repay to  Administrative  Agent  immediately  on demand such
corresponding  amount together with interest thereon,  from the date such amount
is  made  available  to  Company  until  the  date  such  amount  is  repaid  to
Administrative  Agent, at (i) in the case of Company, the Base Rate, and (ii) in
the case of such Lender, the Federal Funds Rate. The obligation of Company under
this SECTION 2.2(E) shall not affect or impair any right of Company  against any
Lender for such Lender's breach of its obligation to fund Advances.

     (f) The failure by any Lender to make available its Specified Percentage of
any Advance  shall not relieve any other  Lender of its  obligation,  if any, to
make available its Specified  Percentage of any Advance.  In no event,  however,
shall any such Lender be responsible for the failure of any other Lender to make
available any portion of any Advance.

                                      -25-
<PAGE>
     (g) Company shall  indemnify  each Lender  against any  Consequential  Loss
incurred by each Lender as a result of (i) any failure to fulfill,  on or before
the date  specified in the Borrowing  Notice for an Advance,  the  conditions to
such Advance set forth herein or (ii) Company's  requesting  that an Advance not
be made on the date specified in the Borrowing Notice.

     2.3 EVIDENCE OF INDEBTEDNESS.

     (a) The  obligations  of Company with respect to all Advances  made by each
Lender  shall be evidenced  by a Note in the amount of such  Lender's  Specified
Percentage  of the  Commitment  on the Closing Date (as the same may be modified
pursuant to SECTION 9.4 hereof)

     (b) Absent  demonstrable  error,  Administrative  Agent's and each Lender's
records  shall be conclusive  as to amounts owed  Administrative  Agent and such
Lender under the Notes and this Agreement.

     2.4 REDUCTION OF COMMITMENT.

     (a) VOLUNTARY COMMITMENT REDUCTION.  Company shall have the right from time
to time upon notice by Company to Administrative Agent not later than 1:00 p.m.,
five Business Days in advance,  to reduce the  Commitment,  in whole or in part;
provided,  however, that Company shall pay the accrued and unpaid Commitment Fee
on the amount of such reduction,  if any, and any partial  reduction shall be in
an aggregate  amount which is not less than $1,000,000 and an integral  multiple
of $500,000.  Such notice shall specify the amount of reduction and the proposed
date of such reduction.

     (b) MANDATORY COMMITMENT REDUCTION OR TERMINATION.

            (i) (A) If Company  and  Lenders  have not agreed to extend the Loan
      final maturity in accordance with the Extension Option pursuant to SECTION
      2.15(A)  hereof and Company has not  exercised  the  Conversion  Option in
      accordance with the terms of SECTION  2.15(B) hereof,  then the Commitment
      shall  automatically be reduced to zero on the Option Date. (B) If Company
      and Lenders  have agreed to extend the Loan final  maturity in  accordance
      with the  Extension  Option  pursuant  to SECTION  2.15(A)  hereof,  or if
      Company has exercised the Conversion  Option in accordance  with the terms
      of SECTION  2.15(B)  hereof,  then the Commitment  shall be  automatically
      reduced to zero on the Final Maturity.

            (ii) ASSET  SALES.  On the date of any Asset Sale by Company or any
      Subsidiary  of Company which (A) occurs on a date on which the Amended and
      Restated Credit  Agreement is no longer in effect and (B) is not otherwise
      permitted to be made pursuant to SECTION 6.6 hereof,  the Commitment shall
      be automatically and permanently  reduced by an amount equal to the amount
      by which the Asset Sale Proceeds of such Asset Sale exceeds the amount not
      otherwise permitted pursuant to SECTION 6.6 hereof.

                                      -26-
<PAGE>
         (c) COMMITMENT REDUCTIONS, GENERALLY. To the extent that the sum of the
     aggregate  outstanding  Advances exceed the Commitment  after any reduction
     thereof,  Company shall simultaneously repay on the date of such reduction,
     any such excess amount and all accrued interest thereon,  together with any
     amounts  constituting  any  Consequential  Loss. Once reduced or terminated
     pursuant to this  SECTION  2.4,  the  Commitment  may not be  increased  or
     reinstated.

     2.5 PREPAYMENTS.

     (a) OPTIONAL  PREPAYMENTS.  Company may, upon at least three  Business Days
prior  written  notice to  Administrative  Agent  stating the proposed  date and
aggregate principal amount of the prepayment,  prepay the outstanding  principal
amount of any Advances in whole or in part,  together  with accrued  interest to
the date of such  prepayment on the principal  amount  prepaid  without  premium
other than any  Consequential  Loss;  PROVIDED,  HOWEVER,  that in the case of a
prepayment  of a Base Rate  Advance,  the notice of  prepayment  may be given by
telephone  by 11:00 a.m.  on the date of  prepayment.  Each  partial  prepayment
shall, in the case of Base Rate Advances, be in an aggregate principal amount of
not less than  $1,000,000  or a larger  integral  multiple of $500,000 in excess
thereof and, in the case of LIBOR Advances,  be in an aggregate principal amount
of not less than  $5,000,000  or a larger  integral  multiple of  $1,000,000  in
excess  thereof.  If any notice of  prepayment is given,  the  principal  amount
stated  therein,  together with accrued  interest on the amount  prepaid and the
amount,  if any,  due  under  SECTIONS  2.11 and 2.13  hereof,  shall be due and
payable on the date specified in such notice.

     (b) MANDATORY PREPAYMENTS.  On the date of any Asset Sale by Company or any
Subsidiary  of  Company  (x) which  occurs on a date on which  the  Amended  and
Restated Credit Agreement is no longer in effect and (y) in which the Asset Sale
Proceeds thereof exceed $3,000,000, Company shall make a mandatory prepayment of
Advances under the Loan in an amount equal to the amount by which the Asset Sale
Proceeds of such Asset Sale exceeds $3,000,000. On the date of any Asset Sale of
Company or any  Subsidiary  of  Company  which (x) occurs on a date on which the
Amended  and  Restated  Credit  Agreement  is no longer in effect and (y) is not
otherwise  permitted to be made  pursuant to SECTION 6.6 hereof,  Company  shall
make a mandatory prepayment of Advances under the Loan by an amount equal to the
amount by which the Asset Sale  Proceeds  of such Asset Sale  exceeds the amount
not otherwise permitted pursuant to SECTION 6.6 hereof.

     (c)  PREPAYMENTS,  GENERALLY.  No  prepayments of Advances made pursuant to
SECTION  2.5(A)  or the  first  sentence  of  SECTION  2.5(B)  shall  cause  the
Commitment  to be reduced.  Any  prepayment  of Advances  pursuant to the second
sentence of SECTION  2.5(B) shall cause the Commitment to be  automatically  and
permanently reduced by the amount of such required prepayment. Any prepayment of
Advances  pursuant  to this  SECTION  2.5  shall be  applied  FIRST to Base Rate
Advances, if any, then outstanding under the Facility,  SECOND to LIBOR Advances
for  which the date of  prepayment  is the last day of the  applicable  Interest
Period, if any,  outstanding under the Facility and THIRD to LIBOR Advances with
the shortest  remaining  Interest  Periods  outstanding  under the Facility.  If
Company has exercised  the  Conversion  Option in  accordance  with the terms of

                                      -27-
<PAGE>
SECTION 2.15(B) hereof, Advances prepaid under SECTIONS 2.5(A) and 2.5(B) hereof
may not be reborrowed.

     2.6 REPAYMENT.

     (a) LIBOR ADVANCES.  The principal  amount of each LIBOR Advance is due and
payable  on the last day of the  applicable  Interest  Period,  which  principal
payment may be made by means of a  Refinancing  Advance in  accordance  with the
terms of  Section  2.09  hereof  (and  subject to the other  provisions  of this
Agreement).

     (b)  COMMITMENT  REDUCTION.  On the date of a reduction  of the  Commitment
pursuant to SECTION  2.4 hereof  prior to the  Conversion  Date,  the  aggregate
amount of Advances in excess of the Commitment shall in each case be immediately
due and  payable.  Each such  principal  repayments  may not be made by means of
Refinancing Advances.

     (c) OPTION DATE. The aggregate  outstanding amount of the Advances shall be
due and payable in full on the Option Date,  provided that,  notwithstanding the
foregoing, on the Option Date if Company and Lenders have agreed to an Extension
Option in accordance with the terms of SECTION 2.15 hereof,  then the Loan shall
be due and  payable in full on the Final  Maturity.  Any portion of the Loan not
extended in accordance with the terms of SECTION 2.15(A) hereof shall be due and
payable on the Option Date.

     (d) CONVERSION DATE. If Company has elected the Conversion Option, then the
Loan shall be due and  payable in full on the Final  Maturity  and no  scheduled
payments of principal of Advances  (other than  Refinancing  Advances)  shall be
required to be made prior to the Final Maturity.

     (e) MATURITY DATE. All  outstanding  Advances under the Loans and all other
Obligations shall be due and payable in full on the Maturity Date.

     (f) REPAYMENTS,  GENERALLY.  All outstanding Advances and other Obligations
shall be due and  payable in full on the  Maturity  Date.  Any  repayments  made
pursuant to this Section  shall be without  premium or penalty,  except  Company
must pay together with any such prepayments, any Consequential Losses. Repayment
of  Advances  shall be applied to Base Rate  Advances  first,  and then to LIBOR
Advances.  After (i) the  Conversion  Date, and (ii) the Option Date (if Company
and Lenders did not agree to an Extension  Option),  Advances prepaid  hereunder
may not be reborrowed.

     2.7 INTEREST.  Subject to SECTION 2.8 below,  Company shall pay interest on
the unpaid  principal amount of each Advance from the date of such Advance until
such principal shall be paid in full, at the following rates:

     (a) BASE RATE  ADVANCES.  Base Rate Advances  shall bear interest at a rate
per annum  equal to the  lesser  of (i) the Base Rate as in effect  from time to
time and (ii) the Highest  Lawful  Rate.  If the amount of  interest  payable in
respect of any interest computation period is reduced to 

                                      -28-
<PAGE>
the Highest Lawful Rate pursuant to the immediately  preceding  sentence and the
amount of interest  payable in respect of any  subsequent  interest  computation
period  would be less than the  Maximum  Amount,  then the  amount  of  interest
payable in respect  of such  subsequent  interest  computation  period  shall be
automatically  increased to Maximum  Amount;  PROVIDED that at no time shall the
aggregate  amount by which  interest  paid has been  increased  pursuant to this
sentence exceed the aggregate amount by which interest has been reduced pursuant
to the immediately preceding sentence.

     (b) LIBOR  ADVANCES.  LIBOR  Advances  shall bear  interest at the rate per
annum equal to the LIBOR Rate applicable to such Advance, which at no time shall
exceed the Highest Lawful Rate.

     (c) PAYMENT DATES.  Accrued and unpaid interest on Base Rate Advances shall
be paid  quarterly  in arrears  on each  Quarterly  Date and on the  appropriate
maturity,  repayment or prepayment  date.  Accrued and unpaid  interest on LIBOR
Advances shall be paid on the last day of the appropriate Interest Period and on
the date of any prepayment or repayment of such Advance; PROVIDED, HOWEVER, that
if any Interest Period for a LIBOR Advance exceeds three months,  interest shall
also be paid on each date  occurring  during the  Interest  Period  which is the
three month anniversary date of the first day of the Interest Period.

     2.8  DEFAULT  INTEREST.  During the  continuation  of any Event of Default,
Company shall pay, on demand,  interest (after as well as before judgment to the
extent permitted by Law) on the principal amount of all Advances outstanding and
on all other  Obligations due and unpaid hereunder for each Advance equal to the
lesser of the (a) the Highest  Lawful Rate and (b) the Base Rate (whether or not
in effect) plus 3.00%.

     2.9 CONTINUATION AND CONVERSION ELECTIONS.

     (a) Company may upon irrevocable written notice to Administrative Agent and
subject to the terms of this Agreement:

         (i) elect to  convert,  on any  Business  Day,  all or any  portion  of
     outstanding  Base  Rate  Advances  (in an  aggregate  amount  not less than
     $5,000,000 or a larger  integral  multiple of $1,000,000 in excess thereof)
     into LIBOR Advances;

        (ii) elect to convert at the end of any Interest Period therefor, all or
     any portion of outstanding  LIBOR Advances  comprised of the same Borrowing
     (in an  aggregate  amount  not less than  $1,000,000  or a larger  integral
     multiple of $500,000 in excess thereof) into Base Rate Advances; or

       (iii) elect to continue, at the end of any Interest Period therefor,  any
     LIBOR Advances;

                                      -29-
<PAGE>
PROVIDED,  HOWEVER,  that if the aggregate amount of outstanding  LIBOR Advances
comprised  in the same  Borrowing  shall  have been  reduced  as a result of any
payment,  prepayment  or  conversion  of part  thereof  to an  amount  less than
$1,000,000,  the LIBOR Advances comprised in such Borrowing shall  automatically
convert into Base Rate Advances at the end of each respective Interest Period.

     (b) Company shall deliver a notice of conversion or continuation (a "NOTICE
OF CONVERSION/CONTINUATION"),  in substantially the form of EXHIBIT D hereto, to
Administrative  Agent not later than (i) 12:00 noon three Business Days prior to
the proposed date of conversion or continuation,  if the Advances or any portion
thereof are to be converted  into or continued as LIBOR  Advances;  and (ii) not
later than 10:00 a.m. on the proposed date of conversion or continuation, if the
Advances or any portion thereof are to be converted into Base Rate Advances.

     Each  such  Notice  of  Conversion/Continuation  shall  be by  telecopy  or
telephone, promptly confirmed in writing, specifying therein:

         (i) the proposed date of conversion or continuation;

        (ii) the aggregate amount of Advances to be converted or continued;

       (iii) the nature of the proposed conversion or continuation; and

        (iv) the duration of the applicable Interest Period.

     (c) If, upon the  expiration  of any Interest  Period  applicable  to LIBOR
Advances,  Company  shall  have  failed  to select a new  Interest  Period to be
applicable  to such LIBOR  Advances  or if an Event of  Default  shall then have
occurred and be  continuing,  Company shall be deemed to have elected to convert
such LIBOR Advances into Base Rate Advances  effective as of the expiration date
of such current Interest Period.

     (d) Upon  receipt  of a Notice of  Conversion/Continuation,  Administrative
Agent  shall  promptly   notify  each  Lender   thereof.   All  conversions  and
continuations  shall be made pro rata  among  Lenders  based on their  Specified
Percentage of the respective  outstanding principal amounts of the Advances with
respect to which such notice was given held by each Lender.

     (e) Notwithstanding any other provision contained in this Agreement,  after
giving effect to any conversion or continuation of any Advances, there shall not
be outstanding Advances with more than ten different Interest Periods.

     2.10  FEES.  Subject  to  SECTION  9.8  hereof,  Company  agrees  to pay to
Administrative  Agent,  for the account of each Lender,  a Commitment Fee on the
average daily amount of each Lender's Unused Commitment,  from February 19, 1999
through the Maturity Date,  payable  quarterly in arrears on each Quarterly Date
occurring  after the Closing  Date,  with the last such payment due and 

                                      -30-
<PAGE>
owing on the Maturity Date at the following per annum  percentage  applicable in
the following situations:

                  APPLICABILITY                                     PERCENTAGE
                  -------------                                     ----------
     CATEGORY 1 - There is no Index Debt
     Rating or the Index Debt Rating is the following:
     below BBB- by S&P or below Baa3 by Moody's                       0.375%

     CATEGORY 2 - The Index Debt Rating is the  following:
     BBB-, BBB or BBB+ by S&P or Baa3, Baa2 or Baa1 by Moody's        0.200%

     CATEGORY 3 - The Index Debt Rating is the following:
     A- or better by S&P or A3 or better by Moody's                   0.150%

The  Commitment  Fee shall be (i) fully earned when due and  nonrefundable  when
paid and (ii)  adjusted on each  Adjustment  Date  according  to the most recent
determination  of the Index Debt Rating.  For purposes of the foregoing,  if the
Index Debt Rating  established  by S&P or Moody's  shall fall within a different
category, the Commitment Fee shall be determined by reference to whichever Index
Debt Rating shall fall within the inferior (or numerically lower) category.

     2.11  FUNDING  LOSSES.  If  Company  makes any  payment  or  prepayment  of
principal with respect to any LIBOR Advance  (including  payments made after any
acceleration  thereof) or converts any Advance  from a LIBOR  Advance on any day
other than the last day of an Interest Period  applicable  thereto or if Company
fails to prepay,  borrow,  convert, or continue any LIBOR Advance after a notice
or  prepayment,  borrowing,  conversion  or  continuation  has been given (or is
deemed to have been given) to  Administrative  Agent,  Company shall pay to each
Lender on demand (subject to SECTION 9.8 hereof) any Consequential Loss.

     2.12 COMPUTATIONS AND MANNER OF PAYMENTS.

     (a)  Company  shall make each  payment  not later than 1:00 p.m. on the day
when due in immediately available funds to Administrative Agent, for the Ratable
account of Lenders unless otherwise specifically provided herein, at

                              Administrative Agent
                                NationsBank Plaza
                                 901 Main Street
                                   14th Floor
                               Dallas, Texas 75202
                               Attn. Theresa Belk

for the  further  credit to the  account of  Franchise  Finance  Corporation  of
America.  No later than the end of each day when each payment hereunder is made,
Company shall notify Theresa Belk,  telephone  (214)  508-9177,  facsimile (214)
508-2515,  or such other  Person as  Administrative  Agent 

                                      -31-
<PAGE>
may from time to time specify.  Notwithstanding anything in this SECTION 2.16(A)
or any  other  provision  of this  Agreement  or any  other  Loan  Paper  to the
contrary,  any payment by Company in respect of any Advances after  acceleration
of the Advances pursuant to SECTION 7.2 or any monies received by Administrative
Agent or any Lender as a result of the exercise of remedies under any Loan Paper
after  acceleration of Advances pursuant to SECTION 7.2 shall be distributed pro
rata to each Lender based on the percentage that the  outstanding  Advances owed
to such Lender bears to the aggregate Advances owed to all Lenders.

     (b) Unless  Administrative  Agent shall have  received  notice from Company
prior to the date on which any payment is due  hereunder  that  Company will not
make  payment in full,  Administrative  Agent may assume that such payment is so
made on such date and may, in reliance upon such assumption,  make distributions
to Lenders.  If and to the extent  Company  shall not have made such  payment in
full,  each Lender shall repay to  Administrative  Agent forthwith on demand the
applicable  amount  distributed,  together with interest  thereon at the Federal
Funds Rate, from the date of distribution  until the date of repayment.  Company
hereby authorizes each Lender, if and to the extent payment is not made when due
hereunder,  to charge the amount so due against any account of Company with such
Lender.

     (c) Subject to SECTION 9.8 hereof, interest on Advances, the Commitment Fee
and other  amounts due under the Loan Papers shall be calculated on the basis of
actual days  elapsed but computed as if each year  consisted  of 360 days.  Such
computations  shall be made  including  the first day but excluding the last day
occurring in the period for which such  interest,  payment or Commitment  Fee is
payable.  Each determination by Administrative  Agent or a Lender of an interest
rate,  fee or  commission  hereunder  shall be  conclusive  and  binding for all
purposes, absent demonstrable error. All payments under the Loan Papers shall be
made in United  States  dollars,  and  without  setoff,  counterclaim,  or other
defense.

     (d) Reference to any particular index or reference rate for determining any
applicable interest rate under this Agreement is for purposes of calculating the
interest due and is not intended as and shall not be construed as requiring  any
Lender to actually fund any Advance at any particular index or reference rate.

     2.13 YIELD PROTECTION.

     (a) If any Lender  determines that either (i) the adoption,  after the date
hereof, of any Applicable Law, rule,  regulation or guideline  regarding capital
adequacy and applicable to commercial banks or financial  institutions generally
or  any  change  therein,  or  any  change,   after  the  date  hereof,  in  the
interpretation  or  administration  thereof  by any  Tribunal,  central  bank or
comparable agency charged with the interpretation or administration  thereof, or
(ii) compliance by any Lender (or Lending Office of any Lender) with any request
or  directive  made after the date  hereof  applicable  to  commercial  banks or
financial  institutions  generally  regarding  capital adequacy  (whether or not
having  the  force of law) of any such  authority,  central  bank or  comparable
agency has the effect of reducing the rate of return on such Lender's capital as
a  consequence  of its  

                                      -32-
<PAGE>
obligations  hereunder  to a level  below  that  which  such  Lender  could have
achieved but for such adoption,  change or compliance (taking into consideration
such  Lender's   policies  with  respect  to  capital  adequacy  (but  excluding
consequences  of such  Lender's  negligence or  intentional  disregard of law or
regulation)) by an amount reasonably deemed by such Lender to be material,  then
from time to time,  within  fifteen days after  demand by such  Lender,  Company
shall,  subject to SECTION 9.8 hereof, pay to such Lender such additional amount
or amounts as will adequately  compensate  such Lender for such reduction.  Each
Lender  will  notify  Company  of any  event  occurring  after  the date of this
Agreement  which will  entitle  such  Lender to  compensation  pursuant  to this
SECTION  2.13(A) as promptly as  practicable  after such Lender  obtains  actual
knowledge of such event;  PROVIDED, no Lender shall be liable for its failure or
the failure of any other Lender to provide such  notification.  A certificate of
such Lender claiming  compensation under this SECTION 2.13(A),  setting forth in
reasonable detail the calculation of the additional amount or amounts to be paid
to it hereunder and certifying  that such claim is consistent with such Lender's
treatment of similar  customers  having  similar  provisions  generally in their
agreements  with such Lender shall be conclusive in the absence of  demonstrable
error.  Each Lender  shall use  reasonable  efforts to mitigate  the effect upon
Company of any such  increased  costs  payable to such Lender under this SECTION
2.13(A).

     (b) If,  after  the  date  hereof,  any  Tribunal,  central  bank or  other
comparable  authority,  at any time imposes,  modifies or deems  applicable  any
reserve (including, without limitation, any imposed by the Board of Governors of
the Federal  Reserve  System),  special deposit or similar  requirement  against
assets  of,  deposits  with or for the  amount  of, or credit  extended  by, any
Lender, or imposes on any Lender any other condition  affecting a LIBOR Advance,
the Notes,  or its obligation to make a LIBOR Advance;  and the result of any of
the  foregoing is to increase  the cost to such Lender of making or  maintaining
its LIBOR Advances, or to reduce the amount of any sum received or receivable by
such Lender under this Agreement or under the Notes or reimbursement obligations
by an amount deemed by such Lender to be material,  THEN, within five days after
demand by such Lender, Company shall, subject to SECTION 9.8 hereof, pay to such
Lender such additional amount or amounts as will compensate such Lender for such
increased   cost  or  reduction.   Each  Lender  will  (i)  notify  Company  and
Administrative  Agent of any event  occurring  after the date of this  Agreement
that entitles such Lender to compensation  pursuant to this SECTION 2.13(B),  as
promptly as practicable after such Lender obtains actual knowledge of the event;
PROVIDED,  no Lender shall be liable for its failure or the failure of any other
Lender to  provide  such  notification  and (ii) use good  faith and  reasonable
efforts to  designate  a  different  Lending  Office for LIBOR  Advances of such
Lender if the designation  will avoid the need for, or reduce the amount of, the
compensation   and  will  not,  in  the  sole   opinion  of  such   Lender,   be
disadvantageous   to  such  Lender.   A  certificate  of  such  Lender  claiming
compensation under this SECTION 2.13(B),  setting forth in reasonable detail the
computation of the  additional  amount or amounts to be paid to it hereunder and
certifying that such claim is consistent with such Lender's treatment of similar
customers  having similar  provisions  generally in their  agreements  with such
Lender shall be conclusive in the absence of demonstrable  error. If such Lender
demands compensation under this SECTION 2.13(B),  Company may at any time, on at
least five Business Days' prior notice to such Lender (i) repay in full the then
outstanding  principal amount of LIBOR Advances,  of such Lender,  together with
accrued  interest  thereon,  or (ii)  convert  the LIBOR  Advances  to Base Rate
Advances in accordance with the 

                                      -33-
<PAGE>
provisions of this Agreement;  PROVIDED,  HOWEVER,  that Company shall be liable
for the Consequential Loss arising pursuant to those actions.

     (c)  Notwithstanding  any  other  provision  of  this  Agreement,   if  the
introduction of or any change in or in the  interpretation  or administration of
any Law shall make it  unlawful,  or any central  bank or other  Tribunal  shall
assert that it is unlawful, for a Lender to perform its obligations hereunder to
make LIBOR Advances or to continue to fund or maintain LIBOR Advances hereunder,
then, on notice thereof and demand therefor by such Lender to Company,  (i) each
LIBOR  Advance will  automatically,  upon such demand,  convert into a Base Rate
Advance and (ii) the  obligation of such Lender to make, or to convert  Advances
into,   LIBOR   Advances   shall  be  suspended   until  such  Lender   notifies
Administrative  Agent and  Company  that such  Lender  has  determined  that the
circumstances causing such suspension no longer exist.

     (d) Upon the occurrence and during the  continuance of any Default or Event
of Default,  (i) each LIBOR Advance will  automatically,  on the last day of the
then existing  Interest  Period  therefor,  convert into a Base Rate Advance and
(ii) the obligation of each Lender to make, or to convert  Advances into,  LIBOR
Advances shall be suspended.

     (e)  Failure  on the part of any  Lender  to  demand  compensation  for any
increased  costs,   increased  capital  or  reduction  in  amounts  received  or
receivable  or  reduction  in return on capital  pursuant to this  SECTION  2.13
(collectively,  "INCREASED  ADVANCE COSTS") with respect to any period shall not
constitute a waiver of any Lender's right to demand compensation with respect to
such period or any other period, subject,  however, to the limitations set forth
in this SECTION 2.13.  Notwithstanding  the foregoing,  any Lender's  demand for
Increased  Advance  Costs  shall not include any  Increased  Advance  Costs with
respect to any  period  more than two years  prior to the date that such  Lender
gives notice to Company of such  Increased  Advance  Costs unless the  effective
date of the condition  which results in the right to receive  Increased  Advance
Costs is retroactive (the "INCREASED ADVANCE COSTS RETROACTIVE EFFECTIVE DATE").
If any  Increased  Advance  Costs has an  Increased  Advance  Costs  Retroactive
Effective  Date and any Lender demands  compensation  within two years after the
date  setting  the  Increased  Advance  Costs  Retroactive  Effective  Date (the
"INCREASED ADVANCE COSTS SET DATE"), such Lender shall have the right to receive
such  Increased  Advance  Costs from the  Increased  Advance  Costs  Retroactive
Effective Date. If a Lender does not demand such Increased  Advance Costs within
two years  after the  Increased  Advance  Costs Set Date,  such  Lender  may not
receive payment of Increased  Advance Costs with respect to any period more than
two years prior to such demand.

     (f) The  obligations  of Company  under this SECTION 2.13 shall survive any
termination of this Agreement, subject, however, to the limitations set forth in
SECTION 2.13(E) above.

     (g)  Determinations  by Lenders for  purposes of this SECTION 2.13 shall be
conclusive, absent demonstrable error. Any certificate delivered to Company by a
Lender  pursuant to this SECTION  2.13 shall  include in  reasonable  detail the
basis for such Lender's demand for additional  compensation  and a certification
that the claim for  compensation is consistent  with such Lender's  

                                      -34-
<PAGE>
treatment of similar  customers  having  similar  provisions  generally in their
agreements with such Lender.

     (h) If any Lender  notifies  Administrative  Agent that, in its  reasonable
determination,  the LIBOR Rate for any  Interest  Period for any LIBOR  Advances
will not  adequately  reflect  the cost to such  Lender of  making,  funding  or
maintaining LIBOR Advances for such Interest Period,  Administrative Agent shall
promptly  so  notify  Company,  whereupon  (i)  each  such  LIBOR  Advance  will
automatically,  on the last day of the then existing  Interest Period  therefor,
convert into a Base Rate Advance and (ii) the obligation of such Lender to make,
or to convert Advances into, LIBOR Advances shall be suspended until such Lender
notifies   Administrative  Agent  that  such  Lender  has  determined  that  the
circumstances  causing such suspension no longer exist and Administrative  Agent
notifies Company of such fact.

     2.14 USE OF PROCEEDS.  The proceeds of the Advances shall be available (and
Company and its Subsidiaries shall use such proceeds) to (a) finance acquisition
of, and making loans secured by,  Property and (b) use for other general working
capital purposes.

     2.15 EXTENSION OPTION AND CONVERSION OPTION RELATING TO THE LOAN.

     (a) On the Option Date, Company,  with the prior written consent of Lenders
and so long as there exists no Default or Event of Default,  may elect to extend
the  maturity  of the Loan for an  additional  364 day  period  until  the Final
Maturity.  Such election must be made no sooner than 60 days prior to the Option
Date and no later  than 45 days prior to the  Option  Date by written  notice in
accordance with the terms of SECTION 9.2 hereof to each Lender of its request to
extend the final maturity of the Loan.  Each Lender shall, no later than 30 days
after receipt of such notice,  give written notice to Company and Administrative
Agent of its approval or  disapproval of such  extension.  Any Lender failing to
give notice shall be deemed to have not approved such extension. No Lender shall
be  obligated  to consent to such  extension.  If Company  fails to receive  the
consent of all Lenders to such  extension,  the  Commitment  shall be reduced to
zero on the Option Date.

     (b) On the  Option  Date,  Company,  so long as there  exists no Default or
Event of Default on such date of conversion,  shall have the option (which shall
not require the consent of any Lender) to convert the Loan to a term loan.  Such
election  must be made no sooner than 60 days prior to the Option  Date,  and no
later than 45 days prior to the Option  Date,  by written  notice in  accordance
with the terms of SECTION 11.2 hereof to each Lender of such  conversion.  Prior
to such  conversion,  Company shall execute and deliver new promissory  notes to
each Lender in the form required by  Administrative  Agent. Upon such notice and
receipt by Lenders of the new  promissory  notes,  the Loan shall  automatically
convert  to a term  loan on the  Option  Date  which  shall  mature on the Final
Maturity  and no  scheduled  payments  of  principal  of  Advances  (other  than
Refinancing Advances) shall be required to be made prior to the Final Maturity.

                                      -35-
<PAGE>
     2.16 COMMITMENT INCREASE.

     (a)  During the term of this  Agreement,  Company  may,  from time to time,
request an increase in the  Commitment to an amount not to exceed  $100,000,000.
Such increase in the  Commitment  may be effected by any  combination of Lenders
and new creditors.  No Lender shall be required to participate,  but each Lender
expressly agrees and acknowledges that upon establishment of the increase in the
Commitment,  regardless  of  whether  the  Lender  has  agreed to  increase  its
participation   in  the  Advances  by  participating  in  the  increase  in  the
Commitment,  Administrative  Agent  shall  reallocate  the  Advances so that all
Lenders  will have a pro rata  portion of each  Advance  based on the  Specified
Percentages as adjusted to give effect to the increase in the Commitment.

     (b) On the  date  of any  proposed  increase  in the  Commitment,  (i)  the
representations and warranties  contained in ARTICLE IV hereof shall be true and
correct on such date,  as though made on and as of such date and (ii) no Default
or Event of Default  shall exist and no Default or Event of Default would result
from such increase in the Commitment.

     (c) For any increase from time to time of the Commitment,  Company and such
Lenders  (including the new lenders)  shall have agreed to an up-front  facility
fee for each such increase,  such fees to be negotiated at the time of each such
increase,  which  such  fees  shall  be  paid  prior  to or on the  date of such
increase.

     (d)  Notwithstanding  anything  herein  or in any other  Loan  Paper to the
contrary,  Company and  Administrative  Agent may agree to add other  lenders in
connection with any proposed increase to the Commitment.

     (e) With respect to each increase to the Commitment,  Administrative  Agent
shall  have  received a  certificate  from  Company to the effect  that (i) such
increase  has  received  all  regulatory  approvals,  if  necessary,  and  is in
compliance  with all Applicable  Laws,  (ii) no other approvals or consents from
any Person are  required by any such Person  except to the extent they have been
received and (iii) such increase in the  Commitment  does not conflict  with, or
result in violation  of, any  agreement or instrument to which Company or any of
its Subsidiaries, or any of their respective Properties, is subject.

     (f) With respect to each increase to the Commitment,  Administrative  Agent
and each Lender (including any new Lenders party hereto) shall have received new
Notes  evidencing  any  increase in the  Commitment,  and  Company,  each of its
Subsidiaries, each Lender and each new Lender agrees to execute any and all such
documents deemed reasonably necessary by Administrative Agent to effectuate this
SECTION 2.16 (whether affirmation of guaranties, other documents or otherwise).

     (g) Promptly  after any increase in the  Commitment,  Administrative  Agent
shall deliver to each Lender evidence of new Specified Percentages,  adjusted to
give effect to any increase in the 

                                      -36-
<PAGE>
Commitment,  and any  reallocation  required  in order for each Lender to have a
proportionate part of the Loan.

     (h) With  respect to each  increase to the  Commitment,  on or prior to the
date of such increase, each new Lender being added to the Facility shall deliver
to Company and Administrative  Agent documentation  acceptable to Administrative
Agent  evidencing  such new Lender's  acceptance of this Agreement and all other
Loan Papers in form and substance reasonably  acceptable to Administrative Agent
(and making such Lender a party to this Agreement and the other Loan Papers).

     (i) With respect to each  increase to the  Commitment,  on the date of such
increase,  Administrative  Agent shall deliver to Company  notice of the cost of
any LIBOR  breakage  or other  Consequential  Loss  incurred  by any Lender as a
result of such increase and any  reallocation  among Lenders,  and Company shall
pay such costs on the date of such increase in  immediately  available  funds to
Administrative Agent on behalf of such Lenders.

                                  ARTICLE III.

                              CONDITIONS PRECEDENT

     3.1  CONDITIONS  PRECEDENT TO THE INITIAL ADVANCE.  The obligations of each
Lender  under  this  Agreement  and the  obligation  of each  Lender to make the
Initial Advance shall be subject to the following  conditions  precedent that on
the Closing Date:

     (a) All  terms,  conditions  and  documentation  in  connection  with  this
Agreement shall be acceptable to Lenders.

     (b) The making of the Commitment shall not contravene any Law applicable to
Administrative Agent or any Lender.

     (c) Each  Lender  shall have  received  a  Certificate  from an  Authorized
Officer  stating  that no  material  adverse  change  in the  business,  assets,
prospects,  or  financial  condition of Company and its  Subsidiaries  since the
December 31, 1997 financial statements provided to Lenders. Administrative Agent
shall have received financial  information regarding Company and each Subsidiary
of Company requested by it.

     (d) Each Lender shall have received an executed copy of this  Agreement and
its respective  Note,  duly  completed and correct.  Lenders shall have received
copies  of the  Fee  Letters  signed  by  Company,  as  applicable.  Each of the
following  shall  have  been  delivered  to  Administrative  Agent on  behalf of
Lenders,  in form and substance  satisfactory to Administrative  Agent,  Special
Counsel and each Lender. The Guaranty Agreement executed by each Guarantor and a
Subordination Agreement executed by each payee of an Intercompany Note.

                                      -37-
<PAGE>
     (e) Company shall have  delivered to  Administrative  Agent a  Certificate,
dated the Closing Date, executed by an Authorized  Officer,  certifying that, to
such  Authorized  Officer's  knowledge,  (i) no Default or Event of Default  has
occurred and is continuing, (ii) the representations and warranties set forth in
ARTICLE  IV hereof  are true and  correct in all  material  respects,  and (iii)
Company and each  Subsidiary  of Company has complied  with all  agreements  and
conditions  to be complied  with by it in all material  respects  under the Loan
Papers by such date.

     (f) Company and each Guarantor shall have each delivered to  Administrative
Agent on behalf of Lenders a  Secretary's  Certificate,  dated the Closing Date,
certifying  (i)  that  attached  copies  of  the  certificates  of  organization
certified by the Secretary of States of the appropriate  states,  and bylaws are
true and complete,  and in full force and effect,  without  amendment  except as
shown,  and  (ii)  that a copy  of the  resolutions  authorizing  execution  and
delivery of this  Agreement and any Loan Papers,  as  appropriate,  are true and
complete,  and that such  resolutions  are in full force and  effect,  were duly
adopted,  have not been  amended,  modified,  or  revoked,  and  constitute  all
resolutions adopted with respect to this loan transaction.  Administrative Agent
and Lenders may conclusively rely on the certificate  delivered pursuant to this
subsection until they receive notice in writing to the contrary.

     (g)  Administrative  Agent  shall have  received  an opinion or opinions of
counsel to Company and its Subsidiaries,  dated the Closing Date,  acceptable to
Lenders and otherwise in form and substance  satisfactory to Lenders and Special
Counsel, with respect to this loan transaction and otherwise, including, without
limitation,  opinions  (i) to the valid and binding  nature of the Loan  Papers,
(ii) to the power, authorization and corporate matters of each such Person taken
in connection with the transactions  contemplated by the Loan Papers, (iii) that
the  execution,  delivery and  performance  by Company and the  Subsidiaries  of
Company of the  respective  Loan  Papers  does not  violate  any of the terms of
Company's or any such Subsidiary's agreements, and (iv) to such other matters as
are reasonably requested by Special Counsel.

     (h) Administrative Agent shall have received, on behalf of Lenders, each of
the following,  in form and substance  satisfactory to Administrative  Agent and
Special Counsel:

         (i) evidence that all proceedings of Company and its Subsidiaries taken
     in connection with the transactions contemplated by this Agreement shall be
     reasonably  satisfactory  in form and  substance  to  Lenders  and  Special
     Counsel;  and each Lender shall have  received  copies of all  documents or
     other evidence which Lenders or Special  Counsel may reasonably  request in
     connection with this facility, including without limitation the resolutions
     of the Board of Directors of Company and each Subsidiary, and the requisite
     authorizations of all other Persons necessary to authorize the transactions
     contemplated  herein,  certified  to be true and  correct by an  Authorized
     Officer;

        (ii)  payment  of all  fees,  costs  and  expenses  (including,  without
     limitation, attorneys' fees of Special Counsel due to be paid on or through
     the Closing Date); and

                                      -38-
<PAGE>
       (iii) a  Compliance  Certificate  computed  after  giving  effect  to the
     Initial Advance.

     (i) All  corporate  proceedings  of Company and its  Subsidiaries  taken in
connection  with  the  transactions   contemplated  hereby,  and  all  documents
incidental thereto,  shall be satisfactory in form and substance to each Lender.
Administrative Agent and each Lender shall have received copies of all documents
or other  evidence  that it may  reasonably  request  in  connection  with  such
transactions.

     3.2  CONDITIONS PRECEDENT TO ALL ADVANCES. The obligation of each Lender to
make each  Advance  (including  the  Initial  Advance)  shall be  subject to the
further conditions  precedent that on the date of such Advance (a) the following
statements  shall be true  (and the  delivery  of each  Borrowing  Notice  under
SECTION 2.2(A),  each  Application  and each  Conversion or Continuation  Notice
under SECTION  2.9(B),  or the failure to deliver a Conversion  or  Continuation
Notice under  SECTION  2.9(B)  shall  constitute  a  representation  that on the
disbursement date (except as to  representations  and warranties which (i) refer
to a specific date, (ii) have been modified by transactions  permitted  pursuant
to this Agreement or any other Loan Paper or (iii) have been specifically waived
by  Administrative  Agent, to the extent permitted  pursuant to SECTION 9.1) are
true:

          (i) The representations and warranties  contained in ARTICLE IV hereof
     are true and correct on such date, as though made on and as of such date;

         (ii) No event has occurred and is continuing, or would result from such
     Advance  (including  the  intended  application  of the  proceeds  of  such
     Advance), that does or could constitute a Default or Event of Default; and

        (iii) There  shall have  occurred no Material  Adverse  Change,  and the
     making of such  Advance,  shall not cause or result in a  Material  Adverse
     Change;

         (iv)  After  giving  effect  to  each  such   Advance,   the  aggregate
     outstanding Advances do not exceed the Commitment; and

          (v) The Unused  Commitment  (as defined in the  Amended  and  Restated
     Credit  Agreement)  of each lender  under the Amended and  Restated  Credit
     Agreement is zero;

and  (b)  Administrative  Agent  shall  have  received,  in form  and  substance
acceptable to it, such other approvals, documents,  certificates,  opinions, and
information as it may deem necessary or appropriate.

                                      -39-
<PAGE>
                                   ARTICLE IV.

                         REPRESENTATIONS AND WARRANTIES

     Company represents and warrants that the following are true and correct:

     4.1  ORGANIZATION AND  QUALIFICATION.  Company and each of its Subsidiaries
is a corporation duly organized,  validly  existing,  and in good standing under
the Laws of its state of incorporation.  Company and each of its Subsidiaries is
qualified to do business in all  jurisdictions  where the nature of its business
or Properties require such qualification, except where the failure to so qualify
could not reasonably be expected to have a Material Adverse Effect. Set forth on
SCHEDULE 4.1 attached hereto is a complete and accurate  listing with respect to
Company  and  each of its  Subsidiaries,  showing  (a) the  jurisdiction  of its
organization and its mailing  address,  which is the principal place of business
and executive  offices of each unless  otherwise  indicated,  (b) the classes of
Capital Stock and shares of Capital Stock issued and  outstanding in Company and
each of its Subsidiaries, and the numbers or amounts of Capital Stock authorized
and outstanding of Company and each of its Subsidiaries, and (c) each record and
beneficial owner of outstanding Capital Stock on the date hereof, indicating the
ownership  percentage  (provided  that,  with  Administrative  Agent's  consent,
SCHEDULE 4.1 need only set forth each record and beneficial  owner of 1% or more
of Capital Stock of Company  based on the most current  records of Company prior
to the Closing Date).  All Capital Stock of Company and each of its Subsidiaries
is  validly  issued and fully paid and has been  issued in  compliance  with all
requirements  of  Applicable  Law.  No share of Capital  Stock of Company or any
Subsidiary  of Company is subject to any Lien,  including  any  restrictions  on
hypothecation or transfer.

     4.2 DUE  AUTHORIZATION;  VALIDITY.  The board of  directors of Company and
each  Subsidiary of Company have duly  authorized the execution,  delivery,  and
performance of the Loan Papers to be executed by Company and each  Subsidiary of
Company,  as appropriate.  Company and each Subsidiary of Company has full legal
right,  power,  and  authority to execute,  deliver,  and perform under the Loan
Papers to be executed and delivered by it. The Loan Papers constitute the legal,
valid,  and binding  obligations of Company and each  Subsidiary of Company,  as
appropriate,   enforceable  in  accordance  with  their  terms  (subject  as  to
enforcement of remedies to any applicable Debtor Relief Laws).

     4.3 CONFLICTING AGREEMENTS AND OTHER MATTERS. The execution or delivery of
any Loan Papers, and performance  thereunder,  does not conflict with, or result
in a breach of the terms, conditions,  or provisions of, or constitute a default
under,  or result in any  violation  of, or result in the  creation  of any Lien
(other than in favor of Administrative  Agent) upon any Properties of Company or
any  Subsidiary of Company  under,  or require any consent,  approval,  or other
action by,  notice to, or filing with,  any Tribunal or Person  pursuant to, the
certificate of  incorporation or bylaws of Company or any Subsidiary of Company,
any  award of any  arbitrator,  or any  agreement,  

                                      -40-
<PAGE>
instrument,  or Law to which  Company or any  Subsidiary  of Company,  or any of
their Properties is subject.

     4.4   FINANCIAL  STATEMENTS.  The  financial  statements of Company and its
Consolidated   Subsidiaries,   dated   September   30,  1998  and  delivered  to
Administrative  Agent, fairly present its financial condition and the results of
operations as of the dates and for the periods  shown,  all in  accordance  with
GAAP. Such financial  statements  reflect all material  liabilities,  direct and
contingent, of Company and its Consolidated Subsidiaries that are required to be
disclosed in accordance with GAAP. As of the date of such financial  statements,
there  were  no  Contingent  Liabilities,  liabilities  for  Taxes,  forward  or
long-term commitments,  or unrealized or anticipated losses from any unfavorable
commitments  that are  substantial  in amount and that are not reflected on such
financial statements or otherwise disclosed in writing to Administrative  Agent.
Since September 30, 1998, there has been no Material Adverse Change. Company and
each Subsidiary of Company is Solvent. The projections of Company dated December
1998  delivered  to  Administrative  Agent  were  prepared  in  good  faith  and
management  believes them to be based on reasonable  assumptions  (each of which
are stated in such  statement) and to provide  reasonable  estimations of future
performance  as of the  dates and for the  periods  shown  for  Company  and its
Subsidiaries,  subject to the  uncertainty  and  approximation  inherent  in any
projections. Company's fiscal year ends on December 31.

     4.5  LITIGATION.  As of the Closing Date, SCHEDULE 4.5 lists all Litigation
that is pending,  and to Company's best knowledge,  threatened by written demand
against Company or any of its  Subsidiaries or any of their Properties or assets
on the Closing Date in which an adverse determination with respect thereto could
reasonably be expected to result in an uninsured  liability of Company or any of
its  Subsidiaries  in excess of $500,000.  Except as set forth on SCHEDULE  4.5,
there is no pending  or, to  Company's  best  knowledge,  threatened  Litigation
against Company, any Subsidiary of Company or any of their respective Properties
that could reasonably be expected to result in a Material Adverse Change.

     4.6   COMPLIANCE WITH LAWS  REGULATING THE INCURRENCE OF  INDEBTEDNESS.  No
proceeds  of any Advance  will be used  directly  or  indirectly  to acquire any
security  in any  transaction  which is  subject  to  Sections  13 and 14 of the
Securities  Exchange  Act of  1934,  as  amended.  Company  is  not,  nor is any
Subsidiary  of  Company,  engaged in the  business of  extending  credit for the
purpose of purchasing or carrying margin stock (within the meaning of Regulation
U issued  by the Board of  Governors  of the  Federal  Reserve  System),  and no
proceeds of any Advance will be used to purchase or carry any margin stock or to
extend  credit to others for the purpose of  purchasing  or carrying  any margin
stock.  Following  Company's  intended use of the proceeds of each Advance,  not
more  than 25% of the value of the  assets of  Company  will be  "MARGIN  STOCK"
within the meaning of Regulation  U. Company is not subject to regulation  under
the Public  Utility  Holding  Company Act of 1935,  the Federal  Power Act,  the
Investment  Company  Act of 1940,  the  Interstate  Commerce  Act (as any of the
preceding  acts have been  amended),  or any  other  Law that the  incurring  of
Indebtedness  by  Company  would  violate,  including  without  limitation  Laws
relating to common or contract carriers or the sale of electricity,  gas, steam,
water, or other public utility services.

                                      -41-
<PAGE>
     4.7  AUTHORIZATIONS,  TITLE TO PROPERTIES, AND RELATED MATTERS. Company and
each  Subsidiary of Company  possess all material  Authorizations  necessary and
appropriate to own and operate their businesses and are not in violation thereof
in any material respect.  All such  Authorizations are in full force and effect,
and no event has occurred that  permits,  or after notice or lapse of time could
permit, the revocation,  termination or material and adverse modification of any
such Authorization,  except those which in the aggregate could not reasonably be
expected to cause a Material  Adverse  Change.  Company and each  Subsidiary  of
Company has requisite corporate power (as applicable) and legal right to own and
operate its Property and to conduct its business. Each has good and indefeasible
title (fee or leasehold,  as applicable) to its Property,  subject to no Lien of
any kind,  except  Permitted Liens and first Liens for the benefit of Company or
any Subsidiary of Company.  Neither  Company nor any Subsidiary of Company is in
violation of its respective certificates or articles of incorporation or bylaws.
Neither  Company nor any  Subsidiary  of Company is in  violation of any Law, or
material  agreement  or  instrument  binding  on or  affecting  it or any of its
Properties, the effect of which could reasonably be expected to cause a Material
Adverse  Change.  No  business or  Properties  of Company or any  Subsidiary  of
Company is affected by any drought,  storm,  earthquake,  embargo, act of God or
public  enemy,  or other  casualty,  the  effect of which  could  reasonably  be
expected to cause a Material Adverse Change.

     4.8   OUTSTANDING  DEBT AND LIENS.  Company  and its  Subsidiaries  have no
outstanding  Debt,  Contingent  Liabilities or Liens,  except  Permitted  Liens,
except as shown on SCHEDULE 4.8 hereto.  No breach,  default or event of default
exists  under any  document,  instrument  or agreement  evidencing  or otherwise
relating  to any  Indebtedness  of  Company  or any  of  its  Subsidiaries.  All
Intercompany Notes are subject to a Subordination Agreement.

     4.9  TAXES.  Company and each  Subsidiary of Company has filed all federal,
state, and other Tax returns (or extensions  related thereto) which are required
to be  filed,  and has paid all Taxes as shown on said  returns,  as well as all
other  Taxes,  to the extent due and  payable,  except to the extent  payment is
contested in good faith and for which  adequate  reserves have been  established
therefor  in  accordance  with GAAP.  All Tax  liabilities  of Company  and each
Subsidiary  of Company  are  adequately  provided  for on its  books,  including
interest and penalties,  and adequate reserves have been established therefor in
accordance  with GAAP.  No income Tax  liability  of a material  nature has been
asserted by taxing authorities for Taxes in excess of those already paid, and no
taxing  authority  has  notified  Company  or any  Subsidiary  of Company of any
deficiency in any Tax return.

     4.10  ERISA.  Each Plan of  Company  and each  Subsidiary  of  Company  has
satisfied the minimum funding standards under all Laws applicable  thereto,  and
no Plan has an accumulated funding deficiency  thereunder.  Company has not, and
neither has  Subsidiary of Company  incurred any material  liability to the PBGC
with respect to any Plan.  No ERISA Event has occurred  with respect to any Plan
for which an  Insufficiency  in excess  of  $100,000  exists on the date of such
occurrence.  Neither  Company nor any ERISA  Affiliate has  participated  in any
non-exempt  Prohibited  Transaction  with  respect to any Plan or trust  created
thereunder.  Neither Company nor any ERISA Affiliate has incurred any Withdrawal
Liability to any Multiemployer Plan that has not 

                                      -42-
<PAGE>
been satisfied. Neither Company nor any ERISA Affiliate has been notified by the
sponsor  of  a   Multiemployer   Plan  that  such   Multiemployer   Plan  is  in
reorganization or has been terminated, within the meaning of Title IV of ERISA.

     4.11 ENVIRONMENTAL LAWS. Company and Subsidiary of Company has obtained all
material  environmental,  health and safety  Authorizations  required  under all
applicable  Environmental  Laws to carry  on its  business  as being  conducted,
except where the failure to obtain such  Authorizations  could not reasonably be
expected to have a Material  Adverse Effect.  On the Closing Date,  there are no
environmental  liabilities of Company or any Subsidiary of Company (with respect
to any fee owned  Properties)  which  could  reasonably  be  expected  to have a
Material Adverse Effect, except as disclosed and described in detail on SCHEDULE
4.11 hereto. Each of such Authorizations is in full force and effect and Company
and each  Subsidiary of Company is in compliance  with the terms and  conditions
thereof,  and is also in compliance  with all other  limitations,  restrictions,
conditions, standards,  prohibitions,  requirements,  obligations, schedules and
timetables  contained in any applicable  Environmental Law or in any regulation,
code, plan, order, decree, judgment, injunction, notice or demand letter issued,
entered, promulgated or approved thereunder, except to the extent the failure to
have such  Authorizations or comply with any of the terms and conditions thereof
could not reasonably be expected to have a Material Adverse Effect. In addition,
no written notice,  notification,  demand,  request for  information,  citation,
summons  or order has been  issued,  no written  complaint  has been  filed,  no
penalty has been assessed and no  investigation  or review is pending or, to the
best  knowledge of Company,  or any  Subsidiary of Company,  threatened,  by any
Tribunal or other entity with  respect to any alleged  failure by Company or any
Subsidiary of Company to have any environmental,  health or safety Authorization
required under any applicable  Environmental  Law in connection with the conduct
of the business of Company or any  Subsidiary  of Company or with respect to any
generation, treatment, storage, recycling,  transportation,  discharge, disposal
or release of any Hazardous  Materials by Company or any  Subsidiary of Company,
the effect of which could  reasonably  be  expected  to have a Material  Adverse
Effect.  There are no environmental  liabilities of Company or any Subsidiary of
Company which could  reasonably be expected to cause a Material  Adverse Change.
Mortgagors  in  respect  of  Funded  Mortgages  and  Tenants  under  Leases  are
contractually (i) prohibited from generating or producing Hazardous Materials at
or in  connection  with the  Properties  of  Company  and its  Subsidiaries  and
disposing  of any  Hazardous  Materials  on or to any Property of Company or any
Subsidiary of Company,  except in compliance with applicable  Environmental Laws
or (ii)  obligated  to  maintain  and occupy the  Properties  of Company and its
Subsidiaries in compliance with all applicable Laws.

     4.12  DISCLOSURE.  Neither Company nor any Subsidiary of Company has made a
material  misstatement of fact, or failed to disclose any fact necessary to make
the facts disclosed not misleading,  in light of the  circumstances  under which
they were  made,  to  Administrative  Agent or any  Lender  during the course of
application  for and  negotiation  of any Loan Papers or otherwise in connection
with any  Advances.  There is no fact  known to  Company  or any  Subsidiary  of
Company that materially  adversely affects any of Company's or any Subsidiary of
Company's  Properties or business,  or that could  constitute a Material Adverse
Change, and that has not been set forth in the Loan Papers or in other documents
furnished to Administrative Agent.

                                      -43-
<PAGE>
     4.13  INVESTMENTS;  SUBSIDIARIES.  Company  and  its  Subsidiaries  have no
Investments  except as  described  on SCHEDULE  4.13 hereto and as  permitted by
SECTION 6.10 hereof. SCHEDULE 4.13 is a complete and accurate listing of Company
and  each  Subsidiary  of  Company,  showing  (a)  its  complete  name,  (b) its
jurisdiction of organization,  (c) its capital structure, and (d) its street and
mailing address, which is its principal place of business and executive office.

     4.14 CERTAIN FEES. No broker's,  finder's,  management  fee or other fee or
commission  will be payable by Company with respect to the making of  Commitment
or  Advances   hereunder  (other  than  to  Administrative   Agent  and  Lenders
hereunder),  or the offering,  issuance or sale of the Capital Stock of Company.
Company and each  Subsidiary  of Company  hereby  agrees to  indemnify  and hold
harmless  Administrative  Agent and each  Lender  from and  against  any claims,
demand,  liability,  proceedings,  costs or expenses asserted with respect to or
arising in connection with any such fees or commissions.

     4.15  INTELLECTUAL  PROPERTY.  Company and each  Subsidiary  of Company has
obtained  all  patents,  trademarks,  service-marks,  trade  names,  copyrights,
licenses and other rights, free from material restrictions,  which are necessary
for the operation of their respective  businesses as presently  conducted and as
proposed to be conducted.

     4.16 INVESTMENT COMPANY ACT. Neither Company nor any of its Subsidiaries is
an "investment  company",  "promoter",  "principal  under" or "controlled by" an
"investment company",  within the meaning of the Investment Company Act of 1940,
as  amended.  The making of the  Advances  by Lenders,  the  application  of the
proceeds  and  repayment   thereof  by  Company  and  the  consummation  of  the
transactions  contemplated  by the Loan  Papers will not violate any such Act or
any rule,  regulation or order thereunder  issued by the Securities and Exchange
Commission.

     4.17 RESTRICTED  PAYMENTS.  Neither Company nor any of its Subsidiaries has
made any Restricted  Payment during the period from and including  September 30,
1997 through and including the Closing Date.

     4.18 STATUS AS A REAL ESTATE INVESTMENT  TRUST.  Company (i) has elected to
be treated as and is qualified as a Real Estate  Investment  Trust, (ii) has not
revoked  its  election  to be a Real  Estate  Investment  Trust,  (iii) for each
taxable year, has satisfied the  requirements  of Section  856(c)(4) of the Code
and (iv) for its  current  "tax  year" (as  defined  in the Code) is and for all
prior tax years subsequent to its election as a Real Estate Investment Trust has
been entitled to a dividends  paid  deduction  which meets the  requirements  of
Section 857 of the Code.

     4.19 COMMON  ENTERPRISE.  Company and its  Subsidiaries  are engaged in the
businesses set forth in SECTION 6.8 hereof.  These operations  require financing
on a basis such that the credit  supplied  can be made  available to Company and
its Subsidiaries,  as required for the continued successful operation of Company
and its  Subsidiaries,  taken as a whole.  Company and each of its  Subsidiaries
expects  to derive  benefit  (and the Board of  Directors  of  Company  and each
Subsidiary 

                                      -44-
<PAGE>
of Company has  determined  that such  Subsidiary  may reasonably be expected to
derive  benefit),  directly or indirectly,  from the credit  extended by Lenders
hereunder,  both in its  separate  capacity  and as a  member  of the  group  of
companies,  since the successful  operation and condition of Company and each of
its  Subsidiaries  is dependent on the continued  successful  performance of the
function of the group as a whole.

     4.20 SURVIVAL OF REPRESENTATIONS  AND WARRANTIES,  ETC All  representations
and warranties made under this Agreement shall be deemed to be made at and as of
the Closing  Date and at and as of the date of each  Advance,  and each shall be
true and correct  when made,  except to the extent (a)  previously  fulfilled in
accordance  with  the  terms  hereof,  (b)  subsequently  inapplicable,  or  (c)
previously waived in writing by Administrative Agent and Lenders with respect to
any particular factual  circumstance.  The  representations  and warranties made
under this  Agreement  shall be deemed  applicable to each  Subsidiary as of the
formation  or  acquisition  of such  Subsidiary  and at and as of each  date the
representations  and  warranties  are remade  pursuant  to this  provision.  All
representations and warranties made under this Agreement shall survive,  and not
be waived by, the  execution  hereof by  Administrative  Agent and Lenders,  any
investigation or inquiry by Administrative Agent or any Lender, or by the making
of any Advance under this Agreement.

     4.21  YEAR  2000  COMPLIANCE.  Company  has  (a)  initiated  a  review  and
assessment  of all areas within its and each of its  Subsidiaries'  business and
operations (including those affected by its suppliers and vendors) that could be
adversely  affected by the "Year 2000 Problem"  (that is, the risk that computer
applications  used by Company or any of its  Subsidiaries  (or its suppliers and
vendors)  may  be  unable  to  recognize  and  perform  properly  date-sensitive
functions  involving  certain  dates  prior to and any date after  December  31,
1999), (b) developed a plan and timeline for addressing the Year 2000 Problem on
a timely basis,  and (c) to date,  implemented that plan in accordance with that
timetable. Company reasonably believes that all computer applications (including
those of its  suppliers  and  vendors)  that are  material  to its or any of its
Subsidiaries'  business and operations will on a timely basis be able to perform
properly date-sensitive functions for all dates before and after January 1, 2000
(that is, be "YEAR 2000  COMPLIANT"),  except to the extent that a failure to do
so could not reasonably be expected to have a Material Adverse Effect.

                                   ARTICLE V.

                              AFFIRMATIVE COVENANTS

     So long as the Commitment, any Advance or any portion of the Obligations is
outstanding,  or  Company  or any of its  Subsidiaries  owes  any  other  amount
hereunder or under any other Loan Paper:

     5.1   COMPLIANCE  WITH LAWS AND PAYMENT OF DEBT.  Company shall,  and shall
cause each Subsidiary of Company to, comply with all Applicable Laws,  including
without  limitation  compliance with ERISA and all applicable  federal and state
securities Laws. Company shall, and 

                                      -45-
<PAGE>
shall cause each of its  Subsidiaries  to, pay its  Indebtedness as and when due
(or within any applicable grace period).

     5.2  INSURANCE. Company (a) shall cause, and shall cause each Subsidiary of
Company to cause,  the Tenants  under  Leases and the  Mortgagors  under  Funded
Mortgages  to keep the  Properties  of Company and its  Subsidiaries  adequately
insured at all times by  reputable  insurers  to such  extent and  against  such
risks,  including fire and other risks insured against by extended coverage,  as
what is customary with companies  similarly  situated and in the same or similar
businesses,  (b) shall,  and shall cause each Subsidiary of Company to, maintain
in full force and effect public liability (including liability insurance for all
vehicles and other insurable Property) and worker's compensation  insurance,  in
amounts  customary for such similar companies to cover normal risks, by insurers
satisfactory to  Administrative  Agent,  and (c) Company shall,  and shall cause
each  Subsidiary of Company to,  maintain other  insurance as may be required by
Law or reasonably requested by Administrative  Agent. Company shall from time to
time  shall  deliver to  Administrative  Agent,  upon  demand,  evidence  of the
maintenance of such insurance.

     5.3  INSPECTION  RIGHTS.  Company shall, and shall cause each Subsidiary of
Company to, permit  Administrative  Agent or any Lender,  upon reasonable notice
(provided that no advance notice is required after the occurrence and during the
continuance of an Event of Default), to examine and make copies of and abstracts
from their records and books of account,  to visit and inspect their  Properties
and to  discuss  their  affairs,  finances,  and  accounts  with  any  of  their
directors,    officers,    employees,    accountants,    attorneys   and   other
representatives,  all as  Administrative  Agent  or any  Lender  may  reasonably
request.

     5.4   RECORDS AND BOOKS OF ACCOUNT;  CHANGES IN GAAP.  Company  shall,  and
shall  cause each of its  Subsidiaries  to keep  adequate  records  and books of
account in  conformity  with GAAP.  Company  shall make such  valuations  of its
assets as may be required by the terms of Section 856(c)(5) of the Code. Company
shall not, nor shall Company permit any of its Subsidiaries to change its Fiscal
Year, nor change its method of financial  accounting  except in accordance  with
GAAP.  In  connection  with any such change after the date  hereof,  Company and
Lenders shall  negotiate in good faith to make  appropriate  alterations  to the
covenants set forth in SECTION 6.1 hereof, reflecting such change.

     5.5   REPORTING  REQUIREMENTS.  Company  shall  furnish to each  Lender and
Administrative Agent:

     (a) As soon as  available  and in any event within 45 days after the end of
Company's  fiscal  quarters,  consolidated  balance  sheets of  Company  and its
Consolidated  Subsidiaries  as of the  end of  such  quarter,  and  consolidated
statements  of income,  and  consolidated  statements of changes in cash flow of
Company  and its  Consolidated  Subsidiaries  for the portion of the fiscal year
ending with such quarter,  setting forth, in comparative  form,  figures for the
corresponding periods in the previous fiscal year, all in reasonable detail, and
certified by an  Authorized  Officer as prepared in  

                                      -46-
<PAGE>
accordance with GAAP, and fairly presenting the financial  condition and results
of operations of Company and its Consolidated  Subsidiaries  (subject to normal,
year-end audit adjustments);

     (b) As soon as  available  and in any event within 90 days after the end of
each fiscal year,  consolidated  balance sheets of Company and its  Consolidated
Subsidiaries as of the end of such fiscal year, and  consolidated  statements of
income and changes in cash flow of Company and its Consolidated Subsidiaries for
such fiscal year, all in reasonable  detail,  prepared in accordance  with GAAP,
and  accompanied by an unqualified  opinion of the Auditor,  which opinion shall
state that such financial statements were prepared in accordance with GAAP, that
the examination by the Auditor in connection with such financial  statements was
made in accordance with generally  accepted  auditing  standards,  and that such
financial  statements  present  fairly the  financial  condition  and results of
operations of Company and its Consolidated Subsidiaries;

     (c)  Promptly  upon  receipt  thereof,  copies of all  material  reports or
letters  submitted to Company or any Subsidiary of Company by the Auditor or any
other  accountants  in connection  with any annual,  interim,  or special audit,
including  without  limitation  the comment  letter  submitted to  management in
connection with any such audit;

     (d) Together with each set of financial  statements  delivered  pursuant to
subsections  (a)  and  (b)  above,  a  Compliance  Certificate  executed  by  an
Authorized  Officer,  which such  Compliance  Certificate  must (i) certify that
there has occurred no Default or Event of Default,  (ii) compute the  Applicable
Margin,  (iii) set forth the detailed  calculations with respect to the SECTIONS
6.1(A),  (B),  (C),  (D),  (E),  6.3,  6.6 and 6.7 hereof and (iv)  certify that
Company continues to qualify as a Real Estate Investment Trust under the Code;

     (e) As soon as available  and in any event not later than 30 days after the
beginning  of each  fiscal  year of  Company,  the annual  operating  budgets of
Company and its Subsidiaries for such fiscal year;

     (f) Promptly upon  knowledge by Company of the occurrence of any Default or
Event of Default, a notice from an Authorized Officer, setting forth the details
of such  Default or Event of Default,  and the action being taken or proposed to
be taken with respect thereto;

     (g) As soon  possible  and in any event  within  five  Business  Days after
knowledge  thereof  by  Company  or  any  of  its  Subsidiaries,  notice  of any
Litigation  pending or threatened by written demand against Company,  any of its
Subsidiaries or any of their respective Property which, if determined adversely,
could  reasonably be expected to result in a judgment,  penalties,  or uninsured
liability  or damages in excess of  $1,000,000  together  with a statement of an
Authorized Officer describing the allegations of such Litigation, and the action
being taken or proposed to be taken with respect thereto;

     (h) Promptly following notice or knowledge thereof by Company or any of its
Subsidiaries,  notice of any actual or threatened  (which threat is evidenced in
writing)  loss or  

                                      -47-
<PAGE>
termination of any Authorization of Company or any such Subsidiary which if lost
or terminated  could  reasonably be expected to have a Material  Adverse Effect,
together with a statement of an Authorized  Officer describing the circumstances
surrounding  the same,  and the action  being taken or proposed to be taken with
respect thereto;

     (i)  Promptly  after filing or receipt  thereof,  copies of all reports and
notices that Company or any of its Subsidiaries (i) files or receives in respect
of any Plan with or from the Internal Revenue  Service,  the PBGC, or the United
States Department of Labor, or (ii) furnishes to or receives from any holders of
any Indebtedness or Contingent Liability,  if in either case, any information or
dispute  referred to therein  either  causes a Default or Event of  Default,  or
could  reasonably  be  expected  to cause or result in a Default  or an Event of
Default;

     (j)  Within 120 days after the close of each fiscal  year,  a statement  of
the  Insufficiencies  of each  Plan  (but  only if the  aggregate  amount of all
Insufficiencies  for all Plans  exceeds  $100,000),  certified  as correct by an
actuary enrolled under ERISA;

     (k)  As soon as possible and in any event  within 10 days after  Company or
any of its  Subsidiaries  knows  that any  Reportable  Event has  occurred  with
respect to any Plan, a statement,  signed by an Authorized  Officer,  describing
said Reportable Event and the action which the such Person proposes to take with
respect thereto;

     (l)  Promptly upon their  becoming  available,  copies of all  registration
statements  and regularly  provided  reports,  if any, filed by Company with the
Securities  and Exchange  Commission  (of any  governmental  agency  substituted
therefor) or any national securities exchange;

     (m)   Promptly  upon the  mailing  thereof to the  shareholders  of Company
generally,  copies of all financial statements,  reports and proxy statements so
mailed;

     (n)  As soon as  possible  and in any event  within 5 days after  Company's
knowledge thereof, written notice of any change in the Index Debt Rating; and

     (o)  From time to time,  such other  information  regarding  the  business,
affairs or  financial  condition  of Company or any of its  Subsidiaries  as any
Lender may reasonably request,  including  consolidating financial statements of
Company and its  Consolidated  Subsidiaries  pursuant to subsections (a) and (b)
above.

     5.6  USE OF PROCEEDS.  The proceeds of the Advances shall be available (and
Company  and  its   Subsidiaries   shall  use  such  proceeds)  to  (a)  finance
acquisitions  of, and making  loans  secured by,  Property and (b) use for other
general  working  capital  purposes;  provided  that no  Lender  shall  have any
responsibility  as to use by  Company  or any of its  Subsidiaries  of any  such
proceeds.

     5.7  MAINTENANCE OF EXISTENCE AND ASSETS. Except as provided by SECTION 6.7
of  this  Agreement,  Company  shall  maintain,  and  shall  cause  each  of its
Subsidiaries to maintain,  its 

                                      -48-
<PAGE>
corporate  existence,  authority to do business in the jurisdictions in which it
is  necessary  for  Company  or such  Subsidiary  of  Company  to do so, and all
Authorizations  necessary for the operation of any of their businesses.  Company
shall maintain, and shall cause each of its Subsidiaries to maintain, the assets
necessary for use in their respective  businesses in good repair,  working order
and condition,  and make all such repairs,  renewals and replacements thereof as
may be reasonably required by Company and its Subsidiaries.

     5.8  PAYMENT OF TAXES. Company will and will cause each of its Subsidiaries
to,  promptly pay and  discharge  all lawful  Taxes  imposed upon it or upon its
income or profit or upon any Property belonging to it, unless such Tax shall not
at the time be due and payable,  or if the validity  thereof shall  currently be
contested on a timely basis in good faith by appropriate  proceedings  (provided
that the  enforcement of any Liens arising out of any such  nonpayment  shall be
stayed or bonded during the proceedings)  and adequate  reserves with respect to
such Tax shall have been established in accordance with GAAP.

     5.9  INDEMNITY.

     (a)  Company  agrees  to  defend,  protect,  indemnify  and  hold  harmless
Administrative Agent and each Lender, each of their respective  Affiliates,  and
each of their  respective  (including  such  Affiliates')  officers,  directors,
employees, agents, attorneys,  shareholders and consultants (including,  without
limitation,  those  retained in connection  with the  satisfaction  or attempted
satisfaction of any of the conditions set forth herein) of each of the foregoing
(collectively,   "Indemnitees")  from  and  against  any  and  all  liabilities,
obligations,  losses, damages,  penalties,  actions,  judgments,  suits, claims,
costs,  expenses and disbursements of any kind or nature whatsoever  (including,
without  limitation,  the reasonable fees and  disbursements of counsel for such
Indemnitees in connection  with any  investigative,  administrative  or judicial
proceeding,  whether or not such Indemnitees shall be designated a party thereto
or such proceeding  shall have actually been  instituted),  imposed on, incurred
by,  or  asserted  against  such  Indemnitees   (whether  direct,   indirect  or
consequential  and  whether  based on any  federal,  state,  or  local  laws and
regulations,  under common law or at equitable  cause,  or on contract,  tort or
otherwise),  arising  from  or  connected  with  the  past,  present  or  future
operations of Company,  any  Subsidiary of Company,  any Affiliate of Company or
any  predecessors  in  interest,  or the past,  present or future  environmental
condition of property of Company,  any  Subsidiary of Company,  any Affiliate of
Company or any predecessors in interest, in each case relating to or arising out
of this Agreement,  the Loan Papers, or any act, event or transaction or alleged
act,  event or transaction  relating or attendant  thereto and the management of
the Advances by Administrative Agent, expressly including in connection with, or
as a  result,  in  whole or in  part,  of the  ordinary  or mere  negligence  of
Administrative  Agent or any Lender,  or the use or intended use of the proceeds
of the  Advances  hereunder,  or in  connection  with any  investigation  of any
potential  matter  covered  hereby,  but excluding any claim or liability to the
extent it arises as the result of the gross negligence or willful  misconduct of
any  Indemnitee,  as  finally  judicially  determined  by a court  of  competent
jurisdiction (collectively, "Indemnified Matters").

                                      -49-
<PAGE>
     (b) In addition,  Company shall periodically,  upon request, reimburse each
Indemnitee  for its  reasonable  legal  and  other  actual  reasonable  expenses
(including the cost of any investigation and preparation) incurred in connection
with any Indemnified Matter. If for any reason the foregoing  indemnification is
unavailable to any Indemnitee or  insufficient  to hold any Indemnitee  harmless
with respect to Indemnified Matters, then Company shall contribute to the amount
paid or payable by such  Indemnitee as a result of such loss,  claim,  damage or
liability in such  proportion as is appropriate to reflect not only the relative
benefits  received by Company and the holders of the Capital Stock of Company on
the one hand and such  Indemnitee on the other hand but also the relative  fault
of  Company  and  such  Indemnitee,  as well  as any  other  relevant  equitable
considerations. The reimbursement,  indemnity and contribution obligations under
this SECTION shall be in addition to any  liability  which Company may otherwise
have,  shall extend upon the same terms and conditions to each  Indemnitee,  and
shall be binding upon and inure to the benefit of any successors, assigns, heirs
and personal  representatives of Company,  Administrative Agent, Lenders and all
other  Indemnitees.  The  obligations  of Company  under this  SECTION 5.9 shall
survive (i) the  execution of this  Agreement and (ii) any  termination  of this
Agreement and payment of the Obligations.

     5.10 AUTHORIZATIONS AND MATERIAL AGREEMENTS. Company shall, and shall cause
its Subsidiaries to, obtain,  maintain and comply in all material  respects with
all  Authorizations  and agreements  necessary or appropriate for any of them to
own, maintain, or operate any of their businesses or Properties.

     5.11  INTERCOMPANY  NOTES.  Any portion of any Advance  under the  Facility
which is loaned by Company to any  Subsidiary  of Company  shall be evidenced by
Intercompany Notes in form and substance acceptable to Administrative Agent, and
there  shall  be  no  prohibition  on  the  ability  of  Company  to  pledge  to
Administrative  Agent  each such  Intercompany  Note.  Company  shall  cause all
Intercompany Notes to be subject to a Subordination Agreement.

     5.12  FURTHER  ASSURANCES.  Company  and each  Subsidiary  of Company  will
execute all such  additional  agreements and take any and all such other action,
as  Administrative  Agent may, from time to time, deem  reasonably  necessary or
proper in  connection  with the  obligations  of Company and each  Subsidiary of
Company under any of the Loan Papers.

     5.13  SUBSIDIARIES  AND OTHER  OBLIGORS.  Company  shall  cause each of its
Subsidiaries to comply with each provision of this ARTICLE V.

     5.14 INTEREST  HEDGE  AGREEMENTS.  Company shall maintain an Interest Hedge
Agreement or Agreements  such that,  after giving effect to such Interest  Hedge
Agreements,  at least  50% of the  aggregate  Indebtedness  of  Company  and its
Subsidiaries  outstanding  at any time is subject to a fixed  interest  rate per
annum for a term of at least two years.

                                      -50-
<PAGE>
     5.15 YEAR 2000 COMPLIANCE.  Company will promptly notify the Administrative
Agent in the event Company discovers or determines that any computer application
(including those of its suppliers and vendors) that is material to its or any of
its  Subsidiaries'  business  and  operations  will not be Year 2000  Compliant,
except to the extent that such failure could not  reasonably be expected to have
a Material Adverse Effect.

                                   ARTICLE VI.

                               NEGATIVE COVENANTS

     So long as the Commitment, any Advance or any portion of the Obligations is
outstanding,  or  Company  or any of its  Subsidiaries  owes  any  other  amount
hereunder or under any other Loan Paper:

     6.1  FINANCIAL COVENANTS.  Company and its Consolidated  Subsidiaries shall
comply with the following covenants:

     (a) MINIMUM NET WORTH. At all times during the term hereof, Net Worth shall
not be less than the sum of (i)  $425,000,000,  PLUS (ii) an amount equal to 75%
of the  aggregate  Net Cash  Proceeds  received by Company and its  Consolidated
Subsidiaries  after April 15, 1997 from the offering,  sale or other disposition
of Capital Stock of Company or any  Subsidiary of Company,  PLUS (iii) an amount
equal  to the net  worth  of any  Person  that  becomes  a  direct  or  indirect
Subsidiary  of Company or is merged  into or  consolidated  with  Company or any
Subsidiary of Company or  substantially  all of the assets of which are acquired
by Company or any  Subsidiary  of Company to the extent the purchase  price paid
therefor is paid in Capital Stock of Company or any of its Subsidiaries.

     (b) TOTAL  INDEBTEDNESS TO ADJUSTED NET WORTH. At all times during the term
hereof,  the ratio of Total  Indebtedness  to  Adjusted  Net Worth  shall not be
greater than 0.90 to 1.

     (c) FIXED CHARGE COVERAGE  RATIO. At all times during the term hereof,  the
Fixed Charge Coverage Ratio shall not be less than 2.0 to 1.

     (d)  MAXIMUM  TOTAL  SECURED  INDEBTEDNESS.  At all times  during  the term
hereof, the aggregate amount of Total Secured  Indebtedness shall not exceed 10%
of Total Assets.

     (e) TOTAL UNENCUMBERED ASSETS TO TOTAL UNSECURED INDEBTEDNESS. At all times
during  the  term  hereof,  the  ratio  of Total  Unencumbered  Assets  to Total
Unsecured Indebtedness shall not be less than 1.75 to 1.

     6.2   INDEBTEDNESS.  Company  shall  not,  and shall not  permit any of its
Subsidiaries  to, create,  incur,  assume,  become or be liable in any manner in
respect of, or suffer to exist, any 

                                      -51-
<PAGE>
Indebtedness, except (a) Indebtedness under the Loan Papers, (b) Indebtedness in
existence on the date hereof, as shown on SCHEDULE 4.8 hereto,  (c) Indebtedness
of a  Subsidiary  of Company to Company or to another  Subsidiary  of Company in
compliance with SECTION 6.17 hereof  evidenced by Intercompany  Notes evidencing
loans made by Company or such Subsidiary with the proceeds of Advances,  and (d)
other  Indebtedness,  provided that (i) immediately  prior thereto and after the
occurrence  thereof  there  shall be no Default or Event of Default and (ii) the
covenants,  terms and provisions with respect to such  Indebtedness  are no more
restrictive than the terms of this Agreement and the other Loan Papers.

     6.3  CONTINGENT LIABILITIES. Company shall not, and shall not permit any of
its Subsidiaries to, create, incur, assume, become or be liable in any manner in
respect  of,  or  suffer  to  exist,  any  Contingent  Liabilities,  except  (a)
Contingent  Liabilities under or relating to the Loan Papers (as defined in this
Agreement)  and the Loan Papers (as defined in the Amended and  Restated  Credit
Agreement),  (b)  Contingent  Liabilities  in existence on the Closing  Date, as
shown on SCHEDULE 4.8 hereto,  (c)  Contingent  Liabilities  resulting  from the
endorsement of negotiable  instruments  for collection in the ordinary course of
business,  (d) Contingent Liabilities in respect of Interest Hedge Agreements of
Company or any of its Subsidiaries,  and (e) other Contingent Liabilities not to
exceed $5,000,000 in aggregate principal amount.

     6.4  LIENS. Company shall not, and shall not permit any of its Subsidiaries
to,  create  or suffer  to exist  any Lien  upon any of its  Properties,  except
Permitted Liens. In case any Property shall be subject to a Lien in violation of
this  SECTION  6.4,  Company  or its  Subsidiary,  as the  case  may  be,  shall
immediately make or cause to be made provision whereby the Notes will be secured
equally and ratably with all other obligations  secured thereby pursuant to such
agreements and instruments as shall be approved by Majority Lenders, and in such
case the Notes shall have the benefit,  to the full extent  that,  and with such
priority as, Lenders may be entitled under  Applicable Law, of an equitable Lien
on such  Property  securing  the Notes.  Such  violation  of  SECTION  6.4 shall
constitute an Event of Default hereunder,  whether or not such provision is made
pursuant to the immediately preceding sentence.

     6.5   PROHIBITION  OF FUNDAMENTAL  CHANGES.  Company will not, and will not
cause or permit any of its  Subsidiaries to, enter into any transaction of sale,
transfer,  merger or  consolidation  or  amalgamation,  except  for sales in the
ordinary course of business, or liquidate, wind up or dissolve itself, or suffer
any liquidation or dissolution, except (a) for the liquidation or dissolution of
any  Subsidiary  and (b) a Subsidiary of Company may merge into, or  consolidate
with,  Company  (provided  Company is the  survivor)  or another  Subsidiary  of
Company.  Company will not, and will not cause or permit any of its Subsidiaries
to,  acquire any business or assets from,  or capital stock of, or be a party to
any acquisition of, any Person except for purchases of assets to be sold or used
in the ordinary course of business.  Company will not transfer any of the issued
and  outstanding  Capital  Stock of any  Subsidiary  which is a  qualified  REIT
Subsidiary  within the meaning of Section 865(i) of the Code and will not permit
the  issuance of any  additional  shares of such  Capital  Stock if the issuance
thereof would cause such Subsidiary to fail to be  characterized  as a qualified
REIT Subsidiary.

                                      -52-
<PAGE>
     6.6 DISPOSITIONS OF ASSETS. Company shall not, and shall not permit any of
its Subsidiaries to, sell, lease,  assign, or otherwise dispose of any assets of
Company or any of its Subsidiaries in an Asset Sale, or otherwise consummate any
Asset Sale,  except so long as there exists no Default or Event of Default,  and
no  Default  or Event  of  Default  would be  caused  thereby,  Company  and its
Subsidiaries  may  consummate  Asset Sales for fair market value in an aggregate
amount not to exceed during any period of four  consecutive  fiscal quarters 25%
of Total Assets  (calculated  as an amount equal to the result of (a) the sum of
Total Assets as of the first day of each fiscal quarter during such four quarter
period (b) divided by four),  provided that the Asset Sale Proceeds in excess of
$3,000,000 of each Asset Sale (including in respect of an Asset  Securitization)
which occurs  after the Closing  Date are applied as provided in SECTION  2.5(B)
hereof;  provided that,  notwithstanding  anything  herein to the contrary,  (i)
Company  will not  dispose  of any  assets at any time in an amount  that  would
impair or jeopardize the status of Company as a Real Estate Investment Trust and
(ii) the market  value of any assets  sold in an Asset  Securitization  shall be
excluded from the  calculation of assets disposed of in Asset Sales for purposes
of the 25%  limitation  set forth in this  SECTION  6.6. On the day of any Asset
Sale by Company or its  Subsidiaries  in which the Asset Sale  Proceeds  thereof
exceed $3,000,000,  Company shall deliver to Administrative  Agent a certificate
of an Authorized  Officer  certifying as to the amount of gross proceeds thereof
and costs and expenses  payable  thereof which were deducted in determining  the
Asset Sale Proceeds.

     6.7   DISTRIBUTIONS AND RESTRICTED  PAYMENTS.  Company shall not, and shall
not permit  any  Subsidiary  to,  make any  Restricted  Payments,  except  that,
notwithstanding  the  immediately  preceding  subsection,  Company  may  (a) pay
Permitted  Distributions  unless a Default  or Event of Default  shall  exist or
would be caused thereby,  in which case Company may only pay such  Distributions
as may be required to maintain the status of Company as a Real Estate Investment
Trust under the Code and (b)  establish a stock  option plan for  employees  and
directors of Company and, provided no Default or Event of Default shall exist or
would be caused thereby, Company may repurchase Capital Stock of Company for the
purpose of matching  employee  stock  purchases  in  connection  with  Company's
retirement plans.

     6.8   BUSINESS.  Company  shall  not,  and  shall  not  permit  any  of its
Subsidiaries  to,  engage  to any  substantial  extent  in any  line or lines of
business  activity  other  than the lines of  business  activity  engaged  in by
Company and its Subsidiaries as of the Closing Date.

     6.9 TRANSACTIONS WITH AFFILIATES.  Company shall not, and shall not permit
any of its  Subsidiaries  to, enter into or be party to a  transaction  with any
Affiliate,  including, but not limited to, (a) dispositions of such assets in an
Affiliate,  (b) a loan or advance to an  Affiliate,  unless such  Investment  is
evidenced by an Intercompany Note, and (c) mergers into, consolidations with, or
purchases or  acquisitions  of assets from,  any Affiliate;  provided,  (i) that
Company may enter into such  transactions if the value of the  consideration for
all such  transactions  (other than Asset  Securitizations)  entered  into after
April 15, 1997 does not exceed  $10,000,000  in aggregate  amount;  (ii) that an
Affiliate who is an individual  may serve as a director,  officer or employee of
Company,  and (iii) that Company and its  Subsidiaries  may (A) enter into Asset
Securitizations   with   Asset   

                                      -53-
<PAGE>
Securitization Affiliates, subject to the restrictions in SECTION 6.6 hereof and
the requirements of SECTION 2.5(B) hereof,  and (B) purchase or acquire Retained
Securities.

     6.10 LOANS AND INVESTMENTS.  Company shall not, and shall not permit any of
its  Subsidiaries to, make any Investment to, or make or have any Investment in,
any Person,  or make any  commitment  to make any such  Investment,  or make any
acquisition,  except (a)  Investments  existing  on the date  hereof as shown on
SECTION 4.13 hereto,  (b)  Investments in Cash  Equivalents,  (c) Investments in
travel  advances in the ordinary  course of business to officers and  employees,
(d)  Investments  in  accounts  receivable  arising  in the  ordinary  course of
business,  (e) Investments in Subsidiaries of Company in compliance with SECTION
6.17  hereof,  and  (f)  Investments  in the  form  of  subordinated  investment
securities  and other  similar  instruments  obtained  by  Company or any of its
Subsidiaries  in  connection  with an Asset  Securitization;  provided  that the
aggregate  amount of such  Investments  pursuant  to clause (f)  (including  the
Secured Franchise Loan Pass-Through  Certificates shown on SCHEDULE 4.13 hereto)
shall not exceed 20% of Total Assets at any time.

     6.11 FISCAL YEAR AND  ACCOUNTING  METHOD.  Company shall not, and shall not
permit  any of its  Subsidiaries  to,  change  its  fiscal  year  or  method  of
accounting, except as may be required by GAAP.

     6.12 AMENDMENT OF CORPORATE DOCUMENTS. Company shall not amend its articles
of organization  or bylaws and Company shall not permit any of its  Subsidiaries
to amend its articles of  organization,  bylaws or partnership  agreement in any
manner  which  could  reasonably  be expected  to be  materially  adverse to the
interests of Lenders.

     6.13 COMPLIANCE WITH ERISA.  Company shall not, and shall not permit any of
its  Subsidiaries  to,  directly  or  indirectly,  or permit  any member of such
Person's  Controlled Group to directly or indirectly,  (a) terminate any Plan so
as to result in any material (in the opinion of Administrative  Agent) liability
to Company, any Subsidiary of Company or any member of its Controlled Group, (b)
permit to exist any ERISA Event, or any other event or condition, which presents
the risk of any material (in the opinion of  Administrative  Agent) liability of
Company,  any Subsidiary of Company or any member of its Controlled  Group,  (c)
make a complete or partial  withdrawal  (within  the meaning of Section  4201 of
ERISA)  from any  Multiemployer  Plan so as to  result in any  material  (in the
opinion of Administrative Agent) liability to Company, any Subsidiary of Company
or any member of its Controlled Group, (d) enter into any new Plan or modify any
existing  Plan so as to  increase  its  obligations  thereunder  (except  in the
ordinary course of business consistent with past practice) which could result in
any material (in the opinion of Administrative  Agent) liability to Company, any
Subsidiary of Company or any member of its Controlled  Group,  or (e) permit the
present value of all benefit liabilities, as defined in Title IV of ERISA, under
each  Plan of  Company  and each  Subsidiary  of  Company  or any  member of its
Controlled  Group  (using the  actuarial  assumptions  utilized by the PBGC upon
termination  of a Plan) to materially (in the opinion of  Administrative  Agent)
exceed the fair  market  value of Plan assets  allocable  to such  benefits  all
determined as of the most recent valuation date for each such Plan.

                                      -54-
<PAGE>
     6.14  SUBSIDIARIES AND OTHER OBLIGORS.  Company shall not permit any of its
Subsidiaries to violate any provision of this ARTICLE VI.

     6.15  AMENDMENTS  TO  MATERIAL  AGREEMENTS.  Company  shall not,  nor shall
Company permit any of its  Subsidiaries to, amend or change any Loan Paper other
than with the prior written  consent of Lenders  pursuant to SECTION 9.1 hereof,
nor shall Company or any of its Subsidiaries change or amend (or take any action
or fail to take any  action  the result of which is an  effective  amendment  or
change),  or accept any waiver or consent with respect to, any Intercompany Note
other than with the prior  written  consent of Lenders  pursuant  to SECTION 9,1
hereof.

     6.16 PROHIBITED  TRANSACTIONS.  Company shall not, and shall not permit any
Subsidiary  to, sell or otherwise  transfer any Property in a transaction  which
constitutes a prohibited  transaction within the meaning of Section 857(b)(6) of
the Code if such prohibited  transaction  would cause Company or such Subsidiary
to fail to satisfy any of the requirements of Section 856 of the Code.

     6.17 NO NEW  SUBSIDIARIES.  Company  shall not, and shall not permit any of
its Subsidiaries to, acquire,  incorporate or otherwise  organize any Subsidiary
which was not in  existence  on the  Closing  Date unless  such  Subsidiary  (a)
executes a Guaranty  Agreement,  a  Subordination  Agreement and an Intercompany
Note  and  (b)  delivers  to  Administrative  Agent  (i) the  executed  Guaranty
Agreement,  Subordination  Agreement  and an  Officer's  Certificate  containing
Articles of  Incorporation,  Bylaws,  corporate  resolutions,  and incumbency of
officers,  all in form and substance  reasonably  satisfactory to Administrative
Agent,  and (ii) an opinion  of legal  counsel  of such  Subsidiary  in form and
substance reasonably satisfactory to Administrative Agent.

     6.18 ASSET  SECURITIZATION  AFFILIATES.  Company  will not permit any Asset
Securitization  Affiliate  to conduct any active  trade or  business  other than
directly in respect of an Asset Securitization.  Without limiting the generality
of the foregoing, Company shall not permit any Asset Securitization Affiliate to
directly or indirectly,  other than in conjunction with an Asset Securitization,
(a) incur,  assume,  guaranty or otherwise create or become liable in respect of
any Indebtedness,  (b) make, or permit to remain  outstanding,  an Investment in
any Person,  (c) create or suffer to be created or exist a Lien upon any part of
its property or upon any income, revenues, issues and profits thereof, (d) sell,
transfer, exchange or otherwise dispose of any part of its property, (e) create,
organize or establish any Person, including, without limitation, any Subsidiary,
or (f)  maintain,  contribute  to or assume any  liability  with  respect to any
Person.

     6.19 REPAYMENT OF ADVANCES UNDER THE AMENDED AND RESTATED CREDIT AGREEMENT.
At any time that  Advances are  outstanding  hereunder,  Company  shall not, and
shall not permit any  Subsidiary to, repay or prepay any Advances (as defined in
the Amended and Restated Credit Agreement) under the Amended and Restated Credit
Agreement except as otherwise required pursuant to SECTION 2.5(B) of the Amended
and Restated Credit Agreement.

                                      -55-
<PAGE>
                                  ARTICLE VII.

                                EVENTS OF DEFAULT

     7.1 EVENTS OF DEFAULT. Any one or more of the following shall be an "EVENT
OF  DEFAULT"  hereunder,  if the same  shall  occur for any  reason  whatsoever,
whether voluntary or involuntary, by operation of Law, or otherwise:

     (a) Company shall fail to pay any (i)  principal  under any Loan Paper when
due or (ii) any interest, fees, or other amounts under any Loan Paper within two
Business Days when due;

     (b) Any  representation  or warranty  made or deemed made by Company or any
Subsidiary  of Company (or any of its officers or  representatives)  under or in
connection with any Loan Papers shall prove to have been incorrect or misleading
in any material respect when made or deemed made;

     (c) Company or any  Subsidiary  of Company shall fail to perform or observe
any term or  condition  contained  in ARTICLE V (other than SECTION 5.12 hereof)
and such failure shall not be remedied  within fifteen days after written notice
thereof shall have been given to Company by Administrative Agent;

     (d) Company or any  Subsidiary  of Company shall fail to perform or observe
SECTION 5.12 hereof or any term or covenant contained in ARTICLE VI;

     (e) Company or any  Subsidiary  of Company shall fail to perform or observe
any other  term or  covenant  contained  in any Loan  Paper,  other  than  those
described in SECTIONS  7.1(A),  (B), (C) and (D), and such failure  shall not be
remedied  within fifteen days after written notice thereof shall have been given
to Company by Administrative Agent;

     (f) Any material  provision of any Loan Paper shall, for any reason, not be
valid and binding on Company or any  Subsidiary  of  Company,  or not be in full
force and  effect,  or shall be declared  to be null and void;  the  validity or
enforceability of any Loan Paper shall be contested by Company or any Subsidiary
of Company;  Company or any  Subsidiary of Company shall deny that it has any or
further liability or obligation under its respective Loan Papers;

     (g) Any of the  following  shall occur:  (i) Company or any  Subsidiary  of
Company  shall make an  assignment  for the benefit of creditors or be unable to
pay its debts  generally as they become due;  (ii) Company or any  Subsidiary of
Company  shall  petition  or  apply to any  Tribunal  for the  appointment  of a
trustee,  receiver,  or  liquidator  of it,  or of any  substantial  part of its
assets, or shall commence any proceedings  relating to Company or any Subsidiary
of Company  under any Debtor  Relief Law,  whether now or  hereafter  in effect;
(iii) any such petition or application  shall be filed, or any such  proceedings
shall be commenced,  against Company or any Subsidiary of Company,  or an order,
judgment or decree shall be entered  appointing any such trustee,  receiver,  or

                                      -56-
<PAGE>
liquidator,  or approving the petition in any such  proceedings;  (iv) any final
order,  judgment,  or decree shall be entered in any proceedings against Company
or any  Subsidiary of Company  decreeing its  dissolution;  (v) any final order,
judgment,  or decree shall be entered in any proceedings  against Company or any
Subsidiary of Company decreeing its split-up which requires the divestiture of a
substantial  part of its assets;  or (vi) Company or any  Subsidiary  of Company
shall  petition  or apply to any  Tribunal  for the  appointment  of a  trustee,
receiver,  or liquidator  of it, or of any  substantial  part of its assets,  or
shall commence any proceedings  relating to Company or any Subsidiary of Company
under any Debtor Relief Law, whether now or hereafter in effect;

     (h) Company or any Subsidiary of Company shall fail to pay any Indebtedness
or  Contingent  Liability in an aggregate  amount of $1,000,000 or more when due
(whether by scheduled maturity,  required prepayment,  acceleration,  demand, or
otherwise),  and such failure shall continue after the applicable  grace period,
if any,  specified in the agreement or instrument  relating to such Indebtedness
or Contingent  Liability;  or Company or any Subsidiary of Company shall fail to
perform or observe any term or covenant contained in any agreement or instrument
relating to any such Indebtedness or Contingent  Liability,  when required to be
performed or observed,  and such failure  shall  continue  after the  applicable
grace period, if any, specified in such agreement or instrument,  and can result
in acceleration of the maturity of such Indebtedness or Contingent Liability; or
any such  Indebtedness  or Contingent  Liability shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof;

     (i) Company or any  Subsidiary of Company shall have any final  judgment(s)
outstanding against it for the payment of $500,000 or more, and such judgment(s)
shall remain unstayed, in effect, and unpaid for a period of 60 days;

     (j)  A Change of Control shall occur;

     (k)  Company,  any Subsidiary of Company, or any ERISA Affiliate shall have
committed a failure  described  in Section  302(f)(l)  of ERISA,  and the amount
determined  under  Section  302(f)(3)  of  ERISA is  equal  to or  greater  than
$100,000;

     (l)   Company,  any  Subsidiary,  or any ERISA  Affiliate  shall  have been
notified  by  the  sponsor  of  a  Multiemployer  Plan  that  such  Plan  is  in
reorganization or is being terminated,  within the meaning of Title IV of ERISA,
if as a result thereof the aggregate annual  contributions to all  Multiemployer
Plans in  reorganization  or being  terminated  is  increased  over the  amounts
contributed  to such Plans for the  preceding  Plan year by an amount  exceeding
$50,000;

     (m)  Company or any  Subsidiary  of Company  shall be  required  under any
Environmental  Law to implement any remedial,  neutralization,  or stabilization
process or  program,  the cost of which  could  constitute  a  Material  Adverse
Change;

                                      -57-
<PAGE>
     (n)   Company  shall fail or cause to  qualify,  or be unable to certify to
Lenders its continuing  status,  as a Real Estate  Investment  Trust pursuant to
Sections  856 through 860 of the Code;  or any  Subsidiary  which is a qualified
REIT  subsidiary  within the meaning of Section 856(i) of the Code shall fail to
qualify as a qualified REIT  subsidiary  within the meaning of Section 856(i) of
the Code; or

     (o)  An Event of Default (as defined in the  Amended  and  Restated  Credit
Agreement)  shall occur and be continuing  under the Amended and Restated Credit
Agreement.

     7.2  REMEDIES UPON  DEFAULT.  If an Event of Default  described in SECTION
7.1(G) shall occur,  the  Commitment  shall be  immediately  terminated  and the
aggregate  unpaid  principal  balance of and accrued  interest  on all  Advances
shall,  to the extent  permitted by  applicable  Law,  thereupon  become due and
payable  concurrently  therewith,  without any action by Administrative Agent or
any Lender,  and without  diligence,  presentment,  demand,  protest,  notice of
protest or intent to  accelerate,  or notice of any other kind, all of which are
hereby  expressly  waived.  Subject to the foregoing  sentence,  if any Event of
Default shall occur and be continuing,  Administrative Agent may at its election
(provided  (i)  Administrative  Agent  has sent  notice  to all  Lenders  of its
intention to do any one ore more of the  following and within five Business Days
of such notice Majority  Lenders have not notified  Administrative  Agent not to
take such  action or (ii)  Administrative  Agent in good faith  determines  that
immediate action is necessary to be taken to protect the Rights of Lenders), and
shall  at the  discretion  of  Majority  Lenders,  do any  one  or  more  of the
following:

     (a) Declare the entire unpaid balance of all Advances  immediately  due and
payable,  whereupon it shall be due and payable without diligence,  presentment,
demand,  protest,  notice of protest or intent to  accelerate,  or notice of any
other kind (except notices specifically  provided for under SECTION 7.1), all of
which are hereby  expressly waived (except to the extent waiver of the foregoing
is not permitted by applicable Law);

     (b) Terminate the Commitment;

     (c) Reduce any claim of Administrative Agent and Lenders to judgment;

     (d) Exercise any Rights afforded under any Loan Papers,  by Law,  including
but not limited to the UCC, at equity, or otherwise.

     7.3 CUMULATIVE  RIGHTS.  All Rights available to Administrative  Agent and
Lenders  under the Loan  Papers  shall be  cumulative  of and in addition to all
other Rights granted  thereto at Law or in equity,  whether or not amounts owing
thereunder shall be due and payable,  and whether or not Administrative Agent or
any Lender  shall have  instituted  any suit for  collection  or other action in
connection with the Loan Papers.  Nothing  contained herein or in any other Loan
Papers shall limit the Right of any Lender to collect its Note upon acceleration
of the Obligations pursuant to the terms of this Agreement.

                                      -58-
<PAGE>
     7.4  WAIVERS.  The acceptance by Administrative  Agent or any Lender at any
time and from time to time of partial payment of any amount owing under any Loan
Papers  shall not be deemed to be a waiver of any  Default  or Event of  Default
then existing. No waiver by Administrative Agent or any Lender of any Default or
Event of  Default  shall be  deemed to be a waiver  of any  Default  or Event of
Default  other than such  Default or Event of  Default.  No delay or omission by
Administrative Agent or any Lender in exercising any Right under the Loan Papers
shall impair such Right or be construed as a waiver  thereof or an  acquiescence
therein,  nor shall any single or partial  exercise  of any such Right  preclude
other or further exercise thereof,  or the exercise of any other Right under the
Loan Papers or otherwise.

     7.5  PERFORMANCE BY ADMINISTRATIVE AGENT OR ANY LENDER. Should any covenant
of Company or any Subsidiary of Company fail to be performed in accordance  with
the terms of the Loan Papers,  Administrative Agent may, at its option,  perform
or attempt to perform  such  covenant  on behalf of Company or such  Subsidiary.
Notwithstanding  the  foregoing,   it  is  expressly   understood  that  neither
Administrative  Agent nor any Lender assumes, and shall not ever have, except by
express  written  consent  of  Administrative  Agent  or  such  Lender,  (a) any
liability or  responsibility  for the  performance of any duties or covenants of
Company or any  Subsidiary  of Company or (b) any  implied or  fiduciary  duties
whatsoever to Company or any Subsidiary of Company.

     7.6  EXPENDITURES.  Company shall reimburse  Administrative  Agent and each
Lender for any  reasonable  sums spent by it in connection  with the exercise of
any Right  provided  herein.  Such sums shall bear interest at the lesser of (a)
the Base Rate in effect from time to time,  plus 3.0% and (b) the Highest Lawful
Rate, from the date spent until the date of repayment by Company.

     7.7  CONTROL.  None of the covenants or other provisions  contained in this
Agreement shall, or shall be deemed to, give Administrative  Agent or any Lender
any Rights to exercise control over the affairs and/or  management of Company or
any  Subsidiary of Company,  the power of  Administrative  Agent and each Lender
being limited to the Rights to exercise the remedies provided in this Article.

                                  ARTICLE VIII.

                              ADMINISTRATIVE AGENT

     8.1  AUTHORIZATION AND ACTION.  Each Lender hereby appoints and authorizes
Administrative  Agent to take such action as Administrative  Agent on its behalf
and to exercise  such powers under this  Agreement  and the other Loan Papers as
are delegated to Administrative Agent by the terms of the Loan Papers,  together
with such powers as are  reasonably  incidental  thereto.  As to any matters not
expressly  provided for by this  Agreement and the other Loan Papers  (including
without limitation enforcement or collection of the Notes), Administrative Agent
shall not be required to exercise any  discretion or take any action,  but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the  instructions of 

                                      -59-
<PAGE>
Majority  Lenders (or all Lenders,  if required  under  SECTION  9.1),  and such
instructions  shall  be  binding  upon  all  Lenders;  PROVIDED,  HOWEVER,  that
Administrative  Agent  shall not be required  to take any action  which  exposes
Administrative  Agent to  personal  liability  or which is  contrary to any Loan
Papers or applicable Law.  Administrative Agent agrees to distribute promptly to
each Lender copies of any notices,  requests and other information received from
Company  pursuant  to the terms of this  Agreement,  and to  distribute  to each
applicable Lender in like funds all amounts delivered to Administrative Agent by
Company for the Ratable or individual account of any Lender,  with such funds to
be  distributed  on the date of receipt by  Administrative  Agent  provided such
funds are received by the time prescribed in SECTION 2.12(A), or the immediately
following Business Day if such funds are received after such time (any funds not
so  distributed  by   Administrative   Agent  shall  bear  interest  payable  by
Administrative  Agent at a rate per annum equal to the Federal Funds Rate to but
not including the date of receipt by such Lender).  Functions of  Administrative
Agent are  administerial  in nature and in no event shall  Administrative  Agent
have a fiduciary or trustee  relationship  in respect of any Lender by reason of
this Agreement or any other Loan Paper.

     8.2  ADMINISTRATIVE  AGENT'S RELIANCE,  ETC. Neither  Administrative Agent,
nor  any  of  its  directors,   officers,  agents,  employees,   Affiliates,  or
representatives  shall be liable for any action  taken or omitted to be taken by
it or them under or in connection  with this  Agreement or any other Loan Paper,
except  for its or their own gross  negligence  or willful  misconduct.  Without
limitation of the  generality  of the  foregoing,  Administrative  Agent (a) may
treat the payee of any Note as the holder  thereof  until  Administrative  Agent
receives  written  notice of the  assignment or transfer  thereof signed by such
payee and in form  satisfactory to  Administrative  Agent;  (b) may consult with
legal  counsel  (including  counsel  for  Company  or any of its  Subsidiaries),
independent public accountants,  and other experts selected by it, and shall not
be liable  for any  action  taken or  omitted to be taken in good faith by it in
accordance with the advice of such counsel,  accountants,  or experts; (c) makes
no warranty or  representation to any Lender and shall not be responsible to any
Lender  for  any  statements,  warranties,  or  representations  made  in  or in
connection with this Agreement or any other Loan Papers;  (d) shall not have any
duty to ascertain or to inquire as to the  performance  or  observance of any of
the terms,  covenants,  or conditions of this Agreement or any other Loan Papers
on the part of Company or its Subsidiaries or to inspect the Property (including
the  books  and  records)  of  Company  or its  Subsidiaries;  (e)  shall not be
responsible   to  any  Lender  for  the  due  execution,   legality,   validity,
enforceability,  genuineness, sufficiency, or value of this Agreement, any other
Loan Papers, or any other instrument or document  furnished pursuant hereto; and
(f) shall incur no liability  under or in respect of this Agreement or any other
Loan Papers by acting upon any notice, consent, certificate, or other instrument
or writing  believed by it to be genuine and signed or sent by the proper  party
or parties.

     8.3  NATIONSBANK,  N.A. AND AFFILIATES. With respect to its Commitment, its
Advances, and any Loan Papers, NationsBank,  N.A. has the same Rights under this
Agreement  as any other  Lender and may  exercise the same as though it were not
Administrative Agent.  NationsBank,  N.A. and its Affiliates may accept deposits
from, lend money to, act as trustee under indentures of, and generally engage in
any kind of business with,  Company or any Subsidiary of Company,  any 

                                      -60-
<PAGE>
Affiliate  thereof,  and any Person  who may do  business  therewith,  all as if
NationsBank,  N.A. were not Administrative Agent and without any duty to account
therefor to any Lender.

     8.4   LENDER  CREDIT  DECISION.  Each  Lender  acknowledges  that  it  has,
independently  and  without  reliance  upon  Administrative  Agent or any  other
Lender, and based on the financial  statements referred to in SECTION 4.4 hereof
and such other documents and information as it has deemed appropriate,  made its
own credit analysis and decision to enter into this Agreement.  Each Lender also
acknowledges   that  it  will,   independently   and   without   reliance   upon
Administrative  Agent  or any  other  Lender  and  based on such  documents  and
information as it shall deem  appropriate at the time,  continue to make its own
credit  decisions in taking or not taking  action under this  Agreement  and the
other Loan Papers.

     8.5   INDEMNIFICATION  BY LENDERS.  Lenders shall indemnify  Administrative
Agent, pro rata, from and against any and all liabilities,  obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, or disbursements
of any kind or  nature  whatsoever  which may be  imposed  on,  incurred  by, or
asserted against  Administrative  Agent in any way relating to or arising out of
any  Loan  Papers  or any  action  taken  or  omitted  by  Administrative  Agent
thereunder,  including  mere or ordinary  negligence  of  Administrative  Agent;
PROVIDED,  HOWEVER,  that no Lender  shall be  liable  for any  portion  of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs,  expenses, or disbursements  resulting from Administrative  Agent's gross
negligence or willful misconduct.  Without limitation of the foregoing,  Lenders
shall reimburse  Administrative  Agent,  pro rata,  promptly upon demand for any
out-of-pocket  expenses  (including  reasonable  attorneys'  fees)  incurred  by
Administrative  Agent in connection with the preparation,  execution,  delivery,
administration,   modification,   amendment,  or  enforcement  (whether  through
negotiation,  legal  proceedings  or otherwise) of, or legal and other advice in
respect of rights or  responsibilities  under,  the Loan Papers.  The  indemnity
provided in this SECTION 8.5 shall survive the termination of this Agreement.

     8.6  SUCCESSOR ADMINISTRATIVE AGENT. Administrative Agent may resign at any
time by giving written notice thereof to Lenders and Company, and may be removed
at any time with cause by the Majority Lenders or without cause by action of all
Lenders (other than Administrative Agent, if it is a Lender); PROVIDED, HOWEVER,
so long as (a)  NationsBank,  N.A.  is a Lender  and (b) no  Default or Event of
Default has occurred and is  continuing,  NationsBank,  N.A.  shall not have the
right to resign as Administrative  Agent.  Upon any such  resignation,  Majority
Lenders shall have the right,  with the consent of Company  (which consent shall
not be unreasonably withheld) so long as no Event of Default has occurred and is
continuing,  to  appoint  a  successor  Administrative  Agent.  If no  successor
Administrative  Agent shall have been so appointed  and shall have accepted such
appointment within thirty days after the retiring  Administrative Agent's giving
of notice of resignation,  then the retiring Administrative Agent may, on behalf
of Lenders, with the consent of Company (which consent shall not be unreasonably
withheld), appoint a successor Administrative Agent, which shall be a commercial
bank  organized  under the Laws of the United  States of America or of any State
thereof and having a combined capital and surplus of at least $250,000,000. Upon

                                      -61-
<PAGE>
the  acceptance  of any  appointment  as  Administrative  Agent  hereunder  by a
successor  Administrative  Agent,  such  successor  Administrative  Agent  shall
thereupon  succeed  to and become  vested  with all the Rights and duties of the
retiring  Administrative  Agent, and the retiring  Administrative Agent shall be
discharged from its duties and obligations under the Loan Papers,  provided that
(a) if the  retiring  or  removed  Administrative  Agent is unable to  appoint a
successor  Administrative Agent and (b) a Default or Event of Default shall have
occurred and be continuing,  Administrative Agent shall, after the expiration of
a sixty day period from the date of notice,  be relieved of all  obligations  as
Administrative  Agent  hereunder.  Notwithstanding  any  Administrative  Agent's
resignation or removal hereunder,  the provisions of this Article shall continue
to inure to its  benefit  as to any  actions  taken or omitted to be taken by it
while it was Administrative Agent under this Agreement.

                                   ARTICLE IX.

                                  MISCELLANEOUS

     9.1   AMENDMENTS  AND WAIVERS.  No amendment or waiver of any  provision of
this Agreement or any other Loan Papers, nor consent to any departure by Company
or any Subsidiary of Company therefrom, shall be effective unless the same shall
be in writing  and signed by  Administrative  Agent with the consent of Majority
Lenders,  and then any such  waiver or consent  shall be  effective  only in the
specific  instance  and for the  specific  purpose  for which  given;  PROVIDED,
HOWEVER,  that no amendment,  waiver, or consent shall (and the result of action
or failure to take  action  shall  not)  unless in writing  and signed by all of
Lenders and  Administrative  Agent, (a) increase the Commitment,  (b) reduce any
principal,  interest,  fees, or other  amounts  payable  hereunder,  or waive or
result in the waiver of any Event of Default  under SECTION  7.1(A),  (c) extend
the  Maturity  Date or  otherwise  postpone  any date  fixed for any  payment of
principal,  interest,  fees, or other amounts payable hereunder, (d) release any
Guaranties securing the Obligations, other than releases contemplated hereby and
by the Loan Papers,  (e) change the  definition  of Specified  Percentage or the
number of Lenders required to take any action hereunder, (f) amend SECTION 2.16,
(g) amend this SECTION 9.1, or (h) release or amend any Subordination Agreement;
PROVIDED, FURTHER, HOWEVER,  notwithstanding anything herein to the contrary, no
consent of any Lender is required for any increase in the Commitment,  change in
the number of Lenders  required to take any action  hereunder,  or change in the
Specified  Percentage as a result of SECTION 2.16 hereof. No amendment,  waiver,
or consent shall affect the Rights or duties of  Administrative  Agent under any
Loan  Papers,  unless it is in  writing  and signed by  Administrative  Agent in
addition to the requisite number of Lenders.

     9.2  NOTICES.

     (a) MANNER OF DELIVERY.  All notices  communications and other materials to
be given or delivered  under the Loan Papers shall,  except in those cases where
giving  notice by  telephone is  expressly  permitted,  be given or delivered in
writing.  All written  notices,  communications  and materials  shall be sent by
registered or certified mail,  postage  prepaid,  return receipt  requested,  by

                                      -62-
<PAGE>
telecopier,  or delivered  by hand.  In the event of a  discrepancy  between any
telephonic   notice  and  any  written   confirmation   thereof,   such  written
confirmation  shall  be  deemed  the  effective  notice  except  to  the  extent
Administrative  Agent,  any  Lender or  Company  has acted in  reliance  on such
telephonic notice.

     (b)  ADDRESSES.  All notices,  communications  and materials to be given or
delivered  pursuant  to this  Agreement  shall  be  given  or  delivered  at the
following  respective  addresses and telecopier and telephone numbers and to the
attention of the following individuals or departments:

     If to Company:

          Franchise Finance Corporation of America
          The Perimeter Center
          17207 North Perimeter Drive
          Scottsdale, Arizona 85255
          Telephone No.:    (602) 585-4500
          Facsimile No.:    (602) 585-2225

          Attention:        John R. Barravecchia
                            Executive Vice President and Chief Financial Officer

     With a copy to:

          Franchise Finance Corporation of America
          The Perimeter Center
          17207 North Perimeter Drive
          Scottsdale, Arizona 85255
          Telephone No.:    (602) 585-4500
          Facsimile No.:    (602) 585-2225

          Attention:        Dennis L. Ruben, Esq.
                            Executive Vice President and General Counsel

                                      -63-
<PAGE>
     If to Administrative Agent:

          NationsBank, N.A.
          901 Main Street, 67th Floor
          Dallas, Texas  75202
          Telephone No.:    (214) 508-0193
          Facsimile No.:    (214) 508-0980

          Attention:        Tom Blake
                            Senior Vice President

     (c) If to any Lender, to its address set forth below opposite its signature
or on any Assignment and Acceptance or amendment to this Agreement;

or at such other address or,  telecopier or telephone number or to the attention
of such other  individual or  department as the party to which such  information
pertains  may  hereafter  specify  for the  purpose  in a  notice  to the  other
specifically captioned "Notice of Change of Address".

     (d) EFFECTIVENESS.  Each notice, communication and any material to be given
or  delivered  to any party  pursuant to this  Agreement  shall be  effective or
deemed  delivered or furnished  (i) if sent by mail, on the fifth day after such
notice,  communication or material is deposited in the mail,  addressed as above
provided,  (ii)  if sent by  telecopier,  when  such  notice,  communication  or
material is transmitted to the appropriate  number  determined as above provided
in this  SECTION  9.2 and the  appropriate  receipt  is  received  or  otherwise
acknowledged,  (iii) if sent by hand delivery or overnight courier, when left at
the address of the addressee  addressed as above provided,  and (iv) if given by
telephone,  when  communicated to the individual or any member of the department
specified  as  the  individual  or  department  to  whose   attention   notices,
communications and materials are to be given or delivered except that notices of
a change of address,  telecopier or telephone number or individual or department
to whose  attention  notices,  communications  and  materials are to be given or
delivered shall not be effective until received; provided, HOWEVER, that notices
to Administrative Agent pursuant to ARTICLE II shall be effective when received.
Company  agrees that  Administrative  Agent shall have no duty or  obligation to
verify or otherwise confirm telephonic notices given pursuant to ARTICLE II, and
agrees to indemnify and hold harmless  Administrative  Agent and Lenders for any
and  all  liabilities,   obligations,   losses,  damages,  penalties,   actions,
judgments, suits, claims, costs, and expenses resulting, directly or indirectly,
from acting upon any such notice.

     9.3  PARTIES IN INTEREST.  All covenants and  agreements  contained in this
Agreement  and all other Loan Papers  shall bind and inure to the benefit of the
respective  successors and assigns of the parties  hereto.  Each Lender may from
time to time assign or transfer its interests  hereunder pursuant to SECTION 9.4
hereof. Neither Company nor any Subsidiary of Company may assign or transfer its
Rights or obligations  under any Loan Paper without the prior written consent of
Administrative Agent.

                                      -64-
<PAGE>
     9.4  ASSIGNMENTS AND PARTICIPATIONS.

     (a) Subject to the  following  sentence,  each Lender (an  "ASSIGNOR")  may
assign its Rights and  obligations  as a Lender  under the Loan Papers to one or
more Eligible Assignees pursuant to an Assignment and Acceptance, so long as (i)
each  assignment  shall be of a constant,  and not a varying  percentage  of all
Rights and obligations  thereunder,  (ii) each Assignor shall in each case pay a
$3,500 processing fee to  Administrative  Agent, and (iii) no such assignment is
for  an  amount  less  than   $10,000,000.   Within  five  Business  Days  after
Administrative  Agent  receives  notice of any such  assignment,  Company  shall
execute and deliver to Administrative Agent, in exchange for the Notes issued to
Assignor,  new Notes to the order of such  Assignor  and its assignee in amounts
equal  to their  respective  Specified  Percentages  of the  Commitment,  if the
Commitment is  outstanding.  Such new Notes shall be dated the effective date of
the assignment. It is specifically acknowledged and agreed that on and after the
effective  date of each  assignment,  the  assignee  shall be a party hereto and
shall have the Rights and obligations of a Lender under the Loan Papers.

     (b) Each Lender may sell  participations  to one or more  Persons in all or
any of its Rights and obligations under the Loan Papers; PROVIDED, HOWEVER, that
(i) such Lender's obligations under the Loan Papers shall remain unchanged, (ii)
such Lender shall remain solely  responsible to the other parties hereto for the
performance  of such  obligations,  (iii) such Lender shall remain the holder of
its Notes for all purposes of the Loan  Papers,  (iv) the  participant  shall be
granted  the Right to vote on or  consent  to only those  matters  described  in
SECTIONS  9.1(A),  (B), (C) and (D), (v) Company and each Subsidiary of Company,
Administrative  Agent,  and other  Lenders  shall  continue  to deal  solely and
directly with such Lender in connection  with its Rights and  obligations  under
the Loan  Papers  and (vi) no such  participation  is for an  amount  less  than
$5,000,000.

     (c) Any Lender may, in connection with any assignment or participation,  or
proposed  assignment or participation,  disclose to the assignee or participant,
or proposed assignee or participant,  any information relating to Company or any
Subsidiary of Company furnished to such Lender by or on behalf of Company or any
Subsidiary  of  Company,   provided  such  Person  executes  a   Confidentiality
Agreement.

     (d) Notwithstanding  any other provision set forth in this Agreement,  each
Lender may at any time  create a security  interest in all or any portion of its
Rights under this Agreement (including,  without limitation,  the Advances owing
to it and the Note or Notes held by it) in favor of any Federal  Reserve Bank in
accordance  with  Regulation A of the Board of Governors of the Federal  Reserve
System.

     9.5  SHARING OF PAYMENTS.  If any Lender shall obtain any payment  (whether
voluntary,  involuntary,  through  the  exercise  of any  Right of  set-off,  or
otherwise)  on  account  of its  Advances  in  excess  of its pro rata  share of
payments made by Company, such Lender shall forthwith purchase participations in
Advances  made by the other  Lenders as shall be  necessary  to share the excess
payment  pro rata  with  each of them;  PROVIDED,  HOWEVER,  that if any of such
excess payment is thereafter  recovered from the purchasing Lender, its purchase
from each Lender  shall be  rescinded  

                                      -65-
<PAGE>
and each Lender  shall repay the purchase  price to the extent of such  recovery
together  with a pro rata share of any  interest or other amount paid or payable
by the  purchasing  Lender in respect of the total amount so recovered.  Company
agrees  that any  Lender so  purchasing  a  participation  from  another  Lender
pursuant  to this  SECTION  9.5 may, to the  fullest  extent  permitted  by Law,
exercise all its Rights of payment (including the Right of set-off) with respect
to such  participation  as fully as if such Lender  were the direct  creditor of
Company in the amount of such participation.

     9.6  RIGHT OF SET-OFF Upon the occurrence and during the continuance of any
Event of Default,  each Lender is hereby authorized at any time and from time to
time, to the fullest  extent  permitted by Law, to set-off and apply any and all
deposits (general or special, time or demand,  provisional or final) at any time
held and  other  indebtedness  at any time  owing by such  Lender  to or for the
credit or the  account  of Company  against  any and all of the  obligations  of
Company  now or  hereafter  existing  under  this  Agreement  and the other Loan
Papers,  whether or not  Administrative  Agent or any Lender shall have made any
demand  under  this  Agreement  or the  other  Loan  Papers,  and  even  if such
obligations  are unmatured.  Each Lender shall promptly notify Company after any
such  set-off  and  application,  provided  that the failure to give such notice
shall not affect the  validity of such  set-off and  application.  The Rights of
each Lender under this  SECTION 9.6 are in addition to other Rights  (including,
without limitation, other Rights of set-off) which such Lender may have.

     9.7  COSTS, EXPENSES, AND TAXES.

     (a) Company agrees to pay on demand (i) all  reasonable  costs and expenses
of  Administrative  Agent and its Affiliates in connection  with the preparation
and negotiation of all Loan Papers,  including without limitation the reasonable
fees and out-of-pocket expenses of Special Counsel, and the reasonable costs and
expenses of  Administrative  Agent and its  Affiliates  in  connection  with the
syndication  of the  Commitment  and  (ii) all  costs  and  expenses  (including
reasonable attorneys' fees and expenses) of Administrative Agent and each Lender
in connection  with  administration,  interpretation,  modification,  amendment,
waiver,  or  release  of any Loan  Papers and any  restructuring,  work-out,  or
collection  of any portion of the  Obligations  or the  enforcement  of any Loan
Papers.

     (b) In addition, Company shall pay any and all stamp, debt, and other Taxes
payable or  determined to be payable in  connection  with any payment  hereunder
(other  than  Taxes on the  overall  net income of  Administrative  Agent or any
Lender  or  franchise  Taxes  or  Taxes  on  capital  or  capital   receipts  of
Administrative Agent or any Lender), or the execution,  delivery, or recordation
of any Loan  Papers,  and agrees to save  Administrative  Agent and each  Lender
harmless from and against any and all liabilities  with respect to, or resulting
from any delay in paying or  omission to pay any Taxes in  accordance  with this
SECTION 9.7, including any penalty, interest, and expenses relating thereto. All
payments by Company or any  Subsidiary of Company under any Loan Papers shall be
made free and clear of and without  deduction  for any  present or future  Taxes
(other  than  Taxes on the  overall  net income of  Administrative  Agent or any
Lender  of any  nature  now or  hereafter  existing,  levied,  or  withheld,  or
franchise Taxes or Taxes on capital or capital receipts of Administrative  Agent
or any  Lender),  including  all  interest,  penalties,  or similar  liabilities
relating  

                                      -66-
<PAGE>
thereto.  If Company shall be required by Law to deduct or to withhold any Taxes
from or in respect of any amount  payable  hereunder,  (i) the amount so payable
shall be  increased to the extent  necessary so that,  after making all required
deductions   and   withholdings   (including   Taxes  on   amounts   payable  to
Administrative  Agent or any Lender pursuant to this  sentence),  Administrative
Agent or any Lender  receives an amount equal to the sum it would have  received
had no such deductions or  withholdings  been made, (ii) Company shall make such
deductions or withholdings, and (iii) Company shall pay the full amount deducted
or withheld to the relevant taxing  authority in accordance with applicable Law.
Without  prejudice to the survival of any other agreement of Company  hereunder,
the  agreements and  obligations of Company  contained in this SECTION 9.7 shall
survive  the  execution  of  this  Agreement,  termination  of  the  Commitment,
repayment  of the  Obligations,  satisfaction  of  each  agreement  securing  or
assuring the  Obligations  and termination of this Agreement and each other Loan
Paper.

     (c) Within 30 days after the date of any  payment  of Taxes,  Company  will
furnish to  Administrative  Agent the original or a certified  copy of a receipt
evidencing  payment  thereof.  If no Taxes are payable in respect of any payment
hereunder,  Company will furnish to Administrative Agent a certificate from each
appropriate   taxing  authority,   or  an  opinion  of  counsel   acceptable  to
Administrative Agent, in either case stating that such payment is exempt from or
not subject to Taxes,  PROVIDED,  HOWEVER, that such certificate or opinion need
only be given if: (i) Company makes any payment from any account located outside
the United  States,  or (ii) the payment is made by a payor that is not a United
States  Person.  For purposes of this SECTION 9.7 the terms "United  States" and
"United  States Person" shall have the meanings set forth in Section 7701 of the
Code.

     (d) Each Lender which is not a United  States Person (as defined in Section
7701 of the Code) hereby agrees that:

     (i) it shall,  no later than the Closing  Date (or, in the case of a Lender
which becomes a party hereto pursuant to SECTION 9.4 after the Closing Date, the
date upon which such Lender becomes a party hereto)  deliver to Company  through
Administrative Agent, with a copy to Administrative Agent:

          (A) if any lending  office is located in the United States of America,
     two (2) accurate and complete signed  originals of Internal Revenue Service
     Form 4224 or any successor thereto ("Form 4224"),

          (B) if any  lending  office is located  outside  the United  States of
     America, two (2) accurate and complete signed originals of Internal Revenue
     Service Form 1001 or any successor thereto ("Form 1001").

in each case  indicating  that such  Lender is on the date of  delivery  thereof
entitled to receive payments of principal,  interest and fees for the account of
such  lending  office  or  lending   offices  under  this  Agreement  free  from
withholding of United States Federal income tax;

                                      -67-
<PAGE>
     (ii) if at any time such  Lender  changes  its  lending  office  or lending
offices or selects an additional  lending  office it shall,  at the same time or
reasonably  promptly  thereafter  but only to the  extent  the forms  previously
delivered by it hereunder are no longer  effective,  deliver to Company  through
Administrative  Agent, with a copy to  Administrative  Agent, in replacement for
the forms previously delivered by it hereunder:

          (A) if such  changed or  additional  lending  office is located in the
     United States of America, two (2) accurate and complete signed originals of
     Form 4224; or

          (B) otherwise,  two (2) accurate and complete signed originals of Form
     1001,

in each case  indicating  that such  Lender is on the date of  delivery  thereof
entitled to receive payments of principal,  interest and fees for the account of
such  changed  or  additional  lending  office  under this  Agreement  free from
withholding of United States Federal income tax;

     (iii) it  shall,  before or  promptly  after  the  occurrence  of any event
(including the passing of time but excluding any event  mentioned in clause (ii)
above)  requiring a change in the most recent Form 4224 or Form 1001  previously
delivered by such Lender and if the  delivery of the same be lawful,  deliver to
Company through  Administrative  Agent with a copy to Administrative  Agent, two
(2) accurate and complete  original  signed  copies of Form 4224 or Form 1001 in
replacement for the forms previously delivered by such Lender;

     (iv) it shall, promptly upon the request of Company to that effect, deliver
to Company  such other forms or similar  documentation  as may be required  from
time to time by any  applicable  law,  treaty,  rule or  regulation  in order to
establish such Lender's tax status for withholding purposes; and

     (v) it shall notify  Company  within 30 days after any event  (including an
amendment to, or a change in any  applicable law or regulation or in the written
interpretation thereof by any regulatory authority or any judicial authority, or
by ruling  applicable to such Lender of any governmental  authority charged with
the  interpretation  or  administration  of any law) shall occur that results in
such Lender no longer being capable of receiving  payments without any deduction
or withholding of United States federal income tax.

     9.8   RATE  PROVISION.  It is not the  intention  of any  party to any Loan
Papers to make an agreement violative of the Laws of any applicable jurisdiction
relating to usury. In no event shall Company or any other Person be obligated to
pay any amount in excess of the Maximum Amount. If  Administrative  Agent or any
Lender ever receives,  collects or applies,  as interest,  any such excess, such
amount which would be excessive  interest shall be deemed a partial repayment of
principal and treated  hereunder as such;  and if principal is paid in full, any
remaining excess shall be paid to Company or the other Person entitled  thereto.
In determining  whether or not the interest paid or payable,  under any specific
contingency,  exceeds the Maximum Amount,  Company,  each Subsidiary of Company,
Administrative  Agent and each Lender  shall,  to the maximum  extent  permitted
under 

                                      -68-
<PAGE>
Applicable Law, (a) characterize any nonprincipal  payment as an expense, fee or
premium  rather than as  interest,  (b) exclude  voluntary  prepayments  and the
effect thereof, and (c) amortize,  prorate,  allocate and spread in equal parts,
the total  amount of interest  throughout  the entire  contemplated  term of the
Obligations  so that the interest rate is uniform  throughout the entire term of
the Obligations; PROVIDED that if the Obligations are paid and performed in full
prior to the end of the full  contemplated  term  thereof,  and if the  interest
received for the actual period of existence  thereof exceeds the Maximum Amount,
Administrative  Agent or Lenders,  as  appropriate,  shall refund to Company the
amount of such  excess or credit the  amount of such  excess  against  the total
principal amount owing, and, in such event, neither Administrative Agent nor any
Lender shall be subject to any  penalties  provided by any Laws for  contracting
for,  charging  or  receiving  interest in excess of the  Maximum  Amount.  This
SECTION 9.8 shall  control  every other  provision of all  agreements  among the
parties to the Loan Papers  pertaining to the  transactions  contemplated  by or
contained in the Loan Papers.

     9.9   CONFIDENTIALITY.  Each  Lender and  Administrative  Agent  agrees (on
behalf of itself and each of its Affiliates,  directors, officers, employees and
representatives)  to (a) keep  confidential  in  accordance  with its  customary
procedures for handling such information any non-public  information supplied to
it by Company pursuant to this Agreement which is identified by Company as being
confidential  at the time the same is  delivered  to Lenders  or  Administrative
Agent,  including,  without  limitation,  written  information  and  information
transferred  visually  or  electronically,  together  with all notes,  analyses,
compilations,  studies or other  documents that contain all or a portion of such
information   (collectively,   "CONFIDENTIAL   INFORMATION")  and  (b)  use  the
Confidential  Information  solely in  connection  with the Loan  Papers  and the
evaluation of Company and its  Subsidiaries,  provided that nothing herein shall
limit the disclosure of any Confidential  Information (a) to the extent required
by Law or  judicial  process,  (b) to counsel  for any Lender or  Administrative
Agent,  (c) to bank  examiners,  auditors or accountants  of any Lender,  (d) to
Administrative  Agent or any other Lender, (e) in connection with any Litigation
to which any one or more of Lenders is a party, provided,  further, that, unless
specifically  prohibited  by applicable  Law or court order,  each Lender shall,
prior to disclosure thereof,  give prompt notification to Company of any request
for disclosure of any such non-public information (i) by any governmental agency
or  representative  thereof  (other than any such request in connection  with an
examination of such Lender's financial condition by such governmental agency) or
(ii)  pursuant  to legal  process,  or (f) to any  assignee or  participant  (or
prospective assignee or participant) so long as such assignee or participant (or
prospective assignee or participant) executes a Confidentiality  Agreement. With
respect to any disclosure of any Confidential Information set forth in subclause
(i) or (ii)  of  clause  (e)  above,  each  Lender  agrees,  to the  extent  not
prohibited by applicable  law or court order,  to (a) cooperate  with Company so
that Company may seek a protective order or other appropriate remedy and (b) use
its best efforts to obtain an order or reasonable  assurance  that  confidential
treatment will be afforded such Confidential Information. At the earlier of such
time as (a) a Person is no longer a Lender or participant  under this Agreement,
or (b) all Advances  under this Agreement are paid in full and the Commitment is
terminated,  upon written request by Company and subject to any  restrictions or
regulations of any Tribunal  having  supervisory  authority  over Lenders,  such
Lender or participant shall return to Company the Confidential Information which
is in tangible  form,  including any copies 

                                      -69-
<PAGE>
which  such  Lender  or  participant  or any  Persons  to whom  such  Lender  or
participant  transmitted  the  Confidential  Information may have made, and such
Lender or  participant  or such Person will  destroy  all  abstracts,  summaries
thereof or references thereto in such Lender's or participant's or such Person's
documents,  and after written request by Company, shall promptly provide Company
reasonable  assurance in writing that such Lender or  participant or such Person
have complied with this paragraph.  Each Lender  acknowledges that Company is in
the business of financing commercial real estate,  equipment and enterprises and
from time to time such Lender and Company may be in direct competition with each
other for business.  This Agreement does not constitute a license for any Lender
to use, employ or exploit the Confidential  Information to gain any advantage in
the marketplace against Company;  it being expressly  understood and agreed that
any use,  employment  or  exploitation  of the  Confidential  Information  for a
purpose not expressly permitted herein is strictly prohibited.

     9.10  SEVERABILITY.  If any  provision  of any  Loan  Papers  is held to be
illegal,  invalid, or unenforceable under present or future Laws during the term
thereof,  such provision shall be fully  severable,  the appropriate  Loan Paper
shall be construed and enforced as if such illegal,  invalid,  or  unenforceable
provision  had never  comprised a part  thereof,  and the  remaining  provisions
thereof  shall  remain in full force and effect and shall not be affected by the
illegal,  invalid,  or  unenforceable  provision or by its severance  therefrom.
Furthermore,  in lieu of such illegal, invalid, or unenforceable provision there
shall be added  automatically  as a part of such Loan Paper a legal,  valid, and
enforceable  provision  as  similar  in  terms  to  the  illegal,   invalid,  or
unenforceable provision as may be possible.

     9.11 EXCEPTIONS TO COVENANTS.  Neither Company nor any of its  Subsidiaries
shall be deemed to be permitted to take any action or to fail to take any action
that is permitted as an exception to any covenant in any Loan Papers, or that is
within the permissible limits of any covenant,  if such action or omission would
result in a violation of any other covenant in any Loan Papers.

     9.12  COUNTERPARTS.  This  Agreement  and the  other  Loan  Papers  may be
executed  in any  number of  counterparts,  all of which  taken  together  shall
constitute one and the same  instrument.  In making proof of any such agreement,
it shall not be necessary to produce or account for any  counterpart  other than
one signed by the party against which enforcement is sought.

     9.13  GOVERNING LAW; WAIVER OF JURY TRIAL.

     (a)  THIS  AGREEMENT  AND ALL  OTHER  LOAN  PAPERS  SHALL BE  DEEMED  TO BE
CONTRACTS MADE AND  PERFORMABLE IN DALLAS,  TEXAS,  AND SHALL BE GOVERNED BY AND
CONSTRUED  IN  ACCORDANCE  WITH THE LAWS OF THE STATE OF TEXAS  (WITHOUT  GIVING
EFFECT TO CONFLICT OF LAWS) AND THE UNITED STATES OF AMERICA.  WITHOUT EXCLUDING
ANY OTHER  JURISDICTION,  COMPANY  AGREES THAT THE STATE AND  FEDERAL  COURTS OF
TEXAS LOCATED IN DALLAS,  TEXAS,  WILL HAVE  JURISDICTION  OVER  

                                      -70-
<PAGE>
PROCEEDINGS  IN CONNECTION  HEREWITH.  TO THE MAXIMUM  EXTENT  PERMITTED BY LAW,
COMPANY  HEREBY  WAIVES  ANY  RIGHT  THAT IT MAY  HAVE TO A TRIAL BY JURY OF ANY
DISPUTE (WHETHER A CLAIM IN TORT, CONTRACT,  EQUITY, OR OTHERWISE) ARISING UNDER
OR RELATING TO THIS AGREEMENT,  THE OTHER LOAN PAPERS,  OR ANY RELATED  MATTERS,
AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A
JURY.

     (b) COMPANY  HEREBY WAIVES  PERSONAL  SERVICE OF ANY LEGAL PROCESS UPON IT.
COMPANY  AGREES THAT SERVICE OF PROCESS MAY BE MADE UPON IT BY  REGISTERED  MAIL
(RETURN  RECEIPT  REQUESTED)  DIRECTED TO COMPANY AT ITS ADDRESS  DESIGNATED FOR
NOTICE UNDER THIS  AGREEMENT AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED
FIVE DAYS AFTER DEPOSIT IN THE UNITED STATES MAIL.  NOTHING IN THIS SECTION 9.13
SHALL  AFFECT THE RIGHT OF  ADMINISTRATIVE  AGENT OR ANY  LENDER TO SERVE  LEGAL
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

     9.14  ENTIRE AGREEMENT.  THIS AGREEMENT AND THE OTHER LOAN PAPERS REPRESENT
THE FINAL AGREEMENT  BETWEEN THE PARTIES REGARDING THE SUBJECT MATTER HEREIN AND
THEREIN AND MAY NOT BE  CONTRADICTED  BY EVIDENCE OF PRIOR,  CONTEMPORANEOUS  OR
SUBSEQUENT ORAL AGREEMENT OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES.


================================================================================

                   REMAINDER OF PAGE LEFT INTENTIONALLY BLANK

================================================================================

                                      -71-
<PAGE>
     IN WITNESS WHEREOF,  this Credit Agreement is executed as of the date first
set forth above.

COMPANY:
                                        FRANCHISE FINANCE CORPORATION OF AMERICA



                                        By:  /s/ John R. Barravecchia
                                             ------------------------------
                                             John R. Barravecchia
                                             Executive Vice President and
                                             Chief Financial Officer

LENDERS:
                                        NATIONSBANK, N.A., individually and as
Specified Percentage:                   Administrative Agent
         66.66666667%

                                        By:  /s/ Frank M. Johnson
                                             -----------------------------------
                                             Frank M. Johnson
                                             Senior Vice President
Address:
901 Main, 67th Floor
Dallas, Texas  75202

Facsimile: (214) 508-0980

Attention: Tom Blake

Telephone: (214) 508-0193

                                        NORWEST BANK ARIZONA, NATIONAL
                                        ASSOCIATION
Specified Percentage:
         20.00000000%

                                        By:  /s/ Jaclyn Noel
                                             -----------------------------------
                                             Name: JACLYN NOEL
                                             Title: VICE PRESIDENT
Address:
c/o Wells Fargo Bank (Phoenix)
3300 North Central Avenue
Mail Station 9004
Phoenix, Arizona 85012

Facsimile: (602) 248-2333

Attention: Jaclyn Noel

Telephone: (602) 248-3652

                                      -72-
<PAGE>
                                        BANK ONE, ARIZONA, N.A.
Specified Percentage:
         13.33333333%

                                        By:  /s/ Michael V. McCann
                                             -----------------------------------
                                             Name: MICHAEL V. MCCANN
                                             Title: VICE PRESIDENT
Address:
241 North Central Avenue
Phoenix, Arizona 85004

Facsimile:  (602) 221-1259

Attention:  Mike McCann

Telephone:  (602) 221-2830

                                      -73-
<PAGE>
                                    EXHIBIT A

                                 PROMISSORY NOTE

$____________________             Dallas, Texas                  _______________

     FOR VALUE  RECEIVED,  the  undersigned,  FRANCHISE  FINANCE  CORPORATION OF
AMERICA,  a Delaware  corporation  ("BORROWER"),  HEREBY  PROMISES TO PAY to the
order of _______________ ("LENDER") _______________,  payable at such times, and
in such  amounts,  as are  specified  in the  Credit  Agreement  as  hereinafter
defined.  The books and  records of  Administrative  Agent  shall be PRIMA FACIE
evidence of all sums due Lender.

     Borrower  promises to pay  interest on the unpaid  principal  amount of the
Advances from the date made until such principal amount is paid in full, at such
interest  rates,  and  payable at such  times,  as are  specified  in the Credit
Agreement.

     Both  principal  and  interest  are  payable in lawful  money of the United
States of America to  Administrative  Agent (as defined in the Credit Agreement)
(for the account of Lender) at its principal banking house at NationsBank Plaza,
901 Main  Street,  Dallas,  Texas 75202,  or such other place as  Administrative
Agent may direct, in immediately available funds.

     This  Note is one of the  Notes  evidencing  Obligations  under  the  Loans
referred to in, and is entitled to the benefits of, the Credit  Agreement  dated
as of February 11, 1999, among Borrower,  NationsBank,  N.A., as  Administrative
Agent,  and certain  other  lenders (as from time to time  amended,  modified or
supplemented, the "Credit Agreement"). The Credit Agreement, among other things,
contains  provisions for  acceleration of the maturity hereof upon the happening
of an Event  of  Default  (as  defined  in the  Credit  Agreement)  and also for
prepayments on account of principal hereof prior to the maturity hereof upon the
terms and conditions therein specified.

     Borrower  and  each   guarantor,   surety  and  endorser   waives   demand,
presentment,  notice of dishonor,  protest and diligence in collecting  sums due
hereunder;  agrees to application  of any debt of Lender to the payment  hereof;
agrees that  extensions and renewals  without limit as to number,  acceptance of
any  number of  partial  payments,  releases  of any party  liable  hereon,  and
releases or  substitutions  of collateral,  before or after maturity,  shall not
release or  discharge  its  obligation  under  this  Note;  and agrees to pay in
addition to all other sums due hereunder reasonable attorney's fees if this Note
is placed in the  hands of an  attorney  for  collection  or if it is  collected
through bankruptcy or other judicial proceeding.

                                       -1-
<PAGE>

     This Note shall be governed by and construed in accordance with the laws of
the State of Texas.

                                           FRANCHISE FINANCE CORPORATION
                                           OF AMERICA, a Delaware corporation


                                           By: /s/ John R. Barravecchia
                                               ---------------------------------
                                               John R. Barravecchia
                                               Executive Vice President and
                                               Chief Financial Officer

                                       -2-
<PAGE>
                                    EXHIBIT B

                               GUARANTY AGREEMENT

     THIS GUARANTY  AGREEMENT (this  "Guaranty"),  dated as of __________,  1999
(this  "Guaranty"),   is  made  by  FFCA  Acquisition  Corporation,  a  Delaware
corporation, FFCA Institutional Advisors, Inc., a Delaware corporation, and FFCA
Capital  Holding  Corporation,   a  Delaware  corporation   (collectively,   the
"Guarantors"), of the obligations of Franchise Finance Corporation of America, a
Delaware  corporation  ("Company"),  under the Credit Agreement  (defined below)
among the Company,  NationsBank,  N.A. as Administrative Agent  ("Administrative
Agent"), and the lenders parties to the Credit Agreement (singly, a "Lender" and
collectively, the "Lenders").

                                   BACKGROUND

     1. The Company, the Administrative Agent, and the Lenders have entered into
a Credit Agreement,  dated as of February 11, 1999 (said Credit Agreement, as it
may  hereafter be amended or  otherwise  modified  from time to time,  being the
"Credit Agreement"). The capitalized terms not otherwise defined herein have the
meanings specified in the Credit Agreement.

     2. Pursuant to the Credit Agreement,  the Company may, subject to the terms
of the Credit Agreement and the other Loan Papers, request that the Lenders make
Advances.

     3. It is a condition  precedent  to the  obligation  of the Lenders to make
such Advances that each Guarantor guarantee repayment thereof upon the terms and
conditions set forth herein.

     4. Each of the  Guarantors is a Subsidiary of the Company,  and the Company
and  each of the  Guarantors  are  members  of the  same  consolidated  group of
companies and are engaged in related businesses.

     5. The Board of Directors of each  Guarantor  has  determined  that (i) the
execution,   delivery,  and  performance  of  this  Guaranty  is  necessary  and
convenient  to the  conduct,  promotion,  and  attainment  of  each  Guarantor's
business and (ii) the Advances may  reasonably be expected to benefit,  directly
or indirectly, each Guarantor.

     6. The Guarantors desire to induce the Lenders to make such Advances.

                                      -1-
<PAGE>
     NOW, THEREFORE, in consideration of the premises and in order to induce the
Lenders to make Advances under the Credit Agreement, the Guarantors hereby agree
as follows:

     1. GUARANTY.

          (1) Each  Guarantor,  jointly and  severally,  hereby  unconditionally
     guarantees the full and punctual payment of, and promises to pay, when due,
     whether at stated  maturity,  by mandatory  prepayment,  by acceleration or
     otherwise,  the  Obligations,  and  agrees  to pay any  and all  reasonable
     expenses  (including  reasonable  counsel  fees and  expenses)  incurred in
     enforcement  or  collection  of all  or  any  part  thereof,  whether  such
     obligations,  indebtedness  and  liabilities are direct,  indirect,  fixed,
     contingent,  joint, several or joint and several, and any rights under this
     Guaranty.

          (2)   Anything   contained   in   this   Guaranty   to  the   contrary
     notwithstanding,  the  obligations  of each  Guarantor  hereunder  shall be
     limited to a maximum  aggregate  amount  equal to the  largest  amount that
     would not render  its  obligations  hereunder  subject  to  avoidance  as a
     fraudulent  transfer  or  conveyance  under  Section 548 of title 11 of the
     United States Code or any  applicable  provisions  of comparable  state law
     (collectively,  the "Fraudulent  Transfer Laws"), in each case after giving
     effect to all other liabilities of such Guarantor, contingent or otherwise,
     that  are  relevant  under  the  Fraudulent   Transfer  Laws  (specifically
     excluding,  however,  any  liabilities  of such  Guarantor  in  respect  of
     intercompany indebtedness to the Company or other Affiliates of the Company
     to the extent that such indebtedness would be discharged in an amount equal
     to the amount paid by such  Guarantor  hereunder)  and  treating as assets,
     subject to Paragraph  4(a) hereof,  to the value (as  determined  under the
     applicable  provisions of the  Fraudulent  Transfer  Laws) of any rights to
     subrogation or  contribution  of such Guarantor  pursuant to (i) Applicable
     Law or (ii) any agreement providing for an equitable  allocation among such
     Guarantor and other Affiliates of the Company of obligations  arising under
     guaranties by such parties.

     2. GUARANTY ABSOLUTE. The Guarantors guarantee that the Obligations will be
paid strictly in accordance with the terms of the Credit  Agreement,  the Notes,
and the other Loan Papers, regardless of any Applicable Law, regulation or order
now or hereafter in effect in any  jurisdiction  affecting  any of such terms or
the  rights of the Lender  with  respect  thereto;  provided,  however,  nothing
contained in this  Guaranty  shall  require the  Guarantors  to make any payment
under this Guaranty in violation of any Applicable Law,  regulation or order now
or  hereafter  in  effect.  The  obligations  and  liabilities of each Guarantor

                                      -2-
<PAGE>
hereunder are  independent  of the  obligations  of the Company under the Credit
Agreement and any  Applicable  Law. The liability of each  Guarantor  under this
Guaranty shall be absolute and unconditional irrespective of:

          (1) the taking or accepting of any other  security or guaranty for any
     or all of the  Obligations,  including any reduction or  termination of the
     Commitment;

          (2) any  increase,  reduction  or  payment in full at any time or from
     time to time of any part of the Obligations;

          (3) any lack of validity or  enforceability  of the Credit  Agreement,
     the  Notes,  or any  other  Loan  Paper or other  agreement  or  instrument
     relating thereto,  including but not limited by the unenforceability of all
     or any  part  of the  Obligations  by  reason  of the  fact  that  (i)  the
     Obligations,  and/or the interest  paid or payable  with  respect  thereto,
     exceeds the amount  permitted by  Applicable  Law, (ii) the act of creating
     the Obligations,  or any part thereof,  is ULTRA VIRES,  (iii) the officers
     creating  same  acted in excess of their  authority,  or (iv) for any other
     reason;

          (4) any lack of corporate  power of the Company or any other Person at
     any time liable for the payment of any or all of the Obligations;

          (5) any Debtor Relief Laws involving the Company, any Guarantor or any
     other Person obligated on any of the Obligations;

          (6) any renewal, compromise,  extension,  acceleration or other change
     in the time, manner or place of payment of, or in any other term of, all or
     any  of  the  Obligations;  any  adjustment,  indulgence,  forbearance,  or
     compromise that may be granted or given by any Lender or the Administrative
     Agent to the Company,  any Guarantor,  or any Person at any time liable for
     the payment of any or all of the  Obligations;  or any other  modification,
     amendment,  or  waiver  of or any  consent  to  departure  from the  Credit
     Agreement,  the  Notes,  or any other  Loan  Paper and other  agreement  or
     instrument  relating  thereto  without  notification  of any Guarantor (the
     right to such notification being herein specifically waived by Guarantors);

          (7) any exchange,  release, sale, subordination,  or non-perfection of
     any collateral or Lien therein or any lack of validity or enforceability or
     change in priority, destruction,  reduction, or loss or impairment of value
     of any collateral or Lien therein;

          (8) any release or amendment or waiver of or consent to departure from
     any other guaranty for all or any of the Obligations;

                                      -3-
<PAGE>
          (9) the failure by any Lender or the Administrative  Agent to make any
     demand upon or to bring any legal,  equitable,  or other action against the
     Company  or any  other  Person  (including  without  limitation  any  other
     Guarantor),  or the  failure or delay by any  Lender or the  Administrative
     Agent to, or the  manner in which any  Lender or the  Administrative  Agent
     shall,  proceed to exhaust rights  against any direct or indirect  security
     for the Obligations;

          (10) the  existence of any claim,  defense,  set-off,  or other rights
     which  the  Company  or any  Guarantor  may  have at any time  against  the
     Company,  the Lenders,  or any Guarantor,  or any other Person,  whether in
     connection  with this  Guaranty,  the other Loan Papers,  the  transactions
     contemplated thereby, or any other transaction;

          (11) any failure of any Lender or the  Administrative  Agent to notify
     any Guarantor of any renewal,  extension,  or assignment of the Obligations
     or any part thereof, or the release of any security, or of any other action
     taken or  refrained  from being  taken by any Lender or the  Administrative
     Agent, it being  understood that the Lenders and the  Administrative  Agent
     shall not be  required to give any  Guarantor  any notice of any kind under
     any  circumstances  whatsoever  with respect to or in  connection  with the
     Obligations;

          (12) any payment by the  Company to the Lenders or the  Administrative
     Agent is held to constitute a preference  under any Debtor Relief Law or if
     for any other reason the Lenders or the Administrative Agent is required to
     refund such payment or pay the amount thereof to another Person; or

          (13) any other circumstance which might otherwise constitute a defense
     available  to, or a discharge  of, the Company,  any  Guarantor,  any other
     guarantor  or other Person  liable on the  Obligations,  including  without
     limitation  any defense by reason of any disability or other defense of the
     Company, or the cessation from any cause whatsoever of the liability of the
     Company, or any claim that the Guarantors'  obligations hereunder exceed or
     are more burdensome than those of the Company.

This Guaranty shall  continue to be effective or be reinstated,  as the case may
be, if at any time any payment of any of the  Obligations  is  rescinded or must
otherwise  be  returned by any Lender or any other  Person upon the  insolvency,
bankruptcy or reorganization of the Company, any Guarantor or otherwise,  all as
though such payment had not been made.

     3. WAIVER.  To the extent not prohibited by Applicable  Law, each Guarantor
hereby waives: (a) promptness,  protests, diligence,  presentments,  acceptance,
performance,  demands for  performance,  notices of  nonperformance,  notices of
protests, notices of dishonor, notices of acceptance of this Guaranty and of the
existence, creation or incurrence of new or additional indebtedness,  and any of
the  events  described  in  SECTION 2 and of any other occurrence or matter with


                                      -4-
<PAGE>
respect  to any of the  Obligations,  this  Guaranty  or any of the  other  Loan
Papers; (b) any requirement that the Administrative Agent or any Lender protect,
secure, perfect, or insure any Lien or security interest or any property subject
thereto or exhaust any right or take any action against the Company or any other
Person or any  collateral  or  pursue  any  other  remedy in the  Administrative
Agent's or any Lender's  power  whatsoever;  (c) any right to assert against the
Administrative  Agent or any Lender as a  counterclaim,  set-off or cross-claim,
any  counterclaim,  set-off or claim which it may now or hereafter  have against
the Company or other Person liable on the Obligations;  (d) any right to seek or
enforce any remedy or right that the Administrative  Agent or any Lender now has
or may hereafter have against the Company (to the extent permitted by Applicable
Law); (e) any right to  participate  in any collateral or any right  benefitting
the Administrative  Agent or the Lenders in respect of the Obligations;  and (f)
any right by which it might be entitled to require  suit on an accrued  right of
action in respect of any of the  Obligations or require suit against the Company
or any other  Person,  whether  arising  pursuant to Section  34.02 of the Texas
Business  and  Commerce  Code,  as  amended,  Section  17.001 of the Texas Civil
Practice  and  Remedies  Code,  as amended,  Rule 31 of the Texas Rules of Civil
Procedure, as amended, or otherwise.

     4.  SUBROGATION  AND  SUBORDINATION.   Notwithstanding   any  reference  to
subrogation contained herein to the contrary,  each Guarantor hereby irrevocably
waives any claim or other rights which it may have or hereafter  acquire against
the Company that arise from the existence,  payment,  performance or enforcement
of  such  Guarantor's  obligations  under  this  Guaranty,   including,  without
limitation, any right of subrogation, reimbursement,  exoneration, contribution,
indemnification,  any right to  participate in any claim or remedy of any Lender
against  the  Company or any  collateral  which any Lender now has or  hereafter
acquires,  whether or not such claim, remedy or right arises in equity, or under
contract,  statutes or common law,  including without  limitation,  the right to
take or receive  from the  Company,  directly  or  indirectly,  in cash or other
property or by set-off or in any other manner, payment or security on account of
such claim or other  rights.  If any amount  shall be paid to any  Guarantor  in
violation of the preceding sentence and the Obligations shall not have been paid
in full, such amount shall be deemed to have been paid to such Guarantor for the
benefit  of,  and held in trust  for the  benefit  of,  the  Lenders,  and shall
forthwith  be paid to the  Administrative  Agent to be credited and applied upon
the Obligations,  whether matured or unmatured,  in accordance with the terms of
the Credit  Agreement.  Each Guarantor  acknowledges that it will receive direct
and indirect benefits from the financing arrangements contemplated by the Credit
Agreement and that the waiver set forth in this Paragraph 4 is knowingly made in
contemplation of such benefits.

                                      -5-
<PAGE>
     5.  REPRESENTATIONS  AND WARRANTIES.  Each Guarantor hereby  represents and
warrants that all representations and warranties as they apply to such Guarantor
only set forth in Article IV of the  Credit  Agreement  (each of which is hereby
incorporated by reference) is true and correct.

     6. COVENANTS. Each Guarantor hereby expressly assumes, confirms, and agrees
to perform,  observe,  and be bound by all conditions and covenants set forth in
the Credit Agreement,  to the extent applicable to it, as if it were a signatory
thereto. Each Guarantor further covenants and agrees (a) punctually and properly
to perform all of such  Guarantor's  covenants  and duties  under any other Loan
Papers; (b) from time to time promptly to furnish the Administrative  Agent with
any  information  or  writings  which the  Administrative  Agent may  reasonably
request concerning this Guaranty;  and (c) promptly to notify the Administrative
Agent of any claim, action, or proceeding affecting this Guaranty.

     7.  AMENDMENTS,  Etc.  No  amendment  or  waiver of any  provision  of this
Guaranty nor consent to any  departure by any Guarantor  therefrom  shall in any
event be effective unless the same shall be in writing and signed by the Lenders
as  required  pursuant  to Section  9.1 of the Credit  Agreement,  and then such
waiver or consent shall be effective  only in the specific  instance and for the
specific purpose for which given.

     8. ADDRESSES FOR NOTICES.  Unless otherwise  provided herein,  all notices,
requests,  consents  and demands  shall be in writing and shall be  delivered by
hand or overnight courier service,  mailed or sent by telecopy to the respective
addresses  specified  herein  and to the  attention  of the  individuals  listed
thereunder, or, as to any party, to such other addresses as may be designated by
it in written notice to all other parties. All notices,  requests,  consents and
demands  hereunder  shall be deemed to have been given on the date of receipt if
delivered  by hand or  overnight  courier  service  or sent by  telecopy,  or if
mailed, effective on the earlier of actual receipt or three (3) days after being
mailed by certified mail, return receipt requested,  postage prepaid,  addressed
as aforesaid.

     9. NO WAIVER;  REMEDIES. No failure on the part of the Administrative Agent
or any Lender to exercise,  and no delay in exercising,  any right  hereunder or
under any of the other Loan Papers shall operate as a waiver thereof;  nor shall
any single or partial  exercise of any right hereunder or under any of the other
Loan Papers  preclude any other or further  exercise  thereof or the exercise of
any other  right.  Neither  the  Administrative  Agent nor any  Lender  shall be


                                      -6-
<PAGE>
required  to (a)  prosecute  collection  or seek to  enforce  or  resort  to any
remedies  against  the  Company  or  any  other  Person  liable  on  any  of the
Obligations,  (b) join the  Company  or any  other  Person  liable on any of the
Obligations  in any action in which  Lender  prosecutes  collection  or seeks to
enforce or resort to any remedies  against the Company or other Person liable on
any of the  Obligations,  or (c) seek to enforce or resort to any remedies  with
respect to any Liens granted to (or  benefitting,  directly or  indirectly)  the
Administrative  Agent or any Lender by the Company or any other Person liable on
any of the Obligations.  Neither the  Administrative  Agent nor any Lender shall
have any  obligation  to  protect,  secure  or  insure  any of the  Liens or the
properties  or interests in  properties  subject  thereto.  The remedies  herein
provided are cumulative and not exclusive of any remedies provided by Applicable
Law.

     10. RIGHT OF SET-OFF. Upon the occurrence and during the continuance of any
Event of Default,  each Lender is hereby authorized at any time and from time to
time, to the fullest  extent  permitted by Law, to set off and apply any and all
deposits (general or special, time or demand,  provisional or final) at any time
held and  other  indebtedness  at any time  owing by such  Lender  to or for the
credit or the account of any Guarantor against any and all of the obligations of
any Guarantor now or hereafter  existing  under this Guaranty,  irrespective  of
whether or not such Lender shall have made any demand under this Guaranty.  Each
Lender  agrees  promptly to notify  such  Guarantor  after any such  set-off and
application,  provided that the failure to give such notice shall not affect the
validity of such set-off and  application.  The rights of each Lender under this
Section 10 are in  addition to other  rights and  remedies  (including,  without
limitation, other rights of set-off) which such Lender may have.

     11. CONTINUING GUARANTY; TRANSFER OF NOTES. This Guaranty is an irrevocable
continuing  guaranty  of  payment  and shall (a) remain in full force and effect
until  termination  of the  Commitment  and final  payment  in full  (after  the
Maturity  Date) of the  Obligations  and all other  amounts  payable  under this
Guaranty,  (b) be binding upon each Guarantor,  its successors and assigns,  and
(c)  inure  to  the  benefit  of and be  enforceable  by  each  Lender  and  its
successors,  transferees  and assigns.  Without  limiting the  generality of the
foregoing  clause  (c),  to the extent  permitted  by Section  9.4 of the Credit
Agreement,  each Lender may assign or  otherwise  transfer  its rights under the
Credit  Agreement,  the Notes or any of the other  Loan  Papers or any  interest
therein to any other Person, and such other Person shall thereupon become vested
with all the rights or any interest therein, as appropriate,  in respect thereof
granted to the Lender herein or otherwise.

     12. INFORMATION.  Each Guarantor acknowledges and agrees that it shall have
the  sole  responsibility  for  obtaining  from  the  Company  such  information
concerning  the  Company's  financial  condition or business  operations as such
Guarantor may require,  and that neither the Administrative Agent nor any Lender
has any duty at any time to disclose to any Guarantor any  information  relating
to the business operations or financial conditions of the Company.

     13.  GOVERNING  LAW. THIS  AGREEMENT  SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND THE UNITED STATES OF AMERICA.

                                      -7-
<PAGE>
WITHOUT EXCLUDING ANY OTHER  JURISDICTION,  EACH GUARANTOR AGREES THAT THE STATE
AND FEDERAL COURTS OF TEXAS LOCATED IN DALLAS,  TEXAS,  SHALL HAVE  JURISDICTION
OVER PROCEEDINGS IN CONNECTION HEREWITH.

     14. WAIVER OF JURY TRIAL. EACH GUARANTOR, THE ADMINISTRATIVE AGENT, AND THE
LENDERS HEREBY KNOWINGLY,  VOLUNTARILY,  IRREVOCABLY AND INTENTIONALLY WAIVE, TO
THE MAXIMUM  EXTENT  PERMITTED BY LAW, ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING  OR CLAIM  ARISING OUT OF OR RELATED TO THIS  AGREEMENT OR ANY OF THE
LOAN  PAPERS OR THE  TRANSACTIONS  CONTEMPLATED  THEREBY.  THIS  PROVISION  IS A
MATERIAL INDUCEMENT TO EACH LENDER ENTERING INTO THE CREDIT AGREEMENT.

     15.  Ratable  Benefit.  This  Guaranty  is for the  ratable  benefit of the
Lenders, each of which shall share any proceeds of this Guaranty pursuant to the
terms of the Credit Agreement.

     16. Guarantor  Insolvency.  Should any Guarantor become insolvent,  fail to
pay its debts  generally as they become due,  voluntarily  seek,  consent to, or
acquiesce  in the  benefits of any Debtor  Relief Law or become a party to or be
made the subject of any proceeding  provided for by any Debtor Relief Law (other
than as a creditor or claimant) that could suspend or otherwise adversely affect
the  rights of any Lender  granted  hereunder,  then,  the  obligations  of such
Guarantor  under this  Guaranty  shall be, as between  such  Guarantor  and such
Lender, a fully-matured,  due, and payable  obligation of such Guarantor to such
Lender  (without  regard to whether there is a Default or Event of Default under
the Credit  Agreement  or whether  any part of the  Obligations  is then due and
owing by the Company to such Lender),  payable in full by such Guarantor to such
Lender upon demand,  which shall be the estimated amount owing in respect of the
contingent claim created hereunder.

     17. ENTIRE AGREEMENT.  THIS GUARANTY,  TOGETHER WITH THE OTHER LOAN PAPERS,
REPRESENTS THE FINAL  AGREEMENT  AMONG THE PARTIES  REGARDING THE SUBJECT MATTER
HEREIN  AND  THEREIN  AND  MAY  NOT  BE   CONTRADICTED  BY  EVIDENCE  OF  PRIOR,
CONTEMPORANEOUS  OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO.  THERE ARE
NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

================================================================================

                   REMAINDER OF PAGE LEFT INTENTIONALLY BLANK

================================================================================

                                      -8-
<PAGE>
         IN WITNESS WHEREOF, the Guarantors have caused this Guaranty to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first above written.

                                                    FFCA ACQUISITION CORPORATION

Address for each Guarantor:

c/o Franchise Finance Corporation of America
The Perimeter Center
17207 North Perimeter Drive                         By: /s/ John R. Barravecchia
Scottsdale, Arizona 85255                               ------------------------
Telephone No.: (602) 585-4500                           John R. Barravecchia
Facsimile No.: (602)585-2225                            Executive Vice President
                                                        Chief Financial Officer
Attention: John R. Barravecchia
           Executive Vice President and
           Chief Financial Officer


                                               FFCA INSTITUTIONAL ADVISORS, INC.
with a copy to:

Franchise Finance Corporation of America
The Perimeter Center                                By: /s/ John R. Barravecchia
17207 North Perimeter Drive                             ------------------------
Scottsdale, Arizona 85255                               John R. Barravecchia
Telephone No.:(602) 585-4500                            Executive Vice President
Facsimile No.:(602) 585-2225                            and Chief Financial
                                                        Officer
Attention: Dennis L. Ruben, Esq.
           Executive Vice President
           and General Counsel

                                                FFCA CAPITAL HOLDING CORPORATION

Address for Administrative Agent:

NationsBank, N.A.                                   By: /s/ John R. Barravecchia
901 Main Street, 67th Floor                             ------------------------
Dallas, Texas  75202                                    John R. Barravecchia
Telephone No.: (214) 508-0193                           Executive Vice President
Facsimile No.: (214) 508-0980                           and Chief Financial
                                                        Officer

Attention: Tom Blake
           Senior Vice President

                                      -9-
<PAGE>
                                    EXHIBIT C

                        QUARTERLY COMPLIANCE CERTIFICATE

     The undersigned  hereby certifies that he/she is a duly elected  Authorized
Officer of Franchise  Finance  Corporation  of America,  a Delaware  corporation
("BORROWER"),  and that he/she is  authorized  to execute  this  Certificate  on
behalf of Borrower in connection with that certain Credit  Agreement dated as of
February 11, 1999  ("CREDIT  AGREEMENT"),  among  Borrower,  NationsBank,  N.A.,
individually and as Administrative Agent, and each other Lender a party thereto.
All terms used but not defined  herein  shall have the meanings set forth in the
Credit  Agreement.  This  Certificate is submitted  concurrently  with quarterly
financial  statements of Borrower for the period ended  ____________,  ____. The
undersigned  hereby further  certifies to the following as of the date set forth
below:

     1.  The  representations  and  warranties  of  Borrower  under  the  Credit
Agreement  are true and  complete  in all  material  respects,  before and after
giving effect to any Advances.

     2. No event has occurred which constitutes a Default or Event of Default.

     3. Company continues to qualify as a Real Estate Investment Trust under the
Code.

     4. The following calculations are true, accurate and complete, and are made
in accordance with the terms and provisions of the Credit Agreement:

1.   APPLICABLE MARGIN.

     The Index Debt Rating is ______________. The Applicable Margin with respect
     to Base Rate  Advances is _____%.  The  Applicable  Margin with  respect to
     LIBOR Advances is _____%.

2.   Section 6.1(a).  MINIMUM NET WORTH.

     (a) Minimum Net Worth

          (i)   $425,000,000                            $425,000,000

          (ii)  75% of aggregate Net Cash
                Proceeds received by Borrower
                and its Consolidated Subsidiaries
                after April 15, 1997, disposition
                of Capital Stock                        $___________

          (iii) amount  equal to Net Worth of any
                Person acquired (via asset or stock
                purchase) by Borrower  or any
                Subsidiary  to the extent purchase
                price is paid for in Capital Stock
                of Borrower or such Subsidiary                       $__________

          (iv)  Minimum Net Worth [(i) + (ii) + (iii)]               $__________

     (b) Actual Net Worth (determined in accordance
         with GAAP)                                                  $__________

<PAGE>
3. Section 6.1(b). TOTAL INDEBTEDNESS TO ADJUSTED NET
   WORTH RATIO.

     (a) Maximum Ratio                                               0.90 to 1

     (b) Actual Ratio

         (i)    Indebtedness of Company and Consolidated
                Subsidiaries

                a.  Debt for Borrowed Money             $__________

                b.  Capital Lease obligations           $__________

                c.  Reimbursement obligations relating
                    to letters of credit                $__________

                d.  Contingent Liabilities relating to
                    (a), (b) and (c) above              $__________

                e.  Withdrawal Liability                $__________

                f.  indebtedness associated with
                    Interest Hedge Agreements           $__________

                g.  payments due for the deferred
                    purchase price of property  and
                    services (excluding trade payables
                    less than 90 days old)              $__________

                h.  obligations (contingent or otherwise
     `              to purchase, retire or redeem any
                    Capital Stock)                      $__________

                i.  [a. + b. + c. + d. + e. + f. + g.
                    + h.]                                            $__________

         (ii)   Indebtedness evidenced by Intercompany
                Notes and which is subject to a
                Subordination Agreement                              $__________

         (iii)  Total Indebtedness [(i) - (ii)]                      $__________

<PAGE>
         (iv)   Adjusted Net Worth

                a. Actual Net Worth (determined in
                   accordance with GAAP)                $__________

                b. Accumulated Depreciation (determined
                   in accordance with GAAP)             $__________

                c. Adjusted Net Worth [a. + b.]                      $__________

         (v)    Total Indebtedness to Adjusted Net
                Worth [(iii)/(iv)]                                   _____ to 1

4. Section 6.1(c). FIXED CHARGE COVERAGE RATIO.

   (a)   Minimum Ratio                                               2.0 to 1

   (b)   Actual Ratio

         (i)    Cash Flow From Operations for twelve-
                calendar month period ending on or most
                recently ended prior to date of
                determination                           $__________

         (ii)   cash interest payable on all Indebted-
                ness (including interest on Capitalized
                Leases)                                 $__________

         (iii)  [(i) + (ii)]                                         $__________

         (iv)   cash interest payable on all
                Indebtedness (including
                interest on Capitalized Leases)         $__________

         (v)    regularly scheduled principal amounts on
                Indebtedness (including rentals under
                Lease Obligations but excluding any
                payment which pays Indebtedness in full
                to the extent such  payment exceeds the
                immediately preceding scheduled
                principal payment)                      $__________

         (vi)   principal amounts of  all  Indebtedness
                (including under  Lease  Obligations)
\               required to be prepaid or purchased
                during such period                      $__________

         (vii)  [(iv) + (v) + (vi)]                                  $__________

         (viii) Fixed Charge Coverage Ratio
                [(iii)/(vii)]                                        _____ to 1

<PAGE>
5. Section 6.1(d). MAXIMUM TOTAL SECURED INDEBTEDNESS.

   (a)   Maximum Total Secured Indebtedness
         (10% of Total Assets)                                       $__________

   (b)   Actual Total Secured Indebtedness

         Indebtedness of Borrower and its Consolidated
         Subsidiaries (from Section 3(b)(i) above that
         is secured by a Consensual Lien)                            $__________

6. Section 6.1(e). RATIO OF TOTAL UNENCUMBERED ASSETS TO
   TOTAL UNSECURED INDEBTEDNESS.

  (a)    Minimum  Ratio                                              1.75 to 1

  (b)    Actual Ratio

         (i)    Total Assets not subject to a Lien
                other than Liens of the type
                described in clause (a) through
                (f) of the definition of Permitted
                Liens                                   $__________

         (ii)   Aggregate  amount of  Indebtedness
                of Company and its Consolidated
                Subsidiaries  that is not secured
                by a Lien other than Liens of the
                type described in clause (a)
                through (f) of the definition of
                Permitted  Liens                        $__________

         (iii)  [(i)/(ii)]                                           _____ to 1

7. Section 6.3.  CONTINGENT LIABILITIES.

   (a)   Maximum                                                     $5,000,000

   (b)   Actual                                                      $__________

8. Section 6.6. DISPOSITION OF ASSETS.

   (a)   Maximum during any four consecutive fiscal quarters

         (i)    Total Assets as of the first day of
                preceding four consecutive fiscal
                quarters divided by four                $__________

         (ii)   25% times 8(a)(i) above                 $__________

   (b)   Actual (excluding Assets disposed of in an
         Asset Securitization)                                       $__________

9. Section 6.7.  PERMITTED DISTRIBUTIONS.

   (a)   Maximum

         (i)    Cash Flow From Operations (from Section
                4(b)(i) above)                          $__________

         (ii)   95% times 9(a)(i) above                 $__________

   (b)   Actual                                                      $__________

10. Section 6.10  ASSET SECURITIZATION INVESTMENTS.

    (a)  Maximum - 20% of Total Assets                               $__________

    (b)  Actual                                                      $__________
<PAGE>
         IN WITNESS  WHEREOF,  I have executed this  Certificate as of the _____
day of _____________, ___.

                                               FRANCHISE FINANCE CORPORATION
                                               OF AMERICA


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

<PAGE>
                                    EXHIBIT D

                          CONVERSION/CONTINUANCE NOTICE

                                     [Date]

NationsBank, N.A.
Administrative Agent
NationsBank Plaza

901 Main Street, 13th Floor
Dallas, Texas  75202

Attention:  Marie Lancaster

Ladies and Gentlemen:

     The  undersigned  refers to the Credit  Agreement  dated as of February 11,
1999 (the "Credit  Agreement",  the terms  defined  therein being used herein as
therein defined) among Franchise  Finance  Corporation of America,  NationsBank,
N.A., as Administrative  Agent, and each Lender party thereto,  and hereby gives
you notice pursuant to Section 2.9 of the Credit  Agreement that the undersigned
hereby requests Borrowing[s] [a  continuation/conversion of an existing Advance]
[continuations/conversions of existing Advances] under the Credit Agreement, and
in that  connection  sets forth  below the  information  relating to [each] such
Advance as required by Section 2.9 of the Credit Agreement:

          (1) The  principal  amount of  existing  [LIBOR  Advances]  [Base Rate
     Advances] to be [converted] [continued] is $_____________.

          (2) The Business Day of such  [continuation]  [conversion]  is ______,
     _________________.

          (3) The Type of Advance[s] comprising such [continuation] [conversion]
     of Loans is [are] [Base Rate Advance [to the extent of an aggregate  amount
     of  $______]]  [LIBOR  Advance  [to the  extent of an  aggregate  amount of
     $________________]].

          (4) The initial Interest Period for each LIBOR Advance made as part of
     such [continuation] [conversion] is _______ months.

         The undersigned hereby certifies that the following statements are true
on the  date  hereof,  and  will  be  true  on the  date  of the  [continuation]
[conversion],  before and after giving effect thereto and to the  application of
the proceeds therefrom:

                                      -1-
<PAGE>
          (1) the  conditions  precedent  specified in ARTICLE III of the Credit
     Agreement  have  been   satisfied   with  respect  to  the   [continuation]
     [conversion] and will remain  satisfied on the date of such  [continuation]
     [conversion];

          (2) the representations and warranties  specified in ARTICLE IV of the
     Credit  Agreement  are true and correct in all material  respects as though
     made on and as of such date; and

          (3) no event has occurred and is  continuing or would result from such
     [continuation]  [conversion],  which  constitutes  a  Default  or  Event of
     Default.

                                          Very truly yours,

                                          FRANCHISE FINANCE CORPORATION
                                          OF AMERICA, a Delaware corporation

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

                                      -2-
<PAGE>
                                    EXHIBIT E

                                BORROWING NOTICE

                                     [Date]

NationsBank, N.A.,
Administrative Agent
NationsBank Plaza

901 Main Street, 14th Floor
Dallas, Texas  75202

Attention: Teresa Balk

Ladies and Gentlemen:

     The  undersigned  refers to the Credit  Agreement  dated as of February 11,
1999 (the "CREDIT  AGREEMENT",  the terms  defined  therein being used herein as
therein defined) among Franchise  Finance  Corporation of America,  NationsBank,
N.A.,  as  Administrative  Agent,  and each Lender,  and hereby gives you notice
pursuant  to SECTION 2.2 of the Credit  Agreement  that the  undersigned  hereby
requests ______ Borrowing[s] under the Credit Agreement,  and in that connection
sets forth below the  information  relating to [each] such  Advance (a "PROPOSED
BORROWING") as required by SECTION 2.2 of the Credit Agreement:

     Proposed Borrowing:

          (1) The Business  Day of such  Proposed  Borrowing is  ______________,

     ____.

          (2) The Type of Advance[s] comprising such Proposed Borrowing of Loans
     is [are] [Base Advance [to the extent of an aggregate amount of $_______ ]]
     [LIBOR    Advance   [to   the   extent   of   an   aggregate    amount   of
     $____________________]].

          (3) The aggregate amount of such Proposed Borrowing is $____________.

          (4) The initial Interest Period for each LIBOR Advance made as part of
     such Proposed Borrowing is _______ months.]

                                      -1-
<PAGE>
         The undersigned hereby certifies that the following statements are true
on the date  hereof,  and will be true on the  date of the  Proposed  Borrowing,
before and after giving effect  thereto and to the  application  of the proceeds
therefrom:

          (1) the  conditions  precedent  specified in Article III of the Credit
     Agreement have been  satisfied  with respect to the Proposed  Borrowing and
     will remain satisfied on the date of such Proposed Borrowing;

          (2) the representations and warranties  specified in Article IV of the
     Credit  Agreement  are true and correct in all material  respects as though
     made on and as of such date; and

          (3) no event has occurred and is  continuing or would result from such
     Proposed Borrowing, which constitutes a Default or Event of Default.

                                         Very truly yours,

                                         FRANCHISE FINANCE CORPORATION
                                         OF AMERICA, a Delaware corporation

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

                                      -2-
<PAGE>
                                    EXHIBIT F

                       ASSIGNMENT AND ACCEPTANCE AGREEMENT

     THIS ASSIGNMENT AND ACCEPTANCE  AGREEMENT  ("ASSIGNMENT AND ACCEPTANCE") is
dated ________________,  _____, among ________________________  ("ASSIGNOR") and
_____________________  ("ASSIGNEE")  and  NationsBank,  N.A., as  Administrative
Agent ("ADMINISTRATIVE AGENT").

                                   BACKGROUND.

     1. Reference is made to the Credit  Agreement dated as of February 11, 1999
(as it may hereafter be amended or otherwise  modified from time to time,  being
referred to as the "CREDIT  AGREEMENT") among Franchise  Finance  Corporation of
America (the "COMPANY"),  the financial  institutions parties thereto as Lenders
thereunder,  and  Administrative  Agent for Lenders under the Credit  Agreement.
Unless  otherwise  defined,  terms are used  herein  as  defined  in the  Credit
Agreement.

     2. This  Assignment  and Acceptance is made with reference to the following
facts:

          (1) Assignor is a Lender under and as defined in the Credit  Agreement
     and, as such, presently holds a percentage of the rights and obligations of
     Lenders under the Credit Agreement.

          (2) As of the date hereof,  the  Commitment  is  $______________,  and
     Assignor's Specified Percentage is ___%.

          (3) On the terms and conditions set forth below,  Assignor  desires to
     sell and assign to Assignee,  and  Assignee  desires to purchase and assume
     from  Assignor,  as of the Transfer Date (as defined  below),  a portion of
     Assignor's Specified Percentage of the Commitment equal to ______% [express
     as a percentage of Commitment] (the "ASSIGNED PERCENTAGE").

                                   AGREEMENT.

     NOW, THEREFORE, Assignor and Assignee hereby agree as follows:

     1.  Assignor  hereby sells and assigns to Assignee,  without  recourse and,
except as provided in PARAGRAPH 2 of this  Assignment  and  Acceptance,  without
representation  and  warranty,  and Assignee  hereby  purchases and assumes from
Assignor,  Assignor's rights and obligations under the Credit Agreement,  to the
extent  of the  Assigned  Percentage  (including  without  limitation,  (a)  the


                                       -1-
<PAGE>
Assigned  Percentage of the  Commitment as in effect as of the Transfer Date and
(b) _____% of each of the Advances owing to Assignor on the Transfer Date).

     2. Assignor (a) represents and warrants that it is the legal and beneficial
owner of the interest  being  assigned by it hereunder and that such interest is
free and clear of any adverse claim; (b) makes no representation or warranty and
assumes  no  responsibility  with  respect  to  any  statements,  warranties  or
representations  made in or in connection with the Credit  Agreement,  any other
Loan Paper or any other instrument or document  furnished  pursuant thereto,  or
with respect to the execution, legality, validity, enforceability,  genuineness,
sufficiency  or value of the  Credit  Agreement  or any other  Loan Paper or any
other instrument or document furnished  pursuant thereto or any collateral;  and
(c) makes no  representation  or  warranty  and assumes no  responsibility  with
respect to the financial  condition of the Company or any Person the performance
or observance by the Company or any Person of any of its  obligations  under the
Loan Papers or any other instrument or document furnished pursuant thereto.

     3.  Assignee  (a)  confirms  that  it has  received  a copy  of the  Credit
Agreement,  together  with  copies  of  the  most  recent  financial  statements
delivered to Assignor pursuant to SECTION 5.5 of the Credit Agreement,  and such
other  documents and  information  as it has deemed  appropriate to make its own
credit analysis and decision to enter into this  Assignment and Acceptance;  (b)
agrees that it will,  independently and without reliance upon the Administrative
Agent,  Assignor or any other Lender and based on such documents and information
as it shall  deem  appropriate  at the  time,  continue  to make its own  credit
decisions  in taking or not taking  action  under the Credit  Agreement  and the
other Loan Papers; (c) appoints and authorizes the Administrative  Agent to take
such action as agent on its behalf and to exercise  such powers under the Credit
Agreement and the other Loan Papers as are delegated to the Administrative Agent
by the terms  thereof,  together with such powers as are  reasonably  incidental
thereto;  (d) agrees that it will perform in accordance  with their terms all of
the  obligations  which by the terms of the Credit  Agreement and the other Loan
Papers are  required to be performed by it as a Lender;  (e)  specifies,  as its
address for notice and Lending Office,  the office set forth beneath its name on
the signature pages hereof; (f) confirms that it is an Eligible  Assignee[;  AND
(G) ATTACHES THE FORMS PRESCRIBED BY THE IRS CERTIFYING AS TO ASSIGNEE'S  STATUS
FOR PURPOSES OF DETERMINING  EXEMPTION FROM UNITED STATES WITHHOLDING TAXES WITH
RESPECT TO ALL PAYMENTS TO BE MADE TO ASSIGNEE UNDER THE CREDIT  AGREEMENT,  THE
OTHER LOAN PAPERS AND THIS  ASSIGNMENT OR ACCEPTANCE OR SUCH OTHER  DOCUMENTS AS
ARE  NECESSARY TO INDICATE THAT ALL SUCH PAYMENTS ARE SUBJECT TO TAXES AT A RATE
REDUCED BY APPLICABLE TREATY].

     4. The effective date for this  Assignment  and  Acceptance  (the "TRANSFER
DATE")  shall be the date  following  execution  by the parties  hereto on which
Assignor  receives  from Assignee an amount in same day funds equal to _____% of
the  aggregate  principal  amount of  Advances  owing to  Assignor on such date,
together with the $3,500 processing fee required under SECTION 9.4 of the Credit
Agreement,  and Administrative  Agent and the Company receive notice thereof and
an executed copy of this Assignment and Acceptance. The Company acknowledges its
obligations  under the Credit Agreement,  and agrees,  within five Business Days
after  receiving an executed copy of this  Assignment  and Acceptance to execute


                                       -2-
<PAGE>
and  deliver  to  Administrative  Agent,  in  exchange  for the Note  originally
delivered  to  Assignor,  new Notes to the order of  Assignor  and  Assignee  in
amounts equal to their respective Specified Percentages of the Commitment.

     5. As of the Transfer  Date,  (a)  Assignee  shall be a party to the Credit
Agreement and, to the extent provided in this  Assignment and  Acceptance,  have
the rights and  obligations of a Lender  thereunder,  (b) Assignor shall, to the
extent provided in this Assignment and Acceptance,  relinquish its rights and be
released from its obligations  under the Credit Agreement and other Loan Papers,
and (c)  Assignor's  Specified  Percentage  shall be  _______%,  and  Assignee's
Specified Percentage shall be ________%.

     6. From and after the Transfer  Date,  Administrative  Agent shall make all
payments under the Credit  Agreement in respect of the interest  assigned hereby
(including,  without  limitation,  all payments of principal,  interest and fees
with  respect  thereto)  to  Assignee.  Assignor  and  Assignee  shall  make all
appropriate adjustments in payments under the Credit Agreement for periods prior
to the Transfer Date directly between themselves.

     7. This  Assignment and  Acceptance  shall be governed by, and construed in
accordance with, the laws of the state of Texas, without reference to principles
of conflict of laws.

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

Address:                                    ASSIGNEE:

                                            ------------------------------------
Attn:                                       By:
      ------------------------------            --------------------------------
Telephone No.:    (   ) ___-____            Name:
                                                 -------------------------------
Telecopier No.:   (   ) ___-____            Title:
                                                  ------------------------------

                                       -3-
<PAGE>
LIBOR Lending Office:

Attn:
      ------------------------------
Telephone No.:    (   ) ___-____
Telecopier No.:   (   ) ___-____


                                            ADMINISTRATIVE AGENT

                                            NATIONSBANK, N.A.,
                                            Administrative Agent

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

[IF REQUIRED BY CREDIT AGREEMENT]

Accepted and approved this _____ day of ___________, ___:

FRANCHISE FINANCE CORPORATION OF AMERICA

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

                                       -4-
<PAGE>
                                    EXHIBIT G

                             SUBORDINATION AGREEMENT

         SUBORDINATION AGREEMENT,  dated as of  ____________________,  _____ (as
amended,   supplemented,   or  otherwise   modified  from  time  to  time,  this
"AGREEMENT") made by  ______________________,  a _____________  (the "COMPANY"),
Franchise  Finance  Corporation  of America,  a Delaware  corporation  ("FFCA"),
__________________,  a ______________, and __________________, a _______________
(collectively,  the  "SUBORDINATED  CREDITORS")  for the  benefit of the Lenders
(each a  "LENDER")  party  to the  Credit  Agreement  (as  defined  below),  and
NationsBank,  N.A., as the Administrative Agent (the "ADMINISTRATIVE AGENT") for
itself and the Lenders.

                                   BACKGROUND:

     (1) The Lenders and the  Administrative  Agent have  entered  into a Credit
Agreement dated as of February 11, 1999, with FFCA (as amended, supplemented, or
otherwise modified from time to time, the "CREDIT AGREEMENT").  Unless otherwise
defined  herein,  defined terms used herein shall have the meanings  ascribed to
them in the Credit Agreement.

     (2) The Company is or may be  indebted  to one or more of the  Subordinated
Creditors  in the  aggregate  principal  amount of  $100,000,000  or such lesser
amount as shall equal the  aggregate  unpaid  principal  amount of  Intercompany
Loans made by one or more of the Subordinated Creditors to the Company evidenced
by the promissory  note of even date herewith in such  principal  amount (as the
same may hereafter be amended,  supplemented, or otherwise modified from time to
time,  the  "DEBT  AGREEMENT").  All  such  obligations  of the  Company  now or
hereafter  existing under the Debt  Agreement,  whether for principal,  interest
(including, without limitation, interest accruing after the filing of a petition
initiating  any  Proceeding  (as defined  below),  whether or not such  interest
accrues after the filing of such petition for purposes of the Bankruptcy Code of
1978, 11 U.S.C. ss.101 et seq. (the "BANKRUPTCY CODE") or is an allowed claim in
such  Proceeding),  fees,  expenses or otherwise are hereinafter  referred to as
"SUBORDINATED  DEBT".  For purposes of this  Agreement,  "PROCEEDING"  means any
bankruptcy,  insolvency,  arrangement,  reorganization,  receivership, relief or
other  similar  case or  proceeding  under any  federal or state  bankruptcy  or
similar  law or an  assignment  for  the  benefit  of  creditors  or  any  other
marshaling of the assets and liabilities of a Person.

     (3) It is a  condition  precedent  to the making of Advances by the Lenders
under the Credit Agreement that the  Subordinated  Creditors shall have executed
and delivered this Agreement.

                                      -1-
<PAGE>
         NOW, THEREFORE,  in consideration of the premises,  the Company and the
Subordinated Creditors hereby agree as follows:

     SECTION 1. AGREEMENT TO SUBORDINATE. Each of the Subordinated Creditors and
the Company agrees that the  Subordinated  Debt is and shall be subordinate,  to
the extent and in the manner hereinafter set forth, to the prior payment in full
of all  obligations  of the Company now or hereafter  existing  under the Credit
Agreement and the other Loan Papers, whether for principal, interest (including,
without  limitation,  interest,  as  provided in the Notes,  accruing  after the
filing of a petition  initiating  any  Proceeding,  whether or not such interest
accrues after the filing of such petition for purposes of the Bankruptcy Code or
is an allowed  claim in such  Proceeding),  fees,  expenses or  otherwise  (such
obligations  and all  Obligations,  as defined in the  Credit  Agreement,  being
herein  collectively  called  the  "OBLIGATIONS").  For  the  purposes  of  this
Agreement,  the Obligations  shall not be deemed to have been paid in full until
(a) all maturity  dates therefor  shall have elapsed,  (b) the Commitment  shall
have been  terminated,  and (c) the  Lenders  shall have  received  indefeasible
payment  of the  Obligations  in full in cash  (such  date  that the  conditions
described  in (a),  (b),  and (c)  herein  are  satisfied  shall be the  "CREDIT
AGREEMENT TERMINATION DATE").

     SECTION 2. EVENTS OF SUBORDINATION.

     (1) In the event of any dissolution, winding up, liquidation,  arrangement,
reorganization,  adjustment, protection, relief or composition of the Company or
any  Subsidiary  of the  Company  or  any of  their  respective  debts,  whether
voluntary or involuntary,  in any Proceeding of the Company or any Subsidiary of
the Company or otherwise,  the Lenders shall be entitled to receive indefeasible
payment in full in cash of the Obligations before the Subordinated Creditors are
entitled to receive any payment of all or any of the Subordinated  Debt, and any
payment or  distribution  of any kind (whether in cash,  property or securities)
that  otherwise  would be payable  or  deliverable  upon or with  respect to the
Subordinated  Debt in any such  Proceeding  (including  any payment  that may be
payable by reason of any other indebtedness of the Company being subordinated to
payment of the Subordinated Debt) shall,  subject to the following sentence,  be
paid or delivered  directly to the  Administrative  Agent for the account of the
Lenders for  application (in the case of cash) to, or as collateral (in the case
of non-cash  property or  securities)  for,  the  payment or  prepayment  of the
Obligations  until the Obligations  shall have been paid indefeasibly in full in
cash and the Credit Agreement Termination Date to have occurred.

     (2) Upon the  occurrence  of a Default or Event of  Default  and during the
continuance  thereof,  no payment  (including any payment that may be payable by
reason of any other indebtedness of the Company being subordinated to payment of
the  Subordinated  Debt)  shall be made by the  Company for or on account of any
Subordinated Debt, and the Subordinated Creditors shall not take or receive from
the Company or any Subsidiary of the Company, directly or indirectly, in cash or
other  property  or by  set-off  or in  any  other  manner,  including,  without
limitation,  from  or by way of  collateral,  any  payment  of all or any of the
Subordinated  Debt,  unless  and  until  the  Obligations  shall  have been paid
indefeasibly  in full in cash  and the  Credit  Agreement  Termination  Date has
occurred.

                                      -2-
<PAGE>
     (3) During the  continuance  of a Default or Event of Default,  the Lenders
shall be entitled to receive payment in full of all amounts due or to become due
on or in  respect  of all  Obligations  before the  Subordinated  Creditors  are
entitled to receive any payment  (including  any payment which may be payable by
reason  of  the  payment  of  any  other   indebtedness  of  the  Company  being
subordinated to the payment of the Subordinated  Debt) by the Company on account
of the Subordinated Debt.

     SECTION  3. IN  FURTHERANCE  OF  SUBORDINATION.  Each  of the  Subordinated
Creditors agrees as follows:

     (1) All payments or distributions  upon or with respect to the Subordinated
Debt which are received by such Subordinated Creditor contrary to the provisions
of this  Agreement  shall be received  in trust for the benefit of the  Lenders,
shall be  segregated  from other funds and  property  held by such  Subordinated
Creditor and shall be forthwith  paid over to the  Administrative  Agent for the
account  of the  Lenders  in the same form as so  received  (with any  necessary
endorsement)  to be applied (in the case of cash) to, or held as collateral  (in
the case of non-cash  property or securities)  for, the payment or prepayment of
the Obligations in accordance with the terms of the Credit Agreement.

     (2) Each of the  Subordinated  Creditors  hereby  waives  and agrees not to
assert against  Administrative  Agent or any Lender any rights which a guarantor
or surety with respect to any  indebtedness  of the Company or any obligor could
exercise.  The Subordinated  Creditors shall not assert,  enforce,  or otherwise
exercise  (a)  any  right  of  subrogation  to any of the  rights  or  Liens  of
Administrative  Agent or any Lender or any other  Person  against the Company or
any of its  Subsidiaries  or  any  other  obligor  on  all  or any  part  of the
Obligations or any collateral or other  security,  or (b) any right of recourse,
reimbursement,  contribution,  indemnification,  or similar  right  against  the
Company or any of its  Subsidiaries  or any other  obligor on all or any part of
the  Obligations  or  any  collateral  or any  security,  and  the  Subordinated
Creditors  hereby waive any and all of the foregoing  rights and the benefit of,
and any right to  participate  in, any  collateral  or other  security  given to
Administrative  Agent or any Lender or any other Person to secure payment of the
Obligations,  however any such Rights arise, whether hereunder or any other Loan
Paper or by operation of Law until after the Credit  Agreement  Termination Date
has occurred.

     (3)  Each  of  the  Subordinated   Creditor  hereby  irrevocably   appoints
Administrative Agent, such Subordinated Creditor's  attorney-in-fact,  with full
authority in the place and stead of such  Subordinated  Creditor and in the name
of such Subordinated Creditor or otherwise to, after the occurrence of a Default
or Event of Default  and during the  continuance  thereof,  (a) file any claims,
proofs of claim, or other instruments of similar character  necessary to enforce
the  obligations  of the  Company  and  its  Subsidiaries  with  respect  to the
Subordinated  Debt  and  (b)  collect  and  receive  any  and  all  payments  or
distributions  which may be payable or  deliverable  upon or with respect to the
Subordinated  Debt.  Such power of attorney is coupled  with an interest  and is
irrevocable prior to final indefeasible payment in full of the Obligations.

                                      -3-
<PAGE>
     (4) The  Administrative  Agent is  hereby  authorized  to  demand  specific
performance  of this  Agreement,  whether or not the Company shall have complied
with any of the provisions  hereof applicable to it, at any time when any of the
Subordinated Creditors shall have failed to comply with any of the provisions of
this  Agreement  applicable  to it. Each of the  Subordinated  Creditors  hereby
irrevocably  waives any defense based on the adequacy of a remedy at law,  which
might be asserted as a bar to such remedy of specific performance.

     (5) No assets or Properties of the Company or its Subsidiaries shall secure
the Subordinated  Debt,  except to the extent of Liens which are assigned to the
Administrative Agent on behalf of the Lenders.

     SECTION 4. REMEDIES OF THE SUBORDINATED CREDITOR.  Each of the Subordinated
Creditor  agrees  that,  so long as the  Obligations  shall  not have  been paid
indefeasibly  in full in cash  and the  Credit  Agreement  Termination  Date has
occurred,  such Subordinated Creditor will not take, sue for, ask or demand from
the Company or its Subsidiaries, payment of all or any of the Subordinated Debt,
or  exercise  any  remedy  against  the  Company or its  Subsidiaries  available
contractually,  by law or otherwise,  or commence in its capacity as a creditor,
or join with any creditor in commencing,  or directly or indirectly cause in its
capacity as creditor to the Company or its  Subsidiaries to commence,  or assist
the Company or its  Subsidiaries  in  commencing,  any  Proceeding  or any other
remedy against the Company or its Subsidiaries.

     SECTION 5. AGREEMENTS IN RESPECT OF SUBORDINATED DEBT.

     (1) No Subordinated Creditor will:

          (1) Sell, assign, pledge,  encumber or otherwise dispose of any of the
     Subordinated Debt; or

          (2)  Permit  any of the  terms of any of the  Subordinated  Debt to be
     changed or amended (or issue any consent,  waiver or approval which has the
     effect of resulting in any change or  amendment)  in any manner which could
     reasonably  be expected to be  materially  adverse to the  interests of the
     Lenders.

                                      -4-
<PAGE>
     (2) The Subordinated  Creditors shall immediately notify the Administrative
Agent of the  occurrence  of any breach or default under the  Subordinated  Debt
beyond any grace period provided with respect thereto.

     SECTION 6.  AGREEMENT BY THE COMPANY.  The Company  agrees that it will not
make any payment of any of the  Subordinated  Debt (or take any other action) in
contravention of the provisions of this Agreement.

     SECTION 7. OBLIGATIONS HEREUNDER NOT AFFECTED.  All rights and interests of
the  Administrative  Agent and the Lenders  hereunder,  and all  agreements  and
obligations of the Subordinated  Creditors and the Company under this Agreement,
shall remain in full force and effect irrespective of:

          (1) any lack of validity or  enforceability  of the Credit  Agreement,
     the Notes,  the Loan Papers or any other  agreement or instrument  relating
     thereto;

          (2) any change in the time,  manner or place of payment  of, or in any
     other term of, all or any of the  Obligations,  or any other  amendment  or
     waiver of or any consent to any departure  from the Credit  Agreement,  the
     Loan Papers or the Notes,  including,  without limitation,  any increase in
     the  Obligations  resulting from the extension of additional  credit to the
     Company or otherwise;

          (3) any  taking,  release  or  amendment  or waiver of or  consent  to
     departure from any guaranty, for all or any of the Obligations; or

          (4)  any  change,   restructuring  or  termination  of  the  corporate
     structure or existence of the Company or its Subsidiaries.

This Agreement shall continue to be effective or be reinstated,  as the case may
be, if at any time any payment of any of the  Obligations  is  rescinded or must
otherwise  be  returned  by the  Administrative  Agent  or any  Lender  upon the
insolvency,  bankruptcy or  reorganization  of the Company or otherwise,  all as
though such payment had not been made.

     SECTION 8.  WAIVER.  Each of the  Subordinated  Creditors  and the  Company
hereby waive  promptness,  diligence,  notice of acceptance and any other notice
with respect to any of the  Obligations  and this Agreement and any  requirement
that the  Administrative  Agent or any Lender or  exhaust  any right or take any
action against the Company, its Subsidiaries or any other Person or entity.

     SECTION 9. REPRESENTATIONS AND WARRANTIES.  Each Subordinated  Creditor and
the Company each hereby represent and warrant as follows:

                                      -5-
<PAGE>
     (1) The  Subordinated  Debt now  outstanding,  true and complete  copies of
instruments  evidencing which have been furnished to the  Administrative  Agent,
has been duly authorized,  issued and delivered by the Company,  and constitutes
the legal, valid and binding obligation of the Company,  enforceable against the
Company in accordance with its terms.  There exists no default in respect of the
Subordinated Debt.

     (2) Such Subordinated Creditor has, independently and without reliance upon
the  Administrative  Agent  or any  Lender  and  based  on  such  documents  and
information  as it has  deemed  appropriate,  made its own credit  analysis  and
decision to enter into this Agreement.

     SECTION 10.  AMENDMENTS  TO THIS  AGREEMENT.  No amendment or waiver of any
provision  of this  Agreement,  and no  consent to any  departure  by any of the
Subordinated Creditors or the Company herefrom,  shall in any event be effective
unless  the same  shall be in  writing  and  signed as  provided  in the  Credit
Agreement,  and then  such  waiver or  consent  shall be  effective  only in the
specific instance and for the specific purpose for which given.

     SECTION 11. EXPENSES.  Each of the  Subordinated  Creditors and the Company
agree, jointly and severally, upon demand to pay to the Administrative Agent the
amount  of  any  and  all  reasonable  out-of-pocket  expenses,   including  the
reasonable fees and expenses of its counsel and of any experts or agents,  which
the Administrative  Agent or any Lender may incur in connection with the (a) the
administration of this Agreement,  (b) the exercise or enforcement of any of the
rights of the  Administrative  Agent or the Lenders hereunder or (c) the failure
by any Subordinated Creditor to perform or observe any of the provisions hereof.

     SECTION 12.  ADDRESSES  FOR NOTICES.  All notices and other  communications
provided for hereunder shall be in writing (including  telecopier,  telegraphic,
telex or cable  communication)  and mailed,  telecopied,  telegraphed,  telexed,
cabled or delivered to it, if to the Subordinated  Creditors,  at its respective
address specified in the Credit Agreement or the Guaranty  Agreement,  and if to
the  Administrative  Agent or any Lender, at its address specified in the Credit
Agreement,  or as to each party, at such other address as shall be designated by
such party in a written  notice to each other party.  All such notices and other
communications shall, when mailed, telecopied,  telegraphed,  telexed or cabled,
be effective as provided in the Credit Agreement.

     SECTION  13.  NO  WAIVER;   REMEDIES.   No  failure  on  the  part  of  the
Administrative Agent or any Lender to exercise, and no delay in exercising,  any
right  hereunder  shall  operate  as a waiver  thereof;  nor shall any single or


                                      -6-
<PAGE>
partial  exercise of any right hereunder  preclude any other or further exercise
thereof or the exercise of any other right.  The  remedies  herein  provided are
cumulative and not exclusive of any remedies provided by Law.

     SECTION 14. CONTINUING  AGREEMENT;  Assignments Under the Credit Agreement.
This Agreement is a continuing  agreement and shall (a) remain in full force and
effect until the  indefeasible  payment in full in cash of the  Obligations  and
until the  Commitment  has  terminated,  (b) be binding  upon each  Subordinated
Creditor and its successors and assigns, and (c) inure to the benefit of, and be
enforceable  by, the  Administrative  Agent,  the Lenders  and their  respective
permitted successors,  transferees and assigns.  Without limiting the generality
of the foregoing clause (c), any Lender may assign or otherwise  transfer all or
any portion of its rights and  obligations  under,  and in  accordance  with the
terms of, the Credit Agreement to any other Person,  and such other Person shall
thereupon  become vested with all the rights in respect  thereof granted to such
Lender  herein  or  otherwise.  Notwithstanding  any  other  provision  of  this
Agreement,  this Agreement  shall continue to be effective or be reinstated,  as
the  case  may be,  if at any  time any  payment  of any of the  Obligations  is
rescinded  or must  otherwise  be  returned by the  Administrative  Agent or any
Lender upon the insolvency,  bankruptcy or  reorganization of the Company or its
Subsidiaries or otherwise,  all as though such payment had not been made. In any
such  event,  all  payments  and  distributions  upon  or  with  respect  to the
Subordinated  Debt  which have been  theretofore  received  by any  Subordinated
Creditor  shall be deemed to have been  received in trust for the benefit of the
Lenders,  shall  be  segregated  from  other  funds  and  property  held by such
Subordinated  Creditor  and shall be forthwith  paid over to the  Administrative
Agent for the account of the  Lenders in the same form as so received  (with any
necessary  indorsement)  to be  applied  (in the  case of cash)  to,  or held as
collateral (in the case of non-cash  property or securities) for, the payment or
prepayment  of the  Obligations  in  accordance  with the  terms  of the  Credit
Agreement.

     SECTION 15. GOVERNING LAW.

     (1) THIS AGREEMENT AND ALL OTHER LOAN PAPERS RELATED HERETO SHALL BE DEEMED
CONTRACTS  MADE UNDER THE LAWS OF TEXAS AND SHALL BE  CONSTRUED  AND ENFORCED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF TEXAS,  EXCEPT TO THE EXTENT FEDERAL
LAWS GOVERN THE VALIDITY, CONSTRUCTION, ENFORCEMENT AND INTERPRETATION OF ALL OR
ANY PART OF THIS  AGREEMENT  AND ALL LOAN PAPERS.  WITHOUT  EXCLUDING  ANY OTHER
JURISDICTION,  EACH  SUBORDINATED  CREDITOR AGREES THAT THE COURTS OF TEXAS WILL
HAVE JURISDICTION OVER PROCEEDINGS IN CONNECTION HEREWITH.

                                      -7-
<PAGE>
     (2) THE COMPANY  HEREBY WAIVES  PERSONAL  SERVICE OF ANY LEGAL PROCESS UPON
IT. IN ADDITION,  THE COMPANY AGREES THAT SERVICE OF PROCESS MAY BE MADE UPON IT
BY REGISTERED  MAIL (RETURN  RECEIPT  REQUESTED)  DIRECTED TO THE COMPANY AT ITS
ADDRESS  DESIGNATED FOR NOTICE UNDER THIS AGREEMENT AND SERVICE SO MADE SHALL BE
DEEMED TO BE  COMPLETED  UPON  RECEIPT BY THE  COMPANY.  NOTHING IN THIS SECTION
SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE  AGENT OR ANY LENDER TO SERVE LEGAL
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

     SECTION 16. WAIVER OF JURY TRIAL.  TO THE MAXIMUM EXTENT  PERMITTED BY LAW,
THE PARTIES  HERETO HEREBY WAIVE ANY RIGHT THAT THEY MAY HAVE TO A TRIAL BY JURY
OF ANY DISPUTE (WHETHER A CLAIM IN TORT, CONTRACT, EQUITY, OR OTHERWISE) ARISING
UNDER OR  RELATING  TO THIS  AGREEMENT,  THE OTHER LOAN  PAPERS,  OR ANY RELATED
MATTERS,  AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING
WITHOUT A JURY.

     SECTION 17.  ENTIRE  AGREEMENT.  THIS  AGREEMENT  AND THE OTHER LOAN PAPERS
RELATED HERETO REPRESENT THE FINAL AGREEMENT  BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

     SECTION 18.  COUNTERPARTS.  This Agreement may be executed in any number of
counterparts,  all of which taken  together  shall  constitute  one and the same
instrument.  In making proof of any such agreement, it shall not be necessary to
produce  or  account  for any  counterpart  other  than one  signed by the party
against which enforcement is sought.

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                                      -8-
<PAGE>
         IN WITNESS  WHEREOF,  each party hereto has caused this Agreement to be
duly executed and delivered by its officer  thereunto duly  authorized as of the
date first above written.

                                         FRANCHISE FINANCE CORPORATION
                                         OF AMERICA

                                         By: /s/  John R. Barravecchia
                                                 -------------------------------
                                                  John R. Barravecchia
                                                  Executive Vice President and
                                                  Chief Financial Officer

                                         (OTHER SUBORDINATED CREDITOR)

                                         By: /s/
                                                 -------------------------------
                                                  Name:
                                                        ------------------------
                                                  Title:
                                                        ------------------------

                                         (OTHER SUBORDINATED CREDITOR)

                                         By: /s/
                                                 -------------------------------
                                                  Name:
                                                        ------------------------
                                                  Title:
                                                        ------------------------

                                         (THE COMPANY)

                                         By: /s/
                                                 -------------------------------
                                                  Name:
                                                        ------------------------
                                                  Title:
                                                        ------------------------

                                      -9-
<PAGE>

_________, 199___
Page 1

                                    EXHIBIT H

                       [Form of Confidentiality Agreement]

                            CONFIDENTIALITY AGREEMENT

                                                                          [Date]

[Insert Name and Address
of Prospective Participant
or Assignee]

     Re:  Credit  Agreement  dated as of  February  11,  1999,  among  Franchise
          Finance  Corporation  of America  ("FFCA"),  the lenders named therein
          (the "Lenders"), and NationsBank, N.A., as Administrative Agent

Dear ______________:

     As a Lender  under  the  above-referenced  Credit  Agreement  (the  "Credit
Agreement"),  we have  agreed  with FFCA  pursuant  to Section 9.9 of the Credit
Agreement  to  use  reasonable  precautions  to  keep  confidential,  except  as
otherwise  provided therein,  all non-public  information  identified by FFCA as
being  confidential  at the time the same is  delivered  to us  pursuant  to the
Credit  Agreement,   including,  without  limitation,  written  information  and
information  transferred  visually or  electronically,  together with all notes,
analyses, compilations, studies or other documents that contain all or a portion
of such information (collectively, "Confidential Information").

     As provided in said  Section  9.9, we are  permitted  to provide  you, as a
prospective   [participant]   [assignee  Lender],   with  certain   Confidential
Information  subject to the  execution  and delivery by you,  prior to receiving
Confidential  Information,  of a  Confidentiality  Agreement  in this  form.  No
Confidential  Information will be made available to you until your execution and
return to us of this Confidentiality Agreement.

     Accordingly,  in  consideration  of the foregoing,  you agree (on behalf of
yourself and each of your affiliates, directors, officers, employees, agents and
representatives)  that (A) the Confidential  Information will not be used by you
except in connection with the proposed  [participation]  [assignment]  mentioned
above and (B) you shall keep all Confidential Information confidential, provided
that nothing herein shall limit the disclosure of any  Confidential  Information
(i) to the extent  required by statute,  rule,  regulation or judicial  process,
(ii)  to  your  counsel  or to  counsel  for  any of the  other  Lenders  or the
Administrative  Agent,  (iii) to your bank  examiners,  auditors or accountants,
(iv) to the Administrative Agent or any other Lender, (v) in connection with any
<PAGE>
_________, 199___
Page 2

litigation to which you or any one or more of the Lenders are a party; provided,
further, that, unless specifically  prohibited by applicable law or court order,
you agree, prior to disclosure  thereof,  to give prompt notification to FFCA of
any  request  for  disclosure  of  any  Confidential   Information  (x)  by  any
governmental  agency or  representative  thereof (other than any such request in
connection with an examination of your financial  condition by such governmental
agency) or (y) pursuant to legal process.  With respect to any disclosure of any
Confidential  Information set forth in subclause (x) or (y) of clause (v) above,
you agree, to the extent not prohibited by applicable law or court order, to (i)
cooperate  with  FFCA  so  that  FFCA  may  seek a  protective  order  or  other
appropriate  remedy  and  (ii)  use its  best  efforts  to  obtain  an  order or
reasonable   assurance  that  confidential   treatment  will  be  afforded  such
information.

     At the earlier of such time as (i) you are no longer a Lender,  an assignee
or participant under the Credit  Agreement,  or (ii) all Advances (as defined in
the  Credit  Agreement)  under  the  Credit  Agreement  are paid in full and the
Commitment  (as defined in the Credit  Agreement)  is  terminated,  upon written
request by FFCA and subject to any  restrictions  or regulations of any Tribunal
having supervisory authority over you, you shall return to FFCA the Confidential
Information  which is in tangible  form,  including  any copies which you or any
persons to whom you transmitted the Confidential  Information may have made, and
you and they will destroy all abstracts, summaries thereof or references thereto
in your and their  documents,  and after written request by FFCA, shall promptly
provide  FFCA  reasonable  assurance  in writing  that you have  destroyed  such
documents.

     It is  acknowledged  that FFCA is in the business of  financing  commercial
real estate, equipment and enterprises and from time to time you and FFCA may be
in  direct  competition  with  each  other for  business.  This  Confidentiality
Agreement  does not  constitute a license for you to use,  employ or exploit the
Confidential  Information to gain any advantage in the marketplace against FFCA;
it  being  expressly   understood  and  agreed  that  any  use,   employment  or
exploitation  of  the  Confidential  Information  for a  purpose  not  expressly
permitted herein is strictly prohibited.

     This  Confidentiality  Agreement  contains the entire  understanding of the
parties to this Confidentiality  Agreement with respect to the matters addressed
in this Confidentiality Agreement and may be amended, modified,  supplemented or
altered  only by a writing  duly  executed by you and us which is  consented  in
writing to by FFCA and any prior agreements or  understandings,  whether oral or
written, are entirely superseded by this Confidentiality Agreement.
<PAGE>
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Page 3

     The covenants,  conditions and agreements contained in this Confidentiality
Agreement  shall bind you and use and inure to the  benefit of you,  us and FFCA
and their respective parent corporations,  affiliated  companies,  subsidiaries,
officers, employees, partners, agents and successors and assigns.

     Would you please indicate your agreement to the foregoing by signing at the
place provided below the enclosed copy of this Confidentiality Agreement.

                                        Very truly yours,


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

THE FOREGOING IS AGREED TO AS
OF THE DATE OF THIS LETTER.

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