<PAGE>   1

                                                                 EXHIBIT 10.22


                             PARTICIPATION AGREEMENT

                          Dated as of October 28, 1999

                                      among

                             TENNECO PACKAGING INC.,
                            as Lessee, and Guarantor

                           FIRST SECURITY BANK, N.A.,
                      not individually, except as expressly
                   stated herein, but solely as Owner Trustee
                          under the Temple Trust 1997-1

                           THE VARIOUS BANKS AND OTHER
                     LENDING INSTITUTIONS WHICH ARE PARTIES
                            HERETO FROM TIME TO TIME,
                                 as the Holders

                           THE VARIOUS BANKS AND OTHER
                           LENDING INSTITUTIONS WHICH
                      ARE PARTIES HERETO FROM TIME TO TIME,
                                 as the Lenders

                                       and

                              BANK OF AMERICA N.A.,
                         as Administrative Agent for the
                                     Lenders









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                                TABLE OF CONTENTS
                                -----------------

                                                                          Page
                                                                          ----

SECTION 1.   The Loans........................................................1

SECTION 2.   Holder Fundings..................................................1

SECTION 3.   Summary of Transactions..........................................2
    3.1.     Operative Agreements.............................................2
    3.2.     Property Purchase................................................2

SECTION 4.   The Closings.....................................................2
    4.1.     Execution Date and Initial Closing Date..........................2
    4.2.     Initial Closing Date; Property Closing Dates.....................2

SECTION 5.   Fundings; Lessee Delivery of Notices.............................3
    5.1.     General..........................................................3
    5.2.     Procedures for Funding...........................................3
    5.3.     Conditions to the Holders' and the Lenders' Obligations
             to Advance Funds on the Initial Closing Date or Funds for the
             Acquisition of Property..........................................4
    5.4.     Inspection of Documents; Hold Harmless; Removal of Properties....7

SECTION 6.   Conditions of the Initial Closing................................8
    6.1.     Conditions to the Lessor's and the Holders' Obligations..........8
    6.2.     Conditions to the Lessee's Obligations...........................9
    6.3.     Conditions to the Agent's Obligations...........................11

SECTION 7.   Representations and Warranties on the Initial Closing Date......12
    7.1.     Representations and Warranties of the Initial Holders...........12
    7.2.     Representations and Warranties of the Owner Trustee.............13
    7.3.     Representations and Warranties of the Lessee....................15
    7.4.     Representations and Warranties of the Agent.....................24

SECTION 8.   General Covenants of the Lessee and the Guarantor...............25
    8.1.     Covenants of the Lessee.........................................25

SECTION 9.   Payment of Certain Expenses.....................................35
    9.1.     Transaction Expenses............................................35
    9.2.     Certain Fees and Expenses.......................................36

    9.3.     Unused Fee and Holder Unused Fee................................36



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SECTION 10.  Other Covenants and Agreements..................................37
    10.1.    Cooperation with the Lessee.....................................37
    10.2.    Covenants of the Owner Trustee and the Holders..................37
    10.3.    Lessee Covenants, Consent and Acknowledgment....................39
    10.4 .   Sharing of Certain Payments.....................................41
    10.5.    Grant of Easements, Voting at Meetings, etc.....................41

SECTION 11. Credit Agreement and Trust Agreement.............................41
    11.1.    Lessee's Credit Agreement Rights................................41
    11.2.    Lessee's Trust Agreement Rights.................................42

SECTION 12. Transfer of Interest.............................................42
    12.1.    Restrictions on Transfer........................................42
    12.2.    Effect of Transfer..............................................43

SECTION 13. Indemnification..................................................43
    13.1.    General Indemnity...............................................43
    13.2.    General Tax Indemnity...........................................46

SECTION 14. Miscellaneous....................................................50
    14.1.    Survival of Agreements..........................................50
    14.2.    No Broker, etc..................................................50
    14.3.    Notices.........................................................51
    14.4.    Counterparts....................................................52
    14.5.    Amendments and Termination......................................52
    14.6.    Headings, etc...................................................52
    14.7.    Parties in Interest.............................................52
    14.8.    GOVERNING LAW; WAIVERS OF JURY TRIAL............................52
    14.9.    Submission to Jurisdiction; Waivers.............................53
    14.10.   Severability....................................................53
    14.11.   Liability Limited...............................................53
    14.12.   Rights of Lessee................................................55
    14.13.   Further Assurances..............................................55
    14.14.   Calculations under Operative Agreements.........................55
    14.15.   Confidentiality.................................................55
    14.16.   Calculation of Rent, Interest, Holder Yield and Fees............56
    14.17.   Assignment Clause...............................................56



                                      -ii-



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Schedule I   Initial Holders

Schedule II  Litigation

Schedule III Liens

Exhibit A    Requisition Form A
    Schedule 1    Legal Description of Land
    Schedule 2    Description of Improvements
    Schedule 3    Description of Equipment

Exhibit B  Tenneco Packaging Inc. Officer's Certificate
    Schedule 1    [itemized expenditures]

Exhibit C  Form of Opinion of Counsel to Tenneco Packaging Inc. and Tenneco Inc.

Exhibit D  Tenneco Packaging Inc. Officer's Certificate

Exhibit E  Tenneco Packaging Inc. Secretary's Certificate

Exhibit F  First Security Bank, N.A. Officer's Certificate

Exhibit G  First Security Bank, N.A. Certificate of Assistant Secretary

Exhibit H  Form of Opinion of Counsel to First Security Bank, N.A.

Exhibit I  Description of Land for Temple Property





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                             PARTICIPATION AGREEMENT

         THIS PARTICIPATION AGREEMENT, dated as of October 28, 1999 (as amended,
modified, restated or supplemented from time to time, this "Agreement"), is by
and among TENNECO PACKAGING INC., a Delaware corporation ("Tenneco Packaging"),
as Lessee (Tenneco Packaging and any permitted assignee thereof under the Lease
being referred to as the "Lessee") and as Guarantor ("Tenneco Packaging" or the
"Guarantor"); FIRST SECURITY BANK, N.A., a national banking association, not
individually (in its individual capacity, the "Trust Company"), except as
expressly stated herein, but solely as Owner Trustee under the Temple Trust
1997-1 (the "Owner Trustee", "Borrower" or the "Lessor"); BANK OF AMERICA N.A.,
as Administrative Agent (in such capacity, the "Agent") for the Lenders; BANK OF
AMERICA N.A., a national banking association and the various other banks and
lending institutions which are parties hereto from time to time as Holders; BANK
OF AMERICA N.A., and the various other banks and lending institutions which are
parties hereto from time to time as Lenders. Capitalized terms used but not
otherwise defined in this Agreement shall have the meanings set forth in
Appendix A hereto.

         In consideration of the mutual agreements herein contained and other
good and valuable consideration, receipt of which is hereby acknowledged, the
parties hereto hereby agree as follows:

         SECTION 1. The Loans. The Lenders have agreed to make Loans to the
Lessor from time to time in an aggregate principal amount of up to the aggregate
amount of the Commitments of the Lenders in order for the Lessor to acquire or
refinance, as applicable, the Properties and certain Improvements and Equipment
pursuant to the terms and provisions hereof, and in consideration of the receipt
of the proceeds of such Loans, the Lessor will issue the Notes (together with
any note or notes issued in exchange or substitution therefor in accordance with
the Credit Agreement, the "Notes"). The Loans shall be made and the Notes shall
be issued pursuant to the Credit Agreement. Pursuant to Section 5 of this
Agreement and Section 2 of the Credit Agreement, the Loans will be made to the
Lessor from time to time upon the appropriate submission by the Lessee of a
Requisition therefor, in accordance with this Agreement and the other Operative
Agreements. The Loans and the obligations of the Lessor under the Credit
Agreement shall be secured by the Collateral.

         SECTION 2. Holder Fundings. Subject to the terms and conditions of this
Agreement and in reliance on the representations and warranties of each of the
parties hereto contained herein or made pursuant hereto on each date Fundings
are made in accordance with Section 5 hereof, each Holder shall make a Holder
Funding on a pro rata basis to the Owner Trustee with respect to the Temple
Trust 1997-1 based on its Holder Commitment in an amount in immediately
available funds such that the aggregate of all Holder Fundings shall be three
and seventy-five one hundredths percent (3.75%) of the amount of the Funding
being funded on such date; provided, no Holder shall be obligated for any Holder
Funding in excess of its pro rata share of the Available Holder Commitment. The
aggregate amount of Holder Fundings shall be




<PAGE>   6



up to the aggregate amount of the Holder Commitments. No prepayment or any other
payment with respect to any Funding shall be permitted such that the Holder
Funding with respect to such Funding is less than 3.75% of the outstanding
amount of such Funding, except in connection with termination or expiration of
the Term or in connection with the exercise of remedies relating to the
occurrence of a Lease Event of Default. The representations, warranties,
covenants and agreements of the Holders herein and in the other Operative
Agreements are several, not joint, and not joint and several.

         SECTION 3. Summary of Transactions.

         3.1. Operative Agreements. On the date hereof (the "Execution Date"),
each of the respective parties hereto and thereto shall execute and deliver this
Agreement, the Lease, the Credit Agreement, the Notes, the Certificates, the
Trust Agreement, the Security Agreement and such other documents, instruments,
certificates and opinions of counsel as agreed to by the parties hereto.

         3.2. Property Purchase. On the Initial Closing Date and on each
Property Closing Date thereafter and subject to the terms and conditions of this
Agreement (a) the Holders will each make a Holder Funding in accordance with
Sections 2 and 5 of this Agreement and the terms and provisions of the Trust
Agreement, (b) the Lenders will make Loans in accordance with Sections 1 and 5
of this Agreement and the terms and provisions of the Credit Agreement, and (c)
the Lessor will purchase, refinance or lease pursuant to a Ground Lease, the
applicable Property identified by the Lessee, and grant the Agent a Lien on such
Property by execution of the required Security Documents.

         SECTION 4. The Closings.

         4.1. Execution Date and Initial Closing Date. All documents and
instruments required to be delivered on either the Execution Date or the Initial
Closing Date shall be delivered at the offices of Mayer, Brown & Platt, 1675
Broadway, New York, New York 10019 or at such other location as may be
determined by the Lessor, the Agent and the Lessee.

         4.2. Initial Closing Date; Property Closing Dates. The Lessee shall
deliver to the Lessor and the Agent a requisition (a "Requisition"), in the form
attached hereto as Exhibit A-1 (for the Initial Closing Date) and Exhibit A-2
(for each Property Closing Date after the Initial Closing Date) or in such other
form as is reasonably satisfactory to the Lessor, and the Agent, in connection
with (a) the Initial Closing Date relating to the Transaction Expenses and other
fees, expenses and disbursements payable by the Lessor pursuant to Section
9.1(a) with invoices (in form and substance reasonably acceptable to the Agent
and the Lessor) for such Transaction Expenses and other fees, expenses and
disbursements attached to such Requisition, and (b) each Property Closing Date
relating to each Acquisition Funding pursuant to Section 5.3. Upon the written
request of any Lender to the Agent, the Agent shall deliver a copy of said
Requisition to such Lender.




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         SECTION 5. Fundings; Lessee Delivery of Notices.

         5.1. General. To the extent funds have been made available to the
Lessor as Loans by the Lenders and Holder Fundings by the Holders, the Lessor
will use such funds from time to time in accordance with the terms and
conditions of this Agreement and the other Operative Agreements at the direction
of the Lessee to acquire Properties (including Equipment) in accordance with the
terms of this Agreement, the Lease and the other Operative Agreements, and (ii)
to pay Transaction Expenses, fees, expenses and other disbursements payable by
the Lessor under Sections 9.1 (a) and (b).

         5.2. Procedures for Funding.

              (a) The Lessee shall designate the date for Fundings hereunder
         in accordance with the terms and provisions hereof. Contemporaneously
         with the consummation of the Spin-Off, the Lessee shall deliver to, the
         Lessor and the Agent with respect to the Initial Closing Date, a
         Requisition as described in Section 4.2 hereof (including without
         limitation such information regarding the Land, Improvements and
         Equipment included within the Group I Properties as the Agent and the
         Lessor shall reasonably require). Not less than (i) one (1) Business
         Day prior to the date of any requested Base Rate Funding and (ii) three
         (3) Business Days prior to the date of any requested Eurodollar
         Funding, the Lessee shall deliver to the Lessor and the Agent, with
         respect to each Property Closing Date after the Initial Closing Date, a
         Requisition as described in Section 4.2 hereof (including without
         limitation a legal description of the Land, a schedule of the
         Improvements, if any, and a schedule of the Equipment, if any, to be
         acquired on such date and a Completion Certificate with respect to any
         improvements on such Land, each of the foregoing in a form reasonably
         acceptable to the Lessor and the Agent).

              (b) Each Requisition shall: (i) be irrevocable, (ii) request
         funds in an amount that is not in excess of the total aggregate of the
         Available Commitments plus the Available Holder Commitments at such
         time, and (iii) request that the Holders make Holder Fundings and that
         the Lenders make Loans to the Lessor for the payment of the Property
         Acquisition Costs.

              (c) Subject to the terms and conditions of the Credit Agreement
         and the Trust Agreement and subject to the satisfaction of the
         conditions precedent set forth in Section 5.3, as applicable, on the
         Initial Closing Date and on each Property Closing Date after the
         Initial Closing Date, (i) the Lenders shall make Loans to the Lessor in
         an aggregate amount equal to 96.25% of the Requested Funds specified in
         any Requisition such loans to be apportioned as follows, (y) with
         respect to the Group I Properties, such loans to be apportioned 81.00%
         to the Series A Loans and 15.25% to the Series B Loans, and (z) with
         respect to the Group II Properties, 84.50% to Series A Loans and 11.75%
         to Series B Loans, up to aggregate principal amount equal to the
         Available Commitments, (ii) each




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         Holder shall make a pro rata Holder Funding based on its Holder
         Commitment in an amount such that the aggregate of all Holder Fundings
         at such time shall be 3.75% of the balance of the Requested Funds
         specified in such Requisition, provided no such Holder Funding shall
         exceed such Holder's pro rata share of the Available Holder
         Commitments; and (iii) the total amount of such Loans and Holder
         Fundings made on such date shall (w) be used by the Lessor to pay the
         Property Acquisition Costs within three (3) Business Days after the
         receipt by the Lessor of such Funding, (y) be used by the Lessor to
         pay Transaction Expenses, fees, expenses and other disbursements to
         the extent permitted under Section 5.3, or (z) be disbursed by the
         Lessor, on the date of such Funding, to the Lessee to pay Property
         Costs, as applicable. Any such amounts held by the Lessor (or the
         Agent on behalf of the Lessor) shall be subject to the lien of the
         Security Agreement.

         5.3. Conditions to the Holders' and the Lenders' Obligations to Advance
Funds on the Initial Closing Date or Funds for the Acquisition of Property.

              (a) The obligations of each Holder to make Holder Fundings,
         and of each Lender to make Loans, to the Lessor on the Initial Closing
         Date and each Property Closing Date thereafter for the purpose of
         providing funds to the Lessor necessary to pay Transaction Expenses,
         fees, expenses and other disbursements payable by the Lessor under
         Section 9.1 of this Agreement, are subject to the prior or
         contemporaneous satisfaction or waiver of the following conditions
         precedent:

                  (i)   the correctness in all material respects on such
              Property Closing Date of the representations and warranties of
              the Owner Trustee, the Lessee and the Holders (other than such
              Holder) contained herein and in each of the other Operative
              Agreements;

                  (ii)  the performance in all material respects by the
              Lessee of its agreements contained herein and in the other
              Operative Agreements which covenants are to be performed by
              them on or prior to each such Property Closing Date;

                  (iii) the satisfaction of all conditions to any such
              Holder Funding or Loan set forth in any Operative Agreement;

                  (iv)  the Agent and the Owner Trustee shall have
              received a fully executed copy of a counterpart of any
              Requisition, appropriately completed;

                  (v)   title to each Property being acquired on such
              Property Closing Date shall conform to the representations and
              warranties set forth in Section 7.3(j) hereof;





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                  (vi)   except with respect to the Temple Property, the
              Lessee shall have delivered to the Lessor a copy of the Deed
              with respect to the Land and existing Improvements (if any), a
              copy of the Ground Lease (if any) with respect to the Land,
              and a copy of the Bill of Sale with respect to the Equipment,
              in each case for such of the foregoing as are being acquired
              on such Property Closing Date; and such Land and existing
              Improvements shall be located in an Approved State;

                  (vii)  there shall not have occurred and be continuing
              any Default or Event of Default under any of the Operative
              Agreements and no Default or Event of Default under any of the
              Operative Agreements shall have occurred after giving effect
              to the Funding requested by such Requisition;

                  (viii) the Lessee shall have delivered to the Agent
              and the Owner Trustee, title insurance commitments to issue
              policies in favor of the Owner Trustee and the Agent with
              respect to each Property being acquired on such Property
              Closing Date, such policies being in form and substance
              reasonably acceptable to the Owner Trustee and the Agent, with
              such title exceptions thereto as are reasonably acceptable to
              the Owner Trustee and the Agent; and the Lessee shall deliver
              to the Owner Trustee and the Agent, as soon as possible after
              such Property Closing Date, the final title insurance policies
              for each such Property, taking no specific exception for any
              Lien filed on account of materials furnished or labor
              performed in connection with the Property, and otherwise
              showing no additional exceptions to coverage (other than those
              exceptions to title constituting Permitted Encumbrances);

                  (ix)   the Lessee shall have delivered to the Agent and
              the Owner Trustee a "Phase I" environmental site assessment
              with respect to each such Property, prepared by an independent
              recognized professional reasonably acceptable to the Agent and
              the Owner Trustee and in a form and substance that is
              reasonably acceptable to the Agent and the Owner Trustee;

                  (x)    the Lessee shall have delivered to the Agent and
              the Owner Trustee a survey of each such Property, prepared by
              an independent recognized professional meeting the then
              current minimum standard detail requirements for American Land
              Title Association/American Congress of Surveying and Mapping
              (ALTA/ACSM) Land Title Surveys certified to the Agent and
              otherwise reasonably acceptable to the Agent;

                  (xi)   the Lessee shall have caused to be delivered to
              the Agent and the Owner Trustee a legal opinion (in form and
              substance reasonably satisfactory to the Agent and the Owner
              Trustee) from counsel located in the state where each such
              Property is located or, if the Agent and the Owner Trustee
              have previously received an opinion from counsel in such
              state, the Agent and the Owner Trustee




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<PAGE>   10



              (in their discretion) may accept an update or a reaffirmation of
              the previous opinion, in each case addressed to each Lender;

                  (xii)   the Owner Trustee and the Agent shall be
              satisfied, in their sole discretion, that the acquisition or
              ground leasing of each such Property and the execution of the
              Mortgage Instrument and the other Security Documents will not
              adversely affect in any material respect the rights of the
              Owner Trustee, the Holders, the Agent or the Lenders under or
              with respect to the Operative Agreements in effect as of such
              Property Closing Date;

                  (xiii)  the Lessee shall have delivered to the Agent
              and the Owner Trustee, with respect to each such Property,
              invoices for the various Transaction Expenses and other fees,
              expenses and disbursements referenced in Section 9.1 (a) or
              (b) of this Agreement;

                  (xiv)   the Lessor shall have delivered to the Agent a
              Mortgage Instrument and Lender Financing Statements with
              respect to each such Property in a form reasonably acceptable
              to the Agent and Lessee;

                  (xv)    the Lessee shall have delivered to the Lessor
              with respect to each such Property, a Lease Supplement and a
              memorandum regarding the Lease and such Lease Supplement (such
              memorandum to be substantially in the form attached to the
              Lease as Exhibit C, and in each case in form suitable for
              recording);

                  (xvi)   the Lessee shall have delivered to the Lessor
              with respect to each such Property Lessor Financing Statements
              (or continuation statements, as applicable) executed by the
              Lessee;

                  (xvii)  if any such Property is subject to a Ground
              Lease, the Lessee shall have caused a lease memorandum (in
              form and substance satisfactory to the Agent) to be delivered
              to the Agent for such Ground Lease;

                  (xviii) counsel for the ground lessor of each such
              Property subject to a Ground Lease shall have issued to the
              Lessor, the Agent and the Holders, an opinion satisfactory to
              the Agent;

                  (xix)   all necessary Governmental Actions required by
              any law or regulation enacted, imposed or adopted on or prior
              to each such date or by any change in facts or circumstances
              on or prior to each such date, shall have been obtained or
              made and be in full force and effect;



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<PAGE>   11


                  (xx)    the Lessee shall cause (i) Uniform Commercial
              Code lien searches, tax lien searches and judgment lien searches
              regarding each of the Lessee and the Lessor to be conducted (and
              copies thereof to be delivered to the Agent and the Owner
              Trustee) in the state and county (or other jurisdiction) in which
              such Property is located, by a nationally recognized search
              company acceptable to the Owner Trustee and the Agent and (ii)
              the liens referenced in such lien searches which are
              objectionable to the Owner Trustee or the Agent to be either
              removed or otherwise handled in a manner reasonably satisfactory
              to the Owner Trustee and the Agent;

                  (xxi)   by the later to occur of (A) each Property
              Closing Date or (B) the date that is ninety (90) days after
              the Initial Closing Date or any Property Closing Date
              thereafter, as applicable, the Agent shall have received an
              Appraisal for the Property or Properties described in the
              applicable Requisition showing that each such Property has a
              value at least equal to ninety-five percent (95%) of the
              expected total Property Cost of such Property and all
              Improvements constructed thereon; and

                  (xxii)  the Lessee will deliver to the Agent, and the
              Lessor an Officer's Certificate in the form attached hereto as
              Exhibit B - specifying (a) with respect to the Property for
              which a Requisition is submitted, the Completion Date for the
              construction of Improvements at the Property, (b) the
              aggregate Property Cost for the Property and (c) if any of the
              Property consists of Tangible Personal Property, a separate
              statement of the Property Cost attributable to such Tangible
              Personal Property. Such Officer's Certificate shall also
              include, in form and in detail reasonably acceptable to the
              Agent and the Holders, a summary of the Property Cost figures
              and a certification to the effect that all Improvements have
              been made in accordance with all applicable material Legal
              Requirements, in a good and workmanlike manner and otherwise
              in substantial compliance with the standards and practices of
              the Lessee with respect to similar properties and improvements
              owned by the Lessee, and that no consent or approval of any
              Person is required for such Improvements except for consents
              and approvals which have already been obtained and consents
              and approvals the lack of which would not be reasonably likely
              to (A) materially and adversely affect the use and occupancy
              of the Improvements or (B) have a Material Adverse Effect.

         5.4. Inspection of Documents; Hold Harmless; Removal of Properties. Any
document or item (including without limitation any environmental report)
delivered to the Agent shall be available for inspection at any time during
ordinary business hours upon reasonable notice by any Lender or Holder. The
Agent shall not incur any liability to any Lender, any Holder, the Owner Trustee
or any other Person (and each Lender, each Holder, the Owner Trustee, and the
Lessee hereby holds the Agent harmless from any such liability) as a result of
any such document or item, any information contained therein, the failure to
receive any such document, or the Agent's



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<PAGE>   12




approval of any Property. In the event the Majority Lenders reasonably determine
that any environmental site assessment reveals an Environmental Violation and
they or the Agent so notify the Lessee, then the Lessee shall remedy or purchase
such Property in accordance with Section 15.2 of the Lease.


         SECTION 6. Conditions of the Initial Closing.

         6.1. Conditions to the Lessor's and the Holders' Obligations. The
obligations of the Lessor and the Holders to consummate the transactions
contemplated by this Agreement are subject to (i) the accuracy and correctness
in all material respects on the Initial Closing Date of the representations and
warranties of the other parties hereto contained herein, (ii) the accuracy and
correctness in all material respects on the Initial Closing Date of the
representations and warranties of the other parties hereto contained in any
other Operative Agreement or certificate delivered pursuant hereto or thereto,
(iii) the performance in all material respects by the other parties hereto of
their respective agreements contained herein and in the other Operative
Agreements and to be performed by them on or prior to the Initial Closing Date
and (iv) the satisfaction, or waiver by the Lessor and the Holders, of all of
the following conditions on or prior to the Initial Closing Date:

              (a) Each of the Operative Agreements shall have been duly
         authorized, executed and delivered by the parties thereto, other than
         the Lessor and the Holders, and shall be in full force and effect, and
         no Default or Event of Default shall exist thereunder (both before and
         after giving effect to the transactions contemplated by the Operative
         Agreements), and the Lessor shall have received a fully executed copy
         of each of the Operative Agreements (other than the Notes of which it
         shall have received specimens). The Operative Agreements (or memoranda
         thereof), any supplements thereto and any financing statements and
         fixture filings in connection therewith required under the Uniform
         Commercial Code shall have been filed or shall be promptly filed, if
         necessary, in such manner as to enable the Lessee's counsel to render
         its opinion referred to in Section 6.1(g) hereof;

              (b) All taxes, fees and other charges in connection with the
         execution, delivery, recording, filing and registration of the
         Operative Agreements shall have been paid or provision for such payment
         shall have been made to the reasonable satisfaction of the Lessor and
         the Agent;

              (c) No action or proceeding shall have been instituted, nor
         shall any action or proceeding be threatened, before any Governmental
         Authority, nor shall any order, judgment or decree have been issued or
         proposed to be issued by any Governmental Authority (i) to set aside,
         restrain, enjoin or prevent the full performance of this Agreement, any
         other Operative Agreement or any transaction contemplated hereby or
         thereby or (ii) which is reasonably likely to have a Material Adverse
         Effect;




                                      -8-


<PAGE>   13


              (d) In the reasonable opinion of the Lessor and the Holders
         and their counsel, the transactions contemplated by the Operative
         Agreements do not and will not violate any material Legal Requirements
         and do not and will not subject the Lessor or the Holders to any
         materially adverse regulatory prohibitions or constraints;

              (e) The Lessor and the Agent shall each have received an
         Officer's Certificate of the Lessee, dated as of the Initial Closing
         Date, in the form attached hereto as Exhibit D or in such other form as
         is reasonably acceptable to such parties stating that (i) each and
         every representation and warranty of the Lessee contained in the
         Operative Agreements to which it is a party is true and correct in all
         material respects on and as of the Initial Closing Date; (ii) no
         Default or Event of Default has occurred and is continuing under any
         Operative Agreement; (iii) each Operative Agreement to which Lessee is
         a party is in full force and effect with respect to it; and (iv) the
         Lessee has performed and complied in all material respects with all
         covenants, agreements and conditions contained herein or in any
         Operative Agreement required to be performed or complied with by it on
         or prior to the Initial Closing Date;

              (f) The Lessor and the Agent shall each have received (i) a
         certificate of the Secretary or an Assistant Secretary of Lessee in the
         form attached hereto as Exhibit E or in such other form as is
         reasonably acceptable to such parties attaching and certifying as to
         (A) the resolutions of its Board of Directors duly authorizing the
         execution, delivery and performance by Lessee of each of the Operative
         Agreements to which it is or will be a party, (B) its certificate of
         incorporation and by-laws, in each case certified as of a recent date
         by the Secretary of State of the State of its incorporation, and (C)
         the incumbency and signature of persons authorized to execute and
         deliver on its behalf the Operative Agreements to which it is a party
         and (ii) a good standing certificate from the appropriate officer of
         each of the State of Texas and the state in which the Lessee's chief
         executive office is located; and

              (g) Counsel for the Lessee and the Guarantor reasonably
         acceptable to the other parties hereto shall have issued to the Lessor,
         the Agent, the Lenders and the Holders the opinions in the form
         attached hereto as Exhibit C or in such other form as is reasonably
         acceptable to such parties.

         6.2. Conditions to the Lessee's Obligations. The obligation of the
Lessee to consummate the transactions contemplated by this Agreement is subject
to (i) the accuracy and correctness on the Initial Closing Date of the
representations and warranties of the other parties hereto contained herein,
(ii) the accuracy and correctness on the Initial Closing Date of the
representations and warranties of the other parties hereto contained in any
other Operative Agreement or certificate delivered pursuant hereto or thereto,
(iii) the performance by the other parties hereto of their respective agreements
contained herein and in the other Operative Agreements, in each case to be
performed by them on or prior to the Initial Closing Date, and (iv)





                                      -9-



<PAGE>   14

the satisfaction or waiver by the Lessee of all of the following conditions on
or prior to the Initial Closing Date:

              (a) Each of the Operative Agreements to be entered into on the
         Initial Closing Date shall have been duly authorized, executed and
         delivered by the parties thereto, other than the Lessee, and shall be
         in full force and effect, and no Default, other than Defaults of the
         Lessee, shall exist thereunder, and the Lessee shall have received a
         fully executed copy of each of the Operative Agreements (other than
         Notes of which it shall have received a specimen);

              (b) In the reasonable opinion of the Lessee and its counsel,
         the transactions contemplated by the Operative Agreements do not
         violate any material Legal Requirements and will not subject Lessee to
         any materially adverse regulatory prohibitions or constraints;

              (c) No action or proceeding shall have been instituted nor
         shall any action or proceeding be threatened, before any Governmental
         Authority, nor shall any order, judgment or decree have been issued or
         proposed to be issued by any Governmental Authority (i) to set aside,
         restrain, enjoin or prevent the full performance of this Agreement, any
         other Operative Agreement or any transaction contemplated hereby or
         thereby or (ii) which is reasonably likely to have a Material Adverse
         Effect;

              (d) The Lessee and the Agent shall each have received an
         Officer's Certificate of the Lessor dated as of the Initial Closing
         Date in the form attached hereto as Exhibit F or in such other form as
         is reasonably acceptable to Lessee and the Agent, stating that (i) each
         and every representation and warranty of the Lessor contained in the
         Operative Agreements to which it is a party is true and correct on and
         as of the Initial Closing Date; (ii) each Operative Agreement to which
         the Lessor is a party is in full force and effect with respect to it,
         and (iii) the Lessor has duly performed and complied with all
         covenants, agreements and conditions contained herein or in any
         Operative Agreement required to be performed or complied with by it on
         or prior to the Initial Closing Date;

              (e) The Lessee and the Agent shall each have received (i) a
         certificate of the Secretary, an Assistant Secretary, Trust Officer or
         Vice President of the Trust Company in the form attached hereto as
         Exhibit G or in such other form as is reasonably acceptable to Lessee
         and the Agent, attaching and certifying as to (A) the signing
         resolutions, (B) its articles of incorporation or other equivalent
         charter documents, as the case may be, certified as of a recent date by
         an appropriate officer of the Trust Company, (C) its by-laws and (D)
         the incumbency and signature of persons authorized to execute and
         deliver on its behalf the Operative Agreements to which it is a party
         and (ii) a good standing certificate from the state of incorporation of
         the Trust Company and, to the extent required by applicable Law, good
         standing or comparable certificates for the Trust Company or the Owner
         Trustee from each state in which the Properties are located; and




                                      -10-



<PAGE>   15


              (f) Counsel for the Lessor acceptable to the other parties
         hereto shall have issued to the Lessee, the Holders, the Lenders and
         the Agent an opinion in the form attached hereto as Exhibit H or in
         such other form as is reasonably acceptable to such parties.

         6.3. Conditions to the Agent's Obligations. The obligation of the Agent
to consummate the transactions contemplated by this Agreement on the Initial
Closing Date is subject to (i) the accuracy and correctness on the Initial
Closing Date of the representations and warranties of the other parties hereto
contained herein, (ii) the accuracy and correctness on the Initial Closing Date
of the representations and warranties of the other parties hereto contained in
any other Operative Agreement or certificate delivered pursuant hereto or
thereto, (iii) the performance by the other parties hereto of their respective
agreements contained herein and in the other Operative Agreements, in each case
to be performed by them on or prior to the Initial Closing Date, and (iv) the
satisfaction, or waiver by the Agent, of all of the following conditions on or
prior to the Initial Closing Date:

              (a) Each of the Operative Agreements to be entered into on the
         Initial Closing Date shall have been duly authorized, executed and
         delivered by the parties thereto, other than the Agent, and shall be in
         full force and effect, and no Default or Event of Default shall exist
         thereunder (both before and after giving effect to the transactions
         contemplated by the Operative Agreements), and the Agent shall have
         received a fully executed copy of each of the Operative Agreements
         (including the Notes). The Operative Agreements (or memoranda thereof),
         any supplements thereto and any financing statements and fixture
         filings in connection therewith required under the Uniform Commercial
         Code shall have been filed or shall be promptly filed, if necessary, in
         such manner as to enable the Lessor's counsel to render its opinion
         referred to in Section 6.2(f) hereof;

              (b) The satisfaction of each of the conditions set forth in
         Sections 6.1(b), (c), (e) and (f) and Sections 6.2(d), (e) and (f)
         hereof; and

              (c) In the reasonable opinion of the Agent and its counsel,
         the transactions contemplated by the Operative Agreements do not and
         will not violate any material Legal Requirements and do not and will
         not subject the Agent to any materially adverse regulatory prohibitions
         or constraints.

         SECTION 7. Representations and Warranties on the Initial Closing Date.

         7.1. Representations and Warranties of the Initial Holders. Effective
as of the Initial Closing Date, each Holder on such date represents and warrants
to each of the other parties hereto that:

              (a) It is a national banking association, or a corporation
         that is a commercial finance company, in each case duly organized,
         validly existing and in good standing



                                      -11-


<PAGE>   16



         under the laws of the United States or the country or state of its
         organization and has the power and authority to carry on its business
         as now conducted and to enter into and perform its obligations under
         each Operative Agreement to which it is or will be a party and each
         other agreement, instrument and document to be executed and delivered
         by it on or before each Closing Date in connection with or as
         contemplated by each such Operative Agreement to which it is or will
         be a party;

              (b) The execution, delivery and performance of each Operative
         Agreement to which it is or will be a party have been duly authorized
         by all necessary action on its part and neither the execution and
         delivery thereof, nor the consummation of the transactions contemplated
         thereby, nor compliance by it with any of the terms and provisions
         thereof (i) requires or will require any approval of the stockholders
         of, or approval or consent of any trustee or holder of any indebtedness
         or obligations of, such Holder which have not been obtained and be in
         full force and effect, (ii) violates or will violate any Legal
         Requirement applicable to or binding on it (except no representation or
         warranty is made as to any Legal Requirement to which it may be subject
         solely as a result of the activities of the Lessee) as of the date
         hereof, (iii) violates or will violate or result in any breach of or
         constitute any default under, or result in the creation of any Lien
         upon any Property or any of the Improvements (other than Liens created
         by the Operative Agreements) under its certificate of incorporation or
         other equivalent charter documents, or any indenture, mortgage, chattel
         mortgage, deed of trust, conditional sales contract, bank loan or
         credit agreement or other agreement or instrument to which it is a
         party or by which it or its properties is bound or affected or (iv)
         requires or will require any Governmental Action by any Governmental
         Authority (other than arising solely by reason of the business,
         condition or activities of the Lessee or any Affiliate thereof or the
         construction or use of the Properties or the Improvements);

              (c) There is no action or proceeding pending or, to its
         knowledge, threatened against it before any Governmental Authority that
         questions the validity or enforceability of any Operative Agreement to
         which it is or will become a party or that, if adversely determined,
         would materially and adversely affect its ability to perform its
         obligations under the Operative Agreements to which it is a party;

              (d) It has not assigned or transferred any of its right, title
         or interest in or under the Lease except in accordance with the
         Operative Agreements;

              (e) No Default or Event of Default under the Operative
         Agreements attributable to it has occurred and is continuing;

              (f) It is not a "holding company" or a "subsidiary company" of
         a "holding company" or an "affiliate" of a "holding company" or a
         "public utility" within the meaning of the Public Utility Holding
         Company Act of 1935, as amended, or a "public utility" within the
         meaning of the Federal Power Act, as amended. It is not an



                                      -12-


<PAGE>   17



         "investment company" or a company "controlled" by an "investment
         company" within the meaning of the Investment Company Act or an
         "investment adviser" within the meaning of the Investment Advisers Act
         of 1940, as amended; and

              (g) It is acquiring its interest in the Trust Estate for its
         own account for investment and not with a view to any distribution (as
         such term is used in Section 2(11) of the Securities Act) thereof, and
         if in the future it should decide to dispose of its interest in the
         Trust Estate, it understands that it may do so only in compliance with
         the Securities Act and the rules and regulations of the Securities and
         Exchange Commission thereunder and any applicable state securities
         laws. Neither it nor anyone authorized to act on its behalf has taken
         or will take any action which would subject, as a direct result of such
         action alone, the issuance or sale of any interest in any Property, the
         Trust Estate or the Lease to the registration requirements of Section 5
         of the Securities Act. No representation or warranty contained in this
         Section 7.1(g) shall include or cover any action or inaction of the
         Lessee or any Affiliate thereof whether or not purportedly on behalf of
         the Holders, the Owner Trustee or any of their Affiliates.

         7.2. Representations and Warranties of the Owner Trustee. Effective as
of the Initial Closing Date, Trust Company in its individual capacity and as the
Owner Trustee, as indicated, represents and warrants to each of the other
parties hereto as follows, provided, that the representations in paragraphs (g),
(h), (i) and (j) below are made solely in its capacity as the Owner Trustee:

              (a) It is a national banking association duly organized,
         validly existing and in good standing under the laws of the United
         States of America and has the power and authority to enter into and
         perform its obligations under the Trust Agreement and (assuming due
         authorization, execution and delivery of the Trust Agreement by the
         Holders) has the corporate and trust power and authority to act as the
         Owner Trustee and to enter into and perform the obligations under each
         of the other Operative Agreements to which Trust Company or the Owner
         Trustee, as the case may be, is or will be a party and each other
         agreement, instrument and document to be executed and delivered by it
         on or before each Closing Date in connection with or as contemplated by
         each such Operative Agreement to which Trust Company or the Owner
         Trustee, as the case may be, is or will be a party;

              (b) The execution, delivery and performance of each Operative
         Agreement to which it is or will be a party, either in its individual
         capacity or (assuming due authorization, execution and delivery of the
         Trust Agreement by the Holders) as the Owner Trustee, as the case may
         be, has been duly authorized by all necessary action on its part and
         neither the execution and delivery thereof, nor the consummation of the
         transactions contemplated thereby, nor compliance by it with any of the
         terms and provisions thereof (i) requires or will require any approval
         of its stockholders, Certificate holders or any approval or consent of
         any trustee or holders of any of its indebtedness or



                                      -13-


<PAGE>   18



         obligations, (ii) violates or will violate any current law,
         governmental rule or regulation relating to its banking or trust
         powers, (iii) violates or will violate or result in any breach of or
         constitute any default under, or result in the creation of any Lien
         upon any of its property under, (A) its charter or by-laws, or (B) any
         indenture, mortgage, chattel mortgage, deed of trust, conditional
         sales contract, bank loan or credit agreement or other agreement or
         instrument to which it is a party or by which it or its properties may
         be bound or affected, which violation, breach, default or Lien under
         clause (B) would materially and adversely affect its ability, in its
         individual capacity or as Owner Trustee, to perform its obligations
         under the Operative Agreements to which it is a party or (iv) requires
         or will require any Governmental Action by any Governmental Authority
         regulating its banking or trust powers;

              (c) The Trust Agreement and, assuming the Trust Agreement is
         the legal, valid and binding obligation of the Holders, each other
         Operative Agreement to which the Trust Company or the Owner Trustee, as
         the case may be, is or will be a party have been, or will be, duly
         executed and delivered by Trust Company or the Owner Trustee, as the
         case may be, and the Trust Agreement and each such other Operative
         Agreement to which Trust Company or the Owner Trustee, as the case may
         be, is a party constitutes, or upon execution and delivery will
         constitute, a legal, valid and binding obligation enforceable against
         Trust Company or the Owner Trustee, as the case may be, in accordance
         with the terms thereof;

              (d) There is no action or proceeding pending or, to its
         knowledge, threatened to which it is or will be a party, either in its
         individual capacity or as the Owner Trustee, before any Governmental
         Authority that, if adversely determined, would materially and adversely
         affect its ability, in its individual capacity or as Owner Trustee, to
         perform its obligations under the Operative Agreements to which it is a
         party or would question the validity or enforceability of any of the
         Operative Agreements to which it is or will become a party;

              (e) It has not assigned or transferred any of its right, title
         or interest in or under the Lease except in accordance with the
         Operative Agreements;

              (f) No Default or Event of Default under the Operative
         Agreements attributable to it has occurred and is continuing;

              (g) Neither the Owner Trustee nor any Person authorized by the
         Owner Trustee to act on its behalf has offered or sold any interest in
         the Trust Estate or the Notes, or in any similar security relating to
         a Property, or in any security the offering of which for the purposes
         of the Securities Act would be deemed to be part of the same offering
         as the offering of the aforementioned securities to, or solicited any
         offer to acquire any of the same from, any Person other than, in the
         case of the Notes, the Lenders, and neither the Owner Trustee nor any
         Person authorized by the Owner Trustee



                                      -14-


<PAGE>   19



         to act on its behalf will take any action which would subject, as a
         direct result of such action alone, the issuance or sale of any
         interest in the Trust Estate or the Notes to the provisions of Section
         5 of the Securities Act, or require the qualification of any Operative
         Agreement under the Trust Indenture Act of 1939, as amended;

              (h) The Owner Trustee's chief place of business, chief
         executive office and office where the documents, accounts and records
         relating to the transactions contemplated by this Agreement and each
         other Operative Agreement are kept are located at First Security Bank,
         N.A., 79 South Main Street, Salt Lake City, Utah, 84111;

              (i) The Owner Trustee is not engaged principally in, and does
         not have as one of its important activities, the business of extending
         credit for the purpose of purchasing or carrying any margin stock
         (within the meaning of Regulation U of the Board of Governors of the
         Federal Reserve System of the United States), and no part of the
         proceeds of the Loans or the Holder Fundings will be used by it to
         purchase or carry any margin stock or to extend credit to others for
         the purpose of purchasing or carrying any such margin stock or for any
         purpose that violates, or is inconsistent with, the provisions of
         Regulations G, T, U, or X of the Federal Reserve Board; and

              (j) The Owner Trustee is not a "holding company" or a
         "subsidiary company" of a "holding company" or an "affiliate" of a
         "holding company" or a "public utility" within the meaning of the
         Public Utility Holding Company Act of 1935, as amended, or a "public
         utility" within the meaning of the Federal Power Act, as amended. The
         Owner Trustee is not an "investment company" or a company "controlled"
         by an "investment company" within the meaning of the Investment Company
         Act or an "investment adviser" within the meaning of the Investment
         Advisers Act of 1940, as amended.

         7.3. Representations and Warranties of the Lessee. The Lessee, in its
capacity as Lessee and Guarantor, represents and warrants to each of the other
parties hereto that the following shall be true and correct on and as of each of
the Initial Closing Date, each Property Closing Date and the date of each
Funding unless otherwise indicated:

              (a) Corporate Existence; Authority. The Lessee is a duly
         organized, and validly existing corporation. The Lessee is in good
         standing under the laws of the State of Delaware, is duly qualified and
         authorized to do business in the states where any Properties are
         located and has all governmental licenses, authorizations, consents and
         approvals required to carry on its business as now conducted, except
         for such licenses, authorizations, consents and approvals the lack of
         which would not be reasonably likely to have a Material Adverse Effect.

              (b) Corporate and Governmental Authorization; No
         Contravention. The execution, delivery and performance by the Lessee of
         this Agreement and the other Operative Agreements to which it is a
         party are within its corporate powers, have been



                                      -15-


<PAGE>   20




         duly authorized by all necessary corporate action of the Lessee,
         require no action by or in respect of, or filing with, any
         governmental body, agency or official (except for those required in
         connection with the Spin-Off) and do not contravene, or constitute a
         default under, any provision of applicable Law or of the certificate
         of incorporation or by-laws of the Lessee or of any agreement,
         judgment, injunction, order, decree or other instrument binding upon
         the Lessee or result in the creation or imposition of any Lien on any
         asset of the Lessee (except as contemplated by the Operative
         Agreements and do not or will not require any approval or consent of
         the Lessee, or any trustee or holders of any indebtedness or
         obligations of Lessee which have not been duly obtained).

              (c) Binding Effect. This Agreement and the other Operative
         Agreements to which the Lessee is a party constitute the legal, valid
         and binding obligations of the Lessee, enforceable against it in
         accordance with their respective terms except as enforceability may be
         limited by applicable bankruptcy, insolvency or similar laws affecting
         the enforcement of creditors' rights generally or by equitable
         principles relating to enforceability.

              (d) Financial Condition. (1) The combined financial statements
         of the Lessee and its Subsidiaries dated as of December 31, 1998, and
         the related consolidated statements of income or operations,
         shareholders' equity and cash flows for the fiscal year ended on that
         date reported on by Arthur Andersen LLP and set forth in the Lessee's
         filings on Form 10 and Form S-4 (as referenced in the definition of
         Spin-Off), and (2) the interim combined financial statements of the
         Lessee and its Subsidiaries dated June 30, 1999, and the related
         consolidated statements of income or operations, shareholders' equity
         and cash flows for the fiscal quarter ended on that date reported on by
         Arthur Andersen LLP and set forth in the Lessee's filings on Form 10
         and Form S-4 (as referenced in the definition of Spin-Off):

                  (i)  were prepared in accordance with GAAP consistently
         applied for the periods covered thereby, except as otherwise expressly
         noted therein (subject, in the case of the unaudited interim
         statements, to ordinary, good faith year-end audit adjustments); and

                  (ii) fairly present (subject, in the case of the
         unaudited interim statements, to ordinary, good faith year-end audit
         adjustments) the financial condition of the Company and its
         Subsidiaries as of the dates thereof and the results of operations for
         the periods covered thereby.


              (3) Since June 30, 1999, there has been no Material Adverse
Effect with respect to the Lessee.



                                      -16-


<PAGE>   21


              (e) Litigation. Except as disclosed in Schedule II, there are
         no actions, suits, proceedings, claims, disputes pending or, to the
         Knowledge of the Lessee, threatened, at law, in equity, in arbitration
         or before any Governmental Authority, against the Lessee or any
         Subsidiary or any of their respective properties which: (i) purport to
         affect or pertain to this Agreement or any other Operative Agreement,
         or any of the transactions contemplated hereby or thereby; or (ii) if
         determined adversely to the Lessee or its Subsidiaries, could in the
         reasonable judgment of the Lessee be expected to have a Material
         Adverse Effect. No injunction, writ, temporary restraining order or
         other order of any nature has been issued by any court or other
         Governmental Authority purporting to enjoin or restrain the execution,
         delivery or performance of this Agreement or any other Operative
         Agreements, or directing that the transactions provided for herein or
         therein not be consummated as herein or therein provided.

              (f) Status. The Lessee or any Subsidiary is not an "investment
         company" or controlled by an "investment company" within the meaning of
         the Investment Company Act of 1940, as amended, nor is it subject to
         regulation under the Investment Advisors Act, the Public Utility
         Holding Company Act of 1935, the Federal Power Act or the Interstate
         Commerce Act, or under any other state or Federal Law limiting its
         ability to execute and deliver any Operative Agreement or perform its
         obligations thereunder.

              (g) Compliance with Margin Regulations. No proceeds of any
         Loan or Holder Funding have been or will be used in violation of any
         applicable Law (including, without limitation, Regulation D, Regulation
         G, Regulation T, Regulation U and Regulation X of the Federal Reserve
         Board, as in effect from time to time), giving effect to the
         transactions contemplated to be consummated on the Initial Closing Date
         and on the date of each subsequent Loan and Holder Funding.

              (h) No Default. No Default, Event of Default or Major
         Environmental Event has occurred and is continuing.

              (i) Consents. The execution, delivery and performance by the
         Lessee of each Operative Agreement to which it is a party and any other
         agreement which it has entered into in connection with the transactions
         contemplated thereby, the consummation of the transactions contemplated
         thereby and its compliance with the terms thereof does not require the
         consent of any Person or the approval or authorization of, or filing,
         registration or qualification with, any Federal, state or local
         governmental authority on the part of the Lessee as a condition to such
         execution, delivery, performance and compliance except those consents
         which have already been obtained by the Lessee and copies of which have
         been delivered to the Lessor, the Agent, the Lenders and the Holders,
         and those consents that will be obtained on or before the Initial
         Closing Date.



                                      -17-


<PAGE>   22



              (j) Title to the Property.

                  (i)   On and after the Property Closing Date for each
              Property, the Lessor will have good and marketable title to
              such Property (other than any Land subject to a Ground Lease),
              together with the right to use any necessary easements or
              rights-of-way or similar property rights, subject only to
              Permitted Encumbrances.

                  (ii)  On and after the Property Closing Date for each
              Property that is subject to a Ground Lease, the Lessor will
              have a good and marketable leasehold interest in the Land that
              is subject to a Ground Lease, together with the right to use
              any necessary easements or rights-of-way or similar property
              rights, subject only to Permitted Encumbrances.

                  (iii) On or after the Property Closing Date for each
              Property, the Lessee does not have actual knowledge or written
              notice that such Property contains any defect or feature
              making it unsuitable for the proper operation thereof.

              (k) Compliance with Law. The Lessee is not in violation of any
         Law in any material respect with respect to any Property or any part
         thereof, or with respect to its leasing, ownership, or operation of any
         Property or any part thereof, or with respect to the conduct of its
         business relating to any Property or any part thereof in each case to
         the extent the violation of such Law would have a Material Adverse
         Effect. To the Knowledge of the Lessee, the Lessee has not received any
         notice of, or citation for, any violation of any Law which has not been
         resolved, which notice or citation relates to the ownership, leasing or
         operation of any Property or any part thereof and the violation of
         which would have a Material Adverse Effect. The Lessee is in compliance
         in all material respects with all applicable Laws, the violation of
         which would have a Material Adverse Effect.

              (l) Recordation and Filing. On and as of the Property Closing
         Date for each Property, the memoranda of Ground Lease, memoranda of
         Lease, and the Mortgage Instruments and all Lender Financing Statements
         and Lessor Financing Statements, to be recorded or filed, shall have
         been duly recorded, published, registered and filed by the Lessee and
         are in a form sufficient to create or publish notice of the interests
         in such Property or any part thereof purported to be created thereby.
         Upon the recordation of the memoranda of Ground Lease, the memoranda of
         Lease and the Mortgage Instruments and the filing of such Lender
         Financing Statements and Lessor Financing Statements, each to be
         recorded or filed in such places as the Lessee shall notify the Agent
         and the Lessor prior to such Property Closing Date, such documents will
         have been recorded or filed in each place in which recording or filing
         is required to publish notice, under applicable Law, of the interests
         created thereby and to protect the validity and effectiveness thereof,
         and all Taxes, fees and other public charges payable in connection with
         the publishing,



                                      -18-


<PAGE>   23



         filing and recordation of the memoranda of Ground Lease, the memoranda
         of Lease, the Mortgage Instruments, the Lender Financing Statements
         and Lessor Financing Statements will have been paid in full by the
         Lessee.

                  (m) Rights to Property, Etc.

                           (i) On and after the Property Closing Date with
                  respect to any Property, the Lessor has the right to use all
                  rights-of-way, easements and real property licenses,
                  environmental allowances, rights in real property (including,
                  without limitation, fixtures and appurtenances), utilities and
                  other services necessary for the day-to-day operation of the
                  Property and the construction of the Improvements and (A) such
                  rights-of-way, easements, licenses, environmental allowances,
                  utilities and other services are valid and in full force and
                  effect in accordance with their terms, (B) there is presently
                  no default with respect to any such rights-of-way, easements,
                  licenses, utilities and other services by the Lessee or Lessor
                  or, to the knowledge of the Lessee, by any other Person, and
                  (C) all utility services necessary for the construction of the
                  Improvements and operation of the Property for their intended
                  purposes are or will be available at the boundaries of the
                  Property.

                           (ii) On and after the Initial Closing Date, none of
                  the Permitted Encumbrances will interfere with the use or
                  possession of any Property or any part thereof or any other
                  asset used in connection therewith or the use of or the
                  exercise by the Agent of its rights either under any Operative
                  Agreement or to the Property.

                           (iii) On and after the Property Closing Date with
                  respect to any Property, except for the Permitted
                  Encumbrances, each Property will be situated wholly within the
                  boundary lines of the respective Land and will not encroach
                  upon any contiguous or adjoining property; no Property or any
                  part thereof is considered part of a larger zoning or tax lot;
                  the Improvements will not encroach on any easements or
                  rights-of-way affecting any Property or any part thereof, will
                  not violate any rights granted thereunder or any covenants or
                  restrictions affecting any Property, or any part thereof, and
                  any future violation will not result in a reversion or
                  forfeiture of title, right of re-entry or power of
                  termination; and the easements, rights-of-way, covenants and
                  restrictions affecting any Property or any part thereof will
                  not interfere with the use or occupancy of any Property or any
                  part thereof, or any asset owned or used in connection
                  therewith, nor will the exercise of rights or remedies
                  thereunder result in any damage to any Property or diminution
                  of value of any Property, or any part thereof.


                                      -19-
<PAGE>   24


                  (n) Environmental Compliance. Subject to Section 15.2 of the
Lease:

                           (i) each Property complies in all material respects
                  with all Environmental Laws; all necessary Environmental
                  Permits have been obtained and are in effect for each Property
                  and no circumstances exist that could be reasonably likely to
                  (A) form the basis of an Environmental Action against any
                  Property or (B) cause any Property to be subject to any
                  restrictions on ownership, occupancy, industrial use or
                  transferability under any Environmental Law; and

                           (ii) except as a result of the Temple Property's RCRA
                  status or the USEPA's RCRA Facility assessment (as reflected,
                  in either case, in (A) the "Phase I" environmental site
                  assessment prepared by Roy P. Weston, Inc., a copy of which
                  has been delivered by the Lessee to the Agent, or (B) portions
                  of the "Phase I" and "Phase II" environmental site assessments
                  prepared by CH2M Hill relating to the Temple Property, copies
                  of which have been delivered by the Lessee to the Agent),
                  neither any Property nor any part thereof is listed or
                  proposed for listing on the NPL or on CERCLIS or any analogous
                  state list of sites requiring investigation or cleanup;

                           (iii) all Hazardous Materials generated, used,
                  treated, handled or stored at or transported to or from any
                  Property or any part thereof by the Lessee, the Guarantor or
                  any of its Subsidiaries, have been disposed of in compliance
                  with all Environmental Laws and Environmental Permits;

                           (iv) except with respect to the Canadaiqua Property,
                  the Lessee has not received any written or other notice,
                  mandate, order, Lien or request which remains pending under an
                  Environmental Law concerning any Property or any part thereof
                  or relating to an alleged violation of an Environmental Law
                  concerning any Property or any part thereof or relating to any
                  potential adverse action in any way involving environmental,
                  health or safety matters affecting any Property or any part
                  thereof;

                           (v) except with respect to the Canadaiqua Property,
                  there is no proceeding pending or, to the knowledge of the
                  Lessee, threatened in writing, against the Lessee, by any
                  Federal, state, or local court, tribunal, administrative
                  agency, department, commission, board or other authority or
                  instrumentality with respect to the presence on or release of
                  any Hazardous Material from any Property or any part thereof;
                  and

                           (vi) except with respect to the release at or near
                  the Canadaiqua Property reflected in the Phase II
                  environmental reports prepared by Dames & Moore and Sear
                  Brown, copies of which have been delivered by the Lessee to
                  the Agent, no Hazardous Materials have been released from or
                  on any Property or any


                                      -20-
<PAGE>   25

                  part thereof for which remedial action could reasonably be
                  required under any Environmental Law or may be necessary to
                  prevent or eliminate a "significant risk to human health or
                  the environment" that have not already been remediated (as
                  defined in Section 15.2 of the Lease).

                  (o) No Condemnation, Casualty or Force Majeure. Neither any
         Property nor any part thereof has suffered a Condemnation or a Casualty
         or any other damage or destruction which renders such Property unusable
         in whole or in material part, and, under applicable Law,
         each Property may be used for the purposes contemplated by the Lessee
         in accordance with the Lease. No Force Majeure Event has occurred and
         is continuing which would adversely affect the operation of any
         Property or any material part thereof or the construction, renovation
         and operation of the Improvements.

                  (p) Permits. All Permits (including Environmental Permits)
         that are or will become Applicable Permits have been obtained, except
         Applicable Permits which are permitted by Law to be obtained after the
         Property Closing Date with respect to any Property or after any date on
         which any Funding shall occur, as applicable. All such Permits that are
         or will become Applicable Permits are in proper form, in full force and
         effect and not subject to any further appeal or further contest or to
         any unsatisfied condition that may allow modification or revocation.

                  (q) Insurance. The Lessee is in compliance with all Insurance
         Requirements, and all insurance policies required by Section 14 of the
         Lease are in full force and effect.

                  (r) Taxes. The Lessee and its Subsidiaries have filed or
         caused to be filed all United States federal income tax returns and all
         other material domestic tax returns which to the Knowledge of the
         Lessee are required to be filed (as of each applicable date) and have
         paid or provided for the payment before the same became delinquent, all
         Taxes due pursuant to such federal income tax returns and other
         material domestic tax returns other than those Taxes being contested in
         good faith by appropriate proceedings. The charges, accruals and
         reserves on the books of the Lessee and its Subsidiaries in respect of
         Taxes are, in the opinion of the Lessee, adequate to the extent
         required by GAAP. There is no proposed tax assessment against the
         Lessee or any Subsidiary that would, if made, have a Material Adverse
         Effect.

                  (s) No Material Adverse Event. No applicable Law prohibits,
         and no litigation, governmental investigation or other proceeding is
         pending or, to the Knowledge of the Lessee threatened, in which there
         is a reasonable possibility of an unfavorable judgment, decree, order
         or other determination which could prevent or make unlawful, or impose
         any material adverse condition upon, any Property or the acquisition,
         construction, use, ownership, operation or leasing thereof.

                                      -21-
<PAGE>   26

                  (t) Full Disclosure. No statement or material furnished by or
         on behalf of the Lessee to the Agent, the Lenders, the Holders, or the
         Lessor, in connection with any Operative Agreements or any transaction
         contemplated thereby contains any untrue statement of a material fact
         or omits a material fact necessary to make the statements contained
         therein or herein not misleading.

                  (u) Fair Price. The Properties to be acquired are being
         acquired at a price that is not in excess of fair market value, and
         such Properties consist of (i) unimproved Land, or (ii)
         Land and existing Improvements thereon which Improvements are either
         suitable for occupancy at the time of acquisition or will be removed,
         renovated or modified in accordance with the terms of this Agreement,
         or (iii) Equipment. Each of the Properties is located at the site set
         forth on the applicable Requisition, which is in one of the Approved
         States.

                  (v) Flood Hazard. Except for certain portions of the Covington
         Property and the Temple Property, no portion of any Property being
         acquired by the Lessor on any Property Closing Date is located in an
         area identified as a special flood hazard area by the Federal Emergency
         Management Agency or other applicable agency, or if any such Property
         is located in an area identified as a special flood hazard area by any
         such agency, then flood insurance has been obtained for such Property
         to the extent required by Section 14.2(b) of the Lease and in
         accordance with the National Flood Insurance Act of 1968, as amended.

                  (w) Bankruptcy, Etc. The Lessee has not admitted in writing
         its inability to pay its debts generally or has not made a general
         assignment for the benefit of creditors; no proceeding has been
         instituted by or against the Lessee seeking to adjudicate it a bankrupt
         or insolvent, or seeking liquidation, winding up, reorganization,
         arrangement, adjustment, protection, relief, or composition of it or
         its debts under any law relating to bankruptcy, insolvency or
         reorganization or relief of debtors, or seeking the entry of an order
         for relief or the appointment of a receiver, trustee, custodian or
         other similar official for it or for any substantial part of its
         property the Lessee taken any corporate action to authorize any of the
         actions set forth above in this subsection (w).

                  (x) Conditions Precedent. All conditions precedent contained
         in this Agreement and in the other Operative Agreements relating to
         each Funding have been substantially satisfied on the date of such
         Funding.

                  (y) Governmental Authorization. Except those required in
         connection with the Spin-Off, no approval, consent, exemption,
         authorization or other action by, or notice to, or filing with, any
         Governmental Authority (other than any of the foregoing which has been
         obtained or made and is in full force and effect) is necessary or
         required in connection with the execution, delivery or performance by
         the Lessee of this Agreement or any other Operative Agreement.



                                      -22-
<PAGE>   27

                  (z) ERISA Compliance.

                           (i) Each Plan is in compliance in all material
                  respects with the applicable provisions of ERISA, the Code and
                  other federal or state law. Each Plan which is intended to
                  qualify under Section 401(a) of the Code has received a
                  favorable determination letter from the IRS, and to the
                  Knowledge of the Lessee, nothing has occurred which would
                  cause the loss of such qualification. The Lessee and each
                  ERISA Affiliate has made all required contributions to any
                  Plan subject to Section 412 of the Code and no application for
                  a funding waiver or an extension of any amortization period
                  pursuant to Section 412 of the Code has been made with respect
                  to any Plan.

                           (ii) There are no pending or, to the Knowledge of
                  Lessee, threatened claims, actions or lawsuits, or action by
                  any Governmental Authority, with respect to any Plan which has
                  resulted or could reasonably be expected to result in a
                  Material Adverse Effect. There has been no prohibited
                  transaction or violation of the fiduciary responsibility rules
                  with respect to any Plan which has resulted or could
                  reasonably be expected to result in a Material Adverse Effect.

                           (iii) (a) No ERISA Event has occurred or is
                  reasonably expected to occur; (b) no contribution failure has
                  occurred with respect to a Pension Plan sufficient to give
                  rise to a Lien under Section 302(f) of ERISA; (c) no Pension
                  Plan has any material Unfunded Pension Liability; (d) neither
                  the Lessee nor any ERISA Affiliate has incurred, or reasonably
                  expects to incur, any material liability under Title IV of
                  ERISA with respect to any Pension Plan (other than premiums
                  due and not delinquent under Section 4007 of ERISA); (e)
                  neither the Lessee nor any ERISA Affiliate has incurred, or
                  reasonably expects to incur, any material liability (and no
                  event has occurred which, with the giving of notice under
                  Section 4219 of ERISA, would result in such liability) under
                  Section 4201 or 4243 of ERISA with respect to a Multiemployer
                  Plan; and (f) neither the Lessee nor any ERISA Affiliate has
                  engaged in a transaction that could be subject to Section 4069
                  or 4212(c) of ERISA.

         (aa) Material Subsidiaries. Each of the Material Subsidiaries is a
corporation duly incorporated, validly existing and in good standing, in each
case under the laws of its jurisdiction of incorporation, except where failure
of a Material Subsidiary of the Lessee to be duly incorporated, validly existing
and in good standing would not have a Material Adverse Effect.

         (bb) The Lessee and its Subsidiaries have reviewed the areas within
their business and operations which could be adversely affected by, and have
developed programs to address on a timely basis, the "Year 2000 Problem" (that
is, the risk that computer applications used by the Lessee may be unable to
recognize and perform properly date sensitive functions involving certain dates
prior to any date after December 31, 1999). Based on such review and programs,




                                      -23-
<PAGE>   28

the Lessee reasonably believes that the "Year 2000 Problem" will not result in a
Material Adverse Effect.

         (cc) Solvency, etc. On the Execution Date, and immediately prior to and
after giving effect to each Borrowing hereunder and the use of the proceeds
thereof, (a) the Lessee's assets will exceed its liabilities and (b) the Lessee
will be solvent, will be able to pay its debts as they mature, will own property
with fair saleable value greater than the amount required to pay its debts and
will have capital sufficient to carry on its business as then constituted.

         7.4. Representations and Warranties of the Agent. Effective as of the
Initial Closing Date, the Agent represents and warrants to each of the other
parties hereto that:

                  (a) It is a national banking association duly organized and
         validly existing under the laws of the United States of America and has
         the full power and authority to enter into and perform its obligations
         under this Agreement and each other Operative Agreement to which it is
         or will be a party;

                  (b) The execution, delivery and performance by the Agent of
         this Agreement and each other Operative Agreement to which it is or
         will be a party are not, and will not be, inconsistent with the
         articles of incorporation or by-laws or other charter documents of the
         Agent, do not and will not contravene any applicable Law of the State
         of New York or of the United States of America governing its activities
         and will not contravene any provision of, or constitute a default under
         any indenture, mortgage, contract or other instrument to which it is a
         party or by which it or its properties are bound, or require any
         consent or approval of any Governmental Authority under any applicable
         law, rule or regulation of the State of New York or any federal law,
         rule or regulation of the United States of America governing its
         activities; and

                  (c) Each of this Agreement and each other Operative Agreement
         to which it is a party has been, or when executed and delivered will
         be, duly authorized by all necessary corporate action on the part of
         the Agent and has been, or on such Closing Date will be, duly executed
         and delivered by the Agent.

         SECTION 8. General Covenants of the Lessee and the Guarantor.

         8.1. Covenants of the Lessee.

                  (a) Information. The Lessee shall deliver to the Agent, for
         distribution to the Lessor, Lenders and Holders, in form and detail
         satisfactory to the Lessor, Lenders and the Holders (it being
         understood that for purposes hereof, the form and detail required by
         the SEC for annual and quarterly reports filed pursuant to the Exchange
         Act shall be deemed satisfactory):

                                      -24-
<PAGE>   29

                           (i) as soon as available, but not later than 90 days
                  after the end of each fiscal year, a copy of the audited
                  consolidated balance sheet of the Lessee and its Subsidiaries
                  as at the end of such year and the related consolidated
                  statements of income or operations, shareholders' equity and
                  cash flows for such year, setting forth in each case in
                  comparative form the figures for the previous fiscal year, and
                  accompanied by the opinion of Arthur Andersen LLC or another
                  nationally-recognized independent public accounting firm
                  ("Independent Auditor"), which opinion (i) shall state that
                  such consolidated financial statements present fairly the
                  Lessee's consolidated financial position for the periods
                  indicated in conformity with GAAP and (ii) shall not be
                  qualified or limited because of a restricted or limited
                  examination by the Independent Auditor of any material portion
                  of the Lessee's or any Subsidiary's records; and

                           (ii) as soon as available, but not later than 50 days
                  after the end of each of the first three fiscal quarters of
                  each fiscal year (commencing with the fiscal quarter ending
                  September 30, 1999), a copy of the unaudited consolidated
                  balance sheet of the Lessee and its Subsidiaries as of the end
                  of such quarter and the related consolidated statements of
                  income, shareholders' equity and cash flows for the period
                  commencing on the first day and ending on the last day of such
                  quarter, and certified by a Responsible Officer as fairly
                  presenting, in accordance with GAAP (subject to ordinary, good
                  faith year-end audit adjustments), the financial position and
                  the results of operations of the Lessee and its Subsidiaries
                  as of such date and for such period.


                           (iii) simultaneously with the delivery of each set of
                  financial statements referred to in clauses (i) and (ii)
                  above, a certificate of an authorized financial officer or
                  accounting officer of the Lessee (1) setting forth in
                  reasonable detail the calculations required to establish
                  whether the Lessee was in compliance with the requirements of
                  Section 8.1(o) as at the date of such financial statements and
                  reconciling such calculations with the information presented
                  in such financial statements, and (2) stating whether to the
                  best knowledge of such officer, there exists on the date of
                  such certificate any Lease Event of Default or any Major
                  Environmental Event or event which, with the giving of notice
                  or lapse of time, or both, would constitute a Lease Event of
                  Default or a Major Environmental Event and, if so, setting
                  forth the details thereof and the action which the Lessee has
                  taken and proposes to take with respect thereto.

                           (iv) as soon as is possible and in any event within
                  five Business Days after a change in, or issuance of, any
                  rating of any of the Lessee's senior unsecured long-term
                  Debt by S&P or Moody's which causes a change in the applicable
                  Rating, notice to the Agent of such change;


                                      -25-
<PAGE>   30


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

                           (vi) promptly after their becoming available, copies
                  of all financial statements and reports that the Lessee sends
                  to its shareholders, and copies of all financial statements
                  and regular, periodic or special reports (including Forms 10K,
                  10Q and 8K) that the Lessee or any Subsidiary may make to, or
                  file with, the SEC;

                           (vii) promptly after the filing or receiving thereof,
                  copies of all reports and notices which the Lessee files under
                  ERISA with the Internal Revenue Service or the PBGC or the
                  U.S. Department of Labor or which the Lessee receives from
                  such entities other than immaterial regular periodic notices
                  and reports and notices and reports of general circulation;

                           (viii) such other information respecting the
                  condition or operations, financial or otherwise, of the
                  Lessee, in each case as are relevant to the Operative
                  Agreements, as any Holder, the Lessor, the Agent or any Lender
                  may from time to time reasonably request from the Lessee
                  through the Agent;

                           (ix) as soon as possible and in any event within five
                  Business Days after a Responsible Officer of the Lessee has
                  obtained Knowledge thereof, notice of the occurrence of any
                  Lease Event of Default, or any Major Environmental Event
                  continuing on the date of such notice, and a certificate of an
                  authorized financial officer or accounting officer of the
                  Lessee setting forth details of such Lease Event of Default,
                  or such Major Environmental Event and the action which the
                  Lessee has taken and proposes to take with respect thereto;

                           (x) promptly, but in any event within thirty (30)
                  days after the date Lessee has actual knowledge thereof,
                  Lessee shall provide to Lessor written notice of any
                  Reportable Environmental Event. All such notices shall
                  describe in reasonable detail the nature of the Reportable
                  Environmental Event and Lessee's proposed response thereto. In
                  addition, Lessee shall provide to Lessor, within five (5)
                  Business Days of Lessor's request therefor, copies of all
                  material written communications with any Governmental
                  Authority relating to any Environmental Law in connection with
                  any Property. Lessee shall also promptly provide such detailed
                  reports of any material Environmental Claims as may reasonably
                  be requested by Lessor; and

                           (xi) promptly after their becoming available, any
                  management letter issued by the Company's Independent Auditor
                  regarding the "Year 2000" exposure or programs of the Company
                  and its Subsidiaries;

                                      -26-
<PAGE>   31

                  (b) Compliance with Environmental Laws. Subject to Section
         15.2 of the Lease, the Lessee shall comply, and cause other Persons
         operating or occupying any Property to comply with all Environmental
         Laws now existing or hereafter enacted and Environmental Permits with
         respect to any Property or any part thereof; obtain and renew all
         Environmental Permits necessary for ownership and operation of any
         Property or any part thereof; and conduct any investigation, study,
         sampling and testing, and undertake any cleanup, removal, and remedial
         or other action necessary to remove and clean up all Hazardous
         Materials from any Property or any part thereof pursuant to the lawful
         order of any regulatory authority and generally in accordance with the
         requirements of all Environmental Laws.

                  (c) Maintenance of Property. The Lessee shall keep all
         property used or useful in its business in good working order and
         condition, ordinary wear and tear excepted (and otherwise in compliance
         with the requirements of the Lease) except where the failure to do so
         would not have a Material Adverse Effect.

                  (d) Maintenance of Existence.

                           (i) The Lessee shall preserve and maintain its
         corporate existence or the corporate existence of a successor permitted
         under Section 8.1(j).

                           (ii) The Lessee shall preserve and maintain its
         rights (charter and statutory), and franchises except if, in the
         reasonable business judgment of the Lessee, it is in its best economic
         interest not to preserve and maintain such rights or franchises and
         such failure to preserve and maintain such rights or franchises would
         not materially adversely affect the rights of the Holders, the Lenders,
         the Agent or the Lessor or the ability of the Lessee to perform its
         obligations hereunder and under the other Operative Agreements to which
         it is a party.

                  (e) Compliance with Laws. The Lessee shall comply in all
         material respects with all applicable Laws (other than Environmental
         Laws, which are the subject of Section 7.3(n) hereof) rules,
         regulations and orders, such compliance to include, without limitation,
         paying before the same become delinquent all United States federal
         income taxes and all other material domestic taxes, assessments and
         governmental charges imposed upon it or upon its property except to the
         extent the necessity of compliance therewith is contested in good faith
         by appropriate proceedings and the Lessee establishes and maintains
         adequate reserves if and to the extent required under GAAP.

                  (f) Inspection of Property and Books and Records. The Lessee
         shall, and shall cause each Subsidiary to, maintain proper books of
         record and account, in which full, true and correct entries (sufficient
         to permit the preparation of consolidated financial statements in
         conformity with GAAP) shall be made of all financial transactions and
         matters involving the assets and business of the Lessee and such
         Subsidiary. The Lessee


                                      -27-
<PAGE>   32

         shall permit, and shall cause each Subsidiary to permit, the
         Administrative Agent, any Lender or their respective representatives,
         subject to such limitations as the Lessee may reasonably impose to
         ensure compliance with any applicable legal or contractual
         restrictions, to visit and inspect the Property, to examine their
         respective corporate, financial and operating records with respect to
         the Property, and make copies thereof or abstracts therefrom, and to
         discuss the affairs, finances and accounts of the Lessee or any
         Subsidiary in each case as are relevant to the Operative Agreements
         with their respective officers at such reasonable times during normal
         business hours as may be reasonably desired, upon reasonable advance
         notice to the Lessee; provided that when a Lease Event of Default
         exists the Agent, any Holder or any Lender may do any of the foregoing
         at any time during normal business hours and without advance notice.

                  (g) Use of Proceeds; Application of Proceeds to Actual Project
         Costs. The Lessee shall use proceeds of the Loans and Holder Fundings
         received by it solely to pay for the costs and expenses described in
         Section 5.1, and none of the Loans or Holder Advances will be used in
         violation of any applicable Law, including, without limitation,
         Regulation D, Regulation G, Regulation T, Regulation U and Regulation X
         of the Federal Reserve Board (as in effect from time to time).

                  (h) Performance. The Lessee shall observe and perform all
         provisions to be observed or performed by it contained in each
         Operative Agreement to which it is a party, in accordance with the
         terms thereof and within the times permitted thereby (including any
         grace or cure periods provided thereby) and will maintain, or cause to
         be maintained, the validity and effectiveness as to the Lessee of each
         such Operative Agreement to which it is a party.

                  (i) Intellectual Property Rights. The Lessee shall preserve,
         protect and maintain its rights in and to all patents, patent
         applications, trademarks (whether registered or not), trademark
         applications, trade names, proprietary computer software, "know-how"
         and copyrights used or to be used in the ordinary course of the
         operation of each Property (the "Intellectual Property Rights") in
         accordance with prudent industry practice.

                  (j) Mergers. The Lessee will not merge or consolidate with any
         other Person or sell, lease, transfer or otherwise dispose of its
         property and assets as, or substantially as, an entirety to any Person,
         unless (i) either the Lessee shall be the continuing or surviving
         corporation, or the successor or acquiring corporation shall be a
         solvent corporation organized under the laws of any State of the United
         States of America and shall expressly assume in writing all of the
         obligations of the Lessee under this Agreement and other Operative
         Agreements, including all covenants herein and therein contained, and
         such successor or acquiring corporation shall succeed to and be
         substituted for the Lessee with the same effect as if it had been named
         herein as a party hereto, provided that no such sale shall release the
         Lessee from any of its obligations and

                                      -28-
<PAGE>   33

         liabilities under this Agreement or other Operative Agreements unless
         such sale is followed by the complete liquidation of the Lessee and
         substantially all the assets of the Lessee immediately following such
         sale are distributed in such liquidation, and (ii) there shall not
         exist, as to the Lessee as the continuing or surviving corporation or
         the successor or acquiring corporation, as the case may be, shall not
         immediately after such merger or consolidation, or such sale or other
         disposition, any Lease Default, Lease Event of Default or Major
         Environmental Event.

                  (k) Maintenance of Insurance. The Lessee shall maintain, and
         shall cause each of its Subsidiaries to maintain, insurance with
         financially sound and reputable insurance companies or associations (or
         maintain self-insurance as provided below), in such amounts and
         covering such risks as is usually carried by companies engaged in
         similar businesses and owning similar properties as the Lessee;
         provided that self-insurance by the Lessee shall not be deemed a
         violation of this covenant to the extent that such self-insurance
         complies with the limits set forth in Section 14 of the Lease.

                  (l) Payment of Obligations. The Lessee shall, and shall cause
         each Subsidiary to, pay and discharge, as the same become due and
         payable: (i) all material tax liabilities, assessments and governmental
         charges or levies upon it or its properties or assets and (ii) all
         material claims which, if unpaid, would by law become a Lien upon its
         property, unless, in each case, the same are being contested in good
         faith by appropriate proceedings and adequate reserves in accordance
         with GAAP are being maintained by the Lessee or such Subsidiary.

                  (m) Compliance with ERISA. The Lessee shall, and shall cause
         each of its ERISA Affiliates to: (i) maintain each Plan in compliance
         in all material respects with the applicable provisions of ERISA, the
         Code and other federal or state law; (ii) cause each Plan which is
         qualified under Section 401(a) of the Code to maintain such
         qualification; and (iii) make all required contributions to any Plan
         subject to Section 412 of the Code.

                  (n) ERISA Event. The Lessee shall promptly and in any event
         within 10 days notice of the occurrence of any of the following events
         known to the Lessee which affect the Lessee or any ERISA Affiliate, and
         deliver to the Agent and each Lender a copy of any notice with respect
         to such event that is filed with a Governmental Authority and any
         notice delivered by a Governmental Authority to the Lessee or any ERISA
         Affiliate:

                           (i)  an ERISA Event;

                           (ii) a contribution failure with respect to a Pension
                  Plan sufficient to give rise to a Lien under Section 302(f) of
                  ERISA;

                                      -29-
<PAGE>   34

                           (iii) a material increase in the Unfunded Pension
                  Liability of any Pension Plan;

                           (iv) the adoption of, or the commencement of
                  contributions to, any Pension Plan by the Company or any ERISA
                  Affiliate that, in either case, requires material
                  contributions; or

                           (v) the adoption of any amendment to a Pension Plan
                  if such amendment results in a material increase in
                  contributions or Unfunded Pension Liability.

                  (o) Financial Covenants. Beginning on the Initial Closing Date
         and continuing so long as any Lender or Holder shall have any
         Commitment hereunder, or any Loan or Holder Amount shall remain unpaid
         or unsatisfied, unless the Majority Lenders waive compliance in
         writing:

                           (i) Minimum Interest Coverage Ratio. The Lessee shall
                  not permit, as of the last day of any fiscal quarter
                  (beginning with the first fiscal quarter ending after the
                  Initial Closing Date), its Interest Coverage Ratio to be less
                  than (a) for each Computation Period ending prior to October
                  1, 2000, 3.0 to 1 and (b) for each Computation Period ending
                  thereafter, 3.5 to 1.

                           (ii) Maximum Total Debt to EBITDA Ratio. The Lessee
                  shall not at any time permit the Total Debt to EBITDA Ratio to
                  be greater than (a) 3.85 to 1 at any time prior to the earlier
                  of (i) April 1, 2000 and (ii) the consummation of the PCA
                  initial public offering and (b) 3.5 to 1 at any time
                  thereafter.

                           (iii) Limitation on Liens. The Lessee shall not, and
                  shall not suffer or permit any Subsidiary to, directly or
                  indirectly, make, create, incur, assume or suffer to exist any
                  Lien, other than Permitted Encumbrances, upon or with respect
                  to any part of its property, whether now owned or hereafter
                  acquired, other than the following:

                                    (1) any Lien existing on the Initial Closing
                           Date and set forth in Schedule III, and any
                           extension, renewal or replacement of any such Lien so
                           long as the principal amount secured thereby is not
                           increased (other than an increase resulting solely
                           from a change in applicable rates of exchange between
                           U.S. Dollars, on the one hand, and any other currency
                           in which such principal amount is denominated, on the
                           other hand) and the scope of the property subject to
                           such Lien is not extended;

                                    (2) Liens imposed by law for taxes,
                           assessments or charges of any Governmental Authority
                           for claims not yet due, or to the extent that


                                      -30-
<PAGE>   35

                           non-payment thereof is permitted by Section 8.1(l),
                           provided that no notice of Lien has been filed or
                           recorded under the Code;

                                    (3) statutory Liens of landlords and Liens
                           of carriers, warehousemen, mechanics, materialmen and
                           other Liens imposed by law or created in the ordinary
                           course of business which are not delinquent or remain
                           payable without penalty or which are being contested
                           in good faith by appropriate proceedings;

                                    (4) Liens (other than any Lien imposed by
                           ERISA) consisting of pledges or deposits required in
                           the ordinary course of business in connection with
                           workers' compensation, unemployment insurance and
                           other social security legislation;

                                    (5) Liens on the property of the Lessee or
                           any Subsidiary securing (i) the non-delinquent
                           performance of bids, trade contracts (other than for
                           borrowed money), leases, statutory obligations, (ii)
                           surety bonds (excluding appeal bonds and other bonds
                           posted in connection with court proceedings or
                           judgments) and (iii) other non-delinquent obligations
                           of a like nature in each case incurred in the
                           ordinary course of business, provided all such Liens
                           in the aggregate would not (even if enforced) cause a
                           Material Adverse Effect;

                                    (6) Liens consisting of judgment or judicial
                           attachment liens and liens securing contingent
                           obligations on appeal bonds and other bonds posted in
                           connection with court proceedings or judgments,
                           provided that (i) in the case of judgment and
                           judicial attachment liens, the enforcement of such
                           Liens is effectively stayed and (ii) all such liens
                           in the aggregate at any time outstanding for the
                           Lessee and its Subsidiaries do not exceed
                           $20,000,000;

                                    (7) easements, rights-of-way, covenants,
                           conditions, restrictions and other similar
                           encumbrances incurred in the ordinary course of
                           business which, individually or in the aggregate, do
                           not materially interfere with the ordinary conduct of
                           the respective businesses of the Lessee and its
                           Subsidiaries;

                                    (8) Liens securing obligations in respect of
                           Capital Leases on assets subject to such leases,
                           provided that such Capital Leases are otherwise
                           permitted hereunder;

                                    (9) Liens arising solely by virtue of any
                           statutory or common law provision relating to
                           banker's liens, rights of set-off or similar rights



                                      -31-
<PAGE>   36

                           and remedies as to deposit accounts or other funds
                           maintained with a creditor depository institution;
                           provided that (i) such deposit account is not a
                           dedicated cash collateral account and is not subject
                           to restrictions against access by the Lessee in
                           excess of those set forth by regulations promulgated
                           by the Federal Reserve Board, and (ii) such deposit
                           account is not intended by the Lessee or any
                           Subsidiary to provide collateral to the depository
                           institution;

                                    (10) any Lien on property existing at the
                           time of acquisition of such property by the Lessee or
                           a Subsidiary, or Liens to secure the payment of all
                           or part of the purchase price of property upon the
                           acquisition of property by the Lessee or a Subsidiary
                           or to secure any Debt incurred or guaranteed prior
                           to, at the time of, or within one hundred eighty
                           (180) days after, the later of the date of
                           acquisition of such property and the date such
                           property is placed in service, for the purpose of
                           financing all or any part of the purchase price
                           thereof, or Liens to secure any Debt incurred or
                           guaranteed for the purpose of financing the cost to
                           the Lessee or a Subsidiary or improvements to such
                           acquired property;

                                    (11) other Liens, in addition to those
                           permitted by clauses (1) through (10), securing Debt
                           or arising in connection with Securitization
                           Transactions; provided that the sum (without
                           duplication) of all such Debt, plus the aggregate
                           investment or claim held at any time by all
                           purchasers, assignees or other transferees of (or of
                           interests in) receivables and other rights to payment
                           in all Securitization Transactions, shall not at any
                           time exceed in the aggregate $200,000,000; and

                                    (12) rights of first refusal, rights of
                           Governmental Authorities to approve transfers and
                           other similar restrictions on transfer of any
                           ownership interest of the Lessee or any of its
                           Subsidiaries in any joint venture or similar
                           investment in an entity (other than a Subsidiary)
                           operating primarily outside of the United States.

                  (p) Restrictions on Subsidiaries. The Lessee (a) will not
         enter into any agreement or understanding pursuant to which
         Subsidiary and (b) will not, and will not permit any Subsidiary to,
         enter into any agreement or understanding which by its terms limits
         or restricts the ability of such Subsidiary to make funds available
         to the Lessee (whether by way of a dividend or other distribution,
         by repayment of any inter-company advance or otherwise) if, in any
         such case referred to in (a) or (b) above, there is, at the time any
         such agreement is entered into, a reasonable likelihood that all
         such agreements and understandings referred to in (a)



                                      -32-
<PAGE>   37

         or (b) above, considered together, would materially and adversely
         affect the ability of the Lessee to meet its obligations as they become
         due.

                  (q) Limitation on Subsidiary Debt. The Lessee shall not permit
         its Subsidiaries to create, incur, assume or suffer to exist, or
         otherwise become or remain directly or indirectly liable with respect
         to, any Debt (excluding obligations in respect of Securitization
         Transactions) at any time outstanding in an aggregate amount in excess
         of the greater of (a) $100,000,000 and (b) 12.5% of Total Debt.

                  (r) Transactions with Affiliates. The Lessee shall not, and
         shall not permit any Subsidiary to, enter into any transaction with any
         Affiliate of the Lessee (other than the Lessee or a Subsidiary), except
         upon fair and reasonable terms no less favorable to the Lessee or such
         Subsidiary than would obtain in a comparable arm's-length transaction
         with a Person not an Affiliate of the Lessee or such Subsidiary.

                  (s) Change in Business. The Lessee and its Subsidiaries taken
         as a whole shall continue the primary businesses in which they are
         engaged on the Execution Date and lines of business reasonably related
         thereto.

                  (t) Change in Accounting Policies. As soon as practicable and
         in any event within 10 days notice of any material change in accounting
         policies or financial reporting practices by the Lessee and its
         consolidated Subsidiaries.

                  (u) Preservation of Corporate Existence, Etc. The Lessee
         shall, and shall cause each Subsidiary to (provided that nothing in
         this Section 8.1(u) shall prevent the voluntary liquidation,
         dissolution or winding up, not under any bankruptcy or insolvency law,
         of any Subsidiary so long as no Lease Event of Default exists and no
         Lease Event of Default or Lease Default will result therefrom):

                                    (i) preserve and maintain in full force and
                           effect its existence and good standing under the laws
                           of its jurisdiction of organization;

                                    (ii) preserve and maintain in full force and
                           effect all governmental rights, privileges,
                           qualifications, permits, licenses and franchises
                           necessary or desirable in the normal conduct of its
                           business (except in connection with transactions and
                           sales of assets permitted by Section 8.1(j)); and

                                    (iii) preserve or renew all of its
                           registered patents, trademarks, trade names and
                           service marks, the non-preservation of which could
                           reasonably be expected to have a Material Adverse
                           Effect; provided, however that the Lessee shall have
                           the right to assign to an Affiliate of Tenneco Inc.,
                           or not preserve or renew, certain trademarks of
                           Tenneco Inc.

                                      -33-
<PAGE>   38

                           that are currently owned by the Lessee or any
                           Subsidiary, but which are not used by the Lessee or
                           such Subsidiary.

                  (v) Negative Pledge. (a) ERISA. The Lessee shall not, and
         shall not permit any of its ERISA Affiliates to: (a) engage in a
         prohibited transaction or material violation of the fiduciary
         responsibility rules with respect to any Plan which has resulted or
         could reasonably be expected to result in liability of the Lessee in an
         aggregate amount in excess of $5,000,000; or (b) engage in a
         transaction that could be subject to Section 4069 or 4212(c) of ERISA.

                  (w) Securitization Transactions. The Lessee shall not, and
         shall not permit its Subsidiaries to enter into Securitization
         Transaction to the extent that the aggregate investment or claims held
         at any time by all purchasers, assignees, transferees of (or of
         interests in) receivables and other rights to payment in all
         Securitization Transactions would at any time exceed $200,000,000.


         SECTION 9. Payment of Certain Expenses.

         9.1. Transaction Expenses.

                  (a) Lessor agrees on the Initial Closing Date, to pay, or
         cause to be paid, all reasonable fees, expenses and disbursements of
         the various legal counsels for the Lessor and the Agent in connection
         with the transactions contemplated by the Operative Agreements and
         incurred in connection with the Initial Closing Date, including all
         Transaction Expenses (arising in connection with the Initial Closing
         Date), and all other reasonable fees, expenses and disbursements in
         connection with the Initial Closing Date, and including, without
         limitation, all fees, taxes and expenses for the recording,
         registration and filing of documents; provided, however, that the
         Lessor shall pay such amounts described in this Section 9.1 (a) only if
         (i) such amounts are properly described in a Requisition delivered on
         or before the Initial Closing Date, and (ii) funds are made available
         by the Lenders and the Holders in connection with such Requisition in
         an amount sufficient to allow such payment. On the Initial Closing
         Date, after delivery and receipt of the Requisition referenced in
         Section 4.2(a) hereof and satisfaction of the other conditions
         precedent for such date, the Holders shall make Holder Fundings and the
         Lenders shall make Loans to the Lessor to pay for the Transaction
         Expenses, fees, expenses and other disbursements referenced in this
         Section 9.1 (a). The Lessee agrees to pay all amounts referred to in
         this Section 9.1(a) to the extent not paid by Lessor.

                  (b) Lessor agrees on each Property Closing Date (including the
         Initial Closing Date), to pay, or cause to be paid, all reasonable
         fees, expenses and disbursements of the various legal counsels for the
         Lessor and the Agent in connection with the transactions contemplated
         by the Operative Agreements and billed in connection with such Property


                                      -34-
<PAGE>   39

         Closing Date, or the date of such Funding, including all Transaction
         Expenses (arising with respect to the Initial Closing Date, such
         Property Closing Date, the date of such Funding), all fees,
         expenses and disbursements paid by the Lessee or incurred with respect
         to the various items referenced in Section 5.3, (including without
         limitation the cost of any Appraisals or environmental site
         assessments, any developer's fees, any consultant's fees, any premiums
         for title insurance policies and charges for any updates to such
         policies) and all other reasonable fees, expenses and disbursements in
         connection with such Property Closing Date, or the date of such Funding
         including, without limitation, all expenses relating to and all fees
         (including brokers' fees), taxes (including any and all stamp, transfer
         or similar taxes) and expenses for the recording, registration and
         filing of documents; provided, however, the Lessor shall pay such
         amounts described in this Section 9.1(b) only if (i) such amounts are
         properly described in a Requisition delivered on the applicable date
         and (ii) funds are made available by the Lenders and the Holders in
         connection with such Requisition in an amount sufficient to allow such
         payment. On each Property Closing Date, after delivery of the
         applicable Requisition and satisfaction of the other conditions
         precedent for such date, the Holders shall make a Holder Funding and
         the Lenders shall make Loans to the Lessor to pay for the Transaction
         Expenses, fees, expenses and other disbursements referenced in this
         Section 9.1(b). The Lessee agrees to pay all amounts referred to in
         this Section 9.1(b) to the extent not paid by the Lessor.

         9.2. Certain Fees and Expenses. Lessee agrees to pay or cause to be
paid (i) the initial and annual Owner Trustee's fee and all reasonable expenses
of the Owner Trustee and any necessary co-trustees (including reasonable counsel
fees and expenses) or any successor owner trustee, for acting as owner trustee
under the Trust Agreement, (ii) all reasonable costs and expenses (including
reasonable counsel fees and expenses) incurred by the Lessee, the Agent, the
Lenders, Holders or the Lessor in entering into any future amendments or
supplements requested by the Lessee with respect to any of the Operative
Agreements, whether or not such amendments or supplements are ultimately entered
into, or giving or withholding of waivers of consents hereto or thereto which
have been requested by the Lessee, or any purchase of any Property by the Lessee
pursuant to Article XX of the Lease, and (iii) all reasonable costs and expenses
(including reasonable counsel fees and expenses) incurred by the Lessor, the
Lessee, the Holders, the Lenders or the Agent in connection with the enforcement
of any Operative Agreement or any exercise of remedies under any Operative
Agreement.

         9.3. Unused Fee and Holder Unused Fee. From the date hereof (provided,
however, that no payments shall be made until the Initial Closing Date) through
the Expiration Date and thereafter so long as any Rent or other amounts remain
outstanding under the Operative Agreements, the Lessee agrees to pay (a) to the
Agent, for the pro rata benefit of the Lenders of each Category of Loans based
on the Commitment Percentage of each such Lender during the period for which
payment is made, the Unused Fee; and (b) to the Lessor, for the pro rata benefit
of the Holders based on the Holder Commitment of each such Holder during the
period for which



                                      -35-
<PAGE>   40
payment is made, the Holder Unused Fee. Such payments of fees provided for in
this Section 9.3 shall be due in arrears on each Unused Fee Payment Date.
Notwithstanding the foregoing, so long as any Lender or Holder fails (in
violation of the Operative Agreements) to make available any portion of its
Commitment or Holder Commitment when requested, such Person shall not be
entitled to receive payment of pro rata share of its Unused r Holder Unused Fee
(as the case may be) until such Person shall make available such portion. Each
such fee shall be calculated on the basis of a year of 360 days for the actual
number of days elapsed. If all or a portion of any Unused Fee or Holder Unused
Fee shall not be paid when due, such overdue amount shall bear interest, payable
by the Lessee on demand, at a rate per annum equal to the Base Rate plus 2%,
from the date of such non-payment until such amount is paid in full (as well
after as before judgment).

         SECTION 10. Other Covenants and Agreements.

         10.1. Cooperation with the Lessee. The Holders, the Owner Trustee (at
the direction of the Holders) and the Agent shall, to the extent reasonably
requested by the Lessee (but without assuming additional liabilities on account
thereof), at the Lessee's expense, cooperate with the Lessee in connection with
its covenants contained herein including, without limitation, at any time and
from time to time, upon the request of the Lessee, promptly and duly executing
and delivering any and all such further instruments, documents and financing
statements (and continuation statements related thereto) as the Lessee may
reasonably request in order to perform such covenants.

         10.2. Covenants of the Owner Trustee and the Holders. Each of the Owner
Trustee and the Holders hereby agree that so long as this Agreement is in
effect:

              (a) None of the Holders and the Owner Trustee (both in its
         capacity and in its individual capacity) will create or permit to exist
         at any time, and each of the Holders and the Owner Trustee will, at its
         own cost and expense, promptly take such action (and notify Lessee of
         such action) as may be necessary duly to discharge, or to cause to be
         discharged, all Lessor Liens attributable to it on the Properties;
         provided, however, that the Holders and the Owner Trustee shall not be
         required to discharge any such Lessor Lien while the same is being
         contested in good faith by appropriate proceedings diligently
         prosecuted so long as (a) such proceedings shall not involve any
         material danger of impairment of the Liens of the Security Documents or
         of the sale, forfeiture or loss of, any Property or title thereto or
         any interest therein or the payment of Rent, (b) such proceedings do
         not materially interfere with the construction of Improvements on any
         Property or the acquisition or refinancing of any Property, and (c)
         such proceedings shall not materially interfere with the disposition of
         any Property or title thereto or interest therein or the payment of
         Rent:



                                      -36-
<PAGE>   41

                  (b) Without prejudice to any right of the Owner Trustee under
         the Trust Agreement to resign (subject to requirement set forth in the
         Trust Agreement that such resignation shall not be effective until a
         successor shall have agreed to accept such appointment), or the
         Holders' rights under the Trust Agreement to remove the institution
         acting as Owner Trustee (after consent to such removal by the Agent as
         provided in the Trust Agreement), each of the Holders and the Owner
         Trustee hereby agrees with the Lessee and the Agent (i) not to
         terminate or revoke the trust created by the Trust Agreement except as
         permitted by Article VIII of the Trust Agreement, (ii) not to amend,
         supplement, terminate or revoke or otherwise modify any provision of
         the Trust Agreement in such a manner as to adversely affect the rights
         of the Lessee or the Agent without the prior written consent of such
         party and (iii) to comply with all of the terms of the Trust Agreement;

                  (c) The Owner Trustee or any successor may resign or be
         removed by the Holders as Owner Trustee, a successor Owner Trustee may
         be appointed and a corporation may become the Owner Trustee under the
         Trust Agreement, only in accordance with the provisions of Article IX
         of the Trust Agreement and, with respect to such appointment, with the
         consent of the Lessee, which consent shall not be unreasonably
         withheld, conditioned or delayed;

                  (d) The Owner Trustee, in its capacity as Owner Trustee under
         the Trust Agreement, and not in its individual capacity, shall not
         contract for, create, incur or assume any indebtedness, or enter into
         any business or other activity, other than pursuant to or under the
         Operative Agreements;

                  (e) The Holders will not instruct the Owner Trustee to take
         any action in violation of the terms of any Operative Agreement;

                  (f) Neither any Holder nor the Owner Trustee shall (i)
         commence any case, proceeding or other action with respect to the Owner
         Trustee under any existing or future law of any jurisdiction, domestic
         or foreign, relating to bankruptcy, insolvency, reorganization,
         arrangement, winding-up, liquidation, dissolution, composition or other
         relief with respect to it or its debts, or (ii) seek appointment of a
         receiver, trustee, custodian or other similar official with respect to
         the Owner Trustee or for all or any substantial benefit of the
         creditors of the Owner Trustee; and neither any Holder nor the Owner
         Trustee shall take any action in furtherance of, or indicating its
         consent to, approval of, or acquiescence in, any of the acts set forth
         in this paragraph;

                  (g) The Owner Trustee shall give prompt notice to the Lessee
         and the Agent if the Owner Trustee's chief place of business or chief
         executive office, or the office where the records concerning the
         accounts or contract rights relating to a Property are kept, shall


                                      -37-
<PAGE>   42

         cease to be located at First Security Bank, N.A., 79 South Main Street,
         Salt Lake City, Utah, 84111, or if it shall change its name;

                  (h) Provided that no Lease Event of Default has occurred and
         is continuing, neither the Owner Trustee nor any Holder shall, without
         the prior written consent of the Lessee, consent to or permit any
         amendment, supplement or other modification of the terms and provisions
         of the Credit Agreement or the Notes or (to the extent such amendment,
         supplement or modification would have an adverse effect on the rights
         or obligations of the Lessee under the Lease) any other Operative
         Agreement;

                  (i) Neither the Owner Trustee nor any Holder shall consent to
         or permit any amendment, supplement or other modification of the terms
         and provisions of any Operative Agreement, in each case without the
         prior written consent of the Agent except as described in Section 10.5
         of this Agreement;

                  (j) The Owner Trustee (i) shall take such actions and shall
         refrain from taking such actions with respect to the Operative
         Agreements or the Properties and shall grant such approvals and
         otherwise act or refrain from acting with respect to the Operative
         Agreements or the Properties in each case as directed in writing by the
         Agent or, in connection with Section 10.5 hereof, the Lessee,
         notwithstanding any contrary instruction or absence of instruction by
         any Holder or Holders; and (ii) shall not take any action, grant any
         approvals or otherwise act under or with respect to the Operative
         Agreements or any matters relating to the Properties without first
         obtaining the prior written consent of the Agent (and without regard to
         any contrary instruction or absence of instruction by any Holder);
         provided, however, that notwithstanding the foregoing provisions of
         this subparagraph (j) the Owner Trustee, the Agent and the Holders each
         acknowledge, covenant and agree that, with respect to all matters under
         the Operative Agreements that require the consent or concurrence of all
         of the Lenders pursuant to the terms of Section 9.1 of the Credit
         Agreement (the "Unanimous Vote Matters"), neither the Owner Trustee nor
         the Agent shall act or refrain from acting with respect to any
         Unanimous Vote Matter until such party has received the approval of
         each Lender and each Holder with respect thereto; and

                  (k) Except as otherwise contemplated by the Operative
         Agreements, neither the Owner Trustee nor any Holder shall use the
         proceeds of any Loan or Holder Funding for any purpose other than the
         payment of Transaction Expenses and the fees, expenses and other
         disbursements referenced in Sections 9.1 (a) and (b) of this Agreement,
         the purchase, refinance or lease of Properties, the acquisition or
         refinancing of Equipment, the acquisition or refinancing of
         Improvements and the payment of interest regarding the Loans and the
         payment of the Holder Yield regarding the Holder Fundings, in each case
         accrued under the Credit Agreement or Trust Agreement, as the case may
         be.



                                      -38-
<PAGE>   43

         10.3. Lessee Covenants, Consent and Acknowledgment.

                  (a) Lessee acknowledges and agrees that the Owner Trustee,
         pursuant to the terms and conditions of the Security Agreement and the
         Mortgage Instruments, shall create Liens respecting the various
         personal property, fixtures and real property described therein in
         favor of the Agent. Lessee hereby irrevocably consents to the creation,
         perfection and maintenance of such Liens.

                  (b) Lessor hereby instructs Lessee, and Lessee hereby
         acknowledges and agrees, that until such time as the Loans and all
         other amounts under the Operative Agreements are paid in full, (i) any
         and all Rent and any and all other amounts of any kind or type under
         any of the Operative Agreements due and owing or payable to the Lessor
         or the Owner Trustee shall instead be paid directly to the Agent or as
         the Agent may direct from time to time and (ii) Lessee shall cause all
         notices, certificates, financial statements, communications and other
         information which is delivered, or is required to be delivered, to the
         Lessor, the Owner Trustee or any Holder also to be delivered at the
         same time to the Agent.

                  (c) Lessee shall not consent to or permit any amendment,
         supplement or other modification of the terms or provisions of any
         Operative Agreement without, in each case, obtaining the prior written
         consent of the Agent and, to the extent required by the proviso at the
         end of Section 10.2(j) hereof, each of the Holders.

                  (d) Except as otherwise contemplated by the Operative
         Agreements, the Lessee shall not use the proceeds of any Holder Funding
         or Loan for any purpose other than the payment of Transaction Expenses
         and the fees, expenses and other disbursements referenced in Section
         9.1(a) and (b) of this Agreement, the purchase or lease of Properties,
         the acquisition of Equipment, the construction of Improvements, the
         payment of interest regarding the Loans and the payment of the Holder
         Yield regarding the Holder Fundings, in each case accrued under the
         Credit Agreement or Trust Agreement, as the case may be, during the
         period prior to the Acquisition Date with respect to a particular
         Property.

                  (e) The Lessee shall restrict the amount of Equipment located
         in or on each Property, so that at all times the Property Cost of the
         Equipment located in or on a given Property shall be less than or equal
         to 15% of the total Property Cost of such Property, provided, however,
         that this percentage limitation shall not apply to any such Equipment
         consisting of Fixtures or other goods incorporated into or customarily
         considered to be part of a building or structure erected on real
         property (such as heating, ventilating, air-conditioning, electrical
         and mechanical equipment or systems, escalators, elevators, wall and
         floor coverings, plumbing, pumps, tanks, conduits, wiring, lighting,
         security systems, sprinklers and other fire prevention and
         extinguishing apparatus). This 15% limitation



                                      -39-
<PAGE>   44

         shall apply to removable Equipment (including without limitation
         racking and picking equipment) that (i) is not incorporated into a
         building or structure or (ii) is customarily considered to be trade
         fixtures or operating equipment for the business of the Lessee.

                  (f) The Lessee shall not create or permit to exist at any time
         (and the Lessee shall, at its own expense, take such action as may be
         necessary to duly discharge, or cause to be discharged) any Lien
         against any Property other than Permitted Encumbrances.

                  (g) The Lessee shall pay (or cause to be paid) to the Agent
         the administrative fee (described in the Fee Letter) when and as due
         from time to time.

         10.4. Sharing of Certain Payments. The parties hereto acknowledge and
agree that all payments due and owing by the Lessee to the Lessor under the
Lease or any of the other Operative Agreements shall be made by the Lessee
directly to the Agent as more particularly provided in Section 10.3 hereof. The
Holders and the Agent, on behalf of the Lenders, acknowledge the terms of
Section 8 of the Credit Agreement regarding the allocation of payments and other
amounts made or received from time to time under the Operative Agreements and
agree all such payments and amounts are to be allocated as provided in Section 8
of the Credit Agreement. In connection therewith the Holders hereby (a) appoint
the Agent to act as collateral agent for the Holders in connection with the Lien
granted by the Mortgage Instruments to secure the Holder Amount and (b)
acknowledge and agree and direct that the rights and remedies of the
beneficiaries of the Lien of the Mortgage Instruments shall be exercised by the
Agent on behalf of the Lenders and the Holders as directed from time to time by
the Lenders without notice to or consent from the Holders.

         10.5. Grant of Easements, Voting at Meetings, etc. The Agent and the
Holders hereby agree that, so long as no Event of Default shall have occurred
and be continuing, and until such time as the Agent gives instructions to the
contrary to the Owner Trustee, the Owner Trustee shall, from time to time at the
request of the Lessee, in connection with the transactions contemplated by the
Lease or the other Operative Agreements, (i) grant easements and other rights in
the nature of easements with respect to any Property, (ii) release existing
easements or other rights in the nature of easements which are for the benefit
of any Property, (iii) execute and deliver to any Person any instrument
appropriate to confirm or effect such grants or releases, and (iv) execute and
deliver to any Person such other documents or materials in connection with the
acquisition, development or operation of any Property, including, without
limitation, reciprocal easement agreements, operating agreements, development
agreements, plats, replats or subdivision documents; provided, that each of the
agreements and documents referred to in this Section 10.5 shall be of the type
normally executed by the Lessee in the ordinary course of the Lessee's business
and shall be on commercially reasonable terms so as not to diminish the value of
any Property in any material respect.



                                      -40-
<PAGE>   45

         SECTION 11. Credit Agreement and Trust Agreement.

         11.1. Lessee's Credit Agreement Rights. Notwithstanding anything to the
contrary contained in the Credit Agreement, the Agent, the Lessee and the Owner
Trustee hereby agree that, prior to the occurrence and continuation of any Lease
Default or Lease Event of Default, the Lessee (as designated below) shall have
the following rights:

                  (a) the Lessee shall have the right to terminate or reduce the
         Commitments pursuant to Section 2.5(a) of the Credit Agreement and to
         make an Extension Request pursuant to Section 2.5(c) of the Credit
         Agreement;

                  (b) the Lessee shall have the right to exercise the conversion
         and continuation options pursuant to Section 2.7 of the Credit
         Agreement;

                  (c) the Lessee shall have the right to approve any successor
         agent pursuant to Section 7.9 of the Credit Agreement;

                  (d) the Lessee shall have the right to consent to any
         assignment by a Lender to which the Lessor has the right to consent
         pursuant to Section 9.8 of the Credit Agreement; and

                  (e) without limiting the foregoing clauses (a) through (d),
         and in addition thereto, the Lessee shall have the right to exercise
         any other right of the Owner Trustee under the Credit Agreement upon
         not less than five (5) Business Days' prior written notice from the
         Lessee to the Owner Trustee and the Agent.

         11.2. Lessee's Trust Agreement Rights. Notwithstanding anything to the
contrary contained in the Trust Agreement, the Lessee, the Owner Trustee and the
Holders hereby agree that, prior to the occurrence and continuation of any Lease
Default or Lease Event of Default, the Lessee (as designated below) shall have
the following rights:

                  (a) the Lessee shall have the right to exercise the conversion
         and continuation options pursuant to Section 3.8 of the Trust
         Agreement;

                  (b) no removal of the Owner Trustee or appointment of a
         successor Owner Trustee pursuant to Section 9.1 of the Trust Agreement
         shall be made without the prior written consent (not to be unreasonably
         withheld or delayed) of the Lessee; and

                  (c) the Holders and the Owner Trustee shall not amend,
         supplement or otherwise modify any provision of the Trust Agreement in
         such a manner as to adversely affect the rights of the Lessee without
         the prior written consent (not to be unreasonably withheld or delayed)
         of the Lessee.


                                      -41-
<PAGE>   46

         SECTION 12.  Transfer of Interest.

         12.1. Restrictions on Transfer. The Holders may, directly or
indirectly, assign, convey or otherwise transfer any of their right, title or
interest in or to the Trust Estate or the Trust Agreement with the prior written
consent of the Agent, and (provided, no Default or Event of Default has occurred
and is continuing) the Lessee, provided that such consents shall not be required
for an assignment to an Affiliate of a Lender. The Owner Trustee may, subject to
the Lien of the applicable Security Documents, but only with the prior written
consent of the Agent, the Holders (which consent may be withheld by the Agent or
the Holders in their sole discretion) and (provided no Default or Event of
Default has occurred and is continuing) the Lessee, directly or indirectly,
assign, convey, appoint an agent with respect to enforcement of, or otherwise
transfer any of the Owner Trustee's right, title or interest in or to any
Property, the Lease, the Trust Agreement, this Agreement (including, without
limitation, any right to indemnification thereunder), or any other document
relating to a Property or any interest in a Property as provided in the Trust
Agreement and the Lease. The provisions of the immediately preceding sentence
shall not apply to the obligations of the Owner Trustee to transfer Property to
Lessee or a third party purchaser pursuant to Article XXII of the Lease upon
payment for such Property in accordance with each of the terms and conditions of
the Lease.

         12.2. Effect of Transfer. From and after any transfer effected in
accordance with this Section 12, the transferor shall be released, to the extent
of such transfer, from its liability hereunder and under the other documents to
which it is a party in respect of obligations to be performed on or after the
date of such transfer; provided, however, that any transferor Holder shall
remain liable under Article XI of the Trust Agreement to the extent that the
transferee Holder shall not have assumed the obligations of the transferor
Holder thereunder. Upon any transfer by the Owner Trustee or a Holder as above
provided, any such transferee shall assume the obligations of the Owner Trustee
and Lessor or the obligations of a Holder, as the case may be, and shall be
deemed an "Owner Trustee", "Lessor" or "Holder", as the case may be, for all
purposes of such documents and each reference herein to the transferor shall
thereafter be deemed a reference to such transferee for all purposes, except as
provided in the preceding sentence. Notwithstanding any transfer of all or a
portion of the transferor's interest as provided in this Section 12, the
transferor shall be entitled to all benefits accrued and all rights vested prior
to such transfer including, without limitation, rights to indemnification under
any such document.

         SECTION 13.  Indemnification.

         13.1. General Indemnity. Whether or not any of the transactions
contemplated hereby shall be consummated, the Indemnity Provider hereby assumes
liability for and agrees to defend, indemnify and hold harmless each Indemnified
Person on an After Tax Basis from and against any Claims which may be imposed
on, incurred by or asserted against an Indemnified Person by any other Person
(but not to the extent such Claims arise from the gross negligence or willful



                                      -42-

<PAGE>   47


misconduct of such Indemnified Person) in any way relating to or arising, or
alleged (by any Person asserting such a claim against an Indemnified Person) to
arise, out of the execution, delivery, performance or enforcement of this
Agreement, the Lease, any other Operative Agreement or on or with respect to any
Property or any part thereof, including, without limitation, Claims in any way
relating to or arising or alleged to arise out of (a) the financing,
refinancing, purchase, acceptance, rejection, ownership, design, construction,
refurbishment, development, delivery, acceptance, nondelivery, leasing,
subleasing, possession, use, operation, repair, modification, transportation,
condition, sale, return, repossession (whether by summary proceedings or
otherwise), or any other disposition of a Property, or any part thereof,
including the acquisition, holding or disposition of any interest in any
Property, lease or agreement comprising a portion of any thereof; (b) any latent
or other defect in any property whether or not discoverable by an Indemnified
Person or the Indemnity Provider; (c) any Environmental Claim, any violation of
Environmental Laws, or any other loss of or damage to any property or the
environment relating to any Property, the Lease or the Indemnity Provider; (d)
the Operative Agreements, or any transaction contemplated thereby (except for
such Claims for which such Indemnified Person shall be required to indemnify the
Indemnity Provider pursuant to the terms of the Operative Agreements); (e) any
breach by the Lessee of any of its representations or warranties under the
Operative Agreements to which it is a party or failure by the Lessee to perform
or observe any covenant or agreement to be performed by it under any of the
Operative Agreements; (f) the transactions contemplated hereby or by any other
Operative Agreement, in respect of the application of Parts 4 and 5 of Subtitle
B of Title I of ERISA; (g) any personal injury, death or property damage,
including, without limitation, Claims based on strict or absolute liability in
tort; (h) any easement, right, agreement or document referred to in Section 10.5
of this Agreement; or (i) any Lien on any Property (other than Liens created by
the Operative Agreements), provided, that the Indemnity Provider shall not be
required to indemnify the Lessor for any Lessor Liens.

         If a written Claim is made against any Indemnified Person or if any
proceeding shall be commenced against such Indemnified Person (including a
written notice of such proceeding) for any Claim, such Indemnified Person shall
promptly notify the Indemnity Provider in writing and shall not take action with
respect to such Claim without the consent of the Indemnity Provider for thirty
(30) days after the receipt of such notice by the Indemnity Provider; provided,
however, that, in the case of any such Claim, if action shall be required by law
or regulation to be taken prior to the end of such 30- day period, such
Indemnified Person shall endeavor, in such notice to the Indemnity Provider, to
inform the Indemnity Provider of such shorter period, and no action shall be
taken with respect to such Claim without the consent of the Indemnity Provider
before seven (7) days before the end of such shorter period; provided, further,
that the failure of such Indemnified Person to give the notices referred to in
this sentence shall not diminish the Indemnity Provider's obligation hereunder
except to the extent such failure precludes the Indemnity Provider from
contesting such Claim.




                                      -43-

<PAGE>   48


         If, within thirty (30) days after receipt of such notice from the
Indemnified Person (or such shorter period as the Indemnified Person has
notified the Indemnity Provider is required by law or regulation for the
Indemnified Person to respond to such Claim), the Indemnity Provider shall
request in writing that such Indemnified Person respond to such Claim, the
Indemnified Person shall, at the expense of the Indemnity Provider, in good
faith conduct and control such action (including, without limitation by pursuit
of appeals) (provided, however, that (A) if such Claim can be pursued by the
Indemnity Provider on behalf of or in the name of such Indemnified Person, the
Indemnified Person, at the Indemnity Provider's request, shall allow the
Indemnity Provider to conduct and control the response to such Claim and (B) in
the case of any Claim, the Indemnified Person may request the Indemnity Provider
to conduct and control the response to such Claim (with counsel to be selected
by the Indemnity Provider and consented to by such Indemnified Person, such
consent not to be unreasonably withheld, conditioned or delayed); provided,
however that any Indemnified Party may retain separate counsel at the expense of
the Indemnity Provider in the event of a conflict that arises after the initial
response to such Claim); by, in the sole discretion of the Person conducting and
controlling the response to such Claim, (1) resisting payment thereof, (2) not
paying the same except under protest, if protest is necessary and proper, (3) if
the payment be made, using reasonable efforts to obtain a refund thereof in
appropriate administrative and judicial proceedings, or (4) taking such other
action as is reasonably requested by the Indemnity Provider from time to time.

         The party controlling the response to any Claim shall consult in good
faith with the non-controlling party and shall keep the non-controlling party
reasonably informed as to the conduct of the response to such Claim; provided,
that all decisions ultimately shall be made in the discretion of the controlling
party, except that the Indemnity Provider may not agree to any dismissal or
settlement of, or other agreement in connection with, any claim without the
prior written consent of such Indemnified Person, if such dismissal, settlement
or agreement would require any admission or acknowledgment of any culpability or
wrongdoing by such Indemnified Person or provide for any nonmonetary relief to
be performed by such Indemnified Person. The parties agree that an Indemnified
Person may at any time decline to take further action with respect to the
response to such Claim and may settle such Claim if such Indemnified Person
shall waive its rights to any indemnity from the Indemnity Provider that
otherwise would be payable in respect of such Claim (and any future Claim, the
pursuit of which is precluded by reason of such resolution of such Claim) and
shall pay the Indemnity Provider any amount previously paid or advanced by the
Indemnity Provider pursuant to this Section 13.1 by way of indemnification or
advance for the payment of any amount regarding such Claim other than expenses
of the action relating to such Claim.

         Notwithstanding the foregoing provisions of this Section 13.1, an
Indemnified Person shall not be required to take any action and no Indemnity
Provider shall be permitted to respond to any Claim in its own name or that of
the Indemnified Person unless (A) the Indemnity Provider shall have agreed to
pay and shall pay to such Indemnified Person on demand and on an After Tax Basis
all reasonable costs, losses and expenses that such Indemnified Person actually



                                      -44-

<PAGE>   49


incurs in connection with such Claim, including, without limitation, all
reasonable legal, accounting and investigatory fees and disbursements, (B) the
Indemnified Person shall have reasonably determined the action to be taken will
not result in any material danger of sale, forfeiture or loss of any Property,
or any part thereof or interest therein, will not interfere with the payment of
Rent, and will not result in risk of criminal liability, (C) if such Claim shall
involve the payment of any amount prior to the resolution of such Claim, the
Indemnity Provider shall provide to the Indemnified Person an interest-free
advance in an amount equal to the amount that the Indemnified Person is required
to pay (with no additional net after-tax cost to such Indemnified Person), (D)
in the case of a Claim that must be pursued in the name of an Indemnified Person
(or an Affiliate thereof), the Indemnity Provider shall have provided to such
Indemnified Person a letter from a Responsible Officer stating that a reasonable
basis exists to contest such Claim, and (E) no Lease Event of Default shall have
occurred and be continuing. In addition, an Indemnified Person shall not be
required to contest any Claim in its name (or that of an Affiliate) if the
subject matter thereof shall be of a continuing nature and shall have previously
been decided adversely by a court of competent jurisdiction pursuant to the
contest provisions of this Section 13.1, unless there shall have been a change
in law (or interpretation thereof) and the Indemnified Person shall have
received, at the Indemnity Provider's expense, an opinion of independent counsel
selected by the Indemnified Person and reasonably acceptable to the Indemnity
Provider stating that as a result of such change in law (or interpretation
thereof), it is more likely than not that the Indemnified Person will prevail in
such contest.

         13.2.    General Tax Indemnity.

                  (a) The Indemnity Provider shall pay and assume liability for,
         and does hereby agree to indemnify, protect and defend each Property
         and all Indemnified Persons, and hold them harmless against, all
         Impositions on an After Tax Basis.

                  (b) (i) Subject to the terms of Section 13.2(f) hereof and
         Section 13.1 of the Lease, the Indemnity Provider shall pay or cause to
         be paid all Impositions directly to the taxing authorities where
         feasible and otherwise to the Indemnified Person, as appropriate, and
         the Indemnity Provider shall at its own expense, upon such Indemnified
         Person's reasonable request, furnish to such Indemnified Person copies
         of official receipts or other satisfactory proof evidencing such
         payment.

                      (ii) In the case of Impositions for which no contest is
         conducted pursuant to Section 13.2(f) hereof or Section 13.1 of the
         Lease, and which the Indemnity Provider pays directly to the taxing
         authorities, the Indemnity Provider shall pay such Impositions prior to
         the latest time permitted by the relevant taxing authority for timely
         payment. In the case of Impositions for which the Indemnity Provider
         reimburses an Indemnified Person, the Indemnity Provider shall do so
         within thirty (30) days after receipt by the Indemnity Provider of
         demand by such Indemnified Person describing in reasonable detail the
         nature of the Imposition and the basis for the demand (including the



                                      -45-

<PAGE>   50


         computation of the amount payable). In the case of Impositions for
         which a contest is conducted pursuant to Section 13.2(f) hereof or
         Section 13.1 of the Lease, the Indemnity Provider shall pay such
         Impositions or reimburse such Indemnified Person for such Impositions
         to the extent not previously paid or reimbursed, prior to the latest
         time permitted by the relevant taxing authority for timely payment
         after conclusion of all contests under Section 13.2(f) hereof and
         Section 13.1 of the Lease.

                      (iii) Impositions imposed with respect to a Property for a
         billing period during which the Lease expires or terminates with
         respect to such Property (unless the Lessee has exercised the Purchase
         Option with respect to such Property or the Lessee has otherwise
         purchased such Property) shall be adjusted and prorated on a daily
         basis between the Indemnity Provider and the Lessor, whether or not
         such Imposition is imposed before or after such expiration or
         termination and each party shall pay its pro rata share thereof.

                      (iv) At the Indemnity Provider's request, the amount of
         any indemnification payment by the Indemnity Provider pursuant to
         subsection (a) shall be verified and certified by an independent public
         accounting firm mutually acceptable to the Indemnity Provider and the
         Indemnified Person. The fees and expenses of such independent public
         accounting firm shall be paid by the Indemnity Provider unless such
         verification shall result in an adjustment in the Indemnity Provider's
         favor of 10% or more of the payment as computed by the Indemnified
         Person, in which case such fee shall be paid by the Indemnified Person.

                  (c) The Indemnity Provider shall be responsible for preparing
         and filing any real and personal property or ad valorem tax returns
         with respect to each Property. In case any other report or tax return
         shall be required to be made with respect to any obligations of the
         Indemnity Provider under or arising out of subsection (a) and of which
         the Indemnity Provider has knowledge or written notice, the Indemnity
         Provider, at its sole cost and expense, shall notify the relevant
         Indemnified Person of such requirement and (except if such Indemnified
         Person notifies the Indemnity Provider that such Indemnified Person
         intends to file such report or return) (A) to the extent required or
         permitted by and consistent with Legal Requirements, make and file in
         Indemnity Provider's name such return, statement or report; and (B) in
         the case of any other such return, statement or report required to be
         made in the name of such Indemnified Person, advise such Indemnified
         Person of such fact and prepare such return, statement or report for
         filing by such Indemnified Person or, where such return, statement or
         report shall be required to reflect items in addition to any
         obligations of the Indemnity Provider under or arising out of
         subsection (a), provide such Indemnified Person at the Indemnity
         Provider's expense with information sufficient to permit such return,
         statement or report to be properly made with respect to any obligations
         of the Indemnity Provider under or arising out of subsection (a). Such
         Indemnified Person shall, upon the Indemnity



                                      -46-

<PAGE>   51


         Provider's request and at the Indemnity Provider's expense, provide any
         data maintained by such Indemnified Person (and not otherwise available
         to or within the control of the Indemnity Provider) with respect to any
         Property which the Indemnity Provider may reasonably require to prepare
         any required tax returns or reports.

                  (d) If as a result of the payment or reimbursement by the
         Indemnity Provider of any Imposition or other reasonable expenses of
         the Lessor or the payment of any Transaction Expenses incurred in
         connection with the transactions contemplated by the Operative
         Agreements, the Lessor or the Holders shall suffer a net increase in
         any federal, state or local income tax liability, the Indemnity
         Provider shall indemnify such Persons (without duplication of any
         indemnification required by subsection (a)) on an After Tax Basis for
         the amount of such increase. The calculation of any such net increase
         shall take into account any current or future tax savings realized or
         reasonably expected to be realized by such Person in respect thereof,
         as well as any interest, penalties and additions to tax payable by such
         Lessor, or such Holder, in respect thereof.

                  (e) As between the Indemnity Provider on one hand, and the
         Lessor or the Agent, any Lender or any Holder on the other hand, the
         Indemnity Provider shall be responsible for, and the Indemnity Provider
         shall indemnify and hold harmless the Lessor, the Agent, the Lenders
         and each Holder (without duplication of any indemnification required by
         subsection (a)) on an After Tax Basis against, any obligation for
         United States or foreign withholding taxes imposed in respect of
         payments on the Notes or Certificates or with respect to Rent payments
         under the Lease (and, if the Lessor, the Agent, any Lender or any
         Holder receives a demand for such payment from any taxing authority,
         the Indemnity Provider shall discharge such demand on behalf of the
         Lessor, the Agent, such Lender or such Holder); provided, however, that
         the right of any Lender to make a claim for indemnification under this
         Section 13.2(e) is subject to the compliance by such Lender with the
         requirements of Section 2.13 of the Credit Agreement.

                  (f) If a written Claim is made against any Indemnified Person,
         or if any proceeding shall be commenced against such Indemnified Person
         (including a written notice of such proceeding), for any Impositions,
         such Indemnified Person shall promptly notify the Indemnity Provider in
         writing and shall not take action with respect to such Claim or
         proceeding without the consent of the Indemnity Provider for thirty
         (30) days after the receipt of such notice by the Indemnity Provider;
         provided, however, that, in the case of any such Claim or proceeding,
         if action shall be required by law or regulation to be taken prior to
         the end of such 30-day period, such Indemnified Person shall, in such
         notice to the Indemnity Provider, inform the Indemnity Provider of such
         shorter period, and no action shall be taken with respect to such Claim
         or proceeding without the consent of the Indemnity Provider before
         seven (7) days before the end of such shorter period; provided,
         further, that the failure of such Indemnified Person to give the
         notices referred



                                      -47-

<PAGE>   52


         to this sentence shall not diminish the Indemnity Provider's obligation
         hereunder except to the extent such failure precludes the Indemnity
         Provider from contesting such Claim.

                           (i) Subject to Section 13.2(g) below regarding
                  contests of Property Taxes by the Lessee, if, within thirty
                  (30) days after receipt of such notice from the Indemnified
                  Person (or such shorter period as provided in this Section
                  13.2(f)), the Indemnity Provider shall request in writing that
                  such Indemnified Person contest such Imposition, the
                  Indemnified Person shall, at the expense of the Indemnity
                  Provider, in good faith conduct and control such contest
                  (including, without limitation, by pursuit of appeals)
                  relating to the validity, applicability or amount of such
                  Imposition (provided, however, that (A) if such contest can be
                  pursued independently from any other proceeding involving a
                  tax liability of such Indemnified Person, the Indemnified
                  Person, at the Indemnity Provider's request, shall allow the
                  Indemnity Provider to conduct and control such contest and (B)
                  in the case of any contest, the Indemnified Person may request
                  the Indemnity Provider to conduct and control such contest
                  (with counsel to be selected by the Indemnity Provider and
                  consented to by such Indemnified Person, such consent not to
                  be unreasonably withheld, conditioned or delayed; provided,
                  however, that any Indemnified Person may retain separate
                  counsel at the expense of the Indemnity Provider in the event
                  of a conflict that first arises after the initial response to
                  such Claim) by, in the sole discretion of the Person
                  conducting and controlling such contest, (1) resisting payment
                  thereof, (2) not paying the same except under protest, if
                  protest is necessary and proper, (3) if the payment be made,
                  using reasonable efforts to obtain a refund thereof in
                  appropriate administrative and judicial proceedings, or (4)
                  taking such other action as is reasonably requested by the
                  Indemnity Provider from time to time.

                           (ii) Subject to Section 13.2(g) below regarding
                  contests of Property Taxes by the Lessee, the party
                  controlling any contest shall consult in good faith with the
                  non-controlling party and shall keep the non-controlling party
                  reasonably informed as to the conduct of such contest;
                  provided, that all decisions ultimately shall be made in the
                  sole discretion of the controlling party, except that the
                  Indemnity Provider may not agree to any dismissal or
                  settlement of, or other agreement in connection with, any
                  claim without the prior written consent of such Indemnified
                  Person, if such dismissal, settlement or agreement would
                  require any admission or acknowledgment of any culpability or
                  wrongdoing by such Indemnified Person or provide for any
                  nonmonetary relief to be performed by such Indemnified Person.
                  The parties agree that an Indemnified Person may at any time
                  decline to take further action with respect to the contest of
                  any Imposition and may settle such contest if such Indemnified
                  Person shall waive its rights to any indemnity from the
                  Indemnity Provider that otherwise would be payable in respect
                  of such Imposition (and any future Claim by any taxing



                                      -48-

<PAGE>   53


                  authority, the contest of which is precluded by reason of such
                  resolution of such contest) and shall pay to the Indemnity
                  Provider any amount previously paid or advanced by the
                  Indemnity Provider pursuant to this Section 13.2 for the
                  payment of any amount regarding such Imposition other than
                  expenses of such contest.

                           (iii) Subject to Section 13.2(g) below regarding
                  contests of Property Taxes by the Lessee, notwithstanding the
                  foregoing provisions of this Section 13.2, an Indemnified
                  Person shall not be required to take any action and no
                  Indemnity Provider shall be permitted to contest any
                  Imposition in its own name or that of the Indemnified Person
                  unless (A) the Indemnity Provider shall have agreed to pay and
                  shall pay to such Indemnified Person on demand and on an After
                  Tax Basis all reasonable costs, losses and expenses that such
                  Indemnified Person actually incurs in connection with
                  contesting such Imposition, including, without limitation, all
                  reasonable legal, accounting and investigatory fees and
                  disbursements, (B) the Indemnified Person shall have
                  reasonably determined that the action to be taken will not
                  result in any material danger of sale, forfeiture or loss of
                  any Property, or any part thereof or interest therein, will
                  not interfere with the payment of Rent, and will not result in
                  risk of criminal liability, (C) unless payment of such
                  Imposition is not yet due or is stayed pending such contest,
                  the Indemnity Provider shall either pay such Imposition or
                  provide to the Indemnified Person an interest-free advance in
                  an amount equal to the Imposition that the Indemnified Person
                  is required to pay (with no additional net after-tax cost to
                  such Indemnified Person), (D) in the case of a Claim that must
                  be pursued in the name of an Indemnified Person (or an
                  Affiliate thereof), the Indemnity Provider shall have provided
                  to such Indemnified Person an opinion of independent or
                  in-house tax counsel selected by the Indemnified Person and
                  reasonably satisfactory to the Indemnity Provider stating that
                  a reasonable basis exists to contest such Claim, and (E) no
                  Event of Default shall have occurred and be continuing.

                  (g) Sections 13.2(f)(i) through (iii) shall not apply to
         contests by the Lessee of Property Taxes (and Property Tax assessments)
         with respect to any Property. Such contests are governed by Section
         13.1 of the Lease. However, Sections 13.2(f)(i) through (iii) shall
         apply if Lessee (or any other Indemnity Provider) requests that any
         Indemnified Person control the contest of such Property Taxes.

         SECTION 14.  Miscellaneous.

         14.1.    Survival of Agreements. The representations, warranties,
covenants, indemnities and agreements of the parties provided for in the
Operative Agreements, and the parties' obligations under any and all thereof,
shall survive the execution and delivery of this Agreement, the transfer of any
Property to the Owner Trustee, the acquisition of any Equipment, the
construction of any Improvements, any disposition of any interest of the Owner
Trustee in any


                                      -49-

<PAGE>   54


Property or any interest of the Holders in the Owner Trust, the payment of the
Notes and any disposition thereof, and shall be and continue in effect
notwithstanding any investigation made by any party and the fact that any party
may waive compliance with any of the other terms, provisions or conditions of
any of the Operative Agreements. Except as otherwise expressly set forth herein
or in other Operative Agreements, the indemnities of the parties provided for in
the Operative Agreements shall survive the expiration or termination of any
thereof.

         14.2. No Broker, etc. Each of the parties hereto (other than the Lessee
and the Guarantor) represents to the other parties hereto that it has not
retained or employed any broker, finder or financial adviser to act on its
behalf in connection with this Agreement, nor has it authorized any broker,
finder or financial adviser retained or employed by any other Person so to act.
Any party who is in breach this representation shall indemnify and hold the
other parties harmless from and against any liability arising out of such breach
of this representation. The Lessee and the Guarantor covenants that (a) it will
not permit any broker, finder, financial adviser or other Person employed by it
so to act to have any Lien against any Property or the Trust Estate or any part
thereof, and (b) (without limiting the generality of Article XIII) it will
indemnify and hold each Indemnified Person harmless from and against any
liability arising out of any fee or other Claim of any such broker, finder,
financial advisor or other Person employed by the Lessee or the Guarantor so to
act.

         14.3. Notices. Unless otherwise specifically provided herein, all
notices, consents, directions, approvals, instructions, requests and other
communications required or permitted by the terms hereof to be given to any
Person shall be given in writing by United States certified or registered mail
(postage prepaid), by nationally recognized courier service, by hand or by
telecopy with confirming notice and any such notice shall become effective upon
receipt and shall be directed to the address of such Person as indicated:

If to the Lessee or to the Guarantor, to it at the following address:

         Tenneco Packaging Inc.
         1900 West Field Court
         Lake Forest, Illinois  60045
         Attention: General Counsel
         Telephone No.:  847/482-2000
         Telefacsimile No.:  847/482-4738








                                      -50-

<PAGE>   55


If to the Owner Trustee, to it at the following address:

         First Security Bank, N.A.
         79 South Main Street
         Salt Lake City, Utah  84111
         Attention: Val Orton
         Telephone No.: (801) 246-5630
         Telefacsimile No.: (801) 246-5053

If to Bank of America, N.A., as a Holder or a Lender, to it at the following
address:

         Bank of America, N.A.
         101 North Tryon Street
         NC1-001-15-12
         Charlotte, North Carolina 28255
         Attention: Mollie Canup
         Telephone No.: (704) 386-1316
         Telefacsimile No.: (704) 409-0011


         with all notices of requests for Loans or Holder Fundings, or
         conversion, continuation or prepayment of any Loans or Holder Funding,
         to be sent to:

         Bank of America, N.A.
         101 North Tryon Street
         NC1-001-15-12
         Charlotte, North Carolina 28255
         Attention: Mollie Canup
         Telephone No.: (704) 386-1316
         Telefacsimile No.: (704) 409-0011

If to the Agent, to it at the following address:

         Bank of America, N.A.
         101 North Tryon Street
         NC1-001-15-12
         Charlotte, North Carolina 28255
         Attention: Mollie Canup
         Telephone No.: (704) 386-1316
         Telefacsimile No.: (704) 409-0011

with all notices of borrowing, conversion, continuation or prepayment of any
Loan to be delivered to the address set forth in Section 9.2 of the Credit
Agreement.


                                      -51-

<PAGE>   56


If to any other Lender or Holder, to it at the address specified in the
signature pages to the Credit Agreement or Trust Agreement (as applicable), any
applicable amendment thereto, or any applicable Assignment and Assumption.

From time to time any party may designate a new address for purposes of notice
hereunder by notice to each of the other parties hereto.

         14.4. Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute but
one and the same instrument.

         14.5. Amendments and Termination. Neither this Agreement nor any of the
terms hereof may be terminated, amended, supplemented, waived or modified except
by an instrument in writing signed by the Lessor, the Lessee and (subject to
Section 9.1 of the Credit Agreement), the Agent. This Agreement may be
terminated by an agreement signed in writing by the Owner Trustee, the Holders,
the Lessee and the Agent.

         14.6. Headings, etc. The Table of Contents and headings of the various
Articles and Sections of this Agreement are for convenience of reference only
and shall not modify, define, expand or limit any of the terms or provisions
hereof.

         14.7. Parties in Interest. Except as expressly provided herein, none of
the provisions of this Agreement are intended for the benefit of any Person
except the parties hereto; provided, that the Lenders are intended to be
third-party beneficiaries of this Agreement.

         14.8. GOVERNING LAW; WAIVERS OF JURY TRIAL.

               (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
         INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK,
         WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICT OF
         LAWS.

               (b) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH OF
         THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY
         IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR
         ANY COUNTERCLAIM THEREIN.

         14.9. Submission to Jurisdiction; Waivers. Each of the parties hereto
irrevocably and unconditionally:

               (a) submits for itself and its property in any legal action or
         proceeding relating to this Agreement and the other Operative
         Agreements to which it is a party, or for



                                      -52-

<PAGE>   57


         recognition and enforcement of any judgment in respect thereof, to the
         non-exclusive general jurisdiction of the courts of the State of New
         York and the courts of the United States of America, in each case
         sitting in New York, New York, and appellate courts from any thereof;

               (b) consents that any such action or proceeding may be brought in
         such courts and waives any objection that it may now or hereafter have
         to the venue of any such action or proceeding in any such court or that
         such action or proceeding was brought in an inconvenient court and
         agrees not to plead or claim the same,

               (c) agrees that service of process in any such action or
         proceeding may be effected by mailing a copy thereof by registered or
         certified mail (or any substantially similar form of mail) postage
         prepaid, to the respective party at its address set forth in Section
         14.3 hereof or at such other address of which the Administrative Agent
         shall have been notified pursuant thereto;

               (d) agrees that nothing herein shall affect the right to effect
         service of process in any other manner permitted by law or shall limit
         the right to sue in any other jurisdiction; and

               (e) waives, to the maximum extent not prohibited by law, any
         right it may have to claim or recover in any legal action or proceeding
         referred to in this Section 14.9 any special, exemplary, punitive or
         consequential damages.

         14.10. Severability. Any provision of this Agreement that is prohibited
or enforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining visions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render such
provision unenforceable in any other jurisdiction.

         14.11.   Liability Limited.

               (a) The Agent, the Lessee and the Holders each acknowledge and
         agree that the Owner Trustee is (except as otherwise expressly provided
         herein or therein) entering into this Agreement and the other Operative
         Agreements to which it is a party (other than the Trust Agreement and
         other than as set forth in Section 7.2 of this Agreement), solely in
         its capacity as trustee under the Trust Agreement and not in its
         individual capacity and that Trust Company shall not be liable or
         accountable under any circumstances whatsoever in its individual
         capacity for or on account of any statements, representations,
         warranties, covenants or obligations stated to be those of the Owner
         Trustee, except for its own gross negligence or willful misconduct and
         except as otherwise expressly provided herein or in the other Operative
         Agreements.



                                      -53-
<PAGE>   58



               (b) Anything to the contrary contained in this Agreement, the
         Credit Agreement, the Notes or in any other Operative Agreement
         notwithstanding, neither the Lessor nor any Holder (in its capacity as
         a Holder) nor any officer, director, shareholder, or partner thereof,
         nor any of the successors or assigns of the foregoing (all such Persons
         being hereinafter referred to collectively as the "Exculpated
         Persons"), shall be personally liable in any respect for any liability
         or obligation hereunder or under any other Operative Agreement
         including the payment of the principal of, or interest on, the Notes,
         or for monetary damages for the breach of performance of any of the
         covenants contained in the Credit Agreement, the Notes, this Agreement,
         the Security Agreement or any of the other Operative Agreements. The
         Agent (for itself and on behalf of the Lenders) agrees that, in the
         event the Agent or any Lender pursues any remedies available to them
         under the Credit Agreement, the Notes, this Agreement, the Security
         Agreement, the Mortgage Instruments or under any other Operative
         Agreement, neither the Lenders nor the Agent shall have any recourse
         against any Exculpated Person, for any deficiency, loss or Claim for
         monetary damages or otherwise resulting therefrom, and recourse shall
         be had solely and exclusively against the Trust Estate and the Lessee
         (with respect to the Lessee's obligations under the Lease, and the
         Participation Agreement); but nothing contained herein shall be taken
         to prevent recourse against or the enforcement of remedies against the
         Trust Estate in respect of any and all liabilities, obligations and
         undertakings contained herein, in the Credit Agreement, in the Notes,
         in the Security Agreement, the Mortgage Instruments or in any other
         Operative Agreement. Notwithstanding the provisions of this Section,
         nothing in this Agreement, the Credit Agreement, the Notes, the
         Security Agreement, the Mortgage Instruments or any other Operative
         Agreement shall: (i) constitute a waiver, release or discharge of any
         indebtedness or obligation evidenced by the Notes or arising under this
         Agreement, the Security Agreement, the Mortgage Instruments or the
         Credit Agreement or secured by the Security Agreement, the Mortgage
         Instruments or any other Operative Agreement, but the same shall
         continue until paid or discharged; (ii) relieve the Lessor or any
         Exculpated Person from liability and responsibility for (but only to
         the extent of the damages arising by reason of): (a) active waste
         knowingly committed by such Lessor or such Exculpated Person with
         respect to the Properties or (b) any fraud, gross negligence, willful
         misconduct or willful breach on the part of such Lessor or such
         Exculpated Person; (iii) relieve such Lessor or such Exculpated Person
         from liability and responsibility for (but only to the extent of the
         moneys misappropriated, misapplied or not turned over) (a)
         misappropriation or misapplication by such Lessor (i.e., application in
         a manner contrary to any Operative Agreement) of any insurance proceeds
         or condemnation award paid or delivered to such Lessor by any Person
         other than the Agent, or (b) any rents or other income received by such
         Lessor from the Lessee that are not turned over to the Agent; or (iv)
         affect or in any way limit the Agent's rights and remedies under any
         Operative Agreement with respect to the Rents and its rights thereunder
         or its right to obtain a judgment against the Lessor's interest in the
         Properties.


                                      -54-
<PAGE>   59



         14.12. Rights of Lessee. Notwithstanding any provision of the Operative
Agreements, if at any time all obligations (i) of the Owner Trustee under the
Credit Agreement, the Security Documents, the Trust Agreement and the other
Operative Agreements and (ii) of the Lessee under the Operative Agreements have
in each case been satisfied or discharged in full, then the Lessee shall be
entitled to (a) terminate the Lease and (b) receive all amounts then held under
the Operative Agreements and proceeds with respect to any of the Properties.
Upon the termination of the Lease pursuant to the foregoing clause (a), the
Lessor shall transfer to the Lessee all of its right, title and interest free
and clear of the Lien of the Lease and all Lessor Liens in and to any Properties
then subject to the Lease and any amounts or proceeds referred to in the
foregoing clause (b) shall be paid over to the Lessee.

         14.13. Further Assurances. The parties hereto shall promptly cause to
be taken, executed, acknowledged or delivered, at the sole expense of the
Lessee, all such further acts, conveyances, documents and assurances as the
other parties may from time to time reasonably request in order to carry out and
effectuate the intent and purposes of this Participation Agreement, the other
Operative Agreements and the transactions contemplated hereby and thereby
(including, without limitation, the preparation, execution and filing of any and
all Uniform Commercial Code financing statements and other filings or
registrations which the parties hereto may from time to time request to be filed
or effected). The Lessee, at its own expense and without need of any prior
request from any other party, shall take such action as may be necessary
(including any action specified in the preceding sentence), or (if Owner Trustee
shall so request) as so requested, in order to maintain and protect all security
interests provided for hereunder or under any other Operative Agreement.

         14.14. Calculations under Operative Agreements. The parties hereto
agree that all calculations and numerical determinations to be made under the
Operative Agreements by the Owner Trustee shall be made by the Agent and that
such calculations and determinations shall be conclusive and binding on the
parties hereto the absence of manifest error.

         14.15. Confidentiality. Each of the Owner Trustee, the Holders, the
Agent and the Lenders severally agrees to use reasonable efforts to keep
confidential all non-public information pertaining to the Lessee or its
Subsidiaries which is provided to it by the Lessee or its Subsidiaries, and
shall not intentionally disclose such information to any Person except:

               (a) to the extent such information is public when received by
         such Person or becomes public thereafter due to the act or omission of
         any party other than such Person;

               (b) to the extent such information is independently obtained from
         a source other than the Guarantor or any of its Subsidiaries and such
         information from such source is not, to such Person's knowledge,
         subject to an obligation of confidentiality or, if such information is
         subject to an obligation of confidentiality, that disclosure of such
         information is permitted;


                                      -55-
<PAGE>   60



               (c) to any Affiliate of any such Person or to counsel, auditors
         or accountants retained by any such Person or any such Affiliate,
         provided they agree to keep such information confidential as if such
         Person or Affiliate were party to this Agreement and to financial
         institution regulators, including examiners of any Lender, the Agent or
         the Owner Trustee, any Holder or any Affiliate in the course of
         examinations of such Persons;

               (d) in connection with any litigation or the enforcement or
         preservation of the rights of the Agent, the Owner Trustee, the Lessor,
         any Lender or any Holder under the Operative Agreements;

               (e) to the extent required by any applicable statute, rule or
         regulation or court order (including, without limitation, by way of
         subpoena) or pursuant to the request of any regulatory or Governmental
         Authority having jurisdiction over any such Person; provided, however,
         that such Person shall endeavor (if not otherwise prohibited by Law) to
         notify the Guarantor prior to any disclosure made pursuant to this
         clause (e), except that no such Person shall be subject to any
         liability whatsoever for any failure to so notify the Guarantor;

               (f) the Agent, the Owner Trustee, any Lender or any Holder may
         disclose such information to the Agent, the Owner Trustee, any Lender
         or any Holder; or

               (g) to the extent disclosure to any other financial institution
         or other Person is appropriate in connection with any proposed or
         actual (i) assignment or grant of a participation by any of the Lenders
         of interests in the Credit Agreement or any Note to such other
         financial institution or (ii) assignment by any Holder of interests in
         the Trust Agreement to another Person.

         14.16. Calculation of Rent, Interest, Holder Yield and Fees. Except as
otherwise expressly set forth in the Operative Agreements, all calculation of
Rent, interest, Holder Yield, Overdue Rate, Holder Overdue Rate, Facility Fees,
or Holder Facility Fees payable hereunder shall be computed based on the actual
number of days elapsed over a year of 360 days.

         14.17. Assignment Clause. Notwithstanding anything to the contrary
contained herein, any Bank (a "Granting Bank") may grant to a special purpose
funding vehicle (an "SPC"), identified as such in writing from time to time by
the Granting Bank to the Administrative Agent and the Borrower, the option to
provide to the Borrower all or any part of any Advance that such Granting Bank
would otherwise be obligated to make to the Borrower pursuant to this Agreement;
provided that (i) nothing herein shall constitute a commitment by any SPC to
make any Advance, (ii) if an SPC elects not to exercise such option or otherwise
fails to provide all or any part of such Advance, the Granting Bank shall be
obligated to make such Advance pursuant to the terms hereof. The making of an
Advance by an SPC hereunder shall utilize the Commitment of the Granting Bank to
the same extent, and as if, such Advance were made by



                                      -56-
<PAGE>   61


such Granting Bank. Each party hereto hereby agrees that no SPC shall be liable
for any indemnity or similar payment obligation under this Agreement (all
liability for which shall remain with the Granting Bank). In furtherance of the
foregoing, each party hereto hereby agrees (which agreement shall survive the
termination of this Agreement) that, prior to the date that is one year and one
day after the payment in full of all outstanding commercial paper or other
senior indebtedness of any SPC any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings under the laws of the United States or any
State thereof. In addition, notwithstanding anything to the contrary contained
in this Section 14.17, any SPC may (i) with notice to, but without the prior
written consent of, the Borrower and the Administrative Agent and without paying
any processing fee therefor, assign all or a portion of its interests in any
Advances to the Granting Bank or to any financial institutions (consented to by
the Borrower and Administrative Agent) providing liquidity and/or credit support
to or for the account such SPC to support the funding or maintenance of Advances
and (ii) disclose on a confidential basis any non-public information relating to
its Advances to any rating agency, commercial paper dealer or provider of any
surety, guarantee or credit or liquidity enhancement to such SPC. This section
may not be amended without the written consent of the SPC.


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]



                                      -57-
<PAGE>   62




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


                                       TENNECO PACKAGING INC.,
                                         as Lessee and Guarantor


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






<PAGE>   63



                                        FIRST SECURITY BANK, N.A., not
                                        individually, except as expressly stated
                                        herein, but solely as Owner Trustee
                                        under the Temple Trust 1997-1


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




<PAGE>   64



                                        BANK OF AMERICA N.A.,
                                          as Administrative Agent


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


                                        BANK OF AMERICA N.A.,
                                          as a Holder


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


                                        BANK OF AMERICA N.A.,
                                          as a Lender


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


                                        FUNDING OFFICE:






<PAGE>   65



                                   SCHEDULE I

                                 Initial Holders


<TABLE>
<CAPTION>

                                                  Holder
          Name                                  Commitment

<S>                                           <C>
          Bank of America, N.A                $   656,250.00

          Credit Suisse First Boston          $   656,250.00

          Bank One, NA                        $   656,250.00

          Banque Nationale de Paris           $   656,250.00

          The Bank of New York                $   468,750.00

          CSL Leasing, Inc.                   $   468,750.00

          Commerzbank AG                      $   468,750.00

          First Union National Bank           $   468,750.00

          Barclays Bank PLC                   $   468,750.00

          IBJTC Leasing                       $   375,000.00
          Corporation/BSC

          Bank Hapoalim B.M                   $   843,750.00

          BBL International (U.K.)            $   375,000.00
          Limited
</TABLE>



<PAGE>   66
                                   SCHEDULE II


                             TENNECO PACKAGING INC.
                      MEMORANDUM OF LITIGATION AND CLAIMS


<PAGE>   67



                                  SCHEDULE III


                                 PERMITTED LIENS



<PAGE>   68


                                    EXHIBIT A

                                REQUISITION FORM
        (Pursuant to Sections 4.2 and 5.2 of the Participation Agreement)


<PAGE>   69



                                    EXHIBIT B


                             TENNECO PACKAGING INC.


                              OFFICER'S CERTIFICATE
         (Pursuant to Section 5.3(xxii) of the Participation Agreement)


<PAGE>   70



                                    EXHIBIT C

                                 FORM OF OPINION
                                  OF COUNSEL TO
                             TENNECO PACKAGING INC.
<PAGE>   71



                                    EXHIBIT D

                             TENNECO PACKAGING INC.

                              OFFICER'S CERTIFICATE
          (Pursuant to Section 6.1 (e) of the Participation Agreement)


<PAGE>   72



                                   EXHIBIT E

                             TENNECO PACKAGING INC.

                            SECRETARY'S CERTIFICATE
          (Pursuant to Section 6.1 (f) of the Participation Agreement)


<PAGE>   73



                                    EXHIBIT F

                            FIRST SECURITY BANK, N.A.

                              OFFICER'S CERTIFICATE
           (Pursuant to Section 6.2(d) of the Participation Agreement)


<PAGE>   74



                                    EXHIBIT G
                            FIRST SECURITY BANK, N.A.

                       CERTIFICATE OF ASSISTANT SECRETARY
           (Pursuant to Section 6.2(e) of the Participation Agreement)

<PAGE>   75



                                    EXHIBIT H

                                     FORM OF
                               OPINION OF COUNSEL
                          TO FIRST SECURITY BANK, N.A.




<PAGE>   76



                                    EXHIBIT I
                     DESCRIPTION OF LAND FOR TEMPLE PROPERTY