Document:

Exhibit 4 (vii)

                            364-DAY CREDIT AGREEMENT

                         dated as of September 19, 2001

                                      among

                               TOYS "R" US, INC.,

                            THE LENDERS PARTY HERETO

                                       and

                              THE BANK OF NEW YORK,
                             as Administrative Agent

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

                                 CITIBANK, N.A.,
                                       and
                               J.P. MORGAN CHASE,
                            as Co-Syndication Agents

                           CREDIT SUISSE FIRST BOSTON,
                           FIRST UNION NATIONAL BANK,
                       THE DAI-ICHI KANGYO BANK, LTD. and
                                SOCIETE GENERALE,
                           as Co-Documentation Agents

                           BNY CAPITAL MARKETS, INC.,
                        as Lead Arranger and Book Manager

<PAGE>

                                TABLE OF CONTENTS

ARTICLE 1. DEFINITIONS.........................................................1
      Section 1.1. Defined Terms...............................................1
      Section 1.2. Classification of Loans and Borrowings.....................13
      Section 1.3. Terms Generally............................................13
      Section 1.4. Accounting Terms; GAAP.....................................13

ARTICLE 2. The Credits........................................................14
      Section 2.1. Commitments................................................14
      Section 2.2. Loans and Borrowings.......................................14
      Section 2.3. Requests for Borrowings....................................15
      Section 2.4. Termination, Reduction and Extension of Commitments........15
      Section 2.5. Funding of Borrowings......................................16
      Section 2.6. Interest Elections.........................................17
      Section 2.7. Repayment of Loans; Evidence of Debt.......................18
      Section 2.8. Prepayment of Loans........................................19
      Section 2.9. Fees.......................................................20
      Section 2.10. Interest..................................................20
      Section 2.11. Alternate Rate of Interest................................21
      Section 2.12. Increased Costs, Illegality, Etc..........................22
      Section 2.13. Break Funding Payments....................................24
      Section 2.14. Taxes.....................................................25
      Section 2.15. Payments Generally; Pro Rata Treatment; Sharing
                      of Set-offs.............................................27
      Section 2.16. Mitigation Obligations; Replacement of Lenders............28
      Section 2.17. Increases in Commitments..................................30

ARTICLE 3. Representations and Warranties.....................................31
      Section 3.1. Organization and Powers....................................31
      Section 3.2. Authorization..............................................31
      Section 3.3. Enforceability.............................................31
      Section 3.4. Litigation.................................................31
      Section 3.5. Required Consents..........................................32
      Section 3.6. Compliance with Applicable Laws............................32
      Section 3.7. Taxes......................................................32
      Section 3.8. Governmental Regulations...................................32
      Section 3.9. Federal Reserve Regulations; Use of Loan Proceeds..........33
      Section 3.10. Financial Statements......................................33
      Section 3.11. Material Adverse Change...................................33
      Section 3.12. No Conflicting Agreements.................................33
      Section 3.13. Disclosure................................................33

<PAGE>

ARTICLE 4. Conditions Precedent...............................................34
      Section 4.1. Effective Date.............................................34
      Section 4.2. Each Credit Event..........................................35

ARTICLE 5. Affirmative Covenants..............................................35
      Section 5.1. Financial Statements.......................................35
      Section 5.2. Certificates; Other Information............................36
      Section 5.3. Legal Existence............................................36
      Section 5.4. Taxes......................................................37
      Section 5.5. Observance of Legal Requirements...........................37
      Section 5.6. Inspection of Property; Books and Records; Discussions.....37

ARTICLE 6. Negative Covenants.................................................37
      Section 6.1. Merger or Consolidation, Etc...............................37
      Section 6.2. Subsidiary Indebtedness....................................38
      Section 6.3. Liens, Etc.................................................39
      Section 6.4. Change in Nature of Business...............................40
      Section 6.5. Use of Proceeds............................................40
      Section 6.6. Fixed Charge Coverage Ratio................................40
      Section 6.7. Capitalization.............................................40

ARTICLE 7. Events of Default..................................................41

ARTICLE 8. The Administrative Agent...........................................43

ARTICLE 9. Miscellaneous......................................................46
      Section 9.1. Notices....................................................46
      Section 9.2. Waivers; Amendments........................................46
      Section 9.3. Expenses; Indemnity; Damage Waiver.........................47
      Section 9.4. Successors and Assigns.....................................48
      Section 9.5. Survival...................................................51
      Section 9.6. Counterparts; Integration; Effectiveness...................51
      Section 9.7. Severability...............................................51
      Section 9.8. Right of Setoff............................................52
      Section 9.9. Governing Law; Jurisdiction; Consent to Service
                     of Process...............................................52
      Section 9.10. WAIVER OF JURY TRIAL......................................53
      Section 9.11. Headings..................................................53
      Section 9.12. Confidentiality...........................................53
      Section 9.13. Interest Rate Limitation..................................54

                                      -2-
<PAGE>

      SCHEDULES:

      Schedule 2.1 -- Commitments
      Schedule 3.4 -- Disclosed Matters
      Schedule 6.2 -- Existing Subsidiary Indebtedness
      Schedule 6.3 -- Existing Liens

      EXHIBITS:

      Exhibit A   -- Form of Assignment and Acceptance
      Exhibit B-1 -- Form of Opinion of Borrower's Counsel
      Exhibit B-2 -- Form of Opinion of Weil, Gotshal & Manges LLP
      Exhibit C   -- Form of Guarantee Agreement
      Exhibit D   -- Form of Accession Agreement
      Exhibit E   -- Form of Borrowing Request
      Exhibit F   -- Form of Interest Election Request

                                      -3-
<PAGE>

            364-DAY CREDIT AGREEMENT, dated as of September 19, 2001, among TOYS
"R" US, INC., the LENDERS party hereto, CITIBANK, N.A. and J.P. MORGAN CHASE, as
Co-Syndication  Agents,  CREDIT SUISSE FIRST BOSTON,  FIRST UNION NATIONAL BANK,
THE DAI-ICHI KANGYO BANK, LTD. and SOCIETE GENERALE, as Co-Documentation Agents,
and THE BANK OF NEW YORK, as Administrative Agent.

            The parties hereto agree as follows:

ARTICLE 1. DEFINITIONS

      Section 1.1. Defined Terms. As used in this Agreement, the following terms
have the meanings specified below:

            "ABR" when used in  reference  to any Loan or  Borrowing,  refers to
whether such Loan, or the Loans comprising such Borrowing,  are bearing interest
at a rate determined by reference to the Alternate Base Rate.

            "Accession  Agreement" means the accession agreement,  substantially
in the form of Exhibit D, to be entered into by the  Administrative  Agent and a
Prospective Lender.

            "Accountants" means Ernst & Young LLP (or any successor thereto), or
any other firm of certified public  accountants of recognized  national standing
selected by the Borrower.

            "Accumulated  Funding  Deficiency" has the meaning  assigned to such
term in Section 302 of ERISA.

            "Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing
for any  Interest  Period,  an  interest  rate per annum  (rounded  upwards,  if
necessary,  to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.

            "Administrative  Agent" means BNY, in its capacity as administrative
agent for the Lenders hereunder, and any assigns.

            "Administrative Questionnaire" means an Administrative Questionnaire
in a form supplied by the Administrative Agent.

            "Affiliate"  means,  with  respect to a  specified  Person,  another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.

            "Agreement" means this 364-Day Credit Agreement.

            "Alternate Base Rate" means,  for any day, a rate per annum equal to
the  greater  of (a) the Prime  Rate in  effect on such day and (b) the  Federal
Funds  Effective  Rate in effect on

<PAGE>

such day plus 1/2 of 1%. Any change in the  Alternate  Base Rate due to a change
in the Prime Rate or the Federal Funds  Effective  Rate shall be effective  from
and including the effective date of such change in the Prime Rate or the Federal
Funds Effective Rate, respectively.

            "Applicable  Lending  Office" means,  as to any Lender,  the office,
branch or affiliate of such Lender  designated as such Lender's  lending  office
for Loans hereunder,  as reported by such Lender to the Administrative Agent and
the Borrower.

            "Applicable  Percentage"  means,  with  respect to any  Lender,  the
percentage of the total Commitments represented by such Lender's Commitment.  If
the Commitments  have  terminated or expired,  the Applicable  Percentages  with
respect to any  Lender  shall be  determined  based  upon the  Commitments  most
recently in effect, giving effect to any assignments.

            "Applicable Rate" means, for any day, with respect to any Eurodollar
Loan,  or  with  respect  to the  facility  fees  or  utilization  fees  payable
hereunder,  as the case may be, the  applicable  rate per annum set forth  below
under the caption  "Facility Fee",  "LIBOR Spread" or "Utilization  Fee", as the
case may be, based upon the ratings by Moody's and S&P, respectively, applicable
on such date to the Index Debt:

<TABLE>
<CAPTION>
===========================================================================================
Category            Ratings                 Facility Fee    LIBOR Spread    Utilization Fee
                    (S&P/Moody's)
-------------------------------------------------------------------------------------------
<S>                 <C>                     <C>             <C>             <C>
Category 1          A+/A1 or higher         .065%           .285%           .100%
-------------------------------------------------------------------------------------------
Category 2          A/A2                    .075%           .325%           .100%
-------------------------------------------------------------------------------------------
Category 3          A-/A3                   .100%           .400%           .125%
-------------------------------------------------------------------------------------------
Category 4          BBB+/Baa1               .125%           .500%           .125%
-------------------------------------------------------------------------------------------
Category 5          BBB/Baa2                .150%           .600%           .150%
-------------------------------------------------------------------------------------------
Category 6          BBB-/Baa3 or lower      .200%           .925%           .150%
===========================================================================================
</TABLE>

            For purposes of the foregoing, (a) if Moody's and S&P shall not have
in effect a rating for the Index Debt (other than by reason of the circumstances
referred  to in the last  sentence  of this  definition),  then each such rating
agency  shall be deemed to have  established  a rating in Category 6; (b) if the
ratings  established  or deemed to have been  established by Moody's and S&P for
the Index Debt shall fall within different Categories, the Applicable Rate shall
be based on the higher of the two  ratings,  unless the lower of the two ratings
is in Category 6, in which case the Applicable Rate shall be based on such lower
rating,  and, in each case under this clause (b),  unless one of the two ratings
is two or more  Categories  lower than the other,  in which case the  Applicable
Rate shall be  determined  by  reference  to the  Category  one level  below the
category  corresponding to the higher rating; and (c) if the ratings established
or deemed to have been  established  by Moody's and S&P for the Index Debt shall
be changed  (other than as a result of a change in the rating  system of Moody's
or S&P),  such  change  shall be  effective  as of the date on which it is first
announced by the applicable  rating agency.  Each change in the Applicable  Rate
shall apply during the period  commencing on the  effective  date of such change
and ending on the date immediately preceding the effective date of the next such
change.  If the rating system of Moody's or S&P shall change,  or if either such
rating  agency  shall  cease to be in

                                      -2-
<PAGE>

the business of rating corporate debt obligations,  the Borrower and the Lenders
shall  negotiate in good faith to amend this  definition to reflect such changed
rating  system or the  unavailability  of ratings  from such rating  agency and,
pending the  effectiveness  of any such amendment,  the Applicable Rate shall be
determined  by  reference  to the rating most  recently in effect  prior to such
change or cessation.

            "Assignment  and  Acceptance"  means an  assignment  and  acceptance
entered  into by a Lender and an  assignee  (with the consent of any party whose
consent is required by Section 9.4), and accepted by the  Administrative  Agent,
substantially  in the  form of  Exhibit  A or any  other  form  approved  by the
Administrative Agent.

            "Availability  Period"  means  the  period  from and  including  the
Effective Date to but excluding the earlier of the Maturity Date and the date of
termination of the Commitments.

            "BNY" means The Bank of New York and its successors.

            "Board" means the Board of Governors of the Federal  Reserve  System
of the United States of America.

            "Borrower" means Toys "R" Us, Inc., a Delaware corporation.

            "Borrowing"  means  Loans  of  the  same  Type  made,  converted  or
continued on the same date and, in the case of Eurodollar  Loans,  as to which a
single Interest Period is in effect.

            "Borrowing  Request" means a request by the Borrower for a Borrowing
in  substantially  the form of  Exhibit  E or any  other  form  approved  by the
Administrative Agent.

            "Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to remain closed; provided that, when used in connection with a Eurodollar Loan,
the term  "Business  Day" shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.

            "Capital Lease  Obligations"  of any Person means the obligations of
such  Person  to pay  rent  or  other  amounts  under  any  lease  of (or  other
arrangement  conveying  the  right  to use)  real  or  personal  property,  or a
combination  thereof,  which  obligations  are  required  to be  classified  and
accounted  for as capital  leases on a balance  sheet of such Person under GAAP,
and the  amount of such  obligations  shall be the  capitalized  amount  thereof
determined in accordance with GAAP.

            "Code" means the Internal Revenue Code of 1986, as amended from time
to time.

            "Commitment"  means, with respect to each Lender,  the commitment of
such  Lender to make Loans  hereunder  in an  aggregate  outstanding  amount not
exceeding  the  amount of such  Lender's  Revolving  Commitment  as set forth on
Schedule  2.1,  or in the  Assignment  and  Acceptance  or  Accession  Agreement
pursuant to which such Lender shall have assumed its Commitment,  as applicable,
as such commitment may be (a) reduced from time to time pursuant

                                      -3-
<PAGE>

to Section 2.4, (b) increased  from time to time pursuant to Section 2.17 or (c)
reduced or increased  from time to time  pursuant to  assignments  by or to such
Lender  pursuant to Section  9.4. The initial  aggregate  amount of the Lenders'
Commitments is $316,666,666.67.

            "Consolidated"  refers  to the  Borrower  and the  Subsidiaries  the
accounts of which are  consolidated  with those of the  Borrower  for  financial
reporting purposes.

            "Consolidated Cash Interest Expense" means, for any period, interest
expense  (net  of  interest   income)  of  the  Borrower  and  the  Consolidated
Subsidiaries  for such  period,  including,  without  duplication,  Consolidated
interest  capitalized  in such period,  minus non-cash  interest  expense of the
Borrower  and the  Consolidated  Subsidiaries  for  such  period,  in each  case
determined in accordance with GAAP.

            "Consolidated  EBITDAR"  means,  for any period,  net income (or net
loss) of the Borrower and the Consolidated Subsidiaries for such period plus (a)
the sum of (i)  interest  expense  (net of  interest  income),  (ii)  income tax
expense, (iii) depreciation expense, (iv) amortization expense, (v) Consolidated
Rent Expense,  (vi) extraordinary  losses in excess of $5,000,000 and (vii) LIFO
charges of the Borrower and the Consolidated Subsidiaries, in each case for such
period, minus (b) the sum of (i) extraordinary gains in excess of $5,000,000 and
(ii) LIFO  credits of the Borrower and the  Consolidated  Subsidiaries,  in each
case for such period, all determined in accordance with GAAP.

            "Consolidated  Rent Expense" means,  for any period,  rental expense
(net  of  rental  income)  of the  Borrower  and the  Consolidated  Subsidiaries
determined in accordance with GAAP for such period.

            "Consolidated   Tangible   Net   Worth"   means,   at  any  date  of
determination,   the  sum  of  all  amounts   which  would  be  included   under
shareholders'  equity on a  Consolidated  balance  sheet of the Borrower and the
Subsidiaries  determined in accordance with GAAP as at such date less all assets
of the Borrower and the Subsidiaries, determined on a Consolidated basis at such
date, that would be classified as intangible assets in accordance with GAAP.

            "Control" means the possession, directly or indirectly, of the power
to direct or cause the  direction  of the  management  or  policies of a Person,
whether  through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.

            "Credit Parties" means the Administrative Agent and the Lenders.

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

            "dollars"  or "$"  refers to lawful  money of the  United  States of
America.

            "Effective Date" means the date on which the conditions specified in
Section 4.1 are satisfied (or waived in accordance with Section 9.2).

                                      -4-
<PAGE>

            "Employee  Benefit  Plan" means an employee  benefit plan within the
meaning of Section 3(3) of ERISA maintained,  sponsored or contributed to by the
Borrower, any of the Subsidiaries or any ERISA Affiliate.

            "Environmental  Laws" means all applicable federal,  state, local or
foreign  statutes,  laws,  ordinances,   rules,   regulations,   codes,  orders,
judgments, decrees or judicial or agency interpretations,  policies or guidances
relating to  pollution  or  protection  of the  environment,  health,  safety or
natural resources.

            "Environmental   Liability"  means  any  liability,   contingent  or
otherwise   (including  any  liability  for  damages,   costs  of  environmental
remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary
directly  or  indirectly  resulting  from or  based  upon (a)  violation  of any
Environmental Law, (b) the generation, use, handling,  transportation,  storage,
treatment or disposal of any Hazardous Materials,  (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous Materials into
the environment or (e) any contract,  agreement or other consensual  arrangement
pursuant to which  liability  is assumed or imposed  with  respect to any of the
foregoing.

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

            "ERISA  Affiliate"  when used with  respect to an  Employee  Benefit
Plan,  ERISA, the PBGC or a provision of the Code pertaining to employee benefit
plans,  means any Person that is a member of any group of  organizations  within
the meaning of Section 414(b), (c), (m) or (o) of the Code of which the Borrower
or any of the Subsidiaries is a member.

            "Eurodollar" when used in reference to any Loan or Borrowing, refers
to whether  such Loan,  or the Loans  comprising  such  Borrowing,  are  bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.

            "Event of Default" has the meaning  assigned to such term in Article
7.

            "Existing  Credit  Documents"  means (i) the  Amended  and  Restated
Credit  Agreement,  dated as of December 19, 1997, among the Borrower,  Toys "R"
Us-Delaware,  Inc., the subsidiary  borrowers  party thereto,  the lenders party
thereto and BNY, as  administrative  agent  thereunder,  (ii) the 364-Day Credit
Agreement,  dated as of December 8, 2000, among the Borrower,  the lenders party
thereto and The Chase Manhattan Bank, as administrative  agent  thereunder,  and
(iii) each  agreement,  instrument and other  document  executed or delivered in
connection with either of the foregoing.

            "Existing  Maturity  Date" has the meaning  assigned to such term in
Section 2.4(c).

            "Federal  Funds  Effective  Rate"  means,  for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds  transactions with members of the Federal Reserve System
arranged by Federal funds brokers,  as published on the next succeeding Business
Day by the  Federal  Reserve  Bank  of New  York,  or,  if

                                      -5-
<PAGE>

such rate is not so  published  for any day that is a Business  Day, the average
(rounded upwards,  if necessary,  to the next 1/100 of 1%) of the quotations for
such day for such transactions  received by the Administrative  Agent from three
Federal funds brokers of recognized standing selected by it.

            "Financial  Officer" means the chief  financial  officer,  principal
accounting officer, treasurer or controller of the Borrower.

            "Financial  Statements"  has the  meaning  assigned  to such term in
Section 5.1.

            "Five-Year  Credit  Agreement" means the Five-Year Credit Agreement,
dated as of September 19, 2001,  among the  Borrower,  the lenders party thereto
and BNY, as administrative agent thereunder.

            "Fixed Charge Coverage Ratio" means, on each date of  determination,
the ratio of  Consolidated  EBITDAR  to the sum of  Consolidated  Cash  Interest
Expense  and  Consolidated  Rent  Expense,  in each case for the  period of four
consecutive  fiscal  quarters of the Borrower ended on or  immediately  prior to
such date.

            "Foreign  Lender" means any Lender that is organized  under the laws
of a jurisdiction other than that in which the Borrower is located. For purposes
of this  definition,  the United  States of America,  each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.

            "GAAP" means generally accepted accounting principles in effect from
time to time in the United States of America.

            "Governmental  Authority"  means the government of the United States
of America, any other nation or any political subdivision thereof, whether state
or local, and any agency,  authority,  instrumentality,  regulatory body, court,
central  bank or  other  entity  exercising  executive,  legislative,  judicial,
taxing,  regulatory  or  administrative  powers or functions of or pertaining to
government.

            "Guarantee"  of  or  by  any  Person  (the  "guarantor")  means  any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of  guaranteeing  any  Indebtedness  or other  obligation of any
other  Person  (the  "primary  obligor")  in any  manner,  whether  directly  or
indirectly,  and including any obligation of the guarantor,  direct or indirect,
(a) to purchase or pay (or advance or supply  funds for the  purchase or payment
of) such  Indebtedness  or other  obligation  or to  purchase  (or to advance or
supply funds for the purchase of) any security for the payment  thereof,  (b) to
purchase or lease  property,  securities or services for the purpose of assuring
the owner of such  Indebtedness or other obligation of the payment thereof,  (c)
to maintain  working  capital,  equity capital or any other financial  statement
condition  or  liquidity  of the  primary  obligor so as to enable  the  primary
obligor to pay such  Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty  issued to support such
Indebtedness or obligation;  provided, that the term Guarantee shall not include
endorsements  for collection or deposit in the ordinary course of

                                      -6-
<PAGE>

business; and provided,  further, that the amount of any such Guarantee shall be
deemed  to be the  lower of (i) an amount  equal to the  stated or  determinable
amount of the primary  obligation in respect of which such Guarantee is made and
(ii) the  maximum  amount for which such  Person may be liable  pursuant  to the
terms of the agreement embodying such Guarantee,  unless such primary obligation
and the  maximum  amount for which  such  Person may be liable are not stated or
determinable,  in which case the amount of such Guarantee shall be such Person's
maximum  reasonably  anticipated  liability in respect  thereof as determined by
such Person in good faith.

            "Guarantee  Agreement" means the guarantee agreement,  substantially
in the form of Exhibit C, to be entered into by the Administrative Agent and the
Guarantors.

            "Guarantor"  means (a) Toys "R" Us-Delaware,  Inc. and (b) any other
direct or  indirect  subsidiary  of the  Borrower  that  shall be a party to the
Guarantee Agreement from time to time.

            "Hazardous  Materials"  means all  materials,  substances  or wastes
regulated,  characterized or otherwise classified under any Environmental Law as
hazardous,  toxic,  pollutants,   contaminants  or  words  of  similar  meaning,
including  petroleum or petroleum  distillates,  asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes.

            "Indebtedness"  of any Person means, at a particular time, all items
which constitute,  without  duplication,  (a) indebtedness for borrowed money or
the deferred  purchase price of Property  (other than trade payables and accrued
liabilities  incurred in the  ordinary  course of  business),  (b)  indebtedness
evidenced by notes, bonds,  debentures or similar  instruments,  (c) obligations
with  respect  to  any  conditional  sale  or  title  retention  agreement,  (d)
indebtedness arising under acceptance  facilities and the amount available to be
drawn under all letters of credit issued for the account of such Person, (e) all
drafts  drawn under  letters of credit  issued for the account of such Person to
the extent such Person  shall not have  reimbursed  the issuer in respect of the
issuer's payment of such drafts, (f) all liabilities  secured by any Lien on any
Property  owned by such  Person  even  though  such  Person  has not  assumed or
otherwise   become  liable  for  the  payment  thereof  (other  than  carriers',
warehousemen's,  mechanics',  repairmen's,  landlords'  or other like  statutory
Liens arising in the ordinary course of business), (g) obligations under capital
leases  and (h)  Guarantees  in  respect  of the  foregoing;  provided  that any
Indebtedness  owing  by  the  Borrower  to any  of  the  Subsidiaries  or by any
Subsidiary to the Borrower or by any  Subsidiary to any other  Subsidiary or any
Guarantees in respect thereof shall not constitute  Indebtedness for purposes of
this Agreement.

            "Indemnified  Tax" has the meaning  assigned to such term in Section
2.14(a).

            "Indemnitee"  has  the  meaning  assigned  to such  term in  Section
9.3(b).

            "Index Debt" means senior,  unsecured,  long-term  indebtedness  for
borrowed  money of the Borrower that is not guaranteed by any Person (other than
a Guarantor) or subject to any other credit enhancement.

                                      -7-
<PAGE>

            "Interest  Election  Request"  means a request  by the  Borrower  to
convert or continue a Borrowing, substantially in the form of Exhibit F.

            "Interest  Payment Date" means (a) with respect to any ABR Loan, the
last day of each March,  June,  September and December,  (b) with respect to any
Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing
of which such Loan is a part and, in the case of a Eurodollar  Borrowing with an
Interest Period of more than three months' duration,  each day prior to the last
day of such Interest  Period that occurs at intervals of three months'  duration
after  the  first  day of such  Interest  Period  and (c) as to all  Loans,  the
Maturity Date.

            "Interest Period" means,  with respect to any Eurodollar  Borrowing,
the  period  commencing  on  the  date  of  such  Borrowing  and  ending  on the
numerically corresponding day in the calendar month that is one, two, three, six
or, if available to all of the Lenders, nine or twelve months thereafter, as the
Borrower may elect;  provided that (a) if any Interest Period would end on a day
other than a Business Day,  such  Interest  Period shall be extended to the next
succeeding  Business Day, unless such next succeeding Business Day would fall in
the next calendar  month,  in which case such  Interest  Period shall end on the
next preceding  Business Day, and (b) any Interest  Period that commences on the
last  Business  Day of a  calendar  month  (or on a day for  which  there  is no
numerically  corresponding  day in the  last  calendar  month  of such  Interest
Period) shall end on the last  Business Day of the last  calendar  month of such
Interest Period. For purposes hereof, the date of a Borrowing initially shall be
the date on which such Borrowing is made and  thereafter  shall be the effective
date of the most recent conversion or continuation of such Borrowing.

            "Lenders"  means the Persons  listed on  Schedule  2.1 and any other
Person  that shall have become a party  hereto from time to time  pursuant to an
Assignment  and  Acceptance or Accession  Agreement,  other than any such Person
that shall have ceased to be a party  hereto  pursuant to any  provision of this
Agreement, including by way of an Assignment and Acceptance.

            "LIBO Rate" means, with respect to any Eurodollar  Borrowing for any
Interest Period,  the rate appearing on Page 3750 of the Telerate Service (or on
any  successor  or  substitute  page of such  Service,  or any  successor  to or
substitute  for such  Service,  providing  rate  quotations  comparable to those
currently  provided  on  such  page  of  such  Service,  as  determined  by  the
Administrative  Agent from time to time for purposes of providing  quotations of
interest rates applicable to dollar deposits in the London interbank  market) at
approximately   11:00  a.m.,  London  time,  two  Business  Days  prior  to  the
commencement  of such Interest  Period,  as the rate for dollar  deposits with a
maturity  comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
Eurodollar  Borrowing for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered  by  the  principal  London  office  of  the  Administrative   Agent  in
immediately  available  funds in the London  interbank  market at  approximately
11:00 a.m.,  London time,  two Business Days prior to the  commencement  of such
Interest Period.

                                      -8-
<PAGE>

            "Lien" means,  with respect to any Property,  any mortgage,  deed of
trust, lien, pledge, hypothecation,  encumbrance having the effect of a security
interest, sale-leaseback arrangement or other charge or security interest in, on
or of such asset.

            "Loan Documents" means this Agreement and the Guarantee Agreement.

            "Loans"  means the  revolving  loans  referred to in Section 2.1 and
made by the Lenders to the Borrower pursuant to Section 2.3.

            "Material Adverse Change" means a material adverse change in (i) the
financial condition,  business or Property of the Borrower and the Subsidiaries,
taken as a whole,  or (ii) the ability of the  Borrower  and the  Guarantors  to
perform their respective obligations under the Loan Documents.

            "Material Adverse Effect" means a material adverse effect on (a) the
financial condition,  business or Property of the Borrower and the Subsidiaries,
taken as a whole,  or (b) the  ability of the  Borrower  and the  Guarantors  to
perform their respective obligations under the Loan Documents.

            "Material  Subsidiary  Group"  means  any  Subsidiary  or  group  of
Subsidiaries as to which, individually or in the aggregate, any of the following
tests are met: (a) the Borrower's and the other Subsidiaries' investments in and
advances to such  Subsidiary  or group of  Subsidiaries  exceed 10% of the total
assets of the Borrower and the  Subsidiaries  on a Consolidated  basis as of the
last day of the most recently  completed  fiscal year of the Borrower;  (b) such
Subsidiary's or group of Subsidiaries'  proportionate  share of the total assets
(after  intercompany  eliminations)  of the Borrower and the  Subsidiaries  on a
Consolidated  basis  exceeds  10% of the total  assets of the  Borrower  and the
Subsidiaries  on a  Consolidated  basis as of the last day of the most  recently
completed  fiscal  year of the  Borrower;  or (c) the equity in the income  from
continuing   operations  before  income  taxes,   extraordinary  items  and  the
cumulative  effect of a change in accounting  principles  of such  Subsidiary or
group  of  Subsidiaries  exceeds  10% of such  income  of the  Borrower  and the
Subsidiaries  on a  Consolidated  basis (after giving effect to the exclusion of
minority interests) for the most recently completed fiscal year of the Borrower.
In the event any new Subsidiary  shall be acquired or formed,  the status of any
one or more Subsidiaries as a Material Subsidiary Group shall be determined on a
pro forma basis, giving effect to such acquisition or formation,  as applicable,
as if it had occurred at the  beginning of the most  recently  completed  fiscal
year of the Borrower.

            "Maturity  Date" means the day which is 364 days after the Effective
Date, as the same may be extended  from time to time in accordance  with Section
2.4(c).

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

            "Multiemployer  Plan"  means  a  multiemployer  plan as  defined  in
Section 4001(a)(3) of ERISA.

            "Non-Extending  Lender"  has the  meaning  assigned  to such term in
Section 2.4(c).

                                      -9-
<PAGE>

            "Participant"  has the  meaning  assigned  to such  term in  Section
9.4(e).

            "PBGC" means the Pension Benefit  Guaranty  Corporation  established
pursuant  to  Subtitle  A of Title IV of ERISA,  or any  Governmental  Authority
succeeding to the functions thereof.

            "Pension  Plan"  means at any date of  determination,  any  Employee
Benefit Plan (including a Multiemployer Plan), the funding requirements of which
(under  Section  302 of ERISA or Section  412 of the Code)  are,  or at any time
within the six years immediately  preceding such date, were in whole or in part,
the  responsibility  of  the  Borrower,  any of the  Subsidiaries  or any  ERISA
Affiliate.

            "Permitted Encumbrances" means:

            (a) Liens imposed by law for Taxes that are not overdue by more than
90 days or are being contested in compliance with Section 5.4;

            (b)   carriers',    warehousemen's,    mechanics',    materialmen's,
repairmen's and other like Liens imposed by law,  arising in the ordinary course
of business and securing  obligations  that are not overdue by more than 90 days
or are being contested in good faith by appropriate proceedings;

            (c) pledges and deposits made in the ordinary  course of business in
compliance with workers'  compensation,  unemployment insurance and other social
security laws or regulations or to secure public or statutory obligations;

            (d) Liens  securing  the  performance  of, or payment in respect of,
bids, trade contracts,  leases, statutory obligations,  surety and appeal bonds,
performance  bonds and other  obligations of a like nature,  in each case in the
ordinary course of business;

            (e) judgment Liens in respect of judgments that do not constitute an
Event of Default under clause (i) of Article 7;

            (f) any  interest  or title of a lessor or  sublessor  (other than a
lessor or sublessor  under a lease or sublease that  constitutes a Capital Lease
Obligation or that is entered into as part of a sale-leaseback  arrangement) and
any  restriction or encumbrance to which the interest or title of such lessor or
sublessor may be subject that is incurred in the ordinary course of business;

            (g) Liens in favor of customs and revenue  authorities  arising as a
matter of law or  pursuant  to a bond to secure  payment  of  customs  duties in
connection with the importation of goods;

            (h)  customary  rights of setoff  upon  deposits of cash in favor of
banks or other  depository  institutions in which such cash is maintained in the
ordinary course of business;

                                      -10-
<PAGE>

            (i)  Liens  on  goods  (or  related  documents  of  title)  securing
reimbursement  obligations  under trade letters of credit issued for the account
of the  Borrower  or the  Subsidiaries  in the  ordinary  course of  business in
connection with the purchase of such goods; and

            (j) easements, operating agreements,  covenants,  conditions, rights
of way, survey exceptions,  licenses, zoning restrictions and other encumbrances
on title to, or restrictions on the use of, real property that do not materially
and adversely  affect the value of such property or the use of such property for
its present purposes;

provided  that,  except as provided in clauses (d), (h) and (i) above,  the term
"Permitted Encumbrances" shall not include any Lien securing Indebtedness.

            "Person" means an individual, partnership,  corporation (including a
business trust), joint stock company, trust, unincorporated  association,  joint
venture,  limited  liability  company or other  entity,  or a government  or any
political subdivision or agency thereof.

            "Prime Rate" means the rate of interest per annum publicly announced
from time to time by BNY as its prime  commercial  lending rate at its principal
office in New York City;  each change in the Prime Rate being effective from and
including  the date such change is publicly  announced as being  effective.  The
Prime Rate is not  intended to be the lowest rate of interest  charged by BNY in
connection with extensions of credit to borrowers.

            "Prohibited  Transaction"  means a  transaction  that is  prohibited
under  Section  4975 of the Code or Section  406 of ERISA and not  exempt  under
Section 4975 of the Code or Section 408 of ERISA.

            "Property" means all types of real, personal,  tangible,  intangible
or mixed property.

            "Prospective Lender" has the meaning set forth in Section 2.17.

            "Register" has the meaning set forth in Section 9.4(c).

            "Related Parties" means, with respect to any specified Person,  such
Person's Affiliates and the respective directors,  officers,  employees,  agents
and advisors of such Person and such Person's Affiliates.

            "Required  Lenders"  means,  at any time,  Lenders having  Revolving
Exposures and unused  Commitments  representing  more than 50% of the sum of the
total Revolving Exposures and unused Commitments at such time.

            "Revolving  Exposure" means, with respect to any Lender at any time,
the sum of the aggregate  outstanding principal amount of such Lender's Loans at
such time.

            "S&P" means  Standard & Poor's  Ratings  Service,  a division of the
McGraw-Hill Companies, Inc.

                                      -11-
<PAGE>

            "SEC" means United States Securities and Exchange Commission.

            "Statutory Reserve Rate" means a fraction  (expressed as a decimal),
the  numerator  of which is the number one and the  denominator  of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal,  special,  emergency or supplemental  reserves) expressed as a decimal
established  by the  Board to which  the  Administrative  Agent is  subject  for
eurocurrency  funding  (currently  referred to as "eurocurrency  liabilities" in
Regulation D of the Board) during any Interest Period.  Such reserve percentages
shall include  those imposed  pursuant to such  Regulation D.  Eurodollar  Loans
shall be deemed to  constitute  eurocurrency  funding  and to be subject to such
reserve requirements  without benefit of or credit for proration,  exemptions or
offsets  that  may be  available  from  time to time to any  Lender  under  such
Regulation D or any comparable  regulation.  The Statutory Reserve Rate shall be
adjusted  automatically  on and as of the  effective  date of any  change in any
reserve  percentage.

            "subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation,  limited liability company,  partnership,  association or
other  entity of which more than 50% of the Voting Stock is or, in the case of a
partnership,  more than 50% of the general partnership interests are, as of such
date, owned, Controlled or held by the parent or one or more subsidiaries of the
parent or by the parent and one or more subsidiaries of the parent.

            "Subsidiary" means any subsidiary of the Borrower.

            "Successor  Person" shall have the meaning  assigned to such term in
Section 6.1.

            "Tax on the  Income" as to any  Person,  means a Tax  imposed by the
jurisdiction  in which such  Person's  principal  office (and,  in the case of a
Lender,  its Applicable  Lending Office for Loans) is located,  or in which such
Person is deemed to be doing business, or by any political subdivision or taxing
authority thereof based on or measured by all or part of the net income, profits
or gains of that Person or any affiliate  thereof  (whether  worldwide,  or only
insofar as such income, profits or gains are considered to arise in or to relate
to a particular jurisdiction, or otherwise).

            "Taxes" means any and all present or future taxes, levies,  imposts,
duties,  deductions,   charges  or  withholdings  imposed  by  any  Governmental
Authority.

            "Termination Event" means, with respect to any Pension Plan, (a) any
event set forth in Section 4043(b) (other than any such event as to which the 30
day  notice  requirement  is waived by the PBGC under  applicable  regulations),
4062(c)  or  4063(a)  of  ERISA  or the  regulations  thereunder,  (b) an  event
requiring  the  Borrower,  any of the  Subsidiaries  or any ERISA  Affiliate  to
provide security to a Pension Plan under Section 401(a)(29) of the Code, (c) any
failure to make any  payment  required  by Section  412(m) of the Code,  (d) the
termination  of a Pension Plan, or the filing of a notice of intent to terminate
a Pension Plan,  or the  treatment of a Pension Plan  amendment as a termination
under Section 4041(c) of ERISA,  (e) the institution of proceedings to terminate
a Pension Plan under Section 4042 of ERISA,  or (f) the appointment of a trustee
to administer any Pension Plan under Section 4042 of ERISA.

                                      -12-
<PAGE>

            "Transactions" means (a) the execution,  delivery and performance by
each of the Borrower and the  Guarantors  of each Loan Document to which it is a
party,  (b) the  borrowing  of the Loans and (c) the use of the  proceeds of the
Loans.

            "Type" when used in  reference to any Loan or  Borrowing,  refers to
whether  the rate of  interest  on such Loan,  or on the Loans  comprising  such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.

            "Voting  Stock"  means  capital  stock issued by a  corporation,  or
equivalent  interests in any other Person,  the holders of which are ordinarily,
in the absence of contingencies,  entitled to vote for the election of directors
(or persons performing  similar functions) of such Person,  even if the right so
to vote has been suspended by the happening of such a contingency.

      Section 1.2. Classification of Loans and Borrowings.  For purposes of this
Agreement, Loans and Borrowings may be classified and referred to by Type (e.g.,
a "Eurodollar Loan" or "ABR Borrowing").

      Section 1.3. Terms Generally.  The definitions of terms herein shall apply
equally to the  singular  and plural  forms of the terms  defined.  Whenever the
context may require,  any pronoun  shall  include the  corresponding  masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed  by the phrase  "without  limitation".  The word "will"
shall be  construed  to have the same  meaning  and effect as the word  "shall".
Unless the context requires  otherwise (a) any definition of or reference to any
agreement,  instrument or other  document  herein,  including any Loan Document,
shall be construed as referring to such agreement,  instrument or other document
as from time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any  reference  herein to any Person  shall be  construed  to  include  such
Person's  successors  and  assigns,   (c)  the  words  "herein",   "hereof"  and
"hereunder",  and words of similar  import,  shall be construed to refer to this
Agreement in its entirety and not to any particular  provision  hereof,  (d) all
references  herein  to  Articles,  Sections,  Exhibits  and  Schedules  shall be
construed to refer to Articles and Sections of, and Exhibits and  Schedules  to,
this  Agreement and (e) the words "asset" and  "property"  shall be construed to
have the same meaning and effect and to refer to any and all Property.

      Section  1.4.  Accounting  Terms;  GAAP.  Except  as  otherwise  expressly
provided  herein,  all  terms of an  accounting  or  financial  nature  shall be
construed  in  accordance  with GAAP,  as in effect from time to time;  provided
that,  if the  Borrower  notifies  the  Administrative  Agent that the  Borrower
requests an amendment  to any  provision  hereof to eliminate  the effect of any
change occurring after the date hereof in GAAP or in the application  thereof on
the operation of such  provision (or if the  Administrative  Agent  notifies the
Borrower that the Required  Lenders request an amendment to any provision hereof
for such  purpose),  regardless  of whether any such  notice is given  before or
after such change in GAAP or in the  application  thereof,  then such  provision
shall be interpreted  on the basis of GAAP as in effect and applied  immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.

                                      -13-
<PAGE>

ARTICLE 2. The Credits

      Section 2.1.  Commitments.  Subject to the terms and  conditions set forth
herein,  each  Lender  agrees to make  Loans to the  Borrower  from time to time
during the Availability  Period in dollars in an aggregate principal amount that
will not result in (a) such Lender's  Revolving Exposure exceeding such Lender's
Commitment or (b) the sum of the total Revolving  Exposures  exceeding the total
Commitments. Within the foregoing limits and subject to the terms and conditions
set forth herein, the Borrower may borrow, prepay and reborrow Loans.

      Section 2.2. Loans and Borrowings.  (a) Each Loan shall be made as part of
a Borrowing  consisting of Loans made by the Lenders  ratably in accordance with
their  respective  Commitments.  The  failure  of any  Lender  to make  any Loan
required to be made by it shall not relieve any other Lender of its  obligations
hereunder;  provided  that the  Commitments  of the  Lenders  are several and no
Lender  shall be  responsible  for any other  Lender's  failure to make Loans as
required.

            (b)  Subject to Section  2.11,  each  Borrowing  shall be  comprised
entirely  of ABR  Loans or  Eurodollar  Loans as the  Borrower  may  request  in
accordance  herewith.  Each Lender at its option may make any Eurodollar Loan by
causing any domestic or foreign  branch or Affiliate of such Lender to make such
Loan;  provided that any exercise of such option shall not affect the obligation
of the  Borrower  to  repay  such  Loan in  accordance  with  the  terms of this
Agreement or subject the  Borrower to any  additional  or increased  obligations
under this Agreement.

            (c) At the  commencement  of each Interest Period for any Eurodollar
Borrowing,  such Borrowing  shall be in an aggregate  amount that is an integral
multiple of  $500,000  and not less than  $1,000,000.  At the time that each ABR
Borrowing is made,  such  Borrowing  shall be in an aggregate  amount that is an
integral multiple of $500,000 and not less than $1,000,000; provided that an ABR
Borrowing  may be in an  aggregate  amount  that is equal to the  entire  unused
balance  of the  total  Commitments.  Borrowings  of more  than  one Type may be
outstanding at the same time;  provided that there shall not at any time be more
than a total of ten Eurodollar Borrowings outstanding.

            (d)  Notwithstanding  any other  provision  of this  Agreement,  the
Borrower  shall not be entitled to request,  or to elect to convert or continue,
any Borrowing if the Interest  Period  requested with respect  thereto would end
after the Maturity Date.

      Section 2.3. Requests for Borrowings. To request a Borrowing, the Borrower
shall notify the  Administrative  Agent of such request by telephone  (a) in the
case of a Eurodollar  Borrowing,  not later than 11:00 a.m., New York City time,
three Business Days before the date of the proposed Borrowing or (b) in the case
of an ABR Borrowing,  not later than 11:00 a.m., New York City time, on the date
of the  proposed  Borrowing.  Except as  provided  in  Section  2.12,  each such
telephonic  Borrowing  Request  shall be  irrevocable  and  shall  be  confirmed
promptly by hand delivery or telecopy to the  Administrative  Agent of a written
Borrowing  Request  signed by the  Borrower.  Each such  telephonic  and written
Borrowing  Request shall specify the following  information  in compliance  with
Section 2.2 and this Section:

                                      -14-
<PAGE>

                        (i) the aggregate amount of the requested Borrowing;

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

                        (iii)  whether such  Borrowing is to be an ABR Borrowing
            or a Eurodollar Borrowing;

                        (iv) in the case of a Eurodollar Borrowing,  the initial
            Interest  Period to be applicable  thereto,  which shall be a period
            contemplated by the definition of the term "Interest Period"; and

                        (v) the location and number of the Borrower's account to
            which  funds  are to be  disbursed,  which  shall  comply  with  the
            requirements of Section 2.5.

If no election as to the Type of  Borrowing  is  specified,  then the  requested
Borrowing  shall be an ABR  Borrowing.  If no Interest  Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month's duration.  Promptly following
receipt  of  a  Borrowing   Request  in  accordance   with  this  Section,   the
Administrative  Agent shall advise each Lender of the details thereof and of the
amount of such Lender's Loan to be made as part of the requested Borrowing.

      Section 2.4.  Termination,  Reduction and Extension of Commitments.(a) The
Borrower  may  at  any  time  terminate,  or  from  time  to  time  reduce,  the
Commitments;  provided that (i) each reduction of the Commitments shall be in an
amount that is an integral  multiple of $1,000,000 and not less than  $1,000,000
and (ii) the Borrower  shall not terminate or reduce the  Commitments  if, after
giving  effect to any  concurrent  prepayment  of the Loans in  accordance  with
Section  2.8,  the sum of the  aggregate  Revolving  Exposures  would exceed the
aggregate Commitments.

            (b) The  Borrower  shall  notify  the  Administrative  Agent  of any
election to  terminate or reduce the  Commitments  under  paragraph  (a) of this
Section  at  least  three  Business  Days  prior to the  effective  date of such
termination  or  reduction,  specifying  the  effective  date of such  election.
Promptly following receipt of any such notice,  the  Administrative  Agent shall
advise  the  Lenders of the  contents  thereof.  Each  notice  delivered  by the
Borrower  pursuant to this Section shall be irrevocable;  provided that a notice
of termination of the Commitments  delivered by the Borrower may state that such
notice is conditioned  upon the  effectiveness  of other credit  facilities,  in
which  case  such  notice  may be  revoked  by the  Borrower  (by  notice to the
Administrative  Agent  on or  prior  to the  specified  effective  date) if such
condition is not  satisfied.  Any  termination  or reduction of the  Commitments
shall be  permanent.  Each  reduction of the  Commitments  shall be made ratably
among the applicable Lenders in accordance with their respective Commitments.

            (c) The Borrower may, by notice to the  Administrative  Agent (which
shall  promptly  deliver a copy to each of the  Lenders)  given not less than 30
days and not more than 60 days prior to the Maturity Date at any time in effect,
request that the Lenders  extend the Maturity Date for an  additional  period of
not more than 364 days as specified in such notice. Each Lender

                                      -15-
<PAGE>

shall, by notice to the Borrower and the Administrative  Agent given not earlier
than the 30th day and not  later  than the 20th day prior to the  Maturity  Date
then in effect,  advise the Borrower  whether or not it agrees to such extension
on the terms set forth in such  notice.  Any Lender  that has not so advised the
Borrower  and the  Administrative  Agent by such day  shall  be  deemed  to have
declined to agree to such  extension.  If the Borrower  shall have requested and
Lenders representing at least 50% of the aggregate Commitments shall have agreed
to an extension of the Maturity  Date,  then the Maturity Date shall be extended
for the additional  period and on the terms specified in the Borrower's  notice.
The  decision to agree or withhold  agreement  to any  extension of the Maturity
Date hereunder shall be at the sole discretion of each Lender. The Commitment of
any Lender that has declined to agree to any requested extension of the Maturity
Date (a  "Non-Extending  Lender")  shall  terminate on the Maturity Date then in
effect prior to giving  effect to any such  extension  (the  "Existing  Maturity
Date"),  and the principal amount of any outstanding  Loans made by such Lender,
together  with any accrued  interest  thereon,  and any  accrued  fees and other
amounts  payable to or for the account of such Lender under the Loan  Documents,
shall be due and payable on the  Existing  Maturity  Date.  Notwithstanding  the
foregoing  provisions  of this  paragraph  (c), (i) the Borrower  shall have the
right,  pursuant to Section  2.16(b),  to replace a Non-Extending  Lender with a
Lender or other  financial  institution  that will agree to an  extension of the
Maturity Date and (ii) the Borrower shall have the right,  any time prior to the
Existing Maturity Date, to withdraw its request for an extension of the Maturity
Date by notice to the  Administrative  Agent  (which  shall  promptly  deliver a
notice  to each  Lender),  in which  case  the  Commitments  of all the  Lenders
(including Non-Extending Lenders) will terminate on the Existing Maturity Date.

      Section 2.5.  Funding of Borrowings.  (a) Each Lender shall make each Loan
to be made by it  hereunder on the  proposed  date  thereof by wire  transfer of
immediately available funds by 12:00 noon, New York City time, to the account of
the  Administrative  Agent most  recently  designated  by it for such purpose by
notice to the Lenders.  The Administrative  Agent will make such Loans available
to the Borrower by promptly crediting the amounts so received, in like funds, to
an  account  of the  Borrower  designated  by  the  Borrower  in the  applicable
Borrowing Request.

            (b) Unless the Administrative  Agent shall have received notice from
a Lender prior to the proposed date of any  Borrowing  that such Lender will not
make  available  to  the  Administrative  Agent  such  Lender's  share  of  such
Borrowing,  the  Administrative  Agent may assume that such Lender has made such
share  available on such date in accordance  with paragraph (a) of this Section,
and may, in reliance  upon such  assumption,  make  available  to the Borrower a
corresponding  amount. In such event, if a Lender has not in fact made its share
of the applicable  Borrowing  available to the  Administrative  Agent,  then the
applicable Lender and the Borrower  severally agree to pay to the Administrative
Agent forthwith on demand such corresponding  amount with interest thereon,  for
each day from and  including  the date  such  amount  is made  available  to the
Borrower to but excluding the date of payment to the  Administrative  Agent,  at
(i) in the case of such Lender,  the greater of the Federal Funds Effective Rate
and a rate  determined by the  Administrative  Agent in accordance  with banking
industry  rules on interbank  compensation  or (ii) in the case of the Borrower,
the interest rate applicable to such Loans at the time. If such Lender pays such
amount to the Administrative Agent prior to the

                                      -16-
<PAGE>

payment thereof by the Borrower, then such amount shall constitute such Lender's
Loan included in such Borrowing.

      Section 2.6. Interest Elections.  (a) Each Borrowing initially shall be of
the Type  specified in the  applicable  Borrowing  Request and, in the case of a
Eurodollar Borrowing, shall have an initial Interest Period as specified in such
Borrowing Request.  Thereafter, the Borrower may elect to convert such Borrowing
to a  different  Type  or to  continue  such  Borrowing  and,  in the  case of a
Eurodollar  Borrowing,  may elect Interest Periods therefor,  all as provided in
this Section. The Borrower may elect different options with respect to different
portions of the affected  Borrowing,  in which case each such  portion  shall be
allocated ratably among the Lenders holding the Loans comprising such Borrowing,
and the Loans  comprising  each such  portion  shall be  considered  a  separate
Borrowing.

            (b) To make an election pursuant to this Section, the Borrower shall
notify the Administrative Agent of such election by telephone by the time that a
Borrowing  Request  would be required  under  Section 2.3 if the  Borrower  were
requesting a Borrowing of the Type  resulting  from such  election to be made on
the effective  date of such election.  Except as provided in Section 2.12,  each
such  telephonic  Interest  Election  Request shall be irrevocable  and shall be
confirmed promptly by hand delivery or telecopy to the Administrative Agent of a
written Interest Election Request signed by the Borrower.

            (c) Each  telephonic  and written  Interest  Election  Request shall
specify  the  following  information  in  compliance  with  Section 2.2 and this
Section:

                        (i)  the  Borrowing  to  which  such  Interest  Election
            Request  applies  and, if different  options are being  elected with
            respect to different  portions  thereof,  the portions thereof to be
            allocated to each resulting Borrowing (in which case the information
            to be  specified  pursuant to clauses  (iii) and (iv) below shall be
            specified for each resulting Borrowing);

                        (ii) the effective date of the election made pursuant to
            such Interest Election Request, which shall be a Business Day;

                        (iii)  whether the  resulting  Borrowing is to be an ABR
            Borrowing or a Eurodollar Borrowing; and

                        (iv)  if  the   resulting   Borrowing  is  a  Eurodollar
            Borrowing, the Interest Period to be applicable thereto after giving
            effect to such election, which shall be a period contemplated by the
            definition of the term "Interest Period".

If any such Interest  Election Request requests a Eurodollar  Borrowing but does
not  specify  an  Interest  Period,  then the  Borrower  shall be deemed to have
selected an Interest Period of one month's duration.

            (d) Promptly following receipt of an Interest Election Request,  the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.

                                      -17-
<PAGE>

            (e) If the  Borrower  fails to  deliver a timely  Interest  Election
Request with respect to a Eurodollar  Borrowing prior to the end of the Interest
Period  applicable  thereto,  then,  unless such Borrowing is repaid as provided
herein,  at the end of such Interest Period such Borrowing shall be converted to
an ABR Borrowing.  Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is  continuing  and the  Administrative  Agent,  at the
request of the Required Lenders,  so notifies the Borrower,  then, so long as an
Event of Default is continuing, (i) no outstanding Borrowing may be converted to
or continued as a Eurodollar  Borrowing and (ii) unless repaid,  each Eurodollar
Borrowing  shall be  converted  to an ABR  Borrowing  at the end of the Interest
Period applicable thereto.

      Section 2.7. Repayment of Loans; Evidence of Debt. (a) The Borrower hereby
unconditionally  promises to pay to the Administrative  Agent for the account of
each Lender the then unpaid principal amount of each Loan on the Maturity Date.

            (b) Each Lender shall maintain in accordance with its usual practice
an account or  accounts  evidencing  the  indebtedness  of the  Borrower to such
Lender  resulting  from each Loan made by such Lender,  including the amounts of
principal  and  interest  payable  and  paid to such  Lender  from  time to time
hereunder.

            (c) The  Administrative  Agent shall  maintain  accounts in which it
shall  record (i) the amount of each Loan made  hereunder,  the Type thereof and
any Interest  Period  applicable  thereto,  (ii) the amount of any  principal or
interest  due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the  Administrative
Agent hereunder for the account of the Lenders and each Lender's share thereof.

            (d)  The  entries  made  in  the  accounts  maintained  pursuant  to
paragraph (b) or (c) of this Section  shall,  absent  manifest  error,  be prima
facie evidence of the existence and amounts of the obligations recorded therein;
provided that the failure of any Lender or the Administrative  Agent to maintain
such accounts or any error therein shall not in any manner affect the obligation
of the  Borrower  to repay  the  Loans  in  accordance  with  the  terms of this
Agreement.

            (e) Any Lender may request  that Loans made by it be  evidenced by a
promissory note. In such event, the Borrower shall prepare,  execute and deliver
to such  Lender a  promissory  note  payable to the order of such Lender (or, if
requested by such Lender,  to such Lender and its  registered  assigns) and in a
form  approved by the  Administrative  Agent and  reasonably  acceptable  to the
Borrower.  Thereafter,  the Loans evidenced by such promissory note and interest
thereon shall at all times (including after assignment  pursuant to Section 9.4)
be represented by one or more promissory notes in such form payable to the order
of the payee named therein (or, if such promissory note is a registered note, to
such payee and its registered assigns).

      Section 2.8. Prepayment of Loans. (a) The Borrower shall have the right at
any time and from  time to time to  prepay  any  Borrowing  in whole or in part,
subject to prior notice in accordance with paragraph (b) of this Section.

                                      -18-
<PAGE>

            (b) The Borrower shall notify the Administrative  Agent by telephone
(confirmed  by telecopy) of any  prepayment  of a Borrowing  hereunder not later
than  11:00  a.m.,  New York City time,  two  Business  Days  before the date of
prepayment.  Each  such  notice  shall be  irrevocable  and  shall  specify  the
prepayment date and the principal amount of each Borrowing or portion thereof to
be prepaid; provided that, if a notice of prepayment is given in connection with
a conditional  notice of  termination  of the  Commitments  as  contemplated  by
Section  2.4,  then such notice of  prepayment  may be revoked if such notice of
termination  is revoked in  accordance  with  Section  2.4.  Promptly  following
receipt of any such notice  relating to a Borrowing,  the  Administrative  Agent
shall advise the Lenders of the contents thereof. Each partial prepayment of any
Borrowing  shall  be in an  amount  that  would be  permitted  in the case of an
advance  of a  Borrowing  of the same Type as  provided  in  Section  2.2.  Each
prepayment of a Borrowing  shall be applied ratably to the Loans included in the
prepaid  Borrowing.  Prepayments  shall be accompanied  by accrued  interest and
breakage  fees  to the  extent  required  by  Section  2.10  and  Section  2.13,
respectively.

      Section 2.9.  Fees. (a) The Borrower  agrees to pay to the  Administrative
Agent for the account of each Lender a facility  fee,  which shall accrue at the
Applicable  Rate  with  respect  to  facility  fees on the  daily  amount of the
Commitment of such Lender  (whether  used or unused)  during the period from and
including  the date hereof to but  excluding  the date on which such  Commitment
terminates;  provided  that,  if such  Lender  continues  to have any  Revolving
Exposure after its Commitment terminates,  then such facility fee shall continue
to accrue  on the daily  amount of such  Lender's  Revolving  Exposure  from and
including the date on which its Commitment  terminates to but excluding the date
on which such Lender ceases to have any  Revolving  Exposure.  Accrued  facility
fees shall be payable in arrears on the last day of March,  June,  September and
December of each year,  on each date on which the  Commitments  are  permanently
reduced,  on the date on which the  Commitments  terminate and on any other date
after the Commitments  terminate on which all outstanding  Loans shall be repaid
or prepaid.  All  facility  fees shall be computed on the basis of a year of 360
days and shall be payable for the actual number of days elapsed  (including  the
first day but excluding the last day).

            (b) The Borrower agrees to pay to the  Administrative  Agent for the
account of each Lender a utilization  fee,  which shall accrue at the Applicable
Rate with respect to utilization  fees on the amount of such Lender's  Revolving
Exposure for each day during the period from and including the Effective Date to
but excluding the Maturity Date on which the sum of the total Revolving Exposure
on such day plus the total  Revolving  Exposure  (as  defined  in the  Five-Year
Credit Agreement) on such day exceeds 50% of the sum of the total Commitments on
such day  plus  the  total  Commitments  (as  defined  in the  Five-Year  Credit
Agreement) on such day. Accrued  utilization fees shall be payable in arrears on
the last day of March,  June,  September  and December of each year,  and on the
Maturity Date. All utilization  fees shall be computed on the basis of a year of
360 days and shall be payable for the actual  number of days elapsed  (including
the first day but excluding the last day).

            (c) The  Borrower  agrees to pay to each Credit  Party,  for its own
account,  fees  payable in the amounts and at the times  separately  agreed upon
between the Borrower and the Administrative Agent.

                                      -19-
<PAGE>

            (d) All fees  payable  hereunder  shall be paid on the dates due, in
immediately  available  funds.  Fees  paid  shall  not be  refundable  under any
circumstances.

      Section 2.10. Interest.  (a) The Loans comprising each ABR Borrowing shall
bear interest at the Alternate Base Rate.

            (b) The  Loans  comprising  each  Eurodollar  Borrowing  shall  bear
interest at the Adjusted  LIBO Rate for the  Interest  Period in effect for such
Borrowing plus the Applicable Rate with respect to Eurodollar Loans.

            (c) Notwithstanding  the foregoing,  if any principal of or interest
on any Loan, or any fee or other amount payable by the Borrower hereunder is not
paid when due, whether at stated maturity, upon acceleration or otherwise,  such
overdue amount shall bear interest,  after as well as before judgment, at a rate
per annum  equal to (i) in the case of  overdue  principal  of any Loan,  2% per
annum  plus  the rate  otherwise  applicable  to such  Loan as  provided  in the
preceding paragraphs of this Section or (ii) in the case of any other amount, 2%
per annum plus the rate  applicable to ABR Loans as provided in paragraph (a) of
this Section.

            (d)  Accrued  interest  on each Loan  shall be payable in arrears on
each  Interest   Payment  Date  for  such  Loan  and  upon  termination  of  the
Commitments;  provided  that (i) interest  accrued  pursuant to paragraph (c) of
this Section  shall be payable on demand,  (ii) in the event of any repayment or
prepayment  of any Loan (other than a prepayment of an ABR Loan prior to the end
of the Availability Period),  accrued interest on the principal amount repaid or
prepaid shall be payable on the date of such  repayment or prepayment  and (iii)
in the event of any  conversion of any  Eurodollar  Loan prior to the end of the
current Interest Period therefor, accrued interest on such Loan shall be payable
on the effective date of such conversion.

            (e) All interest  hereunder shall be computed on the basis of a year
of 360 days,  except that interest  computed by reference to the Alternate  Base
Rate at times when the  Alternate  Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed  (including the
first day but  excluding  the last day).  The  applicable  Alternate  Base Rate,
Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.

      Section 2.11. Alternate Rate of Interest.  If prior to the commencement of
any  Interest  Period for a Eurodollar  Borrowing  the  Administrative  Agent is
advised by the Required Lenders that the Adjusted LIBO Rate or the LIBO Rate, as
applicable,  for such Interest Period will not adequately and fairly reflect the
cost to such  Lenders (or Lender) of making or  maintaining  their Loans (or its
Loan)   included  in  such  Borrowing  for  such  Interest   Period,   then  the
Administrative  Agent shall give notice  thereof to the Borrower and the Lenders
by telephone or telecopy as promptly as  practicable  thereafter  and, until the
Administrative   Agent   notifies   the   Borrower  and  the  Lenders  that  the
circumstances  giving  rise to such  notice no longer  exist,  (a) any  Interest
Election   Request  that  requests  the  conversion  of  any  Borrowing  to,  or
continuation  of any Borrowing as, a Eurodollar  Borrowing  shall be ineffective
and (b) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing
shall be made as an ABR Borrowing;  provided

                                      -20-
<PAGE>

that,  if the  circumstances  giving rise to such notice affect only one Type of
Borrowings, then the other Type of Borrowings shall be permitted.

      Section 2.12. Increased Costs, Illegality,  Etc. (a) In the event that any
Lender with respect to clauses (ii) and (iii) below or the Administrative  Agent
with  respect to clause (i) below  shall have  determined  (which  determination
shall,  absent  manifest  error,  be final and  conclusive  and binding upon all
parties hereto):

                        (i) on the second Business Day immediately preceding the
            making  of any  requested  Eurodollar  Loan  that,  by reason of any
            changes  arising  after the date  hereof  affecting  the  applicable
            interbank  market,   adequate  and  fair  means  do  not  exist  for
            ascertaining the applicable  interest rate on the basis provided for
            in the definition of the LIBO Rate; or

                        (ii) at any time that such Lender has incurred increased
            costs or reductions in the amounts received or receivable  hereunder
            with respect to any Eurodollar  Loan, in each case by an amount such
            Lender  deems to be  material,  because of any change since the date
            hereof in any law, rule,  regulation,  order or guideline applicable
            to such  Lender or the  compliance  by such  Lender with any request
            (whether  or not having the force of law) from any  central  bank or
            other  Governmental  Authority made subsequent to the date hereof or
            in the  interpretation or  administration  thereof and including the
            introduction after the date hereof of any new law, rule, regulation,
            order,  guideline or request,  such as, for example, but not limited
            to: (A) a change in the basis of  taxation  of payment to any Lender
            of the principal of or interest on such Eurodollar Loan or any other
            amounts payable hereunder (except for changes in the rate of tax on,
            or  determined  by  reference  to,  the  Tax on the  Income  of such
            Lender),  or (B) a change in official  reserve  (including,  without
            limitation, any marginal, emergency,  supplemental, special or other
            reserve)   requirements  (except  to  the  extent  included  in  the
            computation  of the  Adjusted  LIBO Rate),  or any special  deposit,
            assessment or similar  requirement  against assets of, deposits with
            or for the  account  of, or credit  extended  by, any Lender (or its
            Applicable Lending Office); or

                        (iii) at any time that the making or  continuance of any
            Eurodollar  Loan  has  been  made (A)  unlawful  by any  law,  rule,
            regulation or order or (B) impossible by compliance by any Lender in
            good faith with any  governmental  directive or request  (whether or
            not having the force of law);

then,  and in any such event,  such Lender,  in the case of clause (ii) or (iii)
above,  or the  Administrative  Agent,  in the case of clause (i)  above,  shall
promptly give notice (by telephone  confirmed in writing) to the Borrower,  and,
except in the case of clause  (i)  above,  to the  Administrative  Agent of such
determination  (which notice the Administrative Agent shall promptly transmit to
each of the Lenders).  Thereafter,  (1) in the case of clause (i) above,  in the
event that Eurodollar Loans are so affected, Eurodollar Loans shall no longer be
available until such time as the Administrative  Agent notifies the Borrower and
the  Lenders  that  the  circumstances   giving  rise  to  such  notice  by  the
Administrative Agent no longer exist, and any notices given by the Borrower with
respect to Eurodollar  Loans which have not yet been incurred

                                      -21-
<PAGE>

(including by way of conversion) shall be deemed rescinded by the Borrower,  (2)
in the case of clause (ii) above, the Borrower shall pay to such Lender,  within
15 days of written demand therefor,  such additional  amounts (in the form of an
increased rate of, or a different  method of calculating,  interest or otherwise
as such  Lender  in its  reasonable  discretion  shall  determine)  as  shall be
required to  compensate  such Lender for such  increased  costs or reductions in
amounts received or receivable  hereunder (a written notice as to the additional
amounts  owed to such  Lender,  showing the basis for the  calculation  thereof,
submitted to the Borrower by such Lender in good faith  shall,  absent  manifest
error, be final and conclusive and binding on all the parties hereto) and (3) in
the case of clause  (iii)  above,  the  Borrower  shall take one of the  actions
specified in paragraph (b) below. Each of the Administrative Agent and the other
Credit  Parties  agree  that if it gives  notice to the  Borrower  of any of the
events  described in clause (i) or (iii)  above,  it shall  promptly  notify the
Borrower and, in the case of any such other Lender, the Administrative Agent, if
such event ceases to exist.  If any such event  described in clause (i) or (iii)
above  with  respect to  Eurodollar  Loans  ceases to exist as to a Lender,  the
obligations of such Lender to make  Eurodollar  Loans and to convert Loans to or
continue Loans as Eurodollar Loans on the terms and conditions  contained herein
shall be reinstated.

            (b)  At any  time  that  any  Eurodollar  Loan  is  affected  by the
circumstances  described in Section  2.12(a)(ii) or (iii), the Borrower may (and
in the case of a  Eurodollar  Loan  affected by the  circumstances  described in
Section  2.12(a)(iii)  shall) either (i) if the affected Eurodollar Loan is then
being  made  initially  or  pursuant  to a  conversion,  cancel  the  respective
borrowing or conversion by giving the  Administrative  Agent  telephonic  notice
(confirmed  in writing) on the same date that the  Borrower  was notified by the
affected Lender or the Administrative  Agent pursuant to Section  2.12(a)(ii) or
(iii) or (ii) if the affected Eurodollar Loan is then outstanding, upon at least
three Business Days' written notice to the Administrative Agent and the affected
Lender,  require the affected Lender to convert such Eurodollar Loan into an ABR
Loan as of the end of the Interest  Period then  applicable  to such  Eurodollar
Loan or within the time required by law, if earlier.

            (c)  If any  Lender  determines  that  after  the  date  hereof  the
introduction  of or any change in any applicable law, rule,  regulation,  order,
guideline, directive or compliance by such Lender or any corporation controlling
such Lender  with any request  (whether or not having the force of law) from any
Governmental  Authority  or central bank  concerning  capital  adequacy,  or any
change in interpretation or administration thereof by any Governmental Authority
or central bank, in each case made subsequent to the date hereof,  will have the
effect of reducing the rate of return on the capital  required to be  maintained
by such Lender or any corporation controlling such Lender based on the existence
of such Lender's  Commitment  hereunder or its obligations  hereunder to a level
below that which such Lender or such  corporation  could have  achieved  but for
such  application  or  compliance  (taking into  account  such  Lender's or such
corporation's  policies with respect to capital adequacy) by an amount deemed by
such Lender to be  material,  the Borrower  shall pay to such Lender,  within 15
days of its  written  demand  therefor,  such  additional  amounts  as  shall be
required to compensate  such Lender or such other  corporation for the increased
cost to such Lender or such other  corporation  or the  reduction in the rate of
return to such Lender or such other  corporation as a result of such  reduction.
In determining such additional  amounts,  each Lender will act reasonably and in
good faith and will use averaging and attribution  methods which are reasonable;
provided that such Lender's

                                      -22-
<PAGE>

reasonable good faith  determination of compensation  owing under this paragraph
shall,  absent  manifest  error,  be final and conclusive and binding on all the
parties hereto.  Each Lender,  upon determining that any additional amounts will
be payable  pursuant to this paragraph,  will give prompt written notice thereof
to the  Borrower,  which  notice  shall show the basis for  calculation  of such
additional amounts.

            (d) Each Lender  shall  notify the  Borrower of any event  occurring
after the  Effective  Date  entitling  such  Lender to  compensation  under this
Section 2.12 as promptly as  practicable,  but in any event within 30 days after
the officer having  primary  responsibility  for this  Agreement  obtains actual
knowledge thereof; provided that no such notice shall be required if such Lender
has determined not to seek  compensation  under this Section 2.12 as a result of
such event. Each Lender will furnish to the Borrower a certificate setting forth
the basis and amount of each request by such Lender for compensation  under this
Section 2.12.  Determinations and allocations by any Lender for purposes of this
Section  2.12 on its  costs  or rate  of  return  of  maintaining  Loans  or its
obligation  to make Loans,  or on amounts  receivable by it in respect of Loans,
and of the amounts  required to  compensate  such Lender under this Section 2.12
shall be prima facie evidence of such determinations and allocations.

            (e)  Notwithstanding  the foregoing,  no Lender shall be entitled to
any compensation  described in this Section 2.12 unless, at the time it requests
such  compensation,  it is the  policy or  general  practice  of such  Lender to
request  compensation  for  comparable  costs  in  similar  circumstances  under
comparable provisions of other credit agreements for comparable customers unless
specific facts or  circumstances  applicable to the Borrower or the transactions
contemplated  by this  Agreement  would alter such  policy or general  practice,
provided that nothing in this paragraph shall preclude a Lender from waiving the
collection of similar costs from one or more of its other customers.

            (f) If any Lender  fails to give the notice  described  in paragraph
(d) above  within 30 days after it obtains  such actual  knowledge  of the event
required to be described in such notice,  such Lender shall, with respect to any
compensation  that would  otherwise  be owing to such Lender  under this Section
2.12,  only be entitled to payment for increased  costs  incurred from and after
the date that such Lender does give such notice.

      Section 2.13. Break Funding  Payments.  In the event of (a) the payment of
any principal of any  Eurodollar  Loan other than on the last day of an Interest
Period applicable  thereto  (including as a result of an Event of Default),  (b)
the conversion of any Eurodollar Loan other than on the last day of the Interest
Period  applicable  thereto,  (c) the  failure to borrow,  convert,  continue or
prepay any Loan on the date specified in any notice  delivered  pursuant  hereto
(regardless  of whether such notice may be revoked under  Section  2.8(b) and is
revoked in accordance  therewith),  or (d) the assignment of any Eurodollar Loan
other than on the last day of the Interest Period applicable thereto as a result
of a request by the Borrower  pursuant to Section 2.16, then, in any such event,
the  Borrower  shall  compensate  each  Lender  for the loss,  cost and  expense
attributable to such event. In the case of a Eurodollar Loan, such loss, cost or
expense to any Lender  shall be deemed to include an amount  determined  by such
Lender to be the excess,  if any, of (i) the amount of interest which would have
accrued on the principal amount of such Loan had such event not occurred, at the
Adjusted  LIBO  Rate or LIBO  Rate,  as the case may be,

                                      -23-
<PAGE>

that would have been  applicable  to such Loan,  for the period from the date of
such event to the last day of the then current  Interest Period therefor (or, in
the case of a failure to borrow,  convert or continue, for the period that would
have been the Interest  Period for such Loan),  over (ii) the amount of interest
which would accrue on such principal amount for such period at the interest rate
which such Lender would bid were it to bid, at the  commencement of such period,
for dollar  deposits of a  comparable  amount and period from other banks in the
London interbank market. A certificate of any Lender setting forth any amount or
amounts that such Lender is entitled to receive  pursuant to this Section  shall
be delivered to the Borrower and shall be conclusive  absent manifest error. The
Borrower  shall pay such Lender the amount shown as due on any such  certificate
within 15 days after receipt thereof.

      Section 2.14.  Taxes.  (a) Provided that all  documentation,  if any, then
required to be delivered by any Credit Party pursuant to paragraph (c) below has
been  delivered,  all sums  payable to each Credit  Party by the Borrower or any
Guarantor under any Loan Document shall be paid free and clear of and (except to
the extent  required by law) without any deduction or  withholding on account of
any Taxes (other than a Tax on the Income of any Credit Party (for which payment
need not be free and clear but no deduction or withholding  shall be made unless
then  required by  applicable  law))  imposed,  levied,  collected,  withheld or
assessed  by or within the United  States or any  political  subdivision  of the
United States or any other jurisdiction within or without the United States from
which a payment is made by or on behalf of the  Borrower or any  Guarantor or in
which the  Borrower  or an  Affiliate  thereof  has an office or is deemed to be
doing business (each an "Indemnified Tax").

            (b) If the Borrower or any  Guarantor or any other Person  acting as
agent or intermediary  for the Borrower or any Guarantor is required by any law,
rule, regulation, order, directive, treaty or guideline to make any deduction or
withholding  on account of any  Indemnified  Tax from any sum paid or payable by
the Borrower or any Guarantor to any Credit Party under any Loan Document:

                        (i) the Borrower,  the Guarantors and such Credit Party,
            as  applicable,  will cooperate with each other to notify each other
            of any such  requirement  or any change in any such  requirement  as
            soon as it becomes aware of such  requirement and the  applicability
            of such requirement to any Loan Document;

                        (ii) the Borrower,  such Guarantor or such other Person,
            as applicable, shall pay any such Indemnified Tax before the date on
            which  penalties  attach  thereto,  such  payment to be made (if the
            liability to pay is imposed on the Borrower,  such Guarantor or such
            other  Person,  as  applicable)  for  its  own  account  or (if  the
            liability  is imposed on such Credit  Party) on behalf of and in the
            name of such Credit Party;

                        (iii) the sum payable by the Borrower, such Guarantor or
            such other Person, as applicable,  to the Credit Party in respect of
            which the  relevant  deduction,  withholding  or payment is required
            shall be increased to the extent necessary to ensure that, after the
            making of that deduction,  withholding or payment, such Credit Party
            receives  on the due date  therefor a net sum equal to what it would
            have  received had no such  deduction,  withholding  or payment been
            required; and

                                      -24-
<PAGE>

                        (iv)  within the later of (A) 30 days  after  paying any
            sum  from  which it is  required  by law to make  any  deduction  or
            withholding,  and (B) 30 days  after the due date of  payment of any
            Tax which it is required by this clause (b) to pay,  the Borrower or
            such Guarantor,  as applicable,  shall deliver to the Administrative
            Agent and the applicable Lender evidence reasonably  satisfactory to
            the  Administrative  Agent and such Lender of the remittance of such
            Tax to the relevant Governmental Authority;

provided  that no such  additional  amount  shall be  required to be paid to any
Credit Party under this Section 2.14 with respect to an  Indemnified  Tax to the
extent that (1) such  additional  amount  would have been  required to have been
paid under any law, rule, regulation,  order, directive,  treaty or guideline in
effect  on the date  hereof  (in the case of each  Credit  Party  listed  on the
signature  pages  hereof)  or on  the  effective  date  of  the  Assignment  and
Acceptance  pursuant  to which it  became  a Lender  (in the case of each  other
Credit Party) or (2) the obligation to deduct,  withhold or pay such  additional
amount  would not have arisen but for a failure by the  Administrative  Agent or
such Credit Party to comply with subsection (c) below.

            (c) Each Foreign  Lender shall deliver to the  Administrative  Agent
and to the Borrower,  (i) on or prior to the Effective Date (in the case of each
Lender  listed on the signature  pages  hereto) or on the effective  date of the
Assignment and Acceptance  pursuant to which it becomes a Lender (in the case of
each other Lender), (ii) on or before the date, if any, such Lender designates a
new Applicable  Lending Office and (iii) at such other times as may be necessary
in the  determination of the Borrower or the  Administrative  Agent (each in the
reasonable  exercise of its discretion),  such certificates,  documents or other
evidence,  properly  completed  and duly  executed  by such  Lender  (including,
without limitation, Internal Revenue Service Form W-8 BEN or Form W-8 ECI or any
other certificate or statement of exemption (or any successor  thereto) required
by  applicable  Treasury  Regulations)  to establish  that such Lender is wholly
exempt from any deduction or  withholding  of United States  federal  income tax
under  Section  1441,  1442 or  3406 of the  Code or  otherwise  (or  under  any
comparable  provisions of any successor statute) with respect to any payments to
such Lender of principal, interest, fees or other amounts payable under any Loan
Document.  Neither the Borrower nor any  Guarantor  shall be required to pay any
additional  amount to any such Lender under this Section 2.14 with respect to an
Indemnified Tax imposed,  levied,  collected,  withheld or assessed by or within
the United States or any political subdivision thereof if such Lender shall have
failed to  satisfy  the  requirements  of the  immediately  preceding  sentence;
provided that if such Lender shall have  satisfied such  requirements  (A) on or
prior to the Effective  Date (in the case of each Lender listed on the signature
pages hereto) or on the effective date of the Assignment and Acceptance pursuant
to which it became a Lender  (in the case of each  other  Lender)  or (B) on the
date such Lender  designates a new Applicable  Lending  Office,  nothing in this
subsection  shall  relieve the Borrower and each  Guarantor of their  respective
obligations to pay any additional  amounts  pursuant to this Section 2.14 in the
event that,  as a result of any change in  applicable  law  (including,  without
limitation,  any change in the interpretation thereof), such Lender is no longer
properly  entitled to deliver  certificates,  documents  or other  evidence at a
subsequent  date  establishing  the fact that  such  Lender  is not  subject  to
withholding as described in the immediately preceding sentence.

                                      -25-
<PAGE>

      Section 2.15. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.
(a) Each of the Borrower and the Guarantors  shall make each payment required to
be made by it hereunder or under any other Loan Document  (whether of principal,
interest,  fees, or of amounts payable under Section 2.12, 2.13, 2.14 or 9.3, or
otherwise)  prior to 12:00  noon,  New York City time,  on the date when due, in
immediately  available  funds,  without  set-off or  counterclaim.  Any  amounts
received   after  such  time  on  any  date  may,  in  the   discretion  of  the
Administrative  Agent,  be deemed to have been  received on the next  succeeding
Business Day for purposes of  calculating  interest  thereon.  All such payments
shall be made to the Administrative Agent at its offices at One Wall Street, New
York, New York or such other office specified by the  Administrative  Agent from
time to time, except that payments pursuant to Sections 2.12, 2.13, 2.14 and 9.3
shall be made directly to the Persons entitled thereto. The Administrative Agent
shall  distribute any such payments  received by it for the account of any other
Person to the appropriate  recipient promptly following receipt thereof.  If any
payment hereunder shall be due on a day that is not a Business Day, the date for
payment shall be extended to the next succeeding  Business Day, and, in the case
of any payment  accruing  interest,  interest  thereon  shall be payable for the
period of such extension. All payments hereunder shall be made in dollars.

            (b) If at any time insufficient  funds are received by and available
to the Administrative Agent to pay fully all amounts of principal,  interest and
fees then due hereunder,  such funds shall be applied (i) first, towards payment
of interest  and fees then due  hereunder,  ratably  among the parties  entitled
thereto in  accordance  with the amounts of  interest  and fees then due to such
parties,  and (ii)  second,  towards  payment of principal  then due  hereunder,
ratably among the parties  entitled  thereto in  accordance  with the amounts of
principal then due to such parties.

            (c) If any  Lender  shall,  by  exercising  any right of  set-off or
counterclaim  or  otherwise,  obtain  payment in respect of any  principal of or
interest on any of its Loans  resulting  in such Lender  receiving  payment of a
greater  proportion  of the aggregate  amount of its Loans and accrued  interest
thereon  than the  proportion  received  by any other  Lender,  then the  Lender
receiving  such  greater  proportion  shall  purchase  (for cash at face  value)
participations in the Loans of other Lenders to the extent necessary so that the
benefit  of all  such  payments  shall  be  shared  by the  Lenders  ratably  in
accordance  with the  aggregate  amount of principal of and accrued  interest on
their  respective  Loans;  provided  that  (i) if any  such  participations  are
purchased  and  all or any  portion  of  the  payment  giving  rise  thereto  is
recovered,  such  participations  shall  be  rescinded  and the  purchase  price
restored  to the  extent  of such  recovery,  without  interest,  and  (ii)  the
provisions of this paragraph shall not be construed to apply to any payment made
by the Borrower  pursuant to and in  accordance  with the express  terms of this
Agreement  or  any  payment  obtained  by a  Lender  as  consideration  for  the
assignment  of or sale of a  participation  in any of its Loans to any assignee,
other than to the Borrower or any Subsidiary or other  Affiliate  thereof (as to
which the  provisions of this paragraph  shall apply).  Each of the Borrower and
the  Guarantors  consents  to the  foregoing  and  agrees,  to the extent it may
effectively  do  so  under   applicable   law,  that  any  Lender   acquiring  a
participation  pursuant to the foregoing  arrangements  may exercise  against it
rights of set-off and counterclaim  with respect to such  participation as fully
as if  such  Lender  were a  direct  creditor  thereof  in the  amount  of  such
participation.

                                      -26-
<PAGE>

            (d) Unless the Administrative  Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Administrative
Agent for the  account  of the  applicable  Credit  Parties  hereunder  that the
Borrower or such  Guarantor,  as  applicable,  will not make such  payment,  the
Administrative  Agent  may  assume  that  the  Borrower  or such  Guarantor,  as
applicable,  has made such payment on such date in accordance  herewith and may,
in reliance upon such  assumption,  distribute to such Credit Parties the amount
due. In such event, if the Borrower or such Guarantor, as applicable, has not in
fact made such payment, then each such Credit Party severally agrees to repay to
the  Administrative  Agent forthwith on demand the amount so distributed to such
Credit Party with  interest  thereon,  for each day from and  including the date
such amount is  distributed  to it to but  excluding  the date of payment to the
Administrative  Agent,  at the greater of the Federal Funds Effective Rate and a
rate determined by the Administrative  Agent in accordance with banking industry
rules on interbank compensation.

            (e) If any Credit  Party shall fail to make any payment  required to
be made by it pursuant to Section  2.5(b) or  2.15(d),  then the  Administrative
Agent may, in its discretion  (notwithstanding  any contrary  provision hereof),
apply  any  amounts  thereafter  received  by the  Administrative  Agent for the
account of such Credit Party to satisfy such Credit  Party's  obligations  under
such Sections until all such unsatisfied obligations are fully paid.

      Section 2.16. Mitigation  Obligations;  Replacement of Lenders. (a) If any
Lender requests  compensation under Section 2.12, or if the Borrower is required
to pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender  pursuant  to Section  2.14,  then such  Lender  shall use
reasonable  efforts to  designate  a  different  Applicable  Lending  Office for
funding or booking  its Loans (or any  participation  therein)  hereunder  or to
assign its rights and obligations hereunder to another of its offices,  branches
or  affiliates,  if,  in the  judgment  of  such  Lender,  such  designation  or
assignment  (i) would  eliminate or reduce amounts  payable  pursuant to Section
2.12 or 2.14,  as the case may be, in the future and (ii) would not subject such
Lender to any material  unreimbursed  cost or expense and would not otherwise be
materially disadvantageous to such Lender. The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.

            (b) If at any  time  (i)  any  Lender  requests  compensation  under
Section 2.12, or if the Borrower is required to pay any additional amount to any
Lender or any  Governmental  Authority for the account of any Lender pursuant to
Section 2.14, (ii) any Lender becomes a Non-Extending  Lender,  (iii) any Lender
defaults in its  obligation  to fund Loans  hereunder,  (iv) any Lender  becomes
insolvent  and its assets  become  subject to a receiver,  liquidator,  trustee,
custodian  or other Person  having  similar  powers or (v) any Lender  becomes a
"Non-Consenting  Lender" (as defined below),  then the Borrower may, at its sole
expense and effort,  upon  notice to such Lender and the  Administrative  Agent,
require  such Lender to (and such Lender  shall)  assign and  delegate,  without
recourse  (in  accordance  with and  subject to the  restrictions  contained  in
Section 9.4), all its interests,  rights and obligations under this Agreement to
an assignee (selected by the Borrower) that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such  assignment);  provided
that (i) the  Borrower  shall have  received  the prior  written  consent of the
Administrative Agent, which consent shall not unreasonably be withheld, and (ii)
such Lender shall have  received  payment of an amount equal to the  outstanding
principal

                                      -27-
<PAGE>

of its Loans,  accrued  interest  thereon,  accrued  fees and all other  amounts
payable to it under the Loan Documents, from the assignee (to the extent of such
outstanding  principal  and accrued  interest  and fees) or the Borrower (in the
case of all other  amounts).  A Lender  shall not be  required  to make any such
assignment and  delegation  if, prior  thereto,  as a result of a waiver by such
Lender or otherwise,  the  circumstances  entitling the Borrower to require such
assignment and delegation  cease to apply. In the event that (x) the Borrower or
the Agent has  requested  the Lenders to consent to a departure or waiver of any
provisions of the Loan Documents or to agree to any amendment  thereto,  (y) the
consent,  waiver or amendment in question  requires the agreement of all Lenders
in  accordance  with the terms of Section 9.2 and (z) the Required  Lenders have
agreed to such consent, waiver or amendment,  then any Lender who does not agree
to such  consent,  waiver or  amendment  within  three  Business  Days after the
condition  set  forth in  clause  (z)  above  has been  satisfied  and a request
therefor has been made to such Lender shall be deemed a "Non-Consenting Lender".

            (c) In lieu of replacing a Lender  pursuant to paragraph  (b) above,
provided  that no Event of Default  shall  exist,  the  Borrower may direct in a
writing delivered to the  Administrative  Agent and such Lender that such Lender
be terminated as a Lender and that the aggregate  amount of the  Commitments  be
reduced by the amount of the  Commitment  of such Lender;  provided that no more
than five Lenders in the aggregate may be terminated pursuant to this paragraph.
In such case,  the Borrower  shall pay to such Lender an amount equal to the sum
of (i) an amount  equal to the  principal  of, and all accrued  interest on, all
outstanding  Loans of such  Lender,  (ii) an amount  equal to all  accrued,  but
theretofore  unpaid,  fees owing to such Lender, and (iii) all other obligations
of the Borrower and the Guarantors owing to such Lender  concurrently  with such
termination.  Upon such  notice and  payment,  (A) such  Lender  shall  cease to
constitute a Lender hereunder, except with respect to indemnification provisions
under  this  Agreement,  which  shall  survive  as to such  Lender,  and (B) the
aggregate amount of Commitments  shall be reduced by the amount of such Lender's
Commitment  and the  Applicable  Percentages  of the remaining  Lenders shall be
adjusted accordingly.

      Section  2.17.  Increases in  Commitments.  The  Borrower  may, by written
notice to the  Administrative  Agent,  executed by the  Borrower and one or more
financial  institutions,  which may include one or more  existing  Lenders (each
such  financial  institution  being  called  a  "Prospective   Lender"),   cause
Commitments to be extended by the Prospective  Lenders (or cause the Commitments
of the  Prospective  Lenders to be increased,  as the case may be), in an amount
for each Prospective Lender set forth in such notice,  provided,  however,  that
(a)  each  such  extension  or  increase  shall  be  effected   ratably  with  a
corresponding  extension  or  increase  in the  Commitments  (as  defined in the
Five-Year Credit  Agreement),  (b) immediately  after giving effect to each such
extension or increase,  the sum of the aggregate  amount of all such  extensions
and increases  plus the aggregate  amount of all  corresponding  extensions  and
increases  under  the  Five-Year  Credit  Agreement  shall  in no  event  exceed
$50,000,000, (c) each such extension or increase shall be in an aggregate amount
that is an integral  multiple of $5,000,000 and not less than  $10,000,000,  (d)
the Commitments shall in no event be extended or increased under this Section on
more than four (4)  occasions,  (e) each  Prospective  Lender,  if not already a
Lender hereunder,  shall be subject to the approval of the Administrative  Agent
(which  approval shall not be  unreasonably  withheld) and (f) each  Prospective
Lender,  if not  already  a  Lender  hereunder,  shall  become  a party  to this
Agreement  by  completing  and  delivering  to the  Administrative  Agent

                                      -28-
<PAGE>

a  duly  executed  Accession   Agreement.   New  Commitments  and  increases  in
Commitments pursuant to this Section shall become effective (i) in the case of a
Prospective  Lender not  already  party  hereto,  on the  effective  date of the
applicable  Accession  Agreement  and (ii) in the case of a  Prospective  Lender
already party hereto, on the date specified in the notice delivered  pursuant to
this Section.  Upon the  effectiveness  of any Accession  Agreement to which any
Prospective  Lender  not  already a party  hereto  becomes  a  Lender,  (A) such
Prospective  Lender shall  thereafter be deemed to be a party to this  Agreement
and shall be entitled to all rights,  benefits and privileges  accorded a Lender
hereunder and subject to all obligations of a Lender  hereunder and (B) Schedule
2.1 shall be deemed  to have been  amended  to  reflect  the  Commitment  of the
additional   Lender  as  provided  in  such   Accession   Agreement.   Upon  the
effectiveness  of any extension or increase under this Section in the Commitment
of a Lender already a party hereunder, Schedule 2.1 shall be deemed to have been
amended  to  reflect  the  extended  or  increased  Commitment  of such  Lender.
Notwithstanding the foregoing, no extension or increase in the total Commitments
(or in the Commitment of any Lender) shall become  effective  under this Section
unless the Administrative Agent shall have received a certificate dated the date
of such  increase  and duly  executed by a Financial  Officer  stating  that the
conditions  set forth in  paragraphs  (a),  (b) and (c) of Section 4.2 have been
satisfied as of the date of such  extension or increase  (with all references in
such  paragraphs to a Borrowing  being deemed to be references to such extension
or increase).  If Loans would be outstanding  immediately after giving effect to
any   extension  or  increase  of  a  Commitment   under  this   Section,   then
simultaneously with such extension or increase,  (1) each applicable Prospective
Lender  and each  other  Lender  shall be deemed to have  entered  into a master
assignment and acceptance agreement, in form and substance substantially similar
to Exhibit A,  pursuant to which each such other Lender  shall have  assigned to
each  such  Prospective  Lender a  portion  of its Loans  necessary  to  reflect
proportionately  the Commitments as adjusted in accordance with this Section and
(2) in connection with such assignment,  each such Prospective  Lender shall pay
to the Administrative  Agent, for the account of the other Lenders,  such amount
as shall be necessary to  appropriately  reflect the  assignment to it of Loans,
and in connection  with such master  assignment each such other Lender may treat
the  assignment  of Eurodollar  Borrowings  as a prepayment  of such  Eurodollar
Borrowings for purposes of Section 2.13.

ARTICLE 3. Representations and Warranties

            In order to induce the Credit  Parties to enter into this  Agreement
and  the  Lenders  to  make  the  Loans,   the  Borrower   makes  the  following
representations and warranties to the Credit Parties:

      Section 3.1. Organization and Powers. Each of the Borrower, the Guarantors
and the other  Subsidiaries is duly organized or formed and validly  existing in
good  standing  under  the  laws of the  jurisdiction  of its  incorporation  or
formation and has all  requisite  power and authority to own its Property and to
carry on its  business  as now  conducted,  except in the case of  non-Guarantor
Subsidiaries  where the failure to be so  organized  or formed,  or to have such
power and authority, or to own such Property, or to carry on such business could
not reasonably be expected to have a Material Adverse Effect.

                                      -29-
<PAGE>

      Section 3.2.  Authorization.  Each of the Borrower and the  Guarantors has
full legal power and authority to enter into,  execute,  deliver and perform the
terms of each Loan  Document  to which it is a party,  to incur the  obligations
provided  for herein or therein  and, in the case of the  Borrower,  to make the
borrowings  contemplated  hereby,  all of which have been duly authorized by all
proper and  necessary  corporate  or other  applicable  action,  and each of the
Borrower  and the  Guarantors  is in full  compliance  with its  certificate  of
incorporation, by-laws or other organizational documents.

      Section 3.3.  Enforceability.  Each Loan Document  constitutes a valid and
legally  binding  obligation  of each of the Borrower and the  Guarantors to the
extent it is a party thereto,  enforceable in accordance with its terms,  except
as such  enforceability  may be limited by  applicable  bankruptcy,  insolvency,
reorganization  or other similar laws  affecting the  enforcement  of creditors'
rights generally.

      Section 3.4.  Litigation.  Except as set forth in the Financial Statements
or Schedule 3.4, there are no actions,  suits or proceedings at law or in equity
or by or before any Governmental Authority (whether purportedly on behalf of the
Borrower  or  any of the  Subsidiaries)  pending  or,  to the  knowledge  of the
Borrower,  threatened  against the Borrower or any of the Subsidiaries or any of
their  respective  Properties or rights,  which could  reasonably be expected to
have a Material Adverse Effect and result in a violation of Section 6.7.

      Section 3.5. Required Consents. Except for information and similar filings
required to be made in the ordinary course of business which are not a condition
to the  Borrower's  or any  Guarantor's  performance  under any Loan Document to
which it is a party,  no consent,  authorization  or approval  of,  filing with,
notice to, or exemption by, any Governmental Authority is required to authorize,
or is required in connection with the execution, delivery and performance by the
Borrower or any Guarantor  of, any Loan  Document to which it is a party,  or is
required as a condition to the validity or  enforceability  of any Loan Document
to which it is a party, except for consents, authorizations, approvals, filings,
notices or  exemptions  which were not  required to be obtained on or before the
Effective  Date and either have been obtained or the failure to obtain could not
reasonably be expected to have a Material Adverse Effect.

      Section 3.6. Compliance with Applicable Laws. Neither the Borrower nor any
of the  Subsidiaries  is in default with respect to any judgment,  order,  writ,
injunction, decree or decision of any Governmental Authority which default could
reasonably be expected to have a Material  Adverse Effect.  Each of the Borrower
and the  Subsidiaries  is complying in all material  respects with all statutes,
regulations,  rules and orders applicable to it of all Governmental Authorities,
a violation  of which could  reasonably  be expected to have a Material  Adverse
Effect.

      Section 3.7. Taxes. Each of the Borrower and the Subsidiaries has filed or
caused to be filed all tax  returns  required  to be filed and has paid,  or has
made  adequate  provision  for the  payment  of,  all taxes  shown to be due and
payable on said returns or in any  assessments  made against it,  except (a) any
Taxes that are being contested in good faith by appropriate  proceedings and for
which the Borrower or such Subsidiary, as applicable, has set aside on its books
adequate  reserves as shall be required by the  Accountants  in accordance  with
GAAP or (b) to the  extent  that the  failure to do so could not  reasonably  be
expected to result in a Material Adverse Effect.

                                      -30-
<PAGE>

      Section  3.8.  Governmental  Regulations.  Neither  the  Borrower  nor any
Guarantor is subject to regulation  under the Public Utility Holding Company Act
of 1935,  as amended,  the Federal  Power Act or the  Investment  Company Act of
1940,  as amended,  and neither the Borrower nor any Guarantor is subject to any
statute or regulation  which prohibits the incurrence of indebtedness  under any
Loan Document to which it is a party, including statutes or regulations relative
to common or contract carriers or to the sale of electricity, gas, steam, water,
telephone, telegraph or other public utility services.

      Section 3.9. Federal Reserve Regulations; Use of Loan Proceeds. No part of
the proceeds of the Loans will be used,  directly or  indirectly,  for a purpose
which violates the provisions of Regulations T, U or X of the Board, as amended.
The  execution,  delivery and  performance  of each Loan Document by each of the
Borrower  and the  Guarantors,  to the  extent it is a party  thereto,  will not
violate any material law, rule or regulation of any Governmental Authority.

      Section 3.10. Financial Statements.  The Borrower has heretofore furnished
to the Credit Parties its  Consolidated  balance sheet and statements of income,
stockholders  equity  and cash  flows (i) as of and for the  fiscal  year  ended
February  3,  2001,  reported  on by  Ernst  &  Young  LLP,  independent  public
accountants,  and (ii) as of and for the fiscal  quarter  and the portion of the
fiscal year ended May 5, 2001,  certified by its chief financial  officer.  Such
financial  statements  present fairly, in all material  respects,  the financial
position  and  results  of  operations  and cash flows of the  Borrower  and the
Consolidated  Subsidiaries  as of such dates and for such periods in  accordance
with GAAP, subject to year-end audit adjustments and the absence of footnotes in
the case of the statements referred to in clause (ii) above.

      Section 3.11.  Material Adverse Change.  Since May 5, 2001, there has been
no Material Adverse Change.

      Section 3.12.  No  Conflicting  Agreements.  The  execution,  delivery and
performance  by each of the Borrower and the Guarantors of each Loan Document to
which it is a party will not constitute a default  under,  or result in a breach
of the terms of, any mortgage, indenture, contract or agreement to which it is a
party or by which it or any of its Property is bound which could  reasonably  be
expected to have a Material  Adverse  Effect or to be materially  adverse to the
rights or interests of the Credit Parties.

      Section 3.13. Disclosure. The Borrower has disclosed to the Credit Parties
all agreements,  instruments and corporate or other  restrictions to which it or
any of the  Subsidiaries  is subject,  and all other  matters known to it, that,
individually  or in the  aggregate,  could  reasonably  be  expected  to  have a
Material  Adverse Effect.  The reports,  financial  statements,  certificates or
other written or formally  presented  information  (other than projected and pro
forma  financial  information  and  opinions)  furnished  by or on behalf of the
Borrower to any Credit  Party in  connection  with the  negotiation  of the Loan
Documents  or  delivered  thereunder  (as  modified  or  supplemented  by  other
information so furnished),  considered as a whole, does not contain any material
misstatement  of fact or omit to state any material  fact  necessary to make the
statements  therein,  in the light of the  circumstances  under  which they were
made, not  misleading.  The projected and pro forma  financial  information  and
opinions  furnished  by or on

                                      -31-
<PAGE>

behalf of the Borrower to any Credit Party in connection with the negotiation of
the Loan  Documents or delivered  thereunder  were  prepared in good faith based
upon assumptions believed to be reasonable at the time.

ARTICLE 4. Conditions Precedent

      Section 4.1.  Effective Date. The obligations of the Lenders to make Loans
hereunder  shall  not  become  effective  until  the date on  which  each of the
following  conditions  shall have been  satisfied (or waived in accordance  with
Section 9.2):

            (a) The  Administrative  Agent (or its counsel)  shall have received
from each party hereto  either (i) a  counterpart  of this  Agreement  signed on
behalf of such party or (ii) written evidence satisfactory to the Administrative
Agent (which may include  telecopy  transmission  of a signed  signature page of
this Agreement) that such party has signed a counterpart of this Agreement.

            (b) The  Administrative  Agent (or its counsel)  shall have received
the Guarantee Agreement signed on behalf of each Guarantor.

            (c) The Administrative Agent shall have received a favorable written
opinion  (addressed  to the  Credit  Parties  and dated the  Effective  Date) of
Michael L. Tumolo,  Vice President - Counsel of the Borrower,  substantially  in
the form of  Exhibit  B-1,  and Weil,  Gotshal  & Manges  LLP,  counsel  for the
Borrower and the Guarantors, substantially in the form of Exhibit B-2.

            (d) The  Administrative  Agent  shall have  received a  certificate,
dated the Effective Date, of the Secretary or an Assistant  Secretary of each of
the Borrower and the  Guarantors,  (i) attaching a true and complete copy of the
resolutions (or excerpts thereof) of its Board of Directors and of all documents
evidencing other necessary  corporate  action (in form and substance  reasonably
satisfactory  to the  Administrative  Agent) taken by it to authorize  each Loan
Document to which it is a party,  (ii) attaching a true and complete copy of its
certificate  of  incorporation,  by-laws or other  organizational  documents and
(iii) attesting as to the incumbency of each of its officers executing each Loan
Document to which it is a party,  including therein a signature specimen of each
such officer.

            (e) The  Administrative  Agent  shall have  received a  certificate,
dated  the  Effective  Date  and  signed  by  a  Financial  Officer,  confirming
compliance  with the  conditions  set forth in  paragraphs  (a),  (b) and (c) of
Section 4.2.

            (f) The Existing Credit Documents shall have been terminated and all
amounts due thereunder shall have been paid, and the Administrative  Agent shall
have received  evidence,  in form and substance  reasonably  satisfactory to it,
thereof.

            (g) The Administrative  Agent shall have received all fees and other
amounts due and payable on or prior to the  Effective  Date,  including,  to the
extent  invoiced,

                                      -32-
<PAGE>

reimbursement or payment of all reasonable out-of-pocket expenses required to be
reimbursed or paid by the Borrower hereunder.

The  Administrative  Agent  shall  notify the  Borrower  and the  Lenders of the
Effective Date, and such notice shall be conclusive and binding.

      Section 4.2.  Each Credit Event.  The  obligation of each Lender to make a
Loan on the occasion of any Borrowing  shall be subject to the  satisfaction  of
the following conditions:

            (a) The  representations and warranties of the Borrower set forth in
this  Agreement  (other than those  contained  in Section 3.4 and 3.11) shall be
true  and  correct  in all  material  respects  on and as of the  date  of  such
Borrowing.

            (b) At the  time of and  immediately  after  giving  effect  to such
Borrowing, no Default shall have occurred and be continuing.

            (c) At the  time of and  immediately  after  giving  effect  to such
Borrowing, no default shall have occurred with respect to any obligations of the
Borrower or any of the Subsidiaries  representing a Material  Subsidiary  Group,
whether  as  principal,  guarantor,  surety or  otherwise,  for the  payment  of
Indebtedness as defined in clause (a), (b), (c), (e) or (g) of the definition of
such term, in an aggregate  Consolidated  principal amount exceeding $25,000,000
that would,  immediately or with the lapse of time, permit the holder or holders
of such  obligations  or any  representative  acting  on its or their  behalf to
declare such  obligations to be due and payable prior to the expressed  maturity
thereof.

Each Borrowing  shall be deemed to constitute a  representation  and warranty by
the Borrower on the date thereof as to the matters  specified in paragraphs (a),
(b) and (c) of this Section.

ARTICLE 5. Affirmative Covenants

            The Borrower  agrees that,  so long as this  Agreement is in effect,
any Loan remains  outstanding and unpaid, or any other amount is owing under any
Loan Document to any Credit Party, the Borrower will:

      Section  5.1.  Financial   Statements.   Maintain  a  standard  system  of
accounting in accordance  with GAAP, and furnish or cause to be furnished to the
Administrative Agent and each Lender:

            (a) Form 10-K.  As soon as  available,  but in any event  within 105
days after the end of each  fiscal  year of the  Borrower,  a copy of the annual
audited  Consolidated  financial statements of the Borrower and the Subsidiaries
prepared  in  conformity  with GAAP and as filed with the SEC in the  Borrower's
Annual Report on Form 10-K for such fiscal year. Such financial statements shall
be certified by the Accountants,  which  certification  shall (i) state that the
examination by the Accountants in connection with such financial  statements has
been made in accordance  with  generally  accepted  auditing  standards and (ii)
include the opinion of the Accountants that such financial  statements have been
prepared in accordance with GAAP.

                                      -33-
<PAGE>

            (b) Form 10-Q. As soon as available, but in any event within 50 days
after the end of each fiscal  quarter  (except the last fiscal  quarter) of each
fiscal  year  of  the  Borrower,  copies  of  unaudited  Consolidated  financial
statements  of the  Borrower and the  Subsidiaries  as filed with the SEC in the
Borrower's Quarterly Report on Form 10-Q for such fiscal quarter.

            (c)  Ratings.  As soon as  available,  but in any event  within  two
Business  Days after any downgrade or withdrawal by either S&P or Moody's of any
debt rating  assigned to the Index Debt,  written  notice to the  Administrative
Agent thereof,  and of the effective  date thereof,  in each case certified by a
Financial Officer.

            (d) Compliance Certificate. The financial statements to be delivered
pursuant to paragraphs (a) and (b) above (the "Financial  Statements")  shall be
accompanied by a certificate  of a Financial  Officer,  (i)  certifying  that no
Default  has  occurred  and was  continuing  as of the end of the fiscal  period
covered  by  such  statements,  or,  if  such a  Default  has  occurred  and was
continuing at the end of such fiscal period, the action the Borrower proposes to
take  with  respect   thereto  and  (ii)  setting  forth   reasonably   detailed
calculations demonstrating compliance with Sections 6.6 and 6.7.

            (e) Other Information. Such other information regarding the Borrower
or any  Subsidiary as any Credit Party may,  through the  Administrative  Agent,
reasonably and in good faith request in writing.

      Section   5.2.   Certificates;   Other   Information.   Furnish   to   the
Administrative Agent and each Lender:

            (a) prompt  written  notice if there shall occur and be continuing a
Default; and

            (b) promptly upon their becoming available,  copies of all (i) 10-K,
10-Q, 8-K or other material, regular, periodic or special reports, schedules and
other  documents  which  the  Borrower  or any of the  Subsidiaries  may  now or
hereafter be required to file with or deliver to any securities  exchange or the
SEC and (ii) material news releases and annual reports  relating to the Borrower
or any of the Subsidiaries.

      Section  5.3.  Legal  Existence.  Except as  permitted in Section 6.1, the
Borrower  shall  maintain  its (i)  legal  existence  and good  standing  in the
jurisdiction  of  its  incorporation  and  (ii)  good  standing  in  each  other
jurisdiction in which the failure so to do could  reasonably be expected to have
a Material Adverse Effect, and except as a result of any transaction involving a
Subsidiary  that is not prohibited by this  Agreement,  the Borrower shall cause
each of the  Subsidiaries  (other than  Subsidiaries  that do not  constitute  a
Material Subsidiary Group) to maintain its (a) legal existence and good standing
in the  jurisdiction of its  incorporation or formation and (b) good standing in
each  other  jurisdiction  in which the  failure  so to do could  reasonably  be
expected to have a Material Adverse Effect.

      Section  5.4.  Taxes.  Pay and  discharge  when due, and cause each of the
Subsidiaries so to do, all Taxes,  assessments and governmental charges, license
fees and levies  which,  if  unpaid,  could  reasonably  be  expected  to have a
Material Adverse Effect, except such Taxes,  assessments,

                                      -34-
<PAGE>

charges,  license  fees and levies that shall be  contested in good faith and by
appropriate  proceedings diligently conducted by the Borrower or such Subsidiary
and provided that the Borrower shall give the Administrative Agent prompt notice
of such contest and that such reserve or other appropriate provision as shall be
required  by the  Accountants  in  accordance  with  GAAP  shall  have been made
therefor.

      Section 5.5. Observance of Legal  Requirements.  Observe and comply in all
respects,  and  cause  each  of  the  Subsidiaries  so to  do,  with  all  laws,
ordinances,  orders,  judgments,  rules,  regulations  and  requirements  of all
Governmental  Authorities,  which now or at any time hereafter may be applicable
to it, a  violation  of which  could  reasonably  be expected to have a Material
Adverse  Effect,  except such thereof as shall be contested in good faith and by
appropriate  proceedings  diligently conducted by it, provided that the Borrower
shall give the Administrative  Agent prompt notice of such contest and that such
reserve or other  appropriate  provision as shall be required by the Accountants
in accordance with GAAP shall have been made therefor.

      Section 5.6. Inspection of Property; Books and Records;  Discussions. Keep
proper  books of record and account in which full,  true and correct  entries in
conformity  with GAAP and all  requirements of law shall be made of all dealings
and  transactions  in relation to its business  and  activities  and,  after the
occurrence  and  during  the   continuance  of  an  Event  of  Default,   permit
representatives  of any Credit  Party,  upon at least two  Business  Days' prior
written  notice,  to  visit  its  corporate  headquarters,  and to  discuss  the
business,  operations,  prospects, licenses, Property and financial condition of
the Borrower and the Subsidiaries with the respective officers thereof.

ARTICLE 6. Negative Covenants

            Until the  Commitments  have expired or terminated and the principal
of and interest on each Loan and all fees payable under the Loan  Documents have
been paid in full,  the Borrower  covenants  and agrees with the Credit  Parties
that it will not:

      Section 6.1.  Merger or  Consolidation,  Etc.  (a)  Consolidate  with,  be
acquired by, or merge into or with any Person,  or convey or otherwise  transfer
all  or  substantially  all  of its  Property,  except  that  the  Borrower  may
consolidate  with or merge with  another  Person,  or convey or transfer  all or
substantially  all of its  Property  to another  Person,  provided  that (i) the
Borrower shall have given the  Administrative  Agent prior notice thereof,  (ii)
the Person formed by such consolidation or into which the Borrower is merged, or
the Person which acquires by conveyance or transfer all or substantially  all of
such Property, or any Person owning beneficially 100 percent of the Voting Stock
of such Person (in each case, the "Successor  Person") shall expressly assume by
an  instrument  executed and  delivered  to the  Administrative  Agent,  in form
reasonably  satisfactory  to the  Administrative  Agent,  the obligations of the
Borrower under the Loan Documents (at which time the Borrower shall be deemed to
be released from the Loan Documents), (iii) no Default or Event of Default shall
exist before or after giving effect  thereto and (iv) the  Administrative  Agent
shall  have  received  such   documents,   opinions  and   certificates  as  the
Administrative Agent shall have reasonably requested in connection therewith.

                                      -35-
<PAGE>

            (b) Upon any  consolidation or merger, or any conveyance or transfer
of all or  substantially  all of the Property of the Borrower in accordance with
Section 6.1(a),  the Successor  Person shall succeed to, and be substituted for,
and may  exercise  every  right  and  power  of,  and  shall be  subject  to all
obligations  and  liabilities of, the Borrower under the Loan Documents with the
same effect as if such Successor  Person had been named as the Borrower  herein.
In  the  event  of  any  such  conveyance  or  transfer,  the  Borrower,  as the
predecessor  Person,  may be  dissolved,  wound  up or  liquidated  at any  time
thereafter.

      Section 6.2.  Subsidiary  Indebtedness.  (a) Permit any Subsidiary that is
not a Guarantor  to create,  incur,  assume or permit to exist any  Indebtedness
described in clause (a),  (b),  (c), (e) or (g) of the  definition of such term,
other than:

                        (i) any such  Indebtedness  existing  on the date hereof
            and  set  forth  in  Schedule  6.2  and  extensions,   renewals  and
            replacements  of any  such  Indebtedness  that do not  increase  the
            outstanding  principal  amount  thereof  (unless  such  increase  is
            otherwise permitted by this Section);

                        (ii) any such  Indebtedness to the Borrower or any other
            Subsidiary; and

                        (iii) other such Indebtedness;  provided that the sum of
            (i) the aggregate outstanding principal amount of such Indebtedness,
            (ii) the aggregate  outstanding  principal amount of any increase of
            any  Indebtedness  permitted by paragraph (a)(i) of this Section and
            (ii) the aggregate  outstanding  principal amount of the obligations
            secured by Liens permitted under Section 6.3(h) does not at any time
            exceed 10% of Consolidated Tangible Net Worth.

            (b) Permit any Subsidiary to enter into, assume or be a party to any
Guarantee of  Indebtedness of the Borrower,  unless such  Subsidiary  shall be a
Guarantor.

      Section 6.3.  Liens,  Etc.  Create,  assume,  incur or suffer to exist, or
permit any Subsidiary to create,  assume,  incur or suffer to exist, any Lien on
any  Property now owned or  hereafter  acquired by it, or assign,  or permit any
Subsidiary to assign, any income or right with respect thereto, other than:

            (a) Permitted Encumbrances;

            (b) any  Lien on any  Property  of the  Borrower  or any  Subsidiary
existing on the date hereof and set forth in Schedule 6.3, and any other Lien on
any Property of the Borrower or any Subsidiary  existing on the date hereof that
was  incurred  in the  ordinary  course  of  business  and does not  secure  (i)
Indebtedness  to Persons  other than the Borrower or any  Subsidiary of the type
described  in clauses  (a),  (b) or (g) of the  definition  of such term or (ii)
Guarantees in respect of any such  Indebtedness;  provided that (i) no such Lien
shall apply to any other Property of the Borrower or any Subsidiary  (other than
after  acquired  title in or on such  property  and proceeds and products of the
existing  collateral in accordance  with the instrument  creating such Lien) and
(ii) any such Lien shall secure only those  obligations  which it secures on the
date  hereof and any  increase  in such  obligations  not  otherwise  prohibited
hereunder;

                                      -36-
<PAGE>

            (c) any Lien  existing  on any  Property  prior  to the  acquisition
thereof by the Borrower or any Subsidiary, and any Lien existing on any Property
of any Person (other than a Subsidiary) that is merged into or consolidated with
the Borrower or a Subsidiary,  or that otherwise becomes a Subsidiary,  prior to
the time  such  Person is so merged or  consolidated  or  becomes a  Subsidiary;
provided that (i) such Lien is not created in contemplation of such acquisition,
merger or  consolidation  or such Person becoming a Subsidiary,  as the case may
be, (ii) such Lien shall not apply to any other  Property of the Borrower or any
Subsidiary  (other than after acquired title in or on such property and proceeds
and  products of the  existing  collateral  in  accordance  with the  instrument
creating  such  Lien) and (iii) such Lien shall  secure  only those  obligations
which it secures on the date of such acquisition, merger or consolidation or the
date such Person  becomes a Subsidiary,  as the case may be, and any increase in
such obligations not otherwise prohibited hereunder;

            (d)  Liens on fixed  or  capital  assets  acquired,  constructed  or
improved by the Borrower or any  Subsidiary  securing the purchase price of such
fixed or capital assets or Indebtedness (including Capital Lease Obligations) of
the Borrower or any  Subsidiary  incurred  and used to finance the  acquisition,
construction or improvement of such fixed or capital  assets;  provided that (i)
such Liens and the Indebtedness  secured thereby are incurred prior to or within
one year  after such  acquisition  or the  completion  of such  construction  or
improvement  and (ii) such Liens  shall not apply to any other  Property  of the
Borrower  or any  Subsidiary  (other  than  after  acquired  title in or on such
property and proceeds and products of the existing collateral in accordance with
the instrument creating such Lien);

            (e) Liens arising in connection  with Capital Lease  Obligations  of
non-Guarantor  Subsidiaries not prohibited  under Section 6.2;  provided that no
such Lien shall extend to or cover any Property other than the Property  subject
to such Capital Lease Obligations;

            (f) Liens on Property of any Subsidiary  securing  obligations owing
to the Borrower or any other Subsidiary;

            (g)  Liens  securing  any   extension,   renewal  or  refunding  (or
successive  extensions,  renewals  or  refundings)  in  whole  or in part of any
obligations secured by Liens referred to in the foregoing paragraphs (a) through
(f);  provided that the principal amount of the obligations  secured by any such
Lien shall not exceed the principal amount outstanding immediately prior to such
extension,  renewal or refunding and any increase in such  prinicpal  amount not
otherwise prohibited  hereunder,  and that any such Lien shall be limited to the
Property  which,  immediately  prior to such  extension,  renewal or  refunding,
secured such obligations; and

            (h) Liens not expressly  permitted by clauses (a) through (g) above;
provided that the sum,  without  duplication,  of (i) the aggregate  outstanding
principal  amount of the  Indebtedness  permitted by clause  (a)(iii) of Section
6.2,  (ii) the  aggregate  outstanding  principal  amount of any increase of any
obligations  permitted by  paragraph  (b), (c) and (g) of this Section and (iii)
the  aggregate  principal  amount of  outstanding  obligations  secured by Liens
(which amount, in the case of any sale of accounts  receivable,  shall be deemed
to equal the lesser of the aggregate uncollected balance of the accounts so sold
and the maximum claim of the purchaser

                                      -37-
<PAGE>

with respect  thereto)  permitted by this clause (h) does not at any time exceed
10% of Consolidated Tangible Net Worth.

      Section  6.4.  Change in Nature of  Business.  Make,  or permit any of the
Subsidiaries  (other  than  Subsidiaries  that  do  not  constitute  a  Material
Subsidiary  Group) to make, any material change in the nature of its business as
carried out at the date hereof, other than reasonable extensions thereof.

      Section 6.5. Use of Proceeds. (a) Use the proceeds of the Loans other than
for working capital and other general corporate purposes,  not inconsistent with
the terms hereof or (b) use any part of the  proceeds of the Loans,  directly or
indirectly, for a purpose which violates the provisions of Regulations T, U or X
of the Board, as amended.

      Section 6.6. Fixed Charge  Coverage  Ratio.  Permit,  as of the end of any
fiscal quarter of the Borrower,  the Fixed Charge Coverage Ratio to be less than
1.80 to 1.00.

      Section 6.7. Capitalization.  Permit, at any time, the aggregate amount of
all Indebtedness for borrowed money and Indebtedness under capital leases of the
Borrower and the Consolidated Subsidiaries determined in accordance with GAAP at
such time to be greater than 58% of the sum of (i) the  aggregate of all amounts
which would be included under  shareholders'  equity on a  Consolidated  balance
sheet of the Borrower and the Subsidiaries determined in accordance with GAAP at
such time plus (ii) the aggregate  amount of all Indebtedness for borrowed money
and  Indebtedness  under  capital  leases of the Borrower  and the  Consolidated
Subsidiaries determined in accordance with GAAP at such time.

ARTICLE 7. Events of Default

            If any of the following events ("Events of Default") shall occur:

            (a) Any  installment  of  principal on any Loan shall not be paid on
the date when due and payable; or

            (b) Any (i)  installment  of  interest on any Loan or any fees shall
not be paid within five  Business  Days of the date when due and payable or (ii)
expenses or other  amounts  payable  under any Loan Document or otherwise to any
Credit  Party shall not be paid within 30 days of the date when due and payable;
or

            (c) The failure of the  Borrower to observe or perform any  covenant
or agreement contained in Section 5.2(a), Section 5.3(a) or in Article 6; or

            (d) The  failure of the  Borrower  to  observe or perform  any other
term,  covenant,  or agreement  contained in any Loan  Document and such failure
shall have continued unremedied for a period of 30 days after the Administrative
Agent shall have notified the Borrower in writing thereof; or

                                      -38-
<PAGE>

            (e) Any  representation  or warranty made in any Loan Document or in
any  certificate,  report,  opinion  (other than an opinion of counsel) or other
document  delivered  pursuant  thereto shall prove to have been incorrect in any
material respect when made or deemed made; or

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

            (g) The Borrower or any of the Subsidiaries  representing a Material
Subsidiary Group shall (i) make an assignment for the benefit of creditors, (ii)
file a  voluntary  petition  in  bankruptcy,  (iii) file any  petition or answer
seeking for itself any reorganization, arrangement, composition, readjustment of
debt,  liquidation  or dissolution or similar relief under any present or future
statute,  law or regulation of any  jurisdiction,  (iv) petition or apply to any
tribunal for any receiver,  custodian or any trustee for any substantial part of
its Property, (v) be the subject of any bankruptcy,  reorganization,  insolvency
or similar proceeding filed against it which remains undismissed for a period of
60 days,  (vi) file any answer  admitting the material  allegations  of any such
petition filed against it in any such proceeding,  (vii) seek, approve,  consent
to, or acquiesce in any such  proceeding,  or in the appointment of any trustee,
receiver, sequestrator,  custodian or liquidator for it, or any substantial part
of its Property, or any order is entered appointing any such trustee,  receiver,
custodian or liquidator  and such order remains in effect for 60 days, or (viii)
take any formal action for the purpose of effecting any of the foregoing; or

            (h)  An  order  for  relief  is  entered  under  the  bankruptcy  or
insolvency  laws of any  jurisdiction  (i)  adjudging the Borrower or any of the
Subsidiaries  representing  a Material  Subsidiary  Group bankrupt or insolvent,
(ii) approving as properly filed a petition seeking reorganization, liquidation,
arrangement,  adjustment or  composition of or in respect of the Borrower or any
of  the  Subsidiaries   representing  a  Material  Subsidiary  Group  under  the
bankruptcy or insolvency laws of any jurisdiction,  (iii) appointing a receiver,
liquidator,  assignee,  trustee,  custodian,   sequestrator  (or  other  similar
official) of the  Borrower or any of the  Subsidiaries  representing  a Material
Subsidiary  Group or of any  substantial  part of the  Property  thereof or (iv)
ordering the winding up or  liquidation of the affairs of the Borrower or any of
the Subsidiaries  representing a Material  Subsidiary Group, and any such decree
or order continues unstayed and in effect for a period of 60 days; or

            (i) Judgments or decrees  against one or more of the Borrower or any
of the  Subsidiaries  representing a Material  Subsidiary  Group in an aggregate
Consolidated  amount  exceeding  $25,000,000  shall  be  rendered  by a court of
competent  jurisdiction  and remain  unpaid,  unstayed on appeal,  undischarged,
unbonded  or  undismissed  for a  period  of 30  days;  provided  that  any such
judgments  or  orders  shall  not give rise to an Event of  Default  under  this
paragraph

                                      -39-
<PAGE>

(i) if and to the  extent  that (i) the  aggregate  Consolidated  amount of such
judgments or orders,  to the extent exceeding  $25,000,000,  is fully covered by
one or more valid and binding  policies of  insurance  and (ii) each  applicable
insurer has been  notified,  and has not disputed its  applicable  share of such
coverage; or

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

            (k) (i) Any Person or two or more  Persons  acting in concert  shall
have  acquired  beneficial  ownership  (within  the meaning of Rule 13d-3 of the
Securities and Exchange Act of 1934), directly or indirectly, of Voting Stock of
the Borrower representing 20% or more of the combined voting power of all Voting
Stock of the Borrower; or (ii) during any period of up to 24 consecutive months,
commencing after the date of this Agreement, individuals who at the beginning of
such 24-month  period were directors of the Borrower shall cease to constitute a
majority of the board of directors of the Borrower and the replacements  thereof
shall not have been  approved by a vote of at least a majority of the members of
the board of directors then still in office who either were members of the board
of directors at the beginning of such period or whose election as members of the
board of directors was previously so approved; or

            (l) the  Guarantee  Agreement  shall be  determined  by a final  and
non-appealable decision of a court having jurisdiction over the matter, or shall
be claimed in writing by a Guarantor, not to be in full force and effect;

then,  and in every such event (other than an event with respect to the Borrower
described  in clause  (g) or (h) of this  Article),  and at any time  thereafter
during the continuance of such event, the  Administrative  Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Loans then  outstanding  to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable),  and thereupon the principal of the Loans so
declared to be due and payable,  together with accrued  interest thereon and all
fees and other obligations of the Borrower accrued  hereunder,  shall become due
and payable immediately, without presentment, demand, protest or other notice of
any kind,  all of which are hereby  waived by the  Borrower;  and in case of any
event  with  respect  to the  Borrower  described  in clause  (g) or (h) of this
Article, the Commitments

                                      -40-
<PAGE>

shall  automatically  terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Borrower accrued hereunder,  shall automatically become due and payable, without
presentment,  demand,  protest  or other  notice of any  kind,  all of which are
hereby waived by the Borrower.

ARTICLE 8. The Administrative Agent

            Each of the Lenders hereby appoints the Administrative  Agent as its
agent and authorizes the Administrative Agent to take such actions on its behalf
and to exercise such powers as are delegated to the Administrative  Agent by the
terms hereof, together with such actions and powers as are reasonably incidental
thereto.

            The bank serving as the  Administrative  Agent  hereunder shall have
the same rights and powers in its  capacity as a Lender as any other  Lender and
may exercise the same as though it were not the  Administrative  Agent, and such
bank and its  Affiliates may accept  deposits from,  lend money to and generally
engage in any kind of  business  with the  Borrower or any  Subsidiary  or other
Affiliate thereof as if it were not the Administrative Agent hereunder.

            The  Administrative  Agent shall not have any duties or  obligations
except those expressly set forth herein.  Without limiting the generality of the
foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or
other  implied  duties,  regardless  of whether a Default  has  occurred  and is
continuing,  (b) the  Administrative  Agent  shall not have any duty to take any
discretionary action or exercise any discretionary  powers, except discretionary
rights and powers expressly contemplated hereby that the Administrative Agent is
required to exercise in writing by the Required Lenders (or such other number or
percentage  of the  Lenders as shall be  necessary  under the  circumstances  as
provided  in Section  9.2) and (c) except as  expressly  set forth  herein,  the
Administrative  Agent  shall  not have any duty to  disclose,  and  shall not be
liable for the failure to disclose,  any information relating to the Borrower or
any of the Subsidiaries  that is communicated to or obtained by the bank serving
as  Administrative  Agent  or  any  of  its  Affiliates  in  any  capacity.  The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary  under the  circumstances  as
provided  in  Section  9.2) or in the  absence  of its own gross  negligence  or
willful  misconduct.  The  Administrative  Agent  shall  be  deemed  not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative  Agent by the Borrower or a Lender, and the Administrative  Agent
shall not be  responsible  for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with any Loan
Document,  (ii) the  contents  of any  certificate,  report  or  other  document
delivered  hereunder  or in  connection  therewith,  (iii)  the  performance  or
observance of any of the covenants,  agreements or other terms or conditions set
forth therein, (iv) the validity,  enforceability,  effectiveness or genuineness
of any Loan Document or any other  agreement,  instrument or document or (v) the
satisfaction  of any  condition  set forth in Article 4 or elsewhere in any Loan
Document,  other  than to  confirm  receipt of items  expressly  required  to be
delivered to the Administrative Agent.

                                      -41-
<PAGE>

            The  Administrative  Agent shall be entitled to rely upon, and shall
not incur any  liability  for relying upon,  any notice,  request,  certificate,
consent, statement,  instrument,  document or other writing believed by it to be
genuine and to have been signed or sent by the proper Person. The Administrative
Agent also may rely upon any  statement  made to it orally or by  telephone  and
believed  by it to be made  by the  proper  Person,  and  shall  not  incur  any
liability for relying thereon.  The Administrative  Agent may consult with legal
counsel (who may be counsel for the Borrower), independent accountants and other
experts  selected  by it, and shall not be liable  for any  action  taken or not
taken by it in accordance  with the advice of any such counsel,  accountants  or
experts.

            The  Administrative  Agent may  perform  any and all its  duties and
exercise  its  rights  and  powers  by or  through  any one or  more  sub-agents
appointed by the  Administrative  Agent. The  Administrative  Agent and any such
sub-agent  may perform any and all its duties and exercise its rights and powers
through their  respective  Related  Parties.  The exculpatory  provisions of the
preceding  paragraphs  shall  apply to any  such  sub-agent  and to the  Related
Parties of the Administrative  Agent and any such sub-agent,  and shall apply to
their  respective  activities in connection  with the  syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.

            Subject  to  the   appointment   and   acceptance   of  a  successor
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by  notifying  the  Lenders and the  Borrower.  Upon any such
resignation,  the Required Lenders shall have the right, with the consent of the
Borrower so long as no Event of Default  shall have  occurred and be  continuing
(such consent not to be unreasonably  withheld),  to appoint a successor.  If no
successor  shall have been so appointed  by the Required  Lenders and shall have
accepted such appointment within 30 days after the retiring Administrative Agent
gives notice of its resignation,  then the retiring Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent which shall be a
bank with an office in New York,  New York,  or an  Affiliate  of any such bank.
Upon the acceptance of its  appointment as  Administrative  Agent hereunder by a
successor,  such  successor  shall  succeed  to and become  vested  with all the
rights, powers,  privileges and duties of the retiring Administrative Agent, and
the  retiring  Administrative  Agent  shall be  discharged  from its  duties and
obligations hereunder.

            The  Administrative  Agent  may be  removed  at any time by a notice
executed by the Required  Lenders and delivered to the Lenders and the Borrower.
Upon any such  removal,  the  Required  Lenders  shall have the right,  with the
consent of the Borrower so long as no Event of Default  shall have  occurred and
be  continuing  (such  consent not to be  unreasonably  withheld),  to appoint a
successor.  If no successor shall have been so appointed by the Required Lenders
and shall have accepted such appointment within 30 days after the removal of the
Administrative  Agent, then the Borrower may appoint a successor  Administrative
Agent  which  shall be a bank  with an  office  in New  York,  New  York,  or an
Affiliate  of  any  such  bank.  Upon  the  acceptance  of  its  appointment  as
Administrative  Agent hereunder by a successor,  such successor shall succeed to
and become  vested with all the  rights,  powers,  privileges  and duties of the
removed   Administrative  Agent.  The  removed  Administrative  Agent  shall  be
discharged  from its duties and obligations  hereunder  effective at the time of
its removal.

                                      -42-
<PAGE>

            The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor  unless  otherwise  agreed
between  the  Borrower  and such  successor.  After the  Administrative  Agent's
resignation or removal hereunder, the provisions of this Article and Section 9.3
shall   continue  in  effect  for  the  benefit  of  such  retiring  or  removed
Administrative  Agent,  its sub-agents and their  respective  Related Parties in
respect of any actions  taken or omitted to be taken by any of them while it was
acting as Administrative Agent.

            Each  Lender  acknowledges  that it has,  independently  and without
reliance  upon the  Administrative  Agent or any other  Lender and based on such
documents  and  information  as it has deemed  appropriate,  made its own credit
analysis  and  decision  to  enter  into  this   Agreement.   Each  Lender  also
acknowledges  that  it  will,   independently  and  without  reliance  upon  the
Administrative  Agent  or any  other  Lender  and  based on such  documents  and
information as it shall from time to time deem appropriate, continue to make its
own  decisions  in  taking or not  taking  action  under or based  upon any Loan
Document,   any  related  agreement  or  any  document  furnished  hereunder  or
thereunder.

ARTICLE 9. Miscellaneous

      Section   9.1.   Notices.   Except  in  the  case  of  notices  and  other
communications  expressly  permitted to be given by  telephone,  all notices and
other  communications  provided  for  herein  shall be in  writing  and shall be
delivered  by  hand  or  overnight  courier  service,  mailed  by  certified  or
registered mail or sent by telecopy, as follows:

            (a) if to the Borrower,  to it at 225 Summit Avenue,  Montvale,  New
Jersey 07645-1523,  Attention of Jon W. Kimmins, Senior Vice President-Treasurer
(Telecopy No. (201) 802-5877);

            (b) if to the Administrative  Agent, to it at One Wall Street,  18th
Floor,  New York,  New York 10286,  Attention of Susan E. Baratta  (Telecopy No.
(212)  635-4659),  with a copy to The Bank of New York, at One Wall Street,  New
York,  New York 10286,  Attention  of:  Howard F.  Bascom  (Telecopy  No.  (212)
635-1483); and

            (c) if to any other Credit Party,  to it at its address (or telecopy
number)  set forth in its  Administrative  Questionnaire,  a copy of  which,  if
requested by the Borrower, shall have been delivered to the Borrower.

Any party hereto may change its address or telecopy number for notices and other
communications  hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.

      Section 9.2.  Waivers;  Amendments.  (a) No failure or delay by any Credit
Party in exercising  any right or power under any Loan Document shall operate as
a waiver thereof,  nor shall any single or partial exercise of any such right or
power, or any abandonment or  discontinuance of steps to enforce such a right or
power,  preclude  any other or further  exercise  thereof or the exercise of any
other right or power.  The rights and remedies of the Credit  Parties

                                      -43-
<PAGE>

under the Loan  Documents are  cumulative and are not exclusive of any rights or
remedies that they would  otherwise have. No waiver of any provision of any Loan
Document or consent to any departure by the Borrower or any Guarantor  therefrom
shall in any event be effective  unless the same shall be permitted by paragraph
(b) of this Section,  and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given.  Without limiting the
generality  of the  foregoing,  the making of a Loan shall not be construed as a
waiver of any  Default,  regardless  of whether  any  Credit  Party may have had
notice or knowledge of such Default at the time.

            (b)  Neither  any Loan  Document  nor any  provision  thereof may be
waived,  amended or modified  except  pursuant to an agreement or  agreements in
writing entered into by the Borrower or the Guarantors,  as applicable,  and the
Required  Lenders or by the Borrower or the Guarantors,  as applicable,  and the
Administrative Agent with the consent of the Required Lenders;  provided that no
such  agreement  shall (i) increase  the  Commitment  of any Lender  without the
written consent of such Lender, (ii) reduce the principal amount of any Loan, or
reduce the rate of interest  thereon  (other  than under  Section  2.10(c)),  or
reduce any fees payable  hereunder,  without the written  consent of each Lender
affected thereby,  (iii) postpone the scheduled date of payment of the principal
amount of any Loan  (except as  provided  in Section  2.4(c)),  or any  interest
thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse
any such payment, or postpone the scheduled date of expiration of any Commitment
(except as provided  in Section  2.4(c)),  without  the written  consent of each
Lender  affected  thereby,  (iv) change Section  2.15(b) or (c) in a manner that
would  alter the pro rata  sharing of  payments  required  thereby  without  the
written  consent  of each  Lender or (v) change  any of the  provisions  of this
Section or the definition of "Required  Lenders" or any other  provision  hereof
specifying  the number or  percentage  of Lenders  required  to waive,  amend or
modify any  rights  hereunder  or make any  determination  or grant any  consent
hereunder,  without the written consent of each Lender; provided,  further, that
no such agreement shall amend,  modify or otherwise  affect the rights or duties
of the  Administrative  Agent hereunder without the prior written consent of the
Administrative Agent.  Notwithstanding the foregoing,  any provision of any Loan
Document may be amended by an agreement in writing  entered into by the Borrower
or the Guarantors,  as applicable,  the Required Lenders and the  Administrative
Agent if (A) by the terms of such  agreement  the  Commitment of each Lender not
consenting  to the  amendment  provided  for  therein  shall  terminate  upon or
simultaneously  with  the  effectiveness  of  such  amendment  and  (B)  upon or
simultaneously  with  the  effectiveness  of such  amendment,  each  Lender  not
consenting  thereto  receives  payment in full of the  principal of and interest
accrued on each Loan made by it and all other amounts owing to it or accrued for
its account under the Loan Documents.

      Section 9.3.  Expenses;  Indemnity;  Damage Waiver. (a) The Borrower shall
pay (i) all reasonable  out-of-pocket  expenses  incurred by the  Administrative
Agent  and  its  Affiliates,   including  the  reasonable   fees,   charges  and
disbursements  of counsel for the  Administrative  Agent, in connection with the
syndication of the credit  facilities  provided for herein,  the preparation and
administration of each Loan Document or any amendments, modifications or waivers
of the provisions thereof (whether or not the transactions  contemplated thereby
shall be consummated),  and (ii) all reasonable  out-of-pocket expenses incurred
by any Credit  Party,  including  the fees,  charges  and  disbursements  of any
counsel for any Credit Party,  in connection

                                      -44-
<PAGE>

with the  enforcement  or protection  of its rights in connection  with the Loan
Documents,   including  its  rights  under  this  Section,  including  all  such
out-of-pocket   expenses   incurred   during  any  workout,   restructuring   or
negotiations in respect of such Loans.

            (b) The Borrower shall indemnify each Credit Party, and each Related
Party  of any of the  foregoing  Persons  (each  such  Person  being  called  an
"Indemnitee")  against,  and hold each  Indemnitee  harmless  from,  any and all
losses,  claims,  damages,  liabilities  and  related  expenses,  including  the
reasonable  fees,  charges and  disbursements of any counsel for any Indemnitee,
incurred by or asserted  against any  Indemnitee  arising out of, in  connection
with,  or as a result of (i) the  execution or delivery of any Loan  Document or
any agreement or instrument contemplated thereby, the performance by the parties
thereto of their  respective  obligations  thereunder or the consummation of the
Transactions or any other transactions  contemplated  thereby,  (ii) any Loan or
the use of the proceeds thereof,  (iii) any  Environmental  Liability related in
any way to the  Borrower  or any of the  Subsidiaries,  or (iv)  any  actual  or
prospective claim,  litigation,  investigation or proceeding  relating to any of
the  foregoing,  whether  based  on  contract,  tort  or any  other  theory  and
regardless  of whether any  Indemnitee  is a party  thereto;  provided that such
indemnity shall not, as to any Indemnitee,  be available to the extent that such
losses, claims, damages,  liabilities or related expenses have resulted from (A)
the gross  negligence  or willful  misconduct  of such  Indemnitee or any of its
Related Parties or (B) any material breach by such Indemnitee of its obligations
as set forth in this Agreement.

            (c) To the extent that the Borrower fails to pay any amount required
to be paid by it to the Administrative  Agent under paragraph (a) or (b) of this
Section,  each Lender severally agrees to pay to the Administrative  Agent, such
Lender's  Applicable  Percentage  (determined as of the time that the applicable
unreimbursed  expense or  indemnity  payment is sought) of such  unpaid  amount;
provided that the  unreimbursed  expense or  indemnified  loss,  claim,  damage,
liability  or related  expense,  as the case may be, was incurred by or asserted
against the Administrative Agent in its capacity as such.

            (d) To the extent  permitted by applicable  law, the Borrower  shall
not assert, and hereby waives,  any claim against any Indemnitee,  on any theory
of liability, for any special,  indirect,  consequential or punitive damages (as
opposed to direct or actual damages) arising out of, in connection with, or as a
result of this Agreement or any agreement or instrument contemplated hereby, the
Transactions, any Loan or the use of the proceeds thereof.

            (e) All amounts  due under this  Section  shall be payable  promptly
after written demand therefor.

      Section 9.4. Successors and Assigns.  (a) The provisions of this Agreement
shall be binding  upon and inure to the benefit of the parties  hereto and their
respective successors and assigns permitted hereby, except that the Borrower may
not assign or  otherwise  transfer  any of its rights or  obligations  hereunder
without the prior written consent of each Credit Party unless such assignment or
transfer is made by the Borrower in  accordance  with Section 6.1 (and any other
attempted  assignment or transfer by the Borrower  without such consent shall be
null and void).  Nothing  in this  Agreement,  expressed  or  implied,  shall be
construed  to confer  upon any Person  (other  than the  parties  hereto,  their
respective  successors and assigns permitted hereby and, to the

                                      -45-
<PAGE>

extent expressly  contemplated hereby, the Related Parties of each Credit Party)
any  legal or  equitable  right,  remedy  or claim  under or by  reason  of this
Agreement.

            (b) Any Lender may assign to one or more  assignees all or a portion
of its rights and obligations  under this Agreement  (including all or a portion
of its  Commitment  and the Loans at the time  owing to it);  provided  that (i)
except in the case of an  assignment  to a Lender or an  Affiliate  of a Lender,
each of the Borrower and the Administrative  Agent must give their prior written
consent to such assignment  (which consent shall not be unreasonably  withheld),
(ii) except in the case of an assignment to a Lender or an Affiliate of a Lender
or an  assignment  of the  entire  remaining  amount of the  assigning  Lender's
Commitment, the amount of the Commitment of the assigning Lender subject to each
such  assignment  (determined as of the date the Assignment and Acceptance  with
respect to such assignment is delivered to the  Administrative  Agent) shall not
be less than $5,000,000 unless each of the Borrower and the Administrative Agent
otherwise consent,  (iii) each partial assignment shall be made as an assignment
of a  proportionate  part of all the assigning  Lender's  rights and obligations
under this  Agreement,  (iv) the parties to each  assignment  shall  execute and
deliver to the Administrative Agent an Assignment and Acceptance, together with,
unless  otherwise  agreed  by  the   Administrative   Agent,  a  processing  and
recordation  fee of $3,500  and (v) the  assignee,  if it shall not be a Lender,
shall deliver to the  Administrative  Agent an Administrative  Questionnaire,  a
copy of which shall, if requested by the Borrower, be delivered to the Borrower;
and provided further that any consent of the Borrower  otherwise  required under
this  paragraph  shall not be required if an Event of Default  under clause (a),
(b),  (g) or (h) of  Article  7 has  occurred  and  is  continuing.  Subject  to
acceptance and recording thereof pursuant to paragraph (d) of this Section, from
and after the effective  date  specified in each  Assignment  and Acceptance the
assignee  thereunder  shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of a
Lender under the Loan Documents,  and the assigning Lender  thereunder shall, to
the extent of the  interest  assigned  by such  Assignment  and  Acceptance,  be
released from its  obligations  under the Loan Documents (and, in the case of an
Assignment  and  Acceptance  covering all of the assigning  Lender's  rights and
obligations  under this Agreement,  such Lender shall cease to be a party hereto
but shall continue to be entitled to the benefits of Sections 2.12,  2.13,  2.14
and 9.3). Any assignment or transfer by a Lender of rights or obligations  under
this  Agreement  that does not comply with this  paragraph  shall be treated for
purposes of this Agreement as a sale by such Lender of a  participation  in such
rights and obligations in accordance with paragraph (e) of this Section.

            (c) The Administrative Agent, acting for this purpose as an agent of
the  Borrower,  shall  maintain  at one of its offices in The City of New York a
copy of each  Assignment and  Acceptance  delivered to it and a register for the
recordation  of the names and addresses of the Lenders,  and the  Commitment of,
and  principal  amount of the Loans owing to, each Lender  pursuant to the terms
hereof from time to time (the "Register").  The entries in the Register shall be
conclusive,  and the Borrower and the Credit Parties may treat each Person whose
name is  recorded  in the  Register  pursuant  to the  terms  hereof as a Lender
hereunder  for all  purposes of this  Agreement,  notwithstanding  notice to the
contrary. The Register shall be available for inspection by the Borrower and any
Lender,  at any  reasonable  time and from  time to time upon  reasonable  prior
notice.

                                      -46-
<PAGE>

            (d) Upon its receipt of a duly  completed  Assignment and Acceptance
executed  by an  assigning  Lender and an  assignee,  the  assignee's  completed
Administrative  Questionnaire  (unless the  assignee  shall  already be a Lender
hereunder),  the processing and  recordation fee referred to in paragraph (b) of
this Section and any written  consent to such  assignment  required by paragraph
(b) of this Section,  the Administrative  Agent shall accept such Assignment and
Acceptance  and record the  information  contained  therein in the Register.  No
assignment  shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.

            (e) Any Lender  may,  without  the  consent of the  Borrower  or the
Administrative Agent, sell participations to one or more banks or other entities
(a  "Participant")  in all or a portion of such Lender's  rights and obligations
under this  Agreement  (including  all or a portion of its  Commitment and Loans
owing to it);  provided  that  (i)  such  Lender's  obligations  under  the Loan
Documents  shall  remain  unchanged,   (ii)  such  Lender  shall  remain  solely
responsible to the other parties hereto for the performance of such  obligations
and (iii) the Borrower and the Credit  Parties shall continue to deal solely and
directly  with  such  Lender  in  connection   with  such  Lender's  rights  and
obligations  under the Loan Documents.  Any agreement or instrument  pursuant to
which a Lender sells such a  participation  shall provide that such Lender shall
retain  the sole  right  to  enforce  the  Loan  Documents  and to  approve  any
amendment,  modification  or  waiver  of any  provision  of any  Loan  document;
provided  that such  agreement or  instrument  may provide that such Lender will
not,  without  the  consent  of  the   Participant,   agree  to  any  amendment,
modification  or waiver  described in the first  proviso to Section  9.2(b) that
affects such Participant. Subject to paragraph (f) of this Section, the Borrower
agrees that each Participant shall be entitled to the benefits of Sections 2.12,
2.13 and 2.14 to the same  extent as if it were a Lender  and had  acquired  its
interest by assignment  pursuant to paragraph (b) of this Section. To the extent
permitted  by law,  each  Participant  also shall be entitled to the benefits of
Section 9.8 as though it were a Lender,  provided such Participant  agrees to be
subject to Section 2.15(c) as though it were a Lender.

            (f) A  Participant  shall not be  entitled  to receive  any  greater
payment  under Section 2.12 or 2.14 than the  applicable  Lender would have been
entitled to receive with respect to the participation  sold to such Participant.
A  Participant  that would be a Foreign  Lender if it were a Lender shall not be
entitled to the  benefits of Section 2.14 unless the Borrower is notified of the
participation  sold to such  Participant and such  Participant  agrees,  for the
benefit of the  Borrower,  to comply  with  Section  2.14(c) as though it were a
Lender.

            (g) Any Lender may at any time pledge or assign a security  interest
in all or any  portion  of  its  rights  under  the  Loan  Documents  to  secure
obligations  of such  Lender,  including  any  pledge  or  assignment  to secure
obligations  to a Federal  Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security  interest;  provided that no such pledge
or  assignment  of a security  interest  shall  release a Lender from any of its
obligations  under the Loan Documents or substitute any such pledgee or assignee
for such Lender as a party  hereto and any  foreclosure  by any such  pledgee or
assignee (other than a Federal Reserve Bank) shall be subject to Section 9.4(b).

                                      -47-
<PAGE>

      Section 9.5.  Survival.  All covenants,  agreements,  representations  and
warranties  made  by  the  Borrower  herein  and in the  certificates  or  other
instruments  delivered in connection with or pursuant to this Agreement shall be
considered  to have been  relied  upon by the  other  parties  hereto  and shall
survive the  execution  and delivery of each Loan Document and the making of any
Loans,  regardless of any  investigation  made by any such other party or on its
behalf  and  notwithstanding  that any  Credit  Party  may have  had  notice  or
knowledge of any Default or incorrect representation or warranty at the time any
credit is  extended  hereunder,  and shall  continue in full force and effect as
long as the  principal of or any accrued  interest on any Loan or any fee or any
other amount  payable under any Loan Document is  outstanding  and unpaid and so
long as the  Commitments  have not  expired or  terminated.  The  provisions  of
Sections 2.12, 2.13, 2.14 and 9.3 and Article 8 shall survive and remain in full
force and effect regardless of the consummation of the transactions contemplated
hereby,  the repayment of the Loans,  and the  Commitments or the termination of
this Agreement or any provision hereof.

      Section 9.6. Counterparts;  Integration; Effectiveness. This Agreement may
be  executed in  counterparts  (and by  different  parties  hereto on  different
counterparts), each of which shall constitute an original, but all of which when
taken  together  shall  constitute a single  contract.  This  Agreement  and any
separate  letter  agreements  with  respect to fees  payable to any Credit Party
constitute the entire contract among the parties  relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral or
written,  relating to the subject matter  hereof.  Except as provided in Section
4.1, this Agreement  shall become  effective when it shall have been executed by
the Administrative  Agent and when the Administrative  Agent shall have received
counterparts  hereof which, when taken together,  bear the signatures of each of
the other parties hereto,  and thereafter shall be binding upon and inure to the
benefit of the  parties  hereto and their  respective  successors  and  assigns.
Delivery of an executed  counterpart  of a signature  page of this  Agreement by
telecopy  shall be effective as delivery of a manually  executed  counterpart of
this Agreement.

      Section 9.7. Severability.  In the event any one or more of the provisions
contained  in this  Agreement  or in any  other  Loan  Document  should  be held
invalid,  illegal or  unenforceable in any respect,  the validity,  legality and
enforceability  of the remaining  provisions  contained herein and therein shall
not in any way be  affected or impaired  thereby (it being  understood  that the
invalidity of a particular  provision in a particular  jurisdiction shall not in
and of itself affect the validity of such provision in any other  jurisdiction).
The parties shall  endeavor in good-faith  negotiations  to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which  comes  as  close  as  possible  to  that  of  the  invalid,   illegal  or
unenforceable provisions.

      Section  9.8.  Right of Setoff.  In addition to any rights and remedies of
the Lenders  provided by law, upon the occurrence of an Event of Default and the
acceleration of the obligations  owing in connection with this Agreement,  or at
any time upon the occurrence and during the  continuance of an Event of Default,
under  clause  (a),  (b),  (g) or (h) of Article 7, each  Lender  shall have the
right,  without  prior notice to the Borrower,  any such notice being  expressly
waived by the Borrower to the extent not prohibited by applicable law, to setoff
and apply  against  any  indebtedness,  whether  matured  or  unmatured,  of the
Borrower to such Lender, any amount owing from such Lender to the Borrower,  at,
or at any time after, the happening of any of the

                                      -48-
<PAGE>

above-mentioned  events.  To the extent not  prohibited by  applicable  law, the
aforesaid  right of setoff may be exercised by such Lender  against the Borrower
or against any trustee in bankruptcy,  custodian, debtor in possession, assignee
for the benefit of creditors,  receiver,  or  execution,  judgment or attachment
creditor of the Borrower, or against anyone else claiming through or against the
Borrower  or such  trustee  in  bankruptcy,  custodian,  debtor  in  possession,
assignee  for the benefit of  creditors,  receiver,  or  execution,  judgment or
attachment  creditor,  notwithstanding  the fact that such right of setoff shall
not have been exercised by such Lender prior to the making,  filing or issuance,
or service upon such Lender of, or of notice of, any such  petition,  assignment
for the benefit of creditors,  appointment or application for the appointment of
a receiver,  or issuance of execution,  subpoena,  order or warrant. Each Lender
agrees  promptly to notify the Borrower and the  Administrative  Agent after any
such setoff and  application  made by such Lender,  provided that the failure to
give such notice shall not affect the validity of such setoff and application.

      Section 9.9. Governing Law;  Jurisdiction;  Consent to Service of Process.
(a) This Agreement shall be construed in accordance with and governed by the law
of the State of New York.

            (b) Each of the Borrower and the Credit Parties  hereby  irrevocably
and unconditionally  submits,  for itself and its property,  to the nonexclusive
jurisdiction  of the Supreme  Court of the State of New York sitting in New York
County and of the United States  District Court of the Southern  District of New
York,  and any  appellate  court from any thereof,  in any action or  proceeding
arising out of or relating to this Agreement or the other Loan Documents, or for
recognition  or  enforcement  of any  judgment,  and each of the parties  hereto
hereby irrevocably and unconditionally  agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent  permitted  by law,  in such  Federal  court.  Each of the parties
hereto agrees that a final  judgment in any such action or  proceeding  shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.  Nothing in this Agreement shall affect any
right that any Credit Party may otherwise have to bring any action or proceeding
relating to this Agreement or the other Loan  Documents  against the Borrower or
its properties, in the courts of any jurisdiction.

            (c) Each of the Borrower and the Credit Parties  hereby  irrevocably
and unconditionally waives, to the fullest extent it may legally and effectively
do so, any objection  which it may now or hereafter  have to the laying of venue
of any suit,  action or proceeding  arising out of or relating to this Agreement
or the other Loan  Documents in any court  referred to in paragraph  (b) of this
Section.  Each of the parties hereto hereby  irrevocably  waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.

            (d) Each party to this Agreement  irrevocably consents to service of
process in the manner  provided  for  notices  in Section  9.1.  Nothing in this
Agreement  will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.

                                      -49-
<PAGE>

      Section 9.10.  WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES,  TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY  IN ANY  LEGAL  PROCEEDING  DIRECTLY  OR  INDIRECTLY  ARISING  OUT OF OR
RELATING TO THIS  AGREEMENT OR THE  TRANSACTIONS  CONTEMPLATED  HEREBY  (WHETHER
BASED ON CONTRACT,  TORT OR ANY OTHER  THEORY).  EACH PARTY HERETO (A) CERTIFIES
THAT NO  REPRESENTATIVE,  AGENT OR ATTORNEY OF ANY OTHER PARTY HAS  REPRESENTED,
EXPRESSLY  OR  OTHERWISE,  THAT SUCH  OTHER  PARTY  WOULD  NOT,  IN THE EVENT OF
LITIGATION,  SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)  ACKNOWLEDGES  THAT IT
AND THE OTHER PARTIES  HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

      Section  9.11.  Headings.  Article and Section  headings  and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement  and  shall  not  affect  the   construction  of,  or  be  taken  into
consideration in interpreting, this Agreement.

      Section  9.12.  Confidentiality.  Each Credit Party agrees to maintain the
confidentiality  of the Information (as defined below),  except that Information
may be disclosed (a) to its and its Affiliates' directors,  officers,  employees
and agents,  including  accountants,  legal counsel and other advisors (it being
understood  that the Persons to whom such disclosure is made will be informed of
the  confidential  nature  of such  Information  and  instructed  to  keep  such
Information  confidential),  (b)  to the  extent  requested  by  any  regulatory
authority,  (c) to the extent  required by applicable  laws or regulations or by
any  subpoena  or  similar  legal  process,  (d) to any other  party to any Loan
Document,  (e) in  connection  with the exercise of any remedies  under any Loan
Document or any suit, action or proceeding  relating to any Loan Document or the
enforcement  of  rights  thereunder,  (f)  subject  to an  agreement  containing
provisions  substantially the same as those of this Section,  to any assignee of
or Participant in, or any prospective  assignee of or Participant in, any of its
rights or obligations under this Agreement, (g) with the consent of the Borrower
or (h) to the extent such Information (i) becomes publicly  available other than
as a result of a breach of this Section or (ii) becomes  available to any Credit
Party on a nonconfidential basis from a source other than the Borrower or any of
its  Affiliates.  For the  purposes  of this  Section,  "Information"  means all
confidential  information received from the Borrower relating to the Borrower or
its business,  other than any such  information  that is available to any Credit
Party on a nonconfidential basis prior to disclosure by the Borrower. Any Person
required to maintain  the  confidentiality  of  Information  as provided in this
Section shall be  considered  to have  complied with its  obligation to do so if
such  Person  has   exercised   the  same   degree  of  care  to  maintain   the
confidentiality  of such  Information  as such  Person  would  accord to its own
confidential information.

      Section 9.13. Interest Rate Limitation. Notwithstanding anything herein to
the contrary,  if at any time the interest rate applicable to any Loan, together
with all fees,  charges and other  amounts which are treated as interest on such
Loan under applicable law (collectively the "charges"), shall exceed the maximum
lawful rate (the "maximum  rate") which may be contracted for,  charged,  taken,
received  or  reserved  by the  Lender  holding  such  Loan in  accordance  with
applicable law, the rate of interest  payable in respect of such Loan hereunder,

                                      -50-
<PAGE>

together with all charges  payable in respect  thereof,  shall be limited to the
maximum rate and, to the extent lawful, the interest and charges that would have
been  payable in  respect  of such Loan but were not  payable as a result of the
operation  of this  Section  shall be  cumulated  and the  interest  and charges
payable to such Lender in respect of other Loans or periods  shall be  increased
(but not above the maximum rate therefor) until such cumulated amount,  together
with  interest  thereon  at the  Federal  Funds  Effective  Rate to the  date of
repayment, shall have been received by such Lender.

                  [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

                                      -51-
<PAGE>

                                TOYS "R" US, INC.
                            364 DAY CREDIT AGREEMENT

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

                                    TOYS "R" US INC.

                                    By: ________________________________________

                                    Name: ______________________________________

                                    Title: _____________________________________

<PAGE>

                                TOYS "R" US, INC.
                            364 DAY CREDIT AGREEMENT

                                    THE BANK OF NEW  YORK,  individually  and as
                                    Administrative Agent

                                    By: ________________________________________

                                    Name: ______________________________________

                                    Title: _____________________________________

<PAGE>

                                TOYS "R" US, INC.
                            364 DAY CREDIT AGREEMENT

                                    CITIBANK,    N.A.,   individually   and   as
                                    Co-Syndication Agent

                                    By: ________________________________________

                                    Name: ______________________________________

                                    Title: _____________________________________

<PAGE>

                                TOYS "R" US, INC.
                            364 DAY CREDIT AGREEMENT

                                    J.P.  MORGAN  CHASE,   individually  and  as
                                    Co-Syndication Agent

                                    By: ________________________________________

                                    Name: ______________________________________

                                    Title: _____________________________________

<PAGE>

                                TOYS "R" US, INC.
                            364 DAY CREDIT AGREEMENT

                                    CREDIT SUISSE FIRST BOSTON, individually and
                                    as Co-Documentation Agent

                                    By: ________________________________________

                                    Name: ______________________________________

                                    Title: _____________________________________

<PAGE>

                                TOYS "R" US, INC.
                            364 DAY CREDIT AGREEMENT

                                    FIRST UNION NATIONAL BANK,  individually and
                                    as Co-Documentation Agent

                                    By: ________________________________________

                                    Name: ______________________________________

                                    Title: _____________________________________

<PAGE>

                                TOYS "R" US, INC.
                            364 DAY CREDIT AGREEMENT

                                    THE DAI-ICHI KANGYO BANK, LTD., individually
                                    and as Co-Documentation Agent

                                    By: ________________________________________

                                    Name: ______________________________________

                                    Title: _____________________________________

<PAGE>

                                TOYS "R" US, INC.
                            364 DAY CREDIT AGREEMENT

                                    SOCIETE   GENERALE,   individually   and  as
                                    Co-Documentation Agent

                                    By: ________________________________________

                                    Name: ______________________________________

                                    Title: _____________________________________

<PAGE>

                                TOYS "R" US, INC.
                            364 DAY CREDIT AGREEMENT

                                    WELLS FARGO BANK, NATIONAL ASSOCIATION

                                    By: ________________________________________

                                    Name: ______________________________________

                                    Title: _____________________________________

<PAGE>

                                TOYS "R" US, INC.
                            364 DAY CREDIT AGREEMENT

                                    FIRSTAR BANK, NA

                                    By: ________________________________________

                                    Name: ______________________________________

                                    Title: _____________________________________

<PAGE>

                                TOYS "R" US, INC.
                            364 DAY CREDIT AGREEMENT

                                    BANK ONE, NA (MAIN OFFICE CHICAGO)

                                    By: ________________________________________

                                    Name: ______________________________________

                                    Title: _____________________________________

<PAGE>

                                TOYS "R" US, INC.
                            364 DAY CREDIT AGREEMENT

                                    FLEET NATIONAL BANK

                                    By: ________________________________________

                                    Name: ______________________________________

                                    Title: _____________________________________

<PAGE>

                                TOYS "R" US, INC.
                            364 DAY CREDIT AGREEMENT

                                    THE FIFTH THIRD BANK

                                    By: ________________________________________

                                    Name: ______________________________________

                                    Title: _____________________________________Exhibit 4 (viii)

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

                                 LEASE AGREEMENT

                         Dated as of September 26, 2001

                                     between

                      FIRST UNION DEVELOPMENT CORPORATION,

                                    as Lessor

                                       and

                               TOYS "R" US, INC.,

                                    as Lessee

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

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

<PAGE>

                                TABLE OF CONTENTS

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       i
<PAGE>

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

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

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

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

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

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

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

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

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

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

                                       ii
<PAGE>

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

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

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

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

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

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

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

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

EXHIBITS
--------

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

                                      iii
<PAGE>

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

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

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

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

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

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

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

                                    ARTICLE I

      1.1 Definitions.

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

<PAGE>

      1.2 Interpretation.

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

                                   ARTICLE II

      2.1 Property.

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

      2.2 Lease Term.

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

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

      2.3 Title.

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

                                       2
<PAGE>

      2.4 Lease Supplement.

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

                                   ARTICLE III

      3.1 Rent.

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

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

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

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

      3.2 Payment of Basic Rent.

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

      3.3 Supplemental Rent.

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

                                       3
<PAGE>

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

      3.4 Performance on a Non-Business Day.

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

      3.5 Rent Payment Provisions.

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

                                       4
<PAGE>

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

      3.6 Payment to Agent.

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

                                   ARTICLE IV

      4.1 Taxes; Utility Charges.

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

                                    ARTICLE V

      5.1 Quiet Enjoyment.

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

                                       5
<PAGE>

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

                                   ARTICLE VI

      6.1 Net Lease.

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

      6.2 No Termination or Abatement.

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

                                       6
<PAGE>

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

                                   ARTICLE VII

      7.1 Ownership of the Property.

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

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

                                       7
<PAGE>

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

                                  ARTICLE VIII

      8.1 Condition of the Property.

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

                                       8
<PAGE>

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

      8.2 Possession and Use of the Property.

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

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

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

                                       9
<PAGE>

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

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

      8.3 Integrated Property.

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

                                   ARTICLE IX

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

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

                                       10
<PAGE>

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

                                    ARTICLE X

      10.1 Maintenance and Repair; Return.

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

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

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

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

                                       11
<PAGE>

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

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

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

      10.2 Environmental Inspection.

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

                                   ARTICLE XI

      11.1 Modifications.

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

                                       12
<PAGE>

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

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

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

                                       13
<PAGE>

                                   ARTICLE XII

      12.1 Warranty of Title.

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

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

                                       14
<PAGE>

                                  ARTICLE XIII

      13.1 Permitted Contests Other Than in Respect of Indemnities.

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

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

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

                                   ARTICLE XIV

      14.1 Public Liability and Workers' Compensation Insurance.

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

                                       15
<PAGE>

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

      14.2 Permanent Hazard and Other Insurance.

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

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

                                       16
<PAGE>

      14.3 Coverage.

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

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

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

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

                                       17
<PAGE>

      14.4 Policies.

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

      14.5 Insurance Coverage During Construction Period.

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

                                   ARTICLE XV

      15.1 Casualty and Condemnation.

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

                                       18
<PAGE>

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

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

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

                                       19
<PAGE>

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

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

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

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

                                       20
<PAGE>

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

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

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

      15.2 Environmental Matters.

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

                                       21
<PAGE>

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

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

      15.3 Notice of Environmental Matters.

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

                                       22
<PAGE>

                                   ARTICLE XVI

      16.1 Termination Upon Certain Events.

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

      16.2 Procedures.

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

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

                                  ARTICLE XVII

      17.1 Lease Events of Default.

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

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

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

                                       23
<PAGE>

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

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

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

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

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

                                       24
<PAGE>

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

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

            (i) [Reserved];

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

            (k) [Reserved];

            (l) [Reserved];

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

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

                                       25
<PAGE>

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

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

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

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

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

      17.2 Surrender of Possession.

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

                                       26
<PAGE>

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

      17.3 Reletting.

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

      17.4 Damages.

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

                                       27
<PAGE>

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

      17.5 Power of Sale.

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

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

      17.6 Final Liquidated Damages.

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

                                       28
<PAGE>

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

      17.7 Environmental Costs.

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

      17.8 Waiver of Certain Rights.

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

      17.9 Assignment of Rights Under Contracts.

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

      17.10 Remedies Cumulative.

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

                                       29
<PAGE>

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

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

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

                                  ARTICLE XVIII

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

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

                                   ARTICLE XIX

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

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

                                       30
<PAGE>

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

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

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

                                   ARTICLE XX

      20.1 Purchase Option or Sale Option-General Provisions.

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

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

                                       31
<PAGE>

      20.2 Lessee Purchase Option.

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

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

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

      20.3 Third Party Sale Option.

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

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

                                       32
<PAGE>

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

                                   ARTICLE XXI

      21.1 Subdivision and Sale of Excess Land.

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

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

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

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

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

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

                                       33
<PAGE>

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

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

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

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

                                  ARTICLE XXII

      22.1 Sale Procedure.

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

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

                                       34
<PAGE>

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

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

                                       35
<PAGE>

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

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

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

      22.2 Application of Proceeds of Sale.

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

                                       36
<PAGE>

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

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

            (c) THIRD, to Lessee.

      22.3 Indemnity for Excessive Wear.

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

      22.4 Appraisal Procedure.

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

                                       37
<PAGE>

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

      22.5 Certain Obligations Continue.

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

                                  ARTICLE XXIII

      23.1 Holding Over.

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

                                       38
<PAGE>

                                  ARTICLE XXIV

      24.1 Risk of Loss.

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

                                   ARTICLE XXV

      25.1 Assignment.

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

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

      25.2 Subleases.

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

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

                                       39
<PAGE>

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

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

                                  ARTICLE XXVI

      26.1 No Waiver.

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

                                  ARTICLE XXVII

      27.1 Acceptance of Surrender.

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

      27.2 No Merger of Title.

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

                                       40
<PAGE>

                                 ARTICLE XXVIII

      28.1 [Reserved].

                                  ARTICLE XXIX

      29.1 Notices.

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

                                   ARTICLE XXX

      30.1 Miscellaneous.

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

      30.2 Amendments and Modifications.

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

      30.3 Successors and Assigns.

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

      30.4 Headings and Table of Contents.

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

      30.5 Counterparts.

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

                                       41
<PAGE>

      30.6 GOVERNING LAW.

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

      30.7 Calculation of Rent.

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

      30.8 Memoranda of Lease and Lease Supplement.

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

      30.9 Allocations between the Lenders and Lessor.

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

      30.10 Limitations on Recourse.

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

                                       42
<PAGE>

      30.11 WAIVERS OF JURY TRIAL.

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

      30.12 Exercise of Lessor Rights.

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

      30.13 SUBMISSION TO JURISDICTION; VENUE.

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

      30.14 USURY SAVINGS PROVISION.

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

                                       43
<PAGE>

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

      30.15 Restriction On Collateralization.

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

                            [signature pages follow]

                                       44
<PAGE>

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

                                                FIRST UNION DEVELOPMENT
                                                CORPORATION, as Lessor

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

                                                TOYS "R" US, INC., as Lessee

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

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

FIRST UNION NATIONAL BANK,
as the Agent

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

<PAGE>

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

                                             FIRST UNION DEVELOPMENT
                                             CORPORATION, as Lessor

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

                                             TOYS "R" US, INC., as Lessee

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

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

FIRST UNION NATIONAL BANK,
as the Agent

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

<PAGE>

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

                             LEASE SUPPLEMENT NO. 1

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

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

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

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

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

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

<PAGE>

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

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

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

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

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

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

                                       2
<PAGE>

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

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

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

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

                                       3
<PAGE>

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

                                            FIRST UNION DEVELOPMENT
                                            CORPORATION, as Lessor

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

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

                                            TOYS "R" US, INC., as Lessee

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

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

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

                                            FIRST UNION NATIONAL BANK, as the
                                            Agent

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

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

<PAGE>

                                   SCHEDULE 1
                            TO LEASE SUPPLEMENT NO. 1

                      (Description of the Leased Property)

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

<PAGE>

                                  SCHEDULE 1-A
                            TO LEASE SUPPLEMENT NO. 1

                                   (Equipment)

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

<PAGE>

                                  SCHEDULE 1-B
                            TO LEASE SUPPLEMENT NO. 1

                                 (Improvements)

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

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

<PAGE>

                                  SCHEDULE 1-C
                            TO LEASE SUPPLEMENT NO. 1

                                     (Land)

<PAGE>

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

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

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

                                                        Space above this line
                                                        for Recorder's use

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

                          MEMORANDUM OF LEASE AGREEMENT
                                       AND
                             LEASE SUPPLEMENT NO. 1

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

                                   WITNESSETH:

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

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

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

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

<PAGE>

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

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

      3. Tax Payer Numbers.

         Lessor's tax payer number:  56-1610288.

         Lessee's tax payer number:  22-3260693.

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

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

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

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

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

                                       2
<PAGE>

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

                                     LESSOR:

                                     FIRST UNION DEVELOPMENT CORPORATION

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

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

                                     LESSEE:

                                     TOYS "R" US, INC.

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

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

<PAGE>

STATE OF NORTH CAROLINA:
                       SS
COUNTY OF MECKLENBURG:

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

      WITNESSETH my hand and seal.

                                            ____________________________________
                                            Notary Public

My Commission Expires:_______________

<PAGE>

STATE OF ___________________________________:
                                            SS
COUNTY OF  _________________________________:

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

      WITNESSETH my hand and seal.

                                            ____________________________________
                                            Notary Public

My Commission Expires:_______________
<PAGE>

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

                            (Description of Property)

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