Document:

Exhibit 10.7

                                                                  CONFORMED COPY

                           REVOLVING CREDIT AGREEMENT

                          dated as of December 28, 2000

                                      among

                   KANEB PIPE LINE OPERATING PARTNERSHIP, L.P.
                                   as Borrower

                         KANEB PIPE LINE PARTNERS, L.P.
                                     as KPP

                   THE LENDERS FROM TIME TO TIME PARTY HERETO

                                       and

                                  SUNTRUST BANK
                             as Administrative Agent

                    SUNTRUST EQUITABLE SECURITIES CORPORATION
                          as Arranger and Book Manager

                                 BANK ONE, N.A.
                             as Documentation Agent

                                FLEET BANK BOSTON
                              as Syndication Agent

                              BANK OF AMERICA, N.A.
                            as Senior Managing Agent

<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                              Page
Article I
<S>      <C>                                                                                                   <C>
         DEFINITIONS; CONSTRUCTION
         Section 1.1.Definitions..................................................................................1
         Section 1.2.Classifications of Loans and Borrowings.....................................................19
         Section 1.3.Accounting Terms and Determination..........................................................19
         Section 1.4.Terms Generally.............................................................................19

Article II
         AMOUNT AND TERMS OF THE COMMITMENTS
         Section 2.1.The Revolving Credit Facility...............................................................20
         Section 2.2.The Loans...................................................................................20
         Section 2.3.Procedure for Borrowings....................................................................20
         Section 2.4.Funding of Borrowings.......................................................................21
         Section 2.5.Interest Elections..........................................................................21
         Section 2.6.Reduction and Termination of Commitments....................................................22
         Section 2.7.Repayment of Loans..........................................................................23
         Section 2.8.Evidence of Indebtedness....................................................................23
         Section 2.9.Prepayments.................................................................................23
         Section 2.10.Interest on Loans..........................................................................24
         Section 2.11.Fees.......................................................................................25
         Section 2.12.Computation of Interest and Fees...........................................................25
         Section 2.13.Inability to Determine Interest Rates......................................................25
         Section 2.14.Illegality.................................................................................25
         Section 2.15.Increased Costs............................................................................26
         Section 2.16.Funding Indemnity..........................................................................27
         Section 2.17.Taxes......................................................................................27
         Section 2.18.Payments Generally; Pro Rata Treatment; Sharing of Set-offs................................29
         Section 2.19.Mitigation of Obligations; Replacement of Lenders..........................................30

Article III
         CONDITIONS PRECEDENT TO LOANS
         Section 3.1.Conditions To Effectiveness.................................................................31
         Section 3.2.Each Borrowing..............................................................................32
         Section 3.3.Post Closing................................................................................33
         Section 3.4.Delivery of Documents.......................................................................33

Article IV
         REPRESENTATIONS AND WARRANTIES
         Section 4.1.Existence; Power............................................................................33
         Section 4.2.Organizational Power; Authorization; Enforceability.........................................33
         Section 4.3.Governmental Approvals; No Conflicts........................................................33
         Section 4.4.Financial Statements........................................................................34
         Section 4.5.Litigation and Environmental Matters........................................................34
         Section 4.6.Compliance with Laws and Agreements.........................................................35
         Section 4.7.Investment Company Act, Etc.................................................................35
         Section 4.8.Taxes.......................................................................................35
         Section 4.9.Margin Regulations..........................................................................35
         Section 4.10.ERISA......................................................................................35
         Section 4.11.Ownership of Property......................................................................36
         Section 4.12.Disclosure.................................................................................36
         Section 4.13.Labor Relations............................................................................36
         Section 4.14.Acquisition Agreement......................................................................36
         Section 4.15.Subsidiaries, Significant Affiliates and Guarantors........................................37
         Section 4.16.Liens......................................................................................37

Article V
         AFFIRMATIVE COVENANTS
         Section 5.1.Financial Statements and Other Information..................................................37
         Section 5.2.Notices of Material Events..................................................................38
         Section 5.3.Existence; Conduct of Business..............................................................39
         Section 5.4.Compliance with Laws, Etc...................................................................39
         Section 5.5.Payment of Obligations......................................................................39
         Section 5.6.Books and Records...........................................................................39
         Section 5.7.Visitation, Inspection, Etc.................................................................40
         Section 5.8.Maintenance of Properties; Insurance........................................................40
         Section 5.9.Use of Proceeds.............................................................................40
         Section 5.10.Additional Subsidiaries....................................................................40

Article VI
         FINANCIAL COVENANTS
         Section 6.1.Funded Debt to EBITDA.......................................................................41
         Section 6.2.Consolidated EBITDA to Consolidated Interest Expense........................................41
         Section 6.3.Consolidated Net Worth......................................................................41

Article VII
         NEGATIVE COVENANTS
         Section 7.1.Indebtedness................................................................................41
         Section 7.2.Negative Pledge.............................................................................42
         Section 7.3.Fundamental Changes.........................................................................42
         Section 7.4.Investments, Loans, Etc.....................................................................43
         Section 7.5.Restricted Payments.........................................................................44
         Section 7.6.Sale of Assets..............................................................................44
         Section 7.7.Transactions with Affiliates................................................................44
         Section 7.8.Restrictive Agreements......................................................................44
         Section 7.9.Sale and Leaseback Transactions.............................................................45
         Section 7.10.Hedging Agreements.........................................................................45
         Section 7.11.Amendment to Material Documents............................................................45
         Section 7.12.Accounting Changes.........................................................................45

Article VIII
         KPP GUARANTEe
         Section 8.1.Guarantee...................................................................................46
         Section 8.2.Guaranteed Obligations Not Waived...........................................................46
         Section 8.3.Guarantee of Payment........................................................................46
         Section 8.4.No Discharge or Diminishment of Guarantee...................................................47
         Section 8.5.Defenses of Borrower Waived.................................................................47
         Section 8.6.Agreement to Pay; Subordination.............................................................47
         Section 8.7.Information.................................................................................48
         Section 8.8.Representations and Warranties..............................................................48
         Section 8.9.Termination.................................................................................48

Article IX
         EVENTS OF DEFAULT
         Section 9.1.Events of Default...........................................................................48

Article X
         THE ADMINISTRATIVE AGENT
         Section 10.1.Appointment of Administrative Agent........................................................51
         Section 10.2.Nature of Duties of Administrative Agent...................................................51
         Section 10.3.Lack of Reliance on the Administrative Agent...............................................52
         Section 10.4.Certain Rights of the Administrative Agent.................................................52
         Section 10.5.Reliance by Administrative Agent...........................................................52
         Section 10.6.The Administrative Agent in its Individual Capacity........................................52
         Section 10.7.Successor Administrative Agent.............................................................53
         Section 10.8.Authorization to Execute other Loan Documents..............................................53

Article XI
         MISCELLANEOUS
         Section 11.1.Notices....................................................................................54
         Section 11.2.Waiver; Amendments.........................................................................55
         Section 11.3.Expenses; Indemnification..................................................................56
         Section 11.4.Successors and Assigns.....................................................................57
         Section 11.5.Governing Law; Jurisdiction; Consent to Service of Process.................................60
         Section 11.6.WAIVER OF JURY TRIAL.......................................................................60
         Section 11.7.Right of Setoff............................................................................61
         Section 11.8.Counterparts; Integration..................................................................61
         Section 11.9.Survival...................................................................................61
         Section 11.10.Severability..............................................................................62
         Section 11.11.Confidentiality...........................................................................62
         Section 11.12.Interest Rate Limitation..................................................................62

</TABLE>

Schedules

       Schedule I           -       Applicable Margin and Applicable Percentage
       Schedule II          -       Existing Indebtedness
       Schedule 4.5         -       Environmental Matters
       Schedule 4.15        -       Subsidiaries
       Schedule 7.2         -       Existing Liens

Exhibits

       Exhibit A            -       Form of Note
       Exhibit B            -       Form of Assignment and Acceptance
       Exhibit C            -       Form of Subsidiary Guarantee Agreement
       Exhibit D            -       Form of Notice of Borrowing
       Exhibit E            -       Form of Continuation/Conversion
       Exhibit F            -       Form of Opinion

<PAGE>

                           REVOLVING CREDIT AGREEMENT

         THIS REVOLVING CREDIT  AGREEMENT (this  Agreement") is made and entered
into  as  of  December  28,  2000,  by  and  among  KANEB  PIPE  LINE  OPERATING
PARTNERSHIP,  L.P., a Delaware limited partnership (the "Borrower"),  KANEB PIPE
LINE PARTNERS, L.P., a Delaware limited partnership ("KPP"), the banks and other
financial  institutions  from time to time  party  hereto  (the  "Lenders")  and
SUNTRUST  BANK,  in its  capacity as  Administrative  Agent for the Lenders (the
"Administrative Agent").

                              W I T N E S S E T H:

         WHEREAS,  the  Borrower  has  requested  that the  Lenders  establish a
$275,000,000 revolving credit facility;

         WHEREAS,  subject  to  the  terms  and  conditions  of  this  Agreement
(including,  without  limitation,  the guaranty and other  agreements of KPP set
forth  herein),  the Lenders to the extent of their  respective  Commitments  as
defined  herein,  are willing  severally to establish  the  requested  revolving
credit facility for the Borrower.

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
covenants   herein   contained,   the   Borrower,   KPP,  the  Lenders  and  the
Administrative Agent agree as follows:

DEFINITIONS; CONSTRUCTION
         Definitions.
         In addition to the other terms defined herein, the following terms used
herein shall have the meanings  herein  specified  (to be equally  applicable to
both the singular and plural forms of the terms defined):

                  "Acquisition  Agreement"  shall mean the  Securities  Purchase
         Agreement,  dated September 22, 2000, among KPP, Shore Terminals L.L.C.
         and the Sellers named therein.

                  "Additional Debt" shall mean  Indebtedness  issued or incurred
         by KPP or any Significant  Affiliate after the date hereof,  other than
         (i)  Indebtedness  under this  Agreement,  (ii) Permitted  Non-Recourse
         Debt,  (iii)  Indebtedness in the aggregate  principal  amount of up to
         $30,000,000 of ST Linden,  L.L.C.,  or (iv)  Indebtedness of KPP or any
         Guarantor  in the  aggregate  principal  amount  of up to  $200,000,000
         issued  pursuant to a public offering  registered  under the Securities
         Act of 1933, as amended.

                  "Adjusted LIBO Rate" shall mean, with respect to each Interest
         Period  for a  Eurodollar  Borrowing,  the rate per annum  obtained  by
         dividing (i) LIBOR for such Interest Period by (ii) a percentage  equal
         to 1.00 minus the Eurodollar Reserve Percentage.

                  "Administrative Agent" shall have the meaning set forth in the
         opening paragraph hereof.

                  "Administrative  Questionnaire"  shall mean,  with  respect to
         each Lender,  an  administrative  questionnaire in the form prepared by
         the Administrative Agent and submitted to the Administrative Agent duly
         completed by such Lender.

                  "Affiliate"  shall mean,  as to any Person,  any other  Person
         that  directly,  or  indirectly  through  one or  more  intermediaries,
         Controls,  is  Controlled  by, or is under common  Control  with,  such
         Person.

                  "Aggregate   Commitments"   shall  mean,   collectively,   all
         Commitments of all Lenders at any time outstanding.

                  "Applicable  Lending  Office" shall mean,  for each Lender and
         for each Type of Loan,  the  "Lending  Office"  of such  Lender  (or an
         Affiliate  of such  Lender)  designated  for  such  Type of Loan in the
         Administrative  Questionnaire  submitted  by such  Lender or such other
         office of such Lender (or an  Affiliate  of such Lender) as such Lender
         may from  time to time  specify  to the  Administrative  Agent  and the
         Borrower  as the  office by which its Loans of such Type are to be made
         and maintained.

                  "Applicable   Margin"  shall  mean  a  percentage   per  annum
         determined  (i) until the date on which  any  Reference  Party has been
         assigned a Credit  Rating,  by  reference  to the  applicable  ratio of
         Consolidated  Funded Debt to Consolidated EBITDA in effect on such date
         as set forth on  Schedule I and (ii) on and after the date on which any
         Reference Party has been assigned a Credit Rating,  by reference to the
         Reference  Rating(s)  then  in  effect  as set  forth  on  Schedule  I;
         provided, that (A) any change in the Applicable Margin resulting from a
         change in the ratio of Consolidated  Funded Debt to Consolidated EBITDA
         shall be  effective  on the third day after  which KPP is  required  to
         deliver the financial  statements required by Section 5.1(a) or (b) and
         the  compliance  certificate  required by Section  5.1(c),  and (B) any
         change  in  the  Applicable  Margin  resulting  from  a  change  in any
         Reference  Rating shall be effective on the day on which the applicable
         rating agency changes its rating and shall continue until the day prior
         to the day that a further change becomes  effective;  provided further,
         that if, at any time that the Applicable  Margin is to be determined by
         reference  to the ratio of  Consolidated  Funded  Debt to  Consolidated
         EBITDA,  KPP shall have failed to deliver the financial  statements and
         certificate  described in clause (A) above, the Applicable Margin shall
         be at  Level  IV  until  such  time as such  financial  statements  and
         certificate are delivered, at which time the Applicable Margin shall be
         determined as provided  above.  Notwithstanding  the foregoing,  at all
         times from the date hereof until date six months  following the date of
         this Agreement,  the Applicable Margin with respect to Eurodollar Loans
         shall be the greater of (x) the Applicable Margin  determined  pursuant
         to the foregoing provisions and (y) 0.75% per annum.

                  "Applicable   Percentage"  shall  mean  with  respect  to  the
         commitment fee a percentage per annum  determined (i) until the date on
         which  any  Reference  Party  has been  assigned  a Credit  Rating,  by
         reference  to the  applicable  ratio  of  Consolidated  Funded  Debt to
         Consolidated  EBITDA in effect on such date as set forth on  Schedule I
         and (ii) on and after the date on which  any  Reference  Party has been
         assigned a Credit Rating, by reference to the Reference  Rating(s) then
         in effect as set forth on Schedule I; provided,  that (A) any change in
         the  Applicable  Percentage  resulting  from a change  in the  ratio of
         Consolidated  Funded Debt to Consolidated  EBITDA shall be effective on
         the third day after  which KPP is  required  to deliver  the  financial
         statements  required  by  Section  5.1(a)  or (b)  and  the  compliance
         certificate  required  by  Section  5.1(c),  and (B) any  change in the
         Applicable  Percentage  resulting from a change in any Reference Rating
         shall be effective  on the day on which the  applicable  rating  agency
         changes  its rating and shall  continue  until the day prior to the day
         that a further change becomes effective;  provided, further, that if at
         any time KPP shall have failed to deliver the financial  statements and
         certificate  described in clause (A) above,  the Applicable  Percentage
         shall be at Level IV until such time as such  financial  statements and
         certificate  are  delivered,  at which time the  Applicable  Percentage
         shall be determined as provided above.  Notwithstanding  the foregoing,
         at all times from the date hereof  until the date six months  following
         the date of this  Agreement,  the  Applicable  Percentage  shall be the
         greater  of  (x)  the  Applicable  Margin  determined  pursuant  to the
         foregoing provisions and (y) 0.25% per annum.

                  "Asset  Disposition"  shall mean,  with  respect to KPP or any
         Significant Affiliate, any sale, transfer,  conveyance,  lease or other
         disposition   (including   by   way   of   merger,   consolidation   or
         sale-leaseback)  by KPP or  such  Significant  Affiliate  to any  other
         Person  (other  than  by  any  Person  to KPP  or a  Guarantor  or by a
         Significant Affiliate to any other Significant Affiliate) of any assets
         of KPP or such Significant  Affiliate  (including,  without limitation,
         any Equity Interests owned by KPP or such Significant  Affiliate).  The
         term  "Asset   Disposition"  shall  not  include  (i)  dispositions  of
         inventory in the  ordinary  course of business,  (ii)  dispositions  of
         other assets in the ordinary  course of business having a Diluted Value
         of not more than $25,000,000 in the aggregate during any fiscal year of
         KPP and not more than $50,000,000 in the aggregate from the date hereof
         until the date three years following the date of this Agreement,  (iii)
         dispositions  of assets the proceeds of which are  reinvested  in other
         assets  used by or  useful  to KPP or  such  Significant  Affiliate  in
         conducting   its  customary   business  if  (A)  a  binding   purchase,
         subscription  or similar  agreement  relating to such  reinvestment  is
         entered  into within 60 days after the receipt of all or  substantially
         all of the cash  proceeds from the  disposition  of such assets and (B)
         the Net Cash Proceeds from such  disposition  are so reinvested  within
         120 days after the receipt of such cash  proceeds,  (iv) the grant of a
         Lien by KPP or any  Significant  Affiliate  in any  assets  securing  a
         borrowing by, or  contractual  performance  obligation  of, KPP or such
         Significant Affiliate otherwise permitted under this Agreement, and (v)
         dispositions   of  Equity   Interests  in  connection  with  directors'
         qualifying shares or comparable Equity Interests.

                  "Assignment  and  Acceptance"  shall  mean an  assignment  and
         acceptance  entered into by a Lender and an assignee  (with the consent
         of any party the consent of which is required by Section  11.4(b))  and
         accepted by the Administrative Agent, in the form of Exhibit B attached
         hereto or any other form approved by the Administrative Agent.

                  "Base  Rate"  shall  mean the higher of (i) the per annum rate
         which the Administrative  Agent publicly announces from time to time to
         be its prime lending rate, as in effect from time to time, and (ii) the
         Federal  Funds Rate as in effect from time to time plus one-half of one
         percent  (0.50%).  The  Administrative  Agent's prime lending rate is a
         reference  rate and does not  necessarily  represent the lowest or best
         rate charged to customers. The Administrative Agent may make commercial
         loans or  other  loans at rates  of  interest  at,  above or below  the
         Administrative   Agent's  prime  lending  rate.   Each  change  in  the
         Administrative  Agent's prime lending rate shall be effective  from and
         including  the  date  such  change  is  publicly   announced  as  being
         effective.

                  "Borrower"   shall  have  the  meaning  in  the   introductory
         paragraph hereof.

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

                  "Business  Day" shall mean (i) any day other than a  Saturday,
         Sunday or other day on which commercial  banks in Atlanta,  Georgia and
         New York,  New York are authorized or required by law to close and (ii)
         if such day  relates  to a  Borrowing  of, a payment or  prepayment  of
         principal  or  interest  on, a  conversion  of or into,  or an Interest
         Period for, a  Eurodollar  Loan or a notice with  respect to any of the
         foregoing,  any day on which  dealings in Dollars are carried on in the
         London interbank market.

                  "Capital  Lease  Obligations"  of any  Person  shall  mean all
         obligations of such Person to pay rent or other amounts under any lease
         (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.

                  "Change in Control"  shall mean the  occurrence of one or more
         of the  following  events:  (i) any  sale,  lease,  exchange  or  other
         transfer (in a single transaction or a series of related  transactions)
         of all or substantially all of the assets of KPP or the General Partner
         to any other  Person or "group"  (within the meaning of the  Securities
         Exchange  Act of 1934 and the  rules  of the  Securities  and  Exchange
         Commission   thereunder  in  effect  on  the  date  hereof),  (ii)  the
         acquisition of ownership,  directly or indirectly,  beneficially  or of
         record,  by any Person or "group" (within the meaning of the Securities
         Exchange  Act of 1934 and the  rules  of the  Securities  and  Exchange
         Commission  thereunder as in effect on the date hereof) (other than, in
         the case of the General  Partner,  by the Investor Group) of sufficient
         Equity  Interests  in KPP or the General  Partner to Control KPP or the
         General Partner,  as the case may be; or (iii) occupation of a majority
         of the seats (other than vacant seats) on the board of directors of the
         General  Partner by  Persons  who were  neither  (A)  nominated  by the
         current board of directors or (B) appointed by directors so nominated.

                  "Change in Law" shall mean (i) the adoption of any  applicable
         law,  rule or  regulation  after the date of this  Agreement,  (ii) any
         change in any applicable law, rule or regulation,  or any change in the
         interpretation or application  thereof,  by any Governmental  Authority
         after the date of this Agreement, or (iii) compliance by any Lender (or
         its Applicable  Lending Office) by such Lender's  holding  company,  if
         applicable)  with any request,  guideline or directive  (whether or not
         having the force of law) of any  Governmental  Authority made or issued
         after the date of this Agreement.

                  "Charges" shall have the meaning set forth in Section 11.12.

                  "Closing  Date"  shall  mean the date on which the  conditions
         precedent  set forth in Section  3.1 have been  satisfied  or waived in
         accordance with Section 11.2.

                  "Code"  shall  mean the  Internal  Revenue  Code of  1986,  as
         amended and in effect from time to time.

                  "Commitment"  shall mean,  with  respect to each  Lender,  the
         obligation of such Lender to make Loans to the Borrower in an aggregate
         principal  amount not  exceeding  the amount set forth with  respect to
         such Lender on the signature pages to this Agreement, or in the case of
         a Person  becoming a Lender  after the date  hereof,  the amount of the
         assigned  Commitment  as  provided  in the  Assignment  and  Acceptance
         Agreement  executed by such Person as an  assignee,  as the same may be
         changed pursuant to terms hereof.

                  "Consolidated EBITDA" shall mean, for KPP and its Subsidiaries
         for any  period,  an amount  equal to the sum of (i)  Consolidated  Net
         Income for such period plus (ii) to the extent  deducted in determining
         Consolidated  Net Income for such  period,  (A)  Consolidated  Interest
         Expense,  (B) income tax expense, (C) depreciation and amortization and
         (D) all other non-cash charges,  determined on a consolidated  basis in
         accordance with GAAP in each case for such period.

                  "Consolidated  Funded  Debt" shall mean Funded Debt of KPP and
         its consolidated Subsidiaries, other than Permitted Non-Recourse Debt.

                  "Consolidated  Interest  Expense"  shall mean, for KPP and its
         Subsidiaries  for any  period  determined  on a  consolidated  basis in
         accordance  with  GAAP,  the sum of (i) total  cash  interest  expense,
         (other  than in  respect  of  Permitted  Non-Recourse  Debt)  including
         without limitation the interest component of any payments in respect of
         Capital Lease  Obligations  capitalized or expensed  during such period
         (whether or not  actually  paid during such  period)  plus (ii) the net
         amount  payable  (or minus the net  amount  receivable)  under  Hedging
         Agreements during such period (whether or not actually paid or received
         during such period).

                  "Consolidated Net Income" shall mean, for any period,  the sum
         of (i) the net  income (or loss) of KPP and its  Subsidiaries  for such
         period determined on a consolidated  basis in accordance with GAAP, but
         (A) excluding  therefrom (to the extent otherwise included therein) (1)
         any  extraordinary  gains or  losses,  (2) any  gains  attributable  to
         write-ups of assets,  (3) any equity  interest of KPP or any Subsidiary
         of  KPP  in  the  unremitted  earnings  of  any  Person  that  is not a
         Subsidiary  other  than ST  Linden,  L.L.C.  and (4) any  income of any
         Person  other  than KPP or the  Borrower  for such  period  if (x) such
         Person has any Permitted Non-Recourse Indebtedness outstanding owing to
         any Person other than KPP or a  wholly-owned  subsidiary of KPP and (y)
         such income is not received in cash by KPP or the Borrower, as the case
         may be, during such period,  and (B)  including  therein (to the extent
         not otherwise  included  therein) any income (or loss) of any Person or
         attributable  to any assets if such  income  accrued  prior to the date
         that  (x)  such  Person  became  a  Subsidiary  or was  merged  into or
         consolidated  with KPP or any Subsidiary of KPP or (y) such assets were
         acquired  by KPP or any  Subsidiary,  as the case may be, plus (ii) the
         net income (or loss) of the General Partner in such period attributable
         to the  General  Partner's  interest  in the  Borrower,  determined  in
         accordance with GAAP.

                  "Consolidated  Net Worth"  means as at any date the sum of (x)
         total partners' capital of KPP and its consolidated  Subsidiaries as at
         such date,  excluding the effects of any write-ups  after  December 31,
         1999 of assets owned by KPP and its consolidated subsidiaries as of the
         date of this  Agreement  plus (y)  minority  interests  of the  General
         Partner in the Borrower,  in each case  determined  in accordance  with
         GAAP.

                  "Constituent  Documents"  shall  mean,  for  any  Person,  the
         documents for its formation and organization,  which, for example,  (i)
         for a  corporation  are its  corporate  charter and bylaws,  (ii) for a
         partnership is its partnership agreement, (iii) for a limited liability
         company are its certificate of organization and  regulations,  and (iv)
         for a trust is the  trust  agreement  or  indenture  under  which it is
         created.

                  "Control" shall mean the power, directly or indirectly, either
         to (i) vote 15% or more of securities  having ordinary voting power for
         the election of directors (or persons  performing similar functions) of
         a Person or (ii) direct or cause the  direction of the  management  and
         policies of a Person,  whether  through the ability to exercise  voting
         power, by contract or otherwise.  The terms  "Controlled by" and "under
         common Control with" have meanings correlative thereto.

                  "Credit Exposure" shall mean with respect to any Lender at any
         time the aggregate  principal  amount of all Loans  outstanding at such
         time that were made by such Lender.

                  "Credit Rating" of any Person shall mean any rating  published
         by S&P or Moody's for such Person's  senior  unsecured  long-term  debt
         without third-party credit enhancement.

                  "Default"  shall mean any  condition  or event that,  with the
         giving  of notice or the  lapse of time or both,  would  constitute  an
         Event of Default.

                  "Default Interest" shall have the meaning set forth in Section
         2.10(b).

                  "Diluted Value" shall mean, with respect to any assets of KPP,
         the Fair Market Value of such assets,  and,  with respect to any assets
         of any other Person, the Fair Market Value of such assets multiplied by
         the  percentage of the Equity  Interests held directly or indirectly by
         KPP in such Person.

                  "Distribution"   shall  mean,   with  respect  to  any  Equity
         Interests issued by a Person (i) the retirement,  redemption,  purchase
         or other  acquisition  for value of those  Equity  Interests,  (ii) the
         declaration  or  payment of any  dividend  or  distribution  on or with
         respect to those Equity Interests,  (iii) any Investment by that Person
         in the  holder  of any of those  Equity  Interests,  and (iv) any other
         payment by that Person with respect to those Equity Interests.

                  "Dollar(s)"  and the sign "$" shall mean  lawful  money of the
         United States of America.

                  "Environmental Liability" shall mean any liability, contingent
         or  otherwise   (including   any  liability   for  damages,   costs  of
         environmental  investigation  and remediation,  costs of administrative
         oversight,  fines, natural resource damages, penalties or indemnities),
         of KPP or any Subsidiary directly or indirectly resulting from or based
         upon (i) any actual or alleged violation of any Environmental Law, (ii)
         the generation,  use, handling,  transportation,  storage, treatment or
         disposal  of any  Hazardous  Materials,  (iii) any  actual  or  alleged
         exposure to any  Hazardous  Materials,  (iv) the Release or  threatened
         Release of any Hazardous  Materials or (v) any  contract,  agreement or
         other consensual  arrangement pursuant to which liability is assumed or
         imposed with respect to any of the foregoing.

                  "Equity  Event"  shall  mean (i) the  contribution  in cash of
         capital to KPP or any Subsidiary of KPP by any Person other than KPP or
         a Wholly-Owned  Subsidiary of KPP or any Subsidiary of KPP, or (ii) any
         issuance of Equity  Interests  by KPP or any  Subsidiary  of KPP to any
         Person  other  than  KPP or  any  Subsidiary  of KPP or a  Wholly-Owned
         Subsidiary of KPP.

                  "Equity   Interests"   shall  mean,  (i)  with  respect  to  a
         corporation,  shares of capital stock of such  corporation or any other
         interest convertible or exchangeable into any such interest,  (ii) with
         respect to a limited liability company,  a membership  interest in such
         company, (iii) with respect to a partnership, a partnership interest in
         such  partnership,  and (iv)  with  respect  to any  other  Person,  an
         interest in such Person analogous to interests described in clauses (i)
         through (iii).

                  "ERISA" shall mean the Employee Retirement Income Security Act
         of 1974, as amended from time to time, and any successor statute.

                  "ERISA Affiliate" shall mean any trade or business (whether or
         not  incorporated),  which,  together  with KPP, is treated as a single
         employer  under  Section  414(b) or (c) of the Code or,  solely for the
         purposes  of  Section  302 of ERISA and  Section  412 of the  Code,  is
         treated as a single employer under Section 414 of the Code.

                  "ERISA  Event"  shall  mean  (i) any  "reportable  event",  as
         defined in Section 4043 of ERISA or the regulations  issued  thereunder
         with respect to a Plan (other than an event for which the 30-day notice
         period is waived);  (ii) the  existence  with respect to any Plan of an
         "accumulated funding deficiency" (as defined in Section 412 of the Code
         or Section  302 of  ERISA),  whether  or not  waived;  (iii) the filing
         pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
         application for a waiver of the minimum  funding  standard with respect
         to any Plan; (iv) the incurrence by KPP or any of its ERISA  Affiliates
         of  any  liability  under  Title  IV  of  ERISA  with  respect  to  the
         termination of any Plan; (v) the receipt by KPP or any ERISA  Affiliate
         from  the  PBGC or a plan  administrator  appointed  by the PBGC of any
         notice  relating to an intention  to terminate  any Plan or Plans or to
         appoint a trustee to administer any Plan; (vi) the incurrence by KPP or
         any of its  ERISA  Affiliates  of any  liability  with  respect  to the
         withdrawal or partial  withdrawal from any Plan or Multiemployer  Plan;
         or (vii) the receipt by KPP or any ERISA  Affiliate  of any notice,  or
         the receipt by any  Multiemployer  Plan from KPP or any ERISA Affiliate
         of any notice,  concerning the imposition of Withdrawal  Liability or a
         determination  that a  Multiemployer  Plan is,  or is  expected  to be,
         insolvent  or in  reorganization,  within  the  meaning  of Title IV of
         ERISA.

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

                  "Eurodollar  Reserve  Percentage"  shall mean the aggregate of
         the maximum reserve percentages  (including,  without  limitation,  any
         emergency,  supplemental, special or other marginal reserves) expressed
         as a decimal  (rounded  upwards to the next 1/100th of 1%) in effect on
         any day to which the  Administrative  Agent is subject  with respect to
         the Adjusted LIBO Rate pursuant to  regulations  issued by the Board of
         Governors of the Federal Reserve System (or any Governmental  Authority
         succeeding  to  any  of  its  principal   functions)  with  respect  to
         eurocurrency   funding   (currently   referred   to  as   "eurocurrency
         liabilities"  under 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
         Regulation  D. The  Eurodollar  Reserve  Percentage  shall be  adjusted
         automatically  on and as of the  effective  date of any  change  in any
         reserve percentage.

                  "Event of Default" shall have the meaning set forth in Article
         IX.

                  "Excluded  Affiliate"  shall mean,  for any Person (the "first
         Person"),  any other  Person (the  "second  Person") in which the first
         Person owns  Equity  Interests  and where the second  Person (i) has no
         Indebtedness  other than Permitted  Non-Recourse Debt and (ii) the sole
         purpose  of  which  is to  engage  in  the  acquisition,  construction,
         development  and/or  operation  activities  financed or refinanced with
         such Permitted Non-Recourse Debt.

                  "Excluded Subsidiary" shall mean any Subsidiary of KPP that is
         an Excluded Affiliate.

                  "Excluded Taxes" shall mean with respect to the Administrative
         Agent,  any Lender or any other  recipient of any payment to be made by
         or on account of any obligation of the Borrower  hereunder,  (i) income
         or  franchise  taxes  imposed on (or measured by) its net income by the
         United  States of  America,  or by the  jurisdiction  under the laws of
         which such  recipient is organized or in which its principal  office is
         located or, in the case of any Lender, in which its applicable  lending
         office is located,  (ii) any branch profits taxes imposed by the United
         States of America or any similar tax imposed by any other  jurisdiction
         in which  any  Lender  is  located  and  (iii) in the case of a Foreign
         Lender,  any  withholding tax that (A) is imposed on amounts payable to
         such Foreign  Lender at the time such Foreign Lender becomes a party to
         this  Agreement,  (B) is  imposed on  amounts  payable to such  Foreign
         Lender at any time that such  Foreign  Lender  designates a new lending
         office,  other than taxes that have accrued prior to the designation of
         such lending office that are otherwise not Excluded  Taxes,  and (C) is
         attributable  to such Foreign  Lender's  failure to comply with Section
         2.17(e).

                  "Existing  Indebtedness" shall mean the Indebtedness described
         on Schedule II of this Agreement.

                  "Fair  Market  Value"  shall mean,  with respect to any Equity
         Interest or other  property  or asset,  the price  obtainable  for such
         Equity  Interest  or other  property or asset in an  arm's-length  sale
         between an  informed  and  willing  purchaser  under no  compulsion  to
         purchase and an informed  and willing  seller  under no  compulsion  to
         sell.

                  "Fee Letters"  shall mean (i) that certain  letter  agreement,
         dated August 9, 2000, among the Borrower,  the Administrative Agent and
         SunTrust  Equitable  Securities  Corporation,  relating to certain fees
         payable  in  connection  with  administrative  agency  and  arrangement
         services  provided  in  connection  with this  Agreement  and (ii) that
         certain letter  agreement,  dated the date hereof,  among the Borrower,
         KPP,  SunTrust  Bank and  SunTrust  Equitable  Securities  Corporation,
         relating to certain  upfront and ticking fees payable to the Lenders in
         connection with this Agreement.

                  "Federal  Funds Rate" shall  mean,  for any day,  the rate per
         annum (rounded upwards, if necessary,  to the next 1/100th of 1%) equal
         to the  weighted  average  of the  rates  on  overnight  Federal  funds
         transactions  with member banks of the Federal  Reserve System arranged
         by Federal funds brokers,  as published by the Federal  Reserve Bank of
         New York on the next succeeding  Business Day or if such rate is not so
         published  for any Business  Day,  the Federal  Funds Rate for such day
         shall be the average rounded upwards, if necessary, to the next 1/100th
         of 1% of the quotations for such day on such  transactions  received by
         the Administrative Agent from three Federal funds brokers of recognized
         standing selected by the Administrative Agent.

                  "Foreign  Lender"  shall mean any Lender  that is not a United
         States person under Section 7701(a)(3) of the Code.

                  "Foreign  Subsidiary" shall mean any Subsidiary of KPP that is
         not  organized  under the law of the  United  States of  America or any
         state or territory thereof.

                  "Funded Debt" of any Person shall mean (i) all Indebtedness of
         such  Person of the types  described  in clauses  (i) though (v) of the
         definition of "Indebtedness", (ii) all Guarantees of such Person of the
         types of  Indebtedness  described  in  clause  (i)  above and (iii) all
         obligations  that are  secured  (or for  which  the  holder of any such
         obligation  has an existing  right,  contingent or otherwise,  to be so
         secured) by any Lien on property  owned or acquired by such Person,  in
         an amount limited to the lesser of (x) the unpaid amount of all of such
         obligations from time to time outstanding and (y) the Fair Market Value
         of the property securing all of such obligations,  liabilities  secured
         (or for which the holder of such  obligations  has an  existing  right,
         contingent  or  otherwise,  to be so secured)  by any Lien  existing on
         property owned or acquired by such Person.

                  "GAAP" shall mean generally accepted accounting  principles in
         the United  States  applied on a  consistent  basis and  subject to the
         terms of Section 1.3.

                  "General  Partner"  shall  mean  Kaneb  Pipe Line  Company,  a
         Delaware corporation.

                  "Governmental  Authority"  shall  mean 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.

                  "Granting  Lender" shall have the meaning set forth in Section
         11.4(e).

                  "Guarantee" of or by any Person (the  "guarantor")  shall mean
         any obligation,  contingent or otherwise, of the guarantor guaranteeing
         or having the economic effect of guaranteeing  any  Indebtedness of any
         other Person (the "primary obligor") in any manner, whether directly or
         indirectly,  and including any obligation,  direct or indirect,  of the
         guarantor  (i) 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,  (ii) 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,  (iii) 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
         (iv) as an  account  party in respect of any letter of credit or letter
         of  guaranty  issued in support  of such  Indebtedness  or  obligation;
         provided,  that the term "Guarantee" shall not include endorsements for
         collection or deposits in the ordinary  course of business.  The amount
         of any Guarantee shall be deemed to be an amount equal to the stated or
         determinable  amount of the  primary  obligation  in  respect  of which
         Guarantee  is made or, if not so stated or  determinable,  the  maximum
         reasonably  anticipated  liability in respect  thereof  (assuming  such
         Person is required to perform  thereunder) as determined by such Person
         in good faith.  The term "Guarantee" used as a verb has a corresponding
         meaning.

                  "Guaranteed  Obligations"  shall have the meaning set forth in
         Section 8.01.

                  "Guarantor"  shall mean KPP and each  party to the  Subsidiary
         Guarantee Agreement.

                  "Hazardous  Materials"  means  all  explosive  or  radioactive
         substances or wastes and all hazardous or toxic  substances,  wastes or
         other  pollutants,   including  petroleum  or  petroleum   distillates,
         asbestos or asbestos containing materials,  polychlorinated  biphenyls,
         radon gas,  infectious  or medical  wastes and all other  substances or
         wastes of any nature regulated pursuant to any Environmental Law.

                  "Hedging  Agreements"  shall mean interest  rate swap,  cap or
         collar agreements,  interest rate future or option contracts,  currency
         swap  agreements,   currency  future  or  option  contracts,  commodity
         agreements  and other similar  agreements or  arrangements  designed to
         protect  against  fluctuations  in interest  rates,  currency values or
         commodity values, in each case to which KPP or any Subsidiary of KPP is
         a party.

                  "Indebtedness" of any Person shall mean,  without  duplication
         (i) all  obligations  of such  Person  for  borrowed  money,  (ii)  all
         obligations  of such Person  evidenced by bonds,  debentures,  notes or
         other  similar  instruments,  (iii) all  obligations  of such Person in
         respect of the deferred  purchase price of property or services  (other
         than  trade  payables  incurred  in the  ordinary  course of  business;
         provided,  that for purposes of Section 9.1(f),  trade payables overdue
         by more than 120 days shall be  included in this  definition  except to
         the extent that any of such trade  payables are being  disputed in good
         faith and by appropriate measures), (iv) all obligations of such Person
         under  any  conditional  sale or  other  title  retention  agreement(s)
         relating to property  acquired by such  Person,  (v) all Capital  Lease
         Obligations of such Person and all obligations in respect of the unpaid
         principal  amount  or  component  of all  obligations  under  synthetic
         leases, (vi) all obligations,  contingent or otherwise,  of such Person
         in respect of letters of credit,  acceptances or similar  extensions of
         credit, (vii) all Guarantees of such Person of the type of Indebtedness
         described in clauses (i) through (vi) above, (viii) all Indebtedness of
         a third  party  secured by any Lien on property  owned by such  Person,
         whether or not such Indebtedness has been assumed by such Person,  (ix)
         all obligations of such Person,  contingent or otherwise,  to purchase,
         redeem,  retire or otherwise acquire for value any common stock of such
         Person, and (x) Off-Balance Sheet Liabilities.  The Indebtedness of any
         Person  shall  include the  Indebtedness  of any  partnership  or joint
         venture in which such Person is a general  partner or a joint venturer,
         except to the extent that the terms of such  Indebtedness  provide that
         such Person is not liable therefor.

                  "Indemnified  Taxes"  shall  mean Taxes  other  than  Excluded
         Taxes.

                  "Indemnitee"  shall  have the  meaning  set  forth in  Section
         11.3(b).

                  "Information   Memorandum"   shall   mean   the   Confidential
         Information  Memorandum  dated  September  2000  relating  to KPP,  the
         Borrower and the  transactions  contemplated  by this Agreement and the
         other Loan Documents.

                  "Interest  Coverage  Ratio"  shall mean for any period of four
         consecutive  fiscal  quarters  of KPP,  the  ratio of (i)  Consolidated
         EBITDA for such period to (ii)  Consolidated  Interest Expense for such
         period.

                  "Interest  Period"  shall mean with respect to any  Eurodollar
         Borrowing, a period of one, two, three or six months; provided, that:

         (i)      the initial  Interest Period for such Borrowing shall commence
                  on the  date  of such  Borrowing  (including  the  date of any
                  conversion  from  a  Borrowing  of  another  Type),  and  each
                  Interest  Period  occurring  thereafter  in  respect  of  such
                  Borrowing  shall  commence  on  the  day  on  which  the  next
                  preceding Interest Period expires;

         (ii)     if any Interest Period would otherwise end on a day other than
                  a Business Day, such Interest  Period shall be extended to the
                  next  succeeding  Business Day, unless such Business Day falls
                  in another  calendar month, in which case such Interest Period
                  would end on the next preceding Business Day;

         (iii)    any Interest  Period that begins on the last Business Day of a
                  calendar  month or on a day for which there is no  numerically
                  corresponding  day in the  calendar  month  at the end of such
                  Interest  Period  shall end on the last  Business  Day of such
                  calendar month;

         (iv)     no Interest Period may extend beyond the Termination Date.

                  "Investment"  shall mean, in respect of any Person,  any loan,
         advance,  extension of credit or capital  contribution  to that Person,
         any other  investment in that Person,  or any purchase or commitment to
         purchase any Equity Interest or  Indebtedness  issued by that Person or
         substantially all of the assets or a division or other business unit of
         that Person.

                  "Investor  Group"  shall mean  Kaneb  Services,  Inc.  and its
         Subsidiaries.

                  "Lenders" shall have the meaning  assigned to such term in the
         opening paragraph of this Agreement.

                  "LIBOR" shall mean,  for any applicable  Interest  Period with
         respect to any  Eurodollar  Loan,  the rate per annum for  deposits  in
         Dollars for a period  equal to such  Interest  Period  appearing on the
         display  designated as Page 3750 on the Dow Jones  Markets  Service (or
         such other page on that service or such other service designated by the
         British  Banker's  Association  for the  display of such  Association's
         Interest  Settlement  Rates  for  Dollar  deposits)  as of  11:00  a.m.
         (London,  England  time) on the day that is two Business  Days prior to
         the  first  day  of  the  Interest  Period  or if  such  Page  3750  is
         unavailable  for any reason at such time, the rate which appears on the
         Reuters Screen ISDA Page as of such date and such time; provided,  that
         if the  Administrative  Agent  determines  that the relevant  foregoing
         sources are unavailable for the relevant  Interest Period,  LIBOR shall
         mean the rate of interest determined by the Administrative  Agent to be
         the average  (rounded upward,  if necessary,  to the nearest 1/100th of
         1%) of the rates per annum at which  deposits in Dollars are offered to
         the  Administrative  Agent two Business Days preceding the first day of
         such Interest Period by leading banks in the London interbank market as
         of 10:00 a.m.  for delivery on the first day of such  Interest  Period,
         for the number of days comprised therein and in an amount comparable to
         the amount of the Eurodollar Loan of the Administrative Agent.

                  "Lien" shall mean any  mortgage,  pledge,  security  interest,
         financing   statement,   lien   (statutory   or   otherwise),   charge,
         encumbrance,  hypothecation,  assignment, deposit arrangement, or other
         arrangement  having  the  practical  effect  of  the  foregoing  or any
         preference,  priority  or  other  security  agreement  or  preferential
         arrangement of any kind or nature whatsoever (including any conditional
         sale or other title  retention  agreement  and any capital lease having
         the same economic effect as any of the foregoing).

                  "Loan"  shall  mean a loan  made by a Lender  to the  Borrower
         under  its  Commitment,  which  may  either  be a Base  Rate  Loan or a
         Eurodollar Loan.

                  "Loan Documents" shall mean, collectively, this Agreement, the
         Notes (if any),  the  Subsidiary  Guarantee  Agreement,  all Notices of
         Borrowing and all Notices of Conversion/Continuation.

                  "Loan  Parties" shall mean the General  Partner,  the Borrower
         and the Guarantors.

                  "Material  Adverse  Effect"  shall mean,  with  respect to any
         event,  act,  condition or occurrence of whatever nature (including any
         adverse determination in any litigation,  arbitration,  or governmental
         investigation or proceeding), whether singularly or in conjunction with
         any  other  event or  events,  act or acts,  condition  or  conditions,
         occurrence or occurrences  whether or not related,  a material  adverse
         change in, or a material  adverse effect on, (i) the business,  results
         of operations, financial condition, assets, liabilities or prospects of
         the Borrower or of KPP and its Subsidiaries  taken as a whole, (ii) the
         ability of any Loan Party to perform any of its  obligations  under the
         Loan  Documents,  (iii) the rights and  remedies of the  Administrative
         Agent  and the  Lenders  under  any of the Loan  Documents  or (iv) the
         legality, validity or enforceability of any of the Loan Documents.

                  "Material  Indebtedness"  shall mean Indebtedness  (other than
         the Loans) or obligations in respect of one or more Hedging  Agreements
         of any  one or  more  of  KPP  and  its  Subsidiaries  in an  aggregate
         principal  amount  exceeding  $5,000,000.  For purposes of  determining
         Material Indebtedness, the "principal amount" of the obligations of KPP
         or any  Subsidiary  of KPP in respect to any Hedging  Agreement  at any
         time  shall be the  maximum  aggregate  amount  (giving  effect  to any
         netting  agreements)  that KPP or such Subsidiary  would be required to
         pay if such Hedging Agreement were terminated at such time.

                  "Maximum  Rate"  shall have the  meaning  set forth in Section
         11.12.

                  "Moody's" shall mean Moody's Investors Service, Inc.

                  "Multiemployer  Plan"  shall  have the  meaning  set  forth in
         Section 4001(a)(3) of ERISA.

                  "Net Cash  Proceeds"  shall  mean,  with  respect to any Asset
         Disposition,  Recovery Event or Additional Debt (each,  for purposes of
         this  definition,  a  "transaction"),  the  aggregate  amount  of  cash
         received,  as the case may be,  by (x) KPP or the  Borrower  or (y) any
         Significant Affiliate and legally available to be distributed to KPP or
         the Borrower in the form of dividends or  distributions  in  connection
         with such  transaction  after,  in each case,  deducting  therefrom (i)
         payments  made in respect of any  Indebtedness  to the extent that such
         payments are required to be made (other than under the Loan  Documents)
         as a result of or in connection with such transaction by applicable law
         or  the  terms  of  any   contractual   agreement   relating   to  such
         Indebtedness, (ii) reasonable and customary transaction costs (which in
         the  case of any  Recovery  Event  may  include  litigation  costs  and
         expenses  and other  costs and  expenses  of  collecting  payments  and
         settlements  therefrom)  that are paid or reserved for payment (A) to a
         Person that is not an Affiliate of KPP or (B) to KPP or an Affiliate of
         KPP to  reimburse  such  Person  for  payments  made by such  Person to
         another  Person  that is not KPP or an  Affiliate  of KPP in respect of
         such transaction  costs, (iii) the amount of taxes paid or reserved for
         payment by KPP or such Significant Affiliate in connection with or as a
         result of such transaction and (iv) any Reinvestment Amount.

                  "Non-Recourse"  shall  mean,  with  respect  to any  Person as
         applied to any  Indebtedness  (i) that such  Person is not  directly or
         indirectly   liable  to  make  any   payments   with  respect  to  such
         Indebtedness, (ii) that such Indebtedness (or portion thereof) does not
         constitute  Indebtedness  of such  Person  other  than to the extent of
         recourse to such  Person's  Equity  Interests  in the Person  primarily
         incurring such Debt (or any shareholder, partner, member or participant
         of such Person) and that (iii) such  Indebtedness  (or portion thereof)
         is not  secured by a Lien on any asset of such  Person  other than such
         Person's  Equity  Interests  in the  Person  primarily  incurring  such
         Indebtedness or any shareholder,  partner, member, participant or other
         owner,  directly  or  indirectly,  of such  Person  or the  Person  the
         obligations of which were guaranteed.

                  "Note" shall mean a promissory note of the Borrower payable to
         the  order of a  requesting  Lender  in the  principal  amount  of such
         Lender's commitment, in substantially the form of Exhibit A.

                  "Notice  of  Borrowing"  shall have the  meaning  set forth in
         Section 2.3.

                  "Notice  of  Conversion/Continuation"  shall  mean the  notice
         given by the  Borrower  to the  Administrative  Agent in respect of the
         conversion or continuation  of an outstanding  Borrowing as provided in
         Section 2.5(b) hereof.

                  "Obligations"  shall mean all amounts owing by the Borrower to
         the  Administrative  Agent or any Lender  pursuant to or in  connection
         with this  Agreement  or any other  Loan  Document,  including  without
         limitation,  all principal,  interest  (including any interest accruing
         after the filing of any petition in bankruptcy or the  commencement  of
         any  insolvency,  reorganization  or like  proceeding  relating  to the
         Borrower,  whether  or not a claim  for  post-filing  or  post-petition
         interest is allowed in such proceeding), all reimbursement obligations,
         fees, expenses,  indemnification and reimbursement payments,  costs and
         expenses   (including   all  fees  and   expenses  of  counsel  to  the
         Administrative Agent and any Lender incurred pursuant to this Agreement
         or any other Loan  Document),  whether direct or indirect,  absolute or
         contingent,  liquidated  or  unliquidated,  now  existing or  hereafter
         arising  hereunder or  thereunder,  and all  obligations  arising under
         Hedging  Agreements  relating to the foregoing to the extent  permitted
         hereunder,  and all obligations and liabilities  incurred in connection
         with  collecting  and  enforcing  the  foregoing,   together  with  all
         renewals, extensions, modifications or refinancings thereof.

                  "Off-Balance  Sheet  Liabilities" of any Person shall mean (i)
         any  repurchase  obligation or liability of such Person with respect to
         accounts or notes receivable sold by such Person, (ii) any liability of
         such  Person  under  any sale and  leaseback  transactions  that do not
         create a liability on the balance  sheet of such  Person,  or (iii) any
         obligation  arising with respect to any other  transaction which is the
         functional  equivalent of or takes the place of borrowing but that does
         not constitute a liability on the balance sheet of such Person.

                  "Other  Taxes"  shall mean any and all present or future stamp
         or documentary taxes or any other excise or property taxes,  charges or
         similar  levies  arising  from any payment  made  hereunder or from the
         execution,  delivery or  enforcement  of, or otherwise with respect to,
         this Agreement or any other Loan Document.

                  "Participant"  shall  have the  meaning  set forth in  Section
         11.4(c).

                  "Payment  Office" shall mean the office of the  Administrative
         Agent located at 25 Park Place, N.E.,  Atlanta,  Georgia 30303, or such
         other  location as to which the  Administrative  Agent shall have given
         written notice to the Borrower and the other Lenders.

                  "PBGC"  shall mean the Pension  Benefit  Guaranty  Corporation
         referred to and defined in ERISA, and any successor  entity  performing
         similar functions.

                  "Permitted Encumbrances" shall mean

         (i)      Liens  imposed by law for taxes not yet due or which are being
                  contested in good faith by  appropriate  proceedings  and with
                  respect to which  adequate  reserves are being  maintained  in
                  accordance with GAAP;

         (ii)     statutory   Liens  of   landlords   and  Liens  of   carriers,
                  warehousemen,  mechanics,  materialmen and other Liens imposed
                  by law created in the ordinary  course of business for amounts
                  not yet due or which  are  being  contested  in good  faith by
                  appropriate  proceedings  and with  respect to which  adequate
                  reserves are being maintained in accordance with GAAP;

         (iii)    pledges and deposits  made in the ordinary  course of business
                  in  compliance   with  workers'   compensation,   unemployment
                  insurance and other social security laws or regulations;

         (iv)     deposits to secure the performance 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;

         (v)      easements,  zoning  restrictions,  rights-of-way  and  similar
                  encumbrances on real property imposed by law or arising in the
                  ordinary  course of business  that do not secure any  monetary
                  obligations  and do not  materially  detract from the value of
                  the  affected  property  or  materially   interfere  with  the
                  ordinary   conduct  of  business  of  the   Borrower  and  its
                  Subsidiaries taken as a whole; and

         (vi)     Liens  granted  in favor of the  Administrative  Agent for the
                  benefit of the Lenders.

                  "Permitted Investments" shall mean:

         (i)      direct  obligations  of, or  obligations  the principal of and
                  interest  on which  are  unconditionally  guaranteed  by,  the
                  United  States  (or by any agency  thereof to the extent  such
                  obligations  are  backed by the full  faith and  credit of the
                  United States), in each case maturing within one year from the
                  date of acquisition thereof;

         (ii)     commercial  paper  having the highest  rating,  at the time of
                  acquisition  thereof,  of S&P or  Moody's  and in either  case
                  maturing  within  six  months  from  the  date of  acquisition
                  thereof;

         (iii)    certificates  of  deposit,   bankers'   acceptances  and  time
                  deposits  maturing  within 180 days of the date of acquisition
                  thereof  issued or  guaranteed  by or placed  with,  and money
                  market  deposit  accounts  issued or offered by, any  domestic
                  office of any commercial  bank organized under the laws of the
                  United  States  or any  state  thereof  which  has a  combined
                  capital  and surplus  and  undivided  profits of not less than
                  $500,000,000;

         (iv)     fully collateralized  repurchase agreements with a term of not
                  more than 30 days for securities described in clause (i) above
                  and entered into with a financial  institution  satisfying the
                  criteria described in clause (iii) above; and

         (v)      mutual  funds  investing  solely  in any  one or  more  of the
                  Permitted  Investments  described  in clauses (i) through (iv)
                  above.

                  "Permitted  Non-Recourse  Debt" shall mean Indebtedness of any
         Person  (other than any Loan Party)  that is  Non-Recourse  to any Loan
         Party and is used by such Person to acquire, construct,  develop and/or
         operate assets not owned by KPP or any Significant  Affiliate as of the
         date hereof or to refinance Permitted Non-Recourse Debt.

                  "Person"  shall  mean  any  individual,   partnership,   firm,
         corporation,  association,  joint venture,  limited liability  company,
         trust or other entity, or any Governmental Authority.

                  "Plan" means any employee  pension  benefit plan (other than a
         Multiemployer  Plan) subject to the  provisions of Title IV of ERISA or
         Section  412 of the Code or  Section  302 of ERISA,  and in  respect of
         which KPP or any ERISA Affiliate is (or, if such plan were  terminated,
         would under  Section  4069 of ERISA be deemed to be) an  "employer"  as
         defined in Section 3(5) of ERISA.

                  "Pro Rata Share" shall mean with respect to any  Commitment of
         any Lender at any time, a  percentage,  the numerator of which shall be
         such Lender's  Commitment (or if such  Commitments have been terminated
         or expired or the Loans have been declared to be due and payable,  such
         Lender's  Credit  Exposure),  and the denominator of which shall be the
         sum of such  Commitments  of all Lenders (or if such  Commitments  have
         been  terminated  or expired or the Loans have been  declared to be due
         and payable, the sum of the Credit Exposures of all Lenders).

                  "Recovery  Event" shall mean any  settlement  of or payment in
         respect of any property or casualty insurance claim or any condemnation
         proceeding  relating to any property or asset of KPP or any Significant
         Affiliate, the Diluted Value of which settlement or payment, when added
         to the Diluted  Value of all such  settlements  and payments (x) in any
         fiscal  year of KPP  exceeds  $25,000,000  or (y) from the date  hereof
         until the date three years following the date of this Agreement exceeds
         $50,000,000.

                  "Reference Parties" shall mean KPP and the Borrower.

                  "Reference  Ratings"  shall  mean the  Credit  Ratings  of the
         Reference Party with the lowest Credit Rating.

                  "Regulation  D"  shall  mean  Regulation  D of  the  Board  of
         Governors of the Federal Reserve  System,  as the same may be in effect
         from time to time, and any successor regulations.

                  "Reinvestment  Amount"  means,  with  respect to any  Recovery
         Event, the amount of cash received by KPP or any Significant  Affiliate
         that the Borrower,  by written notice  delivered to the  Administrative
         Agent on or prior to the date 10  Business  Days  following  receipt of
         such  cash  by KPP or such  Significant  Affiliate,  certifies  will be
         reinvested,  and  within  180 days of  receipt  of such cash is in fact
         reinvested,  in assets to replace, restore or refurbish the assets that
         were the subject of such Recovery Event.

                  "Related  Parties"  shall mean,  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.

                  "Release"  means  any  release,   spill,  emission,   leaking,
         dumping, injection, pouring, deposit, disposal,  discharge,  dispersal,
         leaching or  migration  into the  environment  (including  ambient air,
         surface  water,  groundwater,  land  surface or  subsurface  strata) or
         within any building, structure, facility or fixture.

                  "Required  Lenders" shall mean, at any time,  Lenders  holding
         more than 51% of the aggregate outstanding Loans and unused Commitments
         at such time or if the Lenders have no Loans outstanding,  then Lenders
         holding more than 51% of the Commitments.

                  "Responsible  Officer" shall mean, with respect to any Person,
         any of the president,  the chief executive officer, the chief operating
         officer, the chief financial officer, the treasurer or a vice president
         of such  Person or such other  representative  of such Person as may be
         designated in writing by any one of the  foregoing  with the consent of
         the Administrative Agent.

                  "Restricted  Payment"  shall  have the  meaning  set  forth in
         Section 7.5.

                  "S&P" shall mean Standard & Poor's  Ratings  Group, a division
         of The McGraw-Hill Companies, Inc..

                  "SPV" shall have the meaning set forth in Section 11.4(c).

                  "Significant  Affiliate"  shall means each Person (i) in which
         KPP's direct and indirect  Investments in such Person  constitute  more
         than 10% of the total assets of KPP and its consolidated  Subsidiaries,
         (ii) in which  KPP's and its  Subsidiaries'  share of the total  assets
         (after  intercompany  eliminations)  of such  Person  exceed 10% of the
         total  assets  of KPP and its  consolidated  Subsidiaries,  or (iii) in
         which  the  equity  of KPP  and its  Subsidiaries  in the  income  from
         continuing operations of such Person before income taxes, extraordinary
         items and  cumulative  effects  of  changes  in  accounting  principles
         exceeds 10% of such income of KPP and its consolidated Subsidiaries.

                  "Significant Subsidiary" means any Subsidiary of KPP that is a
         Significant Affiliate.

                  "Subsidiary"  shall  mean,  with  respect to any  Person  (the
         "parent"),  any  corporation,   partnership,   joint  venture,  limited
         liability  company,  association  or other entity the accounts of which
         would  be  consolidated  with  those  of the  parent  in  the  parent's
         consolidated  financial  statements if such financial  statements  were
         prepared in accordance  with GAAP as of such date, as well as any other
         corporation,  partnership,  joint venture,  limited liability  company,
         association or other entity (i) of which  securities or other ownership
         interests  representing more than 50% of the equity or more than 50% of
         the ordinary voting power,  or in the case of a partnership,  more than
         50% of the general  partnership  interests are, as of such date, owned,
         Controlled  or  held,  or (ii)  that  is,  as of such  date,  otherwise
         Controlled,  by the parent or one or more subsidiaries of the parent or
         by the parent and one or more subsidiaries of the parent.

                  "Subsidiary  Guarantee  Agreement"  shall mean the  Subsidiary
         Guarantee  Agreement,  substantially  in the form of Exhibit C, made by
         the Guarantors  (other than KPP) in favor of the  Administrative  Agent
         for the benefit of the Lenders.

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

                  "Termination  Date"  shall mean the  earliest  of (i) the date
         three years from the date of this Agreement, (ii) the date on which the
         Commitments  are terminated  pursuant to Section 2.6 and (iii) the date
         on which  all  amounts  outstanding  under  this  Agreement  have  been
         declared  or have  automatically  become due and  payable  (whether  by
         acceleration or otherwise).

                  "Type", when used in reference to a 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 Base Rate.

                  "UK  Facility"  shall mean the Credit  Agreement,  dated as of
         January  29,  1999,  among  the  borrower  and ST  Services,  Ltd.,  as
         borrowers,  and  SunTrust  Bank,  as lender,  as amended,  modified and
         supplemented from time to time.

                  "Wholly-Owned  Subsidiary"  shall  mean  any  Subsidiary  of a
         Person, all of the issued and outstanding Equity Interests of which are
         directly or indirectly owned by such Person,  excluding (i) any general
         partner  interests  owned by the General Partner in any such Subsidiary
         that is a  partnership  and (ii) any  directors'  qualifying  shares or
         similar type of Equity Interests, as applicable.

                  "Withdrawal Liability" shall mean liability to a Multiemployer
         Plan  as a  result  of a  complete  or  partial  withdrawal  from  such
         Multiemployer  Plan,  as such terms are defined in Part I of Subtitle E
         of Title IV of ERISA.

         Classifications of Loans and Borrowings.

         For purposes of this Agreement, Loans may be classified and referred to
by Type (e.g., a "Eurodollar Loan" or "Base Rate Loan").  Borrowings also may be
classified and referred to by Type (e.g.,  "Eurodollar  Borrowing" or "Base Rate
Borrowing").

         Accounting Terms and Determination.

         Unless otherwise defined or specified herein, all accounting terms used
herein shall be interpreted,  all accounting  determinations  hereunder shall be
made, and all financial  statements  required to be delivered hereunder shall be
prepared,  in accordance with GAAP as in effect from time to time,  applied on a
basis consistent  (except for such changes approved by KPP's independent  public
accountants) with the most recent audited  consolidated  financial  statement of
KPP delivered  pursuant to Section  5.1(a);  provided,  that if KPP notifies the
Administrative  Agent  that KPP  wishes to amend any  covenant  in Article VI to
eliminate the effect of any change in GAAP on the operation of such covenant (or
if the Administrative Agent notifies KPP that the Required Lenders wish to amend
Article VI for such purpose),  then KPP's compliance with such covenant shall be
determined on the basis of GAAP in effect immediately before the relevant change
in GAAP became effective, until either such notice is withdrawn or such covenant
is amended in a manner satisfactory to KPP and the Required Lenders.

         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".  In the  computation  of periods of time
from a specified date to a later specified date, the word "from" means "from and
including"  and the word  "to"  means "to but  excluding".  Unless  the  context
requires  otherwise  (i)  any  definition  of or  reference  to  any  agreement,
instrument  or other  document  herein  shall be  construed as referring to such
agreement,  instrument or other document as it was originally  executed or as it
may from time to time be amended, supplemented or otherwise modified (subject to
any  restrictions on such  amendments,  supplements or  modifications  set forth
herein),  (ii) any reference  herein to any Person shall be construed to include
such  Person's  successors  and  permitted  assigns,  (iii) the words  "hereof",
"herein" and "hereunder" and words of similar import shall be construed to refer
to this Agreement as a whole and not to any particular  provision  hereof,  (iv)
all references to Articles,  Sections, Exhibits and Schedules shall be construed
to refer to Articles, Sections, Exhibits and Schedules to this Agreement and (v)
all references to a specific time shall be construed to refer to the time in the
city and state of the Administrative  Agent's principal office, unless otherwise
indicated.

AMOUNT AND TERMS OF THE COMMITMENTS

         The Revolving Credit Facility.

         Subject to and upon the terms and  conditions  herein  set  forth,  the
Lenders hereby  establish in favor of the Borrower a revolving  credit  facility
pursuant to which each Lender  severally  agrees (to the extent of such Lender's
Commitment) to make Loans to the Borrower in accordance with Section 2.2.

         The Loans.

         Subject  to the terms and  conditions  set forth  herein,  each  Lender
severally agrees to make Loans to the Borrower,  from time to time from the date
hereof until the Termination Date, in an aggregate  principal amount outstanding
at any time that will not result in (i) such Lender's Credit Exposure  exceeding
such Lender's  Commitment or (ii) the sum of the aggregate  Credit  Exposures of
all Lenders exceeding the Aggregate Commitments. Until the Termination Date, the
Borrower  shall be entitled to borrow,  prepay and reborrow  Loans in accordance
with the terms and conditions of this Agreement.

         Procedure for Borrowings.

         The Borrower  shall give the  Administrative  Agent written  notice (or
telephonic notice promptly confirmed in writing) of each Borrowing substantially
in the form of Exhibit D (a "Notice of  Borrowing")  (x) prior to 11:00 a.m. one
Business Day prior to the  requested  date of each Base Rate  Borrowing  and (y)
prior to 11:00 a.m.  three  Business  Days prior to the  requested  date of each
Eurodollar  Borrowing.  Each Notice of Borrowing  shall be irrevocable and shall
specify: (i) the aggregate principal amount of such Borrowing,  (ii) the date of
such  Borrowing  (which  shall be a Business  Day),  (iii) the Type of such Loan
comprising  such Borrowing and (iv) in the case of a Eurodollar  Borrowing,  the
duration of the  initial  Interest  Period  applicable  thereto  (subject to the
provisions of the definition of Interest  Period).  Each Borrowing shall consist
entirely of Base Rate Loans or  Eurodollar  Loans,  as the Borrower may request.
The aggregate  principal  amount of each Eurodollar  Borrowing shall be not less
than $5,000,000 or a larger multiple of $1,000,000,  and the aggregate principal
amount of each Base Rate Borrowing shall not be less than $1,000,000 or a larger
multiple of $100,000. At no time shall the total number of Eurodollar Borrowings
outstanding at any time exceed five.  Promptly following the receipt of a Notice
of Borrowing in accordance herewith,  the Administrative Agent shall advise each
Lender of the details thereof and the amount of such Lender's Loan to be made as
part of the requested Borrowing.

         Funding of  Borrowings.

         Each Lender will make available each Loan to be made by it hereunder on
the proposed date thereof by wire  transfer in  immediately  available  funds by
11:00 a.m. to the Administrative Agent at the Payment Office. The Administrative
Agent will make such Loans  available to the Borrower by promptly  crediting the
amounts  that it  receives,  in like  funds  by the  close of  business  on such
proposed date, to an account  maintained by the Borrower with the Administrative
Agent or at the Borrower's  option, by effecting a wire transfer of such amounts
to an account designated by the Borrower to the Administrative Agent.  Unlessthe
Administrative  Agent shall have been notified by any Lender prior to 5 p.m. one
Business  Day  prior  to the  date  of a  Borrowing  in  which  such  Lender  is
participating  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 amount available to the  Administrative  Agent on
such date, and the  Administrative  Agent, in reliance on such  assumption,  may
make  available to the  Borrower on such date a  corresponding  amount.  If such
corresponding  amount is not in fact made available to the Administrative  Agent
by such Lender on the date of such Borrowing,  the Administrative Agent shall be
entitled  to  recover  such  corresponding  amount  on demand  from such  Lender
together  with  interest  at the  Federal  Funds  Rate  for up to two  days  and
thereafter at the rate specified for such Borrowing. If such Lender does not pay
such  corresponding  amount  forthwith  upon the  Administrative  Agent's demand
therefor,  the Administrative Agent shall promptly notify the Borrower,  and the
Borrower shall immediately pay such  corresponding  amount to the Administrative
Agent together with interest at the rate specified for such  Borrowing.  Nothing
in this subsection  shall be deemed to relieve any Lender from its obligation to
fund its Pro Rata Share of any  Borrowing  hereunder or to prejudice  any rights
which the  Borrower  may have  against  any Lender as a result of any default by
such Lender hereunder.  All Borrowings shall be made by the Lenders on the basis
of their  respective  Pro Rata Shares.  No Lender shall be  responsible  for any
default by any other Lender in its obligations hereunder,  and each Lender shall
be obligated to make its Loans  provided to be made by it hereunder,  regardless
of the  failure  of any  other  Lender  to make its  Loans  hereunder.  Interest
Elections.  Each  Borrowing  initially  shall  be of the Type  specified  in the
applicable Notice of Borrowing, and in the case of a Eurodollar Borrowing, shall
have an  initial  Interest  Period as  specified  in such  Notice of  Borrowing.
Thereafter,  the Borrower may elect to convert such  Borrowing  into 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  Loans  comprising  such  Borrowing,  and the Loans
comprising each such portion shall be considered a separate  Borrowing.  To make
an election pursuant to this Section, the Borrower shall give the Administrative
Agent prior written notice (or telephonic notice promptly  confirmed in writing)
of  each  Borrowing  (a  "Notice  of  Conversion/Continuation")  that  is  to be
converted or continued, as the case may be, (x) prior to 10:00 a.m. one Business
Day prior to the requested  date of a conversion  into a Base Rate Borrowing and
(y) prior to 11:00  a.m.  three  Business  Days  prior to a  continuation  of or
conversion    into   a    Eurodollar    Borrowing.    Each   such    Notice   of
Conversion/Continuation shall be irrevocable and shall specify (i) the Borrowing
to which  such  Notice of  Continuation/Conversion  applies  and,  if  different
options are being  elected  with  respect to  different  portions  thereof,  the
portions thereof that are to be allocated to each resulting  Borrowing (in which
case the information to be specified pursuant to clauses (iii) and (iv) shall be
specified for each resulting Borrowing); (ii) the effective date of the election
made  pursuant  to such  Notice  of  Continuation/Conversion,  which  shall be a
Business  Day,  (iii)  whether  the  resulting  Borrowing  is to be a Base  Rate
Borrowing or a Eurodollar  Borrowing;  and (iv) if the resulting Borrowing is to
be a Eurodollar  Borrowing,  the Interest Period applicable thereto after giving
effect to such election,  which shall be a period contemplated by the definition
of "Interest Period". If any such Notice of  Continuation/Conversion  requests a
Eurodollar Borrowing but does not specify an Interest Period, the Borrower shall
be deemed to have selected an Interest Period of one month. The principal amount
of any  resulting  Borrowing  shall  satisfy  the minimum  borrowing  amount for
Eurodollar  Borrowings and Base Rate Borrowings set forth in Section 2.3. If, on
the expiration of any Interest  Period in respect of any  Eurodollar  Borrowing,
the Borrower shall have failed to deliver a Notice of Conversion/  Continuation,
then, unless such Borrowing is repaid as provided herein,  the Borrower shall be
deemed to have elected to convert such  Borrowing to a Base Rate  Borrowing.  No
Borrowing may be converted  into,  or continued as, a Eurodollar  Borrowing if a
Default  or an Event of  Default  has  occurred  and is  continuing,  unless the
Administrative  Agent and each of the Lenders shall have otherwise  consented in
writing.  No conversion of any Eurodollar Loans shall be permitted except on the
last day of the Interest Period in respect  thereof.  Upon receipt of any Notice
of Conversion/Continuation,  the Administrative Agent shall promptly notify each
Lender of the details  thereof and of such  Lender's  portion of each  resulting
Borrowing.  Reduction and  Termination of  Commitments.  All  Commitments  shall
terminate on the  Termination  Date.  Upon at least three  Business  Days' prior
written  notice (or  telephonic  notice  promptly  confirmed  in writing) to the
Administrative  Agent  (which  notice  shall be  irrevocable),  the Borrower may
reduce the Aggregate  Commitments in part or terminate the Aggregate Commitments
in  whole;  provided,  that (i) any  partial  reduction  shall  apply to  reduce
proportionately  and permanently the Commitment of each Lender, (ii) any partial
reduction  pursuant  to this  Section  2.6  shall  be in an  amount  of at least
$5,000,000 and any larger  multiple of  $1,000,000,  and (iii) no such reduction
shall be permitted that would reduce the Aggregate Commitments to an amount less
than  the  outstanding  Credit  Exposures  of all  Lenders.  On the  date of any
required  prepayment of Loans pursuant to Section 2.9(b),  the Commitments shall
automatically reduce by an amount equal to such required prepayment  (regardless
of whether any Loans are outstanding or are prepaid on such date).  Repayment of
Loans.  The outstanding  principal  amount of all Loans shall be due and payable
(together with accrued and unpaid interest thereon) on the Termination Date.

         Evidence of Indebtedness.

         Each  Lender  shall  maintain  in  accordance  with its usual  practice
appropriate  records  evidencing the indebtedness of the Borrower to such Lender
resulting  from each Loan made by such Lender from time to time,  including  the
amounts of principal and interest  payable  thereon and paid to such Lender from
time to time under this  Agreement.  The  Administrative  Agent  shall  maintain
appropriate  records  in which  shall be  recorded  (i) the  Commitment  of each
Lender,  (ii) the amount of each Loan made  hereunder by each  Lender,  the Type
thereof  and the  Interest  Period  applicable  thereto,  (iii) the date of each
continuation  thereof  pursuant to Section 2.5, (iv) the date of each conversion
of all or a portion  thereof to another  Type  pursuant to Section  2.5, (v) the
date and amount of any  principal  or interest  due and payable or to become due
and payable from the Borrower to each Lender  hereunder in respect of such Loans
and (vi) both the date and  amount  of any sum  received  by the  Administrative
Agent  hereunder from the Borrower in respect of the Loans and each Lender's Pro
Rata Share  thereof.  The  entries  made in such  records  shall be prima  facie
evidence of the existence and amounts of the obligations of the Borrower therein
recorded;   provided,   that  the   failure  or  delay  of  any  Lender  or  the
Administrative  Agent in  maintaining  or making entries into any such record or
any error therein shall not in any manner affect the  obligation of the Borrower
to repay the Loans (both  principal and unpaid accrued  interest) of such Lender
in accordance with the terms of this Agreement.  At the request of any Lender at
any time, the Borrower  agrees that it will execute and deliver to such Lender a
Note, payable to the order of such Lender. Prepayments.  The Borrower shall have
the right at any time and from time to time to prepay any Borrowing, in whole or
in part, without premium or penalty,  by giving  irrevocable  written notice (or
telephonic notice promptly confirmed in writing) to the Administrative  Agent no
later than (i) in the case of prepayment of any Eurodollar Borrowing, 11:00 a.m.
not less than three Business Days prior to any such prepayment,  and (ii) in the
case of any  prepayment of any Base Rate  Borrowing,  not less than one Business
Day prior to the date of such prepayment.  Each such notice shall be irrevocable
and shall specify the proposed date of such prepayment and the principal  amount
of each  Borrowing  or portion  thereof to be prepaid.  Upon receipt of any such
notice, the  Administrative  Agent shall promptly notify each affected Lender of
the contents thereof and of such Lender's Pro Rata Share of any such prepayment.
If such notice is given,  the aggregate amount specified in such notice shall be
due and payable on the date  designated  in such notice,  together  with accrued
interest  to such date on the  amount so  prepaid  in  accordance  with  Section
2.10(c);  provided,  that if a  Eurodollar  Borrowing is prepaid on a date other
than the last day of an Interest Period applicable  thereto,  the Borrower shall
also pay all amounts required pursuant to Section 2.16. Each partial  prepayment
of any Loan  shall be in an amount  that  would be  permitted  in the case of an
advance of a Borrowing of the same Type pursuant to Section 2.2. Each prepayment
of a Borrowing shall be applied ratably to the Loans  comprising such Borrowing.
The Borrower shall promptly notify the Administrative  Agent upon the receipt of
any Net Cash Proceeds  and, at any time that Net Cash Proceeds  received and not
previously applied to any prepayment pursuant to this Section 2.9(b) shall equal
or exceed  $10,000,000,  the Borrower  shall prepay  Borrowings,  together  with
payment of all amounts required pursuant to Section 2.16, in an aggregate amount
equal  to  100%  (without  duplication)  the  Net  Cash  Proceeds  of any  Asset
Disposition, Recovery Event or Additional Debt.

         Interest on Loans.

         The Borrower shall pay interest on each Base Rate Loan at the Base Rate
in effect from time to time and on each  Eurodollar  Loan at the  Adjusted  LIBO
Rate for the applicable  Interest Period in effect for such Loan,  plus, in each
case, the Applicable  Margin in effect from time to time. If an Event of Default
has  occurred and is  continuing,  at the option of the  Required  Lenders,  the
Borrower shall pay interest ("Default  Interest") with respect to all Eurodollar
Loans at the rate otherwise applicable for the then-current Interest Period plus
an  additional  2% per annum  until the last day of such  Interest  Period,  and
thereafter,  and with  respect to all Base Rate Loans and all other  Obligations
hereunder  (other than Loans),  at an all-in rate in effect for Base Rate Loans,
plus an additional 2% per annum.  Interest on the principal  amount of all Loans
shall accrue from and  including  the date such Loans are made to but  excluding
the date of any repayment  thereof.  Interest on all outstanding Base Rate Loans
shall be  payable  quarterly  in arrears  on the last day of each  March,  June,
September and December and on the Termination Date.  Interest on all outstanding
Eurodollar  Loans  shall be  payable  on the last  day of each  Interest  Period
applicable thereto,  and, in the case of any Eurodollar Loans having an Interest
Period in excess of three  months,  on each day that occurs every three  months,
after the initial date of such Interest  Period,  and on the  Termination  Date.
Interest on any Loan that is  converted  into a Loan of another  Type or that is
repaid or prepaid shall be payable on the date of such conversion or on the date
of any such repayment or prepayment  (on the amount repaid or prepaid)  thereof.
All Default Interest shall be payable on demand. The Administrative  Agent shall
determine  each  interest  rate  applicable  to the  Loans  hereunder  and shall
promptly  notify the  Borrower  and the  Lenders of such rate in writing  (or by
telephone,  promptly  confirmed in  writing).  Any such  determination  shall be
conclusive  and  binding  for  all  purposes,   absent  manifest  error.   Fees.
AgencyFees.  The  Borrower  shall  pay to the  Administrative  Agent for its own
account  fees in the amounts and at the times agreed upon by the Borrower in the
Fee  Letter  described  in  clause  (i)  of the  definition  of  "Fee  Letters".
Commitment Fee. The Borrower agrees to pay to the  Administrative  Agent for the
account of each Lender a  commitment  fee which shall  accrue at the  Applicable
Percentage  (determined daily in accordance with Schedule I) on the daily amount
of the  unused  Commitment  of such  Lender  from  the  date  hereof  until  the
Termination  Date.  Accrued  commitment  fees shall be payable in arrears on the
last day of each March,  June,  September and December,  commencing on the first
such  date  to  occur  after  the  date  hereof,  and on the  Termination  Date.
Computation of Interest and Fees.  Interest based on the Administrative  Agent's
prime rate  pursuant  to clause (i) of the  definition  of "Base  Rate" shall be
computed  on the  basis of a year of 365 days (or 366 days in a leap  year)  and
paid  for the  actual  number  of days  elapsed  (including  the  first  day but
excluding  the last day).  All other  interest and all fees shall be computed on
the basis of a year of 360 days and paid for the actual  number of days  elapsed
(including the first day but excluding the last day).

         Inability to Determine Interest Rates.

         If prior to the  commencement of any Interest Period for any Eurodollar
Borrowing,   (i)  the   Administrative   Agent  shall  have  determined   (which
determination shall be conclusive and binding upon the Borrower) that, by reason
of circumstances  affecting the relevant interbank market, adequate means do not
exist  for   ascertaining   LIBOR  for  such  Interest   Period,   or  (ii)  the
Administrative  Agent shall have received notice from the Required  Lenders that
the Adjusted LIBO Rate does not  adequately  and fairly reflect the cost to such
Lenders (or Lender, as the case may be) of making,  funding or maintaining their
Eurodollar Loans for such Interest Period, the  Administrative  Agent shall give
written  notice (or  telephonic  notice,  promptly  confirmed in writing) to the
Borrower  and to the  Lenders  as  soon as  practicable  thereafter.  Until  the
Administrative  Agent  shall  notify  the  Borrower  and the  Lenders  that  the
circumstances giving rise to such notice no longer exist, (i) the obligations of
the Lenders to make Eurodollar Loans or to continue or convert outstanding Loans
as or into Eurodollar  Loans shall be suspended and (ii) all such affected Loans
shall be  converted  into  Base Rate  Loans on the last day of the then  current
Interest  Period  applicable  thereto unless the Borrower  prepays such Loans in
accordance with this Agreement.

         Illegality.

         If any  Change in Law shall  make it  unlawful  or  impossible  for any
Lender to make,  maintain or fund any  Eurodollar  Loan and such Lender shall so
notify the Administrative  Agent, the  Administrative  Agent shall promptly give
notice  thereof to the  Borrower  and the other  Lenders,  whereupon  until such
Lender notifies the Administrative Agent and the Borrower that the circumstances
giving rise to such suspension no longer exist, the obligation of such Lender to
make Eurodollar  Loans, or to continue or convert  outstanding  Loans as or into
Eurodollar Loans, shall be suspended.  In the case of the making of a Eurodollar
Borrowing,  such  Lender's Loan shall be made as a Base Rate Loan as part of the
same  Borrowing for the same Interest  Period,  and, if the affected  Eurodollar
Loan is then  outstanding,  such  Loan  shall be  converted  to a Base Rate Loan
either (i) on the last day of the then current  Interest  Period  applicable  to
such Eurodollar Loan if such Lender may lawfully  continue to maintain such Loan
to such date or (ii)  immediately if such Lender shall determine that it may not
lawfully continue to maintain such Eurodollar Loan to such date. Notwithstanding
the  foregoing,  the affected  Lender shall,  prior to giving such notice to the
Administrative  Agent,  designate a different  Applicable Lending Office if such
designation  would avoid the need for giving such notice and if such designation
would not otherwise be disadvantageous to such Lender in the good faith exercise
of its discretion.

         Increased Costs.

         If any Change in Law shall (i) impose,  modify or deem  applicable  any
reserve,  special deposit or similar  requirement that is not otherwise included
in the  determination  of the Adjusted LIBO Rate  hereunder  against  assets of,
deposits with or for the account of, or credit  extended by, any Lender  (except
any such  reserve  requirement  reflected in the  Adjusted  LIBO Rate);  or (ii)
impose on any Lender or the  eurodollar  interbank  market  any other  condition
affecting this Agreement or any  Eurodollar  Loans made by such Lender,  and the
result of the  foregoing  is to  increase  the cost to such  Lender  of  making,
converting  into,  continuing or maintaining a Eurodollar  Loan or to reduce the
amount  received or receivable by such Lender  hereunder  (whether of principal,
interest or any other  amount),  then the  Borrower  shall  promptly  pay,  upon
written  notice from and demand by such Lender on the  Borrower  (with a copy of
such notice and demand to the Administrative Agent), to the Administrative Agent
for the account of such Lender, within five Business Days after the date of such
notice and demand,  additional  amount or amounts  sufficient to compensate such
Lender for such additional costs incurred or reduction  suffered.  If any Lender
or the  Issuing  Bank  shall have  determined  that on or after the date of this
Agreement any Change in Law regarding capital requirements has or would have the
effect  of  reducing  the rate of  return on such  Lender's  capital  (or on the
capital of such Lender's parent corporation) as a consequence of its obligations
hereunder  to a level  below  that  which such  Lender or such  Lender's  parent
corporation  could  have  achieved  but for  such  Change  in Law  (taking  into
consideration  such Lender's  policies or the policies of such  Lender's  parent
corporation  with respect to capital  adequacy) then, from time to time,  within
five  Business  Days after  receipt by the  Borrower  of written  demand by such
Lender (with a copy thereof to the Administrative Agent), the Borrower shall pay
to such Lender such  additional  amounts as will  compensate such Lender or such
Lender's parent corporation for any such reduction suffered.  A certificate of a
Lender setting forth the amount or amounts  necessary to compensate  such Lender
or such Lender's  parent  corporation  as specified in subsection  (a) or (b) of
this  Section  shall  be  delivered  to  the  Borrower   (with  a  copy  to  the
Administrative  Agent)  and shall be  conclusive,  absent  manifest  error.  The
Borrower  shall pay any such Lender such amount or amounts  within 10 days after
receipt  thereof.  Failure  or  delay  on the  part  of  any  Lender  to  demand
compensation  pursuant to this  Section  shall not  constitute  a waiver of such
Lender's right to demand such compensation.  Funding Indemnity.  In the event of
(i) the payment of any principal of a Eurodollar Loan other than on the last day
of the Interest Period applicable  thereto (including as a result of an Event of
Default), (ii) the conversion or continuation of a Eurodollar Loan other than on
the last day of the Interest Period applicable  thereto, or (iii) the failure by
the Borrower to borrow,  prepay,  convert or continue any Eurodollar Loan on the
date  specified in any applicable  notice  (regardless of whether such notice is
withdrawn or revoked),  then, in any such event,  the Borrower shall  compensate
each Lender,  within five Business  Days after written  demand from such Lender,
for any loss,  cost or  expense  attributable  to such  event.  In the case of a
Eurodollar Loan, such loss, cost or expense shall be deemed to include an amount
determined  by such  Lender  to be the  excess,  if any,  of (A) the  amount  of
interest that would have accrued on the principal amount of such Eurodollar Loan
if such event had not  occurred at the  Adjusted  LIBO Rate  applicable  to such
Eurodollar  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  Eurodollar  Loan) over (B) the  amount of  interest  that would
accrue on the principal  amount of such  Eurodollar  Loan for the same period if
the Adjusted LIBO Rate were set on the date such Eurodollar Loan were prepaid or
converted  or the date on which  the  Borrower  failed  to  borrow,  convert  or
continue such Eurodollar Loan. A certificate as to any additional amount payable
under this Section 2.16  submitted to the Borrower by any Lender (with a copy to
the Administrative Agent) shall be conclusive, absent manifest error.

         Taxes.

         Any and all payments by or on account of any obligation of the Borrower
hereunder  shall  be made  free  and  clear  of and  without  deduction  for any
Indemnified  Taxes or  Other  Taxes;  provided,  that if the  Borrower  shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable  shall be  increased  as  necessary so that after making all
required deductions  (including deductions applicable to additional sums payable
under this Section) the Administrative Agent, any Lender shall receive an amount
equal to the sum it would have received had no such  deductions  been made, (ii)
the Borrower  shall make such  deductions  and (iii) the Borrower  shall pay the
full amount deducted to the relevant  Governmental  Authority in accordance with
applicable  law.  In  addition,  the  Borrower  shall pay any Other Taxes to the
relevant Governmental  Authority in accordance with applicable law. The Borrower
shall indemnify the Administrative  Agent and each Lender,  within five Business
Days after written demand therefor, for the full amount of any Indemnified Taxes
or Other Taxes paid by the Administrative  Agent or such Lender, as the case may
be, on or with respect to any payment by or on account of any  obligation of the
Borrower  hereunder  (including  Indemnified  Taxes or Other  Taxes  imposed  or
asserted on or  attributable  to amounts  payable  under this  Section)  and any
penalties,  interest and reasonable  expenses arising  therefrom or with respect
thereto,  whether or not such Indemnified Taxes or Other Taxes were correctly or
legally  imposed  or  asserted  by  the  relevant  Governmental   Authority.   A
certificate  as to the amount of such  payment  or  liability  delivered  to the
Borrower  by a Lender,  or by the  Administrative  Agent on its own behalf or on
behalf  of a Lender,  shall be  conclusive  absent  manifest  error.  As soon as
practicable  after  any  payment  of  Indemnified  Taxes or  Other  Taxes by the
Borrower  to a  Governmental  Authority,  the  Borrower  shall  deliver  to  the
Administrative  Agent the  original or a certified  copy of a receipt  issued by
such  Governmental  Authority  evidencing  such  payment,  a copy of the  return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative  Agent. Each Foreign Lender represents and warrants to the
Administrative Agent and the Borrower that, as of the date such Lender becomes a
party  to  this  Agreement,  such  Lender  is  entitled  to  an  exemption  from
withholding  tax under the Code or any  treaty to which the  United  States is a
party with respect to payments  under this  Agreement,  and each Foreign  Lender
shall deliver to the Borrower (with a copy to the Administrative  Agent), at the
time or times prescribed by applicable law, such properly completed and executed
documentation  prescribed  by  applicable  law or  reasonably  requested  by the
Borrower as will permit such  payments to be made without  withholding.  Without
limiting the  generality of the  foregoing,  each Foreign  Lender agrees that it
will deliver to the  Administrative  Agent and the Borrower (or in the case of a
Participant,  to the Lender from which the related participation shall have been
purchased),  as appropriate,  two duly completed  copies of (i) Internal Revenue
Service  Form  W-8 ECI,  or any  successor  form  thereto,  certifying  that the
payments  received from the Borrower  hereunder are  effectively  connected with
such Foreign  Lender's  conduct of a trade or business in the United States;  or
(ii)  Internal  Revenue  Service Form W-8 BEN, or any  successor  form  thereto,
certifying  that such Foreign Lender is entitled to benefits under an income tax
treaty to which the United States is a party that exempts from U.S.  withholding
tax payments of interest  hereunder;  or (iii) Internal Revenue Service Form W-8
BEN, or any successor form prescribed by the Internal Revenue Service,  together
with a  certificate  (A)  establishing  that the payment to the  foreign  lender
qualifies as "portfolio  interest"  exempt from U.S.  withholding tax under Code
section  871(h) or 881(c),  and (B) stating that (1) the Foreign Lender is not a
bank  for  purposes  of Code  section  881(c)(3)(A),  or the  obligation  of the
Borrower hereunder is not, with respect to such Foreign Lender, a loan agreement
entered into in the ordinary course of its trade or business, within the meaning
of that section; (2) the Foreign Lender is not a 10% shareholder of the Borrower
within the  meaning  of Code  section  871(h)(3)  or  881(c)(3)(B);  and (3) the
Foreign Lender is not a controlled  foreign  corporation  that is related to the
Borrower  within the meaning of Code  section  881(c)(3)(C);  or (iv) such other
Internal  Revenue  Service  forms as may be  applicable  to the Foreign  Lender,
including  Forms W-8 IMY or W-8 EXP.  Each such Foreign  Lender shall deliver to
the Borrower and the Administrative  Agent such forms on or before the date that
it becomes a party to this  Agreement  (or in the case of a  Participant,  on or
before  the date such  Participant  purchases  the  related  participation).  In
addition,  each such Foreign  Lender shall deliver such forms  promptly upon the
obsolescence  or  invalidity  of any form  previously  delivered by such Foreign
Lender.  Each such  Foreign  Lender shall  promptly  notify the Borrower and the
Administrative  Agent at any time that it  determines  that it is no longer in a
position to provide any previously delivered certificate to the Borrower (or any
other form of  certification  adopted by the Internal  Revenue  Service for such
purpose).  Payments  Generally;  Pro Rata  Treatment;  Sharing of Set-offs.  The
Borrower shall make each payment required to be made by it hereunder (whether of
principal,  interest or fees, or of amounts  payable under Section 2.15, 2.16 or
2.17,  or  otherwise)  prior to 12:00  noon 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 the Payment  Office,  except that payments  pursuant to
Sections  2.15,  2.16 and 2.17 and 11.3 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 made payable for the period of such  extension.  All
payments  hereunder shall be made in Dollars.  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. 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 that
would result 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  participation  is  purchased  and all or any portion of the payment
giving rise thereto is recovered,  such participation shall be rescinded and the
purchase price restored to the extent of such recovery,  without  interest,  and
(ii) the  provisions of this  subsection  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
or  participant,  other than to the  Borrower  or any  Subsidiary  or  Affiliate
thereof  (as to which  the  provisions  of this  subsection  shall  apply).  The
Borrower  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 the  Borrower  rights of
set-off and counterclaim with respect to such  participation as fully as if such
Lender  were  a  direct   creditor  of  the  Borrower  in  the  amount  of  such
participation.  Unlessthe  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 Lenders  hereunder  that the Borrower will not make
such  payment,  the  Administrative  Agent may assume that the Borrower has made
such payment on such date in accordance  herewith and may, in reliance upon such
assumption,  distribute to the Lenders the amount or amounts due. In such event,
if the Borrower has not in fact made such  payment,  then each Lender  severally
agrees to repay to the  Administrative  Agent  forthwith on demand the amount so
distributed  to such  Lender  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 Rate
and a rate  determined by the  Administrative  Agent in accordance  with banking
industry rules on interbank  compensation.  If any Lender shall fail to make any
payment  required to be made by it pursuant to Section  2.4(a) or 11.3(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 Lender to satisfy such Lender's  obligations under
such Sections until all such unsatisfied  obligations are fully paid. Mitigation
of  Obligations;  Replacement of Lenders.  If any Lender  requests  compensation
under Section 2.15, 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  2.17,  then such  Lender  shall use  reasonable  efforts to
designate a different  lending office for funding or booking its Loans hereunder
or to assign its rights and  obligations  hereunder  to another of its  offices,
branches  or  affiliates,  if,  in  the  sole  judgment  of  such  Lender,  such
designation  or assignment (i) would  eliminate or reduce amounts  payable under
Section 2.15 or Section  2.17,  as the case may be, in the future and (ii) would
not  subject  such  Lender to any  unreimbursed  cost or  expense  and would not
otherwise be  disadvantageous  to such Lender. The Borrower hereby agrees to pay
all  costs  and  expenses  incurred  by  any  Lender  in  connection  with  such
designation or assignment.  If any Lender  requests  compensation  under Section
2.15, or if the Borrower is required to pay any additional  amount to any Lender
or any  Governmental  Authority of the account of any Lender pursuant to Section
2.17, or if any Lender defaults in its obligation to fund Loans hereunder,  then
the Borrower may, at its sole expense and effort, upon notice to such Lender and
the Administrative  Agent,  require such Lender to assign and delegate,  without
recourse  (in  accordance  with and  subject  to the  restrictions  set forth in
Section 11.4(b) all its interests,  rights and obligations  under this Agreement
to an assignee that shall assume such obligations (which assignee may be another
Lender);  provided,  that (i) the Borrower shall have received the prior written
consent of the  Administrative  Agent,  which consent shall not be  unreasonably
withheld, (ii) such Lender shall have received payment of an amount equal to the
outstanding  principal amount of all Loans owed to it, accrued interest thereon,
accrued fees and all other amounts  payable to it  hereunder,  from the assignee
(in the case of such  outstanding  principal and accrued  interest) and from the
Borrower (in the case of all other amounts) and (iii) in the case of a claim for
compensation  under  Section  2.15 or payments  required to be made  pursuant to
Section 2.17, such assignment will result in a reduction in such compensation or
payments.  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.

CONDITIONS PRECEDENT TO LOANS

         Conditions To Effectiveness.

         The obligations of the Lenders to make Loans hereunder shall not become
effective until the date on which each of the following  conditions is satisfied
(or waived in accordance with Section 11.2).

         The Administrative Agent shall have received all fees and other amounts
due and payable under the Loan  Documents and the Fee Letters on or prior to the
Closing Date, including  reimbursement or payment of all out-of-pocket  expenses
(including  reasonable  fees,  charges  and  disbursements  of  counsel  to  the
Administrative  Agent) required to be reimbursed or paid by the Borrower,  under
any Loan Document or the Fee Letters.

         The  Administrative  Agent (or its  counsel)  shall have  received  the
following,  each in the form specified or, if no form is specified,  in form and
substance  satisfactory  to the  Administrative  Agent:  a  counterpart  of this
Agreement  signed by or on behalf of each  party  thereto  or  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;  ifrequested  by any  Lender,  a Note
payable to such Lender,  duly  executed by the Borrower;  a  counterpart  of the
Subsidiary Guarantee Agreement,  duly executed by each Guarantor;  a certificate
of the  Secretary  or  Assistant  Secretary  of each Loan Party,  attaching  and
certifying  copies of its  Constituent  Documents and of the  resolutions of its
board  of  directors  (or  other  comparable  authorizations),  authorizing  the
execution, delivery and performance of the Loan Documents to which it is a party
and certifying  the name,  title and true signature of each officer of such Loan
Party executing the Loan Documents to which it is a party;  certificates of good
standing or  existence,  as the case may be, from the  Secretary of State of the
jurisdiction  of  organization  of each Loan Party and each  other  jurisdiction
where each such Loan Party is (x)  required to be  qualified to do business as a
foreign  corporation and (y) owns,  leases or operates  common carrier  pipeline
assets; a favorable written opinion of Fulbright & Jaworski,  L.L.P., counsel to
the Loan Parties, addressed to the Administrative Agent and each of the Lenders,
substantially  in the form of Exhibit F; a  certificate,  dated the Closing Date
and signed by a Responsible Officer of the Borrower,  confirming compliance with
the conditions set forth in clauses (i) and (ii) of Section 3.2; acertified copy
of the Acquisition  Agreement,  together with evidence that upon the application
of the  proceeds of the  initial  Loans,  the  acquisition  contemplated  by the
Acquisition  Agreement will be consummated in accordance  with the terms thereof
and without any material deviations therefrom; a certificate of the Secretary or
Assistant  Secretary of the  Borrower,  attaching and  certifying  copies of all
consents,  approvals,  authorizations,  registrations  and  filings  and  orders
required or advisable to be made or obtained under any Requirement of Law, or by
any  contractual or legal  obligation of each Loan Party, in connection with the
execution,  delivery,  performance,  validity  and  enforceability  of the  Loan
Documents or any of the transactions  contemplated  thereby,  and such consents,
approvals,  authorizations,  registrations,  filings and orders shall be in full
force and effect and all  applicable  waiting  periods shall have  expired;  and
Copies  of (A)  the  unaudited  quarterly  financial  statements  of KPP and its
Subsidiaries on a consolidated  basis for the fiscal quarter ending on September
30, 2000, and (B) the audited  consolidated  financial statements of KPP and its
Subsidiaries  for the fiscal year ending December 31, 1999. Each Borrowing.  The
obligation  of each Lender to make a Loan on the  occasion of any  Borrowing  is
subject to the satisfaction of the following conditions:

                  at the time of and  immediately  after  giving  effect to such
         Borrowing,  no Default or Event of Default  shall have  occurred and be
         continuing;  and the  representations and warranties of each Loan Party
         set forth in the Loan  Documents  to which  each  such Loan  Party is a
         party shall be true and correct in all  material  respects on and as of
         the date of such Borrowing, in each case before and after giving effect
         thereto;  the  Administrative  Agent  shall  have  received  Notice  of
         Borrowing,  duly  completed,  executed and delivered in accordance with
         the terms hereof; and the Administrative Agent shall have received such
         other  documents,  certificates,  information  or legal opinions as the
         Administrative  Agent or the Required  Lenders may reasonably  request,
         all in form and substance reasonably satisfactory to the Administrative
         Agent or the  Required  Lenders.  Each  Borrowing  shall be  deemed  to
         constitute  a  representation  and warranty by the Borrower on the date
         thereof as to the  matters  specified  in clauses  (i) and (ii) of this
         Section 3.2. Post Closing.  Within 45 days  following the Closing Date,
         the  Administrative  Agent shall have received  evidence that all Liens
         securing the obligations of the Borrower and its Subsidiaries under the
         UK Facility have been released. Within seven days following the Closing
         Date,  the  Administrative  Agent  shall have  received  copies of duly
         executed  payoff letters  evidencing  that upon the  application of the
         proceeds of the initial Loans,  the Existing  Indebtedness  was paid in
         full.

         Delivery of Documents.

         All Loan  Documents,  certificates,  legal opinions and other documents
referred to in this Article III shall, unless otherwise specified,  be delivered
to the  Administrative  Agent for the account of each Lender and, except for the
Notes, in sufficient counterparts or copies for each Lender.

REPRESENTATIONS AND WARRANTIES

         The Borrower  represents and warrants to the  Administrative  Agent and
each Lender as follows:

         Existence; Power.

         Each Loan  Party and each of its  Subsidiaries  (i) is duly  organized,
validly  existing and in good standing under the laws of the jurisdiction of its
organization,  (ii)  has all  requisite  power  and  authority  to  carry on its
business as now conducted,  and (iii) is duly qualified to do business and is in
good standing in each jurisdiction where such qualification is required,  except
where a failure to be so qualified could not reasonably be expected to result in
a Material Adverse Effect.

         Organizational Power; Authorization; Enforceability.

         The execution,  delivery and performance by each Loan Party of the Loan
Documents  to which it is a party are within  such Loan  Party's  organizational
powers and have been duly  authorized  by all necessary  organizational,  and if
required, stockholder, member or partner (as applicable), action. This Agreement
has been duly executed and delivered by KPP and the Borrower,  and  constitutes,
and each other Loan  Document to which any Loan Party is a party,  when executed
and delivered by such Loan Party, will constitute,  the legal, valid and binding
obligation  of KPP,  the  Borrower  or such  Loan  Party  (as the  case may be),
enforceable against KPP, the Borrower or such Loan Party (as the case may be) in
accordance with its respective terms.

         Governmental Approvals; No Conflicts.

         The execution, delivery and performance by each Loan Party of each Loan
Document to which it is a party (i) do not  require any consent or approval  of,
registration  or filing  with,  or any action by,  any  Governmental  Authority,
except  those as have been  obtained  or made and are in full force and  effect,
(ii) will not  violate  any  applicable  law or  regulation  or the  Constituent
Documents of such Loan Party or any of its Subsidiaries or any judgment or order
of any  Governmental  Authority,  (iii) will not  violate or result in a default
under any indenture,  material agreement or other material instrument binding on
such Loan Party or any of its  Subsidiaries or any of its assets or give rise to
a right  thereunder  to require any payment to be made by such Loan Party or any
of its  Subsidiaries  and (iv) will not result in the creation or  imposition of
any Lien on any  asset of such  Loan  Party or any of its  Subsidiaries,  except
Liens (if any) created under the Loan Documents.

         Financial Statements.

         The Borrower has furnished to each Lender (i) the audited  consolidated
balance  sheet  of KPP and its  Subsidiaries  as of  December  31,  1999 and the
related consolidated  statements of income,  shareholders' equity and cash flows
for the  fiscal  year then  ended  prepared  by KPMG LLP and (ii) the  unaudited
consolidated  balance  sheet  of KPP and its  Subsidiaries  as at the end of the
September 30, 2000, and the related unaudited consolidated  statements of income
and cash flows for the fiscal  quarter  and  year-to-date  period  then  ending,
certified by a Responsible  Officer of KPP.  Such  financial  statements  fairly
present the consolidated  financial  condition of KPP and its Subsidiaries as of
such  dates and the  consolidated  results  of  operations  for such  periods in
conformity with GAAP consistently applied, subject to year end audit adjustments
and the absence of footnotes in the case of the statements referred to in clause
(ii).  Since  December 31, 1999,  there have been no changes with respect to KPP
and its  Subsidiaries  or the  Borrower  which have had or could  reasonably  be
expected to have, singly or in the aggregate, a Material Adverse Effect.

         Litigation and Environmental Matters.

         No litigation, investigation or proceeding of or before any arbitrators
or  Governmental  Authorities  is pending  against or, to the  knowledge  of the
Borrower,  threatened  against  or  affecting  any  Loan  Party  or  any  of its
Subsidiaries (i) that could reasonably be expected to have, either  individually
or in the aggregate,  a Material Adverse Effect or (ii) that in any manner draws
into question the validity or enforceability of this Agreement or any other Loan
Document. Exceptfor the matters set forth on Schedule 4.5, no Loan Party nor any
of its  Subsidiaries (i) has failed to comply with any  Environmental  Law or to
obtain,  maintain or comply with any permit,  license or other approval required
under any  Environmental  Law,  (ii) has  become  subject  to any  Environmental
Liability,  (iii)  has  received  notice  of  any  claim  with  respect  to  any
Environmental  Liability  or (iv)  knows  of any  basis  for  any  Environmental
Liability, where any such event or circumstance described in clauses (i) through
(iv) above(A) could  reasonably be expected to have,  either  individually or in
the  aggregate,  a  Material  Adverse  Effect or (B) in any  manner  draws  into
question  the  validity or  enforceability  of this  Agreement or any other Loan
Document.  Compliance with Laws and Agreements.  Each Loan Party and each of its
Subsidiaries is in compliance with (i) all applicable laws,  rules,  regulations
and orders of any Governmental Authority, and (ii) all indentures, agreements or
other   instruments   binding   upon  it  or  its   properties,   except   where
non-compliance,  either  singly or in the  aggregate,  could not  reasonably  be
expected to result in a Material Adverse Effect.

         Investment Company Act, Etc.

         Neither KPP nor any of its Subsidiaries is (i) an "investment company",
as defined in, or subject to regulation  under,  the  Investment  Company Act of
1940,  as  amended,  (ii) a  "holding  company"  as  defined  in, or  subject to
regulation  under, the Public Utility Holding Company Act of 1935, as amended or
(iii) otherwise  subject to any other regulatory  scheme limiting its ability to
incur debt.

         Taxes.

         KPP and its  Subsidiaries  and each other Person the taxes of which KPP
or any  Subsidiary  of KPP could become liable have timely filed or caused to be
filed all Federal income tax returns and all other material tax returns that are
required  to be filed  by them,  and  have  paid all  taxes  shown to be due and
payable on such  returns or on any  assessments  made against it or its property
and all other taxes,  fees or other charges imposed on it or any of its property
by any  Governmental  Authority,  except (i) to the extent the  failure to do so
would not have a Material  Adverse  Effect or (ii) where the same are  currently
being  contested in good faith by appropriate  proceedings  and for which KPP or
such  Subsidiary,  as the  case may be,  has set  aside  on its  books  adequate
reserves.  The  charges,  accruals  and  reserves  on the  books  of KPP and its
Subsidiaries in respect of such taxes are adequate,  and no tax liabilities that
could be materially in excess of the amount so provided are anticipated.

         Margin Regulations.

         None of the proceeds of any of the Loans will be used for  "purchasing"
or "carrying" any "margin  stock" with the  respective  meanings of each of such
term under Regulation U or for any purpose that violates the Margin Regulations.

         ERISA.

         No ERISA Event has  occurred or is  reasonably  expected to occur that,
when taken  together  with all other  such ERISA  Events,  could  reasonably  be
expected  to result in a  Material  Adverse  Effect.  The  present  value of all
accumulated  benefit  obligations under each Plan (based on the assumptions used
for purposes of Statement of Financial Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts,  exceed by more
than  $5,000,000  the fair  market  value of the  assets of such  Plan,  and the
present value of all accumulated  benefit  obligations of all underfunded  Plans
(based on the assumptions used for purposes of Statement of Financial  Standards
No.  87)  did  not,  as of the  date of the  most  recent  financial  statements
reflecting such amounts, exceed by more than $5,000,000 the fair market value of
the assets of all such underfunded Plans.

         Ownership of Property.

         Each of the Loan Party and its Subsidiaries has good title to, or valid
leasehold  interests in, all of its real and personal  property  material to the
operation of its business.  Each of the Loan Party and its Subsidiaries owns, or
is licensed,  or  otherwise  has the right,  to use,  all  patents,  trademarks,
service marks,  tradenames,  copyrights and other intellectual property material
to its  business,  and the use  thereof by such Loan Party and its  Subsidiaries
does not  infringe  on the  rights  of any  other  Person,  except  for any such
infringements that, individually or in the aggregate,  would not have a Material
Adverse  Effect.  Disclosure.  The  Borrower  has  disclosed  to the Lenders all
agreements,  instruments and corporate or other  restrictions to which each Loan
Party or any of its Subsidiaries is subject,  and all other matters known to any
of them, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect.  Neither the Information Memorandum nor any
of the reports  (including  without  limitation all reports that the Borrower is
required  to file  with  the  Securities  and  Exchange  Commission),  financial
statements,  certificates or other information  furnished by or on behalf of any
Loan  Party to the  Administrative  Agent or any Lender in  connection  with the
negotiation  or  syndication  of this  Agreement  or any other Loan  Document or
delivered  hereunder or  thereunder  (as modified or  supplemented  by any other
information so furnished) contains any material misstatement of fact or omits to
state any material fact  necessary to make the  statements  therein,  taken as a
whole, in light of the circumstances under which they were made, not misleading;
provided,  that with respect to projected  financial  information,  the Borrower
represents  only that such  information  was  prepared  in good faith based upon
assumptions believed to be reasonable at the time.

         Labor Relations.

         There are no strikes,  lockouts  or other  material  labor  disputes or
grievances  against  any  Loan  Party  or any of its  Subsidiaries,  or,  to the
Borrower's  knowledge,  threatened against or affecting any Loan Party or any of
its  Subsidiaries,   and  no  significant  unfair  labor  practice,  charges  or
grievances are pending  against the Borrower or any of its  Subsidiaries,  or to
the Borrower's knowledge, threatened against any of them before any Governmental
Authority.  All  payments  due from any  Loan  Party or any of its  Subsidiaries
pursuant to the provisions of any collective bargaining agreement have been paid
or accrued as a liability on the books of such Loan Party or such Subsidiary (as
applicable),  except where the failure to do so could not reasonably be expected
to have a Material Adverse Effect.

         Acquisition Agreement.

         The Acquisition Agreement is the legal, valid and binding obligation of
each party thereto,  enforceable  against each such party in accordance with its
terms.

         Subsidiaries, Significant Affiliates and Guarantors.

         Schedule 4.15 sets forth the name of, the ownership interest of KPP in,
the  jurisdiction of  incorporation  of, and the type of, each Subsidiary of KPP
and each  Significant  Affiliate and identifies  each Subsidiary of KPP and each
Significant Affiliate that is a Guarantor, in each case, as of the date hereof.

         Liens.

         Schedule  7.2 sets forth all Liens  existing  on the date hereof on any
property or asset of KPP or any Subsidiary of KPP.

AFFIRMATIVE COVENANTS

         KPP and the Borrower (as applicable) covenant and agree that so long as
any Lender has a Commitment  hereunder  or the  principal of and interest on any
Loan or any fee or any other amount payable hereunder remains unpaid:

         Financial Statements and Other Information.

         The Borrower will deliver to the Administrative Agent and each Lender:

                  as soon as available and in any event within 95 days after the
         end of each fiscal year of KPP, a copy of the annual audited report for
         such  fiscal  year  for  KPP  and  its   Subsidiaries,   containing   a
         consolidated balance sheet of KPP and its Subsidiaries as of the end of
         such  fiscal year and the related  consolidated  statements  of income,
         stockholders'  equity  and cash  flows  (together  with  all  footnotes
         thereto)  of KPP and its  Subsidiaries  for such fiscal  year,  setting
         forth in each case in  comparative  form the figures  for the  previous
         fiscal year,  all in  reasonable  detail and reported on by KPMG LLP or
         other independent public accountants of nationally  recognized standing
         (without  a  "going  concern"  or  like  qualification,   exception  or
         explanation and without any  qualification  or exception as to scope of
         such audit) to the effect that such financial statements present fairly
         in all material  respects the  financial  condition  and the results of
         operations  of KPP and  its  Subsidiaries  for  such  fiscal  year on a
         consolidated  basis in accordance with GAAP and that the examination by
         such  accountants  in  connection  with  such  consolidated   financial
         statements has been made in accordance with generally accepted auditing
         standards;  as soon as available  and in any event within 50 days after
         the end of each of the first three fiscal  quarters of each fiscal year
         of  KPP,  an  unaudited  consolidated  balance  sheet  of KPP  and  its
         Subsidiaries  as of the  end of such  fiscal  quarter  and the  related
         unaudited  consolidated  statements of income and cash flows of KPP and
         its  Subsidiaries  for such fiscal quarter and the then elapsed portion
         of such fiscal year, setting forth in each case in comparative form the
         figures for the corresponding  quarter and the corresponding portion of
         KPP's previous  fiscal year, all certified by a Responsible  Officer of
         KPP  as  presenting  fairly  in all  material  respects  the  financial
         condition and results of operations  of KPP and its  Subsidiaries  on a
         consolidated  basis in accordance with GAAP, subject to normal year-end
         audit  adjustments and the absence of footnotes;  concurrently with the
         delivery of the financial statements referred to in subsections (a) and
         (b) above, a certificate of a Responsible Officer of the Borrower,  (i)
         certifying as to whether a Default or Event of Default has occurred and
         is continuing on the date of such  certificate,  and if a Default or an
         Event of Default then has occurred and is  continuing,  specifying  the
         details  thereof and the action that the Borrower has taken or proposes
         to take with respect thereto,  (ii) setting forth in reasonable  detail
         calculations demonstrating compliance with Article VI and (iii) stating
         whether any change in GAAP or the  application  thereof  affecting  the
         calculations described in clause (ii) above has occurred since the date
         of the audited  financial  statements of KPP referred to in Section 4.4
         and, if any change has occurred,  specifying  the effect of such change
         on the financial statements accompanying such certificate; concurrently
         with the delivery of the financial statements referred to in subsection
         (a) above, a certificate  of the accounting  firm that reported on such
         financial  statements  stating whether it obtained any knowledge during
         the  course of its  examination  of such  financial  statements  of any
         Default or Event of Default  (which  certificate  may be limited to the
         extent required by accounting rules or guidelines);  promptly after the
         same  become  publicly  available,  copies  of all  periodic  and other
         reports, proxy statements and other materials filed with the Securities
         and Exchange  Commission,  or any Governmental  Authority succeeding to
         any  or  all  functions  of  said  Commission,  or  with  any  national
         securities  exchange,  or  distributed  by KPP or the  Borrower  to its
         security  holders   generally;   and  promptly  following  any  request
         therefor,  such other information  regarding the results of operations,
         business  affairs and  financial  condition  of KPP, the Borrower or of
         their respective Subsidiaries as the Administrative Agent or any Lender
         may reasonably  request.  Notices of Material Events. The Borrower will
         furnish to the  Administrative  Agent and each  Lender  prompt  written
         notice  of the  following,  in  each  case,  accompanied  by a  written
         statement of a  Responsible  Officer of the Borrower  setting forth the
         details  of the event or  development  requiring  such  notice  and any
         action taken or proposed to be taken with respect thereto:

                  the occurrence of any Default or Event of Default;  the filing
         or  commencement  of any action,  suit or  proceeding  by or before any
         arbitrator or  Governmental  Authority  against or, to the knowledge of
         the Borrower,  affecting  any Loan Party or any  Subsidiary of any Loan
         Party that, if adversely  determined,  could  reasonably be expected to
         result in a Material Adverse Effect; the occurrence of any event or any
         other development by which any Loan Party or any Subsidiary of any Loan
         Party (i)  fails to comply  with any  Environmental  Law or to  obtain,
         maintain or comply with any permit,  license or other approval required
         under any Environmental  Law, (ii) becomes subject to any Environmental
         Liability,  (iii)  receives  notice of any claim  with  respect  to any
         Environmental  Liability,  or (iv)  becomes  aware of any basis for any
         Environmental  Liability  and in each of the preceding  clauses,  which
         individually  or in the  aggregate,  could  reasonably  be  expected to
         result in a Material Adverse Effect;  the occurrence of any ERISA Event
         that alone, or together with any other ERISA Events that have occurred,
         could  reasonably  be  expected to result in  liability  of KPP and its
         Subsidiaries in an aggregate amount exceeding $5,000,000; and any other
         development  that results in, or could reasonably be expected to result
         in, a Material  Adverse  Effect.  Existence;  Conduct of Business.  KPP
         will,  and will  cause each of its  Subsidiaries  to, do or cause to be
         done all things necessary to preserve, renew and maintain in full force
         and effect its legal  existence and its  respective  rights,  licenses,
         permits, privileges,  franchises,  patents, copyrights,  trademarks and
         trade names  material to the conduct of its business and will  continue
         to engage in the same  business as  presently  conducted  or such other
         businesses that are reasonably related thereto;  provided, that nothing
         in this Section shall prohibit any merger,  consolidation,  liquidation
         or dissolution permitted under Section 7.3.

         Compliance with Laws, Etc.

         KPP will, and will cause each of its  Subsidiaries  to, comply with all
laws,  rules,   regulations  and  requirements  of  any  Governmental  Authority
applicable  to its  properties,  except  where  the  failure  to do  so,  either
individually or in the aggregate,  could not reasonably be expected to result in
a Material Adverse Effect.

         Payment of Obligations.

         KPP will, and will cause each of its Subsidiaries to, pay and discharge
at or before maturity, all of its obligations and liabilities (including without
limitation all tax liabilities and claims that could result in a statutory Lien)
before the same shall  become  delinquent  or in default,  except  where (i) the
validity  or amount  thereof is being  contested  in good  faith by  appropriate
proceedings,  (ii) KPP or such  Subsidiary  has set aside on its books  adequate
reserves with respect  thereto in accordance  with GAAP and (iii) the failure to
make payment  pending such contest could not reasonably be expected to result in
a Material Adverse Effect.

         Books and Records.

         KPP will, and will cause each of its Subsidiaries to, keep proper books
of record and account in which full,  true and correct  entries shall be made of
all dealings and  transactions in relation to its business and activities to the
extent necessary to prepare the consolidated financial statements of Borrower in
conformity with GAAP.

         Visitation, Inspection, Etc.

         KPP will,  and will  cause  each of its  Subsidiaries  to,  permit  any
representative of the  Administrative  Agent or any Lender, to visit and inspect
its  properties,  to examine  its books and  records and to make copies and take
extracts therefrom,  and to discuss its affairs,  finances and accounts with any
of its officers and with its independent  certified public  accountants,  all at
such reasonable times and as often as the Administrative Agent or any Lender may
reasonably request after reasonable prior notice to KPP; provided,  however,  if
an Event of Default has  occurred  and is  continuing,  no prior notice shall be
required.

         Maintenance of Properties; Insurance.

         KPP will,  and will  cause  each of its  Subsidiaries  to, (i) keep and
maintain  all  property  material to the conduct of its business in good working
order and  condition,  except for  ordinary  wear and tear and except  where the
failure to do so, either individually or in the aggregate,  could not reasonably
be  expected  to result in a  Material  Adverse  Effect and (ii)  maintain  with
financially sound and reputable insurance  companies,  insurance with respect to
its   properties   and  business,   and  the  properties  and  business  of  its
Subsidiaries, against loss or damage of the kinds customarily insured against by
companies  in the same or similar  businesses  operating  in the same or similar
locations.

         Use of Proceeds.

         The  Borrower  will  use the  proceeds  of all  Loans  to  finance  the
acquisition contemplated by the Acquisition Agreement, to refinance the Existing
Indebtedness  (including  the payment of associated  make-wholes)  and for other
general corporate purposes of the Borrower and its Subsidiaries.  No part of the
proceeds  of any Loan will be used,  whether  directly  or  indirectly,  for any
purpose that would  violate any rule or  regulation of the Board of Governors of
the Federal Reserve System, including Regulation T, U or X.

         Additional Subsidiaries.

         If any  additional  Significant  Subsidiary  (other  than any  Excluded
Subsidiary  and any Foreign  Subsidiary)  is  acquired or formed  after the date
hereof, KPP will, within ten business days after such Significant  Subsidiary is
acquired or formed,  notify the Administrative Agent and the Lenders thereof and
will  cause such  Significant  Subsidiary  to become a  Guarantor  by  executing
agreements  in the form of Annex I to Exhibit C and will cause such  Significant
Subsidiary to deliver  simultaneously  therewith such  certificates,  documents,
opinions of counsel  and other  information  regarding  such  Guarantor  and the
enforceability  against such Guarantor of the Subsidiary  Guarantee Agreement as
the Administrative Agent may reasonably request.

FINANCIAL COVENANTS

         KPP and the Borrower (as applicable) covenant and agree that so long as
any Lender has a Commitment  hereunder or the principal of or interest on or any
Loan remains  unpaid or any fee or any other amount  payable  hereunder  remains
unpaid:

         Funded Debt to EBITDA.

         KPP and its  Subsidiaries  will maintain,  as of the end of each fiscal
quarter of KPP, a ratio of Consolidated  Funded Debt to  Consolidated  EBITDA of
not more than 3.75 to 1.00, measured,  in each case, for the four-fiscal quarter
period ending on each date of such determination.

         Consolidated EBITDA to Consolidated Interest Expense.

         KPP and its  Subsidiaries  will maintain,  as of the end of each fiscal
quarter of KPP, a ratio of Consolidated EBITDA to Consolidated  Interest Expense
of not less than  3.00 to 1.00,  measured,  in each  case,  for the  four-fiscal
quarter period ending on each date of such determination..

         Consolidated Net Worth.

         KPP will not permit its  Consolidated  Net Worth at any time to be less
than an amount  equal to 80% of the  Consolidated  Net Worth as at December  31,
1999, plus 80% of the Net Cash Proceeds of any Equity Event by KPP or any of its
Subsidiaries.

NEGATIVE COVENANTS

         KPP and the Borrower (as applicable) covenant and agree that so long as
any Lender has a  Commitment  hereunder  or the  principal of or interest on any
Loan remains  unpaid or any fee or any other amount  payable  hereunder  remains
unpaid:

         Indebtedness.

         KPP will not, and will not permit any of its  Subsidiaries  to, create,
incur, assume or suffer to exist any Indebtedness, except:

                  Indebtedness created pursuant to the Loan Documents and, until
         the  application  of the  proceeds of the initial  Loans,  the Existing
         Indebtedness;  and other  Indebtedness the incurrence of which does not
         otherwise result in the occurrence of a Default or an Event of Default.

         Negative Pledge.

         KPP will not, and will not permit any of its  Subsidiaries  to, create,
incur,  assume or suffer to exist any Lien on any of its assets or property  now
owned or hereafter acquired, except:

                  Permitted Encumbrances;  any Liens on any property or asset of
         KPP or any  Subsidiary  of KPP existing on the date hereof set forth on
         Schedule  7.2;  provided,  that such Lien  shall not apply to any other
         property or asset of KPP or any such  Subsidiary;  purchase money Liens
         upon or in any fixed or capital  assets to secure the purchase price or
         the cost of construction or improvement of such fixed or capital assets
         or to secure Indebtedness  incurred solely for the purpose of financing
         the  acquisition,  construction or improvement of such fixed or capital
         assets (including Liens securing Capital Lease Obligations);  provided,
         that (i) such Lien  attaches  to such asset  concurrently  or within 90
         days  after  the   acquisition,   improvement   or  completion  of  the
         construction  thereof;  (ii)  such  Lien  does not  extend to any other
         asset; and (iii) the  Indebtedness  secured thereby does not exceed the
         cost of  acquiring,  constructing  or  improving  such fixed or capital
         assets;  any Lien (i)  existing  on any asset of any Person at the time
         such Person  becomes a Subsidiary of KPP, (ii) existing on any asset of
         any  Person at the time such  Person is merged  with or into KPP or any
         Subsidiary  of  KPP  or  (iii)  existing  on  any  asset  prior  to the
         acquisition thereof by KPP or any Subsidiary of KPP; provided, that any
         such Lien was not created in the  contemplation of any of the foregoing
         and any such Lien  secures only those  obligations  which it secures on
         the date that such  Person  becomes  a  Subsidiary  or the date of such
         merger  or the  date  of such  acquisition;  extensions,  renewals,  or
         replacements  of any Lien referred to in subsections (a) through (d) of
         this Section;  provided,  that the principal amount of the Indebtedness
         secured thereby is not increased and that any such  extension,  renewal
         or replacement is limited to the assets originally  encumbered thereby;
         and duringthe  period from the date hereof until the 45th day following
         the Closing  Date,  Liens in existence on the date hereof  securing the
         obligations of the Borrower and its Subsidiaries under the UK Facility.
         Fundamental  Changes.  KPP will not, and will not permit any Subsidiary
         to,  merge into or  consolidate  into any other  Person,  or permit any
         other  Person to merge  into or  consolidate  with it, or sell,  lease,
         transfer or otherwise  dispose of (in a single  transaction or a series
         of transactions)  all or substantially all of its assets (in each case,
         whether now owned or hereafter acquired) or all or substantially all of
         the stock of any of its Subsidiaries  (in each case,  whether now owned
         or hereafter acquired) or liquidate or dissolve;  provided,  that if at
         the time  thereof and  immediately  after  giving  effect  thereto,  no
         Default or Event of Default shall have  occurred and be continuing  (i)
         any  Subsidiary  of the  Borrower  may  merge  with a  Person  if  such
         Subsidiary is the surviving Person,  (ii) any Subsidiary may merge into
         another  Subsidiary;  provided,  that if any party to such  merger is a
         Guarantor,  the  Guarantor  shall be the  surviving  Person,  (iii) any
         Subsidiary  of the  Borrower  may sell,  transfer,  lease or  otherwise
         dispose of all or substantially all of its assets to the Borrower or to
         a  Guarantor  and (iv) any  Subsidiary  (other  than a  Guarantor)  may
         liquidate  or dissolve if the  Borrower  determines  in good faith that
         such  liquidation  or  dissolution  is in  the  best  interests  of the
         Borrower and is not materially disadvantageous to the Lenders. KPP will
         not,  and will not permit  any of its  Subsidiaries  to,  engage in any
         business  other than  businesses  of the type  conducted by KPP and its
         Subsidiaries  on the date  hereof  and  businesses  reasonably  related
         thereto. Investments, Loans, Etc. KPP will not, and will not permit any
         of its Subsidiaries to, purchase,  hold or acquire (including  pursuant
         to any merger  with any Person that was not a  wholly-owned  Subsidiary
         prior to such merger),  any common stock,  evidence of  indebtedness or
         other  securities  (including  any option,  warrant,  or other right to
         acquire any of the  foregoing) of, make or permit to exist any loans or
         advances to,  Guarantee any  obligations of, or make or permit to exist
         any  investment or any other  interest in, any other Person or purchase
         or otherwise  acquire (in one transaction or a series of  transactions)
         any assets of any other Person (all of the foregoing being collectively
         called "Investments"), except:

                  Investments (other than Permitted Investments) existing on the
         date  hereof  (including   Investments  in   Subsidiaries);   Permitted
         Investments   and  the  Investment   contemplated  by  the  Acquisition
         Agreement;  Guarantees  constituting  Indebtedness permitted by Section
         7.1; provided,  that the aggregate  principal amount of Indebtedness of
         Subsidiaries  that are not  Guarantors  that are Guaranteed by any Loan
         Party shall be subject to the  limitation  set forth in subsection  (d)
         hereof; Investments made by KPP or any Subsidiary of KPP (in each case,
         whether directly or indirectly, through one or more subsidiaries of KPP
         or one or more  Excluded  Affiliates),  provided,  that  for  any  such
         Investment  of at least  $50,000,000  individually,  and for each  such
         Investment of at least $10,000,000 individually if the aggregate of all
         such  Investments  during  any fiscal  year of KPP shall have  exceeded
         $75,000,000,  KPP shall first have provided to the Administrative Agent
         financial   statements  of  KPP  and  its   consolidated   Subsidiaries
         demonstrating,  to the reasonable  satisfaction  of the  Administrative
         Agent, that after giving pro forma effect to such Investment, KPP shall
         continue to be in compliance with Article VI hereof;  loans or advances
         to employees,  officers or directors of KPP or any Subsidiary of KPP in
         the  ordinary  course of business  for travel,  relocation  and related
         expenses;  provided,  however,  that the  aggregate  amount of all such
         loans and advances does not exceed $1,000,000 at any time; and pursuant
         to Hedging Agreements  permitted by Section 7.10.  Restricted Payments.
         KPP will not, and will not permit its Subsidiaries to, make or agree to
         make, directly or indirectly, any Distribution,  or make any payment on
         account of, or set apart assets for a sinking or other  analogous  fund
         for,  the  purchase,  redemption,   retirement,   defeasance  or  other
         acquisition of, any Equity  Interests or  Indebtedness  subordinated to
         the  Obligations  of the  Borrower or any options,  warrants,  or other
         rights to purchase Equity Interests or such  Indebtedness,  whether now
         or hereafter outstanding (each, a "Restricted Payment"), except for (i)
         Distributions  payable  by KPP  solely in its  Equity  Interests,  (ii)
         Restricted  Payments made by any Subsidiary of KPP to KPP or to another
         Subsidiary  of KPP and  (iii)  cash  Distributions  paid  on,  and cash
         redemptions of, the Equity Interests of KPP or the Borrower;  provided,
         that no Default or Event of Default has occurred and is  continuing  at
         the time such Distribution is paid or redemption is made.

         Sale of Assets.

         KPP will not, and will not permit any of its  Subsidiaries  (other than
any Excluded Subsidiary) to, convey, sell, lease, assign,  transfer or otherwise
dispose  of, any of its  assets,  business  or  property,  whether  now owned or
hereafter acquired, other than in compliance with Section 2.9(b).

         Transactions with Affiliates.

         KPP will not,  and will not permit any of its  Subsidiaries  to,  sell,
lease or otherwise  transfer  any  property or assets to, or purchase,  lease or
otherwise  acquire any property or assets from, or otherwise engage in any other
transactions  with, any of its Affiliates,  except (i) in the ordinary course of
business at prices and on terms and conditions not less favorable to KPP or such
Subsidiary than could be obtained on an arm's-length  basis from unrelated third
parties,   (ii)   transactions   between  or  among  KPP  and  its  wholly-owned
Subsidiaries not involving any other Affiliates and (iii) any Restricted Payment
permitted by Section 7.5.

         Restrictive Agreements.

         KPP will not, and will not permit any Subsidiary of KPP (other than any
Excluded Subsidiary) to, directly or indirectly,  enter into, incur or permit to
exist any agreement that prohibits,  restricts or imposes any condition upon (i)
the ability of KPP or any such  Subsidiary  to create,  incur or permit any Lien
upon any of its assets or properties,  whether now owned or hereafter  acquired,
or (ii) the ability of any such Subsidiary to make Distributions with respect to
its Equity  Interests,  to make or repay  loans or  advances to KPP or any other
Subsidiary,  to guarantee Indebtedness of KPP or any other such Subsidiary or to
transfer  any of its  property or assets to KPP or any such  Subsidiary  of KPP;
provided,  that (A) the foregoing  shall not apply to restrictions or conditions
imposed  by law or by  this  Agreement  or any  other  Loan  Document,  (B)  the
foregoing shall not apply to customary  restrictions and conditions contained in
agreements  relating to the sale of any  Subsidiary  of KPP  pending  such sale,
provided such  restrictions  and conditions apply only to the Subsidiary that is
sold and such sale is  permitted  hereunder,  (C)  clause (i) shall not apply to
restrictions  or  conditions  imposed  by  any  agreement  relating  to  secured
Indebtedness  permitted by this  Agreement if such  restrictions  and conditions
apply only to the property or assets securing such  Indebtedness  and (D) clause
(i) shall not  apply to  customary  provisions  in  leases  and other  contracts
restricting the assignment thereof.

         Sale and Leaseback Transactions.

         KPP will not, and will not permit any of its  Subsidiaries  (other than
any Excluded Subsidiary) to, enter into any arrangement, directly or indirectly,
whereby it shall sell or transfer any property, real or personal, used or useful
in its business,  whether now owned or hereinafter acquired, and thereafter rent
or  lease  such  property  or  other   property  that  it  intends  to  use  for
substantially the same purpose or purposes as the property sold or transferred.

         Hedging Agreements.

         KPP will not,  and will not permit any of the  Subsidiaries  to,  enter
into any Hedging  Agreement,  other than Hedging  Agreements entered into in the
ordinary  course of business to hedge or mitigate risks to which KPP or any such
Subsidiary  is exposed in the conduct of its business or the  management  of its
liabilities.  Solely for the avoidance of doubt, KPP acknowledges that a Hedging
Agreement  entered  into for  speculative  purposes or of a  speculative  nature
(which shall be deemed to include any Hedging  Agreement  under which KPP or any
Subsidiary of KPP is or may become obliged to make any payment (A) in connection
with the purchase by any third party of any common stock or any  Indebtedness or
(B) as a result  of  changes  in the  market  value of any  common  stock or any
Indebtedness) is not a Hedging  Agreement entered into in the ordinary course of
business to hedge or mitigate risks.

         Amendment to Material Documents.

         KPP will not,  and will not permit  any  Subsidiary  of KPP to,  amend,
modify or waive any of its rights in a manner materially  adverse to the Lenders
under (i) its Constituent Documents or (ii) the Acquisition Agreement.

         Accounting Changes.

         KPP will not,  and will not permit any  Subsidiary  of KPP to, make any
significant  change in accounting  treatment or reporting  practices,  except as
required by GAAP,  or change the fiscal  year of KPP or of any such  Subsidiary,
except to change the fiscal  year of any such  Subsidiary  to conform its fiscal
year to that of KPP.

KPP GUARANTEE

         The Borrower is a direct and  wholly-owned  subsidiary  of KPP, and KPP
will derive substantial  benefit from the making of the Loans by the Lenders. As
consideration  therefor  and in order to induce the Lenders to make  Loans,  KPP
agrees as follows:

         Guarantee.

         KPP unconditionally  guarantees,  jointly with the other Guarantors and
severally,  as a primary  obligor  and not  merely as a surety,  (i) the due and
punctual  payment of (A) the  principal  of and  premium,  if any,  and interest
(including interest accruing during the pendency of any bankruptcy,  insolvency,
receivership  or other  similar  proceeding,  regardless  of whether  allowed or
allowable  in  such  proceeding)  on the  Loans,  when  and as due,  whether  at
maturity,  by  acceleration,  upon  one or  more  dates  set for  prepayment  or
otherwise,  and (B) all  other  monetary  obligations,  including  fees,  costs,
expenses and indemnities,  whether primary, secondary, direct, contingent, fixed
or otherwise (including monetary obligations incurred during the pendency of any
bankruptcy, insolvency,  receivership or other similar proceeding, regardless of
whether allowed or allowable in such  proceeding),  of the other Loan Parties to
the  Administrative  Agent and the Lenders  under this  Agreement the other Loan
Documents,  (ii) the due and punctual performance of all covenants,  agreements,
obligations  and liabilities of the other Loan Parties under or pursuant to this
Agreement and the other Loan Documents;  and (iii) the due and punctual  payment
and performance of all obligations of the Borrower, monetary or otherwise, under
each Hedging  Agreement entered into with a counterparty that was a Lender or an
Affiliate of a Lender at the time such Hedging  Agreement  was entered into (all
the  monetary and other  obligations  referred to in the  preceding  clauses (i)
through  (iii) being  collectively  called the  "Guaranteed  Obligations").  KPP
further agrees that the Guaranteed  Obligations  may be extended or renewed,  in
whole or in part,  without notice to or further assent from it, and that it will
remain bound upon its guarantee  notwithstanding any extension or renewal of any
Guaranteed Obligation.

         Guaranteed Obligations Not Waived.

         To  the  fullest  extent   permitted  by  applicable  law,  KPP  waives
presentment  to, demand of payment from and protest to the other Loan Parties of
any of the Guaranteed  Obligations,  and also waives notice of acceptance of its
guarantee and notice of protest for nonpayment.  To the fullest extent permitted
by applicable law, the obligations of KPP hereunder shall not be affected by (i)
the  failure  of the  Administrative  Agent or any Lender to assert any claim or
demand or to enforce or exercise any right or remedy against the Borrower or any
other Guarantor under the provisions of this Agreement,  any other Loan Document
or otherwise, (ii) any rescission,  waiver, amendment or modification of, or any
release from any of the terms or provisions of, this  Agreement,  any other Loan
Document or any other  agreement,  including with respect to any other Guarantor
under the Subsidiary  Guarantee  Agreement,  or (iii) the failure to perfect any
security  interest  in, or the  release  of, any of the  security  held by or on
behalf of the Administrative Agent or any Lender.

         Guarantee of Payment.

         KPP  further  agrees that its  guarantee  constitutes  a  guarantee  of
payment when due and not of collection, and waives any right to require that any
resort be had by the  Administrative  Agent or any Lender to any of the security
held for payment of the Guaranteed  Obligations or to any balance of any deposit
account  or  credit on the books of the  Administrative  Agent or any  Lender in
favor of the Borrower or any other Person.

         No Discharge or Diminishment of Guarantee.

         The obligations of KPP hereunder shall not be subject to any reduction,
limitation,   impairment  or   termination   for  any  reason  (other  than  the
indefeasible payment in full in cash of the Guaranteed  Obligations),  including
any claim of waiver, release, surrender,  alteration or compromise of any of the
Guaranteed  Obligations,  and shall not be  subject  to any  defense  or setoff,
counterclaim,  recoupment or termination whatsoever by reason of the invalidity,
illegality  or  unenforceability  of the  Guaranteed  Obligations  or otherwise.
Without  limiting  the  generality  of the  foregoing,  the  obligations  of KPP
hereunder  shall not be  discharged  or  impaired or  otherwise  affected by the
failure of the Administrative  Agent or any Lender to assert any claim or demand
or to enforce any remedy under this  Agreement,  any other Loan  Document or any
other agreement,  by any waiver or modification of any provision of any thereof,
by any default,  failure or delay,  willful or otherwise,  in the performance of
the Guaranteed Obligations, or by any other act or omission that may or might in
any manner or to any extent vary the risk of KPP or that would otherwise operate
as a  discharge  of a  guarantor  as a matter of law or equity  (other  than the
indefeasible payment in full in cash of all the Guaranteed Obligations).

         Defenses of Borrower Waived.

         To the fullest  extent  permitted  by  applicable  law,  KPP waives any
defense  based  on or  arising  out of any  defense  of any  Loan  Party  or the
unenforceability  of the  Guaranteed  Obligations  or any part  thereof from any
cause, or the cessation from any cause of the liability of any Loan Party, other
than  the  final  and  indefeasible  payment  in full in cash of the  Guaranteed
Obligations.  The  Administrative  Agent and the Lenders may, at their election,
foreclose on any security held by one or more of them by one or more judicial or
nonjudicial  sales,  accept  an  assignment  of any  such  security  in  lieu of
foreclosure,  compromise or adjust any part of the Guaranteed Obligations,  make
any other  accommodation  with the other Loan  Parties  or any other  guarantor,
without  affecting or impairing in any way the liability of KPP hereunder except
to  the  extent  the  Guaranteed   Obligations  have  been  fully,  finally  and
indefeasibly  paid in cash.  Pursuant to applicable  law, KPP waives any defense
arising out of any such election even though such election operates, pursuant to
applicable  law,  to  impair or to  extinguish  any  right of  reimbursement  or
subrogation  or other right or remedy of KPP  against the  Borrower or any other
Guarantor or guarantor, as the case may be, or any security.

         Agreement to Pay; Subordination.

         In  furtherance  of the  foregoing  and not in  limitation of any other
right  that the  Administrative  Agent  or any  Lender  has at law or in  equity
against KPP by virtue hereof, upon the failure of the Borrower or any other Loan
Party to pay any  Guaranteed  Obligation  when and as the same shall become due,
whether at maturity,  by acceleration,  after notice of prepayment or otherwise,
KPP hereby  promises  to and will  forthwith  pay,  or cause to be paid,  to the
Administrative  Agent for the  benefit of the Lenders in cash the amount of such
unpaid  Guaranteed  Obligations.  Upon  payment  by  KPP  of  any  sums  to  the
Administrative  Agent,  all rights of KPP  against  any Loan Party  arising as a
result  thereof  by way of right of  subrogation,  contribution,  reimbursement,
indemnity or otherwise  shall in all respects be subordinate and junior in right
of  payment  to the  prior  indefeasible  payment  in  full  in  cash of all the
Guaranteed  Obligations.  In addition,  any indebtedness of any other Loan Party
now or hereafter held by KPP is hereby  subordinated  in right of payment to the
prior payment in full in cash of the Guaranteed Obligations. If any amount shall
erroneously  be paid to KPP on  account of (i) such  subrogation,  contribution,
reimbursement,  indemnity or similar right or (ii) any such indebtedness of such
Loan  Party,  such  amount  shall  be  held in  trust  for  the  benefit  of the
Administrative  Agent  and  the  Lenders  and  shall  forthwith  be  paid to the
Administrative  Agent to be  credited  against  the  payment  of the  Guaranteed
Obligations,  whether matured or unmatured,  in accordance with the terms of the
Loan Documents.

         Information.

         KPP assumes all responsibility for being and keeping itself informed of
the  other  Loan  Parties'  financial  condition  and  assets,  and of all other
circumstances bearing upon the risk of nonpayment of the Guaranteed  Obligations
and the  nature,  scope and  extent of the risks  that KPP  assumes  and  incurs
hereunder,  and agrees that none of the Administrative Agent or the Lenders will
have any duty to advise KPP of information  known to it or any of them regarding
such circumstances or risks.

         Representations and Warranties.

         KPP represents and warrants as to itself that all  representations  and
warranties relating to it contained in this Agreement are true and correct.

         Termination.

         The  guarantees  made  hereunder  (i)  shall  terminate  when  all  the
Guaranteed  Obligations  have been paid in full in cash and the Lenders  have no
further  commitment to lend under this  Agreement and (ii) shall  continue to be
effective or be reinstated,  as the case may be, if at any time payment,  or any
part thereof,  of any  Guaranteed  Obligation is rescinded or must  otherwise be
restored by any Lender or any Guarantor upon the bankruptcy or reorganization of
the Borrower, any Guarantor or otherwise. In connection with the foregoing,  the
Administrative  Agent shall  execute and  deliver to KPP or KPP's  designee,  at
KPP's expense,  any documents or instruments that KPP shall  reasonably  request
from time to time to evidence such termination and release.

EVENTS OF DEFAULT

         Events of Default.

         If any of the  following  events  (each an  "Event of  Default")  shall
occur:

                  the Borrower  shall fail to pay any principal of any Loan when
         and as the same shall become due and  payable,  whether at the due date
         thereof or at a date fixed for prepayment or otherwise; or

                  the Borrower shall fail to pay any interest on any Loan or any
         fee or any other amount (other than an amount payable under  subsection
         (a) of this  Article)  payable  under this  Agreement or any other Loan
         Document,  when and as the same shall become due and payable,  and such
         failure shall continue unremedied for a period of 3 Business Days; or

                  any  representation  or warranty  made or deemed made by or on
         behalf of any Loan Party in or in connection with this Agreement or any
         other Loan Document  (including the Schedules attached thereto) and any
         amendments  or  modifications  hereof or waivers  hereunder,  or in any
         certificate, report, financial statement or other document submitted to
         the  Administrative  Agent  or the  Lenders  by any  Loan  Party or any
         representative of any Loan Party pursuant to or in connection with this
         Agreement or any other Loan Document shall prove to be incorrect in any
         material respect when made or deemed made or submitted; or

                  the Borrower or KPP, as  applicable,  shall fail to observe or
         perform any  covenant or agreement  contained in Section  5.2(a) or 5.3
         (with  respect to KPP's or the  Borrower's  existence) or Article VI or
         VII; or

                  any Loan Party shall fail to observe or perform  any  covenant
         or agreement  contained in any Loan Document (other than those referred
         to in  subsections  (a),  (b) and (d) above),  and such  failure  shall
         remain  unremedied  for 30 days after the earlier of (i) any officer of
         the Borrower  becomes  aware of such  failure,  or (ii) notice  thereof
         shall have been given to the  Borrower by the  Administrative  Agent or
         any Lender; or

                  the Borrower,  KPP or any  Significant  Affiliate  (whether as
         primary  obligor or as guarantor or other surety) shall fail to pay any
         principal of or premium or interest on any Material  Indebtedness  that
         is  outstanding,  when and as the same  shall  become  due and  payable
         (whether at  scheduled  maturity,  required  prepayment,  acceleration,
         demand  or  otherwise),  and such  failure  shall  continue  after  the
         applicable  grace  period,  if  any,  specified  in  the  agreement  or
         instrument evidencing such Indebtedness; or any other event shall occur
         or condition shall exist under any agreement or instrument  relating to
         such Indebtedness and shall continue after the applicable grace period,
         if any,  specified in such  agreement or  instrument,  if the effect of
         such event or condition is to  accelerate,  or permit the  acceleration
         of, the maturity of such  Indebtedness;  or any such Indebtedness shall
         be  declared  to be due and  payable;  or  required  to be  prepaid  or
         redeemed (other than by a regularly  scheduled  required  prepayment or
         redemption),  purchased  or defeased,  or any offer to prepay,  redeem,
         purchase or defease such Indebtedness  shall be required to be made, in
         each case prior to the stated maturity thereof; or

                  the  Borrower,  KPP or any  Significant  Affiliate  shall  (i)
         commence a  voluntary  case or other  proceeding  or file any  petition
         seeking liquidation,  reorganization or other relief under any federal,
         state or foreign  bankruptcy,  insolvency  or other  similar law now or
         hereafter in effect or seeking the appointment of a custodian, trustee,
         receiver, liquidator or other similar official of it or any substantial
         part of its property,  (ii) consent to the  institution  of, or fail to
         contest in a timely and appropriate  manner, any proceeding or petition
         described in subsection (i) of this Section, (iii) apply for or consent
         to the  appointment of a custodian,  trustee,  receiver,  liquidator or
         other similar  official for the Borrower,  KPP or any such  Significant
         Affiliate or for a substantial part of its assets,  (iv) file an answer
         admitting the material  allegations  of a petition  filed against it in
         any such proceeding,  (v) make a general  assignment for the benefit of
         creditors,  or (vi) take any action for the purpose of effecting any of
         the foregoing; or

                  an involuntary proceeding shall be commenced or an involuntary
         petition  shall be filed  seeking (i)  liquidation,  reorganization  or
         other  relief  in  respect  of the  Borrower,  KPP  or any  Significant
         Affiliate or its debts,  or any substantial  part of its assets,  under
         any federal,  state or foreign bankruptcy,  insolvency or other similar
         law now or hereafter in effect or (ii) the  appointment of a custodian,
         trustee,  receiver,  liquidator  or  other  similar  official  for  the
         Borrower, KPP or any Significant Affiliate or for a substantial part of
         its assets,  and in any such case,  such  proceeding or petition  shall
         remain  undismissed  for a  period  of 60 days or an  order  or  decree
         approving or ordering  any of the  foregoing  shall be entered;  or the
         Borrower, KPP or any Significant Subsidiary shall become unable to pay,
         shall admit in writing its  inability to pay, or shall fail to pay, its
         debts as they become due; or an ERISA Event shall have  occurred  that,
         in the opinion of the Required Lenders,  when taken together with other
         ERISA Events that have occurred, could reasonably be expected to result
         in  liability  to the  Borrower  and the  Subsidiaries  in an aggregate
         amount exceeding  $5,000,000;  or any judgment or order for the payment
         of money in excess of  $5,000,000  in the  aggregate  shall be rendered
         against the Borrower, KPP or any Significant Affiliate,  and either (i)
         enforcement  proceedings shall have been commenced by any creditor upon
         such  judgment  or  order  or  (ii)  there  shall  be a  period  of  30
         consecutive days during which a stay of enforcement of such judgment or
         order,  by  reason of a pending  appeal or  otherwise,  shall not be in
         effect; or any non-monetary judgment or order shall be rendered against
         the Borrower, KPP or any Significant Affiliate that could reasonably be
         expected to have a Material Adverse Effect, and there shall be a period
         of 30  consecutive  days  during  which a stay of  enforcement  of such
         judgment or order,  by reason of a pending  appeal or otherwise,  shall
         not be in effect;  or a Change in Control shall occur or exist;  or any
         provision of the Subsidiary  Guarantee  Agreement  shall for any reason
         cease  to  be  valid  and  binding  on,  or  enforceable  against,  any
         Guarantor,  or any  Guarantor  shall so state  in  writing,  or (a) any
         provision  of Article  VIII shall for any reason  cease to be valid and
         binding  on,  or  enforceable  against  KPP,  or KPP  shall so state in
         writing;  Guarantor shall seek to terminate its  obligations  under the
         Loan  Documents;  or then, and in every such event (other than an event
         with respect to KPP or the Borrower  described in subsection (g) or (h)
         of this Section) and at any time  thereafter  during the continuance of
         such event, the Administrative  Agent may, and upon the written request
         of the Required  Lenders shall, by notice to the Borrower,  take any or
         all of the  following  actions,  at the same or  different  times:  (i)
         terminate  the  Commitments,  whereupon  the  Commitment of each Lender
         shall  terminate  immediately;  (ii)  declare the  principal of and any
         accrued  interest  on  the  Loans,  and  all  other  Obligations  owing
         hereunder,  to be,  whereupon  the same 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 (iii)
         exercise all remedies  contained in any other Loan Document;  and that,
         if an Event of Default  specified in either subsection (g) or (h) shall
         occur, the Commitments shall automatically  terminate and the principal
         of the Loans then outstanding,  together with accrued interest thereon,
         and all fees, and all other Obligations 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.

THE ADMINISTRATIVE AGENT

         Appointment of Administrative Agent.

         Each Lender  irrevocably  appoints SunTrust Bank as the  Administrative
Agent and  authorizes it to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent under this Agreement and the
other  Loan  Documents,  together  with all such  actions  and  powers  that are
reasonably  incidental thereto.  The Administrative Agent may perform any of its
duties  hereunder  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 of its duties and  exercise  its rights and powers  through
their respective Related Parties.  The exculpatory  provisions set forth in this
Article  shall  apply to any  such  sub-agent  and 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  facility  provided
for herein as well as activities as Administrative Agent.

         Nature of Duties of Administrative Agent.

         The  Administrative  Agent  shall not have any  duties  or  obligations
except those expressly set forth in this Agreement and the other Loan Documents.
Without limiting the generality of the foregoing,  (i) the Administrative  Agent
shall not be subject to any  fiduciary or other  implied  duties,  regardless of
whether a Default or an Event of Default has  occurred and is  continuing,  (ii)
the  Administrative  Agent  shall  not have  any duty to take any  discretionary
action or exercise any discretionary  powers,  except those discretionary rights
and powers expressly  contemplated by the Loan Documents 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  11.2),  and (iii) except as expressly set
forth in the Loan Documents, 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 its  Subsidiaries  that is communicated to or
obtained by the  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  11.2) or in the absence of its own gross
negligence or willful misconduct.  The Administrative  Agent shall not be deemed
to have  knowledge of any Default or Event of Default  unless and until  written
notice  thereof  is given to the  Administrative  Agent by the  Borrower  or any
Lender,  and the  Administrative  Agent shall not be responsible for or have any
duty to ascertain or inquire into (A) any statement,  warranty or representation
made in or in  connection  with  any  Loan  Document,  (B) the  contents  of any
certificate,  report or other document  delivered  hereunder or thereunder or in
connection  herewith or therewith,  (C) the  performance or observance of any of
the covenants,  agreements,  or other terms and conditions set forth in any Loan
Document, (D) the validity, enforceability,  effectiveness or genuineness of any
Loan  Document  or any  other  agreement,  instrument  or  document,  or (E) the
satisfaction  of any condition set forth in Article III or elsewhere in any Loan
Document,  other  than to  confirm  receipt of items  expressly  required  to be
delivered to the Administrative Agent.

         Lack of Reliance on the Administrative Agent.

         Each of the Lenders 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 of the Lenders 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 has deemed appropriate,  continue to make its own decisions in
taking or not taking of any action under or based on this Agreement, any related
agreement or any document furnished hereunder or thereunder.

         Certain Rights of the Administrative Agent.

         If  the  Administrative  Agent  shall  request  instructions  from  the
Required Lenders with respect to any action or actions (including the failure to
act) in  connection  with this  Agreement,  the  Administrative  Agent  shall be
entitled to refrain from such act or taking such act,  unless and until it shall
have received instructions from such Lenders; and the Administrative Agent shall
not incur liability to any Person by reason of so refraining.  Without  limiting
the foregoing,  no Lender shall have any right of action whatsoever  against the
Administrative  Agent  as  a  result  of  the  Administrative  Agent  acting  or
refraining  from acting  hereunder in accordance  with the  instructions  of the
Required Lenders where required by the terms of this Agreement.

         Reliance by Administrative Agent.

         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,  sent or made by the proper Person.  The Administrative
Agent may also 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
(including  counsel for the Borrower),  independent public 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 such counsel, accountants or experts.

         The Administrative Agent in its Individual Capacity.

         The bank serving as the Administrative Agent shall have the same rights
and powers under this Agreement and any other Loan Document in its capacity as a
Lender as any other Lender and may exercise or refrain from  exercising the same
as  though  it were  not the  Administrative  Agent;  and the  terms  "Lenders",
"Required  Lenders",  "holders of Notes", or any similar terms shall, unless the
context clearly otherwise  indicates,  include the  Administrative  Agent in its
individual  capacity.  The  bank  acting  as the  Administrative  Agent  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  Affiliate  of the
Borrower as if it were not the Administrative Agent hereunder.

         Successor Administrative Agent.

         The  Administrative  Agent  may  resign  at any time by  giving  notice
thereof to the Lenders and the  Borrower  and may be removed at any time with or
without cause by the Required Lenders. Upon any such resignation or removal, the
Required  Lenders  shall  have the right to appoint a  successor  Administrative
Agent, subject to the approval by the Borrower provided that no Default or Event
of Default  shall have  occurred and be continuing at such time. If no successor
Administrative Agent shall have been so appointed,  and shall have accepted such
appointment within 30 days after the retiring  Administrative Agent gives notice
of resignation or the Required  Lenders' removal of the Agent, then the retiring
Administrative  Agent  may,  on  behalf  of the  Lenders,  appoint  a  successor
Administrative  Agent, which shall be a commercial bank organized under the laws
of the United States of America or any state  thereof or a bank which  maintains
an office in the United  States,  having a combined  capital  and  surplus of at
least $500,000,000.

         Upon the  acceptance of its  appointment  as the  Administrative  Agent
hereunder by a successor,  such successor  Administrative  Agent shall thereupon
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 under this Agreement and the
other Loan  Documents.  If within 45 days after  written  notice is given of the
retiring  Administrative  Agent's resignation or removal under this Section 10.7
no  successor  Administrative  Agent  shall have been  appointed  and shall have
accepted such appointment, then on such 45th day (i) the retiring Administrative
Agent's  resignation  or  removal  shall  become  effective,  (ii) the  retiring
Administrative   Agent  shall  thereupon  be  discharged  from  its  duties  and
obligations  under  the Loan  Documents  and (iii) the  Required  Lenders  shall
thereafter  perform all duties of the  retiring  Administrative  Agent under the
Loan  Documents  until such time as the  Required  Lenders  appoint a  successor
Administrative  Agent as  provided  above.  After  any  retiring  Administrative
Agent's resignation hereunder,  the provisions of this Article IX shall continue
in  effect  for  the  benefit  of such  retiring  Administrative  Agent  and its
representatives  and agents in respect of any actions  taken or not taken by any
of them while it was serving as the Administrative Agent.

         Authorization to Execute other Loan Documents.

         Each Lender hereby  authorizes the  Administrative  Agent to execute on
behalf of all Lenders all Loan Documents other than this Agreement.

MISCELLANEOUS

         Notices.

         Except  in the  case of  notices  and  other  communications  expressly
permitted to be given by telephone,  all notices and other communications to any
party herein to be effective  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:

        To the Borrower:             2435 North Central Expressway
                                     Suite 700
                                     Richardson, Texas 75080-2731
                                     Attention:  Ed Doherty
                                                 Mark Jones
                                     Telecopy Number: (972) 699-1894

                 To KPP:             2435 North Central Expressway
                                     Suite 700
                                     Richardson, Texas 75080-2731
                                     Attention:  Ed Doherty
                                                 Mark Jones
                                     Telecopy Number: (972) 699-1894

  To the Administrative Agent:       SunTrust Bank
                                     303 Peachtree Street, N. E.
                                     Atlanta, Georgia 30308
                                     Attention:
                                     Telecopy Number:

                  With a copy to:    SunTrust Equitable Securities Corporation
                                     303 Peachtree Street, N. E./ 24th Floor
                                     Atlanta, Georgia 30308
                                     Attention:
                                     Telecopy Number:

  To any other Lender:               the address set forth in the Administrative
                                     Questionnaire

         Any party hereto may change its address or telecopy  number for notices
and other  communications  hereunder by notice to the other parties hereto.  All
such  notices and other  communications  shall,  when  transmitted  by overnight
delivery,  or faxed,  be  effective  when  delivered  for  overnight  (next-day)
delivery, or transmitted in legible form by facsimile machine,  respectively, or
if mailed,  upon the third  Business Day after the date deposited into the mails
or if  delivered,  upon  delivery;  provided,  that  notices  delivered  to  the
Administrative  Agent shall not be  effective  until  actually  received by such
Person at its address  specified  in this  Section  11.1.  Any  agreement of the
Administrative  Agent and the  Lenders  herein to  receive  certain  notices  by
telephone or facsimile is solely for the  convenience  and at the request of the
Borrower.  The Administrative Agent and the Lenders shall be entitled to rely on
the authority of any Person purporting to be a Person authorized by the Borrower
to give such notice and the Administrative  Agent and Lenders shall not have any
liability  to the Borrower or other Person on account of any action taken or not
taken  by the  Administrative  Agent  or  the  Lenders  in  reliance  upon  such
telephonic  or facsimile  notice.  The  obligation  of the Borrower to repay the
Loans and all other Obligations hereunder shall not be affected in any way or to
any extent by any failure of the Administrative Agent and the Lenders to receive
written confirmation of any telephonic or facsimile notice or the receipt by the
Administrative Agent and the Lenders of a confirmation which is at variance with
the terms understood by the Administrative Agent and the Lenders to be contained
in any such telephonic or facsimile notice.  Waiver;  Amendments.  No failure or
delay by the Administrative Agent or any Lender in exercising any right or power
hereunder  or any other  Loan  Document,  and no course of dealing  between  the
Borrower and the Administrative  Agent or any Lender,  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 right or power,
preclude  any other or further  exercise  thereof or the  exercise  of any other
right  or  power  hereunder  or  thereunder.  The  rights  and  remedies  of the
Administrative  Agent  and the  Lenders  hereunder  and  under  the  other  Loan
Documents  are  cumulative  and are not  exclusive  of any  rights  or  remedies
provided by law. No waiver of any provision of this  Agreement or any other Loan
Document or consent to any  departure  by the  Borrower  therefrom  shall in any
event be effective  unless the same shall be permitted by subsection (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 or Event of Default,  regardless of whether the Administrative  Agent or
any Lender may have had notice or  knowledge of such Default or Event of Default
at the time.  No amendment or waiver of any  provision of this  Agreement or the
other Loan Documents,  nor consent to any departure by any Loan Party therefrom,
shall in any event be  effective  unless the same shall be in writing and signed
by the Borrower and the Required Lenders or the Borrower and the  Administrative
Agent with the consent of the  Required  Lenders and then such waiver or consent
shall be effective  only in the specific  instance and for the specific  purpose
for which given;  provided,  that no amendment or waiver 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,  or
reduce any fees payable  hereunder,  without the written  consent of each Lender
affected thereby, (iii) postpone the date fixed for any payment of any principal
of, or  interest  on,  any Loan or any fees  hereunder  or reduce the amount of,
waive or  excuse  any such  payment,  or  postpone  the  scheduled  date for the
termination or reduction of any Commitment,  without the written consent of each
Lender  affected  thereby,  (iv) change Section  2.18(b) or (c) in a manner that
would  alter the pro rata  sharing of  payments  required  thereby,  without the
written consent of each Lender, (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 which are required to waive, amend or modify
any rights hereunder or make any  determination or grant any consent  hereunder,
without the consent of each  Lender;  (vi)  release any  guarantor  or limit the
liability  of any such  guarantor  under any  guaranty  agreement,  without  the
written  consent  of  each  Lender;  (vii)  release  all  or  substantially  all
collateral (if any) securing any of the Obligations, without the written consent
of each Lender;  provided further, that no such agreement shall amend, modify or
otherwise affect the rights,  duties or obligations of the Administrative  Agent
without the prior written consent of the Administrative  Agent.  Notwithstanding
the foregoing, any provision of this Agreement may be amended by an agreement in
writing   entered  into  by  the   Borrower,   the  Required   Lenders  and  the
Administrative  Agent if (i) by the terms of such  agreement  the  Commitment of
each Lender not consenting to the amendment provided for therein shall terminate
(but such Lender shall continue to be entitled to the benefits of Sections 2.15,
2.16,  and 2.17 and 11.3) upon the  effectiveness  of such amendment and (ii) at
the time such amendment becomes  effective,  each Lender not consenting  thereto
receives  payment in full principal of and interest accrued on each Loan made by
it and all other  amounts  owing to it or  accrued  for its  account  under this
Agreement   and  is  released   from  its   obligations   hereunder.   Expenses;
Indemnification.  The Borrower shall pay (i) all reasonable, out-of-pocket costs
and  expenses of the  Administrative  Agent and its  Affiliates,  including  the
reasonable fees,  charges and  disbursements  of counsel for the  Administrative
Agent and its  Affiliates,  in  connection  with the  syndication  of the credit
facilities  provided for herein,  the preparation and administration of the Loan
Documents and any amendments,  modifications  or waivers thereof (whether or not
the transactions contemplated in this Agreement or any other Loan Document shall
be  consummated),  and (ii) all  out-of-pocket  costs and  expenses  (including,
without  limitation,  the reasonable fees,  charges and disbursements of outside
counsel and the allocated cost of inside counsel) incurred by the Administrative
Agent or any Lender in  connection  with the  enforcement  or  protection of its
rights in connection  with the Loan  Documents,  including its rights under this
Section,  or in  connection  with the Loans made  hereunder,  including all such
out-of-pocket   expenses   incurred   during  any  workout,   restructuring   or
negotiations  in  respect  of such  Loans.  The  Borrower  shall  indemnify  the
Administrative Agent, each Lender and each Related Party of any of the foregoing
(each, an  "Indemnitee")  against,  and hold each of them harmless from, any and
all costs, losses, liabilities,  claims, damages and related expenses, including
the fees, charges and disbursements of any counsel for any Indemnitee, which may
be incurred by or asserted against any Indemnitee  arising out of, in connection
with or as a result of (i) the  execution  or delivery of this  Agreement or any
other  agreement or  instrument  contemplated  hereby,  the  performance  by the
parties hereto of their respective  obligations hereunder or the consummation of
any of the transactions  contemplated hereby, (ii) any Loan, (iii) any actual or
alleged presence or release of Hazardous Materials on or from any property owned
by the Borrower or any Subsidiary or any Environmental  Liability related in any
way to the Borrower or any Subsidiary 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 the Borrower  shall not be
obligated to indemnify any  Indemnitee  for any of the foregoing  arising out of
such  Indemnitee's  gross  negligence  or willful  misconduct as determined by a
court of  competent  jurisdiction  in a final and  nonappealable  judgment.  The
Borrower  shall pay, and hold the  Administrative  Agent and each of the Lenders
harmless from and against,  any and all present and future  stamp,  documentary,
and other  similar  taxes  with  respect  to this  Agreement  and any other Loan
Documents, any collateral described therein, or any payments due thereunder, and
save the Administrative  Agent and each Lender harmless from and against any and
all  liabilities  with respect to or resulting from any delay or omission to pay
such taxes.  To the extent that the Borrower fails to pay any amount required to
be paid to the Administrative Agent under subsection (a), (b) or (c) above, each
Lender  severally  agrees to pay to the  Administrative  Agent such Lender's Pro
Rata Share (determined as of the time that the unreimbursed expense or indemnity
payment  is sought)  of such  unpaid  amount;  provided,  that the  unreimbursed
expense or indemnified payment, 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.  To the  extent  permitted  by  applicable  law,  the
Borrower, KPP and all Significant Affiliates shall not assert, and hereby waive,
any claim  against any  Indemnitee,  on any theory of  liability,  for  special,
indirect,  consequential  or  punitive  damages  (as opposed to actual or direct
damages) arising out of, in connection with or as a result of, this Agreement or
any agreement or instrument  contemplated hereby, the transactions  contemplated
therein,  any Loan or the use of  proceeds  thereof.  All amounts due under this
Section shall be payable promptly after written demand therefor.  Successors and
Assigns. The provisions of this Agreement shall be binding upon and inure to the
benefit of the  parties  hereto and their  respective  successors  and  assigns,
except that the Borrower may not assign or transfer any of its rights  hereunder
without the prior written  consent of each Lender (and any attempted  assignment
or transfer by the Borrower  without such consent  shall be null and void).  Any
Lender may at any time assign to one or more  assignees  all or a portion of its
rights  and  obligations  under  this  Agreement  and the other  Loan  Documents
(including all or a portion of its Commitment and the Loans at the time owing to
it and including non-pro rata assignments of its Commitments and related Loans);
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 (and,
in the case of an assignment of all or a portion of a Commitment must give their
prior  written  consent  (which  consent shall not be  unreasonably  withheld or
delayed),  (ii) except in the case of an  assignment to a Lender or an Affiliate
of a Lender or an  assignment  of the entire  amount of the  assigning  Lender's
Commitment hereunder or an assignment while an Event of Default has occurred and
is continuing,  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 $1,000,000  (unless the Borrower and the  Administrative  Agent
shall  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  with respect to any Commitment and the Loans related  thereto under
this Agreement and the other Loan Documents,  (iv) the assigning  Lender and the
assignee shall execute and deliver to the Administrative Agent an Assignment and
Acceptance,  together  with a  processing  and  recordation  fee  payable by the
assigning  Lender or the assignee  (as  determined  between such  Persons) in an
amount  equal to $1,000  and (v) such  assignee,  if it is not a  Lender,  shall
deliver a duly  completed  Administrative  Questionnaire  to the  Administrative
Agent;  provided,  that any consent of the Borrower otherwise required hereunder
shall not be  required if an Event of Default has  occurred  and is  continuing.
Upon the execution and delivery of the  Assignment and Acceptance and payment by
such assignee to the assigning  Lender of an amount equal to the purchase  price
agreed  between  such  Persons,  such  assignee  shall  become  a party  to this
Agreement and any other Loan Documents to which such assigning Lender is a party
and, to the extent of such interest  assigned by such Assignment and Acceptance,
shall have the rights and obligations of a Lender under this Agreement,  and the
assigning  Lender  shall  be  released  from  its  obligations  hereunder  to  a
corresponding  extent (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 2.15, 2.16 and 2.17 and 11.3. Upon the  consummation of any
such assignment  hereunder,  the assigning Lender, the Administrative  Agent and
the Borrower shall make appropriate  arrangements to have new Notes issued if so
requested by either or both the assigning Lender or the assignee. Any assignment
or other  transfer by a Lender that does not fully comply with the terms of this
subsection  (b) shall be treated for  purposes of this  Agreement as a sale of a
participation  pursuant  to  subsection  (c) below.  Any Lender may at any time,
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 the  Loans  owing to it);
provided,  that (i) such Lender's  obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of its obligations hereunder, and (iii) the Borrower,
the Administrative Agent and the other Lenders shall continue to deal solely and
directly  with  such  Lender  in  connection   with  such  Lender's  rights  and
obligations  under this  Agreement and the other Loan  Documents.  Any agreement
between such Lender and the Participant with respect to such participation shall
provide  that such  Lender  shall  retain the sole right and  responsibility  to
enforce this Agreement and the other Loan Documents and the right to approve any
amendment,  modification  or  waiver  of  this  Agreement  and  the  other  Loan
Documents;  provided,  that such  participation  agreement may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
modification  or waiver of this  Agreement  described  in the first  proviso  of
Section  11.2(b) that  affects the  Participant.  The Borrower  agrees that each
Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 to
the same extent as if it were a Lender  hereunder  and had acquired its interest
by assignment pursuant to subsection (b); provided, that no Participant shall be
entitled to receive  any greater  payment  under  Section  2.15 or 2.17 than the
applicable  Lender  would  have been  entitled  to receive  with  respect to the
participation  sold to such Participant unless the sale of such participation is
made with the Borrower's prior written consent.  To the extent permitted by law,
the Borrower agrees that each  Participant  shall be entitled to the benefits of
Section 2.18 as though it were a Lender,  provided, that such Participant agrees
to share with the Lenders the proceeds  thereof in accordance  with Section 2.18
as fully as if it were a Lender hereunder. A Participant that would be a Foreign
Lender if it were a Lender shall not be entitled to the benefits of Section 2.17
unless the Borrower is notified of such  participation  sold to such Participant
and such  Participant  agrees,  for the benefit of the Borrower,  to comply with
Section 2.17(e) as though it were a Lender hereunder. Any Lender may at any time
pledge or assign a security  interest in all or any portion of its rights  under
this  Agreement  and its Notes (if any) to secure its  obligations  to a Federal
Reserve Bank without complying with this Section;  provided, that no such pledge
or assignment  shall release a Lender from any of its  obligations  hereunder or
substitute  any such  pledgee or  assignee  for such  Lender as a party  hereto.
Notwithstanding  anything  to the  contrary  contained  herein,  any  Lender  (a
"Granting  Lender") may grant to a special  purpose  funding vehicle (an "SPV"),
identified  as such in writing from time to time by the  Granting  Lender to the
Administrative Agent and the Borrower, the option to provide to the Borrower all
or any part of any Loan that such Granting  Lender would  otherwise be obligated
to make to the Borrower pursuant to this Agreement;  provided,  that (i) nothing
herein shall  constitute a commitment by any SPV to make any Loan and (ii) if an
SPV elects not to exercise such option or otherwise  fails to provide all or any
part of any Loan,  the  Granting  Lender  shall be  obligated  to make such Loan
pursuant to the terms  hereof.  The making of a Loan by an SPV  hereunder  shall
utilize the Commitment of the Granting Lender to the same extent, and as if such
Loan were made by such Granting Lender.  Each party hereto hereby agrees that no
SPV shall be liable for any indemnity or similar payment  obligation  under this
Agreement  (all liability for which shall remain with the Granting  Lender).  In
furtherance of the foregoing,  each party hereto hereby agrees (which  agreement
shall survive the termination of this Agreement) that, prior to the date that is
one year and one day after the  payment  in full of all  outstanding  commercial
paper or other senior indebtedness of any SPV, it will not institute against, or
join  any  other  person  in  instituting  against,  such  SPV  any  bankruptcy,
reorganization,  arrangement,  insolvency or liquidation  proceedings  under the
laws of the United States or any State. Notwithstanding anything to the contrary
in this  Section  11.4,  any SPV may (i) with  notice to, but  without the prior
written consent of, the Borrower and the Administrative Agent and without paying
any  processing  fee  therefor,  assign all or a portion of its interests in any
Loans to the Granting Lender or to any financial  institutions  (consented to by
the Borrower and the  Administrative  Agent)  providing  liquidity and/or credit
support to or for the account of such SPV to support the funding or  maintenance
of Loans and (ii) disclose on a confidential  basis any  non-public  information
relating to its Loans to any rating agency,  commercial paper dealer or provider
of any surety, guarantee or credit or liquidity enhancement to such SPV. As this
Section  11.4(e)  applies to any particular SPV, this Section may not be amended
without the written consent of such SPV. Governing Law; Jurisdiction; Consent to
Service  of  Process.  This  Agreement  and the other  Loan  Documents  shall be
construed in accordance  with and be governed by the law (without  giving effect
to the conflict of law principles thereof) of the State of New York. Each of the
Borrower and KPP hereby irrevocably and unconditionally  submits, for itself and
its property,  to the  non-exclusive  jurisdiction of the United States District
Court of the  Southern  District of New York,  and of the  Supreme  Court of the
State of New York  sitting in New York County and any  appellate  court from any
thereof,  in any  action  or  proceeding  arising  out of or  relating  to  this
Agreement or any other Loan Document or the transactions  contemplated hereby or
thereby,  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 court or, to the extent  permitted by  applicable  law,  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 or any other Loan Document shall affect any right that
the Administrative Agent or any Lender may otherwise have to bring any action or
proceeding  relating to this  Agreement or any other Loan  Document  against the
Borrower  or its  properties  in the  courts  of any  jurisdiction.  Each of the
Borrower and KPP irrevocably and  unconditionally  waives any objection which it
may now or  hereafter  have to the laying of venue of any such  suit,  action or
proceeding  described in subsection (b) of this Section and brought in any court
referred  to in  subsection  (b) of this  Section.  Each of the  parties  hereto
irrevocably  waives,  to the fullest  extent  permitted by  applicable  law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such  court.  Each party to this  Agreement  irrevocably  consents to the
service of process in the manner  provided for notices in Section 11.1.  Nothing
in this  Agreement  or in any other Loan  Document  will affect the right of any
party hereto to serve  process in any other manner  permitted by law.  WAIVER OF
JURY  TRIAL.  EACH  PARTY  HERETO  IRREVOCABLY  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 THIS  AGREEMENT OR ANY
OTHER LOAN DOCUMENT OR THE TRANSACTIONS  CONTEMPLATED HEREBY OR THEREBY (WHETHER
BASED ON CONTRACT,  TORT OR ANY OTHER  THEORY).  EACH PARTY HERETO (i) 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 (ii) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES  HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND
THE OTHER  LOAN  DOCUMENTS  BY,  AMONG  OTHER  THINGS,  THE MUTUAL  WAIVERS  AND
CERTIFICATIONS IN THIS SECTION.

         Right of Setoff.

         In addition to any rights now or hereafter granted under applicable law
and not by way of  limitation  of any such  rights,  each Lender  shall have the
right,  at any time or from  time to time upon the  occurrence  and  during  the
continuance of an Event of Default, without prior notice to the Borrower or KPP,
any such notice  being  expressly  waived by the  Borrower and KPP to the extent
permitted by applicable law, to set off and apply against all deposits  (general
or special, time or demand,  provisional or final) of the Borrower or KPP at any
time held or other  obligations  at any time owing by such  Lender to or for the
credit or the account of the  Borrower  or KPP  against any and all  Obligations
held by such Lender,  irrespective of whether such Lender shall have made demand
hereunder and although  such  Obligations  may be unmatured.  Each Lender agrees
promptly  to notify the  Administrative  Agent and the  Borrower  after any such
set-off and any application made by such Lender;  provided,  that the failure to
give such notice shall not affect the validity of such set-off and application.

         Counterparts; Integration.

         This  Agreement  may be  executed by one or more of the parties to this
Agreement on any number of separate  counterparts  (including by telecopy),  and
all of said  counterparts  taken  together shall be deemed to constitute one and
the same  instrument.  This  Agreement,  the other  Loan  Documents  and the Fee
Letters  constitute  the entire  agreement  among the parties hereto and thereto
regarding  the  subject  matters  hereof and  thereof  and  supersede  all prior
agreements and understandings, oral or written, regarding such subject matters.

         Survival.

         All covenants,  agreements,  representations and warranties made by the
Borrower and KPP 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 this  Agreement  and the  making of any  Loans,  regardless  of any
investigation made by any such other party or on its behalf and  notwithstanding
that the Administrative  Agent or any Lender 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  this  Agreement  is  outstanding  and  unpaid and so long as the
Commitments  have not expired or  terminated.  The  provisions of Sections 2.15,
2.16,  2.17 and 11.3 and  Article X shall  survive  and remain in full force and
effect regardless of the consummation of the transactions  contemplated  hereby,
the repayment of the Loans,  the expiration or termination of the Commitments or
the termination of this Agreement or any provision hereof.  All  representations
and warranties made herein, in the  certificates,  reports,  notices,  and other
documents  delivered  pursuant to this Agreement shall survive the execution and
delivery of this Agreement and the other Loan  Documents,  and the making of the
Loans.

         Severability.

         Any  provision of this  Agreement or any other Loan Document held to be
illegal,  invalid  or  unenforceable  in any  jurisdiction,  shall,  as to  such
jurisdiction,  be  ineffective to the extent of such  illegality,  invalidity or
unenforceability  without affecting the legality,  validity or enforceability of
the remaining  provisions hereof or thereof;  and the illegality,  invalidity or
unenforceability  of a particular  provision in a particular  jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.

         Confidentiality.

         Each of the Administrative  Agent and each Lender agrees to take normal
and reasonable  precautions to maintain the  confidentiality  of any information
designated  in  writing  as  confidential  and  provided  to it by  KPP  or  any
Subsidiary  of KPP,  except that such  information  may be disclosed  (i) to any
Related Party of the Administrative Agent or any such Lender,  including without
limitation  accountants,  legal counsel and other  advisors,  (ii) to the extent
required by applicable  laws or  regulations or by any subpoena or similar legal
process,  (iii) to the extent  requested by any regulatory  agency or authority,
(iv) to the extent that such information  becomes publicly  available other than
as a result of a breach of this Section 11.11, or which becomes available to the
Administrative  Agent  or  any  Related  Party  of any  of  the  foregoing  on a
nonconfidential basis from a source other than KPP or any Subsidiary of KPP, (v)
in connection with the exercise of any remedy  hereunder or any suit,  action or
proceeding  relating to this Agreement or the  enforcement of rights  hereunder,
and (vi) subject to provisions  substantially  similar to this Section 11.11, to
any actual or prospective assignee or Participant,  or (vii) with the consent of
the  Borrower.  Any Person  required  to  maintain  the  confidentiality  of any
information  as provided for in this Section  11.11 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 its own confidential information.

         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 may be treated as  interest  on such Loan  under  applicable  law
(collectively,  the "Charges"), shall exceed the maximum lawful rate of interest
(the "Maximum Rate") that may be contracted  for,  charged,  taken,  received or
reserved by a Lender holding such Loan in accordance  with  applicable  law, the
rate of interest  payable in respect of such Loan  hereunder,  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  11.12 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 Rate to the date of  repayment,  shall have been
received by such Lender.

         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.

                                     KANEB PIPE LINE OPERATING PARTNERSHIP, L.P.

                                     By KANEB PIPE LINE COMPANY,
                                        General Partner

                                     By /s/Edward D. Doherty
                                     Name:     Edward D. Doherty
                                     Title:    Chairman of the Board

                                      KANEB PIPE LINE PARTNERS, L.P.

                                      By KANEB PIPE LINE COMPANY,
                                         General Partner

                                      By /s/Edward D. Doherty
                                      Name:     Edward D. Doherty
                                      Title:    Chairman of Board

                                      SUNTRUST BANK
                                      as Administrative Agent and as a Lender

                                      By /s/John A. Fields, Jr.
                                      Name:     John A. Fields, Jr.
                                      Title:    Managing Director

                                      Commitment: $50,000,000.00

                                      BANK OF AMERICA, N.A.

                                      By /s/J. Scott Fowler
                                      Name:     J. Scott Fowler
                                      Title:    Managing Director

                                      Commitment: $35,000,000.00

                                      BANK ONE, NA

                                      By /s/Jeanie Harman
                                      Name:     Jeanie Harman
                                      Title:    First Vice President

                                      Commitment: $70,000,000.00

                                       BNP PARIBAS

                                       By /s/Larry Robinson
                                       Name:     Larry Robinson
                                       Title:    Vice President

                                       By /s/John H. Roberts
                                       Name:     John H. Roberts
                                       Title:    Vice President

                                       Commitment: $25,000,000.00

                                       FLEET NATIONAL BANK

                                        By /s/Sarah P.Z. Dwyer
                                        Name:     Sarah P.Z. Dwyer
                                        Title:    Vice President

                                        Commitment: $70,000,000.00

                                        THE INDUSTRIAL BANK OF JAPAN, LIMITED
                                        New York Branch

                                        By /s/Ryusuke Aya
                                        Name:     Ryusuke Aya
                                        Title:    Senior Vice President

                                        Commitment: $25,000,000.00

                                   Schedule I
                   APPLICABLE MARGIN AND APPLICABLE PERCENTAGE

<TABLE>
<CAPTION>
<S>            <C>                               <C>                     <C>                    <C>
-------------- --------------------------------- ----------------------- ---------------------- ----------------------
                                                                                                     Applicable
   Pricing           Consolidated Funded         Applicable Margin for     Applicable Margin       Percentage for
    Level                Debt:EBITDA                Eurodollar Loans      for Base Rate Loans      Commitment Fee
-------------- --------------------------------- ----------------------- ---------------------- ----------------------
--------------                                   ----------------------- ---------------------- ----------------------
                      Reference Ratings
--------------                                   ----------------------- ---------------------- ----------------------
-------------- --------------------------------- ----------------------- ---------------------- ----------------------
      I        Less than 2.50:1:00                     .625% p.a.               0% p.a.               .20% p.a.
-------------- --------------------------------- ----------------------- ---------------------- ----------------------
--------------                                   ----------------------- ---------------------- ----------------------
               BBB+ or higher/Baa1 or higher
--------------                                   ----------------------- ---------------------- ----------------------
-------------- --------------------------------- ----------------------- ---------------------- ----------------------
     II        Less than 3.00:1.00 but greater         .750% p.a.               0% p.a.              .250% p.a.
               than or equal to 2.50:1.00
-------------- --------------------------------- ----------------------- ---------------------- ----------------------
--------------                                   ----------------------- ---------------------- ----------------------
               BBB or higher/Baa2 or higher
--------------                                   ----------------------- ---------------------- ----------------------
-------------- --------------------------------- ----------------------- ---------------------- ----------------------
     III       Less than 3.50:1.00 but greater        1.000% p.a.               0% p.a.              .250% p.a.
               than or equal to 3.00:1.0
-------------- --------------------------------- ----------------------- ---------------------- ----------------------
--------------                                   ----------------------- ---------------------- ----------------------
               BBB- or higher/Baa3 or higher
--------------                                   ----------------------- ---------------------- ----------------------
-------------- --------------------------------- ----------------------- ---------------------- ----------------------
     IV        Equal to or greater than               1.250% p.a.               0% p.a.              .375% p.a.
               3.50:1:00
-------------- --------------------------------- ----------------------- ---------------------- ----------------------
--------------                                   ----------------------- ---------------------- ----------------------
               BB+ or higher/Ba1 or higher/or
               unrated
-------------- --------------------------------- ----------------------- ---------------------- ----------------------

</TABLE>

         If (i) the Applicable  Margin and the  Applicable  Percentage are to be
determined by the Reference  Ratings,  (ii) more than one Reference Rating is in
effect, (iii) such Reference Ratings are "split ratings" and (iv)(A) the ratings
differential is one category,  the lower of the two Reference Ratings will apply
(e.g., BBB+/Baa2 results in Level II status) and (B) the ratings differential is
more  than one  category,  the rate  shall be  determined  by  reference  to the
category  next  above  that of the  lower of the two  Reference  Ratings  (e.g.,
A-/Baa3,  then the rate  would be  based  on  Level  II  status).  If,  once any
Reference Party has obtained a Credit Rating,  neither Reference Party continues
to maintain any Credit  Rating,  then the rate shall be established by reference
to Level IV.

         If the  rating  system of S&P or  Moody's  shall  change,  or if either
rating  agency  shall  cease to be in the  business  of  rating  corporate  debt
obligations,  the  Borrower,  the  Lenders  and the  Administrative  Agent shall
negotiate in good faith to amend this  Schedule 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  Margin and the Applicable
Percentage  shall be  determined  by  reference  to the  Reference  Ratings most
recently in effect prior to any such change or cessation.  If after a reasonable
time the parties cannot agree to a mutually acceptable amendment, the Applicable
margin and the Applicable  Percentage  shall be determined by reference to Level
IV.

<PAGE>

                                  Schedule 4.5
                                   Schedule II

                              EXISTING INDEBTEDNESS

$15,000,000 7.89% Notes due June 27, 2016

$35,000,000 7.08% Notes due June 27, 2001

$33,000,000 8.05% Senior Notes due December 22, 2001

$27,000,000 8.37% Notes due February 24, 2002

$ 8,000,000 7.43% Notes due June 27, 2003

$10,000,000 7.60% Senior Notes due June 27, 2006

[CHASE REVOLVER]

<PAGE>

                                                                    SCHEDULE 4.5

                              ENVIRONMENTAL MATTERS

                                     [None]

<PAGE>

                                  Schedule 7.2
                                  SCHEDULE 4.15

                     SUBSIDIARIES, SIGNIFICANT SUBSIDIARIES,
                      SIGNIFICANT AFFILIATES AND GUARANTORS

<TABLE>
<CAPTION>

<S>                                 <C>                      <C>                         <C>
Subsidiary or Affiliate             State of Incorp.             Entity Type             KPP's ownership

Kaneb Pipe Line Partners, L.P.         Delaware              Limited Partnership         N/A*

Kaneb Pipe Line Operating
     Partnership, L.P.                 Delaware              Limited Partnership          99% L.P. interest

Support Terminal Operating                                                                99% L.P. interest*
     Partnership, L.P.                 Delaware              Limited Partnership          1% G.P. interest

ST Services Ltd.                     United Kingdom          Limited Corporation          100%

ST Eastham  Ltd.                     United Kingdom          Limited Corporation          100%

ST Linden Terminal LLC                 Delaware              Limited Liability Corporation 50% managing member

ST/Center Chillicothe LLC              Delaware              Limited Liability Corporation 50% managing member

Support Terminal Services, Inc.        Delaware              Corporation                  100%*

StanTrans, Inc.                        Delaware              Corporation                  100%*

StanTrans Holding, Inc.                Delaware              Corporation                  100%

StanTrans Partners, L.P.               Delaware              Limited Partnership           99% L.P. interest
                                                                                            1% G.P. interest
</TABLE>

* Guarantor

<PAGE>
                                                                    SCHEDULE 7.2
                                 EXISTING LIENS

$27,000,000                    First Mortgage Notes              due 2/24/02*
$33,000,000                    First Mortgage Notes              due 1/22/01*
$35,000,000                    First Mortgage Notes              due 6/27/01*
$ 8,000,000                    First Mortgage Notes              due 6/27/03*
$10,000,000                    First Mortgage Notes              due 6/27/06*
$15,000,000                    First Mortgage Notes              due 6/27/16*
$15,000,000                    Revolver                          due 1/31/01*
(pound)16,000,000              Term Loan                         due 1/31/02**

The  indebtedness  listed  above is  secured  by a pledge  by  Kaneb  Pipe  Line
Operating Partnership, L.P. of the East pipeline and gathering system located in
Kansas,  Nebraska,  Iowa,  North  Dakota and South  Dakota  (the "East  Pipeline
Collateral") and a pledge by Kaneb Pipe Line Operating Partnership,  L.P. of all
of the issued and outstanding  common stock of Support Terminal  Services,  Inc.
The East Pipeline Collateral includes,  but is not limited to, (a) all fee lands
and other  rights,  (b) all  surface  and other  leases,  (c) all rights of way,
easements,  servitudes, rights under oil & gas leases, licenses and permits, (d)
all franchises,  licenses,  certificates of public  convenience,  (e) all loops,
laterals,   mains,  lines,  (f)  all  contracts  and  agreements  for  purchase,
acquisition,  gathering,  (g) all hydrocarbons within the pipeline systems,  (h)
all present and future  accounts and (i) all present  tenements,  hereditaments,
appurtenances,  profits and  properties.  The East Pipeline  Collateral and such
stock are described further in the Collateral Trust and Intercreditor Agreement,
dated as of  December  22,  1994,  by and among  Texas  Commerce  Bank  National
Association as Agent,  the Original  Banks,  the Original  Noteholders,  and the
Collateral Trustee (each as defined therein) as amended from time to time.

* Indebtedness to be paid on January 2, 2001.
** Lien to be released on the Closing Date.

<PAGE>

                                                                       EXHIBIT A

                                  FORM OF NOTE

[$___________]

         FOR  VALUE  RECEIVED,  the  undersigned,   KANEB  PIPE  LINE  OPERATING
PARTNERSHIP,  L.P., a Delaware  limited  partnership  (the  "Borrower"),  hereby
promises to pay to [name of Lender] (the "Lender") or its registered assigns, at
the office of  SunTrust  Bank  ("SunTrust")  at 25 Park  Place,  N.E.,  Atlanta,
Georgia  30303,  on the  Termination  Date (as defined in the  Revolving  Credit
Agreement,  dated  as of  December  28,  2000  (as  the  same  may  be  amended,
supplemented or otherwise  modified from time to time, the "Credit  Agreement"),
among the Borrower,  Kaneb Pipe Line  Partners,  L.P.,  the lenders from time to
time party thereto and SunTrust,  as administrative  agent for the lenders,  the
lesser of the  principal  sum of [AMOUNT OF SUCH  LENDER'S  COMMITMENT]  and the
aggregate  unpaid  principal  amount  of all  Loans  made by the  Lender  to the
Borrower pursuant to the Credit Agreement,  in lawful money of the United States
of America in  immediately  available  funds,  and to pay interest from the date
hereof on the principal  amount thereof from time to time  outstanding,  in like
funds, at said office,  at the rate or rates per annum and payable on such dates
as provided in the Credit  Agreement.  In  addition,  should  legal action or an
attorney-at-law  be utilized to collect any amount due  hereunder,  the Borrower
further  promises  to pay all  costs of  collection,  including  the  reasonable
attorneys' fees of the Lender.

         The  Borrower  promises  to pay  interest,  on demand,  on any  overdue
principal and, to the extent  permitted by law,  overdue interest from their due
dates at a rate or rates provided in the Credit Agreement.

         All borrowings  evidenced by this Note and all payments and prepayments
of the  principal  hereof and the date  thereof  shall be endorsed by the holder
hereof  on  the  schedule  attached  hereto  and  made  a  part  hereof  or on a
continuation  thereof which shall be attached hereto and made a part hereof,  or
otherwise  recorded by such holder in its internal records;  provided,  that the
failure  of the  holder  hereof  to make  such a  notation  or any error in such
notation  shall not affect the  obligations of the Borrower to make the payments
of  principal  and  interest in  accordance  with the terms of this Note and the
Credit Agreement.

         This Note is issued in connection with, and is entitled to the benefits
of, the Credit Agreement which, among other things,  contains provisions for the
acceleration of the maturity  hereof upon the happening of certain  events,  for
prepayment  of the  principal  hereof prior to the  maturity  hereof and for the
amendment or waiver of certain provisions of the Credit Agreement,  all upon the
terms  and  conditions  therein  specified.  THIS  NOTE  SHALL BE  CONSTRUED  IN
ACCORDANCE  WITH  AND  GOVERNED  BY THE  LAWS OF THE  STATE  OF NEW YORK AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.

                                     KANEB PIPE LINE OPERATING PARTNERSHIP, L.P.

                                     By KANEB PIPE LINE COMPANY,
                                        General Partner

                                     By
                                     Name:
                                     Title:

<PAGE>
                               LOANS AND PAYMENTS

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

                                                                     Unpaid Principal            Name of Person
                        Amount and             Payments of              Balance of                   Making
     Date              Type of Loan              Principal                 Note                     Notation
---------------- ------------------------- --------------------- -------------------------- --------------------------
---------------- ------------------------- --------------------- -------------------------- --------------------------

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

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

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

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

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</TABLE>

<PAGE>
                                     FORM OF

                            ASSIGNMENT AND ACCEPTANCE

         Reference  is made to the Credit  Agreement,  dated as of December  28,
2000 (as amended  and in effect on the date  hereof,  the  "Credit  Agreement"),
among  Kaneb  Pipe  Line  Operating   Partnership,   L.P.,  a  Delaware  limited
partnership, Kaneb Pipe Line Partners, L.P., a Delaware limited partnership, the
Lenders  from time to time party  hereto and SunTrust  Bank,  as  Administrative
Agent for the Lenders.  Terms  defined in the Credit  Agreement  are used herein
with the same meanings.

         The  Assignor  hereby  sells  and  assigns,  without  recourse,  to the
Assignee  designated  below,  and the  Assignee  hereby  purchases  and assumes,
without  recourse,  from the Assignor,  effective as of the Assignment  Date set
forth below,  the  interests  set forth below (the  "Assigned  Interest") in the
Assignor's rights and obligations under the Credit Agreement, including, without
limitation,  the interests set forth below in the  Commitment of the Assignor on
the Assignment  Date and Loans owing to the Assignor that are outstanding on the
Assignment  Date, but excluding  accrued  interest and fees to and excluding the
Assignment  Date.  The  Assignee  hereby  acknowledges  receipt of a copy of the
Credit Agreement. From and after the Assignment Date (i) the Assignee shall be a
party to and be bound by the  provisions  of the Credit  Agreement  and,  to the
extent of the Assigned  Interest,  have the rights and  obligations  of a Lender
thereunder and (ii) the Assignor shall, to the extent of the Assigned  Interest,
relinquish  its rights and be  released  from its  obligations  under the Credit
Agreement.

         This Assignment and Acceptance is being delivered to the Administrative
Agent together with (i) if the Assignee is a Foreign Lender,  any  documentation
required to be  delivered  by the  Assignee  pursuant to Section  2.17(e) of the
Credit Agreement,  duly completed and executed by the Assignee,  and (ii) if the
Assignee is not already a Lender under the Credit  Agreement,  an Administrative
Questionnaire in the form supplied by the  Administrative  Agent, duly completed
by the Assignee.  The Assignee  shall pay the fee payable to the  Administrative
Agent pursuant to Section 11.4(b) of the Credit Agreement.

         This  Assignment and  Acceptance  shall be governed by and construed in
accordance with the laws of the State of New York.

Date of Assignment:

Legal Name of Assignor:

Legal Name of Assignee:

Assignee's Address for Notices:

Effective Date of Assignment:
("Assignment Date"):

<PAGE>

                                                                       EXHIBIT C

                                     FORM OF

                         SUBSIDIARY GUARANTEE AGREEMENT

This SUBSIDIARY  GUARANTEE  AGREEMENT (the "Agreement"),  dated as of [ ], among
each of the  Subsidiaries  listed on  Schedule I hereto  (each  such  subsidiary
individually,  a "Guarantor" and  collectively,  the "Guarantors") of KANEB PIPE
LINE  OPERATING   PARTNERSHIP,   L.P.,  a  Delaware  limited   partnership  (the
"Borrower"),  and SUNTRUST BANK, a Georgia banking corporation as administrative
agent (the  "Administrative  Agent")  for the  Lenders (as defined in the Credit
Agreement referred to below).
         Reference  is made  to the  Revolving  Credit  Agreement,  dated  as of
December 28, 2000 (as amended,  supplemented or otherwise  modified from time to
time,  the "Credit  Agreement"),  among the Borrower,  Kaneb Pipe Line Partners,
L.P.,  the lenders from time to time party thereto (the  "Lenders") and SunTrust
Bank,  as  administrative   agent  for  the  Lenders  (in  such  capacity,   the
"Administrative  Agent").  Capitalized  terms used herein and not defined herein
shall have the meanings assigned to such terms in the Credit Agreement.

         The Lenders have agreed to make Loans to the Borrower  pursuant to, and
upon the terms and subject to the conditions specified in, the Credit Agreement.
Each of the  Guarantors  is a direct or indirect  Subsidiary of the Borrower and
acknowledges  that it will  derive  substantial  benefit  from the making of the
Loans  by the  Lenders.  The  obligations  of the  Lenders  to  make  Loans  are
conditioned on, among other things, the execution and delivery by the Guarantors
of a  Subsidiary  Guarantee  Agreement  in the  form  hereof.  As  consideration
therefor and in order to induce the Lenders to make Loans,  the  Guarantors  are
willing to execute this Subsidiary Guarantee Agreement.

         Accordingly, the parties hereto agree as follows:

Guarantee.
         Each  Guarantor  unconditionally  guarantees,  jointly with KPP and the
other Guarantors and severally, as a primary obligor and not merely as a surety,
(i) the due and punctual  payment of (A) the  principal of and premium,  if any,
and interest (including interest accruing during the pendency of any bankruptcy,
insolvency,  receivership  or other  similar  proceeding,  regardless of whether
allowed or allowable in such proceeding) on the Loans,  when and as due, whether
at  maturity,  by  acceleration,  upon one or more dates set for  prepayment  or
otherwise,  and (B) all  other  monetary  obligations,  including  fees,  costs,
expenses and indemnities,  whether primary, secondary, direct, contingent, fixed
or otherwise (including monetary obligations incurred during the pendency of any
bankruptcy, insolvency,  receivership or other similar proceeding, regardless of
whether  allowed or  allowable in such  proceeding),  of the Loan Parties to the
Administrative  Agent and the Lenders  under the Credit  Agreement and the other
Loan  Documents,  (ii)  the  due  and  punctual  performance  of all  covenants,
agreements, obligations and liabilities of the Loan Parties under or pursuant to
the  Credit  Agreement  and the  other  Loan  Documents;  and  (iii) the due and
punctual payment and performance of all obligations of the Borrower, monetary or
otherwise,  under each Hedging  Agreement  entered into with a counterparty that
was a Lender or an Affiliate of a Lender at the time such Hedging  Agreement was
entered  into  (all  the  monetary  and  other  obligations  referred  to in the
preceding   clauses   (i)   through   (iii)   being   collectively   called  the
"Obligations").  Each  Guarantor  further  agrees  that the  Obligations  may be
extended or renewed,  in whole or in part,  without  notice to or further assent
from it, and that it will remain bound upon its  guarantee  notwithstanding  any
extension or renewal of any Obligation.

Obligations Not Waived.
         To the fullest  extent  permitted by  applicable  law,  each  Guarantor
waives  presentment  to,  demand of payment  from and  protest to the other Loan
Parties of any of the  Obligations,  and also waives notice of acceptance of its
guarantee and notice of protest for nonpayment.  To the fullest extent permitted
by applicable  law, the  obligations  of each Guarantor  hereunder  shall not be
affected by (i) the failure of the Administrative  Agent or any Lender to assert
any claim or demand or to enforce or  exercise  any right or remedy  against the
Borrower or any other  Guarantor  under the provisions of the Credit  Agreement,
any other Loan Document or otherwise, (ii) any rescission,  waiver, amendment or
modification  of, or any release  from any of the terms or  provisions  of, this
Agreement,  any other  Loan  Document  or any other  agreement,  including  with
respect to any other  Guarantor  under this  Agreement,  or (iii) the failure to
perfect any security interest in, or the release of, any of the security held by
or on behalf of the Administrative Agent or any Lender.

Guarantee of Payment.
         Each  Guarantor  further  agrees  that  its  guarantee   constitutes  a
guarantee  of payment  when due and not of  collection,  and waives any right to
require that any resort be had by the Administrative  Agent or any Lender to any
of the  security  held for payment of the  Obligations  or to any balance of any
deposit account or credit on the books of the Administrative Agent or any Lender
in favor of the Borrower or any other Person.

No Discharge or Diminishment of Guarantee.
         The obligations of each Guarantor hereunder shall not be subject to any
reduction, limitation,  impairment or termination for any reason (other than the
indefeasible payment in full in cash of the Obligations), including any claim of
waiver, release, surrender,  alteration or compromise of any of the Obligations,
and shall not be subject to any defense or setoff,  counterclaim,  recoupment or
termination   whatsoever   by   reason   of  the   invalidity,   illegality   or
unenforceability   of  the  Obligations  or  otherwise.   Without  limiting  the
generality of the foregoing,  the obligations of each Guarantor  hereunder shall
not be  discharged  or  impaired  or  otherwise  affected  by the failure of the
Administrative  Agent or any  Lender to assert any claim or demand or to enforce
any remedy  under the Credit  Agreement,  any other Loan  Document  or any other
agreement, by any waiver or modification of any provision of any thereof, by any
default,  failure or delay,  willful or  otherwise,  in the  performance  of the
Obligations,  or by any other act or omission that may or might in any manner or
to the extent vary the risk of any Guarantor or that would otherwise  operate as
a  discharge  of each  Guarantor  as a matter of law or equity  (other  than the
indefeasible payment in full in cash of all the Obligations).

Defenses of Borrower Waived.
         To the fullest  extent  permitted by  applicable  law,  each  Guarantor
waives any  defense  based on or arising out of any defense of any Loan Party or
the  unenforceability  of the Obligations or any part thereof from any cause, or
the cessation from any cause of the liability of any Loan Party,  other than the
final  and  indefeasible  payment  in  full  in  cash  of the  Obligations.  The
Administrative  Agent and the Lenders may, at their  election,  foreclose on any
security  held by one or more of  them by one or more  judicial  or  nonjudicial
sales,  accept  an  assignment  of any  such  security  in lieu of  foreclosure,
compromise or adjust any part of the Obligations,  make any other  accommodation
with any other Loan Party or any other guarantor, without affecting or impairing
in any way the  liability of any  Guarantor  hereunder  except to the extent the
Obligations have been fully,  finally and indefeasibly paid in cash. Pursuant to
applicable  law,  each  Guarantor  waives any  defense  arising  out of any such
election even though such  election  operates,  pursuant to  applicable  law, to
impair or to extinguish any right of reimbursement or subrogation or other right
or remedy of such  Guarantor  against  the  Borrower or any other  Guarantor  or
guarantor, as the case may be, or any security.

Agreement to Pay; Subordination.
         In  furtherance  of the  foregoing  and not in  limitation of any other
right  that the  Administrative  Agent  or any  Lender  has at law or in  equity
against any Guarantor by virtue hereof,  upon the failure of the Borrower or any
other Loan Party to pay any  Obligation  when and as the same shall  become due,
whether at maturity,  by acceleration,  after notice of prepayment or otherwise,
each Guarantor  hereby  promises to and will forthwith pay, or cause to be paid,
to the Administrative Agent for the benefit of the Lenders in cash the amount of
such  unpaid  Obligations.  Upon  payment  by any  Guarantor  of any sums to the
Administrative  Agent,  all  rights of such  Guarantor  against  any Loan  Party
arising  as a  result  thereof  by way of right  of  subrogation,  contribution,
reimbursement,  indemnity or otherwise  shall in all respects be subordinate and
junior in right of payment to the prior indefeasible  payment in full in cash of
all the  Obligations.  In addition,  any  indebtedness  of any Loan Party now or
hereafter  held by any Guarantor is hereby  subordinated  in right of payment to
the  prior  payment  in full in cash of the  Obligations.  If any  amount  shall
erroneously  be  paid to any  Guarantor  on  account  of (i)  such  subrogation,
contribution,  reimbursement,  indemnity  or  similar  right  or (ii)  any  such
indebtedness  of any Loan  Party,  such  amount  shall be held in trust  for the
benefit of the Administrative  Agent and the Lenders and shall forthwith be paid
to  the  Administrative  Agent  to  be  credited  against  the  payment  of  the
Obligations,  whether matured or unmatured,  in accordance with the terms of the
Loan Documents.

Information.
         Each Guarantor assumes all  responsibility for being and keeping itself
informed of other Loan Parties' financial condition and assets, and of all other
circumstances  bearing upon the risk of  nonpayment of the  Obligations  and the
nature,  scope and extent of the risks that such  Guarantor  assumes  and incurs
hereunder,  and agrees that none of the Administrative Agent or the Lenders will
have any duty to advise any of the Guarantors of information  known to it or any
of them regarding such circumstances or risks.

Representations and Warranties.
         Each   Guarantor   represents  and  warrants  as  to  itself  that  all
representations and warranties relating to it (as a Subsidiary of KPP) contained
in the Credit Agreement are true and correct.

Termination.
         The  guarantees  made  hereunder  (i)  shall  terminate  when  all  the
Obligations  have  been  paid in full in cash and the  Lenders  have no  further
commitment  to lend under the Credit  Agreement  and (ii) shall  continue  to be
effective or be reinstated,  as the case may be, if at any time payment,  or any
part thereof,  of any  Obligation is rescinded or must  otherwise be restored by
any  Lender  or any  Guarantor  upon the  bankruptcy  or  reorganization  of the
Borrower,  any Guarantor or otherwise.  In connection  with the  foregoing,  the
Administrative  Agent shall execute and deliver to such Guarantor or Guarantor's
designee,  at such Guarantor's  expense, any documents or instruments which such
Guarantor  shall  reasonably   request  from  time  to  time  to  evidence  such
termination and release.

Binding Effect; Several Agreement; Assignments.
         Whenever in this  Agreement  any of the parties  hereto is referred to,
such  reference  shall be deemed to include the  successors  and assigns of such
party;  and all  covenants,  promises  and  agreements  by or on  behalf  of the
Guarantors  that are  contained  in this  Agreement  shall bind and inure to the
benefit of each party hereto and their respective  successors and assigns.  This
Agreement shall become  effective as to any Guarantor when a counterpart  hereof
executed  on  behalf  of  such  Guarantor  shall  have  been  delivered  to  the
Administrative  Agent,  and a  counterpart  hereof  shall have been  executed on
behalf of the  Administrative  Agent,  and thereafter shall be binding upon such
Guarantor  and the  Administrative  Agent and their  respective  successors  and
assigns,  and shall inure to the benefit of such Guarantor,  the  Administrative
Agent and the Lenders, and their respective successors and assigns,  except that
no Guarantor shall have the right to assign its rights or obligations  hereunder
or any interest herein (and any such attempted assignment shall be void). If all
of the capital stock of a Guarantor is sold,  transferred or otherwise  disposed
of pursuant to a transaction  permitted by the Credit Agreement,  such Guarantor
shall be released from its  obligations  under this  Agreement  without  further
action.  This Agreement shall be construed as a separate  agreement with respect
to each Guarantor and may be amended, modified, supplemented, waived or released
with respect to any  Guarantor  without the approval of any other  Guarantor and
without affecting the obligations of any other Guarantor hereunder.

         Waivers;  Amendment. No failure or delay of the Administrative Agent of
any in  exercising  any  power  or right  hereunder  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 of the Administrative  Agent hereunder and of the
Lenders under the other Loan  Documents are  cumulative and are not exclusive of
any  rights  or  remedies  that  they  would  otherwise  have.  No waiver of any
provision  of this  Agreement  or  consent  to any  departure  by any  Guarantor
therefrom shall in any event be effective  unless the same shall be permitted by
subsection  (b) below,  and then such waiver and consent shall be effective only
in the  specific  instance  and for the  purpose for which  given.  No notice or
demand on any Guarantor in any case shall entitle such Guarantor to any other or
further notice in similar or other circumstances. Neither this Agreement nor any
provision hereof may be waived, amended or modified except pursuant to a written
agreement entered into between the Guarantors with respect to which such waiver,
amendment or modification  relates and the Administrative  Agent, with the prior
written  consent of the Required  Lenders  (except as otherwise  provided in the
Credit  Agreement).  Governing  Law.  THIS  AGREEMENT  SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

Notices.
         All  communications and notices hereunder shall be in writing and given
as provided in Section 11.01 of the Credit  Agreement.  All  communications  and
notices  hereunder  to each  Guarantor  shall be given to it at its  address set
forth on Schedule I attached hereto.

         Survival  of  Agreement;   Severability.   All  covenants,   agreements
representations  and  warranties  made  by  the  Guarantors  herein  and  in the
certificates  or other  instruments  prepared or delivered in connection with or
pursuant to this  Agreement or the other Loan  Document  shall be  considered to
have been  relied  upon by the  Administrative  Agent and the  Lenders and shall
survive the making by the Lenders of the Loans  regardless of any  investigation
made by any of them or on their  behalf,  and shall  continue  in full force and
effect as long as the  principal  of or any accrued  interest on any Loan or any
other fee or amount  payable under this  Agreement or any other Loan Document is
outstanding and unpaid and as long as the Commitments  have not been terminated.
In the event 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.   Counterparts.  This
Agreement  may be executed in  counterparts,  each of which shall  constitute an
original,  but all of  which  when  taken  together  shall  constitute  a single
contract  (subject to Section  10),  and shall  become  effective as provided in
Section  10.  Delivery  of an  executed  signature  page  to this  Agreement  by
facsimile  transmission shall be as effective as delivery of a manually executed
counterpart of this Agreement.

Rules of Interpretation.
         The rules of  interpretation  specified  in Section  1.03 of the Credit
Agreement shall be applicable to this Agreement.

         Jurisdiction;  Consent to Service of Process. (a) Each Guarantor hereby
irrevocably and  unconditionally  submits,  for itself and its property,  to the
non-exclusive  jurisdiction  of the United States District Court of the Southern
District of New York,  and of the Supreme Court of the State of New York sitting
in New York County 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 the transactions contemplated hereby or thereby, 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 court
or, to the extent  permitted by applicable  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 the Administrative  Agent or any Lender may otherwise have
to bring any action or proceeding  relating to this  Agreement or the other Loan
Documents  against  any  Guarantor  or  its  properties  in  the  courts  of any
jurisdiction.   Each  Guarantor  irrevocably  and  unconditionally   waives  any
objection  which it may now or hereafter have to the laying of venue of any such
suit,  action or  proceeding  described  in  subsection  (a) of this Section and
brought in any court referred to in subsection (a) of this Section.  Each of the
parties hereto irrevocably waives, to the fullest extent permitted by applicable
law, the defense of an  inconvenient  forum to the maintenance of such action or
proceeding in any such court. Each party to this Agreement  irrevocably consents
to the  service of process in the manner  provided  for  notices in Section  13.
Nothing in this  Agreement  will  affect the right of any party  hereto to serve
process in any other manner  permitted by law. SECTION 18. Waiver of Jury Trial.
EACH PARTY  HERETO  IRREVOCABLY  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 THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
OR THE TRANSACTIONS  CONTEMPLATED  HEREBY OR THEREBY (WHETHER BASED ON CONTRACT,
TORT  OR  ANY  OTHER   THEORY).   EACH  PARTY  HERETO  (i)  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 (ii)  ACKNOWLEDGES  THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS BY, AMONG OTHER THINGS,  THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

Additional Guarantors.
         Pursuant  to Section  5.11 of the Credit  Agreement,  each  Significant
Subsidiary (other than any Foreign Subsidiary and any Excluded  Subsidiary) that
was not in  existence  on the date of the Credit  Agreement is required to enter
into this  Agreement as a Guarantor.  Upon execution and delivery after the date
hereof by the  Administrative  Agent and such Subsidiary of an instrument in the
form of Annex 1, such  Subsidiary  shall become a Guarantor  hereunder  with the
same  force  and  effect  as if  originally  named as a  Guarantor  herein.  The
execution and delivery of any  instrument  adding an  additional  Guarantor as a
party to this  Agreement  shall not require  the consent of any other  Guarantor
hereunder.  The rights and obligations of each Guarantor  hereunder shall remain
in full force and effect  notwithstanding the addition of any new Guarantor as a
party to this Agreement.

Right of Setoff.
         If an Event of Default  shall have  occurred  and be  continuing,  each
Lender are hereby  authorized  at any time and from time to time, to the fullest
extent  permitted by law, to set off and apply any and all deposits  (general or
special,  time or  demand,  provisional  or  final)  at any time  held and other
Indebtedness  at any  time  owing by such  Lender  to or for the  credit  or the
account of any Guarantor  against any or all the  obligations  of such Guarantor
now or hereafter existing under this Agreement and the other Loan Documents held
by such Lender,  irrespective  of whether or not such Person shall have made any
demand  under  this  Agreement  or any other Loan  Document  and  although  such
obligations  may be  unmatured.  The rights of each Lender under this Section 20
are in addition to other rights and remedies  (including other rights of setoff)
that such Lender may have.

<PAGE>

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

                                                     EACH OF THE SUBSIDIARIES
                                                     LISTED ON SCHEDULE I HERETO

                                                     By
                                                        Name:
                                                        Title:

                                                     SUNTRUST BANK, as
                                                     Administrative Agent

                                                     By
                                                        Name:
                                                        Title:

<PAGE>
                                SCHEDULE I TO THE
                         SUBSIDIARY GUARANTEE AGREEMENT

Guarantor(s)                                                Address

<PAGE>
                                                                  ANNEX 1 TO THE
                                                  SUBSIDIARY GUARANTEE AGREEMENT

         SUPPLEMENT  NO.  [ ]  dated  as of [ ],  to  the  Subsidiary  Guarantee
Agreement,  dated  as of [ ] (the  "Guarantee  Agreement"),  among  each  of the
subsidiaries listed on Schedule I thereto (each such Subsidiary individually,  a
"Guarantor" and  collectively,  the  "Guarantors")  of KANEB PIPE LINE OPERATING
PARTNERSHIP, L.P., a Delaware limited partnership (the "Borrower"), and SUNTRUST
BANK,   a  Georgia   banking   corporation,   as   Administrative   Agent   (the
"Administrative  Agent") for the  Lenders  (as  defined in the Credit  Agreement
referred to below).

         B.  Reference  is made to the  Credit  Agreement,  dated  as of [ ] (as
amended,  supplemented  or  otherwise  modified  from time to time,  the "Credit
Agreement"),  among the  Borrower,  the lenders from time to time party  thereto
(the "Lenders") and SunTrust Bank, as  Administrative  Agent.  Capitalized terms
used herein and not otherwise defined herein shall have the meanings assigned to
such terms in the Guarantee  Agreement and the Credit Agreement.  The Guarantors
have entered into the Guarantee Agreement in order to induce the Lenders to make
Loans.  Pursuant  to Section  5.12 of the  Credit  Agreement,  each  Significant
Subsidiary (other than any Foreign Subsidiary and any Excluded  Subsidiary) that
was not in existence  or not a Guarantor on the date of the Credit  Agreement is
required to enter into the Guarantee Agreement as a Guarantor. Section 19 of the
Guarantee  Agreement  provides that additional  Subsidiaries of the Borrower may
become Guarantors under the Guarantee  Agreement by execution and delivery of an
instrument in the form of this  Supplement.  The  undersigned  Subsidiary of the
Borrower (the "New  Guarantor") is executing this  Supplement in accordance with
the  requirements  of the  Credit  Agreement  to  become a  Guarantor  under the
Guarantee  Agreement in order to induce the Lenders to make additional Loans and
as  consideration  for Loans previously made.  Accordingly,  the  Administrative
Agent and the New Guarantor agree as follows:

         In  accordance  with  Section 19 of the  Guarantee  Agreement,  the New
Guarantor  by its  signature  below  becomes a  Guarantor  under  the  Guarantee
Agreement  with the same force and effect as if  originally  named  therein as a
Guarantor  and the  New  Guarantor  hereby  (i)  agrees  to all  the  terms  and
provisions of the Guarantee Agreement  applicable to it as Guarantor  thereunder
and (ii) represents and warrants that the representations and warranties made by
it as a Guarantor  thereunder are true and correct on and as of the date hereof.
Each  reference to a Guarantor  in the  Guarantee  Agreement  shall be deemed to
include the New Guarantor. The Guarantee Agreement is hereby incorporated herein
by reference.  The New Guarantor  represents and warrants to the  Administrative
Agent and the Lenders that this  Supplement has been duly  authorized,  executed
and delivered by it and that each of this Supplement and the Guarantee Agreement
constitutes its legal, valid and binding  obligation,  enforceable against it in
accordance with its terms.  This Supplement may be executed in counterparts each
of which shall  constitute  an  original,  but all of which when taken  together
shall constitute a single contract.  This Supplement shall become effective when
the  Administrative  Agent shall have received  counterparts  of this Supplement
that,  when taken  together,  bear the  signatures  of the New Guarantor and the
Administrative  Agent. Delivery of an executed signature page to this Supplement
by facsimile transmission shall be as effective as delivery of a manually signed
counterpart of this Supplement.  Except as expressly  supplemented  hereby,  the
Guarantee Agreement shall remain in full force and effect. THIS SUPPLEMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE  WITH,  THE LAWS OF THE STATE OF NEW
YORK.  In case any one or more of the  provisions  contained in this  Supplement
should be held invalid,  illegal or unenforceable in any respect,  the validity,
legality and enforceability of the remaining  provisions contained herein and in
the Guarantee Agreement shall not in any way be affected or impaired thereby (it
being  understood  that the  invalidity  of a particular  provision  hereof in a
particular  jurisdiction  shall not in and of itself affect the validity of such
provision  in any other  jurisdiction).  The parties  hereto  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.  All
communications  and notices  hereunder shall be in writing and given as provided
in  Section  13 of the  Guarantee  Agreement.  All  communications  and  notices
hereunder  to the New  Guarantor  shall be given to it at the  address set forth
under its signature below, with a copy to the Borrower. The New Guarantor agrees
to  reimburse  the  Administrative  Agent  for  its  out-of-pocket  expenses  in
connection with this  Supplement,  including the fees,  disbursements  and other
charges of counsel for the Administrative Agent.

         IN WITNESS WHEREOF, the New Guarantor and the Administrative Agent have
duly executed this Supplement to the Guarantee  Agreement as of the day and year
first above written.

                                                     [Name of New Guarantor]

                                                     By
                                                        Name:
                                                        Title:
                                                        Address:

                                                     SUNTRUST BANK, as
                                                     Administrative Agent

                                                     By
                                                        Name:
                                                        Title:

<PAGE>
                                                                       EXHIBIT D

                                     FORM OF

                               NOTICE OF BORROWING

                                     [Date]

SunTrust Bank,
  as Administrative Agent
  for the Lenders referred to below
303 Peachtree Street, N.E.
Atlanta, GA  30308

Attention:

Ladies and Gentlemen:

         Reference  is made to the Credit  Agreement,  dated as of December  28,
2000 (as amended  and in effect on the date  hereof,  the  "Credit  Agreement"),
among the  undersigned,  as Borrower,  the Lenders named  therein,  and SunTrust
Bank, as  Administrative  Agent.  Terms defined in the Credit Agreement are used
herein with the same  meanings.  This notice  constitutes a Notice of Borrowing,
and the Borrower hereby requests a Borrowing under the Credit Agreement,  and in
that connection the Borrower specifies the following information with respect to
the Borrowing requested hereby:

(A)      Aggregate principal amount of Borrowing 1/ __________________

(B)      Date of Borrowing (which is a Business Day): __________________

(C)      Interest Rate basis 2/: __________________

(D)      Interest Period 3/: __________________

(E)      Location  and  number  of  Borrower's  account  to  which  proceeds  of
         Borrowing are to be disbursed: __________________

         The  Borrower  hereby  represents  and  warrants  that  the  conditions
specified in clauses (i), (ii) and (iii) of Section 3.2 of the Credit  Agreement
are satisfied.

                                     Very truly yours,

                                     KANEB PIPE LINE OPERATING PARTNERSHIP, L.P.

                                     By KANEB PIPE LINE COMPANY,
                                        General Partner

                                     By
                                     Name:
                                     Title:

1/       Not less than $5,000,000 and an integral multiple of $1,000,000.
2/       Eurodollar Borrowing or Base Rate Borrowing.
3/ Which must comply with the definition of "Interest  Period" and end not later
than the Termination Date.

<PAGE>
                                                                      EXHIBIT E

                         FORM OF CONTINUATION/CONVERSION

                                     [Date]

SunTrust Bank,
  as Administrative Agent
for the Lenders referred to below
303 Peachtree Street, N.E.
Atlanta, GA  30308

Attention:

Ladies and Gentlemen:

         Reference  is made to the Credit  Agreement,  dated as of December  28,
2000 (as amended  and in effect on the date  hereof,  the  "Credit  Agreement"),
among the  undersigned,  as Borrower,  the Lenders named  therein,  and SunTrust
Bank, as  Administrative  Agent.  Terms defined in the Credit Agreement are used
herein with the same meanings. This notice constitutes a Continuation/Conversion
and the Borrower  hereby  requests the conversion or continuation of a Borrowing
under the Credit  Agreement,  and in that connection the Borrower  specifies the
following information with respect to the Borrowing to be converted or continued
as requested hereby:

(A)      Borrowing to which this request applies: __________________

(B)      Principal amount of Borrowing to be converted/continued: ___________

(C)      Effective date of election (which is a Business Day): _____________

(D)      Interest rate basis: __________________

(E)      Interest Period: __________________

                                     Very truly yours,

                                     KANEB PIPE LINE OPERATING PARTNERSHIP, L.P.

                                     By KANEB PIPE LINE COMPANY,
                                        General Partner

                                     By
                                     Name:
                                     Title:

<PAGE>

[Closing Date]
Page 7

                                                                       EXHIBIT F

                 FORM OF OPINION OF COUNSEL FOR THE LOAN PARTIES

                                                     [Closing Date]

To each of the Lenders  party to the Credit  Agreement  referred to below and to
SunTrust Bank, as Administrative Agent thereunder

Ladies and Gentlemen:

         This opinion is furnished to you pursuant to Section  3.1(b)(vi) of the
Credit Agreement,  dated as of December 28, 2000 (such agreement,  excluding the
schedules and exhibits thereto, the "Credit  Agreement"),  among Kaneb Pipe Line
Operating Partnership,  L.P., (the "Borrower"),  Kaneb Pipe Line Partners,  L.P.
("KPP"),  the Lenders parties thereto and SunTrust Bank, as Administrative Agent
for said Lenders.  Unless otherwise defined herein,  terms defined in the Credit
Agreement  are used herein as therein  defined.  We have acted as counsel to the
Loan Parties (as defined below) in connection  with the  preparation,  execution
and delivery of the Credit Agreement.  In connection with this opinion,  we have
examined:

(1)      A  counterpart  of the Credit  Agreement,  executed by the Borrower and
         KPP;

(2)      the Notes, executed by the Borrower;

(3)      a  counterpart  of the  Subsidiary  Guarantee  Agreement,  executed  by
         Support  Terminal   Services,   Inc.,   Support   Terminals   Operating
         Partnership, L.P. and StanTrans, Inc. (collectively,  the "Guarantors",
         and, together with the Borrower and KPP, the "Loan Parties");

(4)      The other documents  furnished by the Loan Parties  pursuant to Section
         3.1 of the Credit Agreement;

(5)      The  Constituent  Documents  of each  Loan  Party  and  all  amendments
         thereto; and

(6)      A  certificate  of the  Secretary  of State of each State in which each
         Loan Party is formed,  organized or  incorporated,  as the case may be,
         attesting  to the  continued  existence  and good  standing of the Loan
         Parties in the applicable States.

         The Credit Agreement and the other agreements and instruments  referred
to in clauses  (1), (2) and (3) above are  hereinafter  referred to as the "Loan
Documents".  In  addition to the Loan  Documents,  we have  examined  such other
documents  and  corporate  and  partnership  records  (collectively,  the "Other
Documents")  and questions of law as we deem  necessary for the purposes of this
opinion. We have also examined such certificates of public officials,  corporate
officers of the Loan  Parties and other  Persons as we have deemed  relevant and
appropriate as a basis for the opinions  expressed  herein,  and we have made no
effort  to  independently  verify  the  facts  set  forth in such  certificates.
Further, in making the foregoing  examinations,  we have assumed the genuineness
of all signatures (other than signatures of the Loan Parties with respect to the
Loan  Documents),  the legal  capacity  of each person  signatory  to any of the
documents  reviewed by us, the authenticity of all documents  submitted to us as
originals and the  conformity to authentic  original  documents of all documents
submitted to us as copies. In making the foregoing examinations, we have assumed
that, as to factual  matters,  all  representations  and warranties  made in the
aforesaid  documents  (other  than  those  which  are  expressed  herein  as our
opinions) were and are true, correct and complete in all material respects.

         In rendering the opinions expressed herein, we have assumed that:

                  (a) each of the documents  examined by us (other than the Loan
         Documents) has been duly authorized,  executed and delivered by each of
         the  parties  thereto  and  constitutes  the legal,  valid and  binding
         obligation of each such party thereto  enforceable  in accordance  with
         its terms;

                  (b) the Loan Documents have been duly authorized, executed and
         delivered by or on behalf of each of the parties thereto other than the
         Loan Parties,  that each such party other than the Loan Parties has the
         requisite  power and  authority  to execute,  deliver and perform  such
         documents  to  which  it  is a  party,  and  that  the  Loan  Documents
         constitute the legal, valid and binding  obligations of each such other
         party thereto enforceable in accordance with its terms;

                  (c) no order, consent, approval,  license,  authorization,  or
         validation of, or filing,  recording or registration with, or exemption
         by, any  court,  governmental  body or  authority,  or any  subdivision
         thereof,  is required to authorize or is required in  connection  with,
         the  execution  and  delivery  by any  Person  identified  in any  Loan
         Document as a party thereto,  or in connection  with the performance of
         its  obligations  thereunder or the  consummation  of the  transactions
         contemplated thereby,  other than those that have been obtained or made
         and  are in  full  force  and  effect  (provided,  that we make no such
         assumption with respect to consents,  approvals and the like applicable
         to Loan  Parties to the extent that we express our opinion  rendered in
         paragraph 4 below);

                  (d)  the  Administrative  Agent  has  been  and  is  the  duly
         appointed  agent of each of the other  Lenders  pursuant  to the Credit
         Agreement; and

                  (e) there are no extrinsic  agreements or understandings among
         the  parties  to the Loan  Documents  that  would  modify or affect the
         interpretation  of the terms of the Loan  Documents  or the  respective
         rights or obligations of the parties thereunder.

         In rendering this opinion, we have made no independent investigation of
the facts  referred to herein and have relied for the purpose of rendering  this
opinion  exclusively  on the facts set forth in the Loan Documents and the Other
Documents  and the  certificates  referred to above,  which facts we assume have
been  and will  continue  to be  true,  accurate  and  correct  in all  material
respects.

         Based upon the foregoing,  and upon an examination of such questions of
law  as we  have  considered  necessary  or  appropriate,  and  subject  to  the
assumptions,  exceptions,  qualifications  and limitations set forth herein,  we
advise you that, in our opinion:

                  1. Each Loan  Party (a) has been duly  formed  and is  validly
         existing in good standing under the laws of its state of formation, (b)
         has the corporate or partnership power and authority to own and operate
         its property,  to lease the property which it operates as lessee and to
         conduct the business in which it is  currently  engaged and in which it
         proposes to be engaged after the date hereof, in each case as described
         in the periodic reports filed by KPP under the Securities  Exchange Act
         of 1934, as amended (the "Exchange  Act"), and (c) is duly qualified as
         a  foreign  entity  and is in  good  standing  under  the  laws of each
         jurisdiction listed on Schedule I hereto.

                  2. Each Loan Party has the corporate or partnership  power and
         authority to execute and deliver, and to perform its obligations under,
         each Loan  Document  to which  such Loan  Party is a party.  The Credit
         Agreement has been duly executed and delivered by KPP and the Borrower,
         the Notes have been duly executed and  delivered by the  Borrower,  and
         the Subsidiary Guarantee Agreement has been duly executed and delivered
         by each Guarantor.

                  3.  Assuming the proceeds of the Loans are used solely for the
         purposes set forth in the Credit  Agreement,  neither the execution and
         delivery of a Loan Document by a Loan Party,  nor performance by a Loan
         Party of its  obligations  under a Loan Document,  will (a) result in a
         breach of, or constitute a default under, any agreement to which any of
         the Loan  Parties  is a party  or by which  any of them or any of their
         respective  properties  is bound that has been filed under the Exchange
         Act by KPP as an exhibit to its annual report on Form 10-K for the year
         ended December 31, 1999, or as an exhibit to a quarterly report on Form
         10-Q filed  during  the year 2000 or (b)  violate  (i) the  Constituent
         Documents of any Loan Party,  (ii) any  statutory  law or regulation or
         (iii)  any  decree  or  order  of any  court,  governmental  agency  or
         arbitrator  that is  known  by us to be  applicable  to any of the Loan
         Parties or any of their respective properties.

                  4. No consent, approval, authorization or waiver of, or notice
         to or filing with,  or other action by, any  governmental  authority is
         required by any statutory  law,  regulation or ruling as a condition to
         the execution  and delivery by the Loan Parties of the Loan  Documents,
         or the performance by the Loan Parties of their  obligations  under the
         Loan Documents.

                  5. To our knowledge,  other than as disclosed in KPP's filings
         under the Exchange Act, there are no legal or governmental  proceedings
         pending  to which  any of the  Loan  Parties  is a party or  threatened
         against any of the Loan  Parties  which is required to be  disclosed in
         such filings.

                  6. None of the Loan  Parties is an  "investment  company" or a
         company  "controlled"  by an  "investment  company"  as such  terms are
         defined in the Investment Company Act of 1940, as amended, or a "public
         utility company" or a "holding company," or a "subsidiary company" of a
         "holding  company," or an  "affiliate"  of a "holding  company" or of a
         "subsidiary  company" of a "holding company," as such terms are defined
         in the Public Utility Holding Company Act of 1935, as amended.  None of
         the Loan  Parties  is subject to  regulation  under the Public  Utility
         Holding Company Act of 1935, as amended.

                  7. Under the laws of the State of New York, each Loan Document
         constitutes the legal,  valid and binding obligation of each Loan Party
         that is a party  thereto,  enforceable  against each such Loan Party in
         accordance with its terms.

                  8.  The  foregoing  opinions  are  subject  to  the  following
         assumptions, exceptions, qualifications and limitations.

         (i) The foregoing  opinions are expressly  limited to matters under and
governed by the internal  substantive  laws of the States of New York and Texas,
the  General  Corporation  Law of the State of  Delaware,  the  Revised  Uniform
Limited Partnership Act of the State of Delaware, and applicable Federal laws of
the  United  States of  America,  in each case in effect on the date  hereof and
which, in our experience,  are normally applicable to the transactions  provided
for in the Loan  Documents,  in each case,  however,  exclusive  of, and without
regard to, any Excluded Laws. The term "Excluded  Laws" means all (i) municipal,
political  subdivision (whether created or enabled through legislative action at
the  federal,  state,  regional or local  level),  local and county  ordinances,
statutes,  administrative decisions, laws, rules and regulations,  (ii) conflict
of law  principles and  choice-of-law  statutes and rules,  and (iii)  statutes,
laws,  rules and  regulations  relating to (a)  pollution or  protection  of the
environment,  (b) zoning,  land use, building or construction,  (c) operation of
any asset or property, (d) labor,  employment,  employee rights and benefits, or
occupational  safety and health, (e) utility regulation or regulation of matters
pertaining to the acquisition,  transportation,  transmission, storage or use of
energy sources used in connection therewith or generated thereby, (f) antitrust,
(g) taxation and (h)  securities  laws, in each case with respect to each of the
foregoing,  (x) as interpreted,  construed or enforced pursuant to any judicial,
arbitral or other  decision or  pronouncement,  (y) as enacted,  promulgated  or
issued by, or  otherwise  existing  in effect in, any  jurisdiction,  including,
without  limitation,  any State of the United  States of America  and the United
States  of  America,  and  (z)  including,   without  limitation,  any  and  all
authorizations,  permits, consents, applications,  licenses, approvals, filings,
registrations, publications, exemptions and t he like required by any of them.

         (ii) The foregoing  opinions  regarding the  enforceability of the Loan
Documents are subject to the following:

                  (A) The enforceability of the Loan Documents may be limited or
         affected by (a)  bankruptcy,  insolvency,  reorganization,  moratorium,
         liquidation,   rearrangement,   probate,  conservatorship,   fraudulent
         transfer, fraudulent conveyance and other similar laws (including court
         decisions)  now or  hereafter  in effect and  affecting  the rights and
         remedies of creditors  generally or providing for the relief of debtors
         generally, (b) the refusal of a particular court to grant (i) equitable
         remedies,  including, without limiting the generality of the foregoing,
         specific performance and injunctive relief, or (ii) a particular remedy
         sought under any Loan  Document as opposed to another  remedy  provided
         for  therein  or another  remedy  available  at law or in  equity,  (c)
         general principles of equity, including without limitation requirements
         of good  faith,  fair  dealing  and  reasonableness,  and the  possible
         unavailability of specific performance or injunctive relief (regardless
         of whether such  remedies  are sought in a  proceeding  in equity or at
         law), and (d) judicial discretion.

                  (B) In rendering the foregoing opinions, we express no opinion
         as to (1)(a)  provisions in the Loan Documents that purport to restrict
         access to legal or equitable  remedies,  that purport to affect service
         of  process,   that  purport  to  permit  any  party  to  increase  the
         obligations  of any person or entity without the consent of such person
         or entity, that purport to require any party to waive any notice which,
         as a matter of law or  equity,  may not be waived,  or that  purport to
         reinstate any  obligation  after payment or otherwise,  that purport to
         establish   property   classifications,   presumptions  or  evidentiary
         standards or to waive either illegality as a defense to the performance
         of contract  obligations or any other defense for such performance that
         cannot,  as a matter  of law or  equity,  be  effectively  waived,  (b)
         provisions  in the Loan  Documents  relating  to future  subordination,
         receivership,  delay or omission of enforcement of rights and remedies,
         covenants  not to sue or assert valid  claims,  marshalling  of assets,
         waiver of rights of redemption,  and severability  clauses or rights of
         third  parties,  (c)  provisions  of the Loan  Documents  purporting to
         waive,  eliminate,  prejudice  or restrict  claims for damages or other
         remedies for trespass,  conversion,  negligence, failure to comply with
         requirements concerning notices, disposition of collateral or otherwise
         waiving,  affecting or altering  rights or defenses of any party which,
         in each case, as a matter of law or equity, may not be waived, affected
         or altered or the  Lenders'  obligations  under  applicable  law or (d)
         other provisions having substantially similar effect, (2) the legality,
         validity,  enforceability  or binding  effect of provisions of the Loan
         Documents  relating to indemnities  and rights of  contribution  to the
         extent   prohibited   by   public   policy  or  which   might   require
         indemnification  for losses or  expenses  caused by  negligence,  gross
         negligence,  willful misconduct,  fraud or illegality of an indemnified
         party,  (3) the effect of any provision of the Loan Documents  which is
         intended to permit  modification  thereof only by means of an agreement
         signed in  writing  by the  parties  thereto,  or (4) the effect of any
         provision of the Loan Documents  insofar as it provides that any person
         purchasing a  participation  from a Lender or other Person may exercise
         set-off or similar  rights with respect to such  participation  or that
         any Lender or other Person may exercise set-off or similar rights other
         than in accordance with applicable law.

                  (C) We note that the enforceability of specific  provisions of
         the Loan Documents may be subject to standards of reasonableness,  care
         and  diligence and "good faith"  limitations  and  obligations  such as
         those  provided in  Sections  1-102(3),  1-203,  1-208 and 5-109 of the
         Uniform  Commercial  Code as  currently  in  effect in the State of New
         York,  and the related  provisions  of the Uniform  Commercial  Code as
         currently in effect in the State of Texas, and applicable principles of
         common law and judicial decisions.

                  (D) We have  assumed  that the Lenders  will enforce each Loan
         Document in compliance with the provisions thereof and all requirements
         of applicable law.

                  (E) In connection  with the  provisions of the Loan  Documents
         whereby the Credit  Parties  submit to the  jurisdiction  of the United
         States  District  Court for the Southern  District of New York, we note
         the  limitations  of 28 U.S.C.  ss.ss.  1331 and 1332 on Federal  court
         jurisdiction,  and we also note that such submissions  cannot supersede
         such court's  discretion in  determining  whether to transfer an action
         from one Federal court to another under 28 U.S.C. ss. 1404(a). (iii) In
         rendering  the  opinion   expressed  in  paragraph  1  above  regarding
         existence and good standing,  we have relied solely on  certificates of
         public  officials  of a recent  date,  and have  conducted  no  further
         investigation.  Our opinion  expressed  in  paragraph 6 with respect to
         each  Loan  Party  is based  solely  upon  our  understanding  of their
         respective businesses as described in the periodic reports filed by KPP
         under the Exchange Act.

         (iv) We do not express any opinion  with  respect to any exhibit to, or
other agreement referred to in, any of the Loan Documents.

         (v) In rendering the foregoing  opinions,  we have not, pursuant to our
engagement,  endeavored to express any opinions, and we express no opinions, and
none are intended to be implied hereby nor shall be inferred herefrom, as to (a)
the various  state and federal  laws,  statutes,  regulations,  interpretations,
opinions, directives, orders, rulings, authorities or similar matters regulating
or governing the Administrative Agent or any Lender (collectively,  the "Rules")
and/or  their  entry  into,  execution,  delivery  or  performance  of the  Loan
Documents,  or the  transactions  provided  for  therein,  or the conduct of its
business  related  thereto,  or (b) the  Administrative  Agent's or any Lender's
compliance  with any of the Rules in connection  with any Loan Document,  or the
transactions provided for therein.

         (vi) As used herein,  the phrase "to our knowledge" or words of similar
import means conscious awareness of facts or other information by the lawyers in
our firm who,  based on our records as of 3:00 p.m. on December 27,  2000,  have
devoted  substantive  attention  to legal  matters on behalf of the Loan Parties
since January 1, 2000.

         The  opinions  expressed  herein  are  furnished  to you for your  sole
benefit  in  connection  with  the  transactions   contemplated  by  the  Credit
Agreement.  The opinions  expressed herein may not be relied upon by you for any
other  purpose and may not be relied  upon for any  purpose by any other  person
without  our prior  written  consent,  except  that any Person that may become a
Lender after the date hereof may rely upon this opinion in connection with those
transactions.  The opinions  expressed herein are as of the date hereof (and not
as of any other date) or, to the extent a reference  to a  certificate  or other
document is made herein,  to such date,  and we make no  undertaking to amend or
supplement  such  opinions as facts and  circumstances  come to our attention or
changes in the law occur which could affect such opinions.

                                                     Very truly yours,

<PAGE>

                                   SCHEDULE I

             JURISDICTIONS IN WHICH LOAN PARTIES ARE COMMON CARRIERS

KANEB PIPE LINE COMPANY

Delaware*
Colorado
Iowa
Kansas
Nebraska
North Dakota
South Dakota
Wyoming

KANEB PIPE LINE PARTNERS, L.P.

Delaware*

KANEB PIPE LINE OPERATING PARTNERSHIP, L.P.

Delaware*
Colorado
Iowa
Kansas
Nebraska
North Dakota ** Still pending - should have  certificate  prior to funding South
Dakota Wyoming

* State of incorporation or formation.

SUPPORT TERMINAL SERVICES, INC.

Delaware*
Alabama
Arizona
California
Washington D.C.
Florida
Georgia
Illinois
Indiana
Kansas
Louisiana
Maryland
Minnesota
New Mexico
Oklahoma
Texas
Virginia
Washington
Wisconsin

SUPPORT TERMINALS OPERATING PARTNERSHIP, L.P.

Delaware*
Alabama
California
Washington D.C.
Florida
Georgia
Illinois
Indiana
Kansas
Louisiana
Maryland
Minnesota
New Mexico
Oklahoma
Pennsylvania
Texas
Virginia
Washington
Wisconsin

STANTRANS, INC.

Delaware*
Texas

* State of incorporation or formation.

<PAGE>

To each of the Lenders  party to the Credit  Agreement  referred to below and to
SunTrust Bank, as Administrative Agent thereunder

Ladies and Gentlemen:

         This opinion is furnished to you pursuant to Section  3.1(b)(vi) of the
Credit Agreement,  dated as of December 28, 2000 (such agreement,  excluding the
schedules and exhibits thereto, the "Credit  Agreement"),  among Kaneb Pipe Line
Operating Partnership, L.P., Kaneb Pipe Line Partners, L.P., the Lenders parties
thereto and SunTrust  Bank, as  Administrative  Agent for said  Lenders.  Unless
otherwise defined herein,  terms defined in the Credit Agreement are used herein
as therein defined.

         We have acted as  counsel to the Loan  Parties  (as  defined  below) in
connection with the preparation, execution and delivery of the Credit Agreement.

         In connection with this opinion,  we have examined a certificate of the
Secretary of State of North Dakota attesting to the continued existence and good
standing of Kaneb Pipe Line  Operating  Partnership,  L.P.  ("KPLOP"),  the Loan
Documents  and such  other  documents  and  corporate  and  partnership  records
(collectively,  the "Other Documents") and questions of law as we deem necessary
for the  purposes of this  opinion.  We have also  examined  such  certificates,
corporate  officers  of the Loan  Parties  and other  Persons as we have  deemed
relevant and appropriate as a basis for the opinions  expressed  herein,  and we
have  made no  effort  to  independently  verify  the  facts  set  forth in such
certificates. Further, in making the foregoing examinations, we have assumed the
genuineness  of all signatures  (other than  signatures of the Loan Parties with
respect to the Loan  Documents),  the legal capacity of each person signatory to
any of the documents reviewed by us, the authenticity of all documents submitted
to us as originals  and the  conformity to authentic  original  documents of all
documents  submitted to us as copies. In making the foregoing  examinations,  we
have assumed that, as to factual  matters,  all  representations  and warranties
made in the aforesaid  documents (other than those which are expressed herein as
our opinions) were and are true, correct and complete in all material respects.

         Based upon the foregoing,  and upon an examination of such questions of
law  as we  have  considered  necessary  or  appropriate,  and  subject  to  the
assumptions,  exceptions,  qualifications  and limitations set forth herein,  we
advise you that, in our opinion,  KPLOP is duly  qualified as a foreign  limited
partnership and is in good standing under the laws of the State of North Dakota.

         The  foregoing  opinions  are  subject  to the  following  assumptions,
exceptions, qualifications and limitations.

         (i) The foregoing  opinions are expressly  limited to matters under and
governed by the internal  substantive  laws of the States of New York and Texas,
the  General  Corporation  Law of the State of  Delaware,  the  Revised  Uniform
Limited Partnership Act of the State of Delaware, and applicable Federal laws of
the United States of America, in each case in effect on the date hereof.

         (ii) In  rendering  the  opinion  expressed  above  regarding  the good
standing of KPLOP,  we have relied solely on a  certificate  of the Secretary of
State of the State of North Dakota and have conducted no further investigation.

         The  opinions  expressed  herein  are  furnished  to you for your  sole
benefit  in  connection  with  the  transactions   contemplated  by  the  Credit
Agreement.  The opinions  expressed herein may not be relied upon by you for any
other  purpose and may not be relied  upon for any  purpose by any other  person
without  our prior  written  consent,  except  that any Person that may become a
Lender after the date hereof may rely upon this opinion in connection with those
transactions.  The opinions  expressed herein are as of the date hereof (and not
as of any other date) or, to the extent a reference  to a  certificate  or other
document is made herein,  to such date,  and we make no  undertaking to amend or
supplement  such  opinions as facts and  circumstances  come to our attention or
changes in the law occur which could affect such opinions.

                                                     Very truly yours,Exhibit 4.1

                            GREYHOUND FUNDING LLC,
                                   as Issuer

                                      and

                           THE CHASE MANHATTAN BANK,
                             as Indenture Trustee

                        ______________________________

                                BASE INDENTURE

                           Dated as of June 30, 1999

                        ______________________________

                              Asset Backed Notes
                           (Each Issuable in Series)

<PAGE>

                               TABLE OF CONTENTS

                                                                          Page

ARTICLE 1.  DEFINITIONS AND INCORPORATION BY REFERENCE  . . . . . . . . . .  1
         Section 1.1.     Definitions . . . . . . . . . . . . . . . . . . .  1
         Section 1.2.     Cross-References  . . . . . . . . . . . . . . . .  1
         Section 1.3.     Accounting and Financial Determinations; No
                          Duplication . . . . . . . . . . . . . . . . . . .  1
         Section 1.4.     Rules of Construction . . . . . . . . . . . . . .  2

ARTICLE 2.  THE INVESTOR NOTES  . . . . . . . . . . . . . . . . . . . . . .  2
         Section 2.1.     Designation and Terms of Investor Notes . . . . .  2
         Section 2.2.     Investor Notes Issuable in Series . . . . . . . .  3
         Section 2.3.     Execution and Authentication  . . . . . . . . . .  5
         Section 2.4.     Registration of Transfer and Exchange of Notes  .  6
         Section 2.5.     Mutilated, Destroyed, Lost or Stolen Notes  . . .  9
         Section 2.6.     Appointment of Paying Agent . . . . . . . . . . .  9
         Section 2.7.     Persons Deemed Owners . . . . . . . . . . . . . . 11
         Section 2.8.     Investor Noteholder List  . . . . . . . . . . . . 11
         Section 2.9.     Treasury Notes  . . . . . . . . . . . . . . . . . 12
         Section 2.10.    Book-Entry Notes  . . . . . . . . . . . . . . . . 12
         Section 2.11.    Definitive Notes  . . . . . . . . . . . . . . . . 13
         Section 2.12.    Global Note . . . . . . . . . . . . . . . . . . . 14
         Section 2.13.    Principal and Interest  . . . . . . . . . . . . . 14
         Section 2.14.    Tax Treatment . . . . . . . . . . . . . . . . . . 15

ARTICLE 3.  SECURITY  . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
         Section 3.1.     Grant of Security Interest  . . . . . . . . . . . 15
         Section 3.2.     Transaction Documents . . . . . . . . . . . . . . 17
         Section 3.3.     Release of Issuer Assets  . . . . . . . . . . . . 18
         Section 3.4.     Opinions of Counsel . . . . . . . . . . . . . . . 18
         Section 3.5.     Stamp, Other Similar Taxes and Filing Fees  . . . 18

ARTICLE 4.  REPORTS   . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
         Section 4.1.     Servicer Reports  . . . . . . . . . . . . . . . . 19
         Section 4.2.     Communication to Investor Noteholders . . . . . . 20
         Section 4.3.     Rule 144A Information . . . . . . . . . . . . . . 20
         Section 4.4.     Reports by the Issuer . . . . . . . . . . . . . . 20
         Section 4.5.     Reports by the Indenture Trustee  . . . . . . . . 21

ARTICLE 5.  ALLOCATION AND APPLICATION OF COLLECTIONS . . . . . . . . . . . 21
         Section 5.1.     Collection Account  . . . . . . . . . . . . . . . 21
         Section 5.2.     Gain on Sale Account  . . . . . . . . . . . . . . 22
         Section 5.3.     Collection of Money . . . . . . . . . . . . . . . 23
         Section 5.4.     Collections and Allocations . . . . . . . . . . . 24

                                      -i-

<PAGE>

ARTICLE 6.  DISTRIBUTIONS   . . . . . . . . . . . . . . . . . . . . . . . . 25
         Section 6.1.     Distributions in General  . . . . . . . . . . . . 25
         Section 6.2.     Optional Repurchase of Investor Notes . . . . . . 25

ARTICLE 7.  REPRESENTATIONS AND WARRANTIES  . . . . . . . . . . . . . . . . 26
         Section 7.1.     Existence and Power . . . . . . . . . . . . . . . 26
         Section 7.2.     Governmental Authorization  . . . . . . . . . . . 26
         Section 7.3.     Binding Effect  . . . . . . . . . . . . . . . . . 26
         Section 7.4.     Financial Information; Financial Condition  . . . 27
         Section 7.5.     Litigation  . . . . . . . . . . . . . . . . . . . 27
         Section 7.6.     No ERISA Plan . . . . . . . . . . . . . . . . . . 27
         Section 7.7.     Tax Filings and Expenses  . . . . . . . . . . . . 27
         Section 7.8.     Disclosure  . . . . . . . . . . . . . . . . . . . 27
         Section 7.9.     Investment Company Act  . . . . . . . . . . . . . 28
         Section 7.10.    Regulations T, U and X  . . . . . . . . . . . . . 28
         Section 7.11.    No Consent  . . . . . . . . . . . . . . . . . . . 28
         Section 7.12.    Solvency  . . . . . . . . . . . . . . . . . . . . 28
         Section 7.13.    Security Interests  . . . . . . . . . . . . . . . 28
         Section 7.14.    Binding Effect of Certain Agreements  . . . . . . 29
         Section 7.15.    Non-Existence of Other Agreements . . . . . . . . 29
         Section 7.16.    Compliance with Contractual Obligations and Laws  30
         Section 7.17.    Other Representations . . . . . . . . . . . . . . 30

ARTICLE 8.  COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
         Section 8.1.     Payment of Investor Notes . . . . . . . . . . . . 30
         Section 8.2.     Maintenance of Office or Agency . . . . . . . . . 30
         Section 8.3.     Payment of Obligations  . . . . . . . . . . . . . 31
         Section 8.4.     Conduct of Business and Maintenance of Existence  31
         Section 8.5.     Compliance with Laws  . . . . . . . . . . . . . . 31
         Section 8.6.     Inspection of Property, Books and Records . . . . 31
         Section 8.7.     Compliance with Transaction Documents;
                           Issuer Assets  . . . . . . . . . . . . . . . . . 31
         Section 8.8.     Notice of Defaults  . . . . . . . . . . . . . . . 32
         Section 8.9.     Notice of Material Proceedings  . . . . . . . . . 33
         Section 8.10.    Further Requests  . . . . . . . . . . . . . . . . 33
         Section 8.11.    Protection of Issuer Assets . . . . . . . . . . . 33
         Section 8.12.    Annual Opinion of Counsel . . . . . . . . . . . . 33
         Section 8.13.    Liens . . . . . . . . . . . . . . . . . . . . . . 34
         Section 8.14.    Other Indebtedness  . . . . . . . . . . . . . . . 34
         Section 8.15.    Mergers . . . . . . . . . . . . . . . . . . . . . 34
         Section 8.16.    Sales of Issuer Assets  . . . . . . . . . . . . . 34
         Section 8.17.    Acquisition of Assets . . . . . . . . . . . . . . 34
         Section 8.18.    Distributions.  . . . . . . . . . . . . . . . . . 34
         Section 8.19.    Name; Principal Office  . . . . . . . . . . . . . 35
         Section 8.20.    Organizational Documents  . . . . . . . . . . . . 35
         Section 8.21.    Investments . . . . . . . . . . . . . . . . . . . 35
         Section 8.22.    No Other Agreements . . . . . . . . . . . . . . . 35
         Section 8.23.    Other Business  . . . . . . . . . . . . . . . . . 35

                                     -ii-

<PAGE>

         Section 8.24.    Maintenance of Separate Existence . . . . . . . . 36
         Section 8.25.    Use of Proceeds of Investor Notes . . . . . . . . 38
         Section 8.26.    No ERISA Plan . . . . . . . . . . . . . . . . . . 38

ARTICLE 9.  REMEDIES  . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
         Section 9.1.     Events of Default . . . . . . . . . . . . . . . . 38
         Section 9.2.     Acceleration of Maturity; Rescission and
                           Annulment  . . . . . . . . . . . . . . . . . . . 39
         Section 9.3.     Collection of Indebtedness and Suits for
                            Enforcement by the Indenture Trustee  . . . . . 40
         Section 9.4.     Remedies; Priorities  . . . . . . . . . . . . . . 42
         Section 9.5.     Optional Preservation of the Issuer Assets  . . . 43
         Section 9.6.     Performance and Enforcement of Certain
                           Obligations  . . . . . . . . . . . . . . . . . . 43
         Section 9.7.     Limitation on Suits . . . . . . . . . . . . . . . 44
         Section 9.8.     Unconditional Rights of Investor Noteholders to
                           Receive Principal and Interest . . . . . . . . . 45
         Section 9.9.     Restoration of Rights and Remedies  . . . . . . . 45
         Section 9.10.    Rights and Remedies Cumulative  . . . . . . . . . 45
         Section 9.11.    Delay or Omission Not a Waiver  . . . . . . . . . 45
         Section 9.12.    Control by Investor Noteholders . . . . . . . . . 46
         Section 9.13.    Waiver of Past Defaults . . . . . . . . . . . . . 46
         Section 9.14.    Undertaking for Costs . . . . . . . . . . . . . . 47
         Section 9.15.    Waiver of Stay or Extension Laws  . . . . . . . . 47
         Section 9.16.    Action on Investor Notes  . . . . . . . . . . . . 47

ARTICLE 10.  THE INDENTURE TRUSTEE  . . . . . . . . . . . . . . . . . . . . 48
         Section 10.1.  Duties of the Indenture Trustee . . . . . . . . . . 48
         Section 10.2.  Rights of the Indenture Trustee . . . . . . . . . . 49
         Section 10.3.  Indenture Trustee's Disclaimer  . . . . . . . . . . 51
         Section 10.4.  Indenture Trustee May Own Investor Notes  . . . . . 51
         Section 10.5.  Notice of Defaults  . . . . . . . . . . . . . . . . 51
         Section 10.6.  Compensation  . . . . . . . . . . . . . . . . . . . 51
         Section 10.7.  Eligibility Requirements for Indenture Trustee  . . 52
         Section 10.8.  Resignation or Removal of Indenture Trustee . . . . 53
         Section 10.9.  Successor Indenture Trustee by Merger . . . . . . . 54
         Section 10.10. Appointment of Co-Indenture Trustee or Separate
                         Indenture Trustee  . . . . . . . . . . . . . . . . 54
         Section 10.11. Representations and Warranties of Indenture
                         Trustee  . . . . . . . . . . . . . . . . . . . . . 56
         Section 10.12. Preferential Collection of Claims Against the
                         Issuer   . . . . . . . . . . . . . . . . . . . . . 56

ARTICLE 11.  DISCHARGE OF INDENTURE . . . . . . . . . . . . . . . . . . . . 56
         Section 11.1.  Termination of the Issuer's Obligations . . . . . . 56
         Section 11.2.  Application of Trust Money  . . . . . . . . . . . . 58
         Section 11.3.  Repayment to the Issuer . . . . . . . . . . . . . . 58

ARTICLE 12.  AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . 58
         Section 12.1.  Without Consent of the Investor Noteholders . . . . 58
         Section 12.2.  With Consent of the Investor Noteholders  . . . . . 59

                                     -iii-

<PAGE>

         Section 12.3.  Indenture Supplements . . . . . . . . . . . . . . . 60
         Section 12.4.  Revocation and Effect of Consents . . . . . . . . . 60
         Section 12.5.  Notation on or Exchange of Investor Notes . . . . . 61
         Section 12.6.  The Indenture Trustee to Sign Amendments, etc.  . . 61
         Section 12.7.  Conformity with Trust Indenture Act . . . . . . . . 61

ARTICLE 13.  MISCELLANEOUS  . . . . . . . . . . . . . . . . . . . . . . . . 61
         Section 13.1.  Compliance Certificates and Opinions  . . . . . . . 61
         Section 13.2.  Forms of Documents Delivered to Indenture Trustee . 63
         Section 13.3.  Actions of Noteholders  . . . . . . . . . . . . . . 64
         Section 13.4.  Notices . . . . . . . . . . . . . . . . . . . . . . 64
         Section 13.5.  Conflict with TIA . . . . . . . . . . . . . . . . . 66
         Section 13.6.  Rules by the Indenture Trustee  . . . . . . . . . . 66
         Section 13.7.  Duplicate Originals . . . . . . . . . . . . . . . . 67
         Section 13.8.  Benefits of Indenture . . . . . . . . . . . . . . . 67
         Section 13.9.  Payment on Business Day . . . . . . . . . . . . . . 67
         Section 13.10. Governing Law   . . . . . . . . . . . . . . . . . . 67
         Section 13.11. Severability of Provisions  . . . . . . . . . . . . 67
         Section 13.12. Counterparts  . . . . . . . . . . . . . . . . . . . 67
         Section 13.13. Successors  . . . . . . . . . . . . . . . . . . . . 68
         Section 13.14. Table of Contents, Headings, etc.   . . . . . . . . 68
         Section 13.15. Recording of Indenture  . . . . . . . . . . . . . . 68
         Section 13.16. No Petition . . . . . . . . . . . . . . . . . . . . 68
         Section 13.17. SUBIs . . . . . . . . . . . . . . . . . . . . . . . 68

                                     -iv-

<PAGE>

                 BASE INDENTURE, dated as of June 30, 1999, between GREYHOUND
FUNDING LLC, a special purpose limited liability company established under
the laws of Delaware, as issuer (the "Issuer"), and THE CHASE MANHATTAN BANK,
a New York banking corporation, as trustee (in such capacity, the "Indenture
Trustee").

                             W I T N E S S E T H:

                 WHEREAS, the Issuer has duly authorized the execution and
delivery of this Indenture to provide for the issuance from time to time of
one or more series of Notes from time to time, issuable as provided in this
Indenture;

                 WHEREAS, all things necessary to make this Indenture a
legal, valid and binding agreement of the Issuer, in accordance with its
terms, have been done, and the Issuer proposes to do all the things necessary
to make the Investor Notes, when executed by the Issuer and authenticated and
delivered by the Indenture Trustee hereunder and duly issued by the Issuer,
the legal, valid and binding obligations of the Issuer as hereinafter
provided;

                 NOW, THEREFORE, for and in consideration of the premises and
the receipt of the Investor Notes by the Investor Noteholders, it is mutually
covenanted and agreed, for the equal and proportionate benefit of all
Investor Noteholders as follows:

                                  ARTICLE I.

                  DEFINITIONS AND INCORPORATION BY REFERENCE

                 Section A.  Definitions.

                 Certain capitalized terms used herein (including the
preamble and the recitals hereto) shall have the meanings assigned to such
terms in the Definitions List attached hereto as Schedule 1 (the "Definitions
List"), as such Definitions List may be amended or modified from time to time
in accordance with the provisions hereof.

                 Section B.  Cross-References.

                 Unless otherwise specified, references in this Indenture and
in each other Transaction Document to any Article or Section are references
to such Article or Section of this Indenture or such other Transaction
Document, as the case may be and, unless otherwise specified, references in
any Article, Section or definition to any clause are references to such
clause of such Article, Section or definition.

                                      -1-

<PAGE>

                 Section C.  Accounting and Financial Determinations; No
Duplication.

                 Where the character or amount of any asset or liability or
item of income or expense is required to be determined, or any accounting
computation is required to be made, for the purpose of this Indenture, such
determination or calculation shall be made, to the extent applicable and
except as otherwise specified in this Indenture, in accordance with GAAP.
When used herein, the term "financial statement" shall include the notes and
schedules thereto.  All accounting determinations and computations hereunder
or under any other Transaction Documents shall be made without duplication.

                 Section D.  Rules of Construction.

                 In this Indenture, unless the context otherwise requires:

                                a.   the singular includes the plural and
         vice versa;

                                b.   reference to any Person includes such
         Person's successors and assigns but, if applicable, only if such
         successors and assigns are permitted by this Indenture, and reference
         to any Person in a particular capacity only refers to such Person in
         such capacity;

                                c.   reference to any gender includes the
         other gender;

                                d.   reference to any Requirement of Law
         means such Requirement of Law as amended, modified, codified or
         reenacted, in whole or in part, and in effect from time to time;

                                e.   "including" (and with correlative
         meaning "include") means including without limiting the generality of
         any description preceding such term; and

                                f.   with respect to the determination of any
         period of time, "from" means "from and including" and "to" means "to
         but excluding".

                                  ARTICLE I.

                              THE INVESTOR NOTES

A.Designation and Terms of Investor Notes.

                                      -2-

<PAGE>

                 Each Series of Investor Notes and any Class thereof may be
issued in bearer form (the "Bearer Notes") with attached interest coupons and
a special coupon (collectively, the "Coupons") or in fully registered form
(the "Registered Notes"), and, in each case, substantially in the form
specified in the applicable Indenture Supplement, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted hereby or by the related Indenture Supplement  and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined to
be appropriate by the Authorized Officers executing such Investor Notes, as
evidenced by their execution of the Investor Notes. All Investor Notes of any
Series shall, except as specified in the related Indenture Supplement, be
equally and ratably entitled as provided herein to the benefits hereof
without preference, priority or distinction on account of the actual time or
times of authentication and delivery, all in accordance with the terms and
provisions of this Indenture and the applicable Indenture Supplement.  The
aggregate principal amount of Investor Notes which may be authenticated and
delivered under this Indenture is unlimited.  The Investor Notes shall be
issued in the denominations set forth in the related Indenture Supplement.

B.Investor Notes Issuable in Series.

                 1.  The Investor Notes may be issued in one or more Series.
Each Series of Investor Notes shall be created by an Indenture Supplement.

                 2.       Investor Notes of a new Series may from time to time
be executed by the Issuer and delivered to the Indenture Trustee for
authentication and thereupon the same shall be authenticated and delivered by
the Indenture Trustee upon the receipt of an Issuer Request at least three
(3) Business Days (or such shorter time as is acceptable to the Indenture
Trustee) in advance of the related Series Closing Date and upon delivery by
the Issuer to the Indenture Trustee, and receipt by the Indenture Trustee, of
the following:

                 (i)  an Issuer Order authorizing and directing the
         authentication and delivery of the Investor Notes of such new Series
         by the Indenture Trustee and specifying the designation of such new
         Series, the Initial Invested Amount (or the method for calculating
         such Initial Invested Amount) and the Note Rate (or the method for
         allocating interest payments or other cash flows to such Series), if
         any, with respect to such Series;

                 (ii) an Indenture Supplement satisfying the criteria set
         forth in Section 2.2(c) executed by the Issuer and specifying the
         Principal Terms of such Series;

                 (iii) a Tax Opinion;

                                      -3-

<PAGE>

                 (iv) written confirmation from each Rating Agency that the
         Rating Agency Condition shall have been satisfied with respect to
         such issuance;

                 (v) an Officer's Certificate of the Issuer, that on the
         Series Closing Date after giving effect to the issuance of such new
         Series, (i) neither an Amortization Event nor a Potential
         Amortization Event with respect to any Series of Investor Notes nor
         an Asset  Deficiency is continuing or will occur, (ii) the issuance
         of the new Series of Investor Notes will not result in any breach of
         any of the terms, conditions or provisions of or constitute a default
         under any indenture, mortgage, deed of trust or other agreement or
         instrument to which the Issuer is a party or by which it or its
         property is bound or any order of any court or administrative agency
         entered in any suit, action or other judicial or administrative
         proceeding to which the Issuer is a party or by which it or its
         property may be bound or to which it or its property may be subject
         and (iii) all conditions precedent provided in this Base Indenture
         and the related Indenture Supplement with respect to the
         authentication and delivery of the new Series of Investor Notes have
         been complied with; and

                 (vi) such other documents, instruments, certifications,
         agreements or other items as the Indenture Trustee may reasonably
         require.

                 3.       In conjunction with the issuance of a new Series of
Investor Notes, the parties hereto shall execute an Indenture Supplement,
which shall specify the relevant terms with respect to any newly issued
Series of Investor Notes, which may include without limitation:

                 a. its name or designation;

                 b. an Initial Invested Amount or the method of
         calculating the Initial Invested Amount;

                 c. the Note Rate (or formula for the determination thereof);

                 d. the Series Closing Date;

                 e. each Rating Agency rating such Series;

                 f. the name of the Clearing Agency or Foreign Clearing
Agency, if any;

                 g. the interest payment date or dates and the date or dates
         from which interest shall accrue;

                                      -4-

<PAGE>

                 h. the method of allocating Collections with respect to such
         Series;

                 i. the method by which the principal amount of Investor
         Notes of such Series shall amortize or accrete;

                 j. the names of any Series Accounts to be used by such
         Series and the terms governing the operation of any such accounts and
         use of moneys therein;

                 k. the Series Servicing Fee and the Series Servicing Fee
         Percentage;

                 l. the terms on which the Investor Notes of such Series may
         be redeemed, repurchased or remarketed to other investors;

                 m. any deposit into any Series Account;

                 n. the number of Classes of such Series, and if more than
         one Class, the rights and priorities of each such Class;

                 o. the priority of any Series with respect to any other
         Series;

                 p.  the Lease Rate Caps required to be maintained with
         respect to such Series;  and

                 q. any other relevant terms of such Series (including
         whether or not such Series will be pledged as collateral for an
         issuance of any other securities, including commercial paper) (all
         such terms, the "Principal Terms" of such Series).

The terms of such Indenture Supplement may modify or amend the terms of this
Indenture solely as applied to such new Series.  If on the date of the
issuance of such Series there is issued and outstanding one or more Series of
Investor Notes and no Series of Investor Notes is currently rated by a Rating
Agency, then as a condition to such issuance a nationally recognized
investment banking firm or commercial bank shall also deliver to the
Indenture Trustee a certificate of an officer thereof stating, in substance,
that, to the best of such officer's knowledge and belief, the issuance of
such new Series of Investor Notes will not have a material adverse effect on
the timing or distribution of payments to such other Series of Investor Notes
then issued and outstanding.

                 4.       The Issuer may direct the Indenture Trustee to
deposit all or a portion of the net proceeds from the issuance of any new
Series of Investor Notes into a Series Account for another Series of Investor

                                      -5-

<PAGE>

Notes and may specify that the proceeds from the sale of such new Series of
Investor Notes may be used to reduce the Invested Amount of another Series of
Investor Notes.

C.Execution and Authentication.

                 1.       The Investor Notes shall, upon issue pursuant to
Section 2.2, be executed on behalf of the Issuer by an Authorized Officer and
delivered by the Issuer to the Indenture Trustee for authentication and
redelivery as provided herein.  If an Authorized Officer whose signature is
on an Investor Note no longer holds that office at the time the Investor Note
is authenticated, the Investor Note shall nevertheless be valid.

                 2.       At any time and from time to time after the
execution and delivery of this Indenture, the Issuer may deliver Investor
Notes of any particular Series executed by the Issuer to the Indenture
Trustee for authentication, together with one or more Issuer Orders for the
authentication and delivery of such Investor Notes, and the Indenture
Trustee, in accordance with such Issuer Order and this Indenture, shall
authenticate and deliver such Investor Notes.  If specified in the related
Indenture Supplement for any Series of Investor Notes, the Indenture Trustee
shall authenticate and deliver outside the United States the Global Note that
is issued upon original issuance thereof, upon receipt of an Issuer Order, to
the Depository against payment of the purchase price therefor.  If specified
in the related Indenture Supplement for any Series of Investor Notes, the
Indenture Trustee shall authenticate Book-Entry Notes that are issued upon
original issuance thereof, upon receipt of an Issuer Order, to a Clearing
Agency, a Foreign Clearing Agency or its nominee as provided in Section 2.10
against payment of the purchase price thereof.

                 3.       No Investor Note shall be entitled to any benefit
under this Indenture or be valid for any purpose unless there appears on such
Investor Note a certificate of authentication substantially in the form
provided for herein, duly executed by the Indenture Trustee by the manual
signature of a Responsible Officer (and the Luxembourg agent (the "Luxembourg
Agent"), if such Investor Notes are listed on the Luxembourg Stock Exchange).
Such signatures on such certificate shall be conclusive evidence, and the
only evidence, that the Investor Note has been duly authenticated under this
Indenture.  The Indenture Trustee may appoint an authenticating agent
acceptable to the Issuer to authenticate Investor Notes.  Unless limited by
the term of such appointment, an authenticating agent may authenticate
Investor Notes whenever the Indenture Trustee may do so.  Each reference in
this Indenture to authentication by the Indenture Trustee includes
authentication by such agent.  The Indenture Trustee's certificate of
authentication shall be in substantially the following form:

                                      -6-

<PAGE>

                 This is one of the Investor Notes of a series issued under
the within mentioned Indenture.

                                            THE CHASE
                                            MANHATTAN BANK, as
                                            Indenture Trustee

                                            By: _________________
                                            Authorized Signatory

                 4.       Each Investor Note shall be dated and issued as of
the date of its authentication by the Indenture Trustee, except Bearer Notes
which shall be dated the applicable Series Closing Date as provided in the
related Indenture Supplement..

                 5.       Notwithstanding the foregoing, if any Investor Note
shall have been authenticated and delivered hereunder but never issued and
sold by the Issuer, and the Issuer shall deliver such Investor Note to the
Indenture Trustee for cancellation, together with a written statement (which
need not comply with Section 13.2 and need not be accompanied by an Opinion
of Counsel) stating that such Investor Note has never been issued and sold by
the Issuer, for all purposes of this Indenture such Investor Note shall be
deemed never to have been authenticated and delivered hereunder and shall not
be entitled to the benefits of this Indenture.

D.Registration of Transfer and Exchange of Notes.

                 1.       The Issuer shall cause to be kept at the office or
agency to be maintained by a transfer agent and registrar (the "Transfer
Agent and Registrar"), a register (the "Note Register") in which, subject to
such reasonable regulations as it may prescribe, the Transfer Agent and
Registrar shall provide for the registration of the Investor Notes of each
Series (unless otherwise provided in the related Indenture Supplement) and of
transfers and exchanges of the Investor Notes as herein provided.  Chase is
hereby initially appointed Transfer Agent and Registrar for the purposes of
registering the Investor Notes and transfers and exchanges of the Investor
Notes as herein provided.  If any form of Investor Note is issued as a Global
Note, the Indenture Trustee may, or if and so long as any Series of Investor
Notes is listed on the Luxembourg Stock Exchange and such exchange shall so
require, the Indenture Trustee shall appoint a co-transfer agent and
co-registrar in Luxembourg or another European city.  Any reference in this
Indenture to the Transfer Agent and Registrar shall include any co-transfer
agent and co-registrar unless the context otherwise requires.  Chase shall be
permitted to resign as Transfer Agent and Registrar upon 30 days' written
notice to the Indenture Trustee; provided, however, that such resignation
shall not be effective and Chase shall continue to perform its duties as

                                      -7-

<PAGE>

Transfer Agent and Registrar until the Indenture Trustee has appointed a
successor Transfer Agent and Registrar with the consent of the Issuer.

                 If a Person other than the Indenture Trustee is appointed by
the Issuer as the Transfer Agent and Registrar, the Issuer will give the
Indenture Trustee prompt written notice of the appointment of such Transfer
Agent and Registrar and of the location, and any change in the location, of
the Transfer Agent and Register, and the Indenture Trustee shall have the
right to inspect the Transfer Agent and Register at all reasonable times and
to obtain copies thereof.

                 An institution succeeding to the corporate agency business
of the Transfer Agent and Registrar shall continue to be the Transfer Agent
and Registrar without the execution or filing of any paper or any further act
on the part of the Indenture Trustee or such Transfer Agent and Registrar.

                 The Transfer Agent and Registrar shall maintain in The City
of New York (and, if so specified in the related Indenture Supplement for any
Series of Notes, any other city designated in such Indenture Supplement) an
office or offices or agency or agencies where Investor Notes may be
surrendered for registration of transfer or exchange.  The Transfer Agent and
Registrar initially designates its corporate trust office located at 450 West
33rd Street, New York, New York 10001-2697 as its office for such purposes.
The Transfer Agent and Registrar shall give prompt written notice to the
Indenture Trustee, the Issuer and to the Investor Noteholders of any change
in the location of such office or agency.

                 Upon surrender for registration of transfer of any Investor
Note at the office or agency of the Transfer Agent and Registrar, if the
requirements of Section 2.4(b) and Section 8-401(a) of the UCC are met, the
Issuer shall execute and after the Issuer has executed, the Indenture Trustee
shall authenticate and (if the Transfer Agent and Registrar is different than
the Indenture Trustee, then the Transfer Agent and Registrar shall) deliver
to the Investor Noteholder, in the name of the designated transferee or
transferees, one or more new Investor Notes, in any authorized denominations,
of the same Class and a like aggregate principal amount; provided, however
that the provisions of this paragraph shall not apply to Bearer Notes.

                 At the option of any Holder of Registered Notes, Registered
Notes may be exchanged for other Registered Notes of the same Series in
authorized denominations of like aggregate principal amount, upon surrender
of the Registered Notes to be exchanged at any office or agency of the
Transfer Agent and Registrar maintained for such purpose.  At the option of
any holder of  Bearer Notes, subject to applicable laws and regulations
(including without limitation, the Bearer Rules), Bearer Notes may be
exchanged for other Bearer Notes or Registered Notes of the same Series in
authorized denominations of like aggregate principal amount, in the manner

                                      -8-

<PAGE>

specified in the Indenture Supplement for such Series, upon surrender of the
Bearer Notes to be exchanged at an office or agency of the Transfer Agent and
Registrar located outside the United States.  Each Bearer Note surrendered
pursuant to this Section 2.4 shall have attached thereto (or be accompanied
by) all unmatured Coupons, provided that any Bearer Note so surrendered after
the close of business on the Record Date preceding the relevant Payment Date
need not have attached the Coupons relating to such Payment Date.

                 Whenever any Investor Notes of any Series are so surrendered
for exchange, if the requirements of Section 8-401(a) of the UCC are met, the
Issuer shall execute and after the Issuer has executed, the Indenture Trustee
shall authenticate and (if the Transfer Agent and Registrar is different than
the Indenture Trustee, then the Transfer Agent and Registrar shall) deliver
to the Investor Noteholder, the Investor Notes which the Investor Noteholder
making the exchange is entitled to receive.

                 All Investor Notes issued upon any registration of transfer
or exchange of the Investor Notes shall be the valid obligations of the
Issuer, evidencing the same debt, and entitled to the same benefits under
this Indenture, as the Investor Notes surrendered upon such registration of
transfer or exchange.

                 Every Investor Note presented or surrendered for
registration of transfer or exchange shall be (i) duly endorsed by, or be
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder thereof or such Holder's
attorney duly authorized in writing, with such signature guaranteed by a
commercial bank or trust company located, or having a correspondent located,
in The City of New York or the city in which the Corporate Trust Office is
located, or by a member firm of a national securities exchange, and (ii)
accompanied by such other documents as the Indenture Trustee may require.

                 The preceding provisions of this Section 2.4
notwithstanding, the Indenture Trustee or the Transfer Agent and Registrar,
as the case may be, shall not be required to register the transfer of or
exchange any Investor Note of any Series for a period of 15 days preceding
the due date for any payment in full of the Investor Notes of such Series.

                 Unless otherwise provided in the related Indenture
Supplement, no service charge shall be made for any registration of transfer
or exchange of Investor Notes, but the Transfer Agent and Registrar may
require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of Investor
Notes.

                 All Investor Notes (together with any Coupons attached to
Bearer Notes) surrendered for registration of transfer and exchange shall be

                                      -9-

<PAGE>

canceled by the Transfer Agent and Registrar and disposed of in a manner
satisfactory to the Indenture Trustee.  The Indenture Trustee shall cancel
and destroy any Global Notes upon its exchange in full for Definitive Notes
and shall deliver a certificate of destruction to the Issuer.  Such
certificate shall also state that a certificate or certificates of each
Foreign Clearing Agency was received with respect to each portion of such
Global Note exchanged for Definitive Notes in accordance with the related
Indenture Supplement.

                 The Issuer shall execute and deliver to the Indenture
Trustee or the Transfer Agent and Registrar, as applicable, Bearer Notes and
Registered Notes in such amounts and at such times as are necessary to enable
the Indenture Trustee to fulfill its responsibilities under this Indenture
and the Investor Notes.

                 2.       Unless otherwise provided in the related Indenture
Supplement, registration of transfer of Registered Notes containing a legend
relating to the restrictions on transfer of such Registered Notes (which
legend shall be set forth in the Indenture Supplement relating to such
Investor Notes) shall be effected only if the conditions set forth in such
related Indenture Supplement are satisfied.

E.Mutilated, Destroyed, Lost or Stolen Notes.

                 If (a) any mutilated Investor Note (together, in the case of
Bearer Notes, with all unmatured Coupons, if any, appertaining thereto) is
surrendered to the Transfer Agent and Registrar, or the Transfer Agent and
Registrar receives evidence to its satisfaction of the destruction, loss or
theft of any Investor Note and (b) there is delivered to the Transfer Agent
and Registrar and the Indenture Trustee such security or indemnity as may be
reasonably required by them to save each of them harmless, then provided that
the requirements of Section 8-405 of the UCC are met, the Issuer shall
execute and after the Issuer has executed, the Indenture Trustee shall
authenticate and (unless the Transfer Agent and Registrar is different from
the Indenture Trustee, in which case the Transfer Agent and Registrar shall)
deliver (in compliance with applicable law), in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Investor Note, a new Investor
Note of like tenor and aggregate principal amount; provided, however, that if
any such destroyed, lost or stolen Investor Note, but not a mutilated
Investor Note, shall have become or within seven days shall be due and
payable, instead of issuing a replacement Investor Note, the Issuer may pay
such destroyed, lost or stolen Investor Note when so due or payable without
surrender thereof.  If, after the delivery of such replacement Investor Note
or payment of a destroyed, lost or stolen Investor Note pursuant to the
proviso to the preceding sentence, a purchaser for value of the original
Investor Note in lieu of which such replacement Investor Note was issued
presents for payment such original Investor Note, the Issuer, the Transfer

                                     -10-

<PAGE>

Agent and Registrar and the Indenture Trustee shall be entitled to recover
such replacement Investor Note (or such payment) from the Person to whom it
was delivered or any Person taking such replacement Investor Note from such
Person to whom such replacement Investor Note was delivered or any assignee
of such Person, except a purchaser for value, and shall be entitled to
recover upon the security or indemnity provided therefor to the extent of any
loss, damage, cost or expense incurred by the Issuer, the Transfer Agent and
Registrar or the Indenture Trustee in connection therewith.

                 In connection with the issuance of any new Investor Note
under this Section 2.5, the Indenture Trustee or the Transfer Agent and
Registrar may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Indenture Trustee and
the Transfer Agent and Registrar) connected therewith.  Any duplicate
Investor Note issued pursuant to this Section 2.5 shall constitute an
original contractual obligation of the Issuer whether or not the lost, stolen
or destroyed note shall be found at any time.

F.Appointment of Paying Agent.

                 1.   The Indenture Trustee may appoint a Paying Agent with
respect to the Investor Notes.  The Indenture Trustee hereby appoints Chase
as the initial Paying Agent.  The Paying Agent shall have the revocable power
to withdraw funds and make distributions to Investor Noteholders from the
appropriate account or accounts maintained for the benefit of Noteholders as
specified in this Indenture or the related Indenture Supplement for any
Series pursuant to Article 5.  The Indenture Trustee may revoke such power
and remove the Paying Agent, if the Indenture Trustee determines in its sole
discretion that the Paying Agent shall have failed to perform its obligations
under this Indenture in any material respect or for other good cause.  The
Indenture Trustee shall notify the Rating Agency of the removal of any Paying
Agent.  If any form of Investor Note is issued as a Global Note, or if and so
long as any Series of Investor Notes are listed on the Luxembourg Stock
Exchange and such exchange shall so require, the Indenture Trustee shall
appoint a co-paying agent in Luxembourg or another European city.  The Paying
Agent shall be permitted to resign as Paying Agent upon 30 days' written
notice to the Indenture Trustee.  In the event that any Paying Agent shall no
longer be the Paying Agent, the Indenture Trustee shall appoint a successor
to act as Paying Agent (which shall be a bank or trust company and may be the
Indenture Trustee) with the consent of the Issuer.  The provisions of
Sections 10.01, 10.02, 10.03 and 10.06 shall apply to the Indenture Trustee
also in the capacity of Paying Agent, for so long as the Indenture Trustee
shall act as Paying Agent.  Any reference in this Indenture to the Paying
Agent shall include any co-paying agent unless the context requires
otherwise.

                                     -11-

<PAGE>

                 2.       The Indenture Trustee shall cause each Paying Agent
(other than itself) to execute and deliver to the Indenture Trustee an
instrument in which such Paying Agent shall agree with the Indenture Trustee
that such Paying Agent will:

                 a.  hold all sums held by it for the payment of amounts due
         with respect to the Investor Notes in trust for the benefit of the
         Persons entitled thereto until such sums shall be paid to such
         Persons or otherwise disposed of as herein provided and pay such sums
         to such Persons as herein provided;

                 b.  give the Indenture Trustee notice of any default by the
         Issuer of which it has actual knowledge in the making of any payment
         required to be made with respect to the Investor Notes;

                 c.  at any time during the continuance of any such default,
         upon the written request of the Indenture Trustee, forthwith pay to
         the Indenture Trustee all sums so held in trust by such Paying Agent;

                  d. immediately resign as a Paying Agent and forthwith
         pay to the Indenture Trustee all sums held by it in trust for the
         payment of the Investor Notes if at any time it ceases to meet the
         standards required to be met by the Paying Agent at the time of its
         appointment; and

                 e.  comply with all requirements of the Code with respect to
         the withholding from any payments made by it on any Investor Notes of
         any applicable withholding taxes imposed thereon and with respect to
         any applicable reporting requirements in connection therewith.

An institution succeeding to the corporate agency business of the Paying
Agent shall continue to be the Paying Agent without the execution or filing
of any paper or any further act on the part of the Indenture Trustee or such
Paying Agent.

                 3.       Subject to applicable laws with respect to escheat
of funds, any money held by the Indenture Trustee or any Paying Agent or a
Clearing Agency or a Foreign Clearing Agency in trust for the payment of any
amount due with respect to any Investor Note and remaining unclaimed for two
years after such amount has become due and payable shall be discharged from
such trust and be paid to the Issuer on Issuer Request; and the Holder of
such Investor Note shall thereafter, as an unsecured general creditor, look
only to the Issuer for payment thereof (but only to the extent of the amounts
so paid to the Issuer), and all liability of the Indenture Trustee or such
Paying Agent with respect to such trust money shall thereupon cease;
provided, however, that the Indenture Trustee or such Paying Agent, before
being required to make any such repayment, may at the expense of the Issuer

                                     -12-

<PAGE>

cause to be published once, in a newspaper published in the English language,
customarily published on each Business Day and of general circulation in New
York City, and London and Luxembourg (if the related Series of Investor Notes
has been listed on the Luxembourg Stock Exchange), if applicable, notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be repaid to the Issuer.
The Indenture Trustee may also adopt and employ, at the expense of the
Issuer, any other reasonable means of notification of such repayment.

G.Persons Deemed Owners.

                 Prior to due presentation of an Investor Note for
registration of transfer, the Indenture Trustee, the Paying Agent, the
Transfer Agent and Registrar and any agent of any of them may treat the
Person in whose name any Investor Note is registered as the owner of such
Investor Note for the purpose of receiving distributions pursuant to Article
5 (as described in any Indenture Supplement) and for all other purposes
whatsoever, and neither the Indenture Trustee, the Paying Agent, the Transfer
Agent and Registrar nor any agent of any of them shall be affected by any
notice to the contrary.

                 In the case of a Bearer Note, the Indenture Trustee, the
Paying Agent, the Transfer Agent and Registrar and any agent of any of them
may treat the holder of a Bearer Note or Coupon as the owner of such Bearer
Note or Coupon for the purpose of receiving distributions pursuant to Article
5 and for all other purposes whatsoever, and neither the Indenture Trustee,
the Paying Agent, the Transfer Agent and Registrar nor any agent of any of
them shall be affected by any notice to the contrary.

H.Investor Noteholder List.

                 The Indenture Trustee will furnish or cause to be furnished
by the Transfer Agent and Registrar to the Issuer or the Paying Agent, within
five Business Days after receipt by the Indenture Trustee of a request
therefor from the Issuer or the Paying Agent, respectively, in writing, a
list in such form as the Issuer or the Paying Agent may reasonably require,
of the names and addresses of the Investor Noteholders of each Series as of
the most recent Record Date for payments to such Investor Noteholders.
Unless otherwise provided in the related Indenture Supplement, holders of
Investor Notes of any Series in a principal amount aggregating not less than
10% of the Investor Interest of such Series (the "Applicants") may apply in
writing to the Indenture Trustee, and if such application states that the
Applicants desire to communicate with other Investor Noteholders of any
Series with respect to their rights under this Indenture or under the
Investor Notes and is accompanied by a copy of the communication which such
Applicants propose to transmit, then the Indenture Trustee, after having been

                                     -13-

<PAGE>

adequately indemnified by such Applicants for its costs and expenses, shall
afford or shall cause the Transfer Agent and Registrar to afford such
Applicants access during normal business hours to the most recent list of
Investor Noteholders held by the Indenture Trustee and shall give the Issuer
notice that such request has been made, within five Business Days after the
receipt of such application.  Such list shall be as of a date no more than 45
days prior to the date of receipt of such Applicants' request.  Every
Investor Noteholder, by receiving and holding an Investor Note, agrees with
the Indenture Trustee that neither the Indenture Trustee, the Transfer Agent
and Registrar, nor any of their respective agents shall be held accountable
by reason of the disclosure of any such information as to the names and
addresses of the Investor Noteholders hereunder, regardless of the source
from which such information was obtained.

                 The Indenture Trustee shall preserve in as current a form as
is reasonably practicable the most recent list available to it of the names
and addresses of Investor Noteholders of each Series of Investor Notes.  If
the Indenture Trustee is not the Registrar, the Issuer shall furnish to the
Indenture Trustee at least seven Business Days before each Payment Date and
at such other time as the Indenture Trustee may request in writing, a list in
such form and as of such date as the Indenture Trustee may reasonably require
of the names and addresses of Investor Noteholders of each Series of Investor
Notes.

I.Treasury Notes.

                 In determining whether the Investor Noteholders of the
required principal amount of Investor Notes have concurred in any direction,
waiver or consent, Investor Notes owned by the Issuer or any Affiliate of the
Issuer shall be considered as though they are not Outstanding, except that
for the purpose of determining whether the Indenture Trustee shall be
protected in relying on any such direction, waiver or consent, only Investor
Notes of which the Indenture Trustee has received written notice of such
ownership shall be so disregarded.  Absent written notice to the Indenture
Trustee of such ownership, the Indenture Trustee shall not be deemed to have
knowledge of the identity of the individual beneficial owners of the Investor
Notes.

J.Book-Entry Notes.

                 Unless otherwise provided in any related Indenture
Supplement, the Investor Notes, upon original issuance, shall be issued in
the form of typewritten Notes representing the Book-Entry Notes, to be
delivered to the depository specified in such Indenture Supplement (the
"Depository") which shall be the Clearing Agency or the Foreign Clearing
Agency, by or on behalf of such Series.  The Investor Notes of each Series
shall, unless otherwise provided in the related Indenture Supplement,

                                     -14-

<PAGE>

initially be registered on the Note Register in the name of the nominee of
the Clearing Agency or the Foreign Clearing Agency.  No Beneficial Owner will
receive a definitive note representing such Beneficial Owner's interest in
the related Series of Investor Notes, except as provided in Section 2.11.
Unless and until definitive, fully registered Investor Notes of any Series
("Definitive Notes") have been issued to Beneficial Owners pursuant to
Section 2.11:

                 1.       the provisions of this Section 2.10 shall be in full
         force and effect with respect to each such Series;

                 2.       the Issuer, the Paying Agent, the Transfer Agent and
         Registrar and the Indenture Trustee may deal with the Clearing Agency
         or the Foreign Clearing Agency and the applicable Clearing Agency
         Participants for all purposes (including the payment of principal of
         and interest on the Investor Notes and the giving of instructions or
         directions hereunder) as the sole Holder of the Investor Notes, and
         shall have no obligation to the Beneficial Owners;

                 3.       to the extent that the provisions of this Section
         2.10 conflict with any other provisions of this Indenture, the
         provisions of this Section 2.10 shall control with respect to each
         such Series; and

                 4.       the rights of Beneficial Owners of each such Series
         shall be exercised only through the Clearing Agency or the Foreign
         Clearing Agency and the applicable Clearing Agency Participants and
         shall be limited to those established by law and agreements between
         such Beneficial Owners and the Clearing Agency or the Foreign
         Clearing Agency and/or the Clearing Agency Participants, and all
         references in this Indenture to actions by the Noteholders shall
         refer to actions taken by the Clearing Agency or the Foreign Clearing
         Agency upon instructions from the Clearing Agency Participants, and
         all references in this Indenture to distributions, notices, reports
         and statements to the Noteholders shall refer to distributions,
         notices, reports and statements to the Clearing Agency or the Foreign
         Clearing Agency, as registered holder of the Investor Notes of such
         Series for distribution to the Beneficial Owners in accordance with
         the procedures of the Clearing Agency.  Pursuant to the Depository
         Agreement applicable to a Series, unless and until Definitive Notes
         of such Series are issued pursuant to Section 2.11, the initial
         Clearing Agency will make book-entry transfers among the Clearing
         Agency Participants and receive and transmit distributions of
         principal and interest on the Investor Notes to such Clearing Agency
         Participants.

K.Definitive Notes.

                                     -15-

<PAGE>

                 If (i) (A) the Issuer advises the Indenture Trustee in
writing that the Clearing Agency or the Foreign Clearing Agency is no longer
willing or able to discharge properly its responsibilities under the
applicable Depository Agreement, and (B) the Indenture Trustee or the Issuer
is unable to locate a qualified successor, (ii) the Issuer, at its option,
advises the Indenture Trustee in writing that it elects to terminate the
book-entry system through the Clearing Agency or the Foreign Clearing Agency
with respect to any Series or (iii) after the occurrence of an Event of
Default, Beneficial Owners of a Majority in Interest of a Series of Investor
Notes advise the Indenture Trustee and the applicable Clearing Agency or the
Foreign Clearing Agency through the applicable Clearing Agency Participants
in writing that the continuation of a book-entry system through the
applicable Clearing Agency or Foreign Clearing Agency is no longer in the
best interests of such Beneficial Owners, the Indenture Trustee shall notify
all Beneficial Owners of such Series, through the applicable Clearing Agency
Participants, of the occurrence of any such event and of the availability of
Definitive Notes to Beneficial Owners of such Series requesting the same.
Upon surrender to the Indenture Trustee of the Investor Notes of such Series
by the applicable Clearing Agency or the Foreign Clearing Agency, accompanied
by registration instructions from the applicable Clearing Agency or the
applicable Foreign Clearing Agency for registration, the Issuer shall execute
and the Indenture Trustee shall authenticate and (if the Transfer Agent and
Registrar is different than the Indenture Trustee, then the Transfer Agent
and Registrar shall) deliver the Definitive Notes in accordance with the
instructions of the Clearing Agency.  Neither the Issuer nor the Indenture
Trustee shall be liable for any delay in delivery of such instructions and
may conclusively rely on, and shall be protected in relying on, such
instructions.  Upon the issuance of Definitive Notes of such Series all
references herein to obligations imposed upon or to be performed by the
applicable Clearing Agency or Foreign Clearing Agency shall be deemed to be
imposed upon and performed by the Indenture Trustee, to the extent applicable
with respect to such Definitive Notes, and the Indenture Trustee shall
recognize the Holders of the Definitive Notes of such Series as Noteholders
of such Series hereunder.

L.Global Note.

                 If specified in the related Indenture Supplement for any
Series, the Investor Notes may be initially issued in the form of a single
temporary Global Note (the "Global Note") in bearer form, without interest
coupons, in the denomination of the Initial Invested Amount and substantially
in the form attached to the related Indenture Supplement.  Unless otherwise
specified in the related Indenture Supplement, the provisions of this Section
2.12 shall apply to such Global Note.  The Global Note will be authenticated
by the Indenture Trustee upon the same conditions, in substantially the same
manner and with the same effect as the Definitive Notes.  The Global Note may

                                     -16-

<PAGE>

be exchanged in the manner described in the related Indenture Supplement for
Registered or Bearer Notes in definitive form.

M.Principal and Interest.

                 1.       The principal of each Series of Investor Notes shall
be payable at the times and in the amount set forth in the related Indenture
Supplement and in accordance with Section 6.1.

                 2.       Each Series of Investor Notes shall accrue interest
as provided in the related Indenture Supplement and such interest shall be
payable on each Payment Date for such Series in accordance with Section 6.1
and the related Indenture Supplement.

                 3.       Except as provided in the following sentence, the
Person in whose name any Investor Note is registered at the close of business
on any Record Date with respect to a Payment Date for such Investor Note
shall be entitled to receive the principal and interest payable on such
Payment Date notwithstanding the cancellation of such Investor Note upon any
registration of transfer, exchange or substitution of such Investor Note
subsequent to such Record Date.  Any interest payable at maturity shall be
paid to the Person to whom the principal of such Investor Note is payable.

                 4.       If the Issuer defaults in the payment of interest on
the Investor Notes of any Series, such interest, to the extent paid on any
date that is more than five (5) Business Days after the applicable due date,
shall, at the option of the Issuer, cease to be payable to the Persons who
were Investor Noteholders of such Series at the applicable Record Date and
the Issuer shall pay the defaulted interest in any lawful manner, plus, to
the extent lawful, interest payable on the defaulted interest, to the Persons
who are Investor Noteholders of such Series on a subsequent special record
date which date shall be at least five (5) Business Days prior to the payment
date, at the rate provided in this Indenture and in the Investor Notes of
such Series.  The Issuer shall fix or cause to be fixed each such special
record date and payment date, and at least 15 days before the special record
date, the Issuer (or the Indenture Trustee, in the name of and at the expense
of the Issuer) shall mail to Investor Noteholders of such Series a notice
that states the special record date, the related payment date and the amount
of such interest to be paid.

N.Tax Treatment.

                 The Issuer has structured this Indenture and the Investor
Notes have been (or will be) issued with the intention that the Investor
Notes will qualify under applicable tax law as indebtedness of the Issuer and
any entity acquiring any direct or indirect interest in any Investor Note by
acceptance of its Investor Notes (or, in the case of a Beneficial Owner, by

                                     -17-

<PAGE>

virtue of such Beneficial Owner's acquisition of a beneficial interest
therein) agrees to treat the Investor Notes (or beneficial interests therein)
for purposes of Federal, state and local and income or franchise taxes and
any other tax imposed on or measured by income, as indebtedness of the
Issuer.  Each Investor Noteholder agrees that it will cause any Beneficial
Owner's acquiring an interest in an Investor Note through it to comply with
this Indenture as to treatment as indebtedness for such tax purposes.

                                  ARTICLE II.

                                  SECURITY

A.Grant of Security Interest.

                 1.       To secure the Issuer Obligations, the Issuer hereby
pledges, assigns, conveys, delivers, transfers and sets over to the Indenture
Trustee, for the benefit of the Investor Noteholders, and hereby grants to
the Indenture Trustee, for the benefit of the Investor Noteholders, a
security interest in, all of the Issuer's right, title and interest in and to
all of the Issuer's assets, property and interests in property of any kind or
nature whatsoever (other than as specified below) whether now or hereafter
existing, acquired or created (all of the foregoing being referred to as the
"Collateral"), including without limitation, all right, title and interest of
the Issuer in the following property and interests in property:

                                a.   the SUBIs, the SUBI Certificates and any
         related rights, authority, powers and privileges of the holder
         thereof under the related Origination Trust Documents and all
         payments and distributions thereunder of whatever kind or character
         and whether in cash or other property, at any time made or
         distributable to the Issuer thereunder or in respect thereof, whether
         due or to become due, including, without limitation, the immediate
         and continuing right of the Issuer to receive and collect all amounts
         payable to the holder thereof and all of the Issuer's rights,
         remedies, powers, interests and privileges under the Origination
         Trust Documents (whether arising pursuant to the terms thereof or
         otherwise available to the Issuer), including, without limitation,
         the right to enforce the Origination Trust Documents, to give or
         withhold any and all consents, requests, notices, directions,
         approvals or waivers thereunder and all amounts due and to become due
         thereunder, whether payable as indemnities or damages for breach
         thereof;

                                b.   a beneficial interest in the Initial
         Units and any Unit Leases, Unit Vehicles and the Related Rights
         associated therewith, and all Additional Units and any Unit Leases,
         Unit Vehicles and the Related Rights associated therewith hereafter

                                     -18-

<PAGE>

         acquired by the Issuer, including, without limitation, all monies due
         or to become due with respect thereto and all proceeds thereof;

                                c.   the Transfer Agreement, including,
         without limitation, all of the Issuer's rights, remedies, powers,
         interests and privileges under the Transfer Agreement (whether
         arising pursuant to the terms thereof or otherwise available to the
         Issuer), including, without limitation, the right to enforce the
         Transfer Agreement, to give or withhold any and all consents,
         requests, notices, directions, approvals or waivers thereunder and
         all amounts due and to become due thereunder, whether payable as
         indemnities or damages for breach thereof;

                                d.   the Administration Agreement, including,
         without limitation, all of the Issuer's rights, remedies, powers,
         interests and privileges under the Administration Agreement (whether
         arising pursuant to the terms thereof or otherwise available to the
         Issuer), including, without limitation, the right to enforce the
         Administration Agreement, to give or withhold any and all consents,
         requests, notices, directions, approvals or waivers thereunder and
         all amounts due and to become due thereunder, whether payable as
         indemnities or damages for breach thereof;

                                e.   the Collection Account and the Gain on
         Sale Account and all monies on deposit from time to time in the
         Collection Account and the Gain on Sale Account and all proceeds
         thereof (including any Permitted Investments purchased with monies
         from any account held for the benefit of the Issuer or the Investor
         Noteholders and any investment earnings thereon);

                                f.   each Series Account and all monies on
         deposit from time to time in such Series Account and all proceeds
         thereof (including any Permitted Investments purchased with monies
         from any account held for the benefit of the Issuer or the Investor
         Noteholders and any investment earnings thereon);

                                g.   all additional property that may from
         time to time hereafter (pursuant to the terms of any Indenture
         Supplement or otherwise) be subjected to the grant and pledge hereof
         by the Issuer, including, without limitation, any Hedging
         Instruments; and

                                h.   all proceeds of any and all of the
         foregoing including, without limitation, all present and future
         claims, demands, causes of action and chooses in action in respect of
         any or all of the foregoing and all payments on or under and all
         proceeds of every kind and nature whatsoever in respect of any or all

                                     -19-

<PAGE>

         of the foregoing, including all proceeds of the conversion thereof,
         voluntary or involuntary, into cash or other liquid property, all
         cash proceeds, accounts, accounts receivable, notes, drafts,
         acceptances, chattel paper, checks, deposit accounts, insurance
         proceeds, condemnation awards, rights to payment of any and every
         kind and other forms of obligations and receivables, instruments and
         other property which at any time constitute all or part of or are
         included in the proceeds of any of the foregoing.

                 2.       The foregoing grant is made in trust to secure the
Issuer Obligations and to secure compliance with the provisions of this
Indenture and any Indenture Supplement, all as provided in this Indenture.
The Indenture Trustee, as Indenture Trustee on behalf of the Investor
Noteholders, acknowledges such grant, accepts the trusts under this Indenture
in accordance with the provisions of this Indenture and subject to Section
10.1 and 10.2, agrees to perform its duties required in this Indenture to the
best of its abilities to the end that the interests of the Investor
Noteholders may be adequately and effectively protected.  The Collateral
shall secure the Investor Notes equally and ratably without prejudice,
priority (except, with respect to any Series of Investor Notes, as otherwise
stated in the applicable Indenture Supplement) or distinction.

                 Section B.  Transaction Documents.

                 Upon the occurrence of a default or breach by any Person
party to a Transaction Document, promptly following a request from the
Indenture Trustee to do so and at the Issuer's expense, the Issuer agrees to
take all such lawful action as permitted under this Indenture as the
Indenture Trustee may request to compel or secure the performance and
observance by SPV, the Servicer, the Administrator, VMS or PHH Consumer Lease
or any other party to any of the Transaction Documents of its obligations
thereunder, in each case in accordance with the applicable terms thereof, and
to exercise any and all rights, remedies, powers and privileges lawfully
available to the Issuer to the extent and in the manner directed by the
Indenture Trustee, including, without limitation, the transmission of notices
of default and the institution of legal or administrative actions or
proceedings to compel or secure performance by each of SPV, the Servicer, the
Administrator, VMS or PHH Consumer Lease (or such other party to any
Transaction Document), of their respective obligations thereunder.  If (i)
the Issuer shall have failed, within 30 days of receiving the direction of
the Indenture Trustee, to take commercially reasonable action to accomplish
such directions of the Indenture, (ii) the Issuer refuses to take any such
action, or (iii) the Indenture Trustee reasonably determines that such action
must be taken immediately, the Indenture Trustee may take such previously
directed action and any related action permitted under this Indenture which
the Indenture Trustee thereafter determines is appropriate (without the need
under this provision or any other provision under the Indenture to direct the

                                     -20-

<PAGE>

Issuer to take such action), on behalf of the Issuer and the Investor
Noteholders.

C.Release of Issuer Assets.

                 1.  The Indenture Trustee shall when required by the
provisions of this Indenture execute instruments to release property from the
lien of this Indenture, or convey the Indenture Trustee's interest in the
same, in a manner and under circumstances that are not inconsistent with the
provisions of this Indenture.  No party relying upon an instrument executed
by the Indenture Trustee as provided in this Section 3.2 shall be bound to
ascertain the Indenture Trustee's authority, inquire into the satisfaction of
any conditions precedent or see to the application of any moneys.

                 2.  The Indenture Trustee shall, at such time as there are
no Investor Notes Outstanding, release any remaining portion of the Issuer
Assets that secured the Investor Notes from the lien of this Indenture and
release to the Issuer any funds then on deposit in the Issuer Accounts. The
Indenture Trustee shall release property from the lien of this Indenture
pursuant to this Section 3.2(b) only upon receipt of an Issuer Order
accompanied by an Officer's Certificate, an Opinion of Counsel and (if this
Indenture is qualified under the TIA and the TIA so requires) Independent
Certificates in accordance with TIA Sections 314(c) and 314(d)(1) meeting the
applicable requirements of Section 13.1.

D.Opinions of Counsel.

                 The Indenture Trustee shall receive at least seven days'
notice when requested by the Issuer to take any action pursuant to Section
3.2(a), accompanied by copies of any instruments involved, and the Indenture
Trustee may also require as a condition of such action, an Opinion of
Counsel, in form and substance satisfactory to the Indenture Trustee, stating
the legal effect of any such action, outlining the steps required to complete
the same, and concluding that all such action will not materially and
adversely impair the security for the Investor Notes or the rights of the
Noteholders; provided, however that such Opinion of Counsel shall not be
required to express an opinion as to the fair value of the Issuer Assets.
Counsel rendering any such opinion may rely, without independent
investigation, on the accuracy and validity of any certificate or other
instrument delivered to the Indenture Trustee in connection with any such
action.

E.Stamp, Other Similar Taxes and Filing Fees.

                 The Issuer shall indemnify and hold harmless the Indenture
Trustee and each Investor Noteholder from any present or future claim for
liability for any stamp or other similar tax and any penalties or interest

                                     -21-

<PAGE>

with respect thereto, that may be assessed, levied or collected by any
jurisdiction in connection with this Indenture or any Collateral.  The Issuer
shall pay, or reimburse the Indenture Trustee for, any and all amounts in
respect of, all search, filing, recording and registration fees, taxes,
excise taxes and other similar imposts that may be payable or determined to
be payable in respect of the execution, delivery, performance and/or
enforcement of this Indenture.

                                 ARTICLE III.

                                   REPORTS

A.Servicer Reports.

                 The Issuer will deliver or cause to be delivered to the
Indenture Trustee:

                 (i) prior to 1:00 p.m., New York City time, on each Deposit
         Date, a copy of the Deposit Report (a "Deposit Report") prepared and
         delivered by the Servicer to the Issuer pursuant to the Origination
         Trust Servicing Agreement, setting forth the aggregate amount of
         Collections deposited in the Collection Account on such Deposit Date;

                 (ii) on each Determination Date, a copy of the Settlement
         Statement (a "Settlement Statement") prepared and delivered by the
         Servicer to the Issuer pursuant to the Origination Trust Servicing
         Agreement, setting forth the information required to be set forth
         therein under the Origination Trust Servicing Agreement and each
         Indenture Supplement and such other information as the Indenture
         Trustee may reasonably request;

                 (iii) within ten Business Days of the last Business Day of
         each fiscal quarter of the Issuer, a copy of the Quarterly Compliance
         Certificate (a "Quarterly Compliance Certificate") prepared and
         delivered by the Servicer pursuant to the Origination Trust Servicing
         Agreement, setting forth the information required to be set forth
         therein under the Origination Trust Servicing Agreement;

                 (iv) on or before March 31 of each year, a copy of the
         Annual Servicing Report (an "Annual Servicing Report") prepared by
         the Servicer's independent auditors in accordance with the
         Origination Trust Servicing Agreement, setting forth the information
         required to be set forth therein under the Origination Trust
         Servicing Agreement;

                 (v) within 45 days following the end of each fiscal quarter
         of the Servicer, a copy of the certificate prepared and delivered by

                                     -22-

<PAGE>

         the Servicer pursuant Section 8.3(b) of the Origination Trust
         Servicing Agreement;

                 (vi) promptly upon the delivery by the Servicer to the
         Issuer, a copy of any other information, reports or other materials
         required to be delivered by the Servicer to the Issuer pursuant to
         the Origination Trust Servicing Agreement;

                 (vii)  from time to time such additional information
         regarding the financial position, results of operations or business
         of the Origination Trust or VMS as the Indenture Trustee may
         reasonably request to the extent that the Servicer delivers such
         information to the Issuer pursuant to the Origination Trust Servicing
         Agreement; and

                 (viii)   at the time of delivery of the item described in
         clause (iii) above, a certificate of an officer of the Issuer that,
         except as provided in any certificate delivered in accordance with
         Section 8.8, no Amortization Event, Potential Amortization Event,
         Termination Event, Default or Event of Default under any of the
         Transaction Documents to which it is a party has occurred or is
         continuing during such fiscal quarter.

B.Communication to Investor Noteholders.

                 1.  If this Indenture is qualified under the TIA, the
Investor Noteholders may communicate pursuant to TIA Section 312(b) with
other Investor Noteholders with respect to their rights under this Indenture
or under the Investor Notes.

                 2.  If this Indenture is qualified under the TIA, the
Issuer, the Indenture Trustee and the Transfer Agent and Registrar shall have
the protection of TIA Section 312(c).

C.Rule 144A Information.

                 For so long as any of the Investor Notes are "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities Act,
the Issuer agrees to provide to any Investor Noteholder or Beneficial Owner
and to any prospective purchaser of Investor Notes designated by such
Investor Noteholder or Beneficial Owner upon the request of such Investor
Noteholder or Beneficial Owner or prospective purchaser, any information
required to be provided to such holder or prospective purchaser to satisfy
the conditions set forth in Rule 144A(d)(4) under the Securities Act.

D.Reports by the Issuer.

                                     -23-

<PAGE>

                 1.  Unless otherwise specified in the related Indenture
Supplement, on each Settlement Date, the Issuer shall deliver to the
Indenture Trustee or the Paying Agent and the Indenture Trustee or the Paying
Agent, as the case may be, shall forward to each Investor Noteholder of each
Outstanding Series the Monthly Settlement Statement with respect to such
Series, with a copy to the Rating Agencies.

                 2.       As soon as available, but in any event within 90
days after the end of each fiscal year of the Issuer, the Issuer shall
deliver to the Indenture Trustee or the Paying Agent and the Indenture
Trustee or the Paying Agent, as the case may be, shall forward to each
Investor Noteholder of each Outstanding Series a copy of the audited
financial statements of the Issuer at the end of such year, prepared by
independent certified public accountants of nationally recognized standing.

                 3.  Unless otherwise specified in the related Indenture
Supplement, on or before January 31 of each calendar year, beginning with
calendar year 2000, the Indenture Trustee or the Paying Agent shall furnish
to each Person who at any time during the preceding calendar year was an
Investor Noteholder of a Series of Investor Notes a statement prepared by or
on behalf of the Issuer containing the information which is required to be
contained in the Monthly Settlement Statements with respect to such Series of
Investor Notes aggregated for such calendar year or the applicable portion
thereof during which such Person was an Investor Noteholder, together with
such other customary information (consistent with the treatment of the
Investor Notes as debt) as the Issuer deems necessary or desirable to enable
the Investor Noteholders to prepare their tax returns (each such statement,
an "Annual Noteholders' Tax Statement").  Such obligations of the Issuer to
prepare and the Indenture Trustee or the Paying Agent to distribute the
Annual Noteholders' Tax Statement shall be deemed to have been satisfied to
the extent that substantially comparable information shall be provided by the
Indenture Trustee or the Paying Agent pursuant to any requirements of the
Code as from time to time in effect.

E.Reports by the Indenture Trustee.

                 If this Indenture is qualified under the TIA, within 60 days
after each March 31, beginning on March 31 in the first year after this
Indenture is qualified under the TIA, if required by TIA Section 313(a), the
Indenture Trustee shall mail to each Investor Noteholder as required by TIA
Section 313(c) a brief report dated as of such date that complies with TIA
Section 313(a).  The Indenture Trustee also shall comply with TIA
Section 313(b).  A copy of such each report at the time of its mailing to
Investor Noteholders shall be filed by the Indenture Trustee with the
Securities and Exchange Commission and each stock exchange, if any, on which
the Investor Notes are listed.  The Issuer shall notify the Indenture Trustee
if and when the Investor Notes are listed on any stock exchange.

                                     -24-

<PAGE>

                                  ARTICLE IV.

                   ALLOCATION AND APPLICATION OF COLLECTIONS

A.Collection Account.

                 1.       Establishment of Collection Account.  The Indenture
Trustee shall establish and maintain in the name of the Indenture Trustee,
for the benefit of the Noteholders, an Eligible Deposit Account bearing a
designation clearly indicating that the funds deposited therein are held in
trust for the benefit of the Noteholders (the "Collection Account").  If at
any time the Indenture Trustee obtains knowledge that the Collection Account
is no longer an Eligible Deposit Account,  the Indenture Trustee shall,
within 30 days of obtaining such knowledge, establish a new Collection
Account that is an Eligible Deposit Account and transfer into the new
Collection Account all cash and investments from the non-qualifying
Collection Account.  Initially, the Collection Account will be established
with Chase.  The Indenture Trustee shall possess all right, title and
interest in all moneys, instruments, securities and other property on deposit
from time to time in the Collection Account and the proceeds thereof for the
benefit of the Noteholders.  The Collection Account shall be under the sole
dominion and control of the Indenture Trustee for the benefit of the
Noteholders.

                 2.       Series Accounts.  If so provided in the related
Indenture Supplement, the Indenture Trustee, for the benefit of the Investor
Noteholders, shall cause to be established and maintained, one or more Series
Accounts and/or administrative sub-accounts of the Collection Account to
facilitate the proper allocation of Collections in accordance with the terms
of such Indenture Supplement.  Each such Series Account shall bear a
designation clearly indicating that the funds deposited therein are held for
the benefit of the Investor Noteholders of such Series.  Each such Series
Account will be an Eligible Deposit Account, if so provided in the related
Indenture Supplement and will have the other features and be applied as set
forth in the related Indenture Supplement.

                 3.       Administration of the Collection Account.  The
Issuer shall instruct the institution maintaining the Collection Account in
writing to invest the funds on deposit in the Collection Account in Permitted
Investments.  Any such investment shall mature and such funds shall be
available for withdrawal on or prior to the Transfer Date related to the
Monthly Period in which such funds were processed for collection, or if so
specified in the related Indenture Supplement, on the immediately succeeding
Payment Date.  All such Permitted Investments will be credited to the
Collection Account and any such Permitted Investments that constitute (i)
Physical Property (and that is not either a United States Security

                                     -25-

<PAGE>

Entitlement or a Security Entitlement) shall be delivered to the Indenture
Trustee in accordance with paragraph (a) of the definition of "Delivery" and
shall be held by the Indenture Trustee pending maturity or disposition;
(ii) United States Security Entitlements or Security Entitlements shall be
Controlled by the Indenture Trustee pending maturity or disposition; and
(iii) Uncertificated Securities (and not United States Security Entitlements)
shall be delivered to the Indenture Trustee in accordance with paragraph (b)
of the definition of "Delivery" and shall be maintained by the Indenture
Trustee pending maturity or disposition. The Indenture Trustee shall take
such action as is required to maintain the Indenture Trustee's security
interest in the Permitted Investments credited to the Collection Account.  In
the absence of written investment instructions hereunder, funds on deposit in
the Collection Account shall remain uninvested. Neither the Issuer nor the
Indenture Trustee shall dispose of (or permit the disposal of) any Permitted
Investments prior to the maturity thereof to the extent such disposal would
result in a loss of principal of such Permitted Investment.

B.Gain on Sale Account.

                 1.       Establishment of Gain on Sale Account. The Indenture
Trustee shall establish and maintain in the name of the Indenture Trustee,
for the benefit of the Noteholders, an Eligible Deposit Account bearing a
designation clearly indicating that the funds deposited therein are held in
trust for the benefit of the Noteholders (the "Gain on Sale Account").  If at
any time the Indenture Trustee obtains knowledge that the Gain on Sale
Account is no longer an Eligible Deposit Account,  the Indenture Trustee
shall, within 30 days of obtaining such knowledge, establish a new Gain on
Sale Account that is an Eligible Deposit Account and transfer into the new
Gain on Sale Account all cash and investments from the non-qualifying Gain on
Sale Account.  Initially, the Gain on Sale Account will be established with
Chase.  The Indenture Trustee shall possess all right, title and interest in
all moneys, instruments, securities and other property on deposit from time
to time in the Gain on Sale Account and the proceeds thereof for the benefit
of the Noteholders.  The Gain on Sale Account shall be under the sole
dominion and control of the Indenture Trustee for the benefit of the
Noteholders.

                 2.       Investment of Funds in the Gain on Sale Account.
The Issuer shall instruct the institution maintaining the Gain on Sale
Account in writing to invest the funds on deposit in the Gain on Sale Account
in Permitted Investments.  Any such investment shall mature and such funds
shall be available for withdrawal on or prior to each Transfer Date.  All
such Permitted Investments will be credited to the Gain on Sale Account and
any such Permitted Investments that constitute (i) Physical Property (and
that is not either a United States Security Entitlement or a Security
Entitlement) shall be delivered to the Indenture Trustee in accordance with
paragraph (a) of the definition of "Delivery" and shall be held by the

                                     -26-

<PAGE>

Indenture Trustee pending maturity or disposition; (ii) United States
Security Entitlements or Security Entitlements shall be Controlled by the
Indenture Trustee pending maturity or disposition; and (iii) Uncertificated
Securities (and not United States Security Entitlements) shall be delivered
to the Indenture Trustee in accordance with paragraph (b) of the definition
of "Delivery" and shall be maintained by the Indenture Trustee pending
maturity or disposition. The Indenture Trustee shall take such action as is
required to maintain the Indenture Trustee's security interest in the
Permitted Investments credited to the Gain on Sale Account.  In the absence
of written investment instructions hereunder, funds on deposit in the Gain on
Sale Account shall remain uninvested. Neither the Issuer nor the Indenture
Trustee shall dispose of (or permit the disposal of) any Permitted
Investments prior to the maturity thereof to the extent such disposal would
result in a loss of principal of such Permitted Investment.

                 3.       Earnings from Gain on Sale Account.  All interest
and earnings (net of losses and investment expenses) paid on funds on deposit
in the Gain on Sale Account shall be deemed to be available and on deposit
for distribution.

                 4.       Deposits to Gain on Sale Account.  Amounts will be
deposited in the Gain on Sale Account in accordance with this Article 5, as
modified by any Indenture Supplement.

                 5.       Withdrawals from Gain on Sale Account.  No later
than 2:00 p.m., New York City time, on each Transfer Date, the Issuer shall
direct the Indenture Trustee in writing to withdraw from the Gain on Sale
Account an amount equal to the lesser of (x) the Monthly Residual Value Loss
for the immediately preceding Monthly Period and (y) the amount then on
deposit in the Gain on Sale Account and deposit such amount into the
Collection Account for allocation in accordance with Article 5, as modified
by any Indenture Supplement.  On any Transfer Date on which the amount on
deposit in the Gain on Sale Account (after giving effect to any withdrawals
therefrom pursuant to the immediately preceding sentence) is greater than an
amount equal to the Applicable Gain on Sale Account Percentage of the sum of
the aggregate Lease Balance of each Eligible Lease that is a Closed-End Lease
allocated to the Lease SUBI as of last day of the Monthly Period immediately
preceding such Transfer Date and the Aggregate Residual Value Amount as of
such date, the Issuer shall direct the Indenture Trustee in writing to
withdraw such excess from the Gain on Sale Account and deposit it in the
Issuer General Account.

C.Collection of Money.

                 Except as otherwise provided herein, the Indenture Trustee
may demand payment or delivery of, and shall receive and collect, directly
and without intervention or assistance of any fiscal agent or other

                                     -27-

<PAGE>

intermediary, all money and other property payable to or receivable by the
Indenture Trustee pursuant to this Indenture.  The Indenture Trustee shall
apply all such money received by it as provided in this Indenture.  Except as
otherwise provided in this Indenture, if any default occurs in the making of
any payment or performance under any agreement or instrument that is part of
the Issuer Assets, the Indenture Trustee may take such action as may be
appropriate to enforce such payment or performance, including the institution
and prosecution of appropriate proceedings.  Any such action shall be without
prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceeds thereafter as provided in Article 9.

D.Collections and Allocations.

                 1.       Collections in General.  Until this Indenture is
terminated pursuant to Section 11.1, the Issuer shall, and the Indenture
Trustee is authorized to, cause all Collections due and to become due to the
Issuer or the Indenture Trustee, as the case may be, under or in connection
with the Collateral to be paid directly to the Indenture Trustee for deposit
into the Collection Account.  The Issuer agrees that if any Collections shall
be received by the Issuer in an account other than the Collection Account,
such monies, instruments, cash and other proceeds will not be commingled by
the Issuer with any of its other funds or property, if any, but will be held
separate and apart therefrom and shall be held in trust by the Issuer for,
and immediately remitted to, the Indenture Trustee, with any necessary
endorsement.  All monies, instruments, cash and other proceeds received by
the Indenture Trustee pursuant to this Indenture shall be in immediately
available funds and shall be immediately deposited in the Collection Account
and shall be applied as provided in this Article 5.

                 2.       Allocations for Investor Noteholders.  On each
Deposit Date, the Issuer shall allocate Collections deposited into the
Collection Account in accordance with this Article 5 and shall instruct the
Indenture Trustee to withdraw the required amounts from the Collection
Account and make the required deposits in any Series Account in accordance
with this Article 5, as modified by any Indenture Supplement.  The Issuer
shall make such deposits or payments on the date indicated therein in
immediately available funds or as otherwise provided in the Indenture
Supplement for any Series with respect to such Series.  The Administrator, on
behalf of the Issuer, has agreed to furnish to the Indenture Trustee or the
Paying Agent, as applicable, written instructions to make the aforementioned
withdrawals and payments from the Collection Account and any Issuer Accounts
specified herein or in an Indenture Supplement.  The Indenture Trustee and
the Paying Agent shall promptly follow any such written instructions.

                 3.       Sharing Collections.  In the manner described in the
related Indenture Supplement, to the extent that Collections that are
allocated to any Series on a Deposit Date are not needed to make payments to

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<PAGE>

Investor Noteholders of such Series or required to be deposited in a Series
Account for such Series on such Deposit Date, such Collections may, at the
direction of the Issuer, be applied to cover principal payments due to or for
the benefit of Investor Noteholders of another Series.  Any such reallocation
will not result in a reduction in the Invested Amount of the Series to which
such Collections were initially allocated.

                 4.       Allocations After Certain Events of Default.  After
each Outstanding Series of Investor Notes shall have been declared to be
immediately due and payable pursuant to Section 9.2 as a result of the
occurrence of an Event of Default defined in clause (a) or (b) of Section
9.1, to the extent that Collections that are allocated to any Series of
Investor Notes on a Settlement Date are not needed to make payments of
principal of, or interest on, the Investor Notes of such Series, such
Collections shall be applied to cover principal payments due on the Investor
Notes of all other Series then Outstanding on a pro rata basis based on the
Invested Percentages of such other Series of Investor Notes.

[THE REMAINDER OF ARTICLE 5 IS RESERVED AND MAY BE SPECIFIED IN ANY INDENTURE
SUPPLEMENT WITH RESPECT TO ANY SERIES.]

                                  ARTICLE V.

                                DISTRIBUTIONS

A.Distributions in General.

                 1.  Unless otherwise specified in the applicable Indenture
Supplement, amounts payable to an Investor Noteholder hereunder shall be
payable by check mailed first-class postage prepaid to such Investor
Noteholder at the address for such Investor Noteholder appearing in the Note
Register except that with respect to Investor Notes registered in the name of
a Clearing Agency or its nominee, such amounts shall be payable by wire
transfer of immediately available funds released by the Indenture Trustee or
the Paying Agent from the applicable Series Account no later than Noon on the
Payment Date (New York City time) for credit to the account designated by
such Clearing Agency or its nominee, as applicable.

                 2.       Unless otherwise specified in the applicable
Indenture Supplement (i) all distributions to Investor Noteholders of all
classes within a Series of Investor Notes will have the same priority and
(ii) in the event that on any date of determination the amount available to
make payments to the Investor Noteholders of a Series is not sufficient to
pay all sums required to be paid to such Investor Noteholders on such date,
then each class of Investor Noteholders will receive its ratable share (based

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upon the aggregate amount due to such class of Investor Noteholders) of the
aggregate amount available to be distributed in respect of the Investor Notes
of such Series.

B.Optional Repurchase of Investor Notes.

                 On any Payment Date occurring on or after the date on which
the Invested Amount of any Series or class of such Series is equal to or less
than the Repurchase Amount (if any) for such Series or class set forth in the
Indenture Supplement related to such Series, or at such other time otherwise
provided for in the Indenture Supplement relating to such Series, the Issuer
shall have the option to purchase all Outstanding Investor Notes of such
Series, or class of such Series, at a purchase price (determined after giving
effect to any payment of principal and interest on such Payment Date) equal
to (unless otherwise specified in the related Indenture Supplement) the
Invested Amount of such Series on such Payment Date, plus accrued and unpaid
interest on the unpaid principal balance of the Investor Notes of such Series
(calculated at the Investor Note Rate of such Series) through the day
immediately prior to the date of such purchase plus, if provided for in the
related Indenture Supplement, any premium payable at such time.  The Issuer
shall give the Indenture Trustee at least 30 days' prior written notice of
the date on which the Issuer intends to exercise such option to purchase.
Not later than 12:00 noon, New York City time, on such Payment Date, an
amount of the purchase price equal to the Invested Amount of all Investor
Notes of such Series on such Payment Date and the amount of accrued and
unpaid interest with respect to such Investor Notes and any applicable
premium will be deposited into the applicable Series Account for such Series
in immediately available funds.  The funds deposited into such Series Account
or distributed to the Paying Agent will be passed through in full to the
Investor Noteholders on such Payment Date.

                                  ARTICLE VI.

                        REPRESENTATIONS AND WARRANTIES

                 The Issuer hereby represents and warrants, for the benefit
of the Indenture Trustee and the Noteholders, as follows as of each Series
Closing Date:

A.Existence and Power.

                 The Issuer (a) is a special purpose limited liability
company duly formed, validly existing and in good standing under the laws of
the State of Delaware, (b) is duly qualified to do business as a foreign
limited liability company and in good standing under the laws of each
jurisdiction where the character of its property, the nature of its business

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or the performance of its obligations make such qualification necessary, and
(c) has all powers and all governmental licenses, authorizations, consents
and approvals required to carry on its business as now conducted and for
purposes of the transactions contemplated by this Indenture and the other
Transaction Documents.

B.Governmental Authorization.

                 The execution, delivery and performance by the Issuer of
this Indenture, the related Indenture Supplement and the other Transaction
Documents to which it is a party (a) is within the Issuer's power, has been
duly authorized by all necessary action, (b) requires no action by or in
respect of, or filing with, any governmental body, agency or official which
has not been obtained and (c) does not contravene, or constitute a default
under, any Requirement of Law or any provision of its certificate of
formation or the LLC Agreement or result in the creation or imposition of any
Lien on any of the Issuer Assets, except for Liens created by this Indenture
or the other Transaction Documents.  This Indenture and each of the other
Transaction Documents to which the Issuer is a party has been executed and
delivered by a duly authorized officer of the Issuer.

C.Binding Effect.

                 This Indenture and each other Transaction Document is a
legal, valid and binding obligation of the Issuer enforceable against the
Issuer in accordance with its terms (except as such enforceability may be
limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting creditors' rights generally or by
general equitable principles, whether considered in a proceeding at law or in
equity and by an implied covenant of good faith and fair dealing).

D.Financial Information; Financial Condition.

                 All balance sheets, all statements of operations, of
shareholders' equity and of cash flow, and other financial data (other than
projections) which have been or shall hereafter be furnished by the Issuer to
the Indenture Trustee and the Rating Agencies pursuant to Section 4.4 have
been and will be prepared in accordance with GAAP (to the extent applicable)
and do and will present fairly the financial condition of the Issuer as of
the dates thereof and the results of its operations for the periods covered
thereby, subject, in the case of all unaudited statements, to normal year-end
adjustments and lack of footnotes and presentation items.

E.Litigation.

                 There is no action, suit or proceeding pending against or,
to the knowledge of the Issuer, threatened against or affecting the Issuer

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before any court or arbitrator or any Governmental Authority that could
materially adversely affect the financial position, results of operations,
business, properties, performance, prospects or condition (financial or
otherwise) of the Issuer or which in any manner draws into question the
validity or enforceability of this Indenture, any Indenture Supplement or any
other Transaction Document or the ability of the Issuer to perform its
obligations hereunder or thereunder.

F.No ERISA Plan.

                 The Issuer has not established and does not maintain or
contribute to any Pension Plan that is covered by Title IV of ERISA and will
not do so, as long as any Investor Notes are Outstanding.

G.Tax Filings and Expenses.

                 The Issuer has filed all federal, state and local tax
returns and all other tax returns which, to the knowledge of the Issuer, are
required to be filed (whether informational returns or not), and has paid all
taxes due, if any, pursuant to said returns or pursuant to any assessment
received by the Issuer, except such taxes, if any, as are being contested in
good faith and for which adequate reserves have been set aside on its books.
The Issuer has paid all fees and expenses required to be paid by it in
connection with the conduct of its business, the maintenance of its existence
and its qualification as a foreign limited liability company authorized to do
business in each State in which it is required to so qualify.

H.Disclosure.

                 All certificates, reports, statements, documents and other
information furnished to the Indenture Trustee by or on behalf of the Issuer
pursuant to any provision of this Indenture or any Transaction Document, or
in connection with or pursuant to any amendment or modification of, or waiver
under, this Indenture or any Transaction Document, shall, at the time the
same are so furnished, be complete and correct to the extent necessary to
give the Indenture Trustee true and accurate knowledge of the subject matter
thereof in all material respects, and the furnishing of the same to the
Indenture Trustee shall constitute a representation and warranty by the
Issuer made on the date the same are furnished to the Indenture Trustee to
the effect specified herein.

I.Investment Company Act.

                 The Issuer is not, and is not controlled by, an "investment
company" within the meaning of, and is not required to register as an
"investment company" under, the Investment Company Act of 1940.

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J.Regulations T, U and X.

                 The proceeds of the Investor Notes will not be used to
purchase or carry any "margin stock" (as defined or used in the regulations
of the Board of Governors of the Federal Reserve System, including
Regulations T, U and X thereof).  The Issuer is not engaged in the business
of extending credit for the purpose of purchasing or carrying any margin
stock.

K.No Consent.

                 No consent, action by or in respect of, approval or other
authorization of, or registration, declaration or filing with, any
Governmental Authority or other Person is required for the valid execution
and delivery of this Indenture or any Indenture Supplement or for the
performance of any of the Issuer's obligations hereunder or thereunder or
under any other Transaction Document other than such consents, approvals,
authorizations, registrations, declarations or filings as shall have been
obtained by the Issuer prior to the Initial Closing Date or as contemplated
in Section 7.13.

L.Solvency.

                 Both before and after giving effect to the transactions
contemplated by this Indenture and the other Transaction Documents, the
Issuer is solvent within the meaning of the Bankruptcy Code and the Issuer is
not the subject of any voluntary or involuntary case or proceeding seeking
liquidation, reorganization or other relief with respect to itself or its
debts under any bankruptcy or insolvency law and no Insolvency Event has
occurred with respect to the Issuer.

M.Security Interests.

                 1.       Each of the SUBI Certificates has been duly
registered in the name of the Indenture Trustee and all other action
necessary (including the filing of UCC-1 financing statements) to protect and
perfect the Indenture Trustee's security interest in the Collateral now in
existence and hereafter acquired or created has been duly and effectively
taken.

                 2.       No security agreement, financing statement,
equivalent security or lien instrument or continuation statement listing the
Issuer as debtor covering all or any part of the Collateral is on file or of
record in any jurisdiction, except such as may have been filed, recorded or
made by the Issuer in favor of the Indenture Trustee on behalf of the
Noteholders in connection with this Indenture.

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                 3.       This Indenture constitutes a valid and continuing
Lien on the Collateral in favor of the Indenture Trustee on behalf of the
Noteholders, which Lien will be prior to all other Liens (other than
Permitted Liens), will be enforceable as such as against creditors of and
purchasers from the Issuer in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws affecting
creditors' rights generally or by general equitable principles, whether
considered in a proceeding at law or in equity and by an implied covenant of
good faith and fair dealing.  All action necessary to perfect such prior
security interest has been duly taken.

                 4.       Except for a change made pursuant to Section 8.19,
the Issuer's principal place of business and chief executive office shall be
at: 900 Old Country Road, Garden City, New York 11530, and the place where
its records concerning the Collateral are kept is at:  103 Foulk Road, Suite
205-11, Wilmington, Delaware 19803.  The Issuer does not transact, and has
not transacted, business under any other name.

                 5.       All authorizations in this Indenture for the
Indenture Trustee to endorse checks, instruments and securities and to
execute financing statements, continuation statements, security agreements,
and other instruments with respect to the Collateral are powers coupled with
an interest and are irrevocable.

N.Binding Effect of Certain Agreements.

                 Each of the Origination Trust Documents and the Transfer
Agreement is in full force and effect and there are no outstanding events of
default thereunder nor have events occurred which, with the giving of notice,
the passage of time or both, would constitute such an event of default.

O.Non-Existence of Other Agreements.

                 1.  Other than as permitted by Section 8.23, (i) the Issuer
is not a party to any contract or agreement of any kind or nature and (ii)
the Issuer is not subject to any obligations or liabilities of any kind or
nature in favor of any third party, including, without limitation, Contingent
Obligations.

                 2.  The Issuer has not engaged in any activities since its
formation (other than those incidental to its formation and other appropriate
actions including the proposed purchase of the SUBI Certificates, the
authorization and the issue of the initial Series of Notes, the execution of
the Transaction Documents to which it is a party and the performance of the
activities referred to in or contemplated by such agreements).

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<PAGE>

                 Section P.  Compliance with Contractual Obligations and
Laws.

                 The Issuer is not (i) in violation of the LLC Agreement,
(ii) in violation of any Requirement of Law to which it or its property or
assets may be subject or (iii) in violation of any Contractual Obligation
with respect to the Issuer.

Q.Other Representations.

                 All representations and warranties of the Issuer made in
each Transaction Document to which it is a party are true and correct and are
repeated herein as though fully set forth herein.

                                 ARTICLE VII.

                                   COVENANTS

A.Payment of Investor Notes.

                 The Issuer shall pay the principal of (and premium, if any)
and interest on the Investor Notes pursuant to the provisions of this
Indenture and any applicable Indenture Supplement.  Principal and interest
shall be considered paid on the date due if the Paying Agent holds on that
date money designated for and sufficient to pay all principal and interest
then due.

B.Maintenance of Office or Agency.

                 The Issuer will maintain in The City of New York, an office
or agency where Investor Notes may be surrendered for registration of
transfer or exchange.  The Issuer hereby initially appoints the Transfer
Agent and Registrar to serve as its agent for the foregoing purposes.  The
Issuer will give prompt written notice to the Indenture Trustee of the
location, and of any change in the location, of any such office or agency.
If at any time the Issuer shall fail to maintain any such office or agency or
shall fail to furnish the Indenture Trustee with the address thereof, such
surrenders, notices and demands may be made or served at the Corporate Trust
Office, and the Issuer hereby appoints the Indenture Trustee as its agent to
receive all such surrenders, notices and demands.

                 The Issuer may also from time to time designate one or more
other offices or agencies where the Investor Notes may be presented or
surrendered for any or all such purposes and may from time to time rescind
such designations.  The Issuer will give prompt written notice to the

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<PAGE>

Indenture Trustee of any such designation or rescission and of any change in
the location of any such other office or agency.

                 The Issuer hereby designates the Corporate Trust Office of
the Indenture Trustee as one such office or agency of the Issuer.

C.Payment of Obligations.

                 The Issuer will pay and discharge, at or before maturity,
all of its respective material obligations and liabilities, including,
without limitation, tax liabilities and other governmental claims, except
where the same may be contested in good faith by appropriate proceedings, and
will maintain, in accordance with GAAP, reserves as appropriate for the
accrual of any of the same.

D.Conduct of Business and Maintenance of Existence.

                 The Issuer will keep in full effect its existence, rights
and franchises as a limited liability company under the laws of the State of
Delaware and will obtain and preserve its qualification to do business in
each jurisdiction in which the failure to so qualify would have a material
adverse effect on the business and operations of the Issuer or which
qualification shall be necessary to protect the validity and enforceability
of this Indenture, the Investor Notes and any instrument or agreement
included in the Issuer Assets.

E.Compliance with Laws.

                 The Issuer will comply in all respects with all Requirements
of Law and all applicable laws, ordinances, rules, regulations, and
requirements of Governmental Authorities (including, without limitation,
ERISA and the rules and regulations thereunder) except where the necessity of
compliance therewith is contested in good faith by appropriate proceedings
and where such noncompliance would not materially and adversely affect the
condition, financial or otherwise, operations, performance, properties or
prospects of the Issuer or its ability to carry out the transactions
contemplated in this Indenture and each other Transaction Document; provided,
however, such noncompliance will not result in a Lien (other than a Permitted
Lien) on any Issuer Asset.

F.Inspection of Property, Books and Records.

                 The Issuer will keep proper books of record and account in
which full, true and correct entries shall be made of all dealings and
transactions in relation to the Issuer Assets and its business activities in
accordance with GAAP; and will permit the Indenture Trustee to visit and
inspect any of its properties, to examine and make abstracts from any of its

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books and records and to discuss its affairs, finances and accounts with its
officers, directors, employees and independent public accountants, all at
such reasonable times upon reasonable notice and as often as may reasonably
be requested.

G.Compliance with Transaction Documents; Issuer Assets.

                 1.  The Issuer will not take any action and will use its
best efforts not to permit any action to be taken by others that would
release any Person from any of such Person's covenants or obligations under
any instrument or agreement included in the Issuer Assets or that would
result in the amendment, hypothecation, subordination, termination or
discharge of, or impair the validity or effectiveness of, any such instrument
or agreement, except as expressly provided in this Indenture, any other
Transaction Document or such other instrument or agreement.

                 2.       Promptly upon becoming aware of any default under
any Transaction Document, the Issuer shall give the Indenture Trustee and the
Rating Agencies notice thereof.

                 3.  The Issuer will punctually perform and observe all of
its obligations and agreements contained in this Indenture, the other
Transaction Documents and in the instruments and agreements included in the
Issuer Assets, including but not limited to preparing (or causing to be
prepared) and filing (or causing to be filed) all UCC financing statements
and continuation statements required to be filed by the terms of this
Indenture and the Transfer Agreement in accordance with and within the time
periods provided for herein and therein.

                 4.  Without derogating from the absolute nature of the
assignment granted to the Indenture Trustee under this Indenture or the
rights of the Indenture Trustee hereunder, the Issuer agrees that, unless
such action is specifically permitted hereunder or under the other
Transaction Documents, it will not, without the prior written consent of the
Indenture Trustee or the Holders of a Majority in Interest of each Series of
Outstanding Notes, amend, modify, waive, supplement, terminate or surrender,
or agree to any amendment, modification, supplement, termination, waiver or
surrender of, the terms of any of the Issuer Assets, including any of the
Transaction Documents, or waive timely performance or observance by SPV under
the Transfer Agreement or the Origination Trust, VMS or the Servicer under
the Origination Trust Documents. Upon the occurrence of a Servicer
Termination Event, the Issuer will not, without the prior written consent of
the Indenture Trustee or the Holders of a Majority in Interest of each Series
of Outstanding Notes, terminate the Servicer and appoint a successor Servicer
in accordance with the Servicing Agreement and will terminate the Servicer
and appoint a successor Servicer in accordance with the Servicing Agreement

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if so directed by the Indenture Trustee or the Holders of a Majority in
Interest of each Series of Outstanding Notes.

                 5.  The Issuer may contract with other Persons to assist it
in performing its duties under this Indenture, and any performance of such
duties by a Person identified to the Indenture Trustee in an Officer's
Certificate of the Issuer shall be deemed to be action taken by the Issuer.
Initially, the Issuer has contracted with the Administrator to assist the
Issuer in performing its duties under this Indenture.

H.Notice of Defaults.

                 Promptly upon becoming aware of any Potential Amortization
Event, Amortization Event, Potential Termination Event, Termination Event,
Servicer Termination Event, Event of Default or Default under any of the
Transaction Documents, the Issuer shall give the Indenture Trustee and the
Rating Agencies written notice thereof, together with an Officer's
Certificate, setting forth the details thereof and any action with respect
thereto taken or contemplated to be taken by the Issuer.

I.Notice of Material Proceedings.

                 Promptly upon becoming aware thereof, the Issuer shall give
the Indenture Trustee and the Rating Agencies written notice of the
commencement or existence of any proceeding by or before any Governmental
Authority against or affecting the Issuer which is reasonably likely to have
a material adverse effect on the business, condition (financial or
otherwise), results of operations, properties or performance of the Issuer or
the ability of the Issuer to perform its obligations under this Indenture or
under any other Transaction Document to which it is a party.

J.Further Requests.

                 The Issuer will promptly furnish to the Indenture Trustee
and the Rating Agencies such other information as, and in such form as, the
Indenture Trustee or the Rating Agencies may reasonably request in connection
with the transactions contemplated hereby.

K.Protection of Issuer Assets.

                 The Issuer will from time to time prepare (or shall cause to
be prepared), execute and deliver all such supplements and amendments hereto
and all such financing statements, continuation statements, instruments of
further assurance and other instruments, and will take such other action
necessary or advisable to:

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                 1.  maintain or preserve the lien and security interest (and
         the priority thereof) of this Indenture or carry out more effectively
         the purposes hereof;

                 2.  perfect, publish notice of or protect the validity of
         the lien and security interest created by this Indenture;

                 3.  enforce the rights of the Indenture Trustee and the
         Noteholders in any of the Issuer Assets; or

                 4.  preserve and defend title to the Issuer Assets and the
         rights of the Indenture Trustee and the Noteholders in such Issuer
         Assets against the claims of all persons and parties.

                 The Issuer hereby designates the Indenture Trustee its agent
and attorney-in-fact to execute any financing statement, continuation
statement or other instrument required to be filed by the Indenture Trustee
pursuant to this Section.

L.Annual Opinion of Counsel.

                 On or before March 31 of each calendar year, commencing with
March 31, 2000, the Issuer shall furnish to the Indenture Trustee an Opinion
of Counsel either stating that, in the opinion of such counsel, such action
has been taken with respect to the recording, filing, re-recording and
refiling of this Indenture, any indentures supplemental hereto and any other
requisite documents and with respect to the execution and filing of any
financing statements and continuation statements as are necessary to maintain
the perfection of the lien and security interest created by this Indenture
and reciting the details of such action or stating that in the opinion of
such counsel no such action is necessary to maintain the perfection of such
lien and security interest.  Such Opinion of Counsel shall also describe the
recording, filing, re-recording and refiling of this Indenture, any
indentures supplemental hereto and any other requisite documents and the
execution and filing of any financing statements and continuation statements
that will, in the opinion of such counsel, be required to maintain the
perfection of the lien and security interest of this Indenture until March 31
in the following calendar year.

M.Liens.

                 The Issuer will not create, incur, assume or permit to exist
any Lien upon any of the Issuer Assets (including the Collateral), other than
Permitted Liens.

N.Other Indebtedness.

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                 The Issuer will not create, assume, incur, suffer to exist
or otherwise become or remain liable in respect of any Indebtedness other
than (i) Indebtedness hereunder and (ii) Indebtedness permitted under any
other Transaction Document.

O.Mergers.

                 The Issuer will not merge or consolidate with or into any
other Person.

P.Sales of Issuer Assets.

                 The Issuer will not sell, lease, transfer, liquidate or
otherwise dispose of any Issuer Assets, except as contemplated by the
Transaction Documents unless directed to do so by the Indenture Trustee.

Q.Acquisition of Assets.

                 The Issuer will not acquire, by long-term or operating lease
or otherwise, any assets except in accordance with the terms of the
Transaction Documents.

R.Distributions.

                 The Issuer will not declare any dividends on any of the
Membership Interests or make any purchase, redemption or other acquisition
of, any of the Membership Interests, other than as provided in the
Transaction Documents.  The Issuer will not redeem any Preferred Membership
Interests if any such redemption would result in the occurrence of an
Amortization Event with respect to any Series of Investor Notes Outstanding.

S.Name; Principal Office.

                 The Issuer will neither (a) change the location of its chief
executive office or principal place of business (within the meaning of the
applicable UCC) without sixty (60) days' prior written notice to the
Indenture Trustee nor (b) change its name without prior written notice to the
Indenture Trustee sufficient to allow the Indenture Trustee to execute all
filings prepared by the Issuer (including filings of financing statements on
form UCC-1) and recordings necessary to maintain the perfection of the
interest of the Indenture Trustee on behalf of the Noteholders in the
Collateral pursuant to this Indenture.  In the event that the Issuer desires
to so change its office or change its name, the Issuer will make any required
filings and prior to actually changing its office or its name the Issuer will
deliver to the Indenture Trustee (i) an Officer's Certificate and (except
with respect to a change of the location of the Issuer's chief executive
office or principal place of business to a new location in the same county)

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an Opinion of Counsel confirming that all required filings have been made to
continue the perfected interest of the Indenture Trustee on behalf of the
Noteholders in the Collateral in respect of the new office or new name of the
Issuer and (ii) copies of all such required filings with the filing
information duly noted thereon by the office in which such filings were made.

T.Organizational Documents.

                 The Issuer will not amend the LLC Agreement unless, prior to
such amendment, each Rating Agency confirms that after such amendment the
Rating Agency  Condition will be met.

U.Investments.

                 The Issuer will not make, incur, or suffer to exist any
loan, advance, extension of credit or other investment in any Person other
than in accordance with the Transaction Documents and, in addition, without
limiting the generality of the foregoing, the Issuer will not cause the
Indenture Trustee to make any Permitted Investments on the Issuer's behalf
that would have the effect of causing the Issuer to be an "investment
company" within the meaning of the Investment Company Act.

V.No Other Agreements.

                 The Issuer will not enter into or be a party to any
agreement or instrument other than any Transaction Document or documents and
agreements incidental thereto.

W.Other Business.

                 The Issuer will not engage in any business or enterprise or
enter into any transaction other than acquiring the SUBI Certificates
pursuant to the Transfer Agreement, funding such acquisitions through the
issuance and sale of the Investor Notes, issuing the Membership Interests
pursuant to the LLC Agreement, incurring and paying ordinary course operating
expenses and other activities related to or incidental to any of the
foregoing.

X.Maintenance of Separate Existence.

                 The Issuer will do all things necessary to continue to be
readily distinguishable from VMS, ARAC and the Affiliates of each of the
foregoing and maintain its existence separate and apart from that of VMS,
ARAC and the Affiliates of each of the foregoing including, without
limitation:

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                 a.       practicing and adhering to organizational
         formalities, such as maintaining appropriate books and records;

                 b.       observing all organizational formalities in
         connection with all dealings between itself and VMS, ARAC and the
         Affiliates of each of the foregoing or any other unaffiliated entity;

                 c.       observing all procedures required by its certificate
         of formation and the LLC Agreement and the laws of the State of
         Delaware;

                 d.       acting solely in its name and through its duly
         authorized officers or agents in the conduct of its businesses;

                 e.       managing its business and affairs by or under the
         direction of the Managers;

                 f.       ensuring that its Authorized Officers duly authorize
         all of its actions;

                 g.       ensuring the receipt of proper authorization, when
         necessary, in accordance with the terms of the LLC Agreement for its
         actions;

                 h.       owning or leasing (including through shared
         arrangements with Affiliates) all office furniture and equipment
         necessary to operate its business;

                 i.       maintaining at least one Manager who is an
         Independent Manager;

                 j.       not (A) having or incurring any indebtedness to VMS,
         ARAC or any Affiliates of VMS or ARAC; (B) guaranteeing or otherwise
         becoming liable for any obligations of VMS, ARAC or any Affiliates of
         VMS or ARAC; (C) having obligations guaranteed by VMS, ARAC or any
         Affiliates of VMS or ARAC; (D) holding itself out as responsible for
         debts of VMS, ARAC or any Affiliates of VMS or ARAC or for decisions
         or actions with respect to the affairs of VMS, ARAC or any Affiliates
         of VMS or ARAC;  (E) operating or purporting to operate as an
         integrated, single economic unit with respect to VMS or ARAC or any
         Affiliates of VMS or ARAC or any other unaffiliated entity; (F)
         seeking to obtain credit or incur any obligation to any third party
         based upon the assets of VMS or ARAC or any Affiliates of VMS or ARAC
         or any other unaffiliated entity; (G) induce any such third party to
         reasonably rely on the creditworthiness of VMS or ARAC or any
         Affiliates of VMS or ARAC or any other unaffiliated entity; and (H)

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         being directly or indirectly named as a direct or contingent
         beneficiary or loss payee on any insurance policy of VMS, ARAC or any
         Affiliates of VMS or ARAC other than as required by the Transaction
         Documents with respect to insurance on the Leased Vehicles;

                 k.       other than as provided in the Transaction Documents,
         maintaining its deposit and other bank accounts and all of its assets
         separate from those of any other Person;

                 l.       maintaining its financial records separate and apart
         from those of any other Person;

                 m.       not suggesting in any way, within its financial
         statements, that its assets are available to pay the claims of
         creditors of VMS, ARAC, any Affiliates of VMS or ARAC or any other
         affiliated or unaffiliated entity;

                 n.       compensating all its employees, officers,
         consultants and agents for services provided to it by such Persons
         out of its own funds or reimbursing any of its Affiliates in respect
         of amounts paid by such Affiliates for such services;

                 o.       maintaining office space separate and apart from
         that of VMS or ARAC or any Affiliates of VMS or ARAC (even if such
         office space is subleased from or is on or near premises occupied by
         VMS, ARAC or any Affiliates of VMS or ARAC) and a telephone number
         separate and apart from that of VMS or ARAC or any Affiliates of VMS
         or ARAC;

                 p.       conducting all oral and written communications,
         including, without limitation, letters, invoices, purchase orders,
         contracts, statements, and applications solely in its own name;

                 q.       having separate stationery from VMS, ARAC, any
         Affiliates of VMS or ARAC or any other unaffiliated entity;

                 r.       accounting for and managing all of its liabilities
         separately from those of VMS, ARAC or any Affiliates of VMS or ARAC;

                 s.       allocating, on an arm's length basis, all shared
         corporate operating services, leases and expenses, including, without
         limitation, those associated with the services of shared consultants
         and agents and shared computer and other office equipment and
         software; and otherwise maintaining an arm's-length relationship with
         each of VMS, ARAC, any Affiliates of VMS or ARAC or any other
         unaffiliated entity;

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<PAGE>

                 t.       refraining from filing or otherwise initiating or
         supporting the filing of a motion in any bankruptcy or other
         insolvency proceeding involving VMS, ARAC or any Affiliate of VMS or
         ARAC to substantively consolidate VMS, ARAC or any Affiliate of VMS
         or ARAC with the Issuer;

                 u.       remaining solvent; and

                 v.       conducting all of its business (whether written or
         oral) solely in its own name so as not to mislead others as to the
         identity of each of the Issuer, SPV, VMS, ARAC and any Affiliates of
         VMS or ARAC.

Y.Use of Proceeds of Investor Notes.

                 The Issuer shall use the net proceeds of each Series of
Investor Notes in accordance with the provisions of the related Indenture
Supplement.

                 Section Z.  No ERISA Plan.

                 The Issuer will not establish or maintain or contribute to
any Pension Plan that is covered by Title IV of ERISA.

                                 ARTICLE VIII.

                                   REMEDIES

A.Events of Default.

                 "Event of Default", wherever used herein, with respect to
any Series of Investor Notes, means any one of the following events (whatever
the reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

                 1.  default in the payment of any interest on any Investor
         Note of any Series when the same becomes due and payable, and such
         default shall continue for a period of five Business Days;

                 2.  default in the payment of the principal of any Investor
         Note of any Series on the Series Termination Date with respect to
         such Series;

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<PAGE>

                 3.  default in the observance or performance of any covenant
         or agreement of the Issuer made in this Indenture (other than a
         covenant or agreement, a default in the observance or performance of
         which is elsewhere in this Section specifically dealt with) which
         default materially and adversely affects the rights of the Investor
         Noteholders of such Series, and which default shall continue or not
         be cured for a period of 30 days (or for such longer period, not in
         excess of 60 days, as may be reasonably necessary to remedy such
         default; provided that such default is capable of remedy within 60
         days or less and the Issuer delivers an Officer's Certificate to the
         Indenture Trustee to the effect that the Issuer has commenced, or
         will promptly commence and diligently pursue, all reasonable efforts
         to remedy such default) after there shall have been given, by
         registered or certified mail, to the Issuer by the Indenture Trustee
         or to the Issuer and the Indenture Trustee by Investor Noteholders of
         such Series holding Investor Notes evidencing at least 25% of the
         Invested Amount of each Class of Investor Notes of such Series, a
         written notice specifying such default and requiring it to be
         remedied and stating that such notice is a "Notice of Default"
         hereunder;

                 4.  the Issuer at any time receives a final determination
         that it will be treated as an association taxable as a corporation
         for federal income tax purposes;

                 5.  the Securities and Exchange Commission or other
         regulatory body having jurisdiction reaches a final determination
         that the Issuer is an "investment company" within the meaning of the
         Investment Company Act; or

                 6.  an Insolvency Event shall have occurred with respect to
         the Issuer.

B.Acceleration of Maturity; Rescission and Annulment.

                 If an Event of Default referred to in clause (f) of Section
9.2 has occurred, the unpaid principal amount of all Series of  Investor
Notes, together with interest accrued but unpaid thereon, and all other
amounts due to the Investor Noteholders under this Indenture, shall
immediately and without further act become due and payable.  If an Event of
Default referred to in clause (a),  (b), (d) or (e) of Section 9.1 has
occurred, then the Indenture Trustee or the Holders of a Majority in Interest
of each Series of Outstanding Investor Notes may declare all of the Investor
Notes to be immediately due and payable, by a notice in writing to the Issuer
(and to the Indenture Trustee if given by the Investor Noteholders), and upon
any such declaration the unpaid principal amount of the Investor Notes,
together with accrued and unpaid interest thereon through the date of

                                     -45-

<PAGE>

acceleration, shall become immediately due and payable. If an Event of
Default referred to in clause (c) of Section 9.1 shall occur and be
continuing with respect to any Series of Investor Notes, then and in every
such case the Indenture Trustee or Holders of a Majority in Interest of such
Series of Investor Notes may declare all the Investor Notes of such Series to
be immediately due and payable, by a notice in writing to the Issuer (and to
the Indenture Trustee if given by the Investor Noteholders), and upon any
such declaration the unpaid principal amount of such Investor Notes, together
with accrued and unpaid interest thereon through the date of acceleration,
shall become immediately due and payable.

                 At any time after such declaration of acceleration of
maturity has been made with respect to the Investor Notes (or a particular
Series of Investor Notes) and before a judgment or decree for payment of the
money due has been obtained by the Indenture Trustee as hereinafter in this
Article 9, provided, the Holders of a Majority in Interest of each Series of
Outstanding Investor Notes (or, in the case of the acceleration of a
particular Series of Investor Notes, the Holders of a Majority in Interest of
the Investor Notes of such Series), by written notice to the Issuer and the
Indenture Trustee, may rescind and annul such declaration and its
consequences; provided, that, no such rescission shall affect any subsequent
default or impair any right consequent thereto.

C.Collection of Indebtedness and Suits for Enforcement by the Indenture
Trustee.

                 1.  The Issuer covenants that if (i) default is made in the
payment of any interest on any Investor Note when the same becomes due and
payable, and such default continues for a period of five Business Days or
(ii) default is made in the payment of the principal of any Investor Note
when the same becomes due and payable, by acceleration or at stated maturity,
the Issuer will, upon demand of the Indenture Trustee, pay to it, for the
benefit of the Holders of such Investor Notes, the whole amount then due and
payable on such Investor Notes for principal and interest, with interest upon
the overdue principal, and, to the extent payment at such rate of interest
shall be legally enforceable, upon overdue installments of interest, at the
Note Rate borne by the Investor Notes, and in addition thereto such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances
of the Indenture Trustee and its agents and counsel.

                 2.       In case the Issuer shall fail forthwith to pay such
amounts upon such demand, the Indenture Trustee, in its own name and as
trustee of an express trust, may institute a proceeding for the collection of
the sums so due and unpaid, and may prosecute such proceeding to judgment or
final decree, and may enforce the same against the Issuer or other obligor
upon such Investor Notes and collect in the manner provided by law out of the

                                     -46-

<PAGE>

property of the Issuer or other obligor upon such Investor Notes, wherever
situated, the moneys adjudged or decreed to be payable.

                 3.  If an Event of Default occurs and is continuing, the
Indenture Trustee may, as more particularly provided in Section 9.4, in its
discretion, proceed to protect and enforce its rights and the rights of the
Investor Noteholders, by such appropriate proceedings as the Indenture
Trustee shall deem most effective to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy or legal or equitable right vested in the
Indenture Trustee by this Indenture or by law.

                 4.  In case there shall be pending, relative to the Issuer
or any other obligor upon the Investor Notes or any Person having or claiming
an ownership interest in the Issuer Assets, proceedings under the Bankruptcy
Code or any other applicable Federal or state bankruptcy, insolvency or other
similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor or Person, or in the case of any other comparable judicial
proceedings relative to the Issuer or other obligor upon the Investor Notes,
or to the creditors or property of the Issuer or such other obligor, the
Indenture Trustee, irrespective of whether the principal of any Investor
Notes shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Indenture Trustee shall have made
any demand pursuant to the provisions of this Section, shall be entitled and
empowered, by intervention in such proceedings or otherwise:

                 a.  to file and prove a claim or claims for the whole amount
         of principal and interest owing and unpaid in respect of the Investor
         Notes and to file such other papers or documents as may be necessary
         or advisable in order to have the claims of the Indenture Trustee
         (including any claim for reasonable compensation to the Indenture
         Trustee and each predecessor Indenture Trustee, and their respective
         agents, attorneys and counsel, and for reimbursement of all expenses
         and liabilities incurred, and all advances made, by the Indenture
         Trustee and each predecessor Indenture Trustee, except as a result of
         negligence, bad faith or willful misconduct) and of the Investor
         Noteholders allowed in such proceedings;

                 b.  unless prohibited by applicable law and regulations, to
         vote on behalf of the Holders of the Investor Notes in any election
         of a trustee, a standby trustee or person performing similar
         functions in any such proceedings;

                                     -47-

<PAGE>

                 c.  to collect and receive any moneys or other property
         payable or deliverable on any such claims and to distribute all
         amounts received with respect to the claims of the Investor
         Noteholders and of the Indenture Trustee on their behalf; and

                 d.  to file such proofs of claim and other papers or
         documents as may be necessary or advisable in order to have the
         claims of the Indenture Trustee or the Holders of the Investor Notes
         allowed in any judicial proceedings relative to the Issuer, its
         creditors and its property;

and any trustee, receiver, liquidator, custodian or other similar official in
any such proceeding is hereby authorized by each of such Investor Noteholders
to make payments to the Indenture Trustee, and, in the event that the
Indenture Trustee shall consent to the making of payments directly to such
Investor Noteholders, to pay to the Indenture Trustee such amounts as shall
be sufficient to cover reasonable compensation to the Indenture Trustee, each
predecessor Indenture Trustee and their respective agents, attorneys and
counsel, and all other expenses and liabilities incurred, and all advances
made, by the Indenture Trustee and each predecessor Indenture Trustee except
as a result of negligence or bad faith.

                 5.       Nothing herein contained shall be deemed to
authorize the Indenture Trustee to authorize or consent to or vote for or
accept or adopt on behalf of any Investor Noteholder any plan of
reorganization, arrangement, adjustment or composition affecting the Investor
Notes or the rights of any Holder thereof or to authorize the Indenture
Trustee to vote in respect of the claim of any Investor Noteholder in any
such proceeding except, as aforesaid, to vote for the election of a trustee
in bankruptcy or similar person.

                 6.       All rights of action and of asserting claims under
this Indenture, or under any of the Investor Notes, may be enforced by the
Indenture Trustee without the possession of any of the Investor Notes or the
production thereof in any trial or other proceedings relative thereto, and
any such action or proceedings instituted by the Indenture Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment, subject to the payment of the expenses, disbursements and
compensation of the Indenture Trustee, each predecessor Indenture Trustee and
their respective agents and attorneys, shall be for the ratable benefit of
the Holders of the Investor Notes.

                 7.       In any proceedings brought by the Indenture Trustee
(and also any proceedings involving the interpretation of any provision of
this Indenture to which the Indenture Trustee shall be a party), the
Indenture Trustee shall be held to represent all the Holders of the Investor

                                     -48-

<PAGE>

Notes, and it shall not be necessary to make any Investor Noteholder a party
to any such proceedings.

D.Remedies; Priorities.

                 1.  If an Event of Default shall have occurred and be
continuing with respect to any Series of Outstanding Investor Notes and such
Series of Investor Notes has been accelerated under Section 9.4, the
Indenture Trustee may institute proceedings to enforce the obligations of the
Issuer hereunder in its own name and as trustee of an express trust for the
collection of all amounts then payable on the Investor Notes of such Series
or under this Indenture with respect thereto, whether by declaration or
otherwise, enforce any judgment obtained, and collect from the Issuer and any
other obligor upon such Investor Notes moneys adjudged due.

                 2.  If an Event of Default shall have occurred and be
continuing with respect to all Series of Outstanding Investor Notes and all
Series of Outstanding Investor Notes have been accelerated under Section 9.2,
the Indenture Trustee (subject to Section 9.5) may do one or more of the
following:

                 a.       institute proceedings from time to time for the
         complete or partial foreclosure of this Indenture with respect to the
         Issuer Assets;

                 b.       exercise any remedies of a secured party under the
         UCC and take any other appropriate action to protect and enforce the
         rights and remedies of the Indenture Trustee and the Holders of the
         Investor Notes; and

                 c.       in the case of an Event of Default referred to in
         clause (a) or (b) of Section 9.1, sell the Issuer Assets or any
         portion thereof or rights or interest therein, at one or more public
         or private sales called and conducted in any manner permitted by law;

provided that the Indenture Trustee may not sell or otherwise liquidate the
Issuer Assets following an Event of Default referred to in clause (a) or (b)
of Section 9.1, unless (A) the Holders of Investor Notes representing 100% of
the Aggregate Invested Amount consent thereto, (B) the proceeds of such sale
or liquidation distributable to the Investor Noteholders are sufficient to
discharge in full all amounts then due and unpaid upon the Investor Notes for
principal and interest, or (C) (1) the Indenture Trustee determines that the
Issuer Assets will not continue to provide sufficient funds for the payment
of principal of and interest on the Investor Notes as they would have become
due if the Investor Notes had not been declared due and payable and (2) the
Indenture Trustee obtains the consent of a Majority in Interest of the
Holders of each Series of Outstanding Investor Notes.  In determining such

                                     -49-

<PAGE>

sufficiency or insufficiency with respect to clause (B) and (C), the
Indenture Trustee may, but need not, obtain and rely upon an opinion of an
Independent investment banking or accounting firm of national reputation as
to the feasibility of such proposed action and as to the sufficiency of the
Issuer Assets for such purpose.

                 3.       If the Indenture Trustee collects any money or
property pursuant to this Article 9, such money or property shall be held by
the Indenture Trustee as additional collateral hereunder and the Indenture
Trustee shall pay out such money or property in the following order:

                 FIRST:  to the Indenture Trustee for amounts due under
Section 10.6; and

                 SECOND:  to the Collection Account for distribution in
         accordance with the provisions of Article 5.

E.Optional Preservation of the Issuer Assets.

                 If the Investor Notes of each Series Outstanding have been
declared to be due and payable under Section 9.2 following an Event of
Default and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may, but need not, elect to maintain
possession of the Issuer Assets.  It is the desire of the parties hereto and
the Investor Noteholders that there be at all times sufficient funds for the
payment of principal of and interest on the Investor Notes, and the Indenture
Trustee shall take such desire into account when determining whether to
maintain possession of the Issuer Assets.  In determining whether to maintain
possession of the Issuer Assets, the Indenture Trustee may, but need not,
obtain and rely upon an opinion of an Independent investment banking or
accounting firm of national reputation as to the feasibility of such proposed
action and as to the sufficiency of the Issuer Assets for such purpose.
Nothing contained in this Section 9.5 shall be construed to require the
Indenture Trustee to preserve the Issuer Assets securing the Issuer
Obligations if prohibited by applicable law or if the Indenture Trustee is
authorized, directed or permitted to liquidate the Issuer Assets pursuant to
Section 9.4(b).

F.Performance and Enforcement of Certain Obligations.

                 1.  Promptly following a request from the Indenture Trustee
to do so and at the Administrator's expense, the Issuer agrees to take all
such lawful action as the Indenture Trustee may request to compel or secure
the performance and observance by SPV, the Origination Trust and the
Servicer, as applicable, of each of their respective obligations to the
Issuer under or in connection with the Transfer Agreement and the Origination
Trust Documents, respectively, in accordance with their respective terms, and

                                     -50-

<PAGE>

to exercise any and all rights, remedies, powers and privileges lawfully
available to the Issuer under or in connection with the Transaction Documents
to the extent and in the manner directed by the Indenture Trustee, including
the transmission of notices of default on the part of SPV, the Origination
Trust or the Servicer thereunder and the institution of legal or
administrative actions or proceedings to compel or secure performance by SPV,
the Origination Trust or the Servicer of each of their respective obligations
thereunder.

                 2.  If an Event of Default has occurred and is continuing
with respect to any Series of Outstanding Investor Notes, the Indenture
Trustee may, and, at the direction (which direction shall be in writing) of
the Holders of a Majority in Interest of such Series of Outstanding Investor
Notes (or, if an Event of Default with respect to more than one Series of
Investor Notes has occurred, a Majority in Interest of each Series of
Investor Notes with respect to which an Event of Default shall have occurred)
shall exercise all rights, remedies, powers, privileges and claims of the
Issuer against SPV, the Origination Trust or the Servicer under or in
connection with the Transfer Agreement and the Origination Trust Documents,
including the right or power to take any action to compel or secure
performance or observance by SPV, the Origination Trust or the Servicer of
each of their respective obligations to the Issuer thereunder and to give any
consent, request, notice, direction, approval, extension or waiver under the
Transfer Agreement and the Origination Trust Documents, and any right of the
Issuer to take such action shall be suspended; provided that, if an Event of
Default has occurred and is continuing with respect to less than all Series
of Outstanding Investor Notes, the Indenture Trustee may not take any action
hereunder that is detrimental to the rights of the Holders of the Investor
Notes with respect to which no Event of Default shall have occurred.

G.Limitation on Suits.

                 No Holder of any Investor Note shall have any right to
institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:

                 1.  such Holder has previously given written notice to the
         Indenture Trustee of a continuing Event of Default;

                 2.  Holders of each Series of Outstanding Investor Notes
         holding Investor Notes evidencing at least 25% of each Class of
         Investor Notes of such Series have made written request to the
         Indenture Trustee to institute such proceeding in respect of such
         Event of Default in its own name as the Indenture Trustee hereunder;

                                     -51-

<PAGE>

                 3.  such Holder or Holders have offered to the Indenture
         Trustee indemnity reasonably satisfactory to it against the costs,
         expenses and liabilities to be incurred in complying with such
         request;

                 4.  the Indenture Trustee for 60 days after its receipt of
         such notice, request and offer of indemnity has failed to institute
         such proceedings; and

                 5.  no direction inconsistent with such written request has
         been given to the Indenture Trustee during such 60-day period by the
         Holders of a Majority in Interest of each Series of Outstanding
         Investor Notes;

it being understood and intended that no one or more Holders of the Investor
Notes shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb or prejudice
the rights of any other Holders of the Investor Notes or to obtain or to seek
to obtain priority or preference over any other Holders or to enforce any
right under this Indenture, except in the manner herein provided.

                 In the event the Indenture Trustee shall receive conflicting
or inconsistent requests and indemnity from two or more groups of Holders of
Investor Notes, each representing less than a Majority in Interest of each
Series of Outstanding Investor Notes, the Indenture Trustee shall act at the
direction of the group of Holders of Investor Notes with the greater amount
of Investor Notes, however, should the Indenture Trustee receive conflicting
or inconsistent requests on indemnity from two or more groups of Holders with
an equal amount of Investor Notes the Indenture Trustee in its sole
discretion may determine what action, if any, shall be taken, notwithstanding
any other provisions of this Indenture.

H.Unconditional Rights of Investor Noteholders to Receive Principal and
Interest.  Notwithstanding any other provisions in this Indenture, the Holder
of any Investor Note shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest, if any,
on such Investor Note on or after the respective due dates thereof expressed
in such Investor Note or in this Indenture and to institute suit for the
enforcement of any such payment, and such right shall not be impaired without
the consent of such Holder.

I.Restoration of Rights and Remedies.

                 If the Indenture Trustee or any Investor Noteholder has
instituted any Proceeding to enforce any right or remedy under this Indenture
and such Proceeding has been discontinued or abandoned for any reason or has
been determined adversely to the Indenture Trustee or to such Investor

                                     -52-

<PAGE>

Noteholder, then and in every such case the Issuer, the Indenture Trustee and
the Investor Noteholders shall, subject to any determination in such
Proceeding, be restored severally and respectively to their former positions
hereunder, and thereafter all rights and remedies of the Indenture Trustee
and the Investor Noteholders shall continue as though no such Proceeding had
been instituted.

J.Rights and Remedies Cumulative.

                 No right or remedy herein conferred upon or reserved to the
Indenture Trustee or to the Investor Noteholders is intended to be exclusive
of any other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise.  The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any
other appropriate right or remedy.

K.Delay or Omission Not a Waiver.

                 No delay or omission of the Indenture Trustee or any Holder
of any Investor Note to exercise any right or remedy accruing upon any
Default or Event of Default shall impair any such right or remedy or
constitute a waiver of any such Default or Event of Default or an
acquiescence therein.  Every right and remedy given by this Article 9 or by
law to the Indenture Trustee or to the Investor Noteholders may be exercised
from time to time, and as often as may be deemed expedient, by the Indenture
Trustee or by the  Investor Noteholders, as the case may be.

L.Control by Investor Noteholders.

                 The Holders of a Majority in Interest of each Series of
Outstanding Investor Notes shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the
Indenture Trustee with respect to the Investor Notes or exercising any trust
or power conferred on the Indenture Trustee; provided that

                 1.  such direction shall not be in conflict with any rule of
         law or with this Indenture;

                 2.  if an Event of Default is with respect to less than all
         Series of Outstanding Investor Notes, then the Indenture Trustee's
         rights and remedies shall be limited to the rights and remedies
         pertaining only to those Series of Investor Notes with respect to
         which such Event of Default has occurred and the Indenture Trustee
         shall exercise such rights and remedies at the direction of the

                                     -53-

<PAGE>

         Holders of a Majority in Interest of all such Series of Investor
         Notes;

                 3.  subject to the express terms of Section 9.4, any
         direction to the Indenture Trustee to sell or liquidate the Issuer
         Assets shall be by the Holders of Investor Notes representing not
         less than 100% of the Aggregate Invested Amount;

                 4.  if the conditions set forth in Section 9.5 have been
         satisfied and the Indenture Trustee elects to retain the Issuer
         Assets pursuant to such Section, then any direction to the Indenture
         Trustee by Holders of Investor Notes representing less than 100% of
         the Aggregate Invested Amount to sell or liquidate the Issuer Assets
         shall be of no force and effect;

                 5.  the Indenture Trustee may take any other action deemed
         proper by the Indenture Trustee that is not inconsistent with such
         direction; and

                 6.  such direction shall be in writing;

provided, further, that, subject to Section 10.1, the Indenture Trustee need
not take any action that it determines might involve it in liability or might
materially adversely affect the rights of any Investor Noteholders not
consenting to such action.

M.Waiver of Past Defaults.

                 Prior to the declaration of the acceleration of the maturity
of the Investor Notes of any Series as provided in Section 9.2, the Holders
of the Investor Notes of not less than a Majority in Interest of such Series
of Outstanding Investor Notes may, on behalf of all such Holders, waive any
past Default or Event of Default and its consequences except a Default (a) in
payment of principal of or interest on any of the Investor Notes or (b) in
respect of a covenant or provision hereof which cannot be modified or amended
without the consent of the Holder of each Investor Note.  In the case of any
such waiver, the Issuer, the Indenture Trustee and the Holders of the
Investor Notes of such Outstanding Series shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereto.

                 Upon any such waiver, such Default shall cease to exist and
be deemed to have been cured and not to have occurred, and any Event of
Default arising therefrom shall be deemed to have been cured and not to have
occurred, for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any

                                     -54-

<PAGE>

right consequent thereto.  The Issuer shall give prompt written notice of any
waiver to the Rating Agencies.

N.Undertaking for Costs.  All parties to this Indenture agree, and each
Holder of any Investor Note by such Holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Indenture, or in
any suit against the Indenture Trustee for any action taken, suffered or
omitted by it as the Indenture Trustee, the filing by any party litigant in
such Proceeding of an undertaking to pay the costs of such Proceeding, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such Proceeding,
having due regard to the merits and good faith of the claims or defenses made
by such party litigant; but the provisions of this Section shall not apply to
(a) any suit instituted by the Indenture Trustee, (b) any suit instituted by
any Investor Noteholder or group of Investor Noteholders, in each case
holding in the aggregate more than 10% of the Invested Amount of any Series
of Investor Notes, or (c) any suit instituted by any Investor Noteholder for
the enforcement of the payment of principal of or interest on any Investor
Note on or after the respective due dates expressed in such Investor Note and
in this Indenture.

O.Waiver of Stay or Extension Laws.

                 The Issuer covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead or in any manner
whatsoever, claim or take the benefit or advantage of, any stay or extension
law wherever enacted, now or at any time hereafter in force, that may affect
the covenants or the performance of this Indenture; and the Issuer (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Indenture Trustee,
but will suffer and permit the execution of every such power as though no
such law had been enacted.

P.Action on Investor Notes.

                 The Indenture Trustee's right to seek and recover judgment
on the Investor Notes or under this Indenture shall not be affected by the
seeking, obtaining or application of any other relief under or with respect
to this Indenture.  Neither the lien of this Indenture nor any rights or
remedies of the Indenture Trustee or the Investor Noteholders shall be
impaired by the recovery of any judgment by the Indenture Trustee against the
Issuer or by the levy of any execution under such judgment upon any portion
of the Issuer Assets or upon any of the assets of the Issuer.

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                                  ARTICLE IX.

                             THE INDENTURE TRUSTEE

A.Duties of the Indenture Trustee.

                 1.       If an Amortization Event or Event of Default has
occurred and is continuing, the Indenture Trustee shall exercise such of the
rights and powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise, as a prudent man would exercise or use
under the circumstances in the conduct of his own affairs.

                 2.       The Indenture Trustee, upon receipt of all
resolutions, certificates, statements, opinions, reports, documents, orders
or other instruments furnished to the Indenture Trustee which are
specifically required to be furnished pursuant to any provision of this
Indenture or any of the other Transaction Documents, shall examine them to
determine whether they substantially conform to the requirements of this
Indenture or such other Transaction Document, as the case may be; provided,
however, that the Indenture Trustee shall not be responsible for the content
of any resolution, certificate, statement, opinion, report, document, order
or other instrument furnished by the Servicer, the Administrator or the
Issuer hereunder.

                 3.       Subject to subsection 10.1(a), no provision of this
Indenture shall be construed to relieve the Indenture Trustee from liability
for its own negligent action, its own negligent failure to act or its own bad
faith or wilful misconduct; provided, however, that:

                 a.  the Indenture Trustee shall not be liable for an error
         of judgment made in good faith by a Responsible Officer of the
         Indenture Trustee, unless it shall be proved that the Indenture
         Trustee was negligent in ascertaining the pertinent facts nor shall
         the Indenture Trustee be liable with respect to any action it takes
         or omits to take in good faith in accordance with this Indenture or
         in accordance with a direction received by it pursuant to
Section
         9.12            ;

                 b.  the Indenture Trustee shall not be charged with
         knowledge of any Event of Default unless a Responsible Officer of the
         Indenture Trustee obtains actual knowledge thereof or receives
         written notice thereof;

                 c.  the Indenture Trustee shall not be charged with
         knowledge of any failure by any Person to comply with its obligations
         under the Transaction Documents unless a Responsible Officer of the

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<PAGE>

         Indenture Trustee obtains actual knowledge of such failure or
         receives written notice thereof;

                 d.  prior to the occurrence of an Amortization Event or an
         Event of Default, and after the curing of all such Amortization
         Events or Events of Default which may have occurred, the duties and
         obligations of the Indenture Trustee shall be determined solely by
         the express provisions of this Indenture, the Indenture Trustee shall
         be obligated to perform only such duties and obligations as are
         specifically set forth in this Indenture and no implied covenants or
         obligations shall be read into this Indenture against the Indenture
         Trustee;

                 e.  anything in this Indenture to the contrary
         notwithstanding, in no event shall the Indenture Trustee be liable
         for special, indirect or consequential loss or damage of any kind
         whatsoever (including but not limited to lost profits), even if the
         Indenture Trustee has been advised of the likelihood of such loss or
         damage and regardless of the form of action; and

                 f.  subject to the other provisions of this Indenture and
         without limiting the generality of this Section 10.01, the Indenture
         Trustee shall have no duty (A) to record, file, or deposit this
         Indenture, the Transaction Documents or any agreement referred to
         herein or therein or any financing statement or continuation
         statement evidencing a security interest, or to maintain any such
         recording or filing or depositing or to rerecord, refile, or
         redeposit any thereof, (B) to insure the Issuer Assets and (C) to pay
         or discharge any tax, assessment, or other governmental charge or any
         lien or encumbrance of any kind owing with respect to assessed or
         levied against, any part of the Collateral other than from funds
         available in the Collection Account.

                 4.       The Indenture Trustee shall not be required to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if there is reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it, and none of the provisions contained in this
Indenture shall in any event require the Indenture Trustee to perform, or be
responsible for the manner of performance of, any of the obligations of any
Person under any of the Transaction Documents.

                 5.       Except for actions expressly authorized by this
Indenture, the Indenture Trustee shall take no action reasonably likely to
impair the security interests created hereunder in any of the Issuer Assets

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<PAGE>

now existing or hereafter created or to impair the value of any of the Issuer
Assets now existing or hereafter created.

                 6.       In the event that the Paying Agent or the Transfer
Agent and Registrar shall fail to perform any obligation, duty or agreement
in the manner or on the day required to be performed by the Paying Agent or
the Transfer Agent and Registrar, as the case may be, under this Indenture,
the Indenture Trustee shall be obligated promptly to perform such obligation,
duty or agreement in the manner so required.

B.Rights of the Indenture Trustee.

                 Except as otherwise provided by Section 10.1:

                 1.       The Indenture Trustee may conclusively rely and
         shall be fully protected in acting or refraining from acting based
         upon any document believed by it to be genuine and to have been
         signed by or presented by the proper person.

                 2.       The Indenture Trustee may consult with counsel of
         its selection and the written advice of such counsel or any Opinion
         of Counsel shall be full and complete authorization and protection
         from liability in respect of any action taken, suffered or omitted by
         it hereunder in good faith and in reliance thereon.

                 3.       The Indenture Trustee may act through agents,
         custodians and nominees and shall not be liable for any misconduct or
         negligence on the part of, or for the supervision of, any such agent,
         custodian or nominee so long as such agent, custodian or nominee is
         appointed with due care.

                 4.       The Indenture Trustee shall not be liable for any
         action it takes or omits to take in good faith which it believes to
         be authorized or within its rights or powers conferred upon it by the
         Indenture; provided, that the Indenture Trustee's conduct does not
         constitute wilful misconduct, negligence or bad faith.
 .
                 5.       Prior to the occurrence of an Event of Default and
         after the curing of all Events of Default that may have occurred, the
         Indenture Trustee shall be under no obligation to institute, conduct
         or defend any litigation hereunder or in relation hereto and shall
         not be bound to make any investigation into the facts or matters
         stated in any resolution, certificate, statement, instrument,
         opinion, report, notice, request, consent, order, approval, bond, or
         other paper or document, unless requested in writing to do so by
         Holders of the Investor Notes evidencing not less than 25% of the
         Invested Amount of any Series of Investor Notes; provided, however,

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<PAGE>

         that if the payment within a reasonable time to the Indenture Trustee
         of the costs, expenses, or liabilities likely to be incurred by it in
         instituting, conducting or defending any litigation hereunder or in
         relation hereto or in the making of such investigation shall be, in
         the opinion of the Indenture Trustee, not reasonably assured to the
         Indenture Trustee by the security afforded to it by the terms of this
         Indenture, the Indenture Trustee may require reasonable indemnity
         against such cost, expense, or liability or payment of such expenses
         as a condition precedent to so proceeding.  The reasonable expense of
         every such examination shall be paid by the Issuer or by the
         Administrator at the direction of the Issuer or, if paid by the
         Indenture Trustee, shall be reimbursed by the Issuer or by the
         Administrator at the direction of the Issuer upon demand.

                 6.       The Indenture Trustee shall not be liable for any
         losses or liquidation penalties in connection with Permitted
         Investments, unless such losses or liquidation penalties were
         incurred through the Indenture Trustee's own willful misconduct,
         negligence or bad faith.

                 7.       The Indenture Trustee shall not be liable for the
         acts or omissions of any successor to the Indenture Trustee so long
         as such acts or omissions were not the result of the negligence, bad
         faith or willful misconduct of Chase.

                 8.       The right of the Indenture Trustee to perform any
         discretionary act enumerated in this Indenture shall not be construed
         as a duty, and the Indenture Trustee shall not be answerable for
         other than its negligence or wilful misconduct in the performance of
         such act.

                 9.       The Indenture Trustee shall not be required to give
         any bond or surety in respect of the execution of the Trust created
         hereby or the powers granted hereunder.

C.Indenture Trustee's Disclaimer.

                 The Indenture Trustee assumes no responsibility for the
correctness of the recitals contained herein and in the Investor Notes (other
than the certificate of authentication on the Investor Notes).  Except as set
forth in Section 10.11, the Indenture Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Investor Notes (other
than the certificate of authentication on the Investor Notes) or of any of
the Issuer Assets.  The Indenture Trustee shall not be accountable for the
use or application by the Issuer of any of the Investor Notes or of the
proceeds of such Investor Notes, or for the use or application of any funds
paid to the Issuer in respect of the Issuer Assets.

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<PAGE>

D.Indenture Trustee May Own Investor Notes.

                 The Indenture Trustee in its individual or any other
capacity may become the owner or pledgee of Investor Notes with the same
rights as it would have if it were not the Indenture Trustee.

E.Notice of Defaults.

                 If a Default or an Event of Default or a Potential
Amortization Event or an Amortization Event occurs and is continuing and if
it is either actually known or written notice of the existence thereof has
been delivered to a Responsible Officer of the Indenture Trustee, the
Indenture Trustee shall mail to each Noteholder notice thereof within 45 days
after such knowledge or notice occurs.  Except in the case of a Default in
accordance with the provisions of Section 313(c) of the TIA in payment of
principal of or interest on any Investor Note (including payments pursuant to
the mandatory redemption provisions of such Investor Note), the Indenture
Trustee may withhold the notice if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice is
in the interest of the Investor Noteholders.

F.Compensation.

                 The Issuer shall cause the Administrator pursuant to the
Administration Agreement to pay to the Indenture Trustee from time to time
reasonable compensation for its services.  The Indenture Trustee's
compensation shall not be limited by any law on compensation of a trustee of
an express trust.  The Issuer shall cause the Administrator pursuant to the
Administration Agreement to reimburse the Indenture Trustee for all
reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, in addition to the compensation for its services.  Such expenses
shall include the reasonable compensation and expenses, disbursements and
advances of the Indenture Trustee's agents, counsel, accountants and experts.
The Issuer shall cause the Administrator pursuant to the Administration
Agreement to indemnify the Indenture Trustee against any and all loss,
liability or expense (including the reasonable fees of counsel) incurred by
it in connection with the administration of this trust and the performance of
its duties hereunder.  The Indenture Trustee shall notify the Issuer and the
Administrator promptly of any claim for which it may seek indemnity;
provided, however, a failure by the Indenture Trustee to promptly notify the
Issuer and the Administrator of a claim for which it may seek indemnity shall
not relieve the Administrator from its obligation to indemnify the Indenture
Trustee.

                 The Administrator's payment obligations to the Indenture
Trustee pursuant to this Section 10.06 shall survive the resignation or
termination of the Indenture Trustee and the discharge of this Indenture.

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When the Indenture Trustee incurs expenses after the occurrence of a Default
specified in Section 8.1(f) with respect to the Issuer, the expenses are
intended to constitute expenses of administration under the Bankruptcy Code
or any other applicable federal or state bankruptcy, insolvency or similar
law.

G.Eligibility Requirements for Indenture Trustee.

                 The Indenture Trustee hereunder shall at all times be a
corporation organized and doing business under the laws of the United States
or any state thereof authorized under such laws to exercise corporate trust
powers, having a long-term unsecured debt rating of at least "Baa3" by
Moody's and "BBB-" by Standard & Poor's having, in the case of an entity that
is subject to risk-based capital adequacy requirements, risk-based capital of
at least $50,000,000 or, in the case of an entity that is not subject to
risk-based capital adequacy requirements, having a combined capital and
surplus of at least $50,000,000 and subject to supervision or examination by
federal or state authority, and shall satisfy the requirements for a trustee
set forth in paragraph (a)(4)(i) of Rule 3a-7 under the Investment Company
Act.  If such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purpose of this Section 10.7, the risk-
based capital or the combined capital and surplus of such corporation, as the
case may be, shall be deemed to be its risk-based capital or combined capital
and surplus as set forth in the most recent report of condition so published.

                 If this Indenture is qualified under the TIA, the Indenture
Trustee shall at all times satisfy the requirements of TIA Section 310(a) and
the Indenture Trustee shall comply with TIA Section 310(b), including the
optional provision permitted by the second sentence of TIA Section 310(b)(9);
provided that there shall be excluded from the operation of TIA
Section 310(b)(1) any indenture or indentures under which other securities of
the Issuer are outstanding if the requirements for such exclusion set forth
in the TIA Section 310(b)(1) are met.

                 If at any time the Indenture Trustee ceases to be eligible
in accordance with the provisions of this Section 10.7, the Indenture Trustee
shall resign immediately in the manner and with the effect specified in
Section 10.8.

H.Resignation or Removal of Indenture Trustee.

                 1.  The Indenture Trustee may give notice of its intent to
resign at any time by so notifying the Issuer.  The Holders of a Majority in
Interest of each Series of Outstanding Investor Notes may remove the
Indenture Trustee by so notifying the Indenture Trustee and may appoint a

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successor Indenture Trustee.  The Issuer shall remove the Indenture Trustee
if:

                    a.    the Indenture Trustee fails to comply with Section
                          10.7                             ;

                    b.    the Indenture Trustee is adjudged bankrupt or
                          insolvent;

                    c.    a receiver or other public officer takes charge of
                          the Indenture Trustee or its property; or

                    d.    the Indenture Trustee otherwise becomes incapable of
                          acting.

                 2.       If the Indenture Trustee gives notice of its intent
to resign or is removed or if a vacancy exists in the office of the Indenture
Trustee for any reason (the Indenture Trustee in such event being referred to
herein as the retiring Indenture Trustee), the Issuer shall promptly appoint
a successor Indenture Trustee.

                 3.       A successor Indenture Trustee shall deliver a
written acceptance of its appointment to the retiring Indenture Trustee and
to the Issuer and thereupon the resignation or removal of the Indenture
Trustee shall become effective, and the successor Indenture Trustee, without
any further act, deed or conveyance shall have all the rights, powers and
duties of the Indenture Trustee under this Indenture.  The successor
Indenture Trustee shall mail a notice of its succession to Noteholders.  The
retiring Indenture Trustee shall promptly transfer all property held by it as
the Indenture Trustee to the successor Indenture Trustee.

                 4.       If a successor Indenture Trustee does not take
office within 60 days after the retiring Indenture Trustee gives notice of
its intent to resign or is removed, the retiring Indenture Trustee, the
Issuer or the Holders of a Majority in Interest of each Series of Outstanding
Investor Notes may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.

                 5.       If the Indenture Trustee fails to comply with
Section 10.7, any Investor Noteholder may petition any court of competent
jurisdiction for the removal of the Indenture Trustee and the appointment of
a successor Indenture Trustee.

                 6.       Any resignation or removal of the Indenture Trustee
and appointment of a successor Indenture Trustee pursuant to any of the
provisions of this Section shall not become effective until acceptance of

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appointment by the successor Indenture Trustee pursuant to Section 10.8(c)
and payment of all fees and expenses owed to the outgoing Indenture Trustee.

                 7.       Notwithstanding the resignation or removal of the
Indenture Trustee pursuant to this Section, the Issuer's and the
Administrator's obligations under Section 10.6 shall continue for the benefit
of the retiring Indenture Trustee.  The Indenture Trustee shall not be liable
for the acts or omissions of any successor Indenture Trustee.

I.Successor Indenture Trustee by Merger.

                 If the Indenture Trustee consolidates with, merges or
converts into, or transfers all or substantially all its corporate trust
business or assets to, another corporation or banking association, the
resulting, surviving or transferee corporation without any further act shall
be the successor Indenture Trustee.  The Indenture Trustee shall provide the
Issuer and the Rating Agencies written notice of any such transaction.

                 In case at the time such successor or successors by merger,
conversion or consolidation to the Indenture Trustee shall succeed to the
trusts created by this Indenture any of the Investor Notes shall have been
authenticated but not delivered, any such successor to the Indenture Trustee
may adopt the certificate of authentication of any predecessor Indenture
Trustee, and deliver such Investor Notes so authenticated; and in case at
that time any of the Investor Notes shall not have been authenticated, any
successor Indenture Trustee may authenticate such Investor Notes either in
the name of any predecessor Indenture Trustee hereunder or in the name of the
successor Indenture Trustee; and in all such cases such certificate of
authentication shall have the same full force as is provided anywhere in the
Investor Notes or in this Indenture with respect to the certificate of
authentication of the Indenture Trustee.

J.Appointment of Co-Indenture Trustee or Separate Indenture Trustee.

                 1.       Notwithstanding any other provisions of this
Indenture or any Indenture Supplement, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any part of the
Collateral may at the time be located, the Indenture Trustee shall have the
power and may execute and deliver all instruments to appoint one or more
persons to act as a co-Indenture Trustee or co-Indenture Trustees, or
separate Indenture Trustee or separate Indenture Trustees, of all or any part
of the Collateral, and to vest in such Person or Persons, in such capacity
and for the benefit of the Noteholders, such title to the Collateral, or any
part thereof, and, subject to the other provisions of this Section 10.10,
such powers, duties, obligations, rights and trusts as the Indenture Trustee
may consider necessary or desirable.  No co-Indenture Trustee or separate
Indenture Trustee hereunder shall be required to meet the terms of

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eligibility as a successor Indenture Trustee under Section 10.7 and no notice
to Investor Noteholders of the appointment of any co-Indenture Trustee or
separate Indenture Trustee shall be required under Section 10.8.  No
co-Indenture Trustee shall be appointed without the consent of the Issuer
unless such appointment is required as a matter of state law or to enable the
Indenture Trustee to perform its functions hereunder.

                 2.       Every separate Indenture Trustee and co-Indenture
Trustee shall, to the extent permitted by law, be appointed and act subject
to the following provisions and conditions:

                              a.  The Investor Notes of each Series shall be
                 authenticated and delivered solely by the Indenture Trustee
                 or an authenticating agent appointed by the Indenture
                 Trustee;

                              b.  All rights, powers, duties and obligations
                 conferred or imposed upon the Indenture Trustee shall be
                 conferred or imposed upon and exercised or performed by the
                 Indenture Trustee and such separate Indenture Trustee or
                 co-Indenture Trustee jointly (it being understood that such
                 separate Indenture Trustee or co-Indenture Trustee is not
                 authorized to act separately without the Indenture Trustee
                 joining in such act), except to the extent that under any
                 law of any jurisdiction in which any particular act or acts
                 are to be performed, the Indenture Trustee shall be
                 incompetent or unqualified to perform, such act or acts, in
                 which event such rights, powers, duties and obligations
                 (including the holding of title to the Assets or any portion
                 thereof in any such jurisdiction) shall be exercised and
                 performed singly by such separate Indenture Trustee or
                 co-Indenture Trustee, but solely at the direction of the
                 Indenture Trustee;

                              c.  No Indenture Trustee hereunder shall be
                 personally liable by reason of any act or omission of any
                 other Indenture Trustee hereunder;

                              d.  The Indenture Trustee may at any time
                 accept the resignation of or remove any separate Indenture
                 Trustee or co-Indenture Trustee; and

                              e.  The Indenture Trustee shall remain
                 primarily liable for the actions of any co-Indenture
                 Trustee.

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                 3.       Any notice, request or other writing given to the
Indenture Trustee shall be deemed to have been given to each of the then
separate Indenture Trustees and co-Indenture Trustees, as effectively as if
given to each of them.  Every instrument appointing any separate Indenture
Trustee or co-Indenture Trustee shall refer to this Indenture and the
conditions of this Article 9.  Each separate Indenture Trustee and
co-Indenture Trustee, upon its acceptance of the trusts conferred, shall be
vested with the estates or property specified in its instrument of
appointment, either jointly with the Indenture Trustee or separately, as may
be provided therein, subject to all the provisions of this Indenture and any
Indenture Supplement, specifically including every provision of this
Indenture or any Indenture Supplement relating to the conduct of, affecting
the liability of, or affording protection to, the Indenture Trustee.  Every
such instrument shall be filed with the Indenture Trustee and a copy thereof
given to the Issuer.

                 4.       Any separate Indenture Trustee or co-Indenture
Trustee may at any time constitute the Indenture Trustee, its agent or
attorney-in-fact with full power and authority, to the extent not prohibited
by law, to do any lawful act under or in respect to this Indenture or any
Indenture Supplement on its behalf and in its name.  If any separate
Indenture Trustee or co-Indenture Trustee shall die, become incapable of
acting, resign or be removed, all of its estates, properties, rights,
remedies and trusts shall vest in and be exercised by the Indenture Trustee,
to the extent permitted by law, without the appointment of a new or successor
Indenture Trustee.

                 5.       In connection with the appointment of a co-Indenture
Trustee, the Indenture Trustee may, at any time, at the Indenture Trustee's
sole cost and expense, without notice to the Investor Noteholders, delegate
its duties under this Base Indenture and any Indenture Supplement to any
Person who agrees to conduct such duties in accordance with the terms hereof;
provided, however, that no such delegation shall relieve the Indenture
Trustee of its obligations and responsibilities hereunder with respect to any
such delegated duties.

K.Representations and Warranties of Indenture Trustee.

                 The Indenture Trustee represents and warrants to the Issuer
and the Noteholders that:

                              a.  The Indenture Trustee is a banking
                 corporation organized, existing and in good standing under
                 the laws of the State of New York;

                              b.  The Indenture Trustee has full power,
                 authority and right to execute, deliver and perform this

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                 Indenture and any Indenture Supplement issued concurrently
                 with this Indenture and to authenticate the Investor Notes,
                 and has taken all necessary action to authorize the
                 execution, delivery and performance by it of this Indenture
                 and any Indenture Supplement issued concurrently with this
                 Indenture and to authenticate the Investor Notes;

                              c.  This Indenture has been duly executed and
                 delivered by the Indenture Trustee; and

                              d.  The Indenture Trustee meets the
                 requirements of eligibility as an Indenture Trustee
                 hereunder set forth in Section 10.7.

L.Preferential Collection of Claims Against the Issuer.

                 If this Indenture is qualified under the TIA, the Indenture
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b) and an Indenture Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated therein.

                                  ARTICLE X.

                            DISCHARGE OF INDENTURE

A.Termination of the Issuer's Obligations.

                 1.       This Indenture shall cease to be of further effect
(except that the Issuer's obligations under Section 10.6 and the Indenture
Trustee's and Paying Agent's obligations under Section 11.3 shall survive)
when all Outstanding Investor Notes theretofore authenticated and issued have
been delivered (other than destroyed, lost or stolen Investor Notes which
have been replaced or paid) to the Indenture Trustee for cancellation and the
Issuer has paid all sums payable hereunder.

                 2.       In addition, except as may be provided to the
contrary in any Indenture Supplement, the Issuer may terminate all of its
obligations under this Indenture if:

                              a.  The Issuer irrevocably deposits in trust
                 with the Indenture Trustee or at the option of the Indenture
                 Trustee, with an Indenture Trustee reasonably satisfactory
                 to the Indenture Trustee and the Issuer under the terms of
                 an irrevocable trust agreement in form and substance
                 satisfactory to the Indenture Trustee, money or U.S.
                 Government Obligations in an amount sufficient, in the

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                 opinion of a nationally recognized firm of independent
                 certified public accountants expressed in a written
                 certification thereof delivered to the Indenture Trustee, to
                 pay, when due, principal and interest on the Investor Notes
                 to maturity or redemption, as the case may be, and to pay
                 all other sums payable by it hereunder; provided, however,
                 that (1) the Indenture Trustee of the irrevocable trust
                 shall have been irrevocably instructed to pay such money or
                 the proceeds of such U.S. Government Obligations to the
                 Indenture Trustee and (2) the Indenture Trustee shall have
                 been irrevocably instructed to apply such money or the
                 proceeds of such U.S. Government Obligations to the payment
                 of said principal and interest with respect to the Investor
                 Notes;

                              b.  The Issuer delivers to the Indenture
                 Trustee an Officer's Certificate stating that all conditions
                 precedent to satisfaction and discharge of this Indenture
                 have been complied with, and an Opinion of Counsel to the
                 same effect; and

                              c.  the Rating Agency Condition is satisfied
                 with respect to each Series of Outstanding Investor Notes.

Then, this Indenture shall cease to be of further effect (except as provided
in this Section 11.1), and the Indenture Trustee, on demand of the Issuer,
shall execute proper instruments acknowledging confirmation of and discharge
under this Indenture.

                 3.       After such irrevocable deposit made pursuant to
Section 11.1(b) and satisfaction of the other conditions set forth herein,
the Indenture Trustee upon request shall acknowledge in writing the discharge
of the Issuer's obligations under this Indenture except for those surviving
obligations specified above.

                 In order to have money available on a payment date to pay
principal or interest on the Investor Notes, the U.S. Government Obligations
shall be payable as to principal or interest at least one Business Day before
such payment date in such amounts as will provide the necessary money.  U.S.
Government Obligations shall not be callable at the issuer's option.

B.Application of Trust Money.

                 The Indenture Trustee or a trustee satisfactory to the
Indenture Trustee and the Issuer shall hold in trust money or U.S. Government
Obligations deposited with it pursuant to Section 11.1.  The Indenture
Trustee shall apply the deposited money and the money from U.S. Government

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<PAGE>

Obligations through the Paying Agent in accordance with this Indenture to the
payment of principal and interest on the Investor Notes.

                 The provisions of this Section 11.2 shall survive the
expiration or earlier termination of this Indenture.

C.Repayment to the Issuer.

                 The Indenture Trustee and the Paying Agent shall promptly
pay to the Issuer upon written request any excess money or, pursuant to
Section 2.4, return any Investor Notes held by them at any time.

                 The provisions of this Section 11.3 shall survive the
expiration or earlier termination of this Indenture.

                                  ARTICLE XI.

                                  AMENDMENTS

A.Without Consent of the Investor Noteholders.

                 Without the consent of any Investor Noteholder, the Issuer
and the Indenture Trustee, at any time and from time to time, may enter into
one or more Indenture Supplements hereto, in form satisfactory to the
Indenture Trustee, for any of the following purposes, provided that the
Rating Agency Condition is met:

                 1.       to create a new Series of Investor Notes;

                 2.       to add to the covenants of the Issuer for the
         benefit of any Investor Noteholders (and if such covenants are to be
         for the benefit of less than all Series of Investor Notes, stating
         that such covenants are expressly being included solely for the
         benefit of such Series) or to surrender any right or power herein
         conferred upon the Issuer (provided, however, that the Issuer will
         not pursuant to this Section 12.1(b) surrender any right or power it
         has under the Transaction Documents);

                 3.       to mortgage, pledge, convey, assign and transfer to
         the Indenture Trustee any property or assets as security for the
         Investor Notes and to specify the terms and conditions upon which
         such property or assets are to be held and dealt with by the
         Indenture Trustee and to set forth such other provisions in respect
         thereof as may be required by the Indenture or as may, consistent
         with the provisions of the Indenture, be deemed appropriate by the
         Issuer and the Indenture Trustee, or to correct or amplify the

                                     -68-

<PAGE>

         description of any such property or assets at any time so mortgaged,
         pledged, conveyed and transferred to the Indenture Trustee on behalf
         of the Noteholders;

                 4.       to cure any ambiguity, defect, or inconsistency or
         to correct or supplement any provision contained herein or in any
         Indenture Supplement or in any Investor Notes issued hereunder;

                 5.       to evidence and provide for the acceptance of
         appointment hereunder by a successor Indenture Trustee with respect
         to the Investor Notes of one or more Series and to add to or change
         any of the provisions of the Indenture as shall be necessary to
         provide for or facilitate the administration of the trusts hereunder
         by more than one Indenture Trustee;

                 6.       to correct or Indenture Supplement any provision
         herein which may be inconsistent with any other provision herein or
         to make any other provisions with respect to matters or questions
         arising under this Indenture; or

                 7.       if this Indenture is required to be qualified under
         the TIA, to modify, eliminate or add to the provisions of this
         Indenture to such extent as shall be necessary to effect the
         qualification of this Indenture under the TIA or under any similar
         federal statute hereafter enacted and to add to this Indenture such
         other provisions as may be expressly required by the TIA;

provided, however, that, as evidenced by an Opinion of Counsel delivered to
the Indenture Trustee (at the Issuer's expense), such action shall not
adversely affect in any material respect the interests of any Investor
Noteholder.  Upon the request of the Issuer, the Indenture Trustee shall join
with the Issuer in the execution of any Indenture Supplement authorized or
permitted by the terms of this Indenture and shall make any further
appropriate agreements and stipulations which may be therein contained, but
the Indenture Trustee shall not be obligated to enter into such Indenture
Supplement which affects its own rights, duties or immunities under this
Indenture or otherwise.

B.With Consent of the Investor Noteholders.

                 Except as provided in Section 12.1, the provisions of this
Indenture and any Indenture Supplement (unless otherwise provided in such
Indenture Supplement) and each other Transaction Document to which the Issuer
is a party may from time to time be amended, modified or waived, if such
amendment, modification or waiver is in writing and consented to in writing
by the Issuer, the Indenture Trustee and the Holders of a Majority in
Interest of each Series of Outstanding Investor Notes; provided that, if such

                                     -69-

<PAGE>

amendment, modification or waiver of or to this Indenture, the Indenture
Supplement with respect to a Series of Investor Notes or any Transaction
Document does not affect the Noteholders of a particular Series of Investor
Notes (as substantiated by an Opinion of Counsel to such effect), then the
consent of the Investor Noteholders of such Series shall not be required to
such amendment, modification or waiver; provided further, that no consent of
Investor Noteholders shall be required to any amendment, modification or
waiver of or to any Transaction Document if such amendment, modification or
waiver does not adversely affect in any material respect the Noteholders of
any Series of Investor Notes (as substantiated by an Opinion of Counsel to
such effect) and provided further that the Rating Agency Condition is
satisfied with respect to each affected Series of Investor Notes.
Notwithstanding the foregoing:

                              a.  any modification of this Section 11.2, any
                 requirement hereunder that any particular action be taken by
                 Investor Noteholders holding the relevant percentage in
                 principal amount of the Investor Notes or any change in the
                 definition of the terms "Adjusted Aggregate Unit Balance" or
                 "Asset Deficiency", "Invested Amount", "Invested Percentage"
                 or any defined term used for the purpose of any such
                 definitions shall require the consent of each affected
                 Investor Noteholder; and

                              b.  any amendment, waiver or other modification
                 that would (a) extend the due date for, or reduce the amount
                 of any scheduled repayment or prepayment of principal of or
                 interest on any Investor Note (or reduce the principal
                 amount of or rate of interest on any Investor Note) shall
                 require the consent of each affected Investor Noteholder;
                 (b) approve the assignment or transfer by the Issuer of any
                 of its rights or obligations hereunder or under any other
                 Transaction Document to which it is a party except pursuant
                 to the express terms hereof or thereof shall require the
                 consent of each Investor Noteholder; (c) release any obligor
                 under any Transaction Document to which it is a party except
                 pursuant to the express terms of such Transaction Document
                 shall require the consent of each Investor Noteholder;
                 provided, however, that the Liens on Vehicles may be
                 released as provided in Section 3.5; (d) affect adversely
                 the interests, rights or obligations of any Investor
                 Noteholder individually in comparison to any other Investor
                 Noteholder shall require the consent of such Investor
                 Noteholder; or (e) amend or otherwise modify any
                 Amortization Event shall require the consent of each
                 affected Investor Noteholder.

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<PAGE>

C.Indenture Supplements.

                 Each amendment or other modification to this Indenture or
the Investor Notes shall be set forth in an Indenture Supplement.  The
initial effectiveness of each Indenture Supplement shall be subject to the
satisfaction of the Rating Agency Condition.  In addition to the manner
provided in Sections 12.1 and 12.2, each Indenture Supplement may be amended
as provided in such Indenture Supplement.

D.Revocation and Effect of Consents.

                 Until an amendment or waiver becomes effective, a consent to
it by an Investor Noteholder of an Investor Note is a continuing consent by
the Investor Noteholder and every subsequent Investor Noteholder of an
Investor Note or portion of an Investor Note that evidences the same debt as
the consenting Investor Noteholder's Investor Note, even if notation of the
consent is not made on any Investor Note.  However, any such Investor
Noteholder or subsequent Investor Noteholder may revoke the consent as to his
Investor Note or portion of an Investor Note if the Indenture Trustee
receives written notice of revocation before the date the amendment or waiver
becomes effective.  An amendment or waiver becomes effective in accordance
with its terms and thereafter binds every Investor Noteholder.  The Issuer
may fix a record date for determining which Investor Noteholders must consent
to such amendment or waiver.

E.Notation on or Exchange of Investor Notes.

                 The Indenture Trustee may place an appropriate notation
about an amendment or waiver on any Investor Note thereafter authenticated.
The Issuer in exchange for all Investor Notes may issue and the Indenture
Trustee shall authenticate new Investor Notes that reflect the amendment or
waiver.  Failure to make the appropriate notation or issue a new Investor
Note shall not affect the validity and effect of-such amendment or waiver.

F.The Indenture Trustee to Sign Amendments, etc.

                 The Indenture Trustee shall sign any Indenture Supplement
authorized pursuant to this Article 12 if the Indenture Supplement does not
adversely affect the rights, duties, liabilities or immunities of the
Indenture Trustee.  If it does, the Indenture Trustee may, but need not, sign
it.  In signing such Indenture Supplement, the Indenture Trustee shall be
entitled to receive, if requested, an indemnity reasonably satisfactory to it
and to receive and, subject to Section 10.1, shall be fully protected in
relying upon, an Officer's Certificate and an Opinion of Counsel as
conclusive evidence that such Indenture Supplement is authorized or permitted
by this Indenture and that it will be valid and binding upon the Issuer in
accordance with its terms

                                     -71-

<PAGE>

G.Conformity with Trust Indenture Act.

                 If this Indenture is qualified under the TIA, every
amendment of this Indenture and every supplemental indenture executed
pursuant to this Article 12 shall comply in all respects with the TIA.

                                 ARTICLE XII.

                                 MISCELLANEOUS

A.Compliance Certificates and Opinions.

                 1. Upon any application or request by the Issuer to the
Indenture Trustee to take any action under any provision of this Indenture,
the Issuer shall furnish to the Indenture Trustee (i) an Officer's
Certificate stating that all conditions precedent, if any, provided for in
this Indenture relating to the proposed action have been complied with, (ii)
an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, and (iii) if this
Indenture is qualified under the TIA and the TIA so requires, an Independent
Certificate from a firm of certified public accountants or other experts
meeting the applicable requirements of this Section 13.1, except that, in the
case of any such application or request as to which the furnishing of such
documents is specifically required by any provision of this Indenture, no
additional certificate or opinion need be furnished.

                 Every certificate or opinion with respect to compliance with
a condition or covenant provided for in this Indenture shall include:

                      a.  a statement that each signatory of such certificate
         or opinion has read or has caused to be read such covenant or
         condition and the definitions herein relating thereto;

                      b.  a brief statement as to the nature and scope of the
         examination or investigation upon which the statements or opinions
         contained in such certificate or opinion are based;

                      c.  a statement that, in the opinion of each such
         signatory, such signatory has made such examination or investigation
         as is necessary to enable such signatory to express an informed
         opinion as to whether such covenant or condition has been complied
         with; and

                      d.  a statement as to whether, in the opinion of each
         such signatory such condition or covenant has been complied with.

                                     -72-

<PAGE>

                 2.       a.  If this Indenture is qualified under the TIA and
the TIA so requires, prior to the deposit of any property or securities with
the Indenture Trustee that is to be made the basis for the release of any
property or securities subject to the Lien of this Indenture, the Issuer
shall, in addition to any obligation imposed in Section 13.1(a) or elsewhere
in this Indenture, furnish to the Indenture Trustee an Officer's Certificate
certifying or stating the opinion of each person signing such certificate as
to the fair value (within 90 days of such deposit) to the Issuer of the
property or securities to be so deposited.

                 b.  Whenever the Issuer is required to furnish to the
         Indenture Trustee an Officer's Certificate certifying or stating the
         opinion of any signer thereof as to the matters described in
  clause
         (i), the Issuer shall also deliver to the Indenture Trustee an
         Independent Certificate as to the same matters, if the fair value to
         the Issuer of the securities to be so deposited and of all other such
         securities made the basis of any such withdrawal or release since the
         commencement of the then-current fiscal year of the Issuer, as set
         forth in the certificates delivered pursuant to clause (i) and this
         clause (ii), is 10% or more of the Aggregate Invested Amount, but
         such a certificate need not be furnished with respect to any
         securities so deposited, if the fair value thereof to the Issuer as
         set forth in the related Officer's Certificate is less than $25,000
         or less than one percent of the Aggregate Invested Amount.

                 c.  If this Indenture is qualified under the TIA and the TIA
         so requires, whenever any property or securities are to be released
         from the Lien of this Indenture, the Issuer shall also furnish to the
         Indenture Trustee an Officer's Certificate certifying or stating the
         opinion of each person signing such certificate as to the fair value
         (within 90 days of such release) of the property or securities
         proposed to be released and stating that in the opinion of such
         person the proposed release will not impair the security under this
         Indenture in contravention of the provisions hereof.

                 d.  Whenever the Issuer is required to furnish to the
         Indenture Trustee an Officer's Certificate certifying or stating the
         opinion of any signer thereof as to the matters described in clause
         (iii), the Issuer shall also furnish to the Indenture Trustee an
         Independent Certificate as to the same matters if the fair value of
         the property or securities and of all other property, or securities
         released from the Lien of this Indenture since the commencement of
         the then current calendar year, as set forth in the certificates
         required by clause (iii) and this clause (iv), equals 10% or more of
         the Aggregate Invested Amount, but such certificate need not be
         furnished in the case of any release of property or securities if the
         fair value thereof as set forth in the related Officer's Certificate

                                     -73-

<PAGE>

         is less than $25,000 or less than one percent of the then Aggregate
         Invested Amount.

                 e.  Notwithstanding any provision of this Section, the
         Issuer may (A) collect, liquidate, sell or otherwise dispose of the
         Issuer Assets as and to the extent permitted or required by the
         Transaction Documents and (B) make cash payments out of the Issuer
         Accounts as and to the extent permitted or required by the
         Transaction Documents.

B.Forms of Documents Delivered to Indenture Trustee.

                 In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person, it is not
necessary that all such matters be certified by, or covered by the opinion
of, only one such Person, or that they be so certified or covered by only one
document, but one such Person may certify or give an opinion with respect to
some matters and one or more other such Persons as to other matters, and any
such Person my certify or give an opinion as to such matters in one or
several documents.

                 Any certificate or opinion of an Authorized Officer of the
Issuer may be based, insofar as it relates to legal matters, upon a
certificate to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his or her certificate
or opinion is based are erroneous.  Any such certificate of an Authorized
Officer or Opinion of Counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by, an officer
or officers of the Servicer, the Seller or the Issuer, stating that the
information with respect to such factual matters is in the possession of the
Servicer, the Seller or the Issuer, unless such counsel knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.

                 Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.

                 Whenever in this Indenture, in connection with any
application, certificate or report to the Indenture Trustee, it is provided
that the Issuer shall deliver any document (x) as a condition of the granting
of such application, or (y) as evidence of the Issuer's compliance with any
term hereof, it is intended that the truth and accuracy, at the time of the
granting of such application or at the effective date of such certificate or

                                     -74-

<PAGE>

report (as the case may be), of the facts and opinions stated in such
document shall in each case be conditions precedent to the right of the
Issuer to have such application granted or to the sufficiency of such
certificate or report.  The foregoing shall not, however, be construed to
affect the Indenture Trustee's right to rely upon the truth and accuracy of
any statement or opinion contained in any such document as provided in
Article 10.

C.Actions of Noteholders.

                 1.  Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or
taken by the Investor Noteholders may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Investor
Noteholders in person or by an agent duly appointed in writing; and except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments are delivered to the Indenture Trustee and,
when required, to the Issuer.  Proof of execution of any such instrument or
of a writing appointing any such agent shall be sufficient for any purpose of
this Indenture and conclusive in favor of the Indenture Trustee and the
Issuer, if made in the manner provided in this Section 13.3.

                 2.  The fact and date of the execution by any Investor Note-
holder of any such instrument or writing may be proved in any reasonable
manner which the Indenture Trustee deems sufficient.

                 3.  Any request, demand, authorization, direction, notice,
consent, waiver or other act by an Investor Noteholder shall bind every
Holder of every Investor Note issued upon the registration of transfer there-
of or in exchange therefor or in lieu thereof, in respect of anything done,
or omitted to be done, by the Indenture Trustee or the Issuer in reliance
thereon, regardless of whether notation of such action is made upon such
Investor Note.

                 4.  The Indenture Trustee may require such additional proof
of any matter referred to in this Section 13.3 as it shall deem necessary.

D.Notices.

                 1.  Any notice or communication by the Issuer or the
Indenture Trustee to the other shall be in writing and delivered in person or
mailed by first-class mail (registered or

                                     -75-

<PAGE>

certified, return receipt requested), telex, telecopier or overnight air
courier guaranteeing next day delivery, to the other's address:

                 If to the Issuer:

                 Greyhound Funding LLC
                 c/o Global Securitization Services, LLC
                 25 West 43rd Street, Suite 704
                 New York, NY 10036
                 Attention: President
                 Telecopier No.: (212) 302-8767

                 with a copy to the Administrator:

                 PHH Vehicle Management Services, LLC
                 900 Old Country Road
                 Garden City, New York 11530
                 Telecopier: (516) 222-3751
                 Attention: General Counsel

                 If to the Indenture Trustee:

                 The Chase Manhattan Bank
                 450 W. 33rd Street, 14th Floor
                 New York, New York  10001

                 Attn: Capital Markets Fiduciary Services, VMS Asset Backed
                 Notes
                 Phone:  (212) 946-8600
                 Fax:  (212) 946-3916

                 The Issuer or the Indenture Trustee by notice to the other
may designate additional or different addresses for subsequent notices or
communications; provided, however, the Issuer may not at any time designate
more than a total of three (3) addresses to which notices must be sent in
order to be effective.

                 Any notice (i) given in person shall be deemed delivered on
the date of delivery of such notice, (ii) given by first class mail shall be
deemed given five (5) days after the date that such notice is mailed, (iii)
delivered by telex or telecopier shall be deemed given on the date of
delivery of such notice, and (iv) delivered by overnight air courier shall be
deemed delivered one Business Day after the date that such notice is
delivered to such overnight courier.

                 Notwithstanding any provisions of this Indenture to the
contrary, the Indenture Trustee shall have no liability based upon or arising

                                     -76-

<PAGE>

from the failure to receive any notice required by or relating to this
Indenture or the Investor Notes.

                 If the Issuer mails a notice or communication to Investor
Noteholders, it shall mail a copy to the Indenture Trustee at the same time.

                 Notices required to be given to the Rating Agencies by the
Issuer or the Indenture Trustee shall be in writing, personally delivered or
mailed certified mail, return receipt requested to (i) in the case of
Moody's, at the following address:  Moody's Investors Service, 99 Church
Street, New York, New York  10004 and (ii) in the case of Standard & Poor's,
at the following address:  Standard & Poor's Ratings Service, 55 Water Street
(40th Floor), New York, New York  10041, Attention:  Asset Backed
Surveillance Department.

                 2.       Where the Indenture provides for notice to Investor
Noteholders of any event, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if sent in writing and mailed,
first-class postage prepaid, to each Investor Noteholder affected by such
event, at its address as it appears in the Note Register, not later than the
latest date, and not earlier than the earliest date, prescribed (if any) for
the giving of such notice.  In any case where notice to Investor Noteholder
is given by mail, neither the failure to mail such notice, nor any defect in
any notice so mailed, to any particular Investor Noteholder shall affect the
sufficiency of such notice with respect to other Investor Noteholders, and
any notice which is mailed in the manner herein provided shall be
conclusively presumed to have been duly given.  Where this Indenture provides
for notice in any manner, such notice may be waived in writing by any Person
entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice.  Waivers of notice by Investor
Noteholders shall be filed with the Indenture Trustee, but such filing shall
not be a condition precedent to the validity of any action taken in reliance
upon such waiver.

                 In the case by reason of the suspension of regular mail
service or by reason of any other cause it shall be impracticable to give
such notice by mail, then such notification as shall be made that is
satisfactory to the Indenture Trustee shall constitute a sufficient
notification for every purpose hereunder.

E.Conflict with TIA.

                 If this Indenture is qualified under the TIA and any
provision hereof limits, qualifies or conflicts with another provision hereof
that is required to be included in this indenture by any of the provisions of
the TIA, such required provision shall control.

                                     -77-

<PAGE>

                 If this Indenture is qualified under the TIA, the provisions
of TIA Sections 310 through 317 that impose duties on any person (including
the provisions automatically deemed included herein unless expressly excluded
by this Indenture) are a part of and govern this Indenture, whether or not
physically contained herein.

F.Rules by the Indenture Trustee.

                 The Indenture Trustee may make reasonable rules for action
by or at a meeting of Investor Noteholders.

G.Duplicate Originals.

                 The parties may sign any number of copies of this Indenture.
One signed copy is enough to prove this Indenture.

H.Benefits of Indenture.

                 Except as set forth in an Indenture Supplement, nothing in
this Indenture or in the Investor Notes, expressed or implied, shall give to
any Person, other than the parties hereto and their successors hereunder and
the Holders, any benefit or any legal or equitable right, remedy or claim
under the Indenture.

I.Payment on Business Day.

                 In any case where any Payment Date, redemption date or
maturity date of any Investor Note shall not be a Business Day, then
(notwithstanding any other provision of this Indenture) payment of interest
or principal (and premium, if any), as the case may be, need not be made on
such date but may be made on the next succeeding Business Day with the same
force and effect as if made on the Payment Date, redemption date, or maturity
date; provided, however. that no interest shall accrue for the period from
and after such Payment Date, redemption date, or maturity date, as the case
may be.

J.Governing Law.

                 THIS INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

K.Severability of Provisions.

                 If any one or more of the covenants, agreements, provisions
or terms of this Indenture shall for any reason whatsoever be held invalid,
then such covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or terms of

                                     -78-

<PAGE>

this Indenture and shall in no way affect the validity of enforceability of
the other provisions of this Indenture or of the Investor Notes or rights of
the Noteholders thereof.

L.Counterparts.

                 This Indenture may be executed in two or more counterparts
(and by different parties on separate counterparts), each of which shall be
an original, but all of which together shall constitute one and the same
instrument.

M.Successors.

                 All agreements of the Issuer in this Indenture and the
Investor Notes shall bind its successor; provided, however, the Issuer may
not assign its obligations or rights under this Indenture or any Transaction
Document.  All agreements of the Indenture Trustee in this Indenture shall
bind its successor.

N.Table of Contents, Headings, etc.

                 The Table of Contents, Cross-Reference Table, and headings
of the Articles and Sections of this Indenture have been inserted for
convenience of reference only, are not to be considered a part hereof, and
shall in no way modify or restrict any of the terms or provisions hereof.

O.Recording of Indenture.

                 If this Indenture is subject to recording in any appropriate
public recording offices, such recording is to be effected by the Issuer and
at its expense accompanied by an Opinion of Counsel (which may be counsel to
the Indenture Trustee or any other counsel reasonably acceptable to the
Indenture Trustee) to the effect that such recording is necessary either for
the protection of the Investor Noteholders or any other person secured
hereunder or for the enforcement of any right or remedy granted to the
Indenture Trustee under this Indenture or to satisfy any provision of the TIA
(if this Indenture is qualified thereunder).

P.No Petition.

                 The Indenture Trustee, by entering into this Indenture, and
each Investor Noteholder, by accepting an Investor Note, hereby covenant and
agree that they will not at any time (i) institute against the Issuer or join
in any institution against the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings
under any United States Federal or state bankruptcy or similar law in
connection with any obligations relating to the Investor Notes, this

                                     -79-

<PAGE>

Indenture or any of the other Transaction Documents or (ii) institute
against, or join any other Person in instituting against, the Origination
Trust, SPV, any other Special Purpose Entity, or any general partner or
single member of any Special Purpose Entity that is a partnership or limited
liability company, respectively, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceeding or other proceedings under any federal
or state bankruptcy or similar law.

                 Section Q.  SUBIs.

                 The Indenture Trustee, by entering into this Indenture, and
each Investor Noteholder, by accepting an Investor Note, represents, warrants
and covenants that (a) each of the Lease SUBI and the Fleet Receivable SUBI
is a separate series of the Origination Trust as provided in Section
3806(b)(2) of Chapter 38 of Title 12 of the Delaware Code, 12 Del.C.
Section 3801 et seq., (b)(i) the debts, liabilities, obligations and expenses
incurred, contracted for or otherwise existing with respect to the Lease
SUBI, the Lease SUBI Portfolio or the Fleet Receivable SUBI shall be
enforceable against the Lease SUBI Portfolio or the Fleet Receivable SUBI
only, as applicable, and not against any other SUBI Portfolio (used in this
Section as defined in the Origination Trust Agreement) or the UTI Portfolio
and (ii) the debts, liabilities, obligations and expenses incurred,
contracted for or otherwise existing with respect to any other SUBI (used in
this Section as defined in the Origination Trust Agreement), any other SUBI
Portfolio, the UTI or the UTI Portfolio shall be enforceable against such
other SUBI Portfolio or the UTI Portfolio only, as applicable, and not
against any other SUBI Assets, (c) except to the extent required by law, UTI
Assets or SUBI Assets with respect to any SUBI (other than the Lease SUBI and
the Fleet Receivable SUBI) shall not be subject to the claims, debts,
liabilities, expenses or obligations arising from or with respect to the
Lease SUBI or Fleet Receivable SUBI, respectively, in respect of such claim,
(d)(i) no creditor or holder of a claim relating to the Lease SUBI, the Fleet
Receivable SUBI or the Lease Receivable SUBI Portfolio shall be entitled to
maintain any action against or recover any assets allocated to the UTI or the
UTI Portfolio or any other SUBI or the assets allocated thereto, and (ii) no
creditor or holder of a claim relating to the UTI, the UTI Portfolio or any
SUBI other than the Lease SUBI or the Fleet Receivable SUBI or any SUBI
Assets other than the Lease SUBI Portfolio or the Fleet Receivables shall be
entitled to maintain any action against or recover any assets allocated to
the Lease SUBI or the Fleet Receivable SUBI, and (e) any purchaser, assignee
or pledgee of an interest in the Lease SUBI, the Lease SUBI Certificate, the
Fleet Receivable SUBI, the Lease SUBI Certificate, the Fleet Receivable SUBI
Certificate, any other SUBI, any other SUBI Certificate (used in this Section
as defined in the Origination Trust Agreement), the UTI or the UTI
Certificate must, prior to or contemporaneously with the grant of any such
assignment, pledge or security interest, (i) give to the Origination Trust a
non-petition covenant substantially similar to that set forth in Section 6.9

                                     -80-

<PAGE>

of the Origination Trust Agreement, and (ii) execute an agreement for the
benefit of each holder, assignee or pledgee from time to time of the UTI or
UTI Certificate and any other SUBI or SUBI Certificate to release all claims
to the assets of the Origination Trust allocated to the UTI and each other
SUBI Portfolio and in the event that such release is not given effect, to
fully subordinate all claims it may be deemed to have against the assets of
the Origination Trust allocated to the UTI Portfolio and each other SUBI
Portfolio.

                                     -81-

<PAGE>

                 IN WITNESS WHEREOF, the Indenture Trustee and the Issuer
have caused, this Base Indenture to be duly executed by their respective duly
authorized officers as of the day and year first written above.

                                     GREYHOUND FUNDING, LLC,
                                     as Issuer

                                     By:  /s/ Kevin P. Burns
                                          Name:  Kevin P. Burns
                                          Title:    Manager

                                    THE CHASE MANHATTAN BANK,
                                    as Indenture Trustee

                                    By:  /s/ Jennifer Cupo
                                         Name:  Jennifer Cupo
                                         Title:    Vice President

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                                                                    SCHEDULE 1
                                                                        TO THE
                                                                BASE INDENTURE

                               DEFINITIONS LIST

                 "Accrual Period" means the period from and including a
Settlement Date (or, in the case of the initial Accrual Period, the Initial
Closing Date) to but excluding the succeeding Settlement Date.

                 "Additional Assignment" is defined in Section 2.2 of the
Transfer Agreement.

                 "Additional Closing Date" is defined in Section 2.3 of the
Transfer Agreement.

                 "Additional Units" means any Unit allocated to the Lease
SUBI Portfolio after the Initial Closing Date.

                 "Adjusted Aggregate Unit Balance" means, as of any date of
determination, an amount equal to the sum of (a) the excess of (i) the
Aggregate Lease Balance over (ii) the Aggregate Lease Adjustment Amount as of
such date, (b) 90% of the excess of (i) the Aggregate Residual Value Amount
over (ii) the Excess Residual Value Amount as of such date and (c) 90% of the
excess of (i) the Aggregate Paid-In Advance Balance over (ii) the Excess
Paid-In Advance Amount as of such date.

                 "Administration Agreement" means the Administration
Agreement, dated as of the Initial Closing Date, by and among the
Administrator, the Issuer, SPV and the Indenture Trustee, as amended,
modified or supplemented from time to time in accordance with its terms.

                 "Administrator" means VMS or a successor Administrator under
the Administration Agreement.

                 "Administrator  Fee" is defined in the Administration
Agreement.

                 "Affiliate" means, with respect to any 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. For purposes of this definition, "control" means the
power to direct the management and policies of a Person, directly or
indirectly, whether through ownership of voting securities, by contract or

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otherwise; and "controlled" and "controlling" have meanings correlative to
the foregoing.

                 "Aggregate Invested Amount" means the sum of the Invested
Amounts with respect to all Series of Outstanding Investor Notes.

                 "Aggregate Invested Percentage" means, with respect to
Collections for any Monthly Period, the sum of the Invested Percentages for
all Series of Outstanding Notes for such Monthly Period.

                 "Aggregate Lease Adjustment Amount" means, as of any date of
determination, an amount equal to the sum of (a) the Overconcentration Amount
as of such date, (b) the Excess Longer-Term Lease Amount as of such date, (c)
the Excess State Obligor Risk Amount as of such date and (d) the Excess
Consumer Lease Amount as of such date.

                 "Aggregate Lease Balance" means, as of any date of
determination during an Accrual Period, an amount equal to the sum of the
Lease Balances of each Eligible Lease allocated to the Lease SUBI Portfolio
as of the last day of the Monthly Period immediately preceding the first day
of such Accrual Period.

                 "Aggregate Net Lease Losses" means, for any Monthly Period,
an amount equal to the excess of the aggregate Lease Balances of all Unit
Leases that became Charged-Off Leases during such Monthly Period over the
aggregate amount of Recoveries received during such Monthly Period.

                 "Aggregate Paid-In Advance Balance" means, as of any date of
determination during an Accrual Period, an amount equal to the Cost of each
Paid-In Advance Vehicle allocated to the Lease SUBI Portfolio as of the last
day of the Monthly Period immediately preceding the first day of such Accrual
Period (or, if any such Paid-In Advance Vehicle was allocated to the Lease
SUBI Portfolio after the last day of such Monthly Period, the Cost thereof as
of the date such Paid-In Advance Vehicle was allocated to the Lease SUBI
Portfolio).

                 "Aggregate Residual Value Amount" means, as of any date of
determination during an Accrual Period, an amount equal to the aggregate for
each Unit Vehicle subject to a  Closed-End Lease allocated to the Lease SUBI
Portfolio as of the last day of the Monthly Period immediately preceding the
first day of such Accrual Period of the lesser of (a) the Stated Residual
Value of such Unit Vehicle and (b) the Net Book Value of such Unit Vehicle as
of such day.

                 "Aggregate Unit Balance" means, as of any date of
determination, an amount equal to the sum of (a) the Aggregate Lease Balance,

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(b) the Aggregate Paid-In Advance Balance and (c) the Aggregate Residual
Value Amount as of such date.

                 "ALG Residual Value" means, with respect to a Leased Vehicle
subject to a Closed-End Lease, an amount equal to the residual percentage of
the manufacturer's suggested retail price of such Leased Vehicle specified in
the ALG Residual Percentage Guide published by Automotive Lease Guide for the
make and model of such Leased Vehicle and the lease term of such Closed-End
Lease.

                 "Amortization Commencement Date" means, with respect to a
Series of Investor Notes, the date on which an Amortization Event with
respect to such Series is deemed to have occurred pursuant to the related
Indenture Supplement.

                 "Amortization Event" with respect to each Series of Investor
Notes, is defined in the related Indenture Supplement.

                 "Amortization Period" means, with respect to any Series of
Investor Notes or any Class within a Series of Investor Notes, the period
following the Revolving Period during which principal is distributed to
Investor Noteholders, which shall be the controlled amortization period, the
principal amortization period, the rapid amortization period, or other
amortization period, in each case as defined with respect to such Series in
the related Indenture Supplement.

                 "Annual Investor Noteholders' Tax Statement" is defined in
Section 4.4(c) of the Base Indenture.

                 "Annual Servicing Report" is defined in Section 4.1(a) of
the Base Indenture.

                 "Applicable Gain on Sale Account Percentage" means, on any
date of determination, the highest Series Gain on Sale Account Percentage
with respect to any Series of Investor Notes Outstanding.

                 "Applicable Law" means all applicable laws, statutes,
treaties, rules, codes, ordinances, regulations, certificates, orders,
interpretations, licenses and permits of any Governmental Authority from time
to time in effect, and judgments, decrees, injunctions, writs, orders or like
action of any court, arbitrator or other administrative, judicial or quasi-
judicial tribunal or agency of competent jurisdiction (including laws
specifically mandating compliance by property owners).

                 "Applicants" is defined in Section 2.8 of the Base
Indenture.

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                 "ARAC" means Avis Rent A Car, Inc., a Delaware corporation.

                 "Asset Deficiency" means, as of any date of determination,
the amount, if any, by which the Required Aggregate Asset Amount as of such
date exceeds the Adjusted Aggregate Unit Balance as of such date.

                 "Asset Purchase Agreement" means the Asset Purchase
Agreement, dated as of the Initial Closing Date, among VMS, PHH Consumer
Lease and SPV, as amended, modified or supplemented from time to time in
accordance with its terms.

                 "Assumed Lease Term" means, with respect to any Yield
Shortfall Lease, the number of months over which the Capitalized Cost of the
related Leased Vehicle is being depreciated thereunder.

                 "Authorized Officer" means (a) as to the Administrator or
the Servicer, any of the President, any Executive Vice President or any Vice
President of the Administrator or the Servicer, as the case may be, (b) as to
the Issuer, any officer (or agent acting pursuant to a power of attorney) of
the Issuer or of any Manager acting on behalf of the Issuer and who is
identified on the list of Authorized Officers delivered by the Manager to the
Indenture Trustee on the Initial Closing Date (as such list may be modified
or supplemented from time to time thereafter) and (c) as to SPV, any officer
(or agent acting pursuant to a power of attorney) of SPV or of any manager of
SPV acting on behalf of SPV and who is identified on the list of Authorized
Officers delivered by SPV to the Indenture Trustee on the Initial Closing
Date (as such list may be modified or supplemented from time to time
thereafter).

                 "Bankruptcy Code" means The Bankruptcy Reform Act of 1978,
as amended from time to time, and as codified as 11 U.S.C. Section 101 et
seq.

                 "Base Indenture" means the Base Indenture, dated as of the
Initial Closing Date, between the Issuer and the Indenture Trustee, as
amended, modified or supplemented from time to time, exclusive of Indenture
Supplements creating new Series of Investor Notes.

                 "Bearer Notes" is defined in Section 2.1 of the Base
Indenture.

                 "Bearer Rules" means the provisions of the Internal Revenue
Code, in effect from time to time, governing the treatment of bearer
obligations, including sections 163(f), 871, 881, 1441, 1442 and 4701, and
any regulations thereunder including, to the extent applicable to any Series
of Notes, Proposed or Temporary Regulations.

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                 "Beneficial Owner" means, with respect to a Book-Entry Note,
the Person who is the beneficial owner of such Book-Entry Note, as may be
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly or as an indirect
participant, in accordance with the rules of such Clearing Agency).

                 "Book-Entry Notes" means beneficial interests in the
Investor Notes, ownership and transfers of which shall be evidenced or made
through book entries by a Clearing Agency as described in Section 2.10 of the
Base Indenture; provided that after the occurrence of a condition whereupon
book-entry registration and transfer are no longer permitted and Definitive
Notes are issued to the Beneficial Owners, such Definitive Notes shall
replace Book-Entry Notes.

                 "Business Day" means any day other than a Saturday, Sunday
or other day on which banks are authorized or required by law to be closed in
New York, Maryland or Delaware.

                 "Capitalized Cost" means, with respect to any Leased
Vehicle, the amount identified as the "Capitalized Cost" of such Leased
Vehicle, including, to the extent provided therein, delivery charges, taxes
and any registration or titling fees.

                 "Cedel" means Cedel Bank, societe anonyme.

                 "Certificated Security" means a "certificated security"
within the meaning of the applicable UCC.

                 "Certificate of Title" means, with respect to any Leased
Vehicle, the certificate of title or other evidence of ownership of such
Leased Vehicle duly issued by the government department or agency in the
jurisdiction in which such Leased Vehicle is registered in accordance with
the certificate of title act or statute of the jurisdiction applicable to
such Leased Vehicle or, to the extent that a certificate of title or other
evidence of ownership has not been issued, the application (or copy thereof)
for the foregoing.

                 "Charged-Off Lease" means a Master Lease Agreement or
Consumer Lease that was or should have been charged off by the Servicer as
uncollectible in accordance with the Policies.

                 "Charged-Off Receivable" means a Fleet Receivable that was
or should have been charged off by the Servicer as uncollectible in
accordance with the Policies.

                 "Charge-Off Ratio" means, for any specified Settlement Date,
twelve times the quotient, expressed as a percentage, of (a) Aggregate Net

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Lease Losses for the preceding Monthly Period, divided by (b) the Aggregate
Lease Balance as of the last day of the second preceding Monthly Period.

                 "Chase" means The Chase Manhattan Bank, a New York banking
corporation.

                 "Class" means, with respect to any Series of Notes, any one
of the classes of Notes of that Series as specified in the related Indenture
Supplement.

                 "Clearing Agency" means an organization registered as a
"clearing agency" pursuant to Section 17A of the Exchange Act.

                 "Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time a
Clearing Agency or a Foreign Clearing Agency effects book-entry transfers and
pledges of securities deposited with the Clearing Agency or the Foreign
Clearing Agency.

                 "Closed-End Lease" means a lease obligation in respect of a
single vehicle which may arise pursuant to a master lease agreement providing
for the lease of a fleet of vehicles or pursuant to a lease agreement
providing for the lease of a single vehicle that, in each case, allows the
lessee thereunder to return the vehicle subject thereto to the lessor at or
prior to lease termination and obligates the lessee thereunder to pay to the
lessor at lease termination only Incidental Lease Termination Charges.

                 "Closing Date" means the Initial Closing Date or any Series
Closing Date.

                 "Code" means the Internal Revenue Code of 1986, as amended,
reformed or otherwise modified from time to time, and any successor statute
of similar import, in each case as in effect from time to time. References to
sections of the Code also refer to any successor sections.

                 "Collateral" is defined in Section 3.1 of the Base
Indenture.

                 "Collection Account" is defined in Section 5.1 of the Base
Indenture.

                 "Collections" means (a) all payments on the Collateral,
including, without limitation, (i) all monthly lease payments and other lease
payments on the Unit Leases, (ii) all proceeds from the sale or other
disposition of Unit Vehicles, including Recoveries, (iii) all insurance
proceeds and warranty payments with respect to Unit Vehicles, (iv) all
termination payments and Incidental Lease Termination Payments received in

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respect of the Unit Leases, (v) all other payments in respect of the Unit
Leases, (vi) all payments in respect of the Fleet Receivables and payments by
VMS under the Receivable Purchase Agreement, (vii) all payments by VMS or PHH
Consumer Lease under the Asset Sale Agreement and (viii) all payments in
respect of any Hedging Instruments in the Collateral relating to any Series
of Investor Notes, whether such payments are in the form of cash, checks,
wire transfers or other forms of payment and (b) all amounts earned on
Permitted Investments of funds in the Collection Account and, to the extent
so specified in an Indenture Supplement, in a Series Account.

                 "Common Member" means SPV, as the holder of the Common
Membership Interest.

                 "Common Membership Interest" means the Common Membership
Interest issued pursuant to the LLC Agreement.

                 "Consumer Lease" means an Open-End Lease or a Closed-End
Lease originated by PHH Consumer Lease, individually or on behalf of the
Origination Trust, that is in all material respects in a form attached to the
Series 1999-1 SUBI Servicing Supplement.

                 "Contingent Obligation" as applied to any Person, means any
direct or indirect liability, contingent or otherwise, of that Person (a)
with respect to any indebtedness, lease, dividend, letter of credit or other
obligation of another if the primary purpose or intent thereof by the Person
incurring the Contingent Obligation is to provide assurance to the obligee of
such obligation of another that such obligation of another will be paid or
discharged, or that any agreements relating thereto will be complied with, or
that the holders of such obligation will be protected (in whole or in part)
against loss in respect thereof or (b) under any letter of credit issued for
the account of that Person or for which that Person is otherwise liable for
reimbursement thereof.  Contingent Obligation shall include (a) the direct or
indirect guarantee, endorsement (otherwise than for collection or deposit in
the ordinary course of business), co-making, discounting with recourse or
sale with recourse by such Person of the obligation of another and (b) any
liability of such Person for the obligations of another through any agreement
(contingent or otherwise) (i) to purchase, repurchase or otherwise acquire
such obligation or any security therefor, or to provide funds for the payment
or discharge of such obligation (whether in the form of loans, advances,
stock purchases, capital contributions or otherwise), (ii) to maintain the
solvency of any balance sheet item, level of income or financial condition of
another or (iii) to make take-or-pay or similar payments if required
regardless of non-performance by any other party or parties to an agreement,
if in the case of any agreement described under subclause (i) or (ii) of this
sentence the primary purpose or intent thereof is as described in the
preceding sentence. The amount of any Contingent Obligation shall be equal to
the amount of the obligation so guaranteed or otherwise supported.

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                 "Contractual Obligation" means, with respect to any Person,
any provision of any security issued by that Person or of any indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument
to which that Person is a party or by which it or any of its properties is
bound or to which it or any of its properties is subject.

                 "Control" means (a) with respect to a Security Entitlement,
the Indenture Trustee (i) is identified in the records of the Securities
Intermediary for such Security Entitlement as the person having such Security
Entitlement against such Security Intermediary or (ii) has obtained the
agreement, in writing, of the Securities Intermediary for such Security
Entitlement that it will comply with orders of the Indenture Trustee
regarding the transfer or redemption of such Security Entitlement without
further consent of any other person; or (b) with respect to a United States
Security Entitlement, (i) the Indenture Trustee is a participant in the book
entry system maintained by the Federal Reserve Bank that is acting as a
fiscal agent for the issuer of such United States Security Entitlement and
such Federal Reserve Bank has indicated by book entry that such United States
Securities Entitlement has been credited to the Indenture Trustee's
securities account in such book entry system or (ii) (A) the Indenture
Trustee (x) is identified in the records of the Securities Intermediary for
such United States Security Entitlement as the person having such Security
Entitlement against such Securities Intermediary or (y) has obtained the
agreement, in writing, of the Securities Intermediary for such Security
Entitlement that it will comply with orders of the Indenture Trustee
regarding the transfer or redemption of such Security Entitlement without
further consent of any other person, (B) the Securities Intermediary for such
United States Securities Entitlement is a participant in the book entry
system maintained by the Federal Reserve Bank that is acting as fiscal agent
for the issuer of such United States Securities Entitlement and (C) such
Federal Reserve Bank has indicated by book entry that such United States
Securities Entitlement has been credited to such Securities Intermediary's
securities account in such book entry system.

                 "Contribution Agreement" means the Contribution Agreement,
dated as of the Initial Closing Date, between SPV and the Origination Trust,
as amended, modified or supplemented from time to time in accordance with its
terms.

                 "Controlled Group" means, with respect to any Person, such
Person, whether or not incorporated, and any corporation, trade or business
that is, along with such Person, a member of a controlled group of
corporations or a controlled group of trades or businesses, as described in
Sections 414(b) and (c), respectively of the Code.

                 "Corporate Trust Office" means the principal office of the
Indenture Trustee at which at any particular time its corporate trust

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business shall be administered, which office at the date of the execution of
the Indenture is located at 450 West 33rd Street, 14th Floor, New York, NY
10001-2597, Att: Capital Markets Fiduciary Services - VMS Auto Lease Backed
Securitization.

                 "Cost" means, with respect to any Paid-In Advance Vehicle,
the price paid for such Vehicle to the dealer, the manufacturer or the vendor
selling such Vehicle, plus delivery charges and taxes and any registration or
titling fees.

                 "Coupon" is defined in Section 2.1 of the Base Indenture.

                 "CP Rate" means the rate on commercial paper for each day
set forth in Statistical Release H.15(519), "Selected Interest Rates"
published by the Board Of Governors of the Federal Reserve System.

                 "Credit Enhancement" means, with respect to any Series of
Investor Notes, the subordination, cash collateral account, collateral
interest, letter of credit, surety bond, insurance policy, spread account,
reserve account, cross-support feature, interest rate swap, currency swap or
any other contract or agreement for the benefit of the holder of the Investor
Notes of such Series as designated in the related Indenture Supplement.

                 "Custodian Agreement" means the Custodian Agreement, dated
as of the Initial Closing Date, by and among the Custodian, the Servicer and
the Origination Trust, as amended, modified or supplemented from time to time
in accordance with its terms, and any other Custodian Agreement entered into
in accordance with the terms and conditions of the Origination Trust
Servicing Agreement.

                 "Custodian" means the party named as such in the Custodian
Agreement until a successor replaces it in accordance with the applicable
provisions of the Custodian Agreement and thereafter means the successor
serving thereunder.

                 "Default" means any occurrence that is, or with notice or
the lapse of time or both would become, an Event of Default.

                 "Definitions List" means this Definitions List, as amended
or modified from time to time.

                 "Definitive Notes" is defined in Section 2.10 of the Base
Indenture.

                 "Delinquency Ratio" means, for any specified Settlement
Date, the quotient, expressed as a percentage, of (a) the aggregate billings
with respect to all Leases and all Fleet Receivables which were unpaid for 60

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days or more from the original due date thereof as of the last day of the
immediately preceding Monthly Period divided by (b) the sum of (i) the
aggregate billings with respect to all Leases and all Fleet Receivables which
were unpaid as of the last day of the second preceding Monthly Period and
(ii) the aggregate amount billed with respect to all Leases and all Fleet
Receivables during the immediately preceding Monthly Period.

                 "Delivery" means (a) with respect to any Physical Property
(that is not either a United States Security Entitlement or a Security
Entitlement), physical delivery thereof to the Indenture Trustee or its
nominee or custodian by an effective endorsement, or registered in the name
of, the Indenture Trustee or its nominee or custodian endorsed in blank and
(b) with respect to any Uncertificated Security, the issuer thereof registers
the Indenture Trustee as the registered owner thereof or the Indenture
Trustee otherwise satisfies the requirements of Revised Article 8.

                 "Depository" is defined in Section 2.10 of the Base
         Indenture.

                 "Depository Agreement" means, with respect to a Series
having Book-Entry Notes, the agreement among the Issuer, the Indenture
Trustee and the Clearing Agency or the Foreign Clearing Agency, or as
otherwise provided in the related Indenture Supplement.

                 "Deposit Date" means each Business Day on which Collections
are deposited into the Collection Account.

                 "Deposit Report" is defined in Section 4.1 of the Base
Indenture.

                 "Determination Date" means the second Business Day prior to
each Settlement Date.

                 "Dividend Rate" means, with respect to each series of
Preferred Membership Interests, the rate at which distributions of interest
with respect to such Preferred Membership Interests are made.

                 "Dollar" and the symbol "$" mean the lawful currency of the
United States.

                 "Eligible Consumer Lease" means a Consumer Lease that as of
the date allocated to the Lease SUBI Portfolio satisfied the following
eligibility criteria:

                 a.  it was not a Charged-Off Lease;

                 b.  it was not an Ineligible Delinquent Lease;

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                 c.  it was an obligation of an Eligible Obligor;

                 d.  it had an initial term of 60 months or less;

                 e.  it was denominated and payable only in Dollars in the
         United States;

                 f.  it was originated and has been administered since
         origination in accordance with Applicable Law;

                 g.  it was originated in accordance with the Policies;

                 h.  it did not contravene in any material respect any
         Applicable Law and VMS or PHH Consumer Lease is not in violation in
         any material respect of any Applicable Law in connection with it;

                 i.  it was not subject to any dispute in whole or in part or
         to any offset, counterclaim, defense, rescission, recoupment or
         subordination;

                 j.  it was the legal, valid and binding obligation of the
         Obligor thereunder, enforceable against such Obligor to pay the full
         amount thereof in accordance with its terms, except as enforceability
         may be limited by applicable bankruptcy, insolvency, reorganization,
         moratorium or similar laws affecting the enforcement of creditors'
         rights generally and by general equitable principles (whether
         enforcement is sought by proceedings in equity or law);

                 k.  the Origination Trust has only one "original"
         counterpart of such Consumer Lease and such original is held by the
         Custodian;

                 l.  it is either an Open-End Lease or a Closed-End Lease;

                 m.  it is a "hell or high water" net lease under which the
         Obligor's payment obligations thereunder are absolute, unconditional
         and noncancellable and not subject to abatement or adjustment;

                 n.  the Obligor thereunder is required to maintain casualty
         insurance with respect to the related Leased Vehicle in accordance
         with the Policies;

                 o.  any consents, approvals or authorizations necessary for
         the assignment and sale thereof by PHH Consumer Lease to SPV and by
         SPV to the Origination Trust have been obtained;

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                 p.  if not originated by the Origination Trust, all right,
         title and interest in it has been validly sold by PHH Consumer Lease
         to SPV pursuant to the Asset Sale Agreement and validly assigned by
         SPV to the Origination Trust pursuant to the Contribution Agreement;

                 q.  the Obligor of which has accepted the related Leased
         Vehicle;

                 r.  it provides for equal monthly depreciation payments and
         accrues a finance or other lease charge on the Net Book Value of the
         related Leased Vehicle at a floating rate at least equal to the CP
         Rate from time to time or at a fixed rate;

                 s.  if a Closed-End Lease, the Stated Residual Value of the
         related Leased Vehicle was no greater than the ALG Residual Value
         thereof at origination;

                 t.  if a Fixed Rate Lease, on or before the date on which
         such Fixed Rate Lease was allocated to the Lease SUBI Portfolio, the
         Issuer held any Lease Rate Cap with respect to such Fixed Rate Lease
         required to be held by the Issuer by the terms of any Indenture
         Supplement;

                 u.  if a Floating Rate Lease, the Obligor thereunder has no
         right to convert the floating rate at which the finance charges
         accrue thereunder to a fixed rate; and

                 v.  the Leased Vehicle leased thereunder (x) is free and
         clear of all Liens (other than Permitted Liens) and (y) the
         Certificate of Title for such Leased Vehicle is registered in the
         name of the Origination Trust and indicates only a Lien in the name
         of (1) PHH Consumer Lease, in the case of a Consumer Lease originated
         by PHH Consumer Lease and assigned to the Origination Trust or a
         Consumer Lease originated by the Origination Trust prior to July 15,
         1999 or (2) SPV, in the case of all other Consumer Leases (or, such a
         Certificate of Title has been applied for).

                 "Eligible Counterparty" means a financial institution having
on the date of any acquisition of a Hedging Instrument commercial paper or
short-term deposit ratings which are equal to or higher than A-1 by Standard
& Poor's and P-1 by Moody's and unsecured debt ratings which are equal to or
higher than A by Standard & Poor's and A2 by Moody's and who, in the event
that its commercial paper or short-term deposit ratings are reduced below
such ratings, agrees to secure its obligations under such Hedging Instrument.

                 "Eligible Deposit Account" means (a) a segregated
identifiable trust account established in the trust department of a Qualified

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Trust Institution or (b) a separately identifiable deposit account
established in the deposit taking department of a Qualified Institution.

                 "Eligible Lease" means a Lease that as of the date allocated
to the Lease SUBI Portfolio was either an Eligible Consumer Lease or a Lease
arising under an Eligible Master Lease that satisfied the following
eligibility criteria:

                 (a)  it had an initial term of 120 months or less;

                 (b)  the Obligor of which has accepted the related Leased
         Vehicle;

                 (c) it provides for equal monthly depreciation payments and
         accrues a finance or other lease charge on the Net Book Value of the
         related Leased Vehicle at a floating rate at least equal to the CP
         Rate from time to time or at a fixed rate;

                 (d)  if a Closed-End Lease, the Stated Residual Value of the
         related Leased Vehicle was no greater than the ALG Residual Value
         thereof at origination;

                 (e)  if a Fixed Rate Lease, on or before the date on which
         such Fixed Rate Lease was allocated to the Lease SUBI Portfolio, the
         Issuer held any Lease Rate Cap with respect to such Fixed Rate Lease
         required to be held by the terms of any Indenture Supplement;

                 (f)  if a Floating Rate Lease and the Obligor thereunder has
         the right to convert the floating rate at which the finance charges
         accrue thereunder to a fixed rate, upon conversion the fixed rate
         will be at least equal to the sum of the PHH Treasury Note Rate on
         the conversion date and 0.50%; and

                 (h)  the Leased Vehicle leased thereunder (x) is free and
         clear of all Liens (other than Permitted Liens), (y) if such Leased
         Vehicle is subject to a certificate of title act or statute, the
         Certificate of Title for such Leased Vehicle is registered in the
         name of the Origination Trust and indicates only a Lien in the name
         of (1) VMS, in the case of a Lease originated by VMS and assigned to
         the Origination Trust or a Lease originated by the Origination Trust
         prior to July 15, 1999 or (2) SPV, in the case of all other Leases
         (or, such a Certificate of Title has been applied for) or (z) if such
         Leased Vehicle is not subject to a certificate of title act or
         statute, all filings necessary to evidence the security interest of
         (1) VMS, in the case of a Lease originated by VMS and assigned to the
         Origination Trust or (2) SPV, in the case of all other Leases, in
         such Leased Vehicle have been made in all appropriate jurisdictions.

                                     -13-

<PAGE>

                 "Eligible Master Lease" will mean each Master Lease
Agreement that as of the date the first Lease thereunder was allocated to the
Lease SUBI satisfied the following eligibility criteria:
                 (a)  it was not a Charged-Off Lease;

                 (b)   it was not an Ineligible Delinquent Lease;

                 (c)  it was an obligation of an Eligible Obligor;

                 (d)  it was denominated and payable only in Dollars in the
         United States;

                 (e)  it was originated and has been administered since
         origination in accordance with Applicable Law;

                 (f)  it was originated in accordance with the Policies;

                 (g)  it did not contravene in any material respect any
         Applicable Law and VMS is not in violation in any material respect of
         any Applicable Law in connection with it;

                 (h) it was not subject to any dispute in whole or in part or
         to any offset, counterclaim, defense, rescission, recoupment or
         subordination;

                 (i)  it was the legal, valid and binding obligation of the
         Obligor thereunder, enforceable against such Obligor to pay the full
         amount thereof in accordance with its terms, except as enforceability
         may be limited by applicable bankruptcy, insolvency, reorganization,
         moratorium or similar laws affecting the enforcement of creditors'
         rights generally and by general equitable principles (whether
         enforcement is sought by proceedings in equity or law);

                 (j)  the Origination Trust has only one "original"
         counterpart of such Master Lease Agreement and such original is held
         by the Custodian;

                 (k)  it is either an Open-End Lease or a Closed-End Lease;

                 (l)  it is a "hell or high water" net lease under which the
         Obligor's payment obligations thereunder are absolute, unconditional
         and noncancellable and not subject to abatement or adjustment;

                 (m)  the Obligor thereunder is required to maintain casualty
         insurance or to self-insure with respect to the related Leased
         Vehicles in accordance with the Policies;

                                     -14-

<PAGE>

                 (n)  any consents, approvals or authorizations necessary for
         the assignment and sale thereof by VMS to the Origination Trust have
         been obtained; and

                 (o) if not originated by the Origination Trust, all right,
         title and interest in it has been validly sold to the Origination
         Trust by VMS pursuant to that certain Assignment and Assumption
         Agreement dated December 17, 1998 or validly assigned to the
         Origination Trust by SPV pursuant to the Contribution Agreement and,
         if assigned by SPV to the Origination Trust, was validly sold by VMS
         to SPV pursuant to the Asset Sale Agreement.

                 "Eligible Obligor" means each Obligor in respect of a Master
Lease Agreement, a Consumer Lease or a Fleet Receivable that satisfies the
following eligibility criteria:

                 (a)  its billing address is located in the United States;

                 (b)  it is not the United States federal government, or any
         subdivision thereof, or any agency, department or instrumentality
         thereof;

                 (c)  it is not an Affiliate of ARAC; and

                 (d)  it is not the subject of any voluntary or involuntary
         bankruptcy proceeding, unless, in the case of a Master Lease
         Agreement, a bankruptcy court shall have entered an order reaffirming
         such Obligor's obligations under such Master Lease Agreement.

                 "Eligible Receivables" means, as of any date of
determination, each Fleet Receivable that satisfies the following eligibility
criteria:

                 (a)  it is an obligation of an Eligible Obligor;

                 (b) it is not a Charged-Off Receivable;

                 (c) it is denominated and payable only in Dollars in the
         United States;

                 (d) it and the related Fleet Service Contract do not
         contravene in any material respect any Applicable Law and VMS is not
         in violation in any material respect of any Applicable Law in
         connection with it or the related Fleet Service Contract;

                 (e) the related Fleet Service Contract was originated in
         accordance with the Policies;

                                     -15-

<PAGE>

                 (f) it has been billed, the goods or services giving rise to
         it have been provided and it is payable within 45 days of the billing
         date;

                 (g)  it is an "eligible asset" within the meaning of Rule
         3a-7 promulgated under the Investment Company Act;

                 (h)  it is not subject to the laws of any jurisdiction whose
         laws would prohibit the assignment and sale thereof by VMS to SPV
         pursuant to the Receivable Purchase Agreement and the contribution
         thereof by SPV to the Origination Trust pursuant to the Contribution
         Agreement;

                 (i)  any consents, approvals or authorizations necessary for
         the assignment and sale thereof by VMS to SPV pursuant to the
         Receivable Purchase Agreement and the contribution thereof by SPV to
         the Origination Trust pursuant to the Contribution Agreement have
         been obtained with respect to such Fleet Receivable;

                 (j)  all right, title and interest in it has been validly
         sold by VMS to SPV pursuant to the Receivable Purchase Agreement and
         validly assigned by SPV to the Origination Trust pursuant to the
         Contribution Agreement;

                 (k)  the Origination Trust has legal and beneficial
         ownership therein free and clear of all Liens other than Permitted
         Liens;

                 (l)  it is not subject to any dispute in whole or in part or
         to any offset, counterclaim, defense, rescission, recoupment or
         subordination;

                 (m)  it is at all times the legal, valid and binding
         obligation of the Obligor thereon, enforceable against such Obligor
         to pay the full amount thereof in accordance with its terms, except
         as enforceability may be limited by applicable bankruptcy,
         insolvency, reorganization, moratorium or similar laws affecting the
         enforcement of creditors' rights generally and by general equitable
         principles (whether enforcement is sought by proceedings in equity or
         law); and

                 (n) it constitutes an "account" or a "general intangible"
         under the applicable UCC.

                 "Enhancement Provider" means, with respect to any Series,
the Person, if any, designated as such in the related Indenture Supplement.

                                     -16-

<PAGE>

                 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute of similar import, in each case
as in effect from time to time. References to sections of ERISA also refer to
any successor sections.

                 "Euroclear" means Euroclear System.

                 "Event of Default" is defined in Section 9.1 of the Base
Indenture.

                 "Excess Consumer Lease Amount" means, as of any date of
determination during an Accrual Period, an amount equal to the excess, if
any, of (a) the aggregate Lease Balance of all Eligible Leases that are
Consumer Leases allocated to the Lease SUBI Portfolio as of the last day of
the Monthly Period immediately preceding the first day of such Accrual Period
over (b) an amount equal to 1.0% of the Aggregate Lease Balance as of such
date.

                 "Excess Damage Charges" means the charges under a Lease due
to damage to the related Leased Vehicle over a prescribed limit.

                 "Excess Longer-Term Lease Amount" means, as of any date of
determination during an Accrual Period, an amount equal to the greater of (a)
the excess, if any, of (i) the aggregate Lease Balance of all Eligible Leases
having remaining terms of longer than five years allocated to the Lease SUBI
Portfolio as of the last day of the Monthly Period immediately preceding the
first day of such Accrual Period over (ii) an amount equal to 15% of the
Aggregate Lease Balance as of such date and (b) the excess, if any, of (i)
the aggregate Lease Balance of all Eligible Leases having remaining terms of
longer than seven years allocated to the Lease SUBI Portfolio as of the last
day of the Monthly Period immediately preceding the first day of such Accrual
Period over (ii) an amount equal to 5% of the Aggregate Lease Balance as of
such date.

                 "Excess Mileage Charges" means the charges under a Lease due
to mileage on the related Leased Vehicle over a prescribed limit.

                 "Excess Paid-In-Advance Amount" means, as of any date of
determination during an Accrual Period, an amount equal to the greatest of
(a) the excess, if any, of (i) the aggregate Cost of each Paid-In Advance
Vehicle allocated to the Lease SUBI Portfolio as of the last day of the
Monthly Period immediately preceding the first day of such Accrual Period
(or, if any such Paid-In Advance Vehicle was allocated to the Lease SUBI
after the last day of such Monthly Period, the Cost thereof as of the date
such Paid-In Advance Vehicle was allocated to the Lease SUBI Portfolio) over
(ii) an amount equal to 10% of the Aggregate Unit Balance as of such date,
(b) the excess, if any, of (i) the aggregate Cost of each Paid-In Advance

                                     -17-

<PAGE>

Vehicle allocated to the Lease SUBI Portfolio for more than 60 days as of the
last day of the Monthly Period immediately preceding the first day of such
Accrual Period over (ii) an amount equal to 2.5% of the Aggregate Unit
Balance as of such date and (c) the aggregate Cost of each Paid-In Advance
Vehicle allocated to the Lease SUBI Portfolio for more than 120 days as of
the last day of the Monthly Period immediately preceding the first day of
such Accrual Period.

                 "Excess Residual Value Amount" means, as of any date of
determination during an Accrual Period, an amount equal to the excess, if
any, of (i) the Aggregate Residual Value Amount as of such date over (ii) an
amount equal to 10% of the Aggregate Unit Balance as of such date.

                 "Excess State Obligor Risk Amount" means, as of any date of
determination during an Accrual Period, an amount equal to the excess, if
any, of (a) the aggregate Lease Balance of all Eligible Leases the Obligor of
which is a state or local government or any subdivision thereof, or any
agency, department or instrumentality thereof allocated to the Lease SUBI
Portfolio as of the last day of the Monthly Period immediately preceding the
first day of such Accrual Period over (b) an amount equal to 3.0% of the
Aggregate Lease Balance as of such date.

                 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

                 "Existing Liens" means a claim for $914,160,108.23 owing to
The Chase Manhattan Bank.

                 "Expected Final Distribution Date" means, with respect to
any applicable Series of Investor Notes, the date stated in the related
Indenture Supplement as the date on which such Series of Investor Notes is
expected to be paid in full.

                 "FDIC" means the Federal Deposit Insurance Corporation.

                  "Fixed Rate Lease" means a Lease accruing finance charges
at a fixed rate per annum.

                 "Fleet Receivables" means all amounts payable under the
Fleet Service Contracts, a beneficial interest in a portion of which is
represented by the Fleet Receivable SUBI Certificate.

                 "Fleet Receivable SUBI" means that special unit of
beneficial interest in the Origination Trust created by the Fleet Receivable
SUBI Supplement in a pool of  Fleet Receivables acquired by SPV from VMS
pursuant to the Receivable Purchase Agreement and contributed by SPV to the
Origination Trust pursuant to the Contribution Agreement and all Origination

                                     -18-

<PAGE>

Trust Assets associated with the Fleet Receivables, including all right,
title and interest of SPV under the Receivables Purchase Agreement.

                 "Fleet Receivable SUBI Certificate" means the Class X 1999-
1B Sold SUBI Certificate, a certificate of beneficial ownership, representing
a portion of the Fleet Receivable SUBI issued pursuant to the Fleet
Receivable SUBI Supplement.

                 "Fleet Receivable SUBI Supplement" means the Sold SUBI
Supplement 1999-1B to the Origination Trust Agreement, dated as of the
Initial Closing Date, among SPV, as settlor and initial beneficiary, VMS, as
UTI Trustee and Servicer, and Wilmington Trust Company, as Delaware Trustee
and SUBI Trustee.

                 "Fleet Service Contract" means a fleet maintenance contract,
fleet management contract, fuel card contract or any other service contract
the fees for which are billed or would be billed by VMS, together with the
Leases.

                 "Floating Rate Lease" means a Lease accruing finance charges
at a floating rate per annum.

                 "Foreign Clearing Agency" means Cedel and Euroclear.

                 "GAAP" means the generally accepted accounting principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors and successors from time to time.

                 "Gain on Sale Account" is defined in Section 5.2 of the Base
Indenture.

                 "Global Note" is defined in Section 2.12 of the Base
         Indenture.

                 "Governmental Authority" means the United States of America,
any state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
or pertaining to government.

                 "Hedging Instrument" means one or more interest rate swap
contracts, interest rate cap agreements or similar contracts entered into by,
or assigned to, the Issuer in connection with the issuance of a Series of
Investor Notes, as specified in the related Indenture Supplement, providing
limited protection against interest rate risks.

                 "Hypothetical Yield Shortfall Amount" means, for any
Settlement Date, an amount equal to the product of (x) the excess, if any, of

                                     -19-

<PAGE>

the Minimum Yield Rate for such Settlement Date over the CP Rate as of the
last day of the immediately preceding Monthly Period, (y) the aggregate Lease
Balance of all Floating Rate Leases as of the last day of the immediately
preceding Monthly Period and (z) 2.75.

                 "Incidental Lease Termination Charges" means all Excess
Damage Charges, Excess Mileage Charges and any charges imposed upon the early
termination of a Lease.

                 "Indebtedness", as applied to any Person, means, without
duplication, (a) all indebtedness for borrowed money, (b) that portion of
obligations with respect to any lease of any property (whether real, personal
or mixed) that is properly classified as a liability on a balance sheet in
conformity with GAAP, (c) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed
money, (d) any obligation owed for all or any part of the deferred purchase
price for property or services, which purchase price is (i) due more than six
months from the date of the incurrence of the obligation in respect thereof
or (ii) evidenced by a note or similar written instrument, (e) all
indebtedness secured by any Lien on any property or asset owned by that
Person regardless of whether the indebtedness secured thereby shall have been
assumed by that Person or is nonrecourse to the credit of that Person, and
(f) without duplicating any of the foregoing, all Contingent Obligations of
such Person in respect of any of the foregoing.

                 "Indenture" means the Base Indenture and all amendments
thereof and supplements thereto, including any Indenture Supplement.

                 "Indenture Supplement" means, with respect to any Series of
Investor Notes, a supplement to the Base Indenture complying with the terms
of Section 2.2 of the Base Indenture, executed in conjunction with any
issuance of any Series of Investor Notes (or, in the case of the issuance of
Investor Notes on the Initial Closing Date, the supplement executed in
connection with the issuance of such Notes).

                 "Indenture Trustee" means the party named as such in the
Indenture until a successor replaces it in accordance with the applicable
provisions of the Indenture and thereafter means the successor serving
thereunder.

                 "Independent" means, when used with respect to any specified
Person, that the person (a) is in fact independent of the Issuer, any other
obligor upon the Investor Notes, VMS and any Affiliate of any of the
foregoing persons, (b) does not have any direct financial interest or any
material indirect financial interest in the Issuer, any such other obligor,
VMS or any Affiliate of any of the foregoing Persons and (c) is not connected
with the Issuer, any such other obligor, VMS or any Affiliate of any of the

                                     -20-

<PAGE>

foregoing Persons as an officer, employee, promoter, underwriter, trustee,
partner, director or Person performing similar functions.

                 "Independent Certificate" means a certificate or opinion to
be delivered to the Indenture Trustee under the circumstances described in,
and otherwise complying with, the applicable requirements of Section 13.1, of
the Base Indenture made by an Independent engineer, appraiser or other expert
appointed by the Issuer and approved by the Indenture Trustee in the exercise
of reasonable care, and such opinion or certificate shall state that the
signer has read the definition of "Independent" herein and that the signer is
Independent within the meaning thereof.
the Base Indenture.

                 "Independent Manager" is defined in the LLC Agreement.

                 "Ineligible Delinquent Lease" means (a) a Master Lease
Agreement as to which 50% or greater of the billings to the Obligor thereof
remain unpaid for more than 60 days from the original due date or which has
been declared in default under the Policies or (b) a Consumer Lease as to
which any amounts remain unpaid for more than 60 days from the original due
date or which has been declared in default under the Policies.

                 "Initial Aggregate Lease Balance" means $2,504,471,579.

                 "Initial Assignment" is defined in Section 2.1 of the
Transfer Agreement.

                 "Initial Closing Date" means June 30, 1999.

                 "Initial Cut-off Date" means June 18, 1999.

                 "Initial Invested Amount" means, with respect to any Series
of Investor Notes, the aggregate initial principal amount specified in the
related Indenture Supplement.

                 "Initial Units" means, as of the Initial Closing Date, all
Units allocated to the Lease SUBI Portfolio as of the Initial Closing Date.

                 "Insolvency Event" means, as to any Person:

                 (a)(i) a court having jurisdiction in the premises shall
         enter a decree or order for relief in respect of such Person in an
         involuntary case under the Bankruptcy Code or any applicable
         bankruptcy, insolvency or other similar law now or hereafter in
         effect, which decree or order is not stayed, or any other similar
         relief shall be granted under any applicable federal or state law,
         (ii) an involuntary case is commenced against such Person under any

                                     -21-

<PAGE>

         applicable bankruptcy, insolvency or other similar law now or
         hereafter in effect which remains undismissed, undischarged or
         unbonded for a period of 60 days or (iii) such Person shall have a
         decree or an order for relief entered with respect to it or commence
         a voluntary case under the Bankruptcy Code or any applicable
         bankruptcy, insolvency or other similar law now or hereafter in
         effect;

                 (b)      such Person shall consent to the appointment of a
         conservator or receiver or liquidator in any insolvency, readjustment
         of debt, marshaling of assets and liabilities or similar proceedings
         of or relating to all or substantially all of its property, or a
         decree or order of a court or agency or supervisory authority having
         jurisdiction in the premises for the appointment of a conservator or
         receiver or liquidator in any insolvency, readjustment of debt,
         marshaling of assets and liabilities or similar proceedings, or for
         the winding-up or liquidation of its affairs, shall have been entered
         against such Person; or such Person shall admit in writing its
         inability to pay its debts generally as they become due, file a
         petition to take advantage of any applicable insolvency or
         reorganization statute, make an assignment for the benefit of its
         creditors or voluntarily suspend payment of its obligations.

                 "Interest Period" means, with respect to any Series of
Investor Notes, the period specified in the related Indenture Supplement.

                 "Invested Amount" means, with respect to each Series of
Investor Notes, the amount specified in the related Indenture Supplement.

                 "Invested Percentage" means, with respect to any Series of
Investor Notes, the percentage specified in the related Indenture Supplement.

                 "Investment Company Act" means the Investment Company Act of
1940, as amended.

                 "Investor Noteholder" and "Holder" means the Person in whose
name an Investor Note is registered in the Note Register.

                 "Investor Notes" means any one of the promissory notes
(including, without limitation, the Bearer Notes, the Registered Notes or the
Global Notes) issued by the Issuer, executed by the Issuer and authenticated
by the Indenture Trustee substantially in the form (or forms in the case of a
Series of Notes with multiple Classes) of the investor note attached to the
related Indenture Supplement.

                 "Issuer" means Greyhound Funding LLC, a Delaware limited
liability company.

                                     -22-

<PAGE>

                 "Issuer Accounts" means the Collection Account and each
Series Account.

                 "Issuer Assets" means all assets of the Issuer, including,
among other things, the SUBIs, the SUBI Certificates (including all rights of
the holder thereof under the Origination Trust Documents), the Units, any
Hedging Instruments, the Transfer Agreement, the Administration Agreement,
the Management Agreement and all proceeds of the foregoing.

                 "Issuer General Account" is defined in the LLC Agreement.

                 "Issuer Obligations" means all principal and interest, at
any time and from time to time, owing by the Issuer on the Investor Notes and
all costs, fees and expenses payable by, or obligations of, the Issuer under
the Indenture.

                 "Issuer Order" and "Issuer Request" means a written order or
request signed in the name of the Issuer by any one of its Authorized
Officers and delivered to the Indenture Trustee.

                 "Lease Balance" means, as of any date of determination, with
respect to (a) any Open-End Lease, an amount equal to the Net Book Value of
the Leased Vehicle subject to such Lease and (b) any Closed-End Lease, an
amount equal to the sum of all remaining monthly lease payments (other than
payments of finance charges and other incidental fees) due in respect of such
Leased Vehicle on or after such date; provided, however that the Lease
Balance of a Charged-Off Lease shall be zero.

                 "Lease Balance Decline" means, for any Lease for any
Settlement Date, an amount equal to the sum of (a) the Lease Balance of such
Lease as of the last day of the Monthly Period preceding the Monthly Period
immediately preceding such Settlement Date less the Lease Balance of such
Lease as of the last day of the Monthly Period immediately preceding such
Settlement Date plus (b), in the case of a Closed-End Lease, the Net Book
Value of the related Unit Vehicle if such Unit Vehicle shall have become a
Residual Value Vehicle during the Monthly Period immediately preceding such
Settlement Date.

                 "Lease" means an Open-End Lease or a Closed-End Lease
originated by or on behalf of VMS or the Origination Trust pursuant to a
Master Lease Agreement or a Consumer Lease originated by or on behalf of VMS
or the Origination Trust.

                 "Leased Vehicle" means the Vehicle subject to a Lease.

                                     -23-

<PAGE>

                 "Lease Rate Cap" means, with respect to any Series of
Investor Notes, the interest rate caps that are required to be maintained by
the Issuer pursuant to the related Indenture Supplement.

                 "Lease SUBI" means that special unit of beneficial interest
in the Origination Trust created by the Lease SUBI Supplement.

                 "Lease SUBI Certificate" means the certificate of beneficial
ownership, representing beneficial ownership in the Sold Units allocated to
the Lease SUBI Portfolio issued pursuant to the Lease SUBI Supplement.

                 "Lease SUBI Portfolio" or "1999-1A Sold SUBI Portfolio"
means the Origination Trust Assets that are from time to time allocated to
the Lease SUBI in accordance with the terms of the Origination Trust
Documents.

                 "Lease SUBI Supplement" means the Sold SUBI Supplement 1999-
1A to the Origination Trust Agreement, dated as of the Initial Closing Date,
among SPV, as settlor and initial beneficiary, VMS, as UTI Trustee and
Servicer, and Wilmington Trust Company, as Delaware Trustee and SUBI Trustee.

                 "Lien" means, when used with respect to any Person, any
interest in any real or personal property, asset or other right held, owned
or being purchased or acquired by such Person which secures payment or
performance of any obligation, and shall include any mortgage, lien, pledge,
encumbrance, charge, retained security title of a conditional vendor or
lessor, or other security interest of any kind, whether arising under a
security agreement, mortgage, lease, deed of trust, chattel mortgage, assign-
ment, pledge, retention or security title, financing or similar statement, or
notice or arising as a matter of law, judicial process or otherwise.

                 "LLC Agreement" means the Limited Liability Agreement of the
Issuer, dated as of the Initial Closing Date, as amended, modified or
supplemented from time to time in accordance with its terms.

                 "Luxembourg Agent" is defined in Section 2.3(c) of the Base
Indenture.

                 "Majority in Interest" of each Series of Investor Notes
means Noteholders of such Series holding Investor Notes evidencing more than
50% by outstanding principal amount of each Class of Investor Notes of such
Series.

                 "Management Agreement" means the Management Agreement, dated
as of the Initial Closing Date, by and among the Managing Agent, the Issuer
and the Administrator, as amended, modified or supplemented from time to time
in accordance with its terms.

                                     -24-

<PAGE>

                 "Manager" is defined in the LLC Agreement.

                 "Managing Agent" means Global Securitization Services LLC or
a successor Managing Agent under the Management Agreement.

                 "Master Lease Agreement" means each master lease agreement
between an Obligor and VMS and assigned by VMS to the Origination Trust or
assigned by VMS to SPV and by SPV to the Origination Trust or between an
Obligor and the Origination Trust, in each case, in all material respects in
a form attached to the Series 1999-1 SUBI Servicing Supplement.

                 "Material Adverse Effect" means, with respect to any
occurrence, event or condition:

                 (i) a material adverse effect on the Issuer's title to the
         SUBI Certificates or the beneficial interest in the Sold Units or
         Fleet Receivables represented thereby;

                 (ii) a material adverse effect on the validity, status,
         perfection or priority of the Lien of the Indenture Trustee in the
         Collateral;

                 (iii) a material adverse effect on the business, properties,
         financial condition or results of operations of the Issuer or the
         ability of the Issuer to perform its obligations under the Indenture;

                 (iv) a material adverse effect on the business, properties,
         financial condition or results of operations of ARAC and its
         subsidiaries as a whole; or

                 (v) a material adverse effect on the validity or
         enforceability of the Indenture or any of the other Transaction
         Documents.

                 "Maximum Invested Amount" means, with respect to each Series
of Investor Notes, the amount, if any, specified in the related Indenture
Supplement.

                 "Member" means a Preferred Member or the Common Member.

                 "Membership Interest" means a Preferred Membership Interest
or the Common Membership Interest.

                 "Minimum Adjusted Aggregate Unit Balance" means the sum of
the numerators used on such date to calculate the Invested Percentage with

                                     -25-

<PAGE>

respect to Collections for all Series of Outstanding Investor Notes on such
date.

                 "Minimum Yield Rate" means, for any Settlement Date, a rate
per annum equal to the sum of (i) the Weighted Average Cost of Funds for such
Settlement Date, (ii) the Weighted Average Servicing Fee Percentage for such
Settlement Date and (iii) 0.25%.

                 "Monthly Period" means, unless otherwise defined in any
Indenture Supplement, the period from and including a Period End Date (or, in
the case of the initial Monthly Period, from the Initial Cutoff Date) to but
excluding the succeeding Period End Date.

                 "Monthly Residual Value Gain" means, for any Monthly Period,
an amount equal to the excess, if any, of  (a)  all Termination Proceeds
received by the Servicer during such Monthly Period for all Unit Vehicles
that became Residual Value Vehicles during such Monthly Period and all prior
Monthly Periods over (b) the aggregate Net Book Values of all Unit Vehicles
that became Residual Value Vehicles during such Monthly Period.

                 "Monthly Residual Value Loss" means, for any Monthly Period,
an amount equal to the excess, if any, of  (a) the aggregate Net Book Values
of all Unit Vehicles that became Residual Value Vehicles during such Monthly
Period over (b) all Termination Proceeds received by the Servicer during such
Monthly Period for all Unit Vehicles that became Residual Value Vehicles
during such Monthly Period and all prior Monthly Periods.

                 "Monthly Servicer Advance" means the aggregate amount of
funds advanced by the Servicer to the Issuer on any Settlement Date for
deposit in the Collection Account in respect of monthly lease payments due
but not received during the immediately preceding Monthly Period on the Sold
Units and in respect of Fleet Receivables due but not received during the
immediately preceding Monthly Period in accordance with the Series 1999-1
SUBI Servicing Supplement.

                 "Monthly Servicer Advance Reimbursement Amount" means, on
any Settlement Date, the aggregate amount payable to the Servicer in
reimbursement of amounts previously advanced by the Servicer in respect of
delinquent monthly lease payments and delinquent Fleet Receivables pursuant
to Section 7.4 of the Series 1999-1 SUBI Servicing Supplement on such
Settlement Date.

                 "Monthly Settlement Statement" means, with respect to each
Series of Outstanding Investor Notes, the settlement statement in the form
attached to the related Indenture Supplement delivered by the Issuer to the
Indenture Trustee pursuant to Section 4.4(a) of the Base Indenture.

                                     -26-

<PAGE>

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

                 "Net Book Value" means, as of any date of determination
during an Accrual Period with respect to each Leased Vehicle, such Leased
Vehicle's Capitalized Cost minus the sum of all monthly lease payments billed
thereunder  (other than payments of finance charges and other incidental
fees) in respect of such Leased Vehicle through such date.

                 "1999-1B Invested Amount" is defined in the Fleet Receivable
SUBI Supplement.

                 "1999-1B Sold SUBI Portfolio" means the Origination Trust
Assets that are from time to time allocated to the Fleet Receivable SUBI in
accordance with the terms of the Origination Trust Documents.

                 "Note Rate" means, with respect to any Series of Investor
Notes, the annual rate at which interest accrues on the Investor Notes of
such Series of Investor Notes (or formula on the basis of which such rate
shall be determined) as stated in the related Indenture Supplement.

                 "Note Register" means the register maintained pursuant to
Section 2.4(a) of the Base Indenture, providing for the registration of the
Investor Notes and transfers and exchanges thereof.

                 "Obligor" means, with respect to any Lease or Fleet
Receivable, the Person or Persons obligated to make payment with respect to
such Lease or Fleet Receivable, including any guarantor thereof.

                 "Officer's Certificate" means a certificate signed by an
Authorized Officer of the Issuer, SPV, the Origination Trust, the Servicer or
the Administrator, as the case may be.

                 "Open-End Lease" means a lease obligation in respect of a
single vehicle which may arise pursuant to a master lease agreement providing
for the lease of a fleet of vehicles or pursuant to a lease agreement
providing for the lease of a single vehicle that, in each case, obligates the
lessee thereunder to pay the lessor at lease termination any deficit between
the sales proceeds from the sale of the vehicle subject thereto and the book
value thereof (other than the portion of any deficit resulting from the sales
proceeds being less than 16% of the fair market value thereof determined in
accordance with such lease).

                 "Opinion of Counsel" means a written opinion from legal
counsel who is acceptable to the Indenture Trustee.  The counsel may be an
employee of or counsel to the Issuer, SPV, VMS, the Origination Trust, the
Administrator or the Servicer, as the case may be.

                                     -27-

<PAGE>

                 "Origination Trust" means D.L. Peterson Trust, a statutory
business trust organized under the laws of the State of Delaware.

                 "Origination Trust Agreement" means the Amended and Restated
Origination Trust Agreement, dated as of the Initial Closing Date, among SPV,
as settlor and initial beneficiary, VMS, as UTI Trustee, and Wilmington Trust
Company, as Delaware Trustee, as amended, supplemented and modified by the
Lease SUBI Supplement and the Fleet Receivable SUBI Supplement and as the
same may be further amended, supplemented or modified from time to time.

                 "Origination Trust Assets" means all assets, at any time,
owned by the Origination Trust at such time.

                 "Origination Trust Documents" means the Origination Trust
Agreement, including the Lease SUBI Supplement and the Fleet Receivable SUBI
Supplement, the Origination Trust Servicing Agreement, including the Series
1999-1 SUBI Servicing Supplement, the Custodian Agreement, the SUBI
Certificates, the Receivable Purchase Agreement, the Asset Sale Agreement and
the Contribution Agreement.

                 "Origination Trust Servicing Agreement" means the
Origination Trust Servicing Agreement, dated as of the Initial Closing Date,
between the Origination Trust and the Servicer as amended, supplemented and
modified by the Series 1999-1 SUBI Servicing Supplement and as the same may
be further amended, supplemented or modified from time to time.

                 "Outstanding" has the meaning, with respect to any Series of
Investor Notes, set forth in the related Indenture Supplement.

                 "Overconcentration Amount" means, as of any date of
determination during an Accrual Period, an amount equal to the greatest of
(a) the aggregate Lease Balance of the Eligible Leases to which the Obligors
having the five largest aggregate Lease Balances of Eligible Leases allocated
to the Lease SUBI Portfolio are a party as of the last day of the Monthly
Period immediately preceding the first day of such Accrual Period over (ii)
an amount equal to 15% of the Aggregate Lease Balance as of such date, (b)
the aggregate Lease Balance of the Eligible Leases to which the Obligors
having the ten largest aggregate Lease Balances of Eligible Leases allocated
to the Lease SUBI Portfolio are a party as of the last day of the Monthly
Period immediately preceding the first day of such Accrual Period over (ii)
an amount equal to 25% of the Aggregate Lease Balance as of such date and (c)
the excess, if any, of (i) the aggregate Lease Balance of the Eligible Leases
to which the Obligor having the largest aggregate Lease Balance of Eligible
Leases allocated to the Lease SUBI Portfolio is a party as of the last day of
the Monthly Period immediately preceding the first day of such Accrual Period
over (ii) an amount equal to 4% of the Aggregate Lease Balance as of such
date; provided, however that if the long-term debt obligations of such

                                     -28-

<PAGE>

Obligor are not rated at least Baa3 by Moody's as of such date, the amount in
this clause (ii) shall equal 3% of the Aggregate Lease Balance as of such
date.

                 "Paid-In Advance Loss Ratio" means, for any specified
Settlement Date, the quotient, expressed as a percentage, of (a) the excess,
if any, of (i) the aggregate Cost of all Unit Paid-In Advance Vehicles that
became Rejected Paid-In Advance Vehicles during the immediately preceding
Monthly Period over (ii) all Paid-In Advance Proceeds received by the
Servicer during the preceding Monthly Period for all Unit Paid-In Advance
Vehicles that became Rejected Paid-In Advance Vehicles during such Monthly
Period and all prior Monthly Periods divided by (b) the aggregate Cost of all
Unit Paid-In Advance Vehicles that became Rejected Paid-In Advance Vehicles
during the immediately preceding Monthly Period.

                 "Paid-In Advance Proceeds" means for any Rejected Paid-In
Advance Vehicle the sum of all amounts received by the Servicer upon, after
or in connection with the sale or other disposition of such Rejected Paid-In
Advance Vehicle, net of any and all out-of-pocket costs and expenses incurred
by the Servicer in connection with such sale or other disposition, and any
and all amounts received from the related Obligor in connection with such
Rejected Paid-In Advance Vehicle.

                 "Paid-In Advance Vehicle" means a Vehicle acquired at the
request of an Obligor who is either a party to a Master Lease Agreement or
who has agreed to be bound by a Master Lease Agreement but not yet accepted
by such Obligor.

                 "Paying Agent" means any paying agent appointed pursuant to
Section 2.6 of the Base Indenture.

                 "Payment Date" means, with respect to each Series of
Investor Notes, the dates set forth in the related Indenture Supplement.

                 "PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA.

                 "Pension Plan" means any "employee pension benefit plan", as
such term is defined in ERISA, which is subject to Title IV of ERISA (other
than a "multiemployer plan", as defined in Section 4001 of ERISA) and to
which any company in the Controlled Group has liability, including any
liability by reason of having been a substantial employer within the meaning
of Section 4063 of ERISA for any time within the preceding five years or by
reason of being deemed to be a contributing sponsor under Section 4069 of
ERISA.

                                     -29-

<PAGE>

                 "Period End Date" means each date set forth in Schedule X to
the Series 1999-1 SUBI Servicing Supplement, as such schedule is amended and
supplemented from time to time in accordance with the terms of the Series
1999-1 SUBI Servicing Supplement.

                 "Permitted Investments" means negotiable instruments or
securities, payable in Dollars, issued by an entity organized under the laws
of the United States of America and represented by instruments in bearer or
registered or in book-entry form which evidence (excluding any security with
the "r" symbol attached to its rating):

                 (i) obligations the full and timely payment of which are to
         be made by or is fully guaranteed by the United States of America
         other than financial contracts whose value depends on the values or
         indices of asset values;

                 (ii) demand deposits of, time deposits in, or certificates
         of deposit issued by, any depositary institution or trust company
         incorporated under the laws of the United States of America or any
         state thereof whose short-term debt is rated P-1 or higher by Moody's
         and "A-1+" or higher by Standard & Poor's and subject to supervision
         and examination by Federal or state banking or depositary institution
         authorities; provided, however, that at the earlier of (x) the time
         of the investment and (y) the time of the contractual commitment to
         invest therein, the certificates of deposit or short-term deposits,
         if any, or long-term unsecured debt obligations (other than such
         obligation whose rating is based on collateral or on the credit of a
         Person other than such institution or trust company) of such
         depositary institution or trust company shall have a credit rating
         from Standard & Poor's of "A-1+", in the case of certificates of
         deposit or short-term deposits, or a rating from Standard & Poor's
         not lower than "AA", in the case of long-term unsecured debt obli-
         gations;

                 (iii) commercial paper having, at the earlier of (x) the
         time of the investment and (y) the time of the contractual commitment
         to invest therein, a rating from Standard & Poor's of "A-1+";

                 (iv) bankers' acceptances issued by any depositary
         institution or trust company described in clause (ii) above;

                 (v) investments in money market funds rated "AAAm" by
         Standard & Poor's or otherwise approved in writing by Standard &
         Poor's;

                 (vi) Eurodollar time deposits having a credit rating from
         Standard & Poor's of "A-1+";

                                     -30-

<PAGE>

                 (vii) repurchase agreements involving any of the Permitted
         Investments described in clauses (i) and (vi) above and the
         certificates of deposit described in clause (ii) above which are
         entered into with a depository institution or trust company, having a
         commercial paper or short-term certificate of deposit rating of
         "A-1+" by Standard & Poor's and P-1 by Moody's or which otherwise is
         approved as to collateralization by the Rating Agencies; and

                 (viii) any other instruments or securities, if the Rating
         Agencies confirm in writing that the investment in such instruments
         or securities will not adversely affect any ratings with respect to
         any Series of Investor Notes.

                 "Permitted Liens" means (i) Liens for current taxes not
delinquent or for taxes being contested in good faith and by appropriate
proceedings, and with respect to which adequate reserves have been
established, and are being maintained, in accordance with GAAP, (ii)
mechanics', materialmen's, landlords', warehousemen's and carrier's Liens,
and other Liens imposed by law, securing obligations arising in the ordinary
course of business that are not more than thirty days past due or are being
contested in good faith and by appropriate proceedings and with respect to
which adequate reserves have been established, and are being maintained, in
accordance with GAAP, (iii) on the Initial Closing Date only, the Existing
Liens, (iv) Liens in favor of the Origination Trust in the Leased Vehicles,
(v) Liens in favor of the Issuer pursuant to the Transfer Agreement, (vi)
Liens in favor of the Indenture Trustee pursuant to the Indenture, and (vii)
Liens in favor of an Enhancement Provider, provided, however, that such Liens
are subordinate to the Liens in favor of the Indenture Trustee and have been
consented to by the Indenture Trustee.

                 "Person" means any natural person, corporation, business
trust, joint venture, association, limited liability company, partnership,
joint stock company, corporation, trust, unincorporated organization or
Government Authority.

                 "PHH Consumer Lease" means PHH Personal Lease Corporation, a
Maryland corporation.

                 "PHH Treasury Note Rate" means, on any day between the 16th
day of the month through the 15th day of the following month, the interest
rate that is quoted in the Federal Reserve Statistical Release (H.15 Report)
for two year treasury constant maturities on the fifteenth day of that month,
or the first business day thereafter if the fifteenth day of the month falls
on a non-business day.

                 "Physical Property" means banker's acceptances, commercial
paper, negotiable certificates of deposits and other obligations that

                                     -31-

<PAGE>

constitute "instruments" within the meaning of Section 9-105(l)(i) of the
applicable UCC and are susceptible to physical delivery and Certificated
Securities.

                 "Policies" means the standards, policies and procedures,
including but not limited to the credit and residual accrual policies applied
by the Servicer in originating Leases and those applied by the Servicer in
its collection and repossession activities.

                 "Pool Factor" means, except with respect to any Series of
Notes issued in more than one Class, a number carried out to seven decimals
representing the ratio of the applicable Invested Amount as of such Record
Date (determined after taking into account any reduction in the Invested
Amount which will occur on the following Payment Date) to the applicable
Initial Invested Amount, and with respect to a Series of Notes having more
than one Class, as specified in the Indenture Supplement relating to such
Series.

                 "Potential Amortization Event" means any occurrence or event
which, with the giving of notice, the passage of time or both, would
constitute an Amortization Event.

                 "Potential Termination Event" means any occurrence or event
which, with the giving of notice, the passage of time or both, would
constitute a Termination Event.

                 "Preferred Member" means a Person in whose name a Preferred
Membership Interest is registered in the Register.

                 "Preferred Membership Interests"means the Preferred
Membership Interests issued pursuant to the LLC Agreement.

                 "Principal Payment Amount" means, for any Settlement Date,
the sum of (a) the Lease Balance Declines for each Unit Lease for such
Settlement Date and (b) the aggregate Cost of all Paid-In Advance Vehicles
that became Rejected Paid-In Advance Vehicles during the immediately
preceding Monthly Period.

                 "Principal Terms" is defined in Section 2.2 of the Base
Indenture.

                 "Proceeding" means any suit in equity, action or law or
other judicial or administrative proceeding.

                 "Qualified Institution" means a depository institution
organized under the laws of the United States of America or any State thereof
or incorporated under the laws of a foreign jurisdiction with a branch or

                                     -32-

<PAGE>

agency located in the United States of America or any State thereof and
subject to supervision and examination by federal or state banking
authorities which at all times has the Required Rating and, in the case of
any such institution organized under the laws of the United States of
America, whose deposits are insured by the FDIC.

                 "Qualified Trust Institution" means an institution organized
under the laws of the United States of America or any State thereof or
incorporated under the laws of a foreign jurisdiction with a branch or agency
located in the United States of America or any State thereof and subject to
supervision and examination by federal or state banking authorities which at
all times (i) is authorized under such laws to act as a trustee or in any
other fiduciary capacity, (ii) has not less than one billion dollars in
assets under fiduciary management, and (iii) has a long term deposits rating
of not less than "BBB-" by Standard & Poor's and Baa3 by Moody's.

                 "Quarterly Compliance Certificate" is defined in Section
4.1(a) of the Base Indenture.

                 "Rating Agency" means, with respect to each Series of Notes,
the rating agency or agencies, if any, specified in the related Indenture
Supplement.

                 "Rating Agency Condition" means, the notification in writing
by the Rating Agencies that a proposed action will not result in a reduction
or withdrawal by each such Rating Agency of the rating of any Class of any
Series of Outstanding Investor Notes rated by such Rating Agency.

                 "Receivable Purchase Agreement" means the Receivable
Purchase Agreement, dated as of the Initial Closing Date, by and between SPV
and VMS, as amended, modified or supplemented from time to time in accordance
with its terms.

                 "Receivable Purchase Termination Event" is defined in the
Receivable Purchase Agreement.

                 "Record Date" means, with respect to each Series of Notes,
the dates specified in the related Indenture Supplement.

                 "Recoveries" means any amounts received by the Servicer with
respect to Charged-Off Leases, including Collections received from Obligors
and liquidation proceeds of the related Leased Vehicles, net of (i) any
applicable rental receipts tax, sales and use tax, personal property tax, ad
valorem tax or any other tax or any governmental fees or charges, (ii) any
and all out-of-pocket costs and expenses incurred by the Servicer in
connection with such recovery and (iii) any amounts remitted to the related
Obligor as required by applicable law or the related Lease.

                                     -33-

<PAGE>

 .                "Register" means the register mentioned in Section 11.3 of
the LLC Agreement.

                 "Registered Notes" is defined in Section 2.1 of the Base
Indenture.

                 "Rejected Paid-In Advance Vehicles" means, for any Monthly
Period, all Unit Paid-In Advance Vehicles which were sold or otherwise
disposed of after rejection thereof by the related Obligor during such
Monthly Period.

                 "Related Rights" means, with respect to any Unit, all
Origination Trust Assets to the extent such assets are associated with such
Unit.

                 "Repurchase Amount" means, with respect to any Series of
Investor Notes, the amount specified in the related Indenture Supplement.

                 "Required Aggregate Asset Amount" means the sum of the
Required Asset Amounts with respect to all Series of Outstanding Investor
Notes.

                 "Required Asset Amount" means, with respect to any Series of
Investor Notes, the amount specified in the related Indenture Supplement.

                 "Required Overcollateralization Amount" means, with respect
to any Series of Investor Notes, the amount specified in the related
Indenture Supplement.

                 "Required Rating" means a short-term certificate of deposit
rating from Moody's of P-1 and from Standard & Poor's of "A-1" and a long-
term unsecured debt rating of not less than Aa3 by Moody's and "AA-" by
Standard & Poor's.

                 "Requirements of Law" means, with respect to any Person or
any of its property, the certificate of incorporation or articles of
association and by-laws or other organizational or governing documents of
such Person or any of its property, and any law, treaty, rule or regulation,
or determination of any arbitrator or Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject, whether Federal, state or
local (including, without limitation, usury laws, the Federal Truth in
Lending Act and retail installment sales acts).

                 "Residual Value Loss" means, for any Unit Vehicle which
became a Residual Value Vehicle during a Monthly Period, an amount equal to

                                     -34-

<PAGE>

(a) the Stated Residual Value of such Unit Vehicle minus (b) all Termination
Proceeds with respect to such Unit Vehicle during such Monthly Period.

                 "Residual Value Loss Ratio" means, for any specified
Settlement Date, the quotient, expressed as a percentage, of (a) the sum of
the Residual Value Losses for all Unit Vehicles that became Residual Value
Vehicles during the preceding Monthly Period minus all Termination Proceeds
included in clauses (i) and (ii) of the definition thereof received by the
Servicer during the preceding Monthly Period for all Unit Vehicles that
became Residual Value Vehicles during prior Monthly Periods divided by (b)
the sum of the Stated Residual Values for all Unit Vehicles that became
Residual Value Vehicles during the preceding Monthly Period.

                 "Residual Value Vehicles" means, for any Monthly Period, all
Unit Vehicles subject to Closed-End Leases (other than Unit Vehicles subject
to Charged-off Leases) which were sold or otherwise disposed of after
termination or expiration of the related Closed-End Lease during such Monthly
Period.

                 "Responsible Officer" means, with respect to the Indenture
Trustee, any officer within the Corporate Trust Office, including any
Assistant Vice President, Vice President, any Secretary or Assistant
Secretary or any other officer of the Indenture Trustee customarily
performing functions similar to those performed by any Person who at the time
shall be an above-designated officer and having direct responsibility for
administration of the Indenture and the applicable Series Supplement and also
any particular officer to whom any corporate trust matter is referred because
of such officer's knowledge of and familiarity with the particular subject.

                 "Revised Article 8" means Revised Article 8 (1994 Version)
(and corresponding amendments to Article 9) as promulgated by the National
Conference of Commissioners on Uniform State Laws.

                 "Revolving Period" means, with respect to any Series of
Investor Notes, the period specified in the related Indenture Supplement.

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

                 "Securities Act" means the Securities Act of 1933, as
amended.

                 "Securities Intermediary" means a "securities intermediary"
within the meaning of Section 8-102(a)(14) of Revised Article 8.

                 "Securitization" is defined in the Origination Trust
Agreement.

                                     -35-

<PAGE>

                 "Security Entitlement" means a "security entitlement" within
the meaning of Section 8-102(a)(17) of Revised Article 8.

                 "Series" means any Series of Investor Notes, which may
include within any such Series a Class or Classes of Investor Notes
subordinate to another such Class or Classes of Investor Notes.

                 "Series Gain on Sale Account Percentage" means, with respect
to any Series of Investor Notes, the percentage specified in the related
Indenture Supplement.

                 "Series Account" means any account or accounts established
pursuant to an Indenture Supplement for the benefit of a Series of Notes.

                 "Series Administrator Fee," with respect to any Series of
Notes, that portion of the Administrator Fee payable from Collections
allocable to such Series pursuant to the related Indenture Supplement.

                 "Series Closing Date" means, with respect to any Series of
Investor Notes, the date
of issuance of such Series of Investor Notes, as specified in the related
Indenture Supplement.

                 "Series 1999-1 SUBI Servicing Supplement" means the Series
1999-1 Servicing Supplement to the Origination Trust Servicing Agreement,
dated as of the Initial Closing Date,
between the Origination Trust and the Servicer.

                 "Series Note Termination Date" means, with respect to any
Series of Investor Notes, the date stated in the related Indenture Supple-
ment.

                 "Series Servicing Fee," with respect to any Series of Notes,
that portion of the Servicing Fee payable from Collections allocable to such
Series pursuant to the related Indenture Supplement.

                 "Series Servicing Fee Percentage" means, with respect to any
Series of Notes, the amount specified in the related Indenture Supplement.

                 "Series Termination Date" means, with respect to any Series
of Investor Notes, the date stated in the related Indenture Supplement as the
termination date.

                 "Servicer" means VMS in its capacity as servicer under the
Origination Trust Servicing Agreement.

                                     -36-

<PAGE>

                 "Servicer Termination Event" is defined in the Origination
Trust Servicing Agreement.

                 "Servicing Fee" is defined in the Origination Trust
Servicing Agreement.

                 "Settlement Date" means the 7th day of each month, or if
such date is not a Business Day, the next succeeding Business Day, commencing
August 9, 1999.

                 "Settlement Statement" is defined in Section 4.1 of the Base
Indenture.

                 "Sold Units" means, collectively, the Initial Units and the
Additional Units.

                 "Special Purpose Entity" is defined in the Origination Trust
Agreement.

                 "SPV" means Raven Funding LLC, a Delaware limited liability
company.

                 "Stated Residual Value" means, for any Unit Vehicle subject
to a Closed-End Lease, the stated residual value of such Unit Vehicle
established at the time of origination of such Closed-End Lease in accordance
with the Policies.

                 "SUBI Assets" is defined in the Origination Trust Agreement.

                 "SUBIs" means the Fleet Receivable SUBI and the Lease SUBI.

                 "SUBI Certificates" means the Fleet Receivable SUBI
Certificate and the Lease SUBI Certificate.

                 "SUBI Portfolio" is defined in the Origination Trust
Agreement.

                 "Subsidiary" means, with respect to any Person (herein
referred to as the "parent"), any corporation, partnership, association or
other business entity (a) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary
voting power or more than 50% of the general partnership interests are, at
the time any determination is being made, owned, controlled or held by the
parent or (b) that is, at the time any determination is being made, otherwise
controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.

                                     -37-

<PAGE>

                 "Tax Opinion" means an opinion of counsel to be delivered in
connection with the issuance of a new Series of Investor Notes to the effect
that, for United States federal income tax purposes, (i) the issuance of such
new Series of Notes will not affect adversely the United States federal
income tax characterization of any Series of Outstanding Notes or Class
thereof that was (based upon an opinion of counsel) characterized as debt at
the time of their issuance and (ii) the Issuer will not be classified as an
association or as a publicly traded partnership taxable as a corporation for
United States federal income tax purposes.

                 "Termination Event" means any of a Receivable Purchase
Termination Event or a Transfer Termination Event.

                 "Termination Proceeds" means for any Residual Value Vehicle
all amounts received by the Servicer upon, after or in connection with the
termination of the related Lease including, without limitation, (i) sales
proceeds with respect to such Residual Value Vehicle, net of any and all out-
of-pocket costs and expenses incurred by the Servicer in connection with such
sale or other disposition and any amounts remitted to the related Obligor as
required by applicable law or the related Lease, (ii) any and all insurance
proceeds received in connection with the occurrence of a casualty event in
respect of such Residual Value Vehicle and (iii) any and all amounts billed
the related Obligor in connection with the termination of such Lease,
including any Incidental Lease Termination Payments.

                 "Three Month Average Charge-Off Ratio" means, with respect
to any Settlement Date, the average of the Charge-Off Ratios for such
Settlement Date and the two immediately preceding Settlement Dates.

                 "Three Month Average Delinquency Ratio" means, with respect
to any Settlement Date, the average of the Delinquency Ratios for such
Settlement Date and the two immediately preceding Settlement Dates.

                 "Three Month Average Paid-In Advance Loss Ratio" means, with
respect to any Settlement Date, the average of the Paid-In Advance Loss
Ratios for such Settlement Date and the two immediately preceding Settlement
Dates.

                 "Three Month Average Residual Value Loss Ratio" means, with
respect to any Settlement Date, the average of the Residual Value Loss Ratios
for such Settlement Date and the two immediately preceding Settlement Dates.

                 "TIA" means the Trust Indenture Act of 1939 as in force on
the date hereof, unless otherwise specifically provided.

                 "Transaction Documents" means, collectively, the Indenture,
the Investor Notes, any agreements relating to the issuance or the purchase

                                     -38-

<PAGE>

of any of the Investor Notes, any agreements relating to any Credit
Enhancement for any Investor Notes, the LLC Agreement, the Transfer
Agreement, the Administration Agreement, the Management Agreement and the
Origination Trust Documents.

                 "Transfer Agent and Registrar" is defined in Section 2.4 of
the Base Indenture.

                 "Transfer Agreement" means the Transfer Agreement, dated as
of the Initial Closing Date, between SPV and the Issuer, as amended, modified
or supplemented from time to time in accordance with its terms.

                 "Transfer Date" means, unless otherwise specified in the
related Indenture Supplement, with respect to any Series of Notes, the
Business Day immediately prior to each Payment Date.

                 "Transferred Asset Payment" is defined in Section 2.3 of the
Transfer Agreement.

                 "Transferred Assets" is defined in the Transfer Agreement.

                 "Transfer Termination Event" is defined in the Transfer
Agreement.

                 "Twelve Month Average Charge-Off Ratio" means, with respect
to any Settlement Date, the average of the Charge-Off Ratios for such
Settlement Date and the eleven immediately preceding Settlement Dates.

                 "Twelve Month Average Paid-In Advance Loss Ratio" means,
with respect to any Settlement Date, the average of the Paid-In Advance Loss
Ratios for such Settlement Date and the eleven immediately preceding
Settlement Dates.

                 "Twelve Month Average Residual Value Loss Ratio" means, with
respect to any Settlement Date, the average of the Residual Value Loss Ratios
for such Settlement Date and the eleven immediately preceding Settlement
Dates.

                 "UCC" means the Uniform Commercial Code as in effect from
time to time in the applicable jurisdiction.

                 "Uncertificated Security" means an "uncertificated security"
within the meaning of the applicable UCC.

                 "Unit" means a Vehicle, the related Lease and the Related
Rights associated therewith or a Paid-In Advance Vehicle and the Related
Rights associated therewith.

                                     -39-

<PAGE>

                 "Unit Leases" means the Leases allocated to the Lease SUBI
Portfolio.

                 "Unit Paid-In Advance Vehicles" means the Paid-In Advance
Vehicles allocated to the Lease SUBI Portfolio.

                 "Unit Repurchase Payments" means, for any Settlement Date,
the aggregate amount payable by the Servicer pursuant to Section 7.15 of the
Series 1999-1 SUBI Servicing Supplement on such Settlement Date.

                 "Unit Vehicle" means the Leased Vehicles and Paid-In Advance
Vehicles allocated to the Lease SUBI Portfolio.

                 "United States Security Entitlement" means a "Security
Entitlement" as defined in 31 C.F.R. Section 357.2, 24 C.F.R. Section 1.2, 12
C.F.R. Section 912.1, 12 C.F.R. Section 1511.1, 12 C.F.R. Section 615.5450 or
31 C.F.R. Section 354.1.

                 "United States" or "U.S." means the United States of
America, its fifty States and the District of Columbia.

                 "U.S. Government Obligations" means direct obligations of
the United States of America, or any agency or instrumentality thereof for
the payment of which the full faith and credit of the United States of
America is pledged as to full and timely payment of such obligations.

                 "UTI" is defined in the Origination Trust Agreement.

                 "UTI Assets" is defined in the Origination Trust Agreement.

                 "Vehicle" means an automobile, a truck, a truck chassis, a
truck body, a truck tractor, a truck trailer or another type of motorized
vehicle or equipment, together with any and all accessories, additions and
parts from time to time in or to any of the foregoing and all accessions
thereto

                 "VMS" means PHH Vehicle Management Services LLC or any
predecessor in interest thereto (including, without limitation, PHH Fleet
America Corporation and Peterson, Howell & Heather, Inc.).

                 "Weighted Average Cost of Funds" means, for any Settlement
Date, the quotient of the sum of (i) the aggregate amount of interest payable
on all Series of Outstanding Investor Notes on such Settlement Date and (ii)
the aggregate amount of dividends payable on all series of Preferred
Membership Interests on such Settlement Date divided by the sum of (i) the
weighted average aggregate Invested Amount of all Series of Outstanding
Investor Notes during the immediately preceding Accrual Period and (ii) the

                                     -40-

<PAGE>

aggregate stated liquidation preference of all series of Preferred Membership
Interests as of such Settlement Date (before giving effect to any redemptions
on such Settlement Date).

                 "Weighted Average Servicing Fee Percentage" means, for any
Settlement Date, the sum of (i) .01% and the quotient of the sum of the
product of the Required Asset Amount with respect to each Series of
Outstanding Notes and the Series Servicing Fee Percentage with respect to
such Series of Outstanding Notes as of the last day of the immediately
preceding Monthly Period divided by the Required Aggregate Asset Amount as of
such last day.

                 "Weighted Average Yield Shortfall" means, for any Settlement
Date, the excess, if any, of (a) the Minimum Yield Rate for such Settlement
Date over (b) the Weighted Average Yield Shortfall Lease Yield for such
Settlement Date.

                 "Weighted Average Yield Shortfall Life" means, for any
Settlement Date, 50% of the weighted (on the basis of Net Book Value of the
related Leased Vehicle) average Assumed Lease Term of the Yield Shortfall
Leases, assuming that all scheduled lease payments are made thereon when
scheduled and that the Obligors thereunder do not elect to convert such Yield
Shortfall Leases to Fixed Rate Leases, as of the last day of the immediately
preceding Monthly Period.

                 "Weighted Average Yield Shortfall Lease Yield" means, for
any Settlement Date, the quotient of the sum of the product with respect to
each Yield Shortfall Lease of (a) the actual or implicit finance charge rate
applicable to such Yield Shortfall Lease and (b) the Net Book Value of the
Leased Vehicle subject to such Yield Shortfall Lease as of the last day of
the immediately preceding Monthly Period divided by the aggregate Net Book
Value of the Leased Vehicles subject to all of the Yield Shortfall Leases as
of the last day of the immediately preceding Monthly Period.

                 "written" or "in writing" means any form of written
communication, including, without limitation, by means of telex, telecopier
device, telegraph or cable.

                 "Yield Shortfall Amount" means, for any Settlement Date, (i)
if the Hypothetical Yield Shortfall Amount for such Settlement Date is less
than 70% of the 1999-1B Invested Amount as of such Settlement Date (after
giving effect to any increase thereof on such Settlement Date), an amount
equal to the Hypothetical Yield Shortfall Amount and (ii) otherwise, an
amount equal to the product of (x) the Weighted Average Yield Shortfall for
such Settlement Date, (y) the aggregate Lease Balance of all Yield Shortfall
Leases as of the last day of the immediately preceding Monthly Period and (z)
the Weighted Average Yield Shortfall Life for such Settlement Date.

                                     -41-

<PAGE>

                 "Yield Shortfall Lease" means, as of any Settlement Date,
each Unit Lease that is a Floating Rate Lease with an actual or implicit
finance charge rate of less than the Minimum Yield Rate as of the last day of
the immediately preceding Monthly Period.

                 "Yield Supplement Amount" means, as of any Settlement Date,
the excess, if any, of the Yield Shortfall Amount over 70% of the 1999-1B
Invested Amount as of such Settlement Date (after giving effect to any
increase thereof on such Settlement Date); provided, however that upon the
occurrence of a Receivable Purchase Termination Event, the Yield Supplement
Amount  will equal the Yield Shortfall Amount.

                                     -42-

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