Document:

[Conformed Copy]

                                $800,000,000

                        AMENDED AND RESTATED 364-DAY
                              CREDIT AGREEMENT

                          Dated as of May 8, 2000

                                   Among

                                ACE LIMITED

                         ACE BERMUDA INSURANCE LTD.

                    TEMPEST REINSURANCE COMPANY LIMITED

                           ACE INA HOLDINGS INC.

                            ACE GUARANTY RE INC.

                                as Borrowers

                                    and

                      THE INITIAL LENDERS NAMED HEREIN

                             as Initial Lenders

                                    and

                           BANK OF AMERICA, N.A.

                          THE CHASE MANHATTAN BANK

                           Co-Syndication Agents

                                    and

                 MORGAN GUARANTY TRUST COMPANY OF NEW YORK

                          as Administrative Agent

                        J.P. MORGAN SECURITIES INC.

                               Lead Arranger

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                                     ii

                       T A B L E  O F  C O N T E N T S

                                                                           Page

                                 ARTICLE I

                      DEFINITIONS AND ACCOUNTING TERMS

SECTION 1.01.  Certain Defined Terms..........................................i

SECTION 1.02.  Computation of Time Periods; Other Definitional Provisions....18

SECTION 1.03.  Accounting Terms and Determinations...........................18

                                 ARTICLE II

                     AMOUNTS AND TERMS OF THE ADVANCES

SECTION 2.01.  The Committed Advances........................................19

SECTION 2.02.  Making the Committed Advances.................................19

SECTION 2.03.  The Competitive Bid Advances..................................21

SECTION 2.04.  Repayment of Committed Advances...............................25

SECTION 2.05.  Termination or Reduction of the WC Commitments................25

SECTION 2.06.  Prepayments...................................................25

SECTION 2.07.  Interest......................................................25

SECTION 2.08.  Fees..........................................................27

SECTION 2.09.  Conversion of Advances........................................27

SECTION 2.10.  Increased Costs, Etc..........................................28

SECTION 2.11.  Payments and Computations.....................................30

SECTION 2.12.  Taxes.........................................................31

SECTION 2.13.  Sharing of Payments, Etc......................................33

SECTION 2.14.  Use of Proceeds...............................................34

SECTION 2.15.  Defaulting Lenders............................................34

SECTION 2.16.  Replacement of Affected Lender................................36

                                ARTICLE III

                           CONDITIONS OF LENDING

SECTION 3.01.  Conditions Precedent to Effectiveness.........................36

SECTION 3.02.  Conditions Precedent to Each Committed Borrowing..............39

SECTION 3.03.  Conditions Precedent to Each Competitive Bid Borrowing........39

SECTION 3.04.  Conditions Precedent for ACE Guaranty.........................40

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                                   iii

                                 ARTICLE IV

                       REPRESENTATIONS AND WARRANTIES

SECTION 4.01.  Representations and Warranties of the Borrowers...............40

                                 ARTICLE V

                         COVENANTS OF THE BORROWERS

SECTION 5.01.  Affirmative Covenants.........................................45

SECTION 5.02.  Negative Covenants............................................46

SECTION 5.03.  Reporting Requirements........................................50

SECTION 5.04.  Financial Covenants...........................................52

                                 ARTICLE VI

                             EVENTS OF DEFAULT

SECTION 6.01.  Events of Default.............................................53

                                ARTICLE VII

                                THE GUARANTY

SECTION 7.01.  The Guaranty..................................................56

SECTION 7.02.  Guaranty Unconditional........................................56

SECTION 7.03.  Discharge Only upon Payment in Full; Reinstatement in Certain
                  Circumstances..............................................57

SECTION 7.04.  Waiver by the Guarantors......................................57

SECTION 7.05.  Subrogation...................................................57

SECTION 7.06.  Stay of Acceleration..........................................58

SECTION 7.07.  Continuing Guaranty; Assignments..............................58

                                ARTICLE VIII

                                 THE AGENTS

SECTION 8.01.  Authorization and Action......................................59

SECTION 8.02.  Agents' Reliance, Etc.........................................59

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                                     iv

                                                                           Page

SECTION 8.03.  MGT and Affiliates............................................59

SECTION 8.04.  Lender Credit Decision........................................60

SECTION 8.05.  Indemnification...............................................60

SECTION 8.06.  Successor Agents..............................................60

                                 ARTICLE IX

                               MISCELLANEOUS

SECTION 9.01.  Amendments, Etc...............................................61

SECTION 9.02.  Notices, Etc..................................................62

SECTION 9.03.  No Waiver; Remedies...........................................62

SECTION 9.04.  Costs and Expenses............................................62

SECTION 9.05.  Right of Set-off..............................................64

SECTION 9.06.  Successors; Participations and Assignments....................64

SECTION 9.07.  Designated Lenders............................................66

SECTION 9.08.  Execution in Counterparts.....................................67

SECTION 9.09.  Confidentiality...............................................67

SECTION 9.10.  Jurisdiction, Etc.............................................67

SECTION 9.11.  Governing Law.................................................67

SECTION 9.12.  Waiver of Jury Trial..........................................67

SECTION 9.13.  Nature of Borrowers' Obligations..............................68

SCHEDULES

Pricing Schedule
Commitment Schedule
Schedule 4.01(b)  -  Subsidiaries
Schedule 5.02(a)  -  Liens

EXHIBITS

Exhibit A-1  -  Form of Committed Note
Exhibit A-2  -  Form of Competitive Bid Note
Exhibit B-1  -  Form of Notice of Committed Borrowing
Exhibit B-2  -  Form of Notice of Competitive Bid Borrowing
Exhibit C    -  Form of Assignment and Assumption Agreement
Exhibit D-1  -  Form of Opinion of Cayman Islands Counsel to the Parent
Exhibit D-2  -  Form of Opinion of New York Counsel to the Loan Parties
Exhibit D-3  -  Form of Opinion of Bermuda Counsel to the Ace Bermuda
                and Tempest
Exhibit D-4  -  Form of Opinion of Maryland Counsel to ACE Guaranty Re Inc.
Exhibit E   -   Form of Designation Agreement
Exhibit F   -   Form of Extension Agreement

<PAGE>

                                     i

                        AMENDED AND RESTATED 364-DAY
                              CREDIT AGREEMENT

                  AMENDED AND RESTATED 364-DAY AGREEMENT dated as of May 8,
2000 among ACE Limited, a Cayman Islands company (the "Parent"), ACE
Bermuda Insurance Ltd. ("ACE Bermuda"), Tempest Reinsurance Company Limited
("Tempest"), ACE INA Holdings Inc. ("ACE INA") and ACE Guaranty Re Inc.
("ACE Guaranty") (Ace Bermuda, Tempest, ACE INA and ACE Guaranty, together
with the Parent, the "Borrowers"), the banks, financial institutions and
other institutional lenders listed on the signature pages hereof as the
Initial Lenders (the "Initial Lenders"), Bank of America, N.A. and The
Chase Manhattan Bank, as co-syndication agents (together with any successor
co-syndication agents appointed pursuant to Article VIII, the
"Co-Syndication Agents"), and Morgan Guaranty Trust Company of New York
("MGT"), as administrative agent (together with any successor
administrative agent appointed pursuant to Article VIII, the
"Administrative Agent" and, together with the Co-Syndication Agents, the
"Agents") for the Lenders (as hereinafter defined).

PRELIMINARY STATEMENTS:

                  Certain of the parties hereto have heretofore entered
into a Credit Agreement dated as of June 11, 1999 pursuant to which the
Lenders (as defined therein) have made available to the Borrowers (as
defined therein) a credit facility in an amount up to $750,000,000 (as
heretofore amended, the "Existing Agreement"). The parties hereto desire to
extend such credit facility for an additional period of less than one year,
to make the other changes reflected in this Amended Agreement and to amend
and restate the Existing Agreement to read in its entirety as set forth in
this Amended Agreement.

                  NOW, THEREFORE, in consideration of the premises and of
the mutual covenants and agreements contained herein, the parties hereto
hereby agree as follows:

                                 ARTICLE I

                      DEFINITIONS AND ACCOUNTING TERMS

                  SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of
the terms defined):

                  "ACE Bermuda" has the meaning specified in the recital of
         parties to this Amended Agreement.

                  "ACE Guaranty" has the meaning specified in the recital
         of parties to this Amended Agreement.

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                                    2

                  "ACE INA" has the meaning specified in the recital of
         parties to this Amended Agreement.

                  "Adjusted Consolidated Debt" means, at any time, an
         amount equal to (i) the then outstanding Consolidated Debt of the
         Parent and its Subsidiaries plus (ii) to the extent exceeding an
         amount equal to 15% of Total Capitalization, the then issued and
         outstanding amount of Preferred Securities (other than any
         Mandatorily Convertible Securities).

                  "Administrative Agent" has the meaning specified in the
         recital of parties to this Amended Agreement.

                  "Administrative Agent's Account" means the account of the
         Administrative Agent maintained by the Administrative Agent with
         Morgan Guaranty Trust Company of New York, at its office at 60
         Wall Street, New York, New York 10260, Account No. 999 99 090,
         Attention: Bill Wood, or such other account as the Administrative
         Agent shall specify in writing to the Lenders.

                  "Administrative Questionnaire" means, with respect to
         each Lender, an administrative questionnaire in the form prepared
         by the Administrative Agent, completed by such Lender and returned
         to the Administrative Agent (with a copy to the Borrowers).

                  "Advance" means a Committed Advance or a Competitive Bid
         Advance.

                  "Affected Lender" means any Lender that (i) has made, or
         notified any Borrower that an event or circumstance has occurred
         which may give rise to, a demand for compensation under Section
         2.10(a) or (b) or Section 2.12 (but only so long as the event or
         circumstance giving rise to such demand or notice is continuing),
         or (ii) has notified any Borrower (which notice has not been
         withdrawn) of any event or circumstance of a type described in
         Section 2.10(c) or (d).

                  "Affiliate" means, as to any Person, any other Person
         that, directly or indirectly, controls, is controlled by or is
         under common control with such Person or is a director or officer
         of such Person. For purposes of this definition, the term
         "control" (including the terms "controlling", "controlled by" and
         "under common control with") of a Person means the possession,
         direct or indirect, of the power to vote 5% or more of the Voting
         Interests of such Person or to direct or cause the direction of
         the management and policies of such Person, whether through the
         ownership of Voting Interests, by contract or otherwise.

                  "Agents" has the meaning specified in the recital of
         parties to this Amended Agreement.

                  "Agreement" means the Existing Agreement, as amended by
         this Amended Agreement and as the same may be further amended from
         time to time.

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                                     3

                  "Amended Agreement" means this Amended and Restated
         364-Day Credit Agreement dated as of May 8, 2000.

                  "Applicable Facility Fee Percentage" means, as of any
         date, a percentage per annum determined by reference to the
         Pricing Schedule.

                  "Applicable Lending Office" means, with respect to each
         Lender, such Lender's Domestic Lending Office in the case of a
         Base Rate Advance and such Lender's Eurodollar Lending Office in
         the case of a Eurodollar Rate Advance and, in the case of a
         Competitive Bid Advance, the office of such Lender notified by
         such Lender to the Administrative Agent as its Applicable Lending
         Office with respect to such Competitive Bid Advance.

                  "Applicable Margin" means, as of any date, a percentage
         per annum determined by reference to the Pricing Schedule.

                  "Approved Investment" means any Investment that was made
         by the Parent or any of its Subsidiaries pursuant to investment
         guidelines set forth by the board of directors of the Parent which
         are consistent with past practices.

                  "Assignee" has the meaning specified in Section 9.06(c).

                  "Bankruptcy Law" means any proceeding of the type
         referred to in Section 6.01(f) or Title 11, U.S. Code, or any
         similar foreign, federal or state law for the relief of debtors.

                  "Base Rate" means a fluctuating interest rate per annum
         in effect from time to time, which rate per annum shall at all
         times be equal to the higher of:

                           (a)   the rate of interest announced publicly by MGT
                  in New York, New York, from time to time, as MGT's prime
                  rate; and

                           (b)   1/2 of 1% per annum above the Federal Funds
                  Rate.

                  "Base Rate Advance" means an Advance that bears interest
         as provided in Section 2.07(a)(i).

                  "Borrowers" has the meaning specified in the recital of
         parties to this Amended Agreement.

                  "Borrowers' Account" means the account of one or more
         Borrowers maintained by such Borrower(s) with The Bank of Bermuda
         Limited at its office at 6 Front Street, Hamilton, Bermuda HM12
         Account No.18000035, Attention: Maria Aguiar, or such other
         account as the Parent shall specify in writing to the
         Administrative Agent or such other account as the Borrowers (or
         any one of them) shall specify in writing to the Administrative
         Agent.

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                                     4

                  "Borrowing" means a Committed Borrowing or a Competitive Bid
         Borrowing.

                  "Business Day" means a day of the year on which banks are
         not required or authorized by law to close in New York City and,
         if the applicable Business Day relates to any Eurodollar Rate
         Advances or LIBO Rate Advances, on which dealings are carried on
         in the London interbank market.

                  "Capitalized Leases" means all leases that have been or
         should be, in accordance with GAAP, recorded as capitalized
         leases.

                  "Change of Control" means the occurrence of any of the
         following: (a) any Person or two or more Persons acting in concert
         shall have acquired beneficial ownership (within the meaning of
         Rule 13d-3 of the Securities and Exchange Commission under the
         Securities Exchange Act of 1934), directly or indirectly, of
         Voting Interests of the Parent (or other securities convertible
         into such Voting Interests) representing 30% or more of the
         combined voting power of all Voting Interests of the Parent; or
         (b) a majority of the board of directors of the Parent shall not
         be Continuing Members; or (c) any Person or two or more Persons
         acting in concert shall have acquired by contract or otherwise, or
         shall have entered into a contract or arrangement that results in
         its or their acquisition of the power to exercise, directly or
         indirectly, a controlling influence over the management or
         policies of the Parent.

                  "Commitment" means a WC Commitment.

                  "Commitment Schedule" means the Schedule hereto
         denominated as such.

                  "Committed Advance" has the meaning specified in Section
         2.01(a).

                  "Committed Borrowing" means a borrowing consisting of
         simultaneous Committed Advances of the same Type made by the
         Lenders to the same Borrower.

                  "Committed Facility" means, at any time, the aggregate
         amount of the Lenders' WC Commitments at such time.

                  "Committed Note" means a promissory note of any Borrower
         payable to the order of any Lender, in substantially the form of
         Exhibit A-1 hereto, evidencing the aggregate indebtedness of such
         Borrower to such Lender resulting from the Committed Advances made
         by such Lender, as amended.

                  "Competitive Bid Advance" means an advance by a Lender to
         any Borrower as part of a Competitive Bid Borrowing resulting from
         the competitive bidding procedure described in Section 2.03 and
         refers to a Fixed Rate Advance or a LIBO Rate Advance.

                  "Competitive Bid Borrowing" means a borrowing consisting
         of simultaneous Competitive Bid Advances from each of the Lenders
         whose offer to make one or more Competitive Bid Advances as part
         of such borrowing has been accepted under the competitive bidding
         procedure described in Section 2.03.

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                                    5

                  "Competitive Bid Note" means a promissory note of any
         Borrower payable to the order of any Lender, in substantially the
         form of Exhibit A-2 hereto, evidencing the indebtedness of such
         Borrower to such Lender resulting from Competitive Bid Advances
         made by such Lender.

                  "Confidential Information" means information that any
         Loan Party furnishes to any Agent or any Lender, but does not
         include any such information that is or becomes generally
         available to the public other than as a result of a breach by such
         Agent or any Lender of its obligations hereunder or that is or
         becomes available to such Agent or such Lender from a source other
         than the Loan Parties that is not, to the best of such Agent's or
         such Lender's knowledge, acting in violation of a confidentiality
         agreement with a Loan Party.

                  "Consolidated" refers to the consolidation of accounts in
         accordance with GAAP.

                  "Consolidated Net Income" means, for any period, the net
         income of the Parent and its Consolidated Subsidiaries, determined
         on a Consolidated basis for such period.

                  "Consolidated Net Worth" means at any date the
         Consolidated stockholders' equity of the Parent and its
         Consolidated Subsidiaries determined as of such date, provided
         that such determination for purposes of Section 5.04 shall be made
         without giving effect to adjustments pursuant to Statement No. 115
         of the Financial Accounting Standards Board of the United States
         of America.

                  "Contingent Obligation" means, with respect to any
         Person, any obligation or arrangement of such Person to guarantee
         or intended to guarantee any Debt, leases, dividends or other
         payment obligations ("primary obligations") of any other Person
         (the "primary obligor") in any manner, whether directly or
         indirectly, including, without limitation, (a) the direct or
         indirect guarantee, endorsement (other 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 a primary obligor, (b) the obligation to make
         take-or-pay or similar payments, if required, regardless of
         nonperformance by any other party or parties to an agreement or
         (c) any obligation of such Person, whether or not contingent, (i)
         to purchase any such primary obligation or any property
         constituting direct or indirect security therefor, (ii) to advance
         or supply funds (A) for the purchase or payment of any such
         primary obligation or (B) to maintain working capital or equity
         capital of the primary obligor or otherwise to maintain the net
         worth or solvency of the primary obligor, (iii) to purchase
         property, assets, securities or services primarily for the purpose
         of assuring the owner of any such primary obligation of the
         ability of the primary obligor to make payment of such primary
         obligation or (iv) otherwise to assure or hold harmless the holder
         of such primary obligation against loss in respect thereof;
         provided, however, that Contingent Obligations shall not include
         any obligations of any such Person arising under insurance
         contracts entered into in the ordinary course of business. The
         amount of any Contingent Obligation shall be deemed to be an
         amount equal to the stated or determinable amount of the primary
         obligation in respect of which such Contingent Obligation is made
         (or, if less, the maximum amount of such primary obligation for
         which such Person may be liable pursuant to the terms of the
         instrument

<PAGE>

                                      6

         evidencing such Contingent Obligation) or, if not 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.

                  "Continuing Member" means a member of the Board of
         Directors of the Parent who either (i) was a member of the
         Parent's Board of Directors on the date of execution and delivery
         of this Agreement by the Parent and has been such continuously
         thereafter or (ii) became a member of such Board of Directors
         after such date and whose election or nomination for election was
         approved by a vote of the majority of the Continuing Members then
         members of the Parent's Board of Directors.

                  "Conversion", "Convert" and "Converted" each refer to a
         conversion of Advances of one Type into Advances of the other Type
         pursuant to Section 2.09 or 2.10.

                  "Co-Syndication Agents" has the meaning specified in the
         recital of parties to this Amended Agreement.

                  "Debenture" means debt securities issued by ACE INA or
         the Parent to a Special Purpose Trust in exchange for proceeds of
         Preferred Securities and common securities of such Special Purpose
         Trust.

                  "Debt" of any Person means, without duplication for
         purposes of calculating financial ratios, (a) all indebtedness of
         such Person for borrowed money, (b) all obligations of such Person
         for the deferred purchase price of property or services (other
         than trade payables incurred in the ordinary course of such
         Person's business), (c) all obligations of such Person evidenced
         by notes, bonds, debentures or other similar instruments, (d) all
         obligations of such Person created or arising under any
         conditional sale or other title retention agreement with respect
         to property acquired by such Person (even though the rights and
         remedies of the seller or lender under such agreement in the event
         of default are limited to repossession or sale of such property),
         (e) all obligations of such Person as lessee under Capitalized
         Leases (excluding imputed interest), (f) all obligations of such
         Person under acceptance, letter of credit or similar facilities,
         (g) all obligations of such Person to purchase, redeem, retire,
         defease or otherwise make any payment in respect of any Equity
         Interests (except for obligations to pay for Equity Interests
         within customary settlement periods) in such Person or any other
         Person or any warrants, rights or options to acquire such capital
         stock (excluding payments under a contract for the forward sale of
         ordinary shares of such Person issued in a public offering),
         valued, in the case of Redeemable Preferred Interests, at the
         greater of its voluntary or involuntary liquidation preference
         plus accrued and unpaid dividends, (h) all Contingent Obligations
         of such Person in respect of Debt (of the types described above)
         of any other Person and (i) all indebtedness and other payment
         obligations referred to in clauses (a) through (h) above of
         another Person secured by (or for which the holder of such Debt
         has an existing right, contingent or otherwise, to be secured by)
         any Lien on property (including, without limitation, accounts and
         contract rights) owned by such Person, even though such Person has
         not assumed or become liable for the payment of such indebtedness
         or other payment obligations; provided, however, that the amount
         of Debt of such Person under clause (i) above shall, if such
         Person has not assumed or

<PAGE>

                                      7

         otherwise become liable for any such Debt, be limited to the
         lesser of the principal amount of such Debt or the fair market
         value of all property of such Person securing such Debt; provided
         further that "Debt" shall not include obligations in respect of
         insurance or reinsurance contracts entered into in the ordinary
         course of business; provided further that, solely for purposes of
         Section 5.04 and the definitions of "Adjusted Consolidated Debt"
         and "Total Capitalization", "Debt" shall not include (x) any
         contingent obligations of any Person under or in connection with
         acceptance, letter of credit or similar facilities or (y)
         obligations of the Parent or ACE INA under any Debentures or under
         any subordinated guaranty of any Preferred Securities or
         obligations of a Special Purpose Trust under any Preferred
         Securities.

                  "Default" means any Event of Default or any event that
         would constitute an Event of Default but for the requirement that
         notice be given or time elapse or both.

                  "Defaulted Advance" means, with respect to any Lender at
         any time, the portion of any Advance required to be made by such
         Lender to any Borrower pursuant to Section 2.01 or 2.02 at or
         prior to such time that has not been made by such Lender or by the
         Administrative Agent for the account of such Lender pursuant to
         Section 2.02(d) as of such time.

                  "Defaulted Amount" means, with respect to any Lender at
         any time, any amount required to be paid by such Lender to any
         Agent or any other Lender hereunder or under any other Loan
         Document at or prior to such time that has not been so paid as of
         such time, including, without limitation, any amount required to
         be paid by such Lender to (a) the Administrative Agent pursuant to
         Section 2.02(d) to reimburse the Administrative Agent for the
         amount of any Committed Advance made by the Administrative Agent
         for the account of such Lender, (b) any other Lender pursuant to
         Section 2.13 to purchase any participation in Committed Advances
         owing to such other Lender and (c) any Agent pursuant to Section
         8.05 to reimburse such Agent for such Lender's ratable share of
         any amount required to be paid by the Lenders to such Agent as
         provided therein.

                  "Defaulting Lender" means, at any time, any Lender that,
         at such time, (a) owes a Defaulted Advance or a Defaulted Amount
         or (b) shall take any action or be the subject of any action or
         proceeding of a type described in Section 6.01(f).

                  "Designated Lender" means, with respect to any
         Designating Lender, an Eligible Designee designated by it pursuant
         to Section 9.07(a) as a Designated Lender for purposes of this
         Agreement.

                  "Designating Lender" means, with respect to each
         Designated Lender, the Lender that designated such Designated
         Lender pursuant to Section 9.07(a).

                  "Domestic Lending Office" means, with respect to any
         Lender, the office of such Lender specified as its "Domestic
         Lending Office" in its Administrative Questionnaire or such other
         office of such Lender as such Lender may from time to time specify
         to any Borrower and the Administrative Agent.

<PAGE>

                                      8

                  "Effective Date" means the first date on which the
         conditions set forth in Article III shall have been satisfied.

                  "Eligible Designee" means a special purpose entity that
         (i) is organized under the laws of the United States or any state
         thereof, (ii) is engaged in making, purchasing or otherwise
         investing in commercial loans in the ordinary course of its
         business and (iii) issues (or the parent of which issues)
         commercial paper rated at least A-1 or the equivalent thereof by
         S&P or at least P-1 or the equivalent thereof by Moody's.

                  "Environmental Action" means any action, suit, demand,
         demand letter, claim, notice of non-compliance or violation,
         notice of liability or potential liability, investigation,
         proceeding, consent order or consent agreement relating in any way
         to any Environmental Law, any Environmental Permit or Hazardous
         Material or arising from alleged injury or threat to health,
         safety or the environment, including, without limitation, (a) by
         any governmental or regulatory authority for enforcement, cleanup,
         removal, response, remedial or other actions or damages and (b) by
         any governmental or regulatory authority or third party for
         damages, contribution, indemnification, cost recovery,
         compensation or injunctive relief.

                  "Environmental Law" means any Federal, state, local or
         foreign statute, law, ordinance, rule, regulation, code, order,
         writ, judgment, injunction, decree or judicial or agency
         interpretation, policy or guidance relating to pollution or
         protection of the environment, health, safety or natural
         resources, including, without limitation, those relating to the
         use, handling, transportation, treatment, storage, disposal,
         release or discharge of Hazardous Materials.

                  "Environmental Permit" means any permit, approval,
         identification number, license or other authorization required
         under any Environmental Law.

                  "Equity Interests" means, with respect to any Person,
         shares of capital stock of (or other ownership or profit interests
         in) such Person, warrants, options or other rights for the
         purchase or other acquisition from such Person of shares of
         capital stock of (or other ownership or profit interests in) such
         Person, securities convertible into or exchangeable for shares of
         capital stock of (or other ownership or profit interests in) such
         Person or warrants, rights or options for the purchase or other
         acquisition from such Person of such shares (or such other
         interests), and other ownership or profit interests in such Person
         (including, without limitation, partnership, member or trust
         interests therein), whether voting or nonvoting, and whether or
         not such shares, warrants, options, rights or other interests are
         authorized or otherwise existing on any date of determination.

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

                  "ERISA Affiliate" means any Person that for purposes of
         Title IV of ERISA is a member of the controlled group of any Loan
         Party, or under common control with any

<PAGE>

                                  9

         Loan Party, within the meaning of Section 414 of the Internal
         Revenue Code or Section 4001 of ERISA.

                  "Eurocurrency Liabilities" has the meaning specified in
         Regulation D of the Board of Governors of the Federal Reserve
         System, as in effect from time to time.

                  "Eurodollar Lending Office" means, with respect to any
         Lender, the office of such Lender specified as its "Eurodollar
         Lending Office" in its Administrative Questionnaire (or, if no
         such office is specified, its Domestic Lending Office), or such
         other office of such Lender as such Lender may from time to time
         specify to the Parent and the Administrative Agent.

                  "Eurodollar Rate" means, for any Interest Period for all
         Eurodollar Rate Advances comprising part of the same Committed
         Borrowing, an interest rate per annum equal to the rate per annum
         (rounded upwards, if not an integral multiple of 1/32 or 1/100 of
         1%, to the nearest 1/100 of 1%) appearing on Dow Jones Markets
         (Telerate) Page 3750 (or any successor page) as the London
         interbank offered rate for deposits in U.S. dollars at 11:00 A.M.
         (London time) two Business Days before the first day of such
         Interest Period for a period equal to such Interest Period
         (provided that, if for any reason such rate is not available, the
         term "Eurodollar Rate" shall mean, for any Interest Period for all
         Eurodollar Rate Advances comprising part of the same Committed
         Borrowing, the rate per annum (rounded upwards, if not an integral
         multiple of 1/32 or 1/100 of 1% to the nearest 1/100 of 1%)
         appearing on Reuters Screen LIBO Page as the London interbank
         offered rate for deposits in Dollars at approximately 11:00 A.M.
         (London time) two Business Days prior to the first day of such
         Interest Period for a term comparable to such Interest Period;
         provided, however, if more than one rate is specified on Reuters
         Screen LIBO Page, the applicable rate shall be the arithmetic mean
         of all such rates).

                  "Eurodollar Rate Advance" means an Advance that bears
         interest as provided in Section 2.07(a)(ii).

                  "Eurodollar Rate Reserve Percentage" for any Interest
         Period for all Eurodollar Rate Advances comprising part of the
         same Committed Borrowing means the reserve percentage applicable
         two Business Days before the first day of such Interest Period
         under regulations issued from time to time by the Board of
         Governors of the Federal Reserve System (or any successor) for
         determining the maximum reserve requirement (including, without
         limitation, any emergency, supplemental or other marginal reserve
         requirement) for a member bank of the Federal Reserve System in
         New York City with respect to liabilities or assets consisting of
         or including Eurocurrency Liabilities (or with respect to any
         other category of liabilities that includes deposits by reference
         to which the interest rate on Eurodollar Rate Advances is
         determined) having a term equal to such Interest Period.

                  "Events of Default" has the meaning specified in Section
         6.01.

                  "Existing Agreement" has the meaning specified in the
         preliminary statements to this Amended Agreement.

<PAGE>

                                        10

                  "Existing 2,050 Million Credit Facility" means the
         364-Day Credit Agreement dated as of June 11, 1999 among ACE INA,
         as borrower, Parent, ACE Bermuda and Tempest, the financial
         institutions listed therein, Merrill Lynch, Pierce, Fenner & Smith
         Incorporated, as syndication agent and lead arranger, Morgan
         Guaranty Trust Company of New York, as administrative agent, and
         J.P. Morgan Securities Inc., as co-arranger, as amended.

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

                  "Fee Letter" means the fee letter dated April 12, 2000
         among the Parent, the Lead Arranger and the Administrative Agent.

                  "Fiscal Year" means a fiscal year of the Parent and its
         Consolidated Subsidiaries ending on December 31 in any calendar
         year.

                  "Five-Year Credit Facility" means the Amended and
         Restated Five-Year Credit Agreement dated as of the date of this
         Amended Agreement among the Parent, ACE Bermuda, Tempest, ACE INA
         and ACE Financial Services, Inc., the lenders party thereto, Bank
         of America, N.A. and The Chase Manhattan Bank, as co-syndication
         agents, and MGT as administrative agent, as the same may be
         amended, modified or otherwise supplemented from time to time.

                  "Fixed Rate Advances" has the meaning specified in
         Section 2.03(a)(i).

                  "Foreign Government Scheme or Arrangement" has the
         meaning specified in Section 4.01(m)(iv).

                  "Foreign Plan" has the meaning specified in Section
         4.01(m)(iv).

                  "GAAP" has the meaning specified in Section 1.03.

                  "Guarantor" means each of the Borrowers other than ACE
         Guaranty.

                  "Guaranty" means the undertaking by each of the
         Guarantors under Article VII.

                  "Hazardous Materials" means (a) petroleum or petroleum
         products, by-products or breakdown products, radioactive
         materials, asbestos-containing materials, polychlorinated
         biphenyls and radon gas and (b) any other chemicals, materials or

<PAGE>

                                     11

         substances designated, classified or regulated as hazardous or
         toxic or as a pollutant or contaminant under any Environmental
         Law.

                  "Hedge Agreements" means interest rate swap, cap or
         collar agreements, interest rate future or option contracts,
         currency swap agreements, currency future or option contracts and
         other hedging agreements.

                  "Indemnified Party" has the meaning specified in Section
         9.04(b).

                  "Initial Extension of Credit" means the initial Borrowing
         hereunder.

                  "Initial Lenders" has the meaning specified in the
         recital of parties to this Amended Agreement.

                  "Interest Period" means, for each Eurodollar Rate Advance
         comprising part of the same Committed Borrowing and each LIBO Rate
         Advance comprising part of the same Competitive Bid Borrowing, the
         period commencing on the date of such Eurodollar Rate Advance or
         LIBO Rate Advance or the date of the Conversion of any Base Rate
         Advance into such Eurodollar Rate Advance, and ending on the last
         day of the period selected by the Borrower requesting such
         Borrowing or Conversion pursuant to the provisions below and,
         thereafter, each subsequent period commencing on the last day of
         the immediately preceding Interest Period and ending on the last
         day of the period selected by the applicable Borrower pursuant to
         the provisions below. The duration of each such Interest Period
         shall be one or two weeks or one, two, three or six months, as the
         Borrower requesting such Borrowing or Conversion may, upon notice
         received by the Administrative Agent not later than 11:00 A.M.
         (New York City time) on the third Business Day prior to the first
         day of such Interest Period, select; provided, however, that:

                           (a) such Borrower may not select any Interest Period
                  with respect to any Eurodollar Rate Advance that ends after
                  the Termination Date;

                           (b) Interest Periods commencing on the same date
                  for Eurodollar Rate Advances comprising part of the same
                  Committed Borrowing or for LIBO Rate Advances comprising
                  part of the same Competitive Bid Borrowing shall be of
                  the same duration;

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

                           (d) whenever the first day of any Interest
                  Period (other than a one or two week Interest Period)
                  occurs on a day of an initial calendar month for which
                  there is no numerically corresponding day in the calendar
                  month that succeeds

<PAGE>

                                        12

                  such initial calendar month by the number of months equal
                  to the number of months in such Interest Period, such
                  Interest Period shall end on the last Business Day of
                  such succeeding calendar month.

                  "Internal Revenue Code" means the Internal Revenue Code
         of 1986, as amended from time to time, and the regulations
         promulgated and rulings issued thereunder.

                  "Investment" in any Person means any loan or advance to
         such Person, any purchase or other acquisition of any Equity
         Interests or Debt or the assets comprising a division or business
         unit or a substantial part or all of the business of such Person,
         any capital contribution to such Person or any other direct or
         indirect investment in such Person, including, without limitation,
         any acquisition by way of a merger or consolidation and any
         arrangement pursuant to which the investor incurs Debt of the
         types referred to in clause (h) or (i) of the definition of "Debt"
         in respect of such Person; provided, however, that any purchase by
         any Loan Party or any Subsidiary of any catastrophe-linked
         instruments which are (x) issued for the purpose of transferring
         traditional reinsurance risk to the capital markets and (y)
         purchased by such Loan Party or Subsidiary in accordance with its
         customary reinsurance underwriting procedures, or the entry by any
         Loan Party or any Subsidiary into swap instruments relating to
         such instruments in accordance with such procedures, shall be
         deemed to be the entry by such Person into a reinsurance contract
         and shall not be deemed to be an Investment by such Person.

                  "Lead Arranger" means J.P. Morgan Securities Inc. in its
         capacity as lead arranger and book runner in respect of this Amended
         Agreement.

                  "Lender" means (i) each bank or other institution listed
         on the Commitment Schedule, (ii) each Assignee which becomes a
         Lender pursuant to Section 9.06(c) and (iii) their respective
         successors.

                  "LIBO Rate" means, for any Interest Period for all LIBO
         Rate Advances comprising part of the same Competitive Bid
         Borrowing, an interest rate per annum equal to the rate per annum
         (rounded upwards, if not an integral multiple of 1/32 or 1/100 of
         1%, to the nearest 1/100 of 1%) appearing on Dow Jones Markets
         (Telerate) Page 3750 (or any successor page) as the London
         interbank offered rate for deposits in U.S. dollars at 11:00 A.M.
         (London time) two Business Days before the first day of such
         Interest Period for a period equal to such Interest Period
         (provided that, if for any reason such rate is not available, the
         term "LIBO Rate" shall mean for any Interest Period for all LIBO
         Rate Advances comprising part of the same Competitive Bid
         Borrowing, the rate per annum (rounded upwards, if not an integral
         multiple of 1/32 or 1/100 of 1%, to the nearest 1/100 of 1%)
         appearing on Reuters Screen LIBO Page as the London interbank
         offered rate for deposits in Dollars at approximately 11:00 A.M.
         (London time) two Business Days prior to the first day of such
         Interest Period for a term comparable to such Interest Period;
         provided, however, if more than one rate is specified on Reuters
         Screen LIBO Page, the applicable rate shall be the arithmetic mean
         of all such rates).

                  "LIBO Rate Advances" has the meaning specified in Section
         2.03(a)(i).

<PAGE>

                                    13

                  "Lien" means any lien, security interest or other charge
         or encumbrance of any kind, or any other type of preferential
         arrangement, including, without limitation, the lien or retained
         security title of a conditional vendor and any easement, right of
         way or other encumbrance on title to real property.

                  "Loan Documents" means (i) this Agreement, (ii) the Notes
         and (iii) the Fee Letter, in each case as amended.

                  "Loan Parties" means the Borrowers.

                  "Mandatorily Convertible Preferred Securities" means
         units comprised of (i) Preferred Securities or preferred shares of
         Parent and (ii) a contract for the sale of ordinary shares of the
         Parent (including "Feline Prides(TM)", "Rhinos(TM)" or any
         substantially similar securities).

                  "Margin Stock" has the meaning specified in Regulation U.

                  "Material Adverse Change" means any material adverse
         change in the business, financial condition, operations or
         properties of the Parent and its Subsidiaries, taken as a whole.

                  "Material Adverse Effect" means a material adverse effect
         on (a) the business, condition, operations or properties of the
         Parent and its Subsidiaries, taken as a whole, (b) the rights and
         remedies of any Agent or any Lender under any Loan Document or (c)
         the ability of the Loan Parties, taken as a whole, to perform
         their obligations under the Loan Documents.

                  "Material Financial Obligation" means a principal amount
         of Debt and/or payment obligations in respect of any Hedge
         Agreement of the Parent and/or one or more of its Subsidiaries
         arising in one or more related or unrelated transactions exceeding
         in the aggregate $25,000,000.

                  "MGT" has the meaning specified in the recital of
         parties to this Amended Agreement.

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

                  "Multiemployer Plan" means a multiemployer plan, as
         defined in Section 4001(a)(3) of ERISA, to which any Loan Party or
         any ERISA Affiliate is making or accruing an obligation to make
         contributions, or has within any of the preceding five plan years
         made or accrued an obligation to make contributions.

                  "Note" means a Committed Note or a Competitive Bid Note.

                  "Notice of Committed Borrowing" has the meaning specified
         in Section 2.02(a).

<PAGE>

                                      14

                  "Notice of Competitive Bid Borrowing" has the meaning
         specified in Section 2.03(a).

                  "OECD" means the Organization for Economic Cooperation
         and Development.

                  "Other Taxes" has the meaning specified in Section 2.12(b).

                  "Parent" has the meaning specified in the recital of
         parties to this Amended Agreement.

                  "Participant" has the meaning specified in Section 9.06(b).

                  "PBGC" means the Pension Benefit Guaranty Corporation (or
         any successor).

                  "Pension Plan" means a "pension plan", as such term is
         defined in Section 3(2) of ERISA, which is subject to title IV of
         ERISA (other than any "multiemployer plan" as such term is defined
         in section 4001(a)(3) of ERISA), and to which any Loan Party or
         any ERISA Affiliate may have any liability, including any
         liability by reason of having been a substantial employer within
         the meaning of section 4063 of ERISA at any time during the
         preceding five years, or by reason of being deemed to be a
         contributing sponsor under section 4069 of ERISA.

                  "Permitted Liens" means such of the following as to which
         no enforcement, collection, execution, levy or foreclosure
         proceeding shall have been commenced or which are being contested
         in good faith by appropriate proceedings: (a) Liens for taxes,
         assessments and governmental charges or levies not yet due and
         payable; (b) Liens imposed by law, such as materialmen's,
         mechanics', carriers', workmen's and repairmen's Liens and other
         similar Liens arising in the ordinary course of business securing
         obligations that are not overdue for a period of more than 90
         days; (c) pledges or deposits to secure obligations under workers'
         compensation laws or similar legislation or to secure public or
         statutory obligations; and (d) easements, rights of way and other
         encumbrances on title to real property that do not render title to
         the property encumbered thereby unmarketable or materially
         adversely affect the use of such property for its present
         purposes.

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

                  "Preferred Interests" means, with respect to any Person,
         Equity Interests issued by such Person that are entitled to a
         preference or priority over any other Equity Interests issued by
         such Person upon any distribution of such Person's property and
         assets, whether by dividend or upon liquidation.

                  "Preferred Securities" means (i) preferred securities
         issued by a Special Purpose Trust which shall provide, among other
         things, that dividends shall be payable only out of

<PAGE>

                                    15

         proceeds of interest payments on the Debentures, or (ii) other
         instruments that may be treated in whole or in part as equity for
         rating agency purposes while being treated as debt for tax
         purposes.

                  "Pricing Schedule" means the Schedule hereto denominated
         as such.

                  "Pro Rata Share" of any amount means, with respect to any
         Lender at any time, the product of such amount times a fraction
         the numerator of which is the amount of such Lender's WC
         Commitment at such time (or, if the WC Commitments shall have been
         terminated pursuant to Section 2.05 or 6.01, such Lender's WC
         Commitment as in effect immediately prior to such termination) and
         the denominator of which is the Committed Facility at such time
         (or, if the WC Commitments shall have been terminated pursuant to
         Section 2.04 or 6.01, the Committed Facility as in effect
         immediately prior to such termination).

                  "Redeemable" means, with respect to any Equity Interest,
         any Debt or any other right or obligation, any such Equity
         Interest, Debt, right or obligation that (a) the issuer has
         undertaken to redeem at a fixed or determinable date or dates,
         whether by operation of a sinking fund or otherwise, or upon the
         occurrence of a condition not solely within the control of the
         issuer or (b) is redeemable at the option of the holder.

                  "Regulation U" means Regulation U of the Board of
         Governors of the Federal Reserve System, as in effect from time to
         time.

                  "Required Lenders" means, at any time, Lenders owed or
         holding at least a majority in interest of aggregate principal
         amount of the Committed Advances outstanding at such time, or, if
         no such principal amount is outstanding at such time, Lenders
         holding at least a majority in interest of the aggregate of the WC
         Commitments; provided, however, that if any Lender shall be a
         Defaulting Lender at such time, there shall be excluded from the
         determination of Required Lenders at such time (A) the aggregate
         principal amount of the Committed Advances owing to such Lender
         (in its capacity as a Lender) and outstanding at such time and (B)
         the Unused WC Commitment of such Lender at such time.

                  "Responsible Officer" means the Chairman, Chief Executive
         Officer, President, Chief Financial Officer, Treasurer, Chief
         Accounting Officer or Chief Investment Officer of the Parent.

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

                  "Securitization Transaction" means any sale, assignment
         or other transfer by Parent or any Subsidiary of any accounts
         receivable, premium finance loan receivables, lease receivables or
         other payment obligations owing to Parent or such Subsidiary or
         any interest in any of the foregoing, together in each case with
         any collections and other proceeds thereof, any collection or
         deposit accounts related thereto, and any collateral,

<PAGE>

                                    16

         guaranties or other property or claims in favor of Parent or such
         Subsidiary supporting or securing payment by the obligor thereon
         of, or otherwise related to, any such receivables.

                  "Significant Subsidiary" means a Subsidiary of Parent
         that is a "significant subsidiary" of the Parent under Regulation
         S-X promulgated by the Securities and Exchange Commission.

                  "Solvent" and "Solvency" mean, with respect to any Person
         on a particular date, that on such date (a) the fair value of the
         property of such Person is greater than the total amount of
         liabilities, including, without limitation, contingent
         liabilities, of such Person, (b) the present fair salable value of
         the assets of such Person is not less than the amount that will be
         required to pay the probable liability of such Person on its debts
         as they become absolute and matured, (c) such Person does not
         intend to, and does not believe that it will, incur debts or
         liabilities beyond such Person's ability to pay such debts and
         liabilities as they mature and (d) such Person is not engaged in
         business or a transaction, and is not about to engage in business
         or a transaction, for which such Person's property would
         constitute an unreasonably small capital. The amount of contingent
         liabilities at any time shall be computed as the amount that, in
         the light of all the facts and circumstances existing at such
         time, represents the amount that can reasonably be expected to
         become an actual or matured liability.

                  "Special Purpose Trust" means a special purpose business
         trust established by the Parent or ACE INA of which the Parent or
         ACE INA will hold all the common securities, which will be the
         issuer of Preferred Securities, and which will loan to the Parent
         or ACE INA (such loan being evidenced by the Debentures) the net
         proceeds of the issuance and sale of the Preferred Securities and
         common securities of such Special Purchase Trust.

                  "Subsidiary" of any Person means any corporation,
         partnership, joint venture, limited liability company, trust or
         estate of which (or in which) more than 50% of (a) the issued and
         outstanding capital stock having ordinary voting power to elect a
         majority of the Board of Directors of such corporation
         (irrespective of whether at the time capital stock of any other
         class or classes of such corporation shall or might have voting
         power upon the occurrence of any contingency), (b) the interest in
         the capital or profits of such partnership, joint venture or
         limited liability company or (c) the beneficial interest in such
         trust or estate is at the time directly or indirectly owned or
         controlled by such Person, by such Person and one or more of its
         other Subsidiaries or by one or more of such Person's other
         Subsidiaries.

                  "Taxes" has the meaning specified in Section 2.12(a).

                  "Tempest" has the meaning specified in the recital of
         parties to this Amended Agreement.

                  "Termination Date" means the earlier of May 7, 2001 and
         the date of termination in whole of the WC Commitments or such
         later date to which the Termination Date shall

<PAGE>

                                      17

         have been extended pursuant to Section 2.01(b) or, if such day is
         not a Business Day, the next preceding Business Day.

                  "Total Capitalization" means, at any time, an amount
         (without duplication) equal to (i) the then outstanding
         Consolidated Debt of the Parent and its Subsidiaries plus (ii)
         Consolidated stockholders equity of the Parent and its
         Subsidiaries plus (without duplication) (iii) the then issued and
         outstanding amount of Preferred Securities (including Mandatorily
         Convertible Preferred Securities) and (without duplication)
         Debentures.

                  "Type" refers to the distinction between Advances bearing
         interest at the Base Rate and Advances bearing interest at the
         Eurodollar Rate.

                  "Unused WC Commitment" means, with respect to any Lender
         at any time, (a) such Lender's WC Commitment at such time minus
         (b) the sum of (i) the aggregate principal amount of all Committed
         Advances made by such Lender hereunder plus (ii) such Lender's Pro
         Rata Share of the aggregate principal amount of all Competitive
         Bid Advances hereunder.

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

                  "WC Commitment" means (i) with respect to each Lender
         listed on the Commitment Schedule, the amount set forth opposite
         such Lender's name on the Commitment Schedule and (ii) with
         respect to any Assignee which becomes a Lender pursuant to Section
         9.06(c), the amount of the transferor Lender's Commitment assigned
         to it pursuant to Section 9.06(c), in each case as such amount may
         be changed from time to time pursuant to Section 2.05 or 9.06(c);
         provided that, if the context so requires, the term "WC
         Commitment" means the obligation of a Lender to extend credit up
         to such amount to the Borrowers hereunder.

                  "Welfare Plan" means a welfare plan, as defined in
         Section 3(1) of ERISA, that is maintained for employees of any
         Loan Party or in respect of which any Loan Party could have
         liability.

                  "Withdrawal Liability" has the meaning specified in Part
         I of Subtitle E of Title IV of ERISA.

                  SECTION 1.02. Computation of Time Periods; Other
Definitional Provisions. In this Agreement and the other Loan Documents 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 words
"to" and "until" each mean "to but excluding". References in the Loan
Documents to any agreement or contract "as amended" shall mean and be a
reference to such agreement or contract

<PAGE>

                                    18

as amended, amended and restated, supplemented or otherwise modified from
time to time in accordance with its terms.

                  SECTION 1.03. Accounting Terms and Determinations. Unless
otherwise 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 generally accepted accounting principles as in effect
from time to time ("GAAP"), applied on a basis consistent (except for
changes concurred in by the Parent's independent public accountants) with
the most recent audited consolidated financial statements of the Parent and
its Subsidiaries delivered to the Lenders; provided that, if the Parent
notifies the Administrative Agent that the Parent wishes to amend any
covenant in Article V to eliminate the effect of any change in generally
accepted accounting principles on the operation of such covenant (or if the
Administrative Agent notifies the Parent that the Required Lenders wish to
amend Article V for such purpose), then the Parent's compliance with such
covenant shall be determined on the basis of generally accepted accounting
principles in effect immediately before the relevant change in generally
accepted accounting principles became effective (and, concurrently with the
delivery of any financial statements required to be delivered hereunder,
the Parent shall provide a statement of reconciliation conforming such
financial information to such generally accepted accounting principles as
previously in effect), until either such notice is withdrawn or such
covenant is amended in a manner satisfactory to the Parent and the Required
Lenders.

                                 ARTICLE II

                     AMOUNTS AND TERMS OF THE ADVANCES

                  SECTION 2.01. The Committed Advances. (a) Each Lender
severally agrees, on the terms and conditions hereinafter set forth, to
make advances (each a "Committed Advance") to any Borrower from time to
time on any Business Day during the period from the date hereof until the
Termination Date in an amount for each such Committed Advance not to exceed
such Lender's Unused WC Commitment at such time. Each Committed Borrowing
shall be in an aggregate amount of $10,000,000 or an integral multiple of
$1,000,000 in excess thereof and shall consist of Committed Advances made
simultaneously by the Lenders ratably according to their WC Commitments.
Within the limits of each Lender's Unused WC Commitment in effect from time
to time, each Borrower may borrow under this Section 2.01, prepay pursuant
to Section 2.06 and reborrow under this Section 2.01.

                  (b) The Termination Date may be extended in the manner
set forth in this subsection (b) for a period of 364 days from the
Termination Date then in effect. If the Borrowers wish to request an
extension of the Termination Date, Parent shall give written notice to that
effect to the Administrative Agent not less than 40 nor more than 55 days
prior to the Termination Date then in effect, whereupon the Administrative
Agent shall promptly notify each of the Lenders of such request. Each
Lender will use its best efforts to respond to such request, whether
affirmatively or negatively, as it may elect in its sole discretion, within
20 days of such notice to the Administrative Agent; provided that no Lender
will be required to respond more

<PAGE>

                                    19

than 30 days prior to the Termination Date then in effect. If less than all
Lenders respond affirmatively to such request within such period, then the
Parent may request the Lenders that do not elect to extend the Termination
Date to assign their WC Commitments in their entirety, no later than 5 days
prior to the Termination Date then in effect, to one or more Assignees
pursuant to Section 9.06 which Assignees will agree to extend the
Termination Date. If all Lenders (including such Assignees and excluding
their respective transferor Lenders) respond affirmatively, then, subject
to receipt by the Administrative Agent of counterparts of an Extension
Agreement in substantially the form of Exhibit E hereto duly completed and
signed by all of the parties thereto, the Termination Date shall be
extended to the date specified above.

                  SECTION 2.02. Making the Committed Advances. (a) Except
as otherwise provided in Section 2.03, each Committed Borrowing shall be
made on notice, given not later than 11:00 A.M. (New York City time) on the
third Business Day prior to the date of the proposed Committed Borrowing in
the case of a Committed Borrowing consisting of Eurodollar Rate Advances,
or not later than 10:30 A.M. (New York City time) on the date of the
proposed Committed Borrowing in the case of a Committed Borrowing
consisting of Base Rate Advances, by any Borrower to the Administrative
Agent, which shall give to each Lender prompt notice thereof by telecopier.
Each such notice of a Committed Borrowing (a "Notice of Committed
Borrowing") shall be by telephone, confirmed immediately in writing, or
telecopier, in substantially the form of Exhibit B-1 hereto, specifying
therein the requested (i) date of such Committed Borrowing, (ii) Type of
Advances comprising such Committed Borrowing, (iii) aggregate amount of
such Committed Borrowing and (iv) in the case of a Committed Borrowing
consisting of Eurodollar Rate Advances, initial Interest Period for such
Committed Advances. Each Lender shall, before 12:00 noon (New York City
time) on the date of such Committed Borrowing, make available for the
account of its Applicable Lending Office to the Administrative Agent at the
Administrative Agent's Account, in same day funds, such Lender's ratable
portion of such Committed Borrowing in accordance with the respective WC
Commitments of such Lender and the other Lenders. After the Administrative
Agent's receipt of such funds and upon fulfillment of the applicable
conditions set forth in Article III, the Administrative Agent will make
such funds available to the Borrower requesting such Committed Borrowing by
crediting the applicable Borrower's Account.

                  (b) Anything in subsection (a) above to the contrary
notwithstanding, (i) no Borrower may select Eurodollar Rate Advances if the
obligation of the Lenders to make Eurodollar Rate Advances shall then be
suspended pursuant to Section 2.09 or 2.10 and (ii) the Committed Advances
may not be outstanding as part of more than ten (10) separate Committed
Borrowings.

                  (c) Each Notice of Committed Borrowing shall be
irrevocable and binding on the Borrower that requested such Committed
Borrowing. In the case of any Committed Borrowing that the related Notice
of Committed Borrowing specifies is to be comprised of Eurodollar Rate
Advances, the Borrower that requested such Committed Borrowing shall
indemnify each Lender against any loss, cost or expense incurred by such
Lender as a result of any failure to fulfill on or before the date
specified in such Notice of Committed Borrowing for such Committed
Borrowing the applicable conditions set forth in Article III, including,
without limitation, any loss (excluding loss of anticipated profits), cost
or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund the

<PAGE>

                                   20

Committed Advance to be made by such Lender as part of such Committed
Borrowing when such Committed Advance, as a result of such failure, is not
made on such date.

                  (d) Unless the Administrative Agent shall have received
notice from a Lender prior to the date of any Committed Borrowing that such
Lender will not make available to the Administrative Agent such Lender's
ratable portion of such Committed Borrowing, the Administrative Agent may
assume that such Lender has made such portion available to the
Administrative Agent on the date of such Committed Borrowing in accordance
with subsection (a) of this Section 2.02 and the Administrative Agent may,
in reliance upon such assumption, make available to the Borrower requesting
such Committed Borrowing on such date a corresponding amount. If and to the
extent that such Lender shall not have so made such ratable portion
available to the Administrative Agent, such Lender and such Borrower
severally agree to repay or pay to the Administrative Agent forthwith on
demand such corresponding amount and to pay interest thereon, for each day
from the date such amount is made available to such Borrower until the date
such amount is repaid or paid to the Administrative Agent, at (i) in the
case of such Borrower, the interest rate applicable at such time under
Section 2.07 to Advances comprising such Committed Borrowing and (ii) in
the case of such Lender, the Federal Funds Rate. If such Lender shall pay
to the Administrative Agent such corresponding amount, such amount so paid
shall constitute such Lender's Committed Advance as part of such Borrowing
for all purposes.

                  (e) The failure of any Lender to make the Committed
Advance to be made by it as part of any Committed Borrowing shall not
relieve any other Lender of its obligation, if any, hereunder to make its
Committed Advance on the date of such Committed Borrowing, but no Lender
shall be responsible for the failure of any other Lender to make the
Committed Advance to be made by such other Lender on the date of any
Committed Borrowing.

                  SECTION 2.03. The Competitive Bid Advances. (a) Each
Lender severally agrees that any Borrower may make Competitive Bid
Borrowings under this Section 2.03 from time to time on any Business Day
during the period from the date hereof until the date occurring 7 days
prior to the Termination Date in the manner set forth below; provided that,
following the making of each Competitive Bid Borrowing, the aggregate
amount of the Advances then outstanding shall not exceed the aggregate
amount of the WC Commitments of the Lenders.

                  (i) Any Borrower may request a Competitive Bid Borrowing
         under this Section 2.03 by delivering to the Administrative Agent,
         by telecopier, a notice of a Competitive Bid Borrowing (a "Notice
         of Competitive Bid Borrowing"), in substantially the form of
         Exhibit B-2 hereto, specifying therein the requested (v) date of
         such proposed Competitive Bid Borrowing, (w) aggregate amount of
         such proposed Competitive Bid Borrowing, (x) in the case of a
         Competitive Bid Borrowing consisting of LIBO Rate Advances,
         Interest Period, or in the case of a Competitive Bid Borrowing
         consisting of Fixed Rate Advances, maturity date for repayment of
         each Fixed Rate Advance to be made as part of such Competitive Bid
         Borrowing (which maturity date may not be earlier than the date
         occurring 7 days after the date of such Competitive Bid Borrowing
         or later than the earlier of (I) 180 days after the date of such
         Competitive Bid Borrowing and (II) the Termination Date), (y)
         interest payment date or dates relating thereto, and (z) other
         terms (if any) to be applicable to such Competitive Bid Borrowing,
         not later

<PAGE>

                                      21

         than 10:30 A.M. (New York City time) (A) at least one Business Day
         prior to the date of the proposed Competitive Bid Borrowing, if
         such Borrower shall specify in the Notice of Competitive Bid
         Borrowing that the rates of interest to be offered by the Lenders
         shall be fixed rates per annum (the Advances comprising any such
         Competitive Bid Borrowing being referred to herein as "Fixed Rate
         Advances") and (B) at least four Business Days prior to the date
         of the proposed Competitive Bid Borrowing, if such Borrower shall
         instead specify in the Notice of Competitive Bid Borrowing that
         the rates of interest to be offered by the Lenders are to be based
         on a margin above or below the LIBO Rate (the Advances comprising
         such Competitive Bid Borrowing being referred to herein as "LIBO
         Rate Advances"). Each Notice of Competitive Bid Borrowing shall be
         irrevocable and binding on such Borrower. The Administrative Agent
         shall in turn promptly notify each Lender of each request for a
         Competitive Bid Borrowing received by it from such Borrower by
         sending such Lender a copy of the related Notice of Competitive
         Bid Borrowing.

                  (ii) Each Lender may, if, in its sole discretion, it
         elects to do so, irrevocably offer to make one or more Competitive
         Bid Advances to the Borrower requesting the Competitive Bid
         Advances as part of such proposed Competitive Bid Borrowing at a
         rate or rates of interest specified by such Lender in its sole
         discretion, by notifying the Administrative Agent (which shall
         give prompt notice thereof to the Borrower requesting the
         Competitive Bid Borrowing), before 9:30 A.M. (New York City time)
         on the date of such proposed Competitive Bid Borrowing, in the
         case of a Competitive Bid Borrowing consisting of Fixed Rate
         Advances and before 10:00 A.M. (New York City time) three Business
         Days before the date of such proposed Competitive Bid Borrowing,
         in the case of a Competitive Bid Borrowing consisting of LIBO Rate
         Advances, of the minimum amount and maximum amount of each
         Competitive Bid Advance which such Lender would be willing to make
         as part of such proposed Competitive Bid Borrowing (which amounts
         may, subject to the proviso to the first sentence of this Section
         2.03(a), exceed such Lender's WC Commitment, if any), the rate or
         rates of interest therefor and such Lender's Applicable Lending
         Office with respect to such Competitive Bid Advance; provided that
         if the Administrative Agent in its capacity as a Lender shall, in
         its sole discretion, elect to make any such offer, it shall notify
         the Borrower requesting such Competitive Bid Borrowing of such
         offer at least 30 minutes before the time and on the date on which
         notice of such election is to be given to the Administrative Agent
         by the other Lenders. If any Lender shall elect not to make such
         an offer, such Lender shall so notify the Administrative Agent,
         before 10:00 A.M. (New York City time) on the date on which notice
         of such election is to be given to the Administrative Agent by the
         other Lenders, and such Lender shall not be obligated to, and
         shall not, make any Competitive Bid Advance as part of such
         Competitive Bid Borrowing; provided that the failure by any Lender
         to give such notice shall not cause such Lender to be obligated to
         make any Competitive Bid Advance as part of such proposed
         Competitive Bid Borrowing.

                  (iii) The Borrower requesting any particular Competitive
         Bid Borrowing shall, in turn, before 10:30 A.M. (New York City
         time) on the date of such proposed Competitive Bid Borrowing, in
         the case of a Competitive Bid Borrowing consisting of Fixed Rate
         Advances and before 11:00 A.M. (New York City time) three Business
         Days

<PAGE>

                                      22

         before the date of such proposed Competitive Bid Borrowing, in the
         case of a Competitive Bid Borrowing consisting of LIBO Rate
         Advances, either:

                           (x) cancel such Competitive Bid Borrowing by giving
                  the Administrative Agent notice to that effect, or

                           (y) accept one or more of the offers made by any
                  Lender or Lenders pursuant to paragraph (ii) above, in
                  its sole discretion, by giving notice to the
                  Administrative Agent of the amount of each Competitive
                  Bid Advance (which amount shall be equal to or greater
                  than the minimum amount, and equal to or less than the
                  maximum amount, notified to such Borrower by the
                  Administrative Agent on behalf of such Lender for such
                  Competitive Bid Advance pursuant to paragraph (ii) above)
                  to be made by each such Lender as part of such
                  Competitive Bid Borrowing, and reject any remaining
                  offers made by Lenders pursuant to paragraph (ii) above
                  by giving the Administrative Agent notice to that effect.
                  The Borrower that requested such Competitive Bid
                  Borrowing shall accept the offers made by any Lender or
                  Lenders to make Competitive Bid Advances in order of the
                  lowest to the highest rates of interest offered by such
                  Lenders. If two or more Lenders have offered the same
                  interest rate, the amount to be borrowed at such interest
                  rate will be allocated among such Lenders in proportion
                  to the amount that each such Lender offered at such
                  interest rate.

                  (iv) If the Borrower that requested any particular
         Competitive Bid Borrowing notifies the Administrative Agent that
         such Competitive Bid Borrowing is canceled pursuant to paragraph
         (iii)(x) above, the Administrative Agent shall give prompt notice
         thereof to the Lenders and such Competitive Bid Borrowing shall
         not be made.

                  (v) If the Borrower that requested any particular
         Competitive Bid Borrowing accepts one or more of the offers made
         by any Lender or Lenders pursuant to paragraph (iii)(y) above, the
         Administrative Agent shall in turn promptly notify (A) each Lender
         that has made an offer as described in paragraph (ii) above, of
         the date and aggregate amount of such Competitive Bid Borrowing
         and whether or not any offer or offers made by such Lender
         pursuant to paragraph (ii) above have been accepted by such
         Borrower, (B) each Lender that is to make a Competitive Bid
         Advance as part of such Competitive Bid Borrowing, of the amount
         of each Competitive Bid Advance to be made by such Lender as part
         of such Competitive Bid Borrowing, and (C) each Lender that is to
         make a Competitive Bid Advance as part of such Competitive Bid
         Borrowing, upon receipt, that the Administrative Agent has
         received forms of documents appearing to fulfill the applicable
         conditions set forth in Article III. Each Lender that is to make a
         Competitive Bid Advance as part of such Competitive Bid Borrowing
         shall, before 12:00 noon (New York City time) on the date of such
         Competitive Bid Borrowing specified in the notice received from
         the Administrative Agent pursuant to clause (A) of the preceding
         sentence or any later time when such Lender shall have received
         notice from the Administrative Agent pursuant to clause (C) of the
         preceding sentence, make available for the account of its
         Applicable Lending Office to the Administrative Agent at the
         Administrative Agent's Account, in same day funds, such Lender's
         portion of such Competitive Bid Borrowing. Upon fulfillment of the
         applicable conditions set forth in

<PAGE>

                                      23

         Article III and after receipt by the Administrative Agent of such
         funds, the Administrative Agent will make such funds available to
         the Borrower that requested such Borrowing at the Administrative
         Agent's address referred to in Section 8.02. Promptly after each
         Competitive Bid Borrowing the Administrative Agent will notify
         each Lender of the amount of the Competitive Bid Borrowing.

                  (vi) If the Borrower that requested any particular
         Competitive Bid Borrowing notifies the Administrative Agent that
         it accepts one or more of the offers made by any Lender or Lenders
         pursuant to paragraph (iii)(y) above, such notice of acceptance
         shall be irrevocable and binding on such Borrower. Such Borrower
         shall indemnify each Lender against any loss, cost or expense
         incurred by such Lender as a result of any failure to fulfill on
         or before the date specified in the related Notice of Competitive
         Bid Borrowing for such Competitive Bid Borrowing the applicable
         conditions set forth in Article III, including, without
         limitation, any loss (excluding loss of anticipated profits), cost
         or expense incurred by reason of the liquidation or reemployment
         of deposits or other funds acquired by such Lender to fund the
         Competitive Bid Advance to be made by such Lender as part of such
         Competitive Bid Borrowing when such Competitive Bid Advance, as a
         result of such failure, is not made on such date.

                  (b) Each Competitive Bid Borrowing shall be in an
aggregate amount of $10,000,000 or an integral multiple of $1,000,000 in
excess thereof and, following the making of each Competitive Bid Borrowing,
the Borrowers shall be in compliance with the limitations set forth in the
proviso to the first sentence of subsection (a) above.

                  (c) Within the limits and on the conditions set forth in
this Section 2.03, any Borrower may from time to time borrow under this
Section 2.03, repay or prepay pursuant to subsection (d) below, and
reborrow under this Section 2.03, provided that a Competitive Bid Borrowing
shall not be made within three Business Days of the date of any other
Competitive Bid Borrowing.

                  (d) The Borrower to which any particular Competitive Bid
Borrowing is made shall repay to the Administrative Agent for the account
of each Lender that has made a Competitive Bid Advance, on the maturity
date of each Competitive Bid Advance (such maturity date being that
specified by such Borrower as the last day of the Interest Period or the
maturity date of such Competitive Bid Advance in the related Notice of
Competitive Bid Borrowing delivered pursuant to subsection (a)(i) above),
the then unpaid principal amount of such Competitive Bid Advance. No
Borrower shall have any right to prepay any principal amount of any
Competitive Bid Advance unless, and then only on the terms, specified by
such Borrower for such Competitive Bid Advance in the related Notice of
Competitive Bid Borrowing delivered pursuant to subsection (a)(i) above.

                  (e) The Borrower to which any particular Competitive Bid
Borrowing is made shall pay interest on the unpaid principal amount of each
Competitive Bid Advance from the date of such Competitive Bid Advance to
the date the principal amount of such Competitive Bid Advance is repaid in
full, at the rate of interest for such Competitive Bid Advance specified by
the Lender making such Competitive Bid Advance in its notice with respect
thereto delivered pursuant to subsection (a)(ii) above, payable on the
interest payment date or dates specified by

<PAGE>

                                  24

such Borrower for such Competitive Bid Advance in the related Notice of
Competitive Bid Borrowing delivered pursuant to subsection (a)(i) above.
Upon the occurrence and during the continuance of an Event of Default under
Section 6.01(a) or 6.01(f) or at the request of the Required Lenders during
the existence of any other Event of Default, such Borrower shall pay
interest on the amount of unpaid principal of and interest on each
Competitive Bid Advance owing to a Lender, payable in arrears on the date
or dates interest is payable thereon, at a rate per annum equal at all
times to 2% per annum above the rate per annum otherwise required to be
paid on such Competitive Bid Advance.

                  (f) The indebtedness of any Borrower resulting from any
Competitive Bid Advance made to such Borrower as part of a Competitive Bid
Borrowing shall be evidenced by the Competitive Bid Note of such Borrower
payable to the order of the Lender making such Competitive Bid Advance.

                  (g) Upon delivery of each Notice of Competitive Bid
Borrowing, the Borrower that requested the applicable Competitive Bid
Borrowing shall pay a non-refundable fee of $1,500 to the Administrative
Agent for its own account.

                  SECTION 2.04. Repayment of Committed Advances. Each
Borrower shall repay to the Administrative Agent for the ratable account of
the Lenders on the Termination Date the aggregate outstanding principal
amount of the Committed Advances then outstanding.

                  SECTION 2.05. Termination or Reduction of the WC
Commitments. The Parent may, upon at least three Business Days' notice to
the Administrative Agent, terminate in whole or reduce in part the unused
portion of the WC Commitments; provided, however, that each partial
reduction (i) shall be in an aggregate amount of $10,000,000 or an integral
multiple of $1,000,000 in excess thereof and (ii) shall be made ratably
among the Lenders in accordance with their WC Commitments.

                  SECTION 2.06. Prepayments. Each Borrower may, upon notice
given not later than 11:00 A.M. (New York City Time) on the Business Day on
which such prepayment is to be made, in the case of Base Rate Advances, or
on the third Business Day prior to the date on which such prepayment is to
be made, in the case of Eurodollar Rate Advances, in each case to the
Administrative Agent stating the proposed date and aggregate principal
amount of the prepayment, and if such notice is given such Borrower shall,
prepay the outstanding aggregate principal amount of the Committed Advances
comprising part of the same Committed Borrowing in whole or ratably in
part, together with accrued interest to the date of such prepayment on the
aggregate principal amount prepaid; provided, however, that (x) each
partial prepayment shall be in an aggregate principal amount of $10,000,000
or an integral multiple of $1,000,000 in excess thereof and (y) if any
prepayment of a Eurodollar Rate Advance is made on a date other than the
last day of an Interest Period for such Committed Advance, such Borrower
shall also pay any amounts owing pursuant to Section 9.04(c). All
prepayments in respect of Eurodollar Rate Advances shall be made together
with accrued interest to the date of such prepayment on the principal
amount prepaid.

<PAGE>

                                 25

                  SECTION 2.07.  Interest.  (a)  Scheduled Interest.  Each
Borrower shall pay interest on the unpaid principal amount of each Advance
owing to each Lender from the date of such Advance until such principal amount
shall be paid in full, at the following rates per annum:

                  (i) Base Rate Advances. During such periods as such
         Advance is a Base Rate Advance, a rate per annum equal at all
         times to the Base Rate in effect from time to time, payable in
         arrears quarterly on the last day of each March, June, September
         and December during such periods and on the Termination Date.

                  (ii) Eurodollar Rate Advances. During such periods as
         such Advance is a Eurodollar Rate Advance, a rate per annum equal
         at all times during each Interest Period for such Advance to the
         sum of (A) the Eurodollar Rate for such Interest Period for such
         Advance plus (B) the Applicable Margin in effect from time to
         time, payable in arrears on the last day of such Interest Period
         and, if such Interest Period has a duration of more than three
         months, on each day that occurs during such Interest Period every
         three months from the first day of such Interest Period and on the
         date such Eurodollar Rate Advance shall be Converted or paid in
         full.

                  (iii) Regulation D Compensation. Each Lender that is
         subject to reserve requirements of the Board of Governors of the
         Federal Reserve System (or any successor) may require the
         applicable Borrower to pay, contemporaneously with each payment of
         interest on Eurodollar Rate Advances, additional interest on the
         related Eurodollar Rate Advances of such Lender at the rate per
         annum equal to the excess of (i)(A) the applicable Eurodollar
         Rate, divided by (B) one minus the Eurodollar Rate Reserve
         Requirement over (ii) the rate specified in clause (i)(A). Any
         Lender wishing to require payment of such additional interest
         shall so notify such Borrower directly, in which case such
         additional interest on the Eurodollar Rate Advances of such Lender
         shall be payable to such Lender at the place indicated in such
         notice with respect to each Interest Period commencing after the
         giving of such notice.

                  (b) Default Interest. Upon the occurrence and during the
existence of an Event of Default under Section 6.01(a) or 6.01(f) or at the
request of the Required Lenders during the existence of any other Event of
Default, each Borrower shall pay interest on (i) the unpaid principal
amount of each Advance owing to each Lender, payable in arrears on the
dates referred to in clause (a)(i) or (a)(ii) above and at a rate per annum
equal at all times to 2% per annum above the rate per annum required to be
paid on such Advance pursuant to clause (a)(i) or (a)(ii) above and (ii) to
the fullest extent permitted by law, the amount of any interest, fee or
other amount payable under the Loan Documents that is not paid when due,
from the date such amount shall be due until such amount shall be paid in
full, payable in arrears on the date such amount shall be paid in full and
on demand, at a rate per annum equal at all times to 2% per annum above the
rate per annum required to be paid, in the case of interest, on the Type of
Advance on which such interest has accrued pursuant to clause (a)(i) or
(a)(ii) above and, in all other cases, on Base Rate Advances pursuant to
clause (a)(i) above.

                  (c)      Notice of Interest Period and Interest Rate.
Promptly after receipt of a Notice of  Borrowing pursuant to Section 2.02(a),
a notice of Conversion pursuant to Section 2.09 or a notice of selection of an
Interest Period pursuant to the terms of the definition

<PAGE>

                                 26

of "Interest Period", the Administrative Agent shall give notice to the
Borrowers and each Lender of the applicable Interest Period and the
applicable interest rate determined by the Administrative Agent for
purposes of clause (a)(i) or (a)(ii) above.

                  SECTION 2.08.  Fees.  (a)  Facility Fee.  The Borrowers agree
to pay to the Administrative Agent for the account of the Lenders a facility
fee, from the Effective Date until the Termination Date, payable in arrears
quarterly on the last day of each March, June, September and December,
commencing on June 30, 2000, and on the Termination Date, at the rate of the
Applicable Facility Fee Percentage on the average daily WC Commitment of each
Lender during such quarter (whether used or unused); provided, however, that no
facility fee shall accrue on the Unused WC Commitment of a Defaulting Lender so
long as such Lender shall be a Defaulting Lender.

                  (b)      Agents' Fees.  Each Borrower agrees that it shall
pay to each Agent for its own account such fees as may from time to time be
agreed between such Borrower and such Agent.

                  SECTION 2.09. Conversion of Advances. (a) Optional. Each
Borrower may on any Business Day, upon notice given to the Administrative
Agent not later than 11:00 A.M. (New York City time) on the third Business
Day prior to the date of the proposed Conversion and subject to the
provisions of Section 2.10, Convert all or any portion of the Committed
Advances of one Type comprising the same Committed Borrowing into Committed
Advances of the other Type; provided, however, that any Conversion of Base
Rate Advances into Eurodollar Rate Advances shall be in an amount not less
than the minimum amount specified in Section 2.01 for a Committed
Borrowing, no Conversion of any Committed Advances shall result in more
separate Committed Borrowings than permitted under Section 2.02(b) and each
Conversion of Committed Advances comprising part of the same Committed
Borrowing shall be made ratably among the Lenders in accordance with their
respective WC Commitments. Each such notice of Conversion shall, within the
restrictions specified above, specify (i) the date of such Conversion, (ii)
the Committed Advances to be Converted and (iii) if such Conversion is into
Eurodollar Rate Advances, the duration of the initial Interest Period for
such Committed Advances. Each notice of Conversion shall be irrevocable and
binding on such Borrower.

                  (b) Mandatory. (i) On the date on which the aggregate
unpaid principal amount of Eurodollar Rate Advances comprising any
Committed Borrowing shall be reduced, by payment or prepayment or
otherwise, to less than $10,000,000, such Committed Advances shall
automatically Convert into Base Rate Advances at the end of the applicable
Interest Period.

                  (ii) If the Borrowers shall fail to select the duration
of any Interest Period for any Eurodollar Rate Advances in accordance with
the provisions contained in the definition of "Interest Period" in Section
1.01, the Administrative Agent will forthwith so notify the Borrowers and
the Lenders, whereupon each such Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period
therefor, Convert into a Base Rate Advance.

                  (iii) Upon the occurrence and during the existence of an
Event of Default under Section 6.01(a) or 6.01(f) or at the request of the
Required Lenders during the existence of any other Event of Default, (x)
each Eurodollar Rate Advance will automatically, on the last day

<PAGE>

                                   27

of the then existing Interest Period therefor, Convert into a Base Rate
Advance and (y) the obligation of the Lenders to make, or to Convert
Advances into, Eurodollar Rate Advances shall be suspended.

                  SECTION 2.10. Increased Costs, Etc. (a) If, due to either
(i) the introduction of or any change in or in the interpretation of, in
each case after the date hereof, any law or regulation or (ii) the
compliance with any guideline or request issued after the date hereof from
any central bank or other governmental authority (whether or not having the
force of law), there shall be any increase in the cost to any Lender of
agreeing to make or of making, funding or maintaining Eurodollar Rate
Advances or LIBO Rate Advances (excluding, for purposes of this Section
2.10, any such increased costs resulting from (x) Taxes or Other Taxes (as
to which Section 2.12 shall govern) and (y) changes in the basis of
taxation of overall net income or overall gross income by the United States
or by the foreign jurisdiction or state under the laws of which such Lender
is organized or has its Applicable Lending Office or any political
subdivision thereof), then the Borrowers agree to pay, from time to time,
within five days after demand by such Lender (with a copy of such demand to
the Administrative Agent), which demand shall include a statement of the
basis for such demand and a calculation in reasonable detail of the amount
demanded, to the Administrative Agent for the account of such Lender
additional amounts sufficient to compensate such Lender for such increased
cost. A certificate as to the amount of such increased cost, submitted to
the Borrowers by such Lender, shall be conclusive and binding for all
purposes, absent manifest error.

                  (b) If, due to either (i) the introduction of or any
change in or in the interpretation of any law or regulation, in each case
after the date hereof, or (ii) the compliance with any guideline or request
issued after the date hereof from any central bank or other governmental
authority (whether or not having the force of law), there shall be any
increase in the amount of capital required or expected to be maintained by
any Lender or any corporation controlling such Lender as a result of or
based upon the existence of such Lender's commitment to lend hereunder and
other commitments of such type, then, within five days after demand by such
Lender or such corporation (with a copy of such demand to the
Administrative Agent), which demand shall include a statement of the basis
for such demand and a calculation in reasonable detail of the amount
demanded, the Borrowers agree to pay to the Administrative Agent for the
account of such Lender, from time to time as specified by such Lender,
additional amounts sufficient to compensate such Lender in the light of
such circumstances, to the extent that such Lender reasonably determines
such increase in capital to be allocable to the existence of such Lender's
commitment to lend. A certificate as to such amounts submitted to the
Borrowers by such Lender shall be conclusive and binding for all purposes,
absent manifest error.

                  (c) If, prior to the first day of any Interest Period
with respect to any Eurodollar Rate Advances, the Required Lenders notify
the Administrative Agent that the Eurodollar Rate for such Interest Period
for such Committed Advances will not adequately reflect the cost to such
Lenders of making, funding or maintaining their Eurodollar Rate Advances
for such Interest Period, the Administrative Agent shall forthwith so
notify the Borrower and the Lenders, whereupon each such Eurodollar Rate
Advance will (i) in the case of requested new Eurodollar Rate Advances, be
made as or remain Base Rate Advances or as a Eurodollar Rate Advance with a
different Interest Period as to which the Required Lenders have

<PAGE>

                                   28

not given such a notice and (ii) in the case of existing Eurodollar Rate
Advances, automatically, on the last day of the then existing Interest
Period therefor, Convert into Base Rate Advances or be continued as a
Eurodollar Rate Advance with a different Interest Period as to which the
Required Lenders have not given such notice.

                  (d) Notwithstanding any other provision of this
Agreement, if the introduction of or any change in or in the interpretation
of any law or regulation, in each case after the date hereof, shall make it
unlawful, or any central bank or other governmental authority shall assert
that it is unlawful, for any Lender or its Eurodollar Lending Office to
perform its obligations hereunder to make Eurodollar Rate Advances or LIBO
Rate Advances or to continue to fund or maintain Eurodollar Rate Advances
or LIBO Rate Advances hereunder, then, on notice thereof and demand
therefor by such Lender to the Borrowers through the Administrative Agent,
(i) each Eurodollar Rate Advance or LIBO Rate Advance, as the case may be,
of such Lender will automatically, upon such demand, Convert into a Base
Rate Advance or an Advance that bears interest at the rate set forth in
Section 2.07(a)(i), as the case may be, and (ii) the obligation of such
Lender to make Eurodollar Rate Advances or LIBO Rate Advances or to Convert
Committed Advances into Eurodollar Rate Advances shall be suspended until
the Administrative Agent shall notify the Borrowers that such Lender has
determined that the circumstances causing such suspension no longer exist
(it being understood that such Lender shall make and maintain Base Rate
Advances in the amount that would otherwise be made and maintained by such
Lender as Eurodollar Advances absent the circumstances described above).

                  (e) Each Lender shall promptly notify the Borrowers and
the Administrative Agent of any event of which it has actual knowledge
which will result in, and will use reasonable commercial efforts available
to it (and not, in such Lender's good faith judgment, otherwise
disadvantageous to such Lender) to mitigate or avoid, (i) any obligation by
the Borrowers to pay any amount pursuant to subsection (a) or (b) above or
pursuant to Section 2.12 or (ii) the occurrence of any circumstances of the
nature described in subsection (c) or (d) above (and, if any Lender has
given notice of any event described in clause (i) or (ii) above and
thereafter such event ceases to exist, such Lender shall promptly so notify
the Borrowers and the Administrative Agent). Without limiting the
foregoing, each Lender will designate a different Applicable Lending Office
if such designation will avoid (or reduce the cost to the Borrowers of) any
event described in clause (i) or (ii) of the preceding sentence and such
designation will not, in such Lender's good faith judgment, be otherwise
disadvantageous to such Lender.

                  (f) Notwithstanding the provisions of subsections (a) and
(b) above or Section 2.12 (and without limiting subsection (e) above), if
any Lender fails to notify the Borrowers of any event or circumstance that
will entitle such Lender to compensation pursuant subsection (a) or (b)
above or Section 2.12 within 120 days after such Lender obtains actual
knowledge of such event or circumstance, then such Lender shall not be
entitled to compensation, from the Borrowers for any amount arising prior
to the date which is 120 days before the date on which such Lender notifies
the Borrowers of such event or circumstance.

                  SECTION 2.11.  Payments and Computations.  (a)  The
applicable Borrower shall make each payment hereunder and under the applicable
Notes, irrespective of any right of counterclaim or set-off (except as
otherwise provided in Section 2.15), not later than 12:00 noon (New York City
time) on the day when due in U.S. dollars to the Administrative Agent at the

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                                      29

Administrative Agent's Account in same day funds, with payments being
received by the Administrative Agent after such time being deemed to have
been received on the next succeeding Business Day. The Administrative Agent
will promptly thereafter cause like funds to be distributed (i) if such
payment by such Borrower is in respect of principal, interest, facility
fees or any other amount then payable hereunder and under the Notes to more
than one Lender, to such Lenders for the account of their respective
Applicable Lending Offices ratably in accordance with the amounts of such
respective amount then payable to such Lenders and (ii) if such payment by
such Borrower is in respect of any amount then payable hereunder to one
Lender, to such Lender for the account of its Applicable Lending Office, in
each case to be applied in accordance with the terms of this Agreement.

                  (b) Each Borrower hereby authorizes each Lender, if an
Event of Default under Section 6.01(a) has occurred and is continuing, to
charge from time to time against any or all of such Borrower's accounts
with such Lender any amount owing under this Agreement that resulted in
such Event of Default.

                  (c) All computations of interest on Base Rate Advances
(and any other amount payable by reference to the Base Rate) when the Base
Rate is determined by reference to MGT's prime rate shall be made by the
Administrative Agent on the basis of a year of 365 or, if applicable, 366
days; all other computations of interest and fees shall be made by the
Administrative Agent on the basis of a year of 360 days. All such
computations shall be made for the actual number of days (including the
first day but excluding the last day) occurring in the period for which
such interest or fees are payable. Each determination by the Administrative
Agent of an interest rate or fee hereunder shall be conclusive and binding
for all purposes, absent manifest error.

                  (d) Whenever any payment hereunder or under the Notes
shall be stated to be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of payment of
interest or fee, as the case may be; provided, however, that, if such
extension would cause payment of interest on or principal of Eurodollar
Rate Advances or LIBO Rate Advances to be made in the next following
calendar month, such payment shall be made on the next preceding Business
Day.

                  (e) Unless the Administrative Agent shall have received
notice from any Borrower required to make any payment prior to the date on
which any payment is due to any Lender hereunder that such Borrower will
not make such payment in full, the Administrative Agent may assume that
such Borrower has made such payment in full to the Administrative Agent on
such date and the Administrative Agent may, in reliance upon such
assumption, cause to be distributed to each such Lender on such due date an
amount equal to the amount then due such Lender. If and to the extent such
Borrower shall not have so made such payment in full to the Administrative
Agent, each such Lender shall repay to the Administrative Agent forthwith
on demand such amount distributed to such Lender together with interest
thereon, for each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the Administrative
Agent, at the Federal Funds Rate.

<PAGE>

                                   30

                  SECTION 2.12. Taxes. (a) Any and all payments by any Loan
Party hereunder or under the Notes shall be made, in accordance with
Section 2.11, free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the
case of each Lender and each Agent, taxes that are imposed on its overall
net income by the United States and taxes that are imposed on its overall
net income (and franchise taxes imposed in lieu thereof) by the state or
foreign jurisdiction under the laws of which such Lender or such Agent, as
the case may be, is organized or any political subdivision thereof and, in
the case of each Lender, taxes that are imposed on its overall net income
(and franchise taxes imposed in lieu thereof) by the state or foreign
jurisdiction of such Lender's Applicable Lending Office or any political
subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities in respect of payments
hereunder or under the Notes being herein referred to as "Taxes"). If any
Loan Party shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder or under any Note to any Lender or any Agent,
(i) the sum payable by such Loan Party shall be increased as may be
necessary so that after such Loan Party and the Administrative Agent have
made all required deductions (including deductions applicable to additional
sums payable under this Section 2.12) such Lender or such Agent, as the
case may be, receives an amount equal to the sum it would have received had
no such deductions been made, (ii) such Loan Party shall make all such
deductions and (iii) such Loan Party shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with
applicable law.

                  (b) In addition, each Loan Party shall pay any present or
future stamp, documentary, excise, property or similar taxes, charges or
levies that arise from any payment made hereunder or under the Notes or
from the execution, delivery or registration of, performance under, or
otherwise with respect to, this Agreement or the Notes (herein referred to
as "Other Taxes").

                  (c) Each Loan Party shall indemnify each Lender and each
Agent for and hold them harmless against the full amount of Taxes and Other
Taxes, and for the full amount of taxes of any kind imposed by any
jurisdiction on amounts payable under this Section 2.12, imposed on or paid
by such Lender or such Agent (as the case may be) and any liability
(including penalties, additions to tax, interest and expenses) arising
therefrom or with respect thereto. This indemnification payment shall be
made within 30 days from the date such Lender or such Agent (as the case
may be) makes written demand therefor.

                  (d) Within 30 days after the date of any payment of
Taxes, each Loan Party shall furnish to the Administrative Agent, at its
address referred to in Section 9.02, the original or a certified copy of a
receipt evidencing such payment. In the case of any payment hereunder or
under the Notes by or on behalf of a Loan Party through an account or
branch outside the United States or by or on behalf of a Loan Party by a
payor that is not a United States person, if such Loan Party determines
that no Taxes are payable in respect thereof, such Loan Party shall
furnish, or shall cause such payor to furnish, to the Administrative Agent,
at such address, an opinion of counsel acceptable to the Administrative
Agent stating that such payment is exempt from Taxes. For purposes of
subsections (d) and (e) of this Section 2.12, the terms "United States" and
"United States person" shall have the meanings specified in Section
7701(a)(9) and 7701(a)(10) of the Internal Revenue Code, respectively.

<PAGE>

                                    31

                  (e) Each Lender organized under the laws of a
jurisdiction outside the United States shall, on or prior to the date of
its execution and delivery of this Agreement in the case of each Initial
Lender, and on the date on which it becomes a Lender in the case of each
other Lender, and from time to time thereafter as requested in writing by
the Parent (but only so long thereafter as such Lender remains lawfully
able to do so), provide each of the Administrative Agent and the Parent
with two original Internal Revenue Service forms W-8BEN or W-8ECI or (in
the case of a Lender that has certified in writing to the Administrative
Agent that it is not a "bank" as defined in Section 881(c)(3)(A) of the
Internal Revenue Code) form W-8 (and, if such Lender delivers a form W-8,
a certificate representing that such Lender is not a "bank" for purposes of
Section 881(c)(3)(A) of the Internal Revenue Code, is not a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Internal
Revenue Code) of the Parent and is not a controlled foreign corporation
related to the Parent (within the meaning of Section 864(d)(4) of the
Internal Revenue Code)), as appropriate, or any successor or other form
prescribed by the Internal Revenue Service, certifying that such Lender is
exempt from or entitled to a reduced rate of United States withholding tax
on payments pursuant to this Agreement or the Notes or, in the case of a
Lender providing a form W-8, certifying that such Lender is a foreign
corporation, partnership, estate or trust. If the forms provided by a
Lender at the time such Lender first becomes a party to this Agreement
indicate a United States interest withholding tax rate in excess of zero,
withholding tax at such rate shall be considered excluded from Taxes unless
and until such Lender provides the appropriate forms certifying that a
lesser rate applies, whereupon withholding tax at such lesser rate only
shall be considered excluded from Taxes for periods governed by such forms;
provided, however, that if, at the effective date of the Assignment and
Acceptance pursuant to which a Lender becomes a party to this Agreement,
the Lender assignor was entitled to payments under subsection (a) of this
Section 2.12 in respect of United States withholding tax with respect to
interest paid at such date, then, to such extent, the term Taxes shall
include (in addition to withholding taxes that may be imposed in the future
or other amounts otherwise includible in Taxes) United States withholding
tax, if any, applicable with respect to the Lender assignee on such date.
If any form or document referred to in this subsection (e) requires the
disclosure of information, other than information necessary to compute the
tax payable and information required on the date hereof by Internal Revenue
Service form W-8BEN,W-8ECI or W-8 (and the related certificate described
above), that the Lender reasonably considers to be confidential, the Lender
shall give notice thereof to the Parent and shall not be obligated to
include in such form or document such confidential information.

                  (f) For any period with respect to which a Lender which
may lawfully do so has failed to provide the Parent with the appropriate
form described in subsection (e) above (other than if such failure is due
to a change in law occurring after the date on which a form originally was
required to be provided or if such form otherwise is not required under
subsection (e) above), such Lender shall not be entitled to indemnification
under subsection (a) or (c) of this Section 2.12 with respect to Taxes
imposed by the United States by reason of such failure; provided, however,
that should a Lender become subject to Taxes because of its failure to
deliver a form required hereunder, the Parent shall take such steps as such
Lender shall reasonably request to assist such Lender to recover such
Taxes.

<PAGE>

                                    32

                  (g) Each Lender represents and warrants to the Borrowers
that, as of the date such Lender becomes a party to this Agreement, such
Lender is entitled to receive payments hereunder from the Borrowers without
deduction or withholding for or on account of any Taxes.

                  SECTION 2.13. Sharing of Payments, Etc. If any Lender
shall obtain at any time any payment (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise, other than as a
result of an assignment pursuant to Section 9.07) (a) on account of
obligations due and payable to such Lender hereunder and under the Notes at
such time in excess of its ratable share (according to the proportion of
(i) the amount of such obligations due and payable to such Lender at such
time to (ii) the aggregate amount of the obligations due and payable to all
Lenders hereunder and under the Notes at such time) of payments on account
of the obligations due and payable to all Lenders hereunder and under the
Notes at such time obtained by all the Lenders at such time or (b) on
account of obligations owing (but not due and payable) to such Lender
hereunder and under the Notes at such time in excess of its ratable share
(according to the proportion of (i) the amount of such obligations owing to
such Lender at such time to (ii) the aggregate amount of the obligations
owing (but not due and payable) to all Lenders hereunder and under the
Notes at such time) of payments on account of the obligations owing (but
not due and payable) to all Lenders hereunder and under the Notes at such
time obtained by all of the Lenders at such time, such Lender shall
forthwith purchase from the other Lenders such interests or participating
interests in the obligations due and payable or owing to them, as the case
may be, as shall be necessary to cause such purchasing Lender to share the
excess payment ratably with each of them; provided, however, that if all or
any portion of such excess payment is thereafter recovered from such
purchasing Lender, such purchase from each other Lender shall be rescinded
and such other Lender shall repay to the purchasing Lender the purchase
price to the extent of such Lender's ratable share (according to the
proportion of (i) the purchase price paid to such Lender to (ii) the
aggregate purchase price paid to all Lenders) of such recovery together
with an amount equal to such Lender's ratable share (according to the
proportion of (i) the amount of such other Lender's required repayment to
(ii) the total amount so recovered from the purchasing Lender) of any
interest or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered. Each Borrower agrees that any
Lender so purchasing an interest or participating interest from another
Lender pursuant to this Section 2.13 may, to the fullest extent permitted
by law, exercise all its rights of payment (including the right of set-off)
with respect to such interest or participating interest, as the case may
be, as fully as if such Lender were the direct creditor of such Borrower in
the amount of such interest or participating interest, as the case may be.

                  SECTION 2.14. Use of Proceeds. The proceeds of the
Advances shall be available (and each Borrower agrees that it shall use
such proceeds) to provide working capital, and for other general corporate
purposes of the Borrowers and their respective Subsidiaries.

                  SECTION 2.15. Defaulting Lenders. (a) In the event that,
at any one time, (i) any Lender shall be a Defaulting Lender, (ii) such
Defaulting Lender shall owe a Defaulted Advance to any Borrower and (iii)
such Borrower shall be required to make any payment hereunder or under any
other Loan Document to or for the account of such Defaulting Lender, then
such Borrower may, to the fullest extent permitted by applicable law, set
off and otherwise apply the obligation of such Borrower to make such
payment to or for the account of such Defaulting Lender against the
obligation of such Defaulting Lender to make such Defaulted

<PAGE>

                                 33

Advance. In the event that, on any date, any Borrower shall so set off and
otherwise apply its obligation to make any such payment against the
obligation of such Defaulting Lender to make any such Defaulted Advance on
or prior to such date, the amount so set off and otherwise applied by such
Borrower shall constitute for all purposes of this Agreement and the other
Loan Documents a Committed Advance by such Defaulting Lender made on the
date of such setoff. Such Committed Advance shall be considered, for all
purposes of this Agreement, to comprise part of the Committed Borrowing in
connection with which such Defaulted Advance was originally required to
have been made pursuant to Section 2.01, even if the other Committed
Advances comprising such Committed Borrowing shall be Eurodollar Rate
Advances on the date such Committed Advance is deemed to be made pursuant
to this subsection (a). Each Borrower shall notify the Administrative Agent
at any time such Borrower exercises its right of set-off pursuant to this
subsection (a) and shall set forth in such notice (A) the name of the
Defaulting Lender and the Defaulted Advance required to be made by such
Defaulting Lender and (B) the amount set off and otherwise applied in
respect of such Defaulted Advance pursuant to this subsection (a). Any
portion of such payment otherwise required to be made by such Borrower to
or for the account of such Defaulting Lender which is paid by such
Borrower, after giving effect to the amount set off and otherwise applied
by such Borrower pursuant to this subsection (a), shall be applied by the
Administrative Agent as specified in subsection (b) or (c) of this Section
2.15.

                  (b) In the event that, at any one time, (i) any Lender
shall be a Defaulting Lender, (ii) such Defaulting Lender shall owe a
Defaulted Amount to any Agent or any of the other Lenders and (iii) any
Borrower shall make any payment hereunder or under any other Loan Document
to the Administrative Agent for the account of such Defaulting Lender, then
the Administrative Agent may, on its behalf or on behalf of such other
Agents or such other Lenders and to the fullest extent permitted by
applicable law, apply at such time the amount so paid by such Borrower to
or for the account of such Defaulting Lender to the payment of each such
Defaulted Amount to the extent required to pay such Defaulted Amount. In
the event that the Administrative Agent shall so apply any such amount to
the payment of any such Defaulted Amount on any date, the amount so applied
by the Administrative Agent shall constitute for all purposes of this
Agreement and the other Loan Documents payment, to such extent, of such
Defaulted Amount on such date. Any such amount so applied by the
Administrative Agent shall be retained by the Administrative Agent or
distributed by the Administrative Agent to such other Agents or such other
Lenders, ratably in accordance with the respective portions of such
Defaulted Amounts payable at such time to the Administrative Agent, such
other Agents and such other Lenders and, if the amount of such payment made
by such Borrower shall at such time be insufficient to pay all Defaulted
Amounts owing at such time to the Administrative Agent, such other Agents
and such other Lenders, in the following order of priority:

                  (i) first, to the Agents for any Defaulted Amounts then
         owing to the Agents, ratably in accordance with such respective
         Defaulted Amounts then owing to the Agents; and

                  (ii) second, to any other Lenders for any Defaulted
         Amounts then owing to such other Lenders, ratably in accordance
         with such respective Defaulted Amounts then owing to such other
         Lenders.

<PAGE>

                                    34

Any portion of such amount paid by such Borrower for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by
the Administrative Agent pursuant to this subsection (b), shall be applied
by the Administrative Agent as specified in subsection (c) of this Section
2.15.

                  (c) In the event that, at any one time, (i) any Lender
shall be a Defaulting Lender, (ii) such Defaulting Lender shall not owe a
Defaulted Advance or a Defaulted Amount and (iii) any Borrower, any Agent
or any other Lender shall be required to pay or distribute any amount
hereunder or under any other Loan Document to or for the account of such
Defaulting Lender, then such Borrower or such Agent or such other Lender
shall pay such amount to the Administrative Agent to be held by the
Administrative Agent, to the fullest extent permitted by applicable law, in
escrow or the Administrative Agent shall, to the fullest extent permitted
by applicable law, hold in escrow such amount otherwise held by it. Any
funds held by the Administrative Agent in escrow under this subsection (c)
shall be deposited by the Administrative Agent in an account with MGT, in
the name and under the control of the Administrative Agent, but subject to
the provisions of this subsection (c). The terms applicable to such
account, including the rate of interest payable with respect to the credit
balance of such account from time to time, shall be MGT's standard terms
applicable to escrow accounts maintained with it. Any interest credited to
such account from time to time shall be held by the Administrative Agent in
escrow under, and applied by the Administrative Agent from time to time in
accordance with the provisions of, this subsection (c). The Administrative
Agent shall, to the fullest extent permitted by applicable law, apply all
funds so held in escrow from time to time to the extent necessary to make
any Advances required to be made by such Defaulting Lender and to pay any
amount payable by such Defaulting Lender hereunder and under the other Loan
Documents to the Administrative Agent or any other Lender, as and when such
Advances or amounts are required to be made or paid and, if the amount so
held in escrow shall at any time be insufficient to make and pay all such
Advances and amounts required to be made or paid at such time, in the
following order of priority:

                  (i) first, to the Agents for any amounts then due and
         payable by such Defaulting Lender to the Agents hereunder, ratably
         in accordance with such amounts then due and payable to the
         Agents;

                  (ii) second, to any other Lenders for any amount then due
         and payable by such Defaulting Lender to such other Lenders
         hereunder, ratably in accordance with such respective amounts then
         due and payable to such other Lenders; and

                  (iii) third, to such Borrower for any Advance then
         required to be made by such Defaulting Lender pursuant to the
         Commitment of such Defaulting Lender.

In the event that any Lender that is a Defaulting Lender shall, at any
time, cease to be a Defaulting Lender, any funds held by the Administrative
Agent in escrow at such time with respect to such Lender shall be
distributed by the Administrative Agent to such Lender and applied by such
Lender to the obligations owing to such Lender at such time under this
Agreement and the other Loan Documents ratably in accordance with the
respective amounts of such obligations outstanding at such time.

<PAGE>

                                    35

                  (d) The rights and remedies against a Defaulting Lender
under this Section 2.15 are in addition to other rights and remedies that
such Borrower may have against such Defaulting Lender with respect to any
Defaulted Advance and that any Agent or any Lender may have against such
Defaulting Lender with respect to any Defaulted Amount.

                  SECTION 2.16. Replacement of Affected Lender. At any time
any Lender is an Affected Lender, the Borrowers may replace such Affected
Lender as a party to this Agreement with one or more other Lenders and/or
Assignees, and upon notice from the Borrowers such Affected Lender shall
assign, and without recourse or warranty, its WC Commitment, its Committed
Advances, its Committed Note and all of its other rights and obligations
hereunder to such other Lenders and/or Assignees for a purchase price equal
to the sum of the principal amount of the Committed Advances so assigned,
all accrued and unpaid interest thereon, such Affected Lender's ratable
share of all accrued and unpaid fees payable pursuant to Section 2.08, any
amounts payable pursuant to Section 9.04(c) as a result of such Affected
Lender receiving payment of any Eurodollar Rate Advance prior to the end of
an Interest Period therefor (assuming for such purpose that receipt of
payment pursuant to such Assignment and Acceptance constitutes payment of
such Eurodollar Rate Advances) and all other obligations owed to such
Affected Lender hereunder.

                                ARTICLE III

                           CONDITIONS OF LENDING

                  SECTION 3.01. Conditions Precedent to Effectiveness. This
Amended Agreement shall not become effective, and no Lender shall be
obligated to make any Advance, until each of the following conditions
precedent is satisfied:

                  (i) The Administrative Agent shall have received
         counterparts of this Amended Agreement duly executed by each of
         the parties listed on the signature pages hereof (or in the case
         of any party as to which such an executed counterpart shall not
         have been received, the Administrative Agent shall have received
         evidence satisfactory to it of the execution and delivery of a
         counterpart hereof by such party).

                  (ii) The Administrative Agent shall have received the
         following in form and substance reasonably satisfactory to the
         Administrative Agent (unless otherwise specified) and (except for
         the Committed Notes) in sufficient copies for each Lender:

                           (A) The Committed Notes payable to the order of
                  the Lenders.

                           (B) Certified copies of the resolutions of the
                  Board of Directors of each Loan Party approving the
                  transactions contemplated by the Loan Documents and each
                  Loan Document to which it is or is to be a party, and of
                  all documents evidencing other necessary corporate action
                  and governmental and other third party approvals and
                  consents, if any, with transactions contemplated by the
                  Loan Documents and each Loan Document to which it is or
                  is to be a party.

<PAGE>

                                     36

                           (C) A copy of a certificate of the Secretary of
                  State or other appropriate official of the jurisdiction
                  of incorporation of (x) each of ACE INA and ACE Guaranty,
                  dated reasonably near the date of the Initial Extension
                  of Credit, certifying (A) as to a true and correct copy
                  of its charter and each amendment thereto on file in such
                  Secretary's office and (B) that (1) such amendments are
                  the only amendments to its charter on file in such
                  Secretary's office, (2) it has paid all franchise taxes
                  to the date of such certificate and (C) it is duly
                  incorporated and in good standing or presently subsisting
                  under the laws of the State of the jurisdiction of its
                  incorporation and (y) each other Loan Party, dated
                  reasonably near the Initial Extension of Credit,
                  certifying as to the good standing (or existence) of such
                  Loan Party.

                           (D) A certificate of each Loan Party, signed on
                  behalf of such Loan Party by its President or a Vice
                  President and its Secretary or any Assistant Secretary,
                  dated the date of the Initial Extension of Credit (the
                  statements made in which certificate shall be true on and
                  as of the date of the Initial Extension of Credit),
                  certifying as to (1) in the case of each of ACE INA and
                  ACE Guaranty, the absence of any amendments to the
                  charter of such Loan Party since the date of the
                  Secretary of State's certificate referred to in Section
                  3.01(ii)(C), (2) a true and correct copy of the bylaws
                  (in the case of ACE INA and ACE Guaranty) or the
                  constitutional documents (in the case of each other Loan
                  Party) of such Loan Party as in effect on the date on
                  which the resolutions referred to in Section 3.01(ii)(B)
                  were adopted and on the date of the Initial Extension of
                  Credit, (3) the due incorporation and good standing or
                  valid existence of such Loan Party as a corporation
                  organized under the laws of the jurisdiction of its
                  incorporation, and the absence of any proceeding for the
                  dissolution or liquidation of such Loan Party, (4) the
                  truth of the representations and warranties contained in
                  the Loan Documents as though made on and as of the date
                  of the Initial Extension of Credit and (5) the absence of
                  any event occurring and continuing, or resulting from the
                  Initial Extension of Credit, that constitutes a Default.

                           (E) A certificate of the Secretary or an
                  Assistant Secretary of each Loan Party certifying the
                  names and true signatures of the officers of such Loan
                  Party authorized to sign each Loan Document to which it
                  is or is to be a party and the other documents to be
                  delivered hereunder and thereunder.

                           (F) A favorable opinion of (1) Maples and
                  Calder, Cayman Islands counsel for the Parent, in
                  substantially the form of Exhibit D-1 hereto and as to
                  such other matters as any Lender through the
                  Administrative Agent may reasonably request, (2) Mayer,
                  Brown & Platt, New York counsel for the Loan Parties, in
                  substantially the form of Exhibit D-2 hereto and as to
                  such other matters as any Lender through the
                  Administrative Agent may reasonably request, (3) Conyers
                  Dill & Pearman, Bermuda counsel for ACE Bermuda and
                  Tempest, in substantially the form of Exhibit D-3 hereto
                  and as to such other matters as any Lender through the
                  Administrative Agent may reasonably request and (4) Hogan
                  & Hartson, Maryland counsel for ACE Guaranty, in
                  substantially the form of

<PAGE>

                                   37

                  Exhibit D-4 hereto and as to such other matters as any
                  Lender through the Administrative Agent may reasonably
                  request.

                  (iii) There shall have occurred no material adverse
         change since December 31, 1999 in the business, financial
         condition, operations or properties of the Parent and its
         Subsidiaries, taken as a whole.

                  (iv) There shall exist no action, suit, investigation,
         litigation or proceeding affecting any Loan Party or any of its
         Subsidiaries pending or threatened before any court, governmental
         agency or arbitrator that (x) could be reasonably expected to have
         a Material Adverse Effect or (y) would reasonably be expected to
         materially adversely affect the legality, validity or
         enforceability of any Loan Document or the other transactions
         contemplated by the Loan Documents.

                  (v) The Borrowers shall have paid all accrued fees of the
         Agents and the Lenders and all accrued expenses of the Agents
         (including the accrued fees and expenses of counsel to the
         Administrative Agent and local counsel on behalf of all of the
         Lenders), in each case to the extent then due and payable.

                  On the Effective Date the Existing Agreement will be
automatically amended and restated in its entirety to read as set forth in
this Amended Agreement. On and after the Effective Date the rights and
obligations of the parties hereto shall be governed by this Amended
Agreement; provided the rights and obligations of the parties hereto with
respect to the period prior to the Effective Date shall continue to be
governed by the provisions of the Existing Agreement. On the Effective
Date, any Lender whose WC Commitment is changed to zero shall cease to be a
Lender party to this Agreement and all accrued fees and other amounts
payable under this Agreement for the account of such Lender shall be due
and payable on such date; provided that the provisions of Section 2.10,
2.12 and 9.04 of this Agreement shall continue to inure to the benefit of
each such Lender. The Notes delivered to each Lender under the Existing
Agreement shall be canceled and Notes under this Amended Agreement shall be
given in substitution therefor. Each Lender shall promptly after the
Effective Date deliver to the Borrowers for cancellation the Notes
delivered to such Lender under the Existing Agreement. The Agent shall
promptly notify the Borrowers and each Lender of the effectiveness of the
Amended Agreement, and such notice shall be conclusive and binding on all
parties hereto.

                  The Banks that are parties to the Existing 2,050 Million
Credit Facility, comprising the "Required Banks" as defined therein, and
ACE INA (the "Borrower" as defined under the Existing 2,050 Million Credit
Facility), Parent, ACE Bermuda and Tempest (Parent, ACE Bermuda and
Tempest, the "Guarantors" as defined under the Existing 2,050 Million
Credit Facility, and along with ACE INA, the "2,050 Million Obligors")
agree that the commitments under the Existing 2,050 Million Credit Facility
shall terminate in their entirety simultaneously with and subject to the
effectiveness of this Agreement and that the 2,050 Million Obligors shall
be obligated to pay on the Effective Date all principal amounts outstanding
thereunder, together with all accrued interest and fees and all other
amounts then payable thereunder to but excluding the Effective Date.

<PAGE>

                                 38

                  SECTION 3.02. Conditions Precedent to Each Committed
Borrowing. The obligation of each Lender to make a Committed Advance on the
occasion of each Committed Borrowing (including the initial Committed
Borrowing) shall be subject to the further conditions precedent that on the
date of such Committed Borrowing (a) the following statements shall be true
(and each of the giving of the applicable Notice of Committed Borrowing,
and the acceptance by the Borrower that requested such Committed Borrowing
of the proceeds of such Committed Borrowing shall constitute a
representation and warranty by such Borrower that both on the date of such
notice and on the date of such Committed Borrowing such statements are
true):

                  (i) the representations and warranties contained in each
         Loan Document are correct in all material respects on and as of
         such date, before and after giving effect to such Committed
         Borrowing and to the application of the proceeds therefrom, as
         though made on and as of such date, other than any such
         representations or warranties that, by their terms, refer to a
         specific date other than the date of such Committed Borrowing, in
         which case as of such specific date; and

                  (ii) no Default has occurred and is continuing, or would
         result from such Committed Borrowing or the application of the
         proceeds therefrom;

and (b) the Administrative Agent shall have received such other approvals,
opinions or documents as any Lender through the Administrative Agent may
reasonably request.

                  SECTION 3.03. Conditions Precedent to Each Competitive
Bid Borrowing. The obligation of each Lender that is to make a Competitive
Bid Advance on the occasion of a Competitive Bid Borrowing (including the
initial Competitive Bid Borrowing) to make such Competitive Bid Advance as
part of such Competitive Bid Borrowing is subject to the conditions
precedent that (i) the Administrative Agent shall have received the written
confirmatory Notice of Competitive Bid Borrowing with respect thereto, and
(ii) on the date of such Competitive Bid Borrowing the following statements
shall be true (and each of the giving of the applicable Notice of
Competitive Bid Borrowing and the acceptance by the Borrower that requested
such Competitive Bid Borrowing of the proceeds of such Competitive Bid
Borrowing shall constitute a representation and warranty by such Borrower
that on the date of such Competitive Bid Borrowing such statements are
true):

                  (a) the representations and warranties contained in
         Section 4.01 are correct in all material respects on and as of the
         date of such Competitive Bid Borrowing, before and after giving
         effect to such Competitive Bid Borrowing and to the application of
         the proceeds therefrom, as though made on and as of such date,
         other than any such representations or warranties that, by their
         terms, refer to a specific date other than the date of such
         Competitive Bid Borrowing, in which case as of such specific date,
         and

                  (b) no Default has occurred and is continuing, or would
         result from such Competitive Bid Borrowing or from the application
         of the proceeds therefrom.

                  SECTION 3.04.  Conditions Precedent for ACE Guaranty.  The
obligation of each Lender to make any Committed Advance or Competitive Bid
Advance to ACE Guaranty shall be

<PAGE>

                                   39

subject to the further condition precedent that on the date of such
Advance, and after giving effect thereto, the sum of the aggregate
principal amount of all Advances outstanding to ACE Guaranty hereunder
shall not exceed $50,000,000.

                                 ARTICLE IV

                       REPRESENTATIONS AND WARRANTIES

                  SECTION 4.01. Representations and Warranties of the
Borrowers. Each Borrower represents and warrants as follows (except that
ACE Guaranty represents and warrants only as to itself):

                  (a) Each Loan Party and each of its Subsidiaries (i) is
         duly organized or formed, validly existing and, to the extent such
         concept applies, in good standing under the laws of the
         jurisdiction of its incorporation or formation, (ii) is duly
         qualified and in good standing as a foreign corporation or other
         entity in each other jurisdiction in which it owns or leases
         property or in which the conduct of its business requires it to so
         qualify or be licensed except where the failure to so qualify or
         be licensed would not be reasonably likely to have a Material
         Adverse Effect and (iii) has all requisite power and authority
         (including, without limitation, all governmental licenses, permits
         and other approvals) to own or lease and operate its properties
         and to carry on its business as now conducted and as proposed to
         be conducted, except where the failure to have any license, permit
         or other approval would not be reasonably likely to have a
         Material Adverse Effect. All of the outstanding Equity Interests
         in each Borrower (other than the Parent) have been validly issued,
         are fully paid and non-assessable and (except for any Preferred
         Securities issued after the date of this Agreement) are owned,
         directly or indirectly, by the Parent free and clear of all Liens.

                  (b) Set forth on Schedule 4.01(b) hereto is a complete and
         accurate list of all Subsidiaries of each Loan Party.

                  (c) The execution, delivery and performance by each Loan
         Party of each Loan Document to which it is or is to be a party and
         the consummation of the transactions contemplated by the Loan
         Documents, are within such Loan Party's corporate powers, have
         been duly authorized by all necessary corporate action, and do not
         (i) contravene such Loan Party's constitutional documents, (ii)
         violate any law, rule, regulation (including, without limitation,
         Regulation X of the Board of Governors of the Federal Reserve
         System), order, writ, judgment, injunction, decree, determination
         or award, (iii) conflict with or result in the breach of, or
         constitute a default under, any contract, loan agreement,
         indenture, mortgage, deed of trust, lease or other instrument
         binding on or affecting any Loan Party, any of its Subsidiaries or
         any of their properties or (iv) except for the Liens created under
         the Loan Documents, result in or require the creation or
         imposition of any Lien upon or with respect to any of the
         properties of any Loan Party or any of its Subsidiaries. No Loan
         Party or any of its Subsidiaries is in violation of any such law,
         rule, regulation, order, writ, judgment, injunction, decree,

<PAGE>

                                       40

         determination or award or in breach of any such contract, loan
         agreement, indenture, mortgage, deed of trust, lease or other
         instrument, the violation or breach of which could be reasonably
         likely to have a Material Adverse Effect.

                  (d) No authorization or approval or other action by, and
         no notice to or filing with, any governmental authority or
         regulatory body or any other third party is required for (i) the
         due execution, delivery, recordation, filing or performance by any
         Loan Party of any Loan Document to which it is or is to be a party
         or the other transactions contemplated by the Loan Documents, or
         (ii) the exercise by any Agent or any Lender of its rights under
         the Loan Documents, except for the authorizations, approvals,
         actions, notices and filings which have been duly obtained, taken,
         given or made and are in full force and effect.

                  (e) This Agreement has been, and each other Loan Document
         when delivered hereunder will have been, duly executed and
         delivered by each Loan Party party thereto. This Agreement is, and
         each other Loan Document when delivered hereunder will be, the
         legal, valid and binding obligation of each Loan Party party
         thereto, enforceable against such Loan Party in accordance with
         its terms.

                  (f) There is no action, suit, investigation, litigation
         or proceeding affecting any Loan Party or any of its Subsidiaries,
         including any Environmental Action, pending or threatened before
         any court, governmental agency or arbitrator that (i) could be
         reasonably likely to have a Material Adverse Effect or (ii) would
         reasonably be expected to affect the legality, validity or
         enforceability of any Loan Document or the transactions
         contemplated by the Loan Documents.

                  (g) The Consolidated balance sheets of the Parent and its
         Subsidiaries as at December 31, 1999, and the related Consolidated
         statements of income and of cash flows of the Parent and its
         Subsidiaries for the Fiscal Year then ended, accompanied by an
         unqualified opinion of PricewaterhouseCoopers LLP, independent
         public accountants, copies of which have been furnished to each
         Lender, fairly present the Consolidated financial condition of the
         Parent and its Subsidiaries as at such date and the Consolidated
         results of operations of the Parent and its Subsidiaries for the
         Fiscal Year ended on such date, all in accordance with generally
         accepted accounting principles applied on a consistent basis, and,
         as of the Effective Date and the date of the Initial Extension of
         Credit, since December 31, 1999, there has been no Material
         Adverse Change.

                  (h) No information, exhibit or report furnished by or on
         behalf of any Loan Party to any Agent or any Lender in connection
         with the negotiation and syndication of the Loan Documents or
         pursuant to the terms of the Loan Documents contained any untrue
         statement of a material fact or omitted to state a material fact
         necessary to make the statements made therein not misleading as at
         the date it was dated (or if not dated, so delivered).

                  (i) Following application of the proceeds of each Advance
         hereunder, Margin Stock will constitute less than 25% of the value
         of those assets of any Borrower which are subject to any
         limitation on sale, pledge or other disposition hereunder.

<PAGE>

                                   41

                  (j) Neither any Loan Party nor any of its Subsidiaries is
         an "investment company", or an "affiliated person" of, or
         "promoter" or "principal underwriter" for, an "investment
         company", as such terms are defined in the Investment Company Act
         of 1940, as amended. Neither the making of any Advances nor the
         application of the proceeds or repayment thereof by any Borrower,
         nor the consummation of the other transactions contemplated by the
         Loan Documents, will violate any provision of such Act or any
         rule, regulation or order of the Securities and Exchange
         Commission thereunder.

                  (k) Neither any Loan Party nor any of its Subsidiaries is
         a party to any indenture, loan or credit agreement or any lease or
         other agreement or instrument or subject to any charter or
         corporate restriction that is reasonably likely to have a Material
         Adverse Effect.

                  (l) Each Loan Party is, individually and together with its
         Subsidiaries, Solvent.

                  (m) Except to the extent that any and all events and
         conditions under clauses (i) through (vi) below of this paragraph
         (m) in the aggregate are not reasonably expected to have a
         Material Adverse Effect,

                        (i) Schedule B (Actuarial Information) to the most
                  recent annual report (Form 5500 Series) for each Pension
                  Plan, copies of which have been filed with the Internal
                  Revenue Service, is complete and accurate and fairly
                  presents the funding status of such Pension Plan, and
                  since the date of such Schedule B there has been no
                  material adverse change in such funding status.

                       (ii) Neither any Loan Party nor any ERISA Affiliate
                  has incurred or is reasonably expected to incur any
                  Withdrawal Liability to any Multiemployer Plan.

                      (iii) Neither any Loan Party nor any ERISA Affiliate
                  has been notified by the sponsor of a Multiemployer Plan
                  that such Multiemployer Plan is in reorganization or has
                  been terminated, within the meaning of Title IV of ERISA,
                  and no such Multiemployer Plan is reasonably expected to
                  be in reorganization or to be terminated, within the
                  meaning of Title IV of ERISA.

                       (iv) With respect to each scheme or arrangement
                  mandated by a government other than the United States (a
                  "Foreign Government Scheme or Arrangement") and with
                  respect to each employee benefit plan that is not subject
                  to United States law maintained or contributed to by any
                  Loan Party or with respect to which any Subsidiary of any
                  Loan Party may have liability under applicable local law
                  (a "Foreign Plan"):

                                 (x) Any employer and employee
                           contributions required by law or by the terms of
                           any Foreign Government Scheme or Arrangement or
                           any Foreign Plan have been made, or, if
                           applicable, accrued, in accordance with normal
                           accounting practices.

<PAGE>

                                    42

                                 (y) The fair market value of the assets of
                           each funded Foreign Plan, the liability of each
                           insurer for any Foreign Plan funded through
                           insurance or the book reserve established for
                           any Foreign Plan, together with any accrued
                           contributions, is sufficient to procure or
                           provide for the accrued benefit obligations, as
                           of the date hereof, with respect to all current
                           and former participants in such Foreign Plan
                           according to the actuarial assumptions and
                           valuations most recently used to account for
                           such obligations in accordance with applicable
                           generally accepted accounting principles.

                                 (z) Each Foreign Plan required to be
                           registered has been registered and has been
                           maintained in good standing with applicable
                           regulatory authorities.

                        (v) To the extent the assets of any Loan Party are
                  or are deemed under applicable law to be "plan assets"
                  within the meaning of Department of Labor Regulation ss.
                  2510.3-101, the execution, delivery and performance of
                  the Loan Documents and the consummation of the
                  transactions contemplated therein will not result in a
                  non-exempt prohibited transaction within the meaning of
                  Section 406 of ERISA or Section 4975 of the Internal
                  Revenue Code.

                       (vi) During the twelve-consecutive-month period to
                  the date of the execution and delivery of this Agreement
                  and prior to any Borrowing hereunder, no steps have been
                  taken to terminate any Pension Plan, no contribution
                  failure has occurred with respect to any Pension Plan
                  sufficient to give rise to a lien under section 302(f) of
                  ERISA and no minimum funding waiver has been applied for
                  or is in effect with respect to any Pension Plan. No
                  condition exists or event or transaction has occurred or
                  is reasonably expected to occur with respect to any
                  Pension Plan which could result in any Loan Party or any
                  ERISA Affiliate incurring any material liability, fine or
                  penalty.

                  (n) (i) In the ordinary course of its business, each
         Borrower reviews the effect of Environmental Laws on the
         operations and properties of such Borrower and its Subsidiaries,
         in the course of which it identifies and evaluates associated
         liabilities and costs (including, without limitation, any capital
         or operating expenditures required for clean-up or closure of
         properties presently or previously owned, any capital or operating
         expenditures required to achieve or maintain compliance with
         environmental protection standards imposed by law or as a
         condition of any license, permit or contract, any related
         constraints on operating activities, including any periodic or
         permanent shutdown of any facility or reduction in the level of or
         change in the nature of operations conducted thereat, and any
         actual or potential liabilities to third parties and any related
         costs and expenses). On the basis of this review, each Borrower
         has reasonably concluded that such associated liabilities and
         costs, including the costs of compliance with Environmental Laws,
         are unlikely to have a Material Adverse Effect.

<PAGE>

                                    43

                       (ii) The operations and properties of each Loan
                  Party and each of its Subsidiaries comply in all material
                  respects with all applicable Environmental Laws and
                  Environmental Permits, except for non-compliances which
                  would not, individually or in the aggregate, reasonably
                  be expected to have a Material Adverse Effect; Hazardous
                  Materials have not been released, discharged or disposed
                  of on any property currently or formerly owned or
                  operated by any Loan Party or any of its Subsidiaries
                  that would reasonably be expected to have a Material
                  Adverse Effect; and there are no Environmental Actions
                  pending or threatened against any Loan Party or its
                  Subsidiaries, and no circumstances exist that could be
                  reasonably likely to form the basis of any such
                  Environmental Action, which (in either case),
                  individually or in the aggregate with all other such
                  pending or threatened actions and circumstances would
                  reasonably be expected to have a Material Adverse Effect.

                  (o) Each Loan Party and each of its Subsidiaries has
         filed, has caused to be filed or has been included in all material
         federal tax returns and all other material tax returns required to
         be filed and has paid all taxes shown thereon to be due, together
         with applicable interest and penalties, except to the extent
         contested in good faith and by appropriate proceedings (in which
         case adequate reserves have been established therefor in
         accordance with GAAP).

                                 ARTICLE V

                         COVENANTS OF THE BORROWERS

                  SECTION 5.01. Affirmative Covenants. So long as any
Advance or any other obligation of any Loan Party under any Loan Document
shall remain unpaid, or any Lender shall have any Commitment hereunder,
each Borrower will:

                  (a) Compliance with Laws, Etc. Comply, and cause each of
         its Subsidiaries to comply, in all material respects, with all
         applicable laws, rules, regulations and orders, such compliance to
         include, without limitation, compliance with Environmental Laws,
         Environmental Permits, ERISA and the Racketeer Influenced and
         Corrupt Organizations Chapter of the Organized Crime Control Act
         of 1970.

                  (b) Payment of Taxes, Etc. Pay and discharge, and cause
         each of its Subsidiaries to pay and discharge, before the same
         shall become delinquent, (i) all material taxes, assessments and
         governmental charges or levies imposed upon it or upon its
         property and (ii) all lawful material claims that, if unpaid,
         might by law become a Lien upon its property; provided, however,
         that neither any Borrower nor any of its Subsidiaries shall be
         required to pay or discharge any such tax, assessment, charge or
         claim that is being contested in good faith and by proper
         proceedings and as to which appropriate reserves are being
         maintained.

<PAGE>

                                        44

                  (c) Maintenance of Insurance. Maintain, and cause each of
         its Subsidiaries to maintain, insurance with responsible and
         reputable insurance companies or associations in such amounts and
         covering such risks as is usually carried by companies engaged in
         similar businesses and owning similar properties in the same
         general areas in which the Parent or such Subsidiary operates (it
         being understood that the foregoing shall not apply to maintenance
         of reinsurance or similar matters which shall be solely within the
         reasonable business judgment of the Parent and its Subsidiaries).

                  (d) Preservation of Corporate Existence, Etc. Preserve
         and maintain, and cause each of its Subsidiaries to preserve and
         maintain, its existence, legal structure, legal name, rights
         (charter and statutory), permits, licenses, approvals, privileges
         and franchises; provided, however, that the Parent and its
         Subsidiaries may consummate any merger or consolidation permitted
         under Section 5.02(c) and provided further that neither the Parent
         nor any of its Subsidiaries shall be required to preserve any
         right, permit, license, approval, privilege or franchise if the
         Board of Directors of the Parent or such Subsidiary shall
         determine that the preservation thereof is no longer desirable in
         the conduct of the business of the Parent or such Subsidiary, as
         the case may be, and that the loss thereof is not disadvantageous
         in any material respect to the Parent, such Subsidiary or the
         Lenders.

                  (e) Visitation Rights. At any reasonable time and from
         time to time upon prior notice, permit the Agents (upon request
         made by any Agent or any Lender), or any agents or representatives
         thereof, at the expense (so long as no Default has occurred and is
         continuing) of such Agents (or such Lender, as the case may be),
         to examine and make copies of and abstracts from the records and
         books of account of, and visit the properties of, the Parent and
         any of its Subsidiaries, and to discuss the affairs, finances and
         accounts of the Parent and any of its Subsidiaries with any of
         their officers or directors and with, so long as a representative
         of the Parent is present, their independent certified public
         accountants.

                  (f) Keeping of Books. Keep, and cause each of its
         Subsidiaries to keep, proper books of record and account, in which
         full and correct entries shall be made of all financial
         transactions and the assets and business of the Parent and each
         such Subsidiary sufficient to permit the preparation of financial
         statements in accordance with GAAP.

                  (g) Maintenance of Properties, Etc. Maintain and
         preserve, and cause each of its Subsidiaries to maintain and
         preserve, all of its properties that are used or useful in the
         conduct of its business in good working order and condition,
         ordinary wear and tear excepted.

                  (h) Transactions with Affiliates. Conduct, and cause each
         of its Subsidiaries to conduct, all transactions otherwise
         permitted under the Loan Documents with any of their Affiliates
         (other than any such transactions between Loan Parties or
         wholly-owned Subsidiaries of Loan Parties) on terms that are fair
         and reasonable and no less favorable than it would obtain in a
         comparable arm's-length transaction with a Person not an
         Affiliate.

<PAGE>

                                   45

                  (i) Pari Passu ranking. Each Borrower shall procure that
         its obligations under the Loan Documents will rank at least pari
         passu with all its other present and future unsecured and
         unsubordinated obligations, except for obligations which are
         mandatorily preferred by law applying to insurance companies
         generally.

                  SECTION 5.02. Negative Covenants. So long as any Advance
or any other obligation of any Loan Party under any Loan Document shall
remain unpaid, or any Lender shall have any Commitment hereunder, Parent
will not, at any time:

                  (a) Liens, Etc. Create, incur, assume or suffer to exist,
         or permit any of its Subsidiaries to create, incur, assume or
         suffer to exist, any Lien on or with respect to any of its
         properties of any character (including, without limitation,
         accounts) whether now owned or hereafter acquired, or assign or
         permit any of its Subsidiaries to assign, any accounts or other
         right to receive income, except:

                           (i) Liens created under the Loan Documents or in
                  respect of the Five-Year Credit Facility (provided that
                  all obligations of the Loan Parties under all of the
                  foregoing shall be ratably secured);

                           (ii)     Permitted Liens;

                           (iii)    Liens described on Schedule 5.02(a) hereto;

                           (iv) purchase money Liens upon or in real
                  property or equipment acquired or held by the Parent or
                  any of its Subsidiaries in the ordinary course of
                  business to secure the purchase price of such property or
                  equipment or to secure Debt incurred solely for the
                  purpose of financing the acquisition, construction or
                  improvement of any such property or equipment to be
                  subject to such Liens, or Liens existing on any such
                  property or equipment at the time of acquisition or
                  within 180 days following such acquisition (other than
                  any such Liens created in contemplation of such
                  acquisition that do not secure the purchase price), or
                  extensions, renewals or replacements of any of the
                  foregoing for the same or a lesser amount; provided,
                  however, that no such Lien shall extend to or cover any
                  property other than the property or equipment being
                  acquired, constructed or improved, and no such extension,
                  renewal or replacement shall extend to or cover any
                  property not theretofore subject to the Lien being
                  extended, renewed or replaced;

                           (v) Liens arising in connection with Capitalized
                  Leases; provided that no such Lien shall extend to or
                  cover any assets other than the assets subject to such
                  Capitalized Leases;

                           (vi) (A) any Lien existing on any asset of any
                  Person at the time such Person becomes a Subsidiary and
                  not created in contemplation of such event, (B) any Lien
                  on any asset of any Person existing at the time such
                  Person is merged or consolidated with or into the Parent
                  or any of it Subsidiaries in accordance with Section
                  5.02(c) and not created in contemplation of such event

<PAGE>

                                      46

                  and (C) any Lien existing on any asset prior to the
                  acquisition thereof by the Parent or any of its Subsidiaries
                  and not created in contemplation of such acquisition;

                           (vii) Liens securing obligations under credit
                  default swap transactions determined by reference to, or
                  Contingent Obligations in respect of, Debt issued by the
                  Parent or one of its Subsidiaries; such Debt not to
                  exceed an aggregate principal amount of $550,000,000;

                           (viii) Liens arising in the ordinary course of
                  its business which (A) do not secure Debt and (B) do not
                  in the aggregate materially detract from the value of its
                  assets or materially impair the use thereof in the
                  operation of its business;

                           (ix)   Liens on cash and Approved Investments
                  securing Hedge Agreements arising in the ordinary course of
                  business;

                           (x) other Liens securing Debt or other
                  obligations outstanding in an aggregate principal or face
                  amount not to exceed at any time 5% of Consolidated Net
                  Worth;

                           (xi) Liens consisting of deposits made by the
                  Parent or any insurance Subsidiary with any insurance
                  regulatory authority or other statutory Liens or Liens or
                  claims imposed or required by applicable insurance law or
                  regulation against the assets of the Parent or any
                  insurance Subsidiary, in each case in favor of
                  policyholders of the Parent or such insurance Subsidiary
                  or an insurance regulatory authority and in the ordinary
                  course of the Parent's or such insurance Subsidiary's
                  business;

                           (xii) Liens on Investments and cash balances of
                  the Parent or any insurance Subsidiary (other than
                  capital stock of any Subsidiary) securing obligations of
                  the Parent or any insurance Subsidiary in respect of (i)
                  letters of credit obtained in the ordinary course of
                  business and/or (ii) trust arrangements formed in the
                  ordinary course of business for the benefit of cedents to
                  secure reinsurance recoverables owed to them by the
                  Parent or any insurance Subsidiary;

                           (xiii) the replacement, extension or renewal of
                  any Lien permitted by clause (iii) or (vi) above upon or
                  in the same property theretofore subject thereto or the
                  replacement, extension or renewal (without increase in
                  the amount (other than in respect of fees, expenses and
                  premiums, if any) or change in any direct or contingent
                  obligor) of the Debt secured thereby;

                           (xiv) Liens securing obligations owed by any
                  Loan Party to any other Loan Party or owed by any
                  Subsidiary of the Parent (other than a Loan Party) to the
                  Parent or any other Subsidiary;

                           (xv)  Liens incurred in the ordinary course of
                  business in favor of financial intermediaries and clearing
                  agents pending clearance of payments for

<PAGE>

                                    47

                  investment or in the nature of set-off, banker's lien or
                  similar rights as to deposit accounts or other funds;

                           (xvi)  judgment or judicial attachment Liens,
                  provided that the enforcement of such Liens is effectively
                  stayed; and

                           (xvii) Liens arising in connection with
                  Securitization Transactions; provided that the aggregate
                  principal amount of the investment or claim held at any
                  time by all purchasers, assignees or other transferees of
                  (or of interests in) receivables and other rights to
                  payment in all Securitization Transactions shall not
                  exceed U.S.$250,000,000.

                  (b)      Change in Nature of Business.  Make any material
         change in the nature of the business of the Parent and its
         Subsidiaries, taken as a whole, as carried on at the date hereof.

                  (c)      Mergers, Etc.  Merge into or consolidate with any
         Person or permit any Person to merge into it, or permit any of its
         Subsidiaries to do so, except that:

                           (i) any Subsidiary of the Parent may merge into
                  or consolidate with any other Subsidiary of the Parent,
                  provided that, in the case of any such merger or
                  consolidation, the Person formed by such merger or
                  consolidation shall be a wholly owned Subsidiary of the
                  Parent, provided further that, in the case of any such
                  merger or consolidation to which a Borrower is a party,
                  the Person formed by such merger or consolidation shall
                  be such Borrower;

                           (ii) any Subsidiary of any Borrower may merge
                  into or consolidate with any other Person or permit any
                  other Person to merge into or consolidate with it;
                  provided that the Person surviving such merger shall be a
                  wholly owned Subsidiary of such Borrower;

                           (iii) in connection with any sale or other
                  disposition permitted under Section 5.02(d), any
                  Subsidiary of the Parent may merge into or consolidate
                  with any other Person or permit any other Person to merge
                  into or consolidate with it; and

                           (iv) the Parent or any other Borrower may merge
                  into or consolidate with any other Person; provided that,
                  in the case of any such merger or consolidation, the
                  Person formed by such merger or consolidation shall be
                  the Parent or such Borrower, as the case may be;

         provided, however, that in each case, immediately after giving
         effect thereto, no event shall occur and be continuing that
         constitutes a Default.

                  (d)      Sales, Etc., of Assets.  Sell, lease, transfer or
         otherwise dispose of or permit any other Borrower to sell, lease,
         transfer or otherwise dispose of, all or

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                                       48

         substantially all of its assets (excluding sales of investment
         securities in the ordinary course of business).

                  (e) Restricted Payments. Declare or pay any dividends,
         purchase, redeem, retire, defease or otherwise acquire for value
         any of its Equity Interests now or hereafter outstanding, return
         any capital to its stockholders, partners or members (or the
         equivalent Persons thereof) as such, make any distribution of
         assets, Equity Interests, obligations or securities to its
         stockholders, partners or members (or the equivalent Persons
         thereof) as such or issue or sell any Equity Interests or accept
         any capital contributions, or permit any of its Subsidiaries to do
         any of the foregoing, or permit any of its Subsidiaries to
         purchase, redeem, retire, defease or otherwise acquire for value
         any Equity Interests in the Parent or to issue or sell any Equity
         Interests therein, if in any case referred to above, a Default
         shall have occurred and be continuing at the time of such action
         or would result therefrom.

                  (f)      Accounting Changes.  Make or permit, or permit any
         of its Subsidiaries to make or permit, any change in accounting
         policies or reporting practices, except as permitted by GAAP.

                  SECTION 5.03. Reporting Requirements. So long as any
Advance or any other obligation of any Loan Party under any Loan Document
shall remain unpaid or any Lender shall have any Commitment hereunder, the
Parent will furnish to the Agents and the Lenders:

                  (a) Default Notice. As soon as possible and in any event
         within two days after the occurrence of each Default or any event,
         development or occurrence reasonably likely to have a Material
         Adverse Effect continuing on the date of such statement, a
         statement of the chief financial officer of the Parent setting
         forth details of such Default, event, development or occurrence
         and the action that the Parent or the applicable Subsidiary has
         taken and proposes to take with respect thereto.

                  (b) Annual Financials. (i) As soon as available and in
         any event within 90 days after the end of each Fiscal Year, a copy
         of the annual Consolidated audit report for such year for the
         Parent and its Subsidiaries, including therein a Consolidated
         balance sheet of the Parent and its Subsidiaries as of the end of
         such Fiscal Year and Consolidated statements of income and cash
         flows of the Parent and its Subsidiaries for such Fiscal Year, all
         reported on in a manner reasonably acceptable to the Securities
         and Exchange Commission in each case and accompanied by an opinion
         of PricewaterhouseCoopers LLP or other independent public
         accountants of recognized standing reasonably acceptable to the
         Required Lenders, together with (i) a certificate of the Chief
         Financial Officer or Chief Accounting Officer of the Parent
         stating that no Default has occurred and is continuing, or if a
         Default has occurred and is continuing, a statement as to the
         nature thereof and the action that the Parent has taken a proposes
         to take with respect thereto, and (ii) a schedule in form
         reasonably satisfactory to the Administrative Agent of the
         computations used by the Parent in determining, as of the end of
         such Fiscal Year, compliance with the covenants contained in
         Section 5.04.

<PAGE>

                                     49

                  (ii) As soon as available and in any event within 120
         days after the end of each Fiscal Year, a copy of the annual
         Consolidated audit report for such year for each Subsidiary
         Guarantor and its Subsidiaries, including therein a Consolidated
         balance sheet of such Subsidiary Guarantor and its Subsidiaries as
         of the end of such Fiscal Year and a Consolidated statement of
         income and a Consolidated statement of cash flows of such
         Subsidiary Guarantor and its Subsidiaries for such Fiscal Year, in
         each case accompanied by an opinion acceptable to the Required
         Lenders of PricewaterhouseCoopers LLP or other independent public
         accountants of recognized standing acceptable to the Required
         Lenders.

                  (c) Quarterly Financials. As soon as available and in any
         event within 45 days after the end of each of the first three
         quarters of each Fiscal Year, Consolidated balance sheets of the
         Parent and its Subsidiaries as of the end of such quarter and
         Consolidated statements of income and a Consolidated statement of
         cash flows of the Parent and its Subsidiaries for the period
         commencing at the end of the previous fiscal quarter and ending
         with the end of such fiscal quarter and Consolidated statements of
         income and a Consolidated statement of cash flows of the Parent
         and its Subsidiaries for the period commencing at the end of the
         previous Fiscal Year and ending with the end of such quarter,
         setting forth in each case in comparative form the corresponding
         figures for the corresponding date or period of the preceding
         Fiscal Year, all in reasonable detail and duly certified (subject
         to the absence of footnotes and normal year-end audit adjustments)
         by the Chief Financial Officer or Chief Accounting Officer of the
         Parent as having been prepared in accordance with GAAP, together
         with (i) a certificate of said officer stating that no Default has
         occurred and is continuing or, if a Default has occurred and is
         continuing, a statement as to the nature thereof and the action
         that the Parent has taken and proposes to take with respect
         thereto and (ii) a schedule in form reasonably satisfactory to the
         Administrative Agent of the computations used by the Parent in
         determining compliance with the covenants contained in Section
         5.04.

                  (d) Litigation. Promptly after the commencement thereof,
         notice of all actions, suits, investigations, litigation and
         proceedings before any court or governmental department,
         commission, board, bureau, agency or instrumentality, domestic or
         foreign, affecting any Loan Party or any of its Subsidiaries of
         the type described in Section 4.01(f).

                  (e) Securities Reports. Promptly after the sending or
         filing thereof, copies of all proxy statements, financial
         statements and reports that the Parent sends to its stockholders
         generally, and copies of all regular, periodic and special
         reports, and all registration statements, that any Loan Party or
         any of its Subsidiaries files with the Securities and Exchange
         Commission or any governmental authority that may be substituted
         therefor, or with any national securities exchange.

                  (f) ERISA. (i) ERISA Events. Promptly and in any event
         within 10 days after any Loan Party or any ERISA Affiliate
         institutes any steps to terminate any Pension Plan or becomes
         aware of the institution of any steps or any threat by the PBGC to
         terminate any Pension Plan, or the failure to make a required
         contribution to any Pension Plan if such failure is sufficient to
         give rise to a lien under section 302(f) of ERISA, or

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                                       50

         the taking of any action with respect to a Pension Plan which
         could result in the requirement that any Loan Party or any ERISA
         Affiliate furnish a bond or other security to the PBGC or such
         Pension Plan, or the occurrence of any event with respect to any
         Pension Plan which could result in any Loan Party or any ERISA
         Affiliate incurring any material liability, fine or penalty, or
         any material increase in the contingent liability of any Loan
         Party or any ERISA Affiliate with respect to any post-retirement
         Welfare Plan benefit, notice thereof and copies of all
         documentation relating thereto.

                  (ii)     Plan Annual Reports.  Promptly upon request of any
         Agent or any Lender, copies of each Schedule B (Actuarial Information)
         to the annual report (Form 5500 Series) with respect to each Pension
         Plan.

                  (iii) Multiemployer Plan Notices. Promptly and in any
         event within 15 Business Days after receipt thereof by any Loan
         Party or any ERISA Affiliate from the sponsor of a Multiemployer
         Plan, copies of each notice concerning (A) the imposition of
         Withdrawal Liability by any such Multiemployer Plan, (B) the
         reorganization or termination, within the meaning of Title IV of
         ERISA, of any such Multiemployer Plan or (C) the amount of
         liability incurred, or that may be incurred, by such Loan Party or
         any ERISA Affiliate in connection with any event described in
         clause (A) or (B); provided, however, that such notice and
         documentation shall not be required to be provided (except at the
         specific request of any Agent or Lender, in which case such notice
         and documentation shall be promptly provided following such
         request) if such condition or event is not reasonably expected to
         result in any Loan Party or any ERISA Affiliate incurring any
         material liability, fine, or penalty.

                  (g) Statutory Statements. As soon as available and in any
         event within 20 days after submission, each statutory statement of
         the Loan Parties (or any of them) in the form submitted to The
         Insurance Division of the Office of Registrar of Companies of
         Bermuda.

                  (h) Regulatory Notices, Etc. Promptly after any
         Responsible Officer of the Parent obtains knowledge thereof, (i) a
         copy of any notice from the Bermuda Minister of Finance or the
         Registrar of Companies or any other person of the revocation, the
         suspension or the placing of any restriction or condition on the
         registration as an insurer of any Borrower under the Bermuda
         Insurance Act 1978 (and related regulations) or of the institution
         of any proceeding or investigation which could result in any such
         revocation, suspension or placing of such a restriction or
         condition, (ii) copies of any correspondence by, to or concerning
         any Loan Party relating to an investigation conducted by the
         Bermuda Minister of Finance, whether pursuant to Section 132 of
         the Bermuda Companies Act 1981 (and related regulations) or
         otherwise and (iii) a copy of any notice of or requesting or
         otherwise relating to the winding-up or any similar proceeding of
         or with respect to any Loan Party.

                  (i) Other Information. Such other information respecting
         the business, condition (financial or otherwise), operations,
         performance, properties or prospects of any Loan Party or any of
         its Subsidiaries as any Agent, or any Lender through the
         Administrative Agent, may from time to time reasonably request.

<PAGE>

                                      51

                  SECTION 5.04. Financial Covenants. So long as any Advance
or any other obligation of any Loan Party under any Loan Document shall
remain unpaid or any Lender shall have any Commitment hereunder, the Parent
will:

                  (a)      Adjusted Consolidated Debt to Total Capitalization
         Ratio.  Maintain at all times a ratio of Adjusted Consolidated Debt to
         Total Capitalization of not more than 0.35 to 1.

                  (b) Consolidated Net Worth. Maintain at all times
         Consolidated Net Worth in an amount equal to the sum of (i)
         $3,600,000,000 plus (ii) 25% of Consolidated Net Income for each
         fiscal quarter of the Parent ending on and after March 31, 2000
         for which such Consolidated Net Income is positive.

                                 ARTICLE VI

                             EVENTS OF DEFAULT

                  SECTION 6.01.  Events of Default.  If any of the following
events ("Events of Default") shall occur and be continuing:

                  (a) (i) any Borrower shall fail to pay any principal of
         any Advance when the same shall become due and payable or (ii) any
         Borrower shall fail to pay any interest on any Advance, or any
         Loan Party shall fail to make any other payment under any Loan
         Document, in each case under this clause (ii) within five Business
         Days after the same becomes due and payable; or

                  (b) any representation or warranty made by any Loan Party
         (or any of its officers) under or in connection with any Loan
         Document shall prove to have been incorrect in any material
         respect when made; or

                  (c) any Borrower shall fail to perform or observe any
         term, covenant or agreement contained in Section 2.14, 5.01(d)
         (with respect to the Parent) or (e), 5.02 or 5.04; or

                  (d) any Loan Party shall fail to perform or observe any
         other term, covenant or agreement contained in any Loan Document
         on its part to be performed or observed if such failure shall
         remain unremedied for 30 days after the earlier of the date on
         which (i) a Responsible Officer becomes aware of such failure or
         (ii) written notice thereof shall have been given to such Loan
         Party by any Agent or any Lender; or

                  (e) the Parent or any of its Subsidiaries shall fail to
         pay any Material Financial Obligation (but excluding Debt
         outstanding hereunder) of the Parent or such Subsidiary (as the
         case may be), when the same becomes due and payable (whether by
         scheduled maturity, required prepayment, acceleration, demand or
         otherwise), and such failure shall continue after the applicable
         grace period, if any, specified in the agreement or instrument
         relating to such Material Financial Obligation; or any other event
         shall

<PAGE>

                                     52

         occur or condition shall exist under any agreement or instrument
         relating to any such Material Financial Obligation 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 to permit the acceleration of, the
         maturity of such Material Financial Obligation or otherwise to
         cause, or to permit the holder thereof to cause, such Material
         Financial Obligation to mature; or any such Material Financial
         Obligation 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 an
         offer to prepay, redeem, purchase or defease such Material
         Financial Obligation shall be required to be made, in each case
         prior to the stated maturity thereof; or

                  (f) any Loan Party or any Significant Subsidiary shall
         generally not pay its debts as such debts become due, or shall
         admit in writing its inability to pay its debts generally, or
         shall make a general assignment for the benefit of creditors; or
         any proceeding shall be instituted by or against any Loan Party or
         any Significant Subsidiary seeking to adjudicate it a bankrupt or
         insolvent, or seeking liquidation, winding up, reorganization,
         arrangement, adjustment, protection, relief, or composition of it
         or its debts under any law relating to bankruptcy, insolvency or
         reorganization or relief of debtors, or seeking the entry of an
         order for relief or the appointment of a receiver, trustee, or
         other similar official for it or for any substantial part of its
         property and, in the case of any such proceeding instituted
         against it (but not instituted by it) that is being diligently
         contested by it in good faith, either such proceeding shall remain
         undismissed or unstayed for a period of 30 days or any of the
         actions sought in such proceeding (including, without limitation,
         the entry of an order for relief against, or the appointment of a
         receiver, trustee, custodian or other similar official for, it or
         any substantial part of its property) shall occur; or any Loan
         Party or any Significant Subsidiary shall take any corporate
         action to authorize any of the actions set forth above in this
         subsection (f); or

                  (g) any final judgment or order for the payment of money
         in excess of $100,000,000 shall be rendered against any Loan Party
         or any of its Subsidiaries and either (i) enforcement proceedings
         shall have been commenced by any creditor upon such judgment or
         order or (ii) there shall be any 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

                  (h) any non-monetary judgment or order shall be rendered
         against any Loan Party or any of its Subsidiaries that could be
         reasonably likely to have a Material Adverse Effect, and there
         shall be any 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

                  (i) any provision of any Loan Document after delivery
         thereof pursuant to Section 3.01 shall for any reason cease to be
         valid and binding on or enforceable against any Loan Party party
         to it (other than as a result of a transaction permitted
         hereunder), or any such Loan Party shall so state in writing; or

                  (j)      a Change of Control shall occur; or

<PAGE>

                                     53

                  (k) Any Loan Party or any ERISA Affiliate shall incur or
         shall be reasonably expected to incur liability in excess of
         $25,000,000 in the aggregate with respect to any Pension Plan or
         any Multiemployer Plan in connection with the occurrence of any of
         the following events or existence of any of the following
         conditions:

                           (i) Institution of any steps by any Loan Party,
                  any ERISA Affiliate or any other Person, including,
                  without limitation, the PBGC to terminate a Pension Plan
                  if as a result of such termination a Loan Party or any
                  ERISA Affiliate could be required to make a contribution
                  to such Pension Plan, or could incur a liability or
                  obligation;

                           (ii) A contribution failure occurs with respect
                  to any Pension Plan sufficient to give rise to a lien
                  under section 302(f) of ERISA; or

                           (iii) Any condition shall exist or event shall
                  occur with respect to a Pension Plan that is reasonably
                  expected to result in any Loan Party or any ERISA
                  Affiliate being required to furnish a bond or security to
                  the PBGC or such Pension Plan, or incurring a liability
                  or obligation.

                  (l) Any Loan Party or any ERISA Affiliate shall have been
         notified by the sponsor of a Multiemployer Plan that it has
         incurred Withdrawal Liability to such Multiemployer Plan; or

                  (m) any Loan Party or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or is being terminated, within the meaning of
Title IV of ERISA, and as a result of such reorganization or termination
the aggregate annual contributions of the Loan Parties and the ERISA
Affiliates to all Multiemployer Plans that are then in reorganization or
being terminated have been or will be increased over the amounts
contributed to such Multiemployer Plans for the plan years of such
Multiemployer Plans immediately preceding the plan year in which such
reorganization or termination occurs;

then, and in any such event, the Administrative Agent (i) shall at the
request, or may with the consent, of the Required Lenders, by notice to the
Borrowers, declare the Commitments of each Lender and the obligation of
each Lender to make Advances to be terminated, whereupon the same shall
forthwith terminate, and/or (ii) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrowers, declare the
Notes, all interest thereon and all other amounts payable under this
Agreement and the other Loan Documents to be forthwith due and payable,
whereupon the Notes, all such interest and all such amounts shall become
and be forthwith due and payable, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by the
Borrowers; provided, however, that in the event of an actual or deemed
entry of an order for relief with respect to any Borrower under the Federal
Bankruptcy Code, (x) the Commitments of each Lender and the obligation of
each Lender to make Advances shall automatically be terminated and (y) the
Notes, all such interest and all such amounts shall automatically become
and be due and payable, without presentment, demand, protest or any notice
of any kind, all of which are hereby expressly waived by the Borrowers.

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                                   54

                                ARTICLE VII

                                THE GUARANTY

                  SECTION 7.01. The Guaranty. (a) Each Guarantor hereby
jointly and severally, unconditionally, absolutely and irrevocably
guarantees the full and punctual payment (whether at stated maturity, upon
acceleration or otherwise) of all amounts payable by each of the other
Borrowers under the Loan Documents including, without limitation, the
principal of and interest on each Note issued by such other Borrowers
pursuant to this Agreement. Upon failure by a Borrower to pay punctually
any such amount, each other Guarantor agrees to pay forthwith on demand the
amount not so paid at the place and in the manner specified in this
Agreement.

                  (b) Each Guarantor (other than the Parent), and by its
acceptance of this Guaranty, the Administrative Agent and each other
Lender, hereby confirms that it is the intention of all such Persons that
this Guaranty and the obligations of each Guarantor hereunder not
constitute a fraudulent transfer or conveyance for purposes of Bankruptcy
Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer
Act or any similar foreign, federal or state law to the extent applicable
to this Guaranty and the obligations of each Guarantor (other than the
Parent) hereunder. To effectuate the foregoing intention, the
Administrative Agent, the other Lenders and the Guarantors hereby
irrevocably agree that the obligations of each Guarantor (other than the
Parent) under this Article VII at any time shall be limited to the maximum
amount as will result in the obligations of such Guarantor under this
Guaranty not constituting a fraudulent transfer or conveyance.

                  SECTION 7.02. Guaranty Unconditional. The obligations of
each Guarantor under this Article VII shall be unconditional, absolute and
irrevocable and, without limiting the generality of the foregoing, shall
not be released, discharged or otherwise affected by:

                  (i)      any extension, renewal, settlement, compromise,
         waiver or release in respect of any obligation of any other obligor
         under any of the Loan Documents, by operation of law or otherwise;

                  (ii)     any modification or amendment of or supplement to
         any of the Loan Documents;

                  (iii)    any release, non-perfection or invalidity of any
         direct or indirect security for any obligation of any other obligor
         under any of the Loan Documents;

                  (iv) any change in the corporate existence, structure or
         ownership of any obligor, or any insolvency, bankruptcy,
         reorganization or other similar proceeding affecting any other
         obligor or its assets or any resulting release or discharge of any
         obligation of any other obligor contained in any of the Loan
         Documents;

                  (v)      the existence of any claim, set-off or other rights
         which any obligor may have at any time against any other obligor, the
         Administrative Agent, any Lender or any

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                                       55

         other corporation or person, whether in connection with any of the
         Loan Documents or any unrelated transactions, provided that
         nothing herein shall prevent the assertion of any such claim by
         separate suit or compulsory counterclaim;

                  (vi) any invalidity or unenforceability relating to or
         against any other obligor for any reason of any of the Loan
         Documents, or any provision of applicable law or regulation
         purporting to prohibit the payment by any other obligor of the
         principal of or interest on any Note or any other amount payable
         under any of the Loan Documents; or

                  (vii) any other act or omission to act or delay of any
         kind by any obligor, the Administrative Agent, any Lender or any
         other corporation or person or any other circumstance whatsoever
         which might, but for the provisions of this paragraph, constitute
         a legal or equitable discharge of or defense to a Guarantor's
         obligations under this Article VII.

                  SECTION 7.03. Discharge Only upon Payment in Full;
Reinstatement in Certain Circumstances. Each Guarantor's obligations under
this Article VII shall remain in full force and effect until the
Commitments shall have terminated and the principal of and interest on the
Notes and all other amounts payable by the other Borrowers under the Loan
Documents shall have been paid in full. If at any time any payment of the
principal of or interest on any Note or any other amount payable by a
Borrower under the Loan Documents is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy or reorganization of
such Borrower or otherwise, each Guarantor's obligations under this Article
VII with respect to such payment shall be reinstated as though such payment
had been due but not made at such time.

                  SECTION 7.04. Waiver by the Guarantors. Each Guarantor
irrevocably waives acceptance hereof, presentment, demand, protest and any
notice not provided for herein, as well as any requirement that at any time
any action be taken by any corporation or person against any other obligor
or any other corporation or person.

                  SECTION 7.05. Subrogation. Each Guarantor hereby
unconditionally and irrevocably agrees not to exercise any rights that it
may now have or hereafter acquire against any other Borrower, any other
Loan Party or any other insider guarantor that arise from the existence,
payment, performance or enforcement of such Guarantor's obligations under
or in respect of this Guaranty or any other Loan Document, including,
without limitation, any right of subrogation, reimbursement, exoneration,
contribution or indemnification and any right to participate in any claim
or remedy of any Lender against any other Borrower, any other Loan Party or
any other insider guarantor or any collateral, whether or not such claim,
remedy or right arises in equity or under contract, statute or common law,
including, without limitation, the right to take or receive from any other
Borrower, any other Loan Party or any other insider guarantor, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right, unless and
until all amounts payable under this Guaranty shall have been paid in full
in cash, and the Commitments shall have expired or been terminated. If any
amount shall be paid to any Guarantor in violation of the immediately
preceding sentence at any time prior to the latest of (a) the payment in
full in cash of all amounts payable under this Guaranty, and (b) the
Termination Date, such amount shall be received and held in trust for the
benefit of the Lenders, shall be segregated from other property and funds
of

<PAGE>

                                     56

such Guarantor and shall forthwith be paid or delivered to the
Administrative Agent in the same form as so received (with any necessary
endorsement or assignment) to be credited and applied to all amounts
payable under this Guaranty, whether matured or unmatured, in accordance
with the terms of the Loan Documents, or to be held as collateral for any
amounts payable under this Guaranty thereafter arising. If (i) any
Guarantor shall make payment to any Lender of all or any amounts payable
under this Guaranty, (ii) all amounts payable under this Guaranty shall
have been paid in full in cash, and (iii) the Termination Date shall have
occurred, the Lenders will, at such Guarantor's request and expense,
execute and deliver to such Guarantor appropriate documents, without
recourse and without representation or warranty, necessary to evidence the
transfer by subrogation to such Guarantor of an interest in the obligations
resulting from such payment made by such Guarantor pursuant to this
Guaranty.

                  SECTION 7.06. Stay of Acceleration. If acceleration of
the time for payment of any amount payable by any Borrower under any of the
Loan Documents is stayed upon the insolvency, bankruptcy or reorganization
of such Borrower, all such amounts otherwise subject to acceleration under
the terms of this Agreement shall nonetheless by payable by the Guarantors
under this Article VII forthwith on demand by the Administrative Agent made
at the request of the requisite proportion of the Lenders.

                  SECTION 7.07. Continuing Guaranty; Assignments. This
Guaranty is a continuing guaranty and shall (a) remain in full force and
effect until the latest of (i) the payment in full in cash of all amounts
payable under this Guaranty and (ii) the Termination Date, (b) be binding
upon each Guarantor, its successors and assigns and (c) inure to the
benefit of and be enforceable by the Lenders and their successors,
transferees and assigns. Without limiting the generality of clause (c) of
the immediately preceding sentence, any Lender may assign or otherwise
transfer all or any portion of its rights and obligations under this
Agreement (including, without limitation, all or any portion of its
Commitments, the Advances owing to it and the Note or Notes held by it) to
any other Person, and such other Person shall thereupon become vested with
all the benefits in respect thereof granted to such Lender herein or
otherwise, in each case as and to the extent provided in Section 9.07.

                                ARTICLE VIII

                                 THE AGENTS

                  SECTION 8.01. Authorization and Action. Each Lender (in
its capacity as a Lender) hereby appoints and authorizes each Agent to take
such action as agent on its behalf and to exercise such powers and
discretion under this Agreement and the other Loan Documents as are
delegated to such Agent by the terms hereof and thereof, together with such
powers and discretion as are reasonably incidental thereto. As to any
matters not expressly provided for by the Loan Documents (including,
without limitation, enforcement or collection of the Notes), no Agent shall
be required to exercise any discretion or take any action, but shall be
required to act or to refrain from acting (and shall be fully protected in
so acting or refraining from acting) upon the instructions of the Required
Lenders or all the Lenders where unanimity is required, and such
instructions shall be binding upon all Lenders and all holders of Notes;
provided, however, that

<PAGE>

                                  57

no Agent shall be required to take any action that exposes such Agent to
personal liability or that is contrary to this Agreement or applicable law.
Each Agent agrees to give to each Lender prompt notice of each notice given
to it by any Borrower pursuant to the terms of this Agreement.

                  SECTION 8.02. Agents' Reliance, Etc. Neither any Agent
nor any of their respective directors, officers, agents or employees shall
be liable for any action taken or omitted to be taken by it or them under
or in connection with the Loan Documents, except for its or their own gross
negligence or willful misconduct. Without limitation of the generality of
the foregoing, each Agent: (a) may consult with legal counsel (including
counsel for any Loan Party), independent public accountants and other
experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of
such counsel, accountants or experts; (b) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for
any statements, warranties or representations (whether written or oral)
made in or in connection with the Loan Documents; (c) shall not have any
duty to ascertain or to inquire as to the performance or observance of any
of the terms, covenants or conditions of any Loan Document on the part of
any Loan Party or to inspect the property (including the books and records)
of any Loan Party; (d) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or
value of, or the perfection or priority of any lien or security interest
created or purported to be created under or in connection with, any Loan
Document or any other instrument or document furnished pursuant thereto;
and (e) shall incur no liability under or in respect of any Loan Document
by acting upon any notice, consent, certificate or other instrument or
writing (which may be by telegram or telecopy) reasonably believed by it to
be genuine and signed or sent by the proper party or parties.

                  SECTION 8.03. MGT and Affiliates. With respect to its WC
Commitments, the Committed Advances made by it and the Committed Notes
issued to it, MGT shall have the same rights and powers under the Loan
Documents as any other Lender and may exercise the same as though it were
not an Agent; and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated, include MGT in its individual capacity. MGT and its
affiliates may accept deposits from, lend money to, act as trustee under
indentures of, accept investment banking engagements from and generally
engage in any kind of business with, any Loan Party, any of its
Subsidiaries and any Person that may do business with or own securities of
any Loan Party or any such Subsidiary, all as if MGT were not Agent and
without any duty to account therefor to the Lenders.

                  SECTION 8.04. Lender Credit Decision. Each Lender
acknowledges that it has, independently and without reliance upon any Agent
or any other Lender and based on the financial statements referred to in
Section 4.01 and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and
without reliance upon any Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement.

<PAGE>

                                     58

                  SECTION 8.05. Indemnification. (a) Each Lender severally
agrees to indemnify each Agent (to the extent not promptly reimbursed by
the Borrowers) from and against such Lender's ratable share (determined as
provided below) of any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of
any kind or nature whatsoever that may be imposed on, incurred by, or
asserted against such Agent in any way relating to or arising out of the
Loan Documents or any action taken or omitted by such Agent under the Loan
Documents; provided, however, that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from
such Agent's gross negligence or willful misconduct. Without limitation of
the foregoing, each Lender agrees to reimburse each Agent promptly upon
demand for its ratable share of any costs and expenses (including, without
limitation, fees and expenses of counsel) payable by the Borrowers under
Section 9.04, to the extent that such Agent is not promptly reimbursed for
such costs and expenses by the Borrowers.

                  (b) For purposes of this Section 8.05, the Lenders'
respective ratable shares of any amount shall be determined, at any time,
according to the sum of (i) the aggregate principal amount of the Advances
outstanding at such time and owing to the respective Lenders and (ii) their
respective Unused WC Commitments at such time. The failure of any Lender to
reimburse any Agent promptly upon demand for its ratable share of any
amount required to be paid by the Lenders to such Agent as provided herein
shall not relieve any other Lender of its obligation hereunder to reimburse
such Agent for its ratable share of such amount, but no Lender shall be
responsible for the failure of any other Lender to reimburse such Agent for
such other Lender's ratable share of such amount. Without prejudice to the
survival of any other agreement of any Lender hereunder, the agreement and
obligations of each Lender contained in this Section 8.05 shall survive the
payment in full of principal, interest and all other amounts payable
hereunder and under the other Loan Documents.

                  SECTION 8.06. Successor Agents. Any Agent may resign at
any time by giving written notice thereof to the Lenders and the Parent 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 Agent, subject (so long as no Event of Default
exists) to the consent of the Parent (which consent shall not be
unreasonably withheld). If no successor Agent shall have been so appointed
by the Required Lenders, and shall have accepted such appointment, within
30 days after the retiring Agent's giving of notice of resignation or the
Required Lenders' removal of the retiring Agent, then the retiring Agent
may, on behalf of the Lenders, appoint a successor Agent, which shall be a
commercial bank organized under the laws of the United States or of any
State thereof and having a combined capital and surplus of at least
$250,000,000. Upon the acceptance of any appointment as Agent hereunder by
a successor Agent such successor Agent shall succeed to and become vested
with all the rights, powers, discretion, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties
and obligations under the Loan Documents. If within 45 days after written
notice is given of the retiring Agent's resignation or removal under this
Section 8.06 no successor Agent shall have been appointed and shall have
accepted such appointment, then on such 45th day (i) the retiring Agent's
resignation or removal shall become effective, (ii) the retiring 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 Agent under the Loan Documents until such time, if
any, as the Required Lenders appoint a successor Agent as

<PAGE>

                                    59

provided above. After any retiring Agent's resignation or removal hereunder
as Agent shall have become effective, the provisions of this Article VIII
shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Agent under this Agreement.

                                 ARTICLE IX

                               MISCELLANEOUS

                  SECTION 9.01. Amendments, Etc. No amendment or waiver of
any provision of this Agreement or the Notes or any other Loan Document,
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
Required Lenders (and, in the case of an amendment, the Parent), and then
any such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, however, that no
amendment, waiver or consent shall, unless in writing and signed by all of
the Lenders (other than any Lender that is, at such time, a Defaulting
Lender), do any of the following at any time: (i) waive any of the
conditions specified in Section 3.01 or, in the case of the Initial
Extension of Credit, Section 3.02 or 3.03, as applicable, (ii) change the
number of Lenders or the percentage of (x) the WC Commitments or (y) the
aggregate unpaid principal amount of the Advances that, in each case, shall
be required for the Lenders or any of them to take any action hereunder,
(iii) reduce or limit the obligations of any Guarantor under Article VII or
release such Guarantor or otherwise limit such Guarantor's liability with
respect to the obligations owing to the Agents and the Lenders, (iv) amend
this Section 9.01 or any of the definitions herein that would have such
effect, (v) increase the WC Commitments of the Lenders or subject the
Lenders to any additional obligations, (vi) reduce the principal of, or
interest on, the Notes or any fees or other amounts payable hereunder,
(vii) postpone any date fixed for any payment of principal of, or interest
on, the Notes or any fees or other amounts payable hereunder, (viii) extend
the Termination Date (it being understood that an extension of the
Termination Date pursuant to Section 2.01(b) is not an amendment subject to
this Section 9.01) or (ix) limit the liability of any Loan Party under any
of the Loan Documents; provided further that no amendment, waiver or
consent shall, unless in writing and signed by an Agent in addition to the
Lenders required above to take such action, affect the rights or duties of
such Agent under this Agreement or the other Loan Documents.

                  SECTION 9.02. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing (including
telegraphic or telecopy communication) and mailed, telegraphed, telecopied
or delivered, if to any Borrower, at its address set forth below on the
signature pages hereof; if to any Lender, the address for notices specified
in its Administrative Questionnaire; and if to the Administrative Agent, at
its address at 500 Stanton Christiana Road, Newark, Delaware 19713,
Attention: Bill Wood; or, as to any party, at such other address as shall
be designated by such party in a written notice to the other parties. All
such notices and communications shall, when mailed, telegraphed or
telecopied, be effective when deposited in the mails, delivered to the
telegraph company or transmitted by telecopier, respectively, except that
notices and communications to any Agent pursuant to Article II, III or VIII
shall not be effective until received by such Agent. Manual delivery by
telecopier of an executed counterpart of any amendment or waiver of any
provision of this Agreement or the Notes or of any Exhibit

<PAGE>

                                    60

hereto to be executed and delivered hereunder shall be effective as
delivery of an original executed counterpart thereof.

                  SECTION 9.03. No Waiver; Remedies. No failure on the part
of any Lender or any Agent to exercise, and no delay in exercising, any
right hereunder or under any Note shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right preclude any other
or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.

                  SECTION 9.04. Costs and Expenses. (a) The Borrowers agree
to pay on demand (i) all reasonable costs and expenses of the Agents in
connection with the preparation, execution, delivery, administration,
modification and amendment of the Loan Documents (including, without
limitation, (A) all due diligence, collateral review, syndication,
transportation, computer, duplication, appraisal, audit, insurance,
consultant, search, filing and recording fees and expenses and (B) the
reasonable fees and expenses of a single counsel for the Agents with
respect thereto, with respect to advising the Agents as to its rights and
responsibilities, or the perfection, protection or preservation of rights
or interests, under the Loan Documents, with respect to negotiations with
any Loan Party or with other creditors of any Loan Party or any of its
Subsidiaries arising out of any Default or any events or circumstances that
may give rise to a Default and with respect to presenting claims in or
otherwise participating in or monitoring any bankruptcy, insolvency or
other similar proceeding involving creditors' rights generally and any
proceeding ancillary thereto) and (ii) all reasonable costs and expenses of
each Agent and each Lender in connection with the enforcement of the Loan
Documents, whether in any action, suit or litigation, or any bankruptcy,
insolvency or other similar proceeding affecting creditors' rights
generally (including, without limitation, the reasonable fees and expenses
of counsel for the Administrative Agent and each Lender with respect
thereto).

                  (b) The Borrowers agree to indemnify and hold harmless
each Agent, each Lender and each of their Affiliates and their respective
officers, directors, employees, agents and advisors (each, an "Indemnified
Party") from and against any and all claims, damages, losses, liabilities
and expenses (including, without limitation, reasonable fees and expenses
of counsel) that may be incurred by or asserted or awarded against any
Indemnified Party, in each case arising out of or in connection with or by
reason of (including, without limitation, in connection with any
investigation, litigation or proceeding or preparation of a defense in
connection therewith) this Agreement, the actual or proposed use of the
proceeds of the Advances, the Loan Documents or any of the transactions
contemplated thereby, including, without limitation, any acquisition or
proposed acquisition by any Borrower or any of its Subsidiaries or
Affiliates, except to the extent such claim, damage, loss, liability or
expense is found in a final, non-appealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified Party's gross
negligence or willful misconduct. In the case of an investigation,
litigation or other proceeding to which the indemnity in this Section
9.04(b) applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by any Loan Party, its
directors, shareholders or creditors or an Indemnified Party or any
Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated by the Loan Documents are consummated. Each of
the Borrowers also agrees not to assert any claim against any Agent, any
Lender or any of their Affiliates, or any of their respective officers,
directors, employees, attorneys and agents, on any theory of liability, for
special, indirect, consequential or

<PAGE>

                                       61

punitive damages arising out of or otherwise relating to the credit
facilities provided hereunder, the actual or proposed use of the proceeds
of the Advances or the Letters of Credit, the Loan Documents or any of the
transactions contemplated by the Loan Documents.

                  (c) If any payment of principal of, or Conversion of, any
Eurodollar Rate Advance or LIBO Rate Advance is made by any Borrower to or
for the account of a Lender other than on the last day of the Interest
Period for such Advance, as a result of a payment or Conversion pursuant to
Section 2.06, 2.09(b)(i) or 2.10(d), acceleration of the maturity of the
Notes pursuant to Section 6.01 or for any other reason, or if any Borrower
fails to make any payment or prepayment of an Advance for which a notice of
prepayment has been given or that is otherwise required to be made, whether
pursuant to Section 2.04, 2.06 or 6.01 or otherwise, the Borrowers agree,
within 10 days after demand by such Lender (with a copy of such demand to
the Administrative Agent), which demand shall include a calculation in
reasonable detail of the amount demanded, to pay to the Administrative
Agent for the account of such Lender any amounts required to compensate
such Lender for any additional losses, costs or expenses that it may
reasonably incur as a result of such payment or Conversion or such failure
to pay or prepay, as the case may be, including, without limitation, any
loss (excluding loss of anticipated profits), cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds
acquired by any Lender to fund or maintain such Advance.

                  (d) Without prejudice to the survival of any other
agreement of any Loan Party hereunder or under any other Loan Document, the
agreements and obligations of the Borrowers contained in Sections 2.10 and
2.12 and this Section 9.04 shall survive the payment in full of principal,
interest and all other amounts payable hereunder and under any of the other
Loan Documents.

                  SECTION 9.05. Right of Set-off. Upon (a) the occurrence
and during the continuance of any Event of Default and (b) the making of
the request or the granting of the consent specified by Section 6.01 to
authorize the Administrative Agent to declare the Notes due and payable
pursuant to the provisions of Section 6.01, each Agent and each Lender and
each of their respective Affiliates is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and
otherwise 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 Agent, such Lender or such Affiliate to or for the credit or
the account of any Borrower against any and all of the obligations of such
Borrower now or hereafter existing under the Loan Documents, irrespective
of whether such Agent or such Lender shall have made any demand under this
Agreement or such Note or Notes and although such obligations may be
unmatured. Each Agent and each Lender agrees promptly to notify each
Borrower after any such set-off and application; provided, however, that
the failure to give such notice shall not affect the validity of such
set-off and application. The rights of each Agent and each Lender and their
respective Affiliates under this Section are in addition to other rights
and remedies (including, without limitation, other rights of set-off) that
such Agent, such Lender and their respective Affiliates may have.

                  SECTION 9.06.  Successors; Participations and Assignments.
(a)  The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns,
except that no Borrower may assign or otherwise transfer any

<PAGE>

                                    62

of its rights or obligations under this Agreement without the prior written
consent of all the Lenders.

                  (b) Any Lender may at any time grant to one or more banks
or other institutions (each a "Participant") participating interests in its
WC Commitment or any or all of its Advances. If a Lender grants any such
participating interest to a Participant, whether or not upon notice to the
Borrowers and the Administrative Agent, such Lender shall remain
responsible for the performance of its obligations hereunder, and the
Borrowers and the Administrative Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement pursuant to which any
Lender may grant such a participating interest shall provide that such
Lender shall retain the sole right and responsibility to enforce the
obligations of the Borrowers hereunder including, without limitation, the
right to approve any amendment, modification or waiver of any provision of
this Agreement; provided that such participation agreement may provide that
such Lender will not agree to any modification, amendment or waiver of this
Agreement described in clauses (i)-(ix) of Section 9.01 without the consent
of the Participant. The Borrower agrees that each Participant shall, to the
extent provided in its participation agreement, be entitled to the benefits
of Section's 2.10, 2.12 and 9.04(c) and with respect to its participating
interest. An assignment or other transfer which is not permitted by Section
9.06(c) or 9.06(d) shall be given effect for purposes of this Agreement
only to the extent of a participating interest granted in accordance with
this subsection.

                  (c) Any Lender may at any time assign to one or more
banks or other institutions (each an "Assignee") all, or a proportionate
part (equivalent to an initial Commitment of not less than $10,000,000) of
all, of its rights and obligations under this Agreement and its Note, and
such Assignee shall assume such rights and obligations, pursuant to an
Assignment and Assumption Agreement substantially in the form of Exhibit C
hereto signed by such Assignee and such transferor Lender, with (and
subject to) the subscribed consent of the Parent and the Administrative
Agent (which shall not be unreasonably withheld or delayed); provided that
(i) if an Assignee is an affiliate of such transferor Lender or was a
Lender immediately before such assignment, no such consent shall be
required, (ii) such assignment may, but need not, include rights of the
transferor Lender in respect of outstanding Competitive Bid Advances, (iii)
no such consent of the Parent shall be required if at the time an Event of
Default exists, (iv) such consent shall be deemed to have been given by the
Parent or the Administrative Agent, as the case may be, if it shall not
have responded to a written request for consent within five Business Days
of its receipt thereof, (v) neither the Parent nor any of its Subsidiaries
or Affiliates may be an Assignee and (vi) such assignment shall be
accompanied by a ratably equivalent assignment of the rights and
obligations of the transferor Lender (and its affiliates) under the
Five-Year Credit Facility. When such instrument has been signed and
delivered by the parties thereto and such Assignee has paid to such
transferor Lender the purchase price agreed between them, such Assignee
shall be a Lender party to this Agreement and shall have all the rights and
obligations of a Lender with a WC Commitment as set forth in such
instrument of assumption, and the transferor Lender shall be released from
its obligations hereunder to a corresponding extent, and no further consent
or action by any party shall be required. Upon the consummation of any
assignment pursuant to this subsection, the transferor Lender, the
Administrative Agent and the Borrowers shall make appropriate arrangements
so that, if required, new Notes are issued to the Assignee. In connection
with any such assignment,

<PAGE>

                                    63

the transferor Lender shall pay to the Administrative Agent an
administrative fee for processing such assignment in the amount of $2,500.
If the Assignee is not incorporated under the laws of the United States or
a State thereof, it shall deliver to the Borrowers and the Administrative
Agent certification as to exemption from deduction or withholding of United
States federal income taxes in accordance with Section 2.12(e).

                  (d) Any Lender may at any time assign all or any portion
of its rights under this Agreement and its Notes to a Federal Reserve Bank.
No such assignment shall release the transferor Lender from its obligations
hereunder.

                  (e) No Assignee, Participant or other transferee of any
Lender's rights shall be entitled to receive any greater payment under
Section 2.10 or 2.12 than such Lender would have been entitled to receive
with respect to the rights transferred, unless such transfer is made with
the Borrower's prior written consent or by reason of the provisions of
Section 2.10 requiring such Lender to designate a different Applicable
Lending Office under certain circumstances or at a time when the
circumstances giving rise to such greater payment did not exist.

                  SECTION 9.07. Designated Lenders. (a) Subject to the
provisions of this subsection (a), any Lender may at any time designate an
Eligible Designee to provide all or a portion of the Committed Advances and
Competitive Bid Advances to be made by such Lender pursuant to this
Agreement; provided that such designation shall not be effective unless the
Parent and the Administrative Agent consent thereto (which consents shall
not be unreasonably withheld). When a Lender and its Eligible Designee
shall have signed an agreement substantially in the form of Exhibit E
hereto (a "Designation Agreement") and the Parent and the Administrative
Agent shall have signed their respective consents thereto, such Eligible
Designee shall become a Designated Lender for purposes of this Agreement.
The Designating Lender shall thereafter have the right to permit such
Designated Lender to provide all or a portion of the Committed Advances and
Competitive Bid Advances to be made by such Designating Lender pursuant to
Section 2.01 or 2.03, and the making of such Advances or portion thereof
shall satisfy the obligation of the Designating Lender to the same extent,
and as if, such Advances or portion thereof were made by the Designating
Lender. As to any Advances or portion thereof made by it, each Designated
Lender shall have all the rights that a Lender making such Advances or
portion thereof would have had under this Agreement and otherwise; provided
that (x) its voting rights under this Agreement shall be exercised solely
by its Designating Lender and (y) its Designating Lender shall remain
solely responsible to the other parties hereto for the performance of such
Designated Lender's obligations under this Agreement, including its
obligations in respect of the Advances or portion thereof made by it. No
additional Note shall be required to evidence the Advances or portion
thereof made by a Designated Lender; and the Designating Lender shall be
deemed to hold its Notes as agent for its Designated Lender to the extent
of the Advances or portion thereof funded by such Designated Lender. Each
Designating Lender shall act as administrative agent for its Designated
Lender and give and receive notices and other communications on its behalf.
Any payments for the account of any Designated Lender shall be paid to its
Designating Lender as administrative agent for such Designated Lender and
neither the Borrower nor the Administrative Agent shall be responsible for
any Designating Lender's application of such payments. In addition, any
Designated Lender may, with notice to (but without the prior written
consent of) the Parent and

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                                    64

the Administrative Agent, (i) assign all or portions of its interest in any
Advances to its Designating Lender or to any financial institutions
consented to by the Parent and the Administrative Agent that provide
liquidity and/or credit facilities to or for the account of such Designated
Lender to support the funding of Advances or portions thereof made by it
and (ii) disclose on a confidential basis any non-public information
relating to its Advances or portions thereof to any rating agency,
commercial paper dealer or provider of any guarantee, surety, credit or
liquidity enhancement to such Designated Lender.

                  (b) Each party to this Agreement agrees that it will not
institute against, or join any other person in instituting against, any
Designated Lender any bankruptcy, insolvency, reorganization or other
similar proceeding under any federal or state bankruptcy or similar law,
for one year and a day after all outstanding senior indebtedness of such
Designated Lender is paid in full. The Designating Lender for each
Designated Lender agrees to indemnify, save, and hold harmless each other
party hereto for any loss, cost, damage and expense arising out of its
inability to institute any such proceeding against such Designated Lender.
This subsection (b) shall survive the termination of this Agreement.

                  SECTION 9.08. Execution in Counterparts. This Agreement
may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute
one and the same agreement. Delivery of an executed counterpart of a
signature page to this Agreement by telecopier shall be effective as
delivery of an original executed counterpart of this Agreement.

                  SECTION 9.09. Confidentiality. Neither any Agent nor any
Lender shall disclose any Confidential Information to any Person without
the consent of the Parent, other than (a) to such Agent's or such Lender's
Affiliates and their officers, directors, employees, agents and advisors
and to actual or prospective Assignees and Participants, and then only on a
confidential basis, (b) as required by any law, rule or regulation or
judicial process, (c) as requested or required by any state, Federal or
foreign authority or examiner regulating such Lender and (d) to any rating
agency when required by it, provided that, prior to any such disclosure,
such rating agency shall undertake to preserve the confidentiality of any
Confidential Information relating to the Loan Parties received by it from
such Lender.

                  SECTION 9.10. Jurisdiction, Etc. (a) Each of the parties
hereto hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and
any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Agreement or any of the other Loan Documents to
which it is a party, 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 any such New York State court or, to the extent permitted
by law, in such Federal court. Each of the parties hereto agrees that a
final judgment in any such action or proceeding shall be conclusive and may
be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement shall affect any right
that any party may otherwise have to bring any action or proceeding
relating to this Agreement or any of the other Loan Documents in the courts
of any jurisdiction.

<PAGE>

                                     65

                  (b) Each of the parties hereto irrevocably and
unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection that it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement or any of the other Loan Documents to which it
is a party in any New York State or Federal court. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law,
the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

                  SECTION 9.11.  Governing Law.  This Agreement and the Notes
shall be governed by, and construed in accordance with, the laws of the State
of New York.

                  SECTION 9.12. Waiver of Jury Trial. Each of the
Borrowers, the Agents and the Lenders irrevocably waives all right to trial
by jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to any of the Loan
Documents, the Advances or the actions of any Agent or any Lender in the
negotiation, administration, performance or enforcement thereof.

                  SECTION 9.13. Nature of Borrowers' Obligations. Any
payment obligation of the Borrowers or the Loan Parties under Section 2.08,
2.10, 2.12 or 9.04 shall be the joint and several obligation of each
Borrower or Loan Party, as the case may be; provided that ACE Guaranty
shall be liable only for its appropriately allocable share of any such
obligation.

<PAGE>

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

                                                   ACE LIMITED

The Common Seal of ACE Limited was
hereunto affixed in the presence of:

/s/ Brian Duperreault
------------------------------------------
Director

/s/ Christopher Z. Marshall
------------------------------------------
Chief Financial Officer

                                                   ACE BERMUDA INSURANCE LTD.

The Common Seal of ACE Bermuda
Insurance Ltd. was hereunto affixed
in the presence of:

/s/ Brian Duperreault
------------------------------------------
Director

/s/ Christopher Z. Marshall
------------------------------------------
Director

                                                   TEMPEST REINSURANCE COMPANY
                                                   LIMITED

The Common Seal of Tempest Reinsurance
Company Limited was hereunto affixed
in the presence of:

/s/ Brian Duperreault
------------------------------------------
Director

/s/ Christopher Z. Marshall
------------------------------------------
Director

<PAGE>

                                    ACE INA HOLDINGS INC.

                                    By:/s/ Christopher Z. Marshall
                                       ----------------------------------------
                                         Title: Director

                                    ACE GUARANTY RE INC.

                                    By:/s/ J.W. Swain
                                       ----------------------------------------
                                         Title: President

                                    MORGAN GUARANTY TRUST
                                    COMPANY OF NEW YORK,
                                      as Administrative Agent and as Lender

                                    By:/s/ Maria H. Dell'Aquila
                                       ----------------------------------------
                                         Title: Vice President

                                    BANK OF AMERICA, N.A.,
                                      as Co-Syndication Agent and as Lender

                                    By:/s/ Debra Basler
                                       ----------------------------------------
                                         Title: Vice President

                                    THE CHASE MANHATTAN BANK,
                                      as Co-Syndication Agent and as Lender

                                    By:/s/ Donald L. Rands
                                       ----------------------------------------
                                         Title: Vice President

<PAGE>

                                     ABN AMRO BANK N.V.

                                     By:/s/ Kevin Hughes
                                        --------------------------------------
                                        Title: Authorized Signatory

                                     By:/s/ Nick Carter
                                        --------------------------------------
                                        Title: Authorized Signatory

                                     THE BANK OF NEW YORK

                                     By:/s/ David Trick
                                        --------------------------------------
                                        Title: Assistant Vice President

                                     BANK ONE, NA

                                     By:/s/ Gretchen Roetzer
                                        --------------------------------------
                                        Title: Commercial Banking Officer

                                     BARCLAYS BANK PLC

                                     By:/s/ Roger Scott
                                        --------------------------------------
                                        Title: Insurance Banking Director

                                     CITIBANK, N.A.

                                     By:/s/ Michael Taylor
                                        --------------------------------------
                                        Title: Vice President

<PAGE>

                                     DEUTSCHE BANK AG NEW YORK
                                     AND/OR CAYMAN ISLANDS
                                     BRANCHES

                                     By:/s/ Clinton M. Johnson
                                        --------------------------------------
                                        Title: Managing Director

                                     By:/s/ Gary Owen
                                        --------------------------------------
                                        Title: Director

                                     FIRST UNION NATIONAL BANK

                                     By:/s/ Daniel J. Norton
                                        --------------------------------------
                                        Title: Vice President

                                     FLEET NATIONAL BANK

                                     By:/s/ Anson Harris
                                        --------------------------------------
                                        Title: Director

                                     MELLON BANK, N.A.

                                     By:/s/ Karen E. McConomy
                                        --------------------------------------
                                        Title: Vice President

                                     ROYAL BANK OF CANADA

                                     By:/s/ Vivian Abdelmessih
                                        --------------------------------------
                                        Title: Senior Manager

<PAGE>

                                     THE BANK OF TOKYO-MITSUBISHI,
                                         LIMITED

                                     By:/s/ John E. Beckwith
                                        --------------------------------------
                                        Title: Attorney-In-Fact

                                     BANQUE NATIONALE DE PARIS

                                     By:/s/ Veronique Marcus
                                        --------------------------------------
                                        Title: Vice President

                                     By:/s/ Laurent Vanderzyppe
                                        --------------------------------------
                                        Title: Vice President

                                     CREDIT LYONNAIS NEW YORK
                                     BRANCH

                                     By:/s/ Peter Rasmussen
                                        --------------------------------------
                                        Title: Vice President

                                     LLOYDS TSB BANK PLC

                                     By:/s/ Windsor R. Davies
                                        --------------------------------------
                                        Title: Director, Corporate Banking USA

                                     By:/s/ David Rodway
                                        --------------------------------------
                                        Title: Assistant Director

                                     STATE STREET BANK AND TRUST
                                     COMPANY

                                     By:/s/ Edward M. Anderson
                                        -------------------------------------
                                        Title: Vice President

<PAGE>

                              PRICING SCHEDULE

                  Each of "Applicable Facility Fee Percentage" and
"Applicable Margin" means, for any day, the rate per annum set forth below
in the row opposite such term and in the column corresponding to the
Pricing Level and Usage that apply on such day:

  Pricing Level         Level I Level II  Level III Level IV  Level V  Level VI
----------------------- ------- --------  --------- --------  -------  --------
Applicable Facility Fee  0.060%   0.070%   0.080%    0.110%    0.135%   0.185%
Percentage
Applicable Margin
Usage < 33%              0.140%   0.230%   0.270%    0.390%    0.615%   0.815%
Usage > 33%              0.190%   0.280%   0.370%    0.515%    0.740%   1.065%
      -

         For purposes of this Schedule, the following terms have the
following meanings, subject to the concluding paragraph of this Schedule:

         "Level I Pricing" applies on any day on which the Borrower's
long-term debt is rated A+ or higher by S&P or A1 or higher by Moody's.

         "Level II Pricing" applies on any day on which (i) the Borrower's
long-term debt is rated A or higher by S&P or A2 or higher by Moody's and
(ii) Level I Pricing does not apply.

         "Level III Pricing" applies on any day on which (i) the Borrower's
long-term debt is rated A- or higher by S&P or A3 or higher by Moody's and
(ii) neither Level I Pricing nor Level II Pricing applies.

         "Level IV Pricing" applies on any day on which (i) the Borrower's
long-term debt is rated BBB+ or higher by S&P and/or Baa1 or higher by
Moody's and (ii) none of Level I Pricing, Level II Pricing and Level III
Pricing applies.

         "Level V Pricing" applies on any day on which (i) the Borrower's
long-term debt is rated BBB or higher by S&P or Baa2 or higher by Moody's
and (ii) none of Level I Pricing, Level II Pricing, Level III Pricing and
Level IV Pricing applies.

         "Level VI Pricing" applies on any day if no other Pricing Level
applies on such day.

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

         "Pricing Level" refers to the determination of which of Level I,
Level II, Level III, Level IV, Level V or Level VI Pricing applies on any
day.

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

<PAGE>

         The "Usage" applicable to any date is the percentage equivalent of
a fraction the numerator of which is the sum of the aggregate outstanding
principal amount of the Advances at such date and the denominator of which
is the aggregate amount of the WC Commitments at such date. If for any
reason any Advances remain outstanding following the termination of the WC
Commitments, Usage will be deemed to be more than 33%.

         The credit ratings to be utilized for purposes of this Schedule
are those assigned to the senior unsecured long-term debt securities of the
Parent without third-party credit enhancement, and any rating assigned to
any other debt security of the Parent shall be disregarded. The ratings in
effect for any day are those in effect at the close of business on such
day.

         In the case of split ratings from S&P and Moody's, the rating to
be used to determine the applicable Pricing Level is the higher of the two
(e.g., A+/A2 results in Level I Pricing); provided that if the split is
more than one full rating category, the intermediate (or higher of the two
intermediate ratings) will be used (e.g. A+/A3 results in Level II Pricing
and AA-/A3 results in Level I Pricing); and provided further that unless
the Parent's credit ratings qualify for at least Level V Pricing, no better
Pricing Level will be applicable.

<PAGE>

                            Commitment Schedule
===========================================================================
Lender                                                    Commitment
===========================================================================
Morgan Guaranty Trust Company of New York                 $57,142,858
Bank of America, N.A.                                     $57,142,856
The Chase Manhattan Bank                                  $57,142,856
ABN AMRO Bank N.V.                                        $45,714,286
The Bank of New York                                      $45,714,286
Bank One, NA                                              $45,714,286
Barclays Bank Plc                                         $45,714,286
Citibank, N.A.                                            $45,714,286
Deutsche Bank AG New York and/or Cayman Islands           $45,714,286
Branches
First Union National Bank                                 $45,714,286
Fleet National Bank                                       $45,714,286
Mellon Bank, N.A.                                         $45,714,286
Royal Bank of Canada                                      $45,714,286
The Bank of Tokyo-Mitsubishi, Limited                     $34,285,714
Banque Nationale de Paris                                 $34,285,714
Credit Lyonnais New York Branch                           $34,285,714
Lloyds TSB Bank Plc                                       $34,285,714
State Street Bank and Trust Company                       $34,285,714

    Total                                                $800,000,000
===========================================================================

<PAGE>

<TABLE>
<CAPTION>

                                                                                                 Exhibit 4.01(b)

                                          ACE Limited Group of Companies
                                                as of March 1, 2000

                                                                                                 Jurisdictions in which
                                                            Jurisdiction of    Percentage        Authorized and Type of
Name                                                        Organization       Ownership         Business
<S>                                                         <C>               <C>                <C>
ACE Limited                                                 Cayman Islands     publicly held     Bermuda, holding company

  ACE Bermuda Insurance Ltd                                 Bermuda            100%              Bermuda, Mexico, insurance
     Paget Reinsurance International Ltd                    Bermuda            100%              Bermuda, reinsurance
     ACE Capital Re International Ltd.                      Bermuda            100%              Bermuda, insurance/reinsurance
       ACE KRE Holdings Limited                             Barbados           100%              Barbados, investment holding
        ACE Capital Re USA Holdings Incorporated            Delaware           100%              Delaware, investment holding
         ACE Capital Re Overseas Ltd.                       Bermuda            100%              Bermuda, insurance/reinsurance
          Lenders Residential Asset Company LLC             Delaware           50%               Del/MD/VA mtg. Originator
          ACE Capital Mortgage Reinsurance                  New York           100%              New York, mtg. guaranty
          Company                                                                                reinsurance
          (EI# 06-1384770, NAIC# 10021, NY)
          ACE Capital Title Reinsurance Company             New York           100%              New York, title guaranty
          (EI# 06-143264, NAIC# 50028, NY)                                                       reinsurance
          ACE Capital Re Inc.                               New York           100%              New York, reinsurance
                                                                                                 intermediary
     Oasis Investments Limited                              Bermuda            67%               Bermuda, Investment Holding
     ACE Capital Re Managers Ltd                            Bermuda            50%               Bermuda, insurance management
     ACE Insurance Management Limited                       Bermuda            100%              Bermuda, general services
     ACE European Markets Reinsurance Limited               Ireland            100%              Ireland, reinsurance
           ACE European Markets Insurance Limited           Ireland            100%              Ireland, insurance
     Corporate Officers & Directors Assurance Ltd.          Bermuda            100%              Bermuda, insurance
           Tripar Partnership                               Bermuda            2%                Bermuda, investment holding
     Oasis Real Estate Company Ltd                          Bermuda            100%              Bermuda, investment holding
           Scarborough Property Holdings Ltd                Bermuda            40%               Bermuda, investment holding
     Sovereign Risk Insurance Limited                       Bermuda            40.5%             Bermuda, insurance agent
     Tripar Partnership                                     Bermuda            98%               Bermuda, investment holding
     ACE Realty Holdings Ltd                                Bermuda            100%              Bermuda, investment holding
     Oasis Personnel Limited                                Cayman Islands     100%              Cayman Islands, general services

<PAGE>

<CAPTION>

                                                                                                 Jurisdictions in which
                                                            Jurisdiction of    Percentage        Authorized and Type of
Name                                                        Organization       Ownership         Business
<S>                                                        <C>                <C>                <C>
       Shipowners Insurance and Guaranty Co. Limited        Bermuda            10% Series A      Bermuda, insurance
                                                                               8% Series B
       Intrepid Re Holdings Limited                         Bermuda            100%              Bermuda, holding
       Intrepid Re Limited                                  Bermuda            100%              Bermuda, Reinsurance
     ACE Global Markets Limited                             United Kingdom     100%              UK, investment holding
       ACE Group Holdings Limited                           United Kingdom     100%              UK, investment holding
             ACE Tarquin (Unlimited)                        United Kingdom     100%              UK, investment holding
               ACE Capital V Limited                        United Kingdom     100%              UK, Lloyd's corporate member
               ACE (CG) Limited                             United Kingdom     100%              UK, investment holding
                 ACE Underwriting Agencies Limited          United Kingdom     100%              UK, Lloyd's managing agent
                   ACE Trustees Limited                     United Kingdom     100%              UK, investment holding
       ACE London Group Limited                             United Kingdom     100%              UK, investment holding
             ACE Capital Limited                            United Kingdom     100%              UK, Lloyd's corporate member
             ACE Capital III Limited                        United Kingdom     100%              UK, Lloyd's corporate member
             ACE Capital IV Limited                         United Kingdom     100%              UK, Lloyd's corporate member
             ACE London Holdings Limited                    United Kingdom     100%              UK, investment holding
             ACE Capital II Limited                         United Kingdom     100%              UK, Lloyd's corporate member
             ACE London Investments Limited                 United Kingdom     100%              UK, investment holding
                 ACE London Aviation Limited                United Kingdom     100%              UK, Lloyd's managing agent
                 ACE London Underwriting Limited            United Kingdom     100%              UK, Lloyd's managing agent
                 ACE Underwriting Services Limited          United Kingdom     100%              UK, Lloyd's service company
                 AGM Underwriting Limited                   United Kingdom     100%              __________________________
             ACE London Services Limited                    United Kingdom     100%              UK, service company
       ACE Capital VI Limited                               United Kingdom     100%              UK, Lloyd's corporate member
       ACE UK Limited                                       United Kingdom     77%               UK, investment holding
             ACE UK Holdings Limited                        United Kingdom     100%              UK, investment holding
                 ACE (M) Limited                            United Kingdom     100%              UK, dormant
                 ACE (ME) Limited                           United Kingdom     100%              UK, dormant
                 ACE (MI) Limited                           United Kingdom     100%              UK, dormant
                 ACE (MS) Limited                           United Kingdom     100%              UK, dormant
                 ACESYS Limited                             United Kingdom     100%              UK, dormant
                 ACE UK Underwriting Limited                United Kingdom     100%              Lloyd's managing agent
                 Underwriting Systems Limited               United Kingdom     100%              UK, dormant
       ACE (PM) Limited                                     United Kingdom     100%              UK, investment holding
           ACE UK Limited                                   United Kingdom     23%               UK, investment holding
     ACE Services Ltd.                                      Cayman Islands     100%              Cayman Islands, general services
     ACE US Holdings, Inc.                                  USA (Delaware)     100%              USA, consulting services
         ACE Strategic Advisors Inc.                        USA (Delaware)     100%              USA, investment holding

<PAGE>

<CAPTION>

                                                                                               Jurisdictions in which
                                                          Jurisdiction of    Percentage        Authorized and Type of
Name                                                      Organization       Ownership         Business
<S>                                                        <C>                <C>              <C>
     ACE USA Inc.                                           USA (Delaware)     100%             USA, investment holding
       CRC Creditor Resources Canada Limited                Canada (British    60%              Canada, warranties business
                                                            Columbia)
        Industrial Excess & Surplus Insurance Brokers       USA (California)   100%             USA, dormant
        Industrial Underwriters Insurance Co.               USA (Texas)        100%             USA, insurance
        (EI# 75-6015738, NAIC#  21075, TX)
        Rhea International Marketing (L), Inc.              Malaysia           60%              Malaysia, general services
        Westchester Fire Insurance Company                  USA (New York)     100%             USA, insurance
        (EI# 13-5481330, NAIC# 21121, NY)
        Westchester Surplus Lines Insurance Co.             USA (Georgia)      100%             USA, insurance
        (EI# 58-2139927, NAIC# 10173, GA)
        Westchester Specialty Services, Inc.                USA (Florida)      100%             USA, warranties
        Westchester Specialty Insurance Services Inc.       USA (Nevada)       100%             USA, insurance services,
                                                                                                brokering, warranties
        SCS Net LLC                                         USA (Delaware)     60%              USA, software development
        Ameriguard Corporation                              USA (Ohio)         80%              USA, insurance services
        WDH Corporation                                     USA (Ohio)         80%              USA, insurance services
        Dimension Services Corporation                      USA (Ohio)         80%              USA, warranties
        Dimension Holdings Inc.                             USA (Ohio)         80%              USA, insurance services
     CGA Group Limited                                      Bermuda            10.71%           Bermuda, investment holding
        CGA Investment Management, Inc.                     USA (Delaware)     100%             USA, investment
        Commercial Guaranty Assurance Ltd.                  Bermuda            100%             Bermuda, insurance
     Oasis Insurance Services Ltd                           Bermuda            100%             Bermuda, general services
     Tempest Reinsurance Company Limited                    Bermuda            100%             Bermuda, Puerto Rico,
                                                                                                reinsurance
         Hamilton Services Limited                          Bermuda            100%             Bermuda, general services
         Oasis Investments Limited                          Bermuda            33%              Bermuda, investment holding
      Oasis US Inc.                                         Delaware           100%             USA, general services
      St. George Holdings Ltd                               Cayman Islands     10.71%           Cayman Islands, investment
                                                                                                holding
          St. George Investments Ltd.                       Cayman Islands     100%             Cayman Islands, investment
                                                                                                holding
       ACE INA Holdings, Inc.                               USA (Delaware)     20%              USA, investment holding
       ACE Prime Holdings, Inc.                             USA (Delaware)     100%             USA, investment holding
           ACE INA Holdings, Inc.                           USA (Delaware)     80%              USA, investment holding
             ACE Seguros S.A. (Argentina)                   Argentina          99.9%            Argentina, Insurance
             INA Corporation                                USA (Pennsylvania) 100%             USA, investment holding
             Tempest Re USA, Inc.                           USA (Connecticut)  100%             Connecticut, underwriting
                                                                                                manager

<PAGE>

<CAPTION>

                                                                                                  Jurisdictions in which
Name                                                          Jurisdiction of    Percentage       Authorized and Type of
                                                              Organization       Ownership        Business
<S>                                                           <C>                 <C>             <C>
            ACE INA Properties Inc.                           USA (Delaware)      100%            USA, holding company
                Conference Facilities, Inc.                   USA (Pennsylvania)  100%            USA, owns & operates corporate
                                                                                                  facilities
            INA Tax Benefits Reporting, Inc.                  USA (Delaware)      100%            USA, tax info & 3d party
                                                                                                  reporting
            INA Financial Corporation                         USA (Delaware)      100%            USA, investment holding
                Brandywine Holdings Corporation               USA (Delaware)      100%            USA, holding company
                  Brandywine Run-Off Services, Inc.           USA (Delaware)      100%            USA, management company for
                                                                                                  1792 company
                  ASSUREX Development Corporation             USA (Ohio)          11.011%         USA, provides loans to insurance
                                                                                                  agents
                  International Surplus Adjusting             USA (California)    100%            USA, claims adjusting services
                  Services
                  Western Agency Management, Inc.             USA (California)    100%            USA, fire & casualty agent
                  Cravens, Dargan & Company Pacific           USA (Delaware)      100%            USA, managing general agency
                  Coast
                  Cravens, Dargan & Company Pacific           USA (Illinois)      100%            USA, managing general agency
                  Coast of Illinois
            Century Indemnity Company                         USA (Pennsylvania)  100%            USA, insurance
            (EI# 05-6105395, NAIC #20710, PA)
            Century Reinsurance Company                       USA (Pennsylvania)  100%            USA, reinsurance
            (EI# 06-0988117, NAIC #35130, PA)
            ACE American Reinsurance Company                  USA (Pennsylvania)  100%            USA, reinsurance
            (EI# 23-1740414, NAIC# 22705, PA)
                   Brandywine Reinsurance Company             Belgium             100%            Belgium, reinsurance
                   S.A.-N.V.
                   The 1792 Company                           USA (Delaware)      100%            USA, (former underwriting
                                                                                                  member of New York Insurance
                                                                                                  Exchange)
                   Century International Reinsurance          Bermuda             100%            Bermuda, insurance &
                   Company  Ltd.                                                                  reinsurance
                          Brandywine International Brokers    Bermuda             100%            Bermuda, insurance broker
                          Ltd.
            INA Holdings Corporation                          USA (Delaware)      100%            USA, holding company
                   PDCN Legal Management Company, Inc.        USA (Delaware)      100%            USA, in-house law firm
                                                                                                  Administrator
                   INA Reinsurance Company, Ltd.              Bermuda             100%            Bermuda, reinsurance

<PAGE>

<CAPTION>

                                                                                                  Jurisdictions in which
                                                              Jurisdiction of     Percentage      Authorized and Type of
Name                                                          Organization        Ownership       Business
<S>                                                           <C>                 <C>             <C>
            ACE INA Financial Institution Solutions,          USA (Delaware)      100%            USA, flood plain determination
            Inc.                                                                                  & other services to financial
                                                                                                  institutions
            ESIS, Inc.                                        USA (California)    100%            USA, markets risk management
                                                                                                  programs
            ACE INA Excess and Surplus Insurance              USA (Georgia)       100%            USA, excess & surplus lines
            Services, Inc. (GA)                                                                   broker
            ACE INA Excess and Surplus Insurance              USA (Pennsylvania)  100%            USA, excess & surplus lines
            Services, Inc. (PA)                                                                   broker
            NewMarkets Insurance Agency, Inc.                 USA (Delaware)      100%            USA, managing general agency
            ACE INA Excess and Surplus Insurance              USA (California)    100%            USA, excess & surplus lines
            Services, Inc. (CA)                                                                   broker
            ACE INA Excess and Surplus Insurance              USA (Illinois)      100%            USA, excess & surplus lines
            Services, Inc. (IL)                                                                   broker
            Excess and Surplus Insurance Services, Inc.       USA (Texas)         100%            USA, managing general agency
            INAC Corp.                                        USA (Delaware)      100%            USA, premium finance company
            INAC Corp. of California                          USA (California)    100%            USA, premium finance company
            Global Surety Network, Inc.                       USA (Delaware)      100%            USA, management company &
                                                                                                  underwriting services
            Marketdyne International, Inc.                    USA (Delaware)      100%            USA, marketing insurance
                                                                                                  products
            ACE INA Railroad Insurance Brokers, Inc.          USA (California)    100%            USA, reinsurance
            Recovery Services International, Inc.             USA (Delaware)      100%            USA, subrogation, collection &
                                                                                                  recovery services
                   RSI Health Care Recovery Inc.              USA (Delaware)      100%            USA, subrogation, collection &
                                                                                                  recovery services

<PAGE>

<CAPTION>

                                                                                                  Jurisdictions in which
                                                          Jurisdiction of        Percentage       Authorized and Type of
Name                                                      Organization           Ownership        Business
<S>                                                       <C>                     <C>             <C>
            Indemnity Insurance Company of North          USA (Pennsylvania)      100%            USA, Puerto Rico, USVI,
            America                                                                               insurance
            (EI# 06-1016108, NAIC# 43575, PA)
                   ACE Indemnity Insurance Company        USA (Pennsylvania)      100%            USA, insurance
                   (EI# 92-0040526, NAIC #10030, PA)
                   Allied Insurance Company               USA (California)        100%            USA, insurance
                   (EI# 23-2021364, NAIC #36528,
                   CA)
            ACE American Insurance Company                USA (Pennsylvania)      100%            USA, Korea, Puerto Rico, USVI,
            (EI# 95-2371728, NAIC# 22667, PA)                                                     Guam, insurance
                   Pacific Employers Insurance            USA (Pennsylvania)      100%            USA, USVI, insurance
                   Company
                   (EI# 95-1077060, NAIC# 22748, PA)
                       ACE Insurance Company of           USA (Texas)             100%            USA, insurance
                       Texas
                       (EI# 74-1480965, NAIC #22721,
                       22920, TX)
                       Illinois Union Insurance           USA (Illinois)          100%            USA, surplus lines insurer
                       Company
                       (EI#36-2759195, NAIC #27960,
                       IL)
            INAMAR Insurance Underwriting Agency,         USA (New Jersey)        100%            USA, insurance agency
            Inc.
                   INAMAR Insurance Underwriting          USA (Massachusetts)     100%            USA, general agency
                   Agency of Massachusetts
                   INAMAR Insurance Underwriting          USA (Texas)             100%            USA, general agency
                   Agency of Texas
                   INAMAR Insurance Underwriting          USA (Ohio)              100%            USA, general agency
                   Agency, Inc. of Ohio
            Insurance Company of North America            USA (Pennsylvania)      100%            USA, Guam, Northern Mariana
            (EI# 23-0723970, NAIC #22713, PA)                                                     Islands, Philippines, Puerto Rico,
                                                                                                  Taiwan, insurance
             Bankers Standard Insurance Company           USA (Pennsylvania)      100%            USA, insurance
             (EI# 75-1320184, NAIC #18279, PA)
                    Bankers Standard Fire and Marine      USA (Pennsylvania)      100%            USA, insurance
                    Company
                    (EI# 75-6014863, NAIC #20591, PA)
             ACE Property and Casualty Insurance          USA (Connecticut)       100%            USA, Puerto Rico, insurance
             Company

<PAGE>

<CAPTION>

                                                                                                  Jurisdictions in which
                                                              Jurisdiction of     Percentage      Authorized and Type of
 Name                                                         Organization        Ownership       Business
<S>                                                           <C>                 <C>             <C>
       (EI# 060237820, NAIC #20699, CT)
            ACE Employers Insurance Company                   USA (Pennsylvania)  100%            USA, insurance
            (EI# 23-2137343, NAIC #38741, PA)
            ACE Insurance Company of Ohio                     USA (Ohio)          100%            USA, insurance
            (EI# 23-1859893, NAIC #22764,
            OH)
            INA Surplus Insurance Company                     USA (Pennsylvania)  100%            USA, reinsurance
            (EI# 52-1208598, NAIC #42072, PA)
            ACE Fire Underwriters Insurance                   USA (Pennsylvania)  100%            USA, insurance
            Company
            (EI# 06-6032187, NAIC #20702, PA)
            Atlantic Employers Insurance                      USA (New Jersey)    100%            USA, insurance
            Company
            (EI# 23-2173820, NAIC #38938, NJ)
            Cover-All Technologies, Inc.                      USA (Delaware)      7.41%           USA, develop software products
                                                                                                  for insurance industry
        ALIC, Incorporated                                    USA (Texas)         100%            USA, general agency & attorney-
                                                                                                  in-fact for CIGNA Lloyds
            ACE American Lloyds Insurance                     USA (Texas)         100%            USA, Lloyds Association
            Company (Sponsored Lloyds
            Association)
            (EI# 75-1365570, NAIC #18511, TX)
        ACE Insurance Company of Illinois                     USA (Illinois)      100%            USA, insurance
        (EI# 36-2709121, NAIC #22691, IL)

<PAGE>

<CAPTION>

                                                                                                  Jurisdictions in which
                                                              Jurisdiction of    Percentage       Authorized and Type of
Name                                                          Organization       Ownership        Business
<S>                                                           <C>                 <C>             <C>
            ACE Insurance Company of the                      USA (Indiana)       100%            USA, insurance
            Midwest
            (EI# 06-0884361, NAIC #26417, IN)
         INAPRO, Inc.                                         USA (Delaware)      100%            USA, insurance management
                                                                                                  services & underwriting
            Reinsurance Solutions International,              USA (Delaware)       50%            USA, reinsurance intermediary
            LLC
         American Adjustment Company, Inc.                    USA (Delaware)      100%            USA, run-off of automobile
                                                                                                  guaranty loans
            American Lenders Facilities, Inc.                 USA (California)    100%            USA, collection & loan servicing
                                                                                                  for third parties
         ACE INA International Holdings, Ltd.                 USA (Delaware)      100%            USA, international insurance &
                                                                                                  financial holding company
                ACE Synergy Insurance Berhad                  Malaysia            51%             Malaysia, insurance
                ACE Seguradora S.A.                           Macau               100%            Macau, insurance
                Chilena Consolidata Seguros                   Chile               .65%            Chile, insurance
                Generales, S.A.
                INACAN Holdings, Ltd.                         Canada              100%            Canada, insurance holding
                    ACE INA Insurance (Canada)                Canada              100%            Canada, insurance & reinsurance
                ACE Insurance Limited (S. Africa)             South Africa        100%            South Africa, insurance
                Seguros CIGNA, S.A.                           Mexico              99.9%           Mexico, insurance
                ACE Insurance Limited (New                    New Zealand         100%            New Zealand, insurance &
                Zealand)                                                                          reinsurance
                Cover Direct, Inc.                            USA (Delaware)      100%            Japan, direct marketing service
                                                                                                  company
                Victoria Hall Company Ltd.                    Bermuda              20%            Bermuda, investment holding
             ACE INA G.B. Holdings, Ltd.                      USA (Delaware)      100%            Delaware, UK, insurance holding
                Brandywine Reinsurance Co. (UK)               United Kingdom      100%            UK, reinsurance
                Ltd
                ACE INA Services U. K. Limited                United Kingdom      100%            UK, computer services for
                                                                                                  affiliates
                ACE INA UK Retirement Savings                 United Kingdom      100%            UK, investment holding
                Plan
                Insurance Company of North                    United Kingdom      100%            UK, Greece, insurance
                America (U.K.) Ltd
             INACAP Sociedad Anonima                          Nicaragua           100%            Nicaragua, corporation
                INACAP Reaseguros, Sociedad                   Nicaragua           100%            Nicaragua, corporation
                Anonima

<PAGE>

<CAPTION>

                                                                                                  Jurisdictions in which
                                                              Jurisdiction of     Percentage      Authorized and Type of
Name                                                          Organization        Ownership       Business
<S>                                                           <C>                 <C>             <C>
           Century Inversiones, S.A.                          Panama              100%            Panama, reinsurance
                                                                                                  administrator
                  ACE INA de Venezuela                        Venezuela           100%            Venezuela, reinsurance
                  Intermediaros de Reaseguros S A                                                 intermediary
           ARABIA ACE Insurance Co. Limited E C               Bahrain             25%             Saudi Arabia, insurance
                                                                                                  &reinsurance
           ACE Insurance Limited (Australia)                  Australia           100%            Australia, Pakistan, Thailand,
                                                                                                  Solomon Islands, Vanuatu,
                                                                                                  insurance & reinsurance
                  ACE Insurance Limited (Singapore)           Singapore           100%            Singapore, insurance
                  ACE INA Superannuation Pty.                 Australia           100%            Australia, corporate trustee for
                  Limited                                                                         CIGNA Australia superannuation
                                                                                                  plan
           ACE Seguros  S.A. (Chile)                          Chile               99.13%          Chile, insurance
           ACE INA Overseas Insurance Co Ltd                  Bermuda             100%            Bermuda, insurance &
                                                                                                  reinsurance
                  ACE Insurance (Japan)                       Japan               100%            Japan, insurance & reinsurance
                  ACE INA Marketing Group C.A.                Venezuela           100%            Venezuela, services & direct
                                                                                                  marketing
                  ACE INA Overseas Holdings Inc.              USA (Delaware)      100%            Delaware, holding company
                      ACE Insurance S.A.-N.V.                 Belgium             100%            Europe, insurance
           ACE Insurance Company  (Puerto Rico)               Puerto Rico         100%            Puerto Rico, insurance
           (EI# 66-0437305, NAIC #30953, PR)
           ACE Insurance Limited (Hong Kong)                  Hong Kong           100%            Hong Kong, insurance
           ACE INA Bermuda Ins Managers Ltd.                  Bermuda             100%            Bermuda, management services
                                                                                                  for non-affiliates
           DELPANAMA S.A.                                     Panama              100%            Panama, holding company
           INAMEX S.A.                                        Mexico              100%            Mexico, reinsurance broker
           Maritime General Ins Company Ltd.                  Trinidad            8.06%           Trinidad, insurance
           AFIA Finance Corporation                           USA (Delaware)      100%            Delaware, insurance holding
                  AFIA Sociedad Anonima                       Mexico              100%            Mexico, service company

<PAGE>

<CAPTION>

                                                                                                  Jurisdictions in which
                                                              Jurisdiction of    Percentage       Authorized and Type of
Name                                                          Organization       Ownership        Business
<S>                                                           <C>                <C>              <C>
           AFIA Venezolana C.A.                               Venezuela          100%             Venezuela, inactive claims &
                                                                                                  settling agent
           ACE ICNA - Italy Societa a                         Italy              100%             Italy, legal representative for
           Responsabilita Limitata                                                                CIGNA
                                                                                                  Insurance Company of Europe,
                                                                                                  S.A.-N.V.
           ACE INA Thai Company Limited                       Thailand           55%              Thailand, broker, surveyor &
                                                                                                  claims settling agency
           ACE Servicios,  S.A. (Argentina)                   Argentina          100%             Argentina, insurance holding
           ESIS International Asesorias                       Chile              100%             Chile, claims & settling agent
           Limitada
           Fire, Equity & General Ins Co. Ltd.                Nigeria            6.25%            Nigeria, insurance
           INDI Servicios C. Ltda.                            Ecuador            100%             Ecuador, claims & settling agent
           Inversiones Continental S.A. de C.V.               Honduras           1.29%            Honduras, insurance holding
           P.T. ACE INA Insurance (Indonesia)                 Indonesia          53.51%           Indonesia, insurance
           RIYAD Insurance Co. Ltd.                           Bermuda            80%              Bermuda, insurance
           Safire Private Ltd.                                Singapore          100%             Singapore, management &
                                                                                                  computer service bureau
       AFIA (INA) Corporation Limited                         USA (Delaware)     100%             Delaware, holding company
           AFIA                                               Unincorporated     60%              Association for international
                                                              association                         insurance
       AFIA (ACE) Corporation Limited                         USA (Delaware)     100%             Delaware, holding company
           AFIA                                               Unincorporated     40%              Association for international
                                                              association                         insurance
       Compania Anonima de Seguros "Avila"                    Venezuela          5.6%             Venezuela, insurance
       ACE Seguros S.A. (Colombia)                            Colombia           85.763%          Colombia, insurance
       INAVEN, C.A.  "Venezuela"                              Venezuela          100%             Venezuela, corporation
       La Positiva Co Nacional de Seguros                     Peru               10.79%           Peru, insurance
       Sociedad Anonima
       Seguros Azteca, S.A.                                   Mexico             1.36%            Mexico, insurance & reinsurance
       Seguros Comercial America, S.A. de C.V.                Mexico             .031%            Mexico, insurance
       Reaseguradora Nuevo Mundo S A                          Panama             3.7246%          Panama, reinsurance
       Amazonas Co Anonima de Seguros                         Ecuador            1.423%           Ecuador, insurance

<PAGE>

<CAPTION>

                                                                                                  Jurisdictions in which
                                                              Jurisdiction of    Percentage       Authorized and Type of
Name                                                          Organization       Ownership        Business
<S>                                                           <C>                <C>              <C>
     ACE (Barbados) Holdings Limited                          Barbados           100%             Barbados, holding company

       ACE Financial Services, Inc.                           Delaware           100%             Delaware, insurance holding co
         Capital Re Financial Products Corporation            Delaware           100%             Del, financial products
         Capital RE LLC                                       Turks & Caicos     100%             Turks & Caicos, holding co
         Capital RE (UK) Holdings/ACE (CR) Holdings           United Kingdom     100%             UK & holding co
           CRC Capital, Ltd./ACE Capital VII Limited          United Kingdom     100%             UK, Lloyd's capital vehicle
           RGB Holdings, Ltd./ACE Holdings Limited            United Kingdom     100%             UK, holding company
           C.I. de Rougemont & Co. Ltd./ACE (CIDR)            United Kingdom     100%             UK, Lloyd's agency
           Limited
           RGB Underwriting Services, Ltd./ACE Agencies       United Kingdom     100%             UK, Lloyd's agency
           Limited
           RGB Underwriting Agencies, Ltd./Global Life        United Kingdom     100%             UK, Lloyd's agency
           Services Limited
             ACE Guaranty Re Inc.                             Maryland           100%             USA, Reinsurer
             (EI# 52-1533088, NAIC # 30180, MD)

                 ACE Risk Assurance Company                   Maryland           100%             Maryland, reinsurance
                 (EI# 13-4027591, NAIC # 10943, MD)
             ACE Financial Solutions, Inc.                    Delaware           100%             Delaware, corporation

</TABLE>

<PAGE>

                                                              Schedule 5.02(a)

1.       Liens securing letters of credit issued by Citibank for the
         account of Cigna Europe in an aggregate stated amount not
         exceeding $16,000,000 (subject to currency fluctuations).

2.       Liens securing letters of credit issued by Citibank for the account
         of INA(UK) in an aggregate stated amount not exceeding $8,000,000.

3.       $70,000,000 of Cigna Overseas Insurance Company investments are
         pledged to Domestic Pool companies under a Regulation 114 trust.

4.       Lien arising under a Subordination Agreement dated as of October
         27, 1998 among ACE US Holdings, Inc., ACE Limited and The Chase
         Manhattan Bank encumbering ACE US Holdings, Inc.'s rights under
         the Subordinated Loan Agreement dated as of October 27, 1998 among
         ACE US Holdings, Inc., ACE Bermuda Insurance Ltd. and United
         States Trust Company of New York, as trustee under the Indenture
         dated October 27, 1998 of ACE US Holdings, Inc.

5.       Liens securing Letter of Credit Facility Agreements dated
         November 24, 1998 among ACE Limited, ACE Bermuda Insurance, Ltd.,
         certain other financial institutions and Citibank International plc,
         as Agent and Security Trustee.

<PAGE>
                                                                   EXHIBIT A-1

                                                                       FORM OF
                                                                COMMITTED NOTE

$______________                                  Dated: _____________ __, 2000

         FOR VALUE RECEIVED, the undersigned, __________________, a
__________ corporation (the "Obligor"), HEREBY PROMISES TO PAY to the order
of ________________ (the "Lender") for the account of its Applicable
Lending Office (as defined in the Credit Agreement referred to below) the
aggregate principal amount of the Committed Advances (as defined below)
owing to the Lender by the Obligor pursuant to the Amended and Restated
364-Day Credit Agreement dated as of May 8, 2000 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the "Credit
Agreement"; terms defined therein, unless otherwise defined herein, being
used herein as therein defined) among ACE Limited, ACE Bermuda Insurance
Ltd., Tempest Reinsurance Company Limited, ACE INA Holdings Inc. and ACE
Guaranty Re Inc., as Borrowers, the Initial Lenders, Bank of America, N.A.
and The Chase Manhattan Bank, as Co-Syndication Agents, and Morgan Guaranty
Trust Company of New York, as Administrative Agent, payable at such times
as are specified in the Credit Agreement.

         The Obligor promises to pay interest on the unpaid principal
amount of each Committed Advance from the date of such Committed Advance
until such principal amount is paid in full, at such interest rates, and
payable at such times, as are specified in the Credit Agreement.

         Both principal and interest are payable in lawful money of the
United States of America to Morgan Guaranty Trust Company of New York, as
Administrative Agent, at such location as shall be designated by the
Administrative Agent in a written notice to the Obligor in same day funds.
Each Committed Advance owing to the Lender by the Obligor and the maturity
thereof, and all payments made on account of principal thereof, shall be
recorded by the Lender and, prior to any transfer hereof, endorsed on the
grid attached hereto, which is part of this Promissory Note; provided,
however, that the failure of the Lender to make any such recordation or
endorsement shall not affect the obligations of the Obligor under this
Promissory Note.

         This Promissory Note is one of the Notes referred to in, and is
entitled to the benefits of, the Credit Agreement. The Credit Agreement,
among other things, (i) provides for the making of advances (the "Committed
Advances") by the Lender to the Obligor from time to time in an aggregate
amount not to exceed

<PAGE>

at any time outstanding the U.S. dollar amount first above mentioned, the
indebtedness of the Obligor resulting from each such Committed Advance
being evidenced by this Promissory Note, and (ii) contains provisions for
acceleration of the maturity hereof upon the happening of certain stated
events and also for prepayments on account of principal hereof prior to the
maturity hereof upon the terms and conditions therein specified. The
obligations of the Obligor under this Promissory Note and the other Loan
Documents, and the obligations of the other Loan Parties under the Loan
Documents, are unconditionally guaranteed by the Guarantors referred to in
the Credit Agreement.

         The Obligor hereby waives presentment, demand, protest and notice
of any kind. No failure to exercise, and no delay in exercising, any rights
hereunder on the part of the holder hereof shall operate as a waiver of
such rights.

         This Promissory Note shall be governed by, and construed in
accordance with, the laws of the State of New York.

                                [NAME OF OBLIGOR]

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

                                  A-1-2

<PAGE>

                     ADVANCES AND PAYMENTS OF PRINCIPAL

                                    Amount of           Unpaid
                  Amount of      Principal Paid or     Principal       Notation
      Date         Advance           Prepaid            Balance         Made By
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                                    A-1-3

<PAGE>

                                                                   EXHIBIT A-2

                                                  FORM OF COMPETITIVE BID NOTE

$______________                                  Dated: _____________ __, ____

         FOR VALUE RECEIVED, the undersigned, __________________, a
__________ corporation (the "Obligor"), HEREBY PROMISES TO PAY
_____________ (the "Lender") for the account of its Applicable Lending
Office (as defined in the Credit Agreement referred to below) the aggregate
principal amount of the Competitive Bid Advances (as defined below) owing
to the Lender by the Obligor pursuant to the Amended and Restated 364-Day
Credit Agreement dated as of May 8, 2000 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "Credit
Agreement"; terms defined therein, unless otherwise defined herein, being
used herein as therein defined) among ACE Limited, ACE Bermuda Insurance
Ltd., Tempest Reinsurance Company Limited, ACE INA Holdings Inc. and ACE
Guaranty Re Inc., the Initial Lenders, Bank of America, N.A. and The Chase
Manhattan Bank as Co-Syndication Agents, and Morgan Guaranty Trust Company
of New York, as Administrative Agent, payable at such times as are
specified in the Credit Agreement.

         The Obligor promises to pay interest on the unpaid principal
amount of each Competitive Bid Advance from the date of such Competitive
Bid Advance until such principal amount is paid in full, at such interest
rates, and payable at such times, as are specified in the Credit Agreement.

         Both principal and interest are payable in lawful money of the
United States of America to Morgan Guaranty Trust Company of New York, as
Administrative Agent, at such location as shall be designated by the
Administrative Agent in a written notice to the Obligor in same day funds.
Each Competitive Bid Advance owing to the Lender by the Obligor and the
maturity thereof, and all payments made on account of principal thereof,
shall be recorded by the Lender and, prior to any transfer hereof, endorsed
on the grid attached hereto, which is part of this Promissory Note;
provided, however, that the failure of the Lender to make any such
recordation or endorsement shall not affect the obligations of the Obligor
under this Promissory Note.

         This Promissory Note is one of the Competitive Bid Notes referred
to in, and is entitled to the benefits of, the Credit Agreement. The Credit
Agreement, among other things, (i) provides for the making of advances (the
"Competitive Bid Advances") by the Lender to the Obligor in an amount not
to exceed the U.S. dollar amount first above mentioned, the indebtedness of
the Obligor resulting

                               A-2-1

<PAGE>

from such Competitive Bid Advances being evidenced by this Promissory Note,
and (ii) contains provisions for acceleration of the maturity hereof upon
the happening of certain stated events and also for prepayments on account
of principal hereof prior to the maturity hereof upon the terms and
conditions therein specified. The obligations of the Obligor under this
Promissory Note and the other Loan Documents, are unconditionally
guaranteed by the Guarantors referred to in the Credit Agreement.

         The Obligor hereby waives presentment, demand, protest and notice
of any kind. No failure to exercise, and no delay in exercising, any rights
hereunder on the part of the holder hereof shall operate as a waiver of
such rights.

         This Promissory Note shall be governed by, and construed in
accordance with, the laws of the State of New York.

                           [NAME OF OBLIGOR]

                           By------------------------------------------------

                              Title:

                                 A-2-2

<PAGE>

                     ADVANCES AND PAYMENTS OF PRINCIPAL

                                    Amount of           Unpaid
                  Amount of      Principal Paid or     Principal       Notation
      Date         Advance           Prepaid            Balance         Made By
--------------------------------------------------------------------------------

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                                     A-2-3

<PAGE>

                                                                   EXHIBIT B-1

                                                                       FORM OF
                                                 NOTICE OF COMMITTED BORROWING

Morgan Guaranty Trust Company of New York,
   as Administrative Agent
   under the Credit Agreement
   referred to below
60 Wall Street
New York, New York 10260

                                                              [Date]

                  Attention: [ Bill Wood]

Ladies and Gentlemen:

         The undersigned, [Name of Borrower], refers to the Amended and
Restated 364-Day Credit Agreement dated as of May 8, 2000 (as amended,
amended and restated, supplemented or otherwise modified from time to time,
the "Credit Agreement"; the terms defined therein being used herein as
therein defined), among ACE Limited, ACE Bermuda Insurance Ltd., Tempest
Reinsurance Company Limited, ACE INA Holdings Inc. and ACE Guaranty Re
Inc., the Initial Lenders, Bank of America, N.A. and The Chase Manhattan
Bank, as Co-Syndication Agents, and Morgan Guaranty Trust Company of New
York, as Administrative Agent, and hereby gives you notice, irrevocably,
pursuant to Section 2.02 of the Credit Agreement that the undersigned
hereby requests a Borrowing under the Credit Agreement, and in that
connection sets forth below the information relating to such Borrowing (the
"Proposed Borrowing") as required by Section 2.02(a) of the Credit
Agreement:

         (i)      The Business Day of the Proposed Borrowing is ______ __, ____.

         (ii)     The Proposed Borrowing is to be comprised of [Base Rate
                  Advances] [Eurodollar Rate Advances].

         (iii)    The aggregate amount of the Proposed Borrowing is $________.

         [(iv)    The initial Interest Period for each Eurodollar Rate
                  Advance made as part of the Proposed Borrowing is _______
                  week[s]/month[s].]

                                   B-1-1

<PAGE>

         The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the Proposed
Borrowing:

         (A)      The representations and warranties contained in each Loan
                  Document are correct in all material respects on and as of
                  the date of the Proposed Borrowing, before and after giving
                  effect to the Proposed Borrowing and to the application of
                  the proceeds therefrom, as though made on and as of such date,
                  other than any such representations or warranties that, by
                  their terms, refer to a specific date other than the date of
                  the Proposed Borrowing, in which case, as of such specific
                  date.

         (B)      No Default has occurred and is continuing, or would
                  result from such Proposed Borrowing or from the
                  application of the proceeds therefrom.

         Delivery of an executed counterpart of this Notice of Borrowing by
telecopier shall be effective as of an original executed counterpart of
this Notice of Borrowing.

                                 Very truly yours,

                                 [NAME OF BORROWER]

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

                                   B-1-2

<PAGE>

                                                                  EXHIBIT B-2

                                                               FORM OF NOTICE
                                                               OF COMPETITIVE
                                                                BID BORROWING

Morgan Guaranty Trust Company of New York,
   as Administrative Agent
   under the Credit Agreement
   referred to below
60 Wall Street
New York, New York 10260

                                                              [Date]

                  Attention: [Bill Wood]

Ladies and Gentlemen:

         The undersigned, [Name of Borrower], refers to the Amended and
Restated 364-Day Credit Agreement dated as of May 8, 2000 (as amended,
amended and restated, supplemented or otherwise modified from time to time,
the "Credit Agreement"; the terms defined therein being used herein as
therein defined), among ACE Limited, ACE Bermuda Insurance Ltd., Tempest
Reinsurance Company Limited, ACE INA Holdings Inc. and ACE Guaranty Re
Inc., the Initial Lenders, Bank of America, N.A. and The Chase Manhattan
Bank, as Co-Syndication Agents, and Morgan Guaranty Trust Company of New
York, as Administrative Agent, and hereby gives you notice, irrevocably,
pursuant to Section 2.03 of the Credit Agreement that the undersigned
hereby requests a Borrowing under the Credit Agreement, and in that
connection sets forth below the information relating to such Borrowing (the
"Proposed Competitive Bid Borrowing") as required by Section 2.03(a) of the
Credit Agreement:

(A)   Date of the Proposed
      Competitive Bid Borrowing                    ___________________

(B)   Amount of the Proposed
      Competitive Bid Borrowing                    ___________________

(C)   Type of Advances comprising the              ___________________
      Proposed Competitive Bid
      Borrowing [Fixed Rate Advances]
      [LIBO Rate Advances]

<PAGE>

(D)   [LIBO Interest Period for the LIBO Rate
      Advances] [Maturity Date for Fixed
      Rate Advances] made as part of the
      Proposed Competitive Bid Borrowing           ___________________

(E)   Interest Payment Date(s) of Proposed
      Competitive Bid Borrowing                    ___________________

         The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the proposed
Competitive Bid Borrowing:

         (A) The representations and warranties contained in each Loan
Document are correct in all material respects on and as of the date of the
Proposed Competitive Bid Borrowing before and after giving effect to the
Proposed Competitive Bid Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date, other than any such
representations or warranties that, by their terms, refer to a specific
date other than the date of the Proposed Competitive Bid Borrowing, in
which case, as of such specific date.

         (B) No Default has occurred and is continuing, or would result
from such Proposed Competitive Bid Borrowing or from the application of the
proceeds therefrom.

         Delivery of an executed counterpart of this Notice of Competitive
Bid Borrowing by telecopier shall be effective as delivery of an original
executed counterpart of this Notice of Competitive Bid Borrowing.

                                          Very truly yours,

                                          [NAME OF BORROWER]

                                          By ____________________________
                                             Title

                               B-2-2

<PAGE>

                                                                      EXHIBIT C

                    ASSIGNMENT AND ASSUMPTION AGREEMENT

         AGREEMENT dated as of _________, 20__ among [ASSIGNOR] (the
"Assignor"), [ASSIGNEE] (the "Assignee"), ACE LIMITED (the "Parent") and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "Agent").

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

         WHEREAS, this Assignment and Assumption Agreement (the
"Agreement") relates to the Amended and Restated 364-Day Credit Agreement
dated as of May 8, 2000 among the Parent and other Borrowers party thereto,
the Assignor and the other Lenders party thereto, as Lenders, the
Co-Syndication Agents and the Agent (the "Credit Agreement");

         WHEREAS, as provided under the Credit Agreement, the Assignor has
a WC Commitment to make Committed Advances and Competitive Bid Advances to
the Borrowers in an aggregate principal amount at any time outstanding not
to exceed $___,000,000;

         WHEREAS, Committed Advances and Competitive Bid Advances made to
the Borrowers by the Assignor under the Credit Agreement in the aggregate
principal amount of $__________ are outstanding at the date hereof; and

         WHEREAS, the Assignor proposes to assign to the Assignee all of
the rights of the Assignor under the Credit Agreement and the other Loan
Documents in respect of a portion of its WC Commitment thereunder in an
amount equal to $__________ (the "Assigned Amount"), together with a
corresponding portion of its outstanding Committed Advances and Competitive
Bid Advances, and the Assignee proposes to accept assignment of such rights
and assume the corresponding obligations from the Assignor on such terms;

         NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:

         SECTION 1.  Definitions.  All capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Credit Agreement.

         SECTION 2.  Assignment.  The Assignor hereby assigns and sells to the
Assignee all of the rights of the Assignor under the Credit Agreement and the
other Loan Documents to the extent of the Assigned Amount, and the Assignee

                                  C-1

<PAGE>

hereby accepts such assignment from the Assignor and assumes all of the
obligations of the Assignor under the Credit Agreement to the extent of the
Assigned Amount, including the purchase from the Assignor of the
corresponding portion of the principal amount of the Committed Advances and
Competitive Bid Advances made by the Assignor outstanding at the date
hereof. Upon the execution and delivery hereof by the Assignor, the
Assignee, the Parent and the Agent and the payment of the amounts specified
in Section 3 required to be paid on the date hereof (i) the Assignee shall,
as of the date hereof, succeed to the rights and be obligated to perform
the obligations of a Lender under the Credit Agreement with a WC Commitment
in an amount equal to the Assigned Amount, and (ii) the WC Commitment of
the Assignor shall, as of the date hereof, be reduced by a like amount and
the Assignor released from its obligations under the Credit Agreement to
the extent such obligations have been assumed by the Assignee. The
assignment provided for herein shall be without recourse to the Assignor.

         SECTION 3. Payments. As consideration for the assignment and sale
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on
the date hereof in Federal funds the amount heretofore agreed between
them./1/  It is understood that facility fees accrued to the date hereof in
respect of the Assigned Amount are for the account of the Assignor and such
fees accruing from and including the date hereof are for the account of the
Assignee. Each of the Assignor and the Assignee hereby agrees that if it
receives any amount under the Credit Agreement which is for the account of
the other party hereto, it shall receive the same for the account of such
other party to the extent of such other party's interest therein and shall
promptly pay the same to such other party.

         [SECTION 4. Consent of the Parent and the Agent. This Agreement is
conditioned upon the consent of the Parent and the Agent pursuant to
Section 9.06(c) of the Credit Agreement. The execution of this Agreement by
the Parent and the Agent is evidence of this consent.]

         SECTION 5. Non-Reliance on Assignor. The Assignor makes no
representation or warranty in connection with, and shall have no
responsibility with respect to, the solvency, financial condition or
statements of the Borrowers or any of their respective Subsidiaries, or the
validity and enforceability of the obligations of the Borrowers or any of
their respective Subsidiaries in respect of any Loan Document. The Assignee
acknowledges that it has, independently and without reliance on the
Assignor, and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter

--------
       /1/ Amount should combine principal together with accrued interest
and breakage compensation, if any, to be paid by the Assignee, net of any
portion of any upfront fee to be paid by the Assignor to the Assignee. It
may be preferable in an appropriate case to specify these amounts
generically or by formula rather than as a fixed sum.

                                 C-2

<PAGE>

into this Agreement and will continue to be responsible for making its own
independent appraisal of the business, affairs and financial condition of
the Borrowers and their respective Subsidiaries.

         SECTION 6.  Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.

         SECTION 7. Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same
instrument.

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

                                            [ASSIGNOR]

                                            By_________________________
                                                Title:

                                            [ASSIGNEE]

                                            By__________________________
                                                Title:

                                            ACE LIMITED

                                            By__________________________
                                                Title:

                                            MORGAN GUARANTY TRUST
                                                COMPANY OF NEW YORK

                                            By__________________________
                                                Title:

                                      C-3

<PAGE>

                                                                   EXHIBIT D-1

                 FORM OF OPINION OF CAYMAN ISLANDS COUNSEL
                               TO THE PARENT

                                                                Effective Date:
                                                                    May 8, 2000

To the parties listed in
Schedule A attached hereto

Dear Sirs,

Re:  ACE Limited

         We have acted as Cayman Islands counsel for ACE Limited (the
"Company") in connection with its entry into the Credit Agreement referred
to below. This opinion is being rendered to you at the request of our
client pursuant to Section 3.01 of the Credit Agreement. Unless the context
otherwise requires, terms defined in the Credit Agreement are used herein
as therein defined.

         We have reviewed, inter alia, originals, drafts or copies of the
following documents:

         (a)      the Articles of Association of the Company;

         (b)      the corporate records of the Company maintained at its
                  registered office in the Cayman Islands;

         (c)      a Certificate of the Secretary of the Company (the
                  "Secretary's Certificate") in the form attached
                  certifying, inter alia, that certain resolutions (the
                  "Resolutions") were passed by the Board of Directors of
                  the Company on______________, 2000;

         (d)      a Certificate of Good Standing issued by the Registrar of
                  Companies of the Cayman Islands dated _______________, 2000;

         (e)      an amended and restated 364-day credit agreement for
                  $800,000,000 between the Company, ACE Bermuda, Tempest,
                  ACE INA Holdings Inc. and ACE Guaranty Re, Inc. as Borrowers,
                  the Initial Lenders named therein, Bank of America, N.A. and

                                              D-1-1

<PAGE>

                  The Chase Manhattan Bank as Co-Syndication Agents and Morgan
                  Guaranty Trust Company of New York as Administrative
                  Agent dated 8 May, 2000 (the "Credit Agreement").

         The following opinion is given only as to circumstances existing
on the date hereof and known to us and as to the laws of the Cayman Islands
as the same are in force at the date hereof. The following Opinion is given
in reliance upon factual matters as described in the Secretary's
Certificate and on the basis of the other documents referred to in
paragraphs (a)-(d) above. Further, we have based our opinion upon the
following assumptions, which we have not independently verified:

         (a)      the due authorization, execution and delivery of the Credit
                  Agreement by the other parties thereto;

         (b)      the Credit Agreement constitutes or will constitute at
                  all relevant times the legal, valid, binding and
                  enforceable obligations of the parties thereto under the
                  laws of New York and all other relevant laws (other than
                  the laws of the Cayman Islands);

         (c)      the choice of laws of New York as the governing law of
                  the Credit Agreement has been made in good faith and
                  would be regarded as a valid and binding selection which
                  will be upheld in the courts of New York as a matter of
                  New York law and all other relevant laws (other than the
                  laws of the Cayman Islands);

         (d)      the genuineness of all documents, the authenticity of the
                  signatures and seals thereon and the conformity of all copies
                  with the originals thereof;

         (e)      the power, authority and legal right of the parties under
                  all relevant laws and regulations (other than the laws of
                  the Cayman Islands) to enter into, execute and perform
                  their respective obligations under the Credit Agreement;
                  and

         (f)      there is nothing under any law (other than the laws of
                  the Cayman Islands) which would or might affect the
                  opinions hereinafter appearing. Specifically, we have
                  made no independent investigation of the laws of New York
                  or Bermuda.

         Upon the basis of the foregoing, we are of the opinion that:

         1.       The Company is a company limited by shares duly incorporated,
validly existing and in good standing under the laws of the Cayman Islands, and
has all corporate powers required to carry on its business as a holding company

                                D-1-2

<PAGE>

in accordance with its Memorandum and Articles of Association. The Company is
not required to obtain any license, authorization, consent or approval in
the Cayman Islands in order to carry on such business.

         2. The execution, delivery and performance by the Company of the
Credit Agreement and when executed and delivered by the Company thereunder,
the Notes are within the Company's corporate powers and have been duly
authorized by all necessary corporate action, require no action by or in
respect of, or filing with, any Cayman Islands governmental body, agency or
official and do not contravene, or constitute a default under, any
provision of Cayman Islands law or regulation or of the Memorandum and
Articles of Association of the Company or, so far as we are aware, of any
judgment, injunction, order or decree of the Cayman Islands authorities
binding upon the Company.

         3. The Credit Agreement and each Note of the Company (assuming it
has been or will be duly executed and delivered on behalf of the Company by
an Authorised Officer of the Company referred to in the Resolutions)
constitutes a valid and binding agreement or obligation of the Company
enforceable in accordance with its terms. The expression "enforceable" as
used above means that the obligations of the Company under the Credit
Agreement are of a type which the courts of the Cayman Islands will
enforce. It does not necessarily mean that those obligations will be
enforced in all circumstances in accordance with their terms, in
particular:

                  (i)      enforcement may be limited by bankruptcy, insolvency,
                           liquidation, reorganization or other laws of general
                           application relating to or affecting the rights of
                           creditors generally;

                  (ii)     enforcement may be limited by general principles
                           of equity; discretionary equitable remedies such
                           as specific performance and injunction may not,
                           for example, be available where damages are
                           considered to be an adequate remedy;

                  (iii)    claims may become barred under statutes of limitation
                           or may be or become subject to defenses of set-off
                           or counterclaim;

                  (iv)     where obligations are to be performed in a
                           jurisdiction outside of the Cayman Islands they
                           may not be enforceable in the Cayman Islands to
                           the extent that performance would be illegal
                           under the laws of the jurisdiction in question;

                                              D-1-3

<PAGE>

                  (v)      a certificate, determination, calculation or
                           designation by any party to the Credit Agreement
                           as to any matter provided therein might be held
                           by a Cayman Islands court not to be conclusive,
                           final and binding in the event of manifest
                           error;

                  (vi)     obligations to make payments that are registered by a
                           Cayman Islands court as a penalty will not be
                           enforceable;

                  (vii)    an award of a court of the Cayman Islands may be
                           required to be made in Cayman Islands dollars
                           although the courts of the Cayman Islands as a
                           matter of practice make awards in United States
                           dollars where that is the designated currency of
                           the obligation in question; currency indemnity
                           provisions have not been tested, so far as we
                           are aware, in the courts of the Cayman Islands;

                  (viii)   Cayman Islands stamp duty will be payable if the
                           Credit Agreement or any Note of the Company is
                           executed in, brought to or produced before a
                           court of the Cayman Islands;

                  (ix)     a Cayman Islands court will not necessarily award
                           costs and disbursements in litigation in accordance
                           with contractual provisions in this regard; and

                  (x)      we reserve our opinion as to the enforcement of
                           provisions such as Section 9.04 of the Credit
                           Agreement by persons who are not parties to the
                           document in favour of such persons.

         4.       There is no action, suit or proceeding pending against the
Company in the Grand Court of the Cayman Islands.

         5. The submission to jurisdiction and waiver of objection to venue
and forum set forth in the Credit Agreement are valid and effective
assuming this to be so as a matter of New York law.

         6. No taxes, levies, imposts, duties, charges or withholding
(other than stamp duty in the circumstances specified in paragraph 3(viii)
above) of any nature will be imposed by the Cayman Islands Government or
any taxing authority thereof or therein upon or with respect to (i) the
execution, delivery or performance of the Credit Agreement or any Note or
(ii) the payment of the principal of or interest on the Notes or on any
other amounts payable under the Credit Agreement.

                                    D-1-4

<PAGE>

         7. There is no requirement of Cayman Islands law which would
require any Lender to be a resident, citizen or corporation of the Cayman
Islands or to maintain a permanent establishment in the Cayman Islands as a
pre-condition to bringing an action in the Grand Court of the Cayman
Islands and the Lenders are not subject to any condition in bringing or
continuing any such action in the Grand Court of the Cayman Islands to
which any such resident, citizen or corporation or person maintaining a
permanent establishment in the Cayman Islands is not subject except to the
extent that the lack of a presence in the Cayman Islands may influence the
court in any direction as to security for costs. The courts of the Cayman
Islands have jurisdiction in any suit against the Company relating to or
arising out of the Credit Agreement or any Note.

         8. Although there is no statutory enforcement in the Cayman
Islands of judgments obtained in any New York State or federal court of the
United States of America sitting in New York City, as a matter of comity
the courts of the Cayman Islands will recognize and enforce a foreign
judgment without a review of the merits thereof (not being in respect of
taxes or like charges or in respect of a fine or penalty) which is final,
was for a liquidated sum, and was not obtained in a manner which would be,
and is not of a kind the enforcement of which is, contrary to the public
policy of the Cayman Islands.

         9. The courts of the Cayman Islands will observe and give effect
to the choices of New York law as the governing law of the Credit Agreement
and the Notes assuming such choices are bona fide and legal and assuming
that such choices are valid and binding as a matter of New York law and all
other relevant laws (other than the laws of the Cayman Islands). On the
basis of the facts known to us, we are not aware of any reason why such a
choice would not be upheld.

         10. The Company is permitted to hold assets, transfer funds and
conduct its business (including, without limitation, the payment of the
principal of, and interest on the Notes) in any currency, without any
prohibition or limitation of any type whatsoever. There are no exchange
controls imposed under Cayman Islands laws.

         Except as specifically stated herein, we make no comment with
regard to any representation which may be made by the Company in the Credit
Agreement or otherwise.

         This opinion, although addressed to you, may be relied upon by
your legal advisers (but in that capacity only). It may not be relied upon
by any other person(s) without our prior written consent.

                                                     Yours faithfully,

                                  D-1-5

<PAGE>

                                 SCHEDULE A

                              Initial Lenders

                 Morgan Guaranty Trust Company of New York
                           Bank of America, N.A.
                          The Chase Manhattan Bank
                             ABN AMRO Bank N.V.
                            The Bank of New York
                                Bank One, NA
                             Barclays Bank plc
                               Citibank, N.A.
          Deutsche Bank AG New York and/or Cayman Islands Branches
                         First Union National Bank
                            Fleet National Bank
                             Mellon Bank, N.A.
                            Royal Bank of Canada
                   The Bank of Tokyo-Mitsubishi, Limited
                         Banque Nationale de Paris
                      Credit Lyonnais New York Branch
                            Lloyds TSB Bank plc
                    State Street Bank and Trust Company

                                   D-1-6

<PAGE>

                                ACE LIMITED
                                P.O. Box 309
                                Ugland House
                            South Church Street
                                George Town
                                Grand Cayman
                               Cayman Islands
                            British West Indies

___ May, 2000

To:  Cayman Islands Counsel to the Parent

Dear Sirs,

Re:  ACE Limited

         In connection with certain opinions you have been requested to
render in respect of the aforesaid, I would hereby certify as follows:

         1.       The Company's Memorandum and Articles of Association as
                  adopted by Special Resolution of the Company on 14th
                  January, 1993 remain in full force and effect unamended
                  save by Special Resolution passed on 6th February, 1998.

         2.       No resolutions of the shareholders have been passed to
                  restrict the authority of the Directors as set forth in
                  the Memorandum and Articles of Association of the Company
                  adopted on 14th January, 1993.

         3.       No petition has been filed in the Cayman Islands or any
                  jurisdiction for the winding up of the Company and no
                  resolution has been passed by the shareholders of the Company
                  to wind it up.

         4.       The Resolutions of the Board of Directors passed on
                  December 29, 1998, certified extracts of which are
                  annexed to this Certificate, remain in full force and
                  effect.

         5.       The Company's authorised share capital includes
                  [300,000,000 Ordinary Shares of US $0.041666667] each and
                  [10,000,000 "Other Shares" of US $1.00 each].

                                     D-1-1

<PAGE>

         6.       The number of Ordinary Shares currently in issue and
                  outstanding is [193,914,702].

         7.       The execution by an Authorised Officer of the Company of
                  the Guaranty in favour of Bank of America National Trust
                  and Savings Association referred to in your opinion of
                  today's date was deemed by that Authorised Officer
                  necessary, advisable or proper in connection with the
                  execution of the Credit Agreement, referred to in your
                  opinions of today's date.

                                            ------------------------------------
                                            [Peter N. Mear]
                                            General Counsel and Secretary

                                   D-1-2

<PAGE>

                                                                   EXHIBIT D-2

                    FORM OF OPINION OF NEW YORK COUNSEL
                            TO THE LOAN PARTIES

                                                     May 8, 2000

Morgan Guaranty Trust Company of New York
  and each of the other financial institutions
  which is a party to the Credit Agreement
  referred to below
c/o Morgan Guaranty Trust Company
  of New York, as Administrative Agent
60 Wall Street
New York, New York 10260-0060

Ladies and Gentlemen:

         We have acted as special New York counsel for ACE Limited, ACE
Bermuda Insurance Ltd., Tempest Reinsurance Company Limited, ACE INA
Holdings Inc. ("ACE INA"), and ACE Guaranty Re, Inc. ( collectively the
"Borrowers") in connection with the $800,000,000 Amended and Restated
364-Day Credit Agreement (the "Credit Agreement") dated as of May 8, 2000
among the Borrowers, various financial institutions, Bank of America, N.A.
and The Chase Manhattan Bank as Co-Syndication Agents and Morgan Guaranty
Trust Company of New York, as Administrative Agent. Terms defined in the
Credit Agreement are used herein as therein defined. This opinion letter is
being rendered to you at the request of our clients pursuant to Section
3.01(ii)(F)(2) of the Credit Agreement.

         We have examined originals or copies, certified or otherwise
identified to our satisfaction, of (i) the Credit Agreement, (ii) the Notes
issued by the Borrowers on the date hereof and (iii) such documents,
corporate records, certificates of public officials and of officers and
representatives of the Borrowers and other instruments, and have conducted
such other investigations of fact and law, as we have deemed necessary or
advisable for purposes of this opinion letter. Except as described in the
foregoing sentence, we have not undertaken any independent investigation of
any factual matters which might be relevant to this opinion letter and we
have made no independent investigation of the records of, or other matters
relating to, any Borrower or any other Person.

         Whenever our opinion with respect to the existence or absence of
facts is indicated to be based on our knowledge, we are referring solely to
the actual

                                  D-2-1

<PAGE>

knowledge of the particular attorneys who have represented the Borrowers in
connection with the Credit Agreement. Except as expressly set forth herein,
we have not undertaken any independent investigation to determine the
existence or absence of such facts and no inference as to our knowledge
concerning such facts should be drawn from the fact that such
representation has been undertaken by us.

         For the purposes of this opinion letter, we have assumed that all
items submitted to us as originals are complete and authentic and all
signatures thereon are genuine, and all items submitted to us as copies are
complete and conform to the originals. We have also assumed, with your
permission and without independent investigation of any kind, the
following: (i) each of the Parent, ACE Bermuda and Tempest has been duly
incorporated or organized and is validly existing under the laws of the
Cayman Islands (in the case of the Parent) or of Bermuda (in the case of
ACE Bermuda and Tempest); (ii) the Credit Agreement and the Notes have been
duly authorized, executed and delivered by each party thereto (other than
ACE INA, as to which we express an opinion below); (iii) the Credit
Agreement is the legal, valid and binding obligation of each party thereto
(other than the Borrowers, as to which we express an opinion below)
enforceable against each such party in accordance with its terms; (iv) as
to each of the Borrowers (other than, in the case of clauses (a) and (b)
below, ACE INA, as to which we express an opinion below), the execution,
delivery and performance of the Credit Agreement and the Notes by such
Borrower (a) are in accordance with (and do not conflict with) the laws of
the jurisdiction in which such Borrower is incorporated or organized, as
the case may be, (b) do not violate or contravene such Borrower's
organizational documents or by-laws; and (c) do not violate or contravene
any provision of any agreement or contract applicable to or binding upon
such Borrower; and (v) there are no agreements or understandings among the
parties, written or oral, and no usage of trade or course of prior dealing
among the parties which would, in either case, define, supplement or
qualify the terms of the Credit Agreement or any Note.

         Upon the basis of the foregoing and the other assumptions and
qualifications set forth herein, we are of the opinion that:

         1. ACE INA has been duly incorporated, is validly existing and is in
good standing under the laws of the State of Delaware.

         2. ACE INA has the corporate power and authority to execute,
deliver and perform its obligations under the Credit Agreement and the
Notes issued by it on the date hereof (the "ACE INA Notes"). ACE INA has
taken all corporate action required to duly authorize the execution,
delivery and performance by it of the Credit Agreement and the ACE INA
Notes. Each of the Credit Agreement and each ACE INA Note has been duly
authorized, executed and delivered by ACE INA.

                                     D-2-2

<PAGE>

         3. Based upon our review of those statutes, rules, regulations and
judicial decisions which in our experience are normally applicable to or
normally relevant in connection with transactions of the type provided for
in the Credit Agreement, the execution and delivery by the Borrowers of the
Credit Agreement and the Notes and the performance by the Borrowers of
their respective obligations thereunder do not and will not violate,
contravene or constitute a default under any provision of any United States
Federal or New York State law or regulation or, to our knowledge, any
order, writ, injunction or decree applicable to or binding on any Borrower
or its properties. The execution and delivery by ACE INA of the Credit
Agreement and the ACE INA Notes and the performance by ACE INA of its
obligations thereunder in accordance with their respective terms will not
violate the certificate of incorporation or by-laws of ACE INA.

         4. No order, consent, approval, license, authorization or
validation of or exemption by any government or public body or authority of
the State of New York is required to authorize or is required in connection
with the execution, delivery and performance by any Borrower of the Credit
Agreement or any Note.

         5. Each of the Credit Agreement and each Note constitutes a valid
and binding agreement of each Borrower which is a party thereto, in each
case enforceable in accordance with its terms.

         6.       None of the Borrowers is an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.

         Our opinions set forth above are subject to the following
qualifications:

         (a)  We express no opinion as to any law, rule, regulation, ordinance,
              code or similar provision of law of any county, municipality, or
              similar political subdivision of the State of New York or any
              agency or instrumentality thereof, and we express no opinion as to
              any law to which any Borrower may be subject solely as a result of
              your legal or regulatory status or as to any insurance law or
              (except as expressly set forth in paragraph 6) any federal or
              state securities or "blue sky" law. Members of our Firm are
              admitted to practice law in the State of New York and we express
              no opinion on any law other than the laws of the State of New
              York, the General Corporation Law of the State of Delaware
              ("Delaware Corporation Law"), and the Federal law of the United
              States to the extent specifically set forth herein. With respect
              to any matters concerning Delaware Corporation Law involved in
              the opinions set forth above, we draw your attention to the fact
              that we are not admitted to practice law in the State of Delaware
              and are not experts in the law of such jurisdiction, and that any
              such opinions

                                     D-2-3

<PAGE>

              concerning Delaware Corporation Law are based upon our
              reasonable familiarity with Delaware Corporation Law and
              as a result of our prior involvement in transactions
              concerning such laws.

         (b) Our opinions are subject to the effect of any applicable
             bankruptcy, insolvency, reorganization, moratorium, fraudulent
             conveyance or similar laws affecting creditors' rights generally
             and to the effect of general principles of equity (regardless of
             whether considered in a proceeding in equity or at law), including
            (without limitation) concepts of materiality, reasonableness, good
             faith and fair dealing and by limitations on the availability of
             specific performance, injunctive relief or other equitable
             remedies

         (c)  We express no opinion as to:

                  (i)  obligations relating to indemnification, contribution or
         exculpation of costs, expenses or liabilities which contravene public
         policy;

                  (ii) the enforceability, under certain circumstances, of
         provisions imposing penalties or forfeitures, late payment charges
         or an increase in interest rate upon delinquency in payment or the
         occurrence of a default;

                  (iii) any agreement by any Borrower to the subject matter
         jurisdiction of a United States federal court, to the waiver of
         the right to jury trial or to be served with process by service
         upon a designated third party;

                  (iv) any agreement by any Borrower purporting to waive
         any objection to the laying of venue or any claim that an action
         or proceeding has been brought in an inconvenient forum;

                  (v) the effect of the law of any jurisdiction other than
         the State of New York wherein any Lender may be located or wherein
         the enforcement of the Credit Agreement or any Note may be sought
         that limits the rates of interest, fees or other charges legally
         chargeable or collectible;

                  (vi) any provision of the Credit Agreement (A)
         restricting access to legal or equitable remedies, (B) relating to
         severability or similar clauses, (C) providing that the Credit
         Agreement may only be amended, modified or waived in writing, (D)
         stating that all rights or remedies of any party are cumulative
         and may be enforced in addition to any other

                                    D-2-4

<PAGE>

         right or remedy and that the election of a particular remedy does
         not preclude recourse to one or more remedies, (E) purporting to
         establish an evidentiary standard for determinations by the
         Lenders or the Administrative Agent or (F) purporting to convey
         rights to Persons other than parties to the Credit Agreement;

                  (vii) whether any court outside the State of New York
         would honor the choice of New York law as the governing law of the
         Credit Agreement and the Notes; or

                  (viii)   Section 9.05 of the Credit Agreement.

         The opinions expressed herein are effective only as to the date of
this opinion letter. We do not assume responsibility for updating this
opinion letter as of any date subsequent to the date of this opinion
letter, and we assume no responsibility for advising you of (i) any changes
with respect to any matters described in this opinion letter or (ii) the
discovery subsequent to the date of this opinion letter of factual
information not previously known to us pertaining to the events occurring
prior to the date of this opinion letter.

         This opinion letter is rendered solely to you in connection with
the above-described transactions. This opinion letter may not be relied
upon by you for any other purpose, or relied upon by any other Person
without our prior written consent.

                                            Very truly yours,

                                   D-2-5

<PAGE>

                                                                 EXHIBIT D-3

                     FORM OF OPINION OF BERMUDA COUNSEL
                         TO ACE BERMUDA AND TEMPEST

May 8, 2000

The parties listed in Schedule A
attached hereto (together the "Initial Lenders")

Dear Sirs

ACE Bermuda Insurance Ltd ("SCE Bermuda")
Tempest Reinsurance Company Limited ("Tempest")

         We have acted as special legal counsel in Bermuda to ACE Bermuda
and Tempest (together the "Companies") in connection with an amended and
restated 364-day credit agreement for $800,000,000 between ACE Limited, ACE
Bermuda, Tempest, ACE INA Holdings Inc. and ACE Guaranty Re, Inc. as
borrowers, the Initial Lenders named therein, Bank of America, N.A. and The
Chase Manhattan Bank, as Co-Syndication Agents, and Morgan Guaranty Trust
Company of New York as Administrative Agent, dated as of May 8, 2000 (the
"ACE Limited 364-Day Credit Agreement").

         For the purposes of giving this opinion, we have examined an
electronic copy and facsimile executed signature pages of the ACE Credit
Agreement.

         We have also reviewed the memorandum of association and the
bye-laws of each of the Companies, a certified copy of an extract from the
minutes of a meeting of each of ACE Bermuda and Tempest's directors held on
[26 May, 1999] as certified by the Assistant Secretary of ACE Bermuda and
Tempest on [30 June, 1999] (the "Minutes"), and such other documents and
made such enquiries as to questions of law as we have deemed necessary in
order to render the opinion set forth below.

         We have also reviewed and relied upon:

         (i)      Certificates of Registration of ACE Bermuda and Tempest as
                  insurers under the Insurance Act 1978 (the "Certificates of
                  Registration");

         (ii)     Certificates of Compliance under the Companies Act 1981 and
                  The Insurance Act 1978 issued by the Assistant Registrar of

                                     D-3-1

<PAGE>

                  Companies on 25 May, 1999 in respect of ACE Bermuda and
                  Tempest (the "Compliance Certificates");

         (iii)    the Direction issued under section 56 of the Insurance
                  Act 1978 on behalf of the Minister of Finance dated 9
                  December, 1998 in respect of ACE Bermuda giving
                  guarantees;

         (iv)     the Direction issued under section 56 of the Insurance
                  Act 1978 Act on behalf of the Minister of Finance dated
                  17 March, 1999 in respect of Tempest giving guarantees;

         (v)      our searches of documents of public record in respect of
                  each of ACE Bermuda and Tempest maintained at the
                  Registrar of Companies in Bermuda and the Cause Book of
                  the Supreme Court of Bermuda as at [__________, 2000]
                  (the "Searches").

         We have assumed (a) the genuineness and authenticity of all
signatures and the conformity to the originals of all copies (whether or
not certified) examined by us and the authenticity and completeness of the
originals from which such copies were taken, (b) that where a document has
been examined by us in draft or electronic form, it will be or has been
executed in the form of that draft or electronic form, and where a number
of drafts of a document have been examined by us all changes thereto have
been marked or otherwise drawn to our attention, (c) the capacity, power
and authority of each of the parties to the ACE Limited 364-Day Credit
Agreement, other than the Companies, to enter into and perform its
respective obligations under the ACE Limited 364-Day Credit Agreement, (d)
the due execution of the ACE Limited 364-Day Credit Agreement by each of
the parties thereto, other than the Companies, and the delivery thereof by
each of the parties thereto, (e) the accuracy and completeness of all
factual representations made in the ACE Limited 364-Day Credit Agreement
and other documents reviewed by us, (f) that the resolutions contained in
the Minutes remain in full force and effect and have not been rescinded or
amended, (g) that the Companies are entering into the ACE Limited 364-Day
Credit Agreement pursuant to their business of insurance, (h) that the
information disclosed by the Searches has not been materially altered and
that the Searches did not fail to disclose any material information which
had been delivered for filing or registration, but was not disclosed or did
not appear on the said public record at the time of the Searches, (i) that
there is no provision of the law of any jurisdiction, other than Bermuda,
which would have any implication in relation to the opinions expressed
herein, (j) that the entering into of the ACE Limited 364-Day Credit
Agreement by the Companies will not result in a breach of the conditions
attached to their respective Certificates of Registration issued pursuant
to the Insurance Act 1978; (k) the validity and binding effect under the
laws of the State of New York (the "Foreign Laws") of the ACE Limited
364-Day Credit Agreement which are expressed to be governed by such Foreign
Laws in accordance with their respective terms, (l)

                                   D-3-2

<PAGE>

the validity and binding effect under the Foreign Laws of the submission by
the Company pursuant to the ACE Limited 364-Day Credit Agreement to the
non-exclusive jurisdiction of the courts of any New York State Court or
Federal court of the United States of America sitting in New York City (the
"Foreign Courts").

         The obligations of the Companies under the ACE Limited 364-Day
Credit Agreement (a) will be subject to the laws from time to time in
effect relating to bankruptcy, insolvency, liquidation, possessory liens,
rights of set off, reorganization, amalgamation, moratorium or any other
laws or legal procedures, whether of a similar nature or otherwise,
generally affecting the rights of creditors, (b) will be subject to
statutory limitation of the time within which proceedings may be brought,
(c) will be subject to general principles of equity and, as such, specific
performance and injunctive relief, being equitable remedies, may not be
available, (d) may not be given effect to by a Bermuda court, whether or
not it was applying the Foreign Laws, if and to the extent they constitute
the payment of an amount which is in the nature of a penalty and not in the
nature of liquidated damages and (e) as a person registered as an insurer
(the "insurer") under the Insurance Act 1978 and the regulations
promulgated thereunder (the "Act"), will be subject to directions which may
be issued by the Bermuda Minister of Finance (the "Minister") under Section
32 of the Act ("Section 32") if it appears to the Minister that the
business of the insurer is being so conducted that there is a significant
risk of the insurer becoming insolvent or the insurer is in breach of a
provision of the Act or of the regulations promulgated thereunder or any
condition imposed on its registration (for example the requirement to
maintain a certain minimum amount of statutory capital and surplus). In
these circumstances, the Minister may direct the insurer to take or refrain
from taking any of the steps listed in Section 32, including, inter alia,
that the insurer cease or limit its underwriting or that there be a
prohibition or restriction on the payment of dividends or other
distributions. Further, under Section 32, if it appears to the Minister
that the business of the insurer is being so conducted that there is a
significant risk of the insurer becoming insolvent, he may direct the
insurer to maintain in, or transfer to and keep in the custody of, a
specified bank, assets of the insurer of such value and description as are
specified in the direction. ACE Bermuda and/or Tempest, under applicable
requirements of the Act, may be required to record a liability against or
to deduct from its statutory capital and surplus (as determined under the
Act) amounts payable or paid pursuant to its obligations under the ACE
Limited 364-Day Credit Agreement. The Companies may be considered to be
insolvent if they fail to meet and maintain the required minimum amount of
statutory capital and surplus and in such circumstances the ability of the
Companies to carry out the said obligations will be affected.

         We express no opinion as to the enforceability of any provision of
the ACE Limited 364-Day Credit Agreement which provides for the payment of
a specified rate of interest on the amount of a judgment after the date of
judgment or which purports to fetter the statutory powers of either of the
Companies.

                                  D-3-3

<PAGE>

         With respect to the opinion expressed in paragraph 4 below, it
should be noted that the documents of public record maintained by the
Registrar of Companies do not reveal (i) whether a winding-up petition or
application to a Bermuda court for the appointment of a receiver has been
presented, (ii) details of matters which have been lodged for registration
but have not actually been registered at the date the file was made
available to us, (iii) whether a direction under Section 32 has been issued
or (iv) whether the Companies are in compliance with conditions attached to
their registration as a Class 4 insurer and a long-term insurer under the
Act and the provisions of the Act.

         We have made no investigation of and express no opinion in
relation to the laws of any jurisdiction other than Bermuda. This opinion
is to be governed by and construed in accordance with the laws of Bermuda
and is limited to and is given on the basis of the current law and practice
in Bermuda. This opinion is issued solely for your benefit and is not to be
relied upon by any other person, firm or entity or in respect of any other
matter.

         On the basis of and subject to the foregoing, we are of the
opinion that:

         1.  Tempest is duly incorporated and existing under the laws of
             Bermuda. ACE Bermuda is the result of a due continuation into
             Bermuda and a subsequent due amalgamation under the laws of
             Bermuda. Both Companies are in good standing (meaning solely
             that each has not failed to make any filing with any Bermuda
             governmental authority or to pay any Bermuda government fee or
             tax which would make it liable to be struck off the Register of
             Companies and thereby cease to exist under the laws of Bermuda).
             Based purely on the Certificates of Registration and the
             Compliance Certificates, each of Tempest and ACE Bermuda is
             registered under the Insurance Act 1978 as a Class 4 Insurer.

         2.  Each of the Companies has the necessary corporate power and
             authority to enter into and perform its obligations under the ACE
             Limited 364-Day Credit Agreement. The execution and delivery of
             the ACE Limited 364-Day Credit Agreement by each of the
             Companies and the respective performance by each of the
             Companies of its obligations thereunder will not violate the
             respective memorandum of association or bye-laws of the
             Companies nor any applicable law, regulation, order or decree in
             Bermuda.

         3.  Each of the Companies has taken all corporate action required to
             authorise its execution, delivery and performance of the ACE
             Limited 364-Day Credit Agreement and the Notes thereunder. The
             ACE Limited 364-Day Credit Agreement has been duly executed

                                         D-3-4

<PAGE>

             and delivered by or on behalf of the Companies, and
             constitutes the valid and binding obligations of the
             Companies in accordance with the terms thereof.

         4.  No order, consent, approval, licence, authorisation or
             validation of or exemption by any government or public
             body or authority of Bermuda or any sub-division thereof
             is required to authorise or is required in connection
             with the execution, delivery, performance and enforcement
             of the ACE Limited 364-Day Credit Agreement and the Notes
             thereunder.

         5.  It is not necessary or desirable to ensure the enforceability in
             Bermuda of the ACE Limited 364-Day Credit Agreement and the
             Notes thereunder that they be registered in any register kept by,
             or filed with, any governmental authority or regulatory body in
             Bermuda. However, to the extent that the ACE Limited 364-Day
             Credit Agreement and the Notes thereunder create a charge over
             assets of one or both of the Companies, it may be desirable to
             ensure the priority in Bermuda of the charge that they be
             registered in the Register of Charges in accordance with Section 55
             of the Companies Act 1981. On registration, to the extent that
             Bermuda law governs the priority of a charge, such charge will
             have priority in Bermuda over any unregistered charges, and over
             any subsequently registered charges, in respect of the assets
             which are the subject of the charge. A registration fee of $425
             will be payable in respect of the registration.

             While there is no exhaustive definition of a charge under
             Bermuda law, a charge normally has the following
             characteristics:

                  (i)   it is a proprietary interest granted by way of
                        security which entitles the chargee to resort to
                        the charged property only for the purposes of
                        satisfying some liability due to the chargee
                        (whether from the chargor or a third party); and

                  (ii)  the chargor retains an equity of redemption to have the
                        property restored to him when the liability has been
                        discharged.

                  However, as the ACE Limited 364-Day Credit Agreement is
                  governed by the Foreign Laws, the question of whether it
                  would possess these particular characteristics would be
                  determined under the Foreign Laws.

                                     D-3-5

<PAGE>

         6.  The ACE Limited 364-Day Credit Agreement and the Notes
              thereunder will not be subject to ad valorem stamp duty in
              Bermuda.

         7.   The choice of the Foreign Laws as the governing law of the ACE
              Limited 364-Day Credit Agreement and the Notes thereunder is a
              valid choice of law and would be recognised and given effect to
              in any action brought before a court of competent jurisdiction in
              Bermuda, except for those laws (i) which such court considers to
              be procedural in nature, (ii) which are revenue or penal laws or
              (iii) the application of which would be inconsistent with public
              policy, as such term is interpreted under the laws of Bermuda. The
              submission in the ACE Limited 364-Day Credit Agreement to the
              non-exclusive jurisdiction of the Foreign Courts is valid and
              binding upon the Companies.

         8.   The courts of Bermuda would recognise as a valid judgment, a
              final and conclusive judgment in personam obtained in the Foreign
              Courts against the Companies based upon the ACE Limited 364-
              Day Credit Agreement or the Notes thereunder under which a sum
              of money is payable (other than a sum of money payable in respect
              of multiple damages, taxes or other charges of a like nature or in
              respect of a fine or other penalty) and would give a judgment
              based thereon provided that (a) such courts had proper
              jurisdiction over the parties subject to such judgment, (b) such
              courts did not contravene the rules of natural justice of Bermuda,
              (c) such judgment was not obtained by fraud, (d) the enforcement
              of the judgment would not be contrary to the public policy of
              Bermuda, (e) no new admissible evidence relevant to the action is
              submitted prior to the rendering of the judgment by the courts of
              Bermuda and (f) the due compliance with the correct procedures
              under the laws of Bermuda.

                                                 Yours faithfully,

                                    D-3-6

<PAGE>

SCHEDULE A
----------

Initial Lenders

         Morgan Guaranty Trust Company of New York
         Bank of America, N.A.
         The Chase Manhattan Bank
         ABN AMRO Bank N.V.
         The Bank of New York
         Bank One, NA
         Barclays Bank plc
         Citibank, N.A.
         Deutsche Bank AG New York and/or Cayman Islands Branches
         First Union National Bank
         Fleet National Bank
         Mellon Bank, N.A.
         Royal Bank of Canada
         The Bank of Tokyo-Mitsubishi, Limited
         Banque Nationale de Paris
         Credit Lyonnais New York Branch
         Lloyds TSB Bank plc
         State Street Bank and Trust Company

                                   D-3-7

<PAGE>

                                                                   EXHIBIT D-4

                    FORM OF OPINION OF MARYLAND COUNSEL
                          TO ACE GUARANTY RE INC.

                                212-450-4808

                                                     May 8, 2000

Morgan Guaranty Trust Company of New York
and each of the other financial institutions
which is a party to the Credit Agreement
referred to below
c/o Morgan Guaranty Trust Company
  of New York, as Administrative Agent
60 Wall Street
New York, New York  10260-0060

      Re:      $800,000,000 Credit Agreement

Ladies and Gentlemen:
                  This firm has acted as special Maryland counsel to ACE
Guaranty Re Inc., a Maryland corporation (the "Company"), in connection
with the $800,000,000 Credit Agreement dated as of May 8, 2000 (the
"Agreement"), among ACE Limited, ACE Bermuda Insurance Ltd., Tempest
Reinsurance Company Limited, ACE INA Holdings Inc. and the Company, various
financial institutions and Morgan Guaranty Trust Company of New York, as
Administrative Agent. This opinion letter is furnished to you pursuant to
the requirements set forth in Section 3.01(ii)(F)(4) of the Agreement in
connection with the Closing thereunder on the date hereof. Capitalized
terms used herein which are defined in the Agreement shall have the
meanings set forth in the Agreement, unless otherwise defined herein.

                  For purposes of this opinion letter, we have examined
copies of the following documents:

                  1.   Executed copy of the Agreement.

                                  D-4-1

<PAGE>

Morgan Guaranty Trust Company
   of New York, as Administrative Agent
May 8, 2000                                                           Page 2

                2.   Executed copies of the Notes issued by the Company.

                3.   The Articles of Incorporation of the Company with
                     amendments thereto (the "Charter"), as certified
                     by the State Department of Assessments and
                     Taxation of the State of Maryland on May 4, 2000
                     and as certified by the Secretary of the Company
                     on the date hereof as being complete, accurate
                     and in effect.

                4.   The by-laws of the Company, as certified by the Secretary
                     of the Company on the date hereof as being complete,
                     accurate and in effect.

                5.   A certificate of good standing of the Company issued by
                     the State Department of Assessments and Taxation of the
                     State of Maryland dated May __,2000.

                6.   Certain resolutions of the Board of Directors of
                     the Company adopted by unanimous written consent
                     dated May 5, 2000, as certified by the Secretary
                     of the Company on the date hereof as being
                     complete, accurate and in effect, relating to
                     authorization of the Agreement, the Notes, and
                     arrangements in connection therewith.

                7.   A certificate of certain officers of the Company, dated
                     May 8, 2000, as to certain facts relating to the Company.

                8.   A certificate of the Secretary of the Company, dated May
                     8, 2000, as to the incumbency and signatures of certain
                     officers of the Company.

                We have not, except as specifically identified above,
made any independent review or investigation of factual or other matters,
including the organization, existence, good standing, assets, business or
affairs of the Company. In our examination of the Agreement and the
aforesaid certificates, records, documents and agreements, we have assumed
the genuineness of all signatures (other than those on behalf of the
Company on the Agreement), the legal capacity of all natural persons, the
accuracy and completeness of all documents submitted to us, the
authenticity of all original documents and the conformity to authentic
original documents of all documents submitted to us as copies (including
telecopies). We also have assumed the accuracy, completeness and
authenticity

                                   D-4-2

<PAGE>

Morgan Guaranty Trust Company
   of New York, as Administrative Agent
May 8, 2000                                                            Page 3

of the foregoing certifications (of public officials, governmental agencies
and departments, corporate officers and individuals) and statements of
fact, on which we are relying, and have made no independent investigations
thereof. In rendering the following opinions we have relied as to factual
matters, without independent investigation, upon the representations,
warranties and certifications made by the Company in or pursuant to the
Agreement and upon the officers' certificate identified in Paragraph 7
above. This opinion letter is given, and all statements herein are made, in
the context of the foregoing.

                  As used in this opinion letter, the phrase "to our
knowledge" or concerning matters of which we are aware means the actual
knowledge (that is, the conscious awareness of facts or other information)
of lawyers in the firm who have given substantive legal attention to
representation of the Company in connection with the Agreement.

                  For purposes of this opinion letter, we have assumed that
(i) each other party to the Agreement (other than the Company) has all
requisite power and authority under all applicable laws, regulations and
governing documents to execute, deliver and perform its obligations under
the Agreement, (ii) each of such other parties has duly authorized,
executed and delivered the Agreement, (iii) each of such other parties is
validly existing and in good standing in all necessary jurisdictions, (iv)
the Agreement constitutes a valid and binding obligation, enforceable
against each of such other parties in accordance with its terms and (v)
there has been no material mutual mistake of fact or misunderstanding or
fraud, duress or undue influence, in connection with the negotiation,
execution or delivery of the Agreement.

                  This opinion letter is based as to matters of law solely
on applicable provisions of (i) the General Corporation Law of the State of
Maryland, as amended (the "Maryland Corporation Law") and (ii) Maryland law
customarily applicable between borrowers and creditors in transactions of
the type contemplated by the Agreement and the Notes (but not including any
statutes, ordinances, administrative decisions, rules or regulations of any
political subdivision of the State of Maryland)(hereinafter, "Maryland
Law"), and we express no opinion as to any other laws, statutes,
ordinances, rules or regulations (such as federal or state securities laws
or regulations, antitrust or unfair competition laws or regulations or tax
laws or regulations).

                  For purposes of the opinions set forth in Paragraphs
(d)(ii) and (e), we have inquired of the Company whether the Company
receives licenses or

                                     D-4-3

<PAGE>

Morgan Guaranty Trust Company
   of New York, as Administrative Agent
May 8, 2000                                                           Page 4

other authorizations or makes filings or registrations with regulatory
authorities in the State of Maryland other than tax filings, securities
filings, corporate filings or insurance filings, and we have received an
officers' certificate from the Company to the effect that it does not. In
addition, based upon our understanding of the business of the Company as
described in the most recent Form 10-K filed by Capital Re Corporation, we
are not aware that the business of the Company requires it to receive or
make any such licenses, authorizations, filings or registrations. On the
basis of this inquiry and response, the opinions expressed in Paragraphs
(d)(ii) and (e) are limited to Maryland Law.

                  Based upon, subject to and limited by the foregoing, we
are of the opinion that:

                  (a) The Company was incorporated, and is validly existing
and in good standing as of the date of the certificate specified in
Paragraph 5 above, under the laws of the State of Maryland.

                  (b) The Company has the corporate power and corporate
authority under its Charter and the Maryland Corporation Law to execute and
deliver the Agreement and the Notes and to perform its obligations
thereunder. The execution, delivery and performance as of the date hereof
by the Company of the Agreement and the Notes have been duly authorized by
all necessary corporate action of the Company.

                  (c) Each of the Agreement and each Note has been duly
executed and delivered on behalf of the Company.

                  (d) The execution, delivery and performance as of the
date hereof by the Company of the Agreement and the Notes do not (i)
violate the Maryland Corporation Law or the Charter or bylaws of the
Company, or (ii) to our knowledge, violate any applicable law, rule,
regulation, order, judgment or decree of the State of Maryland.

                  (e) No approval or consent of, or registration or filing
with, any State of Maryland governmental agency is required to be obtained
or made by the Company in connection with the execution, delivery and
performance as of the date hereof by the Company of the Agreement and the
Notes.

                  We assume no obligation to advise you of any changes in
the foregoing subsequent to the delivery of this opinion letter. This
opinion letter has been prepared solely for your use in connection with the
closing under the

                                    D-4-4

<PAGE>

Morgan Guaranty Trust Company
   of New York, as Administrative Agent
May 8, 2000                                                         Page 5

Agreement on the date hereof, and should not be quoted in whole or in part
or otherwise be referred to, nor be filed with or furnished to any
governmental agency or other person or entity, without the prior written
consent of this firm.

                                                    Very truly yours,

                                                     HOGAN & HARTSON L.L.P.

                                      D-4-5

<PAGE>

                                                                   EXHIBIT E

                       FORM OF DESIGNATION AGREEMENT

                     dated as of ________________, 2000

         Reference is made to the Amended and Restated 364-Day Credit
Agreement dated as of May 8, 2000 (as amended from time to time, the
"Credit Agreement") among ACE Limited (the "Parent") and the other
Borrowers party thereto, the Initial Lenders party thereto, the
Co-Syndication Agents, and Morgan Guaranty Trust Company of New York, as
Administration Agent (the "Administrative Agent"). Terms defined in the
Credit Agreement are used herein with the same meaning.

         _________________ (the "Designator") and ________________ (the
"Designee") agree as follows:

           1. The Designator designates the Designee as its Designated
Lender under the Credit Agreement and the Designee accepts such
designation.

           2. The Designator makes no representations or warranties and
assumes no responsibility with respect to the financial condition of the
Borrowers or the performance or observance by the Borrowers of any of its
obligations under the Credit Agreement or any other instrument or document
furnished pursuant thereto.

         3. The Designee (i) confirms that it is an Eligible Designee; (ii)
appoints and authorizes the Designator as its administrative agent and
attorney-in-fact and grants the Designator an irrevocable power of attorney
to receive payments made for the benefit of the Designee under the Credit
Agreement and to deliver and receive all communications and notices under
the Credit Agreement, if any, that the Designee is obligated to deliver or
has the right to receive thereunder; (iii) acknowledges that the Designator
retains the sole right and responsibility to vote under the Credit
Agreement, including, without limitation, the right to approve any
amendment or waiver of any provision of the Credit Agreement, and (iv)
agrees that the Designee shall be bound by all such votes, approvals,
amendments and waivers and all other agreements of the Designator pursuant
to or in connection with the Credit Agreement.

         4. The Designee (i) confirms that it has received a copy of the
Credit Agreement, together with copies of the most recent financial
statements referred to in Article 4 or delivered pursuant to Article 5
thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Designation Agreement and (ii) agrees that it will, independently and
without reliance upon the Administrative Agent, the

                                    E-1

<PAGE>

Designator or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking any action it may be permitted to take
under the Credit Agreement. The Designee acknowledges that it is subject to
and bound by the confidentiality provisions of the Credit Agreement (except
as provided in Section 9.07(a) thereof).

           5. Following the execution of this Designation Agreement by the
Designator and the Designee and the consent hereto by the Parent, it will
be delivered to the Administrative Agent for its consent. This Designation
Agreement shall become effective when the Administrative Agent consents
hereto or on any later date specified on the signature page hereof.

           6. Upon the effectiveness hereof, the Designee shall have the
right to make Loans or portions thereof as a Lender pursuant to Section
2.01 or 2.03 of the Credit Agreement and the rights of a Lender related
thereto. The making of any such Loans or portions thereof by the Designee
shall satisfy the obligations of the Designator under the Credit Agreement
to the same extent, and as if, such Loans or portions thereof were made by
the Designator.

           7.   This Designation Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York.

         IN WITNESS WHEREOF, the parties have caused this Designation
Agreement to be executed by their respective officers hereunto duly
authorized, as of the date first above written.

Effective Date:______ , ____

                                          [NAME OF DESIGNATOR]

                                          By:______________________________
                                          Name:
                                          Title:

                                          [NAME OF DESIGNEE]

                                          By:______________________________
                                          Name:
                                          Title:

The undersigned consent to the foregoing designation.

                                     E-2

<PAGE>

                                          ACE LIMITED

                                          By:______________________________
                                          Name:
                                          Title:

                                          MORGAN GUARANTY TRUST
                                                COMPANY OF NEW YORK,
                                                as Administrative Agent

                                          By:______________________________
                                          Name:
                                          Title:

                                      E-3

<PAGE>

                                                                  EXHIBIT F

                        FORM OF EXTENSION AGREEMENT

The Borrowers
 (as defined in the Credit
  Agreement referred to below)

Morgan Guaranty Trust Company
    of New York, as Administrative Agent
    under the Credit Agreement
    referred to below
60 Wall Street
New York, NY  10260

Ladies and Gentlemen:

         Effective as of [effective date], the undersigned hereby agree to
extend the Termination Date as now in effect under the Amended and Restated
364-Day Credit Agreement dated as of May 8, 2000 among the Borrowers listed
therein, the Initial Lenders listed therein, the Co-Syndication Agents
referred to therein and Morgan Guaranty Trust Company of New York, as
Administrative Agent (as amended from time to time, the "Credit Agreement")
to [date]. Terms defined in the Credit Agreement are used herein as therein
defined.

         This Extension Agreement shall be construed in accordance with and
governed by the law of the State of New York.

                                 MORGAN GUARANTY TRUST COMPANY
                                   OF NEW YORK, as Administrative Agent

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

                                 [NAME OF BANK]

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

Agreed and accepted:

                                      F-1

<PAGE>

                                ACE LIMITED

The Common Seal of ACE Limited was
hereunto affixed in the presence of:

------------------------------
Director

------------------------------
Secretary

                                ACE BERMUDA INSURANCE LTD.

The Common Seal of ACE Bermuda
Insurance Ltd. was hereunto affixed
in the presence of:

------------------------------
Director

------------------------------
Secretary

                                TEMPEST REINSURANCE COMPANY
                                LIMITED

The Common Seal of Tempest Reinsurance
Company Limited was hereunto affixed
in the presence of:

------------------------------
Director

------------------------------
Secretary

                                     F-2

<PAGE>

                                    ACE INA HOLDINGS INC.

                                            By:_______________________________
                                                 Title:

                                            ACE GUARANTY RE INC.
                                            By:______________________________
                                                 Title:

                                            MORGAN GUARANTY TRUST
                                            COMPANY OF NEW YORK,
                                                 as Administrative Agent

                                            By:_______________________________
                                                 Title:

                                            BANK OF AMERICA, N.A.,
                                              as Co-Syndication Agent

                                            By:_______________________________
                                                 Title:

                                            THE CHASE MANHATTAN BANK,
                                              as Co-Syndication Agent

                                            By:_______________________________
                                                 Title:

                                       F-3PARTICIPATION AGREEMENT

               Dated as of June 9, 2000

                         among

     THE VARIOUS PARTIES HERETO FROM TIME TO TIME,
    as the Construction Agents and as the Lessees,

            PERFORMANCE FOOD GROUP COMPANY,
                   as the Guarantor,

      FIRST SECURITY BANK, NATIONAL ASSOCIATION,
         not individually, except as expressly
    stated herein, but solely as the Owner Trustee
        under the PFG Real Estate Trust 2000-1,

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

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

                          and

              FIRST UNION NATIONAL BANK,
             as the Agent for the Lenders
        and respecting the Security Documents,
     as the Agent for the Lenders and the Holders,
           to the extent of their interests

                        TABLE OF CONTENTS

                                                                      Page

SECTION 1.  THE LOANS.                                                   1

SECTION 2.  HOLDER ADVANCES.                                             2

SECTION 3.  SUMMARY OF TRANSACTIONS.                                     2
        3.1. Operative Agreements.                                       2
        3.2. Property Purchase.                                          2
        3.3. Construction of Improvements; Commencement of Basic
             Rent.                                                       3

SECTION 4.  THE CLOSINGS.                                                3
        4.1. Initial Closing Date.                                       3
        4.2. Initial Closing Date; Property Closing Dates;
             Acquisition Advances; Construction Advances.                3

SECTION  5.  FUNDING OF ADVANCES; CONDITIONS PRECEDENT; REPORTING
             REQUIREMENTS  ON  COMPLETION DATE;  THE LESSEE'S  DELIVERY
             OF NOTICES; RESTRICTIONS ON LIENS.                          4
         5.1.  General.                                                  4
         5.2.  Procedures for Funding.                                   5
         5.3.  Conditions Precedent for  the Lessor, the Agent, the
               Lenders and the Holders Relating to the Initial Closing
               Date and the Advance of Funds for the Acquisition of a
               Property.                                                 7
         5.4.  Conditions Precedent for the Lessor, the Agent, the
               Lenders and the Holders Relating to the Advance of
               Funds after the Acquisition Advance.                     12
         5.5.  Additional Reporting and Delivery Requirements on
               Completion Date and on Construction Period Termination
               Date.                                                    14
         5.6.  The Construction Agent Delivery of Construction Budget
               Modifications.                                           15
         5.7.  Restrictions on Liens.                                   15
         5.8.  Payments.                                                15
         5.9.  Maintenance of each Lessee as a Wholly-Owned Entity.     16
         5.10. Direct Obligations of Guarantor.                         16
         5.11  Additional Provisions Regarding Increase/Reduction of
               Commitments and Holder Commitments.                      16

SECTION 6.  REPRESENTATIONS AND WARRANTIES.                             17
        6.1.  Representations and Warranties of the Borrower.           17
        6.2.  Representations and Warranties of the Construction
              Agent and the Lessee.                                     19

SECTION 6B.  GUARANTY                                                   25
        6B.1. Guaranty of Payment and Performance.                      25
        6B.2. Obligations Unconditional.                                25
        6B.3. Modifications.                                            26
        6B.4. Waiver of Rights.                                         27
        6B.5. Reinstatement.                                            27
        6B.6. Remedies.                                                 28
        6B.7. Limitation of Guaranty.                                   28

SECTION 7. PAYMENT OF CERTAIN EXPENSES.                                 29
        7.1. Transaction Expenses.                                      29
        7.2. Brokers' Fees.                                             30
        7.3. Certain Fees and Expenses.                                 30
        7.4. Facility Fee.                                              31
        7.5. Administrative Fee.                                        31

SECTION 8.  OTHER COVENANTS AND AGREEMENTS.                             31
        8.1. Cooperation with the Credit Parties.                       31
        8.2. Covenants of the Owner Trustee and the Holders.            31
        8.3. Credit Party Covenants, Consent and Acknowledgment.        33
        8.4. Sharing of Certain Payments.                               37
        8.5. Grant of Easements, etc.                                   37
        8.6. Appointment by the Agent, the Lenders, the Holders and
             the Owner Trustee.                                         37
        8.7. Collection and Allocation of Payments and Other
             Amounts.                                                   38
        8.8. Release of Properties, etc.                                41
        8.9  Appointment of the Guarantor as Agent for each Lessee.     42

SECTION 9.  CREDIT AGREEMENT AND TRUST AGREEMENT.                       42
        9.1. Guarantor's Credit Agreement Rights.                       42
        9.2. The Guarantor's Trust Agreement Rights.                    43

SECTION 10.  TRANSFER OF INTEREST.                                      44
        10.1. Restrictions on Transfer.                                 44
        10.2. Effect of Transfer.                                       44

SECTION 11.  INDEMNIFICATION.                                           45
        11.1. General Indemnity.                                        45
        11.2. General Tax Indemnity.                                    47
        11.3. Increased Costs, Illegality, etc.                         52
        11.4. Funding/Contribution Indemnity.                           54
        11.5. EXPRESS INDEMNIFICATION FOR ORDINARY NEGLIGENCE, STRICT   54
              LIABILITY, ETC.
        11.6. Indemnity Prior to Completion Date / Construction Period
              Termination Date.                                         55

SECTION 12.  MISCELLANEOUS.                                             56
        12.1. Survival of Agreements.                                   56
        12.2. Notices.                                                  56
        12.3. Counterparts.                                             57
        12.4. Terminations, Amendments, Waivers, Etc.; Unanimous
              Vote Matters.                                             58
        12.5. Headings, etc.                                            59
        12.6. Parties in Interest.                                      59
        12.7. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF
              JURY TRIAL; VENUE; ARBITRATION                            60
        12.8. Severability.                                             61
        12.9. Liability Limited.                                        62
        12.10.Rights of the Credit Parties.                             63
        12.11.Further Assurances.                                       63
        12.12.Calculations under Operative Agreements.                  64
        12.13.Confidentiality.                                          64
        12.14.Financial Reporting/Tax Characterization.                 65
        12.15.Set-off.                                                  65

SCHEDULES

Schedule 5.3(n)(ii) - Form of Lessee Joinder

Schedule 5.11  - Description of Elizabeth, New Jersey Real Property

EXHIBITS

A - Form of Requisition - Sections 4.2, 5.2, 5.3 and 5.4

B - Form of Outside Counsel Opinion for the Lessee - Section 5.3(j)

C - Form of Officer's Certificate - Section 5.3(z)

D-  Form of Secretary's Certificate - Section 5.3(aa)

E - Form of Officer's Certificate - Section 5.3(bb)

F - Form of Secretary's Certificate - Section 5.3(cc)

G - Form of Outside Counsel Opinion for the Owner Trustee -
    Section 5.3(dd)

H - Form of Outside Counsel Opinion for the Lessee - Section 5.3(ee)

I - Form of Officer's Certificate - Section 5.5

J - Description of Material Litigation - Section 6.2(d)

Appendix A - Rules of Usage and Definitions

                   PARTICIPATION AGREEMENT

      THIS  PARTICIPATION AGREEMENT dated as of June 9,  2000
(as   amended,  modified,  extended,  supplemented,  restated
and/or  replaced from time to time, this "Agreement")  is  by
and among the parties hereto from time to time as the lessees
and as the construction agents (subject to the definition  of
Lessee   and  Construction  Agent  in  Appendix   A   hereto,
individually  a  "Lessee"  or  a  "Construction  Agent"   and
collectively  the  "Lessees" or the  "Construction  Agents");
PERFORMANCE  FOOD GROUP COMPANY, a Tennessee corporation,  as
the  guarantor  ("Guarantor"); FIRST SECURITY BANK,  NATIONAL
ASSOCIATION, a national banking association, not individually
(in its individual capacity, the "Trust Company"), except  as
expressly  stated  herein, but solely as  the  Owner  Trustee
under  the PFG Real Estate Trust 2000-1 (the "Owner Trustee",
the  "Borrower" or the "Lessor"); the various banks and other
lending  institutions which are parties hereto from  time  to
time  as holders of certificates issued with respect  to  the
PFG  Real  Estate Trust 2000-1 (subject to the definition  of
Holders  in  Appendix A hereto, individually, a "Holder"  and
collectively,  the "Holders"); the various  banks  and  other
lending  institutions which are parties hereto from  time  to
time  as  lenders (subject to the definition  of  Lenders  in
Appendix A hereto, individually, a "Lender" and collectively,
the  "Lenders"); and  FIRST UNION NATIONAL BANK,  a  national
banking  association,  as  the  agent  for  the  Lenders  and
respecting  the  Security Documents, as  the  agent  for  the
Lenders and the Holders, to the extent of their interests (in
such capacity, the "Agent").  Capitalized terms used but  not
otherwise  defined in this Agreement shall have the  meanings
set forth in Appendix A hereto.

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

                    SECTION 1.  THE LOANS.

      Subject  to the terms and conditions of this  Agreement
and  the  other Operative Agreements and in reliance  on  the
representations and warranties of each of the parties  hereto
contained  herein or made pursuant hereto, the  Lenders  have
agreed  to make Loans to the Lessor from time to time  in  an
aggregate  principal amount of up to the aggregate amount  of
the  Commitments of the Lenders in order for  the  Lessor  to
acquire  the Properties and certain Improvements, to  develop
and  construct  certain Improvements in accordance  with  the
Agency Agreement and the terms and provisions hereof and  for
the other purposes described herein, and in consideration  of
the  receipt of proceeds of the Loans, the Lessor will  issue
the  Notes.  The Loans shall be made and the Notes  shall  be
issued pursuant to the Credit Agreement.  Pursuant to Section
5  of  this  Agreement and Section 2 of the Credit Agreement,
the Loans will be made to the Lessor from time to time at the
request   of   the   respective   Construction   Agents    in
consideration for the respective Construction Agents agreeing
for  the  benefit  of  the  Lessor, pursuant  to  the  Agency
Agreement,   to  acquire  the  Properties,  to  acquire   the
Equipment, to construct certain Improvements and to cause the
respective   Lessees  to  lease  the  Properties,   each   in
accordance with the Agency Agreement and the other  Operative
Agreements.   The  Loans and the obligations  of  the  Lessor
under   the  Credit  Agreement  shall  be  secured   by   the
Collateral.

                    SECTION 2.  HOLDER ADVANCES.

      Subject  to the terms and conditions of this  Agreement
and  the  other Operative Agreements and in reliance  on  the
representations and warranties of each of the parties  hereto
contained  herein  or  made pursuant  hereto,  on  each  date
Advances are requested to be made in accordance with  Section
5  hereof, each Holder shall make a Holder Advance on  a  pro
rata  basis to the Lessor with respect to the PFG Real Estate
Trust  2000-1 based on its Holder Commitment in an amount  in
immediately  available funds such that the aggregate  of  all
Holder  Advances on such date shall be three percent (3%)  of
the  amount of the Requested Funds on such date,  but  in  no
event shall the aggregate of all Holder Advances be less than
three percent (3%) of the amount of all outstanding Advances;
provided,  that no Holder shall be obligated for  any  Holder
Advance  in  excess of its pro rata share  of  the  Available
Holder  Commitment.  The aggregate amount of Holder  Advances
shall   be   up  to  the  aggregate  amount  of  the   Holder
Commitments.  No prepayment or any other payment with respect
to Advances shall be permitted such that the aggregate Holder
Advances  with respect to such outstanding Advances are  less
than  three percent (3%) of all outstanding Advances,  except
in  connection with termination or expiration of the Term  or
in  connection with the exercise of remedies relating to  the
occurrence of a Lease Event of Default.  The representations,
warranties,  covenants and agreements of the  Holders  herein
and  in  the other Operative Agreements are several, and  not
joint or joint and several.

                    SECTION 3.  SUMMARY OF TRANSACTIONS.

     3.1. Operative Agreements.

      On  the  date  hereof, each of the  respective  parties
hereto  and thereto shall execute and deliver this Agreement,
the   Lease,   each  applicable  Ground  Lease,  the   Agency
Agreement,  the  Credit  Agreement,  the  Notes,  the   Trust
Agreement,  the  Certificates, the Security  Agreement,  each
applicable  Mortgage  Instrument and  such  other  documents,
instruments, certificates and opinions of counsel  as  agreed
to by the parties hereto.

     3.2. Property Purchase.

      On  each Property Closing Date and subject to the terms
and  conditions of this Agreement (a) the Holders  will  each
make a Holder Advance in accordance with Sections 2 and 5  of
this  Agreement  and the terms and provisions  of  the  Trust
Agreement, (b) the Lenders will each make Loans in accordance
with  Sections  1 and 5 of this Agreement and the  terms  and
provisions  of  the  Credit Agreement, (c)  the  Lessor  will
purchase  and acquire good and marketable title to or  ground
lease  pursuant  to a Ground Lease, the applicable  Property,
each  to  be  within  an Approved State,  identified  by  the
Construction  Agent  which is a party to a  Lease  Supplement
respecting  such Property, in each case pursuant to  a  Deed,
Bill  of Sale or Ground Lease, as the case may be, and  grant
the  Agent  a  lien  on  such Property by  execution  of  the
required  Security Documents, (d) the Agent,  the  applicable
Lessee  and  the  Lessor shall execute and  deliver  a  Lease
Supplement (and unless such Lessee has previously delivered a
Lessee  Joinder  or  is otherwise a party  to  the  Operative
Agreement  as  a  Lessee, such Lessee and  the  Lessor  shall
deliver  to  the  Agent a Lessee Joinder)  relating  to  such
Property and (e) the Term shall commence with respect to such
Property.

     3.3. Construction of Improvements; Commencement of Basic
     Rent.

      Construction  Advances will be  made  with  respect  to
particular Improvements to be constructed and with respect to
ongoing  Work  regarding the Equipment  and  construction  of
particular Improvements, in each case, pursuant to the  terms
and  conditions  of this Agreement and the Agency  Agreement.
The  Construction Agent that is a party to a Lease Supplement
respecting  a  particular Property will act as a construction
agent  on  behalf of the Lessor respecting the Work regarding
the  Equipment, the construction of such Improvements and the
expenditures  of  the Construction Advances  related  to  the
foregoing.  The Construction Agent that is a party to a Lease
Supplement respecting such Property shall promptly notify the
Lessor  upon  Completion of the Improvements and  the  Lessee
that  is  a  party  to  a  Lease Supplement  respecting  such
Property  shall  commence to pay Basic Rent as  of  the  Rent
Commencement Date.

     3.4. Lessee and Construction Agent Obligations Not Joint
     and Several.

     Each  Lessee and Construction Agent shall be liable  for
its  obligations  as Lessee or Construction Agent  under  the
Operative  Agreements solely with respect to such obligations
arising  in  connection with the Properties  for  which  such
Lessee  or  Construction Agent has executed Lease Supplements
and  no  Lessee  or Construction Agent shall  be  jointly  or
severally liable for the obligations of the other Lessees  or
Construction Agents; provided, notwithstanding the foregoing,
the   Security   Documents   shall  cross-collateralize   the
obligations of the Lessees and the Construction Agents.

                    SECTION 4.  THE CLOSINGS.

     4.1. Initial Closing Date.

      All  documents and instruments required to be delivered
on the Initial Closing Date shall be delivered at the offices
of  Moore & Van Allen, PLLC, Charlotte, North Carolina, or at
such  other location as may be determined by the Lessor,  the
Agent and the Guarantor.

     4.2. Initial Closing Date; Property Closing Dates;
     Acquisition Advances; Construction Advances.

      The  Guarantor,  on  behalf of each  applicable  Credit
Party,   shall   deliver  to  the  Agent  a  requisition   (a
"Requisition"), in the form attached hereto as EXHIBIT  A  or
in  such other form as is satisfactory to the Agent,  in  its
reasonable discretion, in connection with (a) the Transaction
Expenses  and other fees, expenses and disbursements payable,
pursuant  to  Section  7.1,  by  the  Lessor  and  (b)   each
Acquisition  Advance pursuant to Section  5.3  and  (c)  each
Construction Advance pursuant to Section 5.4.

     SECTION 5.  FUNDING OF ADVANCES; CONDITIONS
     PRECEDENT;  REPORTING REQUIREMENTS ON
     COMPLETION DATE; THE LESSEE'S DELIVERY OF
     NOTICES; RESTRICTIONS ON LIENS.

     5.1. General.

           (a)  To the extent funds have been advanced to the
     Lessor  as  Loans by the Lenders and to  the  Lessor  as
     Holder Advances by the Holders, the Lessor will use such
     funds from time to time in accordance with the terms and
     conditions  of  this Agreement and the  other  Operative
     Agreements  (i)  with respect to any  Property,  at  the
     direction of the Construction Agent that is a party to a
     Lease  Supplement respecting such Property,  to  acquire
     such  Property  in  accordance with the  terms  of  this
     Agreement, the Agency Agreement and the other  Operative
     Agreements, (ii) with respect to any Property,  to  make
     Advances to the Construction Agent that is a party to  a
     Lease Supplement respecting such Property to permit  the
     acquisition,    testing,   engineering,    installation,
     development,  construction,  modification,  design,  and
     renovation,   as  applicable,  of  such   Property   (or
     components thereof) in accordance with the terms of  the
     Agency Agreement and the other Operative Agreements, and
     (iii)  to  pay Transaction Expenses, fees, expenses  and
     other disbursements payable by the Lessor under Sections
     7.1(a) and 7.1(b).

           (b)   In  lieu of the payment of interest  on  the
     Loans  and  Holder Yield on the Holder Advances  on  any
     Scheduled  Interest  Payment Date with  respect  to  any
     Property   during   the  period  prior   to   the   Rent
     Commencement   Date  with  respect  to  such   Property,
     (i)  each Lender's Loan shall automatically be increased
     by  the  amount of interest accrued and unpaid  on  such
     Loan  for such period (except to the extent that at  any
     time  such  increase would cause such Lender's  Loan  to
     exceed such Lender's Available Commitment, in which case
     the  Lessee shall pay such excess amount to such  Lender
     in immediately available funds on the date such Lender's
     Available  Commitment  was  exceeded),  and  (ii)   each
     Holder's Holder Advance shall automatically be increased
     by the amount of Holder Yield accrued and unpaid on such
     Holder  Advance for such period (except  to  the  extent
     that  at  any time such increase would cause the  Holder
     Advance of such Holder to exceed such Holder's Available
     Holder  Commitment, in which case the Lessee  shall  pay
     such   excess  amount  to  such  Holder  in  immediately
     available  funds  on  the  date  the  Available   Holder
     Commitment of such Holder was exceeded).  Such increases
     in  a  Lender's Loan and a Holder's Holder Advance shall
     occur without any disbursement of funds by any Person.

     5.2. Procedures for Funding.

           (a)   The Construction Agents shall designate  the
     date for Advances hereunder in accordance with the terms
     and   provisions  hereof;  provided,  however,   it   is
     understood and agreed that no more than two (2) Advances
     (excluding  any  conversion and/or continuation  of  any
     Loans  or  Holder Advances) may be requested during  any
     calendar  month.  Not less than (i) three  (3)  Business
     Days  prior  to the Initial Closing Date and (ii)  three
     (3)  Business  Days  prior to  the  date  on  which  any
     Acquisition  Advance or Construction Advance  is  to  be
     made,  the Guarantor (in the case of an Advance  on  the
     Initial  Closing  Date) or thereafter, the  Construction
     Agent that is a party to a Lease Supplement respecting a
     particular  Property  (in the  case  of  an  Acquisition
     Advance   or  Construction  Advance  relating  to   such
     Property)  shall deliver to the Agent, (A) with  respect
     to   the  Initial  Closing  Date  and  each  Acquisition
     Advance,  a  Requisition  as described  in  Section  4.2
     hereof (including without limitation a legal description
     of  the Land, if any, a schedule of the Improvements, if
     any,  and  a schedule of the Equipment, if any, acquired
     or  to  be acquired on such date, and a schedule of  the
     Work, if any, to be performed, each of the foregoing  in
     a  form reasonably acceptable to the Agent) and (B) with
     respect  to  each  Construction Advance,  a  Requisition
     identifying (among other things) the Property  to  which
     such Construction Advance relates.

           (b)   Each Requisition shall:  (i) be irrevocable,
     (ii) request funds in an amount that is not in excess of
     the  total  aggregate of the Available Commitments  plus
     the Available Holder Commitments at such time, and (iii)
     request  that the Holders make Holder Advances and  that
     the Lenders make Loans to the Lessor for the payment  of
     Transaction Expenses, Property Acquisition Costs (in the
     case  of an Acquisition Advance) or other Property Costs
     (in  the  case  of  a  Construction Advance)  that  have
     previously  been incurred or are to be incurred  on  the
     date of such Advance to the extent such were not subject
     to a prior Requisition, in each case as specified in the
     Requisition.

           (c)  Subject to the satisfaction of the conditions
     precedent  set  forth  in  Sections  5.3  or   5.4,   as
     applicable, on each Property Closing Date or the date on
     which  the  Construction  Advance  is  to  be  made,  as
     applicable,  (i) the Lenders shall make Loans  based  on
     their respective Lender Commitments to the Lessor in  an
     aggregate amount equal to ninety-seven percent (97%)  of
     the   Requested  Funds  specified  in  any   Requisition
     (ratably between the Tranche A Lenders and the Tranche B
     Lenders with the Tranche A Lenders funding seventy-seven
     percent  (77%) of the Requested Funds and the Tranche  B
     Lenders  funding twenty percent (20%) of  the  Requested
     Funds), up to an aggregate principal amount equal to the
     aggregate of the Available Commitments, (ii) each Holder
     shall   make  a  Holder  Advance  based  on  its  Holder
     Commitment in an amount such that the aggregate  of  all
     Holder Advances at such time shall be three percent (3%)
     of  the balance of the Requested Funds specified in such
     Requisition,  up to the aggregate advanced amount  equal
     to  the  aggregate of the Available Holder  Commitments;
     and  (iii)  the  total amount of such Loans  and  Holder
     Advances  made  on such date shall (x) be  used  by  the
     Lessor  to  pay  Property  Costs  including  Transaction
     Expenses  within three (3) Business Days of the  receipt
     by  the Lessor of such Advance or (y) be advanced by the
     Lessor  on  the  date of such Advance to the  applicable
     Construction  Agent  or  the applicable  Lessee  to  pay
     Property Costs, as applicable.  Notwithstanding that the
     Operative  Agreements  state  that  Advances  shall   be
     directed  to the Lessor, each Advance shall in  fact  be
     directed  to the Construction Agent that has executed  a
     Lease Supplement respecting the applicable Property (for
     the   benefit  of  the  Lessor)  and  applied  by   such
     Construction  Agent  (for the  benefit  of  the  Lessor)
     pursuant to the requirements imposed on the Lessor under
     the Operative Agreements.

           (d)   With respect to an Advance obtained  by  the
     Lessor  to  pay  for  Property Costs and/or  Transaction
     Expenses or other costs payable under Section 7.1 hereof
     and  not expended by the Lessor for such purpose on  the
     date of such Advance, such amounts shall be held by  the
     Agent  until  the applicable closing date  or,  if  such
     closing  date  does not occur within three (3)  Business
     Days of the date of the Agent's receipt of such Advance,
     shall  be  applied regarding the applicable  Advance  to
     repay  the Lenders and the Holders and, subject  to  the
     terms  hereof, and of the Credit Agreement and the Trust
     Agreement,  shall remain available for future  Advances.
     Any  such amounts held by the Agent shall be subject  to
     the  lien  of  the Security Agreement and  shall  accrue
     interest and Holder Yield from the date any such  amount
     is advanced to the Agent.

           (e)   All  Operative Agreements which  are  to  be
     delivered to the Lessor, the Agent, the Lenders  or  the
     Holders  shall be delivered to the Agent, on  behalf  of
     the  Lessor, the Agent, the Lenders or the Holders,  and
     such  items  (except for Notes, Certificates,  Bills  of
     Sale,  the  Ground  Leases and chattel paper  originals,
     with  respect to which in each case there shall be  only
     one   original)   shall  be  delivered  with   originals
     sufficient  for the Lessor, the Agent, each  Lender  and
     each  Holder.  All other items which are to be delivered
     to  the  Lessor, the Agent, the Lenders or  the  Holders
     shall  be  delivered  to the Agent,  on  behalf  of  the
     Lessor, the Agent, the Lenders or the Holders, and  such
     other  items shall be held by the Agent.  To the  extent
     any  such other items are requested in writing from time
     to  time  by  the Lessor, any Lender or any Holder,  the
     Agent  shall  provide a copy of such item to  the  party
     requesting it.

           (f)  Notwithstanding the completion of any closing
     under  this Agreement pursuant to Sections 5.3  or  5.4,
     each  condition precedent in connection  with  any  such
     closing  may  be  subsequently  enforced  by  the  Agent
     (unless such has been expressly waived in writing by the
     Agent).

          5.3. Conditions Precedent for  the Lessor, the
          Agent, the Lenders and the Holders Relating to
          the Initial Closing Date and the Advance of
          Funds for the Acquisition of a Property.

      The obligations (i) on the Initial Closing Date of  the
Lessor, the Agent, the Lenders and the Holders to enter  into
the  transactions  contemplated by this Agreement,  including
without limitation the obligation to execute and deliver  the
applicable Operative Agreements to which each is a  party  on
the Initial Closing Date, (ii) on the Initial Closing Date of
the  Holders to make Holder Advances, and of the  Lenders  to
make  Loans  in  order  to  pay Transaction  Expenses,  fees,
expenses and other disbursements payable by the Lessor  under
Section  7.1(a)  of this Agreement and (iii)  on  a  Property
Closing Date for the purpose of providing funds to the Lessor
necessary to pay the Transaction Expenses, fees, expenses and
other  disbursements  payable by  the  Lessor  under  Section
7.1(b)  of  this Agreement and to acquire or ground  lease  a
Property  (an  "Acquisition Advance"),  in  each  case  (with
regard to the foregoing Sections 5.3(i), (ii) and (iii))  are
subject  to  the  satisfaction or  waiver  of  the  following
conditions precedent on or prior to the Initial Closing  Date
or  the applicable Property Closing Date, as the case may  be
(to the extent such conditions precedent require the delivery
of  any agreement, certificate, instrument, memorandum, legal
or  other  opinion,  appraisal, commitment,  title  insurance
commitment, lien report or any other document of any kind  or
type, such shall be in form and substance satisfactory to the
Agent,  in  its  reasonable discretion;  notwithstanding  the
foregoing, the obligations of each party shall not be subject
to  any  conditions contained in this Section 5.3  which  are
required to be performed by such party):

           (a)   the correctness in all material respects  of
     the  representations and warranties of  the  parties  to
     this  Agreement contained herein, in each of  the  other
     Operative  Agreements  and  each  certificate  delivered
     pursuant  to any Operative Agreement (including  without
     limitation   the   Incorporated   Representations    and
     Warranties) on each such date;

           (b)   the performance in all material respects  by
     the  parties  to  this  Agreement  of  their  respective
     agreements  contained herein and in the other  Operative
     Agreements to be performed by them on or prior  to  each
     such date;

          (c)  the Agent shall have received a fully executed
     counterpart   copy  of  the  Requisition,  appropriately
     completed;

           (d)  title to each such Property shall conform  to
     the  representations and warranties set forth in Section
     6.2(l) hereof;

           (e)   the Construction Agent that is a party to  a
     Lease  Supplement  respecting such  applicable  Property
     shall  have  delivered  to the  Agent  a  good  standing
     certificate  for  the Construction Agent  in  the  state
     where  each such Property is located (but only  if  such
     Construction Agent is required to qualify to do business
     in  such  state under the laws of such state), the  Deed
     with  respect to the Land and existing Improvements  (if
     any), a copy of the Ground Lease (if any), and a copy of
     the Bill of Sale with respect to the Equipment (if any),
     respecting  such of the foregoing as are being  acquired
     or  ground leased on each such date with the proceeds of
     the  Loans  and  Holder  Advances  or  which  have  been
     previously  acquired or ground leased with the  proceeds
     of the Loans and Holder Advances and such Land, existing
     Improvements  (if any) and Equipment (if any)  shall  be
     located in an Approved State;

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

           (g)   the Construction Agent that is a party to  a
     Lease  Supplement  respecting such  applicable  Property
     shall  have  delivered  to  the  Agent  title  insurance
     commitments  to  issue  policies  respecting  each  such
     Property,  with  such endorsements as  the  Agent  deems
     necessary in its reasonable discretion, in favor of  the
     Lessor  and  the  Agent from a title  insurance  company
     acceptable  to  the  Agent, but  only  with  such  title
     exceptions thereto as are acceptable to the Agent in its
     reasonable discretion;

           (h)   the Construction Agent that is a party to  a
     Lease  Supplement  respecting such  applicable  Property
     shall have delivered to the Agent an environmental  site
     assessment respecting each such Property prepared by  an
     independent  recognized professional acceptable  to  the
     Agent   and  evidencing  no  pre-existing  environmental
     condition  with respect to which there is  more  than  a
     remote risk of loss;

           (i)   the Construction Agent that is a party to  a
     Lease  Supplement  respecting such  applicable  Property
     shall have delivered to the Agent a survey (with a flood
     hazard  certification)  respecting  each  such  Property
     prepared  by  (i) an independent recognized professional
     acceptable  to  the  Agent and  (ii)  in  a  manner  and
     including such information as is reasonably required  by
     the Agent;

           (j)   unless  such an opinion has previously  been
     delivered  with  respect  to a particular  state  for  a
     particular  Construction Agent, the  Construction  Agent
     shall  have caused to be delivered to the Agent a  legal
     opinion  in  substantially the form attached  hereto  as
     EXHIBIT  B  or  in  such  other form  as  is  reasonably
     acceptable to the Agent with respect to local  law  real
     property issues respecting the state in which each  such
     Property is located addressed to the Lessor, the  Agent,
     the Lenders and the Holders, from counsel located in the
     state  where each such Property is located, prepared  by
     counsel reasonably acceptable to the Agent;

          (k)  the Agent shall be satisfied in its reasonable
     discretion  that the acquisition, ground leasing  and/or
     holding of each such Property and the execution  of  the
     Mortgage  Instrument  and the other  Security  Documents
     will  not materially and adversely affect the rights  of
     the  Lessor, the Agent, the Holders or the Lenders under
     or with respect to the Operative Agreements;

           (l)   the applicable Construction Agent shall have
     delivered to the Agent invoices for, or other reasonably
     satisfactory   evidence  of,  the  various   Transaction
     Expenses  and  other  fees, expenses  and  disbursements
     referenced  in  Sections  7.1(a)  or  7.1(b)   of   this
     Agreement, as appropriate;

           (m)   the Construction Agent that is a party to  a
     Lease  Supplement  respecting  any  applicable  Property
     shall  have  caused  to  be delivered  to  the  Agent  a
     Mortgage  Instrument  (in such  form  as  is  reasonably
     acceptable to the Agent, with revisions as necessary  to
     conform  to  applicable  state  law),  Lessor  Financing
     Statements  and  Lender Financing Statements  respecting
     each such Property, all fully executed and in recordable
     form;

           (n)   the Lessee (or Eligible Lessee, as the  case
     may  be)  shall have delivered to the Agent with respect
     to  each  such  Property (i) a Lease  Supplement  and  a
     memorandum (or short form lease) regarding the Lease and
     such  Lease  Supplement (such memorandum or  short  form
     lease  to be substantially in the form attached  to  the
     Lease  as  EXHIBIT  B  or  in  such  other  form  as  is
     reasonably  acceptable to the Agent, with  modifications
     as  necessary to conform to applicable state law, and in
     form  suitable for recording) and (ii) a Lessee  Joinder
     in  the  form  attached  hereto as Schedule  5.3(n)(ii);
     provided, however, that no such Lessee Joinder shall  be
     required if the Lessee with respect to such Property has
     previously delivered a Lessee Joinder in connection with
     any  other  Property  or  if  the  Agent  is  reasonably
     satisfied that such Person is otherwise a party  to  the
     Operative  Agreements as a Lessee and as a  Construction
     Agent  by means of execution of the applicable Operative
     Agreements as of the Initial Closing Date;

           (o)  with respect to each Acquisition Advance, the
     sum  of  the  Available Commitment  plus  the  Available
     Holder  Commitment (after deducting the Unfunded Amount,
     if  any,  and  after  giving effect to  the  Acquisition
     Advance)  will be sufficient to pay all amounts  payable
     therefrom  in respect to all Properties then subject  to
     the Operative Agreements;

           (p)   if any such Property is subject to a  Ground
     Lease,  the  Construction Agent  with  respect  to  such
     Property shall have caused a lease memorandum (or  short
     form lease) to be delivered to the Agent for such Ground
     Lease  and, if requested by the Agent, a landlord waiver
     and a mortgagee waiver (in each case, in such form as is
     acceptable to the Agent);

           (q)   counsel (reasonably acceptable to the Agent)
     for the ground lessor of each such Property subject to a
     Ground Lease shall have issued to the Lessor, the Agent,
     the Lenders and the Holders, its opinion;

           (r)   the Construction Agent that is a party to  a
     Lease  Supplement  respecting  any  applicable  Property
     shall   have   delivered  to  the  Agent  a  preliminary
     Construction   Budget  for  each   such   Property,   if
     applicable;

           (s)   the Construction Agent that is a party to  a
     Lease  Supplement  respecting  any  applicable  Property
     shall  have provided evidence to the Agent of  insurance
     with  respect to each such Property as provided  in  the
     Lease;

           (t)   the Construction Agent that is a party to  a
     Lease  Supplement  respecting  any  applicable  Property
     shall  have caused an as-built Appraisal regarding  each
     such  Property  to  be provided to  the  Agent  from  an
     appraiser reasonably satisfactory to the Agent;

           (u)   the  Credit Parties shall cause (i)  Uniform
     Commercial  Code  lien searches, tax lien  searches  and
     judgment lien searches regarding each Credit Party to be
     conducted  (and  copies thereof to be delivered  to  the
     Agent) in such jurisdictions as determined by the  Agent
     by  a nationally recognized search company acceptable to
     the  Agent  (unless such searches in such  jurisdictions
     with   respect  to  the  applicable  Credit  Party  have
     previously  been  provided to the Agent)  and  (ii)  the
     liens  referenced  in  such  lien  searches  which   are
     objectionable  to  the  Agent to be  either  removed  or
     otherwise handled in a manner satisfactory to the Agent;

            (v)   all  taxes,  fees  and  other  charges   in
     connection  with  the  execution,  delivery,  recording,
     filing  and  registration  of the  Operative  Agreements
     and/or documents related thereto shall have been paid or
     provisions for such payment shall have been made to  the
     satisfaction of the Agent;

          (w)  in the reasonable opinion of the Agent and its
     respective counsel, the transactions contemplated by the
     Operative  Agreements do not and will  not  subject  the
     Lessor,  the  Lenders, the Agent or the Holders  to  any
     adverse  regulatory prohibitions, constraints, penalties
     or fines;

          (x)  each of the Operative Agreements to be entered
     into  on  such  date  shall have been  duly  authorized,
     executed and delivered by the parties thereto, and shall
     be  in  full force and effect, and the Agent shall  have
     received  a fully executed copy of each of the Operative
     Agreements;

           (y)   since  the  date of the most recent  audited
     financial  statements  (as  delivered  pursuant  to  the
     requirements  of  the Lessee Credit  Agreement)  of  the
     Guarantor,  there  shall not have  occurred  any  event,
     condition  or state of facts which shall have  or  could
     reasonably  be  expected  to  have  a  Material  Adverse
     Effect, other than as specifically contemplated  by  the
     Operative Agreements;

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

          (aa) as of the Initial Closing Date only, the Agent
     shall  have received (i) a certificate of the  Secretary
     or an Assistant Secretary of each Credit Party, dated as
     of  the  Initial Closing Date (unless such Credit  Party
     was  not a Credit Party on the Initial Closing Date,  in
     which  case such certificate shall be dated  as  of  the
     date  such  Credit  Party  becomes  a  Credit  Party  by
     execution  of  a Lessee Joinder), in the  form  attached
     hereto  as  EXHIBIT  D  or in  such  other  form  as  is
     reasonably   acceptable  to  the  Agent  attaching   and
     certifying  as to (1) the resolutions of  the  Board  of
     Directors  of  such  Credit Party duly  authorizing  the
     execution, delivery and performance by such Credit Party
     of  each of the Operative Agreements to which it  is  or
     will  be  a party, (2) the articles of incorporation  of
     such  Credit Party certified as of a recent date by  the
     Secretary of State of its state of incorporation and its
     by-laws  and (3) the incumbency and signature of persons
     authorized  to  execute and deliver on  behalf  of  such
     Credit Party the Operative Agreements to which it is  or
     will be a party and (ii) a good standing certificate (or
     local  equivalent) from the appropriate  office  of  the
     respective   states   where   such   Credit   Party   is
     incorporated and where the principal place  of  business
     of  such Credit Party is located as to its good standing
     in each such state.  To the extent any Credit Party is a
     partnership, a limited liability company or is otherwise
     organized,  such Person shall deliver to the  Agent  (in
     form and substance satisfactory to the Agent) as of  the
     Initial Closing Date (unless such Credit Party was not a
     Credit Party on the Initial Closing Date, in which  case
     such  as of the date such Credit Party becomes a  Credit
     Party   by  execution  of  a  Lessee  Joinder)   (A)   a
     certificate  regarding  such Person  and  any  corporate
     general  partners  covering  the  matters  described  in
     EXHIBIT  D  and  (B)  a  good  standing  certificate,  a
     certificate of limited partnership or a local equivalent
     of either the foregoing as applicable;

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

          (cc) as of the Initial Closing Date only, the Agent
     shall  have received (i) a certificate of the Secretary,
     an  Assistant Secretary, Trust Officer or Vice President
     of  the  Trust  Company in the form attached  hereto  as
     EXHIBIT  F  or  in  such  other form  as  is  reasonably
     acceptable to the Agent, attaching and certifying as  to
     (A)   the  signing  resolutions  duly  authorizing   the
     execution,  delivery and performance by  the  Lessor  of
     each  of the Operative Agreements to which it is or will
     be  a  party, (B) its articles of association  or  other
     equivalent  charter documents and its  by-laws,  as  the
     case  may  be,  certified as of  a  recent  date  by  an
     appropriate  officer of the Trust Company  and  (C)  the
     incumbency  and  signature  of  persons  authorized   to
     execute   and  deliver  on  its  behalf  the   Operative
     Agreements  to  which  it is a party  and  (ii)  a  good
     standing  certificate from the Office of the Comptroller
     of the Currency;

           (dd)  as of the Initial Closing Date only, counsel
     for the Lessor acceptable to the Agent shall have issued
     to  the  Lessee, the Holders, the Lenders and the  Agent
     its opinion in the form attached hereto as EXHIBIT G  or
     in  such other form as is reasonably acceptable  to  the
     Agent; and

          (ee) as of the Initial Closing Date or, in the case
     of a Lessee and Construction Agent that was not a Credit
     Party  as  of the Initial Closing Date, as of  the  date
     such Credit Party becomes a Credit Party by execution of
     a  Lessee  Joinder, the Guarantor and/or the  applicable
     Construction Agent shall have caused to be delivered  to
     the  Agent  a  legal opinion in substantially  the  form
     attached hereto as EXHIBIT H or in such other form as is
     reasonably  acceptable to the Agent,  addressed  to  the
     Lessor,  the  Agent, the Lenders and the  Holders,  from
     counsel reasonably acceptable to the Agent.

          5.4. Conditions Precedent for the Lessor, the
          Agent, the Lenders and the Holders Relating to the
          Advance of Funds after the Acquisition Advance.

      The obligations of the Holders to make Holder Advances,
and the Lenders to make Loans in connection with all requests
for Advances subsequent to the acquisition of a Property (and
to  pay  the Transaction Expenses, fees, expenses  and  other
disbursements payable by the Lessor under Section 7.1 of this
Agreement  in  connection  therewith)  are  subject  to   the
satisfaction or waiver of the following conditions  precedent
(to the extent such conditions precedent require the delivery
of  any agreement, certificate, instrument, memorandum, legal
or  other  opinion,  appraisal, commitment,  title  insurance
commitment, lien report or any other document of any kind  or
type, such shall be in form and substance satisfactory to the
Agent,  in  its  reasonable discretion;  notwithstanding  the
foregoing, the obligations of each party shall not be subject
to  any  conditions contained in this Section 5.4  which  are
required to be performed by such party):

           (a)   the correctness in all material respects  on
     such  date of the representations and warranties of  the
     parties  to this Agreement contained herein, in each  of
     the  other  Operative Agreements and in each certificate
     delivered pursuant to any Operative Agreement (including
     without limitation the Incorporated Representations  and
     Warranties);

           (b)   the performance in all material respects  by
     the  parties  to  this  Agreement  of  their  respective
     agreements  contained herein and in the other  Operative
     Agreements to be performed by them on or prior  to  each
     such date;

          (c)  the Agent shall have received a fully executed
     counterpart of the Requisition, appropriately completed;

           (d)  based upon the applicable Construction Budget
     which  shall satisfy the requirements of this Agreement,
     the  Available  Commitments  and  the  Available  Holder
     Commitment (after deducting the Unfunded Amount) will be
     sufficient to complete the Improvements;

            (e)   there  shall  not  have  occurred  and   be
     continuing any Default or Event of Default under any  of
     the  Operative  Agreements and no Default  or  Event  of
     Default under any of the Operative Agreements will  have
     occurred after giving effect to the Construction Advance
     requested by the applicable Requisition;

           (f)   the  title  insurance  policy  delivered  in
     connection with the requirements of Section 5.3(g) shall
     provide  for  (or  shall  be endorsed  to  provide  for)
     insurance  in  an amount at least equal to  the  maximum
     total Property Cost indicated by the Construction Budget
     referred to in subparagraph (d) above and there shall be
     no  title change or exception objectionable to the Agent
     in the exercise of its reasonable discretion;

           (g)   the  Construction Agent that has executed  a
     Lease  Supplement  respecting  any  applicable  Property
     shall  have delivered to the Agent copies of  the  Plans
     and Specifications for the applicable Improvements;

           (h)   the  Construction Agent that has executed  a
     Lease  Supplement  respecting  any  applicable  Property
     shall have delivered to the Agent invoices for, or other
     reasonably  satisfactory evidence  of,  any  Transaction
     Expenses  and  other  fees, expenses  and  disbursements
     referenced  in Section 7.1(b) that are to be  paid  with
     the Advance;

           (i)   the  Construction Agent that has executed  a
     Lease  Supplement  respecting  any  applicable  Property
     shall  have delivered, or caused to be delivered to  the
     Agent,  invoices,  Bills  of  Sale  or  other  documents
     reasonably  acceptable to the Agent, in each  case  with
     regard  to  any  Equipment or other components  of  such
     Property  then being acquired with the proceeds  of  the
     Loans  and  Holder  Advances and naming  the  Lessor  as
     purchaser and transferee;

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

           (k)   since  the  date of the most recent  audited
     financial  statements of the Guarantor, there shall  not
     have  occurred  any event, condition or state  of  facts
     which shall have or could reasonably be expected to have
     a  Material  Adverse Effect, other than as  specifically
     contemplated by the Operative Agreements; and

          (l)  in the reasonable opinion of the Agent and its
     counsel,  the transactions contemplated by the Operative
     Agreements  do not and will not subject the Lessor,  the
     Lenders,  the  Agent  or  the  Holders  to  any  adverse
     regulatory   prohibitions,  constraints,  penalties   or
     fines.

          5.5. Additional Reporting and Delivery Requirements
          on Completion Date and on Construction Period
          Termination Date.

      On  or  prior to the Completion Date for each Property,
the  Construction Agent that has executed a Lease  Supplement
respecting  such  Property shall  deliver  to  the  Agent  an
Officer's Certificate in the form attached hereto as  EXHIBIT
I  or  in such other form as is reasonably acceptable to  the
Agent  specifying (a) the address for such Property, (b)  the
Completion Date for such Property, (c) the aggregate Property
Cost  for such Property, (d) detailed, itemized documentation
supporting  the asserted Property Cost figures and  (e)  that
all  representations and warranties of the Construction Agent
and  Lessee  in  each  of the Operative Agreements  and  each
certificate  delivered  pursuant thereto  (including  without
limitation  the Incorporated Representations and  Warranties)
are  true  and  correct in all material respects  as  of  the
Completion  Date.  The Agent shall have the right to  contest
the  information  contained  in such  Officer's  Certificate.
Furthermore,  on  or prior to the Completion  Date  for  each
Property,  the Construction Agent that has executed  a  Lease
Supplement respecting such Property shall deliver or cause to
be delivered to the Agent (unless previously delivered to the
Agent) originals of the following, each of which shall be  in
form and substance acceptable to the Agent, in its reasonable
discretion:  (v) a title insurance endorsement regarding  the
title  insurance  policy  delivered in  connection  with  the
requirements of Section 5.3(g), but only to the  extent  such
endorsement  is  necessary to provide  for  insurance  in  an
amount at least equal to the maximum total Property Cost and,
if endorsed, the endorsement shall not include a title change
or  exception  objectionable to the Agent in  its  reasonable
discretion;  (w)  an as-built survey for such  Property,  (x)
insurance  certificates respecting such Property as  required
hereunder and under the Lease Agreement, (y) if requested  by
the  Agent,  amendments  to the Lessor  Financing  Statements
executed  by  the  appropriate parties and (z)  an  Appraisal
regarding such Property; provided, however, such an Appraisal
shall  not  be required if, as of such Completion  Date,  the
Agent  has  previously  received  Appraisal(s)  pursuant   to
Section  5.3(t) for Properties that are then subject  to  the
Lease  and  that  have an aggregate value (as established  by
such  Appraisal(s)) of at least $8,000,000.  In addition,  on
the  Completion Date for such Property the Construction Agent
that has executed a Lease Supplement respecting such Property
covenants  and  agrees that the recording  fees,  documentary
stamp  taxes  or  similar  amounts required  to  be  paid  in
connection  with the related Mortgage Instrument  shall  have
been  paid in an amount required by applicable law,  subject,
however, to the obligations of the Lenders and the Holders to
fund  such  costs to the extent required pursuant to  Section
7.1.

          5.6. The Construction Agent Delivery of
          Construction Budget Modifications.

      The  Construction  Agent  that  has  executed  a  Lease
Supplement respecting such Property covenants and  agrees  to
deliver  to  the  Agent  each  month  notification   of   any
modification   to  any  Construction  Budget  regarding   any
Property if such modification increases the cost to construct
such  Property;  provided  no  Construction  Budget  may   be
increased  unless (a) the title insurance policies referenced
in   Section  5.3(g)  are  also  modified  or  endorsed,   if
necessary,  to  provide  for  insurance  in  an  amount  that
satisfies  the  requirements  of  Section  5.4(f)   of   this
Agreement  and (b) after giving effect to any such amendment,
the  Construction  Budget  remains  in  compliance  with  the
requirements of Section 5.4(d) of this Agreement.

     5.7. Restrictions on Liens.

      On  each Property Closing Date, the Construction  Agent
that is party to a Lease Supplement respecting any applicable
Property  shall  cause  each such Property  acquired  by  the
Lessor  on such date to be free and clear of all Liens except
those  referenced in Sections 6.2(r)(i) and  6.2(r)(ii).   On
each  date any such Property is either sold to a third  party
in  accordance with the terms of the Operative Agreements or,
pursuant  to Section 22.1(a) of the Lease Agreement, retained
by  the  Lessor, the Lessee shall cause such Property  to  be
free and clear of all Liens (other than Lessor Liens and such
other  Liens that are expressly set forth as title exceptions
on  the  title  commitment issued under Section  5.3(g)  with
respect to such Property, to the extent such title commitment
has been approved by the Agent).

     5.8. Payments.

      All  payments of principal, interest, Holder  Advances,
Holder Yield and other amounts to be made by any Credit Party
under  this  Agreement  or  any  other  Operative  Agreements
(excluding Excepted Payments which shall be paid directly  to
the  party to whom such payments are owed) shall be  made  to
the Agent at the office designated by the Agent from time  to
time  in  Dollars and in immediately available funds, without
setoff,   deduction,  or  counterclaim.    Subject   to   the
definition  of  "Interest  Period"  in  Appendix  A  attached
hereto,  whenever  any payment under this  Agreement  or  any
other Operative Agreements shall be stated to be due on a day
that  is not a Business Day, such payment may be made on  the
next  succeeding Business Day, and such extension of time  in
such  case  shall be included in the computation of interest,
Holder  Yield  and  fees payable pursuant  to  the  Operative
Agreements, as applicable and as the case may be.

     Notwithstanding any provision in this Agreement  or  any
other Operative Agreement to the contrary, payments which are
to  be  made  (a) to, or for the benefit of, any  Lessee  may
instead  be  made  to the Guarantor, and the Guarantor  shall
promptly  pay  such  amount to or  for  the  benefit  of  the
applicable Lessee and (b) by any Lessee may instead  be  made
by  the  Guarantor (with such attribution and detail relating
to  the  applicable Lessee and any such amounts paid  as  the
Agent shall reasonably require).

      5.9.  Maintenance  of  each Lessee  as  a  Wholly-Owned
      Entity.

     From  the Initial Closing Date and thereafter until such
time  as  all  obligations of all Credit  Parties  under  the
Operative  Agreements have been satisfied  and  performed  in
full,  the  Guarantor shall retain each Lessee as  a  Wholly-
Owned Entity.

     5.10.     Direct Obligations of Guarantor.

      In  addition to the guaranty obligations set  forth  in
Section  6B, the Guarantor hereby agrees to perform  any  and
all  direct  obligations  (including without  limitation  any
direct   payment  obligations)  imposed  on   the   Guarantor
hereunder or under any other Operative Agreement.

      5.11.    Additional Provisions Regarding
      Increase/Reduction of Commitments and Holder
      Commitments.

      Notwithstanding any provision to the contrary herein or
in  any other Operative Agreement, the parties agree that the
Commitments  and the Holder Commitments, respectively,  shall
be  automatically  reduced  (on a  pro  rata  basis)  by  the
aggregate amount of commitments by the lenders under the  New
Jersey   ELLF  (hereinafter  defined)  to  make   loans   and
commitments by the certificate or other equity holders  under
the  New  Jersey ELLF (hereinafter defined) to make  advances
pursuant  to  any  written agreement that  may  hereafter  be
entered  into  among the Guarantor or any of its Subsidiaries
and  the Lenders and Holders with respect to an ELLF or other
financing by the Lenders and Holders in favor of, or for  the
benefit of, the Guarantor or any of its Subsidiaries relating
to that certain parcel of real property located in Elizabeth,
New  Jersey and more particularly described on Schedule  5.11
attached hereto (such ELLF or other financing may be referred
to  herein  as  the  "New Jersey ELLF");  provided,  however,
during  the  Commitment Period, upon the completion  of  such
property or other termination or permanent reduction  of  the
commitments of the lenders to make loans under the New Jersey
ELLF  and  of  the  commitments of the certificate  or  other
equity  holders  to make advances under the New  Jersey  ELLF
(other  than as a result of a default or event of default  by
the  Guarantor  or  any of its Subsidiaries thereunder),  the
Commitments    and   the   Holder   Commitments    hereunder,
respectively, shall be increased (on a pro rata basis) by  an
amount  equal  to  the remaining unused  commitments  of  the
lenders  to  make  loans under the New Jersey  ELLF  and  the
remaining  unused  commitments of the  certificate  or  other
equity holders to make advances under the New Jersey ELLF.

              SECTION 6.  REPRESENTATIONS AND WARRANTIES.

     6.1. Representations and Warranties of the Borrower.

     Effective as of the Initial Closing Date and the date of
each  Advance,  the Trust Company in its individual  capacity
and as the Borrower, as indicated, represents and warrants to
each  of the other parties hereto as follows, provided,  that
the  representations in the following paragraphs (h), (j) and
(k) are made solely in its capacity as the Borrower:

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

           (b)   The  execution, delivery and performance  of
     each  Operative Agreement to which it is or  will  be  a
     party,  either in its individual capacity  or  (assuming
     due  authorization, execution and delivery of the  Trust
     Agreement by the Holders) as the Owner Trustee,  as  the
     case  may  be, has been duly authorized by all necessary
     action  on  its  part  and  neither  the  execution  and
     delivery   thereof,   nor  the   consummation   of   the
     transactions contemplated thereby, nor compliance by  it
     with any of the terms and provisions thereof (i) does or
     will  require any approval or consent of any trustee  or
     holders of any of its indebtedness or obligations,  (ii)
     does  or  will contravene any Legal Requirement relating
     to  its  banking  or trust powers, (iii)  does  or  will
     contravene or result in any breach of or constitute  any
     default  under, or result in the creation  of  any  Lien
     upon  any of its property under, (A) its charter or  by-
     laws,  or (B) any indenture, mortgage, chattel mortgage,
     deed of trust, conditional sales contract, bank loan  or
     credit  agreement  or other agreement or  instrument  to
     which it is a party or by which it or its properties may
     be  bound  or  affected,  which  contravention,  breach,
     default  or  Lien under clause (B) would materially  and
     adversely affect its ability, in its individual capacity
     or  as  the  Owner  Trustee, to perform its  obligations
     under the Operative Agreements to which it is a party or
     (iv) does or will require any Governmental Action by any
     Governmental Authority regulating its banking  or  trust
     powers;

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

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

           (e)   It, either in its individual capacity or  as
     the  Owner Trustee, has not assigned or transferred  any
     of  its  right, title or interest in or under the Lease,
     the Agency Agreement or its interest in any Property  or
     any  portion  thereof,  except in  accordance  with  the
     Operative Agreements;

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

           (g)   Except  as  otherwise  contemplated  in  the
     Operative  Agreements, the proceeds  of  the  Loans  and
     Holder  Advances  shall  not be  applied  by  the  Owner
     Trustee,  either in its individual capacity  or  as  the
     Owner  Trustee, for any purpose other than the  purchase
     and/or   lease   of  the  Properties,  the  acquisition,
     installation   and   testing  of  the   Equipment,   the
     construction   of  Improvements  and  the   payment   of
     Transaction  Expenses and the fees, expenses  and  other
     disbursements referenced in Sections 7.1(a)  and  7.1(b)
     of  this  Agreement, in each case which accrue prior  to
     the  Rent Commencement Date with respect to a particular
     Property;

           (h)   Neither  the Owner Trustee  nor  any  Person
     authorized by the Owner Trustee to act on its behalf has
     offered or sold any interest in the Trust Estate or  the
     Notes,  or  in  any  similar  security  relating  to   a
     Property,  or in any security the offering of which  for
     the purposes of the Securities Act would be deemed to be
     part  of  the  same  offering as  the  offering  of  the
     aforementioned securities to, or solicited any offer  to
     acquire any of the same from, any Person other than,  in
     the  case of the Notes, the Agent, and neither the Owner
     Trustee  nor any Person authorized by the Owner  Trustee
     to  act  on its behalf will take any action which  would
     subject,  as a direct result of such action  alone,  the
     issuance or sale of any interest in the Trust Estate  or
     the  Notes  to  the  provisions  of  Section  5  of  the
     Securities  Act  or  require the  qualification  of  any
     Operative  Agreement under the Trust  Indenture  Act  of
     1939, as amended;

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

           (j)   The Owner Trustee is not engaged principally
     in,  and  does  not  have as one (1)  of  its  important
     activities,  the business of extending  credit  for  the
     purpose  of  purchasing  or carrying  any  margin  stock
     (within  the  meaning of Regulation U of  the  Board  of
     Governors  of the Federal Reserve System of  the  United
     States), and no part of the proceeds of the Loans or the
     Holder Advances will be used by it to purchase or  carry
     any  margin stock or to extend credit to others for  the
     purpose of purchasing or carrying any such margin  stock
     or  for  any  purpose that violates, or is  inconsistent
     with,  the provisions of Regulations T, U, or X  of  the
     Board of Governors of the Federal Reserve System of  the
     United States;

           (k)   The  Owner  Trustee is  not  an  "investment
     company"  or  a  company controlled  by  an  "investment
     company"  within  the meaning of the Investment  Company
     Act;

           (l)  Each Property is free and clear of all Lessor
     Liens  attributable to the Owner Trustee, either in  its
     individual capacity or as the Owner Trustee; and

           (m)  The Owner Trustee, in its trust capacity,  is
     not  a party to any documents, instruments or agreements
     other  than  the  Operative Agreements executed  by  the
     Owner Trustee, in its trust capacity.

     6.2. Representations and Warranties of the Construction
     Agent and the Lessee.

      Effective as of the Initial Closing Date, the  date  of
each  Advance  and  the Rent Commencement Date,  each  Credit
Party  represents and warrants to each of the  other  parties
hereto that:

            (a)    The   Incorporated   Representations   and
     Warranties  are  true  and correct (unless  such  relate
     solely  to  an earlier point in time) and the  Guarantor
     has  delivered to the Agent the financial statements and
     other  reports referred to in Section 7.1 of the  Lessee
     Credit Agreement;

           (b)   (i) Each Credit Party is a corporation  duly
     organized  and  validly existing and  in  good  standing
     under  the  laws  of the state of its incorporation  and
     each  Credit Party has the power and authority to  enter
     into  and  perform its obligations under  the  Operative
     Agreements to which it is a party and has the  corporate
     power  and  authority  to  act  as  the  Guarantor,  the
     Construction  Agent or the Lessee, as the case  may  be,
     and to enter into and perform the obligations under each
     of the other Operative Agreements to which it is a party
     or  will be a party and each other agreement, instrument
     and  document to be executed and delivered by it  on  or
     before  such  date in connection with or as contemplated
     by  each such Operative Agreement to which it is a party
     or will be a party;

               (ii) The execution and delivery by each Credit
          Party  of  this Agreement and the other  applicable
          Operative  Agreements  as  of  such  date  and  the
          performance  by each of each Credit  Party  of  its
          respective obligations under this Agreement and the
          other  applicable Operative Agreements  are  within
          the  corporate,  partnership or  limited  liability
          company (as the case may be) powers of each of  the
          Guarantor, such Construction Agent and such  Lessee
          (as the case may be), have been duly authorized  by
          all  necessary  corporate, partnership  or  limited
          liability  company (as the case may be)  action  on
          the   part   of   each  of  the   Guarantor,   such
          Construction Agent and such Lessee (as the case may
          be)  (including  without limitation  any  necessary
          shareholder  action), have been duly  executed  and
          delivered, have received all necessary governmental
          approval,  and do not and will not (A) violate  any
          Legal   Requirement  which  is   binding   on   the
          Guarantor, such Construction Agent, such Lessee  or
          any  of  their Subsidiaries (as the case  may  be),
          (B)  contravene or conflict with, or  result  in  a
          breach  of,  any  provision  of  the  Articles   of
          Incorporation,   By-Laws  or  other  organizational
          documents   of   any   of   the   Guarantor,   such
          Construction  Agent, such Lessee or  any  of  their
          Subsidiaries  (as  the  case  may  be)  or  of  any
          material agreement, indenture, instrument or  other
          document  which is binding on any of the Guarantor,
          such  Construction Agent, such  Lessee  or  any  of
          their  Subsidiaries (as the case  may  be)  or  (C)
          result  in,  or require, the creation or imposition
          of  any  Lien (other than pursuant to the terms  of
          the  Operative Agreements) on any asset of  any  of
          the Guarantor, such Construction Agent, such Lessee
          or any of their Subsidiaries (as the case may be);

           (c)   This  Agreement  and  the  other  applicable
     Operative Agreements to which any of the Credit  Parties
     are  parties,  executed prior to and as  of  such  date,
     constitute  the legal, valid and binding  obligation  of
     such  Credit  Party, as applicable, enforceable  against
     such  Credit  Party, as applicable, in  accordance  with
     their terms.  Each Credit Party has executed the various
     Operative  Agreements required to be  executed  by  such
     Credit Party as of such date;

           (d)   There  are  no  material actions,  suits  or
     proceedings  pending  or, to our  knowledge,  threatened
     against  any  Credit Party in any court  or  before  any
     Governmental Authority (nor has any order,  judgment  or
     decree  been  issued or proposed to  be  issued  by  any
     Governmental Authority to set aside, restrain, enjoin or
     prevent  the full performance of any Operative Agreement
     or   any  transaction  contemplated  thereby)  that  (i)
     concern  any Property or any Lessee's interest  therein,
     (ii)  question  the  validity or enforceability  of  any
     Operative Agreement or any transaction described in  the
     Operative  Agreements  or  (iii)  shall  have  or  could
     reasonably  be  expected  to  have  a  Material  Adverse
     Effect; provided, for purposes of disclosure, the Credit
     Parties  have  described  the litigation  set  forth  on
     EXHIBIT J;

           (e)   No  Governmental Action by any  Governmental
     Authority or other authorization, registration, consent,
     approval, waiver, notice or other action by,  to  or  of
     any  other  Person  pursuant to any  Legal  Requirement,
     contract, indenture, instrument or agreement or for  any
     other reason is required to authorize or is required  in
     connection   with   (i)  the  execution,   delivery   or
     performance  of  any  Operative  Agreement,   (ii)   the
     legality, validity, binding effect or enforceability  of
     any   Operative   Agreement,  (iii)   the   acquisition,
     ownership,    construction,    completion,    occupancy,
     operation, leasing or subleasing of any Property or (iv)
     any  Advance, in each case, except those which have been
     obtained and are in full force and effect;

           (f)  Upon the execution and delivery of each Lease
     Supplement  to  the Lease, (i) the Lessee party  thereto
     will  have unconditionally accepted the Property subject
     to  the  Lease  Supplement and will  have  a  valid  and
     subsisting leasehold interest in such Property,  subject
     only  to  the  Permitted Liens, and (ii) no offset  will
     exist  with  respect to any Rent or other  sums  payable
     under the Lease;

           (g)   Except  as  otherwise  contemplated  by  the
     Operative  Agreements, no Construction Agent  shall  use
     the  proceeds  of  any Holder Advance or  Loan  for  any
     purpose  other  than the purchase and/or  lease  of  the
     Properties with respect to which it has executed a Lease
     Supplement, the acquisition, installation and testing of
     the  Equipment, the construction of Improvements and the
     payment  of Transaction Expenses and the fees,  expenses
     and  other  disbursements referenced in Sections  7.1(a)
     and  7.1(b) of this Agreement, in each case which accrue
     prior to the Rent Commencement Date with respect to such
     Properties;

              (h)     All    information    heretofore     or
     contemporaneously herewith furnished by any Credit Party
     or  any  of  their Subsidiaries to the Agent, the  Owner
     Trustee, any Lender or any Holder for purposes of or  in
     connection  with  this  Agreement and  the  transactions
     contemplated  hereby  is, and all information  hereafter
     furnished by or on behalf of any Credit Party or any  of
     their Subsidiaries to the Agent, the Owner Trustee,  any
     Lender  or  any Holder pursuant hereto or in  connection
     herewith  will  be, true and accurate in every  material
     respect  on  the  date as of which such  information  is
     dated  or  certified, and such information, taken  as  a
     whole,  does not and will not omit to state any material
     fact  necessary  to make such information,  taken  as  a
     whole, not misleading;

           (i)  The office where the documents, accounts  and
     records  relating  to the transactions  contemplated  by
     this  Agreement and each other Operative  Agreement  are
     kept,  the  states  of  formation,  principal  place  of
     business and the chief executive offices of each  Credit
     Party are located at the places set forth in EXHIBIT K;

           (j)   The representations and warranties  of  each
     Credit   Party  set  forth  in  any  of  the   Operative
     Agreements are true and correct in all material respects
     on and as of each such date as if made on and as of such
     date.  Each Credit Party is in all material respects  in
     compliance with their respective obligations  under  the
     Operative  Agreements  and there exists  no  Default  or
     Event  of  Default under any of the Operative Agreements
     which  is continuing and which has not been cured within
     any cure period expressly granted under the terms of the
     applicable  Operative Agreement or otherwise  waived  in
     accordance with the applicable Operative Agreement.   No
     Default or Event of Default will occur under any of  the
     Operative  Agreements as a result of,  or  after  giving
     effect  to, the Advance requested by the Requisition  on
     the date of each Advance;

           (k)  As of each Property Closing Date, the date of
     each  subsequent Advance and the Rent Commencement  Date
     only, each Property then being financed consists of  (i)
     unimproved  Land or (ii) Land and existing  Improvements
     thereon  which  Improvements  are  either  suitable  for
     occupancy  at the time of acquisition or ground  leasing
     or  will be renovated and/or modified in accordance with
     the  terms of this Agreement.  Each Property then  being
     financed  is  located at the location set forth  on  the
     applicable Requisition, each of which is in one  (1)  of
     the Approved States;

           (l)  As of each Property Closing Date, the date of
     each  subsequent Advance and the Rent Commencement  Date
     only,  the  Lessor  has good and marketable  fee  simple
     title  to  each  Property, or, if any  Property  is  the
     subject of a Ground Lease, the Lessor will have a  valid
     ground leasehold interest enforceable against the ground
     lessor of such Property in accordance with the terms  of
     such  Ground  Lease,  subject only  to  (i)  such  Liens
     referenced in Sections 6.2(r)(i) and 6.2(r)(ii)  on  the
     applicable  Property Closing Date and  (ii)  subject  to
     Section   5.7,  Permitted  Liens  after  the  applicable
     Property Closing Date;

           (m)  As of each Property Closing Date, the date of
     each  subsequent Advance and the Rent Commencement  Date
     only,  no portion of any Property is located in an  area
     identified as a special flood hazard area by the Federal
     Emergency Management Agency or other applicable  agency,
     or if any such Property is located in an area identified
     as  a special flood hazard area by the Federal Emergency
     Management Agency or other applicable agency, then flood
     insurance  has  been  obtained  for  such  Property   in
     accordance  with  Section 14.2(b) of the  Lease  and  in
     accordance  with  the National Flood  Insurance  Act  of
     1968, as amended;

           (n)  As of each Property Closing Date, the date of
     each  subsequent Advance and the Rent Commencement  Date
     only,   each   Property  complies  with  all   Insurance
     Requirements  and  all standards of the  Guarantor  with
     respect to similar properties owned by the Guarantor;

           (o)  As of each Property Closing Date, the date of
     each  subsequent Advance and the Rent Commencement  Date
     only, each Property complies with all Legal Requirements
     as of such date (including without limitation all zoning
     and land use laws and Environmental Laws), except to the
     extent that failure to comply therewith, individually or
     in   the  aggregate,  shall  not  have  and  could   not
     reasonably  be  expected  to  have  a  Material  Adverse
     Effect;

           (p)  As of each Property Closing Date, the date of
     each  subsequent Advance and the Rent Commencement  Date
     only, all utility services and facilities necessary  for
     the  construction and operation of the Improvements  and
     the   installation  and  operation  of   the   Equipment
     regarding  each  Property (including without  limitation
     gas,   electrical,   water  and  sewage   services   and
     facilities)  are  available at the applicable  Land  and
     will  be  constructed prior to the Completion  Date  for
     such Property;

           (q)  As of each Property Closing Date, the date of
     each  subsequent Advance and the Rent Commencement  Date
     only,  acquisition,  installation  and  testing  of  the
     Equipment  (if any) and construction of the Improvements
     (if  any)  to such date shall have been performed  in  a
     good and workmanlike manner, substantially in accordance
     with the applicable Plans and Specifications;

          (r)    (i)   The  Security  Documents  create,   as
          security  for  the  Obligations (as  such  term  is
          defined  in  the  Security  Agreement),  valid  and
          enforceable  security interests in, and  Liens  on,
          all  of the Collateral, in favor of the Agent,  for
          the ratable benefit of the Lenders and the Holders,
          as   their  respective  interests  appear  in   the
          Operative  Agreements, and such security  interests
          and  Liens are subject to no other Liens other than
          Liens   that  are  expressly  set  forth  as  title
          exceptions  on  the title commitment  issued  under
          Section  5.3(g)  with  respect  to  the  applicable
          Property,  to the extent such title commitment  has
          been  approved  by the Agent.  Upon recordation  of
          the   Mortgage  Instrument  in  the   real   estate
          recording  office in the applicable Approved  State
          identified by the applicable Construction Agent  or
          the  applicable Lessee with respect to a particular
          Property,   the  Lien  created  by   the   Mortgage
          Instrument  in the real property described  therein
          shall  be a perfected first priority mortgage  Lien
          on  such real property (or, in the case of a Ground
          Lease,  the  leasehold  estate  under  such  Ground
          Lease)  in  favor  of the Agent,  for  the  ratable
          benefit  of the Lenders and the Holders,  as  their
          respective   interests  appear  in  the   Operative
          Agreements.   To  the  extent  that  the   security
          interests   in   the  portion  of  the   Collateral
          comprised of personal property can be perfected  by
          filing  in  the  filing offices in  the  applicable
          Approved   States   or  elsewhere   identified   by
          applicable  Construction Agent  or  the  applicable
          Lessee with respect to a particular Property,  upon
          filing  of the Lender Financing Statements in  such
          filing  offices, the security interests created  by
          the  Security  Agreement shall be  perfected  first
          priority   security  interests  in  such   personal
          property  in  favor of the Agent, for  the  ratable
          benefit  of the Lenders and the Holders,  as  their
          respective   interests  appear  in  the   Operative
          Agreements;

                (ii) The Lease Agreement creates, as security
          for  the obligations of the Lessee under the  Lease
          Agreement, valid and enforceable security interests
          in,  and Liens on, each Property leased thereunder,
          in favor of the Lessor, and such security interests
          and  Liens are subject to no other Liens other than
          Liens   that  are  expressly  set  forth  as  title
          exceptions  on  the title commitment  issued  under
          Section  5.3(g)  with  respect  to  the  applicable
          Property,  to the extent such title commitment  has
          been  approved  by the Agent.  Upon recordation  of
          the  memorandum  of  the Lease  Agreement  and  the
          memorandum of a Ground Lease (or, in either case, a
          short  form  lease)  in the real  estate  recording
          office  in the applicable Approved State identified
          by  applicable Construction Agent or the applicable
          Lessee  with respect to a particular Property,  the
          Lien  created by the Lease Agreement  in  the  real
          property  described therein shall  be  a  perfected
          first  priority mortgage Lien on such real property
          (or,  in  the  case  of  a  Ground  Lease,  on  the
          leasehold estate under such Ground Lease) in  favor
          of  the  Agent,  for  the ratable  benefit  of  the
          Lenders   and  the  Holders,  as  their  respective
          interests  appear in the Operative Agreements.   To
          the  extent  that  the security  interests  in  the
          portion  of  any  Property  comprised  of  personal
          property  can  be perfected by the  filing  in  the
          filing offices in the applicable Approved State  or
          elsewhere  identified  by  applicable  Construction
          Agent  or the applicable Lessee with respect  to  a
          particular  Property  upon  filing  of  the  Lessor
          Financing  Statements  in such  filing  offices,  a
          security  interest created by the  Lease  Agreement
          shall   be   perfected  first   priority   security
          interests in such personal property in favor of the
          Lessor,   which  rights  pursuant  to  the   Lessor
          Financing Statements are assigned to the Agent, for
          the ratable benefit of the Lenders and the Holders,
          as   their  respective  interests  appear  in   the
          Operative Agreements;

          (s)  The Plans and Specifications for each Property
     will   be   prepared  prior  to  the   commencement   of
     construction  in  accordance with all  applicable  Legal
     Requirements    (including   without   limitation    all
     applicable  Environmental Laws and  building,  planning,
     zoning and fire codes), except to the extent the failure
     to  comply  therewith, individually or in the aggregate,
     shall  not have and could not reasonably be expected  to
     have a Material Adverse Effect.  Upon completion of  the
     Improvements  for each Property in accordance  with  the
     applicable  Plans and Specifications, such  Improvements
     will  be within any building restriction lines and  will
     not  encroach  in  any manner onto  any  adjoining  land
     (except as permitted by express written easements, which
     have been approved by the Agent);

           (t)   As of the Rent Commencement Date only,  each
     Property  shall be improved substantially in  accordance
     with  the applicable Plans and Specifications in a  good
     and workmanlike manner and shall be operational;

           (u)   As of each Property Closing Date only,  each
     Property has been acquired or ground leased pursuant  to
     a  Ground Lease at a price that is not in excess of fair
     market  value or fair market rental value, as  the  case
     may be; and

          (v)   The  consolidated balance  sheet  and  income
     statement   of   the  Guarantor  and  its   Consolidated
     Subsidiaries  as  of  December 31, 1999,  together  with
     related   consolidated  statements  of  operations   and
     retained   earnings   and   of   cash   flows   as    of
     December  31,  1999,  fairly  present  in  all  material
     respects  the  consolidated financial condition  of  the
     Guarantor and its Consolidated Subsidiaries as  of  such
     date  and the consolidated results of the operations  of
     the  Guarantor and its Consolidated Subsidiaries for the
     periods ended on such date, all in accordance with GAAP.

                    SECTION 6B.  GUARANTY

     6B.1.     Guaranty of Payment and Performance.

     Subject   to   Section   6B.7,  the   Guarantor   hereby
unconditionally guarantees to each Financing Party the prompt
payment  and performance of the Company Obligations  in  full
when   due  (whether  at  stated  maturity,  as  a  mandatory
prepayment,  by acceleration or otherwise) or  when  such  is
otherwise  to  be  performed; provided,  notwithstanding  the
foregoing,  the  obligations  of  the  Guarantor  under  this
Section  6B  shall not constitute a direct  guaranty  of  the
indebtedness of the Lessor evidenced by the Notes but  rather
a  guaranty  of  the  Company Obligations arising  under  the
Operative  Agreements.  This Section  6B  is  a  guaranty  of
payment  and  performance and not  of  collection  and  is  a
continuing   guaranty  and  shall  apply   to   all   Company
Obligations  whenever  arising.  All rights  granted  to  the
Financing  Parties under this Section 6B shall be subject  to
the provisions of Section 8.2(h) and 8.6.

     6B.2.     Obligations Unconditional.

     The   Guarantor  agrees  that  the  obligations  of  the
Guarantor   hereunder   are   absolute   and   unconditional,
irrespective of the value, genuineness, validity,  regularity
or  enforceability of any of the Operative Agreements, or any
other  agreement  or instrument referred to therein,  or  any
substitution, release or exchange of any other  guarantee  of
or  security for any of the Company Obligations, and, to  the
fullest  extent permitted by applicable law, irrespective  of
any  other  circumstance  whatsoever  which  might  otherwise
constitute  a  legal or equitable discharge or defense  of  a
surety, guarantor or co-obligor, it being the intent of  this
Section  6B.2 that the obligations of the Guarantor hereunder
shall  be  absolute  and  unconditional  under  any  and  all
circumstances.  The Guarantor agrees that this Section 6B may
be enforced by the Financing Parties without the necessity at
any time of resorting to or exhausting any other security  or
collateral  and without the necessity at any time  of  having
recourse to the Notes, the Certificates or any other  of  the
Operative  Agreements or any collateral,  if  any,  hereafter
securing  the  Company  Obligations  or  otherwise  and   the
Guarantor  hereby waives the right to require  the  Financing
Parties to proceed against any Construction Agent, any Lessee
or  any  other  Person (including without  limitation  a  co-
guarantor) or to require the Financing Parties to pursue  any
other  remedy  or  enforce any other  right.   The  Guarantor
further  agrees that it hereby waives any and  all  right  of
subrogation, indemnity, reimbursement or contribution against
the  applicable Lessee and the applicable Construction  Agent
or any other guarantor of the Company Obligations for amounts
paid  under  this Section 6B until such time  as  the  Loans,
Holder  Advances,  accrued but unpaid interest,  accrued  but
unpaid  Holder  Yield and all other amounts owing  under  the
Operative  Agreements  have  been  paid  in  full.    Without
limiting  the  generality of the waiver  provisions  of  this
Section 6B, the Guarantor hereby waives any rights to require
the  Financing  Parties to proceed against  any  Construction
Agent, any Lessee or any co-guarantor or to require Lessor to
pursue any other remedy or enforce any other right, including
without limitation, any and all rights under N.C. Gen.  Stat.
  26-7  through  26-9.   The Guarantor  further  agrees  that
nothing  contained herein shall prevent the Financing Parties
from  suing  on  any Operative Agreement or  foreclosing  any
security  interest  in  or Lien on any  collateral,  if  any,
securing the Company Obligations or from exercising any other
rights available to it under any Operative Agreement, or  any
other instrument of security, if any, and the exercise of any
of the aforesaid rights and the completion of any foreclosure
proceedings   shall  not  constitute  a  discharge   of   the
Guarantor's  obligations hereunder; it being the purpose  and
intent of the Guarantor that its obligations hereunder  shall
be  absolute, independent and unconditional under any and all
circumstances;  provided  that any  amounts  due  under  this
Section  6B  which  are paid to or for  the  benefit  of  any
Financing  Party  shall reduce the Company Obligations  by  a
corresponding  amount (unless required to be rescinded  at  a
later date).  Neither the Guarantor's obligations under  this
Section  6B nor any remedy for the enforcement thereof  shall
be  impaired,  modified, changed or released  in  any  manner
whatsoever by an impairment, modification, change, release or
limitation of the liability of any Construction Agent or  any
Lessee  or by reason of the bankruptcy or insolvency  of  any
Construction Agent or any Lessee.  The Guarantor  waives  any
and all notice of the creation, renewal, extension or accrual
of  any of the Company Obligations and notice of or proof  of
reliance  by  any  Financing Party upon this  Section  6B  or
acceptance of this Section 6B.  The Company Obligations shall
conclusively  be deemed to have been created,  contracted  or
incurred,  or  renewed,  extended,  amended  or  waived,   in
reliance  upon  this  Section 6B.  All dealings  between  any
Construction Agent, any Lessee and the Guarantor, on the  one
hand,  and the Financing Parties, on the other hand, likewise
shall   be  conclusively  presumed  to  have  been   had   or
consummated in reliance upon this Section 6B.

     6B.3.     Modifications.

     The  Guarantor agrees that (a) all or any  part  of  the
security  now  or hereafter held for the Company Obligations,
if  any,  may  be exchanged, compromised or surrendered  from
time  to  time;  (b)  no  Financing  Party  shall  have   any
obligation  to  protect, perfect, secure or insure  any  such
security  interests, liens or encumbrances now  or  hereafter
held,  if  any, for the Company Obligations or the properties
subject  thereto;  (c) the time or place of  payment  of  the
Company  Obligations may be changed or extended, in whole  or
in  part, to a time certain or otherwise, and may be  renewed
or  accelerated,  in whole or in part; (d)  any  Construction
Agent,  any  Lessee  and any other party liable  for  payment
under  the  Operative  Agreements may be granted  indulgences
generally; (e) subject to clause (ii) of the last sentence of
Section  6B.4,  any  of  the provisions  of  the  Notes,  the
Certificates or any of the other Operative Agreements may  be
modified, amended or waived; (f) any party (including any co-
guarantor)  liable  for the payment thereof  may  be  granted
indulgences  or be released; and (g) any deposit balance  for
the credit of any Construction Agent, any Lessee or any other
party  liable  for the payment of the Company Obligations  or
liable  upon any security therefor may be released, in  whole
or  in  part,  at,  before or after the stated,  extended  or
accelerated maturity of the Company Obligations, all  without
notice  to  or further assent by the Guarantor,  which  shall
remain  bound  thereon, notwithstanding  any  such  exchange,
compromise,   surrender,  extension,  renewal,  acceleration,
modification, indulgence or release.

     6B.4.     Waiver of Rights.

     The  Guarantor  expressly waives to the  fullest  extent
permitted  by  applicable law:  (a) notice of  acceptance  of
this  Section 6B by any Financing Party and of all extensions
of credit or other Advances to any Construction Agent and any
Lessee  by the Lenders pursuant to the terms of the Operative
Agreements;  (b)  presentment  and  demand  for  payment   or
performance  of any of the Company Obligations;  (c)  protest
and  notice  of  dishonor or of default with respect  to  the
Company Obligations or with respect to any security therefor;
(d)  notice  of  any  Financing  Party  obtaining,  amending,
substituting   for,  releasing,  waiving  or  modifying   any
security  interest, lien or encumbrance,  if  any,  hereafter
securing  the  Company Obligations, or any Financing  Party's
subordinating,  compromising, discharging or  releasing  such
security  interests, liens or encumbrances, if any;  and  (e)
all  other notices to which the Guarantor might otherwise  be
entitled.   Notwithstanding anything to the contrary  herein,
(i)  the Guarantor's payments hereunder shall be due five (5)
Business  Days  after written demand by the  Agent  for  such
payment  (unless  the Company Obligations  are  automatically
accelerated  pursuant  to the applicable  provisions  of  the
Operative  Agreements in which case the Guarantor's  payments
shall be automatically due) and (ii) any modification of  the
Operative  Agreements which has the effect of increasing  the
Company  Obligations  shall not be  enforceable  against  the
Guarantor   unless  the  Guarantor  executes   the   document
evidencing  such  modification  or  otherwise  reaffirms  its
guaranty in writing in connection with such modification.

     6B.5.     Reinstatement.

     The  obligations of the Guarantor under this Section  6B
shall  be automatically reinstated if and to the extent  that
for  any reason any payment by or on behalf of any Person  in
respect  of the Company Obligations is rescinded or  must  be
otherwise  restored  by  any holder of  any  of  the  Company
Obligations,  whether  as  a result  of  any  proceedings  in
bankruptcy or reorganization or otherwise, and the  Guarantor
agrees  that it will indemnify each Financing Party on demand
for  all  reasonable  costs and expenses (including,  without
limitation,  reasonable  fees of  counsel)  incurred  by  any
Financing  Party  in  connection  with  such  rescission   or
restoration, including without limitation any such costs  and
expenses  incurred  in defending against any  claim  alleging
that   such  payment  constituted  a  preference,  fraudulent
transfer  or similar payment under any bankruptcy, insolvency
or similar law.

     6B.6.     Remedies.

     The Guarantor agrees that, as between the Guarantor,  on
the  one  hand, and each Financing Party, on the other  hand,
the  Company Obligations may be declared to be forthwith  due
and  payable as provided in the applicable provisions of  the
Operative  Agreements  (and shall be deemed  to  have  become
automatically  due and payable in the circumstances  provided
therein)  notwithstanding  any  stay,  injunction  or   other
prohibition  preventing such declaration (or preventing  such
Company  Obligations  from  becoming  automatically  due  and
payable)  as against any other Person and that, in the  event
of such declaration (or such Company Obligations being deemed
to  have  become automatically due and payable), such Company
Obligations  (whether  or not due and payable  by  any  other
Person)  shall  forthwith  become  due  and  payable  by  the
Guarantor in accordance with the applicable provisions of the
Operative Agreements.

     6B.7.     Limitation of Guaranty.

     Notwithstanding any provision to the contrary  contained
herein  or in any of the other Operative Agreements,  to  the
extent  the obligations of the Guarantor shall be adjudicated
to  be  invalid  or  unenforceable for any reason  (including
without limitation because of any applicable state or federal
law relating to fraudulent conveyances or transfers) then the
obligations  of the Guarantor hereunder shall be  limited  to
the  maximum amount that is permissible under applicable  law
(whether  federal  or state and including without  limitation
the Bankruptcy Code).

     Subject  to Section 6B.5, upon the satisfaction  of  the
Company  Obligations in full, regardless  of  the  source  of
payment,  the  Guarantor's  obligations  hereunder  shall  be
deemed  satisfied,  discharged  and  terminated  other   than
indemnifications set forth herein that expressly survive.

     6B.8.     Payment of Amounts to the Agent.

     Each Financing Party hereby instructs the Guarantor, and
the Guarantor hereby acknowledges and agrees, that until such
time  as  the Loans and the Holder Advances are paid in  full
and  the  Liens evidenced by the Security Agreement  and  the
Mortgage  Instruments have been released  any  and  all  Rent
(excluding Excepted Payments which shall be payable  to  each
Holder or other Person as appropriate) and any and all  other
amounts  of  any  kind  or type under any  of  the  Operative
Agreements  due  and  owing or payable to  any  Person  shall
instead  be  paid  directly to the Agent (excluding  Excepted
Payments  which  shall  be payable to each  Holder  or  other
Person  as appropriate) or as the Agent may direct from  time
to  time  for allocation and distribution in accordance  with
the procedures set forth in Section 8.7 hereof.

                    SECTION 7. PAYMENT OF CERTAIN EXPENSES.

     7.1. Transaction Expenses.

          (a)  The Lessor agrees on the Initial Closing Date,
     to  pay,  or cause to be paid, all Transaction  Expenses
     arising from the Initial Closing Date, including without
     limitation    all   reasonable   fees,   expenses    and
     disbursements  of  the various legal  counsels  for  the
     Lessor and the Agent in connection with the transactions
     contemplated by the Operative Agreements and incurred in
     connection  with such Initial Closing Date, the  initial
     fees  and expenses of the Owner Trustee due and  payable
     on such Initial Closing Date (as described in a separate
     letter  agreement  dated as of April  5,  2000,  by  and
     between  the  Trust  Company and Guarantor),  all  fees,
     taxes  and expenses for the recording, registration  and
     filing  of  documents  and all  other  reasonable  fees,
     expenses  and disbursements incurred in connection  with
     such Initial Closing Date; provided, however, the Lessor
     shall  pay such amounts described in this Section 7.1(a)
     only  if  (i) such amounts are properly described  in  a
     Requisition  delivered on or before the Initial  Closing
     Date,  and (ii) funds are made available by the  Lenders
     and  the Holders in connection with such Requisition  in
     an  amount  sufficient to allow such  payment.   On  the
     Initial Closing Date after delivery and receipt  of  the
     Requisition  referenced  in Section  4.2(a)  hereof  and
     satisfaction of the other conditions precedent for  such
     date,  the  Holders shall make Holder Advances  and  the
     Lenders  shall make Loans to the Lessor to pay  for  the
     Transaction   Expenses,   fees,   expenses   and   other
     disbursements  referenced in this Section  7.1(a).   The
     Credit  Parties agree to timely pay all amounts referred
     to  in this Section 7.1(a) to the extent not paid by the
     Lessor.

           (b)  Assuming no Default or Event of Default shall
     have  occurred and be continuing and only for the period
     prior  to the Rent Commencement Date, the Lessor  agrees
     on  each  Property  Closing Date, on  the  date  of  any
     Construction Advance and on the Completion Date to  pay,
     or  cause to be paid, all Transaction Expenses including
     without  limitation  all reasonable fees,  expenses  and
     disbursements  of  the various legal  counsels  for  the
     Lessor and the Agent in connection with the transactions
     contemplated by the Operative Agreements and  billed  in
     connection  with  such Advance or such Completion  Date,
     all   amounts  described  in  Section  7.1(a)  of   this
     Agreement  which  have  not been  previously  paid,  the
     annual fees and reasonable out-of-pocket expenses of the
     Owner   Trustee  (as  described  in  a  separate  letter
     agreement dated as of April 5, 2000, by and between  the
     Trust  Company  and Guarantor), all fees,  expenses  and
     disbursements incurred with respect to the various items
     referenced  in  Sections 5.3, 5.4 and/or 5.5  (including
     without  limitation  any premiums  for  title  insurance
     policies  and charges for any updates to such  policies)
     and    all   other   reasonable   fees,   expenses   and
     disbursements  in connection with such Advance  or  such
     Completion   Date  including  without   limitation   all
     expenses  relating to and all fees, taxes  and  expenses
     for  the recording, registration and filing of documents
     and during the Commitment Period, all fees, expenses and
     costs referenced in Sections 7.3(a), 7.3(b), 7.3(d)  and
     7.4;  provided,  however,  the  Lessor  shall  pay  such
     amounts  described in this Section 7.1(b)  only  if  (i)
     such  amounts  are properly described in  a  Requisition
     delivered on the applicable date and (ii) funds are made
     available  by the Lenders and the Holders in  connection
     with  such Requisition in an amount sufficient to  allow
     such  payment.  On each Property Closing  Date,  on  the
     date of any Construction Advance or any Completion Date,
     after   delivery  of  the  applicable  Requisition   and
     satisfaction of the other conditions precedent for  such
     date,  the Holders shall make a Holder Advance  and  the
     Lenders  shall make Loans to the Lessor to pay  for  the
     Transaction   Expenses,   fees,   expenses   and   other
     disbursements  referenced in this Section  7.1(b).   The
     Credit  Parties agree to timely pay all amounts referred
     to  in this Section 7.1(b) to the extent not paid by the
     Lessor.

           (c)   All  fees payable pursuant to the  Operative
     Agreements shall be calculated on the basis of a year of
     three  hundred  sixty  (360) days for  the  actual  days
     elapsed.

     7.2. Brokers' Fees.

      The Credit Parties agree to pay or cause to be paid any
and  all  brokers' fees, if any, including without limitation
any  interest  and penalties thereon, which  are  payable  in
connection  with  the  transactions  contemplated   by   this
Agreement and the other Operative Agreements.

     7.3. Certain Fees and Expenses.

      The  Credit Parties agree to pay or cause  to  be  paid
(a)  the initial and annual Owner Trustee's fee (as described
in  a separate letter agreement dated as of April 5, 2000, by
and   between  the  Trust  Company  and  Guarantor)  and  all
reasonable  expenses of the Owner Trustee and any co-trustees
(including  without limitation reasonable  counsel  fees  and
expenses)  or any successor owner trustee and/or  co-trustee,
for  acting  as the owner trustee under the Trust  Agreement,
(b)  all reasonable costs and expenses incurred by the Credit
Parties, the Agent, the Lenders, the Holders or the Lessor in
entering into any Lease Supplement and any future amendments,
modifications, supplements, restatements and/or  replacements
with  respect to any of the Operative Agreements, whether  or
not   such   Lease   Supplement,  amendments,  modifications,
supplements, restatements and/or replacements are  ultimately
entered into, or giving or withholding of waivers of consents
hereto  or  thereto, which have been requested by any  Credit
Party, the Agent, the Lenders, the Holders or the Lessor, (c)
all  reasonable  costs and expenses incurred  by  the  Credit
Parties, the Agent, the Lenders, the Holders or the Lessor in
connection with any exercise of remedies under any  Operative
Agreement or any purchase of any Property by the Construction
Agent,  the  Lessee or any third party and (d) all reasonable
costs and expenses incurred by the Credit Parties, the Agent,
the Lenders, the Holders or the Lessor in connection with any
transfer  or conveyance of any Property, whether or not  such
transfer or conveyance is ultimately accomplished.

     7.4. Facility Fee.

      During the Commitment Period, the Credit Parties  agree
to pay or to cause to be paid to the Agent for the account of
(a)  the  Lenders, respectively, a facility fee (the  "Lender
Facility   Fee")  equal  to  the  product  of  the  aggregate
Commitments multiplied by a rate of 0.125% per annum and  (b)
the  Holders,  respectively,  a  facility  fee  (the  "Holder
Facility  Fee") equal to the product of the aggregate  Holder
Commitments  multiplied by a rate of 0.125% per annum.   Such
Facility Fees shall be payable quarterly in arrears  on  each
Facility  Fee Payment Date.  If all or a portion of any  such
Facility Fee shall not be paid when due, such overdue  amount
shall bear interest, payable by the Credit Parties on demand,
at  a  rate  per annum equal to the ABR (or in  the  case  of
Holder  Yield,  the  ABR plus the Applicable  Percentage  for
Eurodollar  Holder Advances) plus two percent (2%)  from  the
date  of  such non-payment until such amount is paid in  full
(as well as before judgment).

     7.5. Administrative Fee.

      The  Credit  Parties  shall pay or  cause  to  paid  an
administrative fee to the Agent (for its individual  account)
on  the  terms  and  conditions set forth in  the  engagement
letter  dated January 21, 2000 addressed to Mr. John  Austin,
Treasurer,  Performance  Food  Group  Company,  6800  Paragon
Place, Suite 500, Richmond, VA  23230 from Weston R. Garrett,
Vice  President,  Corporate Real Estate  and  Asset  Finance,
First Union Securities, Inc., Structured Products Group,  301
South College Street, Charlotte, NC 28288-0166.

               SECTION 8.  OTHER COVENANTS AND
                         AGREEMENTS.

     8.1. Cooperation with the Credit Parties.

      The  Holders, the Lenders, the Lessor (at the direction
of  the Majority Secured Parties) and the Agent shall, at the
expense  of  and  to the extent reasonably requested  by  any
Credit Party (but without assuming additional liabilities  on
account thereof and only to the extent such is acceptable  to
the Holders, the Lenders, the Lessor (at the direction of the
Majority  Secured Parties) and the Agent in their  reasonable
discretion),  cooperate with such Credit Party in  connection
with  such  Credit Party satisfying its covenant  obligations
contained  in  the  Operative  Agreements  including  without
limitation  at any time and from time to time,  promptly  and
duly  executing  and  delivering any  and  all  such  further
instruments,   documents   and  financing   statements   (and
continuation statements related thereto).

     8.2. Covenants of the Owner Trustee and the Holders.

      Each of the Owner Trustee and the Holders hereby agrees
that so long as this Agreement is in effect:

           (a)   Neither  the  Owner Trustee  (in  its  trust
     capacity  or in its individual capacity) nor any  Holder
     will create or permit to exist at any time, and each  of
     them  will,  at its own cost and expense, promptly  take
     such action as may be necessary duly to discharge, or to
     cause  to  be  discharged,  all  Lessor  Liens  on   the
     Properties  attributable to it; provided, however,  that
     the  Owner Trustee and the Holders shall not be required
     to  so discharge any such Lessor Lien while the same  is
     being contested in good faith by appropriate proceedings
     diligently prosecuted so long as such proceedings  shall
     not  materially and adversely affect the rights  of  the
     Lessee   under   the  Lease  and  the  other   Operative
     Agreements  or involve any material danger of impairment
     of  the Liens of the Security Documents or of the  sale,
     forfeiture or loss of, and shall not interfere with  the
     use or disposition of, any Property or title thereto  or
     any interest therein or the payment of Rent;

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

           (c)  The Owner Trustee or any successor may resign
     or  be  removed by the Holders as the Owner  Trustee,  a
     successor   Owner  Trustee  may  be  appointed   and   a
     corporation may become the Owner Trustee under the Trust
     Agreement,  only  in accordance with the  provisions  of
     Article  IX of the Trust Agreement and, with respect  to
     such appointment, with the consent of the Guarantor  (so
     long  as  there shall be no Lease Event of Default  that
     shall  have  occurred and be continuing), which  consent
     shall not be unreasonably withheld or delayed;

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

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

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

           (g)  The Owner Trustee shall give prompt notice to
     each  Lessee,  the Holders and the Agent  if  the  Owner
     Trustee's principal place of business or chief executive
     office,  or the office where the records concerning  the
     accounts or contract rights relating to any Property are
     kept, shall cease to be located at 79 South Main Street,
     Salt  Lake  City, Utah 84111, or if it shall change  its
     name; and

           (h)   The Owner Trustee shall take or refrain from
     taking  such actions and grant or refrain from  granting
     such  approvals with respect to the Operative Agreements
     and/or relating to any Property in each case as directed
     in  writing by the Agent (until such time as  the  Loans
     are  paid in full, and then by the Majority Holders) or,
     in  connection  with Sections 8.5 and  9.2  hereof,  the
     Lessee;  provided,  however,  that  notwithstanding  the
     foregoing provisions of this subparagraph (h) the  Owner
     Trustee,  the  Agent, the Lenders and the  Holders  each
     acknowledge, covenant and agree that neither  the  Owner
     Trustee  nor the Agent shall act or refrain from acting,
     regarding  each Unanimous Vote Matter, until such  party
     has received the approval of each Lender and each Holder
     affected by such matter.

     8.3. Credit Party Covenants, Consent and Acknowledgment.

          (a)  Each Credit Party acknowledges and agrees that
     the  Owner Trustee, pursuant to the terms and conditions
     of  the Security Agreement and the Mortgage Instruments,
     shall  create  Liens  respecting  the  various  personal
     property,  fixtures and real property described  therein
     in  favor  of  the  Agent.   Each  Credit  Party  hereby
     irrevocably  consents  to the creation,  perfection  and
     maintenance of such Liens.  Each Credit Party shall,  to
     the  extent  reasonably requested by any  of  the  other
     parties  hereto,  cooperate with the  other  parties  in
     connection with their covenants herein or in  the  other
     Operative  Agreements and shall from time to  time  duly
     execute and deliver any and all such future instruments,
     documents  and  financing statements  (and  continuation
     statements  related thereto) as any other  party  hereto
     may reasonably request.

          (b)  The Lessor hereby instructs each Credit Party,
     and  each  Credit Party hereby acknowledges and  agrees,
     that  until  such  time  as the  Loans  and  the  Holder
     Advances are paid in full and the Liens evidenced by the
     Security  Agreement  and the Mortgage  Instruments  have
     been  released (i) any and all Rent (excluding  Excepted
     Payments which shall be payable to each Holder or  other
     Person as appropriate) and any and all other amounts  of
     any  kind  or type under any of the Operative Agreements
     due  and  owing or payable to any Financing Party  shall
     instead   be  paid  directly  to  the  Agent  (excluding
     Excepted Payments which shall be payable to each  Holder
     or  other  Person as appropriate) or as  the  Agent  may
     direct from time to time for allocation and distribution
     in  accordance with the procedures set forth in  Section
     8.7  hereof,  (ii)  all rights of the Lessor  under  the
     Lease  shall  be exercised by the Agent and  (iii)  each
     Credit  Party  shall  cause all  notices,  certificates,
     financial    statements,   communications   and    other
     information which are delivered, or are required  to  be
     delivered,  to the Lessor, to also be delivered  at  the
     same time to the Agent.

          (c)  No Credit Party shall consent to or permit any
     amendment, supplement or other modification of the terms
     or  provisions  of  any Operative  Agreement  except  in
     accordance with Section 12.4 of this Agreement.

            (d)   Each  Lessee  that  has  executed  a  Lease
     Supplement with respect to any Property hereby covenants
     and agrees to cause an Appraisal or reappraisal (in form
     and  substance reasonably satisfactory to the Agent  and
     from  an  appraiser selected by the Agent) to be  issued
     respecting  any Property as requested by the Agent  from
     time to time (i) at each and every time as such shall be
     required to satisfy any regulatory requirements  imposed
     on  the Agent, the Lessor, the Trust Company, any Lender
     and/or any Holder; (ii) after the occurrence of an Event
     of  Default; and (iii) at any time when the Agent  shall
     not  have Appraisals respecting Properties then  subject
     to   the  transactions  contemplated  by  the  Operative
     Agreements equal to at least twenty percent (20%) of the
     sum of the Commitments and the Holder Commitments.

          (e)  Each Credit Party hereby covenants and agrees
     that, except for amounts payable as Basic Rent, any and
     all payment obligations owing from time to time under
     the Operative Agreements by any Person relating to a
     particular Property to the Agent, any Lender, any Holder
     or any other Person shall (without further action) be
     deemed to be Supplemental Rent obligations payable by
     the Lessee that has executed a Lease Supplement with
     respect to such Property and guaranteed by the
     Guarantor.  Without limitation, such obligations of the
     Credit Parties shall include the Supplemental Rent
     obligations pursuant to this Section 8.3(e), Section 3.3
     of the Lease, arrangement fees, administrative fees,
     participation fees, commitment fees, facility fees,
     prepayment penalties, breakage costs, indemnities,
     trustee fees and transaction expenses incurred by the
     parties hereto in connection with the transactions
     contemplated by the Operative Agreements.

           (f)   At  any  time the Lessor  or  the  Agent  is
     entitled under the Operative Agreements to possession of
     a  Property  or  any  component  thereof,  each  of  the
     Construction  Agent and the Lessee that has  executed  a
     Lease  Supplement with respect to such  Property  hereby
     covenants  and agrees, at its own cost and  expense,  to
     assemble  and make the same available to the  Agent  (on
     behalf of the Lessor).

            (g)    The  Lessee  that  has  executed  a  Lease
     Supplement with respect to any Property hereby covenants
     and  agrees  that  Equipment respecting  any  individual
     parcel of Property shall at no time constitute in excess
     of  fifteen  percent  (15%) of  the  aggregate  Advances
     respecting such parcel of Property funded at  such  time
     under the Operative Agreements.

           (h)  Each Credit Party hereby covenants and agrees
     that  as  of Completion (i) the Property Cost  for  each
     individual parcel of the Property shall be (A)  no  less
     than  $3,000,000  and (B) no more than  $60,000,000  and
     (ii)  each  parcel of the Property shall be a  Permitted
     Facility.

          (i)  The Guarantor hereby covenants and agrees that
     it  shall give prompt notice to the Agent if any  Credit
     Party's  principal place of business or chief  executive
     office,  or the office where the records concerning  the
     accounts or contract rights relating to any Property are
     kept, or if any Credit Party's name, shall change.

           (j)  Unless the Agent otherwise agrees in writing,
     the   Lessee  hereby  covenants  and  agrees  that   the
     aggregate Property Cost of Properties purchased for  any
     reason by any Lessee prior to the Expiration Date  shall
     not  exceed ten percent (10%) of the aggregate  Property
     Cost  for  all  Properties funded during the  Commitment
     Period.

          (k)  [Reserved].

           (l)  Each Credit Party hereby covenants and agrees
     that the rights of the Lessees under this Agreement  and
     the  Lease  shall not impair or in any way diminish  the
     obligations of the Construction Agents and/or the rights
     of the Lessor under the Agency Agreement.

           (m)   Each Credit Party shall promptly notify  the
     Agent, or cause the Agent to be promptly notified,  upon
     such Credit Party gaining knowledge of the occurrence of
     any  Default or Event of Default which is continuing  at
     such  time.  In any event, such notice shall be provided
     to  the  Agent within ten (10) days of when such  Credit
     Party gains such knowledge.

           (n)   Until  all  of  the  obligations  under  the
     Operative  Agreements have been finally and indefeasibly
     paid  and satisfied in full and the Commitments and  the
     Holder  Commitments terminated unless consent  has  been
     obtained from the Majority Secured Parties, each  Credit
     Party will:

                (i)   except  as  permitted  by  the  express
          provisions of the Lessee Credit Agreement, preserve
          and  maintain its separate legal existence and  all
          rights,   franchises,   licenses   and   privileges
          necessary  to  the  conduct of  its  business,  and
          qualify   and   remain  qualified  as   a   foreign
          corporation  (or  partnership,  limited   liability
          company  or other such similar entity, as the  case
          may  be)  and  authorized to do  business  in  each
          jurisdiction in which the failure to do so  qualify
          would have a Material Adverse Effect;

                (ii)  pay and perform all obligations of  the
          Credit  Parties under the Operative Agreements  and
          pay  and  perform  (A) all taxes,  assessments  and
          other  governmental charges that may be  levied  or
          assessed  upon it or any of its property,  and  (B)
          all other indebtedness, obligations and liabilities
          in accordance with customary trade practices, which
          if  not  paid would have a Material Adverse Effect;
          provided that any Credit Party may contest any item
          described in this Section 8.3(n)(ii) in good  faith
          so  long  as adequate reserves are maintained  with
          respect thereto in accordance with GAAP;

               (iii)     to the extent failure to do so would
          have  a Material Adverse Effect, observe and remain
          in compliance with all applicable Laws and maintain
          in  full force and effect all Governmental Actions,
          in  each  case  applicable to the  conduct  of  its
          business;  and  keep in full force and  effect  all
          licenses,    certifications    or    accreditations
          necessary  for  any  Facility  to  carry   on   its
          business; and

                (iv) provided that the Agent, the Lenders and
          the  Holders  use  reasonable efforts  to  minimize
          disruption  to  the business of the Lessee,  permit
          representatives  of  the Agent  or  any  Lender  or
          Holder, from time to time, to visit and inspect its
          properties;  inspect, audit and make extracts  from
          its  books,  records and files,  including  without
          limitation    management   letters   prepared    by
          independent  accountants;  and  discuss  with   its
          principal    officers,    and    its    independent
          accountants,  its  business,  assets,  liabilities,
          financial  condition,  results  of  operations  and
          business prospects.

          (o)  [Reserved].

            (p)    The  Lessee  that  has  executed  a  Lease
     Supplement  with respect to any Property  shall  perform
     any  and  all  obligations of Lessor  under,  and  cause
     Lessor to otherwise remain in full compliance with,  the
     terms and provisions of each Ground Lease, if any.

            (q)    Promptly  after  obtaining  any   required
     architectural  approvals by any  business  park  or  any
     other  applicable  entity with oversight  responsibility
     for  the applicable Improvements, the Construction Agent
     shall deliver to the Agent copies of the same.

           (r)   Prior to the Expiration Date or any  earlier
     termination  of  the  Holder  Commitments,  the   Lender
     Commitments and/or any of the Operative Agreements,  the
     Credit Parties shall cause Advances to have been made in
     an  amount equal to no less than forty percent (40%)  of
     the  sum of the aggregate Holder Commitments (as of  the
     Initial  Closing Date or as such may be  increased  from
     time to time) plus the aggregate Lender Commitments  (as
     of  the Initial Closing Date or as much may be increased
     from time to time).

     8.4. Sharing of Certain Payments.

       Except  for  Excepted  Payments,  the  parties  hereto
acknowledge and agree that all payments due and owing by  any
Credit  Party  to the Lessor under the Lease or  any  of  the
other Operative Agreements shall be made by such Credit Party
directly  to  the  Agent  as  more particularly  provided  in
Section 8.3 hereof.  The Lessor, the Holders, the Agent,  the
Lenders  and  the  Credit Parties acknowledge  the  terms  of
Section  8.7  of this Agreement regarding the  allocation  of
payments and other amounts made or received from time to time
under  the  Operative  Agreements and agree,  that  all  such
payments  and  amounts  are to be allocated  as  provided  in
Section 8.7 of this Agreement.

     8.5. Grant of Easements, etc.

      The  Agent,  the Lenders and the Holders  hereby  agree
that, so long as no Event of Default shall have occurred  and
be  continuing, the Owner Trustee shall, from time to time at
the   request  of  the  Lessee  that  has  executed  a  Lease
Supplement  with respect to a particular Property  (and  with
the  prior consent of the Agent, which consent shall  not  be
unreasonably  withheld), in connection with the  transactions
contemplated by the Agency Agreement, the Lease or the  other
Operative Agreements, (i) grant easements and other rights in
the  nature of easements with respect to such Property,  (ii)
release  existing easements or other rights in the nature  of
easements  which are for the benefit of such Property,  (iii)
execute  and deliver to any Person any instrument appropriate
to  confirm  or  effect  such grants or  releases,  and  (iv)
execute  and  deliver to any Person such other  documents  or
materials  in  connection with the acquisition,  development,
construction,  testing  or operation of  any  such  Property,
including  without limitation reciprocal easement agreements,
construction  contracts,  operating  agreements,  development
agreements,   plats,   replats  or   subdivision   documents;
provided,  that each of the agreements referred  to  in  this
Section  8.5 shall be of the type normally executed  by  such
Lessee  in the ordinary course of such Lessee's business  and
shall  be  on  commercially reasonable terms  so  as  not  to
diminish the value of such Property in any material respect.

     8.6. Appointment by the Agent, the Lenders, the Holders
     and the Owner Trustee.

       The  Holders  hereby  appoint  the  Agent  to  act  as
collateral agent for the Holders in connection with the  Lien
granted  by  the  Security Documents  to  secure  the  Holder
Amount.   The Lenders and the Holders acknowledge  and  agree
and  direct that the rights and remedies of the beneficiaries
of  the Lien of the Security Documents shall be exercised  by
the  Agent  on  behalf  of the Lenders  and  the  Holders  as
directed  from  time to time by the Majority Secured  Parties
or,  pursuant to Sections 8.2(h) and 12.4, all of the Lenders
and  the Holders, as the case may be; provided, in all cases,
the  Agent shall allocate payments and other amounts received
in  accordance  with  Section  8.7.   The  Agent  is  further
appointed  to provide notices under the Operative  Agreements
on  behalf of the Owner Trustee (as determined by the  Agent,
in  its reasonable discretion), to receive notices under  the
Operative  Agreements  on behalf of  the  Owner  Trustee  and
(subject  to Sections 8.5 and 9.2) to take such other  action
under the Operative Agreements on behalf of the Owner Trustee
as  the  Agent  shall determine in its reasonable  discretion
from   time   to   time.   The  Agent  hereby  accepts   such
appointments.  For purposes hereof, the provisions of Section
7 of the Credit Agreement, together with such other terms and
provisions  of  the Credit Agreement and the other  Operative
Agreements  as  required  for  the  full  interpretation  and
operation  of  Section 7 of the Credit Agreement  are  hereby
incorporated  by  reference as if  restated  herein  for  the
mutual benefit of the Agent and each Holder as if each Holder
were  a  Lender thereunder.  Outstanding Holder Advances  and
outstanding  Loans  shall  each be  taken  into  account  for
purposes  of determining Majority Secured Parties.   Further,
the Agent shall be entitled to take such action on behalf  of
the  Owner  Trustee as is delegated to the  Agent  under  any
Operative  Agreement (whether express or implied) as  may  be
reasonably  incidental  thereto.  The parties  hereto  hereby
agree  to the provisions contained in this Section 8.6.   Any
appointment  of a successor agent under Section  7.9  of  the
Credit Agreement shall also be effective as an appointment of
a successor agent for purposes of this Section 8.6.

     8.7. Collection and Allocation of Payments and Other
     Amounts.

           (a)   Each  Credit  Party has agreed  pursuant  to
     Section  5.8 and otherwise in accordance with the  terms
     of  this  Agreement to pay to (i) the Agent any and  all
     Rent (excluding Excepted Payments) and any and all other
     amounts  of any kind or type under any of the  Operative
     Agreements  due  and owing or payable to  any  Financing
     Party  and (ii) each Financing Party as appropriate  the
     Excepted  Payments.  Promptly after receipt,  the  Agent
     shall  apply and allocate, in accordance with the  terms
     of  this  Section  8.7, such amounts received  from  any
     Credit Party and all other payments, receipts and  other
     consideration  of any kind whatsoever  received  by  the
     Agent  pursuant to the Security Agreement  or  otherwise
     received  by  the Agent, the Holders or  the  Lender  in
     connection  with the Collateral, the Security  Documents
     or  any  of  the  other  Operative Agreements.   Ratable
     distributions  among the Lenders and the  Holders  under
     this Section 8.7 shall be made based on (in the case  of
     the  Lenders) the ratio of the outstanding Loans to  the
     aggregate Property Cost and (in the case of the Holders)
     the  ratio  of  the outstanding Holder Advances  to  the
     aggregate  Property  Cost.  Ratable distributions  among
     the  Tranche A Lenders under this Section 8.7  shall  be
     made  based  on  the ratio of the individual  Tranche  A
     Lender's Commitment for Tranche A Loans to the aggregate
     of all the Tranche A Lenders' Commitments for Tranche  A
     Loans. Ratable distributions among the Tranche B Lenders
     under  this Section 8.7 shall be made based on the ratio
     of  the  individual  Tranche B Lender's  Commitment  for
     Tranche  B  Loans to the aggregate of all the Tranche  B
     Lenders'  Commitments  for  Tranche  B  Loans.   Ratable
     distributions among the Lenders (in situations where the
     Tranche  A  Lenders  are  not  differentiated  from  the
     Tranche  B Lenders) shall be made based on the ratio  of
     the  individual Lender's Commitment to the aggregate  of
     all  the  Lenders'  Commitments.  Ratable  distributions
     among  the Holders under this Section 8.7 shall be based
     on   the   ratio  of  the  individual  Holder's   Holder
     Commitment  to the aggregate of all the Holders'  Holder
     Commitments.

           (b)   Payments and other amounts received  by  the
     Agent from time to time in accordance with the terms  of
     subparagraph  (a)  shall  be applied  and  allocated  as
     follows (subject in all cases to Section 8.7(c)):

                (i)  Any such payment or amount identified as
          or  deemed  to be Basic Rent shall be  applied  and
          allocated  by  the  Agent  first,  ratably  to  the
          Lenders   and  the  Holders  for  application   and
          allocation to the payment of interest on the  Loans
          and thereafter the principal of the Loans which  is
          due and payable on such date and to the payment  of
          accrued  Holder Yield with respect  to  the  Holder
          Advances  and thereafter the portion of the  Holder
          Advances which is due on such date; and second,  if
          no  Default  or Event of Default is in effect,  any
          excess  shall be paid to the applicable  Lessee  or
          such Person or Persons as the applicable Lessee may
          designate; provided, that if a Default or Event  of
          Default  is  in effect, such excess (if any)  shall
          instead  be held by the Agent until the earlier  of
          (I)  the  first date thereafter on which no Default
          or  Event  of Default shall be in effect (in  which
          case such payments or returns shall then be made to
          the  applicable Lessee such other Person or Persons
          as  the  applicable Lessee may designate) and  (II)
          the  Maturity Date or the Expiration Date,  as  the
          case  may  be  (or, if earlier,  the  date  of  any
          Acceleration), in which case such amounts shall  be
          applied and allocated in the manner contemplated by
          Section 8.7(b)(iv).

                (ii)  If on any date the Agent or the  Lessor
          shall  receive  any amount in respect  of  (A)  any
          Casualty   or  Condemnation  pursuant  to  Sections
          15.1(a)  or  15.1(g)  of the Lease  (excluding  any
          payments  in respect thereof which are  payable  to
          the  Lessee  that  has executed a Lease  Supplement
          with respect to the applicable Property subject  to
          such  Casualty  or Condemnation in accordance  with
          the  Lease),  or  (B)  the  Termination  Value   in
          connection  with  the  delivery  of  a  Termination
          Notice pursuant to Article XVI of the Lease, or (C)
          the   Termination  Value  in  connection  with  the
          exercise of the Purchase Option under Section  20.1
          of  the Lease or the exercise of the option of  the
          Lessor  to  transfer the Properties to  the  Lessee
          that  has executed a Lease Supplement with  respect
          to the applicable Property pursuant to Section 20.3
          of  the  Lease, or (D) any payment required  to  be
          made  or  elected  to be made by  the  Construction
          Agent  that  has  executed a Lease Supplement  with
          respect  to  the applicable Property to the  Lessor
          pursuant to the terms of the Agency Agreement, then
          in  each case, the Lessor shall be required to  pay
          such  amount  received (1) if no  Acceleration  has
          occurred,  to prepay the principal balance  of  the
          Loans and the Holder Advances, on a pro rata basis,
          a  portion of such amount to be distributed to  the
          Lenders  and  the Holders or (2) if an Acceleration
          has  occurred, to apply and allocate  the  proceeds
          respecting    Sections    8.7(b)(ii)(A)     through
          8.7(b)(ii)(D)    in   accordance    with    Section
          8.7(b)(iii) hereof.

                (iii)      An  amount equal  to  any  payment
          identified  as  proceeds  of  the  sale  or   other
          disposition   (or  lease  upon  the   exercise   of
          remedies) of the Properties or any portion thereof,
          whether  pursuant to Article XXII of the  Lease  or
          the   exercise  of  remedies  under  the   Security
          Documents  or otherwise, the execution of  remedies
          set  forth in the Lease and any payment in  respect
          of excess wear and tear pursuant to Section 22.3 of
          the Lease (whether such payment relates to a period
          before or after the Construction Period Termination
          Date)  shall be applied and allocated by the  Agent
          first, ratably to the payment of the principal  and
          interest  of  the Tranche B Loans then outstanding,
          second,  ratably to the payment to the  Holders  of
          the  outstanding principal balance  of  all  Holder
          Advances  plus  all outstanding Holder  Yield  with
          respect to such outstanding Holder Advances, third,
          to  the  extent  such  amount exceeds  the  maximum
          amount  to  be  returned pursuant to the  foregoing
          provisions of this paragraph (iii), ratably to  the
          payment  of  the  principal  and  interest  of  the
          Tranche  A Loans then outstanding, fourth,  to  any
          and  all  other  amounts owing under the  Operative
          Agreements  to  the  Lenders under  the  Tranche  B
          Loans,  fifth,  to any and all other amounts  owing
          under  the  Operative Agreements  to  the  Holders,
          sixth, to any and all other amounts owing under the
          Operative  Agreements  to  the  Lenders  under  the
          Tranche A Loans, and seventh, to the extent  moneys
          remain after application and allocation pursuant to
          clauses  first through sixth above,  to  the  Owner
          Trustee  for application and allocation to any  and
          all other amounts owing to the Holders or the Owner
          Trustee   and  as  the  Holders  shall   determine;
          provided, where no Event of Default shall exist and
          be  continuing  and a prepayment is  made  for  any
          reason with respect to less than the full amount of
          the  outstanding principal amount of the Loans  and
          the outstanding Holder Advances, the proceeds shall
          be applied and allocated ratably to the Lenders and
          to the Holders.

                (iv)  An amount equal to (A) any such payment
          identified as a payment pursuant to Section 22.1(b)
          of the Lease (or otherwise) of the Maximum Residual
          Guarantee Amount (and any such lesser amount as may
          be  required  by Section 22.1(b) of the  Lease)  in
          respect of the Properties and (B) any other  amount
          payable  upon  any exercise of remedies  after  the
          occurrence  of an Event of Default not  covered  by
          Sections  8.7(b)(i) or 8.7(b)(iii) above (including
          without   limitation   any   amount   received   in
          connection  with  an Acceleration  which  does  not
          represent proceeds from the sale or liquidation  of
          the Properties), shall be applied and allocated  by
          the  Agent  first, ratably, to the payment  of  the
          principal and interest balance of Tranche  A  Loans
          then outstanding, second, ratably to the payment of
          the principal and interest balance of the Tranche B
          Loans  then  outstanding,  third,  ratably  to  the
          payment  of  the principal balance  of  all  Holder
          Advances  plus  all outstanding Holder  Yield  with
          respect   to  such  outstanding  Holder   Advances,
          fourth,  to the payment of any other amounts  owing
          to  the Lenders hereunder or under any of the other
          Operative  Agreement,  and  fifth,  to  the  extent
          moneys  remain  after  application  and  allocation
          pursuant to clauses first through fourth above,  to
          the Owner Trustee for application and allocation to
          Holder  Advances  and Holder Yield  and  any  other
          amounts  owing to the Holders or the Owner  Trustee
          as the Holders shall determine.

                (v)   An  amount  equal to any  such  payment
          identified  as Supplemental Rent shall  be  applied
          and  allocated by the Agent to the payment  of  any
          amounts  then owing to the Agent, the Lenders,  the
          Holders  and  the  other parties to  the  Operative
          Agreements  (or any of them) (other than  any  such
          amounts   payable   pursuant   to   the   preceding
          provisions  of  this Section 8.7(b))  as  shall  be
          determined   by   the  Agent  in   its   reasonable
          discretion;  provided, however,  that  Supplemental
          Rent  received upon the exercise of remedies  after
          the  occurrence  and continuance  of  an  Event  of
          Default  in  lieu  of  or in  substitution  of  the
          Maximum  Residual Guarantee Amount or as a  partial
          payment  thereon shall be applied and allocated  as
          set forth in Section 8.7(b)(iv).

                (vi)  The  Agent  in its reasonable  judgment
          shall identify the nature of each payment or amount
          received  by the Agent and apply and allocate  each
          such amount in the manner specified above.

           (c)   Upon  the payment in full of the Loans,  the
     Holder Advances and all other amounts then due and owing
     by  the  Owner  Trustee hereunder or  under  any  Credit
     Document  and  the payment in full of all other  amounts
     then  due  and  owing to the Lenders, the  Holders,  the
     Agent, the Owner Trustee and the other Financing Parties
     pursuant   to  the  Operative  Agreements,  any   moneys
     remaining  with  the  Agent shall  be  returned  to  the
     applicable  Lessee.  In the event of an Acceleration  it
     is  agreed that, prior to the application and allocation
     of  amounts received by the Agent in the order described
     in  Section 8.7(b) above or any distribution of money to
     the  applicable Lessee, any such amounts shall first  be
     applied and allocated to the payment of (i) any and  all
     sums  advanced  by the Agent in order  to  preserve  the
     Collateral  or  to preserve its Lien thereon,  (ii)  the
     expenses  of  retaking, holding, preparing for  sale  or
     lease,  selling or otherwise disposing or  realizing  on
     the  Collateral, or of any exercise by the Agent of  its
     rights  under  the  Security  Documents,  together  with
     reasonable attorneys' fees and expenses and court  costs
     and  (iii) any and all other amounts reasonably owed  to
     the  Agent  under or in connection with the transactions
     contemplated  by  the  Operative  Agreements  (including
     without limitation any accrued and unpaid administration
     fees).

     8.8. Release of Properties, etc.

      If the Lessee that has executed a Lease Supplement with
respect  to a particular Property shall at any time  purchase
such  Property  pursuant to the Lease,  or  the  Construction
Agent that has executed a Lease Supplement with respect to  a
particular Property shall purchase such Property pursuant  to
the  Agency  Agreement, or if any Property shall be  sold  in
accordance  with  Article  XXII  of  the  Lease,  then,  upon
satisfaction by the Owner Trustee of its obligation to prepay
the Loans, Holder Advances and all other amounts owing to the
Lenders  and the Holders under the Operative Agreements,  the
Agent  is  hereby  authorized and directed  to  release  such
Properties  from the Liens created by the Security  Documents
to the extent of its interest therein.  In addition, upon the
termination of the Commitments and the Holder Commitments and
the payment in full of the Loans, the Holder Advances and all
other  amounts  owing  by the Owner Trustee  and  the  Credit
Parties hereunder or under any other Operative Agreement  the
Agent is hereby authorized and directed to release all of the
Properties  from the Liens created by the Security  Documents
to  the extent of its interest therein.  Upon request of  the
Owner Trustee following any such release, the Agent shall, at
the  sole cost and expense of the Lessee, execute and deliver
to the Owner Trustee and the Credit Parties such documents as
the  Owner  Trustee  or the Credit Parties  shall  reasonably
request to evidence such release.

      8.9   Appointment of the Guarantor as  Agent  for  each
      Lessee.

      Each Lessee and each Construction Agent hereby appoints
the Guarantor to act as its agent for all purposes under this
Agreement  and  the  other Operative  Agreements  (including,
without  limitation, with respect to all matters  related  to
the  borrowing  and repayment of Loans and Holder  Advances).
Each  Lessee  and  each Construction Agent  acknowledges  and
agrees  that (a) the Guarantor may execute such documents  on
behalf  of  any Lessee or Construction Agent as the Guarantor
deems  appropriate in its sole discretion and each Lessee  or
Construction Agent shall be bound by and obligated by all  of
the  terms of any such document executed by the Guarantor  on
its  behalf, (b) any notice or other communication  delivered
by  the  Agent or any other Financing Party hereunder to  the
Guarantor  shall  be deemed to have been  delivered  to  each
Lessee and each Construction Agent and (c) the Agent and each
of  the  other Financing Parties shall accept (and  shall  be
permitted  to rely on) any document or agreement executed  by
the  Guarantor on behalf of any Lessee or Construction Agent.
Each  Financing Party agrees that any notice required  to  be
given  to  any Lessee or Construction Agent (other  than  the
Guarantor)  shall  also  be given to  the  Guarantor  in  its
capacity as agent under this Section 8.9.

               SECTION 9.  CREDIT AGREEMENT AND TRUST
                             AGREEMENT.

     9.1. Guarantor's Credit Agreement Rights.

      Notwithstanding anything to the contrary  contained  in
the  Credit  Agreement, the Agent, the Lenders, the  Holders,
the  Credit Parties and the Owner Trustee hereby agree  that,
prior  to  the occurrence and continuation of any Default  or
Event  of  Default,  the Guarantor shall have  the  following
rights:

           (a)   the  right to designate an account to  which
     amounts  funded under the Operative Agreements shall  be
     credited  pursuant  to  Section  2.3(a)  of  the  Credit
     Agreement;

            (b)   the  right  to  terminate  or  reduce   the
     Commitments  pursuant to Section 2.5(a)  of  the  Credit
     Agreement;

           (c)   the  right  to exercise the  conversion  and
     continuation  options pursuant to  Section  2.7  of  the
     Credit Agreement;

           (d)   the  right  to receive any  notice  and  any
     certificate,  in  each case issued pursuant  to  Section
     2.11(a) of the Credit Agreement;

           (e)   the right to replace any Lender pursuant  to
     Section 2.11(b) of the Credit Agreement;

           (f)   the  right  to approve any  successor  agent
     pursuant to Section 7.9 of the Credit Agreement; and

           (g)   the right to consent to any assignment by  a
     Lender  to  which  the Lessor has the right  to  consent
     pursuant to Section 9.8 of the Credit Agreement.

     9.2. The Guarantor's Trust Agreement Rights.

      Notwithstanding anything to the contrary  contained  in
the  Trust  Agreement, the Credit Parties, the Owner  Trustee
and  the  Holders hereby agree that, prior to the  occurrence
and  continuation  of any Default or Event  of  Default,  the
Guarantor shall have the following rights:

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

           (b)   the  right  to receive any  notice  and  any
     certificate,  in  each case issued pursuant  to  Section
     3.9(a) of the Trust Agreement;

           (c)   the right to replace any Holder pursuant  to
     Section 3.9(b) of the Trust Agreement;

           (d)   the  right  to exercise the removal  options
     contained   in  Section  9.1  of  the  Trust  Agreement;
     provided, however, that no removal of the Owner  Trustee
     and  appointment  of a successor Owner  Trustee  by  the
     Holders  pursuant to Section 9.1 of the Trust  Agreement
     shall be made without the prior written consent (not  to
     be unreasonably withheld or delayed) of the Lessee.

                    SECTION 10.  TRANSFER OF INTEREST.

     10.1.     Restrictions on Transfer.

     Each Lender may participate, assign or transfer all or a
portion  of  its  interest  hereunder  and  under  the  other
Operative Agreements in accordance with Sections 9.7 and  9.8
of  the  Credit  Agreement; provided, that each  Lender  that
participates,  assigns or transfers all or a portion  of  its
interest  hereunder and under the other Operative  Agreements
shall  deliver  to  the Agent a copy of each  Assignment  and
Acceptance  (as  referenced  in Section  9.8  of  the  Credit
Agreement)  for  purposes of maintaining the  Register.   The
Holders  may,  directly  or  indirectly,  assign,  convey  or
otherwise  transfer any of their right, title or interest  in
or  to the Trust Estate or the Trust Agreement with the prior
written  consent of the Agent and each Lessee (which  consent
shall  not  be  unreasonably  withheld  or  delayed)  and  in
accordance  with the terms of Section 11.8(b)  of  the  Trust
Agreement.  The Owner Trustee may, subject to the  rights  of
each   Lessee  under  the  Lease  and  the  other   Operative
Agreements  and  to  the  Lien  of  the  applicable  Security
Documents  but  only with the prior written  consent  of  the
Agent (which consent may be withheld by the Agent in its sole
discretion) and (provided, no Default or Event of Default has
occurred and is continuing) with the consent of each  Lessee,
directly or indirectly, assign, convey, appoint an agent with
respect to enforcement of, or otherwise transfer any  of  its
right,  title or interest in or to any Property,  the  Lease,
the  Trust  Agreement  and  the  other  Operative  Agreements
(including  without  limitation any right to  indemnification
thereunder), or any other document relating to a Property  or
any interest in a Property as provided in the Trust Agreement
and  the  Lease.  The provisions of the immediately preceding
sentence  shall  not apply to the obligations  of  the  Owner
Trustee  to transfer Property to any Lessee or a third  party
purchaser pursuant to Article XXII of the Lease upon  payment
for such Property in accordance with the terms and conditions
of  the  Lease.   No  Credit Party  may  assign  any  of  the
Operative  Agreements  or any of their respective  rights  or
obligations  thereunder or with respect to  any  Property  in
whole  or  in  part to any Person without the  prior  written
consent  of  the  Agent, the Lenders,  the  Holders  and  the
Lessor.

     10.2.     Effect of Transfer.

      From and after any transfer effected in accordance with
this  Section  10, the transferor shall be released,  to  the
extent  of  such transfer, from its liability  hereunder  and
under  the other documents to which it is a party in  respect
of  obligations to be performed on or after the date of  such
transfer; provided, however, that any transferor shall remain
liable hereunder and under such other documents to the extent
that the transferee shall not have assumed the obligations of
the  transferor thereunder.  Upon any transfer by  the  Owner
Trustee,  a  Holder or a Lender as above provided,  any  such
transferee shall assume the obligations of the Owner Trustee,
the  Holder or the Lender, as the case may be, and  shall  be
deemed an "Owner Trustee", "Holder", or "Lender", as the case
may be, for all purposes of such documents and each reference
herein  to  the  transferor  shall  thereafter  be  deemed  a
reference  to  such  transferee for all purposes,  except  as
provided  in  the  preceding sentence.   Notwithstanding  any
transfer of all or a portion of the transferor's interest  as
provided in this Section 10, the transferor shall be entitled
to  all benefits accrued and all rights vested prior to  such
transfer    including    without   limitation    rights    to
indemnification under any such document.

                    SECTION 11.  INDEMNIFICATION.

     11.1.     General Indemnity.

      Subject  to  Section 11.6, whether or not  any  of  the
transactions  contemplated hereby shall be  consummated,  the
Indemnity Provider hereby assumes liability for and agrees to
defend,  indemnify and hold harmless each Indemnified  Person
on  an After Tax Basis from and against any Claims, which may
be imposed on, incurred by or asserted against an Indemnified
Person  by  any  third  party, including  without  limitation
Claims  arising from the negligence of an Indemnified  Person
(but  not  to  the extent such Claims arise  from  the  gross
negligence  or willful misconduct of such Indemnified  Person
itself,  as  determined by a court of competent jurisdiction,
as  opposed to gross negligence or willful misconduct imputed
to such Indemnified Person) in any way relating to or arising
or   alleged  to  arise  out  of  the  execution,   delivery,
performance  or enforcement of this Agreement, the  Lease  or
any  other Operative Agreement or on or with respect  to  any
Property   or   any  component  thereof,  including   without
limitation  Claims  in  any way relating  to  or  arising  or
alleged  to  arise  out  of  (a) the financing,  refinancing,
purchase,    acceptance,   rejection,   ownership,    design,
construction,    refurbishment,    development,     delivery,
acceptance,  nondelivery,  leasing,  subleasing,  possession,
use,  occupancy, operation, maintenance repair, modification,
transportation,   condition,   sale,   return,   repossession
(whether  by summary proceedings or otherwise), or any  other
disposition  of  any Property or any part thereof,  including
without limitation the acquisition, holding or disposition of
any interest in the Property, lease or agreement comprising a
portion  of  any thereof; (b) any latent or other defects  in
any   Property  or  any  portion  thereof  whether   or   not
discoverable  by  an  Indemnified  Person  or  the  Indemnity
Provider;   (c)   a   violation   of   Environmental    Laws,
Environmental  Claims  or other loss  of  or  damage  to  any
property  or  the environment relating to the  Property,  the
Lease,  the  Agency Agreement or the Indemnity Provider;  (d)
the  Operative  Agreements, or any  transaction  contemplated
thereby; (e) any breach by the Indemnity Provider of  any  of
its   representations  or  warranties  under  the   Operative
Agreements  to  which the Indemnity Provider is  a  party  or
failure  by the Indemnity Provider to perform or observe  any
covenant or agreement to be performed by it under any of  the
Operative   Agreements;  (f)  the  transactions  contemplated
hereby or by any other Operative Agreement, in respect of the
application  of Parts 4 and 5 of Subtitle B  of  Title  I  of
ERISA;   (g)  personal  injury,  death  or  property  damage,
including  without  limitation  Claims  based  on  strict  or
absolute liability in tort; and (h) any fees, expenses and/or
other   assessments  by  any  business  park  or  any   other
applicable  entity  with  oversight  responsibility  for  the
applicable Property.

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

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

      The  party controlling the response to any Claim  shall
consult  in  good  faith with the non-controlling  party  and
shall  keep the non-controlling party reasonably informed  as
to  the conduct of the response to such Claim; provided, that
all  decisions ultimately shall be made in the discretion  of
the controlling party.  The parties agree that an Indemnified
Person  may  at any time decline to take further action  with
respect  to  the response to such Claim and may  settle  such
Claim  if  such Indemnified Person shall waive its rights  to
any  indemnity  from  the Indemnity Provider  that  otherwise
would  be  payable in respect of such Claim (and  any  future
Claim,  the pursuit of which is precluded by reason  of  such
resolution  of  such Claim) and shall pay  to  the  Indemnity
Provider  any  amount  previously paid  or  advanced  by  the
Indemnity  Provider pursuant to this Section 11.1 by  way  of
indemnification  or  advance for the  payment  of  an  amount
regarding such Claim.

     Notwithstanding the foregoing provisions of this Section
11.1, an Indemnified Person shall not be required to take any
action  and the Indemnity Provider shall not be permitted  to
respond  to  any  Claim  in  its own  name  or  that  of  the
Indemnified  Person unless (A) the Indemnity  Provider  shall
have  agreed to pay and shall pay to such Indemnified  Person
on  demand  and  on an After Tax Basis all reasonable  costs,
losses  and  expenses that such Indemnified  Person  actually
incurs  in  connection  with such  Claim,  including  without
limitation all reasonable legal, accounting and investigatory
fees  and  disbursements and, if the Indemnified  Person  has
informed  the Indemnity Provider that it intends  to  contest
such Claim (whether or not the control of the contest is then
assumed  by  the Indemnity Provider), the Indemnity  Provider
shall  have  agreed that the Claim is an indemnifiable  Claim
hereunder, (B) in the case of a Claim that must be pursued in
the  name of an Indemnified Person (or an Affiliate thereof),
the  amount  of the potential indemnity (taking into  account
all  similar  or logically related Claims that have  been  or
could  be  raised  for which the Indemnity  Provider  may  be
liable  to pay an indemnity under this Section 11.1)  exceeds
$25,000 (or such lesser amount as may be subsequently  agreed
between  the Indemnity Provider and the Indemnified  Person),
(C)  the  Indemnified Person shall have reasonably determined
that  the  action to be taken will not result in any material
danger  of sale, forfeiture or loss of the Property,  or  any
part thereof or interest therein, will not interfere with the
payment  of  Rent,  and will not result in risk  of  criminal
liability, (D) if such Claim shall involve the payment of any
amount  prior to the resolution of such Claim, the  Indemnity
Provider shall provide to the Indemnified Person an interest-
free  advance  in  an  amount equal to the  amount  that  the
Indemnified Person is required to pay (with no additional net
after-tax cost to such Indemnified Person) prior to the  date
such payment is due, (E) in the case of a Claim that must  be
pursued in the name of an Indemnified Person (or an Affiliate
thereof), the Indemnity Provider shall have provided to  such
Indemnified Person an opinion of independent counsel selected
by  the Indemnity Provider and reasonably satisfactory to the
Indemnified Person stating that a reasonable basis exists  to
contest  such  Claim  (or, in the case of  an  appeal  of  an
adverse  determination, an opinion of  such  counsel  to  the
effect  that the position asserted in such appeal  will  more
likely  than  not prevail) and (F) no Event of Default  shall
have  occurred  and  be continuing.  In  no  event  shall  an
Indemnified Person be required to appeal an adverse  judicial
determination  to  the  United  States  Supreme  Court.    In
addition,  an  Indemnified Person shall not  be  required  to
contest  any  Claim in its name (or that of an Affiliate)  if
the  subject  matter thereof shall be of a continuing  nature
and  shall have previously been decided adversely by a  court
of  competent jurisdiction pursuant to the contest provisions
of  this Section 11.1, unless there shall have been a  change
in law (or interpretation thereof) and the Indemnified Person
shall have received, at the Indemnity Provider's expense,  an
opinion  of  independent counsel selected  by  the  Indemnity
Provider and reasonably acceptable to the Indemnified  Person
stating  that  as  a  result  of  such  change  in  law   (or
interpretation thereof), it is more likely than not that  the
Indemnified Person will prevail in such contest.  In no event
shall the Indemnity Provider be permitted to adjust or settle
any  Claim  without the consent of the Indemnified Person  to
the extent any such adjustment or settlement involves, or  is
reasonably  likely to involve, any performance by or  adverse
admission by or with respect to the Indemnified Person.

     11.2.     General Tax Indemnity.

            (a)   Subject  to  Section  11.6.  the  Indemnity
     Provider  shall pay and assume liability for,  and  does
     hereby  agree  to  indemnify, protect  and  defend  each
     Property  and  all Indemnified Persons,  and  hold  them
     harmless against, all Impositions on an After Tax Basis,
     and  all  payments pursuant to the Operative  Agreements
     shall  be  made free and clear of and without  deduction
     for any and all present and future Impositions.

           (b)   Notwithstanding anything to the contrary  in
     Section  11.2(a) hereof, the following shall be excluded
     from the indemnity required by Section 11.2(a):

                    (i)  Taxes (other than Taxes that are, or
          are  in  the  nature of, sales, use, rental,  value
          added, transfer or property taxes) that are imposed
          on a Indemnified Person (other than the Lessor, the
          Owner  Trustee and the Trust) by the United  States
          federal government that are based on or measured by
          the  net income (including without limitation taxes
          based  on capital gains and minimum taxes) of  such
          Person; provided, that this clause (i) shall not be
          interpreted to prevent a payment from being made on
          an  After  Tax  Basis if such payment is  otherwise
          required to be so made;

                    (ii) Taxes (other than Taxes that are, or
          are  in  the  nature of, sales, use, rental,  value
          added, transfer or property taxes) that are imposed
          on  any  Indemnified Person (other than the Lessor,
          the  Owner Trustee and the Trust) by any  state  or
          local  jurisdiction or taxing authority within  any
          state or local jurisdiction and that are based upon
          or  measured  by the net income (including  without
          limitation taxes based on capital gains and minimum
          taxes)  of  such Person; provided that  such  Taxes
          shall not be excluded under this subparagraph  (ii)
          to  the  extent such Taxes would have been  imposed
          had the location, possession or use of any Property
          in, the location or the operation of the applicable
          Lessee   in,  or  the  applicable  Lessee's  making
          payments  under the Operative Agreements from,  the
          jurisdiction  imposing such  Taxes  been  the  sole
          connection between such Indemnified Person and  the
          jurisdiction   imposing   such   Taxes;   provided,
          further,  that  this  clause  (ii)  shall  not   be
          interpreted to prevent a payment from being made on
          an  After  Tax  Basis if such payment is  otherwise
          required to be so made;

                     (iii)      any  Tax  to  the  extent  it
          relates  to any act, event or omission that  occurs
          after  the  termination of the Lease and redelivery
          or  sale  of  the Property in accordance  with  the
          terms of the Lease (but not any Tax that relates to
          such termination, redelivery or sale and/or to  any
          period  prior  to such termination,  redelivery  or
          sale); and

                     (iv)  any Taxes which are imposed on  an
          Indemnified  Person  as  a  result  of  the   gross
          negligence   or   willful   misconduct   of    such
          Indemnified Person itself, as determined by a court
          of  competent  jurisdiction (as  opposed  to  gross
          negligence  or willful misconduct imputed  to  such
          Indemnified  Person), but not Taxes  imposed  as  a
          result  of  ordinary negligence of such Indemnified
          Person;

          (c)   (i)  Subject to the terms of Section 11.2(f),
          the  Indemnity Provider shall pay or  cause  to  be
          paid   all  Impositions  directly  to  the   taxing
          authorities  where feasible and  otherwise  to  the
          Indemnified   Person,  as  appropriate,   and   the
          Indemnity  Provider shall at its own expense,  upon
          such   Indemnified  Person's  reasonable   request,
          furnish  to  such  Indemnified  Person  copies   of
          official  receipts  or  other  satisfactory   proof
          evidencing such payment.

                    (ii) In the case of Impositions for which
          no contest is conducted pursuant to Section 11.2(f)
          and  which the Indemnity Provider pays directly  to
          the  taxing  authorities,  the  Indemnity  Provider
          shall pay such Impositions prior to the latest time
          permitted  by  the  relevant taxing  authority  for
          timely  payment.   In the case of  Impositions  for
          which   the   Indemnity  Provider   reimburses   an
          Indemnified Person, the Indemnity Provider shall do
          so  within  thirty (30) days after receipt  by  the
          Indemnity  Provider of demand by  such  Indemnified
          Person  describing in reasonable detail the  nature
          of  the  Imposition and the basis  for  the  demand
          (including  without limitation the  computation  of
          the  amount  payable), accompanied by  receipts  or
          other  reasonable evidence of such demand.  In  the
          case   of  Impositions  for  which  a  contest   is
          conducted   pursuant   to  Section   11.2(f),   the
          Indemnity  Provider shall pay such  Impositions  or
          reimburse   such   Indemnified  Person   for   such
          Impositions, to the extent not previously  paid  or
          reimbursed pursuant to subsection (a), prior to the
          latest   time  permitted  by  the  relevant  taxing
          authority  for  timely payment after conclusion  of
          all contests under Section 11.2(f).

                     (iii)      At  the Indemnity  Provider's
          request, the amount of any indemnification  payment
          by  the  Indemnity Provider pursuant to  subsection
          (a)   shall  be  verified  and  certified   by   an
          independent   public   accounting   firm   mutually
          acceptable  to  the  Indemnity  Provider  and   the
          Indemnified Person.  The fees and expenses of  such
          independent public accounting firm shall be paid by
          the  Indemnity  Provider unless  such  verification
          shall  result  in  an adjustment in  the  Indemnity
          Provider's favor of fifteen percent (15%)  or  more
          of  the  payment  as  computed by  the  Indemnified
          Person, in which case such fee shall be paid by the
          Indemnified Person.

           (d)   The  Indemnity Provider shall be responsible
     for  preparing and filing any real and personal property
     or  ad  valorem tax returns in respect of each  Property
     and any other tax returns required for the Owner Trustee
     respecting  the transactions described in the  Operative
     Agreements  (other  than  Owner  Trustee's  income   and
     franchise  tax  returns and returns  relating  to  Taxes
     described in Section 11.2(b) hereof).  In case any other
     report  or tax return shall be required to be made  with
     respect  to  any  obligations of the Indemnity  Provider
     under or arising out of subsection (a) and of which  the
     Indemnity   Provider  has  knowledge  or   should   have
     knowledge, the Indemnity Provider, at its sole cost  and
     expense, shall notify the relevant Indemnified Person of
     such  requirement and (except if such Indemnified Person
     notifies  the  Indemnity Provider that such  Indemnified
     Person  intends  to  prepare and  file  such  report  or
     return) (A) to the extent required or permitted  by  and
     consistent with Legal Requirements, make and file in the
     Indemnity  Provider's  name such  return,  statement  or
     report;  and  (B) in the case of any other such  return,
     statement or report required to be made in the  name  of
     such  Indemnified Person, advise such Indemnified Person
     of  such  fact  and  prepare such return,  statement  or
     report  for filing by such Indemnified Person or,  where
     such  return, statement or report shall be  required  to
     reflect  items  in  addition to any obligations  of  the
     Indemnity  Provider under or arising out  of  subsection
     (a),  provide  such Indemnified Person at the  Indemnity
     Provider's expense with information sufficient to permit
     such  return,  statement or report to be  properly  made
     with   respect  to  any  obligations  of  the  Indemnity
     Provider  under or arising out of subsection (a).   Such
     Indemnified Person shall, upon the Indemnity  Provider's
     request and at the Indemnity Provider's expense, provide
     any  data maintained by such Indemnified Person (and not
     otherwise  available to or within  the  control  of  the
     Indemnity Provider) with respect to each Property  which
     the Indemnity Provider may reasonably require to prepare
     any required tax returns or reports.

          (e)  As between the Indemnity Provider on one hand,
     and   each  Financing  Party  on  the  other  hand,  the
     Indemnity  Provider shall be responsible  for,  and  the
     Indemnity  Provider shall indemnify  and  hold  harmless
     each   Financing  Party  (without  duplication  of   any
     indemnification required by subsection (a)) on an  After
     Tax  Basis against, any obligation for United States  or
     foreign  withholding taxes or similar  levies,  imposts,
     charges, fees, deductions or withholdings (collectively,
     "Withholdings")  imposed  in  respect  of  the  interest
     payable  on  the  Notes, Holder  Yield  payable  on  the
     Certificates or with respect to any other payments under
     the   Operative  Agreement  (all  such  payments   being
     referred  to  herein  as "Exempt Payments"  to  be  made
     without deduction, withholding or set off) (and, if  any
     Financing Party receives a demand for such payment  from
     any  taxing  authority  or  a Withholding  is  otherwise
     required  with  respect  to  any  Exempt  Payment,   the
     Indemnity Provider shall discharge such demand on behalf
     of  such  Financing Party); provided, however, that  the
     obligation of the Indemnity Provider under this  Section
     11.2(e) shall not apply to:

               (i)  Withholdings on any Exempt Payment to any
          Financing  Party which is a non-U.S. Person  unless
          such Financing Party is, on the date hereof (or  on
          the  date  it becomes a Financing Party  hereunder)
          and  on  the  date of any change in  the  principal
          place  of  business or the lending office  of  such
          Financing  Party, entitled to submit  a  Form  1001
          (relating to such Financing Party and entitling  it
          to  a  complete exemption from Withholding on  such
          Exempt  Payment)  or  Form  4224  or  is  otherwise
          subject  to exemption from Withholding with respect
          to such Exempt Payment (except where the failure of
          the   exemption  results  from  a  change  in   the
          principal place of business of the Lessee; provided
          if  a  failure of exemption for any Financing Party
          results  from  a change in the principal  place  of
          business  or lending office of any other  Financing
          Party,  then  such other Financing Party  shall  be
          liable  for  any  Withholding  or  indemnity   with
          respect thereto), or

                (ii)  Any U.S. Taxes imposed solely by reason
          of  the failure by a non-U.S. Person to comply with
          applicable        certification,       information,
          documentation   or  other  reporting   requirements
          concerning the nationality, residence, identity  or
          connections  with the United States of  America  of
          such non-U.S. Person if such compliance is required
          by  statute or regulation of the United  States  of
          America  as  a precondition to relief or  exemption
          from such U.S. Taxes.

     For  the  purposes  of this Section 11.2(e),  (A)  "U.S.
     Person"  shall mean a citizen, national or  resident  of
     the United States of America, a corporation, partnership
     or  other  entity created or organized in or  under  any
     laws  of  the  United  States of America  or  any  State
     thereof,  or  any  estate or trust that  is  subject  to
     Federal income taxation regardless of the source of  its
     income,  (B)  "U.S.  Taxes" shall mean  any  present  or
     future  tax, assessment or other charge or levy  imposed
     by  or on behalf of the United States of America or  any
     taxing  authority thereof or therein,  (C)  "Form  1001"
     shall  mean Form 1001 (Ownership, Exemption, or  Reduced
     Rate  Certificate) of the Department of the Treasury  of
     the  United States of America and (D) "Form 4224"  shall
     mean  Form  4224 (Exemption from Withholding of  Tax  on
     Income Effectively Connected with the Conduct of a Trade
     or  Business in the United States) of the Department  of
     Treasury of the United States of America (or in relation
     to  either such Form such successor and related forms as
     may  from time to time be adopted by the relevant taxing
     authorities of the United States of America to  document
     a  claim to which such Form relates).  Each of the Forms
     referred  to in the foregoing clauses (C) and (D)  shall
     include  such successor and related forms  as  may  from
     time   to  time  be  adopted  by  the  relevant   taxing
     authorities of the United States of America to  document
     a claim to which such Form relates.

          If a Financing Party or an Affiliate with whom such
     Financing  Party  files a consolidated  tax  return  (or
     equivalent)  subsequently receives the  benefit  in  any
     country  of a tax credit or an allowance resulting  from
     U.S.  Taxes  with  respect to which it  has  received  a
     payment  of  an  additional amount  under  this  Section
     11.2(e),  such Financing Party will pay to the Indemnity
     Provider such part of that benefit as in the opinion  of
     such  Financing Party will leave it (after such payment)
     in  a  position  no more and no less favorable  than  it
     would  have  been in if no additional payment  had  been
     required  to  be  paid, provided always  that  (i)  such
     Financing Party will be the sole judge of the amount  of
     any  such  benefit  and  of the  date  on  which  it  is
     received,  (ii)  such  Financing  Party  will  have  the
     absolute discretion as to the order and manner in  which
     it   employs   or  claims  tax  credits  and  allowances
     available to it and (iii) such Financing Party will  not
     be  obliged  to disclose to the Borrower any information
     regarding its tax affairs or tax computations.

           Each non-U.S. Person that shall become a Financing
     Party   after   the   date  hereof   shall,   upon   the
     effectiveness of the related transfer or otherwise  upon
     becoming  a  Financing Party hereunder, be  required  to
     provide all of the forms and statements referenced above
     or other evidences of exemption from Withholdings.

           (f)   If  a  written  Claim is  made  against  any
     Indemnified  Person  or  if  any  proceeding  shall   be
     commenced  against  such Indemnified  Person  (including
     without limitation a written notice of such proceeding),
     for  any  Impositions, the provisions  in  Section  11.1
     relating  to  notification and rights to  contest  shall
     apply;  provided,  however, that the Indemnity  Provider
     shall have the right to conduct and control such contest
     only if such contest involves a Tax other than a Tax  on
     net  income of the Indemnified Person and can be pursued
     independently from any other proceeding involving a  Tax
     liability of such Indemnified Person.

     11.3.     Increased Costs, Illegality, etc.

           (a)  If, due to either (i) the introduction of  or
     any  change  in or in the interpretation of any  law  or
     regulation or (ii) the compliance with any guideline  or
     request  hereafter adopted, promulgated or made  by  any
     central bank or other governmental authority (whether or
     not  having  the  force  of law),  there  shall  be  any
     increase  in the cost to any Financing Party of agreeing
     to  make  or  making, funding or maintaining  Eurodollar
     Loans  and  Eurodollar Holder Advances, then the  Lessee
     shall  from time to time, upon demand by such  Financing
     Party  (with  a  copy of such demand to  the  Agent  but
     subject to Section 11.6 and to the terms of Section 2.11
     of  the Credit Agreement and 3.9 of the Trust Agreement,
     as the case may be), pay to the Agent for the account of
     such  Financing Party additional amounts  sufficient  to
     compensate such Financing Party for such increased cost.
     A  certificate as to the amount of such increased  cost,
     submitted  to the Lessee and the Agent by such Financing
     Party, shall be conclusive and binding for all purposes,
     absent manifest error.

            (b)   If  any  Financing  Party  determines  that
     compliance  with any law or regulation or any  guideline
     or  request  from any central bank or other governmental
     authority (whether or not having the force of  law,  but
     in  each case promulgated or made after the date hereof)
     affects  or would affect the amount of capital  required
     or  expected to be maintained by such Financing Party or
     any  corporation  controlling such Financing  Party  and
     that the amount of such capital is increased by or based
     upon  the existence of such Financing Party's commitment
     to  make Eurodollar Loans and Eurodollar Holder Advances
     and other commitments of this type or upon the Advances,
     then,  upon demand by such Financing Party (with a  copy
     of  such demand to the Agent but subject to Section 11.6
     and to the terms of Section 2.11 of the Credit Agreement
     and 3.9 of the Trust Agreement), the Lessee shall pay to
     the  Agent for the account of such Financing Party, from
     time  to  time  as  specified by such  Financing  Party,
     additional   amounts  sufficient  to   compensate   such
     Financing Party or such corporation in the light of such
     circumstances,  to the extent that such Financing  Party
     reasonably  determines such increase in  capital  to  be
     allocable  to  the  existence of such Financing  Party's
     commitment  to make such Eurodollar Loans and Eurodollar
     Holder  Advances.   A  certificate as  to  such  amounts
     submitted  to the Credit Parties and the Agent  by  such
     Financing Party shall be conclusive and binding for  all
     purposes, absent manifest error.

           (c)  Without limiting the effect of the foregoing,
     the  Lessees shall, subject to Section 11.6, pay to each
     Financing  Party on the last day of the Interest  Period
     therefor  so long as such Financing Party is maintaining
     reserves   against   "Eurocurrency  liabilities"   under
     Regulation  D an additional amount (determined  by  such
     Financing Party and notified to the Lessees through  the
     Agent)  equal to the product of the following  for  each
     Eurodollar  Loan  or Eurodollar Holder Advance,  as  the
     case may be, for each day during such Interest Period:

                (i)   the principal amount of such Eurodollar
          Loan or Eurodollar Holder Advance, as the case  may
          be, outstanding on such day; and

                (ii)  the  remainder of (x)  a  fraction  the
          numerator  of  which is the rate  (expressed  as  a
          decimal)   at  which  interest  accrues   on   such
          Eurodollar  Loan or Eurodollar Holder  Advance,  as
          the  case  may  be,  for such  Interest  Period  as
          provided  in  the  Credit Agreement  or  the  Trust
          Agreement,  as the case may be (less the Applicable
          Percentage),  and the denominator of which  is  one
          (1)  minus  the  effective  rate  (expressed  as  a
          decimal)  at  which such reserve  requirements  are
          imposed  on such Financing Party on such day  minus
          (y) such numerator; and

               (iii)     1/360.

           (d)   Without affecting its rights under  Sections
     11.3(a),  11.3(b) or 11.3(c) or any other  provision  of
     any  Operative  Agreement, each Financing  Party  agrees
     that  if  there  is  any increase  in  any  cost  to  or
     reduction  in  any amount receivable by  such  Financing
     Party  with  respect  to  which  the  Lessees  would  be
     obligated to compensate such Financing Party pursuant to
     Sections 11.3(a) or 11.3(b), such Financing Party  shall
     use  reasonable efforts to select an alternative  office
     for Advances which would not result in any such increase
     in  any cost to or reduction in any amount receivable by
     such   Financing  Party;  provided,  however,  that   no
     Financing   Party  shall  be  obligated  to  select   an
     alternative office for Advances if such Financing  Party
     determines  that (i) as a result of such selection  such
     Financing  Party would be in violation of any applicable
     law,  regulation, treaty, or guideline, or  would  incur
     additional  costs  or  expenses or (ii)  such  selection
     would   be   inadvisable  for  regulatory   reasons   or
     materially  inconsistent  with  the  interests  of  such
     Financing Party.

           (e)   With  reference to the  obligations  of  the
     Lessees  set forth in Sections 11.3(a) through  11.3(d),
     the  Lessees shall not have any obligation to pay to any
     Financing  Party amounts owing under such  Sections  for
     any  period which is more than one (1) year prior to the
     date  upon  which  the request for payment  therefor  is
     delivered to the Lessees.

           (f)   Notwithstanding any other provision of  this
     Agreement, if any Financing Party shall notify the Agent
     that  the  introduction of or any change in  or  in  the
     interpretation  of  any  law  or  regulation  makes   it
     unlawful,  or  any  central bank or  other  governmental
     authority asserts that it is unlawful, for any Financing
     Party  to perform its obligations hereunder to  make  or
     maintain Eurodollar Loans or Eurodollar Holder Advances,
     as  the  case may be, then (i) each Eurodollar  Loan  or
     Eurodollar  Holder  Advance, as the case  may  be,  will
     automatically, at the earlier of the end of the Interest
     Period  for  such  Eurodollar Loan or Eurodollar  Holder
     Advance,  as  the case may be, or the date  required  by
     law,  convert into an ABR Loan or an ABR Holder Advance,
     as  the  case  may be, and (iii) the obligation  of  the
     Financing   Parties   to  make,  convert   or   continue
     Eurodollar Loans or Eurodollar Holder Advances,  as  the
     case  may  be, shall be suspended until the Agent  shall
     notify  the  Lessees  that  such  Financing  Party   has
     determined   that   the   circumstances   causing   such
     suspension no longer exist.

     11.4.     Funding/Contribution Indemnity.

     Subject to Section 11.6 and to the provisions of Section
2.11(a)  of  the  Credit Agreement and 3.9(a)  of  the  Trust
Agreement,  as the case may be, the applicable Lessee  agrees
to  indemnify each Financing Party and to hold each Financing
Party harmless from any loss or reasonable expense which such
Financing Party may sustain or incur as a consequence of  (a)
any default by such Lessee in connection with the drawing  of
funds  for  any  Advance, (b) any default by such  Lessee  in
making  any prepayment after a notice thereof has been  given
in accordance with the provisions of the Operative Agreements
or  (c)  the making of a voluntary or involuntary payment  of
Eurodollar Loans or Eurodollar Holder Advances, as  the  case
may  be,  on  a day which is not the last day of an  Interest
Period  with respect thereto.  Such indemnification shall  be
in  an  amount equal to the excess, if any, of (x) the amount
of  interest or Holder Yield, as the case may be, which would
have  accrued  on  the amount so paid, or  not  so  borrowed,
accepted, converted or continued for the period from the date
of such payment or of such failure to borrow, accept, convert
or  continue to the last day of such Interest Period (or,  in
the case of a failure to borrow, accept, convert or continue,
the Interest Period that would have commenced on the date  of
such  failure) in each case at the applicable Eurodollar Rate
plus  the  Applicable  Percentage for  such  Loan  or  Holder
Advance,  as  the case may be, for such Interest Period  over
(y)  the  amount of interest (as determined by such Financing
Party  in its reasonable discretion) which would have accrued
to such Financing Party on such amount by (i) (in the case of
the Lenders) reemploying such funds in loans of the same type
and  amount  during the period from the date  of  payment  or
failure  to  borrow  to the last day of the  then  applicable
Interest Period (or, in the case of a failure to borrow,  the
Interest Period that would have commenced on the date of such
failure)  and (ii) (in the case of the Holders) placing  such
amount on deposit for a comparable period with leading  banks
in  the  relevant interest rate market.  This covenant  shall
survive  the termination of the Operative Agreements and  the
payment of all other amounts payable hereunder.

     11.5. EXPRESS INDEMNIFICATION FOR ORDINARY
     NEGLIGENCE, STRICT LIABILITY, ETC.

     SUBJECT TO SECTION 11.6, WITHOUT LIMITING THE GENERALITY
OF  THE  INDEMNIFICATION PROVISIONS OF ANY  AND  ALL  OF  THE
OPERATIVE  AGREEMENTS, EACH PERSON PROVIDING  INDEMNIFICATION
OF  ANOTHER  PERSON  UNDER  ANY  OPERATIVE  AGREEMENT  HEREBY
FURTHER  EXPRESSLY  RELEASES EACH  BENEFICIARY  OF  ANY  SUCH
INDEMNIFICATION FROM ALL CLAIMS FOR LOSS OR DAMAGE, DESCRIBED
IN  ANY OPERATIVE AGREEMENT, CAUSED BY ANY ACT OR OMISSION ON
THE PART OF ANY SUCH BENEFICIARY ATTRIBUTABLE TO THE ORDINARY
NEGLIGENCE (WHETHER SOLE OR CONTRIBUTORY) OR STRICT LIABILITY
OF  ANY  SUCH  BENEFICIARY, AND INDEMNIFIES,  EXONERATES  AND
HOLDS  EACH  SUCH  BENEFICIARY FREE  AND  HARMLESS  FROM  AND
AGAINST ANY AND ALL ACTIONS, CAUSES OF ACTION, SUITS, CLAIMS,
LOSSES,  COSTS, LIABILITIES, DAMAGES AND EXPENSES  (INCLUDING
WITHOUT  LIMITATION ATTORNEY'S FEES AND EXPENSES),  DESCRIBED
ABOVE,  INCURRED  BY  ANY SUCH BENEFICIARY  (IRRESPECTIVE  OF
WHETHER  ANY  SUCH BENEFICIARY IS A PARTY TO THE  ACTION  FOR
WHICH  INDEMNIFICATION  UNDER THIS  AGREEMENT  OR  ANY  OTHER
OPERATIVE  AGREEMENT IS SOUGHT) ATTRIBUTABLE TO THE  ORDINARY
NEGLIGENCE (WHETHER SOLE OR CONTRIBUTORY) OR STRICT LIABILITY
OF ANY SUCH BENEFICIARY.

     11.6. Indemnity Prior to Completion Date /
     Construction Period Termination Date.

      Notwithstanding the provisions of Sections 11.1,  11.2,
11.3,  11.4  and 11.5, the Owner Trustee shall  be  the  only
beneficiary  of  the provisions set forth in  Sections  11.1,
11.2,  11.3, 11.4 and 11.5 with respect to any Claim  arising
thereunder  for the period prior to the earlier to  occur  of
the  applicable  Completion Date and the Construction  Period
Termination   Date   related  to  the  applicable   Property;
provided,  however,  such limited rights  of  indemnification
referenced in this sentence (to the extent relating to third-
party  claims) shall be limited to third-party claims  caused
by  or  resulting  from the Indemnity Provider's  actions  or
failures to act while such Construction Period Property is in
the   possession  or  control  of  the  applicable  Indemnity
Provider.  Notwithstanding the foregoing, to the extent  that
the Owner Trustee becomes obligated to any Indemnified Person
pursuant  to  the next succeeding paragraph of Section  11.6,
the Owner Trustee shall be entitled to further indemnity from
the  Indemnity Provider under Sections 11.1, 11.2, 11.3, 11.4
and 11.5, as applicable, with respect to all amounts owing or
paid by it under this Section 11.6.

     To the extent the Indemnity Provider is not obligated to
indemnify  any  Indemnified Person  with  respect  to  Claims
arising under Sections 11.1, 11.2, 11.3, 11.4 or 11.5,  prior
to  the earlier to occur of the applicable Completion Date or
Construction Period Termination Date, the Owner Trustee shall
provide such indemnities in favor of such Indemnified  Person
in  accordance with the relevant provisions of Sections 11.1,
11.2,  11.3,  11.4  or  11.5 as  the  case  may  be.   It  is
acknowledged and agreed that any amount for which  the  Owner
Trustee  becomes obligated to any Indemnified Person pursuant
hereto  shall become a Claim for which the Owner  Trustee  is
entitled to indemnity from the Indemnity Provider.

      THE  INDEMNITY  OBLIGATIONS  UNDERTAKEN  BY  THE  OWNER
TRUSTEE  PURSUANT TO THIS SECTION 11.6 ARE  IN  ALL  RESPECTS
SUBJECT TO THE LIMITATIONS ON LIABILITY REFERENCED IN SECTION
12.9.

                SECTION 12.  MISCELLANEOUS.

     12.1.     Survival of Agreements.

      The representations, warranties, covenants, indemnities
and  agreements of the parties provided for in the  Operative
Agreements,  and the parties' obligations under any  and  all
thereof,  shall  survive the execution and delivery  of  this
Agreement, the transfer of any Property to the Owner Trustee,
the  acquisition of any Property (or any of its  components),
the  construction of any Improvements, the Completion of  any
Property,  any  disposition  of any  interest  of  the  Owner
Trustee in any Property or any interest of the Holders in the
Trust  Estate,  the payment of the Notes and any  disposition
thereof  and  shall be and continue in effect notwithstanding
any  investigation made by any party and the  fact  that  any
party  may  waive  compliance with any of  the  other  terms,
provisions  or conditions of any of the Operative Agreements.
Except  as otherwise expressly set forth herein or  in  other
Operative Agreements, the indemnities of the parties provided
for  in the Operative Agreements shall survive the expiration
or termination of any thereof.

     12.2.     Notices.

      All notices required or permitted to be given under any
Operative  Agreement  shall be in writing.   Notices  may  be
served  by  certified or registered mail, postage  paid  with
return  receipt  requested; by private courier,  prepaid;  by
telex,  facsimile, or other telecommunication device  capable
of  transmitting or creating a written record; or personally.
Mailed notices shall be deemed delivered five (5) days  after
mailing,  properly  addressed.  Couriered  notices  shall  be
deemed  delivered  when delivered as  addressed,  or  if  the
addressee  refuses  delivery,  when  presented  for  delivery
notwithstanding  such  refusal.   Telex  or  telecommunicated
notices  shall  be  deemed delivered when receipt  is  either
confirmed    by   confirming   transmission   equipment    or
acknowledged  by  the  addressee  or  its  office.   Personal
delivery  shall  be  effective when accomplished.   Unless  a
party changes its address by giving notice to the other party
as provided herein, notices shall be delivered to the parties
at the following addresses:

          If to any Construction Agent or any Lessee, to such
     entity  in care of the Guarantor at the address for  the
     Guarantor set forth herein.

           If  to  the  Guarantor,  to  such  entity  at  the
           following address:

               Performance Food Group Company
               6800 Paragon Place, Suite 500
               Richmond, Virginia 23230
               Attention: Roger L. Boeve,
               Chief Financial Officer
               Telephone: (804) 285-5365
               Telecopy:  (804) 285-5360

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

               First Security Bank, National Association
               79 South Main Street, Third Floor
               Salt Lake City, Utah 84111
               Attention: Val T. Orton,
                          Vice President
               Telephone: (801) 246-5300
               Telecopy:  (801) 246-5053

           If  to  the  Holders, to each such Holder  at  the
     address set forth for such Holder on Schedule I  of  the
     Trust Agreement.

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

               First Union National Bank
               c/o First Union Securities, Inc.
               301 South College Street, TW-6
               Charlotte, North Carolina  28288-0166
               Attention: Jane Hurley
               Telephone: (704) 383-3812
               Telecopy:  (704) 383-7989

           If  to any Lender, to it at the address set  forth
     for such Lender in Schedule 2.1 of the Credit Agreement.

           Each  Lessee  and each Construction  Agent  hereby
     agrees  that  the  Guarantor shall be appointed  as  its
     exclusive   agent  to  receive  all  notices   delivered
     pursuant hereto on its behalf, and the Guarantor  hereby
     accepts  such appointment as agent and agrees to  accept
     such   delivery  on  behalf  of  each  Lessee  and  each
     Construction   Agent.   Except   as   limited   by   the
     immediately  preceding sentence, from time to  time  any
     party  may  designate additional parties and/or  another
     address  for  notice purposes by notice to each  of  the
     other  parties hereto.  Each notice hereunder  shall  be
     effective upon receipt or refusal thereof.

     12.3.     Counterparts.

      This Agreement may be executed by the parties hereto in
separate  counterparts, each of which when  so  executed  and
delivered  shall  be an original, but all  such  counterparts
shall   together  constitute  but  one  (1)  and   the   same
instrument.

     12.4.   Terminations, Amendments, Waivers, Etc.;
     Unanimous Vote Matters.

       Each   Basic  Document  may  be  terminated,  amended,
supplemented,  waived or modified only by  an  instrument  in
writing  signed  by, subject to Article  VIII  of  the  Trust
Agreement  regarding termination of the Trust Agreement,  the
Majority Secured Parties and each Credit Party (to the extent
such  Credit  Party  is  a  party to  such  Basic  Document);
provided, to the extent no Default or Event of Default  shall
have occurred and be continuing, the Majority Secured Parties
shall not amend, supplement, waive or modify any provision of
any  Basic  Document in such a manner as to adversely  affect
the  rights  or obligations of any Credit Party  without  the
prior  written  consent (not to be unreasonably  withheld  or
delayed)  of  such  Credit Party.  Each  Operative  Agreement
which  is  not  a Basic Document may be terminated,  amended,
supplemented,  waived or modified only by  an  instrument  in
writing  signed  by  the  parties thereto  and  (without  the
consent  of  any  other  Financing  Party)  the  Agent.    In
addition,  the  Unanimous  Vote  Matters  shall  require  the
consent  of  each  Lender and each Holder  affected  by  such
matter.

      Notwithstanding  the  foregoing, no  such  termination,
amendment, supplement, waiver or modification shall,  without
the consent of the Agent and, to the extent affected thereby,
each  Lender  and each Holder (collectively,  the  "Unanimous
Vote  Matters") (i) reduce the Lender Commitments and/or  the
Holder  Commitments except as otherwise provided  in  Section
2.5  of the Credit Agreement and Section 3.1(e) of the  Trust
Agreement, extend the scheduled date of maturity of any Note,
extend the scheduled Expiration Date, extend any payment date
of  any  Note  or  Certificate, reduce  the  stated  rate  of
interest payable on any Note, reduce the stated Holder  Yield
payable on any Certificate (other than as a result of waiving
the  applicability of any post-default increase  in  interest
rates  or Holder Yields), modify the priority of any Lien  in
favor  of  the Agent under any Security Document, subordinate
any  obligation  owed to such Lender or  Holder,  reduce  any
Lender  Facility Fees or any Holder Facility Fees payable  to
such  Lender  or  Holder  (as the  case  may  be)  under  the
Participation Agreement, extend the scheduled date of payment
of  any  Lender  Facility Fees or any  Holder  Facility  Fees
payable  to  such Lender or Holder (as the case  may  be)  or
extend the expiration date of such Lender's Commitment or the
Holder  Commitment of such Holder, or (ii) terminate,  amend,
supplement,  waive or modify any provision  of  this  Section
12.4  or  reduce the percentages specified in the definitions
of  Majority  Lenders, Majority Holders or  Majority  Secured
Parties,  or  consent to the assignment or  transfer  by  the
Owner Trustee of any of its rights and obligations under  any
Credit  Document  or  release  a  material  portion  of   the
Collateral (except in accordance with Section 8.8) or release
any  Credit  Party from its obligations under  any  Operative
Agreement or otherwise alter any payment obligations  of  any
Credit  Party to the Lessor or any Financing Party under  the
Operative  Agreements, or (iii) terminate, amend, supplement,
waive  or  modify any provision of Section 7  of  the  Credit
Agreement, or (iv) permit Advances for Work in excess of  the
Construction  Budget, or (v) eliminate the  automatic  option
under  Section 5.3(b) of the Agency Agreement requiring  that
the  Construction  Agent pay certain  liquidated  damages  in
exchange for the conveyance of a Property to the Construction
Agent.   Any such termination, amendment, supplement,  waiver
or  modification shall apply equally to each of  the  Lenders
and the Holders and shall be binding upon all the parties  to
this  Agreement.  In the case of any waiver,  each  party  to
this  Agreement shall be restored to its former position  and
rights  under  the Operative Agreements, and any  Default  or
Event  of Default waived shall be deemed to be cured and  not
continuing; but no such waiver shall extend to any subsequent
or  other  Default or Event of Default, or impair  any  right
consequent thereon. The parties to this Agreement agree  that
any  increase  in the Lender Commitment of any Lender  and/or
any increase in the Holder Commitment of any Holder shall  be
a matter decided by the Majority Secured Parties and not as a
Unanimous Vote Matter.

      If at a time when the conditions precedent set forth in
the  Operative Agreements to any Loan are, in the opinion  of
the  Majority  Lenders, satisfied, any Lender shall  fail  to
fulfill its obligations to make such Loan (any such Lender, a
"Defaulting Lender") then, for so long as such failure  shall
continue, the Defaulting Lender shall (unless the Lessee  and
the  Majority Lenders, determined as if the Defaulting Lender
were  not a "Lender", shall otherwise consent in writing)  be
deemed for all purposes relating to terminations, amendments,
supplements,  waivers or modifications  under  the  Operative
Agreements  to  have  no Loans, shall not  be  treated  as  a
"Lender" when performing the computation of Majority  Lenders
or  Majority Secured Parties, and shall have no rights  under
this Section 12.4; provided that any action taken pursuant to
the  second  paragraph  of this Section  12.4  shall  not  be
effective as against the Defaulting Lender.

      If at a time when the conditions precedent set forth in
the  Operative Agreements to any Holder Advance are,  in  the
opinion of the Majority Holders, satisfied, any Holder  shall
fail  to  fulfill its obligations to make such Holder Advance
(any such Holder, a "Defaulting Holder") then, for so long as
such  failure  shall  continue, the Defaulting  Holder  shall
(unless the Lessee and the Majority Holders, determined as if
the  Defaulting  Holder were not a "Holder", shall  otherwise
consent  in  writing) be deemed for all purposes relating  to
terminations,    amendments,    supplements,    waivers    or
modifications  under  the Operative  Agreements  to  have  no
Holder  Advances,  shall not be treated as  a  "Holder"  when
performing  the computation of Majority Holders  or  Majority
Secured  Parties, and shall have no rights under this Section
12.4;  provided that any action taken pursuant to the  second
paragraph  of  this Section 12.4 shall not  be  effective  as
against the Defaulting Holder.

     12.5.     Headings, etc.

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

     12.6.     Parties in Interest.

      Except  as  expressly  provided  herein,  none  of  the
provisions of this Agreement are intended for the benefit  of
any Person except the parties hereto.

          12.7. GOVERNING LAW; SUBMISSION TO
          JURISDICTION; WAIVER OF JURY TRIAL; VENUE;
                ARBITRATION.

           (a)  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
     OF  THE  PARTIES  HEREUNDER SHALL  BE  GOVERNED  BY  AND
     CONSTRUED,  INTERPRETED AND ENFORCED IN ACCORDANCE  WITH
     THE  LAWS  OF  THE STATE OF NORTH CAROLINA.   Any  legal
     action  or proceeding with respect to this Agreement  or
     any  other  Operative Agreement may be  brought  in  the
     courts  of  the  State of North Carolina in  Mecklenburg
     County  or of the United States for the Western District
     of  North  Carolina, and, by execution and  delivery  of
     this  Agreement, each of the parties to  this  Agreement
     hereby irrevocably accepts for itself and in respect  of
     its   property,   generally  and  unconditionally,   the
     nonexclusive jurisdiction of such courts.  Each  of  the
     parties  to this Agreement further irrevocably  consents
     to   the   service  of  process  out  of  any   of   the
     aforementioned courts in any such action  or  proceeding
     by  the  mailing  of  copies thereof  by  registered  or
     certified  mail, postage prepaid, to it at  the  address
     set  out  for  notices pursuant to  Section  12.2,  such
     service  to  become effective three (3) days after  such
     mailing.  Nothing herein shall affect the right  of  any
     party to serve process in any other manner permitted  by
     Law  or  to  commence legal proceedings or to  otherwise
     proceed against any party in any other jurisdiction.

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

           (c)   Each of the parties to this Agreement hereby
     irrevocably  waives any objection which it  may  now  or
     hereafter  have to the laying of venue  of  any  of  the
     aforesaid actions or proceedings arising out  of  or  in
     connection  with  this Agreement or any other  Operative
     Agreement   brought  in  the  courts  referred   to   in
     subsection  (a)  above  and hereby  further  irrevocably
     waives  and  agrees not to plead or claim  in  any  such
     court that any such action or proceeding brought in  any
     such court has been brought in an inconvenient forum.

           (d)   Notwithstanding  the provisions  of  Section
12.7(a)  or of any other Operative Agreement to the contrary,
upon  demand of any party to this Agreement and/or any  other
Operative Agreement, upon demand of any party hereto, whether
made  before or after institution of any judicial proceeding,
any  claim or controversy arising out of, or relating to  the
Operative  Agreements between or among the parties hereto  (a
"Dispute") shall be resolved by binding arbitration conducted
under  and  governed  by  the Commercial  Financial  Disputes
Arbitration  Rules (the "Arbitration Rules") of the  American
Arbitration   Association  (the  "AAA")   and   the   Federal
Arbitration  Act.   Disputes may include  without  limitation
tort  claims, counterclaims, disputes as to whether a  matter
is  subject to arbitration, claims brought as class  actions,
or  claims arising from documents executed in the future.   A
judgment  upon the award may be entered in any  court  having
jurisdiction.     Notwithstanding   the    foregoing,    this
arbitration  provision does not apply to  disputes  under  or
related to swap agreements.

      All arbitration hearings shall be conducted in the city
in  which  the  principal  office of  the  Agent  (referenced
pursuant  to Section 12.2 of this Agreement) is  located.   A
hearing  shall  begin within ninety (90) days of  demand  for
arbitration  and all hearings shall be concluded  within  one
hundred  and  twenty  (120) days of demand  for  arbitration.
These  time  limitations may not be extended unless  a  party
shows  cause for extension and then for no more than a  total
of  sixty  (60) days.  The expedited procedures set forth  in
Rule  51 et seq. of the Arbitration Rules shall be applicable
to  claims  of  less than $1,000,000.  Arbitrators  shall  be
licensed  attorneys  selected from the  Commercial  Financial
Dispute  Arbitration Panel of the AAA.  The  parties  do  not
waive  applicable federal or state substantive law except  as
provided herein.

       Notwithstanding  the  preceding  binding   arbitration
provisions,   the   parties  agree   to   preserve,   without
diminution,  certain  remedies that any  party  may  exercise
before  or  after an arbitration proceeding is brought.   The
parties  shall  have the right to proceed  in  any  court  of
proper  jurisdiction or by self-help to exercise or prosecute
the  following  remedies, as applicable: (i)  all  rights  to
foreclose  against  any real or personal  property  or  other
security  by  exercising a power of sale or under  applicable
law by judicial foreclosure including a proceeding to confirm
the  sale;  (ii)  all rights of self-help including  peaceful
occupation of real property and collection of rents,  set-off
and peaceful possession of personal property; (iii) obtaining
provisional   or  ancillary  remedies  including   injunctive
relief,  sequestration, garnishment, attachment,  appointment
of receiver and filing an involuntary bankruptcy proceedings;
and  (iv)  when  applicable,  a  judgment  by  confession  of
judgment.   Any  claim  or controversy  with  regard  to  any
party's entitlement to such remedies is a Dispute.

      Each  party to this Agreement agrees that it shall  not
have  a  remedy of punitive or exemplary damages against  any
other  party  in any Dispute and hereby waive  any  right  or
claim to punitive or exemplary damages they have now or which
may  arise  in  the  future in connection with  any  Dispute,
whether the Dispute is resolved by arbitration or judicially.

     12.8.     Severability.

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

     12.9.     Liability Limited.

           (a)   The  Lenders, the Agent, the Credit Parties,
     the  Owner Trustee and the Holders each acknowledge  and
     agree  that  the Owner Trustee is (except  as  otherwise
     expressly provided herein or therein) entering into this
     Agreement and the other Operative Agreements to which it
     is  a  party (other than the Trust Agreement and to  the
     extent  otherwise  provided  in  Section  6.1  of   this
     Agreement), solely in its capacity as trustee under  the
     Trust  Agreement and not in its individual capacity  and
     that   the   Trust  Company  shall  not  be  liable   or
     accountable  under any circumstances whatsoever  in  its
     individual capacity for or on account of any statements,
     representations,  warranties, covenants  or  obligations
     stated to be those of the Owner Trustee, except for  its
     own  gross  negligence  or  willful  misconduct  and  as
     otherwise  expressly provided herein  or  in  the  other
     Operative Agreements.

           (b)   Anything to the contrary contained  in  this
     Agreement,  the Credit Agreement, the Notes  or  in  any
     other Operative Agreement notwithstanding, no Exculpated
     Person shall be personally liable in any respect for any
     liability  or  obligation arising hereunder  or  in  any
     other  Operative Agreement including without  limitation
     the  payment  of the principal of, or interest  on,  the
     Notes,  or  for  monetary  damages  for  the  breach  of
     performance  of  any of the covenants contained  in  the
     Credit   Agreement,  the  Notes,  this  Agreement,   the
     Security   Agreement  or  any  of  the  other  Operative
     Agreements.   The  Lenders, the Holders  and  the  Agent
     agree  that,  in  the  event  any  remedies  under   any
     Operative  Agreement are pursued, neither  the  Lenders,
     the  Holders  nor  the  Agent shall  have  any  recourse
     against any Exculpated Person, for any deficiency,  loss
     or  Claim  for  monetary damages or otherwise  resulting
     therefrom   and  recourse  shall  be  had   solely   and
     exclusively against the Trust Estate (excluding Excepted
     Payments)  and the Credit Parties (with respect  to  the
     Credit   Parties'   obligations  under   the   Operative
     Agreements); but nothing contained herein shall be taken
     to  prevent  recourse  against  or  the  enforcement  of
     remedies  against  the Trust Estate (excluding  Excepted
     Payments)   in  respect  of  any  and  all  liabilities,
     obligations and undertakings contained herein and/or  in
     any  other  Operative  Agreement.   Notwithstanding  the
     provisions  of  this Section, nothing in  any  Operative
     Agreement  shall:  (i) constitute a waiver,  release  or
     discharge of any indebtedness or obligation evidenced by
     the  Notes  and/or  the Certificates arising  under  any
     Operative   Agreement  or  secured  by   any   Operative
     Agreement,  but the same shall continue  until  paid  or
     discharged;  (ii)  relieve any  Exculpated  Person  from
     liability and responsibility for (but only to the extent
     of  the  damages  arising by reason of):   active  waste
     knowingly  committed  by  any  Exculpated  Person   with
     respect to any Property, any fraud, gross negligence  or
     willful misconduct on the part of any Exculpated Person;
     (iii)  relieve any Exculpated Person from liability  and
     responsibility for (but only to the extent of the moneys
     misappropriated,  misapplied or  not  turned  over)  (A)
     except   for  Excepted  Payments,  misappropriation   or
     misapplication  by the Lessor (i.e.,  application  in  a
     manner  contrary to any of the Operative Agreements)  of
     any  insurance  proceeds or condemnation award  paid  or
     delivered  to  the Lessor by any Person other  than  the
     Agent, (B) except for Excepted Payments, any deposits or
     any  escrows  or amounts owed by any Construction  Agent
     under  the  Agency Agreement held by the Lessor  or  (C)
     except  for Excepted Payments, any rent or other  income
     received by the Lessor from any Credit Party that is not
     turned  over to the Agent; or (iv) affect or in any  way
     limit   the  Agent's  rights  and  remedies  under   any
     Operative Agreement with respect to the Rents and rights
     and  powers  of the Agent under the Operative Agreements
     or to obtain a judgment against any Lessee's interest in
     any  Property or the Agent's rights and powers to obtain
     a  judgment  against  the Lessor  or  any  Credit  Party
     (provided,  that no deficiency judgment or  other  money
     judgment shall be enforced against any Exculpated Person
     except  to  the extent of the Lessor's interest  in  the
     Trust  Estate (excluding Excepted Payments)  or  to  the
     extent   the   Lessor   may  be  liable   as   otherwise
     contemplated  in clauses (ii) and (iii) of this  Section
     12.9(b)).

     12.10.    Rights of the Credit Parties.

      If at any time all obligations (i) of the Owner Trustee
under  the Credit Agreement, the Security Documents  and  the
other  Operative  Agreements and (ii) of the  Credit  Parties
under  the  Operative  Agreements  have  in  each  case  been
satisfied  or  discharged in full, then  the  Credit  Parties
shall  be  entitled to (a) terminate the Lease  and  guaranty
obligations under Section 6B and (b) receive all amounts then
held  under  the Operative Agreements and all  proceeds  with
respect  to  any of the Properties.  Upon the termination  of
the  Lease  and  Section 6B pursuant to the foregoing  clause
(a),  the Lessor shall transfer to the respective Lessee that
is  a  party  to a Lease Supplement respecting any particular
Property  all of Lessor's right, title and interest free  and
clear  of  the  Lien of the Lease, the Lien of  the  Security
Documents and all Lessor Liens in and to any Properties  then
subject to the Lease and any amounts or proceeds referred  to
in  the  foregoing  clause (b) shall be  paid  over  to  such
Lessee.

     12.11.    Further Assurances.

      The  parties hereto shall promptly cause to  be  taken,
executed,  acknowledged or delivered, at the sole expense  of
the  Credit  Parties,  all  such further  acts,  conveyances,
documents  and assurances as the other parties may from  time
to  time  reasonably  request  in  order  to  carry  out  and
effectuate  the  intent  and purposes of  this  Participation
Agreement,   the   other   Operative   Agreements   and   the
transactions  contemplated  hereby  and  thereby   (including
without  limitation the preparation, execution and filing  of
any  and  all  Uniform Commercial Code financing  statements,
filings   of  Mortgage  Instruments  and  other  filings   or
registrations which the parties hereto may from time to  time
request  to be filed or effected).  Each Lessee, at  its  own
expense and without need of any prior request from any  other
party,  shall take such action as may be necessary (including
without  limitation  any action specified  in  the  preceding
sentence), or (if the Owner Trustee shall so request)  as  so
requested,  in  order  to maintain and protect  all  security
interests provided for hereunder or under any other Operative
Agreement.  In addition, in connection with the sale or other
disposition  of  any  Property or any portion  thereof,  each
Lessee  agrees  to execute such instruments of conveyance  as
may be reasonably required in connection therewith.

     12.12.    Calculations under Operative Agreements.

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

     12.13.    Confidentiality.

      Each Financing Party severally agrees to use reasonable
efforts  to  keep  confidential  all  non-public  information
pertaining  to  any Credit Party or any of  its  Subsidiaries
which  is provided to it by such Credit Party or any  of  its
Subsidiaries and which an officer of such Credit Party or any
of   its  Subsidiaries  has  requested  in  writing  be  kept
confidential,  and  shall  not  intentionally  disclose  such
information to any Person except:

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

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

           (c)   to counsel, auditors or accountants retained
     by  any such Person or any Affiliates of any such Person
     (if  such  Affiliates  are  permitted  to  receive  such
     information  pursuant  to  clause  (f)  or  (g)  below),
     provided   they   agree   to   keep   such   information
     confidential as if such Person or Affiliate  were  party
     to   this   Agreement   and  to  financial   institution
     regulators,  including examiners of any Financing  Party
     or  any  Affiliate thereof in the course of examinations
     of such Persons;

           (d)   in  connection with any  litigation  or  the
     enforcement  or  preservation  of  the  rights  of   any
     Financing Party under the Operative Agreements;

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

            (f)    any  Financing  Party  may  disclose  such
     information  to  another  Financing  Party  or  to   any
     Affiliate  of  a  Financing Party that is  a  direct  or
     indirect owner of any Financing Party;

            (g)    any  Financing  Party  may  disclose  such
     information  to an Affiliate of any Financing  Party  to
     the  extent required in connection with the transactions
     contemplated  hereby or to the extent such Affiliate  is
     involved  in, or provides advice or assistance  to  such
     Person with respect to, such transactions (provided,  in
     each  case that such Affiliate has agreed in writing  to
     maintain  confidentiality as if it were  such  Financing
     Party (as the case may be)); or

            (h)   to  the  extent  disclosure  to  any  other
     financial institution or other Person is appropriate  in
     connection with any proposed or actual (i) assignment or
     grant  of  a  participation by any  of  the  Lenders  of
     interests  in the Credit Agreement or any Note  to  such
     other  financial  institution  (who  will  in  turn   be
     required  by  the Agent to agree in writing to  maintain
     confidentiality as if it were a Lender originally  party
     to  this Agreement) or (ii) assignment by any Holder  of
     interests in the Trust Agreement to another Person  (who
     will  in turn be required by the transferring Holder  to
     agree  in writing to maintain confidentiality as  if  it
     were a Holder originally party to this Agreement).

      Subject  to  the foregoing terms of Sections  12.13(a)-
12.13(h),  under  the  terms of any  one  or  more  of  which
circumstances  disclosure shall be permitted, each  Financing
Party  severally  agrees to use reasonable  efforts  to  keep
confidential  all  non-public information pertaining  to  the
financing  structure  described in the  unrecorded  Operative
Agreements.

     12.14.    Financial Reporting/Tax Characterization.

     The Credit Parties agree to obtain advice from their own
accountants and tax counsel regarding the financial reporting
treatment  and  the tax characterization of the  transactions
described  in  the Operative Agreements.  The Credit  Parties
further agree that they shall not rely upon any statement  of
any  Financing  Party  or any of their respective  Affiliates
and/or  Subsidiaries  regarding any such financial  reporting
treatment and/or tax characterization.

     12.15.    Set-off.

     In addition to any rights now or hereafter granted under
applicable  Law  and  not by way of limitation  of  any  such
rights, upon and after the occurrence of any Event of Default
and during the continuance thereof, the Lenders, the Holders,
their  respective Affiliates and any assignee or  participant
of  a  Lender  or a Holder in accordance with the  applicable
provisions  of the Operative Agreements are hereby authorized
by  the  Credit  Parties at any time or from  time  to  time,
without  notice to the Credit Parties or to any other Person,
any such notice being hereby expressly waived, to set-off and
to  appropriate and to apply any and all deposits (general or
special,   time  or  demand,  including  without   limitation
indebtedness  evidenced by certificates of  deposit,  whether
matured or unmatured) and any other indebtedness at any  time
held  or  owing by the Lenders, the Holders, their respective
Affiliates  or any assignee or participant of a Lender  or  a
Holder  in accordance with the applicable provisions  of  the
Operative  Agreements to or for the credit or the account  of
such  Credit  Party against and on account of the obligations
of   such   Credit  Party  under  the  Operative   Agreements
irrespective of whether or not (a) the Lenders or the Holders
shall  have made any demand under any Operative Agreement  or
(b)  the  Agent  shall  have  declared  any  or  all  of  the
obligations   of  such  Credit  Party  under  the   Operative
Agreements   to   be  due  and  payable  and  although   such
obligations    shall    be    contingent    or     unmatured.
Notwithstanding  the foregoing, neither  the  Agent  nor  any
other Financing Party shall exercise, or attempt to exercise,
any  right of setoff, banker's lien, or the like, against any
deposit account or property of any Credit Party held  by  the
Agent or any other Financing Party, without the prior written
consent  of  the Majority Secured Parties, and any  Financing
Party violating this provision shall indemnify the Agent  and
the other Financing Parties from any and all costs, expenses,
liabilities and damages resulting therefrom.  The contractual
restriction on the exercise of setoff rights provided in  the
foregoing sentence is solely for the benefit of the Agent and
the  Financing Parties and may not be enforced by any  Credit
Party.

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

CONSTRUCTION AGENT
AND LESSEE:                   PERFORMANCE FOOD GROUP COMPANY,
                              as the Construction Agent and
                              as the Lessee

                              By:
                              Name:
                              Title:

                 [signature pages continued]

GUARANTOR:                    PERFORMANCE FOOD GROUP COMPANY,
                              as the Guarantor

                              By:
                              Name:
                              Title:

                 [signature pages continued]

OWNER TRUSTEE
AND LESSOR:                   FIRST SECURITY BANK, NATIONAL
                              ASSOCIATION, not individually,
                              except as expressly stated
                              herein, but solely as the Owner
                              Trustee under the PFG Real
                              Estate Trust 2000-1

                              By:
                              Name:
                              Title:

                 [signature pages continued]

AGENT AND LENDERS:            FIRST UNION NATIONAL BANK, as a
                              Lender and as the Agent

                              By:
                              Name:
                              Title:

                 [signature pages continued]

                              BANK ONE, NA, as a Lender
                              (Main Office Chicago)

                              By:
                              Name:
                              Title:

                 [signature pages continued]
                              SUNTRUST BANK, as a Lender

                              By:
                              Name:
                              Title:

                 [signature pages continued]

HOLDERS:                      FIRST UNION NATIONAL BANK, as a
                              Holder

                              By:
                              Name:
                              Title:

                 [signature pages continued]

                              SUNTRUST BANK, as a Holder

                              By:
                              Name:
                              Title:

                    [signature pages end]

                     SCHEDULE 5.3(n)(ii)

                       LESSEE JOINDER
    (Pursuant to Section 5.3(n)(ii) of the Participation
                         Agreement)

     THIS LESSEE JOINDER (as amended, modified, supplemented,
restated and/or replaced from time to time, the "Agreement"),
dated   as  of  _____________,  ______,  is  by  and  between
___________________, a ___________ (the "Company"), and FIRST
UNION  NATIONAL  BANK,  as  the Agent  for  the  Lenders  and
respecting  the  Security Documents, as  the  Agent  for  the
Lender and the Holders, to the extent of their interests (the
"Agent").   Capitalized  terms not otherwise  defined  herein
shall   have   the  meanings  set  forth  therefor   in   the
Participation Agreement dated as of June 9, 2000 (as amended,
modified, supplemented, restated and/or replaced from time to
time,   the  "Participation  Agreement")  among  the  various
parties  thereto  from time to time, as the Lessees  and  the
Construction  Agents,  Performance  Food  Group  Company,  as
Guarantor, First Security Bank, National Association, as  the
Owner  Trustee under the PFG Realty Trust 2000-1, the various
banks  and  other  lending  institutions  which  are  parties
thereto from time to time, as the Lenders, the various  banks
and other lending institutions which are parties thereto from
time to time, as the Holders, and the Agent.

     The Company is an Eligible Lessee and desires to act  as
the  Lessee and as the Construction Agent with respect to one
or more Properties, as more specifically identified in one or
more   Lease   Supplements  relating  to  such  Property   or
Properties.

     Accordingly,  the Company hereby agrees as follows  with
the Agent:

     1.     The  Company  hereby  acknowledges,  agrees   and
confirms  that,  by  its  execution of  this  Agreement,  the
Company  will  be  deemed to be a party to the  Participation
Agreement,  the  Agency Agreement, the  Lease,  the  Security
Agreement and such other of the Operative Agreements  as  are
necessary  or  desirable to accomplish the purposes  of  this
Agreement and each of the other Operative Agreements to which
any  Credit  Party  is intended to be a party.   The  Company
further acknowledges, agrees and confirms that it shall  have
all  of  the  obligations of the Lessee and the  Construction
Agent  under such Operative Agreements with respect  to  each
Property  subject to a Lease Supplement in which the  Company
is  identified as Lessee as if the Company had executed  such
Operative Agreements.  The Company hereby ratifies, as of the
date  hereof,  and agrees to be bound by, all of  the  terms,
provisions  and  conditions  applicable  to  a  Lessee  or  a
Construction Agent contained in the Operative Agreements.

     2.    THE  COMPANY  HEREBY  EXPRESSLY  ACKNOWLEDGES  AND
AGREES TO THE PROVISIONS OF SECTION 12.7 OF THE PARTICIPATION
AGREEMENT,  INCLUDING  WITHOUT  LIMITATION  THOSE  PROVISIONS
REGARDING  GOVERNING LAW, SUBMISSION TO JURISDICTION,  WAIVER
OF  JURY  TRIAL, VENUE AND ARBITRATION.  THIS  PROVISION  HAS
BEEN SPECIFICALLY REVIEWED BY THE COMPANY.

     3.    The chief executive office and principal place  of
business  of  the  Company and the office where  all  records
regarding  such  Property or Properties are  located  at  the
location(s) set forth on Annex 1 attached hereto.

     4.     All  notices  and  other  communications  to   be
delivered to the Company shall be directed to the Company  at
its  address  set forth in Section 12.2 of the  Participation
Agreement  or  such  other address as may  be  specified,  in
accordance with the terms of the Participation Agreement,  by
the Company from time to time.

     5.     This   Agreement  may  be  executed  in  multiple
counterparts, each of which shall constitute an original  but
all  of  which  when  taken  together  shall  constitute  one
contract.

     6.    THIS  AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND  INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE  OF
NORTH CAROLINA.

     IN   WITNESS  WHEREOF,  the  Company  has  caused   this
Agreement to be duly executed by its authorized officers, and
the  Agent  has  caused  the  same  to  be  accepted  by  its
authorized  officer,  as  of the day  and  year  first  above
written.

                              [COMPANY]

                              By:
                              Name:
                              Title:

                              Acknowledged and accepted:

                              FIRST UNION NATIONAL BANK,
                              as the Agent

                              By:
                              Name:
                              Title:

                           Annex 1

                 [Chief Executive Office and
         Principal Place of Business of the Company
           and Office where All Records Regarding
                    Properties are kept]

                        Schedule 5.11

    [Description of Elizabeth, New Jersey Real Property]

     That certain 12-acre parcel of real property located in
Union County, New Jersey at 1 Center Drive, Elizabeth, New
Jersey, and currently owned by the Port Authority of New York
and New Jersey.

                          EXHIBIT A

                      REQUISITION FORM
     (Pursuant to Sections 4.2, 5.2, 5.3 and 5.4 of the
                  Participation Agreement)

      PERFORMANCE FOOD GROUP COMPANY, a Tennessee corporation
(the  "Company")  hereby certifies as true  and  correct  and
delivers  the  following Requisition to FIRST UNION  NATIONAL
BANK, as the agent for the Lenders (hereinafter defined)  and
respecting  the  Security Documents, as  the  agent  for  the
Lenders and the Holders (hereinafter defined), to the  extent
of their interests (the "Agent"):

      Reference  is made herein to that certain Participation
Agreement  dated  as  of June 9, 2000 (as amended,  modified,
extended, supplemented, restated and/or replaced from time to
time,   the  "Participation  Agreement")  among  the  various
parties thereto from time to time, as the Lessees and as  the
Construction  Agents,  the Company, as the  Guarantor,  First
Security  Bank,  National Association, as the Owner  Trustee,
the  various banks and other lending institutions  which  are
parties   thereto  from  time  to  time,  as   holders   (the
"Holders"),  the various banks and other lending institutions
which are parties thereto from time to time, as lenders  (the
"Lenders"), and the Agent.  Capitalized terms used herein but
not  otherwise  defined herein shall have  the  meanings  set
forth therefor in the Participation Agreement.

Check one:

     ____ INITIAL CLOSING DATE: _________________
      (three  (3)  Business Days prior  notice  required  for
Advance)

     ____ PROPERTY CLOSING DATE:_________________
      (three  (3)  Business Days prior  notice  required  for
Advance)

     ____  CONSTRUCTION ADVANCE
           DATE:_____________
           (three (3) Business Days  prior
           notice required for Advance)

1.   Transaction  Expenses  and  other  fees,  expenses   and
     disbursements  under Sections 7.1(a) or  7.1(b)  of  the
     Participation  Agreement and any and all  other  amounts
     contemplated  to  be  financed under  the  Participation
     Agreement   including  without  limitation   any   Work,
     broker's fees, taxes, recording fees and the like  (with
     supporting invoices or closing statement attached):

          Party to Whom                 Amount Owed
          Amount is Owed                (in U.S. Dollars)
          ______________                ______________
          ______________                ______________
          ______________                ______________
          ______________                ______________
          ______________                ______________

2.   Description  of Land (which shall be a legal description
     of  the  Land  in  connection with  an  Advance  to  pay
     Property Acquisition Costs): See attached Schedule 1

3.   Description of Improvements:  See attached Schedule 2

4.   Description of Equipment:  See attached Schedule 3

5.   Description of Work:  See attached Schedule 4

6.   Aggregate Loans and Holder Advances requested since  the
     Initial  Closing Date with respect to each Property  for
     which  Advances  are  requested under  this  Requisition
     (listed  on  a  Property by Property  basis),  including
     without  limitation  all amounts  requested  under  this
     Requisition: [identify on a Property by Property basis]

          $______________                         [Property]

      In connection with this Requisition, the Company hereby
requests  that  the Lenders make Loans to the Lessor  in  the
amount  of  $______________ and that the Holders make  Holder
Advances  to  the  Lessor in the amount of $________________.
The  Company hereby certifies (i) that the foregoing  amounts
requested  do not exceed the total aggregate of the Available
Commitments  plus the Available Holder Commitments  and  (ii)
each   of  the  provisions  of  the  Participation  Agreement
applicable  to  the  Loans  and  Holder  Advances   requested
hereunder  have  been complied with as of the  date  of  this
Requisition.

     The Company requests the Loans be allocated as follows:

    $______________                         ABR Loans
    $______________                         Eurodollar Loans

     The Company requests the Holder Advances be allocated as
     follows:

    $______________                         ABR Holder Advances

    $______________                         Eurodollar Holder Advances

7.   Each  and  every  representation  and  warranty  of  the
     Company  contained in the Operative Agreements to  which
     it  is a party is true and correct on and as of the date
     hereof.

8.   No  Default  or  Event of Default has  occurred  and  is
     continuing under any Operative Agreement.

9.   Each Operative Agreement to which the Company is a party
     is in full force and effect with respect to it.

10.  The  Company  has duly performed and complied  with  all
     covenants,  agreements and conditions contained  in  the
     Participation  Agreement or in any  Operative  Agreement
     required  to be performed or complied with by it  on  or
     prior to the date hereof.

      The Company has caused this Requisition to the executed
by  its  duly  authorized officer as of  this  _____  day  of
__________, ______.

                              PERFORMANCE GOOD GROUP COMPANY

                              By:
                              Name:
                              Title:

                         Schedule 1

                     Description of Land
           (Legal Description and Street Address)

                         Schedule 2

                 Description of Improvements

                         Schedule 3

                  Description of Equipment

General Description      Make         Model      Serial Number

                         Schedule 4

                            Work

     Work Performed for which the Advance is requested:

                          EXHIBIT B

               [CONFORM TO NEGOTIATED OPINION]

          [Outside Counsel Opinion for the Lessee]
             (Pursuant to Section 5.3(j) of the
                  Participation Agreement)

                      ____________, ______

TO THOSE ON THE ATTACHED DISTRIBUTION LIST

          Re:  Synthetic Lease Financing Provided in favor of
          Performance Food Group Company

Dear Sirs:

We  have  acted as special counsel to Performance Food  Group
Company,  a Tennessee corporation (the "Guarantor")  and  the
various  parties to the Participation Agreement  (hereinafter
defined) from time to time, as the construction agents and as
the  lessees (individually, a "Lessee" and collectively,  the
"Lessees"; individually, each Lessee and the Guarantor may be
referred  to  herein as a "Credit Party" or collectively,  as
the "Credit Parties") in connection with certain transactions
contemplated by the Participation Agreement dated as of  June
9,  2000  (the "Participation Agreement"), among the Lessees,
the Guarantor, First Security Bank, National Association,  as
the  Owner  Trustee (the "Owner Trustee"), the various  banks
and other lending institutions which are parties thereto from
time  to time, as holders (the "Holders"), the various  banks
and other lending institutions which are parties thereto from
time  to  time,  as lenders (the "Lenders") and  First  Union
National  Bank,  as the agent for the Lenders and  respecting
the  Security Documents, as the agent for the Lenders and the
Holders,  to  the  extent of their interests  (the  "Agent").
This  opinion is delivered pursuant to Section 5.3(j) of  the
Participation Agreement.  All capitalized terms used  herein,
and  not  otherwise defined herein, shall have  the  meanings
assigned   thereto   in  Appendix  A  to  the   Participation
Agreement.

In connection with the foregoing, we have examined originals,
or  copies  certified to our satisfaction, of  [identify  the
applicable  Operative  Agreements,  including  each  Mortgage
Instrument,  related  UCC  fixture filings,  Additional  UCCs
(hereinafter defined), Deeds and Memoranda of Lease] and such
other  corporate documents and records of the Credit Parties,
certificates of public officials and representatives  of  the
Credit Parties as to certain factual matters, and such  other
instruments  and documents which we have deemed necessary  or
advisable  to examine for the purpose of this opinion.   With
respect  to  such  examination,  we  have  assumed  (i)   the
statements  of fact made in all such certificates,  documents
and instruments are true, accurate and complete; (ii) the due
authorization,  execution  and  delivery  of  the   Operative
Agreements  by the parties thereto; (iii) the genuineness  of
all  signatures,  the  authenticity and completeness  of  all
documents,  certificates, instruments, records and  corporate
records  submitted to us as originals and the  conformity  to
the original instruments of all documents submitted to us  as
copies,  and  the  authenticity  and  completeness   of   the
originals  of  such copies; (iv) that all  parties  have  all
requisite  corporate power and authority to execute,  deliver
and  perform the Operative Agreements; and (v) except  as  to
the  Credit  Parties,  the  enforceability  of  the  Mortgage
Instrument,  the  Memorandum of Lease and the  UCC  financing
statements against all parties thereto.

Based  on the foregoing, and having due regard for such legal
considerations  as  we  deem relevant,  and  subject  to  the
limitations  and  assumptions  set  forth  herein,  including
without limitation the matters set forth in the last two  (2)
paragraphs hereof, we are of the opinion that:

     (a)  The Mortgage Instrument and Memorandum of Lease are
enforceable in accordance with their respective terms, except
as  limited  by  laws generally affecting the enforcement  of
creditors' rights, which laws will not materially prevent the
realization of the benefits intended by such documents.

     (b)  Each form of Mortgage Instrument and UCC fixture
filing relating thereto, attached hereto as Schedules 1 and
2, respectively, is in proper form for filing and recording
with the offices of [identify the recording offices of the
respective county clerks where the Properties are to be
located].  Upon filing of each Mortgage Instrument and UCC
fixture filing in [identify the recording offices of the
respective county clerks where the Properties are to be
located], the Agent will have a valid, perfected lien and
security interest in that portion of the Collateral described
in such Mortgage Instrument or UCC fixture filing to the
extent such Collateral is comprised of real property and/or
fixtures.

     (c)  The forms of UCC financing statements relating to
the Security Documents, attached hereto as Schedule 3 (the
"Additional UCCs"), are in proper form for filing and
recording with the offices of [identify (i) the recording
offices of the respective county clerks where the Properties
are to be located and (ii) the Secretary of State where the
Properties are to be located].  Upon filing of the Additional
UCCs in [identify (i) the recording offices of the respective
county clerks where the Properties are to be located and (ii)
the Secretary of State where the Properties are to be
located], the Agent will have a valid, perfected lien and
security interest in that portion of the Collateral which can
be perfected by filing UCC-1 financing statements under
Article 9 of the UCC.

     (d)  Each form of Deed and Memorandum of Lease is in
appropriate form for filing and recording with the [identify
the recording offices of the respective county clerks for the
counties where the Properties are to be located].

     (e)  Each Memorandum of Lease, when filed and recorded
with the [identify the recording offices of the respective
county clerks for the counties where the Properties are to be
located], will have been filed and recorded in all public
offices in the State of [__________] in which filing or
recording is necessary to provide constructive notice of the
Lease to third Persons and to establish of record the
interest of the Lessor thereunder as to the Properties
described in each such Memorandum of Lease.

      (f)   Title to the Properties located in the  State  of
[___________] may be held in the name of the Owner Trustee as
follows:   First  Security  Bank, National  Association,  not
individually, but solely as the Owner Trustee under  the  PFG
Real Estate Trust 2000-1.

      (g)  The execution and delivery by First Security Bank,
National  Association, individually or as the Owner  Trustee,
as  the case may be, of the Operative Agreements to which  it
is  a  party and compliance by First Security Bank,  National
Association, individually or as the Owner Trustee,  with  all
of  the provisions thereof do not and will not contravene any
law, rule or regulation of [identify the state].

     (h)  By reason of their participation in the transaction
contemplated  under  the Operative Agreements,  none  of  the
Agent,  the Lenders, the Holders or the Owner Trustee has  to
(a) qualify as a foreign corporation in [identify the state],
(b)  file  any application or any designation for service  of
process  in  [identify the state] or (c) pay  any  franchise,
income,  sales, excise, stamp or other taxes of any  kind  to
[identify the state].

       (i)    The  provisions  in  the  Operative  Agreements
concerning  Rent,  interest, fees,  prepayment  premiums  and
other  similar charges do not violate the usury laws or other
similar  laws regulating the use or forbearance of  money  of
[identify the state].

      (j)   If the transactions contemplated by the Operative
Agreements  are  characterized as a lease  transaction  by  a
court of competent jurisdiction, the Lease and the applicable
Lease Supplement shall demise to the Lessee a valid leasehold
interest   in   the  Properties  described  in   such   Lease
Supplement.

      (k)   If the transactions contemplated by the Operative
Agreements are characterized as a loan transaction by a court
of  competent  jurisdiction, the combination of the  Mortgage
Instruments,  the  Deeds, the Lease and the applicable  Lease
Supplements  (and the other Operative Agreements incorporated
therein  by  reference) are sufficient  to  create  a  valid,
perfected lien or security interest in the Properties therein
described, enforceable as a mortgage in [identify the state].

This  opinion is limited to the matters stated herein and  no
opinion  is  implied  or may be inferred beyond  the  matters
stated  herein.  This opinion is based on and is  limited  to
the  laws of the State of [___________] and the federal  laws
of  the  United States of America.  Insofar as the  foregoing
opinion  relates to matters of law other than the  foregoing,
no opinion is hereby given.

This  opinion  is  for the sole benefit of the  Lessees,  the
Construction  Agents, the Guarantor, the Owner  Trustee,  the
Holders,   the  Lenders,  the  Agent  and  their   respective
successors  and  assigns and may not be relied  upon  by  any
other  person  other than such parties and  their  respective
successors and assigns without the express written consent of
the undersigned.  The opinions expressed herein are as of the
date hereof and we make no undertaking to amend or supplement
such  opinions if facts come to our attention or  changes  in
the  current law of the jurisdictions mentioned herein  occur
which could affect such opinions.

                                   Very truly yours,

[LESSEE'S OUTSIDE COUNSEL]

                      Distribution List

First  Union  National Bank, as the Agent,  a  Holder  and  a
Lender

The  various banks and other lending institutions  which  are
parties to the Participation Agreement from time to time,  as
additional Holders

The  various banks and other lending institutions  which  are
parties to the Participation Agreement from time to time,  as
additional Lenders

Performance Food Group Company, as the Guarantor

The  various parties to the Participation Agreement from time
to time, as the Construction Agents and the Lessees

First  Security Bank, National Association, not individually,
but  solely  as the Owner Trustee under the PFG  Real  Estate
Trust 2000-1

                         Schedule 1

                 Form of Mortgage Instrument

                         Schedule 2

                Forms of UCC Fixture Filings

                         Schedule 3

              Forms of UCC Financing Statements

                          EXHIBIT C

                   [NAME OF CREDIT PARTY]

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

      [NAME OF CREDIT PARTY], a ___________ corporation  (the
"Company"), DOES HEREBY CERTIFY as follows:

          1.    Each and every representation and warranty of
          the  Company contained in the Operative  Agreements
          to  which it is a party is true and correct on  and
          as of the date hereof.

          2.    No  Default or Event of Default has  occurred
          and is continuing under any Operative Agreement.

          3.    Each Operative Agreement to which the Company
          is a party is in full force and effect with respect
          to it.

          4.    The  Company has duly performed and  complied
          with   all  covenants,  agreements  and  conditions
          contained    in    the   Participation    Agreement
          (hereinafter defined) or in any Operative Agreement
          required to be performed or complied with by it  on
          or prior to the date hereof.

Capitalized terms used in this Officer's Certificate and  not
otherwise   defined  herein  have  the  respective   meanings
ascribed thereto in the Participation Agreement dated  as  of
June 9, 2000 among the parties thereto from time to time,  as
the  Lessees and as the Construction Agents, Performance Food
Group  Company,  as  the Guarantor (the  "Guarantor"),  First
Security  Bank,  National Association, as the Owner  Trustee,
the  various banks and other lending institutions  which  are
parties   thereto  from  time  to  time,  as   holders   (the
"Holders"),  the various banks and other lending institutions
which are parties thereto from time to time, as lenders  (the
"Lenders")  and First Union National Bank, as the  agent  for
the  Lenders  and respecting the Security Documents,  as  the
agent for the Lenders and the Holders, to the extent of their
interests (the "Agent").

IN  WITNESS  WHEREOF, the Company has caused  this  Officer's
Certificate  to  be duly executed and delivered  as  of  this
_____ day of __________, ______.

                              [NAME OF CREDIT PARTY]

                              By:
                              Name:
                              Title:
                          EXHIBIT D

                   [NAME OF CREDIT PARTY]

                   SECRETARY'S CERTIFICATE
(Pursuant to Section 5.3(aa) of the Participation Agreement)

      [NAME  OF  CREDIT PARTY], a ______________  corporation
(the "Company") DOES HEREBY CERTIFY as follows:

     1.   Attached hereto as Schedule 1 is a true, correct
          and complete copy of the resolutions of the Board
          of Directors of the Company duly adopted by the
          Board of Directors of the Company on __________.
          Such resolutions have not been amended, modified or
          rescinded since their date of adoption and remain
          in full force and effect as of the date hereof.

     2.   Attached hereto as Schedule 2 is a true, correct
          and complete copy of the Articles of Incorporation
          of the Company on file in the Office of the
          Secretary of State of __________.  Such Articles of
          Incorporation have not been amended, modified or
          rescinded since their date of adoption and remain
          in full force and effect as of the date hereof.

     3.   Attached hereto as Schedule 3 is a true, correct
          and complete copy of the Bylaws of the Company.
          Such Bylaws have not been amended, modified or
          rescinded since their date of adoption and remain
          in full force and effect as of the date hereof.

     4.   The persons named below now hold the offices set
          forth opposite their names, and the signatures
          opposite their names and titles are their true and
          correct signatures.

          Name              Office                Signature

         ___________________          _______________________
         ___________________          _______________________

IN  WITNESS  WHEREOF, the Company has caused this Secretary's
Certificate  to  be duly executed and delivered  as  of  this
_____ day of ___________, ______.

                              [NAME OF CREDIT PARTY]

                              By:
                              Name:
                              Title:

                         Schedule 1

                      Board Resolutions

                         Schedule 2

                  Articles of Incorporation

                         Schedule 3

                           Bylaws

                          EXHIBIT E

          FIRST SECURITY BANK, NATIONAL ASSOCIATION

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

      FIRST  SECURITY BANK, NATIONAL ASSOCIATION, a  national
banking association, not individually (except with respect to
paragraph 1 below, to the extent any such representations and
warranties are made in its individual capacity) but solely as
the owner trustee under the PFG Real Estate Trust 2000-1 (the
"Owner Trustee"), DOES HEREBY CERTIFY as follows:

     1.   Each and every representation and warranty of the
          Owner Trustee contained in the Operative Agreements
          to which it is a party is true and correct on and
          as of the date hereof.

     2.   Each Operative Agreement to which the Owner Trustee
          is a party is in full force and effect with respect
          to it.

     3.   The Owner Trustee has duly performed and complied
          with all covenants, agreements and conditions
          contained in the Participation Agreement
          (hereinafter defined) or in any Operative Agreement
          required to be performed or complied with by it on
          or prior to the date hereof.

Capitalized terms used in this Officer's Certificate and  not
otherwise   defined  herein  have  the  respective   meanings
ascribed thereto in the Participation Agreement dated  as  of
June  9, 2000 among the various parties thereto from time  to
time,   as  the  Lessees  and  as  the  Construction  Agents,
Performance  Food  Group  Company,  as  the  Guarantor   (the
"Guarantor"), the Owner Trustee, the various banks and  other
lending  institutions which are parties thereto from time  to
time, as holders (the "Holders"), the various banks and other
lending  institutions which are parties thereto from time  to
time,  as  lenders (the "Lenders") and First  Union  National
Bank,  as  the  agent  for  the Lenders  and  respecting  the
Security  Documents,  as the agent for the  Lenders  and  the
Holders, to the extent of their interests (the "Agent").

IN  WITNESS  WHEREOF,  the  Owner  Trustee  has  caused  this
Officer's Certificate to be duly executed and delivered as of
this _____ day of __________, ______.

                              FIRST SECURITY BANK, NATIONAL
                              ASSOCIATION, not individually,
                              except as expressly stated
                              herein, but solely as the Owner
                              Trustee under the PFG Real
                              Estate Trust 2000-1

                              By:
                              Name:
                              Title:

                          EXHIBIT F

          FIRST SECURITY BANK, NATIONAL ASSOCIATION

                   SECRETARY'S CERTIFICATE
(Pursuant to Section 5.3(cc) of the Participation Agreement)

             CERTIFICATE OF ASSISTANT SECRETARY

      I,  ______________________, duly elected and  qualified
Assistant  Secretary  of  the Board  of  Directors  of  First
Security  Bank,  National  Association  (the  "Association"),
hereby certify as follows:

      1.    The Association is a National Banking Association
duly  organized, validly existing and in good standing  under
the  laws  of  the United States.  With respect  thereto  the
following is noted:

          A.    Pursuant  to  Revised Statutes  324,  et
          seq.,  as  amended, 12 U.S.C. 1, et seq.,  the
          Comptroller  of  the  Currency  charters   and
          exercises regulatory and supervisory authority
          over all National Banking Associations;

          B.    On  December 9, 1881, the First National
          Bank  of  Ogden,  Utah  was  chartered  as   a
          National Banking Association under the laws of
          the United States and under Charter No. 2597;

          C.   On October 2, 1922, in connection with  a
          consolidation  of The First National  Bank  of
          Ogden, Ogden, Utah, and The Utah National Bank
          of  Ogden, Ogden, Utah, the title was  changed
          to  "The First & Utah National Bank of Ogden";
          on January 18, 1923, The First & Utah National
          Bank of Ogden changed its title to "First Utah
          National Bank of Ogden"; on January 19,  1926,
          the  title was changed to "First National Bank
          of Ogden"; on February 24, 1934, the title was
          changed  to  "First  Security  Bank  of  Utah,
          National  Association"; on June 21, 1996,  the
          title  was  changed to "First  Security  Bank,
          National Association"; and

          D.      First    Security    Bank,    National
          Association, Ogden, Utah, continues to hold  a
          valid certificate to do business as a National
          Banking Association.

      2.    The  Association's Articles  of  Association,  as
amended,  are  in full force and effect, and a true,  correct
and  complete  copy  is attached hereto  as  Schedule  A  and
incorporated  herein by reference.  Said Articles  were  last
amended October 20, 1975, as required by law on notice  at  a
duly  called  special  meeting of  the  shareholders  of  the
Association.

      3.   The Association's By-Laws, as amended, are in full
force  and effect; and a true, correct and complete  copy  is
attached  hereto  as  Schedule B and incorporated  herein  by
reference.   Said  By-Laws, still in full force  and  effect,
were  adopted September 17, 1942, by resolution, after proper
notice of consideration and adoption of By-Laws was given  to
each and every shareholder, at a regularly called meeting  of
the Board of Directors with a quorum present.

     4.   Pursuant to the authority vested in it by an Act of
Congress approved December 23, 1913 and known as the  Federal
Reserve  Act, as amended, the Federal Reserve Board (now  the
Board of Governors of the Federal Reserve System) has granted
to  the  Association  now  known  as  "First  Security  Bank,
National Association" of Ogden, Utah, the right to act,  when
not  in  contravention  of State or local  law,  as  trustee,
executor,  administrator,  registrar  of  stocks  and  bonds,
guardian of estates, assignee, receiver, committee of estates
of  lunatics,  or  in any other fiduciary capacity  in  which
State banks, trust companies or other corporations which come
into  competition  with National Banks are permitted  to  act
under the laws of the State of Utah; and under the provisions
of  applicable law, the authority so granted remains in  full
force and effect.

     5.   Pursuant to authority vested by Act of Congress (12
U.S.C. 92a and 12 U.S.C. 481, as amended) the Comptroller  of
the Currency has issued Regulation 9, as amended, dealing, in
part,  with  the  Fiduciary Powers of  National  Banks,  said
regulation providing in subparagraph 9.7 (a) (1-2):

          (1)    The   board   of   directors    is
          responsible  for the proper  exercise  of
          fiduciary   powers  by  the  Bank.    All
          matters pertinent thereto, including  the
          determination of policies, the investment
          and  disposition  of  property  held   in
          fiduciary capacity, and the direction and
          review  of  the actions of all  officers,
          employees, and committees utilized by the
          Bank  in  the  exercise of its  fiduciary
          powers,  are  the responsibility  of  the
          board.       In     discharging      this
          responsibility,  the board  of  directors
          may assign, by action duly entered in the
          minutes,  the administration of  such  of
          the  Bank's fiduciary powers  as  it  may
          consider   proper  to  assign   to   such
          director(s),  officer(s), employee(s)  or
          committee(s) as it may designate.

          (2)    No  fiduciary  account  shall   be
          accepted  without the prior  approval  of
          the   board,   or  of  the   director(s),
          officer(s), or committee(s) to  whom  the
          board may have designated the performance
          of that responsibility. . . .

      6.    A  Resolution relating to Exercise  of  Fiduciary
Powers  was  adopted by the Board of Directors at  a  meeting
held  July 26, 1994 at which time there was a quorum present;
said resolution is still in full force and effect and has not
been  rescinded.   Said  resolution  is  attached  hereto  as
Schedule C and incorporated herein by reference.

      7.    A  Resolution  relating  to  the  Designation  of
Officers  and  Employees  to Exercise  Fiduciary  Powers  was
adopted  by  the  Trust Policy Committee at  a  meeting  held
February  7,  1996 at which time a quorum was  present;  said
resolution is still in full force and effect and has not been
rescinded.  Said resolution is attached hereto as Schedule  D
and is incorporated herein by reference.

      8.    Attached  hereto as Schedule E  and  incorporated
herein by reference, is a listing of facsimile signatures  of
persons   authorized   (herein   "Authorized   Signatory   or
Signatories")  on  behalf of the Association  and  its  Trust
Group  to act in exercise of its fiduciary powers subject  to
the resolutions in Paragraphs 6 and 7, above.

      9.    The principal office of the First Security  Bank,
National  Association, Trust Group and  of  its  departments,
except  for  the  St. George, Utah, Ogden, Utah,  and  Provo,
Utah,  branch  offices, is located at 79 South  Main  Street,
Salt  Lake  City,  Utah  84111 and all  records  relating  to
fiduciary  accounts are located at such principal  office  of
the  Trust  Group or in storage facilities within  Salt  Lake
County,  Utah,  except  for those of  the  Ogden,  Utah,  St.
George,  Utah,  and  Provo, Utah, branch offices,  which  are
located at said office.

      10.  Each Authorized Signatory (i) is a duly elected or
appointed,  duly  qualified  officer  or  employee   of   the
Association;  (ii) holds the office or job  title  set  forth
below  his  or  her name on the date hereof;  (iii)  and  the
facsimile signature appearing opposite the name of each  such
officer  or  employee  is  a  true  replica  of  his  or  her
signature.

IN  WITNESS WHEREOF, I have hereunto set my hand and  affixed
the   seal  of  the  Association  this  __________   day   of
_________________, ______.

(SEAL)

________________________________________
                      R. James Steenblik
                   Senior Vice President
                     Assistant Secretary

                         Schedule A

                   Articles of Association

                         Schedule B

                           Bylaws

                         Schedule C

                   Resolution Relating to
                Exercise of Fiduciary Powers

                         Schedule D

                 Resolution Relating to the
            Designation of Officers and Employees
                to Exercise Fiduciary Powers

                         Schedule E

             Authorized Signatory or Signatories

                          EXHIBIT G

       [Outside Counsel Opinion for the Owner Trustee]
             (Pursuant to Section 5.3(dd) of the
                  Participation Agreement)

                      ___________, ______

TO THOSE ON THE ATTACHED DISTRIBUTION LIST

     Re:  Trust Agreement dated as of June 9, 2000

Dear Sirs:

      We  have  acted  as special counsel for First  Security
Bank,  National Association, a national banking  association,
in  its  individual capacity ("FSB") and in its  capacity  as
trustee (the "Owner Trustee") under the Trust Agreement dated
as  of  June 9, 2000 (the "Trust Agreement") by and among  it
and  the  various banks and other lending institutions  which
are  parties  thereto  from time to  time,  as  holders  (the
"Holders"), in connection with the execution and delivery  by
the Owner Trustee of the Operative Agreements to which it  is
a  party.  Except as otherwise defined herein, the terms used
herein shall have the meanings set forth in Appendix A to the
Participation  Agreement  dated  as  of  June  9,  2000  (the
"Participation  Agreement") by and among the various  parties
thereto   from  time  to  time,  as  the  lessees   and   the
construction agents (the "Lessees"), Performance  Food  Group
Company  (the  "Guarantor"), First  Security  Bank,  National
Association, as the Owner Trustee, the Holders,  the  various
banks  and  other  lending  institutions  which  are  parties
thereto  from  time to time, as lenders (the  "Lenders")  and
First  Union National Bank, as the agent for the Lenders  and
respecting  the  Security Documents, as  the  agent  for  the
Lenders  and  the  Holders, to the extent of their  interests
(the "Agent").

      We  have  examined  originals or copies,  certified  or
otherwise  identified to our satisfaction, of such documents,
corporate  records and other instruments as  we  have  deemed
necessary  or  advisable for the purpose  of  rendering  this
opinion.

Based upon the foregoing, we are of the opinion that:

       1.    FSB  is  a  national  banking  association  duly
organized,  validly existing and in good standing  under  the
laws of the United States of America and each of FSB and  the
Owner  Trustee has under the laws of the State  of  Utah  and
federal banking law the power and authority to enter into and
perform  its obligations under the Trust Agreement  and  each
other Operative Agreement to which it is a party.

      2.    The  Owner Trustee is the duly appointed  trustee
under the Trust Agreement.

      3.    The  Trust  Agreement has been  duly  authorized,
executed and delivered by one (1) of the officers of FSB and,
assuming  due  authorization, execution and delivery  by  the
Holders,  is  a  legal, valid and binding obligation  of  the
Owner  Trustee (and to the extent set forth therein,  against
FSB),  enforceable  against the Owner  Trustee  (and  to  the
extent set forth therein, against FSB) in accordance with its
terms, and the Trust Agreement creates under the laws of  the
State of Utah for the Holders the beneficial interest in  the
Trust Estate it purports to create and is a valid trust under
the laws of the State of Utah.

      4.   The Operative Agreements to which it is party have
been  duly  authorized, executed and delivered by  FSB,  and,
assuming  due  authorization, execution and delivery  by  the
other   parties  thereto,  are  legal,  valid   and   binding
obligations  of  FSB, enforceable against FSB  in  accordance
with their respective terms.

      5.   The Operative Agreements to which it is party have
been  duly  authorized, executed and delivered by  the  Owner
Trustee,  and,  assuming  due  authorization,  execution  and
delivery  by the other parties thereto, are legal, valid  and
binding obligations of the Owner Trustee, enforceable against
the  Owner Trustee in accordance with their respective terms.
The  Notes  and Certificates have been duly issued,  executed
and delivered by the Owner Trustee, pursuant to authorization
contained  in  the Trust Agreement, and the Certificates  are
entitled  to the benefits and security afforded by the  Trust
Agreement in accordance with its terms and the terms  of  the
Trust Agreement.

      6.    The execution and delivery by each of FSB and the
Owner  Trustee  of  the  Trust Agreement  and  the  Operative
Agreements to which it is a party, and compliance by  FSB  or
the  Owner  Trustee,  as the case may be,  with  all  of  the
provisions  thereof do not and will not contravene  any  Laws
applicable to or binding on FSB, or as the Owner Trustee,  or
contravene the provisions of, or constitute a default  under,
its  charter documents or by-laws or, to our knowledge  after
due  inquiry,  any  indenture,  mortgage  contract  or  other
agreement  or instrument to which FSB or Owner Trustee  is  a
party  or by which it or any of its property may be bound  or
affected.

      7.    The  execution  and  delivery  of  the  Operative
Agreements  by  each  of FSB and the Owner  Trustee  and  the
performance  by  each of FSB and the Owner Trustee  of  their
respective  obligations thereunder does  not  require  on  or
prior  to  the  date hereof the consent or approval  of,  the
giving of notice to, the registration or filing with, or  the
taking of any action in respect of any Governmental Authority
or any court.

      8.    Assuming  that  the trust created  by  the  Trust
Agreement  is  treated as a grantor trust for federal  income
tax  purposes within the contemplation of Section 671 through
678  of the Internal Revenue Code of 1986, there are no fees,
taxes, or other charges (except taxes imposed on fees payable
to  the  Owner Trustee) payable to the State of Utah  or  any
political   subdivision  thereof  in  connection   with   the
execution, delivery or performance by the Owner Trustee,  the
Agent,  the Lenders, the Lessee or the Holders, as  the  case
may be, of the Operative Agreements or in connection with the
acquisition  of  any  Property by the  Owner  Trustee  or  in
connection with the making by any Holder of its investment in
the  Trust  or its acquisition of the beneficial interest  in
the  Trust  Estate  or in connection with  the  issuance  and
acquisition  of the Certificates, or the Notes,  and  neither
the Owner Trustee, the Trust Estate nor the trust created  by
the  Trust Agreement will be subject to any fee, tax or other
governmental  charge  (except taxes on fees  payable  to  the
Owner  Trustee) under the laws of the State of  Utah  or  any
political  subdivision thereof on, based on or  measured  by,
directly  or  indirectly, the gross receipts, net  income  or
value  of  the  Trust  Estate by reason of  the  creation  or
continued existence of the trust under the terms of the Trust
Agreement  pursuant to the laws of the State of Utah  or  the
Owner  Trustee's  performance of its duties under  the  Trust
Agreement.

      9.    There is no fee, tax or other governmental charge
under  the  laws  of  the  State of  Utah  or  any  political
subdivision thereof in existence on the date hereof on, based
on  or measured by any payments under the Certificates, Notes
or  the beneficial interest in the Trust Estate, by reason of
the  creation of the trust under the Trust Agreement pursuant
to  the  laws  of  the State of Utah or the  Owner  Trustee's
performance  of  its duties under the Trust Agreement  within
the State of Utah.

      10.  Upon the filing of the financing statement on form
UCC-1 (a copy of which has been provided to the Owner Trustee
and  reviewed  by us) with the Utah Division of  Corporations
and  Commercial  Code, the Agent's security interest  in  the
Trust Estate, for the benefit of the Lenders and the Holders,
will  be  perfected,  to the extent that such  perfection  is
governed  by Article 9 of the Uniform Commercial Code  as  in
effect in the State of Utah (the "Utah UCC").

      Your  attention  is  directed to the  Utah  UCC,  which
provides,  in  part, that a filed financing  statement  which
does  not  state a maturity date or which states  a  maturity
date  of  more than five (5) years is effective  only  for  a
period  of  five  (5) years from the date of  filing,  unless
within  six (6) months prior to the expiration of said period
a  continuation  statement is filed in  the  same  office  or
offices  in  which  the original statement  was  filed.   The
continuation  statement must be signed by the secured  party,
identify the original statement by file number and state that
the  original statement is still effective.  Upon the  timely
filing of a continuation statement, the effectiveness of  the
original financing statement is continued for five (5)  years
after  the  last  date  to which the original  statement  was
effective.  Succeeding continuation statements may  be  filed
in  the  same  manner  to continue the effectiveness  of  the
original statement.

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

      A.   We are attorneys admitted to practice in the State
of  Utah and in rendering the foregoing opinions we have  not
passed  upon,  or  purported to pass upon, the  laws  of  any
jurisdictions  other than the State of Utah and  the  federal
banking  law governing the banking and trust powers  of  FSB.
In  addition,  without limiting the foregoing we  express  no
opinion   with  respect  to  (i)  federal  securities   laws,
including  the  Securities  Act  of  1933,  as  amended,  the
Securities  Exchange Act of 1934, as amended, and  the  Trust
Indenture  Act  of 1939, as amended, (ii)  Title  49  of  the
United States Code Annotated (previously the Federal Aviation
Act  of  1958),  as amended, (iii) the Federal Communications
Act of 1934, as amended, or (iv) state securities or blue sky
laws.   Insofar  as  the  foregoing opinions  relate  to  the
legality, validity, binding effect and enforceability of  the
documents  involved  in these transactions,  which  by  their
terms are governed by the laws of a state other than Utah, we
have  assumed  that the laws of such state (as  to  which  we
express no opinion), are in all material aspects identical to
the laws of the State of Utah.

      B.    The opinions set forth in paragraphs 3, 4, and  5
above are subject to the qualification that enforceability of
the  Trust  Agreement and the other Operative  Agreements  to
which  FSB  and the Owner Trustee are parties, in  accordance
with   their  respective  terms,  may  be  limited   by   (i)
bankruptcy,     insolvency,    reorganization,    moratorium,
receivership   or  similar  laws  affecting  enforcement   of
creditors'  rights generally, and (ii) general principles  of
equity,   regardless  of  whether  such   enforceability   is
considered in a proceeding in equity or at law.

     C.   As to the documents involved in these transactions,
we  have  assumed  that each is a legal,  valid  and  binding
obligation of each party thereto, other than FSB or the Owner
Trustee,  and  is  enforceable against  each  such  party  in
accordance with their respective terms.

      D.    We  have assumed that all signatures, other  than
those  of  the  Owner  Trustee  or  FSB,  on  documents   and
instruments involved in these transactions are genuine,  that
all  documents and instruments submitted to us  as  originals
are   authentic,  and  that  all  documents  and  instruments
submitted  to us as copies conform with the originals,  which
facts we have not independently verified.

      E.   We do not purport to be experts in respect of,  or
express  any  opinion concerning laws, rules  or  regulations
applicable  to  the  particular nature of  the  equipment  or
property involved in these transactions.

     F.   We have made no investigation of, and we express no
opinion  concerning, the nature of the title to any  part  of
the  equipment or property involved in these transactions  or
the priority of any mortgage or security interest.

      G.    We  have assumed that the Participation Agreement
and  the transactions contemplated thereby are not within the
prohibitions of Section 406 of the Employee Retirement Income
Security Act of 1974.

     H.   In addition to any other limitation by operation of
law  upon the scope, meaning, or purpose of this opinion, the
opinions  expressed herein speak only as of the date  hereof.
We  have  no  obligation  to advise the  recipients  of  this
opinion (or any third party) and make no undertaking to amend
or supplement such opinions if facts come to our attention or
changes  in  the  current law of the jurisdictions  mentioned
herein  occur  which  could affect such  opinions  the  legal
analysis,  a legal conclusion or any information confirmation
herein.

      I.    This  opinion  is  for the sole  benefit  of  the
Lessees,  the Construction Agents, the Guarantor,  the  Owner
Trustee,  the  Holders,  the Lenders,  the  Agent  and  their
respective successors and assigns in matters directly related
to   the   Participation   Agreement   or   the   transaction
contemplated  thereunder and may not be relied  upon  by  any
other  person  other than such parties and  their  respective
successors and assigns without the express written consent of
the  undersigned.  The opinions expressed in this letter  are
limited to the matter set forth in this letter, and no  other
opinions  should  be  inferred beyond the  matters  expressly
stated.

                                   Very truly yours,

                                   RAY, QUINNEY & NEBEKER

                                   M. John Ashton

                      Distribution List

First  Union  National Bank, as the Agent,  a  Holder  and  a
Lender

The  various banks and other lending institutions  which  are
parties to the Participation Agreement from time to time,  as
additional Holders

The  various banks and other lending institutions  which  are
parties to the Participation Agreement from time to time,  as
additional Lenders

Performance Food Group Company, as the Guarantor

The  various parties to the Participation Agreement from time
to time, as the Construction Agents and the Lessees

First  Security Bank, National Association, not individually,
but  solely  as the Owner Trustee under the PFG  Real  Estate
Trust 2000-1

                          EXHIBIT H

               [CONFORM TO NEGOTIATED OPINION]

          [Outside Counsel Opinion for the Lessee]
(Pursuant to Section 5.3(ee) of the Participation Agreement)

                      ____________, ______

TO THOSE ON THE ATTACHED DISTRIBUTION LIST

          Re:  Synthetic Lease Financing Provided in favor of
               Performance Food Group Company

Dear Sirs:

We  have  acted as special counsel to Performance Food  Group
Company,  a Tennessee corporation (the "Guarantor")  and  the
various  parties to the Participation Agreement  (hereinafter
defined) from time to time, as the construction agents and as
the  lessees (individually, a "Lessee" and collectively,  the
"Lessees"; individually, each Lessee and the Guarantor may be
referred  to  herein as a "Credit Party" or collectively,  as
the "Credit Parties") in connection with certain transactions
contemplated by the Participation Agreement dated as of  June
9,  2000  (the "Participation Agreement"), among the Lessees,
the Guarantor, First Security Bank, National Association,  as
the  Owner  Trustee (the "Owner Trustee"), the various  banks
and other lending institutions which are parties thereto from
time  to time, as holders (the "Holders"), the various  banks
and other lending institutions which are parties thereto from
time  to  time,  as lenders (the "Lenders") and  First  Union
National  Bank,  as the agent for the Lenders and  respecting
the  Security Documents, as the agent for the Lenders and the
Holders,  to  the  extent of their interests  (the  "Agent").
This opinion is delivered pursuant to Section 5.3(ee) of  the
Participation Agreement.  All capitalized terms used  herein,
and  not  otherwise defined herein, shall have  the  meanings
assigned   thereto   in  Appendix  A  to  the   Participation
Agreement.

In connection with the foregoing, we have examined originals,
or  copies  certified to our satisfaction, of  the  Operative
Agreements, and such other corporate, partnership or  limited
liability  company  documents  and  records  of  the   Credit
Parties, certificates of public officials and representatives
of the Credit Parties as to certain factual matters, and such
other   instruments  and  documents  which  we  have   deemed
necessary  or  advisable to examine for the purpose  of  this
opinion.   With respect to such examination, we have  assumed
(i)  the  statements  of fact made in all such  certificates,
documents  and  instruments are true, accurate and  complete;
(ii)  the  due authorization, execution and delivery  of  the
Operative  Agreements by the parties thereto other  than  the
Credit  Parties;  (iii)  the genuineness  of  all  signatures
(other  than the signatures of persons signing on  behalf  of
the Credit Parties), the authenticity and completeness of all
documents,  certificates, instruments, records and  corporate
records  submitted to us as originals and the  conformity  to
the original instruments of all documents submitted to us  as
copies,  and  the  authenticity  and  completeness   of   the
originals  of such copies; (iv) that all parties  other  than
the  Credit  Parties have all requisite corporate  power  and
authority  to  execute,  deliver and  perform  the  Operative
Agreements;  and  (v)  the enforceability  of  the  Operative
Agreements against all parties thereto other than the  Credit
Parties and respecting the opinion set forth below in section
(i),  First Security Bank, National Association, individually
or as the Owner Trustee, as the case may be.  We have further
assumed  that  the laws of the States of [state  of  lawyer's
admission] and [governing law of Participation Agreement] are
substantively identical.

Based  on the foregoing, and having due regard for such legal
considerations  as  we  deem relevant,  and  subject  to  the
limitations  and  assumptions  set  forth  herein,  including
without limitation the matters set forth in the last two  (2)
paragraphs hereof, we are of the opinion that:

       (a)    Each  Credit  Party  is  a  corporation,   duly
incorporated, validly existing and in good standing under the
laws of the state of its incorporation and has the power  and
authority to conduct its business as presently conducted  and
to  execute,  deliver and perform its obligations  under  the
Operative  Agreements to which it is a  party.   Each  Credit
Party  is  duly qualified to do business in all jurisdictions
in  which  its failure to so qualify would materially  impair
its  ability  to perform its obligations under the  Operative
Agreements  to which it is a party or its financial  position
or its business as now and now proposed to be conducted.

      (b)   The execution, delivery and performance  by  each
Credit  Party of the Operative Agreements to which  it  is  a
party  have  been duly authorized by all necessary  corporate
action  on  the  part of such Credit Party and the  Operative
Agreements  to which such Credit Party is a party  have  been
duly executed and delivered by such Credit Party.

      (c)  The Operative Agreements to which any Credit Party
is  a  party constitute valid and binding obligations of such
Credit  Party  enforceable  against  such  Credit  Party   in
accordance  with  the terms thereof, subject  to  bankruptcy,
insolvency,    liquidation,    reorganization,     fraudulent
conveyance,  and  similar  laws affecting  creditors'  rights
generally,  and  general principles of equity (regardless  of
whether the application of such principles is considered in a
proceeding in equity or at law).

      (d)  The execution and delivery by each Credit Party of
the   Operative  Agreements  to  which  it  is  a  party  and
compliance  by  each Credit Party with all of the  provisions
thereof do not and will not (i) contravene the provisions of,
or  result in any breach of or constitute any default  under,
or  result  in the creation of any Lien (other than Permitted
Liens  and Lessor Liens) upon any of its property under,  its
Articles  of  Incorporation  or  by-laws  or  any  indenture,
mortgage, chattel mortgage, deed of trust, lease, conditional
sales  contract,  bank  loan  or credit  agreement  or  other
agreement or instrument to which any Credit Party is a  party
or  by  which it or any property of any Credit Party  may  be
bound  or affected, or (ii) contravene any Laws or any  order
of any Governmental Authority applicable to or binding on any
Credit Party.

      (e)   No  Governmental Action by, and no notice  to  or
filing  with, any Governmental Authority is required for  the
due execution, delivery or performance by any Credit Party of
any of the Operative Agreements to which any Credit Party  is
a  party or for the acquisition, ownership, construction  and
completion  of  the Properties, except for those  which  have
been obtained.

     (f)  Except as set forth on Schedule 1 hereto, there are
no actions, suits or proceedings pending or to our knowledge,
threatened  against any Credit Party in any court  or  before
any  Governmental Authority, that concern the  Properties  or
the interest of any Credit Party therein or that question the
validity  or  enforceability of any  Operative  Agreement  to
which  any Credit Party is a party or the overall transaction
described  in  the Operative Agreements to which  any  Credit
Party is a party.

      (g)   Neither  the  nature of the Properties,  nor  any
relationship  between any Credit Party and any other  Person,
nor  any  circumstance  in  connection  with  the  execution,
delivery and performance of the Operative Agreements to which
any  Credit  Party  is  a party is such  as  to  require  any
approval  of stockholders of, or approval or consent  of  any
trustee  or  holders of indebtedness of,  any  Credit  Party,
except  for such approvals and consents which have been  duly
obtained and are in full force and effect.

     (h)  The Security Documents which have been executed and
delivered  as  of  the date of this opinion create,  for  the
benefit  of  the  Agent,  the  security  interests   in   the
Collateral  described  therein  which  by  their  terms  such
Security Documents purport to create.  Upon filing of the UCC-
1  financing  statements  (attached  hereto  as  Schedule  2)
relating  to the Security Documents in the recording  offices
of  (A) the respective county clerk where the principal place
of business of the Lessee is located and (B) the Secretary of
State where the principal place of business of the Lessee  is
located,  the  Agent  will have a valid, perfected  lien  and
security interest in that portion of the Collateral which can
be  perfected  by  the  filing of UCC-1 financing  statements
under Article 9 of the UCC in [identify the state].

      (i)   The  Operative Agreements to which First Security
Bank,  National  Association, individually or  as  the  Owner
Trustee,  is a party constitute valid and binding obligations
of  such  party  and are enforceable against  First  Security
Bank,  National  Association, individually or  as  the  Owner
Trustee,  as  the case may be, in accordance with  the  terms
thereof,  subject  to  bankruptcy,  insolvency,  liquidation,
reorganization,  fraudulent  conveyance,  and  similar   laws
affecting creditors, rights generally, and general principles
of  equity  (regardless of whether the  application  of  such
principles  is  considered in a proceeding in  equity  or  at
law).

     (j)  The offer, issuance, sale and delivery of the Notes
and   the   offer,  issuance,  sale  and  delivery   of   the
Certificates  under  the circumstances  contemplated  by  the
Participation Agreement do not, under existing  law,  require
registration of the Notes or the Certificates being issued on
the date hereof under the Securities Act of 1933, as amended,
or  the qualification of the Trust Agreement under the  Trust
Indenture Act of 1939, as amended.

This  opinion is limited to the matters stated herein and  no
opinion  is  implied  or may be inferred beyond  the  matters
stated  herein.  This opinion is based on and is  limited  to
the  laws of the States of [__________], and the federal laws
of  the  United States of America.  Insofar as the  foregoing
opinion  relates to matters of law other than the  foregoing,
no opinion is hereby given.

This  opinion  is  for the sole benefit of the  Lessees,  the
Construction  Agents, the Guarantor, the Owner  Trustee,  the
Holders,   the  Lenders,  the  Agent  and  their   respective
successors  and  assigns and may not be relied  upon  by  any
other  person  other than such parties and  their  respective
successors and assigns without the express written consent of
the undersigned.  The opinions expressed herein are as of the
date  hereof  and  we   make  no  undertaking  to  amend   or
supplement  such opinions if facts come to our  attention  or
changes  in  the  current law of the jurisdictions  mentioned
herein occur which could affect such opinions.

                                   Very truly yours,

[LESSEE'S OUTSIDE COUNSEL]

                      Distribution List

First  Union  National Bank, as the Agent,  a  Holder  and  a
Lender

Performance Food Group Company, as the Guarantor

The  various parties to the Participation Agreement from time
to time, as the Construction Agents and the Lessees

The  various banks and other lending institutions  which  are
parties to the Participation Agreement from time to time,  as
additional Holders

The  various banks and other lending institutions  which  are
parties to the Participation Agreement from time to time,  as
additional Lenders

First  Security Bank, National Association, not individually,
but  solely  as the Owner Trustee under the PFG  Real  Estate
Trust 2000-1

                         Schedule 1

                        (Litigation)

                         Schedule 2

                (UCC-1 Financing Statements)

                          EXHIBIT I

                      [NAME OF LESSEE]

                    OFFICER'S CERTIFICATE
  (Pursuant to Section 5.5 of the Participation Agreement)

      [NAME  OF  LESSEE], a _______________ corporation  (the
"Company") DOES HEREBY CERTIFY as follows:

1.   The    address    for    the   subject    Property    is
     ________________________________________
     ________________________________.

2.   The Completion Date for the construction of Improvements
     at the Property occurred on ______________.

3.   The   aggregate  Property  Cost  for  the  Property  was
     $___________.

4.   Attached  hereto as Schedule 1 is the detailed, itemized
     documentation  supporting  the  asserted  Property  Cost
     figures.

5.   All  representations and warranties of  the  Company  in
     each   Operative  Agreement  and  in  each   certificate
     delivered pursuant thereto (including without limitation
     the  Incorporated  Representations and  Warranties)  are
     true and correct as of the Completion Date.

Capitalized terms used in this Officer's Certificate and  not
otherwise  defined  have  the  respective  meanings  ascribed
thereto  in  the  Participation Agreement dated  as  of  June
9,  2000 among the various parties thereto from time to time,
as  the  Lessees and as the Construction Agents,  Performance
Food  Group Company, as the guarantor (the "Guarantor") First
Security  Bank,  National Association, as the Owner  Trustee,
the  various banks and other lending institutions  which  are
parties   thereto  from  time  to  time,  as   holders   (the
"Holders"),  the various banks and other lending institutions
which are parties thereto from time to time, as lenders  (the
"Lenders"), First Union National Bank, as the agent  for  the
Lenders  and respecting the Security Documents, as the  agent
for  the  Lenders  and the Holders, to the  extent  of  their
interests.

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

IN  WITNESS  WHEREOF, the Company has caused  this  Officer's
Certificate to be duly executed and delivered as of this ____
day of ______________, ______.

                              [NAME OF LESSEE]

                              By:
                              Name:
                              Title:

                         Schedule I

(Itemized Documentation in Support of Asserted Property Cost)

                          EXHIBIT J

            [Description of Material Litigation]
 (Pursuant to Section 6.2(d) of the Participation Agreement)

                            NONE

                          EXHIBIT K

  [States of Incorporation/Formation and Principal Place of
               Business of Each Credit Party]
 (Pursuant to Section 6.2(i) of the Participation Agreement)

                                                    Location of
                                     State of       Office where
                                      Chief           Records
                    State of        Executive        concerning
 Credit Party   Incorporation/      Office and      Accounts and
                    Formation       Principal     Contract Rights
                                    Place of     Relating to Any
                                    Business    Property are Kept

  Performance       Tennessee        Virginia    6800 Paragon Place
     Food                                        Ste. 500
 Group Company                                   Richmond, VA
                                                 23230

                         Appendix A
               Rules of Usage and Definitions

                     I.  Rules of Usage

The following rules of usage shall apply to this Appendix A
and the Operative Agreements (and each appendix, schedule,
exhibit and annex to the foregoing) unless otherwise required
by the context or unless otherwise defined therein:

     (a)  Except as otherwise expressly provided, any
definitions set forth herein or in any other document shall
be equally applicable to the singular and plural forms of the
terms defined.

     (b)  Except as otherwise expressly provided, references
in any document to articles, sections, paragraphs, clauses,
annexes, appendices, schedules or exhibits are references to
articles, sections, paragraphs, clauses, annexes, appendices,
schedules or exhibits in or to such document.

     (c)  The headings, subheadings and table of contents
used in any document are solely for convenience of reference
and shall not constitute a part of any such document nor
shall they affect the meaning, construction or effect of any
provision thereof.

     (d)  References to any Person shall include such Person,
its successors, permitted assigns and permitted transferees.

     (e)  Except as otherwise expressly provided, reference
to any agreement means such agreement as amended, modified,
extended, supplemented, restated and/or replaced from time to
time in accordance with the applicable provisions thereof.

     (f)  Except as otherwise expressly provided, references
to any law includes any amendment or modification to such law
and any rules or regulations issued thereunder or any law
enacted in substitution or replacement therefor.

     (g)  When used in any document, words such as
"hereunder", "hereto", "hereof" and "herein" and other words
of like import shall, unless the context clearly indicates to
the contrary, refer to the whole of the applicable document
and not to any particular article, section, subsection,
paragraph or clause thereof.

     (h)  References to "including" means including without
limiting the generality of any description preceding such
term and for purposes hereof the rule of ejusdem generis
shall not be applicable to limit a general statement,
followed by or referable to an enumeration of specific
matters, to matters similar to those specifically mentioned.

     (i)  References herein to "attorney's fees", "legal
fees", "costs of counsel" or other such references shall be
deemed to include the allocated cost of in-house counsel.

     (j)  Each of the parties to the Operative Agreements and
their counsel have reviewed and revised, or requested
revisions to, the Operative Agreements, and the usual rule of
construction that any ambiguities are to be resolved against
the drafting party shall be inapplicable in the construction
and interpretation of the Operative Agreements and any
amendments or exhibits thereto.

     (k)  Capitalized terms used in any Operative Agreements
which are not defined in this Appendix A but are defined in
another Operative Agreement shall have the meaning so
ascribed to such term in the applicable Operative Agreement.

     (l)  In computing any period of time for purposes of any
Operative Agreement, the mechanics for counting the number of
days set forth in Rule 6 of the Federal Rules of Civil
Procedure shall be observed.

                      II.  Definitions

      "AAA"  shall  have the meaning given to  such  term  in
Section 12.7(d) of the Participation Agreement.

     "ABR" shall mean, for any day, a rate per annum equal to
the  greater of (a) the Prime Lending Rate in effect on  such
day,  and  (b) the Federal Funds Effective Rate in effect  on
such  day  plus one-half of one percent (0.5%).  For purposes
hereof:   "Prime Lending Rate" shall mean the rate  announced
by  the Agent from time to time as its prime lending rate  as
in  effect  from time to time.  The Prime Lending Rate  is  a
reference rate and is one of several interest rate bases used
by the Agent and does not necessarily represent the lowest or
most favorable rate offered by the Agent actually charged  to
any  customer.  Any Lender may make commercial loans or other
loans  at  rates  of interest at, above or  below  the  Prime
Lending   Rate.    The  Prime  Lending  Rate   shall   change
automatically  and without notice from time to  time  as  and
when  the  prime lending rate of the Agent changes.  "Federal
Funds   Effective  Rate"  shall  mean,  for  any  period,   a
fluctuating interest rate per annum equal for each day during
such period to the weighted average of the rates on overnight
Federal  funds  transactions  with  members  or  the  Federal
Reserve   System  arranged  by  Federal  funds  brokers,   as
published  for  such day (or, if such day is not  a  Business
Day,  for  the  next preceding Business Day) by  the  Federal
Reserve  Bank  of  New  York, or, if  such  rate  is  not  so
published for any day which is a Business Day, the average of
the quotations for such day on such transactions received  by
the  Agent from three (3) Federal funds brokers of recognized
standing  selected by it.  Any change in the  ABR  due  to  a
change  in  the  Prime  Lending Rate  or  the  Federal  Funds
Effective  Rate  shall  be effective as  of  the  opening  of
business  on  the effective day of such change in  the  Prime
Lending   Rate   or   the  Federal  Funds   Effective   Rate,
respectively.

     "ABR Holder Advance" shall mean a Holder Advance bearing
a Holder Yield based on the ABR.

      "ABR  Loans"  shall  mean Loans the  rate  of  interest
applicable to which is based upon the ABR.

     "Acceleration" shall have the meaning given to such term
in Section 6 of the Credit Agreement.

      "Accounts" shall have the meaning given to such term in
Section 1 of the Security Agreement.

      "Acquisition Advance" shall have the meaning  given  to
such term in Section 5.3 of the Participation Agreement.

       "Acquisition  Loan"  shall  mean  any  Loan  made   in
connection with an Acquisition Advance.

      "Additional Incorporated Terms" shall have the  meaning
given to such term in Section 28.1 of the Lease.

      "Advance"  shall  mean  a Construction  Advance  or  an
Acquisition Advance.

      "Affiliate" shall mean, with respect to any Person, any
Person or group acting in concert in respect of the Person in
question  that,  directly  or  indirectly,  controls  or   is
controlled by or is under common control with such Person.

      "After  Tax  Basis"  shall mean, with  respect  to  any
payment  to be received, the amount of such payment increased
so  that, after deduction of the amount of all taxes required
to  be  paid by the recipient calculated at the then  maximum
marginal  rates generally applicable to Persons of  the  same
type  as  the recipients with respect to the receipt  by  the
recipient of such amounts (less any tax savings realized as a
result  of  the  payment  of  the indemnified  amount),  such
increased  payment (as so reduced) is equal  to  the  payment
otherwise required to be made.

      "Agency  Agreement"  shall mean the  Agency  Agreement,
dated  on  or  about  the Initial Closing  Date  between  the
Construction  Agents that are parties thereto  from  time  to
time and the Lessor.

     "Agency Agreement Event of Default" shall mean an "Event
of   Default"  as  defined  in  Section  5.1  of  the  Agency
Agreement.

      "Agent" shall mean First Union National Bank, as  agent
for  the  Lenders  pursuant to the Credit Agreement,  or  any
successor agent appointed in accordance with the terms of the
Credit  Agreement and respecting the Security Documents,  for
the   Lenders  and  the  Holders,  to  the  extent  of  their
interests.

     "Applicable Percentage" shall mean for Eurodollar Loans
and Eurodollar Holder Advances, the appropriate applicable
percentages corresponding to the Leverage Ratio in effect as
of the most recent Calculation Date as shown below:

Pricing Level   Leverage Ratio             Eurodollar Loans   Holder Advances
Level I         >.50 to 1.0                          0.750%            1.500%
Level II        >.40 to 1, but <=.50 to 1.0          0.625%            1.400%
Level III       >.30 to 1, but <=.40 to 1.0          0.500%            1.250%
Level IV        <=.30 to 1.0                         0.425%            1.175%

      The  Applicable  Percentage for  Eurodollar  Loans  and
Eurodollar Holder Advances shall, in each case, be determined
and adjusted quarterly on the tenth (10th) Business Day after
receipt  by  the Agent of quarterly financial statements  for
the  Guarantor  and  its Subsidiaries  and  the  accompanying
Officer's  Compliance Certificate setting forth the  Leverage
Ratio  of  the Guarantor and its Subsidiaries as of the  most
recent  fiscal quarter end, as required pursuant to  Sections
7.1   and  7.2  of  the  Lessee  Credit  Agreement  and,   by
incorporation, pursuant to Section 28.1 of the Lease (each  a
"Calculation Date"); provided, however, that (i) the  initial
Applicable  Percentage,  in each  case,  shall  be  based  on
Pricing  Level  ___  (as shown above)  and  shall  remain  at
Pricing  Level ___ until the next occurring Calculation  Date
and, thereafter, the Pricing Level shall be determined by the
then  current Leverage Ratio, and (ii) if the Guarantor fails
to  provide  the  financial statements and related  Officer's
Compliance Certificate required pursuant to Sections 7.1  and
7.2  of  the  Lessee Credit Agreement (and, by incorporation,
pursuant  to Section 28.1 of the Lease)  to the Agent  on  or
before  the  most  recent Calculation  Date,  the  Applicable
Percentage, in each case, from such Calculation Date shall be
based  on Pricing Level I until such time that such financial
statements  and related Officer's Compliance Certificate  are
provided, whereupon the Pricing Level shall be determined  by
the  then current Leverage Ratio.  Each Applicable Percentage
shall  be effective from one Calculation Date until the  next
Calculation   Date.    Any  adjustment  in   the   Applicable
Percentage  shall  be  applicable to all existing  Eurodollar
Loans  and  Eurodollar Holder Advances as  well  as  any  new
Eurodollar  Loans  and  Eurodollar Holder  Advances  made  or
issued.

     "Appraisal" shall mean, with respect to any Property, an
appraisal   to   be   delivered  in   connection   with   the
Participation Agreement or in accordance with  the  terms  of
the  Lease,  in  each case prepared by a reputable  appraiser
reasonably acceptable to the Agent, which in the judgment  of
counsel to the Agent, complies with all of the provisions  of
the  Financial Institutions Reform, Recovery and  Enforcement
Act  of  1989, as amended, the rules and regulations  adopted
pursuant   thereto,   and   all   other   applicable    Legal
Requirements.

      "Appraisal Procedure" shall have the meaning given such
term in Section 22.4 of the Lease.

      "Approved  State"  shall mean each  of  the  following:
Virginia  and  any other state within the continental  United
States  proposed by the Guarantor and consented to in writing
by the Agent in its reasonable discretion.

      "Appurtenant  Rights" shall mean  (a)  all  agreements,
easements, rights of way or use, rights of ingress or egress,
privileges, appurtenances, tenements, hereditaments and other
rights  and  benefits at any time belonging or pertaining  to
the  Land  underlying the Improvements or  the  Improvements,
including  without limitation the use of any  streets,  ways,
alleys,   vaults  or  strips  of  land  adjoining,  abutting,
adjacent  or  contiguous to the Land  and  (b)  all  permits,
licenses and rights, whether or not of record, appurtenant to
such Land or the Improvements.

     "Arbitration Rules" shall have the meaning given to such
term in Section 12.7(d) of the Participation Agreement.

      "Assignment  and Acceptance" shall mean the  Assignment
and  Acceptance in the form attached to the Credit  Agreement
as EXHIBIT B.

      "Available Commitment" shall mean, as to any Lender  at
any  time, an amount equal to the excess, if any, of (a)  the
amount  of  such Lender's Commitment over (b)  the  aggregate
principal amount of all Loans made by such Lender as of  such
date   after   giving  effect  to  Section  5.2(d)   of   the
Participation  Agreement (but without giving  effect  to  any
other repayments or prepayments of any Loans hereunder).

      "Available  Holder Commitments" shall  mean  an  amount
equal  to the excess, if any, of (a) the aggregate amount  of
the  Holder Commitments over (b) the aggregate amount of  the
Holder  Advances  made since the Initial Closing  Date  after
giving   effect   to  Section  5.2(d)  of  the  Participation
Agreement  (but without giving effect to any other repayments
or prepayments of any Holder Advances).

      "Bankruptcy Code" shall mean Title 11 of the U. S. Code
entitled "Bankruptcy," as now or hereafter in effect  or  any
successor thereto.

       "Basic  Documents"  shall  mean  the  following:   the
Participation  Agreement,  the Agency  Agreement,  the  Trust
Agreement, the Certificates, the Credit Agreement, the Notes,
the  Lease  (including each Lease Supplement and the  related
memorandum  of  Lease  and  such Lease  Supplement)  and  the
Security Agreement.

      "Basic Rent" shall mean, the sum of (a) the Loan  Basic
Rent  and  (b) the Lessor Basic Rent, calculated  as  of  the
applicable date on which Basic Rent is due.

      "Benefited Lender" shall have the meaning specified  in
Section 9.10(a) of the Credit Agreement.

      "Bill  of  Sale"  shall mean a Bill of  Sale  regarding
Equipment in form and substance satisfactory to the Agent.

     "Board" shall mean the Board of Governors of the Federal
Reserve System of the United States (or any successor).

      "Borrower"  shall mean the Owner Trustee,  not  in  its
individual   capacity  but  as  Borrower  under  the   Credit
Agreement.

      "Borrowing Date" shall mean any Business Day  specified
in  a  notice delivered pursuant to Section 2.3 of the Credit
Agreement as a date on which the Lessor requests the  Lenders
to make Loans hereunder.

      "Budgeted Total Property Cost" shall mean, at any  date
of  determination  with  respect to any  Construction  Period
Property,  an amount equal to the aggregate amount which  the
applicable  Construction Agent in good faith  expects  to  be
expended in order to achieve Completion with respect to  such
Property.

      "Business Day" shall mean a day other than a  Saturday,
Sunday  or  other  day  on which commercial  banks  in  North
Carolina or any other states from which the Agent, any Lender
or  any  Holder funds or engages in administrative activities
with   respect  to  the  transactions  under  the   Operative
Agreements  are  authorized  or required  by  law  to  close;
provided,  however,  that  when used  in  connection  with  a
Eurodollar  Loan, the term "Business Day" shall also  exclude
any  day  on which banks are not open for dealings in  dollar
deposits in the London interbank market.

     "Capital Lease" means, with respect to the Guarantor and
its  Subsidiaries, any lease of any property that should,  in
accordance with GAAP, be classified and accounted  for  as  a
capital  lease  on  a  Consolidated  balance  sheet  of   the
Guarantor and its Subsidiaries.

     "Capital Stock" means any nonredeemable capital stock of
the  Guarantor or any Subsidiary thereof, whether  common  or
preferred.

     "Capitalization"  means, with respect to  the  Guarantor
and its Subsidiaries at any date and without duplication, the
sum  of the following calculated in accordance with GAAP: (a)
Total Debt plus (b) Consolidated Stockholders' Equity.

      "Capitalized  Lease"  shall mean,  as  applied  to  any
Person,  any  lease  of  property  (whether  real,  personal,
tangible, intangible or mixed of such Person) by such  Person
as  the lessee which would be capitalized on a balance  sheet
of such Person prepared in accordance with GAAP.

      "Casualty" shall mean any damage or destruction of  all
or any portion of the Property as a result of a fire or other
casualty.

      "CERCLA"  shall  mean  the Comprehensive  Environmental
Response, Compensation, and Liability Act of 1980, 42  U.S.C.
  9601  et  seq., as amended by the Superfund Amendments  and
Reauthorization Act of 1986.

      "Certificate" shall mean a Certificate in favor of each
Holder  regarding the Holder Commitment of such Holder issued
pursuant  to the terms and conditions of the Trust  Agreement
in favor of each Holder.

      "Chattel  Paper" shall have the meaning given  to  such
term in Section 1 of the Security Agreement.

       "Claims"   shall   mean  any  and   all   obligations,
liabilities,  losses,  actions,  suits,  penalties,   claims,
demands,  costs  and  expenses (including without  limitation
reasonable  attorney's  fees  and  expenses)  of  any  nature
whatsoever.

      "Closing Date" shall mean the Initial Closing Date  and
each Property Closing Date.

      "Code"  shall mean the Internal Revenue  Code  of  1986
together  with rules and regulations promulgated  thereunder,
as  amended  from  time  to time, or  any  successor  statute
thereto.

      "Collateral" shall mean all assets of the Lessor,  each
Construction  Agent and each Lessee, now owned  or  hereafter
acquired, upon which a Lien is purported to be created by one
or more of the Security Documents.

      "Commencement Date" shall have the meaning specified in
Section 2.2 of the Lease.

     "Commitment" shall mean, as to any Lender, the Lender
Commitment of such Lender.

      "Commitment Percentage" shall mean, as to any Lender at
any  time, the percentage which such Lender's Commitment then
constitutes  of the aggregate Commitments (or,  at  any  time
after  the Commitments shall have expired or terminated,  the
percentage  which  the  aggregate principal  amount  of  such
Lender's  Loans then outstanding constitutes of the aggregate
principal  amount of all of the Loans then outstanding),  and
such  Commitment Percentage shall take into account both  the
Lender's  Tranche  A  Commitment and the Lender's  Tranche  B
Commitment.

      "Commitment  Period" shall mean  the  period  from  and
including  the  Initial Closing Date  to  and  including  the
Construction Period Termination Date, or such earlier date as
the  Commitments shall terminate as provided  in  the  Credit
Agreement  or  the  Holder  Commitment  shall  terminate   as
provided in the Trust Agreement.

     "Company  Obligations" shall mean, with respect  to  any
Lessee  or  any Construction Agent, the obligations  of  such
Lessee or Construction Agent, in any and all capacities under
and  with  respect  to  the  Operative  Agreements  and  each
Property of which it is a Lessee or Construction Agent.

      "Completion"  shall mean, with respect to  a  Property,
such time as the acquisition, installation, testing and final
completion  of  the  Improvements on such Property  has  been
achieved in accordance with the Plans and Specifications, the
Agency Agreement and/or the Lease, and in compliance with all
Legal   Requirements   and  Insurance  Requirements   and   a
certificate of occupancy has been issued with respect to such
Property  by the appropriate governmental entity  (except  if
non-compliance, individually or in the aggregate,  shall  not
have  and could not reasonably be expected to have a Material
Adverse  Effect).  If the Lessor purchases  a  Property  that
includes  existing  Improvements that are to  be  immediately
occupied  by the Lessee without any contemplated improvements
that are to be financed pursuant to the Operative Agreements,
the  date  of  Completion  for such  Property  shall  be  the
Property Closing Date.

       "Completion  Date"  shall  mean,  with  respect  to  a
Property, the earlier of (a) the date on which Completion for
such  Property  has  occurred or (b) the Construction  Period
Termination Date.

     "Condemnation" shall mean any taking or sale of the use,
access,  occupancy, easement rights or title to any  Property
or  any  part  thereof, wholly or partially  (temporarily  or
permanently),  by or on account of any actual  or  threatened
eminent  domain proceeding or other taking of action  by  any
Person  having the power of eminent domain, including without
limitation  an action by a Governmental Authority  to  change
the  grade of, or widen the streets adjacent to, any Property
or  alter  the pedestrian or vehicular traffic  flow  to  any
Property  so  as  to  result in a change in  access  to  such
Property,  or  by or on account of an eviction  by  paramount
title or any transfer made in lieu of any such proceeding  or
action.

     "Consolidated"  means,  when  used  with  reference   to
financial  statements  or financial statement  items  of  the
Guarantor and its Subsidiaries, such statements or items on a
consolidated  basis in accordance with applicable  principles
of consolidation under GAAP.

      "Consolidated Subsidiary" shall mean, as to any Person,
any  Subsidiary of such Person which under the rules of  GAAP
consistently  applied  should  have  its  financial   results
consolidated  with  those  of such  Person  for  purposes  of
financial accounting statements.

     "Construction Advance" shall mean an advance of funds to
pay   Property  Costs  pursuant  to  Section   5.4   of   the
Participation Agreement.

     "Construction  Agent"  shall mean  any  Eligible  Lessee
designated  as lessee (or construction agent)  in  any  Lease
Supplement  respecting any Property if such  Eligible  Lessee
shall  have also executed a Lessee Joinder or is otherwise  a
party  to  certain of the Operative Agreements  by  execution
thereof  on  or  prior to the Initial Closing  Date,  as  the
construction agent under the Agency Agreement respecting such
Property.

       "Construction   Budget"  shall  mean   the   cost   of
acquisition,   installation,   testing,   constructing    and
developing  any  Property as determined by  any  Construction
Agent in its reasonable, good faith judgment.

       "Construction  Commencement  Date"  shall  mean,  with
respect  to  Improvements, the date on which construction  of
such Improvements commences pursuant to the Agency Agreement.

      "Construction Contract" shall mean any contract entered
into  between  any Construction Agent or any  Lessee  with  a
Contractor  for  the  construction  of  Improvements  or  any
portion thereof on the Property.

       "Construction  Loan"  shall  mean  any  Loan  made  in
connection with a Construction Advance.

      "Construction  Loan  Property  Cost"  shall  mean  with
respect  to each Construction Period Property at the date  of
determination, an amount equal to (a) the aggregate principal
amount  of  Construction Loans made on or prior to such  date
with   respect  to  the  Property  minus  (b)  the  aggregate
principal  amount of prepayments or repayments of  the  Loans
allocated  to reduce the Construction Loan Property  Cost  of
such  Property  pursuant  to Section  2.6(c)  of  the  Credit
Agreement.

      "Construction  Period" shall mean, with  respect  to  a
Property,   the   period  commencing  on   the   Construction
Commencement  Date  for  such  Property  and  ending  on  the
Completion Date for such Property.

      "Construction Period Property" means, at  any  date  of
determination, any Property as to which the Rent Commencement
Date has not occurred on or prior to such date.

      "Construction Period Termination Date" shall  mean  (a)
the  earlier of (i) the date that the Commitments  have  been
terminated in their entirety in accordance with the terms  of
Section  2.5(a) of the Credit Agreement, or (ii)  the  second
anniversary  of  the Initial Closing Date or (b)  such  later
date as shall be agreed to by the Majority Secured Parties.

      "Contractor"  shall  mean each  entity  with  whom  any
Construction  Agent or any Lessee contracts to construct  any
Improvements or any portion thereof on the Property.

       "Controlled  Group"  shall  mean  all  members  of   a
controlled group of corporations and all trades or businesses
(whether  or  not incorporated) under common  control  which,
together  with  any  Credit Party, are treated  as  a  single
employer under Section 414 of the Code.

      "Co-Owner Trustee" shall have the meaning specified  in
Section 9.2 of the Trust Agreement.

      "Credit  Agreement"  shall mean the  Credit  Agreement,
dated on or about the Initial Closing Date, among the Lessor,
the Agent and the Lenders, as specified therein.

      "Credit  Agreement Default" shall  mean  any  event  or
condition  which,  with the lapse of time or  the  giving  of
notice, or both, would constitute a Credit Agreement Event of
Default.

     "Credit Agreement Event of Default" shall mean any event
or condition defined as an "Event of Default" in Section 6 of
the Credit Agreement.

       "Credit   Documents"  shall  mean  the   Participation
Agreement,  the Credit Agreement, the Notes and the  Security
Documents.

"Credit  Parties"  shall mean each Construction  Agent,  each
Lessee and the Guarantor.

     "Debt"  means,  with respect to the  Guarantor  and  its
Subsidiaries at any date and without duplication, the sum  of
the   following  calculated  on  a  Consolidated   basis   in
accordance  with  GAAP: (a) all liabilities, obligations  and
indebtedness for borrowed money including but not limited  to
obligations  evidenced by bonds, debentures, notes  or  other
similar  instruments  of  the  Guarantor  or  any  Subsidiary
thereof,  (b)  all  obligations to pay the deferred  purchase
price  of  property  or  services of  the  Guarantor  or  any
Subsidiary   thereof,   including  without   limitation   all
obligations  under non-competition agreements  but  excluding
(i) trade payables arising in the ordinary course of business
and  (ii)  all  amounts payable under any earn-out  agreement
unless  any such earn-out payment is payable in cash and  has
been  deemed  earned  and required  to  be  included  on  the
financial  statements  of  the Guarantor  or  any  Subsidiary
thereof in accordance with GAAP, (c) all obligations  of  the
Guarantor  or any Subsidiary thereof as lessee under  Capital
Leases, (d) all Debt of any other Person secured by a Lien on
any asset of the Guarantor or any Subsidiary thereof, (e) all
Guaranty  Obligations  of  the Guarantor  or  any  Subsidiary
thereof  (excluding any Guaranty Obligations  on  account  of
trade  payables arising in the ordinary course of  business),
(f)   all  obligations,  contingent  or  otherwise,  of   the
Guarantor  or  any Subsidiary thereof relative  to  the  face
amount  of letters of credit, whether or not drawn, including
without limitation any Reimbursement Obligation, and banker's
acceptances  issued for the account of the Guarantor  or  any
Subsidiary  thereof, (g) all obligations of the Guarantor  or
any  Subsidiary  thereof  to  redeem,  repurchase,  exchange,
defease  or  otherwise make payments in  respect  of  capital
stock  or other securities of the Guarantor or any Subsidiary
thereof and (h) all obligations incurred by the Guarantor  or
any Subsidiary thereof pursuant to Hedging Agreements.

      "Deed"  shall mean a warranty deed regarding  the  Land
and/or Improvements in form and substance satisfactory to the
Agent.

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

     "Defaulting Holder" shall have the meaning given to such
term in Section 12.4 of the Participation Agreement.

     "Defaulting Lender" shall have the meaning given to such
term in Section 12.4 of the Participation Agreement.

      "Deficiency  Balance" shall have the meaning  given  in
Section 22.1(b) of the Lease Agreement.

      "Disputes" shall have the meaning given to such term in
Section 12.7(d) of the Participation Agreement.

     "Documents" shall have the meaning given to such term in
Section 1 of the Security Agreement.

      "Dollars" and "$" shall mean dollars in lawful currency
of the United States of America.

     "ELLF"  means,  at any date with respect to  any  Credit
Party  and its Subsidiaries, any synthetic lease, end  loaded
lease  financing, tax retention operating lease,  off-balance
sheet loan or similar off-balance sheet financing product  to
which such Credit Party or any Subsidiary thereof is a party,
where   such   transaction  is  considered   borrowed   money
indebtedness  for  tax  purposes  but  is  classified  as  an
operating  lease  in  accordance with GAAP  on  a  consistent
basis.

      "Election  Date" shall have the meaning given  to  such
term in Section 20.1 of the Lease.

      "Election Notice" shall have the meaning given to  such
term in Section 20.1 of the Lease.

     "Eligible Lessee" shall mean the Guarantor or any Wholly-
Owned Entity.

     "Employee Benefit Plan" or "Plan" shall mean an employee
benefit  plan (within the meaning of Section 3(3)  of  ERISA,
including without limitation any Multiemployer Plan), or  any
"plan"  as defined in Section 4975(e)(1) of the Code  and  as
interpreted   by  the  Internal  Revenue  Service   and   the
Department  of  Labor  in  rules,  regulations,  releases  or
bulletins in effect on any Closing Date.

      "Environmental  Claims" shall mean  any  investigation,
notice,   violation,   demand,  allegation,   action,   suit,
injunction,  judgment, order, consent decree, penalty,  fine,
lien, proceeding, or claim (whether administrative, judicial,
or  private  in  nature)  arising  (a)  pursuant  to,  or  in
connection  with,  an  actual or alleged  violation  of,  any
Environmental  Law,  (b)  in connection  with  any  Hazardous
Substance,   (c)  from  any  abatement,  removal,   remedial,
corrective,  or  other response action in connection  with  a
Hazardous Substance, Environmental Law, or other order  of  a
Tribunal  or  (d) from any actual or alleged damage,  injury,
threat, or harm to health, safety, natural resources, or  the
environment.

       "Environmental  Laws"  shall  mean  any  Law,  permit,
consent, approval, license, award, or other authorization  or
requirement   of   any   Tribunal  relating   to   emissions,
discharges,  releases, threatened releases of  any  Hazardous
Substance  into  ambient air, surface  water,  ground  water,
publicly  owned treatment works, septic system, or  land,  or
otherwise  relating  to  the  handling,  storage,  treatment,
generation,   use,  or  disposal  of  Hazardous   Substances,
pollution  or to the protection of health or the environment,
including    without   limitation   CERCLA,   the    Resource
Conservation and Recovery Act, 42 U.S.C.  6901, et seq.,  and
state statutes analogous thereto.

      "Environmental  Violation"  shall  mean  any  activity,
occurrence  or condition that violates or threatens  (if  the
threat  requires remediation under any Environmental Law  and
is  not remediated during any grace period allowed under such
Environmental Law) to violate or results in or threatens  (if
the  threat requires remediation under any Environmental  Law
and  is not remediated during any grace period allowed  under
such  Environmental Law) to result in noncompliance with  any
Environmental Law.

        "Equipment"   shall   mean   equipment,    apparatus,
furnishings, fittings and personal property of every kind and
nature  whatsoever  purchased, leased or  otherwise  acquired
using the proceeds of the Loans or the Holder Advances by the
applicable Construction Agent, the applicable Lessee  or  the
Lessor  and  all improvements and modifications  thereto  and
replacements  thereof, whether or not now owned or  hereafter
acquired or now or subsequently attached to, contained in  or
used or usable in any way in connection with any operation of
any   Improvements,  including  but  without   limiting   the
generality of the foregoing, all equipment described  in  the
Appraisal   including   without   limitation   all   heating,
electrical, and mechanical equipment, lighting, switchboards,
plumbing,   ventilation,  air  conditioning  and  air-cooling
apparatus,   refrigerating,   and   incinerating   equipment,
escalators,  elevators, loading and unloading  equipment  and
systems,   cleaning  systems  (including  without  limitation
window cleaning apparatus), telephones, communication systems
(including without limitation satellite dishes and antennae),
televisions,  computers, sprinkler  systems  and  other  fire
prevention   and   extinguishing  apparatus  and   materials,
security  systems, motors, engines, machinery, pipes,  pumps,
tanks,  conduits, appliances, fittings and fixtures of  every
kind and description.

      "Equipment  Schedule"  shall mean  (a)  each  Equipment
Schedule attached to the applicable Requisition and (b)  each
Equipment   Schedule   attached  to  the   applicable   Lease
Supplement.

      "ERISA"  shall  mean  the  Employee  Retirement  Income
Security Act of 1974, as amended.

      "ERISA Affiliate" shall mean each entity required to be
aggregated with any Credit Party pursuant to the requirements
of Section 414(b) or (c) of the Code.

      "Eurocurrency Reserve Requirements" shall mean for  any
day  as  applied to a Eurodollar Loan, the aggregate (without
duplication) of the maximum rates (expressed as a decimal) of
reserve requirements in effect on such day (including without
limitation   basic,  supplemental,  marginal  and   emergency
reserves  under  any  regulations  of  the  Board  or   other
Governmental  Authority  having  jurisdiction  with   respect
thereto)  dealing  with  reserve requirements  prescribed  on
eurocurrency  funding (currently referred to as "Eurocurrency
liabilities" in Regulation D) maintained by a member bank  of
the Federal Reserve System.

      "Eurodollar Holder Advance" shall mean a Holder Advance
bearing a Holder Yield based on the Eurodollar Rate.

     "Eurodollar Loans" shall mean Loans the rate of interest
applicable to which is based upon the Eurodollar Rate.

     "Eurodollar Rate" shall mean for the Interest Period for
each  Eurodollar Loan or Eurodollar Holder Advance comprising
part  of  the  same  borrowing or advance (including  without
limitation conversions, extensions and renewals), a per annum
interest rate equal to the per annum rate determined  by  the
Agent  on  the  basis of the offered rates  for  deposits  in
dollars  for a period of time corresponding to such  Interest
Period  (and  commencing on the first day  of  such  Interest
Period),  reported on Telerate page 3750  as  of  11:00  a.m.
(London time) two (2) Business Days before the first  day  of
such  Interest  Period.  In the event no such  offered  rates
appear  on  Telerate page 3750, "Eurodollar Rate" shall  mean
for   the  Interest  Period  for  each  Eurodollar  Loan   or
Eurodollar  Holder  Advance  comprising  part  of  the   same
borrowing    or   advance   (including   without   limitation
conversions,  extensions and renewals), a per annum  interest
rate  equal to the per annum rate determined by the Agent  on
the basis of the offered rates for deposits in dollars for  a
period  of  time corresponding to such Interest  Period  (and
commencing  on the first day of such Interest Period),  which
appear  on  the  Reuters Screen LIBO Page as  of  11:00  a.m.
(London time) two (2) Business Days before the first  day  of
such  Interest Period (provided that if at least two (2) such
offered  rates  appear on the Reuters Screen LIBO  Page,  the
rate  in  respect  of  such  Interest  Period  will  be   the
arithmetic  mean  of such offered rates).   As  used  herein,
"Reuters  Screen LIBO Page" means the display  designated  as
page  "LIBO"  on the Reuters Monitor Money Rates Service  (or
such  other page as may replace the LIBO page on that service
for  the purpose of displaying London interbank offered rates
of  major  banks) ("RMMRS").  In the event the RMMRS  is  not
then quoting such offered rates, "Eurodollar Rate" shall mean
for   the  Interest  Period  for  each  Eurodollar  Loan   or
Eurodollar  Holder  Advance  comprising  part  of  the   same
borrowing    or   advance   (including   without   limitation
conversions,  extensions and renewals), the average  (rounded
upward  to  the nearest one-sixteenth (1/16) of  one  percent
(1%)) per annum rate of interest determined by the office  of
the  Agent  (each  such determination to  be  conclusive  and
binding)  as of two (2) Business Days prior to the first  day
of  such  Interest  Period, as the effective  rate  at  which
deposits  in immediately available funds in U.S. dollars  are
being, have been, or would be offered or quoted by the  Agent
to  major  banks  in  the  applicable  interbank  market  for
Eurodollar deposits at any time during the Business Day which
is  the  second Business Day immediately preceding the  first
day  of  such Interest Period, for a term comparable to  such
Interest Period and in the amount of the requested Eurodollar
Loan and/or Eurodollar Holder Advance.  If no such offers  or
quotes  are  generally available for such  amount,  then  the
Agent shall be entitled to determine the Eurodollar Rate from
another  recognized  service or interbank  quotation,  or  by
estimating in its reasonable judgment the per annum rate  (as
described  above) that would be applicable if such  quote  or
offers were generally available.

      "Event of Default" shall mean a Lease Event of Default,
an  Agency  Agreement Event of Default or a Credit  Agreement
Event of Default.

     "Excepted Payments" shall mean:

           (a)   all  indemnity  payments (including  without
     limitation  indemnity payments made pursuant to  Section
     11  of  the  Participation Agreement), whether  made  by
     adjustment  to  Basic Rent or otherwise,  to  which  the
     Owner  Trustee,  any Holder or any of  their  respective
     Affiliates, agents, officers, directors or employees  is
     entitled;

            (b)   any  amounts  (other  than  Basic  Rent  or
     Termination Value) payable under any Operative Agreement
     to  reimburse the Owner Trustee, any Holder  or  any  of
     their    respective   Affiliates   (including    without
     limitation the reasonable expenses of the Owner Trustee,
     the Trust Company and the Holders incurred in connection
     with  any such payment) for performing or complying with
     any  of  the  obligations of any  Lessee  under  and  as
     permitted by any Operative Agreement;

           (c)   any  amount  payable  to  a  Holder  by  any
     transferee of such interest of a Holder as the  purchase
     price of such Holder's interest in the Trust Estate  (or
     a portion thereof);

           (d)   any  insurance proceeds  (or  payments  with
     respect  to  risks  self-insured or policy  deductibles)
     under  liability  policies other than such  proceeds  or
     payments payable to the Agent or any Lender;

            (e)    any   insurance  proceeds  under  policies
     maintained by the Owner Trustee or any Holder;

           (f)   Transaction Expenses or other amounts, fees,
     disbursements or expenses paid or payable to or for  the
     benefit of the Owner Trustee;

           (g)   any payments in respect of interest  to  the
     extent  attributable to payments referred to in  clauses
     (a) through (f) above; and

           (h)  any rights of either the Owner Trustee or the
     Trust  Company to demand, collect, sue for or  otherwise
     receive  and  enforce payment of any  of  the  foregoing
     amounts, provided that such rights shall not include the
     right to terminate the Lease.

      "Excess Proceeds" shall mean the excess, if any, of the
aggregate  of all awards, compensation or insurance  proceeds
payable  in  connection with a Casualty or Condemnation  over
the  Termination  Value paid by any Lessee  pursuant  to  the
Lease with respect to such Casualty or Condemnation.

      "Exculpated  Persons"  shall  mean  the  Trust  Company
(except  with  respect to the representations and  warranties
and  the  other obligations of the Trust Company pursuant  to
the   Operative  Agreements  expressly  undertaken   in   its
individual   capacity,  including  without   limitation   the
representations and warranties of the Trust Company  pursuant
to   Section   6.1   of  the  Participation  Agreement,   the
obligations of the Trust Company pursuant to Section  8.2  of
the  Participation Agreement and the obligations of the Trust
Company pursuant to the Trust Agreement), the Holders (except
with  respect to the obligations of the Holders  pursuant  to
the Participation Agreement and the Trust Agreement expressly
undertaken in their respective individual capacities),  their
officers, directors, shareholders and partners.

      "Exempt  Payments" shall have the meaning specified  in
Section 11.2(e) of the Participation Agreement.

      "Expiration Date" shall mean the last day of the  Term;
provided, in no event shall the Expiration Date be later than
the  fifth  annual anniversary of the Initial  Closing  Date,
unless  such  later  date  has been expressly  agreed  to  in
writing  by each of the Lessor, the Guarantor (on  behalf  of
each Credit Party), the Agent, the Lenders and the Holders.

      "Facility  Fee"  shall mean, collectively,  the  Holder
Facility Fee and the Lender Facility Fee.

     "Facility Fee Payment Date" shall mean the last Business
Day  of  each  March, June, September and  December  and  the
Expiration Date.

      "Fair  Market Sales Value" shall mean, with respect  to
any  Property, the amount, which in any event, shall  not  be
less  than zero (0), that would be paid in cash in  an  arms-
length  transaction between an informed and willing purchaser
and  an informed and willing seller, neither of whom is under
any  compulsion  to  purchase  or  sell,  respectively,  such
Property.  Fair Market Sales Value of any Property  shall  be
determined based on the assumption that, except for  purposes
of Section 17 of the Lease, such Property is in the condition
and  state of repair required under Section 10.1 of the Lease
and  each  Credit  Party  is  in compliance  with  the  other
requirements of the Operative Agreements.

      "Federal  Funds Effective Rate" shall have the  meaning
given to such term in the definition of ABR.

      "Financing  Parties" shall mean the Lessor,  the  Owner
Trustee,  in  its trust capacity, the Agent, the Holders  and
the Lenders.

      "Fixtures"  shall  mean all fixtures  relating  to  the
Improvements,  including  without limitation  all  components
thereof, located in or on the Improvements, together with all
replacements,   modifications,  alterations   and   additions
thereto.

      "Force  Majeure Event" shall mean any event beyond  the
control  of the Construction Agent that has executed a  Lease
Supplement with respect to a particular Property, other  than
a  Casualty  or  Condemnation, including  without  limitation
strikes,  lockouts,  adverse soil conditions,  acts  of  God,
adverse  weather  conditions, inability to  obtain  labor  or
materials, governmental activities, civil commotion and enemy
action;  but  excluding any event, cause  or  condition  that
results from such Construction Agent's financial condition.

      "Form 1001" shall have the meaning specified in Section
11.2(e) of the Participation Agreement.

      "Form 4224" shall have the meaning specified in Section
11.2(e) of the Participation Agreement.

      "GAAP"  means generally accepted accounting principles,
as  recognized by the American Institute of Certified  Public
Accountants  and  the Financial Accounting  Standards  Board,
consistently applied and maintained on a consistent basis for
the  Guarantor  and  its Subsidiaries throughout  the  period
indicated and consistent with the prior financial practice of
the Guarantor and its Subsidiaries.

       "Governmental   Action"  shall   mean   all   permits,
authorizations, registrations, consents, approvals,  waivers,
exceptions,    variances,    orders,    judgments,    written
interpretations, decrees, licenses, exemptions, publications,
filings,  notices to and declarations of or with, or required
by,  any  Governmental Authority, or required  by  any  Legal
Requirement,  and  shall  include,  without  limitation,  all
environmental  and  operating permits and licenses  that  are
required for the full use, occupancy, zoning and operating of
the Property.

      "Governmental  Authority"  shall  mean  any  nation  or
government, any state or other political subdivision  thereof
and  any  entity exercising executive, legislative, judicial,
regulatory  or  administrative functions of or pertaining  to
government.

      "Ground  Lease" shall mean a ground lease (in form  and
substance satisfactory to the Agent) respecting any  Property
(a) owned by any Credit Party (or a parent corporation or any
Subsidiary  of  any Credit Party) and leased  to  the  Lessor
where  such lease has at least a ninety-nine (99)  year  term
and payments set at no more than $1.00 per year, or (b) where
such  lease is subject to such other terms and conditions  as
are satisfactory to the Agent.

     "Guarantor" shall mean Performance Food Group Company, a
Tennessee  corporation,  as  guarantor  of  the  Construction
Agents   and  the  Lessees  with  respect  to  the  Operative
Agreements and the Properties.

     "Guaranty Obligation" means, with respect to each Credit
Party   and   its  Subsidiaries,  without  duplication,   any
obligation,  contingent  or otherwise,  of  any  such  Person
pursuant  to  which  such Person has directly  or  indirectly
guaranteed  any Debt or other obligation of any other  Person
and,  without  limiting the generality of the foregoing,  any
obligation,  direct or indirect, contingent or otherwise,  of
any  such Person (a) to purchase or pay (or advance or supply
funds  for  the  purchase or payment of) such Debt  or  other
obligation   (whether  arising  by  virtue   of   partnership
arrangements, by agreement to keep well, to purchase  assets,
goods, securities or services, to take-or-pay, or to maintain
financial  statement condition or otherwise) or  (b)  entered
into  for  the  purpose of assuring in any other  manner  the
obligee  of  such  Debt or other obligation  of  the  payment
thereof  or  to protect such obligee against loss in  respect
thereof  (in  whole  or  in part); provided,  that  the  term
Guaranty  Obligation  shall  not  include  endorsements   for
collection or deposit in the ordinary course of business.

      "Hard  Costs" shall mean all costs and expenses payable
for supplies, materials, labor and profit with respect to the
Improvements under any Construction Contract.

      "Hazardous Substance" shall mean any of the  following:
(a)   any   petroleum   or  petroleum  product,   explosives,
radioactive      materials,      asbestos,      formaldehyde,
polychlorinated  biphenyls,  lead  and  radon  gas;  (b)  any
substance,   material,  product,  derivative,   compound   or
mixture,  mineral,  chemical, waste, gas, medical  waste,  or
pollutant, in each case whether naturally occurring, man-made
or  the by-product of any process, that is toxic, harmful  or
hazardous  to  the environment or human health or  safety  as
determined in accordance with any Environmental Law;  or  (c)
any  substance,  material, product, derivative,  compound  or
mixture,  mineral,  chemical, waste, gas,  medical  waste  or
pollutant that would support the assertion of any claim under
any Environmental Law, whether or not defined as hazardous as
such under any Environmental Law.

     "Hedging Agreement" means any agreement with respect  to
an  interest rate swap, collar, cap, floor or a forward  rate
agreement  or  other  agreement  regarding  the  hedging   of
interest  rate  risk  exposure executed  in  connection  with
hedging  the interest rate exposure of any Credit Party,  and
any  confirming  letter  executed pursuant  to  such  hedging
agreement, all as amended, restated or otherwise modified.

      "Holder  Advance" shall mean any advance  made  by  any
Holder  to  the Owner Trustee pursuant to the  terms  of  the
Trust Agreement or the Participation Agreement.

     "Holder Amount" shall mean as of any date, the aggregate
amount  of  Holder Advances made by each Holder to the  Trust
Estate  pursuant to Section 2 of the Participation  Agreement
and  Section 3.1 of the Trust Agreement less any payments  of
any  Holder  Advances  received by the  Holders  pursuant  to
Section 3.4 of the Trust Agreement.

     "Holder Commitments" shall mean the Holder Commitment of
each Holder as set forth in Schedule I to the Trust Agreement
as such Schedule I may be amended and replaced from time to
time.

      "Holder  Construction Property Cost" shall  mean,  with
respect to each Construction Period Property, at any date  of
determination,  an  amount equal to  the  outstanding  Holder
Advances made with respect thereto under the Trust Agreement.

      "Holder Overdue Rate" shall mean the lesser of (a)  the
then  current rate of Holder Yield respecting the  particular
amount  in question plus two percent (2%) and (b) the highest
rate permitted by applicable law.

      "Holder  Property Cost" shall mean with  respect  to  a
Property  an amount equal to the outstanding Holder  Advances
with respect thereto.

      "Holder  Facility Fee" shall have the meaning given  to
such term in Section 7.4 of the Participation Agreement.

      "Holder  Yield"  shall  mean  with  respect  to  Holder
Advances  from time to time either the Eurodollar  Rate  plus
the  Applicable Percentage or the ABR as elected by the Owner
Trustee  from  time  to  time with  respect  to  such  Holder
Advances in accordance with the terms of the Trust Agreement;
provided,  however, (a) upon delivery of the notice described
in  Section  3.7(c) of the Trust Agreement,  the  outstanding
Holder Advances of each Holder shall bear a yield at the  ABR
applicable  from time to time from and after  the  dates  and
during  the periods specified in Section 3.7(c) of the  Trust
Agreement,  and  (b) upon the delivery by  a  Holder  of  the
notice  described  in  Section 11.3(f) of  the  Participation
Agreement,  the Holder Advances of such Holder shall  bear  a
yield at the ABR applicable from time to time after the dates
and  during the periods specified in Section 11.3(f)  of  the
Participation Agreement.

     "Holders" shall mean First Union National Bank and shall
include the other banks and financial institutions which  may
be  from  time to time holders of Certificates in  connection
with the PFG Real Estate Trust 2000-1.

     Impositions" shall mean any and all liabilities, losses,
expenses, costs, charges and Liens of any kind whatsoever for
fees, taxes, levies, imposts, duties, charges, assessments or
withholdings ("Taxes") including but not limited to (i)  real
and  personal  property taxes, including  without  limitation
personal property taxes on any property covered by the  Lease
that  is  classified by Governmental Authorities as  personal
property,  and real estate or ad valorem taxes in the  nature
of  property  taxes; (ii) sales taxes, use  taxes  and  other
similar  taxes (including rent taxes and intangibles  taxes);
(iii)   excise  taxes;  (iv)  real  estate  transfer   taxes,
conveyance taxes, stamp taxes and documentary recording taxes
and  fees;  (v)  taxes  that are or  are  in  the  nature  of
franchise, income, value added, privilege and doing  business
taxes, license and registration fees; (vi) assessments on any
Property,  including without limitation all  assessments  for
public   Improvements  or  benefits,  whether  or  not   such
improvements are commenced or completed within the Term;  and
(vii)  taxes, Liens, assessments or charges asserted, imposed
or  assessed  by  the  PBGC  or  any  governmental  authority
succeeding to or performing functions similar to,  the  PBGC;
and in each case all interest, additions to tax and penalties
thereon,  which at any time prior to, during or with  respect
to  the Term or in respect of any period for which any Credit
Party  shall  be obligated to pay Supplemental Rent,  may  be
levied,  assessed  or  imposed by any Governmental  Authority
upon  or with respect to (a) any Property or any part thereof
or interest therein; (b) the leasing, financing, refinancing,
demolition,     construction,    substitution,    subleasing,
assignment,   control,   condition,   occupancy,   servicing,
maintenance,   repair,   ownership,   possession,    activity
conducted    on,   delivery,   insuring,   use,    operation,
improvement,  sale,  transfer  of  title,  return  or   other
disposition of such Property or any part thereof or  interest
therein;  (c) the Notes, other indebtedness with  respect  to
any  Property,  or the Certificates, or any part  thereof  or
interest  therein;  (d)  the rentals,  receipts  or  earnings
arising  from  any Property or any part thereof  or  interest
therein;   (e)  the  Operative  Agreements,  the  performance
thereof, or any payment made or accrued pursuant thereto; (f)
the  income  or other proceeds received with respect  to  any
Property  or  any part thereof or interest therein  upon  the
sale or disposition thereof; (g) any contract (including  the
Agency  Agreement) relating to the construction,  acquisition
or  delivery  of  the  Improvements or any  part  thereof  or
interest  therein;  (h) the issuance  of  the  Notes  or  the
Certificates; (i) the Owner Trustee, the Trust or  the  Trust
Estate;  or (j) otherwise in connection with the transactions
contemplated by the Operative Agreements.

       "Improvements"  shall  mean,  with  respect   to   the
construction, renovations and/or Modifications on  any  Land,
all  buildings, structures, Fixtures, and other  improvements
of  every kind existing at any time and from time to time  on
or  under the Land purchased or otherwise acquired using  the
proceeds  of  the Loans or the Holder Advances  or  which  is
subject  to  a  Ground  Lease,  together  with  any  and  all
appurtenances  to such buildings, structures or improvements,
including   without  limitation  sidewalks,  utility   pipes,
conduits and lines, parking areas and roadways, and including
without  limitation all Modifications and other additions  to
or changes in the Improvements at any time, including without
limitation  (a) any Improvements existing as of the  Property
Closing  Date as such Improvements may be referenced  on  the
applicable   Requisition  and  (b)  any   Improvements   made
subsequent to such Property Closing Date.

     "Incorporated Covenants" shall have the meaning given to
such term in Section 28.1 of the Lease.

     "Incorporated Representations and Warranties" shall have
the meaning given to such term in Section 28.1 of the Lease.

     "Indebtedness" of any Person shall mean the Debt of such
Person.

      "Indemnified Person" shall mean the Lessor,  the  Owner
Trustee, in its individual and its trust capacity, the Trust,
the  Trust Company, the Agent, First Union Securities,  Inc.,
the  Holders,  the  Lenders and their respective  successors,
assigns,   directors,   shareholders,   partners,   officers,
employees, agents and Affiliates.

      "Indemnity Provider" shall mean (a) to the  extent  the
matter  giving rise to the particular indemnity claim relates
to  a  particular Property, the applicable Lessee  respecting
such  Property, and (b) to the extent the matter giving  rise
to  the  particular  indemnity claim does  not  relate  to  a
particular Property, the Guarantor.

     "Initial Closing Date" shall mean June 9, 2000.

      "Initial  Construction Advance" shall mean any  initial
Advance  to pay for:  (a) Property Costs for construction  of
any Improvements; and (b) the Property Costs of restoring  or
repairing  any Property which is required to be  restored  or
repaired in accordance with Section 15.1(e) of the Lease.

      "Instruments" shall have the meaning given to such term
in Section 1 of the Security Agreement.

      "Insurance  Requirements"  shall  mean  all  terms  and
conditions  of  any insurance policy either required  by  the
Lease  to  be  maintained by any Lessee or  required  by  the
Agency  Agreement to be maintained by any Construction Agent,
and  all  requirements of the issuer of any such policy  and,
regarding  self  insurance,  any other  requirements  of  the
applicable Lessee.

      "Interest  Period"  shall mean  during  the  Commitment
Period and thereafter as to any Eurodollar Loan or Eurodollar
Holder  Advance  (i)  with respect to  the  initial  Interest
Period,  the  period  beginning on  the  date  of  the  first
Eurodollar Loan and Eurodollar Holder Advance and ending  one
(1) month, two (2) months, three (3) months or (to the extent
available  to  all Lenders and all Holders)  six  (6)  months
thereafter,  as  selected by the Lessor (in  the  case  of  a
Eurodollar  Loan)  or the Owner Trustee (in  the  case  of  a
Eurodollar  Holder  Advance) in its applicable  notice  given
with   respect  thereto  and  (ii)  thereafter,  each  period
commencing  on  the  last day of the next preceding  Interest
Period  applicable  to  such Eurodollar  Loan  or  Eurodollar
Holder  Advance  and ending one (1) month,  two  (2)  months,
three  (3) months or (to the extent available to all  Lenders
and  all  Holders) six (6) months thereafter, as selected  by
the Lessor by irrevocable notice to the Agent (in the case of
a  Eurodollar Loan) or by the Owner Trustee (in the case of a
Eurodollar  Holder Advance) in each case not less than  three
(3)  Business Days prior to the last day of the then  current
Interest Period with respect thereto; provided, however, that
all  of the foregoing provisions relating to Interest Periods
are  subject  to  the following:  (A) if any Interest  Period
would end on a day which is not a Business Day, such Interest
Period shall be extended to the next succeeding Business  Day
(except that where the next succeeding Business Day falls  in
the   next  succeeding  calendar  month,  then  on  the  next
preceding Business Day), (B) no Interest Period shall  extend
beyond the Maturity Date or the Expiration Date, as the  case
may  be,  (C) where an Interest Period begins on  a  day  for
which  there  is  no  numerically corresponding  day  in  the
calendar  month in which the Interest Period is to end,  such
Interest  Period shall end on the last Business Day  of  such
calendar  month, (D) there shall not be more  than  four  (4)
Interest Periods outstanding at any one (1) time.

      "Investment  Company  Act" shall  mean  the  Investment
Company Act of 1940, as amended, together with the rules  and
regulations promulgated thereunder.

     "Issuing  Lender" means First Union, in its capacity  as
issuer of any Letter of Credit, or any successor thereto.

     "Land" shall mean a parcel of real property described on
(a)  the Requisition issued by the Construction Agent on  the
Property  Closing Date relating to such parcel  and  (b)  the
schedules  to  each applicable Lease Supplement executed  and
delivered in accordance with the requirements of Section  2.4
of the Lease.

      "Land Cost" shall have the meaning specified in Section
5.4 of the Agency Agreement.

       "Law"   shall   mean  any  statute,  law,   ordinance,
regulation,  rule,  directive,  order,  writ,  injunction  or
decree of any Tribunal.

      "Lease"  or  "Lease  Agreement" shall  mean  the  Lease
Agreement dated on or about the Initial Closing Date, between
the   Lessor  and  the  Lessees,  together  with  each  Lease
Supplement  (and  the related memorandum of  Lease  and  such
Lease Supplement) thereto.

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

       "Lease  Event  of  Default"  shall  have  the  meaning
specified in Section 17.1 of the Lease.

      "Lease  Supplement"  shall mean each  Lease  Supplement
substantially in the form of EXHIBIT A to the Lease, together
with all attachments and schedules thereto.

      "Legal  Requirements" shall mean all foreign,  federal,
state,  county,  municipal and other  governmental  statutes,
laws,  rules,  orders,  regulations,  ordinances,  judgments,
decrees  and  injunctions affecting the  Owner  Trustee,  any
Holder,  the Lessor, any Credit Party, the Agent, any  Lender
or   any  Property,  Land,  Improvement,  Equipment  or   the
taxation, demolition, construction, use or alteration of such
Improvements, whether now or hereafter enacted and in  force,
including  without  limitation  any  that  require   repairs,
modifications or alterations in or to any Property or in  any
way  limit  the use and enjoyment thereof (including  without
limitation  all  building, zoning  and  fire  codes  and  the
Americans  with  Disabilities Act of 1990, 42  U.S.C.   12101
et.  seq., and any other similar federal, state or local laws
or ordinances and the regulations promulgated thereunder) and
any  that may relate to environmental requirements (including
without  limitation all Environmental Laws), and all permits,
certificates  of  occupancy,  licenses,  authorizations   and
regulations  relating thereto, and all covenants, agreements,
restrictions  and encumbrances contained in  any  instruments
which  are  either  of record or known to  any  Credit  Party
affecting any Property or the Appurtenant Rights.

     "Lender Commitments" shall mean the Lender Commitment of
each Lender as set forth in Schedule 2.1 to the Credit
Agreement as such Schedule 2.1 may be amended and replaced
from time to time.

      "Lender  Financing Statements" shall mean UCC financing
statements  and fixture filings appropriately  completed  and
executed  for filing in the applicable jurisdiction in  order
to  procure a security interest in favor of the Agent in  the
Collateral subject to the Security Documents.

      "Lender  Facility Fee" shall have the meaning given  to
such term in Section 7.4 of the Participation Agreement.

     "Lenders" shall mean First Union National Bank and shall
include the other banks and financial institutions which  may
be from time to time party to the Participation Agreement and
the Credit Agreement.

     "Lessee"  shall mean any Eligible Lessee  designated  as
lessee  in  any  Lease  Supplement respecting  any  Property;
provided,  such  Eligible Lessee shall also have  executed  a
Lessee  Joinder  or is otherwise a party to  certain  of  the
Operative  Agreements as lessee by execution  thereof  on  or
prior to the Initial Closing Date.

"Lessee Joinder" shall mean a joinder agreement, in the  form
of   Schedule  5.3(n)(ii)  to  the  Participation  Agreement,
executed from time to time between an Eligible Lessee and the
Agent.

     "Lessee Credit Agreement" shall mean that certain Credit
Agreement  dated as of March 5, 1999 among the Guarantor  and
the  lenders  referred  to therein and First  Union  National
Bank,  as  Administrative Agent, as  such  may  hereafter  be
amended,  modified,  supplemented, restated  and/or  replaced
from time to time.

     "Lessee Credit Agreement Event of Default" shall mean an
Event  of  Default  as defined in Article XI  of  the  Lessee
Credit Agreement.

      "Lessor"  shall  mean the Owner  Trustee,  not  in  its
individual capacity, but as the Lessor under the Lease.

      "Lessor  Basic  Rent" shall mean the  scheduled  Holder
Yield  due  on the Holder Advances on any Scheduled  Interest
Payment  Date  pursuant  to  the  Trust  Agreement  (but  not
including interest on (a) any such scheduled Holder Yield due
on  the  Holder Advances prior to the Rent Commencement  Date
with  respect  to the Property to which such Holder  Advances
relate  or  (b) overdue amounts under the Trust Agreement  or
otherwise).

      "Lessor  Financing Statements" shall mean UCC financing
statements  and fixture filings appropriately  completed  and
executed for filing in the applicable jurisdictions in  order
to  protect  the  Lessor's interest under the  Lease  to  the
extent the Lease is a security agreement or a mortgage.

      "Lessor  Lien"  shall  mean any  Lien,  true  lease  or
sublease or disposition of title arising as a result  of  (a)
any  claim  against the Lessor or the Trust Company,  in  its
individual  capacity,  not resulting  from  the  transactions
contemplated  by the Operative Agreements,  (b)  any  act  or
omission  of  the  Lessor  or  the  Trust  Company,  in   its
individual  capacity, which is not required by the  Operative
Agreements  or  is in violation of any of the  terms  of  the
Operative Agreements, (c) any claim against the Lessor or the
Trust  Company, in its individual capacity, with  respect  to
Taxes  or  Transaction Expenses against which  no  Lessee  is
required to indemnify the Lessor or the Trust Company, in its
individual   capacity,  pursuant  to  Section   11   of   the
Participation Agreement or (d) any claim against  the  Lessor
arising  out  of any transfer by the Lessor  of  all  or  any
portion of the interest of the Lessor in the Properties,  the
Trust  Estate  or  the Operative Agreements  other  than  the
transfer of title to or possession of any Properties  by  the
Lessor  pursuant  to and in accordance with  the  Lease,  the
Credit Agreement, the Security Agreement or the Participation
Agreement  or  pursuant to the exercise of the  remedies  set
forth in Article XVII of the Lease.

     "Letters  of  Credit"  shall have the  meaning  assigned
thereto in Section 3.1 of the Lessee Credit Agreement.

     "Leverage Ratio" shall mean the ratio of Total  Debt  to
Capitalization.

       "Lien"  shall  mean  any  mortgage,  pledge,  security
interest, encumbrance, lien, option or charge of any kind.

     "Limited Recourse Amount" shall mean with respect to all
the  Properties on an aggregate basis, an amount equal to the
sum  of  the  Termination  Values with  respect  to  all  the
Properties  on an aggregate basis on each Payment Date,  less
the  Maximum Residual Guarantee Amount as of such  date  with
respect to all the Properties on an aggregate basis.

      "Loan Basic Rent" shall mean the scheduled interest due
on  the Loans on any Scheduled Interest Payment Date pursuant
to  the  Credit Agreement (but not including interest on  (a)
any  such  Loan due prior to the Rent Commencement Date  with
respect to the Property to which such Loan relates or (b) any
overdue  amounts under Section 2.8(b) of the Credit Agreement
or otherwise).

      "Loan  Property Cost" shall mean, with respect to  each
Property at any date of determination, an amount equal to (a)
the  aggregate principal amount all Loans (including  without
limitation all Acquisition Loans and Construction Loans) made
on  or prior to such date with respect to such Property minus
(b)  the aggregate amount of prepayments or repayments as the
case  may  be  of  the  Loans allocated to  reduce  the  Loan
Property Cost of such Property pursuant to Section 2.6(c)  of
the Credit Agreement.

      "Loans" shall mean the loans extended pursuant  to  the
Credit Agreement.

     "Majority Holders" shall mean at any time, Holders whose
Holder Advances outstanding represent at least sixty-six  and
two  thirds  percent  (66 2/3%) of (a) the  aggregate  Holder
Advances outstanding or (b) to the extent there are no Holder
Advances outstanding, the aggregate Holder Commitments.

     "Majority Lenders" shall mean at any time, Lenders whose
Loans outstanding represent at least sixty-six and two thirds
percent  (66 2/3%) of (a) the aggregate Loans outstanding  or
(b)  to  the  extent  there  are no  Loans  outstanding,  the
aggregate of the Lender Commitments.

      "Majority  Secured Parties" shall  mean  at  any  time,
Lenders   and   Holders  whose  Loans  and  Holder   Advances
outstanding  represent  at  least sixty-six  and  two  thirds
percent  (66  2/3%) of (a) the aggregate Advances outstanding
or  (b) to the extent there are no Advances outstanding,  the
sum  of  the aggregate Holder Commitments plus the  aggregate
Lender Commitments.

     "Marketing Period" shall mean, if the Lessee has given a
Sale Notice in accordance with Section 20.1 of the Lease, the
period  commencing on the date such Sale Notice is given  and
ending on the Expiration Date.

     "Material Adverse Effect" shall, mean a material adverse
effect   on   (a)  the  business,  condition  (financial   or
otherwise), assets, liabilities or operations of  the  Credit
Parties,  (b) the ability of any Credit Party to perform  its
respective obligations under any Operative Agreement to which
it  is  a  party, (c) the validity or enforceability  of  any
Operative Agreement or the rights and remedies of the  Agent,
the  Lenders, the Holders, or the Lessor thereunder, (d)  the
validity,  priority  or enforceability of  any  Lien  on  any
Property created by any of the Operative Agreements,  or  (e)
the value, utility or useful life of any Property or the use,
or ability of the Lessee that has executed a Lease Supplement
with respect to any particular Property to use, such Property
for the purpose for which it was intended.

     "Maturity Date" shall mean the Expiration Date.

     "Maximum Residual Guarantee Amount" shall mean an amount
equal  to the product of the aggregate Property Cost for  all
of Properties times eighty-five percent (85%).

      "Modifications"  shall have the  meaning  specified  in
Section 11.1(a) of the Lease.

      "Mortgage Instrument" shall mean any mortgage, deed  of
trust  or any other instrument executed by the Owner  Trustee
and   the   Lessee  that  has  executed  a  Lease  Supplement
respecting  a particular Property (or regarding any  Property
subject  to a Ground Lease, the applicable Affiliate of  such
Lessee) in favor of the Agent (for the benefit of the Lenders
and  the  Holders) and evidencing a Lien on the Property,  in
form and substance reasonably acceptable to the Agent.

      "Multiemployer Plan" shall mean any plan  described  in
Section  4001(a)(3)  of ERISA to which contributions  are  or
have been made or required by any Credit Party or any of  its
Subsidiaries or ERISA Affiliates.

      "Multiple Employer Plan" shall mean a plan to which any
Credit  Party  or any ERISA Affiliate and at  least  one  (1)
other  employer other than an ERISA Affiliate  is  making  or
accruing  an  obligation to make, or has made or  accrued  an
obligation to make, contributions.

     "New Facility" shall have the meaning given to such term
in Section 28.1 of the Lease.

      "New Jersey ELLF" shall have the meaning given to  such
term in Section 5.11 of the Participation Agreement.

      "Notes"  shall mean those notes issued to  the  Lenders
pursuant  to the Credit Agreement and shall include both  the
Tranche A Notes and the Tranche B Notes.

      "Obligations" shall have the meaning given to such term
in Section 1 of the Security Agreement.

     "Officer's Certificate" with respect to any person shall
mean  a  certificate executed on behalf of such person  by  a
Responsible  Officer who has made or caused to be  made  such
examination  or investigation as is necessary to enable  such
Responsible  Officer  to  express an  informed  opinion  with
respect to the subject matter of such Officer's Certificate.

       "Officer's  Compliance  Certificate"  shall  have  the
meaning  given  to  such term in Section 7.2  of  the  Lessee
Credit Agreement.

      "Operative  Agreements" shall mean the  following:  the
Participation  Agreement,  the Agency  Agreement,  the  Trust
Agreement, the Certificates, the Credit Agreement, the Notes,
the  Lease, the Lease Supplements (and memoranda of the Lease
and each Lease Supplement in a form reasonably acceptable  to
the Agent), the Security Agreement, the Mortgage Instruments,
the  other  Security Documents, the Ground Leases, the  Deeds
and  the  Bills  of  Sale and any and all  other  agreements,
documents and instruments executed in connection with any  of
the foregoing.

      "Original Executed Counterpart" shall have the  meaning
given to such term in Section 5 of EXHIBIT A to the Lease.

      "Overdue  Interest"  shall mean  any  interest  payable
pursuant to Section 2.8(b) of the Credit Agreement.

      "Overdue Rate" shall mean (a) with respect to the  Loan
Basic  Rent, and any other amount owed under or with  respect
to  the Credit Agreement or the Security Documents, the  rate
specified in Section 2.8(b) of the Credit Agreement, (b) with
respect  to the Lessor Basic Rent, the Holder Yield  and  any
other  amount  owed  under  or  with  respect  to  the  Trust
Agreement,  the Holder Overdue Rate, and (c) with respect  to
any  other  amount, the amount referred to in clause  (y)  of
Section 2.8(b) of the Credit Agreement.

     "Owner Trustee," "Borrower" or "Lessor" shall mean First
Security Bank, National Association, not individually, except
as  expressly stated in the various Operative Agreements, but
solely  as the Owner Trustee under the PFG Real Estate  Trust
2000-1,  and  any  successor, replacement  and/or  additional
Owner   Trustee  expressly  permitted  under  the   Operative
Agreements.

      "Participant" shall have the meaning given to such term
in Section 9.7 of the Credit Agreement.

      "Participation Agreement" shall mean the  Participation
Agreement  dated on or about the Initial Closing Date,  among
the  Lessees, the Guarantor, the Owner Trustee,  not  in  its
individual  capacity except as expressly stated therein,  the
Holders, the Lenders and the Agent.

     "Payment Date" shall mean any Scheduled Interest Payment
Date  and  any  date  on which interest or  Holder  Yield  in
connection with a prepayment of principal on the Loans or  of
the  Holder Advances is due under the Credit Agreement or the
Trust Agreement.

       "PBGC"   shall  mean  the  Pension  Benefit   Guaranty
Corporation  created  by  Section 4002(a)  of  ERISA  or  any
successor thereto.

     "Pension Plan" shall mean a "pension plan", as such term
is  defined  in  section 3(2) of ERISA, which is  subject  to
title  IV of ERISA (other than a Multiemployer Plan), and  to
which  any Credit Party or any ERISA Affiliate may  have  any
liability,  including  without limitation  any  liability  by
reason  of  having  been a substantial  employer  within  the
meaning  of  section  4063 of ERISA at any  time  during  the
preceding five (5) years, or by reason of being deemed to  be
a contributing sponsor under section 4069 of ERISA.

       "Permitted  Facility"  shall  mean  a  warehouse   and
distribution facility or a headquarters facility of the  type
and  size  customarily used and operated  by  the  applicable
Lessee  in its ordinary course of business as of the  Initial
Closing Date.

     "Permitted Liens" shall mean:

          (a)  the respective rights and interests of the
     parties to the Operative Agreements as provided in the
     Operative Agreements;

          (b)  the rights of any sublessee or assignee under
     a sublease or an assignment expressly permitted by the
     terms of the Lease for no longer than the duration of
     the Lease;

          (c)  Liens for Taxes that either are not yet due or
     are being contested in accordance with the provisions of
     Section 13.1 of the Lease;

          (d)  Liens arising by operation of law,
     materialmen's, mechanics', workmen's, repairmen's,
     employees', carriers', warehousemen's and other like
     Liens relating to the construction of the Improvements
     or in connection with any Modifications or arising in
     the ordinary course of business for amounts that either
     are not more than thirty (30) days past due or are being
     diligently contested in good faith by appropriate
     proceedings, so long as such proceedings satisfy the
     conditions for the continuation of proceedings to
     contest Taxes set forth in Section 13.1 of the Lease;

          (e)  Liens of any of the types referred to in
     clause (d) above that have been bonded for not less than
     the full amount in dispute (or as to which other
     security arrangements satisfactory to the Lessor and the
     Agent have been made), which bonding (or arrangements)
     shall comply with applicable Legal Requirements, and
     shall have effectively stayed any execution or
     enforcement of such Liens;

          (f)  Liens arising out of judgments or awards with
     respect to which appeals or other proceedings for review
     are being prosecuted in good faith and for the payment
     of which adequate reserves have been provided as
     required by GAAP or other appropriate provisions have
     been made, so long as such proceedings have the effect
     of staying the execution of such judgments or awards and
     satisfy the conditions for the continuation of
     proceedings to contest Taxes set forth in Section 13.1
     of the Lease; and

          (g)  Liens in favor of municipalities to the extent
     agreed to by the Lessor.

       "Person"   shall  mean  any  individual,  corporation,
partnership,   limited  liability  company,  joint   venture,
association,   joint  stock  company,  trust,  unincorporated
organization, governmental authority or any other entity.

      "PFG"  shall  mean Performance Food  Group  Company,  a
Tennessee  corporation,  and  its  successors  and  permitted
assigns.

      "PFG  Real Estate Trust 2000-1" shall mean the  grantor
trust  created  pursuant to the terms and conditions  of  the
Trust Agreement.

      "Plans and Specifications" shall mean, with respect  to
Improvements,   the   plans  and  specifications   for   such
Improvements to be constructed or already existing,  as  such
Plans   and  Specifications  may  be  amended,  modified   or
supplemented from time to time in accordance with  the  terms
of the Operative Agreements.

      "Prime  Lending Rate" shall have the meaning  given  to
such term in the definition of ABR.

      "Property"  shall mean, with respect to each  Permitted
Facility  that is (or is to be) acquired, constructed  and/or
renovated  pursuant to the terms of the Operative Agreements,
the   Land  and  each  item  of  Equipment  and  the  various
Improvements,  in each case located on such  Land,  including
without  limitation each Construction Period  Property,  each
Property  subject  to a Ground Lease and  each  Property  for
which the Term has commenced.

      "Property Acquisition Cost" shall mean the cost to  the
Lessor to purchase a Property on a Property Closing Date.

     "Property Closing Date" shall mean the date on which the
Lessor  purchases a Property or, with respect  to  the  first
Advance, the date on which the Lessor seeks reimbursement for
Property previously purchased by the Lessor.

      "Property  Cost" shall mean with respect to a  Property
the   aggregate   amount  (and/or  the  various   items   and
occurrences giving rise to such amounts) of the Loan Property
Cost plus the Holder Property Cost for such Property (as such
amounts  shall  be  increased equally  among  all  Properties
respecting  the Holder Advances and the Loans  extended  from
time  to  time  to  pay for the Transaction  Expenses,  fees,
expenses  and  other  disbursements  referenced  in  Sections
7.1(a) and 7.1(b) of the Participation Agreement).

      "Purchase Option" shall have the meaning given to  such
term in Section 20.1 of the Lease.

     "Purchasing Lender" shall have the meaning given to such
term in Section 9.8(a) of the Credit Agreement.

      "Register" shall have the meaning given to such term in
Section 9.9(a) of the Credit Agreement.

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

     "Regulation T" shall mean Regulation T of the Board of
Governors of the Federal Reserve System (or any successor),
as the same may be modified and supplemented and in effect
from time to time.

     "Regulation U" shall mean Regulation U of the Board of
Governors of the Federal Reserve System (or any successor),
as the same may be modified and supplemented and in effect
from time to time.

     "Regulation X" shall mean Regulation X of the Board of
Governors of the Federal Reserve System (or any successor),
as the same may be modified and supplemented and in effect
from time to time.

     "Reimbursement Obligation" means the obligation  of  the
Guarantor to reimburse the Issuing Lender pursuant to Section
3.5  of  the Lessee Credit Agreement for amounts drawn  under
Letters of Credit.

      "Release"  shall  mean any release,  pumping,  pouring,
emptying,  injecting, escaping, leaching,  dumping,  seepage,
spill,  leak,  flow, discharge, disposal  or  emission  of  a
Hazardous Substance.

      "Rent" shall mean, collectively, the Basic Rent and the
Supplemental Rent, in each case payable under the Lease.

      "Rent  Commencement  Date" shall mean,  regarding  each
Property, the Completion Date.

      "Reportable Event" shall have the meaning specified  in
ERISA.

      "Requested Funds" shall mean any funds requested by any
Lessee   or   any  Construction  Agent,  as  applicable,   in
accordance with Section 5 of the Participation Agreement.

      "Requisition"  shall  have  the  meaning  specified  in
Section 4.2 of the Participation Agreement.

      "Responsible Officer" shall mean the Chairman  or  Vice
Chairman  of  the  Board of Directors, the Chairman  or  Vice
Chairman   of  the  Executive  Committee  of  the  Board   of
Directors,  the  President,  any  Senior  Vice  President  or
Executive  Vice President, any Vice President, the Secretary,
any  Assistant  Secretary, the Treasurer,  or  any  Assistant
Treasurer,  except that when used with respect to  the  Trust
Company  or  the  Owner Trustee, "Responsible Officer"  shall
also  include the Cashier, any Assistant Cashier,  any  Trust
Officer  or Assistant Trust Officer, the Controller  and  any
Assistant  Controller  or  any other  officer  of  the  Trust
Company or the Owner Trustee customarily performing functions
similar  to  those  performed by any of the above  designated
officers  and  also  means,  with  respect  to  a  particular
corporate trust matter, any other officer to whom such matter
is  referred because of his knowledge of and familiarity with
the particular subject.

     "Sale Date" shall have the meaning given to such term in
Section 20.3(a) of the Lease.

     "Sale Notice" shall mean a notice given to the Lessor in
connection  with  the  election by the Lessees  of  the  Sale
Option.

      "Sale Option" shall have the meaning given to such term
in Section 20.1 of the Lease.

     "Sale Proceeds Shortfall" shall mean the amount by which
the proceeds of a sale described in Section 22.1 of the Lease
are less than the Limited Recourse Amount with respect to the
Properties  if  it has been determined that the  Fair  Market
Sales  Value of the Properties at the expiration of the  term
of  the Lease has been impaired by greater than ordinary wear
and tear during the Term of the Lease.

      "Scheduled Interest Payment Date" shall mean (a) as  to
any  Eurodollar Loan or Eurodollar Holder Advance,  the  last
day of the Interest Period applicable to such Eurodollar Loan
or  Eurodollar  Holder Advance (or respecting any  Eurodollar
Loan  or Eurodollar Holder Advance having an Interest  Period
of  six  (6) months, the three (3) month anniversary of  such
Interest  Period), (b) as to any ABR Loan or any  ABR  Holder
Advance, the fifteenth day of each month, unless such day  is
not  a  Business  Day and in such case on the next  occurring
Business Day and (c) as to all Loans and Holder Advances, the
date  of  any  voluntary or involuntary payment,  prepayment,
return or redemption, and the Maturity Date or the Expiration
Date, as the case may be.

      "Secured Parties" shall have the meaning given to  such
term in the Security Agreement.

      "Securities Act" shall mean the Securities Act of 1933,
as   amended,   together  with  the  rules  and   regulations
promulgated thereunder.

      "Security Agreement" shall mean the Security  Agreement
dated on or about the Initial Closing Date between the Lessor
and  the  Agent, for the benefit of the Secured Parties,  and
accepted and agreed to by the Lessees.

     "Security Documents" shall mean the collective reference
to  the Security Agreement, the Mortgage Instruments, (to the
extent  the Lease is construed as a security instrument)  the
Lease,  the  UCC Financing Statements and all other  security
documents hereafter delivered to the Agent granting a lien on
any  asset  or assets of any Person to secure the obligations
and  liabilities  of  the Lessor under the  Credit  Agreement
and/or  under any of the other Credit Documents or to  secure
any guarantee of any such obligations and liabilities.

      "Soft  Costs" shall mean all costs which are ordinarily
and  reasonably  incurred  in relation  to  the  acquisition,
development,  installation,  construction,  improvement   and
testing  of  the Properties other than Hard Costs,  including
without  limitation  structuring fees,  administrative  fees,
legal  fees,  upfront  fees, fees  and  expenses  related  to
appraisals,  title  examinations, title  insurance,  document
recordation,   surveys,   environmental   site   assessments,
geotechnical  soil  investigations  and  similar  costs   and
professional fees customarily associated with a  real  estate
closing,  the  Lender Facility Fee, the Holder Facility  Fee,
fees   and   expenses  of  the  Owner  Trustee   payable   or
reimbursable  under the Operative Agreements  and  costs  and
expenses  incurred pursuant to Sections 7.3(a) and 7.3(b)  of
the Participation Agreement.

       "Stockholders'  Equity"  means,  as  of  any  date  of
determination, the shareholders' equity of the Guarantor  and
its  Subsidiaries,  as  set forth or reflected  on  the  most
recent  Consolidated balance sheet of the Guarantor  and  its
Subsidiaries prepared in accordance with GAAP, (a)  including
but  not  limited  to  (i) the par or  stated  value  of  all
outstanding  Capital  Stock,  (ii)  capital  surplus,   (iii)
retained  earnings  and  (b)  excluding  items  such  as  (i)
purchases of treasury stock, (ii) valuation allowances, (iii)
receivables due from an employee stock ownership  plan,  (iv)
employee stock ownership plan debt guarantees (to the  extent
not  included  in  item (b)(iii) hereof) and (v)  translation
adjustments for foreign currency transactions.

       "Subsidiary"  shall  mean,  as  to  any  Person,   any
corporation  of which at least a majority of the  outstanding
stock  having by the terms thereof ordinary voting  power  to
elect   a  majority  of  the  board  of  directors  of   such
corporation (irrespective of whether or not at the time stock
of  any other class or classes of such corporation shall have
or  might have voting power by reason of the happening of any
contingency) is at the time owned by such Person, or  by  one
(1)  or  more Subsidiaries, or by such Person and one (1)  or
more Subsidiaries.

      "Supplemental Amounts" shall have the meaning given  to
such term in Section 9.18 of the Credit Agreement.

      "Supplemental Rent" shall mean all amounts, liabilities
and  obligations (other than Basic Rent) which any particular
Lessee  assumes  or  agrees to pay to the Lessor,  the  Trust
Company,  the  Holders, the Agent, the Lenders or  any  other
Person  under  the Lease or under any of the other  Operative
Agreements  including  without  limitation  payments  of  the
Termination  Value and the Maximum Residual Guarantee  Amount
and all indemnification amounts, liabilities and obligations.

       "Taxes"  shall  have  the  meaning  specified  in  the
definition of "Impositions".

      "Term" shall have the meaning specified in Section  2.2
of the Lease.

      "Termination Date" shall have the meaning specified  in
Section 16.2(a) of the Lease.

      "Termination Event" shall mean (a) with respect to  any
Pension  Plan,  the occurrence of a Reportable  Event  or  an
event  described  in  Section  4062(e)  of  ERISA,  (b)   the
withdrawal of any Credit Party or any ERISA Affiliate from  a
Multiple Employer Plan during a plan year in which it  was  a
substantial  employer  (as such term is  defined  in  Section
4001(a)(2)  of  ERISA),  or  the termination  of  a  Multiple
Employer Plan, (c) the distribution of a notice of intent  to
terminate  a Plan or Multiemployer Plan pursuant  to  Section
4041(a)(2)  or  4041A  of  ERISA,  (d)  the  institution   of
proceedings to terminate a Plan or Multiemployer Plan by  the
PBGC  under  Section 4042 of ERISA, (e) any  other  event  or
condition  which might constitute grounds under Section  4042
of  ERISA  for  the termination of, or the appointment  of  a
trustee to administer, any Plan or Multiemployer Plan, or (f)
the complete or partial withdrawal of any Credit Party or any
ERISA Affiliate from a Multiemployer Plan.

     "Termination Notice" shall have the meaning specified in
Section 16.1 of the Lease.

     "Termination Value" shall mean the sum of (a) either (i)
with  respect  to  all  Properties, an amount  equal  to  the
aggregate  outstanding Property Cost for all the  Properties,
in  each case as of the last occurring Payment Date, or  (ii)
with respect to a particular Property, an amount equal to the
Property Cost allocable to such Property, plus (b) respecting
the  amounts described in each of the foregoing subclause (i)
or  (ii),  as  applicable, any and  all  accrued  but  unpaid
interest  on  the Loans and any and all Holder Yield  on  the
Holder Advances related to the applicable Property Cost, plus
(c)  to the extent the same is not duplicative of the amounts
payable  under  clause (b) above, all other  Rent  and  other
amounts  then  due  and payable or accrued under  the  Agency
Agreement,  Lease and/or under any other Operative  Agreement
(including without limitation amounts under Sections 11.1 and
11.2  of  the  Participation  Agreement  and  all  costs  and
expenses referred to in clause FIRST of Section 22.2  of  the
Lease).

     "Total Debt" means, as of any date of determination with
respect   to  the  Guarantor  and  its  Subsidiaries   on   a
Consolidated basis without duplication, the sum of  (a)  Debt
plus  (b)  all outstanding indebtedness obligations  actually
incurred  under or on account of any ELLF, each in accordance
with GAAP.

     "Tranche A Commitments" shall mean the obligation of the
Tranche  A Lenders to make the Tranche A Loans to the  Lessor
in  an  aggregate  principal  amount  at  any  one  (1)  time
outstanding  not to exceed the aggregate of the  amounts  set
forth  opposite each Tranche A Lender's name on Schedule  2.1
to  the Credit Agreement, as such amount may be increased  or
reduced  from time to time in accordance with the  provisions
of  the  Operative Agreements; provided, no Tranche A  Lender
shall be obligated to make Tranche A Loans in excess of  such
Tranche A Lender's share of the Tranche A Commitments as  set
forth  adjacent to such Tranche A Lender's name  on  Schedule
2.1 to Credit Agreement.

     "Tranche A Lenders" shall mean First Union National Bank
and  shall  include  the several banks  and  other  financial
institutions from time to time party to the Credit  Agreement
that commit to make the Tranche A Loans.

      "Tranche A Loans" shall mean the Loans made pursuant to
the Tranche A Commitment.

      "Tranche A Note" shall have the meaning given to it  in
Section 2.2 of the Credit Agreement.

     "Tranche B Commitments" shall mean the obligation of the
Tranche  B Lenders to make the Tranche B Loans to the  Lessor
in  an  aggregate  principal  amount  at  any  one  (1)  time
outstanding  not to exceed the aggregate of the  amounts  set
forth  opposite each Tranche B Lender's name on Schedule  2.1
to  the Credit Agreement, as such amount may be increased  or
reduced  from time to time in accordance with the  provisions
of  the  Operative Agreements; provided, no Tranche B  Lender
shall be obligated to make Tranche B Loans in excess of  such
Tranche B Lender's share of the Tranche B Commitments as  set
forth  adjacent to such Tranche B Lender's name  on  Schedule
2.1 to Credit Agreement.

     "Tranche B Lenders" shall mean First Union National Bank
and  shall  include  the several banks  and  other  financial
institutions from time to time party to the Credit  Agreement
that commit to make the Tranche B Loans.

      "Tranche B Loan" shall mean the Loans made pursuant  to
the Tranche B Commitment.

      "Tranche B Note" shall have the meaning given to it  in
Section 2.2 of the Credit Agreement.

     "Transaction Expenses" shall mean all Soft Costs and all
other  costs  and  expenses incurred in connection  with  the
preparation,   execution  and  delivery  of   the   Operative
Agreements and the transactions contemplated by the Operative
Agreements  including  without  limitation  all   costs   and
expenses  described  in  Section  7.1  of  the  Participation
Agreement and the following:

           (a)   the  reasonable fees, out-of-pocket expenses
     and disbursements of counsel in negotiating the terms of
     the  Operative  Agreements  and  the  other  transaction
     documents,   preparing  for  the  closings  under,   and
     rendering opinions in connection with, such transactions
     and  in  rendering other services customary for  counsel
     representing  parties  to  transactions  of  the   types
     involved  in  the  transactions  contemplated   by   the
     Operative Agreements;

           (b)   the  reasonable fees, out-of-pocket expenses
     and disbursements of accountants for any Credit Party in
     connection  with  the transactions contemplated  by  the
     Operative Agreements;

           (c)  any and all other reasonable fees, charges or
     other  amounts  payable to the Lenders, the  Agent,  the
     Holders,  the  Owner Trustee or any broker which  arises
     under any of the Operative Agreements;

            (d)   any  other  reasonable  fee,  out-of-pocket
     expenses,  disbursement or cost  of  any  party  to  the
     Operative  Agreements  or any of the  other  transaction
     documents; and

           (e)   any  and  all  Taxes and  fees  incurred  in
     recording or filing any Operative Agreement or any other
     transaction  document, any deed, declaration,  mortgage,
     security  agreement, notice or financing statement  with
     any  public office, registry or governmental  agency  in
     connection  with  the transactions contemplated  by  the
     Operative Agreement.

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

     "Trust" shall mean the PFG Real Estate Trust 2000-1.

      "Trust Agreement" shall mean the Trust Agreement  dated
on  or about the Initial Closing Date between the Holders and
the Owner Trustee.

     "Trust Company" shall mean First Security Bank, National
Association,  in its individual capacity, and  any  successor
owner  trustee  under the Trust Agreement in  its  individual
capacity.

      "Trust  Estate"  shall have the  meaning  specified  in
Section 2.2 of the Trust Agreement.

      "Type" shall mean, as to any Loan, whether it is an ABR
Loan or a Eurodollar Loan.

      "UCC Financing Statements" shall mean collectively  the
Lender   Financing   Statements  and  the  Lessor   Financing
Statements.

     "Unanimous Vote Matters" shall have the meaning given it
in Section 12.4 of the Participation Agreement.

      "Unfunded  Amount" shall have the meaning specified  in
Section 3.2 of the Agency Agreement.

      "Unfunded  Liability" shall mean, with respect  to  any
Plan,  at  any  time, the amount (if any) by  which  (a)  the
present value of all benefits under such Plan exceeds (b) the
fair  market  value  of  all Plan assets  allocable  to  such
benefits, all determined as of the then most recent valuation
date  for such Plan, but only to the extent that such  excess
represents a potential liability of the Company or any member
of  the Controlled Group to the PBGC or such Plan under Title
IV of ERISA.

      "Uniform  Commercial  Code" and "UCC"  shall  mean  the
Uniform  Commercial  Code  as in  effect  in  any  applicable
jurisdiction.

      "United States Bankruptcy Code" shall mean Title 11  of
the United States Code.

      "U.S.  Person"  shall  have the  meaning  specified  in
Section 11.2(e) of the Participation Agreement.

     "U.S. Taxes" shall have the meaning specified in Section
11.2(e) of the Participation Agreement.

      "Wholly-Owned Entity" shall mean a Person  all  of  the
shares of capital stock or other ownership interest of  which
are  owned  by  the Guarantor and/or one of its  wholly-owned
Subsidiaries or other wholly-owned entities.

      "Withholdings"  shall  have the  meaning  specified  in
Section 11.2(e) of the Participation Agreement.

      "Work"  shall mean the furnishing of labor,  materials,
components,  furniture,  furnishings,  fixtures,  appliances,
machinery,  equipment, tools, power, water, fuel, lubricants,
supplies, goods and/or services with respect to any Property.

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