Document:

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                                                                    Exhibit 4.vv
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                             THE MEAD CORPORATION

                                      TO

                      THE FIRST NATIONAL BANK OF CHICAGO

                                    Trustee

                             _____________________

                                   INDENTURE

                         Dated as of February 1, 1993

                             _____________________

================================================================================
<PAGE>

                               TABLE OF CONTENTS

                                                          Page
                                                          ----

PARTIES..................................................  1
RECITALS OF THE COMPANY..................................  1

                                  ARTICLE ONE
                                  -----------

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 101.       Definitions:..........................  1
                   Act...................................  2
                   Affiliate.............................  2
                   Appraised Value.......................  2
                   Attributable Debt.....................  2
                   Authenticating Agent..................  2
                   Authorized Newspaper..................  2
                   Bearer Security.......................  3
                   Board of Directors....................  3
                   Board Resolution......................  3
                   Business Day..........................  3
                   CEDEL S.A.............................  3
                   Commission............................  3
                   Company...............................  3
                   Company Request; Company Order........  3
                   Consolidated Shareholders' Equity.....  4
                   Corporate Trust Office................  4
                   Corporation...........................  4
                   Coupon................................  4
                   Defaulted Interest....................  4
                   Depositary............................  4
                   Defaulted Currency....................  4
                   Dollar; $.............................  4
                   ECU...................................  4
                   Euro-clear............................  4
                   European Communities..................  4
                   Event of Default......................  4
                   Exchange Rate.........................  5
                   Exempted Indebtedness.................  5
                   Experts...............................  5
                   Foreign Currency......................  5
                   Global Security.......................  5
                   Holder................................  5
                   Indenture.............................  5
                   Interest..............................  6
                   Interest Payment Date.................  6
                   Maturity..............................  6
                   Officers' Certificate.................  6

___________

NOTE:  This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.

<PAGE>

<TABLE>
<CAPTION>

                                                           Page
                                                           ----
<S>             <C>                                        <C>
                Opinion of Counsel.........................  6
                Original Issue Discount Security...........  6
                Outstanding................................  6
                Paying Agent...............................  7
                Person.....................................  7
                Place of Payment...........................  7
                Predecessor Security.......................  8
                Principal Property.........................  8
                Redemption Date............................  8
                Redemption Price...........................  8
                Registered Security........................  8
                Regular Record Date........................  8
                Securities.................................  8
                Security Register and Security
                 Registrar.................................  8
                Special Record Date........................  8
                Stated Maturity............................  9
                Subsidiary.................................  9
                Trustee....................................  9
                Trust Indenture Act........................  9
                United States..............................  9
                United States Alien........................  9
                U.S. Government Obligations................  9
                Vice President.............................  9

Section 102.    Compliance Certificates and Opinions....... 10
Section 103.    Form of Documents Delivered to Trustee..... 10
Section 104.    Acts of Holders; Record Dates.............. 11
Section 105.    Notices, Etc., to Trustee and Company...... 13
Section 106.    Notice to Holders; Waiver.................. 14
Section 107.    Conflict with Trust Indenture Act.......... 15
Section 108.    Effect of Headings and
                 Table of Contents......................... 15
Section 109.    Successors and Assigns..................... 15
Section 110.    Separability Clause........................ 15
Section 111.    Benefits of Indenture...................... 15
Section 112.    Governing Law.............................. 16
Section 113.    Legal Holidays............................. 16
</TABLE>
____________

NOTE:  This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.

                                      ii
<PAGE>

<TABLE>
<CAPTION>
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                                  ARTICLE TWO
                                  -----------

                                SECURITY FORMS

<S>            <C>                                                         <C>
Section 201.   Forms Generally............................................   16
Section 202.   Form of Face of Security...................................   17
Section 203.   Form of Reverse of Security................................   19
Section 204.   Form of Trustee's Certificate of Authentication............   23

                                 ARTICLE THREE
                                 -------------

                                THE SECURITIES

Section 301.   Amount Unlimited; Issuable in Series.......................   23
Section 302.   Denominations..............................................   26
Section 303.   Execution, Authentication, Delivery and Dating.............   26
Section 304.   Temporary Securities.......................................   30
Section 305.   Registration, Registration of Transfer and Exchange........   33
Section 306.   Mutilated, Destroyed, Lost and Stolen Securities...........   37
Section 307.   Payment of Interest; Interest Rights Preserved.............   38
Section 308.   Persons Deemed Owners......................................   40
Section 309.   Cancellation...............................................   41
Section 310.   Computation of Interest....................................   41
Section 311.   Certification by a Person Entitled to Delivery of Bearer
                 Security.................................................   41
Section 312.   Judgments..................................................   41

                                 ARTICLE FOUR
                                 ------------

                          SATISFACTION AND DISCHARGE

Section 401.   Satisfaction and Discharge of Indenture....................   42
Section 402.   Application of Trust Money.................................   43
</TABLE>

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NOTE: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.

                                      iii
<PAGE>

<TABLE>
<CAPTION>
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                                 ARTICLE FIVE
                                 ------------

                                   REMEDIES

<S>           <C>                                                         <C>
Section 501.   Events of Default..........................................   44
Section 502.   Acceleration of Maturity; Rescission and Annulment.........   46
Section 503.   Collection of Indebtedness and Suits for Enforcement by
                 Trustee..................................................   47
Section 504.   Trustee May File Proofs of Claim...........................   48
Section 505.   Trustee May Enforce Claims Without Possession of Securities   48
Section 506.   Application of Money Collected.............................   49
Section 507.   Limitation on Suits........................................   50
Section 508.   Unconditional Right of Holders to Receive Principal,
                 Premium and Interest.....................................   51
Section 509.   Restoration of Rights and Remedies.........................   51
Section 510.   Rights and Remedies Cumulative.............................   51
Section 511.   Delay or Omission Not Waiver...............................   52
Section 512.   Control by Holders.........................................   52
Section 513.   Waiver of Past Defaults....................................   53
Section 514.   Undertaking for Costs......................................   53
Section 515.   Waiver of Stay or Extension Laws...........................   53

                                  ARTICLE SIX
                                  -----------

                                  THE TRUSTEE

Section 601.   Certain Duties and Responsibilities........................   54
Section 602.   Notice of Defaults.........................................   54
Section 603.   Certain Rights of Trustee..................................   54
Section 604.   Not Responsible for Recitals or Issuance of Securities.....   56
Section 605.   May Hold Securities........................................   56
Section 606.   Money Held in Trust........................................   56
Section 607.   Compensation and Reimbursement.............................   56
Section 608.   Disqualification; Conflicting Interests....................   57
Section 609.   Corporate Trustee Required; Eligibility....................   57
</TABLE>

-----------
NOTE: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.

                                      iv
<PAGE>

<TABLE>
<CAPTION>
                                                                           Page
                                                                           ----
<S>            <C>                                                         <C>
Section 610.   Resignation and Removal; Appointment of Successor..........   57
Section 611.   Acceptance of Appointment by Successor.....................   59
Section 612.   Merger, Conversion, Consolidation or Succession to
                 Business.................................................   60
Section 613.   Preferential Collection of Claims Against Company..........   61
Section 614.   Appointment of Authenticating Agent........................   61

                                ARTICLE SEVEN
                                -------------

              HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

Section 701.   Company to Furnish Trustee Names and Addresses of Holders..   63
Section 702.   Preservation of Information; Communications to Holders.....   63
Section 703.   Reports by Trustee.........................................   64
Section 704.   Reports by Company.........................................   64

                                 ARTICLE EIGHT
                                 -------------

             CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

Section 801.   Company May Consolidate, Etc., Only on Certain Terms.......   65
Section 802.   Successor Substituted......................................   66

                                 ARTICLE NINE
                                 ------------

                            SUPPLEMENTAL INDENTURES

Section 901.   Supplemental Indentures Without Consent of Holders.........   67
Section 902.   Supplemental Indentures with Consent of Holders............   68
Section 903.   Execution of Supplemental Indentures.......................   70
Section 904.   Effect of Supplemental Indentures..........................   70
Section 905.   Conformity with Trust Indenture Act........................   70
</TABLE>

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NOTE: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.

                                       v
<PAGE>

<TABLE>
<CAPTION>
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                                                                           ----
<S>            <C>                                                         <C>
Section 906.   Reference in Securities to Supplemental Indentures.........   70

                                  ARTICLE TEN
                                  -----------

                                   COVENANTS

Section 1001.  Payment of Principal, Premium and Interest.................   70
Section 1002.  Maintenance of Office or Agency............................   71
Section 1003.  Money for Securities Payments to Be Held in Trust..........   72
Section 1004.  Corporate Existence........................................   74
Section 1005.  Maintenance of Properties..................................   74
Section 1006.  Limitation on Liens........................................   74
Section 1007.  Limitation on Sale and Lease-Back..........................   76
Section 1008.  Statement by Officers as to Default........................   77
Section 1009.  Waiver of Certain Covenants................................   77
Section 1010.  Payment of Additional Amounts..............................   77

                                ARTICLE ELEVEN
                                --------------

                           REDEMPTION OF SECURITIES

Section 1101.  Applicability of Article...................................   78
Section 1102.  Election to Redeem; Notice to Trustee......................   78
Section 1103.  Selection by Trustee of Securities to Be Redeemed..........   79
Section 1104.  Notice of Redemption.......................................   79
Section 1105.  Deposit of Redemption Price................................   80
Section 1106.  Securities Payable on Redemption Date......................   80
Section 1107.  Securities Redeemed in Part................................   81

                                ARTICLE TWELVE
                                --------------

                                 SINKING FUNDS

Section 1201.  Applicability of Article...................................   82
</TABLE>

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NOTE: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.

                                      vi
<PAGE>

<TABLE>
<CAPTION>
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<S>            <C>                                                         <C>
Section 1202.  Satisfaction of Sinking Fund Payments with Securities......   82
Section 1203.  Redemption of Securities for Sinking Fund..................   83

                               ARTICLE THIRTEEN
                               ----------------

                      DEFEASANCE AND COVENANT DEFEASANCE

Section 1301.  Applicability of Article; Company's Option to Effect
                 Defeasance or Covenant Defeasance........................   83
Section 1302.  Defeasance and Discharge...................................   83
Section 1303.  Covenant Defeasance........................................   84
Section 1304.  Conditions to Defeasance and Covenant Defeasance...........   84
Section 1305.  Deposited Money and U.S. Government Obligations to be Held
                 in Trust; Other Miscellaneous Provisions.................   87

                               ARTICLE FOURTEEN
                               ----------------

                              MEETINGS OF HOLDERS

Section 1401.  Purposes of Which Meetings May be Called...................   87
Section 1402.  Call, Notice and Place of Meetings.........................   88
Section 1403.  Persons Entitled to Vote at Meetings.......................   88
Section 1404.  Quorum; Action.............................................   88
Section 1405.  Determination of Voting Rights; Conduct and Adjournment of
                 Meetings.................................................   90
Section 1406.  Counting Votes and Recording Action of Meetings............   91

TESTIMONIUM...............................................................   92
SIGNATURES AND SEAL.......................................................   93
ACKNOWLEDGMENTS...........................................................   93
</TABLE>

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NOTE: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.

                                      vii
<PAGE>

<TABLE>
<CAPTION>
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                                                                           ----
<S>                                                                        <C>
EXHIBIT A.................................................................   94
EXHIBIT B.................................................................   96
</TABLE>

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NOTE: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.

                                     viii
<PAGE>

                             THE MEAD CORPORATION
                Certain Sections of this Indenture relating to
                 Sections 310 through 318, inclusive, of the
                         Trust Indenture Act of 1939:

<TABLE>
<CAPTION>
Trust Indenture
Act Section                                          Indenture Section
<S>                                                  <C>
(S)   310(a)(1)                                      609
         (a)(2)                                      609
         (a)(3)                                      Not Applicable
         (a)(4)                                      Not Applicable
         (b)                                         608
                                                     610
(S)   311(a)                                         613
         (b)                                         613
(S)   312(a)                                         701
                                                     702(a)
         (b)                                         702(b)
         (c)                                         702(c)
(S)   313(a)                                         703(a)
         (b)                                         703(a)
         (c)                                         703(a)
         (d)                                         703(b)
(S)   314(a)                                         704
         (a)(4)                                      101
                                                     1004
         (b)                                         Not Applicable
         (c)(1)                                      102
         (c)(2)                                      102
         (c)(3)                                      Not Applicable
         (d)                                         Not Applicable
         (e)                                         102
(S)   315(a)                                         601
         (b)                                         602
         (c)                                         601
         (d)                                         601
         (e)                                         514
(S)   316(a)                                         101
         (a)(1)(A)                                   502
                                                     512
         (a)(1)(B)                                   513
         (a)(2)                                      Not Applicable
         (b)                                         508
         (c)                                         104(c)
(S)   317(a)(1)                                      503
         (a)(2)                                      504
         (b)                                         1003
(S)   318(a)                                         107
</TABLE>

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NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>

     INDENTURE, dated as of February 1, 1993, between THE MEAD CORPORATION, a
corporation duly organized and existing under the laws of the State of Ohio
(herein called the "Company"), having its principal office at Courthouse Plaza
Northeast, Dayton, Ohio 45463, and The First National Bank of Chicago, a
national banking association duly organized and existing under the laws of the
United States of America as Trustee (herein called the "Trustee").

                            RECITALS OF THE COMPANY

     The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture provided.

     All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.

                  NOW, THEREFORE, THIS INDENTURE WITNESSETH:

     For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually agreed, for the equal and proportionate
benefit of all Holders of the Securities or of series thereof, as follows:

                                  ARTICLE ONE

                       Definitions and Other Provisions
                            of General Application

Section 101. Definitions.
             -----------

     For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:

     (1) the terms defined in this Article have the meanings assigned to them in
     this Article and include the plural as well as the singular;

     (2) all other terms used herein which are defined in the Trust Indenture
     Act, either directly or by reference therein, have the meanings assigned to
     them therein;

     (3) all accounting terms not otherwise defined herein have the meanings
     assigned to them in accordance with generally accepted accounting
     principles, and, except as otherwise herein expressly provided, the term
     "generally accepted accounting principles" with respect to any computation
     required or permitted hereunder shall mean such accounting principles as
     are generally accepted at the date of such computation; and

<PAGE>

     (4) the words "herein," "hereof" and "hereunder" and other words of similar
     import refer to this Indenture as a whole and not to any particular
     Article, Section or other subdivision.

     Certain terms, used principally in Article Six, are defined in that
Article.

     "Act," when used with respect to any Holder, has the meaning specified in
Section 104.

     "Affiliate" means any Person, other than a Subsidiary, in which the Company
and/or any Subsidiary at any time owns, directly or indirectly, an aggregate of
at least 50% of the voting stock.

     "Appraised Value" means the fair market value as determined on the
appraisal date or dates by an "expert" acceptable to the Trustee and the
Company. The term "Appraisal Date" as used in this paragraph shall mean: (a) the
date or dates on which the appraisals conducted during 1989 were completed,
which appraisals were finalized on November 2, 1989; and (b) thereafter, such
later date or dates, if any, which is five years after the last previous
appraisal date under this Indenture, provided that the Company may, at its
option by thirty days' written notice to the Trustee, fix any appraisal date at
any date which is not less than two and one-half years nor more than five years
after the last previous appraisal date under this Indenture.

     "Attributable Debt" means, as to any particular lease entered into after
the date hereof under which any Person is at the time liable and at any date as
of which the amount thereof is to be determined, the total net amount of rent
required to be paid by such Person under such lease during the remaining term
thereof, discounted from the respective due dates thereof to such date at a rate
equal to the weighted average of the interest rates borne by the Securities. The
net amount of rent required to be paid under any such lease for any such period
shall be the aggregate amount of the rent payable by the lessee with respect to
such period after excluding amounts required to be paid on account of
maintenance and repairs, insurance, taxes, assessments, water and utility rates
and similar charges. In the case of any lease which is terminable by the lessee
upon the payment of a penalty, such net amount shall also include the amount of
such penalty, but no rent shall be considered as required to be paid under such
lease subsequent to the first date upon which it may be so terminated.

     "Authenticating Agent" means any Person authorized by the Trustee to act on
behalf of the Trustee to authenticate Securities.

     "Authorized Newspaper" means a newspaper in an official language of the
country of publication or in the English language, in either case customarily
published on each Business Day, whether

                                      2
<PAGE>

or not published on Saturdays, Sundays or holidays, and of general circulation
in the place in connection with which the term is used or in the financial
community of such place. Where successive publications are required to be made
in Authorized Newspapers, the successive publications may be made in the same or
in different newspapers in the same city meeting the foregoing requirements and
in each case on any Business Day.

     "Bearer Security" means any Security in the form of bearer securities
established pursuant to Section 201 that is payable to bearer.

     "Board of Directors" means either the board of directors of the Company or
any duly authorized committee of that board.

     "Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

     "Business Day" when used with respect to any Place of Payment or any other
particular location referred to in the Indenture or in the Securities, means,
except as may otherwise be provided in the form of Securities of any particular
series pursuant to the provisions of this Indenture, each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions
in that Place of Payment are authorized or obligated by law to close.

     "CEDEL S.A." means Centrale de Livraison de Valeurs Mobilieres S.A.

     "Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, or, if at
any time after the execution of this instrument such Commission is not existing
and performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties at such time.

     "Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor Person.

     "Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President or a Vice President, and by its Treasurer,
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.

                                       3
<PAGE>

     "Consolidated Shareholders' Equity" means the sum of the consolidated
shareholders' equity of the Company and its consolidated subsidiaries, as shown
on the most recent audited consolidated balance sheet of the Company plus 75% of
the excess of the "Appraised Value" (as herein defined) of all timberlands owned
by the Company and its Subsidiaries over the book value thereof.

     "Corporate Trust Office" means the principal office of the Trustee in
Chicago, Illinois at which at any particular time its corporate trust business
shall be administered.

     "Corporation" includes corporations, associations, companies, joint-stock
companies or business trusts.

     The term "coupon" means any interest coupon appertaining to a Bearer
Security.

     "Defaulted Interest" has the meaning specified in Section 307.

     "Depositary" means, with respect to the Securities of any series issuable
or issued in whole or in part in the form of one or more Global Securities, the
Person designated as Depositary by the Company pursuant to Section 301 until a
successor Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Depositary" shall mean or include
each Person who is then a Depositary hereunder, and if at any time there is more
than one such Person, "Depositary" as used with respect to the Securities of any
such series shall mean the Depositary with respect to the Securities of that
series.

     "Designated Currency" has the meaning specified in Section 312.

     "Dollar" or "$" means the coin or currency of the United States of America
as at the time of payment is legal tender for the payment of public and private
debts.

     "ECU" means the European Currency Unit as defined and revised from time to
time by the Council of the European Communities.

     "Euro-clear" means Morgan Guaranty Trust Company of New York, Brussels
office, or its successor as operator of the Euro-clear System.

     "European Communities" means the European Economic Community, the European
Coal and Steel Community and the European Atomic Energy Community.

     "Event of Default" has the meaning specified in Section 501.

                                       4
<PAGE>

     "Exchange Rate" means the exchange rate set forth in the Officers'
Certificate or supplemental indenture establishing a series of Securities
pursuant to Section 301.

     "Exempted Indebtedness" means, as of any particular time, the sum of (i)
the aggregate principal amount of all then outstanding indebtedness for money
borrowed of the Company and Subsidiaries issued, assumed or guaranteed directly
or indirectly after the date of this Indenture and secured by any mortgage,
security interest, pledge, lien or other encumbrance other than those permitted
by paragraph (a) of Section 1006 and (ii) all Attributable Debt in respect of
Sale and Lease-Back Transactions (as defined in Section 1007) incurred after the
date of this Indenture and at such time outstanding other than that permitted
pursuant to paragraph (a) of Section 1007.

     "Experts," except as otherwise herein specifically provided, the engineer,
appraiser, accountant, counsel or other person giving any opinion, certificate,
audit or report provided for herein shall be selected by the Board of Directors
and shall not be disqualified by reason of his regular employment or retention
by the Company, but in all cases such selection of the Board of Directors must
be acceptable to the Trustee. In any case, more than one person of the
designated class may join in any such opinion, certificate, audit or report,
each certifying to a party of the required facts, opinions or conclusions. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for herein shall conform to the requirements of Section 102.

     "Foreign Currency" means a currency issued by the government of any country
other than the United States of America.

     "Global Security" means a Registered or Bearer Security evidencing all or
part of a series of Securities, issued to the Depositary for such series or its
nominee in accordance with Section 303, and bearing the legend prescribed in
Section 303.

     "Holder," with respect to a Registered Security, means a Person in whose
name such Registered Security is registered in the Security Register and, with
respect to a Bearer Security or a coupon, means the bearer thereof.

     "Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, including, for
all purposes of this instrument, and any such supplemental indenture, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this instrument and any such supplemental indenture, respectively. The term
"Indenture" shall also include the terms of particular series of Securities
established as contemplated by Section 301.

                                       5
<PAGE>

     "Interest," when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity.

     "Interest Payment Date," when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.

     "Maturity," when used with respect to any Security, means the date on which
the principal of such Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.

     "Officers' Certificate" means a certificate signed by the Chairman of the
Board, a Vice Chairman of the Board, the President or a Vice President, and by
the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary,
the Controller or an Assistant Controller, of the Company, and delivered to the
Trustee.

     "Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company, and who shall be acceptable to the Trustee.

     "Original Issue Discount Security" means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.

     "Outstanding," when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
                ------

     (i) Securities theretofore cancelled by the Trustee or delivered to the
     Trustee for cancellation;

     (ii) Securities for whose payment or redemption money in the necessary
     amount has been theretofore deposited with the Trustee or any Paying Agent
     (other than the Company) in trust or set aside and segregated in trust by
     the Company (if the Company shall act as its own Paying Agent) for the
     Holders of such Securities; provided that, if such Securities are to be
                                 --------
     redeemed, notice of such redemption has been duly given pursuant to this
     Indenture or provision therefor satisfactory to the Trustee has been made;

     (iii) Securities for whose payment or redemption money or U.S. Government
     Obligations as contemplated by Section 1304 in the necessary amount have
     been theretofore deposited with the Trustee (or another trustee satisfying
     the requirements of Section 609) in trust for the Holders of such
     Securities in accordance with Section 1305; and

                                       6
<PAGE>

     (iv) Securities which have been paid pursuant to Section 306 or in exchange
     for or in lieu of which other Securities have been authenticated and
     delivered pursuant to this Indenture, other than any such Securities in
     respect of which there shall have been presented to the Trustee proof
     satisfactory to it that such Securities are held by a bona fide purchaser
     in whose hands such Securities are valid obligations of the Company;

provided, however, that in determining whether the Holders of the requisite
--------  -------
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, (i) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding shall be the amount of the principal thereof that would be due and
payable as of the date of such determination upon acceleration of the Maturity
thereof pursuant to Section 502, (ii) the principal amount of a Security
denominated in one or more foreign currencies or currency units shall be the
U.S. dollar equivalent, determined in the manner provided as contemplated by
Section 301 on the date of original issuance of such Security, of the principal
amount (or, in the case of an Original Issue Discount Security, the U.S. dollar
equivalent on the date of original issuance of such Security of the amount
determined as provided in (i) above) of such Security, and (iii) Securities
owned by the Company or any other obligor upon the Securities or any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company or with such other obligor shall be disregarded
and deemed not to be Outstanding, except that, in determining whether the
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which the
Trustee knows to be so owned shall be so disregarded. Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any such Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company or with such other obligor.

     "Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.

     "Person" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.

     "Place of Payment," when used with respect to the Securities of any series
payable in Dollars, means the Corporate Trust Office of the Trustee, when used
with respect to the Securities of any series payable in a Foreign Currency,
means the place or places

                                      7
<PAGE>

where such Foreign Currency is the legal tender, and, when used with respect to
the Securities of any series, means such other place or places, if any, where
the principal of (and premium, if any) and any interest on the Securities of
that series are payable as specified as contemplated by Section 301, in all
cases subject to the provisions of Section 1002.

     "Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.

     "Principal Property" means (i) any paperboard, paper or pulp mill or any
paper converting plant or foundry or any other manufacturing plant or facility
located within the United States of America or Canada of the Company or any
Subsidiary except any such plant or facility which the Board of Directors by
resolution declares is not of material importance to the total business
conducted by the Company and its Subsidiaries as an entirety and (ii) any timber
or timberlands of the Company or any Subsidiary.

     "Redemption Date," when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.

     "Redemption Price," when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.

     "Registered Security" means any Security in the form of registered
securities established pursuant to Section 201 that is registered in the
Security Register.

     "Regular Record Date" for the interest payable on any Interest Payment Date
on the Securities of any series means the date specified for that purpose as
contemplated by Section 301.

     "Securities" has the meaning stated in the first recital of this Indenture
and more particularly means any Securities authenticated and delivered under
this Indenture. Where appropriate in the context of this Indenture, the term
"Securities" includes any coupon appertaining to any Bearer Securities.

     "Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.

     "Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.

                                       8
<PAGE>

     "Stated Maturity," when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.

     "Subsidiary" means any corporation at least a majority of the outstanding
securities of which having ordinary voting power to elect a majority of the
board of directors of such corporation (whether or not any other class of
securities has or might have voting power by reason of the happening of a
contingency) is at the time owned or controlled directly or indirectly by the
Company, or by one of more Subsidiaries, or by the Company and one or more
Subsidiaries.

     "Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall mean
or include each Person who is then a Trustee hereunder, and if at any time there
is more than one such Person, "Trustee" as used with respect to the Securities
of any series shall mean the Trustee with respect to Securities of that series.

     "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed; provided, however, that in
                                                   --------  -------
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.

     "United States" means the United States of America (including the States
thereof and the District of Columbia), and its possessions, which include Puerto
Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.

     "United States Alien" means any Person who, for United States Federal
income tax purposes, is a foreign corporation, a non-resident alien individual,
a non-resident alien fiduciary of a foreign estate or trust, or a foreign
partnership one or more of the members of which is, for United States Federal
income tax purposes, a foreign corporation, a non-resident alien individual or a
non-resident alien fiduciary of a foreign estate or trust.

     "U.S. Government Obligations" has the meaning specified in Section 1304.

     "Vice President," when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."

                                       9
<PAGE>

Section 102.   Compliance Certificates and Opinions.
               ------------------------------------

     Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.

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

          (1)  a statement that each individual signing such certificate or
     opinion has read such covenant or condition and the definitions herein
     relating thereto;

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

          (3)  a statement that, in the opinion of each such individual, he has
     made such examination or investigation as is necessary to enable him to
     express an informed opinion as to whether or not such covenant or condition
     has been complied with; and

          (4)  a statement as to whether, in the opinion of each such
     individual, such condition or covenant has been complied with.

Section 103.   Form of Documents Delivered to Trustee.
               --------------------------------------

     In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.

     Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the

                                   10

<PAGE>

matters upon which his certificate or opinion is based are erroneous. Any such
certificate or opinion of counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by, an officer or
officers of the Company stating that the information with respect to such
factual matters is in the possession of the Company, unless such counsel knows,
or in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are erroneous.

     Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

Section 104.   Acts of Holders; Record Dates.
               -----------------------------

     (a)  Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company. If Securities of a series
are issuable in whole or part as Bearer Securities, any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders may, alternatively, be embodied
in and evidenced by the record of Holders of Securities voting in favor thereof,
either in person or by proxies duly appointed in writing, at any meeting of
Holders of Securities duly called and held in accordance with the provisions of
Article Fourteen, or a combination of such instruments and any such record. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section. The record of any
meeting of Holders of Securities shall be proved in the manner provided in
Section 1406.

     (b)  The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof

                                  11

<PAGE>

of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.

     (c)  The ownership of Registered Securities shall be proved by the Security
Register.

     (d)  The principal amount and serial numbers of Bearer Securities held by
any Person, and the date of holding the same, may be proved by the production of
such Bearer Securities or by a certificate executed, as depositary, by any trust
company, bank, banker or other depositary, wherever situated, if such
certificate shall be deemed by the Trustee to be satisfactory, showing that at
the date therein mentioned such Person had on deposit with such depositary, or
exhibited to it, the Bearer Securities in the amount and with the serial numbers
therein described; or such facts may be proved by the certificate or affidavit
of the Person holding such Bearer Securities, if such certificate or affidavit
is deemed by the Trustee to be satisfactory. The Trustee and the Company may
assume that such ownership of any Bearer Security continues until (1) another
certificate or affidavit bearing a later date issued in respect of the same
Bearer Securities is produced, or (2) such Bearer Security is produced to the
Trustee by some other Person, or (3) such Bearer Security is surrendered in
exchange for a Registered Security, or (4) such Bearer Security is no longer
outstanding.

     (e)  The fact and date of execution of any such instrument or writing, the
authority of the Person executing the same and the principal amount and serial
numbers of Bearer Securities held by the Person so executing such instrument or
writing and the date of holding the same may also be proved in any other manner
which the Trustee deems sufficient; and the Trustee may in any instance require
further proof with respect to any of the matters referred to in this Section.

     (f)  If the Company shall solicit from the Holders of Securities of any
series any request, demand, authorization, direction, notice, consent, waiver or
other Act, the Company may, at its option, by Board Resolution, fix in advance a
record date for the determination of Holders of Registered Securities entitled
to give such request, demand, authorization, direction, notice, consent, waiver
or other Act, but the Company shall have no obligation to do so. Any such record
date shall be fixed at the Company's discretion. If such a record date is fixed,
such request, demand, authorization, direction, notice, consent and waiver or
other Act may be sought or given before or after the record date, but only the
Holders of Registered Securities of record at the close of business on such
record date shall be deemed to be Holders of Registered Securities for the
purpose of determining whether Holders of the requisite proportion of Securities
of such series Outstanding have authorized or agreed or consented to such
request, demand,

                                     12
<PAGE>

authorization, direction, notice, consent, waiver or other Act, and for that
purpose the Registered Securities of such series outstanding shall be computed
as of such record date.

     (g)  For purposes of determining the principal amount of Outstanding
Securities of any series the Holders of which are required, requested or
permitted to give any request, demand, authorization, direction, notice,
consent, waiver or take any other Act under this Indenture and for purposes of
determining whether a quorum is present at a meeting of Holders of Securities
(i) each Original Issue Discount Security shall be deemed to have the principal
amount determined by the Trustee that would be due and payable upon acceleration
of the Maturity thereof pursuant to Section 502 and the terms of such Original
Issue Discount Security as of the date such Act is delivered to the Trustee and,
where it is hereby expressly required, the Company and (ii) each Security
denominated in a Foreign Currency or composite currency shall be deemed to have
the principal amount determined by the exchange rate agent specified pursuant to
Section 301 by converting the principal amount of such Security in the currency
in which such Security is denominated into Dollars at the Exchange Rate as of
the date such Act is delivered to the Trustee and, where it is hereby expressly
required, to the Company (or, if there is no such rate on such date, such rate
as determined by such exchange rate agent).

     (h)  Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.

Section 105. Notices, Etc., to Trustee and Company.
             -------------------------------------

     Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with,

          (1)  the Trustee by any Holder or by the Company shall be sufficient
     for every purpose hereunder if made, given, furnished or filed in
     writing to or with the Trustee at its Corporate Trust Office, or

          (2)  the Company by the Trustee or by any Holder shall be sufficient
     for every purpose hereunder (unless otherwise herein expressly provided) if
     in writing and mailed, first-class postage prepaid, to the Company
     addressed to it at the address of its principal office specified in the
     first paragraph of this instrument or

                                     13
<PAGE>

      at any other address previously furnished in writing to the Trustee by the
      Company.

Section 106.   Notice to Holders; Waiver.
               -------------------------

     Except as otherwise expressly provided herein, where this Indenture
provides for notice to Holders of any event, (1) such notice shall be
sufficiently given to Holders of Registered Securities if in writing and mailed,
first-class postage prepaid, to each Holder of a Registered Security affected by
such event, at his address as it appears in the Security Register, not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice; and (2) such notice shall be sufficiently given to
Holders of Bearer Securities if published in an Authorized Newspaper in The City
of New York and, if the Securities of such series are then listed on the London
Stock Exchange and such stock exchange shall so require, in London and, if the
Securities of such series are then listed on the Luxembourg Stock Exchange and
such stock exchange shall so require, in Luxembourg and, if the Securities of
such series are then listed on any other stock exchange outside the United
States and such stock exchange shall so require, in any other required city
outside the United States or, if not practicable, in Europe on a Business Day at
least twice, the first such publication to be not earlier than the earliest date
and not later than the latest date prescribed for the giving of such notice. In
any case where notice to Holders is given by mail, neither the failure to mail
such notice, nor any defect in any notice so mailed, to any particular Holder
shall affect the sufficiency of such notice with respect to other Holders. Where
this Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.

     In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee, including
publication, if necessary, shall constitute a sufficient notification for every
purpose hereunder.

     In case by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee, including publication

                                      14
<PAGE>

in any newspapers, shall constitute sufficient notice to such Holders for every
purpose hereunder. Neither failure to give notice by publication to Holders of
Bearer Securities as provided above, nor any defect in any notice so published,
shall affect the sufficiency of any notice so mailed to Holders of Registered
Securities as provided above.

     Any request, demand, authorization, direction, notice, consent, election,
waiver or other Act required or permitted under this Indenture shall be in the
English language, except that any published notice may be in an official
language of the country of publication.

Section 107.   Conflict with Trust Indenture Act.
               ---------------------------------

     If any provision hereof limits, qualifies or conflicts with a provision of
the Trust Indenture Act that is required under such Act to be a part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
that may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or to be excluded as the case may be.

Section 108.   Effect of Headings and Table of Contents.
               ----------------------------------------

     The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.

Section 109.   Successors and Assigns.
               ----------------------

     All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.

Section 110.   Separability Clause.
               -------------------

     In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

Section 111.   Benefits of Indenture.
               ---------------------

     Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto and their successors hereunder
and the Holders, any benefit or any legal or equitable right, remedy or claim
under this Indenture.

                                      15
<PAGE>

Section 112.   Governing Law.
               -------------

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

Section 113.   Legal Holidays.
               --------------

     In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the
Securities) payment of interest or principal (and premium, if any) need not be
made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date or Redemption Date, or at the Stated
Maturity, provided that no interest shall accrue for the period from and after
          --------
such Interest Payment Date, Redemption Date or Stated Maturity, as the case may
be.

                                  ARTICLE TWO
                                Security Forms

Section 201.   Forms Generally.
               ---------------

     The Securities of each series shall be in substantially the form set forth
in this Article, or in such other form as shall be established by or pursuant to
a Board Resolution or in one or more indentures supplemental hereto, in each
case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution of the
Securities. If the form of Securities of any series is established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the Company
Order contemplated by Section 303 for the authentication and delivery of such
Securities.

     The Trustee's certificates of authentication shall be in substantially the
form set forth in this Article.

     The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any

                                      16
<PAGE>

other manner, all as determined by the officers executing such Securities, as
evidenced by their execution of such Securities.

Section 202.   Form of Face of Security.
               ------------------------

     [Insert any legend required by the Internal Revenue Code and the
      ---------------------------------------------------------------
regulations thereunder.]
----------------------

                             THE MEAD CORPORATION

No.                                                               $
    ---------                                                       --------

     THE MEAD CORPORATION, a corporation duly organized and existing under the
laws of the State of Ohio (herein called the "Company," which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to ..........................................,
or registered assigns, the principal sum of ..................
.................... Dollars on ........................... [if the Security is
                                                            ------------------
to bear interest prior to Maturity, insert --, and to pay interest thereon from
------------------------------------------
............. or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, semi-annually on .......... and ............ in
each year, commencing ............, at the rate of ......% per annum, until the
principal hereof is paid or made available for Payment [if applicable,
                                                        -------------
insert-- , and (to the extent that the payment of such interest shall be legally
------
enforceable) at the rate of ......% per annum on any overdue principal and
premium and on any overdue installment of interest]. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the ............ or
............ (whether or not a Business Day), as the case may be, next preceding
such Interest Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities of this
series not less than 10 days prior to such Special Record Date, or be paid at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities of this series may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture].

                                      17
<PAGE>

     [If the Security is not to bear interest prior to Maturity, insert--The
      ---------------------------------------------------------  ------
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal of this Security shall bear
interest at the rate of ....% per annum (to the extent that the payment of such
interest shall be legally enforceable), which shall accrue from the date of such
default in payment to the date payment of such principal has been made or duly
provided for. Interest on any overdue principal shall be payable on demand. Any
such interest on any overdue principal that is not so paid on demand shall bear
interest at the rate of .....% per annum (to the extent that the payment of such
interest shall be legally enforceable), which shall accrue from the date of such
demand for payment to the date payment of such interest has been made or duly
provided for, and such interest shall also be payable on demand.]

     Payment of the principal of (and premium, if any) and [if applicable
                                                            -------------
insert -- any such] interest on this Security will be made at the office or
------
agency of the Company maintained for that purpose in .........., in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts [if applicable, insert -- ;
                                                -------------  ------
provided, however, that at the option of the Company payment of interest may be
--------  -------
made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register].

     Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

     Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

     IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.

Dated:

                                               THE MEAD CORPORATION

                                               By _________________

Attest:

__________________

                                    18

<PAGE>

Section 203.   Form of Reverse of Security.
               ---------------------------

     This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of February   , 1993 (herein called the
"Indenture"), between the Company and The First National Bank of Chicago, as
Trustee (herein called the "Trustee," which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof[, limited in aggregate principal amount to
$....... ].

     [If applicable, insert -- The Securities of this series are subject to
      -------------  ------
redemption upon not less than 30 days' notice by mail, [if applicable, insert --
                                                        ---------------------
(1) on ........ in any year commencing with the year ........ and ending with
the year ........ through operation of the sinking fund for this series at a
Redemption Price equal to 100% of the principal amount, and (2)] at any time [on
or after ......., 19..], as a whole or in part, at the election of the Company,
at the following Redemption Prices (expressed as percentages of the principal
amount): If redeemed [on or before ............, ___%, and if redeemed] during
the 12-month period beginning............. of the years indicated,

                        Redemption                                   Redemption
Year                       Price                 Year                   Price
----                       -----                 ----                   -----

and thereafter at a Redemption Price equal to .......% of the principal amount,
together in the case of any such redemption [if applicable, insert --(whether
                                             -------------  ------
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant

                                      19
<PAGE>

Record Dates referred to on the face hereof, all as provided in the Indenture.]

     [If applicable, insert -- The Securities of this series are subject to
      ---------------------
redemption upon not less than 30 days' notice by mail, (1) on ............. in
any year commencing with the year .... and ending with the year .... through
operation of the sinking fund for this series at the Redemption Prices for
redemption through operation of the sinking fund (expressed as percentages of
the principal amount) set forth in the table below, and (2) at any time [on or
after .............], as a whole or in part, at the election of the Company, at
the Redemption Prices for redemption otherwise than through operation of the
sinking fund (expressed as percentages of the principal amount) set forth in the
table below: If redeemed during the 12-month period beginning ............ of
the years indicated,

                           Redemption Price
                            For Redemption               Redemption Price For
                           Through Operation             Redemption Otherwise
                                of the                  Than Through Operation
Year                         Sinking Fund                of the Sinking Fund
----                       -----------------            ----------------------

and thereafter at a Redemption Price equal to ......% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]

     [Notwithstanding the foregoing, the Company may not, prior to ...........,
redeem any Securities of this series as contemplated by [Clause (2) of] the
preceding paragraph as a part of, or in anticipation of, any refunding operation
by the application, directly or indirectly, of moneys borrowed having an
interest cost to the Company (calculated in accordance with generally accepted
financial practice) of less than .......% per annum.]

                                      20
<PAGE>

     [The sinking fund for this series provides for the redemption on ....... in
each year beginning with the year ....... and ending with the year ....... of
[not less than $ ....... ("mandatory sinking fund") and not more than ("optional
sinking fund")] $ ....... aggregate principal amount of Securities of this
series. Securities of this series acquired or redeemed by the Company otherwise
than through [mandatory] sinking fund payments may be credited against
subsequent [mandatory] sinking fund payments otherwise required to be made [in
the inverse order in which they become due].]

     [If the Security is subject to redemption, insert -- In the event of
      ------------------------------------------------
redemption of this Security in part only, a new Security or Securities of this
series and of like tenor for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.]

     [The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness of the Securities of this series and (b) certain restrictive
covenants and other provisions, in each case upon compliance by the Company with
certain conditions set forth therein, which provisions apply to the Securities
of this series.]

     [If the Security is not an Original Issue Discount Security, insert -- If
      ------------------------------------------------------------------
an Event of Default with respect to Securities of this series shall occur and be
continuing, the principal of the Securities of this series may be declared due
and payable in the manner and with the effect provided in the Indenture.]

     [If the Security is an Original Issue Discount Security, insert -- If an
      --------------------------------------------------------------
Event of Default with respect to Securities of this series shall occur and
be continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to -- insert formula for determining the
                                            ----------------------------------
amount. Upon payment (i) of the amount of principal so declared due and payable
------
and (ii) of interest on any overdue principal and overdue interest (in each case
to the extent that the payment of such interest shall be legally enforceable),
all of the Company's obligations in respect of the payment of the principal of
and interest, if any, on the Securities of this series shall terminate.]

     The Indenture permits, with certain exceptions as therein provided, the
 amendment thereof and the modification of the rights and obligations of the
 Company and the rights of the Holders of the Securities of each series to be
 affected under the Indenture at any time by the Company and the Trustee with
 the consent of the Holders of 66-2/3% in principal amount of the Securities at
 the time Outstanding of each series to be

                                      21
<PAGE>

affected. The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such series,
to waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange therefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security.

     No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and interest
on this Security at the times, place and rate, and in the coin or currency,
herein prescribed.

     As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registerable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company in any place where the principal of (and premium, if any)
and interest on this Security are payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities of this series
and of like tenor, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.

     The Securities of this series are issuable only in registered form without
coupons in denominations of $..... and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.

     No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

     Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for

                                    22
<PAGE>

all purposes, whether or not this Security be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.

     All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.

Section 204.  Form of Trustee's Certificate of Authentication.
              -----------------------------------------------

     This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.

                                     THE FIRST NATIONAL BANK OF CHICAGO,
                                     As Trustee

                                     By
                                       ---------------------------------
                                       Authorized Officer

                                 ARTICLE THREE

                                The Securities

Section 301. Amount Unlimited; Issuable in Series.
             ------------------------------------

     The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.

     The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section 303,
set forth, or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any series,

          (1) the title of the Securities of the series (which shall distinguish
     the Securities of the series from Securities of any other series);

          (2) any limit upon the aggregate principal amount of the Securities of
     the series which may be authenticated and delivered under this Indenture
     (except for Securities authenticated and delivered upon registration of
     transfer of, or in exchange for, or in lieu of, other Securities of the
     series pursuant to Section 304, 305, 306, 906 or 1107 and except for any
     Securities which, pursuant to Section 303, are deemed never to have been
     authenticated and delivered hereunder);

                                      23
<PAGE>

          (3) the date or dates on which the principal of the Securities of the
     series is payable;

          (4) the rate or rates at which the Securities of the series shall bear
     interest, if any, the date or dates from which such interest shall accrue,
     the Interest Payment Dates on which any such interest shall be payable and
     the Regular Record Date for any interest payable on any Interest Payment
     Date;

          (5) the place or places where the principal of (and premium, if
     any) and interest on Securities of the series shall be payable;

          (6) the period or periods within which, the price or prices at
     which and the terms and conditions upon which Securities of the series may
     be redeemed, in whole or in part, at the option of the Company;

          (7) the obligation, if any, of the Company to redeem or purchase
     Securities of the series pursuant to any sinking fund or analogous
     provisions or at the option of a Holder thereof and the period or periods
     within which, the price or prices at which and the terms and conditions
     upon which Securities of the series shall be redeemed or purchased, in
     whole or in part, pursuant to such obligation;

          (8) the denominations in which Registered Securities of the series, if
     any, shall be issuable, if other than denominations of $1,000 and any
     integral multiple thereof, and the denominations in which Bearer Securities
     of the series, if any, shall be issuable if other than the denomination of
     $5,000;

          (9) if other than the principal amount thereof, the portion of the
     principal amount of Securities of the series which shall be payable upon
     declaration of acceleration of the Maturity thereof pursuant to Section
     502;

          (10) the application, if any, of either or both of Section 1302 and
     Section 1303 to the Securities of the series;

          (11) whether Bearer Securities of the series are to be issuable and,
     if so, whether Registered Securities of the series are also to be issuable;

          (12) if Bearer Securities of the series are to be issuable, (x)
     whether interest in respect of any portion of a temporary Security in
     global form (representing all

                                      24
<PAGE>

     of the Outstanding Bearer Securities of the series) payable in respect of
     any Interest Payment Date prior to the exchange of such temporary Security
     for definitive Securities of the series shall be paid to any clearing
     organization with respect to the portion of such temporary Security held
     for its account and, in such event, the terms and conditions (including any
     certification requirements) upon which any such interest payment received
     by a clearing organization will be credited to the Persons entitled to
     interest payable on such Interest Payment Date, and (y) the terms upon
     which interests in such temporary Security in global form may be exchanged
     for interests in a permanent Global Security or for definitive Securities
     of the series and the terms upon which interests in a permanent Global
     Security, if any, may be exchanged for definitive Securities of the series;

          (13) whether the Securities of the series shall be issued in whole or
     in part in the form of one or more Global Securities and, in such case, the
     Depositary for such Global Security or Securities;

          (14) if other than Dollars, the currency of denomination of the
     Securities of any series, which may be in Dollars, any Foreign Currency or
     any composite currency, including but not limited to the ECU, and, if such
     currency of denomination is a composite currency other than the ECU, the
     agency or organization, if any, responsible for overseeing such composite
     currency;

          (15) if other than Dollars, the currency or currencies in which
     payment of the principal of (and premium, if any) and interest on the
     Securities of the series will be made, and the currency or currencies, if
     any, in which payment of the principal of (and premium, if any) or the
     interest on Registered Securities of the series, at the election of each of
     the Holders thereof, may also be payable, and the periods within which and
     the terms and conditions upon which such election is to be made, the manner
     in which the exchange rate with respect to such payment shall be determined
     and the agent appointed by the Company in connection with the determination
     of the exchange rate, and whether Section 312 will be applicable to
     Securities of the Series, and the manner of determining the equivalent
     thereof in Dollars for purposes of the definition of "Outstanding" in
     Section 101;

          (16) if the amount of payments of principal of (and premium, if any)
     or interest on the Securities of

                                      25
<PAGE>

     the series may be determined with reference to an index, the manner in
     which such amounts shall be determined;

          (17) whether and under what conditions additional amounts shall be
     payable to Holders of Securities pursuant to or in a manner different from
     Section 1010; and

          (18) any other terms of the series or covenants for the benefit
     thereof (which terms or covenants shall not be inconsistent with the
     provisions of this Indenture, except as permitted by Section 901(5)).

     All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or
pursuant to the Board Resolution referred to above and (subject to Section
303) set forth, or determined in the manner provided, in the Officers'
Certificate referred to above or in any such indenture supplemental hereto.

     If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of the series.

     Securities of any particular series may be issued at various times,
with different dates on which the principal or any installment of principal
is payable, with different rates of interest, if any, or different methods
by which rates of interest may be determined, with different dates on which
such interest may be payable, with different Redemption Dates and may be
denominated in different currencies or payable in different currencies.

Section 302. Denominations.
             -------------

     Unless otherwise provided as contemplated by Section 301 with respect
to the Securities of any series, the Securities of such series shall be
issuable in denominations of $1,000 and any integral multiple thereof,
except that Bearer Securities of each series, if any, shall be issuable in
the denomination of $5,000.

Section 303. Execution, Authentication, Delivery and Dating.
             ----------------------------------------------

     The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its President or one
of its Vice Presidents, under its corporate seal reproduced thereon
attested by its Secretary or one of its Assistant Secretaries. The
signature of any of

                                      26
<PAGE>

these officers on the Securities may be manual or facsimile. Coupons shall bear
the facsimile signature of the Treasurer or any Assistant Treasurer of the
Company.

     Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.

     At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any Series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities; provided,
                                                                       ---------
however, that in connection with its original issuance, no Bearer Security
-------
(including any Security in global form that is either a Bearer Security or
exchangeable for Bearer Securities) or Security delivered in exchange for an
interest in the temporary Global Security shall be mailed or otherwise delivered
to any location in the United States; and provided further that a Bearer
Security (other than a temporary Global Security) and any Security delivered in
exchange for an interest in the temporary Global Security may be delivered, in
connection with its original issuance, only if the Person entitled to receive
such Security shall have furnished a certificate in the form set forth in
Exhibit A to this Indenture, dated no earlier than 15 days prior to (i) any
Interest Payment Date that occurs prior to the Exchange Date (as defined in
Section 304) with respect to a temporary Global Security for such Security or
(ii) the earlier of the date on which such Security is delivered or the date on
which any temporary Global Security first becomes exchangeable for such
Securities in accordance with the terms of such temporary Security or this
Indenture. If any Security is represented by a permanent Global Security then,
for the purposes of this Section and Section 304, the notation of a beneficial
owner's interest therein upon original issuance of such Security or upon
exchange of a portion of a temporary Global Security shall be deemed to be
delivery in connection with its original issuance of such beneficial owner's
interest in such permanent Global Security. To the extent authorized in or
pursuant to a Board Resolution and set forth in an Officers' Certificate, or
established in one or more indentures supplemental hereto, such Company Order
may be given by any one officer of the Company, may be electronically
transmitted, and may provide instructions as to registration of holders,
principal amounts, rates of interest, maturity dates and other matters
contemplated by such Board Resolution and Officers' Certificate or supplemental
indenture to be so instructed in respect thereof. Before

                                      27
<PAGE>

authorizing and delivering the first Securities of any series (and upon
reasonable request of the Trustee thereafter), the Company shall deliver to the
Trustee (i) the certificates called for under Sections 201 and 301 hereof and
(ii) an Opinion of Counsel described in the next sentence. If the form or terms
of the Securities of the series have been established in or pursuant to one or
more Board Resolutions as permitted by Sections 201 and 301, in authenticating
such Securities, and accepting the additional responsibilities under this
Indenture in relation to such Securities, the Trustee shall be entitled to
receive, and (subject to Section 601) shall be fully protected in relying upon,
an Opinion of Counsel stating,

          (a) if the form of such Securities has been established by or pursuant
     to Board Resolution as permitted by Section 201, that such form has been
     established in conformity with the provisions of this Indenture;

          (b) if the terms of such Securities have been established by or
     pursuant to Board Resolution as permitted by Section 301, that such terms
     have been established in conformity with the provisions of this Indenture;
     and

          (c) that such Securities, when authenticated and delivered by the
     Trustee and issued by the Company in the manner and subject to any
     conditions specified in such Opinion of Counsel, will constitute valid and
     legally binding obligations of the Company enforceable in accordance with
     their terms, subject to bankruptcy, insolvency, fraudulent transfer,
     reorganization, moratorium and similar laws of general applicability
     relating to or affecting creditors' rights and to general equity
     principles.

          If such form or terms have been so established, the Trustee shall not
be required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.

          If the Company shall establish pursuant to Section 301 that the
Securities of a series are to be issued in whole or in part in the form of one
or more Global Securities, then the Company shall execute and the Trustee shall,
in accordance with this Section and the Company Order with respect to such
series, authenticate and deliver one or more Global Securities in temporary or
permanent form that (i) shall represent and shall be denominated in an amount
equal to the aggregate principal

                                      28
<PAGE>

amount of Outstanding Securities of such series to be represented by one or more
Global Securities; (ii) shall be registered, if in registered form, in the name
of the Depositary for such Global Security or Securities or the nominee of such
Depositary; (iii) shall be delivered by the Trustee to such Depositary or
pursuant to such Depositary's instructions; and (iv) shall bear a legend
substantially to the following effect: "Unless and until it is exchanged in
whole or in part for Securities in definitive form in accordance with the
provisions of the Indenture and the terms of the Securities, this Security may
not be transferred except as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary."

     Each Depositary designated pursuant to Section 301 for a Global Security
in registered form must, at the time of its designation and at all times while
it serves as Depositary, be a clearing agency registered under the Securities
Exchange Act of 1934 and any other applicable statute or regulation.

     Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 301 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the time
of authentication of each Security of such series if such documents are
delivered at or prior to the authentication upon original issuance of the first
Security of such series to be issued.

     Each Registered Security shall be dated the date of its authentication.
Each Bearer Security shall be dated as of the date specified as contemplated by
Section 301.

     No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. Except as permitted by
Section 306 or 307, the Trustee shall not authenticate and deliver any Bearer
Security unless all appurtenant coupons for interest then matured have been
detached and cancelled. Notwithstanding the foregoing, if any Security shall
have been authenticated and delivered hereunder but never issued and sold by
the Company, and the Company shall deliver such Security to the Trustee for can-

                                      29
<PAGE>

cellation as provided in Section 309, for all purposes of this Indenture such
Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.

Section 304. Temporary Securities.
             --------------------

     Pending the preparation of definitive Securities of any series, the Company
may execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued, in
registered form or, if authorized, in bearer form with one or more coupons or
without coupons, and with such appropriate insertions, omissions, substitutions
and other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities. In the case of any series
issuable as Bearer Securities, such temporary Securities may be in global form
and shall be delivered only in compliance with the applicable conditions set
forth in Section 303.

     Except in the case of temporary Securities in global form (which shall be
exchanged in accordance with the provisions of the following paragraphs), if
temporary Securities of any series are issued, the Company will cause definitive
Securities of that series to be prepared without unreasonable delay. Except as
otherwise specified or contemplated in Section 301 with respect to a series of
Securities issuable as Bearer Securities, after the preparation of definitive
Securities of such series, the temporary Securities of such series shall be
exchangeable for definitive Securities of such series upon surrender of the
temporary Securities of such series at the office or agency of the Company
maintained pursuant to Section 1002 in a Place of Payment for such series for
the purpose of exchanges of Securities of such series, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Securities
of any series (accompanied by any unmatured coupons appertaining thereto) the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like aggregate principal amount of definitive Securities of the same
series and of like tenor of authorized denominations; provided, however, that no
                                                      --------  -------
definitive Bearer Security shall be issued in exchanged for a temporary
Registered Security.

     If temporary Securities of any series are issued in global form, any such
temporary Global Security shall, unless otherwise provided therein, be delivered
to the London office of a depositary or common depositary (the "Common
Depositary"), for the benefit of Euro-clear and CEDEL S.A. for credit to the

                                      30
<PAGE>

respective accounts of the beneficial owners of such Securities (or to such
other accounts as they may direct).

     Without unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary Global
Security of a series (the "Exchange Date"), the Company shall deliver to the
Trustee definitive Securities of that series in aggregate principal amount equal
to the principal amount of such temporary Global Security, executed by the
Company. On or after the Exchange Date such temporary Global Security shall be
surrendered by the Common Depositary to the Trustee, as the Company's agent for
such purpose, to be exchanged, in whole or from time to time in part, for
definitive Securities of that series, without charge and the Trustee shall
authenticate and deliver, in exchange for each portion of such temporary Global
Security a like aggregate principal amount of definitive Securities of the same
series of authorized denominations and of like tenor as the portion of such
temporary Global Security to be exchanged; provided, however, that, unless
                                           --------  -------
otherwise specified in such temporary Global Security, or unless interest is
payable on the temporary Global Security on an Interest Payment Date occurring
prior to the Exchange Date for Securities of such series and the certifications
described in the second succeeding paragraph hereafter is provided, upon such
presentation by the Common Depositary, such temporary Global Security is
accompanied by a certificate dated the Exchange Date or a subsequent date and
signed by Euro-clear as to the portion of such temporary Global Security held
for its account then to be exchanged and a certificate dated the Exchange Date
or a subsequent date and signed by CEDEL S.A. as to the portion of such
temporary Global Security held for its account then to be exchanged, each in the
form set forth in Exhibit B to this Indenture. The definitive Securities to be
delivered in exchange for any such temporary Global Security shall be in bearer
form, registered form, permanent global bearer form or permanent global
registered form, or any combination thereof, as specified as contemplated by
Section 301, and, if any combination thereof is so specified, as requested by
the beneficial owner thereof, provided, however that definitive Securities shall
                              --------  -------
be delivered ln exchange for a portion of a temporary Global Security only in
compliance with the requirements of Section 303.

     Unless otherwise specified in such temporary Global Security, the interest
of a beneficial owner of Securities of a series in a temporary Global Security
shall be exchanged for definitive Securities of the same series and of like
tenor following the Exchange Date upon the receipt by Euro-clear or CEDEL S.A.,
as the case may be, of a certificate in the form set forth in Exhibit A to this
Indenture, dated no earlier than 15 days prior to (i) any Interest Payment Date
that occurs prior to the Exchange Date or (ii) the Exchange Date, copies of

                                      31
<PAGE>

which certificate shall be available from the offices of Euro-clear and CEDEL
S.A., the Trustee, any Authenticating Agent appointed for such series of
Securities and each Paying Agent. Unless otherwise specified in such temporary
Global Security, any such exchange shall be made free of charge to the
beneficial owners of such temporary Global Security, except that a Person
receiving definitive Securities must bear the cost of insurance, postage,
transportation and the like in the event that such Person does not take delivery
of such definitive Securities in person at the offices of Euro-clear or CEDEL
S.A. Definitive Securities to be delivered in exchange for any portion of a
temporary Global Security shall be delivered only outside the United States.

    Until exchanged in full as hereinabove provided, the temporary Securities of
any series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of the same series and of like tenor
authenticated and delivered hereunder, except that no interest shall be payable
on a temporary Global Security on any Interest Payment Date occurring after the
Exchange Date for Securities of such series. Unless otherwise specified as
contemplated by Section 301, interest payable on a temporary Global Security on
any Interest Payment Date prior to the Exchange Date for Securities of such
series shall be payable to Euro-clear and CEDEL S.A. on such Interest Payment
Date only upon delivery by Euro-clear and CEDEL S.A. to the Trustee of a
certificate or certificates in the form set forth in Exhibit B to this
Indenture, dated no earlier than 15 days prior to the Interest Payment Date, for
credit without further interest on or after such Interest Payment Date to the
respective accounts of the Persons for which Euro-clear or CEDEL S.A., as the
case may be, holds such temporary Global Security on such Interest Payment Date
and who have each delivered to Euro-clear and CEDEL S.A., as the case may be, a
certificate in the form set forth in Exhibit A to this Indenture.
Notwithstanding anything to the contrary herein contained, the certifications
made pursuant to this paragraph shall satisfy the certification requirements of
the preceding two paragraphs of this Section 304 and of the tenth paragraph of
Section 305. The delivery of such certification by Persons for whom Euro-clear
or CEDEL S.A., as the case may be, holds such temporary Global Security shall
constitute irrevocable instructions by such Person to Euro-clear or CEDEL S.A.
to exchange such Person's interest in the temporary Global Security for
definitive Securities of the same series and of like tenor on the Exchange Date.
Any interest so received by Euro-clear and CEDEL S.A. and not paid as herein
provided shall be returned to the Trustee immediately prior to the expiration of
two years after such Interest Payment Date in order to be repaid to the Company
in accordance with Section 1003.

                                     32
<PAGE>

Section 305.  Registration, Registration of Transfer and Exchange.
              ---------------------------------------------------

     The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is hereby
appointed "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.

     Upon surrender for registration of transfer of any Registered Security of
any series at the office or agency of the Company maintained for such purpose,
the Company shall execute, and the Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new Registered
Securities of the same series of any authorized denomination or denominations,
of like tenor and aggregate principal amount.

     Notwithstanding any other provision of this Section, unless and until it is
exchanged in whole or in part for Securities in definitive form, a Global
Security representing all or a portion of the Securities of a series may not be
transferred except as a whole by a Depositary for such series to a nominee of
such Depositary or by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by such Depositary or any such nominee to a
successor Depositary for such series or a nominee of such successor Depositary.

     At the option of the Holder, Registered Securities of any series (except a
Global Security) may be exchanged for other Registered Securities of the same
series of any authorized denomination or denominations, of a like aggregate
principal amount, upon surrender of the Registered Securities to be exchanged at
such office or agency. Bearer Securities may not be delivered by the Trustee in
exchange for Registered Securities.

     At the option of the Holder, except as otherwise specified as contemplated
by Section 301 with respect to a Global Security issued in bearer form, Bearer
Securities of any series may be exchanged for Registered Securities (if the
Securities of such series are issuable as Registered Securities) or Bearer
Securities (if Bearer Securities of such series are issuable in more than one
denomination) of the same series, of any authorized denominations and of like
tenor and aggregate principal amount, upon surrender of the Bearer

                                      33
<PAGE>

Securities to be exchanged at any such office or agency, with all unmatured
coupons and all matured coupons in default appertaining thereto; provided,
however, delivery of a Bearer Security shall occur only outside the United
States. If the Holder of a Bearer Security is unable to produce any such
unmatured coupon or coupons in default, such exchange may be effected if the
Bearer Securities are accompanied by payment in funds acceptable to the Company
and the Trustee in an amount equal to the face amount of such missing coupon or
coupons, or the surrender of such missing coupon or coupons, may be waived by
the Company and the Trustee if there be furnished to them such security or
indemnity as they may required to save each of them and any Paying Agent
harmless. If thereafter the Holder of such Security shall surrender to any
Paying Agency any such missing coupon in respect of which such a payment shall
have been made, such Holder shall be entitled to receive the amount of such
payment; provided, however, that, except as otherwise provided in Section 1002,
         --------  -------
interest represented by coupons shall be payable only upon presentation and
surrender of those coupons at an office or agency located outside the United
States. Notwithstanding the foregoing, in case a Bearer Security of any series
is surrendered at such office or agency in exchange for a Registered Security of
the same series after the close of business at such office or agency on (i) any
Regular Record Date and before the opening of business at such office or agency
on the relevant Interest Payment Date, or (ii) any Special Record Date and
before the opening of business at such office or agency on the related date for
payment of Defaulted Interest, such Bearer Security shall be surrendered without
the coupon relating to such Interest Payment Date or proposed date of payment,
as the case may be. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.

     If at any time the Depositary for the Securities of a series notifies the
Company that it is unwilling or unable to continue as Depositary for the
Securities of such series or if at any time the Depositary for the Securities of
such series shall no longer be eligible under Section 303, the Company shall
appoint a successor Depositary with respect to the Securities of such series. If
a successor Depositary for the Securities of such series is not appointed by the
Company within 90 days after the Company receives such notice or becomes aware
of such ineligibility, the Company's election pursuant to Section 301(13) shall
no longer be effective with respect to the Securities of such series and the
Company will execute, and the Trustee, upon receipt of a Company Order for the
authentication and delivery of definitive Securities of such series, will
authenticate and deliver, Securities of such series in definitive form in an
aggregate principal amount

                                      34

<PAGE>

equal to the principal amount of the Global Security of Securities representing
such series in exchange for such Global Security or Securities.

     The Company may at any time and in its sole discretion determine that the
Securities of any series issued in the form of one or more Global Security or
Securities shall no longer be represented by such Global Security or Securities.
In such event the Company will execute, and the Trustee, upon receipt of a
Company Order for the authentication and delivery of definitive Securities of
such series, will authenticate and deliver, Securities of such series in
definitive form and in an aggregate principal amount equal to the principal
amount of the Global Security or Securities representing such series in exchange
for such Global Security or Securities.

     If (a) there shall have occurred and be continuing an Event of Default or
an event which, with the giving of notice or lapse of time, or both, would
constitute an Event of Default with respect to a series of Securities issued in
the form of one or more Global Securities, or (b) if specified by the Company
pursuant to Section 301 with respect to a series of Securities, the Depositary
for such series of Securities may surrender a Global Security for such series of
Securities in exchange in whole or in part for Securities of such series in
definitive form, then the Company shall execute, and the Trustee shall
authenticate and delivery, without service charge:

          (i) to each Person specified by such Depositary a new Security or
     Securities of the same series, of any authorized denomination as requested
     by such Person in aggregate principal amount equal to and in exchange for
     such Person's beneficial interest in the Global Security; and

          (ii) to such Depositary a new Global Security in a denomination equal
     to the difference, if any, between the principal amount of the surrendered
     Global Security and the aggregate principal amount of Securities delivered
     to Holders thereof.

     In any exchange provided for in any of the preceding three paragraphs, the
Company will execute and the Trustee will authenticate and deliver Securities
(a) in definitive registered form in authorized denominations, if the Securities
of such series are issuable as Registered Securities, (b) in definitive bearer
form in authorized denominations, with coupons attached, if the Securities of
such series are issuable as Bearer Securities or (c) as either Registered or
Bearer Securities, if the Securities of such series are issuable in either form;
provided, however, that no definitive Bearer Security shall be delivered in
exchange for a temporary Global

                                     35

<PAGE>

Security unless the Company or its agent shall have received from the person
entitled to receive the definitive Bearer Security a certificate substantially
in the form set forth in Exhibit A hereto in accordance with Section 303; and
provided further that delivery of a Bearer Security shall occur only outside the
United States; and provided further that no definitive Bearer Security will be
issued if the Company has reason to know that such certificate is false.

     Upon the exchange of a Global Security for Securities in definitive form,
such Global Security shall be cancelled by the Trustee. Registered Securities
issued in exchange for a Global Security pursuant to this Section shall be
registered in such names and in such authorized denominations as the Depositary
for such Global Security, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall deliver
Bearer Securities issued in exchange for a Global Security pursuant to this
Section to the persons, and in such authorized denominations, as the Depositary
for such Global Security, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee; provided, however, that
no definitive Bearer Security shall be delivered in exchange for a temporary
Global Security except in accordance with the delivery of a certificate required
by Section 304; and provided further that delivery of a Bearer Security shall
occur only outside the United States; and provided further that no definitive
Bearer Security will be issued if the Company has reason to know that such
certificate is false.

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

     Every Security presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar duly executed, by the Holder thereof or
his attorney duly authorized in writing.

     No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906 or 1107 not involving any transfer.

                                      36
<PAGE>

     The Company shall not be required during a period beginning at the opening
of business 15 days before the day of the mailing of a notice of redemption of
Securities of that series selected for redemption under Section 1103 and ending
at the close of business on the day of such mailing, (i) to issue, register the
transfer of or exchange Securities of any series or (ii) to register the
transfer of or exchange any Security so selected for redemption in whole or in
part, or (iii) to exchange any Bearer Security so selected for redemption except
that such a Bearer Security may be exchanged for a Registered Security of that
series (if the Securities of such series are issuable as Registered Securities),
provided that such Registered Security shall be simultaneously surrendered for
redemption with written instruction for payment consistent with the provisions
of this Indenture.

Section 306. Mutilated, Destroyed, Lost and Stolen Securities.
             ------------------------------------------------

     If any mutilated Security is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Security of the same series and of like tenor and principal amount and
bearing a number not contemporaneously outstanding.

     If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.

     In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security; provided, however, that
                                                      --------  -------
payment of principal of (and premium, if any) and any interest on Bearer
Securities shall, except as otherwise provided in Section 1002, be payable only
at an office or agency located outside the United States; and provided, further,
that, with respect to any such coupons, interest represented thereby (but not
any additional amounts payable as provided in Section 1010), shall be payable
only upon presentation and surrender of the coupons appertaining thereto.

     Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed

                                      37
<PAGE>

in relation thereto and any other expenses (including the fees and expenses of
the Trustee) connected therewith.

     Every new Security of any series issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.

     The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.

Section 307. Payment of Interest; Interest Riqhts Preserved.
             ----------------------------------------------

     Interest on any Registered Security which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid to the
Person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest. In case a Bearer Security of any series is surrendered in exchange for
a Registered Security of such series after the close of business (at an office
or agency in a Place of Payment for such series) on any Regular Record Date and
before the opening of business (at such office or agency) on the next succeeding
Interest Payment Date, such Bearer Security shall be surrendered without the
coupon relating to such Interest Payment Date and interest will not be payable
on such Interest Payment Date in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the provisions of this Indenture.

     Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:

          (1) The Company may elect to make payment of any Defaulted Interest to
     the Persons in whose names the Registered Securities of such series (or
     their respective Predecessor Securities) are registered at the close of
     business on a Special Record Date for the payment of such Defaulted
     Interest, which shall be fixed in the following

                                      38
<PAGE>

     manner. The Company shall notify the Trustee in writing of the amount of
     Defaulted Interest proposed to be paid on each Security of such series and
     the date of the proposed payment, and at the same time the Company shall
     deposit with the Trustee an amount of money equal to the aggregate amount
     proposed to be paid in respect of such Defaulted Interest or shall make
     arrangements satisfactory to the Trustee for such deposit prior to the date
     of the proposed payment, such money when deposited to be held in trust for
     the benefit of the Persons entitled to such Defaulted Interest as in this
     Clause provided. Thereupon the Trustee shall fix a Special Record Date for
     the payment of such Defaulted Interest which shall be not more than 15 days
     and not less than 10 days prior to the date of the proposed payment and not
     less than 10 days after the receipt by the Trustee of the notice of the
     proposed payment. The Trustee shall promptly notify the Company of such
     Special Record Date and, in the name and at the expense of the Company,
     shall cause notice of the proposed payment of such Defaulted Interest and
     the Special Record Date therefor to be mailed, first-class postage prepaid,
     to each Holder of Registered Securities of such series at his address as it
     appears in the Security Register, not less than 10 days prior to such
     Special Record Date. Notice of the proposed payment of such Defaulted
     Interest and the Special Record Date therefor having been so mailed, such
     Defaulted Interest shall be paid to the Persons in whose names the
     Registered Securities of such series (or their respective Predecessor
     Securities) are registered at the close of business on such Special Record
     Date and shall no longer be payable pursuant to the following Clause (2).
     In case a Bearer Security of any series is surrendered at the office or
     agency in a Place of Payment for such series in exchange for a Registered
     Security of such series after the close of business at such office or
     agency on any Special Record Date and before the opening of business at
     such office or agency on the related proposed date for payment of Defaulted
     Interest, such Bearer Security shall be surrendered without the coupon
     relating to such proposed date of payment and Defaulted Interest will not
     be payable on such proposed date of payment in respect of the Registered
     Security issued in exchange for such Bearer Security, but will be payable
     only to the Holder of such coupon when due in accordance with the
     provisions of this Indenture.

          (2) The Company may make payment of any Defaulted Interest on the
     Securities of any series in any other lawful manner not inconsistent with
     the requirements of any securities exchange on which such Securities may be
     listed, and upon such notice as may be required by such

                                      39
<PAGE>

     exchange, if, after notice given by the Company to the Trustee of the
     proposed payment pursuant to this Clause, such manner of payment shall be
     deemed practicable by the Trustee.

     Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.

Section 308. Persons Deemed Owners.
             ---------------------

     Prior to due presentment of a Registered Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of principal of (and premium,
if any) and (subject to Section 307) interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.

     Title to any Bearer Security and any coupons appertaining thereto shall
pass by delivery. The Company, the Trustee and any agent of the Company or the
Trustee may treat the bearer of any Bearer Security and the bearer of any coupon
as the absolute owner of such Bearer Security or coupon for the purpose of
receiving payment thereof or on account thereof and for all other purposes
whatsoever, whether or not such Bearer Security or coupon be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.

     Notwithstanding the foregoing, with respect to any Global Security, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by a Depositary or impair, as between a Depositary and
holders of beneficial interests in any Global Security, the operation of
customary practices governing the exercise of the rights of the Depositary as
Holder of such Global Security. None of the Company, the Trustee, any Paying
Agent or the Security Registrar will have any responsibility or liability for
any aspect of the records relating to or payments made on account of beneficial
ownership interests of a Global Security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.

                                      40
<PAGE>

Section 309. Cancellation.
             ------------

     All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Securities previously authenticated
hereunder which the Company has not issued and sold, and all Securities so
delivered shall be promptly cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section, except as expressly permitted by this Indenture. All cancelled
Securities held by the Trustee shall be disposed of as directed by a Company
Order.

Section 310. Computation of Interest.
             -----------------------

     Except as otherwise specified as contemplated by Section 301 for Securities
of any series, interest on the Securities of each series shall be computed on
the basis of a year of twelve 30-day months.

Section 311. Certification by a Person Entitled to Delivery of Bearer Security.
             -----------------------------------------------------------------

     Whenever any provision of this Indenture or a Security contemplates that
certification be given by a Person entitled to delivery of a Bearer Security,
such certification shall be provided substantially in the form of Exhibit A
hereto, with only such changes as shall be approved by the Company.

Section 312. Judgments.
             ---------
     The Company may provide, pursuant to Section 301, for the Securities of any
series that, to the fullest extent provided under applicable law, (a) the
obligation, if any, of the Company to pay the principal of (and premium, if
any) and interest on the Securities of such series and any appurtenant coupons
in a Foreign Currency, composite currency or Dollars (the "Designated Currency")
as may be specified pursuant to Section 301 is of the essence and agree that
judgments in respect of such Securities shall be given in the Designated
Currency; (b) the obligation of the Company to make payments in the Designated
Currency of the principal of (and premium, if any) and interest on such
Securities and any appurtenant coupons shall, notwithstanding any payment in any
other currency (whether pursuant to a judgment or otherwise), be

                                      41
<PAGE>

discharged only to the extent of the amount in the Designated Currency that the
Holder receiving such payment may, in accordance with normal banking procedures,
purchase with the sum paid in such other currency (after any premium and cost of
exchange) in the country of issue of the Designated Currency in the case of
Foreign Currency or Dollars or in the international banking community in the
case of a composite currency on the Business Day immediately following the day
on which such Holder receives such payment; (c) if the amount in the Designated
Currency that may be so purchased for any reason falls short of the amount
originally due, the Company shall pay such additional amounts as may be
necessary to compensate for such shortfall; and (d) any obligation of the
Company not discharged by such payment shall be due as a separate and
independent obligation and, until discharged as provided herein, shall continue
in full force and effect.

                                 ARTICLE FOUR

                          Satisfaction and Discharge

Section 401. Satisfaction and Discharge of Indenture.
             ---------------------------------------

     This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for and any right to receive additional
amounts as provided in Section 1010), and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when

          (1) either

          (A) all Securities theretofore authenticated and delivered (other than
     (i) Securities which have been destroyed, lost or stolen and which have
     been replaced or paid as provided in Section 306, (ii) Securities for whose
     payment money has theretofore been deposited in trust or segregated and
     held in trust by the Company and thereafter repaid to the Company or
     discharged from such trust, as provided in Section 1003, (iii) coupons
     appertaining to Bearer Securities surrendered in exchange for Registered
     Securities and maturing after such exchange, surrender of which is not
     required or has been waived as provided in Section 305, and (iv) coupons
     appertaining to Bearer Securities called for redemption and maturing after
     the relevant Redemption Date, surrender of which has been waived as
     provided in Section 1106) have been delivered to the Trustee for
     cancellation; or

                                      42
<PAGE>

          (B) all such Securities not theretofore delivered to the Trustee for
     cancellation

               (i) have become due and payable, or

               (ii) will become due and payable at their Stated Maturity within
     one year, or

               (iii) are to be called for redemption within one year under
     arrangements satisfactory to the Trustee for the giving of notice of
     redemption by the Trustee in the name, and at the expense, of the Company,

     and the Company, in the case of (i), (ii) or (iii) above, has deposited or
     caused to be deposited with the Trustee as trust funds in trust in an
     amount sufficient to pay and discharge the entire indebtedness on such
     Securities not theretofore delivered to the Trustee for cancellation, for
     principal (and premium, if any) and interest to the date of such deposit
     (in the case of Securities which have become due and payable) or to the
     Stated Maturity or Redemption Date, as the case may be;

          (2) the Company has paid or caused to be paid all other sums payable
     hereunder by the Company; and

          (3) the Company has delivered to the Trustee an Officers' Certificate
     and an Opinion of Counsel, each stating that all conditions precedent
     herein provided for relating to the satisfaction and discharge of this
     Indenture have been complied with.

     Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Trustee to any Authenticating Agent under Section 614 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.

Section 402. Application of Trust Money.
             --------------------------

     Subject to provisions of the last paragraph of Section 1003, all money
deposited with the Trustee pursuant to Section 401 shall be held in trust and
applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the

                                      43
<PAGE>

Trustee; but such money need not be segregated from other funds except to the
extent required by law.

                                 ARTICLE FIVE

                                   Remedies

Section 501. Events of Default.
             -----------------

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

          (1) default in the payment of any interest upon any Security of that
     series when it becomes due and payable, and continuance of such default for
     a period of 30 days; or

          (2) default in the payment of the principal of (or premium, if any,
     on) any Security of that series at its Maturity; or

          (3) default in the deposit of any sinking fund payment, when and as
     due by the terms of a Security of that series; or

          (4) default in the performance, or breach, of any covenant or warranty
     of the Company in this Indenture (other than a covenant or warranty a
     default in whose performance or whose breach is elsewhere in this Section
     specifically dealt with or which has expressly been included in this
     Indenture solely for the benefit of series of Securities other than that
     series), and continuance of such default or breach for a period of 60 days
     after there has been given, by registered or certified mail, to the Company
     by the Trustee or to the Company and the Trustee by the Holders of at least
     25% in principal amount of the Outstanding Securities of that series a
     written notice specifying such default or breach and requiring it to be
     remedied and stating that such notice is a "Notice of Default" hereunder;
     or

          (5) a default by the Company in the payment of any indebtedness for
     borrowed money (including a default with respect to Securities of any
     series other than that series), whether such indebtedness now exists or
     shall hereafter be created, whether at maturity, by call for

                                      44
<PAGE>

     redemption, by acceleration, declaration or otherwise, and any period of
     grace with respect thereto shall have expired, unless the time for payment
     shall have been effectively extended; provided, however, that, subject to
                                           -----------------
     the provisions of Sections 601 and 602, the Trustee shall not be charged
     with knowledge of any such default unless written notice thereof shall have
     been given to the Trustee at its Corporate Trust Office by the Company, by
     the holder or an agent of a holder of any such indebtedness, or by the
     trustee then acting under any indenture or other instrument under which
     such default shall have occurred, or by the holders of not less than 25% in
     principal amount of the Outstanding Securities of that series; provided,
                                                                    --------
     however, that if, prior to a declaration of acceleration of the maturity
     -------
     of the Securities of that series or the entry of judgment in favor of the
     Trustee in a suit pursuant to Section 503, such default shall be remedied
     or cured by the Company or waived by the holders of such indebtedness, then
     the Event of Default hereunder by reason thereof shall be deemed likewise
     to have been thereupon remedied, cured or waived without further action
     upon the part of either the Trustee or any of the Securityholders; or

          (6)  the entry by a court having jurisdiction in the premises of (A) a
     decree or order for relief in respect of the Company in an involuntary case
     or proceeding under any applicable Federal or State bankruptcy, insolvency,
     reorganization or other similar law or (B) a decree or order adjudging the
     Company a bankrupt or insolvent, or approving as properly filed a petition
     seeking reorganization, arrangement, adjustment or composition of or in
     respect of the Company under any applicable Federal or State law, or
     appointing a custodian, receiver, liquidator, assignee, trustee,
     sequestrator or other similar official of the Company or of any substantial
     part of its property, or ordering the winding up or liquidation of its
     affairs, and the continuance of any such decree or order for relief or any
     such other decree or order unstayed and in effect for a period of 60
     consecutive days; or

          (7)  the commencement by the Company of a voluntary case or proceeding
     under any applicable Federal or State bankruptcy, insolvency,
     reorganization or other similar law or of any other case or proceeding to
     be adjudicated a bankrupt or insolvent, or the consent by it to the entry
     of a decree or order for relief in respect of the Company in an involuntary
     case or proceeding under any applicable Federal or State bankruptcy,
     insolvency, reorganization or other similar law or to the commencement of
     any bankruptcy or insolvency case or

                                      45
<PAGE>

     proceeding against it, or the filing by it of a petition or answer or
     consent seeking reorganization or relief under any applicable Federal or
     State law, or the consent by it to the filing of such petition or to the
     appointment of or taking possession by a custodian, receiver, liquidator,
     assignee, trustee, sequestrator or other similar official of the Company or
     of any substantial part of its property, or the making by it of an
     assignment for the benefit of creditors, or the admission by it in writing
     of its inability to pay its debts generally as they become due, or the
     taking of corporate action by the Company in furtherance of any such
     action; or

          (8)  any other Event of Default provided with respect to Securities of
     that series.

Section 502.  Acceleration of Maturity; Rescission and Annulment.
              --------------------------------------------------
     If an Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then in every such case the Trustee or
the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if any of the
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount of such Securities as may be specified in the terms
thereof) of all of the Securities of that series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), and upon any such declaration such principal amount (or specified
amount) shall become immediately due and payable.

     At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if

          (1)  the Company has paid or deposited with the Trustee a sum
     sufficient to pay

               (A)  all overdue interest on all Securities of that series,

               (B)  the principal of (and premium, if any, on) any Securities of
          that series which have become due otherwise than by such declaration
          of

                                      46
<PAGE>

          acceleration and any interest thereon at the rate or rates prescribed
          therefor in such Securities,

               (C)  to the extent that payment of such interest is lawful,
          interest upon overdue interest at the rate or rates prescribed
          therefor in such Securities, and

               (D)  all sums paid or advanced by the Trustee hereunder and the
          reasonable compensation, expenses, disbursements and advances of the
          Trustee, its agents and counsel; and

          (2)  all Events of Default with respect to Securities of that series,
     other than the non-payment of the principal of Securities of that series
     which have become due solely by such declaration of acceleration, have been
     cured or waived as provided in Section 513.

No such rescission shall affect any subsequent default or impair any right
consequent thereon.

Section 503.  Collection of Indebtedness and Suits for Enforcement by Trustee.
              ---------------------------------------------------------------
     The Company covenants that if

          (1)  default is made in the payment of any interest on any Security
     when such interest becomes due and payable and such default continues for a
     period of 30 days, or

          (2)  default is made in the payment of the principal of (or premium,
     if any, on) any Security at the Maturity thereof,

the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and any premium and interest and, to the extent that
payment of such interest shall be legally enforceable, interest on any overdue
principal and premium and on any overdue interest, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.

     If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such

                                      47
<PAGE>

proceeding to judgment or final decree and may enforce the same against the
Company or any other obligor upon such Securities and collect the moneys
adjudged or decreed to be payable in the manner provided by law out of the
property of the Company or any other obligor upon such Securities, wherever
situated.

     If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.

Section 504. Trustee May File Proofs of Claim.
             --------------------------------
     In case of any judicial proceeding relative to the Company (or any other
obligor upon the Securities), its property or its creditors, the Trustee shall
be entitled and empowered, by intervention in such proceeding or otherwise, to
take any and all actions authorized under the Trust Indenture Act in order to
have claims of the Holders and the Trustee allowed in any such proceeding. In
particular, the Trustee shall be authorized to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the
same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator
or other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.

     No provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.

Section 505.  Trustee May Enforce Claims Without Possession of Securities.
              -----------------------------------------------------------
     All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any

                                      48
<PAGE>

such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Securities in respect of which such judgment has been
recovered.

Section 506. Application of Money Collected.
             ------------------------------
     Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or any premium
or interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:

          FIRST:  To the payment of all amounts due the Trustee under Section
     607; and

          SECOND:  To the payment of the amounts then due and unpaid for
     principal of and any premium and interest on the Securities in respect of
     which or for the benefit of which such money has been collected, ratably,
     without preference or priority of any kind, according to the amounts due
     and payable on such Securities for principal and any premium and interest,
     respectively. Except to the extent otherwise provided in Section 312 if
     such Section is specified as applicable to Securities of a particular
     series, the Holders of each series of Securities denominated in ECU, any
     other composite currency or a Foreign Currency and any matured coupons
     relating thereto shall be entitled to receive a ratable portion of the
     amount determined by the exchange rate agent specified pursuant to Section
     301 by converting the principal amount Outstanding of such series of
     Securities and matured but unpaid interest on such series of Securities in
     the currency in which such series of Securities is denominated into Dollars
     at the Exchange Rate as of the date of declaration of acceleration of the
     Maturity of the Securities (or, if there is no such rate on such date,
     such rate as determined by such exchange rate agent).

     Upon receipt by the Trustee of any declaration of acceleration, or
rescission and annulment thereof, with respect to Securities of a series all or
part of which is represented by a Global Security, the Trustee shall establish a
record date for determining Holders of Outstanding Securities of such

                                      49
<PAGE>

series entitled to join in such declaration of acceleration, or rescission and
annulment, as the case may be, which record date shall be at the close of
business on the day the Trustee receives such declaration of acceleration, or
rescission and annulment, as the case may be. The Holders on such record date,
or their duly designated proxies, and only such Persons, shall be entitled to
join in such declaration of acceleration, or rescission and annulment, as the
case may be, whether or not such Holders remain Holders after such record date;
provided, that unless such declaration of acceleration, or rescission and
--------
annulment, as the case may be, shall have become effective by virtue of the
requisite percentage having been obtained prior to the day which is 90 days
after such record date, such declaration of acceleration, or rescission and
annulment, as the case may be shall automatically and without further action by
any Holder be canceled and of no further effect. Nothing in this paragraph shall
prevent a Holder, or a proxy of a Holder, from giving, after expiration of such
90-day period, a new declaration of acceleration, or rescission or annulment
thereof, as the case may be, that is identical to a declaration of acceleration,
or rescission or annulment thereof, which has been cancelled pursuant to the
proviso to the preceding sentence, in which event a new record date shall be
established pursuant to the provisions of this Section 502.

Section 507.  Limitation on Suits.
              -------------------
     No Holder of any Security of any series shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless
          (l)  such Holder has previously given written notice to the Trustee of
     a continuing Event of Default with respect to the Securities of that
     series;

          (2)  the Holders of not less than 25% in principal amount of the
     Outstanding Securities of that series shall have made written request to
     the Trustee to institute proceedings in respect of such Event of Default in
     its own name as Trustee hereunder;

          (3)  such Holder or Holders have offered to the Trustee reasonable
     indemnity against the costs, expenses and liabilities to be incurred in
     compliance with such request;

          (4)  the Trustee for 60 days after its receipt of such notice, request
     and offer of indemnity has failed to institute any such proceeding; and

                                      50
<PAGE>

          (5)  no direction inconsistent with such written request has been
     given to the Trustee during such 60-day period by the Holders of a majority
     in principal amount of the Outstanding Securities of that series;

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

Section 508.  Unconditional Right of Holders to Receive Principal Premium and
              ---------------------------------------------------------------
              Interest.
              --------
     Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of (and premium, if any) and (subject to Section 307)
any interest on such Security on the Stated Maturity or Maturities expressed in
such Security (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.

Section 509.  Restoration of Rights and Remedies.
              ----------------------------------
     If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.

Section 510.  Rights and Remedies Cumulative.
              ------------------------------
     Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of Section
306, no right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment

                                      51
<PAGE>

of any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.

Section 511.  Delay or Omission Not Waiver.
              ----------------------------
     No delay or omission of the Trustee or of any Holder of any Securities to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.

Section 512.  Control by Holders.
              ------------------
     The Holders of a majority in principal amount of the Outstanding Securities
of any series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, with respect to the Securities
of such series, provided that
                --------
          (1) such direction shall not be in conflict with any rule of law or
     with this Indenture, and

          (2) the Trustee may take any other action deemed proper by the Trustee
     which is not inconsistent with such direction.

     Upon receipt by the Trustee of any such direction with respect to
Securities of a series all or part of which is represented by a Global Security,
the Trustee shall establish a record date for determining Holders of Outstanding
Securities of such series entitled to join in such direction, which record date
shall be at the close of business on the day the Trustee receives such
direction. The Holders on such record date, or their duly designated proxies,
and only such Persons, shall be entitled to join in such direction, whether or
not such Holders remain Holders after such record date; provided, that unless
                                                        --------
such majority in principal amount shall have been obtained prior to the day
which is 90 days after such record date, such direction shall automatically and
without further action by any Holder be cancelled and of no further effect.
Nothing in this paragraph shall prevent a Holder, or a proxy of a Holder, from
giving, after expiration of such 90-day period, a new direction identical to a
direction which has been canceled pursuant to the proviso to the preceding
sentence, in which event a new record date shall be established pursuant to the
provisions of this Section 512.

                                      52
<PAGE>

Section 513.  Waiver of Past Defaults.
              -----------------------
     The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default

          (1) in the payment of the principal of or any premium or interest on
     any Security of such series, or

          (2) in respect of a covenant or provision hereof which under Article
     Nine cannot be modified or amended without the consent of the Holder of
     each Outstanding Security of such series affected.

     Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.

     The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Persons entitled to waive any past default hereunder.
If a record date is fixed, the Holders on such record date, or their duly
designated proxies, and only such Persons, shall be entitled to waive any
default hereunder, whether or not such Holders remain Holders after such record
date; provided, that unless such majority in principal amount shall have been
      --------
obtained prior to the date which is 90 days after such record date, any such
waiver previously given shall automatically and without further action by any
Holder be cancelled and of no further effect.

Section 514.  Undertaking for Costs.
              ---------------------
     In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided that neither this Section nor the Trust Indenture Act
               --------
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company.

Section 515.  Waiver of Stay or Extension Laws.
              --------------------------------
     The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or

                                      53
<PAGE>

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

                                  ARTICLE SIX

                                  The Trustee

Section 601.  Certain Duties and Responsibilities.
              -----------------------------------
     The duties and responsibilities of the Trustee shall be as provided by the
Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Whether or not therein expressly so provided, every provision of this Indenture
relating to the conduct or affecting the liability of or affording protection to
the Trustee shall be subject to the provisions of this Section.

Section 602.  Notice of Defaults.
              ------------------
     If a default occurs hereunder with respect to Securities of any series, the
Trustee shall give the Holders of Securities of such series notice of such
default as and to the extent provided by the Trust Indenture Act; provided,
                                                                  --------
however, that in the case of any default of the character specified in Section
-------
501(4) with respect to Securities of such series, no such notice to Holders
shall be given until at least 30 days after the occurrence thereof. For the
purpose of this Section, the term "default" means any event which is, or after
notice or lapse of time or both would become, an Event of Default with respect
to Securities of such series.

Section 603.  Certain Rights of Trustee.
              -------------------------
     Subject to the provisions of Section 601:

          (a) the Trustee may rely and shall be protected in acting or
     refraining from acting upon any resolution, certificate, statement,
     instrument, opinion, report,

                                      54
<PAGE>

     notice, request, direction, consent, order, bond, debenture, note, other
     evidence of indebtedness or other paper or document believed by it to be
     genuine and to have been signed or presented by the proper party or
     parties;

          (b) any request or direction of the Company mentioned herein shall be
     sufficiently evidenced by a Company Request or Company Order and any
     resolution of the Board of Directors may be sufficiently evidenced by a
     Board Resolution;

          (c) whenever in the administration of this Indenture the Trustee shall
     deem it desirable that a matter be proved or established prior to taking,
     suffering or omitting any action hereunder, the Trustee (unless other
     evidence be herein specifically prescribed) may, in the absence of bad
     faith on its part, rely upon an Officers' Certificate;

          (d) the Trustee may consult with counsel and the written advice of
     such counsel or any Opinion of Counsel shall be full and complete
     authorization and protection in respect of any action taken, suffered or
     omitted by it hereunder in good faith and in reliance thereon;

          (e) the Trustee shall be under no obligation to exercise any of the
     rights or powers vested in it by this Indenture at the request or direction
     of any of the Holders pursuant to this Indenture, unless such Holders shall
     have offered to the Trustee reasonable security or indemnity against the
     costs, expenses and liabilities which might be incurred by it in compliance
     with such request or direction;

          (f) the Trustee shall not be bound to make any investigation into the
     facts or matters stated in any resolution, certificate, statement,
     instrument, opinion, report, notice, request, direction, consent, order,
     bond, debenture, note, other evidence of indebtedness or other paper or
     document, but the Trustee, in its discretion, may make such further inquiry
     or investigation into such facts or matters as it may see fit, and, if the
     Trustee shall determine to make such further inquiry or investigation, it
     shall be entitled to examine the books, records and premises of the
     Company, personally or by agent or attorney; and

          (g) the Trustee may execute any of the trusts or powers hereunder or
     perform any duties hereunder either directly or by or through agents or
     attorneys and the Trustee shall not be responsible for any misconduct or

                                      55
<PAGE>

     negligence on the part of any agent or attorney appointed with due care by
     it hereunder.

Section 604.  Not Responsible for Recitals or Issuance of Securities.
              ------------------------------------------------------
     The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee or any Authenticating Agent assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities. The Trustee or any
Authenticating Agent shall not be accountable for the use or application by the
Company of Securities or the proceeds thereof.

Section 605.  May Hold Securities.
              -------------------
     The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
608 and 613, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.

Section 606.  Money Held in Trust.
              -------------------
     Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Company.

Section 607.  Compensation and Reimbursement.
              ------------------------------
     The Company agrees

          (1)  to pay to the Trustee from time to time reasonable compensation
     for all services rendered by it hereunder (which compensation shall not be
     limited by any provision of law in regard to the compensation of a trustee
     of an express trust);

          (2)  except as otherwise expressly provided herein, to reimburse the
     Trustee upon its request for all reasonable expenses, disbursements and
     advances incurred or made by the Trustee in accordance with any provision
     of this Indenture (including the reasonable compensation and the expenses
     and disbursements of its agents and counsel), except any such expense,
     disbursement or

                                       56
<PAGE>

     advance as may be attributable to its negligence or bad faith; and

          (3) to indemnify the Trustee for, and to hold it harmless against, any
     loss, liability or expense incurred without negligence or bad faith on its
     part, arising out of or in connection with the acceptance or administration
     of the trust or trusts hereunder, including the costs and expenses of
     defending itself against any claim or liability in connection with the
     exercise or performance of any of its powers or duties hereunder.

Section 608. Disqualification; Conflicting Interests.
             ----------------------------------------
     If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.

Section 609. Corporate Trustee Required; Eligibility.
             ----------------------------------------
     There shall at all times be a Trustee hereunder which shall be a Person
that is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and surplus of at least $50,000,000 and its Corporate Trust
Office in any State of the United States. If such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Person shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.

Section 610. Resignation and Removal; Appointment of Successor.
             --------------------------------------------------
     (a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 611.

     (b) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611 shall
not have been

                                       57
<PAGE>

delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.

     (c) The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company.

     (d) If at any time:

          (1) the Trustee shall fail to comply with Section 608 after written
     request therefor by the Company or by any Holder who has been a bona fide
     Holder of a Security for at least six months, or

          (2) the Trustee shall cease to be eligible under Section 609 and shall
     fail to resign after written request therefor by the Company or by any such
     Holder, or

          (3) the Trustee shall become incapable of acting or shall be adjudged
     a bankrupt or insolvent or a receiver of the Trustee or of its property
     shall be appointed or any public officer shall take charge or control of
     the Trustee or of its property or affairs for the purpose of
     rehabilitation, conservation or liquidation,

then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all securities, or (ii) subject to Section 514, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.

     (e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with respect
to the Securities of one or more series, the Company, by a Board Resolution,
shall promptly appoint a successor Trustee or Trustees with respect to the
Securities of that or those series (it being understood that any such successor
Trustee may be appointed with respect to the Securities of one or more or all of
such series and that at any time there shall be only one Trustee with respect to
the Securities of any particular series) and shall comply with the applicable
requirements of Section 611. If, within one year after such resignation, removal
or incapability, or the occurrence of such vacancy, a successor Trustee with
respect to

                                       58
<PAGE>

the Securities of any Series shall be appointed by Act of the Holders of a
majority in principal amount of the Outstanding Securities of such series
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment in accordance
with the applicable requirements of Section 611, become the successor Trustee
with respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee with respect
to the Securities of any Series shall have been so appointed by the Company or
the Holders and accepted appointment in the manner required by Section 611, any
Holder who has been a bona fide Holder of a Security of such series for at least
six months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.

     (f) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series to all Holders
of Securities of such series in the manner provided in Section 106. Each notice
shall include the name of the successor Trustee with respect to the Securities
of such series and the address of its Corporate Trust Office.

Section 611. Acceptance of Appointment by Successor.
             ---------------------------------------
     (a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.

     (b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such

                                       59
<PAGE>

appointment and which (1) shall contain such provisions as shall be necessary or
desirable to transfer and confirm to, and to vest in, each successor Trustee all
the rights, powers, trusts and duties of the retiring Trustee with respect to
the Securities of that or those series to which the appointment of such
successor Trustee relates, (2) if the retiring Trustee is not retiring with
respect to all Securities, shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
as to which the retiring Trustee is not retiring shall continue to be vested in
the retiring Trustee, and (3) shall add to or change any of the provisions of
this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.

     (c) Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in
paragraph (a) and (b) of this Section, as the case may be.

     (d) No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.

Section 612. Merger, Conversion, Consolidation or Succession to Business.
             ------------------------------------------------------------
     Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the

                                       60
<PAGE>

corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such corporation shall be otherwise qualified and eligible
under this Article, without the execution or filing of any paper or any further
act on the part of any of the parties hereto. In case any Securities shall have
been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the Securities so authenticated with
the same effect as if such successor Trustee had itself authenticated such
Securities.

Section 613. Preferential Collection of Claims Against Company.
             --------------------------------------------------
     If and when the Trustee shall be or become a creditor of the Company (or
any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).

Section 614. Appointment of Authenticating Agent.
             ------------------------------------
     The Trustee may appoint an Authenticating Agent or Agents with respect to
one or more series of Securities which shall be authorized to act on behalf of
the Trustee to authenticate Securities of such series issued upon original issue
and upon exchange, registration of transfer or partial redemption thereof or
pursuant to Section 306, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall

                                       61
<PAGE>

cease to be eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section.

     Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.

     An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.

     The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 607.

     If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:

                                       62
<PAGE>

     This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.

                                         THE FIRST NATIONAL BANK OF CHICAGO,
                                         As Trustee

                                         By                                  ,
                                             --------------------------------
                                             As Authenticating Agent

                                         By
                                             --------------------------------
                                             Authorized Officer

                                 ARTICLE SEVEN

               Holders' Lists and Reports by Trustee and Company

Section 701. Company to Furnish Trustee Names and Addresses of Holders.
             ----------------------------------------------------------
     The Company will furnish or cause to be furnished to the Trustee

     (a) semi-annually, not later than January 15 and July 15 in each year, a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders as of the preceding January 1 or July 1, as the case
may be, and

     (b) at such other times as the Trustee may request in writing, within 30
days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished;

excluding from any such list names and addresses received by the Trustee in its
---------
capacity as Security Registrar.

     The Trustee shall preserve for at least two years the names and addresses
of Holders of Bearer Securities filed with the Trustee pursuant to Section
703(b).

Section 702. Preservation of Information; Communications to Holders.
             -------------------------------------------------------
     (a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar.

                                       63
<PAGE>

The Trustee may destroy any list furnished to it as provided in Section 701 upon
receipt of a new list so furnished.

     (b) The rights of the Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided by the
Trust Indenture Act.

     (c) Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.

Section 703. Reports by Trustee.
             ------------------

     (a) The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto.

     (b) Reports pursuant to this Section shall be transmitted by mail:

          (1)  to all Holders of Registered Securities, as the names and
               addresses of such Holders appear in the Security Register;

          (2)  to such Holders of Bearer Securities as have, within the two
               years preceding such transmission, filed their names and
               addresses with the Trustee for that purpose; and

          (3)  except in the case of reports pursuant to Subsection (b) of this
               Section, to each Holder of a Security whose name and address is
               preserved at the time by the Trustee, as provided in Section
               702(a).

     (c) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.

Section 704. Reports by Company.
             ------------------

     The Company shall file with the Trustee and the Commission, and transmit to
Holders, such information,

                                       64
<PAGE>

documents and other reports, and such summaries thereof, as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant to such Act and, as applicable, Section 703(b); provided that any such
                                                         --------
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 shall be
filed with the Trustee within 15 days after the same is so required to be filed
with the Commission.

                                 ARTICLE EIGHT

             Consolidation, Merger, Conveyance, Transfer or Lease

Section 801. Company May Consolidate, Etc., Only on Certain Terms.
             ----------------------------------------------------

     The Company shall not, and will not permit any Subsidiary to, consolidate
with or merge into any other corporation or convey, transfer or lease its
properties and assets substantially as an entirety to any Person, and the
Company shall not permit any Person to consolidate with or merge into the
Company or any Subsidiary or convey, transfer or lease its properties and assets
substantially as an entirety to the Company or any Subsidiary, unless:

          (1) in case the Company shall consolidate with or merge into another
     corporation or convey, transfer or lease its properties and assets
     substantially as an entirety to any Person, the corporation formed by
     such consolidation or into which the Company is merged or the Person which
     acquires by conveyance or transfer, or which leases, the properties and
     assets of the Company substantially as an entirety shall be a corporation
     organized and existing under the laws of the United States of America, any
     State thereof or the District of Columbia and shall expressly assume, by an
     indenture supplemental hereto, executed and delivered to the Trustee, in
     form satisfactory to the Trustee, the due and punctual payment of the
     principal of (and premium, if any) and interest on all the Securities
     (including all additional amounts, if any, payable pursuant to Section
     1010) and the performance of every covenant of this Indenture on the part
     of the Company to be performed or observed;

          (2) immediately after giving effect to such transaction and treating
     any indebtedness which becomes an obligation of the Company or a Subsidiary
     as a result of such transaction as having been incurred by the Company or
     such Subsidiary at the time of such transaction, no Event of Default, and
     no event which,

                                       65
<PAGE>

     after notice or lapse of time or both, would become an Event of Default,
     shall have happened and be continuing;

          (3) if, as a result of any such consolidation or merger or such
     conveyance, transfer or lease, any Principal Property of the Company or of
     any Subsidiary, or any indebtedness of or equity securities of any
     Subsidiary or Affiliate (but not including any such indebtedness and equity
     securities or any other property not owned by the Company or a Subsidiary
     immediately prior to any such consolidation, merger, conveyance, transfer
     or lease) would become subject to a mortgage, pledge, lien, security
     interest or other encumbrance which would not be permitted by this
     Indenture, the Company or such successor corporation or Person, as the case
     may be, shall take such steps as shall be necessary effectively to secure
     the Securities equally and ratably with (or prior to) all indebtedness
     secured thereby; and

          (4) the Company has delivered to the Trustee an Officers' Certificate
     and an Opinion of Counsel, each stating that such consolidation, merger,
     conveyance, transfer or lease and, if a supplemental indenture is required
     in connection with such transaction, such supplemental indenture comply
     with this Article and that all conditions precedent herein provided for
     relating to such transactions have been complied with.

Section 802. Successor Substituted.
             ---------------------

     Upon any consolidation of the Company with, or merger of the Company into,
any other Person or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety in accordance with Section
801, the successor Person formed by such consolidation or into which the Company
is merged or to which such conveyance, transfer or lease is made shall succeed
to, and be substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such successor Person
had been named as the Company herein, and thereafter, except in the case of a
lease, the predecessor Person shall be relieved of all obligations and covenants
under this Indenture and the Securities.

                                       66
<PAGE>

                                 ARTICLE NINE

                            Supplemental Indentures

Section 901. Supplemental Indentures Without Consent of Holders.
             --------------------------------------------------

     Without the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee,
for any of the following purposes:

          (1) to evidence the succession of another Person to the Company and
     the assumption by any such successor of the covenants of the Company herein
     and in the Securities; or

          (2) to add to the covenants of the Company for the benefit of the
     Holders of all or any series of Securities (and if such covenants are to be
     for the benefit of less than all series of Securities, stating that such
     covenants are expressly being included solely for the benefit of such
     series) or to surrender any right or power herein conferred upon the
     Company; or

          (3) to add any additional Events of Default; or

          (4) to add to or change any of the provisions of this Indenture to
     provide that Bearer Securities may be registrable as to principal, to
     change or eliminate any restrictions on the payment of principal (or
     premium, if any) on Registered Securities or of principal (or premium, if
     any) or any interest on Bearer Securities, to permit Registered Securities
     to be exchanged for Bearer Securities, provided any such action shall not
     adversely affect the interests of the Holders of Securities of any series
     or any related coupons in any material respect; or

          (5) to add to, change or eliminate any of the provisions of this
     Indenture in respect of one or more series of Securities, provided that any
                                                               --------
     such addition, change or elimination (i) shall neither (A) apply to any
     Security of any series created prior to the execution of such supplemental
     indenture and entitled to the benefit of such provision nor (B) modify the
     rights of the Holder of any such Security with respect to such provision or
     (ii) shall become effective only when there is no such Security
     Outstanding; or

          (6) to secure the Securities pursuant to the requirements of Section
     1006 or otherwise; or

                                       67
<PAGE>

          (7) to establish the form or terms of Securities of any series as
     permitted by Sections 201 and 301; or

          (8) to evidence and provide for the acceptance of appointment
     hereunder by a successor Trustee with respect to the Securities of one or
     more series and to add to or change any of the provisions of this Indenture
     as shall be necessary to provide for or facilitate the administration of
     the trusts hereunder by more than one Trustee, pursuant to the requirements
     of Section 611(b); or

          (9) to cure any ambiguity, to correct or supplement any provision
     herein which may be inconsistent with any other provision herein, or to
     make any other provisions with respect to matters or questions arising
     under this Indenture, provided that such action pursuant to this clause (9)
                           --------
     shall not adversely affect the interests of the Holders of Securities of
     any series in any material respect.

Section 902. Supplemental Indentures with Consent of Holders.
             -----------------------------------------------

     With the consent of the Holders of not less than 66-2/3% in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
                                                           -----------------
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,

          (1) change the Stated Maturity of the principal of, or any instalment
     of principal of or interest on, any Security, or reduce the principal
     amount thereof or the rate of interest thereon or any premium payable upon
     the redemption thereof, or reduce the amount of the principal of an
     Original Issue Discount Security that would be due and payable upon a
     declaration of acceleration of the Maturity thereof pursuant to Section
     502, or change any Place of Payment where, or the coin or currency in
     which, any Security or any premium or interest thereon is payable, or
     impair the right to institute suit for the enforcement of any such payment
     on or after the Stated Maturity thereof (or, in the case of redemption, on
     or after the Redemption Date), or change any obligation of

                                       68
<PAGE>

     the Company to pay additional amounts pursuant to Section 1010 (except as
     contemplated by Sections 301 or 801(1) or permitted by Section 901(1)), or

          (2) reduce the percentage in principal amount of the Outstanding
     Securities of any series, the consent of whose Holders is required for any
     such supplemental indenture, or the consent of whose Holders is required
     for any waiver (of compliance with certain provisions of this Indenture or
     certain defaults hereunder and their consequences) provided for in this
     Indenture, or reduce the requirements of Section 1404 of quorum or voting,
     or

          (3) modify any of the provisions of this Section, Section 513 or
     Section 1009, except to increase any such percentage or to provide that
     certain other provisions of this Indenture cannot be modified or waived
     without the consent of the Holder of each Outstanding Security affected
     thereby, provided, however, that this clause shall not be deemed to require
              -----------------
     the consent of any Holder with respect to changes in the references to "the
     Trustee" and concomitant changes in this Section and Section 1009, or the
     deletion of this proviso, in accordance with the requirements of Sections
     611(b) and 901(8).

A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.

     It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.

     The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Persons entitled to consent to any indenture
supplemental hereto. If a record date is fixed, the Holders on such record date
or their duly designated proxies, and only such Persons, shall be entitled to
consent to such supplemental indenture, whether or not such Holders remain
Holders after such record date; provided, that unless such consent shall have
                                --------
become effective by virtue of the requisite percentage having been obtained
prior to the date which is 90 days after such record date, any such consent
previously given shall automatically and without further action by any Holder be
cancelled and of no further effect.

                                      69
<PAGE>

Section 903. Execution of Supplemental Indentures.
             ------------------------------------

     In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.

Section 904. Effect of Supplemental Indentures.
             ---------------------------------

     Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.

Section 905. Conformity with Trust Indenture Act.
             -----------------------------------

     Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.

Section 906. Reference in Securities to Supplemental Indentures.
             --------------------------------------------------

     Securities of any series authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series.

                                  ARTICLE TEN

                                   Covenants

Section 1001. Payment of Principal, Premium and Interest.
              ------------------------------------------

     The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the

                                      70
<PAGE>

principal of (and premium, if any) and interest on the Securities of that series
in accordance with the terms of the Securities and this Indenture. Any interest
due on Bearer Securities on or before Maturity, other than additional amounts,
if any, payable as provided in Section 1010 in respect of principal of (or
premium, if any, on) such a Security, shall be payable only upon presentation
and surrender of the several coupons for such interest installments as are
evidenced thereby as they severally mature.

Section 1002. Maintenance of Office or Agency.
              -------------------------------

     The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. If Securities of a series are issuable as Bearer Securities, the
Company will maintain, subject to any laws or regulations applicable thereto,
(a) an office or agency in a Place of Payment for such series that is located
outside the United States where Securities of such series and the related
coupons may be presented and surrendered for payment (including payment of any
additional amounts payable on Securities of such series pursuant to Section
1010); provided, however, that if the Securities of such series are listed on
the London Stock Exchange or the Luxembourg Stock Exchange or any other stock
exchange located outside the United States and such stock exchange shall so
require, the Company will maintain a Paying Agent in London or Luxembourg or any
other required city located outside the United States, as the case may be, so
long as the Securities of such series are listed on such exchange, and (B) an
office or agency in a Place of Payment for such series that is located outside
the United States where any Registered Securities of such series may be
surrendered for registration of transfer, where securities of that series may be
surrendered for exchange and where notices and demands to or upon the Company in
respect of the Securities of that series and the Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands; provided that Bearer
                                                     --------
Securities of that series and the related coupons may be presented and
surrendered for payment (including payment of any additional amounts payable on

                                      71
<PAGE>

Bearer Securities of that series pursuant to Section 1010) at the place
specified for the purpose pursuant to Section 301 or, if no such place is
specified, at the main office of the Trustee in London.

     No payment of principal of or premium or interest on Bearer Securities
shall be made at any office or agency of the Company in the United States or by
check mailed to any address in the United States or by transfer to an account
maintained with a bank located in the United States; provided, however, that, if
the Securities are denominated and payable in Dollars, payment of principal of
and any premium and interest (including any additional amounts payable in
respect thereof pursuant to Section 1010) on any Bearer Security shall be made
in Dollars at the Corporate Trust Office of the Trustee in Chicago, Illinois if
(but only if) payment of the full amount of such principal, premium, interest or
additional amounts at all offices outside the United States maintained for the
purpose by the Company in accordance with this Indenture is illegal or
effectively precluded by exchange controls or other similar restrictions.

     The Company may also from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
              -----------------
any manner relieve the Company of its obligation to maintain an office or agency
in each Place of Payment for Securities of any series for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.

Section 1003. Money for Securities Payments to Be Held in Trust.
              --------------------------------------------------
     If the Company shall at any time act as its own Paying Agent with respect
to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest on any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) or interest
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its
action or failure so to act.

     Whenever the Company shall have one or more Paying Agents for any series of
Securities, it will, prior to each due date of the principal of (and premium, if
any) or interest on any Securities of that series, deposit with a Paying Agent a
sum

                                       72
<PAGE>

sufficient to pay such amount such sum to be held as provided by the Trust
Indenture Act, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its action or failure so to act.

     The Company will cause each Paying Agent for any series of Securities other
than the Trustee to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee, subject to the provisions of
this Section, that such Paying Agent will (i) comply with the provisions of the
Trust Indenture Act applicable to it as a Paying Agent and (ii) during the
continuance of any default by the Company (or any other obligor upon the
Securities of that series) in the making of any payment in respect of the
Securities of that series, and upon the written request of the Trustee,
forthwith pay to the Trustee all sums held in trust by such Paying Agent for
payment in respect of the Securities of that series.

     The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.

     Any money deposited with the Trustee or any Paying Agent, or received by
the Trustee (or another trustee satisfying the requirements of Section 609) in
respect of U.S. Government Obligations deposited with the Trustee (or such other
trustee) pursuant to Section 1304, or then held by the Company, in trust for the
payment of the principal of (and premium, if any) or interest on any Security of
any series and remaining unclaimed for two years after such principal (and
premium, if any) or interest has become due and payable shall be paid to the
Company on Company Request, or (if then held by the Company) shall be discharged
from such trust; and the Holder of such Security shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent,
       -----------------
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in an Authorized Newspaper of general
circulation in the Borough of Manhattan, The City of New York, and each Place of
Payment, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication, any

                                      73
<PAGE>

unclaimed balance of such money then remaining will be repaid to the Company.

Section 1004. Corporate Existence.
              --------------------
     Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence, rights (charter and statutory) and franchises; provided, however,
that the Company shall not be required to preserve any such right or franchise
if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.

Section 1005. Maintenance of Properties.
              --------------------------
     The Company will cause all properties used or useful in the conduct of its
business or the business of any Subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
nothing in this Section shall prevent the Company from discontinuing the
operation or maintenance of any of such properties if such discontinuance is, in
the judgment of the Company, desirable in the conduct of its business or the
business of any Subsidiary and not disadvantageous in any material respect to
the Holders.

Section 1006. Limitation on Liens.
              --------------------
     (a)  The Company will not, nor will it permit any Subsidiary to, issue,
assume or guarantee directly or indirectly any indebtedness for money borrowed
(hereinafter in this Article Ten referred to as "Debt"), if such Debt is secured
by a mortgage, pledge, security interest, lien or other encumbrance (any such
mortgage, pledge, security interest, lien or other encumbrance being hereinafter
in this Article Ten referred to as a "mortgage" or "mortgages") upon any
Principal Property or upon any indebtedness of or equity securities of any
Subsidiary or any Affiliate, now owned or hereafter acquired, without in any
such case effectively providing, concurrently with the issuance, assumption or
guarantee of such Debt, that the Securities then Outstanding (together with, if
the Company shall so determine, any other indebtedness of or guaranteed by the
Company or such Subsidiary ranking equally with the Securities and then existing
or thereafter created) shall be secured equally and ratably with (or prior to)
such

                                      74
<PAGE>

Debt; provided, however, that the foregoing restriction shall not apply to

          (1) mortgages on any property acquired, constructed or improved by the
     Company or any Subsidiary after the date of this Indenture which are
     created or incurred contemporaneously with or within one hundred twenty
     days after such acquisition, construction or improvement to secure or
     provide for the payment of any part of the purchase price of such property
     or the cost of such construction or improvement (the date of such
     construction or improvement being, for the purpose of this clause (1),
     deemed to be the date of completion of such construction or improvement);
     provided that any such mortgage shall not apply to any other property of
     the Company or any Subsidiary except, in the case of any construction or
     improvement, theretofore unimproved real property on which the property so
     constructed, or the improvement, is located;

          (2) mortgages on any property acquired from a corporation which is
     merged with or into the Company or a Subsidiary or mortgages outstanding on
     property at the time it is acquired by the Company or a Subsidiary or
     mortgages outstanding on property of a corporation at the time it becomes a
     Subsidiary;

          (3) mortgages to secure Debt of a Subsidiary to the Company or to
     another Subsidiary;

          (4) mortgages or other restrictions relating to equity securities of
     any Affiliate under any agreement or arrangement between the Company or any
     Subsidiary and such Affiliate (or the other stockholder or stockholders of
     such Affiliate) providing for the operations, financing or purchase of
     products of such Affiliate or under any agreement among any such parties
     imposing restrictions on the disposition of or granting options to purchase
     the equity securities of such Affiliate;

          (5) mortgages upon property or assets of the Company or any Subsidiary
     in favor of any governmental agency or authority or guarantees given for
     the purpose of financing, through industrial revenue bonds or notes the
     interest on which is exempt from federal income taxation under Section 103
     of the Internal Revenue Code of 1986, as amended, the construction,
     acquisition or purchase of industrial plants, machinery, equipment or other
     property or facilities; and

          (6) any extension, renewal or replacement (or successive extensions,
     renewals or replacements), in

                                      75
<PAGE>

     whole or in part, of any mortgage referred to in the foregoing clauses (1)
     to (5), inclusive; provided, however, that the principal amount of Debt
     secured thereby shall not exceed the principal amount of Debt so secured at
     the time of such extension, renewal or replacement, and that such
     extension, renewal or replacement shall be limited to all or a part of the
     property which secured the mortgage so extended, renewed or replaced (plus
     improvements on such property).

     (b)  Notwithstanding the provisions of paragraph (a) of this Section 1006,
the Company or any Subsidiary may, without equally and ratably securing the
Securities, create or assume mortgages which would otherwise be subject to the
foregoing restrictions if, at the time of such creation or assumption, and after
giving effect thereto, Exempted Indebtedness does not exceed 5% of Consolidated
Shareholders' Equity.

Section 1007.  Limitation on Sale and Lease-Back.
               ----------------------------------

     (a)  The Company will not, nor will it permit any Subsidiary to, enter into
any arrangement with any person providing for the leasing to the Company or
Subsidiary of any Principal Property (except for temporary leases for a term of
not more than three years), which property has been owned more than one hundred
twenty days by the Company or such Subsidiary and has been or is to be sold or
transferred by the Company or such Subsidiary to such person (herein referred to
as a "Sale and Lease-Back Transaction"), unless either (1) the Company or such
Subsidiary would be entitled to incur debt secured by a mortgage on the property
to be leased without equally and ratably securing the Securities pursuant to
clause (a) or (b) of Section 1006 or (2) the Company shall, and in any such case
the Company covenants that it will, apply an amount equal to the fair value (as
determined by the Board of Directors) of the property so leased to the
retirement, within one hundred twenty days of the effective date of any such
Sale and Lease-Back Transaction, of Securities (in the manner, subject to the
restrictions and at the redemption prices then applicable to redemption of
Securities at the option of the Company) or other indebtedness of the Company
with a maturity in excess of one year from the date of such Sale and Lease-Back
Transaction and which ranks on a parity with the Securities.

     (b)  Notwithstanding the provisions of paragraph (a) of this Section 1007,
the Company or any Subsidiary may enter into Sale and Lease-Back Transactions
which would otherwise be prohibited by the foregoing restrictions if, at the
time such transactions are entered into, and after giving effect thereto,
Exempted Indebtedness does not exceed 5% of Consolidated Shareholders' Equity.

                                      76
<PAGE>

Section 1008. Statement by Officers as to Default.
              ------------------------------------

     The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of Sections 1004 to 1007, inclusive, and if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.

Section 1009. Waiver of Certain Covenants.
              ----------------------------

     The Company may omit in any particular instance to comply with term,
provision or condition set forth in Sections 1004 to 1007, inclusive, with
respect to the Securities of any series if before the time for such compliance
the Holders of at least 66 2/3% in principal amount of the Outstanding
Securities of such series shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such term,
provision or condition, but no such waiver shall extend to or affect such term,
provision or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such term, provision or condition shall remain in
full force and effect.

Section 1010. Payment of Additional Amounts.
              ------------------------------

     If the Securities of a series provide for the payment of additional
amounts, the Company will pay to the Holder of any Security of any series or any
coupon appertaining thereto additional amounts upon the terms and subject to the
conditions provided therein. Whenever in this Indenture there is mentioned, in
any context, the payment of the principal of (or premium, if any) or interest
on, or in respect of, any Security of any series or any related coupon or the
net proceeds received on the sale or exchange of any Security of any series,
such mention shall be deemed to include mention of the payment of additional
amounts provided for in the terms of such Securities and this Section to the
extent that, in such context, additional amounts are, were or would be payable
in respect thereof pursuant to the provisions of this Section and express
mention of the payment of additional amounts (if applicable) in any provisions
hereof shall not be construed as excluding additional amounts in those
provisions hereof where such express mention is not made.

     If the Securities of a series provide for the payment of additional
amounts, at least 10 days prior to the first Interest Payment Date with respect
to that series of Securities

                                      77
<PAGE>

(or if the Securities of that series will not bear interest prior to the
Maturity, the first day on which a payment of principal (and premium, if any) is
made), and at least 10 days prior to each date of payment of principal (and
premium, if any) or interest if there has been any change with respect to the
matters set forth in the below-mentioned Officers' Certificate, the Company will
furnish the Trustee and the Company's principal Paying Agent or Paying Agents,
if other than the Trustee, with an Officers' Certificate instructing the Trustee
and such Paying Agent or Paying Agents whether such payment of principal of (and
premium, if any) or interest on the Securities of that series shall be made to
Holders of Securities of that series or the related coupons who are United
States Aliens without withholding for or on account of any tax, assessment or
other governmental charge described in the Securities of that series. If any
such withholding shall be required, then such Officers' Certificate shall
specify by country the amount, if any, required to be withheld on such payments
to such Holders of Securities or coupons and the Company will pay to the Trustee
or such Paying Agent the additional amounts, if any, required by the terms of
such Securities and the first paragraph of this Section. The Company covenants
to indemnify the Trustee and any Paying Agent for, and to hold them harmless
against, any loss, liability or expense reasonably incurred without negligence
or bad faith on their part arising out of or in connection with Actions taken or
omitted by any of them in reliance on any Officers' Certificate furnished
pursuant to this Section 1010.

                                ARTICLE ELEVEN

                           Redemption of Securities

Section 1101.  Applicability of Article.
               -------------------------

     Securities of any series which are redeemable before their Stated Maturity
shall be redeemable in accordance with their terms and (except as otherwise
specified as contemplated by Section 301 for Securities of any series) in
accordance with this Article.

Section 1102.  Election to Redeem; Notice to Trustee.
               --------------------------------------

     The election of the Company to redeem any Securities shall be evidenced by
a Board Resolution. In case of any redemption at the election of the Company of
less than all the Securities of any series, the Company shall, at least 60 days
prior to the Redemption Date fixed by the Company (unless a shorter notice shall
be satisfactory to the Trustee), notify the Trustee of such Redemption Date, of
the principal amount of Securities of such series to be redeemed and, if
applicable, of

                                       78
<PAGE>

the tenor of the Securities to be redeemed. In the case of any redemption of
Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, the
Company shall furnish the Trustee with an Officers' Certificate evidencing
compliance with such restriction.

Section 1103.  Selection by Trustee of Securities to Be Redeemed.
               --------------------------------------------------

     If less than all the Securities of any series are to be redeemed (unless
all of the Securities of such series and of a specified tenor are to be
redeemed), the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series not previously called for redemption, by such method
as the Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to the minimum authorized
denomination for Securities of that series or any integral multiple thereof) of
the principal amount of Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of that series. If less than
all of the Securities of such series and of a specified tenor are to be
redeemed, the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series and specified tenor not previously called for
redemption in accordance with the preceding sentence.

     The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption and, in the case of any Securities selected for partial
redemption, the principal amount thereof to be redeemed.

     For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.

Section 1104. Notice of Redemption.
              ---------------------

     Notice of redemption shall be given in the manner provided in Section 106,
mailed not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Securities to be redeemed.

     All notices of redemption shall state:

          (1) the Redemption Date,

                                       79
<PAGE>

          (2)  the Redemption Price,

          (3)  if less than all the Outstanding Securities of any series are to
     be redeemed, the identification (and, in the case of partial redemption of
     any Securities, the principal amounts) of the particular Securities to be
     redeemed,

          (4)  that on the Redemption Date the Redemption Price will become due
     and payable upon each such Security to be redeemed and, if applicable, that
     interest thereon will cease to accrue on and after said date,

          (5)  the place or places where such Securities are to be surrendered
     for payment of the Redemption Price, and

          (6)  that the redemption is for a sinking fund, if such is the case.

     Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.

Section 1105.  Deposit of Redemption Price.
               ----------------------------

     Prior to any Redemption Date, the Company shall deposit with the Trustee or
with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 1003) an amount of money
sufficient to pay the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the Securities which
are to be redeemed on that date.

Section 1106. Securities Payable on Redemption Date.
              --------------------------------------

     Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest, and the coupons for such
interest appertaining to any Bearer Securities so to be redeemed, except to the
extent provided below, shall be void. Upon surrender of any such Security for
redemption in accordance with said notice, such Security shall be paid by the
Company at the Redemption Price, together with accrued interest to the
Redemption Date; provided, however, that installments of interest on Bearer
                 ------------------
Securities whose Stated Maturity is on or prior to the Redemption Date shall be
payable only upon presentation and surrender of coupons for such

                                       80
<PAGE>

interest (at an office or agency located outside the United States except as
otherwise provided in Section 1002), and provided that installments of interest
                                         -------------
whose Stated Maturity is on or prior to the Redemption Date shall be payable to
the Holders of such Securities, or one or more Predecessor Securities,
registered as such at the close of business on the relevant Record Dates
according to their terms and the provisions of Section 307.

     If any Bearer Security surrendered for redemption shall not be accompanied
by all appurtenant coupons maturing after the Redemption Date, such Bearer
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing coupons, or the surrender of such missing
coupon or coupons may be waived by the Company and the Trustee if there be
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent harmless. If thereafter the Holder of such Bearer
Security shall surrender to the Trustee or any Paying Agent any such missing
coupon in respect of which a deduction shall have been made from the Redemption
Price, such Holder shall be entitled to receive the amount so deducted;
provided, however, that interest represented by coupons shall be payable only
upon presentation and surrender of those coupons at an office or agency located
outside of the United States except as otherwise provided in Section 1002.

     If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium shall, until paid, bear
interest from the Redemption Date at the rate prescribed therefor in the
Security.

Section 1107.  Securities Redeemed in Part.
               ---------------------------

     Any Security which is to be redeemed only in part shall be surrendered at a
Place of Payment therefor (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of the same series and of like tenor, of
any authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered, except that if a Global Security is so surrendered,
the Company shall execute, and the Trustee shall authenticate and deliver to the
Depositary for such Global Security, without service charge, a new Global
Security in a

                                       81
<PAGE>

denomination equal to and in exchange for the unredeemed portion of the
principal of the Global Security so surrendered.

                                ARTICLE TWELVE

                                 Sinking Funds

Section 1201.  Applicability of Article.
               ------------------------

     The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 for Securities of such series.

     The minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "optional sinking
fund payment." If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 1202. Each sinking fund payment shall be applied to the redemption of
Securities of any series as provided for by the terms of Securities of such
series.

Section 1202.  Satisfaction of Sinking Fund Payments with Securities.
               -----------------------------------------------------

     The Company (1) may deliver Outstanding Securities of a series (other than
any previously called for redemption), together in the case of any Bearer
Securities of such series with all unmatured coupons appertaining thereto, and
(2) may apply as a credit Securities of a series which have been redeemed either
at the election of the Company pursuant to the terms of such Securities or
through the application of permitted optional sinking fund payments pursuant to
the terms of such Securities, in each case in satisfaction of all or any part of
any sinking fund payment with respect to the Securities of such series required
to be made pursuant to the terms of such Securities as provided for by the terms
of such series; provided that such Securities have not been previously so
                --------
credited. Such Securities shall be received and credited for such purpose by the
Trustee at the Redemption Price specified in such Securities for redemption
through operation of the sinking fund and the amount of such sinking fund
payment shall be reduced accordingly.

                                       82
<PAGE>

Section 1203.  Redemption of Securities for Sinking Fund.
               -----------------------------------------

     Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 1202 and will also deliver to the Trustee any Securities to
be so delivered. Not less than 31 days before each such sinking fund payment
date the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 1103 and cause notice of
the redemption thereof to be given in the name of and at the expense of the
Company in the manner provided in Section 1104. Such notice having been duly
given, the redemption of such Securities shall be made upon the terms and in the
manner stated in Sections 1106 and 1107.

                               ARTICLE THIRTEEN

                      Defeasance and Covenant Defeasance
                      ----------------------------------

Section 1301.  Applicability of Article; Company's Option
               to Effect Defeasance or Covenant Defeasance.
               -------------------------------------------

     If pursuant to Section 301 provision is made for either or both of (a)
defeasance of the Securities of a series under Section 1302 or (b) covenant
defeasance of the Securities of a series under Section 1303, then the provisions
of such Section or Sections, as the case may be, together with the other
provisions of this Article Thirteen, shall be applicable to the Securities of
such series, and the Company may at its option by Board Resolution, at any time,
with respect to the Securities of such series, elect to have either Section 1302
(if applicable) or Section 1303 (if applicable) be applied to the Outstanding
Securities of such series upon compliance with the conditions set forth below in
this Article Thirteen.

Section 1302.  Defeasance and Discharge.
               ------------------------

     Upon the Company's exercise of the above option applicable to this Section,
the Company shall be deemed to have been discharged from its obligations with
respect to the Outstanding Securities of such series on the date the conditions
set forth below are satisfied (hereinafter, "defeasance"). For this purpose,
such defeasance means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by the Outstanding Securities of
such series and to have satisfied all its other obligations

                                       83
<PAGE>

under Securities and this Indenture insofar as such Securities are concerned
(and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (A) the rights of
Holders of Outstanding Securities of such series to receive, solely from the
trust fund described in Section 1304 and as more fully set forth in such
Section, payments in respect of the principal of (and premium, if any) and
interest on such Securities when such payments are due, (B) the Company's
obligations with respect to such Securities under Sections 304, 305, 306, 607,
1002, 1003 and 1010, (C) the rights, powers, trusts, duties, and immunities of
the Trustee hereunder and (D) this Article Thirteen. Subject to compliance with
this Article Thirteen, the Company may exercise its option under this Section
1302 notwithstanding the prior exercise of its option under Section 1303 with
respect to the Securities of such series.

Section 1303. Covenant Defeasance.
              -------------------

     Upon the Company's exercise of the above option applicable to this Section,
the Company shall be released from its obligations under Sections 801, 1005,
1006, 1007, 1008, 501(4) (as to Sections 801, 1005, 1006, 1007 and 1008),
501(5), 501(6), 501(7) and 501(8) (if Section 501(8) is specified as applicable
to the Securities of such series) with respect to the Outstanding Securities of
such series on and after the date the conditions set forth below are satisfied
(hereinafter, "covenant defeasance"). For this purpose, such covenant defeasance
means that, with respect to the outstanding securities of such series, the
Company may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in any such Section, whether directly or
indirectly by reason of any reference elsewhere herein to any such Section or by
reason of any reference in any such Section to any other provision herein or in
any other document, but the remainder of this Indenture and such securities
shall be unaffected thereby.

Section 1304. Conditions to Defeasance or Covenant Defeasance.
              -----------------------------------------------

     The following shall be the conditions to application of either Section 1302
or Section 1303 to the Outstanding Securities of such series:

     (1) the Company shall irrevocably have deposited or caused to be deposited
with the Trustee (or another trustee satisfying the requirements of Section 609
who shall agree to comply with the provisions of this Article Thirteen
applicable to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and

                                      84
<PAGE>

dedicated solely to, the benefit of the Holders of such Securities, (A) money in
an amount, or (B) U.S. Government Obligations which through the scheduled
payment of principal and interest in respect thereof in accordance with their
terms will provide, not later than one day before the due date of any payment,
money in an amount, or (C) a combination thereof, sufficient, in the opinion of
a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and discharge,
and which shall be applied by the Trustee (or other qualifying trustee) to pay
and discharge, (i) the principal of (and premium, if any, on) and each
installment of principal of (and premium, if any) and interest on the
Outstanding Securities of such series on the Stated Maturity of such principal
or installment of principal or interest and (ii) any mandatory sinking fund
payments or analogous payments applicable to the Outstanding Securities of such
series on the day on which such payments are due and payable in accordance with
the terms of this Indenture of such Securities. For this purpose, "U.S.
Government Obligations" means securities that are (x) direct obligations of the
United States of America for the payment of which its full faith and credit is
pledged or (y) obligations of a Person controlled or supervised by and acting as
an agency or instrumentality of the United States of America the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States of America, which, in either case, are not callable or redeemable
at the option of the issuer thereof, and shall also include a depository receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933,
as amended) as custodian with respect to any such U.S. Government Obligation or
a specific payment of principal of or interest on any such U.S. Government
Obligation held by such custodian for the account of the holder of such
depository receipt, provided that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in respect of
the U.S. Government Obligation or the specific payment of principal of or
interest on the U.S. Government Obligation evidenced by such depository receipt.

     (2) No Event of Default or event with which notice or lapse of time or both
would become an Event of Default with respect to the Securities of such series
shall have occurred and be continuing on the date of such deposit or, insofar as
subsections 501(6) and (7) are concerned, at any time during the period ending
on the 91st day after the date of such deposit (it being understood that this
condition shall not be deemed satisfied until the expiration of such period).

     (3) Such defeasance or covenant defeasance shall not cause the Trustee for
the Securities of such series to have a

                                      85
<PAGE>

conflicting interest as defined in Section 608 and for purposes of the Trust
Indenture Act with respect to any securities of the Company.

     (4) Such defeasance or covenant defeasance shall not result in a breach or
violation of, or constitute a default under, this Indenture or any other
agreement or instrument to which the Company is a party or by which it is bound.

     (5) Such defeasance or covenant defeasance shall not cause any Securities
of such series then listed on any registered national securities exchange under
the Securities Exchange Act of 1934, as amended, to be delisted.

     (6) In the case of an election under Section 1302, the Company shall have
delivered to the Trustee an Opinion of Counsel stating that (x) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling, or (y) since the date of this Indenture there has been a change in the
applicable Federal income tax law, in either case to the effect that, and based
thereon such opinion shall confirm that, the Holders of the Outstanding
Securities of such series will not recognize income, gain or loss for Federal
income tax purposes as a result of such defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if such defeasance had not occurred.

     (7) In the case of an election under Section 1303, the Company shall have
delivered to the Trustee an Opinion of Counsel to the effect that the Holders of
the Outstanding Securities of such series will not recognize income, gain or
loss for Federal income tax purposes as a result of such covenant defeasance and
will be subject to Federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such covenant defeasance
had not occurred.

     (8) Such defeasance or covenant defeasance shall be effected in compliance
with any additional terms, conditions or limitations which may be imposed on the
Company in connection therewith pursuant to Section 301.

     (9) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for in the Indenture relating to either the defeasance under
Section 1302 or the covenant defeasance under Section 1303 (as the case may be)
have been complied with.

                                      86
<PAGE>

Section 1305. Deposited Money and U.S. Government
              Obligations to be Held in Trust;
              Other Miscellaneous Provisions.
              ------------------------------

     Subject to the provisions of the last paragraph of Section 1003, all money
and U.S. Government Obligations (including the proceeds thereof) deposited with
the Trustee (or other qualifying trustee -- collectively, for purposes of this
Section 1305, the "Trustee") pursuant to Section 1304 in respect of the
Outstanding Securities of such series shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities, of all sums due and to become due
thereon in respect of principal (and premium, if any) and interest, but such
money need not be segregated from other funds except to the extent required by
law.

     The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 1304 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of the Outstanding Securities of such series.

     Anything in this Article Thirteen to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 1304 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect an equivalent defeasance or covenant
defeasance.

                               ARTICLE FOURTEEN

                              Meetings of Holders

Section 1401. Purposes of Which Meetings May be Called.
              ----------------------------------------

     If Securities of a series are issuable in whole or in part as Bearer
Securities, a meeting of Holders of Securities of such series may be called at
any time and from time to time pursuant to this Article to make, give or take
any request, demand, authorization, notice, consent, waiver or other Act
provided by this Indenture to be made, given or taken by Holders of Securities
of such series.

                                      87
<PAGE>

Section 1402. Call, Notice and Place of Meetings.
              ----------------------------------

     (a) The Trustee may at any time call a meeting of Holders of Securities of
any series issuable in whole or in part as Bearer Securities for any purpose
specified in Section 1401, to be held at such time and at such place in the
Borough of Manhattan, The City of New York, or in London, as the Trustee shall
determine. Notice of every meeting of Holders of Securities of any series,
setting forth the time and the place of such meeting and in general terms the
action proposed to be taken at such meeting, shall be given, in the manner
provided in Section 106, not less than 21 or more than 180 days prior to the
date fixed for the meeting.

     (b) In case at any time the Company, pursuant to a Board Resolution, or the
Holders of at least 10% in principal amount of the Outstanding Securities of any
series shall have requested the Trustee to call a meeting of the Holders of
Securities of such series for any purpose specified in Section 1401, by written
request setting forth in reasonable detail the action proposed to be taken at
the meeting, and the Trustee shall not have made the first publication of the
notice of such meeting within 21 days after receipt of such request or shall not
thereafter proceed to cause the meeting to be held as provided herein, then the
Company or the Holders of Securities of such series in the amount above
specified, as the case may be, may determine the time and the place in the
Borough of Manhattan, The City of New York, or in London for such meeting and
may call such meeting for such purposes by giving notice thereof as provided in
Subsection (a) of this Section.

Section 1403. Persons Entitled to Vote at Meetings.
              ------------------------------------

     To be entitled to vote at any meeting of Holders of Securities of any
series, a person shall be (1) a Holder of one or more Outstanding Securities of
such series, or (2) a Person appointed by an instrument in writing as proxy for
a Holder or Holders of one or more Outstanding Securities of such series by such
Holder or Holders. The only Persons who shall be entitled to be present or to
speak at any meeting of Holders of Securities of any series shall be the Persons
entitled to vote at such meeting and their counsel, any representatives of the
Trustee and its counsel and any representatives of the Company and its counsel.

Section 1404. Quorum; Action.
              --------------

     The Persons entitled to vote a majority in principal amount of the
Outstanding Securities of a series shall constitute a quorum for a meeting of
Holders of Securities of such series; provided, however, that if any action is
to be taken at such meeting with respect to a consent or waiver which

                                      88
<PAGE>

this Indenture expressly provides may be given by the Holders of not less than
66 2/3% in principal amount of the Outstanding Securities of a series, the
Persons entitled to vote 66 2/3% in principal amount of the Outstanding
Securities of such series constitute a quorum. In the absence of a quorum within
30 minutes of the time appointed for any such meeting, the meeting shall, if
convened at the request of Holders of Securities of such series, be dissolved.
In the absence of a quorum in any other case the meeting may be adjourned for a
period of not less than 10 days as determined by the chairman of the meeting
prior to the adjournment of such meeting. In the absence of a quorum at any such
adjourned meeting, such adjourned meeting may be further adjourned for a period
of not less than 10 days as determined by the chairman of the meeting prior to
the adjournment of such adjourned meeting. Notice of the reconvening of any
adjourned meeting shall be given as provided in Section 1402(a), except that
such notice need be given only once not less than five days prior to the date on
which the meeting is scheduled to be reconvened. Notice of the reconvening of an
adjourned meeting shall state expressly the percentage, as provided above, of
the principal amount of the Outstanding Securities of such series that shall
constitute a quorum.

     Except as limited by the first proviso to Section 902, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a quorum is
present as aforesaid may be adopted only by the affirmative vote of the Holders
of a majority in principal amount of the Outstanding Securities of that series;
provided, however, that, except as limited by such first proviso to Section 902,
any resolution with respect to any consent or waiver which this Indenture
expressly provides may be given by the Holders of not less than 66 2/3% in
principal amount of the Outstanding Securities of a series may be adopted at a
meeting or an adjourned meeting duly reconvened and at which a quorum is present
as aforesaid only by the affirmative vote of the Holders of 66 2/3% in principal
amount of the Outstanding Securities of that series; and provided further that,
except as limited by such first proviso to Section 902, any resolution with
respect to any request, demand, authorization, direction, notice, consent,
waiver or other Act which this Indenture expressly provides may be made, given
or taken by the Holders of a specified percentage, which is less than a
majority, in principal amount of the Outstanding Securities of a series may be
adopted at a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid by the affirmative vote of the Holders of such
specified percentage in principal amount of the Outstanding Securities of that
series.

     Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance

                                      89
<PAGE>

with this Section shall be binding on all the Holders of Securities of such
series and the related coupons, whether or not present or represented at the
meeting.

Section 1405. Determination of Voting Rights; Conduct and Adjournment of
              Meetings.
              --------

     (a)  Notwithstanding any other provisions of this Indenture, the Trustee
may make such reasonable regulations as it may deem advisable for any meeting of
Holders of Securities of such series in regard to proof of the holding of
Securities of such series and of the appointment of proxies and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall deem appropriate.
Except as otherwise permitted or required by any such regulations, the holding
of Securities shall be proved in the manner specified in Section 104 and the
appointment of any proxy shall be proved in the manner specified in Section 104
or, in the case of Bearer Securities, by having the signature of the person
executing the proxy witnessed or guaranteed by any trust company, bank or banker
authorized by Section 104 to certify to holding of Bearer Securities. Such
regulations may provide that written instruments appointing proxies, regular on
their face, may be presumed valid and genuine without the proof specified in
Section 104 or other proof.

     (b)  The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders of Securities as provided in Section 1402(b), in which
case the Company or the Holders of Securities of the series calling the meeting,
as the case may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting.

     (c)  At any meeting each Holder of a Security of such series or proxy shall
be entitled to one vote for each $1,000 principal amount (or the equivalent in
ECU, any other composite currency or a Foreign Currency) of Securities of such
series held or represented by him; provided, however, that no vote shall be cast
or counted at any meeting in respect of any Security challenged as not
Outstanding and ruled by the chairman of the meeting to be not Outstanding. The
chairman of the meeting shall have no right to vote, except as a Holder of a
Security of such series or proxy.

                                       90
<PAGE>

     (d)  Any meeting of Holders of Securities of any series duly pursuant to
Section 1402 at which a quorum is present may be adjourned from time to time by
Persons entitled to vote a majority in principal amount of the Outstanding
Securities of such series represented at the meeting; and the meeting may be
held as so adjourned without further notice.

Section 1406.  Counting Votes and Recording Action
               of Meetings.
               -----------

     The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in triplicate of all votes cast at the meeting. A record, at least in
triplicate, of the proceedings of each meeting of Holders of Securities of any
series shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1402 and, if
applicable, Section 1404. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter of have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.

     This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.

                                      91
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.

                                THE MEAD CORPORATION

                                By  /s/ William R. Graber
                                  ----------------------------
                                    William R. Graber
Attest:                             Treasurer
CSR.

/s/ Tina M. Boyd
----------------------------
[SEAL]

                                THE FIRST NATIONAL BANK OF
                                CHICAGO

                                By  /s/ R. D. Manella
                                  ----------------------------
                                    Vice President

Attest:
/s/ Kaye Wright
----------------------------
[SEAL]

Assistant Vice President

                                      92
<PAGE>

State of Ohio
County of Montgomery, ss:

     On the 2nd day of February, 1993, before me personally came William R.
Graber, to me known, who, being by me duly sworn, did depose and say that he is
Treasurer of The Mead Corporation, one of the corporations described in and
which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.

                                    /s/ Jeffrey Hayman
                                    _________________________

                                    [NOTARY STAMP APPEARS HERE]

                                    JEFFREY HAYMAN
                                    ATTORNEY AT LAW
                                    NOTARY PUBLIC-STATE OF OHIO
                                    LIFETIME COMMISSION
                                    SECTION 147.03 O.R.C.

State of Illinois
County of Cook, ss:

     On the 3rd day of February, 1993, before me personally came R. D. Manella,
to me known, who, being by me duly sworn, did depose and say that he is Vice
President of The First National Bank of Chicago, one of the corporations
described in and which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.

                                    /s/ Somsri Helmer
                                    _________________________

                                    [NOTARY STAMP APPEARS HERE]

                                    OFFICIAL SEAL
                                    SOMSRI HELMER
                                    NOTARY PUBLIC, STATE OF ILLINOIS
                                    MY COMMISSION EXPIRES 1/14/95

                                      93

<PAGE>

                                   EXHIBIT A

                      [FORM OF CERTIFICATE TO BE GIVEN BY
                  PERSON ENTITLED TO RECEIVE BEARER SECURITY
           OR TO OBTAIN INTEREST PAYABLE PRIOR TO THE EXCHANGE DATE]

                                  CERTIFICATE
                         _____________________________

                    [Insert title or sufficient description
                        of Securities to be delivered]

     This is to certify that as of the date hereof, and except as set forth
below, the above-captioned Securities held by you for our account (i) are owned
by persons(s) that are not citizens or residents of the United States, domestic
partnerships, domestic corporations or any estate or trust the income of which
is subject to United States federal income taxation regardless of its source
("United States person(s)"), (ii) are owned by United States person(s) that are
(a) foreign branches of United States financial institutions (as defined in
United States Treasury Regulations Section 1.165-12(c)(1)(v)) purchasing for
their own account or for resale, or (b) United States person(s) who acquired the
Securities through foreign branches of United States financial institutions and
who hold the Securities through such United States financial institutions on the
date hereof (and in either case (a) or (b), each such United States financial
institution hereby agrees, on its own behalf or through its agent, that you may
advise the Issuer or its agent that such financial institution will comply with
the requirements of Section 165(j)(3)(A), (B) or (C) of the United States
Internal Revenue Code of 1986, as amended, and the regulations thereunder), or
(iii) are owned by United States or foreign financial institutions for purposes
of resale during the restricted period (as defined in United States Treasury
Regulations Section 1.163-5(c)(2)(i)(D)(7)), and, in addition, if the owner is a
United States or foreign financial institution described in clause (iii) above
(whether or note also described in clause (i) or (ii)), this is to further
certify that such financial institution has not acquired the Securities for
purposes of resale directly or indirectly to a United States person or to a
person within the United States or its possessions.

     As used herein, "United States" means the United States of America
(including the States and District of Columbia); and its "possessions" include
Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.

                                      94
<PAGE>

     We undertake to advise you promptly by tested telex or by electronic
transmission on or prior to the date on which you intend to submit your
certification relating to the above-captioned Securities held by you for our
account in accordance with your Operating Procedures if any applicable statement
herein is not correct on such date, and in the absence of any such notification
it may be assumed that this certification applies as of such date.

     This certificate excepts and does not relate to _______ of such interest in
the above-captioned Securities in respect of which we are not able to certify
and as to which we understand an exchange for an interest in a permanent Global
Security or an exchange for and delivery of definitive Securities (or, if
relevant, collection of any interest) cannot be made until we do so certify.

     We understand that this certificate may be required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.

Date: _________________________, 19__

[To be dated no earlier
than the 15th day prior to
(i) the Exchange Date or (ii)
the relevant Interest Payment
Date occurring prior to the
Exchange Date, as applicable]

                                [Name of Person Making
                                Certification]

                                ______________________
                                (Authorized Signatory)

                                Name:
                                Title:

                                      95
<PAGE>

                                   EXHIBIT B

                [FORM OF CERTIFICATE TO BE GIVEN BY EURO-CLEAR
                     AND CEDEL S.A. IN CONNECTION WITH THE
                     EXCHANGE OF A PORTION OF A TEMPORARY
                         GLOBAL SECURITY OR TO OBTAIN
                 INTEREST PAYABLE PRIOR TO THE EXCHANGE DATE]

                                  CERTIFICATE

                         _____________________________

                    [Insert title or sufficient description
                        of Securities to be delivered]

     This is to certify that based solely on written certifications that we have
received in writing, by tested telex or by electronic transmission from each of
the persons appearing in our records as persons entitled to a portion of the
principal amount set forth below (our "Member Organizations") substantially in
the form attached hereto, as of the date hereof, ________ principal amount of
the above-captioned Securities (i) is owned by person(s) that are not citizens
or residents of the United States, domestic partnerships, domestic corporations
or any estate or trust the income of which is subject to United States Federal
income taxation regardless of its source ("United States person(s)"), (ii) is
owned by United States person(s) that are (a) foreign branches of United States
financial institutions (as defined in U.S. Treasury Regulations Section 1.165-
12(c)(1)(v)) purchasing for their own account or for resale, or (b) United
States person(s) who acquired the Securities through foreign branches of United
States financial institutions and who hold the Securities through such United
States financial institutions on the date hereof (and in each case (a) or (b),
each such financial institution has agreed, on its own behalf or through its
agent, that we may advise the Issuer or its agent that such financial
institution will comply with the requirements of Section 165(j)(3)(A), (B) or
(C) of the Internal Revenue Code of 1986, as amended, and the regulations
thereunder), or (iii) is owned by United States or foreign financial
institutions(s) for purposes of resale during the restricted period (as defined
in United States Treasury Regulations (Section 1.163-5(c)(2)(i)(D)(7)), and to
the further effect, that financial institutions described in clause (iii) above
(whether or not also described in clause (i) and (ii)) have certified that they
have not acquired the Securities for purposes of resale directly or indirectly
to a United States person or to a person within the United States or its
possessions.

                                      96
<PAGE>

     As used herein, "United States" means the United States of America
(including the States and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.

     We further certify that (i) we are not making available herewith for
exchange (or, if relevant, collection of any interest) any portion of the
temporary Global Security representing the above-captioned Securities excepted
in the above-referenced certificates of Member Organizations and (ii) as of the
date hereof we have not received any notification from any of our Member
Organizations to the effect that the statements made by such Member
Organizations with respect to any portion of the part submitted herewith for
exchange (or, if relevant, collection of any interest) are no longer true and
cannot be relied upon as of the date hereof.

     We understand that this certification is required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.

Date: _______________, 19__

[To be dated no earlier
than the Exchange Date
or the relevant Interest
Payment Date occurring
prior to the Exchange
Date, as applicable)]

                                       [MORGAN GUARANTY
                                       TRUST COMPANY OF NEW
                                       YORK, BRUSSELS
                                       OFFICE, as Operator
                                       of the Euro-clear
                                       System] [CEDEL S.A.]

                                   By  _______________________

                                      97<PAGE>

                                                                Exhibit 10.xxiii

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

     THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX CITY, ALABAMA

                                      and

                            MEAD COATED BOARD, INC.

                            -----------------------
                                Lease Agreement
                            -----------------------

                         Dated as of December 1, 1988

Relating to $44,000,000 The Industrial Development Board of the City of Phenix
City, Alabama Environmental Improvement Revenue Bonds (Mead Coated Board
Project), Series 1988

================================================================================
<PAGE>

                                LEASE AGREEMENT

                               TABLE OF CONTENTS

(The Table of Contents for this Lease Agreement is for convenience of reference
only and is not intended to define, limit or describe the scope or intent of any
provisions of this Lease Agreement.)

                                                                            Page
                                                                            ----

ARTICLE I                    DEFINITIONS

     Section 1.1             Definitions
     Section 1.2             Certain Rules of Interpretation

ARTICLE II                   REPRESENTATIONS

     Section 2.1             Representations by the Issuer
     Section 2.2             Representations by the Company

ARTICLE III                  LEASING CLAUSES AND TITLE PROJECT

     Section 3.1             Lease of the Project
     Section 3.2             Title to Project
     Section 3.3             Quiet Enjoyment

ARTICLE IV                   ACQUISITION, CONSTRUCTION,
                             INSTALLATION, EQUIPPING AND
                             COMPLETION OF THE PROJECT;
                             ISSUANCE OF THE BONDS

     Section 4.1             Acquisition, Construction,
                             Installation, Equipping and
                             Completion of the Project
     Section 4.2             Issuance of Bonds; Disbursements from the
                             Project Fund
     Section 4.3             Establishment of Completion Date;
                             Excess Proceeds
     Section 4.4             Insufficiency of Project Fund
     Section 4.5             Issuer to Pursue Remedies Against
                             Suppliers, Contractors and
                             Subcontractors and their Sureties

                                      -i-
<PAGE>

ARTICLE V                    EFFECTIVE DATE OF THIS
                             AGREEMENT; DURATION; OF LEASE
                             TERM; RENTAL PROVISIONS

     Section 5.1             Effective Date of This
                             Agreement; Duration of
                             Lease Term
     Section 5.2             Delivery of Acceptance of Possession
     Section 5.3             Rental Payments
     Section 5.4             Obligation of the Company Unconditional
     Section 5.5             Assignment and Pledge of Rental
                             Payments and the Agreement
     Section 5.6             Agreement to Supply Letter of Credit
     Section 5.7             Purchase of Bonds
     Section 5.8             Optional Purchase of Bonds
     Section 5.9             Determination of Interest Rate Periods

ARTICLE VI                   SPECIAL COVENANTS

     Section 6.1             Use of Project
     Section 6.2             Use of Proceeds
     Section 6.3             Indemnity Against Claims
     Section 6.4             Inspection of the Project
     Section 6.5             Company to Maintain Its Corporate
                             Existence; Conditions Under Which
                             Exceptions Permitted
     Section 6.6             Ownership; Further Assurances and
                             Corrective Instruments
     Section 6.7             Maintenance of Project by Company
     Section 6.8             Redemption or Purchase of Bonds
     Section 6.9             Investment of Bond Fund and
                             Project Fund Moneys Permitted
     Section 6.10            Non-Arbitrage Covenant
     Section 6.11            Removal and Substitution of
                             Portions of Project
     Section 6.12            Taxes, Other Governmental Charges
                             and Utility Charges
     Section 6.13            Insurance Required
     Section 6.14            Application of Net Proceeds of
                             Insurance
     Section 6.15            Additional Provisions
                             Respecting Insurance
     Section 6.16            Investment Credit
     Section 6.17            Granting of Easements
     Section 6.18            Release of Certain Land

                                     -ii-
<PAGE>

ARTICLE VII          DAMAGE, DESTRUCTION AND
                     CONDEMNATION

     Section 7.1     Damage and Destruction
     Section 7.2     Condemnation
     Section 7.3     Condemnation of
                     Company-Owned Property

ARTICLE VII:         ASSIGNMENT; SUBLEASING,
                     PLEDGING AND SELLING;
                     REDEMPTION; RENT PREPAYMENT
                     AND ABATEMENT; OPTION AND
                     OBLIGATION TO PURCHASE PROJECT;
                     OPTION TO EXTEND TERM OF AGREEMENT

     Section 8.1     Assignment and Subleasing
     Section 8.2     Pledge Under Indenture
     Section 8.3     Restrictions on Sale of
                     Project by Issuer
     Section 8.4     Prepayment of Rents; Option to
                     Purchase Project; Obligation
                     to Purchase Project
     Section 8.5     Rent Abatements If Bonds Paid
                     Prior to Maturity
     Section 8.6     Reference to Bonds Ineffective
                     After Bonds Paid
     Section 8.7     Option to Extend

ARTICLE IX           EVENTS OF DEFAULT AND REMEDIES

     Section 9.1     Events of Default
     Section 9.2     Remedies on Default
     Section 9.3     Agreement to Pay Attorneys' Fees
                     and Expenses
     Section 9.4     No Additional Waiver Implied by
                     One Waiver
     Section 9.5     Notice of Default

ARTICLE X            MISCELLANEOUS

     Section 10.1    Notices
     Section 10.2    Binding Effect
     Section 10.3    Severability
     Section 10.4    Amounts Remaining
                     in the Bond Fund
     Section 10.5    Amendments
     Section 10.6    Execution in Counterparts
     Section 10.7    Applicable Law
     Section 10.8    Captions
     Section 10.9    Recording of Agreement
     Section 10.10   Net Lease

                                     -iii-
<PAGE>

EXHIBITS

     Exhibit "A"       Project Land                              A-1
     Exhibit "B"       Description of Project                    B-1
     Exhibit "C"       Form of Requisition                       C-1

                                     -iv-
<PAGE>

          THIS LEASE AGREEMENT, dated as of December 1, 1988 between THE
INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX CITY, ALABAMA, a public
corporation duly organized and existing under the laws of the State of Alabama,
as lessor (the "Issuer"), and MEAD COATED BOARD, INC., a corporation organized
and existing under the laws of the State of Delaware (the "Company"), evidencing
the agreement of the parties hereto.

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

          In consideration of the respective representations and agreements
hereinafter contained, the parties hereto agree as follows (provided that in the
performance of the agreements of the Issuer herein contained, any obligation the
Issuer may thereby incur for the payment of money shall not be a general debt,
liability or obligation of the Issuer, or of the State of Alabama or any
political subdivision thereof, but shall be payable solely out of the rents,
revenues and proceeds derived from this Agreement (hereinafter defined) and the
sale of the Bonds referred to herein:

                                   ARTICLE I

                                  DEFINITIONS
                                  -----------

          Section 1.1  Definitions. In addition to the words and terms elsewhere
                       -----------
defined herein, the following words and terms as used herein shall have the
following meanings unless the context or use clearly indicates another or
different meaning or intent, and any other words and terms defined in the
Indenture shall have the same meanings as assigned to them in the Indenture when
used herein unless the context or use clearly indicates another or different
meaning or intent:

          "Act" means the statutes codified as Code of Alabama 1975, Title 11,
           ---
Chapter 54, Article 4, as amended and supplemented and at the time in force and
effect.

          "Agreement" means this Lease Agreement and any amendments and
           ---------
supplements hereto.

          "Authorized Company Representative" means any person or persons
           ---------------------------------
designated to act on behalf of the Company by a certificate filed with the
Issuer and the Trustee containing the specimen signature of each such person and
signed by the President, and Vice President or the Treasurer of the Company.
<PAGE>

          "Authorized Issuer Representative" means any person or persons
           --------------------------------
designated to act on behalf of the Issuer by a certificate filed with the Issuer
and the Trustee containing the specimen signature of each such person and signed
by the Chairman or Secretary of the Issuer.

          "Bond Counsel" means an attorney-at-law or a firm of attorneys of
           ------------
nationally recognized standing in matters pertaining to the tax-exempt nature of
interest on bonds issued by states and their political subdivisions, duly
admitted to the practice of law before the highest court of any state of the
United States of America, selected by the Company and acceptable to the Trustee.

          "Bond Fund" means the Bond principal and interest payment fund created
           ---------
by Section 5.02 of the Indenture.

          "Business Day" means any day other than (i) a Saturday or Sunday or
           ------------
legal holiday or a day on which banking institutions in the city or cities (A)
in which the principal offices of the Trustee, the Tender Agent or the
Remarketing Agent are located or (B) in which drawings under the Credit Facility
are required to be made, are authorized by law to close or (ii) a day on which
the New York Stock Exchange is closed.

          "Code" means the United States Internal Revenue Code of 1986, as
           ----
amended. References to the Code and to Sections of the Code shall include
relevant final, temporary or proposed regulations thereunder.

          "Company Guarantee" means the Guarantee Agreement, dated as of
           -----------------
December 1, 1988 by and between the Company and the Trustee.

          "Completion Date" means the date of completion of the acquisition,
           ---------------
construction, installation and equipping of the Project (hereinafter defined) as
such date shall be certified as provided in Section 4.3 hereof.

          "Cost of Construction" with respect to the Project means the
           --------------------
following:

          (a) obligations incurred for labor and materials (including
     reimbursements payable to the Company or the Issuer and payments on
     contracts in the name of the Company or the Issuer) in connection with the
     acquisition, construction, installation and equipping of the Project;

                                      -2-
<PAGE>

          (b) the cost of contract bonds and of insurance of all kinds that may
     be required or necessary during the course of construction of the Project;

          (c) all costs of engineering services, including the costs for test
     borings, surveys, estimates, plans and specifications and preliminary
     investigation therefor, and for supervising construction, as well as for
     the performance of all other duties required by or consequent upon the
     proper construction of the Project;

          (d) overhead of the Company, to the extent not included in
     subparagraph (c) above, allocable to the Project by the Company in
     accordance with generally accepted accounting principles;

          (e) interest to accrue in respect of the Bonds to the Completion Date;

          (f) amounts paid to the United States Treasury pursuant to (S) 1.103-
     15AT(d) and (e) of Temporary Treasury Regulations or any regulations
     promulgated pursuant to Section 148(f) of the Code;

          (g) subject to the limitations of Section 147(g) of the Code, all
     expenses incurred in connection with the issuance of the Bonds, including
     without limitation initial compensation and expenses of the Trustee, legal
     expenses and fees, costs of printing and engraving, recording and filing
     fees, compensation of the underwriters, if any, rating agency fees and
     costs of the Letter of Credit;

          (h) all other costs which may properly be paid or accrued for the
     acquisition, construction, installation, equipping or financing of the
     Project; and

          (i) any sums required to reimburse the Company for advances made for
     any of the above items or for any other costs incurred or for work done
     which are properly chargeable to the Project.

          "Event of Default" means any of the occurrences enumerated in Section
           ----------------
9.1 of this Agreement.

          "Exempt Costs" means Cost of Construction of the Project to the extent
           ------------
that the payment thereof would constitute, within the meaning of Sections
142(a)(5) and (6) of the Code, the payment of costs to provide facilities that
are sewage facilities

                                      -3-
<PAGE>

or solid waste disposal facilities within the meaning of said Code section or
facilities functionally related and subordinate thereto, excluding amounts paid
as costs of issuance of the Bonds but including fees paid to the issuer of the
Letter of Credit during the construction of the Project.

          "Extraordinary Services" and "Extraordinary Expenses" means all
           ----------------------       ----------------------
services rendered and all expenses incurred by the Trustee under the Indenture
other than Ordinary Services and Ordinary Expenses.

          "Government Obligations" shall have the meaning set forth in Article I
           ----------------------
of the Indenture.

          "Guarantee Agreements" means collectively the Company Guarantee and
           --------------------
the Mead Guarantee.

          "Indenture" means the Trust Indenture, dated as of December 1, 1988,
           ---------
between the Issuer and the Trustee, pursuant to which the Bonds are authorized
to be issued, and including any Indenture supplemental thereto.

          "Issuer" means The Industrial Development Board of the City of Phoenix
           ------
City, Alabama, a public corporation of the State created and existing pursuant
to the Act, a resolution of the Board of Commissioners of Phenix City adopted on
June 14, 1960 and a Certificate of Incorporation duly filed for record on July
17, 1960 in the office of the Judge of Probate of Russell County, Alabama, and
its successors and assigns.

          "Lease Term" means the duration of the leasehold interest created
           ----------
hereby as specified in Section 5.1.

          "Mead" means The Mead Corporation, an Ohio corporation, and its
           ----
successors and assigns.

          "Mead Guarantee" means the Guarantee Agreement, dated as of December
           --------------
1, 1988 by and between Mead and the Trustee.

          "Net Proceeds" means, with respect to the Bonds, the amount of the
           ------------
proceeds of the sale of the Bonds deposited into the Project Fund less the
amount paid or to be paid out from such proceeds for the payment of costs of
issuance of the Bonds plus any investment income earned on moneys in the Project
Fund.

          "Net Proceeds" means, with respect to any insurance or condemnation
           ------------
awards, the gross proceeds from the insurance or condemnation award with respect
to which that term is used

                                      -4-
<PAGE>

remaining after the payment of all expenses (including, without limitation,
attorneys' fees and any Extraordinary Expenses of the Trustee) incurred in the
collection of such gross proceeds.

          "Ordinary Services" and "Ordinary Expenses" mean those services
           -----------------       -----------------
normally rendered and those expenses normally incurred by a trustee under
instruments comparable to the Indenture, including but not limited to fees of
its counsel.

          "Permitted Investments" shall have the meaning set forth in Article I
           ---------------------
of the Indenture;

          "Plans" means the plans and specifications prepared by or on behalf of
           -----
the Company for the Project, as the same may be revised from time to time by the
Company in accordance with the second paragraph of Section 4.1 hereof, which are
on file with the Company and accessible to the Issuer.

          "Project" means the sewage and solid waste disposal facilities
           -------
described in the Plans and, as designated on the date hereof, described
generally in Exhibit "B" hereto.

          "Project Fund" means the fund created pursuant to Section 5.04 of the
           ------------
Indenture.

          "Project Land" means the real property described in Exhibit "A" hereto
           ------------
less such real property as may be released from this Agreement pursuant to
Section 6.18 or taken by the exercise of the power of eminent domain as provided
in Section 7.2.

          "Project Site" shall mean the facility operated by the Company located
           ------------
near Phenix City, Alabama, which the Project is designed to serve.

          "State" means the State of Alabama.
           -----

          "Trustee" means Citibank, N.A., New York, New York, and its successors
           -------
and assigns and any other entity who may be serving as successor trustee or co-
trustee under the Indenture.

          "Trust Estate" shall mean the property described in the granting
           ------------
clauses of the Indenture.

          Section 1.2  Certain Rules of Interpretation.  The definitions set
                       -------------------------------
forth in Section 1.1 shall be equally applicable to both the singular and plural
forms of the words and terms therein defined and shall cover all genders.

                                      -5-
<PAGE>

          "Herein", "hereby", "hereunder", "hereof", "hereinbefore",
"hereinafter" and other equivalent words refer to this Agreement and not solely
to the particular Article, Section or subdivision in which such word is used.

          Reference herein to an Article number (e.g., Article IV) or a Section
                                                 ----
number (e.g., Section 3.2) shall be construed to be a reference to the
        ----
designated Article number or Section number hereof unless the context or use
clearly indicates another or different meaning or intent.

          Any terms defined in Article I of the Indenture and not defined herein
are incorporated by reference.

                                  ARTICLE II

                                REPRESENTATIONS
                                ---------------

          Section 2.1  Representations by the Issuer.  The Issuer makes the
                       -----------------------------
following representations as the basis for the undertakings on its part herein
contained:

          (a)  Organization and Authority.  The Issuer is a public corporation
               --------------------------
     duly organized and validly existing under the provisions of the Act by
     authority of a resolution adopted by the Board of Commissioners of Phoenix
     City of June 14, 1960 and a Certificate of Incorporation duly filed for
     record on July 17, 1960, in the office of the Judge of Probate of Russell
     County, Alabama, which Certificate of Incorporation has not been amended or
     revoked and is of full force and effect. The Issuer has all requisite power
     and authority under the Act to (i) issue the Bonds, (ii) use the proceeds
     thereof to acquire, construct, install and equip the Project, (iii) own,
     lease and dispose of the Project, and (iv) enter into, and perform its
     obligations under this Agreement and the Indenture. This Agreement and the
     Indenture have been duly authorized, executed and delivered by the Issuer
     and are legal, valid and binding agreements enforceable against the Issuer
     in accordance with their respective terms.

          (b)  Pending Litigation.  There are no actions, suits, proceedings,
               ------------------
     inquiries or investigations pending, or, to the knowledge of the Issuer,
     threatened against or affecting the Issuer in any court or before any
     governmental authority or arbitration board or tribunal, which involve the
     possibility of materially and adversely affecting the transactions
     contemplated by this Agreement or the Indenture or which, in any way, would
     adversely affect the validity or

                                      -6-
<PAGE>

     enforceability of the Bonds, the Indenture, this Agreement or any agreement
     or instrument to which the Issuer is a party and which is used or
     contemplated for use in the consummation of the transactions contemplated
     hereby or thereby.

          (c)  Issue, Sale and Other Transactions Are Legal and Authorized.  The
               -----------------------------------------------------------
     issuance and sale of the Bonds and the execution and delivery by the Issuer
     of this Agreement and the Indenture, and the compliance by the Issuer with
     all of the provisions of each thereof and of the Bonds (i) are within the
     purposes, powers and authority of the Issuer, (ii) to the best of the
     knowledge of the Issuer, have been done in full compliance with the
     provisions of the Act, are legal and will not conflict with or constitute
     on the part of the Issuer a violation of or a breach of or default under,
     or result in the creation of any lien, charge or encumbrance upon any
     property of the Issuer (other than as contemplated by this Agreement or the
     Indenture) under the provisions of, any charter instrument, by-law,
     indenture, mortgage, deed of trust, note agreement or other agreement or
     instrument to which the Issuer is a party or by which the Issuer is bound,
     or any license, judgment, decree, law, statute, order, rule or regulation
     of any court or governmental agency or body having jurisdiction over the
     Issuer or any of its activities or properties, and (iii) have been duly
     authorized by all necessary corporate action on the part of the Issuer;

          (d)  Governmental Consents.  Neither the nature of the Issuer nor any
               ---------------------
     of its activities or properties, nor any relationship between the Issuer
     and any other person, nor any circumstance in connection with the offer,
     issue, sale or delivery of any of the Bonds is such as to require the
     consent, approval or authorization of, or the filing, registration or
     qualification with, any governmental authority on the part of the Issuer in
     connection with the execution, delivery and performance of this Agreement
     and the Indenture or the offer, issue, sale or delivery of the Bonds, other
     than those already obtained. The Issuer has filed with the Alabama
     Securities Commission notification of the Issuer's intention to issue the
     Bonds as required by Code of Alabama, Section 8-6-110 et seq., as amended,
                                                           -------
     and the Director of the Alabama Securities Commission has issued a
     Certificate of Notification with respect to the Bonds pursuant to the
     aforesaid act and said Certificate of Notification has not been revoked or
     rescinded and is in full force and effect;

                                      -7-
<PAGE>

          (e)  No Defaults.  To the best of the Issuer's knowledge, no event has
               -----------
     occurred and no condition exists with respect to the Issuer which would
     constitute an "Event of Default" as defined in this Agreement or the
     Indenture or which, with the lapse of time or with the giving of notice or
     both, would become such an "Event of Default". The Issuer is not in default
     under the Act or under any charter instrument, by-law or other agreement or
     instrument to which it is a party or by which is it bound;

          (f)  No Prior Pledge.  Neither the Project, this Agreement nor any of
               ---------------
     the payments to be received pursuant to this Agreement have been pledged or
     hypothecated in any manner or for any purpose other than as provided in the
     Indenture as security for the payment of the Bonds; and

          (g)  Nature and Location of Project.  The Project will constitute a
               ------------------------------
     "project" within the meaning of the Act, and the acquisition, construction
     and installation of the Project is in furtherance of the public purpose of
     the Act. The Project will be located within 25 miles of the corporate
     limits of Phoenix City, and no part thereof is located within the corporate
     limits or the police jurisdiction of any other incorporated municipality or
     any county of any state other than Russell County, Alabama.

          Section 2.2  Representations by the Company.  The Company makes the
                       ------------------------------
following representations as the basis for the undertakings on its part herein
contained:

          (a)  Corporate Organization and Power.  The Company (i) is a
               --------------------------------
     corporation duly organized, validly existing and in good standing under the
     laws of the State of Delaware, (ii) is duly qualified to transact business
     as a foreign corporation in the State of Alabama, and (iii) has all
     requisite corporate power and authority and all necessary licenses and
     permits to own and operate its properties and to carry on its business as
     now being conducted and as presently proposed to be conducted;

           (b)  Pending Litigation.  There is no proceeding pending, or to the
                ------------------
     knowledge of the Company threatened, against or affecting the Company in
     any court or before any governmental authority, arbitration board or
     tribunal which is likely to materially and adversely affect the ability of
     the Company to perform its obligations under this Agreement;

                                      -8-
<PAGE>

          (c) Agreements Are Legal and Authorized. The execution and delivery by
              -----------------------------------
     the Company of this Agreement and the compliance by the Company with all of
     the provisions hereof and thereof (i) are within the corporate power of the
     Company, (ii) will not conflict with or result in any breach of any of the
     provisions of, or constitute a default under or result in the creation of
     any lien, charge or encumbrance upon any property of the Company (other
     than as contemplated by this Agreement and the Indenture) under the
     provisions of the Company's Certificate of Incorporation or Bylaws or any
     agreement or other instrument to which the Company is a party or by which
     it may be bound, or any license, judgment, decree, law, statute, order,
     rule or regulation of any court or governmental agency or body having
     jurisdiction over the Company or any of its activities or properties, and
     (iii) have been duly authorized by all necessary action on the part of the
     Company;

          (d) Governmental Consent. To the knowledge of the Company, neither the
              --------------------
     Company nor any of its business or properties, nor any relationship
     between the Company and any other person, nor any circumstances in
     connection with the execution, delivery and performance by the Company of
     this Agreement is such as to require the consent, approval or authorization
     of, or the filing, registration or qualification with, any governmental
     authority on the part of the Company other than those already obtained;

          (e) No Defaults. To the knowledge of the Company, no event has
              -----------
     occurred and no condition exists with respect to the Company that would
     constitute an Event of Default under this Agreement or which, with the
     lapse of time or with the giving of notice or both, would become such an
     Event of Default;

          (f) Compliance with Law. To the knowledge of the Company, the Company
              -------------------
     is not in violation of any laws, ordinances, governmental rules or
     regulations to which it is subject and has not failed to obtain any
     licenses, permits, franchises or other governmental authorizations
     necessary to the ownership of its properties or to the conduct of its
     business, which violation or failure to obtain is likely to materially and
     adversely affect the ability of the Company to perform its obligations
     hereunder;

          (g) Commencement of Construction. The acquisition, construction,
              ----------------------------
     installation and equipping of the Project commenced after November 3, 1987,
     and no obligation relating

                                      -9-
<PAGE>

     to the acquisition, construction, installation or equipping of the Project
     was paid or incurred prior to such date.

                                  ARTICLE III

                     LEASING CLAUSES AND TITLE TO PROJECT
                     ------------------------------------

          Section 3.1  Lease of the Project. The Issuer hereby leases to the
                       --------------------
Company, and the Company hereby leases from the Issuer, the Project at the rent
set forth in Section 5.3 and in accordance with the provisions hereof.

          Section 3.2  Title to Project. Upon the execution and delivery hereof,
                       ----------------
the Issuer agrees that it will furnish to the Company and the Trustee an opinion
of the Issuer's Counsel or other Counsel satisfactory to the Company and the
Trustee stating that the Issuer has good title in and to the Project.

          Section 3.3  Quiet Enjoyment. The Issuer warrants and agrees that it
                       ---------------
will defend the Company in the quiet enjoyment and peaceable possession of the
Project, free from all claims of all persons claiming by, through or under the
Issuer, throughout the Lease Term, so long as the Company shall perform the
agreements to be performed by it hereunder, or so long as the period for
remedying any failure in such performance shall not have expired.

                                  ARTICLE IV

                   ACQUISITION, CONSTRUCTION, INSTALLATION,
                   EQUIPPING AND COMPLETION OF THE PROJECT;
                             ISSUANCE OF THE BONDS
                   ----------------------------------------

          Section 4.1  Acquisition, Construction, Installation, Equipping and
                       ------------------------------------------------------
Completion of the Project. Not later than the delivery hereof the Issuer will
-------------------------
have acquired title in and to the Project, and subject to the provisions of
Section 4.4, the Issuer agrees that:

          (a) It will acquire, construct, equip and install facilities necessary
     for the Project. The aforesaid acquisition, construction, equipping and
     installation shall be substantially in accordance with the Plans. The
     Project shall be the property of the Issuer and subject to the terms
     hereof.

          (b) Subject to the provisions of the following paragraphs, it will
     cause to be acquired, constructed, equipped and installed such additional
     machinery, equipment

                                     -10-
<PAGE>

     and related property described in the list attached hereto as Exhibit "B"
     and such other items of machinery, equipment and related property as in the
     Company's judgment may be necessary for the operation of the Project. Such
     additional machinery, equipment and related property shall become a part of
     the Project and shall be the property of the Issuer and subject to the
     terms hereof.

          The Issuer and the Company agree that the Company from time to time
may supplement or amend the Plans (including additions thereto or omissions
therefrom), provided that no such amendment shall provide for a material
addition to, deletion from or modification of the Plans unless there shall have
been filed with the Issuer and the Trustee (i) a revised Exhibit "B" containing
a description of the Project as revised by such amendment or modification, the
accuracy of which shall have been certified by an Authorized Company
Representative, and (ii) the written opinion of a firm of nationally recognized
Bond Counsel experienced in the financing of solid waste disposal facilities
stating that (a) the Project as provided for in such modified or amended Plans
will constitute a "project" within the meaning of the Act, and (b) the
expenditure of moneys from the Project Fund to pay the Cost of Construction in
accordance with such amended or modified Plans will not impair the exemption of
interest on Bonds from federal income taxation.

          The Issuer hereby makes, constitutes and appoints the Company as its
true, lawful and exclusive agent for the acquisition, construction, equipping
and installation of the Project, and the Company hereby accepts such agency to
act and do all things on behalf of the Issuer, to perform all acts and
agreements of the Issuer hereinabove provided in this Section, and to bring any
actions or proceedings against any person which the Issuer might bring with
respect thereto as the Company shall deem proper. The Issuer hereby ratifies and
confirms all actions of, and assumes and adopts all contracts entered into by,
the Company with respect to the Project prior to the date hereof. This
appointment of the Company to act as agent and all authority hereby conferred or
granted is conferred and granted irrevocably until all activities in connection
with the acquisition, construction, equipping and installation of the Project
shall have been completed, and shall not be terminated prior thereto by act of
the Issuer or of the Company. So long as the Company is not in default
hereunder, upon the Completion Date (or at any time prior thereto upon the
request of the company) the Issuer will assign to the Company all warranties and
guarantees of all contractors, subcontractors, suppliers, architects and
engineers for the furnishing of labor, materials or equipment or

                                     -11-
<PAGE>

supervision or design in connection with the Project and any rights or causes of
action arising from or against any of the foregoing.

          The Issuer agrees to complete the acquisition, construction, equipping
and installation of the Project as promptly as practicable after receipt of the
proceeds from the sale of the Bonds, to continue said acquisition, construction,
equipping and installation with all reasonable dispatch and to use its best
efforts to cause said acquisition, construction, equipping and installation to
be completed as soon as practicable, delays incident to strikes, riots, acts of
God or the public enemy beyond the reasonable control of the Issuer only
excepted, but if said acquisition, construction and installation is not
completed within the time herein contemplated there shall be no resulting
liability on the part of the Issuer and no diminution in or postponement or
abatement of the rents and other payments required by Section 5.3 to be paid by
the Company.

          Section 4.2  Issuance of Bonds; Disbursements from the Project Fund.
                       -------------------------------------------------------
In order to provide funds to finance the Cost of Construction, the Issuer agrees
that it will initially issue and deliver the Bonds to the purchasers thereof and
apply and deposit the proceeds thereof in accordance with the terms of the
Indenture. The Company has approved the Indenture in form and substance,
approves the issuance of the Bonds in accordance with the Indenture and approves
the manner and purposes for which proceeds of the Bonds may be used and invested
pursuant to the Indenture.

          The Issuer has authorized and directed the Trustee to disburse moneys
from the Project Fund for payment or reimbursement of the Cost of Construction.
Each disbursement from the Project Fund shall be made only upon receipt by the
Trustee of a written requisition signed by the Authorized Company Representative
in substantially the form of Exhibit "C" attached hereto, stating with respect
to each payment to be made: (a) the requisition number, (b) the name and address
(or wire transfer instructions) of the person, firm or corporation to whom
payment is due, (c) the amount to be paid, (d) certifying that each obligation
mentioned therein has been properly incurred and is a proper charge against the
Project Fund, specifying in reasonable detail the purpose and circumstances of
such obligation and certifying that such obligation has not been the basis of
any previous withdrawal from the Project Fund, and (e) certifying that payment
of such requisition will not result in less than 97% of the total proceeds of
the sale of the Bonds (excluding amounts applied to pay costs of issuance of the
Bonds) expended at that time having been used to pay Exempt Costs.

                                     -12-
<PAGE>

          In approving or certifying any requisition under this Section the
Issuer and the Trustee may rely as to the completeness and accuracy of all
statements in such requisition upon the approval of or certification to such
requisition by the Authorized Company Representative, and the Company hereby
agrees to indemnify and save harmless the Issuer and the Trustee, and each of
their directors, officers, members, agents and employees from any liability
incurred in connection with any requisition so approved or certified.

          Section 4.3  Establishment of Completion Date; Excess Proceeds.  The
                       -------------------------------------------------
Completion Date shall be evidenced to the Trustee by a certificate of the
Authorized Company Representative: (i) stating that the Project has been
completed substantially in accordance with the Plans, (ii) stating that, except
for amounts retained by the Trustee at the Company's direction for any Cost of
Construction of the Project not then due and payable or which is in dispute, the
entire Cost of Construction of the Project has been paid, and (iii) stating that
not less than 95% of the total proceeds of the sale of the Bonds have been used
to pay Exempt Costs. Notwithstanding the foregoing, such certificate may state
that it is given without prejudice to any rights against third parties which
exist at the date of such certificates or which may subsequently come into
being.

          In the event that moneys shall remain in the Project Fund after
payment of all Cost of Construction of the Project, such moneys shall, at the
direction of the Company, be used (i) for the redemption of Bonds in the largest
amount possible at the earliest date permitted by the Indenture at which the
redemption price for such Bonds to be redeemed is 100% of the principal amount
thereof plus accrued interest to the redemption date or for the purchase of
Bonds pursuant to Article IV of the Indenture or otherwise for the purpose of
cancellation at any time prior to the earliest date permitted by the Indenture
for the redemption of Bonds, (ii) paid into the Bond Fund to pay interest on the
Bonds, or (iii) a combination of (i) and (ii) above; provided, however, that
such moneys shall not be used as described in (ii) or (iii) above unless the
Company supplies the Trustee with an opinion of Bond Counsel to the effect that
such use will not adversely affect the tax-exempt status of the interest on the
Bonds. The Company agrees that any investments which it may direct of such
amounts shall result in a yield on such investments, computed in accordance with
the applicable provisions of (S)(S) 1.103-13 and 1.103-14 of the Treasury
Regulations, not in excess of the yield (computed in the same manner) on the
Bonds.

                                      -13-
<PAGE>

          Section 4.4  Insufficiency of Project Fund. The Issuer does not make
                       -----------------------------
any warranty, either express or implied, that the amounts in the Project Fund
and available for payment of the Cost of Construction of the Project will be
sufficient to pay all of the Cost of Construction. The Company agrees that in
the event that moneys in the Project Fund are insufficient to pay all of the
Cost of Construction, the Company shall complete the acquisition, construction,
installation and equipping of the Project, and shall pay or make funds available
to the Issuer to pay that portion of the Cost of Construction in excess of the
moneys available therefor in the Project Fund. The Company agrees that, if after
exhaustion of the amounts of the Project Fund, it should pay any portion of the
Cost of Construction, it shall not be entitled to any diminution of the amounts
payable under as provided in Section 5.2 hereof.

          Section 4.5  Issuer to Pursue Remedies Against Suppliers, Contractors
                       --------------------------------------------------------
and Subcontractors and Their Sureties. At the direction and sole cost of the
-------------------------------------
Company (to the extent that such cost is not payable and actually paid from the
Project Fund), the Issuer will promptly proceed, either separately or in
conjunction with others, to exhaust the remedies of the Issuer against any
defaulting supplier, contractor or subcontractor and against any surety
therefor, for the performance of any contract made in connection with the
Project. If the Company shall so notify the Issuer, the Company may, in its own
name or in the name of the Issuer, prosecute or defend any action or proceeding
or take any other action involving any such supplier, contractor, subcontractor
or surety which the Company deems reasonably necessary, and in such event the
Issuer agrees to cooperate fully with the Company and to take all action
necessary, to the extent it might lawfully do so, to effect the substitution of
the Company for the Issuer in any such action or proceeding. Any moneys
recovered by way of damages, refunds, adjustments or otherwise in connection
with the foregoing prior to the Completion Date shall be paid into the Project
Fund and after the Completion Date shall be used as authorized by Section 4.3.

                                   ARTICLE V

                       EFFECTIVE DATE OF THIS AGREEMENT;
                   DURATION OF LEASE TERM; RENTAL PROVISIONS
                   -----------------------------------------

          Section 5.1  Effective Date of This Agreement; Duration of Lease Term.
                       --------------------------------------------------------
This Agreement shall become effective upon its execution and delivery and the
leasehold interest created hereby shall then begin, and, subject to the other
provisions hereof, shall expire at midnight, December 1, 2023, or sooner upon
payment or redemption of the Bonds as hereinafter provided subject to extension
as provided in Section 8.7.

                                     -14-
<PAGE>

     Section 5.2 Delivery and Acceptance of Possession. The Issuer agrees to
                 -------------------------------------
deliver to the Company sole and exclusive possession of the Project (subject to
the right of the Issuer and the Trustee to inspect the same pursuant to Section
6.4) on the Completion Date and the Company agrees to accept possession of the
Project upon such delivery; provided, however, that the Company shall be
permitted such possession of the Project prior to the Completion Date as shall
not interfere with the acquisition, construction, installation and equipping of
the Project.

     Section 5.3 Rental Payments.
                 ---------------

    (a) As rent for the Project, the Company agrees to pay to the Trustee, as
assignee and pledgee of and for the account of the Issuer, for deposit in the
Bond Fund, amounts sufficient, together with other moneys held by the Trustee
under the Indenture and available therefor, to pay the principal of, and the
redemption premium (if any) and the interest on, the Bonds as the same become
due pursuant to the terms of the Indenture, as follows:

               (i)   On or prior to each date upon which interest on the Bonds
           is payable under the Indenture, a sum which will be equal to the
           interest on the Bonds coming due on such dates;

               (ii)  On or prior to any redemption date for the Bonds, a sum
           equal to the principal of, and the redemption premium (if any) and
           the interest on, the Bonds which are to be redeemed on such date; and

               (iii) On or prior to December 1, 2023, a sum which will be equal
           to the principal amount of the Bonds coming due on such date.

If the Company defaults in any payment required by this paragraph (a), the
Company will pay interest (to the extent allowed by law) on such amount until
paid at the rate provided for in the Bonds.

           (b)  In furtherance of the foregoing, so long as any Bonds are
outstanding the Company will pay all amounts required to prevent any deficiency
by an act or failure to act by the Trustee, the Company, the Issuer, the Tender
Agent or any other person.

           (c)  The Company will also pay: (i) the fees of the Trustee for
rendering Ordinary Services and the Ordinary Expenses

                                      -15-
<PAGE>

of the Trustee and any Paying Agents under the Indenture, such fees and
expenses to be paid directly to the Trustee or Paying Agents for their
respective accounts as and when such fees and expenses become due and payable,
(ii) any fees for Extraordinary Services and the Extraordinary Expenses of the
Trustee and (iii) any expenses in connection with any redemption of the Bonds.
The Company may, without constituting grounds for an Event of Default
hereunder, withhold payment of any fees for Ordinary Services and
Extraordinary Services and Ordinary Expenses and Extraordinary Expenses to
contest in good faith the necessity of the same or to contest in good faith
the necessity for any services performed and expenses paid or incurred by any
Paying Agent.

          (d) In addition to the payments required to be made by the Company
pursuant to paragraph (a) above, the Company shall have the option to pay to the
Trustee amounts sufficient to pay the purchase price of any Bonds which the
Company has the option to purchase in lieu of redemption pursuant to Section
8.07 of the Indenture. All such payments shall be made to the Trustee at its
principal corporate trust office or to the Tender Agent at its principal office,
as the case may be, in lawful money of the United States of America.

          (e) The Company will also pay, on or prior to each day on which a
payment of purchase price of a Bond which has been tendered shall become due, an
amount which will enable the Trustee or the Tender Agent, as the case may be, to
make such payment in full in a timely manner.

          (f) The Company need not pay any amount paid to Bondholders from the
proceeds of a draw on the Letter of Credit or any Alternate Credit Facility.

          (g) The Company need not pay any amount required to be paid by
paragraphs (d) and (e) above to the extent of any amount paid to Bondholders
from the proceeds of a remarketing of Bonds in accordance with Section 3.02 of
the Indenture.

          Section 5.4 Obligation of the Company Unconditional.
The obligation of the Company to make the rental payments as provided in Section
5.3 and to perform and observe the other agreements on its part contained herein
shall be absolute and unconditional notwithstanding any change in the tax or
other laws of the United States of America or of the State of Alabama or any
political subdivision of either thereof or any failure of the Issuer to perform
and observe any agreement, whether express or implied, or any duty, liability or
obligation arising out of or connected with this Agreement. Nothing contained in
this Section

                                      -16-
<PAGE>

5.4 shall be construed to release the Issuer from the performance of any of the
agreements on its part herein contained; and, in the event the Issuer should
fail to perform any such agreement on its part, the Company may institute such
action against the Issuer as the Company may deem necessary to compel
performance or recover its damages for nonperformance so long as such action
shall not violate the agreements on the part of the Company contained in the
preceding sentence, but in no event shall the Company be entitled to any
diminution of the amounts payable as provided in Section 5.3 hereof.

     Section 5.5 Assignment and Pledge of Rental Payments and the Agreement. The
                 ----------------------------------------------------------
Issuer shall assign to the Trustee as security for the Bonds under the Indenture
all rights, title and interest of the Issuer in and to (i) the "Revenues"
(defined in the Indenture), (ii) this Agreement insofar as they relate to all
Bonds issued and outstanding under the Indenture (except for the Issuer's rights
providing that notices, approvals, consent, requests and other communications be
given to the Issuer and the Issuer's rights under Sections 6.3, 6.4 and 9.3
hereof) and (iii) all amounts on deposit from time to time in the Project Fund
and the Bond Fund. The Company assents to such assignment and hereby agrees
that, as to the Trustee, its obligations to make such payments shall be absolute
and shall not be subject to any defense or any right of set-off, counterclaim or
recoupment arising out of any breach by the Issuer or the Trustee of any
obligation to the Company, whether hereunder or otherwise, or out of any
indebtedness or liability at any time owing to the Company by the Issuer or the
Trustee.

     Section 5.6 Aqreement to Supply Letter of Credit. The Company shall provide
                 ------------------------------------
for the delivery of a Letter of Credit meeting the requirements of Section 6.01
of the Indenture to the Trustee simultaneously with the original issuance and
delivery of the Bonds.

     Section 5.7 Purchase of Bonds. The Issuer, with the consent of the Company,
                 -----------------
has set forth in Section 3.01 of the Indenture the terms and conditions relating
to such purchases and has set forth in Article XII of the Indenture the duties
and responsibilities of the Tender Agent with respect to the purchase of Bonds
and of the Remarketing Agent with respect to the remarketing of Bonds. The
Company approves the appointment by the Issuer of Smith Barney, Harris Upham &
Co. Incorporated as the initial Remarketing Agent and Citibank, N.A. as the
initial Tender Agent and hereby authorizes and directs the Tender Agent and the
Remarketing Agent to purchase, offer, sell and deliver Bonds in accordance with
the provisions of Section 3.01 and

                                      -17-
<PAGE>

Article XII of the Indenture. The Issuer acknowledges that the Remarketing
Agent, in undertaking its duties set forth in the Indenture with respect to the
determination of the interest rates borne by the Bonds, will be acting as agent
for and on behalf of the Issuer. The Issuer shall have no obligation or
responsibility, financial or otherwise, with respect to the purchase or
remarketing of Bonds or the making or continuation of arrangements therefor,
except that the Issuer shall generally cooperate with the Company, the Trustee,
the Tender Agent and the Remarketing Agent as contemplated in Article XII of the
Indenture.

          Section 5.8  Optional Purchase of Bonds. The Company, at any time and
                       --------------------------
from time to time, may furnish moneys to the Tender Agent accompanied by a
notice directing that such moneys be applied to the purchase of Bonds to be
purchased pursuant to Section 8.07 of the Indenture. Bonds so purchased shall be
delivered in accordance with Section 3.04 or 3.05 of the Indenture.

          Section 5.9  Determination of Interest Rate Periods. The Company may
                       --------------------------------------
determine the duration and type of the Interest Rate Periods (as defined in the
Indenture) as, and to the extent, set forth in Section 2.02 of the Indenture.

                                  ARTICLE VI

                               SPECIAL COVENANTS
                               -----------------

          Section 6.1  Use of Project. The Issuer hereby acknowledges that the
                       --------------
Company shall have singular and exclusive right to the use of the Project. The
Company hereby agrees that so long as the Project is operated, it shall be
operated as sewage or solid waste disposal facilities within the meaning of
Sections 142(a)(5) and 142(a)(6) of the Code. The Issuer makes no warranty,
either express or implied, as to the Project or that the Project will be
suitable for the Company's purposes.

          Section 6.2  Use of Proceeds. The Company hereby covenants that at
                       ---------------
least 95% of the total proceeds of the sale of the Bonds will be used to pay
Costs of Construction of the Project which constitute Exempt Costs and that all
of the Net Proceeds of the Bonds deposited within the Project Fund pursuant to
the Indenture will be used to pay the Cost of Construction of the Project.

          In addition, the Company covenants with the Issuer, for the benefit of
the Bondholders, that the proceeds of the Bonds

                                     -18-

<PAGE>

will not be used in any manner which would result in the loss of the exemption
from federal income taxation of the interest on the Bonds.

          Section 6.3  Indemnity Against Claims. The Company will also pay and
                       ------------------------
discharge and will indemnify and hold harmless the Issuer and the members,
officers, agents and employees of the Issuer from (a) any condition of the
Project caused by the Company, (b) any liens, taxes, assessments, impositions
and other charges upon payments by the Company to the Issuer hereunder, (c) any
breach or default on the part of the Company in the performance of any of its
obligations hereunder, (d) any act of negligence of the Company or of its
agents, contractors, servants, employees or licensees, (e) any act of negligence
of any assignee or sublessee of the Company, or of any agents, contractors,
servants, employees or licensees of any assignee or sublessee of the Company and
(f) any and all liability, damages, costs and expenses arising out of or
resulting from the acquisition, construction and installation of the Project or
the use or operation of the Project or any other activity carried out thereon or
in connection therewith or the transactions contemplated by this Agreement and
the Indenture, including the reasonable fees and expenses of counsel, except as
the same may arise out of the negligence or misconduct on the part of the
Issuer. If any such lien or charge is sought to be imposed upon payments, or any
such taxes, assessments, impositions or other charges are sought to be imposed,
or any such liability, damages, costs and expenses are sought to be imposed, the
Issuer will give prompt notice to the Company, and the Company shall have the
sole right and duty to assume, and will assume, the defense thereof, with full
power to litigate, compromise or settle the same in its sole discretion. The
indemnification provided by the Section shall survive the termination of this
Agreement.

          The Company agrees to indemnify the Trustee, and to hold it harmless
against, any loss, liability or expense incurred without negligence or bad faith
on its part, arising out of or in connection with the acceptance or
administration of the Indenture, including the reasonable costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties thereunder or hereunder.

          Section 6.4  Inspection of the Project. The Company agrees that the
                       -------------------------
Issuer and its duly authorized agents at reasonable times, and with the written
consent of the Company which shall not be unreasonably withheld, may enter upon
the Project Site and examine and inspect the Project and the books and records
of the Company with respect to the Project.

                                     -19-
<PAGE>

     Section 6.5 Company to Maintain Its Corporate Existence; Conditions Under
                 -------------------------------------------------------------
Which Exceptions Permitted. The Company will maintain its corporate existence,
--------------------------
will continue to be a corporation in good standing under the laws of the State,
will not dissolve or otherwise dispose of all or substantially all of its assets
and will consolidate with or merge into another legal entity or permit one or
more other legal entities (other than one or more subsidiaries of the Company)
to consolidate with or merge into it, or sell or otherwise transfer to another
legal entity all or substantially all its assets as an entirety and dissolve,
only if (a) the surviving, resulting or transferee legal entity is organized and
existing under the laws of the United States, a state thereof or the District of
Columbia, is solvent, is qualified to do business in the State as a foreign
corporation and (if not the Company) assumes in writing all the obligations of
the Company under this Agreement and (b) the Company or the surviving entity is
not immediately after such merger, consolidation or transfer in default in any
material respect under this Agreement.

     Section 6.6 Ownership; Further Assurances and Corrective Instruments. The
                 --------------------------------------------------------
Issuer covenants that it lawfully owns and is lawfully possessed of the Project
Land, that it has good and marketable fee simple title therein and thereto and
that it has or will acquire good and marketable title to the Project and that it
will defend said title and ownership therein and thereto and every part thereof
against the claims of all persons whomsoever. The Issuer and the Company agree
that they will, from time to time execute, acknowledge and deliver, or cause to
be executed, acknowledged and delivered, such supplements hereto and such
further instruments as may reasonably be required for correcting any inadequate
or incorrect description of the Project and for carrying out the intention or
facilitating the performance of this Agreement.

     Section 6.7 Maintenance of Project by Company.
                 ---------------------------------

     (a) The Company agrees that during the Lease Term, it will pay all costs of
operating, maintaining and repairing the Project; provided, that nothing in this
Section shall require the Company to maintain, operate or repair the Project if,
in the sole judgment of the Company, the Company shall determine that operation
of the Project or the manufacturing facilities the Project is designed to serve
is impossible, impracticable or uneconomic.

     (b) The Company may, from time to time, in its sole discretion and at its
own expense, make any additions,

                                      -20-
<PAGE>

modifications or improvements to the Project, including installation of
additional machinery, equipment, and related property, which it may deem
desirable for its business purposes; provided that all such additions,
modifications and improvements do not adversely affect the use of the Project as
solid waste disposal facilities. All machinery, equipment and related personal
property so installed by the Company shall not be subject to this Agreement or
the lien of the Indenture but shall be subject to the landlord's lien created
under the Code of Alabama, 1975, Section 35-9-60. A11 such machinery, equipment
and related property so installed by the Company may be modified or removed at
any time while there exists no Event of Default hereunder; provided, that any
damage to the Project occasioned by such modification or removal shall be
repaired by the Company at its own expense.

     (c) The Company shall not permit any mechanics', materialmen's, suppliers',
vendors' or other similar lien to be established or remain against the Project
for labor or materials furnished or services rendered in connection with any
additions, modifications, improvements, repairs, renewals or replacements so
made by it; provided, that if the Company shall first notify the Trustee of its
intention so to do, the Company may in good faith contest any mechanics',
materialmen's, suppliers', vendors' or other similar lien filed or established
against the Project, and in such event may permit the items so contested to
remain undischarged and unsatisfied during the period of such contest and any
appeal therefrom unless the Issuer or the Trustee shall notify the Company that
by nonpayment of any such items, the lien or security interests afforded by this
Agreement or as to any part of the Project or the payments to be made pursuant
to the Agreement or the Revenues will be materially endangered or the Project or
any part thereof or the payments to be made pursuant to the Agreement or the
Revenues will be subject to loss or forfeiture, in which event the Company shall
promptly pay and cause to be satisfied and discharged all such unpaid items. The
Issuer will cooperate fully with the Company in any such contest.

     Section 6.8 Redemption or Purchase of Bonds. The Issuer shall take all
                 --------------------------------
steps then necessary under the applicable provisions of the Indenture for the
redemption or purchase of Bonds upon receipt by the Issuer and the Trustee from
the Company of a written notice specifying:

     (a) the principal amount of Bonds to be redeemed or purchased;

     (b) the date of such redemption or purchase; and

                                     -21-
<PAGE>

     (c) in the case of a redemption of Bonds, directions to mail a notice of
redemption in accordance with Section 8.04 of the Indenture.

     Section 6.9 Investment of Bond Fund and Project Fund Moneys Permitted. Any
                 ----------------------------------------------------------
moneys held in the Bond Fund or the Project Fund shall be invested or reinvested
by the Trustee upon the request and direction of the Company in Government
Obligations and Permitted Investments, respectively. All such directions by the
Company shall be in compliance with applicable laws of the State. Such
investments shall be made upon telephonic direction of an Authorized Company
Representative which shall be promptly confirmed in writing and shall mature in
such amounts and at such times as may be necessary to provide funds when needed
to make payments from the Bond Fund or the Project Fund. The Trustee may make
any and all such investments through its own bond department. Any interest or
gain received from such investments shall be credited to and held in the Bond
Fund or the Project Fund, respectively, and any loss from such investments shall
be charged against the Bond Fund or the Project Fund, respectively.

     Section 6.10 Non-Arbitrage Covenant.
                  -----------------------

     (a) The Company and the Issuer each covenants that it shall take no action,
nor shall the Company direct the Trustee to take or approve the Trustee's taking
any action or direct the Trustee to make or approve the Trustee's making any
investment or use of proceeds of the Bonds or any other moneys which may arise
out of or in connection with, this Agreement, the Indenture or the Project,
which would cause the Bonds to be treated as "arbitrage bonds" within the
meaning of Section 148 of the Code. In addition, the Company covenants and
agrees to comply with the requirements of Section 148(f) of the Code as it may
be applicable to the Bonds or the proceeds derived from the sale of the Bonds or
any other moneys which may arise out of or in connection with, this Agreement,
the Indenture or the Project.

     (b) Unless the Company shall supply the Trustee and the Issuer with an
opinion of Bond Counsel to the effect that failure to comply with all or any
portion of this subsection (b) will not, by itself adversely affect the
exclusion of the interest payable on the Bonds from gross income for purposes of
federal income taxation, the Company hereby further covenants and agrees with
the Issuer, as follows:

     (1) If any part of the "gross proceeds" (hereinafter defined) of the Bonds
has not been expended on Cost of

                                      -22-
<PAGE>

Construction within six (6) months of the date of issuance and delivery of the
Bonds, the Company shall invest or cause such gross proceeds to be invested in
the manner described in subparagraph (A) below and shall pay or cause to be paid
to the United States the amounts described in subparagraph (B) below in
accordance with the terms and conditions set forth therein.

          (A) Except during any "temporary period" (hereinafter described, the
     aggregate amount of gross proceeds of the Bonds which are invested in
     "nonpurpose obligations" (hereinafter defined) having a "yield"
     (hereinafter defined) higher than the yield on the Bonds shall at no time
     during any "bond year" (hereinafter defined) exceed one hundred fifty
     percent (150%) of the "debt service" (hereinafter defined) on the Bonds for
     such bond year. In addition, the aggregate amount of gross proceeds of the
     Bonds invested in nonpurpose obligations having a yield higher than the
     yield on the Bonds shall be promptly and appropriately reduced as the
     amount of outstanding Bonds is reduced (whether by payment at maturity,
     mandatory sinking fund redemption, redemption prior to maturity, or
     otherwise). The Company shall not be required to sell or dispose of
     nonpurpose obligations if such sale or disposition would result in the
     realization of a loss, for federal income tax purposes, that exceeds the
     amount that would be rebated to the United States pursuant to the
     provisions of subparagraph (b)(l)(B) below (but for such sale or
     disposition), at the time of such sale or disposition if a rebate were due
     at such time. The provisions of the foregoing sentence shall not apply to
     the extent that other nonpurpose obligations acquired with the gross
     proceeds of the Bonds may be sold or disposed of without incurring the loss
     described above, and in any event the provisions of the foregoing sentence
     shall cease to apply thirty (30) days after the last day of the first
     "computation period" (defined in subparagraph (b)(l)(B)) ending thereafter
     on which such nonpurpose obligations can be sold or disposed of without
     incurring the loss described hereinabove. The provisions of this
     subparagraph (A) shall not apply to gross proceeds of the Bonds while such
     amounts are invested for the temporary periods described in Treasury
     Regulations (S) 1.103-15AT(c)(2).

          (B) At the time or times hereinafter set forth, the Company shall pay
     or shall cause the Trustee to pay

                                     -23-
<PAGE>

     to the United States an amount (the "Rebate Amount") which is equal to the
     sum of:

          (i)  the excess of --

               (a)  the aggregate amounts earned from the date of issuance and
          delivery of the Bonds on all nonpurpose obligations in which gross
          proceeds of the Bonds have been invested (other than nonpurpose
          obligations attributable to an excess described herein) over

               (b)  the aggregate amounts which would have been earned if the
          yield on such nonpurpose obligations (other than nonpurpose
          obligations attributable to an excess described herein) had been equal
          to the yield on the Bonds, plus
                                     ----

          (ii)  any income attributable to the excess described in clause (i)
     above.

The Rebate Amount payable to the United States shall be determined annually by
the Company for each bond year during which Bonds remain outstanding and upon
retirement of the last of the Bonds (each such period is hereinafter referred to
as a "computation period"). Such Rebate Amounts shall be deposited annually in
the Excess Investment Earnings Account created pursuant to the provisions of the
Indenture. The Rebate Amount shall be paid to the United States in installments,
as follows:

          (I) subject to clause (III) below, the first such installment shall be
     paid no later than thirty (30) days after the end of the fifth (5th) bond
     year of the Bonds;

          (II) subject to clause (III) below, an additional installment shall be
     paid on or prior to the last day of each additional installment payment
     period during which any of the Bonds remain outstanding. For purposes of
     this clause (II), an installment payment period shall commence on the last
     day on which a preceding installment of the Rebate Amount was required to
     be paid, and shall end on the day preceding the fifth (5th) anniversary of
     such payment date;

                                     -24-
<PAGE>

                    (III) anything herein to the contrary notwithstanding, the
               last installment shall be paid no later than sixty (60) days
               after the last of the Bonds has been retired; and

                    (IV)  each installment shall be in an amount which, when
               aggregated with the amount of any prior installments paid to the
               United States hereunder, will equal at least ninety percent (90%)
               of the total Rebate Amount payable to the United States hereunder
               as of the date such installment is paid; provided, however, that
               the last installment shall be in an amount equal to the entire
               remaining balance of the Rebate Amount payable to the United
               States hereunder.

          Each such payment to the United States shall be made to the Internal
          Revenue Service, Philadelphia, Pennsylvania 19255, or to such other
          address as shall be specified by the Department of Treasury and shall
          be accompanied by (i) a copy of the Information Return for Private
          Activity Bond Issues (Internal Revenue Service Form 8038) filed by the
          Issuer upon the issuance of the Bonds and (ii) a statement summarizing
          the determination of the Rebate Amount required to be paid to the
          United States. The Company shall maintain or cause to be maintained
          records of such determinations for each computation period until six
          years after payment in full of the Bonds and shall make such records
          available to the Issuer, the Trustee and their representatives upon
          reasonable request therefor. The Issuer hereby agrees to cooperate
          with the Company in making the determinations for each computation
          period required pursuant to this subparagraph. The Trustee agrees to
          cooperate with the Company in respect of the Company's obligations
          under this Section 6.10 by providing information to the Company
          regarding the investment of funds pursuant to the Indenture. The
          Trustee shall have no responsibility or obligation to make any
          computations or determinations under this Section 6.10 or to monitor
          or investigate compliance by the Company with the provisions hereof.

          (3)  For purposes of clause (a) of subparagraph (b)(l)(B) of this
     Section, the Company, in determining the aggregate amounts earned on all
     nonpurpose obligations acquired with gross proceeds of the Bonds --

                                     -25-
<PAGE>

               (A)  will take into account any gain or loss incurred on the
          disposition of any such nonpurpose obligation, and

               (B)  unless the Issuer otherwise elects, will not take into
          account any amounts earned on nonpurpose obligations held in a "bona
          fide debt service fund" (hereinafter defined) for the Bonds during
          any bond year in which the gross earnings on such fund do not exceed
          $100,000.

          (4)  Except as provided in (S) 1.103-15AT(d)(6) of the Treasury
     Regulations with respect to the purchase of obligations of the United
     States Treasury, at no time shall any of the gross proceeds of the Bonds
     be invested in (A) nonpurpose obligations having a purchase price which is
     not equal to the fair market value of comparable obligations or producing
     a yield which is not equal to the fair market yield of comparable
     obligations, or (B) in any other manner resulting in a "prohibited payment"
     (within the meaning of (S) 1.103-15AT(d)(6) of the Treasury Regulations) of
     any portion of the Rebate Amount, directly or indirectly, to a party other
     than the United States.

     (c)  The terms "bond year", "debt service", "gross proceeds", "nonpurpose
obligations", and "yield" shall have the meanings set forth in Section 148 of
the Code and Treasury Regulation (S) 1.103-15AT(b), and the term "bona fide debt
service fund" shall have the meaning set forth in Treasury Regulation
(S) 1.103-13(b)(12).

     (d)  No provision of this Agreement shall be construed to impose upon the
Trustee any obligation or responsibility for compliance with arbitrage
regulations.

     Section 6.11  Removal and Substitution of Portions of Project. The Issuer
                   ------------------------------------------------
shall not be under any obligation to renew, repair or replace any inadequate,
obsolete, worn out, unsuitable, undesirable, inappropriate or unnecessary items
comprising the Project. If the Company, in its sole discretion, determines that
any such items have become inadequate, obsolete, worn out, unsuitable,
undesirable, inappropriate or unnecessary for its purposes at such time, the
Company may, without any responsibility or accountability to the Issuer or the
Trustee therefor, remove such items from the Project Site and (on behalf of the
Issuer) sell, trade in, or otherwise dispose of them (as a whole or in part)
provided that the Company shall either:

                                     -26-
<PAGE>

          (a)  substitute (either by direct payment of the costs thereof or by
     advancing to the Issuer the moneys necessary therefor) and install other
     machinery, equipment or related property having equal or greater utility
     (but not necessarily having the same function or value) in the operation of
     the Project as a solid waste disposal or pollution control facilities
     (provided such removal and substitution shall not impair operating unity),
     all of which substituted machinery, equipment or related property shall
     become a part of the Project; or

          (b)  not make any such substitution and installation, provided (i)
     that in the case of the sale of any such machinery, equipment or related
     property to anyone other than itself or in the case of the scrapping
     thereof, the Company shall pay into the Bond Fund the greater of the
     proceeds from such sale, the scrap value thereof or the original cost
     thereof less depreciation in accordance with generally accepted accounting
     principles, as the case may be, (ii) that in the case of the trade-in of
     such machinery, equipment or related property for other machinery,
     equipment or related property not to be installed as a part of the
     Project, the Company shall pay into the Bond Fund the amount of the greater
     of the credit received by it in such trade-in or the original cost thereof
     less depreciation in accordance with generally accepted accounting
     principles, and (iii) that in the case of the sale of any such machinery,
     equipment or related property to the Company or in the case of any other
     disposition thereof, the Company shall pay into the Bond Fund an amount
     equal to the original cost thereof less depreciation at rates calculated in
     accordance with generally accepted accounting principles.

The removal of any portion of the Project pursuant to the provisions of this
Section shall not entitle the Company to any diminution in or postponement or
abatement of the rents payable under Section 5.3.

     The Company shall promptly report to the Trustee each such removal,
substitution, sale, trade-in or other disposition which, together with other
prior unreported dispositions, in the aggregate results in proceeds under this
Section of $100,000 or more and shall pay to the Trustee such amounts as are
required by the provisions of the preceding subsection (b) of this Section to be
paid into the Bond Fund promptly after the sale, trade-in or other disposition
requiring such payment. The Company shall not remove or permit the removal of
any item constituting the Project except in accordance with the provisions of
this Section.

                                     -27-
<PAGE>

     The Company shall deliver to the Issuer appropriate documents conveying to
the Issuer title to any machinery, equipment or related property installed or
placed at the Project Site pursuant to this Section, and upon the request of the
Company, the Issuer shall deliver, and cause or direct the Trustee to deliver,
to the Company appropriate documents conveying to the Company title to any
property removed from the Project Site pursuant to this Section.

     Section 6.12  Taxes, Other Governmental Charges and Utility Charges. The
                   -----------------------------------------------------
Company agrees to pay and discharge all lawful real estate taxes, personal
property taxes, water charges, sewer charges, assessments (including, but not
limited to, special assessments for public improvements or benefits for which
the Company would have otherwise have been liable had it in fact been the owner
of the Project) and all other lawful governmental taxes, impositions and charges
of every kind and nature, ordinary and extraordinary, general or special,
foreseen or unforeseen, whether similar or dissimilar to any of the foregoing,
and all applicable interest and penalties thereon, if any, which at any time
during the term of this Agreement shall be or become due and payable by the
Issuer or the Company and which shall be lawfully levied, assessed or imposed

          (a)  upon or with respect to, or shall be or become liens upon, the
     Project or any portion thereof or any interest of the Issuer or the Company
     therein or under this Agreement;

          (b)  upon or with respect to the income or profits of the Issuer from
     the Project or under this Agreement;

          (c)  upon or with respect to the possession, operation, management,
     maintenance, alterations, repair, rebuilding, use or occupancy of the
     Project or any portion thereof; or

          (d)  upon this transaction or any document to which the Issuer or the
     Company is a party creating or transferring an interest or an estate in the
     Project;

under or by virtue of any present or future law, statute, ordinance, regulation
or other requirement of any governmental authority, whether federal, state,
county, city, municipal, school or otherwise.

     The Company shall, at its sole cost and expense, procure or cause to be
procured any and all necessary building permits, other permits, licenses and
other authorizations required for the

                                     -28-
<PAGE>

lawful and proper construction, use, occupation, operation and management of the
Project. The Company also agrees to pay or cause to be paid all lawful charges
for gas, water, sewer, electricity, light, heat, power, telephone and other
utility and service used, rendered or supplied to, upon or in connection with
the Project and the Issuer will cooperate with the Company in securing such
permits, licenses and authorizations.

     The Company may, at its own expense and in its own name and behalf or in
the name and behalf of the Issuer, in good faith contest any such taxes,
assessments and other charges and, in the event of any such contest, may permit
the taxes, assessments and other charges so contested to remain unpaid during
the period of such contest and any appeal therefrom. The Issuer shall cooperate
fully with the Company in any such contest. If the Company shall fail to pay any
of the foregoing items required by this Section to be paid by the Company, the
Issuer or the Trustee may (but shall be under no obligation to) pay the same,
and any amounts so advanced therefor by the Issuer or the Trustee shall become
an additional obligation of the Company to the one making the advancement, which
amounts, together with interest thereon at the rate of interest borne by the
Bonds from the date thereof, the Company agrees to pay.

     Section 6.13  Insurance Required.  Throughout the Lease Term the Company
                   ------------------
shall keep the Project continuously insured against such risks as are
customarily insured against by business of like size and type (other than
business interruption insurance), paying as the same become due all premiums in
respect thereto. Notwithstanding the foregoing, the Company may elect to self-
insure.

     Section 6.14  Application of Net Proceeds of Insurance.  The Net Proceeds
                   ----------------------------------------
of the insurance carried pursuant to the provisions of Section 6.13 shall be
applied as follows: (i) Net Proceeds of property and casualty insurance shall be
applied as provided in Section 7.1, and (ii) Net Proceeds of liability insurance
shall be applied toward extinguishment or satisfaction of the liability with
respect to which such insurance proceeds may be paid.

     Section 6.15  Additional Provisions Respecting Insurance.  All insurance,
                   ------------------------------------------
if any, required in Section 6.13 shall be taken out and maintained in insurance
companies selected by the Company and may be written with deductible amounts
comparable to those on similar policies carried by other companies engaged in
businesses similar in size and type and other respects as the Company. The
insurance hereby required, if any, may be contained in blanket policies now or
hereafter maintained by the Company.

                                     -29-
<PAGE>

          Section 6.16  Investment Credit. The Issuer agrees that any investment
                        -----------------
tax credit with respect to the Project or any part thereof shall be made
available to the Company, and the Issuer will fully cooperate with the Company
in any effort by the Company to avail itself of any such investment tax credit,
but neither the Issuer nor the Trustee shall have any responsibility or
liability for the Company's failure to receive any such investment tax credit.
The Issuer agrees to cause the Trustee to cooperate in making any investment tax
credit available to the Company.

          Section 6.17  Granting of Easements. If no Event of Default shall have
                        ---------------------
happened and be continuing, the Company may at any time or times cause to be
granted easements (including party wall agreements), licenses, rights-of-way
(temporary or perpetual and including the dedication of public highways) and
other rights or privileges in the nature of easements with respect to any
property included in the Project and such grant will be free from any lien or
security interest created by this Agreement, or the Company may cause to be
released existing easements, licenses, rights-of-way and other rights or
privileges in the nature of easements, held with respect to any property
included in the Project with or without consideration and the Issuer agrees that
it shall execute and deliver and will cause and direct the Trustee to execute
and deliver any instrument necessary or appropriate to confirm and grant or
release any such easement, license, right-of-way or other right or privilege
upon receipt of:

          (a) a copy of the instrument of grant or release, and

          (b) a written application signed by the president or any vice
     president of the Company requesting the execution and delivery of such
     instrument and stating

               (i) that such grant or release is not detrimental to the proper
          conduct of the business of the Company, and

               (ii) that such grant or release will not impair the effective use
          or interfere with the operation of the Project.

          Section 6.18  Release of Certain Land. Notwithstanding any other
                        -----------------------
provision hereof, the parties hereto reserve the right to amend this Agreement
at any time and from time to time by mutual agreement for the purpose of
effecting the release of and removal of

                                     -30-
<PAGE>

          (a) any unimproved part of the Project Land (on which none of the
     components comprising the Project is located but on which parking,
     transportation or utility facilities may be located) on which the Issuer
     proposes to construct improvements for lease or sale to another person or
     persons under another and different agreement, or

          (b) any part of the Project land with respect to which the Issuer
     proposes to grant an easement or convey a fee, interest or other title to
     a railroad or other public or private carrier or to any public utility or
     public body in order that transportation facilities or services by rail,
     water, road or other means or utility services for the Project may be
     provided, increased or improved; provided, that if at the time any such
     amendment is made any of the Bonds are outstanding, there shall be
     deposited with the Trustee the following:

               (i) a copy of such amendment as executed;

               (ii) a resolution of the Issuer (A) stating that the Issuer is
          not in default under any of the provisions hereof or of the Indenture
          and that the Company is not to the knowledge of the Issuer in default
          under any of the provisions hereof, (B) giving an adequate legal
          description of that portion of the Project Land to be released, (C)
          stating the purpose for which the Issuer desires the release, (D)
          stating that the improvements which will be constructed or the
          facilities and services which will be provided, increased or improved
          will be such as will promote at least one of the public purposes of
          the Issuer and (E) requesting such release;

               (iii) a certificate of an officer of the Company approving such
          amendment together with an officer's certificate stating that the
          Company is not in default under any of the provisions hereof;

               (iv) a copy of the agreement between the Issuer and such other
          person wherein the Issuer agrees to construct improvements on the
          portion of the Project Land so requested to be released and agrees to
          lease or sell the same to such other person, and wherein such other
          person agrees to lease or purchase the same from the Issuer, or a copy
          of the instrument granting the easement or conveying the title or
          other interest to a railroad, public utility or public body; and

                                      -31-
<PAGE>

               (v) a certificate of an Authorized Company Representative dated
          more than sixty (60) days prior to the date of such amendment and
          stating that, in the opinion of the person signing such certificate,
          (A) the portion of the Project Land so proposed to be released is
          necessary or desirable for railroad, utility services or roads to
          benefit the Project or is not otherwise needed for the operation of
          the Project for the purposes hereinabove stated, and (B) the release
          so proposed to be made will not impair the usefulness of the Project
          as a facility of a type which the Issuer is authorized to acquire
          under the laws pursuant to which the Issuer then exists, and will
          not destroy the means of ingress thereto and egress therefrom.

No release effected under this Section shall entitle the Company to any
diminution in or postponement or abatement of the rents payable under Section
5.3.

                                  ARTICLE VII

                     DAMAGE, DESTRUCTION AND CONDEMNATION
                     ------------------------------------

          Section 7.1  Damage and Destruction. Unless the Company shall have
                       ----------------------
elected to exercise its option to prepay all rentals or purchase the Project
pursuant to the provisions of Section 8.4, if prior to payment in full of the
Bonds the Project is destroyed (in whole or in part) or is damaged by fire or
other casualty, the Company, or the Issuer at the Company's direction, (i) shall
promptly replace, repair, rebuild or restore the property damaged or destroyed
in a manner which provides facilities generally comparable to the facilities as
existed prior to the event causing such damage or destruction, with such
changes, alterations and modifications (including the substitution and addition
of other property) as may be desired by the Company and as will not impair the
operation of the Project as solid waste disposal facilities, and (ii) shall
apply for such purpose so much as may be necessary of any Net Proceeds of
insurance resulting from claims for such losses, as well as any additional
moneys of the Company necessary therefor. All Net Proceeds of insurance
resulting from claims for such losses shall be paid to the Company. If said Net
Proceeds are not sufficient to pay in full the costs of such replacement,
repair, rebuilding or restoration, the Company shall nonetheless complete the
work thereof and shall pay that portion of the costs thereof in excess of the
amount of said Net Proceeds. The Company shall not, by reason of the payment of
such excess costs, be entitled to any reimbursement from the Issuer or any
abatement, diminution or postponement of the amounts payable under Section 5.3.

                                     -32-
<PAGE>

          Section 7.2  Condemnation. Unless the Company shall exercise its
option to prepay all rentals or purchase the Project pursuant to the provisions
of Section 8.4, if the title in and to, or the temporary use of, the Project or
any part thereof shall be taken under the exercise of the power of eminent
domain by any governmental body or by any other person acting under governmental
authority, the Company shall be obligated to continue to pay the rents specified
in Section 5.3. The Issuer and the Company shall cause the Net Proceeds received
by them or any of them, from any award made in such eminent domain proceeding,
to be paid to and held by the Company and applied in one or more of the
following ways:

          (a) the restoration of the Project to substantially the same condition
     as existed prior to the exercise of such power of eminent domain;

          (b) the acquisition, by construction or otherwise, of other solid
     waste disposal facilities suitable for the Company's operations at the
     Project Site (which solid waste disposal facilities will be deemed a part
     of the Project and available for use by the Company and will be leased to
     the Company hereunder without the payment of any rents other than herein
     provided to the same extent as if such other improvements were specifically
     described herein); provided, that such solid waste disposal facilities will
     be acquired subject to no liens, security interests or encumbrances prior
     to the lien or security interest afforded by this Agreement and the
     Indenture, other than Permitted Encumbrances;

          (c) redemption of the Bonds in accordance with the provisions of
     Article VIII of the Indenture; provided, that no part of any such
     condemnation award may be applied for such redemption unless (1) all of the
     Bonds are to be redeemed in accordance with the Indenture upon exercise of
     the option to purchase the Project pursuant to the provisions of Section
     8.01(a) of the Indenture, or (2) if less than all of the Bonds are to be
     redeemed, the Company shall furnish to the Issuer and the Trustee a
     certificate of the Authorized Company Representative stating (i) that the
     property forming a part of the Project that was taken in such eminent
     domain proceeding is not essential to the Company's use or occupancy of the
     Project, (ii) that the Project has been restored to a condition
     substantially equivalent to its condition prior to the taking in such
     eminent domain proceeding, or (iii) that solid waste disposal facilities
     have been acquired which are suitable for the Company's operations at the
     Project as contemplated by the foregoing subsection (b) of this Section; or

                                     -33-
<PAGE>

          (d)  payment into the Bond Fund of an amount sufficient to provide for
     payment in full of the Bonds.

     The Issuer shall cooperate fully with the Company in the handling and
conduct of any prospective or pending eminent domain proceeding with respect to
the Project or any part thereof and shall, to the extent it may lawfully do so,
permit the Company to litigate in any such proceeding in the name and on behalf
of the Issuer. In no event will the Issuer voluntarily settle, or consent to the
settlement of, any prospective or pending eminent domain proceeding with respect
to the Project or any part thereof without the written consent of the Company.

     Section 7.3  Condemnation of Company-Owned Property.  The Company shall be
                  --------------------------------------
entitled to the proceeds of any condemnation award or portion thereof made for
damages to or taking of its own property or for damages on account of the taking
of or interference with the Company's rights to possession, use or occupancy of
the Project.

                                 ARTICLE VIII

                 ASSIGNMENT, SUBLEASING, PLEDGING AND SELLING;
                  REDEMPTION; RENT PREPAYMENT AND ABATEMENT;
                  OPTION AND OBLIGATION TO PURCHASE PROJECT;
                      OPTION TO EXTEND TERM OF AGREEMENT
                 ---------------------------------------------

     Section 8.1  Assignment and Subleasing.  This Agreement may be assigned by
                  -------------------------
the Company and the Project may be subleased by the Company without the
necessity of obtaining the consent of the Issuer or the Trustee, subject,
however, to the following conditions:

     (a)  no assignment (other than pursuant to Section 6.5) or sublease shall
relieve the Company from primary liability for any of its obligations hereunder,
and if any such assignment occurs, the Company shall continue to remain
primarily liable for the payment of the rents specified in Section 5.3 and for
performance and observance of the other agreements on its part herein provided
to be performed and observed by it; and

     (b)  the Company shall, within 30 days after the delivery thereof, furnish
or cause to be furnished to the Issuer and to the Trustee a true and complete
copy of each such assignment or sublease, as the case may be, together with any
instrument of assumption.

                                     -34-
<PAGE>

     Section 8.2  Pledge Under Indenture.  Under the terms of the Indenture, the
                  ----------------------
Issuer shall assign and create a security interest with respect to its interest
in, and pledge all rents, revenues and receipts arising out of or in connection
with its ownership of, the Project to the Trustee, all as security for the
payment of the principal of and interest on the Bonds, but the Indenture and
said assignment and pledge shall be subject and subordinate to this Agreement.

     Section 8.3 Restrictions on Sale of Project by Issuer. The Issuer agrees
                 -----------------------------------------
that, except as set forth in Section 8.2, it shall not (a) sell, assign,
transfer or convey the Project during the Lease Term, (b) create or suffer to be
created any assignment, pledge, charge, lien or encumbrance on the Trust Estate,
or (c) take any other action which might reasonably be construed as tending to
cause or induce the levy or assessment of ad valorem taxes on the Project or on
its title in and to the Project. If the laws of the State at the time permit
such action to be taken, nothing contained in this Section shall prevent the
consolidation of the Issuer with, or the merger of the Issuer into, or the
transfer of the Project as an entirety to, any public corporation whose property
and income are not subject to taxation and which has corporate authority to
carry on the business of owning and leasing the Project; provided (i) that no
such action shall be taken without the prior written consent of the Company,
unless such action shall be required by law, and (ii) that upon any such
consolidation, merger or transfer, the due and punctual payment of the principal
of and the interest on the Bonds, and the due and punctual performance and
observance of all the agreements hereof to be kept and performed by the Issuer,
shall be expressly assumed in writing by the corporation resulting from such
consolidation or surviving such merger or to which the Project shall be
transferred as an entirety.

     Section 8.4  Prepayment of Rents; Option to Purchase Project; Obligation to
                  --------------------------------------------------------------
Purchase Project.
----------------

          (a)  The Company shall have the option to prepay any part of the rents
     payable under Section 5.3, and the Issuer agrees that the Trustee may
     accept such prepayment when the same is tendered by the Company, upon
     giving written notice to the Trustee at least four Business Days prior to
     the thirtieth day before the date set for redemption, to the extent that
     the Bonds are subject to optional redemption in part pursuant to Section
     8.01(a) of the Indenture.

          (b)  The Company shall have the option to purchase the Project by
     prepaying all of the rents payable under Section

                                     -35-
<PAGE>

     5.3, and the Issuer agrees that the Trustee may accept such prepayment when
     the same is tendered by the Company, upon giving written notice to the
     Trustee at least four Business Days prior to the thirtieth day before the
     date set for redemption, to the extent that the Bonds are subject to
     optional redemption in whole pursuant to Section 8.01(a) of the Indenture.

          (c)  The Company shall be obligated to prepay a portion of the rentals
     payable under Section 5.3, and the Issuer agrees that the Trustee may
     accept such prepayment when the same is tendered by the Company, to the
     extent that the bonds are subject to mandatory redemption in part pursuant
     to Section 8.01(b) of the Indenture.

          (d)  The Company shall be obligated to purchase the Project by
     prepaying all of the rents payable under Section 5.3, or to prepay all of
     the rents payable under Section 5.3 without purchasing the Project, and the
     Issuer agrees that the Trustee may accept such prepayment when the same is
     tendered by the Company, to the extent that Bonds are subject to mandatory
     redemption in whole pursuant to Section 8.01(b) of the Indenture.

          (e)  The Company shall have the option to purchase the Project by
     providing for payment of the Bonds pursuant to Article XV of the Indenture.

          (f)  The Company shall be obligated to purchase, and the Issuer agrees
     to sell, the Project for ten dollars ($10.00) at the expiration of the
     Lease Term, following payment in full of the Bonds.

All prepaid rents shall be used for the redemption or purchase of Bonds in the
manner and to the extent provided in the Indenture. The options granted to the
Company pursuant to this Section shall be and remain prior and superior to the
Indenture and may be exercised whether or not there exists an Event of Default
hereunder, provided that the existence of such Event of Default will not result
in nonfulfillment of any condition to the exercise of any such option. Upon the
expiration of the Lease Term, or the sooner termination of the Lease Term, the
Issuer will, upon receipt of evidence provided by the Trustee satisfactory to it
that none of the Bonds remain outstanding under the Indenture, deliver to the
Company documents conveying to the Company good and marketable fee simple title
in and to the Project, as the Project then exists, subject to the following: (a)
those liens, security interests and encumbrances (if any) to

                                      -36-
<PAGE>

which said title in and to the Project was subject when conveyed to the Issuer,
(b) those liens, security interests and encumbrances created by the Company or
to the creation or suffering to which the Company consented, (c) those liens,
security interests and encumbrances resulting from the failure of the Company to
perform or observe any of its agreements contained herein, (d) Permitted
Encumbrances other than the Indenture, and (e) any right and title of any
condemning authority.

          Section 8.5  Rent Abatements If Bonds Paid Prior to Maturity.  If at
                       -----------------------------------------------
any time the moneys in the Bond Fund are sufficient to retire, in accordance
with the terms of the Indenture, all of the outstanding Bonds and to pay all
fees and charges of the Trustee due or to become due through the date on which
the last of the Bonds is to be retired, under circumstances not resulting in
termination of the Lease Term, and if the Company is not at the time otherwise
in default hereunder, the Company shall be entitled to use and occupy the
Project from the date on which such moneys are in the Bond Fund to and including
midnight on December 1, 2023, without the payment of rent during that interval
(but otherwise on the terms and conditions hereof).

          Section 8.6  References to Bonds Ineffective After Bonds Paid.  Upon
                       ------------------------------------------------
payment in full of the Bonds and all fees and charges of the Trustee, all
references herein to the Bonds and the Trustee shall be ineffective and neither
the Trustee nor the holders of any of the Bonds shall thereafter have any rights
hereunder saving and excepting those that shall have theretofore vested.
Reference is hereby made to Section 15.01 of the Indenture which sets forth the
conditions upon the existence or occurrence of which payment in full of the
Bonds shall be deemed to have been made.

          Section 8.7  Option to Extend.  The Company shall have, and is hereby
                       ----------------
granted, the option to extend the term of this Agreement for an additional term
ending on December 1, 2028; provided, however, that such option shall not be
exercisable at any time an Event of Default shall have occurred and be
continuing. If at the end of the Lease Term provided for in Section 5.1 hereof,
no Event of Default shall have occurred and be continuing, the Company shall be
deemed to have exercised such option to extend the term of this Agreement unless
it notifies the Board and the Trustee in writing to the contrary at least 30
days prior to the end of such Lease Term. For and during such additional term,
the Company will pay to the Board an annual rent of $100, payable in advance on
December 1, 2023 and on each December 1 thereafter (except December 1, 2028, on
which date such additional term shall end as aforesaid, but otherwise all

                                      -37-
<PAGE>

the terms and conditions of this Agreement shall apply during such additional
term; except that the provisions of Sections 7.1 and 7.2 shall not apply and
except further that the Company shall not be required to carry any insurance for
the benefit of the Trustee, but shall be required to carry insurance under
Section 6.13 for the benefit of the Board as its interest may appear. In the
event the Company exercises the option to extend the Lease Term granted in this
Section 8.7, it shall, at any time after commencement of such additional term,
have the right to terminate this Agreement upon giving to the Board notice in
writing not less than 10 days prior to the date of termination. At any time
during, or at the end of, the extended Lease Term provided for in this Section
8.7, the Company may purchase the Project for $100.

                                  ARTICLE IX

                        EVENTS OF DEFAULT AND REMEDIES
                        ------------------------------

          Section 9.1 Events of Default.  Each of the following shall be an
                      -----------------
"Event of Default" under this Agreement:

          (a)  An "Event of Default" occurs and is continuing under the
     Indenture or under either of the Guarantee Agreements.

          (b)  Failure by the Company to observe and perform any covenant,
     condition or agreement on its part to be observed or performed hereunder,
     for a period of ninety (90) days after written notice, specifying such
     failure and requesting that it be remedied, is given to the Company by the
     Issuer or the Trustee; provided, however, if the failure stated in the
     notice cannot be remedied within such period, it shall not constitute an
     "Event of Default" if corrective action is instituted by the Company within
     the applicable period and diligently pursued until the default is
     corrected.

          (c)  Either Mead or the Company shall (i) apply for or consent to the
     appointment of, or the taking of possession by, a receiver, custodian,
     trustee or liquidator of it or of all or a substantial part of its
     property; (ii) admit in writing its inability, or be generally unable, to
     pay its debts as such debts become due, (iii) make a general assignment for
     the benefit of its creditors, (iv) commence a voluntary case under the
     Federal Bankruptcy Code (as now or hereafter in effect), (v) file a
     petition seeking to take advantage of any other law relating to bankruptcy,
     insolvency, reorganization, winding-up, or composition or adjustment of
     debts, (vi) fail to controvert in a timely or appropriate manner, or
     acquiesce in writing to, any petition filed against it in an involuntary
     case under said Federal Bankruptcy Code, or (vii) take any action for the
     purpose of effecting any of the foregoing.

                                     -38-
<PAGE>

          (d) A proceeding or case shall be commenced, without the application
     or consent of either Mead or the Company, in any court of competent
     jurisdiction, seeking (i) the liquidation, reorganization, dissolution,
     winding-up, or composition or adjustment of debts, of either Mead or the
     Company, (ii) the appointment of a trustee, receiver, custodian, liquidator
     or the like of either Mead or the Company or of all or any substantial part
     of any of their assets, or (iii) similar relief in respect of the Company
     under any law relating to bankruptcy, insolvency, reorganization, winding-
     up, or composition or adjustment of debts, and such proceeding or case
     shall continue undismissed, or any order, judgment or decree approving or
     ordering any of the foregoing shall be entered and continue unstayed and
     in effect, for a period of sixty (60) days from commencement of such
     proceeding or case or the date of such order, judgment or decree, or an
     order the Company shall be entered in an involuntary case under said
     Federal Bankruptcy Code.

          (e) The dissolution or liquidation of the Company except as may be
     permitted by the terms of Section 6.5.

The foregoing provisions of Section 9.1(b) are subject to the limitation that,
if by reason of force majeure the Company is unable in whole or in part to carry
                -------------
out its agreements herein contained other than those set forth in Section 5.3
hereof, an Event of Default shall not be deemed to have occurred during the
continuance of such inability. The term "force majeure" as used herein shall
mean the following: acts of God; strikes; lockouts or other industrial
disturbances; acts of public enemies; orders of any kind of the government of
the United States or of the State of Alabama or any of their departments,
agencies or officials or of any civil or military authority; insurrections;
riots; epidemics; landslides; lightning; earthquakes; fire; hurricanes;
tornadoes; storms; floods; washouts; droughts; arrests; restraints of government
and people; civil disturbances; explosions; breakage or accident to machinery,
transmission lines, pipes or canals; partial or entire failure of utilities; or
any other cause or event not reasonably within the control of the Company. The
Company agrees, however, to remedy to the extent practicable with all reasonable
dispatch the effects of any force majeure preventing the Company from carrying
out its agreements; provided that the settlement of strikes, lockouts and other
industrial disturbances shall be entirely within the discretion of the Company,
and the Company shall not be required to make settlement of strikes, lockouts
and other industrial disturbances by acceding to the demands of the opposing
party or parties when such course is in the judgment of the Company unfavorable
to the Company.

                                      -39-
<PAGE>

          Section 9.2  Remedies on Default. Whenever any Event of Default shall
                       -------------------
have occurred and be continuing, the Issuer may, in addition to any other remedy
now or hereafter existing at law, in equity or by statute, take either or both
of the following remedial steps:

          (a)  By written notice to the Company, the Issuer may declare a11
     amounts payable hereunder to be immediately due and payable, whereupon
     the same shall become immediately due and payable;

          (b) The Issuer may take whatever action at law or in equity may appear
     necessary or desirable to collect the amounts referred to in (a) above then
     due and thereafter to become due, or to enforce performance and observance
     of any obligation, agreement or covenant of the Company under this
     Agreement.

Any amounts collected pursuant to action taken under this Section 9.2 shall be
paid into the Bond Fund and applied in accordance with the provisions of the
Indenture or, if the Bonds have been fully paid (or provision for payment
thereof has been made in accordance with the provisions of the Indenture) and
the fees and expenses of the Trustee and the Paying Agents and all other amounts
required to be paid under the Indenture shall have been paid, to the Company.

          Section 9.3  Agreement to Pay Attorneys' Fees and Expenses. In the
                       ---------------------------------------------
event the Company should breach any of the provisions of this Agreement and the
Issuer or the Trustee should employ attorneys or incur other expenses for the
collection of amounts payable hereunder or the enforcement of performance or
observance of any obligation or agreement on the part of the Company herein
contained, the Company agrees that on demand therefor it will pay to the Issuer
or the Trustee (as the case may be) the reasonable fees of such attorneys and
such other reasonable expenses so incurred by the Issuer.

          Section 9.4  No Additional Waiver Implied by One Waiver. In the event
                       ------------------------------------------
any agreement contained in this Agreement should be breached by either party and
thereafter waived by the other party, such waiver shall be limited to the
particular breach so waived and shall not be deemed to waive any other breach
hereunder.

          Section 9.5 Notice of Default. The Company shall notify the Trustee
                      -----------------
and the Issuer of any Event of Default hereunder or under the Indenture or
either of the Guarantee Agreements promptly upon its acquiring knowledge
thereof.

                                     -40-
<PAGE>

                                   ARTICLE X

                                 MISCELLANEOUS
                                 -------------

          Section 10.1 Notices. All notices, certificates or communications
                       -------
hereunder shall be sufficiently given and shall be deemed given when delivered
or mailed by registered or certified mail, postage prepaid, addressed as
follows: if to the Issuer, c/o Smith & Smith, 1503 Broad Street, Phenix City,
Alabama 36867, Attention: Chairman; if to the Company, at Mead World
Headquarters, Courthouse Plaza Northeast, Dayton, Ohio 45463, Attention:
Treasurer; and if to the Trustee, at 5 Hanover Square, 14th Floor, New York,
New York, 10043, Attention: Corporate Trust Department. A duplicate copy of each
notice, certificate or other communication given hereunder by either the Issuer
or the Company to the other shall also be given to the Trustee. The Issuer, the
Company and the Trustee may, by notice given hereunder, designate any further or
different addresses to which subsequent notices, certificates or other
communications shall be sent.

          Section 10.2 Binding Effect. This Agreement shall inure to the benefit
                       --------------
of and shall be binding upon the Issuer, the Company and their respective
successors and assigns, subject, however, to the limitations contained in
Section 6.5 hereof.

          Section 10.3 Severability. In the event any provision of this
                       ------------
Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any
other provision hereof.

          Section 10.4 Amounts Remaining in the Bond Fund. Any amounts remaining
                       ----------------------------------
in the Bond Fund upon termination of this Agreement shall, to the extent
provided in the Indenture, belong to and be paid to the Company by the Trustee.

          Section 10.5 Amendments. This Agreement may not be terminated except
                       ----------
in accordance with the provisions hereof and may not be amended or supplemented
except by a written agreement in accordance with Article XIV of the Indenture
and signed by the parties hereto. In any event, prior notice of any proposed
amendment or supplement must be given to the Trustee.

          Section 10.6 Execution in Counterparts. This Agreement may be executed
                       -------------------------
in several counterparts, each of which shall be an original and all of which
shall constitute but one and same instrument.

                                     -41-
<PAGE>

          Section 10.7  Applicable Law. This Agreement shall be governed by and
                        --------------
construed in accordance with laws of the State, except that the rights,
limitations of rights, immunities, duties and obligations of the Trustee shall
be governed by and construed in accordance with the laws of the State of New
York.

          Section 10.8  Captions. The captions or headings in this Agreement are
                        --------
for convenience only and in no way define, limit or describe the scope or intent
of any provisions or sections of this Agreement.

          Section 10.9  Recordinq of Aqreement. This Agreement and every
                        ----------------------
assignment and modification hereof shall be recorded in the Office of the Judge
of Probate of Russell County, Alabama, or in such other office as may be at the
time provided by law as the proper place for such recordation.

          Section 10.10 Net Lease. This Agreement shall be deemed a "net lease,"
                        ---------
and the Company shall pay absolutely net during the Lease Term the rents
specified herein, without abatement, deduction or set-off other than those
herein expressly provided.

          IN WITNESS WHEREOF, the Issuer and the Company have caused this
Agreement to be executed in their respective corporate names and their
respective corporate seals to be hereunto affixed and attested by their duly
authorized officers, all as of the date first above written.

                                              THE INDUSTRIAL DEVELOPMENT
                                              BOARD OF THE CITY OF PHENIX
                                              CITY, ALABAMA
(Corporate Seal)

                                              By: /s/ Kenneth A. Roberts
                                                  ----------------------
                                                         Chairman

Attest:

/s/ Carlotta Waldrop
--------------------
Secretary

                                     -42-
<PAGE>

                                              MEAD COATED BOARD, INC.
(Corporate Seal)

                                              By: /s/ W. D. BLOEBAUM, JR.
                                                  -----------------------
                                                  Title: TREASURER

Attest:

/s/ JEFFREY L. HAYMAN
---------------------
Title: ASSISTANT SECRETARY

                                      -43-
<PAGE>

STATE OF ALABAMA    :
                    : ss.
COUNTY OF RUSSELL   :

          On this 20th day of December, 1988, before me appeared Kenneth
Roberts, to me personally known, who being by me duly sworn, did say that he is
Chairman of The Industrial Development Board of the City of Phenix City, Alabama
and that the seal affixed to the foregoing Lease Agreement is the sale of The
Industrial Development Board of the City of Phenix City, Alabama and that the
foregoing Lease Agreement was signed and sealed on behalf of The Industrial
Development Board of the City of Phenix City, Alabama, and the said Chairman
acknowledges the execution of the foregoing Lease Agreement as the free act and
deed of The Industrial Development Board of the City of Phenix City, Alabama.

          IN WITNESS WHEREOF, I hereunto set my hand and official seal.

                                    /s/
                                    --------------------------------
                                    Notary Public

[NOTARIAL SEAL]                     My Commission Expires: 2/25/92

                                     -44-
<PAGE>

STATE OF OHIO

COUNTY OF MONTGOMERY

          On this 22nd day of December, 1988, before me appeared W.D. Bloebaum,
Jr. to me personally known, who, being by me duly sworn, did say that he is
Treasurer of Mead Coated Board, Inc., a Delaware corporation, qualified to do
business in the State of Alabama, and that the seal affixed to the foregoing
Lease Agreement is the seal of Mead Coated Board, Inc., and that the foregoing
Lease Agreement was signed and sealed on behalf of Mead Coated Board, Inc. by
authority of its board of directors, and the said Treasurer acknowledges the
execution of the foregoing Lease Agreement as the free act and deed of Mead
Coated Board, Inc.

          IN WITNESS WHEREOF, I hereunto set my hand and official seal.

                                         /s/ Robert A. Selak
                                         ------------------------------
                                         Notary Public

[NOTARIAL SEAL]                          My Commission Expires:

                                         ROBERT A. SELAK, Attorney at Law
                                         Notary Public State of Ohio
                                         My Commission has no Expiration Date
                                         Section 147.03 O. R. C.

                                     -45-
<PAGE>

                                   EXHIBIT A

                                 PROJECT LAND

The Project Land includes the following property:

               WASTE WOOD CONVEYOR TO SCALPER (C-28506) AREA AND
               -------------------------------------------------
                          TRUCK DUMPER (C-28505) AREA
                          ---------------------------

          All that portion of land and structures lying 9' on each side of the
     following described centerline and also including any specifically noted
     areas which extend beyond said centerline strip:

          Commence at a monument having grid coordinates N 792,350.00,
     E 234,500.00, of the West Zone of the State of Georgia Coordinate System;
     and lying in Section 28, T 14 N, R 30 E, County of Russell, State of
     Alabama; thence N 31(degrees) 59' 52" E, 291.25' to the point of beginning;
     thence S 0(degrees) 00' W, 231.00' to a point on the north side of a
     rectangular area (Truck Dumper) bounded by a N 792,366.0, N 792,326.5, and
     E 234,642.0, and E 234,765.5, said rectangular area being the point of
     ending; said land being 0.21 (plus or minus) acres;

                 NO. 1 BARK TRANSFER CONVEYOR (C-28503) AREA,
                 --------------------------------------------
                 NO. 2 BARK TRANSFER CONVEYOR (C-28504) AREA,
                 --------------------------------------------
                      BARK HOG STRUCTURE (C-28534) AREA
                      ---------------------------------
                  AND REFUSE CONVEYOR SCALPER (C-28533) AREA
                  ------------------------------------------

          All that portion of land and structures lying 9' on each side of the
     following described centerline and also including any specifically noted
     areas which extend beyond said centerline strip:

          Commence at a monument having grid coordinates N 792,350.00,
     E 234,500.00, of the West Zone of the State of Georgia Coordinate System;
     and lying in Section 28, T 14, N, R 30 E, County of Russell, State of
     Alabama; thence N 31(degrees) 59' 52" E, 291.25' to the point of beginning;
     thence S 8(degrees) 20' 17" W, 284.46' to the center of a rectangular area
     which is

                                     A-46

<PAGE>

     parallel to last said course 22' north to south by 15' east to west;
     thence S 81(degrees) 39' 40" E, 843.58' to a parallel rectangular area
     (Bark Hog Structure) 26.00' north to south (10.00' lying south of last
     said course) by 37.50'; thence continue along last said course 27.00';
     thence N 45(degrees) 07' 38" E, 350.71' to the point of ending; said land
     being 0.63 + acres;

                              NO. 2 TURBINE AREA
                              ------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 793,150.19,
     E 233,250.02 of the West Zone of the State of Georgia Coordinate System;
     thence S 25(degrees) 19' 16" E, 663.98' to the point of beginning
     (N 792,550.0 E 233,534.0); thence S 0(degrees) 00' W, 50.00'; thence
     N 90(degrees) 00' E, 121.00'; thence N 0(degrees) 00' W, 50.00'; thence
     N 90(degrees) 00' W, 121.00' to the point of beginning; said land being
     0.14 (plus or minus) acres;

                     SANITARY PACKAGE TREATMENT PLANT AREA
                     -------------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 792,350.00,
     E 234,500.00, of the West Zone of the State of Georgia Coordinate System;
     thence S 48(degrees) 35' 13" W, 1186.73' to the point of beginning
     (N 791,565.0. E 233,610.0); thence S 0' 00" W, 12.00'; thence
     N 90(degrees) 00' W, 64.00'; thence N 0' 00" W, 12.00'; thence N 90' 00"
     E, 64.00' to the point of beginning; said land being 0.02 (plus or minus)
     acres; and

                            NO. 3 BARK BOILER AREA
                            ----------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 793,150.19,
     E 233,250.02 of the West Zone of the State of Georgia Coordinate System;
     thence S 29(degrees) 39' 25" E, 461.76' to the point of beginning
     (N 792,748.92, E 233,478.50); thence N 90(degrees) 00' E, 73.57'; thence
     S 0(degrees) 00' W,  34.50'; thence N 90(degrees)

                                     A-47

<PAGE>

     00' W, 11.82'; thence S 0(degrees) 00' W, 143.17'; thence N 90(degrees)
     00' W, 90.62'; thence N 0(degrees) 00" W, 83.08'; thence N 90(degrees)
     00" E, 28.87'; thence N 0(degrees) 00' W, 94.59' to the point of beginning;
     said land being 0.32 (plus or minus) acres;

     (collectively, the "Unimproved Land"); less, in each case, any structures
     constructed and leased pursuant to a Lease Agreement dated July 1, 1977,
     and recorded in Deed Book 550 at Pages 51-94 (as amended to date, the "1977
     Lease") under which Lessor leased to Georgia Kraft Company ("Georgia
     Kraft") a parcel of land in Russell County, Alabama as more particularly
     described in Exhibit A to the Lease (the "1977 Land"), together with
     certain items of equipment described in Exhibit B to the 1977 Lease
     (Georgia Kraft has assigned its interest in the 1977 Lease to Mead Coated
     Board, Inc.);

together with the following easements:

          (a)  An easement and right for pedestrian and vehicular traffic to use
     all present and future walks, railroads, roads, driveways and docks upon
     the Board Premises (the 1977 Land less and except the 1988 Land) in order
     to provide all necessary or convenient ingress or egress between the
     Unimproved Land and railroads, public roads and highways and the
     Chattahoochee River and to permit passage between the Unimproved Land and
     the Board Premises;

          (b)  An easement and right for the passage of pedestrians and vehicles
     and for the construction, erection, installation, operation, maintenance,
     renewal, replacement and use of material conveying systems, including
     without limitation pipelines, through any part of the Board Premises
     necessary or convenient in order to assure the passage of equipment, raw
     materials, items in the process of manufacture, and finished products from
     the Unimproved Land to the Board Premises, including without limitation
     such rights and easements as are necessary for the movement of personnel,
     vehicles and materials among and between the various parcels of land
     comprising the Board Premises in order to permit and facilitate the
     operation of the Project;

          (c)  An easement and right to erect, install, construct, maintain,
     renew, replace and use on, over and under any part of the Board Premises,
     such pipes, conduits, and wires as are necessary or convenient to insure
     access to and an adequate system for or supply of gas, oil, steam,
     compressed air, process and space heat, water, fire protection, sewage and
     industrial waste disposal, electricity, communications,

                                     A-48

<PAGE>

     instrumentation and control, and other similar facilities to the Unimproved
     Land and the Project including, without limitation, the right to make
     connections with machinery, equipment, pipes, conduits and wires,
     structures and other improvements and appurtenances thereto, on the Board
     Premises; and

          (d)  An easement and right to create and maintain upon the Board
     Premises encroachments of equipment, structures or other improvements which
     will be included on the Unimproved Land and within the Project as presently
     planned, and any similar replacements or substitutions of portions of the
     Project for as long as any such equipment, structures or other improvements
     remain standing, including without limitation the rights of lateral or
     party wall support, and to connect any such equipment, structure or other
     improvements to any structure or improvement on the Board Premises;

but subject to the following easements over the Unimproved Land in favor of the
Board Premises:

          (a)  An easement and right for pedestrian and vehicular traffic to use
     all present and future walks, railroads, roads, driveways and docks upon
     the Unimproved Land in order to provide all necessary or convenient ingress
     and egress among and between all portions of the Board Premises and between
     the Board Premises and the Unimproved Land, including without limitation
     portions on which additional improvements may be erected, and railroads,
     public works and highways and the Chattahoochee River and to permit passage
     among and between the various parcels of land comprising the Board
     Premises;

          (b)  An easement and right for the passage of pedestrians, vehicles,
     and for the construction, installation, operation, maintenance, renewal,
     replacement and use of material conveyance systems, including without
     limitation, pipelines, through any part of the Unimproved Land necessary or
     convenient in order to assure the passage of equipment, and finished
     products from one portion of the Board Premises to another or between the
     Board Premises and the Unimproved Land, including, without limitation such
     rights and easements as are necessary for the movement of personnel,
     vehicles and material among and between the various parcels of land
     comprising the Board Premises in order to permit and facilitate the
     operation of any facilities located on the Board Premises;

                                     A-49

<PAGE>

          (c)  An easement and right to erect, install, construct, maintain,
     renew, replace and use on, over and under any part of the Unimproved Land,
     such pipes, conduits, and wires and appurtenances as are necessary or
     convenient to assure access to and an adequate system for or supply of gas,
     oil, steam, compressed air, process and space heat, water, fire protection,
     sewage and industrial waste disposal, electricity, communications,
     instrumentation and control, and other similar facilities to the Board
     Premises, including without limitation, the right to make connections with
     machinery, equipment, pipes, conduits and wires, structures and other
     improvements and appurtenances thereto, on the Unimproved Land; and

          (d)  An easement and right to maintain any present equipment,
     structures or other improvements included within the facilities presently
     located on the Board Premises as encroachments upon the Unimproved Land as
     long as any such equipment, structures or other improvements remain
     standing, and to construct and maintain similar encroachments on the
     Unimproved Land in respect of any additional improvements constructed
     adjacent to the Unimproved Land, as long as any such additional
     improvements remain standing, including without limitation the rights of
     lateral or party wall support, and to connect such additional improvements
     to any structure or any improvements on the Unimproved Land.

                                     A-50

<PAGE>

                                  EXHIBIT "B"

                                      to

                            Lease Agreement between

                      THE INDUSTRIAL DEVELOPMENT BOARD OF
                       THE CITY OF PHENIX CITY, ALABAMA
                                      and
                            MEAD COATED BOARD, INC.
                         dated as of December 1, 1988

                                PROJECT SUMMARY

     Mead Coated Board, Inc. (the "Company") presently operates a linerboard
mill (the "Mill") in Russell County, Alabama, near the City of Phenix City,
Alabama. In connection with an expansion of the Mill, the Company is undertaking
the acquisition, construction and installation of a wood refuse burning boiler
which will burn bark, sawdust, fines and other waste, including fuel wood chips,
derived from the cutting and processing of trees ("wood waste") to produce
steam for use in the manufacturing process at the Mill and certain other sewage
facilities and solid waste disposal facilities.

     The "Project" will consist of six major subsystems -- a wood waste
receiving, storing and handling system; a wood waste fired boiler (the "Boiler")
and auxiliary equipment, including facilities to control air pollution in
connection with the operation of the Boiler; modifications to two existing wood
waste boilers; an ash disposal system to dispose of bottom ash from the Boiler;
a system to dispose of sludge and other solid waste generated at the Mill; and a
sanitary sewage treatment system.

     The Boiler will dispose of wood waste material generated by the Company in
its operations and wood waste which the Company will obtain from sawmills and
other wood users in the area surrounding the Mill which generate the wood waste
in the course of processing wood products. The wood waste will be brought to the
Mill by the outside suppliers and unloaded by means of an hydraulic truck dumper
which is included as part of the Project. The truck dumper will discharge the
wood waste into a live bottom hopper from which it will be delivered onto a
transfer conveyor. The transfer conveyor discharges the wood waste to a rotary
disc screen for the removal of oversized particles. All oversized material
rejected by the rotary disc screen will pass through a bark hog for size
reduction and rejoin the wood waste which

                                     B-51
<PAGE>

passes through said screen on a storage conveyor which will discharge such
material into a wood waste storage area. An electromagnet will be installed
ahead of the bark shredder to remove tramp metal from the wood waste in order
to prevent damage to the bark hog.

     Wood waste will be reclaimed from the storage area and placed on a reclaim
conveyor which will discharge it onto a transfer conveyor. The transfer conveyor
will be equipped with an electromagnet to again remove tramp metal and prevent
damage to the boiler fuel feed system and will also be equipped with a
weightometer to measure fuel usage.

     From the transfer conveyor, the wood waste will be discharged onto an
existing reclaim conveyor to transfer the wood waste to the Boiler. The conveyor
will discharge the wood waste into a live bottom surge bin which will supply
fuel to the Boiler.

     The wood waste Boiler will consist of a two drum bent tube type boiler with
necessary boiler fittings and trim, steel supporting structure, tile and
refractory, insulated steel casing, accessories, tubular air heater, pneumatic
wood refuse fuel burners, variable speed fuel feeders, forced draft fan, induced
draft fan, ductwork, combustion controls with a flame safety system,
instrumentation, enclosure building, and the necessary foundations, electrical
systems and insulation.

     The Boiler will be specially designed and equipped to burn wood waste as
fuel. Special design features will include a stoker on which the wood waste will
be burned and by which the resulting ash will be discharged. In addition, the
Boiler will be designed to withstand the highly abrasive internal atmosphere
created by sand contained in wood waste.

     The wood waste will be injected into the Boiler by means of airswept fuel
feeders through the wall of the Boiler. A portion of the wood waste will be
burned in suspension and the remainder and some of the ashes from the combustion
will fall onto the grate at the bottom of the boiler furnace. The grate is
equipped with a large number of small holes through which preheated air is
forced to aid combustion. Energy released through the combustion of the wood
waste will be used to generate steam for process use. Boiler exhaust gases are
used to preheat combustion air for improved fuel efficiency.

     Electrical power generation (turbine generator) and distribution for the
solid waste disposal facilities is included in the Project.

                                     B-52
<PAGE>

     In order to meet air pollution control requirements, the Boiler will be
equipped with a multiple cyclone mechanical separator for removal of relatively
large particles entrained in the exhaust gases and an adjustable throat wet
venturi scrubber whereby water is injected into the boiler exhaust gas train to
wash entrained particulates from the gases.

     Certain modifications will be made to two existing wood waste boilers,
including an upgrade of the existing boiler feedwater treatment system and an
upgrade of the distributed control system for the existing wood waste boilers.

     Bottom ashes from the combustion process in the Boiler will accumulate on
the grate and will be discharged into an ash hopper for disposal by means of an
ash handling system. This system is a sluice system in which the ash will be
mixed with water and pumped to three ash ponds.

     The sludge disposal system will dispose of sludge created in the treatment
of Mill effluent. The sludge from the primary effluent treatment system will
be pumped to a sludge mix tank before passing through a macerator to break up
oversized solid pieces. This primary sludge will then be combined with sludge
from the secondary effluent treatment system and pumped to two rotary thickeners
and two sludge presses to remove water. Chemicals will be added to the sludge
prior to the thickeners to aid in dewatering. After this treatment, the sludge
is then transported in specially-designed trucks to an existing landfill for
final disposal.

     Sanitary waste will be collected and processed in a sanitary waste
treatment plant before discharge into the effluent treatment system.

                                     B-53
<PAGE>

     The estimated costs of the construction of the Project are as follows:

<TABLE>
<S>                                                     <C>
Wood waste handling system                              $ 3,621,270
     Bark conveyors
     Fines pneumatic conveyor system
     Truck dumper and conveyor
     Hog and screen system
     Wood waste reclaimers
  Reclaimed wood waste conveyors                          1,133,753

New wood waste boiler
  Boiler feedwater treatment system                       1,322,546*
  Boiler feedwater pumping system                           637,493*
  Removal and demolitional of
    existing facilities                                      79,532
  Distributed control system                                712,000*
  Boiler, including auxiliary equipment                  21,220,250
  Turbine generator                                         598,200*
  Power distribution system                                 178,932*

Modifications to existing wood waste boilers
  Upgrade boiler feedwater treatment system                 182,150*
  Upgrade existing wood waste boilers'
    distributed control system                            1,424,000

Ash handling system                                         200,000

Sludge disposal system (including sludge trucks)          2,969,417

Sanitary treatment system                                   427,524

Miscellaneous

  Vendor representatives assisting in
    installation                                             10,000
  Indirect costs relating to turnkey contracts            3,652,123
  Indirect costs relating to conventional contracts       2,197,687
  Interest during construction
    (net of anticipated investment earnings
    of $1,400,000)                                        1,600,000
                                                        -----------
TOTAL QUALIFYING COSTS                                  $42,166,877

Non-qualifying costs
  Gas supply system and gas burners for
    new wood waste boiler                               $   520,005
  New boiler feedwater treatment system                   1,013,118
                                                        -----------
TOTAL COSTS                                             $43,700,000
</TABLE>

* Allocated between qualifying and non-qualifying functions based on use.

                                     B-54
<PAGE>

                                  EXHIBIT "C"
                         REQUISITION AND CERTIFICATION

                       Request No._____ Date: __________

TO:       Citibank, N. A., as Trustee
          5 Hanover Square, 14th Floor
          New York, New York 10043

          Attention: Corporate Trust Department

          The undersigned Authorized Company Representative designated pursuant
to the terms of a Lease Agreement, dated as of December 1, 1988 (the
"Agreement"), between and among The Industrial Development Board of the City of
Phenix City, Alabama, a public corporation created and existing under the laws
of the State of Alabama (the "Issuer"), and Mead Coated Board, Inc., a Delaware
corporation (the "Company"), hereby requests that there be paid from the
"Project Fund" (herein below described) the sum of $__________ and in that
connection, DOES HEREBY CERTIFY, as follows:

          1. The requested payment has been properly incurred and is a proper
     charge against The Industrial Development Board of the City of Phenix City,
     Alabama Project Fund -- Mead Coated Board Project, 1988 and has not been
     the basis of any previous withdrawal from said Project Fund.

          2. Payment should be made to:

             Name:

             Address or Wire Instructions:

          3. The purpose and circumstances of such obligation are as follows:

                                      C-1
<PAGE>

          4.   Payment of such obligation will not result in less than 97% of
     the total proceeds of the sale of the "Bonds" (defined in the Agreement)
     (excluding amounts applied to pay costs of issuance of the Bonds) deposited
     with the Project Fund expended as of the date hereof having been used to
     pay "Exempt Costs" (as defined in the Agreement).

          This______  day of _________, 19__.

                                           MEAD COATED BOARD, INC.

                                           By:
                                              ---------------------------------
                                              Authorized Company Representative

                                      C-2
<PAGE>

                                LEASE AGREEMENT

                                    between

                      THE INDUSTRIAL DEVELOPMENT BOARD OF
                       THE CITY OF PHENIX CITY, ALABAMA

                                      and

                            MEAD COATED BOARD, INC.

                         Dated as of December 1, 1988

This Lease Agreement and all right, title and interest of The Industrial
Development Board of the City of Phenix City, Alabama in any rental payments and
other receipts and revenues derived under this Lease Agreement have been
assigned to AmSouth Bank N.A., as Trustee under the Trust Indenture, dated as of
even date herewith, from The Industrial Development Board of the City of Phenix
City, Alabama, which secures $85,000,000 in aggregate principal amount of The
Industrial Development Board of the City of Phenix City, Alabama Industrial
Development Revenue Bonds (Mead Coated Board Project), Series 1988A.

                                This instrument prepared by:

                                Smith & Schnacke
                                A Legal Professional Association
                                2900 DuBois Tower
                                511 Walnut Street
                                Cincinnati, Ohio 45202

<PAGE>

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

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

                (The Table of Contents for this Lease Agreement is for
                convenience of reference only and is not intended to define,
                limit or describe the scope or intent of any provisions of this
                Lease Agreement.)
<TABLE>
<CAPTION>
                                                                        Page
                                                                        ----
<S>           <C>                                                       <C>
PARTIES

ARTICLE I      DEFINITIONS AND RULES OF CONSTRUCTION..................   1

  Section 1.1  Definitions............................................   1
  Section 1.2  Rules of Construction..................................   5

ARTICLE II     REPRESENTATIONS AND WARRANTIES.........................   6

  Section 2.1  Representations and Warranties
               by the Board...........................................   6
  Section 2.2  Representations and Warranties
               by the Company.........................................   8

ARTICLE III    LEASING CLAUSES AND TITLE..............................   10

  Section 3.1  Lease of the Project...................................   10
  Section 3.2  Warranty of Title......................................   10
  Section 3.3  Quiet Enjoyment........................................   10

ARTICLE IV     COMPLETION OF THE PROJECT FACILITIES;
               ISSUANCE OF THE BONDS..................................   11

  Section 4.1  Agreement to Acquire, Construct and
               Install the Project Facilities.........................   11
  Section 4.2  Agreement to Issue Bonds; Application
               of Bond Proceeds.......................................   12
  Section 4.3  Company Required to Pay Notes
               If Project Fund Insufficient...........................   12
  Section 4.4  Board to Pursue Remedies
               Against Suppliers, Contractors
               and Subcontractors and Their
               Sureties...............................................   12
  Section 4.5  Issuance of Additional Bonds...........................   13
</TABLE>

                                      -i-
<PAGE>

<TABLE>

<S>           <C>                                                           <C>
ARTICLE V      EFFECTIVE DATE OF THIS AGREEMENT;
               DURATION OF LEASE TERM; RENTAL
               PROVISIONS................................................... 13

  Section 5.1  Effective Date of This Agreement;
               Duration of Lease Term....................................... 13
  Section 5.2  Delivery and Acceptance of
               Possession................................................... 13
  Section 5.3  Rents and Other Amounts Payable.............................. 14
  Section 5.4  Place of Rental Payments..................................... 15
  Section 5.5  Obligations of Company Hereunder
               Absolute and Unconditional................................... 15
  Section 5.6  Company's Performance Under
               Indenture.................................................... 16

ARTICLE VI     MAINTENANCE, MODIFICATION, TAXES
               AND INSURANCE................................................ 16

  Section 6.1  Maintenance and Modification of
               Project Facilities by Company................................ 16
  Section 6.2  Removal of Portions of Project............................... 17
  Section 6.3  Taxes, Other Governmental Charges
               and Utility Charges.......................................... 18
  Section 6.4  Insurance Required........................................... 19
  Section 6.5  Application of Net Proceeds of Insurance..................... 20
  Section 6.6  Additional Provisions Respecting
               Insurance.................................................... 20
  Section 6.7  Other Board Expenses......................................... 20
  Section 6.8  Advances by Board or Trustee................................. 20
  Section 6.9  Indemnification of Board and Trustee......................... 20
  Section 6.10 Investment Credit............................................ 21

ARTICLE VII    DAMAGE, DESTRUCTION AND CONDEMNATION......................... 22

  Section 7.1  Damage and Destruction....................................... 22
  Section 7.2  Condemnation................................................. 22
  Section 7.3  Condemnation of Company-Owned Property....................... 23
  Section 7.4  Further Assurances and Corrective Instruments................ 23

ARTICLE VIII   SPECIAL AGREEMENTS........................................... 23

  Section 8.1  No warranty of Condition or Suitability by the Board......... 23
  Section 8.2  Inspection of the Project.................................... 24
</TABLE>

                                     -ii-
<PAGE>

<TABLE>
<CAPTION>
<S>                                                                         <C>
  Section 8.3    Company to Maintain Its Corporate Existence; Exceptions
                 Permitted.................................................   24
  Section 8.4    Qualification in the State................................   24
  Section 8.5    Granting of Easements.....................................   25
  Section 8.6    Release of Certain Land...................................   25

ARTICLE IX       ASSIGNMENT, SUBLEASING, PLEDGING AND SELLING; REDEMPTION;
                 RENT PREPAYMENT AND ABATEMENT.............................   27

  Section 9.1    Assignment and Subleasing ................................   27
  Section 9.2    Pledge Under Indenture....................................   27
  Section 9.3    Restrictions on Sale of Project by Board..................   27
  Section 9.4    Redemption of Bonds.......................................   28
  Section 9.5    Prepayment of Rents.......................................   28
  Section 9.6    Rent Abatements if Bonds Paid Prior to Maturity...........   28
  Section 9.7    Reference to Bonds Ineffective After Bonds Paid...........   29

ARTICLE X        EVENTS OF DEFAULT AND REMEDIES............................   29

  Section 10.1   Events of Default Defined.................................   29
  Section 10.2   Remedies..................................................   30
  Section 10.3   No Remedy Exclusive.......................................   31
  Section 10.4   Agreement to Pay Attorneys' Fees and Expenses.............   31
  Section 10.5   No Additional Waiver Implied by One Waiver................   32
  Section 10.6   Waiver of Appraisement, Valuation, etc....................   32
  Section 10.7   Waiver of Events of Default...............................   32

ARTICLE XI       OPTIONS IN FAVOR OF COMPANY; OBLIGATION TO PURCHASE
                 PROJECT...................................................   32

  Section 11.1   General Option to Prepay Rent and Purchase Project........   32
  Section 11.2   Conveyance on Purchase....................................   33
  Section 11.3   Relative Positions of Options and Indenture...............   33

ARTICLE XII      MISCELLANEOUS.............................................   34

  Section 12.1   Notices...................................................   34
  Section 12.2   Binding Effect............................................   34
</TABLE>

                                     -iii-
<PAGE>

<TABLE>
<CAPTION>
<S>                                                                        <C>
  Section 12.3   Severability............................................  35
  Section 12.4   Amounts Remaining in Bond Fund..........................  35
  Section 12.5   Amendments, Changes and Modifications...................  35
  Section 12.6   Execution Counterparts..................................  35
  Section 12.7   Captions................................................  35
  Section 12.8   Recording of Agreement..................................  35
  Section 12.9   Law Governing Construction of Agreement.................  35
  Section 12.10  Net Lease...............................................  35

SIGNATURES AND SEALS.....................................................  36

ACKNOWLEDGMENTS..........................................................  37,38

EXHIBIT "A" - DESCRIPTION OF PROJECT LAND................................  39
EXHIBIT "B" - PROJECT SUMMARY............................................  47
</TABLE>

                                     -iv-
<PAGE>

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

          THIS LEASE AGREEMENT, made and entered into as of December 1, 1988, by
and between THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX CITY, ALABAMA
(the "Board"), a public corporation organized and existing under the laws of the
State of Alabama, as lessor, and MEAD COATED BOARD, INC. (the "Company"), a
corporation organized and existing under the laws of the State of Delaware and
qualified to do business in the State of Alabama, as lessee;

                                  WITNESSETH:
                                  ----------

          In consideration of the respective representations and agreements
hereinafter contained, the Board and the Company agree as follows (provided,
that in the performance of the agreements of the Board herein contained, any
obligation it may thereby incur for the payment of money shall not be a general
debt on its part but shall be payable solely out of the rents, payments and
revenues derived from this Lease Agreement, the sale of the "Bonds" as
hereinafter defined, the insurance and condemnation awards herein described and
any other revenues arising out of or in connection with its ownership of the
"Project" as hereinafter defined):

                                   ARTICLE I
                                   ---------

                     DEFINITIONS AND RULES OF CONSTRUCTION
                     -------------------------------------

          Section 1.1. Definitions. In addition to the words and terms elsewhere
          ------------------------
defined herein, the following words and terms as used herein shall have the
following meanings unless the context or use clearly indicates another or
different meaning or intent, and any other words and terms defined in the
Indenture shall have the same meanings when used herein as assigned them in the
Indenture unless the context or use clearly indicates another or different
meaning or intent:

          "Act" means the statutes codified as Code of Alabama 1975, Title 11,
Chapter 54, Article 4, as amended and supplemented and at the time in force and
effect;

          "Additional Bonds" means the bonds of any series, other than the
Bonds, authorized under the Indenture and authenticated and delivered in
accordance with Section 401 of the Indenture.

          "Agreement" means this Lease Agreement as it now exists and as it may
hereafter be amended pursuant to Section 12.5 of this Lease Agreement and
Article XV of the Indenture;

<PAGE>

          "Authorized Board Representative" means the person at the time
designated to act on behalf of the Board by written certificate furnished to the
Company and the Trustee containing the specimen signature of such person and
signed on behalf of the Board by its Chairman or Vice Chairman. Such certificate
may designate an alternate or alternates;

          "Authorized Company Representative" means the person at the time
designated to act on behalf of the Company by written certificate furnished to
the Board and the Trustee containing the specimen signature of such person and
signed on behalf of the Company by the President or any Vice President of the
Company. Such certificate may designate an alternate or alternates;

          "Board" means The Industrial Development Board of the City of Phenix
City, Alabama, a public corporation of the State, and its successors and
assigns;

          "Bond Fund" means the Bond principal and interest payment fund created
pursuant to Section 702 of the Indenture and within which have been established
a general account and a special account. Any reference herein to the "Bond Fund"
without further limitation or explanation shall be deemed to be a reference to
the general account in the Bond Fund;

          The term "bondholder" or "holder of the Bonds" means the registered
owner of any Bond;

          "Bonds" means the $85,000,000 in aggregate principal amount of The
Industrial Development Board of the City of Phenix City, Alabama Industrial
Development Revenue Bonds (Mead Coated Board Project), Series 1988A, issued
pursuant to the Indenture;

          "City" means the City of Phenix City, Alabama, a municipal corporation
of the State;

          "Code" means the Internal Revenue Code of 1986, as amended, and the
applicable Regulations thereunder;

          "Company" means the corporation designated as such in the first
paragraph hereof and its successors and assigns, including any surviving,
resulting or transferee corporation as provided in Section 8.3;

          The term "default" means an event or condition the occurrence of which
would, with the lapse of time or the giving of notice or both, become an Event
of Default;

                                      -2-

<PAGE>

          "Event of Default" means one of the events so denominated and
described in Section 10.1;

          "Government Obligations" means (a) direct obligations of the United
States of America, (b) obligations unconditionally guaranteed by the United
States of America and (c) securities or receipts evidencing ownership interests
in obligations or specified portions (such as principal or interest) of
obligations described in (a) or (b).

          "Indenture" means the Trust Indenture, of even date herewith, between
the Board and the Trustee, including any indenture supplemental thereto;

          "Lease Term" means the duration of the leasehold interest created
hereby as specified in Section 5.1;

          "Net Proceeds", when used with respect to any insurance or
condemnation award, means the gross proceeds from the insurance or condemnation
award with respect to which that term is used remaining after payment of all
expenses (including attorneys' fees and any Extraordinary Expenses of the
Trustee as defined in the Indenture) incurred in the collection of such gross
proceeds;

          "Notes" means those unpaid and outstanding industrial development
notes issued by the Board, pursuant to resolutions of the Board to finance the
costs of the Project;

          The term "payment in full of the Bonds" specifically encompasses the
situations described in Article X of the Indenture;

          "Permitted Encumbrances" means, as of any particular time,

          (a)  liens for ad valorem taxes, special assessments or other
     governmental charges not then delinquent or permitted to exist as provided
     in Section 6.3;

          (b)  this Agreement and the security interests created herein;

          (c)  such utility, access or other easements and rights-of-way,
     restrictions, reservations, reversions and exceptions as the Authorized
     Company Representative certifies will not materially interfere with or
     impair the operation of the Project (or, if it is not being

                                      -3-
<PAGE>

     operated, the operations for which it was designed or last modified);

          (d)  unfiled and inchoate mechanics' and materialmen's liens for
     construction work in progress;

          (e)  mechanics', materialmen's, suppliers' and vendors' liens or other
     similar liens not then payable, and those permitted to exist as provided in
     Section 6.1;

          (f)  such minor defects, irregularities, encumbrances, easements,
     rights-of-ways and clouds on title as the Authorized Company Representative
     certifies do not, in the aggregate, materially impair the property affected
     thereby for the purpose for which it was acquired or is held by the Board
     or the Company;

          (g)  that certain Lease Agreement dated as of July 1, 1977 between the
     Board and Georgia Kraft Company, as amended in an Agreement of Assignment
     of Lease dated as of January 4, 1988 among the Board, Georgia Kraft Company
     and the Company;

          (h)  that certain Mortgage and Indenture of Trust dated as of July 1,
     1977 between the Board and The First National Bank of Chicago, as trustee,
     as the same may be amended and supplemented from time to time;

          (i)  that certain Lease Agreement dated as of July 1, 1980 between
     Georgia Kraft Company and the Board, as amended in an Assignment,
     Assumption and Amendatory Lease Agreement dated as of January 4, 1988 among
     the Board, Georgia Kraft Company and the Company;

          (j)  that certain Lease Agreement dated as of November 1, 1983 between
     Georgia Kraft Company and the Board, as amended in an Assignment,
     Assumption and Amendatory Lease Agreement dated as of January 4, 1988 among
     the Board, Georgia Kraft Company and the Company;

          (k)  that certain Lease Agreement dated as of December 1, 1983 between
     Georgia Kraft Company and the Board, as amended in an Assignment,
     Assumption and Amendatory Lease Agreement dated as of January 4, 1988 among
     the Board, Georgia Kraft and the Company; and

          (l)  that certain Lease Agreement dated as of December 1, 1988 between
     the Company and the Board

                                      -4-
<PAGE>

     executed in connection with certain Environmental Improvement Revenue Bonds
     of the Board, Series 1988;

          The term "person" means natural persons, firms, associations,
     corporations and public bodies;

          "Project" means the Project Land and the Project Facilities, as they
     may at any time exist;

          "Project Facilities" means the facilities acquired, constructed and
     installed with proceeds from the sale of the Notes, to the extent such
     Notes are refunded from the proceeds of the sale of the Bonds, as they may
     at any time exist. The Project Facilities are more fully described in the
     Project Summary;

          "Project Fund" means the fund created pursuant to Section 601 of the
     Indenture;

          "Project Land" means the real property described in Exhibit "A"
     attached hereto and by this reference made a part hereof, less such real
     property as may be released from this Agreement pursuant to Section 8.6 or
     taken by the exercise of the power of eminent domain as provided in Section
     7.2;

          "Project Summary" means the Project Summary prepared by the Company,
entitled "PROJECT SUMMARY - INDUSTRIAL FACILITIES - MEAD COATED BOARD, INC.
COATED LINERBOARD MILL", a copy of which is attached hereto as "Exhibit "B" and
by this reference made a part hereof, including any amendments thereto made
pursuant to the terms thereof;

          The term "security interest" or "security interests" shall refer to
the security interests created herein and in the Indenture and shall have the
meaning set forth in the Uniform Commercial Code of the State;

          "State" means the State of Alabama;

          "Trustee" means AmSouth Bank N.A., or any co-trustee or any successor
trustee under the Indenture.

          Section 1.2. Rules of Construction. Unless the context clearly
                       ---------------------
indicates to the contrary:

          (a)  "Herein", "hereby", "hereunder", "hereof", "hereinbefore",
     "hereinafter" and other equivalent words

                                      -5-
<PAGE>

     refer to this Agreement and not solely to the particular Article, Section
     or subdivision hereof in which such word is used.

          (b)  Words importing the singular number shall include the plural
     number and vice versa, and any pronoun used herein shall be deemed to cover
     all genders.

          (c)  All references herein to particular Articles or Sections are
     references to Articles or Sections of this Agreement.

                                  ARTICLE II
                                 ------------

                        REPRESENTATIONS AND WARRANTIES
                       --------------------------------

          Section 2.1.  Representations and Warranties by the Board. The Board
                        --------------------------------------------
makes the following representations and warranties as the basis for the
undertakings on its part herein contained:

          (a)  Orqanization and Authority. The Board is a public corporation
               ---------------------------

     duly organized and validly existing under the provisions of the Act by
     authority of a resolution adopted by the Board of Commissioners of the City
     on June 14, 1960 and a Certificate of Incorporation duly filed for record
     on October 17, 1960, in the office of the Judge of Probate of Russell
     County, Alabama, which Certificate of Incorporation has not been amended or
     been revoked and is of full force and effect. The Board has all requisite
     power and authority under the Act (1) to issue the Bonds, (2) to use the
     proceeds thereof to refund the Notes issued to pay the cost to acquire,
     construct and install the Project Facilities, (3) to own, lease, encumber
     and dispose of the Project, and (4) to enter into, and perform its
     obligations under, the Indenture and this Agreement. This Agreement and the
     Indenture have been duly authorized, executed and delivered by the Board
     and are legal, valid and binding agreements enforceable against the Board
     in accordance with their respective terms.

          (b)  Pendinq Litigation. There are no actions, suits, proceedings,
               -------------------
     inquiries or investigations pending, or to the knowledge of the Board
     threatened, against or affecting the Board in any court or before any
     governmental authority or arbitration board or tribunal,

                                      -6-

<PAGE>

     which adversely affect the validity or enforceability of the Bonds, the
     Indenture, this Agreement, or any agreement or instrument to which the
     Board is a party and which is used or contemplated for use in the
     consummation of the transactions contemplated hereby or thereby.

          (c)  Issue, Sale and Other Transactions Are legal and Authorized. The
               ------------------------------------------------------------
     issue and sale of the Bonds and the execution and delivery by the Board of
     the Indenture and this Agreement and the compliance by the Board with all
     of the provisions of each thereof and of the Bonds (i) are within the
     purposes, powers and authority of the Board, (ii) to the best of the
     knowledge of the Board, have been done in full compliance with the
     provisions of the Act, are legal and will not conflict with or constitute
     on the part of the Board a violation of or a breach of or default under, or
     result in the creation of any lien or encumbrance (other than Permitted
     Encumbrances) upon any property of the Board under the provisions of, its
     certificate of incorporation or Bylaws, or any indenture, mortgage, deed of
     trust, note agreement or other agreement or instrument to which the Board
     is a party or by which the Board is bound, or any license, judgment,
     decree, law, statute, order, rule or regulation of any court or
     governmental agency or body having jurisdiction over the Board or any of
     its activities or properties, and (iii) have been duly authorized by all
     necessary corporate action on the part of the Board.

          (d)  Governmental Consents. Neither the nature of the Board nor any of
               ----------------------
     its activities or properties, nor any relationship between the Board and
     any other person, nor any circumstance in connection with the offer, issue,
     sale or delivery of any of the Bonds is such as to require the consent,
     approval or authorization of, or the filing, registration or qualification
     with, any governmental authority on the part of the Board in connection
     with the execution, delivery and performance of the Indenture and this
     Agreement, or the offer, issue, sale or delivery of the Bonds, other than
     (i) the filing with the Alabama Securities Commission of the notification
     of the Board's intention to issue the Bonds required by Act No. 586 enacted
     at the 1978 Regular Session of the Legislature of the State and the
     issuance by the Director of the Alabama Securities Commission of such
     Certificate of Notification as may be required by said Act, and (ii) the
     due filing and recording of this

                                      -7-

<PAGE>

     Agreement, the Indenture and the financing statements covering the security
     interests created hereunder and under the Indenture. The Board has filed
     the notification referred to in (i) of the preceding sentence and the
     Director of the Alabama Securities Commission has issued a Certificate of
     Notification applicable to the Bonds, which Certificate of notification
     has not been revoked or rescinded and is in full force and effect.

          (e)  No Defaults. The Board is not in default under the Act or under
               ------------
     its Certificate of Incorporation or Bylaws or any other agreement or
     instrument to which it is a party or by which is bound.

          (f)  No Prior Pledge. Neither the Project, this Agreement nor any of
               ----------------
     the payments to be received by the Board under this Agreement have been
     mortgaged, pledged or hypothecated in any manner or for any purpose other
     than as provided in the Indenture as security of the payment of the Bonds.

          (g)  Nature and Location of Project. The Project will constitute a
               -------------------------------
     "project" within the meaning of the Act, and the acquisition, construction
     and installation of the Project Facilities is in furtherance of the public
     purpose of the Act. The Project will be located within 25 miles of the
     corporate limits of the City, and no part thereof is located within the
     corporate limits or the police jurisdiction of any other incorporated
     municipality or any county of any state other than Russell County,
     Alabama.

          (h)  Official Action. By resolution duly adopted on November 3, 1987,
               ----------------
     the Board took official action providing for the acquisition, construction
     and installation of the Project Facilities and the financing of the Project
     Facilities through the issuance of the Bonds.

          Section 2.2. Representations and Warranties by the Company. The
                       ----------------------------------------------
Company makes the following representations and warranties as the basis for the
undertakings on its part herein contained:

          (a)  The Company (i) is a corporation duly organized, validly existing
     and in good standing under the laws of the State of Delaware, (ii) has all
     requisite corporate

                                      -8-

<PAGE>

     power and authority to carry on its business as now being conducted and as
     presently proposed to be conducted, and (ii) has duly qualified and is
     authorized to do business and is in good standing as a foreign corporation
     in the State.

          (b)  The Company has the corporate power and has been duly authorized
     to enter into this Agreement and to perform all of its obligations
     hereunder and thereunder.

          (c)  The willingness of the Board to issue the Bonds for purposes of
     financing costs of acquiring, constructing, and installing the Project, and
     to lease the Project to the Company, has induced the Company to locate the
     Project within the State of Alabama and, more particularly, within 25 miles
     of the City.

          (d)  The Project will create or preserve jobs and employment
     opportunities within the boundaries of the State of Alabama, thereby
     improving the economic welfare of the State of Alabama and the City.

          (e)  The acquisition, construction, and installation of the Project
     was not commenced, and no item which constitutes a part of the Project was
     ordered, prior to November 3, 1987.

          (f)  The Company is not subject to any contractual or other limitation
     or provision of any nature whatsoever which in any material way limits,
     restricts or prevents the Company from entering into this Agreement, or
     performing any of its obligations hereunder; and the execution and delivery
     of this Agreement, the consummation of the transactions contemplated
     hereby, and the fulfillment of or compliance with the terms and conditions
     of this Agreement will not conflict with or result in a breach of the
     terms, conditions or provisions of any restriction, agreement or instrument
     to which the Company is a party or by which it is bound, or constitute a
     default under any of the foregoing.

          (g)  The acquisition, construction, and installation of the Project
     will comply in all material respects with all applicable zoning, planning,
     building, environmental and other regulations of the governmental
     authorities having jurisdiction of the Project, and all necessary permits,
     licenses, consents and permissions necessary for the Project have been or
     will be obtained.

                                      -9-
<PAGE>

          (h)  The acquisition, construction, and installation of the Project as
     well as its intended use and operation are in complete conformance with the
     purposes and provisions of the Act.

          (i)  No event has occurred and no condition exists that would
     constitute an "Event of Default" under this Agreement which, with the lapse
     of time or with the giving of notice or both, would become an "Event of
     Default" under this Agreement.

          (j)  To the best of its knowledge and belief, the Company is not in
     violation of any laws, ordinances, governmental rules or regulations to
     which it is subject and has not failed to obtain any licenses, permits,
     franchises or other governmental authorizations necessary to the ownership
     of its properties or to the conduct of its business, which violation or
     failure to obtain would reasonably be expected to materially and adversely
     affect the ability of the Company to perform its obligations under this
     Agreement.

                                  ARTICLE III
                                  -----------

                           LEASING CLAUSES AND TITLE
                           -------------------------

          Section 3.1. Lease of the Project. The Board hereby leases to the
                       ---------------------
Company, and the Company hereby leases from the Board, the Project at the rent
set forth in Section 5.3 and in accordance with the provisions hereof.

          Section 3.2. Warranty of Title. The Board for itself, its successors
                       ------------------
and assigns, warrants to the Company, its successors and assigns, that it has
good and marketable fee simple title in and to the Project Land free from all
encumbrances except Permitted Encumbrances. Upon the execution and delivery of
this Agreement, the Board agrees that it will furnish to the Company an opinion
of the Board's counsel stating that the Board holds such title in and to the
Project Land.

          Section 3.3. Quiet Enjoyment. The Board warrants and covenants that it
                       ----------------
will defend the Company in the quiet enjoyment and peaceable possession of the
Project, and all appurtenances thereto belonging, free from all claims of all
persons whomsoever, throughout the Lease Term, so long as the Company shall
perform the covenants, conditions and agreements to be performed by it
hereunder, or so long as the period for remedying any default in such
performance shall not have expired.

                                     -10-

<PAGE>

                                  ARTICLE IV
                                  ----------

                     COMPLETION OF THE PROJECT FACILTIES;
                     ------------------------------------
                             ISSUANCE OF THE BONDS
                             ---------------------

          Section 4.1. Aqreement to Acquire, Construct and Install the Project
                       -------------------------------------------------------
Facilities. The Board agrees that it will cause the Project Facilities to be
-----------
acquired, constructed and installed on the Project Land, wholly within the
boundary lines thereof. The acquisition, construction and installation of the
Project Facilities will be in accordance with the Project Summary, a copy of
which is on file with the Board and the Trustee.

          The Board agrees that it will enter into, or accept the assignment of,
such contracts as the Company may request in order to effectuate the purposes of
this Section but that it will not execute any other contract or give any order
for construction or for the acquisition and installation of any equipment
relating to the Project Facilities, unless and until the Authorized Company
Representative shall have approved the same in writing.

          The Board hereby makes, constitutes and appoints the Company, The Mead
Corporation and Rust International Corporation as its true, lawful and agents
for the acquisition, construction and installation of the Project Facilities,
and the Company, The Mead Corporation and Rust International Corporation have
accepted such agency to act and do all things on behalf of the Board, to perform
all acts and agreements of the Board hereinbefore provided in this Section, and
to bring any actions or proceedings against any person which the Board might
bring with respect thereto as the Company, The Mead Corporation and Rust
International Corporation shall deem proper. The Board hereby ratifies and
confirms all actions of, and assumes and adopts all contracts entered into by,
the Company, The Mead Corporation and Rust International Corporation with
respect to the Project Facilities prior to the date hereof. This appointment of
the Company, The Mead Corporation and Rust International Corporation to act as
agents and all authority hereby conferred or granted is conferred and granted
irrevocably until all activities in connection with the acquisition,
construction and installation of the Project Facilities shall have been
completed, and shall not be terminated prior thereto by act of the Board or of
the Company, The Mead Corporation and Rust International Corporation. So long as
the Company is not in default hereunder, upon the completion of the Project (or
at any time prior or subsequent thereto upon the request of the Company) the
Board will assign to the Company all warranties and guarantees of all
contractors, subcontractors, suppliers, architects and engineers for the

                                     -11-
<PAGE>

furnishing of labor, materials or equipment or supervision or design in
connection with the Project Facilities and any rights or causes of action
arising from or against any of the foregoing.

          Section 4.2. Agreement to Issue Bonds; Application of Bond Proceeds.
                       -------------------------------------------------------
In order to provide funds for the payment of the cost of the acquisition,
construction and installation of the Project Facilities through the refunding of
the Notes, the Board agrees that it will authorize, sell and deliver the Bonds
to the initial purchasers thereof. Upon receipt of the proceeds from the sale of
the Bonds, the Board will deposit all accrued interest (if any) received upon
the sale of the Bonds in the Bond Fund and will deposit the balance of the
proceeds from said sale to the Project Fund, to be applied to the payment of the
Notes upon receipt by the Trustee of Notes tendered for cancellation.

          Section 4.3. Company Required to Pay Costs if Project Fund
                       ---------------------------------------------
Insufficient. If the moneys in the Project Fund available for payment of the
-------------
costs of the Project Facilities should not be sufficient to pay the costs
thereof in full, and if Additional Bonds are not issued to finance the
completion of the Project Facilities, the Company agrees to complete the Project
Facilities and to pay all that portion of the costs of the Project Facilities as
may be in excess of the moneys available therefor in the Project Fund. The Board
does not make any warranty, either express or implied, that the moneys which
will be paid into the Project Fund and which, under the provisions hereof, will
be available for payment of the costs of refunding the Notes, will be sufficient
to pay all the costs which will be incurred in that connection. The Company
agrees that if after exhaustion of the moneys in the Project Fund the Company
should pay any portion of the costs of refunding the Notes pursuant to the
provisions of this Section, it shall not be entitled to any reimbursement
therefor from the Board or from the Trustee or from the holders or owners of any
of the bonds, nor shall it be entitled to any diminution in or postponement or
abatement of the rents payable under Section 5.3.

          Section 4.4. Board to Pursue Remedies Against Suppliers, Contractors
                       -------------------------------------------------------
and Subcontractors and Their Sureties. At the direction and sole cost of the
--------------------------------------
Company, the Board will promptly proceed, either separately or in conjunction
with others, to exhaust the remedies of the Board against any defaulting
supplier, contractor or subcontractor and against any surety therefor, for the
performance of any contract made in connection with the Project Facilities. If
the Company shall so notify the Board, the Company may, in its own name or in
the name of the Board, prosecute or defend any action or proceeding or take any
other action involving any such supplier, contractor,

                                     -12-

<PAGE>

subcontractor or surety which the Company deems reasonably necessary, and in
such event the Board agrees to cooperate fully with the Company and to take all
action necessary, to the extent it might lawfully do so, to effect the
substitution of the Company for the Board in any such action or proceeding. Any
moneys recovered by way of damages, refunds, adjustments or otherwise in
connection with the foregoing shall be paid to the Bond Fund.

          Section 4.5. Issuance of Additional Bonds. So long as there shall not
                       -----------------------------
have occurred and be continuing an event of default hereunder or under the
Indenture, the Board shall, from time to time at the request of the Company, use
its best efforts to issue Additional Bonds in aggregate principal amounts as
requested by the Company under the terms and conditions provided herein and in
the Indenture, but in no event shall the Board be liable for not issuing
Additional Bonds. Additional Bonds may be issued to finance the (a) payment of
outstanding Notes, (b) refunding all of the Bonds of any one or more series then
outstanding, (c) payment of costs of the Project or (d) any combination of the
foregoing; provided, in any case, that either prior to or contemporaneously with
the issuance of Additional Bonds (i) the terms, conditions, manner of issuance,
purchase price, delivery and contemplated disposition of the proceeds of the
sale of such Additional Bonds shall have been approved in writing by the
President or any Vice President of the Company, and (ii) the conditions
specified in Article IV of the Indenture with respect to the issuance of such
Additional Bonds shall have been satisfied.

                                   ARTICLE V
                                  -----------

                       EFFECTIVE DATE OF THIS AGREEMENT;
                     ------------------------------------
                   DURATION OF LEASE TERM; RENTAL PROVISIONS
                  -------------------------------------------

          Section 5.1. Effective Date of This Aqreement; Duration of Lease Term.
                       ---------------------------------------------------------
This Agreement shall become effective upon its execution and delivery and the
leasehold interest created hereby shall then begin, and, unless sooner
terminated or extended under the provisions hereof (including particularly
Articles X and XI), shall expire upon the latter to occur of the following
events: (i) midnight, December 1, 2028, or (ii) payment in full of all Bonds and
any Additional Bonds.

          Section 5.2. Delivery and Acceptance of Possession. The Board agrees
                       --------------------------------------
to deliver to the Company sole and exclusive possession of the Project (subject
to the right of the Trustee to enter thereon for inspection purposes and to the
other provisions

                                     -13-
<PAGE>

of Section 8.2) on the Completion Date and the Company agrees to accept
possession of the Project upon such delivery; provided, however, that the
Company shall be permitted such possession of the Project prior to the
Completion Date as shall not interfere with the acquisition, construction and
installation of the Project Facilities.

          Section 5.3. Rents and Other Amounts Payable. On June 1, 1989, and
                       --------------------------------
June 1 and December 1 in each year thereafter until payment in full of the
Bonds, the Company shall pay to the Trustee, for the account of the Board, as
rent for the Project, a sum of money equal to the amount payable on such date as
principal of and interest on the Bonds, as provided in the Indenture. In any
event, on each date on which a payment of principal or interest is payable on
the Bonds, if at any such date the amount of money available in the Bond Fund
is insufficient to make required payments of principal and interest on such
date, the Company shall forthwith pay to the Trustee, in immediately available
funds, the amount of any such deficiency.

          Anything herein to the contrary notwithstanding, any amount of money
at any time held by the Trustee in the Bond Fund shall be credited against the
next succeeding payment of rent and shall reduce the payment to be then made by
the Company; and further, if, and for so long as, the amount held by the Trustee
in the Bond Fund should be sufficient to pay at the times required the principal
of and the interest on all Bonds then remaining unpaid, the Company shall not be
obligated to make any further rental payments under the provisions of this
Section.

          The Company agrees to pay to the Trustee until the principal of and
the interest on the Bonds shall have been paid in full (i) an amount equal to
the annual fee of the Trustee for the Ordinary Services of the Trustee rendered
and its Ordinary Expenses incurred under the Indenture, (ii) the reasonable fees
and charges of the Trustee and any other paying agent for acting as paying agent
and as bond registrar and the reasonable fees of Trustee's counsel as provided
in the Indenture, as and when the same become due, and (iii) the reasonable fees
and charges of the Trustee for Extraordinary Services rendered by it and
Extraordinary Expenses incurred by it, as such terms are defined in the
Indenture, as and when the same become due; provided, that the Company may,
without precipitating an Event of Default hereunder, withhold such payment to
contest in good faith the necessity for any such Extraordinary Services and
Extraordinary Expenses and the reasonableness of any such fees, charges or
expenses.

                                      -14-
<PAGE>

          If the Company should fail to make any of the payments required in
this Section, the item or installment which the Company has failed to make shall
continue as an obligation of the Company until the same shall have been fully
paid, and the Company agrees to pay the same (in the case of interest, to the
extent permitted by law) with interest thereon at the rate per annum equal to
one percent per annum over the applicable interest rate borne by the Bonds,
calculated as described in the Indenture. The provisions of this Section shall
be subject to the provisions of Section 9.6.

          Section 5.4. Place of Rental Payments. The rents provided for in
                       -------------------------
Section 5.3 and the interest on delinquent rents shall be paid directly to the
Trustee for the account of the Board and will be deposited in the Bond Fund. The
other payments provided for in Section 5.3 shall be paid directly to the Trustee
for its own use or for disbursement to any other paying agent, as the case may
be.

          Section 5.5. Obligations of Company Hereunder Absolute and
                       ---------------------------------------------
Unconditional. Subject to the provisions of Section 9.6, the obligations of the
--------------
Company to make the payments required in Section 5.3 and to perform and observe
the other agreements on its part contained herein shall be absolute and
unconditional. Until such time as payment in full of the Bonds shall have been
made, the Company (i) will not suspend or discontinue any payments provided for
in Section 5.3 except to the extent the same have been prepaid, (ii) will
perform and observe all of its other agreements contained herein, (iii) will not
suspend or discontinue any payments provided for in Section 5.3 because of any
right of set off which the Company may have against the Board, the Trustee or
the holder of any Bond (provided that nothing herein shall prevent the assertion
of any claim by the Company by separate suit or compulsory counterclaim) and
(iv) except as provided in Section 11.1 will not terminate the Lease Term for
any cause, including, without limiting the generality of the foregoing, failure
of the Board to complete the Project Facilities, failure of the Board's title in
and to the Project or any part thereof, any acts or circumstances that may
constitute failure of consideration, eviction or constructive eviction,
destruction of or damage to the Project, commercial frustration of purpose, any
change in the tax or other laws of the United States of America or of the State
or any political subdivision of either or any failure of the Board to perform
and observe any agreement, whether express or implied, or any duty, liability or
obligation arising out of or in connection herewith or with the Indenture.
Nothing contained in this Section shall be construed to release the Board from
the performance of any of the agreements on its part herein contained; and if
the Board should

                                     -15-

<PAGE>

fail to perform any such agreement, the Company may institute such action
against the Board as the Company may deem necessary to compel performance or
recover its damages for nonperformance so long as such action shall not do
violence to the agreements on the part of the Company contained in the preceding
sentence. The Company may, however, at its own cost and expense and in its own
name or in the name of the Board, prosecute or defend any action or proceeding
or take any other action involving third persons which the Company deems
reasonably necessary in order to insure the completion of the acquisition,
construction and installation of the Project Facilities or to secure or protect
its right of possession, occupancy and use of the Project hereunder, and in such
event the Board hereby agrees to cooperate fully with the Company and to take
all lawful action which is required to effect the substitution of the Company
for the Board in any such action or proceeding if the Company shall so request.

          Nothing contained herein shall be construed to be a waiver of any
rights which the Company may have against the Board under this Agreement, or
against other persons under this Agreement, the Indenture, or otherwise, or
under any provision of law.

          Section 5.6. Company's Performance Under Indenture. The Company
                       --------------------------------------
agrees, for the benefit of the holders from time to time of the Bonds, to do and
perform all acts and things contemplated in the Indenture to be done or
performed by it.

                                  ARTICLE VI
                                  ----------

                          MAINTENANCE, MODIFICATION,
                          --------------------------
                              TAXES AND INSURANCE
                              -------------------

          Section 6.1. Maintenance and Modification of Project Facilities by
                       -----------------------------------------------------
Company.
--------
          (a) Throughout the Lease Term, the Company shall at its own expense
     (i) keep the Project Facilities in as reasonably safe condition as the
     operation thereof will permit, and (ii) keep the Project Facilities in good
     repair and in good operating condition, making from time to time all
     necessary repairs thereto and renewals and replacements thereof.

          (b) The Company may from time to time, in its sole discretion and at
     its own expense, make any additions, modifications or improvements to the
     Project Facilities, including installation of additional machinery,
     equipment, and related property that do not impair the

                                     -16-

<PAGE>

     effective use of the Project Facilities. All machinery, equipment and
     related personal property so installed by the Company shall not be subject
     to this Agreement but shall be subject to the Landlord's Lien created under
     the Code of Alabama 1975, Section 35-9-60. All such machinery, equipment
     and related personal property may be modified or removed at any time while
     there exists no event of default hereunder; provided, that any damage to
     the Project Facilities occasioned by such modification or removal shall be
     repaired by the Company at its own expense.

          (c) The Company shall not permit any mechanics', materialmen's,
     suppliers', vendors' or other similar liens to be established or remain
     against the Project for labor or materials furnished or services rendered
     in connection with any additions, modifications, improvements, repairs,
     renewals or replacements so made by it; provided, that if the Company shall
     first notify the Trustee of its intention so to do, the Company may in good
     faith contest any mechanics', materialmen's, suppliers', vendors' or other
     similar liens filed or established against the Project, and in such event
     may permit the items so contested to remain undischarged and unsatisfied
     during the period of such contest and any appeal therefrom unless the Board
     of the Trustee shall notify the Company that by nonpayment of any such
     items the lien or security interests afforded by this Agreement or the
     Indenture as to any part of the Project or the rents, payments and revenues
     from the Project will be materially endangered or the Project or any part
     thereof or the rents, payments and revenues from the Project will be
     subject to loss or forfeiture, in which event the Company shall promptly
     pay and cause to be satisfied and discharged all such unpaid items. The
     Board will cooperate fully with the Company in any such contest.

          Section 6.2. Removal of Portions of Project. The Board shall not be
                       -------------------------------
under any obligation to renew, repair or replace any inadequate, obsolete, worn
out, unsuitable, undesirable, inappropriate or unnecessary items of machinery or
equipment comprising the Project Facilities. If the Company in its sole
discretion determines that any such items have become inadequate, obsolete, worn
out, unsuitable, undesirable, inappropriate or unnecessary for its purposes at
such time, the Company may remove such items from the Project and (on behalf of
the Board) sell, trade in, or otherwise dispose of them (as a whole or in part)
without any responsibility or accountability to the Board or the

                                     -17-

<PAGE>

Trustee therefor, provided that such removal does not impair the operation of
the Project Facilities.

          The removal of any portion of the Project Facilities pursuant to the
provisions of this Section shall not entitle the Company to any diminution in or
postponement or abatement of the rents payable under Section 5.3.

          The Company shall promptly report to the Trustee each such removal,
substitution, sale, trade-in or other disposition.

          Section 6.3. Taxes, Other Governmental Charges and Utility Charges.
                       ------------------------------------------------------
The Company agrees to pay promptly as and when the same shall become due and
payable, each and every lawful cost, expense and obligation of every kind and
nature, foreseen or unforeseen, for the payment of which the Board or the
Company is or shall become liable by reason of its estate or interest in the
Project or any portion thereof, by reason of any right or interest of the Board
or the Company in or under this Agreement, or by reason of or in any manner
connected with or arising out of the possession, operation, maintenance,
alteration, repair, rebuilding or use of the Project or any part thereof. The
Company also agrees to pay and discharge all lawful real estate taxes, personal
property taxes, water charges, sewer charges, assessments and all other lawful
governmental taxes, impositions and charges of every kind and nature, ordinary
and extraordinary, general or special, foreseen or unforeseen, whether similar
or dissimilar to any of the foregoing, and all applicable interest and penalties
thereon, if any, which at any time during the term of this Agreement shall be or
become due and payable by the Board or the Company and which shall be lawfully
levied, assessed or imposed

          (a) upon or with respect to, or shall be or become liens upon, the
     Project or any portion thereof or any interest of the Board or the Company
     therein or under this Agreement;

          (b) upon or with respect to the income or profits of the Board from
     the Project or under this Agreement;

          (c) upon or with respect to the possession, operation, management,
     maintenance, alterations, repair, rebuilding, use or occupancy of the
     Project or any portion thereof; or

          (d) upon this transaction or any document to which the Board or the
     Company is a party creating or transferring an interest or an estate in the
     Project;

                                     -18-

<PAGE>

under or by virtue of any present or future law, statute, ordinance, regulation
or other requirement of any governmental authority, whether federal, state,
county, city, municipal, school or otherwise.

          The Company also agrees to pay any special assessments for public
improvements or benefits for which the Company would have otherwise have been
liable had it in fact been the owner of the Project.

          The Company shall, at its sole cost and expense, procure or cause to
be procured any and all necessary building permits, other permits, licenses and
other authorizations required for the lawful and proper construction, use,
occupation, operation and management of the Project. The Company also agrees to
pay or cause to be paid all lawful charges for gas, water, sewer, electricity,
light, heat, power, telephone and other utility and service used, rendered or
supplied to, upon or in connection with the Project and the Board will cooperate
with the Company in securing such permits, licenses and authorizations.

          The Company may, at its own expense and in its own name and behalf or
in the name and behalf of the Board, in good faith contest any such taxes,
assessments and other charges and, in the event of any such contest, may permit
the taxes, assessments and other charges so contested to remain unpaid during
the period of such contest and any appeal therefrom unless the Board or the
Trustee shall notify the Company that by nonpayment of any such items the lien
or security interests afforded by this Agreement or the Indenture as to any part
of the Project or the rents, payments and revenues derived from the Project will
be materially endangered or the Project or any part thereof will be subject to
loss or forfeiture, in which event such taxes, assessments or charges shall be
paid promptly. The Board shall cooperate fully with the Company in any such
contest. If the Company shall fail to pay any of the foregoing items required by
this Section to be paid by the Company and shall not cure any failure within any
applicable curative provisions provided herein, the Board or the Trustee may
(but shall be under no obligation to) pay the same, and any amounts so advanced
therefor by the Board or the Trustee shall become an additional obligation of
the Company to the one making the advancement, which amounts, together with
interest thereon at the rate of interest borne by the Bonds from the date
thereof, the Company agrees to pay.

          Section 6.4. Insurance Required. Throughout the Lease Term the Company
                       -------------------
shall keep the Project continuously insured (or maintain programs of self-
insurance) against such risks as are customarily insured against by businesses
of like size and type.

                                     -19-

<PAGE>

          Section 6.5. Application of Net Proceeds of Insurance. The insurance
                       -----------------------------------------
carried pursuant to the provisions of Section 6.4 shall be applied as follows:
(i) the Net Proceeds of casualty insurance shall be applied as provided in
Section 7.1, and (ii) the Net Proceeds of public liability insurance shall be
applied toward extinguishment or satisfaction of the liability with respect to
which such insurance proceeds may be paid.

          Section 6.6. Additional Provisions Respecting Insurance. All
                       -------------------------------------------
insurance, if any, required in Section 6.4 may be taken out and maintained in
insurance companies selected by the Company and may be written with deductible
amounts comparable to those on similar policies carried by other companies
engaged in businesses similar in size and type and other respects as the
Company. The insurance hereby required may be contained in blanket policies or
self-insurance programs now or hereafter maintained by the Company.

          Section 6.7. Other Board Expenses. Anything to the contrary herein
                       ---------------------
notwithstanding, the Company shall pay any reasonable and necessary expenses not
specifically mentioned herein which are incurred by the Board in connection with
the Project, this Agreement, the Indenture, any financing statements or the
Bonds, and which are not payable from the Project Fund pursuant to Section 4.2.

          Section 6.8. Advances by Board or Trustee. If the Company fails to
                       -----------------------------
maintain the insurance coverage required hereby or fails to keep the Project
Facilities in as reasonably safe condition as its operating conditions will
permit, or fails to keep the Project Facilities in good repair and good
operating condition and shall not cure any failure within any applicable
curative provisions provided herein, the Board or the Trustee may (but unless
satisfactorily indemnified shall be under no obligation to) take out policies of
insurance and pay the premiums on the same or make the required repairs,
renewals and replacements; and all amounts so advanced therefor by the Board or
the Trustee will become an additional obligation of the Company to the one
making the advancement, which amounts, together with interest thereon at the
rate of interest borne by the Bonds from the date thereof, the Company agrees to
pay.

          Section 6.9. Indemnification of Board and Trustee. The Company will
                       -------------------------------------
also pay and discharge and will indemnify and hold harmless the Issuer and the
members, officers, agents and employees of the Issuer from (a) any condition of
the Project caused by the Company, (b) any liens, taxes, assessments,
impositions and other charges upon payments by the Company to the

                                     -20-

<PAGE>

Issuer hereunder, (c) any breach or default on the part of the Company in the
performance of any of its obligations hereunder, (d) any act of negligence of
the Company or of its agents, contractors, servants, employees or licensees, (e)
any act of negligence of any assignee or sublessee of the Company, or of any
agents, contractors, servants, employees or licensees of any assignee or
sublessee of the Company and (f) any and all liability, damages, costs and
expenses arising out of or resulting from the acquisition, construction and
installation of the Project or the use or operation of the Project or any other
activity carried out thereon or in connection therewith or the transactions
contemplated by this Agreement and the Indenture, including the reasonable fees
and expenses of counsel, except as the same may arise out of the negligence or
misconduct on the part of the Issuer. If any such lien or charge is sought to be
imposed upon payments, or any such taxes, assessments, impositions or other
charges are sought to be imposed, or any such liability, damages, costs and
expenses are sought to be imposed, the Issuer will give prompt notice to the
Company, and the Company shall have the sole right and duty to assume, and will
assume, the defense thereof, with full power to litigate, compromise or settle
the same in its sole discretion. The indemnification provided by the Section
shall survive the termination of this Agreement.

          The Company agrees to indemnify the Trustee, and to hold it harmless
against, any loss, liability or expense incurred without negligence or bad faith
on its part, arising out of or in connection with the acceptance or
administration of the Indenture, including the reasonable costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties thereunder or hereunder.

          Section 6.10. Investment Credit. The Board agrees that any investment
                        ------------------
tax credit with respect to the Project or any part thereof shall be made
available to the Company, and the Board will fully cooperate with the Company in
any effort by the Company to avail itself of any such investment tax credit, but
neither the Board nor the Trustee shall have any responsibility or liability for
the Company's failure to receive any such investment tax credit. The Board
agrees to cause the Trustee to cooperate in making any investment tax credit
available to the Company.

                                     -21-

<PAGE>

                                  ARTICLE VII
                                  -----------

                     DAMAGE, DESTRUCTION AND CONDEMNATION
                     ------------------------------------

          Section 7.1. Damage and Destruction. If prior to payment in full of
                       -----------------------
the Bonds the Project Facilities are destroyed (in whole or in part) or are
damaged by fire or other casualty, the Company, or the Board at the Company's
direction, (i) shall promptly replace, repair, rebuild or restore the property
damaged or destroyed to substantially the same condition as existed prior to
the event causing such damage or destruction, with such changes, alterations and
modifications (including the substitution and addition of other property) as may
be desired by the Company and as will not impair the operation of the Project
Facilities, and (ii) shall apply for such purpose so much as may be necessary of
any Net Proceeds of insurance resulting from claims for such losses, as well as
any additional moneys of the Company necessary therefor. A11 Net Proceeds of
insurance resulting from claims for such losses shall be paid to the Company. If
said Net Proceeds are not sufficient to pay in full the costs of such
replacement, repair, rebuilding or restoration, the Company shall nonetheless
complete the work thereof and shall pay that portion of the costs thereof in
excess of the amount of said Net Proceeds. The Company shall not, by reason of
the payment of such excess costs be entitled to any reimbursement from the Board
or any abatement, diminution or postponement of the amounts payable under
Section 5.3.

          Section 7.2. Condemnation. If the title in and to, or the temporary
                       -------------
use of, the Project or any part thereof shall be taken under the exercise of the
power of eminent domain by any governmental body or by any other person acting
under governmental authority, the Company shall be obligated to continue to pay
the rents specified in Section 5.3. The Board, the Company and the Trustee shall
cause the Net Proceeds received by them or any of them, from any award made in
such eminent domain proceeding, to be paid to and held by the Company and
applied in one or more of the following ways at the election of the Company:

          (a) the restoration of the Project to substantially the same condition
     as existed prior to the exercise of such power of eminent domain;

          (b) the acquisition, by construction or otherwise, of other industrial
     facilities suitable for the Company's operations at the Project (which
     facilities will be deemed a part of the Project and available for

                                      -22-
<PAGE>

     use and occupancy by the Company and will be leased to the Company
     hereunder without the payment of any rents other than herein provided to
     the same extent as if such other improvements were specifically described
     herein); provided, that such facilities will be acquired subject to no
     liens, security interests or encumbrances prior to the lien afforded by
     this Agreement and the Indenture, other than Permitted Encumbrances; or

          (c) payment into the Bond Fund to provide for payment in full of the
     Bonds at the earliest date that the Bonds may be called for redemption.

          The Board shall cooperate fully with the Company in the handling and
conduct of any prospective or pending eminent domain proceeding with respect to
the Project or any part thereof and shall, to the extent it may lawfully do so,
permit the Company to litigate in any such proceeding in the name and on behalf
of the Board. In no event will the Board voluntarily settle, or consent to the
settlement of, any prospective or pending eminent domain proceeding with respect
to the Project or any part thereof without the written consent of the Company.

          Section 7.3. Condemnation of Company-Owned Property. The Company shall
                       ---------------------------------------
be entitled to the proceeds of any condemnation award or portion thereof made
for damages to or taking of its own property or for damages on account of the
taking of or interference with the Company's rights to possession, use or
occupancy of the Project.

          Section 7.4. Further Assurances and Corrective Instruments. The Board
                       ----------------------------------------------
and the Company agree that they will, from time to time, execute, acknowledge
and deliver, or cause to be executed, acknowledged and delivered, such
supplements hereto and such further instruments as may reasonably be required
for correcting any inadequate or incorrect description of the Project herein
described or intended so to be or for carrying out the intention of or
facilitating the performance of this Agreement.

                                  ARTICLE VIII
                                  ------------

                               SPECIAL AGREEMENTS
                               ------------------

          Section 8.1. No Warranty of Condition or Suitability by the Board. THE
                       -----------------------------------------------------
BOARD MAKES NO WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE CONDITION OF THE
PROJECT OR THAT IT WILL BE SUITABLE FOR THE COMPANY'S PURPOSES OR NEEDS. The
Company releases the Board from, agrees that the Board shall not be

                                      -23-
<PAGE>

liable for and agrees to hold the Board harmless against, any loss that may be
occasioned by any cause whatsoever pertaining to the Project or the use thereof.

          Section 8.2. Inspection of the Project. The Company agrees that the
                       --------------------------
Authorized Board Representative and any duly authorized agent of the Trustee
shall have the right at all reasonable times to enter upon, examine and inspect
the Project without interference or prejudice to the operations of the Company.
The Company further agrees that any authorized agent of the Board or the Trustee
shall have such rights of access to the Project as may be reasonable and
necessary for the proper maintenance of the Project in the event of the failure
by the Company to perform its obligations under Section 6.1.

          Section 8.3. Company to Maintain Its Corporate Existence; Exceptions
                       -------------------------------------------------------
Permitted. The Company agrees that it will maintain its corporate existence,
----------
will not dissolve or otherwise dispose of all or substantially all of its assets
and will not consolidate with or merge into another corporation or permit one or
more other corporations to consolidate with or merge into it; provided that the
Company may, without violating the agreement contained in this Section 8.3,
consolidate with or merge into another corporation incorporated and existing
under the laws of one of the states of the United States of America or the
District of Columbia (a "domestic corporation"), or permit one or more other
domestic corporations to consolidate with or merge into it, or sell or otherwise
transfer to another domestic corporation all or substantially all of its assets
as an entirety and thereafter dissolve, provided, if the Company is not the
surviving, resulting or transferee corporation, as the case may be, such
surviving, resulting or transferee corporation assumes in writing all of the
obligations of the Company under the Agreement and qualifies to do business in
the State. Notwithstanding the foregoing, the Company shall not dissolve or
otherwise dispose of all or substantially all of its assets and shall not
consolidate with or merge into another corporation or permit one or more other
corporations to consolidate with or merge into it if, after giving effect to
such action, a default would result under this Agreement or the Indenture.

          Section 8.4. Qualification in the State. The Company agrees (except as
                       ---------------------------
may be otherwise permitted pursuant to the provisions of Section 8.3) that
throughout the Lease Term it will continue to be a corporation either organized
under the laws of the State or duly qualified to do business in the State as a
foreign corporation.

                                      -24-
<PAGE>

          Section 8.5. Granting of Easements. If no Event of Default shall have
                       ----------------------
happened and be continuing, the Company may at any time or times cause to be
granted easements (including party wall agreements), licenses, rights-of-way
(temporary or perpetual and including the dedication of public highways) and
other rights or privileges in the nature of easements with respect to any
property included in the Project Land and such grant will be free from any lien
or security interest created by this Agreement and the Indenture, or the Company
may cause to be released existing easements, licenses, rights-of-way and other
rights or privileges in the nature of easements, held with respect to any
property included in the Project Land with or without consideration and the
Board agrees that it shall execute and deliver and will cause and direct the
Trustee to execute and deliver any instrument necessary or appropriate to
confirm and grant or release any such easement, license, right-of-way or other
right or privilege upon receipt of: (i) a copy of the instrument of grant or
release, and (ii) a written application signed by the president or any vice
president of the Company requesting the execution and delivery of such
instrument and stating that such grant or release is not detrimental to the
proper conduct of the business of the Company, and that such grant or release
will not impair the effective use or interfere with the operations of the
Project Facilities and will not materially weaken, diminish or impair the
security intended to be given by or under this Agreement and the Indenture.

          Section 8.6. Release of Certain Land. Notwithstanding any other
                       ------------------------
provision hereof, the parties hereto reserve the right to amend this Agreement
at any time and from time to time by mutual agreement for the purpose of
effecting the release of and removal of (i) any unimproved part of the Project
Land (on which no component of the Project Facilities is located but on which
parking, transportation or utility facilities may be located) on which the Board
proposes to construct improvements for lease or sale to another person or
persons under another and different agreement, or (ii) any part of the Project
Land with respect to which the Board proposes to grant an easement or convey a
fee interest or other title to a railroad or other public or private carrier or
to any public utility or public body in order that transportation facilities or
services by rail, water, road or other means or utility services for the Project
may be provided, increased or improved; provided, that if at the time any such
amendment is made any of the Bonds are outstanding, there shall be deposited
with the Trustee the following:

          (a) a copy of such amendment as executed;

                                      -25-
<PAGE>

          (b) a resolution of the Board (i) stating that the Board is not in
     default under any of the provisions hereof or of the Indenture and that the
     Company is not to the knowledge of the Board in default under any of the
     provisions hereof, (ii) giving an adequate legal description of that
     portion of the Project Land to be released, (iii) stating the purpose for
     which the Board desires the release, (iv) stating that the improvements
     which will be constructed or the facilities and services which will be
     provided, increased or improved will be such as will promote at least one
     of the public purposes of the Board, and (v) requesting such release;

          (c) a certificate of the president or any vice president of the
     Company indicating approval of such amendment and stating that the Company
     is not in default under any of the provisions hereof;

          (d) a copy of the agreement between the Board and such other person
     wherein the Board agrees to construct improvements on the portion of the
     Project Land so requested to be released and agrees to lease or sell the
     same to such other person, and wherein such other person agrees to lease or
     purchase the same from the Board, or a copy of the instrument granting the
     easement or conveying the title or other interest to a railroad, public
     utility or public body; and

          (e) a certificate of the Authorized Company Representative, dated not
     more than 60 days prior to the date of such amendment and stating that (i)
     the portion of the Project Land so proposed to be released is necessary or
     desirable for railroad, utility services or roads to benefit the Project or
     is not otherwise needed for the operation of the Project Facilities for the
     purposes hereinabove stated, and (ii) the release so proposed to be made
     will not impair the usefulness of the Project Facilities and will not
     destroy the means of ingress thereto and egress therefrom.

No release effected under this Section shall entitle the Company to any
diminution in or postponement or abatement of the rents payable under Section
5.3.

                                      -26-
<PAGE>

                                  ARTICLE IX
                                  ----------

                 ASSIGNMENT, SUBLEASING, PLEDGING AND SELLING;
                 ---------------------------------------------
                   REDEMPTION; RENT PREPAYMENT AND ABATEMENT
                   -----------------------------------------

          Section 9.1.  Assignment and Subleasing.  This Agreement may be
                        --------------------------
assigned by the Company without the necessity of obtaining the consent of the
Board or the Trustee, subject, however, to the following conditions:

          (a) no assignment (other than pursuant to Section 8.3) or sublease
     shall relieve the Company from primary liability for any of its obligations
     hereunder, and if any such assignment occurs, the Company shall continue to
     remain primarily liable for payment of the rents specified in Section 5.3
     and for performance and observance of the other agreements on its part
     herein provided to be performed and observed by it; and

          (b) the Company shall, within 30 days after the delivery thereof,
     furnish or cause to be furnished to the Board and to the Trustee a true and
     complete copy of each such assignment or sublease, as the case may be,
     together with any instrument of assumption.

          Section 9.2.  Pledge under Indenture.  Under the terms of the
                        -----------------------
Indenture, the Board shall assign and create a security interest with respect to
its interest in, and pledge all rents, revenues and receipts arising out of or
in connection with its ownership of, the Project to the Trustee, as security for
the payment of the principal of and interest on the Bonds, but the Indenture and
said assignment and pledge shall be subject and subordinate to this Agreement.

          Section 9.3.  Restrictions on Sale of Project by Board.  The Board
                        -----------------------------------------
agrees that, except as set forth in Section 9.2 or as otherwise provided in the
Agreement and Indenture, it shall not (i) sell (other than as contemplated
herein), assign, transfer or convey the Project during the Lease Term, (ii)
create or suffer to be created any debt, lien or charge on the rents, payments
and revenues arising out of or in connection with its ownership of the Project,
or (iii) take any other action which might reasonably be construed as tending to
cause or induce the levy or assessment of ad valorem taxes on the Project or on
its title in and to the Project. If the laws of the State at the time permit
such action to be taken, nothing contained in this Section shall prevent the
consolidation of the Board with, or the merger of the Board into, or the
transfer of the Project as an entirety to, any

                                      -27-
<PAGE>

public corporation whose property and income are not subject to taxation and
which has corporate authority to carry on the business of owning and leasing the
Project; provided (a) that no such action shall be taken without the prior
written consent of the Company, unless such action shall be required by law, and
(b) that upon any such consolidation, merger or transfer, the due and punctual
payment of the principal of and the interest on the Bonds, and the due and
punctual performance and observance of all the agreements hereof to be kept and
performed by the Board, shall be expressly assumed in writing by the corporation
resulting from such consolidation or surviving such merger or to which the
Project shall be transferred as an entirety.

          Section 9.4.  Redemption of Bonds.  The Board, at the request at any
                        --------------------
time of the Company and if the same are then redeemable, shall forthwith take
all steps that may be necessary under the applicable redemption provisions of
the Indenture to effect redemption of all or any portion of the Bonds, as may be
specified by the Company, on the earliest applicable redemption date on which
such redemption may be made under such applicable provisions or upon the date
set for the redemption by the Company pursuant to Sections 7.2 or 11.1. As long
as the Company is not in default hereunder and the Board is not obligated to
call Bonds pursuant to the terms of the Indenture, the Board shall not redeem
any Bond prior to its respective stated maturity unless requested to do so in
writing by the Company.

          Section 9.5.  Prepayment of Rents.  There is expressly reserved to the
                        --------------------
Company the right, and the Company is authorized and permitted, at any time it
may choose, so long as it is not in default hereunder, to prepay all or any part
of the rents and other payments payable under Section 5.3, and the Board agrees
that the Trustee may accept such prepayment when the same is tendered by the
Company. All prepaid rents shall be credited on the rents specified in Section
5.3, and at the election of the Company shall be used for the redemption or
purchase of Bonds in the manner and to the extent provided in the Indenture.

          Section 9.6.  Rent Abatements if Bonds Paid Prior to Maturity.  If at
                        ------------------------------------------------
any time the Indenture is discharged in accordance with Article X of the
Indenture, and if the Company is not at the time otherwise in default hereunder,
the Company shall be entitled to use and occupy the Project, without the
payment of rent during the interval (but otherwise on the terms and conditions
hereof), from the date on which such moneys are in the Bond Fund to and
including the later to occur of either (i) midnight, December 1, 2028 or (ii)
payment in full of all Bonds and any Additional Bonds.

                                      -28-
<PAGE>

          Section 9.7.  Reference to Bonds Ineffective After Bonds Paid.  Upon
                        ------------------------------------------------
payment in full of the Bonds and all fees and charges of the Trustee, all
references herein to the Bonds and the Trustee shall be ineffective and neither
the Trustee nor the holders of any of the Bonds shall thereafter have any rights
hereunder, saving and excepting those that shall have theretofore vested.
Reference is hereby made to Section 1002 of the Indenture which sets forth the
conditions upon the existence or occurrence of which payment in full of the
Bonds shall be deemed to have been made.

                                   ARTICLE X
                                   ---------

                        EVENTS OF DEFAULT AND REMEDIES
                        ------------------------------

          Section 10.1.  Events of Default Defined.  The following shall be
                         --------------------------
Events of Default hereunder and the term Event of Default shall mean, whenever
it is used herein, any one or more of the following events:

          (a) Failure by the Company to make any payment required under Section
     5.3 on or before the date that the payment is due and continuance of such
     failure for ten Business Days after receipt of notice of such failure from
     the Trustee.

          (b) Failure by the Company to observe and perform any other covenant,
     condition or agreement on its part under this Agreement (other than as
     referred to in subsection (a) of this Section), for a period of ninety (90)
     days after written notice, specifying such failure and requesting that it
     be remedied, shall be given to the Company by the Trustee, unless the
     Trustee shall agree in writing to an extension of such time prior to its
     expiration; provided, however, if the failure stated in the notice cannot
     be remedied within the applicable period, the Board and the Trustee will
     not unreasonably withhold their consent to an extension of such time if it
     is possible to correct such failure and corrective action is instituted by
     the Company within the applicable period and diligently pursued until the
     default is corrected;

          (c) Any warranty, representation or other statement by or on behalf of
     the Company contained in this Agreement, or any instrument furnished in
     compliance with or in reference to this Agreement or the Indenture, is
     false or misleading in any material respect; or

                                      -29-
<PAGE>

          (d) The dissolution or liquidation of the Company or the filing by the
     Company of a voluntary petition in bankruptcy, or the commission by the
     Company of any act of bankruptcy, or adjudication of the Company as a
     bankrupt, or assignment by the Company for the benefit of its creditors, or
     the entry by the Company into an agreement of composition with its
     creditors, or the approval by a court of competent jurisdiction of a
     petition applicable to the Company in any proceeding for its reorganization
     instituted under the provisions of the Federal bankruptcy statutes, as
     amended, or under any similar act which may hereafter be enacted. The term
     "dissolution or liquidation of the Company", as used in this subsection,
     shall not be construed to include the cessation of the corporate existence
     of the Company resulting from a merger or consolidation of the Company into
     or with another corporation or a dissolution or liquidation of the Company
     following a transfer of all or substantially all of its assets as an
     entirety.

          Section 10.2.  Remedies.  Whenever any Event of Default shall have
                         ---------
happened and be continuing, the Trustee, as the assignee of the Board under the
Indenture, shall have the following rights and remedies:

          (a) The Trustee may, and upon the written request of the holders of
     not less than twenty-five percent (25%) in outstanding principal amount of
     the Bonds, shall by notice in writing delivered to the Company, declare all
     installments of rent payable under Section 5.3 for the remainder of the
     Lease Term to be immediately due and payable. Upon such acceleration, the
     amount then due and payable by the Company as accelerated rent shall be the
     sum required to provide for payment in full of the Bonds on the earliest
     possible date on which such payment can be made. Such sums as may then
     become payable shall be paid into the Bond Fund and after payment in full
     of the Bonds and payment of any cost occasioned by such Event of Default,
     any excess moneys in the Bond Fund shall be returned to the Company as an
     overpayment of rent. Notwithstanding the foregoing, upon the occurrence of
     an Event of Default by reason of the occurrence of any event specified for
     Section 10.1(d), all installments of rent payable under Section 5.3 for the
     remainder of the Lease Term shall automatically become and be immediately
     due and payable

                                      -30-
<PAGE>

     without any action by the Trustee or the Board being necessary.

          (b) The Trustee may take whatever action at law or in equity may
     appear necessary or desirable to collect the rents and any other payments
     then due and thereafter to become due, or to enforce performance and
     observance of any covenant, condition or agreement of the Company
     hereunder;

          (c) The Trustee may exercise any remedies provided for in the
     Indenture and, with respect to any security interest, the rights of a
     secured party under the Uniform Commercial Code of the State.

Any amounts collected pursuant to action taken under this Section shall be paid
into the Bond Fund and applied in accordance with the provisions of the
Indenture or, if payment in full of the Bonds has been made, shall be paid to
the Company.

          Section 10.3.  No Remedy Exclusive.  No remedy herein conferred upon
                         --------------------
or reserved to the Board or the Trustee is intended to be exclusive of any other
available remedy or remedies, but each and every such remedy shall be cumulative
and shall be in addition to every other remedy given hereunder or now or
hereafter existing at law or in equity or by statute. No delay or omission to
exercise any right or power accruing upon the occurrence of any Event of Default
shall impair any such right or power or shall be construed to be a waiver
thereof, but any such right or power may be exercised from time to time and as
often as may be deemed expedient. In order to entitle the Board or the Trustee
to exercise any remedy reserved to it in this Article, it shall not be necessary
to give any notice, other than such notice or notices as may be herein expressly
required. Such remedies as are reserved to the Board in this Article shall also
extend to the Trustee, and the Trustee and the holders of the Bonds shall be
deemed third-party beneficiaries of all agreements herein contained.

          Section 10.4.  Agreement to Pay Attorneys' Fees and Expenses.  If
                         ----------------------------------------------
there should occur an Event of Default hereunder and the Board or the Trustee
should employ attorneys or incur other expenses for the collection of rents or
the enforcement of performance or observance of any agreement on the part of the
Company herein contained, the Company agrees that it will on demand therefor pay
to the Board or the Trustee the reasonable fee of such attorneys and such other
reasonable expenses so incurred by the Board or the Trustee.

                                      -31-
<PAGE>

          Section 10.5.  No Additional Waiver Implied by One Waiver. If any
                         -------------------------------------------
agreement contained herein should be breached by either party and thereafter
waived by the other party, such waiver shall be limited to the particular breach
so waived and shall not be deemed to waive any other breach hereunder.

          Section 10.6.  Waiver of Appraisement, Valuation, etc. If there should
                         ---------------------------------------
occur an Event of Default hereunder, the Company agrees to waive, to the extent
it may lawfully do so, the benefit of all appraisement, valuation, stay,
extension or redemption laws now or hereafter in force, and all right of
appraisement and redemption to which it may be entitled.

          Section 10.7.  Waiver of Events of Default. Notwithstanding anything
                         ----------------------------
herein to the contrary, the Trustee shall be deemed to have waived any Event of
Default hereunder and its consequences and to have rescinded any acceleration of
the rents and other amounts payable under this Agreement whenever the Trustee
has waived such Event of Default pursuant to the Indenture.

                                  ARTICLE XI
                                  ----------
                         OPTIONS IN FAVOR OF COMPANY;
                         -----------------------------
                        OBLIGATION TO PURCHASE PROJECT
                        ------------------------------

          Section 11.1.  General Option to Prepay Rent and Purchase Project. At
                         ---------------------------------------------------
any time, the Company shall have, and is hereby granted, the option to prepay
the rent payable under Section 5.3, in whole or in part. To exercise the option
granted in this paragraph, the Company shall, on or before the 20th day next
preceding the date set for redemption of the Bonds (which shall be an interest
payment date if less than all the Bonds are to be redeemed), give written notice
to the Board and the Trustee of its intention to exercise the option granted in
this section on such date and shall specify therein the principal amount of
Bonds to be redeemed with the moneys received upon such prepayment. Upon the
exercise of such option, the Company shall direct the Trustee to redeem Bonds in
the principal amount and on the date specified in the notice referred to in the
preceding sentence and shall make arrangements satisfactory to the trustee for
the giving of the required notice of redemption of Bonds. The purchase price
which shall be paid to the trustee by the Company in the event of its exercise
of the option granted in this paragraph shall be the sum of the principal amount
of the Bonds to be redeemed plus accrued interest thereon to the redemption date
plus all fees and expenses of the trustee and the paying agent accrued and to
accrue through such redemption date.

                                     -32-
<PAGE>

          The Company shall have the option to purchase the Project at any time,
in the event that the Indenture is discharged pursuant to Article IX of the
Indenture, by the Company (i) depositing irrevocably with the Trustee either
moneys in an amount which shall be sufficient, or Government Obligations the
principal of and interest on which when due will provide moneys which, together
with the moneys, if any, deposited with or held by the Trustee at the same time
and available for such purpose shall be sufficient pursuant to the Indenture, to
pay the principal of and interest on all of the Bonds due and to become due on
or prior to the redemption date (if the Bonds are to be redeemed) or maturity
thereof; (ii) paying to the trustee all Trustee's fees and expenses due in
connection with the payment or redemption of any such Bonds, and, (iii) if any
Bonds are to be redeemed on any date prior to their maturity, giving the Trustee
irrevocable instructions to redeem such Bonds on such date and either evidence
satisfactory to the Trustee that all redemption notices required by the
Indenture have been given or irrevocable power authorizing the Trustee to give
such redemption notices.

          Section 11.2.  Conveyance on Purchase. At the closing of any purchase
                         ----------------------
of the Project as provided hereunder, the Board shall upon receipt of the
purchase price deliver to the Company documents conveying to the Company good
and marketable fee simple title in and to the Project, subject to the following:
(a) those liens, security interests and encumbrances (if any) to which such
title in and to said property was subject at the effective date of this
Agreement but excluding this Agreement and the Indenture; (b) those liens and
encumbrances created by the Company or to the creation or suffering of which the
Company consented; (c) those liens and encumbrances resulting from the failure
of the Company to perform or observe any of its agreements contained herein; and
(d) Permitted Encumbrances other than this Agreement and the Indenture.

          Section 11.3.  Relative Positions of Options and Indenture. The
                         -------------------------------------------
options granted to the Company in this Article shall be and remain prior and
superior to the Indenture and may be exercised whether or not there exists an
Event of Default hereunder, provided that the existence of such Event of Default
will not result in nonfulfillment of any condition to the exercise of any such
option.

                                     -33-
<PAGE>

                                  ARTICLE XII
                                  -----------
                                 MISCELLANEOUS
                                 -------------

          Section 12.1.  Notices. All notices, certificates or other
                         -------
communications hereunder shall be sufficiently given and shall be deemed given
when mailed by registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:

     (a)  If to the Board   - The Industrial Development
                              Board of the City of
                              Phenix City, Alabama
                              c/o Smith & Smith
                              1503 Broad Street
                              Phenix City, Alabama 36867
                              Attention: Sydney S. Smith, Esq.

     (b)  If to the Company - Mead Coated Board, Inc.
                              Mead World Headquarters
                              Dayton, Ohio 45463
                              Attention: Treasurer

                              with a copy to:

                              Smith & Schnacke
                              A Legal Professional Association
                              2900 DuBois Tower
                              Cincinnati, Ohio 45202
                              Attention: Robert A. Selak

     (c)  If to the Trustee - AmSouth Bank N.A.
                              1900 Fifth Avenue North
                              Birmingham, Alabama 35203
                              Attention: Corporate Trust
                                         Department

A duplicate copy of each notice, certificate or other communication given
hereunder by either the Board, the Company or the Trustee to any one of the
others shall also be given to all of the others. The Board, the Company and the
Trustee may, by notice given hereunder, designate any further or different
addresses to which subsequent notices, certificates or other communications
shall be sent.

          Section 12.2.  Binding Effect. This Agreement shall inure to the
                         --------------
benefit of and shall be binding upon the Board, the

                                      -34-
<PAGE>

Company and their respective successors and assigns. To the extent provided
herein and in the Indenture, the Trustee and the holders of the Bonds shall be
deemed to be third party beneficiaries hereof, but nothing herein contained
shall be deemed to create any right in, or to be for the benefit of, any other
person not a party hereto.

          Section 12.3.  Severability. If any provision hereof shall be held
                         ------------
invalid or unenforceable by any court of competent jurisdiction, such holding
shall not invalidate or render unenforceable any other provision hereof.

          Section 12.4.  Amounts Remaining in Bond Fund. Subject to and in
                         ------------------------------
accordance with the terms and conditions of Section 709 of the Indenture,
certain surplus moneys remaining in the two accounts in the Bond Fund shall
belong to and be paid to the Company by the Trustee as an overpayment of rents.

          Section 12.5.  Amendments, Changes and Modifications. Except as
                         -------------------------------------
otherwise provided herein or in the Indenture, subsequent to the date of
issuance and delivery of the Bonds and prior to their payment in full, this
Agreement may not be effectively amended or terminated without the written
consent of the Trustee.

          Section 12.6.  Execution Counterparts. This Agreement may be executed
                         ----------------------
in any number of counterparts, each of which so executed shall be deemed to be
an original, but all such counterparts shall together constitute but one and the
same instrument.

          Section 12.7.  Captions. The captions and headings herein are for
                         --------
convenience only and in no way define, limit or describe the scope or intent of
any provisions hereof.

          Section 12.8.  Recording of Agreement. This Agreement and every
                         ----------------------
assignment and modification hereof shall be recorded in the Office of the Judge
of Probate of Russell County, Alabama, or in such other office as may be at the
time provided by law as the proper place for such recordation.

          Section 12.9.  Law Governing Construction of Agreement. This Agreement
                         ---------------------------------------
shall be governed by, and construed in accordance with, the laws of the State.

          Section 12.10.  Net Lease. This Agreement shall be deemed a "net
                          ---------
lease", and the Company shall pay absolutely net during the Lease Term the rents
specified herein, without

                                     -35-
<PAGE>

abatement, deduction or set-off other than those herein expressly provided.

          IN WITNESS WHEREOF, the Board and the Company have caused this
Agreement to be executed in their respective corporate names as of the date
first above written.

                                       THE INDUSTRIAL DEVELOPMENT BOARD OF THE
                                       CITY OF PHENIX CITY, ALABAMA

                                       By: /s/ Kenneth A. Roberts
                                          ------------------------------------
                                       Title: Chairman

                                       MEAD COATED BOARD, INC.

                                       By: /s/ W. D. Bloebaum, Jr.
                                          ------------------------------------
                                       Title: Treasurer

                                      -36-
<PAGE>

                            ACKNOWLEDGMENT OF BOARD

STATE OF ALABAMA

COUNTY OF RUSSELL

          I, Sydney S. Smith a Notary Public in and for said County in said
State, hereby certify that Kenneth A. Roberts, whose name as Chairman of the
Board of Directors of THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX
CITY, ALABAMA, a public corporation and instrumentality under the laws of the
State of Alabama, is signed to the foregoing instrument and who is known to me,
acknowledged before me on this day that, being informed of the contents of the
said instrument, he, as such officer and with full authority, executed the same
voluntarily for and as the act of said public corporation.

          GIVEN under my hand and seal of office, this 20th day of December,
1988.

                                           /s/  Sydney S. Smith
                                        ------------------------------------
                                                  Notary Public

(SEAL)
                                        My commission expires: 2/25/92

                                      -37-
<PAGE>

                           ACKNOWLEDGMENT OF COMPANY

STATE OF OHIO

COUNTY OF MONTGOMERY

          I, Robert A. Selak, A Notary Public in and for said County in said
State, hereby certify that W. D. Bloebaum, Jr., whose name as Treasurer of MEAD
COATED BOARD, INC., a corporation organized and existing under the laws of the
State of Delaware, is signed to the foregoing instrument and who is known to me,
acknowledged before me on this day that, being informed of the contents of the
said instrument, he or she, as such officer and with full authority, executed
the same voluntarily for and as the act of said corporation.

          GIVEN under my hand and seal of office, this 22nd day of December,
1988.

                                       /s/  Robert A. Selak
                                       ---------------------------------
                                            Notary Public

(SEAL)
                                       My commission expires:__________

                                       ROBERT A. SELAK, Attorney at Law
                                       Notary Public, State of Ohio
                                       My Commission has no expiration date.
                                       Section 147.03 O. R. C.

                                      -38-
<PAGE>

                                  EXHIBIT "A"

                                      to

                            Lease Agreement between
                     THE INDUSTRIAL DEVELOPMENT BOARD OF
                       THE CITY OF PHENIX CITY, ALABAMA
                                      and
                            MEAD COATED BOARD, INC.
                         dated as of December 1, 1988

                          DESCRIPTION OF PROJECT LAND
                          ---------------------------

The Project Land includes the following property:

              NEW RECLAIM PLATE FEED AND CONVEYOR AREA (C-28511),
              ---------------------------------------------------
                CHIPS CONVEYOR TO SCREEN HOUSE AREA (C-28513),
                ----------------------------------------------
                     AND CHIPS SCREEN HOUSE AREA (C-28515)
                     -------------------------------------

     All that portion of land and structures lying 13' on each side of the
following described centerline and also including any specifically noted areas
which extend beyond said centerline strip:

     Commence at a monument having grid coordinates N 792,350.00, E 234,500.00,
of the West Zone of the State Georgia Coordinate System; and lying in Section
28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N 63(degree) 51'
31" E, 790.90' to the point of beginning; thence N 90(degree) 00' W, 82.00;
thence S 0' 00" W, 8.75'; thence N 90(degree) 00' W, 232.22'; thence S
15(degree) 17' 15" E, 479.72' to a point on the northmost side of a rectangular
area (Chip Screen House) which parallels last said course and is 75.0' north to
south (7.00' of which is west of last said course) by 49.0' east to west; said
rectangular area being the point of ending; said land being 0.56 + acres;

                 CHIPS CONVEYOR TO PINE STORAGE AREA (C-28538)
                 ---------------------------------------------

     All that portion of land and structures lying 14' on each side of the
following described centerline:

                                      -39-
<PAGE>

     Commence at a monument having grid coordinates N 792,350.00, E 234,500.00,
of the West Zone of the State of Georgia Coordinate System; and lying in Section
28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N 45(degree) 24'
34" E, 692.79' to the point of beginning; thence S 36(degree) 51' 02" E, 454.94'
to the point of ending; said land being 0.29 (plus or minus) acres;

            CHIPPER DISCHARGE CONVEYOR AREA (C-28536) AND CHIPS TO
            ------------------------------------------------------
                   HARDWOOD STORAGE CONVEYOR AREA (C-28537)
                   ----------------------------------------

     All that portion of land and structures lying 14' on each side of the
following described centerline and also including any specifically noted areas
which extend beyond said centerline strip:

     Commence at a monument having grid coordinates N 792,350.00, E 234,500.00,
of the West Zone of the State of Georgia Coordinate System; and lying in Section
28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N 71(degree) 34'
06" E, 600.24' to the point of beginning; thence S 71(degree) 04' 32" E,
640.91'; thence N 50(degree) 08' 32" E, 61.59' to the point of ending; said land
being 0.45 (plus or minus) acres;

                   CHIP CONVEYOR TO DIGESTER AREA (C-28521),
                   -----------------------------------------
                  CHIP CONVEYOR TO SURGE BIN AREA (C-28519),
                  ------------------------------------------

                         AND CHIP SILO AREA (C-28520)
                         ----------------------------

     All that portion of land and structures lying 14' on each side of the
following described centerline and also including any specifically noted areas
which extend beyond said centerline strip:

     Commence at a monument having grid coordinates N 792,350.00, E 234,500.00,
of the West Zone of the State of Georgia Coordinate System; and lying in Section
28, T 14 N, R 30 E, County of Russell, State of Alabama; thence S 48(degree) 21'
59" W, 84.29' to the point of beginning; thence S 56(degree) 07' 32" E, 319.22'
to the center of a circular area (Chip Silo) with a radius of 15.00' and a
central angle of 360(degree) 00' bounded by a rectangular structure 32' -6"
(plus or minus) East-West and 32' -6" (plus or minus) North-South; thence N 82
(degree) 51' 32" E, 355.48' to the point of ending; said land being 0.45 (plus
or minus) acres;

                                      -40-
<PAGE>

                  NEW WASHER FACILITY AND BATCH DIGESTER AREA
                  -------------------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System;
     thence N 48(degree) 06' 06" W, 35.94' to the point of beginning (N
     792,374.0, E 234,473.25); thence S 0(degree) 00' W, 133.50'; thence N
     90(degree) 00' W, 103.39'; thence S 0(degree) 00' W, 103.50'; thence
     90(degree) 00' W, 48.00'; thence N 0(degree) 00' W, 55.75'; thence N
     90(degree) 00' W, 80.00'; thence S 0(degree) 00' W, 42.75'; thence N
     90(degree) 00' W, 63.00'; thence N 0(degree) 00' W, 110.00'; thence N
     45(degree) 00' E, 55.00'; thence N 0(degree) 00' W, 23.11'; thence N
     90(degree) 00' E, 23.00'; thence N 0(degree) 00' W, 23.25'; thence N
     90(degree) 00' E, 170.00'; thence N 0(degree) 00' W, 28.75'; thence N
     90(degree) 00' E, 62.50' to the point of beginning; said area being 1.01
     (plus or minus) acres;

            MILL WATER COOLING TOWER AND NEW REACTOR CLARIFIER AREA
            -------------------------------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
      T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
      described as follows:

          Commence at a monument having grid coordinates N 792,350.00, E
      234,500.00, of the West Zone of the State of Georgia Coordinate System;
      thence S 48(degree) 46' 07" W, 591.71' to the point of beginning (N
      791,960.0 E 234,055.0); thence S 0(degree) 00' W, 170.00'; thence N
      90(degree) 00' W, 111.00; thence N 0(degree) 00' W, 170.00'; thence N
      90(degree) 00' E, 111.00' to the point of beginning; said land being 0.43
      (plus or minus) acres;

                       TURPENTINE RECOVERY FACILITY AREA
                       ---------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
      T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
      described as follows:

          Commence at a monument having grid coordinates N 792,350.00, E
      234,500.00, of the West Zone of the State of Georgia Coordinate System;
      thence S 63(degree) 26' 06" W, 11.18' to the point of beginning (N
      792,345.0, E 234,490.0); thence N 0' 00" W, 30.00'; thence N 90(degree)
      00" E, 20.00'; thence S 0(degree) 00' W, 30.00'; thence N 90(degree) 00'
      W, 20.00' to the point of beginning; said land being 0.01 (plus or minus)
      acres;

                                     -41-
<PAGE>

          LOG STORAGE AREA (C-28522), LOG FEED DECKS AREA (C-28523),
          ----------------------------------------------------------

           DRUM AREA (C-28525), VIBRATING CONVEYORS AREA (C-28532),
           ---------------------------------------------------------

              CHIPPER POWER FEED ROLLS AREA (C-28528), CHIP BLDG.
              ---------------------------------------------------

         AREA (C-28535), AND BARK COLLECTING CONVEYOR AREA (C-28531)
         ------------------------------------------------------------

     All that portion of land, and structures lying thereon, in Section 28, T 14
N, R 30 E, County of Russell, State of Alabama, more particularly described as
follows:

     Commence at a monument having grid coordinates N 792,350.00, E 234,500.00,
of the West Zone of the State of Georgia Coordinate System; thence N 80(degrees)
22' 54" E, 879.79' to the point of beginning; thence N 0(degrees) 00' W,
326.00'; thence N 90(degrees) 00' E, 711.08'; thence S 0(degrees) 00' W,
326.00'; thence N 90(degrees) 00' W, 328.00'; thence S 0(degrees) 00' W,
188.00'; thence N 90(degrees) 00' W, 50.00'; thence N 0(degrees) 00' W, 188.00';
thence N 90(degrees) 00' W, 333.08' to the point of beginning; said land being
5.54 (plus or minus) acres;

                        AREA "B" MAINTENANCE SHOP AREA
                        ------------------------------

     All that portion of land, and structures lying thereon, in Section 28, T 14
N, R 30 E, County of Russell, State of Alabama, more particularly described as
follows:

     Commence at a monument having grid coordinates N 792,350.00, E 234,500.00,
of the West Zone of the State of Georgia Coordinate System; thence S 11(degrees)
04' 57" W, 197.69' to the point of beginning (N 792,156.0, E 234,462.0); thence
S 0(degrees) 00" W, 82.00'; thence N 90(degrees) 00" W, 52.00'; thence N
0(degrees) 00' W, 82.00'; thence N 90(degrees) 00' E, 52.00 to the point of
beginning; said land being 0.10 (plus or minus) acres;

                       NEW LIM KILN/RECAUSTICIZING AREA
                       --------------------------------

     All that portion of land, and structures lying thereon, in Section 28,
T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described
as follows:

     Commence at a monument having grid coordinates N 793,150.19, E 233,250.02,
of the West Zone of the State of Georgia Coordinate System; thence N
70(degrees) 51' 29" E, 267.79' to the point of beginning (793,238.0 E 233,503.
0); thence N 90(degrees)

                                      -42-
<PAGE>

00' E, 399.23'; thence S 0(degrees) 00' W, 50.00'; thence N 90(degrees) 00' E,
45.00'; thence S 0(degrees) 00' W, 78.00'; thence N 90(degrees) 00' W, 444.23';
thence N 0(degrees) 00' W, 128.00' to the point of beginning; said land being
1.25 (plus or minus) acres;

                          NO. 2 RECOVERY BOILER AREA
                          --------------------------

     All that portion of land, and structures lying thereon, in Section 28, T 14
N, R 30 E, County of Russell, State of Alabama, more particularly described as
follows:

     Commence at a monument having grid coordinates N 793,150.19, E 233,250.02,
of the West Zone of the State of Georgia Coordinate System; thence S 40(degrees)
16' 34" E, 439.77' to the point of beginning (N 792,814.67, E 233,534.32');
thence N 90(degrees) 00' E, 36.30'; thence N 0(degrees) 00' W, 20.50'; thence N
90(degrees) 00' E, 72.26'; thence N 0(degrees) 00' W, 14.83'; thence N
90(degrees) 00' E, 110.50'; thence S 0(degrees) 00' W, 42.58'; thence N
90(degrees) 00' E, 26.00'; thence S 0(degrees) 00' W, 81.00'; thence N
90(degrees) 00' W, 51.00'; thence N 0(degrees) 00' W, 25.12'; thence N
90(degrees) 00' W, 85.50'; thence N 00(degrees) 00' W, 8.63'; thence N
90(degrees) 00' W, 72.26'; thence N 90(degrees) 00' W, 20.50'; thence N
0(degrees) 00' W, 36.30'; thence N 0(degrees) 00' W, 34.00' to the point of
beginning; said land being 0.47 (plus or minus) acres;

                      NEW EVAPORATORS AND NEW TANKS AREA
                      ----------------------------------

     All that portion of land, and structures lying thereon, in Section 28,
T 14 N, R 30 E, County of Russell, State of Alabama, more particularly described
as follows:

     Commence at a monument having grid coordinates N 793,150.19, E 233,250.02,
of the West Zone of the State of Georgia Coordinate System; thence S 62(degrees)
01' 33" E, 637.83' to the point of beginning (N 792,851.0, E 233,813.33); thence
N 90(degrees) 00' E, 246.67'; thence along an arc South and East 53.41' having a
radius of 34.00' with a central angle of 90(degrees) 00'; thence S 0(degrees)
00' W, 135.33'; thence along an arc South and West 53.41' having a radius of
34.00' with a central angle of 90(degrees) 00'; thence N 90(degrees) 00' W,
34.00'; thence N 0(degrees) 00' W, 99.79'; thence N 90(degrees) 00' W, 69.00';
thence N 59(degrees) 47' 19" W, 91.42'; thence N 90(degrees) 00' W, 64.67';
thence N 0(degrees) 00' W, 57.54' to the point of beginning; said land being
0.72 (plus or minus) acres;

                                      -43-
<PAGE>

     (collectively, the "Unimproved Land"); less, in each case, any structures
     constructed and leased pursuant to a Lease Agreement dated July 1, 1977,
     and recorded in Deed Book 550 at Pages 51-94 (as amended to date, the "1977
     Lease") under which Lessor leased to Georgia Kraft Company ("Georgia
     Kraft") a parcel of land in Russell County, Alabama as more particularly
     described in Exhibit A to the Lease (the "1977 Land"), together with
     certain items of equipment described in Exhibit B to the 1977 Lease
     (Georgia Kraft has assigned its interest in the 1977 Lease to Mead Coated
     Board, Inc.);

together with the following easements:

          (a)  An easement and right for pedestrian and vehicular traffic to use
     all present and future walks, railroads, roads, driveways and docks upon
     the Board Premises (the 1977 Land less and except the 1988 Land) in order
     to provide all necessary or convenient ingress or egress between the
     Unimproved Land and railroads, public roads and highways and the
     Chattahoochee River and to permit passage between the Unimproved Land and
     the Board Premises;

          (b)  An easement and right for the passage of pedestrians and vehicles
     and for the construction, erection, installation, operation, maintenance,
     renewal, replacement and use of material conveying systems, including
     without limitation pipelines, through any part of the Board Premises
     necessary or convenient in order to assure the passage of equipment, raw
     materials, items in the process of manufacture, and finished products from
     the Unimproved Land to the Board Premises, including without limitation
     such rights and easements as are necessary for the movement of personnel,
     vehicles and materials among and between the various parcels of land
     comprising the Board Premises in order to permit and facilitate the
     operation of the Project;

          (c)  An easement and right to erect, install, construct, maintain,
     renew, replace and use on, over and under any part of the Board Premises,
     such pipes, conduits, and wires as are necessary or convenient to insure
     access to and an adequate system for or supply of gas, oil, steam,
     compressed air, process and space heat, water, fire protection, sewage and
     industrial waste disposal, electricity, communications, instrumentation and
     control, and other similar facilities to the Unimproved Land and the
     Project including, without limitation, the right to make connections with
     machinery,

                                      -44-
<PAGE>

     equipment, pipes, conduits and wires, structures and other improvements and
     appurtenances thereto, on the Board Premises; and

          (d)  An easement and right to create and maintain upon the Board
     Premises encroachments of equipment, structures or other improvements which
     will be included on the Unimproved Land and within the Project as presently
     planned, and any similar replacements or substitutions of portions of the
     Project for as long as any such equipment, structures or other improvements
     remain standing, including without limitation the rights of lateral or
     party wall support, and to connect any such equipment, structure or other
     improvements to any structure or improvement on the Board Premises;

but subject to the following easements over the Unimproved Land in favor of the
Board Premises:

          (a)  An easement and right for pedestrian and vehicular traffic to use
     all present and future walks, railroads, roads, driveways and docks upon
     the Unimproved Land in order to provide all necessary or convenient ingress
     and egress among and between all portions of the Board Premises and between
     the Board Premises and the Unimproved Land, including without limitation
     portions on which additional improvements may be erected, and railroads,
     public works and highways and the Chattahoochee River and to permit passage
     among and between the various parcels of land comprising the Board
     Premises;

          (b)  An easement and right for the passage of pedestrians, vehicles,
     and for the construction, installation, operation, maintenance, renewal,
     replacement and use of material conveyance systems, including without
     limitation, pipelines, through any part of the Unimproved Land necessary or
     convenient in order to assure the passage of equipment, and finished
     products from one portion of the Board Premises to another or between the
     Board Premises and the Unimproved Land, including, without limitation such
     rights and easements as are necessary for the movement of personnel,
     vehicles and material among and between the various parcels of land
     comprising the Board Premises in order to permit and facilitate the
     operation of any facilities located on the Board Premises;

                                      -45-
<PAGE>

          (c)  An easement and right to erect, install, construct, maintain,
     renew, replace and use on, over and under any part of the Unimproved Land,
     such pipes, conduits, and wires and appurtenances as are necessary or
     convenient to assure access to and an adequate system for or supply of gas,
     oil, steam, compressed air, process and space heat, water, fire protection,
     sewage and industrial waste disposal, electricity, communications,
     instrumentation and control, and other similar facilities to the Board
     Premises, including without limitation, the right to make connections with
     machinery, equipment, pipes, conduits and wires, structures and other
     improvements and appurtenances thereto, on the Unimproved Land; and

          (d)  An easement and right to maintain any present equipment,
     structures or other improvements included within the facilities presently
     located on the Board Premises as encroachments upon the Unimproved Land as
     long as any such equipment, structures or other improvements remain
     standing, and to construct and maintain similar encroachments on the
     Unimproved Land in respect of any additional improvements constructed
     adjacent to the Unimproved Land, as long as any such additional
     improvements remain standing, including without limitation the rights of
     lateral or party wall support, and to connect such additional improvements
     to any structure or any improvements on the Unimproved Land.

                                     -46-
<PAGE>

                                  EXHIBIT "B"

                                      to

                            Lease Agreement between
                     THE INDUSTRIAL DEVELOPMENT BOARD OF
                       THE CITY OF PHENIX CITY, ALABAMA
                                      and
                           MEAD COATED BOARD, INC.
                         dated as of December 1, 1988

                    PROJECT SUMMARY - INDUSTRIAL FACILITIES

                            RUSSELL COUNTY, ALABAMA

The Project in an expansion of an existing coated linerboard mill (the "Mill")
in Russell County, Alabama owned by the Board and leased to the Company. The
Project consists primarily of a paper machine to product coated linerboard, such
machine having an annual production capacity of approximately 400,000 tons of
coated linerboard. The Project also includes other related facilities, including
an expansion of and additions to the existing wood yard and wood handling
equipment; a new bleach plant; a new recovery boiler; and a substantial
expansion of the Mill's existing effluent treatment system.

                                     -47-
<PAGE>

                                FIRST AMENDMENT
                                ---------------
                                      TO
                                      --
                                LEASE AGREEMENT
                                ---------------

          THIS FIRST AMENDMENT TO LEASE AGREEMENT (the "Amendment") is made and
entered into as of March 1, 1989, by and between THE INDUSTRIAL DEVELOPMENT
BOARD OF THE CITY OF PHENIX CITY, ALABAMA (the "Board"), a public body corporate
and politic duly organized and existing under the Constitution and laws of the
State of Alabama, and MEAD COATED BOARD, INC., a Delaware corporation (the
"Company").

                                R E C I T A L S
                                - - - - - - - -

          The Board has previously issued and sold $85,000,000 in aggregate
principal amount of The Industrial Development Board of the City of Phenix City,
Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series
1988A (the "Series 1988A Bonds"), pursuant to a Trust Indenture, dated as of
December 1, 1988 (the "Original Indenture"), from the Board to AmSouth Bank
N.A., as Trustee (the "Trustee").

          The Board has used the proceeds of the sale of the Series 1988A Bonds
for use in the payment of outstanding industrial development temporary borrowing
notes (the "Notes") issued by the Board for the purpose of funding the
acquisition, construction and installation of a coated natural kraft mill and
related facilities (the "Project") in connection with certain industrial
facilities located near Phenix City, Alabama. The Project is owned by the Board
and leased to the Company pursuant to a Lease Agreement dated as of December 1,
1988 (the "Agreement"). The Agreement obligates the Company to make rental
payments in such amounts and at such times as will provide for the payment of
the principal and interest on the Series 1988A Bonds as the same becomes due and
payable.

          Under Article IV of the Original Indenture, the Board is permitted to
issue Additional Bonds (as defined in the Original Indenture) in order to pay
additional Notes issued by the Board in connection with the Project. In that
connection, the Board is issuing $43,000,000 in aggregate principal amount of
Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989A
(the "Series 1989A Bonds"), pursuant to the Indenture as supplemented by a First
Supplemental Trust Indenture dated as of March 1, 1989 (the "Supplemental
Indenture") from the Board to the Trustee. The Original Indenture as
supplemented by the Supplemental Indenture is hereinafter referred to as the
"Indenture".

<PAGE>

          NOW, THEREFORE, as contemplated by Section 4.5 of the Agreement and in
accordance with Section 1501 of the Original Indenture, the parties hereto
desire to amend the Agreement as follows:

                                   ARTICLE I

                     PROVISIONS FOR AMENDING THE AGREEMENT
                     -------------------------------------

          Section 1.1  Amendment of Section 5.3 of the Agreement. The term
          -----------  -----------------------------------------
"Bonds" as used in Section 5.3 of the Agreement shall include the Series 1989A
Bonds.

          Section 1.2  Terms of Agreement Applicable to Series 1989A Bonds. All
          -----------  ---------------------------------------------------
terms, conditions, representations and covenants set forth in the Agreement
applicable to the Series 1988A Bonds and not specifically otherwise provided for
in the Indenture, any supplements thereto or the Agreement, shall apply with
full force and effect to the Series 1989A Bonds. Without limiting the foregoing,
all references in the Agreement to the "Bonds" shall be deemed to mean the
Series 1988A Bonds and the Series 1989A Bonds, including without limitation the
provisions of Section 5.3 of the Agreement relating to the payment of rents.

          Section 1.3  Representations and Warranties by the Board. The Board
          -----------  -------------------------------------------
     makes the following representations and warranties as the basis for the
     undertakings on its part herein contained:

          (a) Organization and Authority. The Board is a public corporation duly
              --------------------------
     organized and validly existing under the provisions of the Act by authority
     of a resolution adopted by the Board of Commissioners of the City on June
     14, 1960 and a Certificate of Incorporation duly filed for record on
     October 17, 1960, in the office of the Judge of Probate of Russell County,
     Alabama, which Certificate of Incorporation has not been amended or been
     revoked and is of full force and effect. The Board has all requisite power
     and authority under the Act (1) to issue the Series 1989A Bonds, (2) to use
     the proceeds thereof to refund the Notes issued to pay the cost to acquire,
     construct and install the Project, (3) to own, lease, encumber and dispose
     of the Project, and (4) to enter into, and perform its obligations under,
     the Indenture, the Agreement and this Amendment. This Amendment and the
     Supplemental Indenture have been duly authorized, executed and delivered by
     the Board and are legal, valid and binding agreements enforceable against
     the Board in accordance with their respective terms.

          (b) Pending Litigation. There are no actions, suits, proceedings,
              ------------------
     inquiries or investigations pending, or to the knowledge of the Board
     threatened, against or

                                      -2-

<PAGE>

     affecting the Board in any court or before any governmental authority or
     arbitration board or tribunal, which adversely affect the validity or
     enforceability of the Series 1989A Bonds, the Indenture, the Agreement,
     this Amendment, or any agreement or instrument to which the Board is a
     party and which is used or contemplated for use in the consummation of the
     transactions contemplated hereby or thereby.

          (c) Issue, Sale and Other Transactions Are Legal and Authorized. The
              -----------------------------------------------------------
     issue and sale or the Series 1989A Bonds and the execution and delivery by
     the Board of the Supplemental Indenture and this Amendment and the
     compliance by the Board with all of the provisions of each thereof and of
     the Series 1989A Bonds (i) are within the purposes, powers and authority of
     the Board, (ii) to the best of the knowledge of the Board, have been done
     in full compliance with the provisions of the Act, are legal and will not
     conflict with or constitute on the part of the Board a violation of or a
     breach of or default under, or result in the creation of any lien or
     encumbrance (other than Permitted Encumbrances under the Agreement) upon
     any property of the Board under the provisions of, its certificate of
     incorporation or Bylaws, or any indenture, mortgage, deed of trust, note
     agreement or other agreement or instrument to which the Board is a party or
     by which the Board is bound, or any license, judgment, decree, law,
     statute, order, rule or regulation of any court or governmental agency or
     body having jurisdiction over the Board or any of its activities or
     properties, and (iii) have been duly authorized by all necessary corporate
     action on the part of the Board.

          (d) Governmental Consents. Neither the nature of the Board nor any of
              ---------------------
     its activities or properties, nor any relationship between the Board and
     any other person, nor any circumstance in connection with the offer, issue,
     sale or delivery of any of the Series 1989A Bonds is such as to require the
     consent, approval or authorization of, or the filing, registration or
     qualification with, any governmental authority on the part of the Board in
     connection with the execution, delivery and performance of the Supplemental
     Indenture and this Amendment, or the offer, issue, sale or delivery of the
     Series 1989A Bonds, other than (i) the filing with the Alabama Securities
     Commission of the notification of the Board's intention to issue the Series
     1989A Bonds required by Act No. 586 enacted at the 1978 Regular Session of
     the Legislature of the State and the issuance by the Director of the
     Alabama Securities Commission of such Certificate of

                                      -3-

<PAGE>

     Notification as may be required by said Act, and (ii) the due filing and
     recording of this Amendment, the Supplemental Indenture and the financing
     statements covering the security interests created hereunder and under the
     Indenture. The Board has filed the notification referred to in (i) of the
     preceding sentence and the Director of the Alabama Securities Commission
     has issued a Certificate of Notification applicable to the Series 1989A
     Bonds, which Certificate of notification has not been revoked or rescinded
     and is in full force and effect.

          (e) No Defaults.  The Board is not in default under the Act or under
              -----------
     its Certificate of Incorporation or Bylaws or any other agreement or
     instrument to which it is a party or by which is bound.

          Section 1.4  Representations and Warranties by the Company. The
          -----------  ---------------------------------------------
Company makes the following representations and warranties as the basis for the
undertakings on its part herein contained:

          (a) The Company (i) is a corporation duly organized, validly existing
     and in good standing under the laws of the State of Delaware, (ii) has all
     requisite corporate power and authority to carry on its business as now
     being conducted and as presently proposed to be conducted, and (ii) has
     duly qualified and is authorized to do business and is in good standing as
     a foreign corporation in the State.

          (b) The Company has the corporate power and has been duly authorized
     to enter into this Amendment and to perform all of its obligations
     hereunder.

          (c) The willingness of the Board to issue the Series 1989A Bonds for
     purposes of financing costs of acquiring, constructing, and installing the
     Project, and to lease the Project to the Company, has induced the Company
     to locate the Project within the State of Alabama and, more particularly,
     within 25 miles of the City.

          (d) The Company is not subject to any contractual or other limitation
     or provision of any nature whatsoever which in any material way limits,
     restricts or prevents the Company from entering into this Amendment, or
     performing any of its obligations hereunder; and the execution and delivery
     of this Amendment, the consummation of the transactions contemplated
     hereby, and the fulfillment of or compliance with the terms and conditions
     of this

                                      -4-

<PAGE>

     Amendment will not conflict with or result in a breach of the terms,
     conditions or provisions of any restriction, agreement or instrument to
     which the Company is a party or by which it is bound, or constitute a
     default under any of the foregoing.

          (e) No event has occurred and no condition exists that would
     constitute an "Event of Default" under the Agreement or this Amendment
     which, with the lapse of time or with the giving of notice or both, would
     become an "Event of Default" under the Agreement or this Amendment.

          (f) To the best of its knowledge and belief, the Company is not in
     violation of any laws, ordinances, governmental rules or regulations to
     which it is subject and has no failed to obtain any licenses, permits,
     franchises or other governmental authorizations necessary to the ownership
     of its properties or to the conduct of its business, which violation or
     failure to obtain would reasonably be expected to materially and adversely
     affect the ability of the Company to perform its obligations under this
     Amendment.

                                  ARTICLE II

                                 MISCELLANEOUS
                                 -------------

          Section 2.1  Agreement and Amendment as One Document. As amended by
          -----------  ---------------------------------------
this Amendment, the Agreement is in all respects ratified and confirmed and the
Agreement and this Amendment shall be read, taken and construed as one and the
same instrument.

          Section 2.2  References. All references herein or in the Agreement to
          -----------  ----------
any Article, Section or provision of the Agreement shall refer to any such
Article, Section or provision as hereby amended.

          Section 2.3  Counterparts. This Amendment may be simultaneously
          -----------  ------------
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.

          Section 2.4  Captions. The captions or headings in this Amendment are
          -----------  --------
for convenience only and in no way define, limit or describe the scope or intent
of any provision of this Amendment.

          Section 2.5  Applicable Law. This Amendment shall be construed in
          -----------
accordance with the laws of the State of Alabama.

                                      -5-

<PAGE>

          IN WITNESS WHEREOF, the Board and the Company have caused this
Amendment to be executed in their respective corporate names as of the date
first written above.

                                       THE INDUSTRIAL DEVELOPMENT BOARD OF
                                       THE CITY OF PHENIX CITY, ALABAMA

                                       By: Kenneth A. Roberts
                                           -------------------------------------
                                           Chairman

                                       MEAD COATED BOARD, INC.

                                       By: W. D. Bloebaum, Jr.
                                           -------------------------------------
                                           Title: Treasurer

                                      -6-
<PAGE>

                            ACKNOWLEDGMENT OF BOARD

STATE OF ALABAMA

COUNTY OF RUSSELL

          I, Sydney S. Smith, a Notary Public in and for said County in said
State, hereby certify that Kenneth A. Roberts, whose name as Chairman of
the Board of Directors of THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX
CITY, ALABAMA, a public corporation and instrumentality under the laws of the
State of Alabama, is signed to the foregoing instrument and who is known to me,
acknowledged before me on this day that, being informed of the contents of the
said instrument, he, as such officer and with full authority, executed the same
voluntarily for and as the act of said public corporation.

          GIVEN under my hand and seal of office, this 24th day of February,
1989.

                                       /s/ Sydney S Smith
                                       -------------------
                                           Notary Public

(SEAL)
                                       My commission expires: 2/25/92

                                      -7-
<PAGE>

                           ACKNOWLEDGMENT OF COMPANY

STATE OF OHIO

COUNTY OF MONTGOMERY

          I, ____________________, A Notary Public in and for said County in
said State, hereby certify that William D. Bloebaum, Jr., whose name as
Treasurer of MEAD COATED BOARD, INC., a corporation organized and existing under
the laws of the State of Delaware, is signed to the foregoing instrument and who
is known to me, acknowledged before me on this day that, being informed of the
contents of the said instrument, he, as such officer and with full authority,
executed the same voluntarily for and as the act of said corporation.

          GIVEN under my hand and seal of office, this 1st day of March, 1989.

                                       /s/ Charity K. Burgess
                                       -------------------------
                                       Notary Public

(SEAL)

                                       My commission expires: July 29, 1989

                                      -8-
<PAGE>

                                  EXHIBIT "A"

                                      to

                  First Amendment To Lease Agreement between
                      THE INDUSTRIAL DEVELOPMENT BOARD OF
                       THE CITY OF PHENIX CITY, ALABAMA
                                      and
                            MEAD COATED BOARD, INC.
                           dated as of March 1, 1989

                          DESCRIPTION OF PROJECT LAND
                          ---------------------------

The Project Land includes the following property:

              NEW RECLAIM PLATE FEED AND CONVEYOR AREA (C-28511),
              ---------------------------------------------------

                CHIPS CONVEYOR TO SCREEN HOUSE AREA (C-28513),
                ----------------------------------------------

                     AND CHIPS SCREEN HOUSE AREA (C-28515)
                     -------------------------------------

          All that portion of land and structures lying 13' on each side of the
following described centerline and also including any specifically noted areas
which extend beyond said centerline strip:

          Commence at a monument having grid coordinates N 792,350.00, E
234,500.00, of the West Zone of the State Georgia Coordinate System; and lying
in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama; thence N 63
degrees 51' 31" E, 790.90' to the point of beginning; thence N 90 degrees 00'
W, 82.00; thence S 0' 00" W, 8.75'; thence N 90 degrees 00' W, 232.22'; thence S
15 degrees 17' 15" E, 479.72' to a point on the northmost side of a rectangular
area (Chip Screen House) which parallels last said course and is 75.0' north to
south (7.00' of which is west of last said course) by 49.0' east to west; said
rectangular area being the point of ending; said land being 0.56+ acres;

                 CHIPS CONVEYOR TO PINE STORAGE AREA (C-28538)
                 ---------------------------------------------

          All that portion of land and structures lying 14' on each side of the
following described centerline:

                                      -9-
<PAGE>

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System; and
     lying in Section 28, plus 14 N, R 30 E, County of Russell, State of
     Alabama; thence N 45 degrees 24' 34" E, 692.79' to the point of beginning;
     thence S 36 degrees 51' 02" E, 454.94' to the point of ending; said land
     being 0.29 (plus or minus) acres;

            CHIPPER DISCHARGE CONVEYOR AREA (C-28536) AND CHIPS TO
            ------------------------------------------------------

                   HARDWOOD STORAGE CONVEYOR AREA (C-28537)
                   ----------------------------------------

          All that portion of land and structures lying 14' on each side of the
     following described centerline and also including any specifically noted
     areas which extend beyond said centerline strip:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System; and
     lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama;
     thence N 71 degrees 34' 06" E, 600.24' to the point of beginning; thence S
     71 degrees 04' 32" E, 640.91'; thence N 50 degrees 08' 32" E, 61.59' to the
     point of ending; said land being 0.45 (plus or minus) acres;

                   CHIP CONVEYOR TO DIGESTER AREA (C-28521),
                   -----------------------------------------

                  CHIP CONVEYOR TO SURGE BIN AREA (C-28519),
                  ------------------------------------------

                         AND CHIP SILO AREA (C-28520)
                         ----------------------------

          All that portion of land and structures lying 14' on each side of the
     following described centerline and also including any specifically noted
     areas which extend beyond said centerline strip:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System; and
     lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama;
     thence S 48 degrees 21' 59" W, 84.29' to the point of beginning; thence S
     56 degrees 07' 32" E, 319.22' to the center of a circular area (Chip Silo)
     with a radius of 15.00' and a central angle of 360 degrees 00' bounded by a
     rectangular structure 32' -6" (plus or minus) East-West and 32' -6" (plus
     or minus) North-South; thence N 82 degrees 51' 32" E, 355.48' to the point
     of ending; said land being 0.45 (plus or minus) acres;

                                     -10-

<PAGE>

                  NEW WASHER FACILITY AND BATCH DIGESTER AREA
                  -------------------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 792,350.00,
     E 234,500.00, of the West Zone of the State of Georgia Coordinate System;
     thence N 48 degrees 06' 06" W, 35.94' to the point of beginning (N
     792,374.0, E 234,473.25); thence S 0 degrees 00' W, 133.50'; thence N 90
     degrees 00' W, 103.39'; thence S 0 degrees 00' W, 103.50'; thence 90
     degrees 00' W, 48.00'; thence N 0 degrees 00' W, 55.75'; thence N, 90
     degrees 00' W, 80.00'; thence S 0 degrees 00' W, 42.75'; thence, N 90
     degrees 00' W, 63.00'; thence N 0 degrees 00' W, 110.00'; thence N 45
     degrees 00' E, 55.00'; thence N 0 degrees 00' W, 23.11'; thence N 90
     degrees 00' E, 23.00'; thence N 0 degrees 00' W, 23.25'; thence N 90
     degrees 00' E, 170.00'; thence N 0 degrees 00' W, 28.75'; thence N 90
     degrees 00' E, 62.50' to the point of beginning; said area being 1.01 (plus
     or minus) acres;

            MILL WATER COOLING TOWER AND NEW REACTOR CLARIFIER AREA
            -------------------------------------------------------

         All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

         Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System;
     thence S 48 degrees 46' 07" W, 591.71' to the point of beginning (N
     791,960.0 E 234,055.0); thence S 0 degrees 00' W, 170.00'; thence N 90
     degrees 00' W, 111.00; thence N 0 degrees 00' W, 170.00'; thence N 90
     degrees 00' E, 111.00' to the point of beginning; said land being 0.43
     (plus or minus) acres;

                       TURPENTINE RECOVERY FACILITY AREA
                       ---------------------------------

         All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

         Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System;
     thence S 63 degrees 26' 06" W, 11.18' to the point of beginning
     (N 792,345.0, E 234,490.0); thence N 0' 00" W, 30.00'; thence N 90 degrees
     00" E, 20.00'; thence S 0 degrees 00' W, 30.00'; thence N 90 degrees 00' W,
     20.00' to the point of beginning; said land being 0.01 (plus or minus)
     acres;

                                     -11-
<PAGE>

          LOG STORAGE AREA (C-28522), LOG FEED DECKS AREA (C-28523),
          ----------------------------------------------------------

           DRUM AREA (C-28525), VIBRATING CONVEYORS AREA (C-28532),
           --------------------------------------------------------

              CHIPPER POWER FEED ROLLS AREA (C-28528), CHIP BLDG.
              ---------------------------------------------------

          AREA (C-28535), AND BARK COLLECTING CONVEYOR AREA (C-28531)
          -----------------------------------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00 of the West Zone of the State of Georgia Coordinate System;
     thence N 80(degrees) 22' 54" E, 879.79' to the point of beginning; thence N
     0(degrees) 00' W, 326.00'; thence N 90(degrees) 00' E, 711.08'; thence S
     0(degrees) 00' W, 326.00'; thence N 90(degrees) 00' W, 328.00'; thence S
     0(degrees) 00' W, 188.00'; thence N 90(degrees) 00' W, 50.00'; thence N
     0(degrees) 00' W, 188.00'; thence N 90(degrees) 00' W, 333.08' to the point
     of beginning; said land being 5.54 (plus or minus) acres;

                        AREA "B" MAINTENANCE SHOP AREA
                        ------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System;
     thence S 11(degrees) 04' 57" W, 197.69' to the point of beginning (N
     792,156.0, E 234,462.0); thence S 0(degrees) 00" W, 82.00'; thence N
     90(degrees) 00" W, 52.00'; thence N 0(degrees) 00' W, 82.00'; thence N
     90(degrees) 00' E, 52.00 to the point of beginning; said land being 0.10
     (plus or minus) acres;

                       NEW LIM KILN/RECAUSTICIZING AREA
                       --------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 793,150.19, E
     233,250.02, of the West Zone of the State of Georgia Coordinate System;
     thence N 70(degrees) 51' 29" E, 267.79' to the point of beginning
     (793,238.0 E 233,503.0); thence N 90(degrees)

                                     -12-

<PAGE>

     00' E, 399.23'; thence S 0' 00' W, 50.00'; thence N 90 degrees 00' E,
     45.00'; thence S 0 degrees 00' W, 78.00'; thence N 90 degrees 00' W,
     444.23'; thence N 0 degrees 00' W, 128.00' to the point of beginning; said
     land being 1.25 (plus or minus) acres;

                          NO. 2 RECOVERY BOILER AREA
                          --------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 793,150.19, E
     233,250.02, of the West Zone of the State of Georgia Coordinate System;
     thence S 40 degrees 16' 34" E, 439.77' to the point of beginning (N
     792,814.67, E 233,534.32'); thence N 90 degrees 00' E, 36.30'; thence N 0
     degrees 00' W, 20.50'; thence N 90 degrees 00' E, 72.26'; thence N 0
     degrees 00' W, 14.83'; thence N 90 degrees 00' E, 110.50'; thence S 0
     degrees 00' W, 42.58'; thence N 90 degrees 00' E, 26.00'; thence S 0' 00'
     W, 81.00'; thence N 90 degrees 00' W, 51.00'; thence N 0 degrees 00" W,
     25.12'; thence N 90 degrees 00' W, 85.50'; thence N 00 degrees 00' W,
     8.63'; thence N 90 degrees 00' W, 72.26'; thence N 90 degrees 00' W,
     20.50'; thence N 0 degrees 00' W, 36.30'; thence N 0 degrees 00' W, 34.00'
     to the point of beginning; said land being 0.47 (plus or minus) acres;

                      NEW EVAPORATORS AND NEW TANKS AREA
                      ----------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 793,150.19, E
     233,250.02, of the West Zone of the State of Georgia Coordinate System;
     thence S 62 degrees 01' 33" E, 637.83' to the point of beginning (N
     792,851.0, E 233,813.33); thence N 90 degrees 00' E, 246.67'; thence along
     an arc South and East 53.41' having a radius of 34.00' with a central angle
     of 90 degrees 00'; thence S 0 degrees 00' W, 135.33'; thence along an arc
     South and West 53.41' having a radius of 34.00' with a central angle of 90
     degrees 00'; thence N 90 degrees 00' W, 34.00'; thence N 0 degrees 00' W,
     99.79'; thence N 90 degrees 00' W, 69.00'; thence N 59 degrees 47' 19" W,
     91.42'; thence N 90 degrees 00' W, 64.67'; thence N 0 degrees 00' W, 57.54'
     to the point of beginning; said land being 0.72 (plus or minus) acres;

                                     -13-

<PAGE>

     (collectively, the "Unimproved Land"); less, in each case, any structures
     constructed and leased pursuant to a Lease Agreement dated July 1, 1977,
     and recorded in Deed Book 550 at Pages 51-94 (as amended to date, the "1977
     Lease") under which Lessor leased to Georgia Kraft Company ("Georgia
     Kraft") a parcel of land in Russell County, Alabama as more particularly
     described in Exhibit A to the Lease (the "1977 Land"), together with
     certain items of equipment described in Exhibit B to the 1977 Lease
     (Georgia Kraft has assigned its interest in the 1977 Lease to Mead Coated
     Board, Inc.);

together with the following easements:

          (a)  An easement and right for pedestrian and vehicular traffic to use
     all present and future walks, railroads, roads, driveways and docks upon
     the Board Premises (the 1977 Land less and except the 1988 Land) in order
     to provide all necessary or convenient ingress or egress between the
     Unimproved Land and railroads, public roads and highways and the
     Chattahoochee River and to permit passage between the Unimproved Land and
     the Board Premises;

          (b)  An easement and right for the passage of pedestrians and vehicles
     and for the construction, erection, installation, operation, maintenance,
     renewal, replacement and use of material conveying systems, including
     without limitation pipelines, through any part of the Board Premises
     necessary or convenient in order to assure the passage of equipment, raw
     materials, items in the process of manufacture, and finished products from
     the Unimproved Land to the Board Premises, including without limitation
     such rights and easements as are necessary for the movement of personnel,
     vehicles and materials among and between the various parcels of land
     comprising the Board Premises in order to permit and facilitate the
     operation of the Project;

          (c)  An easement and right to erect, install, construct, maintain,
     renew, replace and use on, over and under any part of the Board Premises,
     such pipes, conduits, and wires as are necessary or convenient to insure
     access to and an adequate system for or supply of gas, oil, steam,
     compressed air, process and space heat, water, fire protection, sewage and
     industrial waste disposal, electricity, communications, instrumentation and
     control, and other similar facilities to the Unimproved Land and the
     Project including, without limitation, the right to make connections with
     machinery,

                                     -14-
<PAGE>

     equipment, pipes, conduits and wires, structures and other improvements and
     appurtenances thereto, on the Board Premises; and

          (d)  An easement and right to create and maintain upon the Board
     Premises encroachments of equipment, structures or other improvements which
     will be included on the Unimproved Land and within the Project as presently
     planned, and any similar replacements or substitutions of portions of the
     Project for as long as any such equipment, structures or other improvements
     remain standing, including without limitation the rights of lateral or
     party wall support, and to connect any such equipment, structure or other
     improvements to any structure or improvement on the Board Premises;

but subject to the following easements over the Unimproved Land in favor of the
Board Premises:

          (a)  An easement and right for pedestrian and vehicular traffic to use
     all present and future walks, railroads, roads, driveways and docks upon
     the Unimproved Land in order to provide all necessary or convenient ingress
     and egress among and between all portions of the Board Premises and between
     the Board Premises and the Unimproved Land, including without limitation
     portions on which additional improvements may be erected, and railroads,
     public works and highways and the Chattahoochee River and to permit passage
     among and between the various parcels of land comprising the Board
     Premises;

          (b)  An easement and right for the passage of pedestrians, vehicles,
     and for the construction, installation, operation, maintenance, renewal,
     replacement and use of material conveyance systems, including without
     limitation, pipelines, through any part of the Unimproved Land necessary or
     convenient in order to assure the passage of equipment, and finished
     products from one portion of the Board Premises to another or between the
     Board Premises and the Unimproved Land, including, without limitation such
     rights and easements as are necessary for the movement of personnel,
     vehicles and material among and between the various parcels of land
     comprising the Board Premises in order to permit and facilitate the
     operation of any facilities located on the Board Premises;

                                     -15-
<PAGE>

          (c)  An easement and right to erect, install, construct, maintain,
     renew, replace and use on, over and under any part of the Unimproved
     Land, such pipes, conduits, and wires and appurtenances as are necessary or
     convenient to assure access to and an adequate system for or supply of gas,
     oil, steam, compressed air, process and space heat, water, fire protection,
     sewage and industrial waste disposal, electricity, communications,
     instrumentation and control, and other similar facilities to the Board
     Premises, including without limitation, the right to make connections with
     machinery, equipment, pipes, conduits and wires, structures and other
     improvements and appurtenances thereto, on the Unimproved Land; and

          (d)  An easement and right to maintain any present equipment,
     structures or other improvements included within the facilities presently
     located on the Board Premises as encroachments upon the Unimproved Land as
     long as any such equipment, structures or other improvements remain
     standing, and to construct and maintain similar encroachments on the
     Unimproved Land in respect of any additional improvements constructed
     adjacent to the Unimproved Land, as long as any such additional
     improvements remain standing, including without limitation the rights of
     lateral or party wall support, and to connect such additional improvements
     to any structure or any improvements on the Unimproved Land.

                                     -16-
<PAGE>

                             CONSENT OF BONDHOLDER
                             ---------------------

          MEAD COATED BOARD, INC., as holder of all of the outstanding
Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1988A
of the Industrial Board of the City of Phenix City, Alabama (the "Board"),
hereby consents to the execution and delivery of the foregoing First Amendment
to Lease Agreement, dated as of March 1, 1989, between the Board and Mead Coated
Board, Inc., amending the Lease Agreement, dated as of December 1, 1988, between
the Board and Mead Coated Board, Inc. and directs AmSouth Bank N.A., as trustee,
to consent to the execution and delivery of the same.

          IN WITNESS WHEREOF, Mead Coated Board, Inc. has caused this Consent of
Bondholder to be executed in its name and behalf as of March 1, 1989.

                                           MEAD COATED BOARD, INC.

                                           By: /s/ W. D. Bloebaum, Jr.
                                              ------------------------------
                                              Title:

                                     -17-
<PAGE>

                              CONSENT OF TRUSTEE
                              ------------------

          AMSOUTH BANK N.A., as Trustee under the Trust Indenture, dated as of
December 1, 1988, from the Industrial Development Board of the City of Phenix
City, Alabama (the "Board"), hereby consents to the execution and delivery of
the foregoing First Amendment to Lease Agreement, dated as of March 1, 1989,
between the Board and Mead Coated Board, Inc., amending the Lease Agreement,
dated as of December 1, 1988, between the Board and Mead Coated Board, Inc.

          IN WITNESS WHEREOF, AmSouth Bank N.A. has caused this Consent of
Trustee to be executed in its name and behalf as of March 1, 1989.

                                           AMSOUTH BANK N.A., as Trustee

                                           By: /s/ T. Franklin Caley
                                              ------------------------------
                                              Title: Vice President and
                                                     Corporate Trust Officer

                                     -18-
<PAGE>

                               SECOND AMENDMENT
                               ----------------

                                      TO
                                      --
                                LEASE AGREEMENT
                                ---------------

          THIS SECOND AMENDMENT TO LEASE AGREEMENT (the "Amendment") is made and
entered into as of April 1, 1989, by and between THE INDUSTRIAL DEVELOPMENT
BOARD OF THE CITY OF PHENIX CITY, ALABAMA (the "Board"), a public body corporate
and politic duly organized and existing under the Constitution and laws of the
State of Alabama, and MEAD COATED BOARD, INC., a Delaware corporation (the
"Company").

                                R E C I T A L S
                                ---------------

          The Board has previously issued and sold $85,000,000 in aggregate
principal amount of The Industrial Development Board of the City of Phenix City,
Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series
1988A (the "Series 1988A Bonds"), and $43,000,000 in aggregate principal amount
of The Industrial Development Board of the City of Phenix City, Alabama
Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989A
(the "Series 1989A Bonds") pursuant to a Trust Indenture, dated as of December
1, 1988 (the "Original Indenture"), as supplemented by a First Supplemental
Trust Indenture dated as of March 1, 1989 (collectively, the "Indenture") from
the Board to AmSouth Bank N.A., as Trustee (the "Trustee").

          The Board has used the proceeds of the sale of the Series 1988A Bonds
and the Series 1989A Bonds for the payment of outstanding industrial development
temporary borrowing notes (the "Notes") issued by the Board for the purpose of
funding the acquisition, construction and installation of a coated natural kraft
mill and related facilities (the "Project") in connection with certain
industrial facilities located near Phenix City, Alabama. The Project is owned by
the Board and leased to the Company pursuant to a Lease Agreement dated as of
December 1, 1988, as amended by the First Amendment To Lease Agreement dated as
of March 1, 1989 (collectively, the "Agreement"). The Agreement obligates the
Company to make rental payments in such amounts and at such times as will
provide for the payment of the principal and interest on the Series 1988A Bonds
and the Series 1989A Bonds as the same becomes due and payable.
<PAGE>

          Under Article IV of the Original Indenture, the Board is permitted to
issue Additional Bonds (as defined in the Original Indenture) in order to pay
additional Notes issued by the Board in connection with the Project. In that
connection, the Board is issuing $45,000,000 in aggregate principal amount of
Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989B
(the "Series 1989B Bonds"), pursuant to the Indenture as supplemented by a
Second Supplemental Trust Indenture dated as of April 1, 1989 (the "Second
Supplemental Indenture") from the Board to the Trustee. The Indenture as
supplemented by the Second Supplemental Indenture is hereinafter referred to as
the "Indenture".

          NOW, THEREFORE, as contemplated by Section 4.5 of the Agreement and in
accordance with Section 1501 of the Original Indenture, the parties hereto
desire to amend the Agreement as follows:

                                   ARTICLE I

                     PROVISIONS FOR AMENDING THE AGREEMENT
                     -------------------------------------

          Section 1.1 Amendment of Section 5.3 of the Agreement. The term
          ----------- -----------------------------------------
"Bonds" as used in Section 5.3 of the Agreement shall include the Series 1989B
Bonds.

          Section 1.2 Terms of Agreement Applicable to Series 1989B Bonds. All
          ----------- ---------------------------------------------------
terms, conditions, representations and covenants set forth in the Agreement
applicable to the Series 1988A Bonds and not specifically otherwise provided for
in the Indenture, any supplements thereto or the Agreement, shall apply with
full force and effect to the Series 1989B Bonds. Without limiting the foregoing,
all references in the Agreement to the "Bonds" shall be deemed to mean the
Series 1988A Bonds, the Series 1989A Bonds and the Series 1989B Bonds, including
without limitation the provisions of Section 5.3 of the Agreement relating to
the payment of rents.

          Section 1.3 Representations and Warranties by the Board. The Board
          ----------- -------------------------------------------
makes the following representations and warranties as the basis for the
undertakings on its part herein contained:

          (a) Organization and Authority. The Board is a public corporation duly
              --------------------------
organized and validly existing under the provisions of the Act by authority of a
resolution adopted by the Board of Commissioners of the City on June 14, 1960
and a Certificate of Incorporation duly filed for record on October 17, 1960, in
the office of the Judge of Probate of Russell County, Alabama,

                                      -2-
<PAGE>

     which Certificate of Incorporation has not been amended or been revoked and
     is of full force and effect. The Board has all requisite power and
     authority under the Act (1) to issue the Series 1989B Bonds, (2) to use the
     proceeds thereof to refund the Notes issued to pay the cost to acquire,
     construct and install the Project, (3) to own, lease, encumber and dispose
     of the Project, and (4) to enter into, and perform its obligations under,
     the Indenture, the Agreement and this Amendment. This Amendment and the
     Second Supplemental Indenture have been duly authorized, executed and
     delivered by the Board and are legal, valid and binding agreements
     enforceable against the Board in accordance with their respective terms.

          (b)  Pending Litigation. There are no actions, suits, proceedings,
               ------------------
     inquiries or investigations pending, or to the knowledge of the Board
     threatened, against or affecting the Board in any court or before any
     governmental authority or arbitration board or tribunal, which adversely
     affect the validity or enforceability of the Series 1989B Bonds, the
     Indenture, the Agreement, this Amendment, or any agreement or instrument to
     which the Board is a party and which is used or contemplated for use in the
     consummation of the transactions contemplated hereby or thereby.

          (c)  Issue, Sale and Other Transactions Are Legal and Authorized. The
               -----------------------------------------------------------
     issue and sale of the Series 1989B Bonds and the execution and delivery by
     the Board of the Second Supplemental Indenture and this Amendment and the
     compliance by the Board with all of the provisions of each thereof and of
     the Series 1989B Bonds (i) are within the purposes, powers and authority of
     the Board, (ii) to the best of the knowledge of the Board, have been done
     in full compliance with the provisions of the Act, are legal and will not
     conflict with or constitute on the part of the Board a violation of or a
     breach of or default under, or result in the creation of any lien or
     encumbrance (other than Permitted Encumbrances under the Agreement) upon
     any property of the Board under the provisions of, its certificate of
     incorporation or Bylaws, or any indenture, mortgage, deed of trust, note
     agreement or other agreement or instrument to which the Board is a party or
     by which the Board is bound, or any license, judgment, decree, law,
     statute, order, rule or regulation of any court or governmental agency or
     body having jurisdiction over the Board or any of its activities or
     properties, and (iii) have been duly authorized by all necessary corporate
     action on the part of the Board.

                                      -3-
<PAGE>

          (d)  Governmental Consents. Neither the nature of the Board nor any
               ---------------------
     of its activities or properties, nor any relationship between the Board and
     any other person, nor any circumstance in connection with the offer, issue,
     sale or delivery of any of the Series 1989B Bonds is such as to require the
     consent, approval or authorization of, or the filing, registration or
     qualification with, any governmental authority on the part of the Board in
     connection with the execution, delivery and performance of the Second
     Supplemental Indenture and this Amendment, or the offer, issue, sale or
     delivery of the Series 1989B Bonds, other than (i) the filing with the
     Alabama Securities Commission of the notification of the Board's intention
     to issue the Series 1989B Bonds required by Act No. 586 enacted at the 1978
     Regular Session of the Legislature of the State and the issuance by the
     Director of the Alabama Securities Commission of such Certificate of
     Notification as may be required by said Act, and (ii) the due filing and
     recording of this Amendment, the Second Supplemental Indenture and the
     financing statements covering the security interests created hereunder and
     under the Indenture. The Board has filed the notification referred to in
     (i) of the preceding sentence and the Director of the Alabama Securities
     Commission has issued a Certificate of Notification applicable to the
     Series 1989B Bonds, which Certificate of notification has not been revoked
     or rescinded and is in full force and effect.

          (e)  No Defaults. The Board is not in default under the Act or under
               -----------
     its Certificate of Incorporation or Bylaws or any other agreement or
     instrument to which it is a party or by which is bound.

          Section 1.4 Representations and Warranties by the Company. The Company
          ----------- ---------------------------------------------
makes the following representations and warranties as the basis for the
undertakings on its part herein contained:

          (a)  The Company (i) is a corporation duly organized, validly existing
     and in good standing under the laws of the State of Delaware, (ii) has
     all requisite corporate power and authority to carry on its business as now
     being conducted and as presently proposed to be conducted, and (ii) has
     duly qualified and is authorized to do business and is in good standing as
     a foreign corporation in the State.

                                      -4-
<PAGE>

          (b) The Company has the corporate power and has been duly authorized
     to enter into this Amendment and to perform all of its obligations
     hereunder.

          (c) The willingness of the Board to issue the Series 1989B Bonds for
     purposes of financing costs of acquiring, constructing, and installing the
     Project, and to lease the Project to the Company, has induced the Company
     to locate the Project within the State of Alabama and, more particularly,
     within 25 miles of the City.

          (d) The Company is not subject to any contractual or other limitation
     or provision of any nature whatsoever which in any material way limits,
     restricts or prevents the Company from entering into this Amendment, or
     performing any of its obligations hereunder; and the execution and delivery
     of this Amendment, the consummation of the transactions contemplated
     hereby, and the fulfillment of or compliance with the terms and conditions
     of this Amendment will not conflict with or result in a breach of the
     terms, conditions or provisions of any restriction, agreement or instrument
     to which the Company is a party or by which it is bound, or constitute a
     default under any of the foregoing.

          (e) No event has occurred and no condition exists that would
     constitute an "Event of Default" under the Agreement or this Amendment
     which, with the lapse of time or with the giving of notice or both, would
     become an "Event of Default" under the Agreement or this Amendment.

          (f) To the best of its knowledge and belief, the Company is not in
     violation of any laws, ordinances, governmental rules or regulations to
     which it is subject and has not failed to obtain any licenses, permits,
     franchises or other governmental authorizations necessary to the ownership
     of its properties or to the conduct of its business, which violation or
     failure to obtain would reasonably be expected to materially and adversely
     affect the ability of the Company to perform its obligations under this
     Amendment.

                                  ARTICLE II

                                 MISCELLANEOUS
                                 -------------

          Section 2.1 Agreement and Amendment as One Document.
          ----------- ---------------------------------------
As amended by this Amendment, the Agreement is in all respects ratified and
confirmed and the Agreement and this Amendment shall be read, taken and
construed as one and the same instrument.

                                      -5-
<PAGE>

          Section 2.2  References.  All references herein or in the Agreement to
          -----------  ----------
any Article, Section or provision of the Agreement shall refer to any such
Article, Section or provision as hereby amended.

          Section 2.3  Counterparts.  This Amendment may be simultaneously
          -----------  ------------
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.

          Section 2.4  Captions.  The captions or headings in this Amendment are
          -----------  --------
for convenience only and in no way define, limit or describe the scope or intent
of any provision of this Amendment.

          Section 2.5  Applicable Law.  This Amendment shall be construed in
          -----------  --------------
accordance with the laws of the State of Alabama.

          IN WITNESS WHEREOF, the Board and the Company have caused this
Amendment to be executed in their respective corporate names as of the date
first written above.

                                        THE INDUSTRIAL DEVELOPMENT BOARD OF
                                        THE CITY OF PHENIX CITY, ALABAMA

                                        By:   /s/  Kenneth A. Roberts
                                            ----------------------------------
                                            Chairman

                                        MEAD COATED BOARD, INC.

                                        By:   /s/  W. D. Bloebaum, Jr.
                                            ----------------------------------
                                            Title:  Treasurer

                                      -6-

<PAGE>

                            ACKNOWLEDGMENT OF BOARD

STATE OF ALABAMA

COUNTY OF RUSSELL

          I, Sydney S. Smith, a Notary Public in and for said County in said
State, hereby certify that Kenneth A. Roberts, whose name as Chairman of the
Board of Directors of THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX
CITY, ALABAMA, a public corporation and instrumentality under the laws of the
State of Alabama, is signed to the foregoing instrument and who is known to me,
acknowledged before me on this day that, being informed of the contents of the
said instrument, he, as such officer and with full authority, executed the same
voluntarily for and as the act of said public corporation.

          GIVEN under my hand and seal of office, this  5th  day of April, 1989.
                                                       -----

                                             /s/  Sydney S. Smith
                                        -----------------------------------
                                                   Notary Public

(SEAL)
                                        My commission expires:    2/25/92
                                                               ------------

                                      -7-

<PAGE>

                           ACKNOWLEDGMENT OF COMPANY

STATE OF OHIO

COUNTY OF MONTGOMERY

          I, Jeffrey L. Hayman, Notary Public in and for said County in said
State, hereby certify that William D. Bloebaum, Jr., whose name as Treasurer of
MEAD COATED BOARD, INC., a corporation organized and existing under the laws of
the State of Delaware, is signed to the foregoing instrument and who is known to
me, acknowledged before me on this day that, being informed of the contents of
the said instrument, he, as such officer and with full authority, executed the
same voluntarily for and as the act of said corporation.

          GIVEN under my hand and seal of office, this ______ day of April ___,
1989.

                                                  /s/ Jeffrey L. Hayman
                                                  ---------------------
                                                      Notary Public

                                                  My commission expires:_____
(SEAL)

                                      -8-

<PAGE>

                                  EXHIBIT "A"

                                      to

                  Second Amendment To Lease Agreement between
                      THE INDUSTRIAL DEVELOPMENT BOARD OF
                       THE CITY OF PHENIX CITY, ALABAMA
                                      and
                            MEAD COATED BOARD, INC.
                           dated as of April 1, 1989

                          DESCRIPTION OF PROJECT LAND
                          ---------------------------

The Project Land includes the following property:

              NEW RECLAIM PLATE FEED AND CONVEYOR AREA (C-28511),
              ---------------------------------------------------

                 CHIPS CONVEYOR TO SCREEN HOUSE AREA (C-28513)
                 ---------------------------------------------,

                     AND CHIPS SCREEN HOUSE AREA (C-28515)
                     -------------------------------------

          All that portion of land and structures lying 13' on each side of the
     following described centerline and also including any specifically noted
     areas which extend beyond said centerline strip:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State Georgia Coordinate System; and
     lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama;
     thence N 63 degrees 51' 31" E, 790.90' to the point of beginning; thence N
     90 degrees 00' W, 82.00; thence S 0' 00" W, 8.75'; thence N 90 degrees 00'
     W, 232.22'; thence S 15 degrees 17' 15" E, 479.72' to a point on the
     northmost side of a rectangular area (Chip Screen House) which parallels
     last said course and is 75.0' north to south (7.00' of which is west of
     last said course) by 49.0' east to west; said rectangular area being the
     point of ending; said land being 0.56+ acres;

                 CHIPS CONVEYOR TO PINE STORAGE AREA (C-28538)
                 ---------------------------------------------

          All that portion of land and structures lying 14' on each side of the
     following described centerline:

                                      -9-
<PAGE>

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System; and
     lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama;
     thence N 45 degrees 24' 34" E, 692.79' to the point of beginning; thence S
     36(degrees) 51' 02" E, 454.94' to the point of ending; said land being
     0.29(plus or minus) acres;

            CHIPPER DISCHARGE CONVEYOR AREA (C-28536) AND CHIPS TO
            ------------------------------------------------------

                   HARDWOOD STORAGE CONVEYOR AREA (C-28537)
                   ----------------------------------------

          All that portion of land and structures lying 14' on each side of the
     following described centerline and also including any specifically noted
     areas which extend beyond said centerline strip:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System; and
     lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama;
     thence N 71(degrees) 34' 06" E, 600.24' to the point of beginning; thence S
     71(degrees) 04' 32" E, 640.91' thence N 50(degrees) 08' 32" E, 61.59' to
     the point of ending; said land being 0.45 (plus or minus) acres;

                   CHIP CONVEYOR TO DIGESTER AREA (C-28521),
                   -----------------------------------------

                  CHIP CONVEYOR TO SURGE BIN AREA (C-28519),
                  -----------------------------------------

                        AND CHIP SILO AREA (C-28520)
                        ----------------------------

          All that portion of land and structures lying 14' on each side of the
     following described centerline and also including any specifically noted
     areas which extend beyond said centerline strip:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System; and
     lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama;
     thence S 48(degrees) 21' 59" W, 84.29' to the point of beginning; thence S
     56(degrees) 07' 32" E, 319.22' to the center of a circular area (Chip Silo)
     with a radius of 15.00' and a central angle of 360(degrees) 00' bounded by
     a rectangular structure 32' -6" (plus or minus) East-West and 32' -6" (plus
     or minus) North-South; thence N 82(degrees) 51' 32" E, 355.48' to the point
     of ending; said land being 0.45 (plus or minus) acres;

                                      -10-
<PAGE>

                  NEW WASHER FACILITY AND BATCH DIGESTER AREA
                  -------------------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System;
     thence N 48(degrees) 06' 06" W, 35.94' to the point of beginning (N
     792,374.0, E 234,473.25); thence S 0(degrees) 00' W, 133.50'; thence N
     90(degrees) 00' W, 103.39'; thence S 0(degrees) 00' W, 103.50'; thence
     90(degrees) 00' W, 48.00'; thence N 0(degrees) 00' W, 55.75'; thence N
     90(degrees) 00' W, 80.00'; thence S 0(degrees) 00' W, 42.75'; thence N
     90(degrees) 00' W. 63.00'; thence N 0(degrees) 00' W, 110.00'; thence N
     45(degrees) 00' E, 55.00'; thence N 0(degrees) 00' W, 23.11'; thence N
     90(degrees) 00' E, 23.00'; thence N 0(degrees) 00' W, 23.25'; thence N
     90(degrees) 00' E, 170.00'; thence N 0(degrees) 00' W, 28.75'; thence N
     90(degrees) 00' E, 62.50' to the point of beginning; said area being 1.01
     (plus or minus) acres;

            MILL WATER COOLING TOWER AND NEW REACTOR CLARIFIER AREA
            -------------------------------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System;
     thence S 48(degrees) 46' 07" W, 591.71' to the point of beginning (N
     791,960.0 E 234,055.0); thence S 0(degrees) 00' W, 170.00'; thence N
     90(degrees) 00' W, 111.00; thence N 0(degrees) 00' W, 170.00'; thence N
     90(degrees) 00' E, 111.00' to the point of beginning; said land being 0.43
     (plus or minus) acres;

                       TURPENTINE RECOVERY FACILITY AREA
                       ---------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System;
     thence S 63(degrees) 26' 06" W, 11.18' to the point of beginning (N
     792,345.0, E 234,490.0); thence N 0' 00" W, 30.00'; thence N 90(degrees)
     00" E, 20.00'; thence S 0(degrees) 00' W, 30.00'; thence N 90(degrees) 00'
     W, 20.00' to the point of beginning; said land being 0.01 (plus or minus)
     acres;

                                     -11-

<PAGE>

           LOG STORAGE AREA (C-28522), LOG FEED DECKS AREA (C-28523),
           ----------------------------------------------------------

            DRUM AREA (C-28525), VIBRATING CONVEYORS AREA (C-28532),
            --------------------------------------------------------

              CHIPPER POWER FEED ROLLS AREA (C-28528), CHIP BLDG.
              ---------------------------------------------------

          AREA (C-28535), AND BARK COLLECTING CONVEYOR AREA (C-28531)
          -----------------------------------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System;
     thence N 80 degrees 22' 54" E, 879.79' to the point of beginning; thence N
     0 degrees 00' W, 326.00'; thence N 90 degrees 00' E, 711.08'; thence S 0
     degrees 00' W, 326.00'; thence N 90 degrees 00' W, 328.00'; thence S 0
     degrees 00' W, 188.00'; thence N 90 degrees 00' W, 50.00'; thence N 0
     degrees 00' W, 188.00'; thence N 90 degrees 00' W, 333.08' to the point of
     beginning; said land being 5.54 (plus or minus) acres;

                        AREA "B" MAINTENANCE SHOP AREA
                        ------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System;
     thence S 11 degrees 04' 57" W, 197.69' to the point of beginning (N
     792,156.0, E 234,462.0); thence S 0 degrees 00" W, 82.00'; thence N 90
     degrees 00" W, 52.00'; thence N 0 degrees 00' W, 82.00'; thence N 90
     degrees 00' E, 52.00 to the point of beginning; said land being 0.10 (plus
     or minus) acres;

                       NEW LIM KILN/RECAUSTICIZING AREA
                       --------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 793,150.19, E
     233,250.02, of the West Zone of the State of Georgia Coordinate System;
     thence N 70 degrees 51' 29" E, 267.79' to the point of beginning (793,238.0
     E 233,503.0); thence N 90 degrees

                                     -12-
<PAGE>

     00' E, 399.23'; thence S 0(degrees) 00' W, 50.00'; thence N 90(degrees) 00'
     E, 45.00'; thence S 0(degrees) 00' W, 78.00'; thence N 90(degrees) 00' W,
     444.23'; thence N 0(degrees) 00' W, 128.00' to the point of beginning; said
     land being 1.25 (plus or minus) acres;

                          No. 2 RECOVERY BOILER AREA
                          --------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 793,150.19, E
     233,250.02, of the West Zone of the State of Georgia Coordinate System;
     thence S 40(degrees) 16' 34" E, 439.77' to the point of beginning (N
     792,814.67, E 233,534.32'); thence N 90(degrees) 00' E, 36.30'; thence N
     0(degrees) 00' W, 20.50'; thence N 90(degrees) 00' E, 72.26'; thence N
     0(degrees) 00' W, 14.83'; thence N 90(degrees) 00' E, 110.50'; thence S
     0(degrees) 00' W, 42.58'; thence N 90(degrees) 00' E, 26.00'; thence S
     0(degrees) 00' W, 81.00'; thence N 90(degrees) 00' W, 51.00'; thence N
     0(degrees) 00" W, 25.12'; thence N 90(degrees) 00' W, 85.50'; thence N
     00(degrees) 00' W, 8.63'; thence N 90(degrees) 00' W, 72.26'; thence N
     90(degrees) 00' W, 20.50'; thence N 0(degrees) 00' W, 36.30'; thence N
     0(degrees) 00' W, 34.00' to the point of beginning; said land being 0.47
     (plus or minus) acres;

                      NEW EVAPORATORS AND NEW TANKS AREA
                      ----------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 793,150.19, E
     233,250.02, of the West Zone of the State of Georgia Coordinate System;
     thence S 62(degrees) 01' 33" E, 637.83' to the point of beginning (N
     792,851.0, E 233,813.33); thence N 90(degrees) 00' E, 246.67'; thence along
     an arc South and East 53.41' having a radius of 34.00' with a central angle
     of 90(degrees) 00'; thence S 0(degrees) 00' W, 135.33'; thence along an arc
     South and West 53.41' having a radius of 34.00' with a central angle of
     90(degrees) 00'; thence N 90(degrees) 00' W, 34.00'; thence N 0(degrees)
     00' W, 99.79'; thence N 90(degrees) 00' W, 69.00'; thence N 59(degrees) 47'
     19" W, 91.42'; thence N 90(degrees) 00' W, 64.67'; thence N 0(degrees) 00'
     W, 57.54' to the point of beginning; said land being 0.72 (plus or minus)
     acres;

                                      -13-
<PAGE>

     (collectively, the "Unimproved Land"); less, in each case, any structures
     constructed and leased pursuant to a Lease Agreement dated July 1, 1977,
     and recorded in Deed Book 550 at Pages 51-94 (as amended to date, the "1977
     Lease") under which Lessor leased to Georgia Kraft Company ("Georgia
     Kraft") a parcel of land in Russell County, Alabama as more particularly
     described in Exhibit A to the Lease (the "1977 Land"), together with
     certain items of equipment described in Exhibit B to the 1977 Lease
     (Georgia Kraft has assigned its interest in the 1977 Lease to Mead Coated
     Board, Inc.);

together with the following easements:

          (a)  An easement and right for pedestrian and vehicular traffic to use
     all present and future walks, railroads, roads, driveways and docks upon
     the Board Premises (the 1977 Land less and except the 1988 Land) in order
     to provide all necessary or convenient ingress or egress between the
     Unimproved Land and railroads, public roads and highways and the
     Chattahoochee River and to permit passage between the Unimproved Land and
     the Board Premises;

          (b)  An easement and right for the passage of pedestrians and vehicles
     and for the construction, erection, installation, operation, maintenance,
     renewal, replacement and use of material conveying systems, including
     without limitation pipelines, through any part of the Board Premises
     necessary or convenient in order to assure the passage of equipment, raw
     materials, items in the process of manufacture, and finished products from
     the Unimproved Land to the Board Premises, including without limitation
     such rights and easements as are necessary for the movement of personnel,
     vehicles and materials among and between the various parcels of land
     comprising the Board Premises in order to permit and facilitate the
     operation of the Project;

          (c)  An easement and right to erect, install, construct, maintain,
     renew, replace and use on, over and under any part of the Board Premises,
     such pipes, conduits, and wires as are necessary or convenient to insure
     access to and an adequate system for or supply of gas, oil, steam,
     compressed air, process and space heat, water, fire protection, sewage and
     industrial waste disposal, electricity, communications, instrumentation and
     control, and other similar facilities to the Unimproved Land and the
     Project including, without limitation, the right to make connections with
     machinery,

                                      -14-
<PAGE>

     equipment, pipes, conduits and wires, structures and other improvements and
     appurtenances thereto, on the Board Premises; and

          (d)  An easement and right to create and maintain upon the Board
     Premises encroachments of equipment, structures or other improvements which
     will be included on the Unimproved Land and within the Project as presently
     planned, and any similar replacements or substitutions of portions of the
     Project for as long as any such equipment, structures or other improvements
     remain standing, including without limitation the rights of lateral or
     party wall support, and to connect any such equipment, structure or other
     improvements to any structure or improvement on the Board Premises;

but subject to the following easements over the Unimproved Land in favor of the
Board Premises:

          (a)  An easement and right for pedestrian and vehicular traffic to use
     all present and future walks, railroads, roads, driveways and docks upon
     the Unimproved Land in order to provide all necessary or convenient ingress
     and egress among and between all portions of the Board Premises and between
     the Board Premises and the Unimproved Land, including without limitation
     portions on which additional improvements may be erected, and railroads,
     public works and highways and the Chattahoochee River and to permit passage
     among and between the various parcels of land comprising the Board
     Premises;

          (b)  An easement and right for the passage of pedestrians, vehicles,
     and for the construction, installation, operation, maintenance, renewal,
     replacement and use of material conveyance systems, including without
     limitation, pipelines, through any part of the Unimproved Land necessary or
     convenient in order to assure the passage of equipment, and finished
     products from one portion of the Board Premises to another or between the
     Board Premises and the Unimproved Land, including, without limitation such
     rights and easements as are necessary for the movement of personnel,
     vehicles and material among and between the various parcels of land
     comprising the Board Premises in order to permit and faci1itate the
     operation of any facilities located on the Board Premises;

                                      -15-
<PAGE>

          (c)  An easement and right to erect, install, construct, maintain,
     renew, replace and use on, over and under any part of the Unimproved Land,
     such pipes, conduits, and wires and appurtenances as are necessary or
     convenient to assure access to and an adequate system for or supply of gas,
     oil, steam, compressed air, process and space heat, water, fire protection,
     sewage and industrial waste disposal, electricity, communications,
     instrumentation and control, and other similar facilities to the Board
     Premises, including without limitation, the right to make connections with
     machinery, equipment, pipes, conduits and wires, structures and other
     improvements and appurtenances thereto, on the Unimproved Land; and

          (d)  An easement and right to maintain any present equipment,
     structures or other improvements included within the facilities presently
     located on the Board Premises as encroachments upon the Unimproved Land as
     long as any such equipment, structures or other improvements remain
     standing, and to construct and maintain similar encroachments on the
     Unimproved Land in respect of any additional improvements constructed
     adjacent to the Unimproved Land, as long as any such additional
     improvements remain standing, including without limitation the rights of
     lateral or party wall support, and to connect such additional improvements
     to any structure or any improvements on the Unimproved Land.

                                     -16-
<PAGE>

                             CONSENT OF BONDHOLDER
                             ---------------------

          MEAD COATED BOARD, INC., as holder of all of the outstanding
Industrial Development Revenue Bonds (Mead Coated Board Project) Series 1988A of
the Industrial Board of the City of Phenix City, Alabama (the "Board"), hereby
consents to the execution and delivery of the foregoing Second Amendment To
Lease Agreement dated as of April 1, 1989, between the Board and Mead Coated
Board, Inc., amending the Lease Agreement, dated as of December 1, 1988, as
amended by a First Amendment To Lease Agreement dated as of March 1, 1989,
between the Board and Mead Coated Board, Inc. and directs AmSouth Bank N.A., as
Trustee, to consent to the execution and delivery of the same.

          IN WITNESS WHEREOF, Mead Coated Board, Inc. has caused this Consent of
Bondholder to be executed in its name and behalf as of April 1, 1989.

                                       MEAD COATED BOARD, INC.

                                       By: W.D. Bloebaum, Jr.
                                           ---------------------------------
                                           Title:

                                      -17-
<PAGE>

                              CONSENT OF TRUSTEE
                              ------------------

          AMSOUTH BANK N.A., as Trustee under the Trust Indenture dated as of
December 1, 1988, as supplemented by a First Supplemental Trust Indenture dated
as of March 1, 1989, from the Industrial Development Board of the City of Phenix
City, Alabama (the "Board"), hereby consents to the execution and delivery of
the foregoing Second Amendment To Lease Agreement, dated as of March 1, 1989,
between the Board and Mead Coated Board, Inc., amending the Lease Agreement,
dated as of December 1, 1988, as amended by a First Amendment To Lease Agreement
dated as of March 1, 1989, between the Board and Mead Coated Board, Inc.

          IN WITNESS WHEREOF, AmSouth Bank N.A. has caused this Consent of
Trustee to be executed in its name and behalf as of April 1, 1989.

                                       AMSOUTH BANK N.A., as Trustee

                                       By: /s/ David E. White
                                           --------------------------------
                                          Title:

                                      -18-
<PAGE>

                                THIRD AMENDMENT
                                ---------------

                                      TO
                                      --

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

          THIS THIRD AMENDMENT TO LEASE AGREEMENT (the "Amendment") is made and
entered into as of June 1, 1989, by and between THE INDUSTRIAL DEVELOPMENT BOARD
OF THE CITY OF PHENIX CITY, ALABAMA (the "Board"), a public body corporate and
politic duly organized and existing under the Constitution and laws of the State
of Alabama, and MEAD COATED BOARD, INC., a Delaware corporation (the "Company").

                                R E C I T A L S
                                ---------------

          The Board has previously issued and sold $85,000,000 in aggregate
principal amount of The Industrial Development Board of the City of Phenix City,
Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series
1988A (the "Series 1988A Bonds"); $43,000,000 in aggregate principal amount of
The Industrial Development Board of the City of Phenix City, Alabama Industrial
Development Revenue Bonds (Mead Coated Board Project), Series 1989A (the "Series
1989A Bonds"); and $45,000,000 in aggregate principal amount of The Industrial
Development Board of the City of Phenix City, Alabama Industrial Development
Revenue Bonds (Mead Coated Board Project), Series 1989B (the "Series 1989B
Bonds") pursuant to a Trust Indenture, dated as of December 1, 1988 (the
"Original Indenture"), as supplemented by a First Supplemental Trust Indenture
dated as of March 1, 1989 and a Second Supplemental Trust Indenture dated as of
April 1, 1989 (collectively, the "Indenture") from the Board to AmSouth Bank
N.A., as Trustee (the "Trustee").

          The Board has used the proceeds of the sale of the Series 1988A Bonds,
the Series 1989A Bonds and the Series 1989B Bonds for the payment of outstanding
industrial development temporary borrowing notes (the "Notes") issued by the
Board for the purpose of funding the acquisition, construction and installation
of a coated natural kraft mill and related facilities (the "Project") in
connection with certain industrial facilities located near Phenix City,
Alabama. The Project is owned by the Board and leased to the Company pursuant to
a Lease Agreement dated as of December 1, 1988, as amended by the First
Amendment To Lease Agreement dated as of March 1, 1989 and the Second Amendment
To Lease Agreement dated as of April 1, 1989 (collectively, the "Agreement").
The Agreement obligates the
<PAGE>

Company to make rental payments in such amounts and at such times as will
provide for the payment of the principal and interest on the Series 1988A Bonds,
the Series 1989A Bonds and the Series 1989B Bonds as the same becomes due and
payable.

          Under Article IV of the Original Indenture, the Board is permitted to
issue Additional Bonds (as defined in the Original Indenture) in order to pay
additional Notes issued by the Board in connection with the Project. In that
connection, the Board is issuing $37,000,000 in aggregate principal amount of
Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989C
(the "Series 1989C Bonds"), pursuant to the Indenture as supplemented by a Third
Supplemental Trust Indenture dated as of June 1, 1989 (the "Third Supplemental
Indenture") from the Board to the Trustee. The Indenture as supplemented by the
Third Supplemental Indenture is hereinafter referred to as the "Indenture".

          NOW, THEREFORE, as contemplated by Section 4.5 of the Agreement and in
accordance with Section 1501 of the Original Indenture, the parties hereto
desire to amend the Agreement as follows:

                                   ARTICLE I

                     PROVISIONS FOR AMENDING THE AGREEMENT
                     -------------------------------------

          Section 1.1  Amendment of Section 5.3 of the Agreement.  The term
          -----------  -----------------------------------------
"Bonds" as used in Section 5.3 of the Agreement shall include the Series 1989C
Bonds.

          Section 1.2  Terms of Agreement Applicable to Series 1989C Bonds.  All
          -----------  ---------------------------------------------------
terms, conditions, representations and covenants set forth in the Agreement
applicable to the Series 1988A Bonds and not specifically otherwise provided for
in the Indenture, any supplements thereto or the Agreement, shall apply with
full force and effect to the Series 1989C Bonds. Without limiting the foregoing,
all references in the Agreement to the "Bonds" shall be deemed to mean the
Series 1988A Bonds, the Series 1989A Bonds, the Series 1989B Bonds and the
Series 1989C Bonds including without limitation the provisions of Section 5.3 of
the Agreement relating to the payment of rents.

          Section 1.3  Representations and Warranties by the Board. The Board
          -----------  -------------------------------------------
makes the following representations and warranties as the basis for the
undertakings on its part herein contained:

          (a) Organization and Authority.  The Board is a public corporation
              --------------------------
     duly organized and validly existing under the provisions of the Act by
     authority of a

                                      -2-
<PAGE>

     resolution adopted by the Board of Commissioners of the City on June 14,
     1960 and a Certificate of Incorporation duly filed for record on October
     17, 1960, in the office of the Judge of Probate of Russell County, Alabama,
     which Certificate of Incorporation has not been amended or been revoked and
     is of full force and effect. The Board has all requisite power and
     authority under the Act (1) to issue the Series 1989C Bonds, (2) to use the
     proceeds thereof to refund the Notes issued to pay the cost to acquire,
     construct and install the Project, (3) to own, lease, encumber and dispose
     of the Project, and (4) to enter into, and perform its obligations under,
     the Indenture, the Agreement and this Amendment. This Amendment and the
     Third Supplemental Indenture have been duly authorized, executed and
     delivered by the Board and are legal, valid and binding agreements
     enforceable against the Board in accordance with their respective terms.

          (b) Pending Litigation.  There are no actions, suits, proceedings,
              ------------------
     inquiries or investigations pending, or to the knowledge of the Board
     threatened, against or affecting the Board in any court or before any
     governmental authority or arbitration board or tribunal, which adversely
     affect the validity or enforceability of the Series 1989C Bonds, the
     Indenture, the Agreement, this Amendment, or any agreement or instrument to
     which the Board is a party and which is used or contemplated for use in the
     consummation of the transactions contemplated hereby or thereby.

          (c) Issue, Sale and Other Transactions Are Legal and Authorized.  The
              -----------------------------------------------------------
     issue and sale of the Series 1989C Bonds and the execution and delivery by
     the Board of the Third Supplemental Indenture and this Amendment and the
     compliance by the Board with all of the provisions of each thereof and of
     the Series 1989C Bonds (i) are within the purposes, powers and authority of
     the Board, (ii) to the best of the knowledge of the Board, have been done
     in full compliance with the provisions of the Act, are legal and will not
     conflict with or constitute on the part of the Board a violation of or a
     breach of or default under, or result in the creation of any lien or
     encumbrance (other than Permitted Encumbrances under the Agreement) upon
     any property of the Board under the provisions of, its certificate of
     incorporation or Bylaws, or any indenture, mortgage, deed of trust, note
     agreement or other agreement or instrument to which the Board is a party or
     by which the Board is bound, or any license, judgment, decree, law,

                                      -3-
<PAGE>

     statute, order, rule or regulation of any court or governmental agency or
     body having jurisdiction over the Board or any of its activities or
     properties, and (iii) have been duly authorized by all necessary corporate
     action on the part of the Board.

          (d) Governmental Consents.  Neither the nature of the Board nor any of
              ---------------------
     its activities or properties, nor any relationship between the Board and
     any other person, nor any circumstance in connection with the offer, issue,
     sale or delivery of any of the Series 1989C Bonds is such as to require the
     consent, approval or authorization of, or the filing, registration or
     qualification with, any governmental authority on the part of the Board in
     connection with the execution, delivery and performance of the Third
     Supplemental Indenture and this Amendment, or the offer, issue, sale or
     delivery of the Series 1989C Bonds, other than (i) the filing with the
     Alabama Securities Commission of the notification of the Board's intention
     to issue the Series 1989C Bonds required by Act No. 586 enacted at the 1978
     Regular Session of the Legislature of the State and the issuance by the
     Director of the Alabama Securities Commission of such Certificate of
     Notification as may be required by said Act, and (ii) the due filing and
     recording of this Amendment, the Third Supplemental Indenture and the
     financing statements covering the security interests created hereunder and
     under the Indenture. The Board has filed the notification referred to in
     (i) of the preceding sentence and the Director of the Alabama Securities
     Commission has issued a Certificate of Notification applicable to the
     Series 1989C Bonds, which Certificate of notification has not been revoked
     or rescinded and is in full force and effect.

          (e) No Defaults.  The Board is not in default under the Act or under
              -----------
     its Certificate of Incorporation or Bylaws or any other agreement or
     instrument to which it is a party or by which is bound.

          Section 1.4  Representations and Warranties by the Company.  The
          -----------  ---------------------------------------------
Company makes the following representations and warranties as the basis for the
undertakings on its part herein contained:

          (a) The Company (i) is a corporation duly organized, validly existing
     and in good standing under the laws of the State of Delaware, (ii) has all
     requisite corporate power and authority to carry on its

                                      -4-
<PAGE>

     business as now being conducted and as presently proposed to be conducted,
     and (iii) has duly qualified and is authorized to do business and is in
     good standing as a foreign corporation in the State.

          (b) The Company has the corporate power and has been duly authorized
     to enter into this Amendment and to perform all of its obligations
     hereunder.

          (c) The willingness of the Board to issue the Series 1989C Bonds for
     purposes of financing costs of acquiring, constructing, and installing the
     Project, and to lease the Project to the Company, has induced the Company
     to locate the Project within the State of Alabama and, more particularly,
     within 25 miles of the City.

          (d) The Company is not subject to any contractual or other limitation
     or provision of any nature whatsoever which in any material way limits,
     restricts or prevents the Company from entering into this Amendment, or
     performing any of its obligations hereunder; and the execution and delivery
     of this Amendment, the consummation of the transactions contemplated
     hereby, and the fulfillment of or compliance with the terms and conditions
     of this Amendment will not conflict with or result in a breach of the
     terms, conditions or provisions of any restriction, agreement or instrument
     to which the Company is a party or by which it is bound, or constitute a
     default under any of the foregoing.

          (e) No event has occurred and no condition exists that would
     constitute an "Event of Default" under the Agreement or this Amendment
     which, with the lapse of time or with the giving of notice or both, would
     become an "Event of Default" under the Agreement or this Amendment.

          (f) To the best of its knowledge and belief, the Company is not in
     violation of any laws, ordinances, governmental rules or regulations to
     which it is subject and has not failed to obtain any licenses, permits,
     franchises or other governmental authorizations necessary to the ownership
     of its properties or to the conduct of its business, which violation or
     failure to obtain would reasonably be expected to materially and adversely
     affect the ability of the Company to perform its obligations under this
     Amendment.

                                      -5-
<PAGE>

                                  ARTICLE II

                                 MISCELLANEOUS
                                 -------------

          Section 2.1  Agreement and Amendment as One Document.  As amended by
          -----------  ----------------------------------------
this Amendment, the Agreement is in all respects ratified and confirmed and the
Agreement and this Amendment shall be read, taken and construed as one and the
same instrument.

          Section 2.2  References.  All references herein or in the Agreement to
          -----------  -----------
any Article, Section or provision of the Agreement shall refer to any such
Article, Section or provision as hereby amended.

          Section 2.3  Counterparts.  This Amendment may be simultaneously
          -----------  -------------
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.

          Section 2.4  Captions.  The captions or headings in this Amendment are
          -----------  ---------
for convenience only and in no way define, limit or describe the scope or intent
of any provision of this Amendment.

          Section 2.5  Applicable Law.  This Amendment shall be construed in
          -----------  ---------------
accordance with the laws of the State of Alabama.

          IN WITNESS WHEREOF, the Board and the Company have caused this
Amendment to be executed in their respective corporate names as of the date
first written above.
                                       THE INDUSTRIAL DEVELOPMENT BOARD OF
                                       THE CITY OF PHENIX CITY, ALABAMA

                                       By:  /s/ Kenneth A. Roberts
                                          -----------------------------------
                                          Chairman

                                       MEAD COATED BOARD, INC.

                                       By:__________________________________
                                          Title:  Treasurer

                                      -6-
<PAGE>

                               FOURTH AMENDMENT
                               ----------------

                                      TO
                                      --

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

          THIS FOURTH AMENDMENT TO LEASE AGREEMENT (the "Amendment") is made
and entered into as of July 1, 1989, by and between THE INDUSTRIAL DEVELOPMENT
BOARD OF THE CITY OF PHENIX CITY, ALABAMA (the "Board"), a public body
corporate and politic duly organized and existing under the Constitution and
laws of the State of Alabama, and MEAD COATED BOARD, INC., a Delaware
corporation (the "Company").

                                R E C I T A L S
                                ---------------

          The Board has previously issued and sold $85,000,000 in aggregate
principal amount of The Industrial Development Board of the City of Phenix City,
Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series
1988A (the "Series 1988A Bonds"); $43,000,000 in aggregate principal amount of
The Industrial Development Board of the City of Phenix City, Alabama Industrial
Development Revenue Bonds (Mead Coated Board Project), Series 1989A (the "Series
1989A Bonds"); $45,000,000 in aggregate principal amount of The Industrial
Development Board of the City of Phenix City, Alabama Industrial Development
Revenue Bonds (Mead Coated Board Project), Series 1989B (the "Series 1989B
Bonds"); and $37,000,000 in aggregate principal amount of The Industrial
Development Board of the City of Phenix City, Alabama Industrial Development
Revenue Bonds (Mead Coated Board Project) Series 1989C (the "Series 1989C
Bonds"), pursuant to a Trust Indenture, dated as of December 1, 1988 (the
"Original Indenture"), as supplemented by a First Supplemental Trust Indenture
dated as of March 1, 1989, a Second Supplemental Trust Indenture dated as of
April 1, 1989 and a Third Supplemental Trust Indenture dated as of June 1, 1989
(collectively, the "Indenture"), from the Board to AmSouth Bank N.A., as Trustee
(the "Trustee").

          The Board has used the proceeds of the sale of the Series 1988A Bonds,
the Series 1989A Bonds, the Series 1989B Bonds and the Series 1989C Bonds for
the payment of outstanding industrial development temporary borrowing notes (the
"Notes") issued by the Board for the purpose of funding the acquisition,
construction and installation of a coated natural kraft mill and related
facilities (the "Project") in connection with certain industrial facilities
located near Phenix City, Alabama. The Project is owned by the Board and leased
to the Company pursuant

<PAGE>

to a Lease Agreement dated as of December 1, 1988, as amended by the First
Amendment To Lease Agreement dated as of March 1, 1989, the Second Amendment To
Lease Agreement dated as of April 1, 1989 and the Third Amendment To Lease
Agreement dated as of June 1, 1989 (collectively the "Agreement"). The Agreement
obligates the Company to make rental payments in such amounts and at such times
as will provide for the payment of the principal and interest on the Series
1988A Bonds, the Series 1989A Bonds, the Series 1989B Bonds and the Series 1989C
Bonds as the same becomes due and payable.

          Under Article IV of the Original Indenture, the Board is permitted to
issue Additional Bonds (as defined in the Original Indenture) in order to pay
additional Notes issued by the Board in connection with the Project. In that
connection, the Board is issuing $40,000,000 in aggregate principal amount of
Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989D
(the "Series 1989D Bonds"), pursuant to the Indenture as supplemented by a
Fourth Supplemental Trust Indenture dated as of July 1, 1989 (the "Fourth
Supplemental Indenture") from the Board to the Trustee. The Indenture as
supplemented by the Fourth Supplemental Indenture is hereinafter referred to as
the "Indenture".

          NOW, THEREFORE, as contemplated by Section 4.5 of the Agreement and in
accordance with Section 1501 of the Original Indenture, the parties hereto
desire to amend the Agreement as follows:

                                   ARTICLE I

                     PROVISIONS FOR AMENDING THE AGREEMENT
                     -------------------------------------

          Section 1.1 Amendment of Section 5.3 of the Agreement. The term
          ------------------------------------------------------
"Bonds" as used in Section 5.3 of the Agreement shall include the Series 1989D
Bonds.

          Section 1.2 Terms of Agreement Applicable to Series 1989D Bonds. All
          ----------------------------------------------------------------
terms, conditions, representations and covenants set forth in the Agreement
applicable to the Series 1988A Bonds and not specifically otherwise provided for
in the Indenture, any supplements thereto or the Agreement, shall apply with
full force and effect to the Series 1989D Bonds. Without limiting the
foregoing, all references in the Agreement to the "Bonds" shall be deemed to
mean the Series 1988A Bonds, the Series 1989A Bonds, the Series 1989B Bonds, the
Series 1989C Bonds and the Series 1989D Bonds, including without limitation the
provisions of Section 5.3 of the Agreement relating to the payment of rents.

                                      -2-
<PAGE>

          Section 1.3 Representations and Warranties by the Board. The Board
          --------------------------------------------------------
makes the following representations and warranties as the basis for the
undertakings on its part herein contained:

          (a) Organization and Authority. The Board is a public corporation duly
              ---------------------------
     organized and validly existing under the provisions of the Act by authority
     of a resolution adopted by the Board of Commissioners of the City on June
     14, 1960 and a Certificate of Incorporation duly filed for record on
     October 17, 1960, in the office of the Judge of Probate of Russell County,
     Alabama, which Certificate of Incorporation has not been amended or been
     revoked and is of full force and effect. The Board has all requisite power
     and authority under the Act (1) to issue the Series 1989D Bonds, (2) to use
     the proceeds thereof to refund the Notes issued to pay the cost to acquire,
     construct and install the Project, (3) to own, lease, encumber and dispose
     of the Project, and (4) to enter into, and perform its obligations under,
     the Indenture, the Agreement and this Amendment. This Amendment and the
     Fourth Supplemental Indenture have been duly authorized, executed and
     delivered by the Board and are legal, valid and binding agreements
     enforceable against the Board in accordance with their respective terms.

          (b) Pending Litigation. There are no actions, suits, proceedings,
              -------------------
     inquiries or investigations pending, or to the knowledge of the Board
     threatened, against or affecting the Board in any court or before any
     governmental authority or arbitration board or tribunal, which adversely
     affect the validity or enforceability of the Series 1989D Bonds, the
     Indenture, the Agreement, this Amendment, or any agreement or instrument to
     which the Board is a party and which is used or contemplated for use in the
     consummation of the transactions contemplated hereby or thereby.

          (c) Issue, Sale and Other Transactions Are Legal and Authorized. The
              ------------------------------------------------------------
     issue and sale of the Series 1989D Bonds and the execution and delivery by
     the Board of the Fourth Supplemental Indenture and this Amendment and the
     compliance by the Board with all of the provisions of each thereof and of
     the Series 1989D Bonds (i) are within the purposes, powers and authority of
     the Board, (ii) to the best of the knowledge of the Board, have been done
     in full compliance with the provisions of the Act, are legal and will not
     conflict with or constitute on the part of the Board a violation of or a
     breach of or default under, or result in the creation of any lien or
     encumbrance (other than Permitted

                                      -3-
<PAGE>

Encumbrances under the Agreement) upon any property of the Board under the
provisions of, its certificate of incorporation or Bylaws, or any indenture,
mortgage, deed of trust, note agreement or other agreement or instrument to
which the Board is a party or by which the Board is bound, or any license,
judgment, decree, law, statute, order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Board or any of its
activities or properties, and (iii) have been duly authorized by all necessary
corporate action on the part of the Board.

       (d) Governmental Consents. Neither the nature of the Board nor any of its
           ----------------------
activities or properties, nor any relationship between the Board and any other
person, nor any circumstance in connection with the offer, issue, sale or
delivery of any of the Series 1989D Bonds is such as to require the consent,
approval or authorization of, or the filing, registration or qualification with,
any governmental authority on the part of the Board in connection with the
execution, delivery and performance of the Fourth Supplemental Indenture and
this Amendment, or the offer, issue, sale or delivery of the Series 1989D Bonds,
other than (i) the filing with the Alabama Securities Commission of the
notification of the Board's intention to issue the Series 1989D Bonds required
by Act No. 586 enacted at the 1978 Regular Session of the Legislature of the
State and the issuance by the Director of the Alabama Securities Commission of
such Certificate of Notification as may be required by said Act, and (ii) the
due filing and recording of this Amendment, the Fourth Supplemental Indenture
and the financing statements covering the security interests created hereunder
and under the Indenture. The Board has filed the notification referred to in (i)
of the preceding sentence and the Director of the Alabama Securities Commission
has issued a Certificate of Notification applicable to the Series 1989D Bonds,
which Certificate of notification has not been revoked or rescinded and is in
full force and effect.

          (e)  No Defaults. The Board is not in default under the Act or under
               ------------
its Certificate of Incorporation or Bylaws or any other agreement or instrument
to which it is a party or by which is bound.

          Section 1.4 Representations and Warranties by the Company. The Company
          ----------------------------------------------------------
makes the following representations and warranties as the basis for the
undertakings on its part herein contained:

                                      -4-
<PAGE>

          (a) The Company (i) is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, (ii) has all
requisite corporate power and authority to carry on its business as now being
conducted and as presently proposed to be conducted, and (iii) has duly
qualified and is authorized to do business and is in good standing as a foreign
corporation in the State.

          (b) The Company has the corporate power and has been duly authorized
to enter into this Amendment and to perform all of its obligations hereunder.

          (c) The willingness of the Board to issue the Series 1989D Bonds for
purposes of financing costs of acquiring, constructing, and installing the
Project, and to lease the Project to the Company, has induced the Company to
locate the Project within the State of Alabama and, more particularly, within 25
miles of the City.

          (d) The Company is not subject to any contractual or other limitation
or provision of any nature whatsoever which in any material way limits,
restricts or prevents the Company from entering into this Amendment, or
performing any of its obligations hereunder; and the execution and delivery of
this Amendment, the consummation of the transactions contemplated hereby, and
the fulfillment of or compliance with the terms and conditions of this Amendment
will not conflict with or result in a breach of the terms, conditions or
provisions of any restriction, agreement or instrument to which the Company is a
party or by which it is bound, or constitute a default under any of the
foregoing.

          (e) No event has occurred and no condition exists that would
constitute an "Event of Default" under the Agreement or this Amendment which,
with the lapse of time or with the giving of notice or both, would become an
"Event of Default" under the Agreement or this Amendment.

          (f) To the best of its knowledge and belief, the Company is not in
violation of any laws, ordinances, governmental rules or regulations to which it
is subject and has not failed to obtain any licenses, permits, franchises or
other governmental authorizations necessary to the ownership of its properties
or to the conduct of its business, which violation or failure to obtain would
reasonably be expected to materially and adversely affect the ability of the
Company to perform its obligations under this Amendment.

                                      -5-
<PAGE>

                                  ARTICLE II

                                 MISCELLANEOUS
                                 -------------

          Section 2.1 Aqreement and Amendment as One Document. As amended by
          ---------------------------------------------------
this Amendment, the Agreement is in al1 respects ratified and confirmed and the
Agreement and this Amendment shall be read, taken and construed as one and the
same instrument.

          Section 2.2 References. All references herein or in the Agreement to
          ----------------------
any Article, Section or provision of the Agreement shall refer to any such
Article, Section or provision as hereby amended.

          Section 2.3 Counterparts. This Amendment may be simultaneously
          ------------------------
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.

          Section 2.4 Captions. The captions or headings in this Amendment are
          --------------------
for convenience only and in no way define, limit or describe the scope or intent
of any provision of this Amendment.

          Section 2.5 Applicable Law. This Amendment shall be construed in
          --------------------------
accordance with the laws of the State of Alabama.

          IN WITNESS WHEREOF, the Board and the Company have caused this
Amendment to be executed in their respective corporate names as of the date
first written above.

                                        THE INDUSTRIAL DEVELOPMENT BOARD OF
                                        THE CITY OF PHENIX CITY, ALABAMA

                                        By:/s/ Kenneth A. Roberts
                                           -------------------------------------
                                           Chairman

                                        MEAD COATED BOARD, INC.

                                        By: /s/ W. D. Bloebaum, Jr.
                                           -------------------------------------
                                           Title: Treasurer

                                      -6-
<PAGE>

                            ACKNOWLEDGMENT OF BOARD

STATE OF ALABAMA

COUNTY OF RUSSELL

          I, Sydney S. Smith, a Notary Public in and for said County in said
State, hereby certify that Kenneth A. Roberts, whose name as Chairman of the
Board of Directors of THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX
CITY, ALABAMA, a public corporation and instrumentality under the laws of the
State of Alabama, is signed to the foregoing instrument and who is known to me,
acknowledged before me on this day that, being informed of the contents
of the said instrument, he, as such officer and with full authority, executed
the same voluntarily for and as the act of said public corporation.

          GIVEN under my hand and seal of office, this 24th day of July, 1989.

                                            /s/ Sydney S. Smith
                                            --------------------
                                                Notary Public
(SEAL)

                                            My commission expires: 2/25/92

                                      -7-
<PAGE>

                           ACKNOWLEDGMENT OF COMPANY

STATE OF OHIO

COUNTY OF MONTGOMERY

          I, Charity K. Burgess, Notary Public in and for said County in said
State, hereby certify that William D. Bloebaum, Jr., whose name as Treasurer of
MEAD COATED BOARD, INC., a corporation organized and existing under the laws of
the State of Delaware, is signed to the foregoing instrument and who is known to
me, acknowledged before me on this day that, being informed of the contents of
the said instrument, he, as such officer and with full authority, executed the
same voluntarily for and as the act of said corporation.

          GIVEN under my hand and seal of office, this 24th day of July, 1989.

                                           /s/ Charity K. Burgess
                                           ----------------------
                                                 Notary Public

(SEAL)
                                           My commission expires: 7/29/89

                                      -8-
<PAGE>

                                  EXHIBIT "A"

                                      to

                 Fourth Amendment To Lease Agreement between
                      THE INDUSTRIAL DEVELOPMENT BOARD OF
                       THE CITY OF PHENIX CITY, ALABAMA
                                      and
                           MEAD COATED BOARD, INC.
                           dated as of July 1, 1989

                          DESCRIPTION OF PROJECT LAND
                          ---------------------------

The Project Land includes the following property:

              NEW RECLAIM PLATE FEED AND CONVEYOR AREA (C-28511),
              ---------------------------------------------------

                CHIPS CONVEYOR TO SCREEN HOUSE AREA (C-28513),
                ----------------------------------------------

                     AND CHIPS SCREEN HOUSE AREA (C-28515)
                     -------------------------------------

           All that portion of land and structures lying 13' on each side of the
     following described centerline and also including any specifically noted
     areas which extend beyond said centerline strip:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State Georgia Coordinate System; and
     lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama;
     thence N 63(degrees) 51' 31" E, 790.90' to the point of beginning; thence N
     90(degrees) 00' W, 82.00; thence S 0' 00" W, 8.75'; thence N 90(degrees)
     00' W, 232.22'; thence S 15(degrees) 17' 15" E, 479.72' to a point on the
     northmost side of a rectangular area (Chip Screen House) which parallels
     last said course and is 75.0' north to south (7.00' of which is west of
     last said course) by 49.0' east to west; said rectangular area being the
     point of ending; said land being 0.56+ acres;

                 CHIPS CONVEYOR TO PINE STORAGE AREA (C-28538)
                 ---------------------------------------------

          All that portion of land and structures lying 14' on each side of the
     following described centerline:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System; and
     lying in Section 28, T 14 N, R

                                      -9-
<PAGE>

     30 E, County of Russell, State of Alabama; thence N 45(degrees) 24' 34" E,
     692.79' to the point of beginning; thence S 36(degrees) 51' 02" E, 454.94'
     to the point of ending; said land being 0.29+/- acres;

            CHIPPER DISCHARGE CONVEYOR AREA (C-28536) AND CHIPS TO
            ------------------------------------------------------
                   HARDWOOD STORAGE CONVEYOR AREA (C-28537)
                   ----------------------------------------

          All that portion of land and structures lying 14' on each side of the
     following described centerline and also including any specifically noted
     areas which extend beyond said centerline strip:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System; and
     lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama;
     thence N 71(degrees) 34' 06" E, 600.24' to the point of beginning; thence S
     71(degrees) 04' 32" E, 640.91'; thence N 50(degrees) 08' 32" E, 61.59' to
     the point of ending; said land being 0.45+/- acres;

                   CHIP CONVEYOR TO DIGESTER AREA (C-28521),
                  -----------------------------------------
                  CHIP CONVEYOR TO SURGE BIN AREA (C-28519),
                  ------------------------------------------
                         AND CHIP SILO AREA (C-28520)
                         ----------------------------

          All that portion of land and structures lying 14' on each side of the
     following described centerline and also including any specifically noted
     areas which extend beyond said centerline strip:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System; and
     lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama;
     thence S 48(degrees) 21' 59" W, 84.29' to the point of beginning; thence S
     56(degrees) 07' 32" E, 319.22' to the center of a circular area (Chip Silo)
     with a radius of 15.00' and a central angle of 360(degrees) 00' bounded by
     a rectangular structure 32' -6"+/- East-West and 32' -6"+/- North-South;
     thence N 82(degrees) 51' 32" E, 355.48' to the point of ending; said land
     being 0.45+/- acres;

                  NEW WASHER FACILITY AND BATCH DIGESTER AREA
                  -------------------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

                                     -10-
<PAGE>

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System;
     thence N 48(degrees) 06' 06" W, 35.94' to the point of beginning (N
     792,374.0, E 234,473.25); thence S 0(degrees) 00' W, 133.50'; thence N
     90(degrees) 00' W, 103.39'; thence S 0(degrees) 00' W, 103.50'; thence
     90(degrees) 00' W, 48.00'; thence N 0(degrees) 00' W, 55.75'; thence N
     90(degrees) 00' W, 80.00'; thence S 0(degrees) 00' W, 42.75'; thence N
     90(degrees) 00' W, 63.00'; thence N 0(degrees) 00' W, 110.00'; thence N
     45(degrees) 00' E, 55.00'; thence N 0(degrees) 00' W, 23.11'; thence N
     90(degrees) 00' E, 23.00'; thence N 0(degrees) 00' W, 23.25'; thence N
     90(degrees) 00' E, 170.00'; thence N 0(degrees) 00' W, 28.75'; thence N
     90(degrees) 00' E, 62.50' to the point of beginning; said area being
     1.01 (plus or minus) acres;

            MILL WATER COOLING TOWER AND NEW REACTOR CLARIFIER AREA
            -------------------------------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System;
     thence S 48(degrees) 46' 07" W, 591.71' to the point of beginning (N
     791,960.0 E 234,055.0); thence S 0(degrees) 00' W, 170.00'; thence N
     90(degrees) 00' W, 111.00; thence N 0(degrees) 00' W, 170.00'; thence N
     90(degrees) 00' E, 111.00' to the point of beginning; said land being
     0.43 (plus or minus) acres;

                       TURPENTINE RECOVERY FACILITY AREA
                       ---------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System;
     thence S 63(degrees) 26' 06" W, 11.18' to the point of beginning (N
     792,345.0, E 234,490.0); thence N 0' 00" W, 30.00'; thence N 90(degrees)
     00" E, 20.00'; thence S 0(degrees) 00' W, 30.00'; thence N 90(degrees) 00'
     W, 20.00' to the point of beginning; said land being 0.01 (plus or minus)
     acres;

                                     -11-
<PAGE>

           LOG STORAGE AREA (C-28522), LOG FEED DECKS AREA (C-28523),
           ----------------------------------------------------------

           DRUM AREA (C-28525), VIBRATING CONVEYORS AREA (C-28532),
           --------------------------------------------------------

               CHIPPER POWER FEED ROLLS AREA (C-28528), CHIP BLDG.
               ---------------------------------------------------

          AREA (C-28535), AND BARK COLLECTING CONVEYOR AREA (C-28531)
          -----------------------------------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System;
     thence N 80(degrees) 22' 54" E, 879.79' to the point of beginning; thence N
     0(degrees) 00' W, 326.00'; thence N 90(degrees) 00' E, 711.08'; thence S
     0(degrees) 00' W, 326.00'; thence N 90(degrees) 00' W, 328.00'; thence S
     0(degrees) 00' W, 188.00'; thence N 90(degrees) 00' W, 50.00'; thence N
     0(degrees) 00' W, 188.00'; thence N 90(degrees) 00' W, 333.08' to the point
     of beginning; said land being 5.54 (plus or minus) acres;

                        AREA "B" MAINTENANCE SHOP AREA
                        ------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
      T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
      described as follows:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System;
     thence S 11(degrees) 04' 57" W, 197.69' to the point of beginning (N
     792,156.0, E 234,462.0); thence S 0(degrees) 00" W, 82.00'; thence N
     90(degrees) 00" W, 52.00'; thence N 0(degrees) 00' W, 82.00'; thence N
     90(degrees) 00' E, 52.00 to the point of beginning; said land being 0.10
     (plus or minus) acres;

                       NEW LIM KILN/RECAUSTICIZING AREA
                       --------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 793,150.19, E
     233,250.02, of the West Zone of the State of Georgia Coordinate System;
     thence N 70(degrees) 51' 29" E, 267.79' to the point of beginning
     (793,238.0 E 233,503.0); thence N 90(degrees) 00' E, 399.23'; thence S
     0(degrees) 00' W, 50.00'; thence N 90(degrees) 00' E, 45.00'; thence S
     0(degrees) 00' W, 78.00'; thence N 90(degrees) 00' W, 444.23'; thence N
     0(degrees) 00' W, 128.00' to the point of beginning; said land being 1.25
     (plus or minus) acres;

                                      -12-

<PAGE>

                          NO. 2 RECOVERY BOILER AREA
                          --------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 793,150.19, E
     233,250.02, of the West Zone of the State of Georgia Coordinate System;
     thence S 40(degrees) 16' 34" E, 439.77' to the point of beginning (N
     792,814.67, E 233,534.32'); thence N 90(degrees) 00' E, 36.30'; thence N
     0(degrees) 00' W, 20.50'; thence N 90(degrees) 00' E, 72.26'; thence N
     0(degrees) 00' W, 14.83'; thence N 90(degrees) 00' E, 110.50'; thence S
     0(degrees) 00' W, 42.58'; thence N 90(degrees) 00' E, 26.00'; thence S
     0(degrees) 00' W, 81.00'; thence N 90(degrees) 00' W, 51.00'; thence N
     0(degrees) 00" W, 25.12'; thence N 90(degrees) 00' W, 85.50'; thence N
     00(degrees) 00' W, 8.63'; thence N 90(degrees) 00' W, 72.26'; thence N
     90(degrees) 00' W, 20.50'; thence N 0(degrees) 00' W, 36.30'; thence N
     0(degrees) 00' W, 34.00' to the point of beginning; said land being 0.47
     (plus or minus) acres;

                      NEW EVAPORATORS AND NEW TANKS AREA
                      ----------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 793,150.19, E
     233,250.02, of the West Zone of the State of Georgia Coordinate System;
     thence S 62(degrees) 01' 33" E, 637.83' to the point of beginning (N
     792,851.0, E 233,813.33); thence N 90(degrees) 00' E, 246.67'; thence along
     an arc South and East 53.41' having a radius of 34.00' with a central angle
     of 90(degrees) 00'; thence S 0(degrees) 00' W, 135.33'; thence along an arc
     South and West 53.41' having a radius of 34.00' with a central angle of
     90(degrees) 00'; thence N 90(degrees) 00' W, 34.00'; thence N 0(degrees)
     00' W, 99.79'; thence N 90(degrees) 00' W, 69.00'; thence N 59(degrees) 47'
     19" W, 91.42'; thence N 90(degrees) 00' W, 64.67'; thence N 0(degrees) 00'
     W, 57.54' to the point of beginning; said land being 0.72 (plus or minus)
     acres;

     (collectively, the "Unimproved Land"); less, in each case, any structures
     constructed and leased pursuant to a Lease Agreement dated July 1, 1977,
     and recorded in Deed Book 550 at Pages 51-94 (as amended to date, the "1977
     Lease") under which Lessor leased to Georgia Kraft Company ("Georgia
     Kraft") a parcel of land in Russell County, Alabama as more particularly
     described in Exhibit A to the Lease (the "1977 Land"), together with
     certain items of equipment described in Exhibit B to the 1977 Lease
     (Georgia Kraft has assigned its interest in the 1977 Lease to Mead Coated
     Board, Inc.);

                                     -13-
<PAGE>

     together with the following easements:

          (a) An easement and right for pedestrian and vehicular traffic to use
     all present and future walks, railroads, roads, driveways and docks upon
     the Board Premises (the 1977 Land less and except the 1988 Land) in order
     to provide all necessary or convenient ingress or egress between the
     Unimproved Land and railroads, public roads and highways and the
     Chattahoochee River and to permit passage between the Unimproved Land and
     the Board Premises;

          (b) An easement and right for the passage of pedestrians and vehicles
     and for the construction, erection, installation, operation, maintenance,
     renewal, replacement and use of material conveying systems, including
     without limitation pipelines, through any part of the Board Premises
     necessary or convenient in order to assure the passage of equipment, raw
     materials, items in the process of manufacture, and finished products from
     the Unimproved Land to the Board Premises, including without limitation
     such rights and easements as are necessary for the movement of personnel,
     vehicles and materials among and between the various parcels of land
     comprising the Board Premises in order to permit and facilitate the
     operation of the Project;

          (c) An easement and right to erect, install, construct, maintain,
     renew, replace and use on, over and under any part of the Board Premises,
     such pipes, conduits, and wires as are necessary or convenient to insure
     access to and an adequate system for or supply of gas, oil, steam,
     compressed air, process and space heat, water, fire protection, sewage and
     industrial waste disposal, electricity, communications, instrumentation and
     control, and other similar facilities to the Unimproved Land and the
     Project including, without limitation, the right to make connections with
     machinery, equipment, pipes, conduits and wires, structures and other
     improvements and appurtenances thereto, on the Board Premises; and

          (d) An easement and right to create and maintain upon the Board
     Premises encroachments of equipment, structures or other improvements which
     will be included on the Unimproved Land and within the Project as presently
     planned, and any similar replacements or substitutions of portions of the
     Project for as long as any such equipment, structures or other improvements
     remain standing, including without limitation the rights of lateral or
     party wall support, and to connect any such equipment, structure or other
     improvements to any structure or improvement on the Board Premises;

                                     -14-

<PAGE>

 but subject to the following easements over the Unimproved Land in favor of the
 Board Premises:

          (a) An easement and right for pedestrian and vehicular traffic to use
     all present and future walks, railroads, roads, driveways and docks upon
     the Unimproved Land in order to provide all necessary or convenient ingress
     and egress among and between all portions of the Board Premises and between
     the Board Premises and the Unimproved Land, including without limitation
     portions on which additional improvements may be erected, and railroads,
     public works and highways and the Chattahoochee River and to permit passage
     among and between the various parcels of land comprising the Board
     Premises;

          (b) An easement and right for the passage of pedestrians, vehicles,
     and for the construction, installation, operation, maintenance, renewal,
     replacement and use of material conveyance systems, including without
     limitation, pipelines, through any part of the Unimproved Land necessary or
     convenient in order to assure the passage of equipment, and finished
     products from one portion of the Board Premises to another or between the
     Board Premises and the Unimproved Land, including, without limitation such
     rights and easements as are necessary for the movement of personnel,
     vehicles and material among and between the various parcels of land
     comprising the Board Premises in order to permit and facilitate the
     operation of any facilities located on the Board Premises;

          (c) An easement and right to erect, install, construct, maintain,
     renew, replace and use on, over and under any part of the Unimproved Land,
     such pipes, conduits, and wires and appurtenances as are necessary or
     convenient to assure access to and an adequate system for or supply of gas,
     oil, steam, compressed air, process and space heat, water, fire protection,
     sewage and industrial waste disposal, electricity, communications,
     instrumentation and control, and other similar facilities to the Board
     Premises, including without limitation, the right to make connections with
     machinery, equipment, pipes, conduits and wires, structures and other
     improvements and appurtenances thereto, on the Unimproved Land; and

          (d) An easement and right to maintain any present equipment,
     structures or other improvements included within the facilities presently
     located on the Board Premises as encroachments upon the Unimproved Land as
     long as any such equipment, structures or other improvements remain
     standing,

                                      -15-
<PAGE>

     and to construct and maintain similar encroachments on the Unimproved Land
     in respect of any additional improvements constructed adjacent to the
     Unimproved Land, as long as any such additional improvements remain
     standing, including without limitation the rights of lateral or party wall
     support, and to connect such additional improvements to any structure or
     any improvements on the Unimproved Land.

                                      -16-
<PAGE>

                             CONSENT OF BONDHOLDER
                             ---------------------

          MEAD COATED BOARD, INC., as holder of all of the outstanding
Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1988A
of the Industrial Board of the City of Phenix City, Alabama (the "Board"),
hereby consents to the execution and delivery of the foregoing Fourth Amendment
To Lease Agreement dated as of July 1, 1989, between the Board and Mead Coated
Board, Inc., amending the Lease Agreement, dated as of December 1, 1988, as
amended by a First Amendment To Lease Agreement dated as of March 1, 1989, a
Second Amendment to Lease Agreement dated as of April 1, 1989 and a Third
Amendment To Lease Agreement dated as of June 1, 1989, between the Board and
Mead Coated Board, Inc. and directs AmSouth Bank N.A., as Trustee, to consent to
the execution and delivery of the same.

          IN WITNESS WHEREOF, Mead Coated Board, Inc. has caused this Consent
of Bondholder to be executed in its name and behalf as of July 1, 1989.

                                            MEAD COATED BOARD, INC.

                                            By: /s/ W. D. Bloebaum, Jr.
                                                ----------------------------
                                                Title:

                                      -17-
<PAGE>

                              CONSENT OF TRUSTEE
                              ------------------

          AMSOUTH BANK N.A., as Trustee under the Trust Indenture dated as of
December 1, 1988, as supplemented by a First Supplemental Trust Indenture dated
as of March 1, 1989, a Second Supplemental Trust Indenture dated as of April 1,
1989 and a Third Supplemental Trust Indenture dated as of June 1, 1989, from the
Industrial Development Board of the City of Phenix City, Alabama (the "Board"),
hereby consents to the execution and delivery of the foregoing Fourth Amendment
To Lease Agreement, dated as of July 1, 1989, between the Board and Mead Coated
Board, Inc., amending the Lease Agreement, dated as of December 1, 1988, as
amended by a First Amendment To Lease Agreement dated as of March 1, 1989, a
Second Amendment To Lease Agreement dated as of April 1, 1989 and a Third
Amendment To Lease Agreement dated as of June 1, 1989, between the Board and
Mead Coated Board, Inc.

          IN WITNESS WHEREOF, AmSouth Bank N.A. has caused this Consent of
Trustee to be executed in its name and behalf as of July 1, 1989.

                                            AMSOUTH BANK N.A., as Trustee

                                            By: /s/ T. Franklin Caley
                                                --------------------------
                                                Title:

                                      -18-
<PAGE>

                                FIFTH AMENDMENT
                                ---------------
                                      TO
                                      --
                                LEASE AGREEMENT
                                ---------------

          THIS FIFTH AMENDMENT TO LEASE AGREEMENT (the "Amendment") is made and
entered into as of December 1, 1989, by and between THE INDUSTRIAL DEVELOPMENT
BOARD OF THE CITY OF PHENIX CITY, ALABAMA (the "Board"), a public body corporate
and politic duly organized and existing under the Constitution and laws of the
State of Alabama, and MEAD COATED BOARD, INC., a Delaware corporation (the
"Company").

                                R E C I T A L S
                                ---------------

          The Board has previously issued and sold $85,000,000 in aggregate
principal amount of The Industrial Development Board of the City of Phenix City,
Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series
1988A (the "Series 1988A Bonds"); $43,000,000 in aggregate principal amount of
The Industrial Development Board of the City of Phenix City, Alabama
Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989A
(the "Series 1989A Bonds"); $45,000,000 in aggregate principal amount of The
Industrial Development Board of the City of Phenix City, Alabama Industrial
Development Revenue Bonds (Mead Coated Board Project), Series 1989B (the
"Series 1989B Bonds"); $37,000,000 in aggregate principal amount of The
Industrial Development Board of the City of Phenix City, Alabama Industrial
Development Revenue Bonds (Mead Coated Board Project) Series 1989C (the "Series
1989C Bonds"); and $40,000,000 in aggregate principal amount of The Industrial
Development Board of the City of Phenix City, Alabama Industrial Development
Revenue Bonds (Mead Coated Board Project) Series 1989D (the "Series 1989D
Bonds"), pursuant to a Trust Indenture, dated as of December 1, 1988 (the
"Original Indenture"), as supplemented by a First Supplemental Trust Indenture
dated as of March 1, 1989, a Second Supplemental Trust Indenture dated as of
April 1, 1989, a Third Supplemental Trust Indenture dated as of June 1, 1989 and
a Fourth Supplemental Trust Indenture dated as of July 1, 1989 (collectively,
the "Indenture"), from the Board to AmSouth Bank N.A., as Trustee (the
"Trustee").
<PAGE>

          "Issuer" means the Board.

               "Sodra Leases" means the Lease Agreement dated as of December 8,
          1989 between Sodra Skogsagarna Leasing AB, as lessor, and the Board,
          as lessee, relating to a recovery boiler and certain related
          equipment; the Lease Agreement dated as of December 8, 1989 between
          Sodra Skogsagarna Leasing AB, as lessor, and the Board, as lessee,
          relating to a recausticizing system and certain related equipment; and
          other agreements, instruments or documents entered into or delivered
          by the Board in connection with or pursuant to said Lease Agreements.

               "Sodra Leased Equipment" means the equipment that is the subject
          of the Sodra Lease.

and by adding to the definition of "Permitted Encumbrances" the following
paragraph (m):

          and (m) the Sodra Leases.

and by amending the definition of "Project Facilities" in its entirety
by deleting said definition and substituting therefor the following:

               "Project Facilities" means the facilities acquired, constructed,
          installed and financed with proceeds of the sale of the Notes and/or
          bonds issued under this Indenture (including any Additional Bonds);
          such facilities are more fully described in the Project Summary, as it
          may be amended from time to time;

Section 3.2 of the Agreement is amended by adding the following provision of the
end of Section 3.2:

          Notwithstanding the foregoing, the Board, for itself, its successors
          and assigns, warrants to the Company, its successors and assigns, that
          it has a leasehold

                                      -3-
<PAGE>

          interest in the Sodra Leased Equipment under the Sodra Leases, subject
          only to Permitted Encumbrances and rights of the lessor under the
          Sodra Leases.

Section 5.1 of The Agreement is hereby amended by adding the following provision
of the end of Section 5.1:

          Notwithstanding and in addition to the foregoing, the Agreement and
          the leasehold interest created by the Agreement shall terminate as to
          the Sodra Leased Equipment or any part thereof (and only as to the
          Sodra Leased Equipment) on the earliest of (i) midnight, December 1,
          2028, (ii) payment in full of all Bonds and any Additional Bonds and
          (iii) as to any portion of the Sodra Leased Equipment, termination of
          the applicable Sodra Lease without the exercise by the Board of the
          purchase option provided by such Sodra Lease.

Article V of the Agreement is hereby amended by adding the following new Section
5.7:

          Section 5.7.  Equipment Leases.  The Board agrees to fully and
                        -----------------
          promptly perform all its obligations under the Sodra Leases. The Board
          further agrees that it will take all actions under the Sodra Leases
          directed by the Company, including without limitation the exercise of
          any purchase, renewal and termination options, and will not exercise
          any such purchase, renewal or termination options except as so
          directed by the Company. The Company agrees to comply with all terms
          and conditions of, and to perform all obligations of the Board under,
          the Sodra Leases regarding the use and maintenance of the Sodra Leased
          Equipment. The Company further agrees to pay, on behalf of the Board,
          all amounts payable from time to time by the Board under the Sodra
          Leases.

Section 6.9 of the Agreement is hereby amended by adding the following paragraph
at the end of Section 6.9:

                                      -4-
<PAGE>

               The Company shall indemnify and hold harmless the Issuer, and the
          members, officers, agents and employees of the Issuer, from any
          liability, damages, costs and expenses arising out of or resulting
          from the lease of the Sodra Leased Equipment under the Sodra Lease,
          except as the same may arise from the negligence or misconduct of the
          Issuer.

Article VIII of the Agreement is hereby amended by adding the following new
Section 8.7:

          Section 8.7.  Special Release Provisions.  Notwithstanding any other
                        ---------------------------
          provision of this Agreement, the parties hereto reserve the right to
          amend this Agreement at any time and from time to time by mutual
          agreement for the purpose of effecting the release of any portion of
          the equipment that is the subject of the leases referred to in Section
          5.7 (and the portions of the Project Land, or interests therein, on
          which such equipment is located); provided that no release effected
          under this Section shall entitle the Company to any diminution in or
          postponement or abatement of the rents payable under Section 5.3 or
          the obligations under Section 5.7.

Exhibit B to the Agreement is hereby amended by adding the following provision
at the end of Exhibit B:

          The Project includes the Sodra Leased Equipment.

          The term "Bonds" as used in Section 5.3 of the Agreement shall include
the Series 1989E Bonds.

          Section 1.2  Terms of Agreement Applicable to Series 1989E Bonds.  All
          -----------  ----------------------------------------------------
terms, conditions, representations and covenants set forth in the Agreement
applicable to the Series 1988A Bonds and not specifically otherwise provided for
in the Indenture, any supplements thereto or the Agreement, shall apply

                                      -5-
<PAGE>

with full force and effect to the Series 1989E Bonds. Without limiting the
foregoing, all references in the Agreement to the "Bonds" shall be deemed to
mean the Series 1988A Bonds, the Series 1989A Bonds, the Series 1989B Bonds, the
Series 1989C Bonds, the Series 1989D Bonds and the Series 1989E Bonds, including
without limitation the provisions of Section 5.3 of the Agreement relating to
the payment of rents.

          Section 1.3  Representations and Warranties by the Board.  The Board
          -----------  --------------------------------------------
makes the following representations and warranties as the basis for the
undertakings on its part herein contained:

               (a) Organization and Authority. The Board is a public corporation
                   ---------------------------
     duly organized and validly existing under the provisions of the Act by
     authority of a resolution adopted by the Board of Commissioners of the City
     on June 14, 1960 and a Certificate of Incorporation duly filed for record
     on October 17, 1960, in the office of the Judge of Probate of Russell
     County, Alabama, which Certificate of Incorporation has not been amended or
     been revoked and is of full force and effect. The Board has all requisite
     power and authority under the Act (1) to issue the Series 1989E Bonds, (2)
     to use the proceeds thereof to refund the Notes and to pay the cost to
     acquire, construct and install the Project, (3) to own, lease, encumber and
     dispose of the Project, and (4) to enter into, and perform its obligations
     under, the Sodra Leases, the Indenture, the Agreement and this Amendment.
     The Sodra Leases, this Amendment and the Fifth Supplemental Indenture have
     been duly authorized, executed and delivered by the Board and are legal,
     valid and binding agreements enforceable against the Board in accordance
     with their respective terms.

               (b) Pending Litigation. There are no actions, suits, proceedings,
                   -------------------
     inquiries or investigations pending, or to the knowledge of the Board
     threatened, against or affecting the Board in any court or before any
     governmental authority or arbitration board or tribunal, which adversely
     affect the validity or enforceability of the Series 1989E Bonds, the
     Indenture, the Agreement, the Sodra Leases, this Amendment, or any
     agreement or instrument to which the Board is a party and which is used or
     contemplated for use in the consummation of the transactions contemplated
     hereby or thereby.

               (c) Issue, Sale and Other Transactions Are Legal and Authorized.
                   ------------------------------------------------------------
     The issue and sale of the Series 1989E Bonds and the execution and delivery
     by the Board

                                      -6-
<PAGE>

     of the Fifth Supplemental Indenture, this Amendment and the Sodra Leases
     and the compliance by the Board with all of the provisions of each thereof
     and of the Series 1989E Bonds (i) are within the purposes, powers and
     authority of the Board, (ii) to the best of the knowledge of the Board,
     have been done in full compliance with the provisions of the Act, are legal
     and will not conflict with or constitute on the part of the Board a
     violation of or a breach of or default under, or result in the creation of
     any lien or encumbrance (other than Permitted Encumbrances under the
     Agreement) upon any property of the Board under the provisions of, its
     certificate of incorporation or bylaws, or any indenture, mortgage, deed of
     trust, note agreement or other agreement or instrument to which the Board
     is a party or by which the Board is bound, or any license, judgment,
     decree, law, statute, order, rule or regulation of any court or
     governmental agency or body having jurisdiction over the Board or any of
     its activities or properties, and (iii) have been duly authorized by all
     necessary corporate action on the part of the Board.

               (d) Governmental Consents.  Neither the nature of the Board nor
                   ----------------------
     any of its activities or properties, nor any relationship between the Board
     and any other person, nor any circumstance in connection with the offer,
     issue, sale or delivery of any of the Series 1989E Bonds is such as to
     require the consent, approval or authorization of, or the filing,
     registration or qualification with, any governmental authority on the part
     of the Board in connection with the execution, delivery and performance of
     the Sodra Leases, the Fifth Supplemental Indenture and this Amendment, or
     the offer, issue, sale or delivery of the Series 1989E Bonds, other than
     (i) the filing with the Alabama Securities Commission of the notification
     of the Board's intention to issue the Series 1989E Bonds and to deliver the
     Sodra Leases required by Act No. 586 enacted at the 1978 Regular Session of
     the Legislature of the State and the issuance by the Director of the
     Alabama Securities Commission of such Certificate of Notification as may be
     required by said Act, and (ii) the due filing and recording of this
     Amendment, the Fifth Supplemental Indenture and the financing statements
     covering the security interests created hereunder and under the Indenture.
     The Board has filed the notification referred to in (i) of the preceding
     sentence and the Director of the Alabama Securities Commission has issued
     Certificate(s) of Notification applicable to the Series

                                      -7-
<PAGE>

     1989E Bonds and the Sodra Leases, which Certificates of Notification has
     not been revoked or rescinded and is in full force and effect.

               (e) No Defaults.  The Board is not in default under the Act or
                   ------------
     under its Certificate of Incorporation or Bylaws or any other agreement or
     instrument to which it is a party or by which is bound.

          Section 1.4  Representations and Warranties by the Company. The
          -----------  ----------------------------------------------
Company makes the following representations and warranties as the basis for the
undertakings on its part herein contained:

               (a) The Company (i) is a corporation duly organized, validly
     existing and in good standing under the laws of the State of Delaware, (ii)
     has all requisite corporate power and authority to carry on its business as
     now being conducted and as presently proposed to be conducted, and (iii)
     has duly qualified and is authorized to do business and is in good standing
     as a foreign corporation in the State.

               (b) The Company has the corporate power and has been duly
     authorized to enter into this Amendment and to perform all of its
     obligations hereunder.

               (c) The willingness of the Board to issue the Series 1989E Bonds
     for purposes of financing costs of acquiring, constructing, and installing
     the Project, and to lease the Project to the Company, has induced the
     Company to locate the Project within the State of Alabama and, more
     particularly, within 25 miles of the City.

               (d) The Company is not subject to any contractual or other
     limitation or provision of any nature whatsoever which in any material way
     limits, restricts or prevents the Company from entering into this
     Amendment, or performing any of its obligations hereunder; and the
     execution and delivery of this Amendment, the consummation of the
     transactions contemplated hereby, and the fulfillment of or compliance with
     the terms and conditions of this Amendment will not conflict with or result
     in a breach of the terms, conditions or provisions of any restriction,
     agreement or instrument to which the Company is a party or by which it is
     bound, or constitute a default under any of the foregoing.

                                      -8-
<PAGE>

               (e) No event has occurred and no condition exists that would
     constitute an "Event of Default" under the Agreement or this Amendment
     which, with the lapse of time or with the giving of notice or both, would
     become an "Event of Default" under the Agreement or this Amendment.

               (f) To the best of its knowledge and belief, the Company is not
     in violation of any laws, ordinances, governmental rules or regulations to
     which it is subject and has not failed to obtain any licenses, permits,
     franchises or other governmental authorizations necessary to the ownership
     of its properties or to the conduct of its business, which violation or
     failure to obtain would reasonably be expected to materially and adversely
     affect the ability of the Company to perform its obligations under this
     Amendment.

          Section 1.5  Agreement Regarding Sodra Leased Equipment.  The Board
          -----------  -------------------------------------------
and the Company acknowledge and agree that (a) during the term of the Sodra
Leases, title to the Sodra Leased Equipment will be held by Sodra Skogsagarna
Leasing AB and (b) the Sodra Leased Equipment is to be and remain personal
property for the term of the Sodra Leases and it is not the intent of the Board
and the Company that the Sodra Leased Equipment be deemed to be real property or
affixed to real property.

                                  ARTICLE II

                                 MISCELLANEOUS
                                 -------------

          Section 2.1  Agreement and Amendment as One Document.  As amended by
          -----------  ----------------------------------------
this Amendment, the Agreement is in all respects ratified and confirmed and the
Agreement and this Amendment shall be read, taken and construed as one and the
same instrument.

          Section 2.2  References.  All references herein or in the Agreement to
          -----------  -----------
any Article, Section or provision of the Agreement shall refer to any such
Article, Section or provision as hereby amended.

          Section 2.3  Counterparts.  This Amendment may be simultaneously
          -----------  -------------
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.

                                      -9-
<PAGE>

          Section 2.4 Captions. The captions or headings in this Amendment are
          ----------- ---------
for convenience only and in no way define, limit or describe the scope or intent
of any provision of this Amendment.

          Section 2.5 Applicable Law. This Amendment shall be construed in
          ----------- ---------------
accordance with the laws of the State of Alabama.

          IN WITNESS WHEREOF, the Board and the Company have caused this
Amendment to be executed in their respective corporate names as of the date
first written above.

                                        THE INDUSTRIAL DEVELOPMENT BOARD OF
ATTEST:                                 THE CITY OF PHENIX CITY, ALABAMA

By: /s/ Carlotta Waldrop                By: /s/ Kenneth A. Roberts
   --------------------------              -----------------------------
   Secretary                               Chairman

                                        MEAD COATED BOARD, INC.

                                        By: /s/ Jeffery M. O'Connell
                                           -----------------------------
                                           Vice President

                                     -10-
<PAGE>

                            ACKNOWLEDGMENT OF BOARD

STATE OF ALABAMA

COUNTY OF RUSSELL

          I, Sydney S. Smith, a Notary Public in and for said County in said
State, hereby certify that Kenneth A. Roberts, whose name as Chairman of the
Board of Directors of THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX
CITY, ALABAMA, a public corporation and instrumentality under the laws of the
State of Alabama, is signed to the foregoing instrument and who is known to me,
acknowledged before me on this day that, being informed of the contents of the
said instrument, he, as such officer and with full authority, executed the same
voluntarily for and as the act of said public corporation.

          GIVEN under my hand and seal of office, this 14th day of December,
1989.

                                       /s/ Sydney S. Smith
                                       --------------------------
                                            Notary Public

(SEAL)
                                       My commission expires: 2/25/92
                                                             --------

                                      -11-
<PAGE>

                           ACKNOWLEDGMENT OF COMPANY

STATE OF OHIO

COUNTY OF MONTGOMERY

          I, Janet M. Cocuzzi, Notary Public in an for said County in said
County in said State, hereby certify that Jeffrey M. O'Connell, whose name as
VP. Admin. of MEAD COATED BOARD, INC., a corporation organized and existing
under the laws of the State of Delaware, is signed to the foregoing instrument
and who is known to me, acknowledged before me on this day that, being informed
of the contents of the said instrument, he, as such officer and with full
authority, executed the same voluntarily for and as the act of said corporation.

          GIVEN under my hand and seal of office, this 8th day of December,
1989.

                                        /s/ Janet M. Cocuzzi
                                        ---------------------------
                                             Notary Public

(SEAL)                                   Notary Public, DeKalb County, Georgia
                                         My Commission Expires: May 14, 1990

                                        My Commission expires: __________

                                      -12-
<PAGE>

                                  EXHIBIT "A"

                                      to

                  Fifth Amendment To Lease Agreement between
                      THE INDUSTRIAL DEVELOPMENT BOARD OF
                       THE CITY OF PHENIX CITY, ALABAMA
                                      and
                           MEAD COATED BOARD, INC.
                         dated as of December 1, 1989

                          DESCRIPTION OF PROJECT LAND
                          ---------------------------

The Project Land includes the following property:

              NEW RECLAIM PLATE FEED AND CONVEYOR AREA (C-28511),
              ---------------------------------------------------
                CHIPS CONVEYOR TO SCREEN HOUSE AREA (C-28513),
                ----------------------------------------------
                     AND CHIPS SCREEN HOUSE AREA (C-28515)
                     -------------------------------------

          All that portion of land and structures lying 13' on each side of the
     following described centerline and also including any specifically noted
     areas which extend beyond said centerline strip:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State Georgia Coordinate System; and
     lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama;
     thence N 63(degrees) 51' 31" E, 790.90' to the point of beginning; thence N
     90(degrees) 00' W, 82.00; thence S 0' 00" W, 8.75'; thence N 90(degrees)
     00' W, 232.22'; thence S 15(degrees) 17' 15" E, 479.72' to a point on the
     northmost side of a rectangular area (Chip Screen House) which parallels
     last said course and is 75.0' north to south (7.00' of which is west of
     last said course) by 49.0' east to west; said rectangular area being the
     point of ending; said land being 0.56 (plus or minus) acres;

                 CHIPS CONVEYOR TO PINE STORAGE AREA (C-28538)
                 ---------------------------------------------

          All that portion of land and structures lying 14' on each side of the
     following described centerline:

                                      -13-
<PAGE>

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System; and
     lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama;
     thence N 45(degrees) 24' 34" E, 692.79' to the point of beginning; thence S
     36(degrees) 51' 02" E, 454.94' to the point of ending; said land being 0.29
     (plus or minus) acres;

            CHIPPER DISCHARGE CONVEYOR AREA (C-28536) AND CHIPS TO
            ------------------------------------------------------

                   HARDWOOD STORAGE CONVEYOR AREA (C-28537)
                   ----------------------------------------

          All that portion of land and structures lying 14' on each side of the
     following described centerline and also including any specifically noted
     areas which extend beyond said centerline strip:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System; and
     lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama;
     thence N 71(degrees) 34' 06" E, 600.24 ' to the point of beginning; thence
     S 71(degrees) 04' 32" E, 640.91'; thence N 50(degrees) 08' 32" E, 61.59' to
     the point of ending; said land being 0.45 (plus or minus) acres;

                   CHIP CONVEYOR TO DIGESTER AREA (C-28521),
                   -----------------------------------------
                  CHIP CONVEYOR TO SURGE BIN AREA (C-28519),
                  ------------------------------------------
                         AND CHIP SILO AREA (C-28520)
                         ----------------------------

          All that portion of land and structures lying 14' on each side of the
     following described centerline and also including any specifically noted
     areas which extend beyond said centerline strip:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System; and
     lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama;
     thence S 48(degrees) 21' 59" W, 84.29' to the point of beginning; thence S
     56(degrees) 07' 32" E, 319.22' to the center of a circular area (Chip Silo)
     with a radius of 15.00' and a central angle of 360(degrees) 00' bounded by
     a rectangular structure 32' -6" (plus or minus) East-West and 32' -6" (plus
     or minus) North-South; thence N 82(degrees) 51' 32" E, 355.48' to the point
     of ending; said land being 0.45 (plus or minus) acres;

                                      -14-
<PAGE>

                 NEW WASHER FACILITY  AND BATCH DIGESTER AREA
                 --------------------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System;
     thence N 48 degrees 06' 06" W, 35.94' to the point of beginning (N
     792,374.0, E 234,473.25); thence S 0 degrees 00' W, 133.50'; thence N 90
     degrees 00' W, 103.39'; thence S 0 degrees 00' W, 103.50'; thence 90
     degrees 00' W, 48.00'; thence N 0 degrees 00' W, 55.75'; thence N 90
     degrees 00' W, 80.00'; thence S 0 degrees 00' W, 42.75'; thence N 90
     degrees 00' W, 63.00'; thence N 0 degrees 00' W, 110.00'; thence N 45
     degrees 00' E, 55.00'; thence N 0 degrees 00' W, 23.11'; thence N 90
     degrees 00' E, 23.00'; thence N 0 degrees 00' W, 23.25'; thence N 90
     degrees 00' E, 170.00'; thence N 0 degrees 00' W, 28.75'; thence N 90
     degrees 00' E, 62.50' to the point of beginning; said area being 1.01 (plus
     or minus) acres;

            MILL WATER COOLING TOWER AND NEW REACTOR CLARIFIER AREA
            -------------------------------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System;
     thence S 48 degrees 46' 07" W, 591.71' to the point of beginning (N
     791,960.0 E 234,055.0); thence S 0' 00' W, 170.00'; thence N 90 degrees 00'
     W, 111.00; thence N 0 degrees 00' W, 170.00'; thence N 90 degrees 00' E,
     111.00' to the point of beginning; said land being 0.43 (plus or minus)
     acres;

                       TURPENTINE RECOVERY FACILITY AREA
                       ---------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System;
     thence S 63 degrees 26' 06" W, 11.18' to the point of beginning (N
     792,345.0, E 234,490.0); thence N 0 degrees 00' W, 30.00'; thence N 90
     degrees 00" E, 20.00'; thence S 0 degrees 00' W, 30.00'; thence N 90
     degrees 00' W, 20.00' to the point of beginning; said land being 0.01 (plus
     or minus) acres;

                                      -15-
<PAGE>

          LOG STORAGE AREA (C-28522), LOG FEED DECKS AREA (C-28523),
          ----------------------------------------------------------
           DRUM AREA (C-28525), VIBRATING CONVEYORS AREA (C-28532),
           --------------------------------------------------------
              CHIPPER POWER FEED ROLLS AREA (C-28528), CHIP BLDG.
              ---------------------------------------------------
          AREA (C-28535), AND BARK COLLECTING CONVEYOR AREA (C-28531)
          -----------------------------------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System;
     thence N 80 degrees 22' 54" E, 879.79' to the point of beginning; thence N
     0 degrees 00' W, 326.00'; thence N 90 degrees 00' E, 711.08'; thence S 0
     degrees 00' W, 326.00'; thence N 90 degrees 00' W, 328.00'; thence S 0
     degrees 00' W, 188.00'; thence N 90 degrees 00' W, 50.00'; thence N 0
     degrees 00' W, 188.00'; thence N 90 degrees 00' W, 333.08' to the point of
     beginning; said land being 5.54 (plus or minus) acres;

                        AREA "B" MAINTENANCE SHOP AREA
                        ------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System;
     thence S 11 degrees 04' 57" W, 197.69' to the point of beginning (N
     792,156.0, E 234,462.0); thence S 0 degrees 00" W, 82.00'; thence N 90
     degrees 00" W, 52.00'; thence N 0 degrees 00' W, 82.00'; thence N 90
     degrees 00' E, 52.00 to the point of beginning; said land being 0.10 (plus
     or minus) acres;

                      NEW LIME KILN/RECAUSTICIZING AREA
                       ---------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 793,150.19, E
     233,250.02, of the West Zone of the State of Georgia Coordinate System;
     thence N 70 degrees 51' 29" E, 267.79' to the point of beginning (793,238.0
     E 233,503.0); thence N 90 degrees 00' E, 399.23'; thence S 0 degrees 00' W,
     50.00'; thence N 90 degrees 00' E, 45.00'; thence S 0 degrees 00' W,
     78.00'; thence N 90 degrees 00' W, 444.23'; thence N 0 degrees 00' W,
     128.00' to the point of beginning; said land being 1.25 (plus or minus)
     acres;

                                      -16-
<PAGE>

                          NO. 2 RECOVERY BOILER AREA
                          --------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 793,150.19, E
     233,250.02, of the West Zone of the State of Georgia Coordinate System;
     thence S 40(degrees) 16' 34" E, 439.77' to the point of beginning (N
     792,814.67, E 233,534.32'); thence N 90(degrees) 00' E, 36.30'; thence N
     0(degrees) 00' W, 20.50'; thence N 90(degrees) 00' E, 72.26'; thence N
     0(degrees) 00' W, 14.83'; thence N 90(degrees) 00' E, 110.50'; thence S
     0(degrees) 00' W, 42.58'; thence N 90(degrees) 00' E, 26.00'; thence S
     0(degrees) 00' W, 81.00'; thence N 90(degrees) 00' W, 51.00'; thence N
     0(degrees) 00" W, 25.12'; thence N 90(degrees) 00' W, 85.50'; thence N
     00(degrees) 00' W, 8.63'; thence N 90(degrees) 00' W, 72.26'; thence N
     90(degrees) 00' W, 20.50'; thence N 0(degrees) 00' W, 36.30'; thence N
     0(degrees) 00' W, 34.00' to the point of beginning; said land being 0.47
     (plus or minus) acres;

                      NEW EVAPORATORS AND NEW TANKS AREA
                      ----------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 793,150.19, E
     233,250.02, of the West Zone of the State of Georgia Coordinate System;
     thence S 62(degrees) 01' 33" E, 637.83' to the point of beginning (N
     792,851.0, E 233,813.33); thence N 90(degrees) 00' E, 246.67'; thence along
     an arc South and East 53.41' having a radius of 34.00' with a central angle
     of 90(degrees) 00'; thence S 0(degrees) 00' W, 135.33'; thence along an arc
     South and West 53.41' having a radius of 34.00' with a central angle of
     90(degrees) 00'; thence N 90(degrees) 00' W, 34.00'; thence N 0(degrees)
     00' W, 99.79'; thence N 90(degrees) 00' W, 69.00'; thence N 59(degrees) 47'
     19" W, 91.42'; thence N 90(degrees) 00' W, 64.67'; thence N 0(degrees) 00'
     W, 57.54' to the point of beginning; said land being 0.72 (plus or minus)
     acres;

     (collectively, the "Unimproved Land"); less, in each case, any structures
     constructed and leased pursuant to a Lease Agreement dated July 1, 1977,
     and recorded in Deed Book 550 at Pages 51-94 (as amended to date, the "1977
     Lease") under which Lessor leased to Georgia Kraft Company ("Georgia
     Kraft") a parcel of land in Russell County, Alabama as more particularly
     described in Exhibit A to the Lease (the "1977 Land"), together with
     certain items of equipment described in Exhibit B to the 1977 Lease
     (Georgia Kraft has assigned its interest in the 1977 Lease to Mead Coated
     Board, Inc.);

                                      -17-
<PAGE>

together with the following easements:

          (a) An easement and right for pedestrian and vehicular traffic to use
     all present and future walks, railroads, roads, driveways and docks upon
     the Board Premises (the 1977 Land less and except the 1988 Land) in order
     to provide all necessary or convenient ingress or egress between the
     Unimproved Land and railroads, public roads and highways and the
     Chattahoochee River and to permit passage between the Unimproved Land and
     the Board Premises;

          (b) An easement and right for the passage of pedestrians and vehicles
     and for the construction, erection, installation, operation, maintenance,
     renewal, replacement and use of material conveying systems, including
     without limitation pipelines, through any part of the Board Premises
     necessary or convenient in order to assure the passage of equipment, raw
     materials, items in the process of manufacture, and finished products from
     the Unimproved Land to the Board Premises, including without limitation
     such rights and easements as are necessary for the movement of personnel,
     vehicles and materials among and between the various parcels of land
     comprising the Board Premises in order to permit and facilitate the
     operation of the Project;

          (c) An easement and right to erect, install, construct, maintain,
     renew, replace and use on, over and under any part of the Board Premises,
     such pipes, conduits, and wires as are necessary or convenient to insure
     access to and an adequate system for or supply of gas, oil, steam,
     compressed air, process and space heat, water, fire protection, sewage and
     industrial waste disposal, electricity, communications, instrumentation and
     control, and other similar facilities to the Unimproved Land and the
     Project including, without limitation, the right to make connections with
     machinery, equipment, pipes, conduits and wires, structures and other
     improvements and appurtenances thereto, on the Board Premises; and

          (d) An easement and right to create and maintain upon the Board
     Premises encroachments of equipment, structures or other improvements which
     will be included on the Unimproved Land and within the Project as presently
     planned, and any similar replacements or substitutions of portions of the
     Project for as long as any such equipment, structures or other improvements
     remain standing, including without limitation the rights of lateral or
     party wall support, and to connect any such equipment, structure or other
     improvements to any structure or improvement on the Board Premises;

                                      -18-
<PAGE>

but subject to the following easements over the Unimproved Land in favor of the
Board Premises:

          (a) An easement and right for pedestrian and vehicular traffic to use
     all present and future walks, railroads, roads, driveways and docks upon
     the Unimproved Land in order to provide all necessary or convenient ingress
     and egress among and between all portions of the Board Premises and between
     the Board Premises and the Unimproved Land, including without limitation
     portions on which additional improvements may be erected, and railroads,
     public works and highways and the Chattahoochee River and to permit passage
     among and between the various parcels of land comprising the Board
     Premises;

          (b) An easement and right for the passage of pedestrians, vehicles,
     and for the construction, installation, operation, maintenance, renewal,
     replacement and use of material conveyance systems, including without
     limitation, pipelines, through any part of the Unimproved Land necessary or
     convenient in order to assure the passage of equipment, and finished
     products from one portion of the Board Premises to another or between the
     Board Premises and the Unimproved Land, including, without limitation such
     rights and easements as are necessary for the movement of personnel,
     vehicles and material among and between the various parcels of land
     comprising the Board Premises in order to permit and facilitate the
     operation of any facilities located on the Board Premises;

          (c) An easement and right to erect, install, construct, maintain,
     renew, replace and use on, over and under any part of the Unimproved Land,
     such pipes, conduits, and wires and appurtenances as are necessary or
     convenient to assure access to and an adequate system for or supply of gas,
     oil, steam, compressed air, process and space heat, water, fire protection,
     sewage and industrial waste disposal, electricity, communications,
     instrumentation and control, and other similar facilities to the Board
     Premises, including without limitation, the right to make connections with
     machinery, equipment, pipes, conduits and wires, structures and other
     improvements and appurtenances thereto, on the Unimproved Land; and

          (d) An easement and right to maintain any present equipment,
     structures or other improvements included within the facilities presently
     located on the Board Premises as encroachments upon the Unimproved Land as
     long as any such equipment, structures or other improvements remain
     standing,

                                      -19-
<PAGE>

     and to construct and maintain similar encroachments on the Unimproved Land
     in respect of any additional improvements constructed adjacent to the
     Unimproved Land, as long as any such additional improvements remain
     standing, including without limitation the rights of lateral or party wall
     support, and to connect such additional improvements to any structure or
     any improvements on the Unimproved Land.

                                      -20-
<PAGE>

                             CONSENT OF BONDHOLDER
                             ---------------------

          MEAD COATED BOARD, INC., as holder of all of the outstanding
Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1988A
of the Industrial Board of the City of Phenix City, Alabama (the "Board"),
hereby consents to the execution and delivery of the foregoing Fifth Amendment
To Lease Agreement dated as of October 1, 1989, between the Board and Mead
Coated Board, Inc., amending the Lease Agreement, dated as of December 1, 1988,
as amended by a First Amendment To Lease Agreement dated as of March 1, 1989, a
Second Amendment to Lease Agreement dated as of April 1, 1989, a Third Amendment
To Lease Agreement dated as of June 1, 1989 and a Fourth Amendment To Lease
Agreement dated as of July 1, 1989, between the Board and Mead Coated Board,
Inc. and directs AmSouth Bank N.A., as Trustee, to consent to the execution
and delivery of the same.

          IN WITNESS WHEREOF, Mead Coated Board, Inc. has caused this Consent of
Bondholder to be executed in its name and behalf as of December 1, 1989.

                                   MEAD COATED BOARD, INC.

                                   By: /s/
                                       -------------------------------
                                       Vice President

                                      -21-
<PAGE>

                              CONSENT OF TRUSTEE
                              ------------------

          AMSOUTH BANK N.A., as Trustee under the Trust Indenture dated as of
December 1, 1988, as supplemented by a First Supplemental Trust Indenture dated
as of March 1, 1989, a Second Supplemental Trust Indenture dated as of April 1,
1989, a Third Supplemental Trust Indenture dated as of June 1, 1989 and a Fourth
Supplemental Trust Indenture dated as of July 1, 1989, from the Industrial
Development Board of the City of Phenix City, Alabama (the "Board"), hereby
consents to the execution and delivery of the foregoing Fifth Amendment To Lease
Agreement, dated as of October 1, 1989, between the Board and Mead Coated Board,
Inc., amending the Lease Agreement, dated as of December 1, 1988, as amended by
a First Amendment To Lease Agreement dated as of March 1, 1989, a Second
Amendment To Lease Agreement dated as of April 1, 1989, a Third Amendment To
Lease Agreement dated as of June 1, 1989 and a Fourth Amendment To Lease
Agreement dated as or July 1, 1989, between the Board and Mead Coated Board,
Inc.

          IN WITNESS WHEREOF, AmSouth Bank N.A. has caused this Consent of
Trustee to be executed in its name and behalf as of December l, 1989.

                                       AMSOUTH BANK N.A., as Trustee

                                       By: /s/
                                           ----------------------------------
                                           Title:  Assistant Vice President
                                                   and Corporate Trust Officer

                                      -22-
<PAGE>

                                SIXTH AMENDMENT
                                ---------------
                                      TO
                                      --
                                LEASE AGREEMENT
                                ---------------

          THIS SIXTH AMENDMENT TO LEASE AGREEMENT (the "Amendment") is made and
entered into as of May 1, 1990, by and between THE INDUSTRIAL DEVELOPMENT BOARD
OF THE CITY OF PHENIX CITY, ALABAMA (the "Board"), a public body corporate and
politic duly organized and existing under the Constitution and laws of the State
of Alabama, and MEAD COATED BOARD, INC., a Delaware corporation (the
"Company").

                                R E C I T A L S
                                ---------------

          The Board has previously issued and sold $85,000,000 in aggregate
principal amount of The Industrial Development Board of the City of Phenix City,
Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series
1988A (the "Series 1988A Bonds"); $43,000,000 in aggregate principal amount of
The Industrial Development Board of the City of Phenix City, Alabama Industrial
Development Revenue Bonds (Mead Coated Board Project), Series 1989A (the "Series
1989A Bonds"); $45,000,000 in aggregate principal amount of The Industrial
Development Board of the City of Phenix City, Alabama Industrial Development
Revenue Bonds (Mead Coated Board Project), Series 1989B (the "Series 1989B
Bonds"); $37,000,000 in aggregate principal amount of The Industrial Development
Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds
(Mead Coated Board Project), Series 1989C (the "Series 1989C Bonds");
$40,000,000 in aggregate principal amount of The Industrial Development Board of
the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead
Coated Board Project), Series 1989D (the "Series 1989D Bonds") and $49,667,074
of The Industrial Development Board of the City of Phenix City, Alabama
Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989E
(the "Series 1989E Bonds") pursuant to a Trust Indenture dated as of December 1,
1988 (the "Original Indenture"), as supplemented by a First Supplemental Trust
Indenture dated as of March 1, 1989, a Second Supplemental Trust Indenture dated
as of April 1, 1989, a Third Supplemental Trust Indenture dated as of June 1,
1989, a Fourth Supplemental Trust Indenture dated as of July 1, 1989 and a Fifth
Supplemental Trust Indenture dated as of December 1, 1989 (collectively, the
"Indenture"), from the Board to AmSouth Bank N.A., as Trustee (the "Trustee").

          The Board has used the proceeds of the sale of the Series 1988A Bonds,
the Series 1989A Bonds, the Series 1989B Bonds, the Series 1989C Bonds, the
Series 1989D Bonds and the Series 1989E Bonds for the payment of outstanding
industrial
<PAGE>

development temporary borrowing notes (the "Notes") issued by the Board for the
purpose of funding the acquisition, construction and installation of a coated
natural kraft mill and related facilities (the "Project") in connection with
certain industrial facilities located near Phenix City, Alabama. The Project is
owned by the Board and leased to the Company pursuant to a Lease Agreement dated
as of December 1, 1988, as amended by the First Amendment To Lease Agreement
dated as of March 1, 1989, the Second Amendment To Lease Agreement dated as of
April 1, 1989, the Third Amendment To Lease Agreement dated as of June 1, 1989,
the Fourth Amendment To Lease Agreement dated as of July 1, 1989 and the Fifth
Amendment To Lease Agreement dated as of December 1, 1989 (collectively, the
"Agreement"). The Agreement obligates the Company to make rental payments in
such amounts and at such times as will provide for the payment of the principal
and interest on the Series 1988A Bonds, the Series 1989A Bonds, the Series 1989B
Bonds, the Series 1989C Bonds, the Series 1989D Bonds and the Series 1989E Bonds
as the same becomes due and payable.

          Under Article IV of the Original Indenture, the Board is permitted to
issue Additional Bonds (as defined in the Original Indenture) in order to pay
additional Notes issued by the Board in connection with the Project. In that
connection, the Board is issuing $170,000,000 in aggregate principal amount of
Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1990A
(the "Series 1990A Bonds"), pursuant to the Indenture as supplemented by a Sixth
Supplemental Trust Indenture dated as of May 1, 1990 (the "Sixth Supplemental
Indenture") from the Board to the Trustee. The Indenture as supplemented by the
Sixth Supplemental Indenture is hereinafter referred to as the "Indenture".

          NOW, THEREFORE, as contemplated by Section 4.5 of the Agreement and in
accordance with Section 1501 of the Original Indenture, the parties hereto
desire to amend the Agreement as follows:

                                   ARTICLE I

                     PROVISIONS FOR AMENDING THE AGREEMENT
                     -------------------------------------

          Section 1.1 Amendment of Section 5.3 of the Aqreement. The term
          ----------- -----------------------------------------
"Bonds" as used in Section 5.3 of the Agreement shall include the Series 1990A
Bonds.

          Section 1.2 Terms of Agreement Applicable to Series 1990A Bonds. All
          ----------- ---------------------------------------------------
terms, conditions, representations and covenants set forth in the Agreement
applicable to the Series 1988A Bonds and not specifically otherwise provided for
in the Indenture, any supplements thereto or the Agreement, shall apply with
full force and effect to the Series 1990A Bonds. Without

                                      -2-
<PAGE>

limiting the foregoing, all references in the Agreement to the "Bonds" shall be
deemed to mean the Series 1988A Bonds, the Series 1989A Bonds, the Series 1989B
Bonds, the Series 1989C Bonds, the Series 1989D Bonds, the Series 1989E Bonds
and the Series 1990A Bonds, including without limitation the provisions of
Section 5.3 of the Agreement relating to the payment of rents.

          Section 1.3 Representations and Warranties by the Board. The Board
          ----------- -------------------------------------------
makes the following representations and warranties as the basis for the
undertakings on its part herein contained:

          (a) Organization and Authority. The Board is a public corporation
              --------------------------
     duly organized and validly existing under the provisions of the Act by
     authority of a resolution adopted by the Board of Commissioners of the
     City on June 14, 1960 and a Certificate of Incorporation duly filed for
     record on October 17, 1960, in the office of the Judge of Probate of
     Russell County, Alabama, which Certificate of Incorporation has not been
     amended or been revoked and is of full force and effect. The Board has all
     requisite power and authority under the Act (1) to issue the Series 1990A
     Bonds, (2) to use the proceeds thereof to refund the Notes issued to pay
     the cost to acquire, construct and install the Project, (3) to own, lease,
     encumber and dispose of the Project, and (4) to enter into, and perform its
     obligations under, the Indenture, the Agreement and this Amendment. This
     Amendment and the Sixth Supplemental Indenture have been duly authorized,
     executed and delivered by the Board and are legal, valid and binding
     agreements enforceable against the Board in accordance with their
     respective terms.

          (b) Pending Litigation. There are no actions, suits, proceedings,
              ------------------
     inquiries or investigations pending, or to the knowledge of the Board
     threatened, against or affecting the Board in any court or before any
     governmental authority or arbitration board or tribunal, which adversely
     affect the validity or enforceability of the Series 1990A Bonds, the
     Indenture, the Agreement, this Amendment, or any agreement or instrument to
     which the Board is a party and which is used or contemplated for use in the
     consummation of the transactions contemplated hereby or thereby.

          (c) Issue, Sale and Other Transactions Are Legal and Authorized. The
              -----------------------------------------------------------
     issue and sale of the Series 1990A Bonds and the execution and delivery by
     the Board of the Sixth Supplemental Indenture and this Amendment and the
     compliance by the Board with all of the provisions of each thereof and of
     the Series 1990A Bonds (i) are within the purposes, powers and
     authority of the

                                      -3-
<PAGE>

     Board, (ii) to the best of the knowledge of the Board, have been done in
     full compliance with the provisions of the Act, are legal and will not
     conflict with or constitute on the part of the Board a violation of or a
     breach of or default under, or result in the creation of any lien or
     encumbrance (other than Permitted Encumbrances under the Agreement) upon
     any property of the Board under the provisions of, its certificate of
     incorporation or Bylaws, or any indenture, mortgage, deed of trust, note
     agreement or other agreement or instrument to which the Board is a party or
     by which the Board is bound, or any license, judgment, decree, law,
     statute, order, rule or regulation of any court or governmental agency or
     body having jurisdiction over the Board or any of its activities or
     properties, and (iii) have been duly authorized by all necessary corporate
     action on the part of the Board.

          (d) Governmental Consents. Neither the nature of the Board nor any of
              ---------------------
     its activities or properties, nor any relationship between the Board and
     any other person, nor any circumstance in connection with the offer, issue,
     sale or delivery of any of the Series 1990A Bonds is such as to require the
     consent, approval or authorization of, or the filing, registration or
     qualification with, any governmental authority on the part of the Board in
     connection with the execution, delivery and performance of the Sixth
     Supplemental Indenture and this Amendment, or the offer, issue, sale or
     delivery of the Series 1990A Bonds, other than (i) the filing with the
     Alabama Securities Commission of the notification of the Board's intention
     to issue the Series 1990A Bonds required by Act No. 586 enacted at the 1978
     Regular Session of the Legislature of the State and the issuance by the
     Director of the Alabama Securities Commission of such Certificate of
     Notification as may be required by said Act, and (ii) the due filing and
     recording of this Amendment, the Sixth Supplemental Indenture and the
     financing statements covering the security interests created hereunder and
     under the Indenture. The Board has filed the notification referred to in
     (i) of the preceding sentence and the Director of the Alabama Securities
     Commission has issued a Certificate of Notification applicable to the
     Series 1990A Bonds, which Certificate of notification has not been revoked
     or rescinded and is in full force and effect.

          (e) No Defaults. The Board is not in default under the Act or under
              -----------
     its Certificate of Incorporation or Bylaws or any other agreement or
     instrument to which it is a party or by which is bound.

                                      -4-
<PAGE>

          Section 1.4 Representations and Warranties by the Company. The Company
          ----------- ---------------------------------------------
makes the following representations and warranties as the basis for the
undertakings on its part herein contained:

          (a) The Company (i) is a corporation duly organized, validly existing
     and in good standing under the laws of the State of Delaware, (ii) has all
     requisite corporate power and authority to carry on its business as now
     being conducted and as presently proposed to be conducted, and (iii) has
     duly qualified and is authorized to do business and is in good standing as
     a foreign corporation in the State.

          (b) The Company has the corporate power and has been duly authorized
     to enter into this Amendment and to perform all of its obligations
     hereunder.

          (c) The willingness of the Board to issue the Series 1990A Bonds for
     purposes of financing costs of acquiring, constructing, and installing the
     Project, and to lease the Project to the Company, has induced the Company
     to locate the Project within the State of Alabama and, more particularly,
     within 25 miles of the City.

          (d) The Company is not subject to any contractual or other limitation
     or provision of any nature whatsoever which in any material way limits,
     restricts or prevents the Company from entering into this Amendment, or
     performing any of its obligations hereunder; and the execution and delivery
     of this Amendment, the consummation of the transactions contemplated
     hereby, and the fulfillment of or compliance with the terms and conditions
     of this Amendment will not conflict with or result in a breach of the
     terms, conditions or provisions of any restriction, agreement or instrument
     to which the Company is a party or by which it is bound, or constitute a
     default under any of the foregoing.

          (e) No event has occurred and no condition exists that would
     constitute an "Event of Default" under the Agreement or this Amendment
     which, with the lapse of time or with the giving of notice or both, would
     become an "Event of Default" under the Agreement or this Amendment.

          (f) To the best of its knowledge and belief, the Company is not in
     violation of any laws, ordinances, governmental rules or regulations to
     which it is subject and has not failed to obtain any licenses, permits,

                                      -5-
<PAGE>

     franchises or other governmental authorizations necessary to the ownership
     of its properties or to the conduct of its business, which violation or
     failure to obtain would reasonably be expected to materially and adversely
     affect the abililty of the Company to perform its obligations under this
     Amendment.

                                  ARTICLE II

                                 MISCELLANEOUS
                                 -------------

          Section 2.1 Agreement and Amendment as One Document. As amended by
          ----------- ---------------------------------------
this Amendment, the Agreement is in all respects ratified and confirmed and the
Agreement and this Amendment shall be read, taken and construed as one and the
same instrument.

          Section 2.2 References. All references herein or in the Agreement to
          ----------- ----------
any Article, Section or provision of the Agreement shall refer to any such
Article, Section or provision as hereby amended.

          Section 2.3 Counterparts. This Amendment may be simultaneously
          ----------- ------------
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.

          Section 2.4 Captions. The captions or headings in this Amendment are
          ----------- --------
for convenience only and in no way define, limit or describe the scope or intent
of any provision of this Amendment.

          Section 2.5 Applicable Law. This Amendment shall be construed in
          ----------- --------------
accordance with the laws of the State of Alabama.

          IN WITNESS WHEREOF, the Board and the Company have caused this
Amendment to be executed in their respective corporate names as of the date
first written above.

                                       THE INDUSTRIAL DEVELOPMENT BOARD OF
                                       THE CITY OF PHENIX CITY, ALABAMA

                                       By: /s/ Kenneth A. Roberts
                                           ------------------------------------
                                           Chairman

                                       MEAD COATED BOARD, INC.

                                       By: /s/ W. D. Bloebaum, Jr.
                                           -----------------------------------
                                           Title: Treasurer

                                      -6-
<PAGE>

                            ACKNOWLEDGMENT OF BOARD

STATE OF ALABAMA

COUNTY OF RUSSELL

          I, Sydney S. Smith, a Notary Public in and for said County in said
State, hereby certify that Kenneth A. Roberts, whose name as Chairman of the
Board of Directors of THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX
CITY, ALABAMA, a public corporation and instrumentality under the laws of the
State of Alabama, is signed to the foregoing instrument and who is known to me,
acknowledged before me on this day that, being informed of the contents of the
said instrument, he, as such officer and with full authority, executed the same
voluntarily for and as the act of said public corporation.

          GIVEN under my hand and seal of office, this _____ day of June, 1990.

                                            /s/ Sydney S. Smith
                                            ----------------------------------
                                                        Notary Public

(SEAL)
                                            My commission expires: 2-25-92
                                                                  ------------

                                      -7-
<PAGE>

                           ACKNOWLEDGMENT OF COMPANY

STATE OF OHIO

COUNTY OF MONTGOMERY

          I, Charity K. Burgess, Notary Public in and for said County in said
State, hereby certify that William D. Bloebaum, Jr., whose name as Treasurer of
MEAD COATED BOARD, INC., a corporation organized and existing under the laws of
the State of Delaware, is signed to the foregoing instrument and who is known to
me, acknowledged before me on this day that, being informed of the contents of
the said instrument, he, as such officer and with full authority, executed the
same voluntarily for and as the act of said corporation.

          GIVEN under my hand and seal of office, this 24th day of May, 1990.

                                        /s/ Charity K. Burgess
                                        -------------------------------
                                                 Notary Public

(SEAL)                                  My commission expires: 8-15-94
                                                               --------

                                      -8-
<PAGE>

                                  EXHIBIT "A"

                                      to

                  Sixth Amendment To Lease Agreement between
                      THE INDUSTRIAL DEVELOPMENT BOARD OF
                       THE CITY OF PHENIX CITY, ALABAMA
                                     and
                           MEAD COATED BOARD, INC.
                            dated as of May 1, 1990

                          DESCRIPTION OF PROJECT LAND
                          ---------------------------

The Project Land includes the following property:

              NEW RECLAIM PLATE FEED AND CONVEYOR AREA (C-28511),
              ---------------------------------------------------
                CHIPS CONVEYOR TO SCREEN HOUSE AREA (C-28513),
                ----------------------------------------------
                     AND CHIPS SCREEN HOUSE AREA (C-28515)
                     -------------------------------------

          All that portion of land and structures lying 13' on each side of the
     following described centerline and also including any specifically noted
     areas which extend beyond said centerline strip:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State Georgia Coordinate System; and
     lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama;
     thence N 63(degrees) 51' 31" E, 790.90' to the point of beginning; thence N
     90(degrees) 00' W, 82.00; thence S 0' 00" W, 8.75'; thence N 90(degrees)
     00' W, 232.22'; thence S 15(degrees) 17' 15" E, 479.72' to a point on the
     northmost side of a rectangular area (Chip Screen House) which parallels
     last said course and is 75.0' north to south (7.00' of which is west of
     last said course) by 49.0' east to west; said rectangular area being the
     point of ending; said land being 0.56+ acres;

          CHIPS CONVEYOR TO PINE STORAGE AREA (C-28538)
          ---------------------------------------------

          All that portion of land and structures lying 14' on each side of the
     following described centerline:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System; and
     lying in Section 28, T 14 N, R

                                      -9-
<PAGE>

     30 E, County of Russell, State of Alabama; thence N 45(degrees) 24' 34" E,
     692.79' to the point of beginning; thence S 36(degrees) 51' 02" E, 454.94'
     to the point of ending; said land being 0.29 (plus or minus) acres;

            CHIPPER DISCHARGE CONVEYOR AREA (C-28536) AND CHIPS TO
            ------------------------------------------------------
                   HARDWOOD STORAGE CONVEYOR AREA (C-28537)
                   ----------------------------------------

          All that portion of land and structures lying 14' on each side of the
     following described centerline and also including any specifically noted
     areas which extend beyond said centerline strip:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System; and
     lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama;
     thence N 71(degrees)34' 06" E, 600.24' to the point of beginning; thence S
     71(degrees) 04' 32" E, 640.91'; thence N 50(degrees) 08' 32" E, 61.59' to
     the point of ending; said land being 0.45 (plus or minus) acres;

                   CHIP CONVEYOR TO DIGESTER AREA (C-28521),
                   -----------------------------------------
                  CHIP CONVEYOR TO SURGE BIN AREA (C-28519),
                  ------------------------------------------
                         AND CHIP SILO AREA (C-28520)
                         ----------------------------

          All that portion of land and structures lying 14' on each side of the
     following described centerline and also including any specifically noted
     areas which extend beyond said centerline strip:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System; and
     lying in Section 28, T 14 N, R 30 E, County of Russell, State of Alabama;
     thence S 48(degrees) 21' 59" W, 84.29' to the point of beginning; thence S
     56(degrees) 07' 32" E, 319.22' to the center of a circular area (Chip Silo)
     with a radius of 15.00' and a central angle of 360(degrees) 00' bounded by
     a rectangular structure 32' -6" (plus or minus) East-West and 32' -6" (plus
     or minus) North-South; thence N 82(degrees) 51' 32" E, 355.48' to the point
     of ending; said land being 0.45 (plus or minus) acres;

                  NEW WASHER FACILITY AND BATCH DIGESTER AREA
                  -------------------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

                                     -10-
<PAGE>

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System;
     thence N 48(degrees) 06' 06" W, 35.94' to the point of beginning (N
     792,374.0, E 234,473.25); thence S 0(degrees) 00' W, 133.50'; thence N
     90(degrees) 00' W, 103.39'; thence S 0(degrees) 00' W, 103.50'; thence
     90(degrees) 00' W, 48.00'; thence N 0(degrees) 00' W, 55.75'; thence N
     90(degrees) 00' W, 80.00'; thence S 0(degrees) 00' W, 42.75'; thence N
     90(degrees) 00' W, 63.00'; thence N 0(degrees) 00' W, 110.00'; thence N
     45(degrees) 00' E, 55.00'; thence N 0(degrees) 00' W, 23.11'; thence N
     90(degrees) 00' E, 23.00'; thence N 0(degrees) 00' W, 23.25'; thence N
     90(degrees) 00' E, 170.00'; thence N 0(degrees) 00' W, 28.75'; thence N
     90(degrees) 00' E, 62.50' to the point of beginning; said area being 1.01
     (plus or minus) acres;

            MILL WATER COOLING TOWER AND NEW REACTOR CLARIFIER AREA
            -------------------------------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System;
     thence S 48(degrees) 46' 07" W, 591.71' to the point of beginning (N
     791,960.0 E 234,055.0); thence S 0(degrees) 00' W, 170.00'; thence N
     90(degrees) 00' W, 111.00; thence N 0(degrees) 00' W, 170.00'; thence N
     90(degrees) 00' E, 111.00' to the point of beginning; said land being 0.43
     (plus or minus) acres;

                       TURPENTINE RECOVERY FACILITY AREA
                       ---------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System;
     thence S 63(degrees) 26' 06" W, 11.18' to the point of beginning (N
     792,345.0, E 234,490.0); thence N 0(degrees) 00" W, 30.00'; thence N
     90(degrees) 00" E, 20.00'; thence S 0(degrees) 00' W, 30.00'; thence N
     90(degrees) 00' W, 20.00' to the point of beginning; said land being 0.01
     (plus or minus) acres;

                                     -11-
<PAGE>

          LOG STORAGE AREA (C-28522), LOG FEED DECKS AREA (C-28523),
          ---------------------------------------------------------
           DRUM AREA (C-28525), VIBRATING CONVEYORS AREA (C-28532),
           --------------------------------------------------------
             CHIPPER POWER FEED ROLLS AREA (C-28528), CHIP BLDG.
             ---------------------------------------------------
          AREA (C-28535), AND BARK COLLECTING CONVEYOR AREA (C-28531)
          -----------------------------------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System;
     thence N 80(degrees) 22' 54" E, 879.79' to the point of beginning; thence N
     0(degrees) 00' W, 326.00'; thence N 90(degrees) 00' E, 711.08'; thence S
     0(degrees) 00' W, 326.00'; thence N 90(degrees) 00' W, 328.00'; thence S
     0(degrees) 00' W, 188.00'; thence N 90(degrees) 00' W, 50.00'; thence N
     0(degrees) 00' W, 188.00'; thence N 90(degrees) 00' W, 333.08' to the point
     of beginning; said land being 5.54 (plus or minus) acres;

                        AREA "B" MAINTENANCE SHOP AREA
                        ------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System;
     thence S 11(degrees) 04' 57" W, 197.69' to the point of beginning (N
     792,156.0, E 234,462.0); thence S 0(degrees) 00" W, 82.00'; thence N
     90(degrees) 00" W, 52.00'; thence N 0(degrees) 00' W, 82.00'; thence N
     90(degrees) 00' E, 52.00 to the point of beginning; said land being 0.10
     (plus or minus) acres;

                       NEW LIM KILN/RECAUSTICIZING AREA
                       --------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 793,150.19, E
     233,250.02, of the West Zone of the State of Georgia Coordinate System;
     thence N 70(degrees) 51' 29" E, 267.79' to the point of beginning
     (793,238.0 E 233,503.0); thence N 90(degrees) 00' E, 399.23'; thence S
     0(degrees) 00' W, 50.00'; thence N 90(degrees) 00' E, 45.00'; thence S
     0(degrees) 00' W, 78.00'; thence N 90(degrees) 00' W, 444.23'; thence N
     0(degrees) 00' W, 128.00' to the point of beginning; said land being 1.25
     (plus or minus) acres;

                                     -12-
<PAGE>

                          NO. 2 RECOVERY BOILER AREA
                          --------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 793,150.19, E
     233,250.02, of the West Zone of the State of Georgia Coordinate System;
     thence S 40(degrees) 16' 34" E, 439.77' to the point of beginning (N
     792,814.67, E 233,534.32'); thence N 90(degrees) 00' E, 36.30'; thence N
     0(degrees) 00' W, 20.50'; thence N 90(degrees) 00' E, 72.26'; thence N
     0(degrees) 00' W, 14.83'; thence N 90(degrees) 00' E, 110.50'; thence S
     0(degrees) 00' W, 42.58'; thence N 90(degrees) 00' E, 26.00'; thence S
     0(degrees) 00' W, 81.00'; thence N 90(degrees) 00' W, 51.00'; thence N
     0(degrees) 00" W, 25.12'; thence N 90(degrees) 00' W, 85.50'; thence N
     00(degrees) 00' W, 8.63'; thence N 90(degrees) 00' W, 72.26'; thence N
     90(degrees) 00' W, 20.50'; thence N 0(degrees) 00' W, 36.30'; thence N
     0(degrees) 00' W, 34.00' to the point of beginning; said land being 0.47
     (plus or minus) acres;

                      NEW EVAPORATORS AND NEW TANKS AREA
                      ----------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 793,150.19, E
     233,250.02, of the West Zone of the State of Georgia Coordinate System;
     thence S 62(degrees) 01' 33" E, 637.83' to the point of beginning (N
     792,851.0, E 233,813.33); thence N 90(degrees) 00' E, 246.67'; thence along
     an arc South and East 53.41' having a radius of 34.00' with a central angle
     of 90(degrees) 00'; thence S 0(degrees) 00' W, 135.33'; thence along an arc
     South and West 53.41' having a radius of 34.00' with a central angle of
     90(degrees) 00'; thence N 90(degrees) 00' W, 34.00'; thence N 0(degrees)
     00' W, 99.79'; thence N 90(degrees) 00' W, 69.00'; thence N 59(degrees) 47'
     19" W, 91.42'; thence N 90(degrees) 00' W, 64.67'; thence N 0(degrees) 00'
     W, 57.54' to the point of beginning; said land being 0.72 (plus or minus)
     acres;

     (collectively, the "Unimproved Land"); less, in each case, any structures
     constructed and leased pursuant to a Lease Agreement dated July 1, 1977,
     and recorded in Deed Book 550 at Pages 51-94 (as amended to date, the "1977
     Lease") under which Lessor leased to Georgia Kraft Company ("Georgia
     Kraft") a parcel of land in Russell County, Alabama as more particularly
     described in Exhibit A to the Lease (the "1977 Land"), together with
     certain items of equipment described in Exhibit B to the 1977 Lease
     (Georgia Kraft has assigned its interest in the 1977 Lease to Mead Coated
     Board, Inc.);

                                     -13-
<PAGE>

together with the following easements:

          (a)  An easement and right for pedestrian and vehicular traffic to
     use all present and future walks, railroads, roads, driveways and docks
     upon the Board Premises (the 1977 Land less and except the 1988 Land) in
     order to provide all necessary or convenient ingress or egress between the
     Unimproved Land and railroads, public roads and highways and the
     Chattahoochee River and to permit passage between the Unimproved Land and
     the Board Premises;

          (b)  An easement and right for the passage of pedestrians and vehicles
     and for the construction, erection, installation, operation, maintenance,
     renewal, replacement and use of material conveying systems, including
     without limitation pipelines, through any part of the Board Premises
     necessary or convenient in order to assure the passage of equipment, raw
     materials, items in the process of manufacture, and finished products from
     the Unimproved Land to the Board Premises, including without limitation
     such rights and easements as are necessary for the movement of personnel,
     vehicles and materials among and between the various parcels of land
     comprising the Board Premises in order to permit and facilitate the
     operation of the Project;

          (c)  An easement and right to erect, install, construct, maintain,
     renew, replace and use on, over and under any part of the Board Premises,
     such pipes, conduits, and wires as are necessary or convenient to insure
     access to and an adequate system for or supply of gas, oil, steam,
     compressed air, process and space heat, water, fire protection, sewage and
     industrial waste disposal, electricity, communications, instrumentation and
     control, and other similar facilities to the Unimproved Land and the
     Project including, without limitation, the right to make connections with
     machinery, equipment, pipes, conduits and wires, structures and other
     improvements and appurtenances thereto, on the Board Premises; and

          (d)  An easement and right to create and maintain upon the Board
     Premises encroachments of equipment, structures or other improvements which
     will be included on the Unimproved Land and within the Project as presently
     planned, and any similar replacements or substitutions of portions of the
     Project for as long as any such equipment, structures or other improvements
     remain standing, including without limitation the rights of lateral or
     party wall support, and to connect any such equipment, structure or other
     improvements to any structure or improvement on the Board Premises;

                                     -14-
<PAGE>

but subject to the following easements over the Unimproved Land in favor of the
Board Premises:

          (a)  An easement and right for pedestrian and vehicular traffic to use
     all present and future walks, railroads, roads, driveways and docks upon
     the Unimproved Land in order to provide all necessary or convenient ingress
     and egress among and between all portions of the Board Premises and between
     the Board Premises and the Unimproved Land, including without limitation
     portions on which additional improvements may be erected, and railroads,
     public works and highways and the Chattahoochee River and to permit passage
     among and between the various parcels of land comprising the Board
     Premises;

          (b)  An easement and right for the passage of pedestrians, vehicles,
     and for the construction, installation, operation, maintenance, renewal,
     replacement and use of material conveyance systems, including without
     limitation, pipelines, through any part of the Unimproved Land necessary or
     convenient in order to assure the passage of equipment, and finished
     products from one portion of the Board Premises to another or between the
     Board Premises and the Unimproved Land, including, without limitation such
     rights and easements as are necessary for the movement of personnel,
     vehicles and material among and between the various parcels of land
     comprising the Board Premises in order to permit and facilitate the
     operation of any facilities located on the Board Premises;

          (c)  An easement and right to erect, install, construct, maintain,
     renew, replace and use on, over and under any part of the Unimproved Land,
     such pipes, conduits, and wires and appurtenances as are necessary or
     convenient to assure access to and an adequate system for or supply of gas,
     oil, steam, compressed air, process and space heat, water, fire protection,
     sewage and industrial waste disposal, electricity, communications,
     instrumentation and control, and other similar facilities to the Board
     Premises, including without limitation, the right to make connections with
     machinery, equipment, pipes, conduits and wires, structures and other
     improvements and appurtenances thereto, on the Unimproved Land; and

          (d)  An easement and right to maintain any present equipment,
     structures or other improvements included within the facilities presently
     located on the Board Premises as encroachments upon the Unimproved Land as
     long as any such equipment, structures or other improvements remain
     standing,

                                     -15-
<PAGE>

and to construct and maintain similar encroachments on the Unimproved Land in
respect of any additional improvements constructed adjacent to the Unimproved
Land, as long as any such additional improvements remain standing, including
without limitation the rights of lateral or party wall support, and to connect
such additional improvements to any structure or any improvements on the
Unimproved Land.

                                     -16-
<PAGE>

                             CONSENT OF BONDHOLDER
                             ----------------------

          MEAD COATED BOARD, INC., as holder of all of the outstanding
Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1988A
of the Industrial Board of the City of Phenix City, Alabama (the "Board"),
hereby consents to the execution and delivery of the foregoing Sixth Amendment
To Lease Agreement dated as of May 1, 1990, between the Board and Mead Coated
Board, Inc., amending the Lease Agreement, dated as of December 1, 1988, as
amended by a First Amendment To Lease Agreement dated as of March 1, 1989, a
Second Amendment To Lease Agreement dated as of April 1, 1989, a Third Amendment
To Lease Agreement dated as of June 1, 1989, a Fourth Amendment To Lease dated
as of July 1, 1989 and a Fifth Amendment To Lease Agreement dated as of December
1, 1989 between the Board and Mead Coated Board, Inc. and directs AmSouth Bank
N.A., as Trustee, to consent to the execution and delivery of the same.

          IN WITNESS WHEREOF, Mead Coated Board, Inc. has caused this Consent of
Bondholder to be executed in its name and behalf as of May 1, 1990.

                                        MEAD COATED BOARD, INC.

                                        By: /s/ W.D. Bloebaum, Jr.
                                            -------------------------------
                                            Title:

                                      -17-
<PAGE>

                              CONSENT OF TRUSTEE

          AMSOUTH BANK N.A., as Trustee under the Trust Indenture dated as of
December 1, 1988, as supplemented by a First Supplemental Trust Indenture dated
as of March 1, 1989, a Second Supplemental Trust Indenture dated as of April 1,
1989, a Third Supplemental Trust Indenture dated as of June 1, 1989, a Fourth
Supplemental Trust Indenture dated as of July 1, 1989 and a Fifth Supplemental
Trust Indenture dated as of December 1, 1989 from the Industrial Development
Board of the City of Phenix City, Alabama (the "Board"), hereby consents to the
execution and delivery of the foregoing Sixth Amendment To Lease Agreement,
dated as of May 1, 1990, between the Board and Mead Coated Board, Inc., amending
the Lease Agreement, dated as of December 1, 1988, as amended by a First
Amendment To Lease Agreement dated as of March 1, 1989, a Second Amendment To
Lease Agreement dated as of April 1, 1989, a Third Amendment To Lease Agreement
dated as of June 1, 1989, a Fourth Amendment To Lease Agreement dated as of July
1, 1989 and a Fifth Amendment To Lease Agreement dated as of December 1, 1989
between the Board and Mead Coated Board, Inc.

          IN WITNESS WHEREOF, AmSouth Bank N.A. has caused this Consent of
Trustee to be executed in its name and behalf as of May 1, 1990.

                                       AMSOUTH BANK N.A., as Trustee

                                       By: /s/ Jeff Fink
                                             --------------------------------
                                             Title: CORPORATE TRUST OFFICER

                                      -18-
<PAGE>

                               SEVENTH AMENDMENT
                               -----------------

                                       TO
                                       --

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

          THIS SEVENTH AMENDMENT TO LEASE AGREEMENT (the "Amendment") is made
and entered into as of June 1, 1990, by and between THE INDUSTRIAL DEVELOPMENT
BOARD OF THE CITY OF PHENIX CITY, ALABAMA (the "Board"), a public body corporate
and politic duly organized and existing under the Constitution and laws of the
State of Alabama, and MEAD COATED BOARD, INC., a Delaware corporation (the
"Company").

                                R E C I T A L S
                                ---------------

          The Board has previously issued and sold $85,000,000 in aggregate
principal amount of The Industrial Development Board of the City of Phenix City,
Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series
1988A (the "Series 1988A Bonds"); $43,000,000 in aggregate principal amount of
The Industrial Development Board of the City of Phenix City, Alabama Industrial
Development Revenue Bonds (Mead Coated Board project) Series 1989A (the "Series
1989A Bonds"); $45,000,000 in aggregate principal amount of The Industrial
Development Board of the City of Phenix City, Alabama Industrial Development
Revenue Bonds (Mead Coated Board Project), Series 1989B (the "Series 1989B
Bonds"); $37,000,000 in aggregate principal amount of The Industrial Development
Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds
(Mead Coated Board project) Series 1989C (the "Series 1989C Bonds"); $40,000,000
in aggregate principal amount of The Industrial Development Board of the City of
Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board
Project), Series 1989D (the "Series 1989D Bonds"); $49,667,074 of The Industrial
Development Board of the City of Phenix City, Alabama Industrial Development
Revenue Bonds (Mead Coated Board Project), Series 1989E (the "Series 1989E
Bonds") and $170,000,000 of The Industrial Development Board of the City of
Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board
Project), Series 1990A (the "Series 1990A Bonds" ) pursuant to a Trust Indenture
dated as of December 1, 1988 (the "Original Indenture"), as supplemented by a
First Supplemental Trust Indenture dated as of March 1, 1989, a Second
Supplemental Trust Indenture dated as of April 1, 1989, a Third Supplemental
Trust Indenture dated as of June 1, 1989, a Fourth Supplemental Trust Indenture
dated as of July 1, 1989, a Fifth Supplemental Trust Indenture dated as of
December 1, 1989 and a

                                       1
<PAGE>

Sixth Supplemental Trust Indenture dated as of May 1, 1990 (collectively the
"Indenture"), from the Board to AmSouth Bank N.A., as Trustee (the "Trustee").

          The Board has used the proceeds of the sale of the Series 1988A Bonds,
the Series 1989A Bonds, the Series 1989B Bonds, the Series 1989C Bonds, the
Series 1989D Bonds, the Series 1989E Bonds and the Series 1990A Bonds for the
payment of outstanding industrial development temporary borrowing notes (the
"Notes") issued by the Board for the purpose of funding the acquisition,
construction and installation of a coated natural kraft mill and related
facilities (the "Project") in connection with certain industrial facilities
located near Phenix City, Alabama. The Project is owned by the Board and leased
to the Company pursuant to a Lease Agreement dated as of December 1, 1988, as
amended by the First Amendment To Lease Agreement dated as of March 1, 1989 the
Second Amendment To Lease Agreement dated as of April 1, 1989, the Third
Amendment To Lease Agreement dated as of June 1, 1989, the Fourth Amendment To
Lease Agreement dated as of July 1, 1989, the Fifth Amendment To Lease Agreement
dated as December 1, 1989, and the Sixth Amendment To Lease Agreement dated as
of May 1, 1990 (collectively the "Agreement"). The Agreement obligates the
Company to make rental payments in such amounts and at such times as will
provide for the payment of the principal and interest on the Series 1988A Bonds,
the Series 1989A Bonds, the Series 1989B Bonds, the Series 1989C Bonds, the
Series 1989D Bonds, the Series 1989E Bonds and the Series 1990A Bonds as the
same becomes due and payable.

          The Project is located on the real property described in Exhibit A to
the Agreement (the "Project Land"). The Company desires to amend the Agreement
to modify the description of Project Land in order to more accurately include
that land which constitutes the site of the Project. Pursuant to Section 12.5 of
the Agreement and Section 1502 of the Original Indenture, the Board is permitted
to amend the Agreement upon the mailing of notice to, and obtaining the written
consent of, the holders of not less than 2/3 in principal amount of the
outstanding Bonds.

          NOW, THEREFORE, as contemplated by Section 12.5 of the Agreement and
in accordance with Section 1502 of the Original Indenture, the parties hereto
desire to amend the Agreement as follows:

          Section 1.1 Amendment of Agreement.
          ----------- ----------------------

          (a) Exhibit A, attached to the Agreement and describing the Project
Land, is hereby amended by inserting, subsequent to the description designated
"NEW EVAPORATORS AND NEW TANKS AREA", the following:

                                      -2-

<PAGE>

                                 "LEASED LAND
                                 ------------

               A parcel of land being situated in the Northwest Quarter of
     Section 28 and the Northeast Quarter of Section 29, Township 14 North,
     Range 30 East, Russell County, Alabama and being more particularly
     described as follows:

               From the Northeast corner of Section 28, Township 14 North, Range
     30 East, run thence South 75 degrees 41 minutes West for a distance of
     5256.69 feet to the centerline intersection of Seaboard Railroad and the
     South construction road and the Point of Beginning; thence South 01 degree
     24 minutes West a distance of 294.46 feet along the centerline of said
     railroad; thence along a curve to the right having a radius of 786.50 feet
     and an arc length of 674.79 feet, being subtended by a chord of South 25
     degrees 40 minutes West for a distance of 654.28 feet along said railroad;
     thence South 52 degrees 00 minutes West for a distance of 695.08 feet along
     said railroad; thence North 00 degrees 07 minutes East for a distance of
     1313.66 feet to the centerline of the South construction road; thence South
     89 degrees 53 minutes East for a distance of 835.68 feet along said
     centerline to the Point of Beginning.

               Said property contains 18.362 acres, more or less."

          (b) Exhibit B. attached to the Agreement and summarizing the Project,
is hereby amended by inserting, subsequent to the last sentence thereof, the
following:

               "The Project may also include the acquisition of land which may
     be used by a third party for warehousing or other purposes in connection
     with the Project."

          Section 1.2. Waiver of Notice. The Company, being the holder of all of
          -----------  ----------------
the outstanding Bonds, hereby waives any notices which may be required to be
given to it pursuant to Section 1502 of the Original Indenture in connection
with this Amendment.

          Section 1.3. Aqreement and Amendment as One Document. As amended by
          -----------  ---------------------------------------
this Amendment, the Agreement is in all respects ratified and confirmed and the
Agreement and this Amendment shall be read, taken and construed as one and the
same instrument.

                                      -3-

<PAGE>

          Section 1.4. References. All references herein or in the Agreement to
          -----------  ----------
any Article, Section or provision of the Agreement shall refer to any such
Article, Section or provision as hereby amended.

          Section 1.5. Counterparts. This Amendment may be simultaneously
          -----------  ------------
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.

          Section 1.6. Captions. The captions or headings in this Amendment are
          -----------  --------
for convenience only and in no way define, limit or describe the scope or intent
of any provision of this Amendment.

          Section 1.7. Applicable Law. This Amendment shall be construed in
          -----------  --------------
accordance with the laws of the State of Alabama.

          IN WITNESS WHEREOF, the Board and the Company have caused this
Amendment to be executed in their respective corporate names as of the date
first written above.

                                        THE INDUSTRIAL DEVELOPMENT BOARD OF
                                        THE CITY OF PHENIX CITY, ALABAMA

                                        By: /s/ Kenneth A. Roberts
                                            ------------------------------------
                                            Title: Chairman

                                        MEAD COATED BOARD, INC.

                                        By: /s/ W. D. Bloebaum, Jr.
                                            ------------------------------------
                                            Title: Treasurer

                                      -4-

<PAGE>

                            ACKNOWLEDGMENT OF BOARD

STATE OF ALABAMA

COUNTY OF RUSSELL

          I, Sydney S. Smith, a Notary Public in and for said County in said
State, hereby certify that Kenneth A. Roberts, whose name as Chairman of the
Board of Directors of THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX
CITY, ALABAMA, a public corporation and instrumentality under the laws of the
State of Alabama, is signed to the foregoing instrument and who is known to me,
acknowledged before me on this day that, being informed of the contents of the
said instrument, he, as such officer and with full authority, executed the same
voluntarily for and as the act of said public corporation.

          GIVEN under my hand and seal of office, this 27th day of June, 1990.

                                  /s/     Sydney S. Smith
                                  ---------------------------------
                                            Notary Public

 (SEAL)                           My commission expires: 2/25/92
                                                        --------

                                      -5-

<PAGE>

                           ACKNOWLEDGMENT OF COMPANY

STATE OF OHIO

COUNTY OF MONTGOMERY

          I, David L. Santez, Notary Public in and for said County in said
State, hereby certify that William D. Bloebaum, Jr., whose name as Treasurer of
MEAD COATED BOARD, INC., a corporation organized and existing under the laws of
the State of Delaware, is signed to the foregoing instrument and who is known to
me, acknowledged before me on this day that, being informed of the contents of
the said instrument, he, as such officer and with full authority, executed the
same voluntarily for and as the act of said corporation.

          GIVEN under my hand and seal of office, this 21st day of June, 1990.

                                              David L. Santez
                                      -----------------------------
                                               Notary Public

(SEAL)                                My commission expires:
                                                            -------

                                          DAVID L. SANTEZ, Attorney at Law
                                          Notary Public, State of Ohio
                                          My Commission has no Expiration Date.
                                          Section 147.03 O.R.C.

                                      -6-

<PAGE>

                             CONSENT OF BONDHOLDER
                             ---------------------

          MEAD COATED BOARD, INC., as holder of all of the outstanding
Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1988A,
1989A-E and 1990A of The Industrial Board of the City of Phenix City, Alabama
(the "Board"), hereby consents to the execution and delivery of the foregoing
Seventh Amendment To Lease Agreement dated as of June 1, 1990, between the Board
and Mead Coated Board, Inc., amending the Lease Agreement, dated as of December
1, 1988, as amended by a First Amendment To Lease Agreement dated as of March 1,
1989, a Second Amendment to Lease Agreement dated as of April 1, 1989, a Third
Amendment To Lease Agreement dated as of June 1, 1989, a Fourth Amendment To
Lease dated as of July 1, 1989, a Fifth Amendment To Lease Agreement dated as of
December 1, 1989 and a Sixth Amendment To Lease Agreement dated as of May 1,
1990 between the Board and Mead Coated Board, Inc. and directs AmSouth Bank
N.A., as Trustee, to consent to the execution and delivery of the same.

          IN WITNESS WHEREOF, Mead Coated Board, Inc. has caused this Consent of
Bondholder to be executed in its name and behalf as of June 1, 1990.

                                         MEAD COATED BOARD, INC.

                                         By: W. D. Bloebaum, Jr.
                                            -------------------------
                                            Title:  Treasurer

                                      -7-
<PAGE>

                              CONSENT OF TRUSTEE

          AMSOUTH BANK N.A., as Trustee under the Trust Indenture dated as of
December 1, 1988, as supplemented by a First Supplemental Trust Indenture dated
as of March 1, 1989, a Second Supplemental Trust Indenture dated as of April 1,
1989, a Third Supplemental Trust Indenture dated as of June 1, 1989, a Fourth
Supplemental Trust Indenture dated as of July 1, 1989, a Fifth Supplemental
Trust Indenture dated as of December 1, 1989, and a Sixth Supplemental Trust
Indenture dated as of May 1, 1990 from the Industrial Development Board of the
City of Phenix City, Alabama (the "Board"), hereby consents to the execution and
delivery of the foregoing Seventh Amendment To Lease Agreement, dated as of May
1, 1990, between the Board and Mead Coated Board, Inc., amending the Lease
Agreement, dated as of December 1, 1988, as amended by a First Amendment To
Lease Agreement dated as of March 1, 1989, a Second Amendment To Lease Agreement
dated as of April 1, 1989, a Third Amendment To Lease Agreement dated as of June
1, 1989, a Fourth Amendment To Lease Agreement dated as of July 1, 1989, a Fifth
Amendment To Lease Agreement dated as of December 1, 1989, and a Sixth Amendment
To Lease Agreement dated as of May 1, 1990 between the Board and Mead Coated
Board, Inc.

          IN WITNESS WHEREOF, AmSouth Bank N.A. has caused this Consent of
Trustee to be executed in its name and behalf as of June 1, 1990.

                                    AMSOUTH BANK N.A., as Trustee

                                    By: /s/ Jeff Fink
                                       -----------------------------
                                       Title:  Trust Officer

DMY/FNO

                                      -8-
<PAGE>

                               EIGHTH AMENDMENT
                               ----------------

                                      TO
                                      --

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

          THIS EIGHTH AMENDMENT TO LEASE AGREEMENT (the "Amendment") is
made and entered into as of August 1, 1990, by and between THE INDUSTRIAL
DEVELOPMENT BOARD OF THE CITY OF PHENIX CITY, ALABAMA (the "Board"), a public
body corporate and politic duly organized and existing under the Constitution
and laws of the State of Alabama, and MEAD COATED BOARD, INC., a Delaware
corporation (the "Company").

                               R E C I T A L S
                               ---------------

          The Board has previously issued and sold $85,000,000 in aggregate
principal amount of The Industrial Development Board of the City of Phenix City,
Alabama Industrial Development Revenue Bonds (Mead Coated Board Project),
Series 1988A (the "Series 1988A Bonds"); $43,000,000 in aggregate principal
amount of The Industrial Development Board of the City of Phenix City, Alabama
Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1989A
(the "Series 1989A Bonds"); $45,000,000 in aggregate principal amount of The
Industrial Development Board of the City of Phenix City, Alabama Industrial
Development Revenue Bonds (Mead Coated Board Project), Series 1989B (the
"Series 1989B Bonds"); $37,000,000 in aggregate principal amount of The
Industrial Development Board of the City of Phenix City, Alabama Industrial
Development Revenue Bonds (Mead Coated Board Project), Series 1989C (the "Series
1989C Bonds"); $40,000,000 in aggregate principal amount of The Industrial
Development Board of the City of Phenix City, Alabama Industrial Development
Revenue Bonds (Mead Coated Board Project), Series 1989D (the "Series 1989D
Bonds"); $49,667,074 of The Industrial Development Board of the City of Phenix
City, Alabama Industrial Development Revenue Bonds (Mead Coated Board Project),
Series 1989E (the "Series 1989E Bonds") and $170,000,000 of The Industrial
Development Board of the City of Phenix City, Alabama Industrial Development
Revenue Bonds (Mead Coated Board Project) Series 1990A (the "Series 1990A
Bonds") pursuant to a Trust Indenture dated as of December 1, 1988 (the
"Original Indenture"), as supplemented by a First Supplemental Trust Indenture
dated as of March 1, 1989, a Second Supplemental Trust Indenture dated as of
April 1, 1989, a Third Supplemental Trust Indenture dated as of June 1, 1989, a
Fourth Supplemental Trust Indenture dated as of July 1, 1989, a Fifth
Supplemental Trust Indenture dated as of December 1, 1989,
<PAGE>

a Sixth Supplemental Trust Indenture dated as of May 1, 1990 and a Seventh
Supplemental Trust Indenture dated as of June 1, 1990 (collectively, the
"Indenture"), from the Board to AmSouth Bank N.A., as Trustee (the "Trustee").

          The Board has used the proceeds of the sale of the Series 1988A Bonds,
the Series 1989A Bonds, the Series 1989B Bonds, the Series 1989C Bonds, the
Series 1989D Bonds, the Series 1989E Bonds and the Series 1990A Bonds for the
payment of outstanding industrial development temporary borrowing notes (the
"Notes") issued by the Board for the purpose of funding the acquisition,
construction and installation of a coated natural kraft mill and related
facilities (the "Project") in connection with certain industrial facilities
located near Phenix City, Alabama. The Project is owned by the Board and leased
to the Company pursuant to a Lease Agreement dated as of December 1, 1988, as
amended by the First Amendment To Lease Agreement dated as of March 1, 1989, the
Second Amendment To Lease Agreement dated as of April 1, 1989, the Third
Amendment To Lease Agreement dated as of June 1, 1989, the Fourth Amendment To
Lease Agreement dated as of July 1, 1989, the Fifth Amendment To Lease Agreement
dated as December 1, 1989, the Sixth Amendment To Lease Agreement dated as of
May 1, 1990 and the Seventh Amendment to Lease Agreement dated as of June 1,
1990 (collectively the "Agreement"). The Agreement obligates the Company to make
rental payments in such amounts and at such times as will provide for the
payment of the principal and interest on the Series 1988A Bonds, the Series
1989A Bonds, the Series 1989B Bonds, the Series 1989C Bonds, the Series 1989D
Bonds, the Series 1989E Bonds and the Series 1990A Bonds as the same becomes due
and payable.

          The Project is located on the real property described in Exhibit A to
the Agreement (the "Project Land"). The Company desires to amend the Agreement
to modify the description of Project Land in order to more accurately include
that land which constitutes the site of the Project. Pursuant to Article 1502 of
the Original Indenture, the Board is permitted to amend the Agreement upon the
mailing of notice to, and obtaining the written consent of, the holders of not
less than 2/3 in principal amount of the outstanding Bonds.

          NOW, THEREFORE, as contemplated by Section 12.5 of the Agreement and
in accordance with Section 1502 of the Original Indenture, the parties hereto
desire to amend the Agreement as follows:

          Section 1.1 Amendment of Agreement. Exhibit A, attached to the
          ----------- ----------------------
Agreement and describing the Project Land, is hereby amended by deleting the
description designated "NEW LIME KILN/RECAUSTICIZING" in its entirety, and by
inserting, in lieu thereof, the following:

                                      -2-
<PAGE>

                         "NEW LIME KILN/RECAUSTICIZING
                         -----------------------------

               All that portion of land, and structures lying thereon, in
     Section 28, T 14 N, R 30 E, County of Russell, State of Alabama, more
     particularly described as follows:

               Commence at a monument having grid coordinates N 793,150.19, E
     233,250.02 of the West Zone of the State of Georgia Coordinate System;
     thence N 70(degrees) 51' 29" E, 267.79' to the point of beginning (N
     793,238.0 E 233,503.0); thence N 90(degrees) 00' E, 399.23'; thence S
     0(degrees) 00' W, 50.00'; thence N 90(degrees) 00' W, 10.00'; thence S
     0(degrees) 00' W, 40.00'; thence N 90(degrees) 00' W, 136.23'; thence N
     0(degrees) 00' W, 80.00'; thence N 90(degrees) 00' W, 50.00'; thence S
     0(degrees) 00' W, 10.00'; thence N 90(degrees) 00' W, 54.00'; thence S
     0(degrees) 00' W, 40.00'; thence N 90(degrees) 00' E, 65.00'; thence S
     0(degrees) 00' W, 30.00'; thence N 90(degrees) 00' W, 150.00'; thence N
     0(degrees) 00' W, 17.00'; thence N 90(degrees) 00' W, 64.00'; thence N
     0(degrees) 00' W, 73.00' to the point of beginning; said land being 0.657,
     more or less acres, less than and except all structures not included in the
     Mead Corporation Contract No. 21-3097A."

          Section 1.2. Waiver of Notice. The Company, as the owner of all of the
          ----------- -----------------
outstanding Bonds, hereby waives any notices required to be given to it pursuant
to Sections 1402 or 1502 of the Original Indenture in connection with this
Amendment.

          Section 1.3. Agreement and Amendment as One Document. As amended by
          -----------  ---------------------------------------
this Amendment, the Agreement is in all respects ratified and confirmed and the
Agreement and this Amendment shall be read, taken and construed as one and the
same instrument.

          Section 1.4. References. All references herein or in the Agreement
          -----------  ----------
to any Article, Section or provision of the Agreement shall refer to any such
Article, Section or provision as hereby amended.

          Section 1.5. Counterparts. This Amendment may be simultaneously
          -----------  ------------
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.

          Section 1.6. Captions. The captions or headings in this Amendment are
          -----------  --------
for convenience only and in no way define, limit or describe the scope or intent
of any provision of this Amendment.

                                      -3-
<PAGE>

          Section 1.7. Applicable Law. This Amendment shall be construed in
          -----------  --------------
accordance with the laws of the State of Alabama.

          IN WITNESS WHEREOF, the Board and the Company have caused this
Amendment to be executed in their respective corporate names as of the date
first written above.

                                         THE INDUSTRIAL DEVELOPMENT BOARD OF
                                         THE CITY OF PHENIX CITY, ALABAMA

                                         By: Kenneth A. Roberts
                                            -----------------------------
                                             Chairman

                                         MEAD COATED BOARD, INC.

                                         By: W. D. Bloebaum, Jr.
                                            ----------------------------
                                             Title:  Treasurer

                                      -4-
<PAGE>

                            ACKNOWLEDGMENT OF BOARD

STATE OF ALABAMA

COUNTY OF RUSSELL

          I, Sydney S. Smith, a Notary Public in and for said County in said
State, hereby certify that Kenneth A. Roberts, whose name as Chairman of the
Board of Directors of THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX
CITY, ALABAMA, a public corporation and instrumentality under the laws of the
State of Alabama, is signed to the foregoing instrument and who is known to me,
acknowledged before me on this day that, being informed of the contents of the
said instrument, he, as such officer and with full authority, executed the same
voluntarily for and as the act of said public corporation.

          GIVEN under my hand and seal of office, this 20th day of August, 1990.

                                              /s/ Sydney S. Smith

                                            ----------------------------
                                                   Notary Public

(SEAL)

                                            My commission expires: 2/25/92
                                                                   -------

                                      -5-
<PAGE>

                           ACKNOWLEDGMENT OF COMPANY

STATE OF OHIO

COUNTY OF MONTGOMERY

          I, Robert A. Selak, Notary Public in and for said County in said
State, hereby certify that William D. Bloebaum, Jr., whose name as Treasurer of
MEAD COATED BOARD, INC., a corporation organized and existing under the laws of
the State of Delaware, is signed to the foregoing instrument and who is known to
me, acknowledged before me on this day that, being informed of the contents of
the said instrument, he, as such officer and with full authority, executed the
same voluntarily for and as the act of said corporation.

          GIVEN under my hand and seal of office, this 29th day of August, 1990.

                                              /s/  Robert A. Selak
                                           -------------------------------
                                                    Notary Public

(SEAL),

                                           My commission expires:_________

                                           ROBERT A. SELAK, Attorney at Law
                                           Notary Public, State of Ohio
                                           My Commission has no expiration date.
                                           Section 147.03 0. R. C.

                                      -6-
<PAGE>

                             CONSENT OF BONDHOLDER
                             ---------------------

          MEAD COATED BOARD, INC., as holder of all of the outstanding
Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1988A,
Series 1989A, Series 1989B, Series 1989C, Series 1989E and Series 1990A of the
Industrial Board of the City of Phenix City, Alabama (the "Board"), hereby
consents to the execution and delivery of the foregoing Eighth Amendment To
Lease Agreement dated as of August 1, 1990, between the Board and Mead Coated
Board, Inc., amending the Lease Agreement, dated as of December 1, 1988, as
amended by a First Amendment To Lease Agreement dated as of March 1, 1989, a
Second Amendment to Lease Agreement dated as of April 1, 1989, a Third Amendment
To Lease Agreement dated as of June 1, 1989, a Fourth Amendment To Lease dated
as of July 1, 1989, a Fifth Amendment To Lease Agreement dated as of December 1,
1989, a Sixth Amendment To Lease Agreement dated as of May 1, 1990 and a Seventh
Amendment to Lease Agreement dated as of June 1, 1990 between the Board and Mead
Coated Board, Inc. and directs AmSouth Bank N.A., as Trustee, to consent to the
execution and delivery of the same.

          IN WITNESS WHEREOF, Mead Coated Board, Inc. has caused this Consent of
Bondholder to be executed in its name and behalf as of August 1, 1990.

                                      MEAD COATED BOARD, INC.

                                      By: W. D. Bloebaum, Jr.
                                         ----------------------------
                                         Title:

                                      -7-
<PAGE>

                              CONSENT OF TRUSTEE
                              ------------------

          AMSOUTH BANK N.A., as Trustee under the Trust Indenture dated as of
December 1, 1988, as supplemented by a First Supplemental Trust Indenture dated
as of March 1, 1989, a Second Supplemental Trust Indenture dated as of April 1,
1989, a Third Supplemental Trust Indenture dated as of June 1, 1989, a Fourth
Supplemental Trust Indenture dated as of July 1, 1989, a Fifth Supplemental
Trust Indenture dated as of December 1, 1989, a Sixth Supplemental Trust
Indenture dated as of May 1, 1990 and a Seventh Supplemental Trust Indenture
dated as of June 1, 1990 from the Industrial Development Board of the City of
Phenix City, Alabama (the "Board"), hereby consents to the execution and
delivery of the foregoing Eighth Amendment To Lease Agreement, dated as of
August 1, 1990, between the Board and Mead Coated Board, Inc., amending the
Lease Agreement, dated as of December 1, 1988, as amended by a First Amendment
To Lease Agreement dated as of March 1, 1989, a Second Amendment to Lease
Agreement dated as of April 1, 1989, a Third Amendment To Lease Agreement dated
as of June 1, 1989, a Fourth Amendment To Lease Agreement dated as of July 1,
1989, a Fifth Amendment To Lease Agreement dated as of December 1, 1989, a Sixth
Amendment To Lease Agreement dated as of May 1, 1990 and a Seventh Amendment to
Lease Agreement dated as of June 1, 1990 between the Board and Mead Coated
Board, Inc.

          IN WITNESS WHEREOF, AmSouth Bank N.A. has caused this Consent of
Trustee to be executed in its name and behalf as of August 1, 1990.

                                   AMSOUTH BANK N.A., as Trustee

                                   By: Jeff Fink
                                      -------------------------
                                      Title: Trust Officer

                                      -8-
<PAGE>

                                NINTH AMENDMENT
                                ---------------

                                      TO
                                      --

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

          THIS NINTH AMENDMENT TO LEASE AGREEMENT (the "Amendment") is made and
entered into as of March 1, 1991, by and between THE INDUSTRIAL DEVELOPMENT
BOARD OF THE CITY OF PHENIX CITY, ALABAMA (the "Board"), a public body corporate
and politic duly organized and existing under the Constitution and laws of the
State of Alabama, and MEAD COATED BOARD, INC., a Delaware corporation (the
"Company").

                                R E C I T A L S
                                ---------------

          The Board has previously issued and sold $85,000,000 in aggregate
principal amount of The Industrial Development Board of the City of Phenix City,
Alabama Industrial Development Revenue Bonds (Mead Coated Board Project), Series
1988A (the "Series 1988A Bonds"); $43,000,000 in aggregate principal amount of
The Industrial Development Board of the City of Phenix City, Alabama Industrial
Development Revenue Bonds (Mead Coated Board Project), Series 1989A (the "Series
1989A Bonds"); $45,000,000 in aggregate principal amount of The Industrial
Development Board of the City of Phenix City, Alabama Industrial Development
Revenue Bonds (Mead Coated Board Project), Series 1989B (the "Series 1989B
Bonds"); $37,000,000 in aggregate principal amount of The Industrial Development
Board of the City of Phenix City, Alabama Industrial Development Revenue Bonds
(Mead Coated Board Project), Series 1989C (the "Series 1989C Bonds");
$40,000,000 in aggregate principal amount of The Industrial Development Board of
the City of Phenix City, Alabama Industrial Development Revenue Bonds (Mead
Coated Board Project), Series 1989D (the "Series 1989D Bonds"); $49,667,074 of
The Industrial Development Board of the City of Phenix City, Alabama Industrial
Development Revenue Bonds (Mead Coated Board Project), Series 1989E (the "Series
1989E Bonds"); and $170,000,000 of The Industrial Development Board of the City
of Phenix City, Alabama Industrial Development Revenue Bonds (Mead Coated Board
Project), Series 1991A (the "Series 1991A Bonds") pursuant to a Trust Indenture
dated as of December 1, 1988 (the "Original Indenture"), as supplemented by a
First Supplemental Trust Indenture dated as of March 1, 1989, a Second
Supplemental Trust Indenture dated as of April 1, 1989, a Third Supplemental
Trust Indenture dated as of June 1, 1989, a Fourth Supplemental Trust Indenture
dated as of July 1, 1989, a Fifth Supplemental Trust Indenture dated as of
December 1, 1989, a Sixth Supplemental Trust Indenture dated as of May 1, 1990,
a Seventh Supplemental Trust Indenture dated as of June 1, 1990 and an Eighth
Supplemental Trust Indenture dated as of August 1, 1990 (collectively, the
"Indenture"), from the Board to AmSouth Bank N.A., as Trustee (the "Trustee").

          The Board has used the proceeds of the sale of the Series 1988A Bonds,
the Series 1989A Bonds, the Series 1989B Bonds, the Series 1989C Bonds, the
Series 1989D Bonds, the Series
<PAGE>

1989E Bonds and the Series 1990A Bonds for the payment of outstanding industrial
development temporary borrowing notes (the "Notes") issued by the Board and for
the payment of certain obligations of the Board in connection with various
Equipment Leases (as defined in the Indenture) for the purpose of funding the
acquisition, construction and installation of a coated natural kraft mill and
related facilities (the "Project") in connection with certain industrial
facilities located near Phenix City, Alabama. The Project is owned by the Board
and leased to the Company pursuant to a Lease Agreement dated as of December 1,
1988, as amended by the First Amendment To Lease Agreement dated as of March 1,
1989, the Second Amendment To Lease Agreement dated as of April 1, 1989, the
Third Amendment To Lease Agreement dated as of June 1, 1989, the Fourth
Amendment To Lease Agreement dated as of July 1, 1989, the Fifth Amendment To
Lease Agreement dated as of December 1, 1989, the Sixth Amendment To Lease
Agreement dated as of May 1, 1990, the Seventh Amendment To Lease Agreement
dated as of June 1, 1990 and the Eighth Amendment To Lease Agreement dated as of
August 1, 1990 (collectively, the "Agreement"). The Agreement obligates the
Company to make rental payments in such amounts and at such times as will
provide for the payment of the principal and interest on the Series 1988A Bonds,
the Series 1989A Bonds, the Series 1989B Bonds, the Series 1989C Bonds, the
Series 1989D Bonds, the Series 1989E Bonds and the Series 1990A Bonds as the
same becomes due and payable.

          Under Article IV of the Original Indenture, the Board is permitted to
issue Additional Bonds (as defined in the Original Indenture) in order to pay
additional Notes issued by the Board in connection with the Project. In that
connection, the Board is issuing $81,000,000 in aggregate principal amount of
Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1991A
(the "Series 1991A Bonds"), pursuant to the Indenture as supplemented by a Ninth
Supplemental Trust Indenture dated as of March 1, 1991 (the "Ninth Supplemental
Indenture") from the Board to the Trustee. The Indenture as supplemented by the
Ninth Supplemental Indenture is hereinafter referred to as the "Indenture".

          NOW, THEREFORE, as contemplated by Section 4.5 of the Agreement and in
accordance with Section 1501 of the Original Indenture, the parties hereto
desire to amend the Agreement as follows:

                                   ARTICLE I

                     PROVISIONS FOR AMENDING THE AGREEMENT
                     -------------------------------------

          Section 1.1  Amendment of Section 5.3 of the Agreement. The term
          -----------  -----------------------------------------
"Bonds" as used in Section 5.3 of the Agreement shall include the Series 1991A
Bonds.

          Section 1.2  Terms of Agreement Applicable to Series 1991A Bonds. All
          -----------  ---------------------------------------------------
terms, conditions, representations and covenants set forth in the Agreement
applicable to the Series 1988A Bonds and not specifically otherwise provided
for in the

                                      -2-
<PAGE>

Indenture, any supplements thereto or the Agreement, shall apply with full force
and effect to the Series 199lA Bonds. Without limiting the foregoing, all
references in the Agreement to the "Bonds" shall be deemed to mean the Series
1988A Bonds, the Series 1989A Bonds, the Series 1989B Bonds, the Series 1989C
Bonds, the Series 1989D Bonds, the Series 1989E Bonds, the Series 1990A Bonds
and the Series 1991A Bonds, including without limitation the provisions of
Section 5.3 of the Agreement relating to the payment of rents.

          Section 1.3  Representations and Warranties by the Board. The Board
          -----------  -------------------------------------------
makes the following representations and warranties as the basis for the
undertakings on its part herein contained:

               (a) Organization and Authority. The Board is a public corporation
                   --------------------------
     duly organized and validly existing under the provisions of the Act by
     authority of a resolution adopted by the Board of Commissioners of the City
     on June 14, 1960 and a Certificate of Incorporation duly filed for record
     on October 17, 1960, in the office of the Judge of Probate of Russell
     County, Alabama, which Certificate of Incorporation has not been amended or
     been revoked and is of full force and effect. The Board has all requisite
     power and authority under the Act (1) to issue the Series 1991A Bonds, (2)
     to use the proceeds thereof to refund the Notes issued to pay the cost to
     acquire, construct and install the Project, (3) to own, lease, encumber and
     dispose of the Project, and (4) to enter into, and perform its obligations
     under, the Indenture, the Agreement and this Amendment. This Amendment and
     the Ninth Supplemental Indenture have been duly authorized, executed and
     delivered by the Board and are legal, valid and binding agreements
     enforceable against the Board in accordance with their respective terms.

               (b) Pending Litigation. There are no actions, suits, proceedings,
                   ------------------
     inquiries or investigations pending, or to the knowledge of the Board
     threatened, against or affecting the Board in any court or before any
     governmental authority or arbitration board or tribunal, which adversely
     affect the validity or enforceability of the Series 1991A Bonds, the
     Indenture, the Agreement, this Amendment, or any agreement or instrument to
     which the Board is a party and which is used or contemplated for use in the
     consummation of the transactions contemplated hereby or thereby.

               (c) Issue, Sale and Other Transactions Are Legal and Authorized.
                   -----------------------------------------------------------
     The issue and sale of the Series 1991A Bonds and the execution and delivery
     by the Board of the Ninth Supplemental Indenture and this Amendment and the
     compliance by the Board with all of the provisions of each thereof and of
     the Series 1991A Bonds (i) are within the purposes, powers and authority of
     the Board, (ii) to the best of the knowledge of the Board,

                                      -3-
<PAGE>

     have been done in fall compliance with the provisions of the Act, are legal
     and will not conflict with or constitute on the part of the Board a
     violation of or a breach of or default under, or result in the creation of
     any lien or encumbrance (other than Permitted Encumbrances under the
     Agreement) upon any property of the Board under the provisions of, its
     certificate of incorporation or Bylaws, or any indenture, mortgage, deed of
     trust, note agreement or other agreement or instrument to which the Board
     is a party or by which the Board is bound, or any license, judgment,
     decree, law, statute, order, rule or regulation of any court or
     governmental agency or body having jurisdiction over the Board or any of
     its activities or properties, and (iii) have been duly authorized by all
     necessary corporate action on the part of the Board.

               (d) Governmental Consents. Neither the nature of the Board nor
                   ---------------------
     any of its activities or properties, nor any relationship between the Board
     and any other person, nor any circumstance in connection with the offer,
     issue, sale or delivery of any of the Series l991A Bonds is such as to
     require the consent, approval or authorization of, or the filing,
     registration or qualification with, any governmental authority on the part
     of the Board in connection with the execution, delivery and performance of
     the Ninth Supplemental Indenture and this Amendment, or the offer, issue,
     sale or delivery of the Series 1991A Bonds, other than (i) the filing with
     the Alabama Securities Commission of the notification of the Board's
     intention to issue the Series 1991A Bonds required by Act No. 586 enacted
     at the 1978 Regular Session of the Legislature of the State and the
     issuance by the Director of the Alabama Securities Commission of such
     Certificate of Notification as may be required by said Act, and (ii) the
     due filing and recording of this Amendment, the Ninth Supplemental
     Indenture and the financing statements covering the security interests
     created hereunder and under the Indenture. The Board has filed the
     notification referred to in (i) of the preceding sentence and the Director
     of the Alabama Securities Commission has issued a Certificate of
     Notification applicable to the Series l991A Bonds, which Certificate of
     notification has not been revoked or rescinded and is in full force and
     effect.

               (e) No Defaults. The Board is not in default under the Act or
                   -----------
     under its Certificate of Incorporation or Bylaws or any other agreement or
     instrument to which it is a party or by which it is bound.

          Section 1.4  Representations and Warranties by the Company. The
          -----------  ---------------------------------------------
Company makes the following representations and warranties as the basis for the
undertakings on its part herein contained:

                                      -4-
<PAGE>

          (a) The Company (i) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, (ii) has
all requisite corporate power and authority to carry on its business as now
being conducted and as presently proposed to be conducted, and (iii) has duly
qualified and is authorized to do business and is in good standing as a foreign
corporation in the State.

          (b) The Company has the corporate power and has been duly authorized
to enter into this Amendment and to perform all of its obligations hereunder.

          (c) The willingness of the Board to issue the Series l991A Bonds for
purposes of financing costs of acquiring, constructing, and installing the
Project, and to lease the Project to the Company, has induced the Company to
locate the Project within the State of Alabama and, more particularly, within 25
miles of the City.

          (d) The Company is not subject to any contractual or other limitation
or provision of any nature whatsoever which in any material way limits,
restricts or prevents the Company from entering into this Amendment, or
performing any of its obligations hereunder; and the execution and delivery of
this Amendment, the consummation of the transactions contemplated hereby, and
the fulfillment of or compliance with the terms and conditions of this Amendment
will not conflict with or result in a breach of the terms, conditions or
provisions of any restriction, agreement or instrument to which the Company is a
party or by which it is bound, or constitute a default under any of the
foregoing.

          (e) No event has occurred and no condition exists that would
constitute an "Event of Default" under the Agreement or this Amendment which,
with the lapse of time or with the giving of notice or both, would become an
"Event of Default" under the Agreement or this Amendment.

          (f) To the best of its knowledge and belief, the Company is not in
violation of any laws, ordinances, governmental rules or regulations to which it
is subject and has not failed to obtain any licenses, permits, franchises or
other governmental authorizations necessary to the ownership of its properties
or to the conduct of its business, which violation or failure to obtain would
reasonably be expected to materially and adversely affect the ability of the
Company to perform its obligations under this Amendment.

                                      -5-
<PAGE>

                                  ARTICLE II
                                MISCELLANEOUS
                                -------------

           Section 2.1  Agreement and Amendment as One Document. As amended by
           -----------  ---------------------------------------
this Amendment, the Agreement is in all respects ratified and confirmed and the
Agreement and this Amendment shall be read, taken and construed as one and the
same instrument.

           Section 2.2  References. All references herein or in the Agreement to
           -----------  ----------
any Article, Section or provision of the Agreement shall refer to any such
Article, Section or provision as hereby amended.

           Section 2.3  Counterparts. This Amendment may be simultaneously
           -----------  ------------
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.

           Section 2.4  Captions. The captions or headings in this Amendment are
           -----------  --------
for convenience only and in no way define, limit or describe the scope or intent
of any provision of this Amendment.

           Section 2.5  Applicable Law. This Amendment shall be construed in
           -----------  --------------
accordance with the laws of the State of Alabama.

          IN WITNESS WHEREOF, the Board and the Company have caused this
Amendment to be executed in their respective corporate names as of the date
first written above.

                                   THE INDUSTRIAL DEVELOPMENT BOARD OF
                                   THE CITY OF PHENIX CITY, ALABAMA

                                   By:  /s/ Kenneth A. Roberts
                                        ----------------------
                                            Chairman

                                   MEAD COATED BOARD, INC.

                                   By:  /s/ E.M. Karter
                                        ----------------------
                                         Vice President

                                      -6-
<PAGE>

                            ACKNOWLEDGMENT OF BOARD

STATE OF ALABAMA

COUNTY OF RUSSELL

          I, Sydney S. Smith, a Notary Public in and for said County in said
State, hereby certify that Kenneth A. Roberts, whose name as Chairman of the
Board of Directors of THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF PHENIX
CITY, ALABAMA, a public corporation and instrumentality under the laws of the
State of Alabama, is signed to the foregoing instrument and who is known to me,
acknowledged before me on this day that, being informed of the contents of the
said instrument, he, as such officer and with full authority, executed the same
voluntarily for and as the act of said public corporation.

          GIVEN under my hand and seal of office, this 27th day of February,
1991.

                                               /s/ Sydney S. Smith
                                         ________________________________
                                                   Notary Public

(SEAL)                                   My commission expires: 2/25/92

                                      -7-
<PAGE>

                           ACKNOWLEDGMENT OF COMPANY

STATE OF OHIO

COUNTY OF MONTGOMERY

          I, Eva L. Miller, Notary Public in and for said County in said State,
hereby certify that E.M. Karter, whose name as Vice President of MEAD COATED
BOARD, INC., a corporation organized and existing under the laws of the State of
Delaware, is signed to the foregoing instrument and who is known to me,
acknowledged before me on this day that, being informed of the contents of the
said instrument, he, as such officer and with full authority, executed the Same
voluntarily for and as the act of said corporation.

          GIVEN under my hand and seal of office, this 1st day of March, 1991.

                                                   /s/ Eva L. Miller
                                        --------------------------------------
                                                      Notary Public

                                        My commission expires: _______________
                                        EVA L. MILLER, Notary Public
                                        In and for the State of Ohio
                                        My Commission Expires June 29, 1992

(SEAL)

                                      -8-
<PAGE>

                             CONSENT OF BONDHOLDER
                             ---------------------

          Mead Coated Board, Inc., as holder of all of the outstanding
Industrial Development Revenue Bonds (Mead Coated Board Project), Series 1988A,
Series 1989A, Series 1989B, Series 1989C, Series 1989D, Series 1989E and Series
l990A of The Industrial Development Board of the City of Phenix City, Alabama
(the "Board"), hereby consents to the execution and delivery of the foregoing
Ninth Amendment To Lease Agreement, dated as of March 1, 1991, between the Board
and Mead Coated Board, Inc., amending the Lease Agreement, dated as of December
1, 1988, as amended by a First Amendment To Lease Agreement dated as of March 1,
1989, a Second Amendment To Lease Agreement dated as of April 1, 1989, a Third
Amendment To Lease Agreement dated as of June 1, 1989, a Fourth Amendment To
Lease Agreement dated as of July 1, 1989, a Fifth Amendment To Lease Agreement
dated as of December 1, 1989 a Sixth Amendment To Lease Agreement dated as of
May 1, 1990, a Seventh Amendment To Lease Agreement dated as of June 1, 1990 and
an Eighth Amendment To Lease Agreement dated as of August 1, 1990 between the
Board and Mead Coated Board, Inc.

          IN WITNESS WHEREOF, Mead Coated Board, Inc. has caused this Consent of
Bondholder to be executed in its name and behalf as of March 1, 1991.

                                        MEAD COATED BOARD, INC.

                                        By:  /s/ E.M. Karter
                                             -----------------------------
                                             Vice President

                                      -9-

<PAGE>

                               CONSENT OF TRUSTEE
                               ------------------

          AMSOUTH BANK N.A., as Trustee under the Trust Indenture dated as of
December 1, 1988, as supplemented by a First Supplemental Trust Indenture dated
as of March 1, 1989, a Second Supplemental Trust Indenture dated as of April 1,
1989, a Third Supplemental Trust Indenture dated as of June 1, 1989, a Fourth
Supplemental Trust Indenture dated as of July 1, 1989, a Fifth Supplemental
Trust Indenture dated as of December 1, 1989, a Sixth Supplemental Trust
Indenture dated as of May 1, 1990, a Seventh Supplemental Trust Indenture dated
as of June 1, 1990, and an Eighth Supplemental Trust Indenture dated as of
August 1, 1990 from the Industrial Development Board of the City of Phenix City,
Alabama (the "Board"), hereby consents to the execution and delivery of the
foregoing Ninth Amendment To Lease Agreement, dated as of March 1, 199l, between
the Board and Mead Coated Board, Inc., amending the Lease Agreement, dated as of
December 1, 1988, as amended by a First Amendment To Lease Agreement dated as of
March 1, 1989, a Second Amendment To Lease Agreement dated as of April 1, 1989,
a Third Amendment To Lease Agreement dated as of June 1, 1989, a Fourth
Amendment To Lease Agreement dated as of July 1, 1989, a Fifth Amendment To
Lease Agreement dated as of December 1, 1989 a Sixth Amendment To Lease
Agreement dated as of May 1, 1990, a Seventh Amendment To Lease Agreement dated
as of June 1, 1990 and an Eighth Amendment To Lease Agreement dated as of August
1, 1990 between the Board and Mead Coated Board, Inc.

          IN WITNESS WHEREOF, AmSouth Bank N.A. has caused this Consent of
Trustee to be executed in its name and behalf as of March 1, 1991.

                                        AMSOUTH BANK N.A., as Trustee

                                        By:            Jeff Fink
                                            -------------------------------
                                             Title: Corporate Trust Officer

                                     -10-
<PAGE>

                                  EXHIBIT "A"

                                      to

                  Ninth Amendment To Lease Agreement between
                      THE INDUSTRIAL DEVELOPMENT BOARD OF
                        THE CITY OF PHENIX CITY, ALABAMA
                                      and
                            MEAD COATED BOARD, INC.
                           dated as of March 1, 1991

                          DESCRIPTION OF PROJECT LAND
                          ---------------------------

The Project Land includes the following property:

              NEW RECLAIM PLATE FEED AND CONVEYOR AREA (C-28511),
              ---------------------------------------------------

                CHIPS CONVEYOR TO SCREEN HOUSE AREA (C-28513),
                ----------------------------------------------

                     AND CHIPS SCREEN HOUSE AREA (C-28515)
                     -------------------------------------

          All that portion of land and structures lying 13' on each side of the
     following described centerline and also including any specifically noted
     areas which extend beyond said centerline strip:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State Georgia Coordinate System; and
     lying in Section 28, T 14 N , R 30 E, County of Russell, State of Alabama;
     thence N 63 degrees 51' 31" E, 790.90' to the point of beginning; thence N
     90 degrees 00' W, 82.00; thence S 0' 00" W, 8.75'; thence N 90 degrees 00'
     W, 232.22'; thence S 15 degrees 17' 15" E, 479.72' to a point on the
     northmost side of a rectangular area (Chip Screen House) which parallels
     last said course and is 75.0' north to south (7.00' of which is west of
     last said course) by 49.0' east to west; said rectangular area being the
     point of ending; said land being 0.56+ acres;

                 CHIPS CONVEYOR TO PINE STORAGE AREA (C-28538)
                 ---------------------------------------------

          All that portion of land and structures lying 14' on each side of the
     following described centerline:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System; and
     lying in Section 28, T 14 N. R 30 E, County of Russell, State of Alabama;
     thence N 45 degrees 24' 34" E, 692.79' to the point of beginning; thence S
     36 degrees 51' 02" E, 454.94' to the point of ending; said land being 0.29
     (plus or minus) acres;
<PAGE>

            CHIPPER DISCHARGE CONVEYOR AREA (C-28536) AND CHIPS TO
            ------------------------------------------------------

                    HARDWOOD STORAGE CONVEYOR AREA (C-28537)
                    ----------------------------------------

          All that portion of land and structures lying 14' on each side of the
     following described centerline and also including any specifically noted
     areas which extend beyond said centerline strip:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System; and
     lying in Section 28, T 14 N. R 30 E, County of Russell, State of Alabama;
     thence N 71 degrees 34' 06" E, 600.241 to the point of beginning; thence S
     71 degrees 04' 32" E, 640.91'; thence N 50 degrees 08' 32" E, 61.59' to the
     point of ending; said land being 0.45 (plus or minus) acres;

                   CHIP CONVEYOR TO DIGESTER AREA (C-28521),
                   -----------------------------------------

                  CHIP CONVEYOR TO SURGE BIN AREA (C-28519),
                  ------------------------------------------

                         AND CHIP SILO AREA (C-28520)
                         ----------------------------

          All that portion of land and structures lying 14' on each side of the
     following described centerline and also including any specifically noted
     areas which extend beyond said centerline strip:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System; and
     lying in Section 28, T 14 N. R 30 E, County of Russell, State of Alabama;
     thence S 48 degrees 21' 59" W, 84.29' to the point of beginning; thence S
     56 degrees 07' 32" E, 319.22' to the center of a circular area (Chip Silo)
     with a radius of 15.00' and a central angle of 360 degrees 00' bounded by a
     rectangular structure 32' -6" (plus or minus) East-West and 32' -6" (plus
     or minus) North-South; thence N 82 degrees 51' 32" E, 355.48' to the point
     of ending; said land being 0.45 (plus or minus) acres;

                  NEW WASHER FACILITY AND BATCH DIGESTER AREA
                  -------------------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System;
     thence N 48 degrees 06' 06" W, 35.94' to the point of beginning (N
     792,374.0, E 234,473.25); thence S 0 degrees 00' W, 133.50'; thence N 90
     degrees 00' W, 103.39'; thence S 0 degrees 00' W, 103.50'; thence 90
     degrees 00' W, 48.00'; thence N 0 degrees 00' W, 55.75'; thence N 90
     degrees 00' W, 80.00'; thence S 0 degrees 00' W, 42.75'; thence N 90
     degrees 00' W, 63.00'; thence N 0 degrees 00' W, 110.00'; thence N 45
     degrees 00' E, 55.00'; thence N 0 degrees 00' W, 23.11'; thence N 90
     degrees 00' E, 23.00; thence N 00 degrees W,

                                      A-2
<PAGE>

     23.75'; thence N 90 00' E, 170.00'; thence N 0 00' W, 28.75'; thence N 90
     00' E, 62.50' to the point of beginning; said area being 1.01 (plus or
     minus) acres;

            MILL WATER COOLING TOWER AND NEW REACTOR CLARIFIER AREA
            -------------------------------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System;
     thence S 48 46' 07" W. 591.71' to the point of beginning (N 791,960.0 E
     234,055.0); thence S 0 degrees 00' W, 170.00'; thence N 90 degrees 00' W,
     111.00; thence N 0 degrees 00' W, 170.00'; thence N 90 degrees 00' E,
     111.00' to the point of beginning; said land being 0.43 (plus or minus)
     acres;

                       TURPENTINE RECOVERY FACILITY AREA
                       ---------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System;
     thence S 63 degrees 26' 06" W, 11.18' to the point of beginning (N
     792,345.0, E 234,490.0); thence N 0' 00" W, 30.00'; thence N 90 degrees 00"
     E, 20.00'; thence S 0 degrees 00' W, 30.00'; thence N 90 degrees 00' W,
     20.00' to the point of beginning; said land being 0.01 (plus or minus)
     acres;

          LOG STORAGE AREA (C-28522), LOG FEED DECKS AREA (C-28523),
          ----------------------------------------------------------

           DRUM AREA (C-28525), VIBRATING CONVEYORS AREA (C-28532),
           --------------------------------------------------------

              CHIPPER POWER FEED ROLLS AREA (C-28528), CHIP BLDG.
              ---------------------------------------------------

          AREA (C-28535), AND BARK COLLECTING CONVEYOR AREA (C-28531)
          -----------------------------------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System;
     thence N 80 degrees 22' 54" E, 879.79' to the point of beginning; thence N
     0 degrees 00' W, 326.00'; thence N 90 degrees 00' E, 711.08'; thence S 0
     degrees 00' W, 326.00'; thence N 90 degrees 00' W, 328.00'; thence S 0
     degrees 00' W, 188.00'; thence N 90 degrees 00' W, 50.00'; thence N 0
     degrees 00' W, 188.00'; thence N 90 degrees 00' 333.08' to the point of
     beginning; said land being 5.54 (plus or minus) acres;

                                      A-3
<PAGE>

                        AREA "B" MAINTENANCE SHOP AREA
                        ------------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 792,350.00, E
     234,500.00, of the West Zone of the State of Georgia Coordinate System;
     thence S 11 degrees 04' 57" W, 197.69' to the point of beginning
     (N792,156.0, E 234,462.0); thence S 0 degrees 00" W, 82.00'; thence N 90
     degrees 00" W, 52.00'; thence N 0 degrees 00' W, 82.00'; thence N 90
     degrees 00' E, 52.00 to the point of beginning; said land being 0.10
     (plus or minus) acres;

                         NEW LIME KILN/RECAUSTICIZING
                         ----------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N, R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 793,150.19, E
     233,250.02 of the West Zone of the State of Georgia Coordinate System;
     thence N 70 degrees 51' 29" E, 267.79' to the point of beginning (N
     793,238.0 E 233,503.0); thence N 90 degrees 00' E, 399.23'; thence S 0
     degrees 00' W, 50.00'; thence N 90 degrees 00' W, 10.00'; thence S 0
     degrees 00' W, 40.00'; thence N 90 degrees 00' W, 136.23'; thence N 0
     degrees 00' W, 80.00'; thence N 90 degrees 00' W, 50.00'; thence S 0
     degrees 00' W, 10.00'; thence N 00' W, 54.00'; thence S 0 degrees 00' W,
     40.00'; thence N 90 degrees 00' E, 65.00'; thence S 0 degrees 00' W,
     30.00'; thence N 90 degrees 00' W, 150.00'; thence N 0 degrees 00' W,
     17.00'; thence N 90 degrees 00' W, 64.00'; thence N 0 degrees 00' W, 73.00'
     to the point of beginning; said land being 0.657, more or less acres, less
     than and except all structures not included in the Mead Corporation
     Contract No. 21-3097A.

                          NO. 2 RECOVERY BOILER AREA
                          --------------------------

          All that portion of land, and structures lying thereon, in Section 28,
     T 14 N. R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 793,150.19, E
     233,250.02, of the West Zone of the State of Georgia Coordinate System;
     thence S 40 degrees 16' 34" E, 439.77' to the point of beginning (N
     792,814.67, E 233,534.32'); thence N 90 degrees 00' E, 36.30'; thence N 0
     degrees 00' W, 20.50'; thence N 90 degrees 00' E, 72.26'; thence N 0
     degrees 00' W, 14.83'; thence N 90 degrees 00' E, 110.50'; thence S 0
     degrees 00' W, 42.58'; thence N 90 degrees 00' E, 26.00'; thence S 0
     degrees, 81.00'; thence N 90 degrees 00' W. 51.00'; thence N 0 degrees 00"
     W, 25.12'; thence N 90 degrees 00' W. 85.50'; thence N 00 degrees 00' W,
     8.63'; thence N 90 degrees 00' W, 72.26'; thence N 90 degrees 00' W.
     20.50'; thence N 0 degrees 00' W, 36.30'; thence N 0 degrees 00' W. 34.00'
     to the point of beginning; said land being 0.47 (plus or minus) acres;

                                      A-4
<PAGE>

                       NEW EVAPORATORS AND NEW TANKS AREA

          All that portion of land, and structures lying thereon, in section 28,
     T 14 N. R 30 E, County of Russell, State of Alabama, more particularly
     described as follows:

          Commence at a monument having grid coordinates N 793,150.19, E
     233,250.02, of the West Zone of the State of Georgia Coordinate System;
     thence S 62 degrees 01' 33" E, 637.83' to the point of beginning (N
     792,851.0, E 233,813.33); thence N 90 degrees 00' E, 246.67'; thence along
     an arc South and East 53.41' having a radius of 34.00' with a central angle
     of 90 degrees 00'; thence S 0 degrees 00' W. 135.33'; thence along an arc
     South and West 53.41' having a radius of 34.00' with a central angle of 90
     degrees 00'; thence N 90 degrees 00' W; 34.00'; thence N 0 degrees 00' W.
     99.79'; thence N 90 degrees 00' W. 69.00'; thence N 59 degrees 47' 19" W.
     91.42'; thence N 90 degrees 00' W. 64.67'; thence N 0 degrees 00' W. 57.54'
     to the point of beginning; said land being 0.72 (plus or minus) acres;

     (collectively, the "Unimproved Lands"); less, in each case, any structures
     constructed and leased pursuant to a Lease Agreement dated July 1, 1977,
     and recorded in Deed Book 550 at Pages 51-94 (as amended to date, the "1977
     Lease") under which Lessor leased to Georgia Kraft Company ("Georgia
     Kraft") a parcel of land in Russell County, Alabama as more particularly
     described in Exhibit A to the Lease (the "1977 Land"), together with
     certain items of equipment described in Exhibit B to the 1977 Lease
     (Georgia Kraft has assigned its interest in the 1977 Lease to Mead Coated
     Board, Inc.);

together with the following easements:

          (a) An easement and right for pedestrian and vehicular traffic to use
     all present and future walks, railroads, roads, driveways and docks upon
     the Board Premises (the 1977 Land less and except the 1988 Land) in order
     to provide all necessary or convenient ingress or egress between the
     Unimproved Land and railroads, public roads and highways and the
     Chattahoochee River and to permit passage between the Unimproved Land and
     the Board Premises;

          (b) An easement and right for the passage of pedestrians and vehicles
     and for the construction, erection, installation, operation, maintenance,
     renewal, replacement and use of material conveying systems, including
     without limitation pipelines, through any part of the Board Premises
     necessary or convenient in order to assure the passage of equipment, raw
     materials, items in the process of manufacture, and finished products from
     the Unimproved Land to the Board Premises, including without limitation
     such rights and easements as are necessary for the movement of personnel,
     vehicles and materials among and between the various parcels of land
     comprising the Board Premises in order to permit and facilitate the
     operation of the Project;

                                      A-5
<PAGE>

          (c) An easement and right to erect, install, construct, maintain,
     renew, replace and use on, over and under any part of the Board Premises,
     such pipes, conduits, and wires as are necessary or convenient to insure
     access to and an adequate system for or supply of gas, oil, steam,
     compressed air, process and space heat, water, fire protection, sewage and
     industrial waste disposal, electricity, communications, instrumentation and
     control, and other similar facilities to the Unimproved Land and the
     Project including, without limitation, the right to make connections with
     machinery, equipment, pipes, conduits and wires, structures and other;
     improvements and appurtenances thereto, on the Board Premises; and

          (d) An easement and right to create and maintain upon the Board
     Premises encroachments of equipment, structures or other improvements which
     will be included on the Unimproved Land and within the Project as presently
     planned, and any similar replacements or substitutions of portions of the
     Project for as long as any such equipment, structures or other improvements
     remain standing, including without limitation the rights of lateral or
     party wall support, and to connect any such equipment, structure or other
     improvements to any structure or improvement on the Board Premises;

but subject to the following easements over the Unimproved Land in favor of the
Board Premises:

          (a) An easement and right for pedestrian and vehicular traffic to use
     all present and future walks, railroads, roads, driveways and docks upon
     the Unimproved Land in order to provide all necessary or convenient ingress
     and egress among and between all portions of the Board Premises and between
     the Board Premises and the Unimproved Land, including without limitation
     portions on which additional improvements may be erected, and railroads,
     public works and highways and the Chattahoochee River and to permit passage
     among and between the various parcels of land comprising the Board
     Premises;

          (b) An easement and right for the passage of pedestrians, vehicles,
     and for the construction, installation, operation, maintenance, renewal,
     replacement and use of material conveyance systems, including without
     limitation, pipelines, through any part of the Unimproved Land necessary or
     convenient in order to assure the passage of equipment, and finished
     products from one portion of the Board Premises to another or between the
     Board Premises and the Unimproved Land, including, without limitation such
     rights and easements as are necessary for the movement of personnel,
     vehicles and material among and between the various parcels of land
     comprising the Board Promises in order to permit and facilitate the
     operation of any facilities located on the Board Premises;

                                      A-6
<PAGE>

          (c) An easement and right to erect, install, construct, maintain,
     renew, replace and use on, over and under any part of the Unimproved Land,
     such pipes, conduits, and wires and appurtenances as are necessary or
     convenient to assure access to and an adequate system for or supply of gas,
     oil, steam, compressed air, process and space heat, water, fire protection,
     sewage and industrial waste disposal, electricity, communications,
     instrumentation and control, and other similar facilities to the Board
     Premises, including without limitation, the right to make connections with
     machinery, equipment, pipes, conduits and wires, structures and other
     improvements and appurtenances thereto, on the Unimproved Land; and

          (d) An easement and right to maintain any present equipment,
     structures or other improvements included within the facilities presently
     located on the Board Premises as encroachments upon the Unimproved Land as
     long as any such equipment, structures or other improvements remain
     standing, and to construct and maintain similar encroachments on the
     Unimproved Land in respect of any additional improvements constructed
     adjacent to the Unimproved Land, as long as any such additional
     improvements remain standing, including without limitation the rights of
     lateral or party wall support, and to connect such additional improvements
     to any structure or any improvements on the Unimproved Land.

DMY/BOND/AW1

                                      A-7

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